Internship Report on National Bank of Pakistan (NBP) 2009
Introduction
Before dividing wall of the subcontinent, the entire banking system was almost in the hands of Non-Muslims. When Hindu capitalists become certain of the division of the sub continent, they transferred their fund to India in safe places. There was also a mass scale migration of Non-Muslims from Pakistan to India, which also caused a decrease in the bank deposits.
At the time of independence in 1947 Pakistan’s Commercial banking facilities were almost jammed according to a plan. The following lines will give us a fair view of the situations, which were prevailing at that time.
INDUSTRIAL SECTOR
Pakistan had practically no industries except a few textile mills and only produced food grains and agricultural raw materials; most of the industries were situated in the areas, which now constitute India.
LACK OF BANKING FACILITIES
NATIONAL BANK OF PAKISTAN LIMITED
INTRODUCTION:
National Bank of Pakistan maintains its position as Pakistan's premier bank, determined to set higher standards of achievements. It is the major business partner for the Government of Pakistan with special emphasis on fostering Pakistan's economic growth through aggressive and balanced lending policies, technologically oriented products and services offered through its nation wide branches.
ESTABLISHMENT:
National Bank of Pakistan was established under the National Bank of Pakistan ordinance 1949 and it came into existence on November 20; 1949.Its main aim was to provide all types of banking services to the government and private sector.
The bank also handles treasury transactions for the Govt. of Pakistan as agent to State Bank of Pakistan.
SHARE CAPITAL
Issued Capital
The bank was setup with an issued capital of Rs.1.5 million.
Authorized Capital
Authorized capital of National Bank of Pakistan in 2000 was Rs.2.5 Billion.
Issued, Subscribed, and Paid-up Capital
Issued, subscribed and paid-up capital in year 2000 was Rs.1.46 Billion.
MANAGEMENT
Board of Directors:
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, called the Board of Directors.
Management Committee:
Also there is a Management Committee consisting of nine senior executives of the bank, called the members and the president who is also the chairman of the committee.
Branches:
National bank of Pakistan carries on its business through a wide network of branches. These branches perform their functions under the supervision of local principal offices and head office in Karachi.
The bank has 1428 (1999:1408) branches in Pakistan and 23 (1999:23) overseas branches.
Training and Management Development Wing:
National bank of Pakistan has its national and development centers and 4 staff collages at: -
1. Karachi
2. Lahore
3. Peshawar
4. Islamabad
In these centers and staff colleges, the banking training is provided to the officers, managers, and to potential managers. It arranges courses and seminars for middle and higher management in all. Each year almost 1500 persons receive training over there.
Objectives of National Bank of Pakistan:
National Bank of Pakistan’s primary objectives are:
To earn the profit
To develop the economy
To provide the latest banking facilities to its customers
To improve customer service
To offer specialized services to major corporate
To reduce the size of non performing loans (NPL’S)
FUNCTIONS PERFORMED BY NATIONAL BANK OF PAKISTAN
To fulfill the basic objectives of socio-economic nature the bank perform following important functions:
• Accepting of deposits
This function is performed by the bank by opening of the different type of accounts, which are as follows:
Saving Account Current Account Fixed Deposits N.I.D.A. account
• Advancing of loans
Different types of loans are granted to different type of people and industries these include:
Running Finance
Over Draft
Demand Finance Gold
• Payment of cheques
Cheques drawn against various deposits are honored and paid in cash
• Payment of pensions
This function is performed by N.B.P. as a govt. treasurer all the pensions of federal govt. provincial Govt: and semi Govt: employees is paid by NBP
• Salary management of different governmental institutions
The salary of govt. and semi govt. employees is first credited to the account of NBP and is then credited to there personel accounts
• Issuing of traveler’s cheques
The traveler’s cheques are issued by NBP for secure transfer of money from one place to another, without charging any commission.
• Collection and sale of prize bonds
The national prize bonds are purchased and sold at the branches of the NBP according to the rules formulated by the SBP.
§ Collection of fees and money from people proceeding on Hajj pilgrimage
National Bank collects the fee from the people proceeding for hajj and act as there agent.
