Virtual University of Pakistan

National Bank of Pakistan

Internship Report
Umeed MC08040000 (2008 – 2010)

Submitted On: September 27, 2010

VIRTUAL UNIVERSITY OF PAKISTAN

Scanned Copy of Letter of Undertaking Scanned Copy of the Internship Certificate
Pending

Dedication
I am proudly dedicating my Internship report to my Beloved Parents for all their love & guidance, which grow me in a shape that I make it up to this point. Moreover, I am dedicating my work to my teachers as well as the Internship Advisors, who filled me with courage, commitment and the awareness to follow the best possible route, by his unmatchable style and by best possible training.

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Pending

Acknowledgement
All the praises are for the ALMIGHTY ALLAH, the CREATOR of universe, the most gracious & merciful, and the source of all knowledge, wisdom within and beyond my comprehension. ALLAH is the only, WHO can help us in every field of life. I bow my head before HIM who enabled me to work on this report and helped me to complete this report successfully. All praises after ALMIGHTY ALLAH are due to HOLY PROPHET HAZARAT MUHAMMAD (Peace be upon him), the most perfect exalted among, WHO & us is forever a torch of guidance and knowledge for humanity as a whole.

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Operations Manager of the National Bank of Pakistan. Gujranwala. Executive Summary In order to interpret my knowledge and working skills. which would ultimately useful for my future career and whose cooperation enables me to compile this comprehensive report. I am heartily grateful to Mr. 4 . In this report. which I learnt from my course books. I have given a very brief review of what I have seen and felt during my internship in customer service. The aforesaid occupancy bestow me precious moments to make learning and get experience of the practice life with a successful approach. Abid Ali. Hide Market Branch.Afterward. Soon after. who confer me possibility to enhance my understanding and knowledge about the working systems of NBP. The objective of the internship was to explore the issues related to finance and the implementation of financial terms. I here by provided a golden opportunity to perform working activities at NBP for a period of 10 weeks. I have performed 10 months internship at National Bank of Pakistan. I have mentioned all of my active and passive learning in my Internship report. cash clearing account and Loan department. I am greatly indebted to my Parents and FIN619 instructor for providing me excellent guidance to successfully complete my Internship report of National Bank of Pakistan.

I have also performed the Financial Analysis of 3 preceding years and commented on the entire picture of the organization. I have discussed about my learning skills and capabilities in the whole tenure that is all about the Banking Terminologies.During my internship. Table of Contents Index 1 2 3 4 5 6 7 8 Letter of Undertaking Scanned copy of internship certificate Dedication Acknowledgment Executive Summary Table of Content Brief introduction of the business sector of organization Overview of the organization Description Page 2 3 4 5 6 7-8 9 10 5 . Furthermore. Operation activities and working activities of Finance Department. I have all my practical efforts in the form of this manuscript that’s the asset for my future career. large deposit. Moreover. I have made it possible to write each and every thing that I have learnt over there. automatic operation. online banking and Islamic banking. I conclude the strengths of the organization as good dynamic environment.

History Nature of organization Business volume Services and Offerings Competitors List 9 Organization structure Organizational Hierarchy Chart Number of employees Main offices Introduction of all the departments Comments on the organizational structure 10 Plan of your internship program A brief introduction of the branch/head office where you did your internship Starting and ending dates of your internship The departments in which you got training and duration of your training Training program Detailed description of the department you worked in. Detailed description of the tasks assigned to me Structure of finance department Department hierarchy Number of employees working in the finance department Finance & Accounts Operations 13 Functions of the Finance Department Accounting system of the organization Finance system of the organization Use of electronic data in decision making Sources of funds Allocation of funds 14 Critical analysis 10 11 11 12 15 17 17 17 18 18 21 22 22 22 22 23 23 31 33 33 33 33 34 34 34 34 35 36 37 6 11 12 .

it had acquired a flourishing banking sector. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. Banks in Pakistan account for 95% of the financial sector. which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors.Financial Ratios Liquidity Ratios Leverage Ratios Profitability Ratios Activity Ratios Cash Flow Ratios Bank’s Special Ratios Horizontal Analysis Vertical Analysis Industry Analysis Trend Analysis Future Prospectus of NBP 15 16 17 18 19 SWOT Analysis of organization Conclusion Recommendations for improvement References and Resources Used Annexure 37 37 39 42 46 47 48 50-52 52-54 54 55 56 57 61 62 63 64 Brief Introduction of NBP’s Business Sector The business sector of National Bank of Pakistan (NBP) is “Banking Sector”. Banks play very important role in the economy of a country and Pakistan is no exemption. Pakistan has a well-developed banking system. 7 . By 1970.

6%.40 million in 1950.2002 by United Kingdom and is the bank of the year for 2003-2004 of Pakistan. Pakistan has been ranked 2nd in performance and efficiency indicators among the South Asian countries by the World Bank. of Pakistan and later on moved to modern commercial banking. The Government only owns the National Bank but 80% of bank assets are in private sector. There are 68 scheduled banks of which the top five have 50% of the market share. NBP works as an agent to ‘State Bank of Pakistan’ and has its Head Office at Karachi. which was one third of the total scheduled bank’s credit. is currently under a wave of Mergers and Acquisitions (M & As). Banking industry.It was incorporated in 1949 under the National Bank of Pakistan Ordinance 1949. 4 trillion. Initially. The contribution of banking sector to GDP ratio is 55.The era of 90s was the climax of privatization. NBP advances have reached to rupees 554.” Overview of National Bank of Pakistan 1. 8 . deregulation and restructuring in the domestic banking industry and financial institutions. Banking assets rose threefolds over the last five years and the industry size are reaching Rs. in Pakistan. along with more than 1250 branches in all over the Pakistan. NBP has been declared as the best bank for 2001. Brief History of NBP The National Bank of Pakistan is one of the largest commercial bank of Pakistan . Syed Salim Raza has recently said that “Pakistan’s banking industry has tremendous potential for further investment in the financial sector of the country. The Governor State Bank of Pakistan. it was owned by Govt.

France. Canada. Discharging their responsibility as a good corporate citizen of Pakistan and other countries. Adopting the best international management practices. NBP is the main business partner for the Government of Pakistan. Kyrgyz Republic. Germany. Ltd and affiliated of Japan Credit Rating Agency for 2001 and 2002 respectively. NBP further 9 . Maximizing Stake holder’s value. Japan. Turkmenistan. highest standards of service quality. China. through aggressive and balanced lending policies and technologically oriented products & services. international best practices and social responsibility. NBP has extended its area of services beyond the country. NBP has been awarded with AAA and AAA+1 rating by JCR-VIS Credit co. Vision Statement The vision statement of NBP is. Kazakhstan. Afghanistan.” Mission Statement The mission statement of NBP is that “NBP will aspire to the values that make NBP truly the Nation’s Bank”. with special emphasis on fostering Pakistan's economic growth. Bahrain. The branches of NBP is spread all over the world. “To be recognized as a leader and a brand synonymous with trust. Bangladesh. 2. The bank is engaged in providing commercial banking and related services in Pakistan and overseas. which includes USA. Uzbekistan and Azerbaijan. Hong Kong. Nature of the Organization National Bank of Pakistan provides both commercial as well as pubic sector services. Egypt. Creating a distinctive brand identity by providing the highest standards of services. through:      Institutionalizing a merit and performance culture. NBP is serving as a lead player in the debt equity market.Moreover. South Korea.

4031 75.752 14.6517 0.consolidated its position as one of the top players in corporate and investment banking of the country in 2007 and has built a strong customer relationship with the premier corporate clients.0065 0.338.9374 1.012.6304 0.347 5. The role of the Financial Institution Wing is. thereby contributing to the bank's profitability  Generation of incremental trade-finance business and revenues.856 38.089.089.396 54. treasury and other key business areas. Additionally.237 17 335 34 3 Shares Held 4.881 10.644 10.409 809.9374 10 .9885 5.5315 4.639.089 50. NBP have recently set up the Financial Institution Wing.300.116 22.752 %age 0.838 10.   To effectively manage NBP's exposure to foreign and domestic correspondence Manage the monetary aspect of NBP's relationship with the correspondents to support trade.604.408.194 60.3767 0.0448 5. which is placed under the Risk Management Group.069. Business Volume The Issued.0190 3.1979 0. Categories Of Shareholders Government Of Pakistan State bank Of Pakistan Directors CEO & Children Associated Companies Executives NIT & ICP Bank DF And NBPF Insurance Companies Modaraba & Mutual Funds General Public Local General public Foreign Others Foreign Companies NIT & ICP No.808 69. subscribed & paid up capital of National Bank of Pakistan is as follows.0005 0.0021 0.356 204. of Shareholders 3 1 1 2 22 3 40 24 41 16. 3.818.

