CHAPTER # 1

INTRODUCTION TO REPORT

1.1 Background of Study

Every business student is required to undergo an internship of at least 6 weeks and then write a

comprehensive report covering all the areas studied. Only then a student can qualify for getting

BBA degree from NUML University. Further it gives a chance to practically apply the concepts

learned during stay with NUML. I did my 8 weeks’ internship in NBP Latifabad # 8 branch.

NBP is one of the leading commercial bank in our country, so I decided NBP for my internship.

1.2 Objective of Study

 To know about banking and its operations and its importance for any economy.

 To learn about the lending activities of financial statement institutions.

 Every activity is not fruitful without some solid objective. This report is also a small

research activity.

 To explore fundamental techniques of credit management and risk management

procedures of a bank.

 To know about the operational products and types of services being offered by a bank.

 To know the HR practices of a bank like how a bank take care of their employees.

1.3 Scope of Work

Bank staff including Branch Manager, Operations Manager, Credit Officers, all provided me the

opportunity to work with them and learn from them. My main focus was on the HR practices, so

I spent more time in leaning about it.

While I was doing my internship in NBP, the methodology I used for the collection of data is

primary as well as secondary data. The biggest source of information is my personal observation

while working with staff and having discussions with them.

1.4.1 Primary Data

The source of collecting primary data includes:

 Personal observations

 Interview with employees

1.4.2 Secondary Data

Methods used in collecting secondary data includes:

 NBP annual reports

 NBP brochures

 NBP manuals

 Newspapers

 Website

1.5 Limitations

During the compilation of my internship report, I faced many difficulties in collecting the recent

and accurate information. There are number of constraints encountered by me. Some of them are

as under:

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 The very limited period of time was available to conduct the detailed analysis, which

caused some difficulties in obtaining adequate information.

 A good amount of information related to the books of account, staff matters and other

confidential matters which may have been otherwise beneficial for me were not provided.

 The bank officials, because of secrecy of the bank matters, did not answer the number of

questions.

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 CHAPTER # 2

INTRODUCTION TO BANKING

2.1 History of Banking

The origin of the word “bank” is not easy to trace. There are different opinions about it. One set

of experts believe that it could have come from Italian words ‘bance’ or ‘bancus’ meaning

“bench” upon which the early bankers sat to conduct their business. The other experts, however,

trace the word to Germanic origin where the word meant “joint stock fund”. In practice the word

“bank” means, which borrow money from one class of people and lends to another class of

people for interest.

It is a difficult task to establish the first starting point of the banking business, but one thing is

clear that the money as means of exchange at the beginning of organized agriculture, industry

and trade gave birth to the banking transaction first and then converted the scattered money

transaction into an organized shape. The conditions needed for the growth of the system are the

development of civilization, its stability and the environment in which the confidence grows and

trade flourishes. The first were the cultures of Sumerians and Babylonians under which the

various activities were quite different in the form and appearances, were introduced in the

banking system.

Mankind has always been seeking security and protection. This need has led him to scientific and

technological development on one hand and banking development on the other. In modern times

4
the banking has become so necessary that if is excluded from any economic system the whole

business and economic world will collapse like house of cards. The Bank of Venice is perhaps

the first ever regular bank in the banking history and was established in 1157 followed by then

Bank of Barcelona in 1401, Bank of Genoa (Italy) in 1407, Bank of Amsterdam in 1609.

The process of financial innovation advanced enormously in the first few decades of the 21st

century, increasing the importance and profitability of nonbank finance. Such profitability

priorly restricted to the non-banking industry, has prompted the Office of the Comptroller of the

Currency (OCC) to encourage banks to explore other financial instruments, diversifying bank’s

business as well as improving banking economic health. Hence, as the distinct financial

instruments are being explored and adopted by both the banking and non-banking industries, the

distinction between different financial institutions is gradually vanishing.

2.2 Functions of Bank

There are different functions performed by different banks. These functions are divided into two

main categories:

 Primary functions

a) Accepting deposits.

b) Granting loans and advances.

 Secondary functions

a) Issuing letter of credit, traveler’s cheques, circular notes etc.

5
 b) Undertaking safe custody of valuables, important documents and securities by

providing safe deposit vaults or lockers.

c) Providing customers with facilities of foreign exchange.

d) Transferring money from one place to another and from one branch to another

branch of the bank.

e) Standing guarantee on behalf of its customers, for making payments for

purchase of goods, machinery, vehicles etc.

f) Issuing demand drafts and pay orders.

g) Providing reports on the credits worthiness of customer

2.3 National Bank of Pakistan

National Bank of Pakistan was incorporated in Pakistan under the National Bank of Pakistan

Ordinance, 1949and is listed on all the stock exchanges in Pakistan. It is registered and its head

office is situated at I.I Chundrigar Road, Karachi. The bank is engaged in providing commercial

banking and related services in Pakistan and overseas. The bank also handles treasury

transactions for the Government of Pakistan (GOP) as an agent to the State Bank of Pakistan

(SBP). The bank operates 1,511(2020) branches in Pakistan and 22 overseas branches including

the Export Processing Zone branch Karachi. NBP maintain its position as Pakistan’s premier

bank determined to set higher standards of achievements. It is the major business partner for the

Government of Pakistan with special emphasis on fostering Pakistan’s economic growth through

aggressive and balanced lending policies, technologically oriented products and services offered

through its large network of branches locally, internationally and representative offices. TheBank

6
is providing all banking services of mercantile and commercial banking permissible in the

country.

