Internship Report of NBP

INTERNSHIP REPORT

NATIONAL BANK OF PAKISTAN

PREPARED BY

Student Name

ID Mc0604

Semester/ Session Fall 2008

Final Report Date

University Virtual University of Pakistan

Phone #

Mailing Address Jhelum

Dedication

I dedicated my Report

To my respected instructor

ii

Acknowledgement

FIRST OF ALL I AM THANKFUL TO ALLAH & I BOW MY HEAD BEFORE

ALMIGHTY ALLAH WHO ENABLE ME TO WRITE ON THIS REPORT.

I am also thankful to my respected instructor HRMI619 whose proper guidance &

suggestions encouraged me in writing this report.

I am also grateful to the persons who provided me information & give me time for

working on this report.

I am also thankful to my parents & friends who provided me the help & suggestions

when & where needed.

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Executive summary

National Bank of Pakistan is a Govt. bank. It has its head office in Karachi. It has over

1,232 branches in Pakistan & 18 abroad.

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 National Bank of Pakistan offers a wide range of services to its customers &

recognizes the importance of efficient business delivery & providing timely solutions.

Their competitors are untied bank, Allied bank, Habib bank, First women bank, Bank

of Punjab etc.

The essence of business philosophy is to cater to the banking requirements of small &

medium sized entrepreneurs, providing them qualitative & competitive services with

emphasis on encouraging exports. Nearly forty percent of our credit portfolio is

related to export financing and credit decisions are taken within 48 hours that is why

we say: “We have more time for you”

Its products are Pay Order, Mail Transfer, Foreign Remittance, Foreign Currency

Account, Short Term Investment, NIDA * ( National Income Daily Accounts) Equity

Investment, Commercial Finance etc.

In Jhelum, Civil Lines Branch is a main branch of National Bank of Pakistan.

Branch code is 0344 & phone number is 0544-9270185, fax: 0544-9270188.

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CERTIFICATE

v

EVALUATION FORM

Table of Contents

vi

Introduction of the organization...............................................................................................1

Overview of the organization...................................................................................................3

Brief history..............................................................................................................................7

Nature of the organization...................................................................................................9

Business volume:................................................................................................................12

Product lines:......................................................................................................................29

Competitors........................................................................................................................37

ORGANIZATION STRUCTURE...................................................................................................38

Organizational hierarchy chart:..........................................................................................38

Number of employees:.......................................................................................................39

Main offices:.......................................................................................................................39

Comments on the organization structure:..........................................................................39

PLAN OF INTERNSHIP REPORT................................................................................................40

INTRODUCTION OF THE BRANCH:......................................................................................40

STARTING & ENDING DATES OF INTERNSHIP......................................................................40

TRAINING DEPARTMENTS...................................................................................................41

TRAINING PROGRAM..............................................................................................................42

INTRODUCTION OF ALL THE DEPARTMENTS......................................................................42

DETAILED DESCRIPTION OF THE DEPARTMENT I WORKED IN RELATED TO MY AREA OF SPECIALIZATION......................................................................................................................81

Structure of the HRM Department.........................................................................................82

Department hierarchy:.......................................................................................................82

Human resource management process in the organization:..............................................82

A. Human resource planning and forecasting.............................................................82

B. Employees recruitment & selection........................................................................84

C. Training & development.........................................................................................86

D. Performance management.....................................................................................89

E. Employee compensation & benefits.......................................................................91

vii

F. Organizational career management........................................................................92

G. Labor management relations..................................................................................99

CRITICAL ANALYSIS...............................................................................................................100

SWOT ANALYSIS....................................................................................................................101

CONCLUSIONS & RECOMMENDAIONS.................................................................................105

SUGGESTIONS...................................................................................................................106

REFERENCES.........................................................................................................................107

Annexes................................................................................................................................108

viii

ix

Introduction of the organization







National Bank of Pakistan intends to carry out a market study for consumer and small

business sectors including for:

(1) Auto Vendor Financing

(2) Fisheries Sector Financing

(3) Marble Industry Financing

(4) Cutlery Sector Financing

(5) Dairy Sector Financing

(6) Business Finance

(7) Auto Financing and other products.

1 of 120

President's Message

It gives me great pleasure to announce that National Bank of Pakistan is gearing up to

the challenges faced by the domestic banking industry due to innovations and

advances in the international banking world, which is the consequence of

globalization. The bank wishes to effectively utilize the financial assistance being

extended by the Government of Pakistan for banking sector reforms aimed at reducing

operating costs and improving profitability.

National Bank of Pakistan is distinct from other banks in that it has a nonprofit and

service oriented motive, which has manifested itself in the area of salary deposits of

government employees and payment of utility bills. The bank renders both of these

services across the country reaching as far as the remotest regions; from our northern

borders to the Arabian Sea. These services do not contribute towards the earnings of

the bank; rather they put pressure on our resources. Nevertheless, we are committed to

serving small savers and the general public of the country. National Bank is

everyone’s and does not only serve corporate customers. By extending and targeting

our research to improve bank earnings, through customer focus of our commercial

and corporate branches, and by enhanced efforts towards the development of human

capital, we shall very soon transform the bank from a bureaucratic organization to a

fast paced, modern, and competitive bank.

In conclusion, I firmly believe that we have the vision, which will enable us to

achieve even better results, safeguard the interest of our customers and to assist us in

our march towards progress and prosperity in future.

S.Ali Raza

Chairman & President

2

Overview of the organization









We aim to be an organization that is founded on…

• Growth through creation of sustainable relationships with our customers.

• Prudence to guide our business conduct.

• A national presence with a history of contribution to our communities.

We shall work to…

• Meet expectations through Market-based solutions and products.

• Reward entrepreneurial efforts.

• Create value for all stakeholders.

We aim to be peopling who…

• Care about relationships.

• Lead through the strength of our commitment and willingness to excel.

• Practice integrity, honesty and hard work. We believe that these are measures

of true success.

We have confidence that tomorrow we will be…

• Leaders in our industry.

• An organization maintaining the trust of stakeholders.

3

• An innovative, creative and dynamic institution responding to the changing

need

Senior Management

Masood Karim Shaikh SEVP & Group Chief, Corporate & Investment Banking

Group

Shahid Anwar Khan SEVP & Group Chief, Credit Management Group

Dr. Asif A. Brohi SEVP & Group Chief, Operations Group

Imam Bakhsh Baloch SEVP & Group Chief, Audit & Inspection Group

Ziaullah Khan SEVP & Group Chief, Compliance Group

Dr. Mirza Abrar Baig SEVP & Group Chief, Human Resources Management &

Administration Group

Amer Siddiqui SEVP & Group Chief, Commercial & Retail Banking Group

Muhammad Nusrat Vohra SEVP & Group Chief, Treasury Management Group

Amim Akhtar EVP & PSO to the President

Ekhlaq Ahmed EVP & Secretary Board of Directors

Tajammal Hussain Bokharee EVP/Divisional Head, Special Assets Management

Group

Mrs. Khurshid Maqsood Ali EVP & Divisional Head Employee Benefits,

Disbursements & Trustee Division

Tahir Yaqoob EVP & Group Chief, Overseas Coordination & Management Group

Anwar Ahmed Meenai EVP & Divisional Head, Islamic Banking

Naeem Syed EVP & Head, Core Banking Application, PMO

Aamir Sattar Financial Controller & Divisional Head, Financial Control Division

4

Atif Hassan Khan Group Chief (A), Information Technology Group ds of the

internal and external environment.

ATM Finder:

Burewala, Faisalabad, Gujar Khan, Gujranwala, Gujrat, Hyderabad, Islamabad,

Karachi, Lahore, Mirpur, Multan, Muzaffarabad, Peshawar, Quetta, Rawalpindi,

Sheikhupura, Sialkot, Taxila, Wah Cantt.

Branch Network

With the geographical development of its branches, the Bank has been able to extend

its services to a much larger number of Pakistanis all over the country. Today it has

more than 8.5 million accounts. Bank maintains its presence in all the major financial

centers of the world through its 15 overseas branches and 5 representative offices. Of

these, three representative offices have recently been set up at Tashkent (Uzbekistan),

Baku (Azerbaijan) and Almaty (Kazakhstan) to take advantage of the emerging

opportunities in CIS countries. Bank’s role globally is well assisted by its network of

correspondent banks located strategically in Asia, America, Europe and Africa.

Apart from having a vast branch network, Bank is at the forefront in the acquisition and

application of new technologies in every aspect of its banking facilities. It has acquired

leased telephone lines for on-line banking. The Bank has 12 Regional Computer Centers to

cover various on-line and batch system requirements of branches and controlling

Oversea Branches

Domestic Branches

5

Branch Network: NBP has an extensive domestic branch network of over 1500

branches located all over Pakistan. The Bank also has a presence in 24 international

locations including the USA, United Kingdom, Europe and the Far East.

BRANCHES ALL OVER THE COUNTRY

6

Brief history

The National Bank of Pakistan has its headquarters in Karachi, Pakistan. It has over

1,232 branches throughout Pakistan. The bank provides both commercial and public

sector banking services. It has assets worth USD 12.293 billion in 2007. Its

subsidiaries include NBP Capital, NBP Modaraba Management Company, NBP

Exchange Company, Taurus Securities, and NBP Almaty et al.

It also supports a first-class cricket side that competes for the ABN-AMRO Patron's

Trophy in Pakistan.

1949 National Bank of Pakistan (NBP) was established under the National Bank of

Pakistan Ordinance 1949 and was 100% govt.-owned. NBP acted as an agent of the

Central Bank wherever the State Bank did not have its own Branch. It also undertook

Government Treasury operations. Its first branches were in jute growing areas in East

Pakistan. Offices in Karachi and Lahore followed.

• 1950 NBP established a branch in Jeddah, Saudi Arabia.

• 1955 by this time NBP had branches in London and Calcutta.

• 1957 NBP established a branch in Baghdad, Iraq.

• 1962 NBP established a branch in Dar-es-Salaam, Tanganyika.

7

• 1964 The Iraqi government nationalized NBP's Baghdad branch.

• 1965 The Indian government seized the Calcutta branch on the outbreak of

hostilities between India and Pakistan.

• 1967 The Tanzanian government nationalized the Dar-Es-Salaam branch.

• 1971 NBP acquired Bank of China's two branches, one in Karachi and one at

Chittagong. At separation of East Pakistan NBP lost its branches there. NBP merged

with Eastern Mercantile Bank and with Eastern Bank Corporation.

• 1974 The government of Pakistan nationalized NBP. As part of the

concomitant consolidation of the banking sector, NBP acquired Bank of Bahawalpur

(est. 1947).

• 1977 NBP opened an offshore brain Cairo.

• 1994 NBP amalgamated Mehran Bank (est. 1991).

• 1997 NBP's branch in Ashgabat, Turkmenistan commenced operations.

• 2000 NBP opened a representative office in Almaty, Kazakhstan.

• 2001 State Bank of Pakistan and Bank of England agree to allow only 2

Pakistani banks to operate in the UK. NBP and United Bank agreed to merge their

operations to form Pakistan International Bank, of which NBP would own 45% and

United Bank 55%.

• 2002 Pakistan International Bank renamed itself United National Bank

Limited (UNB). The ownership structure of the UNB remained as before. The only

change to the shareholding structure is that UBL had recently been privatized in

Pakistan and was now owned 49% by the Government of Pakistan and 51% by a joint

foreign consortium of Abu Dhabi.

• 2003 NBP received permission to open a branch in Afghanistan.

• 2005 NBP closed its offshore branch in Cairo.

8

Nature of the organization

National Bank of Pakistan is at the forefront of international banking in Pakistan

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

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

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

Institution Wing is:-

• To effectively manage NBP’s exposure to foreign and domestic

correspondence

• Manage the monetary aspect of NBP’s relationship with the correspondents to

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

bank’s profitability

• Generation of incremental trade-finance business and revenues.

National Bank of Pakistan (the bank) was incorporated in Pakistan under the National

Bank of Pakistan Ordinance,

1949 and is listed on all the stock exchanges in Pakistan. It’s registered and head

office is situated at I.I. Chandigarh Road, Karachi. The bank is engaged in providing

commercial banking and related services in Pakistan and overseas.

The bank also handles treasury transactions for the Government of Pakistan (GoP) as

an agent to the State Bank of

Pakistan (SBP). The bank operates 1,232 (2006: 1,232) branches in Pakistan and 18

(2006: 18) overseas branches (including the Export Processing Zone branch, Karachi).

Under a Trust Deed, the bank also provides services as trustee to National Investment

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

1.2 During the period, the bank has increased its authorized share capital from Rs.7,

500 million (750,000,000 ordinary shares of Rs.10/- each) to Rs.10, 000 million

(1,000,000,000 ordinary shares of Rs.10/- each) as approved by shareholders in their

general meeting held on April 02, 2007.

9

Corporate Philosophy at National Bank

We at NBP believe that our customers are our most important and 1st

responsibility, we must, therefore, serve our present customers and promise to

serve our potential customers to the best possible on-counter and behind-

counter services. We should try to provide a total and integrate package of

services to create satisfied clientele. Our braches, regional offices and head

office should regard the customer as their most priority, serving them with

maximum possible helpfulness and courtesy.

Our second most important responsibility is the employees who work for our

great institution. They must have their security, stability and fair treatment in

their jobs in recruitments and assignment, in training and development, in

promotion and placement. Till separation. They should be treated with dignity

and should be made to rise to their highest potential working condition should

be attended. Supervisor should be tough minded but fair in the pursuit of bank

objectives.

Our third most important responsibility is our executives and officers. They

should have talent, education, experience and ability with a premium, place on

commitment, knowledge, leadership and orientation towards action,

implementation, improvement and achievement of goals.

Our fourth responsibility is to the communities that r served by our great

institution. Our 1st community is the Pakistani nation whose service is the

reason for our existence.

Our 5th responsibly is to our owners and stockholders. We must make a sound

profit and protect our business by creating financial services.

10

Objectives of National Bank:

Objectives are ends towards which an enterprise activity is aimed. The

purpose of business is production and marketing of economic goods and services but

to accomplish these objectives to a number of enterprise objectives may be necessary.

National bank of Pakistan has certain objectives. These objectives are

(1) Advancing loans

(2) Accept deposits

(3) Remitting of funds

(4) Sale of promissory notes

(5) Selling and realizing property of bank claims

(6) Investment or underwriting of stocks

a. Advancing loans: one of the main objective of NBP is advancing loans to

industrialists and traders against security of stock, debentures or other

securities

b. Accept deposits: Bank provides deposit facility to its customers. The

types of deposits are profit and loss saving accounts, Fixed account,

Current account.

c. Remitting of funds: The bank provides the facility to its customers

remitting large amounts of money in the form of bank Drafts, Telegraphic

Transfer, Mail Transfer to where ever the customers want.

d. Sale of promissory notes: To sell and realize the proceeds of sale of

any promissory notes, debentures, stock receipts, bounds, shares etc.

11

e. Selling and realizing property of bank claims: To manage sell and

realize all property whether moveable or immoveable which may come

in any way of the bank in satisfaction of its claim.

f. Investment or underwriting of stocks: To invest the funds of the

bank in or the underwriting of any of stocks, funds, shares securities,

debentures, bonds or scripts or other securities for money issued by

any public limited companies and to convert them into money when

required.

