Professional Documents
Culture Documents
Executive summary 04
Mission statement 05
Vision 07
Senior Management 09
Overseas Branches 12
Domestic Branches 13
NBP loan 15
Services 17
Investments 20
Deposit products 23
Exchange rates 25
SWOT analysis 27
Performance analysis 30
Comparative analysis 36
Bank charges 38
Bibliography 68
1. Executive Summary
This report is based on internship in National Bank of Pakistan branch name. It is a
famous and reputed bank of Pakistan. National Bank of Pakistan maintains first position
in banking sector in Pakistan. This report is based on the activities which are performed
in this bank. This report contains marketing analysis, competitive analysis, SWOT
analysis, bank tariffs and exchange rates of National Bank of Pakistan. There are also
stated the activities which I performed during my internship in the branch. In this report
also discuss the industry analysis of banking system in Pakistan. There are also
mentioned the way of investment, rates of investment, all types of financing and loans
facilities the National Bank of Pakistan provides. The problems in this branch are also
discussed. This report also intimates about the daily reserves which are required by the
branch to meet the need of its daily transactions.
2.1. Mission Statement
2.2. Core Values
•Practice integrity, honesty and hard work. We believe that these are
measures of true success.
2.3. Vision
Masood Karim Shaikh SEVP & Group Chief, Corporate & Investment Banking Group
Shahid Anwar Khan SEVP & Group Chief, Commercial & Retail Banking Group
Muhammad Sardar Khawaja SEVP & Group Chief, Audit & Inspection Group
S. M. Rafique SEVP & Secretary Board of Directors
Ziaullah Khan SEVP & Group Chief, Special Assets Management Group
Muhammad Nusrat Vohra EVP & Group Chief, Treasury Management Group
Dr. Mirza Abrar Baig EVP & Group Chief, Human Resources Management &
Administration Group
Mrs. Khurshid Maqsood Ali EVP & Divisional Head Employee Benefits,
Disbursements & Trustee Division
Tahir Yaqoob EVP & Group Chief, overseas Coordination & Management Group
Mrs. Uzma Bashir Group Chief, Organization Development & Training Group
Syed Farhan Ahmed Financial Controller & Divisional Head Financial Control Division
The board is fully aware of its responsibilities established by the Code of Corporate
Governance issued by the Securities & Exchange Commission of Pakistan (SECP). They
are pleased to give the following declarations/statements to comply with the requirements
of the Code.
1. The financial statements (Balance sheet, Profit and Loss Account, Cash
Flow Statement, Statement of Changes in Equity and notes forming part
thereof), prepared by the management of the bank give the information
required by the Companies Ordinance, 1984 in the manner so required and
respectively give a true and fair view of the state of the bank's affairs as at
December 31, 2002 and of the results of its operations, changes in equity
and its cash flows for the year then ended.
The process used by the Board to review the efficiency and effectiveness of the system of
internal control includes, the following:
• Internal audit department of the bank conducts the audit of all branches,
regions and groups at head office level on ongoing basis to evaluate the
efficiency and effectiveness of internal control system and proper follow
up of irregularities and control weaknesses is carried out.
The bank has a comprehensive framework of written policies and procedures on all major
areas of operations such as Credit, Treasury Operations, Finance, Internal audit and
Compliance approved by the Board.
• There has been no material! Departure from the best practices of the
corporate governance as detailed in the listing regulations.
• The number of board meetings held during the year were 14 and
attended by the directors as follows:
Kamran Y. Mirza 8
A. Razzak Tabba 12
Rizwan A. Kehar 12
16 Overseas Branches
4 Representative Offices
1 Subsidiary
1 Joint Venture
29 Regional Offices
1,189 Branches
130 Online Branches
4 Subsidiaries
USA
Canada
Germany
France
Hong Kong
Japan
South Korea
China
Bahrain
Egypt
Bangladesh
EPZ
Afghanistan
Turkmenistan
Kyrgyz Republic
Kazakhstan
Uzbekistan
Azerbaijan
2.7.1.Sind
Dadu/ Sanghar
Hyderabad
Jacobabad/ Shikarpur
Karachi
Larkana
Mirpurkhas/ Badin
Sukkur/ Khairpur
Tharparkar
2.7.2. Punjab
Bahawalpur
D.G. Khan/ RYKhan
Faisalabad
Gujranwala
Sialkot/ Narowal
Islamabad
Jhang
Lahore
Multan/ Baha'nagar
Rawalpindi
Sahiwal
Sargodha/ Sheikhupura
2.7.3. NWFP
Abbottabad/ Mansehra
Kohat / Mingora
Mardan
Peshawar
2.7.4. Baluchistan
All Branches
Muzaffarabad
Mirpur
Pursuant to the announcement made by the Federal Finance Minister in his 2001-2002
budget speech, a STUDENTS LOAN SCHEME (SLS) for Education was launched by
the Government of Pakistan in collaboration with major commercial banks of Pakistan
(NBP, HBL, UBL, MCB and ABL). Under the Scheme, financial assistance is provided
by way of Interest Free Loans to the meritorious students who have financial constraints
for pursuing their studies in Scientific, Technical and Professional education within
Pakistan.
• The objective of the Students Loan Scheme is to provide financial assistance to the
meritorious students of insufficient means who have obtained 70% marks in the last
public examination and are unable to pursue their studies within Pakistan due to financial
difficulties.
• Loans facility is available to those students who are nationals of Pakistan including
Northern Areas, Federally Administered Tribal Areas and Azad Jammu and Kashmir and
of age not exceeding 20 years for graduation, 30 years for post-graduation and 35 years
for PhD at the time of admission.
