Table of contents

Executive summary Mission statement Vision Senior Management Overseas Branches Domestic Branches NBP loan Services Investments Deposit products
Exchange rates

04 05 07 09 12 13 15 17 20 23 25 27 30 36 38 61 65 68

SWOT analysis Performance analysis
Comparative analysis

Bank charges Work done by Internee Problems faced by Branch Bibliography

1. Executive Summary

This report is based on internship in National Bank of Pakistan branch name. It is a famous and reputed bank of Pakistan. National Bank of Pakistan maintains first position in banking sector in Pakistan. This report is based on the activities which are performed in this bank. This report contains marketing analysis, competitive analysis, SWOT analysis, bank tariffs and exchange rates of National Bank of Pakistan. There are also stated the activities which I performed during my internship in the branch. In this report also discuss the industry analysis of banking system in Pakistan. There are also mentioned the way of investment, rates of investment, all types of financing and loans facilities the National Bank of Pakistan provides. The problems in this branch are also discussed. This report also intimates about the daily reserves which are required by the branch to meet the need of its daily transactions.

2.1. Mission Statement
To be recognized in the market place by Institutionalizing a merit & performance culture, Creating a powerful & distinctive brand identity, Achieving top-tier financial performance, and Adopting & living out our core values.

2.2. Core Values
2.2.1. We aim to be an organization that is founded on…
• Growth

through creation of sustainable relationships with our customers. guide our business conduct.

• Prudence to •A

national presence with a history of contribution to our communities.

2.2.2. We shall work to…
• Meet expectations through • Reward

Market-based solutions and products.

entrepreneurial efforts. all stakeholders.

• Create value for

2.2.3. We aim to be peopling who…
• Care about relationships. • Lead

through the strength of our commitment and willingness to excel.

honesty and hard work. We believe that these are measures of true success. 2.2.4. We have confidence that tomorrow we will be…
• Leaders in • An

• Practice integrity,

our industry.

organization maintaining the trust of stakeholders.

• An innovative, creative and dynamic institution responding to the changing needs of the internal and external environment

2.3. Vision
To be the pre-eminent financial institution in Pakistan and achieve market recognition both in the quality and delivery of service as well as the range of product offering

2.4. Senior management
Masood Karim Shaikh SEVP & Group Chief, Corporate & Investment Banking Group Shahid Anwar Khan SEVP & Group Chief, Commercial & Retail Banking Group Dr. Asif A. Brohi SEVP & Group Chief, Operations Group Muhammad Sardar Khawaja SEVP & Group Chief, Audit & Inspection Group

S. M. Rafique SEVP & Secretary Board of Directors Imam Bakhsh Baloch SEVP & Group Chief, Compliance Group Ziaullah Khan SEVP & Group Chief, Special Assets Management Group Amim Akhtar EVP & PSO to the President Javed Mehmood EVP & Group Chief, Risk Management Group Muhammad Nusrat Vohra EVP & Group Chief, Treasury Management Group Nadeem A. Dogar EVP & Group Chief, Information Technology Group Dr. Mirza Abrar Baig EVP & Group Chief, Human Resources Management & Administration Group Mrs. Khurshid Maqsood Ali EVP & Divisional Head Employee Benefits, Disbursements & Trustee Division Tahir Yaqoob EVP & Group Chief, overseas Coordination & Management Group Mrs. Uzma Bashir Group Chief, Organization Development & Training Group Syed Farhan Ahmed Financial Controller & Divisional Head Financial Control Division

2.5. Corporate and financial reporting framework
(Code of Corporate Governance) The board is fully aware of its responsibilities established by the Code of Corporate Governance issued by the Securities & Exchange Commission of Pakistan (SECP). They are pleased to give the following declarations/statements to comply with the requirements of the Code. 1. The financial statements (Balance sheet, Profit and Loss Account, Cash Flow Statement, Statement of Changes in Equity and notes forming part thereof), prepared by the management of the bank give the information required by the Companies Ordinance, 1984 in the manner so required and respectively give a true and fair view of the state of the bank's affairs as at December 31, 2002 and of the results of its operations, changes in equity and its cash flows for the year then ended. 2. Proper books of accounts have been maintained.

3. Appropriate accounting policies have been consistently applied in the preparation of the financial statements and accounting estimates are based on the reasonable and prudent judgment. 4. Approved Accounting Standards have been followed in preparation of the financial statements and there is no departure from the said standards. 5. The system of internal control is sound in design and has been effectively implemented and monitored throughout the year. The Board is responsible for establishing and maintaining the system of internal control in the bank and for its ongoing monitoring. However, such a system is designed to manage rather than eliminate the risk of failure to achieve objectives, and provide reasonable but not absolute assurance against material misstatements or loss. The process used by the Board to review the efficiency and effectiveness of the system of internal control includes, the following: has formed an audit committee comprising of three non executive directors. The audit committee has written terms of reference in the form of a charter, which has been approved by the Board of Directors. The committee is responsible for the oversight of the internal audit function and reviews its approach and methodology from time to time. It also receives and reviews the internal and external audit reports relating to the internal control, accounts and related matters. The committee on a continuous basis reviews the material control weaknesses and areas of concern and actions to be taken by the executive management to address these issues.
• Internal • The Board

audit department of the bank conducts the audit of all branches, regions and groups at head office level on ongoing basis to evaluate the efficiency and effectiveness of internal control system and proper follow up of irregularities and control weaknesses is carried out. receives confirmations/representations from all group and regional heads on annual basis confirming effectiveness of the internal control system established and maintained by them within their function.

• The Board

The principal features of the bank's control framework include: clearly defined organizational structure which supports clear lines of communications and reporting relationships. exists a properly defined financial and administrative power of various committees and key management personnel, which supports delegation of authority and accountability.
• There • The bank has

• The bank has effective budgeting system in place. Annual budget of the bank is approved by the Board and monthly comparisons of actual results with the budget are prepared and reviewed by the senior management.

The bank has a comprehensive framework of written policies and procedures on all major areas of operations such as Credit, Treasury Operations, Finance, Internal audit and Compliance approved by the Board.
• There are no significant doubts about the bank's ability to continue as a going concern. • There has been no material! Departure from the best practices of the corporate governance as detailed in the listing regulations. • Key operating and • The number

financial data is available in the annual report.

of board meetings held during the year were 14 and attended by the directors as follows: 14 10 8 12 12 10 12

Syed Ali Raza Dr. Waqar Masood Khan Kamran Y. Mirza A. Razzak Tabba Rizwan A. Kehar Qazi Faez Issa Sheikh Humayun Sayeed

• Book value of investments of Employees' Pension Fund as at December 31, 2002 (un-audited) is Rs. 6,317.705 million. • The pattern

of shareholding as required by the code is as follows:

Associated companies, undertakings and related parties Total No. of shares held Taurus Securities Limited 2,015 1,009,842

National Bank of Pakistan Trustee Department -NIT Investment Corporation of Pakistan 1,519,095

16 Overseas Branches 4 Representative Offices 1 Subsidiary 1 Joint Venture

29 Regional Offices 1,189 Branches 130 Online Branches 4 Subsidiaries

2.6. Overseas Branches
2.6.1. America and Europe Region USA Canada Germany France 2.6.2. Far East Region Hong Kong Japan South Korea China 2.6.3. Middle East, Africa & South Asia Region Bahrain Egypt

Bangladesh EPZ 2.6.4. Central Asian Republics Afghanistan Turkmenistan Kyrgyz Republic Kazakhstan Uzbekistan Azerbaijan

2.7. Domestic Branches
2.7.1.Sind Dadu/ Sanghar Hyderabad Jacobabad/ Shikarpur Karachi Larkana Mirpurkhas/ Badin Nawabshah/ N' Feroze Sukkur/ Khairpur Tharparkar 2.7.2. Punjab Bahawalpur D.G. Khan/ RYKhan

Faisalabad Gujranwala Sialkot/ Narowal Islamabad Jhang Jhelum/ Gujrat/ Chakwal Lahore Multan/ Baha'nagar Murree/ Attock/ Gilgit Rawalpindi Sahiwal Sargodha/ Sheikhupura 2.7.3. NWFP Abbottabad/ Mansehra Bannu/ D.I. Khan Kohat / Mingora Mardan Peshawar 2.7.4. Baluchistan All Branches 2.7.5. Azad Kashmir Muzaffarabad Mirpur

2.8. NBP Student Loan Scheme
Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002 budget speech, a STUDENTS LOAN SCHEME (SLS) for Education was launched by the Government of Pakistan in collaboration with major commercial banks of Pakistan (NBP, HBL, UBL, MCB and ABL). Under the Scheme, financial assistance is provided by way of Interest Free Loans to the meritorious students who have financial constraints for pursuing their studies in Scientific, Technical and Professional education within Pakistan. The Scheme is being administered by a high powered committee comprising Deputy Governor, State Bank of Pakistan, Presidents of the commercial banks and Deputy Secretary, Ministry of Finance, Government of Pakistan. • The objective of the Students Loan Scheme is to provide financial assistance to the meritorious students of insufficient means who have obtained 70% marks in the last public examination and are unable to pursue their studies within Pakistan due to financial difficulties. • Loans facility is available to those students who are nationals of Pakistan including Northern Areas, Federally Administered Tribal Areas and Azad Jammu and Kashmir and of age not exceeding 20 years for graduation, 30 years for post-graduation and 35 years for PhD at the time of admission. • The maximum period of repayment of loan is 10-Years from the date of disbursement of first installment .The borrower shall repay the loan in monthly installment after six months from the date of first employment or one year from the date of completion of studies, which ever is earlier

• Loan is granted only to those students who have been admitted to the approved under noted Affiliated Colleges /Universities. • Under the Scheme, loans are available in the following subjects. Engineering Electronics Oil Gas & Petro-Chemical Technology Agriculture Medicine Physics Chemistry Biology, Molecular Biology & Genetics Mathematics Other Natural Sciences DAWA and Islamic Jurisprudence (LL.B/LL.M Sharia) Computer Science/Information System and Technology including hardware. Economics, Statistics and Econometrics Business Management Sciences Commerce

• The facility under this Scheme is restricted to the studies in the above-mentioned subjects only or such other subjects as may be approved by the Apex Committee from time to time. • The amount of loans under the Scheme covers the cost of fee, books and boarding for the entire period of study. • Schedule Fee and boarding expenses excluding meal charges is disbursed directly to the University/College. • The amount of procurement of textbooks is disbursed directly to the student.

