Internship Report

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1)I1))11T )1TO)I
O)
NationaI Bank of Pakistan
Chouburji Branch, Lhr
Presented To
Prof. Dr. ZuIfiqar Ahmed Bowra
Designation: Professor
Department: 1vic, (occ o{ (onnc.c
+ni.c.i, o{ nc Tvn]v, vnoc

Presented By
Kanwal kram Siddiqui
Roll number 646
8
th
Semester
Class: Section (B-Morning)
Session 2007-2011
Department: 1vic, (occ o{ (onnc.c
+ni.c.i, o{ nc Tvn]v, vnoc

Dated: 6
th
September, 2011

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%raining Completion Certificate

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2. Letter to Prof. Dr. ZuIfiqar Ahmed
Bowra about the submission of
report
SUBJECT: Submission of Report

Respected sir,
Most respectfully, it is stated that am a student of 8
th
semester in Hailey College of Commerce, for completion of my degree of
B.Com. (Hons.) t is essential to do some practical work in any business
organization so did my six week internship in NationaI Bank of Pakistan,
during the course of internship learned practical knowledge in many
aspects of banking. So comprised all knowledge which learned, in a
report. request you to consider my report and analyze my work performed
in NBP during internship. will be very thankful to you for your
consideration and precious time.
Yours Obediently,
Kanwal kram Siddiqui

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3. Areas Covered by the Report

long with theoretical knowledge it is very important for the students to
know the practical application of their theoretical knowledge. lthough
being the student of B.Com.(Hons.) have been taught about all the basic
Banking works but still bookish knowledge is not enough to understand the
working at a particular organization. For this purpose, HLEY COLLEGE
OF COMMERCE made arrangements for internship training at different
organizations.
feel my self very lucky to have the opportunity to complete my training in
a very reputable and prominent organization, i.e. National Bank of
Pakistan. During my six weeks training, tried my best to learn as much as
possible and in the report in your hands have tried to make my humble
endeavour to cover various aspects like introduction with history,
management, departments with their functions, reports, working and
financial analysis of NBP.
lthough NBP is running its financial matters very well, think there is
always a room for further improvement. Keeping this thing in view, made
a humble effort to give the SWO% analysis in the last part of this report to
give the position of the bank both internally and externally.

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4. AcknowIedgement

wish to place on records my sincere thanks to the honorable principal,
professors, mentors and colleagues who guided me, showed me the right
path and helped me whenever the demand was raised which, interalia,
beacme instrumental to complete this gigantic job.
n paticular wish to pay my gratitudes to the following worthy
personalities, without their guidance was unable to present this report;

O Dr. Liaqat li, Principal, Hailey College of Commerce
O Mr deel Hashmi (%he Branch Manager), NBP Chouburji Branch,
for being very helpful and for providing guidance during the
course of this internship program.
O ll the staff at NBP Chouburji Branch, especially Ms. Bina
Nosheen, Mr. mtiaz hmed,Mr. Mashood Butt and Mr. Riaz-ur-
Raza.
O Last but not the least, my parents who supported me whole my
life and especially during the studies.

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TabIe of Contents
Topics Page no.
1. %raining completion certificate...............3
2. Letter to Prof. Dr. Zulfiqar hmed Bowra.................4
3. reas covered by report.........................5
4. cknowledgement.....................6
5. List of illustrations.....................10
6. Executive summary.....................11
7. History of banking.....................12
7.1 Growth of banking in Pakistan...........15
7.2 List of banks in Pakistan............16
7.3 History of NBP.................20
. nternational Offices............23
. %imeline..................24
. slamic Banking..............25
8. Vision, Mission Statement, Core Values, Goals & Objectives..26
9. Management of bank...................30
9.1 Board of Directors.................30
9.2 Senior Management................32
9.3 Corporate & Financial reporting framework....33
10. Organizational structure of NBP..............36
10.1 Organogram of NBP.............36

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10.2 Organogram of NBP, Chauburji Branch......38
11. Products.......................39
12. Services........................50
13. General banking......................61
13.1 ccounts Section...............61
13.2 Remittances Section.............69
13.3 Clearing Department..............73
13.4 Computer Section................74
14. Work done by me....................82
14.1 ccount opening Department.........82
14.2 Clearing Department..............84
14.3 Deposit Department...............85
15. Ratio nalysis......................89
16. Working........................90
17. nalysis of financial ratios.................91
17.1 Liquidity Ratio.................91
17.2 Debt Ratio.................93
17.3 Profitability Ratio...............94
18. Horizontal & Vertical nalysis................96
18.1 Horizontal nalysis..............96
18.2 Vertical nalysis...............98
19. SWO% nalysis.....................100
19.1 Strengths..................100

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19.2 Weaknesses................101
19.3 Opportunities...............102
19.4 %hreats...................103
20. Recommendation & Suggestions.............105
21. References.....................109
22. Glossary.......................110

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5. List of IIIustrations
List Page no.
Figure 10.1..........................36
Figure 10.2..........................38
%able 11.1.........................39
Figure 17.1.1........................91
Figure 17.1.2........................92
Figure 17.2.1........................93
Figure 17.3.1........................94
Figure 17.3.2........................95
%able 18.1..........................96
%able 18.2..........................98

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6. Executive Summary
Banking is one of the most important sector in any country's economy. %he
role played by banks in strengthening a country's outlook for investors is in
one way aided by the banks. %he report that have compiled starts with
the breif history of bank and an introduction about the bank. little
information about mybank(ltd) is also given as well.
Bank's management structure has been described as well. ll the relevent
people name have been given. %he hiererchy at branch level as well as at
organization level is also drawn. brief view of all the operations at branch
level has been discussed. have also highlighted the work that have done
in the period of eight weeks with mybank. My observation as well as my
experience.
n in-depth financial analysis of mybank is also done, taking tlas Bank
and Saudipak Bank(Silk Bank). %he justification of financial viability is
made by a detailed horizontal and vertical financial analysis as well as ratio
analysis. conclusion of of these analysis has also been made. brief
discussion about the dilemmas faced by the bank is written after that the
recommendations are also given.
have sumed up the report by giving the conclusion all the whole report.
have also made SWO% analysis to position the bank internally as well as
externally.

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. History of Banking
What is a Bank?
Banks are institutions that handle payments, deposits and other financial
processes for customers. %hey borrow and lend money while providing
other services to the public. %he banking industry has added many
services to its portfolio and has evolved into a financial institution. n
banking, each customer has an account with an assigned number that they
use. %here is a vast array of the types of accounts that can be opened.
%he two most common for an individual or business are the checking and
savings accounts.
WorId Banking History
%he first banks were probably the religious temples of the ancient world,
and were probably established sometime during the third millennium B.C.
Banks probably predated the invention of money. Deposits initially
consisted of grain and later other goods including cattle, agricultural
implements, and eventually precious metals such as gold, in the form of
easy-to-carry compressed plates. %emples and palaces were the safest
places to store gold as they were constantly attended and well built. s
sacred places, temples presented an extra deterrent to would-be thieves.
%here are extant records of loans from the 18th century BC in Babylon that
were made by temple priests/monks to merchants. By the time of

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Hammurabi's Code, banking was well enough developed to justify the
promulgation of laws governing banking operations.
ncient Greece holds further evidence of banking. Greek temples, as well
as private and civic entities, conducted financial transactions such as
loans, deposits, currency exchange, and validation of coinage. %here is
evidence too of credit, whereby in return for a payment from a client, a
moneylender in one Greek port would write a credit note for the client who
could "cash" the note in another city, saving the client the danger of carting
coinage with him on his journey. Pythius, who operated as a merchant
banker throughout sia Minor at the beginning of the 5th century B.C., is
the first individual banker of whom we have records. Many of the early
bankers in Greek city-states were "metics or foreign residents. round
371 B.C., Pasion, a slave, became the wealthiest and most famous Greek
banker, gaining his freedom and thenian citizenship in the process.
%he fourth century B.C. saw increased use of credit-based banking in the
Mediterranean world. n Egypt, from early times, grain had been used as a
form of money in addition to precious metals, and state granaries
functioned as banks. When Egypt fell under the rule of a Greek dynasty,
the Ptolemies (332-30 B.C.), the numerous scattered government
granaries were transformed into a network of grain banks, centralized in
lexandria where the main accounts from all the state granary banks were
recorded. %his banking network functioned as a trade credit system in
which payments were effected by transfer from one account to another
without money passing.
n the late third century B.C., the barren egean island of Delos, known for
its magnificent harbor and famous temple of pollo, became a prominent
banking center. s in Egypt, cash transactions were replaced by real credit

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receipts and payments were made based on simple instructions with
accounts kept for each client. With the defeat of its main rivals, Carthage
and Corinth, by the Romans, the importance of Delos increased.
Consequently it was natural that the bank of Delos should become the
model most closely imitated by the banks of Rome.
ncient Rome perfected the administrative aspect of banking and saw
greater regulation of financial institutions and financial practices. Charging
interest on loans and paying interest on deposits became more highly
developed and competitive. %he development of Roman banks was
limited, however, by the Roman preference for cash transactions. During
the reign of the Roman emperor Gallienus (260-268 D), there was a
temporary breakdown of the Roman banking system after the banks
rejected the flakes of copper produced by his mints. With the ascent of
Christianity, banking became subject to additional restrictions, as the
charging of interest was seen as immoral. fter the fall of Rome, banking
was abandoned in Western Europe and did not revive until the time of the
crusades.

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.1. Growth of Banking in Pakistan
t the time of independence there were only two Pakistani banks, that is
Habib bank and ustralasia bank. t that time, Pakistan had 631 branches
of scheduled banks and 411 of non- scheduled banks. %he total deposits
of Pakistan banks were Rs. 800 million and advances were 198 million.
%he non- scheduled banks number reduced from 411 to 106 over the
same period. %he mass scale with withdrawal of deposits closure of
branches and migration caused a dead lock in the banking business in
Pakistan. Keeping in view the above situation government of Pakistan took
various steps to provide all kinds of facilities to the non-Muslim bankers for
restoring normal banking facilities but response was not encouraging.
fter independence it was not possible for Pakistan to set up %he Central
Bank immediately. %he Reserve Bank of ndia acted as a Central Bank of
Pakistan till 30th September, 1948. But it could not protect the interests of
Pakistan. %o remove the financial difficulties and to establish sound
banking system govt. established the State Bank on 1st July, 1948. n the
development of banking system it played very important role as a Central
Bank of the country. New branches were opened in the country with the
development of banking system. %hese banks also extended their
branches to foreign countries.

