Holy Prophet Muhammad (P.B.U.

H)

The greatest social reformer

TO My Beloved Mother and Father
Who taught us?
The first word to speak
The first alphabet to write

And
First step to talk

To
All those from whom I learnt
Who always remains?
In our heart
Through out the whole span of our life and are
Nearest, dearest and deepest
To us

CONTENTS
INTRODUCTION TO NATIONAL BANK.
SENIOR MANAGEMENT.
MISSION STATEMENT.
FEATURES..
SERVICES OFFERED BY NBP..
GUIDE LINE OF CREDIT POLICY.
CREDIT DEPARTMENT
CREDIT CYCLE
OTHER RETAIL FUNCTIONS
NBP PRODUCTS.
CORPORATE INFORMATION..
FOREIGN EXCHANGE DEPARTMENT........
DOCUMENTARY CREDIT..
BRANCH LEVEL HEIRACHCY.
OPERATIONS MANAGEMENT.
SWOT ANALYSIS.
ATM FINDER.
DIRECTORS REPORT
FINANCIAL HIGHLIGHS..
COLLECTION POLICY..
TECHNOLOGY
NOTICE OF 55TH ANNUAL GENERAL MEETING.
BALANCE SHEET

PROFIT & LOSS STATEMENT

CASH FLOW STATEMENT.

INTRODUCTION
National Bank of Pakistan maintains 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.

We aim to be an organization that is founded on

Growth through creation of sustainable relationships with our customers.

Prudence to guide our business conduct.
A national presence with a history of contribution to our communities.

We shall work to

Meet expectations through Market-based solutions and products.

Reward entrepreneurial efforts.
Create value for all stakeholders.

We aim to be peopling who

Care

about relationships.
Lead through the strength of our commitment and willingness to excel.
Practice integrity, honesty and hard work. We believe that these are measures of
true success.

We have confidence that tomorrow we will be

Leaders in our industry.

An organization maintaining the trust of stakeholders.

An innovative, creative and dynamic institution responding to the changing needs of the
internal and external environment

S Ali Raza
Chairman & President

Dr. Waqar Masood Khan

Director

Iftikhar Ali Malik

Director

Syed Shafqat Ali Shah Jamote

Director

M. Zubair Motiwala
Director

Sikandar Hayat Jamali

Director

Azam Faruque
Director

Ekhlaq Ahmed
Secretary Board of Directors

SENIOR MANAGEMENT

Amer Siddiqui

SEVP & Group Chief, Retail Banking Group

Dr. Asif A. Brohi

SEVP & Group Chief, Operations Group

Imam Bakhsh Baloch

SEVP & Group Chief, Audit & Inspection Group

Masood Karim Shaikh

SEVP & Group Chief, Corporate & Investment

Banking Group

Dr. Mirza Abrar Baig

SEVP & Group Chief, Human Resources

Management & Administration Group

Muhammad Nusrat Vohra

SEVP & Group Chief, Treasury Management

Group

Shahid Anwar Khan

SEVP & Group Chief, Commercial Banking

Group

Ziaullah Khan

SEVP & Group Chief, Compliance Group

Amim Akhtar

EVP & PSO to the President

Ekhlaq Ahmed

EVP & Secretary Board of Directors

Mrs. Khurshid Maqsood EVP & Divisional Head Employee Benefits,

Ali
Disbursements & Trustee Division
Nadeem Anwar Ilyas

EVP/Divisional Head, Special Assets

Management Division

Syed Farhan Ahmed

EVP / CFO, Financial Control Divisional

Tahira Raza

EVP & Group Chief, (A) Risk Management

Group

Tahir Yaqoob

EVP & Group Chief, Overseas Coordination &

Management Group

Atif Hassan Khan

SVP & Group Chief (A), Information Technology

Group

To be recognized in the market place

by Institutionalizing a merit &
performance culture, Creating a
powerful & distinctive brand identity,
Achieving top-tier financial
performance, and Adopting & living
out our core values.
MISSION STATEMENT
VISION AND GOALS

To be the pre-eminent financial

institution in Pakistan and
achieve market recognition both
in the quality and delivery of
service as well as the range of
product offering

SENIOR MANAGEMENT
Masood Karim Shaikh SEVP & Group Chief, Corporate & Investment Banking
Group and CFO
Shahid Anwar Khan

SEVP & Group Chief, Commercial & Retail Banking

Group

Dr. Asif A. Brohi

SEVP & Group Chief, Operations Group

Muhammad Sardar
Khawaja

SEVP & Group Chief, Audit & Inspection Group

S. M. Rafique

SEVP & Secretary Board of Directors

Imam Bakhsh Baloch SEVP & Group Chief, Compliance Group

Derick Cyprian

SEVP & Group Chief, Special Assets Management

Group

Amim Akhtar

EVP & PSO to the President

Javed Mehmood

EVP & Group Chief, Risk Management Group

Muhammad Nusrat
Vohra

EVP & Group Chief, Treasury Management Group

Nadeem A. Dogar

EVP & Group Chief, Information Technology Group

Dr. Mirza Abrar Baig

Group Chief, Human Resources Management &

Administration Group

Uzma Bashir

Group Chief, Organization Development & Training

Group

FEATURES
National Bank of Pakistan is an established bank. It has some special features with the help of those
it is growing rapidly.

Outstanding Work Environment

As the work environment plays a great role in this competition age, so the bank has good work
environment. All the people work with co-operation; managers are so kind that each problem can be
discussed with them.

Efficiency
Employees at National Bank of Pakistan are quite efficient. They work more the working hours and
it is all according to their will. It also shows their loyalty, commitment to organization.

Customer Services

All the customers are entertained individually. Same kind of behavior and attentions is given to all
customers.

Complaint Box
Getting ideas for improvement from the customer side is a new idea and that is working

Employee Benefits
Employees are given the benefits like bonus, gratuity funds, increments, house rents, medical and
conveyance allowances.

Computerized working Environment

In the bank, all the work is done remotely. All the entries are made using the systems which are
internally and externally integrated. This increase efficiency of the bank.

