Sami Internship Report To Be Final Kept As The Memory

Internship Report on National Bank of Pakistan
Introduction of the National Bank of Pakistan

National Bank of Pakistan is one of the largest commercial bank operating in
Pakistan. It has redefined its role and has moved from a public sector organization
into a modern commercial bank. The Bank's services are available to individuals,
corporate entities and government. While it continues to act as trustee of public funds
and as the agent to the State Bank of Pakistan (in places where SBP does not have
presence). It has diversified its business portfolio and is today a major lead player in
the debt equity market, corporate investment banking, retail and consumer banking,
agricultural financing, treasury services and is showing growing interest in promoting
and developing the country's small and medium enterprises and at the same time
fulfilling its social responsibilities, as a corporate citizen.
In today's competitive business environment, NBP needed to redefine its role and
shed the public sector bank image, for a modern commercial bank. It has offloaded
23.2 percent share in the stock market, and while it has not been completely privatized
like the other three public sector banks, partial privatization has taken place. It is now
listed on the Karachi/Islamabad/Lahore Stock Exchanges.
The bank has implemented special credit schemes like small finance for agriculture,
business and industries, administrator to Qarz-e-Hasna loans to students, self-
employment scheme for unemployed persons, public transport scheme. The Bank has
expanded its range of products and services to include Shariah Compliant Islamic
Banking products. For the promotion of literature, NBP recently initiated the Annual
Awards for Excellence in Literature. NBP will confer annual awards to the best books
in Urdu and in all prominent regional languages published during the defined period.
Patronage from NBP would help creative work in the field of literature. The Bank is
also the largest sponsor of sports in Pakistan. It has provided generously to
philanthropic causes whenever the need arose.
The bank has taken various measures to facilitate overseas Pakistanis to send their
remittances in a convenient and efficient manner. In 2002 the Bank signed an
agreement with Western Union for expanding the base for documented remittances.
M.com Evening A Session (2010-2012) Page 1

More recently it has started Electronic Home Remittances Project. This project
introduces technology based system to handle inward remittances efficiently, by
ensuring that the Bank's branches keep a track of the remittance received from abroad
till its final receipt. Bank has been signing different agreements with other leading
players in the remittance field for ensuring that remittance services are available to
most of the overseas Pakistanis.
A number of initiatives have been taken, in terms of institutional restructuring,
changes in the field structure, in policies and procedures, in internal control systems
with special emphasis on corporate governance, adoption of Capital Adequacy
Standards under Basel II framework, in the up-gradation of the IT infrastructure and
developing the human resources.
National Bank of Pakistan has built an extensive branch network with over 1282
branches in Pakistan and operates in major business Centre abroad. The domestic
branch network has been automated and is online. The Bank has representative offices
in Beijing, Tashkent, Chicago and Toronto. It has agency arrangements with more
than 3000 correspondent banks worldwide. Its subsidiaries are Taurus Securities Ltd,
NBP Exchange Company Ltd, NBP Capital Ltd, NBP Modaraba Management
Company Ltd, and CJSC Bank, Almaty, Kazakhstan. It has recently opened a
subsidiary in Dushanbe, Tajikistan.
The Bank's joint ventures are, United National Bank (UK), First Investment Bank and
NAFA, an Asset Management Company (a joint venture with NIB Bank & Fullerton
Fund Management of Singapore).
Objective of study
National Bank of Pakistan is today a progressive, efficient, and customer focused
institution. It has developed a wide range of consumer products, to enhance business
and cater to the different segments of society. Some schemes have been specifically
designed for the low to middle income segments of the population. These include
NBP Advance Salary, NBP Saiban, NBP Kisan Dost, NBP Cash n Gold. The National
Bank is completely owned by the Government of Pakistan.
Government institutions play very important role in the progress of every country. So
my objective was to enhance my knowledge and understanding about the banking
sector. After doing M.com in finance i was very excited for the internship in the bank
especially. All praise for the ALLAH, Who provide me this opportunity and now i am

much familiar with the operations performed in the bank. I am much obliged to the
Commerce Department of Islamia University of Bahawalpur.
Vision of National Bank of Pakistan
 To be recognized as a leader and a brand synonymous with trust, highest
standards of service quality, international best practices and social
responsibility.
Mission of National Bank of Pakistan
National Bank of Pakistan will aspire to the values that make NBP truly the
Nation’s Bank, by:
 Institutionalizing a merit and performance culture.
 Creating a distinctive brand identity by providing the highest standards of
services.
 Adopting the best international management practices.
 Maximizing the stakeholder’s value.
 Discharging our responsibility as a good corporate citizen of Pakistan and in
countries where we operate.
Core Values of National Bank of Pakistan

 Highest standards of Integrity.
 Institutionalizing team work and performance culture.
 Excellence in services.
 Advancement of skills for tomorrow’s challenges.
 Awareness of social and community responsibility.
 Value creation for all stakeholders.
Goals which National Bank wants to achieve
To enhance profitability and maximization of National Bank of Pakistan share

through increasing leverage of existing customer base and diversified range of
products.

Overview of National Bank of Pakistan

Role: The Special Role of National Bank of Pakistan is occupies a unique position in
the financial sector of Pakistan. It also acts as an agent of the Central Bank wherever
the State Bank does not have its own Branch. It also undertakes Government Treasury
operations.
Ownership: NBP is 100% owned by the Government of Pakistan. . It has offloaded
23.2 percent share in the stock market, and while it has not been completely privatized
like the other three public sector banks, partial privatization has taken place.
Branch Network: NBP has an extensive domestic branch network of over 1282
branches located all over Pakistan. The Bank also has a presence in 23 international
locations including the USA, United Kingdom, Europe and the Far East.
Deposits of National bank of Pakistan: NBP holds 24.6% share of time and demand
deposits in the country. Local currency deposits comprise 67% of bank's total deposits
while foreign currency deposits account for the rest. Year over year, National Bank of
Pakistan has seen little change in their bottom line (from 17.8B to 17.7B) despite
revenues that grew from 14.1B to 14.9B. A key factor has been an increase in the
percentage of sales devoted to SGA costs from 189.48% to 205.93%
Head office and Branches: Head office of national bank is in Karachi with their
1282 branches local and 23 branches internationally.
History of National Bank of Pakistan

The history of establishment of National Bank of Pakistan started from
the beginning of economic struggle in Pakistan in the year of 1947, when non-
Pakistani community of Hindus handled most of the country's economy. The
involvement of this level by the Hindus in the Pakistani economy was high attitude.
The situation got worst when after the division in 1947, most of the banking
professionals and employees of the import and export houses, left the country and
economy of the country was brought down to a stand still position. The number
offices in Pakistan were 631 before the division. This number immediately fell into
193 after independence of Pakistan. These remaining offices of the bank, most of
which belonged to old Imperial Bank of India, were maintained for the partial
operations with the help of skeleton staff body.
At the time of independence, it had been arranged between India and Pakistan
that the reserve Bank of India should act as the common monetary authority for the

both countries up to end of September 1948. But unfortunately this arrangement did
not prove satisfaction. The main course of this malfunctioning of the whole plan was
mainly because of the Indian aggression in the occupied Jammu and Kashmir, which
caused some serious damage Indo-Pak relations. As a result of this experience,
Pakistan felt it could not lace any reliance on the Reserve Bank of India. It was clear
that its own Central Bank was an indispensable necessity, so in result State Bank of
Pakistan came into being was in July 1948 and was inaugurated by Quaid-i-Azam
Muhammad Ali Jinnah.
The normal procedure of establishing banking companies under the
Companies Law was set aside and the bank was established through a 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 20, 1949 at six
important jute centers in the East Pakistan and directed its resources in financing of
the jute crop. The Bank’s Karachi and Lahore offices were subsequently opened in
December 1949.
State Bank of Pakistan after its formation demanded from Indian Reserve Bank the
assets against the Indian currency retired from Pakistani territory. Government of
India refused to hand over the assets worth about five hundred million rupees. The
dispute is still unsettled and these assets still not delivered to Pakistan. Until June
1950, the bank was engaged exclusively on jute operations. Thereafter, it felt that it
could expand its business to include other commodities as well. Bank took a big stride
in 1952, when it replaced the Imperial Bank of India, as an agent of State Bank of
Pakistan.
With a passage of time its functions diversified as they take over the function
of different institution with the passage of time like in past they took over the function
of the Imperial Bank of India and now of National Development Finance Corporation.
It is working as the agent of the State Bank of Pakistan and performs its functions
wherever State Bank of Pakistan is not present.
The government floated its 10% of the shares in the open market in past and
the ratio became 60:40 and in future they trying to make it 55:45.
In 1999 National Bank of Pakistan celebrated its golden jubilee during the last
fifty years banks has made substantial strides in the financial services industry in
Pakistan. In 1999 its market shares was around 22% and it remain the largest financial
institution in Pakistan.
The NBP with its head office at Karachi operates through the regional headquarters
comprising on Zones. It has a total branch network of branches. It has overseas
branches all in important financial branches of the world i.e. USA, UK, Germany,
Japan, France, Korea, Bangladesh, Central Asia and representative offices in Egypt
and China. National Bank of Pakistan is the only bank of Pakistan, which qualify
international standards of "Capital Adequacy Ratio". In short NBP performing a
major both core and non-core banking functions of the country.
During the 1960s the bank's network of branches increased, enabling it to give
necessary service to a wider segment of the economy. By adopting a blood policy for
promoting and developing a broad industrial base, it enhances its contribution to
planned development. A loan to industry is nearly one-third of the bank's total loan
portfolio. There has been no looking back since. The bank is extending loan to
industry both in public and private sector in diversified areas, ranging from dice
husking and cotton ginning to finished products, light engineering, iron & steel, oil
refineries, telecommunication and emerging non-traditional items.
Besides the traditional industries, which continue to receive funding, the bank has in
the recent past diversified its loan portfolio. New units being extending financing
include among others, Tiles and Ceramics, Manufacturing of Chinese type
Rickshaws, consumer Goods, Sell Phone Companies, Poultry, Carpets and Jute bags,
Hotels & Housing. In short National Bank of Pakistan through its wide network of
branches has contributed to the industry development of the country. It has rendered
active help and assigned the government in its endeavors towards financing of new
sectors so to bring about an all around prosperity and development of the country.
Current Status and Nature of Pakistan
National Bank of Pakistan (the bank) was incorporated in Pakistan under the National
Bank of Pakistan Ordinance, 1949 and is listed on all the stock exchanges in Pakistan.
It's registered and head office is situated at I.I. Chundrigar Road, Karachi. The bank is
engaged in providing commercial banking and related services in Pakistan and
overseas. The bank also handles treasury transactions for the Government of Pakistan
(GoP) as an agent to the State Bank of Pakistan (SBP). The bank operates 1,283(2011:
1,277) branches in Pakistan and 23 (2011: 23) overseas branches (including the
Export Processing Zone branch, Karachi). The bank also provides services as trustee

to National Investment Trust (NIT), Long-Term Credit Fund (LTCF) and Endowment
Fund for student loans scheme.
Scope of Business and Volume
Karachi: October 26, 2012: After tax profit increased to Rs 11.8 billion higher
from last year by 4%. Earnings per share stands at Rs. 6.38 compare to Rs. 6.16
of corresponding period last year. Pre-tax return on equity stands at 20.2%
with pre-tax return on assets at 2.0%. Bank’s net interest income in line with
the banking sector was impacted due to reduction in discount rate by 200 bps
last year, and 150 bps in August 2012 as well as increase in minimum profit
rate on deposits to 6% effective from May 2012. Despite this impact was to a
certain extent offset through recoveries and balance sheet growth. Non
interest markup income increased by Rs. 2.7 billion or 20.5% compared to
corresponding period last year mainly because of higher dividend and capital
gains due to higher portfolio size. Expenses increased by 14% in line with
inflation related salary increases and other overhead costs. Provision charge
against advances show a reduction of Rs. 929 million and 17% mainly on
account of lower fresh accretion and restructuring of certain corporate loans.
Provision against investments shows reduction compared to corresponding
period last year by Rs. 1,370 million or 76% mainly due to lower impairment
loss against shares. Deposits compare to September 2011 are higher by Rs. 91
billion. The bank continued to replace high cost deposits with low cost
deposits, due to which term deposits declined by Rs. 56 billion resulting in
deposit reduction of Rs. 38 billion from December 2011. The bank is focusing
on low risk gold and agriculture lending and has increased its portfolio by
23% in the segment during the year.
Product lines and important brands
 Finance available for home purchase, home construction, and home

improvement.
 Period of repayment range between 3 to 10 years.

 Loans available up to maximum of Rs. 10 millions (home purchase up to 7.5

million, home reconstruction up to 7.5 million and home improvement up to
2.0 million).
 Markup choices are not available. Fixed Rate of Markup is 16.50%
 Minimum approval and disbursement timing.
 Limited to area where there are no documentation, fee and resale and
foreclosure relative issues, so to protect the bank's interest.
 20 months’ salary in advance (certain condition apply)

 Minimum documentation.
 Repayable in 5 years.
 No processing charges, no collateral no guarantees, no insurance
 Markup charges at 19% per annum on reducing balance method.
 For only Government Employees(certain condition apply).
 Installments should not increase the 50% of the salary.
 Facility of Rs. 3000 against every1 Gm of gold.

