Professional Documents
Culture Documents
A Case Study of
National Bank of Pakistan (NBP)
19 Feb, 2011
Prepared By
Rafique Nancy 5152,
Salman Ahmed 5182
Komal Benjamin 5276,
Khurram Baber 5141
ACKNOWLEDGEMENT
First and foremost let us sincerely thank ALMIGHTY for the great opportunity and
blessing that he has showered up on us for the successful and timely completion of
our project work.
We very great fully wish to forward due respect and thanks to our MMR teacher Sir
Santosh Kumar for his teaching and continues, creative, valuable, and informative
support, with out which the project would not have been efficiently completed.
Once again we take this opportunity to convey our sincere thanks to each and every
person who helped us directly and indirectly in the successful completion of this
project.
The NBP was established vide NBP Ordinance No. XIX of November 9. 1949.
British Govt. devalued its currency in September 1949, India devalued its rupees
but Pakistan did not. It led to a crisis in trading between the two countries and
India refused to lift the Pakistan Jute. To solve this problem i.e. to export jute
NBP was established through an Ordinance of GOP. National Bank of Pakistan
maintains its position as Pakistan's premier bank determined to set higher
standards of achievements. It is the major business partner for the Government
of Pakistan with special emphasis on fostering Pakistan's economic growth
through aggressive and balanced lending policies, technologically oriented
products and services offered through its large network of branches locally,
internationally and representative offices.
The Bank in 1950 had one subsidiary ‘The Bank of Bahawalpur’ on December4,
1947 by the former Bahawalpur State.
iii) NBP advances reached Rs.554.4 million by December 1959, which was
one third of the total schedule bank credit.
National Bank of Pakistan is the largest commercial bank operating in
Pakistan. It has redefined its role and has moved from a public sector
organisation into a modern commercial bank. 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 a 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, NBP headquarters in Karachi, Pakistan with
over 1,200 branches country wide. The bank provides both commercial and
public sector banking services. It has assets worth USD 12.293 billion in
2007. Its subsidiaries include NBP Capital, NBP Modaraba Management
Company, NBP Exchange Company, Taurus Securities, NBP Almaty and
others.
MISSION STATEMEN
“To make the Bank complete and competitive with all international Standard in
performing, quality of, operations, staff, financial strength. And products and
services to develop a culture of excellence in every spare of activity of the
bank”.
CORE VALUE
NBP further consolidated its position as one of the top players in corporate and
investment banking of the country and has built a strong customer relationship
with the premier corporate clients.
Objectives of NBP
1. By increasing deposits.
Increase in deposits:
Extension of loans:
The profitability of a bank largely depends on the amount given to people as loan
and the type of people to whom credit is given i.e. the credit worthiness of the
borrowers. This strategy has worked quite well for NBP. Deposits are collected
from the people and invested in different projects. NBP prefers to give loans to
financially sound and reliable parties, after securing the collators. NBP has an
extremely well organized section. The staff is adequately trained, and educated
and competent. They carry out extensive financial analysis before deciding on
the loan. Interest charged on the loans potentially contributes to higher profits.
Some of the other objectives of NBP are:
FUNCTION OF NBP
Accepting Deposits
This function is important because banks largely depend on the funds deposited
with them by its customers. Deposits are of many types:
i. Current deposits
Current deposits are also called demand liability on current deposits. NBP pays
practically no interest on current deposits. Businessmen usually open current
accounts. In NBP current account can be opened with a minimum amount of
Rs.500/-.
Profit and loss sharing deposits (PLS) are also called checking accounts. One
can deposit and draw money easily. Profit on PLS is calculated every month but
paid after six months. PLS account can be opened with a minimum amount of
Rs.500/-
iii. PLS term deposits
Fixed term deposits are deposits with the bank for certain fixed period before the
expiry of which they cannot be withdrawn unless giving due notice. In this case
the rates of profit will be different depending upon the time period.
