Internship Report on NBP

National Bank of Pakistan

INTRODUCTION
National Bank of Pakistan is the largest commercial bank operating in Pakistan . Its balance sheet size surpasses that of any of the other banks functioning locally. It has redefined its role and has moved from a public sector organization into a modern commercial bank. The Bank's services are available to individuals, corporate entities and government. While it continues to act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does not have a presence) it has diversified its business portfolio and is today a major lead player in the debt equity market, corporate investment banking, retail and consumer banking, agricultural financing, treasury services and is showing growing interest in promoting and developing the country's small and medium enterprises and at the same time fulfilling its social responsibilities, as a corporate citizen. 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 I.I.Chundrigar Road, Karachi. The bank is engaged in providing commercial banking and related services in Pakistan and overseas. NBP is 100% owned by the Government of Pakistan (GOP). The bank also handles treasury transactions for the Government of Pakistan (GOP) as an agent to the State Bank of Pakistan (SBP). National Bank of Pakistan maintains its position as Pakistan's premier bank determined to set higher standards of achievements. It is the major business partner for the Government of Pakistan with special emphasis on fostering Pakistan's economic growth through aggressive and balanced lending policies, technologically oriented products and services offered through its large network of branches locally, internationally and representative offices. The story of National Bank of Pakistan is part of our struggle for economic independence. When we won political independence, mostly Hindus controlled our 1

Internship Report on NBP economy. East Pakistan was secure from massive migration but its economy was also, being dependent on Calcutta badly hurt. Most bankers and business experts left Pakistan and the economic life was brought to a standstill. The mostly branches of Imperial Bank of India were only in partial operation with few staff. It was very difficult for Pakistan to build up its own Banking system immediately after independence without sufficient resources as at that time most of the commercial banks in Pakistan were the branches of foreign banks, Indian and others was staffed mainly by non-Muslims. Those banks, which stayed, were considering the winding up of their business. By 30th June 1948, the number of scheduled banks in Pakistan declined from 487 to only 195. There was a controversy on establishment of our Central Bank because we had no experience but it was resolved and SBP was established, 3 month a head of schedule, on July 01, 1948. On October 03, 1949, 2 central banks were to announce the new par value of both currencies but India denied a day earlier. India also froze out trade balance surplus that is still an unsettled dispute. India had also withdrawn the merchants who were employed annually for movement of jute crop by financing it. There being no jute industry, prices fell sharply, foreign banks and foreign merchants stood aside and an agrarian unrest was threatening. Two Ordinances were therefore issued. Jute Board Establishment Ordinance NBP Ordinance dated 08.11.1949

ESTABLISHMENT OF NATIONAL BANK OF PAKISTAN

NBP was established on 20.11.1949 to provide finance to suitable parties under the National Bank of Pakistan Ordinance No. 21of 1949. It is a semipublic bank and functions like other commercial banks. NBP stood behind jute trade, SBP stood behind NBP and the Government stood behind SBP. Speedy it was such that 6 branches came in to being at once and the doubts on our ability to handle the situation was dispelled forever. Now the Jute Board and NBP were in this field, the foreign 2

Internship Report on NBP merchants and bankers also rushed into get their share in the business and consequently NBP had to lay out much les finance that it could. Until June 1950, NBP remained exclusively in Jute operation; therefore other commodities were also taken up. In 1952, NBP replaced Imperial Bank of India. In 1962, the number of branches increased from 6 to 239 and deposits from Rs. 5 crore to Rs. 106 crore, profit from 3 million to 21 million, and the staff increased from 380 to 7091, as compared to 194950. in December 1966, its 600th branch was opened raising the deposit to 2.31 billion and staff to 14963. Up to 1965, the shareholders had received 225% of their original investment. Today National Bank has more than 1250 branches all over Pakistan and also operates in major business centre abroad.

DUAL FUNCTION OF NBP

The National Bank of Pakistan performs two types of functions. It acts as an ordinary commercial bank. And at places where there are no branches of Pakistan it represents Pakistan that is why it cannot be privatized. The NBP acts as trustee of the Government of Pakistan and semi government finances including National Investment Trust (NIT). National Bank also acts as the agent to the State Bank of Pakistan (SBP) where the SBP does not have its own branch.

Internship Report on NBP

PRODUCTS OFFERED BY NBP

Following are the products offered by the National Bank of Pakistan to its customer.

PREMIUM AMDANI
Monthly income scheme Earn up to 11% p.a. + Minimum deposit of Rs. 20,000/- and a maximum deposit of Rs. 5,000,000/for 5 years Free Demand Draft, Pay Order and Checque Book Convenience of NBP online Aasan Banking (for online banking customers) Free NBP Cash Card (ATM+Debit) Running finance facility up to 90%

PREMIUM SAVER
Profit and Loss Saving Account Earn up to 7.25% p.a. + Minimum saving balance of Rs. 20,001/- & a maximum balance of Rs. 300,000/Free NBP Cash Card (ATM + Debit) Convenience of NBP Online Aasan Banking (for online banking customers) Two debit withdrawals allowed in a month & no limit on number of deposit transactions Profit calculated on monthly and paid on half yearly basis

KAROBAR
Mera apna Karobar Minimum down payment, 10% of asset price (5% for PCO & Telecaster) Tenure 1 to 5 years (for PCO 2 years) Grace period 3 months Maximum loan amount Rs. 200,000/Age 18-45 years 4

Internship Report on NBP Mark-up (variable) 1 year KIBOR + 2.00% p.a. The customer will pay markup @ 6% p.a., rest will be borne by GOP* Life & disability insurance paid by GOP

SAIBAAN
Home Financing Home Purchase Home Construction Home Renovation Purchase of Land + Construction Balance Transfer Facility (BTF)

ADVANCE SALARY
Personal Loan Easy installments of 1 to 60 months at your choice No minimum income collateral & insurance charges required Quick processing and fastest disbursement The product is for permanent employees of Government, Semi Government and Autonomous bodies receiving salaries through NBP accounts

CASH CARD
ATM + Debit Card Use it as an ATM in any of the ATMs in Pakistan Use it as Debit Card in any of the outlets with ORIX POS machine Cash withdrawal up to Rs. 20,000/- per day Account Balance Enquiry Mini Statement (Only at NBP ATM) PIN Change facility (Only at NBP ATM)

Internship Report on NBP

INVESTOR ADVANTAGE
Financing facility for stock investors Comfortable environment for trading No security requirement, except for the customers equity Customers equity freely available for investment Equity acceptable in cash or approved shares

CASH N GOLD
Ready Cash against gold Facility of Rs. 10, 000/-against each 10 gms of net weight of Gold Ornaments No maximum limit of cash Repayment after one year Roll over facility No penalty for each repayment

KISAN TAQAT
NBP Dairy Farm Scheme Benefits for using NBP Kisan Taqat Scheme Nearest Bank Branches Easy and very limited paper work No headache of submitting the installments Guidance and Help of Trained employees

KISAN DOST
Agriculture Farming Program Competitive mark-up rate Quick & easy processing Delivery at the farmers doorstep Technical guidance to farmers Wide range of financing schemes for farmers

Internship Report on NBP Finance facility up to Rs. 500,000/- for landless farmers against personal guarantee Financing available against pass book, residential/commercial property, gold ornaments and paper security Loan facility on revolving basis for three years (renewable on yearly basis without documentation and approval)

PAK REMIT Product Information

Pakremit is an internet based Home Remittance Service. This service is available to U.S. residents for sending money to their family and friends in Pakistan. One must have a valid US Dollar account with a U.S. bank or a US Dollar credit or debit card in order to remit funds through this channel. Remitters in USA can log on to our user friendly website, www.pakremit.com and easily remit funds to Pakistan from the comfort of their homes, in a matter of minutes. The service is fully secure with advance encryption application and is available for use 24 hours a day, 7 days a week. Fees and exchange rate have been set at competitive levels and the remitters have the ability to track delivery of funds as well.