 Markup is 15.50% per annum
 No maximum limit of cash
 Repayable after one year
 Roll over facility
 No penalty for early payment
 Loans available for farmers for production, development purposes, for

purchase of tractors, for installation of tube wells, for purchase agricultural
implements, micro loans, for godown construction, for construction of fish
form, for livestock forming.
 Markup 15.50% per annum
 Loans available at farmer's doorsteps
 Agriculture experts to guide farmers
 Loans available against agriculture passbooks, gold ornaments and paper
security
NBP Karobar
(President's Rozgar Scheme)
Self-employment opportunities for un-employed
Financing Term & Conditions:
 Minimum down payment: 10% of asset price
 Tenure: 1 to 5 years (for PCO 2 years)
 Grace period: 3 months
 Maximum loan amount: Rs. 200,00
 Age: 18 – 45 years
 Mark-up (Variable): 1 year KIBOR + 2.00% p.a. (for first year, mark-up will
be 12%). The customer will pay mark-up @ 6% p.a. as long as GOP provides
the balance mark-up to NBP on monthly basis.
Yellow Cab Scheme
 Markup rate is 12%.
 6% will be paid by the Government and remaining by the customer.
Tractor loan
 Any person having 12.50 Acre agriculture land is eligible for this scheme.
 Type of loan may be production, development, farm sector.
Product features are as follows:

 Comfortable and secure environment for trading
 NBP financing at very easy terms requiring minimum documentation
 Minimum turnaround time
 No security requirement from the customer except for the customer's equity
 Customer's equity freely available for investment.
 Equity acceptable in cash or approved share.

Eligibility for the product

 Pakistani National with valid computerized national ID Card
 Over 21 years of age
 An account with NBP designated Branch
 Equity in the form of cash or NBP approved shares
 No default with any financial institution
Agriculture Loan
For the agriculture sector major three types of loans are available
Production
 It means the loan is to increase the production or to buy more land for
cultivation.
Development
 It means the loan is provided to buy the agriculture instruments like tractor,
land craft
Running Finance
 This loan is provided to fulfill the domestic needs
 Liquid securities are acceptable e:g prize bond, Ssc, Ric, Pls term deposit
certificates

ORGANIZATIONAL STRUCTURE OF NATAIONAL

BANK OF PAKISTAN BEFORE 02.07.2010
(From Head Office to Field Level)
President
Commercial Regional
& Retail Corporate &
Business
banking Investment
Group chief Chief Regional Banking
Marketing Managers
Group
Operations Regional Branch

Group Operations Manager
Chief Chief
Corporate
Head
1.North
Regional Operations Branch 2.South
Compliance Departments Operations
Chief of the Manager
Region
Risk
Regional Corporate
Management Branches
Group Chief Risk Management
Credit Credit
Department of Department of
the Region the Region
The said RMTs structure has been abolished by Mr. Syed Ali Raza, President of the
Bank on 02.07.2010 and has announced re-organization in the current structure.

Reorganized organizational structure
Structure of National Bank of Pakistan (Ahmed pur East: 302)
Mr.Waseem Akhtar Mr. Hanif Sb

OG-1 Deposit in-charge
Branch Manager
Nazar Mohammad
Operation Manager Sheikh Muenudeen
Head cashier
Abdul Shahzad Nadir shah

Agriculture Field Officer OG-II Cash officer
Mushtaq Ahmed Nadir hussain shah

Cash officer Cash officer
Mr. Saeed Ahmed Iyaz Hussain

Sheikh Umer Saeed Remittance & Government section
OG-III EBS Operator Clearance
Messenger
Armed Guard

Main Head Offices Located in Pakistan
Branch Network & Infrastructure
DOMESTIC BRANCHES
REGIONAL OFFICES 29
TOTAL BRANCCHES 1,283
ISLAMIC BANKING BRANCHES 06
ONLINE BRANCHES 1282
TOTAL ATM MACHINES 203
CUSTOMER FACILITATION CENTRE 06
OVERSEAS BRANCHES
OVERSEAS BRANCHES 23
REPRESATIVE OFFICES 10
(Figures are according to the Quarterly Annual Report 2012 & latest updates from
the Branch Manager and available data on the website)

Grade / Rank Structure of the Bank Employees

GRADES OF BANK
SEVP
EVP
SVP
VP
AVP
GRADE-1
GRADE -2
GRADE-3
CLERICAL
ASSISTANT
Clerical Staff Non-Clerical Staff
Cashier Messenger
Technical Staff Dispatch Rider

Analysis and Comments on Organizational Structure of National

Bank
Before 02-07-2010 the organizational structure was so complicated. Each authority
has a large span of control. In that structure president has to control six head and it
shows a lot of responsibility. At that time the president of Bank Mr. Syed Ali Raza
announced to reorganize the structure. After reorganizing the structure becomes so
simple and convenient. The first line managers are the president and board of
directors of the organization.
If we made a deep analysis over the hierarchy of the structure president has further
chiefs. Chiefs supervise the regions assign to them. Each branch then works under the
guidelines and instructions of the regional offices. Then there is a chest branch in
every city. A chest branch has authority of issue Government Draft.
Now the structure is so simple and easy that everyone can understand it so easily.
Initially there is a president than board of director, member executive board , regional
head, zonal head ,branch manager.
Departments in National Bank of Pakistan Branch

Following departments are working in National Bank of Pakistan branches:
 Foreign Exchange Department
(The said Deptt. did not exist in the Ahmed Pur East Branch)
 Credits and Advances Department
 Remittances Department and Collection
 Cash Department
 Deposits Department
 Bills and Government Receipt & Payment
 Clearing Department
Credit & Advances Department
The most important activity of the bank is the granting of credit to the
customers. National Bank of Pakistan provides short term and long term financing for
domestic and international trade. The policies are made by the central office of the
cash can be amended on the basis of rules and regulations, economic risk of each
country board of directors and committee of the National Bank of Pakistan made this
type of decision and informed about these decision to branch managers.
Managers can grant the credit limit to each customer with in the declared
limits approved by the controlling offices i.e. zonal. Banks grant credit to the
customer for a certain period of time. The Banks provides the credit to the customers
so that they can purchase ahead of their liability. By giving these facility to the
customer large scale production of commodity can be achieved and economic growth

rate can be increased. The power of sanctioned loans had been delegated for
controlling different offices, according to the amount of loans. This department is also
called as risk management group.
Advances section:
Advances are investments of bank to earn profit. After restructuring of National Bank
of Pakistan, Head Office gives loan targets to each branch that must be achieved for
its survival. The Manager is responsible to achieve these targets in the given period.
TYPES OF LOANS /FINANCES:
There are three major types of loans that are offered by NBP mostly at
the rate of 15.50% or Kibor+premium (premium lies between 1.10% to 4.50%), they
are as follows:
 Short Term Finances
 Medium Term Finances
 Long Term Finances
SHORT TERM FINANCES:
Short-term finances are sanctioned for increasing Working Capital &
Production. These are given for the period of one year to 3 years maximum. Short
Term finance includes the following types:
 Cash Finance
 Demand Finance
 Running Finance
Cash Finance
In this mode of financing the borrower is allowed to make withdrawals of funds as
require, but the total amount outstanding cannot exceeding the limit sanctioned. The
calculation of mark-up or interest is based on the number of day a specific amount is
withdrawn. This finance is normally borrowed by the small traders or individuals for
their petty matters involving cash transactions up to three hundred thousand
maximum. The bank gives this loan to the customer & businessman against certain
specified immovable property. It is issued for establishment & extension of industry.
Demand Finance
One time disbursement of the whole amount sanctioned, as the limit for the credit
allows. Any person, individual, group, company, firm and all others can achieve this
mode of financing. The mark-up or interest is calculated on the total amount disbursed
and requires to be paid before the date of final adjustment. Regarding the amount,
limit and period it depends on the nature of the case in interview. This loan is given
against movable property (called Secure Finance) or may be given against personal
guarantee (called Clean Finance).
Demand finance is further divided into three types:
 Staff Finance
 Gold Finance
 Agriculture Finance
I. Staff Finance
This finance is given to the employees of National Bank for improving their living
standard e.g. for purchasing a motorcycle, car, house building, computer etc. There is
no markup on this loan except on car & computer buying @ 4%.
II. Gold Finance
It is sanctioned for the period of 11 months by pledging gold ornaments.
III. Agricultural (Seasonal Finance)
It is given for supporting seasonal crops like ‘Rabi’ & ‘Kharif’. It is sanctioned for six
month only at high markup rate.
Running Finance
This finance is only a secured finance which is sanctioned against movable security
that is easily convertible into cash e.g. security bonds, Govt. certificates & bonds etc.
Example for this loan is Three Advance Salary. Three Advance Salaries is given to
Govt. or semi govt. registered company’s employees. The only condition for this type
of credit is that the salary must be directly credited into the bank. The borrower must
give a blank cheque for security. Security against running finance is that whish is
easily convertible into cash and bank kept 25% margins with it.
Medium & Long Term Finance:
These finances are issued for production & development of industry &
agriculture e.g. for buying input or building for industry.
These are issued for the period of 5 years or more. The main types of this finance are:
 Project Finance
 Agriculture (Development)
 House building Finance.

Advances provided by the Bank are of following two types:

 Funded Based Finances
 Non-funded Based Finances
FUND BASE
Loans are those which given in cash form to the borrower.
NON-FUND BASE
Loans are those which given other than cash e.g. Guarantee, L.C, Promissory Note
etc.
Banks run their business with the money of depositor, which is
repayable to them on demand. Banker is very conscious while using these funds. They
think thousands times before lending to the borrower. They must keep in mind the
following 5 C’s of Credit before advancing the loan:-
 Character
 Capacity to Repay
 Capital
 Collateral
 Condition
1. Character:
The first most important factor considered in the credit analysis is character. The
credit character is based on the borrowers' willingness to pay his obligation. The
willingness can be judged by the banker to see his family background, stability of
employment, personal habits, nature of business, previous record moral reputation,
importance of values to him etc.
2. Capacity to Repay:
Capacity to pay means ability of borrower to repay the amount of loan
when due. The borrower ability to repay the loan is assessed by the officer whether he
is able to repay that amount of loan which he wants to get. Before advancing the loan
bank must be satisfied with the repayment of fund.
3. Capital:
Officer assesses the capital of the borrower. If assets held by the
borrower are liquid, they can be easily convertible into cash, but if non-liquid is used
then it is risky to given loan. The asset of the consumer may be in form of house
motorcar, furniture etc. The businessman may own assets in the form of new
material, plant, machinery, building etc. The bank should extend the loan in the
proportion to the asset head by them. If the assets of borrower are liquid, he may be
giver large amount of credit. If assets are not liquid, then less amount of credit may
be given against the value of assets. Before landing the loan the banker should
examine the value of his business and its prospectus in future. The banker should
keep in his maid the owner's participation in his business. The banker should not
provide loan more than capital.
4. Collateral:
Collateral means an additional security given against the loan. Before
advancing the loan the banker should preferred get the security of liquid assets
because they can be converted into cash easily. The collateral security may be
consisting of stock, bill of exchange, bill of lading warehouse receipt, bonds etc.
Bank must be carefully examining this collateral security before advancing the loan
for security purpose. Banker should not extend loan on up to the full value of
collateral security. The securities, which are issued by the govt., may be given
100% loan against them. The other collateral may set 40%, 50% etc. loan against
the value.
5. Condition:
The economic condition of the borrower is determined. The economic
condition of the borrower in and outside the country effects the repayments of the
loan. If condition is favorable then loan is given otherwise vice versa.
Few Major Requirements for Sanctioning Loan
 Copy of CNIC.
 A written application.
 eCIB Report.
 Acceptable Security.
 Acceptance of the terms & conditions of the Bank.
 Financials of the Borrower to access the repayment.
 References.
Securities:
Before giving a loan to borrower a bank required a valuable security in three ways:
 Hypothecation
 Pledge
 Mortgage
Hypothecation:
In This type of security, immovable property is pledged by the bank &
bank is required a real value of that property for sanctioning a loan. Margin for this
security is 50%. In hypothecation bank does not interfere in the business of borrower.
Pledge:
In Pledge the bank has 90% shares in business of the borrower. The
bank has a right to sold the production & interfere in business transactions. In this
type of security bank pledge the stock & raw material. The stock must be insured.
Stock is controlled & managed by the bank; borrower cannot use raw material &
cannot sell its production without the presence & permission of the agent of bank.
Mortgage:
All documents of ownership & registration of movable property is
submitted to the bank with an authority letter which has an agreement to give
authority of selling property in case when borrower will not repay the loan after a
fixed period.
Remittance Department
Remittance is a major function of the bank. It is the transfer of money from one place
to another place without directly involving cash.
By proving this service to the customers the National Bank earns a lot of income in
the form of “Exchange”. There are two types of bills remittance:
 Remittance inward.
 Remittance outward.
Remittance inward:
Cheques & Drafts received for payment and clearance or drawn on us
from customer or other banks on behalf of their customers is called remittance
inward”.
Remittance outward:
“All instruments issued by us, which are drawn on other branch of the
same bank or instruments deposited for collection from other bank locally or out of
the city are called outward remittances”.
Bills remittances & collection are mainly laying under two heads i.e.:
 Local Short Credit (LSC).
 Short Credit (SC).
Local Short Credit (LSC)

