Professional Documents
Culture Documents
Table of Contents
CHAPTER 1
INTRODUCTION 4
Evolution of Banking-------------------------------------------------------------------------------------------------------------------5 Modern Banking-------------------------------------------------------------------------------------------------------------------------5 Definition of Bank-----------------------------------------------------------------------------------------------------------------------6 Types of Bank----------------------------------------------------------------------------------------------------------------------------6 Banking Channels-----------------------------------------------------------------------------------------------------------------------8 Banks in the Economy----------------------------------------------------------------------------------------------------------------10
CHAPTER 2
BANKING IN PAKISTAN 12
CHAPTER 3
NATIONAL BANK OF PAKISTAN (NBP) 16
Introduction of an organization---------------------------------------------------------------------------------------------------17 Golden History of NBP----------------------------------------------------------------------------------------------------------------18 Phases of NBP --------------------------------------------------------------------------------------------------------------------------20 Present Status of NBP-----------------------------------------------------------------------------------------------------------------21 Awards and Achievement-----------------------------------------------------------------------------------------------------------22 Vision-------------------------------------------------------------------------------------------------------------------------------------25 Mission-----------------------------------------------------------------------------------------------------------------------------------26 Core Values & Goals-------------------------------------------------------------------------------------------------------------------27 Credit Rating----------------------------------------------------------------------------------------------------------------------------28 Market Recognization----------------------------------------------------------------------------------------------------------------29
CHAPTER 4
SWOT ANALYSIS OF NATIONAL BANK OF PAKISTAN 30
SWOT Analysis Strengths------------------------------------------------------------------------------------------------------------31 SWOT Analysis Weaknesses--------------------------------------------------------------------------------------------------------33 SWOT Analysis Opportunities------------------------------------------------------------------------------------------------------35 SWOT Analysis Threats--------------------------------------------------------------------------------------------------------------36
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CHAPTER 5
MANAGEMENT STRUCTURE 38
Corporate Profile----------------------------------------------------------------------------------------------------------------------38 Board of Directors---------------------------------------------------------------------------------------------------------------------39 Senior Management-------------------------------------------------------------------------------------------------------------------39 Overseas Operation Management-------------------------------------------------------------------------------------------------40 NBP Head office Setup----------------------------------------------------------------------------------------------------------------41 Management Hierarchy--------------------------------------------------------------------------------------------------------------43 Branch Organogram------------------------------------------------------------------------------------------------------------------45
CHAPTER 6
POLICY FORMULATION PROCESS 46
Managerial Policies-------------------------------------------------------------------------------------------------------------------46 Operation Policies---------------------------------------------------------------------------------------------------------------------47 Credit Policies --------------------------------------------------------------------------------------------------------------------------47 Human Resource Policies-----------------------------------------------------------------------------------------------------------48
CHAPTER 7
CATEGORIES OF NBP BRANCHES 49
Employees in various Departments----------------------------------------------------------------------------------------------50 Job Description-------------------------------------------------------------------------------------------------------------------------51 Salary Conditions----------------------------------------------------------------------------------------------------------------------57 Human Resource-----------------------------------------------------------------------------------------------------------------------58 Career Ladder-------------------------------------------------------------------------------------------------------------------------- 61 Performance Appraisal--------------------------------------------------------------------------------------------------------------62
CHAPTER 8
MANAGEMENT STYLES 63
CHAPTER 9
MARKETING 64
CHAPTER 10
NBP ISLAMIC BANKING 138
CHAPTER 11
FINANCIAL ANALYSIS 144
Horizontal Analysis of Balance Sheet------------------------------------------------------------------------------------------147 Vertical Analysis of Balance Sheet----------------------------------------------------------------------------------------------149 Index Analysis------------------------------------------------------------------------------------------------------------------------151 Liquidity Ratio------------------------------------------------------------------------------------------------------------------------153 Portfolio Management Ratio------------------------------------------------------------------------------------------------------154 Capital Adequacy Ratio-------------------------------------------------------------------------------------------------------------156 Financial Leverage Ratio-----------------------------------------------------------------------------------------------------------158 Profitability Ratio--------------------------------------------------------------------------------------------------------------------160
CHAPTER 12
DEPARTMENTS 170
General Banking----------------------------------------------------------------------------------------------------------------------171 Account Opening Department----------------------------------------------------------------------------------------------------171 Cash Department---------------------------------------------------------------------------------------------------------------------182 Clearance-------------------------------------------------------------------------------------------------------------------------------186 Billing & Government Receipt/Payment--------------------------------------------------------------------------------------190 Remittances---------------------------------------------------------------------------------------------------------------------------191 Computer Section--------------------------------------------------------------------------------------------------------------------196 Credits----------------------------------------------------------------------------------------------------------------------------------200
CHAPTER 13
STRATEGY FORMULATION 216
Input Stage Internal Factor Evaluation Matrix (IFE) ---------------------------------------------------------------------------------220 External Factor Evaluation Matrix (EFE)-------------------------------------------------------------------------------- 222 Competitive Profile Matrix (CPM)------------------------------------------------------------------------------------------224 Matching Stage SWOT Matrix Model SPACE Matrix Boston Consulting Group Matrix (BCG) Decision Stage Quantitative Strategic Planning Matrix (QSPM)
ANNEXURE
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EVOLUTION OF BANKING
Banks are in some senses a very old profession, but the modern way of banking affecting the whole of society so much is of course very new. The first banks were probably religious temples of the ancient world. In them was stored gold in the form of easy-to-carry compressed plates. Their owners justly felt that temples were the safest places to store their gold as they were constantly attended, well built and were sacred, thus deterring would-be thieves. There are extant records of loans from the 18th century BC in Babylon that were made by temple priests to merchants.
MODERN BANKING:
Banking in its modern form and structure started in Britain when many of the Lombardy merchants came to England in the 14THCentury and settled in the parts of the city of the London now called Lombard Street. The King Edward-III established the office of Royal Exchanger in 1565 for changing foreign money at a profit for the benefit of crown. At that time moneychangers were already called bankers, though the term "bank" usually referred to their offices, and did not carry the meaning it does today. Around the time of Adam Smith (1776) there was a massive growth in the banking industry. Within the new system of ownership and investment, money holders were able to reduce the State's intervention in economic affairs, remove barriers to competition, and, in general, allow anyone willing to work hard enough-and who also has access to capital-to become a capitalist. It wasn't until over 100 years after Adam Smith, however, that US companies began to apply his policies in large scale and shift the financial power from England to America. By the end of 2000, a year in which a record level of financial services transactions with a market value of $10.5 trillion occurred, the top ten banks commanded a market share of more than 80% and the top five, 55%. Of the top ten banks ranked by market share, seven were large universal-type banks (three American and four European), and the remaining three were large U.S. investment banks who between them accounted for a 33% market share. This growth and opportunity also led to an unexpected outcome: entrance into the market of other financial intermediaries: nonbanks. Large corporate players were beginning to find their way into the
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financial service community, offering competition to established banks. The main services offered included insurances, pension, mutual, money market and hedge funds, loans and credits and securities. Indeed, by the end of 2001 the market capitalization of the world's 15 largest financial services providers included four nonbanks.
DEFINITIONS OF BANK
Banks are guardian distributor of money Banks do business of money. Rather banks do business of lending & borrowing money Banker or a banker or a person or a company carrying on the business receiving moneys and collecting drafts for customers subject to the obligation of honouring cheques drawn upon them from time to time by the customer to the extent of the amount available on their current accounts
TYPES OF BANKS
Commercial banks:
The term used for a normal bank to distinguish it from an investment bank. After the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas investment banks were limited to capital market activities. Since the two no longer have to be under separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.
Community banks:
Locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners.
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Private banks:
Banks that manage the assets of high net worth individuals.
Offshore banks:
Banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks.
Savings banks:
In Europe, savings banks take their roots in the 19th or sometimes even 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative; in others, socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly decentralised distribution network, providing local and regional outreachand by their socially responsible approach to business and society.
Ethical banks:
Banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments.
Types of investment banks: Investment banks: Investment banks "underwrite" (guarantee the sale of) stock and bond issues,
trade for their own accounts, make markets, and advise corporations on capital market activities such as mergers and acquisitions.
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Merchant banks:
Merchant banks were traditionally banks which engaged in trade finance. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new companies.
Banking channels
Banks offer many different channels to access their banking and other services:
BRANCH
A branch banking centre or financial centre is a retail location where a bank or financial institution offers a wide array of face-to-face service to its customers.
ATM
ATM is a computerized telecommunications device that provides a financial institution's customers a method of financial transactions in a public space without the need for a human clerk or bank teller. Most banks now have more ATMs than branches, and ATMs are providing a wider range of services to a wider range of users. For example in Hong Kong, most ATMs enable anyone to deposit cash to any customer of the bank's account by feeding in the notes and entering the account number to be credited. Also, most ATMs enable card holders from other banks to get their account balance and withdraw cash, even if the card is issued by a foreign bank.
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MAIL
Mail is part of the postal system which itself is a system wherein written documents typically enclosed in envelopes, and also small packages containing other matter, are delivered to destinations around the world. This can be used to deposit cheques and to send orders to the bank to pay money to third parties. Banks also normally use mail to deliver periodic account statements to customers.
TELEPHONE BANKING
Telephone banking is a service provided by a financial institution which allows its customers to perform transactions over the telephone. This normally includes bill payments for bills from major billers (e.g. for electricity).
ONLINE BANKING
Online banking is a term used for performing transactions, payments etc. over the Internet through a
MOBILE BANKING
Mobile banking is a method of using one's mobile phone to conduct simple banking transactions by
VIDEO BANKING
Video banking is a term used for performing banking transactions or professional banking consultations via a remote video and audio connection. Video banking can be performed via purpose built banking transaction machines (similar to an Automated teller machine), or via a videoconference enabled bank branch.
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Bank Regulation
Bank regulations are a form of government regulation, which subject banks to certain requirements, restrictions and guidelines aiming to uphold the soundness and integrity of the financial system. The combination of the instability of banks as well as their important facilitating role in the economy led
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to banking being thoroughly regulated. The amount of capital a bank is required to hold is a function of the amount and quality of its assets.
Another reason banks are thoroughly regulated is that ultimately, no government can allow the banking system to fail. There is almost always a lender of last resort-in the event of a liquidity crisis, some element of government will step in to lend banks enough money to avoid bankruptcy. The Banking industry main obstacles to increasing profits are existing regulatory burdens, new government regulation, and increasing competition from non-traditional financial institutions.
Bank crisis
Banks are susceptible to many forms of risk which have triggered occasional systemic crises. These include liquidity risk (where many depositors may request withdrawals beyond available funds), credit
risk (the chance that those who owe money to the bank will not repay it), and interest rate risk (the
possibility that the bank will become unprofitable, if rising interest rates force it to pay relatively more on its deposits than it receives on its loan). Banking crises have developed many times throughout history, when one or more risks have materialized for a banking sector as a whole. Prominent examples include the bank run that occurred during the Great Depression, the U.S. Savings and Loan crisis in the 1980s and early 1990s, the Japanese banking crisis during the 1990s, and the subprime mortgage crisis in the 2000s.
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10. Premium Bank Limited 11. Pak Bank Limited 12. Lahore Commercial Bank Limited 13. Sarhad Bank Limited 14. Punjab Provincial Co-operative Bank Limited
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The Pakistan Banking Council prepared Banks amalgamation schemes in 1974 for amalgamation of Smaller Banks with the five bigger banks of Country. These five banks are as under: 1. National Bank of Pakistan 2. Habib Bank Limited 3. United Bank Limited 4. Muslim Commercial Bank Limited 5. Allied Bank Limited
So through the Nationalization of Bank Act 1974, the State Bank of Pakistan, all the commercial banks incorporated in Pakistan and carrying on Business in or outside the country were brought under the government ownership with effect from Jan 1, 1974. The ownership, control and management of all the Banks in Pakistan stood transferred to and vested in the Federal Government. The Finance Minister announced plans to start Islamic Banking System in Pakistan in the Budget speech on June 26, 1980, but it could not be possible till August 2003.
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Introduction of an Organization
National Bank of Pakistan is a government bank. Its principal activities are to provide commercial banking and related services in Pakistan and overseas. The Group handles treasury transactions for the Government of Pakistan as agent to the State Bank of Pakistan. It has its head office in Karachi. The Bank has 1254 domestic branches. In addition, NBP has 22 overseas branches and one representative office including the Export Processing Zone Branch. The Bank also provides services as trustee to National Investment Trust including safe custody of securities on behalf of NIT. National Bank of Pakistan maintains its position as Pakistan premium Bank determined to set high standards of Achievements. It is the major business partner of Government of Pakistan with special emphasis on fostering Pakistans economic growth through aggressive and balanced lending policies, technologically oriented products and services offered through its large network of branches locally, internationally and representative offices.
67.03
(Figures in Pakistan Rupees)
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Mr. Ghulam Farooq was Chairman Jute Board and Mr.Mumtaz Hassan was Chairman NBP.Until June, 1950, NBP remained exclusively in jute operations, there after other commodities were also taken up. After that Mr. Zahid Husain. Governor SBP assumed additional charge also as Chairman NBPs Board of Directors and Mr. M.A Mohair became its first M.D. In 1952 NBP replaced Imperial Bank of India. This arrangement was negotiated by Mr. Mumtaz Hassan as acting Governor of SBP. In 1962, when Mumtaz Hassan became the M.D (He had already served NBP for 10 years as its Chairman of Government Director), the number of Branches had increased from 6 to 239 and deposits from Rs. 50 million (5 Crore) to 1 billion and 60 million (106 crore), profit from 3 million (3 lac) to 21 million (2.1 crore) and the staff increased from 380 to 7091, as compared to 1949-50. In December 1966 its 600TH branch was opened raising the deposits to 2.31 bn. And staff to 14,963.Upto 1965, the shareholders had received 225% of their original investment. Now it has more than 21549 employees 1537 branches and Rs.208283 million deposits. The Bank has also played an important role in financing the country growing trade, which has expanded through the years as diversification took place. Today the Bank finances imports/exports business to the tune of Rs. 62.17 billion, where as in 1960, financing under this head was only Rs. 1.54 billion. The field is being de-layered to improve customer services and enable faster decision making. As a result of this de-layering zones have been eliminated and the numbers of regions have been increased. Organizational Hierarchy at the regional level has been restructured and operational and business activities have been completely separated. This separation will improve communication, decision making and promote teamwork.
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PHASES OF NBP
National Bank of Pakistan also has suffered from four different phases of banking in Pakistan like other banks.
Commercialization
National Bank of Pakistan was established in 1949 to promote jute and cotton production. At the time of independence we had no jute factory but in 1957 just within 10 years, Pakistan successfully established 6 jute factories through NBP assistance. Pakistan had just 16 cotton factories which increased within 10years up to 70. It was a big success of National Bank of Pakistan during commercialization era.
Nationalization
In the first phase of nationalization which remains from 1.1.1974 to 30.6.1974, The National Bank of Pakistan was merged with Bank of Behawalpur. This was done to give proper attention towards socioeconomic development & structural improvements.
ISLAMIZATION
National bank of Pakistan introduced three types of profit & loss accounts during this era. Zakat & Usher ordinance was introduced. Non interest bearing accounts were introduced.
Privatization
NBP suffered massive losses in past, particularly in 1996, posted USD 17.7 million in pre-tax profits in 2000 and doubled this figure in 2001
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Best Return on Capital for 2006 amongst all Banks in Asia Banker Magazine in July 2007 World's leading financial journal, Global Finance has named NBP as the Best Emerging Market Bank from Pakistan for the year 2006 . "Best Foreign Exchange Bank Pakistan award for the year 2006 by world's leading financial journal Global Finance . Due to consistent improvement in NBP's Core Profitability , Asset Quality and Economic Capitalization in recent years ,Moody's Investors Service upgraded the Financial Strength Rating (FSR) rom E+ to D-, in November 2005 . Best Foreign Exchange Bank Pakistan award for the year 2005 by world's leading financial journal Global Finance . Best Bank - Pakistan award for the year 2005 by world's leading financial journal Global Finance.
