Internship Report Nation Bank Limited 04

8/4/2019 Internship Report Nation Bank Limited 04

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INTERNSHIP REPORT ON NATIONAL BANK OF PAKISTAN

KATLANG BRANCH (0884) MARDAN

KHYBER PAKHTOON KHWA PAKISTAN

SUPERVISED BY

MADAM MISBAH

PREPARED BY

ASHRAF ALI

ROLL NUMBER 19093

MBA (BANKING & FINANCE)

SESSION 2009 - 11

DEPARTMENT OF MANAGEMENT SCIENCES

HAZARA UNIVERSITY


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INTERNSHIP REPORT ON NATIONAL BANK OF PAKISTAN

KATLANG BRANCH (0884) MARDAN

KHYBER PAKHTOON KHWA PAKISTAN

Internship Report Submitted To the Department Of Management Sciences for the

Fulfillment of the Requirements for the Degree of Master of Business Administration


HAZARA UNIVERSITY


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I

COMMITTEE APPROVAL FOLIO

External Assessor

Mr.__________________________________Signature___________________

Supervisor

Mr.__________________________________Signature___________________

Chairman

Mr.__________________________________Signature___________________


HAZARA UNIVERSITY


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I

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ssuucccceessss..


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PREFACE

Internship report is an opportunity for the students to apply theoretical knowledge and

to gain practical experience about public and private organizations and their practices

and procedures. Training plays an important part in developing the managerial skills

of the people. Every organization is in search of capable & efficient administrators,

who are properly trained. This training opportunity is provided to the students of

Master of Business Administration through the internship program.

I choose to do my internship in NBP Katlang branch because of the fact that it is a

part of the most successful organizational setup in the country and have had in recent

years NBP has shown the will that it wants to stay the best bank in Pakistan with

constant innovations in its products and services, and by making use of the emerging

technologies.

Six weeks period is not sufficient to understand the operations of organizations. but

still it was a great experience to have a feel of the practical world and keeping in view

the limitations of the study, this seems a reasonable attempt. Internship in NBP

Katlang branch was a true learning experience for me. I have exclusively studied and

observed the organizational structure, Remittances department, General Banking,

Accounting opening and customer services.

First and foremost is the NBP Katlang branch staff, especially the branch manager

Mr. Ajmal shah Roghani to get practical knowledge of different functions of the bank.

Secondly, I pay heartiest thanks to my supervisor Madam Misbah who helped me in

the documentation and organization of this report.


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ACKNOLEGEMENT

For the completion of our report I am indebted to plenty of people for their very

sincere cooperation that they extended to me at various stages. First and foremost

problem that every student faces is the selection of a Report. I am very thankful to my

supervisor Madam Misbah for helping me out in time of confusion. During our course

and the execution of my report, I had a real chance to learn from his vast experience

and immense knowledge.

I am very thankful to staff members of National Bank of Pakistan Katlang Branch

that they guide and provide me valuable information regarding my report.

At last I am very thankful to all of my family members and friends who encourage me

and Pray for me for the completion of studies.

Pir Ashraf Ali


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DDeeddiiccaattiioonn.. II

Preface ..... II

Acknowledgement .. III

Table of Contents ... IV

Executive Summary . VIII

Chapter # 1 Introduction to Study ... 01

1.1 Background of the Study 01

1.2 Purpose of the Study ... 01

1.3 Scope of the Work .. 01

1.4 Methodology of the Study .. 02

1.5 Scheme of the Study ... 02

Chapter # 2 Evaluation of Banking . 04

2.1 What is Bank .. 04

2.2 Brief History of Banking 04

2.3 Banking in Pakistan 05

2.4 History of National Bank of Pakistan . 07

2.5 Status and Nature of Business 08

2.6 Vision Statement .... 09

2.7 Mission Statement .. 09

Chapter # 3 Organizational Structures ... 10

3.1 Head Office 11

3.2 Divisional Head Offices and Provincial Headquarters ... 11

3.3 Board of Directors .. 11

3.4 Executive Committee . 12

3.5 Divisional Chiefs 12

3.6 Provincial Chiefs 13

3.7 Regions of NBP . 13

3.8 Overseas Branches . 13

3.9 Board of Directors of NBP 14

3.10 Organizational Structure of NBP Head Office .. 15

3.11 Organizational Structure of Regions of NBP . 16


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Chapter # 4 Departmentalization of NBP and its Function ... 17

4.1 Cash Department 18

4.1.1 Cash Receipt ... 18

4.1.2 Cash Payments ... 18

4.2 Account Opening Department 19

4.3 Clearance Department 20

4.4 Remittance Department .. 20

4.5 Advances Department 21

4.5.1 Difficulties and Problems in Advances .. 21

4.5.2 Forms of Lending ... 22

4.6 Govt. Collection Department . 23

4.6.1 Deposits Department .. 23

Chapter # 5 Internees learning During Internship... 24

5.1 Brief Introduction of the Branch Where I Did My Internship .. 24

5.2 Detailed Description of the Tasks Assigned To Me ... 24

5.2.1 Deposit of Current and PLS Saving Account 24

5.2.2 Account Opening Department 25

5.2.3 Remittance department ... 25

5.2.4 Bills Collection Department ... 26

5.2.5 Govt. Payments and Receipts . 26

Chapter # 6 Products and Services Provided By NBP ... 28

6.1 Demand Drafts ... 28

6.2 Swift System ... 28

6.3 Letters Of Credit . 28

6.4 Traveler's Cheques . 29

6.5 Pay Order ... 29

6.6 Mail Transfers 30

6.7 Foreign Remittances ... 30

6.8 New Features .. 30

6.9 Salient Features .. 31

6.10 Agricultural Finance & Corporate Finance 32


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Chapter # 7 Financial Analysis ..... 37

7.1 Ratios Analysis .................. 377.1.1 Cash Ratio . 37

7.1.2 Gross Profit Margin Ratio . 38

7.1.3 Net Profit Margin Ratio . 39

7.1.4 Return on Equity ... 407.1.5 Return on Assets .... 41

7.1.6 Debt To Equity Ratio 43

Conclusion . 45

Suggestions 45

Chapter # 8 SWOT Analysis of NBP ... 46

8.1 SWOT Analysis .. 46

8.1.1 Strengths . 468.1.2 Weaknesses 468.1.3 Opportunities .. 478.1.4 Threats 488.2 Critical Analysis . 48

8.2.1 Professional Training . 49

8.2.2 The Transfer Criteria .. 49

8.2.3 Unavailability of Computerize System .. 50

8.2.4 Wrong Decision of the Government .. 50

8.2.5 Dress Code . 50

8.2.6 Respect for seniors . 50

8.2.7 Narrow Focus of Work... 51

8.2.8 Unequal Distribution of Workload . 51

8.2.9 Lack of Appreciation .. 51

Chapter # 9 Findings and Recommendations . 52

9.1Recommendations 529.2 Conclusion .. 55

9.3 Implementation / Action Plan . 56

9..9 Business Development Plan ... 56


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9.3.2 Market Research & Analysis Plan .. 59

9.3.3 Product Development Plan . 59

9.3.4 Plan for Monitoring & Evaluation of Systems ... 60

9.3.5 Performance Evaluation Plan . 61

9.3.6 Hiring Process & Job Description Plan .. 619.3.7 Internship Program Plan . 629.3.8 Customer Retention Plan 62

Book References ... 63

Online References . 63


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EXECUTIVE SUMMARY

This report highlights the operations and functions of bank. Banks acts as financial

agents to their customer; in return they get reward for their services. Banks play

important role in development of society. A strong economy must have a good

banking system.

National Bank of Pakistan is one of the leading banks in Pakistan. According to

international standards of banking system it is one of the best banks in South Asian

region as well as the bank, which is, come the top ten in the world. This report

explains how different functions of NBP works and what are their services.

The report relies mainly upon secondary data with the use of primary data at instances

when the former would be unclear or difficult to comprehend. The report is mostly

objective in nature with hints of subjectivity in financial analysis. The first part of the

report is about the evolution of banks, where as the second part is about the functions

and services of NBP and in third part the financial analysis and recommendations are

given.