Process
Remitters log on to www.pakremit.com and after completing the registration process, are able to remit funds. The whole process takes a few minutes. Funds in Pak Rupees can be sent to beneficiaries, having an account with any bank in Pakistan, including NBP. While funds are credited directly to beneficiaries maintaining accounts with NBP, a pay order or demand draft is couriered to other banks for their customers. Pay order or demand draft can also be couriered directly to the beneficiarys office or home, if requested by the remitter. Funds in US Dollars can be sent only to a Beneficiary maintaining a US Dollar account with one of NBPs Foreign Exchange Branches. Click here for details of NBP Foreign Exchange Branches. 7

Internship Report on NBP

USPs (Unique Selling Points)

Convenient and Fast Reliable and Secure Available 24 x 7

PROTECTION SHEILD
Personal Accident Insurance No documentation No medical required Premium Auto Debit facility & choice of deactivation Coverage includes death due to: Natural Calamities e.g. Earthquake, Flood, Cyclone etc. Accident Riots Civil Commotion Strikes Acts of Terrorism

SERVICES OFFERED BY NBP

DEMAND DRAFT
National Bank provide the facility of the Demand Draft. Demand draft is an instrument, which is drawn by one branch of the same bank. If any person wants to make payment from one city to another city there he can make payment through demand draft. Bank charges a commission for performing this kind of service according to bank rate schedule, which is revised after six months. Demand draft may be issued or paid.

MAIL TRANSFER

Internship Report on NBP National Bank Provide the Services of Mail Transfer. Bank to bank remittance are transfer through mail. MT advised is prepared and test no. is written on this MT advice. The advice is given to the dispatch department for onward transmission. Fixed charges are deducted as well as FED for the MT.

PAY ORDER
Pay order is also a mode of payment but in this mode payment can only be made within the city from one party to another

TRAVELERS CHECQUE
National Bank also issues Traveler Checques of different amount for the customer according to their need. These checques helps in safe keeping of the money when one goes out station.

LETTER OF CREDIT
National Bank provides the facility of the letter of credit as well.

FOREIGN REMITTANCE
Remittance is the monetary transfer from one place to another place or from one country to another country to fulfill the requirements of the customers by the order of the customer. National Bank provide the facility of transferring money from Pakistan to other countries.

N.I.D.A
The scheme was launched in December 1995 to attract corporate customers. It is a current A/c scheme and is a part of the profit and loss system in operation throughout the country.

ISLAMIC BANKING
NBP has expanded its range of products and services to include Shariah Compliant Islamic Banking products, now available at Islamic Banking Branches at Karachi, Lahore, Faisalabad, Rawalpindi and Peshawar.

Internship Report on NBP

Islamic Banking VISION

To set standards of best practices and performance through efficient asset allocation, and offer / develop products based on the true spirit of Islamic finance

Islamic Banking MISSION

To become a leading player in the growing field of Islamic Finance in Pakistan and abroad, providing depositors and shareholders in a truly SHARIAH COMPLIANT way, the best combination of returns and future growth

Islamic Banking Deposit Schemes

Deposit Schemes being offered by NBPs Islamic Banking Branches would include the following: Current Deposit Scheme Profit & Loss Sharing (PLS) Deposit Scheme

Current Deposit Scheme Ideal for customers looking for security of their funds along with absolute convenience in its use, in the form of Current accounts Funds deposited with the bank will be utilized by the bank at its sole discretion in Shariah acceptable avenues. The Customer will have the flexibility to withdraw a part or the whole of their balances at any time as per their requirement This is a non remunerative deposit scheme and thus the customer will not be sharing the profits nor will be sharing losses (if any). However, the Bank may at its absolute discretion give rewards to these Depositors depending upon the operational results of the Bank. Losses will not be passed on to these Depositors. Other terms, conditions and rules for Current Deposit Accounts to be advised by the Bank at the time of opening of Account. 10

Internship Report on NBP Profit & Loss Sharing Deposit (PLS) Scheme PLS Saving Deposits Scheme will accept deposits on Mudaraba basis, where the depositor will be Rabb-ul-Mal and Bank will be Mudarib. The Bank will invest the deposited funds at its (Banks) sole discretion in Shariah acceptable avenues The Depositor will have the flexibility to withdraw a part or the whole of their balances at any time as per their requirement. The Bank will give profit to the Depositors on the basis of agreed ratio of actual profits to be announced by the Bank from time to time. In the event of financial loss, the PLS depositors will bear the loss in proportion of their investment. The Depositors will not participate in the management of the business of the Bank Other terms and conditions as well as rules for PLS Deposit Account to be advised by the Bank at the time of opening of Account.

Islamic Banking Finance Facilities

Commercial and Corporate customers requiring financing will have the following financing facilities available to them to meet their requirements: Murabaha Murabaha may be defined as a contract between a Buyer and Seller under which the Seller discloses to the Buyer the cost of goods being sold and adds an agreed profit. Price is payable on spot or at a certain future date, in lump sum or in installments (deferred payments). Under the MURABAHA FACILITY, the Bank will first purchase the required goods directly or through an Agent. All costs incurred on such purchases will be borne by the Bank. Subsequently the Bank will sell the goods to the customer on deferred payment basis (30 days to one year) at an agreed price comprising cost of goods purchased and Bank's profit. 11

Internship Report on NBP On due date the customer will pay to the Bank the agreed price, in lump sum or as per the agreed installment schedule.

Ijarah Ijarah means to give something on rent.The term IJARAH is analogous to the English term leasing. Firstly the Bank will purchase the Assets as required by the Customer and subsequently the assets will be leased to the Customer on the terms and conditions as agreed with him. Ijarah Facility will be offered for the following assets: Vehicles (both Commercial and Private) Office Equipment Plant and Machinery

12

Internship Report on NBP

GENERAL PROFILE OF THE NBP

To be recognized as a leader and a brand synonymous with trust, highest standards of services quality, international best practices and social responsibility.

NBP will aspire to the values that make NBP truly the Nations Bank, by: Institutionalizing a merit and performance culture Creating a distinctive brand identity by providing the highest standards of services Adopting the best international management practices 13

Internship Report on NBP Maximizing stakeholders value Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate

CORE VALUES
Highest standers of integrity Institutionalizing team work and performing culture Excellence in service Advancement of skill for tomorrows challenges Awareness of social and community responsibility Value creation for all stakeholders

GOALS
To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products.

