Professional Documents
Culture Documents
n order to be able to cope with the changing environment it is necessary to have some practical experience. As the students of Business Administration we have to pass through a series of various managerial techniques. During this practical course
we are provided with an opportunity to learn that how the theoretical knowledge can be implemented in practical grounds. I was selected to do my internship in National Bank of Pakistan Khayaban-e-Sarwar (Gadai) Branch D.G.KHAN. I worked there for six weeks & it gave me a greater practical knowledge about the operations of a bank. In the following pages I have narrated my experience, observations & all the working activities which I observed during my six weeks internship at National Bank of Pakistan Khayaban-e-Sarwar (Gadai) Branch D.G.KHAN.
ACKNOWLEDGEMENTS
I am highly grateful to almighty Allah who gave me the power to complete this report. I am also highly thankful to my honorable teachers for theirs guidance. I am very thankful to my parents, because I may be unable to finalize my internship and my internship report with out their precious prayers. I am also very thankful to all my dear friends, who cooperated with me day and night during the making of this internship report and also in its completion. I am indebted to all the employees of National Bank of Pakistan Khayaban-e-Sarwar (Gadai) Branch D.G.KHAN and special thanks to MR. Zulfikar Ali Khan, Officer Grade 1, who was manager in National Bank of Pakistan Khayaban-e-Sarwar (Gadai) Branch D.G.KHAN.
Mohammad Sarwar
Table of Contents
Chapters 1 Introduction of Sector 1.1 Evolution of banking 1.2 Definition of banks 1.3 Types of banks 2 Introduction of Organization (NBP) 2.1 Banking History 2.2 History of NBP 2.3 Branch Network 2.4 Mission Statement 2.5 Corporate Philosophy 2.6 Objectives 3 Organizational Structure 3.1 Organgram of NBP 4 Major Functional Areas Where Internship Was Conducted 4.1 General Banking 4.2 Accounts section 4.2.1 Types of Accounts 4.2.1.1 Savings Account 4.2.1.2 Current Account 4.2.1.3 Fixed Account 4.2.2 Procedure of Opening an Account 4.2.2.1 Information Required by Bank 4.2.2.2 Documentation In Case of Limited Company Account 4.2.2.3 Documentation In Case of Partnership Account 4.2.2.4 Documentation In Case of Club, Society, or Trust Account 4.2.3 Issuance of the Cheque Book 4.2.3.1 Loose Cheques 4.2.3.2 Payments of the Cheques 4.2.4 Procedure for Closing an Account 4.2.5 Routing of Expenses 4.2.6 Preparation of Daily Activity Report 4.2.7 Preparation of Daily, Weekly and Monthly Statements 4.2.8 Statement for Tax Purpose 4.3 Remittances Section 4.3.1 Instrumental Transfer 4.3.2 Electronic Transfer 4.4 Locker Service 4.5 Billing and Govt. Receipt/Payment 4.5.1 Scrolling Page # 6 7 7 8 10 11 13 14 17 18 18 20 21 23 24 24 24 25 25 25 25 26 26 26 27 27 27 27 28 28 28 29 29 30 30 31 32 32 32
Table of Contents
Chapters 5 Others Areas (Departments) 5.1 Credit and advances department 5.1.1 Credits 5.1.2 Advances 5.2 Types of Loans 5.2.1 Criteria Checked for Loans 5.2.2 Procedure for Sanction of Loans 5.3 Computer Section 5.3.1 Types of Branches 5.3.2 Evening Data Receiving Centre 5.4 Consumer & Retail Banking Section 6 7 8 9 Financial Analysis 6.1 Ratio analysis SWOT Analysis Recommendations Annexure 9.1 List of Standard Books 9.1.1 Registers 9.1.2 Vouchers and Scrolls 9.2 References Page # 33 34 34 35 36 38 42 44 44 44 45 48 49 51 55 57 58 58 59 60
Executive Summary
Modern Banking
Banking in its modern form and structure stared in Britain when many of the Lombardy merchants came to England in the fourteenth century and settled in the parts of the city of the London now called Lombard Street. The king Edward III established the Office of Royal Exchanger for changing foreign money at a profit for the benefit of the Crown In 1854 the joint Stock Companies Act opened an era of corporations; and the Limited Liability Act, 1855, restricted the liability of the share holder of the limited company to
