Internship Report of National Bank Limited

8/4/2019 Internship Report of National Bank Limited

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Table of contents

Executive summary 04

Mission statement 05

Vision 07

Senior Management 09

Overseas Branches 12

Domestic Branches 13

NBP loan 15

Services 17

Investments 20

Deposit products 23

Exchange rates 25

SWOT analysis 27

Performance analysis 30

Comparative analysis 36

Bank charges 38

Work done by Internee 61

Problems faced by Branch 65

Bibliography 68

1. Executive Summary

This report is based on internship in National Bank of Pakistan branch name. It is afamous and reputed bank of Pakistan. National Bank of Pakistan maintains firstposition in banking sector in Pakistan. This report is based on the activities which are



performed in this bank. This report contains marketing analysis, competitive analysis,SWOT analysis, bank tariffs and exchange rates of National Bank of Pakistan. Thereare also stated the activities which I performed during my internship in the branch. Inthis report also discuss the industry analysis of banking system in Pakistan. There arealso mentioned the way of investment, rates of investment, all types of financing and

loans facilities the National Bank of Pakistan provides. The problems in this branchare also discussed. This report also intimates about the daily reserves which arerequired by the branch to meet the need of its daily transactions.



2.1. Mission Statement

To be recognized in the market place by Institutionalizing a merit & performanceculture, Creating a powerful & distinctive brand identity, Achieving top-tier financialperformance, and Adopting & living out our core values.

http://www.nbp.com.pk/About_Us/CoreValues.htm






2.2. Core Values

2.2.1. 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.

2.2.2. We shall work to…

Meet expectations through Market-based solutions and products.

Reward entrepreneurial efforts.

Create value for all stakeholders.

2.2.3. 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 aremeasures of true success.

2.2.4. We have confidence that tomorrow we will be…

Leaders in our industry.

An organization maintaining the trust of stakeholders.

An innovative, creative and dynamic institution responding to thechanging needs of the internal and external environment



2.3. Vision

To be the pre-eminent financial institution in Pakistan and achieve market recognitionboth in the quality and delivery of service as well as the range of product offering

2.4. Senior management

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



Shahid Anwar Khan SEVP & Group Chief, Commercial & Retail Banking Group

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

Muhammad Sardar Khawaja SEVP & Group Chief, Audit & Inspection Group

S. M. Rafique SEVP & Secretary Board of Directors

Imam Bakhsh Baloch SEVP & Group Chief, Compliance Group

Ziaullah Khan SEVP & Group Chief, Special Assets Management Group

Amim Akhtar EVP & PSO to the President

Javed Mehmood EVP & Group Chief, Risk Management Group

Muhammad Nusrat Vohra EVP & Group Chief, Treasury Management Group

Nadeem A. Dogar EVP & Group Chief, Information Technology Group

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

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

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

Mrs. Uzma Bashir Group Chief, Organization Development & Training Group

Syed Farhan Ahmed Financial Controller & Divisional Head Financial ControlDivision

2.5. Corporate and financial reporting framework

(Code of Corporate Governance)

The board is fully aware of its responsibilities established by the Code of CorporateGovernance issued by the Securities & Exchange Commission of Pakistan (SECP).They are pleased to give the following declarations/statements to comply with therequirements of the Code.



1. The financial statements (Balance sheet, Profit and Loss Account,Cash Flow Statement, Statement of Changes in Equity and notes formingpart thereof), prepared by the management of the bank give theinformation required by the Companies Ordinance, 1984 in the mannerso required and respectively give a true and fair view of the state of the

bank's affairs as at December 31, 2002 and of the results of itsoperations, changes in equity and its cash flows for the year then ended.

2. Proper books of accounts have been maintained.

3. Appropriate accounting policies have been consistently applied in thepreparation of the financial statements and accounting estimates arebased on the reasonable and prudent judgment.

4. Approved Accounting Standards have been followed in preparation of

the financial statements and there is no departure from the saidstandards.

5. The system of internal control is sound in design and has beeneffectively implemented and monitored throughout the year. The Boardis responsible for establishing and maintaining the system of internalcontrol in the bank and for its ongoing monitoring. However, such asystem is designed to manage rather than eliminate the risk of failure toachieve objectives, and provide reasonable but not absolute assuranceagainst material misstatements or loss.

The process used by the Board to review the efficiency and effectiveness of thesystem of internal control includes, the following:

The Board has formed an audit committee comprising of three nonexecutive directors. The audit committee has written terms of referencein the form of a charter, which has been approved by the Board of Directors. The committee is responsible for the oversight of the internalaudit function and reviews its approach and methodology from time totime. It also receives and reviews the internal and external audit reports

relating to the internal control, accounts and related matters. Thecommittee on a continuous basis reviews the material controlweaknesses and areas of concern and actions to be taken by theexecutive management to address these issues.

Internal audit department of the bank conducts the audit of allbranches, regions and groups at head office level on ongoing basis to



evaluate the efficiency and effectiveness of internal control system andproper follow up of irregularities and control weaknesses is carried out.

The Board receives confirmations/representations from all group andregional heads on annual basis confirming effectiveness of the internal

control system established and maintained by them within their function.

The principal features of the bank's control framework include:

The bank has clearly defined organizational structure which supportsclear lines of communications and reporting relationships.

There exists a properly defined financial and administrative power of various committees and key management personnel, which supportsdelegation of authority and accountability.

The bank has effective budgeting system in place. Annual budget of the bank is approved by the Board and monthly comparisons of actualresults with the budget are prepared and reviewed by the seniormanagement.

The bank has a comprehensive framework of written policies and procedures on allmajor areas of operations such as Credit, Treasury Operations, Finance, Internal auditand Compliance approved by the Board.

There are no significant doubts about the bank's ability to continue as agoing concern.

There has been no material! Departure from the best practices of thecorporate governance as detailed in the listing regulations.

Key operating and financial data is available in the annual report.

The number of board meetings held during the year were 14 andattended by the directors as follows:

Syed Ali Raza 14

Dr. Waqar Masood Khan 10

Kamran Y. Mirza 8

A. Razzak Tabba 12



Rizwan A. Kehar 12

Qazi Faez Issa 10

Sheikh Humayun Sayeed 12

Book value of investments of Employees' Pension Fund as atDecember 31, 2002 (un-audited) is Rs. 6,317.705 million.

The pattern of shareholding as required by the code is as follows:

Associated companies, undertakings and related parties Total No. of

shares held

Taurus Securities Limited 2,015

National Bank of Pakistan Trustee Department -NIT 1,009,842

Investment Corporation of Pakistan 1,519,095

16 Overseas Branches

4 Representative Offices

1 Subsidiary

1 Joint Venture

29 Regional Offices

1,189 Branches

130 Online Branches

4 Subsidiaries

2.6. Overseas Branches

2.6.1. America and Europe Region

USA

http://www.nbp.com.pk/BranchNetwork/AmEuro.htm





Canada

Germany

France

2.6.2. Far East Region

Hong Kong

Japan

South Korea

China

2.6.3. Middle East, Africa & South Asia Region

Bahrain

Egypt

Bangladesh

EPZ

2.6.4. Central Asian Republics

Afghanistan

Turkmenistan

Kyrgyz Republic

Kazakhstan

Uzbekistan

Azerbaijan

2.7. Domestic Branches

2.7.1.Sind







http://www.nbp.com.pk/BranchNetwork/FarEast.htm








http://www.nbp.com.pk/BranchNetwork/MESA.htm








http://www.nbp.com.pk/BranchNetwork/CAsia.htm

































Sahiwal

Sargodha/ Sheikhupura

2.7.3. NWFP

Abbottabad/ Mansehra

Bannu/ D.I. Khan

Kohat / Mingora

Mardan

Peshawar

2.7.4. Baluchistan

All Branches

2.7.5. Azad Kashmir

Muzaffarabad

Mirpur

2.8. NBP Student Loan Scheme

http://www.nbp.com.pk/BranchNetwork/Bahawalpur.htm


http://www.nbp.com.pk/BranchNetwork/Sargoda.htm


http://www.nbp.com.pk/BranchNetwork/Abbottabad.htm


http://www.nbp.com.pk/BranchNetwork/Bannu.htm


http://www.nbp.com.pk/BranchNetwork/Kohat.htm




http://www.nbp.com.pk/BranchNetwork/Peshawar.htm


http://www.nbp.com.pk/BranchNetwork/Baluchistan.htm


http://www.nbp.com.pk/BranchNetwork/Mirpur_Muz.htm
















Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002budget speech, aSTUDENTS LOAN SCHEME (SLS) for Education was launchedby the Government of Pakistan in collaboration with major commercial banks of Pakistan (NBP, HBL, UBL, MCB and ABL). Under the Scheme, financial assistanceis provided by way of Interest Free Loans to the meritorious students who have

financial constraints for pursuing their studies in Scientific, Technical andProfessional education within Pakistan.

The Scheme is being administered by a high powered committee comprising DeputyGovernor, State Bank of Pakistan, Presidents of the commercial banks and DeputySecretary, Ministry of Finance, Government of Pakistan.

• The objective of the Students Loan Scheme is to provide financial assistance tothe meritorious students of insufficient means who have obtained 70% marks in thelast public examination and are unable to pursue their studies within Pakistan due tofinancial difficulties.

• Loans facility is available to those students who are nationals of Pakistan includingNorthern Areas, Federally Administered Tribal Areas and Azad Jammu and Kashmirand of age not exceeding 20 years for graduation, 30 years for post-graduation and 35years for PhD at the time of admission.

• 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 first employment or one year from thedate of completion of studies, which ever is earlier

• Loan is granted only to those students who have been admitted to the approvedunder noted Affiliated Colleges /Universities.

• Under the Scheme, loans are available in the following subjects.