AWARDS AND ACHIEVEMENTS

"Best Foreign Exchange Bank 2008 awarded by world's leading financial journal Global Finance." Stable AAA/A-1+(Triple A/A-One Plus) rating (Standalone Basis) by JCRVIS (July 2007) Best Return on Capital for 2006 amongst all Banks in Asia. - Banker Magazine in July 2007 World's leading financial journal, Global Finance has named NBP as the Best Emerging Market Bank from Pakistan for the year 2006. "Best Foreign Exchange Bank Pakistan award for the year 2006 by world's leading financial journal Global Finance. Due to consistent improvement in NBP's Core Profitability, Asset Quality and Economic Capitalization in recent years, Moody's Investors Service upgraded the Financial Strength Rating (FSR) rom E+ to D-, in November 2005. 14

Internship Report on NBP Best Foreign Exchange Bank Pakistan award for the year 2005 by world's leading financial journal Global Finance. Best Bank - Pakistan award for the year 2005 by world's leading financial journal Global Finance. The Asian Banker, a reputable financial journal, has published the report of its research project on the ranking of 300 of Asia 's Strongest Banks based on a 11-Dimensional Dynamic Scoring Criteria has adjudged National Bank of Pakistan as the Strongest Bank in Pakistan . On the basis of overall financial performance during 2004, NBP has been listed Amongst top 1000 banks in the world and Number 1 Bank in Pakistan by the prestigious Banker Magazine in its issue of July 2005 . The Banker Magazine in July 2005 recognized NBP as the 10th Best Bank in terms of Profit on Capital' in the world. Bank of the Year awarded for the year 2005 by the world renowned The Banker magazine owned by the Financial Times Group, London. On an all Pakistan basis National Bank of Pakistan was awarded the Kissan Times Award for the year 2005 by the Prime Minister, Mr. Shaukat Aziz, for its services in the Agriculture Sector .World's leading financial journal, Global Finance in an exclusive survey has named NBP as the Best Emerging Market Bank from Pakistan for the year 2005. Bank of the Year award for the year 2004 by the world renowned The Banker magazine owned by the Financial Times Group, London. Euromoney Magazine, a leading and prestigious journal, published from London , UK , in its issue of March 2005 has published Moody's Investors Service rankings in which NBP is the only Pakistani bank which has been ranked among the Top 100 banks of Asia for it performance in the fiscal year 2003 WEBCOP-AASHA, an alliance against gender discrimination at workplace, presented a Recognition Award to National Bank of Pakistan on December 18, 2004 for having a Gender Sensitive Management. In May 2004, NBP's standalone long-term rating was upgraded by JCR-VIS Credit Rating Agency to AA (double A) from AA -( double A minus) with stable outlook, while standalone short-term rating was maintained at A-1+ 15

Internship Report on NBP (A one plus). This is now the best rating for a local commercial bank in Pakistan. In its issue of March 2004, Global Finance has also declared NBP as The Best Foreign Exchange Bank in Pakistan. The Banker Magazine in July 2003 recognized NBP as the bank with the highest return on capital in Asia and No.8 in the world. World's leading financial journal, Global Finance after a worldwide survey declared NBP in its issue of May 2003 as one of the best banks in the emerging markets. Bank of the Year awarded for the year 2002 by the world renowned The Banker magazine owned by the Financial Times Group, London. Bank of the Year awarded for the year 2001 by the world renowned The Banker magazine owned by the Financial Times Group, London.

MANAGEMENT AND ORGANIZATION STRUCTURE

MANAGEMENT AND ORGANIZATION

The ownership, management, and control of all the commercial banks were taken over by the Government of Pakistan on January 1st, 1974. A banking council was formed under the Nationalization Act 1974. The banking council was set up for making policy recommendations to the Federal Government, formulating policy guidelines for the banks and their reorganization. The management and organizational structure of the nationalized banks have uniformity.

16

Internship Report on NBP

ORGANIZATIONAL STRUCTURE
At Head Office Karachi

PRESIDENT

DIRECTORS

GROUP CHIEFS

Business Group Chief

Operational Group Chief

Risk Management Group Chief

Compliance Group Chief

BOARDS OF DIRECTORS
Syed Ali Raza Chairman & President Mr. Sikandar Hayat Jamali Director Mian Kausar Hameed Director 17

Internship Report on NBP Mr. Ibrar A. Mumtaz Director Mr. Tariq Kirmani Director Mr. Mohammad Ayub Khan Tarin Director Mrs. Haniya Shahid Naseem Director Mr. Ekhlaq Ahmed Secretary Board of Directors

DESCRIPTION OF VARIOUS DEPARTMENT/SECTION

NBP AS A REPRESENTATIVE OF SBP

Collection of checques and bill of exchange for its customers. Furnishing trade information and tendering advice to the customers. Formulating operation policy guidelines for the banks. Laying down performance criteria for banks and taking steps for ensuring their observance. Evaluating the performance of the banks in the context of operational guidelines issued to the banks. Determining the areas of coordination of the banks. Exercising and performing such powers and functions of the federal govt. under the act and such other functions as the federal govt. may assign to it. 18

Internship Report on NBP

Coordinating the planning of the operations of nationalized banks and exercising general overall checks on the cost emendations to the federal govt. for the appointment of auditors of the bank.

FUNCTIONS OF NBP
As a commercial bank it performs the following functions: Accepting of deposits of money on current a/c, saving a/c, term deposit and other profit and loss sharing accounts. Borrowing money and arranging finance from other banks. Advancing and lending money to its clients. Financing of projects including technical assistance, project appraisal through long term & short term loans. Carrying on agency business of any description other then managing agent exchange, promissory notes, drafts, bill of lading, other instruments of securities. Foreign exchange business. Financing of seasonal crops like cotton, wheat & rice. Receiving of bonds, valuables etc for save custody. On behalf of client, including govt. and local authorities. Generating, undertaking and promoting etc of issue of shares, bonds. Transacting guarantees and indemnity business. Undertaking and executing trusts. Making investments in other banking companies. Joint ventures with foreign dealers, agents and companies for its representation abroad. Participating World Bank and Asian development banks lines of credit. Utility services Providing Hajj services to intending Hajjis Agent to State Bank of Pakistan for collecting. Gold finances.

19

Internship Report on NBP

MAJOR OPERATIONS OF NBP Deposit Department

To receive deposits is a basic function of all commercial banks. Commercial banks do not receive these deposits for save keeping purpose only. But they accept deposits as debts. When a bank receives deposit from a customer, it becomes the creditor and a bank a debtor. After receiving a deposit, the bank becomes the owner of it. It may, therefore, use it as it deems appropriate. But there is an implicit agreement that the amount owned would be paid back by the bank to depositor on demand or after a specified time. Deposits are the lifeblood of the bank and their classification is based on the duration and purpose for which the deposits are to be kept at the bank before the depositors can withdraw them. At present NBP accepts deposits in both local and foreign currency and provides a variety of accounts according to the desire of the customer.

Local Currency Deposits In local currency the following accounts are available at the bank. Current Accounts Profit and Loss/Saving Account Short term Deposits Fixed Deposit Receipts

Current Account The accounts are opened with the minimum limit of Rs.5000/- No interest is allowed by the bank. The funds held in the account are payable on demand without any restrictions on withdrawal. The bank normally opens current account for business need of the firms. In this, following types of accounts are opened. a) Private or Public limited company b) Societies/Club/Association c) Proprietorship 20

Internship Report on NBP d) Partnership

Profit and Loss/Saving Account These accounts are opened with not less than Rs.5000/- if at any time the sum does not fall below this amount the account will not qualify for sharing in profit nor shall it be liable for loss, if any. There is no restriction on the maximum amount. The account will be credited/debited with the amount of profit/loss worked out at the rate determined by the bank on the basis of its networking results at the end of each half year. These will be only checking accounts, withdrawal will be allowed not often than 8 times in a calendar month and more than one PLS account in the same name.