Commercial bank: The commercial banks received deposits from the general public, which are repayable on demand upon written orders of the depositors. As their most distinctive feature the commercial banks maintain the checking accounts for the constitutions. The commercial banks are also distinguished for providing short-term finance to trade, commerce and industry to enable these sectors to expand their productive activities Merchant banks: Merchant banks are those, which have been mainly financing the domestic and international trade. During the late 18th and early 19th centuries the trade between countries was financed by bill of exchange by well-reputed merchants houses for which they would charges a commission for their services Savings banks: The basic purpose of these banks is to inculcate the habit of saving in the people the savings banks deposits are not repayable upon only the written order of depositor but the depositor of his agent has to appear personally at the saving banks to make withdrawal and for this purpose he must present a pass book a certificate of deposit or some similar documents to prove his right to receive his payments. Post office savings banks and savings accounts at national saving organizations are well known national saving banks in Pakistan.
Mortgage banks: These banks mainly deal in loans for acquisition or construction of real estate against the securities of mortgage. Consumer banks: These banks providing finance for purchasing consumption goods for the use of the customers daily usage. Investment banks: These banks assists business houses and governmental bodies to raise money through the sale of stocks and bond for usually long term purposes these banks perform the usual functions of raising deposits of idle money from the public and finance the business houses other bodies. Central banks: Central banks occupy the unique position in banking structure of a country because they have been interested with the responsibility of controlling the money supply, interest rate, and financial market of a country for the purpose of economic development.
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Each bank has to open at least one central office in Pakistan where it could consolidate work of all its branches and start paying out to depositors. The government took some effective measures for providing banking training facilities to Muslims. There were some complaints that Hindu banks were not honoring the cheques of Pakistani national and were also refusing to give securities kept in their custody. The government issued an ordinance, which empowered it to investigate all such complaints, and if satisfied of their bonafide, the payments should be realized. In case the bank insisted on non-payments, the government should realize the assets of the banks, which were sufficient to discharge such liabilities. The government of Pakistan also allowed the removal of valuables kept in save deposits vaults and lockers by submitting an application and getting necessary approval from the custodian of evacuee property. The government of Pakistan tried to provide all kinds of facilities with sincerity to the known Muslim bankers for restoring normal banking facilities in the country but the response was discouraging. An inter dominion agreement was reached between India and Pakistan in April 1949. The main provisions of the agreement were as under: The inter dominion agreement could not be fully imported. India delayed the transfer of Muslim deposits to Pakistan. The nondevaluations decision of Pakistan government further led to the suspension of remittance facilities through normal banking channels. Due to panicky withdrawal of deposits; some banks went into liquidation and the payments could not be made to the depositors.
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farmers. In Jan, 1974 the entire commercial banks were nationalized. The weaker commercial banks were merged with the stronger once and in all five major banking companies were formed. MCB and ABL have again been privatized. Pakistan banking council was set up for coordinating the activities of the nationalized commercial banks. The banking council formulates the policies and guidelines for the banks. Interest has been eliminated from the banking transaction from July 1, 1985. The banks are now accepting saving deposits on Profit and Loss sharing bases. Modaraba and Leasing Companies are also operating in Pakistan. The banks nationalized, due to weaknesses such as over staffing, deterioration in customer services, raising bad debts, loan on political bases etc, are being gradually denationalized. MCB was privatized in April 1991. The shares of ABL have also been sold to its 7500 workers. Permission to open ten banks in the private sector has also been given. The permission to open an Investment bank has also been given. It will go a long way is providing capital for the industrial projects. The government of Pakistan has also liberalized the exchange and payment procedure. The Pakistani firms and companies can now maintain Foreign Currency accounts in Pakistan on the same bases as known Pakistanis.