• Transfer of funds from one place to another
Money is transferred from one place to another by different means like
Bank Draft Mail Transfer Telegraphic or Telephonic Transfer Travelers Cheques
• Collection of Chalans
Various Govt. revenues are collected by NBP in the form of chalans
• Issue Guarantee And Indemnity
• Collection Of Negotiable Instruments
• Act As Income Tax Advisor
• Act As An Agent Or Representative Of His Customer
A number of banks closed their branches with the result that only 81 branches remained open on 30th June 1948 out of 487 in 1947. As their head offices were in India and most of their Hindu staff fled to India. Imperial Bank of India, which was conducting government, receipts and payments work closed down most of its branches thus blocking the funds needed most by the government
MANAGEMENT AND ORGANIZATION OF BANK
Board of Directors
In the management of the bank the board of directors is at the top of the controlling bodies. Since there are no private shareholders, so there is no general meeting of shareholders and no directors are elected. The board consists of a nominated president, a secretary and 6 other members.
After nationalization in 1974 most of the powers have been transferred to the executive board.
Executive Board:
It is also called the management committee. The general direction and supervision of the affairs of the bank lies in their respective executive boards. The president, secretary and 6 other members of the board are appointed by the federal govt.
The president being the chief executive controls the affairs of the bank.
Chief Executive:
The president is the administrative head of the bank. He manages and controls the affairs of the bank. The president holds the office at the pleasure of the federal government.
Regional chiefs:
In order to improve the performance of the banking system, the bank has appointed regional chiefs also. The regional chief has the powers of sanctioning finance and other credit facilities.
There are 7 regional head quarters of the regional chiefs of the N.B.P., 1 is in the N.W.F.P., 1 is in Balochistan, 3 are in Punjab, and 2 are situated in Sindh.
Zonal Chiefs:
Each region is divided into number of zones. they hold the post of VP or AVP and administer these zones.
N.B.P. has 37 zonal offices in Pakistan.
Branch managers:
Each zone is then sub divided into a no. of branches. The control and supervision of each branch is mostly entrusted to AVP or officer of grade II.
Deposits are important to the bank as a backbone is to the body of a man. They are the lifeblood of the bank. National Bank of Pakistan and all other commercial banks perform the function of deposit accepting from the general public by offering suitable rates of interest on them, or on simply a promise to repay on demand.
OPENING OF ACCOUNT BY AN INDIVIDUAL:
After entering into bank premises the person goes through the following steps for opening an account in the bank and for becoming a bank customer.
1. An Introduction:
The first important step to take place in bank is to get satisfactory introduction of the person, who wants to become bank’s customer.
This introduction is made from the person /party who are respectable and honorable and have an account with the bank.
In N.B.P (Circular Road Branch) the branch manager takes great care of this step and gets introduced with the person himself. His main intention is to determine the prospective customer’s integrity, respectability, occupation, and nature of business he is doing at the time of opening an account.
2.Account Opening Form and Specimen Signature Card:
Now the person is provided with an application form known as Account Opening Form.
This form contains: -
i. Title of account
ii. Address
iii. I.D. Card number
iv. Telephone No. (Office and Residence)
v. Introductory reference (all above mentioned particulars of introducing him)
vi. Signatures of the applicant
vii. Amount deposited
viii. Check book series No.
The customer will attach a copy of National Identity Card with the form.
Specimen Signature Card:
Specimen of signatures will be obtained from depositor at the time of opening his account. A specially designed card is used for this purpose; the card must be countersigned by an official of the bank not below the rank of an officer.
3.Account Opening Register:
Now the name of the customer will be recorded in account opening register, and from here the account no. of the customer will be written on (top most corners) account opening form and on specimen signature card.
4.Issuance Of Cheque Book And Pass Book:
The cheque book will ordinarily be issued to all customers desiring to have chequing facility.
Cheque book consists of 10, 25, 50, or 100 leaves depending upon customer requirement.
Customer can withdraw money by signing a cheque and writing the amount he wants to withdraw from his account.
