www.vu39.

com/forum

INTERNSHIP REPORT ON

PABBI, BRANCH

Submitted To
SIR HAJI GUL NAWAZ

Submitted By
AAMIR KHAN
MBA (Finance) Roll # 369

Session 2006 – 2008

DEPARTMENT OF BUSINESS ADMINISTRATION GOMAL UNIVERSITY D.I.KHAN

Gomal University D.I.Khan

1

www.vu39.com/forum

IN THE NAME OF

The most Merciful & e The Gracious & Beneficent Whose Help & Guidance we always solicited
Gomal University D.I.Khan
2

Allah

Compassionat

www.vu39.com/forum

step

at every

at every movement

Dedicate d To
Gomal University D.I.Khan
3

My Dear Parents,
Respected Teachers

www.vu39.com/forum

&
Lovely Friends.
Specialy Waqas Ahmad Khattak

TABLE OF CONTENTS
CHAPTER NO  

CHAPTERS NAME
PREFACE ACKNOWLEDGMENT

PAGE NO

05 06 07 – 09 10 – 17
4

01 02

INTRODUCTION HISTORY OF THE NBP

Gomal University D.I.Khan

www.vu39.com/forum 03 04 05 06 07 08 09   
OBJECTIVE OF THE NBP BANKING OPERATIONS DEPARTMENTS IN NBP
PRINCIPAL OF ADVANCING MONEY

18 – 22 23 – 32 33 – 36 37 – 41 42 - 51 52 - 55 56 - 60 61 - 62 63 64

DEPOSIT MANAGEMENT REMITTANCES CRITICAL ANALYSIS OF NBP RECOMENDATIONS CONCLUSION BIBLIOGRAPHY

PREFACE
Internship is considered to be a compulsory practical training for the MBA students. Its duration is two months and has proved to be golden chance of training for the students in the concerned organization. The main purpose of such training is to make students able to apply theoretical knowledge in practical environment. Students come to know about the knowledge like organization planning, policies, management structure, activities and objectives. My internship was arranged in the year 2007 started from July 01, 2007 to August 31, 2007. In to this respect, the department sends me to National Bank of Pakistan Pabbi branch. As I am specializing in Finance, therefore this reputable organization suited me up to the best of my satisfaction. I did my internship training there very successfully where the Bank staff welcomed me in a very positive manner, provided me a lot

Gomal University D.I.Khan

5

of information about NBP, its working and objectives and policies. The staff also cooperated with me in practical work. At present I am going to present all work of NBP there in shape of this report according to instruction given by our internship incharge Prof. Muhammad Saeed Ahmad. I am hopeful of the positive outcome of such training in the upcoming days.

www.vu39.com/forum

AAMIR KHAN MBA (Finance) Roll # 369 Session 2006-08

ACKNOWLEDGMENT
All praise is for ALLAH, the most merciful and his prophet Muhammad for every torch of guidance and knowledge for humanity. I offer humblest and sincerest words of thanks to GOD Almighty WHO blessed me with potential and ability to make material contribution to already existing ocean of knowledge. I am humbly grateful to my honorable and respected teacher Sir Haji Gul Nawaz, who furnished me with the opportunity to complete this Research Report, and thereby consolidating my concepts, enriching my knowledge, establishing my skills and strengthening my

Gomal University D.I.Khan

6

www.vu39.com/forum
confidence, especially his lectures.

AAMIR KHAN Roll # 369 Session 2006-08

Gomal University D.I.Khan

7

www.vu39.com/forum

CHAPTER # 1

INTRODUCTION

Chapter # 1

INTRODUCTION
BACKGROUND OF THE STUDY
All the students of M.B.A (Banking & Finance) are required to do their six week internship in financial institutions/commercial banks. Being employee of the NBP my internship was arranged by IBP at Pabbi Branch, Nowshera for 2 months. The purpose of this internship is to acquaint the student with the practical knowledge and to provide an opportunity to understand the differences of theory and practices. National Bank of Pakistan was established on November 9, 1949 under the National Bank of Pakistan Ordinance No.XIX of 1949 in order to cope with the crisis conditions which were developed after trade deadlock with India and devaluation of Indian Rupee in 1949. Initially the bank was established with the objective to extend credit to the agriculture sector. The normal procedure of establishing a banking company under the companies Law was set aside

Gomal University D.I.Khan

8

www.vu39.com/forum
and the Bank was established through the promulgation of an ordinance due to the crisis situation that had developed with regard to financing of jute trade. The Bank commenced its operations from November 20th 1949 at six important jute centers in the then East Pakistan and directed its resources in financing of jute crop. Bank’s Karachi and Lahore offices were subsequently opened in December 1949. 1.1 PURPOSE OF THE STUDY The purpose of my study is to functioning of branch to analyze the overall performance of National bank of Pakistan in the finance and banking sector of Pakistan. The purpose of this study is to analyze the theoretical application of different fields of studies i.e. Management, Finance etc. in practical field of banking with reference to National bank of Pakistan. I have tried my best to cover each and every aspect of the branch. LIMITATIONS OF STUDY The following are most common hurdles which I internee felt: • Secrecy of the bank. • Non-availability of information • Lack of Appropriate data • Fidelity bond holder METHODOLOGY OF DATA COLLECTION The following three sources are used to collect and present the data: • Primary data • Secondary data • Field Experience For primary data collection, I have used interview and observation method. I have interviewed different persons in the branch which include the branch manager and other staff members and also the customers of the branch. I have also interviewed the OG III and Assistant Vice President because he remains compliance officer in the branch. I have also used Observation method for the primary data collection. I observed the condition of the branch, the working environment, its staff, records and other operations of the bank. For secondary data collection, I have consulted different published material. I studied different circulars of National bank of Pakistan. I have also studied the annual report of the National bank of Pakistan, some books on banking and also the financial statements of the bank.

1.2

1.3

Gomal University D.I.Khan

9

www.vu39.com/forum

Chapter # 2

HISTORY OF THE N.B.P

Gomal University D.I.Khan

10

www.vu39.com/forum
Chapter # 2

HISTORY OF THE N.B.P
The history of the N.B.P. is part of Pakistan struggle for economic independence. In 1947 at the time of partition the economy of the country was main controlled by non-Pakistanis, most of them were Hindus. This partition of the Sub-Continent brought wide spread disturbance and bloodshed on both side of the border. This resulted in the mass migration of population from. one country to another. In this situation the economy of the country influenced badly. At the time of independence it had been arranged between India and Pakistan that Reserve Bank of India should act as the common monetary authority for both countries upto end of September, 1948. But the arrangement did not prove satisfactory. In August, 1947, Pakistan had been given a first installment of twenty crore of rupees, out of its shares of cash balance of undivided India to meet immediate requirements. The balance amounting to fifty crore rupees was to be paid later, But when Pakistan demanded that amount, they refused to hand over the money unless Pakistan agreed to give up interest in Kashmir and thus the Government of Pakistan could not agree. This situation occurred, when Reserve Bank of India was functioning as the Central Bank of Pakistan. As a result of this experience, Pakistan felt it could not place any reliance on the Reserve Bank of India. It was clear that its own central Bank was an indispensable necessity and it was opened by the Quaid-e-Azam on the first of July, 1948. When state Bank came into existence, it claimed its share of the assets of the Reserve Bank of India against the Indian currency, retired from Pakistan territory. But again dispute arose. The dispute is still unsettled and these assets have not been delivered to Pakistan. Many other disputes occurred between the two countries. As a result of ratio controversy, the regular trade and payments between the two countries came to stand still. One of the immediate consequences of this situation was the withdrawal by Marwari merchants of the India Finance which used to be employed annually for the movement of Pakistan's Jute Crop. A crisis of the first magnitude threatened, because the Jute Crop was already in the market and so their was no money to move it, prices begin to fall precipitously. At that time there was no JUTE in Pakistan, not a single jute loom or spindle and no posibi1ity of utilizing any of the crop within the country. As jute prices collapsed, foreign merchants and foreign Banks to promote agrarian nearest. It was very evident that the Government of Pakistan could not afford to continue as a spectator of these developments. So two ordinance were passed immediately, one setting up the Jute. Board, and the other the decision of establishing of National Bank of Pakistan. The

Gomal University D.I.Khan

11

www.vu39.com/forum
object of the Jute Board was to re-organize and rehabilitate the Jute trade by helping parties to handle it and to stabilize the market. The National Bank was established to provide finance to suitable parties Thus it came about that The National Bank stood behind the Jute trade, the State Bank of Pakistan stood behind the National Bank and the Government stood behind the State Bank.

OBJECTIVES OF THE BANK
Commercial Banks operate under profit motive and perform various functions in a modern society. National Bank of Pakistan is a commercial Bank till with socioeconomic objectives e.g. to earn profit and at the same time develop the economy of the country and uplift the socioeconomic status of community. The main objectives of the Bank are as follows 1. Maximum Profit As the name of the Bank indicates that it was established to finance the nation. As a Business organization its objective is to earn more and more profit by the least expenditures. Good Administration. A good administration is an objectives of the Bank. Without proper administration no organization can run successfully. A good administration should have the following qualities:a: Quick decision. b: Correct decision. Customer Service. The main objective of the Bank is to serve his customers. It serves the customers on both directly and indirectly. Bank collects money from an individual, firms, and limited Companies etc. It also gives loan to the people. Developments. Banks spending large amount of its profit for its own development. Therefore, the large amount of its profit is spent on opening the new branches of the bank and increasing the work efficiency of the Bank. Expenditure Discipline. Bank is trying to minimize its expenditure. So, it keeps strict control over expenditure and avoids wastage of money at every stage. Branch expenditure must not increase more then 15% of the last year's budget for correspondence. Zonal Inspection. Every branch should be inspected by Zonal inspector at least once a month as

2.

3.

4.

5.

6.

Gomal University D.I.Khan

12

www.vu39.com/forum
directed by Principal Office under B.D. may verify from time to time. 7. Maximum Utilization of Staff. The staff requirement of the most branches is sufficient. However, services should be utilized systematically for effective functioning.