Business volume:

The National Bank of Pakistan is the foremost bank determined to set higher

standards of achievements. It is the key business partner for the Govt. of Pakistan with

special emphasis on nurturing Pakistan’s economic growth through aggressive &

impartial lending polices.

The main functions of National bank of Pakistan are to provide commercial banking

& related services in Pakistan & abroad. It also handles treasury transactions for the

Govt. of Pakistan as an agent to State Bank of Pakistan.

Under a trust deed, the Bank also provides services as trustee to NIT, including

supervision of securities on behalf of NIT.

It also provides internet banking & moreover, they have recently set up the financial

institution wing.

The role of this wing is to effectively manage NBP’s association with the

correspondents to support trade, treasury & other key business areas; thereby

contributing to the bank’s productivity.

Ownership: NBP is 100% owned by the Government of Pakistan (GoP).

Deposits: NBP holds 24.6% share of time and demand deposits in the country. Local

currency deposits comprise 67% of bank's total deposits while foreign currency

deposits account for the rest.

12

Assets: NBP's total assets stood at PKR350 billion on December 2001. This included

total earning assets of about PKR268 billion with gross loan portfolio of PKR140

billion. The bank also has an investment portfolio of PKR91 billion, which comprises

treasury securities, corporate bonds, shares and other securities.

Deposits: As of December 2001 NBP had a paid-up capital of PKR1.46 billion

divided into 146 million shares of 10 rupees each. Total shareholders' equity was

PKR10 billion, however, revaluation reserve has increased shareholders' funds to

PKR16 billion. NBP has, however, increased its paid up capital from PKR Rs. 1.46

billion to Rs. 3.73 billion through issuance of bonus shares (subject to corporate and

shareholder approvals).

Financial Highlights:

Amounts in Million

Year to December

1998 1999 2000 2001

Total Deposits 235,932 254,863 273,391 294,754

Total Assets 274,117 310,599 325,320 349,932

Total Equity 9,035 12,232 15,411 15,962

Total Loans 85,854 105,597 109,524 122,294

Total Investments

108,207 106,449 102,969 91,277

Net Profit (795) 62 529 (178)

13

FINANCIAL ANALYSIS FOR BANK

Financial year: The financial year of the Bank commences from the 1st day of

January and ends on the 31st day of December every year.

Non-performing loans: As on 31 December 2002, the Bank's non-performing loans

(NPLs) amounted to Rs. 30,323 million, which was 19.11% of total advances as

against 21.48% as on 31 December 1999, showing an improvement of 2.37%.

Provision against non-performing advances was Rs 18,296 million as on 31 December

2000, which is 60.34% of NPLs.

This high ratio reflects prudence of the Bank's management while determining

provisions. Remaining NPLs are covered by forced sales value of mortgaged

property, Federal Government Guarantee or are in category other than loss.

The Special Assets Group at Head Office with full co-ordination between field

functionaries and Head Office is monitoring NPLs and deals with the classified

portfolio of the Bank along with Remedial Management, Legal framework, Statistical

Analysis of classified accounts, Revival of Sick Industrial Units, Consortium

Financing and Ex-Mehran Bank Limited affairs etc.

Calculation Of Different Ratios

Earning assets to total assets

Earning assets to total assets = Earning assets / total assets

14

Year 2001

Earning assets to total assets = 286230528 / 17510437

=16.34

Year 2002

Earning assets to total assets =319676497/23936263

=13.35

Return on earning assets

Return on earning assets = profit after taxation / earning assets

Year 2001

Return on earning assets =1148529/286230528

=0.004

Year 2002

Return on earning assets =2253385/319676497

=0.007

Loan loss coverage ratio

Loan loss coverage ratio = provision against non-performance loans

&advances/ profit or loss before taxation

Year 2001

Loan loss coverage ratio =2926554/3015629

=0.97

Year 2002

Loan loss coverage ratio =1822154/6044811

=0.30

15

Equity to total assets

Equity to total assets = total equity / total assets

Year 2001

Equity to total assets =11958673/17510437

=0.68

Year 2002

Equity to total assets =14279303/23936263

=0.60

Deposits time capital

Deposits time capital = deposits/ capital

Year 2001

Deposits time capital =33123726/3730384

=8.88

Year 2002

Deposits time capital =13248569/3730384

=3.55

Loans to deposits

Loans to deposits= loans/ deposits

Year 2001

Loans to deposits =170319096/33123726

=5.14

Year 2002

16

Loans to deposits =140547374/13248569

=10.61

Current ratio

Current ratio=current assets / current liabilities

Year 2001

Current ratio =79155081/2245349

=35.25

Year 2002

Current ratio =55531453/3365744

=16.50

17

According to national bank of Pakistan report:

Directors’ Report

It gives me great pleasure to present on behalf of the Board of Directors the quarterly

accounts for the six months period ended June 30, 2007. The Profit for the six months

period ended June 30,2007 after carry over of accumulated profit of 2006 is proposed

to be appropriated as follows: -

Rs. in million

Net Profit before taxation for the six months period ended June 30, 2007 14,001.591

Taxation

- Current year 4,650.891

- Prior year(s) + 124.734

- Deferred 213.409

4,989.035

After tax profit 9,012.556

Un-appropriated profit brought forward 32,074.677

Transfer from surplus on revaluation of fixed assets – incremental depreciation- net of

deferred tax 19.504

18

Profit available for appropriation 41,106.737

Appropriations

Transfer to Statutory Reserve (10% of after tax profit) 901.256

Pre tax profit increased to Rs. 14,002 million from Rs. 12,196 million in the

corresponding period of last year, an increase of 14.8%. Basic and diluted earning per

share jumped to Rs. 11.05 from Rs. 9.83 during the same period of last year. Pre tax

return on equity stood at 50%. Return on assets improved to 4.2% up from 3.9% of

comparative period last year. Cost to income ratio of the bank remained in the top tier

at 0.33 Net interest margin registered impressive growth of Rs. 1,893 million or

13.2%. Net advances increased by Rs. 37 billion and Rs. 16 billion as compared to

corresponding period of last year and year end 2006. Deposits show impressive

growth of Rs. 51 billion or 10% from the year end.

During the year the bank launched “Premium Saver Account” (PLS Saving Account)

and Premium Amdani Certificate

(Monthly Income Scheme Account) offering attractive rates to small depositors.

We are pleased to inform the shareholders that in June 2007 JCR-VIS Credit Rating

Co. Limited upgraded standalone

medium to long-term rating of National Bank of Pakistan to AAA from AA+, the

highest in the banking sector.

JCR-VIS had earlier assigned two ratings to NBP. The stand-alone rating of “AA+/A-

1+” (Double A Plus / A One

Plus) reflected the intrinsic strength of the bank while the credit ratings of “AAA/A-

1+” (Triple A / A-ONE Plus) were based on the sovereign guarantee on the bank’s

deposits extended under the Bank Nationalization Act, 1974.

During the current rating review, JCR-VIS Credit Rating Co Limited (JCR-VIS) has

given due consideration to the sustainability observed in various indicators over the

past few years which reflect the significance of National Bank of Pakistan (NBP) to

the local economy. It is the only public sector bank in the country and has been able to

leverage the advantage to profitably tap certain avenues in both local and foreign

markets inclusive of running the largest treasury operations locally. The organization

has been able to strategically manage and build on its competitive advantages which

have translated into a strong and well - managed improvement in profitability trends

observed over the last few years, a substantial balance sheet footing of sound asset

quality, and strong liquidity and capitalization levels. Globally also, the bank is

19

strengthening its reach and has been actively constructing a branch network in recent

years with focus on South Asia, Central Asia and the Middle East, as well as China.

In consideration of the factors mentioned above, JCR-VIS has upgraded medium to

long-term rating of AAA on a stand-alone basis as well, negating the need for dual

ratings.

We extend our appreciation to the bank’s staff for their commitment, dedication and

hard work in achieving these excellent results. We would like to express our

appreciation to our stakeholders, regulators and our valued customers for their support

and continued confidence in NBP.

On behalf of Board of Directors

S. Ali Raza

Chairman & President

Date: August 25, 2007

Auditors’ Review Report to the Members

Introduction

We have reviewed the accompanying interim condensed balance sheet of National

Bank of Pakistan as at June 30,2007 and the related interim condensed profit and loss

account and interim condensed statements of cash flows and changes in equity

together with the notes forming part thereof (here-in-after referred to as “interim

financial information”) for the half year then ended. Management is responsible for

the preparation and presentation of this interim financial information in accordance

with approved accounting standards as applicable in Pakistan. Our responsibility is to

express a conclusion on this interim financial information based on our review. The

figures of the interim condensed profit and loss account for the quarters ended June

30, 2007 and 2006 have not been reviewed, as we are required to review only the

cumulative figures for the half year ended June 30, 2007.

20

Scope of Review

We conducted our review in accordance with International Standard on Review

Engagements 2410, “Review of Interim Financial Information Performed by the

Independent Auditor of the Entity”. A review of interim financial information consists

of making inquiries, primarily of persons responsible for financial and accounting

matters, and applying analytical and other review procedures. A review is

substantially less in scope than an audit conducted in accordance with International

Standards on Auditing and consequently does not enable us to obtain assurance that

we would become aware of all significant matters that might be identified in an audit.

Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that

the accompanying interim financial information is not prepared, in all material

respects, in accordance with approved accounting standards as applicable in Pakistan.

FORD RHODES SIDAT HYDER & CO. M. YOUSUF ADIL SALEEM & CO.

Chartered Accountants Chartered Accountants

Karachi Karachi

Date: August 25, 2007

21

National Bank of Pakistan

Interim Condensed Balance Sheet

As at June 30, 2007

(Un-audited) (Audited)

June 30, 2007

December31, 2007

NOTE ---------- (Rupees in ‘000) ----------

ASSETS

Cash and balances with treasury banks 102,862,412 78,625,227

Balances with other banks 41,229,750 40,641,679

Lending’s to financial institutions 32,753,638 23,012,732

Investments 4 163,434,648 139,946,761

Advances 5 331,795,453 316,110,406

Operating fixed assets 9,669,057 9,681,974

Deferred tax assets - -

Other assets 27,809,559 27,113,932

709,554,517 635,132,711

LIABILITIES

Bills payable 13,552,759 10,605,663

Borrowings 22,558,696 11,704,079

Deposits and other accounts 6 553,289,982 501,872,243

Sub-ordinate loans - -

Liabilities against assets subject to finance lease 20,137 13,235

Deferred tax liabilities 1,687,882 2,387,073

Other liabilities 25,743,415 26,596,300

616,852,871 553,178,593

NET ASSETS 92,701,646 81,954,118

REPRESENTED BY

22

Share capital 8,154,319 7,090,712

Reserves 14,788,500 13,879,260

Unappropriated profit 36,305,589 32,074,677

59,248,408 53,044,649

Surplus on revaluation of assets 7 33,453,238 28,909,469

92,701,646 81,954,118

CONTINGENCIES & COMMITMENTS 8

The annexed notes 1 to 14 form an integral part of these interim condensed financial

statements.

National Bank of Pakistan

Notes to the Interim Condensed Financial Statement - (Unaudited)

For The Half Year Ended June 30, 2007

1. STATUS AND NATURE OF BUSINESS

1.1 National Bank of Pakistan (the bank) was incorporated in Pakistan under the

National Bank of Pakistan Ordinance,

1949 and is listed on all the stock exchanges in Pakistan. It’s registered and head

office is situated at I.I. Chandigarh Road, Karachi. The bank is engaged in providing

commercial banking and related services in Pakistan and overseas.

The bank also handles treasury transactions for the Government of Pakistan (Gop) as

an agent to the State Bank of





1.2 During the period, the bank has increased its authorized share capital from Rs.7,

500 million (750,000,000 ordinary shares of Rs.10/- each) to Rs.10, 000 million

(1,000,000,000 ordinary shares of Rs.10/- each) as approved by shareholders in their

general meeting held on April 02, 2007.

23

2. STATEMENT OF COMPLIANCE

2.1 These interim condensed financial statements have been prepared in accordance

with approved accounting standards (please also see 2.2 and 2.3 below) as applicable

in Pakistan and the requirements of the Companies Ordinance,

1984 and the Banking Companies Ordinance, 1962 and the directives issued by the

Securities and Exchange Commission of Pakistan (SECP) and the SBP. Approved

accounting standards comprise of such International Financial Reporting

Standards as notified under the provisions of the Companies Ordinance, 1984.

Wherever the requirements of the Companies Ordinance, 1984, Banking Companies

Ordinance, 1962 or directives issued by the SECP and the SBP differ with the

requirements of these standards, the requirements of the Companies Ordinance, 1984,

Banking Companies Ordinance, 1962 or the requirements of the said directives take

precedence.

2.2 The SBP has deferred the applicability of International Accounting Standard

(IAS) 39, 'Financial Instruments: Recognition and Measurement' and

International Accounting Standard (IAS) 40, 'Investment Property' for

Banking Companies through BSD Circular No. 10 dated August 26, 2002.

Accordingly, the requirements of these standards have not been considered in

the preparation of these interim condensed financial statements. However,

investments have been classified and valued in accordance with the

requirements prescribed by the SBP through various circulars.

2.3 The disclosures made in these interim condensed financial statements have been

limited based on the format prescribed by the SBP vide BSD Circular No. 2, dated

May 12, 2004 and International Accounting Standard (IAS) 34, 'Interim

Financial Reporting' and do not include all the information required in the annual

financial statements. Accordingly, these interim condensed financial statements

should be read in conjunction with the annual financial statements of the bank for the

year ended December 31, 2006.

3. ACCOUNTING POLICIES

24

The accounting policies adopted in preparation of these interim condensed financial

statements are consistent with those followed in the preparation of the annual

financial statements of the bank for the year ended December 31, 2006.

National Bank of Pakistan and its Subsidiary Companies

Notes to the Interim Condensed Consolidated Financial Statement - (Unaudited)

For The Half Year Ended June 30, 2007

1. THE GROUP AND ITS OPERATIONS

1.1 The "Group" Consist of:

Holding Company

- National Bank of Pakistan (the bank)

Subsidiary Companies

- NBP Capital Limited

- CJSC Subsidiary Bank of NBP in Kazakhstan

- NBP Exchange Company Limited

- NBP Modaraba Management Company Limited

- Taurus Securities Limited

- National Agriculture & Storage Company Limited

- Cast-N- Link Products Limited

The Group is engaged in commercial banking, modaraba management, brokerage,

leasing and discounting services.

The bank was incorporated in Pakistan 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. The bank also handles treasury transactions for the

Government of Pakistan (GoP) as an agent to the State Bank of



25



NBP Capital Limited, CJSC Subsidiary Bank of NBP in Kazakhistan, NBP Exchange

Company Limited, NBP

Modaraba Management Company Limited and National Agricultural & Storage

Company Limited are wholly owned subsidiaries of the bank while the controlling

interest in Taurus Securities Limited is 58.32% and cast-

N-Link Products Limited is 76.51%.

1.2 Basis of Consolidation

- The interim condensed consolidated financial statements include the interim

condensed financial statements of the bank (holding company) and its subsidiary

companies - "the Group".

- The assets and liabilities of subsidiary companies have been consolidated on a line

by line basis and the carrying value of investments held by the bank is eliminated

against the subsidiaries' shareholders' equity in the interim condensed consolidated

financial statements.

- Minority interest is that part of the net results of operations and of net assets of

subsidiary companies attributable to interests which are not owned by the bank.

