INTERNSHIP REPORT ON NATIONAL BANK OF PAKISTAN MAIN BRANCH WAH CANTT (0415)

SUPERVISED BY SIR KALEEM SAIFULLAH

PREPARED BY MUHAMMAD TARIQ KHAN ROLL NUMBER 19069 MBA (FINANCE) 2009-11

DEPARTMENT OF MANAGEMENT SCIENCES HAZARA UNIVERSITY

INTERNSHIP REPORT ON NATIONAL BANK OF PAKISTAN MAIN BRANCH WAH CANTT (0415)

Internship Report Submitted To the Department Of Management Sciences for the Partial Fulfillment of the Requirements for the Degree of Master of Business Administration

DEPARTMENT OF MANAGEMENT SCIENCES HAZARA UNIVERSITY

Internship Certificate

COMMITTEE APPROVAL FOLIO

External Assessor

Mr.__________________________________Signature___________________

Supervisor

Mr.__________________________________Signature___________________

Chairman

Mr.__________________________________Signature___________________

DEPARTMENT OF MANAGEMENT SCIENCES HAZARA UNIVERSITY

DEDICATION
This report is dedicated to my loving parents, especially my father who is no more with us and who made his life hard for making me an educated person, to my respected

teachers who helped me a lot to get my education complete and to the love of my sisters and brothers.

ACKNOWLEDGEMENT

For the completion of our report I am appreciative to a lot of people for their very sincere support that they absolute to me at various stages. First of all, I am very thankful to my supervisor Mr. Kaleem Saifullah for helping in selecting and completion of my report. During our course and the execution of my report, I had a real chance to learn from his immense experience and massive knowledge.

I am very thankful to Mr. Arif Munir Quraishi(Manager), Tauqeer Ahmed(Operational Manager), and other staff members of National Bank of Pakistan Wah Cantt. Main Branch (0415) that they guide and provide me valuable information regarding my report.

I am also thankful to my friends who helped me in giving final format to my report, add as well as subtract materials from my report.

Finally I am thankful to the most merciful and Almighty Allah who gave me strength that I was able to fulfill my task so efficiently.

Muhammad Tariq Khan MBA (Finance)

II

TABLE OF CONTENTS CHAPTER 1..................................................................................................................................1 INTERNSHIP REPORT ON NATIONAL BANK OF PAKISTAN..........................................1 MAIN BRANCH WAH CANTT (0415).......................................................................................1 INTERNSHIP REPORT ON NATIONAL BANK OF PAKISTAN..........................................2 MAIN BRANCH WAH CANTT (0415).......................................................................................2 1.2) PURPOSE:.....................................................................................................................................1 THE PURPOSE OF INTERNSHIP AND INTERNSHIP REPORT IS TO HAVE A KNOWLEDGE AND UNDERSTANDING ABOUT THAT INSTITUTE. AS I DID MY INTERNSHIP IN NBP,I TRY MY LEVEL BEST TO GET MORE KNOWLEDGE ABOUT VARIOUS DEPARTMENTS OF NATIONAL BANK OF PAKISTAN AND HOW THEY PERFORM ITS VARIOUS FUNCTIONS. FINANCIAL ANALYSIS OF THE BANK IS CARRIED OUT TO JUDGE THE ACTUAL FINANCIAL STANDING OF THE BANK. VARIOUS FINDINGS AND RECOMMENDATIONS ARE DISCUSSED AT THE END..............................1

III

EXECUTIVE SUMMARY

To do internship in any organization and to write a report on what so ever is learned in that internship is the task given to every business administration student by their university whether he/she is doing Bachelors or Masters and whether his specialization is in Finance or Human Resource Management or Marketing or Information Technology.

Being a student of MBA-Finance in Management Science Department of Hazara University, I was also given a chance to do internship in any Financial and accounting organization and to write a comprehensive report on what I experienced and learned in that organization.

For this purpose, I had chosen National Bank of Pakistan, Wah Cantt. Main Branch, Wah (0415). The name of the manager is Mr. Arif Muneer Quraishe,a highly educated and well learned person. The reasons of choosing NBP was that it is government owned and secondly its profit margins and its growing speed influenced me and I thought that I will be able learn a lot and at the end of my internship, I was happy with my decision because I learned a lot during my internship at NBP.

IV

Six weeks to eight weeks time was not sufficient for me to fully understand and learn about the organization but I tried to utilize my maximum time to get a lot of experience and did my level best to convey my experience in this report to you people to the best of my knowledge. The report includes the overview of the NBP, its functions and operations. At the end of the report the constructive and helpful suggestions and recommendations for improvement are also given. This report highlights the operations and functions of bank. Banks acts as financial agents to their customer; in return they get reward for their services. Banks play important role in development of society. A strong economy must have a good banking system.

National Bank of Pakistan is one of the leading banks in Pakistan. According to international standards of banking system it is one of the best banks in South Asian region and is included in the top banks of the world. This report explains how different functions of NBP works and what are their services. The report relies mainly upon secondary data with the use of primary data at instances when the former would be unclear or difficult to comprehend. The report is mostly objective in nature with hints of subjectivity in financial analysis.

The first part of the report is about the introduction, where as the second part is about the functions and services of NBP and in third part the financial analysis and recommendations are given.

In fact commercial banking is regarded as a Conservative business because the rewards are modest and the penalties of bad banking are many. As a trustee of the public funds, NBP has a greater responsibility for safety and prudence. The NBP is known for its customer services as well as for its products, which are in demand.

VI

CHAPTER-1

INTRODUCTION OF STUDY

1.1) Background:
National Bank of Pakistan in short NBP got into existence in November 20, 1949 by the order of Governor General and has worked hard to achieve one of the largest banks that are nationalized in nature by setting higher standards.

NBP being the major business partner of Pakistans Government that is providing products and services through a large network of 1230 branches locally, 15 branches internationally and representative and subsidiary Offices.

1.2) Purpose:
The purpose of internship and internship report is to have a knowledge and understanding about that institute. As I did my internship in NBP,I try my level best to get more knowledge about various departments of National Bank of Pakistan and how they perform its various functions. Financial analysis of the bank is carried out to judge the actual financial standing of the bank. Various findings and recommendations are discussed at the end.

1.3) Scope:
We are given eight weeks time for internship which is not a long time span to have a complete knowledge of a large institute such as NBP but I tried a lot to get enough

knowledge about NBP and prepare my internship report. As I am specializing in finance, the main scope of my study is to have a complete knowledge about the financial health of the bank and then comparing it with its previous years performance.

I have identified some of the problems at the branch and of NBP as whole and have given some remedies to overcome these problems and to improve its financial position in future.

1.4) Process of Research:

As National Bank of Pakistan is one of the best bank of the country having a large infrastructure, it is very hard to get all knowledge that comprehensively covers all its areas in a short time duration of eight weeks but I used different tools and techniques in order to collect enough material for writing my report.