All bills for remittance & collection from customer or bank within the
city are recorded under this head in LSC book. These bills are passed along with a
covering schedule & Advice/ Ex-advice to main branch of the bank, from where an
agent of SBP received those bills for clearance.
Short Credit
All bills for remittance & collection from customer or bank outside the
city/ country are recorded under this head in SC book.
If bill is drawn on the bank itself then it passed along with a covering schedule & an
Advice/ Ex-advice directly by courier service to the concerned branch on which it is
drawn for realization.
If bill is drawn on another bank then it is passed to the main branch of our bank of
mentioned city for realization.
National Bank of Pakistan deals with the following type of remittances: -
A. Demand Draft (DD)
B. Mail Transfer (MT)
C. Telegraphic Transfer (TT)
D. Pay Order
Now we discuss all these in detail: -
DEMAND DRAFT (DD):
“Demand draft is a written order given by the one branch of a bank on behalf of
customer to another branch outside the city of the same bank for a certain amount to
the certain person”.
It is an unconditional order. The payee is not bound to have an account in the bank. It
is issued on the request of customer and bank receives the charges & exchange.
Exchange rate is based on the amount of the instrument.
Procedure for Prepare Demand Draft
1. A draft request slip is filled which contains the following information
 Name of the parties involved
 Date
 Amount to be sent
 Account number (if DD is crossed)

2. A credit voucher is filled in order to get the exchange commission &

preparation charges.
3. The sender deposits the total amount of the two vouchers i.e. the debit and
credit vouchers.
4. Then the cashier sends the cash receipt voucher to the accounts department
and the account records the amount paid in his cash scroll.
5. Accountant gives the DD leaf along with the DD voucher to his assistant
who records the sender’s name, amount and receiver’s name. After writing
all the information in the DD register he gives it to the officer along with
the DD for authentication.
6. Head Cashier and Operations Manager make a secret code with the help of
code book; this code is written on the advice &Frankfort.
7. After authentication the DD is handed over to the sender and bank sends
the advice with a Frankfort (debit f-15) to the concerned branch. DD
documents must have a TR code which is 22. So when the party presents
the DD in the concerned branch, its payment could be made.
Parties involved in the Demand Draft

The following parties are involved in demand draft;
1. Purchaser or Sender
The purchaser is the person who sends the money to a particular person who is paid
by certain branch.
2. Issuing or Drawing Branch
The branch from where the demand draft is issued to another branch of the same
bank.
3. Drawer Branch
Branch in which the draft has drawn and called upon to pay the amount
4. Payee
The person who is entitles to receive the amount after presenting the demand draft in
the Drawer branch.
MAIL TRANSFER (MT)
It is the transfer of money from one branch to another branch of the same bank
through mail service. In mail transfer there is no need of advice as the amount is
directly credited to the receiver’s account. It is necessary for both parties to have
accounts in the same bank. Its TR code is also 22.
Procedure:
1. First a request slip is filled in which the sender writes the amount to be sent,
name, account number of the receiving person with the branch name and date.
2. A credit voucher is filled in order to deduct exchange, postage charges
according to the amount of the mail transfer.
3. The sender deposits the total amount of the two vouchers in the cash
department.
4. The cashier gives the voucher to the accountant after affixing received stamp
and writing the amount by red ink.
5. Then the accountant writes the amount paid in the cash scroll and gives the
MT to his assistant.
6. MT leaf is filled according to the information provided in credit voucher. He
also writes the same information in the MT register. Then he gives the MT
leaf and MT register to the officer for authentication.
7. He takes two signature of the sender on the counter foil of the MT and counter
foil is handed over to the sender. He must applied his signature code with his
signatures on MT & its other documents, at the end the MT along with the
Frankfort is sent to the concerned branch through mail.
TELEGRAPHIC TRANSFER (TT)

This is the most urgent method of remitting the money from one place to another
place. This method is used when the sender desires to send money urgently, in this
case the sender request the manager of the branch to issue TT.
Procedure
For sending the TT the manager applies a test. In the test the manager uses a coding
technique. He writes his own signature code, which is allotted to him as the bank
branch code. After making all the confirmation, the concerned branch makes the
payment to the receiver. If the sender wants to convey the same message through
telephone then he has to pay the charges of telephone along with the TT charges. First
the person deposit the TT amount along with the charges through the credit voucher
then his TT sent to the relevant branch. Its TR code is 21.
Pay Order (PO):

A pay order is a written order issued by the bank on its own branch, drawn upon and
payable by itself to pay a specified sum of money to the person. The purpose of a pay
order is to transfer the fund from one place to another. It is usually not issued in favor
of the parties of other cities. Usually the pay order is issued for the local transfer of
money between two parties. Every purchase of bank is paid through Payment Order
e.g Establishment charges.
Procedure
If the purchase of the branch is of huge amount then first the manager writes a letter
to the Zonal Chief in order to get sanction of the purchase. Then the advertisement of
the purchase is given in the newspaper in order to invite the contractors. But if the
work is small then the branch manager has discretionary power to select the party
whose rate is lowest. After finishing the work the contractor submits the bill of
purchase on his stamp pad. Then the bank issues a pay order, against the pay order the
contactor gets the amount from the issuing branch.
CASH DEPARTMENT
The following books are maintained in the cash department:-
1 ... ... Receiving Cashier Books
2 ... ... Token Book
3 ... ... Paying Cashier Book
4 ... ... Scroll Books
5 ... ... Cash Balance Book

The cash department is that through which all the receipts and payments of bank are
made. Also the bank’s cash record remains with this department. There are two types
of books used in this department.
When cash is received in counter, it is entered in the Scroll Book and Receiving
Cashier Book. At the close of the day, these are balanced with each other. When the
cheque or any negotiable instrument is presented at counter for payment, it is entered
in the Token Book and Token is issued to the customer. The Token and the cashier
make entry in the Payment Book and the payment is made to payee. At the close of
the day, the Token Book and paying Cashier Book is balanced. The consolidated
figure of receipt and payment of cash is entered in the Balance Book and drawn
closing balance of cash.
Opening Balance + Receipt – Payment = Closing Balance
This is very important department because cash is the most liquid asset and mostly
frauds are made in this department, therefore, extra care sis taken in this department
and no body is allowed to enter or leave the area freely. Mostly, cash area is grilled
and its door is under the supervision of head of that department. Officer checks the
books maintained in this department.
Cash receipt book
In which the cashier records the entry when some one comes to deposit some amount.
The clients pay with green slips and the cashier the amount according to the pay in
slip, sort outs the notes, puts a signature, stamps it and record in his book. After
stamping the slip the cashier returns the pay in slip to the customer. Then customer
goes to the another bank officer, he again record this voucher, into this cash scroll and
return one part of the pay in slip to the customer and keeps the other part for the
record.
Cash payment book
When some customer comes to the branch to withdraw some amount from the
account, after getting the token from deposit section he goes to the cashier, cashier
checks his token and cheque which is referred to him from deposit section. The
cashier makes to him required payment and receives the token from the customer.
After recording all the cheques in this book he returned the cheques in to the deposit
section.
Books use in NBP

The following are the common books, which are maintained any branch of NBP. The
sole purpose of the cashbook is to record the total transactions done in each type of
account daily. The closing balance of cash is also included in the cashbook. It is
maintained with the help of various types of vouchers and day books. These vouchers
and day books of different heads are as follows.
 Term deposit vouchers.

 Call deposit vouchers.
 PLS day books.
 Current day books.
 Cash finance day books.
 Suspense vouchers
 Payment order vouchers.
 Charges vouchers.
 Demand finance day books.
 Running finance day books.
Deposit Department
Bank deals in money and they are merely mobilizing funds within the economy. They
borrow from one person and lend to another, the difference between the rates

borrowed and lend from their spread or gross profit. Therefore, we can rightly state
that deposits are the blood of the banks which cause the body of an institution to get
to work. These deposits are liability of the bank so from the viewpoint of bank we can
refer to them as liabilities.
TYPES OF DEPOSITS
Deposits can be segregated on two bases, one is the duration in which these funds are
expected to be with the bank, and second is the cost of getting these funds. So we can
divide deposits into two classes according to duration:
1 ... ... Time Deposits

2 ... ... Demand Deposits
And on the basis of the cost of acquire these funds, a deposit can be classified as any
one of the following four:
a ... ... High Cost

b ... ... Medium Cost
c ... ... Low Cost
d ... ... No Cost
Bank has different kind of deposit schemes in order to induce deposits. These
schemes are a mixture of the above mentioned two types of deposits with and addition
of different services and requirements, mode of transactions, basis for calculation of
profit, deduction, additional benefits, and eligibility for different groups.
TYPES OF THE ACCOUNTS
Depositors can open the following types of accounts with the National Bank of
Pakistan in any branch;
i- Current account
ii- P.L.S. saving account.
iii- P.L.S. Term Deposit Account.
iv- M.I.S. (Monthly Income Scheme)
v- N.I.D.A. (National Income Daily Account)
vi- Call Deposit
vii- Cumulative Deposit Account

CURRENT ACCOUNT
It is a running account between the customer and the bank. As the name signifies the
depositor can draw or demand amount at any time by presenting the cheque in the
bank. Unlike term deposits there is no restriction of withdrawals. The bank neither
pays any kind of interest nor deducts the Zakat from the deposits of current account.
The bank also does not take any service charges up to the minimum balance of
account from the depositors. The minimum balance required to an account to be
opened is Rs. 5000/-. Overdraft facility can be provided through the agreement with
the bank. In developed and developing countries a very significant amount of money
is kept under current account. Businessman normally opens this kind of account.
PROFIT & LOSS SHARING SAVING ACCOUNT

In Pakistan the profit & Loss Sharing Account is introduced in January 1982. In these
P.L.S. accounts the bank gives no fixed rate of profit. These types of deposits are
designed to encourage the saving habits of the people. The minimum deposit to open
this account is Rs. 300/-. After every six months a rate of profit is announced by the
Head Office and after calculating the amount, it is credit to the depositor account.
Now a day, if an account holder maintains Rs.2000/- minimum balance throughout
the month then his account is eligible for profit. On 1 st day of RAMADAN, Zakat is
deducted at the rate of 2.5 %. If any customer does not want to pay Zakat from his
account then he must give an undertaking that he will pay Zakat himself or he belongs
to Fiqah-e-Jafriya. Restriction on withdrawal of heavy balances is now abolished.
Customer can withdraw heavy amount within the banking hours without giving any
notice.
Profit Calculation:
Profit is calculated on the basis of Product & Days. Product & Days include
number of months for which the bank retains balance multiply with the amount of
balance, and then apply the rate of profit on net balance.
P.L.S. TERM DEPOSIT

In this type of account the amount is deposited for a specified period of time.
This period varies from 7 days minimum to maximum 5 years. The profit rate is also
changes with respect to period. There is higher rate of profit on long term P.L.S.
T.D.R. The minimum balance required to open this type of account is Rs. 10000/-.
Profit is announced after six months and then credited to the respective accounts.
Monthly Income Scheme
For this scheme the required minimum balance is Rs.10000/- Profit is
announced after every six months but it is credited to the customer’s account in every
month. Mostly retired persons are like to open this type of account.
National Income Daily Account (NIDA)
Mostly big organizations open this type of account. Minimum balance for this
account is Rs. 250,000 & profitable balance is Rs. 2 million. Profit is given on daily
basis & profit rate is same as P.L.S account.
Call Deposits
This deposit is used for Govt. services e.g. Tender Notice fees, advance payment
for participating in Nilami of govt. property. No profit is given on this account.
Cumulative Deposit Account

In this account certificates are issued of certain amount for the period of 20
years. Profit on this account is calculated as compound interest.
ACCOUNT OPENING PROCEDURE
Requirements for opening an account;

(i) NADRA verification of CNIC of the customer.
(ii) A copy of ID card of both introducer & customer.
(iii) Original ID cards for verification.
(iv) If customer use thumb impression then he must gives his recent 2
snaps & female customer also gives a written statement on P.L.S form
that “I do not observe Parda”.
(v) Next to kin. The customer must clear that is responsible for the account
in his absence.
(vi) Customer must be appearing at the time of account opening.
IN CASE OF CURRENT ACCOUNT;
(i) For partnership firm account, a copy of partnership Deed & Article of
association is required.
(ii) For Corporation account, a copy of Memorandum of association is

required.
(iii) All the Executives of the firm must be present at the time of account
opening.
(iv) A copy of registration of the firm.
(v) Number of partners & who will operate the account must be cleared.
Terms and conditions for Account Opening;
(i) Customer must be a citizen of the city in which he wants to open his
account.
(ii) Introducer must have the balance of Rs. 4000 in his account.
(iii) A blind person can open a joint account with a partner who must not
blind.
(iv) Insane person cannot open an account.
(v) A person who sometimes normal & sometimes abnormal then he must
operate his account only in normal condition.
(vi) Endorsement Account. If account holder does not operate his account
more than one year then his account will be ceased & he cannot draw
the cheque without giving an application.
Procedure of opening an account;
(i) Customer to fill application to open an account on bank’s prescribed
form.
(ii) Account opening form is properly filled in.
(iii) Banker takes customer’s signature on specimen card & keeps it in
record.
(iv) A letter of thanks on prescribed form should be sent to new account
holder under certificate of posting.
(v) When customer comes with that letter of thanks then cheque book &
Passbook is issued to him.

