CHAPTER 1 INTRODUCTION

1.1. BACKGROUND OF STUDY:

My report is about National Bank Pakistan. NBP was established in 1949 and since then, it has e xp end ed its net wo rk, b eco min g the largest co mmer cial B ank o f the country. T he r e ar e cer tain ch ar acter is tics, wh ich set s NBP ap a r t fr o m oth er n ation aliz ed commercial banks. These characteristics are the reasons of the development of NBP. The most important characteristic of NBP is that, it works, as an agent to the State Bank, Where State Bank does not have a branch of its own. The NBP also act as a trustee to the National Investment Trust (NIT), which is one of the premier. It is ch arged th e resp on sib ility o f m ob ili zin g sma ll s a v i n g s . T h e e s t a blishment of NBP thus signaled the achievement of anoth e r milestone in the development of the banking industry in Pakistan.

1.2. PURPOSE OF STUDY:

The purpose or objective of this report is to define and describe different functions and products offered by the bank to its valued customers, to identify some weaknesses related to the management of the Bank, to analyze the performance of the Bank and finally to give some necessary recommendation to the management of the bank. This study can help the students of IBMS in making their reports about their organization. My internship in NBP had certain objectives such as: Observe the work in different departments of NBP. Develop the relationship to get more information. Apply managerial skills in real work place. Getting confidence while interviewing the heads of the different departments. Develop analytical skills for organizational analysis and financial analysis etc.

1.3.SCOPE OF WORK:
As an internee in National Bank of Pakistan Main Branch hayatabad the main focus of my study research was on general banking procedures in one of the branches of NBP. I did my practical work in four (8) departments. Deposit Department Remittances Department cheques

 Clearance & A/C Opening department HR DEPARTEMENT GOVERENEMENT DEPARTEMENT

CLEARING DEPARTEMENT Cash department

While working in these departments I have identified problems and gave recommendations to overcome these problems. I have done comparative analysis of three years financial statements and SWOT analysis of NBP Main Branch hayatabad .

1.4. METHODOLOGY OF RESEARCH:

During my internship in NBP Main Branch hayatabad the most important task was to collect as much quality information about the organization as possible. Due to this reason I used a number of techniques to collect the required material and compile the rep o rt. T he met ho d o log y, wh ich I ad op ted fo r this r esear ch, is b ased o n b o th the primary data as well as secondary data.

The Sources of Primary Data

Interviews with bank employees. Personal observations.

The Source for Secondary Data

Annual Reports Manuals of departments about Report writing Relevant books Brochure and circulars of the bank Internet

1.5. SCHEME OF REPORT: CHAPTER 1:

Chapter 1 is introduction in introduction we study back ground of study, purpose of study ,scope of work ,methodology of research, scheme of report.

CHAPTER 2:
Chapter second is about over view of organization in overview we study brief history, nature of organization ,business volume ,product lines ,competatiors, and brief introduction of branch.

CHAPTER 3:
Chapter third is about organization structure in organization structure we study organizational hierarchy chart ,number of employees,main offices,introduction of department,functions of the department.

CHAPTER 4:
Chapter 4 is about critical analysis in critical analysis we study compare current strategies and vision and mission ,compare theoretical concepts with current practices being carried out by organization.

CHAPTER 5
Chapter 5 is about swot analysis ,means strength ,weakness, threats to the particular organization.

CHAPTER 6:
Chapter 6 is about conclusion and recommendations means weakness and also find the solution suggestions to solve that problem.

CHAPTER 2 OVER VIEW OF THE ORGANIZATION 2.1.BRIEF HISTORY:

Nation al b an k o f Pak istan was est ab lish ed in 1949. Th e gover n men t con tr o lled National Bank of Pakistan has played a unique role both as a commercial bank and as a trustee of pubic finances. Operating through a network of 1225 domestic and 24overseas branches it has been at the forefront of national economic development. Its contribution in the development of small and medium size entrepreneurs is significant. It is credited with introducing such innovative schemes as Peoples Credit Scheme (1960), supervised Agricultural Credit Programmed (1972) and educational loans on compassionate grounds.

