Internship Report on National Bank of Pakistan (NBP) 2016
DedicationI dedicate to my dearly loved Parents whose supports remains always with me during my study session & courage me for achievement of my task.
Executive Summary
Report is about my internship that I have completed at National Bank of Pakistan, New Bazaar Branch Bhalwal from 13th December 2010 to 27 January 2011. The purpose of internship finance report was to Looking for a good hand on experience in the practical field with an invaluable knowledge during my experience and to amass relevant information to pile up internship report on National Bank of Pakistan New Bazaar Branch Bhalwal.
Main thing is to enable the students to use the management techniques, and find out the possible solution of management problems faced by the organization.
National Bank of Pakistan is at the forefront of international banking in Pakistan which is proven by the fact that NBP has its branches in all of the major financial capitals of the world. NBP was awarded as "Best Foreign Exchange Bank in 2008” by world's leading financial journal “Global Finance” and the bank with the highest return on capital in Asia and No.8 in the world by Banker Magazine in July 2003.
Report is based on my seven weeks internship program in National Bank of Pakistan. The methodology for collection of data is primary as well as secondary data. The biggest source of information is my personal experience.
Report is divided into different sections. 1st section is the sector in which NBP falls according to current scenario; in 2nd section I have discussed overview, history, vision, mission, core values, Nature of business& volume, product line, competitor & comments. 3rd I have discussed bank senior management & Branches networks
In 4th section I have discussed the plan of my internship in which I mention the branch and the departments where I did internship. 5th section is about the training program which shows the operations of the departments and the details of the tasks which I have performed during my internship. 6th section is about Ratio Analysis.
7th section is about Finance & Accounts I worked in different sections of Finance & Accounts Department of NBP. All the sections play vital role in the smooth working of the employees.
During my internship I go through all sections. The concepts I studied in MBA with specialization in Finance is now clear. In the 8th Future prospects of NBP and in last I give conclusion and recommendation that is about what I learn in the internship in this I have discussed my duties, new knowledge acquired, and problem at last how this experience will effect on my career.
I have prepared this report after my internship which was the compulsory part of MBA degree. In this report I mentioned that what I learned in NBP Model Town
In this report I gave the history of NBP, its Board of Directors, audit committee and bankers. Further I mention in this report that what is the mission, vision, Objectives, Functions, Product Line of NBP. I noted in this report that how many number of employees are in NBP and which are its main offices.
After that I noted my internship program in this report. In this report I mention in which departments I worked and got practical experience. There are nine departments in Model Town Branch of NBP in which I got training e.g.
- Accounts Department
- Credit Department
- Account Opening Department
- Remittance Department
- Clearing Department
- Human resources Department
Internship is the great tools for gaining practical and professional knowledge. Virtual university has given me task to done internship in any company. Hence for the fulfillment of this university requirement I have selected National bank of Pakistan. It is great bank supported by the Government. I worked in said bank, only 7 weak in different department. During my stay in department, I leant lot of activities performed by this department.
Historical Over View of National Bank of Pakistan
State Bank of Pakistan after its formation demanded from Indian Reserve Bank the assets against the Indian currency retired from Pakistani territory. Government of India refused to hand over the assets worth about five hundred million rupees. The dispute is still unsettled and these assets still not delivered to Pakistan.
Until June 1950, the bank was engaged exclusively on jute operations. Thereafter, it felt that it could expand its business to include other commodities as well. Bank took a big stride in 1952, when it replaced the Imperial Bank of India, as an agent of State Bank of Pakistan.
With a passage of time its functions diversified as they take over the function of different institution with the passage of time like in past they took over the function of the Imperial Bank of India and now of National Development Finance Corporation. It is working as the agent of the State Bank of Pakistan and performs its functions wherever State Bank of Pakistan is not present.
The government floated its 10% of the shares in the open market in past and the ratio became 60:40 and in future they trying to make it 55:45.
During the 1960s the bank's network of branches increased, enabling it to give necessary service to a wider segment of the economy. By adopting a blood policy for promoting and developing a broad industrial base, it enhances its contribution to planned development. A loan to industry is nearly one-third of the bank's total loan portfolio.
Product lines
National Bank of Pakistan Saiban Scheme
There are five types of products under this scheme
1. Home Purchase
2. Home Construction
3. Home Renovation
4. Purchase of Land and construction
5. Balance Transfer facility
These products are offered with a financing period of 3 to 20 years and Debt to Equity ratio of 85:15. The financing amount can be any amount Upto a limit of Rs. 35,000,000
Major Competitors
Now it is time is to write report on national bank of Pakistan importantly its banking procedure. You will be able to study the national bank History, its product lines, its competitors briefly in the next coming pages. After these portion, readers will be able to study about all NBP all departments information, its tasks, and procedure how it perform. In the next portion of my report will be consist on those Department where I got Training.
