National bank of Pakistan
National bank of Pakistan was established on 9 November ,1949 under the national bank of Pakistan ordinance 1949. NBP was owned by Govt of Pakistan. In 1949, when India devalued its rupee and Pakistan did not devalued its currency. So, due to the devaluation of rupee led to a crisis in trading between two countries (Pakistan and India). India refused to lift the Pakistan jute. To cope the crisis that had developed about financing the jute trade, NBP was established and started its operation at six important jute centers.
The Lahore and Karachi offices of NBP were opened in December 1949. NBP also established its offices in the cotton growing areas. To restore stability to the market NBP extend its credit facilities. After some time in 1951, country once again face some crisis in cotton trade. When the cotton prices were crashed and reached its lowest level.
Then NBP in collaboration with cotton board provided the credit facilities to trade and this problem is over.
National bank of Pakistan has its headquarter in Karachi, Pakistan. NBP operates 1500 (domestic) branches within the Pakistan and almost 22 oversea branches. NBP oversea branches are in
• Saudi Arabia (Riyadh).
• Bangladesh (Chittagong, Dhaka).
• China (Beijing).
• Canada, (Toronto)
• USA (Washington D.C. and wall street).
• France (Paris branch).
• Afghanistan (Kabul)
• Iraq (Baghdad). Etc.
National bank of Pakistan is the largest commercial bank operating in Pakistan. National bank of Pakistan net income is 22.75 billion and revenue is 114.40 billion approx. NBP had almost 18 subsidiaries in Pakistan and oversee. national bank of Pakistan services is available to individuals, corporate entities and government.
NBP branch operations:
• NBP had one subsidiary “the bank of Bahawalpur” in 1947.
• The NBP branch is nationalized by Iraqi government in 1964.
• After some years the Tanzanian branch also nationalized it on 1967.
• NBP opened its representative office in Toronto, Canada.
• National bank of Pakistan and united bank merge their operations to form Pakistan international bank in which NBP owns 45% only. Due to the merger of the UK branches of NBP and UBL “UNBL” was formed in 2001 as a joint venture.
• NBP had off-shore branch in Bahrain and closed it in 2005.which they are opened in 1977.
Nature of NBP:
The responsibilities of NBP is different from other banks and financial institutions. National bank of Pakistan acts as agent of state bank of Pakistan and handling their provincial and federal government payments on their behalf.
National bank of Pakistan also acts as a trustee of public funds. NBP also played an important role in financing the country’s growing trade.
National bank of Pakistan is efficient, customer focused institution. NBP has developed a large range of products for consumers to enhance their business. National bank of Pakistan has redefined its roles. And due to their roles NBP has moved from public sector organization to modern commercial bank.
Commercial banks are those banks which collect surplus money from individuals and firms and lend those money to individuals and firms for the short period of time or long period of time.
They act as a dealer in short period loans.
Vision and mission statement of NBP:
To be recognized as a leader and a brand synonymous with trust highest standards of service quality, international best practice and social responsibility.
NBP will aspire to the values that make NBP truly the nation’s bank by:
• Institutionalizing a merit and maximizing the stake holder value.
• Creating a distinctive brand identity by providing the highest standard of services.
• Adopting the best international management practices.
• Discharged our responsibilities as a good corporate citizen of Pakistan and in countries where we operate.
• Highest standard of integrity
• Institutionalizing a teamwork
• Excellence in service
• Advancement of skills or tomorrow’s challenges.
• Awareness of social and community responsibilities.
Goal of national bank of Pakistan:
To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products.
NBP Qazzafi chowk branch:
National bank of Pakistan has many branches in Multan and Qazzafi chowk branch near Daewoo terminal is one of the branch of NBP where I am doing my internship.
In this branch, the employees create very friendly environment with their customers.
Email: [email protected]
Departments of NBP:
Bank working are divided between many departments and different departments doing their jobs according too the policies, terms and conditions that are specified by the bank.
The departments that are working in National Bank of Pakistan (Qazzafi branch) are:
? Cash department
? Account opening department
? Clearing department
? Deposit department
? Remittance department
? Advances department
Cash department is the most strong and busy department of national bank of Pakistan, because all the physical movement of a cash is done through this department. The borrowing and lending of money, payments of cheque, utility bills, govt. tax and remittance etc. all are done through this department. Cash is the top most priority of the bank because all the functions of the bank are cash based.
Record of payments:
I am working in cash department as an internee for getting some experience. Traffic challan, Utility bills, income tax, property tax etc. are received by cash department. After the payments of bills and taxes, then the record is made manually and computerized record.
The cash department manually record the bills and slips in the register. B-60 Cashier’s receipt book are used for the record of daily bills and taxes. In this book, the serial number along with cash amount are recorded. At the end of the day, when the bank closed, the total summary of the record is made. The summary includes the total no of voucher and total amount of bills and taxes. Then the manager and head of cash department sign on them.
The department also maintain computerized record of these taxes and bills. The 1-link system is used for the utility bills (MEPCO, SUI GAS, PTCL etc.) and through this system the (MEPCO, SUIGAS, PTCL) get the updates of the bill. For challan, and tax record, profile of bank is used. This profile record saved in the server and then used and check by head department.
Deposits and Payment:
In this department the customer deposit some amount of money at the opening of new account. So, he/ she fill deposit slip (pay in slip) that show the amount they want to deposit and account no. the teller credit their account that show the increase in customer’s account after receiving the payment.
