INTERNSHIP REPORT ON THE NATIONAL BANK OF PAKISTAN SWABI

NATIONAL BANK OF PAKISTAN

(SWABI BRANCH )

This Internship report is submitted in partial fulfillment of the requirements

for the degree of Bachelor of Business Administration (HRM)

By

ZAIN UL ABIDEEN

REG. NO: B (A) F 15-32

Department of Management Sciences

University of Swabi

Session (2015-2019)
INTERNSHIP REPORT ON THE NATIONAL BANK OF PAKISTAN SWABI

NATIONAL BANK OF PAKISTAN

(SWABI BRANCH )

This Internship report is submitted in partial fulfillment of the requirements

for the degree of Bachelor of Business Administration (HRM)

ZAINUL ABIDEEN

REG. NO: B (A) F 15-32

Department of Management Sciences

University of Swabi

Approved by:
___________________ __________________
Mr. Name:
(Internal Supervisor) (External Supervisor)

___________________ __________________
Mr. Said Shah Dr. Arif
(Head of Department) (Internship Coordinator)

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 AKNOWLEDGEMENT

Innumerable thanks to Almighty ALLAH, whose unlimited and unpredictable sources

of help made me able to win honors of life. I also pay all my respect to last Holy
Prophet Hazrat Muhammad (PBUH) who is a beacon to well wishes of mankind and
his faithful companions, who are forever a true torch of guidance for humanity as a
whole.

The internship reported in this manuscript was conducted under the kind supervision
of Mr. Muhammad Nisar Khan lecturer in Bacha Khan University Charsadda (BKUC),
Khyber Pakhtunkhwa. I am most grateful to acknowledgement his help, cooperation,
valuable suggestions and sympathetic attitude throughout the course of this Internship
Report.

Lastly, I admit that I can’t write all my well-wishers here, as the space can’t let me to
proceed. From the core of my heart, I want to acknowledge them and may ALLAH
can return them with a better reward.

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TABLE OF CONTENTS

Chapter No. Title Page #

Preface .............................................................................................. 1-5

Acknowledgment ............................................................................... 06
Executive Summary...........................................................................................

Chapter–1: Introduction Report .............................................................. 08

1.1 Background of the study ……… ........................................... 08
1.2 Purpose of the studies ............................................................ 08
1.3 Scope of study........................................................................ 08
1.4 Methodology ......................................................................... 09
1.5 Scheme of the report .............................................................. 09
Chapter-2: Overview of National Bank of Pakistan ……………………………11
2.1 Introduction ............................................................................ 12
2.2 Banking History ..................................................................... 12
2.3 Islamization of Banking ........................................................ 13
2.4 History of NBP ………………………………………………14

2.5 Role of NBP in Economic Development ………………15

2.6 Competitors ...................................................................... 16-17
Chapter -3: Organization Structure of NBP……………………………………18
3.1 Board of Directors(BODS) in Alphabetical order ………..18-19
3.2 List of senior management of NBP …………………………..20

3.3 Deferments of NBP……………………………………21

3.4 Clearance Departments……………………………………..22-28
3.5 Services of NBP…………………………………………….29-30

Chapter-4: Financial Analysis of NBP ............................................ ……..31

4.1 Financial Analysis ................................................................. 31
4.2 Ratio Analysis .......................................................... ……31-45

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Chapter -5: Swot Analysis ……………………………………………………….46
5.1 Introduction…………………………………………………..46
5.1 Strengths …………………………………………………….46
5.2 Weaknesses ……………………………………………….47-48
5.3 Opportunities ………………………………………………..48
5.4 Threats ……………………………………………………….48

Chapter -6: Recommendations & Conclusion…………………………………..50

6.1 Recommendations ............................................................. 50-51
6.2 Conclusion ……………………………………………… 52-53

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CHAPTER 1
INTRODUCTION OF REPORT
1.1 Background of the Study
For the completion of Bachelor of Business Administration (BBA) degree, it is important for
a student of UNIVERSITY OF SWABI to undergo an internship in any financial or non-
financial institution for a period of 8 weeks. The purpose of this internship is to gain practical
knowledge of the theory that has been studies during the whole course work and also to gain
knowledge about the professional working environment and professional ethics.
This current internship report is about the National Bank of Pakistan (NBP). This bank have
about 1346 branch in whole country. I did my internship report in NBP Main branch Swabi.
During my internship period I got experience in different sections, such as Bills/remittances
section Credit section and Government section. NBP was developed in 1949, since then, the
bank has expanded branch network and became the largest bank in Pakistan. This bank offers
diverse services and product line to their customers in the market.

1.2 PURPOSE OF THE STUDIES

The aim of this project is to gather important information and knowledge about NBP in order
to compile the internship report, observe different problems inside the organization and
suggest the best solution for them as well as to get practical experience in order to boost the
personal skills.

1.3 SCOPE OF STUDY

The scope of the study is confined to the National Bank of Pakistan Main branch Swabi. The
main focus of this report is to highlight different procedures undertaken inside the bank.
These procedures include deposit, foreign exchange and remittances. In the similar way,
different features of all of the procedures are also mentioned in this report.

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1.4 METHODOLOGY
Methodology means the tools and techniques that are used to complete the study. As this
study is based on the two months internship in NBP Main branch Mardan (0365), so the
methodology of the report includes data collection from both primary and secondary data: the
primary data is mostly based on discussion with the staff members of the branch and
secondary data includes manuals published by the bank as well as annual reports. The annual
reports were used for the financial analysis part of the report.
The primary and secondary data sources, further, are as follows in detail:
1 Primary Data:
 Interviews of staff members of the bank
 Personal observation of the working environment of the bank

2 Secondary Data:
 Annual Reports
 Manuals
 Internet sources

1.5 SCHEME OF THE REPORT

This report consists of six chapters. Each chapter is discussed briefly below:

Chapter 1: Introduction

An introduction chapter introduces the background, methodology, scope, purpose and scheme
of the report.

Chapter 2:

The second chapter is about Overview of the NBP and includes introduction, History of NBP
and its Role etc.

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Chapter 3: Organizational Structure of NBP

The third chapter discusses the structure of the organization and includes departmentalization,
Board of Directors and Senior Management NBP.

Chapter 4: This chapter is about Financial Analysis of the NBP. Which shows the financial
performance of the National Bank of Pakistan.

Chapter 5: This chapter is SWOT Analysis. Which shows the Strengths, Weaknesses,
Opportunities and Threats of NBP.

Chapter 6: This is the last chapter of the report. In this chapter is gives some suggestions and
recommendation about NBP

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CHAPTER 2

OVERVIEW OF NATIONAL BANK OF PAKISTAN

2.1 Introduction

NBP was recognized on November 9th, 1949 under the NBPRegulation of 1949 for the
purpose to deal with the condition of crisis that were raised due to the trade impasse with
India and also due to deflation of their currency. At the start NBP got identified with
possibility to increase credit to agriculture market. The frequent process of developing an
economical organization under the Organizations Law was set aside and State bank was
identified with the promulgation of an Control due to down sides scenario that had created in
regards to jute financing.This Financial institution started its functions from Nov 20, 1949 at
six essential jute facilities in the eastern Pakistan and instructed its sources in funding of
plants of jute. The Karachi and Lahore branches were consequently started out in Dec 1949.