The bank provides both commercial and public sector banking services. It is a lead player in the

debt-equity market, corporate investment banking, retail and consumer banking, agricultural

financing and treasury services.

National Bank of Pakistan has developed a wide range of consumer products, to enhance

business and cater to the different segments of society and meet its social responsibilities. Some

schemes have been specifically designed for the low to middle-income segments of the

population. It has implemented special credit schemes like small finance for agriculture, business

and industries, administrator to Qarz-e-Hasna loans to students, self-employment scheme for

unemployed persons, public transport scheme. The Bank has expanded its range of products and

services to include Shariah Compliant Islamic Banking products. It has also put in place

a remittance service for overseas Pakistanis to send their money back to Pakistan. Customer

Social Responsibility is a new department which provides social services

for Education, health and women empowerment.

2.4 Functions of NBP

Since NBP is a commercial bank, it performs a variety of functions. These functions include:

 Accepting of deposits of money on current, fixed, saving, term deposit and profit and loss

sharing accounts.

 Handling of treasury transactions for the Government of Pakistan as agent to the State

Bank of Pakistan.

 Borrowing money and arranging finance from other banks.

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  Advancing and lending money to its clients.

 Financing of projects, including technical assistance, project appraisal through long-term

short-term loans, term finance and mushtarika certificates, etc.

 Buying, selling, dealing, including entering into forward contracts of foreign exchange.

 Financing of seasonal crops like cotton, wheat, rice, sugar cane, tobacco, etc.

 Receiving of bonds, scrip’s, valuables, etc. for safe custody.

 Carrying on agency business of any description other than managing agent, on behalf of

clients including Government and local authorities.

 Generating, undertaking, promoting, etc. of issue of shares and, bonds, etc.

 Transacting guarantee and indemnity business.

 Undertaking and executing trusts.

 Joint venturing with foreign dealers, agents and companies for its representation abroad.

 Participating in "World Bank" and "Asian Development Bank's" lines of credit.

 Providing personalized Hajj services to intending Hajjis.

2.5 Vision of NBP

To be the Nation’s leading bank enabling sustainable growth and inclusive development.

2.6 Mission of NBP

We will achieve our vision by subscribing to the qualities captured by the word IMAGINE.

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Integrity is the cornerstone of everything we do

Market leadership is what we aim across all our target sectors

Agility and strategic nimbleness will help us adapt to changing market conditions

Good governance and transparency

Innovation to provide for the customer needs of tomorrow

Nation building remains our priority

Employee engagement through a merit-based culture

2.7 Goals of NBP

To enhance profitability and maximization of NBP share through increasing leverage of existing

customer base and diversified range of products.

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 CHAPTER # 3

ORGANIZATIONAL STRUCTURE OF NBP

3.1 Reporting Line of NBP

The NBP’s reporting line is as follow:

President

Board of Directors

Group Chiefs

Regional Chiefs/EVPs

Branch Manager

Officer

Fig. 3.1 NBP Organgram

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3.2 Board of Directors

The names and designations of NBP’S current members of board are:

S.No Names Designation

1 Mr. ZubyrSoomro Chairman

2 Mr. Arif Usmani President and CEO

3 Mr. Farid Malik, CFA Director

4 Ms. SadaffeAbid Director

5 Mr. TawfiqAsghar Hussain Director

6 Mr. Imam Bakhsh Baloch Director

7 Mr. Asif Jooma Director

8 Mr. Ahsan Ali Chughtai Director

9 Mr. Syed M. Ali Zamin EVP Secretary Board of Director

Table 3.2 NBP Board of Directors

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3.3 Senior Management

The names and designations of NBP’S current senior management are:

Arif Usmani

President & Chief Executive Officer

EVP & Principal Staff Officer to President

SEVP & Group Chief, Retail Banking Group

SEVP & Group Chief, Human Resource Management Group

SEVP & Group Chief, Internal Audit & Inspection Group

SEVP & Group Chief, Corporate & Investment Banking Group

SEVP & Group Chief/Chief Technology Officer, Information Technology Group

SEVP & Group Chief, Inclusive Development Group

SEVP & Chief Financial Controller, Financial Control Group

Fouad Farrukh

SEVP & Group Chief, Aitemaad Islamic Banking Group

SEVP & Group Chief, Compliance Group

SEVP & Group Chief, Operations Group

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 SEVP and Group Chief, Treasury & Capital Markets Group
Karim Akram Khan

SEVP and Group Chief, Logistics, Communications & Marketing Group

SEVP and Group Chief, Chief Digital Officer, Digitalization Group

SEVP and Group Chief, Chief Risk Officer, Risk Management Group

SEVP and Group Chief, International, Financial Institutions & Remittances Group

EVP & Divisional Head, Legal Division

EVP & Secretary Board, Office of the Secretary BoD

SEVP & Group Chief, Aitemaad Islamic Banking Group

3.4 Features of Different Types of Account

Latifabad Hyderabad.

