Internship Report on

NATIONAL BANK OF
PAKISTAN
Air Headquarter Branch Peshawar

Submitted By:
FATIMA IFTIKHAR
MBA (Finance)

INSTITUTE OF MANAGEMENT STUDIES

UNIVERSITY OF PESHAWAR
Session 2007-2009
An Internship Report On: National Bank of Pakistan

Internship Report on
NATIONAL BANK OF
PAKISTAN
Air Headquarter Branch Peshawar

Internship report submitted to the Institute of

Management Studies, University of Peshawar in Partial
fulfillment of the requirements for the Degree of masters
in Business Administration (Finance)

INSTITUTE OF MANAGEMENT STUDIES

UNIVERSITY OF PESHAWAR
Session 2007-09
An Internship Report On: National Bank of Pakistan

INSTITUTE OF MANAGEMENT STUDIES

Internship Report on
NATIONAL BANK OF
PAKISTAN
Air Headquarter Branch Peshawar

Supervisor:
Signature: ________________________

Name: Prof. Tanveer Abdullah

Designation: Coordinator

Organization: Institute of Management

Studies

University of Peshawar
An Internship Report On: National Bank of Pakistan

PREFACE
Keeping pace with time is the key to success, left behind means alot.
Commerce is a fast moving subject. The persons who are engaged in
business and those who are to enter in this profession must acquaint
themselves with the fundamentals and new development of Business
organization and Management.

This report is an essence of my degree requirement and without writing

report the whole training process will end in smoke. Computation and
purification of data become fruitful when it comes in the shape of
information. It is very hard to convert data into information, it requires
wide span of time, but still it was a great experience for me to have a
feel of the practical world and keeping in view the limitation of the
study. This seems reasonable attempt.

Since banking wide spread profession, it is impossible to jot out each

and every function, so I highlighted a few functions of banking. Being
the student of Finance I tried my level best to decimate as much
information as was necessary to bring justice to my internships at
Deposits, Remittances Clearance departments at NBP.

I will like to thank all the staff of NBP Air Headquarter Branch
Peshawar especially Manager Mrs.Saima Raheem who treated me with
care and answered all my quarries and Miss Maria for providing me
relevant material. My special thanks are to Prof Tanveer Abdullah for
his help and guidance in understanding the Procedures and ways of
survives in business world. I am also thankful to my friends and family
members whose silent support led me to complete the project.

FATIMA IFTIKHAR
An Internship Report On: National Bank of Pakistan

Preface ----------------------------------------------------------------------- i

List of Tables--------------------------------------------------------------- iv

List of Charts & Graphs------------------------------------------------- v

List of Acronyms----------------------------------------------------------------- vi

Executive Summary------------------------------------------------------ viii

An Internship Report On: National Bank of Pakistan

LIST OF TABLES

1. NBP Board of Directors Strength-------------------------21

2. Name of Regions----------------------------------------------24
3. Corporate Branches-----------------------------------------25
4. NBP Overseas Branches------------------------------------26
5. Representative offices---------------------------------------27
6. Current Ratio-------------------------------------------------54
7. Cash Ratio-----------------------------------------------------56
8. Debt to Equity -----------------------------------------------57
9. Debt to Total Asset------------------------------------------59
10. Gross Profit Margin-----------------------------------------60
11. Net Profit Margin--------------------------------------------61
12. Return on Equity--------------------------------------------63
13. Asset Turnover Ratio---------------------------------------64
An Internship Report On: National Bank of Pakistan

LIST OF CHART AND GRAPHS

A. Organizational Structure-------------------------------20
B. Regions of NBP in Pakistan----------------------------23

1. Current Ratio-------------------------------------------------55

2. Cash Ratio-----------------------------------------------------56
3. Debt to Equity-------------------------------------------------58
4. Debt to Total Asset-------------------------------------------59
5. Gross Profit Margin-----------------------------------------60
6. Net Profit Margin--------------------------------------------62
7. Return on Equity---------------------------------------------63
8. Asset Turnover------------------------------------------------65
An Internship Report On: National Bank of Pakistan

LIST OF ACRONYMS

1. IBP Institute of Bankers, Pakistan

2. NBP National Bank of Pakistan
3. NIT National Investment Trust.
4. SBP State Bank of Pakistan.
5. GOP Government of Pakistan.
6. PLS Profit & Loss Sharing
7. CEO Chief Executive.
8. SEVP Senior Vice President.
9. EVP Executive Vice President.
10. NDSL National Discount Services Limited.
11. ATM Automatic Teller Machine
12. LTC Local Traveler Cheques
13. ACR Annual Confidential Report
14. DD Demand Draft.
15. TT Telegraphic Transfer.
16. WU Western Union.
17. SSC Specimen Signature Card
18. LSC Local Short Credit.
19. SC Short Credit.
20. IIC Islamic Ideological Council.
21. LC Letter of Credit.
22. LG Letter of Guarantee.
23. FOREX Foreign Exchange.
An Internship Report On: National Bank of Pakistan

