Internship NBP Main Branch MUzaffar Garh

National bank of Pakistan
PREFACE
In order to be able to cope with the changing environment it is necessary to have some practical experience. As the students of Commerce we have to pass through a series of various managerial techniques. During this practical course we are provided with an opportunity to learn that how the theoretical knowledge can be implemented in practical grounds. I was selected to do my internship in National Bank of Pakistan MAIN Branch Muzaffar Garh. I worked there for six months & it gave me a greater practical knowledge about the operations of a bank. In the following pages I have narrated my experience, observations & all the working activities which I observed during my six week internship at NATIONAL BANK OF PAKISTAN MAIN BRANCH MUZAFFAR GARH.
ACKNOWLEDGEMENT
I am highly grateful to almighty Allah who gave me the power to complete this report. I am also highly thankful to my honorable teachers for theirs guidance. I am indebted to all the employees of National Bank of Pakistan MAIN Branch Muzaffar Garh. Special thanks to MR. Ghulam Qasim Manager operations, National Bank of Pakistan main Branch Muzaffar Garh) and MR. Muhammad Irfan OG-1/MTO. And all other employees of the branch for their cooperation.
Table of contents
Topics National bank of Pakistan Banking history History of NBP Branch network Mission statement Corporate philosophy Objectives Organizational structure Organogram of NBP Departments Departments in NBP Foreign exchange department Credit and advances department General banking Account section Remittance section Locker service Govt. receipt and payments Clearing department Computer section Consumer & retailing Work done by me SWOT analysis Suggestion and recommendation page # 4 5 8 9 12 12 13 15 16 18 19 19 28 42 42 49 52 52 53 54 56 60 66 70
BANKING HISTORY IN PAKISTAN

At the time of partition the total number of Commercial Banks in Pakistan were 38 .Out of these Pakistan had 2 banks, India had 29 and there were 7 exchange banks. The total deposits of Pakistan banks stood at Rs. 880.0 millions where the advances were Rs 198.0 million. Before the partition of Sub Continent the entire banking business was almost controlled and managed by non-Muslims. The Muslims were deliberately kept cut of banking profession by the wealthy Hindu community. When Hindu capitalists became sure of the division of Sub Continent, they secretly began transferring their capital to the safe places in India. The funds and the other valuables were transferred at an accelerated pace to India and there was a mass scale migration of non Muslims from West Pakistan to India which also caused the drain on the bank deposits. The Hindus in order to ruin the economy of the newly born State closed down most of the head offices and the branches of scheduled and non-scheduled banks in Pakistan. The number of scheduled banks branches was reduced from 619 to 213 in both the wings of the country after independence. The non-scheduled banks also suffered a severe jolt and their number was reduced from 411 to 106 over the same period. West Pakistan from where there was greater exodus of non-Muslims to India suffered a great deal, as a number of branches fell down (from 487 to 69). In the east Pakistan though the number of branches were not closed in such a great number as in west Pakistan, large portion of the deposits were with drawn from the banks and transferred to India by the non Muslims. The mass scale closure of branches and withdrawal of the deposits caused a dead lock in the banking business in Pakistan. The government of Pakistan was quite aware of the serious banking situation caused by the withdrawal of deposits and wholesale migration of banking staffs to India.
National bank of Pakistan It took up the challenge and started reorganizing the crippled banking immediately after partition. A moratorium of free months was also allowed to banks that had financial difficulty due to sudden withdrawal of deposits. In addition to above, the following arrangements were made for facilitating
Settlement of claims by the governments.
Each bank was to declare on to its offices both in India and Pakistan as
Clearing house for transfer of accounts.
Each bank was open at least one central office in Pakistan where it could consolidate work of all its branches and start paying out to depositors. The government took some effective measures for providing banking training facilities to Muslims. There were some complaints that Hindu banks were not honoring the cheques of Pakistani national and were also refusing to give securities kept in their custody. The government issued an ordinance, which empowered it to investigate all such complaints, and if satisfied of their bonafide, the payments should be realized. In case the bank insisted on non-payments, the government should realize the assets of the banks, which were sufficient to discharge such liabilities. The government of Pakistan also allowed the removal of valuables kept in save deposits vaults and lockers by submitting an application and getting necessary approval from the custodian of evacuee property. The government of Pakistan tried to provide all kinds of facilities with sincerity to the known Muslim bankers for restoring normal banking facilities in the country but the response was discouraging. An inter dominion agreement was reached between India and Pakistan in April 1949. The main provisions of the agreement was as under: 6
National bank of Pakistan The inter dominion agreement could not be fully imported. India delayed the transfer of Muslim deposits to Pakistan. The non-devaluations decision of Pakistan government further led to the suspension of remittance facilities through normal banking channels. Due to panicky withdrawal of deposits; some banks went into liquidation and the payments could not be made to the depositors. In order to regulate both of the banking on sound footings, the following measures were taken to develop the banking system in Pakistan. The State Bank of Pakistan, which is the central bank of the country, was established in July 1948. The National Bank of Pakistan was established on 1949,to serve as an agent to the SBP. The Industrial Development Bank of Pakistan was set up on August 1, 1961 with a Paid up Capital of Rs; five crore. The Agricultural Development Bank of Pakistan (ADBP) was set up in 1961. it provides short , medium and long term loans to the farmers. In Jan, 1974 the entire commercial banks were Nationalized. The weaker commercial banks were merged with the stronger once and in all Five major banking companies were formed. MCB and ABL have again been privatized. Pakistan banking council was set up for coordinating the activities of the nationalized commercial banks. The banking council formulates the policies and guidelines for the banks. Interest has been eliminated from the banking transaction from July 1, 1985. The banks are now accepting saving deposits on Profit and Loss Sharing bases. Modaraba and Leasing Companies are also operating in Pakistan. The banks nationalized, due to weaknesses such as over staffing, deterioration in customer services, raising bad debts, loan on political bases etc, are being 7
National bank of Pakistan gradually denationalized. MCB was privatized in April 1991. The shares of ABL have also been sold to its 7500 workers. Permission to open ten banks in the private sector has also been given. The permission to open an Investment bank has also been given. It will go a long way is providing capital for the industrial projects. The government of Pakistan has also liberalized the exchange and payment procedure. The Pakistani firms and companies can now maintain Foreign Currency accounts in Pakistan on the same bases as known Pakistanis.
HISTORY OF NATIONAL BANK OF PAKISTAN
The normal procedure of establishing a banking company under the Companies Law was set aside and the Bank was established through the promulgation of an Ordinance due to the crisis situation that had developed with regard to financing of jute Trade. The Bank commenced its operations from November 20, 1949 at six important jute centers in the then east Pakistan and directed its resources in financing of jute crop. The Banks Karachi and Lahore offices were subsequently opened in December 1949. State bank of Pakistan after its formation demanded from the Indian Reserve Bank the assets against the Indian currency retired from Pakistan territory. Government of India refused to hand over the assets worth about five hundred million rupees. The dispute is still unsettled and these assets are still not delivered to Pakistan. Until June 1950, the Bank was engaged exclusively on jute operation. Thereafter, it was felt that it could expand its business to include other commodities as well. Bank took a big stride in 1952, when it replaced the Imperial Bank of India, as an agent of State Bank of Pakistan.
National bank of Pakistan With the passage of time its functioning diversified as they take over the function of different institution with the passage of time like in past they took over the function of Imperial bank of India and now of NDFC (national development finance corporation) It is working as the agent of the state bank of Pakistan and performs its functions wherever state bank of Pakistan is not present. The government floated its 10 % of the shares in the open market in past and the ratio became 60: 40 and in future they trying to make it 55: 45. In 1999 national bank celebrated its golden jubilee during the last fifty years bank has made substantial strides in the financial services industry in Pakistan. In 1999 its market share was around 22% and it remains the largest financial institution in Pakistan.
Branch Network
With the geographical development of its branches, the Bank has been able to extend its services to a much larger number of Pakistanis all over the country. Today it has more than 8.5 million accounts. Bank maintains its presence in all the major financial centers of the world through its 15 overseas branches and 5 representative offices. Of these, three representative offices have recently been set up at Tashkent (Uzbekistan), Baku (Azerbaijan) and Almaty (Kazakhstan) to take advantage of the emerging opportunities in CIS countries. Banks role globally is well assisted by its network of correspondent banks located strategically in Asia, America, Europe and Africa. Apart from having a vast branch network, Bank is at the forefront in the acquisition and application of new technologies in every aspect of its banking facilities. It has acquired leased telephone lines for on-line banking. The Bank has 12 Regional Computer Centers to cover various on-line and batch system requirements of branches and controlling
Oversea Branches Domestic Branches
15 Overseas Branches
4 Represative Offices 1 Subsidiary 1 Joint Venture
29 Regional Offices
1,189 Branches
4 Subsidairies
Branch Network: NBP has an extensive domestic branch network of over 1500 branches located all over Pakistan. The Bank also has a presence in 24 international locations including the USA, United Kingdom, Europe and the Far East.
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BRANCHES ALL OVER THE COUNTRY
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Mission statement of national bank of Pakistan