• The students desirous of availing loan under the Scheme may apply on prescribed Form for financial assistance subject to he or she has got admission on merit through normal procedure in the Universities/ Colleges afore-mentioned. • Application Forms are available from the designated branches. • Applicants are required to submit/send their applications duly completed in all respect, to the designated branches indicated against Universities/ Colleges. • Those students who have already availed this facility last year need not to apply.

3. SERVICES
3.1. 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.

3.2. SWIFT SYSTEM
The SWIFT system (Society for Worldwide Inter bank Financial Telecommunication) has been introduced for speedy services in the area of home remittances. The system has built-in features of computerized test keys, which eliminates the manual application of tests that often cause delay in the payment of home remittances. The SWIFT Center is operational at National Bank of Pakistan with a universal access number NBPAPKKA. All NBP overseas branches and overseas correspondents (over 450) are drawing remittances through SWIFT. Using the NBP network of branches, you can safely and speedily transfer money for your business and personal needs.

3.3. 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 their 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.

3.4. TRAVELER'S CHEQUES
3.4.1. Negotiability: Pak Rupees Traveler’s Cheques are a negotiable instrument 3.4.2. Validity: There is no restriction on the period of validity 3.4.3. Availability: At 700 branches of NBP all over the country 3.4.4. Encashment: At all 400 branches of NBP 3.4.5. Limitation: No limit on purchase 3.4.6. Safety: NBP Traveler’s Cheques are the safest way to carry our money

3.5. PAY ORDER
NBP provides another reason to transfer customer’s money using their facilities. Their pay orders are a secure and easy way to move customer’s money from one place to another. And, as usual, their charges for this service are extremely competitive. 3.5.1. Issuance of Pay order 1. for NBP Account Holder Rs. 50/- (Flat) 2. for NBP Non-Account Holder Rs. 100/- (Flat)

Rs. 25/- (Flat) from student for payment of fee favoring educational institution

3.5.2. Issuance of duplicate Pay order 1. for NBP Account Holder Rs. 100/- (Flat) 2. for NBP Non-Account Holder Rs. 150/- (Flat)

3.6. MAIL TRANSFERS
Move your money safely and quickly using NBP Mail Transfer service. And they also offer the most competitive rates in the market.

3.7. FOREIGN REMITTANCES
To facilitate its customers in the area of Home Remittances, National Bank of Pakistan has taken a number of measures to:
• Increase home

remittances through the banking system

• Meet the SBP directives/instructions for timely and prompt delivery of remittances to the beneficiaries

3.7.1. New Features: The existing system of home remittances has been revised/significantly improved and well-trained field functionaries are posted to provide efficient and reliable home remittance services to nonresident Pakistanis at 15 overseas branches of the Bank besides Pakistan International Bank (UK) Ltd., and Bank Al-Jazira, Saudi Arabia.
• Zero Tariffs: NBP is providing home remittance services without any charges. • Strict monitoring of the system is done to ensure the highest possible security. • Special courier services are hired for expeditious delivery of home remittances to the beneficiaries. •

3.8. SHORT TERM INVESTMENTS

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. 3.8.1. National Income Daily Account (NIDA) The scheme was launched in December 1995 to attract corporate customers. It is a current account scheme and is part of the profit and loss system of accounts in operation throughout the country. 3.8.2. Effective 23rd December 2004 National Income Daily Account (NIDA) Slab Rate Rs. 2 Million & above but below Rs. 25 Million 1.00 % Rs.25 Million & above but below Rs .50 Million 1.10 % Rs.50 Million & above but below Rs.100 Million 1.30 % Rs.100 Million & above but below Rs. 250 Million 1.50 % Rs.250 Million & above but below Rs. 500 Million 1.75 % Rs.500 Million & above but below Rs. 1000 Million 2.00 % Rs.1000 Million & above but below Rs. 2000 Million 2.25 % Rs.2000 Million & above but below Rs. 5000 Million 2.50 % Rs.5000 Million & above 2.75 %

3.9. EQUITY INVESTMENTS
NBP has accelerated its activities in the stock market to improve its economic base and restore investor confidence. The bank is now regarded as the most active and dominant player in the development of the stock market. 3.9.1. NBP is involved in the following:
• Investment

into the capital market of capital market accounts (under process)

• Introduction

NBP’s involvement in capital markets is expected to increase its earnings, which would result in better returns offered to account holders.

3.10. COMMERCIAL FINANCE
Let them help make your dreams become a reality Their dedicated team of professionals truly understands the needs of professionals, agriculturists, large and small business and other segments of the economy. They are the customer’s best resource in making NBP’s products and services work for them.

3.11. TRADE FINANCE OTHER BUSINESS LOANS
3.11.1. AGRICULTURAL FINANCE 3.11.2. CORPORATE FINANCE

3.11.1. AGRICULTURAL FINANCE NBP provides Agricultural Finance to solidify faith, commitment and pride of farmers who produce some of the best agricultural products in the World.

Agricultural Finance Services: “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: The agricultural financing strategy of NBP is aimed at three main objectives:• Providing reliable • Help

infrastructure for agricultural customers

farmers utilize funds efficiently to further develop and achieve better production
• Provide

farmers an integrated package of credit with supplies of essential inputs, technical knowledge, and supervision of farming.

Agricultural Credit (Medium Term):

• Production

and development

• Watercourse improvement • Wells • Farm power • Development loans for • Fencing • Solar

tea plantation

energy

• Equipment for sprinklers

Farm Credit: NBP also provides the following subsidized with ranges of 3 months to 1 year on a renewal basis.
• Operating loans • Land

improvement loans

• Equipment loans for purchase of tractors, farm implements or any other equipment • Livestock loans for the

purchase, care, and feeding of livestock

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. 3.11.2. CORPORATE FINANCE Working Capital and Short Term Loans: NBP specializes in providing Project Finance – Export Refinance to exporters – Preshipment and Post-shipment financing to exporters – Running finance – Cash Finance – Small Finance – Discounting & Bills Purchased – Export Bills Purchased / Pre-shipment / Post Shipment Agricultural Production Loans

Medium term loans and Capital Expenditure Financing: 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 their clients’ vision. This type of long term financing proves the bank’s belief in its client's capabilities, and its commitment to the country.

Loan Structuring and Syndication: National Bank’s leadership in loan syndicating stems from ability to forge strong relationships not only with borrowers but also with bank investors. Because they understand their syndicate partners’ asset criteria, they 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. Their syndication capabilities are complemented by their own capital strength and by industry teams, who bring specialized knowledge to the structure of a transaction. Cash Management Services: With National Bank’s Cash Management Services (in process of being set up), 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 NBP 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.

3.12. INTERNATIONAL BANKING
National Bank of Pakistan is at the forefront of international banking in Pakistan which is proven by the fact that NBP has its branches in all of the major financial capitals of the world. Additionally, NBP have recently set up the Financial Institution Wing, which is placed under the Risk Management Group. The role of the Financial Institution Wing is:• To effectively manage NBP’s exposure to foreign and domestic correspondence • Manage the monetary aspect of NBP’s relationship with the correspondents to support trade, treasury and other key business areas, thereby contributing to the bank’s profitability • Generation

of incremental trade-finance business and revenues

3.13. NBP offers:
• The lowest • Access to

rates on exports and other international banking products

different local commercial banks in international banking

3.14. EXCHANGE RATES Rate Sheet
Treasury Management Group September 1, 2006 Country Selling Buying sight 203/2006
U.S.A 59.85 U.K 110.18 EURO 74.76

59.65 59.53 Rates for Currency Notes & TCs 109.82 109.55 Selling Buying 74.51 74.41 U.S.A 60.45 58.94 50.06 49.92 SAUDI ARABIA 16.12 15.71 48.29 48.16 U.K 111.29 108.46

CANADA 50.22

SWITZERLAND 48.45 AUSTRALIA 45.87 SWEDEN 8.04

45.72 45.60 JAPAN 0.5528 0.5386

8.01 7.99 EURO 75.51 73.67 0.5455 0.5441 9.51 9.49 35.61 35.52 Libor for Calculating Interest on Special USD Bonds

JAPAN 0.5474 NORWAY 9.54

SINGAPORE 35.73 DENMARK 10.03

9.99 9.97 Libor Value 15.91 15.86 6 Moths USD 3.9963 06-Sep-05

SAUDI ARABIA 15.96 HONGKONG 7.70 CHINA 7.41

7.68 7.66 Interest Rates on Old FCY Deposits

7.39 7.37 For 3 Months & Over but Less then 6 Months 204.28 203.74

KUWAIT 204.97

MALAYSIA 15.89

15.84 15.80 USD 0.1000 42.27 42.16 GBP 0.1000

NEWZEALAND 42.42 QATAR 16.45 U.A.E 16.30

16.39 16.35 JPY 0.0000

16.24 16.20 0.0582 0.0581 1.454 1.450

KR. WON 0.0584 THAILAND 1.459

Conversion rates for Frozen FC Deposits, DBC/FCBC, Special USD Bond USD GBP EUR JPY 59.7163 110.3677 74.9917 0.5484