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The Asian Banker, a reputable financial journal, has published the report of its research project on the ranking of 300 of Asia 's Strongest Banks based on a 11-Dimensional Dynamic Scoring Criteria has adjudged National Bank of Pakistan as the Strongest Bank in Pakistan . On the basis of overall financial performance during 2004, NBP has been listed Amongst top 1000 banks in the world and Number 1 Bank in Pakistan by the prestigious Banker Magazine in its issue of July 2005 . The Banker Magazine in July 2005 recognized NBP as the 10th Best Bank in terms of Profit on Capital' in the world . Bank of the Year awarded for the year 2005 by the world renowned The Banker magazine owned by the Financial Times Group, London. On an all Pakistan basis National Bank of Pakistan was awarded the Kissan Times Award for the year 2005 by the Prime Minister , Mr. Shaukat Aziz, for its services in the Agriculture Sector .World's leading financial journal, Global Finance in an exclusive survey has named NBP as the Best Emerging Market Bank from Pakistan for the year 2005 . Bank of the Year award for the year 2004 by the world renowned The Banker magazine owned by the Financial Times Group , London . Euromoney Magazine, a leading and prestigious journal, published from London , UK , in its issue of March 2005 has published Moody's Investors Service rankings in which NBP is the only Pakistani bank which has been ranked among the Top 100 banks of Asia for it performance in the fiscal year 2003 WEBCOP-AASHA, an alliance against gender discrimination at workplace, presented a Recognition Award to National Bank of Pakistan on December 18, 2004 for having a Gender Sensitive Management . In May 2004, NBP's standalone long-term rating was upgraded by JCR-VIS Credit Rating Agency to AA (double A) from AA -( double A minus) with stable outlook, while standalone short-term
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rating was maintained at A-1+(A one plus). This is now the best rating for a local commercial bank in Pakistan . In its issue of March 2004, Global Finance has also declared NBP as The Best Foreign Exchange Bank in Pakistan . The Banker Magazine in July 2003 recognized NBP as the bank with the highest return on capital in Asia and No.8 in the world. World's leading financial journal, Global Finance after a worldwide survey declared NBP in its issue of May 2003 as one of the best banks in the emerging markets. Bank of the Year awarded for the year 2002 by the world renowned The Banker magazine owned by the Financial Times Group, London Bank of the Year awarded for the year 2001 by the world renowned The Banker magazine owned by the Financial Times Group, London
President's Awards
1) Mr. S. Ali Raza, Chairman & President, NBP was awarded The Asian Banker Leadership Achievement Award 2007 by Asian Banker ( an internationally reputed Financial Journal) in its issue of June 2007 2) Mr. S. Ali Raza Chairman & President, NBP, was conferred Sitara-i-Imtiaz by the President of Pakistan , General Pervaiz Musharraf on August 14, 2005 3) Business Week of The McGraw Hill Companies in its July 11,2005 edition has adjudged Mr. S. Ali Raza, Chairman President, NBP as one of the twenty five Leaders of Asia at the & Forefront of Change and has identified them as Stars of Asia including the President of Indonesia 4) Mr. S. Ali Raza's (Chairman & President, NBP) capabilities were also recognized by the Institute of Bankers in Pakistan when he was awarded a gold medal in 2003 .
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Vision
To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility.
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Mission
NBP will aspire to the values that make NBP truly the Nations 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
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CORE VALUES
Highest standards of Integrity Institutionalizing team work and performance culture Excellence in service Advancement of skills for tomorrows challenges Awareness of social and community responsibility Value creation for all stakeholders
GOALS
To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products
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Credit Rating
State Bank of Pakistan has been endeavouring to promote self-discipline in the financial markets of Pakistan through transparency and sufficient disclosure by the market participants. In order to maximize disclosure for the benefit of stakeholders and market participants, all banks were required to get themselves credit rated with effect from June 30, 2001.
NBPs key strength remains its extensive outreach in the domestic and international markets, as well as its broad based, cost effective deposit base. Further strength is also derived from deposits. With the lowest cost of funds in the market during 2008, NBPs net finance margins remained amongst the highest in the sector, and core earnings rose considerably. The rating committee has also favourably considered recent efforts made with the objective of improving internal controls and strengthening of the banks internal audit function.
MARKET RECOGNITION
In addition to the highest Credit Rating in the banking sector NBP is exultant to receive several awards from both local and foreign institutes of repute. NBP in year 2007 received the award for Best Return on Capital for 2006 amongst all banks in Asia by Bankers Magazine' in July 2007. Mr. Ali Raza, Chairman & President was awarded The Asian Banker Leadership Achievement Award 2007 by Asian Banker in 2007. The Asian Banker has adjudged NBP as the Strongest Bank in Pakistan .
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SWOT ANALYSIS
STRENGTHS
NATIONAL BANK THE NATIONS BANK:
NBP is government owned bank that is why Pakistani Nation has a trust on a bank that their deposits are secured. Due to this reason the deposits of the banks are increasing with the passage of time.
PROFITABILITY:
The pre-tax profits of NBP have gone up to Rs.6.05 Billion.
BROAD NETWORK:
The bank has another competency i.e. it has broad bases network of branches through out the country also more than one branch in high productive cities. The customers are provided services at their nearest possible place to confirm customer satisfied.
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PROFESSIONAL COMPETENCE:
The employees at NBP here have a good hold on their descriptions, as they are highly skilled Professionals with background in business administration, banking, economics etc. These professional competencies enable the employees to understand and perform the function and operation in better way. COMPREHENSIVE RANGE OF FINANCIAL PRODUTS: In order to facilitate the customers, NBP is offering comprehensive range of financial products which are as follows: Credit Cards Foreign exchange Bearer Certificates National Bank Daily accounts Travellers Cheques
ONLINE BANKING:
This is also strength of NBP that 130 branches are online. It helps the speedy services giving to the customers. There is also help in checking the balances and daily transactions just at one key press.
ATM FACILITY:
ATM facility is also provided by NBP for the customers.
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WEAKNESSES:
LACK OF MARKETING EFFORT:
The bank does not promote its corporate image, services etc on a competitive way. Hence lacks far behind in marketing effort. A need for aggressive marketing in the era marketing is now becoming a part of every organization. POOR WORKING CONDITIONS: Despite, cultural change program the working condition of the NBP is not up to standard.
RECRUITMENT POLICY:
In NBP, employees are recruited on the basis of favouritism or through other tools of corruption.
INCOMPETENT STAFF:
Due to wrong recruitment policy staff of NBP is not proficient in their work. IRREGULARITIES IN PROMOTIONS: In NBP there is no smooth and continuous promotion system. Unfair means are used in order to get the promotion especially the promotion of the managers.
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STAFF SHORTAGE:
There is also a weak point for NBP that staff is very short and more staff is required to meet the needs of the branch work.
STRONG UNION:
Union has strong impact on the performance of NBP, so the top management is unable to punish the violators.
ORGANIZATIONAL STRUCTURE:
In this organization the organizational structure is bureaucratic which a barrier in rapid and effective decision making.
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OPPORTUNITIES:
ELECTRONIC BANKING:
The world today has become a global village because of advancement in the technologies, especially in communication sector. More emphasis is now given to avail the modern technologies to better the performances. NBP can utilize the electronic banking opportunity to ensure online banking 24 hours a day. This would give a competitive edge over others.
ADVISORY SERVICES:
It can establish advisory services in order to facilitate the customers in investing in securities.
ISSUANCE OF BOND:
To enjoy large amount, NBP can introduce a comprehensive range of bonds.
FOREIGN BRANCHES:
NBP by establishing new branches in foreign countries can expand its business and can enjoy with profit.
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CONSUMER BANKING :
The basis need of the consumer such as housing, transportation and other durable goods are not adequately financed by banks. So by initiating these services, the bank can enjoy with more funds.
THREATS
EMERGENCE OF NEW COMPETITOR: The bank is facing threats with the emergence of new competitors especially in terms of foreign banks. These foreign banks are equipped with heavy financial power with excellent and innovative ways of promoting and performing their services. The bank has to take initiative in this regard or will find itself far back in competition.
INFLATION:
In our country, the rate of inflation is increasing along with unemployment. So due to increase in price of the products, the savings of the nation is decreasing with the passage of time. So it is threat for banking sector. In the future the deposits of the bank will decrease.
CUSTOMER COMPLAINTS:
There exists no regular and specific system of the removal of customer complaints. Now a day a need for total customer satisfaction is emerging and in their demanding consequences customers complaints are ignored.
computer of one branch suffers in problem, all systems and all computers of the branch must be turn off.
GOVERNMENT POLICY:
On NBP Govt. policies have strong impact. A slight change in Govt. policies may affect the performance of the bank. The bank has to work within the regulation frame work.
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MANAGEMENT STRUCTURE
Corporate Profile:
The complete profile of the people who serves as the think tank of National Bank of Pakistan is given in hierarchical order in the following lines.
Mr. Sikandar Hayat Jamali Mian Kausar Hameed Mr. Ibrar A.Mumtaz Mr. Tariq Kirmani Mr. Mohammad Ayub Khan Tarin Mrs. Haniya Shahid Naseem Mr. Ekhlaq Ahmed
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SENIOR MANAGEMENT
Qamar Hussain Chief Operating Officer , Credit Management Group
Imam Bakhsh Baloch SEVP & Group Chief, Audit & Inspection Group
Masood Karim Shaikh SEVP & Group Chief, Corporate & Investment Banking Group
Dr. Mirza Abrar Baig SEVP & Group Chief, Human Resources Management & Administration Group Nadeem A. Ilyas EVP & PSO to President , Group Chief (A), Compliance Group Amer Siddiqui SEVP & Group Chief, Commercial & Retail Banking Group Naeem Syed EVP, Divisional Head, Project Management Office
Shahid Anwar Khan SEVP & Group Chief, Overseas Banking Group
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Muhammad Nusrat Vohra SEVP & Group Chief, Treasury Management Group
Asif Hassan SEVP & Regional Chief Executive, Far East Region
Khawar Saeed SVP & Regional Chief Executive, Central Asian Republics Region
Zubair Ahmed EVP & Regional Chief Executive, Middle East, Africa & South Asia Region
Muhammad Hanif Khan SVP & Coordinator, Afghan Operations NBP'S INITIATIVE IN 2007
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AUDIT COMMITTEE
Azam Faruque Ibrar A.Mumtaz Mian Kausar Hameed
AUDITORS
Ford Rhodes Sidat Hyder & Co. Chartered Accountants M.Yousaf Adil Saleem & Co. Chartered Accountants
LEGAL ADVISORS
Mandviwala & Zafar Advocates & Legal Consultants
WEBSITE
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Board of Directors
Secretary BOD
Credit Committee
Operations Group
Finance Group
Audit & Inspection Group Special Assets & Remedial Management Group
HR Management Department
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ORGANIZATIONAL STRUCTURE
PRESIDENT
DIRECTORS/ SEVPS
PROVISIONAL CHIEFS/EVP
REGIONAL CHIEFS/EVP ZONAL CHIEFS/SVP VICE PRESIDENT ASSISTANT VICE PRESIDENT OFFICER GRADE I, II, III
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BANKING OPERATIONS
CREDITS
PENSION PAYMENT
GOVERNMENT COLLECTION
CLEARING
EOBI
Consumer Banking
GOVT.
Account opening
Cash Department
DISPATCH
B
Head Cashier
DEMAND FINANCE RUNNING FINANCE Utility Bills Govt. Tax Passport Fee Collection
Remittances
Customer Relationship
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MAJOR FUNCTIONS
Major functions performed by the executive committee are as follows; Analyzing the overall growth of bank. Defining the features of policy. Do the virtual testing. Remove the flaws. Implementation of the policy.
MANAGERIAL POLICIES
In NBP, the policies are of three types:
OPERATIONAL POLICIES
Operational and system division is responsible for the formation of the operational policies. Executive in charge of the system and the operation division is there to implement the operational policies. It is the duty of executive-in-charge to:
Monitor the overall operation of the bank Activities performed by operation department of different branches Analyzing the workflow of different departments such as remittance, current deposit department, and account department Rate of increase in deposits of different branches Specify the rules regarding the account maintenance
Executive in charge also designs the motivational policies for: Home Finance Business Finance Leasing
CREDIT POLICIES
Two division form credit policies: Credit Division Credit Monitoring Division
CREDIT DIVISION
Major purpose of credit division is to approve corporate loans, short and long term loans. Real earning for the bank comes from the credit division.
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Executive-in-charge of the credit division is responsible for making lending policies that are duly approved by the board of directors and followed by different branches. Credit division design the policies after taking into account the credit policies made by SBP. Credit department of all branches must follow all the instructions given by the Executive-in-charge of the credit division.
Development of the professional skills and knowledge of the employees is essential for the efficient functioning of the organization. At Bank appropriate design policies and practices have been instituted to achieve strategic objective. HR policies made by the Executive-in-charge of human resource division. These policies are as follows:
HR Development Type of Human Development Type of loans provided to staff member Setting the career path of the employees Staff training programs Promotion of the staff members according to the performance Policies about the staff bonuses and staff benefits schemes
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Employees.
to 16 Employees.
to 5 Employees.
Branch Manager will work as Compliance officer and Operation manager along with one cashier.
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DEPARTMENT/DESIGNATION
ASSISTANT VICE PRESIDENT(AVP)/
BRANCH MANAGER OG (I) / OPERATION
M ANAGER INCHARGE
CASH DEPARTMENT
CASH DEPARTMENT
OG (I)/PASSPORT FEE COLLECTION INCHARGE
MESSENGER
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JOB DESCRIPTION:
A Banker is responsible for establishing and maintaining positive customer relationships, planning and delivering effective sales strategies and monitoring the progress of new and existing financial products. Bankers may work as managers in high street branches providing operational support on a day-to-day basis, or in more specialized posts in corporate and commercial departments at area, regional or head offices. Banks operate in a fiercely competitive market place where change is common. Products and services offered have to develop to satisfy the expectations and demands of customers and working with staff and customers to achieve targets has become a very major part of the role.
BRANCH MANAGER:
Mian Saeed Mehmood is performing the duties of Branch Manager in New Garden Town Branch of National Bank. The Duties of Branch Manager includes: Marketing of Credit Advances & Recovering Loans and Mark-ups.
OPERATION MANAGER:
Mrs. Zahida Naseer is the operation manager and performing the following duties: All the circulars/office orders are followed up by operation Manager. Loan Sanction--- supervise the credit In-charge along with Branch Manager. Overall assigning of Branch employees duties on different departments is supervised by operation manager.
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Overall checking of bank books whether they are complete and accurate. Work as a compliance officer (To rectify flaws and Mistakes in different banking operations).
Receipt
Payment
Balancing the cash with Head Cashier on day end. Locking the Strong Room (Room that contain remaining cash balance at day end) Act as a Joint Signatory.
CREDIT INCHARGE:
Farhan Javaid is dealing with credit administration and serves as a purpose of incharge in Credit Department. His work activities include: Administration of Credits. Preparing Loan Proposals. Sanction the loans. Keep proper investigation of Securities from customers (i.e. mortgages, pledge, stock etc.) Preparing Loan Case. Recovering Principal amount of Loans (i.e. instalments, lump sum) Recovering Mark-up as bank income from customers periodically (i.e. half yearly, quarterly, annually) Preparing Branch Profit and Loss Statements. (i.e. monthly, half yearly, quarterly, annually)
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DEPOSIT OFFICER:
Mrs. Fariha Nosheen is a deposit officer in the branch and performing the following work activities: Accepting Account Holders Cheques and after verification of balance in account, customer signature from Specimen Signature Card, debit the Customers account in the system i.e. posting of cheque. All the receipts received by Branch Account Holders are also credited by the officer in their accounts. Also give details to customers about Balance Enquiry. Collection and transfer of Passport Fees. (Being the Hub Branch for collection of Passport Fee from nearest 7 to 8 branches and keeping it weekly nil by transferring the Govt. passport collection to Govt. offices along with Govt. Debit Scroll
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Receiving bill payment from customer and entering the particulars in CASH RECIEPT BOOK Collecting Govt. tax i.e. income tax, sales tax, property tax and keeping the record of TAX VOUCHER COPY.
