Professional Documents
Culture Documents
Supervisor: _______________________________
Marking Scheme for Internship Report Writing
Marks Marks obtained
Prefatory part 5
• Title page
• Acknowledgement
• Executive summary
• Table of contents 4.5
Introduction of the sector/organization 10
• Brief introduction of the organization’s
business sector 7
• Overview of the organization
• Organizational structure
Detailed description of internship program 10
• Plan of your internship program 6
• Training program
Organizational analysis 15
• Structure of the MIS Department
• Functions of MIS Department
OR
• Structure of the department you worked 10
in (Other than MIS)
• Feasibility Report of computerizing the
department you worked in (Other than
MIS)
• Critical analysis 20
• SWOT analysis
9
• Conclusion
• Recommendations
Internship Report Write Up 5
3
Referencing and Annexure 5 3
Total 70 42.5
Different parts of the internship report are not in
proper sequence as required.
You did not provide the critical analysis and
conclusion.
You did not provide the overview of the competitors.
You have included irrelevant data in
departmentalization.
Other comments have been mentioned in the report.
Internship Report on
National Bank of Pakistan
Main Branch Bahawalnagar
PRESENTED BY:
MUHAMMAD IMRAN
Class: MBA-MIS
STUDENT ID :
mc060400994
Session:
Spring 2009
Internship Date:
Nov 11th to Dec. 22nd 2008
Report completed:
June 27th 2009
Executive summary
This report is about my internship program with NATIONAL BANK. In this
comprehensive report, I have discussed about every major aspect of the bank, which I observed
and perceived during my internship program. In this report you will find the detail about the
bank right from its incorporation to the current position. Along with it, the processes, policies
and procedures of the bank are also discussed in detail.
As the main purpose of internship is to learn by working in practical environment and to apply
the knowledge acquired during the studies in a real world scenario in order to tackle the
problems using the knowledge and skill learned during the academic process.
In this report the detailed analysis of the organization has been done and the financial, technical,
managerial and strategic aspects have been evaluated to analyze the current position of the
organization.
This report also contains my perceptions about the employee’s satisfaction, motivation level and
the working environment of the organization.
5. FINANCIAL POSITION 12
7. SAIBAAN SCHEME 16
8. FOREIGN CURRENCY 17
9. EXPORT DEPARTMENT 19
10. IMPORT DEPRTMENT 19
14. DEPARTMENTALIZATION 29
24. References 74
1. INTRODUCTION
Definitions of Bank
“Bank”
"A financial institution, which deals with money and credit. It accepts
Deposits from individuals, firms and companies at a lower rate of Interest and gives at higher
rate of interest to those who need them.”
A financial establishment which uses money deposited by customers for investment, pays it
out when required, makes loan at interest, exchanges currency, etc.
J.W Gilbert in his principles and practice banking defines a banker in these words:
“By banking, we mean the business of dealing in credits and by a ‘Bank’ we include
every person, firm or company having a place of business where credits are opened by deposits
of collection of money or currency. Subjects to be paid or remitted on Cheques or order, money
is advanced or loaned on stocks, bonds, bullion, bill of exchange, promissory notes are received
for discount or sale”.
Scope of Studies
As an internee in National Bank of Pakistan the main focus of my study
research is on general banking procedures in one of the branches of NBP in MIS environment.
These operations include remittances, deposits, advances and foreign exchange.
Similarly different aspects of overall of NBP are also covered in this report.
Research Methodology
The report is based on six weeks internship program in National Bank of Pakistan. The
methodology reported for collection of data is primary as well as secondary data. The biggest
source of information is my personal observation while working with staff and having discussion
with them. Formally arranged interviews and discussions also helped me in this regards.
National Bank of Pakistan (NBP) was established under the National Bank of
Pakistan Ordinance 1949. The primary objective of NBP was to purchase jute from the growers
in the former East Pakistan and also to perform the commercial banking functions in the country.
National Bank of Pakistan is now the biggest financial institution with assets totaling over
Rs.310 billion with 1428 local and 23 foreign branches. The bank is the higher financer in
agriculture and commodity operation sector.
As part of the academic requirement for completing MBA (MIS) Master Business
Administration of the students are required to under go six/eight weeks of internship with an
organization. The internship is to serve the purpose of acquainting the students with the practice
of knowledge of the discipline of banking administration.
This report is about National Bank Pakistan. NBP was established in 1949 and since then, it has
expended its network, becoming the largest commercial Bank of the country. It offers different
products of services to its customers.
.
The National Bank of Pakistan came into existence on 20th November 1949 under
the National Bank of Pakistan Ordinance No.21 of 1949.It is a semipublic bank and functions
like other commercial banks. Therefore it receives funds from the depositors and provides
loans/credit facilities in all sectors including trade, industry and agriculture. It also functions as
an agent of the Central Bank and operates the treasuries at places where no branch of State Bank
of Pakistan exists. The National Bank of Pakistan was also nationalized, along with other banks,
in January 1974. The Bank of Bahawalpur was also merged into this Bank.
MANAGEMENT
An Executive Board composed of six Senior Executives of the Bank and the President who
is also the Chief Executive supervises the affairs and business of the Bank.
CAPITAL
The authorized capital of the Bank is Rs.2500 million divided into 100 million ordinary
shares of Rs.10 each. After nationalization, all the shares held by persons other than the Federal
Government or Corporations i.e., owned and controlled by the Federal Government was
considered as transferred and vested in the Government.
BRANCHES
The Bank had a network of 1531branches in the country and 28 branches in foreign
countries. These countries are as follows:
1) - United States of America
2) - United Kingdom
3) - France
4) - Germany
5) - Africa, Middle East Region
6) - Bahrain Obu
7) - Asia Pacific Region
8) - Japan
9) - Republic of Korea
10) - Central Asian States
11) - Bangladesh
12)-Peoples Republic of China
13) -Pakistan.