• The maximum period of repayment of loan is 10-Years from the date of disbursement
of first installment .The borrower shall repay the loan in monthly installment after six
months from the date of first employment or one year from the date of completion of
studies, which ever is earlier
• Loan is granted only to those students who have been admitted to the approved under
noted Affiliated Colleges /Universities.
Engineering
Electronics
Agriculture
Medicine
Physics
Chemistry
Mathematics
Commerce
• The facility under this Scheme is restricted to the studies in the above-mentioned
subjects only or such other subjects as may be approved by the Apex Committee from
time to time.
• The amount of loans under the Scheme covers the cost of fee, books and boarding for
the entire period of study.
• Schedule Fee and boarding expenses excluding meal charges is disbursed directly to the
University/College.
• The amount of procurement of textbooks is disbursed directly to the student.
• The students desirous of availing loan under the Scheme may apply on prescribed Form
for financial assistance subject to he or she has got admission on merit through normal
procedure in the Universities/ Colleges afore-mentioned.
• Those students who have already availed this facility last year need not to apply.
3. SERVICES
3.1.
DEMAND DRAFTS
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.
The SWIFT system (Society for Worldwide Inter bank 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 needs.
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 their 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.
3.4.1. Negotiability:
3.4.2. Validity:
3.4.3. Availability:
3.4.4. Encashment:
3.4.5. Limitation:
No limit on purchase
3.4.6. Safety:
NBP Traveler’s Cheques are the safest way to carry our money
NBP provides another reason to transfer customer’s money using their facilities. Their
pay orders are a secure and easy way to move customer’s money from one place to
another. And, as usual, their charges for this service are extremely competitive.
Move your money safely and quickly using NBP Mail Transfer service. And they also
offer the most competitive rates in the market.
To facilitate its customers in the area of Home Remittances, National Bank of Pakistan
has taken a number of measures to:
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
Pakistan International Bank (UK) Ltd., and Bank Al-Jazira, Saudi Arabia.
Slab Rate
Rs.100 Million & above but below Rs. 250 Million 1.50 %
Rs.250 Million & above but below Rs. 500 Million 1.75 %
Rs.500 Million & above but below Rs. 1000 Million 2.00 %
Rs.1000 Million & above but below Rs. 2000 Million 2.25 %
Rs.2000 Million & above but below Rs. 5000 Million 2.50 %
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 provides Agricultural Finance to solidify faith, commitment and pride of farmers
who produce some of the best agricultural products in the World.
“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:
• Watercourse improvement
• Wells
• Farm power
• Fencing
• Solar energy
Farm Credit:
NBP also provides the following subsidized with ranges of 3 months to 1 year on a
renewal basis.
• Operating loans
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.
NBP provides financing for its clients’ capital expenditure and other long-term
investment needs. By sharing the risk associated with such long-term investments, NBP
expedites clients’ attempt to upgrade and expand their operation thereby making possible
the fulfillment of their clients’ vision. This type of long term financing proves the bank’s
belief in its client's capabilities, and its commitment to the country.
National Bank’s leadership in loan syndicating stems from ability to forge strong
relationships not only with borrowers but also with bank investors. Because they
understand their syndicate partners’ asset criteria, they help borrowers meet substantial
financing needs by enabling them to reach the banks most interested in lending to their
particular industry, geographic location and structure through syndicated debt offerings.
Their syndication capabilities are complemented by their own capital strength and by
industry teams, who bring specialized knowledge to the structure of a transaction.
With National Bank’s Cash Management Services (in process of being set up), the
customer’s sales collection will be channeled through vast network of NBP branched
spread across the country. This will enable the customer to manage their company’s total
financial position right from your desktop computer. They will also be able to take
advantage of NBP outstanding range of payment, ejection, liquidity and investment
services. In fact, with NBP, you’ll be provided everything, which takes to manage your
cash flow more accurately.
Rate Sheet
September 1, 2006
U.S.A 59.85 59.65 59.53 Rates for Currency Notes & TCs
SINGAPORE 35.73 35.61 35.52 Libor for Calculating Interest on Special USD Bonds
CHINA 7.41 7.39 7.37 For 3 Months & Over but Less then 6 Months
3.15.1. Strengths
National Bank of Pakistan is only one bank which has the facility of Western union. In
this particular scheme money is transfer in Pakistan from abroad. This is the fastest way
to money transfer. You can receive the money from bank to see the name and password
of particular client.
ATM finder:
There is also strength of NBP that they are found the ATM. They now provide this
facility to the customers.
Government’s bank:
In commercial banking system NBP is only the government bank. They make their
policies according to the government’s rules and regulations. It enjoys its position in the
market of banking system in Pakistan. Government of Pakistan also facilitating the
National Bank of Pakistan.
Customer satisfaction:
Online banking:
There 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.
Employee’s loyalty:
Employees are very much loyal to NBP. Employee’s turnover is very low in NBP. Very
few employees are leaving the jobs in NBP. So it is very big strength that your employees
are loyal to your organization.
They provide the wide area of services. They offer no. Of services relating to the banking
system like, pension to retired government employees, traffic challans, fees received of
AIOU, farms of AIOU, utilities bills, deposits, sales tax , withholding tax, property tax,
and various loan schemes.
3.15.2. Weakness
During the internship in NBP I found the problem of lack of communication between the
employees and management. They have not very much understanding with each other
and not share the work of each other.
Public respect is not very effective in NBP. Employees are not taking care of the
customers, especially in pension and bills department.
Staff shortage:
There is also weak point for NBP that staff is very short and more staff is required to
meet the needs of the branch work. They help from internees.
They are not a healthy sign for NBP that respect of seniors is not up to the manners.
Juniors try to avoid the seniors and no take the help from them.
3.15.3. Opportunities
Nowadays banking system is growing quickly so NBP have opportunities to improve the
standard and get the more share in the market.