Agency service
NBP also provides best and unique service to its valued customers. NBP provide
the following agency services to the customers:
i. Collection of dividends
As NBP deals with the purchase and sale of various types of securities, therefore
NBP also provide dividend or interest earned on share or bonds or invested
money.
In the collection and payment of Cheques, bills and promissory notes etc.
National bank of Pakistan acts as an agent for its customers.
NBP provides the service of clearing the utility bills i.e. electricity, gas and
telephone bills of its customers. For this purpose it also provides evening banking
services
b. Lockers facility
National bank of Pakistan also provides locker facilities to its customers to keep
their valuable assets in it. The charges of different size of lockers are different.
c. Acts as a referee
d. Supply of information
Hajj arrangements.
The prestigious periodical “The Banker” UK recognized NBP as the best bank for
2001-2002 and NBP is the bank of the year for 2004-2004 of Pakistan.
i. AAA rating awarded JCR-VIS Credit co. Ltd and affiliated of Japan Credit
Rating Agency for 2001.
ii. AAA+1 rating awarded JCR-VIS Credit Co.Ltd and affiliated of Japan
Credit Rating Agency for 2002
NBP at the forefront of Pak-Afghan trade
TARGET MARKET
CORPORATE SECTOR
AGIRCULTURE SECTOR
MICRO FINANCE
SAVING
INSURANCE
MARKETING MIX
PLACE
26 OVERSEAS BRANCHES
PRICE STRATEGY
PROMOTION STRATEGY
Services are outputs of the firm, which are in intangible form. Which are the
backbones of any organization to earn profit. NBP offers the following services to
the people.
DEMAND DRAFTS
If you are looking for a safe, speedy and reliable way to transfer money, you can
now purchase NBP’s Demand Drafts at very reasonable rates. Any person
whether an account holder of the bank or not, can purchase a Demand Draft
from a bank branch.
SWIFT SYSTEM
Using the NBP network of branches, you can safely and speedily transfer money
for our business and personal needs.
LETTERS OF CREDIT
NBP is committed to offering its business customers the widest range of options
in the area of money transfer. If you are a commercial enterprise then our Letter
of Credit service is just what
you are looking for. With competitive rates, security, and ease of transaction,
NBP Letters of Credit are the best way to do your business transactions.
TRAVELER'S CHEQUES
PAY ORDER
NBP provides another reason to transfer your money using our facilities. NBP
pay orders are a secure and easy way to move your money from one place to
another. And, as usual, NBP charges for this service are extremely competitive.
The charges of NBP are very low all over the Pakistan. It charges Rs 50/- for
NBP account holders on issuing one payment order. And charges Rs 100/- for
NBP non-account holders on issuing one payment order. It charges Rs 25/- for
students on payment of fees of educational institutions. If some one want a
duplicate of payment order they charges Rs 100/- for NBP account holders and
Rs 150/- for non account holders.
AIL TRANSFERS
Move your money safely and quickly using NBP Mail Transfer service. And NBP
also offers the most competitive rates in the market. They charges Rs 50/-
exchange rate and RS 75/- postage charges on issuing mail transfer.
FOREIGN REMITTANCES:
New Features:
NBP now offers excellent rates of profit on all its short-term investment
accounts. Whether you are looking to invest for 3 months or 1 year, NBP’s rates
of profit are extremely attractive, along with the security and service only NBP
can provide.
National Income Daily Account (NIDA)
Salient Features:
Rates on NIDA
• From Rs50/- million but less than Rs 500/-million, the rate is 1.5%.
AGRICULTURAL FINANCE
“I Feed the World” program, a new product, is introduced by NBP with the aim
to help farmers maximize the per acre production with minimum of required
input. Select farms will be made role models for other farms and farmers to
follow, thus helping farmers across Pakistan to increase production.
Agricultural Credit:
• Help farmers utilize funds efficiently to further develop and achieve better
production
• Watercourse improvement
• Wells
• Farm power
• Development loans for tea plantation
• Fencing
• Solar energy
Farm Credit:
NBP also provides the following subsidized with ranges of 3 months to 1 year on
a renewal basis.