- Material intra-group balances and transactions have been eliminated.

- National Agriculture & Storage Company Limited and Cast-N-Link Product Limited

have not been consolidated, as these investments are fully provided and financial

statements of these subsidiaries are not available.

1.3 During the period, the holding company has increased its authorized share capital

from Rs.7, 500 million (750,000,000 ordinary shares of Rs.10/- each) to Rs.10, 000

million (1,000,000,000 ordinary shares of Rs.10/- each) as approved by shareholders

of the bank in their general meeting held on April 02, 2007.

26

2. STATEMENT OF COMPLIANCE

2.1 These interim condensed financial statements have been prepared in accordance

with approved accounting standards (please also see 2.2 and 2.3 below) as applicable

in Pakistan and the requirements of the Companies

Ordinance, 1984 and the Banking Companies Ordinance, 1962 and the directives

issued by the Securities and

Exchange Commission of Pakistan (SECP) and the SBP. Approved accounting

standards comprise of such

International Financial Reporting Standards as notified under the provisions of the

Companies Ordinance, 1984.

Wherever the requirements of the Companies Ordinance, 1984, Banking Companies

Ordinance, 1962 or directives issued by the SECP and the SBP differ with the

requirements of these standards, the requirements of the

Companies Ordinance, 1984, Banking Companies Ordinance, 1962 or the

requirements of the said directives take precedence.

2.2 The SBP has deferred the applicability of International Accounting Standard

(IAS) 39, 'Financial Instruments:

Recognition and Measurement' and International Accounting Standard (IAS) 40,

'Investment Property' for Banking

Companies through BSD Circular No. 10 dated August 26, 2002. Accordingly, the

requirements of these standards have not been considered in the preparation of these

interim condensed consolidated financial statements.

However, investments have been classified and valued in accordance with the

requirements prescribed by the SBP through various circulars.

2.3 The disclosures made in these interim condensed consolidated financial

statements have been limited based on the format prescribed by the SBP vide BSD

Circular No. 2, dated May 12, 2004 and International Accounting

Standard (IAS) 34, 'Interim Financial Reporting' and do not include all the

information required in the annual consolidated financial statements. Accordingly,

these interim condensed consolidated financial statements should be read in

conjunction with the annual consolidated financial statements of the bank for the year

ended December

27

31, 2006

2.4 These interim condensed consolidated financial statements are not subjected to

limited scope review by the auditors

3. ACCOUNTING POLICIES

The accounting policies adopted in preparation of these interim condensed

consolidated financial statements are consistent with as those followed in the

preparation of the annual consolidated financial statements of the bank for the year

ended December 31, 2006.

28

Product lines:

The National Bank of Pakistan offers a wide range of services to its customers &

recognizes the importance of efficient business delivery & providing timely solutions.

These are a list of services that NBP offers.

1. Demand Drafts

2. Swift System ( Society for worldwide Inter bank Financial

Telecommunication)

3. Letter of Credit

4. Pay Order

5. Mail Transfer

6. Foreign Remittance

7. Foreign Currency Account

8. Short Term Investment

9. NIDA * ( National Income Daily Accounts) Equity Investment

10. Commercial Finance

11. Trade Finance

12. International finance

13. Home Finance

14. Traveler’s Cheques

15. Personal Loans

16. Retail products

17. NBP Cash Card

DEMAND DRAFTS

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

purchase NBP’s Demand Drafts at very reasonable rates. Any person whether an

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

MAIL TRANSFERS

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

offer the most competitive rates in the market.

29

PAY ORDER

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

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

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

TRAVELER'S CHEQUES

Negotiability: Pak Rupees Traveler’s Cheques are a negotiable instrument

Validity: There is no restriction on the period of validity

Availability: At 700 branches of NBP all over the country

Encashment: At all 400 branches of NBP

Limitation: No limit on purchase

Safety: NBP Traveler’s Cheques are the safest way to carry our money

LETTER OF CREDIT

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

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

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

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

COMMERCIAL FINANCE

Let us help make your dreams become a reality

Our dedicated team of professionals truly understands the needs of professionals,

agriculturists, large and small business and other segments of the economy. They are

the customer’s best resource in making NBP’s products and services work for them.

FOREIGN REMITTANCES

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

Pakistan has taken a number of measures to:

30

• Increase home remittances through the banking system

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

remittances to the beneficiaries PakRemit™

Remit funds from USA to Pakistan

New Features:

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

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

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

besides United National Bank (the joint venture between NBP and UBL in UK)., and

Bank Al-Jazira, Saudi Arabia.

• Zero Tariffs: NBP is providing home remittance services without any charges.

• Strict monitoring of the system is done to ensure the highest possible security.

• Special courier services are hired for expeditious delivery of home remittances

to the beneficiaries.

SWIFT SYSTEM

The SWIFT system (Society for Worldwide Inter bank Financial Telecommunication)

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

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

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

NBP SWIFT Network

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

number NBP-PKKA. All NBP overseas branches and overseas correspondents (over

450) are drawing remittances through SWIFT.

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

our business and personal needs.

31

SHORT TERM INVESTMENTS

NBP now offers excellent rates of profit on all its short term investment accounts.

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

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

N.I.D.A

National Income Daily Account The scheme was launched in December 1995 to

attract corporate customers. It is a current account scheme and is part of the profit

and loss system of accounts in operation throughout the country.

EQUITY INVESTMENTS

NBP has accelerated its activities in the stock market to improve its economic base

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

dominant player in the development of the stock market. NBP is involved in the

following:

• Investment into the capital market

• Introduction of capital market accounts (under process)

NBP’s involvement in capital markets is expected to increase its earnings, which

would result in better returns offered to account holders.

TRADE FINANCE OTHER BUSINESS LOANS

AGRICULTURAL FINANCE

NBP provides Agricultural Finance to solidify faith, commitment and pride of farmers

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

Agricultural Finance Services:

“I Feed the World” program, a new product, is introduced by NBP with the aim to

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

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

helping farmers across Pakistan to increase production.

Agricultural Credit:

The agricultural financing strategy of NBP is aimed at three main objectives:-

• Providing reliable infrastructure for agricultural customers

32

• Help farmers utilize funds efficiently to further develop and achieve better

production

• Provide farmers an integrated package of credit with supplies of essential

inputs, technical knowledge, and supervision of farming.

Agricultural Credit (Medium Term):

• Production and development

• Watercourse improvement

• Wells

• Farm power

• Development loans for tea plantation

• Fencing

• Solar energy

• Equipment for sprinklers

Farm Credit:

NBP also provides the following subsidized with ranges of 3 months to 1 year on a

renewal basis.

• Operating loans

• Land improvement loans

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

equipment

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

Production Loans:

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

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

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

CORPORATE FINANCE

Working Capital and Short Term Loans:

NBP specializes in providing Project Finance – Export Refinance to exporters – Pre-

shipment and Post-shipment financing to exporters – Running finance – Cash Finance

33

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

shipment / Post Shipment Agricultural Production Loans

Medium term loans and Capital Expenditure Financing:

NBP provides financing for its clients’ capital expenditure and other long-term

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

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

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

the bank’s belief in its client's capabilities, and its commitment to the country

Loan Structuring and Syndication:

National Bank’s leadership in loan syndicating stems from ability to forge strong

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

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

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

their particular industry, geographic location and structure through syndicated debt

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

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

transaction.

Cash Management Services:

With National Bank’s Cash Management Services (in process of being set up), the

customer’s sales collection will be channeled through vast network of NBP branched

spread across the country. This will enable the customer to manage their company’s

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

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

investment services. In fact, with NBP, you’ll be provided everything, which takes to

manage your cash flow more accurately.

34

Student Loan Scheme

Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002

budget speech, a STUDENTS LOAN SCHEME (SLS) for Education was launched by

the Government of Pakistan in collaboration with major commercial banks of

Pakistan (NBP, HBL, UBL, MCB and ABL). Under the Scheme, financial assistance

is provided by way of Interest Free Loans to the meritorious students who have

financial constraints for pursuing their studies in Scientific, Technical and

Professional education within Pakistan.

The Scheme is being administered by a high powered committee comprising Deputy

Governor, State Bank of Pakistan, Presidents of the commercial banks and

representative of Ministry of Finance, Government of Pakistan.

ADMINISTRATOR OF THE SCHEME: National Bank of Pakistan

ELIGIBILITY

Under the scheme the students are eligible to apply for loans provided:

He/She has obtained admission on merit through normal course/procedure in the

approved Universities/Colleges of the public sector mentioned hereunder.

He/She falls at the time of admission within the age bracket of:-

For Graduation Not exceeding 21 Years

For Post-Graduation Not exceeding 31 Years

For Ph.D Not exceeding 36 Years

He/She has secured 70% marks in the last public examination.

He/She has undertaken the study of the subjects given below.

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 the

University/College

Boarding expenses excluding meal charges

Procurement of textbooks --- Disbursed directly to the student

35

REPAYMENT

The maximum period of repayment of loan is 10-Years from the date of disbursement

of first installment. The borrower shall repay the loan in monthly installment after six

months from the date of completion of studies.

APPROVED UNIVERSITIES/COLLEGES

APPROVED SUBJECTS

i) Engineering ii) Electronics

iii) Oil Gas & Petro-Chemical Technology iv) Agriculture

v) Medicine vi) Physics

vii) Chemistry viii) Biology, Molecular Biology & Genetics

ix) Mathematics x) Other Natural Sciences

xi) DAWA and Islamic Jurisprudence (LL.B/LL.M Sharia) xii)Computer

Science/Information System and Technology including hardware.

xiii) Economics, Statistics and Econometricsxiv) Business Management Sciences

xv) Commerce

36

Competitors

These are competitors of National bank of Pakistan.

1. United Bank Limited

2. FAYSAL BANK

3. ASKARI BANK

4. BANK OF PUNJAB

5. BANK AL-FALAH

6. STANDARD CHARTERED

7. Habib Bank Limited

8. Muslim Commercial Bank

9. Allied Bank Limited

10. FIRST WOMEN BANK

11. NATIONAL SAVINGS

12. PRIME BANK

13. PICIC COMMERCIAL BANK

37

ORGANIZATION STRUCTURE

Organizational hierarchy chart:

PRESIDENT

BOARD OF DIRECTOR

MEMBER EXECUTIVE BOARD

REGIONAL CHIEF

ZONAL CHIEF

BRANCH MANAGER

38

Number of employees:

In national bank of Pakistan Jhelum branch 23 employees

are working in different departments.

Main offices:

National Bank Building

I.I. Chundrigar Road Karachi. Address: NBP Building, I.I. Chundrigar Road, Karachi.

Comments on the organization structure:

The National Bank has great contribution towards building wide Banking structure

in Pakistan and serving all aspects of the National life and all classes of society. NBP

is fully aware of the developments taking place in the world as well as the changes

occur in the economic and social condition with in the country. The bank is

determined to meet new challenges by redefining its goals and strategy.

39

PLAN OF INTERNSHIP REPORT

INTRODUCTION OF THE BRANCH:



In Jhelum, Civil Lines Branch is a main branch of National Bank of Pakistan.

Branch code is 0344 & phone number is 0544-9270185, fax: 0544-9270188.

Branch manager of civil lines Jhelum branch is Mr. Anwaar.

Operational Manager is Mr. Khushhal Anjum.

It has so many departments, Bills Department, Deposit section, Credit section,

Foreign exchange, clearing section etc.

23 employees are working in this branch. They are all hard working. There is also a

regional office of NBP in Jhelum.

STARTING & ENDING DATES OF INTERNSHIP

I start internship at this branch. The duration of my internship program was 6 weeks.

40

TRAINING DEPARTMENTS

There are so many departments of national bank of Pakistan in which I got training.

1. Bills DEPARTMENT

In Bills department I worked for two weeks.

2. CLEARING SECTION

In clearing department I worked for one week.

3. FOREIGN EXCHANGE

In foreign exchange I worked for one week.

4. CREDIT SECTION

In credit section I worked for one week.

5. DEPOSIT SECTION

In deposit section I worked for one week.

41

TRAINING PROGRAM

In order to be able to cope with the changing environment it is necessary to

have some practical experience. As the students of Business Administration

we have to pass through a series of various managerial techniques. During this

practical course we are provided with an opportunity to learn that how the

theoretical knowledge can be implemented in practical grounds.

I was selected to do my internship in National Bank of Pakistan chest Branch Jhelum.

I worked there for six months & it gave me a greater practical knowledge about the

operations of a bank. In this section I have narrated my experience, observations & all

the working activities which I observed during my six week internship at National

Bank of Pakistan chest Branch Jhelum.

INTRODUCTION OF ALL THE DEPARTMENTS

Bills DEPARTMENT / BILLS DEPARTMENT:

Bills department is one main department in which I work for longtime. Sir Aziz is

head of the Bills department. Bills department is responsible for the passing of Govt.

bills, pensions, preparing their records, making fan forts, recording the transactions of

transfer also, balancing the cash record & transfer record with the cash section.

This section is responsible for making the records of P-Pensions, c-pensions, railways

pensions, EOBI, Distt. Bills, central bills, Punjab bills separately. After balancing

cash, recording amount in vouchers (debit & credit vouchers).

It performs following functions:

a. Inward bills for collection or IBC

b. Outwards bill for collection or OBC

Inward bills for collection:

42

These are bills or cheques etc which are collected

locally. They are received from outstation branches banks and parties.

Demand draft: it refers to the payments of money on demand of the holder of

draft. Demand draft includes DD issues and DD payable.

Outwards bill for collection (OBC):

Clean bills: these are negotiable instruments, drawn on outstation

branches; bills sent for collection on behalf of the customers for example

cheques, drafts or treasury bills etc.

Documentary bills: these are bills accompanied by documents such as

R.R.T.R bills of landing etc. having title to goods, collected by the bankers on

behalf of their customers.

Pay slip: pay slip is an instrument in receipt issued by the bank in the

following cases.

1. On account of expenditure incurred by the bank.

2. On account of refund of a payment to a person under certain

circumstances.

Pay order: pay order is issued to other banks for collection of make the

payment as said.

Or

This department is performing following functions

a. Collection of utility bills

b. Collection of dues of education institution

c. Payment of salaries

d. Payment of zakat

e. Payment of pension

43

CLEARING DEPARTMENT:

In clearing department I worked for one week.

a. Introduction

b. Clearing house

c. Advantage of clearing house

d. Function of clearing department

e. Procedure of depositing cheque

f. Types of cheques collected by clearing department

g. Scrutiny of pay in slip

h. Procedure after scrutinizing

i. Procedure of clearing in clearing house

Introduction:

Every bank acts in two ways.

a. Paying Bank

b. Collecting Bank

Here in theory no legal obligation on a banker to collect cheques, drawn up

to other bank for a customer. It is however an important function of

crossed cheques. A large part of this work is carried out through the

bankers clearing house whenever it is established.

Clearing House:

A clearing house is the place where representatives of

all the banks get together for the purpose of off setting the interbank

indebtedness arising from the transfer of deposits by a customer of a

particular bank to another bank.

44

Advantage of clearing house:

The advantages of clearing house are

manifold. It prevents the cost and waste involved in collection each and

every cheque and claim. Which a banker holds against another across the

counter with all the danger of loss in the transit incumbent upon it. Great

economy is also achieved in the employment of liquid cash by setting the

differences by simpler transfer of credit from one account to another, there

by minimizing the necessity of holding large cash balances, clearing house

works under the control of State Bank of Pakistan.