To be recognized in the market place by Institutionalizing a merit & performance culture, Creating a powerful & distinctive brand identity, Achieving top-tier financial performance, and Adopting & living out our values
Corporate Philosophy at National Bank

We at NBP believe that our customers are our most important and 1st responsibility, we must, therefore, serve our present customers and promise to serve our potential customers to the best possible on-counter and behind-counter services. We should try to provide a total and integrate package of services to create satisfied clientele. Our braches, regional offices and head office should regard the customer as their most priority, serving them with maximum possible helpfulness and courtesy. Our second most important responsibility is the employees who work for our great institution. They must have their security , stability and fair treatment in their jobs in recruitments and assignment, in training and development, in promotion and placement . till separation. They should be treated with dignity and should be made to rise to their highest potential working condition should be attended. Supervisor should be tough minded but fair in the pursuit of bank objectives. Our third most important responsibility is our executives and officers. They should have talent, education, experience and ability with a premium, place on
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National bank of Pakistan commitment, knowledge, leadership and orientation towards action, implementation, improvement and achievement of goals. Our fourth responsibility is to the communities that r served by our great institution. Our 1st community is the Pakistani nation whose service is the reason for our existence. Our 5th responsibly is to our owners and stockholders. We must make a sound profit and protect our business by creating financial services.
Objectives of National Bank

Objectives are ends towards which an enterprise activity is aimed. The purpose of business is production and marketing of economic goods and services but to accomplish these objectives to a number of enterprise objectives may be necessary. National bank of Pakistan has certain objectives. These objectives are (1) Advancing loans (2) Accept deposits (3) Remitting of funds (4) Sale of promissory notes (5) Selling and realizing property of bank claims (6) Investment or underwriting of stocks
(1) Advancing loans:
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National bank of Pakistan one of the main objective of NBP is advancing loans to industrialists and traders against security of stock, debentures or other securities
(2) Accept deposits:

Bank provides deposit facility to its customers. The types of deposits are Profit and loss saving accounts Fixed account Current account
(3) Remitting of funds:

The bank provides the facility to its customers remitting large amounts of money in the form of bank Drafts, Telegraphic Transfer, Mail Transfer to where ever the customers want.
(4) Sale of promissory notes:

To sell and realize the proceeds of sale of any promissory notes, debentures, stock receipts, bounds, shares etc.
(5) Selling and realizing property of bank claims:

To manage sell and realize all property whether moveable or immoveable which may come in any way of the bank in satisfaction of its claim.
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(6)Investment or underwriting of stocks:

To invest the funds of the bank in or the underwriting of any of stocks, funds, shares securities, debentures, bonds or scripts or other securities for money issued by any public limited companies and to convert them into money when required.
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National bank of Pakistan ORGANOGRAM OF NATIONAL BANK OF PKAISTAN PRESIDENT & CHAIRMAN
CHIEF REPRESENTATIVE BOARD OF DIRECTOR
PSO & SECRETARIAT SECRETARY
OPERATION COMMITTEE
CREDIT COMMITT EE
ASSET & LIABILITY COM
FINANCE GROUP OPERATIONS GROUP
REGIONA L OPERATI ON OFFICERS OPERATI ON DEPARTM
IT OPERATIONS & SERVICES REGIONAL COMPUTER CENTERS SWIFT CENTERS
LOGISTICS SUPPORT ENGINEERI NG GENERAL SERVICES SECURITY STAFF WELFARE
FINANCE & ACCOUNTS DEPT
EMPLOYE E INSURANC E PENSION RETIREME NT BENEFIT PROVIDEN
CORPORAT E INVESTME NT BANKING GROUP
FOUR OVERSEAS REGIONAL
FAR EAST
EUROPE & USA
CENTRAL ASIA
MIDDLE EAST 17
AUDIT GROUP
RISK MANAGEME NT GROUP
REGIONAL AUDIT OFFICE
REGIONAL CREDIT CHIEF CREDIT DEPT HEAD
HEAD OFFICE AUDIT SPECIA L ASSET MANAG EMENT GROUP
IT PLANNING DEVELOPME NT GROUP
STRATEGIC PLANNING AND ECONOMIC RESEARCH GROUP HR MANAGEME NT DEPT
RETAIL BANKING
IT SYSTEM DEVELOPMENT NETWORKING SOFTWARE DEVELOPMENT HR MANAGEMEN T RECRUITMEN T /PLACEMENT COMPENSATI ON BENEFIT PERSONAL DATA DISCIPLINE ORGANIZA TIONAL DEVELOPM ENT & TRAINING PROMOTION PERFORMANCE APPRAISAL GOAL SETTING TRAINING UNION AFFAIRS 18
ALL REGIONAL CHIEF OFFICER ALL RETAIL BANKING
ELECTRONIC PRODUCT AND SERVICES DELIVERY TO OPERATIONS GROUP
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Departments in National Bank Main Branch

Following departments are working in NBP main branch Foreign Exchange Credit and Advances Remittances and Deposits Accounts Computer Government Consumer retailing
FOREIGN EXCHANGE DEPARTMENT Foreign exchange is an important department in bank system. In the foreign exchange department all the operations of the bank are done in the same way as in all other departments of the bank this department also involve in deposits, remittances and advances but the difference with other department that the foreign exchange department deals in foreign currency rather then in local currency. For opening of account in foreign exchange the minimum balance required is $100.This department is just like Cash Department in local currency. In this department, the dealing is made in foreign currency.
In National Bank of Pakistan, four currency accounts are available:

US Dollar Pound Sterling Japanese Yen Euro
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FUNCTIONS
The department performs the following functions: Account opening Account closing Inward/outward remittance Issuance of traveler cheques ACCOUNT OPENING Terms and conditions: Account opening requires two things 1) National id card of the customer and introducer 2) Introducer CUSTOMER: Customer is the person who comes with the purpose of opening the account INTRODUCER: Introducer is a person having the account in same branch and gives guarantee about the customer. If the introducer is not proper than state bank charges RS 5000/- per head from that employee of the bank who has opened the account of the customer on the request of the introducer.
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Procedure of Account Opening and Depositing Foreign Exchange:

First of all, the customer is required to fill an application form. Then he attaches the photocopy of his identity card and fills the signatory cards. Then he is allotted an account number by entering in the account opening register. Now he fills the pay-in slip and deposits money on the counter. Following things are needed for opening of account:
Account opening form Signature card Letter of kinship Letter of thanks Issuances of cheque book
Account opening form:

Account opening form consist of Category of account Currency Title of account Account number Customer information Initial deposit Authorized person in case of customer death
Signature card:
The signature card included the name and specimen signature of the customer 22
Letter of kinship:
In the latter of kinship the customer authorized the bank to pay the proceedings of his/her PLS/Current foreign currency account to the related person by describing the relationship of the person with the customer after the death of the customer.
Letter of thanks:
Letter of thanks is the latter issued by the bank to the customer for two purposes
1) 1st purpose is to say thanks to the customer for opening the account in their
bank
2) 2nd purpose is to confirm the address provided by the customer while

opening the account.
Issuance of cheque book:

Cheque book is issued to the customer after sending the letter of thanks when the customer comes with the latter of thanks and requests for the issuance of the cheque book. A cheque book (usually having 25 leaves) is issued to the customer.
Closing of Account:
The customer can close the account. The customer is required to submit an application for closing the account. The account is closed out and his balance is paid to
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National bank of Pakistan him after deducting the closing charges, i.e. $ 20 and the application is filed in account closing file. There are many reasons for closing of account Account holder Owen request Death of account holder Closing of account due to the bad manners of account holder
Inward/Outward Remittances
The remittances are of following types: Foreign Telegraphic Transfer (FTT) Foreign Demand Draft (FDD) Foreign mail transfer(FMT) SWIFT Western union money transfer(WUMT) Foreign Exchange Bearer Certificates (FEBC) Special US Dollar Bond
Foreign Telegraphic Transfer:

