Internship Report National Bank of Pakistan

Acknowledgement For the completion of my report I am indebted to plenty of people for their very sincere cooperation cooperation that they extended extended to me at various stages. First and foremost foremost problem that every student faces is the completion of a report is gathering of data while it is very difficult to learn & rotate in different department of the bank especially in National Bank of Pakistan where work burden is quite higher compare with other banks. On the other hand there is too much short time of our internship (six weeks), furthermore staffs of the bank are too busy in their work so that we cannot be able to learn and do according to our report requirement.

I am very very than thankf kful ul to staf stafff memb member erss of Nati Nation onal al Bank Bank of Paki Pakist stan, an, Main Main Branc Branch h Islamabad, for guidance and providing me valuable information regarding my report completion. Finally I am thankful to the most merciful and Almighty Allah who gives me the strength that I fulfill my task efficiently.

Muhammad Umar

EXECUTIVE SUMMARY 1 Internship Report on NBP, Main Branch Islamabad.

This report highlights the operations and functions of National Bank of Pakistan. NBP act as financial agent to its customers in return it gets reward for its services in the shape of profit. Being a Government owned institution it plays an important role in development of society as well as in development and growth of the economy. Nat Natio iona nall Bank Bank of Paki Pakist stan an is one of the the leadi leading ng banks banks in Paki Pakist stan an.. Accor Accordi ding ng to international standards of banking system it is one of the best bank in South Asian region as well as the bank of the year 2008. This report explains how different functions of NBP work and what are their services.

The main purpose of the internship is to gather relevant information to compile internship report on National Bank of Pakistan Main Branch Islamabad. Anot Anothe herr purpo purpose se of this this Inte Intern rnsh ship ip prog progra ram m is to enab enable le the the stude student ntss to use use the the management techniques acquired during their courses, and find out the possible solution of management problems faced by the organization The report is based on my six week internship program in National Bank of Pakistan. The methodology reported for collection of data is primary as well as secondary data. The biggest source of information is my personal experience, observation while working with staff and having discussion with them. The annual report 2008 also helped me in this regard.

CHAPTER # 1 COMPANY BACKGROUND

2 Internship Report on NBP, Main Branch Islamabad.

The NBP was establish established ed vide NBP Ordinance Ordinance No. XIX of November 9. 1949. British British Govt. devalued its currency in September 1949, India devalued its rupees but Pakistan did not. It led to a crisis in trading between the two countries and India refused to lift the Pakistan Jute. To solve this problem i.e. to export jute NBP was established through an Ordina Ordinance nce of GOP. GOP. Natio National nal Bank Bank of Pakist Pakistan an maintai maintains ns its posit position ion as Pakist Pakistan' an'ss 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 economic growth growth through through aggressive aggressive and balanced balanced lending lending policies, policies, technologically technologically oriented products and services offered through its large network of branches locally, internationally and representative offices. National Bank of Pakistan is the largest commercial bank operating in Pakistan. Its

balance sheet size surpasses that of any of the other banks functioning locally. It has redefi redefined ned its role and has moved from a public public sector sector organiza organizati tion on into into a modern modern commercial bank. The Bank's services are available to individuals, corporate entities and government. While it continues to act as trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does not have a presence) it has diversified its business portfolio and is today a major lead player in the debt equity market, corporate invest investmen mentt banking banking,, retail retail and consume consumerr banking banking,, agricu agricult ltural ural financi financing, ng, treasu treasury ry services and is showing growing interest in promoting and developing the country's small and medium enterprises and at the same time fulfilling its social responsibilities, as a corporate citizen. National Bank of Pakistan has built an extensive branch network with 1250 branches in Pakistan and operates in major business centre abroad. The Bank has representative offices in Beijing , Tashkent , Chicago and Toronto . It has agency arrangements with more than 3000 correspondent banks worldwide. Its subsidiaries are Taurus Securities Ltd, Ltd, NBP Exchange Exchange Compan Company y Ltd, Ltd, NBP Capital Capital Ltd, Ltd, NBP Modara Modaraba ba Manage Managemen mentt Company Ltd, and CJSC Bank, Almaty , Kazakhstan . The Bank's joint ventures are, United National Bank (UK), First Investment Bank and NAFA, an Asset Management Company (a joint venture with NIB Bank & Fullerton Fund Management of Singapore).


The Bank's financial performance has been bee n remarkable. In 2006, total assets are estimated at Rs635 billion, while deposits have grown to nearly Rs502 billion. Pre-tax profit rose to Rs26 billion. Earnings per share have jumped to Rs24.01 in 2006. The increase in profit was achieved through strong strong growth growth in core banking banking income. income. Interest Interest income increased increased by Rs10 billion through growth in the loan portfolio as well as increase in spreads. Advances increased by Rs48 billion to Rs316 billion. The Bank maintains a sound loan portfolio portfolio diversified diversified in nature nature to counter the risk of credit credit concentrati concentration. on. It ranges from providing credit to the un-banked market segment under NBP Karobar, to small and medium enterprises, to agricultural loans, to large corporate customers.

