Internship Report

Internship Report
ON NATIONAL BANK OF PAKISTAN

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Internship Report
On
National Bank of Pakistan
By
Muhammad Abdul Aziz Sadiq
Masters of Commerce
Department of Commerce
University of Sargodha

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Preface
Being a student of commerce in University of Sargodha, it is an integral and
inevitable part of my studies to get internship in the organizations to get oriented
with the corporate culture to learn the ethics and conventions applied there. This
provides the student an immense opportunity to evaluate themselves in the
practically exercised philosophies where the students come by a chance to explore
their qualities and pin point the loop holes which can give rise to some problems in
their future and to rectify these weak areas before they may assume alarming
proportions.
I have completed my internship in the National Bank of Pakistan, Main Branch
Civil Lines, Sargodha. Where I got this opportunity to observe the difference
between the theoretical and practical worlds from a very close quarter as to there
lies a gulf between the theoretical and applied approaches. Whatever can be learned
from can be rarely been had from the theory only.

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Acknowledgement
All praise to Allah, the most merciful, kind and beneficent, and the source
of all knowledge, wisdom within and beyond my comprehension. He is the
only God, who can help us in every field of life. All respect and possible
tributes goes to my Holy Prophet Muhammad (SAW), who is forever
guidance and knowledge for all human beings on this earth.
I am greatly indebted to my learned teachers, Sir Zaman, Sir Zahid, Sir
Javed, Sir Shahzad, Sir Rafi, Sir Mati-ur-Rehman who had great
influence on me during my formative years. This report reflects the
knowledge which I have gained from my valuable teachers. I acknowledge
with deep gratitude the invaluable help extended to me by Mrs., one of
the officer of the National Bank of Pakistan, without her co-operation it
was not possible for me to complete my Internship. She guided and helped
me and specially the sympathetic attitude, which always inspired me for
hard work.
I am very thankful to Mr. Ghulam Qadir Jaam Manager of National Bank
Main Branch, Sargodha and all the bank staff for their cooperative attitude
during my internship.

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Dedication
I dedicate this report to my parents, it is because of their prayers and love that I have
come this far in my life. Also to my brothers for their support and guidance in every
step of life.

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Contents
Executive Summary 7
Introduction 8
Overview of Organization 9
History of Bank 11
Organizational Structure 13
Geographic Department 15
Process Department 16
Customer Department 16
Management Structure 20
Central Board 20
Local Board 21
CorporateInformation 24
Board of Directors 24
Senior Management 25
Auditors 43
Legal Advisor 44
Departments of Branch 44
General Banking Department 45
Advance Department 53
Accounts Department 62
Government Department 68
Work as Internee 71
Financial Analysis 72
Financial Data 72
Horizontal Analysis 72
Vertical Analysis 72
Ratio Analysis 72

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SWOT Analysis 73
Strengths 73
Weaknesses 74
Opportunities 74
Threats 74
Findings 75
Problem at Branch 75
Functional Problems 76
Admin Problem 77
Personal Management 78
Recommendations 79
Conclusion 80
Appendix 81

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Executive Summary
Internship is very important for us, the students of commerce. It does not only provide
us with the best opportunity to experience the rituals of corporate sector, but also helps
us to enhance our observation about how things move around us. Spending a short
period of 6 weeks with Pakistan’s one of the best-known employer and leading banks
was a fantastic experience for me. I gained a handsome extent of practical knowledge
there. This all added a lot into my exposure and self-grooming.
To become successful in practical life, practical knowledge and experience is very
much important. Because course contents and lectures just give us theoretical concepts
but not practical knowledge. This is the basic reason why students of M.com are
required to spent six to eight weeks in diverse organizations to learn the work ethics of
organizations and gain practical knowledge.
This internship report is based on my six weeks spent working and learning in National
Bank of Pakistan, Main Branch Sargodha. The report discusses overview of National
Bank of Pakistan and my work therein. It illustrates history of the bank and the
departments of the organization. Practical work during internship period in various
departments is also discussed. I learned about export department working, various types
of accounts and clearing process. In the end findings and recommendations are given
for improvements.

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Introduction of the Bank
National Bank of Pakistan (NBP) is a major Pakistani commercial bank with headquarters
in Karachi. Although state-owned,it operates as commercial bank, while still continuing 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, as SBP is the major shareholder of NBP.
The bank provides both commercial and public-sector banking services. It is a lead
player in the debt equity market, corporate investment banking, retail and consumer
banking, agricultural financing, treasury services. As of March 2017 it has
1,450 branches across Pakistan with assets of approximately USD 17.2 billion. The
Bank also operates a network of 21 international branches, 2 international Subsidiaries
and 3 international Representative Offices. The Bank also has presence in the UK
through United National Bank Ltd (UNBL), a banking institution incorporated in the
UK.
National Bank of Pakistan has developed a wide range of consumer products, to
enhance business and cater to the different segments of society and meet its social
responsibilities. Some schemes have been specifically designed for the low to middle
income segments of the population. It has implemented special credit schemes like
small finance for agriculture, business and industries, administrator to Qarz-e-Hasna
loans to students, self-employment scheme for unemployed persons, public transport
scheme. The Bank has expanded its range of products and services to include Shariah
Compliant Islamic Banking products. It has also put in place a remittance service for
overseas Pakistanis to send their money back to Pakistan.

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Overview of the Organization
Vision
To be a Leading Bank for Partnering in Financial Growth through Innovation and
Service
Mission
To Be A Catalyst For Economic Growth, Serving the Nation Through Diversified
Product Offering, Innovation, Superior Service Quality, Universal Banking
Capabilities, Multiple Delivery Channels, Investment in People And Processes and
Work Towards Sustainable Higher Returns for Stake Holders
Core Values
 People - We will Continue to Value Our People and Weill Reward
Performance
 Service - Our Main Focus will be on Providing Superior Service Quality
Through Diversification and Development
 Integrity - We Will Not Compromise on Integrity - Zero Tolerance for
Corruption and Believe in Doing the Right Thing
 Respect - We Respect Our Customers’ Needs, Beliefs and Values, Working
Towards their Benefit
 Excellence - We Will Continue to Strive for Excellence in All That We Do

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GOALS
To enhance profitability and maximization of NBP share through increasing leverage
of existing customer base and diversified range of products.
Excellence in Direction
Excellence in Growth
Excellence in Performance
Excellence in Management
Excellence in Achievement
Role of the organization in Pakistan
NBP is playing a vital role in development of Pakistan. It is making a pioneer role in
development of agriculture sector which is the main production sector in Pakistan. As we
all know that agriculture sector is major part of our exports e.g cotton ,sugar , rice, wheat,
etc. so it helps to major part of foreign ecxhange through our exports. The nature of
responsibilities of the Bank is different and unique form othe banks. 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

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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.
History of the Bank
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 to cope with the crisis conditions which
were developed after trade deadlock with India and devaluation of Indian Rupee in
1949. 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 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.
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.
The Bank has also played an important role in financing the country’s growing trade,
which has expanded through the years as diversification took place.
The precise summary of National Bank of Pakistan regarding its countrywide and
overseas operations is as follows:
 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. It
also undertook government treasury operations. Its first branches in jute growing
areas in East Pakistan. Offices in Karachi and Lahore followed.
 1950 NBP established a branch in Jeddah, Saudi Arabia.

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 1955 By this time NBP had branches in London and Calcutta.
 1957 NBP established a branch in Baghdad, Iraq.
 1962 NBP established a branch in Dar es Salaam, Tanganyika.
 1964 The Iraqi government nationalized NBP's Baghdad branch.
 1965 The Indian government seized the Calcutta branch on the outbreak of
hostilities between India and Pakistan.
 1967 The Tanzanian government nationalized the Dar es Salaam branch.
 1971 NBP acquired Bank of China's two branches, one in Karachi and one
at Chittagong. At separation of East Pakistan NBP lost its branches there. NBP
merged with Eastern Mercantile Bank and with Eastern Bank Corporation.
 1974 The government of Pakistan nationalized NBP. As part of the concomitant
consolidation of the banking sector, NBP acquired Bank of Bahawalpur.
 1977 NBP opened an offshore brain Cairo.
 1994 NBP amalgamated Mehran Bank.
 1997 NBP branch in Ashgabat, Turkmenistan commenced operations.
 2000 NBP opened a representative office in Almaty, Kazakhstan.
 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 International Bank, of which NBP would own 45%
and United Bank 55%.
 2002 Pakistan International Bank renamed itself United National Bank Limited
(UNB). The ownership structure of the UNB remained as before. The 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 Abu Dhabi.
 2003 NBP opened its branch in Kabul, and the first ATM in Afghanistan was
installed there.
 2005 NBP closed its offshore branch in Cairo.

