When I joined the bank, I had no practical experience with regardto working of a regular bank. Then I got an opportunity from theuniversity authorities to join and work with NBP to get experience ofthe rules and regulations that bank follows. I left the bank with a thirst to learn more. I seek a chance in orderto survive in a banking environment. www.vu39.com/forum www.vu39.com/forum
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in introduction of profit and loss sharing System (PLS) as a major towards
Islamization of economy.
NBP is 100% owned by the Government of Pakistan (GoP).
Branch Network:
NBP has an extensive domestic branch network of over 1500 branches locatedall over Pakistan. The Bank also has a presence in 24 international locationsincluding the USA, United Kingdom, Europe and the Far East.
The Head Office of the Bank is at Karachi. Ever since its establishment in 1949
it has been leading Commercial Bank of the nation, sole agent of the
Government of Pakistan’s batter trade with countries and of State Bank ofPakistan for the Government Treasury.
In Pakistan, the bank provides complete bank facilities to the people at over
1436 Branches operating even at the far lug Northern Areas. National Bank of
Pakistan is the first bank in the country to introduce and implement
supervised Ruler Credit Programmed help small farmer to obtain loans at his
doorsteps on easy terms and conditions. It has also played a pioneering role
in introduction of profit and loss sharing System (PLS) as a major towards
Islamization of economy.
The banks carry on its business through a wide network of branches locally
and internationally. These branches execute their function under the
supervision of local Regional Offices and regional offices are supervised by
the Head Office located a magnificent building in the heart of Karachi’s
center.
It is now extending the operations of the Bank to all branches to Banking, to
commerce, to industry to trustee services as well as to agriculture and to the
cheque which is drawn by one bank branch on another branch of the same bank. The bank has a primary and direct liability to pay
drafts.
PROCEDURE OF ISSUANCE OF DEMAND DRAFT
Bank receive a written request from a customer to issue a
demand draft on bank’s standard form. Amount of DD & exchange has to be deposited by the
customer either in form of cash or cheque.
Amount of exchange is as per bank’s schedule of charges.
Minimum amount is Rs. 50/- and 10 paisa per thousand uptoRs.100000/- AND Minimum Rs.100/- & 5 paisa per thousand
on amount of DD more than Rs.100000/-
Now we issue DD with due care, all details are clearly
mentioned on it. DD # mentioned on application form. After
signed by officer it handed over to customer after taking hissignatures on back of the application form.
After issuance of DD we make DD Advice(F-120). Recording is
made two registers one is DD issue register and other is DD
advice issue register covering all details like date, applicantname, person in whom favor DD is drawn and addressed
branch of NBP. Now we fill fanfold (F-15) Both debit & credit voucher signed
by officer and send debit voucher and DD advice to respectedbranch through NIFT. Credit voucher and application form isremains with the branch.
We pass entry as
Cash Account (amount of DD + exchange)NBP General Account
Exchange Account
Telegraphic Transfer
Telegraphic transfer (TT) happens or
activate when any client or account holder wants urgent payment toits respective party, which is out of city premises. This TT is donethrough fax and takes very less time.
remains the owner if the property, but the actual or constructive possession
remains with the creditors, though he has no right to sell it.
(2) GUARANTEES
When an application for an advance can offer any tangible security, the
banker may rely on personal guarantees to protect himself against loss on
advances or overdraft to the applicant.
(3) MORTGAGE
(Immoveable property possessed to the lender can be sold in case of default)
A mortgage is the transfer of an interest in specific immoveable
property for the purpose of securing the payment of money advanced or to be
advanced by way of loan, and existing of future debt, or the performance of
an engagement, which may rise to a particular liability. The person in whose
interest the property is transfer is called mortgagee.
(4) HYPOTHICATION
When property in the shape of goods is charged as security for a loan
from the bank, the ownership and possession is with the borrower, the goods
are said to be hypothicated. The essence of hypothecation is that neither the
property in goods nor the possession of them passes to the lender, but the
security is granted by means of letter of hypothecation which usuallyprovides for a banker’s charge on the hypothecated goods.