MISSION NBP will aspire to the values that make NBP truly the Nation’s Bank, by:

• Institutionalizing a merit and performance culture • Creating a distinctive brand identity by providing the highest standards of services • Adopting the best international management practices • Maximizing stakeholders value • Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate.

VISION To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices p ractices and social responsibility.

CHAPTER # 2 BOARD MANAGEMENT

OF

DIRECTORS

AND

TOP

Board of Directors President


Mr. S. Ali Raza is the Chairman, President and Chief Executive Officer of National Bank of Pakistan, the largest Commercial Bank of the country. Mr. Raza is a graduate of the London School of Economics and M.Sc. in Adm. Sciences. Before joining the National Bank of Pakistan in July 2000 as the Bank's President, he held a key management position as Regional Manager, Pakistan, Middle East and North Africa at the Bank of America (BOA).

Director

Mian Mian Kaus Kausar ar Hame Hameed ed,, is an MBA MBA from from IBA, IBA, Kara Karach chi. i. His His exper experie ienc ncee incl include udess Manufa Manufactu cturi ring, ng, Retail Retailing ing,, Market Marketing ing,, Manage Managemen ment, t, HR, Traini Training ng and Teachi Teaching ng at various levels in various organizations for 38 years after his education. He has worked with reputed national and international organizations as Regional Manager, Managing Director/CEO, Management Consultant, Resident Director, Member and Chief Operating Officer. He addressed international conferences on Sugar and Ethanol and was speaker in workshops and seminars on CDM and Carbon Finance. He has written several papers on CDM, Ethanol, Agriculture in Pakistan, Trends in Management and HR Development.

Director

Mr. Ibrar A. Mumtaz is a Businessman. He was born in 1947 and comes from a prominent business family of Lahore. He was educated at Aitchison College, Lahore, F.C. College, Lahore and the Institute of Business Administration, (I.B.A) University of Karachi. After completing his education he joined his family business in 1968, namely the Fazal Din’s Group of Companies comprising of Fazal Din & Sons (Pvt) Ltd., Lahore Chemic Chemical al & Pharma Pharmaceut ceutica icall Works Works (Pvt) (Pvt) Ltd., Ltd., Mediph Medipharm arm (Pvt) (Pvt) Ltd., Ltd., Fazal Fazal Din’s Din’s Pharma Plus (Pvt) Ltd. and Medequips.

Director

M-Tariq Kirmani after completing his Masters in Business Administration (MBA) Mr. Kirmani embarked upon a rewarding career, starting with a multi-national Oil Company (Caltex later Chevron Pakistan) in 1969 and worked for seven years in the United States of Ameri America, ca, United United Arab Arab Emirat Emirates es and Austra Australi liaa in differ different ent senior senior managem management ent


positions in Marketing Operations and Finance. In 1991, Mr. Kirmani became the first Pakistani to be elected as a Company Director of the mentioned multi-national company.

Director

Mr. Mohammad Ayub Khan Tarin is a government official. He is an MBA from Western Michigan University, USA. At present, he is working as Additional Finance Secretary (Budget), Ministry of Finance. He possesses 31 years experience in the fields of Financial Managem Management ent,, Budget Budgeting ing,, Account Accounting ing,, Auditi Auditing ng includ including ing Perfor Performan mance ce Auditin Auditing g & Public Administration.

Director

Mrs. Haniya Shahid Naseem is an MBA with more than fifteen years experience of working in the education, social, industrial and agriculture sectors of Pakistan. She has served for 5 years on the Board of a textile company, having a turnover of more than one Billion Rupees. Presently she is actively involved in the administration of Pakistan Public School School Multan Multan.. She is a progre progressi ssive ve agricu agricult lturi urist st and active actively ly partic participa ipates tes in the management of her family’s family’s agricultural farms. She is a member of the Multan Chamber of Commerce and Industry, and is also on the guest faculty of IBA, Multan.

Secretary Board of Directors

Mr. Ekhlaq Ahmed, EVP is the Company Secretary of the Bank and also the Secretary of Credit & Operations Committees. He is M.A. (Economics) from Rajshahi University, Bangladesh (former East Pakistan). He is a Diplomaed Associate Institute of Bankers, Pakistan (DAIBP) and secured overall 1 st position in order of merit and won Muslim Commercial Bank Prize in the subject of “Foreign Trade & Foreign Exchange”. He is an Associate of Institute of Corporate Secretaries of Pakistan (ACIS). He is also a “Certified Direct Director” or” on the panel panel of Pakist Pakistan an Instit Institute ute of Corpor Corporate ate Governa Governance nce (PICG (PICG)) since since November, 2007. Mr. Ekhlaq Ahmed is the first senior executive of the Bank who has achieved the status of “Certified Director”.


