INTERNSHIP REPORT ON NATIONAL BANK OF PAKISTAN SHARA-E-IQBAL BRANCH

PRESENTED BY:

Muhammad Afzal Mosam khan

Class: Session: Internship Date: Report completed:

3rd semester M2009-11 1st January 28 February

DEDICATION

I dedicate to my Dear Parents & my respectable teachers whose assistance is always with me. And I personally do great respect by heart.

Acknowledgement Here very thanks to Almighty Allah whose guidance helped me to be trained in a top class organization, NBP, as well as to complete this report in a very limited time. My thanks also to young, dynamic, congenial, and qualified staff of NBP who never let me alone in different situations related to my internship. Without their humble help, it was not easy.I am thankful to the Bank Manager Muhammad Javed,NBP share-eiqbal Brach Quetta.He guided me during my intership from 1st January, to 1st March 2011.

Executive summary
This report is about my internship program with NATIONAL BANK. In this comprehensive report, I have discussed about every major aspect of the bank, which I observed and perceived during my internship program. In this report you will find the detail about the bank right from its incorporation to the current position. Along with it, the processes, policies and procedures of the bank are also discussed in detail. As the main purpose of internship is to learn by working in practical environment and to apply the knowledge acquired during the studies in a real world scenario in order to tackle the problems using the knowledge and skill learned during the academic process. In this report the detailed analysis of the organization has been done and the financial, technical, managerial and strategic aspects have been evaluated to analyze the current position of the organization. This report also contains my perceptions about the employees satisfaction, motivation level and the working environment of the organization.

TABALE OF CONTENTS:
Sr.# 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 19. 20. 21. Contents INTRODUCTION AND BRIEF HISTORY OF NBP EVOLUTION OF BANKS IN PAKISTAN PRESENT STATUS AND HISTORY BANKING REFORMS 1972 FINANCIAL POSITION PRODUCTS OF NATIONAL BANK OF PAKISTAN SAIBAAN SCHEME FOREIGN CURRENCY EXPORT DEPARTMENT IMPORT DEPRTMENT DIFFERENT SCHEMES CONDUCTED BY NBP ORGANIZATIONAL STRUCTURE DEPARTMENTALIZATION GENERAL OBSERVATION DURING TRAINING PROGRAM MANAGEMENT INFORMATION SYSTEM (MIS STRUCTURE OF THE MIS DEPARTMENT FUNCTIONS OF THE MIS DEPARTMENT COMPETITIVE ANALYSIS CONCLUSION RECOMMENDATIONS Page # 6 7 8 12 15 16 17 19 19 21 22 29 46 54 57 58 63 65 63

1. INTRODUCTION BRIEF HISTORY OF NATIONAL BANK OF PAKISTAN The history of National Bank of Pakistan is part of Pakistans struggle for economic independence. National Bank of Pakistan was established on November 9, 1949 under the National Bank of Pakistan Ordinance, 1949 in order to cope with the crisis conditions which were developed after trade deadlock with India and devaluation of Indian Rupee in 1949. Initially the Bank was established with the objective to extend credit to the agriculture sector. The normal procedure of establishing a banking company under the Companies Law was set aside and the Bank was established through the promulgation of an Ordinance, due to the crisis situation that had developed with regard to financing of jute trade. The Bank commenced its operations from November 20, 1949 at six important jute centers in the then, East Pakistan and directed its resources in financing of jute crop. The Banks Karachi and Lahore offices were subsequently opened in December 1949. The National Bank of Pakistan came forward to establish its offices in the Cotton growing areas and extended credit facilities liberally in order to restore stability to the market. In 1951, the country was once again faced with a crisis in the cotton trade when prices was crashed and touched the lowest level since independence following the cessation of hostilities in Korea. The bank in collaboration with the cotton board provided the necessary Credit facilities to the trade and the crisis was tided over. The nature of responsibilities of the Bank is different and unique from other banks/financial institutions. The Bank acts as the agent to the State Bank of Pakistan for handling Provincial/Federal Government Receipts and Payments on their behalf. The Bank has also played an important role in financing the countrys growing trade, which has expanded through the years as diversification took place.i The National Bank of Pakistan has its headquarters in Karachi, Pakistan. The bank operates 1249(2008) branches in Pakistan and 22(2008) overseas branches. 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. The National Bank of Pakistan has assets worth Rupees 737976.44 million on September 30, 2008.ii National Bank of Pakistan is today a progressive, efficient, and customer focused institution. It has developed a wide range of consumer products, to enhance business and cater to the different segments of society. Some schemes have been specifically designed for the low to middle income

segments of the population. These include NBP Karobar, NBP Advance Salary, NBP Saibaan, NBP Kisan Dost, and NBP Cash n Gold. The National Bank of Pakistan has implemented special credit schemes like small finance for agriculture, business and industries, administrator to Qarz-e-Hasna loans to students, self employment scheme for unemployed persons, public transport scheme. The Bank has expanded its range of products and services to include Shariah Compliant Islamic Banking products. For the promotion of literature, NBP recently initiated the Annual Awards for Excellence in Literature. NBP will confer annual awards to the best books in Urdu and in all prominent regional languages published during the defined period. Patronage from NBP would help creative work in the field of literature. The Bank is also the largest sponsor of sports in Pakistan. It has provided generously to philanthropic causes whenever the need arose. It has taken various measures to facilitate overseas Pakistanis to send their remittances in a convenient and efficient manner. In 2002 the Bank signed an agreement with Western Union for expanding the base for documented remittances. More recently it has started Electronic Home Remittances Project. This project introduces technology based system to handle inward remittances efficiently, by ensuring that the Bank's branches keep a track of the remittance received from abroad till its final receipt. A number of initiatives have been taken, in terms of institutional restructuring, changes in the field structure, in policies and procedures, in internal control systems with special emphasis on corporate governance, adoption of Capital Adequacy Standards under Basel II framework, in the up gradation of the IT infrastructure and developing the human resources. National Bank has earned recognition and numerous awards internationally. It has been the recipient of The Bank of the Year 2001, 2002, 2004 and 2005 Award by The Banker Magazine, the Best Foreign Exchange Bank Pakistan for 2004, 2005, 2006 and 2007, Global Finance, Best Emerging Market Bank from Pakistan for the year 2005, Global Finance, Kisan Time Awards 2005 for NBP's services in the agriculture field. It is listed amongst the Region's largest banks and also amongst the largest banks in South Asia 2005, The Asian Banker. It has also been presented a Recognition Award 2004 for having a Gender Sensitive Management by WEBCOP AASHA besides other awards.iii The precise summary of National Bank of Pakistan regarding its countrywide and overseas operations is as fallows:

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. The Bank in 1950 had one subsidiary The Bank of Bahawalpur on December4, 1947 by the former Bahawalpur State

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. 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%.

2003 NBP received permission to open a branch in Afghanistan. 2005 NBP closed its offshore branch in Cairo.

Scope of Studies As an internee in National Bank of Pakistan the main focus of my study research is on general banking procedures in one of the branches of NBP in MIS environment. These operations include remittances, deposits, advances and foreign exchange. Similarly different aspects of overall of NBP are also covered in this report. Research Methodology The report is based on six weeks internship program in National Bank of Pakistan. The methodology reported for collection of data is primary as well as secondary data. The biggest source of information is my personal observation while working with staff and having discussion with them. Formally arranged interviews and discussions also helped me in this regards. 2.EVOLUTION OF BANKS IN PAKISTAN There are different opinions that how the word Bank originated. Some of the authors opinion that this word is derived from the word Bancus or Banque, which means a bench. The explanation of this origin is attributed to the fact that the Jews in Lombard transacted the business of money exchange on benches in the market place; and when the business failed, the people destroyed the bench. Incidentally the word Bankrupts said to have evolved from this practice. Some of the authors are of opinion that the word Bank is derived from the German word back, which means joint stock fund. Later on when the German occupied major part of the Italy the word Back was italicized into Back. In fact human left the need of bank when it begins to realize the importance of money as a medium of exchange. Perhaps it where the Babylonian who developed banking system as early as 2000 BC. At that time temples were used as banks because of their prevalent respect. During the rule of king Hamurabi (1788 1686 BC) the founder of Babylonians Empire, loans were started being granted for interest. The borrower has to provide guarantee or he had to pledge his goods or valuables. King Hamurabi drew up a code wherein he laid down standards rules for procedures for banking operations by temples and great landowners. Also in Greece, the temples were used as banks,

where the people deposited their money and other valuables for safe custody and security. In Europe with the revival of civilization (Renaissance) in the middle of twelve century, trade and commerce started expanding and this development compelled the business community to borrow the money from the Hebrew money lenders on high rates of interest and usury. Seeing the great demand, these moneylenders started organizing themselves and bank started up at the principle seaports of southern Europe. Soon Venice and Geneva became the most important money markets of the time and banking though different from its present form, flourished. What we know as modern banking originated in the 14th century in Barcelona National Bank of Pakistan (NBP) was established under the National Bank of Pakistan Ordinance 1949. The primary objective of NBP was to purchase jute from the growers in the former East Pakistan and also to perform the commercial banking functions in the country. National Bank of Pakistan is now the biggest financial institution with assets totaling over Rs.310 billion with 1428 local and 23 foreign branches. The bank is the higher financer in agriculture and commodity operation sector. As part of the academic requirement for completing MBA (MIS) Master Business Administration of the students are required to under go six/eight weeks of internship with an organization. The internship is to serve the purpose of acquainting the students with the practice of knowledge of the discipline of banking administration. This report is about National Bank Pakistan. NBP was established in 1949 and since then, it has expended its network, becoming the largest commercial Bank of the country. It offers different products of services to its customers. . 3.PRESENT STATUS AND HISTORY National Bank of Pakistan maintain its position as Pakistanis 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 Pakistanis economic growth through aggressive and balanced lending policies, technologically oriented branches. The National Bank of Pakistan came into existence on 20th November 1949 under the National Bank of Pakistan Ordinance No.21 of 1949.It is a semipublic bank and functions like other commercial banks. Therefore it receives funds from the depositors and provides loans/credit facilities in all sectors including trade, industry and agriculture. It also functions as an agent of the Central Bank and operates the treasuries at places where no branch of State Bank of Pakistan exists. The National Bank of Pakistan was also nationalized, along with other banks, in January 1974. The Bank of Bahawalpur was also merged into this Bank. MANAGEMENT An Executive Board composed of six Senior Executives of the Bank and the President who is also the Chief Executive supervises the affairs and business of the Bank.