Receiving Tax payment from customers and enters into CASH RECIEPT BOOK. On day end, totalling the govt. bills and Govt. tax collection and hand over the physical cash plus vouchers after proper balancing to Head Cashier for final cash balancing.
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Maintenance of Cheque Book records. Entering of newly printed cheque books with their particulars in Cheque Book Register. Taking signature of authorized Account Holder on relevant entry of Cheque book register at the time of issuance. Keeping all the cheque books under Lock and Key. Sending Letter of Thanks to newly account opening customers. After Letter of Thanks ACKNOWLEDGEMENT received from customers on verification of his Home Address only then Bank Officer can issue Cheque Book. Attach the Letter of Thank Acknowledgement part with Account Opening Form of those customers. Maintaining Locker Record. Act as a CLEAN CASH WRITER.
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Generate all the day books i.e. PLS, current, payment order etc. Generate General Ledger. Generate General Ledger Abstract.
MESSENGER:
Baber Jaswant acts as a messenger for the branch and performs; Immediate DAK on daily basis is to transfer from branch to branch. Regulating office orders/circulars from one branch to another.
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HUMAN RESOURCE
For NBP the dedicated, hardworking staff is one of the key strengths of the bank. NBP has been investing in developing this valuable resource through need based training and career growth development. Our HR objective is to become an employer of choice and to maintain complete industrial harmony within the institution.
Operation officers
NBP offers unlimited opportunities to its employees for continuous personal and professional growth:
1)
NBP has started an ambitious Change Management Program to further train its employees to meet the challenges of present day requirements.
2)
Training and development are the core issues of HR, which will ultimately improve our customer service and help us, attain the standard of a progressive bank.
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3)
Benefits:
Besides a competitive financial package, we offer excellent working conditions, job satisfaction, superior leadership, and a conducive environment for growth. The jobs at National Bank of Pakistan are open to all graduates applicants from a wide variety of degree subjects. However, for specialist roles numerate degree disciplines may be preferred. These include: Mathematics Finance Business Studies Economics Law Accounting
Apart from an excellent academic record, candidates will need to show evidence of the following: Team players with excellent interpersonal skills Knowledge and use of information technology Strong analytical and problem solving skills Excellent written and verbal communication skills in English
MTO Program:
Our new hiring of top class MBAs as Management Trainee Officers (MTOs) and search for talent within the bank has helped in preparing second and third tier leadership lines which will shape our succession planning process and at the same time will ensure that with the passage of time our employee refinement and skill enrichment program continues. NBP also have started new Employee Communication Program' and internal organizational magazine to improve the interaction of top and middle level management with the lower management. Female employees are being encouraged through female empowerment program under which they are given responsible and challenging assignments. Currently over 60 females are employed as branch manager all over country and some females hold senior management positions
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National Bank management trainee program is a dynamic path to launch fast track banking career. The program provides high quality training and development of the bank across Pakistan. Eligibility Criteria : MBA or Masters Degree with 3.0o/4.oo 0r 3.70/5.00 GPA or higher from an HEC recognized institution or a 4-year foreign/local Bachelors Degree, excellent communication skills and an age limit of 25 years.
TRAINING PROGRAMMES:
NBPs management believes in developing the potential of the banks employees to the fullest extent. Training & development Centre of the Bank are housed in state of the art facilities at Lahore, Karachi, and Islamabad. The centres are responsible for providing multi-level high quality training programmes to all staff members in the following areas: Customer service skills Consumer Banking Operations Credit Marketing & Credit proposals Administration/Documentation Marketing and selling skills Leadership and Management skills Personal effectiveness and skills
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It is obligatory for each staff member of the bank to attend at least two days of training in a calendar year in order to cope up with new methods and procedures. Whenever the Training Department is unable to provide focused training for certain group of staff, reputable external training providers are invited to fill the gap. Management trainees are able to progress rapidly to senior management positions, often via a fast track route where they can expect a managerial appointment at the end of the successful training. Some management trainees will choose to move to another NBPs branch where they may manage a particular business area, such as personal loans. Other may prefer corporate banking or a more specialized role, such as: Human resources Marketing Credit and Risk analysis Card services Operational management Investment analysis
CAREER LADDER
Career Advancement is usually linked to high levels of performance, especially by meeting sales/customer targets. It is also important to prove potential management ability by, for example, providing evidence of having efficiently executed responsibilities in specific areas of the bank. NBP is committed to the personal welfare and professional development of all its employees. The management realizes that proper career development is essential, not only for a more productive and satisfied workforce but also for a excellent corporate culture. Career planning is very important aspect for development of the employees. By career planning employees career goals are set and to achieve them. The bank feels the responsibility to develop the careers of their employees so that they would be able to get themselves high and high in corporate hierarchy. Then the principle aim of career development programs is to help employees, analyze their
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abilities and interests to better match personal needs for growth and development with the needs of the organization.
PERFORMANCE APPRAISAL
Performance appraisal is the process of reviewing the individual performance. First of all bank set some standards for different level of employees and direct to their employees to do work according to these standards and evaluation their performance.
TIME PERIOD:
In NBP performance appraisals are usually prepared after every six months, performances of every employee are to be reviewed and on the basis of these performances compensations and benefits are determined.
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MANAGEMENT STYLES
NATIONAL BANK OF PAKISTAN (NEW GARDEN TOWN BRANCH)
The management must adopt some administrative style to get all the activities done effectively and efficiently. Management has undergone many changes in the past years. Traditional management approaches have been questioned and re-evaluated as managers search out structural designs that best support and facilitate employees doing the organization work: ones that can achieve efficiency but also have the flexibility that is necessary for success in todays dynamic environment. Various management styles can be employed dependent on the culture of the business, the nature of the task, the nature of the workforce and the personality and the skills of the leader. As far as the management styles at National Bank of Pakistan, New Garden Town Branch, are concerned, the management styles have a very effective blend. Mr. Habibullah Sheikh, in charge of hall and deposits believes in the delegating powers to personnel who do not hesitate in discussing with him the difficulties faced by them. In the presence of low job, satisfaction among the employees of this department the friendly behaviour of Mr. Shabar has a positive influence on their job performance. The environment in Cash Department is very pleasant. Mr. Farhan Javaid, in charge of Credit Administration, has participative style of administration. He appreciates the suggestions and views of the credit officers but keeps the final decision with himself. He gives the employees a confidence in their abilities. All the members in Credit Department work as a team. The efficiency of his team is good. In charge of Credit Marketing, Mr. Mian Saeed Mahmood (AVP) is a very strict person. He keeps a thorough check on every activity of this Department. Infact all the members in his department are hard working add dedicated. All of them feel their responsibilities. His style is requirement of his duty as there is a huge responsibility on his shoulders. Even in the presence of an authoritative in charge, the morale of the unit is very high. Mr. Muhammad Zubair, in charge Account Opening, is a very competent person. He has the art of managing the workforce in a very effective manner. He knows how to keep employees motivated and committed to their tasks. He has a very professional style of working, and handling toughest situations.
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MARKETING
SEGMENTATION:
The purpose for segmenting a market is to allow your marketing/sales program to focus on the subset of prospects that are most likely to purchase you are offering. If done properly this will help to ensure the highest return for your marketing/sales expenditures. Depending on whether you are selling your offering to individual consumers or a business, there are definite differences in what you will consider when defining market segments. There are different ways of segmenting the market. NBP has adopted the way of Multiple Segmentation. A segment is s distinguishable component of the bank that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.
BUSINESS SEGMENTS
Corporate Banking:
Corporate banking includes services provided in connection with mergers, acquisitions, underwriting, privatization, securitization, and research, debts (government, high yield), equity, syndication, IPO and secondary private placement. The Corporate Banking Group of NBP achieved excellent results in 2007 with a number of landmark transactions in cement, energy, communication and fertilizer sectors. In addition to the funded income, our corporate and investment banking has substantially increased its fee base income this year by being the lead advisor in a number of transactions in the corporate world of Pakistan.
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The challenges to corporate business in year 2007 were manifold including reduction in Private Credit Investment as a result of slowing down of economy as well as rising interest rates. The increasing pressure on the textile industry reduced the lending to this sector. In addition the bank's corporate loans yields also faced pressure as substitute form of funding sources are available in the market in form of Islamic financing, mutual funds, issuance of debt instruments like TFCs and Bonds and the capital markets. Despite these threats and challenges at NBP, our corporate team not only increased the volume as well as the yield of the loans they also maintained a strong franchise with the leading Pakistani corporate so as to ensure that NBP not only maintains its market share but is in a position to meet any challenges in future. NBP during the year also participated in a number of TFC issues and mutual funds subscriptions thereby increasing the overall yield on investment portfolio. NBP has the largest equity portfolio in the banking sector primarily due to 27% holding in NIT units, the largest mutual fund in Pakistan. During the year the bank redeemed 10% of its NIT holding covered under LoC, which resulted in capital gain of Rs.1.8 billion.
Retail Banking:
It includes retail lending and deposits, banking services, private lending and deposits, banking services, merchant/commercial/corporate cards and private labels and retail. NBP Karobar under the President's ROZGAR Scheme recorded excellent growth after its full launch in April 2007. This is a unique product launched to tap into the un-banked and actually the so far un-bankable poor people of Pakistan targeted towards the unemployed youths aged between 18 to 45 years. This product not only serves the bank's commercial strategy but is also an effort towards poverty alleviation in the country. It is a unique Public Private Partnership with GOP paying 50% of the mark-up (the rest is paid by the customers), as well as providing free life and disability insurance to the NBP Karobar customers and sharing the losses with the bank. Housing is every citizen's birth right. It is a known fact that the Mortgage Business drives approximately 100 different sectors and thus is one of the driving forces in boosting the economy of a country. In line with this, NBP's Mortgage Financing Product, under the brand of NBP Saibaan, has been fully launched throughout Pakistan in 2007, catering to both the urban and rural
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areas of the country. In 2007, NBP Saibaan has been the market leader in housing finance as the overall disbursements were at an average of approximately Rs. 350 million each month, which is by far ahead of the competition. As on December 31st 2007 the total NBP Saibaan portfolio stands at Rs. 9.35 billion. Thus NBP Saibaan has become the leader amongst the top five Banks of Pakistan in Mortgages. Pakistan has a massive backlog of over 6 million housing units, where in the country needs about 0.6 million additional units every year. The flagship NBP Advance Salary product continued to grow in 2007 and maintained its position as the single largest product in the country with its accumulated disbursement crossing Rs.115 billion. The number of organizations whose employees are entitled to avail this scheme is gradually being increased ensuring continued growth. The latest addition is the Pakistan Army and the target is almost half a million new customers in the next three years in addition to the existing base of one million satisfied customers approximately. Our retail banking is expanding its reach to its diversified customer base by offering new services and products through new delivery channels so as to minimize counter traffic, increase product offering and reduce administrative costs. The development of alternate delivery channels, use of I.T. and leveraging large customer base for cross selling potential are the key strategies of NBP for increasing its retail business. NBP holds 16% market share in the consumer loan business and we aim to increase it gradually without compromising on the quality of portfolio. Our call center is a value addition in customer services and provides overall support to our retail products. It is a unique technology as it is not service provider specific and free calls can be made to the NBP Help Line on 0800 800 80 from any land or cell phone in the country.
Commercial Banking:
Commercial Banking includes project finance, export finance, trade finance, leasing, lending, gurantees, bills of exchange and deposits. NBP plans to establish commercial centers across the country looking at the business potential in the area, size of the branch and its capabilities to deliver the desired service in order to attract quality customers. The objective is to target the untapped sectors and provide them professional quality service, through one window operations and Relationship Managers stationed at those centers. We expect and hope to reduce the turn around time and become more competitive and market oriented.
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Further this customer friendly and dedicated set up at convenient locations would help in improving the image of the Bank as well. These Centers would work in conjunction with the existing setup of Commercial Lending done throughout the NBP branch network. The main purpose of these centers is to generate ancillary business in addition to funded and non-funded facilities, with quick turn around time in decisions for customer satisfaction.
credit Rating System to ensure a very objective and timely assessment of each proposal. We have our internal filtration systems and approval hierarchy to ensure that proper authority and responsibility is established and at the same time to reduce the lead processing time of the credit application. We have proper monitoring system and have also setup a separate Credit Administration Department (CAD) to further improve our credit monitoring function.
Operations
NBP is committed and focused towards good quality customer service and in 2007 with the motto of Putting a smile on our Customer's face. The bank made concerted efforts and took a number of initiatives. Workshops and seminars were conducted to disseminate the very important message of Excellent Customer Service. It is transforming their branches to give a modern look and convenience. A number of branches have been shifted to prominent and spacious locations. The bank also has established specialized customer facilitation centers to exclusively cater to pension payments, utility and government collections. These are expected to reduce counter traffic at its branches and will increase its distribution channels for better and convenient services. Business hours have been extended with establishment of customer facilitation offices at the regional levels to help on the spot resolution of customer complaints.
Information Technology
Today banking is becoming more and more mechanized and it is the I.T. support that can improve the customer services and reduce cost at the same time. At NBP it has elaborated plans for transformation of the entire I.T. architecture of the bank by implementing core banking solutions. The said technology will not only increase its distribution capabilities by many folds but will also simplify its
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internal procedures thereby reducing the transactional cost and lead time for service. NBP has started a number of projects in relation to I.T. structure up-gradation. The bank is expanding its ATM network and connectivity to further expand its reach to the customers. This year it has completed its automation of the government's tax collection services thereby opening new opportunities for such services on behalf of other organizations. NBP is also looking into other I.T. products for salary and pension disbursement and E-banking for better services.
Agriculture
NBP remains the largest agriculture lender in the banking sector in Agriculture with approximately 300,000 borrowers and gross disbursement of Rs. 32 billion during the Financial Year 2006-2007. Our vast domestic branch network having 45% branches in rural areas and unique product offering under the banner of Kisan Dost provides us competitive edge over our peer banks. Our specialized Agriculture, Field Officers, being Agriculture graduates are trained to understand the needs and limitations of our borrowing farmers as well as versed with the latest trends in Agriculture production technology providing technical guidance and specialized services to our customers.
Deposits
NBP is the largest bank in terms of deposit. NBP large clientele and confidence of our depositors belonging to all walks of life is a major strength. We have shown appreciable growth of 18% in deposits on YoY basis, which is significant from the view point that with the consolidation in the banking sector competition for deposits is ever increasing. The bank is branding our liability products and will continue to develop new liability side products for continuing its leadership position in this business. This year the bank introduced three new liability products; NBP Premium Saver account, NBP Premium Amdani account and NBP Enhanced Saver account. These schemes have received excellent response from the customers and it expects healthy growth in future under these and new products that the bank is going to launch on the liability side. Given the large base and competition in the banking sector, the bank's performance is commendable in increasing its deposits by Rs. 90 billion especially low cost deposits.
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International Operations
NBP has the largest international franchise in terms of Assets. We are present in four continents and have branches in all the countries that are major trading partners of Pakistan. Our unique coverage of Central Asia, Far East and South Asia is incomparable and we will be the major benefactor once the trade business from the Energy rich Central Asian Republics picks up. The bank is planning to start its operations in Saudi Arabia (mid 2008) and further expand its branches in Afghanistan and Bangladesh . The bank's international operations strategy is focused towards increasing trade business and expands where the bank has competitive advantage.
Islamic Banking
The year 2007 marked the first year of Islamic Banking operations. During the year under review, in addition to active participation in various Sukuk transactions, two more Islamic Banking branches at Lahore and Peshawar started operations. NBP's plans for the year 2008 include opening of Faisalabad and Rawalpindi branches with the focus on growing organically by opening more standalone Islamic Banking branches, utilizing NBP's existing branch network of 1,200 plus conventional branches and looking into strategic acquisitions for expansion in this field.
