INTERNSHIP REPORT ON

National Bank of Pakistan

Internship Report submitted to the Faculty of Management and
Administrative Sciences in Partial Fulfillment of the Requirements for the
Degree of Business Administration

MBA 6th Semester

Fall 2014

UNIVERSITY OF GUJRAT

Name of Program Coordinator ________________

Signature of Program Coordinator _________________

Dedication
I dedicate this report to my cooperative teachers, my loving parents and my
friends who help me on each and every step of my internship. I also say thanks to
the University of Gujrat which polish my abilities and taught professional skills in
a very good manner.

Acknowledge
First of all I would like to thanks to my dear Allah who gave me the ability to prepare
the internship report. My report will also remain incomplete if I do not mention the
efforts of those people who helped me in completing this work.
Now I will thanks to Khawaja Atif Hassan who gave me opportunity to work in such a
prestigious organization (i.e. National Bank), which is very famous and also very
well known in the country. I also tribute and thanks to my operations manager Mr.
ALI because of him I have the ability to work with experienced persons and he also
enable me to work very efficiently through-out the period of Internship. At the end, I
also thankful to all the staff of National bank of Pakistan (chak jaggna branch) whos fully
cooperate with me.

Table of contents
Title page
Description

Page no.

Dedication
Acknowledgement
1- Executive

Summary------------------------------------------------------01

Part- l

2- Introduction--------------------------------------------------------------------

03

2.1 bank branches--------------------------------------------------------------------- 03

2.2 role of bank in Pakistan ---------------------------------------------------- 03

2.3 functions of NBP in Pakistan -------------------------------------------- 04
2.4 vision ----------------------------------------------------------------------------- 05
2.5-mision----------------------------------------------------------------------------- 05
2.6 core values----------------------------------------------------------------------- 05
2.7 goals-------------------------------------------------------------------------------- 06
2.8 objectives-------------------------------------------------------------------------- 06
2.9 competitors ----------------------------------------------------------------------- 07
2.10 NBP offerings-------------------------------------------------------------------- 07

2.3 Organizational overview --------------------------------------------------- 08

2.3.1 brief history-------------------------------------------------------------------

08

2.3.2 Nature of organization------------------------------------------------------08

2.3.3 Reward and success stories ---------------------------------------------09
2.3.4 Product line ------------------------------------------------------------------ 10

2.4 Organizational hierarchy chart----------------------------------------------- 15

2.4.1 PEST Analysis------------------------------------------------------------------- 17

2.4.2 Departments of NBP------------------------------------------------------------------ 18

3. Internee Working ------------------------------------------------------- 25

3.1 Departments in which I worked------------------------------------------------------ 26

4. Summary of learning--------------------------------------------------33
5. SWOT Analysis---------------------------------------------------------- 36
6. Recommendations-------------------------------------------------- 39
7. Reference---------------------------------------------------------------41

1. Executive summary
Pakistan after getting its independence, did not inherit a strong banking industry and
since then saw a number of events in the industry, like the nationalization of banks in

the 1970s. However today, the banking industry of Pakistan has been growing over the
past few years, mainly because of the consistent policies implemented by the
Government of Pakistan, including the privatization of banks in Pakistan. Also the State
Bank of Pakistans, monetary policy has been very friendly toward the banking industry.
This internship was commenced to learn about the banking activities and practices
which are taken place in National bank of Pakistan. It is very important for MBA students
to do internship during study. I have done my internship in National bank of Pakistan
(CHAK JAGNA branch) during six week.
National Bank of Pakistan is one of the largest banking sector in the country it also
maintains first position in banking sector in Pakistan. It is a famous and reputed bank of
Pakistan. It has over 1232 branches in Pakistan. The national bank of Pakistan offers
wide range of services to all of its customers.
This report contains marketing analysis, competitive analysis and SWOT analysis. The
main idea of internship is to understand, by working in practical environment and to
apply the knowledge acquired, during the studies, in a real world situation in order to
tackle the problems. In this report the detailed analysis of the organization has been
done and all the financial, technical, managerial and strategic aspects have been
evaluated to analyze the current position of the organization. Beside these the bank
provides certain facilities to its customers like Overdraft Facility, payment of interest on
deposit etc. The banks came to know that they could keep a small proportion of the total
deposits for meeting the demands of customers for cash and the rest they could easily
provide.
In this report I am discussing the operations of NBP (chak jaggna). I worked in different
departments like customer service, cash clearing account, account opening
department,and account department the tasks which I have performed in the bank are
mentioned below of this report.
My internship career provides me an opportunity of being showing to real business,
dealing and opportunity of professional insight; it will help me in future career. I have
explained a brief history of the bank following with the banks operational structure and

services of NBP.I have also tried to turn the attention of the readers towards the
functions, policies, practices and styles of field of activities of the bank. In addition to
that I have also explained its financial analysis, which proves that financially it is very
strong. It was a great time in my initial professional life. I did my job with sincerity and
honestly. Bank staff was supportive and cooperative. It was a first experience of my life
in any organization to work with it as an employee. So I was little bit confused and shy
in the start. But after some time my supervisors give me support and courage. And with
their support I became active and objective oriented within a short time. I have learnt
very beneficial knowledge and experience by my internship in national bank of Pakistan.
All staff members support me every time and gave me guideline to do my job in a right
way and good manners .And I am sure that this report will provide you a complete and
observable picture of organization.

PART -1

2. Introduction

The NBP was established vide NBP Ordinance No. XIX of November 9. 1949. British
Govt. devalued its currency in September 1949, India devalued its rupees but Pakistan
did not. It led to a crisis in trading between the two countries and India refused to lift the
Pakistan Jute. To solve this problem i.e. to export jute NBP was established through an
Ordinance of GOP. National Bank of Pakistan maintains its position as Pakistan's
premier bank determined to set higher standards of achievements.
National Bank of Pakistan is a Govt. bank. It has its head office in Karachi. It has over
1,232 branches in Pakistan & 18 abroad. National Bank of Pakistan maintains its
position as Pakistan's premier bank determined to set higher standards of
achievements.