Actual of obligations of NBP is a bit unique and different from other financial institutions.
The Financial institution serves as broker to the SBP to handle Federal/Provincial
Government Invoices and Payments to deal with.

This bank has also played a crucial part in giving funds to the country’s increasing business
that has increased in recent times as differences took place. Nowadays the Financial
institution financial situation export/import business to track of about Rs. 52.7 billion dollars,
while in 1960 funding under this go was only Rs. 1.54 billion dollars.

2.2 Banking History

Economical in basic cultures persisted in some type. The original business was done on
“barter” which intended an return of “commodity for commodity”. There is a belief also
about the innovation of cash, which informs that master developed cash in 800 B.C. He had
written them on an eight legs rock during the town. Two popular wats or temples are also
kept in mind for the loaning and credit in different dealings. One was the forehead of Ephesus
and the second was known as the forehead of Delphi. It is said that the first standard bank
was recognized in Spain's capital in The country. Another declaration informs that “Venice”
and “Genoa” was the hub of economic dealings and the first standard bank was recognized
there in Fourteenth millennium. The first community standard bank that was recognized was
in Malaysia in later part of the time.

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2.3 Islamization of Banking
Another important improve a trustworthiness of Pakistan Cost-effective Program was the
offered of zero attention economical in chosen Expert Financial companies with impact type
Jan1, 1981. This followed your time as well as to removed attention from the process of
Country economical dedication believe in, the House Building Fund Organization of
Pakistan. Certain changes were made in economical and other recommendations with the
product of ushering in a new program of financial, which would validate of Sharia. A new
law Modaraba Companies Control 1980 was promulgated. Individual interest’s 100 % free
places began to function in all the nationalized professional banks. The state standard
financial institution provides finance against contribution term certification and also against
promissory understands increased by Modaraba certification.

In order to protect zero attention dealings certain economical information such as creditors,
customer, and developments functions and remains were improved. Conditions concerning
way of business in which banks may communicate with may also have been customized
methods were proven offer zero attention financial loans to formers and worthy students.

A personal Restricted Organization known as as Lenders Value limited was integrated in

1979 to give economical aid to the professional market mainly on zero attention base. A plan
to improve zero attention effective financial loans to town entrepreneurs and fishers has also
been offered. Instead of attention, a program based on mark-up in price, come back rate
differential, and benefit and loss referring to information were offered.

For the purpose of islamization, the financial institution functions different economical
methods, which are as follows:

 Musharika
 Hire Purchase
 Modaraba

BANKING WITH NO INTEREST

A new concept of zero interest cost-effective was provided almost 30 decades ago and by
now it has been identified on sound floor and new designs and techniques are being used to
make this method outcome targeted. New produces and their systematic consumption are

10
making Pakistani cost-effective identical to their several modern solutions anywhere in the
entire globe.

2.4 History of NBP:

 Initial Stage:
NBP got recognized on Nov9th, 1949 under the NBP Regulation of 1949 for the purpose to
deal with the condition of crisis that were raised due to the trade impasse with Indian
government and also due to deflation of their currency. At the start NBP was identified with
possibility to increase credit to the agriculture market. The frequent procedure of developing
an economical organization under the Organizations Law was set aside and the SBPgot
identified with the declaration of an Control due to down sides scenario that had created in
regards to financing of jute business.
NBPstarted its setup from 20 Nov, 1949 at 6different necessarycenters of jute in East
Pakistan and absorbed its income in financing of jute. The Lahore and Karachi offices of the
bank were opened in Dec, 1949. The responsibilities of this bank are different from that of
other banks because of its nature of work. NBP is acting as an agent to the SBP for handling
receipts and payments of Federal/Provincial government representing their side. NBP has
played a vital role in the development of growth of trade that got prolongedas the years
passed. Following are the phases through which NBP has passed:
 Influential Stage 1950’s
When NBP was first established it had approved investment Rs.60 thousand. In 1950
stocks of financial institution were sailed too and taken up and by 1951 NBP had began forex
trading company. The regulation that was approved during beginning of NBP was revised to
add common professional financial company as well and by 1952 it was experienced that
growth of NBP was so tremendous that it is highly recommended as broker of SBP. Thus
upto May, 1952 National bank of Pakistan had occupied the Govt treasury. The growth of
National Bank of Pakistan was goodupto 1959 when it had 129 full-fledged branches as in
comparison to other banks.

 Growth Stage 1960’s

The development initiatives were put into power during (1950 – 60) years. Under the
University and College Financial plan, presented in 1962 all divisions of NBP conducted
University Financial in the property of chosen educational institutions.

11
 By Dec 1969 NBP had 720 divisions, 713 at home and 7 in international nations.
Investment strategies of NBP raised to Rs.1, 874 billion at the end of July, 1965.The
financing that was similar to the developments of the bank in 1960, were raised to one third at
the end of July 1965.
 Developmental Stage 1970’s
In now more growth and growth and growth of cost-effective features in the world the
number of organized offices of the mortgage lender got improved from 1,591 at the end of
July year 1965 to 3,133 at the near of July year 1970. During the same traditional financial
institution credit to the personal company improved from Rs.5, 789 million to Rs.9, 492
million. There was also a huge growth effectively properly properly secured, which got
improved from Rs.6, 883 million in July year 1965 to Rs.13, 147 million up to July year
1970.
The 1970’s experienced the nationalization of Pakistani professional financial
institutions working in the nation. On Jan 1, 1974 NBPbeside 13 other bankswere
nationalized by the declaration of the Banks Nationalization Act in 1974.
The several years of the 70’s showed a significant change at National Bank of
Pakistan. In 1972 there was re-arrangement in the management of top level of the financial
institution.

 New Initiatives & Confronts (1990’s-2009)

National Bank has been capableof taking solutions to a much increased number of Pakistani’s
all over the nation due to developing changes. Today it has more than about 6 thousand
annals. It preserves a name in all chief economical facilities of the world through its 18
international divisions and 5 associate workplaces.
In 1995 NBP became the first economical institution in Pakistan with an initial down
payment platform that surpassed the Rs.500 billion dollars represents to become the biggest
economical institution in the nation. Total remains of the economical institution have since
increased to Rs.625 billion dollars by end of Apr 2009. NBP carries on to provide effective
help in supply of solutions like Hajj solutions, selection of expenses, paying of retirement
living to central/provincial Govt pensioners, as well as military employees.

2.5 Role Of NBP In Economic Development

Financial institutions play vital role in promotion of the economical actions and financial

12
development and development of a nation. Market, farming, business, business and numerous
other financial actions are dependent highly on banks. Financial institutions help in
deployment of money. They also assist to promote the development of interior assets for
development through enticing relics into investment and productive loan. Financial
institutions not only gathers savings but also give advances for development of industry.