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engaged exclusively on jute operation. Thereafter, it was felt that it could expand its business to include other commodities as well. Bank took a big stride in 1952, when it replaced the Imperial Bank of India, as an agent of State Bank of Pakistan. With the passage of time its functioning diversified as they take over the function of different institution with the passage of time like in past they took over the function of Imperial bank of India and now of NDFC (national development Finance Corporation) It is working as the agent of the state bank of Pakistan and performs its functions wherever state bank of Pakistan is not present. The government floated its 10 % of the shares in the open market in past and the ratio became 60: 40 and in future they trying to make it 55: 45.In 1999 national bank celebrated its golden jubilee during the last fifty years bank has made substantial strides in the financial services industry in Pakistan. In 1999 its market share was around 22% and it remains the largest financial institution in Pakistan.
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16 Overseas Branches
4 Representative Offices 1 Subsidiary 1 Joint Venture
Branch Network: NBP has an extensive domestic branch network of over 1500 branches located all over Pakistan. The Bank also has a presence in 24 international locations including the USA, United Kingdom, Europe and the Far East. And now the NBP is going to open its international branch in India. The branch will be located in the Dehli or the Mumbai. By opening its branch in India, the NBP will become the first Pakistani bank who will operate in the India.
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Ownership:
NBP is 100% owned by the Government of Pakistan (GOP).
Deposits:
NBP holds 24.6% share of time and demand deposits in the country. Local currency deposits comprise 67% of bank's total deposits while foreign currency deposits account for the rest.
Assets:
NBP's total assets stood at PKR350 billion on December 2001. This included total earning assets of about PKR268 billion with gross loan portfolio of PKR140 billion. The bank also has an investment portfolio of PKR91 billion, which comprises treasury securities, corporate bonds, shares and other securities.
Deposits:
As of December 2001 NBP had a paid-up capital of PKR1.46 billion divided into 146 million shares of 10 rupees each. Total shareholders' equity was PKR10 billion, however, revaluation reserve has increased shareholders' funds to PKR16 billion. NBP has, however, increased its paid up capital from PKR Rs. 1.46 billion to Rs. 3.73 billion through issuance of bonus shares (subject to corporate and shareholder approvals). Financial Highlights: Amounts in Million Year to1998 December Total Deposits 235,932 Total Assets 274,117 Total Equity 9,035 Total Loans 85,854 Total 108,207 Investments Net Profit (795) 1999 254,863 310,599 12,232 105,597 106,449 62 2000 273,391 325,320 15,411 109,524 102,969 529 2001 294,754 349,932 15,962 122,294 91,277 (178)
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To be recognized in the market place by Institutionalizing a merit & performance culture, Creating a powerful & distinctive brand identity, Achieving top-tier financial performance, and Adopting & living out our values
2.6
Objectives are ends towards which an enterprise activity is aimed. The purpose of business is production and marketing of economic goods and services but to accomplish these objectives to a number of enterprise objectives may be necessary. National bank of Pakistan has certain objectives. These objectives are the followings: (1) (2) (3) (4) (5) (6) Advancing loans Accept deposits Remitting of funds Sale of promissory notes Selling and realizing property of bank claims Investment or underwriting of stocks
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OPERATION COMMITTEE
CREDIT COMMITT EE
FOUR OVERSEAS REGIONAL OFFICES FAR EAST EUROPE & USA CENTRAL ASIA MIDDLE EAST
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AUDIT GROUP
RETAIL BANKING
IT SYSTEM DEVELOPMENT NETWORKING SOFTWARE DEVELOPMENT HR MANAGEMEN T RECRUITMEN T /PLACEMENT COMPENSATI ON BENEFIT PERSONAL DATA DISCIPLINE ORGANIZA TIONAL DEVELOPM ENT & TRAINING PROMOTION PERFORMANCE APPRAISAL GOAL SETTING TRAINING UNION AFFAIRS
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3) Proprietorship account 4) Limited company account 5) Partnership 6) Club, society, association and trust
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Cheque should not be mutilated Cheque should be drawn in this particular branch Cheque should not be damaged No unauthorized material alterations Funds must be sufficiently available Cheque should not be post date or stale Cheque should be presenting during the banking hours
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Monthly Statements These statements are prepared on monthly basis and also sent to Head Office (Qatar). These include:
Provisional statement of income and expenses. This statement adjusted for accruals and pre-payments.