(5) PLEDGE
In a pledge, the ownership remains with pledger (borrower), but the pledgee hasthe possession of property until the advance is repaid in full. While in case of
defaulter, the pledge has the right of sale after giving due notice.
National Bank of Pakistan is at the forefront of international banking inPakistan which is proven by the fact that NBP has its branches in all ofthe major financial capitals of the world. Additionally, we have recentlyset up the Financial Institution Wing, which is placed under the RiskManagement Group. The role of the Financial Institution Wing is :-
To effectively manage NBP’s exposure to foreign and domesticcorrespondence
Manage the monetary aspect of NBP’s relationship with thecorrespondents to support trade, treasury and other key businessareas, thereby contributing to the bank’s profitability
Generation of incremental trade-finance business and revenues
NBP offers
The lowest rates on exports and other international banking products
Access to different local commercial banks in internationalbanking
Monthly Income Scheme
Minimum deposit of Rs. 50,000 and a maximum deposit of Rs.
5,000,000 for 5 years Free Demand Draft, Pay Order and NBP Online Aasan Banking* Free Cheque Book / NBP Cash Card (ATM + Debit)
It is PLS Saving Account Minimum saving balance of Rs. 20001& maximum balance of Rs.300000.
Pursuant to the announcement made by the Federal Finance Minister in his 2001-
2002 budget speech, a STUDENTS LOAN SCHEME (SLS) for Education waslaunched by the Government of Pakistan in collaboration with major commercialbanks of Pakistan (NBP, HBL, UBL, MCB and ABL). Under the Scheme, financialassistance is provided by way of Interest Free Loans to the meritorious studentswho have financial constraints for pursuing their studies in Scientific, Technicaland Professional education within Pakistan.
The Scheme is being administered by a high powered committee comprisingDeputy Governor, State Bank of Pakistan, Presidents of the commercial banksand Deputy Secretary, Ministry of Finance, Government of Pakistan.
ELIGIBILITY
Under the scheme the students are eligible to apply for loans provided:
1. He/she has obtained admission on merit in the approved universities/colleges of the public sector mentioned hereunder.
2. he/she falls at the time of admission within the age bracket of:-
For Graduation Not exceeding 20 YearsFor Post-Graduation Not exceeding 30 YearsFor Ph.D Not exceeding 35 Years
3. He/she has secured 70% marks in the last public examination4. he/she has undertaken the study of the subject given below
5. he/she is unable to pursue studies due to financial constraints.
TYPES OF LOAN
The loan facility will be available for entire duration of the study for:-
Schedule Fee Paid directly to theBoarding expenses excluding meal chargesProcurement of textbooks--- Disbursed directly to the student
REPAYMENT
The maximum period of repayment of loan is 10-Years from the date ofdisbursement of first installment .The borrower shall repay the loan in monthlyinstallment after six months from the date of first employment or one year fromthe date of completion of studies, which ever is earlier.
Under the Scheme, loans are available in the following subjects.
iii) Chemistryiv) Biology,v) Molecular Biology & Geneticsix) Mathematicsx) Other Natural Sciencesxi) DAWA and Islamic Jurisprudencexii) Computer Science/Information
System and Technology including hardware.xiii) Economics, Statistics and Econometrics Sciencesxiv) Business Managementxv) Commerce
OTHER INFORMATION
Applicatio form are available from the designated branches The students desirous of availing loan under the Scheme may apply on
prescribed form for financial assistance subject to he or she has gotadmission on merit through normal procedure in the Universities/Colleges afore-mentioned.
Applicants are required to submit/send their applications on theprescribed form, duly completed in all respect, to the designated branchesindicated against each University/College by the given date. Incompleteapplication is not be entertained.
Students who have availed this facility in the last / previous year(s) neednot to apply.
Must be Pakistani Resident (National) Aged between 21 and 65 years at the time of application/disbursement of
loan. Salaried Person, Self-employed professionals and businessmen. Property located in NBP approved localities.
Service duration: Two years for salaried class Three years for self-employed/business class.