• Operating loans
Production Loans:
Production loans are meant for basic inputs of the farm and are short term in
nature. Seeds, fertilizers, sprayers, etc are all covered under this scheme.
CORPORATE FINANCE
NBP provides financing for its clients’ capital expenditure and other long-term
investment needs. By sharing the risk associated with such long-term
investments, NBP expedites clients’ attempt to upgrade and expand their
operation thereby making possible the fulfillment of our clients’ vision. This type
of long term financing proves the bank’s belief in its client's capabilities, and its
commitment to the country.
National Bank’s leadership in loan syndicating stems from ability to forge strong
relationships not only with borrowers but also with bank investors. Because we
understand our syndicate partners’ asset criteria, we help borrowers meet
substantial financing needs by enabling them to reach the banks most interested
in lending to their particular industry, geographic location and structure through
syndicated debt offerings. Our syndication capabilities are complemented by our
own capital strength and by industry teams, who bring specialized knowledge to
the structure of a transaction.
With National Bank’s Cash Management Services the customer’s sales collection
will be channeled through vast network of NBP branched spread across the
country. This will enable the customer to manage their company’s total financial
position right from your desktop computer. They will also be able to take
advantage of our outstanding range of payment, ejection, liquidity and investment
services. In fact, with NBP, you’ll be provided everything, which takes to manage
your cash flow more accurately. EOBI and Pakistan railway is currently availing
NBP cash management services.
INTERNATIONAL BANKING
NBP offers:
Cash and Gold finance means that loan is given against the gold. The gold is
mortgaged with the bank and loan is taken. It is the area of consumer finance.
And borrower can take loan for common use.
This loan is given to those people who are govt servants. They can get a loan up
to:.
Minimum down payment, 10% of asset price (5% for PCO & Telecaster)
The customer will pay markup @ 6% p.a., rest will be borne by GOP
MEANS OF UTILIZATION
No documentation
No medical required
Accident
Riots
Civil Commotion
Strikes
Acts of Terrorism
SWOT ANALYSIS
2. Neutralizing it threats.
SWOT analysis is one of the most important steps in formulating strategy using
the organization mission as a context; managers assess internal strengths
distinctive competencies and weakness and external opportunities and threats.
The goal is to then develop good strategies and exploit opportunities and
strengths neutralize threats and avoid weaknesses.
STRENGTH
OLDEST INSTITUTION:
NBP is one of the oldest bank of Pakistan and first nationalized bank Hence its
customer base is strength from this plus point as customers have more
confidence in the bank. The additional value services as the privilege for the
bank.
The NBP performs additional services for its customers as well as the other bank
customer in the absence of SBP.
NBP has the relative competence in having more deposits than the other bank.
This is because of the confidence the customer have in the bank. The bank being
the privileged and oldest bank in banking sector of Pakistan enjoys this edge
over all others, lacking it.
EMPLOYEE BENEFITS
The employers at NBP are offered reasonable monetary benefit. Normally two
bonuses are given Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional
benefit and competency for the bank and a source of motivation for the
employees.
BROAD NETWORK
The bank has another competency i.e. it has broad-basses network of branches
throughout the country also more than one branch in high productive cities. The
customers are provided services at their nearest possible place to confirm
customer satisfied.
The employees at NBP are strict followers of rule & regulation imposed by bank.
The disciplined environment at NBP bolsters its image and also enhances the
over all out put of the organization.
PROFESSIONAL COMPETENCE
The employees at NBP here have a good hold on their descriptions, as they are
highly skilled Professionals with background in business administration, banking,
economics etc. These professional competencies enable the employees to
understand and perform the function and operation in better way.
HEALTHY ENVIROMNMENT
The working condition in the NBP branch here is very conductive and favorable
for better output. The informal environment affects the performance of the
employees in a positive way.
The bank enjoys a good plus point when it comes to the employee manager
relationship the hearing as removing of discrepancies if any, between the
employees, and between the manager and employees.