A special cheque book register is kept to enter the name of the person having cheque book.
5. PASSBOOK
PASSBOOK is another important type of book handed over to the customer as he opens the account with the bank. The withdrawal and deposit of money is recorded date wise in this book.
6. Recording into General Ledger:
The concerned officer records the name and amount deposited with the bank in to general ledger. Separate ledgers are maintained for different types of accounts e.g.
Current Account Ledger
Saving Account Ledger
Fixed Deposit Account Ledger
Call Deposit Account Ledger
As and when customer will deposit the money, amount will be credited in general ledger and the withdrawal will be followed by a debit entry in the ledger.
TYPES OF ACCOUNTS MAINTAINED BY NATIONAL BANK OF PAKISTAN (CIRCULAR ROAD BRANCH)
NATIONAL BANK OF PAKISTAN maintain following types of accounts:
1. Current accounts.
2. Profit and loss sharing account.
3. Fixed deposit account.
4. N.I.D.A. Account
CURRENT ACCOUNT
This account is also known as running balance account. Simply we can say “A bank account which may be used to lodge payments or to withdraw money on demand.”
Its main purpose is to serve the businessman. Form number F-53 is provided to the person to open the account. It is a statutory requirement to maintain current account.
Its main features are: -
Minimum amount for opening this account is Rs.500
Any person can open the account with the bank
According to inter banks agreement interest is not paid on current account.
Bank act as custodian of money
Over draft facility is provided to the customers
Customer can withdraw money through cheque supplied by bank
Number of depositors in current account in National Bank of Pakistan up to 31-8-2001 were 900 approximately.
PROFIT AND LOSS SHARING ACCOUNT
In general it is also called saving account .To provide interest free banking facilities in Pakistan, this type of account was introduced in January 1982 after the islamization of banking.
The main features of this account are: -
Instead of having fixed return in the form of interest the deposited money will be shared in profit and loss of the bank.
One can open the account by depositing minimum Rs.100
Withdrawal is allowed 8 times in the month total not exceeding Rs.15000.
To withdraw a large amount a notice of 7 days to the bank is necessary.
There is not any kind of interest is provided on money deposited.
Rate of profit is declared at the close of each half-year.
Number of depositors in PLS account in National Bank of Pakistan up to 31-8-2001 were 4000 approximately.
FIXED DEPOSIT ACCOUNT
This account is the major source of funds for the banks. This account is best for people who have surplus money and don’t need such funds in nearer future.
The money is deposited for a fixed period of time. Main features of this account are: -
Fixed amount is deposited for fixed period.
Amount of profit can be obtained after each six months.
Higher will be the time period, higher will be the rate of profit, and vice versa.
A receipt is used for the amount deposited called fixed deposit receipt.
Period of deposit can vary from 3 months to 5 years.
The amount can be withdrawn before maturity after surrendering interest.
N.I.D.A. ACCOUNT
The NIDA Account can be opened in N.B.P. N.I.D.A. stands for national income daily account the features of this account are same to the features of the saving or pls account except the following ones:
1. In this account the minimum balance required to acquire the benefits of this account is Rs 2 million, and the maximum limit is 5.0 million.
2. When the above condition is fulfilled, then the bank will pay interest on daily basis, which is that if the deposit is minimum of 2 million than the mark up rate is 5.2%p.a.and if it is at maximum that is 5.0 million than the rate is 7.00 %p.a.
3. In this account the daily balance of account is taken, products are calculated and the interest is calculated on that balance.
4. If the balance on any day comes below the lower limit, which is Rs 2 million then interest will not be given.
National bank of Pakistan maintains a separate finance section. Its purpose is to grant loans to the needy people, small & large business concerns, and to industries.
Advances in the form of money are the most remunerative use of bank resources. The management of the bank will be very careful while granting the loans.
The person/proprietor of the business will go through a long process of application, documentation, securitization etc. while requesting for loan. After proper satisfaction from the party concerned the bank will grant loan to the party
Under the Islamic modes of financing from 1982 onwards, National bank of Pakistan gives loans on the basis of “Mark-up” instead of interest.
