National Bank of Pakistan

National Bank Of Pakistan
InternshipReport
NATIONALBANKOFPAKISTAN
DistrictCourtBranchBahawalpurCode(0308) Bahawalpur,Punjab
SubmittedTo:Sir,ZahidAli
(InternshipSupervisor)
SubmittedBy:SajidAhmed RollNo:M.COMEve-B-109 Session:2010-2012 SubmittedDate: 15-10-2012 ContactNo: 0313-6279257
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National Bank Of Pakistan ACKNOWLEDGEMENT

All praise to ALMIGHTY ALLAH alone, the Omnipresent and the most Merciful and compassionate. The words are bound, knowledge is limited and time is short to express His dignity. It is one of infinite blessings of ALLAH that he bestowed me with the potential and ability to contribution towards the deep oceans of knowledge already existing. I pay hum-age to greatest personality of the universe; HOLY PROPHET HAZARAT MUHAMMAD (PBUH) who is forever torch bearer and spring of guidance in every sphere of life. I am deeply indebted and also express my gratitude to my respected teachers at ISLAMIA UNIVERSITY OF BHAWAL PUR for their support. At the very outset, I am very thankful to Mr. JAVAID SB. (CSOM NBP) for providing me the opportunity to have an excellent learning experience during my internship at NATIONAL BANK OF PAKISTAN. It is my privilege and honors to express my deep gratitude and in calculating thanks to Mr. ATIF AKRAM (RBO NBP). The person to whom I would like to give my regards is the Mr. Tayyab SB. of (ACO) NBP
BAHAWALPUR, who gave me very useful tips and information. I might not be able to complete my internship without his cooperation and his kind behavior. I am thankful to all of my teachers especially MADAM AIMAN FARIDI (ISLAMIA UNIVERSITY OF BHAWAL PUR). I am thankful to all of my class fellows and friends whom cheerfulness and guidance is an asset for me .I am especially thankful to the bank staff.
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OBJECTIVES
This internship offers me an incredible opportunity to gain real-world experience in the high-stakes finance industry. Most importantly this internship allows me to distinguish myself from my classmates, as I gain a competitive advantage by connecting my coursework with industry experience. Following are important objectives of studying the organization: Categorize the different products and services offered by the financial institution and note how to most efficiently match those products and services with the needs of customers. Analyze the companys financial condition through the financial statements (compute financial ratios and compare to the industry averages). To describe the impact of financial decisions on the health and functioning of the overall organization. To learn the various steps and procedures of credit risk management & administration. Finding out the weaknesses, short comings, strengths and beauties of the credit administration department.
About Supervisor:
M.TAYYAB SB. (AFO) B.Sc (Agriculture) Agriculture University Faisalabad Cell # 0300-6163739 Email : muhammad.tahir@ubl.com
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TableofContent
Topics PageNo
EXECUTIVESUMMARY ............................................................................................. 7 INTRODUCTION ........................................................................................................11 BRIEFHISTORYOFNATIONALBANKOFPAKISTAN .........................................11 SUMMARYOFACHIEVEMENTSANDGROWTHOFNBP....................................13 SUMMARYOFDIFFERENTFUNCTIONS:.............................................................. 14

OVERVIEWOFORGANIZATION ....................................................................................... 15 PRODUCTSLINE .................................................................................................................. 19 FixedDepositAccount(TimeDeposits) ................................................................................. 20 ForeignCurrencyAccount ................................................................................................... 21
PRODUCTS ..................................................................................................................21
NationalIncomeDailyAccount(NIDA) ............................................................................... 23 NBPSaibaan ........................................................................................................................ 24 NBPAdvanceSalary ............................................................................................................ 24 NBPCash&Gold ................................................................................................................. 24 StudentsLoanScheme.......................................................................................................... 25 NBPKarobar-PresidentsRozgarScheme ............................................................................ 25 CORPORATEADVANCES ................................................................................................... 26 CashFinance ....................................................................................................................... 26 RunningFinance/Overdraft ................................................................................................. 26 REMITTANCES .................................................................................................................... 27 DemandDrafts..................................................................................................................... 27 TravelersCheques ............................................................................................................... 27 ForeignRemittances ............................................................................................................ 28 MailTransfer ....................................................................................................................... 29 TelegraphicTransfer............................................................................................................ 29 PayOrder ............................................................................................................................. 29 MCBBankLtd. ........................................................................................................... 31 UnitedBankLimited ................................................................................................... 31
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a) HabibBankLimited .................................................................................................... 31 MCBBankLtd. ............................................................................................................ 32
b)UnitedBankLimited ......................................................................................................... 32 FinancialhighlightsofNBPandcompetitors......................................................................... 34 MCBBankLtd. ...................................................................................................................... 34 UnitedBankLimited ............................................................................................................. 34 HabibBankLimited............................................................................................................... 34
NUMBER OF EMPLOYEES OF NATIONAL BANK OF PAKISTAN ................36 DEPARTMENTS OF THE BRANCH .......................................................................38
1. 2. 3. 4. 5. 6. 7. a) b) c) 8. 9. ClearingHouseDepartment ............................................................................................ 39 RemittanceDepartment .................................................................................................. 43 AccountOpeningDepartment ......................................................................................... 44 CashDepartment ............................................................................................................ 45 DepositsDepartment ...................................................................................................... 47 AdvancesDepartment .................................................................................................... 47 ComputerDepartment .................................................................................................... 49 ONLINEBRANCHES ...................................................................................................... 49 BatchBranches........................................................................................................... 49 ManualBranches ........................................................................................................ 49 PensionDisbursementDepartment ................................................................................. 50 AccountsDepartment ..................................................................................................... 51
ORGANIZATIONSTRUCTUREOFTHEBRANCH ................................................53
a) b) c) d) e) CentralizedDecisionMaking .......................................................................................... 53 DownwardCommunication............................................................................................ 53 ChainofCommand.......................................................................................................... 54 AuthorityandResponsibility ........................................................................................... 54 Delegation...................................................................................................................... 55
MAINOFFICES ..................................................................................................................... 56
MYEXPERIENCE........................................................................................................56
HowtoOpenanAccount ....................................................................................................... 56 CurrentAccountorDemandDeposits.................................................................................... 57 SavingAccount.................................................................................................................... 57 FixedDepositAccount ......................................................................................................... 57 a)NBPAdvanceSalary ......................................................................................................... 58
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b) NBPCash&Gold ........................................................................................................ 60
USEOFELECTRONICDATAINDECISIONMAKING ...........................................60
InformationSystemResourcesofNBP ...................................................................................... 61 a) b) c) d) e) PeopleResources ....................................................................................................... 61 HardwareResources................................................................................................... 61 SoftwareResources .................................................................................................... 62 DataResources ........................................................................................................... 62 Resources .................................................................................................................. 62
SOURCESOFFUNDS ...................................................................................................63 ALLOCATIONOFFUNDS .......................................................................................... 70 BALANCESHEET .......................................................................................................71 INCOMESTATEMENT .............................................................................................. 72 FINANCIALSTATEMENTSANALYSIS ..................................................................72
RatioAnalysis ......................................................................................................................... 73 ProfitabilityRatios ..................................................................................................... 74 LiquidityRatios.......................................................................................................... 77 DebtRatios ................................................................................................................. 79
HorizontalAnalysis ................................................................................................................. 82 HorizontalAnalysisofBalanceSheet ........................................................................................ 83 HorizontalAnalysisofIncomeStatement(%) ............................................................................ 83 VerticalAnalysis ..................................................................................................................... 85 VerticalAnalysisofBalanceSheet ............................................................................................ 85 VerticalAnalysisofIncomeStatement(%) ................................................................................ 86
CRITICALANALYSIS(THEORYVSPRACTICAL) ...............................................87
SWOTANALYSISOFNATIONALBANKOFPAKISTAN ................................................... 88 ORGANIZATIONALSTRENGTHS ................................................................................. 89 THREATS .......................................................................................................................... 92
CONCLUSIONS ...........................................................................................................98 RECOMMENDATIONS ............................................................................................. 99 REFERENCES............................................................................................................101
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1. OVERVIEW OF THE ORGANIZATION INTRODUCTION

BRIEF HISTORY OF NATIONAL BANK OF PAKISTAN
The history of National Bank of Pakistan is par t of Pakistans struggle for economic independence. National Bank of Pakistan was established on November 9,1949 under the National Bank of Pakistan Ordinance,1949 in order to cope with the crisis conditions which were developed after trade deadlock with India and devaluation of Indian Rupee in 1949. Initially the Bank was established with the objective to extend credit to the agriculture sector. The normal procedure of establishing a banking company under the Companies Law was set as idea ndtheBankwasestablishedthroughthepromulgationofanOrdinance,duetothecrisissituation thathaddevelopedwithregardtofinancingofjutetrade.TheBankcommenceditsoperationsfro mNovember20,1949atsiximportantjutecentersinthethen,EastPakistananddirecteditsresou rcesinfinancingofjutecrop.TheBanksKarachiandLahoreofficesweresubsequentlyopened inDecember1949.TheNationalBankofPakistancameforwardtoestablishitsofficesintheCot tongrowingareasandextendedcreditfacilitiesliberallyinordertorestorestabilitytothemarket .In1951,thecountrywasonceagainfacedwithacrisisinthecottontradewhenpriceswascrashe dandtouchedthelowestlevelsinceindependencefollowingthecessationofhostilitiesinKorea .ThebankincollaborationwiththecottonboardprovidedthenecessaryCreditfacilitiestothetra deandthecrisiswastidedover.ThenatureofresponsibilitiesoftheBankisdifferentanduniquef romotherbanks/financialinstitutions.TheBankactsastheagenttotheStateBankofPakistanfo rhandlingProvincial/FederalGovernmentReceiptsandPaymentsontheirbehalf.TheBankha salsoplayedanimportantroleinfinancingthecountrysgrowingtrade,whichhasexpandedthr oughtheyearsasdiversificationtookplace. TheNationalBankofPakistanhasitsheadquartersinKarachi,Pakistan.Thebankoperates124 9(2008)branchesinPakistanand22(2008)overseasbranches.UnderatrustDeed,thebankalso providesservicesastrusteetoNationalInvestmentTrust(NIT)includingsafecustodyofsecurit iesonbehalfofNIT.TheNationalBankofPakistanhasassetsworthRupees737976.44milliono nSeptember30,2008.
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NationalBankofPakistanistodayaprogressive,efficient,andcustomerfocusedinstitution.Ith asdevelopedawiderangeofconsumerproducts,toenhancebusinessandcatertothedifferentse gmentsofsociety.Someschemeshavebeenspecificallydesignedforthelowtomiddleincomes egmentsofthepopulation.TheseincludeNBPKarobar,NBPAdvanceSalary,NBPSaibaan,N BPKisanDost,andNBPCashnGold. TheNationalBankofPakistanhasimplementedspecialcreditschemeslikesmallfinanceforag riculture,businessandindustries,administratortoQarz-eHasnaloanstostudents,selfemploymentschemeforunemployedpersons,publictransportsch eme.TheBankhasexpandeditsrangeofproductsandservicestoincludeShariahCompliantIsla micBankingproducts.Forthepromotionofliterature,NBPrecentlyinitiatedtheAnnualAwar dsforExcellenceinLiterature.NBPwillconferannualawardstothebestbooksinUrduandinall prominentregionallanguagespublishedduringthedefinedperiod.PatronagefromNBPwould helpcreativeworkinthefieldofliterature.TheBankisalsothelargestsponsorofsportsinPakista n.Ithasprovidedgenerouslytophilanthropiccauseswhenevertheneedarose. IthastakenvariousmeasurestofacilitateoverseasPakistanistosendtheirremittancesinaconve nientandefficientmanner.In2002theBanksignedanagreementwithWesternUnionforexpan dingthebasefordocumentedremittances.MorerecentlyithasstartedElectronicHomeRemitt ancesProject.Thisprojectintroducestechnologybasedsystemtohandleinwardremittancesef ficiently,byensuringthattheBank'sbrancheskeepatrackoftheremittancereceivedfromabroa dtillitsfinalreceipt. Anumberofinitiativeshavebeentaken,intermsofinstitutionalrestructuring,changesinthefiel dstructure,inpoliciesandprocedures,ininternalcontrolsystemswithspecialemphasisoncorp orategovernance,adoptionofCapitalAdequacyStandardsunderBaselIIframework,intheup gradationoftheITinfrastructureanddevelopingthehumanresources. NationalBankhasearnedrecognitionandnumerousawardsinternationally.Ithasbeenthereci pientofTheBankoftheYear2001,2002,2004and2005AwardbyTheBankerMagazine,theBe stForeignExchangeBank Pakistanfor2004,2005,2006and2007,GlobalFinance,BestEmergingMarketBankfromPaki stanfortheyear2005,GlobalFinance,KisanTimeAwards 2005forNBP'sservicesintheagriculturefield.ItislistedamongsttheRegion'slargestbanksand alsoamongstthelargestbanksinSouthAsia2005,TheAsianBanker.Ithasalsobeenpresenteda
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RecognitionAward 2004forhavingaGenderSensitiveManagementbyWEBCOPAASHAbesidesotherawards
EXECUTIVESUMMARY
ThisreportisaboutmyinternshipprogramwithNationalBankofPakistan.Inthiscomprehensi vereport,Ihavediscussedabouteverymajoraspectofthebank,whichIobservedandperceived duringmyinternshipprogram.Inthisreportyouwillbeabletofindthedetailaboutthebank,right fromitsincorporationtothecurrentposition.Alongwithit,theprocesses,policiesandprocedur esofthebankarealsodiscussedindetail. Asthemainpurposeofinternshipistolearnbyworkinginpracticalenvironmentandtoapplythe knowledgeacquiredduringthestudiesinarealworldscenarioinordertotackletheproblemsusi ngtheknowledgeandskilllearnedduringtheacademicprocess. NationalBankofPakistanmaintainsitspositionsasPakistanspremierbankdeterminedtoseth igherstandardsofachievements.ItisthemajorbusinesspartnerfortheGovernmentofPakistan withspecialemphasisonfosteringPakistanseconomicgrowththroughaggressiveandbalanc edlendingpolicies. IhavecompletedmyInternshipatNationalBankofPakistanDistrictCourtBranchBahawalpur (0308).Ihavestartedmysixweekinternshipon23-072012andgottrainingregularlyinvariousdepartmentsofthebankupto15-09-2012 IhaveexplainedtheworkingprocessofthedepartmentsthatIhaveworkedinaswellasthedepart mentsfunctioningthere.Iworkedinthefollowingdepartments;Deposit,Advances,Accounts Opening,Bills&Remittances,ClearingSection,GovernmentSection. AftermyInternshipatNationalBankofPakistan,Iamoftheviewthat,thebankhashistoricallyb eenthefinancialarmofthegovernmentandhasenjoyedtheblessingsofstatesupportintheform ofhugepublic-sectorfundsanddeposits.
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Thebankhastoensurethat,qualityofhumanresourceisneededtoregistermarkedmeasurablei mprovementbothintermsofskillsandproductivity.NBP,beingtheonlylendingarmtothegove rnmentforpublicsectordevelopment,shoulddesign,developanddeliverproductsandservices foreconomicgrowth.NBPshouldprovidesustainablefinancingforgrowthofindustriesofcriti calnationalimportancesuchasenergy,education,healthcare,transport,shipping,Researchan dDevelopment.NBPshouldidentifynewvenuesforfinancingforeconomicgrowthcurbingpovertyandunemployment
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INTRODUCTION
BRIEFHISTORYOFNATIONALBANKOFPAKISTAN
ThehistoryofNationalBankofPakistanispartofPakistansstruggleforeconomicindependen ce.NationalBankofPakistanwasestablishedonNovember9,1949undertheNationalBankofP akistanOrdinance,1949inordertocopewiththecrisisconditionswhichweredevelopedaftertr adedeadlockwithIndiaanddevaluationofIndianRupeein1949.InitiallytheBankwasestablis hedwiththeobjectivetoextendcredittotheagriculturesector.Thenormalprocedureofestablis hingabankingcompanyundertheCompaniesLawwassetasideandtheBankwasestablishedth roughthepromulgationofanOrdinance,duetothecrisissituationthathaddevelopedwithregar dtofinancingofjutetrade.TheBankcommenceditsoperationsfromNovember20,1949atsixi mportantjutecentersinthethen,EastPakistananddirecteditsresourcesinfinancingofjutecrop. TheBanksKarachiandLahoreofficesweresubsequentlyopenedinDecember1949.TheNati onalBankofPakistancameforwardtoestablishitsofficesintheCottongrowingareasandexten dedcreditfacilitiesliberallyinordertorestorestabilitytothemarket.In1951,thecountrywason ceagainfacedwithacrisisinthecottontradewhenpriceswascrashedandtouchedthelowestleve lsinceindependencefollowingthecessationofhostilitiesinKorea.Thebankincollaborationw iththecottonboardprovidedthenecessaryCreditfacilitiestothetradeandthecrisiswastidedov er.ThenatureofresponsibilitiesoftheBankisdifferentanduniquefromotherbanks/financialin stitutions.TheBankactsastheagenttotheStateBankofPakistanforhandlingProvincial/Feder alGovernmentReceiptsandPaymentsontheirbehalf.TheBankhasalsoplayedanimportantrol einfinancingthecountrysgrowingtrade,whichhasexpandedthroughtheyearsasdiversificati ontookplace. TheNationalBankofPakistanhasitsheadquartersinKarachi,Pakistan.Thebankoperates124 9(2008)branchesinPakistanand22(2008)overseasbranches.UnderatrustDeed,thebankalso providesservicesastrusteetoNationalInvestmentTrust(NIT)includingsafecustodyofsecurit iesonbehalfofNIT.TheNationalBankofPakistanhasassetsworthRupees737976.44milliono nSeptember30,2008. NationalBankofPakistanistodayaprogressive,efficient,andcustomerfocusedinstitution.Ith asdevelopedawiderangeofconsumerproducts,toenhancebusinessandcatertothedifferentse gmentsofsociety.Someschemeshavebeenspecificallydesignedforthelowtomiddleincomes
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egmentsofthepopulation.TheseincludeNBPKarobar,NBPAdvanceSalary,NBPSaibaan,N BPKisanDost,andNBPCashnGold. TheNationalBankofPakistanhasimplementedspecialcreditschemeslikesmallfinanceforag riculture,businessandindustries,administratortoQarz-eHasnaloanstostudents,selfemploymentschemeforunemployedpersons,publictransportsch eme.TheBankhasexpandeditsrangeofproductsandservicestoincludeShariahCompliantIsla micBankingproducts.Forthepromotionofliterature,NBPrecentlyinitiatedtheAnnualAwar dsforExcellenceinLiterature.NBPwillconferannualawardstothebestbooksinUrduandinall prominentregionallanguagespublishedduringthedefinedperiod.PatronagefromNBPwould helpcreativeworkinthefieldofliterature.TheBankisalsothelargestsponsorofsportsinPakista n.Ithasprovidedgenerouslytophilanthropiccauseswhenevertheneedarose. IthastakenvariousmeasurestofacilitateoverseasPakistanistosendtheirremittancesinaconve nientandefficientmanner.In2002theBanksignedanagreementwithWesternUnionforexpan dingthebasefordocumentedremittances.MorerecentlyithasstartedElectronicHomeRemitt ancesProject.Thisprojectintroducestechnologybasedsystemtohandleinwardremittancesef ficiently,byensuringthattheBank'sbrancheskeepatrackoftheremittancereceivedfromabroa dtillitsfinalreceipt. Anumberofinitiativeshavebeentaken,intermsofinstitutionalrestructuring,changesinthefiel dstructure,inpoliciesandprocedures,ininternalcontrolsystemswithspecialemphasisoncorp orategovernance,adoptionofCapitalAdequacyStandardsunderBaselIIframework,intheup gradationoftheITinfrastructureanddevelopingthehumanresources. NationalBankhasearnedrecognitionandnumerousawardsinternationally.Ithasbeenthereci pientofTheBankoftheYear2001,2002,2004and2005AwardbyTheBankerMagazine,theBe stForeignExchangeBank Pakistanfor2004,2005,2006and2007,GlobalFinance,BestEmergingMarketBankfromPaki stanfortheyear2005,GlobalFinance,KisanTimeAwards 2005forNBP'sservicesintheagriculturefield.ItislistedamongsttheRegion'slargestbanksand alsoamongstthelargestbanksinSouthAsia2005,TheAsianBanker.Ithasalsobeenpresenteda RecognitionAward 2004forhavingaGenderSensitiveManagementbyWEBCOPAASHAbesidesotherawards.i
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National Bank Of Pakistan SUMMARYOFACHIEVEMENTSANDGROWTHOFNBP