2.1 Branches of nbp

National Bank of Pakistan has built an extensive branch network with over 1282
branches in Pakistan and operates in major business center abroad. The domestic
branch network has been automated and is online. The Bank has representative offices
in Beijing, Tashkent, Chicago and Toronto. It has agency arrangements with more than
3000 correspondent banks worldwide. Its subsidiaries are Taurus Securities Ltd, NBP
Exchange Company Ltd, NBP Capital Ltd, NBP Modaraba Management Company Ltd,
and CJSC Bank, Amati, Kazakhstan. It has recently opened a subsidiary in Dushanbe,
Tajikistan

2.2 Role of the organization in Pakistan

NBP is playing a vital role in development of Pakistan; NBP is making a pioneer role
in development of agriculture sector, which is the main production sector in Pakistan. As
we all knows that agriculture sector is major part of our exports. 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.

2.3 Functions of NBP in Pakistan

The purpose of banks is to provide some services to the general public. And for
this purpose different banks provide different services to the people in different forms.
The NBP is a commercial bank, in modern time commercial banks play a very important
role and their functions are manifold. The main functions and services which NBP
provides to different peoples are as follows.
1) Collection of Challan
2) Payment of pensions
3) Payment of cheques
4) Issuing of travelers cheques
5) Open Different accounts for different people
6) Accepting various types of deposits
7) Accepting various types of deposits
8) Granting loans & advances
9) Undertaking of agency services and also general utility functions, few of those
areas under;
a) Collecting cheques and bill of exchange for the customers.
b) Collecting interest due, dividend, pensions and other sum due to customers.
c) Transfer of money from place to place.
Acting an executor, trustee or attorney for the customers. Providing safe custody
and facilities to keep jewellery, documents or securities.
a)

Issuing of travelers cheques and letters of credit to give credit facilities to

travel.

b) Accepting bills of exchange on behalf of customers.

c) Purchasing shares for the customers.
d) Undertaking foreign exchange business.

2.4 Vision
To be recognized as a leader and a brand synonymous with trust, highest standards
of service quality, international best practices and social responsibility.

2.5 Mission
NBP will aspire to the values that make NBP truly the Nations Bank, by;
Institutionalizing a merit and performance culture
Creating a distinctive brand identity by providing the highest standards of services
Adopting the best international management practices
Maximizing stakeholders value
Discharging our responsibility as a good corporate citizen of Pakistan and in countries
where we operat.

2.6 Core values

Highest standards of Integrity
Institutionalizing team work and performance culture
Excellence in service
Advancement of skills for tomorrows challenges
Awareness of social and community responsibility
Value creation for all stakeholders.

2.7 Goals

To enhance profitability and maximization of NBP share through increasing levrage of

existing customer base and diversificatied range of products.

2.8 OBJECTIVES
Strong emphasis has been laid upon training of branch officers to better equip them for
marketing of retail banking products. Initiatives on similar lines are being launched for the SME
sector. In future NBP is going to introduce modern banking services to keep pace with the
competition and more important our customer needs. These are as follows:

Debit cards
Internet banking
Call centers
Mobile banking.

MILESTONES

Best Emerging Market Bank from Pakistan for the year 2005 Global Finance

USA, May 2005

NBP is one of the Top 100 Banks of Asia Euro money UK, March 2005
Bank of the year 2001, 2003&2004 for Pakistan The Banker financial times

Group UK.
Best Foreign Exchange Bank in Pakistan global Finance USA, March 2004.

2.9 Competitors
Bank al-falah
Union bank limited
Prime commercial bank

The bank of Punjab

My Bank Ltd
Silk Bank Ltd
Habib Bank Ltd
Sindh bank
Meezan bank
Tameer bank.

2.10 NBP Offerings

Revised Rate of Profit on Term Deposit Certificate and Premium Aamadni Certificate

Deposit Products, Profit Rates and Other Specifications

Investment Portfolio Securities (IPS) Products
Prime Minister Flood Relief Fund - 2011
All the donations may be deposited in all NBP Branches in Account No. 696969
Authorized Branches for Working on Saturday
NBP PAKRemit
Home Remittance
Branch Network
NBP Student Loan
NBP Agriculture
NBP Library
NBP Sports
NBP Human Resource

2.3Overview of organization
2.3.1Brief history
National Bank of Pakistan is one of the largest commercial bank operating in
Pakistan. It has redefined its role and has moved from a public sector organization into
a modern commercial bank. The Bank's services are available to individuals, corporate
entities and government. While it continues to act as trustee of public funds and as the
agent to the State Bank of Pakistan (in places where SBP does not have presence). It
has diversified its business portfolio and is today a major lead player in the debt equity
market, corporate investment banking, retail and consumer banking, agricultural
financing, treasury services and is showing growing interest in promoting and
developing the country's small and medium enterprises and at the same time fulfilling its
social responsibilities, as a corporate citizen.
National Bank of Pakistan is today a progressive, efficient, and customer focused
institution. It has developed a wide range of consumer products, to enhance business
and cater to the different segments of society. Some schemes have been specifically
designed for the low to middle income segments of the population. These include NBP
Advance Salary, NBP Saiban, NBP Kisan Dost, and NBP Cash n Gold.

2.3.2 Nature of Organization

The bank has implemented special credit schemes like small finance for agriculture,
business and industries, administrator to Qarz-e-Hasna loans to students, self
employment scheme for unemployed persons, public transport scheme. The Bank has
expanded its range of products and services to include Shariah Compliant Islamic
Banking products. For the promotion of literature, NBP recently initiated the Annual

Awards for Excellence in Literature. NBP will confer annual awards to the best
books in Urdu and in all prominent regional languages published during the defined
period. Patronage from NBP would help creative work in the field of literature. The Bank
is also the largest sponsor of sports in Pakistan. It has provided generously to
philanthropic causes whenever the need arose.
The bank has taken various measures to facilitate overseas Pakistanis to send their
remittances in a convenient and efficient manner. In 2002 the Bank signed an
agreement with Western Union for expanding the base for documented remittances.
More recently it has started Electronic Home Remittances Project. This project
introduces technology based system to handle inward remittances efficiently, by
ensuring that the Bank's branches keep a track of the remittance received from abroad
till its final receipt. Bank has been signing different agreements with other leading
players in the remittance field for ensuring that remittance services are available to most
of the overseas Pakistanis.
A number of initiatives have been taken, in terms of institutional restructuring, changes
in the field structure, in policies and procedures, in internal control systems with special
emphasis on corporate governance, adoption of Capital Adequacy Standards under
Basel II framework, in the up-gradation of the IT infrastructure and developing the
human resources.