Bank also make payments when customer draw a cheque then the teller debits the customer’s account that show reduction in the account of the customer.
Payments are also made against cheques, after the complete verification of a cheque by operation manager. The signature on the cheque and the signature of the account holder are verified and check the balance of account holder, then payments are made.
Account opening department:
This department is also one of the departments of national bank of Pakistan. This department performs the duty of opening an account and issue checkbook to customers. The term ACCOUNT means “a banking relationship” as per section 5(b)& 7 of banking companies ordinance and sections 26 and 26-A of the national bank of Pakistan Ordinance 1949.
The term “Account Holder” means a person, a partnership firm, an institution, a company, agencies, a club, NGO’S and society etc. who or which maintain one or more account with the bank or any branches of NBP. The relationship between the bank and the account holder shall be governed by laws of Pakistan. individual also opened joint account with max 1 person.
? Copy of Valid identity document.
? Electricity or any other utility bill for the verification of address.
? Identity document of any family member.
? If business man, then certificate or proof of trade bodies.
? If minor, then form-B, birth certificate, or student ID card.
? After taking all the required document from the customers then provide them account opening form.
? Guide them regarding the form filing and account opening.
? Check the form whether it is correctly filled or not. Form will be error free.
? The form contains personal information, account details (type of account, registered address, purpose of account etc.) next of Kin and account holder declaration.
? Then this information also submitted online in system which is send to regional office and head office for verification.
? The customer identity document is also verified through biometric and verification system of NADRA.
? If identity document or any other relevant document of the applicant is found “defective or fake” by NADRA verisys during its verification process by the bank, the bank can refuse to open the account and/ or close the already opened account.
? The customer also fills signature card that include signature/ thumb impression of both left and right hand.
? The signature also entered into the system for the verification of signature in case of cheque represented.
? The banker verifies the documents with the stamp on the form and sign. Then after completing all the process the customer account is open. And account no is given to the customer.
After opening of account, the bank sends letter of thanks to account holder. F-529 is the letter of thanks. and apply for cheque book also.
Issuance of cheque book:
? When a new account is opened then customer also apply for a cheque book. The old customer whose cheque book is finished then they also apply for a new cheque book.
? The customer fills a requisition in which they sign, provide valid CNIC number, account no and phone number if it is a new customer.
? If it is an old customer, then the requisition is available in their cheque book. They sign on that requisition and provide phone number.
? Atm portal software is used for the issuance of cheque book and ATM card. Banker apply for the cheque book online with all detail like (leaves- 25, 50 100)
? The 25 leave cheque book charges are 175 rupees. Each leave contain 7 rupees. Within 6 days cheque book is delivered from the head office.
? After issuance the cheque book registered is also maintained in which serial no of cheque book, name and account no of account holder is mention. They sign on the register and take their cheque book.
Remittance department is the department which deals with the transfer of money from one place to another. Remittance means “the act of sending payment to someone”. remittance through bank is one of the most reliable, cheap and time saving.
The physical transportation of money from one place to another is very risky. Remittance department eliminates the risk. National bank of Pakistan provides these services to their customers as well as non- customers.
Remittance department perform different functions. The instruments of remittance department are following.
? Pay order
? Demand draft
? Pay slip
? Mail transfer
? Traveler’s cheque
The remittance can be made through following methods which are
1. Through instrument funds are transfer.
2. Through electronic transfer (Inter bank transaction)
Kinds of remittance:
• Transfer within the bank between 2 different persons.
• Transfer from one branch to another branch.
• Transfer from one bank to another bank in same city.
• Transfer from one bank to another bank in two different cities.
• Beneficiary/ payee
• Remitter bank
• Paying bank
Ali is remitter who send money. Ahmad is payee for whose payment is made. Remitter bank is NBP who send through instruments and MCB is paying bank who make the payment.
Instruments of remittance:
Pay order is also called payment order. Pay order is a financial instrument which is issued by a bank on behalf of a customer. It is an order to pay a specified amount of money to a specified person within the same city. It is only used for the payments within the city.
DD is a financial instrument which is used for the payments/ and transfer of money from one city to another and to another specified person. Demand draft is made by one branch of the bank to another bank.
F-117 is the demand draft form which is used for payment.
It is also called deposit slip. A customer used this to deposit sum amount of money in bank. Bank charge no fee/ commission for the deposit slip.
The sum of money also transfers through mail. MT is like demand draft. It is not used these now because of online system.
It is the old process for the transfer of money through telephone. money Will be transferred in same bank. This system is not used now.
It is also a form of transfer of money from one place to another. It is not secure to move a large amount of money from one place to another, so, bank issue a traveler’s cheque to customer. Customer can cash this cheque from another branch of the bank in different city, instead of traveling with the large amount of money in cash.
Swot analysis describe the strength, weakness, opportunities and threats of national bank of Pakistan. Swot analysis of national bank of Pakistan are following.
The strengths of national bank of Pakistan are following
• Oldest government bank of Pakistan
• Western union facility
• Online banking
• Broad network
• ATM founder
• Agent of state bank
• Political pressure
• Less marketing
• Less computerized network
• Shortage of staff
• Electronic banking
• Growing bank system
• Customers satisfaction
• High interest rate