Table of Content

CHAPTER-1
INTRODUCTION TO THE REPORT ......................................................... 7
1.1 Background of study ........................................................................................................ 7
1.2 Purpose of study ............................................................................................................... 7
1.3 Scope of study .................................................................................................................. 7
1.4 Methodology of research .................................................................................................. 7
CHAPTER-2
INDUSTRY ANALYSIS ................................................................................. 8
2.1 Key success factors ............................................................................................................... 9
2.2 Market size ............................................................................................................................ 9
2.3 Departmentation of NBP..................................................................................................... 10
2.4 Market growth ..................................................................................................................... 10
2.5 Market profitability ............................................................................................................. 11
2.6 HRM and HRD policies of NBP ......................................................................................... 12
2.6.1 Recruitment ...................................................................................................................... 13
2.6.2 Selection Process ............................................................................................................. 13
2.6.3 Short-Listing Of The Application .................................................................................... 13
2.6.4 Test ................................................................................................................................... 13
2.6.5 Interview .......................................................................................................................... 13
2.6.6 Merit List ......................................................................................................................... 14
2.6.7 Transfer Policy ................................................................................................................. 14
2.6.8 Inter Transfer Policy ........................................................................................................ 14
2.6.9 Interdepartmental Transfer............................................................................................... 14
2.6.10 Promotion Policy ........................................................................................................... 14
2.6.11 The Purpose Of Promotion ............................................................................................ 14
2.6.12 Seniority List .................................................................................................................. 15
2.6.12 Annual Evaluation ......................................................................................................... 15
2.6.13 Sanction Strength ........................................................................................................... 15
2.6.14 Process Of Evaluation .................................................................................................... 15
2.6.15 Training Policy............................................................................................................... 16
2.6.16 Salary Administration .................................................................................................... 17
2.6.17 Benefit Package for The Employees .............................................................................. 17
CHAPTER-3 COMPANY ANALYSIS..................................................................................... 18
3.1 Swot Analysis of NBP on the basis of HR......................................................................... 18
3.1.1
Strengths of NBP ........................................................................................................ 18
3.1.2
Weaknesses of the NBP .............................................................................................. 19
3.1.3
Opportunities of the NBP: .......................................................................................... 20
3.1.4
Threats of NBP: .......................................................................................................... 20
CHAPTER -4
CONCLUSION AND SUGGESTION ....................................................... 22
4.1 Conclusion...................................................................................................................... 22
4.2 Suggestions..................................................................................................................... 22
REFERNCES .............................................................................................................................. 23

List of Abbreviations
CJSC:

Closed Joint Stock Company Bank

FIB:

First Investment Bank

IMF:

International Monetary Fund

SVP:

Special Vocational preparations

ACRs:

Annual Confidential Report

SWIFT:

Society for interbank Financial Telecommunication

HRD:

Human Resource Development

CHAPTER-1
1.1

INTRODUCTION TO THE REPORT

Background of study
I am making this report because it is necessary for our degree as per the requirement of

Institute of Management Sciences, The Kohat University of Science and Technology, Kohat. I
am doing BBA from this university and for my internship I select National Bank of Pakistan
because NBP is one of the oldest banks of Pakistan and now a day it is one of the leading Bank
of Pakistan. As per the requirement of our University I have done eight weeks internship in the
NBP Takht-e-Nasrati Branch, Karak.

1.2

Purpose of study
The Main purpose of this study is to get the practical experience of banking operations

and how commercial banks perform their routine activates under the guidelines of SBP. So due
to this study we analyze the difference between the bookish knowledge and practical experience.
During my internship I analyze how bank is doing its day to day operations and I also analyze its
strengths and weaknesses and on the bases of this study. I give some recommendations to
overcome their weaknesses. I am making this report on the behalf of my eight weeks practical
experience in bank.