During the critical analysis, it was observed that NBP is one of the leading

commercial banks of Pakistan with a network of around 1256 branches all over

Pakistan. NBP provides a wide variety of products and accounts that suit the lifestyle

and needs of the masses .In fact commercial banking is regarded as a Conservative

business because the rewards are modest and the penalties of bad banking are many.

As a trustee of the public funds, NBP has a greater responsibility for safety and


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prudence. Many business can enjoy some slack in their affairs, commercial banks

cannot afford this, since commercial banks must make a living by putting the money

at their disposal to work, they are faced with the problem of making a living without

jeopardizing the safety of their institution and NBP is doing all this very efficiently.

The NBP is known for its customer services as well as for its products, which are in

demand.


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I

CHAPTER # 1 INTRODUCTION TO STUDY

1.1 Background of the Study

This study is about the internship in National Bank of Pakistan. Internship is an

integral part of all management courses at Hazara University Department of

Management Sciences. The students require spending a specific time period in an

organization in order to get first-hand knowledge of real life situation.

1.2 Purpose of the Study

The purpose or objective of this report is to explain different functions and products

offered by the bank to its valued customers, to identify some weaknesses related to

the management of the Bank, to analyze the performance of the Bank and finally to

give some necessary recommendation to the management of the Bank. This study can

help the students of commerce in making their reports about the NBP. This can help

the management of the NBP in improving the performance of the Bank. For me it is a

degree requirement and a source of practical knowledge. Six weeks duration was

insufficient for the fulfillment of such a huge project but I have tried my best.

1.3 Scope of the Work

The duration of six weeks for internship was quite adequate for the completion of

study and observation of the Bank. NBP is one of the oldest and the well-established

banks of Pakistan. Efforts were made to study the existing setup and functions of

Bank. Some of problems faced by the Bank have been identified and solutions have

been suggested to these problems.


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The work is composed of the account opening, dealing and other necessary

information about the account. Services some information about the advances and

remittances. Hence the rest of the report is in good detail, which will clear the picture

more clearly.

1.4 Methodology of the Study

The study utilizes primary and secondary data:

a. Primary DataThe first hand data, i.e. the data collected for the first time is called primary

data. Primary data for this report was collected through unstructured interview and

participative and semi-participative observation. The source of Primary data is the

Questioner, personal interviews with the management and the branch personnels and

my personal observation in the branch.

b. Secondary DataSecondary data is the one collected from different sources and already

processed through mathematical and statistical techniques. Secondary data is

comprised of Annual Reports of NBP, Banking Manuals relevant materials, relevant

books and Newspapers etc.

1.5 Scheme of the Study

Chapter 1 consists of background, purpose, scope, methodology and scheme of the

study. Chapter 2 consists of evaluation of banking, history of banking, history of


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National Bank of Pakistan. Third chapter of the report consists of Organizational

Structure of the Bank. Chapter 4 consists of different departments of National Bank of

Pakistan and their functions, while chapter 5 consists of the activities performed by

the internee during internship.

Chapter 6 consists of Products and Services National Bank of Pakistan is providing

currently. Chapter 7 consists of Financial Ratio of NBP and comparison of NBP with

other banks. In chapter 8 SWOT (Strengths, Weaknesses, Opportunities and Threats)

Analysis of National Bank of Pakistan is performed in detail. Chapter 9 consists of

Findings and Recommendations for NBP as well as Implementation Plan of National

Bank of Pakistan.


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CHAPTER # 2 EVALUATION 0F BANKING

2.1 What is Bank?

Bank is a profit seeking institution. It collects/receives surplus money from people at

a low rate of interest and makes advances/finances to individual and business firms at

higher rate of mark-up.

There is no consensus on the origin of the word Bank. According to some experts,

the word Bank itself is derived from the word bancus or banque, i.e. a bench.

The early bankers, the Jews in Lombardy, who are thought to be the forefathers of

Banking used to transact their business on benches in the market places. The word

bankrupt also comes from there. Whenever a person failed in honoring his

commitment; the public broke his bench. Other people opine that the word Bank has

its origin in the German word Back, meaning joint stock fund, which was

Italianized into banco when the Germans were masters of a great part of Italy.

However, the Oxford Dictionarys Millennium Issue gives a very precise meaning of

the word Bank which is Bank is an establishment of depositing, withdrawing and

borrowing money.

Although banking has developed too much more than deposits withdrawal and

borrowing of money, yet the basic function of Bank remains as described above.

2.2 Brief History of Banking

Banking is thought to begin somewhere in early 2000 BC when the Babylonians

developed a banking system. The temples of Babylon were used as banks. The origin

of modern banking can be found in the modern dealers in Florence, who received


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money on deposit, and were lenders of money in the 14th century, and the names of

the Bardi, Acciajuoli, Peruzzi, Pitti and Medici soon became famous throughout

Europe as Bankers. At one time, Florence is said to have had eighty bankers, though it

could boast of no public bank.

The structure and modern form of banking started taking shape when many of the

Lombardy merchants immigrated to England in the fourteenth century and settled in

the part of the city of London now called Lombard Street. They had so many

resources that even the kings had to depend on them for loans despite the fact that the

Church was strictly against usury. The goldsmiths at that time also started issuing

receipts to their depositors in respect of the cash or gold articles left with them. These

were called Goldsmith Notes; an important step in the evolution of banking was taken

when these goldsmiths started lending at interest and issued cheque books.

Some of these goldsmiths, after Charles II refused them payments, formed a

Corporation in 1695, known as the Bank of England. This proved to be a turning point

in banking history and paved the way for modern banking through different

legislatures by the British Government.

2.3 Banking in Pakistan

In 1947, there were 487 offices of scheduled banks in the provinces now constituting

Pakistan. After independence in accordance with the Indian Independence Act, an

Expert Committee was appointed to study the issue, which recommended that the

Reserve Bank of India should continue to function in Pakistan until 30th September

1948, so that the problems of time and demand liability, coinage, currencies,

exchange etc. are settled between India and Pakistan. However, after independence

the Banks started shifting to India, resultantly, by June 30th 1948, the number of


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offices of scheduled banks in Pakistan had declined from 487 to only 195. At that

time there were only two scheduled banks in Pakistan, which were the Habib Bank,

and the Australia Bank.

On July 1, 1948, State Bank of Pakistan was inaugurated by Quaid-e-Azam

Muhammad Ali Jinnah, which assumed full control of banking and currency in

Pakistan. The National Bank of Pakistan came into being in 1949, and by 1952 it

became strong enough to take over the agency function from the Imperial Bank of

India. After this; new Banks continued to emerge. The next big step was the

nationalization of Banks in 1974. By December 1973 there were 14 scheduled banks

with 3042 branches all over the country. These were:

National Bank of Pakistan Habib Bank Limited

Habib Bank (Overseas) Limited

United Bank Limited Muslim Commercial Bank Limited Commerce Bank Limited Australia Bank Limited Standard Bank Limited Bank of Bahawalpur Limited Premier Bank Limited Pak Bank Limited Sarhad Bank Limited Lahore Cooperative Bank Limited Punjab Provincial Cooperative Bank Limited


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According to the provision of the Banks Nationalization Act, 1974 all the commercial

Banks were reorganized and merged into the following five banks:

National Bank of Pakistan Habib Bank Limited Allied Bank of Pakistan Limited United Bank Limited Muslim Commercial Bank Limited

However, the government privatized major shares of Allied Bank of Pakistan Limited

and Muslim Commercial Bank at the start of the nineties.

There has been mushroom growth in the Banking sector in the last decade. The

foreign players have also joined in. at present, apart from the private and public Banks

there are 22 foreign banks with 65 branches all over Pakistan.

2.4 History of National Bank of Pakistan

With the establishment of the central banks, the country has ushered in new era in the

development of banking. Soon the industry was faced with another problem of

considerable magnitude. This happened in late 1949. The British Government

devalued its currency in September 1949 both the Indian and Pakistan currencies were

pegged on a fixed exchange rate basis with the pound sterling.