Form ative Phase:

The Bank as originally conceived was allowed an authorized capital of Rs. 60 million. In December 1960 capital was reduced to Rs. 30 million (NBP (Amdt) Ordinance1 9 6 0). T he Bank wa s setup wit h an iss ued cap ital o f Rs. 1 5 Millio n o f whic h th e government paid 25 percent, the balance was offered to the public. The shares offered to the public were floated in 1950 and were promptly taken up. In the same year NBP Ord in a nce was am en d ed so th at it cou ld tak e u p ord in ary comm er cial ban kin gb usin e ss . In 1952 it was felt th at th e con solid ation ach ieved b y Nation al B an k, justified the transfer of the agency of the State Bank for government business from Imperil Bank to this National Institution. As such the National Bank started taking o ver t he go ver n ment tr easur y wo r k fr o m I mp eril B ank o f Ind ia in Ma y 1 9 5 2 and success full y co mp leted the p r o cess b y end o f Sep te mb er. I n 1 95 1 NBP started foreign exchange business. The Bank under took a program of expansion. Branch network was expanded and by1959 it had 129 branches at carefully selected locations in both wings of county as against only 17 in 1950. Its geographical development extended abroad beginning with the establishment of its first overseas branch at Jeddah, Saudi Arabia in 1950 for the specific purpose of providing sterling exchange facilities to bankers and moneychangers having Pilgrim Notes. In view of the some of business available, the Central Board decided to maintain it permanently.

2.2. NATURE OF ORGANIZATION:

National Bank of Pakistan was incorporated in Pakistan under the National Bank of Pakistan Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. The bank is engaged in providing commercial banking and related services in Pakistan and overseas. The bank operates1,249 (2007:1,232) branches in Pakistan and 22 (2007:18) overseas branches (including the Export Processing Zone branch, Karachi.

The nature of responsibilities of the Bank is different and unique from other banks/financial institutions. The bank also handles treasury transactions for the Government of Pakistan as an agent to the State Bank of Pakistan for handling provincial/Federal Government receipts and payments on their behalf. The National Bank of Pakistan has also played an important role in financing the countrys growing trade, which has expanded through the years as diversification . The bank is providing all banking services of mercantile and commercial banking permissible. Accepting of deposits of money on current, fixed, saving, term deposit and profit and loss sharing accounts. Borrowing money and arranging finance from other banks. Advancing and lending money to its clients. Financing of projects, including technical assistance, project appraisal through long term/

 short term loans, term finance and musharika certificates, etc. Buying, selling, dealing, including entering into forward contracts of foreign exchange. Financing of seasonal crops like cotton, wheat, rice, sugar cane, tobacco, etc. Receiving of bonds, valuables, etc. for safe custody. Carrying on agency business for any description other than managing agent, on behalf of clients including Government and local authorities. Generating, undertaking, promoting, etc. of issue of shares and, bonds etc. Transacting guarantee and indemnity business.

2.3. BUSINESS VOLUME:

Bank paid up capital Rs8969 millions Net assets Rs102459218 Share capital Rs8154319 Reserves Rs15772124 Earning per share is Rs23.3

Year TOTAL ASSETS DEPOSITES ADVANCES RESERVES

2004 5523.231.467 465.571.717 220.794.075 10.813.914

2005 577.719.114 463.426.602 268.838.779 13.536.041

2006 645.132.711 501.872.243 316.110.04 13.879.26

2007 762.193.593 591.907.435 340.677.100 15.772.124

2008 817.758.3286 624.939.1060 412.986.6850 19.941.04700

INVESTMENTS 149.350.096

156.985.68

139.946.92

210.787.86

170.822.49

Horizontal analysis(%)
Total assets Deposites Advances Reserves Investments 100 100 100 100 100 104 108 122 125 105 117 127 143 128 94 154 146 141 138 148 134 187 184 114

The business volume of National Bank of Pakistan is stated in terms of total assets, deposits, advances, reserves and investments. To analyze the trend in these items the Horizontal analysis of each item is calculated The business volume of National Bank of Pakistan is stated in terms of total assets, deposits, advances, reserves and investments. To analyze the trend in these items the Horizontal analysis of each item is calculated.

ANALYSIS:

The deposits and other accounts of National Bank of Pakistan show a mixed trend during all years. In the year 2005, the deposits were increased very marginally, with the year 2006 represents an increase of 8%. The deposits are increased 27% & 34% in the years 2007 and 2008.

ANALYSIS:

The advances made by National Bank of Pakistan shows an increasing trend in all years as compare to base year. This implies that National Bank of Pakistan is keener to advance money to lenders. The advances were increased 22 % in the year 2005 and 43 % in 2006 as compare to base year. The year 2007 represents an increase of 54 % and 2008 represents highest percentage among all years that is 87 % .