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 2010 NBP opened its branch in Karaganda (Kazakhstan).
 2011 NBP opened its representative office in Toronto (Canada).
OrganizationalStructure
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 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.
In National Bank of Pakistan, the head is called “Chairman” or “President” of the Bank.
And after President there is Five Broad of Directors. National Bank of Pakistan has
eleven Groups which control the working of the Divisions, Wing, Department, Section
and Regional of the national bank of Pakistan. In NBP, “Department” is called
“Wings”.
National bank of Pakistan divided their task in to separate jobs. Basically national Bank
of Pakistan having different groups, and each group perform different task

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specialization in their department. National Bank of Pakistan Categories their
departments through their work specialization. And NBP hire their employees also
through work specialization. The following Chart shows the Work Specialization in the
bank. HRM & Administration, Operation, Commercial & Retail Banking, and I.T
Group are performing different working in the Organization.
Chairman &
President
Corporate &
Investment
Banking Group
Credit
Management
Group
Audit &
Inspection
Group
Compliance
Group
Board of
Directors
President’s
Secretariat
Secretary
Board of
Directors
HRM &
Administration
Group
Operation
Group
Commercial &
Retail Banking
Group
Treasury
Management
Group
Special Assets
Management
Group
Overseas
Management
Group
I.T. Group

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National Bank of Pakistan is structurally divided into Groups and groups are also
subdivided into Departments, Wings, and Divisions. National Bank of Pakistan has
different Department in the Group and each department performing work, as their task
assign. Department also subdivided into working bases.
GEOGRAPHIC DEPARTMENT
HRM &
Administration
Group
Operation
Group
Commercial &
Retail Banking
Group
I.T. Group
Administration
Wing
Credit
Monitoring
Wing
Industrial
Research
Wing
Credit Policy &
SME Wing
Credit Management
Group
Special Assets
Management Group
(Geographic Deptt)

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PROCESS DEPARTMENT
CUSTOMER DEPARTMENT
SAMG - North
(Lahore)
SAMG – South
(Karachi)
SAMG – Head
Office
Administration
Wing
SBP Inspection Market &
Liquidity Risk
Credit Risk
Compliance Group
(Process Deptt)
Customer
Facilitation &
Admn.
CustomerServices
& Govt. Business
Financial Institutional
& Cash Management
Operation Group
(Customer Deptt)

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National Bank of Pakistan (NBP) provides Services through more than 1200 branches
in Pakistan and 22 branches in overseas. And there are 29 Regions. All Branches of
National Bank of Pakistan report to five Head of RMT Members. And these five
members reported to regional Offices. Regional Offices report to the Group Chief of
the Groups. All the process is working very quickly and it not consume more time. And
the Group Chief of each Group Report to the President of the National Bank of Pakistan.
All the data were proceed to the President of the bank.
Operation Group
Chief
HRM Group
Chief
Audit &
Inspection
Group Chief
Compliance
Group
South
Region
North West Region East Region Overseas
Reg
Head 1 Head 2 Head 3 Head 4 Head 5
Branch 1 Branch 2 Branch 3 Branch 4 Branch 5
Chairman &
President

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National Bank of Pakistan is relatively Wide span of control and Flat Structure.
National Bank of Pakistan are less layers of management to pass a message through, so
the message reaches more employees faster. More skillful Group Chief Managers can
control a greater number of employees. National Bank of Pakistan assess that the
internal Control environment is showing signs of improvement as compared to previous
year in all areas of the Bank.
National Bankof Pakistanis having Decentralization in the Bank.And givethe authority
of Decision Making to their Group Chief of every Group, to take decision, which is
benefit for the Organization. National Bank of Pakistan provides facility of making
decision to their Senior Vice President as well as Vice President of the every Group.
Chairman & President
HRM Group Operation CMG TMG
OD Wing IRD Wing T & S Wing Tech Wing C. M Wing Admn.
Wing
C. M Wing Admn.
Wing
President (NBP)
Group Chief (Group)
SVP or VP (Group)
AVP (Group)
Grade Officers (Group)

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National Bank of Pakistan has low Formalization in the bank. And Employees are free
to act or decision in their work specialization. Employees are follow the rules and
regulation in the bank is very little formalized. Employees’ behavior is little bit guided
by rules and regulation.
National Bank of Pakistan follow the Organic Model Organization. In NBP, there are
Cross- Functional teams, as well as Cross-hierarchical teams. There are free flow of
information and Wide span of Control. NBP is Decentralization in nature and very low
formalization in the bank. Basically, National Bank of Pakistan is high Diagonal
Differentiation and every employee of any department can easily communicate to other
department of the Bank.
Management of Organization
Management is a distinct process consisting of activities of planning, organizing,
actuating and controlling performedtodetermineand accomplish stated objectiveswith
the use of human being and other resources.
MANGEMENT SYSTEM
The management has two types.
 Centralized
 Decentralized
Centralized Management tends to concentrate decision making at the top of the organization
Decentralized disperses decision making and authority throughout and further down the
organizational hierarchy.
NBP have a centralized type of management because all the decisions are taken
by the top management.

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Management Structure
Central board
The general superintendent and direction of the affairs and business of the bank shall
be entrusted to the central board which may exercise all powers and things as may be
exercised or done or done by the bank and or not by this ordinance expressly directed
or required to be done by the bank in general meeting.
The Central board consist of the following directors namely:
 Managing director
 President
Managing Director
The Managing director appointed by the central government under section 16, nine
directors is directed in local or special meeting by the shareholder in the following
manners. The shareholder registered in a branch, register maintained for an area
mentioned in sub section (5) of section 8, shall elect from amongst themselves, such
number of directors for that area as may be decided before election by the central
government having regard to the proportion which that share capital subscribed by the
shareholders of that area bears to the whole. Provided that shareholders registered in
branch register maintain at Dacca shall elect from among themselves at least two
directors.
Three directors appointed by the central government, provided that total number of
elected directors representing the area for which the Decca register is maintained shall
not be less than three.
President
The president of a Central board shall be appointed by the central government from
among the directors.

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Local Board
The local board shall be established for the area mentioned in sub section (5) of section
B , one each at Karachi ,Dacca and the Lahore ,and shall without prejudice to the powers
conferred by the sections 12, have power ,within the prescribed limits generally to
transact all usual business of the bank. A local board should consist of following
members namely;
 The Managing director
 One member appointed by the central board from amongst the directors
elected by the share holder register in the branch register of the area.
 Two members appointed by the central government from the area in which
the local board is situated.
 Three members elected in local or special board meeting from among
themselves by the shareholder register in the branch register of the area.
The Managing director shall be appointed by the central government for a period not
exceeding five years and on such salary and terms and condition of the service as the
central government may determined.
New Management Structure
The previous management was removed by the bank nationalization ordinance 1974.
the general direction and superintendent of the affairs and business of the banks vests
in the Executive board consisting of President (Chief executive) and five senior
executives of the bank . The federal government in 1980 constituted a board of directors
comprising the president and the members of executive board of the bank and two
additional members one representing the ministry of finance and the other Pakistani
banking council.
Thus therefore, all nationalized commercial banks are controlled by the Pakistani
banking council being subject to State bank of Pakistan regulation as well. The federal

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ministry is responsible for bank operations in the ministry of finance. Recently by the
order of president of Pakistan, banking council of Pakistan is removed.
Board of Directors.
An executive board composed of six senior executives of the bank and the president
who is also the chief executive supervises the affairs and business of the bank, called
the Board of Directors.
Role of Directors
The responsibilities of Directors include the followings;
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. it
should be ensured that the Board of Directors focus on policy making and general
direction, oversight and supervision of the affairs and business of the Bank and
does not play any role in the day-to-day operations, as that is the role of the
Management.
2. The Board shall approve and monitor the objectives, strategies and overall business
plans of the institution and shall oversee that the affairs of the institution are carried
out prudently within the framework of existing laws & regulations and high
business ethics.
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 both the
Directors and the Senior Management without delegating its policy-making
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 area which the Board may

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6. deem appropriate from time to time. The Board shall also be responsible to review
and update policies periodically and whenever circumstances justify.
7. About 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.
8. 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,
operating performance and financial condition of the institution, the environment
in which it operates, the various risks it is exposed to and to evaluate performance
of the Management at regular intervals.
9. 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.
10. 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.
11. To share the load of activities, the Board may form specialized committees with
well-defined objectives, authorities and tenure. These committees, preferably
comprising of ‘Non- Executive’ Board members, shall oversee areas like audit,
risk management, credit, recruitment, compensation etc. these committees of the
Board should neither indulge in day-to-day affairs/operations of the bank and enjoy
any credit approval authority for transaction/limits. These committees should
apprise the Board of their activities and achievements on regular basis.
12. 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

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weaknesses identified in the management letter. A copy of that letter should be
submitted to the State Bank of Pakistan so that it can monitor follow-up actions.
Management Committee:
Also, there is a Management Committee consisting of nine senior executives of the
bank, called the members and the president who is also the chairman of the committee.
Training and Management Development Wing
National bank of Pakistan has its national and development centers and 4 staff collages
at: -
 Karachi
 Lahore
 Peshawar
 Islamabad
In these centers and staff colleges, the banking training is provided to the officers,
managers, and to potential managers. It arranges courses and seminars for middle and
higher management in all. Each year almost 1500 persons receive training over there.
Corporate Information
Board of Directors
Mr. SaeedAhmad President and Chief Executive Officer
Mr. Fareed Malik Director
Mr. Muhammad Imran Malik Director
Mr. Mir Balakh Sher Marri Director
Mr. Asad Munir Director
Mr. Muhammad Naeem Director
Mr. A. Akbar Sharifzada Director
Mr. Syed Muhammad Ali Zamin EVP, Secretary Board of Directors