SERVICES OFFERED BY NATIONAL BANK OF PAKISTAN

INTERNATIONAL BANKING
National Bank of Pakistan is at the forefront of international banking in Pakistan which is
proven by the fact that NBP has its branches in all of the major financial capitals of the
world. Additionally, we have recently set up the Financial Institution Wing, which is placed
under the Risk Management Group. The role of the Financial Institution Wing is : To effectively manage NBPs exposure to foreign and domestic correspondence
Manage the monetary aspect of NBPs relationship with the correspondents to
support trade, treasury and other key business areas, thereby contributing to the
banks profitability
Generation of incremental trade-finance business and revenues
NBP offers:

The lowest rates on exports and other international banking products

Access to different local commercial banks in international banking

DEMAND DRAFTS

MAIL TRANSFERS

PAY ORDER *

If you are looking for a safe,

speedy and reliable way to
transfer money, you can now
purchase NBPs Demand
Drafts at very reasonable
rates. Any person whether an
account holder of the bank or
not, can purchase a Demand
Draft from a bank branch

Move
your
money
safely and quickly using
NBP Mail
Transfer
service. And we also
offer
the
most
competitive rates in the
market.

NBP
provides
another
reason to transfer your
money using our facilities.
Our pay orders are a
secure and easy way to
move your money from one
place to another. And, as
usual, our charges for this
service
are
extremely
competitive.

TRAVELER'S CHEQUE

Negotiability:

Pak Rupees
Travelers
Cheques are a
negotiable
instrument
Validity:
Availability:
Encashment:
Limitation:
Safety:

There is no
At 700 bran
At all 400 br
No limit on p
NBP Trave
our money

LETTER OF CREDIT

COMMERCIAL FINANCE

NBP is committed to offering

its business customers the
widest range of options in the
area of money transfer. If you
are a commercial enterprise
then our Letter of Credit
service is just what you are
looking for. With competitive
rates, security, and ease of
transaction, NBP Letters of
Credit are the best way to do
your business transactions.

Let us help make your dreams become a reality

Our dedicated team of professionals truly
understands
the
needs
of
professionals,
agriculturists, large and small business and other
segments of the economy. They are the
customers best resource in making NBPs
products and services work for them.

FOREIGN REMITTANCES
To facilitate its customers in the area of Home Remittances, National
Bank of Pakistan has taken a number of measures to:
Increase home remittances through the banking system

Meet the SBP directives/instructions for timely and prompt

delivery of remittances to the beneficiaries

PakRemit
Remit funds
from USA to
Pakistan

New Features:
The existing system of home remittances has been revised/significantly improved and welltrained field functionaries are posted to provide efficient and reliable home remittance
services to nonresident Pakistanis at 15 overseas branches of the Bank besides Pakistan

International Bank (UK) Ltd., and Bank Al-Jazira, Saudi Arabia.

Zero Tariffs: NBP is providing home remittance services without any charges.
Strict monitoring of the system is done to ensure the highest possible security.

Special courier services are hired for expeditious delivery of home remittances to the
beneficiaries.

SWIFT SYSTEM
The SWIFT system (Society for Worldwide Inter bank Financial
Telecommunication) has been introduced for speedy services in
NBP
the area of home remittances. The system has built-in features
SWIFT
of computerized test keys, which eliminates the manual
Network
application of tests that often cause delay in the payment of
Click here
home remittances.
The SWIFT Center is operational at National Bank of Pakistan with a universal access
number NBP-PKKA. All NBP overseas branches and overseas correspondents (over 450)
are drawing remittances through SWIFT.
Using the NBP network of branches, you can safely and speedily transfer money for our
business and personal needs.

SHORT TERM
INVESTMENTS
NBP now offers excellent rates of
profit on all its short term investment
accounts. Whether you are looking
to invest for 3 months or 1 year,
NBPs rates of profit are extremely
attractive, along with the security
and service only NBP can provide.

N.I.D.A
National Income Daily Account
The scheme was launched in
December 1995 to attract corporate
customers. It is a current account
scheme and is part of the profit and
loss system of accounts in operation
throughout the country.

EQUITY INVESTMENTS
NBP has accelerated its activities in the stock market to
improve its economic base and restore investor confidence.
The bank is now regarded as the most active and dominant
player in the development of the stock market. NBP is
involved in the following:
Investment into the capital market
Introduction of capital market accounts (under
process)
NBPs involvement in capital markets is expected to increase
its earnings, which would result in better returns offered to
account holders

MODE OF
CALCULATION:
AVERAGE BALANCE
DURING A CALENDAR
MONTH

INTERNATIONAL BANKING

National Bank of Pakistan is at the forefront of international banking in Pakistan which is

proven by the fact that NBP has its branches in all of the major financial capitals of the
world. Additionally, we have recently set up the Financial Institution Wing, which is placed
under the Risk Management Group. The role of the Financial Institution Wing is : To effectively manage NBPs exposure to foreign and domestic correspondence
Manage the monetary aspect of NBPs relationship with the correspondents to
support trade, treasury and other key business areas, thereby contributing to the
banks profitability
Generation of incremental trade-finance business and revenues
NBP offers:

The lowest rates on exports and other international banking products

Access to different local commercial banks in international banking

DEMAND DRAFTS

MAIL TRANSFERS

PAY ORDER *

If you are looking for a safe,

speedy and reliable way to
transfer money, you can now
purchase NBPs Demand
Drafts at very reasonable
rates. Any person whether an
account holder of the bank or
not, can purchase a Demand
Draft from a bank branch

Move your money

safely and quickly
using NBP Mail
Transfer service. And
we also offer the most
competitive rates in the
market.

NBP provides another

reason to transfer your
money using our facilities.
Our pay orders are a
secure and easy way to
move your money from one
place to another. And, as
usual, our charges for this
service are extremely
competitive.

TRADE FINANCE OTHER BUSINESS LOANS

AGRICULTURAL FINANCE
NBP provides Agricultural Finance to
solidify faith, commitment and pride of
farmers who produce some of the best
agricultural products in the World.

Agricultural Finance Services:

I Feed the World program, a new
product, is introduced by NBP with the
aim to help farmers maximize the per
acre production with minimum of
required input. Select farms will be
made role models for other farms and
farmers to follow, thus helping farmers
across Pakistan to increase production.

Agricultural Credit:
The agricultural financing strategy of
NBP is aimed at three main objectives:

Providing reliable infrastructure

for agricultural customers
Help farmers utilize funds
efficiently to further develop and
achieve better production
Provide farmers an integrated
package of credit with supplies
of essential inputs, technical
knowledge, and supervision of
farming.

Agricultural

Credit

(Medium

CORPORATE FINANCE
Working Capital and
Term Loans:

Short

NBP specializes in providing Project

Finance Export Refinance to
exporters Pre-shipment and Postshipment financing to exporters
Running finance Cash Finance
Small Finance Discounting & Bills
Purchased Export Bills Purchased /
Pre-shipment
/
Post
Shipment
Agricultural Production Loans

Medium term loans and Capital

Expenditure Financing:
NBP provides financing for its clients
capital expenditure and other longterm investment needs. By sharing the
risk associated with such long-term
investments, NBP expedites clients
attempt to upgrade and expand their
operation thereby making possible the
fulfillment of our clients vision. This
type of long term financing proves the
banks belief in its client's capabilities,
and its commitment to the country.