MANAGEMENT

Managem Management ent is a disti distinct nct proces processs consist consisting ing of activi activitie tiess of planni planning, ng, organi organizin zing, g, actuating and controlling performed to determine and accomplish stated objectives with the use of human being and other resources. resources. NBP have a centralized type of management because the top management takes all the decisions. SENIOR MANAGEMENT OF NBP

Senior Management of NBP comprises of the following member and their respective designation.

Designation

Name

Maso Masood od Kari Karim m She Sheik ikh h

SEVP SEVP & Grou Group p Chie Chief, f, Corp Corpor orat atee & Inve Invest stme ment nt Bank Bankin ing g Group and Chief Financial Officer

Mr. Ekhlaq Ahmed

EVP & Secretary Board of Directors

Derick Cyprian

SEVP & Group Chief, Special Assets & Remedial Management Group

Imam Bakhs khsh Baloch

SEVP & Group Chief, Audit dit & inspection

Shahi ahid An Anwar Kh Khan

SEVP & Group Chief, Co Commercial & Retail Ba Banking Group oup

Nadeem A. A. Do Dogar

EVP & Gr Group Ch Chief, In Information Te Technology Gr Group

Muhammad Sardar Khawaja

EVP & Group Chief, Audit & Inspection Group

Dr. Asif A. Brohi

SEVP & Group Chief, Operations Group

Javed Mehmood

EVP & Group Chief, Risk Management Group

Muhamm Muhammad ad Nusr Nusrat at Vohr Vohraa

SEVP SEVP & Group Group Chie Chief, f, Trea Treasur sury y Mana Managem gement ent Group Group

Nadeem Ilyas

EVP & PSO to the President


Dr. Mirz Mirzaa Abr Abrar Bai Baig

SEVP EVP/Grou Group p Chi Chief Hum Human Reso Resour urce ce Manag anagem emen entt & Admin.

CHAPTER # 3 INFORMATION AND DEPARTMENTALIZATION OF NBP

INTRODUCTION This chapter presents the services and departmentalization of NBP. Services are outputs of the firm/organization, which are in intangible form & which are the backbones of any organization to earn profit? NBP offers the following services to the people. 

TRADITIONAL BANK ACCOUNTS



DEMAND DRAFTS



SHORT / LONG TERM INVESTMENTS



AGRICULTURE FINANCE



CORPORATE FINANCE




CASH MANGMENT SERVICE



CASH AND GOLD FINANCE



ADVANCE SALARY LOAD



STUDENT LOAN SCHEME



PENSION PAYMENTS



TELEGRAPHIC TRANSFER



SWIFT SYSTEM



LETTERS OF CREDIT



TRAVELER'S CHEQUES



PAY ORDER



MAIL TRANSFERS



FOREIGN REMITTANCES



BUSINEES LOANS



AGENCY SERVICES



UTILITY BILL COLLECTIONS



HAJJ ARRANGEMENTS



SAFE DEPOSIT LOCKERS

DEPARTMENTALIZATION Dividi Dividing ng an organi organizat zation ion into into differ different ent parts parts accord according ing to the functi functions ons is called called departmentation. So NBP can be divided d ivided into the following main departments. 

CASH DEPARTMENT



CLEARING DEPARTMENT




ADVANCES DEPARTMENT



REMITTANCE DEPARTMENT



HUMAN RESOURCE MANAGEMENT



FOREIGN EXCHANGE DEPARTMENT



CMPUTER DEPARTMENT

CHAPTER # 4 SWOT ANALYSIS This section of report constitutes the SWOT Analysis of NBP. SWOT analysis is one of the most important steps in formulating strategy using the organization mission as a context; managers assess internal strengths distinctive competencies and weakness and external opportunities and threats. The goal is to then develop good strategies and exploit opportunities and strengths neutralize threats and avoid weaknesses with an overall organizational goal is to increase the wealth and value of the organization.

STRENGTHS 

OLDEST INSTITUTION



ALTERNATE DUTIES IN SBP ABSENCE




MORE DEPOSITS THAN OTHER BANKS



EMPLOYEE BENEFITS



BROAD NETWORK



STRICTLY FOLLOWED RULES & REGULATION



PROFESSIONAL COMPETENCE



HEALTHY ENVIROMNMENT



RELATION BETWEEN STAFF AND OTHER EMPLOYESS



STABILITY IN POLICIES RESULT BATTER EFFICIENCY



EXPERIENCED AND EFFICIENT MANAGEMENT



NEW CONCEPT OF MANAGEMENT TRAINEES (MTOs)

WEAKNESSES 



LACK OF MARKETING EFFORT NBP UNDER POLITICAL PRESSURE



FAVORITISM AND NEPOTISM



LACK OF FINACIAL PRODUCT



INEFFICIENT COUNTER SERVICES IN THE RUSH HOURS



LACK OF COMPUTERIZED NETWORKLACK OF MODERN EQUIPMENT



UNEVEN WORK DISTIBUTION.