Mark-up rate is different depending upon the type loan.
Procedure For Granting Of Loans
The following procedure is maintained by National bank while granting loan to any person: -
Loan Application Form & Specimen Signature Card
The bank provides a prescribed application form to the borrower. The borrower will fill the form. In that form the borrower will tell about: -
Type of the loan.
Amount of the loan he needs.
Period of time.
Applicant will also be provided a specimen signature card, which he will fill.
Declaration Of Properties Form:
This form will provide the information about the business he is involved, and also provide the information about his properties in Pakistan.
INVESTIGATION:
Now the bank after analyzing his application, investigate about the applicant’s credit worthiness, and also the information’s he provided about his properties.
In case of business owner’s request for loan, investigation will be made on following ways for different businesses: -
Sole Proprietorship:
Investigation will be about: -
Personal reputation of the borrower
Nature of the business
Types of properties (shop, houses, and land) their locations with their present market value.
Cash, jewelry, shares, security, bonds etc.
Stock in trade
Their liabilities
Partnership Firm
Name and addresses of the partners
Partnership deed
Branches if they exist
Nature of the business
Amount invested in the firm
Purpose of the loan
List of assets and liabilities
Import export registration
Private and Public Ltd. Companies
Name of the company
Addresses with telephone numbers
Whether private or public
Date of incorporation
Nature of the business
Branches if any
Authorized capital
Paid-up capital
Financial highlights of the company
Details of security offered to other banks under each head and charges created against fixed assets.
Certificate copy of memorandum of association
Copies of certificates of incorporation
Certificate of commencement of business
Auditor’s certificate regarding paid-up capital
Granting Of Loan:
After detailed investigation, and documentation if the finance section finds the party well satisfactory and feasible then they sanction the finance to the party concerned.
TYPES OF SECURITIES
The word security means any thing given to protect or safeguard the repayment of an advance and to justify this term the thing so given should itself be safe; otherwise the object for which it is given is defeated.
The National Bank of Pakistan usually has three ways in which securities can be made available in the bank against finances.
These types are: -
Pledge
Hypothecation
Mortgage
In each case the bank does not become the owner of the, property but the bank has only the right over the property until the borrower makes payment of his debt.
Pledge
In a pledge, the possession of the property but not the ownership passes to the creditor. The pledgee is entitled to the exclusive possession of the property until the debt is repaid but the ownership remains in the pledgor subject to the pledgee’s right.
Hypothecation:
In case of hypothecation, the property in goods is charged as security for a loan from the bank. But the ownership and possession is left with the borrower.
In case of hypothecation, neither the property in goods and nor the possession of property pass to bank, but only the security is granted in a form of letter of hypothecation, which usually gives the banker'’ charge on the hypothecated goods.
Mortgage:
In a mortgage, the property in the thing mortgage is conveyed to the mortgagee conditionally. The possession, until default in repaying the loan, generally, remains in the original owner subject to the mortgagee’s rights.
TYPES OF LOANS
National Bank of Pakistan provides various types of loans depending upon the requirement of the borrowers. Some of the important types of loans are: -
Demand Finance
Under a demand loan arrangement, a fresh demand loan account is opened through the borrower may be having other deposit accounts with the banks. The amount of loan has to be drawn by the borrower in lump sum and is to be repaid in installments or as agreed upon. The borrower can not operate a demand loan account by depositing and withdrawing amounts periodically.
Demand Finance Gold:
Characteristics:
Security
Gold is used as a security.
Recording
Single debit entry is recorded at the time of granting loan.
Loan type
Short-term loan.
Rate of markup
43.84 pptdr (paisa per thousand on daily product)
Required Documents:
Application form
Introductory reference sanction advice
Valuation certificate by gold smith
Insurance letter
IB-12 (Promissory Note)
IB-26 (Letter of Pledge)
IB-6A (Agreement Form)
Delivery letter(f.205)
NOTE:
Only N.B.P. performs the function of advancing of loan against pledging gold. No other bank advance gold pledged loan.