Issuance of cheque book

Size of cheque book is varies. It contains 10 leaves to 100 leaves.
The assistant writes the following information on the title page of the cheque book
and cheque book issuance register.
 Issuance date
 Name of account holder
 Account number
 Type of account
After authentication by the authorized officer on the cheque book register, the cheque
book is handed over to the account holder.
 First time cheque book is issued when customer presenting letter of
thanks of the bank.
 Empty cheque book has a requisition slip. Customer can get a new
cheque book by giving that requisition slip to the banker.
 If cheque book or requisition slip has stolen then customer must
reported a FIR & submit a copy of that FIR to bank for stopping
payment & issuance of new cheque book.
Mode of operation
The customer can operate an account with the National Bank of Pakistan in
the following ways: -
 Individually
 Jointly
Individual Account
When a single person operates an account is called individual account. After his
death, the person who is authorized by court will operate the account.
Joint Account
There are two ways to operate a joint saving account:
Either or survivor
For payment a cheque is required with signed by anyone partner. In case of
death of any partner of joint account, the survivor will operate the account.

1. Jointly operate
For payment cheque is required with signed by all partners of joint account. If cheque
is missing a sign of any partner then it will not discounted.
DEPOSITING OF THE AMOUNT
Account holder can deposit the amount in cash or transfer in his account through
credit voucher. In N.B.P. two types of vouchers are used for this purpose.
a) Blue voucher which is used for Cash Receipts
b) Pink voucher, which is used for all Non Cash
Receipts like drafts, cheques, payment orders etc.
ENCASHMENT OF CHEQUES
 Issuance of Token
After scrutinizing the apparent tenure of cheque, a token is issued to the account
holder. An assistant writes the number of issued token on the back of cheque and
transfer it to his officer.
 Verification of Signature
After affixing the two stamps i.e. Pay Cash and Signature Verified, a cheque is sent to
the accountant for the verification of signature from signature specimen card. After
authentication of signature and posting in his account the cheque is sent to the cash
department for the payment.
 Payment of Cash
Cashier pays the amount to the token holder after getting back the token from
customer and matching the number with cheque.
DEDUCTION OF ZAKAT
From the PLS Saving account Zakat is deducted at the rate of 2.5% annually on
the outstanding balance of account on the first day of every valuation date i.e. first
day of Ramadan. Minimum balance for deduction of Zakat is fixed by the Central
Zakat authority (CZA) before the valuation date.
DISHONOR OF CHEQUE

When a bank refuses to make payment of his customer’s cheque that is duly
presented at the counter of the bank, the cheque is said to be dishonor.
Following are main reasons for dishonoring of a cheque:
1. Effects not yet cleared.

2. Refer to drawer.
3. Amount in words & figures differ.
4. Payment stopped by the drawer.
5. Requires revalidation.
6. Drawer’s signature differs.
7. Cheque is post dated.
CLOSING OF ACCOUNT
There are many reasons for closing or ceasing of an account. It is not a good
indication for the business of the bank. Some of the more common reasons are as
follows:
 Account holder’s own request
 Death of the account holder

 Bankruptcy of the account holder
 Closing of account due to bad conduct of account holder etc.
 By the order of Govt.
 Insanity of the account holder.
 Account is not operated for the period of 3 years.
Before closing an account the bank sends a letter to the account holder that his
account will be closed. So after fulfilling the legal requirements, it is marked of the
accounts holders' number that the account has been closed.
Routing of Expenses
Vouchers of all expenses and material purchases are routed out through this
department. As far as the expenses are concerned, they include the leads of salaries

paid to the confirmed employee of the bank, wages paid to employees that are on
contractual basis, rent of the building, lease installment and insurance premium paid
to insurance company for the insurance of vehicles and cash in safe and counter.
Expenses also include the utility bills, which consists of courier, electricity, water and
gas bills, medical expenses which are reimbursed.
Bills and Government Receipt / Payment DEPARTMENT
This department performs the following functions:

 Collection of Utility Bills
 Collection of Dues of Education Institutions
 Payment of Zakat
 Payment of Pension
Government Receipt:
Procedure:
The cashier in cash section receives utility bills. The cashier posts the amount of bill
in respective scroll and at the end all the amount of collected bills is transferred to the
respective account. Then representative of the concerned department collects the
amount in the shape of M.T. (Mail Transfer). The bank takes the collection
commission of Rs. 2 per bill from each type of bill.

Federal and Provincial Taxes are also received by the Government. Federal Taxes
including income tax, central excise tax, sale tax and domicile fees. And Provincial
Tax including provincial excise duty, provincial motor vehicle duty (duplicate fees,
transfer fees, token fees), provincial misc. tax, provincial property tax and agriculture
tax. The customer deposits two or three copies of tax Performa with cash or through
transfer. The cashier enters this Performa in govt. scroll and one copy returned to the
customer. At the end of the day a summary is prepared and the total amount is
credited to the relevant head.
Government Payment:
Procedure:
National bank is fully authorized to disburse the pension to the Govt. and Army
retired personnel. For the distribution of pension the branch maintains the pension
register. In order to get the pension, first the pensioner submits his pension voucher
with his pension book, that voucher sent to the cash department for the payment to the
pensioner after posting into his account.
Clearing Department
The major function of clearing department is to receive the cheques, which are drawn
on some other banks. The customer can get the money in his account at National Bank
of Pakistan through a cheque drawn on another bank. The bank accepts these cheques
and collects the amount from that bank on which cheques are drawn through the
Clearing House. Bank charges some commission for this function.
Every banker acts both as a paying as well as a collecting banker. It is however an

important function of crossed cheques. A large part of this work is carried out through
the bankers clearing house. A clearing house is a place where representatives of all
the banks of a city get together and settle the receipts and payments of cheques drawn
on each other bank. As the collecting banker runs the certain risks in receipt of their
ownership, the law has provided certain protections to the banks.

Procedure for Clearing the Cheques:
Pay-in Slip:
The customer fills the pay-in slip. These slip just like deposit slip. The cheque
number, date, amount and account number must be written on this slip.
Stamping and Scrutinizing:
The officer on receipt of cheques and pay-in slip will stamp the pay-in slip
with "cheque received" and give a portion of slip to customer and the remaining
portion with the original cheque.
The original cheque will mark with two stamps;
1. National bank of Pakistan

2. Clearing cheque
At the end of day, all cheque are counted and then scrutinized in bank-wise and sent
to the Clearing House.

6. Duties & Responsibilities at Branch Level

Duties & Responsibilities of Branch Mangers
1. Over all business affairs of the branch.

2. Development of business plan & budget for the branch.
3. Marketing of deposits. Finance and commercial and retail banking products to
the customers.
4. Customer's visits.
5. Negotiations with borrowers and Depositors for facilities, securities, pricing.
6. Obtaining of customer's financials.
7. Processing of credit proposals.
8. Obtaining of finances, security and collateral documents.
9. Development of objectives and conduct of annual appraisal of the reporting
staff.
10. Obtaining and follow up for stock reports.
11. Obtaining of insurance policy.
12. Approval for the temporary running finance.
13. Follow up for the completion of finances, security and collateral documents.
14. Follow up for marketing goods the shortage and short fall in the pledge goods.
15. Follow up for recovery of finances.
16. Filing and persuasion of suits for recovery of finances below Rs.030 million.
17. Monitoring and periodical review of credit portfolio of the branch.
Duties & Responsibilities of Branch Operations Managers
1) Manage all operations of the branch in the compliance with standard

procedures manual State Bank of Pakistan prudential regulations core
principles and all applicable rules and regulations.
2) Maintain high level of customer service in the branch with particular
emphasis on cash counter.
3) Endure check and control systems are in practices
4) Create a zero complaint environment in collection pf utility bills, pension
payment to the government employees and collection of government revenues
5) Approval of opening new accounts
6) Approval of expenses within delegated authority
7) Administrative matter

8) Preparation of expense and budget monitoring

9) All matters relating to premises, equipment and vehicles
10) Reporting all exceptions to controlling office through compliance officers
11) system operations and implementations of new technology initiatives in
collaboration with IT department
12) Lockers and other services
13) Hajj and Zakat operations to ensure prompt and courteous services to the
customers
14) Opening of L/C and purchase of foreign bills
15) Maintenance of branch books in order to prescribed procedures
16) Recovery of charges as per bank's tariff
17) Inspection of goods
18) Review of computer outputs, vouchers and registers
Duties & Responsibilities of Credit Officers

1) Monitoring the credit portfolio of the branch for the risk management to
recognize early warning signals and recommend remedial measures to branch
mangers.
2) Processing of credit proposal
3) Obtaining of finance, security and collateral documents
4) Obtaining & follow up for the stock reports
5) Obtaining of insurance policy
6) Preparation of finance / credit facilities related to returns for submissions to
regional risk management chief and ensure its timely submissions
7) Review of all trade finance, collateral and security documents
8) Approval for temporary running finance
9) Follow up for completion of finance, security and collateral documents
10) Follow up for the recovery of finance
11) Follow up of making the shortage and shortfall in the pledge goods
12) Filling & persuasions of suits for recovery of finance below Rs. 30 million
13) Preparation of credit reports on borrowers
14) Close liaison with local market for ensuring that borrower or co-obliged has
taken to speculations or unfair means of business
Duties & Responsibilities of Branch Compliance Officers
1) Daily review of transactions to ensure compliance of bank. SBP and local

regulations.
2) Review of account opening and surprise cash count.
3) Review of maintenance of computer input
4) Checking of accrual and NBP general account reconciliation
5) Periodical physical count of security stationary
6) Preparation of compliance report
7) Counter sign all returns to conforms and completeness
8) Rectification of irregular point out by internal / external auditors
9) Special review of account to check compliance of anti money and laundering

regulations
10) Reporting promptly about theft, fraud, forgery of any other mishap and
recommend to branch operations manager to take all protective and remedial
measures.
Products and Service offered by the

National Bank of Pakistan
Products of National Bank of Pakistan
NBP Saibaan
 Finance available for home purchase, home construction, and home
improvement.
 Period of repayment range between 3 to 10 years.
 Loans available up to maximum of Rs. 10 millions (home purchase up to 7.5
million, home reconstruction up to 7.5 million and home improvement up to
2.0 million).
 Markup choices are available. Rate ranges between 9.0 to 12.85% rate subject
changes.
 Minimum approval and disbursement timing.
 Limited to area where there are no documentation, fee and resale and
foreclosure relative issues, so to protect the bank's interest.
NBP Advance Salary

 20 months salary in advance (certain condition apply)
 Minimum documentation.
 Repayable in 5 years
 No processing charges, no collateral no guarantees, no insurance
 Markup charges at 15% per annum on reducing balance method
NBP Cash and Gold

 Facility of Rs. 5000 against 10 Gm of gold.
 Markup is 9% per annum
 No maximum limit of cash
 Repayable after one year
 Roll over facility
 No penalty for early payment

NBP Kisan Dost

 Loans available for farmers for production, development purposes, for
purchase of tractors, for installation of tube wells, for purchase agricultural
implements, micro loans, for godown construction, for construction of fish
form, for live stock forming.
 Markup 9% per annum
 Loans available at farmer's doorsteps
 Agriculture experts to guide farmers
 Loans available against agriculture passbooks, gold ornaments and paper
security
Required Documents for Loan Sanctioning
 Two attested passport size photograph.
 Two copies of your CNIC
 Three cheque for processing charges
 Photocopies of property documents --- Lease/Sale Deed, Survey Sheet,
Approved Plan, and Permission for construction/mutation Letter, Agreement
to Sell (if applicable).
NBP Karobar
(President's Rozgar Scheme)
Self employment opportunities for un-employed
Financing Term & Conditions:
o Minimum down payment: 10% of asset price (5% for PCO & Tele
Center)
o Tenure: 1 to 5 years (for PCO 2 years)
o Grace period: 3 months
o Maximum loan amount: Rs. 200,00
o Age: 18 – 45 years
o Mark-up (Variable): 1 year KIBOR + 2.00% p.a. (for first year, mark-
up will be 12%). The customer will pay mark-up @ 6% p.a. as long as
GOP provides the balance mark-up to NBP on monthly basis.
National Income Daily Account (NIDA)

The scheme was launched in December 1995 to attract corporate customers. it is

current account scheme and is part of the profit and loss system of accounts in
operation through the country.
Salient Features
 Minimum deposit Rs. 2 million is needed to open the account with no

maximum limit.
 Profit paid on a half-year basis on a monthly average balance
 Profit rate vary according to the slabs of deposits. On deposit Rs. 2 to 2,000,
the rate fluctuate from 1.4 to 1.75
 Conditions: is a checking account and there is no limit of withdrawal
Services of National Bank of Pakistan
Lockers
These are one of the services which NBP provides to its customers for safe keeping of
their valuables and documents at cheaper rates. Theses are available in four sizes at
the designated branches. These are small, medium, large and extra large. These are
usually used for keeping gold, cash, documents etc. 500 lockers are available ate NBP
Satellite Town Branch.
ATM (Auto Teller Machine)

Fifteen Auto Teller Machines are installed at present at the main business centers like
Karachi, Lahore, Faislabad, Islamabad and Burewala etc. and 30 more to be installed
shortly art other places for which feasibility report are prepared. These modern
banking tools which provide unique facility for the clients to withdrawal their cash at
late in case of emergency.