CAPITAL The authorized capital of the Bank is Rs.2500 million divided into 100 million ordinary shares of Rs.10 each. After nationalization, all the shares held by persons other than the Federal Government or Corporations i.e., owned and controlled by the Federal Government was considered as transferred and vested in the Government. BRANCHES The Bank had a network of 1531branches in the country and 28 branches in foreign countries. These countries are as follows: 1) - United States of America 2) - United Kingdom 3) - France 4) - Germany 5) - Africa, Middle East Region 6) - Bahrain Obu 7) - Asia Pacific Region 8) - Japan 9) - Republic of Korea 10) - Central Asian States 11) - Bangladesh 12)-Peoples Republic of China 13) -Pakistan. The main of the study in hand is together relevant information to compile internship report on National Bank of Pakistan. To observe, analyze and interpret the relevant data competently and in a useful manner. To work practically in an organization. To develop interpersonal communication. 4.Banking Reforms 1972 After the assumption of office by a new government in 1971, may 1972 different reforms were introduced to make the banks more responsive to the requirements of economics growth with social justice. The reforms aimed at bringing about a more purposeful and equitable distribution of bank credit, improving the soundness and efficiency of the banks, and securing greater social accountability of the banking system as a whole. The role of the banking system had been truly spectacular in mobilizing savings of the community and meeting the credit needs of the economy. But at the same time, the banks had generally neglected their role in promoting social justice and had failed to play an effective role in ensuring a wider and more equitable dispersal of the benefits of economic growth. In particular the inter locking of ownership with commercial and industrial interests had led to the misuse of bank resources. There was a heavy concentration of credit in big accounts and in urban area. Credit

facilities for agriculture, small business, newly emerging exports and housing had remained obviously inadequate while the banks indulged in capital financing in few selected business sectors and issued guarantees on behalf of favored clients, term clients, term financing facilities for industry were wholly absent. Under the banking reforms introduced in May 1972 the state bank of Pakistan was accorded wider powers. It was authorized to remove directors or managerial personnel, if necessary and supersede the board of directors of a banking company and appoint administrators during the period of such super session. It was also empowered to nominate directors on the board of every bank. As regard bank directors, it was provided that anyone defaulting in meeting his obligations to bank would forfeit his directorship. Moreover, it was laid down that no person could serve as director of a bank for more than six years continuously. Each bank was required to have a paid up capital of not less than 5 percent age of its deposits to be progressively build up to 10 percent age over a period of time. The banks were also required to transfer 10 percentage of their profit their reserves every years after the reserve became equal to the paid up capital. With a view to diversity the ownership of the banks, the banks were required to raise new capital from the market. Unsecured loans to directors, their families or firms and companies, were totally prohibited. The bank reforms also brought about the establishment of new institutions to achieve new objectives. A national credit consultative was setup under the supervise of the state bank with representation form the government and the private sector. It was assigned the task of determining of economys annual credit needs within the safe limits of monetary and credit expansion with reference to the annual development plan. Such a credit plan was to cover the public and private sectors. Alongside the National credit council and Agricultural Advisory Committee was formed to allocate agriculture credit for various purposes, to coordinate the operation or the agriculture credit agencies and to oversee the flow of credit to the designated targets. A standing committee on exports in general and the new emerging exports in particular, was also established. With a view to encourage the banks to extend credit to small borrowers, a credit guarantee scheme was introduced under which the state bank under took to share any bonfire losses incurred by the commercial banks in case of small loans of advances to agriculture. At the same time two financing institutions were established. The peoples Finance Corporation was designed to provide finance to people of small means while the National Development Finance Corporation was setup of finance public sector owned and managed industries and enterprises. The banking reforms turned to be transitional and interim step and when they were hardly eighteen months old the government nationalized the banking systems, with the following main objectives. To enable the government to use the capital concentrated in the hands of a few rich bankers for the rapid economic development of the country and the more urgent social welfare objectives. To distribute equitably credit too different classes sectors and regions. To coordinate the banking policies in various area of feasible joint activity without eliminating healthy competition among banks.

The act passed for the nationalization of banks is known as the banks Nationalization Act 1974.

Thus under this act the state bank of Pakistan and all the commercial banks incorporated in Pakistan and carrying business in or outside the country were brought under government ownership with effect from Jan 1, 1974. The ownership, management and control of all Pakistani banks stood transferred to and vested in the Federal government. The shareholders were provided compensation in the form of federal government bonds redeemable at par anytime within the period of fifteen years. Under the Nationalization act, the Chairman, Directors and Executives of various banks, other than those appointed by federal government were removed from their offices and the central boards of the banks and all local bodies were dissolved. Pakistan banking council was established to coordinate the activities of the Nationalized Commercial banks. At the time of Nationalization on December31, 1973 there were following 14 Pakistani commercial banks with 3323 offices allover Pakistan and 74 offices in foreign countries: National banks of Pakistan Habib bank limited Habib bank (overseas) limited United bank limited Muslim commercial bank limited Commerce bank limited Standard bank limited Australia bank limited Bank of Bahawalpur limited Premium bank limited Pak Bank limited Sarhad bank limited Lahore commercial limited Punjab provincial co-operative bank limited

The Pakistan banking council prepared a scheme for the recognition of banks. The bank (amalgamation) scheme 1974 was notified in April, providing for the amalgamation of the smaller banks with bigger ones and following the five units in there phases: National bank limited Habib bank limited United bank limited Muslim commercial bank limited Allied bank of Pakistan limited

The first phase was completed on 30th June. 1974. When the bank Bahawalpur was merged with the National Bank of Pakistan. The premier Bank Limited with Muslim Commercial Bank limited and Sarhad Bank Limited and Pak bank limited and renamed as Allied Bank of Pakistan limited. The second phase was completed on 31st Dec.1974, when the commerce bank limited merged with the United Bank limited. The third and the final phase were completed on 30th June, 1975 when the standard bank limited was merged with Habib Bank limited.

The nationalization was very smooth and gave very positive results. The number of branches, which stood at 3397 on Dec31, 1973, reached on 7661 by end June 1992. The bank deposits which stood at Rs. 1925 corers at the end 1973 reached the highest mark about 323 corers 5.FINANCIAL POSITION NBP balance sheet to cross Rs 1 trillion KARACHI: The National Bank of Pakistan has a largest balance sheet in Pakistan stands at Rs 980 billion that will cross Rs 1 trillion by next fiscal year, Syed Ali Raza, president NBP said. Addressing the newly general body members of Karachi Press Club (KPC) Saturday, Raza said the NBP a diversified commercial bank was going to open its branch in Saudi Arabia in February 2010 and would be first bank from Pakistan to set up branch in Saudi Arabia. President NBP said the bank was expanding its operations abroad and besides having branches in Central Asia, Afghanistan and Europe the bank would be among only the six foreign banks that are allowed to set up their branches in Saudi Arabia. Only China and South Asia are 50 percent of the worlds population and the centre of gravity will be Central Asia after few years that is why we are focusing on growing our business in this region. He said the development of alternate delivery channels, use of information technology and leveraging large customer base for cross selling were the key strategies of NBP for increasing its business. staff report NBP assets reach Rs 1.035 trillion KARACHI - Board of Director's of National Bank of Pakistan in their meeting held on March 01, 2011 approved the financial statements of the bank for the year ended December 31, 2010 and announced 25 percent bonus and 75 percent (Rs 7.5 per share ) cash dividend payout to the share holder's for the year 2010. In an already challenging environment, historic floods in the country intensified the effects on already fragile economy. The floods affected around 20 million people, majority of whom were subsistence farmers, and therefore not only there was a financial impact but also presented a social and humanitarian challenge. There was large scale damage to infrastructure as well as the irrigation system of the country. In wake of these floods the GDP growth target of the country was also revised from initial 4.5 percent to best estimates of 2.5 percent to 3.0 percent. Year 2010 was a milestone year for the bank as NBP became the first financial institution in the country to surpass the '1.0 trillion rupee' mark. Total assets of the bank were at Rs 1.035 trillion at the year end up by 9.5 percent from year end 2009, an appreciable growth in a challenging economic environment. The pre-tax profit increased by 15 percent from Rs 21.3 billion to Rs 24.4 billion despite making general provision of Rs 1.7 billion against advances and non-repetition of capital gain on NIT Units of Rs 3.9 billion in 2009. The increase is owing to higher core revenues and lower provision charge. Earnings per share, however, remained at last year level of Rs 13.05 due to prior year tax reversal of Rs 4.1 billion in 2009.