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.2. List of BANKS in Pakistan
CentraI bank
O State Bank of Pakistan
NationaIized scheduIed banks
O First Women Bank Limited
O National Bank of Pakistan
SpeciaIized banks
O ndustrial Development Bank
O Punjab Provincial Cooperative Bank
O SME Bank
O Zarai %araqiati Bank
O Khushalai Bank
Private scheduIed banks
O llied Bank of Pakistan
O rif Habib Bank Limited
O skari Bank
O tlas Bank
O Bank L Habib
O Bank lfalah
O Barclays Bank
O Samba Bank Ltd

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O Faysal Bank
O Habib Bank
O Habib Metropolitan Bank
O JS Bank
O KSB Bank
O MCB Bank Limited
O Mybank Limited
O NB Bank
O Silkbank Limited
O Soneri Bank
O United Bank Limited
O Bank Of Punjab
O Citibank
O Standard chartered Bank Ltd
O Royal Bank of Scotland Ltd
O HSBC
DeveIopment financiaI institutions
O Pak China nvestment Company Limited
O Pak Kuwait nvestment Company Limited
O Pak Libya Holding Company Limited
O Pak-Oman nvestment Company Limited
O Saudi Pak ndustrial and gricultural nvestment Company (Pvt)
Limited
O House Building Finance Corporation
O nvestment Corporation of Pakistan
O Pak Brunei nvestment Company Limited

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Investment banks
O l-%owfeek nvestment Bank Limited
O nvest Capital nvestment Bank Limited
O tlas nvestment Bank Limited
O Crescent nvestment Bank Limited
O Escorts nvestment Bank Limited
O First Credit and nvestment Bank Limited
O First nternational nvestment Bank Limited
O Fidelity nvestment Bank Limited
O slamic nvestment Bank Limited
O MZ Securities
O Orix nvestment Bank (Pakistan) Limited
O Prudential nvestment Bank Limited
O %rust nvestment Bank Limited
Discount and guarantee houses
O First Credit & Discount Corp Limited
O Prudential Discount & Guarantee House Limited
O National Discounting Services Limited
O Speedway Fordmetall (Pakistan) Limited
Housing finance companies
O sian Housing Finance Limited
O Citibank Housing Finance Company Limited
O House Building Finance Corporation
O nternational Housing Finance Limited

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'enture capitaI companies
O Pakistan Venture Capital Limited
O Pakistan Emerging Ventures Limited
O MZ Ventures
Micro finance banks
O %he First Micro Finance Bank Limited
O Khushali Bank
O Karakuram Bank
O Network Micro Finance Bank
O Pak Oman Micro Finance Bank
O Rozgar Micro Finance Bank
O %ameer Micro finance Bank Limited
O Kashaf Foundation Limited
IsIamic banks
O Dawood slamic Bank Limited
O Dubai slamic Bank Pakistan limited
O Meezan Bank Premier slamic Bank n Pakistan
O lBaraka slamic Bank
O Bankslami Pakistan Limited

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.3. History of NationaI Bank of
Pakistan
NationaI Bank of Pakistan (NBP) is one of the largest commercial
bank operating in Pakistan. t has redefined its role and has moved from a
public sector organisation into a modern commercial bank. 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 a 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, NBP
headquarters in Karachi, Pakistan with over 1,200 branches country wide.
%he bank provides both commercial and public sector banking services. t
has assets worth USD 12.293 billion in 2007.
[1]
ts subsidiaries include
NBP Capital, NBP Modaraba Management Company, NBP Exchange
Company, %aurus Securities, NBP lmaty and others.
National Bank of Pakistan is the largest commercial bank operating in
Pakistan. ts balance sheet size surpasses that of any of the other banks
functioning locally. t has redefined its role and has moved from a public
sector organization into a modern commercial bank. %he 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 a 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

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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.
n today's competitive business environment, NBP needed to redefine its
role and shed the public sector bank image, for a modern commercial
bank. t has offloaded 23.2 percent share in the stock market, and while it
has not been completely privatized like the other three public sector banks,
partial privatization has taken place. t is now listed on the Karachi Stock
Exchange.
National Bank of Pakistan is today a progressive, efficient, and customer
focused institution. t 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. %hese include NBP Karobar, NBP dvance
Salary, NBP Saiban, NBP Kisan Dost, NBP Cash n Gold.
t 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. %he Bank has expanded its range of products and
services to include Shariah Compliant slamic Banking products. For the
promotion of literature, NBP recently initiated the nnual wards 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. %he Bank is also the largest sponsor of sports in Pakistan. t
has provided generously to philanthropic causes whenever the need
arose.

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t has taken various measures to facilitate overseas Pakistanis to send
their remittances in a convenient and efficient manner. n 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. %his 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.
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 dequacy Standards under Basel framework, in the
upgradation of the % infrastructure and developing the human resources.
National Bank of Pakistan has built an extensive branch network with 1250
branches in Pakistan and operates in major business centre abroad. %he
Bank has representative offices in Beijing , %ashkent , Chicago and
%oronto . t has agency arrangements with more than 3000 correspondent
banks worldwide. ts subsidiaries are %aurus Securities Ltd, NBP
Exchange Company Ltd, NBP Capital Ltd, NBP Modaraba Management
Company Ltd, and CJSC Bank, lmaty , Kazakhstan. %he Bank's joint
ventures are, United National Bank (UK), First nvestment Bank and
NF, an sset Management Company (a joint venture with NB Bank &
Fullerton Fund Management of Singapore).
%he Bank's financial performance has been remarkable. n 2006, total
assets are estimated at PKR 635 billion, while deposits have grown to
nearly PKR 502 billion. Pre-tax profit rose to PKR 26 billion. Earnings per
share have jumped to PKR 24.01 in 2006. %he increase in profit was
achieved through strong growth in core banking income. nterest income
increased by PKR 10 billion through growth in the loan portfolio as well as

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increase in spreads. dvances increased by PKR 48 billion to PKR 316
billion. %he Bank maintains a sound loan portfolio diversified in nature to
counter the risk of credit concentration. t ranges from providing credit to
the un-banked market segment under NBP Karobar, to small and medium
enterprises, to agricultural loans, to large corporate customers.
National Bank has earned recognition and numerous awards
internationally. t has been the recipient of %he Bank of the Year 2001,
2002, 2004 and 2005 ward by %he Banker Magazine, the Best Foreign
Exchange Bank Pakistan for 2004, 2005, 2006 and 2007, Global
Finance, Best Emerging Market Bank from Pakistan for the year 2005,
Global Finance, Kissan %ime wards 2005 for NBP's services in the
agriculture field. t is listed amongst the Region's largest banks and also
amongst the largest banks in South sia 2005, %he sian Banker. t has
also been presented a Recognition ward 2004 for having a Gender
Sensitive Management by WEBCOP SH besides other awards.

I. InternationaI Offices
NBP also have branches/offices in the US, Canada, Germany, France,
Bahrain, Egypt, Bangladesh, Hong Kong, Japan, South Korea, %he
People's Republic of China, fghanistan, %urkmenistan, Kyrgyz Republic,
Kazakhstan, Uzbekistan, zerbaijan and Saudi rabia.
Mr. Saeed hmed Kazi launched most of these branches.

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II. TimeIine
O 1949 National Bank of Pakistan (NBP) was established under the
National Bank of Pakistan Ordinance of 1949 and was government-
owned. NBP acted as an agent of the central bank wherever the
State Bank did not have its own branch. t also undertook
government treasury operations. ts first branches were in jute
growing areas in East Pakistan. Offices in Karachi and Lahore
followed.
O 1950 NBP established a branch in Jeddah, Saudi rabia.
O 1955 By this time NBP had branches in London and Calcutta.
O 1957 NBP established a branch in Baghdad, raq.
O 1962 NBP established a branch in Dar-Es-Salaam, %anganyika.
O 1964 %he raqi government nationalized NBP's Baghdad branch.
O 1965 %he ndian government seized the Calcutta branch on the
outbreak of hostilities between ndia and Pakistan.
O 1967 %he %anzanian government nationalized the Dar-Es-
Salaam branch.
O 1971 NBP acquired Bank of China's two branches, one
in Karachi and one at Chittagong. t separation of East
Pakistan NBP lost its branches there. NBP merged with Eastern
Mercantile Bank and with Eastern Bank Corporation.
O 1974 %he government of Pakistan nationalized NBP. s part of the
concomitant consolidation of the banking sector, NBP acquired Bank
of Bahawalpur.
O 1977 NBP opened an offshore brain Cairo.
O 1994 NBP amalgamated Mehran Bank.

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O 1997 NBP branch in shgabat, %urkmenistan commenced
operations.
O 2000 NBP opened a representative office in lmaty, Kazakhstan.
O 2001 State Bank of Pakistan and Bank of England agree to allow
only 2 Pakistani banks to operate in the UK. NBP and United
Bank agreed to merge their operations to form Pakistan nternational
Bank, of which NBP would own 45% and United Bank 55%.
O 2002 Pakistan nternational Bank renamed itself United National
Bank Limited (UNB). %he ownership structure of the UNB remained
as before. %he only change to the shareholding structure is that UNB
had recently been privatized in Pakistan and was now owned 49%
by the Government of Pakistan and 51% by a joint foreign
consortium of bu Dhabi.
O 2003 NBP received permission to open a branch in fghanistan.
O 2005 NBP closed its offshore branch in Cairo.
O 2010 NBP opened its branch in Karaganda (Kazakhstan).
IsIamic Banking
O First slamic banking branch of NBP started its operations in Karachi
on December 15, 2006.
O %wo more branches started operations by the end of 2007 in
Peshawar and Lahore.
O t present, eight slamic banking branches are functional all over
Pakistan having Group office at Karachi, Pakistan.
O Mr. Shafiq Khan is newly appointed Group Chief of the slamic
Banking Group.
O Mufti bdul Sattar Laghari is a Shariah dvisor.
O sim Sattar (C) is the Head of Finance.

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. 'ision, Mission Statement, Core
'aIues & GoaIs
.1. 'ision Statement
%o be recognized as a leader and a brand synonymous with trust,
highest standards of service quality, international best practices and social
responsibility.

.2. Mission Statement
NBP will aspire to the values that make NBP truly the Nation's Bank, by:
O nstitutionalizing a merit and performance culture
O Creating a distinctive brand identity by providing the highest
standard of services.
O dopting the best international management practices.
O Maximizing stakeholders' value.
O Discharging our responsibility as a good corporate citizen of
Pakistan and in countries where we operate.

.3. Core 'aIues
O Highest standard of integrity
O nstitutionalizing team work and performance culture.

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O Excellence in service
O dvancement of skills for tomorrow's challenges
O wareness of social and community responsibility.
O Value creation for all stakeholders

.4. GoaIs
%o enhance profitability and maximization of NBP share through
increasing leverage of existing customer base and diversified range of
products.

.5. Objectives of NationaI Bank
Objectives are ends towards which an enterprise activity is aimed.
%he 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. %hese objectives are
O dvancing loans
O ccept deposits
O Remitting of funds
O Sale of promissory notes
O Selling and realizing property of bank claims
O nvestment or underwriting of stocks

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O Advancing Ioans
One of the main objective of NBP is advancing loans to industrialists and
traders against security of stock, debentures or other securities.

O Accept deposits
Bank provides deposit facility to its customers. %he types of deposits are
Profit and loss saving accounts
Fixed account
Current account

O Remitting of funds
%he bank provides the facility to its customers remitting large amounts of
money in the form of bank Drafts, %elegraphic %ransfer, Mail %ransfer to
where ever the customers want.

O SaIe of promissory notes
%o sell and realize the proceeds of sale of any promissory notes,
debentures, stock receipts, bounds, shares etc.

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O SeIIing and reaIizing property of bank cIaims
%o manage sell and realize all property whether moveable or immoveable
which may come in any way of the bank in satisfaction of its claim.

O Investment or underwriting of stocks
%o 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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. Management of Bank
.1. Board of Directors
I. Syed AIi Raza
Chairman Board, National Bank of Pakistan
Mr. S. li Raza is the chairman, NBP board of directors. Mr. Raza is a
graduate of London School of Economics and MSc. in dmn. Science from
the London Graduate Business Centre, City University, London. Before
joining NBP in July 2000 as the bank's president, he held a key
management position as Managing Director and Regional Head, Pakistan,
Middle East, North frica at the Bank of merica.

II. Qamar Hussain
President, NBP
Mr. Qamar Hussain is the president of NBP, the largest commercial bank
of the country. He holds an MB degree in nternational Business &
Finance from Mcgill University, Montreal, Canada and has undergone
extensive training in business leadership abroad. Mr. Hussain started his
banking career from Bank of merica N.% & S., Pakistan in the year
1981. Prior to joining NBP in 2009, he has worked with merican Express
Bank Ltd. as senior Director Global Credit New York. He has also been
associated with the Chase Manhattan Bank in Pakistan and US.