under Section 53 (Tax deducted at source) 2. Withholding Tax from the payments made to vendors, suppliers and
other parties providing various services. The rate of withholding tax is as follows: Suppliers 2.5%
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5%
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PROCEDRE OF CALL DEPOSITS Following steps are involved 1) Depositor fills the credit vouchers for call deposit. He writes the following information Name of company Amount Date 2) He deposits the cash along with filled voucher in the cash department ENCASHMANT OF CD For the encashment of call deposit needed 5 rupee stamp two signature of customer on the back side of CD token issued accountant make entry in the CD register show that it has returned
prepares a voucher for this payment against that TT. The customer then presents that certificate to the cash counter and collects money. Mail Transfer It is the same like TT, but in this type, the message is sent through mail rather than telex. The procedure is same as TT, but the advice is sent through mail rather than wired. Travelers cheques (TC) These are also called TC. Travelers cheques first came into use century ago. Form of travel currency giving to the holder .the security of a letter of credit and convenience of a local currency. In practice, they are acceptable in payments of accounts on board ship, at hotels and in stories. They are in form of a draft. They should be so signed immediately on issue and place is provided on the cheque for the signature of the beneficiary on it.
4.5.1 Scrolling
It is the procedure of recording of the collected utility bills and the recording of the payment of the pension. All utility bills including the bills of PTCL, SUI GAS, MEPCO, and the PASSPORT bills. Furthermore the pension that is paid is also being scrolled. This
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recording is sometimes MANUAL and sometimes it is done through the COMPUTER (MS EXCEL).
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Character
It is based on the borrower willingness to repay the obligation. The loan officer sees the family background mode of living, business nature, habits, moral reputation and etc. before giving the loan.
Capacity
The ability of borrower to repay the loan when it is due. The borrower ability to repay the loan is assessed by the office so that he will be able to repay the loan in future.
Capital
The officer assesses the capital of the borrower. If assets held by the borrower are liquid, they can be easily convertible in cash; but if non liquid is used then it is risky to given loan.
Collateral
t is collateral security. It may consists of stocks bonds , bill of exchange, bills of lading, etc. the bank has protect him self from any discrepancy in the future. They increase the ability of the borrower to obtain the funds from the bank.
Condition
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The economic condition of the borrower is determined. The economic conditions of the borrower in and out side the country effects the repayment of loan. If condition is favorable then loan is given otherwise vice versa. .
5.1.2 Advances
Advances provided by the bank are of the following two types. Funded Non-funded
Funded
In fund based bank contributes a large amount of the fund based on clarified as follows TYPES OF ADVANCES Demand Finance One time disbursement of the whole amount sanctioned, as the limit for the credit allows. Any person, individual, group, company, firm and all others can achieve this mode of financing. The mark-up or interest is calculated on the total amount disbursed and requires to be paid before the date of final adjustment. Regarding the amount, limit and period, it depends on the nature of the case in review. Cash Finance In this mode of financing the borrower is allowed to make withdrawals of funds as he requires, but the total amount outstanding cannot exceed the limit sanctioned. The markup/interest is calculated on the amount outstanding on his account. The calculation of mark-up/interest is based on the number of days a specific amount is withdrawn. This finance if normally borrowed by small traders or individuals for their petty matters involving cash transactions up to rupees three hundred thousand maximum. Running Finance To assist a large-scale business operator to carry on his day to day requirements of liquid funds, this account is opened is made operation in his favor. Running finance is provided where the amount goes beyond rupees three hundred thousand. The mark-up/interest is calculated the same way as in case of cash finance. Security against running finance is that which is easily convertible in to cash and bank kept 25% margins with it.