Bill Buying Rates per Unit of Currency
30 Days 60 Days 90 Days 120 Days 150 Days 180 Days USD L/C 59.41

59.16 58.91 58.66 58.40 58.14 108.71 108.18 107.66 107.14 106.63

GBP L/C 109.24 EUR L/C 74.29

74.08 73.87 73.66 73.45 73.25

3.15. SWOT Analysis
3.15.1. Strengths Western union facility: National Bank of Pakistan is only one bank which has the facility of Western union. In this particular scheme money is transfer in Pakistan from abroad. This is the fastest way to money transfer. You can receive the money from bank to see the name and password of particular client. ATM finder:

There is also strength of NBP that they are found the ATM. They now provide this facility to the customers. Government’s bank: In commercial banking system NBP is only the government bank. They make their policies according to the government’s rules and regulations. It enjoys its position in the market of banking system in Pakistan. Government of Pakistan also facilitating the National Bank of Pakistan. Customer satisfaction: Because of government’s bank, it is enjoying the customer’s satisfaction. Customers feels secure their money in NBP. Online banking: There is also strength of NBP that 130 branches are online. It helps the speedy services giving to the customers. There is also help in checking the balances and daily transactions just at one key press. Employee’s loyalty: Employees are very much loyal to NBP. Employee’s turnover is very low in NBP. Very few employees are leaving the jobs in NBP. So it is very big strength that your employees are loyal to your organization. Wide area of services: They provide the wide area of services. They offer no. Of services relating to the banking system like, pension to retired government employees, traffic challans, fees received of AIOU, farms of AIOU, utilities bills, deposits, sales tax , withholding tax, property tax, and various loan schemes. 3.15.2. Weakness Lack of communication between employees: During the internship in NBP I found the problem of lack of communication between the employees and management. They have not very much understanding with each other and not share the work of each other. Punishment is not very strong for employees:

Punishment threat is not very strong for employees. Some employees are not very professional in their field but top management not takes the action against such employees. Public dealing is not very effective: Public respect is not very effective in NBP. Employees are not taking care of the customers, especially in pension and bills department. Staff shortage: There is also weak point for NBP that staff is very short and more staff is required to meet the needs of the branch work. They help from internees. Lack of respect of seniors: They are not a healthy sign for NBP that respect of seniors is not up to the manners. Juniors try to avoid the seniors and no take the help from them. 3.15.3. Opportunities Growing banking system: Nowadays banking system is growing quickly so NBP have opportunities to improve the standard and get the more share in the market. NBP have government back: In growing era there is a chance for NBP to improve itself and increase the shares in the market because it is most trustable due to government’s bank. Increase in economic activities: The economic activities are increase nowadays, so banks are contributes more in economic activities. Banks are played role in trade and commerce. So the business of commercial banks is increase. 3.15.4. Threats Increase in no. of banks: Increase in no. of banks is a threat for National Bank of Pakistan. No. of private banks (commercial and private) are operating their business and provide the same facilities. So increase in no. of banks is a threat for NBP.

Modern type of banking: Modern and computerized banking is required to fulfill the customer’s need. So maximum branches of NBP are worked in old traditional ways. Highly skilled people and management required to meet the new standard of banking. In NBP some employees are totally irresponsible and lack of complete knowledge of banking system. So these employees are creating continuous problems in the system of NBP. The whole structure change to online : NBP have wide network of branches. Only 130 branches are online, so it is very difficult and time consumed to convert all branches to online system. So there is also risk involves that if one commuter of one branch suffers in problem, all system and all commuters of all branches must be turnoff.

4. Performance Analysis
4.1. Financial Performance
In 2002, NBP increased its pre-tax profit to Rs. 6,045 million from Rs. 3,016 million in 2001, an increase of over 100%. The improved profitability was achieved due to a combination of higher interest revenue, enhanced fee income and run off of the amortization of the 1997 Golden Handshake Scheme. Prudent addition to loan loss reserves was made which continues to improve the cash coverage for non-performing loans. All key financial and operating ratios demonstrated improvement. Cost/ income ratio was 0.44 (excluding one off provision of Rs. 832 million for benevolent fund and Rs. 513

million for charge for special separation package) as against 0.52 of the last year. Pre-tax return on equity was 45.27% as compared to 25.85% of the current year and is impressive by any yardstick. Pre-tax return on assets improved to 1.43% as against 0.77% of last year. Capital adequacy ratio of the bank is 14.5%, which is 38% higher as compared to 10.52% of last year. Deposits of the bank increased by Rs. 12 billion. While there was increase in private sector loans due to adjustment / repayment of loans by large public sector entities and substantially lower commodity operations borrowings, advances decreased by Rs. 30 billion.

4.2. Industry analysis
Banking is one of the most sensitive businesses all over the world. Banks play very important role in the economy of a country and Pakistan is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance. It is purchase of car or building of a home banks are always they’re to serve you better. It is play ground or any educational or healthy societal activities the money of banks nurtures them. It is an industrial project or agricultural development of the country the sponsor-ship of banks is very much involved. Banks play very positive and important role in the overall economic development of the country. Pakistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it had acquired a flourishing banking sector. 4.2.1. Comparative Study of Domestic Banking Industry

Nationalization of banks in the seventies was a major upset to domestic banking industry of the country, which changed the whole complexion of the banking industry. With irrational decision at the top all the commercial banks were made subservient to the political leadership and the bureaucracy. Specialized banking institutions were already working in the public sector. The new accountability paradigm changed the business ethics in the banking industry, and with this change started the disaster. Nationalization of banking industry was accompanied by violent changes in the external value of rupee. The commercial banks thus lost their assets management equilibrium, initiative and growth momentum. They ceased to be a business concern and became big bureaucracies. This was accompanied by indiscreet loaning under political pressure. They suffered from three terminal diseases: non-performing loans; higher intermediation cost; and loss of initiative and entrepreneurship. The rise to Labor Unions and Officers Associations made life tough and working conditions ugly to honest, dedicated and industrious workers in the realms of domestic banking industry. The era of nineties was the climax of privatization, deregulation and restructuring in the domestic banking industry and financial institutions. The Muslim Commercial Bank was the first bank to privatize. Followed by Allied Bank limited, United Bank Limited and now the Habib Bank Limited have been privatized. One thing good for that particular period was the recruitment of fresh officers in the domestic banking industry through well-organized policies of Banking Council. With the decay of Banking Council there was flood of insincere, nonprofessional, incompetent candidates directly appointed/ recruited in all the domestic banks of the country.

4.2.2. Public Sector Commercial Banks

National Bank of Pakistan First Women Bank Limited The Bank of Khyber The Bank of Punjab

NBP FWB KB BOP

The government of Pakistan permitted small private sector banks to operate, which indulged in doubtful policies to promote business. The public sector banking, which constituted the backbone, thus continued to suffer because of their approach, size and carried over liabilities. Mehran Bank is the prime example of that kind of lax banking in the country, which ultimately merged into National bank of Pakistan i.e. last resort of domestic banking industry. 4.2.3. Local Private Banks

Askari Commercial Bank Limited Bank Al-Falah Limited Bank Al Habib Limited Bolan Bank Limited Faysal Bank Limited Metropolitan Bank Limited Platinum Commercial Bank Ltd Prime Commercial Bank Limited Saudi Pak Commercial Bank Ltd PICIC Commercial Bank Limited Soneri Bank Limited Union Bank Limited Muslim Commercial Bank Limited Allied Bank of Pakistan Union Bank Limited Mashreq Bank

In the meanwhile, western banks started entering into the business. They, with the support of ruling elite, concentrated on the big business, leaving the routine business to the local banks. This reduced the profitability of the local banks.

4.2.4. Foreign Banks

ABN Amro Bank Al Baraka Islamic Bank American Express The Bank of Tokyo Mitsubishi CITI Bank Credit Agricole Indo Suez Deutsche Bank Doha Bank Emirates Bank Habib Bank A. G. Zurich Hong Kong Shangai Banking

Corporation IFIC Mashreq Bank PJSC Oman Bank Rupali Bank Standard Chartered Bank

4.2.5. Specialized Banks

Zari Tarqiati Bank Ltd. Industrial Development Bank of Pakistan Punjab Provincial Cooperative Bank Limited There are 17 listed banks in Pakistan 2004. Four banks are still not listed, which are Habib Bank, United Bank, Allied Bank of Pakistan, Dawood Bank. Standard Chartered Bank, Citibank, Deutsche Bank and ABN AMRO Bank are main foreign banks in the country. These four banks continue to enjoy a significant share in the market, both in terms of deposits and advances. All the foreign banks of the country are busy to invest heavily in the field technology and e-commerce in order to overcome branch limitation. All the foreign banks have been busy to introduce new products and idea to grab larger proportion of the local markets. Foreign banks are carrying major proportion of local business in credit cards, consumer finances and housing finance. Many domestic banks have increased their general standards. Ours is the age of plastic money. Internet-based services are constantly increasing the number of ATM machines, either by installing their own machines or making arrangements with other networks. The number of Debit Cards has also been increasing at an unprecedented rate. All the domestic and foreign banks vigorously institutionalized consumer financing in the country and earned handsome profits. The borrowing to private sector has also increased which ultimately boasted the profitability of all the domestic banks of the country. In the last 3 to 4 years many domestic banks have been suffering from surplus liquidity crisis mainly due to low demand for credit and slowdown of manufacturing sector in the country. Almost all the banks are now buy to invest in capital markets to increase their exposure in equities. To stop that risky trend the State Bank of Pakistan issued the instructions to follow the Prudential Regulations in letter and spirit and not invest in the capital markets beyond the limits. The domestic bank’s lending under consumer finance and housing finance has also been growing. The analysis of Annual Reports of banks shows that their income from core banking activities has been growing. The other positive point is that there are growing expectations for increase in interest rates.