First I started with taking interviews and for this purpose I first selected the manager Mr Arif Muneer and then other staff members of the bank. I asked some questions and then depending on answers of those questions, some conclusions were made.

In the second step I chose to take a look at NBPs literature & then journals that are published by regional head quarter and staff college was which gave me very useful information about the functioning of the bank. I also visited the national bank of Pakistans official web site i.e. www.nbp.com.pk .

At last my personal observations during the short stay also helped me to collect data about this specific branch.

1.5) Format of Study:

I divided my internship report in four sections and the detail of various sections is given below:

Section 1 includes introduction to study and introduction of sector which included background and introduction. Section 2 is about NBPs previous performance, objective, and the organizational structure, departments, its function and the work performed by internee. Section 3 is about the financial analysis of the bank, which include different ratio analysis and also comparison with Soneri bank. Section 4 has SWOT analysis, comparison with Soneri Bank, finding & Recommendations and at the end a bibliography.

CHAPTER-2

INTRODUCTION OF SECTOR

There are various views about the origin of the word banking, one view is that it is derived from an Italian word banque which means bench. The other point of view is that it has originated from German word banc which means a joint stock firm. According to Growther the present day banker has three ancestors, the merchants, the gold smith and money lenders.

In short, we can define bank as a financial institution that take money at a lower rate of interest from individuals, firms and companies and give at higher rate of interest to those who need them.

The origin of the bank is traced to early Gold Smiths. They used to keep strong safe, for keeping their surplus money and other valuables of the people. The first stage in the development of banking was the acceptance of deposit from the people.

In the second stage, the traders and merchants were constantly requesting for loan from these goldsmiths and when these goldsmiths realized that they have surplus amount of money with them, they started lending loans to those traders and merchants. In the third stage interest giving and taking started. They also gave the facility of overdraft and for this purpose some portion of money was kept.

With the passage of time confusion arouse and the need for a proper banking system arouse and for this purpose a conference was held in November in1548. The decision was made to establish a bank to regulate various activities of the bank.

The first central bank was found in Geneva in 1587. Later on many other banks were established with the same objective. We can conclude that commercial banking system actually developed in 19th century. Now a day the commercial banking activities have greatly increased. Commercial banks are now multi-service organizations and play an important part in the development of the economic condition of a country.

2.1) Banking in Pakistan:

In a country like Pakistan that is still in the stage of economic development; a wellorganized bank is the need of the day. At the time of partition, the total number of commercial banks was 38 out of these; there were two banks in Pakistan. Indian banks were 29 and exchange banks were 7.

On the July 1, 1948 after the state bank of Pakistan order was promulgated, on May 12, 1948, Quaid-e-Azam Mohammad Ali Jinnah, inaugurated the state bank of Pakistan. The first Pakistani notes were issued in act 1948 in denomination of Rs. 5, 10 & 100. NBP came into existence in 1949.

2.2) The National Bank Of Pakistan:

NBP came into being back 1949; it was originally felt by the government to provide a financial back bone to the newly born country. Originally it was proposed to establish National Bank of Pakistan under a special legislation in the budget session of 1950 but it was setup earlier under ordinance of November 9, 1949 following the devaluation of India rupee in 1949. It started functioning from November 20, the same year the bank commenced business at six important jute centers in East Pakistan and directed its resources in financing the jute crop. Offices in Karachi and Lahore were opened in December.

During its decisive phase in the 1950s the bank took over all important role of acting as the governments treasury, and it was in this period, that public was offered 75% of the banks paid up capital.

After expending in the 1960s in which both deposits and advances increased threefold, the bank suffered a setback in 1974 when the banks (nationalization) ordinance was promulgated. After a dull period in the 1980s the 1990s were characterized by wide spread political interference in terms of overstaffing as well as politically motivated loan growth. However, from May 1997, reforms had begun to take shape under the dictation of multilateral lending bodies and semiautonomous state bank.

2.3-1) NBP Financial Heights, at a Glance (Rs in Million)

Table-1 2005 Assets Deposits Advances Investment Income Expenditure Pre-tax profit
Shareholder equity

2006 635,13 3 501,87 2 316,11 0 139,94 7 53,045 26,311 17,022 12.65 1,250 14,019

2007 762,19 4 591,90 7 340,31 9 211,14 6 69,271 28,061 19,034 14.15 1,261 14,079

2008 817,75 8 624,93 9 412,98 7 170,82 2 81,367 23,001 15,459 11.49 1,276 15,441

2009 944,58 3 727,46 5 475,24 3 217,64 3 94,142 21,300 17,562 13.05 1,287 16,248

2010 1,035,0 25 832,152 477,507 301,324 103,762 24,415 17,563 13.05 1289 16457

577,71 9 463,42 7 268,83 9 156,98 5 37,636 19,056 12,709 9.45 1,242 13,824

Total branches Total staff

1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 2005 2006 2007 2008 2009 2010 Assets Deposits Advances

350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2005 2006 2007 2008 2009 2010 Investm ent Incom e Expenditure

20,000 15,000 Pre tax Profit 10,000 5,000 0 2005 2006 2007 2008 2009 2010 Shareholder equity Total Branches Total Staff

Source NBP Directors report 2010

2.3-2) Incredible Banking Facilities:

Highest rate of return to attract savings. Agent of the SBP handling treasury function receipts of taxes & other revenue.

Handling of salaries & pension of federal/provincial employee & defense personnel. Utility bills collections. Hajj arrangements. Sale and encashment of defense savings and special savings certificates. Safe deposit lockers for customers.

CHAPTER-3

OBJECTIVE AND ORGANIZATION OF NBP

3.1) Vision Statement:

To be known as a leader and a brand synonyms with trust, top standards of service quality, best international practices and responsibility to society.

3.2) Mission Statement:

NBP will inspire the values that make NBP truly the Nations Bank by: Institutionalizing a merit and performance culture. Creating a distinct brand identity by providing the highest standards of services. Adopting the best practices of international management. Maximize shareholders significance. Make sure that we know our social responsibility to the best of our knowledge as a citizen of Pakistan and also in countries where we perform duties.

3.3) Core Values:

Highest standards of truthfulness. Institutionalizing a teamwork and performance civilization. Brilliance in service. Development of skills for future challenges. Attentiveness to social and community responsibility.

Importance of all stakeholders.

3.4) GOAL:
To improve profitability and maximizing NBP shares through increasing influence of existing customers and attracting new customers by providing different range of products

3.5) OBJECTIVES:
The concept of organization without the objective is meaningless. Objective refers to the goals and the aim that the organized has set for itself and all the activities of the organization are directed towards the attainment of these set goals. It is very essential to specify the objective of the organization in clear and precise manner.

All the organization whether private or public, which are involved in business carries the objective of profit earning. All the different activities of the organization are general

10

towards the profit earning and profit maximization. The two main objectives of the National Banks of Pakistan are: Increasing the deposits through improving of services and courtesy. Extension of loan.