TheprecisesummaryofNationalBankofPakistanregardingitscountrywideandoverseasoper ationsisasfallows: 1949NationalBankofPakistan(NBP)wasestablishedundertheNationalBankofPaki stanOrdinance1949andwas100%govt.owned.NBPactedasanagentoftheCentralBankwherevertheStateBankdidnothaveit sownBranch.ItalsoundertookGovernmentTreasuryoperations.Itsfirstbrancheswer einjutegrowingareasinEastPakistan.OfficesinKarachiandLahorefollowed. 1950NBPestablishedabranchinJeddah,SaudiArabia. TheBankin1950hadonesubsidiaryTheBankofBahawalpuronDecember4,1947by theformerBahawalpurState 1955BythistimeNBPhadbranchesinLondonandCalcutta. 1957NBPestablishedabranchinBaghdad,Iraq. 1962NBPestablishedabranchinDar-es-Salaam,Tanganyika. 1964TheIraqigovernmentnationalizedNBP'sBaghdadbranch. 1965TheIndiangovernmentseizedtheCalcuttabranchontheoutbreakofhostilitiesbet weenIndiaandPakistan. 1967TheTanzaniangovernmentnationalizedtheDar-Es-Salaambranch. 1971NBPacquiredBankofChina'stwobranches,oneinKarachiandoneatChittagong. AtseparationofEastPakistanNBPlostitsbranchesthere.NBPmergedwithEasternMe rcantileBankandwithEasternBankCorporation. 1974ThegovernmentofPakistannationalizedNBP.Aspartoftheconcomitantconsoli dationofthebankingsector,NBPacquiredBankofBahawalpur(est.1947). 1977NBPopenedanoffshorebrainCairo. 1994NBPamalgamatedMehranBank(est.1991).
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1997NBP'sbranchinAshgabat,Turkmenistancommencedoperations. 2000NBPopenedarepresentativeofficeinAlmaty,Kazakhstan. 2001StateBankofPakistanandBankofEnglandagreetoallowonly2Pakistanibanksto operateintheUK.NBPandUnitedBankagreedtomergetheiroperationstoformPakist anInternationalBank,ofwhichNBPwouldown45%andUnitedBank55%. 2003NBPreceivedpermissiontoopenabranchinAfghanistan. 2005NBPcloseditsoffshorebranchinCairo.
NATUREOFNATIONALBANKOFPAKISTAN
NationalBankofPakistanwasincorporatedinPakistanundertheNationalBankofPakistanOr dinance,1949andislistedonallthestockexchangesinPakistan.Thebankisengagedinprovidin gcommercialbankingandrelatedservicesinPakistanandoverseas.Thebankoperates1,249(2 007:1,232)branchesinPakistanand22(2007:18)overseasbranches(includingtheExportPro cessingZonebranch,Karachi).UnderaTrustDeed,thebankalsoprovidesservicesastrusteeto NationalinvestmentTrust(NIT)includingsafecustodyofsecuritiesonbehalfofNIT. ThenatureofresponsibilitiesoftheBankisdifferentanduniquefromotherbanks/financialinsti tutions.ThebankalsohandlestreasurytransactionsfortheGovernmentofPakistanasanagentt otheStateBankofPakistanforhandlingprovincial/FederalGovernmentreceiptsandpayment sontheirbehalf.TheNationalBankofPakistanhasalsoplayedanimportantroleinfinancingthe countrysgrowingtrade,whichhasexpandedthroughtheyearsasdiversificationtookplace.
SUMMARY OF DIFFERENT FUNCTIONS:

Thebankisprovidingallbankingservicesofmercantileandcommercialbankingpermissiblein thecountry,whichinclude: Acceptingofdepositsofmoney oncurrent,fixed,saving,termdepositandprofitandlosssharing accounts. Borrowing money and arranging finance from other banks. Advancing and lending money to its clients.
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Financingofprojects,includingtechnicalassistance,projectappraisalthroughlongter m/shorttermloans,termfinanceandmusharikacertificates,etc. Buying,selling,dealing,includingenteringintoforwardcontractsofforeignexchange . Financingofseasonalcropslikecotton,wheat,rice,sugarcane,tobacco,etc. Receivingofbonds,valuables,etc.forsafecustody. Carryingonagencybusinessforanydescriptionotherthanmanagingagent,onbehalfof clientsincludingGovernmentandlocalauthorities. Generating,undertaking,promoting,etc.ofissueofsharesand,bondsetc. Transactingguaranteeandindemnitybusiness Jointventuringwithforeigndealers,agentsandcompaniesforitsrepresentationabroad . ParticipatinginWorldBankandAsianDevelopmentBankslinesofcredit. ProvidingpersonalizedHajjservicestointendingHajjis
OVERVIEWOFORGANIZATION
VISION
Toberecognizedasaleaderandabrandsynonymous withtrust,higheststandardsofservicequality, internationalbestpracticesandsocialresponsibility.
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National Bank Of Pakistan MISSION

NBPwillaspiretothevaluesthatmakeNBPtrulytheNationsBank,by: Institutionalizingameritandperformanceculture. Creatingadistinctivebrandidentitybyprovidingthehigheststandardsofservice s. Adoptingthebestinternationalmanagementpractices. Maximizingstakeholdersvalue. DischargingourresponsibilityasagoodcorporatecitizenofPakistanandincountrieswher eweoperate.
COREVALUES
HigheststandardsofIntegrity. Institutionalizingteamworkandperformanceculture. Excellenceinservice. Advancementofskillsfortomorrowschallenges. Awarenessofsocialandcommunityresponsibility. Valuecreationforallstakeholders.
GOALS
ToenhanceprofitabilityandmaximizationofNBPsharethroughincreasingleverageo fexistingcustomerbaseanddiversifiedrangeofproducts.
ExcellenceinDirection ExcellenceinGrowth
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ExcellenceinPerformance ExcellenceinManagement
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National Bank Of Pakistan BusinessVolume

Intoday'scompetitivebusinessenvironment,NBPneededtoredefineitsroleandshedthepubli csectorbankimage,foramoderncommercialbank.Ithasoffloaded23.2percentshareinthestoc kmarket,andwhileithasnotbeencompletelyprivatizedliketheotherthreepublicsectorbanks, partialprivatizationhastakenplace.ItisnowlistedontheKarachi/Islamabad/LahoreStockEx changes. RupeesinMillions Year TotalAssets Deposits Advances Shareholders'Equity Investments
2007
2008
2009
2010
2011
762,194 591,907 340,319 69,271 211,146
817,758 624,939 412,987 81,367 170,822
944,583 727,465 475,243 94,142 217,643
1,037,750 832,152 477,507 103,762 301,324
1,149,578 927,421 525,046 110,520 319,531
HorizontalAnalysis(%)
TotalAssets Deposits Advances
Shareholders'Equity 100 100 100 100 100 107 106 121 117 81 124 123 140 136 103 136 141 140 150 143 151 157 154 160 151
Investments
160 140 120 100 80 60 40 20 0
124 100 107
136
151
2007 Base Year
2008
2009
2010
2011
Total Assets
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PRODUCTSLINE
CurrentDeposits
Thesearepayabletothecustomerwhenevertheyaredemanded.Whenabankeracceptsademan ddeposit,heincurstheobligationofpayingallchequesetc,drawnagainsthimtotheextentofthe balanceintheaccount.Becauseoftheirnature,thesedepositsaretreatedascurrentliabilitiesbyt hebanks.BankersinPakistandonotallowanyprofitonthesedeposits,andcustomersarerequire dtomaintainaminimumbalance,failingwhichincidentalchargesaredeductedfromsuchacco unts.ThisisbecauseCurrentDepositsmaybewithdrawnbythedepositorsatanytime,andassuc hthebankisnotentirelyfreetoemploysuchdeposits.CurrentAccounts/BasicBankingaccount sareopened,onproperintroductionandsubmissionofrequireddocumentsalongwithinitialde positprescribedfromtimetotime.Basicbankingaccountsareopenedforanindividuals(single orjoint)onlywhereascurrentaccountsareopenedforindividuals(singleorjoint)Charitableins titution,providentandotherfundsofbenevolentnatureoflocalbodies,autonomouscorporatio ns,companies,associations,educationalinstitutions,firmsetc.andinallothercaseswherethea ccountsaretoopenedundertheorderofacompetentcourtoflaw.Noprofitispaidonthebalances ofcurrent/basicbankingaccounts.Thebankisauthorizedtodeductservicecharges(incidental charges)oncurrentaccountsleviedthroughitshalfyearlyscheduleofcharges,incasetheaverag ebalancefallsbelowtheminimumbalanceasprescribedbythebank.Nobalancemaintenancec onditionisappliedonbasicbankingaccount.
PLSSavingDeposits
InPakistanaSavingsDepositsAccountcanbeopenedwithaverysmallamountofmoney,andth edepositorisissuedachequebookforwithdrawals.Profitispaidataflexibleratecalculatedonsi xmonthlybasisundertheInterestFreeBankingSystem.Thereisnorestrictiononthewithdrawa lsfromthedepositaccountsbuttheamountofmoneywithdrawisdeletedfromtheamounttobeta kenforcalculationofproductsforassessmentofprofittobepaidtotheaccountholder.Itdiscoura gesunnecessarywithdrawalsfromthedeposits.InordertopopularizetheschemetheSBPhasall owedtheSavingsSchemeforschoolandcollegestudentsandindustriallabouralso.Thepurpos eoftheseaccountsistoinculcatethehabitofsavingsintheconstituents.Assuch,theinitialdeposi tsrequiredforopeningtheseaccountsareverynominal.iiNBPchargeRs.500foropeningofPLS Savingsdeposits.
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ThesalientfeaturesofprofitandlosssharingandsavingaccountsofNBPareasfallows: 1. Theseaccountscanbeopenedbyindividualsintheirownsingleorjointname.ThePLSs avingsaccountcanalsobeopenedforprovidentfundorotherbenevolentfundsofcomp anies,firms,organizations,NGOsandeducationalinstitutions. 2. PLSsavingaccountcanbeopenedwithaminimumamountofRs.500/-only 3. ToshareintheprofitaminimumbalanceofRs.500/mustbemaintainedintheaccount.Theminimumbalanceonsixthandlastofmonthwill qualifyfortheprofits.Theprofitswillbecalculatedonthebasisofmonthlyminimumbal ancefortheperiodsofsixmonthsi.e.fromJanuarytoJuneandJulytoDecember 4. TheheadofficeofNBPdeterminestheprofitorlossonPLSsavingdepositsandadviceit sbranchestherateandtimeofdistributionoftheseprofits. 5. ThereshallbenorestrictionsonmaintainingthemaximumbalanceinPLSsavingaccou nt. 6. OnthefirstdayofRamzaneachyeartheZakatattherateof2.5%willbedeductedfromthe sedepositsonthebalanceofthatday.ButifdepositorsaffixanaffidavitofZakatdeducti onalongwithaccountopeningformorheisanonMuslim,noZakatwillbedeductedfromhisaccount.
FixedDepositAccount(TimeDeposits)
ThedepositsthatcanbewithdrawnafteraspecifiedperiodoftimearereferredtoasFixedorTerm Deposits.Theperiodforwhichthesedepositsarekeptbythebankordinarilyvariesfromthreem onthstofiveyearsinaccordancewiththeagreementmadebetweenthecustomerandthebanker. Profit/ReturnispaidtothedepositorsonallfixedorTimedeposits,andtherateofprofit/Returnv arieswiththedurationforwhichtheamountiskeptwiththebanker.Bylendingoutorinvestingth esefunds,thebankearnsmorethantheProfit/Returnthatithastopayonthemtothedepositors.iii Bygivinganadvancenoticetothebankthedepositcanbewithdrawfromthebankbeforetheexpi ryoftheperiod.Fixeddepositaccountshavehigherrateofinterestascomparetootheraccounts. Therateofinterestriseswiththelengthofperiodandtheamountofdeposit.Thebankgrantstothe depositorafixdeposit(FDR)whichisnottransferabletoanyotherperson.Thesilentfeaturesoff ixeddepositaccountofNBPareasfallows - 20 -

1. ThePLStermdepositareopenedforindividualsintheirownsingleorjointnames,comp aniesfirmsandotherorganizations. 2. ThePLStermdepositreceiptareissuedforanyamount.Thereisminimumormaximum limitordepositsinasingletermdepositaccount. 3. PLStermdepositorsmaybeallowedsomefacilitiesagainstthesecurityofthesereceiptc redits,aftermakingLienontherelevantreceiptandsubjecttorecoveryofservicechar ges. 4. Undertermdepositschemethedepositorsnotceasetoearntheprofitimmediately,aftert herespectivematuritydate.
ForeignCurrencyAccount
GovernmentofPakistanhasintroducedmanyimportantreformsinForeignExchangeControli nthecountrysinceFebruary,1990,forthepurposeofstrengtheningtheForeignExchangeReser ves.Oneofthesereformsrelatestoforeigncurrencyaccounts,whichcanbeopenedinUnitedSta tesDollars,PoundSterling,EuroandJapaneseYeninanyoftheauthorizedbranchesofcommer cialbanksthroughoutthecountry.ivForeigncurrencyaccountsareopened,onproperintroducti onandsubmissionofrequireddocumentsalongwithaninitialdepositprescribedfromtimetoti me.Ratesofreturnonforeigncurrencydepositsaresubjecttofluctuationasdeterminedinaccor dancewithStateBankofPakistandirectivesandwillbepaidonsixmonthlybasiswhereastheret urnontermdeposit/SNTDwillbepaidonmaturityorasprescribedbySBP.Thebankshallhaven oresponsibilityfororliabilitytotheaccountholdersforanydiminutionduetotaxesimposedord epreciationinthevalueoffundscreditedtotheaccountwhetherduetodevaluationorfluctuation intheexchangerateorotherwise.
PRODUCTS
NBPPremiumAamdani
- 21 Period ProfitRates

1styear 2ndyears 3rdyears 4thyears 5thyears 7.50% 8.50% 9.50% 10.50% 11%
NBPPremiumaamdaniisaretailproductofthebank.Theamountofinvestmentrequiredforthis accountisRs.20,000/toRs.5,000,000.Theinvestmentperiodis5years.Zakatandwithholdingtaxwillbedeductedas perrules.InNBPpremiumaamdani,theaccountholdershavebenefitoffreedemanddraft,payo rder;freechequebookandNBPcashcard(ATM+Debit).TheFinancingfacilityisavailableupt o90%ofthedepositvalue.vProfitpaideveryperiodasfollows:
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National Bank Of Pakistan NBPPremiumSaver

NBPPremiumsaverisaretailproductofthebank.TheminimumsavingbalanceofRs.20,001an damaximumbalanceofRs.300,000arerequiredforopeningapremiumsaveraccount.Twodeb itwithdrawalsallowedinamonthandnolimitonnumberofdeposittransactions.Theprofitiscal culatedmonthlyandPaidonhalfyearlybasis.FreeNBPCashCard(ATM+Debit)facilityisavai labletoaccountholder.vi
NationalIncomeDailyAccount(NIDA)
TheschemeofNationalincomedailyaccountwaslaunchedinDecember1995toattractcorpora tecustomers.Itisacurrentaccountschemeandispartoftheprofitandlosssystemofaccountsino perationthroughoutthecountry.DepositsintheNIDAacceptedontheconditionthatthedeposit orshallalwaysmaintainaminimumbalanceasprescribedbythebankinhisaccount.Intheevent however,thatanydepositorwishestowithdrawtheamountandthebalanceinhisaccountislesst hantherequiredamount,theaccountwillbeconvertedtotheordinaryPLSSBaccountforthepur poseofcalculatingprofit.
Advances
NationalBankofPakistanplaysapivotalroleintranslatingthegovernment'sdevelopmentplan sintermsofgrowthinindustrial,commercialandagriculturalsectorsinPakistan.Accordinglyt heBankhasformulateditsCreditPolicyundertheguidelinesofSBPtheCentralBankofPakistan.Innormalcircumstancesthebankhasconsiderfollowingfactorsinv iewbeforeframingfinancingpolicies. Capitalposition Riskandprofitabilityofvarioustypesoffinancing Stabilityofdeposits Economicconditions Influenceofmonetaryandfiscalpolicies Abilityandexperienceofbankpersonnel Creditneedsoftheareaserved.
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National Bank Of Pakistan NBPSaibaan