ROLE OF BANK IN ECONOMIC DEVELOPMENT
Banks are the instruments of economic development. In the mobilization of money, the banking sector can greatly help the country. It can promote the growth of internal resources for development by attracting deposits from the public to the maximum possible extent and channeling these deposits into productive loans and investments. The Bank has been playing major role in financing developmental activities in Pakistan. National Bank of Pakistan has helped in the growth of economy in all spheres of our National life. It has contributed significantly to economic growth of the country and has served trade and industry, generally in wide sphere of operations. For the agricultural growth, N.B.P was the first Bank to introduce scheme of credit to small borrowers, farmers, craftsman, and small traders etc. The Bank advances liberal credit for rural and agricultural development and has taken the Banking services literally to the farmer's doors, small, short run loans given farmers are free of interest. It helps the farmers giving advances without interest in shape of fertilizers, seeds and other agricultural instruments so that the country may become self sufficient in wheat and other crops. The National Bank of Pakistan has been playing a major role in industrial development. The Pakistan Government has encouraged private enterprises by giving fiscal and monetary concessions and has tried to create a favorable climate for foreign investment in specified industries. The National Bank of Pakistan has continued to serve industrial needs in its sphere all along. It provides usually short-term and in some cases medium term finances. The N.B.P has a predominant share in the total advances to the industry in country. This has been possible mainly because of the large resource at the disposal. The large number of branches all over the country which help them to attract large deposits, and the comparatively low rate of interest at which bank is able to make advance to the industry. National Bank of Pakistan has assisted to accelerate industrial growth in the country. Now Bank also provide finances to small scale industries upto a period of five years. National Bank of Pakistan has introduced the people's credit facilities to the common man on a large and more liberal scale than before. The main objective of this scheme is to make a contribution towards building up of a strong middle class which is essential for ensuring strengthened stability to a developing economy. Bank also helps to promote the establishment of new companies by underwriting their shares. Bank is making an ever increasing contribution to the industrialization of the country. Through their foreign exchange business in Pakistan and operation abroad the Bank makes a contribution towards the earning of foreign exchange.

Gomal University D.I.Khan

13

www.vu39.com/forum
The Bank has also introduced various saving schemes and a perpetual income plan on attractive term to encourage saving and promote social security. The NATIONAL Bank of Pakistan is working as an agent of State Bank of Pakistan. But it does not mean that the Bank has monopoly on Government Business. It also faces the keenest possible competition from other banks. The Bank has been able to main its position in the Banking System of the county and to make a substantial contribution to the development of economy. Efforts had been made, by its officers and staff particularly the senior officers to improve the working efficiency of the Bank, to secure more business and to build up sound working traditions. As regard the future, the task of the Bank is plain enough, it has been an instrument of NATIONAL policy in the past, so it shall continue in the years to come. Its doors have been opened for anybody, from anywhere in Pakistan. They will keep open as before. NATIONAL Bank of Pakistan is trying to improve the work efficiency of their Bank and they want that their Bank and they want that their Bank should serve the people so the Bank is serving the nation by different ways and it is playing a major role in economic development of the country. It will continue to perform these tasks with the same enthusiasm and vigor. I trust and believe, it will always be said that the National Bank of Pakistan truly exists in the service of the National.

MANAGEMENT AND ORGANIZATION OF A BANK
The management and organizational structure of N.B.P. are described as under:1. Board of Directors In the management of the Bank, the Board of Directors is at the top of. The controlling bodies. Since there are no private share holders, so there is no general meeting of the share holders and are no elected Directors. The Board consists of a nominated President, a Secretary and 9 other members. After nationalization of Bank in 1974 most of the powers of Board have been transferred to Banking Council and executive Board. The Secretary of the board has limited administrative powers. Executive Board The general direction and supervision of the affairs of the Bank lies in their respective Executive Boards. The President, Secretary and 0 other members of the Executive Board are appointed by the Federal Government. The President being the Chief executive of the Board Directors controls and manages the affairs of the Bank. Chief Executive.

2.

3.

Gomal University D.I.Khan

14

www.vu39.com/forum
The President is the administrative head of a Bank. He presided over the meetings of the executive Board, manages and controls the affairs of the Bank. The President holds office at the pleasure of Federal Government. 4. Divisional Chiefs. In order to improve the management and operation of a Bank, it has been split up into a number of divisions. Each division of a Bank is placed under this supervision and control of Divisional Chief or Senior Executive Vice president (SEVP) or Executive Vice President (EVP). Provincial Chiefs. In order to improve the performance of the Banking system, each Bank has a PROVINCIAL Chief. The Provincial Chief has the powers for sanctioning finance and other credit facilities. The headquarters of the Chiefs are situated in each Province i.e. Lahore, Karachi, Peshawar and Quetta. Circle Executive. Bank has a number of circles. They are placed directly under the supervision and control of the Chief executive. The chief executive is usually SVP or VP. Zonal Heads. Each circle is divided into a number of zones. Zonal heads that holds the posts of VP or AVP administers these zones. Branch Managers. Each zone is divided into several branches. The control and supervision of each branch is mostly entrusted to AVP or Officer of Class II. A few big and financially sound branches are even administered by SVPS and VPS. It is important to be noted that the head Quarter of NATIONAL Bank of Pakistan is located in Karachi

5.

6.

7.

8.

Gomal University D.I.Khan

15

www.vu39.com/forum Organizational Chart of National Bank of Pakistan

CHAIRMAN CHAIRMAN

Board of Directors Board of Directors

Executive Committee Executive Committee

President President

Regional Headquarter Regional Headquarter

Regional Manager Regional Manager

Regions Regions Banking Deptt Banking Deptt. . BranchManagers Officer Managers Branch Officer

Cash Deptt. Cash Deptt. Officer Officer

Admn. Deptt. Admn. Deptt. Officer Officer

Finance Deptt. Finance Deptt. Officer Officer

Gomal University D.I.Khan

16

www.vu39.com/forum

Overseas Overseas Operation Operation Group Group Org Org Devel Devel &Training &Training Dept Dept

Operation Operation Group Group

Corporate Corporate Invest Invest Banking Banking Fin Group Fin Group Special Special Assets Assets Group Group

HRM HRM Dept. Dept.

Head Office Head Office Mgt Mgt Structure Structure

Strategic Strategic Plan && Econ Plan Econ Research Research Group Group

L.T L.T Planning Planning Dept. && Imp Dept. Imp Group Group Audit Audit &Inspection &Inspection Group Group Comercial Comercial && Retail Retail Banking Banking Group Group Risk Risk Mgt Mgt Group Group

Treasury Treasury Mgt Mgt Group Group

Gomal University D.I.Khan

17

www.vu39.com/forum

CHAPTER NO # 3

OBJECTIVE OF NATIONAL BANK OF PAKISTAN

Gomal University D.I.Khan

18

www.vu39.com/forum
Chapter # 3

OBJECTIVE OF NATIONAL BANK OF PAKISTAN
All the organization whether public or private which are involved in business carries the objective of profit earning and profit maximization. The objectives of an organization are the results it wants to achieve. It is important that the leaders of an organization clearly establish its objective and that the members of the organization agree upon these as desirable ends to achieved. In democratically oriented organizations the members are expected to help shape the objectives. National Bank of Pakistan is also a business organization and its Tijarat Ganj objectives are profit maximization. National Bank of Pakistan it profits in two ways. • To increase its deposits. • To charge mark up on loans provided to the people. Increased Deposits Now a day tough competition is faced in every field, and banking is not exempted form this category whether the bank is Pakistani or foreign, private are nationalized the competition is there. In this competition each and every bank tries to achieve the greatest possible amount of deposits. The tool used by the banks in order to increase their deposits, is to provide the bank mean and hence earning interest for them. In simple terms holding greater deposits result in greater income of the bank, and thus profit maximization occurs accounts the banks do not have to pay any interest to the customer hence the banks can save some money although some facilities are provided to the customer. Extension of Loans The profitability of the banks depends upon the amount of loan sanctioned or given to the people. The credits occurred depends greatly on one factor and that is the credit along with the interest payable should be secure, and that in turn depends, upon the people the bank is sanctioning loan. In the banking history we can observe a number of incidences where people were offered huge loans and they wrote off their loans by means of political influences. It is very

Gomal University D.I.Khan

19

www.vu39.com/forum
important for every bank to secure then loans and the interest as well. Now a day National Bank of Pakistan is very selective in sanctioning loans to the people. National Bank of Pakistan prefers to give loans of all types to reliable, reputed and secured parties. Mostly the loans provided by the banks constituted the major portions of the profit of the bank. The staff is trained and competent they carry out complete financial analysis of the companies for credit and for the purpose.
FUNCTIONS OF NATIONAL BANK OF PAKISTAN

National Bank of Pakistan is a commercial bank, so like other commercial banks it is engaged in financing internal trade and also in other ordinary banking business of receiving deposits, advancing loans and discounting bills of exchange. In Pakistan every bank performs functions according to its memorandum and article of association, so according to it the functions performed by National Bank of Pakistan are as: Accepting Deposits The most important function is to receive surplus money from the public. They throw their nets as wide as possible to collect surplus balances of individuals, firms and public institutions. In order to attract funds they have introduced various types of deposit schemes that may suit the needs and tastes of a large body of depositors. The Tijarat Ganj deposits schemes of National Bank of Pakistan are: • Current account • Saving account • Fixed deposit account. Advancing Loans Every bank has learnt by experience that depositors do not draw whole of their deposits at a time. They only draw a part of it for day to day transactions, therefore a bank keeps a part of the total deposits as “cash reserve” to meet the cash demand of depositors and advances the Tijarat Ganj part of deposits to businessmen on interest. They always Tijarat Ganj a reasonable ration between the tow parts to run its business.