24. FDD Foreign Currency Demand Draft.

25. FMT Foreign Currency Mail Transfer.
26. DC Documentary Credit.
27. DAF Delivery at Frontier.
28. DES Delivery Ex Ship.
29. DEQ Delivery Exquay.
30. DDU Delivery Duty Unpaid
31. DDP Delivery Duty Paid
32. NTN National Tax Number
33. DA Document Against Acceptance
34. DP Documents Against Acceptance
35. PAD Payment Against Documents
36. FATR Finance Against Trust Receipt
37. URC Uniform Rules for Collection.
38. NIT National Investment Trust.
39. SBP State Bank of Pakistan.
40. PLS Profit & Loss Sharing
41. SEVP Senior Vice President.
42. EVP Executive Vice President.
43. ATM Automatic Teller Machine
44. LTC Local Traveler Cheques
45. ACR Annual Confidential Report
46. DD Demand Draft.
47. TT Telegraphic Transfer.
48. WU Western Union.
49. DDP Delivery Duty Paid
50. NTN National Tax Number
 An Internship Report On: National Bank of Pakistan

TABLE OF CONTENTS
CHAPTER# 1

1. INTRODUCTION
1.1 Background of Study---------------------------------------------- 1
1.2 purpose of Study-------------------------------------------------- --2
1.3 scope of Study----------------------------------------------------- --3
1.4 Limitations of Study----------------------------------------------- 3
1.5 Methodology of Study----------------------------------------------4
1.5.1 Primary Data---------------------------------------------------4
1.5.2 Secondary Data------------------------------------------------4

CHAPTER# 2

2. EVOLUTION AND HISTORY OF NBP

2.1 Background of Banking----------------------------------------------5
2.2 Brief Study of Banking -------------------------------------- 6
2.3 Banking in Indo Pak Subcontinent---------------------------7
2.4 Banking in Pakistan---------------------------------------------9
2.5 History of NBP--------------------------------------------------11
2.6 History of NBP (1996-2000& Onwards)--------------------12
2.7 Activities Performed by NBP---------------------------------14
2.8 Status and Nature of Business--------------------------------15
2.8.1Vision--------------------------------------------------------15
2.8.2Mission------------------------------------------------------15
2.8 Functions of NBP-----------------------------------------------16
2.9.1Accepting Deposits---------------------------------------16
2.9.2Discounting Bills of Exchange-------------------------17
2.9.3 Agency Service-------------------------------------------17
2.9.4general utility services-----------------------------------17
2.10 Unmatched Banking Facilities--------------------------------18
An Internship Report On: National Bank of Pakistan

CHAPTER #3
3. ORGANIZATIONAL STRUCTURE OF NBP

3.1Head Office-------------------------------------------------------19
3.2Board of Directors-----------------------------------------------21
3.3 Executive Committee-------------------------------------------21
3.4Divisional Chief---------------------------------------------------21
3.5Provincial Chief---------------------------------------------------22
3.6Regions of NBP----------------------------------------------------22
3.7Corporate Branches----------------------------------------------25
3.8Overseas Branches------------------------------------------------26
3.9Overview of NBP Air Headquarter Branch Peshawar----27
3.9.1 Departments of Branch---------------------------------------27
1) Deposit Department----------------------------------28
2) Cash department--------------------------------------37
3) Govt Collection Department------------------------39
4) Pension Department----------------------------------39
5) Remittances Department----------------------------40
6) Advance Department---------------------------------44

CHAPTER #4

4. SERVICES OF NBP

4.1Demand Draft-----------------------------------------------48
4.2 Travelers’ Cheque-----------------------------------------48
4.3 Pay Order----------------------------------------------------48
4.4 Foreign Remittances----------------------------------------49
4.5 Short term Investments-------------------------------------49
4.6 Agriculture Finance-----------------------------------------50
4.7 NBP Kisan Dost----------------------------------------------51
4.8 NBP Cash n Gold--------------------------------------------51
4.9 NBP Saiban---------------------------------------------------52
4.10 International Banking-------------------------------------52
An Internship Report On: National Bank of Pakistan

CHAPTER # 5

5. ANALYSIS
5.1 Financial Analysis -------------------------------------------53
5.1.1 Ratio Analysis ----------------------------------------53
5.1.2 Types of Ratios---------------------------------------54
5.2 SWOT Analysis--------------------------------------65
5.3 Competitive Analysis-------------------------------73

CHAPTER # 6

6. PROBEMS AND FINDINGS

6.1 Customer Satisfaction----------------------------------76
6.2 Unequal Distribution Of Work-----------------------76
6.3 Poor Record Management And Filing System------76
6.4 Difference Between Theory And Practice-----------76
6.5 Excessive Paper Work---------------------------------77
6.6 Lack Of Specialized Training ------------------------77
6.7 Delays In Loan Advancement------------------------77
6.8 Lack Of Business Communication-------------------77
Poor Job Rotation-----------------------------------------77
6.10 Marketing At Desk---------------------------------78