TheNBPSaibaanisretailproductofthebank.Ithasdifferentproductitemswhicharehomepurc hase,homeconstruction,homerenovationandpurchaseoflandplusconstruction.Ifanyonehas aHomeFinanceFacilityoutstandingwithanotherbankhecanhaveittransferredtoNBPthroug hahassle-freeprocess.viiAbriefdescriptionoftheseproductsisasfallows. TYPEOFADVANCE FinancingAmount FinancingPeriod DebttoequityRatio 3to20years 3to20years 3to15years 3to20years 85:15(maximum) 85:15(maximum) 80:20(maximum) 80:20(maximum)
HomePurchase(HouseorApartment) Rs.35Million HomeConstruction HomeRenovation PurchaseoflandPlusConstruction Rs.35Million Rs.15Million Rs.35Million
NBPAdvanceSalary
TheNBPAdvancesalaryhasbeentheflagshipproductforNBP.NBPAdvanceSalary,theleadingpersonalloanproductofthecountry,is maintainingitsinimitabilityeversinceitwaslaunched.Thiswasonlypossibleduetoitsswiftgro wthandremarkableloandisbursementofover118billion.viiiYoucanavailupto20nettakehome salarieswitheasyrepaymentinstallments.Itshasslefreeacquisitionwithnopriorformalitiesan deasyavailabilityinashortturnaroundtimeisattributedasthemostdistinguishingfeaturesofth eproduct.Theproductisofferedcountrywide.ThetermsandconditionsofNBPAdvancesalary isshownonnextpage:
NBPCash&Gold
WithNBPsCash&Gold,thecustomersmeettheirneedforreadycashagainsttheiridlegoldjew elry.Therateofmarkupis15.5%p.a.Thisproducthasfollowingfeatures FacilityofRs.35,000againsteach10gramsofnetcontentsofgold Nomaximumlimitsofcash Repaymentafteroneyear
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Onlygoldornamentsacceptable WeightandqualityofgoldtobedeterminedbyNBP'sappointedschroffs Nopenaltyforearlyrepayment
StudentsLoanScheme
PursuanttotheannouncementmadebytheFederalFinanceMinisterinhis20012002budgetspeech,aStudentLoanScheme(SLS)forEducationwaslaunchedbytheGovernm entofPakistanincollaborationwithmajorcommercialbanksofPakistan(NBP,HBL,UBL,M CBandABL).UndertheScheme,financialassistanceisprovidedbywayofInterestFreeLoanst othemeritoriousstudentswhohavefinancialconstraintsforpursuingtheirstudiesinScientific, TechnicalandProfessionaleducationwithinPakistan.TheSchemeisbeingadministeredbyah ighpoweredcommitteecomprisingDeputyGovernor,StateBankofPakistan,Presidentsofthe commercialbanksandrepresentativeofMinistryofFinance,GovernmentofPakistan.ix
NBPKarobar-PresidentsRozgarScheme
ThesolutionofPakistansmajorsocioeconomicproblemsprimarilyliesinthedevelopmentandgrowthofsmall&microbusinesses. Thesewillnotonlyprovideemploymentopportunitiestoevergrowingpopulationdemandbutwillalsobecomethecatalystforbreakingtheviciouscircleofp overty.Inthisregard,NBPhasdevelopedafullrangeofProductsunderthePresidentsRozgarS chemewithabrandnameofNBPKAROBAR.Theschemewillbeofferedtoeligibleyoungan dliteratecitizensofPakistan,fallingwithinanagegroupof1840yearshavingaminimumqualificationofMatriculation(exceptforfemalesinthePCO/Telecenterproduct).Theeligibleborrowerswillberequiredtomakeadownpaymentof15%.Asseta ndLife&Disabilityinsuranceswillbemandatoryunderthisscheme.The15%downpaymentw illinclude1styearsassetinsurancepremium.However,thecostoflifeanddisabilityinsurance willbebornebyGOP.Themarkuprateforthe1styearwillbe12%andforthesubsequentyearsitwillbe1yearKIBOR+2%.Fifty percent(50%)ofthisratewillbepaidbythecustomeri.e.6%andthebalanceof6%willbeborneb yGOP.Additionally,first10%ofthelossesundertheschemewillbetakenupbyGOP.Initially,underthePresidentsRozgarscheme,NBPwillofferfollowingproducts:
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a) NBPKarobarUtilityStore(underaFranchisewithUtilityStoresCorporation) b) NBPKarobarMobileGeneralStore(withoutUSCFranchise) c) NBPKarobarTransport d) NBPKarobarPCO e) NBPKarobarTele-center
CORPORATEADVANCES
CashFinance
Thisisaverycommonformofborrowingbycommercialandindustrialconcernsandismadeava ilableeitheragainstpledgeorhypothecationofgoods,produceormerchandise.Incashfinance, aborrowerisallowedtoborrowmoneyfromthebankeruptoacertainlimit,eitheratonceorasand whenrequired.Theborrowerprefersthisformoflendingduetothefacilityofpayingmarkup/ser viceschargesonlyontheamountheactuallyutilizes.Iftheborrowerdoesnotutilizethefulllimit, thebankerhastolosereturnontheunutilizedamount.Inordertooffsetthisloss,thebankermayprovideforasuitableclauseinthecash financeagreement,accordingtowhichtheborrowerhastopaymarkup/servicechargesonatlea stonselforonequarteroftheamountofcashfinancelimitallowedtohimevenwhenhedoesnotut ilizethatamount.
RunningFinance/Overdraft
Thisisthemostcommonformofbanklending.Whenaborrowerrequirestemporaryaccommod ationhisbankerallowswithdrawalsonhisaccountinexcessofthebalancewhichtheborrowing customerhasincredit,andanoverdraftthusoccurs.Thisaccommodationisgenerallyalloweda gainstcollateralsecurities.WhenitisagainstcollateralsecuritiesitiscalledSecuredOverdraft andwhentheborrowingcustomercannotofferanycollateralsecurityexcepthispersonalsecur ity,theaccommodationiscalledaCleanOverdraft.Theborrowingcustomerisinanadvantag eouspositioninanoverdraft,becausehehastopayservicechargesonlyonthebalanceoutstandi ngagainsthim.Themaindifferencebetweenacashfinanceandoverdraftliesinthefactthatcash
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financeisabankfinanceusedforlongtermbycommercialandindustrialconcernonregularbasi s,whileanoverdraftisatemporaryaccommodationoccasionallyresortedto.
DemandFinance
Whenacustomerborrowsfromabankerafixedamountrepayableeitherinperiodicinstallment sorinlumpsumatafixedfuturetime,itiscalledaloan.Whenbankersallowloanstotheircusto mersagainstcollateralsecuritiestheyarecalledsecuredloansandwhennocollateralsecurity istakentheyarecalledcleanloans. Theamountofloanisplacedattheborrowersdisposalinlumpsumfortheperiodagreedupon,an dtheborrowingcustomerhastopayinterestontheentireamount.Thustheborrowergetsafixeda mountofmoneyforhisuse,whilethebankerfeelssatisfiedinlendingmoneyinfixedamountsfor definiteshortperiodsagainstasatisfactorysecurity.
REMITTANCES
DemandDrafts
TheNationalBankofPakistanprovidesdemanddraftsatveryreasonablerateswithsafety,spee dyandreliablewaytotransfermoney.Anypersonwhetheranaccountholderofthebankornot,c anpurchaseaDemandDraftformabank.
TravelersCheques
Theyaregenerallyissuedfortheconvenienceofpersontravellingabroad,butsomePakistaniba nksissuetheminPakistancurrencyalsoforusewithinthecountryaswell.Beforeissuing,theban kersreceiveanamountequaltothefacevalueofthecheques,andalsochargeasmallcommission .ThetravelerschequesareforfixedamountandaretreatedasOrderchequespayableonlytothe purchaserwhosespecimensignatureappearsoneachtravelerschequeitself.Foreigncurrency travelerschequesareissuedandencashedinaccordancewiththeprovisionsoftheExchangeCo ntrolRegulationAct,1947.Whilemakingpayment,thepayingbankermustinsistthattheholde rsignsinhispresence.x
LetterOfCredit
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Lettersofcreditareveryusefulinstrumentsinfacilitatingcommercialrelationsbetweenbusine ssmenatvariousplaces.Letterofcreditstatethelimitofthecreditandthetimeduringwhichitish eldatthedisposalofthegrantee,buttheyareneithernegotiablenortransferable.Letterofcredit mayberevocable.TherearemanykindsofletterofcreditsuchasRevolvingcredit,BacktoBack credit,Clausedcreditetc.NBPiscommittedtoofferingitsbusinesscustomersthewidestrangeo foptionsintheareaofmoneytransfer.IfyouareacommercialenterprisethenourLetterofCredit serviceisjustwhatyouarelookingfor.Withcompetitiverates,security,andeaseoftransaction, NBPLettersofCreditarethebestwaytodoyourbusinesstransactions.
ForeignRemittances
TofacilitateitscustomersintheareaofHomeRemittances,NationalBankofPakistanhastaken anumberofmeasuresto: Increasehomeremittancesthroughthebankingsystem. MeettheSBPdirectives/instructionsfortimelyandpromptdeliveryofremittancestoth ebeneficiaries. ThenewfeaturesofNBPforeignremittancesinclude: Theexistingsystemofhomeremittanceshasbeenrevised/significantlyimprovedand welltrainedfieldfunctionariesarepostedtoprovideefficientandreliablehomeremittances ervicestononresidentPakistanisat15overseasbranchesoftheBankbesidesUnitedNat ionalBank(thejointventurebetweenNBPandUBLinUK).,andBankAlJazira,SaudiArabia. ZeroTariffs:NBPisprovidinghomeremittanceserviceswithoutanycharges. Strictmonitoringofthesystemisdonetoensurethehighestpossiblesecurity. Specialcourierservicesarehiredforexpeditiousdeliveryofhomeremittancestothebe neficiaries.
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National Bank Of Pakistan MailTransfer

AMailTransferisaformofremittanceinwhichtheamountremittedbyacustomeroranoncustomerisdirectlycreditedtotheaccountofthebeneficiarywithanotherbranch.Moveyourm oneysafelyandquicklyusingNBPMailTransferservice.AndNBPalsoofferthemostcompetit iveratesinthemarket.TheychargesRs50/-exchangerateandRs70/postagechargesonissuingmailtransfer.Whenthemoneyisnotrequiredimmediately,theremit tancescanalsobemadebymailtransfer(MT).Herethesellingofficeofthebanksendsinstructio nsinwritingbymailtothepayingbankforthepaymentofaspecifiedamountofmoney.Debitingt othebuyersaccountatthesellingofficeandcreditingtotherecipientsaccountatthepayingban kmakethepaymentunderthistransfer.NBPtaxesmailchargesfromtheapplicantwherenoexci sedutyischargedRs16/-.PostagechargesonmailtransferareactualminimumRs.70/ifsentbyregisteredpostlocallyRs.70/-ifsentbyregisteredpostinlandonpartysrequest.
TelegraphicTransfer
TelegraphicTransferisaformofremittance,whichisadvisedbytelegram,telexorfaxmachines .ThefundamentalprinciplesofsuchtransferareotherwiseidenticalwiththeMailTransfer.Itist hemessage,whichissentfromonebranchtoanotherontheorderofpayertopayeethroughwire.I tisoneofthequickestmeanstotransferfundthroughtheuseoftelex/fax/internetorcable.Payme nttothebeneficiaryisaffecteddirectlybythedraweeofficeuponidentificationorthroughcredit intobeneficiarysbankaccount.Assuchremittingofficeisnotrequiredtoissueanyinstrumentp aymenttotheremitterfordeliverytothebeneficiary.
PayOrder
NBPprovidesanotherreasontotransferyourmoneyusingourfacilities.NBPpayordersarease cureandeasywaytomoveyourmoneyfromoneplacetoanotherinsameCity.And,asusual,NB Pchargesforthisserviceareextremelycompetitive.ThechargesofNBPareverylowalloverthe Pakistan.ItchargesRs80/forNBPaccountholdersonissuingonepaymentorder,andchargesRs150/-forNBPnonaccountholdersonissuingonepaymentorder.ItchargesRs25/forstudentsonpaymentoffeesofeducationalinstitutions.Ifsomeonewantaduplicateofpayme ntordertheychargesRs150/-forNBPaccountholdersandRs200/-fornonaccountholders.
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ChargesofBankInstrument
ISSUANCEOFDRAFT,MAILTRANSFER,TELEGRAPHICTRANSFER ForAccountHolder UptoRs:100,000/-.0.10%MinimumRs:80/UptoRs:10,00,000/-..0.05%MinimumRs:130/OverRs:10,00,000/-0.04%MinimumRs:500/NonAccountHolder: UptoRs:100,000/-...0.10%MinimumRs:100/UptoRs:10,00,000/-0.05%MinimumRs:150/UptoRs:10,00,000/-..0.04%MinimumRs:700/-
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WithholdingTax0.2% FederalExciseDuty16% CancellationCharges: ForAccountHolderRs:100/-(Flat) ForNon-AccountHolderRs:150/-(Flat)
Competitoranalysis
NationalBankofPakistanisthelargestcommercialbankofPakistan.Thebankhandlestreasury transactionsonbehalfofthegovernmentofPakistanasanagenttotheStateBankofPakistan.Th ebankhasanetworkof1,232branchesinPakistanand18overseasbranchesincludingtheExpor tProcessingZoneBranch. NationalBankofPakistanprovidescommercialbankingandrelatedservicestoindividuals,cor porateentities,andgovernmentinPakistanandinternationally.Itprovidessavingaccounts,ho mefinancing,personalloans,ATManddebitcards,financingfacilityforstockinvestors,casha gainstgold,agriculturefarmingprogram,Internetbasedhomeremittanceservice,andpersonal accidentinsurance.ThecompanyalsooffersIslamicbankingservices,whichincludedepositsc hemes,suchascurrentdepositscheme,andprofitandlosssharingdepositscheme.Inordertokn owfurtherabouttheperformanceofNbp,wecompareitwithitscompetitors.SomeofCompetit orsofnbpare: MCBBankLtd. UnitedBankLimited HabibBankLimited
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a) MCBBankLtd.
MCBisoneoftheleadingbanksofPakistanwithadepositbaseofRs.431Billionandtotalassetso verRs.550Billion.Incorporatedin1947,MCBsoonearnedthereputationofasolidandconserv ativefinancialinstitutionmanagedbyexpatriateexecutives.In1974,MCBwasnationalizedal ongwithallotherprivatesectorbanks. Thebankalongwithitssubsidiariesisengagedinprovidingcommercialbankingandrelatedser vicestoretailclients,andsmallandmediumenterprisesinPakistan,AsiaPacificandtheMiddle East.Itoffersvariousdepositproducts,includingfixeddeposits,savingsdeposits,termdeposit s,currentaccounts,marginaccountsandforeigncurrencyaccounts.AsofDecember31,2007,it operated1,020branches,includingeightIslamicbankingbranchesinPakistanandsixbranches outsidePakistan.GlobalMarketsDirectsMCBBankLtd.FinancialandStrategicAnalysisReviewisanindepthbusiness,strategicandfinancialanalysisofMCBBankLtd..Thereportprovidesacompre hensiveinsightintothecompany,includingbusinessstructureandoperations,executivebiogr aphiesandkeycompetitors.Thehallmarkofthereportisthedetailedstrategicanalysisoftheco mpany.Thishighlightsitsstrengthsandweaknessesandtheopportunitiesandthreatsitfacesgo ingforward.
b)UnitedBankLimited
UnitedBankLimited(UBL)isoneofthelargestbanksinPakistan.Thecompanyisprincipallye ngagedinprovidingretailbanking,investmentbanking,treasurybankingandcorporatebankin gservicestotheindividualsandcorporatecustomers.UBLoperatesthroughfourbusinesssegm entsnamely,CorporateFinance,TradingandSales,RetailBankingandCommercialBanking. Thecompanyoperatesthroughawidenetworkof1,112domesticand17overseasbranches.Itpr incipallyoperatesinPakistanandhasoperationsinBahrain,China,Iran,Kazakhstan,Oman,Pa kistan,Qatar,Switzerland,UnitedArabEmirates,theUK,theUSandYemen.GlobalMarkets DirectsUnitedBankLimited-StrategicAnalysisReviewisanindepthbusinessandstrategicanalysisofUnitedBankLimited.Thereportprovidesacomprehen siveinsightintothecompany,includingbusinessstructureandoperations,executivebiographi
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esandkeycompetitors.Thehallmarkofthereportisthedetailedstrategicanalysisofthecompan y.Thishighlightsitsstrengthsandweaknessesandtheopportunitiesandthreatsitfacesgoingfor ward.UBLachievedaprofitaftertaxofRs11.2billionwhichis21%higherthanthecorrespondi ngperiodlastyearandtranslatesintoearnings pershareofRs9.12(2009:Rs7.51).Onaconsolidatedbasis,UBLachievedaprofitaftertaxofRs 11billion,anincreaseof16%over2009.UBL'sstronginternalcapitalgenerationresultedinaRs 6.1billion(14%)increaseinTier1Capital,despitekeepingRiskAssetsflat.Consequently,theu nconsolidatedCapitalAdequacyRatio(CAR)oftheBankimprovedfrom13.2%inDecember2 009to14.5%inDecember2010.TheTier1CARoftheBankhasalsoimprovedfrom9.0%inDecember2009to10.3%inDecember2010. Onaconsolidatedbasis,theCARimprovedto15.0%inDecember2010(December2009:14.0 %)whileTier1CARimprovedfrom9.5%inDecember2009to10.4%inDecember2010.Thecommitmentto continuouslycreatevalueforitscustomers,employeesandlocalcommunitiesisamajorpriorit yofUBL.In2010,theBankprovidedsupportofoverRs80millionforCSRinitiativesprincipall yintheareasofeducation,healthcareandcommunitydevelopment.UBL'seffortsinthefieldof CSRwerealsoacknowledgedbythePakistanCenterforPhilanthropy(PCP),anindependent organization,asoneofthelargestdonorstocharitablecausesin Pakistan.UBL,asaContributingSponsoroftheKarachiEducationInitiative(KEI),contribu tedRs40milliontothiscause.ThisinitiativeaimstosetupaworldclassSchoolofBusinessandL eadershipinKarachi.Additionally,Rs3.9millionwerealsodonatedtootherorganizationsoper atinginthefieldofeducation,includingTheCitizens'FoundationandtheLahoreUniversityof ManagementSciences.Intheareasofhealthandcommunitydevelopment,UBLcontributedov erRs10milliontotheEdhiFoundation,SOSVillagesofPakistan,MarieAdelaideLeprosyCent ers,SpecialOlympicsPakistan,ThePoliceHospitalFundandFriendsofBurnsCenter.
c)HabibBankLimited
HabibBankLimitedcommonlyreferredtoas"HBL"andheadquarteredinHabibBankPlaza,Karachi,Pakistan,isthelargestbankinPakistan.Thebankhasan etworkofover1450branchesinPakistanand55branchesworldwide.HabibBankstandstogain fromapossibledealasitwouldgetsomeofthebestcustomerswhohaveverygoodcredithistory,t heofficialsaid.HeaddedthattheCitibankhadalreadycleareditsportfolioofriskyloans.AfterP akistanwasbornin1947,HabibBank,attheurgingofGovernor-
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GeneralJinnah,moveditsheadquarterstoKarachi,Pakistan'sfirstcapital.ThisgaveKarachiits firstcommercialbankofthenewlyformedPakistan.TheHabibfamilyownedandmanagedthe bankuntilthePakistan. FinancialhighlightsofNBPandcompetitors.
Nameofthebank NationalBankofPakistan MCBBankLtd. UnitedBankLimited HabibBankLimited
Assets 1035024680 567533 698785 34478466
Advances 477506564 254522 368692 1272066
Deposits 832151888 431372 550646 186966167
Equity 103762310 76150760 60181 10018800
OrganizationalHierarchyChart
President SeniorExecutiveVice-President ExecutiveVice-President SeniorVice-President
Vice-President AssistantVice-President BranchHierarc hy OfficerGrade1 OfficerGrade2
- 34 -

OfficerGrade3 SeniorAssistant Assistant Driver Peon
- 35 -
NumberofEmployeesofNationalBankofPakistan
Permanent Temporary/OnContractualbasis Bank'sownstaffstrengthattheendoftheyear Outsourced TotalStaffStrengthin2011 13537 842 14379 2545 16924
Anemployeemaybedefinedas:"Apersonintheserviceofanotherunderanycontractofhire,ex pressorimplied,oralorwritten,wheretheemployerhasthepowerorrighttocontrolanddirectth eemployeeinthematerialdetailsofhowtheworkistobeperformed."Anemployeecontributesl aborandexpertisetoanendeavor.Employeesperformthediscreteactivityofeconomicproduct ion.Ofthethreefactorsofproduction,employeesusuallyprovidethelabour.Specifically,ane mployeeisanypersonhiredbyanemployertodoaspecific"job".Inmostmoderneconomies,the termemployeereferstoaspecificdefinedrelationshipbetweenanindividualandacorporation, whichdiffersfromthoseofcustomer,orclient.TherelationshipbetweenNationalBankofPakis tananditsemployeesisusuallyhandledthroughtheHumanResourceManagement&Administ rationGroup&Employeesbenefitdisbursement&trusteedivision.Thesegroupshandlethein corporationofnewhires,andthedisbursementofanybenefitswhichtheemployeemaybeentitl ed,oranygrievancesthatemployeemayhave. TherearedifferingclassificationsofworkerswithinNationalBankofPakistan,theseare: Permanent Temporary/OnContractual Outsourced TheEmployeesofNationalBankofPakistanareorganizingintotradeunions,whichrepresent mostoftheavailableworkforceinNationalBankofPakistan.ThesetradeUnionsutilizetheirre presentativepowertocollectivelybargainwiththemanagementofbankinordertoadvancecon cernsanddemandsoftheirmembership.
CORPORATEINFORMATION
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National Bank Of Pakistan BOARDOFDIRECTORS