3.4.1 Current Deposit Account

The current account is opened in the name of individuals, proprietary firms, partnership firms,

and private limited companies, clubs, associations, societies and other institutions. The account

can be operated by single or two or more persons jointly as the instructions may be given at the

time of opening the account. No any profit is given on current account deposits.

If the person who wants to open the account is not in a position to sign or his signature is not

firm or shaky, the bank requires his photographs and he has to present cheques personally at the

13
counter for withdrawals from his account, thumb print is also valid he can verify himself by

giving CNIC number along with his thumb print. The initial amount of deposit with which he

can open the account must not be less than PRs. 500. But this restriction is not imposed to the

accounts of charitable institutions.

3.4.2 PLS Saving Deposit Account

The silent features of profit and loss sharing saving accounts to be opened in NBP are as under;

1. Individual in their own single or joint names can open these accounts. The PLS saving

account can also be opened for provident fund or other benevolent funds of companies,

firms, organizations of welfare and educational institutions.

2. PLS saving account can be opened with the minimum amount of PRs. 500.

3. Money can be withdrawn from PLS with prior notice if heavy amount is involved.

4. To share in the profit a minimum balance of PRs. 500 must be maintained in account.

The minimum balance on sixth and last of month will qualify for the profits.

5. The profit will be calculated on the basis of monthly minimum balance for the period of

six months i.e. from January to June and July to December.

6. The head office of NBP determines the profit or loss on PLS saving deposits and advises

its branches the rate and time of distribution of these profits concerned PLS saving

account.

7. There is not restriction on maintaining the maximum balance in PLS saving account.

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 8. On the first of Ramadan, every year the Zakat of 2.5% will be recovered from the

deposits on the balance of that day. But if depositors give declaration of Zakat or he is

non-Muslim Zakat will not be recovered from him. In the same day Zakat is not

recovered from accounts in which the balance is below than prescribed limit as declared

by the administrator of Zakat Pakistan. This system of accepting deposits has been started

in NBP since first January 1981.

3.4.3 FixedDeposit Account (Term Deposit)

In the case of fixed deposits account deposit is made for a fixed period and money deposited can

be withdrawn after the expiry of period fixed or before giving an advance notice to the bank.

Fixed deposit carries a higher rate of interest than the other type of bank deposit account, and the

rate of interest rises with the length of the period and the amount of deposit.

On opening a fixed deposit account, the bank grants to the depositor a ‘Fixed Deposit Receipt

(FDR)’ which is not transferable to any other person. When the deposit in withdrawn the receipt

must be handed back to the bank.

The silent features of profit and loss sharing term deposit accepted by NBP are given as under;

1. The PLS term deposit are accepted from individuals in their own single or joint names,

companies, firms and other organization.

2. The PLS term deposit receipts are issued for any amount. There is no minimum or

maximum limit or deposits in a single term deposit account.

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 3. The head office of the bank determines the profit or loss on PLS term deposit at by any

one interval i.e. the end of June and December each year and payment of profit to or

deduction of loss if any form of PLS term deposit is to be made the deposits for longer

period will earn a little more profit than those of shorter period deposits.

4. In the case of encashment before maturity but after completion of three month’s profit

will be paid for the entire period for which the deposits remained with bank at the rates

payable for the respective period to the PLS saving account after deduction of the Zakat

if any.

5. If PLS term deposit expired and the depositor requests within one month after the expired

date, for investment. The PLS terms deposit will be reinvested for the desire period from

the date immediately following the expiring date.

6. Zakat or the face value of PLS term deposit will be recovered as many times as the

valuation dates (i.e. 1st Ramadan) falls between the date of issue and the date of expiry of

the deposit.

3.4.4 Foreign Currency Deposit

1. NBP has also introduced foreign currency accounts for Pakistan and foreign nationalists in

Pakistan and abroad. This scheme assures its customers of better profit and superior services.

2. It offers Pakistani or foreign nationalists to operate a foreign currency account with any one

of their authorized branches spread all over the country.

3. Deposits of this account will be accepted in all convertible currencies, but accounts will be

maintained on the customer’s choice.

16
4. Deposits may be made in the forms of remittances in foreign currencies.

5. Traveler’s cheques on the bank counter will be accepted.

6. The customer can make withdrawals and transfers to anywhere in the world.

7. All the deposits and profits in the customer’s foreign account are exempted from Zakat,

income or wealth tax.

8. The customer’s sources are protected from any scrutiny of concerned authorities.

9. NBP has worldwide network of branches and it has associates in Saudi Arabia Bank, Al-

Jazira and National Exchange company in UAE to Facilitate the customers in Pakistan, Saudi

Arabia and UAE.