Non-Fund
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Bank provide non fund advance in the following form: Guarantee Imports
Guarantee
A guarantee is a promise between one person to another person or party to answerable for the debt of a third party. Bank issues guarantee after 100%cash collaterals are provided by the person i.e.50% in the form of the property.
Imports
Bank provides non-funded credit facility to the following basis.
Sight LC In this type of L.C when payment is made documents are released. A cash margin of 30% is relational by the bank. Usance or DA L.C The bank retains the payment after a period of days, which is given in the L.C a margin of 30%.
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Letter of guarantee in personal capacity Letter of authority Letter of pledge Memorandum of deposit of title deal
Status reports
A credit report is an assessment of borrowers character and capacity from a bankers point of view. Credit reports on borrowers called Status Reports, financial reports, bankers opinion or confidential reports. All these terms carry more or less the same meanings. The study of a borrower is a study of his character, capacity and capital, and collateral often known as the 4Cs to consider his credit worthiness and eligibility for the bank advance. The purpose of compilation of credit report of the borrower is to assess their net worth. It must contain information about borrowers means, character, integrity, assets, liabilities, business and experience. Besides, borrowers own investment, details of properties, must be obtained. The borrower may be asked to give written clarification of their existing liabilities. In the case of Limited Companies, their borrowing powers to be verified from their Memorandum & Articles of Association. Their certification of incorporation to be examined, exiting borrowings, prior charge on their fixed assets, paidup capital, reserves, profit and loss position, detailed particulars of their directors and complete analysis of balance sheet must be incorporated in the credit report. Independent inquiries about the borrowers and opinions form their previous bankers must be made. As such a comprehensive credit report is compiled which serves as a constant guide to the banker about his borrower. This report is prepared by the bank of the intending borrower with a view to considering his Credit Worthiness and Eligibility for the Bank Finance. Besides other things it contains the net worth of the borrower.
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5. Asset Management Asset management involves the analysis of how productively the assets of the company are being used. Sales and profitability can be measured with this. 6. Borrowers Credit Worthiness In order to get a complete picture of the borrowers credit worthiness, inquiries will have to be made about: His business. Trade experience. Assets and liabilities. His account with bank or with other banks. His financial statements and income tax returns. An interview with him will be necessary to elucidate or supplement the information that may have been collected. 7. Management Before giving loan NBP also checks whether the management have the depth, skill and experience. If the management is aggressive and adoptive to the new changes then it is most likely that the banker may receive the loan back on due date 8. Securities In case the borrower is not in a position to meet his obligations, there must be something else to call back upon. So bankers take securities to have a resource to them to guard liquidity, that is, security is an insurance against calamities. In case of cash finance the customer have to give the same amount of money to the NBP as a security for which it takes loan.
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constituting the ultimate source of recovery in the event of failure of the borrower or his enterprise, but as providing a measure to the borrowers own stake in the enterprise and also placing the limitation on his future borrowings. However, though security serves as a cushion to fall bank upon in case of need, but its adequacy alone should not form the sole consideration for judging the suitability of the loan. So the choice of security is not made in isolation, but keeping into consideration the customer and security offered together.