In growing era there is a chance for NBP to improve itself and increase the shares in the
market because it is most trustable due to government’s bank.
The economic activities are increase nowadays, so banks are contributes more in
economic activities. Banks are played role in trade and commerce. So the business of
commercial banks is increase.
3.15.4. Threats
Increase in no. of banks is a threat for National Bank of Pakistan. No. of private banks
(commercial and private) are operating their business and provide the same facilities. So
increase in no. of banks is a threat for NBP.
Modern type of banking:
NBP have wide network of branches. Only 130 branches are online, so it is very difficult
and time consumed to convert all branches to online system. So there is also risk involves
that if one commuter of one branch suffers in problem, all system and all commuters of
all branches must be turnoff.
4. Performance Analysis
4.1. Financial Performance
In 2002, NBP increased its pre-tax profit to Rs. 6,045 million from Rs. 3,016 million in
2001, an increase of over 100%. The improved profitability was achieved due to a
combination of higher interest revenue, enhanced fee income and run off of the
amortization of the 1997 Golden Handshake Scheme. Prudent addition to loan loss
reserves was made which continues to improve the cash coverage for non-performing
loans.
All key financial and operating ratios demonstrated improvement. Cost/ income ratio was
0.44 (excluding one off provision of Rs. 832 million for benevolent fund and Rs. 513
million for charge for special separation package) as against 0.52 of the last year. Pre-tax
return on equity was 45.27% as compared to 25.85% of the current year and is impressive
by any yardstick. Pre-tax return on assets improved to 1.43% as against 0.77% of last
year. Capital adequacy ratio of the bank is 14.5%, which is 38% higher as compared to
10.52% of last year.
Deposits of the bank increased by Rs. 12 billion. While there was increase in private
sector loans due to adjustment / repayment of loans by large public sector entities and
substantially lower commodity operations borrowings, advances decreased by Rs. 30
billion.
Banking is one of the most sensitive businesses all over the world. Banks play
very important role in the economy of a country and Pakistan is no exemption.
Banks are custodian to the assets of the general masses. The banking sector plays
a significant role in a contemporary world of money and economy. It influences
and facilitates many different but integrated economic activities like resources
mobilization, poverty elimination, production and distribution of public finance. It
is purchase of car or building of a home banks are always they’re to serve you
better. It is play ground or any educational or healthy societal activities the money
of banks nurtures them. It is an industrial project or agricultural development of
the country the sponsor-ship of banks is very much involved. Banks play very
positive and important role in the overall economic development of the country.
The era of nineties was the climax of privatization, deregulation and restructuring
in the domestic banking industry and financial institutions. The Muslim
Commercial Bank was the first bank to privatize. Followed by Allied Bank
limited, United Bank Limited and now the Habib Bank Limited have been
privatized. One thing good for that particular period was the recruitment of fresh
officers in the domestic banking industry through well-organized policies of
Banking Council. With the decay of Banking Council there was flood of
insincere, nonprofessional, incompetent candidates directly appointed/ recruited
in all the domestic banks of the country.
The government of Pakistan permitted small private sector banks to operate, which
indulged in doubtful policies to promote business. The public sector banking, which
constituted the backbone, thus continued to suffer because of their approach, size and
carried over liabilities. Mehran Bank is the prime example of that kind of lax banking in
the country, which ultimately merged into National bank of Pakistan i.e. last resort of
domestic banking industry.
In the meanwhile, western banks started entering into the business. They, with the
support of ruling elite, concentrated on the big business, leaving the routine business to
the local banks. This reduced the profitability of the local banks.
There are 17 listed banks in Pakistan 2004. Four banks are still not listed, which are
Habib Bank, United Bank, Allied Bank of Pakistan, Dawood Bank. Standard Chartered
Bank, Citibank, Deutsche Bank and ABN AMRO Bank are main foreign banks in the
country. These four banks continue to enjoy a significant share in the market, both in
terms of deposits and advances. All the foreign banks of the country are busy to invest
heavily in the field technology and e-commerce in order to overcome branch limitation.
All the foreign banks have been busy to introduce new products and idea to grab larger
proportion of the local markets. Foreign banks are carrying major proportion of local
business in credit cards, consumer finances and housing finance.
Many domestic banks have increased their general standards. Ours is the age of plastic
money. Internet-based services are constantly increasing the number of ATM machines,
either by installing their own machines or making arrangements with other networks. The
number of Debit Cards has also been increasing at an unprecedented rate.
All the domestic and foreign banks vigorously institutionalized consumer financing in the
country and earned handsome profits. The borrowing to private sector has also increased
which ultimately boasted the profitability of all the domestic banks of the country. In the
last 3 to 4 years many domestic banks have been suffering from surplus liquidity crisis
mainly due to low demand for credit and slowdown of manufacturing sector in the
country. Almost all the banks are now buy to invest in capital markets to increase their
exposure in equities. To stop that risky trend the State Bank of Pakistan issued the
instructions to follow the Prudential Regulations in letter and spirit and not invest in the
capital markets beyond the limits. The domestic bank’s lending under consumer finance
and housing finance has also been growing. The analysis of Annual Reports of banks
shows that their income from core banking activities has been growing. The other
positive point is that there are growing expectations for increase in interest rates.
The growth in advances has started matching growth in deposits. The quality of asset as
well liability products have been improving. The ratios of non-performing loans have
decreased. The SBP29 Scheme has benefited the banks as well as the borrowers to pay-
off their long-standing dues. Bank Alfalah is the first to opt for the listing policy of the
government and also offered its share to general public. Two of the state-owned banks,
Habib Bank and United Bank, have been privatized.