CHAPTER # 7

7. RECOMMENDATIONS
7.1 Availability of required staff ------------------------------79
7.2 Job Rotation--------------------------------------------------79
7.3 Customer Friendly Environment---------------------------80
An Internship Report On: National Bank of Pakistan

7.4 Professional Attitude-----------------------------------------80

7.5 Personal Marketing-----------------------------------------80
7.6 Equal Distribution of Workload------------------------ --81
7.7 ATM Facility ------------------------------------------- ---81
7.8 Decentralization--------------------------------------- ----- 81
7.9 Role of Presentation---------------------------------- ----- 82
7.10 Consumer Satisfactio=-------------------------------- ---- 82

CHAPTER #8

IMPLEMENTATION /ACTION PLAN

8.1 Need/Problem at Branch---------------------------83
8.2 Benefits of Telephone Operator-------------------83
8.3 How need was Created------------------------------84
8.4 Implementation Plan Cost-------------------------84

CHAPTER # 9

CONCULSION-----------------------------------------86

BIBLIOGRAPHY--------------------------------------87
An Internship Report On: National Bank of Pakistan

Executive Summary

National Bank of Pakistan is one of the pioneer banks of Pakistan the

NBP was established vide NBP Ordinance No. XIX of November 9,
1949 by government of Pakistan. NBP is well-reputed organization. It
offers a wide range of products to its customers and Serves its clientele
through large network of 1189 domestic branches (29 regions) 15
overseas branches & 4 representative offices and having 4 subsidiaries.
NBP has a subsidiary naming CJSC Subsidiary Bank of National Bank
of Pakistan in Kazakhstan and a joint venture with United Kingdom
bank.

NBP was selected for the study owing to its stature in the banking
industry. The methodology used in the report is based on primary and
secondary data. Primary data consists of interviews, discussions with
executives & officials and personal Observation. Secondary data
includes annual reports, manuals, journals, circulars, brochures and
relevant books.

The purpose of this report is to analyze the performance and activities

of the National Bank of Pakistan Air Headquarter Branch Peshawar in
particular and NBP in general so as to know whether the bank is
achieving the objectives set by it and identify its problems and
recommend remedial measures to overcome those problems.

The report has been divided into the following sections.

 Introduction
 Review of the NBP.
 Analysis.
 Recommendations
 Implementation Plan.

The Findings and Recommendations of the report are as follows:

 An Internship Report On: National Bank of Pakistan

 Required staff should be provided to branch in order to improve the

functioning of the branch. Especially a telephone operator and a
customer service officer should be appointed. These are necessary
because without the customer service officer the employees waste a
lot of time.
 There should be Job rotation of employees, so that they should know
about all departments. This will enhance the capabilities of the
employees, as due to change in work they will escape monotony.
 Friendlier environment should be created because it will help to gain
the interest of employees in work. Noise in the office should be
reduced because it has unfavorable impact on the working
environments.
 More professional attitude is required from the bankers. All loopholes
must be closed that are used to incur expenses in respect of telephone,
fuel, electricity, and fringe benefits.
 A very useful mode of contact is personal marketing visits such as
information about the customer’s financial and business position,
market reputation and Let clients feel important. Such visits should be
properly planned with regularity and consistency.
 The employees of the branch should be given equal workload. No body
should be given undue relaxation. The personal contacts of some of
the employees should not spoil the environment of the branch.
 The NBP should adopt modern banking tools and techniques. Quality
leadership, clear vision, investment in IT infrastructure and human
resource development.ATM facility should be introduced in
branches. This technological advancement is necessary for improving
the service of the bank. This will allow customers to get 24-hour
banking service.
 As National bank of Pakistan is a centralized bank, the higher authority
takes decisions. All of the major decisions are taken at higher level of
 An Internship Report On: National Bank of Pakistan

management. The authority delegated to the managers of the branch is

limited
 The National bank of Pakistan should be fully prepared in its
management of financial crises and its business continuity planning,
within the standing committee framework, and should work with
others to strengthen national crises management preparations.
 The bank should improve the quality of training of its employees and
the integrity, controls and efficiency of its systems, processes and
financial reporting.
 The bank should improve its recruitment, retention and development
and to reform the Bank’s pension scheme. The bank should develop
software for pension disbursement
 The Bank should improve IT capability in the analytical areas and to
develop a medium term strategy for banking and market operations.
 The National bank of Pakistan should monitor the impact of its
operations on the environment, which is mainly through the use of
power and the generation of waste.
 NBP, being the only lending arm to the government for public sector
development should design, develop and deliver product and services
for economic growth.
 The bank should provide support to the Micro, Small and Medium
enterprises thereby reducing unemployment and helping to create a
more equitable distribution of wealth.
 The NBP should strengthen incentives and accelerate a results-oriented
training and communications programs for management and staff.
 The National Bank of Pakistan should implement a financial inclusion
program to meet the needs of underserved economic subsectors,
including outreach programs to meet the requirements of the
agriculture, housing, SME and microfinance sectors.
An Internship Report On: National Bank of Pakistan