Gomal University D.I.Khan

20

www.vu39.com/forum
National Bank of Pakistan advances loans to businessmen, traders, exporters, farmers etc. these loans are made against document of title to goods, marketable securities, personal security of the borrowers, mortgages etc. National Bank of Pakistan gives loans in following ways. • By opening a loan account • By means of overdraft • By discounting bills of exchange • By purchasing bond and securities Creation of The Medium of Exchange It is neither safe nor easy to make payment in the form of metallic coin or paper notes; therefore cheques make payments. Almost 90% of the financial transactions are made through cheques. National Bank of Pakistan collects and makes payment of cheques for its customers. Transfer Money National Bank of Pakistan provides facility to transfer from one place to another at very nominal charges. When a person wants to transfer his money from one place he handover money to the bank and gets a draft at the name of the particular branch were he needs the money and gets money at that place safely. Agency Service National Bank of Pakistan performs many services as an agent of its clients or depositors. It makes payment on order cheques receives amount of money on crossed cheques issued in favor of its clients and deposits the amount tin their accounts. It receives salaries and dividends of joint stock companies on behalf of clients and deposits them in their accounts. It purchases bonds and shares of joint stock companies for its clients under their consent. General Utility Services National Bank of Pakistan provides general utility services to its clients as well. It keeps their precious documents, gold ornaments,

Gomal University D.I.Khan

21

www.vu39.com/forum
bonds, and shares etc in safe custody in its locker. National Bank of Pakistan provides the services of clearing the utility bills i.e. electricity, gas and telephone bills of its customer and provide evening

banking service. It also advice its clients on investment direction, foreign trade and other business matters.

Gomal University D.I.Khan

22

www.vu39.com/forum

Chapter # 4

BANKING OPERATIONS

Gomal University D.I.Khan

23

www.vu39.com/forum
Chapter # 4

BANKING OPERATIONS
The Bank provides a wide range of facilities for transacting money in and outside the country. Being' custodian of the money, it manages the assets in such a way that the Bank Tijarat Ganj solve and liquid to a high degree so that it is able to meet the demand of the customers for cash payments. In the operation of a Bank, there is a close relation between the Banker and the customer. Bank and Customer Banker is a person, whether corporate or not who carries on the business of the banking. The customer is a person who has some sort of account either current or fixed or some similar relation with a banker. Banker and Customer Relation The relationship between Banker and customer is primarily that of debtor and creditor with the rules reserved where the customers are relying on a loan from the banker. Duties of A Banker 1. To honor a customers cheques. The Banker's duty is to honor the cheques of the customers. i. They are properly drawn. ii. The customers has balances to his credit. iii. The loan contract has been signed. iv. There is no legal bar attaching to the customers funds. 2. Standing orders:The Bank abides by the standing orders of the customers in making periodical payments on his behalf such as club, library and insurance perineum etc. Secrecy of the customers. Account: The Bank owes a contractual duty not to disclose the customers financial position with out his consent. Valuables for safe custody:The Bank takes care of the property deposited with it by the customers with or without charge. When a Bank does not charge, the Banker is called gratuitous bailey and when a specific charge is made, the Banker is then a paid bailey. Accounts of Customers A Bank should not open an account for a customer unless his integrity and responsibility is duly authenticated by a responsible person known to the Bank.

3.

4.

Gomal University D.I.Khan

24

www.vu39.com/forum
By opening of an account, the Banker usually gets the specimen signatures on cards. a. Authorities to sign an Account. If a customer desires that his agent also operate on his Account, the Bank should get a precise written mandate from his customer. The person to whom the authority has been delegated will continue operating the account till the authority is revoked in writing. Mental patients: If the Bank comes to know of a customers lunacy, the Bank will immediately suspend the OPERATIONS on the account until the court gives order or the Bank has full proof that his customer has fully recovered. When the customers is mentally unsound, the court appoints a receiver who operates the accounts under the direction of Master in Lunacy. Husband and wide account: If husband and wife both open an account it will be considered an ordinary joint account by the Bank. At the death of the husband, the widow is fully authorized to withdraw the balance. Infants:An infant can open an account with a Bank, but he is not allowed to overdraw the account. If the infant customer wishes to have an over draft, an adult should draw and sign on indemnity contract. Partners:When an account is opened by the partner they are to sign a mandate authorizing any or all of their member to make with drawls. The partners are jointly responsible for all the loans and other obligation incurred by the firm. Societies, Clubs etc:If an incorporate body opens an account in a Bank, the committee of management deputes certain of lice bearers to operate on the account. The bank obtains a copy of the resolution of the society or clubs appointing certain members to administrative funds. If there is any change in the committee of management, it is notified to the Bank immediately. The members of the society who are operating the account or not liable for any draft. Death of a customers:If a Bank receives the notice of a customers death, all operations on the account are suspended until the executors or administrators produce the

b.

c.

d.

e.

f.

g.

Gomal University D.I.Khan

25

www.vu39.com/forum
probate. All credits received after the notice of the death of customer are placed in a new account for disposal by the executor or administrator later.

CHEQUES
A cheque is a bill of exchange drawn on a Banker and payable on demand. According to Dr. Hard, "A cheque is an unconditional order in writing drawn on a Banker signed by the drawer, requiring the Banker to pay on demand a certain sum in money to or to the order of a specified person or to learner." Cheque is merely an order on a Bank by its clients to pay a sum of money to himself or to a third party on demand. There are three parties involve in a cheque: (i) The drawer. (ii) The drawee and (iii) The payee. The drawer is the person who signs the cheque. The party which is authorized to pay back the money is called drawer. The person to whom or to who’s or order the money is to be paid is called payee. A cheque in order to be valid must bear the signature of the drawer. It should be in writing preferable by means of a pen. KINDS OF CHEQUES There are three kinds of cheques : i. Bearer Cheque: ii. Order Cheque: and iii. Cross Cheque: (i) (ii) Bearer cheque: Bearer cheque is that which can be cashed from a Bank by any person who possesses the cheque and presents it at the counter. Order Cheque: If the word bearer is struck off from the cheque, it then becomes an order cheque. Order cheque is a safe form of payment because it can not be encashed unless it is ascertained by a Bank that it is paid to the right person. If cheque is drawn payable to the order of a specified person the Bank will make the payment only after the identification of the specified person. Cross Cheque: If the parallel lines are drawn across the face of the cheque and the words "& Co" are written between them, it becomes a crossed cheque. The payments made by the crossed cheque are the safest forms of payments because a cheque can only be deposited in the payee's account or it can be endorsed to somebody's else account by the payee. The crossed cheque can not be cashed when it is presented at the counter of the Banker.

(iii)

Gomal University D.I.Khan

26

www.vu39.com/forum
(I) DATE OF THE CHEQUE: (i) Undated cheque: If a cheque does not bear any date, the holder of the cheque can insert the date and cheque will quite valid. (ii) Post dated cheque: The post dated cheque is, infect, not a cheque because it is not payable on demand. It is equivalent to a bill of exchange, when the cheque is due for payment, the cheque will be honored by the Bank. If a Bank makes payment of post dated cheque before it falls due, the Bank would be liable to the drawer for the amount. (iii) Stale and Over due cheque: If a cheque is in circulation for an unreasonable period of time, the cheque is said to be stale or over due. Normally, if the cheque is presented six on seven months after the date, it is marked as "Stale" or "out of date". The out of date cheque requires the confirmation of the drawer. (iv) Alterations on a cheque: If the drawer is to make changes in the date or amount or in the name of the person then full signature must be obtained on all the material alterations made on the cheque. (v) Mutilated Cheque: If a cheque is torn in two or more than two-pieces and after pasting the pieces together is presented to the Bank for payment. the Bank would return it to the drawer marked, "Multitude Cheque". If the drawer confirms the mutilated cheque, the Bank's position is then quite safe. PAYMENT BY CHEQUE: (i) Conditional payment: A cheque or bill of exchange is not a legal tender money. A debtor, therefore, can not compel a creditor to accept the cheque or bill of exchange as a means of payment. When the cheque is honored and payment is made by the Bank, the date is then effectual discharged. (ii) Cheque through the post: If a cheque or other negotiable instrument is sent by post and is lost in transit and is presented and paid by the bank, the loss if any rests on the sender. However, if the creditor requests the debtor to send the cheque by post, than the risk is to be borne by the creditor. (iii) Cheques as evidence of payment: When the payee receives the amount written on the cheque from the Bank, it serves prima face as evidence of receipt. THE PAYING BANKER: 1. The obligation to pay: the paying Banker or the drawer Bank is under legal to honor his customer’s cheque provided:a. There is sufficient credit in the account of the customers to 27

2.

Gomal University D.I.Khan

www.vu39.com/forum
cover the amount written on the face of the cheque : b. The cheque are properly drawn: c. Are not stale or over due: and d. There is no legal prohibiting the Bank to make payment. 2. Time Allowed for Payment : When a cheque is presented over the counter, the following rules are usually observed: a. If a cheque is properly drawn and is complete in every respect it must ordinarily be said or dishonored at once. b. If a cheque is presented through a clearing House, then the rules of the Clearance House regarding time are to be observed. c. If the cheque of a customer is sent by another commercial Bank is to send the notification of payment or dishonor within 24 hours of the receipt of the cheque to the presenting Bank. d. If the holder of a cheque presents it through the post to the paying Banker the usual practice for drawer Bank is to send back the cheque instructing the holder to either present the cheque in person or the collection should be made through another Bank. Payment in Due Course: If a cheque is drawn in proper form and is paid by the paying Banker in good faith the Bank does not incur any liability. Protection of paying Banker: If the paying Banker makes payment of a cheque drawn on him with forged signature of the drawer, He will not be held responsible provided: a. The payment is made in good faith. b. The payment is made in the ordinary course of Business. Similarly, in case of crossed cheque, the drawer Bank is protected of the forged document only if a. The payment is made in good faith: b. In the ordinary course of Business: c. Without the negligence of the Banker and d. According to directions contained in crossing. Fraudulent Alteration of Amount: If a drawer draws the cheque in such a manner that it makes room for alternation of the amount, or hi signs a Blank cheque, and the Bank pays in good faith the amount which is fraudulently increased, the Bank will not be held responsible for the customers loss.