Allied Bank of Pakistan was privatized in early nineties. But due to many internal and
external reasons it continues to suffer. Some meaningful senior managerial changes
would be better at the earliest. Dawood Bank has recently emerged on the banking
scenario of Pakistan and it is good addition. The bank has come into existence as a result
of acquisition of Pakistan operations of a Sri Lankan bank by a local business group. It is
also not listed at the local stock exchanges. Meezan Bank is the first bank of the country,
which is carrying complete Islamic banking.
(Rs. million)
For the second consecutive year, NBP was recognized as the best bank in Pakistan by the
prestigious periodical, “The Banker" UK (a subsidiary of Financial Times Group).
Furthermore M/s JCR-VIS Credit Rating Company Limited maintained its rating of
AAA, while the standalone rating was raised by one notch to AA-, which is one of the
highest in the banking sector.
The reduction in the interest rate environment will overall have a negative impact on the
financial sector's profitability in the short term. To meet these challenges we will focus
on building our loan portfolio, both on corporate and retail side. On the retail side focus
will be on additional fee business while maintaining stringent controls over cost. Longer
term we will be focusing on those sectors in the country, which have traditionally
received less attention from the financial sector, i.e. agriculture, small and medium
enterprises and of the entire range of retail products. Our key strength remains our
customer base of over 9 million and we are confident that we are positioned to capitalize
on the opportunities.
5. BANK CHARGES EFFECTIVE FROM 01.01.2006
ANNUAL VOLUME
a. Opening of cash Letters of Credit. a. Upto Rs.20 (M) 0.40% 0.20% Rs.1, 000/-
Note.
2. L/C commission for the increased liability should also be recovered for un-expired L/C
period. In case, liability increases (due to exchange rate fluctuation) by virtue of
providing forward cover to the customer after opening of L/C.
b. Revalidation Commission.
c. Transfer Commission.
d. Approval from SBP for re-import of Consignment back to Pakistan. Rs.2, 000/-
(Flat) per case.
e. L/C Cancellation Charges Rs.1, 000/- (Flat) Plus actual telex charges
b. L/C under Suppliers/Buyers Credit, “Pay as you Earn Scheme” and Deferred payment
L/Cs for period of one year.
Commission @ 0.40% per quarter or part thereof (at the time of opening of L/C, it is to
be charged on full amount of L/C liability plus interest payable thereon for the period
from the date of opening of L/C till the expiry of L/C, thereafter commission is to be
recovered on six monthly basis on outstanding/reducing liability as per revised Schedule
of Charges applicable on that date.) In case forward cover is provided against L/C under
Suppliers/Buyers Credit, L/C commission should be recovered at booking rate for which
liability voucher is to be passed. This is due to the fact that exchange fee is being
recovered in advance.
iii. If bills are to be drawn at a Usance under the above Letter of Credit other than
PAYEES And Suppliers/Buyers Credit and deferred payment Letters of Credit on yearly
basis.
Amendments.
Rs.750/- per transaction (Flat) or commission under item (I.-a) or (ii-a) Pg-1, if
amendment involves increase in amount or extension period of shipment.
iv. Issuance of Standby Letters of Credit (i.e.) beneficiaries in foreign countries) directly
or through correspondent bank/bank’s foreign branches/offices.
Amendments.
V. a. For providing certified photocopies/ transfer of Category Pass Book. Rs.1, 000/-
(Flat)
a. 45 Paisas per Rs.1,000/- (or as per Sanction Advice) on daily products from the date of
reimbursement till the date of retirement.
3. If retired during next 15 25 Paisas per Rs.100/- days after the period on purchase price
mentioned (1) & (2) above.
4. If retired during next 35 Paisas per Rs.100/- 190 days after the period on purchase
price mentioned at (1) (2) and
NOTE.
1. The Branches in their notice to Importers will indicate the sale price (Marked-up) by
adding Rs.11.50 for each Rs.100/- or part thereof and will recover mark-up from the date
of reimbursement to the date of retirement of the bill by the client by applying the Slab of
rates as per clause (VI) above.
2. Benefit of cash margin recovered at the time of opening of L/C will be given to the
3. No mark-up will be charged from the date of reimbursement till the date of lodgment
of documents received under Import L/Cs where the amount as per reimbursement
arrangement is made to the negotiating bank only on receipt of the documents.
6. Bank reserves the right to change the mark-up rate on case to case basis.
vii. Import Bills returned unpaid. Handling charges US$ 50/- (Flat) from Forwarding
Bank plus Courier charges if any.
Viii.
a. Collection Rs.750/- (Flat) per collection provided no charges are realized from the
correspondent.
b. Consignments. 0.20% (Flat) handling charges at the time of registration of contract/
purchase order/ Performa invoice Minimum Rs.500/-
c. Import against advance payment to suppliers. Rs.750/- (Flat) plus usual remittance
charges.
5.1.2. EXPORTS
iii. If the documents are sent to other banks for negotiation under restricted Letter of
Credit. Rs.350/-(Flat)
iv. Collection.
b. Documentary (on which bank do not earn any exchange difference). Rs.200/- per
Collection (Flat) v. a. Duty draw back claims. 0.25% of the amount of claim Minimum
Rs.250/- per claim.
Note.
vii. Service Charges against export documents sent on collection basis where payment
cover is already received to our Foreign Currency Account. @ Paisas 10% or Re.1/- per
mille.
5.1.3. REMITTANCES.
(i) OUTWARD
a. Foreign Traveller Cheques. 1% of the amount of Traveller Cheques sold Min. Rs.200/-
b. i. Remittance abroad through Foreign Currency Account. Commission @ US$ 1.00 per
US$ 1,000/- or part thereof Min. US$ 5.00 Maximum US$ 25.00 plus telex charges
Rs.250/- per telex in case of telegraphic transfer.
ii. Remittance against surrender of F.C Notes or cash deposited in F.C Account within 10
days from the date of such deposits.