I will show my tasks that I performed during my internship period. After this the major portion of my report will be start, it will be the Banking function. I have clearly wrote NBP banking function, allocation of funds, source of funds, etc according to Virtual university given format. Another vital portion of my report is Critical analysis, where I have observed according to my theoretically perceptions towards national bank issues. At the end of the report after Conclusion, I have wrote some necessary recommendation and suggestion for NBP improvement.
Historical Over View of National Bank of Pakistan
The story of National Bank of Pakistan started from the beginning of economic struggle in Pakistan in the year of 1947, when non-Pakistani community of Hindus handled most of the country's economy. The involvement of this level by the Hindus in the Pakistani economy was high attitude. The situation got worst when after the division in 1947, most of the banking professionals and employees of the import and export houses, left the country and economy of the country was brought down to a stand still position.
The number offices in Pakistan were 631 before the division. This number immediately fell into 193 after independence of Pakistan. These remaining offices of the bank, most of which belonged to old Imperial Bank of India, were maintained for the partial operations with the help of skeleton staff body.
At the time of independence, it had been arranged between India and Pakistan that the reserve Bank of India should act as the common monetary authority for the both countries up to end of September 1948. But unfortunately this arrangement did not prove satisfaction. The main course of this malfunctioning of the whole plan was mainly because of the Indian aggression in the occupied Jammu and Kashmir, which caused some serious damage Indo-Pak relations.
As a result of this experience, Pakistan felt it could not lace any reliance on the Reserve Bank of India. It was clear that its own Central Bank was an indispensable necessity, so in result State Bank of Pakistan came into geeing was in July 1948 and was inaugurated by Quaid-e-Azam Muhammad Ali Jinnah.
The normal procedure of establishing banking companies under the Companies Law was set aside and the bank was established through a promulgation of an Ordinance due to the crisis situation that had developed with regard to financing of jute trade. The bank commenced its operations from November 20, 1949 at six important jute centers in the East Pakistan and directed its resources in financing of the jute crop. The Bank’s Karachi and Lahore offices were subsequently opened in December 1949.
State Bank of Pakistan after its formation demanded from Indian Reserve Bank the assets against the Indian currency retired from Pakistani territory. Government of India refused to hand over the assets worth about five hundred million rupees. The dispute is still unsettled and these assets still not delivered to Pakistan.
Until June 1950, the bank was engaged exclusively on jute operations. Thereafter, it felt that it could expand its business to include other commodities as well. Bank took a big stride in 1952, when it replaced the Imperial Bank of India, as an agent of State Bank of Pakistan.
With a passage of time its functions diversified as they take over the function of different institution with the passage of time like in past they took over the function of the Imperial Bank of India and now of National Development Finance Corporation. It is working as the agent of the State Bank of Pakistan and performs its functions wherever State Bank of Pakistan is not present.
The government floated its 10% of the shares in the open market in past and the ratio became 60:40 and in future they trying to make it 55:45.
In 1999 National Bank of Pakistan celebrated its golden jubilee during the last fifty years banks has made substantial strides in the financial services industry in Pakistan. In 1999 its market shares was around 22% and it remain the largest financial institution in Pakistan.
The NBP with its head office at Karachi operates through the regional headquarters comprising on Zones. It has a total branch network of branches. It has overseas branches all in important financial branches of the world i.e. USA, UK, Germany, Japan, France, Korea, Bangladesh, Central Asia and representative offices in Egypt and China. National Bank of Pakistan is the only bank of Pakistan, which qualify international standards of "Capital Adequacy Ratio". In short NBP performing a major both core and non-core banking functions of the country.
There has been no looking back since. The bank is extending loan to industry both in public and private sector in diversified areas, ranging from dice husking and cotton ginning to finished products, light engineering, iron & steel, oil refineries, telecommunication and emerging non-traditional items.
Besides the traditional industries, which continue to receive funding, the bank has in the recent past diversified its loan portfolio. New units being extending financing include among others, Tiles and Ceramics, Manufacturing of Chinese type Rickshaws, consumer Goods, Sell Phone Companies, Poultry, Carpets and Jute bags, Hotels & Housing.
In short National Bank of Pakistan through its wide network of branches has contributed to the industry development of the country. It has rendered active help and assigned the government in its endeavors towards financing of new sectors so to bring about an all around prosperity and development of the country.
Product lines
National Bank of Pakistan Saiban Scheme
There are five types of products under this scheme
1. Home Purchase
2. Home Construction
3. Home Renovation
4. Purchase of Land and construction
5. Balance Transfer facility
These products are offered with a financing period of 3 to 20 years and Debt to Equity ratio of 85:15. The financing amount can be any amount Upto a limit of Rs. 35,000,000
Major Competitors
- Habib Bank Limited
- United Bank Limited
- Muslim Commercial Bank Limited
- Allied Bank Limited
- Askari Commercial Bank Limited
- Soneri Bank Limited
- Bank Al-Habib Limited
- Bank Al-Falah Limited.