Loan Structuring and

Term):

Production and development

Watercourse improvement
Wells
Farm power
Development loans for tea
plantation
Fencing
Solar energy
Equipment for sprinklers

Farm Credit:
NBP also provides the following
subsidized with ranges of 3 months to 1
year on a renewal basis.

Operating loans
Land improvement loans
Equipment loans for purchase of
tractors, farm implements or any
other equipment
Livestock loans for the purchase,
care, and feeding of livestock

Production Loans:
Production loans are meant for basic
inputs of the farm and are short term in
nature. Seeds, fertilizers, sprayers, etc
are all covered under this scheme.
If you require any further information,
please do not hesitate to e-mail us.

Syndication:
National Banks leadership in loan
syndicating stems from ability to
Forge strong relationships not only
with borrowers but also with bank
investors. Because we understand our
syndicate partners asset criteria, we
help borrowers meet substantial
financing needs by enabling them to
reach the banks most interested in
lending to their particular industry,
geographic location and structure
through syndicated debt offerings. Our
syndication
capabilities
are
complemented by our own capital
strength and by industry teams, who
bring specialized knowledge to the
structure of a transaction.

Cash Management Services:

With
National
Banks
Cash
Management Services (in process of
being set up), the customers sales
collection will be channeled through
vast network of NBP branched spread
across the country. This will enable
the customer to manage their
companys total financial position right
from your desktop computer. They will
also be able to take advantage of our
outstanding
range
of
payment,
ejection, liquidity and investment
services. In fact, with NBP, youll be
provided everything, which takes to
manage your cash flow more
accurately.

Operations
Manager

Branch Manager

Mahar shukat

Ch.Ijaz Hussian

Credit & F.Ex Incharge

Shahid Gardezi

Foreign
Exchange Zamin

Coporate Incharge

Mubashir Pasha

Raza

compliace
Officer Ashraf
nayab

Remittance

Manzar
Gillani

Accounts
Incharge

Govt.
Section
Malik Hanif

Accounts opening
Clearing

Tariq Ameer

Haji M. Arshad

Cash Depatt Kh.

Saeed

GUIDE LINE OF CREDIT POLICY

Total outstanding financing facilities by banking company to single person shall not at
any point of time exceed 30% of banks unimpaired capital.
No banking company shall make loans or advances against the security of its own
shares.

No banking company shall grant unsecured loans/advances on the guarantee of

Any of its directors.

Family member of director

Any private company in which banking company is interested.

In arriving at exposure per person weight age of 50% shall be given to

Documentary credit opened by bank.

Guarantees/bonds other than repayment guarantees.

In arriving at per party exposure 90% of

Deposits of party with bank under lien.

Face value of FIBs lodged by the party as collateral.

Pak rupee equivalent of face value of special US Dollar bonds converted at official rate,
FIBs lodged by the party as collateral shall be deducted.

Aggregate exposure of bank against all its clean facility shall not at any point exceed
the amount of banks capital and general reserve.

Advances given to the employees of bank in accordance with their accommodation

availed by any borrower from banks / financial institution does not exceed 10 times
of capital and reserve of the borrower.

A borrower who is prepared to inject fresh equity irrespective of the fact that its equity
is negative is eligible to obtain finance from bank to the extend of 10 times fresh
injected equity.

No banking company allow financing facilities whether fund based / non funded against the shares
of companies which are not in central depository system

CREDIT DEPARTMENT
Credit means belief or trust. The quality of being credible or trustworthy. Other words we can use
for credit as trust in ones integrity in money matters and ones ability to meet payment when due.
The earning of National Bank of Pakistan is chiefly derived from interest charge and discounts. This
department is the revenue generating department. Credit department basically has three segments:
1. Credit marketing department
2. Credit administration department
3. Trade finance department
Advance department deals with extending loans to customers. State Bank of Pakistan (SBP) has
prescribed regulations which are called PRUDENTIAL REGULATIONS. Every bank has to
follow these regulations. If any bank violates the regulations it should be liable for penalties under
the core spirit of SBP
The National Bank of Pakistan limited the credit is extended on the basis of these rules and
regulations. These regulations tells the terms and conditions under which you can extend loans to the
borrower and to what extend.

CREDIT FACILITIES
At National Bank of Pakistan two types of credit facilities are available
1. Funded facilities
2. Non funded facilities

(A) FUNDED FACILITIES

These are the facilities in which there is direct involvement of cash fund. Following are the funded
facilities.
1. Current Finance (CF )
2. Term Finance ( TF )
3. Finance against foreign bills FAFB
4. Finance against packing and credit FAPC
5. Finance against imported merchandise FIM
6. Finance against trust receipt FATR
7. Payment against document PAD

(B)

NON-FUNDED FACILITIES

The facilities where there is no direct involvement of banks fund. Following are the non-funded
facilities.
1. Letter of credit L/C
2. Letter of guarantee L/G

CREDIT CYCLE
Request

Processing Information

Decision

Offer

Security

Scrutiny

Documentation

Disbursement

Monitoring

Repayment

Renewal

Enhancement

STEP I
Credit cycle start with request letter. When customer gives a request letter to bank that he want that
much amount of credit from bank.

STEP II
When bank receive the request letter form customer. The officer of credit marketing department
make credit line proposal of client. It is essential that the proposal define clearly the purpose of
facility, the source of repayment, the agreed repayment. Schedule, the value of security and customer
relationship consideration implicit in credit division.
The security to be accepted as collateral for the facility and all the documentation relating to the
security of facility must be in the approved from all the procedures and required documentation must
be completed all these things all feed in CLP.
CLP is basically a medium to present proposal for seeking approval of credit line in client. In CLP
they feed complete data of the client that include:

Credit Limit
Legal status of company

History of relationship / introduction with bank

Line of Business

Background of proprietor / owner / partner

Purpose of facility

Security

Along with it they include borrower basic fact sheet

CCA

Prudential checklist

STEP III
After the processing of information, credit officer decided whether to give credit to that person or
not. They also check whether its security has any market value or not. Decision is taken by the
branch credit committee (BCC ). If the proposal is within the discretionary powers of committee the
proposal may approve after revaluation of credit risk.
It CLP beyond discretionary power of branch credit committee the CLP is sent to credit division at
head office along with supporting documents and recommendation of branch credit committee.