The top line (operating revenue) increased by 7.8 percent from Rs 56.5 billion in 2009 to Rs 60.9 billion in 2010. Net interest income increased by 15.4 percent or Rs 5.8 billion from the corresponding period last year due to higher balance sheet size and re-profiling of liability side. The bank's total deposits increased by Rs 104.7 billion or 14.4 percent. The bank also managed to increase its CASA deposit ratio from 56 percent last year to 62 percent. The core revenue from fee business increased by eight percent attributable to enhanced focus on trade business and higher revenue from general banking. Capital gains are lower by 45 percent mainly due to recording of Rs 3.9 billion capital gain last year on redemption of NIT Units. However, the bank took advantage of higher share prices and was able to realise capital gains of Rs 2.5 billion in 2010, which is higher by Rs 1.4 billion from 2009 capital gains excluding NIT redemption. Provision charge against advances decreased by Rs 4 billion, from Rs 11.0 billion in 2009 to Rs 7.0 billion in 2010 despite making general provision against advances of Rs 1.7 billion in 2010 to further strengthen the balance sheet. The bank was reaffirmed "AAA" rating by JCR-VIS Credit Rating Company in June 2010. The bank was awarded "Bank of the Year" award for the year 2010. The bank has been ranked in "Top 500 banks" in the world by "The Banker Magazine" in its July 2010 edition. 6.PRODUCTS OF NATIONAL BANK OF PAKISTAN Retail Product 1. Premium Aamdani Home Page Unprecedented Safety - Unprecedented Return 2. Premium Saver Home Page Unprecedented Safety - Unprecedented Return 3. Karobar Home Page President's Rozgar Scheme - Easy financing for self employment 4. Saibaan Home Page Affordable, Flexible & Convenient home financing for all 5. Advance Salary Home Page Take up to 20 Advance Salaries - Affordable Installations from 1 - 60 months 6.Cash Card Home Page One Card does it all - ATM plus Debit Card in one 7. Investor Advantage Home Page Invest with Confidence - Marginal Finance Facility 8. Cash and Gold Home Page Meet your need for ready cash against your idle gold jewelry with no minimum limits

9. Kisan Taqat Home Page NBP KISAN Taqat 10. Kisan Dost Home Page NBP's affordable agricultural program offers you a wide range of financing 11.Online Home Page Knitting Links - AASAN Banking 12. NBP Helpline from 8:30 am to 10:00 pm 7.SAIBAAN SCHEME NBP SAIBAAN DOCUMENTS FOR SALARIED CLASS Application form (in original). CNIC copies of the applicant. Two references CNIC copies. Photographs of the applicant(06) Employment card copy. Appointment letter. Service Letter / Certificate. Salary cum service certificate. Last three Months salary Certificates. Branch Accounts statement last six months. Last Three Month Utility Bills Approved Map Original property Documents. Aks Sajra. Fard Malkiat Naqal Intiqal Khasra Verification report National Evaluation Companys report. PT-I Sale Deed/ Registry. Processing Fee pay order for Rs.500/= Fee for Evaluator pay order ( in case of construction Rs.2000/= (in case of Purchase Rs.3000/= Processing Fee pay for legal opinion order for Rs.1000/= Borrower Basic Facts Sheet Confidential Report ALICO DECLARATION FORM.

NBP SAIBAAN DOCUMENTS FOR BUSINESS CLASS Application form (in original). CNIC copies of the applicant. Two references CNIC copies. Photographs of the applicant(06) Business Related Documents. Last three years Business Record. Branch Accounts statement last one year. Last three month Utility Bills. ICIL- Department Verification ( Income Estimation) Approved Map

Registry / Sale Agreement Aks Sajra. Fard Malkiat Naqal Intiqal Khasra Verification report NOC National Evaluation Companys report. PT-I Sale Deed/ Registry. Processing Fee pay order for Rs.1000/=financing below Rs. 1 Million. Fee for Evaluator pay order Rs.3000/=financing between Rs. 1 to Rs. 4 Million. Processing Fee pay for legal opinion order for Rs.6000/= financing above Rs.4 Million. Fee for Evaluator pay order ( in case of construction Rs.2000/= (in case of Purchase Rs.3000/= Borrower Basic Facts Sheet Confidential Report ALICO DECLARATION FORM.

8.FOREIGN CURRENCY Guaranttee The word guarantee means under taking. Three parties are involved during the process of Guarantee Principal (Seller). Guarantor (Bank). Beneficiary (Buyer).

Outward Remittance The outward remittance is the term which emphasizes that to transfer amount from one country to another country. The sources used to transfer the amount are Transfer Transactions (TT), Demand Draft (DD).The procedure of outward remittance is initially been undertaken that when account holder fill the request letter. The request letter contain following information are Request of debit. Amount to be mentioned. Beneficiary name. Beneficiary account no.

There is the concept of two accounts are NOSTRO A/C, VOSTRO A/C.Western Union Western Union is the name of Australian Bank which provide facility of providing payment with out wasting time. There are 259 bank8 in world wide who provide the facility where no bank exist The amount sent to other place for this we do require certain documents are ID copy name of the person to whom the amount is sent .Then Bank will assign PIN CODE .The amount is send with in 15 minutes. When the receiver go to the bank to receive the amount he had to show his ID COPY or ORIGINAL PASSPORT then the authorize officer will identify through NADRA its identification. CHARGES Minimum charges will be received is $20. Commission will be charged or Rs. 1200. Inward Remittance In this department the process is contrary to outward remittance the amount from foreign country to the Pakistan. In this case the amount received is in the form of cheque, Pay order etc. 9.EXPORT DEPARTMENT Collection The collection Department is the initial phase of the export department. First E-Form is to provided to the party .It is given on following criteria The current account of the exporter should be activated for the issue of the E-Form. TYPES OF E-FORM There are four types of form are Original. Duplicate.

Triplicate. Quadrapled.

The Banks are involved between the parties .All deals and documentation are made between the banks. The bank of Seller and Buyer contact with their party about the transaction when there is no conflict between the party the process goes on until transaction is completed. 10. IMPORT DEPRTMENT In this department they deal with the following section to process the Import Department. LC opening. Lodgment. Retirement of LC.

LC OPENING Firstly Importer presents the Proforma Invoice to the bank Then Importer will fill the form (IB-8) which cost Rs.100 .Proforma should not be expired. C&F(exporter will pay ),FOB( Importer will pay shipment charges) should be mentioned on the form. The LC opening application form requires certain documents are Name and address of the applicant. Name and address of the beneficiary. Insurance detail. Nature of LC. Commodity.

LC LODGEMENT After LC opening Exporter bank will send document to the Importer Bank for the purpose of LC. Advisory bank is the correspondent bank. In case of any discrepancy found and is accepted then the $50 is charged for further processing. Normally the discrepancy is created after shipment. When the documents are accepted by Importer and Exporter then payment is to be made. RETIREMENT OF LC At time of payment or retirement we deal with following Import channel are LC. Advance Payment. Payment after shipment. Foreign DD & TT.

LETTER OF CREDIT LC further categorize in to two things are Sight.Usances. In case of sight the charges are taken as follows MARK UP = B.E*Days* 0.4% 1000 In case of Usance the charges are P&T charges of Rs.400. Service charges of 0.1%of B.E Commission is deducted from the party at the time of expiry. When the period is delayed of 1 month then charge 0.1%, if the period is 2 month then charges is 0.2%.FED 5% on total commission SERVICE CHARGES The charges of 0.1% of Bill of Exchange is charged. After the period of 15 days then the commission is charged .FED is charged on 5% on commission. ADVANCE OF PAYMENT The payment is made to the party in advance to the exporter through bank. The bank also deduct margin from the Importer so that bank could serve itself SERVICE CHARGES Minimum commission for the amount less $400.At increase of every $1000 $ is charged. FED is to be charged of 5%on commission amount. P&T is charged of Rs.400 11.DIFFERENT SCHEMES CONDUCTED BY NBP National Bank of Pakistan always makes efforts to improve its goodwill in the general public. It introduces different kind of schemes time to time. The most popular schemes conducted by NBP are as under: 1 ... ... Hajj Mubarak Scheme

2 ... ... 3 ... ... 4 ... ...

NBP Advance Salary Scheme Fund Management Scheme LG TV Scheme

1. HAJJ MUBARAK SCHEME For the convenience of a person with a limited income who desire to perform Hajj, Hajj Mubarak Scheme is introduced. Moreover, National Bank of Pakistan process the Hajj applications of thousands of people successfully more than any other bank in Pakistan. 2. NBP ADVANCE SALARY SCHEME Do you need urgent funds? If yes then head to National Bank of Pakistan and avail NBP Advance Salary Scheme, which allow you to draw three months salary in one go. This facility is available to permanent employees of the:1 ... ... 2 ... ... 3 ... ... Federal and Provincial governments Semi-governments, autonomous, semi-autonomous, local bodies, and Other corporations approved by NBP No guarantee, collaterals, or insurance is required to avail this scheme. NBP gives the facility to repay the excessive amount within 1 to 36 months. The procedure is very easy, just fill the application form and choice between 1 to 36 months and take your NBP Advance Salary within 3 days after submitting your form. 3. FUND MANAGEMENT SCHEME This scheme is offered to corporate under customer and is aimed at providing better rate of return up to 15% per annum. One of the objectives of the scheme is to develop the secondary market for government securities. 4. LG TV SCHEME It is the most popular of NBP schemes for people. corporates with LG Appliances Corporation. If you want a TV set but has not enough money to purchase it then head to NBP, fill an application form of LG TV Scheme. NBP gives you the facility to pay for the TV set in smaller installments during a time period of 2 years.

government corporations

Any one can avail this scheme. Two government employees are required to present the witness to repay the loan if the applicant is unable to repay the loan or the applicant should have the Fixed Term Deposit in NBP more worthily than the amount advanced to the applicant and it should have the duration of more than two years.