The main of the study in hand is together relevant information to compile internship
report on National Bank of Pakistan.
• To observe, analyze and interpret the relevant data competently and in a useful manner.
• To work practically in an organization.
• To develop interpersonal communication.
The bank reforms also brought about the establishment of new institutions to achieve new
objectives. A national credit consultative was setup under the supervise of the state bank with
representation form the government and the private sector. It was assigned the task of
determining of economy’s annual credit needs within the safe limits of monetary and credit
expansion with reference to the annual development plan. Such a credit plan was to cover the
public and private sectors. Alongside the National credit council and Agricultural Advisory
Committee was formed to allocate agriculture credit for various purposes, to coordinate the
operation or the agriculture credit agencies and to oversee the flow of credit to the designated
targets. A standing committee on exports in general and the new emerging exports in particular,
was also established. With a view to encourage the banks to extend credit to small borrowers, a
credit guarantee scheme was introduced under which the state bank under took to share any
bonfire losses incurred by the commercial banks in case of small loans of advances to
agriculture.
At the same time two financing institutions were established. The people’s Finance Corporation
was designed to provide finance to people of small means while the National Development
Finance Corporation was setup of finance public sector owned and managed industries and
enterprises.
The banking reforms turned to be transitional and interim step and when they were hardly
eighteen months old the government nationalized the banking systems, with the following main
objectives.
• To enable the government to use the capital concentrated in the hands of a few rich
bankers for the rapid economic development of the country and the more urgent social
welfare objectives.
The act passed for the nationalization of banks is known as the banks Nationalization Act
1974.
Thus under this act the state bank of Pakistan and all the commercial banks incorporated in
Pakistan and carrying business in or outside the country were brought under government
ownership with effect from Jan 1, 1974. The ownership, management and control of all Pakistani
banks stood transferred to and vested in the Federal government. The shareholders were provided
compensation in the form of federal government bonds redeemable at par anytime within the
period of fifteen years. Under the Nationalization act, the Chairman, Directors and Executives of
various banks, other than those appointed by federal government were removed from their
offices and the central boards of the banks and all local bodies were dissolved. Pakistan banking
council was established to coordinate the activities of the Nationalized Commercial banks. At the
time of Nationalization on December31, 1973 there were following 14 Pakistani commercial
banks with 3323 offices allover Pakistan and 74 offices in foreign countries:
The Pakistan banking council prepared a scheme for the recognition of banks. The bank
(amalgamation) scheme 1974 was notified in April, providing for the amalgamation of the
smaller banks with bigger ones and following the five units in there phases:
The first phase was completed on 30th June. 1974. When the bank Bahawalpur was merged with
the National Bank of Pakistan. The premier Bank Limited with Muslim Commercial Bank
limited and Sarhad Bank Limited and Pak bank limited and renamed as Allied Bank of Pakistan
limited.
The second phase was completed on 31st Dec.1974, when the commerce bank limited
merged with the United Bank limited. The third and the final phase were completed on 30th
June, 1975 when the standard bank limited was merged with Habib Bank limited.
The nationalization was very smooth and gave very positive results.
The number of branches, which stood at 3397 on Dec31, 1973, reached on 7661 by end June
1992. The bank deposits which stood at Rs. 1925 corers at the end 1973 reached the highest
mark about 323 corers
5.FINANCIAL POSITION
Different facts and figures of opening balances of the year 2007 about National bank of
Pakistan which show the financial position are as under:
CAPITAL STRUCTURE
National bank of Pakistan was incorporated with an issued capital of Rs. 15 million.
AUTHORIZED CAPITAL
The bank has now the Authorized Capital of Rs. 25 billion.
SUBSCRIBED AND PAID-UP CAPITAL
The Subscribed and Paid-up Capital is Rs. 1.46 billion.
TOTAL DEPOSITS
National bank of Pakistan is the largest commercial bank of the country and has Total
Deposits of Rs. 362.87 billion.
ADVANCES
The total Advances stood at Rs. 140.55 billion made by NBP in the form of money at
call and short notices, cash credit, loans for short and long periods.
INVESTMENTS
The total Investment rose to Rs. 143.53 billion. This total Investment includes PTC,
TFC, and securities of Provincial of Federal Government.
PRE-TAX PROFIT
The pre-tax profits of NBP have gone up to Rs. 6.05 billion.
AFTER-TAX PROFIT
The after-tax profits of NBP have been Rs. 2.26 billion.
TOTAL ASSETS
The Total Assets of NBP are Rs. 432.81 billion which is a great achievement.
TOTAL EXPENDITURES
The Total Assets of NBP are Rs. 26.30 billion which are very less as compared to
previous years’ expenditures.
• Aks Sajra.
• Fard Malkiat
• Naqal Intiqal
• Khasra Verification report
• NOC
• National Evaluation Company’s report.
• PT-I
• Sale Deed/ Registry.
• Processing Fee pay order for Rs.1000/=financing below Rs. 1 Million.
• Fee for Evaluator pay order Rs.3000/=financing between Rs. 1 to Rs. 4 Million.
• Processing Fee pay for legal opinion order for Rs.6000/= financing above Rs.4
Million.
• Fee for Evaluator pay order ( in case of construction Rs.2000/= (in case of
Purchase Rs.3000/=
• Borrower Basic Facts Sheet
• Confidential Report
• ALICO DECLARATION FORM.
8.FOREIGN CURRENCY
Guaranttee The word guarantee means under taking.
• Principal (Seller).
• Guarantor (Bank).
• Beneficiary (Buyer).