Running Finance:
Clean Running Finance
Secured Running Finance
Clean Running Finance:
Loan is granted mostly to the employees of the bank without demanding any type of security from them.
TYPE OF LOAN
Short Term loan
Characteristics:
Number of transactions
Frequent transactions are made.
Rate of markup
43.84 PPTDR
Repayment
Monthly installments
Payment of balance
It will be made in lump sum.
Documents:
Account Opening Form
Specimen Signature Card
IB-12
IB-6
IB31 (sale and buy back agreement)
SECURED RUNNING FINANCE:
Secured running finance is the type of loan in which some guarantee or security may be obtained from the borrower.
Characteristics:
Rate of return:
43.84 PPTDR
Type of loan
Short term loan.
Payment
In installment or lump sum as mentioned in conditions.
3.Cash Finances:
Under this type of credit N.B.P grant loan to its customers in cash. Under the cash credit arrangement a customer is granted an advance up to certain limit, which he can draw time to time as required by him. In this case, a new cash credit account is opened in the name of customers. These are long term loans.
Securities:
Hypothecation of stock
Mortgage of properties
Personel guarantees of all the partners of directors.
Money or some thing equivalent to money sent by any person to another on another station, either in cash, money order, postal order, bill of exchange, cheque, bank draft, etc is known as a REMITTANCE. The National Bank of Pakistan, now-a-days provides this facility to its customers and to the general public in general in the following modes: -
Bank drafts.Mail transfer. Telegraphic transfer.Traveler’s cheques.
Now I will explain the procedure and importance of each type of remittance.
Bank Draft:
Bank draft can be defined as:
“An un-conditional instrument in writing drawn by a bank in favor of any person on a branch of its own bank or any other bank to pay a certain sum of money to his order, for value received.”From the definition it is clear that the draft is payable to the beneficiary himself or to his order. The beneficiary or payee has to prove his identification at the paying office of the bank, which sometimes causes inconvenience to the public.Draft is the most popular and common form of remitting funds from one place to another.Any person who may or may not happen to be the bank’s customer against payment of bank charges can purchase drafts. It is considered to be a source of income for the bank.
Procedure:
In National Bank of Pakistan the drafts are issued on submission of application form (always printed) filled in and signed by the purchaser with his full name and address.The following particulars are generally required in the application form: -
1 Date
2 The Name of the Office on Which It Is Drawn
3 The name of the beneficiary
4 Amount in words and figures
5 Bank exchange rates
6 The signature and address of the applicant
The draft is issued after the applicant tenders the money. Two authorized signatories of the bank always sign draft.A separate book “Draft issued register” is kept to record the particulars of the draft issued. The drawing branch of the bank will give credit to the drawee branch on the same date the draft is issued; through their account for settling inter branch transactions.Usually all the banks insert special code number known as CHECK SIGNAL on the relative draft advices for all the drafts for more than Rs.5000/-.
National bank of Pakistan does not pay the drafts before the receipt of relative advice.
On receipt of relative advice the drawee branch will credit the amount into their “draft payable account” and each time a draft is paid this account will be debited with the amount of the draft paid.
In case the draft advice is not received, the draft will be paid “ex advice” duly entered in the "ex-advice register” and the entry in the said register will be marked off on receipt of the relative advice.
Issue of Duplicate Draft:
In case a draft is lost or destroyed by mistake, its duplicate can be issued at the request of the purchaser after obtaining indemnity bond on “stamped” paper of appropriate value. This is done to cover the risk of double payment by mistake.
Drafts of most banks in Pakistan are valid for a period of six months only. After the expiry of this period the draft will have to be revalidated from the issuing branch of the bank.
Mail Transfer:
The same application form is used for drafts and mail transfers generally in National Bank of Pakistan. The mail transfer instrument is not delivered to the purchaser but instead the issuing office to the beneficiary’s branch on its own risk and responsibility sends it.
This type of remittance facility is provided only when the beneficiary happens to be the customer of the bank.