In line with the British Governments decision, the Indian Government also devalued

it rupee to maintain parity with the pound sterling. Pakistan, however, did not devalue

its currency. India did not view the Pakistani decision in the right spirit and Pakistans

refused to bring its currency at par with that of India led to a crisis in trading between

the two countries. Indias refusal to lift the Pakistani Jute, as reprisal resulted in a


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financial crisis for the jute growers, who could not be paid. Only a commercial bank

in public sector could have offered payment in lieu, to mitigate the financial

sufferings of jute growers.

The government responded to the situation quickly and decisively, on November 9,

1949, the Governor General bringing in being the National Bank of Pakistan, which

started functioning from November 20, 1949, promulgated an order.

In the course of its development the National Bank of Pakistan, in addition to being a

commercial bank in the public sector at a time when all other commercial bank were

in the private sector also came to acquire certain characteristics which to this day set it

apart from other nationalized commercial bank of the country. The most important of

these characteristics in that the National Bank asset as an assent on the central bank

where the State Bank does the National Bank also acts as a trustee to the National

Investment Trust (NIT), one of the premier financial institutions of the country,

charged with the responsibility of mobilizing small savings.

The establishment of National Bank thus signaled the achievement of another

milestone in the development of the banking industry in Pakistan.

2.5 Status and Nature of Business

National Bank of Pakistan (the bank) was established under the National Bank of

Pakistan Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. Its

registered and Head Office is situated at 1.1. Chundrigar road, Karachi. The bank is

engaged in commercial banking and related services in Pakistan and overseas. The

bank also handles treasury transactions for the Government of Pakistan as agent 15

(2001: 15) overseas branches (including the Export Processing Zone Branch,


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Karachi). Under a Trust Deed, the bank also provides services as trustee to National

Investment Trust (NIT) including safe custody of securities on behalf of NIT.

2.6 Vision Statement

To be the pre-eminent financial institution in Pakistan and achieve market

recognition both in the quality and delivery of service as well as the range of product

offerings.

2.7 Mission Statement

NBP will aspire to the values that make NBP truly theNations Bank, by:

Institutionalizing a merit and performance based culture. Creating a distinctive brand identity by providing highest standards of service. Adopting the best international management practices. Maximizing value for the stake holders. Discharging your responsibility as a good corporate citizen of Pakistan and in

countries where we operate.

Highest standards of integrity.


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CHAPTER # 3 ORGANIZATIONAL STRUCTURES

Organizational structure is the framework that defines the boundaries of the formal

organization and with which the organization operates is business. A suitable

organizational structure for the nature of the organization leads to better performance

of the organization.

The organizational structure of the bank constitutes a board of directors and an

executive committee as the governing bodies. The National Bank of Pakistan (NBP)

has 1256 branches all over the country and 29 overseas branches (June, 2011). The

head office is operationally in charge of central affairs including the delegation of

power and authority to the regional headquarters all over the country. These regional

headquarters direct the function of the 12 corporate branches. The NBP has 29 regions

(circles) in four provinces as given below:

Provincial Headquarters No of Regions

Sindh 6

Baluchistan 2

Punjab 14

NWFP 5

Azad Kashmir 2

Total 29


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3.1 Head Office

The NBP has its own organizational structure and its Head Office is situated at

Karachi. All branches, regional offices and corporate branches work according to the

rules and regulations issued by the Head Office from time to time. The Head Office of

National Bank of Pakistan, which is primarily responsible for making policies and

execution of policy decision include,

i. Board of Directorsii. Executive Committee

3.2 Divisional Head Offices and Provincial Headquarters

The Head Office has nine divisions, which are further divided into different wings. It

is operationally in charge of central affairs including the delegation of powers and

authority to the 29 Regional Headquarters all over the country. These Regional

Headquarters direct the functions of the twelve corporate branches.

3.3 Board of Directors

The Board of Directors nominates the executive committee, which nominates

divisional heads. It consists of president, six directors working under president and

one Secretary. President is the governing body and other six directors and one

Secretary Work with him in a systematic way.

The Board of Directors of National Bank of Pakistan NBP has one President and six

members as given on next page:


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President Of The Bank 1

SVPs Of The Bank 3

Representative Of The PBC 1

Representative Of Government 1

Outsiders 1

Total 7

3.4 Executive Committee

Executive Committee consists of one President and nine members and among these

nine members, one member perform functions of both member and Secretary. Board

of Directors nominates executive committee and executive committee nominates the

divisional heads. NBP has an executive committee with President as its chairman; five

SEVPs are its members and presidents advisor as an observer. This body monitors

the day-to-day affairs of the entire bank and has sanctioning authority for financial

and business proposals.

3.5 Divisional Chiefs

In order to improve the management and operation of a bank, it has been split up into

a number of divisions. Each division of a bank is placed under the supervision and

control of Divisional Chief or Senior Executive Vice President (SEVP) or Executive

Vice President (EVP). The Head Office management controls all the divisions. The

nine divisions of NBP are as follows:

Management Support Division

Audit and Inspection Division


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Treasury Management Division Credit Policy Management Division Marketing and Development Division Overseas Banking Division Special Assets Management Division Bank Secretary Division.

3.6 Provincial Chiefs

In order to improve the performance of the banking system, each bank has Provincial

Chief who has the power for sanctioning finance and other credit facilities. The head

quarters of the chiefs are situated in Lahore, Karachi, Peshawar and Quetta. The

National Bank has 29 regions (circles) in four provinces and Azad Kashmir.

3.7 Regions of NBP

On May a circular was issued in which zones were abolished and the whole country

and Azad Kashmir was divided into 29 regions. The changeover process started from

1st August 2002 and was completed by 31st August 2002. The new setup was made

fully functional by 15th September.

3.8 Overseas Branches

NBP has 29 overseas branches, in the following 11 countries.

S. No. Country S. No. Country

1 USA 2 France


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3 Germany 4 United Kingdom

5 Egypt 6 Peoples Republic Of China

7 Korea 8 Africa & Middle East Region

9 Bangladesh 10 Central Asia States

11 Hong Kong ***** *****

NBP Has Four Representative Offices In The Following Countries:

S. No. Country S. No. Country

1 USA 2 Peoples Republic Of China

3 Uzbekistan 4 Azerbaijan

NBP has a subsidiary situated in Kazakhstan.

3.9 Board of Directors of NBP

SYED ALI RAZA

(PRESIDENT)

MR. TARIQ KIRMANI

(DIRECTOR)

MRS. HANIA SHAHID

NASEEM (DIRECTOR)

QAMAR HUSSAIN

(CHAIRMAN)

MS. NAZRAT BASHIR

(DIRECTOR)

SHEIKH HUMAYUN SYEED

(DIRECTOR)

MR. EKHLAQ AHMAD

(DIRECTOR)


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3.10 Organizational Structure of NBP Head Office

BOARD OF DIRECTORS

PRESIDENT

EXECUTIVE COMMITTEE

SEVPs/CHIEF

SIND AND

BALUCHISTAN

SEVPs/CHIEF

PUNJAB

SEVPs/CHIEF

NWFP OF AJK

SEVPs

WINGS

SEVPs

WINGS


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3.11 Organizational Structure of Regions of NBP

President

Corporate and

Investment

Banking Group

Corporation

North andCorporation

Corporate

Branches

Regional Marketing

ManagerRegional Business

Chief

Commercial & Rental

Banking Group Chief

Regional Operations

ChiefBranch

Manager

Operate Group

Chief

Operation Deptt. of

the Region

Branch Operation

Manager

Regional

Compliance Chief

Risk Management

Group Chief

Regional Risk

Management Chief

Credit Department

of the Region

Branch Credit

Officer


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CHAPTER # 4 DEPARTMENTALIZATION OF NBPAND

ITS FUNCTION

Organizing is something which is to decide how best to group Organizational

activities and resources. There are a lot of things which comes under the head of

organizing departmentalization is one of that the question is that what is

departmentalization according to Griffin Departmentalization is the process of

grouping jobs according to some logical arrangement

When an organization is small, the owner-manager can personally oversee everyone

who works there. As an organization grows ,however, personally supervising all the

employees becomes more and more difficult for the owner/manager, consequently,

new manager position are created to supervise the work of other employees are not

assigned to particular managers randomly. Rather, jobs are grouped according to

some plan. The logic embodied in such a plan is the basis for all departmentalization.