3. 4.

5.

Banker's Authority To Terminate The Payment Of Cheques:
1. Countermand of Payment: The drawer of a cheque can stop the payment of a cheque by informing the

Gomal University D.I.Khan

28

www.vu39.com/forum
Banker either on telephone or through a special message or in writing. The Banker will mark on the orders not to pay or payment countermanded by telegram payment postponed pending confirmation present again: If the cheque has been presented and cashed before the countermand is received in time, the Banker will stop the payment of the cheque even if he was about to pay. In all such cases, where the payment is stopped well in time, the operative signatures are cancelled and the cheque is returned with a marked "Cancelled in error, payment countermand." 2. Customer's Balance:The Banker can refuse to make the payment of a customer's cheque1 if his balance is not sufficient to cover the cheque. However, if the Bank has allowed the facility of overdraft, the Banker is bound to make the payment provided the amount is within the limit of the overdraft. Cheque is not an assignment of funds:A holder of a cheque can not ask the Banker to earmarl credit balance of the drawer in his favor. If the customer's balance is sufficient to cover the cheque, the payment will be made. The cheque will be dishonored if the Balance available for drawing the cheque is not sufficient. The holder of the cheque can not either have an equitable claim against the drawer Banker. Payment in due Course:The Banker will refuse to make the payment of a cheque if: i. It is not in accordance with the drawers instructions and ii. It is also presented after office hours or is not in the ordinary course of Business. Advising Fate By Telegram:If cheques are presented direct to the Banker or through the collecting Banker with a request to wire fate and the paying Banker's answer is in the affirmative then the Banker has to make the payment even if he receives the countermand of payment written or oral from the Customer. Marking Cheques:A drawer may get a particular cheque 'Marked' from his Banker. The Banker will retain the amount in order to honor the "marked" cheques. If' the other cheques issued by him are not covering his credit Balance, Bank will dishonor them for want of funds. Forgery of the Drawer's signatures:If the Banker is doubtful of the drawer's signature of in the alternation of

3.

4.

5.

6.

7.

Gomal University D.I.Khan

29

www.vu39.com/forum
amount the Bank can refuse to make the payment. 8. Notice of Customers Death:The Banker will terminate the payment of a cheque if he receives the notice of the customer death. Bankruptcy Petition:If the customer is unable to pay his debt i.e. he is insolvent, then he or his creditors present as petition to the court to take over the debtors, property for distribution among creditors. If the Bank receives a notice of t he refuse to honor the cheque forthwith. Making of a Receiving order:If the customer is satisfied that the customer appears to be insolvent, it will immediately issue a receiving order. The Bank will refuse to make payment on the advertisement of receiving order of its customer in the news paper or on direct intimation from the court. Trust Funds:If the Banker is satisfied that his customer by breach of trust is crediting the trust fund to his account, the Banker may refuse to pay the cheques. Garnishee Order:If the creditor of Banks customer gets a garnishee order from the court, the customer is not allowed to operate the account by the Bank. 13. Account Closed:If the drawer has closed his account, the Bank will dishonor the cheque presented to the Bank. Mutilated Cheques:If a cheque is mutilated, torn or cancelled, the Bank will refuse to debit the account of the customer. The payment on the torn cheque can, however, he made, if it is confirmed from the drawer or from the payees Banker. Difference in words and Figures:If the amount stated in words differ from the amount expressed in figures, the Bank will refer the cheque to the drawer remarking: amount in words and figures differs. Irregular Endorsement:If the endorsement on the cheque is irregular, the Bank will not make the payment on the cheque presented to it.

9.

10.

11.

12.

14.

15.

16.

Gomal University D.I.Khan

30

www.vu39.com/forum
17. Lost or Stolen Cheque:If a cheque is lost or stolen and the drawer informs the Bank well ii. time, the Bank will refuse to honor the cheque if presented after the receipt of the notice. Stop Cheque note:-

18.

19.

If a customer informs the Bank orally or verbally for stopping the payment of the particular cheque, the Bank will obey the instructions and will put "Stop Cheque Notice" in red ink in the account of the drawer. Receipt of Notice of Indemnity:If the Bank comes to know that a particular customer has become insane or is of unsound mind and the Bank is satisfied that hi customer is unable to act rationally, the authority of the Bank to act as agent will then cease. If the Bank receives the lunacy order from the court, the cheques will be returned with the remark "refer to drawer.

20.

Joint Account:If there is a joint account the Banker will get definite instructions as to how the account is to be operated upon whether all of them shall operate the account or delegate the authority to one. On the death of any party to a joint account, the balance rests in the surveyor or surveyors subject to an expressed authority on the contrary. Partnership Account:In case of a partnership firm, every partner can open an account in his name. But the Banker would not allow until and unless it is signed by all partners, giving the manner of operation. The death or retirement of a partner dissolves the partnership then the Bank should not allow any operation on such an account. Company Account:If the Company or a corporation wants to open an account with the Bank it would provide a copy of resolution passed by the Board of Directors appointing it as a Banker to the Company, naming the person or persons authorized to operate the account. If any authorized person draws a cheque on behalf of the company, then it would be dishonored.

21.

22.

ENDORSEMENT:
A cheque or a bill is endorsed when the transfer puts his signature on the back or an along of a cheque and a bill as a part of its negotiation. If the cheque is bearer, it needs no endorsement. However, in our country, the Banker insists on getting

Gomal University D.I.Khan

31

www.vu39.com/forum
the endorsement (signature) on the back of the cheque. If the holder of the cheque does not agree to put his signature, then he shall have to give a properly stamped receipt for the amount paid to him. If the cheque or bill is drawn payable to order, it requires the endorsement of the transferor, so that the payment is made in due course. REQUIREMENTS OF VALID ENDORSEMENT: The Tijarat Ganj requirements of endorsement to be effective are as follows; 1. The endorsement must be on the back or on an along of the cheque or bill. If the endorser simply put down his signature on the back of the cheque, the endorsement is valid. 2. Endorsement may be made in ink, print, pencil or with a rubber stamp. The Bank prefers the endorsement to be wholly in ink as it is not liable to obliteration as well as alteration. 3. The endorsement must be of the entire value of the Cheque and bill. Partial endorsement which may be in the name of one endorsee or more than one endorsees separately is not legally valid. 4. If the number of endorsees or payees is more than one on the bill then all the payees are the endorse unless one endorsee has the authority to endorse on behalf of other payees as it is generally in partnership. 5. Another important requisite of valid endorsement is that the endorsement must correspond with that of the drawing. For instance, if the name of the endorsee is misspells. The payee should also endorser the bill in the misspells version. However, the endorsee can at the proper signature, if he so desires. If the names of the payees are two or more than two, the endorsement should also be in the same order, which is penned down on the back of the bill.

CLASSIFICATION OF ENDORSEMENT
The main classification of endorsement are as follows: 1. Conditional Endorsement: If the endorsement makes the payment of a bill subject to the fulfillment of a condition or conditions, the endorsement is called conditional endorsement. The Bank or the payer can disregard the conditions and make the payment to the endorsee and the payment will be considered valid. Blank Endorsement: It the endorser signs his name on the bill but does not give the name of any other person to whom he wishes to transfer the cheque, the endorsement is called blank. When there is no endorsee specified on the bill, it becomes payable to bearer even though it may be originally drawn to order.

2.

Gomal University D.I.Khan

32

www.vu39.com/forum
3. Special Endorsement: An endorsement which specifies the name of the transferor for the payment of the bill is called special endorsement. Special endorsement is payable to order. Restrictive Endorsement: A restrictive endorsement is one which restricts or prohibits the further negotiation of the bill. For instance, pay to Hamid only signed by Rafique. Partial Endorsement:If the bill purports to be endorsed for a part of the amount payable, the endorsement is called partial endorsement is legally in effective.

4.

5.

Gomal University D.I.Khan

33

www.vu39.com/forum

Chapter # 5

DEPARTMENTS IN NATIONAL BANK OF PAKISTAN

Gomal University D.I.Khan

34

www.vu39.com/forum
Chapter # 5

DEPARTMENT IN NATIONAL BANK OF PAKISTAN
DEPOSITS DEPARTMENT
Deposit department is one of the most important and Tijarat Ganj department of the bank. It performs the vital function in the bank because it deals with the supply of money to the bank. Deposits are the inputs of a bank. Deposits department is just like a heat, as it function other department also run, otherwise the whole system paralysis. Each and every bank tries its best to increase their deposits. Deposits depict the financial strength of a bank. National Bank of Pakistan is a unique and crucial institution, which is able to increase credit in the country. • Current account. • Saving account • Fixed account

REMITTANCES DEPARTMENT
This department helps in the transfer of money from one place to another place and receives money of the people through these instruments and helps them in the clearance and verification and transfer of money from foreign or local banks. The bank charges a certain rate of commission on these instruments. • Demand draft. • Mail transfer. • Telephone transfer.

CLEARING DEPARTMENT
National Bank of Pakistan performs the function of paying and collection of cheques drawn on other bank by the customer of the bank with out charging fees. They perform this clearance function for the customers or others bank in their area because National Bank of Pakistan acts on the behalf of the State Bank of Pakistan.

Gomal University D.I.Khan

35

www.vu39.com/forum
Functions of the clearing dept in branch are: To arrange the payment of cheque drawn on the branch and give cheque for collection to any other branch have ABL or any other commercial banks. To collect amounts of cheques drawn on member of local clearinghouse sent for collection by National Bank of Pakistan branches.

• •

ADVANCES DEPARTMENT
The primary purpose of this department is to encourage small business to take loans and help them in their business. The bank earns from the advancement of loan to the people or organization and charges a certain percentage of interest on it and bank earns profits.

FOREIGN EXCHANGE DEPARTMENT
This department deals with foreign currency & accounts. This department does currency rats & exchange of money from foreign currency to local currency and vise versa.