OPPORTUNITIES 11 Internship Report on NBP, Main Branch Islamabad.



ELECTRONIC BANKING



MICRO FINANCING



GROWING BUSINESS AND BUSINESS POLICIES



TECHNOLOGICAL ADVANCEMENT



OPPORTUNITY TO EXPAND FOREIGN OPERATIONS



CONTINUEING THE PROCESS OF MANAGEMENT TRAINESS

THREATS 

EMERGENCE OF NEW COMPETITORS



POLITICAL PRESSURE BY ELECTED GOVERNMENT



DOWNSIZING



CUSTOMERS COMPLAINTS



GROWING GLOBAL TECHNOLOGICAL ADVANCEMENT



INCONSISTENCY IN GOVERNMENT POLICIES

COMPETITIVE ANALYSIS Porter’s five forces model:

This approach is widely used for competitive analysis. It is because of the high intensity of competition among companies there five main competitive forces. Rivalry among competitive firms:

It is a very powerful force among the competitive forces the strategies pursued by one firm can be successful only to extent that they provide competitive advantages over the competitor. These competitive strategies may be lowering prices, best quality qu ality series. The NBP offering very low charges an demand draft, telegraphy transfer, mail transf transfer er and give give other other additio additional nal servic services es to the customers customers and to the Nation Nation.. Because NBP is a “Nation’s Bank.


Potential entry of new competitors:

Whenever new firms ca easily enters a particular industry, the competition increases. The gout restriction, tariffs, patents etc can stop new firm to enter into the business as per Banking industry is concerned this market is already very situated in Pakistan and there are banks with quality services and low charges. So there is no threat to NBP from potential entry and NBP is also a public sector bank because of that no other new bank not takes over it. Potential Development of substitute products:

This is the third factor affecting the competitions. There may be some other product can be substitute the product of that industry. For example banks offering sawing schemes in Pakistan and these schemes are also offered by GPOs in Pakistan so they must compete them in this field. If they offer low rates than GPOs so people will go to deposi depositt in GPOs. GPOs. People People concen concentra tratio tion n high high rates rates so that’s that’s why sawing sawing PLS PLS accounts are more then current accounts. The next examples will ATM, which substitute presenting cheques at counter and encash it. The NBP is lacking in this field. It must improve in this field to compete the competitors. Bargaining Power of Suppliers:

The bargaining power of supplier affects the intensity of competition, especially when there are a large number of suppliers. In case of banks the suppliers are customers they supply the money to banks. Now they must offer good services, quality, and safety. Low charges etc to customers. In this field NBP is very good. B/C at offers good quality services to customers. They charge low charges on remittances. So that’s it is a competition to other banks. Bargaining Power of Consumers:


When customers are concentrated or large, or buy in volume, their bargaining power repr repres esen ents ts a majo majorr forc forcee affe affect ctin ing g inte intens nsit ity y of comp compet etit itio ion. n. Now the the numbe number r customers in Pakistan for banks are very high. Banks offering variety of products and services to their customers. NBP have a large number of customs. Now it must offer good services and products to their customers to attract them to come to NBP.

WEEKLY LEARNING

There are following learning points for me in the bank.

Duties workd under the assistan assistance ce of Mr.Muhammad Mr.Muhammad In my 1st and 2nd week in NBP I workd Nasir (Operation Manager) from him I learn about activities activities related to Deposit Dept: and performed such activities like: •

Opening an account

•

Issue new cheques books

•

Sorting out cheques

•

Difference between cheques of current, saving and royal account

And I also scrolld scrolld the challan of Government and pass vouchers. assigned me work related related to pension pension department. department. In my 3rd and 4th week in NBP, they assigned The staff guided me very nicely and I learned lot of things pension related activities. They give the pension to retired Govt. employees. There are three types of pensions given,


•

Provincial

•

Central

•

Defense

These are different according to their PPO numbers For example: Provincial PPO 123456 Central PPO 12345/pak Defense PPO da/dg1/gh/4 etc. I am full trained now in this particular job and I served lot of people in that week. How to fill farm? How to enter in ledgers and balance account and what are file and book and all other things concerning to pension department. In 5th week I worked under the assistance of Mr.Muhammad Irfan Khan (Chief

Manager) from him I learn about remittance activities: activities: •

Demand Draft

•

Telegraphic Transfer

•

Pay Order

•

Mail Transfer

In 6th week I learnt the swift operations. How swift system works and managed and how

to transfer money through swift system.


Relationship of MY INTERNSHIP WITH MY BBA KNOWLEDGE This internship gave me a chance to apply


FINDING AND OFFER CONCLUSION

INTRODUCTION The findings are the facts that we discover from the analysis of an organization and in the light of those findings we give the suggestion, which are realistic and adoptable for the organization. After critically analyzing both the operations and financial data of National Bank, let me summarize the findings of the report. Here, Here, few findi finding ng and implem implement entati ation on plans plans are given given to overco overcome me the proble problems ms mentioned in the previous chapter. These analysis are mainly based on my practical working & experience at the NBP during internship. I have divided this section in four parts which are as under. 