The National Bank of Pakistan was the 1stfinancial institution to presentcredit plan to small
debtors like farm owners etc, for the purpose to promote farming. The financial institution
developments generous credit score for farming and rural development. Short-term loans are
given to farm owners with no interest charging. Such advancements could be seeds, seeds and
farming implements.

The National Bank of Pakistan is advancing finances to industries on small-scale for short
period of time i.e., 5 years; it has initiated the credit score for the common man at the huge
range compared to the previous facilities. The primary purpose of the bank is to take part in
the development of the country. National Bank of Pakistan also will support the
establishment and promotion of fresh companies by purchasing their shares. Apart from this,
the bank also underwrites to earning of the forex trading with its business in forex trading
both overseas and in Pakistan.

National Bank of Pakistan has also been playing a big part in developmental and financial
activities in Pakistan. It will help in development of the economy in all areas. It has vastly
contributed to financial development of Pakistan and also has helped the industry and
business in a wide span of different operations.

National Bank of Pakistan is able to entice lots of jobless people with the help of its huger
number of allover in Pakistan and also giving loan to such people who want to start a
business.

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2.6 Competitors
There are several other’s Bank which are acting as the Competitor’s to NBP.
These are following Bank;
 Allied Bank of Pakistan Limited
 Askar Bank Limited
 Bank of Allfalah Limited
 First Woman Bank
 Habib Bank limited
 Muslim Commercial Bank
 My Bank limited
 The Bank of Khyber
 The Bank of Punjab.
 United Bank Limited

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CHAPTER 3

ORGANIZATIONAL STRUCTURE OF NBP

3.1 BOARD OF DIRECTORS (BODS) IN ALPHABETICAL ORDER

Table 1

Name of BOD Designation

Muneerkamal Chairman

FarrakhQayyum Director

Iftikhar A. Allawala Director

Muhammad Naeem Director

Rana asad Amin Director

Shahid Aziz Siddique Director

Tariq Kirmani Director

Syed Ahmed Iqbal Ashraf President

Syed Muhammad Ali Zamin SEVP & Secretary To BD

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3.1.1 Management

Management is a discrete procedure that consists of organization, activities of planning,

controlling and actuating achieve din order to accomplish and find out the stated goals with
use of the other resources and human being.

There are two types of management:

1. Centralized Management: In centralized management, the decision making process
flows from top management to the employees.
2. Decentralized: In decentralized management, the decision are made at mid or low
level staff and flow to the top level management.

Hence, the NBP is following the centralized type of management. This is so because in NBP,
the decision are made by the top level management and flow downwards to the low level
management.

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3.2 LIST OF SENIOR MANAGEMENT OF NBP
Table No: 2

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3.3 DEPARTMENTS OF NBP

Departmentalization is the process of dividing an organization into different sectors/parts

according to their performance and working areas.

A) DEPARTMENTS IN THE BRANCH OF MY INTERNSHIP

3.3.1 Department of Cash

The duties of cash department are described below:

3.3.1.1 Receipt
The money that is going out of the bank or is receiving by the bank must be recorded. Thus,
this is the duty of cash department perform this duty. The bank’s deposits are recorded in
ledger accounts. The bank maintains separate ledger accounts for every customer

3.3.1.2 Payment of Cheques

Cheque is a negotiable instruments used to draw money from the account on demand. Cheque
is a kind of bill of exchange and a cheque must will contain the all of the characteristics that
are shown in Section 5 of Negotiable Instruments Act, 1881.

3.3.3 Payments
The primary contract of the banker is to repay the cash that has been deposited by the
customers through his cheque or bank transfer.

3.3.5 The Prerequisites of Cheque

To draw a cheque, there are no specified words, but here are mentioned some of the
important parts that should be included in every cheque presented for drawing money.
i) It should be in writing form
ii) There should be no condition to draw a cheque
iii) Could be only drawn by a person who’s name or account number is mentioned
iv) Sum Certain in money
v) Payment on Demand only
vi) Signed by the drawer as well as the account holder

3.3.6 Parties Involved in Drawing a Cheque

In a normal cheque there is a drawer, a payee and a drawer.

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3.3.7 Cheque Types
Cheques have the following types:

a) Bearer Cheque
A bearer cheque is cashed by those who present it to the bank. Bearer Cheque could also be
called as open cheque.

b) Order cheque
Such kind of cheque could also be cashed at counter, but there should be name of the drawer.
Drawer of such cheque will also attach his/her identity card with the cheuqe.

c) Crossed Cheque
A cheque that is not cashable at the counter is called as crossed cheque. This cheque instead
goes to the payee’s account directly through clearing process. The clearing of this cheque
takes at least 24 hours or at most 48 hours. This type of cheque is mostly used in private
institutions to transfer salary to the account holder.

3.4 Clearance Department

The clearance department deals with the clearing of cheques of other banks i.e., if a customer
is an account holder of NBP and his salary cheque give to him by his organization is of other
bank, then the clearance department has the duty to accept this cheque from their customer
and send it to the respective bank for clearance through NIFT (National Institute of Funds
Transfer). When the NIFT clears this cheque and mark it as a valid cheque, the they send it
back to the respective NBP branch through their agent. Then the salary will be transfer by the
clearance department to that customer’s account.

After the end of secondWorld War, the banking sectors started to grow very quickly. The use
of cheques is thus got very quick. Especially the organizations used to give the salary to their
employees in cheque. The cheque transfer is most reliable and safe technology of funds
transfer from one place to another place at that time.

3.4.1 In-Word Clearing Books

In-word clearing means if a customer brings a cheque and that account holder has account in
that bank, then it is the responsibility of the bank to immediate cash that cheque and give
money to their customers.

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3.4.2 Out-Word Clearing Book:
The clearing of cheque that is of another bank and the customer has the account in the bank
where he/she presents the cheque is called out-ward clearing. This process is done through
NIFT.

3.4.3 Department of Advances

This department is one of the delicate and significant divisions of lender. This department
issues loans to both individuals and company. There are several demands that should be
fulfilled by the one who is taking loan. The advances are managed by the credit division of
Head office of NBP. For loan given to individual, it is necessary to keep mortgage with the
bank. The mortgage could be property, machinery or jewelry. The need for mortgage is
important because if the borrower is not able to pay the monthly installments, then the bank
will take over his/her’s property or whatever that is kept as mortgage. When the borrower
submits application for the loan, then the credit division of the bank send these documents for
approval to credit division of the head office. The head office then sends to approval of the
loan, if the documents are satisfactory.

For a company, it is important to go through the process of recommendation form thatgives

information about the financier.