3.6) Organizational Structure of NBP:

Like all other organizations national bank of Pakistan has its own organizational structure. The structure of organization is explained below.

3.6-1) Head Office:

The head office of national bank of Pakistan is situated in Karachi. All branches, zonal offices, corporate branches and regional offices work according to head office rules and regulations.

3.6-2) Board of Directors:

Board of director nominates the members of executive committee and executive nominates the division heads. BOD consists of chairman who is also president of the bank, under whom six directors and one secretary works.

3.6-3) Executive Committee:

11

Executive committee consists of one president and twelve members, in which one member also performs the function of the secretary. The BOD nominates executive committee and this committee further nominates the division heads.

3.6-4) Domestic Networks:

National bank of Pakistan runs its business through nine regional head quarters situated in Karachi, Hyderabad, Quetta, Multan, Faisalabad, Peshawar, Muzafarabad and Lahore. There are 40 zonal offices, which supervise 12 corporate branches in 8 large cities and 1230 branches in various part of the country.

3.6-5) Overseas Networks:

National bank of Pakistan has 15 overseas branches and 4 representative offices in different part of the world. They are in USA, Germany, France, Egypt, Uzbekistan, Bahrain, Korea, Bangladesh, Hong Kong, Japan, China, Kyrgyzstan, Turkmenistan and Azerbaijan.

3.7) Corporate Information:

3.7-1) Board of Directors:
Qamar Hussain Nazrat Bashir Tariq Kirmani Haniya Shahid Naseem President Director Director Director

12

3.7-2) Audit Committee:

Tariq Kirmani Nazrat Bashir Haniya Shahid Naseem Chairman Member Member

3.7-3) Auditors:
Anjum Asim Shahid Rahman Chartered Accountants

M. Yousuf Adil Saleem & Co. Chartered Accountants

3.7-4) Legal Advisors:

Mandviwala & Zafar Advocates & Legal Consultants

3.7-5) Registered Office:

NBP Building I.I. Chundrigar Road, Karachi, Pakistan. www.nbp.com.pk

13

CHAPTER-4

DEPARTMENTS IN NBP

In this chapter I have discussed various department of National Bank of Pakistan. The NBP Wah Cantt main branches Wah (0415) have departments named as below:

1) Deposits section 2) Cash section 3) Remittances section 4) Clearing section 5) Computer section (SWIFT) 6) Advances section 7) Foreign exchange section 8) Human resource department

4.1) DEPOSITS SECTION:

14

No business including banks can be carried out exclusively and they need funds from outside. And in the case of a bank, borrowing funds from outside parties is very important because the entire banking system is based on it. For this purpose deposit section was formed.

Banks borrowing is mostly in the form of deposits. These deposits are lent out to different parties. Profit is determined by the difference between the rate at which these deposits are borrowed and the rate at which they are lent out. Deposits are referred to as the life-blood of a bank. To receive deposits is a basic function of all commercial banks and they accept deposits as debts. When a bank receives a deposit from a customer, a relation is formed in which the customer becomes the creditor and the bank a debtor. There is an agreement that the amount owned would be paid back by the bank to the depositor on demand or after a specified time.

Classification of Deposits:

Bank deposits can broadly classified as: Current deposits PLS saving deposits Fixed Deposits or Term Deposits National income daily account (NIDA)

4.1-1) Current Deposit:

15

Current Deposits are payable to the customer whenever they are demanded. These deposits are treated as current liabilities by the bank. No profit is given on these deposits and customers are required to maintain a minimum balance in such accounts. This is because the depositors may withdraw current deposits at any time and as such the bank is not entirely free to use such deposits. The current account can be opened by filling an account opening form that includes all the information about that specific organization plus specimen signature card, National Identity Card (NIC) copy, certificate of incorporation (if it is a company) and other undertakings in case of individual; their minimum opening balance must not be less than Rs-500.

4.1-2) PLS Saving Deposits:

Profit and loss sharing (PLS) saving deposits account can be opened with very small amount of money and the depositor is issued a chequebook and ATM card for withdrawals. A healthy profit is paid on such accounts. To open a PLS saving account a minimum of Rs. 100 is required but one has to keep a minimum of Rs. 5000 in the account to be eligible for sharing profit/loss of the bank. The rate of the profit or loss on PLS saving account shall be determined by the bank at the close of each half-year and the banks decision will be final and not challengeable.

For opening an account, account-opening form has to be filled with introduction reference. Copy of NIC, specimen signature card and two photographs are also to be attached with the form. Zakat is deducted yearly on 1st Ramazan at 2.5% on principal

16

amount. Incidental charges of Rs 150 are deducted on keeping balance less than Rs 5000. If the person wants to close the account, he/she has to pay closing charges of Rs 100.

4.1-3) Fixed or Term Deposits:

The deposits that can be withdrawals after a specified period of time are referred to as fixed or term deposits. The period for which the bank keeps these deposits varies from three months to five year in accordance with the agreement made between the customer and the banker. Interest/return is paid to the depositors on all fixed or term deposits and the rate of interest/return changes with the duration of amount kept.

Minimum required balance of Rs 10000 is needed to open this account. Zakat is deducted on yearly basis on 1st Ramazan at 2.5%.

4.1-4) National income daily Account (NIDA):

It is a form of current account in which customer can get daily profit. NIDA is perfect for people who want the earning on their account. NIDA profit earnings have no limitations. The deposit starts with a minimum of Rs 250000, while there is no upper limit.

4.2) Cash Section:

This is a very important department in a bank. There are two basic functions performed by the cash section are: I. II. Receipts Payments

17

4.2-1) Receipts:
An individual who has account in the bank can deposit cash in his account. In order to deposit money, one needs to fill the deposit slip in which the account holder writes his name, account number, amount of the money to be deposited both in figures and in words.

After filling the deposit slip the cash amount along the deposit slip is submitted to the cashier. The cashier collects the cash amount and after his verification the cashier stamps the deposit slip, one part of the deposit slip is given back to the customer and the other part of the deposit slip remains with the bank for the record purposes.

4.2-2) Payments:
The payment made by cash department follows the specified procedure. Normally the cash department has token counter and cash counter. The procedure of clearance of a cheques or payments is as following.

First of all the customer present his cheques at the token counter. The clerk at the token counter collects the cheques and records the cheques number, the account number and the amount, which is to be drawn. Then he/she stamps the cheques at the token counter. Then a token is given to the customer and he is asked to wait for his turn. Then the cheques is transferred to the passing officer, who verifies the kind and details of the cheques and

18

checks whether the customer holds sufficient balance in his account and have a valid cheques or not. Three types of cheques are:

4.2.2-a) Bearer Cheque:

Bearer cheque is one on which the bearer is written after the name of the payee. It is payable to the bearer, holder or possessor i.e. any one who present it at the bank. The bank is under no liability to ensure that the payment is made to the right person. This cheque is valid up to 6 months. 4.2.2-b) Order Cheque: Order cheque is a cheque made payable to the certain person or order. It is a cheque on which the order is written after the name of the payee and is made payable to a certain person with out the addition of the word order. It can only be transferred by endorsement and delivery.