FOREIGN CURRENCY ACCOUNTS
Foreign currency account in NBP can be open in 4 major currencies of the world i.e. US dollars $, Japanese yen, German mark DM & UK pound sterling. Only authorized branches of NBP can deal in foreign currency account. To open a foreign currency account of foreigners they have to submit a copy of their passport. When the customer will withdraw the money he will receive the profit in the same of foreign currency.

SELECTED PRODUCTS & PROCEDURES OF NBP
The management of NBP has launched certain products and services not only beneficial for the customers but also help a lot in promoting the good will and reputation of the Bank which are given below.

NBP CREDIT CARD
National Bank of Pakistan offers this facility to customer to use card money in place of cash money. NBP credit card is issued only to those customers who Have account with issuing branch or good business relation with NBP. NBP offer six types of credit card.
NBP VISA & MASTER CARD

It is valid only in Pakistan. It is accepted at more than 2000 outlets all over Pakistan. Hotels, restaurants, resort travel agents, shopping malls, retailer petrol pumps, hospitals & many more.

Gomal University D.I.Khan

36

www.vu39.com/forum
NBP GOLD/SILVER INTERNATIONAL

It offers all the benefits of Visa / Master card. Emergency replacement in case the card is being stolen; it can be replaced quickly & efficiently. The NBP Card bills you in US dollar for expense incurred abroad. NBP offer credit card facility in collaboration with bank of America. Over 12 million merchant’s globally in 170 countries accepts it.

How NBP Card Is Used
NBP has assigned credit card acceptance authority to domestic & international merchants. The merchants usually paste a sticker on the Tijarat Ganj entrance of their shop etc. on which it is written that NBP credit card is accepted here. So the customers make shopping & then show their credit card to merchants. He puts the card in a machine, which is linked with credit card division. Through this machine they check the limit of card. When the cardholder has made shopping he sing credit sales draft given by the merchant. It has four copies: • To merchants • For Cardholders • Bank • Headquarters Commission charge is 20% NBP credit card is valid only for 1 year; renewal is made after observing performance of cardholder. NBP charges Rs. 1250 annually for domestic use of Rs. 15000/- for the international.

NBP LOCAL TRAVELER CHEQUES
These are used only in Pakistan. NBP LTC are accepted at major shops, travel agents, hotels business establishment and NBP braches, one does not have to be an NBP account holder to buy the local travels cheques. Anybody can purchase them. These traveler cheques are available in Rs. 5000, 10000, 50000 and 10000.

Gomal University D.I.Khan

37

www.vu39.com/forum

Chapter # 6

PRINCIPLES OF ADVANCING MONEY

Gomal University D.I.Khan

38

www.vu39.com/forum
Chapter # 6

PRINCIPLES OF ADVANCING MONEY
Basically there are five principles which must be duly observed while advancing money to the borrowers i. Safety. ii. Liquidity. iii. Disposal. iv. Remuneration. v. Suitability. 1. Safety Banker's fund comprises Tijarat Ganjly of money borrowed from numerous customers on various accounts, such as current Account, Saving Bank Account, Call Deposit Account Special Notice Account and Term Deposit Account. It indicates whatever money the Bankers holds is that of his customers who have entrusted the Banner with it only because they have full confidence in the expert handling of money by their Banker. Therefore, the Baker must be very careful and ensure that his depositor's money is advanced to safe hands where the risk of loss does not exist. The elements of safety i.e. character, capacity and capital can help a Banker in arriving at a conclusion regarding the safety of advances allowed by him. a. Character It is the most important factor in determining the safety of advance, as there is no substitute character. A Borrowers character can indicate his intention to repay the advance. Since his honesty and integrity is of primary importance. If the post record of the borrower shows that his integrity has been questionable, the Banker should avoid him, especially when these securities offered by him are inadequate in covering the full amount of advance. The sobriety, the promptness of payment, good habits, personality, the ability and willingness to carryout a project through from beginning to end, and the reputation of the people with whom he deals, will go to make the character of a customer.

Gomal University D.I.Khan

39

www.vu39.com/forum
b. CAPACITY A businessman may not have vast financial resources, but with sound management abilities including the insight into a specific business, he may make his business very profitable. On the other hand if a person has no insight into the particular business for which he wants to borrow funds from the Banker, there are more chances of loss to the Banker. c. CAPITAL This is monetary base, because the money invested by the proprietors represent their faith in the business and its future. The role of commercial Bank is to provide short term capital for commerce and industry.

11.

LIQUIDITY Liquidity means the possibilities of recovering the advance in emergency, because all the money borrowed by the customer is repayable in lump sum on demand. Generally, the borrowers repay their loans steadily and thus released funds can be used to allow fresh loans to other borrowers. Nevertheless, the banker must ensure that the money lending is not blocked for an undue long time and that the borrowers are in such financial position so as to pay back all the amount outstanding against them on a short notice. In such a situation, it is very important for a banker to study the borrowers assets for liquidity. because he would prefer to lend only for a short period in order to meet the short falls in the working capital.

iii.

DISPOSAL As a principle, the disposal of the amount of advances should be broadly based so that a large number of borrowing customers may be benefited from the Banker's funds. The Banker must ensure that his funds are not invested in specific sector like textile industry, heavy engineering or agriculture etc. The Banker must give advances to a wide range of sectors like commerce, industry, farming agriculture concerns, small business, housing projects and various financial concerns in order of priorities. Disposal of advance is very necessary from point of security because it reduces the risk of non-recovery when some thing goes wrong in one particular sector or in one field. REMUNERATION The Banker needs sufficient earnings to see the followings: a. Profit payable to the money deposited with him. b. Salaries and fringe benefits payable to the staff members.
c. Overhead expense and depreciation and main of the fixed assets of the bank.

iv.

Gomal University D.I.Khan

40

www.vu39.com/forum
d. e. f. Adequate sum to meet possible losses. Provisions for a reserve fund to meet unforeseen contingencies. Payments of dividends to the shareholders.

A major portion of the bankers, earnings comes from the mark up charged on the money borrowers by the customers. The fixation of the rate of markup to be charged for advances of various classes depends on the type of security offered to him and also on the duration for which the advance is allowed. When the security offered is sound and easily encashable, the Banker may charge a lower rate of markup on an advance for a fixed period as compared to that of fluctuating over draft.

In order to meet his above mentioned expenses the Banker runs a great risk and he has to think twice that the money advance should not become bad or doubtful He should not lend his funds to a borrower with when remuneration may be much bit also equally risky. On the other hand Banker should prefer a borrower who is willing to offer a higher rate of markup on a comparatively lesser risk. v. SUITABILITY Here the word "Suitability" is not to be taken in its usual literary sense. It is used broader sense, which means that advance should be allowed not only to the suitable borrowers, but also in keeping with the overall national development plans chalk out by the authorized concerned. Before accommodating a borrower, a Banker should ensure that the lending is for the purpose in conformity with the current national credit policy laid down by the Central Bank of the country. Since the Bankers mainly provide short term working capital to commerce and industry. They should see that their lending solve borrowers financial problems. In doing so the Bankers should retain his primary status as commercial lender only.

PROCEDURE OF ADVANCE
Bank after allows the advances to its valuable customers against registered mortgage of immovable properties such as Factories Mills, etc. In such cases the advances are allowed on a long term basis and are meant to cover all types of Banking facilities outstanding against the part. Such mortgages are so draw tip that, irrespective of partial or total adjustment, so large as the limit remain enforced, the mortgage security continues for Bank benefits.

ADVANCES AGAINST REGISTERED MORTGAGE
TYPE OF MORTGAGES

Gomal University D.I.Khan

41

www.vu39.com/forum
There are two types of mortgages. i. Legal mortgage. ii Equitable mortgage. 1. LEGAL MORTGAGE a. Legal mortgage is obtained where the borrower is mortgaging his own property. b. Legal mortgage is obtained where a third party is mortgaging his property for advance to borrower. c. Legal mortgage is obtaining form a limited company whether private or public.

EXECUTION OF LEGAL MORTGAGE The deed of mortgage is signed by all owners of the property where the property belongs to a partnership firm, the mortgage deed is signed by all the partners of the firm. Where the property belongs to a limited company, the common seal of the company is affixed on the mortgage deed and one of two directors also sign the same. ii Equitable Mortgage. Equitable mortgage is created by title deeds and so an equitable mortgage can not be created by a person who does not possess title deeds to his property. Before accepting equitable mortgage special care is taken to ensure that all title deeds of the property are obtained and kept with he Bank. A memorandum of deposit is obtained form the mortgager. In obtaining this memorandum the special care must be taken the following points. a. The memoranda states “I have already deposited” use of past tense here is of utmost importance, otherwise the memorandum will require to be stamped and registered without which it will be invalid. By using the past tense, the memorandum will not require either to be stamped or registered. b. The equitable mortgage only be created at district head quarter towns. It is, therefore, important that the memorandum of deposit is addressed either to the Head Office or the Zonal Office. c. The memorandum, due to deposit, must be signed in accordance with the above instructions. For signing legal mortgages, it is, however, not necessary that memorandum of deposit be witnessed by witnesses.

Gomal University D.I.Khan

42

www.vu39.com/forum

Chapter # 7

DEPOSIT MANAGEMENT

Gomal University D.I.Khan

43

www.vu39.com/forum
Chapter # 7

DEPOSIT MANAGEMENT
The opening of account is the establishment of banker customer relationship. By opening an account at a bank a person become the customer’s of the bank. Following are the procedure of opening the accounts.

PROCEDURE: Opening of Account
1. Separate Account opening form is used. 2. All formalities of opening saving bank to observe. 3. In case of joint accounts. Unless provided to the contrary, it is presumed that account will be operated jointed, and accordingly all the account holders must sign the withdrawals form and present themselves at counts or counters. 4. All precaution for opening accounts of illiterate or semi-illiterate persons should be taken.