12.ORGANIZATIONAL STRUCTURE In this section four topics are discussed. The major topics of this section are: 1. 2. 3. 4. Management and Organization of a Commercial Bank Senior Management Regional Structure Branch Structure

1. MANAGEMENT AND ORGANIZATION OF A COMMERCIAL BANK The ownership, management, and control of all the commercial banks were taken over by the Government of Pakistan on January 1st, 1974. A banking council was formed under the Nationalization Act 1974. The banking council was set up for making policy recommendations to the Federal Government, formulating policy guidelines for the banks and their reorganization. The management and organizational structure of the nationalized banks have uniformity. This management and organizational structure is briefly described as under: Board of Directors Executive Board Chief Executive Divisional Chiefs Provisional Chiefs Circle Executive Zonal Heads Branch Managers

1.1 Board of Directors In the management of the banks, the board of directors is at the top of the controlling body. Since there are no private share holders now, so there is no general meeting of the share holders and no elected directors. The BOD consists of a nominated President, a Secretary, and 9 other members. The board has limited administrative powers because after the Nationalization Act 1974, most of powers are transferred to the Banking Council and Executive Board.

1.2. Executive Board The general direction and supervision of the affairs of commercial banks lies in their respective Executive Boards. An EB also consists of a President, a Secretary, and 9 other members, appointed by the Federal Government. 1.3. Chief Executive The President of the Executive Board is the Chief Executive. He is the administrative head of a bank and presides over the meetings of Executive Board. 1.4. Divisional Chiefs In order to improve the management and operation of a bank, it has been split up into a numbers of divisions. Each division of a bank is placed under the supervision and control of Divisional Chief (also called the Senior Executive Vice President or Executive Vice President) 1.5. Provisional Chiefs In order to improve the performance of banking system, each bank has a Provisional Chief. PC has the powers for sanctioning finance and other credit facilities. Each headquarter is situated in each province e.g. in Lahore, Peshawar, Quetta, and Karachi. 1. 6. Circle Executive Each commercial bank has a number of circles placed directly under the control and supervision of Chief Executive. 1.7. Zonal Heads Each circle is divided into a number of zones. These zones are administered by Zonal Heads who hold the posts of Vice President or Assistant Vice President. 1.8. Branch Managers Each zone of commercial bank is divided into several branches. The control and supervision of each branch is mostly entrusted to Assistant Vice President or Officer G-I 3.REGIONAL STRUCTURE

REGIONAL CHIEF EXECUTIVE

GENERAL MANAGER

GENERAL MANAGER

GENERAL MANAGER

Advances, Legal and Recovery Wing Customer Services and Implementation of Audit

Planning, Business Development

Administrative Wing

4.BRANCH STRUCTURE MANAGER OG-I ADVANCE OG-II ADMIN

OG-II SERVICES

OG-II CASHIER

OG-II ACCOUNTS

OG-III

ASSISTANT GODOWN KEEPER

ASSISTANT GODOWN KEEPER

ASSISTANT GODOWN GODOWN KEEPER

ASSISTANT

KEEPER

HEAD MESSANGER

MESSANGER

13.DEPARTMENTALIZATION Dividing an organization into different parts according to the functions is called departmentalization. So NBP is divided into Departments. 1. CASH DEPARTMENT 2. CLEARANCE DEPARTMENT 3. ADVANCES DEPARTMENT 4. REMITTANCE DEPARTMENT 5. Department of HUMAN RESOURCE MANAGEMENT 6. DEPOSIT DEPARTMENT: 7. FOREIGN EXCHANGE/DEPARTMENT:

1. CASH DEPARTMENT Cash department performs the following functions 1.1) Receipt The money, which either comes or goes out from the bank, its record should be kept. Cash department performs this function. The deposits of all customers of the bank are controlled by means of ledger accounts. Every customer has its own ledger account and has separate ledger cards. Payments It is a bankers primary contract to repay money received for this customers account usually by honoring his cheques. 1.3) Cheques and their Payment The Negotiable Instruments. Act, 1881, Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.

Since a Cheque has been declared to be a bill of exchange, it must have all its characteristics as mentioned in Section 5 of the Negotiable Instruments Act, 1881. Therefore, one can say that a Cheque can be defined as an: An unconditional order in writing drawn on a specified banker, signed by the drawer, requiring the banker to pay on demand a sum certain in money to, or to the order of, a specified person or to the bearer, and which does not order any act to be done in addition to the payment of money. (Law of Banking by Dr. Hart, p.327). 1.4) the Requisites of Cheque There is no prescribed form of words or design of a Cheque, but in order to fulfill the requirements mentioned in Section 6 above the Cheque must have the following. It should be in writing The unconditional order Drawn on specific banker only Payment on Demand Sum Certain in money Payable to a specific person Signed by the drawer 1.5) Parties to Cheque The normal Cheque is one in which there is a drawer, a drawee banker and a payee, or no payee but bearer. The Drawer The Drawee The Payee 1.6) Types of Cheques Bankers in Pakistan deal with three types of cheques a) Bearer Cheques Bearer cheques are cashable at the counter of the bank. These can also be collected through clearing. b) Order cheque These types of cheques are also cashable on the counter but its holder must satisfy the banker that he is the proper man to collect the payment of the cheque and he has to show his identification. It can also be collected through clearing. c) Crossed Cheque These cheques are not payable in cash at the counters of a banker. It can only be credited to the payees account. If there are two persons having accounts at the same bank, one of the account holder issues a cross-cheque in favour of the other account holder. Then the cheque will be credited to the account of the person to whom the cheque was issued and debited from the account of the person who has actually issued the cheque. 1.7) Payment of Cheques It is a bankers primary contract to repay money received for his customers account usually by honouring his cheques. Payment of money deposited by the customer is one of the root functions of banking. The acid test of banking is the receipt of money etc. from the depositors, and repayment to them. This paying function is one, which is the distinguishing mark of a banker and

differentiates him from other institutions, which receive money from the public. However the bankers legal protection is only when payment is in Due Course. The payment in due course means payment in accordance with the apparent tenor of the instrument, in good faith and without negligence to any person in possession thereof under circumstances, which do not afford a reasonable ground of believing that he is not entitled to receive payment of the amount therein mentioned. It is a contractual obligation of a banker to honor his customers cheques if the following essentials are fulfilled. Cheques should be in a proper form: Cheque should not be crossed: Cheque should be drawn on the particular bank: Cheque should not mutilated: Funds must be sufficient and available: The Cheque should not be post dated or stale: Cheque should be presented during banking hours:

2. CLEARANCE DEPARTMENT A clearinghouse is an association of commercial banks set up in given locality for the purpose of interchange and settlement of credit claims. The function of clearinghouse is performed by the central bank of a country by tradition or by law. In Pakistan, the clearing system is operated by the SBP. If SBP has no office at a place, then NBP, as a representative of SBP act as a clearinghouse. After the World War II, a rapid growth in banking institutions has taken place. The use of cheques in making payments has also widely increased. The collection as settlement of mutual obligations in the form of cheques is now a big task for all the commercial bank. When Cheque is drawn on one bank and the holder (payee) deposits the same in his account at the bank of the drawer, the mutual obligation are settled by the internal bank administration and there arises no inter bank debits from the use of cheques. The total assets and total liabilities of the bank remain unchanged. In practice, the person receiving a Cheque as rarely a depositor of the cheque at the same bank as the drawer. He deposits the cheque with his bank other than of payer for the collection of the amount. Now the bank in which the cheque has been deposited becomes a creditor of the drawers bank. The depositor bank will pay his amount of the cheque by transferring it from cash reserves if there are no offsetting transactions. The banks on which the cheques are drawn become in debt to the bank in which the cheques are deposited. At the same time, the creditors banks receive large amounts of cheques drawn on other banks giving claims of payment by them. The easy, safe and most efficient way is to offset the reciprocal claims against the other and receive only the net amount owned by them. This facility of net inter bank payment is provided by the clearinghouse. The representatives of the local commercial banks meet at a fixed time on all the business days of the week. The meeting is held in the office of the bank that officially performs the duties of clearinghouse. The representatives of the commercial banks deliver the cheques payable at other

local banks and receive the cheques drawn on their bank. The cheques are then sorted according to the bank on which they are drawn. A summary sheet is prepared which shows the names of the banks, the total number of cheques delivered and received by them. Totals are also made of all the cheques presented by or to each bank. The difference between the total represents the amount to be paid by a particular bank and the amount to be received by it. Each bank then receives the net amount due to it or pays the net amount owed by it. 2.1) In-Word Clearing Books The bank uses this book for the purpose of recording all the cheques that are being received by the bank in the first clearing. All details of the cheques are recorded in this book. 2.2) Out-Word Clearing Book: The bank uses outward clearing register for the purpose of recording all the details of the cheques that the bank has delivered to other banks. 3. ADVANCES DEPARTMENT Advances department is one of the most sensitive and important departments of the bank. The major portion of the profit is earned through this department. The job of this department is to make proposals about the loans. The Credit Management Division of Head Office directly controls all the advances. As we known bank is a profit seeking institution. It attracts surplus balances from the customers at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms. Credit extensions are the most important activity of all financial institutions, because it is the main source of earning. However, at the same time, it is a very risky task and the risk cannot be completely eliminated but could be minimized largely with certain techniques. Any individual or company, who wants loan from NBP, first of all has to undergo the filling of a prescribed form, which provides the following information to the banker. 3.1) Name and address of the borrower. Existing financial position of a borrower at a particular branch. Accounts details of other banks (if any). Security against loan. Exiting financial position of the company. (Balance Sheet & Income Statement). Signing a promissory note is also a requirement of lending, through this note borrower promise that he will be responsible to pay the certain amount of money with interest. 3.2) Principles of Advances There are five principles, which must be duly observed while advancing money to the borrowers. Safety Character