4.2.2-c) Crossed Cheque: When two parallel lines are drawn across the face of the cheque, it is said to be the crossed cheque. A crossed cheque is not en cashed at the counter but collected only by a bank from the drawee bank.

4.3) Remittances Department:

NBP Wah Cantt Branch,Wah(0415) has a Remittances Department which transfers the funds from one place to another place. They are classified as:

19

 Inwards remittances-Money coming into the bank. Outward remittances-Money going outside the bank . Major Kinds Of Remittances: NBP Wah Cantt Branch,Wah(0415) transfer money from one place to another place by three ways. 1. Demand draft (DD) 2. Mail transfer (MT) 3. Telegraphic transfer (TT)

4.3-1) Demand Draft (DD):

Demand draft is one way of transferring money from one branch to another branch or bank. A draft is an order drawn by a bank on its branch or on another bank in a different place requiring the later to pay on demand the sum of money specified in the draft. A draft is required to be filled with necessary particulars about the beneficiary (person who will get the money) and sender (person who is sending the money) is given.

The sender deposits the amount of DD, Withholding Tax, Excise duty and other commission at the bank counter, from where he is given a receipt and in accordance with this receipt he is issued a demand draft. After issuing the DD, the remittances department sends credit advice to the branch where the DD is sent. When the responsible branch receives the DD from the originating branch for clearing they debit the account.

20

4.3-2) Mail Transfer (MT):

When a customer requests the bank to transfer his money from this bank to any other bank or the branch of some other bank within or outside the country, the first thing he has to do is to fill an application form. In the application form he states that I want to transfer the money from this bank to the other bank by mail (courier service).

The MT form has to be filled with all the required information and payment has to be made at the bank counter including Rs. 30 mail charges, 0.3% withholding Tax and other bank charges. Person receiving the MT must hold an account with the collecting bank in order to collect his money.

4.3-3) Telegraphic Transfers (TT):

In this mode of faster money transfer the sender is required to fill the TT form in which he will give all the necessary details about the sender and beneficiary. The sender deposits the money to be transferred including Rs 100 fax charges, 0.3% withholding Tax and other bank charges at the bank counter. The remittances officials send a telegraph to the concerned branch with specified code words and the receiving branch make payment to the customer. Vouchers are sent by ordinary mail to keep in record at the end.

4.4) Clearing Section:

A clearinghouse is an association of commercial bank set up in a given locality for the purpose of in charge 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

21

clearing system is operated by state bank of Pakistan. If the state bank of Pakistan has no office at a place, then National bank of Pakistan as a representative of the state bank acts as a clearinghouse.

Clearing House helps in recording the cheques which are going out from the bank and also recording those cheques which are coming into the bank. When a cheque is with drawn, clearing house helps in clearing those cheques. In the bank two types of clearing books/registers are maintained.

Inward clearing book. Outward clearing book.

4.4-1) Inward Clearing Book:

This book is used by the banks for the purpose of recording all the cheque, which are being received by the bank. NBP uses General account (Debit voucher).

4.4-2) Out Ward Clearing Book:

The bank uses outward clearing register for the purpose of recording all the details of the cheques that the bank has delivered to other banks. For this purpose NBP General account (credit voucher) is made.

4.5) Computer Section:

As it is the age of computer so management of NBP has installed computer with specialized softwares for recording the data and other information. Special computer

22

software is developed to ensure full security and safety of the bank data. There is a SWIFT center in the branch. With the help of this SWIFT center, branch deals with the other branches located within and outside the country. In NBP Wah Cantt. branch,Wah(0415), the computer section performs several functions, which are as under:

To record all the transactions made in case of deposits and by the people and also to record all the withdrawals made by the customer throughout the day. To record all the vouchers made by the deposit and remittance section. To close the daily record by reconciling the debit and credit vouchers.

4.6) Advances Section:

Advances are the most important activity for all financial institution, because it is the main source of earning. However, at the same time, it is a very dangerous task because of the risks involved. Now it is quite clear that risks cannot be eliminated but can certainly be minimized largely with certain techniques.

In order to keep the full advantages of credit and to make good decisions, the following aspects of 5 Cs must be given due consideration. capacity of the creditor Capital needed by the creditor Economic conditions of the country Collateral offered by the creditor Character of the creditor 23

The advances offered by NBP wah cantt, branch can be classified as: 1) Cash finance 2) Demand finance 3) Running finance 4) Housing finance (SAIBAAN) 5) Agriculture finance 6) Advance salaries 7) Financing against Insurance policy

4.7) Foreign Exchange Department

Foreign exchange department is one of the most important department of the national bank of Pakistan Wah Cantt. Branch,Wah(0415). This department deals in foreign currency. It provides the safe custody to the customers having foreign currency. This department also pays interest to its account holders in shape of foreign currency.

4.8) Human Resource Department

Human Resource Department is one of the most important department of National Bank of Pakistan which include functions such as Recruitment, Selection, Training and Development. They are explained as below:

Recruitment

24

There was no set rule for recruitment. Political involvement is also making problems to NBP; resultantly every change in government saw a large number of new industries. There have been no criteria for selection of employees to lower or officer /executive grades. This was done at times thorough simple interviews, however now regular tests are also conducted for recruitment to the post of the officers.

Selection Process
Selection is divided into following steps. Short listing of the application Candidates were sent the test calls. In the first step thousands of candidates apply for limited posts available. The head office sent the calls to only those candidates who fulfill the requirement of the job advertised.

1. Tests The Pakistan bank council under the supervision of the Pakistan banking and finance commission conducts test. In the test the applicants are further short listed.

2. Interviews For the interview only those candidates are called which qualify the written test. Different types of questions are asked from the candidates by the interviewing board, which include.

25

 Question about the personal background extraordinary activities during education and about personal contacts. About the role of banking in current situation of the economy. Role of foreign enterprise in public economy etc.

A part from these questions the candidate personnel interests are also discussed and an effort is made to have the understanding of the individuals personality and after these questions an evaluation is made weather the candidate will prove an asset to the organization or not. 3. Merit list After the final result, the successful candidates are sent the appointment letters and they are asked to sign the agreement with the bank person.

4. Training and Development After a candidate is selected, He undergoes training process. The training helps him to have better understanding of the organization and also helps him to learn in a healthy environment and understands each and every steps necessary for his job and beneficiary for the organization.

26

CHAPTER-5

ACTIVITIES PERFORMED BY INTERN

5.1) Introduction:
This chapter tells us about the important activities performed by myself during internship. I will divide this chapter in two sections. The first section tells us about the branch in which I worked the names of the persons in that branch. In the second section I will try to convey my learning during internship to you people.