Engineering

Electronics

Oil Gas & Petro-Chemical Technology

Agriculture

Medicine

http://www.nbp.com.pk/index.htm



http://www.nbp.com.pk/StudentLoan/SLSAffiliatedCollegesUniversities.pdf







Physics

Chemistry

Biology, Molecular Biology & Genetics

Mathematics

Other Natural Sciences

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

Computer Science/Information System and Technologyincluding hardware.

Economics, Statistics and Econometrics

Business Management Sciences

Commerce

• The facility under this Scheme is restricted to the studies in the above-mentionedsubjects only or such other subjects as may be approved by the Apex Committee from

time to time.• The amount of loans under the Scheme covers the cost of fee, books and boardingfor the entire period of study.• Schedule Fee and boarding expenses excluding meal charges is disbursed directly tothe University/College.• The amount of procurement of textbooks is disbursed directly to the student. • The students desirous of availing loan under the Scheme may apply on prescribedForm for financial assistance subject to he or she has got admission on merit throughnormal procedure in the Universities/ Colleges afore-mentioned.

• Application Forms are available from the designated branches. • Applicants are required to submit/send their applications duly completed in all

respect, to the designated branches indicated against Universities/ Colleges.

• Those students who have already availed this facility last year need not to apply.

http://www.nbp.com.pk/StudentLoan/Application%20form%20SLS.pdf










3. SERVICES

3.1.

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

3.2. 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 systemhas built-in features of computerized test keys, which eliminates the manual

application of tests that often cause delay in the payment of home remittances. TheSWIFT Center is operational at National Bank of Pakistan with a universal accessnumber NBP-APKKA. All NBP overseas branches and overseas correspondents(over 450) are drawing remittances through SWIFT.

Using the NBP network of branches, you can safely and speedily transfer money foryour business and personal needs.

3.3. LETTERS OF CREDIT

NBP is committed to offering its business customers the widest range of options in thearea of money transfer. If you are a commercial enterprise then their Letter of Creditservice 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.

3.4. TRAVELER'S CHEQUES

3.4.1. Negotiability:

Pak Rupees Traveler‟s Cheques are a negotiable instrument

3.4.2. Validity:



There is no restriction on the period of validity

3.4.3. Availability:

At 700 branches of NBP all over the country

3.4.4. Encashment:

At all 400 branches of NBP

3.4.5. Limitation:

No limit on purchase

3.4.6. Safety:

NBP Traveler‟s Cheques are the safest way to carry our money

3.5. PAY ORDER

NBP provides another reason to transfer customer‟s money using their facilities. Their pay orders are a secure and easy way to move customer‟s money from one placeto another. And, as usual, their charges for this service are extremely competitive.

3.5.1. Issuance of Pay order

1. for NBP Account Holder

Rs. 50/- (Flat)

2. for NBP Non-Account Holder

Rs. 100/- (Flat)

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

3.5.2. Issuance of duplicate Pay order

1. for NBP Account Holder

Rs. 100/- (Flat)



2. for NBP Non-Account Holder

Rs. 150/- (Flat)

3.6. MAIL TRANSFERS

Move your money safely and quickly using NBP Mail Transfer service. And theyalso offer the most competitive rates in the market.

3.7. FOREIGN REMITTANCES

To facilitate its customers in the area of Home Remittances, National Bank of Pakistan has taken a number of measures to:

Increase home remittances through the banking system

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

3.7.1. New Features:

The existing system of home remittances has been revised/significantly improved andwell-trained field functionaries are posted to provide efficient and reliable homeremittance services to nonresident Pakistanis at 15 overseas branches of the Bank besides Pakistan International Bank (UK) Ltd., and Bank Al-Jazira, Saudi Arabia.

Zero Tariffs: NBP is providing home remittance services without anycharges.

Strict monitoring of the system is done to ensure the highest possiblesecurity.

Special courier services are hired for expeditious delivery of homeremittances to the beneficiaries.

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



3.8.1. National Income Daily Account (NIDA)

The scheme was launched in December 1995 to attract corporate customers. It is acurrent account scheme and is part of the profit and loss system of accounts inoperation throughout the country.

3.8.2. Effective 23rd December 2004 National Income Daily Account (NIDA)

Slab Rate

Rs. 2 Million & above but below Rs. 25 Million 1.00 %

Rs.25 Million & above but below Rs .50 Million 1.10 %

Rs.50 Million & above but below Rs.100 Million 1.30 %Rs.100 Million & above but below Rs. 250 Million 1.50 %

Rs.250 Million & above but below Rs. 500 Million 1.75 %




Rs.5000 Million & above 2.75 %

3.9. EQUITY INVESTMENTS

NBP has accelerated its activities in the stock market to improve its economic baseand restore investor confidence. The bank is now regarded as the most active anddominant player in the development of the stock market.

3.9.1. 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, whichwould result in better returns offered to account holders.

3.10. COMMERCIAL FINANCE



Let them help make your dreams become a reality

Their dedicated team of professionals truly understands the needs of professionals,agriculturists, large and small business and other segments of the economy. They arethe customer‟s best resource in making NBP‟s products and services work for them.

3.11. TRADE FINANCE OTHER BUSINESS LOANS

3.11.1. AGRICULTURAL FINANCE

3.11.2. CORPORATE FINANCE

3.11.1. AGRICULTURAL FINANCE

NBP provides Agricultural Finance to solidify faith, commitment and pride of farmerswho 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 tohelp 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, thushelping 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

Help farmers utilize funds efficiently to further develop and achievebetter 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

http://www.nbp.com.pk/lAgriFinance



http://www.nbp.com.pk/lCorpFinance







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 arenewal basis.

Operating loans

Land improvement loans

Equipment loans for purchase of tractors, farm implements or anyother 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.

3.11.2. 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 – 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-terminvestment 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 their 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 strongrelationships not only with borrowers but also with bank investors. Because theyunderstand their syndicate partners‟ asset criteria, they help borrowers meet

substantial financing needs by enabling them to reach the banks most interested inlending to their particular industry, geographic location and structure throughsyndicated debt offerings. Their syndication capabilities are complemented by theirown capital strength and by industry teams, who bring specialized knowledge to thestructure 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‟stotal financial position right from your desktop computer. They will also be able totake advantage of NBP outstanding range of payment, ejection, liquidity andinvestment services. In fact, with NBP, you‟ll be provided everything, which takes tomanage your cash flow more accurately.

3.12. INTERNATIONAL BANKING

National Bank of Pakistan is at the forefront of international banking in Pakistanwhich is proven by the fact that NBP has its branches in all of the major financial

capitals of the world. Additionally, NBP have recently set up the Financial InstitutionWing, which is placed under the Risk Management Group. The role of the FinancialInstitution Wing is:-

To effectively manage NBP‟s exposure to foreign and domesticcorrespondence



Manage the monetary aspect of NBP‟s relationship with thecorrespondents to support trade, treasury and other key business areas,thereby contributing to the bank‟s profitability

Generation of incremental trade-finance business and revenues

3.13. NBP offers:

The lowest rates on exports and other international banking products

Access to different local commercial banks in international banking

3.14. EXCHANGE RATES

Rate Sheet

Treasury Management Group

September 1, 2006

Country Selling Buying sight 203/2006

U.S.A 59.85 59.65 59.53 Rates for Currency Notes & TCs

U.K 110.18 109.82 109.55 Selling Buying

EURO 74.76 74.51 74.41 U.S.A 60.45 58.94

CANADA 50.22 50.06 49.92 SAUDI ARABIA 16.12 15.71

SWITZERLAND48.45 48.29 48.16 U.K 111.29 108.46

AUSTRALIA 45.87 45.72 45.60 JAPAN 0.5528 0.5386

SWEDEN 8.04 8.01 7.99 EURO 75.51 73.67

JAPAN 0.5474 0.5455 0.5441

NORWAY 9.54 9.51 9.49

SINGAPORE 35.73 35.61 35.52 Libor for Calculating Interest on Special USD Bonds

DENMARK 10.03 9.99 9.97 Libor Value



SAUDI ARABIA 15.96 15.91 15.86 6 Moths USD 3.9963 06-Sep-05

HONGKONG 7.70 7.68 7.66 Interest Rates on Old FCY Deposits

CHINA 7.41 7.39 7.37 For 3 Months & Over but Less then 6 Months

KUWAIT 204.97 204.28 203.74

MALAYSIA 15.89 15.84 15.80 USD 0.1000

NEWZEALAND 42.42 42.27 42.16 GBP 0.1000

QATAR 16.45 16.39 16.35 JPY 0.0000

U.A.E 16.30 16.24 16.20

KR. WON 0.0584 0.0582 0.0581

THAILAND 1.459 1.454 1.450

Conversion rates for Frozen FC Deposits, DBC/FCBC, Special USD Bond

USD GBP EUR JPY

59.7163 110.3677 74.9917 0.5484

Bill Buying Rates per Unit of Currency

30 Days 60 Days 90 Days 120 Days 150 Days 180 Days

USD L/C 59.41 59.16 58.91 58.66 58.40 58.14

GBP L/C

109.24 108.71 108.18 107.66 107.14 106.63

EUR L/C 74.29 74.08 73.87 73.66 73.45 73.25



3.15. SWOT Analysis

3.15.1. Strengths



Western union facility:

National Bank of Pakistan is only one bank which has the facility of Western union.In this particular scheme money is transfer in Pakistan from abroad. This is the fastestway to money transfer. You can receive the money from bank to see the name and

password of particular client.

ATM finder:

There is also strength of NBP that they are found the ATM. They now provide thisfacility to the customers.

Government‟s bank:

In commercial banking system NBP is only the government bank. They make their

policies according to the government‟s rules and regulations. It enjoys its position inthe market of banking system in Pakistan. Government of Pakistan also facilitating theNational Bank of Pakistan.

Customer satisfaction:

Because of government‟s bank, it is enjoying the customer‟s satisfaction. Customersfeels secure their money in NBP.

Online banking:

There is also strength of NBP that 130 branches are online. It helps the speedyservices giving to the customers. There is also help in checking the balances and dailytransactions just at one key press.