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Senior Management
The senior management of National Bank of Pakistan is consisting of Group chiefs,
who report directly to the Directors of Bank. The whole functions of National Bank of
Pakistan are performed under these Groups. The National Bank of Pakistan has
following groups and divisions:
Corporate and investment Banking Group
Operations Group
Credit Management Group
Audit & Inspection Group
Compliance Group
HRM & Administration Group
Commercial & Retail Banking Group
Treasury Management Group
Special Assets Management Group
Employees benefit & Disbursements Group
Overseas & Coordination Group
Islamic Banking
Core Banking Application, PMO
Financial Control Division
Information Technology Group
SaeedAhmad President & Chief Executive Officer
Mudassir H. Khan SEVP & Group Chief, Payment
Services & Digital Banking Group
Tariq Jamali SEVP & Group Chief, Assets Recovery
Group
Zahid Mehmood SEVP & Group Chief, Human
Resources Management Group
Aamir Sattar SEVP & Group Chief, Audit &
Inspection Group

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Sultana Naheed SEVP & Group Chief, Credit
Management Group
Muhammad Faraz Haider SEVP & Group Chief, Compliance
Group
Risha Ameen Mohyeddin SEVP & Group Chief, Treasury &
International Banking Group
Shahid Saeed
SEVP & CIO, Information Technology
Board
Syed Jamal Baquar
SEVP & Group Chief, Corporate
Banking Group
Rehmat Ali Hasnie
SEVP & Group Chief, Investment
Banking Group
Abdul Wahid Sethi
SEVP & CFO, Financial Control Group
Asim Akhtar
EVP & Head (A), Commercial & Retail
Banking Group
Mohsin Furqan
EVP & Head (A), Operation Group
S. H. Irtiza Kazmi
EVP & Divisional Head, Home
Remittance Division
Faisal Ahmad Topra
EVP & Divisional Head(A), Service
Quality Division
Shahid Iqbal Dar
EVP & Head Logistic Support Group
Khawaja Muhammad Aminul Azam
EVP & Head Islamic Banking Group
Ovais asad Khan EVP - Divisional Head, Strategic
Marketing Division/CSR & Sports
Division
Amir Zareef Khan
EVP & head, Legal Division
S.M. Ali Zamin
EVP, Secretary Board of Directors &
Secretary Credit Committees
Mirza Babar Baig
EVP & Principal Staff Officer(PSO) to
President
Saleem Ahmad
SVP & Head (A), Risk Management
Group
Ansar Raza Goraha
SVP & Divisional Head, Learning and
Management Development Division
1. Corporate & Investment Banking Group
The corporate & investment banking group is headed by Mr. Masood Karim Shaikh.
This group performs its function through its following two units:
Corporate Banking
Investment Banking

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The corporate and investment banking will continue to play a major role in loan
syndications, structured financing and debt / capital raising transactions with the
objective of providing entire range of corporate and investment banking solutions to
its valued clients under one umbrella.
The Corporate Banking Group achieved excellent results in 2007 with many landmark
transactions in cement, energy, communication and fertilizer sectors. In addition to
the funded income, our corporate and investment banking has substantially increased
its fee base income this year by being the lead advisor in a number of transactions in
the corporate world of Pakistan
The challenges to corporate business in year 2007 were manifold including reduction
in Private Credit Investment as a result of slowing down of economy as well as rising
interest rates. The increasing pressure on the textile industry reduced the lending to
this sector. In addition the bank's corporate loans yields also faced pressure as
substitute form of funding sources are available in the market in form of Islamic
financing, mutual funds, issuance of debt instruments like TFCs and Bonds and the
Capital markets.
Despite these threats and challenges at NBP, our corporate team not only increased
the volume as well as the yield of the loans they also maintained a strong franchise
with the leading Pakistani corporate so as to ensure that NBP not only maintains its
market share but is in a position to meet any challenges in future. NBP during the year
also participated in a number of TFC issues and mutual funds subscriptions thereby
increasing the overall yield on investment portfolio.
NBP has the largest equity portfolio in the banking sector primarily due to 27%
holding in NIT units, the largest mutual fund in Pakistan. During the year 2008 the
bank redeemed 10% of its NIT holding covered under LoC, which resulted in capital
gain of Rs. 1.8 billion in 2008.
The National Bank of Pakistan has initiated a structured approach to corporate
banking by introducing a single point of contact through Relationship Managers. For
this purpose, new Relationship Managers as well as team leaders has been inducted to

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expedite this process. The Area Managers of National Bank of Pakistan are appointed
to manage relationships and to better service the needs of multinationals and large
local corporate. An investment banking team has also been formed by National Bank
of Pakistan to offer specialized services to major relationships including advisory and
debt syndications. The National Bank o Pakistan have special focus on Corporate
Banking with a presence in all major locations through out the country, offering full
range of Banking products / services and one window interface through designated
Relationship Managers. Corporate Banking offers tailor made products / solutions as
required by corporate customers which includes:
The key features of corporate Banking includes:
Funded facilities, ranging from short to medium and long term lending
Trade related financing.
Foreign currency financing.
All sorts of non-funded facilities / services which include Cash receipts /
payments, Remittances, Collections, guarantees, letter of credit etc.
Customized products / solutions
2. Compliance Group
The Compliance Group of National Bank of Pakistan is headed by Mr. Ziaullah Khan
and is report directly to the President/ Chief executive of NBP. In order to keep the
working of Audit Department aligned with the best international practices
'Compliance Group’ has been created. This group is responsible for monitoring
compliance of various administrative / operative instructions, rules, and regulations by
constantly reviewing and reporting status of compliance and non-compliance. The
Compliance Group of NBP is set to ensure that all relevant laws are complied with, in
letter and spirit, and, thus, minimize legal and regulatory risks. The Compliance
officers will primarily be responsible for Bank’s effective compliance relating to:
Relevant provisions of existing laws and regulations.
Guidelines for KYC.

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Anti-money laundering laws and regulations.
Timely submission of accurate data / returns to regulator and other agencies.
Monitor and report suspicious transactions to President / Chief Executive
Officer of the bank and other related agencies.
The Compliance Officers will serve as a contact point between President /Chief
executive officers and senior management, about functioning of compliance
program provide assistance in this area to branches and other departments of the
bank, and act as liaison with State Bank of Pakistan concerning the issues
related to compliance.
The functions of compliance group of National Bank of Pakistan are as follows:
Study and emphasize compliance of best international practices in audit of
various functions of NBP.
Monitor compliance of Administrative/Operational Instructions, Rules,
Regulations issued from time to time by the Management.
Review over the compliance carried out by the audit departments.
Prepare and put up a consolidated Report to the Directors of National Bank of
Pakistan regarding the status of compliance and non-compliance of the
recommendations agreed by the Departmental Management.
3. Islamic Banking Group
The divisional head of Islamic Banking group is Mr. Anwar Ahmed Meenai. Islamic
Banking is one of the emerging field in global financial market, having tremendous
potential and growing at a very fast pace all around the world. Al-Hamdulillah, the
progress of Islamic Banking in Pakistan has also been commendable during the last
Five years. The year 2007 marked the first year of Islamic Banking operations.
During the year under review, in addition to active participation in various Sukuk
transactions, two more Islamic Banking branches at Lahore and Peshawar started
operations. NBP's plans for the year 2008 include opening of Faisalabad and
Rawalpindi branches with the focus on growing organically by opening more
standalone Islamic Banking branches, utilizing NBP's existing branch network of

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1,200 plus conventional branches and looking into strategic acquisitions for expansion
in this field. The products & services being offered by National Bank of Pakistan’s
Islamic Banking are fully Shariah Compliant and have been certified by NBP’s
Shariah Advisor. Deposit Schemes being offered by NBP’s Islamic Banking Branches
include the following:
a) Current Deposit Scheme
b) Profit & Loss Sharing (PLS) Deposit Scheme
Commercial and Corporate customers requiring financing will have the following
financing facilities available to them to meet their requirements:
a) Murabaha
b) Murabaha Facility
c) Ijarah (Leasing)
In addition to Shariah acceptable standard general banking services, following
services are also being offered at the Islamic Banking Branches:
Letter of Credit Facility
Handling of Remittances
Issuance of Bank Drafts and Pay Orders.
Collection of Export Bills.
Collection of Local Bills.
Government Collections
Utility Bills Collection
4. Treasury Management Group
The group chief of Treasury management group of National Bank of Pakistan is Mr.
Muhammad Nusrat Vohra. The NBP treasury and capital market group has developed
a reputation of being the market leader in coming up with customized solutions for a
large and varied client base that is spread virtually all across the country. The client
base does not consist of only blue chips ones but encompasses public sector clients,
retail sector, multinationals, local conglomerates as well as individuals.