Note:- Service Charges @ 1.0% to be recovered from the customers in case cash
deposited in FC Account is encashed /converted into Pak Rupees within 10 days from the
date of such deposit . In addition to mentioned under b (i ) above service charges @ 1.0%
to be recovered in case the remittance amount exceeds US$ 5,000/- or its equivalent in
other foreign currencies.
a. Students (for education purposes). Rs.50/- plus telex charges Rs.200/- per telex if
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 as prescribed.
d. Service Charges against issuance of Foreign Mail Transfers (FMTs) Foreign Demand
Drafts (FDDs) Foreign Telegraphic Transfer (FTT) & Travellers Cheques (TCs) against
Pak Rupee. @ Paisas 10 % or Re.1/- per mille.
e. FDD/FTT/FMT Cancellation Charges for foreign currency account. Rs.200/- per item
plus telex/postage charges
C. (ii) I N W A R D
b. Others. Nil, if proceeds are credited to an account with the drawee bank. In other case
a flat
Charges of Rs.10/-
5.1.4. MISCELLANEOUS.
i. Postage/Cable/Fax/Courier
b. Postage (Registered) Local Rs.30/- Inland Rs.50/- Foreign Postage at actual Min.
Rs.100/-
d. Telex /Fax/Telephone/Swift Local Rs.20/- Inland Rs.25/- per minute Min. Rs.50/-
Foreign: - . Full Telex 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
ii. Foreign Bills sent for collections returned unpaid Rs.350/- (Flat) plus telegram charges
if any.
iii. Inward Collection received (relating to F.C Account) from abroad or local
banks/branches and where the payment is demanded in Foreign Currency. US$ 3.00 per
US$ 1,000/- or part thereof Minimum US$ 3.00 Maximum US$ 6.00
iv. Inward cheques expressed in foreign currency drawn on foreign currency A/cs
received from local/upcountry bank’s branches for payment in Pak Rupees after
conversion at authorized dealers buying T.T clean rates. Commission @ Paisas 15 per Rs,
100/- Minimum Rs.200/-
v. Issuance of proceeds certificate beyond one year. Rs.500/- (Flat) per certificate.
vi. Issuance of Business Performance certificate at customer’s request. Rs.500/- (Flat) per
certificate.
vii. Standing Instruction Charges in Foreign Currency Accounts. US$ 5.00 per instruction
5.2.1. REMITTANCES.
d. Courier Charges. Actual Minimum Rs.30/- if sent by Registered post locally, Rs.50/- if
sent by Registered post Inland on party’s request. Local Rs.50/- Inland Rs.75/-
2. For non-account holder Rs.100/-(Flat) Rs.25/- (Flat) from student for payment of fee
favoring educational institution
Iv. Inland Travellers Cheque. (Other than NBP if any) 0.25% Minimum Rs.25/-
Annual Business
a. Amendment Charges.
Note: Charges negotiable on case to case basis under approval of Business Group
5.2.4. BILLS.
i. Collection:-
ii. For NBP own cheques/DD/PO 0.20% Minimum Rs.50/- plus postage/courier charges
as mentioned above.
NOTE:
No commission should be charged on out station cheques, drawn on places where there is
an office of the bank, which are received from Government Departments for credit to
Government Account. This waiver does not applied to outstation cheques tendered by the
PUBLIC in payment of Government dues upon which the Bank’s usual charges should be
levied. As per Zakat & Ushr Ordinance 1980, (Amended in 1997) banking services and
services connected with the assessment collection or disbursement of Zakat & Ushr
realizable on compulsory basis under this ordinance are to be rendered free of charge.
Hence no collection charges shall be recovered on cheques drawn on Central Zakat Fund
for crediting to account of their beneficiary. 0.15% Minimum Rs.50/- plus applicable
postage/courier.
b. Clean Bills (trade cheques, bank draft etc.) a. 0.25% Minimum Rs.50/- plus applicable
NOTE:
ii. Collection of cheque of small amount may be effected through normal dak (other than
Courier) if specially requested by the party in writing for which he will be responsible for
the delay.
NOTE:
i. Collecting agent’s charges if the Collecting bank’s is other than the Bank will be extra.
ii. Telegram/Trunk Call Charges will be Extra, if fate of the instruments is asked for by
telegram.
c. Returning Charges for Documentary & Clean Collections, in case the instruments are
returned unpaid. Rs.100/- + Courier Charges as above (Documentary) Rs.100/- + Courier
Charges as above (Clean).
e. Storage Charges. i. No Charges, if cleared within 3 days of its receipt by the branch.
1. SIGHT BILLS.
c. Collection Charges for restricted L/C (where Negotiation is restricted to some other
Banks and presented to us for forwarding). Rs.500/- (Flat)
i. If retired within 3 days from the date of lodgment Mark-up @ 45 Paisas per Rs.1, 000/-
on daily product from the date of negotiation.
ii. If retired after 3 days of lodgment Mark-up @ 45 Paisas per Rs.1, 000/- on daily
product plus Banks Commission @ 0.25%
NOTE.
No mark-up will be charged from the date of negotiation till the date of lodgment of
documents received under Inland L/Cs where the payment as per reimbursement
arrangement is made to the negotiating bank only on receipt of documents.
Forwarding Bank/Branch would charge handling charges of Rs.200/- (Flat) per bill
(commission will not be applicable).