3.4.5 Principles of Advances

There are about five rules that needs to be observed duly while giving advances to the
borrowers.
 Liquidity
 Safety
 Remuneration
 Suitability
 Dispersal

(i) Safety
Resources of the banker consist of cash obtained from various clients on different records
such as Current account, Down payment account andPLS account. It signifies that
whatsoever cash the financier keeps of their clients who have commissioned the financier

20
with it only just because they have complete assurance in the professional managing of cash
by their financier. Therefore, the financier should be cautious and make sure that the cash of
his depositor is innovative to safe hands where the risk of loss is not are available. The
components of personality, potential and investment can help a financier in coming to a
summary regarding the protection of developments permitted by him.

a) Character
The first thing in identifying the protection of enhance, for there is no alternative for
personality. The personality of the borrower can specify his objective to pay back the
enhance since his loyalty & reliability is of main significance. If track history of client
demonstrates his reliability has been doubtful, the financier will avoid giving loan to him,
particularly when the investments provided by him are insufficient.

Its responsibility on the financier to make sure that his client is a person of personality and
has potential sufficient to pay back the cash obtained such as the interest.

b) Capacity
This is the control capability aspect, which informs how effective a company has been in
previous and what upcoming choices. A business owner may not have wide money, but with
audio control capabilities, such as the understanding of a particular company, he may make
his company very efficient. On the contrary if a person has no knowledge of the particular
organization for which he wants to find sources from the investor, there are more
opportunities of reduction to the investor.

c) Capital

This is financial platform because the cash spent by owners symbolizes their trust in industry
and its’ upcoming. The function of professional financial institutions is to give short-run
investment for business & market, yet some debtors might persist that their lenders offer most
of main town needed. This creates the financier a person. As such the financier must reflectif
the cash asked for is affordable to debtors own sources or speculation.

(ii) Liquidity

Resources indicates it is likely that accessing the developments in immediate, because all the
money obtained by the client is repayable in group sum on requirement. Usually, the debtors
pay back their cost-effective features continually, and time thus launched could be used to let

21
other loans to other debtors. If the client specifications for an enhance for the buy of set
sources the investor should reduce because it shall not be possible for him to pay off when
the investor wants his client to pay off the amount. Hence, the get ready must go through
deliberation over the concepts of sources very careful.

(iii) Dispersal
The dispersal of the amount of enhance should be usually based so that great variety of credit
customer may take advantage of the banker’s resources. He must see that from his money
useful he improvements them to several of industry like company, industry, farming, farming,
little company, property projects and various other need to be able of main issues. Dispersal
of improvements is very necessary from the purpose of protection as well, because it reduces
down on chance of recovery when something is not able in one particular industry or in one
region.

(iv) Remuneration
A major section of the banker’s income comes from attention billed on the cash obtained by
the customers. The financier needs adequate income to fulfill the following:
a. Salaries and edge benefits due to the employees.
b. Interest due to the cash placed with him.
c. Provisions for a source finance to fulfill unexpected contingencies.
d. Overhead cost and devaluation and servicing of the set resources of the bank.
e. An adequate sum to fulfill possible failures.
f. Payment of benefits to the investors.

(v) Suitability
The words “suitability’ is not to be taken in its regular unreal feeling but in the wider feeling
of announce. It indicates that improve should be permitted not only to the successfully chosen
and appropriate debtors but also corresponding to the overall nationwide growth applications
protected out by the regulators involved. Before flexible a client the trader should make sure
that loaning is for a objective in sticking to the present nationwide credit plan set down by the
main traditional financial institution from the.

2.4.6 Forms of Loans

Moreover to buy and discounting of costs, creditors in Pakistan usually provide in the type of
money finance, banking consideration credit and loans. NBP provides improvements to
different people in different ways as the situation need.

22
a) Cash Finance
If the consumer does not apply complete limit, the investor has to lessen come back again on
the un-utilized amount. To be able to much healthier and healthy out this decrease, the
investor may be an element towards a appropriate running harm in the cash fund agreement,
according to which the consumer has to pay markup/service expenses on at least on self or 1 /
4 of the sum of cash fund limit able to him even when he does not apply that amount.

This is a very common way of credit score rating by expert and expert problems and is
developed available either against dedication or hypothecation of items, produce or items. In
cash fund you happen to be able to take credit score from the investor up to a certain limit,
either at once or as and when requested.

b) Overdraft/Running Finance
This is the most common form of conventional traditional standard bank lending. When a
person needs short-term property his investor allows distributions on his condition in excess
of the amount which the cash position customer has in credit ranking position ranking, and an
overdraft consideration concern consideration problem issue problem thus happens. This
resorts are generally allowed against security cost-effective dedication opportunities. When it
is against security cost-effective dedication opportunities it is known as “Secured Overdraft”
and when the cash position customer cannot offer any security security except his personal
security, the resorts are known as a “Clean Overdraft”. Your credit ranking position ranking
customer is in an beneficial set up an overdraft consideration concern consideration problem
issue problem, because he has to pay service expenses only on the amount excellent against
him. A big difference between a cash finance and overdraft consideration concern
consideration problem issue problem can be found in the fact those funds finance is a
standard conventional standard bank finance used for durable by professional and
professional problem on consistent basis, while an overdraft consideration concern
consideration problem issue problem a short-term property sometimes turned to.

c) Demand Financing/Loans
When a person gets from an investor a little bit repayable either in frequent expenses or in
team sum at a little upcoming time, it is known as a “loan”. When creditors allow loans to
their prospective clients against protection cost-effective dedication possibilities they are
known as “secured loans” and when no protection security is taken they are known as “clean
loans”.

23
The variety of loan is placed at the borrower’s fulfillment in team sum for a lot of your
overall as well as framework recognized, and the money position client has to concentrate on
the whole amount. Thus the customer gets a little variety of money for his use, while the
investor seems satisfied in lending advantages set quantities for certain brief periods against a
extremely effective protection.3.5 Remittance Department
Remittance indicates some funds sent in cope for something. This division provides with
either the come back again of money from one conventional cost-effective organization to
other conventional cost-effective organization or from one division to another division for
their prospective clients. NBP provides following kinds of remittances.Pay Order
a. Demand Draft
b. Mail Transfer
c. Telegraphic Transfer

a) Pay order

Pay buy is made for local return of money. Pay buy is the simplest, simple and secured way
of return of money. NBP requires set portion of Rs. 25 per pay obtain the distinction
proprietor and Rs. 100 from a non-account proprietor.

b) Demand Draft
Need set up is a well-known method of return again. The consumer fills up upupup the
acceptance. Kind contains the heir name, problem variety and a sender’s name. The consumer
is still quantity of DD in the department. After the cope the DD is prepared and given to the
customer. NBP regulators look for the cope in issuance logon on the website of that
department of NBP on which DD is drawn and will get prepared the assistance to offer to that
department. The considered on the customer is recognized when the DD the help of arriving
department comes to the responding department and the main distinction is debited when DD
comes for acceptance. DD are of two kinds.
I. Open DD: Where direct payment is made.
II. Cross DD: Where payment is made though account.

c) Telegraphic Transfer
TT is the fastest way of making remittances. Telegraphic come back is an order by telegram
to a conventional traditional bank to pay a specified sum of money to the specified individual.
The consumer for asking TT fills up upupupupa interest rate. Discount rates are able and sent

24
by common e-mail to keep the history. TT price is taken from the customer. No excise
responsibility is billed on TT. The TT expenses are:
d) Mail Transfer
When the cash are not necessary immediately, the remittances can also be made by e-mail
come back (MT). Here the marketing workplace of the normal traditional financial institution
provides recommendations released by e-mail to the making an investment traditional
traditional financial institution for the selling of a specified sum of cash. Debiting to the
buyer’s issue at the marketing workplace and crediting to the recipient’s issue at the making
an investment traditional traditional financial institution promoting under this come back.
3.5.1 Human Resource Management Department
Personal Resource performs a significant part in the achievements of every company. They
link between man and program. Their mind-set can win or limit the client. The valuable
mind-set could only be made a good atmosphere, which can make the employees devoted
towards the company and its goals.