2.3.3 Reward Honors and success stories

Best Foreign Exchange Bank Pakistan award for the year 2005 by worlds
leading financial journal Global Finance
Best Bank - Pakistan award for the year 2005 by worlds leading financial
journal Global Finance
The Asian Banker, a reputable financial journal, has published the report of its
research project on the ranking of 300 of Asias Strongest Banks based on a 11Dimensional Dynamic Scoring Criteria has adjudged National Bank of Pakistan
as the Strongest Bank in Pakistan
2nd Global Human Resource Excellence Award - 2011" administered by Global
Media Links in collaboration with Better Pakistan.

 Pakistan: Transaction of the Year Award - 2011, awarded by Islamic Finance

News, for two wind farm projects of 50MW each in which the bank acted as
international inter-creditor agent (for the Islamic Development Bank, the Asian
Development Bank and syndicates of local banks).
National Bank of Pakistan Awarded Best Emerging Markets Bank 2011
Awarded By Global Finance Magazine
Bank of the Year awarded for the year 2010 by the world renowned The
Banker magazine owned by the Financial Times Group, London.

2.3.4 Product line

1. Premium Aamadni
Earn up to 8.55% p.a.
Minimum deposit of Rs. 20,000/- with maximum balance of Rs. 10 million for 5
years
Free Demand Draft, Pay Order and Cheque Book
Convenience of NBP online Aasan Banking (for online banking customers)
Free NBP Cash Card (ATM+Debit)
Running finance facility up to 90%
Profit paid every month as follows

2. Premium saving
PLS Saving Account
Earn up to 8.50% p.a. +.
Minimum saving balance of Rs. 20,001/- & a maximum balance of Rs. 1
million*.
Free NBP Cash Card (ATM + Debit).
Convenience of NBP Online Aasan Banking (for online banking customers).
Two debit withdrawals allowed in a month & no limit on number of deposit
transactions.
Profit calculated on monthly and paid on half yearly basis.

3. Saibaan

Home Financing
Home Purchase
Home Construction
Home Renovation
Purchase of Land + Construction
Balance Transfer Facility (BTF)

4. Advance Salary
Avail financing up to Rs. 1 million against your salary.
Lowest Mark-up Rate
Easy installments of up to 60 months at your choice.
Quick processing and fastest disbursement
5. Financing Facility for Stock Investor
Comfortable environment for trading
No security requirement, except for the customers equity
Customers equity freely available for investment
Equity acceptable in cash or approved shares

Islamic banking vision

To set standards of best practices and performance through efficient asset allocation,
and offer / develop products based on the true spirit of Islamic finance.

Products and services available to the Islamic banking Branch:

Products and services being offered by our Islamic Banking Branch are fully Shariah Compliant
and have been certified by NBPs Shariah Advisor.

1-EPOSIT Scheme

Deposit Schemes being offered by NBPs Islamic Banking Branches would include
the following:

Current Deposit Scheme

Profit & Loss Sharing (PLS) Deposit Scheme.

2-Current Deposit Scheme

Ideal for customers looking for security of their funds along with absolute
convenience in its use, in the form of Current accounts

Funds deposited with the bank will be utilized by the bank at its sole discretion in
Shariah acceptable avenues.

The Customer will have the flexibility to withdraw a part or the whole of their
balances at any time as per their requirement

This is a non-remunerative deposit scheme and thus the customer will not be
sharing the profits nor will be sharing losses (if any). However, the Bank may at
its absolute discretion give rewards to these Depositors depending upon the
operational results of the Bank. Losses will not be passed on to these
Depositors.

3-Profir and Loss Sharing Scheme

PLS Saving Deposits Scheme will accept deposits on Mudaraba basis,

where the depositor will be Rabb-ul-Mal and Bank will be Mudarib. The Bank will
invest the deposited funds at its (Banks) sole discretion in Shariah acceptable
avenues

The Depositor will have the flexibility to withdraw a part or the whole of their
balances at any time as per their requirement.

The Bank will give profit to the Depositors on the basis of agreed ratio of actual
profits to be announced by the Bank from time to time.

In the event of financial loss, the PLS depositors will bear the loss in proportion of
their investment.

The Depositors will not participate in the management of the business of the
Bank

Other terms and conditions as well as rules for PLS Deposit Account to be advised by
the Bank at the time of opening of Account.

4-Financing Facilities
Commercial and Corporate customers requiring financing will have the following
financing facilities available to them to meet their requirements:

Murabaha
Murabaha may be defined as a contract between a Buyer and Seller under which
the Seller discloses to the Buyer the cost of goods being sold and adds an agreed profit.
Price is payable on spot or at a certain future date, in lump sum or in installments
(deferred payments).
Murabaha Facility
1. Under the MURABAHA FACILITY, the Bank will first purchase the required goods directly
or through an Agent. All costs incurred on such purchases will be borne by the Bank.
2. Subsequently the Bank will sell the goods to the customer on deferred payment basis
(30 days to one year) at an agreed price comprising cost of goods purchased and Bank's
profit.

Ijrah (Leasing)
Ijarah means to give something on rent. The term IJARAH is analogous to the
English term leasing.
Firstly the Bank will purchase the Assets as required by the Customer and subsequently
the assets will be leased to the Customer on the terms and conditions as agreed with
him.
Ijarah Facility will be offered for the following assets:

Vehicles (both Commercial and Private)

Office Equipment

2.4 Organizational hierarchy chart

Relationship of head office to the branch offices:

Relationship of head office with branch is linked through regional head quarter. If branch
face any difficulty or require any thing which it needed they communicate to regional
head quarter and then regional head quarter communicates with head office.