The growth in advances has started matching growth in deposits. The quality of asset as well liability products have been improving. The ratios of non-performing loans have decreased. The SBP29 Scheme has benefited the banks as well as the borrowers to payoff their long-standing dues. Bank Alfalah is the first to opt for the listing policy of the government and also offered its share to general public. Two of the state-owned banks, Habib Bank and United Bank, have been privatized. Allied Bank of Pakistan was privatized in early nineties. But due to many internal and external reasons it continues to suffer. Some meaningful senior managerial changes would be better at the earliest. Dawood Bank has recently emerged on the banking scenario of Pakistan and it is good addition. The bank has come into existence as a result of acquisition of Pakistan operations of a Sri Lankan bank by a local business group. It is also not listed at the local stock exchanges. Meezan Bank is the first bank of the country, which is carrying complete Islamic banking.

4.3. Comparative Analysis

Comparative Analysis of Domestic Banking Industry of Pakistan (Rs. million) Bank ACB BAH Bop BB FB UNION BANK KB MB Metro MCB Deposit 51,732 34,240 23,767 7,761 24,554 328,182 2,640 5,079 28,515 182,706 Advances 30,035 23,775 6,621 3,298 21,935 167,523 490 3,532 19,444 78,924 Investments 26,759 18,831 8,295 1,328 6,842 142,877 2,118 856 15,013 89,610

NBP PCB PB SPB SB UB UBL

362,866 21,155 14,640 12,341 20,545 37,760 154,915

140,547 10,876 9,016 8,522 11,378 28,890 74,117

143,525 10,306 7,534 6,365 9,844 11,822 69,385

4.4. Marketing Analysis
4.4.1. Market Recognition For the second consecutive year, NBP was recognized as the best bank in Pakistan by the prestigious periodical, “The Banker" UK (a subsidiary of Financial Times Group). Furthermore M/s JCR-VIS Credit Rating Company Limited maintained its rating of AAA, while the standalone rating was raised by one notch to AA-, which is one of the highest in the banking sector. 4.4.2. Future Outlook The reduction in the interest rate environment will overall have a negative impact on the financial sector's profitability in the short term. To meet these challenges we will focus on building our loan portfolio, both on corporate and retail side. On the retail side focus will be on additional fee business while maintaining stringent controls over cost. Longer term we will be focusing on those sectors in the country, which have traditionally received less attention from the financial sector, i.e. agriculture, small and medium enterprises and of the entire range of retail products. Our key strength remains our customer base of over 9 million and we are confident that we are positioned to capitalize on the opportunities.

5. BANK CHARGES EFFECTIVE FROM 01.01.2006 5.1. INTERNATIONAL BANKING
ANNUAL VOLUME 5.1.1. IMPORTS. DURING A CALENDAR

YEAR Ist Qtr. Each Sub.Qtr Minimum LETTER OF CREDIT. Or part or part amount thereof thereof. Per L/C a. Opening of cash Letters of Credit. a. Upto Rs.20 (M) 0.40% 0.20% Rs.1, 000/b. Upto Rs.50 (M) 0.35% 0.20% c. Upto Rs.100 (M) 0.30% 0.20% d. Up to Rs.250 (M) 0.25% 0.20% e. Up to Rs.500 (M) 0.20% 0.15% f. Up to Rs.1, 000 (M) 0.15% 0.10% g. Above Rs.1, 000 (M) 0.10% 0.05% Note. 1. Projected Annual Volume is to be ascertained and got approved by the Competent Authority Commitment letter from customer for paying difference in commission arising out of short fall in business commitment. 2. L/C commission for the increased liability should also be recovered for un-expired L/C period. In case, liability increases (due to exchange rate fluctuation) by virtue of providing forward cover to the customer after opening of L/C. b. Revalidation Commission. On expiry of L/C when the same is revalidated, revalidation commission should be recovered as is applicable for opening of Fresh Letter of Credit, as in ( i-a ) above. L/C commission will be calculated on the amount of liability as per exchange rate prevailing on the date of revalidation

c. Transfer Commission. When a Letter of Credit is transferred to a new beneficiary, transfer commission should be charged as applicable in case of Fresh Letter of Credit as in ( i-a) above. d. Approval from SBP for re-import of Consignment back to Pakistan. Rs.2, 000/(Flat) per case.

e. L/C Cancellation Charges Rs.1, 000/- (Flat) Plus actual telex charges .a. Non-reimbursable Letter of Credit under Barter/Aid/Loan and authorization to Pay. 1% on 1st quarter and 0.30% for each subsequent quarter or part thereof Minimum of Rs.2, 000/b. L/C under Suppliers/Buyers Credit, “Pay as you Earn Scheme” and Deferred payment L/Cs for period of one year. Commission @ 0.40% per quarter or part thereof (at the time of opening of L/C, it is to be charged on full amount of L/C liability plus interest payable thereon for the period from the date of opening of L/C till the expiry of L/C, thereafter commission is to be recovered on six monthly basis on outstanding/reducing liability as per revised Schedule of Charges applicable on that date.) In case forward cover is provided against L/C under Suppliers/Buyers Credit, L/C commission should be recovered at booking rate for which liability voucher is to be passed. This is due to the fact that exchange fee is being recovered in advance. iii. If bills are to be drawn at a Usance under the above Letter of Credit other than PAYEES And Suppliers/Buyers Credit and deferred payment Letters of Credit on yearly basis. 1. Rs.500/- per bill (Flat) to be charged at the time of retirement of bills. 2. Extra Commission @ 0.10% per month is to be recovered/charged for the Usance Import Bill for any period beyond validity of Letter of Credit. Amendments. Rs.750/- per transaction (Flat) or commission under item (I.-a) or (ii-a) Pg-1, if amendment involves increase in amount or extension period of shipment. iv. Issuance of Standby Letters of Credit (i.e.) beneficiaries in foreign countries) directly or through correspondent bank/bank’s foreign branches/offices. 0.40% per quarter or part thereof Minimum Rs.1, 000/- plus Correspondent bank charges if any. Swift/Telex US$ 20/- per telex /swift message Postage US$ 10/- per postage Amendments.

US$ 20/- per transaction (Flat) or if amendment involves (increase in amount or extension in period) comm.. As above V. a. For providing certified photocopies/ transfer of Category Pass Book. Rs.1, 000/(Flat) b. Processing charges for new Import Registration. Rs.1, 500/- (Flat) c. Renewal of Category Pass Book Rs.1, 000/- (Flat) vi. Mark-up in case of Import Bill under Import Letter of Credit. a. 45 Paisas per Rs.1,000/- (or as per Sanction Advice) on daily products from the date of reimbursement till the date of retirement. b. Bank’s commission on bills under Import Letter of Credit. In addition to mark-up as per VI (a) Bank’s commission is to be charged as under:1. If retired within 10 days From the date of lodgment. No commission 2. If retired during 15 days 20 Paisas per Rs.100/subsequent to the period on purchase price. At item (1) above. 3. If retired during next 15 25 Paisas per Rs.100/- days after the period on purchase price mentioned (1) & (2) above. 4. If retired during next 35 Paisas per Rs.100/- 190 days after the period on purchase price mentioned at (1) (2) and NOTE. 1. The Branches in their notice to Importers will indicate the sale price (Marked-up) by adding Rs.11.50 for each Rs.100/- or part thereof and will recover mark-up from the date of reimbursement to the date of retirement of the bill by the client by applying the Slab of rates as per clause (VI) above. 2. Benefit of cash margin recovered at the time of opening of L/C will be given to the customers at the time of retirement of documents.

3. No mark-up will be charged from the date of reimbursement till the date of lodgment of documents received under Import L/Cs where the amount as per reimbursement arrangement is made to the negotiating bank only on receipt of the documents. 4. In case of FIM the following mark-up will apply:i. Mark-up 43.836 Paisas per Rs.1, 000/-on daily product (or as per Sanction Advice) against Regular Credit Line under approved arrangement. ii. In case of Forced Creation of FIM penal charges to be recovered not exceeding Paisas 50 per Rs.1, 000/on daily product basis. iii. In case FIM is created and Bank arranges Clearance of consignment under Sight L/C, 50 Paisas per Rs.1, 000/- on daily products shall be charged from the date of creation of FIM plus 1% handling charges/commission. 5. In case Forced FIM is created due to non-payment on maturity against DA/Suppliers Credit L/C. Commission @ 0.35% is to be charged (once only) in addition to mark-up @ Paisas 50 per Rs.1,000/- from the date of maturity till the date of payment. 6. Bank reserves the right to change the mark-up rate on case to case basis. vii. Import Bills returned unpaid. Handling charges US$ 50/- (Flat) from Forwarding Bank plus Courier charges if any. Viii. a. Collection Rs.750/- (Flat) per collection provided no charges are realized from the correspondent. b. Consignments. 0.20% (Flat) handling charges at the time of registration of contract/ purchase order/ Performa invoice Minimum Rs.500/c. Import against advance payment to suppliers. Rs.750/- (Flat) plus usual remittance charges.