A banker has no legal obligation to collect cheques drawn upon other

banks for the customers, through modern banks have assumed this

important function of their own choice. Therefore it is very important that

since they have assumed this function, the banker should be very careful in

their performance. Otherwise they will face more difficulties. So if they

will provide this facility when the cheque is crossed.

Function of Clearing Department:

The following are main functions of clearing department.

1. To accept transfer deliveries and clearing cheques from the customer of the

branch and to arrange for their collection.

2. To arrange the payment of cheque drawn on the branch and given for

collection to any other branch of national bank of Pakistan or any other

members or sub members of the local clearing house.

3. To collect amounts of cheques drawn on members, sub members of the local

clearing house, sent by those branches which are not represented as the local

clearing house.

Clearing on options exchanges

The Options Clearing Corporation is an example of a clearing house that

functions for the purpose of clearing equity options and bond derivatives, in

order to ensure the proper implementation of these instruments.

45

Clearing on futures exchanges

The NBP Clearing House also acts as the clearing house.

It gives clearing on future exchanges.

Clearing of payments

NBP use the ACH to transfer funds either as debits or credits between

participating institutions. Typical uses of ACH transactions are for automatic

payroll programs, monthly mortgage or membership payments, or among non-

profit organizations, as a monthly donor/contribution program.

Clearing of securities

Clearing of securities is also the function of clearing house.

Procedures of Depositing Cheques in Clearing Department:

Whenever customers want to deposit cheques etc, he fills a pay in slip and it’s

over the counter along with the instruments he wants to deposit with bank. As

far as possible, the customer desire that on of the staff member fill in a slip

from him, he should be obliged promptly.

The smaller portion of the perforated pay in slip is handed over to the

depositor and the portion becomes the regular portion of a credit voucher.

Type of Cheques Collected by Clearing Department:

1. Cheques drawn on collecting bank branch. It is sorted A/C wise,

particulars, dates, and amount. Balance, check signatures, verified &

passed on counter for posting in relevant A/C.

2. Cheques drawn on collecting bank branches in the towns. As soon as

cheque received, these are crossed with bank crossing stamp, sorted out

branch wise & sent to concerned branch.

3. Cheques drawn on other banks. Crossed check by banks crossing stamps &

are sorted & dealt with through useful crossing process.

Clearing services offered:

a. Overnight clearing

b. Same day / high return clearing

46

c. Country wide local vs. Dollar clearing

Clearing Divided:

1. Outward clearing/ within city

2. Inward clearing/ within bank

3. Same day clearing

Mr. Javed is in charge of clearing section.

They enter in register A/c number, amount, and cheque number in

the column of particular bank separately & in one column number

wise, after that write total amount in the end.

After doing this they attach qamma with the cheques of different

bank & return them to the banks.

For clearing purpose following points must be verified.

a. The instruments should be neither stale nor post dated.

b. If the instrument is crossed not negotiable it can be for the third

party.

c. The instrument should not bear any unauthorized alteration.

d. The amount in words and figures should be the same.

e. The instruments should be drawn on a member or any of local

branches.

f. If the cheque is crossed “Account payee’s” “Account payee

only” or “payee’s Account”, it should only be accepted for

collection for the payee’s account.

g. The cheques or drafts should not be crossed specially to any

other bank.

h. A cheque payable to a firm should not be accepted for credit to

a partner’s account.

i. A cheque payable to one of the joint account holder should not

be collected for the joint account without the payee’s

endorsement or consent.

A cheque drawn by a customer in the capacity of an agent,

attorney or manager of his company or firm, should not be

collected for credit to his personal account.

j. Pay orders although negotiable should not be collected for third

parties.

47

k. Do not collect an instrument in the accounts of an agent or of

the servant of the payee’s of endorsee of the instruments.

l. Mail transfer receipts pay ships and treasury receipt should not

be collected for persons other than the payee.

m. If an account is new or the balance or operation of the account

is not satisfactory, satisfy yourself about the titles of the

customer to the instruments before the title of the customer to

the instrument before accepting the deposit.

n. Branch agent’s permission should be obtained before accepting

a third party cheque or draft for credit of the account of the

staff member.

o. If the payee is a govt. department, govt. official, or a trust

account, the instrument cannot be collected but for the payee’s

account.

p. Cheque pay able to a trust, account should not be collected for

credit to a trustee account.

q. If the payee of an instrument is National Bank of Pakistan, it

can be collected for credit of the drawer’s account or the

amount of the instrument may be utilized as desired by the

drawer in writing.

r. All the endorsement should be regular and on endorsement

should be missing. After the cashier scrutinizes the cheques he

must also scrutinize the pay in slip.

Scrutiny of pay-in-slip:

These are the steps of the scrutiny of pay in slip.

o On both the counterfoil and the pay in slip following

should be checked.

Date of deposits

Account number

Title of account

The cheque/number and the drawer bank/name

Total amount in words and figure

48

o Customer should be used separate pay in slip for transfer,

transfer delivery and clearing cheques.

o The amount noted should be the same as the amount of the

instruments and the amount in words and figures should be

same.

Procedures after scrutinizing:

After scrutinizing the cheques and other deposit instruments

and paying slip at the counter the following procedure is

under taken by cashier if he is satisfied.

Fixing the stamp

Scrutiny and receipt by the authorized officer

Returning the counter foil to the depositor

Certificates and confirmation by the officer in charge of

the department

Separating the cheque into transfer delivery and

clearing cheque.

Procedures of clearing at clearing house:

The mechanism of setting inter bank indebtedness

operates as follows.

Clerks representing various banks meet at a common

place, the clearing house everyday. Every clerk then

delivers to the others the cheques and the other claims

which their respective banks hold against his banks hold

against his bank cheques and other documents

dishonored will be returned to the representative of the

respective bank. The various amounts of receipts and

deliveries are now added up and a balance is struck

there in and the final settlement is effected by the

supervisor of the clearing house by transferring balance

49

kept and the central bank by these various clearing

banks.

FOREIGN EXCHANGE:

In foreign exchange I worked for one week. Sir Ansar majeed is in charge of

foreign exchange department.

Foreign Exchange, currency and money claims, such as bank balances and bank

drafts, expressed in the equivalent value in foreign money.

In the broader sense, the word foreign exchange is related to the exchange of methods

through which

o The currency of the one country is exchanged for that of another;

o The forms in which exchanges are conducted and

o The ratio at which they are affected.

.

National central banks play an important role in the foreign exchange markets. They

try to control the money supply, inflation, and/or interest rates and often have official

or unofficial target rates for their currencies. They can use their often substantial

foreign exchange reserves to stabilize the market.

The use of foreign exchange arises because different nations have different monetary

units, and the currency of one country cannot be used for making payments in another

country. Because of trade, travel, and other transactions between individuals and

business enterprises of different countries, it becomes necessary to convert money

into the currency of other countries in order to pay for goods or services in those

countries. The transfer of money values from one country to another and the

50

determination of the price at which the currency of one country will be surrendered

for that of another constitute the main problems of foreign exchange.

Foreign exchange plays an important role in the payments of international trade.

The foreign exchange market is unique because of

1. Its trading volumes,

2. The extreme liquidity of the market,

3. The large number of, and variety of, traders in the market,

4. Its geographical dispersion,

5. Its long trading hours: 24 hours a day except on weekends (from 5pm EST

on Sunday until 4pm EST Friday),

6. The variety of factors that affect exchange rates.

7. The low margins of profit compared with other markets of fixed income

(but profits can be high due to very large trading volumes)

8. The use of leverage

Foreign exchange transactions:

Merchandise transaction:

These consist of visible imports and exports. Purchase of goods for abroad and

sale of goods to abroad.

Service transaction:

These represent inward and outward payments in respect of shipping,

insurance, banking and travel services. It includes payments in respect of

interest, dividends, rents and profits etc.

Unrequited transactions:

In indicates the payments and receipts from of reign countries in shape of such

items as home remittances by workers abroad, gifts, aids etc.

Capital account transactions:

These are further divided into two classes.

a. Long term capital transfers:

Those transfers whereby residents of one

country acquire securities (stocks and bonds) and tangible assets (land) in

foreign countries with the purpose of earning profits in future.

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b. Short term capital transfers:

Those transfers which move relatively

quick from country to country.

Fore speculative purposes

To take advantages of differences in interest rates

As balancing items where a country has a debit or credit

balance on current accounts

For example:

Money gold and

Holdings of commercial credit, bills, cheques etc

Transactions with I.M.F

In National Bank of Pakistan, four currency accounts are available:

1. US Dollar

2. Pound Sterling

3. Japanese Yen

4. Euro

FUNCTIONS

The department performs the following functions:

1. Account opening

2. Account closing

3. Inward/outward remittance

4. Issuance of traveler cheques

ACCOUNT OPENING

Terms and conditions: Account opening requires two things

1) National ID card of the customer and introducer

2) Introducer

CUSTOMER: Customer is the person who comes with the purpose of

opening the account

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INTRODUCER: Introducer is a person having the account in same branch

and gives guarantee about the customer. If the introducer is not proper than state bank

charges RS 5000/- per head from that employee of the bank who has opened the

account of the customer on the request of the introducer.

Procedure of Account Opening and Depositing Foreign Exchange:

First of all, the customer is required to fill an application form. Then he

attaches the photocopy of his identity card and fills the signatory cards. Then

he is allotted an account number by entering in the account opening register.

Now he fills the pay-in slip and deposits money on the counter.

Following things are needed for opening of account:

1. Account opening form

2. Signature card

3. Letter of kinship

4. Letter of thanks

5. Issuances of cheque book

Account opening form: Account opening form consist of

a. Category of account

b. Currency

c. Title of account

d. Account number

e. Customer information

f. Initial deposit

g. Authorized person in case of customer death

Signature card: The signature card included the name and specimen signature

of the customer

Letter of kinship: In the letter of kinship the customer authorized the bank to

pay the proceedings of his/her PLS/Current foreign currency account to the

related person by describing the relationship of the person with the customer

after the death of the customer.

Letter of thanks: Letter of thanks is the latter issued by the bank to the

customer for two purposes

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1) 1st purpose is to say thanks to the customer for opening the account in

their bank

2) 2nd purpose is to confirm the address provided by the customer while

opening the account.

Issuance of cheque book: Cheque book is issued to the customer after

sending the letter of thanks when the customer comes with the letter of thanks

and requests for the issuance of the cheque book. A cheque book (usually

having 25 leaves) is issued to the customer.

Closing of Account: The customer can close the account. The customer is

required to submit an application for closing the account. The account is

closed out and his balance is paid to him after deducting the closing charges,

i.e. $ 20 and the application is filed in account closing file.

There are many reasons for closing of account

1. Account holder Owen request

2. Death of account holder

3. Closing of account due to the bad manners of account holder

Inward/Outward Remittances:

The remittances are of following types:

a. Foreign Telegraphic Transfer (FTT)

b. Foreign Demand Draft (FDD)

c. Foreign mail transfer(FMT)

d. SWIFT

e. Western union money transfer(WUMT)

f. Foreign Exchange Bearer Certificates (FEBC)

g. Special US Dollar Bond

Foreign Telegraphic Transfer: This is telegraphic transfer just like ordinary

local currency TT, but this is foreign currency. Its charges are fixed, i.e., if

payment is in cash, charges are Rs. 1500. If payment is through account, Rs.

1200; if deposit is above Rs. 50,000 charges are Rs. 600.

NBP has its correspondent bank in New York. NBP gives credit to main office

Karachi, which gives credit to NPB New York, which gives credit to NPB,

which ultimately gives credit to required destined bank and account number.

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Mode of payment can be cash or by debiting the account. When FTT is

received from abroad, NBP debits Main Office Karachi account and gives

credit to the account of beneficiary.

Foreign Demand Draft: Foreign Demand draft is also known as FDD. A

person who wishes to remit money to someone in another place may if he does

not send his own cheque, obtain from his bank a draft on demand payable to

the person who is to be paid the money. It may be drawn upon one of the

banker’s own branches, or upon some other bank where exists for draft to be

drawn. Whenever a draft is drawn own advice is dispatches the same day.

Advising the bank or branch as the case may be, of the particular of the draft

of that banker on whom it is drawn may recognize the draft was it is presented.

When a person requires a draft, he should be asked to complete the prescribed

application form in which he should state the amount of the draft, the name of

the payee and the place of payment. The bank charges commission Rs. 500

flat, excise duty Rs. 4 for charges.

After receipt of money, the entry is passed in FDD register and a number is

allotted to FDD. Then FDD is prepared and given to the customer. After this,

they give credit to Main Office Karachi, and advice is also sent to Karachi.

Foreign Mail Transfer: These are also known as FMT. Transfer by mail of

an account of currency to another country. The Remitter sign auroras

requesting the banker to transfer the amount by mail, giving the name and

address of the payee.

Foreign Bills for Collection: Under this head, all foreign cheques are

included whose payments are to be received from abroad.

When a customer asks the bank for collection, the cheque is sent to the bank

on which is drawn. Then on the receipt of advice from abroad, the customer’s

account is credited in the bank and debit the Main Office Karachi account.

The bank charges $10 or the equivalent amount in rupees.

Foreign Exchange Bearer Certificates (FEBC): Foreign Exchange Bearer

Certificates can only be issued from Foreign Currency Account and not from

deposit of local currency. The maturity period of these certificates are 5 years,

7 years and 9 years. It can be issued and enchased only in rupees. The

customer account is debited and state bank of Pakistan (SBP) is credited.

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Special US Dollar Bond: The bonds have the maturity period of 3 years, 5

years and 7 years. The bank gives the interest at the rate of 5% + LIBOR, i.e.

2%, 3% and 4% respectively.

Traveler Cheques

Issuance of Traveler Cheques: NBP issues the traveler cheques to those

people who want to travel abroad. These are not drawn on any specified bank

or banks, but payable at practically all banks throughout the world and

guaranteed by some well-known institution. National bank purchases the

traveler cheques from American Express Bank and makes the payment after

selling it to the client.

Procedure: A customer is required to submit the following things:

Valid passport with visa

Return ticket

Currency to be deposited in Pak Rupees. Ticket is endorsed. It is converted on

the selling rate of that day. Traveler cheques are issued. Their limit is $50 per

day for private visit and maximum limit for the year is $2100.

Limit for businessman is $200 per day and maximum limit is $6000. But

approval from Chamber of Commerce & Industry is required and certificate of

ticket issue for which the payment must be made through cheque. Pak rupee

currency account is necessary, and he has to present cheque for the amount to

the bank. Endorsement of the ticket is very essential. Issuing ticket authority

should endorse its stamp on the passport.

SWIFT:

The SWIFT system (Society for Worldwide Inter bank Financial

Telecommunication) has been introduced for speedy services in the area of

home remittances. The system has built-in features of computerized test keys,

which eliminates the manual application of tests that often cause delay in the

payment of home remittances. The SWIFT Center is operational at National

Bank of Pakistan with a universal access number NBP-APKKA. All NBP

overseas branches and overseas correspondents (over 450) are drawing

remittances through SWIFT. In case of transfer of funds the introduction of

S.W.I.F.T., an acronym for Society for Worldwide Inter-bank Financial

Transactions, has made remittances faster and secure. The system works like

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Internet communication processes. All the banks in the world are registered

for the service, which have the facility of online computers. Headquarter of

S.W.I.F.T. is in Belgium. The message sent through this way does not require

any code tests to confirm its authenticity. The sending process is more secure

where two officers make the transmission of the message, one types the

content with his code word and the other executes it with his password. There

are different types of codes that are used for the messages interchanged on the

basis of the type of the transaction. Using the NBP network of branches, you

can safely and speedily transfer money for our business and personal needs.