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National bank treasury is currently regarded as a market leader in both foreign
exchange and rupee denominated products because of its emphasis on service quality.
The Treasury management group of National Bank of Pakistan’s offer:i
Narrowest bid / offer spread and quickest on line quotes
Customized solutions to minimize risk and optimize returns as per the needs
and circumstances of the clients
Focus on building sustained and long term relationship with institutional,
corporate and retail clients.
Local presence across the nation as well as internationally.
Currently the National Bank of Pakistan offer following Treasury Products:ii
a) Plain Vanilla FX Products
NBP Treasury Management Group is a market price maker and trend setter in the
plain vanilla Foreign Exchange products. Its ability to offer tight prices, coupled with
timely and accurate research making it a bank of choice for clients seeking to
favorably position their currency risk As a result, National bank has one of the largest
FX book in the country.
b) Pakistan Investment Bonds
Pakistan Investment Bonds issued by Government of Pakistan are a preferred means
for a majority of institutional investors to invest their surplus funds for a longer time
horizon. This way they are able to lock a higher yield for a relatively long term rather
than take the risk of re-pricing after relatively shorter time periods. Furthermore, PIBs
are highly secured and risk free as they are guaranteed by the government of Pakistan.
NBP is the leading Primary Dealer for PIBs primarily because of its inventory size
and the appetite for such a long-term instrument given its deposit base. While most
foreign / private banks would have to go to the secondary market in order to satisfy a
large order from an institutional investor, NBP can execute such large orders through
its own book. This means that it can offer tight prices for large amounts even under
volatile market conditions.

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c) Derivatives Products
NBP treasury Management group has been at the forefront in developing the
derivatives market in Pakistan and has contributed both individually and from the
FMA (Financial Market Association) front as well. The first ever Derivative
transaction of the Pakistani banking sector was done by NBP. Some of the more
common derivative structures being offered include:
1) Currency Options
An option gives the buyer the right but not the obligation to buy or sell an asset at a
pre-specified date and price. So, the upside profit potential is unlimited whereas the
downside loss is protected at a pre-determined level. Various structures of currency
options are available including
Knock-ins / Knock outs
Participating Forwards
2) Interest Rate Swaps and FRAs
A client can convert a fix rate loan into floating rate one or vice versa by using these
derivative instruments. This allows the clients to develop and implement their views
about the evolving interest rate scenario. For example, if the borrower feels that the
interest rate might go up in the future, than he may choose to enter into a Pay Fixed –
Received Floating swap with its bank to effectively hedge its floating rate loans.
3) Cross Currency Swaps
This product allows a client to convert its rupee based loans into a dollar based loan.
The client’s exposure is shifted from PKR KIBOR to USD LIBOR.
The functions of Treasury management group include:
The Management of National Bank of Pakistan’s holdings in and trading in
government and corporate bonds, currencies, financial futures, options and
derivatives, payment systems and the associated financial risk management.

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The management of cash flows, banking, money-market and capital-market
transactions; the effective control of the risks associated with those activities;
and the pursuit of optimum performance consistent with those risks.
Presentations of information on which treasury-management decisions are to be
taken reflect the principles of trustworthiness, honesty, truthfulness and
objectivity.
Employing National Bank of Pakistan’s treasury-management policies and
practices accurately reflect the legal and regulatory regimes under which the
Bank operates.
Review of National Bank of Pakistan’s treasury-management policies and
practices on a regular basis with a view to identifying ways of minimizing the
risks of losses through improved checks and safeguards and through clarity and
segregation of responsibilities and dealing procedure.
5. Credit Management Group
The group chief of Credit Management Group is Mr. Shahid Anwar Khan. This group
usually deals with Bank’s allocations of payments or cash application, internal fund
movements, reconciliations and also maintaining positive working relationships with
customer during the debt collection or credit review and approval process, screening
of customers and only those who is credit worthy are allowed to do business. The
divisions of this group are distributed according to different areas which are:
1) NWFP Azad Kashmir Sind & Balochistan area wing
2) Karachi area wing
3) Special Credit Cell & Punjab area Wing
The functions of this department include:
Enforcing the State Policies, financial regulations, and credit rules of the bank
Framing credit policies and regulations; supervising the staff to execute orders
Putting forward the proposal of credit management and development; guiding
and supervising the branch-banks to deal with credit business

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Managing the authorized business; dealing with the legal affairs consulted and
coordinated
Establishing development rules on credit; dealing with the acceptance draft;
estimating the loaning accounts
Responsible for reporting the credit statistic statement
Responsible for training client managers
Responsible for dealing with other work according to the directors of the bank
Responsible for the credit-registered consulting system; regulating the five-
graded loans
6. Audit & Inspection Group
The group chief of National Bank of Pakistan’s Audit & inspection group is Mr.
Imam Bakhsh Baloch. It is one of the core departments at NBP. Its mission is to strive
for soundness & stability of the financial system and safeguard interest of
stakeholders through proactive inspection, compatible with best international
practices. This group plays a vital role in meeting NBP’s main responsibility of
supervising the bank’s soundness of the system and protection of the interest of
depositors, thereby ensuring public confidence in the system. In order to assess the
branches, Audit & inspection group conducts regular audit & inspection of branches.
Bank's management has established and is managing an adequate and effective system
of internal control which encompasses the policies, procedures, processes and tasks as
approved by the Board of Directors that facilitate effective and efficient operations.
The management and the employees at all levels within the Bank are required to
perform as per these approved Internal Control System components. The Internal
Control System ensures quality of external and internal reporting, maintenance of
proper records and processes, compliance with applicable laws and regulations and
internal policies with respect to conduct of business. The management ensures that an
efficient and effective Internal Control System is in place by identifying control
objectives, reviewing existing procedures and policies and ensuing that control
procedure and policies are amended for time to time wherever required. However,

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Internal Control System is designed to manage rather than eliminate the risk of failure
to achieve objectives and provide reasonable but not absolute assurance against
material misstatement or loss.iii The audit system of National Bank of Pakistan
consists of following:
a) Internal Audit
b) External Audit
c) Statutory Audit
a) Internal Audit
The Bank has an independent Internal Audit Group that conducts audit of all
Branches, Regions and Groups at Head Office on an on-going basis to evaluate the
efficiency and effectiveness of Internal Control System. In addition to that,
Compliance Group is also in place with independent Compliance Officer in 119
Branches and 29 Regional Compliance Chiefs with supporting staff to take care of
compliance related issues to strengthen the control environment.iv
For the purpose of inspection the National Bank of Pakistan inspects its branches
through inspectors. Inspections are conducted on regular basis in the branches. The
current chairmen of audit committee of NBP are Azam Faruque, Ibrar. A. Mumtaz &
Mian Kausar Hameed. The State Bank of Pakistan conducts the regular full scope
examination of banks pursuant to an inspection schedule; however, flexibility exists in
policy for frequency of inspections depending upon the need to maintain safety &
soundness. The CAMELS (Capital, Asset Quality, Management, Earnings, Liquidity,
Sensitivity and System & Controls) rating is a criteria to determine the frequency of
inspection of banks as weak institutions are given greater attention. Special
investigations (targeted inspections) are also conducted as and when circumstances so
warrant on the basis of complaints or market reports about specific institution.
b) External Audit
The Board of Directors on the recommendations of Audit Committee has also
recommended name of Messer’s Ford Rhodes Sidat Hyder, Chartered Accountants
and Yousaf Adil Saleem & Co. as auditors of National Bank of Pakistan.

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c) Statutory Audit
The statutory audit of National Bank of Pakistan is conducted to meet the particular
requirements of State Bank of Pakistan. The scope and audit programs are set by the
State Bank of Pakistan. The National Bank of Pakistan has to pay a penalty of
Rs.20000 for each mistake in the Books and procedures as prescribed by the law plus
surcharge of per day from the date of mistake to the date of statutory audit.
The functions of Audit & inspection group of National Bank of Pakistan are as
fallows:
Examine and evaluate adequacy and effectiveness of the internal control
systems in the Bank.
Review the applications and effectiveness of risk management procedures and
risk assessment methodologies in financial, operational and Corporate
Governance aspects of the Bank’s activities.
Review financial, automation technology and MIS.
Review and ensure accuracy and reliability of accounting records and financial
reports.
Perform testing of both transactions and functioning of specific internal control
procedures.
Evaluate and ensure that approved policies and procedures meet legal and
regulatory requirements.
Examine and evaluate effectiveness of existing policies, procedures and give
recommendations for improvements.
Identify opportunities for cost savings in Bank operations and make
recommendations.
Examining those resources are acquired economically, used efficiently and
safeguarded adequately.
Review various reports of Bank’s subsidiaries, recommend improvements and
provide policy guideline

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7. Human Resource Management & Administration Group
The group chief of Human resource management & administration group is Mr. Dr.
Mirza Abrar Baig. This Division is responsible for fresh induction of employees and
other professionals through a rigorous induction process in order to ensure presence of
quality professionals. Following units and areas of work are the part of this division.
This group is responsible to develop annual manpower plan for National Bank of
Pakistan, conduct job analysis, prepare job descriptions, and conduct job evaluation
process. The other functions of this group include attracting, selecting and recruiting
the right people from the market. The group firmly works on adopting latest
organizational theories & change management processes to bring in efficiency. This
group also performs following functions:
Deals from placing job advertisements to timely recruitment of competent
personnel by using modern selection techniques.
Systematically observes & measures employee’s/candidate’s performance for
the purpose of recruitment, selection and promotions.
Facilitates in establishing successful productive working relationships through
effectively orienting new employees to their respective departments/divisions
and to their positions.
Encourages employees to seek promotion/transfers to fill internal openings
and meet employees’ personal objectives.
Foster a culture of acknowledgement and appreciation amongst employees for
introducing innovative business practices, showing extra ordinary efforts for
achievement of goals and enhancing Bank’s corporate image uses various
methods of recognition ranging from simple “Thank you” letters to elaborate
celebrations and monetary rewards.
Conducting motivation surveys and developing market based employee
satisfaction & retention strategies.
Conduction of evaluation of positions and grades to ascertain employees’
position in the grade structure.
This Group supervises all the staff colleges, at Karachi, Islamabad, Lahore and
Peshawar.