2.4.1 PEST ANALYSIS

It is very important that an organization considers its environment before beginning the
marketing process. In fact, environmental analysis should be continuous and feed all
aspects of planning. The organization's marketing environment is made up of:
1. The internal environment e.g. staff (or internal customers), office technology, wages
and finance, etc.
2. The micro-environment e.g. our external customers, agents and distributors,
suppliers, our competitors, etc.
3. The macro-environment e.g. Political (and legal) forces, Economic forces,
Sociocultural forces, and Technological forces. These are known as PEST factors.

Political:

Privatization policy and deregulation

Impact of subsidized credit affecting and NCBs
Employment practices, Unions, Associations
Political Interference and harassment
Incidents of high taxation on banking industry.

Economical:
Constraints in mobilization of public savings because of inflation

Staff cost
Operating cost
Bad debts

Social & Cultural:

Inadequate human resources

Cultural strain to savings
Defaulters lobby
Declining education and work ethics
Inadequate accountability
Adequate empowerment.

Technological:

Inadequate communication infrastructure

Inadequate computer facilities
Inadequate IT training

2.4.2 DEPARTMENTATION OF NBP

The Departments functioning at NBP as briefed by its concerned officers during the
internship are:

Cash Department
Clearance Department.
Remittance Department.
Advances Department.
1. CASH DEPARTMENT

Cash department performs the following functions

Receipt
The money, which either comes or goes out from the bank, its record should be kept.
Cash department performs this function.
The deposits of all customers of the bank are controlled by means of ledger accounts. Every
customer has its own ledger account and has separate ledger cards.

Payments
It is a bankers primary contract to repay money received for this customers account usually by
honoring his cheques.

Cheques and their Payment

The Negotiable Instruments Act, 1881
Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable
otherwise than on demand.
Since a Cheque has been declared to be a bill of exchange, it must have all its characteristics
as mentioned in Section 5 of the Negotiable Instruments Act, 1881. Therefore, one can say that
a Cheque can be defined as an:
An unconditional order in writing drawn on a specified banker, signed by the drawer, requiring
the banker to pay on demand a sum certain in money to, or to the order of, a specified person or
to the bearer, and which does not order any act to be done in addition to the payment of
money.

2. CLEARANCE DEPARTMENT
A clearinghouse is an association of commercial banks set up in given locality for the purpose of
interchange and settlement of credit claims. The function of clearinghouse is performed by the
central bank of a country by tradition or by law. In Pakistan, the clearing system is operated by
the SBP. If SBP has no office at a place, then NBP, as a representative of SBP act as a
clearinghouse.
After the World War II, a rapid growth in banking institutions has taken place. The use of
cheques in making payments has also widely increased. The collection as settlement of mutual
obligations in the form of cheques is now a big task for all the commercial bank. When Cheque
is drawn on one bank and the holder (payee) deposits the same in his account at the bank of
the drawer, the mutual obligation are settled by the internal bank administration and there arises
no interbank debits from the use of cheques. The total assets and total liabilities of the bank
remain unchanged.

In practice the person receiving a Cheque as rarely a depositor of the cheque at the same bank
as the drawer. He deposits the cheque with his bank other than of payer for the collection of the
amount. Now the bank in which the cheque has been deposited becomes a creditor of the
drawers bank. The depositor bank will pay his amount of the cheque by transferring it from cash
reserves if there are no offsetting transactions. The banks on which the cheques are drawn
become in debt to the bank in which the cheques are deposited. At the same time, the creditors
banks receive large amounts of cheques drawn on other banks giving claims of payment by
them.
The easy, safe and most efficient way is to offset the reciprocal claims against the other and
receive only the net amount owned by them. This facility of net interbank payment is provided
by the clearinghouse.
The representatives of the local commercial banks meet at a fixed time on all the business days
of the week. The meeting is held in the office of the bank that officially performs the duties of
clearinghouse. The representatives of the commercial banks deliver the cheques payable at
other local banks and receive the cheques drawn on their bank. The cheques are then sorted
according to the bank on which they are drawn. A summary sheet is prepared which shows the
names of the banks, the total number of cheques delivered and received by them. Totals are
also made of all the cheques presented by or to each bank. The difference between the total
represents the amount to be paid by a particular bank and the amount to be received by it. Each
bank then receives the net amount due to it or pays the net amount owed by it.

In-Word Clearing Books

The bank uses this book for the purpose of recording all the cheques that are being received by
the bank in the first clearing. All details of the cheques are recorded in this book.

Out-Word Clearing Book:

The bank uses outward clearing register for the purpose of recording all the details of the
cheques that the bank has delivered to other banks.

3. ADVANCES DEPARTMENT

Advances department is one of the most sensitive and important departments of the
bank. The major portion of the profit is earned through this department. The job of this
department is to make proposals about the loans. The Credit Management Division of
Head Office directly controls all the advances. As we known bank is a profit seeking
institution. It attracts surplus balances from the customers at low rate of interest and
makes advances at a higher rate of interest to the individuals and business firms. Credit
extensions are the most
Important activity of all financial institutions, because it is the main source of earning
However, at the same time, it is a very risky task and the risk cannot be completely
eliminated but could be minimized largely with certain techniques. Any individual or
company, who wants loan from NBP, first of all has to undergo the filling of a prescribed
form, which provides the following information to the banker.
Name and address of the borrower

Existing financial position of a borrower at a particular branch.

Accounts details of other banks (if any).
Security against loan.
Exiting financial position of the company. And signing a promissory note is also a
requirement of lending, through this note borrower promise that he will be
responsible to pay the certain amount of money with interest.

Principles of Advances
There are five principles, which must be duly observed while advancing money to the
borrowers.