A. E. speedy and reliable way to transfer money through NBP's Demand Drafts at very reasonable rates. Demand Drafts NBP provides a safe. security. B. Traveler’s Cheques Pak Rupees Traveler's Cheques are a negotiable instrument 11 Negotiability: . Its goal is to “To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products. and ease of transaction to commercial enterprises. a secure and easy way to move your money from one place to another. D. NBP’s Services and Offerings National Bank of Pakistan mainly offers. Letter of Credit NBP is committed to offering its business customers the widest range of options in the area of money transfer. Mail Transfers NBP mail Transfer service helps to move money safely and quickly with competitive rates in the market.Moreover. NBP has a highly skilled team with years of banking services experience. Pay Order NBP provides another reason to transfer the money using Pay Orders.   The lowest rates on exports and other international banking products Access to different local commercial banks in international banking An overview of services provided by NBP is as follows. Any person whether an account holder of the bank or not. can purchase a Demand Draft from any of the branch of NBP.” 4. C. NBP provides the service of Letter of Credit with competitive rates.

Strict monitoring of the system is done to ensure the highest possible security. SWIFT System 12 . Foreign Remittance To facilitate its customers in the area of Home Remittances. Special courier services are hired for expeditious delivery of home remittances to the beneficiaries.   Zero Tariffs: NBP is providing home remittance services without any charges. They are the customer's best resource in making NBP's products and services work for them. G. There is no restriction on the period of validity At 700 branches of NBP all over the country At all 400 branches of NBP No limit on purchase NBP Traveler's Cheques are the safest way to carry our money Commercial Finance NBP’s dedicated team of professionals truly understands the needs of professionals. Bank Al-Jazira and Saudi Arabia.. agriculturists. National Bank of Pakistan has taken a number of measures to: Increase home remittances through the banking system  Meet the SBP directives/instructions for timely and prompt delivery of remittances to the beneficiaries In order to include new features. H. besides United National Bank (the joint venture between NBP and UBL in UK).Validity: Availability: Encashment: Limitation: Safety: F. large & small business and other segments of the economy. the existing system of home remittances has been revised significantly to provide efficient and reliable home remittance services to nonresident Pakistanis at 15 overseas branches of the Bank.

L. The SWIFT Center is operational at National Bank of Pakistan with a universal access number NBP-PKKA. Using the NBP network of branches. It is a current account scheme and is part of the profit and loss system of accounts in operation throughout the country.A) The scheme of National Income Daily Account was launched in December 1995 to attract corporate customers.D. NBP's rates of profit are extremely attractive. All NBP overseas branches and overseas correspondents (over 450) are drawing remittances through SWIFT. NBP is involved in the following:   Investment into the capital market Introduction of capital market accounts (under process) NBP's involvement in capital markets is expected to increase its earnings. K. along with the security and services.I. which eliminates the manual application of tests that often cause delay in the payment of home remittances. I. National Income Daily Account (N. The system has built-in features of computerized test keys. customers can safely and speedily transfer money for our business and personal needs.The SWIFT system (Society for Worldwide Inter bank Financial Telecommunication) has been introduced for speedy services in the area of home remittances. J. The bank is now regarded as the most active and dominant player in the development of the stock market. which would result in better returns offered to account holders. only NBP can provide. Trade Finance & Other Business Loans 13 . Equity Investments NBP has accelerated its activities in the stock market to improve its economic base and restore investor confidence. Whether customers invest for 3 months or 1 year. Short Term Investments NBP now offers excellent rates of profit on all its short term investment accounts.

Competitors of National Bank of Pakistan          Allied Bank Limited Bank Al-Falah Limited. commitment and pride of farmers who produce some of the best agricultural products in the world.     Working Capital and Short Term Loans Medium term loans and Capital Expenditure Financing Loan Structuring and Syndication Cash Management Services 5.     Agricultural Finance Services Agricultural Credit Farm Credit Production Loans Corporate Finance Following are the types of Corporate Financing by NBP. Following are the types of Agriculture finance. Bank of Punjab Limited Habib Bank Limited United Bank Limited Muslim Commercial Bank Limited Standard Chartered Bank Limited Askari Commercial Bank Limited Bank Al-Habib Limited 14 .Agriculture Finance NBP provides Agricultural Finance to solidify faith.

Organizational Structure a) Organizational Hierarchy Chart 15 .

b) Number of Employees In 2009. The Board of Directors of NBP is as follows. all over Pakistan. there are 16.   Syed Ali Raza (Chairman & President) Mr.248 numbers of employees working in National Bank of Pakistan. Tariq Kirmani (Director) 16 .

Where else in Special A/c’s profit is given on certain rules. therefore.com. Special saving accounts i. and there are numbers of those accounts.pk d) Introduction of all the departments The Directors and Management of National Bank of Pakistan recognized the worth of specialization and division of work. 17 . Karachi. Whereas in Current A/c Profit is not given semi-annually. 1.I. this A/c is specially for businessmen. I. Phone: +92 (21) 9921 2100 (50 lines) Website: www. Current Accounts. Ekhlaq Ahmed (Secretary Board of Directors) c) Main office National Bank of Pakistan NBP Building.   Mrs. like monthly basis profit system on fixed percentage of ratio of amount. Like providing certain free of cost services etc. These departments are discussed here under one by one. so that’s why special waivers are given to them according to nature of the account.nbp. Deposit Accounts Deposits are those accounts in which customers keep their savings. like PLS Saving Accounts.e. a number of departments have been established to cope with changing and competitive environment. Usually bank gives semi-annually profits on PLS Saving Accounts as well provides there customer with certain more facilities. Nazrat Bashir (Director) Mr. Premium Saving Accounts and NBP Premium Amdani Certificates. Haniya Shahid Naseem (Director) Ms. Pakistan. Chundrigar Road.

Agriculture Finance. Corporate Finance.e. Treasury Refund and Taxes Refund proceed through the bank. Running Finance. 5. This way NBP is serving great job of revenue collection from public. Revenues. Cash & Gold Loan. 4. NBP gives loan to borrowers for their personal or business usage. Benevolent Fund. At the same time bank is giving advances for various sectors for various tenure. Government Fees. Export Import Financing. Taxes. In advances. like pledging of land. Abyana. It may be long term as well short term. Receipts for Government: National Bank of Pakistan is also acting as an agent of Government in the act of receiving of government receipts. mortgage loans etc. salaries of almost every Govt. . In this department all types of Government receipts i. Agriculture Tax. loans are given to the party under some guarantee. which are given for various sectors for various tenures. Zakat. Demand Finance.2. Personal Loans. Loan Facility (Advances): Advances are one of the types of loans. EOBI Funds and Utility Bills are deposited. 3. Remittance Facilities: This department deals in transfer of money from one place to another or country by:    Demand drafts Mail transfer Telegraphic transfer 18 . are here as under… Small Finance. Government Payer: As National Bank of Pakistan is the main Government bank. Advances for personal usage are low as compared to business use. House Building Finance (Saiban) and NBP Karobar Scheme etc. Some of the forms of advances. so because of this reason it is functioning as an agent of SBP. dept. All types of Government Payments like pension. Cash Finance.

Islamic Banking Islamic banking operation came into existence from year 2007.200 plus conventional branches and looking into strategic acquisitions for expansion in this field. for this purpose NBP is playing great role for collection of FBR (CBR) taxes/revenue. FBR Collection Department Federal board of revenue’s collection is one of the very important sources of government’s income. Mail Transfer. Telegraphic Transfer.e. It is centrally controlled by the main head office. means all the transactions are further treated by the head office. Sub-chest and Non-chest branches in the bank. Bank draft. A separate counter is established at branch level to facilitate the taxpayers. Cash Department: National bank deals Government treasury on behalf of State Bank of Pakistan. Bills / Traveler Cheques Customers collect their money/amount through bills. Draft and Western Union Money Transfer etc. 6. They present their cheque. Govt. There are Chest. two more Islamic banking branches at Lahore and Peshawar started operations. 7. in addition to active participation in various Sukuk transactions. 8. utilizing NBP’s existing branch network of 1. Coupons. drafts and other bills for collection within the city and out of the city through mail. as well the main function of this department is to controlling of the spoiled currency noted in the market and it possible that everybody should get good quality of currency notes (sorted notes). NBP’s plans for the year 2010 include opening of Faisalabad and Rawalpindi branches with the focus on growing organically by opening more standalone Islamic banking branches. 9. SBP supplies currency notes to the bank and monitors its cash flow. Now a day’s Online Banking is becoming more popular for this purpose but the branch where I got training is still not have this facility.People send their money to the other persons and organizations through various way i. It works both inward and outward. 19 . During the year under review.

The effectiveness of its management. this department facilitates its customers to feel at home. It is purely because of the interrelated working efficiency among its departments. their willingness to take advantage of opportunities and face challenges of changing economic picture is really appreciable. for the devotion and hard work of all the employees of the company. including Oracle E Business Suite Financials. Now days. National Bank of Pakistan uses the most reliable versions of financial software. the “Information” is the key to success in the business. each of its department deals with its own responsibilities and contributes in the strategic. tactical. Online Banking The functioning of this department is the online linkage of other branches with each others. the rapid appearance of technology played a vital role in the efficiency and effectiveness of the business. Plan of my Internship Program a. The ‘Technology’ replaced the manual power and probably plays a major role to enhance and expand the business. A brief introduction of the branch where I did my internship I have performed my internship in National Bank of Pakistan at: 20 . In order to achieve the levels of technology and keep itself in the race of progress. Moreover. I came to know that the company’s progress has mainly attained through dedication of employees. This means that the successful businessman will be who will have the right information at the right time. and operational planning of the business. In order to achieve the goals of NBP. because with the help of online.10. In tenure of my 10 weeks. e) Comments on the Structure of National Bank of Pakistan The structure of National Bank of Pakistan is tremendously competitive. in this era of technology.