Problems at the branch.



Function analysis.



Administrative analysis.



Personal management’s analysis.

PROBLEMS AT THE BRANCH

Customer Satisfaction

In NBP customer dealing is will, but during rush hour the customer has to wait for a long time for their turn. It’s quite hard for a new customer or potential customer to get the


required information. Poor record management and filing system

During my internship I observed that filing system of branch is not good. When certain record is needed the staff has to struggle to find it out and a lot of time is wasted both by the staff and customer as well also old filing and registering system are being used yet. Unequal distribution of work

Work is not equally distributed. On one hand some employee have to work all day without relaxing while some others have nothing to do at all. This not only creates confusion among employees but also hurting and disturbing for overall setup of the bank. And above all it results in dissatisfaction among customers as well. Marketing efforts

A useful mode of contact is through personal marketing visits or efforts. Such visits are import important ant in inform informing ing and perusi perusing ng the existi existing ng and potent potential ial custom customers ers about about the products and creating a sense of belongingness with them. By this way a branch manager increases their deposits and creat more advances. The ultimate result is increase in the bank’s deposits as well as supreme motive that is profitability. profitability. Less staff

Staff of the branch is less and workload is too much on the existing staff. Due to which they are unable to give proper time to their customers. Sometimes due to this shortage of time they lose their good customers also from this shortage of staff they are unable to give proper time to recording and other functions of the bank.

FUNCTIONAL ANALYSIS Formal Organization


Formal Formal organizatio organization n includes includes the activities activities of two or more person, which are cautiously cautiously determined groups and coordinated towards a given objective. It provides base when people are able to communicate with other, when they have common purpose and they are willing to work.

In NBP, we find a formal organization. Bernard referred to an organization as a formal when the activities of two or more persons are coordinated towards a given objective. The formal organization comes into being when people are able to communicate with one another or willing to act and share a purpose. In this formal organization of NBP the activities are carried out in a more formal way. In theoretical terms it provides basis for communication with one another but in practice it is not exercised because an employee at high level cannot get straight away to manager or SVP and ask him about of his problem faced by him, because first he has to talk to his immediate superior and follow a proper channel of communication. Difference between theory and practice

A vast difference exists between theory and practice and NBP has written procedure but practical work done by employees is a bit different from written procedures. Bank duty to maintain secrecy.

They don’t care about maintaining secrecy, especially during the rush hours. They speak loudly about the account position and while getting clearance of cheque the person can easily get the whole information from the ledge. The deposit clerk must be careful while passing any cheque. In this regard another shortfall is in giving the information about the balance on telephone. Excessive paper work

It is notified that due to the lengthy procedure of paper work the bank employee are over burdened. They are unable to give proper attention to the clients and face difficulties in getting their job done. One reason for lengthy procedure and excessive paper work in the


bank is the lack of computerized technology. More accounts fewer deposits.

Efficient banking is one, which does not emphasize on number of accounts but on greater amou amount nt of depos deposit its. s. NBP NBP is more more inte intere rest sted ed in incr increa easi sing ng its its numb number er of acco account unt irrespective to its deposit. The main reason behind it is that bank does not provide perso personal nalize ize servic servicee to all the accoun accountt holder holderss and does does not improve improve its its quality quality and services Delegation of authority

Manager has very limited authority; he has to take the approval from his management authority i-e. In case of advance he has to take the approval of general and regional manager. The other problem is created, when the manager is not present in his office, the customer having to wait for hours. This discourages both customer and officers because they have to suffer a lot ADMINISTRATIVE ANALYSIS Job analysis is not effective

Only on the basis of job analysis it can be decided how a right person can be hired, trained, compensated or promoted. It is very important for an organization that nature of the job is described and job specifications are mentioned. Most of the employees are simp simple le grad gradua uate te and do not have have prope properr backg backgro roun und d about about thei theirr job. job. This This crea create tess probl problems ems both for organizat organization ion and for the employ employees ees.. In NBP salaries salaries are given given according according to the seniority seniority and grades. grades. People People with simple or complex complex responsibil responsibility ity are getting the same salary and facilities. This creates dissatisfaction among employees. Carelessness in opening of account

When customer comes to open an account, the staff does not bother to check his/her place phone number and permanent address. It is important because in case of overdraft by


mistake or anything which places his accounts in debit it will be difficult to trace him. On the other hand he may be involved in any fraudulent activities against the bank. In this case the bank will be in awkward position. Lack of specialized training

NBP does not provide adequate facility of specialized training to their staff. Training is generalized rather than specialized. As the worker finishes his training, he is inducted into a specific field without having great deal of knowledge about the field. In the Hayatabad branch the newly recruited employee training was not imparted, they all learned things on the job. Low Profit Rates

Most of the customers shifted their account to the National Saving Center because of the low rates of saving deposit discourages the customers. Bank should increase their profit rates to attract customers. Poor job rotation.