Pass Book
1. At the time of opening of the accounts, every account holders is provided with a special passbook, containing Rules and Regulation governing the operation of the accounts. 2. Under no circumstances, operation in the account is to be allowed with out production of the passbook. 3. Serial number of the passbook is issued is to be noted and authenticated both on the AOF and the ledger in the case provided for the serial number of chequebooks. 4. All the entries in the passbook are to be recorded in ink. 5. Entries in the passbook and the balance must be supervised by the officer Incharge the officer should also sign in full against the balance stuck in the column provided for the purpose in the passbook. And should invariably mention his power of attorney number after confirmation that the balance shown in the ledger and passbook are identical. 6. A-requisition slip provided at the end of the passbook is to use for the issue of a new passbook on the completion of the previous one. 7. This passbook, “being security stationary” is serially numbered for issue a passbook is issued. Register is to be Tijarat Ganjtained with following columns. (i) Date (ii) Passbook number. (iii) Name of the Account holder.

Gomal University D.I.Khan

44

www.vu39.com/forum
(iv) (v) (vi) Account number. Previous passbook number. Initials.

ISSUE OF FRESH OR DUPLICATE PASSBOOK
1. Fresh passbook is issued after the requisition slip, from the old passbook is filled in all available page in the old passbook have been fully utilized. 2. Before a using a fresh book officer should mark in the old passbook with rubber stamp, fresh passbook number issued on the first and the last page of the old passbook and such book number issued on the first and the last page of the old passbook and such stamp should be signed. In fully by the using officer. 3. The last balance is took carry forward in the fresh passbook authenticated by the officer Incharge after verify the balance brought forward is identical with the balance as shown in the ledger in the old pass book. 4. If a passbook is lost, the account holder is to be asked to inform by writing to the branch and a new passbook will be issued only after usual identity form number, which has been completed and signed by the account holder, and join identities. 5. If a passbook is lost or spoiled, a charge of not less than Rs. 5 shall made on account of issued of new passbook. 6. In case of loss of a passbook, instruction should immediately the noted on the ledger, so that necessary precautions may be taken against possible presentation of the old passes book. The procedure is the as for “stop payment” of check No. Transaction is allowed till such time that all the formalities of the issue duplicate passbook are complete. The lost passbook is recovered is the case may be. 7. In order to confirm all the transaction previous to the loss of the passbook. The balance is to be got confirmed by obtaining a balance. Confirmation from the account holder at the time of issue of a duplicate passbook. 8. In case the original passbook is found later by the account holder and is presented to the bank, the same is to be closed and marked by rubber.

Stamp
“Duplicate passbook no … issued” Such stamp should be signed in full by the officer Incharge and the passbook retained by the branch duly cancelled.

Gomal University D.I.Khan

45

www.vu39.com/forum
With Drawls
1. With drawls are allowed by means of with drawls forms and at the time of with drawls account holder must himself present at the counter along with the passbook.

2. The officer should see that with drawls and figures, signature of the account holder according to the specimen, before, the payment is made. 3. In order to verify that the account holder himself is present at the counter, his signature on the with drawls form should be obtained, by the officer, and his presence. 4. Signature of the account holder is to be verified and cancelled as done in case of cheques. 5. It is necessary to verify that the balance in the passbook and the ledger account tallies and that the interest has been made simultaneously in the ledger in passbook. 6. The balance in the passbook is to be authenticated by the officer after satisfying himself as to the above requirement by writing his power of attorney number below his signature on the passbook in the columns provide. 7. The withdrawls form and the passbook duly completed has given to the cashier who will check the entries and hand over passbook to the account holder at the time of payment. 8. With drawls as in saving account, are allowed twice a weak and four a total amount not exceeding Rs. 6,000/- weak. Fro large amounts, prior notice of 10 days is to be obtained as a special case with drawls my be allowed without prior notice the return / Profit for the notice is to be recorded.

INTRODUCTION AND PRELIMINARY INVESTIGATION
Before a banker opens a new account he should ascertain whether or not the person desirous of opening the account is a desirable customer. The banker should determine the prospective customer’s integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. Negligence in this informal preliminary investigation my result in serious consequences not only for the banker concerned directly but also for other bankers and the general public who may be affected indirectly. In order to further strengthen and streamline this process, the Federal Ombudsman of Pakistan, vide his ruling on complaint No. 11/31/5186 has directed the banks to retain with the account opening form a Photostat copy each of the National

Gomal University D.I.Khan

46

www.vu39.com/forum
identity cards of the person desiring to open an account as well as that of the introducer. As per these directions, the concerned Branch managers are required to obtain the original National identity cards along with their Photostat copies and then return the original after attesting the authenticity of the retained copy. This preliminary investigation is helpful because of the following reasons.

(i) Avoid Fraud If a banker does not make the necessary inquires mentioned above he may enable dishonest persons possess chequebooks for fraudulent purposes. If any such person happens to be an undercharge bankrupt. The banker might be placed in an awkward position for having allowed such a person to open and operate a bank account. (ii) Safeguard Against Unintended Overdraft Some time due to a mistake an account may be given an overdraft. For instance, the ledger-keeper, misreading the balance of the account honors a cheque for an amount larger than the balance. Similarly a credit entry belonging to a customer may be made a mistake in another customer’s account in such situation the excess amount withdrawn by the customer can only be realized if the customer is a respectable person. (iii) Negligence When a banker does not make the necessary investigation, he may be deprived of the statutory protection provided to a clearing banker under section 131 of the negotiable instruments act. 1881. This is because in such a case the banker will be deemed to a have acted negligently. (iv)Inquires About Clients A banker has a business obligation to respond to inquiries from other bank etc. about his customer’s financial position. Though the banker give only a general ideal about the financial standing of his customer’s he should nevertheless have the necessary information available with him.

SPECIMEN OF SIGNATURE
When an account is opened with a banker the customer gives the banker a specimen of the form of signature, which would appear on all this checks to express his authority for the payment of cheques drawn on his banker. This specimen is taken generally on a card specially designed for the purpose and rules for the customers. Full name and account number are entered on it.

Gomal University D.I.Khan

47

www.vu39.com/forum
If the banker has reasons to doubt the genuineness of a signature, he should either get it confirmed for his satisfaction or return the cheque with the remarks. If the signature of the customers forged the banker cannot escape his liability because he has not on his customer’s mandate.

Signature Other Than English
If a customer sings in a language other than English or Urdu, he is requested to fill a Vernacular Form. This type of indemnity whereby the customer relives the signatures by the bank and the cheque are paid. The Vernacular Form is obtained because the bank officer are not used to verification of signature other than English or Urdu. Hence there is likelihood of mis-verfication.

VARIOUS ACCOUNTS MAINTAINED BY THE NATIONAL BANK OF PAKISTAN
In modern time, very few business enterprises are carried out solely with the capital of the owners. Borrowing funds from different sources has become and essential feature of today’s business enterprises. But in the case of a bank, borrowing funds from the outside parties is all the more vital because the entire banking system is based on it. The borrowed capital of bank is much greater than theirs own capital. Bank’s borrowing is mostly in the form of deposits. These deposits are lent out to different parties. The larger the difference between the rate at which these deposits are borrowed and the rate at which they are lent out the greater will be the profit margin of the bank Furthermore. The larger the deposits the larger will be funds available for the employment; larger the funds lent out the greater will be the return earned on them; and greater the amount of return the greater will be the profits of the bank. It is because of this interrelated relationship that deposits are referred to as the “life blood” of the bank. To receive deposits is a basic function of all commercial banks. Commercial banks do not receive these deposits for safekeeping purpose only. But they accept deposits as debts. When a bank receives a deposit from a customer, the relationship of a debtor and a creditor is established whereby the customer becomes the creditors, and the bank a debtor. When the bank receives the amount of deposit as a debtor, it becomes the owner of it. It may therefore, use it. But there is an agreement that the amount owned would be paid back by the bank to the depositor on demand or after a specified time.

There Are Four Types of Deposit
There are four types of deposits that are 1. Current deposits. 2. Saving deposits.

Gomal University D.I.Khan

48

www.vu39.com/forum
3. 4. Term deposits (old name fixed deposits) PLS saving account.

1.

Current deposits.

These are payable to the customer whenever they are demanded. When a banker accepts a demand deposit, he incurs the obligation of all cheques etc. drawn against him to the extent of the balance in the account. Because of their nature, these deposits are treated as current liabilities of the bank. Bankers in Pakistan do not allow any profit on these deposit, and the customer are required to Tijarat Ganjtain a minimum balance, failing which incidental charges are deducted from such accounts. This because the depositor may with draw current deposit at any time and a bank is not entirely free to employ such deposit. A few years bank, the proportion of currency deposit in relation to fixed deposit was very small. In recent years, however, the position changed remarkably. Now the current deposit has become very important; but still the proportion of current deposit and fixed deposits varies from bank to bank, branch to branch and from time to time.

2.

Term Deposit (Old Name Of Fixed Deposit)

The deposits that can be withdrawn after a specified period of time are referred to a term or fixed deposit. The period for which these deposit are kept by the bank ordinarily varies from bank three months to five years accordance with the agreement made between the customer and the banker interest / return varies with the duration fro which the amount is kept with the banker. Ti was held that the banker continues to be a debtor even after expiry of the fixed time. Many depositors keep their money in term deposit with the bank as an investment because of the interest / return paid on them. Since term deposit Tijarat Ganj with the bank for a specified period, they can be profitably employed. By lending out or investing these funds, the bank earns more than the interest / return that it has to pay on them to the depositors. PAYMENT OF TERM DEPOSITS BEFORE MATURITY Some times depositor with draws the amount before the maturity. In such situation the customers forego the interest / return accrued on the deposit or borrows the required money again against the security of his fixed / term deposit at a rate of interest / service charge which is generally 2 percent higher than the rate allowed on the deposit.

Term or Fixed Deposits In Joint Names

Gomal University D.I.Khan

49

www.vu39.com/forum
Terms or fixed deposits may be in the names of two or more than two persons. The money deposit in the joint account is not paid to any individual unless the Tijarat Ganj partners authorize the person.