Capacity Capital Liquidity Dispersal Remuneration Suitability Forms of Loans Cash Finance Overdraft/Running Finance Demand Financing/Loans

a. Safety Bankers funds comprise mainly of money borrowed from numerous customers on various accounts such as Current Account, Savings Bank Account, Call Deposit Account, Special Notice Account and Fixed Deposit Account. It indicates that whatever money the banker holds is that of his customers who have entrusted the banker with it only because they have full confidence in the expert handling of money by their banker. Therefore, the banker must be very careful and ensure that his depositors money is advanced to safe hands where the risk of loss does not exist. The elements of character, capacity and capital can help a banker in arriving at a conclusion regarding the safety of advances allowed by him. b. Character It is the most important factor in determining the safety of advance, for there is no substitute for character. A borrowers character can indicate his intention to repay the advance since his honesty and integrity is of primary importance. If the past record of the borrower shows that his integrity has been questionable, the banker should avoid him, especially when the securities offered by him are inadequate in covering the full amount of advance. It is obligation on the banker to ensure that his borrower is a person of character and has capacity enough to repay the money borrowed including the interest thereon. c. Capacity This is the management ability factor, which tells how successful a business has been in the past and what the future possibilities are. A businessman may not have vast financial resources, but with sound management abilities, including the insight into a specific business, he may make his business very profitable. On the other hand if a person has no insight into the particular business for which he wants to borrow funds from the banker, there are more chances of loss to the banker. d. Capital This is the monetary base because the money invested by the proprietors represents their faith in the business and its future. The role of commercial banks is to provide short-term capital for commerce and industry, yet some borrowers would insist that their bankers provide most of the capital required. This makes the banker a partner. As such the banker must consider whether the amount requested for is reasonable to the borrowers own resources or investment. e. Liquidity

Liquidity means the possibilities of recovering the advances in emergency, because all the money borrowed by the customer is repayable in lump sum on demand. Generally the borrowers repay their loans steadily, and the funds thus released can be used to allow fresh loans to other borrowers. Nevertheless, the banker must ensure that the money he is lending is not blocked for an undue long time, and that the borrowers are in such a financial position as to pay back the entire amount outstanding against them on a short notice. In such a situation, it is very important for a banker to study his borrowers assets to liquidity, because he would prefer to lend only for a short period in order to meet the shortfalls in the wording capital. If the borrower asks for an advance for the purchase of fixed assets the banker should refuse because it shall not be possible for him to repay when the banker wants his customer to repay the amount. Hence, the baker must adhere to the consideration of the principles of liquidity very careful. f. Dispersal The dispersal of the amount of advance should be broadly based so that large number of borrowing customer may benefit from the bankers funds. The banker must ensure that his funds are not invested in specific sectors like textile industry, heavy engineering or agriculture. He must see that from his available funds he advances them to a wide range of sector like commerce, industry, farming, agriculture, small business, housing projects and various other financial concerns in order of priorities. Dispersal of advances is very necessary from the point of security as well, because it reduces the risk of recovery when something goes wrong in one particular sector or in one field. g. Remuneration A major portion of the bankers earnings comes form the interest charged on the money borrowed by the customers. The banker needs sufficient earnings to meet the following: Interest payable to the money deposited with him. Salaries and fringe benefits payable to the staff members. Overhead expense and depreciation and maintenance of the fixed assets of the bank. An adequate sum to meet possible losses. Provisions for a reserve fund to meet unforeseen contingencies. Payment of dividends to the shareholders. h. Suitability The word suitability is not to be taken in its usual literary sense but in the broader sense of purport. It means that advance should be allowed not only to the carefully selected and suitable borrowers but also in keeping with the overall national development plans chalked out by the authorities concerned. Before accommodating a borrower the banker should ensure that the lending is for a purpose in conformity with the current national credit policy laid down by the central bank of the country. i. Forms of Loans In addition to purchase and discounting of bills, bankers in Pakistan generally lend in the form of cash finance, overdrafts and loans. NBP provides advances to different people in different ways as the case demand. j. Cash Finance

This is a very common form of borrowing by commercial and industrial concerns and is made available either against pledge or hypothecation of goods, produce or merchandise. In cash finance a borrower is allowed to borrow money from the banker up to a certain limit, either at once or as and when required. The borrower prefers this form of lending due to the facility of paying markup/services charges only on the amount he actually utilizes. If the borrower does not utilize the full limit, the banker has to lose return on the unutilized amount. In order to offset this loss, the banker may provide for a suitable clause in the cash finance agreement, according to which the borrower has to pay markup/service charges on at least on self or one quarter of the amount of cash finance limit allowed to him even when he does not utilize that amount. k. Overdraft/Running Finance This is the most common form of bank lending. When a borrower requires temporary accommodation his banker allows withdrawals on his account in excess of the balance which the borrowing customer has in credit, and an overdraft thus occurs. This accommodation is generally allowed against collateral securities. When it is against collateral securities it is called Secured Overdraft and when the borrowing customer cannot offer any collateral security except his personal security, the accommodation is called a Clean Overdraft. The borrowing customer is in an advantageous position in an overdraft, because he has to pay service charges only on the balance outstanding against him. The main difference between a cash finance and overdraft lies in the fact that cash finance is a bank finance used for long term by commercial and industrial concern on regular basis, while an overdraft is a temporary accommodation occasionally resorted to. l. Demand Financing/Loans When a customer borrows from a banker a fixed amount repayable either in periodic installments or in lump sum at a fixed future time, it is called a loan. When bankers allow loans to their customers against collateral securities they are called secured loans and when no collateral security is taken they are called clean loans. The amount of loan is placed at the borrowers disposal in lump sum for the period agreed upon, and the borrowing customer has to pay interest on the entire amount. Thus the borrower gets a fixed amount of money for his use, while the banker feels satisfied in lending money in fixed amounts for definite short periods against a satisfactory security 4. REMITTANCE DEPARTMENT Remittance means a sum of money sent in payment for something. This department deals with either the transfer of money from one bank to other bank or from one branch to another branch for their customers. NBP offers the following forms of remittances. Demand Draft Telegraphic Transfer Pay Order Mail Transfer 4.1) Demand Draft

Demand draft is a popular mode of transfer. The customer fills the application form. Application form includes the beneficiary name, account number and a senders name. The customer deposits the amount of DD in the branch. After the payment the DD is prepared and given to the customer. NBP officials note the transaction in issuance register on the page of that branch of NBP on which DD is drawn and will prepare the advice to send to that branch. The account of the customer is credited when the DD advice from originating branch comes to the responding branch and the account is debited when DD comes for clearance. DD are of two types. Open DD: Where direct payment is made. Cross DD: Where payment is made though account. NBP CHARGES FOR DD5 Up to Rs. 50,000/- is Rs 50/- only Over Rs. 50,000/- is 0.1% 4.2) Pay Order Pay order is made for local transfer of money. Pay order is the most convenient, simple and secure way of transfer of money. NBP takes fixed commission of Rs. 25 per pay order from the account holder and Rs. 100 from a non-account holder. 4.3) Telegraphic Transfer Telegraphic transfer or cable transfer is the quickest method of making remittances. Telegraphic transfer is an order by telegram to a bank to pay a specified sum of money to the specified person. The customer for requesting TT fills an application form. Vouchers are prepared and sent by ordinary mail to keep the record. TT charges are taken from the customer. No excise duty is charged on TT. The TT charges are: Telegram/ Fax Charges on TT = Actual-minimum Rs.125. Cable telegram transfer costs more as compared to other title of money. In cable transfer the bank uses a secret system of private code, which is known to the person concerned with this department and branch manager. 4.4) Mail Transfer When the money is not required immediately, the remittances can also be made by mail transfer (MT). Here the selling office of the bank sends instructions in writing by mail to the paying bank for the payment of a specified amount of money. Debiting to the buyers account at the selling office and crediting to the recipients account at the paying bank make the payment under this transfer. NBP taxes mail charges from the applicant where no excise duty is charged. Postage charges on mail transfer are actual minimum Rs. 40/- if sent by registered post locally Rs.40/- if sent by registered post inland on partys request . 5. Department of HUMAN RESOURCE MANAGEMENT Human Resource plays a vital role in the success of every service organization. They interact between man and machine. Their attitude can win or loose the customer. The positive attitude could only be created in a conducive environment, which can make the staff dedicated towards the organization and its objectives. In reality the man is more important than machine as it is the human which could get maximum out of machine to keep a happy customer. However, most organizations give little importance to this very important asset.

Various aspects related to human resource of National Bank of Pakistan are critically examined in the following text: 5.1) Selection & Recruitment Although the Bank believes in merit but in practice the selection of employees is not done on merit. Most of the employees are low educated. This shows that candidates with some strong family background or political pressure are given preference in recruitment and qualified candidates are sometimes left behind. 5.2) Job for Life Like the employee of public sector organizations in Pakistan, the employees of NBP also enjoy their job for life. Since there is no risk of early retirement or redundancy in rank, they do not perform with their full potentials. This is one redundancy in rank, they do not perform with their full potentials, and this is one of the reasons responsible for the low productivity of the employees of the Bank. 5.3) Performance Appraisal The performance of employees of the Bank are appraised though their annual confidential reports at the end of each year. This has become an outdated method of performance appraisal and no longer used due to the following reasons: The performance of employees is evaluated after quite a long time. Element of subjectivity is involved in this method. Employees participation is not ensured in the process of evaluation. Objectives of employees are not quantified.

