Internship Report on National Bank of Pakistan

Main Branch Abbottabad

(0301)

Submitted by: Raza Zulfiqar

Roll#: 873

Supervised by: Abdul Waheed

Government Postgraduate College of Management Sciences

Abbottabad
Session 2013-2015

Internship Report on National Bank of Pakistan

Main Branch Abbottabad
(0301)

Submitted by: Raza Zulfiqar

Roll#: 873

Supervised by: Abdul Waheed

This internship report is submitted in partial

fulfillment of the requirements for the degree of
Master of Commerce awarded by the Hazara
University

Government

Postgraduate College
of Management Sciences
Abbottabad

Session 2013-2015

Government Postgraduate College of Management Sciences

Abbottabad

Approval Sheet
Approval Committee

1. External Examiner
Mr. _____________________________________________ Signature_______________

2. Supervisor
Abdul Waheed

Signature_______________

Designation: Lecturer Commerce

3. Head of Department
Mr.Mushtaq Ahmed
Designation: Associate Professor

Signature _______________

ABSTRACT
For the economic growth and sustainability of country financial institutions play a very
important and vital role. The bank circulates and deals in money. Such institution are also
required to fulfill other financial needs such as provision of place to deposit money, serving
for the utilities and also advancing money in order to facilitate the need s of house holders
and the businesses. Banking has always been the main field of interest for most of the
business. In this report the financial position of NBP and its main branch, Abbottabad has
been thoroughly studied and analyzed.
The methodology that was used was available resources by the organization, like website,
annual reports, publicly available data, etc. Also, interviews with some employees and
observation methods were used. The data collection was an exhaustive process and all
secondary resources were used like, Internet, Books, Reports, Articles etc were used. In the
first chapter introduction to the report, background of study, scope of the study, merits,
limitation and scheme of the study are given.
The report covers the history of NBP bank, introduction to the organization, its background,
role and functions of organization, its core values, and miscellaneous topics related to
Finance department of NBP Bank. Finally it is concluded that the bank is functioning in a
proper & systematic manner, but need more competitive strategies, long term debts, &
outside creditors, creditors should provide the funds to meet the SBP policies to have the
maximum branches.
The report covers general information on the areas in which NBP is working. This report also
covers the analysis portion with the help of which we come to know that where the NBP is
strong and where it need s to be strong. NBP offers new products and services day by day for
improving its performance, but there are lots of hurdles in the way of success of NBP, all the
recommendations are given in the report and there solutions as well that can be helpful in the
success of NBP in future.

DEDICATION
I would like to thank my lovely parents for giving me this opportunity to attend this degree
and supporting me in all my Student life. They acted as a backbone and a
major reason behind my accomplishment of this degree. I dedicated this
project to

my ever-loving parents, Teachers and my dearest friends

TABLE OF CONTENTS
CHAPTER 1

Page #

INTERDUCTION TO REPORT

01

1.1 Background of Study

01

1.2 Objective of study

02

1.3 Scope of Study

02

1.4 Other area of NBPs operation

02

1.5 Limitation of the study

02

1.6 Merits of the study

02

1.7 Research Methodology

03

1.7.1 Primary data

03

1.7.2 Secondary data

03

1.8 Scheme of Report

03

CHAPTER 2
INTRODUCTIOION TO ORGANIZATION (NBP)