ANALYSIS:

The Banks reserves are banks' holdings of deposits in accounts with their central bank plus currency that is physically held in bank vaults (vault cash). The reserves of National Bank of Pakistan fluctuate during all years as they show an increasing trend. The reserves are increased 25 %, 28 % & 46 % in the years 2005, 2006 & 2007 respectively. The year 2008 represents highest increasing percentage of 84% as compare to base and previous years.

2.4:PRODUCT LINES:
The most precise definition of product is anything capable of satisfying needs, including tangible items, services and ideas . In marketing, a product is anything that can be offered to a market that might satisfy a want or need.7 Since 1575, the word "product" has referred to anything produced. Since 1695, the word has referred to "thing or things produced. The economic or commercial meaning of product was first used by political economist Adam Smith. In general usage, product may refer to a single item or unit, a group of equivalent products, a grouping of goods or services, or an industrial classification for the goods or services. The consumer banking products include personal accounts, credit cards, loans, investment products, treasury products and many more. The National B bank of Pakistan offering for sale several related products individually, which is commonly known as product lining. A product line is defined as A group of products that are closely related because they function in a similar manner, are sold to the same customer. there is a lot of product lines but a few are:

DEPOSITS:

The National Bank of Pakistan offers to their clients a variety of Deposit Schemes with personalized services at competitive rates of interest. Any Pakistani citizen can open his/her account for any deposit scheme at any of its Branches strategically located throughout Pakistan. The Bank with its huge network of 1243 branches garners savings from both the rich and the poor in urban as well as rural areas. Even a poor farmer in a remote village,

with his meager annual income, feels secure to safe keep his minuscule savings in National Bank of Pakistan, Because National Bank of Pakistan has a long heritage of trust and professional commitment.

CURRENT DEPOSITS:

These are payable to the customer when ever they are demanded. When a banker accepts a demand deposit, he incurs the obligation of paying all cheques etc, drawn against him to the extent of the balance in the account. Because of their nature, these deposits are treated as current liabilities by the banks. Bankers in Pakistan do not allow nay profit on these deposits, and customers are required to maintain a minimum balance, failing which incidental charges are deducted from such accounts. This is because Current Deposits may be withdrawn by the depositors at any time, and as such the bank is not entirely free to employ such deposits.9 Current Accounts/ Basic Banking accounts are opened, on proper introduction and submission of required documents along with initial deposit prescribed from time to time. Basic banking accounts are opened for an individuals (single or joint) only whereas current accounts are opened for individuals (single or joint) Charitable institution, provident and other funds of benevolent nature of local bodies, autonomous corporations, companies, associations, educational institutions, firms etc. and in all other cases where the accounts are to opened under the order of a competent court of law. No profit is paid on the balances of current/basic banking accounts. The bank is authorized to deduct service charges (incidental charges) on current accounts levied through its half yearly schedule of charges, in case the average balance falls below the minimum balance as prescribed by the bank. No balance maintenance condition is applied on basic banking account.

PLS

SAVING DEPOSITS:

In Pakistan a Savings Deposits Account can be opened with a very small amount of money, and the depositor is issued a cheque book for withdrawals. Profit is paid at a flexible rate calculated on six monthly basis under the Interest Free Banking System. There is no restriction on the withdrawals from the deposit accounts but the amount of money withdraw is deleted from the amount to be taken for calculation of products for assessment of profit to be paid to the account holder. It discourages unnecessary withdrawals from the deposits. In order to popularize the scheme the SBP has allowed the Savings Scheme for school and college students and industrial Labour also. The purpose of these accounts is to inculcate the habit of savings in the constituents. As such, the initial deposits required for opening these accounts are very nominal.10NBP charge Rs.500 for opening of PLS Savings deposits.

The silent features of profit and loss sharing and saving accounts of NBP are as fallows:

1. These accounts can be opened by individuals in their own single or joint name. The PLS savings account can also be opened for provident fund or other benevolent funds of companies, firms, organizations, NGOs and educational institutions. 2. PLS saving account can be opened with a minimum amount of Rs.500/- only 3. To share in the profit a minimum balance of Rs.500/- must be maintained in the account. The minimum balance on sixth and last of month will qualify for the profits. The profits will be calculated on the basis of monthly minimum balance for the periods of six months i.e. from January to June and July to December 4. The head office of NBP determines the profit or loss on PLS saving deposits and advice its branches the rate and time of distribution of these profits. 5. There shall be no restrictions on maintaining the maximum balance in PLS saving account.

6. On the first day of Ramzan each year the Zakat at the rate of 2.5% will be deducted from these deposits on the balance of that day. But if depositors affix an affidavit of Zakat.