This is telegraphic transfer just like ordinary local currency TT, but this is foreign currency. Its charges are fixed, i.e., if payment is in cash, charges are Rs. 1500. If payment is through account, Rs. 1200; if deposit is above Rs. 50,000 charges are Rs. 600.
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National bank of Pakistan NBP has its correspondent bank in New York . NBP gives credit to main office Karachi, which gives credit to NPB New York, which gives credit to NPB, which ultimately gives credit to required destined bank and account number. Mode of payment can be cash or by debiting the account. When FTT is received from abroad, NBP debits Main Office Karachi account and gives credit to the account of beneficiary.
Foreign Demand Draft:

Foreign Demand draft is also known as FDD. A person who wishes to remit money to someone in another place may if he does not send his own cheque, obtain from his bank a draft on demand payable to the person who is to be paid the money. It may be drawn upon one of the bankers own branches, or upon some other bank where exists for draft to be drawn. Whenever a draft is drawn own advice is dispatches the same day. Advising the bank or branch as the case may be, of the particular of the draft of that banker on whom it is drawn may recognize the draft was it is presented. When a person requires a draft, he should be asked to complete the prescribed application form in which he should state the amount of the draft, the name of the payee and the place of payment. The bank charges commission Rs. 500 flat, excise duty Rs. 8 or charges. After receipt of money, the entry is passed in FDD register and a number is allotted to FDD. Then FDD is prepared and given to the customer. After this, they give credit to Main Office Karachi, and advice is also sent to Karachi.
Foreign Mail Transfer:
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National bank of Pakistan These are also known as FMT. Transfer by mail of an account of currency to another country. The Remitter sign auroras requesting the banker to transfer the amount by mail, giving the name and address of the payee.
Foreign Bills for Collection:

Under this head, all foreign cheques are included whose payments are to be received from abroad. When a customer asks the bank for collection, the cheque is sent to the bank on which is drawn. Then on the receipt of advice from abroad, the customers account is credited in the bank and debit the Main Office Karachi account. The bank charges $10 or the equivalent amount in rupees.
Foreign Exchange Bearer Certificates (FEBC):

Foreign Exchange Bearer Certificates can only be issued from Foreign Currency Account and not from deposit of local currency. The maturity period of these certificates are 5 years, 7 years and 9 years. It can be issued and enchased only in rupees. The customer account is debited and state bank of Pakistan (SBP) is credited.
Special US Dollar Bond:

The bonds have the maturity period of 3 years, 5 years and 7 years. The bank gives the interest at the rate of 5% + LIBOR, i.e. 2%, 3% and 4% respectively.
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Traveler Cheques
Issuance of Traveler Cheques NBP issues the traveler cheques to those people who want to travel abroad. These are not drawn on any specified bank or banks, but payable at practically all banks throughout the world and guaranteed by some well-known institution. National bank purchases the traveler cheques from American Express Bank and makes the payment after selling it to the client. Procedure A customer is required to submit the following things: Valid passport with visa Return ticket Currency to be deposited in Pak Rupees. Ticket is endorsed. It is converted on the selling rate of that day. Traveler cheques are issued. Their limit is $50 per day for private visit and maximum limit for the year is $2100. Limit for businessman is $200 per day and maximum limit is $6000. But approval from Chamber of Commerce & Industry is required and certificate of ticket issue for which the payment must be made through cheque. Pak rupee currency account is necessary, and he has to present cheque for the amount to the bank. Endorsement of the ticket is very essential. Issuing ticket authority should endorse its stamp on the passport.
SWIFT:
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National bank of Pakistan The SWIFT system (Society for Worldwide Inter bank Financial
Telecommunication) has been introduced for speedy services in the area of home remittances. The system has built-in features of computerized test keys, which eliminates the manual application of tests that often cause delay in the payment of home remittances. The SWIFT Center is operational at National Bank of Pakistan with a universal access number NBP-APKKA. All NBP overseas branches and overseas correspondents (over 450) are drawing remittances through SWIFT. In case of transfer of funds the introduction of S.W.I.F.T., an acronym for Society for Worldwide Inter-bank Financial Transactions, has made remittances faster and secure. The system works like Internet communication processes. All the banks in the world are registered for the service, which have the facility of online computers. Headquarter of S.W.I.F.T. is in Belgium. The message sent through this way does not require any code tests to confirm its authenticity. The sending process is more secure where two officers make the transmission of the message, one types the content with his code word and the other executes it with his password. There are different types of codes that are used for the messages interchanged on the basis of the type of the transaction.Using the NBP network of branches, you can safely and speedily transfer money for our business and personal needs.
Swift is a soft wear .it is use for following purposes Financial transactions Non-financial transactions Linking Import export
Different codes are used in swift for different purposes
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National bank of Pakistan Latter of credit code is 700 Remittance code is 100 Bank to bank transaction code is 202.etc.
Procedure When any massage comes through swift 1st its received by head office then head office authority send that massages to different banks via mail to main branches of relative banks.
Western Union Money Transfer:

Western union money transfer is a fastest way to receive money worldwide. It is working in almost 200 countries. Different Govt and private organization are dealing with WUMT Govt organization e.g banks Private organizations e.g Zarco, Money changer, Dollar East, Master Currency Main office of WUMT is situated in Dubai, it is a procedure of counter payment Time required in only one hour and deduction on it is $50. Procedure of payment WUMT just needed identification, no need of a/c, its an counter payment 29
National bank of Pakistan Procedure of payment is that the customer came to specific person who is dealing with WUMT tell him the 1) MTC NO 2) Receiver name First name Middle name Last name 3) Sender name First name Middle name Last name 4) Telephone no 5) Photo copy of ID card 6) Expected amount (10% margin is acceptable) 7) Test question After if the that related officer feed MTC # (mail transfer control) , it is unique number not less then 10 digits, receiver name , his/her 1st name and last name, and sender name to check whether amount is come or not . When all these things are correct then give a form to the receiver, he/she filled the specific form, after that office done his
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National bank of Pakistan signature and give one copy to customer, other copy send to the cash counter for payment and the last copy for put in file for the purpose of record. Payment is made only in Pak rupees. WUMT form It form is divided into three sections 1st for receiver information, his name, address and telephone number 2nd section for sender, his name, address telephone number 3rd section is for expected amount, MTC number, test question, signature There are three copies of form 1st for counter payment, 2nd for customer and 3rd for branch record.
CREDIT AND ADVACNECS DEPARTMENT

Credit
It may be defined as The sale of goods and services and money claims in the present in exchange for a promise to pay in future. The most important activity of the bank is the granting of credit to the customers. NBP provides short term long terms financing for domestic and international trade. The policies made by central office of the cash can be amended on the basis of the rules and regulation, economic risk of each country board of directors and committee of the NBP made this type of decisions and informed about these decisions to the branch managers.
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National bank of Pakistan Manager can grant the credit limit to each customer with in the declared limits approved by the controlling offices i.e., co, GHQ, circle and zonal. Banks grant credit to the customer for a certain period of time. The banks provided credit to the customers so that they can purchase ahead of their liability. By giving these facility to the customers large scale production of commodity can be achieved and economic growth rate can be increased. The power to sanctioned loans had been delegated for controlling different offices, according to amount of loan. This department is also called as risk management group.
The following elements are used for credit selection. Character

It is based on the borrower willingness to repay the obligation. The loan officer sees the family background mode of living, business nature, habits, moral reputation and etc. before giving the loan.
Capacity
The ability of borrower to repay the loan when due. The borrower ability to repay the loan is assessed by the office so that he will be able to repay the loan in future.
Capital
The officer assesses the capital of the borrower. If assets held by the borrower are liquid, they can be easily convertible in cash; but if non liquid is used then it is risky to given loan.
Collateral
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National bank of Pakistan It is collateral security. It may consists of stocks bonds , bill of exchange, bills of lading, etc. the bank has protect him self from any discrepancy in the future. They increase the ability of the borrower to obtain the funds from the bank.
Condition
The economic condition of the borrower is determined. The economic conditions of the borrower in and out side the country effects the repayment of loan. If condition is favorable then loan is given otherwise vice versa.
Functions
Credit department has performed following functions.
Advances
Advances provided by the bank are of the following two types. Funded Non-funded
Funded
In fund based bank contributes a large amount of the fund based on clarified as follows
TYPES OF ADVANCES
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National bank of Pakistan Demand Finance One time disbursement of the whole amount sanctioned, as the limit for the credit allows. Any person, individual, group, company, firm and all others can achieve this mode of financing. The mark-up or interest is calculated on the total amount disbursed and requires to be paid before the date of final adjustment. Regarding the amount, limit and period, it depends on the nature of the case in review. Cash Finance In this mode of financing the borrower is allowed to make withdrawals of funds as he requires, but the total amount outstanding cannot exceed the limit sanctioned. The mark-up/interest is calculated on the amount outstanding on his account. The calculation of mark-up/interest is based on the number of days a specific amount is withdrawn. This finance if normally borrowed by small traders or individuals for their petty matters involving cash transactions up to rupees three hundred thousand maximum. Running Finance To assist a large-scale business operator to carry on his day to day requirements of liquid funds, this account is opened is made operation in his favor. Running finance is provided where the amount goes beyond rupees three hundred thousand. The markup/interest is calculated the same way as in case of cash finance. Security against running finance is that which is easily convertible in to cash and bank kept 25% margins with it.
Non-Fund
Bank provide non fund advance in the following form: Guarantee
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National bank of Pakistan Imports
Guarantee
A guarantee is a promise between one person to another person or party to answerable for the debt of a third party. Bank issues guarantee after 100%cash collaterals are provided by the person i.e.50% in the form of the property.
Imports
Bank provides non-funded credit facility to the following basis.