3.5 Field Management

The field management is divided into twenty-nine Regional Headquarters, which are headed by

Regional Chief Executives. These regions are:

17
 Fig. 3.5 NBP Regional Headquarters

18
 1 Karachi (south). 8 Lahore (Central)

2 Karachi (west). 9 Lahore (East)

3 Hyderabad 10 Gujranwala

4 Sukkur 11 Sialkot

5 Larkana 12 Faisalabad

6 Gawadar 13 Jhang

7 Sargodha 14 Multan

15 Bahawalpur 23 Mardan

16 Dera Gazi Khan 24 Dera Ismail Khan

17 Sahiwal 25 Abbotabad

18 Rawalpindi 26 Muzzafarbad

19 Gujrat 27 Mirpur (AJK)

20 Federal Capital (ISLAMBAD) 28 Jhelum

21 Gilgit

22 Peshawar

3.6 NBP Overseas Branches

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America and Europe Region

 USA

 Canada

 Germany

 France

Far East Region

 Hong Kong

 Japan

 South Korea

 China

Middle East & South Asia Region

 Bahrain

 Kingdom of Saudi Arabia

 Bangladesh

Central Asian Republics

 Afghanistan

 Turkmenistan

 Kyrgyz Republic

 Kazakhstan

 Uzbekistan

 Azerbaijan

Subsidiary/Joint Venture/ Representative Offices

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 NBP Kazakhstan (Almaty)

 United National Bank (UK)

 Canada (Toronto)

 USA (Chicago)

 China (Beijing)

 Uzbekistan (Tashkent)

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 CHAPTER # 4

PRODUCTS AND SERVICES OFFERED BY NBP

4.1 Different Products Offered by NBP

Following are the main products which are being offered by National Bank of Pakistan

4.1.1 NBP Advance Salary

The NBP Advance salary has been the flag-ship product for NBP. NBP Advance Salary, the

leading personal loan product of the country, is maintaining its inimitability ever since it was

launched. This was only possible due to its swift growth and remarkable loan disbursement of

over 118 billion. You can avail up to 20 net take home salaries with easy repayment

installments of 1 to 60 months at your choice. No minimum income, collateral & insurance

charges required. Its hassle free acquisition with no prior formalities and easy availability in a

short turnaround time is attributed as the most distinguishing features of the product. The

product is offered countrywide. This scheme assures quick processing and fastest

disbursement. This is for permanent employees of Government, Semi Government and

Autonomous bodies receiving salaries through NBP.

4.1.2 Asaan Account

In Assan Account, one can easily open current or saving account with no restrictions on

minimum balance. It can be open by depositing 100 rupees only. It gives facility of wide

network of NBP branches and ATMs throughout the country. Its minimum documentation

makes it more easy for every one as one can open his/her account by giving CNIC. There are

no specific charges in closing of account however bank charges some amount as per current

tariff. One can

22
open this account single or joint. It also provides free cheque book on customer request. It

also provides SMS alert service to the account holder. Account will be activated within 3

working days as per NADRA verisys.

4.1.3 Premium Amdani

NBP Premium Amdani is a retail product of the bank. The amount of investment required for

this account is PRs. 20,000 to PRs. 10,000,000. The investment period is 5 years. Zakat and

withholding tax will be deducted as per rules. In NBP Premium Amdani, the account holders

have benefit of free demand draft, pay order; free cheque book and NBP cash card

(ATM+Debit). Profit paid every period as follows:

Period Reserved Profit Rate

Year 1 6.75%

Year 2 7.25%

Year 3 7.75%

Year 4 8.25%

Year 5 12.00%

Fig. 4.1 NBP Premium Amdani

NBP Premium saver is a retail product of the bank. The minimum saving balance of PRs.

20,000 and a maximum balance of PRs. 1million are required for opening a premium saver

account. Two debit withdrawals allowed in a month and no limit on number of deposit

transactions. The

23
profit is calculated monthly and paid on half yearly basis. Free NBP Cash Card (ATM +

Debit) facility is available to account holder.

4.1.5 Saibaan

The NBP Saibaan is retail product of the bank. It has different product items which are home

purchase, home construction, home renovation and purchase of land plus construction. If

anyone has a Home Finance Facility outstanding with another bank he can have it transferred

to NBP through a hassle-free process.The markup rate being offered is variable. The variable

markup rate is pegged with SBP Discount Rate with spread of 2% in which Life & Disability

Insurance coverage is mandatory. The markup rate is revised on every financing anniversary

if there is change in SBP Discount Rate. Bank has the right to change the spread for fresh

cases. The mode of repayment is direct deduction (through debt authority) of installment

from salary account or the Customer’s Current Account at NBP which has to be kept funded

with at least one monthly installment amount.