Required Documents
With Applications Form
• Two attested passport size photographs• Two attested copies of your National Identity Card• Cheque for the processing charges
Property Documents
Any title document available (other documents may be required)
1) FOR SALARIED PERSONS, WHOSE SALARIES ARE DISBURSEDTHROUGH NBP BRANCH
• Employer Undertaking for remittance of salary at relevant NBP branch forcredit to customer’s account (to be provided at a later stage, format available at
relevant branch)• Employee ID Copy attested by NBP Branch (where applicable)• Attested copies of last three (3) months salary slips• Attested copies of last three (3) months bank statements
2) FOR SALARIED PERSONS OF MNCs AND NBP APPROVED COMPANIES
• Employer Undertaking duly attested by relevant NBP Branch, whereapplicable (to be provided at a later stage, format available at relevant branch)• Attested copies of last three (3) months Salary Slips• Letter of Verification of Employment on Company Letterhead mentioning thedate of joining• Attested copies of last three (3) months bank statements
3) FOR OTHER SALARIED PERSONS
• Letter of Verification of Employment on Company Letterhead mentioning thedate of joining• Attested copies of last three (3) months Salary Slips• Attested copies of last twelve (12) months bank statements• Attested copies of last three (3) months paid bills for electricity and telephoneOR copies of last (12) twelve months credit card bills (which ever is available)
4) FOR BUSINESS PERSONS
• Bank Certificate stating applicant maintaining Business Account and the dateof account opening• Attested copy of latest Form 29 in case of Private or Public Limited Company• Attested copy of Partnership Deed (where applicable)
• Attested copy of current professional association membership/practicingcertificate. Adequate proof of professional engagement like bank certificates• Attested copy of Partnership Deed (where applicable)
The sundry deposit account is subdivided into two categories namel;y,:Other
Sundry Liability Account: and :Sundry Deposit Account:. In other words
Liability account only items other than deposits would be entered. The
balance outstanding in these two accounts at the close of each week shall be
reported in the scheduled telegram against the existing codes I-e
Sundry deposit account N109B and other sundry liabilities account N113b.A
subsidiary register B-12 on the pattern of the sundry deposits account register shall be maintained as other sundry liability register. Entries are however, not
to be made in these accounts in regular course of business, but only in cases
when due to some reasons ,the amount could not immediately be credited to
their proper accounts. Such entries would be of temporary nature. Amounts
temporarily credited to sundry deposits accounts/other sundry liability account
are to be reversed at the earliest moment so that outstanding is cleared undue
delay.
Adjusting accounts
Expenses payable but not paid; The entries passed under different heads of charges are on reversal, individually carried ouyt in the general ledger aresubsequently when the relative bills on receipts are sanctioned for paymentby competent authority, shall be paid by debit to other sundry liability account.Whenever it is felt that bills under a particular head for which provision hasbeen made at the end of the year have been paid and the amount providedfor was in excess of the requirement ,the balance should be credited to thecharges account.
All vouchers on suspense accou=nts and all debits to sundry depositsaccount must be signed by the operations manager singly up to the amount of Rs 5000/- for cash and Rs 10000/- for transfer ,and jointly with his secondofficers for amounts exceeding theses limits.Other supervising officials at themanagers discretion may pass credit entries in sundry deposit account.Therecipients of the money must properly receipt all debit vouchers for cashpayments and on transfer debits particulars of disposal must be recorded.Full particulars of all orignal items will be entered in the suspense account or sundry deposits account register B-11 or B-12 as the case may be.Whenentries in these accounts are reversed ,the dates of the reversing entriesmust be entered against the orignal items and initialed by the manager .Fullparticulars of reversing entries vmust be written on the vouchrs but need not
be entered in the registers, the words entry reversed and the date of theorignal items being sufficient.
All branches where there are only a few entries in the sundry depositsaccount, a sundry deposit account register may be dispensed with providedall reversing entries are passed by the manager in the ledger account,inwhich full particulars of original items must be written,the dates of all contraitems entered and each individual entry initialed.When sundry deposits
account register is maintained only the daily debit and credit total be posted inthe ledger account.
Temporary running finance must not be debited to yhe suspense account.Refer to the temporary running finance instructions.