FINANCIAL ANALYSIS
RATIO ANALYSIS
Ratio simply means one number expressed in terms of another. A ratio is a statistical
yardstick by means of which relationship between two or various figures can be
compared or measured. Ratio relationships are computed to obtain information about
various characteristics and conditions of the firms. Following ratios are calculated
related to the bank.
 Current Ratio
 Cash to Deposit Ratio
 Investment Ratio
 Advance to Deposit Ratio
 Deposit to Liabilities Ratio
 Debt Ratio
 Equity to Deposit Ratio
 Equity to Assets Ratio
 Gross Profit Margin
 Operating Profit Margin
 Net Profit Margin
 Assets Turnover Ratio
 Return on Equity Ratio
 Return on Assets Ratio

 Return on Advances Ratio

 Debt to Equity Ratio
 Earning Per Share
Current Ratios:
(In Billions)
Items 2005 2006 2007 2008 2009
Current
118.499 142.279 150.810 161.976 163.820
Assets
Current
473.924 524.181 609.781 675.617 782.364
Liabilities
Ratio 0.25 0.27 0.25 0.24 0.21
Current Ratio Analysis
0.3 0.27
0.25 0.25 0.24
0.25 0.21
0.2
Value
0.15
0.1
0.05
0
2005 2006 2007 2008 2009
Year
Comments

Current ratio shows the short term paying ability of the firm. The current ratio of NBP
is consistently decreasing from year 2007 to year 2009 that show gradual increase in
deposits side while current assets are not increasing with the same pattern. Bank can
face the problem of not paying to customers when demanded in routine work.
Cash to Deposits Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Cash 71.196 78.625 94.873 106.503 115.827
Deposits 463.426 501.872 501.907 624.939 726.464
Ratio 0.15 0.16 0.16 0.17 0.16
Cash to Deposits ratio

0.175 0.17
0.17
0.165 0.16 0.16 0.16
Value
0.16
0.155 0.15
0.15
0.145
0.14
2005 2006 2007 2008 2009
Year
Comments:

This ratio tells about the short term paying capacity of the firm. That means how
much portion of total deposits hold the firm to pay to account holders. The cash to
deposits ratio of NBP is showing an almost constant level.
Investment Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Investment 156.985 139.946 211.146 170.822 217.642
Total
501.900 553.178 645.855 715.299 824.676
Liabilities
Ratio (%) 31.28 25.30 32.69 23.88 26.39
Investment Ratio Analysis

40.00% 32.69%
31.28%
30.00% 25.30% 23.88% 26.39%
Value
20.00%
10.00%
0.00%
2005 2006 2007 2008 2009
Year
Comments:
This ratio tells about the portion of investment that is maintained from the total
liabilities amount. Investment is an important item for the bank’s assets that generate

non mark-up / return/ interest income. The investment ratio of NBP is showing a
fluctuating trend.
Advances to Deposits Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Advances 268.838 316.110 340.318 412.986 475.243
Deposits 463.426 501.872 591.907 624.939 726.464
Ratio (%) 58.01 63.00 57.50 65.42 65.42
Advances to Deposits Ratio

68.00% 66.08% 65.42%
66.00%
63%
64.00%
62.00%
Value
60.00% 58.01% 57.50%

58.00%
56.00%
54.00%
52.00%
2005 2006 2007 2008 2009
Year
Comments:
This ratio tells about the portion of advances in the total deposits. The advances are
most important item of the bank’s assets, as it not only cover the interest paid to
depositors but also generate extra income. The advances to deposits ratio of NBP is
showing an up and down trend.

Deposits to total Liabilities Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Deposits 463.426 501.872 591.907 624.939 726.464
Total
501.900 553.178 645.855 715.299 824.676
Liabilities
Ratio (%) 92.33 90.76 91.65 87.37 88.09
Deposits to Total Liabilities Ratio

94.00% 92.33%
91.65%
92.00% 90.76%
Value
90.00% 88.09%
87.37%
88.00%
86.00%
84.00%
2005 2006 2007 2008 2009
Year
Comments:

The deposits to total liabilities represent the portion of deposits in the total liabilities.
As deposits is the main source of fund to generate income through awarding
advances. The deposit to total liabilities of NBP is showing a fluctuating trend.
Debt Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Total Debt 501.900 553.178 645.855 715.299 824.676
Total
577.718 635.132 762.193 817.758 944.232
Assets
Ratio (%) 87.00 87.00 87.00 87.00 87.00
Debt Ratio
88%
87% 87% 87% 87%
87%
Value
86%
85%
85%
84%
2005 2006 2007 2008 2009
Year
Comments:
This ratio measures the portion of total assets financed by the creditors, as
distinguished from the shareholders. This ratio also tells about how a firm is able to
maintain the suitable leverage level. The debt ratio of NBP is showing a constant
trend except in year 2007.
Equity to Deposits Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Equity 75.817 81.954 116.337 102.459 119.556
Deposits 463.426 501.872 591.907 624.939 726.464
Ratio (%) 16.36 16.33 19.65 16.40 16.46
Equity to Deposits Ratio
25.00%
19.65%
20.00% 16.36% 16.33% 16.40% 16.46%
15.00%
value
10.00%
5.00%
0.00%
2005 2006 2007 2008 2009
Year
Comments:
The equity to deposits ratio represents the portion of the equity as compared with
deposits, which is used to finance an efficient portfolio of the bank’s assets. The
equity to deposits ratio of NBP is showing an almost constant trend except in year
2007.

Equity to Assets Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Equity 75.817 81.954 116.337 102.459 119.556
Total
577.718 635.132 762.193 817.758 944,232
Assets
Ratio (%) 13.12 12.90 15.26 12.53 12.66
Equity ti Total Assets Ratio
20.00%
15.26%
15.00% 13.12% 12.90% 12.53% 12.66%
Value
10.00%
5.00%
0.00%
2005 2006 2007 2008 2009
Year
Comments:
The equity to total assets ratio tells about the financing portion of the assets through
shareholders equity. The equity to total assets ratio of National Bank of Pakistan is
showing a swing trend.

Gross Profit Margin
(In Billions)
Items 2005 2006 2007 2008 2009
Gross
32.585 41.688 47.026 52.228 17.441
Profit
Total
42.907 55.323 63.966 76.113 56.931
Income
Ratio (%) 75.94 75.35 73.52 68.62 30.34
Gross Profit Margin

75.94% 75.35% 73.52%
80.00% 68.62%
60.00%
Value
40.00% 30.34%
20.00%
0.00%
2005 2006 2007 2008 2009
Year
Comments:
The gross profit margin ratio measures the profitability of the firm’s products that
mean how efficiently a bank managed the products and services. The gross profit
margin ratio of National Bank of Pakistan is showing a downward trend.

Operating Profit Margin
(In Billions)
Items 2005 2006 2007 2008 2009
Operating
18.386 25.682 27.913 21.755 -17.741
Profit
Total
42.907 55.323 63.966 76.113 56.931
Income
Ratio (%) 42.85 46.42 43.64 28.58 -31.16
Operating Profit Margin

60.00%
42.85% 46.42% 43.64%
40.00% 28.58%
20.00%
Value
0.00%
2005 2006 2007 2008 2009
-20.00%
-40.00% -31.16%
Year
Comments:
Operating income shows the relationship between revenue earned from customers and
expenses incurred in producing this revenue. In effect, operating income measures the

profitability of a firm‘s core business operations. The operating profit margin ratio of
National Bank of Pakistan is going towards down.
Net Profit Margin
(In Billions)
Items 2005 2006 2007 2008 2009
Net Profit 12.709 17.022 19.033 15.458 18.211
Total
42.907 55.323 63,966 76.113 56.931
Income
Ratio (%) 29.62 30.77 29.76 20.31 32.00
Net Profit Margin

35.00% 29.62% 30.77% 32%
29.76%
30.00%
25.00% 20.31%
Value
20.00%
15.00%
10.00%
5.00%
0.00%
2005 2006 2007 2008 2009
Year
Comments:
The net income is to be the most important item for the shareholders. The amount
represents the increase or decrease in the owner’s equity resulting from all profit
directed activities during the period. The net profit margin of The National Bank of
Pakistan is showing a mixed trend of increasing with fluctuation.
Total Assets Turnover Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Total
42.0907 55.323 63.966 76.113 56.931
Revenue
Total
577.718 635.132 762.193 817.758 944.232
Assets
Ratio 0.074 0.087 0.084 0.093 0.060
Total Assets Turnover Ratio

0.093
0.1 0.087 0.084
0.074
0.08
0.06
0.06
Value
0.04
0.02
0
2005 2006 2007 2008 2009
Year
Comments:
This ratio tells about the management efficiency of using the firm’s assets to generate
the more income effectively. Total assets turnover ratio of The National Bank of
Pakistan is showing an up and down trend.

Return on Equity
(In Billions)
Items 2005 2006 2007 2008 2009
Net Profit 12.709 17.022 19.033 15.458 18.211
Equity 75.817 81.954 116.337 102.459 119.556
Ratio (%) 16.76 20.77 16.36 15.09 15.23
Return on Equity
25.00% 20.77%
20.00% 16.76% 16.36% 15.23%
15.09%
15.00%
Value
10.00%
5.00%
0.00%
2005 2006 2007 2008 2009
Year
Comments:
The return on equity measures the rate of return earned on the stockholder’s
investment. That mean stockholders placed funds at risk in the hope of earning a
suitable profit. The return on equity of The National Bank of Pakistan is showing a
fluctuating result.

Return on Assets
(In Billions)
Items 2005 2006 2007 2008 2009
Net Profit 12.709 17.022 19.033 15.458 18.211
Total
577.718 635.132 762.193 817.758 944,232
Assets
Ratio (%) 2.20 2.68 2.67 1.89 1.93
Return on Assets
3.00% 2.68% 2.67%

2.50% 2.20%
1.89% 1.93%
2.00%
Value
1.50%
1.00%
0.50%
0.00%
2005 2006 2007 2008 2009
Year
Comments:
The return on total assets indicates the efficiency with which management has used its
available sources to generate income. The return in assets (ROA) of National Bank of
Pakistan is showing a fluctuating trend.

Return on Advances
(In Billions)
Items 2005 2006 2007 2008 2009
Net Profit 12.709 17.022 19.033 15,458 18.211
Advances 268.838 316.110 340,318 412.986 475,243
Ratio (%) 4.73 5.39 5.59 3.74 3.83
Return on Advances
5.39% 5.59%
6.00%
4.73%
5.00% 3.83%
3.74%
4.00%
Value
3.00%
2.00%
1.00%
0.00%
2005 2006 2007 2008 2009
Year
Comments:
The return on advances ratio tells about how much advances are used to generate the
income for the bank. As advances is the main part of total assets and bear a difference
able interest rate from deposits. The return on advances of The National Bank of
Pakistan is showing a downward trend in last two years.

Debt to Equity Ratio
(In Billions)
Items 2005 2006 2007 2008 2009
Total
501.900 553.178 645.855 715.299 824.676
Liabilities
Total
75.817 81.954 116.337 102.459 119.556
equity
Ratio 6.62 6.75 5.55 6.98 6.90
Debt to Equity Ratio
8 6.62 6.75 6.98 6.9

5.55
6
Value
0
2005 2006 2007 2008 2009
Year
Comments:
The debt to equity ratio is a significant measure of solvency since a high degree of
debt in the capital structure may make it difficult for the bank to meet the interest
charges. Further, with a high debt position comes the risk of running out of cash under
condition of adversity. The debt to equity ratio of National Bank of Pakistan is
showing a fluctuating trend.
SUMMARY OF RATIO ANALYSIS

Sr. Ratio 2005 2006 2007 2008 2009 Evaluation
01 Current Ratio 0.25 0.27 0.25 0.24 0.21 Decreasing
02 Cash to Deposits 0.15 0.16 0.16 0.17 0.16 Almost same

Investment 31.28% 25.3% 32.69% 23.88% 26.39% Fluctuating
03
Ratio
Advances to 58.01% 63% 57.5% 66.08% 65.42% Fluctuating
04 Deposits
Deposits to 92.33% 90.76% 91.65% 87.37% 88.09% Fluctuating

05 Liabilities
Debt Ratio 87% 87% 85% 87% 87% Almost

06 Constant
Equity to 16.36% 16.33% 19.65% 16.4% 16.46% Almost same

07 Deposit Ratio
08 Equity to Assets 13.12% 12.9% 15.26% 12.53% 12.66% Fluctuating

Gross Profit 78.94% 75.35% 73.52% 68.325 30.64% Decreasing
09 Margin
Operating Profit 42.88% 46.42% 43.64% 28.58% - Decreasing

10 Margin 31.16%
Net Profit 29.62% 30.77% 29.76% 20.13% 32% Increasing

11 Margin with
Fluctuation
Assets Turnover 0.074 0.087 0.084 0.093 0.06 Decreasing
12 ratio
Return on 16.76% 20.77% 16.36% 15.09% 15.23% Fluctuating