2 USANCE BILLS
At opening end.
a. Handling Charges. Rs.0.40% per bill Minimum Rs.500/- at the time of retirement of
bill.
b. If bills matures after expiry of L/C. Usual Charges as in (a) above plus delivery of
documents against acceptance commission @ 0.10% per month on bill amount on
realization from the date of expiry of L/C but Minimum Rs.500/-
c. Discounting of Inland Usance Bills. Markup @ 25 paisa per Rs.1000/- on daily product
(or as per Sanction Advice) plus flat Commission @ 0.1%.
3. At collecting end.
b. In case of purchase. 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.
NOTE
All other charges as per quote (i) & (ii) and (c) above wherever applicable will be extra.
(Non-refundable)
At actual, in addition:
Funded Both)
NOTE:
4-a. Redemption of charge fee to be recovered from party when bank officers are called
c. Registration of charge at Registrar Office with SECP. Actual + Rs.2, 000/- per case.
Debit to party account if Godown inspection charges are up to Rs.500/- for payment to
staff.
Debit to party and credit to bank income account if inspection charges are more than
Rs.500/- and reimbursement of TA/DA charges through debit to “Expenditure Account”
with the approval of competent authority.
NOTE.
Inspection of Godown by Regional/ Head Office Auditors/External Auditors and
occasional surprise checking by Regional Headquarters etc. No such charges will be
recovered from the parties as it is a part of normal bank duty.
At actual
f. Handling charges on marking of lien on Govt. Securities Rs.500/- (Flat) per customer
g. Marking of lien on Securities issued by NBP for other banks Rs.500/- (Flat) per
customer
NOTE:
While recovering the miscellaneous Charges like godown rent, godown staff salary, and
inspection charges the amount recovered from the borrowers shall not exceed the total
rent of godown, salary of the godown staff etc. In other word miscellaneous charges
should be levied as per actual and not become a source of profit to the bank. However,
reimbursement of actual conveyance charges to be made to concerned staff to the debit of
Expenses Account after proper approval of the competent authority.
ii. Shares & Securities held in safe custody as a result of order of purchase executed
through the bank (to be recovered up front) Rs.0.50% (Flat) per annum or part thereof of
the face value with the minimum of Rs.300/-
NOTE
a. The above charges is in addition to brokerage.
c. When orders for purchase or sale of shares/ securities are executed through the banks,
other offices, all incidental expenses such as postage, insurance charges etc., incurred will
be recovered in addition to the commission / brokerage charges.
iii. Withdrawal fee on shares and securities held in safe custody (to be recovered at the
time of withdrawal.)
iv. Withdrawal fee on Government Securities. Rs.10/- per scrip. Where share and/or
securities sold are from those held in safe custody, either commission on sale of shares
and securities as shown against item (I) or withdrawal fees as shown against item (iii)
whichever is higher, will be charged but not both.
Safe Deposit fee (to be recovered in advance at the time of deposit or at the
commencement of each Quarter)
A. For Boxes and Packages. Rs.4/- per 100 cubic inches or any part thereof with a
minimum of Rs.300/- per quarter.
B. For Envelopes. (Contents unknown) Rs.2/- per 25 square inches or any part thereof
with a minimum of Rs.300/-
ix. Safe Deposit Lockers Fee for Safe Deposit lockers (to be recovered in advance or at
the commencement of the period yearly, half yearly, quarterly as the case may be.)
From 2.51 to 3.00 cft Extra- Large Rs.4, 000/- per annum
Key Deposit.
Breaking Charges.
Maximum Custodial charges. Rs.100, 000/- per annum per PIB issue or Rs.8, 333/- per
month.
Face Value Balance in excess of PKR 200 Million PKR 8,333/- per month
Note:
5.2.9. GUARANTEES.
iii. Guarantees issued to Collector of Custom in lieu of payment of Export Duty which
are valid up to 6 months. 0.50% per quarter or part thereof Minimum Rs.1, 000/- (2.00%
per annum).
Commission @ 0.40% per quarter or part thereof (at the time of issuance of L/G it is to
be charged on full amount of L/G liability plus interest payable thereon for the period
from the date of issuance of LG/ till the expiry of L/G thereafter commission is to be
recovered on six monthly basis on outstanding/reducing liability as per revised Schedule
of charges applicable on that date.) In case forward cover is provided against L/G under
Suppliers/Buyers Credit, L/G commission should be recovered at booking rate for which
liability voucher is to be passed. This is due to the fact that exchange fee is being
recovered in advance.
vi. In case of L/G under taking to be issued favoring any bank for providing forward
cover exchange risk under Suppliers/Buyers Credit on behalf of applicant.
vii. Other Guarantees
a. Deposit More than US$ 500,000/- 0.25% per quarter or part thereof Minimum Rs.1,
500/- (1% per annum)
b. Deposit more than US$ 500,000/- up to 5,000,000/- 0.125% per quarter or part thereof
Minimum Rs.1500/- (0.5% per annum).
d. Amendments Rs.300/- per amendment (Flat) or 0.40% per quarter or part thereof if
amendment involves increase in amount of extension in validity Minimum Rs.500/-
NOTE.
1. All Guarantees issued by bank must contain specific amount and expiry date and
commission to be charged from the date of issue till expiry of the L/G up front.
2. If period of Bank Guarantee exceeds one year than commission be recovered on year
to year basis.
3. For calculation purpose a quarter would consist of 3 months starting from the date of
issue of Guarantee (Three calendar months will make one quarter.)
Exemptions:-
The following categories of account holders are exempted from levy of the Service
Charges:
i) Students
v) Ex-NBP employees or their spouses drawing pension/medical from the bank. Rs.50/-
per month w.e.f. 01-02-2004
3. Duplicate statements of account older than one year Rs.50/- per statement of account
6. Stop payment of cheque. Rupee A/c Rs.150/- per instruction. F.C A/c US$ 5/- per
Instruction
5.2.11. EXTRA.
Stop payment charges are to be levied one time for stop payment instructions whether it
is for one or more cheques.