With respect to National Bank of Pakistan everyone knows that this bank is a large

organization and this organization needs departmentalization. National Bank of

Pakistan commonly maintained departments including the cash department,

remittances department, advances department, account opening department , clearing

department ,Govt. Collection Department, Deposits Department and in some cases

there is a foreign exchange department as well.

Some of the departments and their activities are as follows:

Cash Department Accounts Opening Department Clearance Department


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Advances Department Remittance Department Govt. Collection Department. Deposits Department

4.1 Cash Department

A well known economist says that banker is a dealer in capital or more precisely

dealer in money. As the bank deals in money its mean that the most important

department of the bank is cash department. There are two basic functions of the cash

departments that are;

Cash Receipt Cash Payment

4.1.1 Cash Receipt:

There are different types of accounts in National Bank of Pakistan and cash

department receives money from different customers and crediting to their respective

accounts .for depositing the money in accounts it is necessary for every customers to

fill the slip named pay-in-slip which contains different information which has to fill

e.g. account number name of the account holder date amount deposited etc. etc.

4.1.2 Cash Payments:

According to the banking company ordinance it is the function of the bank that bank

pays the money to the depositors on demand and the money can be withdrawn

through cheques drafts or otherwise. Bank want to satisfy himself before paying the


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cash but what type of satisfaction, bank satisfy himself that the instrument is valid and

there is sufficient balance In the account holder to support the payment. There is

formal procedure to receive the payment this formal procedure is to present the

cheque to token clerk then it is given to computer department to cheque the

balance then signature verification department then cashier and cashier made the

payment to the customers.

4.2 Account Opening Department

In order to operate with bank, a customer has to open an account. In large branches,

grade I, grade II or grade III officers are responsible for opening new accounts. In

opening the account with the National bank of Pakistan there is a formal procedure

and there is a special account opening form called SF-1AA which contain information

1) Type of account2) Currency3) Nature of account4) Particular of deposits5) Operational instructions6) Other services7) Zakat deduction8) Particulars of accounts9) Authority to contact10)Details of others bank accounts11)Special instructions12)Personal accounts13)Acknowledgement


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14)Specimen signature card

4.3 Clearance Department

The concept of the clearance is taken from the State Bank who perform the function

of clearing house .A clearing house is a place where the representative of National

bank meet to exchange the cheques drawn on each other and then settle the difference

owned to each other2.when there is no State Bank in a specified region then National

Bank of Pakistan perform the duties of clearing house. Why there is need of clearance

house for the banks because there is a huge development in the banking system in the

20th

century and with increase the peoples confident on banks there is increased in the

use of banking instruments and these instruments are settled through the function of

clearing house.

If the person receive Cheque from another person and he is not a client of that bank

then that customer give this cheque to his bank and that bank collect money on his

behalf from the bank of other person. National bank is also the part of that circle .The

representative of the local commercial banks meet a fixed time once a day on all the

working day of week. The meeting is held in the office of the National bank which

officially performs the duties of clearing house.

The clearing activities are recorded in two types of books

1) Inward clearing book2) Outward clearing book

4.4 Remittance Department

Today the business are scattered all over the world and businessman wants to transfer

its funds safely to other place. This function of transferring the funds are performed


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by the Remittance department .The instruments National bank used by to transfer

money from one bank to other are;

1) Telegraphic Transfer (TT)2) Mail transfer (MT)3) Pay order (PO)4) Demand draft (DD)

4.5 Advances Department

According to banking companies ordinance 1962 banker mean, a person transacting

the business of accepting for the purpose of lending and investment .its mean that the

primary function of the bank is to receive for the purpose of lending .same is the

function of National bank it receive cash from customers and invest it in different

ways .Before giving the credit to the client whether it is a business or personality the

bank wanted to satisfy himself with respect of

1. Safetya. Character of the customerb. Capacity of customerc. Capital

2. Liquidity3. Dispersal4. Suitability

4.5.1 Difficulties and Problems in Advances

Policies are announced before making the groundwork for aggressive marketingof advances.


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In upper level management each is well facilitated whereas down the levelbranches are not provided with sufficient staff to assist advances portfolio for

increase.

Advances are important areas of business, where as at the branch level it is takenas a routine matter.

For each product of advances a separate disc needs to be opened where as suchidea is not introduced at the branch level.

Since the advance salary account has got tremendous response from the customer.

The interest rate the bank charge on the account is 11%. Per month which is to high a

compared to other modes of finances.

4.5.2 Forms of Lending

The various forms of advances by are:

a. Cash Finance:

This is very common form of borrowing by commercial and industrial concerns and is

made available either against pledge or hypothecation of goods, produce or

merchandise. In cash finance, a borrower is allowed to borrow money from the banker

up to a certain limit, either at once or as and when demand. The buyers prefers this

form of lending due to the facility of paying markup only on the amount he actually

utilize.

b. Overdraft:

By this method, bank allowed his reliable customer to draw over and above the

money actually deposited by them in their account .This facility is allowed through


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cheques only to current account holders this facility of overdraft is not provided to all

account holders, but only those who have good financial and credit standing. The

interest on overdraft is charged on the basis of daily debt balance on actual amount

drawn from the date.

c. Fixed loans:

In case of fixed loans ,National bank of Pakistan advances fixed amount repayable

either in fixed monthly or yearly installments or in lump sum. It is usually borrowed

to meet with the long term requirement of the capital .Interest is charged on the full

amount of the loan sanctioned for whole of the period whether utilized or not by the

borrower .This type of loan are granted against the security like real estate machinery

etc. These securities are put to cover the risk for the return of the loan.

4.6 Govt. Collection Department

Most of the accounts are of armed forces personals, Govt. and private institutions but

it also has civilian accounts. The pension and salary to Air Force, Army and civilians

is given through Govt. Department. The record of the account is also maintained in

this department. It also collects the utility bills, taxes and license fee etc.

4.6.1 Deposits Department

This department is responsible for the accounts opening, accounts closing and

answering customers queries regarding their accounts, checkbook issuance etc.

Lockers are also under the supervision of this department.


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CHAPTER # 5 INTERNEES LEARNING DURING

INTERNSHIP

5.1 Brief Introduction of the Branch Where I Did My

Internship

I have performed my internship in National Bank of Pakistan at NBP Katlang Branch

(0884).Names of the departments in which I got training and the duration of training

During my six weeks internship period at NBP, I performed activities in different

departments of the branch. A brief introduction of these departments is as under;

1. Deposit of Current and PLS Saving Accounts (1 Week)

2. Account Opening (1 Weeks)

3. Remittances and Bills (1 Weeks)

4. Utility Bills Collection (1 Weeks)

5. Govt. Payments and Receipts (2 Weeks)

5.2 Detailed Description of the Tasks Assigned To Me

I have performed following tasks in various Departments of National Bank of

Pakistan during my Internship:

5.2.1 Deposit of Current and PLS Saving Account

In this department, I just observed how they work. Some tasks assigned to me were as

under:


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I was assigned responsibility to check amount in figures and words written oncheques.

I used to confirm the signature of account holder. I used to make scroll also for matching the amounts given in BBO and Cheques collected in hand.

Scroll number provides great relief in case of mistakes committed in recording

amounts. For example, if I edited the amount of Rs 1000 instead of 10000 then cash

scroll of the branch back office will not match with cash receipt register of cashier at

the end of the day. In order to rectify the amount, we will enter the scroll number in

REVERSAL column, computer screen will display full record of all cheques and we

will find our mistake.

5.2.2 Account Opening Department

Opening of an account after verification of customer from NADRA database. Recording of account number and name of applicant in account opening

register.

Issuance of letter of thanks Issuance of cheque book and pass book Recording of first deposit with the bank by customer in general ledger Closing of account after receiving application from customer.