There is absence of job rotation in NBP Hayatabad branch. A person placed in onedepartment remains their forever. It reduces career opportunities as well boredom and in the end results in career plaguing. Job rotation is very important for employee especially for those who are newly recruited. The newly recruit should be rated in all department of the banking in order to get familiar with working of different departments so that when they get a responsible position they have know how of the whole system. Delays in Loan Advancement

It has been observed that there is much delays in sanctioning of cases from the head office, which results in customer dissatisfaction. Lack of appreciation


Another very important thing which is ignored in the bank is appreciation if the employee on their good performance. If hard work and performance of employees is not recognized and appreciated they become dishearten which results in decline in performance. PERSONAL MANAGEMENT ANALYSIS Need for better training program

Need of training is greatly emphasized all around the world. Training of the personnel is part of human resource management. It has been noticed that the training program of NBP is not adequate. Once the candidate is selected and placed on the respective job. It becomes essential to train train him adequatel adequately y for the task. task. They They should should learn learn new method methodss for motivati motivating ng customers. The training programmed of the bank should include scientific techniques to improve the decision-making and interpersonal as will individual needs of the employee both specialized to fresh as well as on job to maintain the high standards of service. Developing Managerial Leadership

Leadership is a practical term of visible, clear on objective and communicating better control on financial and administrative matters. Manager is not only responsible for their own units in business, but also in people peo ple terms i.e. training, recruiting, grievance handling and taking immediate initiative in crisis situation to take major decision affection the future of the bank and banking community. Recruitment policy

Human resources are the lifeblood of the organization. If the personnel are recruited carefully they can become asset to the organization in the case of carelessness a liability on the organization. Bank is not following its recruitment policy properly due to favoritism, nepotism and political pressure. Both the top authority and staff union tries their best recruit their favorites, indulgence of political pressure add salt to the wounds.


The persons selected through these channels are infantile and do not work for the betterment for the bank. Promotions

Promotion in NBP is purely on the basis of seniority, so the new young person having high qualification remains behind for quite a lot of time. Top management and an d staff union put pressure for the promotion of their favorites, which gives a sense of deprivation to the deserving employee and their efficiency is affected. As the concept of promotion is attached with better in terms of greater responsibility, more prestige, greater skills and increased rate of salary. Thus a better and impartial policy of promotion needs to be followed. Transfer

Transfer means when a person is shifted from one place to another place. It is done either that person is needed more on the other branch or for improving his skill variety. It is the policy of the Bank to transfer each employee 3 to 4 years. Marketing at desk

Bank employee come in daily contact with many people who happen to deal with the casual remittance, travelers cheques, safe custody, pensioners, depositing license fee and variety of other functions and variety of other people with whom the Bank has no account or regular business relationship. The Bank employees are doing very little on their own to explore the possibilities of selling banking services to them as a marketing contributor. The entire Bank community should make a conscious effort in addition to their normal work to explore the possibilities of selling banking services to them. The market opportunities are hidden in every dealing a banker handles; the question is that if he has the art and urge to seize such opportunities. Lack of business communication

There is no proper way to give information to their customer. To avoid this minor


dissatisfaction and tension in the mind of customer, and deficiency of the service, it is recomm recommende ended d that that the bank bank should should provid providee brochur brochures es etc contai containin ning g inform informati ation on in details. Some general information should be placed in information notice board on the entrance where customer can see it easily or it should be self-attractive.

RECOMMENDATIONS & SUGGESTIONS NBP is an effectively operating and profit making organization and carrying out its activities under a specified system of procedure. The main regulatory body is State Bank of Pakistan, which provides policy guidelines and ensures that the money market operates on sound professional basis. While the head office specifies the whole procedure of


function and operations. This procedure has been modernized with the passage of time with with a view view to stre stream amli line ne the the appr approa oach ch and and under underly lyin ing g proc proced edur uree for for effe effect ctiv ivee overhauling of its own capabilities so as to bring them at par with international practices. Here I am giving some suggestions, which in my view can add some input for efficiency and better performance of NBP as an organization in general and as a main branch in particular. The recommendations are as follows: Professional training

NBP staff lacks professionalism. They lack the necessary training to do the job efficiently and properly. Although staff colleges in all major cities but they are not performing well. For this purpose these staff colleges colleges should be reorganized reorganized and their syllabus should be made in such a way to help the employee understand the ever-changing global economic scenario. Banking council of Pakistan should also initiate some programs to equip the staff with much needed professional training. Delegation of authority