10. Credit information report including credit report on foreign suppliers/buyers. Foreign
correspondent/reporting agencies charges at actual + Tlx. Charges.
11. Registration of contract with SBP in respect of private foreign currency loan obtained
by borrowers in Pakistan from foreign lenders. Handling charges Rs.5, 000/- (Flat.)
14. 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. In case bearer cheque returned on the counter no
such charges will be applicable. Rupee Account 200/- per cheque. F.C Account US$ 5/-
per cheque.
15. Issuance of new cheque book in lieu of lost cheque book (Rupee A/c only). These
Charges are in addition to stop payment charges as prescribed in (4) above. Rs.75/- per
cheque book in rupee Account. US$ 2/- in F.C Account.
16. Issuance of loose cheque. Rs.50/- per cheque Rupee A/c US$ 1/- F.C A/c
17. Account closing charges. Rs.250/- for Local Currency or entire amount if balance in
the account is below Rs.250/- . US$ 5/- for Foreign Currency or entire amount is below
US$ 5/-
18. Issuance of Cheque Book Rs.2.50/- per leaf Mailing Charges for Cheque Book.
Actual.
NOTE.
19. Charges from employer on Salary Disbursement Services. Rs.25/- per salary account
per month.
NOTE:
We can not charge individual accounts under Prudential Regulations. We can however,
charge the employers where they do not maintain sufficient funds or route ancillary
business through our bank. We must charge them for disbursement of salary to their
employees. 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 SWITCH Service. Rs.15/- per transaction Tariff
for Corporate Customers & MNCs With aggregate exposure of over Rs.500/- Million
(Both refunded and non funded) and in case of all MNCs L/C Opening guarantee
issuance and remittance (Funds transfer) charges. As per negotiation with the customer.
5.2.12. WAIVER OF CHARGES FOR CUSTOMERS MAINTAINING MONTHLY
AVERAGE BALANCE OF RS.2.000 (M) AND ABOVE IN CURRENT ACCOUNT
OR RS.5.000 (M) AND ABOVE IN PLS SAVINGS ACCOUNT/NIDA ACCOUNT
A. IMPORT:
a. Cash Letters of Credit Less than Rs.250, 000/- 1/8% (0.125%) of the value of the letter
of
Credit. Rs.250, 000/- and above. 1/16% (0.0625%) of the value of the letter of credit.
NOTE
In addition to above, branches will recover the actual cable/telex/swift charges where
LCs are desired to be established through cable/telex/swift and confirmation charges of
foreign bank’s if foreign bank’s confirmation is also to be added on opener’s request. The
above concessionary rates/charges will apply only to those Letters of Credit which cover
imports by the Government routed through State Bank of Pakistan. In case LC is received
directly from the importing agency, normal charges are to be recovered.
6.Tech Society Branch Lahore
6.1. INTRODUCTION:
It is an old branch of national bank of Pakistan. It is followed the instructions and under
control in regional head quarter (east region). It is called as a big branch which has
required 10 million rupees daily in terms of reserves to meet daily requirement of
transactions. It has following accounts with regional office,
1. general account
2. Suspense Account
3. Commission Account
In public they deal in two accounts i-e.
1. Current Account
2. PLS Account
1. Deposits
2. Advances
3. Pension
4. Foreign Exchange
5. Compliances
6. Bills
7. ATM
9. Locker’s Services
In this branch at time 20 executives are providing service. 2 assistant voce presidents are
serving at this branch. M. Zulfiqar (manager) and Ifzad Butt (Advances officer). In this
year two performance awards get by the branch.
6.2.1. Duties
In my first week in NBP, they assign me worked in pension department. Pension manager
Mr. Muhammad Iqbal trained me very nicely and I learned lot of things in this
department. They give the pension to retired Govt. employees. There are three type of
pensions given,
1= Provincial
2= Central
3= Defence
For example:
I am full trained now in this particular job and I serve 1000 people in this week. How to
fill farm? How to enter in ledgers and balance account and what is file and book and all
other things relating to pension department.
In second week I worked on opening of account. In this week I repeatedly performed this
activity.
In third week they assign me with operation manager Mr. Numan sagheer He handled the
activities relating to the branch; check all the work in the branch. He gave me official
computer. In this week I type and print so many letters for example;
• Statement of account
I also print and type the data of advances department and foreign exchange departments.
Cheques clearing daily sheet is also made by me in this week and I am assisted by the
other officers. I also learn about the reserve of the branch and daily finances need by the
bank and also get some raw information about the opening new accounts.
In fourth week I assign the same task and learn some more complex and major operation
of Sir Numan Sagheer I learn about accounts in which the branch deal with the main and
other branches, these are as follows;
1. General Account
2. Suspense Account
3. Commission Account
4. Exchange Account
In general account the branch debt or credit the other branches of the NBP. Usually they
debit or credit the main branch which transfers the cheques on this. In suspense account
branch expenses are made and at the end of six months period inform and show the
balance to main branch. In commission account bank charges commission against its
services. In exchange account they also earn, so from last two accounts branch receives
earnings from main branch against its services.
Secondly in this week I also learn hoe to open an account in the branch, it is a procedure
and after it bank open an account.
Reconciliation letter
Relieved letter
Joining letter
And at the end I also scroll the challan of Government and pass vouchers.
In first three days of fifth week there are busiest days of pension department so I help the
again pension manager. So first three days serve in this particular task.
In this week I do same job again and print letters, reports, statements and daily clearing
statement of cheques. Also work with Mr. Shafique and from him I learn about opening
an account, payment order and demand draft. Payment order is made to send payment
with in city and draft is made for payment outside the city but inside the country.