GEOGRAPHICAL SEGMENTS
The bank operates in these geographical regions being: Pakistan Central Asia Far East and South Asia Middle East
Target Market:
After the process of segmentation, NBP evaluated and selected its target segments.
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Market Segments:
For evaluating the segments, they looked at the following three factors: Segment size and growth Segment structural Attractiveness Company objectives and resources
Size of the segment (number of customers and/on number of units) taking into consideration the size of the segment selected as target market by NBP is reasonably large enough. Growth rate of the Segment: There has been very rapid growth in the segments. This argument is well supported by the fact that the sales of the NBP has turned up to more than twice as it was ten years back today. Competition in the Segment: NBP faces a high competition in the segment due to establishment of many private banks but it has many differential advantages over its competitors.
DIFFERENTIATED MARKETS:
To a large extent NBP is following the differentiated marketing in which it decided to target several market segments like elite class, upper class, middle class and all types banking of services for them.
What are your strengths? Your distinctive competencies? What about your offerings provide value to your customers? Who is your target customer? What about them makes them an ideal fit for the value you offer? How are you different from your competitors in ways that your customers and potential customers will value? In other words, what is your unique selling proposition? Your competitive advantage?
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When all three are put together, you have a positioning statement. Positioning statements are the basis for all marketing messaging, sales scripts, and at a corporate level: branding. It is important to understand your product from the customers point of view relative to the competition.
POSITIONING STARTEGIES:
Five positioning strategies can de pursued:
Product Classes: Compared to different classes of product. Product Attributes: What are the specific products attributes? Benefits: What are the benefits to the customers? Users: Identify a class of users? Usage Occasions: When/how can the product be used?
NBP uses almost all of the strategies for positioning their products. Thats why they have succeeded in creating a good image in their customers mind relative to their competitors.
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MARKETING MIX:
Now, we discuss the marketing mix of National Bank of Pakistan: Marketing mix is the set of controllable, tactical marketing tools ___ product, price, place and promotions__that work together to achieve company's objectives.
PRODUCT:
Product is one of the important P of the marketing mix. It is defined as: Anything that can be offered to a market for attention acquisition, use or consumption that might satisfy a want or need. OR A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are often service based.
Due to trend setting, NBP presents a range of quality products with revolutionary perks and convenience. NBP provides a wide range of quality products/services to its customers, which can be compared with any foreign bank in terms of quality and reliability. Here is an overview of products and services offered by NBP:
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Monthly Income Scheme Earn up to 11% p.a. + Minimum deposit of Rs. 20,000/- and a maximum deposit of Rs. 5,000,000/- for 5 years Free Demand Draft, Pay Order and Cheque Book* Convenience of NBP online Aasan Banking (for online banking customers) Free NBP Cash Card (ATM+Debit) Running finance facility up to 90%
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PLS Saving Account Earn up to 7.25% p.a. + Minimum saving balance of Rs. 20,001/- & a maximum balance of Rs. 300,000/-* Free NBP Cash Card (ATM + Debit) Convenience of NBP Online Aasan Banking (for online banking customers) Two debit withdrawals allowed in a month & no limit on number of deposit transactions Profit calculated on monthly and paid on half yearly basis
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Mera Apna Karobar Minimum down payment, 10% of asset price (5% for PCO & Telecaster) Tenure 1 to 5 years (for PCO 2 years) Grace period 3 months Maximum loan amount Rs. 200,000/ Age 18-45 years Mark-up (variable) 1 year KIBOR + 2.00% p.a. The customer will pay markup @ 6% p.a., rest will be borne by GOP* (Life & disability insurance paid by GOP)
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Home Financing Home Purchase Home Construction Home Renovation Purchase of Land + Construction Balance Transfer Facility (BTF) NBP Saibaan NBP Saibaan (Open the Door to Your Dream Home) Home Financing
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Personal Loan Easy installments of 1 to 60 months at your choice No minimum income collateral & insurance charges required Quick processing and fastest disbursement The product is for permanent employees of Government, Semi Government and Autonomous bodies receiving salaries through NBP accounts
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ATM + Debit Card Use it as an ATM in any of the ATMs in Pakistan Use it as Debit Card in any of the outlets with ORIX POS machine Cash withdrawal up to Rs. 20,000/- per day Account Balance Enquiry Mini Statement (Only at NBP ATM) PIN Change facility (Only at NBP ATM)
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Financing Facility for Stock Investors Comfortable environment for trading No security requirement, except for the customers equity Customers equity freely available for investment Equity acceptable in cash or approved shares
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Facility of Rs. 10, 000/-against each 10 gms of net weight of Gold Ornaments No maximum limit of cash Repayment after one year Roll over facility No penalty for each repayment
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Product Information:
Pakremit is an internet based Home Remittance Service. This service is available to U.S. residents for sending money to their family and friends in Pakistan. One must have a valid US Dollar account with a U.S. bank or a US Dollar credit or debit card in order to remit funds through this channel. Remitters in USA can log on to our user friendly website, www.pakremit.com and easily remit funds to Pakistan from the comfort of their homes, in a matter of minutes. The service is fully secure with advance encryption application and is available for use 24 hours a day, 7 days a week. Fees and exchange rate have been set at competitive levels and the remitters have the ability to track delivery of funds as well.
Process:
Remitters log on to www.pakremit.com and after completing the registration process, are able to remit funds. The whole process takes a few minutes. Funds in Pak Rupees can be sent to beneficiaries, having an account with any bank in Pakistan, including NBP. While funds are credited directly to beneficiaries maintaining accounts with NBP, a pay order or demand draft is couriered to other banks for their customers. Pay order or demand draft can also be couriered directly to the beneficiarys office or home, if requested by the remitter. Funds in US Dollars can be sent only to a Beneficiary maintaining a US Dollar account with one of NBPs Foreign Exchange Branches. Click here for details of NBP Foreign Exchange Branches
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Accepting Deposits:
This function is important because banks largely depend on the funds deposited with them by its customers. Deposits are of many types:
CURRENT DEPOSITS:
Current deposits are also called Demand Liability on current deposits.NBP pays practically no interest on current deposits. Businessmen usually open current accounts. In NBP current account can be opened with a minimum amount of Rs. 500/-.
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Agency Services
NBP also provides best and unique service to its valued customers. NBP provides the following agency services to the customers:
COLLECTION OF DIVIDENDS
As NBP deals with the purchase and sale of various types of securities, therefore NBP also provides dividend or interest earned on share or bonds or invested money.
COLLECTION OF CHEQUES
In the collection and payment of Cheques, bills and promissory notes etc. National Bank of Pakistan acts as an agent for its customers.
ACTING AS AN AGENT
NBP also acts as an agent correspondent or representative for its customer at home or abroad.
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LOCKERS FACILITY
National Bank of Pakistan also provides lockers facilities to its customers to keep their valuable assets in it. The charges of different size of lockers are different.
ACT AS A REFEREE
NBP provides full useful services to its customers by acting as a referee to their credit worthiness.
SUPPLY OF INFORMATION
NBP provides operational and advisory service for Foreign exchange accounts/activities. The prestigious periodical The Banker UK recognized NBP as the best bank in year 2001-2002.And NBP is the bank of the year for 2003-2004.
SERVICES OF NBP
INTERNATIONAL BANKING:
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. Additionally, we have recently set up the Financial Institution Wing, which is placed under the Risk Management Group. The role of the Financial Institution Wing is :
To effectively manage NBP's exposure to foreign and domestic correspondence Manage the monetary aspect of NBP's relationship with the correspondents to support trade, treasury and other key business areas, thereby contributing to the bank's profitability Generation of incremental trade-finance business and revenues
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NBP offers: The lowest rates on exports and other international banking products Access to different local commercial banks in international banking
DEMAND DRAFT:
If you are looking for a safe, speedy and reliable way to transfer money, you can now purchase NBP's Demand Drafts at very reasonable rates. Any person whether an account holder of the bank or not, can purchase a Demand Draft from a bank branch.
TYPES OF DEMEND DRAFT ISSUED: JUNIOR DEMAND DRAFT: From Rs. 1--------- Rs. 1000 SENIOR DEMAND DRAFT: From Rs. 1001---------- Rs. 10,000 DEMAND DRAFT: From Rs. 10,001---------and above
ISSUANCE OF DEMAND DRAFT CHARGES: (Exchange) Upto Rs. 100,000/Upto Rs. 1000,000/Over Rs. 1000, 000/0.10% or minimum Rs.50 0.05% or minimum Rs.100 0.04% or minimum Rs.400
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DEMAND DRAFT National Bank of Pakistan Town Branch Not over Rs. On Demand Pay To Rupees To National Bank of Pakistan Code No: Officer Value Received For National Bank of Pakistan Manager Dated: Garden
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SWIFT SYSTEM
The SWIFT system (Society for Worldwide Interbank Financial Telecommunication) has been introduced for speedy services in the area of Home Remittances. The system has built in features of computerized test keys, which eliminates the manual application of tests that often cause delay in the payment of Home Remittances. The SWIFT Center is operational at National Bank of Pakistan with a universal access number NBP-APKKA. All NBP overseas branches and overseas correspondents (over 450) are drawing remittances through SWIFT. Using the NBP network of Branches, you can safely and speedily transfer money for your business and personal need.
PAY ORDERS
NBP provides another reason to transfer your money using our facilities. The pay orders are a secure and easy way to move your money from one place to another. And, as usual, our charges for this service are extremely competitive. Pay Orders must be paid and issued by the same branch of the bank.
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MAIL TRANSFER
Mail Transfer is used for all mail remittances intended for credit of constituents accounts receiving office, for payment to parties resident in the areas under their jurisdiction and also whenever an account (whether current or savings) is transferred from one office to another. Move the money safely and quickly using NBP Mail Transfer service. And NBP also offer the most competitive rates in the market. In case of Account Holder, only his signature and account number is required whereas in case of Non Account Holder his copy of CNIC along with full name, address, telephone number and signature are required.
NO; MT A-11020
MAIL TRANSFER ADVICE National Bank OF Pakistan Please debit NBP General Account with the sum of Rs. make the following payment . SR.NO Name of Payee On account of Amount and
TRAVELLERS CHEQUES
Pak Rupees Travellers Cheques are a
Negotiability:
country At all 400 branches of NBP No limit on purchase NBP Travellers Cheques are the safest way to carry our money There is no restriction on the period of
Validity:
Negotiability:
negotiable instrument
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LETTER OF CREDIT:
NBP is committed to offering its business customers the widest range of options in the area of money transfer. If you are a commercial enterprise then our Letter of Credit service is just what you are looking for. With competitive rates, security, and ease of transaction, NBP Letters of Credit are the best way to do your business transactions.
COMMERCIAL FINANCE:
Our dedicated team of professionals truly understands the needs of professionals, agriculturists, large and small business and other segments of the economy. They are the customer's best resource in making NBP's products and services work for them.
FOREIGN REMITTANCES:
To facilitate its customers in the area of Home Remittances, National Bank of Pakistan has taken a number of measures to:
Increase home remittances through the banking system Meet the SBP directives/instructions for timely and prompt delivery of remittances to the beneficiaries
New Features:
The existing system of home remittances has been revised/significantly improved and well-trained field functionaries are posted to provide efficient and reliable home remittance services to nonresident Pakistanis at 15 overseas branches of the Bank besides United National Bank (the joint venture between NBP and UBL in UK)., and Bank Al-Jazira, Saudi Arabia.
Zero Tariff: NBP is providing home remittance services without any charges. Strict monitoring of the system is done to ensure the highest possible security.
Special courier services are hired for expeditious delivery of home remittances to the beneficiaries.
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EQUITY INVESTMENT:
NBP has accelerated its activities in the stock market to improve its economic base and restore investor confidence. The bank is now regarded as the most active and dominant player in the development of the stock market. NBP is involved in the following: Investment into the capital market Introduction of capital market accounts (under process) NBP's involvement in capital markets is expected to increase its earnings, which would result in better returns offered to account holders.
N.I.D.A:
National Income Daily Account The scheme was launched in December 1995 to attract corporate customers. It is a current account scheme and is part of the profit and loss system of accounts in operation throughout the country.
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Agricultural Finance Services: I Feed the World program, a new product, is introduced by NBP with the aim to help farmers
maximize the per acre production with minimum of required input. Select farms will be made role models for other farms and farmers to follow, thus helping farmers across Pakistan to increase production.
Agricultural Credit:
The agricultural financing strategy of NBP is aimed at three main objectives:
Providing reliable infrastructure for agricultural customers Help farmers utilize funds efficiently to further develop and achieve better production Provide farmers an integrated package of credit with supplies of essential inputs, technical knowledge, and supervision of farming.
Production and development Watercourse improvement Wells Farm power Development loans for tea plantation Fencing Solar energy Equipment for sprinklers
Farm Credit:
NBP also provides the following subsidized with ranges of 3 months to 1 year on a renewal basis.
Operating loans Land improvement loans Equipment loans for purchase of tractors, farm implements or any other equipment
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Production Loans:
Production loans are meant for basic inputs of the farm and are short term in nature. Seeds, fertilizers, sprayers, etc are all covered under this scheme.
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PRICE
The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service Price is what is charged for something
WHAT IS PRICING?
The second major and important marketing mix tool is PRICE. Prices are the easiest marketing mix element to adjust; product features, channels and even promotion take More time, price also communicates to meet the companys intended value positioning at its product or brand. Although non-price factors have become more important in recent decades. Price still remains one of the most important elements in delivery marketing share and profitability.
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LETTER OF CREDIT.
a.Upto Rs.20 (M) b. Upto Rs.50 (M) c. Upto Rs.100 (M) d. Upto Rs.250 (M) e. Upto Rs.500 (M) f. Upto Rs.1,000 (M) g. Above Rs.1,000 (M)
RS.1000
On expiry of L/C when the same is revalidated, revalidation commission should be recovered as is applicable for opening of Fresh Letter of Credit. L/C commission will be calculated on the amount of liability as per exchange rate prevailing on the date of revalidation When a Letter of Credit is transferred to a new
Revalidation Commission
Transfer Commission
beneficiary, transfer commission should be charged as applicable in case of Fresh Letter of Credit.
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Approval from SBP from re-import of consignment back to Pakistan L/C Cancellation Charges
1% on 1st quarter and 0.30% for each Subsequent quarter or part thereof Minimum of Rs.2000/-
L/C under Suppliers/Buyers Credit, Pay as you Earn Scheme and Deferred payment L/Cs for period one year
Commission @ at the time of opening of LC at the rate upto 0.40% or part thereof till the final payment.
Amendments Issuance of Standby Letters of Credit (i.e) beneficiaries in foreign countries) directly or through correspondent bank/banks foreign branches/offices.
Rs.750/- per transaction (Flat) 0.40% per quarter or part thereof Rs.1000/- plus correspondent bank charges if any. Swift/Telex US$ 20/- per telex / swift message
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i) 40 Paisas per Rs.1000/-(or as Advice) on daily per Sanction reimbursement till the date of retirement (i.e. 14.60% p.a.) Mark-up in case of Import Bill under Import Letter of Credit or ii) Mark-up rate arrived at based on 1 month KIBOR (ask rate) +4.00% p.a. whichever is higher.
a. Handling of discrepant Import Documents., US$ 50(flat) to be recovered from the proceeds remitted.
b. Handling
Collection
Rs.750/- (Flat) per collection provided no charges are realized from the correspondent.
Consignments 0.20% (Flat) handling charges at the time of registration of contract/ purchase order/ invoice Minimum Rs.500/-
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EXPORTS
Processing Charges for Export Registration Rs. 200/-(Flat)
Rs. 200/-(Flat)
Letter of Credit
Advising Rs.400/-(Flat)
Amendment Advising
Rs.300/-(Flat)
Negotiation of Bills against Letters of Credit issued under Barter/Remittance from SBP Confirmation
Transfer of Export L/Cs. Reimbursement payment to other local Bank from Non-Resident Rupee Account
Rs. 450/-(Flat)
Rs. 400/-(Flat)
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EXPORT BILLS
Documents are sent to other banks for negotiation under restricted Letter of Credit.