Various factors appropriate to individual sources of Nationwide Standard bank of Pakistan

are seriously analyzed in the following text:

3.5.2 Selection & Recruitment

Although the Traditional bank opinions in benefits but actually the choice of workers is not
done on benefits. Most of the workers are low experienced. This demonstrates applicants
with some impressive family qualifications or govt stress are given choice in profession and
certified applicants are sometimes left behind.
3.5.3 Performance Appraisal

The performance of employees of the Standard bank are examined though their annually
personal opinions at the end of each season. This has become an outdated strategy of
performance evaluation and no more time used due to the following reasons:

1. The efficiency of workers is analyzed after quite a long time.

2. Element of subjectivity is associated with this technique.

3. Employee’s contribution is not assured at the same time of assessment.

4. Objectives of employee’s are not quantified.

25
3.5.4 Inter Personal Relationship
Modern management is aware of hiring as one ‘of the most important resources of an
organization. But by their very features, people are also the most unexpected. Where a
amount of people work together, emails among them, of need, will cause to conflicts and
NBP is no different. Most public conflicts in NBP can be monitored returning to the
following important brings.

3.5.5 Lack of Communication

One of the top for issue is no interaction. Absence of interaction occurs due to two purpose
either by not receiving the content by the recipient or by an presentation of the content by the
recipient is different from the intended.

3.5.6 Diversity in Values

Wide range in ideas, opinions, community qualifications life-style is another reason
accountable for inter personal disputes in NBP. Different ideas and opinions about the same
issue, event or character restrict knowing. When things come to such a road, therefore,
community disputes are designed.

3.4 SERVICES OF NATIONAL BANK PAKISTAN

Services
Alternatives are he outcomes of the organization which are in intangible kind. NBP provides
following solutions to folks.

3.4.1 Demand Drafts

If you are looking for a secure, fast and effective way to modify money, you can now buy
NBP’s Need Creates at very good costs. Anyone whether a currency trading consideration
person that owns the loan provider or not, can get a Need Set up from a standard bank
department.

3.4.2 Letter of Credit

NBP is devoted to providing its company clients the biggest variety of choices in the area of
cash exchange. If you are a professional business then our Letters of Credit score rating
support is just what you are looking for. With competitive prices, protection, and convenience
of cope, NBP Figures of Credit score rating are the best way to do your transactions.

26
3.4.4 Traveler’s Cheques
Traveler’s Cheques are versatile devices, and there is no restriction on sufficient time frame
of reliability of the Cheques. Rupee traveler’s examine is available at all 700 sections of
NBP. This can be covered in all 400 sections of NBP. The your oyster on buy of this
examine. It is one of the safest ways of having money.

3.4.5 Pay Orders

NBP provides another reason to return your money using our functions. NBP pay buys are a
secure and secured and simple way to go your money from one position to another. And, as
frequent, NBP costs for this assistance are certainly competitive. The costs of NBP are very
low all over the Pakistan. It costs Rs 50/- for NBP associates on offering one deal buy. And
costs Rs 100/- for NBP non-account entrepreneurs on offering one deal buy.

27
CHAPTER 4

FINANCIAL ANALYSIS OF NBP

4.1 FINANCIAL ANALYSIS

Financial analysis vary from organization to organization and from purpose of the analysis.
There are several financial statements used in the process of financial analysis i.e., Balance
Sheet and Income Statement. Balance shows the current financial position of an organization,
while income statement shows the profit or loss of the particular organization. Financial
analysis for the current report are mentioned below.

4.2 Ratio Analysis

Ratio is the comparison between two figures of stability piece and income statement. Ratio
analysis contains technique of decoding economical percentages to accessibility the
efficiency of any company. The primary feedback to ratio research is benefit and reduction
consideration and stability piece. Rate research of any company is in attention of its lenders,
workers, investors and of its control as well. Both current and potential client are enthusiastic
about the ratio research of company. Research contains technique of decoding economical
percentages to accessibility the efficiency of any company. The primary feedback to ratio
research is benefit and reduction consideration and stability piece. Rate research of any
company is in attention of its lenders, workers, investors and of its control as well. Both
current and potential client are enthusiastic about the ratio research of the bank. Financial
analysis allows for comparison:

 Between industries
 Between companies
 Between a single company and its industry average
 Between different time periods for a company

28
HORIZONTAL ANALYSIS

Horizontally research is also called as Listed Analysis. The evaluation of fiscal reports is
achieved by establishing up stability linens and earnings claims, part by part and examining
the deviations that have happened in separate groups there in after season to season and over
decades. This evaluation of fiscal reports over a period of time also shows route, speed, scale
and skills of pattern or changes overall. The purpose of the horizontal research is to create
association among one product of the economical declaration with the similar product of
another year’s economical declaration, financial institution or with industry.

For our economical research of NBP has been chosen the economical data for 2 years starting
from 2013 to 2014. For horizontal research there should be a fixed season for the season of
research or conferring to the mathematical tools each preceding season is chosen a platform
season for buy i.e. the season of research. All economical declaration products of the
platform season are taken as similar to 100 (percent). We have chosen 2012 as the platform
season and the products for following season are indicated as an catalog to that season
(2013).and 2013 as the platform season and products for following season are indicated as an
catalog to that season (2014).

The horizontal research of fiscal reports of NBP Bank is given below displaying indexed
stability linens and earnings claims along with regular claims.