STEP IV
When decision is made now credit officer offer that we will give you loan up till that limit not more
than that. Up till now credit marketing officer does all the process. After that credit administration
officers work start.
Credit administration department basic function is to fulfill the requirement of documents as a
security for credit. Different types of documents are required for pledging, mortgage and
hypothecation.

Documents required for C.F. Hypothecation

Legal stamp documents required:
Promissory note
Letter of hypothecation

 Letter of guarantee
Letter of continuity
Agreement of finance

Letters without stamp:

Letter of arrangement
Letter of disbursement
Letter of authority
SBP regulation undertaking

Documents required for C. F. Pledge

Legal stamp documents required:
Agreement of finance
Promissory note
Letter of guarantee
Memorandum of deposit of title deed
Letter of hypothecation
Letter of continuity

Letters without stamp:

Letter of arrangement
Letter of disbursement
Letter of authority
SBP regulation undertaking

Property Documents for Mortgage

Legal advice about property documents

Title deeds ( Original documents of property )

Aux sajra ( Location site map )

NEC ( Non-Encompass Certificate )

PT 1 in favor of borrower

PT 1 in favor of bank

Mo TD ( Mortgage of title deeds )

Agreement to create mortgage

Letters submit to ETOS & register

Irrevocable general power of authority ( IGPA )

Valuation report

STEP V
Here documents are checked security is properly checked by the value. Value tells the security. Here
following characteristic of security are checked.

Market value
Consistency

Salable

Storable

Transferable

Transportation

STEP VI
On completion of legal documents and security arrangements and receipt of completion certificate
from recognized legal counsel, the bank according to the approved schedule prepared by bank after

obtaining confirmation of other payments have been funds from sponsors other source viz, equity
fund from sponsors release of fund by other co financiers etc. after the valuation of security the loan
is disbursed to customer.

STEP VII
Responsibility lies to branch manager to monitor the overall profit and risk aspect of credit portfolio
in accordance with criteria setout in banks credit policy. After the disbursement credit
administration officer monitor the performance of customer whether he is fulfilling the requirement
or not. He is paying markup or not for which purpose he has taken the loan whether he is utilizing
loan for that purpose or not.

STEP VIII
After specific time period credit officer see what customer want whether he wants to renew / revise
or writ off it. If he wants to renew it he said to officer to renew it with same limit.

COLLECTION POLICY
The loan officer will be responsible for the collection of finance installments for initial 60 days from
the date of default. After that, the case will be handed over to the collection officer provided by the
Outsourced Collection Agency.

Collection Structure
The country collections Head will manage overall collections. Under the country Head there will be
Regional collections Managers (RCM). The collection officer will directly report to the RCM and
indirectly report to the Branch Manager.
The collection process is to be divided into following four categories:
Front End
Mid Range
Hard Core
Repossession

Selling Skills
The New Model of Selling
Selling has changed dramatically over the last few decades, primarily because customers
have changed
Customers are far more knowledgeable about products and services available today then ever
before.
Competition today is far more stronger than has ever been
There are far more products and services available to satisfy customers needs then ever
before
Customers are more sophisticated and demanding then they have ever been, for even the
smallest products
Acceptance- satisfaction a deep subconscious need of every person
Acceptance must be established first
You express your acceptance with unconditional positive regards, no judgment!
Smile be glad to see him or her
Agreeability- one of the most desirable qualities in human relation
Never tell him hes wrong in his general opinion
If the issue is unimportant, just let it pass
If the issue is important, use third party question to avoid appearing argumentative.

SEVEN KEYS TO BUILDING CUSTOMER RELATIONSHIP

Positive Mental Attitude- the degree to which you are a Cheerful Person
Always look for the good in every person and situation
Always interpret things positively to yourself
Smile, relax, be friendly with every one you meet
Courtesy- the degree to which you are polite and correct in your interaction with others

Be polite to everyone you meet

Admiration raises the self esteem of others and builds better relations
Compliment people on their possessions at home and work
Compliment people on their accomplishments- their degrees, awards or other form of
recognition.
Appreciation-a powerful way to build high quality relationships
Develop an attitude of gratitude in every thing you do
Thank everyone you meet for every thing they do for you
Always say thank you for your time to your prospect and your customers
Send thank you notes, cards and gift regularly

OTHER RETAIL FUNCTIONS OF National Bank of Pakistan

National Bank offering Advance salary benefits
We all are aware that NBP advance salary is the market leader in Personal Loan category and is
considered the largest Personal Loan Product of the country with loan disbursement of over Rs.80
Billion. One of the foremost reasons for this astonishing success is the fact that NBP kept on
modifying the product parameters as and when required by keeping an eye on the changing market
conditions and varying competition. The Bank has decided to make following changes in the product
parameters to further improve the operational efficiency and Turn around Time (TAT) and to increase
the disbursement pace.

DOCUMENTS REQUIRED
1. Borrower must be employee of the Federal /Provincial Government / Semi Government /
Autonomous body / NBP.
2. CNIC copies of the borrower
3. Salary Slip indicating detail of salary of the borrower
4. Attested copies of CNIC by gazetted officer
5. Branch has obtained CIB Report of the borrower
6. Branch has obtained duly signed and stamped BBFS.
7. Customer written declaration giving details of all financial institutions.
8. DDO is signature has been verified
9. Loan will be approved after receipt of at least one salary in account.
10. The sanctioned amount of Advance Salary Finance doesnt exceed 20 times.
11. The expiry of the NBP Advance salary is at least 6-months before retirement.
12. The repayment period does not exceed 60 months.

13. Three undated cross cheques in favor of NBP covering full amount of Finance have been
obtained as security.
14. All documents have been obtained as per the requirement of NBP Advance salary scheme
including undertaking as per scheme.
15. Documents have been recorded in Document Execution Register/ MISC security Register.
16. NBP offers mark-up 15% on principal amount at fixed rate.
17. There are bi variable rates offered by NBP for this service.

SAIBAAN SCHEME
NBP SAIBAAN DOCUMENTS FOR SALARIED CLASS

Application form (in original).

CNIC copies of the applicant.

Two references CNIC copies.

Photographs of the applicant(06)

Employment card copy.

Appointment letter.

Service Letter / Certificate.

Salary cum service certificate.

Last three Months salary Certificates.

Branch Accounts statement last six months.

Last Three Month Utility Bills

Approved Map

Original property Documents.

Aks Sajra.

Fard Malkiat

Naqal Intiqal

Khasra Verification report

National Evaluation Companys report.

PT-I

Sale Deed/ Registry.

Processing Fee pay order for Rs.500/=

Fee for Evaluator pay order ( in case of construction Rs.2000/= (in case of Purchase
Rs.3000/=

Processing Fee pay for legal opinion order for Rs.1000/=

Borrower Basic Facts Sheet

Confidential Report

ALICO DECLARATION FORM.