Swift is a soft wear .it is use for following purposes

Financial transactions

Non-financial transactions

Linking

Import export

Different codes are used in swift for different purposes

Latter of credit code is 700

Remittance code is 100

Bank to bank transaction code is 202.etc.

Procedure: When any massage comes through swift 1st its received by head

office then head office authority send that massages to different banks via mail

to main branches of relative banks.

Western Union Money Transfer: Western union money transfer is a fastest

way to receive money worldwide. It is working in almost 200 countries.

Different Govt. and private organization are dealing with WUMT

Govt. organization e.g. banks

Private organizations e.g. Zarco, Money changer, Dollar East, Master

Currency

Main office of WUMT is situated in Dubai, it is a procedure of counter

payment

Time required in only one hour and deduction on it is $50.

Procedure of payment

WUMT just needed identification, no need of a/c, its an counter payment

Procedure of payment is that the customer came to specific person who is

dealing with WUMT tell him the

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1) MTC NO

2) Receiver name

a. First name

b. Middle name

c. Last name

3) Sender name

a. First name

b. Middle name

c. Last name

4) Telephone no

5) Photo copy of ID card

6) Expected amount (10% margin is acceptable)

7) Test question

After if the that related officer feed MTC # (mail transfer control) , it is unique

number not less then 10 digits, receiver name , his/her 1st name and last name,

and sender name to check whether amount is come or not . When all these

things are correct then give a form to the receiver, he/she filled the specific

form, after that office done his signature and give one copy to customer, other

copy send to the cash counter for payment and the last copy for put in file for

the purpose of record. Payment is made only in Pak rupees.

WUMT form: It form is divided into three sections

a. 1st for receiver information, his name, address and telephone number

b. 2nd section for sender, his name, address telephone number

c. 3rd section is for expected amount, MTC number, test question,

signature

There are three copies of form 1st for counter payment, 2nd for customer and

3rd for branch record.

Spot

A spot transaction is a two-day delivery transaction (except in the case of the

Canadian dollar, which settles the next day), as opposed to the futures

contracts, which are usually three months. This trade represents a “direct

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exchange” between two currencies, has the shortest time frame, involves cash

rather than a contract; and interest is not included in the agreed-upon

transaction. The data for this study come from the spot market. Spot has the

largest share by volume in FX transactions among all instruments.

Forward

One way to deal with the Forex risk is to engage in a forward transaction. In

this transaction, money does not actually change hands until some agreed upon

future date. A buyer and seller agree on an exchange rate for any date in the

future, and the transaction occurs on that date, regardless of what the market

rates are then. The duration of the trade can be a few days, months or years.

Future

Foreign currency futures are forward transactions with standard contract sizes

and maturity dates.

Swap

The most common type of forward transaction is the currency swap. In a

swap, two parties exchange currencies for a certain length of time and agree to

reverse the transaction at a later date. These are not standardized contracts and

are not traded through an exchange.

Option

A foreign exchange option (commonly shortened to just FX option) is a

derivative where the owner has the right but not the obligation to exchange

money denominated in one currency into another currency at a pre-agreed

exchange rate on a specified date. The FX options market is the deepest,

largest and most liquid market for options of any kind in the world.

Exchange Traded Fund

Exchange-traded funds (or ETFs) are Open Ended investment companies that

can be traded at any time throughout the course of the day.

Speculation

Controversy about currency speculators and their effect on currency

devaluations and national economies recurs regularly.

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Market participants

Financial markets, Bond market, Fixed income, Corporate bond, Government

bond, Municipal bond, Bond valuation, High-yield debt, Stock market, Stock,

Preferred stock, Common stock, Registered share, Voting share, Stock

exchange, Foreign exchange market , Derivatives market, Credit derivative,

Hybrid security, Options, Futures, Forwards, Swaps, Other Markets,

Commodity market, Money market, OTC market, Real estate market, Spot

market, Finance series, Financial market, Financial market participants,

Corporate finance, Personal finance, Public finance, Banks and Banking,

Financial regulation.

Factors affecting currency trading

Although exchange rates are affected by many factors, in the end, currency

prices are a result of supply and demand forces. The world's currency markets

can be viewed as a huge melting pot: in a large and ever-changing mix of

current events, supply and demand factors are constantly shifting, and the

price of one currency in relation to another shifts accordingly. No other market

encompasses (and distills) as much of what is going on in the world at any

given time as foreign exchange.

Supply and demand for any given currency, and thus its value, are not

influenced by any single element, but rather by several. These elements

generally fall into three categories: economic factors, political conditions and

market psychology.

Economic factors

These include economic policy, disseminated by government agencies and

central banks, economic conditions, generally revealed through economic

reports, and other economic indicators.

Economic policy comprises government fiscal policy (budget/spending

practices) and monetary policy (the means by which a government's central

bank influences the supply and "cost" of money, which is reflected by the

level of interest rates).

Economic conditions include:

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Government budget deficits or surpluses: The market usually reacts negatively

to widening government budget deficits, and positively to narrowing budget

deficits. The impact is reflected in the value of a country's currency.

Balance of trade levels and trends: The trade flow between countries illustrates

the demand for goods and services, which in turn indicates demand for a

country's currency to conduct trade. Surpluses and deficits in trade of goods

and services reflect the competitiveness of a nation's economy. For example,

trade deficits may have a negative impact on a nation's currency.

Inflation levels and trends: Typically, a currency will lose value if there is a

high level of inflation in the country or if inflation levels are perceived to be

rising. This is because inflation erodes purchasing power, thus demand, for

that particular currency. However, a currency may sometimes strengthen when

inflation rises because of expectations that the central bank will raise short-

term interest rates to combat rising inflation.

Economic growth and health: Reports such as gross domestic product (GDP),

employment levels, retail sales, capacity utilization and others, detail the

levels of a country's economic growth and health. Generally, the more healthy

and robust a country's economy, the better its currency will perform, and the

more demand for it there will be.

Political conditions

Internal, regional, and international political conditions and events can have a

profound effect on currency markets.

For instance, political upheaval and instability can have a negative impact on a

nation's economy. The rise of a political faction that is perceived to be fiscally

responsible can have the opposite effect. Also, events in one country in a

region may spur positive or negative interest in a neighboring country and, in

the process, affect its currency.

CREDIT SECTION/ ADVANCES DEPARTMENT:

Credit has been defined as "A question of ability to pay coupled with an

intention to pay."

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If it can be said that one department is more important in a commercial bank than

another, surely the credit department is that one. A great deal has been written of late

in regard to the systematic gathering of credit information.

Sir Shabbir Dar is incharge of credit department.

It may be defined as

“The sale of goods and services and money claims in the present in exchange

for a promise to pay in future. “

The most important activity of the bank is the granting of credit to the

customers. NBP provides short term long terms financing for domestic and

international trade. The policies made by central office of the cash can be

amended on the basis of the rules and regulation, economic risk of each

country board of directors and committee of the NBP made this type of

decisions and informed about these decisions to the branch managers.

Manager can grant the credit limit to each customer with in the declared limits

approved by the controlling offices i.e., co, GHQ, circle and zonal. Banks

grant credit to the customer for a certain period of time. The banks provided

credit to the customers so that they can purchase ahead of their liability. By

giving these facility to the customer’s large scale production of commodity

can be achieved and economic growth rate can be increased. The power to

sanctioned loans had been delegated for controlling different offices,

according to amount of loan. This department is also called as risk

management group.

The following elements are used for credit selection.

Character: It is based on the borrower willingness to repay the obligation.

The loan officer sees the family background mode of living, business nature,

habits, moral reputation and etc. before giving the loan.

Capacity: The ability of borrower to repay the loan when due. The borrower

ability to repay the loan is assessed by the office so that he will be able to

repay the loan in future.

Capital: The officer assesses the capital of the borrower. If assets held by the

borrower are liquid, they can be easily convertible in cash; but if non liquid is

used then it is risky to given loan.

Collateral: It is collateral security. It may consists of stocks bonds , bill of

exchange, bills of lading, etc. the bank has protect him self from any

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discrepancy in the future. They increase the ability of the borrower to obtain

the funds from the bank.

Condition: The economic condition of the borrower is determined. The

economic conditions of the borrower in and out side the country effects the

repayment of loan. If condition is favorable then loan is given otherwise vice

versa.

Functions

Credit department has performed following functions.

Advances: Advances provided by the bank are of the following two types.

Funded

Non-funded

Funded: In fund based bank contributes a large amount of the fund based on

clarified as follows

TYPES OF ADVANCES

Demand Finance: One time disbursement of the whole amount sanctioned, as

the limit for the credit allows. Any person, individual, group, company, firm

and all others can achieve this mode of financing. The mark-up or interest is

calculated on the total amount disbursed and requires to be paid before the

date of final adjustment. Regarding the amount, limit and period, it depends on

the nature of the case in review.

Cash Finance: In this mode of financing the borrower is allowed to make

withdrawals of funds as he requires, but the total amount outstanding cannot

exceed the limit sanctioned. The mark-up/interest is calculated on the amount

outstanding on his account. The calculation of mark-up/interest is based on the

number of days a specific amount is withdrawn. This finance if normally

borrowed by small traders or individuals for their petty matters involving cash

transactions up to rupees three hundred thousand maximum.

Running Finance: To assist a large-scale business operator to carry on his

day to day requirements of liquid funds, this account is opened is made

operation in his favor. Running finance is provided where the amount goes

beyond rupees three hundred thousand. The mark-up/interest is calculated the

same way as in case of cash finance.

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Security against running finance is that which is easily convertible in to cash

and bank kept 25% margins with it.

Non-Fund: Bank provide non fund advance in the following form:

a. Guarantee

b. Imports

Guarantee: A guarantee is a promise between one person to another person or

party to answerable for the debt of a third party. Bank issues guarantee after

100%cash collaterals are provided by the person i.e.50% in the form of the

property.

Imports: Bank provides non-funded credit facility to the following basis.

• Sight LC

• Usance or DA LC.

Sight LC: In this type of L.C when payment is made documents are released.

A cash margin of 30% is relational by the bank.

Usance or DA L.C: The bank retains the payment after a period of days,

which is given in the L.C a margin of 30%.

TYPES OF LOANS

The credit department of NBP has providing the following types of loans

1. Short term loans

2. Long term loans

3. Working capital loan

4. Syndicate (project) loan

5. Monitoring

Documentation in short term financing

Demand promissory note

Mark up agreement

Letter of guarantee in personal capacity

Letter of authority

Letter of pledge

Memorandum of deposit of title deal

Status reports: A credit report is an assessment of borrower’s character and

capacity from a banker’s point of view. Credit reports on borrowers called

Status Reports, financial reports, banker’s opinion or confidential reports. All

these terms carry more or less the same meanings. The study of a borrower is a

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study of his character, capacity and capital, and collateral often known as the

4Cs to consider his credit worthiness and eligibility for the bank advance.

The purpose of compilation of credit report of the borrower is to assess their

net worth. It must contain information about borrower’s means, character,

integrity, assets, liabilities, business and experience. Besides, borrowers own

investment, details of properties, must be obtained. The borrower may be

asked to give written clarification of their existing liabilities.

In the case of Limited Companies, their borrowing powers to be verified from

their Memorandum & Articles of Association. Their certification of

incorporation to be examined, exiting borrowings, prior charge on their fixed

assets, paid-up capital, reserves, profit and loss position, detailed particulars of

their directors and complete analysis of balance sheet must be incorporated in

the credit report. Independent inquiries about the borrowers and opinions form

their previous bankers must be made. As such a comprehensive credit report is

compiled which serves as a constant guide to the banker about his borrower.

This report is prepared by the bank of the intending borrower with a view to

considering his Credit Worthiness and Eligibility for the Bank Finance.

Besides other things it contains the net worth of the borrower.

Net worth of borrower

Individuals: Net of the individual’s worth is the total investment or equity of

the sponsors/borrowers in the company through which they are asking for

credit and in the other sister concerns.

Firms: Total investment in Business + Properties – liabilities

Paid-up-capital + Reserves + Profits (Losses)

The Investigation process

1. Knowing the market place

2. Risks inherent in lending

3. Management risk

4. Market risk

5. Earnings fluctuations risk

6. Default risk

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7. Marketability risk

Criteria checked for loans

Major areas requiring focused attention of the analyst are:

1. Financial Condition

Which is reflected in the trends of:

Net sales

Gross sales

Operating profits

Net profits (at least for the last 3 years)

2. Structural Liquidity: It refers to the extent of liquidity usually available

in the business, or which is the routine requirement of the borrower based

on the nature of his periodically maturing liabilities.

3. Industry/Business Of Operation: The banker has to check that in which

industry or segment of market the loan is being given this is important

because if there were a recession in that industry for decades then it would

not be feasible to invest in such a business.

Certain traditionally stable industries are in Pakistan in which NBP feels

satisfied while investing. For example in they feel satisfied by investing in ICI.

4. Debt Equity Management: Excessive reliance on debt, rather than plough

back of profits or injection of fresh equity, to maintain a healthy

combination of debt and equity is thought with danger because ultimately

the debt servicing requirements place a heavy burden on its liquidity

thereby its survival.

5. Assets Management: Asset management involves the analysis of how

productively the assets of the company are being used. Sales and

profitability can be measured with this.

6. Borrower’s Credit Worthiness: In order to get a complete picture of the

borrower’s credit worthiness, inquiries will have to be made about:

a. His business.

b. Trade experience.

c. Assets and liabilities.

d. His account with bank or with other banks.

e. His financial statements and income tax returns.

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f. An interview with him will be necessary to elucidate or supplement the

information that may have been collected.

7. Management: Before giving loan NBP also checks whether the

management have the depth, skill and experience. If the management is

aggressive and adoptive to the new changes then it is most likely that the

banker may receive the loan back on due date

8. Securities: In case the borrower is not in a position to meet his obligations,

there must be something else to call back upon. So bankers take securities to

have a resource to them to guard liquidity, that is, security is an insurance

against calamities. In case of cash finance the customer have to give the same

amount of money to the NBP as a security for which it takes loan.

Condition for security: The security must be liquid or radically convertible to

cash with more then adequate margin of safety fully under the banks control,

having high value, which can with stand volatile market condition.

Secured by acceptable immovable tangible collateral with necessary margin

and fair degree of marketability under the forced sale situation (should have

buyer). The types of securities may vary from a piece of land or building to

commercial papers or ornaments. Further, security has its own importance, not

only as constituting the ultimate source of recovery in the event of failure of

the borrower or his enterprise, but as providing a measure to the borrowers

own stake in the enterprise and also placing the limitation on his future

borrowings. However, though security serves as a cushion to fall bank upon in

case of need, but its adequacy alone should not form the sole consideration for

judging the suitability of the loan. So the choice of security is not made in

isolation, but keeping into consideration the customer and security offered

together.

Guarantees:

A grantee is defined as

“An undertaking by a person to responsible for the debt of another person.”