National Income Daily Account (NIDA) The scheme was launched in December 1995 to attract corporate customers. It is a current A/c scheme and is a part of the profit and loss system in operation throughout the country. Minimum Deposit Rs. 2 million is needed to open the account with no maximum limit Profit Paid on a half-yearly basis on a monthly average balance. The rates of profit vary according to the slab of deposit. Profit rate Conditions Deposit of Rs. 2 to 2000 the rate fluctuates from 1.4 to 1.75 There is no limit of withdrawal

Fixed Deposit In this type of accounts, a certain amount is deposited for a certain period such as six months, two years or longer. A fix deposit receipt is issued in the name of the depositor. The officer incharge and the bank manger sign the receipt. A notice is given to the depositor on a prescribed form 2 weeks before the FDR falls due, requesting him to withdraw his money or to review his deposits. The interest allowed varies with the period. Short Term Deposits 21

Internship Report on NBP Application for short-term deposit is taken on form F-486 and the amount on the form F-88. NBP now offers excellent rates of profit on all its short-term investment accounts advised by the head office from time to time and laid down in section XII of supplement No.1. 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. Call Deposits Branch may accept call deposit from local bank or from other on such rates on interest as may be prescribed by the head office from time to time through controlling office. These deposits will be credited to call deposit account in favour of government and semi-government department should also be credited to call deposit account.

Accounts Department
The main function of the accounts department of National Bank of Pakistan is to maintain general ledger accounts and after the business hours the function of the accounts officer is to close books. General Ledger It is the prime record of the branch reflecting its assets and liabilities and serves as the master control of accounting system of the branch. It consists of only those accounts, which are authorized by the head office. Voucher System Voucher is a written authorization used in approving a transaction for recording and payment. It is a system, which is generally designed to provide strong internal control over the transaction, which takes place in any department of the bank. One debit and one credit voucher is prepared. At the end of the day, these vouchers are collected and recorded.

Debit voucher 22

Internship Report on NBP Debit voucher is used in two cases: Whenever any expense is incurred When a depositor withdraws some amount form his/her account

Debit voucher contains

Name of Branch Date Branch Code Account No Transaction Code Amount and other details (Narration)
Credit voucher Credit voucher is used in two cases:

When a depositor deposit any amount in his account Any income received by the bank e.g. bank draft
Expense voucher It includes: Salaries given to all employees of the bank Wages Rent Lease Installments Insurance -Vehicle Insurance - Cash Utility Bills Medical Allowances Cash Carrying Charges

23

Internship Report on NBP

Salary Structure Bonuses are credited after every 6 months i.e. June and December. These are 1st and 2nd profit bonuses and are equal to one months basic salary. Allowances includes house allowance, transport allowance and utility allowance Provident Fund is provided to each employee on his/her retirement. Contribution by employer and employee is 8.3%. Preparation of Statements Weekly Statements are sent at first to National Bank of Pakistan head office Karachi Monthly Statements are sent at first to National Bank of Pakistan head office Karachi and then these are sent to head office affairs in consolidation form. All vouchers and statements are signed and approved by manager accounts or who has authority to sign on behalf of the bank and whose signatures appears in one of the banks book of specimen signature or a person who has authority to sign internal vouchers and records extent of its authority will be made by the country manager. Daily Activity Report includes the details of the following: Loan Transactions General Ledger Transactions Fixed Deposits Transactions

Account Opening Types of Accounts Current Account Saving Account/profit and loss account Fixed Account 24

Internship Report on NBP Short Term Deposits Fixed Deposit Receipts

Following Persons can open an account Sole proprietor Partnership Company Joint Stock Company Club, Society, Trust & Association Agent on behalf of principal Executers and Administrators

Following information is required Name of applicant Type of account to be opened Nature of Account Address Telephone CNIC No NTN No if available Operating Instruction Currency of accounts Nature of business Residential status Special instructions regarding the account General information about Introducer Signature of the applicant Signature of introducer

Documents To Be Attached 25

Internship Report on NBP Documents required to be attached are different for different categories. Sole Proprietors Account Attested photocopy of CNIC They have to submit their business registration certificate number. In case of salaried person attested copy of his service card or any other acceptable evidence of service, including, but not limited to a certificate from the employer In case of illiterate person a passport size photograph of a new account holder besides taking his/her left to right thumb impression on the specimen signature card. Company Accounts

Attested Photocopy of CNIC of all partners Certified copy of partnership deed duly signed by all partners of the firm Attested copy of Registration Certificate with registrars of firms.

In case the partnership is unregistered, this fact should be clearly mentioned on the Account opening form Authority letter, in original, in favour of the person authorized to operated the account of the firm Join Stock Companies Accounts If someone wants to open join account the following information is needed Certified copies of

Resolution of Board of Directors for opening of accounts specifying the person(s) authorized to operate the company account MOA AOA Certificate of incorporation Certificate of commencement of business Attested copies of CNIC of all Directors List of directors on form 29 issued by the registrar of joint stock company 26

Internship Report on NBP

Societies/club and association accounts 1. Certificate of Registration 2. By-laws/rules and registrations

Resolution of governing body/Executive committee for opening of account authorizing a person(s) to operate an account and attested copy of CNIC of the authorized person(s). An undertaking signed by all the authorized persons on behalf of the institution mentioning that when any change take place in the persons authorized to operate a account, the bank will be informed immediately

Trust account Attested copy of certificate of registration Attested copy of CNIC of all trustees Certified copy of instrument of trust

Agent Account Certified copy of power of attorney Attested copy of CNIC of the agent

Executers and Administrators Attested copy of CNIC of all executers or administrators Certified copy of letter of administration

Other formalities The majority of the new customers are introduced by an existing customer or by bank staff. Bank has a right not to open an account without assigning any reason or to close the account, if it is to operate in a satisfactory manner by the head office instructions.

27

Internship Report on NBP

I.T. Department
In computer section data regarding all nature of transactions of any department is recorded under the following related head

Vouchers Remittances NBP general Account Clearing account DTR (Daily Transaction Report) Utilities Ledger

At the start of the day, the previous day balance is closed and the working of next day is started. At the end of the day, the whole day recorded transactions are transferred to the computer section to update the accounts

Western Union Money Department

The transfer and payment of money from foreign countries is also dealt with under this section. The customer is required to fill a form having such information as name, address, code, the address of person by whom the amount is transferred. The 10-digit code given by the customer is verified from an online program money transfer.

Remittance Department
Remittance is the monetary transfer from one place to another place or from one country to another country to fulfill the requirements of the customers by the order of the customer. Remittance department here consists of two major sections: Local Remittance Foreign Remittance

Local Remittance Local remittance is the monetary transfer from one place to another within the country.

28

Internship Report on NBP

Outward Bills for Collection Outward Bills are those bills which are sent for the realization purpose to other branches then your own. 1. Clean bill These are negotiable instruments drawn on outstation branches of the bank, send for collection on behalf of customer i.e. checques, drafts etc.

2. Documentary bills These are the bills accompanied by documents such as TR, Bills of lading etc. having title, collected on behalf of their customers. If payment is made other than checques then this mode is used. It is an arrangement between two parties. Bank plays role as an agent. Documentation is properly drawn between two parties but in 99% cases clean bills are used.

Inward Bills for Collection These are the bills, which are received locally. They are received from out station branches of the bank and parties drawn on recipient banker or other bank or parties. The main document invited in clearing and remittance department are as follows:

1. Demand draft Demand draft is an instrument, which is drawn by one branch of the same bank. If any person wants to make payment from one city to another city there he can make payment through demand draft. Bank charges a commission for performing this kind of service according to bank rate schedule, which is revised after six months. Demand draft may be issued or paid.