NBP SAIBAAN DOCUMENTS FOR BUSINESS CLASS

o Application form (in original).
o CNIC copies of the applicant.
o Two references CNIC copies.
o Photographs of the applicant(06)
o Business Related Documents.
o Last three years Business Record.
o Branch Accounts statement last one year.
o Last three month Utility Bills.
o ICIL- Department Verification ( Income Estimation)
o Approved Map
o Registry / Sale Agreement
o Aks Sajra.
o Fard Malkiat
o Naqal Intiqal
o Khasra Verification report
o NOC
o National Evaluation Companys report.
o PT-I
o Sale Deed/ Registry.

o Processing Fee pay order for Rs.1000/=financing below Rs. 1 Million.

o Fee for Evaluator pay order Rs.3000/=financing between Rs. 1 to Rs. 4 Million.
o Processing Fee pay for legal opinion order for Rs.6000/= financing above Rs.4
Million.
o Fee for Evaluator pay order ( in case of construction Rs.2000/= (in case of Purchase
Rs.3000/=
o Borrower Basic Facts Sheet
o Confidential Report
o ALICO DECLARATION FORM.

National Bank of Pakistan

KAROBAR
Under
Presidents Rozgar Scheme
OBJECTIVE
To launch SUSTAINABLE financial products that are COMMERCIALLY VIABLE for NBP and
the target market i.e. young and unemployed citizens of Pakistan enabling these citizens to earn at
least the minimum wage on a fast track, prudent and transparent basis.

TARGET MARKET
The scheme is offered to:
1. Eligible young citizens of Pakistan falling within an age group of 18-40 years.
2. Unemployed Applicant.
3. Applicant to be residing in the same area/ city for at least 2 years
4. Applicant having CNIC

FINANCE APPLICATION APPROVAL PROCESS

Finance application approval process cant be initiated until the satisfactory completion of following
steps:
a) Completion & checking of documents.
b) Conformity with eligibility criteria
c) Availability of References/ Guarantors
d) Satisfactory credit report i.e. e-CIB
e) Satisfactory CNIC verification from NADRA
f) Satisfactory telephonic & physical verification.

National Bank of Pakistans product details are given below:

NATIONAL BANK OF PAKISTANS PRODUCTS

Unprecedented Safety - Unprecedented
Return
Premium Aamdani Home Page

Unprecedented Safety - Unprecedented Return

Premium Saver Home Page

President's Rozgar Scheme - Easy financing

for self employment
Karobar Home Page
Affordable, Flexible & Convenient home
financing for all
Saibaan Home Page

Take upto 20 Advance Salaries - Affordable

Installations from 1 - 60 months
Advance Salary Home Page

One Card does it all - ATM plus Debit Card in

one
Cash Card Home Page

Invest with Confidence - Marginal Finance

Facility
Investor Advantage Home Page

Meet your need for ready cash against your idle

gold jewelry with no minimum limits
Cash n Gold Home Page

NBP KISAN Taqat

Kisan Taqat Home Page

NBP's affordable agricultural program offers you

a wide range of financing
Kisan Dost Home Page

Knitting Links - AASAN Banking

Online Home Page

NBP Helpline
0800-80080
from 8:30 am to 10:00 pm

CORPORATE INFORMATION
COMPANY SECRETARY

Ekhlaq Ahmad

AUDIT COMMITTEE
Muhammad Arshad Chaudary
Syed shafqat Ali Shah Jam
M. Zubair Motiwala

AUDITORS
M. Yousaf Adil Saleem & Com
Chartered Accountants
Taseer Khalik & com
Chartered Accountants

HEAD OFFICE
NBP Building I.I Chandrigarh
Road Karachi

LEGAL ADVISORS
Mandiwala & zafar
Advocates & Legal Consultants

FOREIGN EXCHAGE DEPARTMENT

The transfer of credits to a foreign country to settle debts or account between resident of home
country and those of the foreign country or the Foreign bills currencies etc used to settle such
accounts.
Foreign Exchange department deals within exports imports and Money transfer.

National Bank of Pakistan acts as importer bank as well as exporter bank for different parties who
are interested in the business of export & import.

DEFINE IMPORT
All goods and services brought into a country that were purchased from organizations located in
other countries.

DEFINE EXPORT
All goods and services sent from one country to another country.

Documents required for Export

The person who is exporting goods to the foreign countries requiring the following documents.
National tax number
Registration with export promotion Bureau
Sales tax registration
Commercial Invoices
Bill of Lading
Packing List
Bill of exchange
Promissory Note
E-Form
Letter of Credit
Certificate of origin
Beneficiary certificate
After compiling the entire task by resident country that is exporting goods in favor of foreign
importer now it will be his turn to make payment.

TYPES OF LETTER OF CREDIT

Importer bank issues a document on request stating that it will pay the exporter when exporter fulfill
the terms of letter of credit. Letter of credit is of two types:

1. At Usance L/C
2. At Sight L/C

SIGHT L/C
Requires the importer / importing bank to pay as soon as it receives the clean documents from
exporter.

USANCE L/C
It extends time period (30days, 60days, 90days, 120days, 150days, & 180days).to importing bank
for payment. After specified time period importer have to pay.
Letter of guarantee gives in behalf of person that I will pay in case of default.

SWIFT (Society for world wide inter bank financial

telecommunication)
It is the only network. No institute involved among it.

CERTIFICATE OF ORIGIN
This certificate shows that goods are from Pakistan.

COVERING SCHEDULE

If in covering schedule, it is given that Please remit proceed to our Karachi office account #
574348812 with (Standard Chartered Bank) USA for onward credit to National Bank of Pakistan.

BENEFICIARY CERTIFICATE
If L/C requires some information as proof of anything from exporter then exporter has to present
beneficiary certificate for that proof.

E-FORM
E-form has four copies:
One for custom officer
One for exporter
Triplicate copy for SBP
Duplicate copy for bank
Bank reporting or duplicate and triplicate is done by bank. Custom officer should clear product.
(Date is given on the foot form).

PAYMENT FROM IMPORTER BANK

It is the choice of importer to open L/C from any bank and the bank from which L/C is opened can
also refer to some other bank for payment. So bill of exchange is sent to refer bank and other
documents are sent to L/C opening bank.

IMPORTS
L/C is opened by the importer. There are two types of L/C:
a) Revocable L/C
b) Irrevocable L/C

NECESSARY REQUIREMENTS
If place of issue and port of loading is different on bill of lading, then along with the stamp of
shipment on board, vessel name and port of shipment is written.