S C is that when cheques are coming from outside city for cash and those cheques which
come from branches inside city are sent to clearing house, so I made the statement to
clearing house for clearing cheques.
Monday
On this day I perform the duty on the seat of bills where following work is being done,
Opening an account
Along with this task I also enter the daily post letters in the letter register. This is very
busy task is bank. I help the officer in this seat.
Tuesday
On this day I join the duty with passing cheques of PLS A/C. There are fifty three books
of signatures cards of A/C holders. So I find the A/C in these books and then gave to the
executive officer to verify. In this whole day I perform this particular task.
Wednesday
The day is also as above routine to sit in front of computer, scroll following files,
Income tax
Sales tax
Withholding tax
Provincial
Central
Property traffic
So I also make up these files separately, scroll them sequence and filed these files. Along
with this task type and print the letters, reports and work sheets.
Thursday
Mr. Iqbal assigns me the task to rearrange lockers list and set them in a sequence and
print them on pages. Particular are these,
Name
Address
Amount of rent
Security
Expiry date
Locker no
Key no
Folio no
Friday
On Friday the accounts of holders of expired lockers are checked. Some have balance in
their account but most of them have non in this branch. Rent from those holders how
balances have has been deducted from their accounts through vouchers and to remaining
holders reminding letters have been sent. This is the end of Friday.
During my internship at this particular branch of national bank of Pakistan, there are
following problems I have found which are directly affect on efficiency and performance
of the bank. There problems are also called as an internal problems. So these are
discussing below.
During the period of my internship I found this problem as a biggest problem that, they
are not very effective in communication between themselves. They do not share the
experience with each other and do not care the other employee. If one employee has a
problem, then he asked to other, but he does not give clear solution to that problems.
They are shows the facial expressions against each other. Pension manager and other
employees are always tried to gain cash/performance award and use the references to get
it. They are talk against each other in front of me. So finally it is very needy for a public
services organization to keep atmosphere friendly among the management and
employees. National bank of Pakistan (Tech Society Branch) is lack in communication
skills among the employees.
There is also a big issue that they think its government’s bank so it does not care
customers. It is a wrong perception. There must be a good public dealing in public
service organization. If one customer asked a question twice. They angry on him and stop
working. I personally experienced in pension department. The manager pension (Mr.
Iqbal) have no respect to the old pensioner and he used wrong wording against them
same is also happened in bills executive in bills (Mr. Shafique) is also angry on
Customers, when they asked question twice, so there should be solve this problem to
create a good environment of the NBP.
3. Lack of commitment:
Lack of commitment is also a bib problem faced by the national bank of Pakistan (wahdat
road branch). Employees are not committed to the work and their duties. This is very
common problem.
For example, Rao Ikhlaq not received the letters from last two months. ATM machine is
under Rao Ikhlaq but it is run by operation manager. Mr. Kamran not attached the scroll
at time. Mr. Qamar Zaman going on leave of 3 days but he does not come back even after
3 weeks. So internees are performed duties on his seat. So employees are not very
committed to their jobs and duties. Top management is also not very committed to this
branch. They are not provided employee after transfer of the Rao Ikhlaq. One executive
on leave while other transferred. But not a single executive provide to the branch finally
it is conclude that there is a lack of commitment from employees and top management
also from employees and Top management also.
Efficiency of employees is also low at this branch. For example Mr. Qamar Zaman Aulik
has 10 years experience at national bank of Pakistan but he is not professional even at
single seat in the bank. Where he assign the result is zero. During my internship firstly he
works in advances. He does not sent returns to head office at last dates. 95% of returns
are not sent to the regional head quarter. So he was not too much professional. After this
he assign in passing the cheques but results are same (zero). So for this efficiency is very
low at this branch.
Regularity and punctuality shows the character of a big and good executive. But this
problem is also faced by the NBP (Wahdat road) many executive not come at time.
For example Mr. Saeed compliance officer came 10 A.M. While bank is started at 9AM.
So some other executives are also not coming at time. So there must be solved that
problem by the Top management.
In regional head quarter Mr. Munawir Shah is HRM assistant manager is also come at 10
Am.
Computing skills are also low, some executive are very efficient in computing skills but
some are not totally aware from this system. For example ATM machine at this branch is
only handled to Mr. Imran operation manager. When operation manager is on leave due
to heart patient, ATM machine is off not worked because no body knows to run this
machine. Western Union is not worked effectively. The person who handled western
Union is careless and other employees are not taken interest in tat field. So there is
western Union for just name actually it does not worked.
7. Misuse of resources:
Resource are very needy, so there must be avoid to misuse the resources but in this
branch it is reverse case, there is very wrong use of the resources, employees does not
take care of resources and not used them in right direction. For example wrong printing,
extra printing, after service time Mr. Hasnain at token used telephone almost one to two
hours to take personally outside the bank. So these are the real problems which are faced
by the bank.
Finally it is suggested that if these problems are solved there are much more chances for
increase the performance of NBP. Particularly this branch.
During the internship there is practical knowledge acquired about the banking sector.
What activities are performed by banks and how to deal with public? Also commitment
about work and operations of banks. Financing and credits and other public services are
performed by the banks. What are implementations of banking rules in banking sector?
And much learn about the various executive’s experiences and their skills. What is role of
higher authority (manager) in decision making and how to solve the problems? How
much money or reserves are used to meet the requirements in the branch. What are the
duties of operation manager and how to pay cheques and all procedure relating to
opening account in the banks?
During my internship in this bank, the problem which I faced that was proper training.
They do not provide the proper training to the internees. They assign the intern only few
seats in the bank.
7. Bibliography
7.1. www.nbp.com.pk
7.7. Ch. Muhammad Sharif vice president and former manager in this branch