Safety
Liquidity
Dispersal
Remuneration
Suitability

Forms of Loans
In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the form of
cash finance, overdrafts and loans. NBP provides advances to different people in different ways
as the case demand.

a) Cash Finance
This is a very common form of borrowing by commercial and industrial concerns and is made
available either against pledge or hypothecation of goods, produce or merchandise. In cash
finance a borrower is allowed to borrow money from the banker up to a certain limit, either at
once or as and when required. The borrower prefers this form of lending due to the facility of
paying markup/services charges only on the amount he actually utilizes. If the borrower does
not utilize the full limit, the banker has to lose return on the un-utilized amount. In order to offset
this loss, the banker may provide for a suitable clause in the cash finance agreement, according
to which the borrower has to pay markup/service charges on at least on self or one quarter of
the amount of cash finance limit allowed to him even when he does not utilize that amount.

b) Overdraft/Running Finance
This is the most common form of bank lending. When a borrower requires temporary
accommodation his banker allows withdrawals on his account in excess of the balance, which
the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is
generally allowed against collateral securities. When it is against collateral securities it is called
Secured Overdraft and when the borrowing customer cannot offer any collateral security
except his personal security, the accommodation is called a Clean Overdraft. The borrowing
customer is in an advantageous position in an overdraft, because he has to pay service charges
only on the balance outstanding against him. The main difference between a cash finance and
overdraft lies in the fact that cash finance is a bank finance used for long term by commercial
and industrial concern on regular basis, while an overdraft is a temporary accommodation
occasionally resorted to.

c) Demand Financing/Loans
When a customer borrows from a banker a fixed amount repayable either in periodic
installments or in lump sum at a fixed future time, it is called a loan. When bankers allow loans
to their customers against collateral securities they are called secured loans and when no
collateral security is taken they are called clean loans.
The amount of loan is placed at the borrowers disposal in lump sum for the period agreed
upon, and the borrowing customer has to pay interest on the entire amount. Thus the borrower
gets a fixed amount of money for his use, while the banker feels satisfied in lending money in
fixed amounts for definite short periods against a satisfactory security.

4. REMITTANCE DEPARTMENT
Remittance means a sum of money sent in payment for something. This department deals with
either the transfer of money from one bank to other bank or from one branch to another branch
for their customers. NBP offers the following forms of remittances.

Demand Draft
Pay Order
Mail Transfer

Demand Draft
Demand draft is a popular mode of transfer. The customer fills the application form. Application
form includes the beneficiary name, account number and a senders name. The customer
deposits the amount of DD in the branch. After the payment the DD is prepared and given to the
customer. NBP officials note the transaction in issuance register on the page of that branch of
NBP on which DD is drawn and will prepare the advice to send to that branch. The account of
the customer is credited when the DD advice from originating branch comes to the responding
branch and the account is debited when DD comes for clearance. DD are of two types.
Open DD:

Where direct payment is made.

Cross DD:

Where payment is made though account.

NBP CHARGES FOR DD

Up to Rs. 50,000/- is Rs 50/- only
Over Rs. 50,000/- is 0.1%
Pay Order
Pay order is made for local transfer of money. Pay order is the most convenient, simple and
secure way of transfer of money. NBP takes fixed commission of Rs. 25 per pay order from the
account holder and Rs. 100 from a non-account holder

. Mail Transfer

When the money is not required immediately, the remittances can also be made by mail transfer
(MT). Here the selling office of the bank sends instructions in writing by mail to the paying bank
for the payment of a specified amount of money. Debiting to the buyers account at the selling
office and crediting to the recipients account at the paying bank make the payment under this
transfer. NBP taxes mail charges from the applicant where no excise duty is charged. Postage
charges on mail transfer are actual minimum Rs. 40/- if sent by registered post locally Rs.40/- if
sent by registered post inland on partys request.

GENERAL BANKING
General banking section consists of following sub sections:
Inquiry section
Inland Remittances
Deposits
Cash Department
Utility Bills
INQUIRY SECTION
Account opening
Issuing Cheque Book
Term Deposits
Travelers Cheque (TC).

Comments on the organizational

structure
As NBP is a large organization therefore it has complex
hierarchical structure. It is the era of information technology;
Organizations are going to operate with tall management
structure. So Board of Directors has needed to work in this
scenario and they have to make the Management structure of
National Bank of Pakistan tall.

Part- 2

3- Internee work
Introduction of NBP chak jaggna branch:
The branch where I did internship is an medium size branch of National Bank of Pakistan in
chak jagna It was a first branch in jagna. It is followed the instructions and under control in
regional head quarter Gujranwala. I spent six weeks in this branch and did work like a junior
member of a family. I did my internship from 6th august to 21st September 2013 and got good
experience with my staff and learn many processional skills like calculating skills, interpersonal
skills. The whole Staff helped me in every field and step. I did my work in different departments
within the branch and got useable and proper knowledge about the Bank work and leant how to
use it in different situations. It was a short time job but I got more than it. All the staff members
are seniors, experienced and cooperative in nature.khawaja Atif hussain was a branch manager
and well experienced. He treats me very well like his child. I am very thankful to him for his

support and help. I learnt many skills during my internship time span in National bank of
Pakistan .There is one branch manager and one Mto officer and clerical staff and 2 cashie .
All the staff member of national bank helps me a lot in learning multifaceted activities in the
bank.

Starting date: 06/08/2013

Ending date: 21/09/2013
3.1 Departments in which I worked:
I did my internship at National bank of Pakistan (chak jagna) for the duration of 6 weeks and I
worked in different departments for the sake of experience. I worked during this time span in
these departments;

Accounts opening departments

Clearing department
Cash department
Remittance department.

1. Account opening department

This department is the major department of every bank. So this is the general banking
department of the National bank of Pakistan. I worked in accounts opening departments for
some time and I opened more than 10 accounts.

The kinds of accounts which NBP offers in chak jagna branch are as follows;
Current account
Profit loss saving account
Kifayat account
Mahanaaamadni account

Current account:

Current account is basically the non interest account. There must be reasonable
amount for opening of new current account. No zakat deduction on the current
account. NBP also offers different ATM cards on current accounts. there must be

some requirements like customer ID card by NADRA ,source of income ,

address, basic information for account opening.
Profit & loss saving account:

This account can be opened by the minimum amount of Rs 5000. And there is no
restrictions on deposits and withdraws in the account in a month but there has to
be minimum Rs 5000 every time as reserve. NBP also offers different Hilal debit
cards and other ATM cards for their account holders. Banker also requires some
general information for account opening. This information consists on ID card by
NADRA, maximum deposit, monthly income, customer address and etc.
Kifayat Account:

Kifayat account is another type of saving account offered by National bank of

Pakistan. Its minimum requirement is Rs 10000. There must be profits certain
amount calculated by the bank . This profit percentage is calculated on monthly
bases. NBP offers 9% of interest on kifayat account.
MahanaAmdan Account:
MahanaAmdan account is Term Deposit Receipt (TDR) for three years that can be opened by
the customer with a minimum balance requirement of Rs 50000, with a maximum limit of Rs 1
million. Profits are paid at 10% pa, credited on a monthly basis. Other features of this account
include free personal accident insurance and automatic renewal for another 3 years, after the
expiry of original period.