FIXED DEPOSIT ACCOUNT (TIME DEPOSITS):

The deposits that can be withdrawn after a specified period of time are referred to as Fixed or Term Deposits. The period for which these deposits are kept by the bank ordinarily varies from three months to five years in accordance with the agreement made between the customer and the banker. Profit/Return is paid to the depositors on all fixed or Time deposits, and the rate of profit/Return varies with the duration for which the amount is kept with the banker. By lending out or investing these funds, the bank earns more than the Profit/Return that it has to pay on them to the depositors.11 By giving an advance notice to the bank the deposit can be withdraw from the bank before the expiry of the period. Fixed deposit accounts have higher rate of interest as compare to other accounts. The rate of interest rises with the length of period and the amount of deposit. The bank grants to the depositor a fix deposit (FDR) which is not transferable to any other person. The silent features of fixed deposit account of NBP are as fallows: 1. The PLS term deposit are opened for individuals in their own single or joint names, companies firms and other organizations. 2. The PLS term deposit receipt are issued for any amount. There is minimum or maximum limit or deposits in a single term deposit account. 3. PLS term depositors may be allowed some facilities against the security of these receipt credits, after making Lien on the relevant receipt and subject to recovery of service charges.

1. Under term deposit scheme the depositors not cease to earn the profit immediately, after the respective maturity date.

FOREIGN CURRENCY ACCOUNT:

Government of Pakistan has introduced many important reforms in Foreign Exchange Control in the country since February, 1990, for the purpose of strengthening the Foreign Exchange Reserves. One of these reforms relates to foreign currency accounts, which can be opened in United States Dollars, Pound Sterling, Euro and Japanese Yen in any of the authorized branches of commercial banks throughout the country.12 Foreign currency accounts are opened, on proper introduction and submission of required documents along with an initial deposit prescribed from time to time. Rates of return on foreign currency deposits are subject to fluctuation as determined in accordance with State Bank of Pakistan directives and will be paid on six monthly basis whereas the return on term deposit/SNTD will be paid on maturity or as prescribed by SBP. The bank shall have no responsibility for or liability to the account holders for any diminution due to taxes imposed or depreciation in the value of funds credited to the account whether due to devaluation or fluctuation in the exchange rate or other wise.

NBP

PREMIUM AAMDANI:

NBP Premium aamdani is a retail product of the bank. The amount of investment required for this account is Rs. 20,000/-to Rs. 5,000,000.The investment period is 5 years. Zakat and withholding tax will be deducted as per rules. In NBP premium aamdani, the account holders have benefit of free demand draft, pay order; free cheque book and NBP cash card (ATM+Debit). The Financing facility is available up to 90% of the deposit value.

NBP

ADVANCE SALARY:

The NBP Advance salary has been the flag-ship product for NBP. NBP Advance Salary, the leading personal loan product of the country, is maintaining its inimitability ever since it was launched. This was only possible due to its swift growth and remarkable loan disbursement of over 118 billion.16 You can avail up to 20 net take home salaries with easy repayment installments. Its hassle free acquisition with no prior formalities and easy availability in a short turn around time is attributed as the most distinguishing features of the product. The product is offered countrywide. The terms and conditions of NBP Advance salary are as follows

TERMS & CONDITIONS

Eligibility: Permanent Employees of Govt., Semi-Govt., Autonomous, Semi Autonomous, Local & other bodies who are maintaining their Salary A/Cs at NBP. Repayment: Direct deduction from Salary A/C Maximum Loan AmountRs. 490,000/ Security: Employer will provide undertaking that borrowers Salary and end of service benefits will route through his/her

Salary A/C maintained at NBP during the tenure of the loan and his/her end of service benefits are at least equal to the amount of Advance Salary required Max. Repayment Period: 5 years (60 months) Advance in terms of net take home salaries :Up to 20 net take home salaries Markup Rate 15 %: (Based on diminishing balance method)

Verification Charges: Rs 500/ Remaining Service Age: At the time of approval and disbursement the applicants remaining service age should be 6 months after maturity of the loan. Minimum net take home salary: no minimum take home requirement

STUDENTS LOAN SCHEME:

Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002 budget speech, a Student Loan Scheme (SLS) for Education was launched by the Government of Pakistan in collaboration with major commercial banks of Pakistan (NBP, HBL, UBL, MCB and ABL). Under the Scheme, financial assistance is provided by way of Interest Free Loans to the meritorious students who have financial constraints for pursuing their studies in Scientific, Technical and Professional education within Pakistan. The Scheme is being administered by a high powered committee comprising Deputy Governor, State Bank of Pakistan, Presidents of the commercial banks and representative of Ministry of Finance, Government of Pakistan.