ix. Service charges against Import transactions i.e. Import Bills/PAD/Collection. @ Paisas 10 per Rs.100/- or Re.1/- per mille. Minimum Rs.500/x. Reimbursement charges (payable to reimbursing Banks.) At actual. Charges for borrowing customers as per arrangement. 5.1.2. EXPORTS i. Processing Charges for Export Registration. Rs.200/- (Flat) ii. Letter of Credit. a. Advising. Rs.350/- (Flat) b. Amendment Advising. Rs.250/- (Flat) c. Negotiation of Bills against Letters of Credit issued under Barter/Remittance From SBP. 0.25% Minimum Rs.200/d. Confirmation. 0.25% per quarter Minimum Rs.250/e. Transfer of Export L/Cs. Rs.350/- (Flat) f. Reimbursement payment to other local bank from Non-Resident Rupee Account. Rs.350/- (Flat) iii. If the documents are sent to other banks for negotiation under restricted Letter of Credit. Rs.350/-(Flat) iv. Collection. a. Clean Cheques/Drafts/FTCs. Rs.100/- per Collection (Flat) b. Documentary (on which bank do not earn any exchange difference). Rs.200/- per Collection (Flat) v. a. Duty draw back claims. 0.25% of the amount of claim Minimum Rs.250/- per claim. b. Handling of export documents against which advance payment is received. Rs.200/(Flat) plus postal charges. vi. Collection FEBCs, DBCs, FCBCs, Special USSDBs and coupon. Note. No Charges on E-Form Endorsement & issuance of advance payment slip. 0.20% Minimum Rs.200/- Max. Rs.500/-

vii. Service Charges against export documents sent on collection basis where payment cover is already received to our Foreign Currency Account. @ Paisas 10% or Re.1/- per mille. 5.1.3. REMITTANCES. (i) OUTWARD a. Foreign Traveller Cheques. 1% of the amount of Traveller Cheques sold Min. Rs.200/b. i. Remittance abroad through Foreign Currency Account. Commission @ US$ 1.00 per US$ 1,000/- or part thereof Min. US$ 5.00 Maximum US$ 25.00 plus telex charges Rs.250/- per telex in case of telegraphic transfer. ii. Remittance against surrender of F.C Notes or cash deposited in F.C Account within 10 days from the date of such deposits. Note:- Service Charges @ 1.0% to be recovered from the customers in case cash deposited in FC Account is encashed /converted into Pak Rupees within 10 days from the date of such deposit . In addition to mentioned under b (i ) above service charges @ 1.0% to be recovered in case the remittance amount exceeds US$ 5,000/- or its equivalent in other foreign currencies. iii. Collection for Foreign Currency Accounts c. Remittance abroad other than through Foreign Currency. US$ 5.00 for collection up to US$ 1,000/US$ 15.00 for collection above US$ 1,000/a. Students (for education purposes). Rs.50/- plus telex charges Rs.200/- per telex if Telex required or usual postal charges as prescribed. b. Other than students. Rs.50/- per US$ 1,000/- Min. Rs.200/- and Max. Rs.500/- plus telex charges Rs.300/- per telex for telegraphic transfer or usual postal charges as prescribed. d. Service Charges against issuance of Foreign Mail Transfers (FMTs) Foreign Demand Drafts (FDDs) Foreign Telegraphic Transfer (FTT) & Travellers Cheques (TCs) against Pak Rupee. @ Paisas 10 % or Re.1/- per mille. e. FDD/FTT/FMT Cancellation Charges for foreign currency account. Rs.200/- per item plus telex/postage charges

f. Issuance of Duplicate FDD. Rs.300/- plus usual telex/postage charges C. (ii) I N W A R D a. Home Remittance No Charges (Zero Tariff) b. Others. Nil, if proceeds are credited to an account with the drawee bank. In other case a flat Charges of Rs.10/c. Encashment (Purchase) of Traveler Cheques. Rs.100/-(Flat) d. Service Charges on payment of Inward Foreign Drafts/Foreign Mail Transfers where payment is made to beneficiaries after payment cover is received to our Foreign Currency Account. These charges are to be recovered only when T.T buying rate is applied. @ Paisas 15 per Rs.100 /-Minimum Rs.200/e. Commission/Handling Charges on Deposits of Currency notes for the credit of Foreign Currency Accounts. Nil, if no remittance affected within 10 days of the date of deposit, otherwise remittance charges % service charges as per schedule C b (ii) 5.1.4. MISCELLANEOUS. i. Postage/Cable/Fax/Courier At actual subject to Minimum, as under:a. Postage (Ordinary) Local Rs.25/- Inland Rs.40/ b. Postage (Registered) Local Rs.30/- Inland Rs.50/- Foreign Postage at actual Min. Rs.100/c. Telegram • Local/Inland Rs.50/d. Telex /Fax/Telephone/Swift Local Rs.20/- Inland Rs.25/- per minute Min. Rs.50/Foreign: - . Full Telex L/C/Guarantee and long Message Rs.1, 200/- for full message for Short message Rs.400/- . L/C/Guarantee amendment, Telegraphic Transfer and Miscellaneous messages Rs.1, 200/- for full message. Rs.400/- for short message e. Courier Local Rs.50/- Inland Rs.70/- Foreign Rs.1, 100/ii. Foreign Bills sent for collections returned unpaid Rs.350/- (Flat) plus telegram charges if any.

iii. Inward Collection received (relating to F.C Account) from abroad or local banks/branches and where the payment is demanded in Foreign Currency. US$ 3.00 per US$ 1,000/- or part thereof Minimum US$ 3.00 Maximum US$ 6.00 iv. Inward cheques expressed in foreign currency drawn on foreign currency A/cs received from local/upcountry bank’s branches for payment in Pak Rupees after conversion at authorized dealers buying T.T clean rates. Commission @ Paisas 15 per Rs, 100/- Minimum Rs.200/v. Issuance of proceeds certificate beyond one year. Rs.500/- (Flat) per certificate. vi. Issuance of Business Performance certificate at customer’s request. Rs.500/- (Flat) per certificate. vii. Standing Instruction Charges in Foreign Currency Accounts. US$ 5.00 per instruction

5.2. DOMESTIC BANKING
5.2.1. REMITTANCES. Issuance of Drafts, MTs, & TTs: a. Up to Rs.100,000/- 0.10% Minimum Rs.50/b. Up to Rs.1, 000,000/- 0.05% Minimum Rs.100/c. Over Rs.1, 000,000/- 0.04% Minimum Rs.400/d. Issuance of Duplicate Draft. 1. For account holders Rs.200/2. For non account holders Rs.250/a. Telegram Charges on TTs. (whether through Telex/Fax) Actual, Minimum Rs.75/b. Trunk Call charges on issuance of T.Ts Rs.100/- (Flat) c. Postage on MTs. d. Courier Charges. Actual Minimum Rs.30/- if sent by Registered post locally, Rs.50/- if sent by Registered post Inland on party’s request. Local Rs.50/- Inland Rs.75/5.2.2. PAY ORDER. a. Issuance of pay order:-

1. For account holder Rs.50/- (Flat) 2. For non-account holder Rs.100/-(Flat) Rs.25/- (Flat) from student for payment of fee favoring educational institution b. Issuance of duplicate Pay order 1. For account holder Rs.100/- (Flat) 2. For non-account holder. Rs.150/-(Flat) 5.2.3. Issuance Of Call Deposit Receipt 1. For account holder Rs.50/2. For non-account holder Rs.100/b. Cancellation/Issuance of Duplicate Call Deposit Receipt. 1. For account holder Rs.100/2. For non-account holder Rs.150/Iv. Inland Travellers Cheque. (Other than NBP if any) 0.25% Minimum Rs.25/iv. Inland Letters of Credit. (Opening commission) Annual Business Up to Rs.50 (M) 0.40% per quarter or Up to Rs.75(M) 0.35% part thereof Up to Rs.100(M) 0.25% Above 100(M) Negotiable Minimum Rs.1,000/= a. Amendment Charges. A) Without increase in amount or extension in period of shipment Rs.500/- (Flat) B) Involving increase in amount and/or extension in period of shipment Rs.500/- per transaction/commission as per item (iv) above b. Advising/Amendment/Confirmation Charges of (Inward) Inland L/Cs. above Rs.500 (M) Note: Charges negotiable on case to case basis under approval of Business Group Head. Same as applicable in case of Export L/Cs Rs.500/- (Flat)

. vi. Authorities to encash cheques. No commission by issuing branch but charges on purchase of cheques will be recovered commission @ 0.80% Minimum Rs.25/- plus Courier Charges Rs.30/vii. PO/DD/TT Cancellation 1. For Account holder Rs.50/2. For non-Account holder Rs.100/DD Issuance Charges Rs.200/-(Flat) 5.2.4. BILLS. i. Collection:a. Documentary Bills. 0.40% Minimum Rs.50/- plus postage/courier charges. b.i. Clean (including cheques/dividend warrants/bank drafts etc) ii. For NBP own cheques/DD/PO 0.20% Minimum Rs.50/- plus postage/courier charges as mentioned above. NOTE: No commission should be charged on out station cheques, drawn on places where there is an office of the bank, which are received from Government Departments for credit to Government Account. This waiver does not applied to outstation cheques tendered by the PUBLIC in payment of Government dues upon which the Bank’s usual charges should be levied. As per Zakat & Ushr Ordinance 1980, (Amended in 1997) banking services and services connected with the assessment collection or disbursement of Zakat & Ushr realizable on compulsory basis under this ordinance are to be rendered free of charge. Hence no collection charges shall be recovered on cheques drawn on Central Zakat Fund for crediting to account of their beneficiary. 0.15% Minimum Rs.50/- plus applicable postage/courier. iii. Purchase of bills, cheques etc.` a. Documentary Bills other than those drawn against Letters of Credit b. Clean Bills (trade cheques, bank draft etc.) a. 0.25% Minimum Rs.50/- plus applicable postage/courier charges. b. 0.40% Minimum Rs.25/- plus applicable postage/courier charges.