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8. Information technology group
The group chief of Information technology group is Mr. Atif Hassan Khan. This
group is formed to implement latest technology to keep National Bank of Pakistan
online with the domestic and international financial industry, and other stakeholders
in order to promote efficiency and stability in the financial market. The group’s
objective is to provide appropriate technical solutions to business requirements and
develop state of the art integrated system that will facilitate internal and external
stakeholders to acquire accurate information in the most effective manner. The
National Bank of Pakistan with its capabilities, methodologies and experience aims at
technological advancement in bank, focusing on solutions that intend to reduce
operating costs, improves end user performance, and meet overall business goal.
The group provides services and solutions to improve and strengthen NBP’s
technology portfolio and identify future requirements. Besides providing these useful
resources, IT group focuses on safeguarding the information assets and relevant
systems, critical to NBP, through its Security plans and policies. The information
technology group has following divisions:
In-house Development
Software development
Web development
Central Server
System Admin – UNIX
System Admin – Windows
Customer Support
Database Management
Network Management
Production Support
Administration
Director Section

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9. Financial control Division
This division is headed by Mr. Atif Hassan Khan, who is also financial controller of
National Bank of Pakistan. The financial control division is responsible to perform
and manage following functions:
Maintenance of books of accounts and preparation of financial statements of the
Bank in accordance with the IAS, as adopted by the Bank.
Coordination and facilitation for Business planning and budgeting function in
the Bank and periodic reporting to the management and to the Board.
Preparation of Annual Financial Statements Accounting Policies for the bank.
Quarterly profit updates to the Board of Directors.
Consolidation of Departmental Budgets.
Maintenance of Federal & Provincial Government Account on the basis of
receipt and payments.
Monthly Abstract, Daily Reserves and Weekly review reporting.
Short/Medium term investment and Swap deposits and maintenance of Foreign
Currency accounts and revaluation of Foreign Currency Assets & Liabilities.
Making of payments to external suppliers and employees of the Bank after
independent verification of transaction documents on the basis of bills/
invoices/claims approved by the processing units.
Checking and verifying the selected financial transactions to ensure accuracy
and compliance to respective rules and regulations.
Assets capitalization, assets transfers and overall responsibility to manage and
maintain assets physical inventory, keeping track of physical location of assets.
To ensure the smooth and unhampered running of the Fixed Assets
Management function.
To record all the expenses regarding repair/ maintenance and rent taxes for NBP
buildings and equipments.
To deal with various administrative matters arising in the Finance Department.
To respond to various queries rose from various internal and external sources.

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10. Overseas Coordination & Management Group
The group chief of NBP’s overseas coordination & management group is Mr. Tahir
Yaqoob. This department is in charge of the management and operation of foreign
exchange business including marketing and operating of the financial products and
trade financing of foreign exchange in the light of National foreign exchange
management policy, and is the governing department of foreign exchange. The
functions of this group are as follows:
Establishing marketing strategy, policy and management system of foreign
exchange.
Making annual operating and working plan.
Selecting and opening overseas account under supervision, and establishing and
harmonizing the business among agent banks.
Corresponding and dealing with foreign exchange business among branches.
Showing business requirement of costumers and development of new products;
publicizing foreign exchange business; training managers of customer-service
for foreign exchange business.
Managing and operating foreign fund of the whole bank.
Making deposit and loan rate of each wholesale foreign exchange according to
management and market situation of deposit and loan rate of foreign exchange
Focusing on direct marketing of VIP customers and overall plans to put all
resources together so as to provide one-stop service.
Examining and approving international business financing(import & export bill
purchase, foreign exchange bill discount, acceptance, documentary credit,
stand-by L/C, international non-financing guarantee and so on) .
Auditing foreign exchange business.
Management and operation of researching credit, and consult and testimony
business.
Managing turnover position of exchange settlement and sales.
Declaring international balance, register foreign loans and manage foreign
exchange account.

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Supervising wholesale foreign exchange deposit and payment to defend money
laundering and bank swindle.
Managing and operating SWIFT system and foreign exchange system.
Organizing international business research and statistic; establishing and
improving foreign exchange files; making accounting report forms and business
report forms.
Regularly examining the executive results of all system of foreign exchange and
renovate all the problems.
Contacting and corresponding with National foreign trade department, customs,
industry governing department and foreign exchange department.
Examining and approving the branches launching foreign exchange business,
applying for new foreign business category to the People’s Bank of China
according to current foreign exchange policy.
The National Bank of Pakistan is shifting focusing on expanding its market share in
trade finance, home remittance and foreign investments. The Bank is setting high-speed
satellite link along with the extension of S.W.IF. T service to large domestic and
international branches.
11.Commercial & Retail Banking Group
The group chief of National Bank of Pakistan’s commercial & retail Banking group is
Mr. Amer Siddiqui. Retail banking includes retail lending and deposits, banking
services, trust and estates, private lending and deposits, banking service, trust and
estates investment advice, merchant / commercial / corporate cards and private labels
and retail.v Commercial banking includes project finance, real estate, export finance,
trade finance, factoring, lending, guarantees, bills of exchange and deposits.
This group is responsible for serving the needs of the retail and commercial market,
focusing on individual consumers and small and medium size enterprises. This group
is responsible for developing and managing brands which serve the investment needs
of the consumer market, and focuses on deposit mobilization, provision of value

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added services based on modern technology and undertaking the centralized marketing
and advertising for the Bank. This group is engaged in the development and
management of retail credit schemes. The consumer market in Pakistan has not only
grows exponentially over the last decade or so, but the needs of this segment have
become extremely diverse. In order to sustain competition, it is but imperative to
continue offering innovative consumer credit schemes.
The National Bank of Pakistan plan to establish commercial centers across the country
looking at the business potential in the area, size of the branch and its capabilities to
deliver the desired service in order to attract quality customers. The objective is to target
the untapped sectors and provide them professional quality service, through one
window operations and Relationship Managers stationed at those centers. We expect
and hope to reduce the turn around time and become more competitive and market
oriented. Further this customer friendly and dedicated set up at convenient locations
would help in improving the image of the Bank as well. These Centers would work in
conjunction with the existing set–up of Commercial Lending done throughout the NBP
branch network. The main purpose of these centers is to generate ancillary business in
addition to funded and non-funded facilities, with quick turn around time in decisions
for customer satisfaction.
12. Special Assets Management Group
The group chief of Special assets management group is Mr. Tajammal Hussain
Bokharee. The Special Asset Management Group (SAMG) is a group of people with
specialized skills in managing the "stressed" assets of National Bank of Pakistan. The
group was created with a view to enable restructuring and recoveries through various
initiatives like innovative work-outs, merger & acquisition strategies, asset stripping,
security enhancements and structured sell-downs. The group has also been working
with / advising various governmental and regulatory bodies in evolving a framework
for implementing international best practices like asset reconstruction companies in the
country.
With provision coverage of 84% we believe that going forward our Special Assets
Management Group will make major contribution towards the Bank's profitability

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through recoveries and reversal of provision charge as a result of declassification /
rescheduling. We have revamped our special assets management business and have
coordinated our efforts to expedite recoveries and settlements.
13. Employee Benefits, Disbursements & Trustee Division
The divisional head of this division is Mr. Mrs. Khurshid Maqsood Ali. The function
of the National Bank of Pakistan’s Employee benefits, disbursement & trustee division
is to handle the administration of trust funds, provide estate planning support, and in
some cases see to the disposition of the estate of a deceased customer. One of the factors
that make the use of this department so attractive is that it tends to be somewhat
conservative with their management approach. This means that this department is likely
to take time to evaluate all options when involved in settling estates, establishing
guardianships, or administering trusts that have been set up for the survivors of a major
depositor. This methodical approach is often in line with the motivation for establishing
the asset in the first place, which was to provide a source of financial support for loved
ones, even after a parent or significant other has died.
Along with estate settlement, this department also provides a number of other agency
services, such as functioning as the trustee of record for corporate bonds or
administering a pension or profit sharing plan. As a means of ensuring that the resources
of the bank safely protect the investments involved, the department makes it relatively
easy for the client to deal with other matters. Thus, the investor can focus more on
family or other business matters, and be less involved in the task of protecting assets
that are already established and set on a path of consistent growth.
Auditors
EY Ford Rhodes Chartered Accountant
Grant Thornton Anjum Rahman Chartered Accountant