Sight LC Usance or DA LC.
Sight LC In this type of L.C when payment is made documents are released. A cash margin of 30% is relational by the bank. Usance or DA L.C The bank retains the payment after a period of days, which is given in the L.C a margin of types of loans 30%.
TYPES OF LOANS
The credit department of NBP has providing the following types of loans 1. Short term loans 2. Long term loans 3. Working capital loan 35
National bank of Pakistan 4. Syndicate (project) loan 5. Monitoring
Documentation in short term financing

Demand promissory note Mark up agreement Letter of guarantee in personal capacity Letter of authority Letter of pledge Memorandum of deposit of title deal
Status reports
A credit report is an assessment of borrowers character and capacity from a bankers point of view. Credit reports on borrowers called Status Reports, financial reports, bankers opinion or confidential reports. All these terms carry more or less the same meanings. The study of a borrower is a study of his character, capacity and capital, and collateral often known as the 4Cs to consider his credit worthiness and eligibility for the bank advance. The purpose of compilation of credit report of the borrower is to assess their net worth. It must contain information about borrowers means, character, integrity, assets, liabilities, business and experience. Besides, borrowers own investment, details of properties, must be obtained. The borrower may be asked to give written clarification of their existing liabilities. In the case of Limited Companies, their borrowing powers to be verified from their Memorandum & Articles of Association. Their certification of incorporation to be
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National bank of Pakistan examined, exiting borrowings, prior charge on their fixed assets, paid-up capital, reserves, profit and loss position, detailed particulars of their directors and complete analysis of balance sheet must be incorporated in the credit report. Independent inquiries about the borrowers and opinions form their previous bankers must be made. As such a comprehensive credit report is compiled which serves as a constant guide to the banker about his borrower. This report is prepared by the bank of the intending borrower with a view to considering his Credit Worthiness and Eligibility for the Bank Finance. Besides other things it contains the net worth of the borrower.
Net worth of borrower

Individuals Net of the individuals worth is the total investment or equity of the sponsors/borrowers in the company through which they are asking for credit and in the other sister concerns. Firms Total investment in Business + Properties liabilities Paid-up-capital + Reserves + Profits (Losses)
The Investigation process

1. Knowing the market place 2. Risks inherent in lending Management risk Market risk Earnings fluctuations risk
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National bank of Pakistan Default risk Marketability risk
Criteria checked for loans

Major areas requiring focused attention of the analyst are:
1.Financial Condition
Which is reflected in the trends of: Net sales Gross sales Operating profits Net profits (at least for the last 3 years) 2.Structural Liquidity It refers to the extent of liquidity usually available in the business, or which is the routine requirement of the borrower based on the nature of his periodically maturing liabilities. 3.Industry/Business Of Operation The banker has to check that in which industry or segment of market the loan is being given this is important because if there were a recession in that industry for decades then it would not be feasible to invest in such a business.
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National bank of Pakistan Certain traditionally stable industries are in Pakistan in which NBP feels satisfied while investing. For example in they feel satisfied by investing in ICI. 4.Debt Equity Management Excessive reliance on debt, rather than plough back of profits or injection of fresh equity, to maintain a healthy combination of debt and equity is thought with danger because ultimately the debt servicing requirements place a heavy burden on its liquidity thereby its survival. 5.Asesst Management Asset management involves the analysis of how productively the assets of the company are being used. Sales and profitability can be measured with this. 6.Borrowers Credit Worthiness In order to get a complete picture of the borrowers credit worthiness, inquiries will have to be made about: His business. Trade experience. Assets and liabilities. His account with bank or with other banks. His financial statements and income tax returns. An interview with him will be necessary to elucidate or supplement the information that may have been collected.
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National bank of Pakistan 7.Management Before giving loan NBP also checks whether the management have the depth, skill and experience. If the management is aggressive and adoptive to the new changes then it is most likely that the banker may receive the loan back on due date 8.Securities In case the borrower is not in a position to meet his obligations, there must be something else to call back upon. So bankers take securities to have a resource to them to guard liquidity, that is, security is an insurance against calamities. In case of cash finance the customer have to give the same amount of money to the NBP as a security for which it takes loan.
Condition for security

The security must be liquid or radically convertible to cash with more then adequate margin of safety fully under the banks control, having high value, which can with stand volatile market condition. Secured by acceptable immovable tangible collateral with necessary margin and fair degree of marketability under the forced sale situation (should have buyer). The types of securities may vary from a piece of land or building to commercial papers or ornaments. Further, security has its own importance, not only as constituting the ultimate source of recovery in the event of failure of the borrower or his enterprise, but as providing a measure to the borrowers own stake in the enterprise and also placing the limitation on his future borrowings.
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National bank of Pakistan However, though security serves as a cushion to fall bank upon in case of need, but its adequacy alone should not form the sole consideration for judging the suitability of the loan. So the choice of security is not made in isolation, but keeping into consideration the customer and security offered together.
Guarantees
A grantee is defined as An undertaking by a person to responsible for the debt of another person. National bank of Pakistan issues guarantees to government agencies like atomic energy, high way department, and customs arthritis. Sui northern gas and others. It also issues guarantee to multinational organization like Siba gigay, Sandoz, PBS, and etc. for the purchase of pesticide or insecticide from any fertilizer company. Bank accepts only long other bank guarantee but in some cases personnel guarantee is also accepted. The guarantee issued is treated as contingent liability. According to local rules and regulation the policy for issuance of guarantee can be changed. The expiry of the guarantee can be set by both bank and guarantor. The minimum period is one year and the guarantee can be reissue for extra period with paying charges. The two officers whose signatures appears in the specimen signature book of bank and also counter sign by the zonal chief must sign each guarantee. Both officers must also sign any amendment. Am amendment in the guarantee can be made after giving written application to issuing branch. If the value of the guarantee is reduced by the amendment the liability amount will be reduced and if will value is increased additional liability entries will be passed.
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National bank of Pakistan The bank provides following types of guarantees to the customers. Bid bond Mobilization bond Performance bond
Bid bond
The facility provided at the time of bed opening is called bid bond.
Mobilization bond
When the bid is accepted, the bank provides this type of facility to the customer.
Performance bond
When the project is completed, the contractor about the performance of the project provides a performance certificate for one year. During one year, if there is any mishap in the project the repair otherwise authorities claim the performance charges from the bank. Bank charges commission on issuance of guarantee as per their schedule of charges. If the party did not pay the amount in the stipulated time period, bank puts this case for recovery. If some amount is recovering then it is good otherwise bank deduct the amount from its profit and starts the legal procedure against the property pledged by the customer to bank. Bank assesses the demand of the customer and then writes letters to other banks to provide them confidential report of credibility about the customer this is one provided in the shape of CIB (credit information bureau) report provided by the SBP. In this report the credits of the customers with the bank operating in Pakistan are given. After checking this report the bank issues the guarantee to the customer. In case of death of his heir as
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National bank of Pakistan given in the will be responsible for that guarantee.
Security
It is an interest or right in the property gives to the creditor to convert it in cash in case of debtor fails to meet the principal and interest. The bank provides the following securities to the customers.
Mortgage
Transfer of interest in movable property for securing the payment of money lend on existing or future liability. The bank provides the following two types of mortgage. Registered mortgage Equitable mortgage
Registered mortgage Registered mortgage is provided on the residential property, commercial industrial property, raw plot, etc. A party can get registered mortgage if they provide the following documents to the bank. Title deed Non encumbrance (NEC) pit form (in case a constructed hose) Valuation certificate
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National bank of Pakistan Affidavit Mortgage deed Personnel guarantee of mortgagor Power of attorney Legal opinion. Banks examine all these reports, and if they are correct then issue the mortgage to the party. The bank examines these reports to see that the property they want to mortgage is registered and is not already pledged. The bank also calculates the value of the property and the legal opinion of the customer in case of non-payment.
Equitable mortgage Equitable mortgage is provided on the residential property, commercial industrial property, raw plot, etc.
Title deed Non encumbrance certificate (nec) Pti form (in case a constructed house) Valuation certificate Affidavit Memorandum of deposit of title deed Personal guarantee of mortgagor Power of attorney Legal opinion
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National bank of Pakistan In this mortgage a charge form bound the customer for any legal action in case of non-payment. In this type of mortgage hypothecation of stocks involves.
Pledge
A pledge is an a class security given to customers for stocks ware house, customs, and etc. it is defined as actual delivery of movable property to lender as security for a loan. When the customer makes the payment of the loan in full he can back his mortgage property from the bank i.e. when full payment is made the stock is released.
Procedure of sanction of loan