CHARGES
Rs.350/-( Flat)
CHARGES
0.25% of the amount of claim Minimum Rs.250/- per claim.
Rs.200/- (Flat) plus postal charges. 0.20% Minimum Rs.200/- Max. Rs.500/-
COLLECTIONS
Clean Cheques/Drafts/FTCs
CHARGES
Rs.100/- per Collection (Flat)
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REMITTANCES
OUTWARD
Foreign Traveller Cheques Remittance abroad through Foreign Currency Account
CHARGES
1% of the amount of Traveller Cheques sold Min. Rs.200/Commission @ US$ 1.00 per US$ 1,000/- or part thereof Min. US$ 5.00 Maximum US$ 25.00 plus Telex / SWIFT charges: Rs.250/- per Telex /SWIFT in case of telegraphic transfer.
Remittance against surrender of F.C Notes or cash deposited in F.C Account within 10 days from the date of such deposits
In addition to charges mentioned under 3.1.2. service charges @ 1.0% to be recovered in case the remittance amount exceeds US$ 5,000/- or its equivalent in other foreign currencies.
Inward Collection received (relating to F.C Account) from US$ 3.00 per US$ 1,000/- or part thereof abroad or local Minimum banks/branches and where the US$ 3.00 Maximum US$ 6.00 payment is demanded in Foreign Currency Inward cheques expressed in foreign Currency drawn on foreign currency A/cs received from local/upcountry banks branches for payment in Pak Rupees after conversion at authorized dealers buying T.T clean rates
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Charges
Rs.50/- plus telex charges Rs.200/- per telex (if telex required) or usual postal charges Rs.50/- per US$ 1,000/- Min. Rs.200/- and Max. Rs.500/- plus telex charges Rs.300/- per telex for telegraphic transfer or usual postal charges.
Service Charges against issuance of Foreign Mail Transfers (FMTs) Foreign Demand Drafts (FDDs)Foreign Telegraphic Transfer (FTT)& Travellers Cheques (TCs) against Pak Rupee.
FDD/FTT/FMT Cancellation Charges for foreign currency account Issuance of Duplicate FDD Foreign Bills sent for collections returned unpaid Standing Instruction Charges in Foreign Currency Accounts Charges for Cheques returned unpaid (when fault lies with the customer) to be recovered from the client on whose behalf the instrument is being collected and collecting bank will apply these charges.
Rs.300/- plus usual telex/postage charges Rs.350/- (Flat) plus telegram charges if any US$ 5.00 per instruction Rupee Account 200/- per cheque F.C. Account US$ 5/-per cheque
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REMITTANCES
INWARD
Home Remittance
CHARGES
No Charges (Zero Tariff)
Others
Nil, if proceeds are credited to an account with the drawee bank. In other case a flat charges of Rs.10/-
Rs.100/-(Flat)
Service Charges on payment of Inward Foreign Drafts/Foreign Mail Transfers where payment is made to beneficiaries after @ Paisas 15 per Rs.100 /-Minimum Rs.200/payment cover is received to our Foreign Currency Account. These charges are to be recovered only when T.T buying rate is applied.
Commission/Handling Charges Nil, if no remittance effected within 10 days of the date on Deposits of Currency notes for of deposit, otherwise remittance charges the credit of Foreign Currency Accounts.
US$ 5.00 for collection upto US$ 1,000/-, US$ 15.00 for collection above US$ 1,000/-.
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MISCELLANEOUS
Postage/Cable/Fax/Courier
At actual subject to Minimum, as under :-
Postage (Ordinary)
Postage (Registered)
Telegram
Telex /Fax/Telephone/Swift
Inland Rs.25/- per minute Min. Rs.50/ Foreign: Full Telex / SWIFT L/C/Guarantee and long Message Rs.1,200/- for full message for short message Rs.400/L/C/Guarantee amendment, Telegraphic Transfer and Miscellaneous messages Rs.1,200/- for full message. Rs.400/- for short message o Local Rs.50/o Inland Rs.70/o Foreign Rs.1,100/Rs.500/- (Flat) per certificate. Rs.500/- (Flat) per certificate.
Courier
Issuance of proceeds certificate beyond one year Issuance of Business Performance certificate at customers request
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Issuance of Duplicate Draft For account holders For non account holders Telegram Charges on TTs (whether through Telex/ SWIFT /Fax) Rs.200/Rs.250/Actual, Minimum Rs.75/-
Rs.100/- (Flat)
Postage on MTs
* Actual Minimum Rs.30/- if sent by Registered post locally, * Rs.50/- if sent by Registered post Inland on partys request.
Courier Charges
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PAY ORDER
Issuance of pay order:1. For account holder 2. For non-account holder 3. For Students Rs.50/- (Flat) Rs.100/-(Flat) Rs.25/- (Flat ) from student for payment of fee favouring educational institution
Issuance of duplicate Pay order:1. For account holder 2. For non-account holder
Issuance of call deposit receipt:1. For account holder 2. For non-account holder Rs.50/Rs.100/-
(Opening commission) Annual Business Upto Rs.50 (M) 0.40% per quarter or Upto Rs.75(M) 0.35% part thereof Upto Rs.100(M) 0.25% Above 100 (M) Negotiable Minimum Rs.1,000/= Without increase in amount or extension in period of shipment Rs.500/- (Flat) Involving increase in amount and/or extension in period of shipment Rs.500/- per transaction/commission as per item as above.
Amendment Charges
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BILLS
COLLECTION:-
Documentary Bills
Purchase of bills, cheques etc. Documentary Bills other than those drawn against Letters of Credit
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SIGHT BILLS
Negotiating end
Rs.500/- (Flat)
Collection Charges for restricted L/C (where Negotiation is restricted to some other Banks and presented to us for forwarding).
Rs.500/- (Flat)
At opening end (at the time of retirement) rate of Mark-up. Mark-up @ 45 Paisas per Rs.1,000/- on daily product If retired within 3 days from plus Banks Commission @ 0.25% the date of lodgment If retired after 3 days of lodgement
If negotiation is restricted to some Forwarding Bank/Branch would charge handling other bank. charges of Rs.200/- (Flat) per bill (commission will
not be applicable).
Rs.500/- (Flat)
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USANCE BILLS
At opening end a. Handling Charges.
Rs.0.40% per bill Minimum Rs.500/- at the time of retirement of bill. Usual Charges as in (a) above plus delivery of documents against acceptance commission @ 0.10% per month on bill amount on realisation from the date of expiry of L/C but Minimum Rs.500/-.
Commission @ 0.30% Minimum Rs.200/Usual Commission as in (a) above and keep mark down @ 0.75% for every 15 days from the date of purchase till the date of maturity.
Mark-up @ 25 paisa per Rs.1000/- on daily product (or per Sanction Advice) plus flat Commission @0.1%.
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PROJECT FINANCES/ADVANCES
Project Application Fee (Non-refundable) Following charges will be recovered in addition to mark-up/Return on Investment. Miscellaneous (i.e. charges for documentation, evaluation of security and maintenance thereof etc.)
At actual, in addition: 1. Project examination fee @ 0.50% (flat) after acceptance of sanctioned by the company but before disbursement of the total amount of sanctioned (Funded and Non Funded Both) Minimum Rs.15,000/2. Legal documentation fee. @ 0.25% Flat after acceptance of sanctioned by the Company but before disbursement of the total amount of sanctioned (Funded and Non Funded Both) 3. Project monitoring fee @ 0.50% p.a. payable quarterly on outstanding amount (Funded and Non Funded Both) 4. Commitment fee @ 1.50% p.a. payable quarterly on the un-disbursement amount of sanction (Funded only) 5. Front End/Arrangement Fee. @ 1.50% (Flat) wherever applicable as per Banks discretion.
GODOWN CHARGES
Godown Rent. Salaries of Godown Keepers/Chowkidars Actual Actual
Actual Treatment Debit to party account if Godown Inspection charges are upto Rs.500/- for payment to staff. Debit to party and credit to bank Income Account if Inspection charges are more than
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Rs.500/- and reimbursement of TA/DA charges through debit to Expenditure Account with the approval of Competent Authority. Delivery Charges:If a godown keeper is not posted Conveyance Charges will recovered. Other incidental expenses: Insurance premia. Legal Charges. be Actual
Actual Actual
Handling charges on marking of lien Rs.500/- (Flat) per customer (to be on Govt. Securities recovered by the Branch where the loan is applied) Marking of lien on Securities issued by NBP for other banks Rs.500/- (Flat) per customer
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SALE AND PURCHASE OF SECURITIES SAFE CUSTODY ARTICLES IN SAFE DEPOSITS & SAFE DEPOSITS LOCKERS
Sale and purchase of shares and Securities a. Rs.0.50% upto Rs.10,000/- of purchase price or cost thereof Minimum Rs.50/b. Rs.0.10% on amount exceeding Rs.10,000/Minimum Rs.75/-
Shares & Securities held in safe Rs.0.50% (Flat) per annum or part thereof of the custody as a result of order of face value with the minimum of Rs.300/purchase executed through the bank (to be recovered up front)
Withdrawal fee on shares and a. 0.25% upto Rs.10,000/- of the paid up or face securities held in safe custody value, Minimum Rs.50/(to be recovered at the time of b. 0.125% on amount exceeding Rs.10,000/withdrawal.)
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SAFE-DEPOSIT LOCKERS
Safe Deposit fee (to be recovered in advance at the time of deposit or at the commencement of each Quarter) For Boxes and Packages . For Envelopes
Rs.4/- per 100 cubic inches or any part thereof with a minimum of Rs.300/- per quarter Rs.2/- per 25 square inches or any part thereof with a minimum of Rs.300/-
Breaking Charges
LOCKERS CHARGES
LOCKER SIZE KEY DEPOSITS
Rs.4,000/-
Rs.5,000/Rs.6,000/Rs.8,000/-
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GUARANTEES
Charges for borrowing customers As per arrangement
Guarantees issued to shipping companies in lieu of Bills of Lading or endorsement of copy Airways Bills in absence of original Airways Bill.
Rs.1,000/- (Flat)
Guarantees issued to Collector of Custom in lieu of payment of Export Duty which are valid upto 6 months Issuance of foreign guarantees (i.e beneficiaries in foreign countries) directly or through correspondent bank/banks foreign branch/offices
0.50% per quarter or part thereof Minimum Rs.1,000/- (2.00% per annum).
0.40% per quarter or part thereof Minimum Rs.1,000/-plus correspondent bank charges if any. Swift/Telex US$ 20/-per Telex/Swift message Postage US$ 10/- per postage
Other Guarantees
Based on volume during a Calendar Year: Upto (a) Rs. 15 (M) 0.40% per Qtr or part thereof (b) Rs. 30 (M) 0.30% per Qtr or part thereof (c) Rs. 50 (M) 0.25% per Qtr or part thereof (d) Rs. 100 (M) 0.20% per Qtr or part thereof (e) Above Rs. 100 (M) Negotiable Minimum commission Rs.1,000/- per annum per guarantee wherever guarantee validity is less than one year.
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Amendments
Rs.300/- per amendment (Flat) or 0.40% per quarter or part thereof if amendment involves increase in amount or extension in validity Minimum Rs.500/-
MISCELLANEOUS CHARGES
Service Charges on PLS Saving Accounts including dormant, inoperative with monthly average balance below Rs. 5,000/Rs.50/- per month
Service Charges on current Accounts including dormant, inoperative with monthly average balance below Rs.5,000/
Service Charges on Foreign Accounts including dormant, inoperative with monthly average balance below US$1,000/- or equivalent amount in other foreign currencies
US$ 3/- per month (Service Charges not applicable to Foreign currency accounts of NBP employees[in service or retired] or their spouses)
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Handling charges for issuance of students exchange remittance permit and maintenance of record for subsequent remittance.
Rupee A/c Rs.150/- per instruction. F.C A/c US$ 5/- per Instruction
EXTRA
Clearance of Cheques where Clearing House Facility not established Collection/encashment of profit coupons on Govt/Saving Centers under lien to us Verification of banks/parties test for other Rs.250/- (Flat) No Charges
Credit information report Foreign correspondent/reporting agencies including credit Report on foreign charges at actual + Telex Charges. suppliers/buyers. Registration of contract with SBP in respect of private foreign currency loan obtained by borrowers in Pakistan from foreign lenders Confirmation of balances to auditors Handling charges Rs.5,000/- (Flat.)
Rs.400/-
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Issuance of new cheque book in lieu of lost cheque book (Rupee Rs.100/- per request plus excise duty if any. A/c only). These Charges are in US$ 2/- in F.C Account. addition to stop payment charges as prescribed above. Issuance of loose cheque Account closing charges Issuance of Cheque Book Mailing Charges for Cheque Book. Rs.50/- per cheque Rupee A/c Rs.250/- for Local Currency or entire amount if balance in the account is below Rs.250/-. Rs.3/- per leaf (plus excise duty if any) Actual
ATM Facility
ATM card will be issued free of cost. However, annual renewal fee of Rs.300/- will be charged. Transaction cost for NBP customer using another bank ATM under 1-LINK ATM/MNET ATM SWITCH Service Rs.15/- per transaction. Balance Inquiry: Free, in case of using 1-Link ATM, Rs.5/- in case of using MNET ATM. ATM Card Lost / Replacement Charges: Rs.150/-. ATM Card Pin Re-issuance Charges: Rs. 100/-
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PLACE
Placement includes the activities that make the product available to target customers.
DISTRIBUTION NETWORK
A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business use. It is also known as marketing channel. Companys channel decision affects every other marketing mix decision. Marketing channels or distribution channels that look forward toward the customer. Downstream marketing channel partners such as wholesalers and retailers, from a vital connection between the firm and its customers. Pricing Depends on whether the company works with national discount chains, uses high quality specialty stores or sells directly to consumers over the web. Promotion and communication Decision depends on how much persuasion, training, motivation and support its channel partners need. Acquiring or Developing New product depends upon how well these products fit the capabilities of its channel members.
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Branches in Lahore
Branch Code
Branch Details
Main Branch Lahore (Hub Branch)
300
303
Anarkali Branch
313
323
324
356
372
390
409
413
416
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430
Garhi Shahu
449
Samanabad Lahore
452
Shahdara Branch
465
466
479
PCSIR Branch
483
490
493
Chauburji Branch
496
509
518
Raiwind
539
540
Baghbanpura
628
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649
Mughalpura
757
877
950
979
981
982
983
Mozang Chungi
1397
1405
1441
Kahna Nau
1442
1518
1523
1524
Davis Road
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1537
1569
1587
Ismail Nagar
1606
1607
1618
Walton Road
1619
1655
Shahpur Kanjran
1669
Township Branch
1707
1741
1857
1887
1917
1948
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1966
1996
1997
2045
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OVERSEAS BRANCHES
There are 23 Overseas Branches: USA EGYPT BAHRAIN BANGLADESH U.K Wall Street New York, UN Plaza New York Washington D.C. and Chicago CAIRO MANAMA DHAKA LONDON MANCHESTER, GLASGOW, BRADFORD, EDINBURGH, SHEFFIELD, BIRMINGHAM & KNIGHTSBRIDGE (LONDON)
FRANCE CHINA UZBEKISTAN SAUDI ARABIA GERMANY HONK KONG JAPAN KOREA
PARIS BEIJING(REP. OFFICE) TASHKENT BANK AL-JAZEERAH BRANCHES FRANKFURT HONG KONG & KOWLOON TOKYO & OSAKA SEOUL
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PROMOTION
Promotion means activities that communicate the merits of the product and persuade target customers to buy it
Building good customer relationships calls for more that just developing a good product, pricing it attractively and making it available to target customers. Companies must also communicate their value proposition to customers and what they communicate should not be left to chance. All of their communications must be planned and blended into carefully integrated marketing communications programs. Just as good communication is important in building and maintaining any kind of relationship, it is a crucial element in a companys efforts to build profitable relationships.