29
 Balance Sheet National Bank Limited

For the Year ended December 31, 2015/2016/2017

31st Dec 2015 31st Dec 2016 31st Dec 2017

PKR 000

Cash and Balance with treasury 115657025 131843344 158756638

banks

Balences with other banks 30743368 28070350 30895173

Lendings to financial institutions 23051171 43973531 8280997

Investments 301078498 319353392 342964635

Advances 478886755 528121596 661344807

Operating fixed assets 27620697 29064564 29714221

Deferred tax assets 6954228 7972626 3466503

Other assets 54026725 66567009 80737483

Total assets 1038018467 1154966422 1316160457

LIABILITIES

Bills payable 8006631 9104710 143667639

Borrowing from financial 19657207 27671746 51112248

institutions

Deposits and other accounts 832134054 927410553 1038094985

Sub-coordinated loans

Liabilities against assets subject to 123413 92739 38353

finance lease

Deferred tax liability

30
 Other liabilities 46798330 54732458 56369170

Total liabilities 906719635 1019012206 115982395

Net assets 131298832 135954216 156178062

Represented by:

Shareholders equity

Share capital 13454629 16818285 18500114

Reserves 25129425 26212505 30305210

Inappropriate profit 67103611 69640893 70629495

Total equity attributable 105687665 112671683 119434799

shareholders of the bank

Minority interest 498076 720518 79087

106185741 113392201 120225677

Surplus on revaluation of assets-net 25113991 22562015 35952385

of deferred tax

Total shareholders equity 131298832 135954216 156178062

Source: annual report 2017

4.1.1 Liquidity Ratios

The liquidity status of bank is just like a pool or reservoir. It may be some times sufficient
and may be depleted sometimes.

This term could be defined as:

“The ability of the bank to meet its current liabilities is called liquidity of the bank. If this
ratio is less than one, it indicates there is near to its liquidity position and vice versa”.
Different liquidity ratios are defined as below and their analysis for NBP are shown as
follows:

31
1. Current Ratio

This ratio calculates the capability of a bank to deal with its current liabilities through its
current assets. The value is this ratio must be greater than 1. The basic concept about this
ratio is to find out that whether the company is able to meet its current liabilities or not and
also to make sure that there are sufficient current assets with the bank to avoid liquidity
situation. The formula for this ratio is as follows:

Formula = Current Assets / Current Liabilities

Y e a r 2 0 1 7 2016 2 0 1 5 2014 2 0 1 3 2 0 1 2

Current Ratio 1 . 0 9 1 . 0 8 1 . 0 8 1 . 1 0 1 . 0 8 1 . 5 4

Current Ratio
2

1.5
1

0.5

0
2012 2013 2014 2015 2016 2017

Analysis
The table shows that the NBP has a very reasonable current ratio in all year. Since it has a
ratio greater than 1, means that the bank has higher current asset than current liabilities. In the
year 2015 the ratio is decreased but next year it is on increasing rate.

2. Acid Test Ratio/Quick Ratio

This ratio calculates the firm’s ability to meet its current liabilities based on liquid assets.
This ratio could be calculates as:

Avg. Current Asset-Prepaids(Advances)

Quick ratio =
Avg. Current Liabilities
Y e a r 2 0 1 2 2013 2 0 1 4 2015 2 0 1 6 2 0 1 7

Quick Ratio 0 . 5 4 0 . 4 9 0 . 5 4 0 . 5 4 0 . 5 3 0 . 5 1

32
 Quick Ratio
0.56
0.54
0.52
0.5
0.48
0.46
2012 2013 2014 2015 2016 2017

Analysis:

The ratio shows that the firm is in stable position regarding paying their liabilities through
most liquid assets in three years i.e. 0.54% in 2012, but in 2013 the firm ability to pay its
liability through most liquid assets has decreased to 0.49 %.

3. Cash Ratio

It shows the ability of the firm to cover its current liabilities with its cash only. This ratio
further means a bank has sufficient amount of cash to back up its deposits. The formula for
cash ratio is as follows:

Formula = Cash / Current Liabilities

Y e a r 2 0 1 7 2016 2 0 1 5 2014 2 0 1 3 2 0 1 2

Cash Ratio 0 . 1 3 0 . 1 4 0 . 1 3 0 . 1 3 0 . 1 2 0 . 1 2

Cash Ratio
0.15

0.14

0.13

0.12
0.11
2012 2013 2014 2015 2016 2017

33
Analysis:

The cash ratio on NBP is almost stable in all the four years. It means that NBP has
maintained a stable position in paying its current liabilities through cash.

34
4.1.2 Financial Leverage Ratios

1. Debt to Equity Ratio

It depicts that to which extent an organization is backed by debt. This ratios shows the
commitment of shareholders vs the commitment of obligators, lenders and creditors. The
higher value of DTE ratio shows the good position of the bank regarding liquidity. The
formula for this ratio is as follows:

Formula = Total Liabilities/ Total Shareholder’s equity

Y e a r 2 0 1 7 2016 2 0 1 5 2014 2013 2012

Debt to Equity Ratio 11.97 11.16 9 . 2 0 8 . 7 6 8.73 7.82

Debt to Equity
15

10

0
2012 2013 2014 2015 2016 2017

Analysis
The debt to equity ratio of NBP has increased each year, which means that NBP is getting
more debt each year. This is not a good sign for NBP because the higher the ratio, higher the
bankruptcy risk.

2. Debt to Asset Ratio (DAR)

It shows the percentage of firm asset which is backed by debt. This ratio could be measured
as follows:

DAR = Total debt/total asset X 100

Y e a r 2 0 1 7 2016 2 0 1 5 2014 20 13 20 12

D A R 8 8 . 5 8 9 . 3 8 7 . 6 8 8 . 4 87.9 85.8

35
 Debt to Asset Ratio
90

88

86

84
2012 2013 2014 2015 2016 2017

Analysis

This ratio is related that if the risk is high it means that the ratio is high and if the risk is low
the ratio will be low. It is clear from the calculation that the ratio is high therefore it shows
that high portion of assets is acquired by debt financing. The graph shows that the value
decreased in 2014 from previous year (2016) so it means the risk is decreased a little bit.

3. Profitability Ratios
The going concern principle of the bank could be made sure by earning adequate profit to
deal with all of the expenses and liabilities. Adequate level of profit enables an organization
to meets its obligations timely and it also shows the efficiency of an organization. A bank
with good earning stays for long time in the market and also remains competitive. Following
are the profitability ratios.

4. Gross Profit Margin Ratio

This ratio shows the profit of an organization comparative to total sales, after subtracting the
cost of production of interest expense or goods. This ratio calculates the efficiency of an
organizations’ operations and gives an indication to price its product.

Formula = Gross Profit / Interest earned (Revenue) X 100

Y e a r 2 0 1 7 2016 2 0 1 5 2014 2013 2012

Gross Profit Margin % 38.57 43.63 49.11 48.85 47.8 46.9

36
 Gross Profit Margin
60

40

20

0
2012 2013 2014 2015 2016 2017

Analysis
The above table shows the gross profit margin of NBP for the year 2012 – 2017. In the table
it could be seen that the GPM ratio is higher for the bank in 2015 i.e., 49.11. moreover, the
bank has higher profit margin in this year. This also shows that NBP has the good market
share in this year. The GPM ratio for the year 2012 to 2017 are 46.9%, 47.8%, 48.85%,
49.11%, 43.63% and 38.57% respectively.