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III. Mr. Tariq Kirmani
Director
fter completion of MB, Mr. %ariq started with a multinational oil company
(Caltex) in 1969 and worked for seven years in US, UE and ustralia in
different senior management positions in marketing, operations and
finance. n 1991, Mr. Kirmani became the first Pakistani to be elected as a
company director of mentioned multinational company.

I'. Mrs. Haniya Shahid Naseem
Director
Mrs. Haniya is as MB having more than 15 years experience of working
in industrial textile, education, agriculture and social sectors of Pakistan.
She has served on board of a textile company for 5 years, having a
turnover of more than 1 billion rupees. Now she is actively involved in
administration of Pakistan Public School Multan, she is member of Multan
chamber of commerce and industry.

'. Ms. Nazrat Bashir
Director
Ms. Nazrat belongs to district management group of civil service of
Pakistan. She is masters in economics from New York University and
masters in Psychology from Peshawar University. She has attended

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various international seminars and courses including executive programs
from Kennedy School, Harvard, consolidated supervision of banks, dealing
with banking crisis, commercialization of micro finance, nti money
Laundering, instrument of financial market etc.

'I. Syed Muhammad AIi Zaman
SVP, Secretary board of Directors

.2. Senior Management
Masood Karim Shaikh SEVP & Group Chief, Corporate & nvestment
Banking Group
Shahid Anwar Khan SEVP & Group Chief, Commercial & Retail Banking
Group
Dr. Asif A. Brohi SEVP & Group Chief, Operations Group
Muhammad Sardar Khawaja SEVP & Group Chief, udit & nspection
Group
S. M. Rafique SEVP & Secretary Board of Directors
Imam Bakhsh BaIoch SEVP & Group Chief, Compliance Group
ZiauIIah Khan SEVP & Group Chief, Special ssets Management Group
Amim Akhtar EVP & PSO to the President

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Javed Mehmood EVP & Group Chief, Risk Management Group
Muhammad Nusrat 'ohra EVP & Group Chief, %reasury Management
Group
Nadeem A. Dogar EVP & Group Chief, nformation %echnology Group
Dr. Mirza Abrar Baig EVP & Group Chief, Human Resources
Management & dministration Group
Mrs. Khurshid Maqsood AIi EVP & Divisional Head Employee Benefits,
Disbursements & %rustee Division
Tahir Yaqoob EVP & Group Chief, overseas Coordination & Management
Group
Mrs. Uzma Bashir Group Chief, Organization Development & %raining
Group
Syed Farhan Ahmed Financial Controller & Divisional Head Financial
Control Division

.3. Corporate and FinanciaI Reporting framework
(Code of Corporate Governance)
%he board is fully aware of its responsibilities established by the Code of
Corporate Governance issued by the Securities & Exchange Commission
of Pakistan (SECP). %hey are pleased to give the following
declarations/statements to comply with the requirements of the Code.
1. %he financial statements (Balance sheet, Profit and Loss ccount, Cash
Flow Statement, Statement of Changes in Equity and notes forming part
thereof), prepared by the management of the bank give the information

34 | a g e

required by the Companies Ordinance, 1984 in the manner so required
and respectively give a true and fair view of the state of the bank's affairs
as at December 31, 2002 and of the results of its operations, changes in
equity and its cash flows for the year then ended.
2. Proper books of accounts have been maintained.
3. ppropriate accounting policies have been consistently applied in the
preparation of the financial statements and accounting estimates are
based on the reasonable and prudent judgment.
4. pproved ccounting Standards have been followed in preparation of
the financial statements and there is no departure from the said standards.
5. %he system of internal control is sound in design and has been
effectively implemented and monitored throughout the year. %he Board is
responsible for establishing and maintaining the system of internal control
in the bank and for its ongoing monitoring. However, such a system is
designed to manage rather than eliminate the risk of failure to achieve
objectives, and provide reasonable but not absolute assurance against
material misstatements or loss.
%he process used by the Board to review the efficiency and effectiveness
of the system of internal control includes, the following:
O %he Board has formed an audit committee comprising of three non
executive directors. %he audit committee has written terms of
reference in the form of a charter, which has been approved by the
Board of Directors. %he committee is responsible for the oversight of
the internal audit function and reviews its approach and
methodology from time to time. t also receives and reviews the
internal and external audit reports relating to the internal control,
accounts and related matters. %he committee on a continuous basis
reviews the material control weaknesses and areas of concern and
actions to be taken by the executive management to address these
issues.
O nternal audit department of the bank conducts the audit of all
branches, regions and groups at head office level on ongoing basis
to evaluate the efficiency and effectiveness of internal control system

3S | a g e

and proper follow up of irregularities and control weaknesses is
carried out.
O %he Board receives confirmations/representations from all group and
regional heads on annual basis confirming effectiveness of the
internal control system established and maintained by them within
their function.
O %he principal features of the bank's control framework include:
O %he bank has clearly defined organizational structure which supports
clear lines of communications and reporting relationships.
O %here exists a properly defined financial and administrative power of
various committees and key management personnel, which supports
delegation of authority and accountability.
O %he bank has effective budgeting system in place. nnual budget of
the bank is approved by the Board and monthly comparisons of
actual results with the budget are prepared and reviewed by the
senior management.
O %he bank has a comprehensive framework of written policies and
procedures on all major areas of operations such as Credit, %reasury
Operations, Finance, nternal audit and Compliance approved by the
Board.
O %here are no significant doubts about the bank's ability to continue
as a going concern.
O %here has been no material! Departure from the best practices of the
corporate governance as detailed in the listing regulations.
O Key operating and financial data is available in the annual report.
O %he number of board meetings held during the year were 14 and
attended by the directors as follows:
Syed li Raza 14
Dr. Waqar Masood Khan 10
Kamran Y. Mirza 8
. Razzak %abba 12
Rizwan . Keher 12
Qazi Faez ssa 10

36 | a g e

10. OrganizationaI Structure
10.1. Organogram of NBP

President & Chairman
Chief Representative PSO & Secretariat
Board of Directors
Secretary
sset & Liability
Committee
Operation
Committee
Credit
Committee
Finance Group Operation Group Corporate nvestment
Group
Regional
Operation
Officer
Operation
Dept.
% Operations
& Services
Regional
Computer
Centre
Logistic
Support
Engineering
General
Services
Staff Welfare
Swift Centres
ccounting &
Finance Dept.
Employee
nsurance
Pension
Retirement
Benefits
Four Overseas Regional

37 | a g e

Figure 10.1

Four Overseas Regional
Far East Europe &
US
Central
sia
Middle
East
Risk
Management
Group
Regional
Credit Chief
Credit Dept.
Head
udit Group
Regional
udit Office
Head Office
udit
% Planning
Development
Group
% System
Development
Networking
Software
Development
Electronic
Product &
Service
Delivery to
Operations
Group
Strategic
Planning &
Economic
Research
Group
HR
Management
Dept
HR
Management
Recruitment
/Placement
Compensation
Benefit
Personal Data
Discipline
Organizational
Development
& %raining
%raining Union ffairs Promotion
Performance
ppraisal
Goal Setting
Special
sset
Management
Retail Banking
ll Regional
Chief Officer
ll Retail
Banking

38 | a g e

10.2. OrganizationaI Structure of NBP
Chouburji Branch, Lahore.

Figure 10.2

ssistant Vice
President (VP)
Officer Grade
(OG)
Messenger
deel Hashmi Mehmood ziz
Officer Grade 1
(OGl)
Officer Grade 2
(OG)
Officer Grade 3
(OG)
Noor-ul-rfeen
Javaid khtar
mtiaz hmed
zhar wan
Riaz-ur-Raza
Bina Nosheen
Khawaja zam
mir Sheikh
Mashood Butt
Furrukh Ghaus

39 | a g e

11. Products
NBP Premium Aamdani
O Earn up to 12.25% p.a. +
O Minimum deposit of Rs. 20,000/- with maximum balance of Rs. 10
million for 5 years
O Free Demand Draft, Pay Order and Cheque Book*
O Convenience of NBP online asan Banking (for online banking
customers)
O Free NBP Cash Card (%M+Debit)
O Running finance facility up to 90%
O Profit paid every month as follows
TabIe 11.1
Year** ProIit Rates () ***
1st 11.25
2nd 11.50
3rd 11.75
4th 12.00
5th 12.25
+ Profit rates are expected
* Conditions pply
*** Expected rates are for the given year

NBP Premium Saver
PLS Saving Account
O Earn up to 8.50% p.a. +.

40 | a g e

O Minimum saving balance of Rs. 20,001/- & a maximum balance of
Rs. 1 million*.
O Free NBP Cash Card (%M + Debit).
O Convenience of NBP Online asan Banking (for online banking
customers).
O %wo debit withdrawals allowed in a month & no limit on number of
deposit transactions.
O Profit calculated on monthly and paid on half yearly basis

NBP Saiban
Home Financing
O Home Purchase
O Home Construction
O Home Renovation
O Purchase of Land + Construction
O Balance %ransfer Facility (B%F)
Product Items
Home Purchase
Home Construction
Home Renovation
Purchase of Land + Construction
Balance %ransfer Facility (B%F)

ome Purchase (ouse or Apartment) *
Financing mount Upto 35 Million
Financing Period 3 to 20 Years
Debt to Equity 85:15 (Maximum)

41 | a g e

ome Construction *

ome Construction * - Product Detail

ome Renovation *

Purchase of Land and for Construction thereon *

Advance SaIary
PersonaI Loan
O Easy installments of 1 to 60 months at your choice.
O No minimum income, collateral & insurance charges required.
O Quick processing and fastest disbursement.
O For permanent employees of Government, Semi Government and
utonomous bodies receiving salaries through NBP.

42 | a g e

NBP Offers ATM card
ATM + Debit Card
O Use it as an %M in any of the %M's in Pakistan
O Use it as Debit Card in any of the outlets with ORX POS machine
across nationwide.
O Cash withdrawal up to Rs. 20,000/- per day
O ccount Balance Enquiry
O Mini Statement (Only at NBP %M)
O PN Change facility (Only at NBP %M)

NBP Investor Advantage
Financing FaciIity for Stock Investors
O Comfortable environment for trading
O No security requirement, except for the customer's equity
O Customer's equity freely available for investment
O Equity acceptable in cash or approved shares

NBP Cash & GoId
Ready Cash Against GoId
O Facility of Rs. 20, 000/-against each 10 gms of net weight of Gold
Ornaments
O No maximum limit of cash
O Repayment after one year

43 | a g e

O Roll over facility
O No penalty for each repayment

NBP PakRemit
NBP's Internet Based Home Remittance Service
Product Information
Pakremit is an internet based Home Remittance Service.
Remitters in US can log on to our user friendly website,
www.pakremit.com and easily remit funds to Pakistan from the comfort of
their homes, in a matter of minutes.
%he service is fully secure with advance encryption application and is
available for use 24 hours a day, 7 days a week. Fees and exchange rate
have been set at competitive levels and the remitters have the ability to
track delivery of funds as well.
Process
Remitters log on to www.pakremit.com and after completing the
registration process, are able to remit funds. %he whole process takes a
few minutes.
Funds in Pak Rupees can be sent to beneficiaries, having an account with
any bank in Pakistan, including NBP. While funds are credited directly to
beneficiaries maintaining accounts with NBP, a pay order or demand draft
is couriered to other banks for their customers. Pay order or demand draft

44 | a g e

can also be couriered directly to the beneficiary's office or home, if
requested by the remitter.
Funds in US Dollars can be sent only to a Beneficiary maintaining a US
Dollar account with one of NBP's Foreign Exchange Branches.
USPs (Unique SeIIing Propositions)
1. Convenient and Fast
2. Reliable and Secure
3. vailable 24 x 7

NBP Protection ShieId
PersonaI Accident Insurance
O No documentation
O No medical required
O Premium uto Debit facility & choice of deactivation
O Coverage includes death due to:
O Natural Calamities e.g. Earthquake, Flood, Cyclone etc.
O ccident
O Riots*
O Civil Commotion*
O Strikes*
O cts of %errorism*
NBP Protection Shield
(Life is Precious)
* Provided the insured is not actively involved in these activities

4S | a g e

IsIamic Banking
Deposit Schemes
Deposit Schemes being offered by NBP's slamic Banking Branches would
include the following:
O Current Deposit Scheme
O Profit & Loss Sharing (PLS) Deposit Scheme
Current Deposit Scheme
O deal for customers looking for security of their funds along with
absolute convenience in its use, in the form of Current accounts
O Funds deposited with the bank will be utilized by the bank at its sole
discretion in Shariah acceptable avenues.
O %he Customer will have the flexibility to withdraw a part or the whole
of their balances at any time as per their requirement
O %his 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.
O Other terms, conditions and rules for Current Deposit ccounts to be
advised by the Bank at the time of opening of ccount.