2. Mail transfer (MT) Bank to bank remittance are transfer through mail. Mail transfer advice is paid against cash receipt, checques and letter of instrument. MT advised is prepared and test no. is 29

Internship Report on NBP written on this MT advice. The advice is given to the dispatch department for onward transmission.

3. Telegraphic transfer (T.T) It is bank-to-bank transaction: the issuing bank makes payment on payment order. The beneficiary is not directly involved in it. Two other modes of these transactions are: Telephonic transfer Fax

It is a coded massage by one bank to another bank. Each bank has its own code number. First they write the message in the code form and after this they apply its test number on it. The bank can issue two types of instructions. Advance in pay Advance in credit

4. Payment Order Payment order is negotiable instrument make by the bank on the request of the account holder to give surety to the beneficiary when ever it is present for payment; bank has to pay the written amount on the face of the instrument. The other characteristics of the payment order are that it is use to pay with in the city in which it is made. Secondly payee branch and the drawee branch is the same. Thirdly payment order can never be bounced. Parties involved in Remittances Remitter/ordering customer: An individual or a company sending funds Institution: Remitting institution/Bank Beneficiary: Party at the receiving end who is going to withdraw funds from their account either in Pak rupees any of the above mentioned currencies.

30

Internship Report on NBP

Foreign Remittance Foreign remittance is the monetary transfer from one country to the other. The foreign exchange and western union money department handles the transaction made in the foreign remittance.

Clearing Department
This department deals with the transactions related to the other bank. The State Bank of Pakistan acts as a clearing agent for the commercial banks. It deals with the checques of any other branch of other bank. If more than one checque is attached with slip then the entry is to be done one by one. The checque number, date on the checque and the name of the branch of the bank on which the checque is drawn is entered. When the clearing has been prepared then the next step is to stamp the checques and slips with clearing stamp on front of the checque and slip and NBP General Account on the back. After this clearing is to be passed to the incharge officer who signs on it. Amount is transferred to the customer account after 3-4 days. Checques and slips are to be stamped carefully because sometimes clearing has been returned due to the reason of not properly stamped or any other.

Types of Checque Collected Transfer Checques Transfer checques are those checques which are collected and paid by two different branches of the same bank situated in the same city. Clearing Checques Clearing Checques are those checques which are drawn on the branches of some other bank of the same city or of the same area which covers a particular clearing house. Collection Checques Collection Checques are those checques which are drawn on the branches of either the same bank or of another bank, but branches are not in the same city or they are not the members of clearing house. 31

Internship Report on NBP

Foreign Exchange Department

Foreign exchange department plays a vital role in the international trade of any country. By realizing so, NBP has also concentrated and improved well its foreign exchange operation as for the efficiency of its employees and customers' satisfaction is concerned. Foreign Exchange department at NBP consists of these sections namely: Import Section/Export Section Foreign Exchange Remittance Section Foreign Currency Account Section

Pension Department
National Bank of Pakistan also deals with the payment of pensions to government employees at the end of the month till the 5th of next month. Pensions are dealt under 3 types i.e.,

Central pension Defense pension Provincial pension

The pensioners collect their pensions under their given PPO number (pension payment order number). In case of family pension, the family members of retired employee collect the pension.

Billing Department
In billing section, bills are collected from general public through checque and by cash. All utility bills of following organizations are collected: LESCO WASA PTCL SUI GAS PTCL SECURITY 32

Internship Report on NBP Further collections are: Property tax Challan Income tax

Locker Facility
National Bank of Pakistan provides locker facility. Locker provides the safe custody of documents and valuables. The person who wants to obtain locker, he/she has to maintain an account in that branch. For opening the locker, locker opening form is filled in by the customer. Then the customer has to deposit the amount of security and the rent of the locker also. After meeting all these formalities, a locker number is issued to the customer. A duplicate key of the locker is given to the customer to operate a locker. On every operation of account, an entry will be passed in register in which his/her signature, date, locker no and the time of operating the locker will be recorded. The locker may be small, medium and large.

Cash Department
In this department receipts and payments of cash are done. The cash payment is made to 1. Pensioners 2. Salaried persons 3. General withdrawals by account holders 4. Western money 5. Counter payments (if any) Cash is received through: 1. Cash deposits by account holders 2. Locker security and rent 3. Bills collection 33

Internship Report on NBP

Books Maintained in Cash Department Receiving Cashier Books Token Book Paying Cashier Book Scroll Books

When cash is received in counter, it is entered in the Scroll Book and Receiving Cashier Book. At the close of the day, these are balanced with each other. When the checque or any negotiable instrument is presented at counter for payment, it is entered in the Token Book and Token is issued to the customer. The Token and the cashier make entry in the Payment Book and the payment is made to payee. At the close of the day, the Token Book and paying Cashier Book is balanced. The consolidated figure of receipt and payment of cash is entered in the Balance Book and drawn closing balance of cash. This is very important department because cash is the most liquid asset and mostly frauds are made in this department, therefore, extra care is taken in this department and no body is allowed to enter or leave the area freely. Mostly, cash area is grilled and its door is under the supervision of head of that department. Officer checks the books maintained in this department.

Advances and Credit Department

Advances are the major source of earning income for commercial banks, it is interest charged on the money lend to the customer. Bank advances to customers are made either by way of loan or by overdraft on current account. At present NBP provides both long term as well as short-term loans.

34

Internship Report on NBP Types of Advances Following type of Advances are provided by NBP Running Finance/Overdrafts Cash credit Small Loan Finance Against Bills Demand Finance (Ordinary Loan) Loan against Gold Agricultural Finance NBP Saibaan Home Finance

NBP Advance Salary Running Finance/Overdrafts When the banker permits his customer to overdraft upon his current a/c up to a certain limit, it is called overdraft facility provided by the bank. The customer is charged with the interest for the amount he has actually overdrawn from the bank. The customer is free to take the overdraft facility up to the limit whenever he needs and he can at any time return back the advance to the bank by depositing the amount with the bank. There are two types of overdrafts: i. Unsecured overdraft

Under such type of overdraft the bank rely upon the personal security of the customer or customers mentioned on the customers a/c. ii. Secured overdraft

Under this type of overdraft the bank allows his customer to withdraw more than his deposits after giving security against the amount overdrawn.

Cash credit Here, cash credit a/c is opened in the name of customer to borrow from the bank. Customer is granted a loan up to a certain limit which is sanctioned by the head 35

Internship Report on NBP office, which he draw when he requires interest is charged on the amount actually utilized by the customer. In order to avoid the danger of idle funds, the bank charges a certain rate of interest, even if the customer does not withdraw any amount. The credit is usually given against the securities of goods or merchandise as follows:

1. Bankers Lien (Moveable property possessed to the lender cannot be sold in case of default) Lien is the bankers right to hold the property until the claim on the property is paid. The bankers look at their lien as a protection against loss on loan or overdraft or any other credit facility. In ordinary lien, the borrower remains the owner of 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 (Immoveable property possessed to the borrower can be sold in case of default) 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 36

Internship Report on NBP hypothecated. 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 usually provides for a bankers charge on the hypothecated goods. 5. Pledge (Moveable property possessed to the lender can be sold in case of default) In a pledge, the ownership remains with pledger (borrower), but the pledgee has the possession of property until the advance is repaid in full. While in case of default, the pledgee has the right of sale after giving due notice.