NBP KAROBAR UTILITY STORE:

The product has been designed in collaboration with UTILITY STORES CORPORATION OF PAKISTAN (USC) to provide financing facility of an average amount of Rs.100, 000/for a maximum period of five years with grace period of three months. This is available to all eligible citizens of Pakistan for setting-up small-scale Retail Outlet or Mobile Utility Store. The USC will give its franchise to qualifying Pakistani citizens. Following two financing options are available under this product.

NBP KAROBAR Utility Store (Shop):

The Financing facility is available to set-up a small scale Retail Outlet (Utility Store in a shop) for purchase of furniture & fixtures. This is also applicable on payment of security deposit / advance rent under franchise from the USC. However, stocks will be purchased by the customer.
NBP

KAROBAR TRANSPORT:

The NBP Karobar Transport is designed to finance 2/3 wheeler, 4 stroke Petrol/CNG/LPG Vehicle (Auto Scooter / Motorcycle Rickshaw) to the eligible citizens of Pakistan for providing less expensive environment friendly transport facility. Under this product

average loan size ofRs.100, 000/- will be provided for a maximum period of five years with a grace period of three months.

PARTNERSHIP ACCOUNT:
1. NIC of all partners 2. Partnership deed attested by the Notary Public 3. NTN certificate 4. Form- C (if partnership is registered) 5. Rubber stamp according to following format.

COMPANY ACCOUNTS;
1 Rubber stamp according to their designation 2 List of director attested by chief executive 3 Resolution of the board of director to open bank account (on bank format) 4 Form 29 duly attested by SECP: This certificate contains the details of directors and officers including Chief Executive, Managing Agent, Secretary, Chief Accountant and Auditors and Legal Advisor. NTN Certificate of incorporation. Article of Association (AOA) / Memorandum of Association(MOA)

NBP KAROBAR MERA APNA KAROBAR:

Now one can get up to Rs. 200,000/- and for start ones own Business, and the age for gaining the loan is 18-45 years. Mark up 1 year KIBOR + 2.00p.a. The customer will pay markup at 6% p.a.

2.5. COMPETITORS:
The competitors of the National Bank of Pakistan are as follows: Askari Bank Habib Bank Limited United Bank Limited First Woman Bank Muslim Commercial Bank PICIC Commercial Bank Bank of Punjab Dubai Islamic Bank National Savings Allied Bank Limited Saudi Pak Commercial Bank Union Bank Limited Faysal Bank Standard Charter Prime Bank Bank Al-Falah My bank Silk Bank Sonehri Bank Metropolitan Bank Arif Habib Bank

 The Bank of Khayber Bolan Bank Limited Platinum Commercial Bank Ltd Mashreq Bank.

2.6. BRIEF INTRODUCTION OF THE BRANCH :

Website Name of Branch Branch code Region Address Name of manager : : : : : : www.nbp.com.pk National Bank of Pakistan hayatabad Peshawar 0597 Peshawar National bank Pakistan phase 5 hayatabad ABDUR RAUF HAMID KHAN 13

Name of my supervisor: Number of employes :

hayatabad branch founded: on 20 novemeber 1999

BRIEF INTRODUCTION:
A brief introduction of the branch where you did your internship

I preferred to do my internship at National Bank of Pakistan the reason was that it is largest and leading commercial banks of Pakistan and I want to continue my learning at well reputed organization which would be productive both for the organization and me as well. NBP is responsible to provide all services to its customer. . When I joined the bank, I had no practical experience with regard to working of a regular bank. Then I got an opportunity from the university authorities to join and work with NBP to get experience of the rules and regulations that bank follows.

I left the bank with a thirst to learn more. I seek a chance in order to survive in banking environment. Branch of NBP where I did my internship is the main Branch of hayatabad. By size, its a large level branch having more than 11 employees working in it. There are 2 office boys working in the bank. All offices are well furnished and managed accurately that there is no confusion or mistake occurs in finding any office. By look its building look is very attractive. The working and learning environment of the bank is very valuable and high quality. Employees are ready to coordinate with you in all of your queries. I worked there for eight weeks are learned a lot in this very short span of time. The whole staff of NBP bank is very promising and intellectual, expert in their work, well mannered and efficient.