The amount is directly credited to the beneficiary’s account and as such loss of mail transfer has no concern with the applicant. A bank customer can very conveniently remit the funds from one place to another regularly if he so desires by giving standing instructions to his bank.
Also the credit balance of a customer’s account is transferred from one branch to another branch with the help of this instrument in case the customer so desire.The applicant desiring to remit the funds by way of mail transfer can either deposit cash or he may ask the bank to debit his account with the cost of mail transfer including bank charges.
An exchange memo is issued to the applicant in case he desires to have some sort of receipt from the bank for his office record.
The participants of mail transfer are recorded in the mail transfer issue register just like drafts while at the paying branch the instrument is treated as branch voucher for credit into the beneficiary’s account.
Telegraphic Transfer:
The money sent by mail has been described as “mail transfer” which takes three to four days, or more depending upon the distance between the two branches.
When the applicant wants to save the time wasted in transit of the instrument, he can request for transfer of funds by means of a telegraphic transfer.
In this case he will have to bear the telegram charges in addition to usual bank exchange.The amount so remitted will reach its destination within 24 hours.
Business community generally avails of this facility in order to save time in their business dealings. The funds so remitted are either credited directly into the account of the beneficiary or paid by means of pay order in case he is not keeping his account at the paying office of the bank.
It should be noted that such remittances are affected between two stations having telegraph office.
The remitting office sends the message by telegram in code language instructing “check signal” number at both ends of the message for security purpose. As check signal books are supplied to all the branches of the bank in order to verify the genuineness of the message. All banks have their separate “check signal” apparatuses.
The entries at issuing office are recorded in the telegraphic transfer issued register while at the other end it is entered in the T.T. Payable register.
The papers pertaining to such transfer are properly kept in separate files “telegraphic transfer issued and paid files” and kept in the custody of an officer (Accountant/Manager). In case “check signal” number turns out to be incorrect at the paying office, the message is got repeated till such time it is found correct. It is therefore, necessary to be vigilant at the time of calculating the “special numbers” otherwise the very purpose of urgency is defeated and the bank will be responsible for the delay.
Travelers Cheques:
When a traveler proceeds from one place to another he needs money at different places. The remittances explained so far will be available to the beneficiary only at a particular place, and that too all in one time; where as the requirement of a traveler may be otherwise.
National Bank of Pakistan has designed its own traveler’s cheques to be used in Pakistan only. For different denominations their colors are different.
The denominations of travelers cheques provided by National Bank of Pakistan are: -Rs.5, 000/-Rs.10, 000/-Rs.50, 000/-Rs.100, 000/-The face of Traveler Cheque consists of: -Signature of the purchaserName of the purchaserName of issuing office and the date of issue
On the back of the cheque this can preferably be done by means of small rubber stamp.Application for the purchase of the cheque application forms is taken. The original remains with the issuing office as voucher and the duplicate is passed to the main branch of the bank where account of bank is kept.
Recording:
The issuance of cheque is recorded in the travelers cheque issue register .The total amount of T.C. sold is credited to the main branch of the bank and the exchange charged credited to the branch exchange account.
Delivery:
The traveler’s cheques are delivered to the purchaser in thick cardboard cover for their safety.
SWOT ANALYSIS
The SWOT analysis is done by the organization for the environmental scanning. The strength and weaknesses and opportunities and threats are analyzed by organization from the external environment. NBP SWOT analysis is given below:
STRENGTH
A National Bank brand image is its major strength. It has always been considered as the pillar of the country's economic scenario asset wise or balance sheet wise. Its image, work force, network and reputation have created a sentimental and emotional attachment of the people with the bank.
Complete computerized networking in another strength of the bank. Now the bank has the ability to compete with any multinational bank as to keep pace with the changing and fast growing world of today computer have become necessities. The reserve funds indicate positive sign as they have increased as compared to the previous years.
Another competitive edge that the bank has on the rest of the competitors is its expanding business worldwide catering for a large and vast group of customer and maintaining standards of excellence globally and other strength of NBP.