Employees of the bank should be given a task and authority and they should be asked for their their respons responsibi ibilit lity. y. Gives Gives proper proper attent attention ion to every every work work and concern concern bodies bodies are responsible to delegate the authority to whom they think that will perform batter. Performance Appraisal

The manager should strictly monitor the performance of every staff member especially operation manager of the branch. All of them should be awarded according to their performance and result in the shape of bonuses to motivated and incite them to work more efficiently. To Over Come Problem of Space and Furniture


In the criti critical cal analys analysis is this, this, proble problem m is discus discussed sed.. To overcom overcomee this this proble problem m it is suggested that a special section should be made inside the branch. Which should only handle the treasury function, salaries and pensions of federal personnel or the bank should do these functions functions in the evening time. Also management management should purchase more furniture and arrange them in such a way which provides maximum space and convenient especially in deposit department and there should also be convenient sitting place for customers. Transfer

Transfer is not properly carried out. Some of the employees are continually serving at the same post. They are simply rotated at the same branch. Therefore it is recommended that evenly rotation of every employee should take place after every three years in different braches of the bank. Changes in Policies

There should not be any abrupt policies change by the upper management, as this practice hurts the customer confidences in the bank. Government should make long-term policies

Need Qualified Staff

Required, qualified staff should be provided to branch in order to improve the functioning of the branch. Especially a telephone operator should be appointed. Utility Bill Charges

Bank gets Rs. 2 to 3 to processes a utility bill, and it is very tire, tough and hard job despite this working resulting in a loss to then Rs 3 to5 per transaction. These charges should be increased to RS 10 per bill to enable the branch to cover their handling costs and make some profit. Link with the Head Quarter


100 major branches of NBP should established a direct link with the, head quarter in Karachi, through Internet or Intranet. This will make the functions and decision making of the management management easier and convenient. convenient. But still still NBP main Branch Mansehra did not have online facilities. Credit Card

National bank of Pakistan should start its operation in credit card. These cards are very helpful for the ordinary customer in general and the business people in particular. To make it mores secure and to eliminate the misuse of it, the management is required to keep proper security against the card. Installing Validator and ATM

Validator machine is used to count the currency notes and its installation will help to eliminate to counting errors and will save time. This will also help in saving time result is work completed on time This branch is situated in the City, which is supported to be the hub of business activates. In this area an automated teller machine (ATM) is the need of the hour businessmen can easily check their balance in the bank and also with draw their money conveniently. Interest on Overdraft:

Overdraft is a short-term credit facility provided by the bank to its trustworthy customers free of interest. Only bank commission is charge small amount of mark-up on the overdraft, which will help the bank to improve its revenue position. Clean Loans

Clean loan or clean overdraft is the credit facility extended to the customers to the customers without any security. These types of small term loans should not be extended to anybod anybody, y, becaus becausee someti sometime me these these loans loans are provided provided to blue-e blue-eyed yed people people of the management and they become a part of bad debts.


Cash Financing

In this mode of financing the amount of credit not utilized by the borrower is remained tax-free. It is recommended that a small amount of interest should be charge on this amount as well because the bank gas kept-aside the amount for that borrower and can not advance it anywhere. Decreasing Administrative Expenses

Bank should their administrativ administrativee expenses. expenses. This was Rs 8 billion billion in the year 2000. That can be done by lying off the surplus pool of employee with golden handshakes scheme. The branches that are not much used could also be closed. Employee can also be how to control the bank expenses. That Tha t will give positive results in the future. Needs to be Flexible in credit Policy

As mentioned earlier, NBP is very conservative in advances and loans policy. It reduces the investment opportunities. Also loans should be given to the small businessmen and the agriculture sector at the low markup rate. It should adopt flexible credit policy while giving credit to the agriculture sector. Technological Advancement

I would like to suggest that at least all the main branches of NBP should be fully comp comput uter eriz ized ed in orde orderr to expe expedi dite te the the deal dealin ing g proc proces esss amon among g banke bankers rs and and thei their r customers. customers. Every department department should be provided provided a computer computer with adequate adequate training training (especially Advances, Deposits and Foreign Exchange departments) Daily records should be entered entered directly directly into these computers, computers, (instead entering the overall overall daily transactions transactions after the banking hours). It will not only reduce transaction transaction time, will increase accuracy but will also be efficient as well. Staff Relationship


Good Good rela relati tion onsh ship ip amon among g staf stafff memb member er lead leadss to the the peak peak perfo perform rman ance cess in any organization. I observed that the staff relationship was normal other wise but some time I noticed that there existed a little conformity among the staff members. Another syndrome from which the staff suffered was that all of them considered themselves more important than others. Some of the officers used to say that if I am absent for a day the bank would stop working. So this sort of attitude is not good because it mars bank image and juniors’ willingness learn and work hard and in the end will hurt the whole team. Improper Distribution of Work