5.2) NBP Wah Cantt. Main Branch:

National Bank of Pakistan Wah Cantt. Main Branch is located in P.O.F Aslam Market Wah Cantt. Wah. Its branch code is 0415 and its the main branch of the area. Lalazar Basti Wah Cantt. , PMO, Taxila City, H.I.T Taxila, H.M.C Taxila and Hasanabdal works

27

under the main branch and this branch is doing its job remarkably well in providing services to its sub-branches.

NBP Wah Cantt. Main Branch(0415)

Taxila-CITY

Lalazar Basti Wah Cantt

Heavy Mechanical Complex Taxila

Hasanabdal District Attock

Heavy Industry Taxila

Project Management Organization.(Khanpur) Taxila

5.3) Employees Working in the Main Branch Wah Cantt(0415):

Name: Designation:

Arif Muneer Quraishe Manager

28

Name: Designation: Name: Designation:

Touqeer Ahmad Operational Manager Ismail Ahmad Grade 1 officer

Name: Designation:

Arnan Khan Credit Officer

Name: Designation:

Muhammad Waheed Accountant

Name: Designation:

Asghar Mehmood Incharge of Pension Department

Name: Designation:

Shoaib Khan Incharge of Foreign Affairs

Name: Designation:

Rasheed Clerk

Name: Designation:

William Janson Pion

29

Name: Designation: Name: Designation:

Syed Iktsar Shah and Awais Butt Cashier Nousheen and Rabia Management Trainee Officer

Name: Designation:

Raja Latif, Aslam Chaudry,Zafran Shah and M.Muneer Khan Guard

5.4) Nature of Work Experience;

I worked at National Bank of Pakistan,Wah Cantt. Main Branch(0415), Wah from 31st of January,2011 to 31st of March,2011 having a duration of eight weeks fulfilling the requirement of my degree.

During internship I acquired a lot of experience in the following fields:

DISPATCH which includes letter of thanks, inward mail and outward mail. Pension payment and recording, maintenance of pensioners record. Cheque book issuance and recording. On-Line Banking. FEX (Foreign Exchange) Department. Accounting procedure and book keeping. Customer Dealing.

30

A lot of people helped me during internship. I will like to mention their names and pay a lot of thanks to them for helping me in acquiring a lot of experience during my short stay at the bank.

In Dispatch department, Mr. Muhammad Waheed helped me to get a knowledge about letter of thanks,inward mail,outward mail,DD,MT and TT and also learned on-line banking from him.

Mr.Asghar Mehmood helped me a lot during my stay at pension department about pension payment order (PPO) and record maintenance of pensioners record.

Mr.Shoiab Khan ,incharge of Foreign exchange Department helped me in learnig about the exchange of money dealing with foreign currency.

Mr. Tauqeer Ahmed,Operational manager gave his precious time for helping me to learning about the accounting procedure and book keeping.

Mr. Arif Munir Quraishe during different time duration helped me from his pecious time and knowledge about different areas of banking. He also helped me in writing my report by giving very good tips and data about bank.

Mr. Istkar Shah and Awais Butt told me how to deal with customers and how to make them satisfy with your work.

31

CHAPTER-6

FINANCIAL ANALYSIS

6.1) Introduction:
In this chapter I have done the financial analysis which include ratio analysis and comparison with other banks in order to know about its strengths and weaknesses.. Financial analysis is important for several parties such as creditors, suppliers, investors and management. Financial analysis is needed to do comparison with its previous years as well as with other banks and do the required home-work.

The parties interested in financial analysis are as follow:

Creditors- From whom we get financial assistance. Suppliers of long term debt. Investors. Management including top, middle and low-level.

6.2) RATIO ANALYSIS

It is the relationship between two quantities of some magnitude. Ratio Analysis is needed to see whether the firm has improved or not. Ratios are of many types. I have calculated some ratios which will tell us about the financial strength and weaknesses of the bank.

32

6.2-1) Current Ratio

Current ratio is the relation between companys current assets covers its current liabilities. It tells the companys ability to meet its short term obligations and high ratio is preferred. Current ratio is calculated by dividing current assets by current liabilities.

Current Ratio= Current assets / current liabilities Year Currant Assets Currant Liabilities Current Ratio 2009 59666438 42269623 1.41 2010 53496240 46160038 1.15

1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2009 2010 Current Ratio

Interpretation This increase in the current ratio in year 2009 shows that the bank has enough assets to compensate its liability which is good trend as compared to year 2010.

6.2-2) Cash Ratio

33

The cash ratio shows the ability of the bank to generate sufficient cash to meet its short term and current liabilities. The formula for this ratio is given below:

Cash Ratio= Cash / Current Liabilities Year Cash Current Liabilities Cash Ratio 2009 115827868 42269623 2.74 2010 115442360 46160038 2.5

2.75 2.7 2.65 2.6 2.55 2.5 2.45 2.4 2.35 2009 2010 Cash Ratio

Interpretation The ratio shows the ability of a bank to meet its short term obligations by generating sufficient amount of cash. This ratio for 2009 is 2.74 which is more than 2010 which is 2.5.

6.2-3) Gross Profit Margin Ratio:

Gross Profit Margin ratio is the ratio of Gross Profit to interest earned. Its formula is given below as:

34

Gross Profit Margin Ratio= Gross Profit * 100/ Interest Earned Year Gross Profit Interest Earned Gross Profit Margin Ratio 2009 44814070 77947697 0.50 = 50% 2010 50884609 88472134 0.57 = 57%

58% 56% 54% 52% 50% 48% 46% 2009 2010 Gross Profit margin ration

Interpretation Gross Profit in 2009 is 50% while in 2010 it is increased to 57%. Its a good sign for the bank because its profitability has increased.

6.2-4) Net Profit Margin

35

It measures the profit from each rupee of sales after all expenses have been paid. The ratio is calculated as follows:

Net profit margin= Net profit after taxes * 100 / interest earned Year Net profit after taxes Interest earned Net profit Margin Ratio 2009 17561846 77947647 0.22 = 22% 2010 17563214 88472134 0.19 = 19%

22% 21% 20% 19% 18% 17% 2009 2010 Net Profit Margin Ratio

Interpretation Profit has decreased in the current year 2010 as compare to the previous year profit in 2009 which was 22% and now it lowers to 19%.

6.2-5) Net Working Capital

Net Working Capital is obtained by subtracting current liabilities from current assets. Its formula is given as below:

36

Net working Capital = Current Assets Current Liabilities Year Current Assets Current Liabilities Net Working Capital: 2009 59666431 42264623 17396815 2010 53496240 46160038 7336202

18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0

Net Working Capital

2009

2010

Interpretation Net Working Capital from 2009 has decreased as compared to 2010. In 2009 it was 17396815 and in 2010 it is 7336202.

6.2-6) Net Worth

Net Worth is obtained by subtracting total liabilities from total assets. It is given by the following formula:

Net Worth = Total Assets Total Liabilities

37

Year Total Assets Total Liabilities Net Working Capital:

2009 944582762 825676384 118906378

2010 1035024680 906528852 128495828

130000000 128000000 126000000 124000000 122000000 120000000 118000000 116000000 114000000 2009 2010

Net Worth

Interpretation In 2010 net worth is 128495828 while in 2009 it is 118906378. It shows that in 2010 Net Worth is increased as compared to 2009.