National bank of Pakistan issues guarantees to government agencies like

atomic energy, high way department, and customs arthritis. Sui northern gas

and others. It also issues guarantee to multinational organization like Siba

gigay, Sandoz, PBS, and etc. for the purchase of pesticide or insecticide from

any fertilizer company. Bank accepts only long other bank guarantee but in

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some cases personnel guarantee is also accepted. The guarantee issued is

treated as contingent liability. According to local rules and regulation the

policy for issuance of guarantee can be changed. The expiry of the guarantee

can be set by both bank and guarantor. The minimum period is one year and

the guarantee can be reissue for extra period with paying charges. The two

officers whose signatures appears in the specimen signature book of bank and

also counter sign by the zonal chief must sign each guarantee. Both officers

must also sign any amendment. Am amendment in the guarantee can be made

after giving written application to issuing branch. If the value of the guarantee

is reduced by the amendment the liability amount will be reduced and if will

value is increased additional liability entries will be passed.

The bank provides following types of guarantees to the customers.

a. Bid bond

b. Mobilization bond

c. Performance bond

Bid bond: The facility provided at the time of bed opening is called bid bond.

Mobilization bond: When the bid is accepted, the bank provides this type of

facility to the customer.

Performance bond: When the project is completed, the contractor about the

performance of the project provides a performance certificate for one year.

During one year, if there is any mishap in the project the repair otherwise

authorities claim the performance charges from the bank. Bank charges

commission on issuance of guarantee as per their schedule of charges. If the

party did not pay the amount in the stipulated time period, bank puts this case

for recovery. If some amount is recovering then it is good otherwise bank

deduct the amount from its profit and starts the legal procedure against the

property pledged by the customer to bank. Bank assesses the demand of the

customer and then writes letters to other banks to provide them confidential

report of credibility about the customer this is one provided in the shape of

CIB (credit information bureau) report provided by the SBP. In this report the

credits of the customers with the bank operating in Pakistan are given. After

checking this report the bank issues the guarantee to the customer. In case of

death of his heir as given in the will be responsible for that guarantee.

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Security: It is an interest or right in the property gives to the creditor to

convert it in cash in case of debtor fails to meet the principal and interest.

The bank provides the following securities to the customers.

Mortgage: Transfer of interest in movable property for securing the payment

of money lend on existing or future liability. The bank provides the following

two types of mortgage.

a. Registered mortgage

b. Equitable mortgage

Registered mortgage: Registered mortgage is provided on the residential

property, commercial industrial property, raw plot, etc. A party can get

registered mortgage if they provide the following documents to the bank.

a. Title deed

b. Non encumbrance (NEC)

c. pit form (in case a constructed hose)

d. Valuation certificate

e. Affidavit

f. Mortgage deed

g. Personnel guarantee of mortgagor

h. Power of attorney

i. Legal opinion.

Banks examine all these reports, and if they are correct then issue the

mortgage to the party. The bank examines these reports to see that the property

they want to mortgage is registered and is not already pledged. The bank also

calculates the value of the property and the legal opinion of the customer in

case of non-payment.

Equitable mortgage: Equitable mortgage is provided on the residential

property, commercial industrial property, raw plot, etc.

a. Title deed

b. Non encumbrance certificate (nec)

c. Pti form (in case a constructed house)

d. Valuation certificate

e. Affidavit

f. Memorandum of deposit of title deed

g. Personal guarantee of mortgagor

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h. Power of attorney

i. Legal opinion

In this mortgage a charge form bound the customer for any legal action in case

of non-payment. In this type of mortgage hypothecation of stocks involves.

Pledge: A pledge is an “a class security given to customers for stocks ware

house, customs, and etc. it is defined as actual delivery of movable property to

lender as security for a loan. When the customer makes the payment of the

loan in full he can back his mortgage property from the bank i.e. when full

payment is made the stock is released.

Procedure of sanction of loan: In Credit department 1st step is to preparation

of credit line proposal for the preparation of credit report.

For this following information required by the bank from the party.

a. Purpose of loan

b. Details of all firms or companies associated with business

c. Name of proprietor/ partner/directors

d. Accurate and up-to-date balance sheet and profit and loss statement of

le.st two years of business

f. Market report of the borrower repute

g. Report from the bank if borrower has maintain his account with the

bank

h. CIB report

i. Full details of existing limit and actual liability against the business

j. Particular about the foreign exchange deposits and bills given by the

borrower to the bank

k. Memorandum and article of association in case of limited company

l. Audited report of balance sheet and income statement of last two years

After checking all the securities, customer verification the manager done the

following tasks

1. Preparation of credit proposal

2. Prepare the about the customer

3. Sanction of loan

Preparation of credit proposal: After formal application for the

credit the party submits approval. For this purpose borrower can use coarse

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paper or the form provided by the bank. Along with the application borrower

also submits the documents required by the bank. The bank manager evaluates

the documents provided by the borrower. He gets the party’s credibility report

confidentially from the other commercial banks. He checks the balance sheet

and income against the assets in the company. He also measures the

percentage of owner’s equity. Then he doses the ratios analysis of the

company. If the party is involved in the export and import business then the

data of the last three years of this business is considered. The manager of the

bank also examine the project violability, the securities provided by the debtor

to the bank are evaluated by measuring their worth. In the case of pledge is

assessed by the manager while in case of new party manger checks from

where the party is financing for their business

Prepare the Proposal about the customer: After preparing the proposal

manger prepare the report about the customer. Report contains the following

information

1. Name of the company

2. Date of establishment

3. Address

4. Nature of business

5. Branch office

6. Worth of business

7. Date

8. Banker’s opinion

9. Head cashier opinion

10. Branch manger opinion

In case of partnership business following information is included in the report

a. Partner, their share in capital, profit and loss

b. Deed of partnership

c. Partnership letter

d. Turn over

e. Net profit

f. Personal property of partners

g. Bank balance of partners

h. Advance payment of suppliers

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i. Particular of machinery installed in the factory through financing

Incase of corporation/limited companies the following information are

included

1. Incorporation and commencement of company

2. Sales offices

3. Capital information

4. Directors and their contribution to capital

5. Balance sheet with explanation and evaluation

6. Net worth of the company

Sanction of loan: If the limit of the loan lies with in the power of manger then

he sanction the loan otherwise manger with the covering letter along with all

necessary documents sends it to the concerned sanctioning authority.

DEPOSIT SECTION:

The Government Deposit Department handles the applications of the banks for

government deposits, the receipt and delivery of securities for collateral, the

calculation and receipt of interest on the deposits, the records of redeposit’s and

withdrawals, and the records of collateral and of coupons from the collateral.

Sir Tariq Mehmood is in charge of deposit section.

It accepts deposit from customers.

Following types of deposits are offered by National Bank:

1. Current Deposit

2. Saving Bank Deposit

3. Profit And Loss Saving Account

4. Fixed Deposit

5. Call Deposit

6. Short notice term deposit

7. Foreign Currency Deposit

8. Cumulative deposit certificate (other)

a. Current Deposit or Current A/C: in this type of account the client is

allowed to deposit or withdraw money as and when he likes. He may thus

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deposit or withdraw several times in the day if he likes. Usually the bank

allows this and services charges are deducted by the bank and current

deposit account. It is for business men or person who needs deposit &

withdrawal.

b. Saving bank deposits or saving A/C: This type of account is for those

persons who want to make small savings. This type of account is opened

with Rs. 100. In this case deposits can be made only up to a costing

amount and with drawls are allowed twice a week. If the depositors want

to withdraw more than Rs. 15000 a seven days notice is required before

the withdrawal. Bank pay facility without restrictions. Deposit treated as

liabilities. No profit or mark up.

c. Profit and loss saving accounts: These types of accounts are one step

towards the islamisation of banking system in the Pakistan. Under such

types of accounts the bank allows no interest to the customers. The

executive board of the bank declares the profit or loss every year. PLS

saving account having a running minimum credit balance of Rs. 100

would be eligible for sharing profit/loss of the bank. The rate of profit or

loss on PLS saving accounts shall be determined by the bank at the close

of each half year, in its sole discretion and the banks decisions shall be

final and binding on the PLS account holder.

d. Fixed deposits: in this type of account a certain amount is deposit for

certain, period such as six months, two years or longer. A fixed deposit

receipts is issued in the same of the depositor to withdraw his money or to

renew this deposit. The interest allowed on fixed varies with the period

for which the deposits are made.

e. Call Deposits: Call deposits are the sorts of deposits, which are deposited

with the bankers against any tender. This is without interest provided the

depositor has agreed to keep its amount with the banker for some fixed

period.

f. Short Notice Term Deposit or S.N.T.D: This kind of deposit is for a

short period. The depositors may withdraw his deposit at any time by

giving seven days notice to the banker. In this type of deposit facility the

trader is allowed to withdraw his amount with interest of the deposited

period.

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g. Foreign Currency Accounts: Foreign currency account is opened by

depositing foreign currency. You can open foreign currency account in:

US DOLLAR

POUND STERLING

JAPANESE YEN

DEUTSCHE MARK

BOOKS RELATING TO CUSTOMERS:

1. Pay-in-slip:

When money is to be deposited in the bank the pay in slip is to

be filled. The object of this book is to provide the customer with the

bank’s acknowledgement for receipt of money to be credited his account.

2. Cheque Book:

A cheque book contains a number of cheques, which is

given to a customer upon written request and after marking the payment

for the cheque book. It enables a customer to make withdrawal from his

account for make payment to various parties by issue of cheques.

3. Pass Book:

Pass book is a copy of the customer account as it appears

in the books of the bank. The clerk in this book records balance. But now a

day due to computerization the concept of pass book is not in practice.

GROUNDS FOR CLOSING THE CUSTOMER’S ACCOUNT

The banker may close the account of the customer due to following

reasons:

a. Notice by a customer

b. Death of a customer

c. Customer’s insolvency

d. Customer’s insanity

e. By order of court

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f. Unsatisfactory operations

1. Notice by customer:

The banker closes the account of the

customer on the application of the customer for closing his

account.

2. Death of a customer:

On death of his customer, the bank must

stop payment on cheques drawn on him by the deceased customer because the

death revokes his authority to pay such cheque. The heirs or executors of the

deceased customer or not authorized to operate on the account. It can act only

in accordance with provisions mentioned in the letter of probate issued by

competent courts.

3. Customer’s insolvency:

Insolvency in civil death therefore, the

insolvent adjusting loses his rights receiver or liquidator as the

bankers receives the notice of insolvency of the adjusting or

petition filed for adjusting a filled customer insolvency.

4. Customer’s insanity:

If the customers become insane or mental it

terminates the banker’s authority to act as his customer’s agent. Since the

banker customer’s relationship comes to end, in such as situation, it is usually

considered that the banker’s authority to pay his customers cheques is revoked

by notice of insanity. However the bankers treat their customers as it unless a

fairly inclusive evidence of the customer’s insanity is available to them.

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5. By order of court:

A court of law may serve a banker with an order

in garnish proceeding in execution of a decree prohibiting him from honoring a

customer’s cheque.

ACCOUNTS DEPARTMENT

Usually accounts are maintained in two ways.

a. Journal system

Journal system is adopted by some commercial industrial institutions. In

journal system entries are reported in journal Books and then posted to ledger.

b. Vouchers system

Voucher system is too used for every transaction. Voucher has to be prepared

either in cash or in transfer or in clearing, the Sheet upon which these

vouchers are summarized transactions wise and consolidated into a figure is

called supplementary.

Types of supplementary:

1. Debit supplementary

2. Credit supplementary

Debit supplementary is used for debit voucher and credit supplementary is used for

credit voucher books and registered maintained by bank are as follows.

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o General ledger:

o Statement of daily affairs

o Cash book or cash cum day book

o Transfer book

o Income and expenditure ledger etc.

Income includes:

Discount

Service charges

Rent (on building)

Commission (from utility services)

Brokerage (A bank sells and buys share, stock, debentures, other

securities and receives payment for these services.)

Expenditure includes:

Salaries, allowances and provident fund

Rent, taxes, insurance, lighting etc

Profit paid on deposits and borrowing

Stationary, printing and advertisement charges etc

Auditor’s fee and legal charges.

REMITTANCE DEPARTMENT

Remittances can be made through:

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Instrumental transfer

Electronic transfer

a. Instrumental Transfer

Instrumental transfers are following

Demand Draft: It is an instrument, which is payable on demand and it is only

presentable in the city/country. When any draft, i.e., an order to pay money, drawn by

an office of bank upon another office of the same bank for a sum of money payable to

order on demand, purports to be issued by or on behalf of the payee, the bank is

discharged by the payment in due course.

When a person requires a draft, he should be asked to complete the prescribed

application form in which he should state the amount of the draft, the name of the

payee, and the place of payment. The person to those persons, who have been duly

authorized to act on his behalf, should sign this application form. An advice is

prepared and two copies of this advice are sent to the Head Office. The bank charges

3% withholding tax and commission according to the rate list (minimum is Rs. 200).

Pay Order: It is an instrument, which is payable in demand and only presentable in

city. Pay order is also called the banker’s cheque drawn upon the issuing bank itself.

It is not negotiable and therefore, bankers tend to cross the instrument “Payee’s

account only” to avoid the possibility of dealing with instruments with forged

endorsement. The pay order is issued favoring individuals, commercial concerns, and

government departments. On the presentation of pay order, the bank is liable to pay

the amount to the customer. Bank charges excise duty of Rs. 4 and service charges of

Rs. 100.

Pay Slip: It is an instrument, which is issued by bank and used for expenditure

purposes, i.e., electricity bills, maintenance bills, security bills, fixture and fitting, etc.

Call Deposit: Call deposit is not actual deposits of bank. It is in fact the liability of

the bank. Call deposit are openly prepaid by the bank for contractors

PROCEDRE:

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Following steps are involved

1) Depositor fills the credit vouchers for call deposit. He writes the following

information

Name of company

Amount

Date

2) He deposits the cash along with filled voucher in the cash department

Encashment of CD

For the encashment of call deposit needed

1. 5 rupee stamp

2. two signature of customer on the back side of CD

3. token issued

4. accountant make entry in the CD register show that it has returned

b. Electronic Transfer

Electronic transfer is of following types

Telegraphic Transfer / (T.T): It is the message, which is sent from one branch to

another on the order of payer to payee through wire. It is one of the quickest means to

transfer fund through the use of telex/fax/internet or cable. Payment to the

beneficiary is affected directly by the drawer office upon identification or through

credit into beneficiary’s bank account. As such remitting office is not required to

issue any instrument payment to the remitter for delivery to the beneficiary.

Issuance and Payment of Telegraphic Transfer Outgoing

Application form is filled by the client in whom the name and account number of the

beneficiary, which is to be credited and name of customer, is required. For

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telegraphic transfer, the payment can be made in case or by cheque or by debiting the

customer’s account if he is the account holder. The amount of Telegraphic Transfer

should be written on the form. The amount is transferred to beneficiary’s account in

the other bank. An advice is given to the customer but application is filled in the

record of the bank.

If the beneficiary is not the account holder of DBL, bank credits a Telegraphic

Transfer payable account and when payment is made to the beneficiary, TT payable

account is debited.

Issuance and Payment of Telegraphic Transfer Incoming

When a TT is received then an entry is passed in TT incoming register after verifying

the test. When a person comes and wants to encash his TT, bank checks the

statements of that person. If the bank finds any account credited to the person’s

account against TT, bank prepares a voucher for this payment against that TT. The

customer then presents that certificate to the cash counter and collects money.