Basic Requirements for Account Opening

The basic requirements of account opening for individuals/self-employed are as follows:

CNIC

Source of income (salary slip etc)

Company letterhead or authorization (as required)

The basic requirement to open an account for a partnership

Partnership Deed

Partners CNIC

Company Letterhead

NTN certificate (optional)

The basic requirement to open an account for companies:

Memorandum of Association

Article of Association

Directors CNIC

Company Letterhead

NTN certificate (optional).

Stop payment procedure

1. Written customer request for stop payment instructions received with time and
date stamped and the customers signatures are verified prior to processing
2. The designated staff will check from the customers account to ensure that the
cheque has not already been paid. In case cheque has already been paid the
same should be intimated to the account holder.
3. Stop payment instructions are recorded in stop payment register under the
signatures of Manager/ Manager Operations
4. Letter of confirmation of the stop payment signed by the Manager Operations
is sent to the account holder through courier.
Specimen signature cards (SSC)
1. Account Holders signatures on specimen signature cards should be admitted
by the officer in charge under his full signatures (in red ink) by affixing round
stamp (signature admitted)
2. Operational instructions prominently noted on SS cards specially pertaining to
joint accounts, partnership firms and account of companies account etc
3. Duly admitted SS Cards are being scanned on daily basis.
4. SS card box kept locked when not in use and kept in strong room overnight.
5. Once in a half year it is verified that all SSC are physically available in the
banks record.
6. Account Opening by me:

When customers come to open their accounts in National bank of Pakistan, They have
to fill the relationship form with the NBP. So I collect the information by the customer
and fill relationship contract after that I also asked many basic information of the
customer which are compulsory for account opening. There are as follows

CNIC verified by NADRA

Pertaining information
Source of income
Address
Company letter head

After completion of all formalities I opened the account of the customer and I made a
letter of thanks for our honorable customer. Furthermore as all relationship forms have
to be sent to Karachi, a central location, for all account relationship forms, I had to
develop a list of daily forms sent and their quantity.

2. Clearing department
In order to make timely collection of Cheques, bills and other documents payable or deliverable
through offices of the Clearing House. Clearing services are available in all the big cities by
NIFT, Clearing is handled by NIFT (Automated Clearing House NIFT) where State Bank has no
office, Cheques are exchanged between the collecting and the paying bank and the ensuing
financial settlement, every branch deals clearing separately.

Every bank acts in two way i.e.

1. Paying Bank
2. Collection Bank
There are teo types of clearing .these are as follows;

Outward clearing
Inward clearing

Outward clearing
The automated system of outward clearing is available at all branches & designated officer will
prepare schedule for outward clearing. The system implemented will generate the following
reports automatically, clearing register, bank-wise schedules& summary of clearing schedules,

after completing data entry. I learnt clearing of cheques clearing by asking questions and see
the activities perform in National bank of Pakistan (chak jagna). The system will accept data
entry and keep the amounts held with it. It will require the date on which the accounts are to be
credited / clearing to be released. At the end of the posting, a contra voucher will be posted
manually in Suspense A/c Clearing, on the date of data entry. After Clearing Posting, all the
transactions already posted in clearing system will be passed to online system and the amounts
will be in float after supervising.
Inward clearing
Inward clearing is very important part of clearing department. I have learnt how to check and
balance the inward clearing negotiable instruments. Basically all inward clearing items should
be debited on same day they are received, to respective accounts on which they are drawn,
where any item cannot be debited due to factors such as Cheques not drawn on t Any
instrument returned unpaid in clearing shall be returned same day through 2nd session of
Clearing House (2nd Clearing) he branch, customers account closed etc., the item should be
treated as item for return

3.Cash department
Cash department is the most sensitive department of the bank. I spent short time there
because of some security reasons in this department. I worked in cash department with my
supervisor and learnt some things. These are as follows;
1.Cash receipt:

After receiving cash, check for fake Currency Notes through UV Lamp for
screening the genuineness and place the cash in drawer not in counter meant

for securing.
Tally amount in figures & words along with other contents on the deposit slip

and counter foil / voucher.

In case of Heavy amounts, obtain copy of CNIC and record contact details of

the depositor.
In case cash receipt is against on-line deposit, duly filled O/Line form is to be
obtained from the depositor(s).

Record the total amount received on the deposit slip and counterfoil/ voucher

followed by signs of two officers.

Record the deposit details on the Cash Receipt Register & pass on the
deposit

slip/

voucher

and

the

Cash

Receipt

Register

to

the

posting/supervising officer.
Detail of currency notes / denomination to be recorded on the back of receipt.
Each entry on Cash Receiving Book should be signed / authenticated by two

authorized officer.
Affix cash received stamp (red ink) on deposit slip and counterfoil/ voucher

and pass on the counter foil to the depositor.

Secure the deposit slip by using poker & pass on the voucher to posting

officer for further processing.

At the day end the Receiving Cashier will balance his cash position with the
help of received vouchers, physical cash held with him and Cash Receipt

Register (Cashier Receiving Book).

Incomplete or erroneous deposit slips returned to the depositor for
completion/ correction and authentication. Cashier shall not prepare or alter

deposit slips.
1- Cash payment
Receive Cheque& check for following, it should not be stale or postdated,
mutilated, amounts in words and figure should tally, overwriting / cutting
should be authenticated by the A/c. Holders (drawer / maker) under his/ her

full signature.
Verify A/c. Holder signature and post Cheque in Cash Mode and write

document number on the Cheque.