After getting trained, I was often called for opening account in case of work

overloaded in this department.

5.2.3 Remittance department

Issuance and Transferring of Demand draft


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Mail Transfer Telegraphic Transfer Pay Orders

During my stay in this department, I often made drafts on behalf of customers under

instructions of my training officer. The procedure is as follows.

First the bank receives a written request from the customer to issue a bank draft. The

written request is either in banks standard form or separate paper signed by the

applicant enclosed with cash or cheques covering the amount of the draft and other

charges of the bank. While issuing a bank draft, it is compulsory that the draft should

be free from alternations. All the details must be written clearly in ink. After issuance

of demand draft, it is handed over to the applicant. The bank advice containing the

particulars of the draft is sent to drawer branch with its necessary information and on

its presentation the payment of the draft is made.

5.2.4 Bills Collection Department:

During my training program I spent two weeks in bills collection department. Here I

Collected utility bills like gas, electricity, water and telephone etc. Collection of gas, electricity and telephone bills. Making scrolls having the customer number and the amount paid Marking totals Sending in mail

5.2.5 Govt. Payments and Receipts

I worked much in Pension payment dept. I used to record the amount given onthe receipt provided by the customer into pension register. Then after taking


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signatures of branch manager, affixing the stamp on receipt and signature or

thumb impression of receipt holder on pension register, customer is asked to

receive the amount from cashier. At the end of the day, I used to make scroll

of pension payments also.

In advance salary payment, I worked little but I learnt a lot while working inthis department. Some features and detail of advance salary is as under:

Salary Account must be maintained in the branch at least six months ago by govt. and

semi govt. employee only. Following documents are required for getting advance

salary:


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CHAPTER#6 PRODUCTS AND SERVICES PROVIDED

BY NBP

6.1 Demand Drafts

If you are looking for a safe, speedy and reliable way to transfer money, you can now

purchase NBPs Demand Drafts at very reasonable rates. Any person whether an

account holder of the bank or not, can purchase a Demand Draft from a bank branch.

6.2 Swift System

The SWIFT system (Society for Worldwide Interbank Financial Telecommunication)

has been introduced for speedy services in the area of home remittances. The system

has built-in features of computerized test keys, which eliminates the manual

application of tests that often cause delay in the payment of home remittances. The

SWIFT Center is operational at National Bank of Pakistan with a universal access

number NBP-APKKA. All NBP overseas branches and overseas correspondents

(over 450) are drawing remittances through SWIFT.

Using the NBP network of branches, you can safely and speedily transfer money for

our business and personal needs.

6.3 Letters Of Credit

NBP is committed to offering its business customers the widest range of options in the

area of money transfer. If you are a commercial enterprise then our Letter of Credit

service is just what you are looking for. With competitive rates, security, and ease of

transaction, NBP Letters of Credit are the best way to do your business transactions.


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6.4 Traveler's Cheques

Negotiability: Pak Rupees Travelers Cheques are a negotiable instrument

Validity: There is no restriction on the period of validity

Availability: At 700 branches of NBP all over the country

Encashment: At all 400 branches of NBP

Limitation: No limit on purchase

Safety:NBP Travelers Cheques are the safest way to carry our money.

6.5 Pay Order

NBP provides another reason to transfer your money using our facilities. Our pay

orders are a secure and easy way to move your money from one place to another.

And, as usual, our charges for this service are extremely competitive.

a. Issuance of Pay orderFor NBP Account Holder Rs. 50/- (Flat)

For NBP Non-Account Holder Rs. 100/- (Flat)

Rs. 25/- (Flat) from student for payment of fee favoring educational institution

b. Issuance of duplicate Pay orderFor NBP Account Holder Rs. 100/- (Flat)

For NBP Non-Account Holder Rs. 150/- (Flat)


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6.6 Mail Transfers

Move your money safely and quickly using NBP Mail Transfer service. And we also

offer the most competitive rates in the market.

6.7 Foreign Remittances

To facilitate its customers in the area of Home Remittances, National Bank of

Pakistan has taken a number of measures to:

Increase home remittances through the banking system

Meet the SBP directives/instructions for timely and prompt delivery of remittances to

the beneficiaries.

6.8 New Features

The existing system of home remittances has been revised/significantly improved and

well-trained field functionaries are posted to provide efficient and reliable home

remittance services to nonresident Pakistanis at 15 overseas branches of the Bank

besides Pakistan International Bank (UK) Ltd., and Bank Al-Jazira, Saudi Arabia.

a. Zero TariffNBP is providing home remittance services without any charges. Strict monitoring of

the system is done to ensure the highest possible security. Special courier services are

hired for expeditious delivery of home remittances to the beneficiaries.


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b. Short Term InvestmentsNBP now offers excellent rates of profit on all its short term investment accounts.

Whether you are looking to invest for 3 months or 1 year, NBPs rates of profit are

extremely attractive, along with the security and service only NBP can provide.

c. National Income Daily Account (NIDA)The scheme was launched in December 1995 to attract corporate customers. It is a

current account scheme and is part of the profit and loss system of accounts in

operation throughout the country.

6.9 Salient Features

Minimum Deposit: Rs. 2 Million is needed to open the account with no max limit

Profit: Paid on a half-yearly basis on a monthly average balance

Profit Rate: The rates of profit vary according to the slabs of deposit. On Deposits

of Rs. 2 to 2,000, the rate fluctuates from 1.4 to 1.75

Conditions: Is a checking account and there is no limit of withdrawals

Effective 10th March 2003

a. National Income Daily Account (NIDA)Slab Rate

Rs. 2 Million but less than Rs.50 Million 1.40



Rs. 1000 Million and above 1.75

Mode of Calculation: Average Balance during a Calendar Month


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b. Equity InvestmentsNBP has accelerated its activities in the stock market to improve its economic base

and restore investor confidence. The bank is now regarded as the most active and

dominant player in the development of the stock market.

NBP is involved in following activities:

Investment into the capital market Introduction of capital market accounts (under process)

NBPs involvement in capital markets is expected to increase its earnings, which

would result in better returns offered to account holders.

c. Commercial FinanceLet us help make your dreams become a reality. Our dedicated team of professionals

truly understands the needs of professionals, agriculturists, large and small business

and other segments of the economy. They are the customers best resource in making

NBPs products and services work for them. Trade Finance Other Business Loans

6.10 AGRICULTURAL FINANCE & CORPORATE FINANCE

a. Agricultural FinanceNBP provides Agricultural Finance to solidify faith, commitment and pride of farmers

who produce some of the best agricultural products in the World.

b. Agricultural Finance ServicesI Feed the World program, a new product, is introduced by NBP with the aim to

help farmers maximize the per acre production with minimum of required input.


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Select farms will be made role models for other farms and farmers to follow, thus

helping farmers across Pakistan to increase production.

c. Agricultural CreditThe agricultural financing strategy of NBP is aimed at three main objectives:

Providing reliable infrastructure for agricultural customers Help farmers utilize funds efficiently to further develop and achieve better

production

Provide farmers an integrated package of credit with supplies of essentialinputs, technical knowledge, and supervision of farming.

d. Agricultural Credit (Medium Term) Production and development Watercourse improvement Wells Farm power Development loans for tea plantation Fencing Solar energy Equipment for sprinklers

e. Farm CreditNBP also provides the following subsidized with ranges of 3 months to 1 year on a

renewal basis.


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i. Operating LoansLand improvement loans

Equipment loans for purchase of tractors, farm implements or any other equipment

Livestock loans for the purchase, care, and feeding of livestock

ii. Production LoansProduction loans are meant for basic inputs of the farm and are short term in nature.

Seeds, fertilizers, sprayers, etc are all covered under this scheme.

If you require any further information, please do not hesitate to e-mail us.

f. Working Capital and Short Term Loans:NBP specializes in providing Project Finance Export Refinance to exportersPre-

shipment and Post-shipment financing to exportersRunning financeCash Finance

Small Finance Discounting & Bills Purchased Export Bills Purchased / Pre-

shipment / Post Shipment Agricultural Production Loans

g. Medium term loans and Capital Expenditure Financing:NBP provides financing for its clients capital expenditure and other long-term

investment needs. By sharing the risk associated with such long-term investments,

NBP expedites clients attempt to upgrade and expand their operation thereby making

possible the fulfillment of our clients vision. This type of long term financing proves

the banks belief in its client's capabilities, and its commitment to the country.