Employee‟s loyalty:

Employees are very much loyal to NBP. Employee‟s turnover is very low in NBP.Very few employees are leaving the jobs in NBP. So it is very big strength that youremployees are loyal to your organization.

Wide area of services:

They provide the wide area of services. They offer no. Of services relating to thebanking system like, pension to retired government employees, traffic challans, feesreceived of AIOU, farms of AIOU, utilities bills, deposits, sales tax , withholding tax,property tax, and various loan schemes.



3.15.2. Weakness

Lack of communication between employees:

During the internship in NBP I found the problem of lack of communication between

the employees and management. They have not very much understanding with eachother and not share the work of each other.

Punishment is not very strong for employees:

Punishment threat is not very strong for employees. Some employees are not veryprofessional in their field but top management not takes the action against suchemployees.

Public dealing is not very effective:

Public respect is not very effective in NBP. Employees are not taking care of thecustomers, especially in pension and bills department.

Staff shortage:

There is also weak point for NBP that staff is very short and more staff is required tomeet the needs of the branch work. They help from internees.

Lack of respect of seniors:

They are not a healthy sign for NBP that respect of seniors is not up to the manners.

Juniors try to avoid the seniors and no take the help from them.

3.15.3. Opportunities

Growing banking system:

Nowadays banking system is growing quickly so NBP have opportunities to improvethe standard and get the more share in the market.

NBP have government back:

In growing era there is a chance for NBP to improve itself and increase the shares inthe market because it is most trustable due to government‟s bank.

Increase in economic activities:



The economic activities are increase nowadays, so banks are contributes more ineconomic activities. Banks are played role in trade and commerce. So the business of commercial banks is increase.

3.15.4. Threats

Increase in no. of banks:

Increase in no. of banks is a threat for National Bank of Pakistan. No. of private banks(commercial and private) are operating their business and provide the same facilities.So increase in no. of banks is a threat for NBP.

Modern type of banking:

Modern and computerized banking is required to fulfill the customer‟s need. So

maximum branches of NBP are worked in old traditional ways.

Highly skilled people and management required to meet the newstandard of banking. In NBP some employees are totally irresponsibleand lack of complete knowledge of banking system. So these employeesare creating continuous problems in the system of NBP.

The whole structure change to online :

NBP have wide network of branches. Only 130 branches are online, so it is very

difficult and time consumed to convert all branches to online system. So there is alsorisk involves that if one commuter of one branch suffers in problem, all system and allcommuters of all branches must be turnoff.



4. Performance Analysis

4.1. Financial Performance

In 2002, NBP increased its pre-tax profit to Rs. 6,045 million from Rs. 3,016 millionin 2001, an increase of over 100%. The improved profitability was achieved due to acombination of higher interest revenue, enhanced fee income and run off of theamortization of the 1997 Golden Handshake Scheme. Prudent addition to loan lossreserves was made which continues to improve the cash coverage for non-performingloans.

All key financial and operating ratios demonstrated improvement. Cost/ income ratiowas 0.44 (excluding one off provision of Rs. 832 million for benevolent fund and Rs.513 million for charge for special separation package) as against 0.52 of the last year.Pre-tax return on equity was 45.27% as compared to 25.85% of the current year and isimpressive by any yardstick. Pre-tax return on assets improved to 1.43% as against0.77% of last year. Capital adequacy ratio of the bank is 14.5%, which is 38% higheras compared to 10.52% of last year.

Deposits of the bank increased by Rs. 12 billion. While there was increase in privatesector loans due to adjustment / repayment of loans by large public sector entities andsubstantially lower commodity operations borrowings, advances decreased by Rs. 30billion.

4.2. Industry analysis

Banking is one of the most sensitive businesses all over the world. Banks playvery important role in the economy of a country and Pakistan is no exemption.



Banks are custodian to the assets of the general masses. The banking sectorplays a significant role in a contemporary world of money and economy. Itinfluences and facilitates many different but integrated economic activities likeresources mobilization, poverty elimination, production and distribution of public finance. It is purchase of car or building of a home banks are alwaysthey‟re to serve you better. It is play ground or any educational or healthysocietal activities the money of banks nurtures them. It is an industrial projector agricultural development of the country the sponsor-ship of banks is verymuch involved. Banks play very positive and important role in the overalleconomic development of the country.

Pakistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specializedagencies to cater for special requirements of specific sectors. The country startedwithout any worthwhile banking network in 1947 but witnessed phenomenal growthin the first two decades. By 1970, it had acquired a flourishing banking sector.

4.2.1. Comparative Study of Domestic Banking Industry

Nationalization of banks in the seventies was a major upset to domestic bankingindustry of the country, which changed the whole complexion of the banking industry.With irrational decision at the top all the commercial banks were made subservient tothe political leadership and the bureaucracy. Specialized banking institutions were

already working in the public sector. The new accountability paradigm changed thebusiness ethics in the banking industry, and with this change started the disaster.Nationalization of banking industry was accompanied by violent changes in theexternal value of rupee. The commercial banks thus lost their assets managementequilibrium, initiative and growth momentum. They ceased to be a business concernand became big bureaucracies. This was accompanied by indiscreet loaning underpolitical pressure. They suffered from three terminal diseases: non-performing loans;higher intermediation cost; and loss of initiative and entrepreneurship. The rise toLabor Unions and Officers Associations made life tough and working conditions uglyto honest, dedicated and industrious workers in the realms of domestic bankingindustry.

The era of nineties was the climax of privatization, deregulation andrestructuring in the domestic banking industry and financial institutions. TheMuslim Commercial Bank was the first bank to privatize. Followed by AlliedBank limited, United Bank Limited and now the Habib Bank Limited havebeen privatized. One thing good for that particular period was the recruitment



of fresh officers in the domestic banking industry through well-organizedpolicies of Banking Council. With the decay of Banking Council there wasflood of insincere, nonprofessional, incompetent candidates directly appointed/ recruited in all the domestic banks of the country.

4.2.2. Public Sector Commercial Banks

National Bank of Pakistan NBP

First Women Bank Limited FWB

The Bank of Khyber KB

The Bank of Punjab BOP

The government of Pakistan permitted small private sector banks to operate, whichindulged in doubtful policies to promote business. The public sector banking, whichconstituted the backbone, thus continued to suffer because of their approach, size andcarried over liabilities. Mehran Bank is the prime example of that kind of lax bankingin the country, which ultimately merged into National bank of Pakistan i.e. last resortof domestic banking industry.

4.2.3. Local Private Banks

Askari Commercial Bank Limited

Bank Al-Falah Limited

Bank Al Habib Limited

Bolan Bank Limited

Faysal Bank Limited

Metropolitan Bank Limited

Platinum Commercial Bank Ltd

Prime Commercial Bank LimitedSaudi Pak Commercial Bank Ltd

PICIC Commercial Bank Limited

Soneri Bank Limited

Union Bank Limited

Muslim Commercial Bank Limited

Allied Bank of Pakistan



Union Bank Limited

Mashreq Bank

In the meanwhile, western banks started entering into the business. They, with thesupport of ruling elite, concentrated on the big business, leaving the routine businessto the local banks. This reduced the profitability of the local banks.

4.2.4. Foreign Banks

ABN Amro Bank Al Baraka Islamic Bank

American Express

The Bank of Tokyo Mitsubishi

CITI Bank

Credit Agricole Indo Suez

Deutsche Bank

Doha Bank

Emirates Bank

Habib Bank A. G. Zurich

Hong Kong Shangai Banking

CorporationIFIC

Mashreq Bank PJSC

Oman Bank

Rupali Bank

Standard Chartered Bank

4.2.5. Specialized Banks

Zari Tarqiati Bank Ltd.

Industrial Development Bank of Pakistan

Punjab Provincial Cooperative Bank Limited



There are 17 listed banks in Pakistan 2004. Four banks are still not listed, which areHabib Bank, United Bank, Allied Bank of Pakistan, Dawood Bank. StandardChartered Bank, Citibank, Deutsche Bank and ABN AMRO Bank are main foreignbanks in the country. These four banks continue to enjoy a significant share in themarket, both in terms of deposits and advances. All the foreign banks of the country

are busy to invest heavily in the field technology and e-commerce in order toovercome branch limitation. All the foreign banks have been busy to introduce newproducts and idea to grab larger proportion of the local markets. Foreign banks arecarrying major proportion of local business in credit cards, consumer finances andhousing finance.

Many domestic banks have increased their general standards. Ours is the age of plasticmoney. Internet-based services are constantly increasing the number of ATMmachines, either by installing their own machines or making arrangements with othernetworks. The number of Debit Cards has also been increasing at an unprecedentedrate.

All the domestic and foreign banks vigorously institutionalized consumer financing inthe country and earned handsome profits. The borrowing to private sector has alsoincreased which ultimately boasted the profitability of all the domestic banks of thecountry. In the last 3 to 4 years many domestic banks have been suffering fromsurplus liquidity crisis mainly due to low demand for credit and slowdown of manufacturing sector in the country. Almost all the banks are now buy to invest incapital markets to increase their exposure in equities. To stop that risky trend the StateBank of Pakistan issued the instructions to follow the Prudential Regulations in letterand spirit and not invest in the capital markets beyond the limits. The domestic bank‟slending under consumer finance and housing finance has also been growing. Theanalysis of Annual Reports of banks shows that their income from core bankingactivities has been growing. The other positive point is that there are growingexpectations for increase in interest rates.

The growth in advances has started matching growth in deposits. The quality of assetas well liability products have been improving. The ratios of non-performing loanshave decreased. The SBP29 Scheme has benefited the banks as well as the borrowersto pay-off their long-standing dues. Bank Alfalah is the first to opt for the listingpolicy of the government and also offered its share to general public. Two of the state-owned banks, Habib Bank and United Bank, have been privatized.