In case of Order Cheque obtain CNIC of beneficiary verify signatures of

beneficiary with CNIC signature, cancel Cheque and supervise (if necessary).
In case of third party payment in respect of Cheques having amounts
exceeding Rs. 100,000/- obtain telephonic confirmation from accountholder
and record the same on the back of the Cheque. Also obtain copy of CNIC of

the person to whom the cash is being paid.

For online payment the Cheque should be posted and supervised by two
authorized officer of online department.

In case of cash payment / expense voucher, the same should be approved by

the competent authority. The necessary supporting documents should also be
attached with the voucher if required.

I also learnt about the bonds selling and purchasing and different transactions of bond among
customer to bank and bank to ban.

4-Remmittence department
I worked in remittance department for short period of time because I have very shortage of time.
I spent few days in remittance department and worked with my supervisor. I have learnt about
the demand draft (DD) and foreign demand draft.

Remittance department performs following functions in National bank of Pakistan.

1. Mail Transfer

(MT)

2. Telegraphic Transfer

(TT)

3. Demand Drafts

(DD)

But I have learnt about demand draft (DD) and foreign demand draft.
DEMAND DRAFT (DD):
Demand draft is basically a type of cheques in case when customer wants cash with him
personally. It is less risky and easy to access huge quantity of currency. Demand draft is easily
handling the amount it has the money be taken from the bank when it is presented. So Banks
advise their customers to use demand draft (DD) to transfer their money and avoid the risks of
fraud. Demand draft is issued by bank when bank know its customer well and bank has
complete confidence on its customer. Payee has to sign on the back of instrument in case of
demand draft/ pay order.
When a customer transfer the money by draft ,customer has to fill the form after that concerned
officer fills the following forms;

1. Customers advice
2. Customers debit form
3. Register copy

4. Cover Advice
A foreign bank uses the cover advice if draft is issued to National Bank of Pakistan.
FOREIGN DEMAND DRAFT:
Foreign Demand Draft is like demand draft and treats by the same department. The major
difference between demand draft (DD) and foreign demand draft (FDD) is that DD use for
transfer the money within the country and FDD is use to transfer the money out of country. FDD
requires different forms to be filled like demand draft and it also involve foreign exchange rate.

4-Learning Summary
During my internship I have learn many things by passing through different experiences. The
basic purpose of internship is to learn and also to apply your knowledge in the practical field.
Below is the information about my learning during the internship.

1) Work under supervision:

The first thing which I have learn in the bank is to work under the supervision of your superior
ones. The thing under supervision is to mold you according to the guidelines of seniors.

2) Customer dealing:
The second thing I have learn through the internship is customer dealing. Through my
experience I can say that customer dealing is an art which is not present in the all persons.

3) Tolerance and patience:

In the work place tolerance and patience is key tools to settle yourself in the working
environment according to my experience. You have to tolerate the behavior of ignorant
customers and also have to deal them patiently and help them all the way.

4)Business communication skills:

Business communication skills are very much important while dealing with the customers
,colleagues and your seniors and I have learn this skill during the internship period. We must me
polite, soft and clear in your message while communicating with your seniors, customers and
colleagues.
5)Decision making:
During my internship my decision making skills are more polished and they got a practical way
to prove themselves. Decision making is quite a easy but a difficult and a complex thing. I learn
that decision should be based on facts and fingers and it should be in friendly environment.
Responsibilities learned during internship:
During the internship, I have learn some practical skills as well as also some responsibilities. As
we all know that when we enter in the practical life we become responsible and I realize this
thing while doing the internship.

1) Group work:
Group working is essential at you work place and I understand it while during my internship
period. I have learned to work in the group and also to manage a group.

2) Punctuality:
Punctuality is a responsibility which we lack during the period of our university, collage and
school life. Punctuality is a basic and more important feature in our lives for success and also to
prove yourself.

3) Hardworking:
Without hard work we even cannot earn respect for our self and this is the thing which I had
learned during my internship. For success and to achieve something we have to work hard and
have to increase our work Harding ability.

4) Customer dealing:
Customer dealing is an art which I have learnt through the internship. Our customers are the
persons to whom dealing is the most difficult and most complicated thing. Customer dealing to
influence the customers and also to satisfy them but this is not easy task.

Future influenced by internship:

Everything have some influences at you and at your life. Internship have also effects on me and
my life. It will not only influence my future life but it had influenced my present life as well by
developing skills and responsibilities in myself. It have long term influence in my life.

The accounting work which I have studied in the class room is same as it is in
the bank. It will help me a lot to understand the work and also do the work.

Behavior with others is also teach us in the class room environment.

Business language and business papers is also related to the subject business
communication which we have studied during our degree program
To understand and learn the behaviors and mind level of other psychology helps
a lot .to satisfy and to deal them is also can be learned by this way.
Working on the computer is also learned during the university degree program.
Dressing skills is also related to the class room atmosphere as our teachers
advise us to be in professional dressing.

Conclusion
As above we have done the SWOT analysis of the national bank of Pakistan. The bank of
Pakistan is only the bank of Pakistan which is owned by the government of Pakistan. The bank
of Pakistan is only the bank which contributed a lot in the gross domestic production
development. National bank of Pakistan is earning the highest profit in the last three four years.
These all earnings are the results of the hard work and efficient management. As national bank
of Pakistan is the government bank so it has this positive point and it gains its all funds from the
government and people also have more trust on them. As nobody is perfect in the world and
have deficiencies and weakness, National bank of Pakistan had also weakness and deficiencies
which I have already highlighted in the above section. They work on these areas and make this
weakness as their strength .by taking a look and working on the suggestions which I have
recommended above. In the end I sum up my conclusion and working my saying that national

bank of Pakistan is the one public sector enterprise which is generating profit by utilizing its
assets and faces the day to day challenges of financial markets and institutions. It can enhance
its working and reputation by many ways and can earn profit by working effectively and
efficiently.