1.3

Scope of study
In Pakistan Banking is one of leading business sector of Pakistan so thats why I Select

NBP for my internship because in banking sector of Pakistan NBP is one of the leading bank of
Pakistan and have multiple branches throughout the country. The internship duration is very
short but I tried to analyze the maximum operations of bank and I have written it in the shape of
report. The main scope of the study is concern with how banking sector is working in Pakistan
and how it is beneficial for our economy. Further, this report will also help the students in future.

1.4

Methodology of research
During my internship I observed the functions of different departments of bank and the

data that I have collected for my research is primary and as well as secondary data.
Main sources of primary data are as follows
i.

Personal observation

ii.

Guidelines from operation Manager

iii.

Discussion with staff members

Main sources of secondary data are as follows

i.

Website

ii.

Annual reports

iii.

Half yearly reports

iv.

Quarterly reports

v.

Manual

CHAPTER-2

INDUSTRY ANALYSIS

2.1 Key success factors

The banking in Pakistan - a highly regulated industry - has witnessed a rapid progress in
recent years and has been characterized by an increasing sophisticated provision of banking
services.

Biggest financial earning unit in Pakistan

Growing trade

Wide range of consumer products

Affordable, Flexible & Convenient home financing for all

Acting executors, trustees for the customers

2.2 Market size

National Bank of Pakistan is a Govt. bank. As of December 31, 2009, the company has
1,265 domestic branches and 22 overseas branches. 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 or Intend products and services offered
through its large network of branches locally, internationally and representative offices. The
Bank has representative offices in Beijing, Tashkent, Chicago and Toronto. It has agency
arrangements with more than 3000 correspondent banks worldwide. Its subsidiaries are Taurus
Securities Ltd, NBP Exchange Company Ltd, NBP Capital Ltd, NBP Modaraba Management
Company Ltd, and CJSC (Closed Joint Stock Company Bank), Almaty, Kazakhstan. The Bank's
joint ventures are, United National Bank (UK), First Investment Bank and NAFA, an Asset
Management Company (a joint venture with NIB Bank & Fullerton Fund Management of
Singapore).
Today the Bank has more than 8.8 million accounts & Bank maintains its presence in all
the major financial centers of the world through its 22 (2008) overseas branches and 5
representative offices.
The Branch network of National Bank of Pakistan is divided into following categories:

ATM network (Total ATMs 101 & Total ATMs machines 104)

Domestic network (1249 Branches)

Islamic network (5 Branches)

Online network (156 Branches)

Overseas network (29 Branches)

Swift network (12 Branches)

Customer Facilitation Centers (6 Customer Facilitation Centers)

Agriculture branches (825 Branches)

2.3 Departmentation of NBP

The Departments functioning at NBP are:

Cash Department

Clearance Department.

Remittance Department.

Advances Department

2.4 Market growth

In terms of concentration in the banking sector, the share of individual banks assets in
the total asset base continues to decline as the industrys competitive position gradually
improves. A decline in the concentration of large banks is also evident from the fact that the
market share of the big 5 banks decreased from 63.2 percent in 2000 to 50.8 percent during the year 2009. It
has also been seen that during the last decade, the smallest 5 banks have a cumulative market share
of less than 1.0percent.

Growth Rates

2007

2008

2009

Profits After Tax

11.82%

-18.78%

17.81%

Return on Assets

-2.95%

-28.71%

5.64%

Net Interest income(before

11.53%

10.20%

3.78%

provision)

2.5 Market profitability

Profitability means Measure of the ability of business to generate returns for the
business or for the owner or Overall effectiveness of the management is known as profitability
The Bank's financial performance has been remarkable. In 2006, total assets are estimated at
PKR 635 billion, while deposits have grown to nearly PKR 502 billion. Pre-tax profit rose to
PKR 26 billion. Earnings per share have jumped to PKR 24.01 in 2006.