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h. Loan Structuring and SyndicationNational Banks leadership in loan syndicating stems from ability to forge strong

relationships not only with borrowers but also with bank investors. Because we

understand our syndicate partners asset criteria, we help borrowers meet substantial

financing needs by enabling them to reach the banks most interested in lending to

their particular industry, geographic location and structure through syndicated debt

offerings. Our syndication capabilities are complemented by our own capital strength

and by industry teams, who bring specialized knowledge to the structure of a

transaction.

i. Cash Management ServicesWith National Banks Cash Management Services (in process of being set up), the

customers sales collection will be channeled through vast network of NBP branched

spread across the country. This will enable the customer to manage their companys

total financial position right from your desktop computer. They will also be able to

take advantage of our outstanding range of payment, ejection, liquidity and

investment services. In fact, with NBP, youll be provided everything, which takes to

manage your cash flow more accurately.

j. International BankingNational Bank of Pakistan is at the forefront of international banking in Pakistan

which is proven by the fact that NBP has its branches in all of the major financial

capitals of the world. Additionally, we have recently set up the Financial Institution

Wing, which is placed under the Risk Management Group. The role of the Financial

Institution Wing is:-

To effectively manage NBPs exposure to foreign and domestic correspondence


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Manage the monetary aspect of NBPs relationship with the correspondents to support

trade, treasury and other key business areas, thereby contributing to the banks

profitability Generation of incremental trade-finance business and revenues

k. NBP Offers: The lowest rates on exports and other international banking products. Access to different local commercial banks in international banking.


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CHAPTER #7 FINANCIAL ANALYSIS

The accounting and financial review of the branch is as follows

7.2 Ratios AnalysisRatio is the comparison between two figures of balance sheet and income statement.

7.1.1 Cash Ratio

This ration is obtained by dividing cash by current liabilities / liabilities. This ratio

shows that the cash is enough for payment of current liabilities or not. It is calculated

as cash Ratio=Cash/current liabilities

Year 2005 2006 2007 2008 2009 2010

Cash 71196956 78625227 94873249 106503756 115827868 115,442,360

liabilities 501900862 553178593 645855939 715299108 824676384 906,528,852

Cash Ratio 0.141 1.478 0.142 0.148 0.146 0.13


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It means that how much cash is available for payment its current liabilities. This ratio

of NBP shows a decreasing trend. Because of high advances cash is less to cover its

current liabilities.

7.1.2 Gross Profit Margin Ratio:

This ratio shows the profit margin in sales/ revenue. This is calculated as.

Gross profit/ interest earned

G. Profit margin relates profit of the organization to its sales (interest earned in case

of Bank).

From calculation it is very much clear that the gross profit margin ration have

downward trend which shows that how much they using their deposits to earn interest.

Year 2005 2006 2007 2008 2009 2010

Gross profit 30539321 39945062 42451580 42503078 45814070 50884609

Interst earned 33692665 43788628 50569481 37058030 77947697 88472134

Gross profit

margin% 90% 91% 83% 69% 58% 58%

0%

20 %

40 %

60 %

80 %

100%

2005 2006 2007 2008 2009


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This shows the profit of the firm relative to its revenue. It is a measure of the

efficiency of the firms operations as well. The ratio shows the decreasing trend,

hence the performance of this is the indication of unsatisfactory performance.

7.1.3 Net Profit Margin Ratio

This ratio measures the firms profitability of sales/ interest earned after taking

account of all expenses and income taxes.

This ratio can be calculated as:

Net profit margin ratio = Net Profit after taxes / interest earned

Year 2005 2006 2007 2008 2009 2010

Net profit 12709444 17022346 19033773 15458590 18211846 78377462

Interst earned 33692665 43788628 50569481 37058030 77947697 88472134

Net profit

Margin % 37.7% 39% 37.6% 25.3% 23.3% 9.31%

Ratio


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Explanation: from the calculation and graph it is very much clear that the performance

of NBP is not good. And the trend is downward. It tells us a firms net income per

rupee of revenue. As the trend is downward it shows the low profits in revenue per

rupee in case of NBP. It is because of high advances the NBP has given to the people

and the financial condition of the country.

7.1.5 Return On EquityDividing profit after taxation by shareholders equity. ROE compares net profit after

taxes to the Shareholders Equity. This ratio is calculated as:

ROE=Profit after taxes/Share holders Equity

Year 2005 2006 2007 2008 2009 2010

Net profit 12709444 17022346 19033773 15458590 18211846 78377462

Share

holders

Equity 37635706 53044649 69270631 81367002 94791919 13454628

Return on

Equity 33.76 32.09 27.47 18.99 19.21 5.83%


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Graph .4

Explanation: from the calculation it is clear that the ROE Ratio have an downward

trend of NBP. It is because of low net profit they have earned. It tells us the earning

power on the shareholders investments is decreasing. It is because of high

investments by NBP and ineffective expense management and law and order in the

country.

7.1.5 Return On Assets:

This ratio shows the efficiency of organization that how efficiently utilizes their

assets. This ratio relates profits to assets. It is calculated as:

Profit after Tax/Total Assets

2005 2006 2007 2008 2009 2010

PAT 12709444 17022346 19033773 15458590 18211846 78377462

Total

Assets 577718806 635132711 762193593 817758326 944232762

1035024680


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Year

From calculation it is clear that this ratio of NBP is showing decreasing trend. It

shows that NBP using its assets not efficiently. That is why they are earning very low

profits. This shows that how inefficiently they are investing their assets so they are

earning low profits.

Return on

assets .024 .023 .024 .018 .019 0.08

Year 2005 2006 2007 2008 2009 2010

Total liabilities 501900862 553178593 645855939 715299108 824676384 30132484

Share holders

Equity 37635706 53044649 69270631 81367002 94791919 832151888

Debt to equity

ratio 93.02 90.92 90.31 89.78 89.69 36

Ratio


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7.1.7 Debt To Equity Ratio:This ration shows the amount contributed by creditors and shareholders. It shows to

what extent the firm is using borrowed money. It is computed simply dividing the

total debt of the fire by its shareholders equity.

This calculated as: Total debt/shareholders equity

From the table and graph it is clear that this ratio is decreasing which show the

unsatisfactory efficiency of NBP. In 2005 it was high but in 2007 it decreased to

90.31 from 89.78 which is a bad sign. Here the creditors are interested in low ratio.

The lower the ratio the high the level of the fires financing that is being provided by

the shareholders.


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COMPARISON OF RATIOS (2010) OF NATIONAL BANK OF PAKISTAN WITH

MUSLIM COMMERCIAL BANK LIMITED

Ratio 2010 NATIONAL BANK OF

PAKISTAN

MUSLIM COMMERCIAL

BANK LIMITED

Net Profit

Margin

9.31% 15%

Return on equity 5.83% 24%

Investment

deposit ratio

3.6% 35%

Debt equity

ratio

1.49 6.68%


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CONCLUSION

I compared the financial position of NATIONAL BANK OF PAKISTAN and

MUSLIM COMMERCIAL BANK LIMITED, above over all ratios depict that

MUSLIM COMMERCIAL is working well than NATIONAL BANK OF

PAKISTAN. There are different reasons to increase in ratios of Muslim commercial

Bank Limited, as Modern banking procedures, qualified staff, use of latest

technology, better marketing efforts, packages to employees etc. By using these

means NBP can become market leader in banking sector.

SUGGESSTION

There should be planning and advancement in culture and structure of National Bank

of Pakistan. Employees should be trained. Advance technology should be used.


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CHAPTER # 8 SWOT ANALYSIS OF NBP

8.1 SWOT Analysis

SSWWOOTT iiss aann aaccrroonnyymm uusseedd ffoorr ssttrreennggtthhss,, wweeaakknneesssseess,, ooppppoorrttuunniittiieess aanndd tthhrreeaattss..