5.SWOT Analysis of National bank of Pakistan

For being an internee in the National bank of Pakistan I am in a position to conduct the
strengths, weaknesses, opportunities and strengths (SWOT). As strengths and
weaknesses are internal to an organization and opportunities and threats are external to
an organization therefore I conclude all the positive as well as negative points .
Benefits to employee:
Reasonable monetary benefit offered to National Bank employee. Mostly two types of bonuses
are given to their employee. First is Eid-Ul-Fitar& second is Eid-Ul-Azha. This serves as an
additional benefit and competency for the bank and a source of motivation for the employees.
Worldwide network:
The National bank of Pakistan has broad-basses network of branches throughout the country
also more than one branch in high productive cities. Services are provided to customers at their
nearest place.
Maximum deposits:
National Bank of Pakistan has more deposits than other banks. Customers are loyal strongly
relate with National Bank of Pakistan. That creates positive and competitive edge for it. Oldest
bank in banking sector of Pakistan enjoys this edge over all others.

Strengths:
The strengths of NBP are as follows:
Coordination among branches is one of the strengths of National bank of Pakistan.
Representative of the Government

Skilled and highly educated staff

Facility of Western Union money transfer
NADRA verification this facility is not available in other banks so this is strength.
Highly paid up capital
On the way to becoming number one in the industry
Offering broad services to the broad variety of customers.

Weaknesses:
POLITICAL PRESSURE
The strong political hold of some parties and government and their dominance is affecting the
bank in a negative way. They sometime have to provide loan under the pressure

Less marketing efforts:

National Bank of Pakistan does not effort for its promotion, its image. Thats why the National
bank of Pakistan faces many competitors in the market.

INEFFICIENT COUNTER SERVICES IN THE RUSH HOURS

During the rush hours, the bank is founded out to be a total flop to handle the mob of people
peaking from windows and doors. They are not well served.

Work load on single employee:

Work is not equally divided in this branch. Sometime a signal employee faces difficult condition
when he perform job two or more time extra. He works after the duty hours.

FAVORITISM:
The promotions and bonuses etc. in the bank are often powered by seniors favoritism or
depends upon their wills and decision. This adds to the negative factors.

Computerized Network deficiency:

National Bank of Pakistanhas low level of computerized network system that might be used to
save time and energy. Employees have no technical skills regarding computer system. It is a
weakness of this branch.

Opportunities:
Top management of National bank of Pakistan is well experienced and has boarder vision.
National bank of Pakistan has opportunity to grow with efficient and effective efforts. There are
some opportunities for National Bank of Pakistan.

Merit based hiring culture should be promoted.

To improve core benefit training programs should be develop
Launch new products and services to their customers and attract new customers
Technology upgrade
Islamic Banking system improve in domestically and globally through their high

experience
They should increase rate of interest
Introduce modern banking system

Threats:

National bank of Pakistan has not ability to change their products and services.

They use old methods to store data

Human resource quality

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

Internal politics involve in National bank of Pakistan. its efficiency effects because

of its internal politics

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
MCB introduce innovative scheme to attract deposits
Less stability of economy
Terrorism in Pakistan
Inconsistency of Govt policies.

Conclusion
As National Bank is one of the largest Bank of Pakistan therefore from the above
observed all the activities of the National Bank of Pakistan I observed that NBP is
becoming better and better day by day. It has done a lot but need more improvements
in some areas like customer care etc. As it is a government Bank therefore it is not easy
to stay alive without approving contemporary techniques and most up-to-date tools of
stylish technology. From year 2001 to 2003 National Bank is winning three consecutive
International Awards which shows its position as compared with the other banks. That
is why most of the people believe in the services of NBP and they are enthusiastically
put down their wealth in it. In the last I also conclude that National Bank of Pakistan is a
caring bank and it has done a lot for the welfare of the people.

RECOMMENDATIONS:
NBP is an effectively operating and profit making organization and carrying out its
activities under a specified system of procedure. The main regulatory body is State
Bank of Pakistan, which provides policy guidelines and ensures that the money market
operates on sound professional basis. There are some recommendations for National
Bank of Pakistan. I worked in national bank of Pakistan foe 6 weeks and I observed the
environment and many other things so I recommend some suggestions to them. These
recommendations will be helpful for the betterment of national bank of Pakistan.
Technological advancement:
National bank should develop modern technological connections between all branches in all
over the country. They should develop a modern connectivity between the departments of the
bank. National bank has adopted new ATM links and use new technologies like routers and
others. They should improve their IT departments in their branches and also have to develop a
proper it department in all national bank branches. National bank should adopt new
technologies in their security sector and also in securing and maintain the record and files in
their database system.
Incentives for employees:

National bank of Pakistan should develop different incentive schemes for their employees to
motivate the employees.

Different loans and car or motorbikes financing for employees.

Scholarship programs for employees.

Different awards and prizes at the end of projects.

Rotation of jobs in the branches for the betterment and improvement of their employees
skills.

Professional Training:
National bank of Pakistan staff has a lack of professionalism. The lack of professional skills can
be filled by the proper tainting and through different workshops. There should make a proper
syllabus for the necessary training and of the staff. Workshop programs should be conducted in
all cities of the country.
Lower level of employees should also get the chance for their job improvement and promotion
chances. There must be some training programs in bank for their promotion at small level like
phone banking and sorting of cheques.

Delegation of authority
There should be delegation of authority to the employees to perform their tasks and also asked
for their responsibilities.

Performance appraisal system:

There should be a proper monitoring system which monitors the performance of all employees
in the branch and they should be awarded according to their performance. This will motivate
them and employees will work in a proper manner.

Transfer of employees:Some employees are working from long period of time in a

same branch so there should an employee transfer system in bank due to this all
employee work in different branches of the bank in certain period of time in a branch.
Placement of employees:

There are some departments iin bank , there is very short number of employees in
department and this make it difficult to perform all department activities in department
so NBP should place proper number of employee in every department for the sack of
better banking practices in each and every department of NBP.
Flexible policies:
NBP should introduce some change and flexible policies for their customers. Normally
upper management makes the policies and follows them strictly which could be harmful
for their customers. So NBP should develop such policies which are beneficial for
customers and bank employees both.

References

State Bank of Pakistan Notes

NBP Websitewww.nbp.com.pk

SBP Website; http://www.sbp.com.pk

NIFT Website; http://www.nift.com.pk

http://www.scribd.com/doc/28186321/1/History-of-National-Bank-of-Pakistan

Staff members of National Bank of Pakistan