3.

Saving Deposit
Saving bank accounts generally opened in the name of individual illiterate person, Pardanasheen ladies, minor, worker and students. These accounts are not intendment for quick operation. If it’s found that any S.B. account is being operated on too frequently the parties may be asked to open current for their transactions. In Pakistan a saving account can be opened with a very small amount of money. And the depositor is issued a checkbook for withdrawals. Profit is paid at a flexible rate calculated on six monthly bases under the interest free banking system. There is no restriction on the withdrawals from the deposit accounts but the amount of money withdrawn is deleted form the amount to be taken for calculation products for assessment of profit to be paid to the account holder. It discourages unnecessary withdrawals from the deposits. In order to popularize this scheme the state bank of Pakistan has allowed the saving scheme for school and college students and industrial labor also. The purpose of this account is to inculcate the habit of saving in the constituents. As such the initial deposits required for opening these accounts is very nominal.

4.

PLS Saving Account
These accounts are more or less similar to saving accounts except that the depositor are entitled to share the profit earned on such accounts instead of any fixed interest rate allowed is saving accounts. Beside individual person, PLS Saving accounts are also opened in the name of provident funds, benevolent funds of the companies and welfare organization. A minimum balance of Rs. 100/- must be Tijarat Ganj tained in PLS Saving Accounts

CHEQUES
A cheque is a type of order which a depositor issue to draw some money from bank. It is used for both purpose, deposit and also for drawn. A cheque is an unconditional order in writing, drawn by customer on his bank, requesting to pay on demand a certain some of money, to a person named in the cheque, or to the bearer or to the order of a stated person. There are various types of cheque, but some of them are most important which are the following:-

Gomal University D.I.Khan

50

www.vu39.com/forum

Bearer Cheque
This type of cheque is that which can easily be chased with out any identification. A bearer cheque is one which the phrase “or bearer” is written after the name of the payee. It is payable to the bearer, holder or possessor i.e. any one who may present it at the bank. The bank is under no ascertain that the payment is made to the right person. 

Order Cheque
Order cheques is a cheque made payable to a certain person or order. It is a cheque on which the phase “or order” is written after the name of the payee. If cheques are made payable to a certain person without the addition of the word “Bearer” or “order” there to, it is regarded as an order cheque. It can be transferred only by endorsement and delivery. In this type of cheque the word order is written instead of bearer.

Crossed Cheque
In this two parallel lines are drawn on one end of the cheque. The word “and company” is written in this way “ & CO”. No one can draw money in shape of cash but first it is deposited in the account of that person or in the account of any other one and later on the cash is drawn by cheque. There are two types of cross cheque.

Crossed Cheque
“Where a cheque bears across its face and addition of the word’s and company or any abbreviation there of between two parallel transverse lines simply. Either with or without the word “ not negotiable” that addition shall be deemed to be crossing, and the cheque shall be deemed to be crossed generally” according to this definition the essentials of general crossing are: i. Two parallel transverse lines, drawn across the face of the cheque either with or without the words “ & CO” or any abbreviation is written between two parallel lines. ii. Two parallel transverse lines drawn across the face of the cheque either with or without the words (not negotiable) written in between them.

Special Crossing
Special crossing has been defined as “where a cheque bears across its face an addition of the name of banker either with or without the words “Not Negotiable” that addition shall be deemed a special crossing, and the cheque shall be deemed crossed specially and to be crossed to that banker.” It is evident from this definition that:

Gomal University D.I.Khan

51

www.vu39.com/forum
i. In case of a special the two parallel transverse lines are not essential. ii. The name of the banker the return across the face of the cheque is sufficient to constitute a special crossing. iii. After the cheque has been “crossed specially”, the holder cannot receive payment except through the banker name on the cheques . iv. If a cross is lost or stolen, there is no risk of wrong payment. 

A Post Dated Cheque
A post-dated cheque is a cheque, which bears the future date. A cheque writing in May but the date is written of June. It can be paid in June on date before, that date is a bill of exchange and not a cheque.

Antedated Cheques
An antedated cheque is one, which bears the date of past time. A cheque written in May, but the may be stated of April. The amount of cheque can be claimed within six month starting from April.

Stale Cheque
A stale cheque is that which was issued, six months back. The commercial bank honors the cheque with in six months from the date of issue. After the expiry of said period, the cheque is treated as stale. The drawer can claim the payment after its renewal.

Stolen Cheque
The drawer issues a stolen cheque, but it is lost. The cheque holder is not the actual payee, so it is treated as stolen cheque. The cheque can claim the amount of the banker is not informed in time.

Travelers Cheque
The bank issues travelers cheque for the convenience of the traveler’s and charges a nominal commission.  A blank cheque is merely singed by drawer but the amount column is left blank. The payee is allowed to write the amount himself at his own will.

Gomal University D.I.Khan

52

www.vu39.com/forum

Chapter # 8

REMITTANCES

Gomal University D.I.Khan

53

www.vu39.com/forum

Chapter # 8

REMITTANCES
Remittances mean “the transfer of money or fund from one place to another place through bank”. It may be “inland remittance” or “Remittance” Inland remittance may be classified as: 1. Within locality. 2. Out side locality.

1.

Within Locality

When a branch situated in D.I.Khan is required to send the draft to any other branch situated in the same locality, the process will say to be within locality. I.e. NBP Tijarat Ganj branch D.I.Khan, send any draft to NBP Tijarat Ganj branch, this is known as within locality.

(i)

Pay Order

Pay order is used for payment within the cities; the Tijarat Ganj purpose of pay order is to make payment in record this payment in the bank as evidence. Bank charge the commission for its services. The purchaser fill an application form, which includes the amount of payment or order, the name of the payee and complete address of purchaser and payee application form is also singed by the purchaser.

2.

Out Side Locality

Outside locality is an important type of inland remittances. Outside locality means the transfer of money payable outside the city i.e.NBP Tijarat Ganj branch D.I.Khan, sent any draft to a branch situated in Peshawar city. It is commonly done through the following three means. (i) (ii) (iii) Telegraphic transfer (T.T) Mail transfer (M.T) Bank Draft.

Issuance of Draft
When a person require a bank draft, he should be asked to fill the application form in which he states the amount/money to be transferred, the name of payee and place of payment. After depositing cash and relevant fee, bank issue the bank draft and hand over to the concern person.

Gomal University D.I.Khan

54

www.vu39.com/forum

Bank draft is usually issued is cross demand draft on which “the payee account only” is written. The payee will draw the amount by presenting the draft to the bank.

Lost Draft/Duplicate Draft
Bank issue the duplicate draft when the original draft had been lost, till the purchaser of draft informed the issuing branch of the bank, that draft has been lost, the issuing branch of the bank will immediately informed to the drawer branch about the lost branch. The branch will stop the payment of that draft. At the end in the place of lost draft the issuing branch of the bank will issue the duplicate draft.

Cancellation of Lost Draft
If the purchaser of draft to cancel the draft then he is required to submit the original issued draft. After the cancellation of draft the bank pay the cash or credit the purchaser account as purchaser desires. The bank charges a nominal fee for this service or act. Bank also informs the drawer branch about the cancellation of the draft.

1.

Telegraphic Transfer

Telegraphic transfer is an important mode of remittance. It is the quickest mean of transferring the funds from one place to another place by the use of telephone or telegraphic. Now a day, new technology is used for this purpose i.e. fax, e-mail. The big traders and businessman use this method of remittance in this method of remittance the purchaser is not responsible for the dispatch.

HOW ONE CAN APPLY
The purchaser fills an application form and which he mentioned the sum of (T.T) name of payee, accounts number of payee and place of payment etc. The purchaser signs the application form and the bank charge the commission for this purpose.

2.

MAIL TRANSFER

Mail transfer draft is one of the bank modes of remittance. Mail transfer is issued by one branch of bank to another branch of the same bank by

Gomal University D.I.Khan

55

www.vu39.com/forum
instructing to branch to pay the other branch by issuing mail transfer receipts.

In M.T the purchaser is not responsible for dispatch, but the bank will be responsible for dispatch.

(i)

How To Apply
The purchaser fills application forms, which includes the amount of M.T name of payee, account number of payee, name of the bank branch. Place of payment and signature of purchaser. Bank charges the commission for this service.

3. BANK DRAFT
Bank draft is the most important type of remittance. Draft is an instrument issued by a bank. Draft is issued by one branch to another branch out of the city. The difference branches of same bank can issue the bank draft to each other and it is also called the banker cheques i.e. the Tijarat Ganj Branch of NBP in D.I.Khan issued the draft to the NBP Peshawar.

Gomal University D.I.Khan

56

www.vu39.com/forum

Chapter # 9

CRITICAL ANALYSIS OF NBP

Gomal University D.I.Khan

57

www.vu39.com/forum
Chapter # 9

CRITICAL ANALYSIS OF NBP
During my Six Months internship at the National Bank of Pakistan Tijarat Ganj Branch D.I.Khan, my observation and interviewing the staff members and the manager of the branch the information that I got is not sufficient as of such a big organization. I have pointed out some of the shortcomings, which I observed during my internship. Now the government is serious to bring some reforms in the NBPs for privatization. And National Bank of Pakistan management is working on the restructuring program. The shortcomings, which are present in the Tijarat Ganj branch of, D.I.Khan, may or may not present in the other branches.

Problem at the Branch Level Communication Problem
Bank staff uses peon and the clerical staff to communicate with each other. It automatically creates a lot of problem and disturbance in the branch. The flow of communication is very slow and creates gap between various counters and branch departments. And the peon does verification of any sign or balance, which is not a skilled person and time consuming.

Limited Staff
In the branch the staff is limited and the customers wait for a long time National Bank of Pakistan also deals with most of the government affairs, federal and provincial pensions salaries and taxes. Handling these people are very difficult and at the beginning of the month large no of customer wait for their turn. But the staff is low to handle such large no of customers.