5.4) Inter Personal Relationship Modern management acknowledges human resources as one of the most important assets of an organization. But by their very nature, human beings are also the most unpredictable. Where a number of persons work together, interactions among them, of necessity, will lead to conflicts and NBP is no exception. Most interpersonal conflicts in NBP can be traced back to the following major heads. Lack of Communication Lack of communication is for the biggest reason for conflicts. Not only it is due to the failure to send a massage but to an interpretation given to the massage by the receiver is different from that intended. 5.5) Diversity in Values Diversity in values, perceptions, cultural background and life-style is another reason responsible for inter personal conflicts in NBP. Different values and perceptions about the same issue, event or personality hinder understanding. When things come to such a pavement, therefore, interpersonal conflicts are generated. The dominant trend in all modern industrial societies of the world is merit and expertise, which helps promote cohesion and reduce conflicts. But the feudalistic mindset is still very strong in our set up and there is no tradition of tolerance for differing viewpoints. Hence, interpersonal conflicts are generated.

5.6) Corruption Our social acceptance of corruption gives rise to corruption at every level of social and organizational set up. Corruption involves financial embezzlement, favoritism, nepotism, cronyism and other number of such practices. All these cause resentment that keep building up and lead to conflict sooner or later. In the past few years, some cases of frauds have happened in different branches. The reasons can be linked with the employee dissatisfaction of NBP. 5.7) Discipline & Authority Maintaining discipline and implementation of authority (tables) in letter and spirit is the key to success of any organization. In NBP, The authority tables are not strictly maintained. Line managers are not fully equipped with the authority with no vertical or horizontal interference. 6.) DEPOSIT DEPARTMENT: It controls the following activities: A/C opening. Issuance of cheque book. Current a/c Saving a/c Cheque cancellation Cash 6.1) Account opening The opening of an account is the establishment of banker customer relationship. Before a banker opens a new account, the banker should determine the prospective customers integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. Preliminary investigation is necessary because of the following reasons. Avoiding frauds Safe guard against unintended over draft. Negligence. Inquiries about clients. There are certain formalities, which are to be observed for opening an account with a bank. Formal Application Introduction Specimen Signature Minimum Initial Deposit Operating the Account Pay-In-Slip Book Pass Book Issuing Cheque Book 6.1.1) Qualification of Customer The relation of the banker and the customer is purely a contractual one, however, he must have the following basic qualifications.

 He must be of the age of majority. He must be of sound mind. Law must not disqualify him. The agreement should be made for lawful object, which create legal relationship Not expressly declared void. 6.1.2) Types of Accounts Following are the main types of accounts Individual Account Joint Account Accounts of Special Types Partnership account Joint stock company account Accounts of clubs, societies and associations Agents account Trust account Executors and administrators accounts Pak rupee non-resident accounts Foreign currency accounts 6.2 Issuing of cheque book: This deptt issue cheque books to account holders. Requirements for issuing cheque book The account holder must sign the requisition slip Entry should be made in the cheque book issuing book Three rupees per cheque should be recovered from a/c holder if not then debit his/her account. 6.3 Current account These are payable to the customer whenever they are demanded. When a banker accepts a demand deposit, he incurs the obligation of paying all cheques etc. drawn against him to the extent of the balance in the account. Because of their nature, these deposits are treated as current liabilities by the banks. Bankers in Pakistan do not allow any profit on these deposits, and customers are required to maintain a minimum balance, failing which incidental charges are deducted from such accounts. This is because the depositors may withdraw Current Account at any time, and as such the bank is not entirely free to employ such deposits. Until a few decades back, the proportion of Current Deposits in relation to Fixed Deposits was very small. In recent years, however, the position has changed remarkably. Now, the Current Deposits have become more important; but still the proportion of Current Deposits and Fixed Deposits varies from bank to bank, branch to branch, and from time to time. 6.4) Saving account Savings Deposits account can be opened with very small amount of money, and the depositor is issued a cheque book for withdrawals. Profit is paid at a flexible rate calculated on six-

month basis under the Interest-Free Banking System. There is no restriction on the withdrawals from the deposit accounts but the amount of money withdrawn is deleted from the amount to be taken for calculation of products for assessment of profit to be paid to the account holder. It discourages unnecessary withdrawals from the deposits. In order to popularize this scheme the State Bank of Pakistan has allowed the Savings Scheme for school and college students and industrial labor also. The purpose of these accounts is to inculcate the habit of savings in the constituents. As such, the initial deposit required for opening these accounts is very nominal. 6.5) Cheque cancellation: This deptt can cancel a cheque on the basis of; Post dated cheque Stale cheque Warn out cheque Wrong sign etc 6.6) Cash This deptt also deals with cash. Payment of cheques, deposits of cheques etc. 7. FOREIGN EXCHANGE/DEPARTMENT: This deptt mainly deals with the foreign business. The main functions of this deptt are: L/C dealing. Foreign currency accounts dealing. Foreign Remittance dealing. 7.1) L/C dealing 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. 7.2) Foreign currency account dealing: This deptt deals with the foreign currency accounts which mainly include dollar account, euro account etc. 7.3) Foreign Remittance dealing. This is very important function of this deptt. 14.General observation during Training Program TRAINING SUBSTANCE In this section topic discussed is as under: WORK PERORMED BY US

we joined National Bank of Pakistan, Shara-e-iqbal on 1st January 2011 and completed our internship programme on 28th march, 2011 . First day, the manager introduced us about the functioning of the branch and the staff. The manager told us that counter is the most important place of the bank. During the eight weeks of our internship, we worked in different departments of the branch and did the maximum practice of banking system details of which is as under: During the internship period I was assigned the tasks as fallow: 1. Data entry in computer 2. Maintaining D.Ds and T.Ts. Registers 3. Customer Dealing about the banks products 4. Maintaining the cash department. 5 Maintaining the I.T Department 6. Accounts opening and closing 7. Online banking 8. Maintaining saving and current accounts. 9. Observing the managerial decision making Dividing an organization into different parts according to their functions is called departmentation. So NBP Shara-e-iqbal branch is divided into parts. GENERAL BANKING First of all, we were asked to work in different sections of general banking. We are attached to Counter with Abdullah who has good command on this section. Here we dealt with new customer who wanted to get information and to deal with the branch. This is a very interesting department because here we met people of different types and deal with them accordingly. In this section, we observed the following functions: CHEQUE AT COUNTER A cheque to withdraw the amount is presented on the counter with the following requisites: 1 ... ... 2 ... ... 3 ... ... 4 ... ... 5 ... ... 6 ... ... Name of the Account Holder Current or previous date Amount in figures Amount in wording One signature of the account holder in the right bottom corner of the cheque and two signature of the bearer on the back Branch Stamp in front of the cheque

7 ... ...

If the Account Holder uses thumb instead of signature then the Pass Book is necessary with the cheque

Operations officer checks and verifies all these requisites. If it fulfills all the requisites, it is forwarded for payment after a certain procedure.

Cash Department: Cash department mainly deals in cash. The Head of department is Saeed and two cashier The objective of cash department: To facilitate people in the payments of their bills and taxes and repayments of cash There are two main functions of cash department. i. ii. Payment Receipts

Payments are the function that they pay their cheques and pay cash. Receipts mean collection of utilities bills, taxes etc.

General Banking Departments In this section of the bank the general banking function is performed. It is divided into five departments. Remittances Department. Computer Department. Advances Department. Clearing Department. Establishment Department. Remittances Department: This department is header by Baseer Agha a very competent person. The objective of this department is:To transfer the money of people from one place to another place in safe and comparable way The main functions of this department are: Issuing of demand draft. Issuing of Mail transfer. Issuing of Telegraphic transfer. Issuing of payment order. Issuing of call deposit. Pension payments etc. Closing and scrolling of government collections.

Advances department: Every bank has a department which advances money to borrowers. In NBP shara-e-iqbal branch the advances department is head by the Operation Manager Sir Saleem. He is very competent person. The objective of Advances Department is To facilitate people by giving short term and long term loans on easy terms and conditions. The main function of this Department is to take surplus money from the people at low rates and lend this money to borrowers at high rates to earn profit. Clearing Department: A clearing house is an association of commercial banks set in State Bank of Pakistan for the purpose of interchange and settlement of credit claims. In NBP Shara-e-iqbal Branch this department is headed by Sir Saleem having experience of about thirty years. The objective of this department is to To facilitate customers for payment their Cheques of other banks. Two type of clearing books are maintained. i) In word clearing books: The bank uses this book for the purpose of recording all the cheques that are being received by the bank in the first clearing. All detail of the cheques are recorded in this book. ii)Out word clearing book: The bank uses outward clearing register for the purpose of recording all the details of the cheques that the banks have delivered to other banks. Computer Department: This department headed by the Sir Saleem and two other persons Mr. Ali changazai and Mr.Baseer are performing the real function. The objective of this Department is to facilitate customers in payment of their cheques. The main functions performed by this department are: Checking balance. Deduction from balance on clearing cheques. Issuing bank statements. . Establishment Department: NBP Shara-e-iqbal Branch having an Establishment Department. This Department consists of only one person Amanullah very competent and experienced person. This department mainly deals with the branch employees. The main objective of this department is to To regulate bank business. Main functions of this department are: Keeps the record of attendance of employees. Employees salaries distribution. Employees bonuses etc.