6.2-7) Total Asset Turnover Ratios

This ratio shows how much you get on assets. It can be calculate by dividing interest earned by total assets. Its formula is given below:

Total Asset Turnover Ratio= Interest Earned / Total Assets Year Interest Earned Total Assets Total Asset Turn Over Ratio 2009 77947697 944582762 .082 = 8.2% 2010 88472134 1035024680 .085 = 8.5%

38

8.50% 8.40% 8.30% 8.20% 8.10% 8.00% 2009 2010 Total Asset Turnover Ratio

Interpretation This shows that total asset turn over ratio has increased from 2009 which was 8.2% to 2010 which is 8.5%. This is a good sign for the bank.

6.2-8) Fixed Asset Turnover Ratio:

This ratio shows how much you get on assets. It can be calculate by dividing interest earned by fixed assets. Its formula is given below:

Fixed Asset Turnover ratio = Interest earned / Fixed Assets Year Interest Earned Fixed Assets Fixed Assets Turnover Ratio 2009 77947897 25147192 3.09 = 30.9% 2010 88472134 26888226 3.29 = 32.9%

39

33.00% 32.50% 32.00% 31.50% 31.00% 30.50% 30.00% 29.50% 2009 2010 Fixed Asset Turnover Ratio

Interpretation This shows that fixed asset turn over ratio has increased from 2009 which was 30% to 2010 which is 32%. This is a good sign for the bank.

6.2-9) Return on Investment:

This ratio shows that how much you get on your investment. Return on investment is given by the following formula as:

ROI = Net Profit Margin * Total assets turnover Year Net Profit Margin Total assets turnover ROI 2009 0.22 0.082 0.01804 2010 0.19 0.085 0.0160

40

0.018 0.0175 0.017 0.0165 0.016 0.0155 0.015 2009 2010 ROI

Interpretation Return on investment has decreased in 2010 as compared to 2009. The ROI for the year 2009 was 0.018 and that in 2010 was 0.016.

6.2-10) Return on Assets:

This ratio tells us how much you get on your assets. It is calculated by dividing profit after taxes by total assets. Its formula is given as below:

ROA = Profit after taxes / total assets Year Profit after taxes Total assets ROA 2009 17561846 944582762 0.018 2010 17563214 1035024680 0.016

41

0.018 0.0175 0.017 0.0165 0.016 0.0155 0.015 2009 2010 ROA

Interpretation Return on assets has decreased in 2010 as compared to 2009. The ROI for the year 2009 was 0.018 and that in 2010 was 0.016.

6.2-11) Return on Equity:

Return on equity shows us the return that we get on our shareholders equity. It is shown by the following formula:

Return on equity = PAT / Shareholders Equity Year PAT Shareholders Equity Return on equity 2009 17561846 94141919 0.186 2010 17563214 103762310 0.16

42

0.19 0.185 0.18 0.175 0.17 0.165 0.16 0.155 0.15 0.145 2009 2010

ROE

Interpretation This ratio shows us a decreasing trend from 2010 as compared to 2009 which is not a good sign. Return on Equity in 2009 was 0.186 and that in 2010 was 0.160.

6.2-12) Debt to Asset Ratio:

The ratio of total liabilities to the total assets is Debt to Asset ratio. It is given by the following formula as below:

Debt to Asset Ratio = Total Liabilities / Total Assets Year Total Liabilities Total Assets Debt to Asset Ratio 2009 825676384 944582762 0.87 2010 906528852 1035024680 0.87

43

1 0.8 0.6 0.4 0.2 0 2009 2010 Debt to Asset Ratio

Interpretation The debt to equity ratio for both the years is almost same. In both the years it was 0.87 which is not a bad sign.

6.2-13) Debt to Equity Ratio:

Debt to equity ratio tells us the ratio of total liabilities or debts to the shareholders equity as expressed by the following formula:

Debt to Equity Ratio = Total Debts / Shareholders Equity Year Total Debts Shareholders Equity Debt to Equity Ratio 2009 825676384 94141919 8.77 2010 906528852 103762310 8.73

44

8.77 8.76 8.75 8.74 8.73 8.72 8.71 2009 2010 Debt to Equity Ratio

Interpretation There is a slightly decrease in the debt to equity ratio from 2010 as compared to 2009 as shown in the above graph by 0.4 . This is also not so much bad sign.

6.2-14) Equity Multiplier:

Equity Multiplier is obtained by dividing the total assets to the shareholders equity as given by the following formula as given below:

Equity Multiplier = Total Assets / Shareholders equity Year Total Assets Shareholders equity Equity Multiplier 2009 944582762 94141919 10.03 2010 1035024680 103762310 9.97

45

10.04 10.02 10 9.98 9.96 9.94 2009 2010 East

Interpretation In both the years equity multiplier is almost 10.

6.2-15) Interest Cover Ratio:

The money that we have to pay our interest is interest cover ratio. It is given by the following formula as given below:

Interest Cover Ratio = PBIT / Interest paid Year PBIT Interest paid Interest Cover Ratio 2009 21300173 40489649 0.529 2010 24415119 45250476 0.539

46

0.54 0.538 0.536 0.534 0.532 0.53 0.528 0.526 0.524 2009 2010

Interest Cover Ratio

Interpretation The interest cover ratio has increased in 2010 as compared to 2009 which is a good sign for the bank.

6.2-16) Earnings per share:

Earnings per share are obtained by dividing Profit after taxes by Number of shares. Its formula is as follow:

Earnings per share = PAT / No. of Shares

13.05 for the year 2009 13.05 for the year 2010

47

14 12 10 8 6 4 2 0 2009 2010 3rd Qtr 4th Qtr Earnings per share

Interpretation The earnings per share is directly given in the income statement which is same for both the years which is 13.05

6.4) Comparison with Soneri Bank:

I have selected Soneri Bank, Pakistan for comparison with National Bank of Pakistan. Looking first at the balance sheet of both banks.