Suspense account for meeting entertainment expenses which are paid strictlyreimbursed basis advance payment in respect of rent of branch premises as
well as rent ceiling provided to the banks; officers (should be debited to thegeneral ledger head prepaid rent account),advance deposits made to the postoffices,telegraph,electric supply companies gas supply companiesetc,(shouldbe debited to general ledgere head advance deposit accounts) and expensesof law charges,stamp fees and expenditure incurred in respect of borrowerscases in courts (should be debited to respective subheads of chargesaccounts)
Sundry deposits accopunts should be used only for items ,and the entriestherein must be kept to a minimum .Bills proceeds received late in the dayshould ordinarily be credited to proper accounts even if it is too late to
dispatch the relative advice the same day and the amounts for whichpayment orders have to be issued should be credited direct to the paymentorders account.On the last working day of each month except December branches willforward a detailed staement on form F-47 of all items outstanding insuspense account at the beginning of the month and all entries ,debit andcredit ,passed during the month to their concerned office.A detailed statement on form F-48 of all items outstanding for over 6 monthsin sme deposits account will be forwarded to the controlling office at the endof each month except December.Aggregates of the remaining items shouldhowever be added to the total of the detailed items so that the ultimate total
agrees with the balance.Annually on the 29th
june or the previous working day,if that day is a holiday ,amounts outstanding in sundry deposits account for more than three years will be transferred to an office accountManagers must see that all outstanding in suspense account and sundrydeposits accounts clreaed as soon as possible,and will therefore ,personallycheck the outstanding amounts atleast once in a week.Entries made in suspense account on account of tax at source advanced paidreceivable advance expenses on new branches ,advance rent payment ,legalexpenses,mark up/service charges recovered,Qard- e – hassana for marrigemay be classified as other assets .
Pakistan Is A Developing Country And Our Debt-Burdened Economy
Is A Major Threat For The Banking Business.
High probability of competitive reaction Foreign banks may increase marketing support and aggressive
sales drive. Launch of similar products by large nationalizes banks with
extensive distribution network. Political Condition The Employee Turnover Can Create A Serious Problem For The
Bank.
Problems faced by the Bank
I have done my internship in National Bank Of Pakistan, During
the course of my internship I observed some deficiencies in thebanking operations. Some dilemmas faces by bank is as follows:
NBP still following the old methods and techniques which arenot up to the mark. Most of the work done manually which isnot reliable in future. Computer facility is not available.
All branches of national bank of Pakistan are not online, whichbadly affect the operations of bank branches.
There is lot of burden of work on bank staff. One person
handles many things, which affect the efficiency of that
person.
Overall timings of entrance into the office for the employeesare very strict but there is no time for them to leave the office
and no over time is paid to them which may be a significant
reason of dissatisfaction for their jobs.
During my internship I realize that bank needs young andexperienced new staff to meet technology and global
challenges.
Many of National bank customers are illiterate and retired
servants so bank officers face much difficulty in handling
No proper customer services department is available in the
branch. There is no information counter in the bank, socustomer also face difficulty regarding financial matters.
Deficiency in adopting new standards of marketing to strive inthis competitive era.
Job rotation is very important for sound environment and
communication purposes but there is lack of job rotation inthe bank.
I also observed some social problems with women workers in
the bank.
Internship programme of National Bank Of Pakistan is not
satisfactory.
The behavior of staff towards internee is not well. They do nottell enough to the internees about typical banking operations.
Staff working in the bank is not properly trained according to
the modern banking requirements. they are usually old ageand working from longer period of time.
There is no satisfactory training system of existing
employees.
Recruitment policies of the bank is very tough which does not
motivate young and fresh graduates to serve bank.
The research cell should be formulated and it shouldcontinuously try to gather information about the present actions
of its competitors and the expected future actions. So in thisway more effective strategies can be formulated.
Bank is a service industry; people normally prefer those
banks where they feel comfort and get best of the services,so such strategies should be adopted by which the servicesenhanced and attract more customers. NBP should give
proper attention on staff training and should provide the
facility not only in Pakistan but also in abroad. Every year
some of the employees should be sent for training to othercountries.