Profit & Loss Sharing Deposit (PLS) Scheme
O PLS Saving Deposits Scheme will accept deposits on Mudaraba
basis, where the depositor will be Rabb-ul-Mal and Bank will be

46 | a g e

Mudarib. %he Bank will invest the deposited funds at its (Bank's) sole
discretion in Shariah acceptable avenues
O %he Depositor will have the flexibility to withdraw a part or the whole
of their balances at any time as per their requirement.
O %he 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.
O n the event of financial loss, the PLS depositors will bear the loss in
proportion of their investment.
O %he Depositors will not participate in the management of the
business of the Bank
O Other terms and conditions as well as rules for PLS Deposit ccount
to be advised by the Bank at the time of opening of ccount.

NBP Kisan Dost
AgricuIture Farming Program
O Competitive mark-up rate.
O Quick & easy processing.
O Provision of technical guidance to farmers at their doorstep.
O Wide range of financing schemes for farmers.
O Finance facility up to Rs. 100,000/- for landless farmers on personal
guarantee.
O Financing available against Pass Book, Residential / Commercial
property, Gold ornaments and paper security.
O Loan facility on revolving basis for three years (renewable on yearly
basis without obtention of fresh documentation and approval)

47 | a g e

NBP Student Loan Scheme
Pursuant to the announcement made by the Federal Finance Minister in
his 2001-2002 budget speech, a S%UDEN%S LON SCHEME (SLS) for
Education was launched by the Government of Pakistan in collaboration
with major commercial banks of Pakistan (NBP, HBL, UBL, MCB and
BL). Under the Scheme, financial assistance is provided by way of
nterest Free Loans to the meritorious students who have financial
constraints for pursuing their studies in Scientific, %echnical and
Professional education within Pakistan.

%he Scheme is being administered by a high powered committee
comprising Deputy Governor, State Bank of Pakistan, Presidents of the
commercial banks and Deputy Secretary, Ministry of Finance, Government
of Pakistan.

O %he objective of the Students Loan Scheme is to provide financial
assistance to the meritorious students of insufficient means who
have obtained 70% marks in the last public examination and are
unable to pursue their studies within Pakistan due to financial
difficulties.
O Loans facility is available to those students who are nationals of
Pakistan including Northern reas, Federally dministered %ribal
reas and zad Jammu and Kashmir and of age not exceeding 20
years for graduation, 30 years for post-graduation and 35 years for
PhD at the time of admission.

48 | a g e

O %he maximum period of repayment of loan is 10-Years from the date
of disbursement of first installment .%he borrower shall repay the
loan in monthly installment after six months from the date of first
employment or one year from the date of completion of studies,
which ever is earlier

O Loan is granted only to those students who have been admitted to
the approved under noted ffiliated Colleges /Universities.
O Under the Scheme, loans are available in the following subjects.
Engineering
Electronics
Oil Gas & Petro-Chemical %echnology
griculture
Medicine
Physics
Chemistry
Biology, Molecular Biology & Genetics
Mathematics
Other Natural Sciences
DW and slamic Jurisprudence (LL.B/LL.M Sharia)
Computer Science/nformation System and %echnology including
hardware.
Economics, Statistics and Econometrics
Business Management Sciences
Commerce

49 | a g e

O %he facility under this Scheme is restricted to the studies in the
above-mentioned subjects only or such other subjects as may be
approved by the pex Committee from time to time.
O %he amount of loans under the Scheme covers the cost of fee,
books and boarding for the entire period of study.
O Schedule Fee and boarding expenses excluding meal charges is
disbursed directly to the University/College.
O %he amount of procurement of textbooks is disbursed directly to the
student.
O %he students desirous of availing loan under the Scheme may apply
on prescribed Form for financial assistance subject to he or she has
got admission on merit through normal procedure in the Universities/
Colleges afore-mentioned.
O pplication Forms are available from the designated branches.
O pplicants are required to submit/send their applications duly
completed in all respect, to the designated branches indicated
against Universities/ Colleges.
O %hose students who have already availed this facility last year need
not to apply.

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12. Services
Demand Draft
f you are looking for a safe, speedy and reliable way to transfer money,
you can now purchase NBP's Demand Drafts at very reasonable rates.
ny person whether an account holder of the bank or not, can purchase a
Demand Draft from a bank branch.

Swift System
%he SWF% system (Society for Worldwide nter bank Financial
%elecommunication) has been introduced for speedy services in the area
of home remittances. %he 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. %he SWF% Center is
operational at National Bank of Pakistan with a universal access number
NBP-PKK. ll NBP overseas branches and overseas correspondents
(over 450) are drawing remittances through SWF%.
Using the NBP network of branches, you can safely and speedily transfer
money for your business and personal needs.

S1 | a g e

Letter of Credit
NBP is committed to offering its business customers the widest range of
options in the area of money transfer. f you are a commercial enterprise
then their Letter of Credit service is just what you are looking for. With
competitive rates, security, and ease of transaction, NBP Letters of Credit
are the best way to do your business transactions.

TraveIer's Cheque
NegotiabiIity Pak Rupees %raveler's Cheques are a negotiable instrument
'aIidity %here is no restriction on the period of validity
AvaiIabiIity t 700 branches of NBP all over the country
Encashment t all 400 branches of NBP
Limitation No limit on purchase
Safety NBP %raveler's Cheques are the safest way to carry our money

Pay Order
NBP provides another reason to transfer customer's money using their
facilities. %heir pay orders are a secure and easy way to move customer's
money from one place to another. nd, as usual, their charges for this
service are extremely competitive.

S2 | a g e

Issuance of Pay order
1. for NBP ccount Holder
Rs. 50/- (Flat)
2. for NBP Non-ccount Holder
Rs. 100/- (Flat)
Rs. 25/- (Flat) from student for payment of fee favoring educational
institution
Issuance of dupIicate Pay order
1. for NBP ccount Holder
Rs. 100/- (Flat)
2. for NBP Non-ccount Holder
Rs. 150/- (Flat)

MaiI Transfers
Move your money safely and quickly using NBP Mail %ransfer service.
nd they also offer the most competitive rates in the market.

S3 | a g e

Foreign Remittances
%o facilitate its customers in the area of Home Remittances, National Bank
of Pakistan has taken a number of measures to:
O ncrease home remittances through the banking system
O Meet the SBP directives/instructions for timely and prompt delivery
of remittances to the beneficiaries
New Features
%he existing system of home remittances has been revised/significantly
improved and well-trained field functionaries are posted to provide efficient
and reliable home remittance services to non-resident Pakistanis at 15
overseas branches of the Bank besides Pakistan nternational Bank (UK)
Ltd., and Bank l-Jazira, Saudi rabia.
O Zero %ariffs: NBP is providing home remittance services without any
charges.
O Strict monitoring of the system is done to ensure the highest
possible security.
O Special courier services are hired for expeditious delivery of home
remittances to the beneficiaries.

Short Term Investment
NBP now offers excellent rates of profit on all its short term investment
accounts. Whether you are looking to invest for 3 months or 1 year, NBP's
rates of profit are extremely attractive, along with the security and service
only NBP can provide.

S4 | a g e

NationaI Income DaiIy Account (NIDA)
%he scheme was launched in December 1995 to attract corporate
customers. t is a current account scheme and is part of the profit and loss
system of accounts in operation throughout the country.

Effective 23rd December 2004
NationaI Income DaiIy Account (NIDA)
SIab Rate
Rs. 2 Million & above but below Rs. 25 Million 1.00 %
Rs.25 Million & above but below Rs .50 Million 1.10 %
Rs.50 Million & above but below Rs.100 Million 1.30 %
Rs.100 Million & above but below Rs. 250 Million 1.50 %
Rs.5000 Million & above 2.75 %

SS | a g e

Equity Investment
NBP has accelerated its activities in the stock market to improve its
economic base and restore investor confidence. %he bank is now
regarded as the most active and dominant player in the development of the
stock market.
NBP is invoIved in the foIIowing:
O nvestment into the capital market
O ntroduction of capital market accounts (under process)
NBP's involvement in capital markets is expected to increase its earnings,
which would result in better returns offered to account holders.

CommerciaI Finance
Let them heIp make your dreams become a reaIity
%heir dedicated team of professionals truly understands the needs of
professionals, agriculturists, large and small business and other segments
of the economy. %hey are the customer's best resource in making NBP's
products and services work for them.

S6 | a g e

Trade Finance Other Business Loans
O gricultural Finance
O Corporate Finance
AgricuIturaI Finance
NBP provides gricultural Finance to solidify faith, commitment and pride
of farmers who produce some of the best agricultural products in the
World.
AgricuIturaI Finance Services
"I Feed the WorId" program, a new product, is introduced by NBP with
the aim to help farmers maximize the per acre production with minimum of
required input. Select farms will be made role models for other farms and
farmers to follow, thus helping farmers across Pakistan to increase
production.
AgricuIturaI Credit
%he agricultural financing strategy of NBP is aimed at three main
objectives
O Providing reliable infrastructure for agricultural customers
O Help farmers utilize funds efficiently to further develop and achieve
better production
O Provide farmers an integrated package of credit with supplies of
essential inputs, technical knowledge, and supervision of farming.

S7 | a g e

AgricuIturaI Credit (Medium Term)
O Production and development
O Watercourse improvement
O Wells
O Farm power
O Development loans for tea plantation
O Fencing
O Solar energy
O Equipment for sprinklers
Farm Credit
NBP also provides the following subsidized with ranges of 3 months to 1
year on a renewal basis.
O Operating loans
O Land improvement loans
O Equipment loans for purchase of tractors, farm implements or any
other equipment
O Livestock loans for the purchase, care, and feeding of livestock
Production Loans
Production loans are meant for basic inputs of the farm and are short term
in nature. Seeds, fertilizers, sprayers, etc are all covered under this
scheme.