15.MANAGEMENT INFORMATION SYSTEM (MIS) We worked in MIS/IT department and observed the system during internship all activities in IT department were noted and made some practical work there. MIS Analyst Main Responsibilities: - Assist in the development and planning of the management information systems which will provide timely financial information with respect to product profitability - Conduct financial analysis for proposed new products, business and other projects Work closely with business units to define the data. Responsibilities Prepare management accounting entries, maintain funds transfer pricing system rules and validate system output Prepare and distribute monthly management reports Respond to user inquiries on management accounting results Operate and maintain management accounting database. Management Information System (MIS) The National Bank Corporate System provides detailed information (MIS) which can help in controlling expenses. Monthly management reporting is an integral component of the corporate Card offer from National Bank. It gives the management and its employees a complete expense tracking mechanism. It also provides a reasonable credit period. Thus reducing your working capital requirement this will reduce the time and cost associated with expense control. The report package provides both Summaries and itemizations of charges and payments. The reports help you; Streamline expense control Analyze spending patterns Forecast future spending The Individual Card Member Billing Statement For convenience they give a one-glance statement that details each individual charge. It shows clearly all purchases, cash advances, applicable finance and service charges and amounts that remain outstanding month-wise. Consolidated Company Statement Useful for monitoring Card usage and payments, NBP Corporate Card system provides you with details of each Card Member's expenditure. It lists the date, place, amount of expenditure, the net amount payable by each Card Member, and at the end of the report, the grand total for the company. Individual Account Description once you nominate your employees to become NBP Corporate Card Members, you can receive reports. These will tell you in a variety of useful ways, how Card members are incurring expenses. Your employees simply need to charge expenses and pay back conveniently after receiving their statement. Card Members will receive a billing statement each month that lists their charges and payment activity. Cost Savings

Improved cash float: The Corporate Card minimizes the need for cash advances and the administrative burden involved in tracking & reconciling them. Moreover, Card Members are billed once every month, which helps improve the Companies cash flow. Better rates from Suppliers: Management Information (MIS) generated by the Bank Corporate Card System helps the Corporation identify new savings opportunities and support fact based negotiations with suppliers. The Merchant Spending Report provides cumulative spending by all Card Members split into the travel and entertainment heads for e.g. by Hotel property, airlines, travel agencies, ATM cash with drawl, car rentals, petrol etc. This information can be used to obtain better rates from suppliers, and realize tangible cost savings. No Interest costs: The Bank Corporate Card is a Charge Card wherein bills are payable on receipt. This inculcates financial discipline amongst employees, saving the Company unnecessary interest burden on overdue out standing. Corporate pricing advantage: Unlike other Cards, Bank Corporate Card recognizes your Company's buying leverage. As the number of Cards issued in a company increases the annual fee payable per Card keeps reducing saving costs to the corporation Reduced Administrative Burden Single Payment instrument: One Card for all your T & E requirements. The Bank Corporate Card significantly reduces paperwork involved in processing and paying multiple vendor bills across multiple travelers. It also eliminates the need to set up credit lines with a range of vendors used by your corporation. Flexibility: You can opt for a billing and payment methodology aligned to your internal accounting and reporting procedures. Multiple Billing & Payment Plan: Bank has the flexibility of sending bills to individual Card members or to a single recipient in your Company. You can also choose to pay Bank centrally or let individual Card members settle their own bills. Access to single vendor for all your travel related needs: As a Bank Corporate Card customer, you can access International travel partner, allowing you the convenience and efficiency of dealing with a single quality supplier for all your travel related requirements. Option of Individual and Corporate liability: You have the option of opting for the Corporate Card program with individual or corporate liability. Benefits to the employees Convenience: Ease of charging and accounting business expenses: Bank provides you with a billing statement that lists all charges on the Card date wise with

complete transaction details.So you know how much you spend and where. The descriptive billing statements help reconciliation of expenses Attractive spending limit: Unlike most other Cards the Bank Corporate Card provides the flexibility to the corporate to set spending limit for the company nominees. Frequent travelers find this facility extremely useful when handling large expenses and during unexpected situations such as extended business trips.Wide acceptance at quality establishments where business travelers normally incur business expenses. Bank Corporate Card is affiliated to Visa and is welcomed at all Visa Merchant Establishments. Global Customer Assistance Services: Visa provides the following Card related assistance services to Bank Corporate Card Members when traveling overseas. Lost/stolen Card reporting Emergency Card replacement Emergency cash disbursement Security / Insurance Cover Photo and Signature option for Individual Card Members Limited loss Card liability. Post reporting the loss of Card, liability is Nil. World Class Service 24 hour customer services delivered to international standards from all over the country. Membership Rewards: Bank Rewards Plus Program, Opportunity to participate in the most powerful Rewards program in Pakistan.. And it is so simple to redeem these points. The Card Member needs to accumulate a minimum of 150 reward points and at the end of the year can redeem these reward points against any items in the rewards catalogue. Other Benefits to Card Members Emergency Assistance Services that enables Card Members to obtain emergency legal/medical referrals while traveling overseas. MIS Supports to other departments The Management Information Services Department provides a variety of services relating to computer and telecommunications services, application software development, design and production services, and software training to all internal Town clients and departments. These services encompass personal computers, networks, printers, servers, and more. The MIS Department is an innovator in the field of information technology management, using a combination of management solutions that maximize effectiveness and minimize cost. The MIS Department also consults with other departments to analyze and select proper IT solutions for specific applications, provides internet access, computer training and support, and mobile computing solutions for Town departments. MIS coordinates all Town-wide core business functions and information technology administration. This includes accounts payable, utility billing, payroll administration, general ledger, budget, purchasing, human resource management systems, accounts receivable, permitting, code enforcement, police and fire dispatch and EMS reporting, and office automation.

System and Network Support Development and maintenance of the Town's core communication infrastructure and wide area network. Maintain file and application servers and network security management, software distribution, and technical support for hardware and software. Development: It Provides design, development, implementation services and continued support of special data, and databases town wide. Web Development The MIS Department designs, develops, implements and maintains the website. Information technology changes rapidly and new systems and technology are continually being implemented and installed. The MIS Department strives to translate this technology into higher productivity for departments, and higher quality output for reduced costs of operations that ultimately benefits the citizens of area.

16.Structure of the MIS Department

Head of Computer & IT (MIS) Dept Head of Technical Archive Head Head of Support & Head of System Design & Integration of Computer Head Head of Desin Operation Hea of fin. Admin. d of of He Comp & Comm. Sup Tech. ad uter H Manager port & Head fin. Oper W Sen. Oper. , ation Tech. Se Exper Sys Ad Sys Hea n. t OS dm. En Hea Sy Com g d s. m. Sen. Exp. database OS Tel. Proc. Sys Sen. Eng. Secretary / Typist Information Network & Internet Manager Internet /Intrane Web t Master Manage Senior r Analys t& Senior Analyst & Progra Programmer mmer

17. Functions of the MIS Department Having founded the information technology (IT) services industry more than 10 years ago, MIS delivers high value management consulting, electronic business solutions, business process management, and systems and technology expertise to help clients simplify complexity and achieve superior value in the digital economy. MIS Controller He infrastructures support group skills to provide front office internal advisory role on MIS related issues and... reputation both within the bank and externally. There are 4 main areas that comprise the department...; Financial Reporting and Control, Product Control, Regulatory Risk, and Business and Corporate MIS. Moves... business lines within a supportive setting and surrounded by skilled professionals.

Senior Accountant Senior Accountant is responsible for the enhancement of the control... business performance, through monthly commentaries and business reviews. This key role will see you... month-end reporting and MIS to the Front Office, Bottom of Form Business Analyst - Finance Change, Investment Banking He integrates programs within a Global Investment Bank based in the City. The suitable candidate will support... existing finance reporting systems across the bank. Both projects will look at reengineering the finance... platforms for General ledger and MIS Reporting, with specific responsibility for: Business requirement... Liaising with business and technical teams across the bank Suitable candidates will be a Qualified C# Lead Developer Collateral IT In the systems supporting the F2B business and will have an increasing role in new business... business. The role exists for a lead C# Winforms GUI developer on Collateral Portal, our next generation... suite of trader tools. The role will involve: Designing and establishing a simple GUI implementation Policy & Portfolio Reporting Analyst Internal Audit Role Leading Global Investment Bank Credit Product... A new position has arisen with this leading global investment bank for a Policy en Portfolio... Reporting Analyst to join the reporting team Main Duties of the role include: Technical data expert provide portfolio data analysis, quality assurance, MIS production for portfolio reports to understand. Major functions: (of Policy and portfolio Reporting Analyst) He explains the role of information technology as a business enabler and identifies and explains management information systems applications including customer relationship management systems, enterprise systems, e-commerce applications, transaction processing systems, business analytics, and emerging technologies. He evaluates the organizational fit and suitability of business applications and interprets the interaction between information technology, customers, processes, data, infrastructure, participants, and environment in an organization. He understands the ethical challenges of information technology and explains the evolving role of management information systems in the organization, and the role and careers of MIS professionals. 18. SWOT ANALYSIS SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats SWOT analysis is careful evaluation of an organizations 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. The overall evaluation of a company strengths, weaknesses, opportunities and threats is called SWOT analysis. In SWOT analysis the best strategies accomplish an organizations mission by: 1. Exploiting an organizations opportunities and strength.

2. 3.