Gujranwala 0850 Gujranwala 13 Hide Market. Payments and Receipts (2 Weeks) Training Program a. 1. Deposit of Current and PLS Saving Accounts (2 Week) 2. Remittances and Bills (2 Weeks) 4. Gujranwala 0554-9230038-9230028 Miss Afaira Amir Nisar Ahmed Abid Ali b. Feroz Wala Road. I got training in various departments of the branch. Account Opening (2 Weeks) 3. and Ending date is July 15. 2010. 2010. c. 21 . Govt.Name of Branch Branch Code Region Region Code Address Phone # Name of Manager Name of My Supervisor Name of Operation Manager National Bank of Pakistan. Detailed description of the operations / activities performed by the department(s) I worked in. Starting and Ending dates of my Internship Time duration of my internship at National Bank of Pakistan is 10 weeks. Names of the departments in which I got training and the duration of training During my internship period at NBP.   Starting date is May 01. A brief introduction of these departments is as under. Utility Bills Collection (2 Weeks) 5.

1. I have acquired the knowledge regarding the dealings of this department with opening current and saving account for its corporate customers and deals with all other matters. the person gets himself verified through NADRA in order to opening of an account. Confirmation from NADRA At first. to fill. who already have an account in NBP.g. the customers have to bring some reference of those. the name and account number is written on the space provided on the sample signature card. Some important information regarding customer e. Form of Opening an Account On confirmation. National Bank of Pakistan has subsequent kinds of customers under this department. Here. NBP has PLS Term account. such person has been provided with an application form.      Trust Staff Firm Company Individual In order to opening of an account following general practice have been followed by the NBP. Account Opening Department: In this department. All theses interrelated departments performing their particular responsibilities and make their required contribution in achievement of its goals. B. detail description of the operations and activities of the departments where I have conduct my internship report. A.National Bank of Pakistan uses dissimilar departments to execute its tasks and functions with the harmonization of work force with the help of available resources and technology. Moreover. 22 . known as Account Opening Form. Premium Saver account.

      Title of Account Address CNIC Number NTN Number (if available) Profession Telephone number may be of office. In order to avoid Zakat deduction the customers have to submit affidavit/declaration as per zakat rules. Deduction of Bank Service Charges 23 . PLS SNTDR account.  Accounts of special customers – it includes Proprietorship Account. Current Account. Trust Accounts. Corporate Bodies. C. PLS Saving and NIDA account. mobile or residential National Bank if Pakistan has accessible services to following types of individuals. Partnership Account and Limited Company Accounts. Govt.Premium Adman account. D. Societies and Associations. Minor account and Illiterate Person’s Account. Account of clubs. Call Deposit account. Zakat Deduction Accept current account.  Accounts of general customers – it includes Joint Account. The account opening form has following particulars. Signatures of the applicant Signature of the applicant has been saved for future verification. E. Institutions. the aforesaid department deducts the Zakat on each type of account. on 1st day of the Ramzan at the rate of 2.5%.

Rs. officials below rank or not having IBS number are not eligible to counter sign it. Persons who are using thumb impression.is the minimum amount which should be kept by the customer in his account. Following are the persons. G.     Employees of the Government Pensioner Student Widows State Bank of Pakistan now authorize all the banks to deduct service charges on all types of accounts when the balance of the customer become less from 5000/-. F. 5000/. this card is always counter signed by an official of bank having IBS number.per month is deducted from the customer's account. it is very important for them to visit personally for every transaction done from their account. this is a card on which specimen of signature will be obtained from depositor at the time of opening of account (once).This department of NBP also makes deductions of bank service charges as per bank's tariff. 55/. Specimen Signature Card (SS card) After getting relevant thing there comes the turn of SS card. To reduce the risk of frauds and misuse of the cheques of an illiterate person the specimen signature card and account opening form both are stamped by the Personal Visit stamp. For illiterate person a recent picture of the newly account holder is taken and attached with SS Card. as they cannot sign so for that purpose except sign there thumb impression is taken along with picture. Account Opening Register 24 . A specially designed card is used for this purpose. who are relaxed from the deduction of bank service charges.

First cheque book is issued to customers who get the letter of thanks and requests for the issuance of cheque book. To confirm the address.   I. NIC number in account opening register. Following are the key reasons for the issuance of ‘letter of thanks’.After taking signature / thumb impression. the account has been opened. J. Documents Enclosed by Customer at opening of account 25 . A Cheque book consists of:   PLS 25 leaves or pages per order CD 50 leaves or pages per order A special cheque book register is maintained by the bank to enter the name of person having cheque book. to the customer for opening the account in their bank. In this book all types of transaction are recorded like withdrawal and deposit in a proper date wise manner. a ‘Letter of Thanks’ has been generated by the system and delivered to such customer. Issuance of Letter of thanks Once. H. It is also signed by the customer when cheque book is handed over to the customer. Issuance of Cheque Book The cheque book is issued to all customers having account in bank or to those who want to avail the facility of cheque book. K. To say thanks. Pass Book Pass book is be known as the record book which is handed over to the customer at the time of opening of account by bank. provided by the customer while opening the account. and first cheque book after opening of new account is issued free of cost. it is necessary to write the name.

Copy of company’s memorandum and articles of association List of directors Copy of board resolution Certificate of incorporation Their signature cards Certificate to commence business Power of Attorney. Stamping and Scrutinizing 26 . Society or Association. Following is the detail of documents generally required to be attached by the customers. Trust Account.All the customers on opening of account will have to submit the required documents as per the status of Individual Account. Agent Account and account for Club. etc.                  Application form Copy of CNIC/NICOP/POC Copy of driving license in case CNIC is without photograph Applicant photograph and VNIC copy Copy of service card/ evidence of employment in case of salaried person Photographs in case of illiterate person Zakat exemption declaration Evidence for exemption of account from levy of service charges Proof of age in case opening of account with minor Copy of any utility bill. Companies Account. Partnership Account. L.

the account is closed and his balance is paid to him after deduction of account closing charges i. Where the deposit slip is proves validate. Moreover.   Reconciles the amount on cheques or in cash with the amounts on deposit slips. In current account. B. The officer under his full signature authorizes all cash withdrawals. the customer is required to submit an application for closing of account. where the account is maintained. The presence of the accountholders is compulsory to get 27 . M. His signatures are verified before giving him a new cheque book. Issuance of Cheque Book The accountholders request for the new cheque books by presenting the requisition slips along with the authority letter to the concerned office.e. C. 200 and the application is filed in Account Closing File. Deposits The procedure undertaken upon receiving deposits from the customers is as follows:  Examining the deposit slip to ensure that the name and the account numbers are clearly indicated. Closing of Accounts In order to closing of account. the bank does not offer any interest. the cash transaction. Deposit of Current and PLS Saving Accounts A.. balance transferring or clearing transfer has been made and appropriate counterfoil is handed over to the customer. the remaining leaves of cheques will also be collected from the customer. Withdrawals The withdrawals can be made only at the branch. On satisfaction of application.After the fulfillment of all the necessary terms and conditions and checking of the form the relevant officer of Account Opening affixes the required stamps on the Account Opening Form and comply all the formal rules and regulations. No third party withdrawal is permitted. 2. Rs.

The whole procedure of clearing takes about 2 days to be completed. Main branch sends these cheques to the state bank of Pakistan. But if he sends a third person to get his cheque book then the procedure is as follows. The accountholders verify the signature of the third person on that authority letter. the representatives receive their cheques and go back to their bank's main branch. In this clearinghouse.M.00 P. Remittances Department This department deals in transfer of money from one place to another or country by:    Demand drafts Mail transfer Telegraphic transfer In this department internees are advised to observe the working of transfer of money from one place to another place of the country by the above modes of transferring money. Clearing Department: I also have performed working for two weeks in this department. where a clearinghouse exits. 28 .  D. The statement of clearing is submitted before 1.  The bank officer gets the signature of that third person to confirm whether he is the same to whom the accountholder has sent. The main branch receives the cheques from all of its branches and makes the lots of these cheques again. The bank issues the new cheques book and authority letter is kept buy the bank.a new cheque book. daily.   An authority letter is given to the third party by the accountholder. the main branch sends these cheques to their relevant branches where the validity of these cheques is verified and the accounts of the relevant clients are affected. 3. Later on.