Mail Transfer / (M.T): It is the same like TT, but in this type, the message is sent

through mail rather than telex. The procedure is same as TT, but the advice is sent

through mail rather than wired.

Traveler’s cheques (TC): These are also called TC. Traveler’s cheques first came

into use century ago. Form of travel currency giving to the holder .the security of a

letter of credit and convenience of a local currency. In practice, they are acceptable in

payments of accounts on board ship, at hotels and in stories. They are in form of a

draft. They should be so signed immediately on issue and place is provided on the

cheque for the signature of the beneficiary on its

Lockers service

National bank of Pakistan also provides lockers facility in the country. The lockers

issued only to the depositors. No lockers are issued to any unknown person.

The dual control system is used for lockers. The officer has master key to apply on the

locker but he cannot open the locker of any person. The locker holder provides the

bank has specimen signature. Whenever the locker holders come to open the locker,

his signatures are verified by the officer and then will be able to open his locker. If the

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key of the locker is lost company providing these lockers breaks the locker and new

lock is fitted in its locker and lock is destroyed in the presence of the locker holder

and bank charges RS 1200 for that. In case the locker holder dies, the court opens his

locker in the presence of his heir as mentioned in his will or and his belongings are

given to them and the locker is closed.

DETAILED DESCRIPTION OF THE DEPARTMENT I

WORKED IN RELATED TO MY AREA OF

SPECIALIZATION

During the period of my internship I learn how to deal with different people’s in

different situations, how to do work well etc.

In HRM I study that without proper planning we cannot do anything right.

Bills department is one of the most important departments of NBP. It is responsible

for the Govt. related matters. Sir Aziz is the head of Govt. section.

Govt. department deal with the Govt. bills, Pensions etc. Making F-110 & F-15 is

the responsibility of this department. Sir Aziz passes every bill for payments.

Because Govt. department is responsible for the dealing with people therefore, I spend

2 weeks there. In the days of pensions, there was too much rush of pensioners. It was

difficult to handle them because they are all older & want that they get pension as

soon as possible. And also the dates of salaries in those days, so it was too hard to

deal with pensioners & govt. bills at a time.

As I had done MBA in HRM, & in this subject I study how to deal with people’s,

what type of planning needs to handle this type of situations, what type of behavior

need at this situations & how to remove conflict in this situation, so it is easy to me to

handle them effectively without any problem.

I made proper planning with cash department for doing work effectively before the

dates of pensions & because of proper planning I was able to complete this task.

I also work in deposit, credit, clearing section, foreign exchange there I also deal with

people effectively.

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According to the bank staff, there is too much difficult in work govt. department

because there we meet all types of people & difficult to handle them in rush but

because of doing specialization in HRM, I run this department effectively.

And in this way my internship is related to the knowledge of my area of

specialization.

Structure of the HRM Department

Department hierarchy:

Human resource management process in the organization:

A. Human resource planning and forecasting

HRP is a process in which HR department systematically reviewing human resource

requirements to ensure that the required number of employees with the required

Vice president

Human Resources

Manager

Total compensation

Manager

people &

Organizational development

Manager

Labor relations

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skilled is available when they are needed. In forecasting HR department forecast the

demand and supply of workforce in the NBP.

1. HRP process:

a. Determine the organizational mission:

It states NBP’s overall purpose and basic business scope and operations it provides

information.

b. Scan the organization environment:

This is known as SWOT analysis through this process NBP’s HR department identify

opportunity, threat, strength and weakness that can be faced by the NBP.

c. Set strategic goals:

Set specific long term and short term goals and objectives. These goals are specific,

challenging and measureable.

d. Formulate a strategic plan:

Course of action is designed to meet strategic goals and departmental goals are

selected at this step.

These are steps of HRP process.

Determining the objectives.

Defining skills required to meet objectives

Determine additional human resources requirements in

light of current HR.

Develop action to meet the anticipated HR needs.

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2. Forecasting HR requirements:

A requirements forecast is an estimate of the numbers and kinds of employees the

national bank of Pakistan will need at future dates in order to realize its goals.

3. Methods to forecast HR needs:

Several methods are using to forecast HR needs.

Zero- base forecasting:

This method uses the NBP’s current level of employment as the starting point for

determining future staff needs in NBP.

Bottom- up approach:

It is a forecast method in which each successive level of the NBP, starting with the

lowest and forecast its employee requirements in order to ultimately provide an

aggregate forecast of employment needs.

Use of mathematical models:

Mathematical model also use for forecasting HR requirements. It defines relationship

between demand and the number of employees needed.

Simulation:

It is a technique for experimenting with a real world situation through a

mathematical model representing that situation.

B. Employees recruitment & selection

Recruitment:

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Recruitment can be defined as the process of discovering potential candidates for

actual or anticipated organizational vacancies. Every organization has its own

recruitment policy.

According to the recruitment policy of NBP, the requirements are:

Candidate must be a citizen of Pakistan.

She/he must be a business graduate, and

She/he should have attained the age of 18 years but not exceeded the age of 35 years.

1. Sources of candidates:

Basically two type of source of candidates, internal and external.

Internal are within the national bank and external that are out side the national bank.

a. Internal sources:

In this type of source vacancies in upper level management can be filled either by

hiring people from out side the national bank or by promoting lower level managers.

These are major forms of the internal recruiting in NBP.

o Promotion from within.

o Job posting.

o Contacts and referrals.

b. External sources:

There are some employee’s needs that a firm must fill through external recruitment.

Among them are, filling entry-level jobs, acquiring skills not possessed by current

employees and obtaining employees with different backgrounds to provide new ideas.

These are external source.

High schools and vocational schools

Community colleges

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Colleges and universities

Competitors and other firms

Unemployed

Older individuals

Military personnel

Self-employed workers

2. Employment selection process:

Employment selection process or Procedure:

There are certain steps involved in the procedure in recruiting to NBP. They are:

Applications are invited from candidates on prescribed forms against the vacant posts

advertised in the newspapers. Application forms received are scrutinized and eligible

candidates are called for written test. Test is conducted in four subjects, i.e. English,

Computer, General Knowledge and Mathematics. Written test carries 250 marks.

Candidates who qualify the written test are called for interview. Interviews are held at

GM office.

After that the candidates have to undergo a medical check up by the prescribed

doctor.

Appointment letters are sent to the selected candidates, who have to present

themselves before the Head Office for signing the following documents.

1. Bank Secrecy Bond

2. Security Bond

3. Service Agreement Bond

Appointed candidates are kept on probation for 9 months. They are sent for a 9-

months pre-service training to the Staff College.

NBP look these things when recruiting personnel:

• Team players with excellent interpersonal skills

• Knowledge and use of information technology

• Strong analytical and problem solving skills

• Excellent written and verbal communication skills in English.

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C. Training & development

Training and development are the core issues of HR, which will ultimately improve

our customer service and help us, attain the standard of a progressive bank

1. Training need assessment:

Following sources help HR department in training need assessment.

Self assessments

Company records

Customer complains

New technology

Employee grievances

Interview with managers

Customer satisfaction survey

Observation etc.

In 1949, the first year of operations the NBP has one hundred employees one its

payroll but with in two years this number had grown to 1505 by 1960 the figure has

risen to 5023 and now in 1996 it is the order or 20694.

During the first ten years the NBP trained its own staff through a series

of training programmed both for junior officers and clerical staff. By 1958 how ever it

was obvious that one thins more comprehensive was needed and the bank established

a staff college Karachi. Three mote colleges at Islamabad, Lahore and Peshawar,

setup later. These colleges provide course of instructions, supervisor personnel and

clerks to meet the Bank’s ever growing trained personnel. This needs springs not only

from the steady grown for the bank’s business but also to replace wastage due to

retirement resignation, ill health or death.

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The staff college receives junior bank officers for further training in

banking the course lasting from six to nine weeks with about twenty five students in

each course.

The staff college course are designed not only to impart technical

instruction, but also develop qualities of judgments decisions, leadership and

management, since these student are likely to be those men who may expect to the

seniors most executive positions the bank has to offer.

The bank also deputes officers to attend banking seminar both in

Pakistan and abroad and it attaches great importance to the exchange of ideas

information and knowledge which can most use fully accrue from these gatherings.

In its position the National Bank has considerable responsibility in

ensuring that the country is well represented at meetings of bankers at domestic and

international level.

2. Employee development:

National Bank of Pakistan has an existing Human Resource development department,

which operates to increase the existing skills of the people existing or coming in the

organization, in order to achieve its objectives in a more efficient and effective

manner.

NBP has devoid two basic training techniques.

First is related to the training and development of mid term plan, regarding new

clients & middle level employees.

Secondly, the training & development for long term plan, regarding the career

development of higher level employees.

NBP applies on-job and off-job strategies to train its employees (middle & higher

level).

NBP training & development academy advises Job rotation to ensure & facilitate the

producing of all rounder.

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The source of this assignment confirms the availability of the training plan at least 2

months before the commencement of New Year, in order to make it easy for the

socializing and orientation of the new employees.

NBP believes in pre-post training test for existing employees & post training test for

new employees. The trainees will be required to submit back-home action plan, which

will be followed up by the JNMDC/Staff colleges. These plans will help in evaluation

and end use of training

D. Performance management

1. Setting performance standards & expectations:

Standards of performance provide the basis against which the individual can be

effectively appraised.

There are eight conditions to consider when setting standards of performance:

1. Standards of performance are based on the job and not on the person doing the job.

2. Standards of performance are achievable.

3. Standards of performance are understood by the employee performing the job.

4. Standards of performance are agreed upon by both the employee and supervisor.

5. Standards of performance are as specific and measurable as possible.

6. Standards of performance should be time-oriented.

7. Standards of performance are always in writing.

8. Standards of performance allow for revision and change.

The system by which organizations evaluate individual job performance. More over it

is about the employee performance and the accountability. As the world is now global

village and your competitor is watching you, so the organizations need high

performance.

So the output of the organization depends upon the feedback provided to the

employee timely. Especially the newcomer to the organization needs to understand

89

their jobs and their work setting. The longer-service employees also want positive

feedback on the good things they do. So the NBP is an organization where the

management feels about the employees.

The employees feel sense of belongingness in return. HRD section always takes this

opportunity to evaluate the performance of the employees. The appraisal system also

helps the management of the NBP to help the managers with placement, pay, and

other HR decisions. The HRD section of the NBP carries out the appraisal for the

following uses;

It allows the employee, the Manager to take necessary about the improvement of the

performance.

The system also helps in promotion and pays increase of the deserving employees

after their evaluation and also prepares the next person for the succession plan.

2. How performance reports are written

PERFORMANCE REPORT—WRITTEN

Employee: _______________

Date Hired: _______________

Job Title: _________________

Salary: __________

Date of Review: ___________

1. PERFORMANCE EVALUATION—INTERACTION WITH CO-WORKERS

__________________________________ _________________________________

__________________________________ _________________________________

2. PERFORMANCE EVALUATION—PROFESSIONAL ATTRIBUTES

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__________________________________ _________________________________

__________________________________ _________________________________

3. PERFORMANCE EVALUATION—QUALITY OF WORK

__________________________________ _________________________________

__________________________________ _________________________________

4. PERFORMANCE EVALUATION—EMPLOYEE OBLIGATIONS

__________________________________ _________________________________

__________________________________ _________________________________

5. PERFORMANCE EVALUATION—ADDITIONAL COMMENTS

__________________________________ _________________________________

__________________________________ _________________________________

Date of Next Evaluation: _____________________________________________

Employee Interviewer

E. Employee compensation & benefits

1. Type of compensation & benefits:

Compensation means all rewards that individual receives as a result of their

employment.

Employees of national bank of Pakistan received compensation & benefits in the

following way.

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Pay: money that an employee receives for performing a job.

Benefit: additional financial rewards rather then basic pay include paid vacations, sick

leaves, holidays, medical insurance.

Non financial rewards: non monitory rewards such as enjoyment of work performed

or a pleasant working environment.

Different types of compensation include:

Base Pay

Commissions

Overtime Pay

Bonuses, Profit Sharing, Merit Pay

Stock Options

Travel/Meal/Housing Allowance

Benefits including: dental, insurance, medical,

vacation, leaves, retirement, taxes

Besides a competitive financial package, they offer excellent working conditions, job

satisfaction, superior leadership, and a conducive environment for growth.

F. Organizational career management

1. Employee job changes

Job changes in the classified service must be made in accordance with the civil

service rules and regulations. Any person appointed or promoted must be certified as

qualified in accordance with and subject to the civil service rules and regulations.

The state personnel director shall. The state personnel director shall administer the

certification of all appointments and promotions.

2. Job changes with the organization

Job also change with the organization because when employee achieved a chance of

promotion in any other organization he will leave the current organization but there

are some rule that he can follow.

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Change Management Program: NBP has started an ambitious Change Management

Program to further train its employees to meet the challenges of present day

requirements

Promotion

The promotion policy introduced in 1979 was based on three parameters i.e.

(i) Qualification,

(ii) length of service and

(iii) Standard of service.

Separate marks were prescribed for each of the three parameters and, after

obtaining the minimum qualifying marks varying from cadre to cadre; one could

be promoted to the next higher position. While formulating the merit based

promotion policy introduced in 1999, the considered opinion was that separate

points should not be prescribed for qualification and length of service. The simple

reason for this thinking was that the minimum qualification stood, as prescribed at

induction for different levels of hierarchy. The other consideration for such views

was that in case the employee had increased his qualification for his better

performance as compared to other colleagues, then the said qualification would be

reflected on his performance and this would obviously have him rated better than

others. Views regarding the seniority of an employee were similar. Thus under the

merit based policy of 1999 the overall assessment of an employee was based on

the combination of (a) average of points earned by the employee in his PERs

during previous three years and (b) the points that he would earn in an evaluation

by the Promotion Committee. The awarding of points by the Promotion

committees, however, again reduced the exercise to a mechanical process as 60%

points were fixed for qualification, length of service & standard of service and

only 40% points could be awarded on objective criteria. Further improvements in

the policy are being planned.

Transfer

Transfers on request, however used to take place only on compassionate and medical

grounds while another reason was that these were initiated by the Bank for meeting its

business or administrative requirements i.e. filling up the vacant positions.

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Maintenance of office-wise seniority lists up to OG-1 (on the General Side) and up to

OG-2 (T.O) (on the Cash side) had also contributed to the lack of movement of

employees from one office to another. Resultantly all the employees become

permanently positioned in their place of work, whether the head office or the field

offices of the Bank. At the same time, there was much movement within the

unit/division of posting. Although instructions provided that an employee can remain

posted in one unit for up to 3 years and in a division for up to 6 years, yet some

offices used to frequently transfer their employees from one unit/division to another.

On the other hand, transfers from one department to another at the Head Office were

rare. This had further deteriorated the level of efficiency both at the head office and

the field offices.

With the objective of preparing staff to accept new challenges, acquire new skills and

diversified experience, the following transfer policy has been framed for all

categories/sides of employees (other than clerical & non-clerical staff of the Bank):

1. The seniority list of all OG-1 and above will be maintained on an all-Pakistan

basis.

However, all employees including those of Cash department shall remain transferable

from one office to another.

2. All transfers involving change in office up to OG-3 shall be made by the

Director Administration, OG-4 & above with the approval of the Managing

Director.