05

2.1 Evaluation of Banking / Industry in World

05

2.1.1 Evaluation of Banking / Industry in Pakistan

06

2.2 Historical introduction of organization (National Bank of Pakistan)

07

2.2.1 History

07

2.2.2 Present Status

09

2.2.3 Credit Ratings

10

2.2.4 Auditors

10

2.3 Organizational Structure

11

2.4 Mission statement

12

2.5 Vision statement

13

2.6 Objectives

13

2.7 Core Values

13

2.8 Corporate Profile

14

2.9 Executive Committee

14

2.10 Organizational Structure of NBP Abbottabad Main Branch

16

2.10.1 Location

16

2.10.2 Number of Employees

16

CHAPTER 3
Product and Services offered by NBP

17

3.1 Business overview

17

3.1.1 Corporate and investment Banking

17

3.1.1.1 Operations

17

3.1.1.2 Working capital and short term loans

17

3.1.1.3 Medium term loans and capital expenditures financing

17

3.1.1.4 Retail banking

18

3.1.1.5 Treasury / international Banking

18

3.1.2 Commercial banking

18

3.1.3 SME finance

19

3.1.4 House finance

19

3.2 Department in national bank of Pakistan

19

3.2.1 Deposits department

3.2.1.1 Payment of cheque at counter

20
20

3.2.2 Remittances department

21

3.2.3 Clearing department

21

3.2.3.1 Procedure for Clearing the Cheque

21

3.2.3.1.1 Pay-in slip

21

3.2.3.1.2 Stamping and scrutinizing

21

3.2.4 Advances department

22

3.2.5 Foreign exchange department

22

3.3 Products offered by NBP

22

3.4 Services offered by NBP

22

3.4.1 Demand drafts

23

3.4.2 Swift system

23

3.4.3 Letters of credit

23

3.4.4 Traveler's cheque

23

3.4.5 Pay order

23

3.4.6 Mail transfers

24

3.4.7 Foreign Remittances

24

3.4.7.1 New features

24

3.4.8 Short term investments

24

3.5 NBP is involved in the following

24

3.5.1 Commercial finance

25

3.5.2 Trade finance other business loans

25

3.5.2.1 Agricultural finance

25

3.5.2.1.1 Agricultural Finance Services

25

3.5.2.1.2 Agricultural credit

25

3.5.2.1.3 Agricultural credit (medium term)

25

3.5.2.1.4 Firm credit

26

3.5.2.1.5 Production loans

26

3.5.2.2 Corporate finance

26

3.5.2.2.1 Working capital and short term loans

26

3.5.2.2.2 Medium loans and capital expenditure financing

26

3.6 International banking

27

3.7 Islamic banking

27

CHAPTER 4
FINANCIAL ANALYSIS

27

4.1 Financial statement analysis

27

4.2 The financial data of NBP is analyzed in the following two ways

27

4.2.1 Financial Analysis (Horizontal & Vertical)

27

4.2.2 Financial ratio analysis

29

4.3 Competitive analysis

30

4.3.1 Porters five forces model

30

CHAPTER NO 5
CONCLUSIONS AND RECOMMENDATION

35

5.1 Financial Sector Problem and Recommendation

33

5.2 Over all recommendations and suggestions

35

References

47

ACKNOWLEDGEMENTS
Allah Almighty is worthy of all acknowledgments, whose grace has no limits and who gave
me the strength and will to complete this report.
I have no words to express my heartiest sense of gratitude to my supervisor,
Abdul Waheed, for his supervision, contribution, intellectual guidance, constructive
suggestion, valuable time, patience and wise comments to make this report possible.
I highly appreciate the help and cooperation of the Ishfaq Hussain Shah operations manager
of NBP Bank main Abbottabad for their support and collaboration.
I am very greatful to Miss Tahera Farman(OG-II) who was very supportive and helpful to me
during my internship period at NBP main branch.
I also acknowledge the help of all government departments and public in collecting
information / documents / data for this report.
I wish to express my deepest and sincere appreciation to all my friends including and for their
help, cooperation, and moral support.
The last but not least, I would feel incomplete without thanking to my parents who always
pray for my brilliant success and bright future.

Raza Zulfiqar

LIST OF ABBREVIATIONS
AVP

Assistant Vice President

MBA

Master of Business Administration

BOD

Board of Directors

D.D

Demand Draft

EBIT

Earning Before Income Tax

EPS

Earning per share

EVP

Executive vice president

I.T

Information technology

L/C

letter of credit

M/T

Mail Transfer

MIS

Management Information system

PLS

Profit and loss saving

SBP

State bank of Pakistan

SEVP

Senior executive vice president

SVP

Senior vice president

SWIFT

society for worldwide interbank financial telecommunication

SS

Specimen signature

VP

Vice president

EXECUTIVE SUMMARY
National bank of Pakistan was incorporated in Pakistan and is engaged in commercial
banking and related services. It is serving the nation as one of the leading Banks in Pakistan.
The bank is listed on all the stock exchanges in Pakistan, in accordance with the directives of
the federal government regarding the shifting of the banking system to Islamic modes; the
State Bank of Pakistan has issued various circulars from time to time. The national bank of
Pakistan provides quality financial services in the country with profitability and responsibility
and to be the best place to work. With a network of around 1289 branches and a team of
dedicated professionals, the NBP is the largest public sector bank.
I was honored to work in NBP main branch Abbottabad, where I found the staff very
cooperative in many respects. I did my internship in a few departments of the branch. I
worked in the Account Opening Section in First week, under the supervision of Mrs Naveeda,
where I learned the methodology of opening of accounts which is said to be as a contractual
relationship between bank and customer, and about precautionary measures that are relevant
to opening of an account. Moreover I got the idea that how these accounts are maintained.
What should be prerequisites of opening of account etc.
Then for the next two weeks I worked in the remittances department under the guidance of
Mrs. Naveeda, where I got the opportunity to get familiar with different kinds of remittances,
the bank deal in which are the Demand draft, Telegraph Transfer, Mail Transfer, Issuance of
Rupees Travelers Cheque, Posting of vouchers. I was given certain projects which I
accomplished successfully.
Then I went to the Clearing Department where I worked for one week under the direction of
Mr. Riaz, and learned about the clearing and collection functions of the banking sector. That
how Cheque of other banks are sent for clearing, which perform this function etc. The
Remaining part of my internship I spent with Mr. Aurangzaib and Miss Tahira Farman in the
Advances/Credit department, where I learned how the credit proposal is being made, how the
loans are being approved and recovered.