SSttrreennggtthhss aanndd wweeaakknneesssseess aarree iinntteerrnnaall ttoo aannyy oorrggaanniizzaattiioonn,, wwhheerreeaass ooppppoorrttuunniittiieess aanndd

tthhrreeaattss aarree tthhee eexxtteerrnnaall..

8.1.5

Strengths

People have more confidence in NBP due to strong government support. NBP is a very sound financial organization. NBP is high profitable organization. NBP plays a significant role in national economic development. Bank with more deposits than any other commercial bank. Professional confidence. Highly liquidity is strength of NBP. NBP uses the fastest ways of money transfer. Recognition of the hard work of staff through incentives. The only bank providing the advance salary account up to 10 months. Intellectual commitment to change.

8.1.6 Weaknesses The lack of professional bodies is a major weakness at the branch level. Lack of understanding and coordination among subordinates. Goals are not felt important.


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Instruction are not conveyed systematically but rather than casual manner. Right individual is not identified for a right job. The concept of horizontal and vertical promotion is not adopted for the

improvement of the organization.

Poor quality counters services. Delays and decision-making. Inconsistency in policies. Deep-rooted bureaucratic approach. Poor resource utilization.

8.1.7 Opportunities There is a great opportunity for NBP in field of micro finance. Privatization of NBP. There is a good opportunity to utilize the skill educated young talent for

the enhancement of business.

Advance is the main area, which has a tremendous potential in the share ofprofit. This area can be a lot for the organization.

Replacing the existing executives and adding new skilled MBAs cancontrol the administrative expenses.

Wide range of products and product line can enhance the business. Leasing business.


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8.1.8 Threats Competing banks launch products very rapidly where as the pace of

introducing new products for capturing market are slow at NBPs end.

Privatization of NCBs and DFIs. Establishment of new private financial institutions and expansion. Merger of some of financial institutions. Political pressure. New products from Private Pakistani and foreign banks. Quality of human resources. Internal politics.

The above SWOT analysis shows that the major strength of the bank lie in intellectual

commitment to change, recent approach to new areas and management, whereas deep

rooted bureaucratic approach and poor quality personnel and frequent changes are the

major weaknesses associated with Human Resource Management. The strengths

should be utilized optimally to overcome weaknesses. Especially the opportunity of

new style of management should be used to counter the threat of inability to change

and the internal politics.

8.2 Critical Analysis

My critical analysis is about National Bank of Pakistan Branch, Katlang Mardan.

Beside so much good aspects of the branch there are some reactive sides, which is to

be given consideration in their first priority. These are some points, which I have

noticed during my eight week internship in the branch.


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8.2.1 Professional Training

Most of the employees of NBP lack professionalism. They do not have the required

background to properly conduct the operation of the bank. Many of the employees

have background which is completely irrelevant to the banking profession. They do

not know about the modern technology just like a computer and they dont know that

how the computer can be used properly. Although staff training colleges are working

in all major cities but they are not performing well. For this purpose these staff

colleges should be reorganized and their syllabus should be made in such a way to

help the employees understand the ever changing.

8.2.2 The Transfer Criteria

There is a dire need of amendment in transfer criteria and policies. Some of the staff

members are there in the branch for more than 10 years where as on the other hand

some of them are always in rotation. Therefore, those who are permanently working

they have no fear and they dont work properly and those who are always in transition

they are not interested in working hard because they had to leave this seat and had to

transfer to another place with new work. So there are not such fixed rules for an

employee transfer. Ultimately the bank has to bear the losses. Transfer means a

person is shifted from one station to another. Transfer is not properly carried out.

Some of the employees are continuously serving at the some post. They are simply

rotated at the same branch. Therefore it is recommended that evenly rotation of

every employee should take place after every three years in different branches of the

bank.


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8.2.3 Unavailability of Computerize System

Unavailability of the computerize system has made difficult to operate accounts for

the customers. Cashing of cheque takes too much time of the bank and the customers.

It is a new technique for quick operation and to increase the numbers of account

holders.

8.2.4 Wrong Decision of the Government

In past the every department funds would be sent to their own department but now

salaries of Education and Health department are paid to the teachers, doctors and lady

health workers through banks. For receiving their salaries hundreds of employees of

their departments come to the bank, which is out of control for the bank management.

Even the ladies and elders have to wait for hours.

8.2.5 Dress Code

Most of the employees come to the bank in a very casual manner. This shows that

they dont care about their bank reputation and image, which gives a bad impression

to the customer.

8.2.6 Respect for Seniors

Respect for the seniors has come to the end due to which a gap has been arise between

senior staff and junior staff and an unfriendly atmosphere has been developed.


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8.2.7 Narrow Focus of Work

Every person in the branch is expert in his own work. They dont feel to known the

work of another person. So in case of absence of one person another hardly manage to

handle the situation, so the ultimately the customers faces problems.

8.2.8 Unequal Distribution of Workload

Some of the staff members would be for just only one signature and some of them had

even time for having a cup of tea. So there was unequal distribution of workload on

employees.

8.2.9 Lack of Appreciation

Another very important aspect, which I noticed is the lack of appreciation of the

employees. On their good performance, which would make the employees dishearten

and lack of interest in work.


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CHAPTER # 9 FINDINGS AND RECOMMENDATIONS

During my internship period of six weeks in NBP Katlang Branch I observed a lot of

things and I felt that there is always a nice way of doing things, so some

recommendations suggested for the bank in accordance to the critical analysis.

9.2 Recommendations The manager of the branch should arrange a training program for its

employees to help them perform their duties more efficiently and

effectively because training is one of the important factors that affect the

performance of employees. Therefore process of continuous training

should be put in place.

Management information system is operated only at the regional level.Bank should start its computerized system at the branch level as well to

increase its accuracy and processing and to keep its own data up to the

mark.

The branch should adopt Islamic banking which would increase itscompetitive edge over the other banks.

Most of the bank employees are sticking to one seat only with the aim thatthey become master of one particular job and are loosing their grip on

other banking operations. In my opinion all the employees should have

regular job experience all out-look towards banking.

Recruitments should be strictly on merit and induction should be afterproper extensive training.


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Working environment, equipment, furniture and staff dress should beaccording to the modern banking style.

The bank should appoint customers relation officer where the volume ofwork is much high. This will give an impression to client for personal

Banking. This will help in improving the image of the bank and hence will

attract more clients.

There must be a separate information counter in that branch of NBP. Sothat as the customer enters in he/she can clearly see someone who would

help him.

The market standing is not as strong as their competitors. For this, NBPshould opt for heavy advertisement on electronic and print media to create

public awareness.

The bank must ensure the participation of the staff in all promotionalactivities of the bank to this end the bank must adhere to the policy of

fringe benefits rapid promotion of capable management and official. The

old age benefit of the bank employee must be increased to motivate staff.

Consumer banking is the area bank is not dealing with and having a lot ofopportunities for the bank. So it will be beneficial for the bank if it start

dealing in auto loans, housing finance or any other consumer requirement.

Short term lending of the bank has decreased in 2009 because the balanceof the bank with other banks has increased to a great extent. It should be at

least maintained so that the bank will be able to generate profit in short

period of time.


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The net interest income of the bank is low because of increased expensesand as a result profit is also low. These expenses should be minimized and

managed efficiently to generate more profits for the bank.

As the business is expected to grow in the future so the bank needs toexpand its space to accommodate additional customers. Further,

customers, waiting for their turns, should be provided with proper seating

arrangements and proper parking facility for staff and customers should be

provided.

The manager of the branch should delegated with some powers regardingthe credit extending facilities to save the time of customers and to entertain

more customers at the same time.

Financing facilities in the bank are favorably given to those having hugebank balances whereas others having small accounts, who are in a real

need are ignored. So financial facilities should be provided to those having

small bank balances as well.

It should be ensured that the ATMs are working round the clock withproper cash so that the problem of out of cash ATMs should be avoided

and the customers can enjoy transactions round the clock.