QamarHussain ChairmanBoard,President,NBP Mr.TariqKirmani Director Mrs.HaniyaShahidNaseem Director Ms.NazratBashir Director SyedMuhammadAliZamin SVP,SecretaryBoardofDirectors
SeniorManagement
QamarHussain President Dr.AsifA.Brohi SEVP&GroupChief,Commercial&RetailBankingGroup ShahidAnwarKhan SEVP&GroupChief,CreditManagementGroup ZiaullahKhan SEVP&GroupChiefAssetsRecoveryGroupandDivisionalHead,IslamicBankingDivision Dr.MirzaAbrarBaig SEVP&GroupChief,Training&OrganizationDevelopmentGroup NausherwanAdil SEVP&GroupChief,OperationsGroup TariqJamali SEVP&GroupChief,ComplianceGroup NadeemA.Ilyas SEVP&GroupChief,Corporate&InvestmentBankingGroup&PSOtoPresident MuhammadNusratVohra SEVP&GroupChief,TreasuryManagementGroup
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KhalidBinShaheen SEVP&GroupChief,GlobalHomeRemittanceManagementGroup ImamBakhshBaloch SEVP&GroupChief,Audit&InspectionGroup AsifHassan SEVP&GroupChief,SmallandMediumAssetsRecoveryGroup M.RafiqBengali SEVP&GroupChief,OverseasBankingGroupandRCEAmericasRegion ZubairAhmed SEVP&GroupChief,Logistics&EngineeringGroup TahiraRaza SEVP&GroupCheif,RiskManagementGroup
SheharyarQaisrani EVP&DivisionalHeadAgricultureBusinessDivision,C&RBGroup MuhammadHassanKhaskheli EVP&DivisionalHead,Personnel&IndustrialRelationsDivision,HRM&AGroup QamarHussain EVP&DivisionalHead,HumanResourcesDivision,HRM&AGroup AamirSattar EVP&FinancialController,FinancialControlDivision RazaMohsinQizilbash EVP&Head,LegalDivision MahmoodSiddique EVP&CIO,ITDivision AamirAbbasi SVP&DivisionalHead,CorporateCommunicationDivision S.M.AliZamin SVP,SecretaryBoardofDirectors&SecretaryCreditCommittees KashifAziz SVP,HeadPMO MuhammadNaeemAnsari VP/SecretaryOperationsCommittee
DepartmentsoftheBranch
Bankingproceduresaredividedbetweenvariousdepartments.Differentdepartmentsdotheirj obsinoccurrencewiththebankpolicies.InNationalBankofPakistaneachbranchisdividedinto variousdepartmentsdependingontheirsizeandvolumeofbusiness.Headofdepartmentmana - 38 -

geseachdepartment&officialsofthebranchfollowprocedures.Thedepartmentsworkingwith inNationalBankofPakistanRawatbranchareasunder: 1. ClearingHouseDepartment 2. RemittanceDepartment 3. ComputerDepartment 4. DepositsDepartment 5. AdvancesDepartment 6. AccountOpeningDepartment 7. AccountsDepartment 8. CashDepartment 9. PensionDisbursementDepartment
1. ClearingHouseDepartment
Aspartoftheirdailybusinessactivity,banksreceivechequesandotherfinancialinstrumentsfro mtheircustomersdrawnonotherbanks,tobecollectedandcreditedtotheiraccounts.Similarly, banksreceivecheques/instrumentsfromotherbanks,depositedbycustomersofthebanksdraw nonthecustomersofthedraweebanks.Therefore,thebanksactasCollectingBankswhentheys endcheques/instrumentsforcollectionandaspayingBanks,whentheyreceivecheques/instru mentsforcollectionfromotherbanks.Sinceeachbankreceiveandsendscheques/instrumentsf orcollectiontoandfromannumberofbanks,theprocessofsettlementwouldclearlybeverycum bersomeandtimeconsumingifeverycheques/instrumenthadtobesentbythecollectionbankto eachofthedraweebanksorbranchuponwhichdifferentcollectionitemsaredrawnandtoindivi duallypaytheproceedstoeachofthebanksendingcheques/instrumentinforcollection.Theref ore,thebankshaveevolvedwhatiscalledtheBankersClearingarrangement. TheClearingSystemenableschequestobepaidorclearedcentrallyandsettlementmadeforrec eivablesandpayablesbetweenthebanks.TheSBPcoordinatesclearingactivitythroughitsoffices,calledtheClearingHouses,setupinbigcitiesandt owns.WhereSBPdoesnotmaintainitsownoffice,someotherbank,usuallyNationalBankofPa kistan(NBP)performsthisfunction.Buttheclearinghousefacilityisavailableonlyforcheques /instrumentsdrawnonbankssituatedwithinthesamecity/clearinghousearea.
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National Bank Of Pakistan WorkingoftheClearingProcess

Undertheclearingarrangements,theStateBankofPakistan(SBP)offersaClearingHouseorac entralizedexchangefacility,whichworksonthefollowinggenerallines: AllthebanksoperatinginacitywhoaremembersoftheClearingHousemaintainanacco untwiththeSBPsClearingHouse. EverydayrepresentativesofallthebanksineverycitymeettheClearingHouse,firstme etinginthemorning,atanappointedtime,forthepurposeofdepositingtheirowncustom ers,cheques/instrumentstobecollectedfromotherbanksandreceivingcheques/instru mentdrawnontheiraccountholdersfromtheothersbanks. AttheClearingHouseaccountsofallthebanksaredebitedbythetotalamountofcheques /instrumentsdrawnontheircustomersaccountsandcreditedwiththeamountoftheirc ustomerscheques/instrumentsdrawnonotherbanks,asperthelistofchequessubmitte dbyeachbank. Thecheques/instrumentsreceived,alsocalledInwardClearing,andaretakingbackby eachbanktoitsbank/branch.Theamountsofeachcheques/instrumentisdebitedorreco veredfromeachdraweecustomersaccountandcreditedtotheClearingHouseaccount .Similarly,againsttheamountcreditedbytheClearingHouseasOutwardClearing,the appropriatecustomersaccountsarecreditedandclearingHouseaccountisdebited. Anycheques/instrumentsreceivedbyabankthatcannotbepaid,duetoinsufficientbala nceinitscustomersaccountorforanyotherreason,arereturnedbacktotheClearingHo useandacreditisclaimedandobtainedthereagainst.
Rules&RegulationsofClearingHouse
Timing:(MondaytoSaturday) i. ii. 1stClearingat10:00a.m. 2ndClearingat2.30p.m.
Eachbankwillsendcompetentrepresentativetoexchangethecheques. Eachbankisrequiredtoinsurethatallchequesandothernegotiableinstrumentsareprop erlystampedandsuitablydischarged Anobjectionmemomustaccompanyeachandeverychequewhenreturnunpaiddulyin itialed.
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EachbankisrequiredtomaintainsufficientfundsintheprincipalaccountwithSBPtom eetthepaymentobligations. TheStateBankofPakistandebittheaccountofeachmemberoftheclearinghousewithth eproportionateworkingexpensesincurredontheoperationofclearinghouse.Theseex pensesareverynominal. OutwardClearingattheBranch Thefollowingpointsaretobetakenintoconsiderationwhileaninstrumentisacceptedatthecou ntertobepresentedinoutwardclearing: Thenameofthebranchappearsonitsfacewhereitisdrawno. Itshouldnotstaleorpostdatedorwithoutdate. Amountinwordsandfiguresdoesnotdiffer. Signatureofthedrawerappearsonthefaceoftheinstrument. Instrumentisnotmutilated. Thereshouldbenomaterialalteration,ifso,itshouldbeproperlyauthenticated. Iforderinstrumentsuitablyindorsedandthelastendorseesaccountbeingcredited. Endorsementisinaccordancewiththecrossingifany. Theamountoftheinstrumentissameasmentionedonthepaying-inslipandcounterfoil. Thetitleoftheaccountonthepaying-inslipisthatofpayeeorendorsee(withtheexceptionofbearercheque). IfaninstrumentreceivedotherthanNationalBankofPakistanthenspecialcrossing stampisaffixedacrossthefaceoftheinstrument.Clearingstampisaffixedonthefac eoftheinstruments,paying-inslipandcounterfoil(Thestampisaffixedinsuchamannerthathalfappearsoncount erfoilandpaying-inslip).Theinstrumentissuitablydischarged,whereabearerchequedoesnotrequire anydischargeandalsoaninstrumentinfavorabanknotneedbedischarged. Theinstrumentalongwithpay-inslipisretainedwhilethecounterfoilisgiventothecustomerdulysigned.Thenthefollowingstep saretobetaken: 1. Theparticularsoftheinstrumentandthepay-insliporcreditvoucherareenteredintheoutwardclearingregister.
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2. Serialnoisgiventoeachvoucher. 3. Theregisterisbalanced;thecreditvouchersarebalancedfromtheinstrumentsa ndarereleasedtotherespectivedepartmentsagainstacknowledgementintheregister. 4. Theinstrumentsarearrangedbankwise. 5. Theschedulesarepreparedintriplicate,twocopieswhichareattachedwithther elevantinstrumentandthethirdiskeptasofficecopy. 6. Thehousepageispreparedfromschedulesintriplicate. 7. Theschedulesandhousepagesaresignedbythehouseinchargewithbranchstamp. 8. Thegrandtotalofthehousepageistakenandagreedwiththatoftheoutwardclea ringregister. 9. Theinstrumentalongwithduplicatescheduleandhousepagearesenttothemainoffice. 10. TheentryoftheinstrumentreturnedunpaidismadeinChequesreturnedRegister.Ifthei nstrumentisnottobepresentedagaininclearingthenacoveringmemoisprepared.Thec overingmemoalongwithreturnedinstrumentandobjectionmemoissenttothecustom erwhosentthesametohisaccount.
InwardClearingoftheBranch
1. Theparticularsoftheinstrumentsarecomparedwiththelist. 2. Theinstrumentsaredetachedandsortoutdepartmentwise. 3. Theentryismadeintheinwardclearingregister(serialno.Instrumentno.AccountNo) 4. Theinstrumentsaresenttoptherespectivedepartments 5. Theinstrumentsarescrutinizedineachrespectbeforehonoringthesame.
SpecialClearing
InadditiontothenormalclearingfunctionatClearinghouseitismutuallyagreedtoholdanextra clearingattheclearinghouseontheparticulardayandtimewhichisknownasspecialclearingi tisarrangedduetotherushofworkarisingoutofsay,moreHolidaysdeclaredbytheCentralGovt .atatime,butnormallyspecialclearingisheldonlastworkingdayofhalfyearlyandyearlyclosin gi.e.30thJuneand31stDec.everyyear.
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National Bank Of Pakistan 2. RemittanceDepartment

TheRemittancedepartmentdealswiththetransferofmoneyfromoneplacetoanother.Fundstra nsferfacilityorremittanceoffundsisonofthekeyfunctionsofthebanksallovertheworld.Remit tancesthroughbankingchannelssavetime,costslessandeliminatetherisksinvolvedinphysica ltransportationofmoneyfromoneplacetoanother.NationalBankofPakistantransfersmoneyi nthefollowingways. PayOrder DemandDraft MailTransfer TelegraphicTransfer PaySlip CallDepositReceipt LetterofCredit TravelersCheque TheJobresponsibilities&requirementsofremittancedepartmentinclude: Responsibleformoneytransfers,issuanceofpayorders&drafts,collectionitems,maintenanceofchequebooks&ATMcardsandalloth ercounterspecificproductsandservices Ensurehighestlevelofcustomerserviceinaprofessionalandcompetentmanner Mustensurethattheactivitiesarecarriedoutstrictlyinaccordancewiththelaiddownpr ocedures/processes,andSBP/Complianceguidelines ResponsibleforCash,Clearing,InlandremittancesincludingDemandDraftsandPay Orders Ensurehighstandardsofcustomerserviceswithintheassignedturnaroundtime EnsurecompliancewithSBP'sregulationsandinternalcontrols handlingcash,clearing,localremittances,andotherrelatedactivitiesatbranchlevel
PartiesinvolvedinRemittances
TherearefourpartiesinvolvedinRemittance,whichare Remitter Remittee IssuingBank payingBank - 43 -

Remitter Onewhoinitiates,orrequestsforaremittance.Theremittercomestotheissuingororiginatingbr anch,asksforaremittancetobemade,anddepositsthemoneytoberemitted.Thebankchargeshi macommissionforthisservice.Hemayormaynotbethebranchscustomer. Remittee ARemitteeisalsocalledthebeneficiary,orthepayee.Thepersoninwhosenametheremittancei smade.ARemitteeisalsotheonewhoreceivethepayment.
IssuingBank Thebankthatsendsoraffectstheremittancethroughdemanddrafts,telegraphictransfers,Mail Transfers,Payorderetc PayingBank PayingBankalsoknowsasthedraweebranch,thebranchonwhichtheinstrumentisdrawn.Ithas tomakethepayment(usuallylocatedinadifferentcityorcountry).
KindsofRemittances
Transferwithinthebranch Transferfromonebranchtoanother Transferfromonebanktoanotherbankinthesamecity Transfersfromonebanktoanotherbankintwocities.
3. AccountOpeningDepartment
Theopeningofanaccountistheestablishmentofbankercustomerrelationship.Thisdepartmentperformsthedutyofopeningaccountsforcustomers.It alsoissuescheckbookstocustomers.Apersonwhowishestoopenanaccountwiththebankhast ofillanaccountopeningformobtainedfromanybranchofNationalBankofPakistan.Thebanko fficertactfullyobtainsinformationaboutcharacter,integrity,responsibility,occupationandth enatureofbusinessoftheperspectivecustomer.Anyindividual,whohasattainedtheageofmaj orityandisofsoundmindcanopenandmaintainhis/heraccount.Twoormoreindividualsmayo penanaccountjointly.Similarly,businessorganizationssuchassoleproprietaryconcerns,part nershipfirms,andlimitedliabilitycompaniesaswellasnon- 44 -

profitorganizationslikeclubs,trusts,societies,associationsandNGOsetc,mayopentheiracc ounts.ThedocumentsrequiredforNationalBankofPakistansAccountopeningareshowedas AnnexedVIIattheendofthisreport. Thefollowingrequirementsarenecessaryforopeninganaccount. Identificationofthenewcustomer. Ascertainingthegenuinenessofthestatedoccupationbusinessofthecustomer. Determiningthecorrectresidentialandpermanentaddress. CompletionofallrelevantcolumnsoftheAccountopeningform. Propercompletionofdocumentation.
FunctionsofAccountOpeningDepartment
Providingaccountopeningformaccordingtothecustomer'srequirements, Guidethecustomerabouttherequirementsoftheaccountopeningandformfilling, Checktheformswhethertheyarecorrectlycompletedornot, Preparingchecklist, Stampingontheform, Maintainingaccountopeningregister, Pastingofformsinregisterafterreleasefromgeneralbankingincharge, Issuanceofchequebooks, Issuanceofaccountsmaintenancecertificate, Closureofaccount Verificationofsignatureincaseofchequepresentedbeforereleasingofaccountopenin gfromSScardisnotyetscanned
4. CashDepartment
Allphysicalmovementofcashinthebankismadethroughthecashdepartment.Asbankisborro wingandlendinginstitution,thereforecashisthetopmostpriorityofBank.Anotheraspectistha tcashdepartmentisforthesecuritypurpose,securityinasensethatthereshouldbenoembezzle mentoffundsorinmoneyleadedtobankbyanypartyorperson.Theefficiencyofbankisalsorela tedtothisdepartmentthemoreefficientthebankisthestrongerandbusyisthecashdepartment.C ashdepartmentperformfollowingfunctions Cashdepartmentowesitsimportanttothefactthatitisamajorpointofcontractbetweenthebank andthecustomer,thebanksmostvaluedrelationships.Thisdepartmentistheshowcaseoftheb
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ankandconveysthefirstimpressionsaboutthebankscommitmenttoprofessionalisminitssyst emsandproceduresandtocourteousandefficientcustomerservice. Normallycashdepartmentperformsfollowingfunctions Collectionoffunds Acceptanceofdeposits Collectionofutilitybills Paymentofchecks Remittances Actaccordingtoanystandinginstructions Transferoffundsfromoneaccounttoanother Verificationofsignatures Posting HandlingofPrizebond Thetwomainactivitiesofcashdepartmentareasfallows:
DepositCashInCustomersAccount
Whenthecustomerwanttodepositamountinhisaccountatopeningofaccountorafterthatthenh ehastofilladepositslipthatshowstheamountandtheaccountinwhichthecashwillbedeposited. Thentellerwillreceiveamountandcreditthecustomersaccountthatshowsincreaseincustom ersbankaccount.
MakePaymentsFromCustomersAccount
WhenthecustomerdrawsachequeonthebanktopayacertainamountthenBBOOperatorwillde bitthecustomersaccountthatshowsreductioninhisaccountbalance.
Chequeencashmentprocedure
ReceivingOfCheques Thecashispaidagainstthechequesoftheclient.Thefollowingpointsareimportant. Chequeisdrawnonsamebranch Chequeisnotpostdated. Amountinwordsandfigurearesame. Itshouldbebearerchequessothewordbearershouldnotcross.
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VerificationofSignature Afterreceivingthechequesthechequestheoperationmanagerverifythesignatureoftheaccoun tholderandthesignatureonthecheques.Ifthesignatureisnotsameitisreturnedbackotherwisef orwardtoBBOOperatorforposting. ComputerTerminalProcess Thechequeisreceivedincomputerterminal,whereBBOoperatorchecksthebalanceoftheacco untholder.TheBBOoperatoralsoseesthestoppaymentinstructions,whetherreceivedfromac countholderornot.AfterconsideringthesepointsBBOOperatorpostthechequeinBBO(Branc hbackofficesystem)andforwardtooperationmanager. PaymentOfCash Afterpostingthechequetheoperationmanagercancelledthechequeandreturnedbacktocashie r.Thecashierentersthechequeincashpaidregisteredandpaysagainstthesecondsignatureofre ceiveronthebackofthecheque.
5. DepositsDepartment
TheprimaryfunctionofNationalBankofPakistanistoacceptandreceivesurplusmoneyfromth epeople,whichtheywillinglydepositwiththeBank.LikeallotherBanks,NationalBankofPaki stanalsotakeincitationtoattractasmuchdepositorsasitcan.Thedepositdepartmentaccepts/c ollectsdepositfromaccountholders. TheNationalBankofPakistanofferdifferentdepositschemestoitscustomers,whichincludest hefollowing: CurrentDeposits PLSSavingDeposits FixedDepositAccount(TimeDeposits) ForeignCurrencyAccount NBPPremiumAamdani ForeignCurrencyAccount NationalIncomeDailyAccount(NIDA)
6. AdvancesDepartment
Thebankisprofitseekinginstitution.Itattractssurplusbalancefromthecustomeratlowrateofi nterestandmakesadvancesatahigherrateofinteresttotheindividualsandbusinessfirms.Credi - 47 -