Allied Bank of Pakistan was privatized in early nineties. But due to many internal andexternal reasons it continues to suffer. Some meaningful senior managerial changeswould be better at the earliest. Dawood Bank has recently emerged on the bankingscenario of Pakistan and it is good addition. The bank has come into existence as a



result of acquisition of Pakistan operations of a Sri Lankan bank by a local businessgroup. It is also not listed at the local stock exchanges. Meezan Bank is the first bank of the country, which is carrying complete Islamic banking.

4.3. Comparative Analysis

Comparative Analysis of Domestic Banking Industry of Pakistan

(Rs. million)

Bank Deposit Advances Investments

ACB 51,732 30,035 26,759

BAH 34,240 23,775 18,831

Bop 23,767 6,621 8,295

BB 7,761 3,298 1,328

FB 24,554 21,935 6,842

UNION BANK 328,182 167,523 142,877

KB 2,640 490 2,118

MB 5,079 3,532 856

Metro 28,515 19,444 15,013

MCB 182,706 78,924 89,610

NBP 362,866 140,547 143,525

PCB 21,155 10,876 10,306

PB 14,640 9,016 7,534

SPB 12,341 8,522 6,365

SB 20,545 11,378 9,844

UB 37,760 28,890 11,822



UBL 154,915 74,117 69,385

4.4. Marketing Analysis

4.4.1. Market Recognition

For the second consecutive year, NBP was recognized as the best bank in Pakistan bythe prestigious periodical, “The Banker" UK (a subsidiary of Financial Times Group).

Furthermore M/s JCR-VIS Credit Rating Company Limited maintained its rating of AAA, while the standalone rating was raised by one notch to AA-, which is one of thehighest in the banking sector.

4.4.2. Future Outlook

The reduction in the interest rate environment will overall have a negative impact onthe financial sector's profitability in the short term. To meet these challenges we willfocus on building our loan portfolio, both on corporate and retail side. On the retailside focus will be on additional fee business while maintaining stringent controls overcost. Longer term we will be focusing on those sectors in the country, which havetraditionally received less attention from the financial sector, i.e. agriculture, smalland medium enterprises and of the entire range of retail products. Our key strengthremains our customer base of over 9 million and we are confident that we are

positioned to capitalize on the opportunities.

5. BANK CHARGES EFFECTIVE FROM 01.01.2006

5.1. INTERNATIONAL BANKING

ANNUAL VOLUME

5.1.1. IMPORTS. DURING A CALENDAR

YEAR Ist Qtr. Each Sub.Qtr Minimum

LETTER OF CREDIT. Or part or part amount

thereof thereof. Per L/C

a. Opening of cash Letters of Credit. a. Upto Rs.20 (M) 0.40% 0.20% Rs.1, 000/-



b. Upto Rs.50 (M) 0.35% 0.20%

c. Upto Rs.100 (M) 0.30% 0.20%

d. Up to Rs.250 (M) 0.25% 0.20%

e. Up to Rs.500 (M) 0.20% 0.15%

f. Up to Rs.1, 000 (M) 0.15% 0.10%

g. Above Rs.1, 000 (M) 0.10% 0.05%

Note.

1. Projected Annual Volume is to be ascertained and got approved by the Competent

Authority Commitment letter from customer for paying difference in commissionarising out of short fall in business commitment.

2. L/C commission for the increased liability should also be recovered for un-expiredL/C period. In case, liability increases (due to exchange rate fluctuation) by virtue of providing forward cover to the customer after opening of L/C.

b. Revalidation Commission.

On expiry of L/C when the same is revalidated, revalidation commission should be

recovered as is applicable for opening of Fresh Letter of Credit, as in ( i-a ) above.L/C commission will be calculated on the amount of liability as per exchange rateprevailing on the date of revalidation

c. Transfer Commission.

When a Letter of Credit is transferred to a new beneficiary, transfer commissionshould be charged as applicable in case of Fresh Letter of Credit as in ( i-a) above.

d. Approval from SBP for re-import of Consignment back to Pakistan. Rs.2,000/- (Flat) per case.

e. L /C Cancellation Charges Rs.1, 000/- (Flat) Plus actual telex charges



.a. Non-reimbursable Letter of Credit under Barter/Aid/Loan and authorization to Pay.1% on 1st quarter and 0.30% for each subsequent quarter or part thereof Minimum of Rs.2, 000/-

b. L/C under Suppliers/Buyers Credit, “Pay as you Earn Scheme” and Deferred

payment L/Cs for period of one year.

Commission @ 0.40% per quarter or part thereof (at the time of opening of L/C, it isto be charged on full amount of L/C liability plus interest payable thereon for theperiod from the date of opening of L/C till the expiry of L/C, thereafter commission isto be recovered on six monthly basis on outstanding/reducing liability as per revisedSchedule of Charges applicable on that date.) In case forward cover is providedagainst L/C under Suppliers/Buyers Credit, L/C commission should be recovered atbooking rate for which liability voucher is to be passed. This is due to the fact thatexchange fee is being recovered in advance.

iii. If bills are to be drawn at a Usance under the above Letter of Credit other thanPAYEES And Suppliers/Buyers Credit and deferred payment Letters of Credit onyearly basis.

1. Rs.500/- per bill (Flat) to be charged at the time of retirement of bills.

2. Extra Commission @ 0.10% per month is to be recovered/charged for the UsanceImport Bill for any period beyond validity of Letter of Credit.

Amendments.

Rs.750/- per transaction (Flat) or commission under item (I.-a) or (ii-a) Pg-1, if amendment involves increase in amount or extension period of shipment.

iv. Issuance of Standby Letters of Credit (i.e.) beneficiaries in foreign countries)directly or through correspondent bank/bank‟s foreign branches/offices.

0.40% per quarter or part thereof Minimum Rs.1, 000/- plus

Correspondent bank charges if any.

Swift/Telex US$ 20/- per telex /swift message

Postage US$ 10/- per postage

Amendments.



US$ 20/- per transaction (Flat) or if amendment involves (increase in amount orextension in period) comm.. As above

V. a. For providing certified photocopies/ transfer of Category Pass Book. Rs.1, 000/-(Flat)

b. Processing charges for new Import Registration. Rs.1, 500/- (Flat)

c. Renewal of Category Pass Book Rs.1, 000/- (Flat)

vi. Mark-up in case of Import Bill under Import Letter of Credit.

a. 45 Paisas per Rs.1,000/- (or as per Sanction Advice) on daily products from the dateof reimbursement till the date of retirement.

b. Bank‟s commission on bills under Import Letter of Credit.

In addition to mark-up as per VI (a) Bank‟s commission is to be charged as under:-

1. If retired within 10 days

From the date of lodgment. No commission

2. If retired during 15 days 20 Paisas per Rs.100/-

subsequent to the period on purchase price.

At item (1) above.

3. If retired during next 15 25 Paisas per Rs.100/- days after the period on purchaseprice mentioned (1) & (2) above.

4. If retired during next 35 Paisas per Rs.100/- 190 days after the period on purchaseprice mentioned at (1) (2) and

NOTE.

1. The Branches in their notice to Importers will indicate the sale price (Marked-up)by

adding Rs.11.50 for each Rs.100/- or part thereof and will recover mark-up from thedate of reimbursement to the date of retirement of the bill by the client by applying theSlab of rates as per clause (VI) above.



2. Benefit of cash margin recovered at the time of opening of L/C will be given to the

customers at the time of retirement of documents.

3. No mark-up will be charged from the date of reimbursement till the date of

lodgment of documents received under Import L/Cs where the amount as perreimbursement arrangement is made to the negotiating bank only on receipt of thedocuments.

4. In case of FIM the following mark-up will apply:-

i. Mark-up 43.836 Paisas per Rs.1,000/-on daily product (or as perSanction Advice) against RegularCredit Line under approved

arrangement.

ii. In case of Forced Creationof FIM penal charges to be recoverednot exceeding Paisas 50 per Rs.1, 000/-on daily product basis.

iii. In case FIM is created and Bank arranges Clearance of consignmentunder Sight L/C, 50 Paisas per Rs.1,

000/- on daily products shall becharged from the date of creationof FIM plus 1% handlingcharges/commission.

5. In case Forced FIM is created due to non-payment on maturity againstDA/Suppliers Credit L/C. Commission @ 0.35% is to be charged (once only) inaddition to mark-up @ Paisas 50 per Rs.1,000/- from the date of maturity till the dateof payment.

6. Bank reserves the right to change the mark-up rate on case to case basis.

vii. Import Bills returned unpaid. Handling charges US$ 50/- (Flat) from ForwardingBank plus Courier charges if any.

Viii.



a. Collection Rs.750/- (Flat) per collection provided no charges are realized from thecorrespondent.

b. Consignments. 0.20% (Flat) handling charges at the time of registration of contract/ purchase order/ Performa invoice Minimum Rs.500/-

c. Import against advance payment to suppliers. Rs.750/- (Flat) plus usual remittancecharges.

ix. Service charges against Import transactions i.e. Import Bills/PAD/Collection. @Paisas 10 per Rs.100/- or Re.1/- per mille. Minimum Rs.500/-

x. Reimbursement charges (payable to reimbursing Banks.) At actual. Charges forborrowing customers as per arrangement.

5.1.2. EXPORTS

i. Processing Charges for Export Registration. Rs.200/- (Flat)

ii. Letter of Credit.

a. Advising. Rs.350/- (Flat)

b. Amendment Advising. Rs.250/- (Flat)

c. Negotiation of Bills against Letters of Credit issued under Barter/Remittance FromSBP. 0.25% Minimum Rs.200/-

d. Confirmation. 0.25% per quarter Minimum Rs.250/-

e. Transfer of Export L/Cs. Rs.350/- (Flat)

f. Reimbursement payment to other local bank from Non-Resident Rupee Account.Rs.350/- (Flat)

iii. If the documents are sent to other banks for negotiation under restricted Letter of Credit. Rs.350/-(Flat)

iv. Collection.

a. Clean Cheques/Drafts/FTCs. Rs.100/- per Collection (Flat)



b. Documentary (on which bank do not earn any exchange difference). Rs.200/- perCollection (Flat) v. a. Duty draw back claims. 0.25% of the amount of claimMinimum Rs.250/- per claim.

b. Handling of export documents against which advance payment is received. Rs.200/-

(Flat) plus postal charges.

vi. Collection FEBCs, DBCs, FCBCs, Special USSDBs and coupon.