ORGANIZATION CULTURE
NBP's organization culture was very friendly and interesting. Employees has created a very cooperative environment among each other. They have created loyalty toward the organization by deviating their future efforts and energies. The employees take the organizational problem personals and try their best for the prosperity of the organization.
STRATEGIC TOP MANAGEMENT
Fortunately NBP has got from time to time best top management. Currently the NBP Chairman and as well as President S. Ali Raza Sahid he is the person who has saved the life of the organization and contributed a lot.
INDUSTRIAL POLICIES
NBP helps the government on the implementation of its industrial policies with respect to economic growth of the country.
BEST RESEARCH APPRAISAL TEAM
Before the project financing NBP has the research appraisal team that justifies the economic and financial feasibility of not project in the future. That is the strength is the scare that it helps the organization from any loss that is to over in the future in case of failure of the project.
LENIENT POLICY WITH THE CLIENTS
This is one of the best policies of NBP that it does not kept rude behavior with this client if they make late in their repayment of loan. But it has adopts lenient way in dealing with them, it helps its customers in the repayment making rescheduling and restructuring of their loans.
YOUNG BLOOD
NBP has young generation aged 27 to 30 graduates that would be helpful to maintain the quality of their service by hiring new graduates but also would be helpful changing the overall culture of the organization.
WEAKNESSES
National Bank created its own weakness by downsizing. Due to downsizing various experienced and devoted employees were either forced or given the option to leave. Only those people were left who had no organization better to join.
Due to right sizing a lot of confusions have taken place as well. For example higher-level management have come from institution or others organizations where everything is computerized. Whereas have by ten staff members (over staffing) hence, the higher management finds it difficult to get work done. From 1995 onward bank exhibits a downward trend indicating its low performance-showing decline in total assets. Total deposits, saving deposits advances investment and total income. This downward trend can caused a great threat to the bank as its competitors are talking its market share, which can cause ruining the image and reputation of the bank thus posing danger in the long run. The graph depicts a decline in the performance of the bank. NBP's major weaknesses are given below:
LESS ATTENTION TO THE RURAL DEVELOPMENT
NBP's portfolio shows that it has made project financing only in the major cities of Pakistan. But a reasonable attention is needed in the project financing of the rural based industrial project of the country.
POOR ADVERTISEMENT
I keenly observe this that as compared to other banks. NBP is very poor in advertising itself and institution, which works a lot in the development of the country, but unfortunately in the business community most of the people are in award of it.
POOR NETWORK
NBP has only 1500 branches all over the Pakistan and in major cities of Pakistan in which other competitors has their branches NBP don't have:
- The formalities involved in getting loans are time concerning and complicated enough.
- It is observed that most of the loans, which have been granted on political basis, are either default or their loans are forcefully written off.
- It is seemed that the recovery system of NBP is not effective that's why number of defaulters are increasing at the growing age.
- Political interference in the recruitment system.
- Uncertainly among the employees due to threat of downsizing.
OPPORTUNITIES
National Bank has very bright prospects for the future. They plan to region their lost glory not only in terms of profitability but also include latest technology and competent work force. Furthermore, NBP is the only bank which is providing facility of bills collecting from 9 AM. to 5 PM. NBP is considering setting up an exclusive utility bank in collaboration with a private firm, which would provide this service for 12 hours.
SPONSOR THE IT BASED PROJECTS
This is the best opportunity available to all banks and NBP as well, to sponsor the IT and computer based projects because the coming century is the century of information technology as new a days all the business community is diverting its attention towards this field.
GOODWILL AND BETTER IMAGE
NBP has advantage of generating more deposits and attracting valuable customers due to its better image in the business community. NBP has also advantage of increasing credit lines. This is only due to good dealing and better image that NBP has directly acquired those lines of credit from abroad that are only acquired by it, this better image can help further NBP in explanation of its activities.
GROWTH IN THE INDUSTRIAL SECTOR
NBP's major function is the project financing and it is doing it with full efforts. Fortunately industrial sector is now-a-days is Pakistan is again growing thus increasing the business opportunities of NBP. Especially the textile sector is one again improving even the sick projects has resumed their operations.