13
Equity
Return on 2.20% 2.68% 2.67% 1.89% 1.93% Fluctuating
14
Assets
Return on 4.73% 5.39% 5.59% 3.74% 3.83% Up than down
15 Advances
Debt to Equity 6.62 6.75 5.55 6.98 6.90 Fluctuating

16 Ratio
Earning per 17.92 24.01 21.22 17.23 16.92 Decreasing

17 share (In Rs.)
HORIZONTAL ANALYSIS

HORIZONTAL ANALYSIS OF BALANCE SHEET
ITEMS 2005 2006 2007 2008 2009

ASSETS
Cash & Bal. with 100% 10.43% 33.25% 49.59% 62.69%
treasury bank
Bal. with other banks 100% 31.02% 11.13% 23.62% -8.43%
Lending to financial 100% 41.33% 31.82% 5.19% 20.29%
institutions
Investment-net 100% -10.85% 34.5% 8.81% 38.64%
Advances-net 100% 17.58% 26.59% 53.62% 76.78%
Operating fixed 100% 2.41% 174.19% 156.15% 165.98%
assets
Deferred tax assets- ----- ----- ----- 100% -4.44%
net
Other assets 100% 13.25% 29.46% 86.08% 147.76%
Total assets 100% 9.94% 31.93% 41.55% 63.44%
LIABILITIES
Bills Payable 100% 509.12% 305.59% 486.91% 510%
Borrowings 100% 33.66% 23.51% 362.03% 417.06%
Deposits & other a/c 100% 8.30% 27.72% 34.85% 56.98%
Liab. against assets 100% -20.41% 101.78% 51..98% 156.35%
subject to finance
lease
Deferred tax liab.- 100% -46.51% 14.23% ----- -----
net
Other liabilities 100% 13.19% 31.68% 68.78% 79.89%
Total Liabilities 100% 10.22% 28.68% 42.52% 64.31%
Net Assets 100% 8.09% 53.44% 35.14% 57.69%
REPRESENTED BY
Share Capital 100% 20.10% 38% 51.8% 82.16%
Reserves 100% 12.34% 27.66% 39.2% 83.59%
Inappropriate profit 100% 65.57% 134.06% 170.78% 216.67%
Surplus on 100% -24.29% 23.27% -44.76% -35.14%
revaluation of assets
Total Equity 100% 8.09% 53.44% 35.14% 57.69%
HORIZONTAL ANALYSIS OF PROFIT & LOSS ACCOUNT

ITEMS 2005 2006 2007 2008 2009

Mark-up / Return/ 100% 29.96% 51.62% 80.88% 131.35%
Interest Income
Mark-up/ Return/ 100% 32.1% 64.12% 131.4% 282.59%
Interest expenses
Net Mark-up/ 100% 29.02% 43.9% 58.56% 64.56%
Interest expenses
Provision against 100% 25.71% 93.03% 332.97% 351.35%
non performing
advances
Provision for 100% -388.54% -116.37% -116.37% 146.31%
diminution in the
value of
investments
Provision against ----- ----- ----- 100% 405.93%
off balance sheet
obligations
Bed debts written 100% -77.25% 72.96% ----- -----
off directly
Net Mark-up/ 100% 31.78% 36.69% 23.36% 26.68%
Interest income
after provision
Fee, Commission, 100% 24.73% 37.71% 60.93% 81.34%
and brokerage
income
Dividend Income 100% 68.27% 89.89% 67.53% 11.75%
Income from 100% 10.63% -13.5% 229.21% 151.17%
dealing in foreign
currencies
Gain on sale and 100% -14.37% 71.46% -71.05% 236.21%
redemption of
securities-net
Unrealized gain 100% 125.57% 1515.16% 186.26% 21.9%
(loss) on
revaluation of
investment
classified as hold
for trading
Other Income 100% 252.91% -17.14% 600.28% 210.51%
Total non- Mark- 100% 29.5% 44.21% 74.78% 102.56%
up/ Interest
Income
Administration 100% 19.8% 26.59% 61.93% 101.14%
expenses
Other provision/ 100% 108.72% -15.27% 277.11% 213.05%

written off

Other Charges 100% 229.6% -72.88% 822.95% 408.89%

Total Non Mark- 100% 18.74% 25.33% 69.84% 104.77%
up/ Interest
expenses
Profit Before 100% 38.07% 47.25% 20.7% 17.02%
Taxation
Taxation-Current 100% 21.55% 16.18% 64.42% 28.9%
Prior Year 100% -51.7% -64.37% ----- 276.19%
Deferred 100% -78.72% 11.14% -1548.46% 243.28%
Profit after 100% 33.93% 49.76% 21.63% 43.29%
Taxation
Unappropirate 100% 77.97% 194.66% 316.57% 381.9%
profit brought
forward
Transfer from ----- ----- 100% 234.44% 217.72%
surplus on the
revaluation of
fixed assets on
account of
incremental
depreciation
Profit available 100% 54.25% 116.78% 158.25% 200.03%
for appropriation
VERTICAL ANALYSIS
VERTICAL ANALYSIS OF BALANCE SHEET
ITEMS 2005 2006 2007 2008 2009

ASSETS
Cash & Bal. with 12.32% 12.38% 12.45% 13.02% 12.27%
treasury Bank
Bal. with other 5.37% 6.4% 4.52% 4.69% 3%
banks
lending to financial 2.82% 3.62% 2.82% 2.09% 2.07%
institutions
Investment- net 27.17% 22.03% 27.7% 20.89% 23.05%
Advances-net 46.71% 49.77% 44.65% 50.5% 50.33%
Operating fixed 1.64% 1.52% 3.40% 2.96% 2.66%
assets
Deferred tax assets- ----- ----- ----- 0.39% 0.32%
net
Other assets 4.14% 4.27% 4.07% 5.45% 6.28%
Total Assets 100% 100% 100% 100% 100%
LIABILITIES
Bills payable 0.30% 1.67% 0.93% 1.25% 1.125%
Borrowings 1.52% 1.84% 1.42% 4.95% 4.79%
Deposits & other 80.22% 79.02% 77.66% 76.42% 76.94%
A/C
Liab. against assets 0.0002% 0.0002% 0.0004% 0.0003% 0.0004%
subject to finance
lease
Deferred tax 0.77% 0.37% 0.67% ----- -----
liabilities-net
Other liabilities 4.07% 4.19% 4.06% 4.85% 4.48%
Capital Share 1.02% 1.12% 1.07% 1.10% 1.14%
Reserves 2.31% 2.18% 2.07% 2.44% 2.40%
Inappropriate profit 3.35% 5.05% 5.95% 6.41% 6.50%
Surplus on 6.61% 4.55% 6.17% 2.58% 2.62%
revaluation of
assets
TOTAL 100% 100% 100% 100% 100%
LIABILITIES &
EQUITY
VERTICAL ANALYSIS OF PROFIT & LOSS ACCOUNT

ITEMS 2005 2006 2007 2008 2009

Mark-up/ Return/ 78.52% 79.15% 79.06% 80.07% 136.92%
Interest Income
Mark-up/ Return/ 24.06% 24.64% 26.48% 31.38% 69.36%
Interest Expenses
Net Mark-up/ 54.47% 54.50% 52.57% 48.69% 67.55%
Interest Income
Provision against 5.70% 5.56% 7.38% 13.92% 19.40%
non-performing
advances
Provision for 0.57% -1.28% 0.06% 0.49% 1.06%
diminution in the
value of
investments
Provision against ----- ----- ----- 0.0005% 0.04%
off balance sheet
obligations
Bed debts written 0.05% 0.001% 0.05% ----- -----
off directly
Net Mark-up/ 49.29% 50.22% 45.19% 32.27% 47.05%
Interest income
after provision
Fee, Commission, 11.48% 11.11% 10.6% 10.41% 15.69%
& Brokerage
income
Dividend Income 4.01% 5.23% 5.10% 3.78% 3.37%
Income from 2.81% 2.41% 1.63% 5.21% 5.32%
dealing in foreign
currencies
Gain on sale and 3.18% 2.11% 3.66% 0.52% 8.07%
redemption of
securities-net
Unrealized gain -0.0004% -0.0008% -0.05% 0.0002% 0.0004%
(loss) on
revaluation of
investments
classified as hold
for trading
Other income 0.41% 1.13% 0.23% 1.64% 0.97%
Total Non mark- 21.89% 21.98% 21.17% 21.57% 33.42%
up/ Interest
income
Administration 26.15% 24.3% 22.21% 23.87% 39.65%
expenses
Other provision/ 0.46% -0.03% 0.26% 0.98% 1.09%
written offs
Other Charges 0.15% 0.38% 0.03% 0.77% 0.56%
Total Non Mark- 26.76% 24.64% 22.5% 25.62% 41.3%

up/ interest
expenses
Profit before 44.41% 47.56% 43.87% 30.22% 39.17%
taxation
Taxation-current 16.67% 15.72% 13% 15.45% 16.2%
Prior Year 2.56% 0.96% 0.61% ----- 7.26%
Deferred 0.68% 0.11% 0.51% -5.54% 1.76%
Profit after 29.62% 30.77% 29.75% 20.31% 32%
taxation
Unappropirate 25.37% 38.02% 50.14% 59.57% 92.14%
profit brought
forward
Transfer from ----- ----- 0.06% 0.17% 0.22%
surplus on
revaluation of
incremental
depreciation
Profit available 54.98% 65.78% 79.96% 80.06% 124.35%
for appropriation
Total Revenue 100% 100% 100% 100% 100%
HORIZONTAL ANALYSIS OF FINANCIAL STATEMENT

Horizontal analysis is used to evaluate the trend in the accounts over the years.
Through horizontal analysis, it is relatively easy to identify areas of wide divergence
that required further attention.
Comments on Balance Sheet
 The liquidity position of the bank is going on increasing as compared to last

years that could pay short term liabilities on time.
 There is a deteriorating trend in balance with other banks and become negative
in year 2009.
 The percentage of lending to other financial institution is decreasing up to year
2008 then bank focused attention to increase it in year 2009.
 There is a huge fluctuation in investment area which can disturb the bank non
mark-up/ return/ interest income.
 The advances are increasing year by year which is a good sign for bank
because it produced large amount of mark-up/ return/ interest income.
 Bank is looking for increasing its fixed operating assets to expend its
operation.
 Other assets and total assets of the bank are increasing year by year which is a
good sign for bank.
 Bills payable decreased in the year 2007 but in subsequent years it is
increasing.
 Borrowings is consistently increasing year by year that can become a large
part of income generating but can disturb the income for shareholders.
 The deposits area of bank is showing a good performance that reflects the
good relations of bank with customers.
 Total liabilities of bank is showing good performance and increasing
consistently because it is phenomenon in banking sector, more liabilities more
income.
 Share capital and reserve is showing a positive trend in every following year
that is a good sign for bank and shareholders.
Comments on Profit & loss Account

 The mark-up/ return/ interest earned and expenses are increasing year by year
which is a positive sign for bank, also for shareholders. Increase in mark-up/
return/ interest expenses reflect the customer caring attitude.
 Provision against non-performing advances is increasing yearly but the bed
debts are going towards down whereas these are zero in year 2008 and 2009.
 There is an up and down trend in fees, commission and brokerage income.
 There is a negative trend in dividend of non mark-up and interest income.
 Income from dealing in foreign currencies is looking good.
 There is a positive improving trend in total non mark-up and interest income
which reflect good dealing in financial services.
 The administration expenses and other charges are increasing that is a
negative sign for bank.
 The income before tax is increasing yearly is a good sign for bank.
 There is an up and down trend in profit after tax which reflect tax liability of
the bank.
 Profit available for appropriation is increasing every year showing a positive
trend and it is better for bank, also for shareholders.
VERTICAL ANALTSIS OF FINANCIAL STATEMENTS

In vertical analysis, a significant item on financial statement is used as a base value

and all other items in the financial statement are compared to it. In performing vertical
analysis for balance sheet, total assets are assigned 100%. Each asset account is
expressed as %age of total assets. Total liabilities and shareholder’s equity is also
assigned 100%. Each liability and equity account is then expressed as a percentage of
total liabilities and equity. In the profit and loss account, the total revenue is assigned
100% and each account is expressed as a %age of total revenue.
Comments on Balance Sheet
 The portion of cash and balance with treasury bank is some what how same
but high only in the year 2008. This show that bank feels comfort in paying
short term liability at this portion.
 The portion of balance with other banks in the total assets is going towards
down which reflects little collaboration with other banks.
 The portion of investment in the total assets is fluctuating year to year that
reflects poor management in that area.
 The portion of advances in the total assets is near about to 50% in every year
that show positive sign, as it is a main source of bank earning.
 The portion of bills payable is high in year 2006 but after that it is going
towards down.
 The portion of borrowings in total liabilities is increasing every year as

compared to last year.
 The portion of deposits is dominated in total liabilities reflects a positive

sign, as it become main source of advancing loans.
 The portion of equity in total liabilities and equity is increasing every year
and highest in year 2008.

Comments on profit and loss account
 The portion of mark-up/return/interest earned in total revenue is increasing

every year which is positive sign for bank and shareholders.
 The portion of mark-up/return/interest expenses is increasing with small
digits but it is very high in year 2009.
 The portion of net mark-up/return/interest income after provision in total
revenue is almost same in every year except in year 2008.
 The portion of non mark-up/interest income in total revenue is at same level
but high in year2009 which reflects good management of bank in modern
banking services.
 The portion of non mark-up/interest expenses in total revenue is increasing
which can disturb bank income.
 The portion of profit after tax in total revenue is increasing which is a
positive sign for bank.