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Legal Advisor
Mandviwalla & Zafar Advocates & Legal Consultant
Departments of The Branch
Dividing an organization into different parts according to the functions is called
departmentalization. NBP Main branch, Sargodha offer a wide range of banking services
to public and private sector corporation, partnership, individual and others.
The National Bank of Pakistan has various departments. Brief description of all these
departments are given here one by one under separate heads for better understanding.
 General Banking Department
 Account opening Section
 Deposit Section
 Cash Dealing
 Clearing Section
 Remittance
 Credit and Advances Department
 Accounts Department
 Government Department
 Consumer & Retailing Department
 Foreign Exchange Department
 Import and Export Department

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General Banking Department
It involves following sections.
 Account opening Section
 Deposit Section
 Cash Dealing
 Clearing Section
 Remittance
Account Opening Section
Account opening section of the bank can be considered the most important department
because banking starts with the account opening. Every customer of the bank either he
is of credit section or foreign section or any other department must have his account in
order to get benefit and transaction with the bank. Therefore it is considered the most
important section of the bank. Account opening officer take special consideration for
the proper recognition of the customers.
This section performs the following functions:
 Opening of Accounts
 Issuance of cheque books
 Closing of accounts
Deposit Section
Deposits are the lifeblood of commercial banks. The main function of a commercial
bank is to mobilize deposits of money from the savers and lend into for most
profitable purposes. The process of collection deposits is Deposits Mobilization.
Commercial banks donor receive these deposits for safe keeping purpose only .but they
accept deposits as debts. When a bank receives a deposit from a customer becomes a
creditor and the bank a debtor. When the bank receives the amount of deposits as a
debtor, it becomes the owner of it but there is an implicit agreement that the amount

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owned would be paid back by the bank to depositor on demand or often at specified
time. The classification is based on duration and purpose for which the deposits are to
be kept at the bank before the depositor can withdraw them. Deposits can be divided
into two categories.
Cash Dealing
Cash department of NBP is given the complete responsibility of handling all receipts &
disbursements of cash as a result of transaction in both local and foreign currencies &
near cash items such as traveler's cheque etc. (when they are issued against cash).As a
consequence it is also responsible for the book keeping of these transactions & the safe
custody of cash and near cash securities of NBP.
Cash department of NBP is separate close part; no one other than cash departments'
employees can enter into that area. Cash department performs the following functions.
 Cash receipts for receive deposits.
 Cash payment for encashment of cheques.
Receipt
The money, which either comes or goes out from the bank, its record should be kept.
Cash department performs this function. The deposits of all customers of the bank are
controlled by means of ledger accounts. Every customer has its own ledger account
and has separate ledger cards.
Payments
It is a banker’s primary contract to repay money received for this customer’s account
usually by honoring his cheques.
Clearing Section
"The transfer of funds from one branch of bank to the other branch of the same bank or
the other bank on which the instrument is drawn , without involving cash through “State
bank’s clearing house "

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We can say that cheques which cannot be cashed at the cash counter of the bank or
cross cheques go through the clearing process.
Clearing Department
The major function of Clearing Department is to receive the cheques, which are drawn
on some other bank. The customer can get the money in his account at NBP, from the
cheques drawn on another bank. The bank accepts these cheques and collects the
amount from that bank on which cheque is drawn through the Clearing House. Bank
charges some commission for this function.
Clearing House
A clearing house is an association of commercial banks set in State Bank of Pakistan
for interchange and settlement of credit claims
National Institutional Facilitation Technology (NIFT) Pvt. Limited is performing the
function of clearing and charges commission against it. Before the NIFT, the State Bank
of Pakistan (SBP) with efficient controlling staff performed the process of clearing. If
SBP had no office at a place, then NBP, as a representative of SBP acted as a
clearinghouse.
Remittance Section
Remittance means a sum of money sent in payment for something. This department
deals with either the transfer of money from one bank to other bank or from one branch
to another branch for their customers. NBP offers the following forms of remittances.
Main modes of remittance are:
 Pay Order
 Mail Transfer
 Demand Draft
 Telegraphic Transfer

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PAY ORDER
Pay order issued from one branch is only payable from the same branch. It is issued for
payment in the same city.
Issuance of pay order
 Gets application form from the customer.
 Issues pay order after vouchering all necessary formalities.
 Gets recovering charges and withholding tax in case of cheque deposit for PO.
 Makes entry in PO issue register.
 All pay order must be crossed “payee’s account only”.
 It must be noted that Inter-Branch Clearing Advice is not involved because it is
payable at the same branch and same city only.
Cancellation of PO
 Application for cancellation with original pay order.
 Recovers cancellation charges.
 Signature verified by the officer.
Duplicate PO
 Checks the record that payment has never been made.
 Gets application for issuing of duplicate PO.
 Recovers charges as per schedule.
 Issues duplicate PO by writing “ink red” pen “Duplicate PO”.
MAIL TRANSFER
The same application form is used for draft and mail transfers generally in NBP.The
mail transfer is not delivered to purchaser but instead the issuing office to beneficiary’s

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branch on its own risk and responsibility sends it. This type of remittance facility is
provided only when the beneficiary happens to be customer of the bank.
The amount is directly credited to the beneficiary’s account and as such loss of mail
transfer has no concern with the applicant. Also, the credit balance of customer is
transferred from one branch to another branch with the help of this instrument in case
the Customer so desire.
The applicant desiring to remit the funds by way of mail transfer can either deposit cash
or he may ask the bank to debit his account with the cost of mail transfer including bank
charges. An exchange memo is issued to the applicant in case he desires to have some
sort of receipt from the bank for his office record. The participants of mail transfer are
recorded in mail transfer register just like drafts while at the paying branch instrument
is treated as branch voucher for credit into beneficiary’s account.
If the customer is not he account holder of this bank, then firstly he must deposit the
money and then rest of the procedure will be adopted to transfer his money. Secret test
applies on MT. If the amount is less than 5000 rs then test will not apply.
 It is the quick and safe mode of transfer of funds.
 Application form submission is same as DD.
 In MT funds are transfer through system within seconds if 2nd branch is online.
 Funds transfer only same branch of the banks.
 It is necessary that the customer must have the Branch Code of the host branch,
account number of a drawer, name of place, etc.
 Inter-Branch Clearing Advice is involved.
DEMAND DRAFT
A method used by individuals to make transfer payments from one bank account to
another. Demand drafts are marketed as a relatively secure method for cashing checks.
It is made for both account holders and non account holders. Secret test apply on DD.
If the amount is less than 5000/- Rs. then test will not apply.

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Types
 Junior draft
 Senior draft
Junior Draft
For 1 to 1000/- Rs. junior draft is made.
Senior Draft
For 1000 to 10 million Rs. senior draft is made.
Particulars of DD
 Date
 Name of the office on which it is drawn
 Name of beneficiary
 Amount in words and figures
 Bank exchange rates
 Signature and address of the applicant
Issuance of Demand Draft
 The customer on standard DD application form makes request.
 All information such as name of beneficiary, place where the DD is drawn,
amount mode of payment, cash/cheque/debit authority, signature with name and
address is filled.
 The issuer checks the information.
 Commission as per schedule of charges is charged.
 Federal excise duty is charged.

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 After the customer has made payment by cash/cheque, get the voucher from
cash department.
 The DD of required amount is prepared.
 The DD in NBP is manually prepared.
Entry of DD
Entry is made in DD issued register as well as on the system on which following entry
is passed.
Dr: Cash/Customer’s A/C
Cr: DD issued
Cr: DD issuance charges
Drawing branch of bank will give credit to the drawee branch on same date the draft is
issued; through their account for settling inter branch transactions.NBP does not pay
before the receipt of relative advice.
On the receipt of relative advice the drawee branch will credit the amount into their
draft payable account and each time draft is paid, this account will be debited with the
amount of draft paid. In case the draft receipt is not received the draft will be paid “ex-
advice” duly entered in the ex-advice register and entry in said register will be marked
off on receipt of relative advice.
Cancellation of DD
 If any customer wants to cancel DD, bank obtains application in writing along
with original DD.
 Verifies the signature of applicant. This signature should tally with the signature
of DD application form.
 Checks the DD account into system of payment made or not.
 Marks cancellation in DD issued register.

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 Recovers cancellation charges.
 Payment is made from Suspense Account DD cancelled after recovery of
cancellation cheque is per schedule charges.
 Inform the drawee branch regarding cancellation and ask for Inter-Branch
Credit Advice (IBCA).
 On the receipt of IBCA adjustment is made.
Issuance of Duplicate DD
In case draft is lost or destroyed by mistake, its duplicate can be issued at the request
of purchaser after obtaining indemnity bond on stamped paper of appropriate value.
This is done to cover the risk of double payment by mistake.
 Application form received from purchaser and verifies the signature.
 Informs the drawee branch of the loss of DD and advise them to mark caution
against payment if presented.
 After necessary checking, the drawee branch will inform the branch about the
status of DD whether it has been paid or still outstanding.
 Writes on the face of duplicate DD in red ink Duplicate in lien of original DD
No--- dated ---reported lost.
 The signing officer must check all the particulars before signing.
TELEGRAPHIC TRANSFER
It is the message, which is sent from one branch to another on the order of payer to
payee through wire. It is one of the quickest means to transfer fund through the use of
Telex/fax/internet or cable. Secret test apply on TT. If the amount is less than 5000 rs
then test will not apply.
 It is quickest way of transfer funds from one branch to another of the same bank
through telephone, fax/telex.