Outward Remittance The outward remittance is the term which emphasizes that to transfer
amount from one country to another country.
The sources used to transfer the amount are Transfer Transactions (TT), Demand Draft
(DD).The procedure of outward remittance is initially been undertaken that when account holder
fill the request letter. The request letter contain following information are
• Request of debit.
• Amount to be mentioned.
• Beneficiary name.
• Beneficiary account no.
There is the concept of two accounts are NOSTRO A/C, VOSTRO A/C.Western Union
Western Union is the name of Australian Bank which provide facility of providing payment with
out wasting time. There are 259 banks in world wide who provide the facility where no bank
exist
The amount sent to other place for this we do require certain documents are ID copy name
of the person to whom the amount is sent .Then Bank will assign PIN CODE .The amount is
send with in 15 minutes. When the receiver go to the bank to receive the amount he had to show
his ID COPY or ORIGINAL PASSPORT then the authorize officer will identify through
NADRA its identification.
CHARGES
Inward Remittance In this department the process is contrary to outward remittance the amount
from foreign country to the Pakistan. In this case the amount received is in the form of cheque,
Pay order etc.
9.EXPORT DEPARTMENT
Collection The collection Department is the initial phase of the export department.
The current account of the exporter should be activated for the issue of the E-Form.
TYPES OF E-FORM
• Original.
• Duplicate.
• Triplicate.
• Quadrapled.
The Banks are involved between the parties .All deals and documentation are made between the
banks. The bank of Seller and Buyer contact with their party about the transaction when there is
no conflict between the party the process goes on until transaction is completed.
• LC opening.
• Lodgment.
• Retirement of LC.
LC OPENING
Firstly Importer presents the Proforma Invoice to the bank Then Importer will fill
the form (IB-8) which cost Rs.100 .Proforma should not be expired.
C&F(exporter will pay ),FOB( Importer will pay shipment charges) should be mentioned on the
form. The LC opening application form requires certain documents are
LC LODGEMENT
After LC opening Exporter bank will send document to the Importer Bank for the purpose
of LC. Advisory bank is the correspondent bank. In case of any discrepancy found and is
accepted then the $50 is charged for further processing. Normally the discrepancy is created after
shipment. When the documents are accepted by Importer and Exporter then payment is to be
made.
RETIREMENT OF LC
At time of payment or retirement we deal with following Import channel are LC.
• Advance Payment.
• Payment after shipment.
• Foreign DD & TT.
LETTER OF CREDIT
1000
Commission is deducted from the party at the time of expiry. When the period is delayed of
1 month then charge 0.1%, if the period is 2 month then charges is 0.2%.FED 5% on total
commission
SERVICE CHARGES
The charges of 0.1% of Bill of Exchange is charged. After the period of 15 days then the
commission is charged .FED is charged on 5% on commission.
ADVANCE OF PAYMENT
The payment is made to the party in advance to the exporter through bank. The bank also
deduct margin from the Importer so that bank could serve itself
SERVICE CHARGES
Minimum commission for the amount less $400.At increase of every $1000 $ is charged.
No guarantee, collaterals, or insurance is required to avail this scheme. NBP gives the
facility to repay the excessive amount within 1 to 36 months. The procedure is very easy, just fill
the application form and choice between 1 to 36 months and take your NBP Advance Salary
within 3 days after submitting your form.
3. FUND MANAGEMENT SCHEME
This scheme is offered to corporate under customer and is aimed at providing better rate of
return up to 15% per annum. One of the objectives of the scheme is to develop the secondary
market for government securities.
4. LG TV SCHEME
It is the most popular of NBP schemes for people. corporates with LG Appliances
Corporation. If you want a TV set but has not enough money to purchase it then head to NBP,
fill an application form of LG TV Scheme. NBP gives you the facility to pay for the TV set in
smaller installments during a time period of 2 years.
Any one can avail this scheme. Two government employees are required to present the
witness to repay the loan if the applicant is unable to repay the loan or the applicant should have
the Fixed Term Deposit in NBP more worthily than the amount advanced to the applicant and it
should have the duration of more than two years.
12.ORGANIZATIONAL STRUCTURE
In this section four topics are discussed. The major topics of this section are:
The ownership, management, and control of all the commercial banks were taken over
by the Government of Pakistan on January 1st, 1974.
A banking council was formed under the Nationalization Act 1974. The banking council was set
up for making policy recommendations to the Federal Government, formulating policy
guidelines for the banks and their reorganization.
The management and organizational structure of the nationalized banks have uniformity. This
management and organizational structure is briefly described as under:
• Board of Directors
• Executive Board
• Chief Executive
• Divisional Chiefs
• Provisional Chiefs
• Circle Executive
• Zonal Heads
• Branch Managers
1. 6. Circle Executive
Each commercial bank has a number of circles placed directly under the control and supervision
of Chief Executive.
1.8. Branch Managers Each zone of commercial bank is divided into several branches. The
control and supervision of each branch is mostly entrusted to Assistant Vice President or
Officer G-II.
Complete organizational hierarchy chart has not been provided.