4.1.6 Mera Pakistan Mera Ghar

All citizens of Pakistan holding CNIC can apply for Mera Pakistan Mera Ghar Scheme. It is

required to be a first time owner and one individual can have subsidized house loan facility

under this scheme only once. It includes purchase of a complete residential property

(Apartment/Flat/House), purchase of plot & construction thereon and construction on owned

plot. This scheme is divided into 3 parts. 1st one is the Tier 1 in which house/flat/apartment

can cover maximum 850 square feet with subsidize markup/profit rate is 3% in first five

years and 5% in next five years. 2nd one is the Tier 2 in which house/flat/apartment can cover

maximum 1250 square feet with subsidize markup/profit rate is 5% in first five years and 7%

in next five years. 3rd one is the Tier 3 in which house can cover maximum 250 square yards

(10 Marla) and flat/apartment can cover maximum 2000 square feet with subsidize

24
markup/profit rate is 7% in first five years and 9% in next five years. The loan tenor is

minimum 5 years and maximum 20 years or depending on customer’s choice.

4.1.7 Karsaz SME

NBP offers different kinds of financing modes to SMEs General Financing and Seasonal

Finance. General Finance is based two options i.e. Fund-Based and Non Fund-Base. In fund

based financing, NBP offers following options:

 Working Capital Finance e.g. (finance against pledge, hypothecation or mortgage etc.)

for services concerns, local / foreign traders and manufacturers

 Medium Term Finance

 Long Term Finance

In Non-Fund-Based, SMEs can avail a range of non-funded facilities e.g. letter of credit,

letter of guarantees etc.

In Seasonal Finance NBP offers specific seasonal working capital finances for

manufacturers / traders under Rice, Cotton and Wheat seasonal crops. These finances are for

the procurement of stocks and meeting day to day expenses for value addition i.e. conversion

of raw products into finished products and subsequent selling into local or international

market.

4.1.8 Cash and Gold

The rate of mark-up on this scheme is 13.00% p.a. Financing against each 10 grams of net

contents of gold is PRs. 60,000 for one-year financing and PRs. 55,000 for three-year

financing. Maximum limit of financing is up to PRs. 7,000,000. No minimum income is

required with one-year rollover tenure. Only gold ornaments are acceptable and weight and

quality of gold is to be

25
determined by NBP's appointed schroffs. There is no penalty for early repayment. Mostly this

scheme is used for fulfilling education, marriage, consumer and other domestic needs.

4.1.9 Kisan Taqat

This scheme provides finance to farmers at very easy terms requiring minimum

documentation. Farmers can avail this scheme from the branch nearest to them. This scheme

supports farmer to expand their farming activities.

4.1.10 Kisan Dost

NBP Kisan dost have a Competitive mark-up rate with quick & easy processing. It helps

provision of technical guidance to farmers at their doorstep. It is wide range of financing

schemes for farmers. It provides finance facility up to PRs. 100,000/- for landless farmers on

personal guarantee. This financing is available against Pass Book, Residential / Commercial

property, Gold ornaments and paper security. This Loan facility is on revolving basis for

three years (renewable on yearly basis without requirement of fresh documentation and

approval).

4.2 Services Offered by NBP

NBP offers a wide range of services to its customers & recognize the importance of efficient

business delivery and providing timely solutions. There are list of services NBP offers;

 Demand Draft

 Swift System

 Letter of Credit

 Pay order

 Traveler’s Cheque

 Mail Transfer

 Foreign Remittance

26
 Foreign Currency Account

 NIDA (National Income Daily Allowance)

 Personal Loans

 Commercial Finance

 Trade Finance

 Agriculture finance

 Home Finance

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 CHAPTER # 5

HR PRACTICES IN NBP

5.1 Recruitment

It refers to the process of attracting, screening, selecting, and on boarding a qualified person

for a job. In the perspective of management’s philosophy regarding acquisition of talent,

recruitment activity was concentrated at the entry level positions. This approach being in line

with strategic needs of the Bank was undertaken to hire skilled human resource. This

approach also serves as a progressive career path for the workforce through mechanisms such

as career development and succession planning.

Selection of the right people for the job is the first step towards developing an efficient

institution. Great stress has therefore been laid on ensuring that the recruitment process at the

NBP is highly competitive, transparent and merit based. As a result of this conscious policy,

NBP have been able to attract some of the top talent in the country in the fields of

Economics, Finance, Business administration, IT, Accounts and Audit as well as Statistics.

NBP consciously seek diversity in terms of education, geographical representation and

gender and have actively encouraged women to apply for positions at the NBP. As one of the

largest employers of professionals in the country, with intake of more than 70 fresh graduates

at entry level positions and frequent recruitment at senior levels, NBP have successfully

developed a system that is unblemished by nepotism, subjectivity and political interference,

All recruitment is through open advertisement and follows a well-drawn out procedure

involving thorough scrutiny of all applications according to clearly specified criteria, written

28
tests developed and administered by external experts and interviews by a panel that has

representation from NBP’s Board of Directors

as well as private sector specialists in the relevant field. This commitment to quality and

merit will continue in NBP’s recruitment and other managerial actions.

When a vacancy occurs and the recruiters receive authorization to fill it, the next step is a

careful examination of the job and an enumeration of the skills, abilities, and experience

needed to perform the job successfully.