THREATS
If there is a threat to the whole economy, it will pose a threat for National Bank. National bank does not consider small bank a threat to its existence because the way national bank can accommodation large customer, these small banks cannot. sanctions imposed against Pakistan will affect exchange. Business whereas the freezing of accounts by State Bank of Pakistan have also caused problems for National Bank. But the recent facts and figures indicate that the banks major rivals lime MCB and HBL are causing threats to the bank in the long run thus snatching away the market share by attracting a large number of customer due to the their rising standards giving quality service and value added products and other major threats are as under:
POLITICAL INFLUENCE AND INSTABILITY
This is the major threat for any business organization in Pakistan because the political officials influence NBP in financing those projects which are not viable or write off those loans which are still able to pay, this political influence cause many problems in daily business thus profitability of NBP. Political industrial is even a threat for NBP in the sense that once the policies and procedures are approved by government.
SICK PROJECTS
NBP's sick projects are increasing day by day due to economic downfall. As our economy is weakening day by day the no of side projects are becoming sick increasingly thus influencing the profitability even survival of NBP.
LACK OF MODERN BANKING TECHNIQUES
NBP is following fifty years old style of banking, in the computers of NBP symphony word processor is still used. Which is the oldest word processor due to this the deposits are looking to be corded, because of the provision of credit cards and other such services by its competitors both local and foreign banks is proving to be limiting factor in the deposit mobilization efforts of the corporation.
During my internship period at National Bank of Pakistan .I found out certain problems, which are written below along with their solutions, which need proper attention of the top management:
These are given below:
Information technology.
Evening Banking Services
Staff Shortage
Dealing With Women
Frequent Transfers
Promotion
Locker Services
Standard Of Education
1. INFORMATION TECHNOLOGY
This age is the age of information technology. Today the world has become a global village and the fastest mediums of communication are adopted all over the world. And it is a fact that more the latest technology and methods of work are adopted more will be the productivity.
In the National Bank of Pakistan (circular road branch) there is only one computer available for carrying on the business of the bank.
I suggest that the computer should be on every counter of the bank and they should be interlinked together (NETWORKING) so that various services provided by the bank can be provided in a more efficient and fast way.
2. EVENING BANKING
I observed that the bank is closed for public dealing in after 12:30PM and then the staff do their own banking jobs.
I suggest that at least one counter should be specified for the customer services till evening. In this way, the people having jobs in other offices can get benefit from this counter.
3. STAFF SHORTAGE:
I discussed with bank personnel and they gave their views about staff shortage. They told me that staff is very short and all the staff is overloaded with work. That’s why the staff posted in the branch has to face many problems to finish its daily work.
I suggest that number of staff in the branch should be increased so that they can meet their customers’ requirements quickly and efficiently.
4. COUNTER FOR FEMALES
The women in D.I.KHAN are very reserve in nature and are also pardah observing that’s why they hesitate to come in the bank and those who come hesitate to talk with male staff.
I suggest that in order to deal with women there should be a Lady Officer or Lady Clerk in the bank and there should be a separate cabin for them.
5. TRANSFERS:
I observed that staff members of the Bank are frequently transferred not only from one branch to another but from one city to another and sometimes from one province to another.
I suggest that no one is to be transferred to another city or province without the consent and will of the employee and if transferred, the facilities like residence etc should be provided to them.
6. PROMOTION:
I observed those employees; particularly officers are not satisfied with promotion policies. There is no clear-cut promotion policy of National Bank.
I suggest that there should be a clear-cut policy about the promotion of employees, particularly for the officers and they must aware of it that is polices must be communicated. When policies are communicated to the employees then they can perform their task more efficiently and will utilize their full efforts.
7. LOCKER SERVICES:
The area of circular road branch is full of business activities. The businessmen also have some important documents, papers and valuable things to deposit for safe custody.
In order to provide these facilities, locker services must be provided in this Branch.
8. STANDARD OF EDUCATION:
The standard of education for recruitment of clerical staff should at least be graduation. Because in this way efficiency of work will increase and their dealing with public will be better.