In Credit department 1st step is to preparation of credit line proposal for the preparation of credit report. For this following information required by the bank from the party Purpose of loan Details of all firms or companies associated with business Name of proprietor/ partner/directors Accurate and up-to-date balance sheet and profit and loss statement of last two years of business Market report of the borrower repute Report from the bank if borrower has maintain his account with the bank CIB report Full details of existing limit and actual liability against the business Particular about the foreign exchange deposits and bills given by the borrower to the bank
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National bank of Pakistan Memorandum and article of association in case of limited company Audited report of balance sheet and income statement of last two years After checking all the securities, customer verification the manager done the following tasks
1. Preparation of credit proposal 2. Prepare the about the customer 3. Sanction of loan
1) Preparation of credit proposal

After formal application for the credit the party submits approval. For this purpose borrower can use coarse paper or the form provided by the bank. Along with the application borrower also submits the documents required by the bank. The bank manager evaluates the documents provided by the borrower. He gets the partys credibility report confidentially from the other commercial banks. He checks the balance sheet and income against the assets in the company. He also measures the percentage of owners equity. Then he doses the ratios analysis of the company. If the party is involved in the export and import business then the data of the last three years of this business is considered. The manager of the bank also examine the project violability, the securities provided by the debtor to the bank are evaluated by measuring their worth. In the case of pledge is assessed by the manager while in case of new party manger checks from where the party is financing for their business
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2) Prepare the Proposal about the customer
After preparing the proposal manger prepare the report about the customer. Report contains the following information Name of the company Date of establishment Address Nature of business Branch office Worth of business Date Bankers opinion Head cashier opinion Branch manger opinion
In case of partnership business following information are included in the report Partner, their share in capital, profit and loss Deed of partnership Partnership letter Turn over Net profit Personal property of partners
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National bank of Pakistan Bank balance of partners Advance payment of suppliers Particular of machinery installed in the factory through financing Incase of corporation/limited companies the following information are included Incorporation and commencement of company Sales offices Capital information Directors and their contribution to capital Balance sheet with explanation and evaluation Net worth of the company
3) Sanction of loan
If the limit of the loan lies with in the power of manger then he sanction the loan otherwise manger with the covering letter along with all necessary documents sends it to the concerned sanctioning authority.
GENERAL BANKING
General banking area is also call the operations group. It consist on following section 48
ACCOUNTS SECTION REMITTANCES CLEARING SYSTEM GOVERNMENT RECEIPTS CONSUMER AND RETAIL BANKING LOCKERS
Accounts section
Accounts Department of the bank can be considered the most important department. This department is basically concerned with processes and activities of recovering, sorting, summarizing and reporting data resulting from the whole day transactions of all the departments. Actually the process of this activity starts from the preparation of all the required vouchers by different related departments. When these vouchers are prepared, these are posted into respective computer terminals by the relevant departments. Before merging, a batch list is printed out by Computer Department and duly checked by the respective departments. After this, merging stage comes, after which a proof list is printed out. This is the stage, where Accounts Department starts performing its function. Proof list is checked by the Accounts Department.
This section performs the following functions:
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National bank of Pakistan Opening of Accounts Issuance of checque books Closing of accounts Payment of Cheques
Types of accounts
Following types of accounts are open in NBP Saving account Current or demand account Fixed account
Saving account (PLS)

This type of account is designed to encourage the saving habit of the customer and lead to a long-term banking or investment relationship. Bank saving accounts are in the nature of deposits accounts and are not normally available for drawings. Rates of interest are typically ahead, by a small margin. Saving accounts with the banking sector represent a very small proportion of total deposits. Customer can make any withdrawals from type of account. The cash reserve ratio is typically low them the current account because the withdrawals against this account is very low. The minimum balance for this account is Rs.100 and interest rate is
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Current or demand account

These are those deposits, which can be drawn by the depositor at my time by presenting a cheque to the bank. People deposit their money in this account they gave a ready command on their account in developed and under developed countries of the world, a very significant part of money is kept under current or demand account. On this type of account of interest transfer of cash or by cheque takes place at sight. The cash reserve ratio for this account is very high. The operating cost for the handling of this type of account is very high because withdrawals are very regular.
Fixed account
Fixed accounts are those, which are deposited for a fixed period of time and are repayable after the expiry of stipulated time to the customers. Those people who have surplus funds and want to have save investments deposit the amount in the fixed account. The rate of interest given to depositor varies with the length of deposit, i.e. it is higher for longer period and lowers for shorter period. The rates on this type of deposits are higher than the saving bank accounts. The cash reserves against this deposit are very low because there is no fear of withdrawal of a month before the stipulated of time. No paying books or passes book or cheque book is issued to the customers against this deposit to the depositors.
The authorities of national bank of Pakistan have the right to revise all these rates of interest with out any notice to customers generally rates of interest are revised after six months. The amount deposited for 7 and 30 days short term notice and accumulated for the period exceeding the limit and the customers can get the interest of the extra days of
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National bank of Pakistan deposit but in the case of months and years the customer did not get any additional interest for the exceeding period of deposit.
Procedure for Opening an Account

First of all, the customer gets an application from the bank, which requires all information necessary for opening account and also the documents required. An account can be opened as:
1) An individual account 2) Joint account 3) Proprietorship account 4) Limited company account 5) Partnership 6) Club, society, association and trust
Information Required by the Bank

Name Address Telephone No. Currency of Account Nature of Business Country of Residency Special instructions regarding the account Signatures 52
Documentation In case of limited company accounts:

Photocopy of National Identity Card of each director Application form Copy of companys memorandum and articles of association List of directors Copy of board resolution Certificate of incorporation Their signature cards Certificate to commence business
Documentation In case of Partnership Account

Application form A copy of partnership deed Signature cards of partners Registration certificate copy A copy of National Identity Card of each partner
Documentation In case of Club, Society, Association or Trust

Application form Copy of rules Certified copy of resolution Signature cards When the concerned officer is satisfied then he opens the account and gives an account number that will be used in all communications with the bank in regard to the account and when making deposits and withdrawals.
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National bank of Pakistan Bank has the right not to open an account without assigning any reason or to close the account if it is not operated in a satisfactory manner by the instructions of the head office.
Issuance of Cheque Book

After opening the account, a cheque book is given to the customer to sign upon which the number of cheque book issued and the name of the customer is written. Bank issues a cheque book against requisition. A cheque book may be of 20 (PLS), 25, 50 or 100 leaves (current A/C). Rs. 4.50 per leaf as excise duty is charged to the customer. A cheque book register is maintained by the office. In this register, the cheque book inventory, cheque books issue are recorded.
Loose Cheques
If any customer forgets or leaves his cheque book at his home, which is far away from the bank or whatever the case may be, the customer applies with the bank for the issuance of loose cheque by the bank as he does not has his cheque book with him and the money is urgently required, the this cheque is called the loose cheque. Bank issues a loose cheque for Rs. 50 as charges for the issuance of the loose cheque plus Rs. 4.50 as excise duty.
Payment of Cheques
It is banks primary function to repay the money required for its customers account usually by honoring his cheques. It is a contractual obligation of a banker to honor its customers cheque if the following essential are fulfilled : Cheque should be in a proper form Cheque should not be mutilated Cheque should be drawn in this particular branch 54
National bank of Pakistan Cheque should not be damaged No unauthorized material alterations Funds must be sufficiently available Cheque should not be post date or stale Cheque should be presenting during the banking hours
Procedure for Closing an Account