My primary focus in 6 weeks duration was on Credit/Advances department. I spend mostof my internship period in that department. I worked for “President Rozgar Scheme” andused to deal with customers who come there to take advantage from this scheme. Differentpeople used to come there who were unemployed and want to start their new andpersonal business. From this department I learn that a banker must;
Know how to deal with customers Know how to convince & satisfy them Have knowledge about the product Be very confident before his/her client
President Rozgar Scheme is recently introduced in NBP for unemployed people.Under this scheme NBP is offering Rikshaws and personal computers to starttheir personal business. Bank buy these items for the customer and customer pay
the amount in a given period.
The solution of Pakistan’s major socio-economic problems primarily lies in thedevelopment and growth of small & micro businesses. These will not onlyprovide employment opportunities to ever-growing population demand but willalso become the catalyst for breaking the vicious circle of poverty.
In this regard, NBP has developed a full range of Products under the President’sRozgar Scheme with a brand name of “NBP KAROBAR”.
Under the President’s Rozgar scheme, NBP offer following products:
i) NBP Karobar Utility Storeii) NBP Karobar Mobile General Storeiii) NBP Karobar Transportiv) NBP Karobar PCOv) NBP Karobar Tele-center
i) NBP Karobar Utility Store:
The product has been designed in collaboration with “UTILITY STORESCORPORATION OF PAKISTAN (USC)” to provide financing facility of anaverage amount of Rs.100,000/- for a maximum period of five years withgrace period of three months. This is available to all eligible citizens ofPakistan for setting-up small-scale Retail Outlet or Mobile Utility Store.
Following two financing options are available under this product:
NBP KAROBAR Utility Store (Shop) NBP KAROBAR Mobile Utility Store
NBP Karobar Mobile General Store
NBP KAROBAR Utility Store (Shop):
Financing facility available to set-up a small scale Retail Outlet (Utility Store in ashop) for purchase of furniture & fixtures. This is also applicable on payment ofsecurity deposit / advance rent under franchise from the USC. However, stocksare purchased by the customer.
NBP KAROBAR Mobile Utility Store:
Financing facility available to purchase a 2/3 wheeler, 4 stroke
Petrol/CNG/LPG Vehicle (Auto Scooter / Motorcycle Rickshaw) with attachedLoader body (Thehla type) under franchise from the USC to carry utility goodsfor retail sale ideally in areas where accessibility to conventional utility stores isdifficult.
NBP Karobar Mobile General Store (without USC Franchise):
This financing program has been designed on the similar pattern of Mobile
Utility Store. The only difference is that the borrower has the liberty ofprocuring stock/supplies/grocery items from open market. Under thisproduct the average loan size of Rs.100,000/- is given for a maximum periodof five years with a grace period of three months.
vi) NBP Karobar Transport:
The NBP Karobar Transport is designed to finance 2/3 wheeler, 4 strokePetrol/CNG/LPG Vehicle (Auto Scooter / Motorcycle Rickshaw) to theeligible citizens of Pakistan for providing less expensive environment friendlytransport facility. Under this product average loan size of Rs.100,000/- isprovided for a maximum period of five years with a grace period of threemonths.
This product is designed to finance setting-up a PCO. NBP is providingfinancing for the purchase of Mobile/Wireless Telephone Set withconnection, Credit Balance. The average amount of financing under thisproduct is be Rs.5,000/- for a maximum period of two years with a graceperiod of three months.
viii) NBP Karobar Tele-center:
This product is specially designed to finance setting-up a Tele-center. NBP isproviding financing for the purchase of Mobile/Wireless Telephone Set withconnection, Computer, Printer and Fax machine cum Photocopier etc. toestablish tele-center on a rented shop or owned premises. The averageamount of financing under this product is Rs.50,000/- for a maximum periodof two years with a grace period of three months.
CONDITIONS TO APPLY
The application forms is available in all NBP branches
The scheme is offered to eligible young and literate citizens ofPakistan.
Falling within an age group of 18-40 years
Having a minimum qualification of Matriculation (except for femalesin the PCO/Tele-center product).
The eligible borrowers are required to make a down payment of 15%. Asset and Life & Disability insurances is mandatory under this
scheme. The 15% down payment is include 1st year’s asset insurance premium.
The cost of life and disability insurance is borne by GoP.