textensionsarethemostimportantactivityofallthefinancialinstitutions,becauseitisthemains ourceofearnings.Advancesdepartmentisoneofthemostsensitiveandimportantdepartmento fthebank.Themajorportionoftheprofitisusuallyearnedthroughthisdepartment.Thejobofthi sdepartmentistomakeproposalsabouttheloans;thecreditmanagementdivisionofheadoffice directlycontrolsalltheadvances. TheadvancesDepartmentreceiveapplicationfromintendingborrowers.Afterreceivingappli cationtheadvancedepartmentprocessesitfurther.Afteranalyzinganddetailedinvestigation,t heydecidewhethertoapprovetheloanornot.SomeloanapprovalsaremadebytheManagerofth ebranchwithinhispowersasprescribedbythebankshigherauthorities,whilesomeloanapplic ationsaresubmittohigherauthoritiesfortheirapproval.Someadvancesareofthefollowingnat ure LoanagainstGold Agricultureadvancetofarmers Mediumtermadvanceforworkingcapital Longtermadvanceforsettingindustry Shorttermadvancetobusinessman TheNationalBankofPakistanofferfollowingproducts(Advances)toitscustomers NBPSaibaan NBPAdvanceSalary NBPCash&Gold StudentsLoanScheme NBPKarobar TheAdvancesdepartmentdealsinfollowingtransactions: 1. PreparationandsubmissionofproposalsofRunningfinance,Cashfinance,Demandfi nance,Exportfinance,Stafffinance,Financeagainstimportedmerchandiseetcforsan ctionoffinancelimitfromthehireauthority. 2. Preparationandpostingofvoucheringofalltypeoffinance. 3. Accruals&recoveringofMarkuponfinancesonperiodicalbasis. 4. ApprovaloftransferoffundsthroughDDTT,PO,MT,IBCOetctovariousbranchesbydebitingthelimits. 5. Preparationofweekly,monthly,quarterly,andannuallystatementtothehireauthority.
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6. Transferoffundsfromoneaccounttoanotheraccountofthepartytakingtheauthoritylet ter. 7. Preparationofadvancesrecord. 8. Timelysubmissionofreturns/reports,daily,weekly,monthly&quarterly. 9. Checkingofcomputeroutputsofthedepartmentondailybasis. 10. Balancingofallfinancingheads.
7. ComputerDepartment
Thisdepartmentisplayingaveryimportantroleinmakingthebankingproceduresfasterandhel pingthebankforprovidingbetterservicestoitscustomers.TheNationalBankofPakistanhasthr eetypesofbranchesinalloverPakistan,theseincluded a) ONLINEBRANCHES Thebranches,whicharedirectly,linkwithcentralcomputerAS400,throughwideareanetworkingthroughfiberoptics.Thesebrancheshavedumbterminaldir ectlylinkedwithcentralcomputer. b) BatchBranches Thebrancheswherealltransactionsarecarriedoutwiththecomputerbasesystembutthesebran chesarenotconnectedtothecentralcomputerwithwideareanetworking.Batchbranchesareusi ngthreetypeofsystem,BranchBackOffice(BBO)basedonFoxPro,BranchAutomatedSyste mbased(BAS)onUNIX,BranchIntegratedSystem(BIS)basedonFoxProinKarachimostlybr anchesarefacingthisproblem.BASwasestablishinthebeginningwhileBBOiscurrentlyimple mentednoweffortsareunderwaytoconvertallbranchesintoElectronicBankingSystem(EBS) whichisusedbyonlinebranchesasthissystemdoesnotrequireapersontoremainsittingtillthebr anchcloseditsdailyoperationbutthesystemautomaticallycloseitselfwhenthebranchtimingis over.Thedatabaseinheadofficeisalsobasedonthissystem. c) ManualBranches Thebrancheswherealltransactionsarecarriedoutmanuallyandrecordsaremaintainedonregis tersusuallystoredinbigwardrobes.ManualbranchesreportsRegionalheadofficeregardingth eirdailytransactions.InRegionalheadofficethroughOnLine,terminaldatagoestoheadoffice centralcomputer;ExceptforbranchesthoseareOnLineastheytransfertheredailydatadirectlyt hroughthereownterminal.Asday-today,activitiesofallbranchesarerecordedinacentralcomputer.
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Eveningdatareceivingcenter Dataformbatchbranchesreachthemainbranchinfloppydisketteswhileformmanualbranches itisinformofhardcopy.Datacomprisesoftransactionsinprofitlossaccount,currentaccount,a dvancesetctermedasDailyTransactionReport.Clerkinchargeregisteralldiskettesandman ualinregisterscalledjobbookingregisteroneforeachoftwotypeofdata.Thesefloppiesandm anualarebringinbyriders.Therearefourteenridersintotalwhobringinformationformallbranc heslocatedinKarachiregion. DataentryDepartment Thenexttaskafterreceivingthedataistoenterthatdataintoacomputer.Thefloppydiskisdirectl yinsertedinthecomputer.TheprograminusedisbasedonCOBOLlanguage.Thisprogramis designedinawaythatitdemandHashValuevaluebeforeopeningthefloppyforfurtheraction thisvalueservethepurposeofpasswordorpincodesendbythebranchonenteringthatvaluethed ataenterintothecomputer.Thiscomputerisattachedwiththeterminalofcentralcomputer.The operatorofthatterminaltakesthedatafromthecomputerandconverteditintoatextfilethrought hatterminalthedatafinallygoestothecentralcomputer.
DefectsandErrorHandling Errorsofdifferentoriginoccurwhenthedatagoestocentralcomputer.Sometimeretrievingdat afromthesystem(BAS,BBO,andBIS),otherthanusedinHO(EBS)alsocausederrors.Otherer rorsincludeUnmatched(Thiserroroccurswhendocumentnomatchedwiththepreviousoneex ists),nomaster(whenopeningofnewaccountisnotmentioned),DateinValid,duplicatecheque s(thiserroroccurwhenthelastobjectionisnotremoved).Theseandothersucherrorsareseenbyt hepersonincharge.Intheendofdayprintoutofthedataenterincentralcomputeristaken.AnyInc ompleteinformationforanybranchandanyinformationrequirebythatparticularbranchissentt othatbranch.MoreovermaterialisusedtomakeaWSTwhichissenttoStateBankofPakistan.
8. PensionDisbursementDepartment
TheNationalBankofPakistanwasPakistansleadinginstitutionwhichperformsthefunctiono fpensionpaymentsordisbursementstopensioners.Thepensiondisbursementdepartmentisre sponsibleformakingpensionpaymentstoGovernmentPensioners.Thepersonwhowantstore
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ceivehis/herpensionfromNationalBankofPakistancanopenanaccountwithanybranchofNat ionalBankofPakistan.ThebankperformsthisfunctionthroughDemandDraftPurchaseorsim plycalledDDPurchase.Thisdepartmentperformsfollowingfunctions: MakingPensionPayments OpeningofAccountofPensioner EntryofamountpaidtopensionerinGovernmentPensionersRegister VerificationsofSignaturesofPensioners MakingDemandDraftPurchaseRegister
9. AccountsDepartment
AccountsDepartmentofthebankcanbeconsideredthemostimportantdepartment.Thisdepart mentisbasicallyconcernedwithprocessesandactivitiesofrecovering,sorting,summarizinga ndreportingdataresultingfromthewholedaytransactionsofallthedepartments.Actuallythep rocessofthisactivitystartsfromthepreparationofalltherequiredvouchersbydifferentrelatedd epartments.Whenthesevouchersareprepared,thesearepostedintorespectivecomputertermi nalsbytherelevantdepartments.Beforemerging,abatchlistisprintedoutbyComputerDepart mentanddulycheckedbytherespectivedepartments.Afterthis,mergingstagecomes,afterwhi chaprooflistisprintedout.Thisisthestage,whereAccountsDepartmentstartsperformingitsfu nction.ProoflistischeckedbytheAccountsDepartment.Theaccountdepartmentpreparefollo wingvouchersandreports MonthlyProfit&Lossaccount-F48 GeneralLedger GeneralLedger-Abstract CheckBookIssueRegister WesternUnionpaymentsRegister DemandNotices MiscellaneousBook BankTransferscroll PostingNBPAdvanceSalary DailyStatement-F21 GeneralLedger-Headwise HashValueRegister EndofDayregister
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PostingNationalIncomeDailyAccount(NIDA) Monthlyreturnregister ChargesA/cregister P-L-SProfitlist WeeklyTelegram MailTransferRegister GovernmentScroll Providentfile GovernmentScrollDebit&Credit TransferRespondingAdviceDispatchedRegister-F15 CashRemittanceIN CashRemittanceOUT NBPGeneralAccount Utilitiesregister Statementofaffairs Closingentries Dailyactivitychecking Minorexpenserecording
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OrganizationStructureoftheBranch
Awelldevelopedandproperlycoordinatestructureisanimportantrequirementforthesuccessofanyo rganization.Itprovidesthebasicframeworkwithinwhichfunctionsandproceduresareperfor med.Anyorganizationneedsastructure,whichprovidesaframeworkforsuccessfuloperations .Theoperationofanorganizationinvolvesanumberofactivities,whicharerelatedtodecisionm aking,andcommunicationofthesedecisions.Theseactivitiesmustbewellcoordinatedsothatt hegoalsoftheorganizationareachievedsuccessfully. Theorganizationchart&OrganogramofNationalBankofPakistanRawatBranchisshownon AnnexedIV&AnnexedVattheendofthisreport.Thischartdefinesthelineofauthorityinthebra nchanditsdepartments.Itisasortofvisualpresentationoftheorganizationalstructure.Itspecifi esthedutiesandresponsibilitiesofthepersonnelorstaffofthebranch.Thepurposeofanorganiz ationalstructureistohelpincreatinganenvironmentforhumanperformance.Althoughthestru cturemustdefinethetasktobedone,therulessoestablishedmustalsobedesignedinthelightofa bilitiesandmotivationofthehumanrecourseavailable.Byanalyzingtheorganizationstructure ofthebranchfollowingelementscanbefoundinthestructure.
a) CentralizedDecisionMaking
TheBranchManagerofNationalBankofPakistanisresponsibleforalltheaffairsoftheBank.Al lthedecisionsrelatingtoBrancharemadebyhimandthesubordinateshavetoobeythesedecisio ns.AlltheemployeesoftheBankarereportdirectlytotheBranchManager.Thebranchhastwoo perationManagers.OperationManagerIcontrolsClearinghouse&RemittanceDepartmenta ndOperationManagerIIcontrolsDeposits,Advance&Branchaccountsdepartment.Bothofth emarereportdirectlytotheManagerregardingaffairsoftheirdepartments.TheChiefAccounta ntcontrolsAccountsdepartment&isreportdirectlytobranchManager.Thebranchalsohastwo cashiersresponsibleforcash&PensiondisbursementdepartmentreportsdirectlytobranchMa nger.TheBBO(BranchBackOfficeSystem)Operatorcontrolscomputerdepartmentofthebra nchandisreportdirectlytoOperationManagerIandBranchManager.
b) DownwardCommunication
Communicationistheprocessbywhichinformationisexchangedandunderstoodbytwoormor epeople,usuallywiththeinteresttomotivateorinfluencethebehaviorofothersintheorganizati
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on.Downwardcommunicationisthemessageandinformationsentfromtopmanagementtosu bordinatesinadownwarddirection.ThesamepatternisfollowedatNationalBankofPakistanR awatbranch,theManagerofthebranchsentorders,information&messagestofollowingsubor dinates
OperationManagerI OperationManagerII BBO(BranchBackOfficeSystem)Operator ChiefAccountant CashierI CashierII ClerkI ClerkII NonClericalStaff
c) ChainofCommand
Thechainofcommandisanunbrokenlineofauthoritythatlinksallpersonsinanorganizationan dshowswhoreportstowhom.ByanalyzingtheorganizationalstructureoftheNationalBankof PakistanRawatbranchitcanbefoundthatthereisascalarprinciplefollowedwithinthebranchb ecauseeachandeveryemployeeofthebranchknowstowhomtheycanreport.Theauthorityand responsibilityfordifferenttasksanddutiesaredifferent,aswellaseveryoneknowsthesuccessi velevelsofmanagementallthewaytothetop.
d) AuthorityandResponsibility
ThechainofcommandillustratestheauthoritystructureofNationalBankofPakistanRawatBra nch.Authorityistheformalandlegitimaterightofthemangertomakedecisions,issuesordersan dallocatesresourcestoachieveorganizationaldesiredoutcomes.Byanalyzingthechainofcom mandofNBP,onecancometotheconclusionthat,asthereisscalarpatternfollowedattheorgani zationalsetupofNBP,thereforeitisimpliedthateveryoneinhispositionknowsthatwhatisone sauthorityandwhatistheresponsibilityandtheauthorityitallocated.
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National Bank Of Pakistan e) Delegation

Delegationistheprocess,whichmanagersusetotransfertheauthorityandresponsibilitytoposi tionbelowinthehierarchy.Mostorganizationstodayencouragemanagerstodelegateauthorit ytothelowestpossibleleveltoprovidemaximumflexibilitytomeetcustomerneedsandadaptst otheenvironment.AtNationalBankofPakistanRawatbranchOperationManagershavesome authority&responsibilityrelatingtoaffairsoftheBranch.
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MAINOFFICES
ChandigarhroadKarachi:NBPbuildingChandigarhroadKarachi.
COMMENTSONORGANIZATIONSTRUCTURE
NBPhasgreatcontributionbuildingwidebankingstructureinPakistanandservingallaspectof nationlifeandallclassesofsociety.NBPisfullyawareofthedevelopmenttakingplaceinthewor ldaswellaschangesoccurineconomyandsocialconditionwithinthecountry.Bankisdetermin edtomeetnewchallengesbyredefiningitsgoalandstrategy
MYEXPERIENCE
IhavecompletedmyInternshipat(MainBranch)NationalBankofPakistanDistrictCourtBran chBahawalpur(0308)and.Ihavestartedmysix weekinternshipon23-07-
2012andgottrainingregularlyinvariousdepartmentsofthebankupto15-09-2012 IhaveexplainedtheworkingprocessofthedepartmentsthatIhaveworkedinaswellasthedepart mentsfunctioningthere.Iworkedinthefollowingdepartments; Loan,AccountsOpening. Advance Salary, Gold
ACCOUNTOPENING
Ihavespentmy1stweekinaccountopeningsectionandIlearntaboutwhataretheprerequisitesof openinganaccountofindividuals,minors,shakyhandsignaturepersons,anddifferentcompan ysaccountopeningprocedureandessentials.Briefdiscussionisgivenbelow.
HowtoOpenanAccount
Theapplicantisprovidedwithacopyofrulesandanapplicationformtoopenanaccount.Thisfor misfilledbytheapplicantinamannerprescribedanddulysingedbytheapplicant.Anexistingac countholderofthebankmustintroducetheapplication.AcopyofIDcardisattachedwiththespe cimensignaturecard.Theapplicationispresentedatthebranchwiththeinitialamountofdeposit forcreditofhisaccount.Theamountisenteredinthepassbookandissingedbytheresponsibleof
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ficerofthebank;finallyaCheckbookisissuedtotheaccountholder,forwithdrawalpurpose.Cla ssificationofDeposits Thedepositscanbeclassifiedunderthreemainheads. CurrentAccount SavingAccount FixedDeposit
CurrentAccountorDemandDeposits
CurrentaccountordemanddepositcanbewithdrawnbyChequeortransferredtosomeoneelseb ythedepositoratanytimewithoutpriornoticetothebank.Thisaccountcanbeopenedwithamini mumofRs.500/.Insuchcasethebankdoesnotallowanyinterestonit,becausesuchdepositsare meantforshortperiodandcanbewithdrawnwithoutanypriornotice.
SavingAccount
Insavingaccountthebasicpurposeistomobilizethesavingtrendinthelivesofpeopleandtoenab lepeopletodrawmoneywithincertainlimits. InsavingaccountatNBPthecustomersarenotallowedtodrawabigamountatoncewithoutanyn otice.MoreoverZakatwillbedeductedonlyfromtheamountwhichremainsinthebankfromfirs tdayofthemonthtilllastdayofthemonththecustomerisboundtofollowtherulesandregulation softhebank.Savingaccountscanbeopenedinfollowingshapes. Individualaccount Jointaccount
FixedDepositAccount
FixeddepositaccountisalsocalledTermDepositReceipt(TDR).Incaseoffixeddepositaccou nt,thetimeoftheaccountisinaccordanceofthedifferentfixeddepositschemesofferedbytheba nkandaccordingtowishesofthecustomers.Thecustomerscannotwithdrawmoneyfromhis/h eraccountinaccordanceandcomplianceoftermsdecidedbythebankandthecustomer.Inthisd
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epositorhavespecificamountforspecificperiod.Depositorwillwithdrawallamountatonce.A notherterminologyinfixeddepositaccountistheSpecialNoticeTimeDeposit(SNTD)thatme ansthatmoneywillbedepositedfor7or30days.Withdrawalwillbeonnoticeandprofitwillbeac cordingtorules.Noprofitwillbegivenifthewithdrawalwillbebeforedateofmaturity.
ADVANCESDEPARTMENTS
InadvancesIhaveclearedmyconceptsaboutthebasictermsusedinfinancingandthebriefintro ductionabouttheproductsofferedbythebanktoitscustomers.Basictermsareasfollows:
a)NBPAdvanceSalary
TheNBPAdvancesalaryhasbeentheflagshipproductforNBP.NBPAdvanceSalary,theleadingpersonalloanproductofthecountry,is maintainingitsinimitabilityeversinceitwaslaunched.Thiswasonlypossibleduetoitsswiftgro wthandremarkableloandisbursementofover118billion.xiYoucanavailupto20nettakehomes alarieswitheasyrepaymentinstallments.Itshasslefreeacquisitionwithnopriorformalitiesan deasyavailabilityinashortturnaroundtimeisattributedasthemostdistinguishingfeaturesofth eproduct.Theproductisofferedcountrywide.ThetermsandconditionsofNBPAdvancesalary isshownonnextpage:
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National Bank Of Pakistan Terms&Conditions