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 Procedure of application and vouchering is same as a DD.
 Apply test on the TT message and appropriate codes and instructions such as
advice & credit or advice & debit.
 It is mostly cleared through main branch of the same area.
 Recovers commission, and other charges as per applicable rate.
The entries at issuing office are recorded in telegraphic transfer issued issued register
while at the other end it is entered in the tt payable register. Issuance and Payment of
Telegraphic Transfer Outgoing
Application form is filled by the client in whom 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.
The amount of Telegraphic Transfer should be written on the form. The amount is
transferred to beneficiary’s account in the other bank. An advice is given to the
customer but application is filled in the record of the bank. Issuance and Payment of
Telegraphic Transfer Incoming. When a TT is received then an entry is passed in TT
incoming register after verifying the test. When a person comes and wants to encash
his TT, bank checks the statements of that person. If the bank finds any account credited
to the person’s account against TT, bank prepares a voucher for this payment against
that TT. The customer then presents that certificate to the cash counter and collects
money.
Advances Department
Advances department is one of the most sensitive and important departments of the
bank. The major portion of the profit is earned through this department. The 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

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PAGE 55
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.
PRINCIPLES OF LENDING
i. Character
It is based on the borrower willingness to repay the obligation. The loan officer sees the
family background mode of living, business nature, habits, moral reputation and etc.
before giving the loan.
ii. Capacity
The ability of borrower to repay the loan when due. The borrower ability to repay the
loan is assessed by the office so that he will be able to repay the loan in future.
iii. Capital
The officer assesses the capital of the borrower. If assets held by the borrower are liquid,
they can be easily convertible in cash; but if non liquid is used then it is risky to given
loan.
iv. Collateral
It is collateral security. It may consists of stocks bonds , bill of exchange, bills of lading,
etc. the bank has protect himself from any discrepancy in the future. They increase the
ability of the borrower to obtain the funds from the bank.
v. Condition
The economic condition of the borrower is determined. The economic conditions of the
borrower in and outside the country effects the repayment of loan. If condition is
favorable then loan is given otherwise vice versa.

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TYPES OF ADVANCES
i. Demand Finance
One time disbursement of the whole amount sanctioned, as the limit for the credit
allows. Any person, individual, group, company, firm and all others can achieve this
Mode of financing. The mark-up or interest is calculated on the total amount disbursed
and requires to be paid before the date of final adjustment. Regarding the amount, limit
and period, it depends on the nature of the case in review.
ii. Cash Finance
In this mode of financing the borrower is allowed to make withdrawals of funds as he
requires, but the total amount outstanding cannot exceed the limit sanctioned. The
mark-up/interest is calculated on the amount outstanding on his account.
The calculation of mark-up/interest is based on the number of days a specific amount
is withdrawn. This finance if normally borrowed by small traders or individuals for
their petty matters involving cash transactions up to rupees three hundred thousand
maximum.
iii. Running Finance
To assist a large-scale business operator to carry on his day to day requirements of
liquid funds, this account is opened is made operation in his favor. Running finance is
provided where the amount goes beyond rupees three hundred thousand. The mark-
up/interest is calculated the same way as in case of cash finance. Security against
running finance is that which is easily convertible in to cash and bank kept 25% margins
with it.
iv. Loans
When a customer borrows a fixed amount from a banker repayable either in periodic
installments or in lump sum at a fixed future time, it is called a "loan". When bankers
allow loan to their customers against collateral securities they are called secured loan
and when no collateral; security is taken it is called "clean loans"

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PAGE 57
Types Of Loans
The credit department of NBP has providing the following types of loans
a. Short term loans
b. Long term loans
c. Working capital loan
d. Syndicate (project) loan
e. Monitoring
CRITERIA CHECKED FOR LOANS
Major areas requiring focused attention of the analyst are:
Financial Condition
Which is reflected in the trends of:
 Net sales
 Gross sales
 Operating profits
 Net profits (at least for the last 3 years)
Structural Liquidity
It refers to the extent of liquidity usually available in the business, or which is the
routine requirement of the borrower based on the nature of his periodically maturing
liabilities.
Debt Equity Management
Excessive reliance on debt, rather than plough back of profits or injection of fresh
equity, to maintain a healthy combination of debt and equity is thought with danger

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PAGE 58
because ultimately the debt servicing requirements place a heavy burden on its liquidity
thereby its survival.
Asesst Management
Asset management involves the analysis of how productively the assets of the company
are being used. Sales and profitability can be measured with this.
Borrower’s Credit Worthiness
To get a complete picture of the borrower’s credit worthiness, inquiries will have to be
made about:
 His business.
 Trade experience.
 Assets and liabilities.
 His account with bank or with other banks.
 His financial statements and income tax returns.
 An interview with him will be necessary to elucidate or supplement the
information that may have been collected.
Management
Before giving loan NBP also checks whether the management have the depth, skill and
experience. If the management is aggressive and adoptive to the new changes then it is
most likely that the banker may receive the loan back on due date
Securities
In case the borrower is not in a position to meet his obligations, there must be something
else to call back upon. So bankers take securities to have a resource to them to guard
liquidity, that is, security is an insurance against calamities.
In case of cash finance the customer have to give the same amount of money to the
NBP as a security for which it takes loan.

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PAGE 59
The bank provides the following securities to the customers.
Mortgage
Transfer of interest in movable property for securing the payment of money lend on
existing or future liability. The bank provides the following two types of mortgage.
 Registered mortgage
 Equitable mortgage
 Registered mortgage
Registered mortgage is provided on the residential property, commercial industrial
property, raw plot, etc. A party can get registered mortgage if they provide the
following documents to the bank.
 Title deed
 Non encumbrance (NEC)
 pit form (in case a constructed hose)
 Valuation certificate
 Affidavit
 Mortgage deed
 Personnel guarantee of mortgagor
 Power of attorney
 Legal opinion.
Banks examine all these reports, and if they are correct then issue the mortgage to
the party. The bank examines these reports to see that the property they want to
mortgage is registered and is not already pledged. The bank also calculates the value
of the property and the legal opinion of the customer in case of non-payment.
 Equitable mortgage
Equitable mortgage is provided on the residential property, commercial industrial
property, raw plot, etc.
 Title deed
 Non encumbrance certificate (nec)

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 Pti form (in case a constructed house)
 Valuation certificate
 Affidavit
 Memorandum of deposit of title deed
 Personal guarantee of mortgagor
 Power of attorney
 Legal opinion
In this mortgage a charge form bound the customer for any legal action in case of
non-payment. In this type of mortgage hypothecation of stocks involves.
Pledge
A pledge is an “a class security given to customers for stocks ware house, customs, and
etc. it is defined as actual delivery of movable property to lender as security for a loan.
When the customer makes the payment of the loan in full he can back his mortgage
property from the bank i.e. when full payment is made the stock is released.
PROCEDURE OF SANCTION OF LOAN
Any individual or company, who wants loan from NBP, first of all has to undergo the
filling of a prescribed form, which provides the following information to the banker.
 Purpose of loan
 Details of all firms or companies associated with business
 Name of proprietor/ partner/directors
 Accurate and up-to-date balance sheet and profit and loss statement of last two
years of business
 Market report of the borrower repute
 Report from the bank if borrower has maintain his account with the bank
 CIB report
 Full details of existing limit and actual liability against the business
 Particular about the foreign exchange deposits and bills given by the borrower
to the bank
 Memorandum and article of association in case of limited company

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 Audited report of balance sheet and income statement of last two years
After checking all the securities, customer verification the manager done the following
tasks
1. Preparation of credit proposal
2. Prepare the about the customer
3. Sanction of loan
Preparation of credit proposal
After formal application for the credit the party submits approval. For this purpose
borrower can use coarse paper or the form provided by the bank. Along with the
application borrower also submits the documents required by the bank. The bank
manager evaluates the documents provided by the borrower. He gets the party’s
credibility report confidentially from the other commercial banks. He checks the
balance sheet and income against the assets in the company. He also measures the
percentage of owner’s equity.
Then he doses the ratios analysis of the company. If the party is involved in the export
and import business then the data of the last three years of this business is considered.
The manager of the bank also examine the project violability, the securities provided
by the debtor to the bank are evaluated by measuring their worth. In the case of pledge
is assessed by the manager while in case of new party manger checks from where the
party is financing for their business
Prepare the Proposal about the customer
After preparing the proposal manger prepare the report about the customer. Report
contains the following information
 Name of the company
 Date of establishment
 Address
 Nature of business
 Branch office

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PAGE 62
 Worth of business
 Date
 Banker’s opinion
 Head cashier opinion
 Branch manger opinion
In case of partnership business following information are included in the report
 Partner, their share in capital, profit and loss
 Deed of partnership
 Partnership letter
 Turn over
 Net profit
 Personal property of partners
 Bank balance of partners
 Advance payment of suppliers
 Particular of machinery installed in the factory through financing
In case of corporation/limited companies the following information are included
 Incorporation and commencement of company
 Sales offices
 Capital information
 Directors and their contribution to capital
 Balance sheet with explanation and evaluation
 Net worth of the company
Sanction of Loan
If the limit of the loan lies within the power of manger then he sanction the loan
otherwise manger with the covering letter along with all necessary documents sends it
to the concerned sanctioning authority.