A. Issue date of bill of lading shipment on board.

B. There should not be cutting on bill of lading without authentication.
C. Bill of lading should show capacity of agent. If bill of lading can be taken by the agent of
Importer Company, then his name should be mentioned on bill of lading.
D. Original GSP should be presented.
E. If TT reimbursement is not acceptable, it means bill of lading is necessary.
F. When documents are received for export, do enter into lodgment register.

DOCUMENTS FOR IMPORT

I. Performa invoice signed by importer
II. category pass book copy attested by any bank
III. L/C opening application filled in by the customer
IV. Importer registration with export promotion bureau
V. Annexure
VI. Verification of signature by S.S. Card
VII. L/C issued on basis of L/C application form
VIII. Insurance if covered by buyer
IX. Insurance cover note
X. Insurance policy

DOCUMENTARY CREDIT
TRADE SERVICE DEPARTMENT
National Bank of Pakistan has his full fledged trade service department. As a credit instrument and
as a means of making as a payment the documentary credit is an essential instrument for conducting
word trade today. A documentary credit represents a commitment bank to pay the seller of goods or
services a certain amount provided present stipulated documents evidencing the shipment of the
goods with prescribed period of time.
For the cases of imports or exports first the parties have to do upon a sale contract regarding the term
and condition of sale. One method of payment is by L/C which is secured and now a day mostly uses
the business.
Letter of credit is under taking by opening bank that it will make payment if documents are as per
terms of LC.

Four parties are involved in Letter of Credit

1. Applicant
Importer
2. Beneficiary
Exporter
3. Issuing Bank
Bank of importer
4. Advising bank
Bank of importer
According to import policy, no import is valid without import license which is issued by the chief
controller of import and export or we can say export promotion bureau. If a person desires to take up
import trade must get his name, his firm or his limited company, registered with EPB. On being
granted registration certificate, he will be eligible to import goods according to import policy. There
is no special condition of eligibility for registration. They only requirement is that he should be a
Pakistani and must be registered with income tax department.

L/C OPENING PROCEDURE

When the importer obtained import license, then bank will open letter of credit. A letter of credit is
undertaking by LC opening bank to put an agreed sum of money to sellers bank of behalf of the
buyer of the goods under clearly defined terms and conditions.
Pakistani banks open only irrevocable LC. An essential feature of the irrevocable LC is that it can
not be modified, altered, amended, or canceled without the prior consent of all the parties. Party
comes to the bank and fills the form which is provided on the payment of Rs.100. This form is filled
by the party and is return to the bank, it includes details like.
Name of company
Address

Country of origin
Branch name
Quantity
Shipment to
Insurance company
Shipment from

One thing should also be submit which is INDENT. If the foreign party has any agent they will issue
the indent with following details:
o To Messer
o Importers, etc

DOCUMENTS REQUIRED FOR L/C OPENING

When the bank opens L/C, it requires following documents:
a) Valid import license
b) Performa invoice
c) Importer should be Pakistani
d) Letter of undertaking from importer
e) Insurance cover.
An important point which the bank will consider before opening of LC is that sufficient funds be
available in the LC openers accounts. At the time of establishment the LC the opening bank
generally retains a maximum margin to safe guard its own commitment.
The margin may vary from nil to 100% according to the nature of commodities and it also depends
upon the party. At the item of establishing the LC opening bank charges bank commission, postage
and other charges from the LC opener account. Another main important point is that value of LC
should not increase the value of import license.
After all the documents are being checked and signs are verified by the bank. A sanction slip is
attached with each form so that the approval can be gained from the manager of the bank.
After the approval is made four copies are prepared and the entries are made on the computer and the
printout is taken the margin amount is checked from the importer account and if the amount is not
found then L/C is not opened and the party is informed about the situation. On the deposit of the
margin then L/C is opened LC limit if set by the bank are also checked.
After the LC is opened following entries are made:
A. LC opening register
B. Margin / Liability Account Register.

PAYMENT TO SELLER

The negotiating bank upon receiving the documents from the seller checks the documents according
to terms and conditions of credit upon satisfying it self of this the negotiating bank makes payment
to the seller if sight credit. It then forwards the documents to the opening bank and reimburses it self
through the opening banks account with itself.

DOCUMENTS RECEIVED BY THE OPENING BANK

Importer bank or opening bank receives the following documents from the exporters bank or
negotiating bank.
I. Bill of exchange
II. Invoices
III. Bill of lading
IV. Certificate of origin
V. Packing list
VI. Insurance

OPERATIONS DEPARTMENT
Operations department of the National Bank of Pakistan is responsible for the overall operations of
the bank.
Operations department has following segments.
a) Cash
b) Clearing
c) Remittance
d) Account opening
e) Accounts department
The details of those departments that are controlled under operation department are as under.
a) Account opening
b) Cash department
c) Clearing
d) Remittances

Account opening department

It is the most important department of bank. Following procedure is adopted for this purpose.

Procedure of Account Opening

It is very simple and quick procedure. A person who wants to open an account must have the
introduction of banks staff or an already existing account holder of bank. The customer is required
to fill an account opening form. Then signatures of the Introduce are verified from S.S. Card before
opening account.
They also have to give identity letter
CNIC copies
Passport size photograp

Following Factors Prior To Opening of Account Should

Be Consider
1.
2.
3.
4.

The suitability of the perspective customers.

Verification of customer credentials.
The perspective possibility of profitability of the relationship.
The proposed relationship does not violate:
A. SBP rules and regulations
B. Applicable local laws
C. The banks internal policies

Current Account
1. No limitation on frequency or amount transaction
2. No profit payable

Saving Account
1. Profit is payable
2. No of withdraw restricted
3. Large amount of withdraws requires 10 days.

General Principles
1. No account will be opened on fictitious name.
2. All documents necessary required for opening account must be taken after verification from
original.
3. No operation of account should be allowed & check book must not be issued until all
formalities are confirmed.
4. Genuineness of introduction should be properly ensured.
5. All information of AOF should be filled at front of concerned officer.

TYPES OF ACCOUNTS
The bank deals in different accounts opening;
1. Individual Account
2. Joint Account
3. Business Account
4. Partnership Account

SPECIAL TYPES OF ACCOUNTS

These types of accounts only can establish after approval of system and operation division head
office:o Trust Account
o Account of executors/ administrators
o Account of liquidators
o Accounts of local authorities/ municipals.

CHEQUE BOOK ISSUENCE

When the Account is opened, then the customer is given a cheque book to sign upon and withdraw
money.