Eligibility PermanentEmployeesofGovt.,SemiGovt.,Autonomous,SemiAutonomous,Local&otherbodieswhoarema intainingtheirSalaryA/CsatNBP. DirectdeductionfromSalaryA/C Rs.490,000/EmployerwillprovideundertakingthatborrowersSalaryandendofservice benefitswillroutethroughhis/herSalaryA/CmaintainedatNBPduringthete nureoftheloanandhis/herendofservicebenefitsareatleastequaltotheamoun tofAdvanceSalaryrequired. HypothecationofConsumerdurablesownedbytheborrower. Three(3)UndatedCheques 5years(60months) Upto20nettakehomesalaries
Repayment MaximumL oanAmount Security
Max.Repay mentPeriod Advanceinte rmsof#ofnet takehomesal aries MarkupRat e ProcessingF ee Verification Charges LifeInsuran ce Documentat ionCharges Contact RemainingS erviceAge DebtBurden Minimumne ttakehomes alary
15% (Basedondiminishingbalancemethod) 1%ofLoanAmount Rs500/NoInsuranceofanykind. atactual YourSalarydisbursingNBPBranch. Atthetimeofapprovalanddisbursementtheapplicantsremainingserviceage shouldbe6monthsaftermaturityoftheloan 50% nominimumtakehomerequirement
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b) NBPCash&Gold
WithNBPsCash&Gold,thecustomersmeettheirneedforreadycashagainsttheiridlegoldjew elry.Therateofmarkupis15.5%p.a.Thisproducthasfollowingfeatures FacilityofRs.35,000againsteach10gramsofnetcontentsofgold Nomaximumlimitsofcash Repaymentafteroneyear Onlygoldornamentsacceptable WeightandqualityofgoldtobedeterminedbyNBP'sappointedschroffs Nopenaltyforearlyrepayment
UseofElectronicDatainDecisionMaking
Thetechnologicaldevelopmentinthefieldofinformationsystemsmakeitpossibleformanage menttouseelectronicdataindecisionmaking.Anunderstandingoftheeffectiveandresponsibl euseandmanagementofinformationsystemsandtechnologiesisimportantformanagers,busi nessprofessionals,andotherknowledgeworkersintodaysinternetworkedenterprises.Infor mationsystemsplayavitalroleinthee-businessandecommerceoperations,enterprisecollaborationandmanagement,andstrategicsuccessofbusi nessesthatmustoperateinaninternetworkedglobalenvironment.Thus,thefieldofinformatio nsystemshasbecomeamajorfunctionalareaofbusinessadministration.Themanagementofab usinesscanuseinformationsystemsintheirdecisionmakingprocess.Beforeproceedsitsimpo rtanttodiscusspreciselyaboutdecisionmaking. Decisionmakingcanberegardedasanoutcomeofmentalprocessesleadingtotheselectionofac ourseofactionamongseveralalternatives.Everydecisionmakingprocessproducesafinalchoi ce.xiiTheoutputcanbeanactionoranopinionofchoice.Asignificantpartofdecisionmakingskil lsisinknowingandpracticinggooddecisionmakingtechniques.Oneofthemostpracticaldecis ionmakingtechniquescanbesummarizedinfollowingsimpledecisionmakingsteps: 1. Identifythepurposeofyourdecision.Whatisexactlytheproblemtobesolved?Whyit shouldbesolved? 2. Gatherinformation.Whatfactorsdoestheprobleminvolve? 3. Identifytheprinciplestojudgethealternatives.Whatstandardsandjudgmentcriteri ashouldthesolutionmeet?
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4. Brainstormandlistdifferentpossiblechoices.Generateideasforpossiblesolutions. Seemoreonextendingyouroptionsforyourdecisionsonmybrainstormingtipspage. 5. Evaluateeachchoiceintermsofitsconsequences.Useyourstandardsandjudgmentc riteriatodeterminetheconsandprosofeachalternative. 6. Determinethebestalternative.Thisismucheasierafteryougothroughtheaboveprep arationsteps. 7. Putthedecisionintoaction.Transformyourdecisionintospecificplanofactionsteps. Executeyourplan. 8. Evaluatetheoutcomeofyourdecisionandactionsteps.Whatlessonscanbelearnt?T hisisanimportantstepforfurtherdevelopmentofyourdecisionmakingskillsandjudg ment. ThedecisionmakingofManagementofNationalBankofPakistanrelyoninformationsystemr esourceswhichincludespeopleandavarietyofhardware,software,data,andcommunications networktechnologiesasresourcestocollect,transform,anddisseminateinformationinBank.
InformationSystemResourcesofNBP
a) PeopleResources
Peoplearerequiredfortheoperationofallinformationsystems.Thesepeopleresourcesinclude endusersandInformationsystemSpecialists.TheManagementandemployeesofNationalBa nkofPakistanareendusersandKnowledgeworkersofinformationsystem.Thesearetheemplo yeesoftheBankwhospendmostoftheirtimecommunicatingandcollaboratinginteamsandwo rkgroupsandcreating,usinganddistributinginformation. TheInformationsystemsSpecialistarepeoplewhodevelopandoperateinformationsystems.T heyincludeSystemanalysts,softwaredevelopers,systemoperators,andothermanagerial,tec hnical,andclericalISpersonnelofNationalBankofPakistan.ThesystemanalystsofNationalB ankofPakistandesigninformationsystemsoftheBankbasedontheinformationrequirementso ftheendusers.Thesoftwaredeveloperscreatecomputerprogramsbasedonthespecificationof systemanalystsofNationalBankofPakistan.
b) HardwareResources
TheHardwareresourcesofNationalBankofPakistanincludeallphysicaldevicesandmaterials usedininformationprocessing.Specifically,itincludesnotonlymachines,suchascomputersa
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ndotherequipments,butalsoalldatamedia,thatis,tangibleobjectsonwhichdataarerecorded,f romsheetsofpapertomagneticoropticaldisks.
c) SoftwareResources
ThesoftwareresourcesofNationalBankofPakistanincludeallsetsofinformationprocessingi nstructions.Italsoincludessetsofoperatinginstructionscalledprograms,whichdirectandcont rolcomputerhardware.ThefollowingsaretheexamplesofNationalBankofPakistanssoftwar eresources: SystemSoftware:TheNationalBankofPakistanusesWindowsOperatingSystemsfo rcontrolsandsupportstheoperationsofacomputersystem. ApplicationSoftware:Thesearetheprogramsthatdirectprocessingforaparticularus eofcomputersbyemployeesoftheBank.BankusesBBOsystem,MicrosoftOfficesuit asapplicationsoftware.
d) DataResources
ThedataresourcesofNationalBankofPakistanaretypicallyorganized,stored,andaccessedby avarietyofdataresourcemanagementtechnologies.ThedataaboutBranchtransactionsisaccu mulated,processed,andstoredinaBBOsystemthatcanbe accessedbyManagerforananalysisanddecisionmaking.
e) Resources
ThenetworkresourcesofNationalBankofPakistaninclude: CommunicationMedia:TheBankscommunicationmediaincludecellularandlandl ine. NetworkSupport:TheBankuseshardware,software,anddatatechnologieswhichar eneededtosupporttheoperationanduseofacommunicationnetwork.TheBankusesco mmunicationprocesserssuchasModemsandinternetworkprocessors,andcommunic ationcontrolsoftwaresuchasnetworkoperatingsystemsandInternetBrowserpackag es(Opera).
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SourcesofFunds
RupeesinMillion s Year ShareCapital Reserves Borrowings Deposits OtherLiabilities ShareCapital Reserves Borrowings Deposits OtherLiabilities
2007
2008
2009
2010
2011
8,154,319 15,772,124 10,886,063 591,907,43 5 30,869,154 100 100 100 100 100
8,969,751 19,941,047 40,458,926 624,939,01 6 39,656,831 110 126 372 106 128
10,763,702 22,681,707 45,278,138 726,464,82 5 42,269,623 132 144 416 123 137
13,454,628 24,450,244 20,103,591 832,151,88 8 48,885,676 165 155 185 141 158
16,818,285 25,342,817 26,371,675 927,421,43 8 53,951,988 206 161 242 157 175
TheNationalBankofPakistanssourcesoffundsincludessharecapital,reserves,borrowings,d epositsandotherliabilitiesetc.Toanalyzetrend,Horizontalanalysisofeachitemiscalculated.
250 200 150 100 100 50 0 2007 Base Year 2008 2009 2010 2011 110 132 165
206
Share Capital Analysis TheSharecapitalreferstotheportionofaBank'sequitythathasbeenobtainedbytradingstockto ashareholderforcashoranequivalentitemofcapitalvalue.ThesharecapitalofNationalBankof Pakistanshowsanincreasingtrendinallyearsascomparetobaseyear.Theincreaseinsharecapi talduringallyearsindicatesshareholdersconcerntowardNationalBankofPakistanandeffici entbanksManagementpolicies.
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180 160 140 120 100 80 60 40 20 0
144 126 100
155
161
2007 Base Year
2008
2009
2010
2011
Reserves Analysis TheBanksreservesarebanks'holdingsofdepositsinaccountswiththeircentralbankpluscurre ncythatisphysicallyheldinbankvaults(vaultcash).ThereservesofNationalBankofPakistanfl uctuateduringallyearsastheyshowanincreasingtrend.Thereservesareincreased26%,44%& 55%intheyears2008,2009&2010respectively.Theyear2011representshighestincreasingpe rcentageof61%ascomparetobaseandpreviousyears.
416 450 372 400 350 300 242 250 185 200 150 100 100 50 0 2007 2008 2009 2010 2011 Base Year Borrowings
Analysis TheNationalBankofPakistansborrowingsfluctuatesduringallyearsandshowsamixedtrend .ThehighestpercentageofborrowingswereIncrease272%,316%in2008&2009respectively; - 64 -

howeversameareIncrease85%in2010ascomparetobaseyear.Theyear2011representsborro wingsasthesewereincreasedto142%comparingwithbaseyearandareincreased57%ascomp areto2010.
180 160 140 120 100 80 60 40 20 0 157
100
106
123
141
2007 Base Year
2008
2009
2010
2011
Deposits & other accounts

Analysis ThedepositsandotheraccountsofNationalBankofPakistanshowamixedtrendduringallyears .Intheyear2008thedepositswereincreasedverymarginally,withtheyear2009representsanin creaseof23%ascomparetobaseyear.Theyear2010representssecondhighestpercentageasde positsareincreasedto41%.Theyear2008indicatesanincreaseof57%,highestamongallyears.
200 180 160 140 120 100 80 60 40 20 0 175
128 100
137
158
2007 Base Year
2008
2009
2010
2011
Other Liabilities Analysis TheotherliabilitiesofNationalBankofPakistanarefluctuatingduringallyearsandshowanincr easingtrend.Theyear2008indicatesanincreaseof28%and2009indicatesanincreaseof37%.T heotherliabilitiesintheyear2010representanincreaseof58%.Theotherliabilitieswereonthei rpeakpercentagein2008astheshowsanincreaseof75%.
Generationoffunds
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RupeesinMillions
Year Markup/return/interestearned Netmarkup/interestincome Netmarkup/interestincomeafterprovisions Totalnon-markup/Interestincome Totalincome(Interest+non-Interest) PROFITBEFORETAXATION 2007 50,569,481 33,629,470 12,639,770 8,304,716 20,944,486 28,060,501 2008 60,942,798 37,058,030 26,087,216 16,415,862 42,503,078 23,000,998 2009 77,947,697 38,458,048 26,788,713 19,025,357 45,814,070 22,300,173 2010 88,472,134 43,221,658 33,251,969 17,632,640 50,884,609 24,415,119 2011 95,325,179 46,809,561 37,470,435 19,337,048 56,807,483 26,011,173
HorizontalAnalysis(%) Markup/return/interestearned Netmarkup/interestincome Netmarkup/interestincomeafterprovisions Totalnon-markup/Interestincome Totalincome(Interest+non-Interest) PROFITBEFORETAXATION 100 100 100 100 100 100 121 110 100 100 100 82 154 114 206 198 203 79 175 129 212 229 219 87 189 139 263 212 243 93
TheNationalBankofPakistansgenerationoffundsinclude Interestearned Netinterestincome Netinterestincomeafterprovisions Totalnonmarkupinterestincome Totalincome(Interestplusnon-Interest) ProfitbeforeTaxation

200 154 150 100 100 50 0 2007 Base Year 2008 2009 2010 2011 121 175 189
Interest earned
Analysis TheinterestearnedbyNationalBankofPakistanfluctuatesduringallyears,asitwasincreasedd uringallyearsascomparetobaseyear.Theinterestearnedisincreased21%in2008and54%in20
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09.Theyear2010representssecondhighestpercentageonaccountofinterestearnedasitwasinc rease175%.Theyear2011representspeakpercentageof189%ascomparetoallyears.
160 140 120 100 80 60 40 20 0 139
100
110
114
129
2007 Base Year
2008
2009
2010
2011
Net markup/ Interest income
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Analysis Thenetmarkup/InterestincomeofNationalBankofPakistanfluctuatesduringallyearsasitsho wsanincreasingtrend.Itwasincreased10%in2008and14%in2009ascomparetobaseyear.Th eyear2010representssecondhighestpercentageonaccountofNetmarkup/Interestincomeasit wasincreasedto29%,comparingwithbaseyear.Thepercentageisincreased39%in2011,high estamongallyears.
350 300 250 200 150 100 50 0
263 206 100 212
296
2007 Base Year
2008
2009
2010
2011
Net markup/ Interest income after provisions Analysis Thenetmarkup/interestincomeafterprovisionsfluctuatesandshowsaIncreasingtrendduring allyears.Itwasincreased106%(2008),112%(2009)and163%in2010.Theincomeisincreased 196%ascomparetobaseyear.
250 200 150 100 50 0 2007 B as e Y ear 100
198
229
212
233
2008
2009
2010
2011
Total non-markup/ Interest income
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Analysis TheTotalnonmarkup/InterestincomeofNationalBankofPakistanshowsamixedtrendduringallyears.Itwa sincreased98%in2008and129%in2009.Theincomeisincreased112%in2010but17%Decre aseascompareto2009.Therewasanincreaseof133%in2011,highestamongallyears.
300 250 200 150 100 50 0
203 100
219
243
271
2007 Base Year
2008
2009
2010
2011
Total income ( Interest + non Interest) Analysis ThetotalincomeofNationalBankofPakistanshowsanincreasingtrend.Itwasincreased103%i n2008and119%in2009.Thetotalincomeisincreased143%in2010andalsoincreaseverymarg inallyin2011.

120 100 80 60 40 20 0 100 82 79 93
87
2007 Base Year
2008
2009
2010
2011
Profit before Taxation
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Analysis TheprofitbeforetaxationofNationalBankofPakistanfluctuatesandshowsamixedtrenddurin gallyears.ItwasDecrease18%in2008and21%in2009.Theyear2010representshighestperce ntageonaccountofprofitbeforetaxationasitwasincreasedto13%.Theyear2011indicatesanD ecreaseof7%ascomparewithbaseyearbutitwasincreasein2008by11%.
AllocationofFunds
RupeesinMillions
Year LendingstoFinancialInstitutions Investments Advances OperatingFixedAssets OtherAssets 2007 21,464,600 210,787,868 340,677,100 25,922,979 30,994,965 2008 17,128,032 170,822,491 412,986,865 24,217,655 44,550,347 2009 19,587,176 217,642,822 475,243,431 25,147,192 59,316,438 2010 23,025,156 301,323,804 477,506,564 26,888,226 56,221,878 2011 44380396 319531213 525045764 27453815 65973449
HorizontalAnalysis(%) LendingstoFinancialInstitutions Investments Advances OperatingFixedAssets OtherAssets 100 100 100 100 100 80 81 121 93 144 91 103 139 97 191 107 143 140 104 181 207 152 154 106 213
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BalanceSheet
RupeesinMillions ASSETS Cashandbalanceswithtreasurybanks Balanceswithotherbanks Lendingstofinancialinstitutions Investments Advances Otherassets Operatingfixedassets Deferredtaxassets
2007 2008 2009 2010 2011
94,873,249 37,472,832 21,464,600 210,787,868 340,677,100 30,994,965 25,922,979 _ 762,193,593
106,503,756 38,344,608 17,128,032 170,822,491 412,986,865 44,550,347 24,217,655 3,204,572 817,758,326
115,827,868 115,442,360 131,675,907 28,405,564 30,389,664 27,581,695 19,587,176 23,025,156 44,380,396 217,642,822 301,323,804 319,531,213 475,243,431 477,506,564 525,045,764 59,316,438 56,221,878 65,973,449 25,147,192 26,888,226 27,453,815 3,062,271 6,952,666 7,935,497 635,132,711 1,037,750,318 1,149,577,736
LIABILITIES Billspayable 7,061,902 10,219,061 10,621,169 Borrowingsfromfinancialinstitutions 10,886,063 40,458,926 45,278,138 Depositsandotheraccounts 591,907,435 624,939,016 726,464,825 _ Sub-ordinatedloans _ _ Liabilitiesagainstassetssubjecttofinancelease 33,554 25,274 42,629 Otherliabilities 30,869,154 39,656,831 42,269,623 Deferredtaxliabilitiesnet 5,097,831 _ _ 645,855,939 715,299,108 824,676,384 NETASSETS 116,337,654 102,459,218 119,556,378 REPRESENTEDBY Sharecapital Reserves Un-appropriatedProfit Surplus
8,006,631 9,104,710 20,103,591 26,371,675 832,151,888 927,421,438 _ _ 106,704 76,477 48,885,676 53,951,988 _ _ 909,254,490 1,016,926,288 128,495,828 132,651,448
8,154,319 8,969,751 10,763,702 15,772,124 19,941,047 22,681,707 45,344,188 52,456,204 61,346,510 69,270,631 81,367,002 94,791,919 47,067,023 21,092,216 24,764,459 116,337,654 102,459,218 119,556,378
13,454,628 24,450,244 65,857,438 103,762,310 24,733,518 128,495,828
16,818,285 25,342,817 68,358,910 110,520,012 22,131,436 132,651,448
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IncomeStatement
RupeesinMillions
2007 50,569,481 16,940,011 33,629,470 4,723,084 2008 60,942,798 23,884,768 37,058,030 10,593,565 2009 2010 2011 77,947,697 88,472,134 95,325,179 39,489,649 45,250,476 48,515,618 38,458,048 43,221,658 46,809,561 11,043,469 7,011,046 6,201,358
Markup/return/interestearned Markup/return/interestexpensed Netmarkup/interestincome Provisionsagainstnon-performingadvances provisionfor/(reversalof)diminutioninthevalue ofinvestments provisionagainstoffbalancesheetobligations baddebtswrittenoffdirectly Netmarkup/interestincomeafterprovisions NONMARKUP/INTERESTINCOME Fee,Commission&brokerageincome Dividendincome Incomeformdealinginforeigncurrencies Gainonsale&redemptionofsecurities-net Investmentsclassifiedasheldfortrading Otherincome Totalnon-markup/Interestincome Totalincome(Interest+non-Interest) NONMARKUP/INTERSETEXPENSES Administrationexpenses Otherprovisionswrittenoff Othercharges Totalnonmarkup/Interestexpenses PROFITBEFORETAXATION Taxation Current Prioryears Deferred PROFITAFTERTAXATION Un-appropriatedProfitbroughtforward Transferfromsurplusonrevaluationoffixed assetsonaccountofincrementaldepreciation Profitavailableforappropriation
-40,248 373,249 605,529 2,954,678 3,137,768 Nil 4,000 20,237 3,965 Nil 39,899 Nil 4,722,735 10,970,814 11,669,335 9,969,689 9,339,126 28,906,735 26,087,216 26,788,713 33,251,969 37,470,435 6,781,683 7,925,370 8,930,391 9,631,579 9,587,856 3,263,246 2,878,932 1,920,336 1,099,493 1,747,073 1,042,827 3,969,057 3,028,165 2,211,139 3,132,461 2,341,690 395,427 4,591,894 2,512,363 2,390,211 -31,964 1,707 2,355 6,730 -41,011 147,363 1,245,369 552,216 2,171,336 2,520,458 13,544,845 16,415,862 19,025,357 17,632,640 19,337,048 42,451,580 42,503,078 45,814,070 50,884,609 56,807,483 14,205,911 18,171,198 22,571,470 26,202,577 30,117,272 168,027 747,521 620,780 148,026 541,186 17,141 583,361 321,647 118,887 137,852 14,391,079 19,502,080 23,513,897 26,469,490 30,796,310 28,060,501 23,000,998 22,300,173 24,415,119 26,011,173 8,311,500 11,762,650 9,221,513 9,835,048 9,193,471 391,497 Nil -4,133,282 -939,256 260,000 323,731 -4,220,242 -999,904 -2,043,887 -1,047,020 9,026,728 7,542,408 4,088,327 6,851,905 8,406,451 19,033,773 15,458,590 18,211,846 17,563,214 17,604,722 32,074,677 45,344,188 52,456,204 39,007 130,456 123,934 51,147,457 60,933,234 70,791,984
FinancialStatementsAnalysis
Financialanalysisisaprocesswhichinvolvesreclassificationandsummarizationofinformati onthroughtheestablishmentofratiosandtrends.Financialstatementanalysisistheprocessofe
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xaminingrelationshipsamongfinancialstatementelementsandmakingcomparisonswithrele vantinformation.Itisavaluabletoolusedbyinvestorsandcreditors,financialanalysts,andothe rsintheirdecisionmakingprocessesrelatedtostocks,bonds,andotherfinancialinstruments.Thegoalinanalyzin gfinancialstatementsistoassesspastperformanceandcurrentfinancialpositionandtomakepr edictionsaboutthefutureperformanceofacompany.Investorswhobuystockareprimarilyinte restedinacompany'sprofitabilityandtheirprospectsforearningareturnontheirinvestmentbyr eceivingdividendsand/orincreasingthemarketvalueoftheirstockholdings.Creditorsandinv estorswhobuydebtsecurities,suchasbonds,aremoreinterestedinliquidityandsolvency:thec ompany'sshort-andlongrunabilitytopayitsdebts.Financialanalysts,whofrequentlyspecializeinfollowingcertainind ustries,routinelyassesstheprofitability,liquidity,andsolvencyofcompaniesinordertomaker ecommendationsaboutthepurchaseorsaleofsecurities,suchasstocksandbonds. Theanalysisoffinancialstatementreferstotheexaminationofthestatementsforthepurposeofa cquiringadditionalinformationregardingtheactivitiesofthebusiness.Theusersofthefinancia linformationoftenfindanalysisdesirablefortheinterpretationofthefirmsactivities. Theoverallobjectiveoffinancialstatementanalysisistheexaminationofafirmsfinancialposi tionandreturnsinrelationtorisk.Thismustbedonewithaviewtoforecastingthefirmsfuturepr ospective. Analystscanobtainusefulinformationbycomparingacompany'smostrecentfinancialstatem entswithitsresultsinpreviousyearsandwiththeresultsofothercompaniesinthesameindustry. Threeprimarytypesoffinancialstatementanalysisarecommonlyknownashorizontalanalysis ,verticalanalysis,andratioanalysis.
RatioAnalysis
Ratioanalysisenablestheanalysttocompareitemsonasinglefinancialstatementortoexaminet herelationshipsbetweenitemsontwofinancialstatements.Aftercalculatingratiosforeachyea r'sfinancialdata,theanalystcanthenexaminetrendsforthecompanyacrossyears.Sinceratiosa djustforsize,usingthisanalyticaltoolfacilitatesintercompanyaswellasintercompanycompar isons.Ratiosareoftenclassifiedusingthefollowingterms:profitabilityratios(alsoknownasop eratingratios),liquidityratios,andsolvencyratios.Profitabilityratiosaregaugesofthecompan
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y'soperatingsuccessforagivenperiodoftime.Liquidityratiosaremeasuresoftheshorttermabilityofthecompanytopayitsdebtswhentheycomedueandtomeetunexpectedneedsfor cash.Solvencyratiosindicatetheabilityofthecompanytomeetitslongtermobligationsonacontinuingbasisandthustosurviveoveralongperiodoftime.Financialrati osallowforcomparison: Betweencompanies Betweenindustries Betweendifferenttimeperiodsforonecompany Betweenasinglecompanyanditsindustryaverage
ProfitabilityRatios
Thecontinuedviabilityofanybankdependsonitsabilitytoearnanappropriatereturnonitsasset sandcapital.Goodearningperformanceenablesabanktofunditsoperations,remaincompetiti veinthemarketandincreaseordecreaseinmarketfunds.Profitabilityratiosrelateprofittosales andinvestments.Theseratiosindicatethefirmsoveralleffectivenessofoperationsandgiveusi deahowwellfirmutilizeditsresourcesingeneratingprofitandshareholdervalue.
GrossProfitMarginRatio
GrossprofitmarginratioisusedtoassesstheprofitabilityofaBank'scoreactivities.Grossprofit marginindicatestherelationshipbetweengrossprofitandinterestearned.Ahighgrossprofitm arginindicatesthataBankcanmakeareasonableprofit.
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Formula=GrossProfit/Interestearned(Revenue)
2007 2008 2009 2010 2011 Year Ratio% 55.48 37.74 28.60 27.59 27.28
Gross Profit Margin