The customer can close the account. Customer is required to submit an application for closing the account. Then the account is closed out and his balance is paid to him after deducting the closing charges, i.e., Rs. 200 and the application is filed in Account Closing File. Remaining leaves of cheques will also be collected from the customer.
The activities of Accounts Department can further be divided as:
Routing of expenses vouchers Preparation of daily activity reports Preparation of weekly and monthly statements Preparation of statements for tax purpose.
Routing of Expenses
Vouchers of all expenses and material purchases are routed out through this department. As far as the expenses are concerned, they include the heads of salaries paid to confirmed employees of bank, wages paid to employees that are on contractual basis,
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National bank of Pakistan rent of the building, lease installment and insurance premium paid to insurance company for the insurance of vehicles and cash in safe and counter. Expenses also include the utility bill, which consists of courier, electricity, water and gas bills, medical expenses, which are reimbursed.
Preparation of Daily Activity Reports

As far as the daily activity reports of this department are concerned, these include the following heads: Voucher collecting of Loan transactions General ledger transactions Foreign currency related transactions Fixed deposit related transactions The checking is on daily basis.
Preparation of Daily, Weekly Monthly and Annual Statements Daily Statements

These statements are sent daily to Main Office Karachi. These are:
Daily Affair Statement, which is same as Balance Sheet Statement of Income and Expenditure, which includes the details of income generated and expenses incurred by the bank.
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National bank of Pakistan Weekly Statements These statements are generated on weekly basis for the purpose of sending it to Head Office. These also include:
Statement of affair Deposit and advances position of the bank
Monthly Statements These statements are prepared on monthly basis and also sent to Head Office (Qatar). These include:
Provisional statement of income and expenses. This statement adjusted for accruals and pre-payments. Monthly Balance Sheet and Income Statement Comparative Statement
Statements for Tax Purpose

The department also prepares two statements for the purpose of paying tax on monthly and annual basis. These statements are generated for the purpose of submitting to Central Board of Revenue. These are:
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National bank of Pakistan Statement of deduction of income chargeable under the head salary under Section 53 (Tax deducted at source) Withholding Tax from the payments made to vendors, suppliers and other parties providing various services. The rate of withholding tax is as follows: Suppliers For other parties 2.5% 5%
Remittances Section
Remittances can be made through: Instrumental transfer Electronic transfer
Instrumental Transfer
Instrumental transfers are following
Demand Draft
It is an instrument, which is payable on demand and it is only presentable in the city/country. When any draft, i.e., an order to pay money, drawn by an office of bank upon another office of the same bank for a sum of money payable to order on demand, purports to be issued by or on behalf of the payee, the bank is discharged by the payment in due course. When a person requires a draft, he should be asked to complete the prescribed application form in which he should state the amount of the draft, the name of the payee, and the place of payment. The person to those persons, who have been duly authorized to act on his behalf, should sign this application form. An advice is prepared and two copies
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National bank of Pakistan of this advice are sent to the Head Office. The bank charges 3% withholding tax and commission according to the rate list (minimum is Rs. 200).
Pay Order
It is an instrument, which is payable in demand and only presentable in city. Pay order is also called the bankers cheque drawn upon the issuing bank itself. It is not negotiable and therefore, bankers tend to cross the instrument Payees account only to avoid the possibility of dealing with instruments with forged endorsement. The pay order is issued favoring individuals, commercial concerns, government departments. On the presentation of pay order, the bank is liable to pay the amount to the customer. Bank charges excise duty of Rs. 4 and service charges of Rs. 100.
Pay Slip
It is an instrument, which is issued by bank and used for expenditure purposes, i.e., electricity bills, maintenance bills, security bills, fixture and fitting, etc.
Call Deposit
Call deposit are not actual deposits of bank. It is in fact the liability of the bank. Call deposit are ofently prepaid by the bank for contractors PROCEDRE :** Following steps are involved 1) Depositor fill the credit vouchers for call deposit. He writes the following information Name of company
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National bank of Pakistan Amount Date 2) He deposits the cash along with filled voucher in the cash department Encashment of CD For the encashment of call deposit needed 5 rupee stamp two signature of customer on the back side of CD token issued accountant make entry in the CD register show that it has returned
Electronic Transfer
Electronic transfer is of following types
Telegraphic Transfer
It is the message, which is sent from one branch to another on the order of payer to payee through wire. It is one of the quickest means to transfer fund through the use of telex/fax/internet or cable. Payment to the beneficiary is affected directly by the drawee office upon identification or through credit into beneficiarys bank account. As such remitting office is not required to issue any instrument payment to the remitter for delivery to the beneficiary. Issuance and Payment of Telegraphic Transfer Outgoing Application form is filled by the client in which the name and account number of the beneficiary, which is to be credited and name of customer is required. For telegraphic transfer, the payment can be made in case or by cheque or by debiting the customers account if he is the account holder. The amount of Telegraphic Transfer should be
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National bank of Pakistan written on the form. The amount is transferred to beneficiarys account in the other bank. An advice is given to the customer but application is filled in the record of the bank. If the beneficiary is not the account holder of DBL, bank credits a Telegraphic Transfer payable account and when payment is made to the beneficiary, TT payable account is debited. Issuance and Payment of Telegraphic Transfer Incoming When a TT is received then an entry is passed in TT incoming register after verifying the test. When a person comes and wants to encash his TT, bank checks the statements of that person. If the bank finds any account credited to the persons account against TT, bank prepares a voucher for this payment against that TT. The customer then presents that certificate to the cash counter and collects money.
Mail Transfer
It is the same like TT, but in this type, the message is sent through mail rather than telex. The procedure is same as TT, but the advice is sent through mail rather than wired.
Travelers cheques (TC)

These are also called TC. Travelers cheques first came into use century ago. Form of travel currency giving to the holder .the security of a letter of credit and convenience of a local currency. In practice, they are acceptable in payments of accounts on board ship, at hotels and in stories. They are in form of a draft. They should be so signed immediately on issue and place is provided on the cheque for the signature of the beneficiary on its
Lockers service
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National bank of Pakistan National bank of Pakistan also provides lockers facility in the country. The lockers issued only to the depositors. No lockers are issued to any unknown person. The dual control system is used for lockers. The officer has master key to apply on the locker but he cannot open the locker of any person. The locker holder provides the bank has specimen signature. Whenever the locker holders come to open the locker, his signatures are verified by the officer and then will be able to open his locker. If the key of the locker is lost company providing these lockers breaks the locker and new lock is fitted in its locker and lock is destroyed in the presence of the locker holder and bank charges RS 1200 for that. In case the locker holder dies, the court opens his locker in the presence of his heir as mentioned in his will or and his belongings are given to them and the locker is closed.
Billing And Government Receipt/Payment

This department is performing following functions
Collection of utility bills Collection of dues of education institution Payment of salaries Payment of zakat Payment of pension
Clearing Department
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National bank of Pakistan The major function of Clearing Department is to receive the cheques, which are drawn on some other bank. The customer can get the money in his account at NBP, from the cheques drawn on another bank. The bank accepts these cheques and collects the amount from that bank on which cheque is drawn through the Clearing House. Bank charges some commission for this function.
Procedure for Clearing the Cheques

Pay-in Slip
The customer fills pay-in slip. This slip is just like deposit slip. The cheque number, date, amount and account number must be written on this slip.
Stamping and Scrutinizing

The officer on receipt of cheques and pay-in slip will stamp the pay-in slip with cheque received and give a portion of slip to customer and the remaining portion is attached with the original cheque. The original cheque will be marked with two stamps. National bank of Pakistan Clearing Stamp At the end of day, all cheques are counted and then scrutinized in bank-wise and sent to the Clearing House.
Computer Section
Through this department bank has make its way to enter in twenty first century. This department is playing a very important role in making the banking 63
National bank of Pakistan procedures faster and helping the bank for providing new services to its customers. This division provided the bank with online branches, systems to make the whole procedure foolproof.
Types of Branches
There are three types of Branches in all over Pakistan of NBP 1. Online branches: The branches, which are directly, link with central computer AS-400, through wide area networking through fiber optics. These branches have dumb terminal directly linked with central computer. Yet only forty-four branches all over Pakistan are online. Of these forty-four, seventeen are located in Karachi, seven in Lahore, two in Islamabad and two in Multan and two each in other regional head offices.
2. Batch Branches:
The branches where all transactions are carried out with the computer base system but these branches are not connected to the central computer with wide area net working. Batch branches are using three type of system, Branch Back Office (BBO) based on FoxPro, Branch Automated System based (BAS) on UNIX, Branch Integrated System (BIS) based on FoxPro in Karachi mostly branches are facing this problem. BAS was establish in the beginning while BBO is currently implemented now efforts are under way to convert all branches into Electronic Banking System (EBS) which is used by online branches as this system does not require a person to remain sitting till the branch closed its daily operation but the system automatically close it self when the branch timing is over. The database in head office is also based on this system. 3. Manual Branches:
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The branches where all transactions are carried out manually and records are maintained on registers usually stored in big wardrobes. All branches in Pakistan report to there regional head office regarding there daily transaction. In the RHO through On Line, terminal data goes to head office central computer; Except for branches those are On Line as they transfer there daily data directly through there own terminal. As day-to-day, activities of all branches are recorded in a central computer.
Evening Data Receiving Center