Cash Department
Cash department of National Bank of Pakistan works under the operation department.
This department is given the complete responsibility of cash, as result of transaction in touch local
and foreign currencies. It is also responsibility for the book keeping of these transactions and the
safe custody of cash. Out of five counters of cash department one counter is fixing for senior citizens
and females. All counters are dealing at the same time in deposits, withdraw and online transaction
processes.
This department performs the main function.
a) Cash receipts
b) Cash payments

Clearing Department
Before discussing it is necessary to know what is Clearing.
The process by which cheques exchanged between the collecting and paying bank and the ensuing
financial settlement is called Clearing.
This facility is provided by the state bank of Pakistan for offsetting of cross obligations between the
different banks. Clearing is of two types:
1) Inward clearing
2) Outward clearing

Accounts Department
Account department is the most important department of the bank. Because it is concerned with:
Revenue
Expenses

 Assets
Liabilities
These are the pillars of any business. In this department, all the vouchers that are posted during one
day are sent to the account department next day. These vouchers are already posted to computer by
the concerned department.

Types of Account

Current Account
Saving Account
Notice Deposit
Term Deposit

Remittance department
The need of remittance is commonly felt in todays business. A major function of any bank is to
transfer of funds from one place to another place National Bank of Pakistan
Uses the following modes of transfer of funds.
Demand Draft
Telegraphic Transfer
Pay Order
Call Deposit
Pay Slip
Money transfer

COLLECTION DEPARTMENT
All the cheques under collection are called cheques under collection in National Bank of Pakistan.
There are two types of bills for collection:
Outward Bills for Collection
Inward Bills for Collection

SWOT ANALYSIS
During the internship of eight weeks of mine in National Bank of Pakistan, near khechary chowk
Multan, I am going for SWOT Analysis.

Strength

Bank is believed on customer service. In first week of internship, I worked in Credit

Department where I learnt how to manage the corporate clients.
National Bank of Pakistan provides the facility of debit card at minimum rate all over the
Pakistan.

National Bank of Pakistan enjoying the large market share in Home financing.

Home financing and agriculture loans are introduced recently by National Bank of Pakistan.

Branch manager and Chief Manager having good co-ordination with staff to make the
environment friendly.

Weakness

National Bank of Pakistan main branch, Multan all time overcrowded.

Customers are not properly guided to get the benefits of National Bank of Pakistans facility.

Online services are changing compare to other competitive banks.

National Bank of Pakistan main branch Multan still having the shortage of cash and deposits
counters.

Opportunities

Banking industry is one of the most growing sectors in Pakistan. So National Bank of
Pakistan should be continually expanding its network of branches.

Muslims are consciously differentiating the Islamic-base banking from interest-base banking.
That is why there is large caution of expansion

Mobile banking should be started to compete in market.

Establishing foreign branches.

All products of Consumer Financing that include home financing, and other products should
be introduce to all the braches in the cities of Pakistan.

Threats

National Bank of Pakistan having large networks of hundred branches that play and
important role in banking business. National Bank of Pakistan compares its working to other
key players in banking industry.
Many other banks are now involving themselves in consumer financing at competitive rate.
This is one of the biggest threats for National Bank of Pakistan consumer financing products.

NBP ATM Network

Burewala

Multan

Faisalabad

Muzaffarabad

Gujar Khan

Peshawar

Gujranwala

Quetta

Gujrat

Rawalpindi

Hyderabad

Sheikhupura

Islamabad

Sialkot

Karachi

Taxila

Lahore

Wah Cantt.

Mirpur

DIRECTORS REPORT
On behalf of the Board of Directors it gives me great pleasure to present the annual
accounts for year ended December 31, 2002. National Bank made many strides during
2002 in positioning for the future both operationally and structurally.
To improve customer focus, reduce decision-making layers and promote teamwork. The
bank has substantially restructured its business. An entire layer of controlling offices i.e.
zones has been eliminated and total number of regions enhanced from 9 to 29. A new
matrix structure is now in place, which separates the front and back office with special
emphasis on corporate governance and enhanced internal controls. This process, which
was commenced in late 2001, is now fully functional and demonstrating positive results.
The rationalization program for staff reduction and branch closures was successfully

completed in 2002. Going forward the objective would be to ensure optimum efficiency in
staff levels while balancing the benefits of technology with the branch network.
To meet the challenges of position of NBP as a market leader, training is seen as a critical
success factor. Training has been restructured to make it more need based and aligned
with the corporate vision of inculcating customer focus and developing core competencies
under a program Gearing up for Excellence . A strategic training management plan was
developed keeping in view the stakeholders expectation. We are glad to say that while
training is a process of continuous improvement, we have achieved significant results thus
far.
To position the bank for capitalizing on the requirements of the relatively lower banked
sectors, a dedicated Commercial and Retail banking group was created. Within a short
span of time a number of retail products have been launched and the customer response to
these schemes has been very encouraging. New retail products will be offered to cater the
large diversified customer base of over 9 million, the largest in the country. The success of
retail banking is critical to maintaining interest revenue and enhanced fee income. We are
confident that with our large customer base and delivery capabilities, NBP will emerge as a
market leader in the retail/ consumer business in the very near future.
Corporate banking as a dedicated business is being very well received by the corporate
sector. The bank was mandated as a lead manager in significant capital market
transactions. Through a combination of a large direct equity portfolio as well as a 25%
holding in NIT
Pakistans largest mutual fund, NBP has one of the largest equity portfolios in the country.
Given the strong stock market performance in 2002 attractive trading gains were realized.
This area will continue to be one of our key income contributors as the capital market gains
depth.

NBP continues to be the principal bank for handling the government treasury business. We
have also re-activated our subsidiaries catering to non- banking financial activities. We are
also planning to open stand-alone Islamic Banking branches. Thus, in combination with our
very large and diversified banking base we are truly a universal bank in Pakistan, in a
position to offer the entire range of banking and financial products. We regard this as our
key competitive edge.
NBP is committed to invest in the development of the bank's Information Technology
infrastructure. Several initiatives have been undertaken in this regard. New on line
branches were added. The ATM network is being expanded across the country at
convenient locations and an ATM switch sharing arrangement is being placed. During the
year, the bank signed an agreement with Western Union for expanding the base for
documented remittances. We are also developing a strategic plan for Information
Technology that synchronizes our future growth with product development.

For overseas operations our focus continues to be on trade financing activity to take
advantage of the bank's presence in most countries (16 countries, 20 branches/offices)
which are Pakistan's major trading partners. During 2002 we established a wholly owned
subsidiary in Almaty. Currently we are present in four of Central Asian countries and our
unique representation should provide us with a major competitive edge in the coming years
as the Central Asian countries realize their economic potential.