2.SENIOR MANAGEMENT
R. A. Kaleemi SEVP & Group Chief, Operational Group
Masood Karim SEVP & Grp Chf, Co. & Invst Banking
Grp & Chf Fncl Officer
S. M. Rafique SEVP & Secretary Board of Directors
Derrick Cyprian SEVP & Group Chief, Special Assets &
Remedial Mngt Group
Amin Akhtar EVP & PSO to the President
Farooqul Hassan EVP & Chief President’s Implementation
Secretariat
Shahid Anwar EVP & Group Chief, Commercial & Retail
Banking Group
Safdar Khawaja EVP & Group Chief, Audit & Inspection
Group
Asif A. Brohi EVP & Group Chief, Strategic Planning &
Eco Research Group
Javed Mehmood EVP & Group Chief, Risk Management
Group
M. Nusrat Vohra EVP & Group Chief, Treasury
Management Group
Nadeem Dogar EVP & Group Chief, IT Planning &
Implementation Group
Dr. Abrar Baig Head of Human Resources Management
Department
Uzma Bashir Head of Organization Development &
Training Department
3.REGIONAL STRUCTURE
REGIONAL
CHIEF
EXECUTIVE
GENERAL GENERAL GENERAL
MANAGER MANAGER MANAGER
Advances, Legal Planning, Business Administrative
and Recovery Wing Development Wing
Customer Services
and Implementation
of Audit
4.BRANCH STRUCTURE
OG-II ADMIN
OG-II OG-II OG-II OG-III
SERVICES CASHIER ACCOUNTS
HEAD MESSANGER
MESSANGER
Comments on organizational structure?
I carefully planed and wrote out my internship program and goals. The internship
program and goals were measured by Bank management team and others in
organization. Structuring the internship ahead of time provided me with tangible goals and
objectives that enabled me to prove myself for understanding the importance of the
organization’s decision-makers and value of a well-developed internship program.
In creating my internship program plan, it includes specific ideas, proposals, and logistical
information. I constructed my plan based on organization’s needs and resources. The questions
that follow many assist me in formulating an internship program and plan.
What about general support around the workplace? Does their organization need an intern
to perform administrative and support functions including data entry, answering telephones,
filing, etc.? If so, approximately what percentage of the intern’s time will be spent on these
activities?
Does the Bank want to give the intern a taste of everything that company does?
Have employees from each department been designated to mentor the intern on their
particular department functions?
The assignment of mentor who will work closely with the intern can be essential in
creating a successful experience for the organization and then intern. Ideally, the mentor should
be someone from the department where the intern is working and who is very familiar with the
projects and tasks the intern is working on. This person doesn’t have to be a teacher per se, but
should be selected because he or she likes to teach or train and has the resources to do it. If the
person you select has never mentored an intern before, providing basic supervision and
mentoring guidelines and training may enhance the experience for both the mentor and the
intern.
Do you want to plan a program beyond the work you give your interns? Will there be
specific training programs, performance reviews, lunches with executives or social events? Keep
in mind that your interns are walking advertisements for your company. If they have a good
experience working for you, they’re likely to tell their friends—word gets around. A bad
internship, by contrast, can only hurt your chances of attracting good students for next year.
I set up regular contact with the faculty sponsor. I Planed to email (meet) with your
professor regularly over the term to discuss activities and review your internship and progress
towards your academic learning objectives. At a minimum, plan on keeping in regular touch via
email.
Arrange regular meetings with site supervisor. It is vital you meet regularly with your site
supervisor for direction, feedback, and answers to questions. Ideally this should be weekly, or at
least bi-weekly.
I completed the required Orientation Check In form. After your first couple of
weeks working in your site, complete this form and return it to the Internship Program office. It
is very important that you get a solid start in your internship, and this is largely determined by
how well you are initially oriented and trained. I used the form as a way to talk with my
supervisor to identify areas i need or want additional direction. This communication helps our
office identify internships that may warrant a bit more attention early on to help make productive
for me. Also, on the form I am asked to note my work schedule so we can begin planning site
visits for the middle of the term.
Finishing up
1. CASH DEPARTMENT
2. CLEARANCE DEPARTMENT
3. ADVANCES DEPARTMENT
4. REMITTANCE DEPARTMENT
6. DEPOSIT DEPARTMENT: -
7. FOREIGN EXCHANGE/DEPARTMENT:
1. CASH DEPARTMENT
Cash department performs the following functions
1.1) Receipt
The money, which either comes or goes out from the bank, its record should be kept. Cash
department performs this function. The deposits of all customers of the bank are controlled by
means of ledger accounts. Every customer has its own ledger account and has separate ledger
cards.
Payments
It is a banker’s primary contract to repay money received for this customer’s account usually by
honoring his cheques.
1.3) Cheques and their Payment
The Negotiable Instruments. Act, 1881,
“Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable
otherwise than on demand”.
Since a Cheque has been declared to be a bill of exchange, it must have all its characteristics as
mentioned in Section 5 of the Negotiable Instruments Act, 1881. Therefore, one can say that a
Cheque can be defined as an:
“An unconditional order in writing drawn on a specified banker, signed by the drawer, requiring
the banker to pay on demand a sum certain in money to, or to the order of, a specified person or
to the bearer, and which does not order any act to be done in addition to the payment of money”.
(Law of Banking by Dr. Hart, p.327).
1.4) the Requisites of Cheque
There is no prescribed form of words or design of a Cheque, but in order to fulfill the
requirements mentioned in Section 6 above the Cheque must have the following.
• It should be in writing
• The unconditional order
• Drawn on specific banker only
• Payment on Demand
• Sum Certain in money
• Payable to a specific person
• Signed by the drawer
2. CLEARANCE DEPARTMENT
A clearinghouse is an association of commercial banks set up in given locality for the
purpose of interchange and settlement of credit claims. The function of clearinghouse is
performed by the central bank of a country by tradition or by law. In Pakistan, the clearing
system is operated by the SBP. If SBP has no office at a place, then NBP, as a representative of
SBP act as a clearinghouse.
After the World War II, a rapid growth in banking institutions has taken place. The use of
cheques in making payments has also widely increased. The collection as settlement of mutual
obligations in the form of cheques is now a big task for all the commercial bank. When Cheque
is drawn on one bank and the holder (payee) deposits the same in his account at the bank of the
drawer, the mutual obligation are settled by the internal bank administration and there arises no
inter bank debits from the use of cheques. The total assets and total liabilities of the bank remain
unchanged.