Note.

No Charges on E-Form Endorsement & issuance of advance payment slip. 0.20%Minimum Rs.200/- Max. Rs.500/-

vii. Service Charges against export documents sent on collection basis where payment

cover is already received to our Foreign Currency Account. @ Paisas 10% or Re.1/-per mille.

5.1.3. REMITTANCES.

(i) OUTWARD

a. Foreign Traveller Cheques. 1% of the amount of Traveller Cheques sold Min.Rs.200/-

b. i. Remittance abroad through Foreign Currency Account. Commission @ US$ 1.00per US$ 1,000/- or part thereof Min. US$ 5.00 Maximum US$ 25.00 plus telexcharges Rs.250/- per telex in case of telegraphic transfer.

ii. Remittance against surrender of F.C Notes or cash deposited in F.C Account within10 days from the date of such deposits.

Note:- Service Charges @ 1.0% to be recovered from the customers in case cashdeposited in FC Account is encashed /converted into Pak Rupees within 10 days fromthe date of such deposit . In addition to mentioned under b (i ) above service charges

@ 1.0% to be recovered in case the remittance amount exceeds US$ 5,000/- or itsequivalent in other foreign currencies.

iii. Collection for Foreign Currency Accounts

c. Remittance abroad other than through Foreign Currency.

US$ 5.00 for collection up to US$ 1,000/-



US$ 15.00 for collection above US$ 1,000/-

a. Students (for education purposes). Rs.50/- plus telex charges Rs.200/- per telex if

Telex required or usual postal charges as prescribed.

b. Other than students.

Rs.50/- per US$ 1,000/- Min. Rs.200/- and Max. Rs.500/- plus telex charges Rs.300/-per telex for telegraphic transfer or usual postal charges as prescribed.

d. Service Charges against issuance of Foreign Mail Transfers (FMTs) ForeignDemand Drafts (FDDs) Foreign Telegraphic Transfer (FTT) & Travellers Cheques(TCs) against Pak Rupee. @ Paisas 10 % or Re.1/- per mille.

e. FDD/FTT/FMT Cancellation Charges for foreign currency account. Rs.200/- peritem plus telex/postage charges

f. Issuance of Duplicate FDD. Rs.300/- plus usual telex/postage charges

C. (ii) I N W A R D

a. Home Remittance No Charges (Zero Tariff)

b. Others. Nil, if proceeds are credited to an account with the drawee bank. In other

case a flat

Charges of Rs.10/-

c. Encashment (Purchase) of Traveler Cheques. Rs.100/-(Flat)

d. Service Charges on payment of Inward Foreign Drafts/Foreign Mail Transferswhere payment is made to beneficiaries after payment cover is received to our ForeignCurrency Account. These charges are to be recovered only when T.T buying rate isapplied. @ Paisas 15 per Rs.100 /-Minimum Rs.200/-

e. Commission/Handling Charges on Deposits of Currency notes for the credit of Foreign Currency Accounts. Nil, if no remittance affected within 10 days of the dateof deposit, otherwise remittance charges % service charges as per schedule C b (ii)

5.1.4. MISCELLANEOUS.

i. Postage/Cable/Fax/Courier



At actual subject to Minimum, as under:-

a. Postage (Ordinary) Local Rs.25/- Inland Rs.40/

b. Postage (Registered) Local Rs.30/- Inland Rs.50/- Foreign Postage at actual Min.

Rs.100/-

c. Telegram • Local/Inland Rs.50/-

d. Telex /Fax/Telephone/Swift Local Rs.20/- Inland Rs.25/- per minute Min. Rs.50/-Foreign: - . Full Telex L/C/Guarantee and long Message Rs.1, 200/- for full messagefor

Short message Rs.400/- . L/C/Guarantee amendment, Telegraphic Transfer andMiscellaneous messages Rs.1, 200/- for full message. Rs.400/- for short message

e. Courier Local Rs.50/- Inland Rs.70/- Foreign Rs.1, 100/-

ii. Foreign Bills sent for collections returned unpaid Rs.350/- (Flat) plus telegramcharges if any.

iii. Inward Collection received (relating to F.C Account) from abroad or localbanks/branches and where the payment is demanded in Foreign Currency. US$ 3.00per US$ 1,000/- or part thereof Minimum US$ 3.00 Maximum US$ 6.00

iv. Inward cheques expressed in foreign currency drawn on foreign currency A/csreceived f rom local/upcountry bank‟s branches for payment in Pak Rupees after

conversion at authorized dealers buying T.T clean rates. Commission @ Paisas 15 perRs, 100/- Minimum Rs.200/-

v. Issuance of proceeds certificate beyond one year. Rs.500/- (Flat) per certificate.

vi. Issuance of Business Performance certificate at customer‟s request. Rs.500/- (Flat)per certificate.

vii. Standing Instruction Charges in Foreign Currency Accounts. US$ 5.00 perinstruction

5.2. DOMESTIC BANKING

5.2.1. REMITTANCES.

Issuance of Drafts, MTs, & TTs:



a. Up to Rs.100,000/- 0.10% Minimum Rs.50/-

b. Up to Rs.1, 000,000/- 0.05% Minimum Rs.100/-

c. Over Rs.1, 000,000/- 0.04% Minimum Rs.400/-

d. Issuance of Duplicate Draft.

1. For account holders Rs.200/-

2. For non account holders Rs.250/-

a. Telegram Charges on TTs. (whether through Telex/Fax) Actual, Minimum Rs.75/-

b. Trunk Call charges on issuance of T.Ts Rs.100/- (Flat)

c. Postage on MTs.

d. Courier Charges. Actual Minimum Rs.30/- if sent by Registered post locally,Rs.50/- if sent by Registered post Inland on party‟s request. Local Rs.50/- InlandRs.75/-

5.2.2. PAY ORDER.

a. Issuance of pay order:-

1. For account holder Rs.50/- (Flat)

2. For non-account holder Rs.100/-(Flat) Rs.25/- (Flat) from student for payment of fee favoring educational institution

b. Issuance of duplicate Pay order

1. For account holder Rs.100/- (Flat)

2. For non-account holder. Rs.150/-(Flat)

5.2.3. Issuance Of Call Deposit Receipt

1. For account holder Rs.50/-

2. For non-account holder Rs.100/-



b. Cancellation/Issuance of Duplicate Call Deposit Receipt.

1. For account holder Rs.100/-

2. For non-account holder Rs.150/-

Iv. Inland Travellers Cheque. (Other than NBP if any) 0.25% Minimum Rs.25/-

iv. Inland Letters of Credit. (Openingcommission)

Annual Business

Up to Rs.50 (M) 0.40% per quarter or Up to Rs.75(M) 0.35% part thereof Up toRs.100(M) 0.25% Above 100(M) Negotiable Minimum Rs.1,000/=

a. Amendment Charges.

A) Without increase in amount or extension in period of shipment Rs.500/- (Flat)

B) Involving increase in amount and/or extension in period of shipment Rs.500/- pertransaction/commission as per item (iv) above

b. Advising/Amendment/Confirmation Charges of (Inward) Inland L/Cs. aboveRs.500 (M)

Note: Charges negotiable on case to case basis under approval of Business Group

Head. Same as applicable in case of Export L/Cs Rs.500/- (Flat)

.

vi. Authorities to encash cheques. No commission by issuing branch but charges onpurchase of cheques will be recovered commission @ 0.80% Minimum Rs.25/- plusCourier Charges Rs.30/-

vii. PO/DD/TT Cancellation

1. For Account holder Rs.50/-

2. For non-Account holder Rs.100/-

DD Issuance Charges Rs.200/-(Flat)



5.2.4. BILLS.

i. Collection:-

a. Documentary Bills. 0.40% Minimum Rs.50/- plus postage/courier charges.

b.i. Clean (including cheques/dividend warrants/bank drafts etc)

ii. For NBP own cheques/DD/PO 0.20% Minimum Rs.50/- plus postage/couriercharges as mentioned above.

NOTE:

No commission should be charged on out station cheques, drawn on places wherethere is an office of the bank, which are received from Government Departments for

credit to Government Account. This waiver does not applied to outstation chequestendered by the PUBLIC in payment of Government dues upon which the Bank‟susual charges should be levied. As per Zakat & Ushr Ordinance 1980, (Amended in1997) banking services and services connected with the assessment collection ordisbursement of Zakat & Ushr realizable on compulsory basis under this ordinance areto be rendered free of charge. Hence no collection charges shall be recovered oncheques drawn on Central Zakat Fund for crediting to account of their beneficiary.0.15% Minimum Rs.50/- plus applicable postage/courier.

iii. Purchase of bills, cheques etc.`

a. Documentary Bills other than those drawn against Letters of Credit

b. Clean Bills (trade cheques, bank draft etc.) a. 0.25% Minimum Rs.50/- plusapplicable

postage/courier charges. b. 0.40% Minimum Rs.25/- plus applicable postage/couriercharges.