5.1.1 Internal Recruitment

Most companies fill vacancies internally whenever possible. A number of internal

recruitment methods are used for different level of jobs. Lower-level jobs such as manual and

clerical jobs are often called nonexempt jobs because their incumbents are not exempt from

the minimum wage and overtime provisions of the Fair Labor Standards Act. These people

typically are paid an hourly wage. In contrast, higher-level administrative, managerial, and

professional employees are paid on a salary basis and are exempt from the overtime

provisions of the Fair StandardLabor Act.

5.1.2 External Recruitment

In addition to looking internally for candidates, it is customary for organizations to open up

recruiting efforts to the external community. Through the recruiting process, the hiring

manager should stay in close touch with the recruiter. The hiring manager should examine

resumes or application that have passed initial screening by the recruiter and should also

review some of the application that the recruiter rejected during the first steps. Such

involvement on the part of the hiring manager allows feedback as to whether or not the

recruiter’s decisions are consistent with the hiring manager’s preferences.

29
External recruitment methods are often grouped into two classes: 1. Informal and 2. Formal.

Informal Method:

Informal recruiting methods tap a narrower labor market than formal method. Informal

method includes rehiring former employees or former cooperative education students, hiring

people referred by present employees, and hiring from among those who have applied

without being solicited (such applicants are called walk-ins or gate hires). Employee’s

referral, also known as word-of-mouth advertising, is quick, effective, and usually

inexpensive. Because employees who refer their friends and acquaintance as candidates have

their own credibility on the line, they tend to refer people who are well qualified and well-

motivated and then to mentor these individuals once they are hired.

Formal Methods:

Formal method of external recruiting entail searching the labor market for candidates who

have no previous connection to the firm. These methods traditionally have included

newspaper advertising, use of employment agencies and executive search firms, and campus

recruiting. Posting jobs ads on the Internet, either on the Bank own site or a commercial job

board, has also become extremely popular in the last few years. Historically, newspaper

advertising has been the most commonly used method of recruiting. Formal method includes:

 Recruitment Advertising

 Internet Recruiting

 Employment Agencies

 Public Job Service Agencies

 Private, For-profit Agencies

30
  Unions

 Additional Recruiting Methods

 Campus Recruiting

 Executive Search Firms etc.

5.2 Selection

Selection of the right employees are important for an organization. First own performance

always depends in part on subordinates. Employees with the right skills and attributes will do

a better job for the company. Employees without these skills won’t perform effectively and as

a result the firm will suffer.

Process of Selection:

Selection activities typically follow a standard pattern, beginning with an initial screening

interview and concluding with the final employment decision. The selection process typically

consists of eight steps:

 Initial screening interview

 Completing the application form

 Employment test

 Comprehensive interview

 Background investigation

 A Conditional job offer

 Medical or physical examination

 The permanent job offers.

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5.3 Training

Advanced Recruiting Trends offers corporate recruitment teams, third-party agencies, and

individual recruiters a variety of options to access the industry’s most comprehensive and

innovative recruitment training available. Training is the process of teaching new employees

the basic skills they need to perform their jobs.

Training refers to the methods used to give new or present employees the skills they need to

perform their jobs. Training might thus mean showing a machinist how to operate his or her

new machine, a new salesperson how to sell his or her firm’s product, or a new supervisor

how to interview and appraise employees. Training basically provide to the entry-level

employees.

On the job Training: It means learning by doing. It means employees training completed

while he works. It is basically a practical oriented training program.

Off the job Training: It means training provided to the employees out of the office in a

training institute for a particular period of time i.e. for 15 to 20 days. During this time the

employee does not have to go to office.

5.3.1 Methods of Training

There are some training methods which are given as under:

 On the job training.

 Apprenticeship training.

 In-formal learning.

 Job instruction training.

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  Lecture.

 Program learning.

 Simulated training.

 Computer base training.

 Training via CD-ROM and internet.

5.4 Compensation

Employee compensation refers to all forms of pay or rewards going to employee and arising

from their employment, and it has two main components. There are direct financial payments

in the form of wages, salaries, incentives, commissions, and bonus and there is indirect

payment in the form of financial benefits like employer- paid insurance and vacations. NBP

provides compensation packages to deserving employees.

5.5 Reward

Rewards are basically provided to the employees of the organization for their good

performance. NBP give rewards to those employees who manage their performance

appraisals on high level. Rewards are of two types: (1) Intrinsic and (2) Extrinsic.

1. Intrinsic Reward:

It is the personal satisfactions one gets from the job itself. These are self-initiated

rewards, such as having pride in one’s work.

2. Extrinsic Reward:

It includes money, promotions and benefit. Their common thread is that they are

external to the job and come from outside source, mainly management.

5.6 Employee Benefits

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Following are some benefits which NBP’s employee get:

 Base pay.

 Overtime pay.

 Travel/Meal/Housing allowance.

 Benefits including: dental, insurance, medical, vacation, leaves, retirement.