ASSETS

NBP 2010

Soneri Bank 2010 7,247,711

Difference

Cash and balances with treasury 115,442,360

108194649

48

banks Balances with other banks Lending to financial institution Investment Advances Other assets Operating fixed assets Total assets LIABILITIES Bills payable Borrowings from 30,389,664 23,025,156 301,323,804 477,506,564 53,496,240 26,888,226 1,035,024,680 8,006,631 financial 20,103,591 1,400,451 2,531,900 34,985,663 54,675,721 3,410,654 3,468,923 108,105,678 1,857,810 12,370,528 82,016,811 1,197,630 -1,745,496 -99,188,005 8,917,673 6,023,221 12,370,528 329,103 8,381,360 536,313 8,917,673 28,989,213 20,493,256 266,338,141 422,830,843 50,085,586 23,419,303 926919002 6,148,821 7,733,063 750,135,077 -1,197,630 106,704 44,405,542 -807,340,847 119,578,155 7,431,407 12,079,716 65,528,335 95,380,950 24,197,205 119,578,15 5

institutions Deposits in other accounts 832,151,888 Sub-ordinated loans -Liabilities against assets subject 106,704 to finance lease Other liabilities Deferred tax liabilities Total liabilities Net Assets SHARE HOLDER EQUITIES Share capital Reserves Unappropriated profit Total shareholder equities Surplus on revaluation Total shareholder equities & Total liabilities 46,160,038 -906,528,852 128,495,828 13,454,628 24,450,244 65,857,438 103,762,310 24,733,518 128,495,828

Looking at the balance sheet of both banks we come to the conclusion that National Bank of Pakistan is highly profitable then Soneri Bank for the year 2010. It is because of the fact that it is the old bank and the first nationalized bank of Pakistan. People have high trust on the bank and they happily deposit their money in the bank which the bank invests further and get high profit.

49

The total assets for the year 2010 for National Bank of Pakistan are 1,035,024,680 which is more than that of Soneri Bank which are 108,105,678. The difference is 807,340,847 which shows how good National Bank operates.

The net assets for the year 2010 for National Bank of Pakistan are 128,495,828 which is more than that of Soneri Bank which are 8,917,631. The difference is 119,578,155 which show the increase net assets obtained by National Bank than that of Soneri bank.

The total shareholder equity and total liability of National Bank of Pakistan is 128,495,828 which is more than that of Soneri Bank which is 8,917,673, The difference between these 119.578,155 which shows that how much trust public and shareholders have because they get advances and other liabilities more easy and in large amount as compared to Soneri Bank. Similarly they lend to other persons in large amount as well to other financial institutes as compared to Soneri Bank which shows its capability to lend.

Graphically:
1,200,000,000 1,000,000,000 800,000,000 600,000,000 400,000,000 200,000,000 0 NBP 2010 Soneri Bank 2010 Total Assets Net Assets Total Liability Total Shareholder and liability

50

Similarly when we look at the profit and loss statement of both the banks we can easily detect that National Bank of Pakistan is highly profitable than that of Soneri Bank. In 2010 the net interest earned by National bank of Pakistan is 88,472,134 while that by Soneri Bank is 10,250,494 and the difference is 78,221,640 which shows that National Bank of Pakistan has earned more interest than that of Soneri Bank. Also interest paid by National Bank is 45,250,476 which is more than that of Soneri Bank which is 7,203,842 and the difference is 38046634 which shows the ability of bank to get loans and also trust of outside world on National bank of Pakistan.

Interest income for National Bank of Pakistan is 50,884,609 which is also more than that of Soneri Bank which is 2,822,847 and the difference is 48,061,762. Similarly Profit before tax for National Bank of Pakistan is 24,415119 which is more than that of Soneri Bank having amount 140,447 and the difference is 24,274,672. Similarly Profit after tax of National Bank of Pakistan 17,563,214 is more than that of Soneri Bank 125,440. Earning per share of National Bank of Pakistan is 13.05 and that of Soneri Bank is 0.21 which shows the clear difference of both. Graphically as shown
90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0

Interest Earned Interest Paid Profit Before Tax Profit After Tax Earning per Share NBP 2010 Soneri Bank 2010

51

CHAPTER-7

SWOT ANALYSIS

SWOT is not a single word but is an abbreviation of four different word which are Strengths, Weakness, Opportunities and Threats correspondingly. In other words SWOT analysis is the name of a technique with the help of which we can measure the performance of an organization and it also helps us to identify the problems.

7.1) SWOT of NBP:

7.1-1 Strengths of NBP:

It is the oldest and largest bank operating in Pakistan so people have confidence and they deposit money without any fear. Its working environment is very pleasing. National Bank of Pakistan facilitates customers by providing additional services in the absence of State Bank of Pakistan and work as an agent of SBP. Normally two bonuses each on Eid-Ul-Fitar and Eid-Ul-Azha are offered to employees which encourage them to work hard. They have the largest network of banks available in the country as compared to other banks and provide customer satisfaction at their door step. The staff members from top to bottom have good relations and contribute to each other in a good manner. NBP open different branches in rural areas in order to facilitate the farmers.

52

 Staff colleges are there for providing training to the employees.

7.1-2) Weaknesses of NBP:

Mostly complaints of customers are not heard seriously which damages the image of the bank. In the rush hours, clients have to wait for a longer time due to lack of staff. Marketing efforts of the bank are not up to the standards. NBP is under the political pressure. Appointment, transfer, promotion, and increments are based on favoritism. Job rotation is very slow. Counter service is very poor during the rush hours. The distribution of work is very unequal. Its the century of technology while NBP not following it to the extent as it is needed and mostly manual record keeping is done. Decision making is very slow.

7.1-3) Opportunities of NBP:

Due to technology advancement especially in communication sector, the world has become a global village and there is a better chance for NBP to avail such a good opportunity and become a part of electronic banking and increase its profitability by providing 24 hours banking..

53

 As micro financing is getting popularity day by day so a real chance for NBP is to adopt micro financing scheme and increase its profitability with customer satisfaction.

7.1-4) Threats:
National bank is the only Government bank so there is political interference time to time and every political government wants to impose its own policies. The bank is now a days acting on downsizing policy which had put all employees in a doughy condition and it affected employees performance a lot. The birth of new competitors especially dealing in foreign affairs is also creating a great threat for the bank No system for the removal of Customer complaints. Due to political instability in the country, public has a low confidence to open a foreign currency account in NBP.

7.2) Comparison with Soneri Bank

Every bank and every organization in the world have some strengths, weaknesses, opportunities, threats. I have discussed strengths, weaknesses, opportunities and threats of National Bank of Pakistan in the above part. Now I am going to compare it with Soneri Bank in this section.

7.2-1) Strength Comparison with Soneri:

54

 National Bank of Pakistan is the oldest bank of Pakistan and the first commercial bank formed after the partition of sub-continent so people have more confidence than that of Soneri bank because Soneri bank has started working a few years back and had not got much attention of people. National Bank of Pakistan works as an agent of State Bank of Pakistan and provides a lot of services in its absence as compared to Soneri bank which is private and not nationalized and hence not an agent of SBP. NBP is having more deposits than that of Soneri Bank because of the reason that it has gained the confidence of people. NBP has a large network of branches throughout the country as compared to Soneri bank. NBP opened branches in rural areas to facilitate farmers as compared to Soneri which is not giving much attention to farmers.

7.2-2) Weaknesses Comparison with Soneri:

In NBP one weakness is that they dont give much attention to its customers complaints which makes its customers a little bit dissatisfied where as Soneri bank although new in the area but it is trying to gain its position by giving attention to its customers. Being a nationalized bank have more customers during rush hours and it become difficult for the bank to handle them due to lack of staff whereas Soneri bank being a private bank have staff but not enough customers.