In practice, the person receiving a Cheque as rarely a depositor of the cheque at the same
bank as the drawer. He deposits the cheque with his bank other than of payer for the collection of
the amount. Now the bank in which the cheque has been deposited becomes a creditor of the
drawer’s bank. The depositor bank will pay his amount of the cheque by transferring it from cash
reserves if there are no offsetting transactions. The banks on which the cheques are drawn
become in debt to the bank in which the cheques are deposited. At the same time, the creditors’
banks receive large amounts of cheques drawn on other banks giving claims of payment by them.
The easy, safe and most efficient way is to offset the reciprocal claims against the other and
receive only the net amount owned by them. This facility of net inter bank payment is provided
by the clearinghouse.
The representatives of the local commercial banks meet at a fixed time on all the business
days of the week. The meeting is held in the office of the bank that officially performs the duties
of clearinghouse. The representatives of the commercial banks deliver the cheques payable at
other local banks and receive the cheques drawn on their bank. The cheques are then sorted
according to the bank on which they are drawn. A summary sheet is prepared which shows the
names of the banks, the total number of cheques delivered and received by them. Totals are also
made of all the cheques presented by or to each bank. The difference between the total represents
the amount to be paid by a particular bank and the amount to be received by it. Each bank then
receives the net amount due to it or pays the net amount owed by it.
2.1) In-Word Clearing Books
The bank uses this book for the purpose of recording all the cheques that are being received by
the bank in the first clearing. All details of the cheques are recorded in this book.
3. ADVANCES DEPARTMENT
Advances department is one of the most sensitive and important departments of the
bank. The major portion of the profit is earned through this department. The job of this
department is to make proposals about the loans. The Credit Management Division of Head
Office directly controls all the advances. As we known bank is a profit seeking institution. It
attracts surplus balances from the customers at low rate of interest and makes advances at a
higher rate of interest to the individuals and business firms. Credit extensions are the most
important activity of all financial institutions, because it is the main source of earning. However,
at the same time, it is a very risky task and the risk cannot be completely eliminated but could be
minimized largely with certain techniques.
Any individual or company, who wants loan from NBP, first of all has to undergo the filling of a
prescribed form, which provides the following information to the banker.
There are five principles, which must be duly observed while advancing money to the
borrowers.
• Safety
• Character
• Capacity
• Capital
• Liquidity
• Dispersal
• Remuneration
• Suitability
• Forms of Loans
• Cash Finance
• Overdraft/Running Finance
• Demand Financing/Loans
a. Safety
Banker’s funds comprise mainly of money borrowed from numerous customers on
various accounts such as Current Account, Savings Bank Account, Call Deposit Account,
Special Notice Account and Fixed Deposit Account. It indicates that whatever money the banker
holds is that of his customers who have entrusted the banker with it only because they have full
confidence in the expert handling of money by their banker. Therefore, the banker must be very
careful and ensure that his depositor’s money is advanced to safe hands where the risk of loss
does not exist.
The elements of character, capacity and capital can help a banker in arriving at a conclusion
regarding the safety of advances allowed by him.
b. Character
It is the most important factor in determining the safety of advance, for there is no substitute for
character. A borrower’s character can indicate his intention to repay the advance since his
honesty and integrity is of primary importance. If the past record of the borrower shows that his
integrity has been questionable, the banker should avoid him, especially when the securities
offered by him are inadequate in covering the full amount of advance.
It is obligation on the banker to ensure that his borrower is a person of character and has capacity
enough to repay the money borrowed including the interest thereon.
c. Capacity
This is the management ability factor, which tells how successful a business has been in the past
and what the future possibilities are. A businessman may not have vast financial resources, but
with sound management abilities, including the insight into a specific business, he may make his
business very profitable. On the other hand if a person has no insight into the particular business
for which he wants to borrow funds from the banker, there are more chances of loss to the
banker.
d. Capital
This is the monetary base because the money invested by the proprietors represents their faith in
the business and its future. The role of commercial banks is to provide short-term capital for
commerce and industry, yet some borrowers would insist that their bankers provide most of the
capital required. This makes the banker a partner. As such the banker must consider whether the
amount requested for is reasonable to the borrowers own resources or investment.
e. Liquidity
Liquidity means the possibilities of recovering the advances in emergency, because all the
money borrowed by the customer is repayable in lump sum on demand. Generally the borrowers
repay their loans steadily, and the funds thus released can be used to allow fresh loans to other
borrowers. Nevertheless, the banker must ensure that the money he is lending is not blocked for
an undue long time, and that the borrowers are in such a financial position as to pay back the
entire amount outstanding against them on a short notice. In such a situation, it is very important
for a banker to study his borrower’s assets to liquidity, because he would prefer to lend only for a
short period in order to meet the shortfalls in the wording capital. If the borrower asks for an
advance for the purchase of fixed assets the banker should refuse because it shall not be possible
for him to repay when the banker wants his customer to repay the amount. Hence, the baker must
adhere to the consideration of the principles of liquidity very careful.
f. Dispersal
The dispersal of the amount of advance should be broadly based so that large number of
borrowing customer may benefit from the banker’s funds. The banker must ensure that his funds
are not invested in specific sectors like textile industry, heavy engineering or agriculture. He
must see that from his available funds he advances them to a wide range of sector like
commerce, industry, farming, agriculture, small business, housing projects and various other
financial concerns in order of priorities.
Dispersal of advances is very necessary from the point of security as well, because it reduces the
risk of recovery when something goes wrong in one particular sector or in one field.
g. Remuneration
A major portion of the banker’s earnings comes form the interest charged on the money
borrowed by the customers. The banker needs sufficient earnings to meet the following:
Interest payable to the money deposited with him.