The mark-up rate for the 1st year is 12%
Fifty percent (50%) of this rate is paid by the customer i.e. 6% and thebalance of 6% is borne by GoP
NBP is the largest bank of Pakistan with the customer base of over 10 millionaccount holders. The scheme is being launched from designated branches ofNBP, however, This scheme is providing direct and indirect jobs to the tune ofapproximately 5.4 million Pakistanis.
It has the largest borrower base exceeding one million customers and growing.
Compared to the average of its peers, for 2003,
NBP was bigger by 53% in asset size,
100% in pre-tax profit,
25% in Return to Assets,
23% on Return on Equity
114% in Earning Per Share.
Procedure:
1. First of all Customer has to open an office account in NBP.
2. All the transactions of President Rozgar Scheme are done under thisaccount.
3. Customer fills up a form, provided by credit officer.
4. This form contains following informationb. Name of the borrowerc. Father’s named. ID card numbere. ID card number of fatherf. Phone number
g. Addressh. Monthly income (if doing job or business)
5. Bank needs at least two References from his residential area.
6. Following information about the references is needed
After going through SWOT analysis of NBP I have come to the conclusion thatalthough NBP has major market share and one of the most specialized bank yetit needs to improve its efficiency in various dimentions.Here are somerecommendations which if adopted can really proved to be fruitfull;
1. NBP has an exorbitant amount of funds at its disposal even then itsinfrastructure is relatively poor as compared to its competitors.Thisinfrastructural deficiency is one of the main reasons of failure of
attracting more customers.There is strong need to invest in thisdirection.
2. It is not considered by the customers as best provider of bankingservices as itdoes not spend handsomely on advertisementbudget.There are neither any brouchers nor any other form of publicityso major portion of target customers are ignorant of its activities.
3. Customers feel hesitant while dealimg with NBP as customers have tosurpass a lengthy and cumbersome procedure to avail any facility
,There is beureacratic structure found in NBP so employees are notconcerned about their performance so there is need to replace thisstructure with that of based on merit system.
4. There are not found satisfactory Quality Service Standards as opposedto its competitors (other commercial banks) which have emphasis oncustomer focus like post of CRO(Customer Representative Officer) onthe other hand NBP has no such post to guide their customers.Thus itis strongly recommended to appoint a CRO at each branch.
5. There is strong need to reposition the image of NBP in the minds of masses. People always prefer forging banks over NBP.So its requiredto change priorities and customers are to be given more priority.
6. The trend of Islamic banking is gaining popularity now people aregetting more aware of Islamic banking products and other derivatives,in this regard NBP has not taken any substantialstep.People are just hoping to replace present interest based system
with pure non interest based banking so it is highly desirable to ponder on these lines and NBP is supposed to offer Islamic banking at masslevel being a national bank NBP has much burden on its shoulder.
7. Credits cards and other consumer financing has been a big failure for the NBP now its time to dive in this race again in order to provecompetitive in the present arena of severe competition and in order to
retain its existing customer and also attracting new ones as well.
8. As sky is the limit so is the case with NBP it does need to find out moremarkets for both purposes ;for receiving deposits and for incurringinvestments in diverse fields in diverse countries in order to mitigaterisk arising out of external environment.A diversified portfolio is theneed of the time.
9. The branch where I work was lacking staff,resources(basicinfrastructure I-e furniture,computers and space).At clearing ,pension
there was one officer for each work category and in credit departmentthere are only two officers one of them is a credit officer while other was a loan officer,the branch has a vast public interaction ,so thisshortage of resources hinders the banking operations and customersremain unsatisfied ,specially at the time of the start of the month it wasnearly impossible to respond to eeach customer and to attend themproperly ,so I recommend on the basis of my personal observation thatNBP Samanabad building is needed to be reconstructed in order tobroaden it. Appointing more staff at this branch can solve the problemsfaced by the customers and employees as well particularly in pensiondepartment.
10. All the branches are not computerized so on time and real timetransaction recording is not possible which causes failure to maintainand ensure timely availability of up to date data.In most of thebranches of NBP,manual recording is still followed by the staff which istime consuming ,more exposed to wastage and is not error free.So it isacute need to replace present partial computerized system withcomplete computerized system.