NOTE:

i. Postage/Courier Charges are to be recovered on collection/realization of eachinstrument(whether clean or documentary). However, in case where party hasdeposited more than one cheque/instrument on a particular date to be collected/drawnon the same branch of the bank, postage/courier charges are to be recovered (onceonly.)



ii. Collection of cheque of small amount may be effected through normal dak (otherthan

Courier) if specially requested by the party in writing for which he will be responsiblefor the delay.

b. Other cheques/demand instruments (Like dividend warrants). 0.60% MinimumRs.20/-

NOTE:

i. Collecting agent‟s charges if the Collecting bank‟s is other than the Bank will be

extra.

ii. Telegram/Trunk Call Charges will be Extra, if fate of the instruments is asked for

by telegram.

c. Returning Charges for Documentary & Clean Collections, in case the instrumentsare returned unpaid. Rs.100/- + Courier Charges as above (Documentary) Rs.100/- +Courier Charges as above (Clean).

d. Mark-up shall be applied as under on bills purchased/negotiated. If retired up to21st days from the date of Purchase but during next 210 days (cushion period) 40Paisas per Rs.1, 000/- per day

e. Storage Charges. i. No Charges, if cleared within 3 days of its receipt by the branch.

ii. Re.1/-per packet per day Min. Rs.50/-

iii. Documentary bills drawn against Inland

5.2.5. Letters of Credit.

Charges for borrowing customers as per arrangements.

1. SIGHT BILLS.

a. Negotiating end Negotiating Commission @ 0.50% Minimum Rs.500/-

b. Collection Charges (Inland L/Cs) Rs.500/- (Flat)

c. Collection Charges for restricted L/C (where Negotiation is restricted to some otherBanks and presented to us for forwarding). Rs.500/- (Flat)



d. At opening end (at the time of retirement) rate of Mark-up.

i. If retired within 3 days from the date of lodgment Mark-up @ 45 Paisas per Rs.1,000/- on daily product from the date of negotiation.

ii. If retired after 3 days of lodgment Mark-up @ 45 Paisas per Rs.1, 000/- on dailyproduct plus Banks Commission @ 0.25%

NOTE.

No mark-up will be charged from the date of negotiation till the date of lodgment of documents received under Inland L/Cs where the payment as per reimbursementarrangement is made to the negotiating bank only on receipt of documents.

iii. If negotiation is restricted to some other bank.

Inland L/C cancellation charges Rs.500/- (Flat)

Forwarding Bank/Branch would charge handling charges of Rs.200/- (Flat) per bill(commission will not be applicable).

2 USANCE BILLS

At opening end.

a. Handling Charges. Rs.0.40% per bill Minimum Rs.500/- at the time of retirement of bill.

b. If bills matures after expiry of L/C. Usual Charges as in (a) above plus delivery of documents against acceptance commission @ 0.10% per month on bill amount onrealization from the date of expiry of L/C but Minimum Rs.500/-

c. Discounting of Inland Usance Bills. Markup @ 25 paisa per Rs.1000/- on dailyproduct (or as per Sanction Advice) plus flat Commission @ 0.1%.

3. At collecting end.

a. Collection Charges Commission @ 0.30% Minimum Rs.200/-

b. In case of purchase. Usual Commission as in (a) above and keep mark down @0.75% for every 15 days from the date of purchase till the date of maturity.

NOTE



All other charges as per quote (i) & (ii) and (c) above wherever applicable will beextra.

5.2.6. PROJECT FINANCES/ADVANCES

Following Charges may be recovered in-addition to interest/mark-up return oninvestment.

1. Project Application Fee

(Non-refundable)

Following charges will be recovered in addition to mark-up/Return on Investment.

Miscellaneous (i.e. is charges for documentation, evaluation of security and

maintenance thereof etc.)

At actual, in addition:

1. Project examination fee @ 0.50% (flat) after acceptance of sanctioned by thecompany but before disbursement of the total amount of sanctioned (Funded and NonFunded Both) Minimum Rs.15, 000/-

2. Legal documentation fee. @ 0.25% Flat after acceptance of sanctioned by theCompany but before disbursement of the total amount of sanctioned (Funded and Non

Funded Both)

3. Project monitoring fee @ 0.25% p.a. payable quarterly on outstanding amount(Funded and Non Funded Both)

4. Commitment fee @ 1.50% p.a. payable quarterly on the un-disbursement amountof sanction (Funded only)

5. Front End/Arrangement Fee. @ 1.50% (Flat) wherever applicable as per Bank‟s

discretion. Concessional rates are admissible on case to case basis with the approvalof Head Office

Miscellaneous Charges for issuance of NOC.

For issuance of NOC at the request of customers/clients for creating additional/pari-passu charges/second charges on their fixed assets for acquiring further projectfinance from other Bank‟s/Financial Institutions. Rs.10, 000/- (Flat)



NOTE:

Recovery of these charges waived from:

a. Clients having total facilities exceeding Rs.100 (M)

b. Clients allowed facilities under consortium financing.

4-a. Redemption of charge fee to be recovered from party when bank officers arecalled

before registrar for redemption of the mortgage. Rs.2, 500/-

b. Vacation of charge with SECP. Rs.1, 000/-

c. Registration of charge at Registrar Office with SECP. Actual + Rs.2, 000/- per case.

d. To arrange lien on securities issued by other Institutions. Rs.250/- per trip.

5.2.7. GODOWN CHARGES

a. Godown Rent. Actual

b. Salaries of Godown Keepers/Chowkidars Actual

c. Godown Inspection Charges.

i. Without any municipal limit. Actual Treatment

Debit to party account if Godown inspection charges are up to Rs.500/- for paymentto staff.

Debit to party and credit to bank income account if inspection charges are more thanRs.500/- and reimbursement of TA/DA charges through debit to “Expenditure

Account” with the approval of competent authority.

NOTE.

Inspection of Godown by Regional/ Head Office Auditors/External Auditors andoccasional surprise checking by Regional Headquarters etc. No such charges will berecovered from the parties as it is a part of normal bank duty.



d. Delivery Charges: - If a godown keeper is not posted conveyance Charges will berecovered. At actual

e. Other incidental expenses. Insurance premium. Legal Charges.

At actual

f. Handling charges on marking of lien on Govt. Securities Rs.500/- (Flat) percustomer

g. Marking of lien on Securities issued by NBP for other banks Rs.500/- (Flat) percustomer

NOTE:

While recovering the miscellaneous Charges like godown rent, godown staff salary,and inspection charges the amount recovered from the borrowers shall not exceed thetotal rent of godown, salary of the godown staff etc. In other word miscellaneouscharges should be levied as per actual and not become a source of profit to the bank.However, reimbursement of actual conveyance charges to be made to concerned staff to the debit of Expenses Account after proper approval of the competent authority.

5.2.8. STANDING INSTRUCTIONS FEE.

Standing Instructions fee will be recovered in addition to the usual charges on

remittances, if any. Rs.100/- per transaction.

SALE AND PURCHASE OF SECURITIES SAFE CUSTODY ARTICLES IN

SAFE

DEPOSITS & SAFE DEPOSIT LOCKERS.

A. I. Sale and purchase of shares and Securities

a. Rs.0.50% up to Rs.10, 000/- of purchase price or cost thereof Minimum Rs.50/-

b. Rs.0.10% on amount exceeding Rs.10, 000/- Minimum Rs.75/-

ii. Shares & Securities held in safe custody as a result of order of purchase executedthrough the bank (to be recovered up front) Rs.0.50% (Flat) per annum or part thereof of the face value with the minimum of Rs.300/-

NOTE



a. The above charges is in addition to brokerage.

b. Commission is not to be recovered on purchase of newly floated securities, where itis payable by the Govt. / Govt. Agencies and from the subscribers to new Sharesfloatation. A rebate of 50% in Safe Custody Charges will be applicable to all clients

maintaining Minimum balance of Rs.1 billion or above throughout the year in NIDAAccount.

c. When orders for purchase or sale of shares/ securities are executed through thebanks, other offices, all incidental expenses such as postage, insurance charges etc.,incurred will be recovered in addition to the commission / brokerage charges.

iii. Withdrawal fee on shares and securities held in safe custody (to be recovered at thetime of withdrawal.)

a. 0.25% up to Rs.10, 000/- of the paid up or face value Minimum Rs.50/-

b. 0.125% on amount exceeding Rs.10, 000/-

iv. Withdrawal fee on Government Securities. Rs.10/- per scrip. Where share and/orsecurities sold are from those held in safe custody, either commission on sale of shares and securities as shown against item (I) or withdrawal fees as shown againstitem (iii) whichever is higher, will be charged but not both.

v. Charges for collection of interest/ return / dividend. 0.30% on the amount of

interest/return/ dividend collected/ Paid Minimum Rs.20/-

vi. Handling Charges for conversion, renewal, consolidation or Sub – division of Government Securities. Rs.10/- per Scrip.

vii. Public Flotation of Shares/Modaraba Certificates/ Offer for Sale of Shares/Disinvestment/Term Finance Certificates. Commission @ 0.50% plus Out of PocketExpenses - actual

NOTE: Commission negotiable on case to case bases.

viii. Payment of Dividend Warrants through designated branches. Commission @0.50% plus Out of Pocket Expenses – actual

NOTE: Commission negotiable on case to case basis

Safe custody Articles in Safe-Deposit lockers.



Safe Deposit fee (to be recovered in advance at the time of deposit or at thecommencement of each Quarter)

A. For Boxes and Packages. Rs.4/- per 100 cubic inches or any part thereof with aminimum of Rs.300/- per quarter.

B. For Envelopes. (Contents unknown) Rs.2/- per 25 square inches or any part thereof with a minimum of Rs.300/-

ix. Safe Deposit Lockers Fee for Safe Deposit lockers (to be recovered in advance orat the commencement of the period yearly, half yearly, quarterly as the case may be.)

a. Up to 0.40 cft Small Rs.1, 000/- per annum

From 0.41 to 0.80 cft

From 0.81 to 1.35 cft Medium Rs.1, 500/- per annum


From 1.76 to 2.00 cft Large Rs.2, 500/- per annum


From 2.51 to 3.00 cft Extra- Large Rs.4, 000/- per annum

Key Deposit.

Deposit will apply at the Small Rs.3, 000/-

„Time of issuance of new

„Lockers. Medium Rs.4, 000/-

Large/Ex-Large Rs.4, 000/-

Breaking Charges.