• Salaries and fringe benefits payable to the staff members.
• Overhead expense and depreciation and maintenance of the fixed assets of the bank.
• An adequate sum to meet possible losses.
• Provisions for a reserve fund to meet unforeseen contingencies.
• Payment of dividends to the shareholders.
h. Suitability
The word “suitability’ is not to be taken in its usual literary sense but in the broader sense of
purport. It means that advance should be allowed not only to the carefully selected and suitable
borrowers but also in keeping with the overall national development plans chalked out by the
authorities concerned. Before accommodating a borrower the banker should ensure that the
lending is for a purpose in conformity with the current national credit policy laid down by the
central bank of the country.
i. Forms of Loans
In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the
form of cash finance, overdrafts and loans. NBP provides advances to different people in
different ways as the case demand.
j. Cash Finance
This is a very common form of borrowing by commercial and industrial concerns and is made
available either against pledge or hypothecation of goods, produce or merchandise. In cash
finance a borrower is allowed to borrow money from the banker up to a certain limit, either at
once or as and when required. The borrower prefers this form of lending due to the facility of
paying markup/services charges only on the amount he actually utilizes.
If the borrower does not utilize the full limit, the banker has to lose return on the un-
utilized amount. In order to offset this loss, the banker may provide for a suitable clause in the
cash finance agreement, according to which the borrower has to pay markup/service charges on
at least on self or one quarter of the amount of cash finance limit allowed to him even when he
does not utilize that amount.
k. Overdraft/Running Finance
This is the most common form of bank lending. When a borrower requires temporary
accommodation his banker allows withdrawals on his account in excess of the balance which the
borrowing customer has in credit, and an overdraft thus occurs. This accommodation is generally
allowed against collateral securities. When it is against collateral securities it is called “Secured
Overdraft” and when the borrowing customer cannot offer any collateral security except his
personal security, the accommodation is called a “Clean Overdraft”. The borrowing customer is
in an advantageous position in an overdraft, because he has to pay service charges only on the
balance outstanding against him. The main difference between a cash finance and overdraft lies
in the fact that cash finance is a bank finance used for long term by commercial and industrial
concern on regular basis, while an overdraft is a temporary accommodation occasionally resorted
to.
l. Demand Financing/Loans
When a customer borrows from a banker a fixed amount repayable either in periodic
installments or in lump sum at a fixed future time, it is called a “loan”. When bankers allow
loans to their customers against collateral securities they are called “secured loans” and when no
collateral security is taken they are called “clean loans”.
The amount of loan is placed at the borrower’s disposal in lump sum for the period agreed upon,
and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a
fixed amount of money for his use, while the banker feels satisfied in lending money in fixed
amounts for definite short periods against a satisfactory security
4. REMITTANCE DEPARTMENT
Remittance means a sum of money sent in payment for something. This department
deals with either the transfer of money from one bank to other bank or from one branch to
another branch for their customers. NBP offers the following forms of remittances.
• Demand Draft
• Telegraphic Transfer
• Pay Order
• Mail Transfer
5.6) Corruption
Our social acceptance of corruption gives rise to corruption at every level of social and
organizational set up. Corruption involves financial embezzlement, favoritism, nepotism,
cronyism and other number of such practices. All these cause resentment that keep building up
and lead to conflict sooner or later.
In the past few years, some cases of frauds have happened in different branches. The reasons can
be linked with the employee dissatisfaction of NBP.
6.6) Cash
This deptt also deals with cash. Payment of cheques, deposits of cheques etc.
7. FOREIGN EXCHANGE/DEPARTMENT:
This deptt mainly deals with the foreign business. The main functions of this deptt are:
• L/C dealing.
• Foreign currency accounts dealing.
• Foreign Remittance dealing.
7.1) L/C dealing
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.
• Cash Department
• General Banking Departments
1. Cash Department:
Cash department mainly deals in cash. The Head of department is Mr. Umair Rao and two
cashier Maher Shah and Muhammad Ali.
“To facilitate people in the payments of their bills and taxes and repayments of cash”
There are two main functions of cash department.
• Payments are the function that they pay their cheques and pay cash.
• Receipts mean collection of utilities bills, taxes etc.
WORK PERORMEDBY ME
I joined National Bank of Pakistan, Main Branch Bahawalnagar on 11th November, 2008.
First day, the manager introduced me about the functioning of the branch and the staff. The
manager told me that counter is the most important place of the bank. During the six weeks of
my internship, I worked in different departments of the branch and did the maximum practice of
banking system details of which is as under:
GENERAL BANKING
First of all, I was asked to work in different sections of general banking. I was attached to
Counter with Mr. Kashif who has good command on this section. Here we dealt with new
customer who wanted to get information and to deal with the branch. This is a very interesting
department because here we met people of different types and deal with them accordingly. In this
section, I observed the following functions:
CHEQUE AT COUNTER
A cheque to withdraw the amount is presented on the counter with the following
requisites:
1 ... ... Name of the Account Holder
2 ... ... Current or previous date
3 ... ... Amount in figures
4 ... ... Amount in wording
5 ... ... One signature of the account holder in the right bottom corner of the cheque and
two signature of the bearer on the back
6 ... ... Branch Stamp in front of the cheque
7 ... ... If the Account Holder uses thumb instead of signature then the Pass Book is
necessary with the cheque
Operation’s officer checks and verifies all these requisites. If it fulfills all the requisites, it
is forwarded for payment after a certain procedure.
DEPOSIT DEPARTMENT
Deposit department deals with Current, Savings, and Fixed Accounts. In current account
the bank does not give any interest and you can deposit the whole amount in lump sum in
business hours.