 Staff loan policy.

 Facility of Bank’s car & petrol ceiling.

 Medical facilities.

 Telephone charges at residence.

 Facility of newspapers & journal.

 Family pension.

 Yearly 3 bonuses.

 Promotions on performance appraisal.

 Job security.

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 CHAPTER # 6

PRACTICAL WORK EXPERIENCE AT NBP

6.1 Various Operations of NBP

During my 8week’s internship at National Bank unit # 8 branch, I learnt about different

operations of a bank. The operations include account opening, remittances, e-remittances,

clearing of cheques, different schemes of advances offered by NBP, EOBI and private

pensions etc. These are now discussed in detail below:

6.1.1 HRM

As Human Resource Management (HRM) is my major subject in BBA, I was very interested

to know what are the duties of an HR officer and how he performs his duties. I learnt the

procedure for giving salaries and different allowances to the staff of the branch, their entries

in journals, issuance of memos etc. HR officer also play a role of bridge between the branch

staff and Regional office. He communicates the policies of bank given to him by regional

office to staff and also communicate the problems or grievances of the branch staff to the

regional office.

6.1.2 Auditing

During my internship the most important and interesting task I came across was the auditing.

An annual internal audit was going on during that period. In auditing we check account

opening forms, cheques, cash books (Transfer scroll, Cash scroll), Demand drafts etc.

according to the Standard Procedural Manual. Then we put the findings in reports. The

reports are of two types i.e. Significant Findings and Less Significant Findings.

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6.1.3 Account Opening

There are mainly four types of accounts NBP offers: Current account, PLS saving account,

Fixed account and Foreign currency account. These accounts can be opened by the

individuals (single/jointly), Public/ Private limited companies, Federal Provincial Govt.

institutions, Trusts, Sole proprietors, partnerships (registered/ unregistered), corporate body

(incorporated/ unincorporated), Associations, Clubs and Societies etc. In NBP unit no.8

branch this work is conducted by Mr. Nisar Ahmed.

6.1.4 Remittances

There are three types of remittances: intra-regional, domestic and international. Intra-regional

and domestic remittances service is provided by through different instruments. Domestic

remittances are the most common in developing countries like Pakistan. Customers can send

and receive money across Pakistan through pay orders, demand draft, telegraphic transfer and

mail transfer etc. Ma’am Saima handle the remittances in Latifabad Unit no. 8 branch and she

teaches me about the whole process of sending and receiving money by using remittances.

6.1.5 E-Remittances

The e-remittance services of National Bank of Pakistan has provided overseas Pakistanis

much needed relief in connection with sending money to their dear ones. Officers provided

me the guidance to understand this particular function of bank. Through e-remittances

Pakistanis living in Gulf countries can send and receive money in Pakistan within minutes.

Through e-remittances people can send and receive money from across the globe instantly. It

is much easier to send/receive money through using internet.

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6.1.6 Clearing of Cheques

During my eight week’s internship another important function of bank which I performed

was the clearing of inter branch and intercity cheques (their recording in journals and

preparation of fanfolds etc.). NBP subsequently passes on the transactions to other branches

where from cheques have been drawn and collected. However, it is worthy to mention that

National Bank of Pakistan conducts proceedings of clearing house where the SBP has no

branch. Clearing house is usually conducted in big cities with the State Bank of Pakistan. The

cheques of different branches of NBP, different banks and cities are sent for clearance to their

respective branches for clearance through NIFT (National Institutional Facilitation

Technologies).

6.1.7 Pension

Another major function of NBP is to provide pensions. NBP being an agent of State bank of

Pakistan provides pensions to government servant and also to the private pensioners. In

NBP’s unit No. 8 branch there are separate counters for EOBI (Employees’ Old-age Benefits

Institution) and private pensioners.

6.1.8 Advances

Loans and advances granted by commercial banks are highly beneficial to individuals, firms,

companies and industrial concerns. The growth and diversification of business activities are

effected to a large extent through bank financing. Loans and advances granted by banks help

in meeting short-term and long term financial needs of business enterprises. The main

advances schemes through which NBP is giving loan to its customers are Gold loan, Advance

Salary and Karobar Scheme and other. Bank also provide loan to its customers against

property mortgage. The interest rates are different for different schemes.

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 CHAPTER # 7

SWOT ANALYSIS OF NBP

SWOT stands for strength, weaknesses, opportunities and threats. SWOT analysis is a careful

evaluation of a company’s internal strengths and weaknesses as well as environmental

opportunities and threats. Following are the strength, weaknesses, opportunities and threats

for National Bank of Pakistan according to my personal observation and experience.

7.1 Strength

1. NBP has an extensive domestic branch network of 1511 branches located all over

Pakistan. The Bank also has a presence in 22 international locations including the

USA, United Kingdom, Europe, the Far East and the Export Processing Zone branch

Karachi.

2. NBP is working as a right arm to the government of Pakistan as it is responsible for

all claims of government for recovery as well as payment. All depositor of NBP are in

relief that their money security is guaranteed by government of Pakistan.

