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Acknowledgement

List of Contents

Acknowledgements                                                                                              i

List of Tables and Contents                                                                                 ii

Objectives of Studying the Organization                                                              v

 

OBJECTIVES OF STUDYING THE ORGANIZATION

 

 

 

The main objective of studying the organization is to see the application of theoretical concepts. An internship of at least sic weeks is necessary to fulfill the requirements to get MBA (banking & Finance) degree. I have completed my required working period as an internee in the bank that provides me opportunities to learn about financial sector and my discipline of study.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chapter # 1 INTORDUCTION TO THE ORGANIZATION

1.1) Brief History of National Bank of Pakistan (NBP) Establishment of National Bank ofPakistan

 

National Bank of Pakistan was established on November 8, 1949 through passing of a special ordinance in the National Assembly. The need for the establishment came due to the reason when aft that time newly born country was facing economic crises. To get rid the intervention form the reserve bank of India, a self owned and operated Central Bank by the name of State Bank of Pakistan was formed in July 1948 to carry on the responsibilities of issuing the currency and most importantly controlling the flow of money in side the country.

 

State Bank of Pakistan after its formation demanded from the Indian Reserve bank the assets against the Indian currency retired from Pakistan territory. Government of India refused to hand over the assets worth about five hundred million rupees. This dispute is still unsettled and these assets are still not delivered to Pakistan.

 

1.2) NATURE OF BUSINESS

 

National Bank of Pakistan was established under the National Bank of Pakistan Ordinance, 1949 and is listed on all the stock exchanges in Pakistan. It is registered and head office is situated at I.I. Chundrigar Road, Karachi. The bank is engaged in providing commercial banking and related services in Pakistan and overseas.

 

 

 

 

 

1.3) BUSINESS VOLUMEi

 

 

1.4) Number of employees (designation vise break up)ii

 

 

DESIGNATIONS

NO.OF EMPLOYEES

Executives

531

Officers

6636

Clerical

3982

Non-clerical

1327

Others

796

Total Employees                                                                                              15,204

 

 

 

 

 

 

1.5) PRODUCT/ SERVICES OFFERED BY THE NATIONAL BANK OF PAKISTAN

 

With the passage of time National Bank of Pakistan introduced variety of products and services. The bank now deals in almost all products that commercial banks deal in.

PRODUCT/ SERVICES OFFERED

 

Treasury Products

 

a)     Pakistan Investment Bond

 

b)     Derivatives Products

 

  1. I.           Currency Options

 

  1. II.           Interest Rate Swaps and FRAs

 

 

Hedges the Interest Rate risk A client can convert a fix rate loan into floating rate one or vice versa by using these derivative instruments

Cross Currency Swaps

 

Hedges the Interest Rate Risk This product allow a client to convert its rupee based loans into a dollar based loan. The client’s exposure is shifted from PKR KIBOR to USD LIBOR.

 

Home Financing

 

 

a)     Home Purchase

 

b)     Home Construction

 

c)      Home Renovation

 

d)     Purchase of Land + Construction

 

e)      Balance Transfer Facility (BTF) Insurance Product

Term Deposits or Time Deposits PLS Saving Accounts

Internet Based Home Remittance Service Agricultural loan

Micro Finance

 

 

Islamic Banking Products and Services

 

 

1)    Deposit Scheme

 

a)     Current Deposit.

 

b)     Profit & loss Sharing Deposit (PLS) Scheme

 

2)    Financing Facilities

 

a)     Ijarah (Leasing)

 

b)     Other Services

 

v

 

 

International Banking Services

 

 

1)     Trade Services

 

2)     Trade Financing

 

3)                International Payments and Collection Services

 

4)     Structured Trade Finance

 

5)     Exporter's Needs

 

CHAPTER # 2 ORGANIZATIONAL  STRUCTURE

2.1) Organization Structure of the National Bank of Pakistan

 

 

 

Main Offices

 

 

 

Main Offices of the National Bank of Pakistan are of three types

 

  1. Head Office

 

  1. Regional Offices

 

  1. Branch Office

 

 

Network of National Bank of Pakistan

 

National Bank of Pakistan has a very wide network of braches and offices. According to NBPofficial website it has domestic as well as overseas network as follows

Domestic and Overseas Branches staff.