Neutralizing it threats. 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. 1. STRENGTHS: 1.1 OLDEST INSTITUTION: NBP in one of the oldest bank of Pakistan and first nationalized bank Hence its customer base is strength from this plus point as customers have more confidence in the bank. The additional value services as the privilege for the bank. 1.2 ALTERNATE DUTIES IN SBP ABSENCE The NBP performs additional services for its customers as well as the other bank customer in the absence of SBP. 1.3 MORE DEPOSITS THAN OTHER BANK NBP has the relative competence in having more deposits than the other bank. This is because of the confidence the customer have in the bank. The bank being the privileged and oldest bank in banking sector of Pakistan enjoys this edge over all others, lacking it. 1.4 EMPLOYEE BENEFITS The employers at NBP are offered reasonable monetary benefit. Normally two bonuses are given Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional benefit and competency for the bank and a source of motivation for the employees. 1.5 BROAD NETWORK The bank has another competency i.e. it has broad-basses network of branches throughout the country also more than one branch in high productive cities. The customers are provided services at their nearest possible place to confirm customer satisfied. 1.6 STRICTLY FOLLOWED RULES &REGULATION: The employees at NBP are strict followers of rule & regulation imposed by bank. The disciplined environment at NBP bolsters its image and also enhances the over all out put of the organization. 1.7 PROFESSIONAL COMPETENCE The employees at NBP here have a good hold on their descriptions, as they are highly skilled Professionals with back ground in business administration, banking, economics etc. These professional competencies enable the employees to understand and perform the function and operation in better way. 1.8 HEALTHY ENVIROMNMENT

The working condition in the NBP branch here is very conductive and favorable for better output. The informal environment affects the performance of the employees in a positive way. 1.9 RELATION BETWEEN STAFF AND OTHER EMPLOYESS The bank enjoys a good plus point when it comes to the employee manager relationship the hearing as removing of discrepancies if any, between the employees, and between the manager and employees. 2. WEAKNESSES 2.1 LACK OF MARKETING EFFORT: The bank does not promote its corporate image, services, etc on a competitive way. Hence lacks far behind in marketing effort .A need for aggressive marketing in there in the era marketing in now becoming a part of every organization. The strong political hold of some parties and government and their dominance is affecting the bank in a negative way. They sometime have to provide loan under the pressure, which leads to uneven and adjusted feeling in the bank employees. 2.3 FAVORITISM AND NEPOTISM The promotions and bonuses etc in the bank are often powered by seniors favoritism or depends upon their wills and decision. This adds to the negative factors, which denominate the employees thus resulting in affecting their performance negatively. 2.4 LACK OF FINACIAL PRODUCT The bank falls far behind when the innovative and new schemes are considered. It has not been involved in the tug of war between the competitors to the accounts and strengthens the existing customer base. This stands out to be the major incompetence and weakness of the banks. 2.5 INEFFICIENT COUNTER SERVICES IN THE RUSH HOURS During the rush hours, the bank is founded out to be a total flop to handle the mob of people peaking from windows and doors. The bank has deficiency to operate in the stages of rush hours where the people find them services entangled in a situation of nowhere because they are not well served. 2.6 LACK OF COMPUTERIZED NETWORK The bank lack the strength of being powered by the network of computers, which have saved time, energy and would have lessened the mental stress, the employees have currently. This would add to the strength if it were powered by network of computers. 2.7 LACK OF MODERN EQUIPMENT The bank lacks the modern Equipment that is note counting machine computers. Even if there is any equipment they lack to fall in the criteria of being rearmed as update and upgraded 2.8 UNEVEN WORK DISTIBUTION.

The workload in NBP is not evenly distributed and the workload tends to be more on some employees while others abscond away from their responsibilities, which server as a demotivation factor for employees performing above average work. 3. OPPORTUNITIES 3.1 ELECTRONIC BANKING The world today has become a global village because of advancement in the 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 on line banking 24 hours a day. This would give a competitive edge over others. 3.2 MICRO FINANCING Because of the need for micro financing in the market, there are lot of opportunities in this regard. Other banks have already initiated, now the time has arrived when the NBP must realize it and take on step to cater an ongoing demand. 4. THREATS 4.1 EMERGENCE OF NEW COMPETITORS The bank is facing threats with the emergence of new competitors especially in terms of foreign banks. These foreign banks are equipped with heavy financial power with excellent and innovative ways of promoting and performing their services. The bank has to take initiative in this regard or will find itself far back in competition. 4.2 POLITICAL PRESSURE BY ELECTED GOVERNMENT The ongoing shift in power in political arena in the country effects the performance of the bank has to forward loans to politically powerful persons which create a sense of insecurity and demoralization in the customer as well as employees. The bank is currently acting upon the policy of downsizing which threaten the environment of the bank Employees feel insecurity in doing their jobs and work, hence affecting the over all performance of employees negatively. 4.4 CUSTOMERS COMPLAINTS There exists no regular and specific system of the removal of customer complaints. Now a day a need for total customer satisfaction is emerging and in their demanding consequences customer's complaints are ignored 19.COMPETITIVE ANALYSIS Porters five forces model: This approach is widely used for competitive analysis. It is because of the high intensity of competition among companies there five main competitive forces. 1. Rivalry among competitive firms:

It is a very powerful force among the competitive forces the strategies pursued by one firm can be successful only to extent that they provide competitive advantages over the competitor. These competitive strategies may be lowering prices, best quality series. The NBP offering very low charges an demand draft, telegraphy transfer, mail transfer and give other additional services to the customers and to the Nation. Because NBP is a Nations Bank. 2. Potential entry of new competitors: Whenever new firms ca easily enters a particular industry, the competition increases. The gout restriction, tariffs, patents etc can stop new firm to enter into the business as per Banking industry is concerned this market is already very situated in Pakistan and there are banks with quality services and low charges. So there is no threat to NBP from potential entry and NBP is also a public sector bank because of that no other new bank not takes over it. 3.Potential Development of substitute products: This is the third factor affecting the competitions. There may be some other product can be substitute the product of that industry. For example banks offering sawing schemes in Pakistan and these schemes are also offered by GPOs in Pakistan so they must compete them in this field. If they offer low rates than GPOs so people will go to deposit in GPOs. People concentration high rates so thats why sawing PLS accounts are more then current accounts. The next examples will ATM which substitute presenting cheques at counter and encash it. The NBP is lacking in this field. It must improve in this field to compete the competitors. 4. Bargaining Power of Suppliers: The bargaining power of supplier affects the intensity of competition, especially when there are a large number of suppliers. In case of banks the suppliers are customers they supply the money to banks. Now they must offer good services, quality, and safety. Low charges etc to customers. In this field NBP is very good. B/C at offers good quality services to customers. They charge low charges on remittances. So thats it is competitions other banks. 5. Bargaining Power of Consumers: When customers are concentrated or large, or buy in volume, their bargaining power represents a major force affecting intensity of competition. Now the number customers in Pakistan for banks are very high. Banks offering variety of products and services to their customers. NBP have a large number of customs. Now it must offer good services and products to their customers to attract them to come to NBP.

20.Conclusions The National Bank of Pakistan plays a key role in the strategic national development. The bank has historically been the financial arm of the government and has enjoyed the blessings of state support in the form of huge public sector funds and deposits.

In contract to other banks populating the FSI sector, NBP is mandated to uphold public interest. It is critical too as all other banks and NBFIs in public sector have been closed down or merged with NBP.

In contract to other banks populating the FSI sector, NBP is mandated to uphold public interest. It is critical too as all other banks and NBFIs in public sector have been closed down or merged with NBP.

The current management of National Bank of Pakistan was hired purely for their international experience, business orientation to turn around a purely public institution into a sustainable and commercially viable bank serving public interest along the lines of a large modern commercial bank.

The National Bank of Pakistan has effective budgeting system in place. Annual budget of the bank is approved by the Board and monthly comparisons of actual results with the budget are prepared and reviewed by the senior management.

The National Bank of Pakistan has a comprehensive framework of written policies and procedures on all major areas of operations such as Credit, Treasury Operations, Finance, Internal audit and Compliance approved by the Board.

The National Bank of Pakistan provides sustainable financing for growth of industries of critical national importance such as energy, education, healthcare, transport, shipping, Research & development.

21.-Recommendations The National bank of Pakistan should be fully prepared in its management of financial crises and its business continuity planning, within the standing committee framework, and should work with others to strengthen national crises management preparations. The bank should improve the quality of training of its employees and the integrity, controls and efficiency of its systems, processes and financial reporting.

The bank should improve its recruitment, retention and development and to reform the Banks pension scheme.

The bank should renegotiate the Banks long term financial framework and to overhaul the Banks financial system.

The Bank should improve IT capability in the analytical areas and to develop a medium term strategy for banking and market operations.

The National bank of Pakistan should monitor the impact of its operations on the environment, which is mainly through the use of power and the generation of waste.

NBP, being the only lending arm to the government for public sector development should design, develop and deliver product and services for economic growth.

The bank should provide support to the Micro, Small and Medium enterprises thereby reducing unemployment and helping to create a more equitable distribution of wealth.

The NBP should adopt modern banking tools and techniques. Quality leadership, clear vision, investment in IT infrastructure and human resource development.

The bank should develop software for pension disbursement. As for as Islamic Banking environment is concerned the management and employees of NBP should work together for basic research for discovering their own laws, developing theories or concepts for the better direction of their own business environment according to Quran & Sunnah.

The branches should reduce its large expenses in order to increase the value of the bank. The NBP should strengthen incentives and accelerate a results-oriented training and communications programs for management and staff.

The National Bank of Pakistan should implement a financial inclusion program to meet the needs of underserved economic subsectors, including outreach programs to meet the requirements of the agriculture, housing, SME and microfinance sectors.

The National Bank of Pakistan should introduce a framework for consolidated supervision and reorganize the regulatory architecture to allow better regulation and supervision of financial control division of bank.

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