Guarantees
A grantee is defined as An undertaking by a person to responsible for the debt of another person. National bank of Pakistan issues guarantees to government agencies like atomic energy, high way department, and customs arthritis. Sui northern gas and others. It also issues guarantee to multinational organization like Siba gigay, Sandoz, PBS, and etc. for the purchase of pesticide or insecticide from any fertilizer company. Bank accepts only long other bank guarantee but in some cases personnel guarantee is also accepted. The guarantee issued is treated as contingent liability. According to local rules and regulation the policy for issuance of guarantee can be changed. The expiry of the guarantee can be set by both bank and guarantor. The minimum period is one year and the guarantee can be reissue for extra period with paying charges. The two officers whose signatures appears in the specimen signature book of bank and also counter sign by the zonal chief must sign each guarantee. Both officers must also sign any amendment. Am amendment in the guarantee can be made after giving written application to issuing branch. If the value of the guarantee is reduced by the amendment the liability amount will be reduced and if will value is increased additional liability entries will be passed. The bank provides following types of guarantees to the customers. Bid bond Mobilization bond Performance bond Bid bond The facility provided at the time of bid opening is called bid bond. Mobilization bond When the bid is accepted, the bank provides this type of facility to the customer. Performance bond
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When the project is completed, the contractor about the performance of the project provides a performance certificate for one year. During one year, if there is any mishap in the project the repair otherwise authorities claim the performance charges from the bank. Bank charges commission on issuance of guarantee as per their schedule of charges. If the party did not pay the amount in the stipulated time period, bank puts this case for recovery. If some amount is recovering then it is good otherwise bank deduct the amount from its profit and starts the legal procedure against the property pledged by the customer to bank. Bank assesses the demand of the customer and then writes letters to other banks to provide them confidential report of credibility about the customer this is one provided in the shape of CIB (credit information bureau) report provided by the SBP. In this report the credits of the customers with the bank operating in Pakistan are given. After checking this report the bank issues the guarantee to the customer. In case of death of his heir as given in the will be responsible for that guarantee.
Security
It is an interest or right in the property gives to the creditor to convert it in cash in case of debtor fails to meet the principal and interest. The bank provides the following securities to the customers.
Mortgage
Transfer of interest in movable property for securing the payment of money lend on existing or future liability. The bank provides the following two types of mortgage. Registered mortgage Equitable mortgage RegisteredMortgage Registered mortgage is provided on the residential property, commercial industrial property, raw plot, etc. A party can get registered mortgage if they provide the following documents to the bank. Title deed Non encumbrance (NEC) pit form (in case a constructed hose) Valuation certificate Affidavit Mortgage deed Personnel guarantee of mortgagor Power of attorney Legal opinion.
Banks examine all these reports, and if they are correct then issue the mortgage to the party. The bank examines these reports to see that the property they want to mortgage is registered and is not already pledged. The bank also calculates the value of the property
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and
the
legal
opinion
of
the
customer
in
case
of
non-payment.
Equitable mortgage Equitable mortgage is provided on the residential property, commercial industrial property, raw plot, etc. Title deed Non encumbrance certificate Pti form (in case a constructed house) Valuation certificate Affidavit Memorandum of deposit of title deed Personal guarantee of mortgagor Power of attorney Legal opinion
In this mortgage a charge form bound the customer for any legal action in case of nonpayment. In this type of mortgage hypothecation of stocks involves. Pledge A pledge is an a class security given to customers for stocks ware house, customs, and etc. it is defined as actual delivery of movable property to lender as security for a loan. When the customer makes the payment of the loan in full he can back his mortgage property from the bank i.e. when full payment is made the stock is released.
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Memorandum and article of association in case of limited company Audited report of balance sheet and income statement of last two years After checking all the securities, customer verification the manager done the following tasks 1. Preparation of credit proposal 2. Prepare the about the customer 3. Sanction of loan
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Advance payment of suppliers Particular of machinery installed in the factory through financing Incase of corporation/limited companies the following information are included Incorporation and commencement of company Sales offices Capital information Directors and their contribution to capital Balance sheet with explanation and evaluation Net worth of the company
3) Sanction of loan
If the limit of the loan lies with in the power of manger then he sanction the loan otherwise manger with the covering letter along with all necessary documents sends it to the concerned sanctioning authority.