Earnings Ratios

2007

2008

2009

ROA

2.72%

1.96%

2.07%

ROE

19.20%

14.13%

16.41%

ROD

3.48%

2.54%

2.70%

The increase in profit was achieved through strong growth in core banking income. Interest
income increased by PKR 10 billion through growth in the loan portfolio as well as increase in
spreads. Advances increased by PKR 48 billion to PKR 316 billion. The Bank maintains a sound
loan portfolio diversified in nature to counter the risk of credit concentration. It ranges from
providing credit to the un-banked market segment under NBP Karobar, to small and medium
enterprises, to agricultural loans, to large corporate customers.

Market trend
Since late 2007, Pakistan faced a difficult macroeconomic environment, not as such due to

the global crisis but rather due to a confluence of factors which had been brewing for a while,

particularly due to the gradual build up of macroeconomic imbalances which led the country to
embark on a macroeconomic stabilization program in November 2008 with the support of the
IMF SBA. Nevertheless, it has tested the resilience of the banking sector in that banks have been
forced to build contingency reserves and provide for infected assets. Such requirements have
been affecting their dividend payments and consequently putting pressure on their share prices.

2.6 HRM and HRD policies of NBP

Human resource management is the set of activities directed at attracting, developing, and
maintaining and effective workforce. Human resource management takes place within a complex
and ever changing environment context.
Human resources are critical for effective organizational functioning. Most managers
realize that the effectiveness of their human resource function has a substantial impact on the
bottom line performance of the company. Poor human resources planning can result in spurts
(growth) of hiring followed by layoffs costly in terms of unemployment compensation payments,
training expenses and moral.

Personnel department of National Bank of Pakistan is working at the head office Karachi.

This department controls all the National banks staff in Pakistan. Personal department is called
staff administration department. The bank is gradually shifting its emphasis from routine
personnel administration to human resource development. Due to this attention is therefore being
focused on optimal utilization of the existing human resources. The bank under took GHS and
organization restructuring and smoothly carried out the implementation of staff reduction over
7500 employees. The human resource management office of National Bank of Pakistan performs
the following functions.

2.6.1 Recruitment
Once an organization has an idea of its future human resource needs the next phase is
recruiting new employees. Recruiting is the process of attraction-qualified persons to apply for
the jobs that are open.
The criteria and they policy of the National Bank of Pakistan for the recruitment of the
staff are as under.

2.6.2 Selection Process

Once the recruiting process has attracted a pool of application, the next step is to select
whom to hire. The intent of the selection process is to gather from applicants information that
will predict their job success and then to hire the candidates likely to be most successful. But
during the Benazirs government in 1996 many peoples are recruited without selection process
and they are directly recruited on political basis.
After the applications have been received call letters are issued to the candidates.

2.6.3 Short-Listing Of The Application

Applications of the candidates are scrutinized by the management and are then sent the
rest calls. In the first step thousands of candidates apply for limited posits available. The head
office sends the calls to only those candidates, who fulfill the requirements of the job advertised.

2.6.4 Test
The Pakistan banking council under the supervision of the Pakistan banking and finance
commission conducts test. In the tests the application are further short-listed. From the last few
years National Bank of Pakistan did not announced any post and neither banking council existed.

2.6.5 Interview
Selection board judges the personality of the candidates including appearance and way of
discussion. Candidates who qualify the written test are called for interview.

2.6.6 Merit List

After final result the appointment letters are sent to the successful candidates to present
themselves before the bank authorities to sign the agreement in favor of the bank.

2.6.7 Transfer Policy

A transfer policy is a change in job of employee from one job to another or from one
branch to another. It may involve a promotion, demotion, or no change in job status other then
moving from one job to another. It may also be possible at the request of the employee. In
National Bank of Pakistan there are two types of transfer.

2.6.8 Inter Transfer Policy

The management of the National Bank of Pakistan transfers frequently its workers from
one station to the other. Usually managers are transferred to enhance their managerial skill.
Sometimes the efficient workers are sent to those stations where the performance of the staff is
not satisfactory. Appropriate facilities are granted for the conveniences of the worker who is
being transferred from base town to another station.

2.6.9 Interdepartmental Transfer

Inter transfer is related to the transfer from one department to another department or one
section to the other section in a branch. The purpose of this transfer is to generalize the staff and
to make them all rounder. In this way every one will be able to perform any kind of work in the
branch.