 

Domestic Network

 

Regional Offices

29

Branches

1254

Online Branches

147

Subsidiaries

4

Overseas Network

 

Overseas Branches

22

Representative Offices

4

Subsidiary

2

Joint Venture

1

 

 

Head Office

 

Head office of the National Bank of Pakistan is located in Karachi. Head office controls and monitors all the activities of the bank. The President of the National Bank of Pakistan seats the head office. A secretariat is established to assist the president in the head office. The headoffice is divided into twelve Departments. A Group Chief controls a Group.

 

President

 

All Groups/Departments are headed by Group/Department Chiefs. President is the head of all Group Chiefs. All  strategic matters are discussed and approved  by the president and Group Chiefs.

In Head Office following are the Group/Department Chiefs

 

1)     Operations Group Chief

 

2)     Corporate & Invest. Group Chief

 

3)     Special Assets & Remedial Mgt. Group Chief

 

4)     Strategic Planning & Economic Research Group Chief

 

5)     Treasury Mgt Group Chief

 

6)     Risk Mgt. Group Chief

 

7)     Commercial & Retail Banking Group Chief

 

8)     Audit & Inspection Group Chief

 

9)     I.T. Planning Dept. & Implementation Group Chief

 

10) HRM Dept. Chief

 

11) Org. Development & Training Dept Chief

 

12) Over-seas Operations Chief

 

 

Regional Offices

 

The network of National Bank of Pakistan is divided into 29 regions within Pakistan. Detail of these regions is in annexure. In all Regions all Group Chiefs have their respective assistant as Regional Group Chief for that group. Regional Group Chiefs are directly reported to concerned group chief. Following are the list of Regional Group Chief.

1)     Regional Business Chief

 

2)     Regional Operation Chief

 

3)     Regional HR Head

 

4)     Regional Compliance Chief

 

5)     Regional Credit Head

 

6)     Regional Corporate & Investment Head

 

7)     Regional Commercial & Retail Banking Head

 

8)     Regional Audit & Inspection Head

 

9)     Regional I.T. Planning & Implementation Head

 

10) Regional Org. Development & Training Head

 

Branch Offices

 

National Bank of Pakistan have vast network of branches in Pakistan. National Bank of Pakistan has 1254 braches throughout Pakistan at the end of December, 2008. In a branch setup following are the designation responsible for the implementation of policies and procedures.

 

 

2.3) Functions & Responsibilities of Departments of National Bank of Pakistan

 

Chapter # 3

 

 

 

STRUCTURE AND FUNCTIONS OF ACCOUNTS/FINANCE  DEPARTMENT

 

 

3.1)  Structure of the Finance Departments

 

a)     National Bank of Pakistan has three levels of offices; Head Office, Regional Offices, and Branch Offices. Head Office is in Karachi at I.I. Chandrigarh Road. Head Office has twelve departments that are called Groups deals with the function of total braches of all regions of the bank.

 

Corporate & Investment Banking and Finance Group

 

Corporate & Investment Banking and Finance Group Chief is Chief financial officer of NBP. Finance Group has following responsibilities

  • Maintaining liquidity

 

  • Financial Accounts

 

  • Maintaining SBP accounts

 

  • Suggestion on mark rates and profit rates

 

  • Equity & Investment

 

3.2) Finance & Accounting operations

 

National Bank of Pakistan is a financial institution. It has proper setup of operation of all of its accounts and finance activities.

 

 

3.3)  Role of Chief Financial Officer

 

Corporate & Finance Group Chief is Chief Financial Officer of NBP. He has following main functions and responsibilities as CFO.

1.      Monitoring and Maintaining Liquidity of Cash

 

Finance group is responsible to get information of the cash requirement and usage in  all branches of NBP. It gathers data from Operation group to asses the cash in position of the bank. CFO continuously monitors the changing cash requirements of the bank. Lower  cash reserves are not only makes the payments of account holder late but also may be charged by penalties by SBP if it falls below the limit given by SBP. Excessive cash in hand is also harmful for the bank as non-productive cash bears the cost of funds.