The branches where all transactions are carried out manually and records are maintained on registers usually stored in big wardrobes. All branches in Pakistan report to there regional head office regarding there daily transaction. In the RHO through On Line, terminal data goes to head office central computer; Except for branches those are On Line as they transfer there daily data directly through there own terminal. As day-to-day, activities of all branches are recorded in a central computer.
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Procedure
After filling the application customer signed it with his salary-disbursing officer then under taking is officer approving it. Open the account that is calls separate loan account, which is once Debit and many time credit.
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iii) Oil Gas & Petro-Chemical Technology iv) Agriculture v) Medicine vi) Physics vii) Chemistry viii) Biology, Molecular Biology & Genetics ix) Mathematics x) Other Natural Sciences xi) DAWA and Islamic Jurisprudence xii) Computer Science/Information (LL.B/LL.M Sharia) System and Technology including hardware. xiii) Economics, Statistics and Econometrics xiv) Business Management Sciences xv) Commerce
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Non-performing loans
As on 31 December 2005, the Bank's non-performing loans (NPLss) amounted to Rs. 30,323 million, which was 19.11% of total advances as against 21.48% as on 31 December 2004, showing an improvement of 2.37%. Provision against non-performing advances was Rs 18,296 million as on 31 December 2000, which is 60.34% of NPLs. This high ratio reflects prudence of the Bank's management while determining provisions. Remaining NPLs are covered by forced sales value of mortgaged property, Federal Government Guarantee or are in category other than loss. The Special Assets Group at Head Office with full co-ordination between field functionaries and Head Office is monitoring NPLs and deals with the classified portfolio of the Bank along with Remedial Management, Legal framework, Statistical Analysis of classified accounts, Revival of Sick Industrial Units, Consortium Financing and Ex-Mehran Bank Limited affairs etc.
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=13.35
Loans to deposits
Loans to deposits= loans/ deposits YEAR 2004 Loans to deposits =170319096/33123726
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Current ratio
Current ratio=current assets / current liabilities YEAR 2004 Current ratio =79155081/2245349 =35.25 2005 Current ratio =55531453/3365744 =16.50
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WEAKNESSES
NBP staff especially at lower considers their work as burden. They usually waste time in other task a part in performing their duty. Using government property for there own need. They are reluctant to accept change brought by latest restructuring efforts. The general out look and interior layout of branches are not as required according to modern banking NBP bearing up large burden in running those branches, which are not producing any income but keep on adding expenditure. NBP is relying on its traditional sources of income it has not taken benefit from innovation in banking like introducing retail banking or consumer banking and using any type of scheme to generate more deposits and producing more advances. Further, more dont even continue its credit card due mismanagement and lack of control. NBP is far behind in offering modern banking facility like automated teller machines then other commercial bank in Pakistan as only some branches in all over country have this facility. Data gathering from those branches which are not online, is time consuming, and not fool proof. Quantum of settlement within different branches is pending because of this updating daily record is becoming very difficult. Customers have to fallow long lengthy procedure for opening of account as well applying for debt, which discourage most of the people to invest in NBP. In NBP, most of the time,merit not has importance in hiring of employees. Such practices are black spot on the face of bank and resulted big losses and fraudulent acts by NBP own employees.
OPPORTUNITIES
NBP current management has boarder vision. They have taken steps to improve customer services, streamline internal procedure and creating a delectating climate for technology initiative. To achieve above mention objective they have created operation group Starting of the retail banking initial working. Setting of target for of making at least 300 branches country wide on line.
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Closing of all those branches, which are burden on NBP. Management to offer specialized services to major corporate including advisory and debt syndication introduces the concept of relationship manager. Comprehensive training programs has been develop to up grade the core banking skills of the existing staff as well as integrate high quality hiring. To improve the motivation of staff a merit-based culture is being promoted.