2.6.10 Promotion Policy

Promotion cannot be claimed as a matter of right as on the basis of seniority but on the
basis of performance. Main criteria for promotion are the performance and skills of the
individual, through seniority, it is also taken into consideration but it is of secondary importance.
Promotion is a term that covers a change class for greater responsibility and usually involves
higher pay and better terms and conditions of service and theyre for a higher status.

2.6.11 The Purpose Of Promotion

To provide satisfaction to the employee who are working hard.

To improve training skill and experience ability.

To provide and organization with a competent worker.

To find out the most competent and suitable candidates.

2.6.12 Seniority List

National Bank of Pakistan shall maintain seniority list at different levels as follows:

For OBII. Separately at circle level.

For OG I and above up to SVP level at head office.

For EVPs the list on the integrated NCBs by PBC.3

2.6.12 Annual Evaluation

Performance of, officer and executive shall be recorded in the annual confidential report
(ACR) at end of the year by immediate supervisor of the executive concerned.

2.6.13 Sanction Strength

After considering operational requirement of the bank the board of director determine
strength in each cadre.

2.6.14 Process Of Evaluation

In order to make the evaluation objective, the following steps will be taken to determine the
eligibility of the candidate.

For the promotion of the officers from OG III to OG II the minimum service requirement
is five years.

For the promotion of the officers from OG II to OG I the minimum service requirement is
four years.

For the promotion of the officers from OG I to AVP the minimum service requirement is
three years in OG I and eight years of banking experience.

For the promotion of the officers from AVPs to VPs the minimum services requirement
is three years at AVP and ten years of banking experience.

For the promotion of officers from VPs to SVPs the minimum service requirement is
three years at VP post and thirteen years of banking experience.

For the promotion of the officers from SVPs to EVPs the minimum service requirement
is three years at SVP position and sixteen years of banking experience.

For the promotion of the officers from EVPs to SVPs the minimum service requirement
is three years at AVP position and nineteen years of banking experience.4

The evaluation of overall performance comprises of the following elements.

Educational Qualification.

Professional Qualification.

Service in Grade.

ACRs of three years.

Operating performance

Experience in different disciplines.

Positioning for away places.5

Factors to be considered by the promotion committee.

Administrative ability and effectiveness at supervisor level.

Leadership quality and initiative.

The ability to create a sense of discipline among the staff.

Self-confidence.

Commitment and motivation to achieve the organizational goals.

Ability to take prompt decisions and accepts responsibility.

Reputation of integrity and morale, this includes living within known source of income
and non-involvement in any business dealings, directly or indirectly.

Non-involvement whether direct or indirect in any fraudulent or forgery case.

2.6.15 Training Policy

Training is a vital necessary activity in all organizations. It plays a large part in
determining the effectiveness and efficiency of the establishment. Training is the organized
procedure by which people learn knowledge and skills for a definite purpose. The objective of
training is to achieve a change in the behavior of those trained.
The staff college receives junior bank officers for further training in banking. The courses
duration is from 6 to 9 weeks with about 25 students in each course. The staff college receives
trainees form abroad as well as domestic that help to create worthwhile reference to banking
business. The college is one of the important institution set up by the bank because its students
are likely to be drawn those men who may except to rise to the senior most executive positions
which the bank offers.

The training institution is intended to train supervisory and clerical personal and to
provide basis training in banking procedure and practice exercise is the routine working of the
bank. At the end of these courses trainees are required to go through a written test and positions
with respect of staff seniority are determined by the results achieved.
National Bank of Pakistan realize its position as the premier of the bank in Pakistan this
consider it responsibility to ensure dignified position while say representing itself in the meeting
of the bankers mostly when finance is the question in hand.