55

 The marketing efforts of the bank is not up to standards due to the fact that it is nationalized and old bank whereas Soneri bank needs marketing to get himself popular in the area and gain its position. Its marketing is also not much good but it is better than that of NBP. Govt. influence and favoritism is more in NBP as compared to Soneri bank because one is national and the other is private. Work distribution is unequal is NBP as compared to Soneri bank. Decision making in NBP is very slow as compared to other banks and also Soneri bank.

7.2-3) Opportunities Comparison with Soneri:

One opportunity for NBP is to start 24 hours banking by adopting advance technology of ATM and online banking which will help NBP to gain a lot of profit in future as compared to Soneri bank and other newly opened banks in the area and due to its nationalized nature it will attract more and more public than other banks in the area such as Soneri bank. As micro financing is getting popularity day by day so a real chance for NBP is to adopt micro financing scheme and increase its profitability with customer satisfaction as compared to Soneri bank which is not in a position to to adopt such a good scheme and gain profit.

7.2-4) Threats Comparison with Soneri:

56

 National bank is the only Government bank so there is political interference time to time and every political government wants to impose its own policies with the change in Govt. whereas Soneri bank on the other hand a private bank so has no threat of political interference. The bank is now a days acting on downsizing policy which had put all employees in a doughy condition and it affected employees performance a lot where as Soneri bank has just got birth and is lacking employees and tries to hire more and more employees with no downsizing. The birth of new competitors especially dealing in foreign affairs is also creating a great threat for NBP whereas Soneri bank is now in establishing stage and has not given much importance to foreign affairs so they have for the time being no threat with such competitors. No system for the removal of Customer complaints as compared to Soneri bank. Due to political instability in the country, public has a low confidence to open a foreign currency account in NBP and similar is the case with Soneri bank which is also operating in Pakistan.

57

Chapter 8

FINDINGS AND RECOMMENDATION

8.1) Findings
During the short span of two months internship in NBP Wah Cantt. Main branch(0415) Wah,I observed a lot of things, some positive and some negative. I observed some of the shortcomings which are as follow:

8.1-1) Communication Problems between the Employees:

There is a single hall in the branch and for communication with each other, the employees use clerical staff which creates a lot of noise in the bank. Due to this gap, the flow of information is very slow which affect the performance of the bank.

8.1-2) Staff Shortage:

I noticed during a short period of internship that in Wah Cantt. Branch the staff is limited and the customers have to wait for along time during rush hours. The old age pensioners

58

account is also there. Due to shortage of staff, old people have to wait for a long time to receive the pension.

8.1-3) Lack of Computer Expert:

There is lack of computer experts in the branch. Branch has the computers but no one can operate them efficiently. They still face this problem and maintain registers for the records which slow down the progress of work.

8.1-4) Customer Satisfactions:

In NBP customer dealing is good but during the hour of rush the customer had to wait for their turn. Client come to one worker to get the required information, the first worker refer to other and second refer it to third, the third person create a lot of tension and dissatisfaction in the mind of the customer. The bank should make sure that every body knows about the importance of customer.

8.1-5) Poor Record Management Systems:

During my internship it was observed that the filling record system of the branch is very poor. When the one record is needed the staff has to spend a lot of hours to find it which creates dissatisfaction in the hearts of our customers.

59

8.1-6) Uneven Distribution of Work Load:

During my internship I observed that the work was not equally distributed which resulted is discomfort among the staff. On one hand there is employee who is free the whole day while on the other hand there are employees who dont even get a second to relax.

8.1-7) Differences between Theory and Practice:

A vast difference exists between theory and practice in NBP which means that the written procedure is some what different from the practical work done by employee.

8.1-8) Need For Better Training Programs:

The need of training is felt in the entire world. Training of the personnel is part of human resource management. It has been noticed that the training programmed of NBP is not proper. Better training programs are necessary and should be imparted so that efficiency of bank gets increased.

8.1-9) Recruitment Policy:

Human resources are the lifeblood of the organization. If a person is recruited carefully he can become an asset to the organization and in the case of carelessness he can become a liability. Due to political influence unsuitable candidates are selected.

8.1-10) Promotions:

60

Promotion in the national bank of Pakistan is purely on the seniority so the new young person having high qualification is not having any chance of promotion of their favorites which gave a sense of dispossession to the deserving employee and their efficiency is affected.

8.2) Recommendations:
National bank of Pakistan is an effectively operating and profit making organization and carrying out its activities under a specified system of procedures but during a short period of internship some suggestions are recommended, which can help in improving performance of NBP as an organization in general and main branch Wah Cantt. in particular.

8.2-1) Professional Training:

NBPs staff lacks professionalism. They have modern technology just like the computer but they dont know that how the computer can be used properly.

Proper professional training is needed and should be given to employees with the passage of time as advancement in technology occurs. Staff colleges and Banking council of Pakistan should perform their duty well.

8.2-2) Delegation of Authority:

61

To make the environment of the work place more clear and competitive, proper authority delegation is required in the bank. Staff members of the bank should be given a task and authority and he or she should be ask for their responsibilities. In this way no one can put the blame of their mistake on others.

8.2-3) Performance Appraisals:

The manager should strictly monitor the performance of every staff member. All of them should be awarded according to their performance in the shape of bonuses and other incentives.

8.2-4) On the Job Training:

On the job training should be carried out by the management to make their staff better understand the global changing economic environment. For these purpose seminars and conferences should be organized.

8.2-5) Provide Sufficient Staff:

Sufficient staff should be provided to branch in order to improve the functioning of the branch especially in rush hours.

8.2-6) Computerization:

62

Most of the work in main branch Wah Cantt. is carried out manually. Registers are kept in every department which is a very tiring job? Only deposit department keep some of there record in computer. It is recommended that every department should keep their data in computers with the provision of security.

8.2-7) Installing Valuator

Valuator machine is used to count the currency notes and its installation will help to eliminate the counting errors and will save time as well.

8.2-8) Staff Relationship:

Good relationship among the staff members should me maintained in order to improve the performance and efficiency of the bank and branch.

8.2-9) Proper Distribution of Work:

During the internship It observed that they was no proper distribution of work in the bank, some of the employee work like ants while others sat idle staring here and there. So this created a lot of overwork situation for some while relaxation for others.

8.2-10) Complaint of Customer:

There should be an information desk to provide the information and to receive the complaints of the customer in the bank. There is no complaint box available in the branch and not any person appointed to hear the complaints. So I suggest to management to install a complaint box in the branch or to recruit a special person for the guidance of the customer.

63

BIBLIOGRAPHY

Annual Report of National Bank of Pakistan 2010.

Annual Report of National Bank of Pakistan 2009.

Meetings with manager (Mr. Arif Muneer) and other staff members.

Collected data from main branch Wah Cantt (0415).

Internet surfing.

My experience during internship.

64