WEAKNESSES
The bank does not promote its corporate image, services, etc on a competitive
way. Hence lacks far behind in marketing effort .A need for aggressive marketing
in there in the era marketing in now becoming a part of every organization.
The strong political hold of some parties and government and their dominance is
affecting the bank in a negative way. They sometime have to provide loan under
the pressure, which leads to uneven and adjusted feeling in the bank
employees.4.3.3
The promotions and bonuses etc in the bank are often powered by senior’s
favoritism or dependupon their wills and decision. This adds to the negative
factors, which denominate the employees thus resulting in affecting their
performance negatively.
The bank falls far behind when the innovative and new schemes are considered.
It has not been involved in the tug of war between the competitors to the
accounts and strengthens the existing customer base. This stands out to be the
major incompetence and weakness of the banks.
During the rush hours, the bank is founded out to be a total flop to handle the
mob of people peaking from windows and doors. The bank has deficiency to
operate in the stages of rush hours where the people find them services
entangled in a situation of nowhere because they are not well served.
OPPORTUNITIES
ELECTRONIC BANKING
The world today has become a global village because of advancement in the
technologies, especially in communication sector. More emphasis is now given to
avail the modern technologies to better the performances. NBP can utilize the
electronic banking opportunity to ensure on line banking 24 hours a day. This
would give a competitive edge over others.
MICRO FINANCING
Because of the need for micro financing in the market, there are lot of
opportunities in this regard. Other banks have already initiated, now the time has
arrived when the NBP must realize it and take on step to cater an ongoing
demand and introduce products like auto finance etc.
THREATS
The bank is facing threats with the emergence of new competitors especially in
terms of foreign banks. These foreign banks are equipped with heavy financial
power with excellent and innovative ways of promoting and performing their
services. The bank has to take initiative in this regard or will find itself far back in
competition.
The ongoing shift in power in political arena in the country effects the
performance of the bank has to forward loans to politically powerful persons
which create a sense of insecurity and demoralization in the customer as well as
employees.
DOWNSIZING
The bank is currently acting upon the policy of downsizing which threaten the
environment of the bank Employees feel insecurity in doing their jobs and work,
hence affecting the over all performance of employees negatively.
CUSTOMERS COMPLAINTS
This approach is widely used for competitive analysis. It is because of the high
intensity of competition among companies there five main competitive forces.
It is a very powerful force among the competitive forces the strategies pursued by
one firm can be successful only to extent that they provide competitive
advantages over the competitor. These competitive strategies may be lowering
prices, best quality series. The NBP offering very low charges an demand draft,
telegraphy transfer, mail transfer and give other additional services to the
customers and to the Nation. Because NBP is a “Nation’s Bank”.
This is the third factor affecting the competitions. There may be some other
product can be substitute the product of that industry. For example banks offering
sawing schemes in Pakistan and these schemes are also offered by GPOs in
Pakistan so they must compete them in this field. If they offer low rates than
GPOs so people will go to deposit in GPOs. People concentration high rates so
that’s why sawing PLS accounts are more then current accounts. The next
examples will ATM which substitute presenting cheques at counter and encash it.
The NBP is lacking in this field. It must improve in this field to compete the
competitors.
1
2
What do you think about quality of
services provided by NBP (1) Good (2)
Bad
1
2
1
2
Does NBP charge unnecessarily for
not maintain minimum balance in
your account
(1) Yes (2) No
1
2
1
2
1
2
R eason for using other B ank's service
is
(1) Bad C ounter Service of N B P
(2) H igh Interest rate
1
2
1
2
REMARKS:
Customer solutions provided by NBP are superior then other banks but the counter
services are usually a concern for the customer because of which they are using services
of other banks as well.
The customer base of NBP is Un-harvested and NBP has the potential to capture the
entire market by improving the internal atmosphere of the organization and training its
employee for proper counter service
Similarly NBP can offer new variety of products for individual customer who will help
NBP to reposition it self as a true commercial bank rather then a government bank.