S8 | a g e

Corporate Finance
Working CapitaI and Short Term Loans
NBP specializes in providing Project Finance Export Refinance to
exporters Pre-shipment and Post-shipment financing to exporters
Running finance Cash Finance Small Finance Discounting & Bills
Purchased Export Bills Purchased / Pre-shipment / Post Shipment
gricultural Production Loans
Medium term Ioans and CapitaI Expenditure Financing
NBP provides financing for its clients' capital expenditure and other long-
term investment needs. By sharing the risk associated with such long-term
investments, NBP expedites clients' attempt to upgrade and expand their
operation thereby making possible the fulfillment of their clients' vision.
%his type of long term financing proves the bank's belief in its client's
capabilities, and its commitment to the country.
Loan Structuring and Syndication
National Bank's leadership in loan syndicating stems from ability to forge
strong relationships not only with borrowers but also with bank investors.
Because they understand their syndicate partners' asset criteria, they help
borrowers meet substantial financing needs by enabling them to reach the
banks most interested in lending to their particular industry, geographic
location and structure through syndicated debt offerings. %heir syndication
capabilities are complemented by their own capital strength and by
industry teams, who bring specialized knowledge to the structure of a
transaction.

S9 | a g e

Cash Management Services
With National Bank's Cash Management Services (in process of being set
up), the customer's sales collection will be channelled through vast
network of NBP branched spread across the country. %his will enable the
customer to manage their company's total financial position right from your
desktop computer. %hey will also be able to take advantage of NBP
outstanding range of payment, ejection, liquidity and investment services.
n fact, with NBP, you'll be provided everything, which takes to manage
your cash flow more accurately.

InternationaI Banking
National Bank of Pakistan is at the forefront of international banking in
Pakistan which is proven by the fact that NBP has its branches in all of the
major financial capitals of the world. dditionally, NBP have recently set
up the Financial nstitution Wing, which is placed under the Risk
Management Group. %he role of the Financial nstitution Wing is
O %o effectively manage NBP's exposure to foreign and domestic
correspondence
O Manage the monetary aspect of NBP's relationship with the
correspondents to support trade, treasury and other key business
areas, thereby contributing to the bank's profitability
O Generation of incremental trade-finance business and revenues

60 | a g e

NBP offers
O %he lowest rates on exports and other international banking products
O ccess to different local commercial banks in international banking

61 | a g e

13. GeneraI Banking
General banking area is also call the operations group. t consist on
following section
O Accounts Section
O Remittances
O CIearing System
O Government Receipts
O Consumer and RetaiI Banking
O Lockers

13.1. Accounts section
ccounts Department of the bank can be considered the most
important department. %his 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.
ctually 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. fter this, merging stage comes, after which a proof list is
printed out. %his is the stage, where ccounts Department starts
performing its function. Proof list is checked by the ccounts
Department.
%his section performs the following functions:
Opening of ccounts

62 | a g e

ssuance of cheque books
Closing of accounts
Payment of Cheques

Types of accounts
Following types of accounts are open in NBP
O Saving account
O Current or demand account
O Fixed account

Saving account (PLS)
%his 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. %he cash
reserve ratio is typically low them the current account because the
withdrawals against this account is very low. %he minimum balance for this
account is Rs.100 and interest rate is

Current or demand account
%hese 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. %he cash

63 | a g e

reserve ratio for this account is very high. %he 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.
%hose people who have surplus funds and want to have save investments
deposit the amount in the fixed account.
%he 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. %he rates on this
type of deposits are higher than the saving bank accounts. %he 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.
%he 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. %he 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 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. n account can be opened as:
1) n individual account

64 | a g e

2) Joint account
3) Proprietorship account
4) Limited company account
5) Partnership
6) Club, society, association and trust

Information Required by the Bank
Name
ddress
%elephone No.
Currency of ccount
Nature of Business
Country of Residency
Special instructions regarding the account
Signatures

Documentation In case of Iimited company accounts:
Photocopy of National dentity Card of each director
pplication form
Copy of company's memorandum and articles of association
List of directors
Copy of board resolution
Certificate of incorporation
%heir signature cards
Certificate to commence business

Documentation In case of Partnership Account
pplication form

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copy of partnership deed
Signature cards of partners
Registration certificate copy
copy of National dentity Card of each partner
Documentation In case of CIub, Society, Association or Trust
pplication 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.
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
fter 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.
cheque book may be of 20 (PLS), 25, 50 or 100 leaves (current /C).Rs.
4.50 per leaf as excise duty is charged to the customer.
cheque book register is maintained by the office. n this register, the
cheque book inventory, cheque books issue are recorded.

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Loose Cheques
f 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
t is bank's primary function to repay the money required for its
customer's account usually by honouring his cheques. t is a contractual
obligation of a banker to honour its customer's 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
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 CIosing an Account
%he customer can close the account. Customer is required to submit
an application for closing the account. %hen 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 ccount Closing File. Remaining leaves of
cheques will also be collected from the customer.

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The activities of Accounts Department can further be divided as:
O Routing of expenses vouchers
O Preparation of daily activity reports
O Preparation of weekly and monthly statements
O Preparation of statements for tax purpose

Routing of Expenses
Vouchers of all expenses and material purchases are routed out
through this department. s 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, rent of the building, lease
instalments 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 DaiIy Activity Reports
s far as the daily activity reports of this department are concerned, these
include the following heads:
Voucher collecting of
O Loan transactions
O General ledger transactions
O Foreign currency related transactions
O Fixed deposit related transactions
%he checking is on daily basis.

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Preparation of DaiIy, WeekIy MonthIy and AnnuaI Statements
DaiIy Statements
%hese statements are sent daily to Main Office Karachi. %hese are:
O Daily ffair Statement, which is same as Balance Sheet
O Statement of ncome and Expenditure, which includes the details of
income generated and expenses incurred by the bank.

WeekIy Statements
%hese statements are generated on weekly basis for the purpose of
sending it to Head Office. %hese also include:
O Statement of affair
O Deposit and advances position of the bank

MonthIy Statements
%hese statements are prepared on monthly basis and also sent to Head
Office (Qatar). %hese include:
O Provisional statement of income and expenses. %his statement
adjusted for accruals and pre-payments.
O Monthly Balance Sheet and ncome Statement
O Comparative Statement

Statements for Tax Purpose
%he department also prepares two statements for the purpose of paying
tax on monthly and annual basis. %hese statements are generated for the
purpose of submitting to Central Board of Revenue. %hese are:
Statement of deduction of income chargeable under the head salary under
Section 53 (%ax deducted at source) Withholding %ax from the payments

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made to vendors, suppliers and other parties providing various services.
%he rate of withholding tax is as follows
O for suppliers 2.5%
O for other parties 5%

13.2. Remittances Section
Remittances can be made through:
O nstrumental transfer
O Electronic transfer

a. InstrumentaI Transfer
nstrumental transfers are following

I. Demand Draft
t 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. %he person to
those persons, who have been duly authorized to act on his behalf, should
sign this application form. n advice is prepared and two copies of this
advice are sent to the Head Office. %he bank charges 3% withholding tax
and commission according to the rate list (minimum is Rs. 200).

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II. Pay Order
t is an instrument, which is payable in demand and only
presentable in city. Pay order is also called the banker's cheque drawn
upon the issuing bank itself. t is not negotiable and therefore, bankers
tend to cross the instrument "Payee's account only to avoid the possibility
of dealing with instruments with forged endorsement. %he pay order
is issued favouring individuals, commercial concerns and 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.

III. Pay SIip
t 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.

I'. CaII deposit
Call deposit are not actual deposits of bank. t is in fact the liability of
the bank.
Call deposit are ofently prepaid by the bank for contractors PROCEDRE :**
FoIIowing steps are invoIved
1) Depositor fills the credit vouchers for call deposit. He writes the following
information
O Name of company
O mount
O Date
2) He deposits the cash along with filled voucher in the cash department

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Encashment of CD
For the encashment of call deposit needed
O 5 rupee stamp
O %wo signature of customer on the back side of CD
O %oken issued
O ccountant make entry in the CD register show that it has returned

b. EIectronic Transfer
Electronic transfer is of following types

I. TeIegraphic Transfer
t is the message, which is sent from one branch to another on the
order of payer to payee through wire. t 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 beneficiary's bank account. s such remitting office is
not required to issue any instrument payment to the remitter for delivery to
the beneficiary.

Issuance and Payment of TeIegraphic Transfer Outgoing
pplication 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 customer's account if he is the account holder.
%he amount of %elegraphic %ransfer should be written on the form. %he
amount is transferred to beneficiary's account in the other bank. n
advice is given to the customer but application is filled in the record of the
bank.

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f the beneficiary is not the account holder of DBL, bank credits a
%elegraphic %ransfer, payable account and when payment is made to the
beneficiary, %% payable account is debited.

Issuance and Payment of TeIegraphic Transfer Incoming
When a %% is received then an entry is passed in %% incoming register
after verifying the test. When a person comes and wants to encash his %%,
bank checks the statements of that person. f the bank finds any account
credited to the person's account against %%, bank prepares a voucher for
this payment against that %%. %he customer then presents that certificate
to the cash counter and collects money.

II. MaiI Transfer
t is the same like %%, but in this type, the message is sent
through mail rather than telex. %he procedure is same as %%, but the
advice is sent through mail rather than wired.

III. TraveIers cheques (TC)
%hese are also called TC. %raveler's 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. n practice, they are
acceptable in payments of accounts on board ship, at hotels and in stories.
%hey are in form of a draft. %hey should be so signed immediately on issue
and place is provided on the cheque for the signature of the beneficiary on
its.

I'. Lockers service
National bank of Pakistan also provides lockers facility in the country. %he

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Lockers issued only to the depositors. No lockers are issued to any
unknown person. %he dual control system is used for lockers. %he officer
has master key to apply on the locker but he cannot open the locker of any
person. %he 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. f 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. n 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.

'. BiIIing And Government Receipt/Payment
%his department is performing following functions
O Collection of utility bills
O Collection of dues of education institution
O Payment of salaries
O Payment of zakat
O Payment of pension

13.3. CIearing Department
%he major function of Clearing Department is to receive the cheques,
which are drawn on some other bank. %he customer can get the money in
his account at NBP, from the cheques drawn on another bank. %he 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.

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Procedure for CIearing the Cheques
O Pay-in SIip
%he customer fills pay-in slip. %his slip is just like deposit slip. %he cheque
number, date, amount and account number must be written on this slip.

O Stamping and Scrutinizing
%he 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.
%he original cheque will be marked with two stamps.
National bank of Pakistan
Clearing Stamp
t the end of day, all cheques are counted and then scrutinized in bank-
wise and sent to the Clearing House.

13.4. Computer Section
%hrough this department bank has make its way to enter in twenty first
century. %his department is playing a very important role in making the
banking procedures faster and helping the bank for providing new services
to its customers. %his division provided the bank with online branches,
systems to make the whole procedure foolproof.

Types of Branches
%here are three types of Branches in all over Pakistan of NBP

1. OnIine branches
%he branches, which are directly, link with central computer S-400,
through wide area networking through fibre optics. %hese branches have

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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 slamabad and two in Multan
and two each in other regional head offices.

2. Batch Branches
%he 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 utomated
System based (BS) on UNX, Branch ntegrated System(BS) based on
FoxPro in Karachi mostly branches are facing this problem. BS 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. %he
database in head office is also based on this system.

3. ManuaI Branches
%he branches where all transactions are carried out manually and records
are maintained on registers usually stored in big wardrobes.
ll branches in Pakistan report to their regional head office regarding their
daily transaction. n 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. s day-to-day,
activities of all branches are recorded in a central computer.

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Evening Data Receiving Centre
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 %ransaction Report. Clerk incharge register all diskettes and
manual in registers called "job booking register one for each of two type of
data. %hese floppies and manual are bring in by riders. %here are fourteen
riders in total who bring information form all branches located in
Karachi region.

Data Entry Department
%he next task after receiving the data is to enter that data in to a computer.
%he floppy disk is directly inserted in the computer. %he program in used is
based on "COBOL language. %his 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. %his computer is
attached with the terminal of central computer. %he 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.

Defects and Error HandIing
Errors of different origin occur when the data goes to central computer.
Sometime retrieving data from the system (BS, BBO, and BS), other
than used in HO (EBS) also caused errors. Other errors include
Unmatched (%his 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

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person in charge. n the end of day print out of the data enter in central
computer is taken. ny ncomplete 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 WS% which is sent to State Bank of
Pakistan.

Consumer and retaiI banking section
Consumer and retail banking department is offering two facilities to their
customers
1) NBP Advance SaIary
2)NBP Ghar Ghar TeIevision

NBP Advance saIary
NBP advance salary facility allows you to draw three months salary in one
go.
O NBP advance salary offers you
O %ake up to three months advance salary take home
O Fastest processing and immediate disbursement
O Easiest facility for 1 to 36 months
O Minimum documentation

EIigibiIity
%his facility will be available to permanent employee of
O Federal and provincial Govt.
O Semi Govt, autonomous, semi autonomous, local bodies and Govt
corporations
O Other corporations and organizations approved by NBP

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Those who quaIify for this scheme shouId have
O %hree years of service age remaining
O Salary account at NBP

Limit of Finance
%hree net take home salary
Customer must have account with national bank which show last three
months salary in his/her account

CaIcuIation of Iimit
verage of three months and minimum salary which ever is less
taken it as base and multiply it by three

Maximum duration of Ioan
%hree years is max duration.
Requirements are
O %hree months salary certificate
O NC photocopy
O uto roll over form
O pplication form
O B-12
O %hree undated cheques
O nnexure C
O nnexure D
O ccount opening form
O Procedure
fter filling the application customer signed it with his salary-
disbursing officer then under taking is officer approving it. Open the

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account that is calls
separate loan account, which is once Debit and many time credit.

NBP Ghar Ghar TeIevision
NBP offering the customer to get the television on lease base

EIigibiIity
Four categories are there
1) Lean of account
2) Lean of guarantor account
3) NationaI saving certificates
4) Guarantor of NBP

Lean of account
Here the amount of customer account is pledge and customer can't
DR it until the expiry of limit

Lean of guarantor account
%he person who is taken the guarantee of that customer his account is
marked as lean and pledges it until the expiry of instalments.

NationaI saving certificates
%hree types of certificates
O Defence saving certificates
O Special saving certificates
O Regular saving certificates
Every certificate has its own face value. %he 75% of that valve is marked
as lean.

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Guarantor of NBP
%he employee of national bank can give the guarantee of that
customer. %he procedure is same his or her account is marked as lean

Duration of scheme
%wo types of duration
O For one year
O For two year

Product suppIy
Product is supply by L.G electronic at the customer address

Products
Different products are offered by L.G such as
O %elevision
O Monitors
O ir conditioner
O DVD
O VCD

Documents
Documents required by the banks are
a) pplication form
b) B-12
c) NC photocopy
d) Delivery order
e) greement
f) Letter of hypothecation

81 | a g e

g) damantly bound
h) Letter of acceptation and satisfaction

For NBP empIoyees
a) uthorization certificate
b) Guarantee
c) Salary certificate

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14. Work Done By Me
Major activities performed during my internship program are as follows;

14.1. Account Opening Department
n thi s department, gai n the practi cal knowl edge about openi ng
account. %hi s department deal s wi th openi ng current and savi ng
account for i ts customers and al l matters regardi ng there of. %he
customers opening current and saving accounts can be categorized as
following.
O ndividual
O Firm
O Company
O %rust
O Staff
O Others

Opening Accounts
n order to open an account, fi rst of al l the customers have to fi l l
a form prescri bed by the bank. %he per son i s r equi r ed t o
br i ng some r ef er ence or i nt r oduct i on f or openi ng t he
account . ntroducer may be the person who has any account with
NBP.Some i mpor t ant i nf or mat i on r egar di ng i nt r oducer e. g.
t he name and account number of t heintroducer is written on the
space provided on the specimen signature card. %hen in order to find out
whether he is a true introducer or not, a letter is sent to him thanking him
for this introduction so that anything wrong may come into notice. %here

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are different requirements for different types of accounts and
accountholders.

Deposits
%he procedure undertaken upon receiving deposits from the customers is
as follows:
O Examining the deposit slip to ensure that the name and the account
numbers are clearly indicated.
O Counting the cash and cheques and agree the total with the amount
on the deposit slip.
O fter that the pay in slip is validated for cash transaction and transfer
and clearing transfer as appropriate before the counterfoil is
handed over to the customer.
O Cheques si gned by di rectors, partners or empl oyees of a
company, drawn i n favour of them and credited in their account
in the bank are to be scrutinized.

WithdrawaIs
Cheques can withdraw amount. %he withdrawals can be made only at the
branch where the account is maintained. %he officer under his full
signature authorizes all cash withdrawals. No third party wi thdrawal i s
permi tted. n current account, the bank does not offer any
i nterest. We can deposit or withdraw any amount during banking hours.

Issuance of Cheque book
%he account hol ders request for the new Cheque book by
presenti ng the requi si ti on sl i p along with the authority letter to the
concerned office. His signatures are verified before giving him a new

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Cheque book. %he presence of the account hol ders i s compul sory
to get a new Cheque book. But if he sends a third person to get his
Cheque book then the procedure is as follows;
O n authority letter is given to the third party by the accountholders.
O %he accountholders verify the signature of the third person on that
authority letter.
O %he bank officer gets the signature of that third person to confirm
whether he is the same to whom the accountholder has sent.
O %he bank issues the new cheques book and authority letter is kept
buy the bank.

14.2. CIearing Department
n this department, have worked for two weeks. Each branch receives the
cheques from all of i ts customers, cheque number, name of hol der
and amount of cheque i s entered i n the system and makes the
l ots of these cheques. Branch sends these cheques to the NF%
where a clearinghouse exits. n this clearinghouse the representatives
receive their cheques and go back to their bank's main branch. %hen t he
mai n branch sends these cheques to thei r rel evant branches
where the val i di ty of these cheques is verified and the accounts of the
relevant clients are affected.
%he statement of cl eari ng was submi tted before 1.00 P.M. dai l y.
%he whol e procedure of clearing is completed within two days.

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14.3. Deposit Department
Deposits are backbone of the bank. %o receive deposit is one of the basic
functions of all commercial banks. NBP does not receive these deposits for
safe keeping purpose only but they accept deposits as debts. When a
bank receives deposit from a customer, the relationship of a debtor and
creditor is established where the customer becomes the creditor and the
bank a debtor. When the bank receives the amount for deposits as a
debtor, it becomes the owner of it. t may, therefore, use it, as it deems
appropriate. But there is an implicit agreement that the amount will be paid
back by the bank to the depositor on demand or after a specific time.
%here are two major types of accounts.
I. Current Account
Deposit in current account is termed as current deposits. %hese are
repayable to the customer whenever they are demanded. When a banker
accepts a demand deposit, he incurs the obligation of paying all the
cheques etc. drawn against him to the extent of the balance of the
account. Because of their nature, these deposits are treated as current
liabilities by the bank. Bankers in Pakistan do not allow any profit on these
deposits and customers are required to maintain the minimum balance,
failing which services charges are deducted from such accounts.
EIigibiIity
ll Pakistan's Resident/Non-Resident, individuals (Single-jointly)
companies/firms etc. can open and operate the account. ny foreign
National ndividuals (Single-Jointly) having valid Resident Pakistan
VS/Worker permit can open and operate the account Requirements for
Opening of ccount Duly filled prescribed /C opening form ttested

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photocopy of N..C/Passport of ccount Holder(s), Proprietor, Partners,
Directors and office Bearers as the case may be
Features
O ccount can be opened with Minimum Balance Rs.5000/- with no
maximum limit.
O Checking account
O No profit is paid
O Service Charges Rs.300/- if average balance is less than Rs.5000/-
during half year
O Statement of ccount dispatched on half yearly basis or a requested
O %here is no restriction for withdrawals of amount and number of
cheques

II. PLS-Saving Bank Account
%he bank's profit and losses are shared with the customer, as per rate
declared by the bank at the end of every half-year, under this account
EIigibiIity
O ll Pakistan's Resident/Non-Resident can open and operate the
ccount.
O Foreign National having valid Resident Pakistan VS can open and
operate the ccount.
O Duly filled prescribed /C opening form.
O Photocopy of National identity Card (Resident Pakistan)
O %wo passport size photographs for shaky Signatures/%humb
mpression (Resident Pakistan)

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O Photocopy of Passport with page bearing Resident Visa of Pakistan
(Foreign Nationals)

Features
O ccount can be opened with Minimum Balance of Rs.1000/- with no
maximum limit
O Checking account
O Profit is calculated on half yearly basis i.e. on minimum balance of
Rs.10000/- and above from 1
st
day to the last day of the month.
O Service Charges Rs.300/- if average balance is less than Rs.5000/-
during half year.
Account Opening Procedure
%he customer fills the ccount opening Form (OF). One consolidated
OF is used for every type of ccount. t also contains the list of
documents to be attached with it. n introducer is required for opening of
ccount that introduces the customer in the bank. fter filling the OF and
attachment of necessary documents, customer and introducer sign it in the
presence of concern officer. specimen signature called (SS Card) is filled
by the customer. prescribed form CD-50 is obtained if the customer sign
in shaky hand writing puts a thumb impression and sign in capital letters.
One is pasted on OF, second is for SS Card and third is handed over the
customer the daily attested by the officer opening the account. %his third
photograph has the account number and the name of customer. %he
customer has to bring this photograph each time encash the Cheque. CD-
50 is countersign by the introducer particulars of ccount are noted in
account open and close register and feeding computer. Customer deposits

88 | a g e

at least Rs.5000/- in case of current account and Rs.1000/- in case of
saving account as initial deposit. Cheque book requisition Form is
supplied to him/her. Customer signature on it is verified and Cheque series
is noted on it. Cheque book issue charges are recovered and entry is
made in Cheque book register that has separate folios for profit loss
sharing saving bank account (PLS-SB /C), current deposit /C (CD /C)
etc. f the party requests the issuance of Cheque book in the absence of
requisition slip, it is obtain on form B. f manager knows the customer, he
gives the remarks, "Personally know to me and sign on the face of form. f
he does not know the client, an indemnity is obtained on the reverse of
form B from another account holder who is the regular customer and
satisfactory balance. ntimation regarding loss of requisition slip is obtained
in writing and signatures of client are verified.

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15. Ratio AnaIysis
Ratio FormuIa 200 2010

Liquidity Ratio
Current Ratio Current sset 0.68 0.61
Current Liabilities
Quick Ratio Current sset nventory 0.68
0.61
Current Liabilities

Debt Ratio
Debt Ratio %otal Liabilities 87.4% 87.6%
%otal ssets

ProfitabiIity Ratio
EPS Earning available to common stockholder 13.05 13.05
No. of shares of common stock outstanding
RO Earning available to common stockholder 1.9% 1.7%
%otal sset

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Ratio FormuIa 200 2010

Liquidity Ratio
Working Capital C. ssets C. Liabilities 253399886
335080486

Activity Ratio
verage Collection ccount Receivable 92 days 95 days
Period verage Sales per Day
%otal sset Revenue 0.083 0.085
%urnover %otal sset

Debt Ratio
%ime nterest Earning before interest & taxes 1.34 1.37
Earned Ratio nterest
Debt to %otal %otal Debt 5.9% 2.72%
sset Ratio %otal sset

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ProfitabiIity Ratio
Gross Profit Revenue Expense 48.1% 48.9%
Margin Revenue
Operating Profit Operating Profit 27.3% 27.6%
Margin Revenue
Net Profit Earning available for common stockholder 22.5% 20%
Margin Revenue
Return on Earning available for common stockholder 18.7% 17%
Common Equity Common stock equity

Market Ratio
P/E Ratio Market price per share of common stock 5.67% 6.44%
Earning per share
Book value / Common Stock Equity 69.97 77.12
Share No. of shares of common stock outstanding
M/B Ratio Market Price per share of common stock 1.06 1.09
Book Value per share of common stock

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16. Working
Rupees in (000)
Current Asset 2010 200
dvances (short-term) 356324444 366145638
Cash & Balance 115442360 115827868
Balance with other banks 30389664 28405564
Lending to financial institution 23025156 19587176
TotaI 525181624 529964246

Current LiabiIities
Bills payable 8006631 10621169
Borrowings 20103591 45278138
Deposits & other accounts 832151888 727464825
TotaI 860262110 783364132

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1. AnaIysis of FinanciaI Ratios
Rupees in (000)
1.1. Liquidity Ratio
Working CapitaI
Current ssets Current Liabilities

200 529964246 783364132 = 253399886
2010 525181624 860262110 = 335080486

Figure 1.1.3

4L+08 3L+08 2L+08 1L+08 0
2009
2010
Work|ng Cap|ta|
Worklng CaplLal

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Interpretation
t measures the amount of day by day operating liquidity to the business.
Here working capital -335080486 shows a decreasing trend.

Current Ratio
Current sset
Current Liabilities

200 529964246 0.68
783364132

2010 525181627 0.61
860262110
Figure 1.1.1

Interpretation
036 038 06 062 064 066 068 07
2009
2010
Current kat|o
CurrenL 8aLlo

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t shows how much current asset will be able to meet current liabilities.
Here current ratio 0.61 shows a decreasing trend.

Quick Ratio
Current sset nventory
Current Liabilities

200 529964246 0 0.68
783364132

2010 525181627 0 0.61
860262110
Figure 1.1.2

Interpretation
t shows more liquidity / liquid state of the organization. Here quick
ratio 0.61 shows increasing trend.
036 038 06 062 064 066 068 07
2009
2010
;u|ck kat|o
Culck 8aLlo

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1.2. Debt Ratio
Debt Ratio
%otal Liabilities
%otal ssets

200 825676384 87.4%
944582762

2010 906528852 87.6%
1035024680
Figure 1.2.1

Interpretation
Debt ratio measures proportion of total assets financed by firm's creditors.
%his 87.6% higher ratio shows greater amount of other people's money
being used to generate profit.
8730 8733 8740 8743 8730 8733 8760 8763
2009
2010
ebt kat|o
uebL 8aLlo

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Time Interest Earned Ratio
Earning before interest & taxes
1

nterest
200 54433800 1.34
40489649
2010 62002644 1.37
45250476
Figure 1.2.2

Interpretation
t measures bank's ability to make contractual interest payment. Value of
at least 3 and preferably closer to 5 is good. Bank shows less value but
better than previous year.

1
Pere L8l1 ls calculaLed by subLracLlng admlnlsLraLlve and oLher expenses from revenue
2009 L8l1 77947697 23313897 34433800
2010 L8l1 88472134 26469490 62002644

132 133 134 133 136 137 138
2009
2010
@|me Interest Larned kat|o
1lme lnLeresL Larned 8aLlo

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1.3. ProfitabiIity Ratio
Earning per share (EPS)
Earning available to common stockholder

200 17561846 13.05
1345463

2010 17563214 13.05
1345463
Figure 1.3.1

Interpretation
EPS represents the no. of dollars earned during period on behalf of each
outstanding share of common stock. n both years it is same.
0 2 4 6 8 10 12 14
2009
2010
Larn|ng per Share
Larnlng per Share

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Return on TotaI Asset (ROA)
Earning available to common stockholder
%otal sset

200 17561846 1.9%
944582762

2010 17563214 1.7%
1035024680
Figure 1.3.2

Interpretation
t indicates a firm's ability to efficiently allocate and manage its resources
but ignores the firm's liability. Here in 2010 the 1.7 % RO shows
decreasing trend.
160 163 170 173 180 183 190 193
2009
2010
keturn on @ota| Asset
8eLurn on 1oLal AsseL

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Gross Profit Margin
Revenue Cost
Revenue
200 77947697 - 40489649 37458048 48.1%
77947697 77947697
2010 88472132 - 45250475 43221657 48.9%
88472132 88472132

Figure 1.3.3

Interpretation
t measures percentage of each sales dollar remaining after bank has paid
its initial expenses. n 2010 it shows increasing trend.

4760 4780 4800 4820 4840 4860 4880 4900
2009
2010
ross prof|t Marg|n
Cross proflL Margln

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Operating Profit Margin
Operating Profit
Revenue
200 21300173 27.3%
77947697
2010 24415119 27.6%
88472134

Figure 1.3.4

Interpretation
t measures the %age of each sales rupee remaining after all cost &
expenses other than interest, taxes and preferred stock dividend are
deducted. n 2010 it shows an increasing trend.

2710 2720 2730 2740 2730 2760 2770
2009
2010
perat|ng rof|t Marg|n
CperaLlng roflL Margln

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Net Profit Margin
Earning available for common stockholders
Revenue
200 17561846 22.5%
77947697
2010 17563214 20%
88472134
Figure 1.3.5

Interpretation
Measures the %age of each sales rupee remaining after all cost and
expenses, including interest, taxes and preferred stock dividend have been
deducted. n 2010 it is less than previous year and shows decreasing
trend.

1830190019302000203021002130220022302300
2009
2010
-et rof|t Marg|n
neL roflL Margln

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Return on Common Equity
Earning available for common stockholder
Common stock equity
2

200 17561846 18.7%
94141919
2010 17563214 17%
103762310
Figure 1.3.6

Interpretation
t measures return earned on common stockholders investment in bank. n
2010 it shows decreasing trend as compared to 2009.

2
Pere Common SLock LqulLy ls compuLed by addlLlon of share caplLal reserves and unapproprlaLed proflL
2009 Common sLock equlLy 10763702+22681707+6069631094141919
2010 Common sLock equlLy 13434628+24430244+63837438103762310
1600 1630 1700 1730 1800 1830 1900
2009
2010
keturn on Common Lqu|ty
8eLurn on Common LqulLy

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1.4. Activity Ratio
Average CoIIection Period
ccount Receivable
verage Sales per Day
200 19587176 19587176 92 Days
77947697/365 213555
2010 23025156 23025156 95 Days
88472131/365 242389
Figure 1.4.1

Interpretation
On average, bank takes 95 days to collect an account receivable
3
, it shows
decreasing trend as compared to 2009, but it is meaningful only in
relation's with bank's credit terms which are not provided.

3
Pere lendlng Lo flnanclal lnsLlLuLlons neL are LreaLed as accounL recelvable
90 91 92 93 94 93 96
2009
2010
Average Co||ect|on er|od
Average CollecLlon erlod

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TotaI Asset Turnover
Revenue
%otal sset
200 77947697 0.083
944582762
2010 88472131 0.085
1035024680
Figure 1.4.2

Interpretation
%otal asset turnover in current year is more than year 2009, so bank uses
its assets more efficiently to generate revenue.

0082 00823 0083 00833 0084 00843 0083 00833
2009
2010
@ota| Asset @urnover
1oLal AsseL 1urnover

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1.5 Market Ratio
Price/Earning (P/E) Ratio
Market price per share of common stock
4

Earning per share
200 74 5.67
13.05
2010 84 6.44
13.05
Figure 1.5.1

Interpretation
t measures the amount that investors are will to pay for each dollar/rupee
of a firm's earnings, higher P/E raises investor confidence. n 2010 P/E is
higher than in 2009.

4
MarkeL prlce of n8's share has Laken from webslLe for year 2009 and 2010
32 34 36 38 6 62 64 66
2009
2010
r|ce]Larn|ng kat|o
rlce/Larnlng 8aLlo

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Book 'aIue per share of Common Stock
Common Stock Equity
200 94141919 Rs. 69.97
1345463
2010 103762310 Rs. 77.12
134563
Figure 1.5.2

Interpretation
For calculation of market/book ratio, it is necessary first to calculate book
value per share of common stock.

66 68 70 72 74 76 78
2009
2010
ook va|ue per share of common stock
8ook value per share of
common sLock

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Market/Book Ratio
Market price per share of common stock
Book value per share of common stock
200 74 1.06
69.97
2010 84 1.09
77.12
Figure 1.5.3

Interpretation
t provides an assessment of how investor's view the firm's performance.
t high M/B bank expects to earn high return relative to risk. %his ratio is
higher in 2010.

104 103 106 107 108 109 11
2009
2010
Market]ook kat|o
MarkeL/8ook 8aLlo

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1. HorizontaI & 'erticaI AnaIysis
1.1. HorizontaI AnaIysis
procedure in fundamental analysis in which an analyst compares ratios
or line items in a company's financial statements over a certain period of
time. %he analyst will use his or her discretion when choosing a particular
timeline; however, the decision is often based on the investing time horizon
under consideration.
Here year 2009 is selected as base year.
FormuIa: =
Current Year Base Year
Base Year
100
TabIe 1.1
BaIance Sheet
ParticuIars 200 % 2010 % A
Assets
Cash & balances with treasury banks 115827868 100% 115442360 97% (3%)
Balances with other banks 28405564 100% 30389664 107% 7%
Lending to financial institutions 19587176 100% 23025156 117% 17%
nvestments- net 217642822 100% 301323804 138% 38%
dvances net 475243431 100% 477506564 100.5% 0.5%
Operating fixed assets 25147192 100% 26888226 107% 7%
Deferred tax assets 2062271 100% 6952666 337% 237%
Other assets net 59666438 100% 53496240 90% (10%)
TotaI 445262 100% 103502460 110% 10%

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LiabiIities
Bills payable 10621169 100% 8006631 75% (25%)
Borrowings 45278138 100% 20103591 44% (56%)
Deposits & other accounts 727464825 100% 832151888 114% 14%
Liabilities against asset subject 42629 100% 106704 250% 150%
to financial lease
Other liabilities 42269623 100% 46160038 109% 9%

Owner's Equity
Share capital 10763702 100% 13454628 125% 25%
Reserves 22681707 100% 24450244 108% 8%
Unappropriated profit 60696510 100% 65857438 109% 9%
Surplus on revaluation of assets 24764459 100% 24733518 99.8% (0.2%)
TotaI 445262 100% 103502460 110% 10%

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1.2. 'erticaI AnaIysis
%echnique for identifying relationship between items in the same financial
statement by expressing all amounts as the percentage of the total amount
taken as 100. n a balance sheet, for example, cash and other assets are
shown as a percentage of the total assets and, in an income statement,
each expense is shown as a percentage of the sales revenue. Financial
statements using this technique are called common size financial
statements.

TabIe 1.2
BaIance Sheet
ParticuIars 200 % 2010 %
Assets
Cash & balances with treasury banks 115827868 12.26% 115442360 11.15%
Balances with other banks 28405564 3% 30389664 2.94%
Lending to financial institutions 19587176 2.07% 23025156 2.22%
nvestments- net 217642822 23% 301323804 29.11%
dvances net 475243431 50.31% 477506564 46.13%
Operating fixed assets 25147192 2.66% 26888226 2.6%
Deferred tax assets 2062271 0.22% 6952666 6.72%
Other assets net 59666438 6.32% 53496240 5.17%
TotaI 445262 100% 103502460 100%

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LiabiIities
Bills payable 10621169 1.12% 8006631 0.77%
Borrowings 45278138 4.79% 20103591 1.94%
Deposits & other accounts 727464825 77.01% 832151888 80.39%
Liabilities against asset subject 42629 0.004% 106704 0.01%
to financial lease
Other liabilities 42269623 4.47% 46160038 4.45%

Owner's Equity
Share capital 10763702 1.14% 13454628 1.29%
Reserves 22681707 2.40% 24450244 2.36%
Unappropriated profit 60696510 6.42% 65857438 6.36%
Surplus on revaluation of assets 24764459 2.62% 24733518 2.38%
TotaI 445262 100% 103502460 100%

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1. SWOT AnaIysis
1.1. Strengths
O Western union faciIity
National Bank of Pakistan is only one bank which has the facility of
Western union. n this particular scheme money is transfer in Pakistan
from abroad. %his is the fastest way to money transfer. You can receive
the money from bank to see the name and password of particular client.
O ATM finder
%here is also strength of NBP that they are found the %M. %hey now
provide this facility to the customers.
O Government's bank
n commercial banking system NBP is only the government bank. %hey
make their policies according to the government's rules and regulations. t
enjoys its position in the market of banking system in Pakistan.
Government of Pakistan also facilitates the National Bank of Pakistan.
O Customer satisfaction
Because of government's bank, it is enjoying the customer's satisfaction.
Customers feels secure their money in NBP.

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O OnIine banking
%here is also strength of NBP that 130 branches are online. t helps the
speedy services giving to the customers. %here is also help in checking the
balances and daily transactions just at one key press.
O EmpIoyee's IoyaIty
Employees are very much loyal to NBP. Employee's turnover is very low in
NBP. Very few employees are leaving the jobs in NBP. So it is very big
strength that your employees are loyal to your organization.
O Wide area of services
%hey provide the wide area of services. %hey offer no. of services relating
to the banking system like, pension to retired government employees,
traffic challans, fees received of OU, farms of OU, utilities bills,
deposits, sales tax , withholding tax, property tax, and various loan
schemes.

1.2. Weakness
O Lack of communication between empIoyees
During the internship in NBP found the problem of lack of communication
between the employees and management. %hey have not very much
understanding with each other and not share the work of each other.

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O Punishment is not very strong for empIoyees
Punishment threat is not very strong for employees. Some employees are
not very professional in their field but top management not takes the action
against such employees.
O PubIic deaIing is not very effective
Public respect is not very effective in NBP. Employees are not taking care
of the customers, especially in pension and bills department.
O Staff shortage
%here is also weak point for NBP that staff is very short and more staff is
required to meet the needs of the branch work. %hey help from internees.
O Lack of respect of seniors
%hey are not a healthy sign for NBP that respect of seniors is not up to the
manners. Juniors try to avoid the seniors and no take the help from them.

1.3. Opportunities
O Growing banking system
Nowadays banking system is growing quickly so NBP have opportunities
to improve the standard and get the more share in the market.

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O NBP have government back
n growing era there is a chance for NBP to improve itself and increase the
shares in the market because it is most trustable due to government's
back.
O Increase in economic activities
%he economic activities are increase nowadays, so banks are contributes
more in economic activities. Banks are played role in trade and commerce.
So the business of commercial banks is increase.
O Customer confidence
People are not satisfied with the existing performance of banking system,
which creates lot of probl ems for them such del ays i n payments etc.
NBP has an opportuni ty because i t has a young and qualified force
now and they don't make any delay regarding any matter related to
payments.

1.4. Threats
O Increase in no. of banks
ncrease in no. of banks is a threat for National Bank of Pakistan. No. of
private banks (commercial and private) are operating their business and
provide the same facilities. So increase in no. of banks is a threat for NBP.

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O Modern type of banking
Modern and computerized banking is required to fulfill the customer's
need. But maximum branches of NBP are worked in old traditional ways.
O SkiIIed peopIe and management requirement
Highly skilled people and management required to meet the new standard
of banking. n NBP some employees are totally irresponsible and lack of
complete knowledge of banking system. So these employees are creating
continuous problems in the system of NBP.
O The whoIe structure change to onIine
NBP have wide network of branches. Only 130 branches are online, so it is
very difficult and time consumed to convert all branches to online system.
So there is also risk involves that if one commuter of one branch suffers in
problem, all system and all commuters of all branches must be turnoff.

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20. Recommendation and
suggestions
During the internship period at NBP have across certain aspects, which
need some attention and improvement. would like to give a few
suggestion and recommendations, which might assist in the advancement
and achievement of the bank.
O Computerization in Banking
NBP has computerized its accounts but it has not computerized its daily
counter services. Computerized of all the branches may be a difficult task,
but it could result in a lot of saving for the bank.
O Evening Bank
n big cities and especially the branches located in commercial areas
should extend evening banking services to its clients for safe keeping of
money after close of business house without fear of danger.
O Proper Safeguard of Bank Branches
n these days many branches of various banks have been looted. n order
to avoid any such incidence, proper safeguard measures should be taken
to protect the life and property.
O Reward System & TimeIy Promotions
%here is no invention of reward for the performance and hard working of
employees, promotions only based on seniority. s a result, employees do

119 | a g e

not try to work hard. n order to increase the productivity and performance
of him employees Bank should raise reward system, so that can
accomplish their object successfully and discharge their duties efficiently.
O ProfessionaIism
n NBP, there is lack of professionalism at most of the levels. Employees
feel overburdened due to the shortage of staff. %he bank should create
now jobs to have competent and professional persons for various posts, so
increase in the number of staff can raise the efficiency of the bank.
O Transformation of the Bank from a bureaucratic
organization to a fast paced, modern, and competitive bank
By extending and targeting NBP's needs to improve bank earnings,
through customer focus of its commercial and corporate branches, and by
enhanced efforts towards the development of human capital. NBP could
very soon transform the bank from a bureaucratic organization to a fast
paced, modern, and competitive bank.
O To generate anciIIary business
%he main purpose of these centers is to generate ancillary business in
addition to funded and non-funded facilities, with quick turnaround time in
decisions for customer satisfaction.
O Effective Chequing System
n Pakistan, an effective Chequing system is not prevailing. People prefer
to receive payment in hard cash rather than in the form of a Cheque. %his
is mainly due to the fact that in Pakistan collection of cheques takes time.

120 | a g e

n addition cheques are dishonored mainly due to the reason there are
insufficient fund in the drawers accounts. f the collection of Cheque
procedure is speeded up and the account holders are made bound to write
cheques only when they have funds in their accounts, an effective
Chequing system can be developed in our country.
O Loans shouId be sanctioned on Merit
Unfortunately most of the loans are being given on the basis of political
background rather than on merit. Cash loans are later written off politically
resulting in a heavy amount of losses for the bank. t is suggested that the
loan sanctioning body of the bank must consist technical people. %here
should be no pressure from the government regarding sanctioning and
writing off of the loans.
O Recruitment poIicy
Human resources are the lifeblood of the organization. f the personnel are
recruited carefully they can become asset to the organization in the case of
carelessness a liability on the organization. Bank is not following its
recruitment policy properly due to favoritism, nepotism and political
pressure. Both the top authority and staff union tries their best recruit their
favorites, indulgence of political pressure add salt to the wounds. %he
persons selected through these channels are infantile and do not work for
the betterment for the bank.
O Promotions
Promotion in NBP is purely on the basis of seniority, so the new young
person having high qualification remains behind for quite a lot of time. %op
management and staff union put pressure for the promotion of their

121 | a g e

favorites, which gives a sense of deprivation to the deserving employee
and their efficiency is affected. s the concept of promotion is attached
with better in terms of greater responsibility, more prestige, greater skills
and increased rate of salary thus a better and impartial policy of promotion
needs to be followed.

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21. References
www.businessdictionary.com
www.investopedia.com
www.wikipedia.com
www.nbp.com.pk
www.amcy5.com
www.rozee.pk
www.scribd.com
www.allbusiness.com

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22. GIossary
1. Bank
n establishment authorized by a government to accept deposits, pay
interest, clear checks, make loans, act as an intermediary in financial
transactions, and provide other financial services to its customers.
2. CentraI bank
nation's principal monetary authority, such as the Federal Reserve Bank,
which regulates the money supply and credit, issues currency, and
manages the rate of exchange.
3. SpeciaIized bank
Specialized banks are foreign exchange banks, industrial banks,
development banks, export-import banks catering to specific needs of
these unique activities. %hese banks provide financial aid to industries,
heavy turnkey projects and foreign trade.
4. DeveIopment financiaI institution
(DF) is generic term used to refer to a range of alternative financial
institutions including micro finance institutions, community development
financial institution and revolving loan funds. %hese institutions provide a
crucial role in providing credit in the form of higher risk loans, equity
positions and risk guarantee instruments to private sector investments in
developing countries.

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5. Investment bank
financial intermediary that performs a variety of services. %his includes
underwriting, acting as an intermediary between an issuer of securities and
the investing public, facilitating mergers and other corporate
reorganizations, and also acting as a broker for institutional clients.
6. Discount house
n institution that specializes in discounting bills of exchange, %reasury
bills and short-dated government bonds in order to help the Bank of
England counteract shortages of day-to-day funds in the interbank market.
. Housing finance agency
Governmental (state or local) organization established to provide housing
assistance. n most cases, the agency can issue bonds that pay tax-free
interest and therefore sell at below taxable yields. %he low-cost money is
then used to fund low interest mortgage loans for eligible borrowers. %he
amount of bond financing available to each state is limited by the U.S.
%reasury.
. 'ision statement
n aspirational description of what an organization would like to achieve or
accomplish in the mid-term or long-term future. t is intended to serves as a
clear guide for choosing current and future courses of action.
. Mission Statement
a statement of the purpose of a company and organization. %he mission
statement should guide the actions of the organization, spell out its overall
goal, provide a path, and guide decision-making.

12S | a g e

10. GoaI & Objective
goal or objective is a desired result a person or a system envisions plans
and commits to achievea personal or organizational desired end-point in
some sort of assumed development. Many people endeavour to reach
goals within a finite time by setting deadlines.
11. Board of directors
Governing body (called the board) of an incorporated firm. ts members
(directors) are elected normally by the subscribers (stockholders) of the
firm (generally at an annual general meeting or GM) to govern the firm
and look after the subscribers' interests.
12. OrganizationaI structure
%he framework, typically hierarchical, within which an organization
arranges its lines of authority and communications, and allocates rights
and duties. Organizational structure determines the manner and extent to
which roles, power, and responsibilities are delegated, controlled, and
coordinated, and how information flows between levels of management.
13. Demand draft
Written order directing that payment be made, on sight, to a third party.
%he person writing the draft is called the drawee; the bank making the
payment is the drawer, or the payer bank. %he beneficiary of a demand
draft, the person receiving the payment, is the payee. Drafts may be
payable at some future date (time drafts) or on sight (demand drafts).
Demand drafts drawn on banks are known as Checks.

126 | a g e

14. Running finance
Running finance is nothing but the finance offerings by financial institutions
against mortgages. t works under the working capital finance.
15. Pay order
Document which instructs a bank to pay a certain sum to a third party.
16. Cheque book
booklet of blank checks which enable a bank account holder to draw
money from his/her checking account deposits.
1. CaII deposit
type of account whereby a bank customer and / or investor who has
accounts at that firm may make deposits or withdrawals any time.
1. Tariff
duty levied on goods transported from one customs area to another
either for protective or revenue purposes.
1. Equity investment
Money that is invested in a firm by its owner(s) or holder(s) of common
stock (ordinary shares) but which is not returned in the normal course of
the business. nvestors recover it only when they sell their shareholdings to
other investors, or when the assets of the firm are liquidated and proceeds
distributed among them after satisfying the firm's obligations.
20. Corporate finance
ny financial or monetary activity that deals with a company and its
money.

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