Proper distribution work leads to success in every organization. Proper distribution of work prevents the employee from over and under work situation. So for a smooth running of an organization proper distribution of work is the hint to be followed. During my internship I observed that there was no proper distribution of work in the bank. I saw that some of the employee worked like ants other sat idle starting here and there. So this created a lot of over work situation for while relaxation for other. Favoritism and nepotism

In the during my internship in Main Branch Mansehra I saw that when some of the employees are transfer to other places, due to their relation with influential people and with with top top manag managem emen entt they they can can canc cancel el thei theirr trans transfe ferr in few few weeks weeks,, when when they they are are unsatisfied at that place. Not in one branch of NBP but as a whole. This process will also be apply in recruitment and selection process. Deserving candidate will fails to qualify. So I suggest that in the organization there should be no favoritism, nepotism and politics and their transfer and promotion should be made on merit and according to the rules and regulations of the bank and provided favorable environment to the employee to show their performances. Skilled and Highly educated staff


National bank of Pakistan requires skilled and highly educated staff. Nowadays, there is a large number of M.B.As who is unemployed. These young people have the knowledge and skill to compete in this competitive and dynamic environment of banking. National bank of Pakistan should recruit new young professional. Inter Departmental Transfer

I watched during my internship that, there is number of employee who have worked on one seat for many a year. It can have negative effects motivation of employee who is hard working and intelligent. Take the example of advances section. In advance section if the employee is transfer after sixth month or seven month, how can he be able to show his performances and how can he be able to know the bank customer in a short period of time. Marketing Policy

The branch should should adopt various marketing marketing strategy strategy and promotion promotion strategy to promote promote the bank and its product. But being a nation’s bank it did not makes so much marketing policies. The most important in my opinion is personal marketing; it is the most effective of all when you think in term of branch level. But on the whole organization level, they should arrange the seminar with in the bank and outside the bank. They should introduce various prizing schemes just like Habit Bank. Mahana Scheme, Bank Al-Falah (monthly income earning scheme) and various others. They should do more advertising through newspaper and media and through channel of personal contacts. Complaints of Customer

There should be an information desk to provide the information and to receive the complaints of the customer in the bank. There is no complaint box available in the branch and not any person appointed to hear the complaints.


Every person cannot go to the manager for the complaint because most of the people are hesitant. So I suggest management to install a compliant box in the branch, and recruit a special person for that guidance of the customer when they are unable to manage some difficulties in banking matters. Analysis of the Business:

Proper analysis of the business reports should be conducted before extending any type of loan. For this purpose professional training of the stuff member is required. Organizational Commitment

It is suggested that employees working on daily wages basis should be given some benefits, which the other employees are getting. Their salaries must increase according to efficiency, performance and service. Managerial Leadership

In the analysis, we have discussed the difficulties of the assistant in taking any initiative; therefore it is recommended that the assistants should he given special training to make them ready for the leadership. Credit Monitoring

The credit department of the bank should carries out vigilant credit monitoring. They should ensure the proper payment of installments and the mark-up by the borrower. The staff members who have done all the paper work of the loan extension should perform the monitoring, as he/she will be having more information about the borrower. Housing and House Hold Goods loans

Bank should initiate these loans because most of bank’s customers are middle class and they they cannot afford afford to buy house or househol household d goods at once by their own. For this this purpose bank should set lowest markup to its to attract customers.


Avoiding Bad Debts

Special care should be taking while extending the loan. Loans should be awarded against reasonable securities, where market value should be equal to the loan granted. Policies should be crafted in a way to ensure that no loan is extended on political pressure. SBP regulation for loan approval should be strictly followed. According to which the current ration of borrower’s business must be 1:1 and the debt to equity ratio should be 60:40, means the liquidity position of business should be healthy. Car Financing Scheme

Car financing scheme with the name of “ MY CAR FINANCING SCHEME” should be initiated This finance scheme will help the general public to buy the car of their choice in easy quarterly installments The bank monitors will do strict monitoring and the car will be hypothecated with the bank against the car loan. Avoid Political interference

Political interference is the second big problem for National Bank of Pakistan. So, it is very important to avoid political interference in banking operations. In order to avoid this first suggestion is the denationalization of the bank


Bibligraphy 

Israr, Israr, Siddiq Siddiqii H. (1998B (1998Bank anking ing law and Financ Financial ial Service Services. s. Karach Karachi: i: Decent Decent Print Print Enterprises. Page 35, 36, 40.

 Sir Paged John. The law of Banking. The Law of Banking. McGraw Hill Publication: page 51-58 

Dr.Aftab Ahmad Khan (Macro Economics and Financial Sector of Pakistan.)

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Bank Nationalization act 1974.

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President Office, June 21, 2006, Circular No. 13, 2002. Head Office National Bank of Pakistan Karachi.

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Standard procedure Manual of National Bank of Pakistan.

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Instruction Circulars of 2008

 Http// www.nbp.com.pk .

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National Bank of Pakistan Yearly Report 2008.


Internship Report National Bank of Pakistan

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