Grants. 5.e. Credit Department NBP give loans to the borrowers for different purposes. the NBP is serving great job of revenue collection. Bills Collection Department During my training program I spent two weeks in bills collection department. Export Import Financing. it is handed over to the applicant.e. Zakat.During my stay in this department. Demand Finance. Revenues. in this department all types of Government receipts i. electricity. water and telephone etc. Moreover. In this way. Pension. 6. Personal Loans. Government Fees. Govt. The procedure is as follows. House Building Finance (Saiban) and NBP Karobar Scheme. I observed that how demands draft be issued. Agriculture Tax. Treasury Refund and Taxes Refund proceed through National Bank of Pakistan. Corporate Finance. Abyana. First the bank receives a written request from the customer to issue a bank draft. All the details must be written clearly in ink. Running Finance. Salaries. EOBI Funds and Utility Bills are deposited. Payments and Receipts Department National Bank of Pakistan is functioning as an agent of SBP. Agriculture Finance. 4. Cash Finance. While issuing a bank draft. Here I collected utility bills like gas. These loans are given for various sectors for different periods. Cash & Gold Loan. The written request is either in banks standard form or separate paper signed by the applicant enclosed with cash or cheques covering the amount of the draft and other charges of the bank. The bank advice containing the particulars of the draft is sent to drawer branch with its necessary information and on its presentation the payment of the draft is made. 29 . After issuance of demand draft. it is compulsory that the draft should be free from alternations. All types of Government Payment i. Taxes. Small Finance. Benevolent Fund.

I just observed how they work. In order to rectify the amount. For example.Account Opening Department       Opening of an account after verification of customer from NADRA database. I was often called for opening account in case of work overloaded in this department. After getting trained. if I edited the amount of Rs 1000 instead of 10000 then cash scroll of the branch back office will not match with cash receipt register of cashier at the end of the day. 1. I used to make scroll also for matching the amounts given in BBO and cheques collected in hand. Scroll number provides great relief in case of mistakes committed in recording amounts. i. Deposit of Current and PLS Saving Account In this department.   I used to confirm the signature of account holder. 30 .b.(Details added) I have performed following tasks in various Departments of National Bank of Pakistan during my Internship. Some tasks assigned to me were as under:  I was assigned responsibility to cross check amount in figures and words written on cheques. Issuance of letter of thanks Issuance of cheque book and pass book Recording of first deposit with the bank by customer in general ledger Closing of account after receiving application from customer. we will enter the scroll number in REVERSAL column. Recording of account number and name of applicant in account opening register. Detailed description of the tasks assigned to me. computer screen will display full record of all cheques and we will find our mistake.

who already have an account in NBP. known as Account Opening Form.Detailed procedure: In this department. Premium Saver account. Call Deposit account. I used to fill account opening form for illiterate and old age person. PLS Saving and NIDA account. who could not fill their form himself properly. Premium Adman account. Form of Opening an Account On confirmation. National Bank of Pakistan has subsequent kinds of customers under this department. PLS SNTDR account. NBP has PLS Term account. The person gets himself verified through NADRA in order to opening of an account.    Title of Account Address CNIC Number 31 . The account opening form has following particulars. Some important information regarding customer e. to fill.g. Moreover.      Trust Staff Firm Company Individual A. the customers have to bring some reference of those. I have acquired the knowledge regarding the dealings of this department with opening current and saving account for its corporate customers and deals with all other matters. B. Confirmation from NADRA I did confirmation of verification of person by NADRA before opening an account. such person has been provided with an application form. the name and account number is written on the space provided on the sample signature card. Current Account.

Agent Account and account for Club. D. Trust Account. NIC number in account opening register. I used to confirm. The cheque book is issued to all customers having account in bank or to those who want to avail the facility of cheque book. Society or Association. First cheque book is issued to customers who get the letter of thanks and requests for the issuance of cheque book. A Cheque book consists of:   PLS 25 leaves or pages per order CD 50 leaves or pages per order A special cheque book register is maintained by the bank to enter the name of person having cheque book. I also record it in cheque book register and took the signature from customer against his/her name. I used to write the name. It is also signed by the customer when cheque book is handed over to the customer. Account Opening Register After taking signature / thumb impression. And I used to issue cheque book to customer after taking the signature of operation manager. E. Documents Enclosed by Customer at opening of account All the customers on opening of account will have to submit the required documents as per the status of Individual Account. mobile or residential C. and first cheque book after opening of new account is issued free of cost. Issuance of Cheque Book I have done work in this department. Companies Account. either all required documents have been provided and enclosed by customer with form or not. Partnership Account. 32 .   NTN Number (if available) Profession Telephone number may be of office.

All the details must be written clearly in ink. First the bank receives a written request from the customer to issue a bank draft. After issuance of demand draft.         Application form Copy of CNIC/NICOP/POC Copy of driving license in case CNIC is without photograph Applicant photograph and VNIC copy Copy of service card/ evidence of employment in case of salaried person Photographs in case of illiterate person Zakat exemption declaration Evidence for exemption of account from levy of service charges 2-Remittance department     Issuance and Transferring of Demand draft Mail Transfer Telegraphic Transfer Pay Orders During my stay in this department.Following is the detail of documents generally required to be attached by the customers. Documents required: 33 . it is compulsory that the draft should be free from alternations. it is handed over to the applicant. The bank advice containing the particulars of the draft is sent to drawer branch with its necessary information and on its presentation the payment of the draft is made. While issuing a bank draft. The written request is either in banks standard form or separate paper signed by the applicant enclosed with cash or cheques covering the amount of the draft and other charges of the bank. I often made drafts on behalf of customers under instructions of my training officer. The procedure is as follows.

g credit voucher. Preparing different kinds of documents required for the completion of procedure.     Collection of gas. I used to post in ledger.1. for example.000 Exchange Rate (Min) 50 .   I used to calculate interest amount charged by bank.5% 400. Exchange Rates (Commission) Pak-Rupees 1-100. amount of loan.000 Above 1000.10% 100. amount.000 100. electricity and telephone bills. Making scrolls having the customer number and the amount paid Marking totals Sending in mail 4-Credit or Finance Department  In credit department.000-1000. account number where to transfer the money is required by bank.   I used to record all details of applicant and amount of loan in computer.4% FED 16% of Exchange 16% of Exchange 16% of Exchange 3-Bills Collection Department: During my training program I spent two weeks in bills collection department. amount of interest. electricity.0. I used to calculate amount after including interest charged by bank on that loan. all the details of applicant. weight and number of tools in gold pledged against loan etc.0. Here I collected utility bills like gas.CNIC 2.In case of MT. e.0. debit voucher and insurance voucher etc. I used to take signatures of applicant and branch manager on loan form. I used to fulfill forms prescribed for gold loans. 34 . water and telephone etc. I was assigned many duties.

I worked little but I learnt a lot while working in this department. At the end of the day.100/. Following documents are required for getting advance salary:     Three Salary Slips Undertaking of Rs.000 will be financed @ 17. blank from borrower   Rate of interest is 17.Stamp paper Two reference from work colleagues ( Copy of CNIC) DDO ( Drawing and Disbursing Officer) will sign on: a) Form b) Undertaking c) Three undated cheques.5-Govt. employee only. I used to make scroll of pension payments also. I used to record the amount given on the receipt provided by the customer into pension register.50% per annum Advance salary is calculated in following way: 20 x 6000 = 120. Then after taking signatures of branch manager.  In advance salary payment. and semi govt. Payments and Receipts  I worked much in Pension payment dept.5% p/annum 35 . affixing the stamp on receipt and signature or thumb impression of receipt holder on pension register. Some features and detail of advance salary is as under: Salary Account must be maintained in the branch at least six months ago by govt. customer is asked to receive the amount from cashier.

The team of Financial & Accounts department endeavors to build a working environment through effective management practices and creative ideas. Finance Department Hierarchy Branch Manager Operation Manager Credit Officer b. which regularly review the company's requirements and converts their personal skills into efforts to continually improve the financial position & performance. It enables the management to make successful use of financial resources and human capabilities to serve customers better. 36 . Finance & Accounts Operations National Bank Finance & Accounts department consists of small but professionals’ team.Structure of Finance Department a. Number of Employees working in Finance Department Total numbers of employees working in Finance Department of NBP at my branch is 2 persons c.

All activities of accounting department are based on authenticity and deficiency. crediting amounts in accounts. decrease in capital is debit. The fast pace of today's business environment makes it absolutely essential to get your finance and accounting department automated quickly and easily. deposits and different other income schemes. These days we are living in technology age despite of Stone Age although the technology affects the internal work of organization as 37 . increase is expense is debit. Currently. decrease in expense is credit. The finance system of National Bank of Pakistan shows. Use of electronic data in decision making Information system is the fundamental system of any organization which consists of connective data of all the departments. how the bank is collecting funds. bank is collecting money through shares. Being able to produce comprehensive and tailored financial reports and balance sheets will allow you to track your revenue and expenses and see at a glance where you need to trim costs and increase revenue in order to improve profitability and meet your financial objectives. these are the principles of accounting which is also using current National bank of Pakistan by posting cheques. decrease in assets is credit.Functions of Finance Department a. Accounting System of the National Bank of Pakistan The accounting system of national bank of Pakistan is double entry which is highly recognized in banking sectors of globalization. bonds. increase in capital is credit. Finance System of the National Bank of Pakistan Tracking of your company's financial information is the key to success. NBP finance system is very strong as the NBP net profit rate is very high which shows enough customers are making investment in company business. increase in liability is credit. because these are useful for working. b. Every transaction all monetary action is verified very strictly before taking them into account. what are the sources of collecting funds and how the allocation of funds. decrease in liability is debit. c. the main GAP ( generally accepted principles) are like increase in assets is debit.