NOTE: i. Postage/Courier Charges are to be recovered on collection/realization of each instrument(whether clean or documentary). However, in case where party has deposited more than one cheque/instrument on a particular date to be collected/drawn on the same branch of the bank, postage/courier charges are to be recovered (once only.) ii. Collection of cheque of small amount may be effected through normal dak (other than Courier) if specially requested by the party in writing for which he will be responsible for the delay. b. Other cheques/demand instruments (Like dividend warrants). 0.60% Minimum Rs.20/NOTE: i. Collecting agent’s charges if the Collecting bank’s is other than the Bank will be extra. ii. Telegram/Trunk Call Charges will be Extra, if fate of the instruments is asked for by telegram. c. Returning Charges for Documentary & Clean Collections, in case the instruments are returned unpaid. Rs.100/- + Courier Charges as above (Documentary) Rs.100/- + Courier Charges as above (Clean). d. Mark-up shall be applied as under on bills purchased/negotiated. If retired up to 21st days from the date of Purchase but during next 210 days (cushion period) 40 Paisas per Rs.1, 000/- per day e. Storage Charges. i. No Charges, if cleared within 3 days of its receipt by the branch. ii. Re.1/-per packet per day Min. Rs.50/iii. Documentary bills drawn against Inland 5.2.5. Letters of Credit. Charges for borrowing customers as per arrangements. 1. SIGHT BILLS. a. Negotiating end Negotiating Commission @ 0.50% Minimum Rs.500/b. Collection Charges (Inland L/Cs) Rs.500/- (Flat)

c. Collection Charges for restricted L/C (where Negotiation is restricted to some other Banks and presented to us for forwarding). Rs.500/- (Flat) d. At opening end (at the time of retirement) rate of Mark-up. i. If retired within 3 days from the date of lodgment Mark-up @ 45 Paisas per Rs.1, 000/on daily product from the date of negotiation. ii. If retired after 3 days of lodgment Mark-up @ 45 Paisas per Rs.1, 000/- on daily product plus Banks Commission @ 0.25% NOTE. No mark-up will be charged from the date of negotiation till the date of lodgment of documents received under Inland L/Cs where the payment as per reimbursement arrangement is made to the negotiating bank only on receipt of documents. iii. If negotiation is restricted to some other bank. Inland L/C cancellation charges Rs.500/- (Flat) Forwarding Bank/Branch would charge handling charges of Rs.200/- (Flat) per bill (commission will not be applicable). 2 USANCE BILLS At opening end. a. Handling Charges. Rs.0.40% per bill Minimum Rs.500/- at the time of retirement of bill. b. If bills matures after expiry of L/C. Usual Charges as in (a) above plus delivery of documents against acceptance commission @ 0.10% per month on bill amount on realization from the date of expiry of L/C but Minimum Rs.500/c. Discounting of Inland Usance Bills. Markup @ 25 paisa per Rs.1000/- on daily product (or as per Sanction Advice) plus flat Commission @ 0.1%. 3. At collecting end. a. Collection Charges Commission @ 0.30% Minimum Rs.200/b. In case of purchase. Usual Commission as in (a) above and keep mark down @ 0.75% for every 15 days from the date of purchase till the date of maturity. NOTE

All other charges as per quote (i) & (ii) and (c) above wherever applicable will be extra. 5.2.6. PROJECT FINANCES/ADVANCES Following Charges may be recovered in-addition to interest/mark-up return on investment. 1. Project Application Fee (Non-refundable) Following charges will be recovered in addition to mark-up/Return on Investment. Miscellaneous (i.e. is charges for documentation, evaluation of security and maintenance thereof etc.) At actual, in addition: 1. Project examination fee @ 0.50% (flat) after acceptance of sanctioned by the company but before disbursement of the total amount of sanctioned (Funded and Non Funded Both) Minimum Rs.15, 000/2. Legal documentation fee. @ 0.25% Flat after acceptance of sanctioned by the Company but before disbursement of the total amount of sanctioned (Funded and Non Funded Both) 3. Project monitoring fee @ 0.25% p.a. payable quarterly on outstanding amount (Funded and Non Funded Both) 4. Commitment fee @ 1.50% p.a. payable quarterly on the un-disbursement amount of sanction (Funded only) 5. Front End/Arrangement Fee. @ 1.50% (Flat) wherever applicable as per Bank’s discretion. Concessional rates are admissible on case to case basis with the approval of Head Office Miscellaneous Charges for issuance of NOC. For issuance of NOC at the request of customers/clients for creating additional/pari-passu charges/second charges on their fixed assets for acquiring further project finance from other Bank’s/Financial Institutions. Rs.10, 000/- (Flat) NOTE: Recovery of these charges waived from:

a. Clients having total facilities exceeding Rs.100 (M) b. Clients allowed facilities under consortium financing. 4-a. Redemption of charge fee to be recovered from party when bank officers are called before registrar for redemption of the mortgage. Rs.2, 500/b. Vacation of charge with SECP. Rs.1, 000/c. Registration of charge at Registrar Office with SECP. Actual + Rs.2, 000/- per case. d. To arrange lien on securities issued by other Institutions. Rs.250/- per trip. 5.2.7. GODOWN CHARGES a. Godown Rent. Actual b. Salaries of Godown Keepers/Chowkidars Actual c. Godown Inspection Charges. i. Without any municipal limit. Actual Treatment Debit to party account if Godown inspection charges are up to Rs.500/- for payment to staff. Debit to party and credit to bank income account if inspection charges are more than Rs.500/- and reimbursement of TA/DA charges through debit to “Expenditure Account” with the approval of competent authority. NOTE. Inspection of Godown by Regional/ Head Office Auditors/External Auditors and occasional surprise checking by Regional Headquarters etc. No such charges will be recovered from the parties as it is a part of normal bank duty. d. Delivery Charges: - If a godown keeper is not posted conveyance Charges will be recovered. At actual e. Other incidental expenses. Insurance premium. Legal Charges. At actual f. Handling charges on marking of lien on Govt. Securities Rs.500/- (Flat) per customer

g. Marking of lien on Securities issued by NBP for other banks Rs.500/- (Flat) per customer NOTE: While recovering the miscellaneous Charges like godown rent, godown staff salary, and inspection charges the amount recovered from the borrowers shall not exceed the total rent of godown, salary of the godown staff etc. In other word miscellaneous charges should be levied as per actual and not become a source of profit to the bank. However, reimbursement of actual conveyance charges to be made to concerned staff to the debit of Expenses Account after proper approval of the competent authority. 5.2.8. STANDING INSTRUCTIONS FEE. Standing Instructions fee will be recovered in addition to the usual charges on remittances, if any. Rs.100/- per transaction. SALE AND PURCHASE OF SECURITIES SAFE CUSTODY ARTICLES IN SAFE DEPOSITS & SAFE DEPOSIT LOCKERS. A. I. Sale and purchase of shares and Securities a. Rs.0.50% up to Rs.10, 000/- of purchase price or cost thereof Minimum Rs.50/b. Rs.0.10% on amount exceeding Rs.10, 000/- Minimum Rs.75/ii. Shares & Securities held in safe custody as a result of order of purchase executed through the bank (to be recovered up front) Rs.0.50% (Flat) per annum or part thereof of the face value with the minimum of Rs.300/NOTE a. The above charges is in addition to brokerage. b. Commission is not to be recovered on purchase of newly floated securities, where it is payable by the Govt. / Govt. Agencies and from the subscribers to new Shares floatation. A rebate of 50% in Safe Custody Charges will be applicable to all clients maintaining Minimum balance of Rs.1 billion or above throughout the year in NIDA Account. c. When orders for purchase or sale of shares/ securities are executed through the banks, other offices, all incidental expenses such as postage, insurance charges etc., incurred will be recovered in addition to the commission / brokerage charges.

iii. Withdrawal fee on shares and securities held in safe custody (to be recovered at the time of withdrawal.) a. 0.25% up to Rs.10, 000/- of the paid up or face value Minimum Rs.50/b. 0.125% on amount exceeding Rs.10, 000/iv. Withdrawal fee on Government Securities. Rs.10/- per scrip. Where share and/or securities sold are from those held in safe custody, either commission on sale of shares and securities as shown against item (I) or withdrawal fees as shown against item (iii) whichever is higher, will be charged but not both. v. Charges for collection of interest/ return / dividend. 0.30% on the amount of interest/return/ dividend collected/ Paid Minimum Rs.20/vi. Handling Charges for conversion, renewal, consolidation or Sub –division of Government Securities. Rs.10/- per Scrip. vii. Public Flotation of Shares/Modaraba Certificates/ Offer for Sale of Shares/Dis investment/Term Finance Certificates. Commission @ 0.50% plus Out of Pocket Expenses - actual NOTE: Commission negotiable on case to case bases. viii. Payment of Dividend Warrants through designated branches. Commission @ 0.50% plus Out of Pocket Expenses – actual NOTE: Commission negotiable on case to case basis Safe custody Articles in Safe-Deposit lockers. Safe Deposit fee (to be recovered in advance at the time of deposit or at the commencement of each Quarter) A. For Boxes and Packages. Rs.4/- per 100 cubic inches or any part thereof with a minimum of Rs.300/- per quarter. B. For Envelopes. (Contents unknown) Rs.2/- per 25 square inches or any part thereof with a minimum of Rs.300/ix. Safe Deposit Lockers Fee for Safe Deposit lockers (to be recovered in advance or at the commencement of the period yearly, half yearly, quarterly as the case may be.) a. Up to 0.40 cft Small Rs.1, 000/- per annum From 0.41 to 0.80 cft