37

Internship Report on NBP

INTERNSHIP

ACTIVITIES

I completed my internship at National Bank of Pakistan, ACP Model Corporate Branch Shadman, Lahore (1442). In the period of 6 weeks, I tried my best to gain a practical exposure and an experience to plan, develop, present and report and to seek a challenging career oriented position in the field of general banking by using the potential of hard work and professional skills. I worked in operation department and I spend three weeks working on the NBP data base known as CIF (Customer Information Folio). I discussed some detail of departments related to my practical experience.

FIRST WEEK
I spent my first week under the supervision of Mr. Muhammad Akram (AVP) who is in charge of Remittance department and also handles the operation of, Lockers.

REMITTANCE DEPARTMENT
In this section I was assigned to learn the procedure that how we can transfer the money within the country by using different modes of payments, which are following

Modes of payment
Following are the modes of payments for local remittance: Telegraphic transfer Pay order Mail transfer Demand draft

Telegraphic Transfer T.T is a mode of payment through which money is transferred within the country , means any city of the country money can be transfer through the T.T. In order to made payment through the T.T message is received from the sending bank issuing the 38

Internship Report on NBP T.T to the receiving the Bank. Only the authorized personal can issue and receive the T.T. for this a phone call is made or received with both the authorized personal on the either side of it. It is useful in the places where the facility of online transfer is not possible as it is faster than mail transfer. Mail transfer usually takes more than one day to transfer money while in the case of T.T. it is done within the space of few hour. Mail transfer Payment from one account to another through mail is mail transfer. For a Mail transfer the charges NBP take are Postage = 75, Commission = 50 and FED 10% (until 1st of July 2009, Now the FED amount is increased to 16%) of the amount of commission. These charges are applied if the amount is less then Rs 50000. Otherwise the charges are different. Mail Transfer can only be done when money is transfer from one branch of NBP to another. Mail transfer is not used to transfer money to any other bank branch. Procedure Receiving of mail Test verification There must be signature of two officers Test will be apply if the amount is more than Rs. 5000 and no test is required if the amount is less than Rs. 5000. Mail transfer is transfer by post.

Demand Draft Payment through draft, DD is draft payable. Mostly businesspersons use DD in their business dealings. If a person wants to make a DD against some part he is charged Rs 50 for it and he is needed to bring the photocopy of his NIC with him. Procedure Advice will receive. Then after receiving draft amount will be made to relevant account. 39

Internship Report on NBP If the draft of advice is not received by the bank then the bank request to sent the draft. Sometimes bank makes payment without receiving drafts of DD for some trustable parties by issuing x-advice. Non-payment certificate If draft steals / destroy in any case party can write letter in the name of bank to reissue the draft. Bank will give a stamp paper promise to stop the double payment. Types of DD Transfer draft Cash draft Clearing draft

Payment for D.D will be rejected if requirements are not fulfilled. Stamps Clearing stamp Verification stamp Paid stamp (stamp to insure that payment has been made)

Draft should be clear on the date of receiving of D.D.

LOCKER OPERATION
I also experienced the Locker operations. NBP offers 4 different type of lockers facility to its customer. They are Small Medium Large Extra Large

40

Internship Report on NBP In the branch where I have worked only three types of locker facility was available. The bank Charges a certain amount for the facility of the Lockers. The charges are as followed, For Small Lockers the charges are 2400 Rs Per year plus FED. For Medium Size Lockers the charges are 5000 Rs. yearly Plus FED, For the Large Size Lockers the charges are 10000 Rs. yearly plus FED.

SECOND WEEK
I spent my Second week under the supervision of Mr.Younis who is in charge of Clearing department and also handles the Pension of the retired Govt. Employees.

CLEARING DEPARTMENT
Clearing is the term used when one person wishes to submit the amount of a checque which was not issued by the same branch. The Clearing can be divided into two categories: Inward Clearing Outward Clearing

Inward Clearing
In inward clearing the checques are received from the other banks which are sent for the clearing purpose by them. Checque is than checked and if it does not fulfill the criteria it is returned. Reasons of Returning Clearing Checques The following can be the reasons for returning a checque: 1) Effects not yet clear: please present again. 2) Not arrange for. 3) Payees endorsement required. 4) Clearing Stamp is missing 5) Date of clearing stamp is inacurate 6) Payees endorsement irregular. 41

Internship Report on NBP 7) Drawer's signature differs. 8) Payees endorsement requires bank's guarantee. 9) Checque is post-dated. 10) Checque is out of date. 11) Amount in words and figure differs. 12) Payment stops by the drawer. 13) Payees separate discharge to the bank required. 14) Payees discharge on revenue stamps requires. 15) Not drawn on us. 16) Account close.

Outward Clearing
Outward clearing means the checque which were received by the bank for clearing and then sent for the clearing purpose. There are three different categories of outward clearing: Same Day Clearing Inter City Clearing Clearing

Same Day Clearing Normally the Checque takes a couple of days to get cleared for they are sent to their respective branches and where it is checked whether the person who has issued the checque got enough balance in his/her account to pay for it and then that amount is deducted from his account. In same Day clearing the checque are sent for clearing on the very same day. These checques are usually of very big Amounts and needed to be adjusted in the accounts of the parties right away. National Bank charges a fix amount of Rs 150 for the same day clearing checques. The same day clearing checques are only received till the first 20 to 30 minutes from the opening of the bank. Then those checque are taken away by the NIFT personal which handles the clearing among the banks. And the report of the same day clearing checque receiving is received later in the day. Same day clearing stamp is put on the checque apart from crossing and clearing stamp.

42

Internship Report on NBP Inter City Clearing The checques which are received for clearing and are not from the same city goes to the inter city clearing. It is also known as the short term credit dispatch. The NBP charges commission for clearing of intercity checques. The charges are as follow if the checque is amount of 25 thousand or less then the charges will be Rs 50 commission, Rs 50 NIFT post charges and 16% FED. If the amount is more than 25 thousands then if the checque which is sent for clearing is of NBP than the charges will be 0.15% of the amount of the checque and if the checque is other then NBP than the charges will be 0.20% of the amount of the checque. Intercity clearing stamp is put on the checque as well as endorsement and clearing stamp. However in case of Govt A/C no commission or FED is deducted from the intercity clearing checques only processing fee of Rs. 50 is deducted from their account. Clearing Register The checque which are sent of the same city and dont need same day clearing are send for normal clearing. These checques are received from the customer as they deposit it with a bank deposit slip of red colour. Bank received all the checques see if all the information is filled is correct and then send it for the clearing through NIFT. No charges are deducted against normal clearing. The checques which are returned due to some error are returned to the person who deposited it for the clearing with the reason being stated for non-payment with it. Clearing checques are only received from Start of the bank till lunch break after that all the checque are gathered Clearing Stump of the next day is posted on them and endorsement stamp is being put on the back of the checque and also the stamp of the bank after this all the checque are given to the NIFT personal who takes it for the clearing.

THIRD WEEK
I spent my Third week under the supervision of Mr. Qaiser who is in charge of Accounts department and also handles the Payment order.

ACCOUNTS DEPARTMENT
43

Internship Report on NBP In the accounts department I learned how to open an account. The procedure for opening an account is as follow.

Procedure of opening an Account

The all types of accounts have same opening procedure.

Step I First I gave the account opening form to a new customer who was willing to open an account in this branch. Step II I briefly explained the required information and required documents to be attached with this form. One of which include NADRA verification of the person ID. If the account is a salaried account then the information of the Govt department where he works and also his employee card. And a copy of a utility bill of his residence. Step III After the submission of form and required documents, I marked the account number allotted to new account holder. Step IV Then the head of accounts department signs on it after confirming all conditions. Then I took signature of new account holder on SSC (specimen signature card). Manager of the bank also signs on the form. Step V After this, I entered his/her name against the allotted account number.