Rapidly emergence of technology increased the reliability of business world on effective Information systems.well as external work. Moreover. 38 . revenue and financial capability of previous and current years. Sources of funds Finance is the backbone of any organization. What is the overall position of National Bank of Pakistan? What is the financial performance for a period of time? What is the recruiting and staffing rate in organization? What is technical competency of staff? At what place we stand in the market? How do we consider our technicality and competency among our competitors? What can be our future planning? What strategies our company will adopt in future? Information system totally facilitates the top level management as well as middle level management. It provides capital working structure. d. inform them about strength to weakness and opportunity to threat of the organization. good will and operating activities of the organization. worth. Each and every recorded is on information system and provide help the management to take quick but effective decision making.  NBP is collecting money through shares which is giving dividend money to share holds. The Information system of National Bank provides the answers of following management questions. the NBP is collecting money through bonds which is giving fixed payment and also the principle payment back as compare to shares. used in different means for the allocation of funds to run the business as well as to avoid deficit. There are conservative method which are used for the generation of financial resource are given below. Information system is used by top management.

e.  NBP is collecting money for financing through deposits like profit and loss account. as the NBP obtains 17. NBP is collecting money through different income schemes to investment in business. like purchasing shares and bonds of different companies which has good market value and profit. current account and premium saver account. Moreover.5% interest per annum on advance salaries. NBP cash against loan through bank is taking 15. NBP uses different methods of investments and allocating its funds. Allocation of funds Offers and Products of NBP are best example of its allocation of funds. 39 .5% interest per annum. NBP is earning reasonable profit. NBP Home Saiban loan is also giving reasonable installment markup to NBP.

965) 705.347) 745.108 (25.617. Financial ratios are usually expressed as a percent or as times per period.655) (3.438) 856.861 824.629) (39. Ratio Analysis Ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements.593 (25.979) (30.758.R = Current Assets Current Liabilities 2007 762.831) (30.994.274) 2009 944.572) (44.097.Critical Analysis 1.752 715.513 1.326 (24.132 1.232.550.16 in 2007 indicates that in 2007 the bank had a high ability to meet its current liabilities out of its assets as compare to other under consideration years.217.676.316.193.554) (5.922.16 2008 817. a) Current Ratio Particulars Total Assets Less Operating Fixed Assets Less Deferred tax assets Less other Assets Current Assets Total liability Less liabilities against asset Less deferred tax liabilities net Less other liabilities Current Liability C.10385 (42.855.041) 609.003 1. The current ratio is decreasing 40 .299.9502 Interpretation Current ratio determines the short term liquidity position of an entity.269.706.939 (33.656.275.785.940.784. A.623) 782.271) (59.762 (25.204.649 645.147.831) 675. The ratio 1.384 (42.364. Financial Analysis (All the amounts are in thousands) i.192) (3. Liquidity Ratios It shows the ability of NBP to cover its current liabilities with its current assets.062.

342.342.729 Interpretation Working capital is the difference of current assets minus current liabilities. But at the same time it shows that working capital is not invested in assets till this period.275. NBP have continuous positive working capital since last 3 years revealing that it has strong ability to meet its short term current liabilities.706. It means that NBP is able to generate enough sales to meet its obligations. In 2008 company working capital has decreased than 2007 to finance its operations but increased in 2009 as compare to 2008.C= Current Assets – Current Liabilities 2007 705.798 70.05 Interpretation This ratio shows the amount of cash required to maintain a certain level of sales. This measures the short term solvency position of the company.752 675. which reflects negativity on liquidity.87 2009 77.136 2008 745. The Positive Working Capital means firm has more Assets against Liabilities while the Negative Working Capital shows that company is not in a position to pay its current liabilities when they occur.697 74.617. 41 .10385 and 1.136 0.168.481 95.569.749 2009 856.53 2008 60.513 95.491.168.132 74.749 0.784.861 782.729 1.947.785. This high ratio indicates inadequate working capital. This on one end is a positive sign also that assets are properly utilized. This ratio is increasing with the passage of time.942.003 70.09502 respectively which means NBP is decreasing its ability to meet its current obligations b) Sales to Working Capital Ratio Particulars REVENUE / SALES (NET) Working Capital Sales to Working Capital 2007 50.649 609.491. c) Working Capital Particulars Current Assets Current Liabilities W.with the every year 1.364.

503.451.000.079 2.503.078 19.070 / 23.299.080 = 42. 2.897 45.070 23.580 14. depending on the company and the industry.391.814.502.95.232.326 2009 824.300.078 / 19. This indicates the number of times interest is covered by the profits available to pay interest charges.080 2. giving an idea of how changes in output will affect operating income.502.501+14. Interpretation Time interest earned indicates whether the business has earned sufficient profits to pay its periodical interest liabilities or not.B.95 times more than its interest expenses dur2ing last 3 years.513.079 = 42.95 2008 23. b) Debt Ratio Particulars Total Debt Total Assets 2007 645.513.108 817.855. Leverage Ratios A ratio used to measure a company's mix of operating costs.060.897 = 45. /interest exp.451. Here the Time interest earned ratio of NBP indicates that the company earned profit 2.384 944.513.391.762 42 .939 762.391. a) Time Interest Earned Ratio Particulars Earning Before Interest & Taxes Interest expense Earning before tax.502.080 42.18 2009 22.676. the mix will differ.079 42.814.897 1. Fixed and variable costs are the two types of operating costs.95 Note: Interest expenses of 2009 are correct.173+23.998+19. 2007 28.758.593 2008 715.580 / 14.18 and 1. This shows that the Company has average strong ability to meet its financial cost.193.

426 69.324 2008 715. It indicates that 85% of the company’s total assets are financed through the debts of the company in 2007.70 Interpretation Debt to Equity ratio indicates the relationship between the external equities or outsider’s funds and the internal equities or shareholders funds.919 8.270.002 8.071. It means it have low financial risk.367.919 0.002 0. NBP have high debt to equity ratio indicating that NBP is highly financed with internal funds.384 94.631 9.31 Interpretation 43 . d) Total Capitalization Ratio Particulars Long term Debts Owner Equity Long Term Debts / (Long term debts + Owner Equity) 2007 36.324.270. c) Debt to Equity ratio Particulars Total Debt Total Equity Total Debt / Total Equity 2007 645.105 81. as compared to 2007.80 and 8.855. This ratio has been increased in 2008 and 2009.676.108 81. which is not good.252 94.33 2009 42.34 2008 39. It indicates how much the company is leveraged.631 0.939 69.682.299.312.791.70 times of company’s own equity respectively.Total Debt / Total Assets 85 % 87 % 87 % Interpretation A metric used to measure a company's financial risk by determining how much of the company's assets have been financed by debt. This ratio measures solvency and determine the capital structure of a company.80 2009 824. It shows that company debts are 9.367. 8.791.

965 =56.922.994.729 119.994.491.944 =84.831 =39. 44 . By using this ratio. Long term debt VS long term asset Particulars Long term Debts 2007 33.973. investors can identify the amount of leverage utilized by NBP and compare it to others.595 25.Total Capitalization ratio shows the financial leverage of the bank.917.459.629+ 42.623 =42. This ratio computes the proportion of a company's long-term debt compared to its available capital.168.337.84 2008 25.979 + 30.316.041 =30.922.556.31 % 2009 74.378 62.554+ 30.917.965 =56. to analyze the risk exposure.73 2.105 25.A – C.218 93.00 2009 42.940. It is concluded that long term debts of NBP are slightly decreasing year by year as compared to its total available capital. Share holders consider this ratio while in a company.269.192+ 59.136 102.18 % Interpretation This Ratio determines how much company is earning against its investment.979 + 30.19 % 2008 70.438 Long term Assets e) Current Worth / Net worth Ratio corrected Particulars Current worth (CA-CL) Share holder fund Current worth (C.312.147.L) / Owner’s equity 2007 95.630 1.749 116.654 60.274+ 39.252 25.682.656.944 Long term debt/total asset 1.342.463.

in 2009 the earning against investment have been slightly increased as compared to 2008.NBP is earning against its Investments are greater in 2007 but rapidly fall in 2008. 45 . It is decreasing with every passing year from 1.114 to 0732 in 2008 and 0. f) Fixed Asset ratio / Equity ratio (corrected) Particulars Net Fixed Assets Long term Funds(long term liabilities and net worth) Owners Equity Total assets (Net Fixed Assets/Long term Funds/Owners Equity/Total assets) 2007 25905823 255914060 69270631 762193593 2008 24205805 332388997 81367002 817758326  2009 25112132 381705171 94791919 944232762  1.655 in 2009. Where as.114 Working of Fixed Assets: Particulars Capital work in progress Property & equipment Intangible assets Operating Assets/ total fixed assets/net fixed assets 459487 25454914 8578 25905823 2007 2008 1016513 23195217 5925 24205805 2009 1472451 23657211 17530 25112132 Interpretation Fixed Assets ratio to equity ratio is better in 2007 than coming year’s equity investment.