3. It acts as an agent of the Central Bank wherever the State Bank does not have its own

branch.

4. A National Bank brand image is its strength. It has always been considered as the

pillar of the country's economic scenario asset wise or balance sheet wise. Its image,

work force, network and reputation have created a sentimental and emotional

attachment of the people with the bank.

5. Another competitive edge that the bank has on the rest of the competitors is its

expanding business worldwide catering for a large and vast group of customer and

maintaining standards of excellence globally and other strength of NBP.

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 6. NBP plays a vital role in the national economy through mobilization of hitherto

untapped local resources, promoting savings and providing funds for investments

7. The employers at NBP are offered reasonable monetary benefit. This serves as an

additional benefit and competency for the bank and a source of motivation for the

employees.

7.2 Weakness

1. NBP’s staff usually considers their work as burden. They usually waste their time in

other tasks apart from their duty. They use government property for their personal

needs.

2. NBP’s staff is reluctant to accept changes brought by latest restructuring efforts.

3. 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 there

in the era marketing in now becoming a part of every organization.

4. The strong political hold of some parties and government and their dominance is

affecting the bank in a negative way. They sometime have to provide loan under the

pressure, which leads to uneven and unjust feeling in the bank employees.

5. The promotions and bonuses etc. in the bank are often powered by senior’s favoritism

or depends upon their wills and decision. This adds to the negative factors, which

denominate the employees thus resulting in affecting their performance negatively.

6. The bank falls far behind when the innovative and new schemes are considered. It has

not been involved in the tug of war between the competitors to the accounts and

strengthens the existing customer base. This stands out to be the major incompetence

and weakness of the banks.

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 7. The workload in NBP is not evenly distributed and the workload tends to be more on

some employees while others abscond away from their responsibilities, which serves

as a demotivating factor for employees performing above average work.

7.3 Opportunity

1. There is a great opportunity for National Bank to expand its operations internationally.

2. NBP can utilize the electronic banking opportunity to ensure on line banking services to

its customer 24 hours a day. This would give a competitive edge to NBP over its

competitors and will help in retaining its customers.

3. There are a lot of opportunities of micro financing in the market. The bank needs to come

up with better schemes than its competitors to attract more customers.

4. NBP can offer new variety of products for its customers, which will help NBP to

reposition itself as a true commercial bank rather than a government bank.

5. Trust and reliability creates chances to enhance deposit and profitability.

6. Bank’s deposit is increasing rapidly so there is a great opportunity to enhance its

investment and financing.

7.4 Threats

1. With the emergence of new competitors especially in terms of foreign banks which

are equipped with heavy financial power with excellent and innovative ways of

promoting and performing their services NBP is facing a serious threat. The bank has

to take initiative in this regard or will find itself far back in competition.

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2. The influence of government and political parties in the matters affects the

performance of the bank. The bank has to forward loans to politically powerful

persons, this create a sense of insecurity and demoralization in the customer as well as

employees.

3. 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 customer's complaints are ignored.

4. High number of complaints regarding staff behavior.

5. SBP penalties due to low internal control and compliance are another great threat to

the bank.

6. NBP still prefer to perform task manually rather than doing it automatically. New

technology is a threat to NBP because their competitors are working with emerging

technology.

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 CHAPTER # 8

CONCLUSION AND RECOMMANDATION

8.1 Conclusion

At the completion of my internship I have drawn the following conclusions:

1. The procedure for sanctioning of advances and opening of an account is too much

time consuming. Customers have to wait for too long.

2. Customers always complaints for non-working of ATM machines.

3. Overstaffing is another major problem of NBP. There is a great government and

political pressure in the day to day matters of NBP.

4. Employees of NBP are poorly trained and they lack motivation. They think their work

as a burden.

5. There is no proper follow-up, monitoring and recovery of advances and cause huge

loss to the bank.

6. The distribution of work is not equal among staff.

8.2 Recommendation

On the basis of conclusions drawn by me, I give the following suggestions.

1. The bank needs to adopt more efficient procedures of the sanctioning of loans and

opening of account to make these procedures less time consuming.

2. NBP needs to improve its ATM facility.

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 3. Management of NBP needs to be more independent from government and political

pressures in its matters.

4. NBP need to offer new variety of products for its customers to reposition itself as a

true commercial bank rather than a government bank.

5. Proper training programs needs to be conduct for employees from time to time to

update their knowledge and skills.

6. There needs to be an efficient mechanism for proper follow-up, monitoring and

recovery of advances.

7. There needs to be an equal distribution of work.

References

1. https://www.nbp.com.pk/index.aspx

2. https://www.nbp.com.pk/BankProfile/index.aspx

3. https://www.nbp.com.pk/FinancialStatements/AnnualReport2020.pdf

4. https://www.nbp.com.pk/Governance/Smgt.aspx

5. https://www.nbp.com.pk/Governance/BOD.aspx

6. https://www.nbp.com.pk/ips/IPS-AUTHORIZED-BRNACHES.PDF

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