However in PLS savings account we can only withdraw up to Rs.25000/- without any
notice otherwise a prior notification of a weak is required to the bank if the amount to be
withdrawn is more than Rs.25000/-
Old ages are interested in Fixed Account usually. The rate of interest is higher more than
that of in Current and PLS savings Account but the amount cannot be withdrawn before a
specific time fixed by the client.
To open the account customer have to fulfill an application form and submit to the
concerning authority. In Current and PLS saving Account, a Cheque Book is issued to the
client and he becomes the Account Holder of NBP. I worked in this department for one and a
half week.
I have divided general observation in four parts. Which are as under: This analysis is
mainly based on my general observation.
• Problems at the branch.
• Function analysis.
• Administrative analysis.
• Personal management’s analysis.
2. FUNCTIONAL ANALYSIS
3 ADMINISTRATIVE ANALYSIS
4.4 Promotions
Promotion in NBP is purely on the basis of seniority, so the new young person having high
qualification remains behind for quite a lot of time. Top management and staff union put
pressure for the promotion of their favorites, which gives a sense of deprivation to the deserving
employee and their efficiency is affected.As the concept of promotion is attached with better in
terms of greater responsibility, more prestige, greater skills and increased rate of salary. Thus a
better and impartial policy of promotion needs to be followed.
4.5 Transfer
Transfer means when a person is shifted from one place to another place. It is done either that
person is needed more on the other branch or for improving his skill variety. It is the policy of
the Bank to transfer each employee 3 to 4 years.
Responsibilities Prepare management accounting entries, maintain funds transfer pricing system
rules and validate system output Prepare and distribute monthly management reports Respond to
user inquiries on management accounting results Operate and maintain management accounting
database.
For convenience they give a one-glance statement that details each individual charge. It
shows clearly all purchases, cash advances, applicable finance and service charges and
amounts that remain outstanding month-wise.
Consolidated Company Statement
Useful for monitoring Card usage and payments, NBP Corporate Card system provides you with
details of each Card Member's expenditure. It lists the date, place, amount of expenditure, the net
amount payable by each Card Member, and at the end of the report, the grand total for the
company.
Cost Savings
Improved cash float: The Corporate Card minimizes the need for cash advances and the
administrative burden involved in tracking & reconciling them. Moreover, Card Members are
billed once every month, which helps improve the Companies cash flow.
Better rates from Suppliers: Management Information (MIS) generated by the Bank Corporate
Card System helps the Corporation identify new savings opportunities and support fact based
negotiations with suppliers.
The Merchant Spending Report provides cumulative spending by all Card Members split into the
travel and entertainment heads for e.g. by Hotel property, airlines, travel agencies, ATM cash
with drawl, car rentals, petrol etc. This information can be used to obtain better rates from
suppliers, and realize tangible cost savings.
No Interest costs: The Bank Corporate Card is a Charge Card wherein bills are payable on
receipt. This inculcates financial discipline amongst employees, saving the Company
unnecessary interest burden on overdue out standing.
Corporate pricing advantage: Unlike other Cards, Bank Corporate Card recognizes your
Company's buying leverage. As the number of Cards issued in a company increases the annual
fee payable per Card keeps reducing saving costs to the corporation
Single Payment instrument: One Card for all your T & E requirements. The Bank Corporate
Card significantly reduces paperwork involved in processing and paying multiple vendor bills
across multiple travelers. It also eliminates the need to set up credit lines with a range of vendors
used by your corporation.
Flexibility: You can opt for a billing and payment methodology aligned to your internal
accounting and reporting procedures.
Multiple Billing & Payment Plan: Bank has the flexibility of sending bills to individual Card
members or to a single recipient in your Company. You can also choose to pay Bank centrally or
let individual Card members settle their own bills.
Access to single vendor for all your travel related needs: As a Bank Corporate Card customer,
you can access International travel partner, allowing you the convenience and efficiency of
dealing with a single quality supplier for all your travel related requirements.
Global Customer Assistance Services: Visa provides the following Card related assistance
services to Bank Corporate Card Members when traveling overseas.
• Lost/stolen Card reporting
• Emergency Card replacement
• Emergency cash disbursement
• Security / Insurance Cover
• Photo and Signature option for Individual Card Members
• Limited loss Card liability. Post reporting the loss of Card, liability is Nil.
• World Class Service
• 24 hour customer services delivered to international standards from all over the country.
Membership Rewards:
Bank Rewards Plus Program, Opportunity to participate in the most powerful Rewards
program in Pakistan.. And it is so simple to redeem these points. The Card Member needs to
accumulate a minimum of 150 reward points and at the end of the year can redeem these reward
points against any items in the rewards catalogue.
Development:
It Provides design, development, implementation services and continued support of special data,
and databases town wide.
Web Development
The MIS Department designs, develops, implements and maintains the website.
Information technology changes rapidly and new systems and technology are continually being
implemented and installed. The MIS Department strives to translate this technology into higher
productivity for departments, and higher quality output for reduced costs of operations that
ultimately benefits the citizens of area.
MIS Controller
He infrastructures support group skills to provide front office internal advisory role on MIS
related issues and... reputation both within the bank and externally. There are 4 main areas that
comprise the department...; Financial Reporting and Control, Product Control, Regulatory Risk,
and Business and Corporate MIS. Moves... business lines within a supportive setting and
surrounded by skilled professionals.
Senior Accountant
Senior Accountant is responsible for the enhancement of the control... business performance,
through monthly commentaries and business reviews. This key role will see you... month-end
reporting and MIS to the Front Office, Bottom of Form
Business Analyst - Finance Change, Investment Banking
He integrates programs within a Global Investment Bank based in the City. The suitable
candidate will support... existing finance reporting systems across the bank. Both projects will
look at reengineering the finance... platforms for General ledger and MIS Reporting, with
specific responsibility for: Business requirement... Liaising with business and technical teams
across the bank Suitable candidates will be a Qualified
“The overall evaluation of a company strengths, weaknesses, opportunities and threats is called
SWOT analysis.”