60 50 40 30 20 10 0 2007 2008 2009 2010 2011
Analysis TheYear2007hasbeenanoutstandingyearwiththebankrecordingthehighestprofitinitshistor yi.e..,55.48%.TheNationalBankofPakistanswiderangeofproductoffering,largebranchnet workandcommittedworkforcearesomeoffundamentalstrengthsthatenabledNBPtoachieve exceptionalinaverycompetitivemarket.Thegrossprofitis27.28%in2011.Thelowestpercent ageamongallyears.
NetProfitMarginRatio
Netprofitmarginmeasuresthepercentageofrevenueremainingafterallcostandexpenses,incl udinginterestandtaxeshavebeendeducted. Formula=NetProfitafterTaxes/Interestearned
2007 2008 2009 2010 2011 Year Ratio% 37.63 25.36 23.36 19.85 18.46
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Net Profit Margin

40 30 20 10 0 2007 2008 2009 2010 2011
Analysis Netprofitmarginshowspositivetrendtill2007andwasthehighestinthesameyearasitwas37.6 3%,thepercentageisdecreasedin2008asitwas25.63%.Thenetprofitmarginisonitslowestlev elattheendof2011asitindicatesapercentageof18.46%.Theprimaryreasonofthisdeclineiscur rentglobaleconomicconditionsandcurrentpoliticalcrisisinPakistan.
AssetsTurnover
ThisratioisusefultodeterminetheamountofrevenuethatisgeneratedfromeachRupeeofassets .TheBankswithlowprofitmarginstendtohavehighassetturnover,thosewithhighprofitmargi nshavelowassetturnover. Formula=Revenue/TotalAssets
Year 2007 2008 2009 2010 2011 Ratio 0.06 0.07 0.12 0.08 0.08
Assets Turnover
0.15 0.1 0.05 0 2007 2008 2009 2010 2011
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Analysis Theyear2007representsaratioof0.06,lowestamongallyears.Theyears2008,2010and2011in dicatesalmostsamepercentageof0.08%onaccountofbanksassetsturnover.TheNationalBa nkofPakistansassetsturnoverin2009is0.12,peakratioamongallyears.
ReturnonInvestment
Thisratioindicatestheprofitearnedbythebankontheresourcesemployed. Formula=Netincomeaftertaxes/TotalAssets
Year 2007 2008 2009 2010 2012 Ratio 0.024 0.018 0.028 0.016 0.015
Return on Investment
0.03 0.02 0.01 0 2007 2008 2009 2010 2011
Analysis Therewasanincreaseintheutilizationoftheresourcestill2009i.e..,0.024(2007),0.018(2008) and0.028(2009).Theratiowasdecreasedto0.016(2010)and0.015(2011).
LiquidityRatios
Theliquiditypositionofabankislikeareservoir.Itmaybeadequate,althoughnearlydepleted,ju stbeforethestartoftherainyseason.Oritmaybeinadequate,althoughthreequartersfulljustbef orethesummerdrought. Liquiditycanbedefinedas: Thebanksabilitynotonlytomeetpossibledepositwithdrawalsbutalsotoprovideforthelegiti mateneedsoftheeconomyaswell
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National Bank Of Pakistan CurrentRatio

Currentratioisameasureofthecurrentadequacyofcompany'scurrentassetstomeetitscurrento bligations.Itmustbegreaterthan1.Ifitislessthan1,liabilitiesexceedcurrentassets.ForeveryR s.1ofliabilities,thecompanyhasaratioamountofcurrentassetsavailable.Theconceptbehindt hisratioistoascertainwhetheracompany'sshorttermassets(cash,cashequivalents,marketablesecurities,receivablesandinventory)arereadil yavailabletopayoffitsshorttermliabilities(notespayable,currentportionoftermdebt,payables,accruedexpensesandtaxe s).Intheory,thehigherthecurrentratio,thebetter. Formula=CurrentAssets/CurrentLiabilities
Year Ratio 2007 2008 2009 2010 2011 1.00 1.12 1.40 1.15 1.22
Current Ratio
1.5 1 0.5 0 2007 2008 2009 2010 2011
Analysis Theyear2007(1.00)and2008(1.12)werenotsatisfiedforbankascurrentassetsarelessthancurr entliabilities.However,in2009(1.40)themanagementofNationalBankofPakistanisabletoo vercomethisproblem.Theyear2010(1.15)isalsogoodforbankasperstandardsofthisratio.Ag ainintheyear2011(1.22)themanagementofbankisabletoincreaseitscurrentratio.
CashRatio
Thisratioshowsthatthecashisenoughforpaymentofcurrentliabilitiesornot.Thisratioisobtai nedbydividingcashbycurrentliabilities.Forabankthisisthecashheldbythebankasaproportio nofdepositsinthebank. Formula=Cash/CurrentLiabilities
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Year Ratio
2007 2008 2009 2010 2011 3.07 2.69 2.74 2.36 2.44
Cash Ratio
3.5 3 2.5 2 1.5 1 0.5 0 2007 2008 2009 2010 2011
Analysis ThecashratioofNationalBankofPakistanshowsamixedtrendduringfiveyearsofoperations. Duringallyears,theratioissatisfactoryasperstandardsofthisratio.Theyear2007(3.07),repres entinghighestand2008(2.69),2009(2.74)&2010(2.36)representinglowestratioinallfiveyea rs.
DebtRatios
Theseratiosgiveusersageneralideaofthecompany'soveralldebtloadaswellasitsmixofequity anddebt.Debtratioscanbeusedtodeterminetheoverallleveloffinancialriskacompanyanditss hareholdersface.Ingeneral,thegreatertheamountofdebtheldbyacompanythegreaterthefina ncialriskofbankruptcy.
DebtRatio=TotalLaibilities/TotalAsset
2007 2008 2009 2010 2011 Year Ratio 84.41 84.58 87.26 87.41 87.58
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Debt Ratio
88 87 86 85 84 83 82 2007 2008 2009 2010 2011
TheDebttoEquityRatio
Thedebtequityratiocomparesacompany'stotalliabilitiestoitstotalshareholders'equity.Thisisameasu rementofhowmuchsuppliers,lenders,creditorsandobligorshavecommittedtothecompanyv ersuswhattheshareholdershavecommitted. Toalargedegree,thedebtequityratioprovidesanothervantagepointonacompany'sleverageposition,inthiscase,compa ringtotalliabilitiestoshareholders'equity,asopposedtototalassetsinthedebtratio.Similartoth edebtratio,alowerthepercentagemeansthatacompanyisusinglessleverageandhasastronger equityposition. Formula=TotalLiabilities/TotalShareholdersequity
2007 2008 2009 2010 2011 Year Ratio 112.35 97.77 89.57 93.47 91.17
Debt to Equity
150 100 50 0 2007 2008 2009 2010 2011
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Analysis ThedebttoequityratioofNationalBankofPakistanshowsaratioof112.35%in2007.Theratiois decreasedto97.77%intheyear2008.Theratioisfurtherdecreasedin2009asitshowsapercenta geof89.57%.Therewasanincreaseintheratioasitshowsapercentageof93.47%in2010.Theye ar2011representstheratioof91.17%.
FixedAssetsTurnover
Thisratioisaroughmeasureoftheproductivityofacompany'sfixedassets(property,plantande quipmentetc)withrespecttogeneratingrevenue.Formostcompanies,theirinvestmentinfixed assetsrepresentsthesinglelargestcomponentoftheirtotalassets.Thisannualturnoverratioisd esignedtoreflectacompany'sefficiencyinmanagingthesesignificantassets. Formula=Revenue/OperatingFixedAssets
2007 2008 2009 2010 2011 Year Ratio% 1.95 2.51 3.10 3.29 3.47
Fixed Assets Turnover

4 3 2 1 0 2007 2008 2009 2010 2011
Analysis ThefixedassetsturnoverratioofNationalBankofPakistanhasanincreasingtrendtill2011.The ratioincreases1.95(2007)to2.51(2008).Theyear2011representshighestfixedassetsturnove rratioforNationalBankofPakistani.e..,3.47.Thebanksefficiencytoutilizetheseassetshasbe endecreasedto3.10intheyear2009howeveritwasincreasedin2010astheratiois3.29.
EarningsPerShare
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EarningsperShare=NetProfitAfterTaxandDividends/WeightedAveragenum berofOrdinaryShare
2007 2008 2009 2010 2011 Year Ratio% 21.62 17.48 13.05 13.05 15.43
Fixed Assets Turnover

30 20 10 0 2007 2008 2009 2010 2011
EarningperShareIncreasein2007is21.62andin2008at17.48.Thisratiodecreasesin2009,201 0andremainssamein2011.
HorizontalAnalysis
Thistechniqueisalsoknownascomparativeanalysis.Itisconductedbysettingconsecutivebal ancesheet,incomestatementorstatementofcashflowside-bysideandreviewingchangesinindividualcategoriesonayear-toyearormultiyearbasis.Themostimportantitemrevealedbycomparativefinancialstatementa nalysisistrend.Acomparisonofstatementsoverseveralyearsrevealsdirection,speedandexte ntofatrend(s).Thehorizontalfinancialstatementsanalysisisdonebyrestatingamountofeachit emorgroupofitemsasapercentage.Suchpercentagesarecalculatedbyselectingabaseyearand assignaweightof100totheamountofeachiteminthebaseyearstatement.Thereafter,theamou ntsofsimilaritemsorgroupsofitemsinpriororsubsequentfinancialstatementsareexpressedas apercentageofthebaseyearamount.Theresultingfiguresarecalledindexnumbersortrendrati os. Formula=CurrentYearamount/BaseYearamount*100 Horizontalanalysis,whilstsimpletoexecuteandusefultoacertainextent,hasitslimitations.Th eselimitationsinclude: Beinghighlydependentontheselectionofbaseyearandtheperiodunderexaminationi nthefinancialmodel.
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Horizontalanalysisprovideslittleinsightintowhythetrendoccurredinafinancialmod el. Horizontalanalysisdoesnotprovideinsightintowhetherthetrendinthefinancialmode lresultswassuperior/inferiortosomebenchmark. Horizontalanalysisdoesnotaddressthechallengeofnegativenumbers.
HorizontalAnalysisofBalanceSheet
ASSETS Cash Balanceswithotherbanks Lendingstofin.institutions Investments Advances Operatingfixedassets Otherassets TotalAssets LIABILITIES ShareCapital Reserves Un-appropriatedprofit SurplusOnReveal.ofassets Billspayable Borrowings Depositsandotheraccounts Liabilitiesagainstassets subjecttofinancelease Otherliabilities TotalLiabilities 2007
100 100 100 100 100 100 100 100
2008
112 102 80 81 121 93 144 107
2009
122 76 91 103 139 97 191 83
2010
122 81 107 143 140 104 181 136
2011
139 74 207 152 154 106 213 151
2007
100 100 100 100 100 100 100 100 100 100
2008
110 126 116 45 145 372 106 75 128 111
2009
132 144 135 53 150 416 123 127 137 128
2010
165 155 145 53 113 185 141 318 158 141
2011
206 161 151 47 129 242 157 228 175 157
HorizontalAnalysisofIncomeStatement(%)
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2007 Markup/return/interestearned Markup/return/interestexpensed Netmarkup/interestincome Provisionsagainstnon-performingadvances provisionfor/(reversalof)diminutioninthevalue ofinvestments provisionagainstoffbalancesheetobligations baddebtswrittenoffdirectly Netmarkup/interestincomeafterprovisions NONMARKUP/INTERESTINCOME Fee,Commission&brokerageincome Dividendincome Incomeformdealinginforeigncurrencies Gainonsale&redemptionofsecurities-net Investmentsclassifiedasheldfortrading Otherincome Totalnon-markup/Interestincome Totalincome(Interest+non-Interest) NONMARKUP/INTERSETEXPENSES Administrationexpenses Otherprovisionswrittenoff Othercharges Totalnonmarkup/Interestexpenses PROFITBEFORETAXATION Taxation Current Prioryears Deferred PROFITAFTERTAXATION UnappropriatedProfitbroughtforward Transferfromsurplusonrevaluationoffixed Assetsonaccountofincrementaldepreciation Profitavailableforappropriation
100 100 100 100 100
2008
121 141 110 224 -927
2009
154 233 114 234 -1504
2010
175 267 129 148 -7341
2011
189 286 139 131 -7796
Nil
100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
Nil Nil
232 90 117 88 381 17 -5 845 121 100 128 445 3403 136 82 142
Nil Nil
247 93 132 59 290 196 -7 375 140 108 159 369 1876 163 79 111 -1056 -309 45 96 164
Nil Nil
211 115 142 34 212 107 -21 1473 130 120 184 88 694 184 87 118 -240 -631 76 92 0
Nil Nil
198 130 141 54 300 102 128 1710 143 134 212 322 804 214 93 111 66 -323 93 92 0
Nil
-1304 84 81 141
Nil
100 100
Nil
334 119
Nil
318 138
Nil
0 0
Nil
0 0
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VerticalAnalysis
Whenusingverticalanalysis,theanalystcalculateseachitemonasinglefinancialstatementasa percentageofatotal.Thetermverticalanalysisappliesbecauseeachyear'sfiguresarelistedvert icallyonafinancialstatement.Thetotalusedbytheanalystontheincomestatementisnetsalesre venue,whileonthebalancesheetitistotalassets.Thisapproachtofinancialstatementanalysis,a lsoknownascomponentpercentages,producescommon-sizefinancialstatements.Commonsizebalancesheetsandincomestatementscanbemoreeasilycompared,whetheracrosstheyear sforasinglecompanyoracrossdifferentcompanies. Verticalanalysisisatechniqueforidentifyingrelationshipbetweenitemsinthesamefinancials tatementbyexpressingallamountsasthepercentageofthetotalamounttakenas100.Inabalanc esheet,forexample,cashandotherassetsareshownasapercentageofthetotalassetsand,inanin comestatement,eachexpenseisshownasapercentageofthesalesrevenue. InVerticalanalysis,variouscomponentsofthefinancialstatementsarestandardizedbyexpres singthemasapercentageofsomebases. Examplesofcommon-sizedstatementsinclude: Componentsofthebalancesheetexpressedasapercentageoftotalassets Componentsoftheincomestatementexpressedasapercentageofsalesorrevenue
VerticalAnalysisofBalanceSheet
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National Bank Of Pakistan VerticalAnalysis(%)

ASSETS Cash Balanceswithotherbanks Lendingstofin.institutions Investments Advances Operatingfixedassets Otherassets Total LIABILITIES ShareCapital Reserves Un-appropriatedprofit SurplusOnReval.ofassets Billspayable Borrowings Depositsandotheraccounts Liabilitiesagainstassets Subjecttofinancelease Deferredtaxliabilitiesnet Otherliabilities Total 2007
12.44 4.91 2.81 27.65 44.69 3.40 4.06 100
2008
13.02 4.68 2.09 20.88 50.50 2.96 5.45 100
2009
18.23 4.47 3.08 34.26 74.82 3.95 9.33 100
2010
11.12 2.92 2.21 29.03 46.01 2.59 5.41 100
2011
11.45 2.39 3.86 27.79 45.67 2.38 5.73 100
2007
0.89 1.95 5.45 5.66 1.30 2.00 71.18 0.004
2008
1.02 2.34 1.66 3.86 0.30 1.52 84.15 0.0031 0.01 4.32 100 100
2009
1.10 2.15 2.89 6.61 1.64 1.81 80.22 0.0029 0.77 4.12 100
2010
1.07 2.07 4.97 4.48 0.93 1.43 77.79 0.0021 0.37 4.05 100
2011
1.09 2.43 5.95 6.18 1.25 4.94 77.66 0.0044 0.67 4.85 100
4.17
VerticalAnalysisofIncomeStatement(%)
Markup/return/interestearned Markup/return/interestexpensed Netmarkup/interestincome 2007 119 40 79 2008 143 56 87 2009 170 86 83 2010 173 88 85 2011 167 85 82
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Provisionsagainstnon-performingadvances Provisionfor/(reversalof)diminutioninthevalue ofinvestments Provisionagainstoffbalancesheetobligations baddebtswrittenoffdirectly Netmarkup/interestincomeafterprovisions NONMARKUP/INTERESTINCOME Fee,Commission&brokerageincome Dividendincome Incomeformdealinginforeigncurrencies Gainonsale&redemptionofsecurities-net Investmentsclassifiedasheldfortrading Otherincome Totalnon-markup/Interestincome Totalincome(Interest+non-Interest) NONMARKUP/INTERSETEXPENSES Administrationexpenses Otherprovisionswrittenoff Othercharges Totalnonmarkup/Interestexpenses PROFITBEFORETAXATION Taxation Current Prioryears Deferred PROFITAFTERTAXATION UnappropriatedProfitbroughtforward Transferfromsurplusonrevaluationoffixed assetsonaccountofincrementaldepreciation Profitavailableforappropriation 11.12 0 Nil 0.096
11.12 68 16 8 2 5 0 0.34 31
25 0.87 0.0094 Nil