030 60.481 66 % 2008 37.470 50.629.773 50.211. This ratio measures the overall profitability of the company. 46 . The profit margin indicates how much profit a company produces against every one Rupee. NBP have sufficient profitability ratio (37.C.64 % 2008 15.942.33 % Interpretation Gross profit ratio may indicate to what extent the selling prices of goods per unit is reduced without increasing losses on operations.697 49.947.798 61 % 2009 38.36 % 2009 18. b) Net Profit Margin Particulars Net Profit Sales Revenue Net profit / Net Sales * 100 2007 19.697 23.798 25. Profitability ratios are of two types.058. a) Gross Profit Margin Particulars Gross profit Sales Revenue Gross profit / Sales Revenue *100 2007 33.033.048 77.846 77. Gross profit ratio of NBP in 2007 is good but decreasing with every next year which a bad signal from NBP. these ratios indicate the firm’s overall effectiveness of operation.481 37.36 % Interpretation This is the ratio of net profit after taxes to net sales.947.458. It reflects the efficiency with which a firm produces its products.590 60.942. Gross profit margin indicates how well the company can generate a return at the gross profit level.458.64%. Profitability Ratios Profitability ratios measure the earning ability of a firm.569. Together.those showing profitability in relation to sales and those showing profitability in relation to investment.569.

07 2009 77.36% respectively) but decreasing with every passing year. It is a taxable income.697 29% Interpretation Pretax margin means how much the NBP is earning after the operating. If both of these have been well managed then the sales would go up or vice versa.947.173 77.569.36%.942.326 0. But due to increased amount of assets and less increase in sales as compared to increase in assets the NBP total asset turnover ratio has decreased in 2009.798 817. The net profit ratio has fallen than previous years due to heavy cost of sales.998 60. NBP is earning 3. This ratio measures the activity of assets and the ability of the firm to generate sales through the use of assets.060.07 2008 60.798 38% 2009 22. 47 .942. Higher ratio is better for business.08 Interpretation This ratio indicates that how well the NBP has used its total assets in generating sales.762 0.593 0.758.48% 2008 23.569.76.481 762.481 55.697 944. c) Assets Turnover: Particulars Sales Revenue Total Assets Sales Revenue / Total Asset 2007 50.11% than its sales of amount Rs.399.501 50. d) Pretax Margin Particulars Pretax Profit Net Sales Pretax Profit / Net Sales * 100 2007 28.25.193. Now company will determine its tax rates and procedure to be followed.947.232. and before tax other financial costs.300.000. 642. 23.

458.458.655 2.192 3.217.93 % 48 .922.979 73.942.798 24.590 817.762 1.52 2009 77.846 944.89 % 2009 18. f) Sales to Fixed Assets Particulars Sales Revenue Fixed Assets Sales / Fixed assets 2007 50.758.8 % 2009 18.192 72.95 2008 60.4 % 2008 15.590 24.147.593 2.211.4 % Interpretation This ratio helps in determining the ability of the management in the running business. It measures efficiency and evaluates that how effectively company utilizes its assets to generate return on them.193.569.979 1. g) Return on Assets Particulars Net Profit Total Assets Net Profit / Total Assets 2007 19.e) Return on Operating Assets Particulars Net Income Operating Assets Net income / Operating assets 2007 19.922.033.326 1.655 63.697 25.147.10 Interpretation This shows how efficiently the company has utilized its fixed assets to generate sales.481 25.50 % 2008 15.211. NBP has more efficiently utilized its fixed assets to generate sales year by year (from 2007 to 2009).033.947.773 762.232. National Bank was doing stable and generating handsome operating margin.773 25. The efficiency of utilization of NBP’s assets has been fallen in 2008 than 2007 but it is again raised in 2009 than 2008. Higher ratio is better for bank.217.846 25.

233 0.367.919 19.270. h) Dupont Return on Assets Particulars (Net Profit / Sales Revenue) (Sales / Total Assets) (Net Profit / Sales Revenue) / (Sales / Total Assets 2007 0.61 2009 0.211. It is observed that return on total assets has been fall in 2008 with respect to 2007.002 18.033.846 94.Interpretation This ratio indicates the proper and effective utilization of NBP’s resources.21 % Interpretation It determines the rate of return on the invested capital.37 2008 0. i) Return on Total Equity Particulars Net Profit Owner’s Equity Net Profit / Total equity 2007 19.99 % 2009 18.91 Interpretation This ratio measures how many dollars were generated in sales for each single dollar invested in assets.458.07 5. It is observed that the Dupont ratio ha been decreasing year by year (from 2007 to 2009). Where as. It is observed that the ROE has decreased in year 2008 with respect to 2007.07 3.791. 49 . It is used to compare investment in the company against other investment opportunities.631 27.590 81.773 69. whereas it is slightly increase in 2009 with compare to 2008.253 0.376 0.47 % 2008 15. in 2009 it is slightly increased than 2008.08 2.

481 25.569. a) Total Assets Turnover (corrected) Net Sales / Average Total Assets Particulars Net Sales Total Assets Net Sales / Total Assets 2007 50.147.D.762 8. Activity Ratios Activity ratios measure a firm's ability to convert different accounts within their Balance sheets into cash or sales. which shows efficient utilization of assets by NBP.947.95 2008 60.326 7.922.63 % 2008 60.569.655 2.942. I have rectified it now.798 817. In fact.481 762.232.25 % Note: My ratio figures.697 25. But I wrote the name of ratio incorrect by mistake.947.217. formula and working are absolutely correct.593 6.758. which I named as “Operating asset turnover” by mistake. NBP has increasing figures in this ratio with every passing year.979 1.798 24. return on operating asset ratio I already have done under profitability ratios head. Interpretation The ratio depicts whether the company is utilizing its assets efficiently or not.192 3.697 944.52 2009 77.942.193. This ratio was “Total asset turnover”.45 % 2009 77. Higher ratio indicates that firm is obtaining the optimum level of production and the lower ratio shows that firm is not managing the assets in an efficient manner. j) Fixed Assets Turnover Particulars Sales Revenue Fixed Assets Sales / Fixed assets 2007 50.10 Interpretation 50 .

532.681.676.06 Interpretation This ratio provides an indication of a company's ability to cover total debt with its yearly cash flow from operations. these are significantly increases in 2009.419.12 2008 2. It is observed that the ratio has decreased in year 2008 with respect to 2007. NBP has more efficiently utilized its fixed assets to generate sales year by year (from 2007 to 2009). 51 .681 715.100 2. b) Operating Cash Flow per Share Particulars Operating cash flow Total Shares Operating Cash Flow/Total Shares 2007 78.431.673 824. whereas it is slightly increase in 2009 with compare to 2008.451. Operating Cash flows has been severely decreased in 2008 with respect to 2007.000 896.370.975.939 0. Cash Flow Ratios a) Operating Cash Flow / Total Debt Particulars Operating cash flow Total Debts Operating Cash Flow/Total Debt 2007 78. where as. E.855.989 96.673.804.82 1.299.64 2008 2009 2.804.000 45.451.384 0.532.22 Interpretation This ratio is a useful measure for the strength of NBP and the sustainability of its business model.108 0.004 2009 45.This shows how efficiently the company has utilized its fixed assets to generate sales.000 815.200 42.419 645.076.

80 Interpretation This ratio identifies the percentage of earnings (net income) per common share allocated to paying cash dividends to shareholders.986.464.415 2009 45.435 0.66084 2009 475. And it is earning sufficient return to meet its need.804.243. b) Cash to Deposit Ratio Particulars 2007 2008 2009 52 . NBP is advancing more than from their deposits.65418 Interpretation Business of NBP mostly runs due to deposit of customers in different accounts.681 6. Bank’s Special Ratios a) Total Advances / Total Deposits Particulars Total Advances Total Deposits Total Advances / Total Deposits 2007 340.318.419 2.338 7.898 0. these are significantly increases in 2009. F.939.820.451.895 27. where as. It is the ratio which indicates what the total deposit of customers and what the advances amount means issued loan By NBP.825 0.673 5.104.907. Operating Cash flows has been severely decreased in 2008 with respect to 2007.016 0.930 591.82 2008 2.431 726. which is showing as a good financial position in market.865 624.831.c) Operating Cash Flow / Cash Dividends Particulars Operating cash flow Cash Dividends Paid Operating Cash Flow / Cash Dividends 2007 78.532.57495 2008 412.

435 0. Formula for horizontal analysis is as under: Formula = Current year value / Base year value *100 53 .756 624.10 2008 81.939.367.631 591.249 591.Cash Deposits Cash / Deposit 94. NBP still has good and stable cash /deposit ratio it can easily complete the customers deposit demand.15944 Interpretation With the help of cash to deposit ratio analyst determine the liability of business like deposits and also determine the cash available o meet the customer’s demands.270. This upward trend shows that bank’s stock of capital is increasing at greater rate than its liabilities.907. c) Equity to Deposits: Particulars Equity Deposits Equity / Deposits 2007 69.435 0.13 2009 94. Previous year is taken base year.825 0.464.939.919 726. It is conducted by dividing base year values on base year values. we judge whether the financial position of an entity is improving or worsening. Horizontal Analysis Horizontal analysis is also known as comparative analysis.002 624.503.825 0.16028 106.016 0. ii.016 0. With the help of horizontal analysis.873.170422 105.16 Interpretation Equity to deposit ratio determines the liability of an organization against its stock of capital.868 726. NBP has increased equity to deposit ratio with every passing year.827.907.791.464. which is a good sign for the solvency of NBP.