Non-Availability of Computer Expert
In the modern era of computer the usefulness of computer is ignored it increases the efficiency and all the work is done manually. There is lack of properly trained staff to operate the computer properly.

No Ladies Section
There is no ladies section in the bank, as a banking facility for ladies, catering to hijab needs of the ladies customers.

Gomal University D.I.Khan

58

www.vu39.com/forum
Customers Satisfaction
In National Bank of Pakistan customer dealing is not so much good during the hours of rush the customers have to wait for their turn. The staff is not able to handle large no of customers. This creates a lot of tension and dissatisfaction in the mind of the customer and the staff and there is a chance of error, which might be very harmful. The bank should provide more satisfaction to its customer.

Proper Record Management
The record which are kept for the future use of the bank is not properly managed the record of the bank is not kept properly in any kind of order chronological or serial etc. if any record is needed the staff has to struggle to find the record and waste a lot of time.

Unequal Distribution of Workload
Distribution of workload is not properly managed. Some of the employees are setting ideal all the day without having work and on the other hand some don’t find time to relax for a, moment. So this creates a lot of over work situation for some while relaxation for others.

FUNCTIONAL ANALYSIS
Difference Between Theory and Practice A vast difference exists between theory and practice in the National Bank of Pakistan the written procedure is somewhat different from the practice that is done by employees Excessive Paper Work It is notified that due to lengthy procedure of paper work at bank employees are over burdened. They are unable to give proper attention to the clients and face difficulty in getting the work done one of the reasons for lengthy procedures an excessive paper work in the bank is the lack of computerization and lack of skilled and educated staff. More Accounts Deposits Efficient banking is one in which emphasis is not on number of accounts but on greater amounts of deposits National Bank of Pakistan is more interested in increasing its number of accounts irrespective of deposits. It is difficult to main and provide personalized services to the entire accounts holder.

Gomal University D.I.Khan

59

www.vu39.com/forum
Delegation of Authority Manger has a very limited authority. He has to take the approval from his senior authorities in cased of advances he has to take the approval of general manger and regional manager.

ADMINISTRATIVE ANALYSIS
Job Analysis Is Not Effective Only on the basis of job analysis it can be decided how a right person could be hired. Trained, compensated or promoted. It is very important for an organization in which nature of the job is described and job specification is mentioned. Most of the employees are simple graduates and don’t have proper know how about their hob. This creates problems both of organization and for employees. Persons performing simple or complex responsibility are getting the same salary and facilities. This creates dissatisfaction among the employees. CARELESSNESS IN OPENING OF ACCOUNT When customers come to open an account, the staff does not bother to check his/her phone number or address. Phone number and permanent address is very necessary because any thing can happen. They should be careful in this respect. Lack of Specialized Training National Bank of Pakistan does not provided adequate facility of specialized training to its staff. Training is provided on the basis of generalization rather than specialization. As the worker finishes his training he is inducted into a specified field. Since he does not have knowledge about the specified job assigned to him thus he feels difficulty in perform his job. Poor Job Rotation There is absence of job rotation in Tijarat Ganj branch. A person places in one department remain there forever. It reduces the career opportunities to the workers as well as results in boredom and will not take interest in work. Job rotation is very important for employees especially for those how re newly recruited. The newly recruited should be rated in all the department of the bank in order to get familiar with working of different department. So that when the gets a responsible position he should have know how of the whole system. Delays in Loan Advancement It has been observed that there are delays in sanctioning of cases from the head office that result in to customer dissatisfaction.

Lack of Appreciation
Another very important thing, which is ignored in the bank, is appreciation of the employees in their good performance of staff members is not recognized and

Gomal University D.I.Khan

60

www.vu39.com/forum
appreciated, it makes the person dishearten and he losses his interest in work which result in poor efficiency.

Heavy Workload The workload on the employees of National Bank of Pakistan is very heavy. It is usual practice for the employees to stay beyond the official working hours.

PERSONAL MANAGEMENT ANALYSIS
Need For Better Training Programme The need of training is felt all over the world. Training of the personnel is a part of human resource management. It has been noticed that the training programme of National Bank of Pakistan is not adequate. Once a candidate has been selected and placed on the respective job, it becomes essential to train him adequately for the task. They should lean new methods for motivation customer. The training programme of the bank should include scientific techniques to improve the decision-making and inter personal as well as individual need of the employees. Developing Managerial Leadership Leadership is a practical term of visible, clear on objectives and communicating better control on financial and administrative matter, so the manger is not only responsible for their own units in business, but also in people terms i.e. training recruiting, grievance handling taking a immediate initiative in crisis situation have to take major decision affecting the future of the bank and banking community. Recruitment Policy Human resources are the lifeblood organization. If the person is recruited carefully they can become assets to the organization and in the case of carelessness the personnel can become a liability. As National Bank of Pakistan is government bank they don’t follow the recruitment policy political interruption is very high and unsuitable candidates are selected. Promotion Promotion in the National Bank of Pakistan is purely on the seniority, so the new young person having high qualification are not having any chance to promotion. The promotion process is very slow time the top management or the staff union put pressure for the promotion of their favorites, which give a sense of deprivation to the deserving employees and their efficiency is affected.

Gomal University D.I.Khan

61

www.vu39.com/forum

RECOMMENDATION
 During my internship of Six Months at the Tijarat Ganj branch D.I.Khan. I observed a lot of things and there is always a better way of doing things. Some of the recommendation suggested for the Tijarat Ganj branch of D.I.Khan, and National Bank of Pakistan as whole are as follows.  Required staff should be provided to branch in order to improve the functioning of the branch to reduce the workload on the staff members.  Computer should be introduced in all the branches and department of the bank. This will reduce administrative cost to great extant. Branch should be connected through computers with Zonal/regional office and headquarter. This will help a lot in the operation of the bank computer knowledge should imparted to the employees. Communication and coordination problem will be solved to greater extent.  Recruitment in the bank should be made purely on merit basis, and the human resources development should be fully free from any influence of higher authority and staff union in conduction of test and in the selection of candidates.  There should be inter department transfer of employees, so that they should know about all departments, in this way a proper coordination could be achieved. They must have some basic information of other departments. There must be proper job rotation.  The training programme of National Bank of Pakistan is not adequate. Special marketing training should be given to employees who are concerned with marketing. The training programme should include scientific techniques to improve decision making and interpersonal as well as individual needs of the employees  Constant improvement in customer’s service is needed in today competitive environment. Personalized banking should be introduced to attract more customer and more facilities. Equal respect should be given to all the customers.  Remittance is a basic function and a Tijarat Ganj source of income of the bank. Unfortunately there is an increasing shift the use of informal means like Hundi. National Bank of Pakistan has to play a vital role in mobilizing such remittances.

Gomal University D.I.Khan

62

www.vu39.com/forum
The banks foreign branches have to become more competitive and service oriented.

 The top management should delegate some of the responsibilities to the lower and middle management. So that to increase the performance and working efficiency of the bank.  Promotion is a very sensitive and important issue and thus great care should be observed in the decision of promotion. Personal liking and disliking and outside pressure should be reduced and fare promotion policy should be adopted. Promotion should give high preference to the highly qualified personnel. This will lead as a key for the other staff members to improve their qualification and thus got quick promotions. This will improve the quality of the staff members.  No ingle individual should be allowed to influence the decision of the management. The management should be given free hand to handle the affairs of the bank.  The bank should send employees for training and seminars arrange be other banks so that they can compare the procedures adopted by other bank and adopted whatever better and new.

Gomal University D.I.Khan

63

www.vu39.com/forum

CONCLUSION
National Bank of Pakistan was established as a semi public commercial bank on November 8,1949. The primary objective of the setting of the bank was to purchase jute form the growers in the former East Pakistan in the country. The bank provides all types of banking services to the government and private sectors. The overseas branches under a trust deed the bank also provides services as trustee to national investment trust including sage custody of securities on behalf of nit in consideration for annual service charge and commission. National Bank of Pakistan is placing high priority on automation and it development. The bank is shifting its focus from routine personnel administration to human resources development, with due emphasis being placed on the optional utilization of existing human resources. Motivating pay structures and performance based on incentives were also introduced enhance the productivity of employees. Additionally, objective appraisal system is being instituted to facilities transparent ratings / promotion. National Bank of Pakistan is working on the restructuring programme to make the bank more attractive with the eventual aim of privatization as the largest bank in the country with a customer bade of 8.5 million. The key components of the restructuring programmers are reduction-operating cost; increased in earnings, decrease in non-performing loans, effective use of information technology. National Bank of Pakistan brought a great revolution on our banking system by introducing new products, adopting all he new methods and technologies requited for an international bank. National Bank of Pakistan is desired to play a vital role in the development of Pakistan in the 21st century. Its management and workers must accept the competition and challenge of the new millennium through innovative policies products and untiring application.

Gomal University D.I.Khan

64

www.vu39.com/forum BIBLIOGRAPHY
 Vash Mc. (1993). “Money Banking and International Trade” 8th edition, New York. Willy Eastern ltd.  Siddiqui, Asrar H. (1983). “Practice of Law & banking in Pakistan” 3 rd Edition, Karachi Royal Books company.  National Bank of Pakistan “NBP Annual Report 2000” National Institute of Banking and finance.  Flippo, Edwin B. (1976). “Principle of Personnel Management” 1st edition, Tokyo.  Gardner, Dc. (1991). “Banking and Money market” 1st edition, London. Dc Gardner Group Plc.  Meigs, Walter B. (1986). “Financial Accounting” 11th edition, New York. Mc Graw Hill Inc.  National Bank of Pakistan. (1999). “National Bank of Pakistan year book” National Institute of Banking and finance.  Tannan, M.L. (1993). “Banking law and practice in Pakistan” Masroor Book house.

Gomal University D.I.Khan

65

www.vu39.com/forum

Gomal University D.I.Khan

66

Sign up to vote on this title
UsefulNot useful