PROMOTION TOOLS
Promotional Tools
Advertising
Sales Promotion
Relations
Personal Selling
Direct Marketing
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SPORTS
Physical activity is essential for everyone. It Builds self Confidence and can be an excellent group activity for your family and friends. Exercise is an activity that transcends age. The NBP sports Complex is open for all its customers and for others also.
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space. He also says that Health and sports compliment each other because healthy minds and bodies are less susceptible to ailments. So the Bank organizes and develops the sport complex for the sake of society and those people who are not avail the healthy life. The NBP chief was of the view that the sports wing of his Bank was the most organized one in the country. He said the NBP sponsors sports in all parts of the country and provides jobs to sportsmen. Syed Ali Raza said that to tap the talent, the NBP has been organizing coaching camps for crickets, hockey and football in various parts of the country at the grassroots level.
SOCCER
The Pakistan Premier League (PPL) is the first division of Pakistani football. It was established in 2004, in place of the National Championship by the Pakistan FootBall Federation. It was a knock-out competition, which remained this way until it was replaced by the Football League in 2004. Football in Pakistan remained underdeveloped for decades due to mismanagement, lack of support and corruption. However in August 2003, with the support of FIFA under their Goal Project, and new management within the Pakistan Football Federation, Pakistan restructured the national football system. The National Football Championship was replaced in 2004 by the national football league, called the National Division. National Bank of Pakistan is Sponsor Pakistan premier league in 2004, 2005, 2006, 2007, 2008. NBP want to be Healthy people who take part in every activity, and watch them the domestic soccer. National bank of Pakistan mostly sponsors the domestic Football league. NBP promote the youngsters who have talented.
HOCKEY
Pakistan Hockey Federation has named a panel of Technical Officials to conduct All Pakistan NBP Junior Hockey Cup to be played at the Hockey Club of Pakistan Karachi from November 28 to December 5. The competition will be organized by National Bank of Pakistan.
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Gulfraz Ahmed Khan, Honorary Secretary Karachi Hockey Association, will be the Organizing Secretary of the tournament. The technical briefing meetings will be held by the Tournament Director on November 2007. National Bank of Pakistan is great emphasis on Hockey Cup in domestic basis. And NBP promote the culture of Hockey Matches on Domestic as well as all over the world.
CRICKET
National Bank of Pakistan (NBP) is Sponsors different Cricket events on Domestic bases. The list of those events is as follow:
Inter-Region Under 19 Tournament 2007/08 Inter-Region Grade II Tournament 2007/08 Inter-District Under 19 Tournament 2007/08 PCB National Schools Under-17 Women's Championship 2007/08 Inter-District Senior Tournament 2007/08
NBP organize through sponsorship to those events and also participate in these events. NBP also organize or sponsor International Cricket events in Pakistan.
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DEPOSIT SCHEMES
Deposit Schemes being offered by NBPs Islamic Banking Branches would include the following:
Current Deposit Scheme Profit & Loss Sharing (PLS) Deposit Scheme
Ideal for customers looking for security of their funds along with absolute convenience in its use, in the form of Current accounts Funds deposited with the bank will be utilized by the bank at its sole discretion in Shariah acceptable avenues. The Customer will have the flexibility to withdraw a part or the whole of their balances at any time as per their requirement This is a non remunerative deposit scheme and thus the customer will not be sharing the profits nor will be sharing losses (if any). However, the Bank may at its absolute discretion give rewards to
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these Depositors depending upon the operational results of the Bank. Losses will not be passed on to these Depositors.
PLS Saving Deposits Scheme will accept deposits on Mudaraba basis, where the depositor will be Rabb-ul-Mal and Bank will be Mudarib. The Bank will invest the deposited funds at its (Banks) sole discretion in Shariah acceptable avenues The Depositor will have the flexibility to withdraw a part or the whole of their balances at any time as per their requirement. The Bank will give profit to the Depositors on the basis of agreed ratio of actual profits to be announced by the Bank from time to time. In the event of financial loss, the PLS depositors will bear the loss in proportion of their investment. The Depositors will not participate in the management of the business of the Bank
Other terms and conditions as well as rules for PLS Deposit Account to be advised by the Bank at the time of opening of Account.
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Weight
Term Deposits
Less than 50 Million 0. 4695 0.4695 0.4695 0.9389 0.9859 1.0328 1.0798 1.1267
TDR 01 month TDR 3 months TDR 6 months TDR 12 months/ 1 year TDR 2 Years TDR 3 Years TDR 4 Years TDR 5 Years More than 50 Million TDR 12 months/ 1 year TDR 2 Years TDR 3 Years TDR 4 Years TDR 5 Years
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Saving Deposits
5,000 to 99,999 100,000 to 999,999 1,000,000 to 4,999,999 5,000,000 to 9,999,999 10,000,000 to 49,999,999 50,000,000 to 99,999,999 100,000,000 to 199,999,999 200,000,000 & above 5.15% 5.15% 5.15% N/A N/A N/A N/A N/A 5.15% 5.15% 5.15% N/A N/A N/A N/A N/A 4.95% 4.95% 4.95% N/A N/A N/A N/A N/A 4.99% 4.99% 4.99% N/A N/A N/A N/A N/A 4.85% 4.85% 4.85% 4.85% 0.00% 0.00% 0.00% 0.00%
Term Deposits
Less than 50 Million TDR 01 month TDR 3 months TDR 6 months TDR 12 months/ 1 year TDR 2 Years TDR 3 Years TDR 4 Years TDR 5 Years More than 50 Million TDR 12 months/ 1 year TDR 2 Years TDR 3 Years TDR 4 Years TDR 5 Years
10.30% 10.30% N/A N/A 11.35% 11.33% N/A N/A 12.36% 12.36%
NOTE: N/A represents Non-Availability of Profit Rates under Deposit Categories having NIL balance
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Financing Facilities
Commercial and Corporate customers requiring financing will have the following financing facilities available to them to meet their requirements:
MURABAHA
Murabaha may be defined as a contract between a Buyer and Seller under which the Seller discloses to the Buyer the cost of goods being sold and adds an agreed profit. Price is payable on spot or at a certain future date, in lump sum or in installments (deferred payments).
Murabaha Facility
1. Under the MURABAHA FACILITY, the Bank will first purchase the required goods directly or through an Agent. All costs incurred on such purchases will be borne by the Bank. 2. Subsequently the Bank will sell the goods to the customer on deferred payment basis (30 days to one year) at an agreed price comprising cost of goods purchased and Bank's profit.
3. On due date the customer will pay to the Bank the agreed price, in lump sum or as per the agreed
installment schedule.
IJARAH
Ijarah means to give something on rent. The term IJARAH is analogous to the English term leasing. Firstly the Bank will purchase the Assets as required by the Customer and subsequently the assets will be leased to the Customer on the terms and conditions as agreed with him. Ijarah Facility will be offered for the following assets:
Vehicles (both Commercial and Private) Office Equipment Plant and Machinery
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Balance Sheet
As At December 31, 2008 2008 2007
ASSETS
Cash and balances with treasury banks Balances with other banks Lending to Financial Institutions Investments Advances Operating Fixed Assets Deferred Tax Assets ther Assets 106,503,756 38,344,608 17,128,032 170,822,491 412,986,865 24,217,655 3,204,572 44,550,347 817,758,326 (Rupees in 000) 94,873,249 37,472,832 21,464,600 211,146,038 340,318,930 25,922,979 30,994,965 762,193,593
LIABILITIES
Bills payable Borrowings Deposits and other Accounts Sub-ordinated loans Liabilities against assets subject to finance lease Deferred Tax Liabilities Other Liabilities NET ASSETS 10,219,061 40,458,926 624,939,016 25,274 39,656,831 715,299,108 102,459,218 7,061,902 10,815,176 591,907,435 33,554 5,097,831 30,940,041 645,855,939 116,337,654
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Income Statement
2008
Mark-up/Return/Interest earned Mark-up/Return/Interest expensed Net-Mark-up/interest Income provision against non-performing advances Provision for/(reversal of) diminution in the value of investment Provision against off balance sheet obligations Bad debt written off directly Mark-up/interest Income after provisions 60,942,798 23,884,768 37,058,030 10,593,565 373,249 4000 26,087,216
2007
50,569,481 16,940,011 32,629,470 4,723,084 (40,248) 39,899 28,906,735
Non-Mark-up/interest Income
Fee,commision and brokerage income Dividend income Income from dealing in foreign currencies Gain on sale and redemption of securities-net Unrealized/(loss) on revaluation of investments classified as held-for-trading Other income Total Non-Mark-up/interest Income Non-Mark-up/interest expenses Administrative expenses Other provisions/write offs Other charges Total Non-Mark-up/interest expenses Profit Before Taxation Taxation-current -prior years -deferred Profit After Taxation Un-appropriated profit brought forward Transfer from surplus on revaluation of fix assets of incremental depreciation Profit available for appropriation HINA MASOOD O7 18,171,198 747,521 583,367 19,502,080 23,000,998 11,762,650 (4,220,242) 7,542,408 14,205,911 168,027 171,141 14,391,079 28,060,501 8,311,500 391,497 323,731 9,026,728 7,925,370 2,878,932 3,969,057 395,427 1,707 1,245,369 42,503,078 6,781,683 3,263,246 1,042,827 2,341,690 (31,964) 147,363 42,451,580
15,458,590 19,033,773 45,344,188 32,074,677 130,456 39,007 60,933,234 51,147,457 Page 146
Assets Cash & Balances with treasury Banks Balances with other banks Lending to financial institutions-net Investment-net Advances-net Operating fix assets Deferred tax Assets-net Other assets Liabilities Bill payables Borrowings Deposit and other accounts Liabilities against assets subject to finance lease deferred tax liabilities-net other liabilities Net Assets Represented By Share capital Reserves Unappropriated profit Surplus on revaluation of Assets-net
2008(%) 112 102 80 81 121 93 144 107 145 374 106 75 0 128 111 88 110 126 116 117 45 88
2007(%) 121 92 93 151 108 268 114 120 67 92 118 253 214 116 117 142 115 114 141 131 163 142
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ANALYSIS
Total assets growth rate is 140% this is because of Cash and Balances with treasury banks grow by 60% which caused by increase 21% in 2007 and 12% in 2008, Advances-net grow by 40.5% in current year increase by 21% as compare to 8% in 2007. Operating fixed assets growth rate 80.5% but current year Operating fixed decrease by 7% Other assets also show a greater increase from 14% to 44% in current year and its growth rate approximately 29%,while lending to financial institution shows declining trend since last few years over all declining 13% and Balance with other banks declining at rate of 3%. Liabilities growing by 14% Other liabilities increase from 16% to 28% with growth rate 22%, Borrowing and Liabilities against subject to finance lease show greater increase with growth rate of 133% and 64% respectively, and Bill payable & deposit in other banks also increasing with growth rate of 6%-12% respectively, Equity show positive trend with growth rate of 24% this is because of Reserves and Un-appropriated profit increasing with rate of 20% and 28.5% & Share capital increasing with 12.5%.
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Assets Cash & Balances with treasury Banks Balances with other banks Lending to financial institutions-net Investment-net Advances-net Operating fix assets Deferred tax Assets-net Other assets Liabilities Bill payables Borrowings Deposit and other accounts Sub-ordinate loans Liabilities against assets subject to finance lease deferred tax liabilities-net other liabilities Net Assets Represented By Share capital Reserves Un-appropriated profit Surplus on revaluation of Assets-net
1.43 5.7 87 0.0035 0 5.5 87.5 12.5 11 24.5 64.5 10 2.5 12.5
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ANALYSIS
Cash & balance with treasury Banks is increase in current year from 12% to 13% of total assets portion of balance with other banks shows decreasing trend in current year 4.7% of total assets as compare to 4.9% and 6.4% in 2007 and 2006 respectively, lending to financial institution decreasing other assets portion is increasing in current year which is 5.4% of total assets as compare to 4.06% and 4.3% in 2007 and 2006 respectively. Total liabilities show increasing trend in current year which is 87.5% of total assets as compare to 84.7% and 87.1% in 2006 and 2007, this increase is because to greater increase in bill payable, borrowing and other portion of liabilities. Net assets portion is decreasing this decrease because of increase in liabilities which means in NBPs debts increase, equity portion also increasing as compare to previous year of equity portion this increase because of increasing in reserves, the increase in equity show that the NBPs dependence on equity financing increasing while the dependence on debt financing decreasing.
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INDEX ANALYSIS
2008(%) Mark-up/Return/Interest earned Mark-up/Return/Interest expensed Net-Mark-up/interest Income provision against non-performing advances Provision for/(reversal of) diminution in the value of investment Provision against off balance sheet obligations Bad debt written off directly Mark-up/interest Income after provisions Non-Mark-up/interest Income fee,commision and brokerage income dividend income Income from dealing in foreign currencies Gain on sale and redemption of securities-net Unrealized/(loss) on revaluation of investments classified as held-for-trading Other income Total Non-Mark-up/interest Income Non-Mark-up/interest expenses Administrative expenses Other provisions/write offs Other charges Total Non-Mark-up/interest expenses Profit Before Taxation Taxation-current -prior years -deferred Profit After Taxation Un-appropriated profit brought forward Transfer from surplus on revaluation of fix assets on account of incremental depreciation Profit available for appropriation 164.45234 64.452341 100 28.586422 1.0072014 0.0107939 0 29.604418 70.395582
2006 (%) 146.2537 46.25373 100 10.20015 -2.35281 0 0.017524 7.864855 92.13515 20.37768 9.590045 4.423468 3.87851
21.386377 20.16589 7.768713 9.703531 10.710383 3.100932 1.0670481 6.963208 0.0046063 3.3605915 44.297719 114.6933
-0.09505 -0.0148 0.438196 2.081395 40.27671 40.3363 126.2333 132.4714 44.58303 -0.05732 0.690883 45.2166 87.25484 87.25484 28.83757 1.759823 0.20555 30.80294 56.4519 64.24589 0.136169 120.834
49.034441 42.24245 2.0171634 0.499642 1.5741824 0.05097 52.625787 42.79306 62.067514 83.44021 62.067514 83.44021 31.741164 24.71493 0 1.164149 -11.3882 0.962641 20.352965 26.84172 39.016078 56.59849 122.35995 95.37669 0.3520317 164.42653 0.115991 152.0912
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ANALYSIS
Markup/ interest unearned show increasing trend last few years but markup/ expensed increase which is 64.5% of interest income as compare to 50% and 46% in 2007 and 2006, markup interest income after provisions show decreasing trends since 2006 this decrease because of greater increase in provision against non performing advances and provision for/ diminution in the value to investment. Total no markup/ interest income show increasing trend which is because of greater increase in income from dealing in foreign currency and fee, commission and brokerage income and other income, profit before taxation show declining trend this is because of increase in the portion of interest expense in current year which is 52.6% as compare to 43% and 45% in 2007 and 2006, interest expense increase in because of increase in admin expenses, other provision/ write off and other charges also increasing. Profit after taxation show greater declining which is because of increasing in taxation which was 31.74% of interest income, the decrease in profit after taxation most effective decreasing profit before taxation.
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LIQUIDITY RATIOS:
RATIO HOW CALCULATED 2008 2007 2006 23,012,732 11,704,079 1.96*100 197 2005 16,282,942 8,756,847 1.859*100 186
Due from bank Due from Bank*100 to due to bank Due to Bank ratio
RATIO
HOW CALCULATED
Due Due from Bank*100 from Total Deposit bank to due to deposi t ratio
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RATIO
2008
2007
2006
2005
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17,128,032 817,758,326
21,464,600 762,193,593
23,012,732 635,132,711
16,282,942 577,718,806
The ratio is stable and favorable which shows that the Bank has sufficient funds to lend to financial institutions.