COMPETITIVE ANALYSIS OF NBP VS OTHERS BANKS
(IN BILLIONS)
ITEMS NBP ABL MCB UBL HBL
SHARE
10.763 7.110 6.911 11.128 9.108
CAPITAL
TOTAL
944.232 418.374 509.223 640.449 820.981
ASSETS
ADVANCES-
475.243 237.344 253.249 349.715 432.283
NET
INVESTMENTS
217.642 94.789 167.134 137.734 209.421
DEPOSITS
726.464 328.875 367.604 503.831 635.452
MARK-UP/
RETURN/
INTEREST 77.947 41.121 51.616 61.495 74.751
EARNED
NON MARK-
UP/ RETURN/
INTEREST 19.025 5.958 5.642 12.320 9.942
INCOME
PRE TAX
INCOME 22.300 10.536 23.154 14.392 19.485
AFTER TAX
INCOME 18.211 7.122 15.495 9.487 12.298
EARNING PER
SHARE 16.92 10.02 22.42 8.56 13.50

COMMENTS ON ORGANIZATIONAL ANALYSIS
There are so many banks are listed in banking sector of Karachi stock exchange. But
NBP, MCB, HBL, UBL & ABL are foremost and major banks of the country.
National Bank of Pakistan is showing better performance in the banking sector, in
spite of government owned institution.
NBP has an effective assets management and has large value of total assets as
compared to other banks. The advances and investment of NBP also showed high
values as compared to other banks. That reflects the part of the bank in the economic
development and money & capital market development of the country.
The total revenue of NBP is higher than other bank but the profit after tax and
earnings per share is lower than other banks. So the banks unable to produce an
effective and reasonable income for the stakeholders, that is due to high political
influence and awarding loans for the non productive activities.

SWOT ANALYSIS OF
NATIONAL BANK OF PAKISTAN

STRENGTHS
 National Bank of Pakistan one of the largest financial institutions of Pakistan
with nine million customer base National Bank of Pakistan holds 25.6 shares
of time and demand deposits in the country. Local currency deposits comprise
67% of bank's total deposits while foreign currency deposits for the rest.
 National Bank of Pakistan has extensive domestic branch network of 1287

(according to the latest data) branches located all over the Pakistan. The bank
also has a presence in 19 international locations including the USA, United
Kingdom, Europe and Far East.
 National Bank of Pakistan's total assets stood at Pak Rs. 370 billion on
December 2000. This included total earning assets of about Pak Rs. 286
billion with loan portfolio of Pak Rs. 140 billion. The bank also has an
investment portfolio of Pak Rs. 91 billion which comprises treasury securities,
corporate bonds, shares and other securities.
 National Bank of Pakistan cash provision as percentage of non performing

loans equal to 60% this coverage factor for the non performing loans is the
highest amongst the nationalized commercial bank.
 National Bank of Pakistan is working as right arm government of Pakistan as

it is responsible for the claims of government for the recovery as well as
payment security is guaranteed by government of Pakistan.
 It acts as an agent of the Central Bank wherever the State Bank of Pakistan
does not have its own branch.

WEAKNESSES
 National Bank of Pakistan's staff especially at lower level considers their work
as burden. They usually waste time in other task a part in performing their
duty. Using government property for their own need. They are reluctant to
accept change brought by latest restructuring efforts.
 The general outlook and interior layout of branches are not as required
according to modern banking.
 National Bank of Pakistan bearing up large burden in running those branches

which are not producing any income but keep on adding expenditure.
 National Bank of Pakistan is relying on its traditional sources of income it has

not taken benefit from innovation in banking like introducing retail banking or
consumer banking and using any type of scheme to generate more deposits
and producing more advances. Furthermore don't even continue its credit card
due mismanagement and lack of control.
 National Bank of Pakistan is far behind in offering modern banking facility

like Automate Teller Machines than other commercial bank in Pakistan as
only eighteen branches in all over country have this facility.
 Customers have to follow long lengthy procedure for opening of account as

well applying for debt, which discourage most of the people to invest in NBP.
 In NBP, most of the time merit not has importance in hiring of employees.
Such practices are black spot on the face of bank and resulted big losses any
fraudulent acts by NBP own employees
 GOVT. ORGANIZATION
NBP is Govt. Owned organization that is why every Govt. has strong impact on its
operations to the other banks. So in this sense it is lowest in rank.

 LACK OF IMPLEMENTATION OF RULES AND REGULATION

Because it is govt. owned organization so the rules and regulation are not
implemented by the employees.
 RECRUITMENT POLICY
In NBP employees are recruited on the basis of nepotism, political favoritism or

through other tools of corruption.
 POOR WORKING CONDITION
Despite, culture change program the working condition of the NBP is not up to
standard.
 IRREGULARITIES IN PROMOTION
In NBP there is no smooth and continuous promotion system. Unfair means are used
in order to get the promotion especially the promotion of the managers.
 ADVANCES AGAINST THE NON PRODUCTIVE INVESTMENT
In NBP loans are extended to non-productive investment on political basis.
 LESS USE OF COMPUTER
In NBP there is very less use of computer for maintaining the records of the branches
as compared to other banks of the country.
 ORGANIZATIONAL STRUCTURE
In this organization the organizational structure is bureaucratic which a barrier in
rapid and effective decision making.
 STRONG UNION
Union has strong impact on performance of NBP. So the top management is unable to
punish the violators and shrieks.
OPPORTUNITIES

Reorganizing efforts going in the National Bank of Pakistan has open many
opportunities for NBP to grow. NBP current management has boarder vision. They
have taken steps to improve customer services, streamline internal procedure and
creating a delectating climate for technology initiative.
To achieve above mention objective they have created operation group.
 Starting of the retail banking initial working.
 Setting of target for making at least 300 branches country wide online.
 Closing of all branches which are burden on NBP.
 Management to offer specialized services to major corporate including

advisory and debt syndication introduces the concept of relationship manner.
 Comprehensive training programs has been develop to upgrade the core

banking skills of the existing staff as well as integrate high quality hiring.
 To improve the motivation of staff a merit-based culture is being promoted.

Through overhauling the manpower recruitment preservation and performance
appraisal system.
These actions taken by the current management provide a great opportunity for NBP
for making it future prosper and can make NBP not less than any modern
commercialize bank in Pakistan.
THREATS
Following are the major threats which National Bank of Pakistan is facing:
 Major threats NBP facing is from its competitors especially from

denationalized commercial bank. In which Meezan Bank like introduce the
digital attendance and fully air conditioned environment to gain the
concentration of the customers.
 Retail banking and consumer banking resulting in products such as credits

cards, housing finance and automobile finance lending to small individual
customers, and purchases of automobiles, housing, and consumer goods are
generally made on a cash basis. These are causing another threat, if not
counter will result significance loss of customers.
 Recently banks and other financial institutions have introduced innovative

schemes to attract deposits, like gift cheque scheme by MCB. These schemes
offers prizes on short and long term fixed deposits through lucky draws.
 Now banks are using technology which covers distance no matter how far
away any one through satellite based, on-line real-time banking system and by
offering telephone banking, electronic funds transfer, E-banking and other
modern facilities.
FUTURE PROSPECTS OF ORGANIZATION
Following are some specific future prospects of The National Bank of Pakistan.

ISSUANCE OF BONDS
To enjoy with large amount NBP can introduce a comprehensive range of bonds.
ADVISORY SERVICES
NBP can establish advisory service division in order to facilitate the customers in
investing in the securities.
ESTABLISHMENT OF NEW BRANCHES

The bank by establishing the new branches in foreign countries can expand business
and can enjoy with the profit.
NIGHT BANKING
Despite of poor customer service of NBP, people still come to NBP because of Govt.
ownership as people feel it secure therefore bank improve its deposit by giving
facility of night banking and also can compete its competitors with positive steps.
INVESTMENT IN THE FOREIGN CAPITAL MARKET

The NBP can enjoy hand some return and diversify its funding base by investing into
capital markets of other countries. So it will enable it to establish name, recognition in
the world.
INVESTMENT BANKING
Until recently the bank perceived as purely commercial banking entity so in order to
expand its business the bank may starts investment banking by investing in the
portfolio of hands some return.
CONSUMER BANKING
The basic need of the consumer such as housing, transportation and other durable
goods are not adequately financed by the banks. So by initiating these services the
bank can enjoy with more funds.
CONCLUSION
The National bank of Pakistan is proving as one of the leading public sector
bank in country. Even while it has a large number of competing banks (both local and

foreign) in its banking field. National bank of Pakistan has proved its excellence in
the banking field due to its rigor designed banking strategy and use of modern training
and development techniques which took the bank at the present stage, where it has
acquired A class banking standard in the country. The bank has proved its
professional excellence due to organizational development and training, which has
become proactive in the journey of change and transformation initiated in the bank.
As an agent of change, training really mobilized the human capital of the bank for the
better future and present going projects' results. The bank is developing the core
competencies and capabilities fits employees for peak performance through training.
The basic values of the training program of the NBP's training program is that the
core and main focus of the t4aining is in terms of customer focused training of the
employees, to initiate team work amongst the training programs should be clear and
transparent and could be easily measured which will in return lead the employee
towards betterment of their efficiency level through a continuous process of
organizational training and development of organizational employees. The process of
training and development of organizational employees at National Bank of Pakistan
has become proactive process of leading toward building the competencies and
capabilities of the workforce for the organizational effectiveness through partnership
with users, the rightly directed links to the business objectives, the assessment of the
performance effectiveness and with help of preparation of work environment to
support training. The main goal of training and development process at NBP is to
enhance the productivity of employees, ensure the need based quality training and to
develop tainting infrastructure at national bank of Pakistan at departmental level
throughout organization. With help of its excellently designed training and
development program, the NBP is creating awareness of the power of the training
within employees of the organization, changing the traditional mindset of the
employees, building readiness of the employees to change with customer focus and
reshaping the attitude and competencies of the employees. With such an excellent
network of training, comprising upon four staff colleges and other institutes, the
training and development program of NBP is creating some extra opportunities for its
employees. The whole workforce at NBP is getting benefited through the training and
development program. In the present era of tough competition and fast growth, NBP
is proving to as an agent of change and successful initiator in the banking sector of
Pakistan. At the moment NBP is offering a tough time to its entire local and foreign
competitors with its highly trained and skills equipped workforce, which has all the
abilities to make the bank touch the skies of success.
SUGGESTIONS & RECOMMENDATIONS

 National Bank of Pakistan major fault is that wasn’t keep its pace with on
going changing in banking industry unlike other bank. Now this bank
combining all it power and trying to approach other banks.
 Latest reorganizing efforts are necessary to make it cost effective also making
its facility accordingly to modern banking. These must continue.
 Bank management has to put its all efforts to change the prevailing culture of
the bank and to put the foundation stone of business oriented culture in which
employees give important to the bank and its consumers.
 To attract the customer in the future NBP have to make extensive efforts to
facilities of retail and consumer banking. Plus the technology in the banking
which will be necessary for future banking is another week area need to be
stressed.
 The outlook and interior layout of the branches is another thing which needs to
be improved.
 The procedure of taking services from the bank must be made easier and
straight forward not involving long difficult procedure for simple task.
 Bank should try to get rid of the political influence to be able to compete in the
industry with prudent and strong policies.
 The undue reliance on the public sector be minimized and ventures of private
sectors should be taken as well.
 Redefining of rules, regulations and policies should be made implemented at

all costs.
 Efforts of great importance to be made for the over the counter services of
general banking making it more simple and faster to get a better response of
the customers.
 The behavior of the employees especially on the counter has to be strictly

monitored and checked.
 The still existed bureaucratic approval system has to be demolished.
 All advances should be made by getting the maximum security and should
focus on productive work.
 Better and comprehensive long-term and short-term planning should be made

to forecast the future needs.
 There is a possibility of establishing a task force to ascertain the effectiveness

of the policies being implemented.

 The Bank should develop a comprehensive recruitment policy to make only

the competent ones to be on the job.
 There is a still a vast pool of incompetent employees that has to right sized.
 There is a lack of promotional element in the planning and budgetary

decisions of the Bank that has to think seriously.
 All branches of the Bank should be computerized for increasing the

effectiveness and efficiency of its employees.
 Efforts should be continued to keep the powers of employees union to the

minimum, like the current situation.
 Promotions must not be delayed and should be made on time to further

increase the commitment and efficiency of the employees.
 These and many others that can make a good set of recommendations, which
have to be made possible to escape from the threats and weaknesses and the
risks in environment that surrounds the Bank. The management do considers
the policy matters that are not helping the Bank, but are still in practice due to
the absence of prudentially regulated system to protect them and the Bank.
 Efforts have been made with serious concern to give NBP a status that it has to
maintain by having practices of:
 Right sizing of the employees.

 By closing unprofitable branches.
 By introducing a merit based selection criteria.
 Promotions made conditional with qualifications.
To remain in the market bank need to be vigilant in the eyes of customer. One way is
through promotion efforts, so that people aware about he services of the banking and
any addition which the bank as made in the portfolio of its services.