The bank should try to get all the branches online so that faster datatransfer and swift operations can be performed in lesser time.

The bank should try to get all the branches online so that faster datatransfer and swift operations can be performed in lesser time.

As operating fixed assets have increased (offices, cars) yet according toROA it is implied that these assets are not used to their full capacity. So,

the offices that are below capacity level should be sold to release money


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and they should be rented. And the replacement of cycle of cars should be

lengthened.

The bank should increase its investments and lending proportionately toeach other as both carry different risk portfolio. So, that earning assets will

be brought to their full earning capacity.

9.2 Conclusion

The branch manager is usually given very little authority regardingsanction of advances and over draft whereas the responsibilities are

numerous.

The marketing efforts at the branch level are less disciplined and there areno integrated efforts from all the staff members. The mobilization of

deposits is mainly considered as the responsibility of the branch manager

but the rest of the staff is usually least interested

The bank has been applying the modern concepts of management andmarketing at both micro levels. The interior and exteriors of the branch

have been changed but the staff of the branch has been found less

motivated towards the organizational objectives.

Employees of the branch are fed up with their work they feel bore fromtheir daily work especially the manager.

There is a lack of use of modern technology and most of the importanttasks are performed manually.

The decision making is still centralized as the middle and low levelmanagement is not taken into confidence.


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The promotional policy of the bank was observed as without any specificdirection. Though the bank has defined its mission and vision but no

specific plan has been designed so far.

Most of the employees working in this branch are not much familiar withcomputer. They just know how to use their part of software if any problem

comes in the computer they cant fix it.

The relationship between the employees of the branch is not that goodbecause of which the whole environment of the branch becomes less

favorable for work.

Miss utilization of office utilities, especially the telephone.

9.3 Implementation / Action Plan

Every organization has its own strengths, weaknesses and possesses opportunities for

improvements. Nothing is impossible in this world, as someone has rightly said, An

impossible is often untried.

Here are the implementation/action plans for the recommendations concluded in the

previous chapter.

9..10

Business Development Plan

In order to develop the implementation procedure to reach business development

objective, the following steps should be taken:

a. Campaigns to Open More Accounts

The volume of business, profits and size of bank depends significantly upon the

number of account holders banking with it. In order to increase the number of


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accounts, there should be a clear market plan. The strategy should be to either

penetrate a new market or increase the share of a given market.

The staff, branch managers and executives involved in business development should

prepare lists of different groups of prospective account holders and their neighbors,

friends and influential people and make efforts to open their volume of business and

deposit composition. This should be done in coordination with the various branches of

the Bank.

The campaign to open more and more accounts should be launched on yearly basis by

fixing monthly targets to open new accounts, and targets should be reviewed after

every month by the circles concerned in the Head Office.

b. Campaigns for Mobilization of Deposits:

Deposits are the main source of commercial bank funds and without them banks

cannot exist. It is very important for an individual bank to get funds as its one basic

function is to put them to work safely and profitably.

The act of attracting funds is important but, likes so many other processes of a

salesmanship, is intangible. The Bank can get funds by advertising for them, by direct

solicitation by contacts through their officers, managers and executives. Thus, they

can get the customers and hold them ultimately by furnishing the kind of banking

services that depositors feel is what they want and should have.

One of the best ways to retain deposits and increase business is by courteous and

efficient services for the satisfaction of the needs and requirements of the customers,

because Asatisfied customer is a best advertisement.


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c. Campaigns To Increase Business Share:Campaigns to secure highest market share of business like imports, exports, issuance

of letters of guarantee, remittances, bills, identification of productive, secure and

easily realizable advances etc. should be launched. The management of the Bank

should prepare a business development plan strategy by taking into account the

overall market position of the banks in the business, the market share of the Bank and

the proposed plan to achieve the market share in the banking industry. In the light of

the market share, business development targets should be fixed on annual basis by

fixing monthly targets for imports, exports, issuance of letters of guarantee, bills etc.

The achievement of targets should be reviewed every month by the respective circles

at the Head Office and necessary instructions and guidelines provided to the

respective area control and zones where the business performances are not according

to the set targets.

d. Training Of Personnel:We all know that the profitability, growth and survival of a bank depend upon the

business development. Therefore, the Bank should take steps to impart training to the

probationary officers, senior officers, managers and executives in modern business

development techniques and public relations.

Business development training is the process of imparting knowledge creating skills

and shaping attitude, work habits, and consists of telling, showing and teaching the

trainee and then monitoring his/her results and making constructive corrections.


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9.3.2 Market Research & Analysis Plan:

Before launching any venture or expansion plan, a detailed market research/analysis

must be carried out using any and/or of the following methods:

a. The best method is collecting first hand data from potential marketthrough surveys. The questionnaires must be unbiased and should not

prompt the desired results.

b. Historical data, if available could be very useful in determining thepotential and trends.

c. In case, the lack of awareness about the service or non-existence ofhistorical data makes it impossible to conduct a research, data of the

locations, which have similar or close characteristics, can be used.

9.3.3 Product Development Plan

The method to achieve strategic objectives is to develop new products or services to

meet the needs of a target market segment. New product development plan of the

Bank should incorporate the following:

A description of the key elements of the new product or service. The return on investment to be achieved at certain specified demand levels. Degree of exclusivity of schemes to be developed. Effects on existing schemes or services and whether alternatives are available

by upgrading or improving existing products.

Printing and packing techniques that may be incorporated in the new serviceor scheme in order to increase sales of existing service.

Interest rates of the new scheme or new service.


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9.3.4 Plan for Monitoring & Evaluation of Systems

The systems and procedures of the Bank must be dynamic, flexible and subject to

continuous monitoring and evaluation. The pre-requisites of an effective monitoring

and evaluation process are as follows:

a. A good, open and unbiased feedback system should be established toidentify the problems and suggesting improvements.

b. The feedback system must include the customers and all the staff membersfrom top to bottom within the Bank.

c. The feedback system must allow both, as needed and fixed intervalinformation.

d. The problems and errors must be analyzed and removed. The suggestionsshould be discussed at all concerned levels and implemented if found

useful.

9.3.5 Performance Evaluation Plan

Periodic performance evaluation is very important function to be performed. The

objective of evaluation must not be limited for salary review only. It should include

and be performed in the following manner:

a. Objectives for each employee must be clearly defined in a measurablequantifiable manner.

b. A methodical system must be adopted, whereby the employees alsoparticipate in the evaluation process.

c. The system must be such that where the performance against the givenobjectives can be measured numerically.


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d. The performance review must be done at short intervals say quarterly. Theperiodical performance reporting and meetings could be effective tools.

e. The performance review must be aimed at improving employees skillsand productivity by identifying training needs.

f. The system must be adopted where personal liking and disliking could notpave through.

9.3.8 Hiring Process & Job Description PlanThe human resource people believe that the failure of sub-ordinate is in fact failure of

manager as either he/she has not made the right selection or he/she has not able to

manage the people well. The problem could be in the hiring process or unclear job

description. To enable employees most productive at all levels, the Bank should

improve its hiring process and job description.

This can only be attained through the following:

a. Requirement analysis of the position.b. Preparing qualification and experience specification in accordance with the

objectives to be achieved from the position.

c. Implementing standardized selection criterion.d. Offering reasonable compensation package in accordance with job

requirements, experience, and qualification keeping in view the salary

packages of the existing staff at the same level.

e. Preparing detailed job description.f. Arranging detailed orientation programs.g. Setting objectives for the period.


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9.3.9 Internship Program PlanAlthough the above-suggested method would help the selection of right employees a

lot, yet there are chances that candidates having superficial knowledge can get

through and be selected. Thus a lot of organizational resources in terms of time and

money have to be spent on them for their proper training.

One of the best and cost effective methods to select the right kind of people is to hire

graduates from business and management schools as internees. The internship

program should spread over a period of at least six months. During the internship

program, a close watch should be kept on the internees. At the end of the internship

program, the performance of the internees should be evaluated and competent,

diligent and energetic internees should be hired on permanent basis.

9.3.8 Custom

Internship Report Nation Bank Limited 04

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