These opportunities will make NBPs future prosper and can make NBP not less than any modern commercialize bank in Pakistan.
THREATS
Major threats NBP facing is from its competitor especially from denationalized commercial bank. In which MCB is on the top of the list, The Bank provides 24 hour banking convenience with the largest ATM network in Pakistan. Retail banking and consumer banking resulting in the products such as credit cards, and automobile finance lending to small individual consumers, and purchases of automobiles, housing, and consumer goods are generally made on a cash basis. These are causing another threat, if not counter will result in significance loss of customers Recently banks and other financial institutions have introduced innovative schemes to attract deposits, like gift checque scheme by MCB. These schemes offer prizes on short and long term fixed deposits, through lucky draws. Now banks are using technology which covers the distance no matter how far away any one, through a satellite based, on-line real-time banking system and by offering telephone banking, electronic funds transfer, E-Banking and other modern facilities.
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Chapter 8 Recommendations
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RECOMMENDATIONS
NBP should be in pace with on going changing in banking industry, like other bank. Now this bank combining all it power and trying to approach other banks. Latest reorganizing efforts are necessary to make it cost effective also making its facility accordingly to modern banking. These must continue. Bank management has to put its all effort to change the prevailing culture of the bank and to put the foundation stone of business oriented culture. In which employees give important to the bank and its customer. To attract the customer in the future NBP should give more facilities of retail and consumer banking. Plus the technology in the banking is another week area need to be stressed. The outlook and interior lay out of the branches should is another be improved. The procedure of taking services from the bank must be made easier and straight forward not involving long difficult procedure for simple task.
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Customers should be given importance and should be treated in well behaved manners.
Chapter 9
Annexure
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9.1.1 Registers
Description Attendance Register (revised) Leave Record Register Bank Cash Scroll/ Manager Scroll Token Register Bank Transfer Scroll Subsidiary Day Book of Credits to Accounts Analysis of Internet, Exchange, Commission and Discount Register Register of Balances with other Banks Power of Attorney Register Branch Documents Register Current/Cash Credit/Savings Bank A/C Index Register Cheque Book Register Current/Cash Credit Account Ledger No. B-1 B-2 B-3 B-4 B-5 B-6 B-13 B-14 B-15 B-16 B-17 B-18 B-19
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Cheques Referred & Returned Register Progressive Balance Book Stopped Cheques Register Lost Documents Register Inoperative Current Account Register Fixed Deposit Register Fixed Deposit Internet Register Short Term Deposit Ledger
No. F-1 F-2 F-3 F-4 F-5 F-6 F-7 F-8 F-9 F-10 F-11 F-12 F-13 F-14 F-15 F-16 F-17 F-17(A) F-19
N.B.P General Account Duplicate Debit Originating Set (One Leaf) General Voucher Credit Specimen Signature Card Reminder for Acknowledgement of Cheque Book Objection Memo Statement of Account Balance Confirmation Credit Balance Confirmation Debit Balance Certificate
9.2 REFERENCES
I have concerned the following resources for the making of my internship report. These resources include the different employees of NBP, different relevant internet websites and the annual report of NBP. WEB REFERENCES: 1. www.NBP.com.pk 2. www.bankshistory.com 3. www.financewise.com 4. www.ventureline.com 5. www.google.com 6. www.yahoosearch.com 7. www.hotmailsearch.com 8. www.gmailsearch.com 9. www.ask.com 10. www.allrefers.com
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11. www.reports.com ANNUAL REPORT REFRENCE: Annual Report of National Bank of Pakistan PERSONAL REFRENCES: I used following personal references during completion of my internship and internship report. 1. Zulfikar Ali Khan (OG 1 NBP) 3. Adil Shehzad (Worker NBP) 2. Mohammad Ajmal Khan (OG 2 NBP) 4.Baseer Ahmad (Worker NBP)
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