REFERENCES
 Annual Report, National Bank of Pakistan for the year 2005.

 Website National Bank of Pakistan www.nbp.com.pk.
 NBP Bi-Monthly Economic Bulletin for the Month of July-August 2010.
 NBP Industry Newsletter Tracker for the Month of July, August & Sep 2010.
 Website Karachi Stock Exchange (KSE) www.kse.com.pk.

 Commercial Bank Management By Peter S. Rose.
 Financial Management By Van Horne & Wachowicz.
 Managerial Finance By Jae K. Shim & Joel G. Siegel
MANAGERIAL FUNCTIONS IN NBP
1. Planning
Administrative Planning
In NBP this planning is the task of management. It is concerned with the
means by which ends can be brought to fruition.
Responsible for formulations and implementations of administrative planning
and polices, co-ordination with other branches, overseeing administrative services,
formulations of NBP employees services rules and amendment in the rules as and
when required. Implementation of directors received from the government, t arrange
centrally insurance of all NBP assets/properties and realization of Insurance Claim in
case and against NBP in various courts of Pakistan and to deal with NBP Unions.
The administrative planning in the NBP is divided into the following categories:
 Policy making
 Program planning
 Operational planning
Policy Planning
It is concerned with laying down broad outlines of administrative action in

socio economic field. It also includes the objectives of administrative action. In the
policy planning in the NBP, these are responsible for training of staff within the
country and abroad, dealing with the delegations, responsible for deputing officials
for seminars, workshop symposia, conferences, meetings.
Program Planning
In NBP the program planning is the task of middle management. The main
project of the NBP was approved in 1981 with an estimated cost of Rs. 33.9 million
from the Government, whereas NBP had to contribute Rs. 9.7 million in the form of
old/used equipment.
Operational Planning
It means that implementation of the programs and policies. It is concerned

with the systematic analysis of a program and determination of the detailed means
carrying it out.
Planning Function in National Bank of Pakistan
All the planning at the company is done at top management level. If the
company wants to makes any plan for the company, then the top management makes
the entire plan for the company. At first company make its goals and then with these
the owners of the company make the mission and then they develop plans for
achieving the goals of the company. The company already satisfied its present
position and sales and it did not want to increase it so early but if there is any problem
or declining in sales, then the company makes the plans and tends the employees to
implement those plans and participate in achieving the organizational goals. All the
plans are made by top management and then the mangers implement on these plans
and they also supervise the employees and give their performance report to the top
management and the top management allows the managers if any necessary steps
should be taken in achieving the organizational goals.
2. Organizing
Chain of Command
An unbroken line of authorities that links all individuals in the organization

and specify who report to whom. In NBP unity of command is used. It means that
each employ is held accountable to only one supervisor.
Responsibility
The duty to perform the task or activity an employ has been assigned is called
the responsibility. Efficiently utilization of available personnel is indicated by the

productivity rates over period of time. Every employee has responsibility to work for
the organization. As result organization achieves the goals efficiently and effectively.
Accountability
Accountability means that the people with authority and responsibility are
subject to reporting and justifying task outcomes to those above them in the chain of
command.
Performance evaluation of public enterprise is a new but an interesting field
and requires creativity and innovation. In view of the phenomenal growth of public
investment in them, it goes without saying that it is a must. It not only seeks to ensure
the desired degree of accountability but also helps the management in taking timely
corrective action and aids the government which is concerned mainly with the
efficient utilization of its scarce resources.
Internal Audit
 Account department
 Hierarchical task analysis
1. Account Department
NBP have establish a separate department to deal with account and this
department is responsible for monitoring, keeping the accounts book and records all
the transactions taking place in the bank. The department is not supposed to make any
payment unless it is authorized by operation mangers and signed by the chief manger
of the branch. This procedure minimizes the chances of fraud.
2. Hierarchical task analysis
NBP has divided its tasks into departments and the task of each department
also divided into sub-tasks. By dividing of task, NBP have formed a chain of
command by which each employee is held responsible for the work he/she does by
his/her supervisor. All decisions are centralized thus the top management makes the
decisions and all the others follow these decisions.
External Audit
A.F. FERGUSON & CO. audits the financial statements, which are prepared
by the account department of NBP. They examine the financial statements and upon
their findings they prepare a report which is presented to the board of directors. This
report will indicate whether the financial statements reflect the true picture of NBP or
not.
Organizing Function in National Bank of Pakistan
The company organizes its employees in such a way that help them best to
achieve its goals and the major goal of the company is to increase the sale. The

company has two work shifts so that there is not much burden on the employees. The
company organizes the time after discussing with employees. The company uses all
its resources to organize in a better way. The company organizes both human and
non-human resources to in ways that enable plans to be achieved successfully. The
organizing function helps the organization by promoting the valuable tools for
fostering innovation and facilitating needed changes. The manager do major work of
organizing in done by the top management and the rest. The manger makes the
organization chart and company makes the necessary changes and often then approve.
The mangers have to task for the top management if he wants to take any important
decisions other than routine. Then the most of the impact at the organization is that
there are very low or high management layer and there is very even authority is given
to the lower or middle management.
3. Controlling
The systematic process through which mangers regulate organizational activities to

make them consistent with expectations established in plans, targets, and standards of
performance.
Organizational Control
In NBP, the control of organization can control on events before, after and
during a process. There are three types of control which is made in the NBP. These
controls are as following.
 Feed forward control

 Concurrent control
 Feed back control
Feed forward control
In NBP feed forward control is done that focuses on human, material, and
financial resources flowing in to the organization.
Feed Forward Control
Inputs
Concurrent Control

This control in the organization consists of monitoring ongoing activities to

ensure they are consistent with standards. This includes rules and regulation of
guiding employee tasks and behavior.
Concurrent Control
Adaptive Culture
TQM
Employee Self Control
Ongoing Process
Feed Back Control
This is the control that focuses on the organization's output. In this control the
quality of an end product or services. In the feed back control a simple process is used
in the NBP. This process is as follows
 Establish standards of performance

 Measure of actual performance
 Compare performance to standards
 Take corrective actions
 Feed back
 Establishing new strategic goal
Feed Back Control
Analyze sales per employee

Final quality inspection
Survey Customer
Output

4. Leading
Leading is the ability to influence the people toward the organizational goal
and the goal of the organization achieved effectively and efficiently. For this purpose
all the employees in the organization should be motivated through different types of
incentives which are given to the employees. To complete purpose there should be a
good leader which performs this task.
"Leadership is the lifting of people's vision to higher sight, the rising of their
performance to higher standards, the building of there personality beyond its normal
limitation".
Style of Leadership
There are generally three types leadership of leadership style:
 Authoritarian (Autocratic)
 Participative (Democratic)
 Delegation (Free Region)
Leadership Style of National Bank of Pakistan
Leadership style in NBP is Autocratic according to the requirement of the

organization. All decisions are taken by the leader of the group with the objective of
keeping check in the system and process. This relationship between the subordinates
and leader or manager is simply an extension of the management style of the NBP
which can be define as the limited form of often of open door management, here the
upward communication is allowed infect encouraged by the management in case of
any productive or results oriented interaction.
Role of Leadership
In NBP the section manger or the department head acts as the figurehead of
his/her group. He/she tries to acts as a role model for his team, takes his/her team with
his/her in tries to understand their problems and stress. Leader acts as the disturbance
handler and problem solver for his/her team and takes all the responsibility of the
good and bad activities as they are done by his correspondence and under his
authority, because they are representative or ambassador of their group.
5. Employee Motivation
Motivation
"The force moves people to initiate, direct and sustains behavior and action".
Motivation refers to the force that energizes, direct and sustains a person's efforts. The
motivation is act as a catalyst, which increases the performance of the employees by
working more effectively and efficiently.
Motivation at NBP

For motivating its employees, NBP provides different types of rewards incentives and
other intangible motivating elements. Two types of the motivation methods are used
for motivation.
The NBP management has always given high priority to this vital aspect. The
management has offers the following package to its employees:
 Increase and regularly revised pay scale.

 Training to their employees.
 Promotion according to merits.
 Financial assistance to their employees.
 Fringe benefits.
 Branch ceiling deposits competition.
This package has motivated the employees to work hard and already the result has
been seen as its financial strength of the bank has improved.
Intrinsic Motivation
This kind of motivation is done through
 Team building
 Job rotation
 Creating a challenging environment
Extrinsic Motivation
It is reward base motivation, which may be economic or non-economic

rewards. For career growth and development, training is given to the employees
periodically. Besides this, a reasonable pay is given with increment based on
employee's performance.
HUMAN RESOURCE ADMINISTRATION
Human resource or personnel administration is the process consisting of the

inception, training, development, motivation and maintenance of human resource.
This process is very important in any organization. NBP has created a separate
department to take care of all activity of inception, development, motivation, and
maintenances its employees.
1. Recruitment
The NBP's policy of recruitment is very simple, if at any time there is a

vacancy, due to retirement, resignation, if employees opted for the golden handshake
or the death of an employee, the management of branch will inform the head office
about the vacancy. The head office will place an advertisement in all major newspaper
with the all necessary information required to be furnished by the applicant.
2. Selection

NBP head office will collect all applications received from the applicants and
forward them to the personnel administration department for scrutinizing and short
listing the applications for the purpose of interviews and other tests conducted by this
department. The final list will be sent to the head office, which informs the applicants
to report for the interview. The interview is conducted by the top management level
and the successful candidates will be called to join the work force of NBP.
3. Training and Development
The NBP has, all along, given special importance to the aspect of training and
career planning of its staff members. Towards this main objective, several training
courses have been organized, initiating a self development process, in order to
accelerate organizational growth and to farther improve the Bank's level expertise and
efficiency.
An initial six-nine months training is given to all new employees on the
banking procedures to prepare them for whichever work they would be posted to do.
In 1997, a total of 310 courses were conducted in-course which covered a wide
variety of topics, related to banking, customer services and management. The NBP
executive development center set up in November 1995, focused on development and
grooming of executives. Eminent scholars and specialists were invited, during 1996,
to apprise executives of new concepts and techniques, to keep in abreast of the
constant changes taking place locally and globally. A total of seminars were held in
1996, in which 516 executives participated.
4. Promotion
Promotion in NBP is based on merits and qualification. The recommendations

for promotion are given by the management of different branches through their
Annual Character Report, which is prepared annually by the chief manger of the
branch and forwarded to the Head Office.
5. Staff Retirement Benefits
The NBP operates the following schemes for its employees:
 Old Scheme
 New Scheme
 Old Scheme
For employees who did not opt for the new scheme the bank operates following:
A. Approved contributory provident fund, and
B. An approved gratuity scheme.
 New scheme
For new employees and for those who opt for the new scheme introduced in 1975 for
clerical staff and in 1977 for officers the bank operates the following:
1. An approved funded pension scheme for which monthly contributions are
made.
An approved non-contributory provident fund introduced in lieu of the contributory
provident fund. NBP recently has offered Golden Handshake to its employees. Those
who opted for this package will be compensated.


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Internship Report on National Bank of Pakistan

Introduction of the National Bank of Pakistan

M.com Evening A Session (2010-2012) Page 1

M.com Evening A Session (2010-2012) Page 2

Core Values of National Bank of Pakistan

Goals which National Bank wants to achieve

To enhance profitability and maximization of National Bank of Pakistan share

M.com Evening A Session (2010-2012) Page 3

Overview of National Bank of Pakistan

History of National Bank of Pakistan

M.com Evening A Session (2010-2012) Page 4

M.com Evening A Session (2010-2012) Page 6

 Finance available for home purchase, home construction, and home

M.com Evening A Session (2010-2012) Page 7

 Loans available up to maximum of Rs. 10 millions (home purchase up to 7.5

 20 months’ salary in advance (certain condition apply)

 Facility of Rs. 3000 against every1 Gm of gold.

 Loans available for farmers for production, development purposes, for

 Markup rate is 12%.

 6% will be paid by the Government and remaining by the customer.

 Type of loan may be production, development, farm sector.

Product features are as follows:

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Eligibility for the product

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ORGANIZATIONAL STRUCTURE OF NATAIONAL

Operations Regional Branch

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Reorganized organizational structure

Structure of National Bank of Pakistan (Ahmed pur East: 302)

Mr.Waseem Akhtar Mr. Hanif Sb

Abdul Shahzad Nadir shah

Mushtaq Ahmed Nadir hussain shah

Mr. Saeed Ahmed Iyaz Hussain

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Main Head Offices Located in Pakistan

Branch Network & Infrastructure

TOTAL BRANCCHES 1,283

ISLAMIC BANKING BRANCHES 06

ONLINE BRANCHES 1282

TOTAL ATM MACHINES 203

CUSTOMER FACILITATION CENTRE 06

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Grade / Rank Structure of the Bank Employees

Clerical Staff Non-Clerical Staff

Technical Staff Dispatch Rider

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Analysis and Comments on Organizational Structure of National

Departments in National Bank of Pakistan Branch

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Advances provided by the Bank are of following two types:

Local Short Credit (LSC)

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2. A credit voucher is filled in order to get the exchange commission &

Parties involved in the Demand Draft

TELEGRAPHIC TRANSFER (TT)

Pay Order (PO):

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Cash payment book

Books use in NBP

 Term deposit vouchers.