From 0.81 to 1.35 cft Medium Rs.1, 500/- per annum From 1.36 to 1.75 cft From 1.76 to 2.00 cft Large Rs.2, 500/- per annum From 2.01 to 2.50 cft From 2.51 to 3.00 cft Extra- Large Rs.4, 000/- per annum Key Deposit. Deposit will apply at the Small Rs.3, 000/‘Time of issuance of new ‘Lockers. Medium Rs.4, 000/Large/Ex-Large Rs.4, 000/Breaking Charges. Rs.2, 000/- per locker/Actual (whichever is higher) x. SERVICE CHARGES FOR INVESTMENT IN PAKISTAN INVESTMENT BONDS (PIB) Maximum Custodial charges. Rs.100, 000/- per annum per PIB issue or Rs.8, 333/- per month. Face Value Balance of up to PKR 1 Million No Charges. Face value Balance of PKR 1 Million to PKR 200 Million Maximum 0.05% p.a. with a Minimum Charge of PKR 1,000/- per month Face Value Balance in excess of PKR 200 Million PKR 8,333/- per month Note: Custodial Service Charges are to be calculated on month-end balances & charged to customers monthly, with no charge on initial sale/origination of transaction. Subsequent sale/transfer to an IPS account of another PD is subject to a charge of Rs.1, 000/- per transfer/transaction. The aforesaid charges are linked to each individual issue and should not be levied on aggregate basis. 5.2.9. GUARANTEES.

i. Charges for borrowing customers. As per arrangement. ii. Guarantees issued to shipping companies in lieu of Bill of Lading or endorsement of copy of Airways Bills in absence of original Airways Bill. Rs.1, 000/- (Flat) iii. Guarantees issued to Collector of Custom in lieu of payment of Export Duty which are valid up to 6 months. 0.50% per quarter or part thereof Minimum Rs.1, 000/- (2.00% per annum). iv. Issuance of foreign guarantees (i.e. beneficiaries in foreign countries) directly or through correspondent bank/bank’s foreign branch/offices 0.40% per quarter or part thereof Minimum Rs.1, 000/- plus correspondent bank charges if any. Swift/Telex US$ 20/-per Tlx/Swift message Postage US$ 10/- per postage Amendments in (iv) above. US$ 20/- per transaction (flat) if amendment Involves (increase in amount extension in period) commission as above. v. L/G under Suppliers/Buyers Credit “Pay as you Earn Scheme” Commission @ 0.40% per quarter or part thereof (at the time of issuance of L/G it is to be charged on full amount of L/G liability plus interest payable thereon for the period from the date of issuance of LG/ till the expiry of L/G thereafter commission is to be recovered on six monthly basis on outstanding/reducing liability as per revised Schedule of charges applicable on that date.) In case forward cover is provided against L/G under Suppliers/Buyers Credit, L/G commission should be recovered at booking rate for which liability voucher is to be passed. This is due to the fact that exchange fee is being recovered in advance. vi. In case of L/G under taking to be issued favoring any bank for providing forward cover exchange risk under Suppliers/Buyers Credit on behalf of applicant. vii. Other Guarantees viii. Guarantees issued against collateralization of foreign currency deposit. L/G commission to be charged @ 1.6% per annum to reducing liability on booked rate Minimum Rs.1,000/- 0.40% per quarter or part thereof Minimum Rs.1,000/- (1.6% per annum) up to one year) a. Deposit More than US$ 500,000/- 0.25% per quarter or part thereof Minimum Rs.1, 500/- (1% per annum) b. Deposit more than US$ 500,000/- up to 5,000,000/- 0.125% per quarter or part thereof Minimum Rs.1500/- (0.5% per annum). c. Deposit more than US$ 5,000,000/- Nil

d. Amendments Rs.300/- per amendment (Flat) or 0.40% per quarter or part thereof if amendment involves increase in amount of extension in validity Minimum Rs.500/NOTE. 1. All Guarantees issued by bank must contain specific amount and expiry date and commission to be charged from the date of issue till expiry of the L/G up front. 2. If period of Bank Guarantee exceeds one year than commission be recovered on year to year basis. 3. For calculation purpose a quarter would consist of 3 months starting from the date of issue of Guarantee (Three calendar months will make one quarter.) 5.2.10. MISCELLANEOUS CHARGES 1. Service Charges on PLS Saving Accounts including dormant, inoperative and unclaimed with monthly average balance below Rs.5,000/-. Exemptions:The following categories of account holders are exempted from levy of the Service Charges: i) Students ii) Mushtahiqueen of Zakat iii) Employees of Government/ Semi- Government institutions drawing salary / pension. iv) Person availing any consumer product related finance facility from the bank would also be exempt from levy of service charges. v) Ex-NBP employees or their spouses drawing pension/medical from the bank. Rs.50/per month w.e.f. 01-02-2004 2. Service Charges on Current Accounts including dormant, inoperative and unclaimed with monthly average balance below Rs.5, 000/-. Rs.50/- per month w.e.f.01-01-2004 3. Duplicate statements of account older than one year Rs.50/- per statement of account 4. Issuance of SBP/NBP Cheques. Rs.300/- per cheque 5. Handling charges for issuance of students exchange remittance permit and maintenance of record for subsequent remittance. Rs.200/- per annum

6. Stop payment of cheque. Rupee A/c Rs.150/- per instruction. F.C A/c US$ 5/- per Instruction 5.2.11. EXTRA. Stop payment charges are to be levied one time for stop payment instructions whether it is for one or more cheques. 7. Clearance of Cheques where Clearing House Facility not established. No Charges. 8. Collection/encashment of profit coupons on Govt/Saving Centers under lien to us. Rs.200/- per trip. 9. Verification of test for other banks/parties Rs.250/- (Flat) 10. Credit information report including credit report on foreign suppliers/buyers. Foreign correspondent/reporting agencies charges at actual + Tlx. Charges. 11. Registration of contract with SBP in respect of private foreign currency loan obtained by borrowers in Pakistan from foreign lenders. Handling charges Rs.5, 000/- (Flat.) 12. Confirmation of balances to auditors. Rs.400/13. Balance Confirmation Certificate (required by customers other than auditors). Rs.100/- per certificate. 14. Charges for Cheques returned unpaid (when fault lies with the customer) to be recovered from the client on whose behalf the instrument is being collected and collecting bank will apply these charges. In case bearer cheque returned on the counter no such charges will be applicable. Rupee Account 200/- per cheque. F.C Account US$ 5/per cheque. 15. Issuance of new cheque book in lieu of lost cheque book (Rupee A/c only). These Charges are in addition to stop payment charges as prescribed in (4) above. Rs.75/- per cheque book in rupee Account. US$ 2/- in F.C Account. 16. Issuance of loose cheque. Rs.50/- per cheque Rupee A/c US$ 1/- F.C A/c 17. Account closing charges. Rs.250/- for Local Currency or entire amount if balance in the account is below Rs.250/- . US$ 5/- for Foreign Currency or entire amount is below US$ 5/No charges on closing of old frozen FC A/cs 18. Issuance of Cheque Book Rs.2.50/- per leaf Mailing Charges for Cheque Book. Actual.

NOTE. No Charges will be recovered from customers maintaining deposit balances of US$ 25,000/- and Above or equivalent of Rs.1/- (M) and Bank Staff are also exempt from levy of this charge. 19. Charges from employer on Salary Disbursement Services. Rs.25/- per salary account per month. NOTE: A number of Commercial Organizations (other than Govt.and Semi-Govt. and Autonomous Bodies) disburse salary to their employees through our branches. Where such organizations do not maintain sufficient funds or route sufficient business through our bank to justify workload of salary disbursement, bank is justified to claim charges from them for the additional workload. We can not charge individual accounts under Prudential Regulations. We can however, charge the employers where they do not maintain sufficient funds or route ancillary business through our bank. We must charge them for disbursement of salary to their employees. ATM Facility. ATM card will be issued free of cost. However, annual renewal fee of Rs.300/- will be charged. Transaction cost for NBP customer using another bank ATM under 1-LINK ATM SWITCH Service. Rs.15/- per transaction Tariff for Corporate Customers & MNCs With aggregate exposure of over Rs.500/- Million (Both refunded and non funded) and in case of all MNCs L/C Opening guarantee issuance and remittance (Funds transfer) charges. As per negotiation with the customer. 5.2.12. WAIVER OF CHARGES FOR CUSTOMERS MAINTAINING MONTHLY AVERAGE BALANCE OF RS.2.000 (M) AND ABOVE IN CURRENT ACCOUNT OR RS.5.000 (M) AND ABOVE IN PLS SAVINGS ACCOUNT/NIDA ACCOUNT a. Commission on DD/TT/MT & pay orders. b. Cancellation/Issuance/Duplicate Pay orders. c. Cheques returned unpaid. d. Stop payment of cheques. e. Issuance of new cheque book in lieu of lost cheque book. f. Issuance of Duplicate statement of account older than one year. g. Issuance of loose cheques.

h. Commission on Overseas Bills/Inland Bills for collection business. (Subject to recovery of postage, courier, fax, telex, trunk call charges wherever applicable).

5.2.13. BANK CHARGES FOR GOVERNMENT BUSINESS. A. IMPORT: a. Cash Letters of Credit Less than Rs.250, 000/- 1/8% (0.125%) of the value of the letter of Credit. Rs.250, 000/- and above. 1/16% (0.0625%) of the value of the letter of credit. b. Non-reimbursable letter of credit under Barter /Aid Loans/Authorization to pay. 3/8% (0.375%) irrespective of the value of the letter of credit. NOTE In addition to above, branches will recover the actual cable/telex/swift charges where LCs are desired to be established through cable/telex/swift and confirmation charges of foreign bank’s if foreign bank’s confirmation is also to be added on opener’s request. The above concessionary rates/charges will apply only to those Letters of Credit which cover imports by the Government routed through State Bank of Pakistan. In case LC is received directly from the importing agency, normal charges are to be recovered.