 

 

 

3.5) Sources of Funds (Latest five year figures from financial statements)

 

 

 

Generation of Funds Statement

 

Funds Generated (In Rs. million)

2004

2005

2006

2007

2008

interest earned

20,947

33,634

43,789

50,569

60,943

Non interest income

5,099

4,927

6,145

6,782

7,925

Dividend income

1,274

1,718

2,892

3,263

2,879

Foreign Currency dealing income

1,009

1,206

1,334

1,043

3,969

 

 

 

 

 

 

 

 

 

3.7) Allocation of Funds (Latest five year figures from financial statements)iii Allocation of Funds

 

Comments

NBP is allocating funds in Operating Assets continuously to introduce modern techniques and introducing modern banking services. The biggest account for allocating fund of NBP over the last five years was advances. NBP extends loan and advances to borrowers with an increasing ratio.

CHAPTER # 4

 

 

CRITICAL ANALYSES OF THE THEORETICAL CONCEPTS RELATING TO PRACTICAL EXPERIENCE DURING INTERNSHIP

 

National Bank of Pakistan is an organization controlled and supervised in public sector. Bank has slogan “Nation’s Bank” and practically NBP has to play its role in economy as a National Bank. National Bank has many distinct features that normally business organizations do not possess.

FINANCIAL ANALYSES

 

 

 

5.1) Five Latest Year Balance Sheets in A Single Table BALANCE SHEET (as at December 31)iv

 

 

 

 

5.2) Five Latest Year Income Statements in a Single Table Income Statements (For the year ended on December 31)v

 

 

 

 

5.4)          Horizontal Analyses of Balance Sheets for Last Five Years

 

In horizontal analyses of the balance sheet, one year is taken as base year and year 2005,2006,2007,2008 as Y1, Y2, Y3, and Y4 respectively. All accounts of base year is taken as 100 and relative increase or decrease of the accounts of the other years are calculated with comparison to base year account.

 

 

Comments

 

 

5.5)          Vertical Analyses of Balance Sheets for Last Five Years

 

In vertical analyses of the balance sheet, one of account of the balance sheet is considered as 100% other are accounts are shown in relative proportion.

 

 

Comments

 

 

 

 

 

 

5.6)          Horizontal Analyses of Income Statements for Last five Years

 

 

 

Comments

 

 

 

 

 

 

5.7)          Vertical Analyses of Income Statements for Last five Years

 

 

 

Comments

 

 

 

 

 

 

 

 

5.8)          Analyses of National Bank with Reference to the Industryvi

 

.

 

 

 

 

 

 

 

 

 

 

5.9)          Future Prospects of the National Bank of Pakistan

 

After financial analysis of the National Bank of Pakistan, some impending diagnosis is revealed

 

 

 

CHAPTER # 6

 

WEAKNESSES OF THE NATIONAL OF BANK

 

 

 

Chapter # 7 RECOMMENDATIONS FOR IMPROVEMENT

I have highlighted some weak areas of NBP in financial perspectives in previous chapter. Here in this chapter some recommendation for the improvement of its weak areas.

Asset Effectiveness

 

National Bank of Pakistan should analyze its assets portfolio. NBP is needed to get rid of less effective and less productive assets. All those advances which are declared as non-performing should be taken in a position that they start their performance. New investments, advances, and loans should be granted only to the persons that fulfill the very requirements of loan applicants. Nepotism culture should be discouraged.

CHAPTER # 8 CONCLUSIONS

I studied the organization thoroughly. I made following conclusions about National Bank of Pakistan.

  • NBP serves the purpose of Nation’s Bank.

 

  • Federal government, provincial government, and local government accounts are primarily managed by NBP.

Chapter # 9

 

 

 

REFERENCES

 

 

I Annual Published Report of National Bank of Pakistan Ii Annual Published Report of National Bank of Pakistan Iii Annual Published Report of National Bank of Pakistan

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