Rs.2, 000/- per locker/Actual (whichever is higher)

x. SERVICE CHARGES FOR INVESTMENT IN PAKISTAN INVESTMENT

BONDS (PIB)



Maximum Custodial charges. Rs.100, 000/- per annum per PIB issue or Rs.8, 333/-per month.

Face Value Balance of up to PKR 1 Million No Charges.

Face value Balance of PKR 1 Million to PKR 200 Million Maximum 0.05% p.a. witha Minimum Charge of PKR 1,000/- per month

Face Value Balance in excess of PKR 200 Million PKR 8,333/- per month

Note:

Custodial Service Charges are to be calculated on month-end balances & charged tocustomers monthly, with no charge on initial sale/origination of transaction.Subsequent sale/transfer to an IPS account of another PD is subject to a charge of

Rs.1, 000/- per transfer/transaction. The aforesaid charges are linked to eachindividual issue and should not be levied on aggregate basis.

5.2.9. GUARANTEES.

i. Charges for borrowing customers. As per arrangement.

ii. Guarantees issued to shipping companies in lieu of Bill of Lading or endorsementof copy of Airways Bills in absence of original Airways Bill. Rs.1, 000/- (Flat)

iii. Guarantees issued to Collector of Custom in lieu of payment of Export Duty whichare valid up to 6 months. 0.50% per quarter or part thereof Minimum Rs.1, 000/-(2.00% per annum).

iv. Issuance of foreign guarantees (i.e. beneficiaries in foreign countries) directly orthrough correspondent bank/bank‟s foreign branch/offices 0.40% per quarter or partthereof Minimum Rs.1, 000/- plus correspondent bank charges if any. Swift/TelexUS$ 20/-per Tlx/Swift message Postage US$ 10/- per postage Amendments in (iv)above. US$ 20/- per transaction (flat) if amendment Involves (increase in amountextension in period) commission as above.

v. L/G under Suppliers/Buyers Credit “Pay as you Earn Scheme”

Commission @ 0.40% per quarter or part thereof (at the time of issuance of L/G it isto

be charged on full amount of L/G liability plus interest payable thereon for the periodfrom the date of issuance of LG/ till the expiry of L/G thereafter commission is to be



recovered on six monthly basis on outstanding/reducing liability as per revisedSchedule of charges applicable on that date.) In case forward cover is provided againstL/G under Suppliers/Buyers Credit, L/G commission should be recovered at bookingrate for which liability voucher is to be passed. This is due to the fact that exchangefee is being recovered in advance.

vi. In case of L/G under taking to be issued favoring any bank for providing forwardcover exchange risk under Suppliers/Buyers Credit on behalf of applicant.

vii. Other Guarantees

viii. Guarantees issued against collateralization of foreign currency deposit. L/Gcommission to be charged @ 1.6% per annum to reducing liability on booked rateMinimum Rs.1,000/- 0.40% per quarter or part thereof Minimum Rs.1,000/- (1.6%per annum) up to one year)

a. Deposit More than US$ 500,000/- 0.25% per quarter or part thereof Minimum Rs.1,500/- (1% per annum)

b. Deposit more than US$ 500,000/- up to 5,000,000/- 0.125% per quarter or partthereof Minimum Rs.1500/- (0.5% per annum).

c. Deposit more than US$ 5,000,000/- Nil

d. Amendments Rs.300/- per amendment (Flat) or 0.40% per quarter or part thereof if

amendment involves increase in amount of extension in validity Minimum Rs.500/-

NOTE.

1. All Guarantees issued by bank must contain specific amount and expiry date andcommission to be charged from the date of issue till expiry of the L/G up front.

2. If period of Bank Guarantee exceeds one year than commission be recovered onyear to year basis.

3. For calculation purpose a quarter would consist of 3 months starting from the dateof issue of Guarantee (Three calendar months will make one quarter.)

5.2.10. MISCELLANEOUS CHARGES

1. Service Charges on PLS Saving Accounts including dormant, inoperative andunclaimed with monthly average balance below Rs.5,000/-.



Exemptions:-

The following categories of account holders are exempted from levy of the ServiceCharges:

i) Students

ii) Mushtahiqueen of Zakat

iii) Employees of Government/ Semi- Government institutions drawing salary / pension.

iv) Person availing any consumer product related finance facility from the bank wouldalso be exempt from levy of service charges.

v) Ex-NBP employees or their spouses drawing pension/medical from the bank.Rs.50/- per month w.e.f. 01-02-2004

2. Service Charges on Current Accounts including dormant, inoperative andunclaimed with monthly average balance below Rs.5, 000/-. Rs.50/- per monthw.e.f.01-01-2004

3. Duplicate statements of account older than one year Rs.50/- per statement of account

4. Issuance of SBP/NBP Cheques. Rs.300/- per cheque

5. Handling charges for issuance of students exchange remittance permit andmaintenance of record for subsequent remittance. Rs.200/- per annum

6. Stop payment of cheque. Rupee A/c Rs.150/- per instruction. F.C A/c US$ 5/- perInstruction

5.2.11. EXTRA.

Stop payment charges are to be levied one time for stop payment instructions whetherit is for one or more cheques.

7. Clearance of Cheques where Clearing House Facility not established. No Charges.

8. Collection/encashment of profit coupons on Govt/Saving Centers under lien to us.Rs.200/- per trip.



9. Verification of test for other banks/parties Rs.250/- (Flat)

10. Credit information report including credit report on foreign suppliers/buyers.Foreign correspondent/reporting agencies charges at actual + Tlx. Charges.

11. Registration of contract with SBP in respect of private foreign currency loanobtained by borrowers in Pakistan from foreign lenders. Handling charges Rs.5, 000/-(Flat.)

12. Confirmation of balances to auditors. Rs.400/-

13. Balance Confirmation Certificate (required by customers other than auditors).Rs.100/- per certificate.

14. Charges for Cheques returned unpaid (when fault lies with the customer) to be

recovered from the client on whose behalf the instrument is being collected andcollecting bank will apply these charges. In case bearer cheque returned on thecounter no such charges will be applicable. Rupee Account 200/- per cheque. F.CAccount US$ 5/- per cheque.

15. Issuance of new cheque book in lieu of lost cheque book (Rupee A/c only). TheseCharges are in addition to stop payment charges as prescribed in (4) above. Rs.75/-per cheque book in rupee Account. US$ 2/- in F.C Account.

16. Issuance of loose cheque. Rs.50/- per cheque Rupee A/c US$ 1/- F.C A/c

17. Account closing charges. Rs.250/- for Local Currency or entire amount if balancein the account is below Rs.250/- . US$ 5/- for Foreign Currency or entire amount isbelow US$ 5/-

No charges on closing of old frozen FC A/cs

18. Issuance of Cheque Book Rs.2.50/- per leaf Mailing Charges for Cheque Book.Actual.

NOTE.

No Charges will be recovered from customers maintaining deposit balances of US$25,000/- and Above or equivalent of Rs.1/- (M) and Bank Staff are also exempt fromlevy of this charge.

19. Charges from employer on Salary Disbursement Services. Rs.25/- per salaryaccount per month.



NOTE:

A number of Commercial Organizations (other than Govt.and Semi-Govt. and

Autonomous Bodies)disburse salary to their employees through our branches. Wheresuch organizations do not maintain sufficient funds or route sufficient business

through our bank to justify workload of salary disbursement, bank is justified to claimcharges from them for the additional workload.

We can not charge individual accounts under Prudential Regulations. We canhowever, charge the employers where they do not maintain sufficient funds or routeancillary business through our bank. We must charge them for disbursement of salaryto their employees. ATM Facility. ATM card will be issued free of cost. However,annual renewal fee of Rs.300/- will be charged. Transaction cost for NBP customerusing another bank ATM under 1-LINK ATM SWITCH Service. Rs.15/- pertransaction Tariff for Corporate Customers & MNCs With aggregate exposure of

over Rs.500/- Million (Both refunded and non funded) and in case of all MNCs L/COpening guarantee issuance and remittance (Funds transfer) charges. As pernegotiation with the customer.

5.2.12. WAIVER OF CHARGES FOR CUSTOMERS MAINTAINING

MONTHLY AVERAGE BALANCE OF RS.2.000 (M) AND ABOVE IN

CURRENT ACCOUNT OR RS.5.000 (M) AND ABOVE IN PLS SAVINGS

ACCOUNT/NIDA ACCOUNT

a. Commission on DD/TT/MT & pay orders.

b. Cancellation/Issuance/Duplicate Pay orders.

c. Cheques returned unpaid.

d. Stop payment of cheques.

e. Issuance of new cheque book in lieu of lost cheque book.

f. Issuance of Duplicate statement of account older than one year.

g. Issuance of loose cheques.

h. Commission on Overseas Bills/Inland Bills for collection business. (Subject torecovery of postage, courier, fax, telex, trunk call charges wherever applicable).



5.2.13. BANK CHARGES FOR GOVERNMENT BUSINESS.

A. IMPORT:

a. Cash Letters of Credit Less than Rs.250, 000/- 1/8% (0.125%) of the value of theletter of

Credit. Rs.250, 000/- and above. 1/16% (0.0625%) of the value of the letter of credit.

b. Non-reimbursable letter of credit under Barter /Aid Loans/Authorization to pay.3/8% (0.375%) irrespective of the value of the letter of credit.

NOTE

In addition to above, branches will recover the actual cable/telex/swift charges whereLCs are desired to be established through cable/telex/swift and confirmation chargesof foreign bank‟s if foreign bank‟s confirmation is also to be added on opener‟srequest. The above concessionary rates/charges will apply only to those Letters of Credit which cover imports by the Government routed through State Bank of Pakistan. In case LC is received directly from the importing agency, normal chargesare to be recovered.