2.6.16 Salary Administration

The driving force behind every successful organization is primary its people who take
responsibility and decision-making exercise diligence without fail and without fear. National
Bank of Pakistan principle objectives is to boost the spirit of the people motivation through a
conductive and professional work environment and merit-based remuneration. Remuneration at
National Bank of Pakistan is based on fair principles of rewarding those who demonstrate a
consistent track record of improving productivity and efficient performance.7
Salary is the reward in financial terms given by the organization to its employees in
exchange for their work. Salary is an important and complex part of the organization employees
relationship. Basic compensation is necessary to provide employees with the mean to maintain a
reasonable standard of living. National Bank of Pakistan also provide it employees the most
needed job security for the security of future the bank also offers a delightful career to its
employees.
The staff members newly recruited also has the satisfactory academic background. The
salaries of the bank are quite adequate and they gradually increase with the passage of time and
promotion.

2.6.17 Benefit Package for The Employees

The bank provides many facilities to the employees in order to increase their productivity
and to work effectively and efficiently for the objectives of the bank. Some of the benefits are the
following.

CHAPTER-3 COMPANY ANALYSIS

3.1 Swot Analysis of NBP on the basis of HR
SWOT Analysis are also known as Situation Analysis typically includes a search for
strength, weakness, opportunity & threats that effects the overall performance of the
organization. Strengths are positive internal characteristics that the organization can exploit to
achieve its strategic performance goals. Weakness are internal characteristic that may be
inhibitor restrict the organization performance.

3.1.1 Strengths of NBP

National Bank of Pakistan NBP has some of its unmatched qualities that, which at length
makes its backing strengthened. Some of these points are as follows
The strengths of NBP are as follows:
NBP is one of the oldest banks of Pakistan; therefore, people have more confidence in the bank.
1. The use of SWIFT and other computer technologies have made NBP to cope with the
pressure of rising competition.
2. Considered to be a trustworthy and highly secured bank as it is also holds a large number of
government accounts.
3. Convenience for armed forces personnel and government servants as all salaries & pensions
of such categories are serviced by National Bank of Pakistan NBP.
4. The Bank has an existing department of HRD.
5. Bank staff is given three bonuses every year, i.e. on Eid-ul-Fittre, Eid-ul-Azha and the last
one is given annually.
6. The bank is having a number of subsidiaries for performing activities in and outside the
country.
7. The Bank is having a very good compensation plan so the employees are motivated.
8. Through the introduction of new technologies and methodologies by the HRD section NBP
has been in the field of facilitating the poor in different ways. The introduction of the new
training and the development Programs upgrades the staff skills and the motivational level.

3.1.2 Weaknesses of the NBP

Weaknesses, like strengths are a part of almost every organization. These weaknesses
points out the potential areas of improvements and make the organizational behavior intelligent.
A cumulative effort to overcome these flaws makes success possible.
During the internship period the weaknesses that generally surfaced and were visible at NBP are
as below.
1. All of its branches are not using tools of IT like computerization and ATM etc
2. Employees lack training in the consumer dealing.
3. Absence of a well planned marketing strategy to tap the vast market.
4. Standard of Customer services at NBP branches are well below the average level of services
offered by most local commercial banks.
5. The HR department is less dynamic than other contemporary banks e.g. Habib Bank, Muslim
Commercial Ban MCB and United Bank Limited UBL etc.
6. A number of branches are being closed every year, due to which employees working in less
profitable branches feel their jobs insecure.
7. Employees are lacking motivation and also fear of downsizing.
8. Training is not the only tool to upgrade the employees motivation and the inefficiency of the
work force. There can some other reason for the employees dissatisfaction i.e. promotion,
salary increment or the burden of the work (Exposure trips), so it one of the management
tool.
9. Employees have not access to upper management.
10. Performance appraisal is generally considered a motivational as well as evaluative tool. At
National Bank of Pakistan NBP its use is normally made in an exploiting fashion. Evaluation
is not made on the basis of the achievements or hardworking. Unfortunately it is made on the
basis of
11. Problems arising from Employees Union.
12. Non application of modern technology which has rendered the bank uncompetitive to
commercial banks which are presently using the latest technology.