5. Net Profit Margin Ratio (NPMR)

The NPMR calculates the profitability of sales of the firm after subtracting income taxes and
all expenses. It shows the net income per rupee of sales.

Formula = Net Profit after Taxes / Interest earned * 100 year

Y e a r 2017 2 0 1 6 2015 2014 2 0 1 3 2 0 1 2

Net Profit Margin % 5.55 14.92 18. 4 7 19. 8 5 18.9 17. 7 6

37
 Net Profit Margin
25
20
15
10
5
0
2012 2013 2014 2015 2016 2017

Analysis
Net profit margin shows negative trend means that it is on decreasing rate and was the highest
in the year 2014 as it is 19.85%. The NPMRis low in the year 2017 i.e., 5.5%. This ratio is
decreased due to the bad political in Pakistan and global economic condition

6. Assets Turnover

Assets turnover ratio is used to find out that how much of revenue is gerated from each asset
in an organization. If the value of this ratio is low, it means that the assets turnover is higher
and vice versa.

Formula = Revenue/ Total Assets

Y e a r 2 0 1 7 2016 2 0 1 5 2014 2013 2012

Asset Turnover 0 . 0 7 2 0.076 0.082 0.085 0.086 0.088

Assets Turnover
0.1

0.05

0
2012 2013 2014 2015 2016 2017

38
 Analysis
The year 2017 shows a ratio of 0.072 which is lower compared to the rest of years. As
mentioned above that the company with greater profit margin tends to have lowest asset
turnover, so the ration is low in 2017 which shows that NBP has high profit margin.

7. Return on Investment

This measure the value of the firm in generating profit within existing assets.

Formula = Net income after taxes / Total Assets x 100

Y e a r 2 0 1 7 2016 2 0 1 5 2014 2 0 1 3 2 0 1 2

Return on Investment 0 . 4 0 1 1 . 4 1 5 . 3 1 6 . 9 16.87 1 5 . 7

Return on Investment
20

15

10

0
2012 2013 2014 2015 2016 2017

Analysis
There was a sharp decrease in the utilization of the resources till 2017 i.e.., 16.9 (2014), 15.3
(2015), 11.4 (2016) and 0.40 (2017). The ratio is decreased to 0.40 in the year 2017, which
shows that this year was not good for the NBP.

8. Interest Coverage Ratio

It shows firms ability to cover its interest charges. This ratio could be calculated as:
Formula = Earnings before interest & Taxes / Interest expense
Y e a r 2 0 1 7 2016 2 0 1 5 2014 2013 2012

Interest Coverage Ratio 0 . 1 1 0 . 3 7 0 . 5 3 0 . 5 3 0.52 0.56

39
 Interest Coverage
0.6

0.4

0.2

0
2012 2013 2014 2015 2016 2017

Analysis
The payment of interest by the bank is much more important in relation with the revenue
generated by the bank. The interest coverage ratio of NBP is decreasing year by year as
shown in the graph above, which means that the ability of the NBP is lower to pay its interest
expense.

9. Return on Equity:
It is the measure of the management of the capital to get the desired profit. A high ROE
usually replicates the acceptance of the firm of strong opportunities of investment and
efficient management of expense.

This ratio is calculated as:

ROE=Profit after taxes/Shareholder’s Equity x 100

Return on Equity
20

15

10

0
2012 2013 2014 2015 2016 2017

Analysis

The table above depicts that that the ROE is decreasing due to the decrease in net profit. It
shows the earning power of the shareholder’s is decreased.

40
 10. Investment to Deposit Ratio

IDR ratio depicts the linkbetween deposits and investment. This ratio could be calculated as
total investment divided by total deposits.

Investment to Deposit Ratio = Investments / Deposits *100

Y e a r 2 0 1 7 2016 2 0 1 5 2014 2013 2012

Investment to Deposit % 3 6 3 4 3 3 3 6 3 7 3 6

Investment to Deposit
38

36

34

32

30
2012 2013 2014 2015 2016 2017

41
Analysis

From the above graph it is very much clear that NBP is not using their deposit very
efficiently for earning high profits. In 2014 the ratio is 36% and in 2015 it decreased to 34%
and 33 respectively, while again in 2017 it is increased to 36% again.

11. Advances to Deposit Ratio

It shows the relationship between advances and deposits by dividing advances on
deposits.
Advances to Deposit Ratio = Advances / Deposits *100
Y e a r 2 0 1 7 2016 2 0 1 5 2014 2013 2012

Advances to Deposit % 5 5 6 3 5 7 5 7 5 8 5 6

Advances to Deposit
65

60

55

50
2012 2013 2014 2015 2016 2017

Analysis

This ratio indicates that what is the borrowing rate of the bank compared to the deposit rate?
In 2014 and 15 the thisratio is same i.e. 57 %while in 2016 the ratio is increased to 63%. In
2017 the advance to deposit ratio is decreased again to 55% which is the lowest in all years.

42
CHAPTER 5

SWOT ANALYSIS
INTRODUCTION

SWOT stands for strengths, weakness, opportunities, and threats. The SWOT analysis for
NBP are as follows:

In this analysis the best strategies achieve a mission by an organization by:

1. Developing an organizations strengths and opportunities.
2. Correction its weaknesses.
3. Getting threats neutralizing.

SWOT analysis is one of the most important steps in developing strategy using the company
objective as a perspective to evaluate inner strong points, unique capabilities and weak point
and exterior possibilities and risks. The goal is to then develop good strategies and
manipulate possibilities and strong points reduce the effects of risks and avoid weak points.

5.1 Strengths:
 Oldest Institution
This bank is oldest in Pakistan. This bank also has the honour of getting first nationalized
bank of Pakistan. These are the reasons of this bank for its strength.

 More Deposits than Other Banks

This bank has the capability in having much more level of deposits compared to other banks.
The reason behind higher deposits is that this bank is the oldest and customers have trust and
faith in this bank.

 Employee Benefits
One of the strengths of NBP is that NBP is paying its employees an extra monetary benefits
i.e., allowances on Eid-ul-Azha and Eid-ul-Fitar. Thus, this feature enables the bank to attract
more competitive employees.

43
  Board Network
This bank has the broader network of branches in the market and in all of the high productive
cities have NBP branch, which is another benefit for the bank.To confirm satisfaction of the
customers; the bank provides its services to the nearest possible place.

 Strictly Followed Rules and Regulation

In NBP, the employees are following the rules and regulations very strictly. Due to this the
performance of the bank is also increased and it is a strength for the NBP.

 Professional Competence
The workers in NBP are highly professional and skilled, due to this the employees are having
a good hold on their descriptions. These skills are core competencies of the bank that enables
the employees to perform and understand the operation in a better way.

5.2 Weaknesses:

 Lack of Marketing Effort

The first weakness of NPB is lacking of marketing strategies and efforts. For NBP there a
need for aggressive marketing strategies as this is the era of marketing and due to marketing
the society become aware about the operations of the bank.