3. Employees on promotion as OG-4 and above shall invariably be transferred

from the office/department where they were working before their promotion.

4. An employee transferred from one office to another shall be allowed to seek

his posting back to his parent office or to the office of his choice subject to

administrative convenience immediately after completion of 3 years.

5. The Chief Manager shall not remain posted at one office for a period of more

than 3 years.

6. The shortage of employees at an office because of review of staff position

will be made good after calling options from the interested employees of the

Bank. If no such employees are available, the vacant positions will be filled

through transfers of employees from the offices where sufficient/surplus staff

is available. Duration of such transfers would be for a period of two years to

avoid inconvenience.

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Procedures

1. Employees are considered as candidates for transfer in the following order or

priority:

a. Eligible employees in same department as the job opening

b. Eligible employees in other departments who have requested a transfer

c. Eligible employees being considered for lay-off due to a reduction in force

2. Employees desiring a transfer will submit a written request for transfer to his/her

department head. The employee should identify the specific vacancy in which they

are interested. The department head will forward the request to the Department of

Human Resources for recommended action.

3. The Department of Human Resources will determine whether the desired job or a

suitable job opening exists. If a suitable job is available, the Department of Human

Resources will arrange for the employee's application to be reviewed by the

department in which the opening exists.

4. Employees will be allowed time off with pay for job interviews related to transfers.

5. The decision to affect the transfer will be made by the head of the department in

which the job opening occurs.

7. An employee who is transferred to a comparable job (lateral transfer) will

continue to receive his/her existing rate of pay.

Demotion

An employee of NBP may be demoted for violating the rules of the bank by a

behavior such as excessive lateness, misconduct, or negligence. In some cases,

though, an employee may be demoted as an alternative to being laid off, if the NBP is

facing a financial crisis.

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Notice: If an appointing authority intends to involuntarily demote an employee, the

appointing authority shall give prior written notice of the specific reasons for the

demotion to the employee.

Conditions: An appointing authority may demote an employee under any of the

following circumstances:

(1) The employee is not performing satisfactorily.

(2) The employee's position is reclassified downward.

(3) The demotion is requested by the employee and approved by the appointing

authority.

(4) The position occupied by the employee is abolished.

(5) The employee is displaced by the return to duty of another employee entitled

to the position.

(6) The employee is displaced by another employee with more seniority during a

reduction in force.

(7) The employee does not receive a satisfactory probationary service rating

3. Separations

An employee’s separation occurs when an employee ceases to be a member of

National bank of Pakistan.

The rate of employee separation in NBP is a measure of the rate at which employee

leave the bank.

a. Layoff:

When there is surplus of employees in bank then layoff occurs.

Layoff is the temporary suspension or permanent termination of employment of an

employee or a group of employees for business reasons, such as the decision that

certain positions are no longer necessary or a business slow-down or interruption in

work.

In NBP, all system are computerized therefore there are no need of staff in some

departments that’s why layoff occur there.

b. Termination

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Reasons for Termination:

Employment with the Association may be terminated for a variety of reasons:

•Resignation by the employee

•Employee illness and inability to work

•The conclusion of the contract for which the employee was employed

•Dismissal of the employee

•Other reasons

Procedure

1. Termination by the Employer

The Supervisor must:

a) Give the employee the required notice in writing.

b) Notify the General Manager of the termination of the employee and reason

for termination.

c) Ensure the termination shall not be harsh, unjust or unreasonable, and shall

proceed only after clause 2.8 Settlement of Disputes, Grievances,

Employee counseling and Disciplinary Action of the Certified Agreement has

been affected.

d) Complete the Termination Form and sign. The employee signature is not

required.

e) Forward the completed form to the Assistant Finance Officer for

processing.

f) Place of copy of the completed form on the employee’s personnel file.

2. Termination by the Employee

The Employee must:

a) Give the supervisor the required notice in writing.

The Supervisor must:

a) Accept and acknowledge the resignation.

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b) Notify the General Manager of the impending termination of the employee

and reason for termination.

c) Complete the Termination Form and sign. The employee signature is

required to sign the form also.

d) Forward the completed form to the Assistant Finance Officer for

processing.

e) Place a copy of the completed form on the employee’s personnel file.

c. Resignation

Immediately on receipt of resignation from the staff, the concerned Branch

Manager should fill up all columns up to 13 in the prescribed format and

forward the same to the Zonal Manager through his Controller, along with the

Resignation letter. However, since the Competent Authority to accept

resignation of the award staff working in branches is the Respective Zonal

Manager, concerned Assistant General Manager should submit the format duly

completed to the Zonal Manager

The following actions must be undertaken when a member of staff resigns

from their post in order to ensure that final salary payments are correct.

The Member of Staff

• must inform their line manager of their intent to resign in writing

giving the appropriate contractual notice period.

• The Line Manager

• agrees notice arrangements, leaving date and confirms annual leave

that is owing/owed with the member of staff. Where possible, any outstanding

annual leave owing should be taken prior to leaving.

• receives and forwards written resignation to HR along with

confirmation of:

a. The agreed leaving date

b. The annual leave position

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c. Notification of whether the member of staff is leaving the bank or

transferring to another department

• ensures that the member of staff returns their particulars on their last

day.

HR Office

• checks that the agreed leaving date and outstanding holiday

entitlement is correct

• acknowledges resignation letter in writing to the member of staff., cc

to Head of Unit; Line Manager; Payroll; Pensions; Management Accts; File

within 3 working days. The payroll monthly deadline must be met.

• inputs leaving date and reason for leaving on Resource Link and ends

the record

Payroll Office

• Must receive notification from HR by the monthly payroll deadline.

• processes the final salary payment and issues P45.

d. Retirement

Procedure:

1. HR Department writes to employee CC line manager advising retirement date

2. Line manager arranges informal meeting with employee to discuss plans and

confirm right to request continued working.

3. Line manager writes to employee confirming meeting CC HR.

4. Employee chooses to retire at 65.

5. Normal retirement procedures apply.

G. Labor management relations

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In NBP there is very good relation between labor and management. They cooperate

with each other. HR department take care of their unions opinion.

CRITICAL ANALYSIS

It is true that bank is trying to adopting computerized system but their most of staff is

unable to use computerized system or not familiar with computer.

There are no proper facilities in bank for customer. No proper facilities for old age

people, they face so many problems in bank.

There is no any shop for bank staff so that they can bring something for themselves or

their guests in break time.

Their all system is manual so much time waste in different process.

There is also an electricity problem in this bank.

There is reduction of staff in some departments, so they complete almost their work

from internees.

There is reduction of law & order, so sometimes branch faces so many problems

especially in the dates of pensions.

All types of pensioners are treated same day that’s why this creates problems.

The balance sheet shows the good position of the bank and income statement

provides us a brief look over it success during the year. Although income statement

showing profit during the year but still there are few thing that should be improved

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SWOT ANALYSIS

SWOT analysis is an acronym that stands for strengths, weakness,

opportunities, and threats SWOT analysis is careful evaluation of an

organization’s internal strengths and weakness as well as its environment

opportunities and threats.

“SWOT analysis is a situational which includes strengths, weaknesses,

opportunities and threats that affect organizational performance.”1

“The overall evaluation of a company strengths, weaknesses, opportunities

and threats is called SWOT analysis.”2

In SWOT analysis the best strategies accomplish an organization’s mission by:

1. Exploiting an organizations opportunities and strength.

2. Neutralizing it threats.

3. Avoiding or correcting its weakness.

SWOT analysis is one of the most important steps in formulating strategy

using the organization mission as a context, managers assess internal strengths

distinctive competencies and weakness and external opportunities and threats.

The goal is to then develop good strategies and exploit opportunities and

strengths neutralize threats and avoid weaknesses.

STRENGTHS

These are strengths of national bank of Pakistan.

1. NBP one of the largest financial institutions of Pakistan with eight million

of customer base NBP holds 24.6% share of time and demand deposits in

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the country. Local currency deposits comprise 67% of bank's total deposits

while foreign currency deposits account for the rest.

2. NBP has an extensive domestic branch network of 1232 (according to the

latest data) branches located all over Pakistan. The Bank also has a

presence in 18 international locations including the USA, United

Kingdom, Europe and the Far East.

3. NBP's total assets stood at Pak Rs.370 billion on December 2000. This

included total earning assets of about Pak Rs.268 billion with gross loan

portfolio of Pak Rs.140 billion. The bank also has an investment portfolio

of Pak Rs.91 billion, which comprises treasury securities, corporate bonds,

shares and other securities.

4. NBP cash provision as percentage of non performing loans equal to 60%

this coverage factor for the non performing loans is the highest amongst

the nationalized commercial bank.

5. NBP is working as right arm government of Pakistan as it is responsible

for all claims of government for recovery as well as payment. All

depositor of NBP are in relief that their money security is guaranteed by

government of Pakistan.

WEAKNESSES

1. NBP staff especially at lower considers their work as burden. They usually

waste time in other task a part in performing their duty. Using government

property for there own need. They are reluctant to accept change brought by

latest restructuring efforts.

2. The general out look and interior layout of branches are not as required

according to modern banking

3. NBP bearing up large burden in running those branches, which are not

producing any income but keep on adding expenditure.

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4. NBP is relying on its traditional sources of income it has not taken benefit

from innovation in banking like introducing retail banking or consumer

banking and using any type of scheme to generate more deposits and

producing more advances. Further, more don’t even continue its credit card

due mismanagement and lack of control.

5. NBP is far behind in offering modern banking facility like automated teller

machines then other commercial bank in Pakistan as only eighteen branches in

all over country have this facility.

6. NBP has only forty-four on line branches. While from remaining branches

data gathering is time consuming, and not fool proof. Quantum of settlement

within different branches is pending because of this updating daily record is

becoming very difficult.

7. Customers have to fallow long lengthy procedure for opening of account as

well applying for debt. Which discourage most of the people to invest in NBP.

8. In NBP, most of the time merit not has importance in hiring of employees.

Such practices are black spot on the face of bank and resulted big losses and

fraudulent acts by NBP own employees.

OPPORTUNITIES

1. The world today has become a global village because of advancement in

technologies, especially in communication sector. More emphasis is now

given to avail the modern technologies to better the performances. NBP can

utilize the electronic banking opportunity to ensure online banking 24 hours a

day. This would give the competitive edge over others.

2. Because of the need of micro financing in the market, there are lot of

opportunities in this regard. Others banks have already initiated, now the time

has arrived when the NBP must realize it and take on step to cater an ongoing

demand.

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THREATS

Following are the major threats which national bank of Pakistan is facing:

1. Major threats NBP facing is from its competitor especially from

denationalized commercial bank. In which MCB is on the top of the list, The

Bank provides 24 hour banking convenience with the largest ATM network in

Pakistan covering 15 cities with over 100 ATM locations.

2. Retail banking and consumer banking resulting in the products such as credit

cards, housing finance and automobile finance lending to small individual

consumers, and purchases of automobiles, housing, and consumer goods are

generally made on a cash basis. These are causing another threat, if not

counter will result in significance loss of customers

3. Recently banks and other financial institutions have introduced innovative

schemes to attract deposits, like gift cheque scheme by MCB. These schemes

offer prizes on short and long term fixed deposits, through lucky draws.

4. Now banks are using technology which covers the distance no matter how far

away any one, through a satellite based, on-line real-time banking system and

by offering telephone banking, electronic funds transfer, E-Banking and other

modern facilities.

CONCLUSIONS & RECOMMENDAIONS







After the completion of my internship report I draw the following.

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1. It appears a lengthy process of sanctioning advance.

2. It looks the staff member are not properly trained

3. It seems the promotion is not given in the due time.

4. It appears that large amounts paid on administration cost.

5. It shows that there is lack of recovery system

6. It seems that there is no net working.

7. It seems that there shall be a great the rush days for the customers as well as

for the staff members If the No of counter are limited or very few

8. It might not be possible for every borrower to repay the money in due time.

SUGGESTIONS

1. NBP major fault is that wasn’t keeping its pace with on going changing in

banking industry unlike other bank. Now this bank combining all it power and

trying to approach other banks.

2. Latest reorganizing efforts are necessary to make it cost effective also making

its facility accordingly to modern banking. These must continue.

3. Bank management has to put its all effort to change the prevailing culture of

the bank and to put the foundation stone of business oriented culture. In which

employees give important to the bank and its customer.

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4. To attract the customer in the future NBP have to make extensive effort to

give facilities of retail and consumer banking. Plus the technology in the

banking which will be necessary for future banking is another week area need

to be stressed.

5. The outlook and interior lay out of the branches is another thing which needs

to be improved.

6. The procedure of taking services from the bank must be made easier and

straight forward not involving long difficult procedure for simple task.

To remain in the market bank need to be vigilant in the eyes of customer. One way is

through promotion efforts, so that people aware about he services of the banking and

any addition which the bank as made in the portfolio of its services.

REFERENCES

I collect this information from,

1. National Bank, Annual Reports

2. State Bank of Pakistan Prudential Regulation for Corporate and Commercial

Banking

3. State Bank of Pakistan BPRD Circulars

4. Dawn Newspapers for updated information

5. Instruction Circulars of National Bank Limited

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6. Economic Reviews for Banks and their activities.

7. State Bank of Pakistan, Website, http://www.sbp.gov.pk

8. National Bank website, http://www.nbp.com

I also visit & complete 6 weeks internship in national bank of Pakistan civil line

Jhelum branch for collecting data.

Annexes

List of Annexes

Annex 1

Overview of the organization

1.1 Brief history

1.2 Nature of the organization

1.3 Business volume

1.4 Product lines

1.5 Competitors

Annex 2

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Organizational structure

1.1 Organizational Hierarchy chart

1.2 Number of employees

1.3 Main offices

1.4 Comments on the organizational structure

Annex 3

Plan of your internship program

1.1 A brief introduction of the branch where you did your internship

1.2 Starting and ending dates of your internship

1.3The departments in which you got training and the duration of your training

Annex 4

Training program

1.1 Introduction of all the departments

1.2 Detailed description of the department you worked in OR Detailed description of

the project assigned.

Annex 5

Structure of the HRM Department

1.1Department hierarchy

Annex 6

Human resource management process in the organization:

1A. Human resource planning and forecasting

1.1HRP process

1.2 Forecasting HR requirements

1.3 Methods to forecast HR needs

2B. Employees recruitment & selection

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2.1 Sources of candidates

2.1 Internal sources

2.2 External sources

2.3 Employment selection process

3C. Training & development

1.1Training need assessment

1.2Employee development

4D. Performance management

1.1 Setting performance standards & expectations

1.2 How performance reports are written

5E. Employee compensation & benefits

1.1 Type of compensation & benefits

6 F. Organizational career management

1.1Employee job changes

1.2 Job changes with the organization

a. Promotion

b.Transfer

c. Demotion

Separations

a. Layoff

b. Termination

c. Resignation

d. Retirement

7G. labor management relations

Annex 7

1. Critical analysis

Annex 8

1. SWOT analysis of organization in the business sector

Annex 9

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1. Conclusion & recommendations for improvement

Annex 10

1. References & sources used

I also visit these links for getting information of NBP,s annual reports.

1. http://www.nbp.com.pk/An_Report.htm

2. http://www.nbp.com.pk/AnReport2004.htm

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http://www.nbp.com.pk/AnReport2004.htm

http://www.nbp.com.pk/An_Report.htm

Documents

Internship Report of NBP