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The ratio is increasing that means bank has sufficient assets which is a great source of economic resources and there is no greater financial risk.
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RATIO
2008
2007
2006
2005
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Debt to Equity ratio tells us that the creditors are providing 8.303 paisa for financing for each Rs. 1 being provided by share holders for the year 2008 which has decreased from the previous years. Creditors would generally like this ratio to be low. The low the ratio, the higher the level of Banks financing that is being provided by shareholders and the larger the creditor cushion (Margin of protection) in the event of shrinking assets values or outright losses.
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In year 2006, the profit generated was huge. The net interest income has increased over the three year span. During 2008, the profitability position was much better than 2005. The markup interest expensed was less as compared to 2007 and 2005.
RATIO
HOW CALCULATED
2008
2007
2006
2005
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RATIO
HOW CALCULATED
2008
2007
2006
2005
Administra Administrative tive expenses *100 Expense to Total Deposits total deposit Ratio
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60,942,798 817,758,326
50,569,481 762,193,593
43,788,628 635,132,711
33,692,665 577,718,806
This ratio measures the relative efficiency of total assets to generate sales. The ratio is increasing from 2005 to 2008. It shows that it is generating 7.45 sales per 1 unit of assets which is good enough.
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Return on Assets
RATIO HOW CALCULATED Net profit After Taxation Total Assets 0.0189*100 1.89 0.0249*100 2.497 0.0268*100 2.680 0.0219*100 2.199 2008 2007 2006 2005
Return on Assets
15,458,590 817,758,326
19,033,773 762,193,593
17,022,346 635,132,711
12,709,444 577,718,806
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Return on Equity
RATIO HOW CALCULATED Net profit After Tax Capital Fund 0.1899 0.275 0.321 0.338 2008 2007 2006 2005
Return on Equity
15,458,590 81,367,002
19,033,773 69,270,631
17,022,346 53,044,649
12,709,444 37,635,706
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Current Ratio
RATIO HOW CALCULATED Current Assets Current Liabilities 2008 2007 2006 2005
Current Ratio
+ 30,940,041 +26,596,300
From the above calculated figures, it has been deduced that the current ratio has fluctuated over four years time span. It is maximum in 2007 i.e. 1.711 but again decreased in 2008 i.e. 0.289. The Banks cash flows and other assets are not predictable; therefore the current ratio is not acceptable.
This indicates that for every worth Rs.1 current liability, the bank has the current assets of worth Rs. 0.289 which is not favourable.
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RATIO
2008
2007
2006
2005
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RATIO
2008
2007
2006
2005
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GENERAL BANKING
General banking area is also call the operations group. It consist on following section ACCOUNTS SECTION REMITTANCES CLEARING SYSTEM GOVERNMENT RECEIPTS CONSUMER AND RETAIL BANKING LOCKERS
Accounts section:
Accounts Department of the bank can be considered the most important department. This department is basically concerned with processes and activities of recovering, sorting, summarizing and reporting data resulting from the whole day transactions of all the departments. Actually the process of this activity starts from the preparation of all the required vouchers by different related departments. When these vouchers are prepared, these are posted into respective computer terminals by the relevant departments. Before merging, a batch list is printed out by Computer Department and duly checked by the respective departments. After this, merging stage comes, after which a proof list is printed out. This is the stage, where Accounts Department starts performing its function. Proof list is checked by the Accounts Departments. This section performs the following functions: Opening of Accounts Issuance of cheque books Closing of accounts Payment of Cheques
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Types of accounts
Following types of accounts are open in NBP Saving account Current or demand account
Fixed account
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Fixed account
Fixed accounts are those, which are deposited for a fixed period of time and are repayable after
the expiry of stipulated time to the customers. Those people who have surplus funds and want to have save investments deposit the amount in the fixed account. The rate of interest given to depositor varies with the length of deposit, i.e. it is higher for longer period and lowers for shorter period. The rates on this type of deposits are higher than the saving bank accounts. The cash reserves against this deposit are very low because there is no fear of withdrawal of a month before the stipulated of time. No paying books or passes book or cheque book is issued. The authorities of national bank of Pakistan have the right to revise all these rates of interest with out any notice to customers generally rates of interest are revised after six months. The amount deposited for 7 and 30 days short term notice and accumulated for the period exceeding the limit and the customers can get the interest of the extra days of deposit but in the case of months and years the customer did not get any additional interest for the exceeding period of deposit.
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When the concerned officer is satisfied then he opens the account and gives an account number that will be used in all communications with the bank in regard to the account and when making deposits and withdrawals. Bank has the right not to open an account without assigning any reason or to close the account if it is not operated in a satisfactory manner by the instructions of the head office.
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Loose Cheques
Issuance of loose cheque by the bank as he does not has his cheque book with him and the money is urgently required, the this cheque is called the loose cheque. If any customer forgets or leaves his cheque book at his home, which is far away from the bank or whatever the case may be, the customer applies with the bank for loose cheque. The Bank issues a loose cheque for Rs. 50 as charges for the issuance of the loose cheque plus Rs. 4.50 as excise duty.
Payment of Cheques
It is banks primary function to repay the money required for its customers account usually by honoring his cheques. It is a contractual obligation of a banker to honor its customers cheque if the following essential are fulfilled:
Cheque should be in a proper form Cheque should not be mutilated Cheque should be drawn in this particular branch Cheque should not be damaged No unauthorized material alterations Funds must be sufficiently available Cheque should not be post date or stale Cheque should be presenting during the banking hours
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Routing of expenses vouchers Preparation of daily activity reports Preparation of weekly and monthly statements Preparation of statements for tax purpose
Routing of Expenses
Vouchers of all expenses and material purchases are routed out through this department. As far as the expenses are concerned, they include the heads of salaries paid to confirmed employees of bank, wages paid to employees that are on contractual basis, rent of the building, lease installment and insurance premium paid to insurance company for the insurance of vehicles and cash in safe and counter. Expenses also include the utility bill, which consists of courier, electricity, water and gas bills, medical expenses, which are reimbursed.
Voucher collecting of
Loan transactions General ledger transactions Foreign currency related transactions Fixed deposit related transactions
The checking is on daily basis.
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Weekly Statements
These statements are generated on weekly basis for the purpose of sending it to Head Office. These also include: Statement of affair Deposit and advances position of the bank
Monthly Statements
These statements are prepared on monthly basis and also sent to Head Office (Qatar). These include:
Provisional statement of income and expenses. This statement adjusted for accruals and prepayments. Monthly Balance Sheet and Income Statement Comparative Statement
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2.5% 5%
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CASH DEPARTMENT
NBP cash depart is responsible for handling all receipt & disbursement of cash. Each and every transaction which involves cash, is through Cash department so, cash department is involved in almost all transactions of the bank. NBP cash department also keeps record of all receipt & payments for the maintenance of book keeping. Cash department enters all transactions in Cash Scroll Register. NBP cash department is also responsible for the safety of cash available to them and no one is allowed to enter in that area where they carry all the cash related functions. NBP cash department mainly performs two functions:
Receipt
The money, which either comes or goes out from the bank, its record should be kept. Cash department performs this function. The deposits of all customers of the bank are controlled by means of ledger accounts. Every customer has its own ledger account and has separate ledger cards.
Payments
It is a bankers primary contract to repay money received for this customers account usually by honoring his cheques.
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Types of Cheques
Bankers in Pakistan deal with three types of cheques:
a) Bearer Cheques
Bearer cheques are cashable at the counter of the bank. These can also be collected through clearing.
b) Order Cheque
These types of cheques are also cashable on the counter but its holder must satisfy the banker that he is the proper man to collect the payment of the cheque and he has to show his identification. It can also be collected through clearing.
c) Crossed Cheque
These cheques are not payable in cash at the counters of a banker. It can only be credited to the payees account. If there are two persons having accounts at the same bank, one of the account holder issues a cross-cheque in favour of the other account holder. Then the cheque will be credited to the account of the person to whom the cheque was issued and debited from the account of the person who has actually issued the cheque.
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To pass all the entries instantly after they happen. To maintain Cash Scroll register in a proper manner. To posted the stamps according to the transaction. To assign all tasks properly every one. No one person should assign more than one task. Proper verification of all the particulars of the instrument. To safe all the funds of the bank because this is only one department who is allowed to handle cash. No one should be allowed to enter in that area where they perform cash related transactions To affirm the signatures properly To verify the signatures, on the back of the instrument. To send the transaction in deposit department, for further proceeding. To know about the status of ATM machine. To fill the ATM machine requirements according to the demand of that area clients. At the end, to match Cash department register balance to Deposit department & also to computerized total, to safe the cash department from any worrisome situation.
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CLEARANCE DEPARTMENT
NBP is providing many valuable services to its valuable clients for their facilitation, to save their valuable time and also to safe them from any difficulty. So, a most important service of NBP is clearing. Clearing department plays an important role in the activities of the NBP.
CLEARANCE
The transfer of funds from one branch
NIFT (National Institutional Facilitation Technology) NIFT is a clearing house which has been established by SBP to facilitate the commercial banks in their activities and functions.
NIFT maintains an account for each and every bank who is its member. It performs all the functions according to the instructions of SBP. It clears all the instruments which are drawn from one bank to another bank. One officer from every member bank comes daily in NIFT with all the instruments which should be cleared. NIFT have the right to refuse the settlement of the instrument if NIFT is not satisfied from the particulars of that instrument.
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Types of Clearing
Clearing department deals with two main types of clearing
INWARD CLEARANCE
(Credit Clearing) If an instrument is drawn on any other bank or branch, and instrument is presented in NIFT to give credit to NBP city branch client. This is Inward clearance of NBP. In inward clearance inflows of funds happen.
OUTWARD CLEARANCE
(Debit Clearance) If an instrument is drawn on NBP and presented in NIFT for clearance, and to Debit NBP account holder debit, it is called outward clearance. In such clearance, outflow of funds happen.
IN HOUSE CHEQUES
These are the cheques which are drawn from NBP one branch to NBP another branch.
LOCAL CHEQUES
These are the cheques which are drawn from one bank to another bank. These are presented in NIFT for clearance purpose. This clearance is performed among NIFT members.
RESPONSIBILITIES
Sorting of cheques To visit NIFT To check the reason of any instrument cancellation from NIFT
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Collection of utility bills Collection of dues of education institution Payment of salaries Payment of zakat Payment of pension
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Remittances Section
Remittances can be made through:
1) Instrumental Transfer
Instrumental transfers are following:
Demand Draft
It is an instrument, which is payable on demand and it is only presentable in the city/country. When any draft, i.e., an order to pay money, drawn by an office of bank upon another office of the same bank for a sum of money payable to order on demand, purports to be issued by or on behalf of the payee, the bank is discharged by the payment in due course. When a person requires a draft, he should be asked to complete the prescribed application form in which he should state the amount of the draft, the name of the payee, and the place of payment. The person to those persons, who have been duly authorized to act on his behalf, should sign this application form. An advice is prepared and two copies of this advice are sent to the Head Office. The bank charges 3% withholding tax and commission according to the rate list (minimum is Rs. 200).
Pay Order
It is an instrument, which is payable in demand and only presentable in city Pay order is also called the bankers cheque drawn upon the issuing bank itself. It is not negotiable and therefore, bankers tend to cross the instrument Payees account only to avoid the possibility of
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dealing with instruments with forged endorsement. The pay order is issued favouring individuals, commercial concerns, government departments. On the presentation of pay order, the bank is liable to pay the amount to the customer. Bank charges excise duty of Rs. 4 and service charges of Rs. 100.
Pay Slip
It is an instrument, which is issued by bank and used for expenditure purposes, i.e., electricity bills, maintenance bills, security bills, fixture and fitting, etc
Call Deposit
Call deposit are not actual deposits of bank. It is in fact the liability of the bank. Call deposit are ofently prepaid by the bank for contractors
PROCEDURE:
Following steps are involved:
1) Depositor fill the credit vouchers for call deposit. He writes the following information
Encashment of CD
For the encashment of call deposit needed 5 rupee stamp two signature of customer on the back side of CD token issued accountant make entry in the CD register show that it has returned
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a. Electronic Transfer
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Mail Transfer
It is the same like TT, but in this type, the message is sent through mail rather than telex. The procedure is same as TT, but the advice is sent through mail rather than wired.
Lockers service
National bank of Pakistan also provides lockers facility in the country. The lockers issued only to the depositors. No lockers are issued to any unknown person. The dual control system is used for lockers. The officer has master key to apply on the locker but he cannot open the locker of any person. The locker holder provides the bank has specimen signature. Whenever the locker holders come to open the locker, his signatures are verified by the officer and then will be able to open his locker. If the key of the locker is lost company providing these lockers breaks the locker and new lock is fitted in its locker and lock is destroyed in the presence of the locker holder and bank charges Rs. 1200 for that. In case the locker holder dies, the court opens his locker in the presence of his heir as mentioned in his will or and his belongings are given to them and the locker is closed.
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Computer Section
Through this department bank has make its way to enter in twenty first century. This department is playing a very important role in making the banking procedures faster and helping the bank for providing new services to its customers. This division provided the bank with online branches, systems to make the whole procedure foolproof.
Types of Branches
There are three types of Branches in all over Pakistan of NBP
1. Online branches:
The branches, which are directly, link with central computer AS-400, through wide area networking through fiber optics. These branches have dumb terminal directly linked with central computer. Yet only forty-four branches all over Pakistan are online. Of these forty-four, seventeen are located in Karachi, seven in Lahore, two in Islamabad and two in Multan and two each in other regional head offices.
2. Batch Branches:
The branches where all transactions are carried out with the computer base system but these branches are not connected to the central computer with wide area net working. Batch branches are using three type of system, Branch Back Office (BBO) based on FoxPro, Branch Automated System based (BAS) on UNIX, Branch Integrated System (BIS) based on FoxPro in Karachi mostly branches are facing this problem. BAS was establish in the beginning while BBO is currently implemented now efforts are under way to convert all branches into Electronic Banking System (EBS) which is used by online branches as this system does not require a person to remain sitting till the branch closed its daily operation but the system automatically close it self when the branch timing is over. The database in head office is also based on this system.
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3. Manual Branches:
The branches where all transactions are carried out manually and records are maintained on registers usually stored in big wardrobes. All branches in Pakistan report to there regional head office regarding there daily transaction. In the RHO through On Line, terminal data goes to head office central computer; Except for branches those are On Line as they transfer there daily data directly through there own terminal. As day-to-day, activities of all branches are recorded in a central computer.
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include Unmatched (This error occurs when document no matched with the previous one exists), no master (when opening of new account is not mentioned), Date in Valid, duplicate cheques (this error occur when the last objection is not removed), these and other such error are see by the person in charge. In the end of day print out of the data enter in central computer is taken. Any Incomplete information for any branch and any information require by that particular branch is sent to that branch. More over material is used to make a WST which is sent to State Bank of Pakistan.
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Capacity
The ability of borrower to repay the loan when due. The borrower ability to repay the loan is assessed by the office so that he will be able to repay the loan in future.
Capital
The officer assesses the capital of the borrower. If assets held by the borrower are liquid, they can be easily convertible in cash; but if non liquid is used then it is risky to given loan.
Collateral
It is collateral security. It may consists of stocks bonds , bill of exchange, bills of lading, etc. the bank has protect him self from any discrepancy in the future. They increase the ability of the borrower to obtain the funds from the bank.
Condition
The economic condition of the borrower is determined. The economic conditions of the borrower in and out side the country effects the repayment of loan. If condition is favorable then loan is given otherwise vice versa.
Functions
Credit department has performed following functions.
Advances
Advances provided by the bank are of the following two types. Funded Non-funded
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Funded
In fund based bank contributes a large amount of the fund based on clarified as follows:
TYPES OF ADVANCES
Demand Finance
One time disbursement of the whole amount sanctioned, as the limit for the credit allows. Any person, individual, group, company, firm and all others can achieve this mode of financing. The markup or interest is calculated on the total amount disbursed and requires to be paid before the date of final adjustment. Regarding the amount, limit and period, it depends on the nature of the case in review.