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Accounts Department
The main function of account department of NBP is to maintain general ledger accounts
and after the business hours the function of the account officer is to close books. There
are many other important functions performed by accounts department of NBP so
broadly they can be categorized in three heads
 Routing of expenses vouchers
 Preparation of daily activity reports
 Preparation of weekly and monthly statements
 Preparation of statements for tax purpose
ROUTING of EXPENSES
Vouchers of all expenses and material purchases are routed out through this department.
As far as the expenses are concerned, they include the
 Heads of salaries paid to confirmed employees of bank
 Wages paid to employees that are on contractual basis
 Rent of the building
 Lease installment
 Insurance premium paid to insurance company for the insurance of vehicles and
cash in safe and counter.
 Utility bill, which consists of courier, electricity, water and gas bills
 Medical expenses (reimbursed)
Voucher System
Voucher is written authorization sued in approving a transaction for recording and
payment. Voucher is a system, which is generally designed to provide strong internal
control over the transaction, which takes place during the business hours. It is prepared
whenever
 A transaction takes place in any department of the bank.
 One debit and one credit voucher is prepared
 At the end of the day these vouchers are collected and recorded,

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In bank two vouchers are used
i. Debit Voucher
ii. Credit Voucher
Debit Voucher
Different types of debit vouchers are used by the bank as an evidence of the transaction.
For identification, they are differentiated by using different colors.
Debit vouchers are used in three cases:
 Whenever any expense is incurred
 For the preparation of two negotiable instruments i.e; MT, DD.
 When Account holder transfer money in his account then bank deduct charges
on intercity and SC clearing. The account of the customer is debited with the
amount deducted for services and debit voucher is prepared.
Accounts department used debit voucher mainly for expenses while the other two
purposes of debit voucher is used by the remittance department.
The format of the debit voucher includes:
 Name of the branch
 Date
 Branch No.
 Account No.
 Transaction code
 Amount and other details (Narration)
Credit Vouchers
Different types of credit vouchers having different colors and format are used by the
bank. There are three types transaction in which credit vouchers are used.
 When a depositor deposits any amount in his account because it is the liability
of the bank therefore credit voucher is prepared.
 Any income received by the bank e.g . bank draft.
 For the preparation of PO

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PAGE 65
Salary Structure
Salary included
i. Bonuses
These bonuses are credited after every six months i.e. June and December. These are
first and second profit bonuses and are equal to one month’s basic salary.
ii. Allowances
Allowances included house allowance, transport allowance and medial allowance.
iii. Provident fund
Provident fund is provided to each employee on his retirement, contribution by
employer and employee is 8.3%.
DAILY ACTIVITIES REPORT
The main function of this department is to check daily transactions whether cash,
transfer of payments, billing, and clearing of all the departments. It includes the details
of the following:
 Loan transactions.
 general ledger transactions
 Foreign currency related transactions.
 Fixed deposits transactions.
Following procedure is followed in checking daily activities carried out in different
departments of the branch.
 All the vouchers, advices both manual as well as computerized obtained for
posting in the system of each department.
 All the vouchers and advices are further sorted in ascending and descending
order for the sake of convenience in checking and tally information.
 It is checked whether or not the account number, instrument number, document
number and amount appearing in words and figures are agreed with the
information appearing in the computerized record.
 In case of changing or discrepancy informed to the concerned department.
 All the credit, debit and billing voucher bunched separately.
 The name of the branch, date of vouchering, title and number of vouchers is
written on voucher must be cover authorized signature.

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PREPARATION OF STATEMENTS
Second major function of accounts department is the preparation of various statements.
These statements are:
Weekly statements:
These weekly statements are sent first to NBP head office Karachi. These statements
are generated on weekly basis for the purpose of sending it to Head Office. These also
include:
 Statement of affair
 Deposit and advances position of the bank
Monthly statements:
These monthly statements are sent first to NBP head office Karachi and then these
statements are sent to head office in consolidated form. All vouchers and statements
signed and approved by manager accounts or who has authority to sign on behalf of the
bank and whose signature appears in one of the bank’s book of specimen signature of
a person who has authority to sign internal vouchers and record extents of its authority
will be made by the counter manager. All vouchers prepared by different relative
departments on computer.
These statements are prepared on monthly basis and also sent to Head Office (Qatar).
These include:
 Provisional statement of income and expenses. This statement
adjusted for accruals and pre-payments.
 Monthly Balance Sheet and Income Statement
 Comparative Statement
In third and last step the following functions of accounts department of NBP are
described as follows:
 Approval of daily expenses voucher
 SBP balance
 Tax returns
 Budgeting

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 Forward cover fee
 Debit balance calculation.
 Pay order /telegraphic commission transfer
 Deposit entry
 Depreciation
 Result/budget
 Head office report
 Trail balance /fax position
 Commitment return
 Source and uses
 Activity report
 Monthly assets and liability
 Liquidity 1,2,3,4,5, years
 Excise duty balancing
 Customers internal account statements
 Computer complete back up
 Quaterly statement size wise
 FCY interest reporting
 FCY interest checking
 Services charges
 A/c to be dormant
 Letters to customer
 Classification of deposits
 Lists of deposits
 A/c opening and closing
 Staff loans
 A/c blocked and unblocked
 Monthly resident and non resident
 Zakat calculation

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TAX PURPOSE STATEMENT
The department also prepares two statements for the purpose of paying tax on monthly
and annual basis. These statements are generated for the purpose of submitting to
Central Board of Revenue. These are:
 Statement of deduction of income chargeable under the head salary under
Section 53 (Tax deducted at source)
 Withholding Tax from the payments made to vendors, suppliers and other
parties providing various services. The rate of withholding tax is as follows:
 Suppliers------------------------ 3.5%
 For other parties------------- 5%
Data Entry
The next task after receiving the data is to enter that data in to a computer. The floppy
disk is directly inserted in the computer. The program in used is based on “COBOL”
language. This program is designed in away that it demand “Hash Value” value before
opening the floppy for further action this value serve the purpose of password or pin
code send by the branch on entering that value the data enter in to the computer. This
computer is attached with the terminal of central computer. The operator of that
terminal takes the data from the computer and converted it in to a text file through that
terminal the data finally goes to the central computer.
ACCOUNTING PROCEDURE IN NBP:
1. Various departments use debit and credit vouchers for regarding the
transactions.
2. Accounting department receives the departmental journal from the departments
together with all vouchers.
3. Verify correction of total of all into departmental entries in departmental
journal.
4. Sort vouchers into general ledger a/c order debit separately from debit for each
account.
5. From departmental journals add all debits and all credits for each general ledger
account and write total for each accounting relative account and extend new
balances.

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6. Prove debit and credit totals to department journal total. Write total obtained
from machines list for each contingent accident in general ledger and up data
balances.
7. Date and sign general ledger and obtain signature of an officer .
8. Place general ledger includes leaf binder in chronological order.
BILLING & GOVERNMENT RECEIPT/PAYMENT
DEPARTMENT
In this department, all types of Government receipts i.e. Revenues, Taxes, Agriculture
Tax, Government Fees, EOBI Funds and Utility Bills are deposited. This way NBP is
serving great job of revenue collection and charges commission for providing services.
This department is performing following functions
 Payment of Provident Fund
 Payment of Benevolent Fund
 Payment of pension
 Collection of utility bills
 Collection of property taxes and Challans
 Collection of dues of education institution
 Payment of salaries
 Payment of zakat
PAYMENT OF PROVIDENT FUND
Provident fund is maintained by many organizations for the benefit of their employees.
There are three types of provident fund granted by the organizations.
 Government provident fund: fund maintained by government institutions
 Recognized provident fund: fund maintained by private organizations fulfils the
conditions maintained by law.
 Unrecognized Provident Fund: fund maintained by private organization which
has not been granted recognition by law

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BENEOVALENT FUND
The Funds are utilized for the relief of Government servants and their families by giving
financial assistance to the families of deceased Government servants; to Government
servants invalided out of service.
COLLECTION OF UTILITY BILLS
NBP as an agent of the SBP collects bills from the general public and charge
commission for the services rendered. The commission on each type of bill is Rs. 8/-
per bill. The branches collect the utility bills and the proceeds are then send to head
office through MT.
PAYMENT OF PENSION
Pension is the Post-retirement benefits that an employee might receive from some
employers. It is a payment, not wages, made regularly to a person who has fulfilled
certain conditions of service, reached a certain age. The date up to which pension is
payable may vary depending upon the employee services. It can be payable for Life,
Death, Remarriage
Types of Pension
i. Employment based Pension
ii. State Pension
iii. Employees Old Age Benefits
Employment-based pensions
A retirement plan is an arrangement to provide people with an income during retirement
when they are no longer earning a steady income from employment. Often retirement
plans require both the employer and employee to contribute money to a fund during
their employment to receive defined benefits upon retirement.
The GOP has been introduced two types of pension are given to the employees on
retirement based on the services which they have rendered.

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