Procedure of closing an Account

The customer can also close an account. The customer is required to submit an application for closing an account. Then the account is closed out and his/her balance 44

Internship Report on NBP is paid to him. Checque book is returned back to the bank and the officer cancels the remaining checques in the checque book.

Accounts not in use

Inoperative Accounts

Accounts which are not in use for 1 year are considered as inoperative accounts Dormant Accounts

Accounts which are not in use for 6 months are considered as dormant accounts

Issuance of Checque Book

After opening the account bank sent a letter of thanks to account holder, at his home address within 7 days of application form, for the confirmation of address .When the customer receives the letter of thanks he comes to the bank with the letter for the purpose of receiving checque book. Issuance of Checque Book to Account Holder A. After receiving the letter of thanks bank provides a slip to the customer. The customer is required to fill slip with his/her account number, checque book leaves and the signature. The passing officer verifies the signature of the account holder and checque book is issued to the account holder after keeping the record in checque book register. This is the procedure of issuing checque book at first time. The first checque book is issued to account holder only. B. The checque book carries a requesting slip for the issuance of new checque book. The account holder duly signs the slip; bank verifies the signature and checque book is issued to the account holder .The checque book now is also entered in slip. The Account No., against which checque book is issued, the checque book number, name of the account holder, date of issuance is also recorded in checque book register and the signature of account holder will be taken on it. 45

Internship Report on NBP Issuance of checque book to 3rd person In case, if account holder sends a third person to get his checque book then the procedure is as follows. An authority letter is given to the third party by the accountholder. The accountholder verifies the signature of the 3rd person on that authority letter. The bank officer enters the signature of that third person to confirm whether he is the same, that account holder has sent for the purpose of checque book collection. After verification, bank issues the new checque book and the bank keeps authority letter.

PAY ORDER
Pay order is also a mode of payment but in this mode payment can only be made within the city from one party to another. Payment is made in the form of: 1. Clearing Payment from one bank to another is payment through clearing. 2. Cash payment If the party has no bank account then payment can be made in the form of cash. In this case amount will be paid to the party after verification of any officer of that branch. 3. Through transfer Transfer of money by pay order from one party to another and if the party has account in the same branch from where pay order is issued and other party has also account in this branch then amount from one party account will be transferred to another party to whom payment has been made.

Procedure Of Payment Through Pay Order

Application form 46

Internship Report on NBP If you want to pay money in cash through pay order then on the back side of the application form you required to give your name, address and in case of if you are account holder then give your account no also. Plus the information regarding the receiving party is also need to be provided and the Pay order is issued in the favor of that party. Charges to pay through pay order Student Account holder = = RS.25 fix rate RS.50 RS.100

Non account holder =

No charges are required to pay in case of employee of the bank. All charges will be paid in cash department. Rejection of pay order There are three types of stamps that should be on the pay order these are: Clearing stamp Crossing stamp Bank endorsement stamp

These stamps should be on the pay order with the signature of the officer otherwise this pay order can be rejected. Some important things about pay order 1. Bank cannot reject to make payment for pay order it can be present at any time for any price by the party. 2. If pay order is not present by the party before three years then the amount of this one will be transfer to unclaimed account. 3. After 10 years the amount will be transferred to Head office of the bank. 4. After that procedure to get the payment will be lengthy for the party but still the bank can not refuse to make payment of that pay order. 5. Second endorsement is allowed in pay order. 47

Internship Report on NBP 6. Pay order can be cancel by the party and after that the party will pay charges for cancellation that is RS.100.

Duplication of the pay order In case of stale, destroy, etc. of pay order duplication for that can be issue but payment will be made against the presentation of second one only. In order to get duplication of the pay order party must report to the bank. Signature of officers is must at the time of issue and presentation of the pay order. After presentation of the pay order it cannot be reject. It is a secure mode of payment because of bank involvement and it becomes instrument of a bank so bank will be responsible for that. Outside Payment can also be made through pay order.

FOURTH WEEK
I spent my Fourth week under the supervision of Mr. Ilyas who is in charge of Deposit department.

DEPOSIT DEPARTMENT
How to Cash a Checque?
I received the checques from the customers who want to withdraw the amount first I checked the checque for the following: 1) The checque should be of our branch. 2) The checque should not be post dated checque. 3) The amount in figures. 4) The amount in numbers. 5) There should not be any partial cutting and in case of cutting checque must be signed again by account holder. 6) Check whether the checque is barrier or if it is cutted double i.e. a double line on the side of the checque, this means that it is payer account only. It is not paid on the counter and it is only transferred from one account to another. 48

Internship Report on NBP 7) The checque must be double signed at the back by the person bearing the checque. 8) A token number is written on the checque along with posted, signature verified and pay cash stamps and the checque is given to the officer for posting in the ledger. After this I entered the checque for cash payment in the software EBS runs in the NBP. It requires the Following information. 1) The code for account type 2) The checque number 3) The account Number 4) The amount needed to be drawn After entering the following information I put the stamp of posted on the checque and then the checque is given for checking i.e. the signature verification and all the things are again verified by the joined custodian and the checque is given to the cashier for payment after recorded in the cash scroll. The cashier checks the checque again and makes payment after writing the checque number in the cash scroll maintained by the cashier.

How to Deposit the Cash?

If the customer wants to deposit amount in form of cash, then he is required to fill blue slip, in which the customer's Account No and amount of cash is mentioned. This slip is given to cashier with the pre mentioned amount.

How to Deposit the Checques?

If the customer wants to deposit checques then he is required to fill pink slip .The Account No, name of the account holder and checque number will be mentioned on it. This slip will be attached with the checque .If the checque is of the same branch then similar transfer entry will be passed, but if the checque is drawn on other banks or on other branches of national bank then checque will be sent for clearing. In case if the checque is not cleared by that bank or branch it is returned unpaid with an objection memo.

49

Internship Report on NBP

RECEIVING THE SALES AND INCOME TAX

I also worked on the receiving of the sales and income tax during my work experience. The Customer was to bring the payment slip for the income or sales tax with him containing their payment slip id, the name of the individual or the company and also the amount to be paid for the tax. First the customer is advised to pay the amount of the tax to the cashier, after paying the amount to the cashier the customer bring back the payment slip with cashier signs on it proving that payment is being collected. Then the payment id is entered in the FBR website which is used for e payments of the taxes once the payment id is entered it shows the information regarding the individual/company submitting the tax. The Name and amount is than verified with the payment slip the customer brought. After that amount is entered in the receiving field of the software and then confirmed it. And after that print outs are being taken for the payment being made of the tax and one copy of it is given to the customer with the signature and stamp of the cashier. If the person is willing to submit his tax with a checque then the checque is submitted with the pink slip for the clearing. And once it gets back from clearing the payment of the tax is being confirmed on the FBR website.

FIFTH AND SIXTH WEEK

After working for a month one day Operation Manager asked me that he is forming a team and he wanted that team to work on the CIF (Customer information Folio). With my two other team members help I started to work on the CIF.