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.
1. STRENGTHS:
2. WEAKNESSES
2.1 LACK OF MARKETING EFFORT:
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.
It’s a threat.
2.2 NBP UNDER POLITICAL PRESSURE
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. THREATS
4.1 EMERGENCE OF NEW COMPETITORS
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.
4.3 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.
1. Professional training
NBP staff lacks professionalism. They lack the necessary training to do the job efficiently and
properly. Although staff colleges in all major cities but they are not performing well. For this
purpose these staff colleges should be reorganized and their syllabus should be made in such a
way to help the employee understand the ever changing global economic scenario.
Banking council of Pakistan should also initiate some programs to equip the staff with
much needed professional training.
2. Delegation of authority
Employees of the bank should be given a task and authority and they should be asked for their
responsibility.
3. Performance Appraisal
The manager should strictly monitor the performance of every staff member. All of them should
be awarded according to their performance and result in the shape of bonuses to motivated and
incite them to work more efficiently.
5. Transfer
Transfer is not properly carried out. Some of the employees are continually serving at the same
post. They are simply rotated at the same branch. Therefore it is recommended that evenly
rotation of every employee should take place after every three years in different braches of the
bank.
6. Changes in Policies
There should not be any abrupt policies change by the upper management, as this practice hurts
the customer confidences in the bank. Government should make long term policies
Every person cannot go to the manager for the complaint because most of the people are
hesitant. So I suggest management to install a compliant box in the branch, and recruit a special
person for that guidance of the customer when they are unable to manage some difficulties in
banking matters.
Implementation plan
From the above recommendation, two recommendations are selected for implantation plan.
1. IMPLEMENTATION PLAN FOR “MARE GARE CAR FINANCING SCHEME”
Implementation of this financing scheme is initiated to provide long term loans to the general
public for buying their own car in easy installments. This financing scheme will help bank to
increase its revenue immensely
Rules and regulations:
• Name of finance Mare Gare Car Financing
• Minimum amount of finance Rs. 300000
• Maximum amount of finance Rs. 1500000
• Rate of Mark up (on daily product basis) Rs. 0.43 per Rs. 1000
• Period of finance 3 or 5 years
• Repayment to Bank Quarterly (12 or 20 equal installments)
23. RECOMMENDATIONS
In this section only one topic is discussed that is recommendation.
During my training at Bank NBP I observed some areas that need attention of the management
like:
Bank needs to use more marketing channels to make the public aware of its products and
services. In the presence of intense competition NBP has to realize the importance of marketing.
Management should distribute work equally among different employees. Some of the employees
are overburdened while some sections are overstaffed.
NBP needs to improve its website. More information relating to financial performance of the
bank should be available on the website.
The number of the women hired by the bank is very less. NBP should employ more women.
Moreover it should also recruit women for working in “Credits”.
Bank NBP Limited should immediately improve its Information Technology System. The
soft wares currently in use should be made error free, as it is the need of the hour, and integrated
data interchange should be inculcated to enable top management to monitor all activities going
about in all branches through generation of special purpose reports. There are a disproportionate
number of seasoned bankers in the top management who have the responsibility of making
strategic decisions. This think tank should also include a reasonable proportion of young bankers
whose mindsets teem with new creative ideas, which might prove to be invaluable for NBP
Limited.
The top management should immediately start thinking in terms of rotating the
employees in various departments, as this transforms work force into human capital. If a
particular individual keeps on employing his/her efforts in one sphere of banking it would not
only create a sense of monotony and boredom, but also not help improving the skill set of
employees.
NBP should embark upon an even more aggressive management strategy of expansion of
branch network not only in the local untapped opportunity for NBP.
One of the most pressing needs of the time is to advertise Bank Alfalah Limited in the electronic
media.
PROPER PLANNING
Bank should make a plan to gear up its recovery efforts on war footing and reorganize the
recovery function of global bases. In addition, bank should tighten up control on expenditure
USE OF COMPUTERS
To save the time of the customers and other clients, bank should adopt computerized system for
book keeping and other filling systems. It will increase the efficiency of the bank. I know that
there are some branches which are computerized but most of the branches in various cities of the
country are not computerized. So the bank should mechanize all its branches in the country.
ADOPTION OF ADVERTISING
Bank should launch advertising campaigns through out the year to promote the habits of savings
in the people. Bank should open more branches in the remote areas of the country to get deposits
and idle resources. Bank should provide similar facilities to all its branches in big cities. The
standard of service and other facilities are far better as compared to smaller cities.
PROPER GUIDANCE
Bank should adopt such an induction plan that when a customer opens his account with the bank,
he should be supplied with a booklet which enables him to know the procedure of filling the
cheques and pay-in-slip etc. It will save a lot of time of the bank staff afterward during of the
conduct of the account of that customer.
DIVISION OF WORK
The billing system of national bank of Pakistan must be improved to facilitate the customers and
workers. The work should be divided among the staff e.g. collection of bills, countering of cash
and then entry of these.
CHECK ON EXPENDITURES
Expenditures must be controlled which are very high and unnecessary.
BORROWING AT LOW COST
Deposits must be taken at a lower cost and given at higher interest rate.
24.References
1. Daft l Richerd “Management” 4th Edition Pages 254, 256, 269.
2. Kottler Philip “Marketing Management” Millennium Edition Page 76.
3. Fred R. David “Strategic Management Concepts Cases” 7th edition.
4. www.wikipidia.cpm
5. www.google.com
The END