6.Tech Society Branch Lahore

6.1. INTRODUCTION:

It is an old branch of national bank of Pakistan. It is followed the instructions and

under control in regional head quarter (east region). It is called as a big branch whichhas required 10 million rupees daily in terms of reserves to meet daily requirement of transactions. It has following accounts with regional office,

1. general account

2. Suspense Account

3. Commission Account

In public they deal in two accounts i-e.

1. Current Account

2. PLS Account

They provide lot of services like.

1. Deposits

2. Advances

3. Pension

4. Foreign Exchange

5. Compliances



6. Bills

7. ATM

8. Utility, bill, traffic challan, admission of AIOU.

9. Locker‟s Services

10. Western Union (By name only)

In this branch at time 20 executives are providing service. 2 assistant voce presidentsare serving at this branch. M. Zulfiqar (manager) and Ifzad Butt (Advances officer). Inthis year two performance awards get by the branch.

6.2. LEARNING AS A STUDENT INTERN:

There are following learning points for me in the bank.

6.2.1. Duties

In my first week in NBP, they assign me worked in pension department. Pensionmanager Mr. Muhammad Iqbal trained me very nicely and I learned lot of things inthis department. They give the pension to retired Govt. employees. There are three

type of pensions given,

1= Provincial

2= Central

3= Defence

These are different according to their PPO numbers

For example:

Provincial PPO 123456

Central PPO 12345/pak

Defence PPO da/dg1/gh/4 etc.



I am full trained now in this particular job and I serve 1000 people in this week. Howto fill farm? How to enter in ledgers and balance account and what is file and book and all other things relating to pension department.

In second week I perform following tasks relating to the banking system.

In second week I worked on opening of account. In this week I repeatedly performedthis activity.

In third week they assign me with operation manager Mr. Numan sagheer He handledthe activities relating to the branch; check all the work in the branch. He gave meofficial computer. In this week I type and print so many letters for example;

Statement of account

Letter of tax verification

Letter of issuance of clearing certificate

4 letters for cheques clearing

Letters of relieved of transfer employees from this branch to anotherbranch

Joining letters of new employee come from other branch through

transfer

Exceptions reports of Mr. Saeed and so many other things.

I also print and type the data of advances department and foreign exchangedepartments. Cheques clearing daily sheet is also made by me in this week and I amassisted by the other officers. I also learn about the reserve of the branch and dailyfinances need by the bank and also get some raw information about the opening newaccounts.

In fourth week I assign the same task and learn some more complex and majoroperation of Sir Numan Sagheer I learn about accounts in which the branch deal withthe main and other branches, these are as follows;

1. General Account

2. Suspense Account



3. Commission Account

4. Exchange Account

In general account the branch debt or credit the other branches of the NBP. Usually

they debit or credit the main branch which transfers the cheques on this. In suspenseaccount branch expenses are made and at the end of six months period inform andshow the balance to main branch. In commission account bank charges commissionagainst its services. In exchange account they also earn, so from last two accountsbranch receives earnings from main branch against its services.

Secondly in this week I also learn hoe to open an account in the branch, it is aprocedure and after it bank open an account.

On computer I type and print so many letters like,

Reconciliation letter

Relieved letter

Joining letter

Medial recovery letter

And at the end I also scroll the challan of Government and pass vouchers.

In first three days of fifth week there are busiest days of pension department so I helpthe again pension manager. So first three days serve in this particular task.

In this week I do same job again and print letters, reports, statements and dailyclearing statement of cheques. Also work with Mr. Shafique and from him I learnabout opening an account, payment order and demand draft. Payment order is made tosend payment with in city and draft is made for payment outside the city but inside thecountry.

S C is that when cheques are coming from outside city for cash andthose cheques which come from branches inside city are sent to clearing house, so Imade the statement to clearing house for clearing cheques.

In fifth week I performed following activities:

Monday



On this day I perform the duty on the seat of bills where following work is beingdone,

Opening an account

Issue new cheques books

Make a payment order

Making the draft

Cheques send for clearing

Along with this task I also enter the daily post letters in the letter register. This is verybusy task is bank. I help the officer in this seat.

Tuesday

On this day I join the duty with passing cheques of PLS A/C. There are fifty threebooks of signatures cards of A/C holders. So I find the A/C in these books and thengave to the executive officer to verify. In this whole day I perform this particular task.

Wednesday

The day is also as above routine to sit in front of computer, scroll following files,

Income tax

Sales tax

Withholding tax

Provincial

Central

Property traffic

So I also make up these files separately, scroll them sequence and filed these files.Along with this task type and print the letters, reports and work sheets.

Thursday



Mr. Iqbal assigns me the task to rearrange lockers list and set them in a sequence andprint them on pages. Particular are these,

Name

Address

Amount of rent

Security

Expiry date

Locker no

Key no

Folio no

All the day is served in doing this particular task.

Friday

On Friday the accounts of holders of expired lockers are checked. Some have balancein their account but most of them have non in this branch. Rent from those holders

how balances have has been deducted from their accounts through vouchers and toremaining holders reminding letters have been sent. This is the end of Friday.



6.2.2. Problems faced by branch:

During my internship at this particular branch of national bank of Pakistan, there arefollowing problems I have found which are directly affect on efficiency andperformance of the bank. There problems are also called as an internal problems. Sothese are discussing below.

1. Lack of communication among the employees:

During the period of my internship I found this problem as a biggest problem that,they are not very effective in communication between themselves. They do not sharethe experience with each other and do not care the other employee. If one employeehas a problem, then he asked to other, but he does not give clear solution to thatproblems. They are shows the facial expressions against each other. Pension managerand other employees are always tried to gain cash/performance award and use thereferences to get it. They are talk against each other in front of me. So finally it is veryneedy for a public services organization to keep atmosphere friendly among themanagement and employees. National bank of Pakistan (Tech Society Branch) is lack in communication skills among the employees.

2. Ineffective public dealing:

There is also a big issue that they think its government‟s bank so it does not carecustomers. It is a wrong perception. There must be a good public dealing in publicservice organization. If one customer asked a question twice. They angry on him and

stop working. I personally experienced in pension department. The manager pension(Mr. Iqbal) have no respect to the old pensioner and he used wrong wording againstthem same is also happened in bills executive in bills (Mr. Shafique) is also angry onCustomers, when they asked question twice, so there should be solve this problem tocreate a good environment of the NBP.

3. Lack of commitment:



Lack of commitment is also a bib problem faced by the national bank of Pakistan(wahdat road branch). Employees are not committed to the work and their duties. Thisis very common problem.

For example, Rao Ikhlaq not received the letters from last two months. ATM machine

is under Rao Ikhlaq but it is run by operation manager. Mr. Kamran not attached thescroll at time. Mr. Qamar Zaman going on leave of 3 days but he does not come back even after 3 weeks. So internees are performed duties on his seat. So employees arenot very committed to their jobs and duties. Top management is also not verycommitted to this branch. They are not provided employee after transfer of the RaoIkhlaq. One executive on leave while other transferred. But not a single executiveprovide to the branch finally it is conclude that there is a lack of commitment fromemployees and top management also from employees and Top management also.

4. Low Efficiency of employees:

Efficiency of employees is also low at this branch. For example Mr. Qamar ZamanAulik has 10 years experience at national bank of Pakistan but he is not professionaleven at single seat in the bank. Where he assign the result is zero. During myinternship firstly he works in advances. He does not sent returns to head office at lastdates. 95% of returns are not sent to the regional head quarter. So he was not toomuch professional. After this he assign in passing the cheques but results are same(zero). So for this efficiency is very low at this branch.

5. Not very regular and punctual:

Regularity and punctuality shows the character of a big and good executive. But thisproblem is also faced by the NBP (Wahdat road) many executive not come at time.

For example Mr. Saeed compliance officer came 10 A.M. While bank is started at9AM. So some other executives are also not coming at time. So there must be solvedthat problem by the Top management.

In regional head quarter Mr. Munawir Shah is HRM assistant manager is also come at10 Am.

6. lack of computing skills:

Computing skills are also low, some executive are very efficient in computing skillsbut some are not totally aware from this system. For example ATM machine at thisbranch is only handled to Mr. Imran operation manager. When operation manager ison leave due to heart patient, ATM machine is off not worked because no body knows



to run this machine. Western Union is not worked effectively. The person whohandled western Union is careless and other employees are not taken interest in tatfield. So there is western Union for just name actually it does not worked.

7. Misuse of resources:

Resource are very needy, so there must be avoid to misuse the resources but in thisbranch it is reverse case, there is very wrong use of the resources, employees does nottake care of resources and not used them in right direction. For example wrongprinting, extra printing, after service time Mr. Hasnain at token used telephone almostone to two hours to take personally outside the bank. So these are the real problemswhich are faced by the bank.

Finally it is suggested that if these problems are solved there are much more chancesfor increase the performance of NBP. Particularly this branch.

6.2.3. NEW KNOWLEDGE ACQUIRED

During the internship there is practical knowledge acquired about the banking sector.What activities are performed by banks and how to deal with public? Alsocommitment about work and operations of banks. Financing and credits and otherpublic services are performed by the banks. What are implementations of bankingrules in banking sector? And much learn about the various executive‟s experiencesand their skills. What is role of higher authority (manager) in decision making andhow to solve the problems? How much money or reserves are used to meet the

requirements in the branch. What are the duties of operation manager and how to paycheques and all procedure relating to opening account in the banks?

6.2.4. Problem encountered:

During my internship in this bank, the problem which I faced that was proper training.They do not provide the proper training to the internees. They assign the intern onlyfew seats in the bank.

7. Bibliography

7.1. www.nbp.com.pk

7.2. Mr. Saeed compliance officer

7.3. Mr. Numan Sagheer operation manager

http://www.nbp.com.pk/






7.4. Mr. Iqbal pension officer

7.5. Mr. Ifzad butt assistant vice president

7.6. Mr. Shafique bills officer

7.7. Ch. Muhammad Sharif vice president and former manager in this branch

Documents

Internship Report of National Bank Limited