CIF (Customer Information Folio)

CIF (Customer Information Folio) is a database which contains the information of all the account holders of the bank. My responsibility was to first to find the problems existing in the CIF, after finding the problems report them to the Regional Head office and try to eliminate as much issue as possible which was presented in the CIF Audit report. 50

Internship Report on NBP After careful observation and analysis and with the help of my team members we were able to find the following problems with the software: The Information about introductory account was being made mandatory by the software while the introductory account information was not mandatory few decades back or now. Which made it impossible to keep the data base accurate. The information about Mothers NIC was made compulsory while there are many accounts about whom mother information was not given or their mother never had a CNIC. The objection was made that Job title of the account holder was not given while the software only allow you to furnish job title information of those account which are salaried and government account. Apart from that Job title information is not allowed to be presented. All the accounts showed that there is a minimum balance of Rs. 5000 in every account, while that information was being made default in the software and couldnt be changed. In case of commercial or corporate company account the information regarding NTN number and their incorporation and commencement date was made mandatory while such information was not available to the bank. Some accounts which were closed and deleted were still shown in the CIF

After this I worked on the CIF and tried to update the accounts information as much as possible. The information in the database was not complete as the information about the next of kin was not given in most of the account. All the account holders were mentioned as illiterate in the database, the information about occupation of the account holder was not presented in many cases. So with the help of the account opening forms I tried to update the database to the fullest however certain aspects were still left un attended. As there were accounts dated year 1974 or older they didnt have any particular information rather than the account holder name and their occupation. In such cases the information about the Next of kin was left unattended. The head office made the introductory account information not mandatory so in order to keep the accounts working the information about an office account was given in the 51

Internship Report on NBP introductory account information. All the Current Account had the profit applicable yes. It was changed and all the current account were made profit not applicable.

MANAGERS MANAGEMENT STYLE

I was lucky enough to work under the management of Mr. Nawazish Ali Kazmi. He is the Operations Manager of the ACP Corporate Model Branch, Shadman, Lahore. It was a complete learning experience for me as I get to learn so much about banking. During my stay there I never felt any sort of strain or stress rather I enjoyed my every minute in the bank premises. All the employees have pleasant personalities and they all treated in such a way like they are educating their own child. Everyone was willing to share their knowledge and experience as a National Bank employee. I didnt see any pressure made by the manager on any of the bank employees. Everyone knew what they were suppose to do and they fulfill their duties efficiently and effectively. During my internship the Closing of the year date arrived when bank closed all of their books and the statement is prepared showing overall growth made by the bank. But even in that moment I didnt see any employee panicking or feeling stress rather everyone did their part of the work calmly and made the information complete on time. The formalization of the bank is very high basically because a bank is a very sensitive financial institution, which deals with money and highly liquid instruments. Without written documentation of procedures, job descriptions, regulations and policy manuals it is very hard to survive. The way all branches run similarly of NBP is a proof of high standardization. All the branches have pre-defined routines and the environment of all the branches is almost the same. The level of specialization differs according to the designation of employee. The specialization (division of labour) is extensive in most cases since everyone is trained to perform a narrow range of tasks in their jobs. As the hierarchy goes upwards, the division of labour becomes more extensive since the duties become more specific. NIB is highly centralized as normally banks are. All decision-making is done at the top level. All the branches are linked to the head office in Karachi, which causes some problems also. Even for the approval of minor things e.g. generator, petty cash fund replenishment the BOM has to contact the head office. 52

Internship Report on NBP

APPLICATION OF THE THINGS LEARNED IN MBIT

Doing MBIT was beneficial for me as only because of this I was able to complete my task of analyzing the CIF(Customer information Folio) a database maintained by the NBP to keep record of its customer. And as I have the basic understanding of the IT I was able to understand how the software works also it helped me in preparing daily same day clearing register and clearing register for which I have to use the software such as Microsoft Excel.

NEW THINGS LEARNED

The experience of working in the bank was real good. It was my first time working and I have no particular knowledge of the banking sector before this. So it was like a sea of knowledge and I was just getting absorbed in it. I tried to learn as much as I could in my short stay there. Banking is such a big branch that it would take ones lifetime to learn all of its aspects. But I was lucky enough to learn as much as to have basic and general understanding of the banking operations. I benefited a lot from my internship. Importance of the bank cannot be denied no matter where you are working. And basic knowledge of the working of the banks must be possessed by todays graduate. It also gave me a hand on experience of how professional life Is different from the real life, how one has to maintain the job responsibilities and how to react under the stressful situations. In the bank I had direct encounter with the customer, I realized that once you are on the job you get to meet all kind of people, and its not easy to delight a customer and one has to be very cautious when dealing with a customer in order to avoid dissatisfaction to the customer while also following the rule of the organization. And I believe I made a right choice when joining a bank for my internship program as this will help me in the future.

53

Internship Report on NBP

CONCLUSION
By analyzing the overall performance I can say that bank has improved its working and is expected that the profitability of the bank will be improved in the future year, as it has financed many projects in the country. On the best profit on capital scale, National Bank of Pakistan has been rated as the highest in Asia and the 8 th in the world. The year in review saw that National Bank of Pakistan post the highest ever profit for Pakistans financial sector. This can be attributed to the successful strategic and operational repositioning of the bank.

At branch level, the experience of the staff is good but there is a gap to reach at the highest level of banking functionalities. The attitude and atmosphere of the branch is not so good that impresses and innovate the client to come and get the opportunities given by the bank. The teaching attitude of the branch expresses the mal-experience and difficult to convey properly and it is not wrong to say that it is unable to convey.

As a whole, I learnt a lot of things regarding general banking in the practical field which is beneficial for the future.

54

Internship Report on NBP

RECOMMENDATIONS

RECOMMENDATIONS FOR THE ORGANIZATION

The global economic environment has changed creating challenges and opportunities for the world's policy makers. The privatization drive has emerged as a strong tool of transformation which is being recognized as an essential ingredient for the economic well being of the countries themselves and for the rest of the world. Now there is a great awareness that in an interdependent world all countries gain individually if these countries become positive contributor to the world economic growth as a whole. Banks are playing very important role in the growth of the countries. NBP no doubt is a positive contributor in this respect but i think there are certain points by adopting which it can serve more effectively and efficiently. These points are as under: Proper Planning: Bank should make a plan to gear up its recovery efforts on war footing and reorganize the recovery function of global bases. In addition, bank should tighten up control on expenditure. Adoption of Advertising: Bank should launch advertising campaigns through out the year to promote the habits of savings in the people. New Talent: The bank should bring forward the new talent as fresh knowledge and education is considered very important ton increase the efficiency and production. Competition: There is needed to make outlook situations of branches in that manner that can compete the other modern banks in the banking sector. Information: Separate desk or counter should be established in every branch to provide the information as required by the clients. Courses: Refresher courses are important for staff in any international organization. All the employees should be given up-to-date courses in order to cope with the changing dynamics of the modern banking sector. Management: In the last days of bills, people have to wait for longer hours so for these days there should be proper management of staff.

55

Internship Report on NBP

RECOMMENDATIONS FOR THE IBIT

Here are some recommendations and suggestions for IBIT for improvement of its graduates and to provide better quality education. IBIT is facing major problem regarding teachers. There should be qualified and experienced permanent faculty members because an institute can not run without having good faculty. There are only four courses offered to MBIT students in specialization so these must be increased. IBIT should place its graduates in organizations for internship because students face great difficulty and a proper reference to be placed in a good organization and thats why there time is also wasted. Institute should organize seminars and invite different organizations in annual dinners to give knowledge about MBIT degree because most of the time our CV is rejected in banks by considering it only an IT degree. MBIT students should be offered internship during their studies because after working in a practical environment you can better understand your courses and their implementation.

56

Internship Report on NBP

REFERENCES
o

www.nbp.com.pk

57