 NBP under Political Pressure

As NBP is a government bank, therefore there is political pressure on getting employees
hired. As the employees who are hired under political influence, they are not as competitive
as the employees who is hired on his talent and skills. This is a weak point that can put in
danger the performance of the bank.

 Favoritism and Nepotism

As it is stated earlier that NBP is a government bank, that’s why the employee who has more
political attachment will have the change of more favoritism. Due to the favoritism, the
performance of other talented employees is ignored and they don’t get as much appreciation
(whether monetary or non-monetary) as they should be given.

44
  Inefficient Counter Services in the Rush Hours
NBP is a well-known bank in the country and therefore, there are more customers coming to
the bank compared to other banks. Due this high load of customers, NBP should have more
counter services in order to deal all of its customers timely and effectively.

 Lack of Computerized Network

NBP in their head office and branch offices don’t have computerized network, due to which
the operations of the bank are affected. Due to this drawback the employees working have
more mental stress and communication inside the bank is a bit difficult.

 Lack of Modern Equipments

Note counting maching is a modern equipment and NBP doesn’t possess that. Due to note
counting machine, more time is saved and less human efforts are needed to count a bumble of
notes.

5.3 OPPORTUNITIES:

 Electronic Banking
The modern world is also reffered as global village. In this global village the bank should
now avail much modern technologies in order to make efficient its services. New
technologies enable an organization to faster its services and with this also the human efforts
could be made lessen. NBP is now lacking of electronic banking system which should be
adopted as soon as possible.

 Micro Financing
To avail micro financing service, there are a lot of opportunities to increase the production for
the bank. Other banks has also availed this service and are increasing their market share by
adopting most newly invented technologies.

5.4 Threats:
 Emergence of New Competitors
As a Pakistan is highly productive and industrialized country, for this reason the need of bank
is increasing day by day. Due to this increasing of number of bank, the NBP is facing threat
of new competitors in the market. Especially foreign banks are rushing to Pakistan now a
days and the reputation of foreign banks is good compared to local banks.

45
  Political Pressure by Elected Government
As the government changes, the new poltical government has their own demands and
requirements from all of the government instuttions (both financial and non-financial). Thus,
the banks gets more political pressure as the government changes, and it is a challenging
situation to deal with every new government.

 Downsizing
By downsizing, most of the employees feels insecurity about their job and by this the
employees get dishearten and it is a major threat to the working environment and by this also
the employees get demotivated towards work.

 Customer Complaints

There is not particular system for the recording of suggestion and complaints of the
customers in NBP. In order to get the satisfaction of the custoemrs, there should be a proper
mechanism of listening to their queries about the bank and also these queries needs to be
given a proper attention.

46
CHAPTER 6
RECOMMENDATIONS & CONCLUSION

National Bank of Pakistan, a name that is admired in modern banking of today’s world. As
organizations are run by human, that’s why they are not out of remedial actions. For this
reason, there are some findings and recommendations made to NBP. NBP is an efficient and
profit making organization. It has a well-established system to deal the customers and given
them proper response and attention. Apart from all these qualities, there are some
recommendation that i want to suggest to the bank and all of these substation are noted and
observed by me during my internship period and study. Some of the recommendations are as
follows:

6.1 Recommendations

 PROFESSIONAL TRAINING

Professionalism is a key factors in boosting the performance of the bank. When ever a new
employee is hired, he/she should be given proper training regarding his/her workings and
professional behavior that is necessary for the survival of that employee as well as for the
professionalism of the bank.

 DELEGATION OF AUTHORITY

With the duties, there exists some authorities, so by assigning duties to the employees, they
should also be given some authorities. There are many manuals that could be used for the
said purpose.

 PERFORMANCE APPRAISAL

In order to keep the employee motivated, he/she should be given a proper performance
appraisal. For this purpose, the bank should have a proper system for performance evaluation
and appraisal of the efficient employees.

 TO OVER COME PROBLEM OF SPACE AND FURNITURE

Most of the branches of the NBP are small in size. The space should be increased
accordingly. This happens so because there is more burden on this bank compared to others

47
as this is a government bank and also act on behalf of the government in several cases like
pension distribution etc.

 TRANSFER

Job rotation is an important strategy to keep the employees more trained and knowledgeable.
Job rotation is also a key factor to keep the employee motivated towards work. This is not a
better practice that each employee work on the same post for long period of time. With job
rotation another important activity is transfer of employee. Transfer is important to get the
employee more experienced. The experience is gained by the employees by working in
different working environment. Therefore, NBP should follow this strategy in order to get
itsemployees motivated and experienced.

 NEED OF QUALIFIED STAFF

Due to the government intervention, the employees of the bank are not as much qualified as
they should be. The qualified staff, thus, are needed for the professionalism of the bank. The
staff should be hired not due to his/her political influence but should be hired based on his/her
technical skills and knowledge or talent.

 UTILITY BILL CHARGES

The bank currently charges about 6 to 8 rupees for a processing of a utility bill. This is a very
hard work and needs a lot of human efforts, for this reason, the charges of utility bills should
be increased from 8 to 10 rupees per transaction. This will enable the bank to get more profit.

 STAFF RELATIONSHIP:
If the relationship between the employees in an organization are good, there will be more
professional environment of that organization. Good relationship also leads to the high
performance.

 INSTALLING VALIDATOR AND ATM

Validator is a machined that used to count the notes while ATM (automated teller machine) is
used to check the credit of an account holder as well as he/she can withdraw money from this
machine. I the branch of my internship, there is no ATM and validator machines which are
most important for the attraction of new customers to the bank.

48
6.2 CONCLUSION

This current internship report is about the National Bank of Pakistan (NBP). This bank have
about 1346 branch in whole country. I did my internship report in NBP Main branch Mardan
(0365). During my internship period I got experience in different sections, such as
Bills/remittances section Credit section and Government section. NBP was developed in
1949, since then, the bank has expanded branch network and became the largest bank in
Pakistan. This bank offers diverse services and product line to their customers in the market.
The basic aim of this report is to gather the important information and knowledge about NBP
in order to compile the internship report, observe different problems inside the organization
and suggest the best solution for them as well as to get practical experience in order to boost
the personal skills. The methodology of the report includes data collection from both primary
and secondary data: the primary data is mostly based on discussion with the staff members of
the branch and secondary data includes manuals published by the bank as well as annual
reports. NBP is found a pure financial institution, this bank also has its own environment
based on culture and functions. There no doubt that NBP is one among the successful
banking institution, the reason for this is that it a government bank and performs many
operations for the government. Apart from all these, there is still a need for change to get
more customers attracted. Some recomendatios are also mad ethat the bank should adopt
modern technologies i.e., validator and ATM machine in its Mardan main branch (0365). It
is concluded that the employees in the bank are proessional but most of them are hired due to
their political attachmnets and thus are no meeting the criteria for their respective jobs.
Overall the employees of the bank are found professional especially their upper management.
The branch of my internship has a well professional environment and a lot of customers are
attached to this branch.

49
BIBLIOGRAPHY
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