Cash Finance
In this mode of financing the borrower is allowed to make withdrawals of funds as he requires, but the total amount outstanding cannot exceed the limit sanctioned. The mark-up/interest is calculated on the amount outstanding on his account. The calculation of mark-up/interest is based on the number of days a specific amount is withdrawn. This finance if normally borrowed by small traders or individuals for their petty matters involving cash transactions up to rupees three hundred thousand maximum.
Running Finance
To assist a large-scale business operator to carry on his day to day requirements of liquid funds, this account is opened is made operation in his favor. Running finance is provided where the amount goes beyond rupees three hundred thousand. The mark-up/interest is calculated the same way as in case of cash finance. Security against running finance is that which is easily convertible in to cash and bank kept 25% margins with it.
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Non-Fund
Bank provide non fund advance in the following form:
Guarantee Imports
Guarantee
A guarantee is a promise between one person to another person or party to answerable for the debt of a third party. Bank issues guarantee after 100%cash collaterals are provided by the person i.e.50% in the form of the property.
Imports
Bank provides non-funded credit facility to the following basis.
Sight LC
In this type of L.C when payment is made documents are released. A cash margin of 30% is relational by the bank.
Usance or DA L.C
The bank retains the payment after a period of days, which is given in the L.C margin of 30%.
TYPES OF LOANS
The credit department of NBP has providing the following types of loans:
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Status reports
A credit report is an assessment of borrowers character and capacity from a bankers point of view. Credit reports on borrowers called Status Reports, financial reports, bankers opinion or confidential reports. All these terms carry more or less the same meanings. The study of a borrower is a study of his character, capacity and capital, and collateral often known as the 4Cs to consider his credit worthiness and eligibility for the bank advance. The purpose of compilation of credit report of the borrower is to assess their net worth. It must contain information about borrowers means, character, integrity, assets, liabilities, business and experience. Besides, borrowers own investment, details of properties, must be obtained. The borrower may be asked to give written clarification of their existing liabilities. In the case of Limited Companies, their borrowing powers to be verified from their Memorandum & Articles of Association. Their certification of incorporation to be examined, exiting borrowings, prior charge on their fixed assets, paid-up capital, reserves, profit and loss position, detailed particulars of their directors and complete analysis of balance sheet must be incorporated in the credit report. Independent inquiries about the borrowers and opinions form their previous bankers must be
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made. As such a comprehensive credit report is compiled which serves as a constant guide to the banker about his borrower. This report is prepared by the bank of the intending borrower with a view to considering his Credit Worthiness and Eligibility for the Bank Finance. Besides other things it contains the net worth of the borrower.
Firms
Total investment in Business + Properties liabilities Paid-up-capital + Reserves + Profits (Losses)
1. Financial
Condition
This is reflected in the trends of: Net sales Gross sales Operating profits Net profits (at least for the last 3 years)
2.
Structural Liquidity
It refers to the extent of liquidity usually available in the business, or which is the routine requirement of the borrower based on the nature of his periodically maturing liabilities.
3. Industry/Business of Operation
The banker has to check that in which industry or segment of market the loan is being given this is important because if there were a recession in that industry for decades then it would not be feasible to invest in such a business. Certain traditionally stable industries are in Pakistan in which NBP feels satisfied while investing. For example in they feel satisfied by investing in ICI.
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5. Asset Management
Asset management involves the analysis of how productively the assets of the company are being used. Sales and profitability can be measured with this.
7. Management
Before giving loan NBP also checks whether the management have the depth, skill and experience. If the management is aggressive and adoptive to the new changes then it is most likely that the banker may receive the loan back on due date
8. Securities
In case the borrower is not in a position to meet his obligations, there must be something else to call back upon. So bankers take securities to have a resource to them to guard liquidity, that is, security is an insurance against calamities. In case of cash finance the customer have to give the same amount of money to the NBP as a security for which it takes loan.
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Guarantees
A grantee is defined as An undertaking by a person to responsible for the debt of another person. National bank of Pakistan issues guarantees to government agencies like atomic energy, high way department, and customs. Sui northern gas and others. It also issues guarantee to multinational organization like Sandoz, PBS, etc. for the purchase of pesticide or insecticide from any fertilizer company. Bank accepts only long other bank guarantee but in some cases personnel guarantee is also accepted. The guarantee issued is treated as contingent liability. According to local rules and regulation the policy for issuance of guarantee can be changed. The expiry of the guarantee can be set by both bank and guarantor. The minimum period is one year and the guarantee can be reissue for extra period with paying charges. The two officers whose signatures appears in the specimen signature book of bank and also counter sign by the zonal chief must sign each guarantee. Both officers must also sign any amendment. Am amendment in the guarantee can be made after giving written application to issuing
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branch. If the value of the guarantee is reduced by the amendment the liability amount will be reduced and if will value is increased additional liability entries will be passed. The bank provides following types of guarantees to the customers. Bid bond Mobilization bond Performance bond
Bid bond
The facility provided at the time of bid opening is called bid bond.
Mobilization bond
When the bid is accepted, the bank provides this type of facility to the customer.
Performance bond
When the project is completed, the contractor about the performance of the project provides a performance certificate for one year. During one year, if there is any mishap in the project the repair otherwise authorities claim the performance charges from the bank.
Bank charges commission on issuance of guarantee as per their schedule of charges. If the party did not pay the amount in the stipulated time period, bank puts this case for recovery. If some amount is recovering then it is good otherwise bank deduct the amount from its profit and starts the legal procedure against the property pledged by the customer to bank. Bank assesses the demand of the customer and then writes letters to other banks to provide them confidential report of credibility about the customer this is one provided in the shape of CIB (credit information bureau) report provided by the SBP. In this report the credits of the customers with the bank operating in Pakistan are given. After checking this report the bank issues the guarantee to the customer. In case of death of his heir as given in the will be responsible for that guarantee.
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Security
It is an interest or right in the property gives to the creditor to convert it in cash in case of debtor fails to meet the principal and interest. The bank provides the following securities to the customers.
Mortgage
Transfer of interest in movable property for securing the payment of money lend on existing or future liability. The bank provides the following two types of mortgage.
Title deed Non encumbrance (NEC) pit form (in case a constructed hose) Valuation certificate Affidavit Mortgage deed Personnel guarantee of mortgagor Power of attorney Legal opinion
Banks examine all these reports, and if they are correct then issue the mortgage to the party. The bank examines these reports to see that the property they want to mortgage is registered and is not already pledged. The bank also calculates the value of the property and the legal opinion of the customer in case of non-payment.
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Equitable mortgage
Equitable mortgage is provided on the residential property, commercial industrial property, raw plot, etc. Title deed Non encumbrance certificate (nec) Pti form (in case a constructed house) Valuation certificate Affidavit Memorandum of deposit of title deed Personal guarantee of mortgagor Power of attorney Legal opinion In this mortgage a charge form bound the customer for any legal action in case of non-payment. In this type of mortgage hypothecation of stocks involves.
Pledge
A pledge is an a class security given to customers for stocks ware house, customs, and etc. it is defined as actual delivery of movable property to lender as security for a loan. When the customer makes the payment of the loan in full he can back his mortgage property from the bank i.e. when full payment is made the stock is released.
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1. Preparation of credit proposal 2. Prepare the about the customer 3. Sanction of loan
assets in the company. He also measures the percentage of owners equity. Then he doses the ratios analysis of the company. If the party is involved in the export and import business then the data of the last three years of this business is considered. The manager of the bank also examine the project violability, the securities provided by the debtor to the bank are evaluated by measuring their worth. In the case of pledge is assessed by the manager while in case of new party manger checks from where the party is financing for their business
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Bank balance of partners Advance payment of suppliers Particular of machinery installed in the factory through financing In case of corporation/limited companies the following information are included: Incorporation and commencement of company Sales offices Capital information Directors and their contribution to capital Balance sheet with explanation and evaluation Net worth of the company
3) Sanction of loan
If the limit of the loan lies with in the power of manger then he sanction the loan otherwise manger with the covering letter along with all necessary documents sends it to the concerned sanctioning authority.
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Input Stage
The tools presented in this framework are applicable to all sizes and types of organizations and can help strategists identify, evaluate and select strategies. Strategists never consider all feasible alternatives that could benefit the firm because there are infinite number of possible actions and an infinite number of ways to implement those actions. Therefore, a manageable set of the most attractive alternative strategies must be developed with the help of this three stage framework.
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STAGE: 1
INPUT STAGE
This stage summarizes the basic input information needed to formulate strategies. It consists of three matrices which is shown by the diagram:
INPUT STAGE
STAGE: 2
Matching Stage
This stage focuses upon generating feasible alternative Strategies by Aligning key external and internal factors.
Matching Stage
SWOT
InternalExternal Matrix
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STAGE: 3
Decision Stage
This stage involves the single technique, the Quantitative Strategic Planning Matrix (QSPM). A QSPM uses input information from Stage 1 to objectively evaluate feasible alternative strategies identified in Stage 2. A QSPM reveals the relative attractiveness of alternative strategies and thus provide objective basis for selecting specific strategies.
Decision Stage
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INPUT STAGE
INTERNAL FACTOR EVALUATION MATRIX
Internal Factor Evaluation (IFE) matrix is a strategic management tool for auditing or evaluating major strengths and weaknesses in functional areas of a business. IFE matrix also provides a basis for identifying and evaluating relationships among those areas. The Internal Factor Evaluation matrix or short IFE matrix is used in strategy formulation.
WEIGHT
RATING
WEIGHTED SCORE .36 .18 .27 .21 .20 .36 .22 .09 .10 .08 .20 .22 2.49
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Strong financial position Growth and expansion Specialized training for employees Extensive domestic and overseas branch network Wide range of products and services Customer loyalty and trust
INTERNAL WEAKNESSES
.09 .06 .09 .07 .10 .09 .11 .09 .05 .04 .10 .11 1
4 3 3 3 2 4 2 1 2 2 2 2
Limited no. of employees Lack of standardized performance evaluation and hiring system Political pressures because of being a public sector bank Limited support for innovation and creativity Weak customer service Limited technological advancement TOTAL
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This assessment of Internal Factors indicates that National Bank of Pakistan (NBP) is about average in using its internal strengths to off set their weaknesses. NBP is having some success in controlling their internal operations relative to responding to their weaknesses. However, they should not be satisfied with being average in this highly competitive business environment. The goal is to establish a competitive advantage over other firms, and they have plenty of room for improvement. NBP needs to identify ways to improve their operations to gain this competitive advantage. Again, the IFE assessment is not an exact science and the exercising of good judgment is essential. It appears from the IFE analysis that NBP should try to improve their ability to respond to the internal environment. However, NBP should strive to be effective in both the external and internal environments. These tools are only one of much analysis to be conducted to identify an appropriate course of action. This analysis is a starting place rather than end. This is to be the fact finding stage, the Input stage, which will lead to the development of alternative strategies, the Matching stage.
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WEIGHT RATING
Growth opportunities for banking industry. Technological advancements like on-line banking, ATMs, Mobile phone banking facilities Innovative products like credit cards, debit cards, smart cards, various types of loans and advances.
THREATS 1
.14
.20
.60
.18
.54
Increased competition from numerous private commercial banks. Economic recession. Wide range of versatile products and services from competitors. TOTAL
.20
.40
2 3
.13 .15
2 2
.26 .30
2.38
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This assessment of the External Factors reveals that National Bank of Pakistan is below the industry average in responding to the external environment. They should begin to prepare a strategy to better defend the firm against external threats present in the business environment and try to identify ways to take advantage of opportunities because there is large competition in banking sectors due to entrants of many Private banks. However, EFE is basically a tool for strategists to use to help develop an appropriate course of action. It appears from the EFE and IFE analysis that NBP should try to improve their ability to respond to the external environment. However, NBP should strive to be effective in both the external and internal environments. These tools are only one of many analyses to be conducted to identify an appropriate course of action. This analysis is a starting place rather than end. This is to be the fact finding stage, the Input stage that will lead to the development of alternative strategies, the Matching stage. To make this EFE and IFE a more valuable assessment, it needs to be brought to the next stage, the TOWS analysis.
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HABIB BANK
BANK ALFALAH
Financial Position 0.06 Global Expansion 0.09 Inventory System 0.08 Management Experience Market Share Organizational structure Price Competitiveness Product Quality Production capacity TOTAL
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MATCHING STAGE
1) Strengths, Weaknesses, Opportunities, Threats (SWOT)
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The SPACE Matrix analysis functions upon two internal and two external strategic dimensions in order to determine the organization's strategic posture in the industry. The SPACE matrix is based on four areas of analysis. Internal strategic dimensions: Financial strength (FS) Competitive advantage (CA) External strategic dimensions: Environmental stability (ES) Industry strength (IS)
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Product Quality
-1 -1 -3 -2
+6 +4 +5
X- axis
Access to Financing +4
Total X-axis score: 3.00 Financial Strength (FS) Environmental Stability (ES) ( +1 worst , +6 best ) ( -6 worst , -1 best )
ROA
+5 +4 +6 +5
-2 -1 -2 -4
Y- axis
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ANALYSIS:
This particular SPACE matrix tells us that the organization (bank) should pursue an aggressive strategy. The Bank has a strong competitive position in the market with rapid growth. It is in excellent position to use its internal strengths to Take advantage of external opportunities Overcome internal weaknesses Avoid external threats
Recommended Strategies:
Therefore market penetration and market development, this can include product development, integration with other companies, acquisition of competitors, and diversification can also be feasible for the bank.
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Four Categories of BCG Matrix Model: STARS (high growth, high market share)
- Stars are defined by having high market share in a growing market. - Stars are the leaders in the business but still need a lot of support for promotion a placement. - If market share is kept, Stars are likely to grow into cash cows.
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Segments
%age Sales
Profit
%age Profit
Corporate Finance Trading & Sales Retail Banking Commercial Banking Payment & settlement Agency Services Total
0.60%
322,389
1.40%
68%
50%
14,472,033
27%
13,074,776
57%
60%
15.3%
13,114,628
25%
3,555,802
15.5%
87%
-5.8%
20,687,687
39%
5,060,790
22%
75%
63%
1,712,732
3.2%
900,957
3.9%
50%
11.3%
3,161,901
6%
83,285
0.36%
53,473,892
100%
22,997,999
100%
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0%
10 0 -10 -20 -30 -40 -50 -60 -70 CASH COWS DOGS
100%
50%
0%
SIZE of the Circle shows % age Sales Highlighted portion of the circle shows the %age profit.
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While all other segment lies in Stars Quadrant which shows that they have high relative market share and a high industry growth rate should receive substantial investment to maintain or strengthen their dominant positions.
Recommended Strategies:
Forward, backward and horizontal integration, Market penetration, Market development and product Development are appropriate strategies for these segments to consider.
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GENERAL 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 a view to streamline the approach and underlying procedure for effective 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. 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 should be 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 responsibility.
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Performance Appraisal
The manager should strictly monitor the performance of every staff member. 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.
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.
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.
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Technological Advancement
I would like to suggest that at least all the main branches of NBP should be fully computerized in order to expedite the dealing process among bankers and their customers. Every department should be provided a computer with adequate training (especially Advances, Deposits and Foreign Exchange departments). Daily records should be entered directly into these computers, (instead entering the overall daily transactions after the banking hours). It will not only reduce transaction time, will increase accuracy but will also be efficient as well. Not only it will be economical but will also reduce the extra burden of work of the bank. It will also help in reducing the use of excessive paper work.
Marketing Policy
The branch should adopt various marketing strategy and promotion strategy to promote the bank and its product.They should do more advertising through newspaper and media and through channel of personal contacts.
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Internal Factor Evaluation External Factor Evaluation Competitive Profile Matrix Strengths, Weaknesses, Opportunities, Threats Strategic Position and Action Evaluation Matrix Boston Consulting Group Quantitative Strategic Planning Matrix
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