26 61 19 7 9 1 0 3 38
24 1.32 0.044 Nil

25 58 19 4 7 10 0 1.2 42
14 5.80 0.0077 Nil

20 65 19 2 4 5 0 4 35
11 5.52 Nil Nil

16 65 17 3 5 4 0 4 34
100
33 0.39 0.04 34 66 19 0.9 0.76 21 45 75
100
43 1.7 1.37 46 54 27 Nil -9.92 17 36 106
100
49 1.3 0.7 51 48 20 -9 -2.18 8 40 114 0 0.27 154
100
51 0.29 0.23 52 48 19 -1 -4.0 13 34 75 0 0 0
100
53 0.95 0.24 54 46 16 0.4 -1.8 15 31 0 0 0 0
0
0.091 120
0
0.30 143
CriticalAnalysis(TheoryvsPractical)
DuringInternshipitwasmyprimeobjectivetofurnishmyknowledge(Theory)tovariouspracti calsituations.Thepracticalworkpresentsananalyticalproblemwhilerelatingtheorywithprac tice.Asaresult,analysisofpracticalversustheoryrequiresadistinctapproach.Thispartofrepor tistheessenceoftheinternship,asthiswillhelptobetterunderstandtheworkingenvironmentoft hebankbyfindingtherelationshipbetweenwhatiswritteninthebooksandwhatisactuallygoin
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goninfields.Thetheorywritteninthebooksincasesisnotimplementedasitis.Insomecasestheo ryisimplementedwithalittlemodificationbutinothercasestheoryhasnothingtodowithpractic e. Inaccounting,banksdontprepareworksheet,butpartofworksheetispreparedliketrialbalanc e.Thesecuritiesfortheloansarehandledinthesamewayastheorysayslikemortgage,pledge,hy pothecation,advancesagainstinsurancepoliciesorliquidationprocedureisthesame.Thereiss omedifferenceliesintypesofloansinbankthatistheorytalksaboutfourorfivetypesofloansthat iscashfinance,overdraft,loansetc.,butinpracticetherearesomemoretypesusedbybanklikeru nningfinance,demandfinanceetc.Allotherconceptsofremittances,bills,foreignexchangede posits,lettersofcreditareinaccordancewiththeoryalmost.Abank'sbalancesheetisdifferentfr omthatofatypicalcompany.Youwon'tfindinventory,accountsreceivable,oraccountspayabl e.Instead,underassets,you'llseemostlyloansandinvestments,andontheliabilitiesside,you'll seedepositsandborrowings. Conclusion Tome,Theorygivesthedirectiontounderstandtheprocessesandtheterminologiesgoingacros stheWorldusingbestbusinesspracticesinabroaderviewcoveringeachandeveryaspectofposs iblebusinessscenarios.Onthecontrarypracticallifeisspecific,enclosedinajar.
SWOTANALYSISOFNATIONALBANKOFPAKISTAN
SWOTanacronymthatstandsforstrengths,weaknesses,opportunitiesandthreats.SW OTanalysisacarefulevaluationofanorganizationsinternalstrengths,weaknessesasw ellasitsenvironmentalopportunitiesandthreats.InSWOTanalysisthebeststrategiesac complishinorganizationsmissionby: 1. Exploitingopportunitiesandstrengths. Neutralizingitsthreatsandavoidingitsweaknesses.
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ORGANIZATIONALSTRENGTHS Askillorcapabilitythatenablesanorganizationtoconceiveandimplementitsstrategies Moreequity. BeingthepioneerofbankinginPakistan,NBPisoneoftheoldestbanksandisther ichestinexperience. NBPfocusesonconsumerbankingbylucrativeschemes,productsandservicess uitingbesttothewantsanddemandsofthecustomers. Thebandisalwaysonthelooktoimproveitsservicesbothtothedomesticaswella soverseascustomers. Humanresourcesdevelopmentandintroductionofnewtechnologytowardsmo dernbanking. 24hourscashaccessandsafepaymentproductsforhighvaluetransaction. NBPinstantfinancingproductsforcustomerswantinginstantloanfacilitiesNB Pbranches. Havingpotentialtoencounterthecompetitiveenvironmentinthemarket. Customerenjoystheservicesattheresidentiallocalities. NBPoneofthelargestfinancialinstitutionsofPakistanwitheightmillionofcust omerbaseNBPholds24.6%shareoftimeanddemanddepositsinthecountry.Lo calcurrencydepositscomprise67%ofbank'stotaldepositswhileforeigncurren cydepositsaccountfortherest. NBPhasanextensivedomesticbranchnetworkof1265(accordingtothelatestda ta)brancheslocatedalloverPakistan.TheBankalsohasapresencein22internati onallocationsincludingtheUSA,UnitedKingdom,EuropeandtheFarEast.
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NBPisworkingasrightarmgovernmentofPakistanasitisresponsibleforallclai msofgovernmentforrecoveryaswellaspayment.AlldepositorofNBPareinreli efthattheirmoneysecurityisguaranteedbygovernmentofPakistan. ItactsasanagentoftheCentralBankwherevertheStateBankdoesnothaveitsow nBranch. WEAKNESSES Askillincapabilitythatdoesnotenableanorganizationtochooseandimplementstrategi esthatsupportsitsmission NBPstaffespeciallyatlowerconsiderstheirworkasburden.Theyusuallywastetim einothertaskapartinperformingtheirduty.Usinggovernmentpropertyforthereow nneed.Theyarereluctanttoacceptchangebroughtbylatestrestructuringefforts. Thegeneraloutlookandinteriorlayoutofbranchesarenotasrequiredaccordingtom odernbanking NBPbearinguplargeburdeninrunningthosebranches,whicharenotproducingany incomebutkeeponaddingexpenditure. NBPisfarbehindinofferingmodernbankingfacilitylikeautomatedtellermachines thenothercommercialbankinPakistanasveryfewbranchesinallovercountryhavet hisfacility. NBPhasveryfewonlinebranches.Whilefromremainingbranchesdatagatheringis timeconsuming,andnotfoolproof.Quantumofsettlementwithindifferentbranche sispendingbecauseofthisupdatingdailyrecordisbecomingverydifficult. Customershavetofallowlonglengthyprocedureforopeningofaccountaswellappl yingfordebt.WhichdiscouragemostofthepeopletoinvestinNBP. SlowdowninadvancesgrowthintheshorttermasNBPfocusesonqualitycustom ersinthemarkets.
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Extremelyburdenonemployeesduetoworkpressure. Nocoordinationamongtheemployees. Discriminationinservicestocustomerswithlargeandsmallaccounts. Inconsistencyinefficiencyandworkingatmosphereduetothelargestofbranche s. Senseofinsecurityintheemployeesservingatlowprofitablebranchesduetother ightsizing. Victimofpolitical,legalandsocio-culturalpressures.
OPPORTUNITIES Inareathat,ifexploited,maygeneratehighperformance. Inopportunityexist,informofopeningofladiesbankingsectionwithinthebranc h,whichisentirelyanewideaandit,willattractcustomer. GrowingpoliciesofgovernmentonbusinessandcommercesectorprovideNBP opportunitiestotakeadvantagesofthesepoliciestomeetefficientlywiththebusi nesspeopletosolvetheirproblemswiththeinstantcashandfinancingfacilities. Customerfeedbackondifferentproductsandaccountshasreallyimprovedtheb ankperformanceandencouragetheatmosphereforotherfuturepolicies. NBPalsohasanopportunitytoexpanditsnewtechnologicaladvancementlike,o nlinebankandinternetbankingfacilitiesinordertoservethecustomersmoreeffi ciently.
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Ebankingfacilityisalsoanewopportunitywhichisaflourishingbusinessinforeig ncountriesandcanalsobehere,ifNBPtakestheinitiatives. Duetoefficientandveteranmanagementgroup,NBPcanalsoimprovewellande xpanditsforeignoperationsuccessfully. NBPprovideopportunitytoutilizeitsskillsandefficienciesinleasingbusiness. Settingoftargetforofmakingatleast500branchescountrywideonline. Closingofallthosebranches,whichareburdenonNBP. Comprehensivetrainingprogramshasbeendeveloptoupgradethecorebanking skillsoftheexistingstaffaswellasintegratehighqualityhiring. Toimprovethemotivationofstaffameritbasedcultureisbeingpromoted.Throughoverhaulingthemanpowerrecruitme ntpreservationandperformanceappraisalsystem. THREATS Anareaintheenvironmentthatincreasesthedifficultiestheorganizationsachievinghi ghperformance. Facingmorecompetitionbyforeignbanksinthemarket. Alsotheincreasingoperationofprivatebanks. Highlyattractiveandadvanceservicesbyforeignbankstotheircustomers. Thethreatofinconsistencyandgovernmentpolicyregardingtobusinessandeco nomicssectors,speciallypoliticalandregionalsituationwhichmakestheenviro nmentuncertain. Growingglobaltechnologicaladvancement.
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Strictregulationbygovernmentovercreditfacilitiestothecustomersaswellasto meettheprudential. Lossofconfidenceofoverseascustomersduetofreezingofaccounts. MajorthreatsNBPfacingisfromitscompetitorespeciallyfromdenationalizedc ommercialbank.InwhichMCBisonthetopofthelist,TheBankprovides24hour bankingconveniencewiththelargestATMnetworkinPakistancovering15citie swithover100ATMlocations. Retailbankingandconsumerbankingresultingintheproductssuchascreditcard s,housingfinanceandautomobilefinancelendingtosmallindividualconsumer s,andpurchasesofautomobiles,housing,andconsumergoodsaregenerallymad eonacashbasis.Thesearecausinganotherthreat,ifnotcounterwillresultinsignif icancelossofcustomers Nowbanksareusingtechnologywhichcoversthedistancenomatterhowfarawa yanyone,throughasatellitebased,on-linerealtimebankingsystemandbyofferingtelephonebanking,electronicfundstransfe r,E-Bankingandothermodernfacilities. CONCLUSION FromSWOTanalysiswecanconcludethatthemanagementofthebankshouldadoptsys tematicplanningforthebankgrowth,introducednewschemesNBPhasmorecustomers ascomparetootherbanks,iftheygivenproperattentiontoeverycustomerthenifinfewye arsitwillbetheleadingbankofthecountry.
PESTANALYSIS
Itisveryimportantthatanorganizationconsidersitsenvironmentbeforebeginningthemarketi ngprocess.Infact,environmentalanalysisshouldbecontinuousandfeedallaspectsofplanning .Theorganization'smarketingenvironmentismadeupof:1.Theinternalenvironmente.g.staff (orinternalcustomers),officetechnology,wagesandfinance,etc.2.Themicro- 93 -

environmente.g.ourexternalcustomers,agentsanddistributors,suppliers,ourcompetitors,et c.3.Themacroenvironmente.g.Political(andlegal)forces,Economicforces,Socioculturalforces,andTechn ologicalforces.Theseareknownapest. Political: Privatizationpolicyandderegulation. ImpactofsubsidizedcreditaffectingandNCBs. Employmentpractices,Unions,Associations. PoliticalInterferenceandharassment. Incidentsofhightaxationonbankingindustry. Economical: Constraintsinmobilizationofpublicsavingsbecauseofinflation. Staffcost. Operatingcost. Baddebts Social&Cultural: Inadequatehumanresources. Culturalstraintosavings. Defaulterslobby. Decliningeducationandworkethics. Inadequateaccountability. Adequateempowerment. Technological: Inadequatecommunicationinfrastructure. Inadequatecomputerfacilities. InadequateITtraining
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MICROINVIROMENT
NationalBankofPakistanistodayaprogressive,efficient,andcustomerfocusedinstitution.Ith asdevelopedawiderangeofconsumerproducts,toenhancebusinessandcatertothedifferentse gmentsofsociety.Someschemeshavebeenspecificallydesignedforthelowtomiddleincomes egmentsofthepopulation.TheseincludeNBPAdvanceSalary,NBPSaiban,NBPKisanDost, NBPCashnGold. NationalBankofPakistanisoneofthelargestcommercialbankoperatinginPakistan.Ithasrede fineditsroleandhasmovedfromapublicsectororganizationintoamoderncommercialbank.T heBank'sservicesareavailabletoindividuals,corporateentitiesandgovernment.Whileitconti nuestoactastrusteeofpublicfundsandastheagenttotheStateBankofPakistan(inplaceswhere SBPdoesnothavepresence).Ithasdiversifieditsbusinessportfolioandistodayamajorleadpla yerinthedebtequitymarket,corporateinvestmentbanking,retailandconsumerbanking,agric ulturalfinancing,treasuryservicesandisshowinggrowinginterestinpromotinganddevelopin gthecountry'ssmallandmediumenterprisesandatthesametimefulfillingitssocialresponsibili ties,asacorporatecitizen.
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FIVEFORCEMODEL
Thisapproachiswidelyusedforcompetitiveanalysis.Itisbecauseofthehighintensityofcompe titionamongcompaniestherefivemaincompetitiveforces. Rivalryamongcompetitivefirms: Itisaverypowerfulforceamongthecompetitiveforcesthestrategiespursuedbyonefirmcanbes uccessfulonlytoextentthattheyprovidecompetitiveadvantagesoverthecompetitor.Theseco mpetitivestrategiesmaybeloweringprices,bestqualityseries.TheNBPofferingverylowchar gesandemanddraft,telegraphytransfer,mailtransferandgiveotheradditionalservicestothecu stomersandtotheNation.BecauseNBPisaNationsBank.. Potentialentryofnewcompetitors: Whenevernewfirmscaeasilyentersaparticularindustry,thecompetitionincreases.Thegoutre striction,tariffs,patentsetccanstopnewfirmtoenterintothebusinessasperBankingindustryis concernedthismarketisalreadyverysituatedinPakistanandtherearebankswithqualityservic esandlowcharges.SothereisnothreattoNBPfrompotentialentryandNBPisalsoapublicsector bankbecauseofthatno othernewbanknottakesoverit. PotentialDevelopmentofsubstituteproducts: Thisisthethirdfactoraffectingthecompetitions.Theremaybesomeotherproductcanbesubstit utetheproductofthatindustry.ForexamplebanksofferingsawingschemesinPakistanandthes eschemesarealsoofferedbyGPOsinPakistansotheymustcompetetheminthisfield.Iftheyoff erlowratesthanGPOssopeoplewillgotodepositinGPOs.Peopleconcentrationhighratessoth atswhysawingPLSaccountsaremorethencurrentaccounts.ThenextexampleswillATM,wh ichsubstitutepresentingchequesatcounterandencashit.TheNBPislackinginthisfield.Itmust improveinthisfieldtocompetethecompetitors.
BargainingPowerofSuppliers: Thebargainingpowerofsupplieraffectstheintensityofcompetition,especiallywhenthereare alargenumberofsuppliers.Incaseofbanksthesuppliersarecustomerstheysupplythemoneyto banks.Nowtheymustoffergoodservices,quality,andsafety.Lowchargesetctocustomers.Int
- 96 -

hisfieldNBPisverygood.B/Catoffersgoodqualityservicestocustomers.Theychargelowchar gesonremittances.Sothatsitisacompetitiontootherbanks. BargainingPowerofConsumers: Whencustomersareconcentratedorlarge,orbuyinvolume,theirbargainingpowerrepresentsa majorforceaffectingintensityofcompetition.NowthenumbercustomersinPakistanforbanks areveryhigh.Banksofferingvarietyofproductsandservicestotheircustomers.NBPhavealarg enumberofcustoms.Nowitmustoffergoodservicesandproductstotheircustomerstoattractth emtocometoNB
- 97 -
Conclusions
TheNationalBankofPakistanplaysakeyroleinthestrategicnationaldevelopment.Th ebankhashistoricallybeenthefinancialarmofthegovernmentandhasenjoyedthebles singsofstatesupportintheformofhugepublicsectorfundsanddeposits. IncontracttootherbankspopulatingtheFSIsector,NBPismandatedtoupholdpublicin terest.ItiscriticaltooasallotherbanksandNBFIsinpublicsectorhavebeencloseddown ormergedwithNBP. IncontracttootherbankspopulatingtheFSIsector,NBPismandatedtoupholdpublicin terest.ItiscriticaltooasallotherbanksandNBFIsinpublicsectorhavebeencloseddown ormergedwithNBP. ThecurrentmanagementofNationalBankofPakistanwashiredpurelyfortheirinternat ionalexperience,businessorientationtoturnaroundapurelypublicinstitutionintoasus tainableandcommerciallyviablebankservingpublicinterestalongthelinesofalargem oderncommercialbank. TheNationalBankofPakistanhaseffectivebudgetingsysteminplace.Annualbudgeto fthebankisapprovedbytheBoardandmonthlycomparisonsofactualresultswiththebu dgetarepreparedandreviewedbytheseniormanagement. TheNationalBankofPakistanhasacomprehensiveframeworkofwrittenpoliciesandp roceduresonallmajorareasofoperationssuchasCredit,TreasuryOperations,Finance, InternalauditandComplianceapprovedbytheBoard. TheNationalBankofPakistanprovidessustainablefinancingforgrowthofindustrieso fcriticalnationalimportancesuchasenergy,education,healthcare,transport,shipping ,Research&development.
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Recommendations
TheNationalbankofPakistanshouldbefullypreparedinitsmanagementoffinancialcr isesanditsbusinesscontinuityplanning,withinthestandingcommitteeframework,an dshouldworkwithotherstostrengthennationalcrisesmanagementpreparations. Thebankshouldimprovethequalityoftrainingofitsemployeesandtheintegrity,contr olsandefficiencyofitssystems,processesandfinancialreporting. Thebankshouldimproveitsrecruitment,retentionanddevelopmentandtoreformtheB ankspensionscheme. ThebankshouldrenegotiatetheBankslongtermfinancialframeworkandtooverhault heBanksfinancialsystem. TheBankshouldimproveITcapabilityintheanalyticalareasandtodevelopamediumte rmstrategyforbankingandmarketoperations. TheNationalbankofPakistanshouldmonitortheimpactofitsoperationsontheenviron ment,whichismainlythroughtheuseofpowerandthegenerationofwaste. NBP,beingtheonlylendingarmtothegovernmentforpublicsectordevelopmentshoul ddesign,developanddeliverproductandservicesforeconomicgrowth. ThebankshouldprovidesupporttotheMicro,SmallandMediumenterprisestherebyre ducingunemploymentandhelpingtocreateamoreequitabledistributionofwealth. TheNBPshouldadoptmodernbankingtoolsandtechniques.Qualityleadership,clear vision,investmentinITinfrastructureandhumanresourcedevelopment. Thebankshoulddevelopsoftwareforpensiondisbursement. AsforasIslamicBankingenvironmentisconcernedthemanagementandemployeesof NBPshouldworktogetherforbasicresearchfordiscoveringtheirownlaws,developin gtheoriesorconceptsforthebetterdirectionoftheirownbusinessenvironmentaccordi ngtoQuran&Sunnah. Thebranchesshouldreduceitslargeexpensesinordertoincreasethevalueofthebank. TheNBPshouldstrengthenincentivesandacceleratearesultsorientedtrainingandcommunicationsprogramsformanagementandstaff. TheNationalBankofPakistanshouldimplementafinancialinclusionprogramtomeett heneedsofunderservedeconomicsubsectors,includingoutreachprogramstomeetthe requirementsoftheagriculture,housing,SMEandmicrofinancesectors.
- 99 -

TheNationalBankofPakistanshouldintroduceaframeworkforconsolidatedsupervis ionandreorganizetheregulatoryarchitecturetoallowbetterregulationandsupervisio noffinancialcontroldivisionofbank.
- 100 -
References
1. CH.MUMTAZA.FAROOQ(GeneralManagerHR) 2. JamshaidZia(ManagerHR) 3. RaoIftikhar(BranchManager) 4. TahirChohan(OperationManger) 5. MuhammadLuqman(ClearingHouse) 6. FaizUllah(Remittance) 7. M.YousafKhan(MTO/CADOfficer) 8. MuhammadSajid(MTO/GoldLoan/Advances) 9. http://www.nbp.com.pk/EcomomicBulletin/FS-Complete-31-12-2007.pdf 10. NBPQuarterlyReportSeptember2008 11. http://www.nbp.com.pk/nbp/About_Us/About_US.jsp 12. NBPQuarterlyReportSeptember2008 13. http://www.nbp.com.pk/nbp/About_Us/About_US.jsp 14. Black'sLawDictionarypage471(5thed) 15. Principlesofmarketing8EDbyKotler&ArmstrongG7 16. http://www.nbp.com.pk/Aamdani/index.htm 17. http://www.nbp.com.pk/Premium/index.htm 18. http://www.nbp.com.pk/Saibaan/index.htm 19. http://www.nbp.com.pk/advancesalary/index.htm 20. http://www.nbp.com.pk/CashnGold/index.htm 21. http://www.nbp.com.pk/StudentLoan/index.htm
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22. SBPPrudentialRegulations 23. http://www.nbp.com.pk/nbp/NBP_Treasury.jsp 24. http://www.nbp.com.pk/nbp/Treasury_Products.jsp 25. http://www.nbp.com.pk/nbp/About_Us/DReport3.jsp 26. http://www.nbp.com.pk/nbp/About_Us/DReport3.jsp 27. NBPAnnualReport2007 28. NBPAnnualReport2009 29. NBPAnnualReport2010 30. NBPAnnualReport2011 31. http://www.jcrvis.com.pk 32. http://www.jcrvis.com.pk/ratingscale/rating_process.htm 33. http://www.nbp.com.pk/advancesalary/index.htm
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National Bank Of Pakistan

SubmittedBy:SajidAhmed RollNo:M.COMEve-B-109 Session:2010-2012 SubmittedDate: 15-10-2012 ContactNo: 0313-6279257