- Standard Chartered Bank Limited
- The Bank of Punjab
Introduction to All Departments
Deposit DepartmentDeposit department deals with the money being deposited in the bank. For depositing money into bank a customer is required to open his account with the bank. There are two types of accounts opened at NBP i.e. PLS saving account and the Current account. PLS saving account is mostly used by individuals and current account is mostly used by businessmen or corporations. Saving account holders are offered profits on their deposits whereas current account holders enjoy the facility of payment on demand.
Advances/Sales Department
This department deals with provision of credits to customers and as the main product of the bank is credit so it is also called as sales department or credit department. The bank has different kinds of credit schemes for different kinds of target customers. These schemes are the main products offered by the bank.
NBP has a huge product portfolio examples include Cash Finance, Agricultural Finance, Gold Loan, Personal Loans, Running Finance, Corporate Finance, Export Import Financing, House Building Finance (Saiban) and NBP Karobar Scheme etc.
Selling is mainly done right at the desk of this department in every branch. Every region has a business manager which is usually an SEVP of NBP and he is responsible for managing marketing and selling activities in the region.
Collection and disbursement department
This department deals with the receipts and payments done by the bank being an agent of SBP. NBP is the only bank that is working as the agent of SBP and it’s a heavy duty of colleting government receipts like FBR taxes collection, Traffic Challans, Revenue receipts, Agri tax, Utility bills etc.
Similarly bank is also disbursing money on behalf of SBP. Pension payment is one of the heaviest functions performed by the bank. Along with pension salaries of government servants, Zakat and Tax refunds etc are also disbursed by NBP
Cash Department
Bills/ Remittances Department
Conclusion
1. NBP have lower customer satisfaction
2. NBP has a poor record management and filing system
3. There is an injustice distribution of work in NBP
4. According to my finding NBP have poor marketing system
5. Practical work is very different from the theory at NBP. Rules, procedures and policies are not fully in practice.
6. NBP have more accounts in terms of number of account but have fewer deposits
7. My findings highlights that manger has very limited authority he or she has to take approval from the upper management for every new decision.
8. NBP staff lacks in specialized training and highly professional education.
9. NPB has a very poor job rotation system and there is a lack of appreciation for staff
10. NBP has improper communication flows with improper communication standards.
11. Promotions are not justly and timely awarded at NBP
Cash Department
This branch deals with the withholding of cash money or currency notes. Main function of this department is to have an eye on cash flows. Currency is kept in chests inside strong rooms at branch level. Some branches have chest, some have sub-chests and others have no chests. Currency is supplied by SBP and SBP also monitors its flow.
There are only a few persons at each branch who can open the chest. There is a limit on the amount of money kept outside of the chest at any time. Cash In-charge is responsible for any discrepancy in the cash balance.
Compliance Department
This branch deals with the monitoring of loan repayment and balances with other banks. This department investigates about pending reconciliation items. Usually this is done half yearly. Main duty is to ensure that transactions are treated correctly and in compliance with rules and regulations and the balances are reconciled. This department is actually performing the internal control function to ensure the achievement of objectives and mission of NBP.
Bills/ Remittances Department
A very important department in the bank is bills/ remittances branch. This branch deals with the disbarment and collection of money that is not directly paid or received by NBP. The money is collected and disbursed at NBP counters but this money pertains to accounts of other banks or institutions and not of NBP accounts. Various ways used by people to send and receive money are Bank drafts, Telegraphic Transfer, Mail Transfer, Government Draft and Western Union Money Transfer etc.
The money is transferred to both inside the country and abroad. Customers can also collect their money through bills by presenting cheques, bills for collections and drafts drawn at some other bank or other branch of NBP within Pakistan. The instrument is presented at clearing house of SBP where the bank got the credit and it is further disbursed to payee. Online banking is more famous for this purpose these days.
Conclusion
As I have wrote in my executive summary, this report has done over the National bank of Pakistan at Lahore. The main reason behind this report is to fulfilment of the Virtual university Degree requirement; hence I have done my internship at NBP. This report aim is to analysis the current NBP banking position, its banking function as I have wrote in the critical analysis.
Secondly report was presented in order to dig out the over all condition of the NBP regarding to Banking provocative, management, HRM prospective. As I have wrote in my training program, I worked in the different departments and have learnt lot of work, activities in professional manners. I have observed some true facts regarding to National bank of Pakistan while writing my report. These are under below.
1. NBP have lower customer satisfaction
2. NBP has a poor record management and filing system
3. There is an injustice distribution of work in NBP
4. According to my finding NBP have poor marketing system
5. Practical work is very different from the theory at NBP. Rules, procedures and policies are not fully in practice.
6. NBP have more accounts in terms of number of account but have fewer deposits
7. My findings highlights that manger has very limited authority he or she has to take approval from the upper management for every new decision.
8. NBP staff lacks in specialized training and highly professional education.
9. NPB has a very poor job rotation system and there is a lack of appreciation for staff
10. NBP has improper communication flows with improper communication standards.
11. Promotions are not justly and timely awarded at NBP