13. The outlook of an organization plays important role in portraying its image to customers.
Similarly the image of the sections also matters because a section makes a structure of the
organizations but unfortunately the outlook of buildings and its departments are very poor.

3.1.3 Opportunities of the NBP:

Success, more than anything is all about converting into opportunity what everybody else
considers danger Opportunities, when exploited properly reap profits and earn success. They are
almost always a matter of time. They are to be sought, picked and made use of, before anybody
else gets up and do so. Its just about being smart and accurate. National Bank of Pakistan NBP
and HRD section also has some opportunities it can utilize and obtain good market position.
Some of the opportunities are hinted below.
1. The bank should be completely computerized like other banks.
2. Employees should be sent for training and seminars to get advanced knowledge about
banking.
3. Customer feedback on various products and services could be of immense help to NBP.
4. With the help of the latest technology and with such a large deposit base NBP could become
the no.1 bank in Pakistan. Therefore the bank should be completely computerized like other
banks.

3.1.4 Threats of NBP:

Threats are the unseen, futuristic, probable events that can occur and prove dangerous in
consequences. Every organization is faced by some category of threats in its operations and
functions. Opening new outlets, altering existing policies, designing fresh marketing strategies,
bringing change in physical structure, almost every activity that an organization does face some
kind of threats, just like the benefits it seeks.
The National Bank of Pakistan NBP also faces some threats, which can just prove minor
assumed fears; as well as can become events with grave consequences. The prevailing condition
indicates the following as the possible threats.
1. Political interference is a very important factor, which can threaten the credibility and
foundation of any organization. Bank is though a commercial institution and it to be free
from any kind of political grudges but unfortunately this is not customary in Pakistan.

2. The increased number of nationalized banks becoming privatized and foreign banks
operating in Pakistan is a major threat for NBP.
3. Unsatisfactory Human Resources as it is not observed properly.
4. The organization is facing a very crucial problem of a strong labor union. The leadership of
these associations are highly uncooperative in their attitude towards the achievement of
banks mission.
5. Lack of consistency of government policies often directly affects NBP and often destroys the
progress it has made in the past.

CHAPTER -4
4.1

CONCLUSION AND SUGGESTION

Conclusion
NBP is one of those organizations who is efficiently operating on their set procedures and

making profit. NBP fallow the guidelines of SBP in other words State Bank of Pakistan provides
policies to the banks operating in Pakistan and NBP is one of them.
I worked in the NBP Takht-e-Nasrati Branch, Karak and during my internship I learn a
lot about banking sector and practically do different tasks e.g Account opening, online funds
transfer and much more. Now I am quit capable to deal with customers.
By concluding this report I will say that NBP is a very good organization for long term
carrier because the staff is very friendly with each other and respectful too.

4.2

Suggestions

Determine the customer satisfaction and improve perceived levels of service.

1) A customers view of your business will help to increase banks profit.
2) Report competitive advantages to higher management.
3) Confirm the integrity of employees, company procedures and control.
4) Support an incentive program that will boost employees productivity and loyalty.
5) Identify core problems whether large or small.
6) Minimizing turnover and eliminate wasted time by employees through sound job design
7) Encouraging employees, who probably know more about their jobs than anyone else.
8) Practicing sound human relations and creating a work atmosphere that promotes job
satisfaction.
9) Hire new computer literate staff and increase work space.
10) Adequating of advanced Techniques.
11) Highly qualified staff is required.

REFERNCES

Kid, Well, David, Peterson, Richard and Black Well. (1993). Financial Institution,
Markets and Money. USA the Dyden Press Harcourt Brace Jovanovich College
Publisher.

Nasir, M. S. 1998. Banking Currency and Finance. Pakistan Kitab Markaz.

National Bank of Pakistan. 2010. Annual report 2010.

National Bank of Pakistan.2011.Annual report 2011.

National Bank of Pakistan.2012.Annual report of NBP 2012.

National Bank of Pakistan. www.nbp.com.pk. Accessed on 25th December 2012.

State Bank of Pakistan.