Data form batch branches reach the main branch in floppy diskettes while form manual branches it is in form of hard copy. Data comprises of transactions in profit loss account, current account, advances etc termed as Daily Transaction Report. Clerk in charge register all diskettes and manual in registers called job booking register one for each of two type of data. These floppies and manual are bring in by riders. There are fourteen riders in total who bring information form all branches located in Karachi region.
Data Entry Department

The next task after receiving the data is to enter that data in to a computer. The floppy disk is directly inserted in the computer. The program in used is based on COBOL language. This program is designed in away that it demand Hash Value value before opening the floppy for further action this value serve the purpose of password or pin code send by the branch on entering that value the data enter in to the computer. This computer is attached with the terminal of central computer. The operator of that terminal takes the data from the computer and converted it in to a text file through that terminal the data finally goes to the central computer. 65
Defects and Error Handling

Errors of different origin occur when the data goes to central computer. Sometime retrieving data from the system (BAS, BBO, and BIS), other than used in HO (EBS) also caused errors. Other errors include Unmatched (This error occurs when document no matched with the previous one exists), no master (when opening of new account is not mentioned), Date in Valid, duplicate cheques (this error occur when the last objection is not removed). these and other such error are see by the person in charge. In the end of day print out of the data enter in central computer is taken. Any Incomplete information for any branch and any information require by that particular branch is sent to that branch. More over material is used to make a WST which is sent to State Bank of Pakistan.
Consumer and retail banking section

Consumer and retail banking department is offering two facilities to their customers 1) NBP Advance Salary 2) NBP Ghar Ghar Television
NBP Advance salary

NBP advance salary facility allows you to draw three months salary in one go. NBP advance salary offers you Take up to three months advance salary take home Fastest processing and immediate disbursement Easiest facility for 1 to 36 months Minimum documentation
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Eligibility
This facility will be available to permanent employee of Federal and provincial Govt. Semi Govt, autonomous, semi autonomous, local bodies and Govt corporations Other corporations and organizations approved by NBP Those who qualify for thius scheme should have: Three years of service age remaining Salary account at NBP
Limit of Finance
Three net take home salary Customer must have account with national bank which show last three months salary in his/her account
Calculation of limit
Average of three months and minimum salary which ever is less taken it as base and multiply it by three
Maximum duration of loan

Three years is max duration.
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Requirements
Requirements are Three months salary certificate NIC photocopy Auto roll over form Application form IB-12 Three undated cheques Annexure C Annexure D Account opening form
Procedure
After filling the application customer signed it with his salary-disbursing officer then under taking is officer approving it. Open the account that is calls separate loan account, which is once Debit and many time credit.
NBP Ghar Ghar Television

NBP offering the customer to get the television on lease base
Eligibility
Four categories are there 1) Lean of account 2) Lean of guarantor account 3) National saving certificates 4) Guarantor of NBP
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lean of account
Here the amount of customer account is pledge and customer cant DR it until the expiry of limit
Lean of guarantor account

The person who is taken the guarantee of that customer his account is marked as lean and pledges it until the expiry of installments
National saving certificates

Three types of certificates a) Defense saving certificates b) Special saving certificaties c) Regular saving certificates Every certificate having their face value. The 75% of that valve is marked as lean.
Guarantor of NBP
The employee of national bank can give the guarantee of that customer.The procedure is same his or her account is marked as lean
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Duration of scheme
Two types of duration For one year For two year
Product supply
Product is supply by L.G electronic at the customer address
Products
Different products are offered by L.G such as Television Monitors Air conditioner DVD VCD
Documents
Documents required by the banks are a) Application form b) IB-12 c) NIC photocopy d) Delivery order 70
National bank of Pakistan e) Agreement f) Letter of hypothecation g) Adamantly bound h) Letter of acceptation and satisfaction FOR NBP employees: a) Authorization certificate b) Guarantee c) Salary certificate This scheme is only for residential of Multan.
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WORK DONE BY ME
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National bank of Pakistan The senior staff at the branch was very cooperative and they gave me full opportunities to enhance my knowledge with practical approach. During my si x week internship I performed the different tasks in the following departments. Government receipt and payments Western union Gold advances Pension Advance salary Foreign currency Lockers Credit and computer section Account opening
Government receipt and payments

There are different types of vouchers being used by the NBP. These vouchers are as follow, 1. Provincial vouchers P-1 TVT (Traffic violation tax) Excise Provincial stamp
2. Central vouchers
Central CVT ( Central stamp Income tax 73
National bank of Pakistan Sales tax
3. District vouchers
Procedure for receipt and payment