031.169 45.316.926 624.26 2.758.581 (8.564.99) 91.822 19.319 15.169 815.623 824.280) 8.188 47.19) 3559267 34462962 134557390 9075 11329582 178820429 2609383 6909583 16002322 (22302474) 50.458.549 10.07 (8.68) 28.655 3.216 7.705.318.278.593 54 .435 33.733 [2009-2007] Difference 20.75 10. 2007.564 217.73 27.994.219.81 35.047 52.062.00 43.954.827.176 591.336.88 115.807) 44.681.68 32.822.621.65 22.456.75) 39.041 645.193.902 10.023 3.038 21.568) 72.016 (25.368 10.09 5.157.68 (55.271 59.20) 21.124 45.608 170. 2008 & 2009 (corrected) Particulars ASSETS Cash and balances with treasury banks Balances with other banks Investments – net Lending to financial institutions Advances .323.65 (2.667.176 475.232.464.58 (24.831 715.324) 13.269.751 19.464.04 36.965 762.707 61.097.40 318.939.243.62 27.750 33.764.979 30.326 94.net of tax 10.159 29.346.438 944.38) 2009 2008 2007 (Base Year) [2008-2007] Difference 11.58) 43.939 8.555.067.547) (4.815.930 25.Balance Sheet as on December 31.032 412.831 30.940.29 (47.432 4.10) (20.656.554 5.268) 6496784 (1877424) 134924501 (775787) 28321473 182039169 %age 12.146.923 7.974.249 37.865 24.405.763.510 24.274 39.147.855.061.986.204 21.73 7.347 817.33 (19.443.112.629 42.907.net Other assets – net Total Assets LIABILITIES Bills payable Borrowings Deposits and other accounts Liabilities against assets subject to finance lease Deferred tax liabilities .00 26.168.344.790 69.299.382 55.17 10.587.192 3.600 340.676.491 17.941.756 38.128.344.204.825 42.154.873.29 %age 22.550.507 871.619 (9.832 211.016 25.431 25.935 (1.572 44.217.08 (24.772.643.net Operating fixed assets Deferred tax assets .71 274.067.43 15.503.108 8.092.net Other liabilities Total Liabilities Share capital Reserves Un-appropriated profit Surplus on revaluation of assets .922.969.868 28.35 (6.472.716.702 22.630.138 726.061 40.762 106.19) 3.642.776 (40.37 23.

It means bank have sufficient funds for investment in 2009 as compare to 2008. Balances with other banks are moved downward from positive 2.74 to 43.35. it means bank has not paid its bills in 2009 which caused increased liability. Share capital of bank is improved amazingly up to 32% in current year as compare to 2008 when it was 10%%.Interpretation    Cash and balances with treasury banks by NBP is moving upward from 12. Investment –net have upward trend. This increasing trend is good sign from NBP.99.40 which shows a worst condition.19. Lending to financial institutions ratio is falling from minus 20. Other liabilities are moving in upward fashion in 2009 as compare to 2008. Un-appropriated profits have terrifically improved in current year as compare to 2008. It is moving towards positive edge.62) which shows poor condition of NBP on part of liabilities.81 in current.17 – 36. Reserves also showing upward trend in current year which is good sign from NBP.26 to 22. (28. Borrowing rate is decreased amazingly which means bank has repaid huge amount of loans in current year.5 to 50.20 to minus 8. Bills payable ratios is increased from 44.58 to minus 2. It is risen from minus 19.68 .29). 55          . which means NBP has extended its advances in 2009. Which means entity is lending more to other financial institutions in 2009 as compare to 2008.10 to positive 3. It is increased from 13.33 to minus 24.07. NBP is breaking negative trend in operating fixed asset ratio by reducing from minus 6. which is an appreciable sign.75. Advances-net ratio is improved in 2009 as compare to 2008. (15.08.

249 37.097.979 30. iii.27 3.00 2007 % 12.458.33 2.005 1.822 19.176 591.865 24.827.472.82 44.45 100.831 1.587.318.69 20. each item of balance sheet is compared vertically by dividing it on total assets o respective year.07 50.621.00 56 .67 115.12 4. Overall position of balance sheet in current year is positive.061 40.756 38.032 412.464.65 3.128.344.193. Balance Sheet as on December 31.146.80 76.038 21.016 25.930 25.147.39 5.09 50. 2007.939.600 340.169 45.243.42 0.45 4. It judges the annual change in the business of the organization.01 23.176 475. 2008 & 2009 Particulars ASSETS Cash and balances with treasury banks Balances with other banks Investments – net Lending to financial institutions Advances – net Operating fixed assets Deferred tax assets .274 7.278.564 217.629 10.822.50 2.431 25.061.593 2009 % 12.438 944.965 762. Vertical Analysis In vertical analysis.02 4.464.491 17.004 0.062.192 3.66 0.405.326 2009 2008 2007 (Base Year) 94.25 4.316.138 726.902 10.94 0.28 100.762 106.832 211.05 2.815.572 44.95 76.217.554 5.608 170.907.986.550.32 6.07 100.204.89 2.219.347 817.003 0.758.435 33.503.655 3.642.92 27.70 2.net Other assets – net Total Assets LIABILITIES Bills payable Borrowings Deposits and other accounts Liabilities against assets subject to finance lease Deferred tax liabilities net 10.40 4.232.926 624.00 2008 % 13.994.271 59. Most of the items have improved in percentage.825 42.93 1.96 0.873.868 28.66 0.922.42 77.

154.067.10 2.193.Reserves also showing mix trend during 2007.772. 7.14 2.Share capital is showing fluctuating trend during all the years by NBP.831 30.87 57 .232. 11.216 817.940.50 2.758.346.623 39. 2008 and 2009.58 100.188 47. 2008 and 2009.94.702 22. 2008 and 2009.729 Debt Ratio 0.Surplus.Overall NBP has shown positive and upward trend in balance sheet against total assets during 2007. Industrial Analysis (Competitors): Gross Profit Ratio 49.707 61. 10.Net investment by NBP is slight down in 2008 as compare to 2007 when it was 23. Upward trend in 2008 and downward trend in 2009. 7.549 944. 9.net of tax Total Equity + Liabilities 10.44 6.00 1.07 2.023 762.751 19. iv.941. 3.18 100.510 24.06 Share capital Reserves Un-appropriated profit Surplus on revaluation of assets .00 1.00 Interpretation: 1.70.Bills payable ratios have mixed trend during all the years.456.681.48 4.41 2.Borrowing rate is decreased in 2009 after consistent values in 2007 and 2008.Deposits and other accounts have consistent trend during all the years which is 76.204 21.Balances with other banks ratio is improving with every passing year in NBP.269.124 45.593 1.326 8. 4. 2008 and 2009.041 4.969.70 Name of Companies NBP Years 2009 Current Ratio 1.62 100.342.Cash and balances with treasury banks have stable ratio in 2007.95 6.319 15.047 52.85 4.656.Other liabilities 42.Operating fixed assets have upward trend during all years.95 Working Capital 74.764.89 but it again improved this ratio in 200 by 27.762 8. which is a good sign. 8. 2.40 6.08 and in 2008 its 20.42 and 77. 6.66 respectively in 2007.092.344.763. un-appropriated profits and other liabilities. which is good sign from NBP.07 5. 5.33% Debt to Equity Ratio 8.

12 1.639.87 0.608.491.21 16.606.94 0.27 0.431.93 58 .82 18.330 34.93 0.763 34.80 9.992 10.678 11.87 0.75% 53.30 14.10 1.2008 2007 2009 UBL 2008 2007 2009 MCB 2008 2007 Askari Commercial Bank 2009 2008 2007 61% 66% 57% 54% 58% 33.68 13.457 7.046 35.700.94 0.87 0.10 1.90 0.136 47.16 1.05 16.06 70.847 43.07 1.749 95.80% 35% 40% 56.32 10.454 47.37 7.92 0.34 7.50% 55% 1.144.86 0.04 1.19 7.168.890.378 8.11 1.08 1.85 0.09 1.713.04 1.282.

5 0 2007 2008 2009 Current ratio Sales to Working Capital Leverage Ratios Debt/Equity ratio 10 9 8 7 6 5 4 3 2 1 0 2007 2008 2009 Total Capitalization ratio Time Interest Earned ratio Fixed Asset ratio / Equity ratio Profitability Ratios 59 .5 1 0. Trend Analysis Liquidity Ratios 2 1.v.

All calculated ratios are favorable which shows the strength of the entity and confirms its going concern.Net Profit Margin 80 70 60 50 40 30 20 10 0 2007 2008 2009 Return on assets Pretax Margin Return on Operating Assets Sales to Fixed Assets Return on Total Equity Gross Profit Margin Activity Ratio 9 8 7 6 5 4 3 2 1 0 2007 2008 2009 Total Asset Turnover Fixed assets Turnover 2. Gross Profit Ratio. There three types of ratios to check the future prospectus of the entity current asset ratio. Future Prospectus of NBP The future prospectus of the NBP is so much successful and bright. Working capital. The turnover of the entity as compared to the base year is high and its orders are more than their capacity. The ability of the company to pay off its debts is also good. All these represent an increasing trend. 60 . If we see the growth rate of the entity is increasing day by day.

It identifies the internal and external factors which help in achieving objectives of an organization. NBP makes its policies according to the government’s rules and regulations. According to my point of view. c) Area of services National bank of Pakistan has wide area of services as compare to other commercial banks in Pakistan. the SWOT analysis of NBP is as follows. NBP also conducts this comprehensive analysis annually for the betterment of organizational growth and market share. b) Government’s bank National bank of Pakistan is Government’s bank. money can be withdrawal from account at any time. opportunities and threats of an organization. weaknesses.SWOT Analysis of Organization SWOT analysis is strategic planning method which identifies the strength. Strengths a) NBP is founder of ATM National Bank of Pakistan is founder of ATM facility in Pakistan. SWOT analysis is conducted by analysts in order to determine internal and external situations of the organization. NBP is offering services including pension to retired government 61 . In this particular facility.

b) Communication Gap During the internship in NBP. sales tax . In this particular scheme money is transferred in Pakistan from abroad in a fastest way. d) Western union founder National Bank of Pakistan is first bank who started the facility of Western Union in Pakistan. especially in pension and bills department. withholding tax. They have not very much understanding with each other which adversely affects the performance of employees. Employees are not taking care of the customers. property tax. farms of AIOU. The customers are provided services at their nearest possible place to confirm customer satisfied. fees receiving of AIOU. I found the problem of lack of communication between the employees and management. g) Lack of employee’s loyalty Employee’s turnover is very low in NBP as compare to other commercial banks.employees. deposits. You can receive the money from bank by providing the name. f) Broad Network National bank of Pakistan has broad-basses network of branches throughout the country. c) Poor marketing efforts 62 . utilities bills. traffic challans. CNIC number and password of recipient client. and various loan schemes. Weakness a) Lack of Quality Public Dealing Public dealing is not very effective in NBP. e) Online banking NBP has 130 online branches. Online banking reduces time and faster the services and helps in checking the balances and daily transactions by just one key press.

Promotions and bonuses etc depend on senior’s will and decisions. Staff is not as per requirement. NBP should also avail this opportunity and take initiative in micro financing. d) Few number of Employees There is shortage of staff in NBP. there is need of micro financing in banking sector . Opportunities a) Micro Financing Today. NBP is not efficient in its performance and services. Threats a) Advanced Online Banking 63 . b) Globally Progress of Banking system Now-a-days banking system is growing quickly so NBP have opportunities to improve the standard and get the more share in the market. NBP can avail the opportunity of developed technology and online banking system in order to provide 24 hours services to customers. e) Favoritism and Nepotism There is favoritism and nepotism of senior employees in regard of promotions and bonuses. other commercial banks have already initiated this regard. world has become global village especially communication sector. Due to which . Most of the machines and computers are back dated. f) Lack Of Modern Equipment NBP is lacking upgraded and modern equipment. c) Electronic Banking Due to fast development of technology.National bank of Pakistan is not promoting its corporate image and services to the customers in a competitive and effective way.

which has traditional banking system with back dated equipments and incompetent employees. 64 . Today. c) Political instability The frequent and ongoing shifting in political arena affects the performance of NBP adversely.Advanced computerized banking is a threat for NBP. Numbers of private banks (commercial and private) are operating their business more efficiently and provide the same facilities with more speed and quality. These foreign banks are equipped with modern and computerized system and heavy financial power and innovative way of promotions. of banks is a threat for National Bank of Pakistan. b) Emergence Of New Competitors NBP is facing the threat of emergence of new competitors in from of foreign banks. customer satisfaction is highly demanded. e) Increased number of banks Increase in no. d) Customer Complaints NBP has no specific and regular system in order to remove customer complaints.

Conclusion
During my stay of 10 weeks at National bank of Pakistan, I came across the number of tasks and felt a credible and professional change in my attitude. I conclude that NBP is one of the leading banks in Pakistan. As analysis shows that NBP is a most growing organization with highest return on capital, largest market share amongst all Pakistani banks. NBP carries highest cost to income ratio as compare to all other commercial banks. But still there is need for improvement to overcome weaknesses in order to maintain its position as an “Asian Tiger” in banking field. Acting as Agent of Government or State Bank of Pakistan, providing Agency Arrangements for different government organizations including WAPDA and PIA, are the main strengths of NBP. Plus NBP is offering wide and comprehensive range of products in market. It also has been included that Employees’ Unions in National Bank of Pakistan are spending their much time in organizational politics instead of doing productive work that leads to wastage of time. As far as my training and experience is concerned, I have learnt a lot during my internship because I got practical knowledge before entering in the practical life after completion of my MBA degree.
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I learn a lot about banking practice in Pakistan, rules and regulations and different procedures followed by banks, the organizational culture and structure of the bank, National Bank of Pakistan.

Recommendations for Improvements
According my evaluation and observation during my internship at NBP, bank can make more progress by implementing following points:   Number of professional and well qualified employees should be enhanced. Staff should be trained properly and should be familiar with modern technology in order to enhance the over all performance of NBP.  In order to achieve job satisfaction from employees, their promotion should be on merit and on time according to their respective performance instead of senior’s own will.  There is need of more investment in area of innovation and organizational cultural improvements in order to improve the environment and corporate culture of bank.  It is recommended that there should be specific desk for customer’s complaints and for their information.  Bank needs to improve its sitting arrangement, air conditioning in order to attract new clients and to make their customers feel happy and comfortable.  Heavy work load can be coping nicely with the help of modern computers software and better control can be achieved.  Online facilities should be enhanced up to 24 hours.
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 

Separate departments should be established for all services in every branch. New markets needed to be located for enhancing the area of services and wide range of networking.

Interest rate on deposits should be set according to the competitors and should always be as per customer’s satisfaction and demand.

Promotional efforts need to expand by aggressive marketing. NBP should launch effective marketing plan in order to attract new customers and creating awareness among customers about NBP products.

References And Sources Used
      Mr. Nisar Ahmed (My Internship Supervisor) Mr. Abid Ali (Operations manager) Managers, Asst. Managers and Officers of other relevant Departments. Operating Procedures and System Files of each department. Auditor’s Reports and Financial Statements of National Bank of Pakistan. Website of NBP: www.nbp.com.pk

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Annexure Scanned Copies of “Financial Statements for the Year ended 2009-2008” 68 .

69 .

70 .

71 .

72 .

73 .

Scanned Copies of “Financial Statements for the Year ended 2008-2007” 74 .

75 .

76 .

77 .

is introduced by NBP with the aim to help farmers maximize the per acre production with minimum of required input. By sharing the risk associated with such long-term investments. who bring specialized knowledge to the structure of a transaction. ejection. geographic location and structure through syndicated debt offerings. farm implements or any other equipment Livestock loans for the purchase. Agricultural Credit (Medium Term):         Production and development Watercourse improvement Wells Farm power Development loans for tea plantation Fencing Solar energy Equipment for sprinklers Farm Credit: NBP also provides the following subsidized with ranges of 3 months to 1 year on a renewal basis. Cash Management Services: With National Bank's Cash Management Services (in process of being set up). we help borrowers meet substantial financing needs by enabling them to reach the banks most interested in lending to their particular industry. and feeding of livestock 78 . Agricultural Finance Services: “I Feed the World” program. This type of long term financing proves the bank's belief in its client's capabilities. Agricultural Credit: The agricultural financing strategy of NBP is aimed at three main objectives:- CORPORATE FINANCE Working Capital and Short Term Loans: NBP specializes in providing Project Finance – Export Refinance to exporters – Pre-shipment and Post-shipment financing to exporters – Running finance – Cash Finance – Small Finance – Discounting & Bills Purchased – Export Bills Purchased / Pre-shipment / Post Shipment Agricultural Production Loans Medium term loans and Capital Expenditure Financing: NBP provides financing for its clients' capital expenditure and other long-term investment needs. and supervision of farming. Our syndication capabilities are complemented by our own capital strength and by industry teams. care. the customer's sales collection will be channeled through vast network of NBP branched spread across the country. Because we understand our syndicate partners' asset criteria. In fact. commitment and pride of farmers who produce some of the best agricultural products in the World.     Operating loans Land improvement loans Equipment loans for purchase of tractors. a new product. you'll be provided everything. which takes to manage your cash flow more accurately. NBP expedites clients' attempt to upgrade and expand their operation thereby making possible the fulfillment of our clients' vision. Select farms will be made role models for other farms and farmers to follow. and its commitment to the country.TRADE FINANCE OTHER BUSINESS LOANS AGRICULTURAL FINANCE NBP provides Agricultural Finance to solidify faith. with NBP. They will also be able to take advantage of our outstanding range of payment. thus helping farmers across Pakistan to increase production. liquidity and investment services. technical knowledge. This will enable the customer to manage their company's total financial position right from your desktop computer. Loan Structuring and Syndication: National Bank's leadership in loan syndicating stems from ability to forge strong relationships not only with borrowers but also with bank investors.    Providing reliable infrastructure for agricultural customers Help farmers utilize funds efficiently to further develop and achieve better production Provide farmers an integrated package of credit with supplies of essential inputs.

fertilizers. please do not hesitate to e-mail us. sprayers. Seeds. etc are all covered under this scheme.  79 . If you require any further information.Production Loans: Production loans are meant for basic inputs of the farm and are short term in nature.

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