6.Tech Society Branch Lahore
6.1. INTRODUCTION:
It is an old branch of national bank of Pakistan. It is followed the instructions and under control in regional head quarter (east region). It is called as a big branch which has required 10 million rupees daily in terms of reserves to meet daily requirement of transactions. It has following accounts with regional office, 1. general account 2. Suspense Account 3. Commission Account In public they deal in two accounts i-e. 1. Current Account 2. PLS Account They provide lot of services like. 1. Deposits 2. Advances 3. Pension 4. Foreign Exchange 5. Compliances 6. Bills 7. ATM

8. Utility, bill, traffic challan, admission of AIOU. 9. Locker’s Services 10. Western Union (By name only) In this branch at time 20 executives are providing service. 2 assistant voce presidents are serving at this branch. M. Zulfiqar (manager) and Ifzad Butt (Advances officer). In this year two performance awards get by the branch.

6.2. LEARNING AS A STUDENT INTERN:
There are following learning points for me in the bank. 6.2.1. Duties In my first week in NBP, they assign me worked in pension department. Pension manager Mr. Muhammad Iqbal trained me very nicely and I learned lot of things in this department. They give the pension to retired Govt. employees. There are three type of pensions given, 1= Provincial 2= Central 3= Defence These are different according to their PPO numbers For example: Provincial PPO 123456 Central PPO 12345/pak Defence PPO da/dg1/gh/4 etc. I am full trained now in this particular job and I serve 1000 people in this week. How to fill farm? How to enter in ledgers and balance account and what is file and book and all other things relating to pension department. In second week I perform following tasks relating to the banking system.

In second week I worked on opening of account. In this week I repeatedly performed this activity. In third week they assign me with operation manager Mr. Numan sagheer He handled the activities relating to the branch; check all the work in the branch. He gave me official computer. In this week I type and print so many letters for example; • Statement of account • Letter of tax verification • Letter of issuance of clearing certificate • 4 letters for cheques clearing • Letters of relieved of transfer employees from this branch to another branch • Joining letters of new employee come from other branch through transfer • Exceptions reports of Mr. Saeed and so many other things. I also print and type the data of advances department and foreign exchange departments. Cheques clearing daily sheet is also made by me in this week and I am assisted by the other officers. I also learn about the reserve of the branch and daily finances need by the bank and also get some raw information about the opening new accounts. In fourth week I assign the same task and learn some more complex and major operation of Sir Numan Sagheer I learn about accounts in which the branch deal with the main and other branches, these are as follows; 1. General Account 2. Suspense Account 3. Commission Account 4. Exchange Account In general account the branch debt or credit the other branches of the NBP. Usually they debit or credit the main branch which transfers the cheques on this. In suspense account branch expenses are made and at the end of six months period inform and show the balance to main branch. In commission account bank charges commission against its services. In exchange account they also earn, so from last two accounts branch receives earnings from main branch against its services.

Secondly in this week I also learn hoe to open an account in the branch, it is a procedure and after it bank open an account. On computer I type and print so many letters like, Reconciliation letter Relieved letter Joining letter Medial recovery letter And at the end I also scroll the challan of Government and pass vouchers. In first three days of fifth week there are busiest days of pension department so I help the again pension manager. So first three days serve in this particular task. In this week I do same job again and print letters, reports, statements and daily clearing statement of cheques. Also work with Mr. Shafique and from him I learn about opening an account, payment order and demand draft. Payment order is made to send payment with in city and draft is made for payment outside the city but inside the country. S C is that when cheques are coming from outside city for cash and those cheques which come from branches inside city are sent to clearing house, so I made the statement to clearing house for clearing cheques. In fifth week I performed following activities: Monday On this day I perform the duty on the seat of bills where following work is being done, Opening an account Issue new cheques books Make a payment order Making the draft Cheques send for clearing Along with this task I also enter the daily post letters in the letter register. This is very busy task is bank. I help the officer in this seat.

Tuesday On this day I join the duty with passing cheques of PLS A/C. There are fifty three books of signatures cards of A/C holders. So I find the A/C in these books and then gave to the executive officer to verify. In this whole day I perform this particular task. Wednesday The day is also as above routine to sit in front of computer, scroll following files, Income tax Sales tax Withholding tax Provincial Central Property traffic So I also make up these files separately, scroll them sequence and filed these files. Along with this task type and print the letters, reports and work sheets. Thursday Mr. Iqbal assigns me the task to rearrange lockers list and set them in a sequence and print them on pages. Particular are these, Name Address Amount of rent Security Expiry date Locker no Key no Folio no

All the day is served in doing this particular task. Friday On Friday the accounts of holders of expired lockers are checked. Some have balance in their account but most of them have non in this branch. Rent from those holders how balances have has been deducted from their accounts through vouchers and to remaining holders reminding letters have been sent. This is the end of Friday.

6.2.2. Problems faced by branch: During my internship at this particular branch of national bank of Pakistan, there are following problems I have found which are directly affect on efficiency and performance of the bank. There problems are also called as an internal problems. So these are discussing below. 1. Lack of communication among the employees: During the period of my internship I found this problem as a biggest problem that, they are not very effective in communication between themselves. They do not share the experience with each other and do not care the other employee. If one employee has a problem, then he asked to other, but he does not give clear solution to that problems. They are shows the facial expressions against each other. Pension manager and other employees are always tried to gain cash/performance award and use the references to get

it. They are talk against each other in front of me. So finally it is very needy for a public services organization to keep atmosphere friendly among the management and employees. National bank of Pakistan (Tech Society Branch) is lack in communication skills among the employees.

2. Ineffective public dealing: There is also a big issue that they think its government’s bank so it does not care customers. It is a wrong perception. There must be a good public dealing in public service organization. If one customer asked a question twice. They angry on him and stop working. I personally experienced in pension department. The manager pension (Mr. Iqbal) have no respect to the old pensioner and he used wrong wording against them same is also happened in bills executive in bills (Mr. Shafique) is also angry on Customers, when they asked question twice, so there should be solve this problem to create a good environment of the NBP. 3. Lack of commitment: Lack of commitment is also a bib problem faced by the national bank of Pakistan (wahdat road branch). Employees are not committed to the work and their duties. This is very common problem. For example, Rao Ikhlaq not received the letters from last two months. ATM machine is under Rao Ikhlaq but it is run by operation manager. Mr. Kamran not attached the scroll at time. Mr. Qamar Zaman going on leave of 3 days but he does not come back even after 3 weeks. So internees are performed duties on his seat. So employees are not very committed to their jobs and duties. Top management is also not very committed to this branch. They are not provided employee after transfer of the Rao Ikhlaq. One executive on leave while other transferred. But not a single executive provide to the branch finally it is conclude that there is a lack of commitment from employees and top management also from employees and Top management also. 4. Low Efficiency of employees: Efficiency of employees is also low at this branch. For example Mr. Qamar Zaman Aulik has 10 years experience at national bank of Pakistan but he is not professional even at single seat in the bank. Where he assign the result is zero. During my internship firstly he works in advances. He does not sent returns to head office at last dates. 95% of returns are not sent to the regional head quarter. So he was not too much professional. After this he assign in passing the cheques but results are same (zero). So for this efficiency is very low at this branch.

5. Not very regular and punctual: Regularity and punctuality shows the character of a big and good executive. But this problem is also faced by the NBP (Wahdat road) many executive not come at time. For example Mr. Saeed compliance officer came 10 A.M. While bank is started at 9AM. So some other executives are also not coming at time. So there must be solved that problem by the Top management. In regional head quarter Mr. Munawir Shah is HRM assistant manager is also come at 10 Am. 6. lack of computing skills: Computing skills are also low, some executive are very efficient in computing skills but some are not totally aware from this system. For example ATM machine at this branch is only handled to Mr. Imran operation manager. When operation manager is on leave due to heart patient, ATM machine is off not worked because no body knows to run this machine. Western Union is not worked effectively. The person who handled western Union is careless and other employees are not taken interest in tat field. So there is western Union for just name actually it does not worked. 7. Misuse of resources: Resource are very needy, so there must be avoid to misuse the resources but in this branch it is reverse case, there is very wrong use of the resources, employees does not take care of resources and not used them in right direction. For example wrong printing, extra printing, after service time Mr. Hasnain at token used telephone almost one to two hours to take personally outside the bank. So these are the real problems which are faced by the bank. Finally it is suggested that if these problems are solved there are much more chances for increase the performance of NBP. Particularly this branch. 6.2.3. NEW KNOWLEDGE ACQUIRED During the internship there is practical knowledge acquired about the banking sector. What activities are performed by banks and how to deal with public? Also commitment about work and operations of banks. Financing and credits and other public services are performed by the banks. What are implementations of banking rules in banking sector? And much learn about the various executive’s experiences and their skills. What is role of higher authority (manager) in decision making and how to solve the problems? How much money or reserves are used to meet the requirements in the branch. What are the duties of operation manager and how to pay cheques and all procedure relating to opening account in the banks?

6.2.4. Problem encountered: During my internship in this bank, the problem which I faced that was proper training. They do not provide the proper training to the internees. They assign the intern only few seats in the bank.

7. Bibliography
7.1. www.nbp.com.pk 7.2. Mr. Saeed compliance officer 7.3. Mr. Numan Sagheer operation manager 7.4. Mr. Iqbal pension officer 7.5. Mr. Ifzad butt assistant vice president 7.6. Mr. Shafique bills officer 7.7. Ch. Muhammad Sharif vice president and former manager in this branch

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