In case of receipt, cashier receives the payment and stamps the all three copies of appropriate voucher and pass on these vouchers to the next seat, in this stage these vouchers are entered into the books of accounts maintained by the bank. From these three copies, one is given back to the customer, one is sent to the Gvts account office and one remains in the NBPs record. At the end of the day a summary of all transactions under this head is prepared and finally the entries are made into the GVT receipt and payment register, which is then signed by the incharge. In case of payment, the above mentioned same procedure is adopted.
Western union
The NBP main branch muzaffar garh, is handling western union from all over the world in all currencies.
Procedure
When a person comes to collect some pament send by any person from abroad, through western union. The bank will ask him for trhe code send by that foreigner, which is of ten digits known as MTCN Code. The bank also demands all the information about the amount and that foreigner. After these verifications, the bank checks receivers CNIC numbers and also takes one copy of his CNIC for record. After this the bank makes the payment.
Gold advances
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National bank of Pakistan The bank is advancing loans against Gold. For this purpose procedure adopted is as follows, When a customer comes to get this facility bank usually demands the following documents, CNIC and nadra verification ECBI report IB-12 IB-26 IB-6A IB-29 ICIL report The bank has their own Gold smith who verifies the originality of the gold and also weights the gold. Now a days the bank is granting the amount of Rs.10,000 against ten grams of gold. And now a days interest rate charged by the bank is 15.5% annually and the recovery by the bank is made in lumsum.
Pension
The Gvts accounts office sends to the bank PPO (pension paper order). The bank records these orders in the ledger book and allots ledger numbers to them. By using these ledger numbers bank makes the payments monthly. The NBP Muzaffar garh is maintaining the following types of pensions and funds, 1. Gvt Pension (P1) 2. Pakistan railway Pension 3. EOBI Benefits 4. Benevolent Fund 75
Advance Salary
The NBP is giving the facility to the Gvt employees to withdraw their salaries in advance. The necessary documents required for this purpose are as follows, 1) Copy of CNIC and nadra verification 2) Employer undertaking 3) Employees under taking 4) Salary slip 5) Salary certificate 6) Confidential opinions 7) ECIB report 8) ICIL report 9) Declaration 10) Two references (one from higher grade and one from the same grade) 11) Three blank checks
Foreign Currency
The bank is also offering foreign currency accounts in the following foreign currencies. US dollar Pound EURO YEN
Lockers
NBP is offering four types of lockers
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National bank of Pakistan Category Small lockers Medium lockers Large lockers Extra large lockers Rent Rs.2400/year Rs. 6000/year Rs. 12000/year Rs. 16000/year Key deposit Rs. 4000 Rs. 5000 Rs. 6000 Rs. 8000
The person who wants to take a locker in the bank should have his account in the same branch. These lockers are in the lien of the bank.
Credit and Computer section In case of credit, there are three main types of credit , 1) Corporate 2) SME (small and medium enterprises) Cash finance (against pledge) Running finance (against hypothecation) Demand finance (against collateral) Small finance 3) Retail Gold advance salary Advance salary Currently the NBP main branch muzaffar garh is advancing loans under two types SME and Retail and the corporate financing is shifted to the main branch Multan. SME financing is up to one hundred million and more than one million financing is in corporate financing. Cash financing and running financing are up to one year and these are mostly seasonal finance. Demand finances are granted for five years and more than five years. for all types of financing the necessary documents are as follows, 4) IB-12 (promissory note) 5) IB_6 (agreement for finance)
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National bank of Pakistan 6) IB-24 (memorandum of deposit of tytkle deeds) 7) IB-25 (letter of hypothecation) 8) IB-26 (letter of pledge) 9) IB-29 (personal gurantee) 10) Agreement of continuity of liability 11) CNICverification 12) ECIB report 13) ICI report 14) Genuineness certificate
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STRENGTHS WEAKNESSES OPPORTUNITIES THREATS (SWOT) ANALYSIS
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STRENGTHS
NBP one of the largest financial institutions of Pakistan with eight million of customer base NBP holds 24.6% share of time and demand deposits in the country. Local currency deposits comprise 67% of bank's total deposits while foreign currency deposits account for the rest. NBP has an extensive domestic branch network of 1200 (according to the latest data) branches located all over Pakistan. The Bank also has a presence in 19 international locations including the USA, United Kingdom, Europe and the Far East. NBP's total assets stood at Pak Rs.370 billion on December 2000. This included total earning assets of about Pak Rs.268 billion with gross loan portfolio of Pak Rs.140 billion. The bank also has an investment portfolio of Pak Rs.91 billion, which comprises treasury securities, corporate bonds, shares and other securities. NBP cash provision as percentage of non performing loans equal to 60% this coverage factor for the non performing loans is the highest amongst the nationalized commercial bank. NBP is working as right arm government of Pakistan as it is responsible for all claims of government for recovery as well as payment. All depositor of NBP are in relief that their money security is guaranteed by government of Pakistan. It acts as an agent of the Central Bank wherever the State Bank does not have its own Branch.
WEAKNESSES
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National bank of Pakistan NBP staff especially at lower considers their work as burden. They usually waste time in other task a part in performing their duty. Using government property for there own need. They are reluctant to accept change brought by latest restructuring efforts. The general out look and interior layout of branches are not as required according to modern banking NBP bearing up large burden in running those branches, which are not producing any income but keep on adding expenditure. NBP is relying on its traditional sources of income it has not taken benefit from innovation in banking like introducing retail banking or consumer banking and using any type of scheme to generate more deposits and producing more advances. Further, more dont even continue its credit card due mismanagement and lack of control. NBP is far behind in offering modern banking facility like automated teller machines then other commercial bank in Pakistan as only eighteen branches in all over country have this facility. NBP has only forty-four on line branches. While from remaining branches data gathering is time consuming, and not fool proof. Quantum of settlement within different branches is pending because of this updating daily record is becoming very difficult. Customers have to fallow long lengthy procedure for opening of account as well applying for debt. Which discourage most of the people to invest in NBP. In NBP, most of the time merit not has importance in hiring of employees. Such practices are black spot on the face of bank and resulted big losses and fraudulent acts by NBP own employees.
OPPORTUNITIES
Reorganizing efforts going on in the NBP has open many opportunities for NBP to grow. NBP current management has boarder vision. They have taken steps to improve customer services, streamline internal procedure and creating a delectating climate for technology initiative.
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National bank of Pakistan To achieve above mention objective they have created operation group Starting of the retail banking initial working. Setting of target for of making at least 300 branches country wide on line. Closing of all those branches, which are burden on NBP. Management to offer specialized services to major corporate including advisory and debt syndication introduces the concept of relationship manager. Comprehensive training programs has been develop to up grade the core banking skills of the existing staff as well as integrate high quality hiring. To improve the motivation of staff a merit-based culture is being promoted. Through overhauling the manpower recruitment preservation and performance appraisal system. These actions taken by current management provide a great opportunity for NBP for making it future prosper and can make NBP not less than any modern commercialize bank in Pakistan.
THREATS
Following are the major threats which national bank of Pakistan is facing: Major threats NBP facing is from its competitor especially from denationalized commercial bank. In which MCB is on the top of the list, The Bank provides 24 hour banking convenience with the largest ATM network in Pakistan covering 15 cities with over 100 ATM locations. Retail banking and consumer banking resulting in the products such as credit cards, housing finance and automobile finance lending to small individual consumers, and purchases of automobiles, housing, and consumer goods are generally made on a cash basis. These are causing another threat, if not counter will result in significance loss of customers
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National bank of Pakistan Recently banks and other financial institutions have introduced innovative schemes to attract deposits, like gift checque scheme by MCB. These schemes offer prizes on short and long term fixed deposits, through lucky draws. Now banks are using technology which covers the distance no matter how far away any one, through a satellite based, on-line real-time banking system and by offering telephone banking, electronic funds transfer, E-Banking and other modern facilities.
SUGGESTIONS
NBP major fault is that wasnt keep its pace with on going changing in banking industry unlike other bank. Now this bank combining all it power and trying to approach other banks. Latest reorganizing efforts are necessary to make it cost effective also making its facility accordingly to modern banking. These must continue. Bank management has to put its all effort to change the prevailing culture of the bank and to put the foundation stone of business oriented culture. In which employees give important to the bank and its customer. To attract the customer in the future NBP have to make extensive effort to give facilities of retail and consumer banking. Plus the technology in the banking which will be necessary for future banking is another week area need to be stressed. The outlook and interior lay out of the branches is another thing which needs to be improved. The procedure of taking services from the bank must be made easier and straight forward not involving long difficult procedure for simple task. To remain in the market bank need to be vigilant in the eyes of customer. One way is through promotion efforts, so that people aware about he services of the banking and any addition which the bank as made in the portfolio of its services.
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Internship NBP Main Branch MUzaffar Garh

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National bank of Pakistan

National bank of Pakistan

National bank of Pakistan

National bank of Pakistan

National bank of Pakistan

BANKING HISTORY IN PAKISTAN

Settlement of claims by the governments.

Clearing house for transfer of accounts.

HISTORY OF NATIONAL BANK OF PAKISTAN

National bank of Pakistan

Oversea Branches Domestic Branches

National bank of Pakistan

BRANCHES ALL OVER THE COUNTRY

National bank of Pakistan

Mission statement of national bank of Pakistan

Corporate Philosophy at National Bank

Objectives of National Bank

(1) Advancing loans:

(2) Accept deposits:

(3) Remitting of funds:

(4) Sale of promissory notes:

(5) Selling and realizing property of bank claims:

National bank of Pakistan

(6)Investment or underwriting of stocks:

National bank of Pakistan

CHIEF REPRESENTATIVE BOARD OF DIRECTOR

PSO & SECRETARIAT SECRETARY

ASSET & LIABILITY COM

FINANCE GROUP OPERATIONS GROUP

REGIONA L OPERATI ON OFFICERS OPERATI ON DEPARTM

IT OPERATIONS & SERVICES REGIONAL COMPUTER CENTERS SWIFT CENTERS

LOGISTICS SUPPORT ENGINEERI NG GENERAL SERVICES SECURITY STAFF WELFARE

FINANCE & ACCOUNTS DEPT

EMPLOYE E INSURANC E PENSION RETIREME NT BENEFIT PROVIDEN

CORPORAT E INVESTME NT BANKING GROUP

FOUR OVERSEAS REGIONAL

EUROPE & USA

National bank of Pakistan

RISK MANAGEME NT GROUP

REGIONAL AUDIT OFFICE

REGIONAL CREDIT CHIEF CREDIT DEPT HEAD

HEAD OFFICE AUDIT SPECIA L ASSET MANAG EMENT GROUP

IT PLANNING DEVELOPME NT GROUP

STRATEGIC PLANNING AND ECONOMIC RESEARCH GROUP HR MANAGEME NT DEPT

ALL REGIONAL CHIEF OFFICER ALL RETAIL BANKING

ELECTRONIC PRODUCT AND SERVICES DELIVERY TO OPERATIONS GROUP

National bank of Pakistan

National bank of Pakistan

Departments in National Bank Main Branch

In National Bank of Pakistan, four currency accounts are available:

National bank of Pakistan

National bank of Pakistan

Procedure of Account Opening and Depositing Foreign Exchange:

Account opening form:

National bank of Pakistan

2) 2nd purpose is to confirm the address provided by the customer while

Issuance of cheque book:

Foreign Telegraphic Transfer:

Foreign Demand Draft:

Foreign Mail Transfer:

Foreign Bills for Collection:

Foreign Exchange Bearer Certificates (FEBC):

Special US Dollar Bond: