Intership report on nbp

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Intership report on nbp

  1. 1. NATIONAL BANK OF PAKISTAN INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 M.COM (FINANCE). GOVERNMENT COLLEGE UNIVERSITY FSD. B.ED(2012) Mirza Ihsan Ullah-30633324072009 2010 2011 2012 Dedication I dedicated my ReportTo all Muslim invaders who gives their life, time ,blood, family and other resourcesfor the expansion of Deen MUHAMMAD (SAW) without any cares. Such as MusaIbn Nusayr and Tariq Ibn Ziyad, Muhammad bin Qasim Sultan Salahuddin, AyubiTipu sultan. &To Templar knight and Freemason in very sad manner who wants to changethe world but happen only ALLAH wants. MAIN BRANCH JARANWALA
  2. 2. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Dedication I dedicated my Report To all Muslim invaders who gives their life, time ,blood, family and other resources for the expansion of Deen MUHAMMAD (SAW) without any cares. Such as Musa Ibn Nusayr and Tariq Ibn Ziyad, Muhammad bin Qasim Sultan Salahuddin, Ayubi Tipu sultan. & To Templar knight and Freemason in very sad manner who wants to change the world but happen only ALLAH wants. 2
  3. 3. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Executive summary National Bank of Pakistan is a Govt. bank. It has its head office in Karachi. It has over 1,283 branches in Pakistan & 23 abroad. National Bank of Pakistan maintains its position as Pakistans premier bank determined to set higher standards of achievements. It is the major business partner for the Government of Pakistan with special emphasis on fostering Pakistans economic growth through aggressive and balanced lending policies, technologically oriented products and services offered through its large network of branches locally, internationally and representative offices. The National Bank of Pakistan offers a wide range of products& services to its customers & recognizes the importance of efficient business delivery & providing timely solutions. Now online facility of fund or cash transfer increases the strength of NBP. cash in gold facility very popular in the market. Their competitors are untied bank, Allied bank, Habib bank, First women bank, Bank of Punjab etc. The essence of business philosophy is to cater to the banking requirements of small & medium sized entrepreneurs, providing them qualitative & competitive services with emphasis on encouraging exports. Its products are Pay Order, Mail Transfer, Foreign Remittance, Foreign Currency Account, Short Term Investment, cash in gold, Commercial Finance etc. In Jaranwala, Main Branch of National Bank of Pakistan. Branch code is 0342 & phone number is 0414-312631 3
  4. 4. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Preface In order to be able to cope with the changing environment it is necessary to have some Practical experience It is requirement of GOVERNMENT COLLEGE UNIVERSITY FSD. that all students of M.com have to spend Six Week in any organization to get practical exposure and to get familiarized with the ways to live in the organizational environment which is dramatically different from the educational environment. That six week period called “Internship period”, if spent properly and sincerely, enables the students to be more confident, more knowledgeable, more responsible and more committed to its work in the practical field. I have also been assigned to do internship of six weeks period in National Bank of Pakistan Main Branch jaranwala.It has enabled me to understand the practical scenario and sharpen our decision making power and utilizing the resources in an effective manner, so that our resources generate maximum profit. In preparing this report, I have put all of my best efforts and tried my level best to give maximum knowledge. Despite of my all the coherent efforts, I do believe that there will always be a room for improvement in the efforts of learner like me 4
  5. 5. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Acknowledgement First, all praises go to the Almighty Allah, the most gracious, the most merciful, the most kind & generous to man & his action. And who granted me a wealth of knowledge, love and respect to share with my fellow beings. He gave me courage to pursue my passion against all odds. I owe my greatest gratitude to my parents for their continuous support, assistance, guidance, love and patience without which I could not have completed this internship and report in such a short span of time. I am deeply indebted to my chosen bank i.e. NBP and their customers who participated in the study. I am especially thankful to Branch manager & Mr. Muazzam in charge of clearing department who give me cooperative company and all the staff for agreeing to provide the required data and give me priceless knowledge. 5
  6. 6. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Table of contents Topics page # CHAPTER NO. 1 Evolution of banking & Introduction of NBP 1.1 Evolution & Introduction of banking --------------------------------------------------- 2 1.2 Banking history in Pakistan------------------------------------------------------------ 3 1.3 National bank of Pakistan ------------------------------------------------------------- 5 1.4 Role & Function of NBP------------------------------------------------------------------ 11 1.5 Business volume of NBP ----------------------------------------------------------------- 13 1.6 Branch Network of NBP------------------------------------------------------------------- 14 1.7 Competitors of NBP----------------------------------------------------------------------- 15 1.8 Awards and Achievements of NBP---------------------------------------------------- 16 CHAPTER NO. 2 Organizational structure & Branch Structure 2.1 Organization structure and management------------------------------------------- 18 2.2 Organizational Hierarchy chart---------------------------------------------------------- 19 2.3 Board of Directors of NBP---------------------------------------------------------------- 20 2.4 What BOD does----------------------------------------------------------------------------- 21 2.5 Senior management of NBP------------------------------------------------------------- 23 2.6 Branch structure & Branch employees Chart & of NBP--------------------------- 25 2.7 Authority &decision making in Branch------------------------------------------------- 26 2.8 Chart of hierarchy of Branch to Head office------------------------------------------ 27 2.9 Head of management in NBP----------------------------------------------------------- 27 CHAPTER NO. 3 Products of National Bank OF Pakistan Introduction of NBP products------------------------------------------------------------ 31 3.1 NBP Premium Amdani--------------------------------------------------------------------- 31 3.2 NBP premium Saver----------------------------------------------------------------------- 32 3.3 NBP Saibaan--------------------------------------------------------------------------------- 33 3.4 NBP Advance Salary----------------------------------------------------------------------- 34 3.5 NBP Cash Card- --------------------------------------------------------------------------- 36 3.6 NBP Investor Advantage------------------------------------------------------------------ 37 3.7 NBP Cash n Gold-------------------------------------------------------------------------- 38 3.8.9 NBP Kisan Taqat & NBP Kisan Dost ------------------------------------------------ 39 3.9 NBP Pak Remit---------------------------------------------------------------------------- 39 3.10 NBP Protection Shield-------------------------------------------------------------------- 40 6
  7. 7. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 CHAPTER NO. 4 Departments in NBP Branch Jaranwala 4.1 Cash Department-------------------------------------------------------------------------- 43 4.2 Accounts Department---------------------------------------------------------------------- 46 4.3 Advance Department·--------------------------------------------------------------------- 50 4.4 Remittances Department----------------------------------------------------------------- 51 4.5 Clearance Department----------------------------------------------------------------- 53 4.6 Govt. Collection Department---------------------------------------------------------------- 55 CHAPTER NO.5 MY Learning as a Trainee 5.1 Introduction of Branch and learning--------------------------------------------------- 57 5.2 1st department where I worked (Remittances) ------------------------------------- 57 5.3 2st department where I worked (Account Opening) ------------------------------- 59 5.4 Government Department (FEW DAYS) ---------------------------------------------- 63 CHAPTER NO.6 SOWT Analysis of NBP 6.1 Introduction of SWOT Analysis--------------------------------------------------------- 66 6.2 Swot analysis of NBP---------------------------------------------------------------------- 67 CHAPTER NO.7 Financial Analysis NBP 7.1Introduction of FSA------------------------------------------------------------------------ 70 7.2 3 Years Statement of Financial Position of NBP------------------------------------ 71 7.3 3 Years Statement of comprehensive income--------------------------------------- 72 7.4 Ratio analysis of NBP---------------------------------------------------------------------- 73 7.5 Horizontal analysis of Financial statement----------------------------------------- 83 7.6 Vertical analysis of Financial statement--------------------------------------------- 88 Conclusion---------------------------------------------------------------------------------- 93 Findings &Recommendation--------------------------------------------------------- 95 References -------------------------------------------------------------------------------- 98 7
  8. 8. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Chapter no 1  Evaluation& Introduction of Baking  Formation, Introduction, Function ,role ,Business volume, Branch network &Achievement of organization Page 2-17 8
  9. 9. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 1.1 Evaluation& Introduction of Baking The word “banking” is derived from the words Bancus, Banque or Back. The history of Banking is traced to as early as 2000BC. The origin of banking is also traced to early goldsmith. The first stage in the development of modern banking thus was the accepting of deposits of cash from these persons who had surplus money with themselves. In the second step, goldsmiths used issue receipts for the money deposits with them. These receipts began to pass from hand to hand in settlement of transaction. In the same time they thought it profitable to lend at least some of the money deposited with them to the needy persons. This proved quite a profitable business for the gold smiths. In order to create confidence among the people, different steps were taken to regulate the banking organization. A conference was held in Nuremberg, 1584. It was decided that a bank should be set up by the state, which should streamline the banking organization and technique. The first central bank was formed in Genoa in 1587. Banks of England were established in 1694. With the passage of time the activities of the commercial banks have greatly increased. They now deal with large number of matters such as obtaining funds, advancing loans to businesses, farmers, households, and making investment in stocks discount bills of exchange etc. MODERN BANKING By the year 1700 the bank of England was not only 100 issuing notes but also conducting accounts for customers. In 1853 bank of England further impetus for cheques, currency, and they became very popular among the customers who would either pass them from hand to hand. In 1946 the labor government nationalized the Bank of England. 9
  10. 10. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 1.2 BANKING HISTORY IN PAKISTAN: At the time of partition, the total number of commercial bank on Pakistan was 38 out of these: the Pakistan banks were 2; Indian banks 29 and the exchange banks & the total deposits of Pakistan banks stood at Rs.880.0 millions where the advance is were Rs.198.0 million. Before partition of sub continent, the entire banking business was almost controlled and managed by non-Muslims. The Muslims were deliberately kept cut of banking profession by the healthy Hindu community. When Hindu capitalists became sure of the division of sub continent: they secretly began transfer their capital to the safe place in India, when Pakistan declared an independent state in august 1947. The fund and other valuables were transferred at an accelerated pace to India. . The numbers of scheduled banks branches were reduced from 619 to 213 only both wings of the country after in dependence. The non-schedules banks also suffered a severe jolt and their number was reduced from 411 to 106 over the same period. West Pakistan where there was greater exodus of non-Muslims to India suffered a great deal as a number of branches fall down from 487 to 69.In the East Pakistan though the number of branches were not closed in such a great number as in West Pakistan, a large number of portion of the deposit were withdrawn from the banks and transferred to transferred to India by the non Muslims. The mass scale closure of branches and with drawl of the deposits caused a dead lock in the banking business in Pakistan .The government of Pakistan was quite aware of the serious banking situation caused by the withdrawal of deposits and whole scale migration of banking staffs to India. It took up the challenge and started recognizing the crippled banking immediately after partition .A moratorium of free months was also allowed to banks that had financial difficulty due to sudden with drawl of deposits. In addition to above the following arrangements were made for facilitating settlement of claims by the governments .Each bank was to declare on to its offices both in India and Pakistan as clearing house for transfer of accounts. Each bank was open at lea stone central office in Pakistan Where it could consolidate work of all its branches and Start Paying out to depositors. The government took some effective measures for providing banking Training facilities to Muslims. 10
  11. 11. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 There were some complaints that Hindu banks were not honoring the cheques of Pakistani national and were also refusing to give securities kept in their custody. The government issued an ordinance which empowered it to investigate all such complaints and if satisfied of their bonfires, the payment should be realized. In case the bank insisted on non-payments, the government should realize the assets of the banks, which were sufficient to discharge such liabilities. The government of Pakistan also allowed the removal of Valuables, kept in save deposits vaults and lockers by Submitting an application and getting necessary approval from the custodian of evacuee property .The government of Pakistan tried to provide all kinds of facilities with sincerity to the known Muslims bankers for restoring normal banking facilities in the country but the response was discouraging. An inter dominion agreement was reached between India and Pakistan in April1949.The main provisions of the agreement were as under; The inter dominion agreement could not be fully implemented. India delayed the transfer of Muslim deposits to Pakistan. The non devaluations decision of Pakistan government further led to the suspension of remittance facilities through normal banking channels. Due to panicky with drawl of deposits; some banks went into liquidation and the payments could not be made to the depositors. In order to regulate the both of banking on sound footing, the following measures were taken to develop the banking system in Pakistan. The state bank of Pakistan which is the central bank of the country was established in July 1948. The national bank of Pakistan was established on 1949. This bank is to serve as an agent to the SBP in the areas ,where SBP has no set-up. DEFINITION OF BANK Banking companies ordinance 1962 section 5(b) defines bank as, “Banking means the accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, an draw able by cheques, drafts order or otherwise. In other words, 11
  12. 12. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 A bank is an institution which Accept deposits at lower rate of interest and give advances at higher rate of interest. 1.3 NATIONAL BANK OF PAKISTAN History and growth of NBP The history of National Bank of Pakistan is part of Pakistan‟s struggle for economic independence. National Bank of Pakistan was established on November 9, 1949 under the National Bank of Pakistan Ordinance, 1949 in order to cope with the crisis conditions which were developed after trade deadlock with India and devaluation of Indian Rupee in 1949. Initially the Bank was established with the objective to extend credit to the agriculture sector. The normal procedure of establishing a banking company under the Companies Law was set aside and the Bank was established through the promulgation of an Ordinance, due to the crisis situation that had developed with regard to financing of jute trade. The Bank commenced its operations from November 20, 1949 at six important jute centers in the then, East Pakistan and directed its resources in financing of jute crop. The Bank‟s Karachi and Lahore offices were subsequently opened in December 1949. National Bank of Pakistan is the Pakistans premier bank determined to set higher standards of achievements. It is the major business partner for the Government of Pakistan with special emphasis on fostering Pakistans economic growth through aggressive and balanced lending policies, technologically oriented products and services offered through its large network of branches locally, internationally and representative offices. In modern business services provided by organizations are termed as Products The National Bank of Pakistan came forward to establish its offices in the Cotton growing areas and extended credit facilities liberally in order to restore stability to the market. In 1951, the country was once again faced with a crisis in the cotton trade when prices was crashed and touched the lowest level since independence following the cessation of hostilities in Korea. The bank in collaboration with the cotton board provided the necessary Credit facilities to the trade and the crisis was tided over. The nature of responsibilities of the Bank is different and unique from other banks/financial institutions. The Bank acts as the agent to the State Bank of Pakistan for handling Provincial/Federal Government Receipts and Payments on their behalf. 12
  13. 13. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 National Bank of Pakistan is today a progressive, efficient, and customer focused institution. It has developed a wide range of consumer products, to enhance business and cater to the different segments of society. Some schemes have been specifically designed for the low to middle income segments of the population. These include NBP Advance Salary, NBP Saibaan, NBP Kisan Dost, and NBP Cash n Gold Nowadays and credit rating At present day nbp is the main hand of government and state bank of Pakistan .nbp performs many functions on behalf of government .NBP works in Pakistan as well as in abroad. Short term & long term credit rating Sr. Name of Rating Short Long Date of Remarks # Bank Agency Term Term Rating National Rating Bank of JCR-VIS A-1+ AAA JUNE Outlook - Pakistan 2011 Stable Definition of A-1’ The term A-1 when rating an insurers ability to meet debt obligations in the short term. A-1 indicates that the insurer has a strong ability to meet its debt obligations. A-1 is the highest rating that Standard & Poors issues for short-term debt. Definition of AAA The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has an exceptional degree of creditworthiness and can easily meet its financial commitments. Ratings agencies such as Standard & Poors and Fitch Ratings use the AAA nomenclature to indicate the highest credit quality, while Moodys uses AAA. 13
  14. 14. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 VISION STATEMENT OF NATIONAL BANK OF PAKISTAN To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility 14
  15. 15. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 MISSION STATEMENT OF NATIONAL BANK OF PAKISTAN • Creating a distinctive brand identity by providing the highest standards of services • Adopting the best international management practices • Maximizing stakeholders value • Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate 15
  16. 16. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 CORE VALUE OF NATIONAL BANK OF PAKISTAN • Highest standards of Integrity • Institutionalizing team work and performance culture • Excellence in service • Advancement of skills for tomorrow‟s challenges • Awareness of social and community responsibility • Value creation for all stakeholders 16
  17. 17. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 GOAL OF NATIONAL BANK OF PAKISTAN To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products. 17
  18. 18. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 1.4 Role of the organization in Pakistan NBP is playing a vital role in development of Pakistan; NBP is making a pioneer role in development of agriculture sector, which is the main production sector in Pakistan. As we all knows that agriculture sector is major part of our exports e.g. cotton, sugar, rice, wheat etc. so its helps to earn major part of foreign exchange through our exports. The nature of responsibilities of the Bank is different and unique from other banks/financial institutions. The bank also handles treasury transactions for the Government of Pakistan as an agent to the State Bank of Pakistan for handling provincial/Federal Government receipts and payments on their behalf. The National Bank of Pakistan has also played an important role in financing the country‟s growing trade, which has expanded through the years as diversification. 1.5 FUNCTIONS OF NATIONAL BANK OF PAKISTAN National Bank of Pakistan is a commercial bank, so like other commercial banks it is engaged in financing internal trade and also in other ordinary banking business of receiving deposits, advancing loans and discounting bills of exchange. Accepting Deposits The most important function is to receive surplus money from the public. They throw their nets as wide as possible to collect surplus balances of individuals, firms and public institutions. In order to attract funds they have introduced various types of deposit schemes that may suit the needs and tastes of a large body of depositors.  Current account  Saving account  Fixed deposit account. Advancing Loans Every bank has learnt by experience that depositors do not draw whole of their deposits at a time. They only draw a part of it for day to day transactions; therefore a bank keeps a part of the total deposits as “cash reserve” to meet the cash demand of depositors and advances the Tijarat Ganj part of deposits to businessmen on interest. 18
  19. 19. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 National Bank of Pakistan gives loans in following ways.  By opening a loan account  By means of overdraft  By discounting bills of exchange  By purchasing bond and securities Creation of the Medium of Exchange It is neither safe nor easy to make payment in the form of metallic coin or paper notes; therefore cheques make payments. Almost 90% of the financial transactions are made through cheques. National Bank of Pakistan collects and makes payment of cheques for its customers. Transfer Money National Bank of Pakistan provides facility to transfer from one place to another at very nominal charges. When a person wants to transfer his money from one place he handover money to the bank and gets a draft at the name of the particular branch were he needs the money and gets money at that place safely. Agency Service National Bank of Pakistan performs many services as an agent of its clients or depositors. It makes payment on order cheques receives amount of money on crossed cheques issued in favor of its clients and deposits the amount tin their accounts.It purchases bonds and shares of joint stock companies for its clients under their consent. General Utility Services It keeps their precious documents, gold ornaments, bonds, and shares etc in safe custody in its locker. National Bank of Pakistan provides the services of clearing the utility bills i.e. electricity, gas and telephone bills of its customer and provide evening banking service. 19
  20. 20. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 1.6 Business volume: The National Bank of Pakistan is the foremost bank determined to set higher standards of achievements. It is the key business partner for the Govt. of Pakistan with special emphasis on nurturing Pakistan‟s economic growth through aggressive & impartial lending policies. As we look to the business side volume of NBP.NBP has strong position of assets and deposits. The assets and deposits of NBP increasing day by day. it shows the trust of people on NBP. With the help of this it can expand their business. Loan and equity of NBP increases from previous years. It means more equity means more share and it means more capital. Years from 2009 to 2011 Particulars 2009 2010 2011 Total Assets 946,253,269 1,038,018,467 1153480100 Total Deposits 727,513,013 832,134,054 927415127 Total Equity 10,763,702 13,454,629 16818286 Total Loans 727,513,013 832,134,054 927415132 Total Investments 217,596,037 301,078,498 319527524 Net Profit 21119 24662 26116 Earnings per share 12.97 13.24 10.53 20
  21. 21. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 1.7 Branch Network of National Bank of Pakistan With the geographical development of its branches, the National Bank of Pakistan has been able to extend its services to a much larger number of Pakistanis all over the country. Today the Bank has more than 8.8 million accounts & Bank maintains its presence in all the major financial centers of the world through its 23 (2011) overseas branches and 5 representative offices. Of these, three representative offices have recently been set up at Tashkent (Uzbekistan), Baku (Azerbaijan) and Almaty (Kazakhstan) to take advantage of the emerging opportunities in CIS countries. Bank‟s role Apart from having a vast branch network, Bank is at the forefront in the acquisition and application of new technologies in every aspect of its banking facilities. It has acquired leased telephone lines for on-line banking. The Bank has 12 Regional Computer Centers to cover various on-line and batch system requirements of branches and controlling offices. Presently the National Bank of Pakistan is divided into various Groups headed by SEVPs/EVPs. Its field operations are controlled by 23 regions reporting to as many Regional chiefs, who control 40 zones and 15 single Branch zones headed by Zonal Chiefs; 12 corporate branches and 1283 domestic branches headed by Branch Managers. The bank has 13 SWIFT local centers. Apart from having a vast branch network, Bank is at the forefront in the acquisition and application of new technologies in every aspect of its banking facilities. It has acquired leased telephone lines for on-line banking. Bank has also a presence on the internet. The of Pakistan has 1274 online branches throughout the country. It has modernized its services by installing Automated Teller Machines (ATMs) called “CASH LINK” at selected branches. The Banks organizational structure reflects the three levels at which it operates: international, national and local. The Head Office formulates and implements the strategic, management and operational policies. The Banks geographical organization consists of branches located in the regional capitals and in some provincial capitals. The branches activities relate to the State treasury service, payment system services, currency circulation, banking and financial supervision, and the analysis of economic and financial developments at the local level. 21
  22. 22. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 The Bank has representative offices abroad, in London, New York and Tokyo; a number of officers are seconded as financial experts to Italian embassies and consulates. The Bank has representative offices in Beijing, Tashkent, Chicago and Toronto 1,283 Branches 23 Overseas Branches 29 Regional Offices 10 Representative Offices 1274 Online branches 5 Subsidiaries 149……………. ATM 4 Joint ventures 8 Islamic baking 1.8 COMPETITORS OF NBP The competitors of the National Bank of Pakistan are as follows: Askari Bank National Savings Habib Bank Limited Allied Bank Limited United Bank Limited Faysal Bank First Woman Bank Standard Charter Muslim Commercial Bank Bank Al-Falah Bank of Punjab Silk Bank Dubai Islamic Bank Sonehri Bank 22
  23. 23. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 1.9 NBP Awards and Achievements. 2011 &2012  Listed in top 1000 banks of the world for the year 2012" by the world renowned “The Banker” magazine owned by the Financial Times Group, London.  “Pakistan: Transaction of the Year Award - 2011”, awarded by Islamic Finance News, for two wind farm projects of 50MW each in which the bank acted as international inter-creditor agent (for the Islamic Development Bank, the Asian Development Bank and syndicates of local banks).  “Transaction of the Year Award - 2011”, awarded by CFA Association of Pakistan for the private placement and offer-for-sale of Engro Foods Limited.  "Bank of the Year" awarded for the year 2011 by the world renowned "The Banker" magazine owned by the Financial Times Group, London  "Top Corporate Finance House (Fixed Income) Award of the Year 2011", awarded by the "CFA Association of Pakistan".  National Bank of Pakistan Awarded “Best Emerging Markets Bank 2011” Awarded By Global Finance Magazine.  “Bank of the Year” awarded for the year 2010 by the world renowned “The Banker” magazine owned by the Financial Times Group, London  "Runner up of Corporate Finance House (Fixed Income) Award of the Year 2010", awarded by the "CFA Association Pakistan".  NBP is awarded “President of Pakistan Trophy”, a top slot award by Federation of Pakistan Chambers of Commerce and Industry in 2010.  NBP is awarded “Prime Minister of Pakistan Trophy”, a top slot award by Lahore Chambers of Commerce and Industry in 2010  Among the global leading banks, NBP is the only Pakistani bank appearing in top 500 banks of the world in “The Banker” magazine owned by the Financial Times Group, London 23
  24. 24. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Ch no. 2 Organizational Structure and Management & Branch Structure and Management Page 18 - 29 24
  25. 25. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 2.1 Organizational Structure and Management A well-developed and properly coordinate structure is an important requirement for the success of any organization. It provides the basic framework within which functions and procedures are performed. Any organization needs a structure, which provides a framework for successful operations. The operation of an organization involves a number of activities, which are related to decision making, and communication of these decisions. These activities must be well coordinated so that the goals of the organization are achieved successfully The Organization Structure shows the internal operations and reporting lines of the National Bank of Pakistan. The bank has clearly defined organizational structure, which supports clear lines of communications and reporting relationships. There exists a properly defined financial and administrative power of various committees and key management personnel, which supports delegations of authority and accountability. The internal operations of the Bank are organized into 15 main departments and divisions headed by senior management of the bank and are report directly to the Board of Directors. The organizational structure of National Bank of Pakistan is centralized because all the decisions of the bank are taken by the top Management. The National Bank of Pakistan‟s Departmental key roles and functions are as follows: The ownership, management, and control of all the commercial banks were taken over by the Government of Pakistan on January 1 st, 1974. A banking council was formed under the Nationalization Act 1974. The banking council was set up for making policy.Recommendations to the Federal Government, formulating policy guidelines for the banks and their reorganization. The management and organizational structure of the nationalized banks have uniformity. This management and organizational structure is briefly described as und 25
  26. 26. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 26
  27. 27. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 2.3 BOARD OF DIRECTORS Pursuant to Section 11 of The Banks‟ (Nationalization) Act, 1974, the number of Directors of the Bank shall not be less than 5 and not more than 7, excluding the President. The Federal Government may, if deems necessary, appoint a Chairman of the Board in respect of the Bank. At present National Bank of Pakistan‟s Board of Directors consist of 6 Directors and a President who is the Chief Executive of the Bank and presides over the meetings of the Board 1.Qamar Hussain Chairman Board, President , NBP Mr. Qamar Hussain is the President of National Bank of Pakistan (NBP), the largest Commercial Bank of the country. He holds an MBA degree in International 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 America N.T. & S.A., Pakistan in the year 1981. Prior to joining NBP in 2009, he has worked with American Express Bank Limited as Senior Director Global Credit, New York and earlier as Senior Director Country Manager, Bangladesh. He had also been associated with the CHASE MANHATTAN BANK in Pakistan and USA. 2.Mr. Tariq Kirmani Director Soon after completing his Masters in Business Administration (MBA) Mr. Kirmani embarked upon a rewarding career, starting with a multi-national Oil Company (Caltex later Chevron Pakistan) in 1969 and worked for seven years in the United States of America, United Arab Emirates and Australia in different senior management positions in Marketing, Operations and Finance. In 1991, Mr. Kirmani became the first Pakistani to be elected as a Company Director of the mentioned multi-national company. 3.Mrs. Haniya Shahid Naseem Director 27
  28. 28. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Mrs. Haniya Shahid Naseem has done her Masters in Business Administration with honors in 1995. She is a certified director from the Pakistan Institute of Corporate Governance and has also done various short courses in management and banking. Mrs. Haniya Shahid has more than 15 years of diversified experience in the education, agriculture and corporate sectors.. 4,Mr.Aftab Anwar Baloch Director Mr. Aftab Anwar Baloch an officer of Pakistan Customs Service belongs to Seventh Common Training Programmed. He joined service of Government of Pakistan during 1980 and possesses 32 years of rich experience both in formulation and implementation of fiscal policy relating to levy charge and collection of Federal Taxes i.e. Customs Duty, Sales Tax, Federal Excise Duty etc. 5.Mr. Shahid Aziz Siddiqi Director Mr. Shahid Aziz Siddiqi is presently Chairman State Life Insurance Corporation of Pakistan. Mr. Siddiqi holds a Master Degree from the Karachi University and a Post Graduate Diploma in Development Studies from the University of Cambridge UK. Mr. Siddiqi topped the Civil Services examination of 1968. 6.Mr. Zahid Hussain Director Zahid Hussain started his career with Pakistan Tobacco Company Ltd. and subsequently worked for British American Tobacco Co. Ltd, London. Later he joined Pakistan Automobile Corporation and served Suzuki, followed by Toyota as General Manager Marketing. He was promoted as Chief Executive MAZDA. 2.4 What directors do…..? 1. The Board of Directors shall assume its role independent of the influence of the Management and should know its responsibilities and powers in clear terms 2. The Board shall approve and monitor the objectives, strategies and overall business plans of the institution. 28
  29. 29. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 3. All the members of the Board should undertake and fulfill their duties &responsibilities keeping in view their legal obligations under all the applicable laws and regulations. 4. The Board shall clearly define the authorities and key responsibilities of Senior Management without delegating its policymaking powers to the Management and shall ensure that the Management is in the hands of qualified personnel. 5. The Board shall approve and ensure implementation of policies, including but not limited to, in areas of Risk Management, Credit, Treasury & Investment, Internal Control System and Audit, IT Security, Human Resource, Expenditure, Accounting & Disclosure, and any other operational. 6. As regards Internal Audit or Internal Control, a separate department shall be created which shall be manned preferably by professionals responsible to conduct audit of the Bank, Various Divisions, Offices, and Units Branches etc. The Head of this department will report directly to the BOD or Board Committee on Internal Audit. 7. The business conditions and markets are ever changing and so are their requirements. The Board, therefore, is required to ensure existence of an effective „Management Information system‟ to remain fully informed of the Activities 8. The Board should meet frequently (preferably on monthly basis, but in any event, not less than once every quarter) and the individual directors of an institution should attend at least half of the meetings held in a financial year. The Board should ensure that it receives sufficient information from Management on the agenda items well in advance of each meeting to enable it to effectively participate in and contribute to each meeting. 9. The Board should carry out its responsibilities in such a way that the external auditors and supervisors can see and form judgment on the quality of Board‟s work and its contributions through proper and detailed minutes of the deliberations held and decisions taken during the Board meetings. 10. To share the load of activities, the Board may form specialized committees with well-defined objectives, authorities and tenure. 11. The Board should ensure that it receives management letter from the external auditors without delay. It should also be ensured that appropriate action is taken in consultation with the Audit Committee of the Board to deal with control or other weaknesses identified in the management letter. 29
  30. 30. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 2.5 Senior management of National Bank of Pakistan Dr. Asif A. Brohi SEVP, Operating Officer & Group Chief Shahid Anwar Khan SEVP &, Credit Management Group Ziaullah Khan SEVP Chief Assets Recovery Group SEVP, Training & Organization Development Dr. Mirza Abrar Baig Group Nausherwan Adil SEVP & Group Chief, Operations Tariq Jamali SEVP & Group Chief, Compliance Group SEVP & Group Chief, Corporate & Nadeem A. Ilyas Investment Banking Group SEVP & Group Chief, Treasury Management Muhammad Nusrat Vohra Group Khalid Bin Shaheen SEVP & Group Chief, Global Home Remittance Management Group Imam Bakhsh Baloch SEVP & Group Chief, Audit & Inspection Group Asif Hassan SEVP & Group Chief, Small and Medium Assets Recovery Group M. Rafiq Bengali SEVP & Group Chief, Overseas Banking Group and RCE Americas Region 30
  31. 31. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Zubair Ahmed SEVP & Group Chief, Logistics & Engineering Group Tahira Raza SEVP & Group Cheif, Risk Management Group Sheharyar Qaisrani EVP & Divisional Head Agriculture Business Division Muhammad Hassan Khaskheli EVP & Divisional Head, Personnel & Industrial Relations Division, HRM&A Group Qamar Hussain EVP & Divisional Head, Human Resources Division Aamir Sattar EVP & Financial Controller, Financial Control Division Raza Mohsin Qizilbash EVP & Head, Legal Division Mahmood Siddique EVP & CIO, IT Division S.M. Ali Zamin EVP, Secretary Board of Directors & Secretary Credit Committees Aamir Abbasi SVP & Divisional Head, Corporate Communication Division Kashif Aziz SVP, Head PMO Muhammad Naeem Ansari VP / Secretary Operations Committee 2.6 ORGANIZATION STRUCTURE OF THE BRANCH 31
  32. 32. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 .Any organization needs a structure, which provides a framework for successful operations. The operation of an organization involves a number of activities, which are related to decision making, and communication of these decisions. These activities must be well coordinated so that the goals of the organization are achieved successfully Chart of Hierarchy of Branch Branch Employees  Manager MR. Main Zulfiqar  Deputy manager MR. Saraj ul din  Operation manager MR. Shahnawaz  Accountant MR M.Mubarik ali  Credit officer MR. Rai Sohail  Recovery officer MR. Allah Datta  Clearing & ATM officer MR. Muazzam  Remittance officer MR. Hassan  Collection officer MR. Akbar ali 32
  33. 33. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012  Bill collection officer MR, M.Asif  Cashier MR, Abdul Majeed  Massager MR, Mian Saleem  Helper MR, Sohail Ahmed  Peon MR,M. Arshad  Sweeper MR,M. Ibrahem  Guard MR. M.Sahkeel No. of Employees in Branch 17 Official ……………………...... 13 Non official ……………………… 4 ________________ Total Employees 17 2.7 Authority And Decision Making of Branch  Centralize Decision Making The Branch Manager of National Bank of Pakistan is responsible for all the affairs of the Bank. All the decisions relating to Branch are made by him and the subordinates have to obey these decisions. All the employees of the Bank are report directly to the Branch Manager. The branch has one operation Managers. Operation Manager I controls Deposits, Advance & Branch accounts department.  Authority The chain of command illustrates the authority structure of National Bank of Pakistan Main Branch Jaranwala. Authority is the formal and legitimate right of the manger to make decisions, issues orders and allocates resources to achieve organizational desired outcomes. By analyzing the chain of command of NBP, one can come to the conclusion that, as there is scalar pattern followed at the organizational setup of NBP, therefore 33
  34. 34. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012  Delegation Delegation is the process, which managers use to transfer the authority and responsibility to position below in the hierarchy At National Bank of Pakistan Jaranwala branch Operation Managers have some authority & responsibility relating to affairs of the Branch. 2.8 Chart of Hierarchy of Branch to Head office 2.9 Heads of Management in Nation Bank of Pakistan  Executive Board  Board of Directors  Chief Executive  Divisional Chiefs  Provisional Chiefs  Circle Executive 34
  35. 35. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012  Zonal Heads  Branch Managers 1) Executive Board The general direction and supervision of the affairs of commercial banks lies in their respective Executive Boards. An EB also consists of a President, a Secretary, and 9 other members, appointed by the Federal Government 2) Board of Directors In the management of the banks, the board of directors is at the top of the controlling body. Since there are no private share holders now, so there is no general meeting of the share holders and no elected directors. The board has limited administrative powers because after the Nationalization Act 1974, most of powers are transferred to the Banking Council and Executive Board. 3) Chief Executive The President of the Executive Board is the Chief Executive. He is the administrative head of a bank and presides over the meetings of Executive Board. 4) Divisional Chiefs In order to improve the management and operation of a bank, it has been split up into a numbers of divisions. Each division of a bank is placed under the supervision and control of Divisional Chief (also called the Senior Executive Vice President or Executive Vice President) 5) Provisional Chiefs In order to improve the performance of banking system, each bank has a Provisional Chief. PC has the powers for sanctioning finance and other credit facilities. Each headquarter is situated in each province e.g. in Lahore, Peshawar, Quetta, and Karachi. 6) Circle Executive Each commercial bank has a number of circles placed directly under the control and supervision of Chief Executive. 7) Zonal Heads 35
  36. 36. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Each circle is divided into a number of zones. These zones are administered by Zonal Heads who hold the posts of Vice President or Assistant Vice President. 8) Branch Managers Each zone of commercial bank is divided into several branches. The control and supervision of each branch is mostly entrusted to Assistant Vice President or Officer G-I Comments on the organization structure: The National Bank has great contribution towards building wide Banking structure in Pakistan and serving all aspects of the National life and all classes of society. NBP is fully aware of the developments taking place in the world as well as the changes occur in the economic and social condition with in the country. The bank is determined to meet new challenges by redefining its goals and strategy. 36
  37. 37. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Chapter no. 3 Products of NBP Page 31 - 41 37
  38. 38. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Products of National Bank OF Pakistan A product is anything that can be offered to a market to satisfy a want or need and a service is an act or performance that is essentially intangible and does not result in the ownership of anything. What products or services have to be offered to the target market depends on the market requirement and also the organization‟s profits. The organization will offer those products and services, which result in maximum profits and minimum costs. A bank is an organization rather a financial institution that provides products such as different types of deposits and services like foddering financing facilities to its customers National Bank of Pakistan always makes efforts to improve its goodwill in the general public. It introduces different kind of schemes time to time. The most popular schemes conducted by NBP are as under: 1. NBP Premium Amdani 2. NBP premium Saver 3. NBP Saibaan 4. NBP Advance Salary 5. NBP Cash Card 6. NBP Investor Advantage 7. NBP Cash n Gold 8. NBP Kisan Taqat 9. NBP Kisan Dost 10. NBP Pak Remit 11. NBP Protection Shield 3.1. Premium Aamdani 38
  39. 39. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Feather • Earn up to 12.25% p.a. • Minimum deposit of Rs. 20,000/- with maximum balance of Rs. 10 million for 5 years • Free Demand Draft, Pay Order and Cheque Book* • Convenience of NBP online Aasan Banking (for online banking customers) • Free NBP Cash Card (ATM+Debit) • Running finance facility up to 90% • Profit paid every month as follows Profit rates are expected Year Profit Rates % 1st 11.25 2nd 11.50 3rd 11.75 4th 12.00 5th 12.25 3.2. NBP Premium SaverVER 39
  40. 40. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Feather 1. Earn up to 8.50% p.a. 2. Minimum saving balance of Rs. 20,001/- & a maximum balance of Rs. 1million*. 3. Free NBP Cash Card (ATM + Debit). 4. Convenience of NBP Online Aasan Banking (for online banking customers). 5. Two debit withdrawals allowed in a month & no limit on number of deposit transactions. 6. Profit calculated on monthly and paid on half yearly basis. 3.3. NBP Saibaan  Home Purchase  Home Construction  Home Renovation  Purchase of Land + Construction Home Purchase& Home Construction Financing Amount Upto 35 million Financing Period 3 to 20 years Debt to Equity 85: 15 (Maximum) Home Renovation& Purchase of Land Financing Amount Upto 15 Million 40
  41. 41. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Financing Period 3 to 15 Years Debt to Equity 80:20 (Maximum) Eligibility *  Must be Pakistani Resident (National)  Aged between 21 and 65 years at the time of application/disbursement of loan.  Salaried Person, Self-employed professionals and businessmen.  Minimum income requirement Rs. 5000 for Govt. Employees, Rs. 10,000 for other salaried persons and Rs. 15,000 for self employeed and businessmen.  Property located in NBP approved localities.  Service duration: Two years for salaried class Three years for self- employed/business class. Required document With Applications Form ** Two attested passport size photographs • Two attested copies National Identity Card • Cheque for the processing charges 4.4. NBP Advance Salary In January 2003 National Bank of Pakistan has launched a unique product, NBP Advance Salary. Currently this product is for fixed income permanent employees of 41
  42. 42. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Federal & Provincial Government, Semi-Government, Autonomous, Semi- autonomous, local bodies and other Government organizations NBP Advance Salary, the leading personal loan product of the country, is maintaining its inimitability ever since it was launched. This was only possible due to its swift growth and remarkable loan disbursement of over 138 billion. You can avail up to 20 net take home salaries with easy repayment installments. Its hassle free acquisition with no prior formalities and easy availability in a short turn- around time is attributed as the most distinguishing features of the product. The product is offered country wide . • Easy installments of 1 to 60 months at your choice. • No minimum income, collateral & insurance charges required. • Quick processing and fastest disbursement. • For permanent employees of Government, Semi Government and Autonomous bodies receiving salaries through NBP. Terms and Conditions Permanent Employees of Govt., Semi-Govt., Autonomous, Eligibility Semi Autonomous, Local & other bodies who are maintaining their Salary A/Cs at NBP. Repayment Direct deduction from Salary A/C Maximum Loan Amount Rs. 490,000/- Max. Repayment 5 years (60 months) Period Advance in terms of # of net take home Up to 20 net take home salaries salaries 42
  43. 43. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Markup Rate SBP Discount Rate + 5% Processing Fee 1% of Loan Amount Verification Charges Rs 500/- Life Insurance No Insurance of any kind. Documentation at actual Charges Contact Your Salary disbursing NBP Branch. At the time of approval and disbursement the Remaining Service applicant’s ,,remaining service age should be 6 Age months after maturity of the ..loan 3.5. Cash card+ ATM  Comfortable and secure environment for trading  NBP financing at very easy terms requiring minimum documentation  Minimum turn around time  No security requirement from the customer except for the customers equity  Customers equity freely available for investment.  Equity acceptable in cash Eligibility  Pakistani CNIC COPY  Over 21 years of age 43
  44. 44. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012  An account with NBP  Equity in the form of cash  NO default with any financial institution. NBP Cash Card Safety Tips Never share your Personal Identification Number (PIN) or given it out over telephone.  Never write your PIN Code on your card.  Never keep your card and PIN at the same place.  As you approach an ATM, beware of your surroundings, if you notice anything unusual, visit the ATM later.  Immediately report a lost of stolen card to your NBP branch.  Stand close to the ATM machine while entering your PIN and do not allow anyone to watch.  Ensure that the merchant has entered the correct amount of transaction before you enter your PIN code.  Maintain your POS receipt as a record and ensure that he card returned to you by the cashier/attendant is yours.  Protect your card from direct sunlight and magnetic fields.  Do not bend your card.  Carefully dispose off your old card when you are issued a new one. 3.6. NBP Investor Advantage A margin financing facility developed for retail investors in line with Government‟s efforts to promote Pakistani capital markets and will replace the Badla (COT) system 44
  45. 45. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 with a stable financing system in line with international financial markets. Besides offering a comfortable environment to the retail stock investors, a financing facility will also be available. Willing investors can avail NBP financing at very easy terms requiring minimum documentation and least turn around time. The NBP financing also does not require any security from the customer except for the customer‟s equity. Requirements of document  Photograph of Applicant  NBP Account - Current or PLS  Copy of CNIC  Copy of CNIC of Two (2) References  Borrower Basic Fact Sheet 3.7. Cash in Gold Meet your need for ready cash against your idle gold jewellery with no minimum or maximum limits. Facility of Rs. 40000/- against 10 grams of gold Feather  Rate of mark up 15.50% p. a.  Facility of Rs.40000/- against each 10 grams of net content of Gold.  NO maximum limits of cash.  Repayment after one year.  Roll over facility.  Only Gold ornaments are acceptable.  Weight and quality of Gold to be determined by NBP‟s appointed shroff Required documents  Photograph of Applicant 45
  46. 46. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012  Application form  NBP Account - Current or PLS  Copy of CNIC  Copy of CNIC of Two (2) References  Stamp papers five.  Open new account 3.8. NBP Kisan Taqat National Bank Pakistan Dairy Form Scheme Advantage to Getting Loan from NBP Very Near Banks Branch from you Easy and Short Paper working Get ride from the tension payment of Installments Experience Staff‟s Help and Guide 3.9. NBP KISAN DOST Agriculture Farming Program • Competitive mark-up rate. • Quick & easy processing. • Provision of technical guidance to farmers at their doorstep. • Wide range of financing schemes for farmers. • Finance facility up to Rs. 100,000/- for landless farmers on personal guarantee. • Financing available against Pass Book, Residential / Commercial property, Gold ornaments and paper security. 3.10. NBP Pakremit 46
  47. 47. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Pakremit is an internet based Home Remittance Service. This service is available to U.S. residents for sending money to their family and friends in Pakistan. One must have a valid US Dollar account with a U.S. bank or a US Dollar credit or debit card in order to remit funds through this channel. Remitters in USA 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. The 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. The 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 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. 3.11.NBP Protection Shield Insurance Coverage In case of Accidental Death (Including death due to *Riots, Strikes, Civil commotion, Acts of Terrorism and Natural Calamities like Flood, Earth Quake, Cyclones etc.) Coverage of Rs. 200,000/- for Rs. 20/- per month Definitions Provided the insured is not directly involved in these activities 47
  48. 48. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Accident Unintentional, unfortunate or a harmful event by chance or apparent cause. Accidental Death Death due to accidental injuries, but not illness. Insured Person A National Bank of Pakistan PLS account holder, aged between 18 years and above, and whose premium is deducted & details are reported to the selected insurance company by NBP. Policy Group Personal Accident Policy dated 26/09/05 executed between NBP and Insurer. Principal Sum The amount stated in the Policy‟s Schedule of Benefits as respects each Insured Person. Product Detail  No medical Required  No Documentation  Fixed Auto Premium deduction Facility (After customer consent)  Choice of Deactivation Eligibility  NBP PLS Account holder 48
  49. 49. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 Chapter no 4 DEPARTMENTS OF NBP MAIN BRANCH JARANWALA PAGE 43-55 49
  50. 50. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 DEPARTMENTS OF NBP MAIN BRANCH Departmentation is arranging the activities into meaningful groups. It distributes the workload and increases efficiency and effectiveness. Departmentation can be done on various bases for example, Departmentation for customers, by function or by location. National bank of Pakistan, Main Branch Jaranwala consists of various departments based on its different functions. So it can be said that the basis for Departmentation at NBP is purely functional. DEPARTMENTS OF NBP MAIN BRANCH JARANWALA NBP Main Branch Jaranwala is operating following departments 1. Cash Department 2. Deposits Department. 3. Advance Department· 4. Remittances Department. 5. Clearance Department 6. Govt. Collection Department 4.1CASH DEPARTMENT This department consisted of three sections namely. 1. Cash Receipts 2. Token Department 3. Cash Payments 1.1Cash Receipt In this section the cashier was receiving cash. He recorded the cash received with a pay in slip and other documents (it necessary) and recorded it in the cash receipt register. There were two separate types of pay-in-slips, which were used for depositing cash, checks, and drafts. There were prescribed forms in which the information was fed. After filling the pay-in-slip with the amount, the cash and slip 50
  51. 51. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 both were received by the cashier who entered those in the cash register and fixed a stamp on the pay-in-slip. A part of this slip is given to the customer for his record and other was maintained with the bank. 1.2Token Section As the checks holders were used to go to the section. They presented the checks to the person at the section. He checked that whether the check belonged to the same bank, the amount in words and figures were same, check was not outdated and the signature was there etc. Then he handled a number to the check and a token was given to the customer/check hold Cash Payments The check allotted with a number by the token department is sent to the clearing officer/passing officer. After the proper verification of the signature of account holder‟s, cash balances and posting of that particular check to the account, the check was passed to the cashier who ultimately called on the number fixed on the check. The customer bearing that token number arrived at the counter. The cashier checked out the number and paid the amount as per checks and entered number and amount in the cashbook maintained with him. The Negotiable Instruments. Act, 1881, “Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand”2. Since a Cheque has been declared to be a bill of exchange, it must have all its characteristics as mentioned in Section 5 of the Negotiable Instruments Act, 1881. Therefore, one can say that a Cheque can be defined as an: “An unconditional order in writing drawn on a specified banker, signed by the drawer, requiring the banker to pay on demand a sum certain in money to, or to the order of, a specified person or to the bearer, and which does not order any act to be done in addition to the payment of money”3. (Law of Banking by Dr. Hart, p.327). The Requisites of Cheque Define cheque 51
  52. 52. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 There is no prescribed form of words or design of a Cheque, but in order to fulfill the requirements mentioned in Section 6 above the Cheque must have the following. a) It should be in writing b) The unconditional order c) Drawn on specific banker only d) Payment on Demand e) Sum Certain in money f) Payable to a specific person g) Signed by the drawer h) Date on cheque i) Signature on back. Payments of cheque 1. Receiving of Cheques The cash is paid against the cheques of the client. The following points are important. Cheque is drawn on same branch Cheque is not post dated. Amount in words and figure are same. It should be bearer cheques so the word bearer should not cross. 2. Verification of signature. After receiving the cheques the cheques the operation manager verify the signature of the account holder and the signature on the cheques. If the signature is not same it is returned back otherwise forward to BBO Operator for posting. 3. Token assign. After verification of signature , a token given to the bearer of cheque for the of of payment of cheque. 4. Computer Terminal Process 52
  53. 53. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 The cheque is received in computer terminal, where BBO operator checks the balance of the account holder. The BBO operator also sees the stop payment instructions, whether received from account holder or not. After considering these points BBO Operator post the cheque in BBO (Branch back office system) and forward to operation manager. 5. Payment of Cash After posting the cheque the operation manager cancelled the cheque and returned back to cashier. The cashier enters the cheque in cash paid registered and pays against the second signature of receiver on the back of the cheque. 4. 2. ACCOUNTS DEPARTMENT In modern time, very few business enterprises are carried out solely with the capital of the owners. Borrowing funds from different sources has become and essential feature of today‟s business enterprises. But in the case of a bank, borrowing funds from the outside parties is all the more vital because the entire banking system is based on it. The borrowed capital of bank is much greater than theirs own capital. Bank‟s borrowing is mostly in the form of deposits. These deposits are lent out to different parties. The larger the difference between the rate at which these deposits are borrowed and the rate at which they are lent out the greater will be the profit margin of the bank Furthermore. larger the funds lent out the greater will be the return earned on them; and greater the amount of return the greater will be the profits of the bank. It is because of this interrelated relationship that deposits are referred to as the “life blood” of the bank Current account Current deposits are also called demand liability on current deposits. NBP pays practically no interest on current deposits. Businessmen usually open current accounts. In NBP current account can be opened with a minimum amount of Rs.500/-.  Minimum amount for opening this account is Rs.500  Any person can open the account with the bank  According to inter banks agreement interest is not paid on current account. 53
  54. 54. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012  Bank act as custodian of money  Over draft facility is provided to the customers  Customer can withdraw money through cheque supplied by bank Profit And Loss Sharing Account In general it is also called saving account .To provide interest free banking facilities in Pakistan, this type of account was introduced in January 1982 after the islamization of banking. The main features of this account are: -  Instead of having fixed return in the form of interest the deposited money will be shared in profit and loss of the bank.  One can open the account by depositing minimum Rs.100  Withdrawal is allowed 8 times in the month total not exceeding Rs.15000.  To withdraw a large amount a notice of 7 days to the bank is necessary.  There is not any kind of interest is provided on money deposited.  Rate of profit is declared at the close of each half-year. Fixed Deposit Account: This account is the major source of funds for the banks. This account is best for people who have surplus money and don‟t need such funds in nearer future. The money is deposited for a fixed period of time. Main features of this account are: -  Fixed amount is deposited for fixed period.  Amount of profit can be obtained after each six months.  Higher will be the time period, higher will be the rate of profit, and vice versa.  A receipt is used for the amount deposited called fixed deposit receipt.  Period of deposit can vary from 3 months to 5 years.  The amount can be withdrawn before maturity after surrendering interest.. Types of Accounts Holders. Following are the main categories of accounts.  Individual Account  Joint Account  Company Account  Club, Society, Association or Trust A/C 54
  55. 55. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012  Partnership Account i). Individual Account: Any account or proprietor of a business can open an individual account in National Bank Limited. PLS (Profit & Loss Sharing) Saving account can be opened without any minimum requirement. The client has to the following documents to the bank in order to open an individual account with the bank. One copy of National Identity The customer has to fill the account opening form and have to put his signature at the signature specimen cards and also have to fill the Cheque Book Application form. After the approval from the branch manager, the bank opens a new individual account. II). Joint Account When more than one person opens a single account, it is called joint account. The names of both persons are written on the title of the account at the signature specimen cards. One person cannot operate joint account. Both persons have to put their signatures on the Cheque in order to encash the Cheque.. iii). Company Account Public as well as Private Limited companies can open a bank account at the name of the company. They have to submit the following documents to the bank in order to open an account at their company‟s name.  One copy of Certificate of Incorporation  Memorandum of Association and Article of Association  List of Directors of the Company  Copy of Board Resolution  The Company‟s certificate of Commencement of Business (In case of Public Limited Company)  Signature Specimen Cards. iv). Club, Society, Association or Trust Any club, association or Trust can open an bank account at their own name. The requirements of the bank regarding this type of account are:  Copy of the rules of the club/ society  Copy of office Bearers  Certificate Copy of Resolution 55
  56. 56. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012  Copy of NIC  Name of person authorized to sign, their office, position and  Specimen signature. v). Partnership account Partnership account can also be opened with the National Bank Limited. Account title will be name of the partnership firm. Partners who are willing to become the authorized signature will have to sign the account opening form of the bank. Other requirements are  Copy of partnership deed  Copy of Registration Certificate  Specimen Signature Cards. Procedure to Open an Account Step by step 1.Get accont opening form 2.Filling the form 3.Submit form 4.Specimen signature 5.Account number 6.pay-in-slip 7.Initial deposit 8.Pass book 9.Cheque book 56
  57. 57. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 4.3. ADVANCE DEPARTMENT Advances department is one of the most sensitive and important departments of the bank. The major portion of the profit is earned through this department. The job of this department is to make proposals about the loans. The Credit Management Division of Head Office directly controls all the advances. As we known bank is a profit seeking institution. It attracts surplus balances from the customers at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms. Credit extensions are the most important activity of all financial institutions, because it is the main source of earning. However, at the same time, it is a very risky task and the risk cannot be completely eliminated but could be minimized largely with certain techniques. TYPES OF CREDIT FACILITY In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the form of cash finance, overdrafts and loans. NBP provides advances to different people in different ways as the case demand. a. Cash Finance b. Running Finance c. Demand Finance 4.3.1 Cash Finance This is a very common form of borrowing by commercial and industrial concerns and is made available either against pledge or hypothecation of goods, produce or merchandise. In cash finance a borrower is allowed to borrow money from the banker up to a certain limit, either at once or as and when required. The borrower prefers this form of lending due to the facility of paying markup/services charges only on the amount he actually utilizes. If the borrower does not utilize the full limit, the banker has to lose return on the unutilized amount. In order to offset this loss, the banker may provide for a suitable clause in the cash finance agreement, according to which the borrower has to pay markup/service charges on at least on self or one quarter of the amount of cash finance limit allowed to him even when he does not utilize that amount. 4.3.2 Overdraft/Running Finance 57
  58. 58. INTERSHIP REPORT on NBP BY MIRZA IHSAN ULLAH #306-3332407 2012 This is the also a common form of bank lending. When a borrower requires temporary accommodation his banker allows withdrawals on his account in excess of the balance which the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is generally allowed against collateral securities. When it is against collateral securities it is called “Secured Overdraft” and when the borrowing customer cannot offer any collateral security except his personal security, the accommodation is called a “Clean Overdraft”. The borrowing customer is in an advantageous position in an overdraft, because he has to pay service charges only on the balance outstanding against him. The main difference between a cash finance and overdraft lies in the fact that cash finance is a bank finance used for long term by commercial and industrial concern on regular basis, while an overdraft is a temporary accommodation occasionally resorted to. 4.3.3Demand Financing/Loans When a customer borrows from a banker a fixed amount repayable either in periodic installments or in lump sum at a fixed future time, it is called a “loan”. When bankers allow loans to their customers against collateral securities they are called “secured loans” and when no collateral security is taken they are called “clean loans”. The amount of loan is placed at the borrower‟s disposal in lump sum for the period agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a fixed amount of money for his use, while the banker feels satisfied in lending money in fixed amounts for definite short periods against a satisfactory security 4.4 .REMITTANCES DEPARTMENT NBP also provides facility of money transfer. NBP uses all the three means to transfer money. This department is also known as Bills department 4.4.1 Bank or Demand draft: Demand draft is a popular mode of transfer. The customer fills the application form. Application form includes the beneficiary name, account number and a sender‟s name. The customer deposits the amount of DD in the branch. After the payment the DD is prepared and given to the customer. NBP officials note the transaction in issuance register on the page of that branch of NBP on which DD is drawn and will prepare the advice to send to that branch. The account of the customer is credited 58

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