Financial Performance
In 2002, NBP increased its pre-tax profit to Rs. 6,045 million from Rs. 3,016 million in 2001,
an increase of over 100%. The improved profitability was achieved due to a combination of
higher interest revenue, enhanced fee income and run off of the amortization of the 1997
Golden Handshake Scheme. Prudent addition to loan loss reserves was made which
continues to improve the cash coverage for non-performing loans.
All key financial and operating ratios demonstrated improvement. Cost/ income ratio was
0.44 (excluding one off provision of Rs. 832 million for benevolent fund and Rs. 513 million
for charge for special separation package) as against 0.52 of the last year. Pre-tax return
on equity was 45.27% as compared to 25.85% of the current year and is impressive by any
yardstick. Pre-tax return on assets improved to 1.43% as against 0.77% of last year.
Capital adequacy ratio of the bank is 14.5%, which is 38% higher as compared to 10.52%
of last year.

Deposits of the bank increased by Rs. 12 billion. While there was increase in private sector
loans due to adjustment / repayment of loans by large public sector entities and
substantially lower commodity operations borrowings, advances decreased by Rs. 30
billion.

Market Recognition
For the second consecutive year, NBP was recognized as the best bank in Pakistan by the
prestigious periodical, The Banker" UK (a subsidiary of Financial Times Group).
Furthermore M/s JCR-VIS Credit Rating Company Limited maintained its rating of AAA,
while the standalone rating was raised by one notch to AA-, which is one of the highest in
the banking sector.

Future Outlook
going in 2003, the reduction in the interest rate environment will overall have a negative
impact on the financial sector's profitability in the short term. To meet these challenges we
will focus on building our loan portfolio, both on corporate and retail side. On the retail side
focus will be on additional fee business while maintaining stringent controls over cost.
Longer term we will be focusing on those sectors in the country, which have traditionally
received less attention from the financial sector, i.e. agriculture, small and medium
enterprises and of the entire range of retail products. Our key strength remains our
customer base of over 9 million and we are confident that we are positioned to capitalize on
the opportunities.

FINANCIAL HIGHLIGHTS( 2003)

Rs. In million

Authorized Capital

5,000

Paid-up Capital

3,730

Shareholders' Equity and Reserves

23,936

Deposits

362,866

Advancesnet

140,547

Investments-net

143,525

Total
Assets

432,803

Pre-Tax
Profit

6,054

After-Tax
Profit

2,253

No. of
Branches

Branch Network

No. of Employees

1,204

12,195

ATM FINDER
Multan

S
Branch
No.
Qasim Road
1
Branch
2 Main Branch

Location

Telephone - 061

Qasim Road, Multan Cantt.

9200529

Main Branch, Chowk

Hussain Agahi

9200892

9210139

9200872

Gulgasht Colony
Gulgasht Colony Multan
Branch
Chowk Nawan Chowk Nawan Shaher,
4
Shaher
Multan
3

NOTICE OF 55 TH ANNUAL GENERAL MEETING

Notice is hereby given that the 55th Annual General Meeting of National Bank of Pakistan,
will, Insha - Allah, be held on Friday, the 30th April, 2004, at 3:00 P.M. (PST) in Crystal Ball
Room, Karachi Marriott Hotel, Abdullah Haroon Road, Karachi .
The following business will be transacted in the meeting:

Ordinary business:
1. To receive and adopt the Audited Accounts of the Bank for the year ended 31st

December, 2003, together with the Directors & Auditors Reports thereon.
2. To appoint auditors for the year ending 31st December, 2004 and fix their remuneration.
3. To consider and approve Cash Dividend @ Rs. 1.25 per share i.e., 12.5% and 20%
Bonus Shares (thereby increasing Paid-up Capital of the Bank from Rs. 4,103,421,850/to Rs.4,924,106,220/-) as recommended by the Board of Directors for the year ended
31st December, 2003 (subject to GoP / Regulatory approvals).
Rs.

82,148.50

Special Business:
Rs. 15,009,000.00
4. To approve / ratify the following donations aggregating Rs.

15,651,148.50, recommended / approved by the Banks

Management / Board:

Rs.
Rs.

500,000.00
60,000.00

Approval for :

i)

Donation of the sale proceeds of 1414 fractional Bonus shares of 2002 to any
charitable trust:

Ratification for :

ii)

Donation to Prime Ministers Flood Relief Fund-2003

iii)

One time Grant / Donation to Dr. Muhammad Uzair,

iv)

an ex-employee of former NDFC (merged into NBP):

Donation to Special Olympics Pakistan :
15,569,000.00
Total

Rs.

15,651,148.50

(Statement under Section 160 of The Companies Ordinance,1984 is enclosed).

5.

To transact any other business with the permission of the Chairman.

By Order of the Board
Karachi.
Dated: April 08, 2004

(S. Ali Raza)

President

Note:
i)

The Share Transfer Books of the Bank shall remain closed from 21-04-2004 to 30-042004 (both days inclusive). Transfers received at Messrs THK Associates (Pvt.) Ltd.,
Ground Floor, Sheikh Sultan Trust Building No. 2, Beaumont Road, Karachi, the
Banks Registrar and Share Transfer Agent, at the close of the business on 20-04-2004
will be treated in time for purpose of the entitlement of Cash Dividend / Bonus Shares.

ii)

A member entitled to attend and vote at the Annual General Meeting is entitled to
appoint another member as a proxy to attend and vote on his / her behalf. The
Government of Pakistan and State Bank of Pakistan and any Corporation(s), being
member of the Bank, may nominate any person as its representative to attend the
Annual General Meeting under authority of a Power of Attorney or a Board of Directors
Resolution. Proxies or nominations, in order to be effective and valid, must be received
at the office of the Banks Registrar / Transfer Agent, Messrs THK Associates (Pvt.)
Limited, Ground Floor, Sheikh Sultan Trust Building No.2, Beaumont Road, Karachi, not
less than 48 hours before the time of holding the Annual General Meeting.The CDC
Account Holders and Sub-Account Holders, whose Registration details are available in
the Share Book Detail Report shall be required to produce their respective Original
National Identity Cards (NICs) or original Passports at the time of attending the Annual
General Meeting to facilitate identification. Such Account Holders and Sub-Account
Holders should also bring / know their respective participant I.D. No. and the CDC
Account Number. In case of proxy, he/she must enclose an attested copy of his / her
NIC or Passport. Representative(s) of corporate member(s) should bring usual
documents required for such purpose.

iii)

Members are requested to timely notify any change in their addresses to the Banks
Registrar / Transfer Agent, Messrs THK Associates (Pvt.) Limited.

Statement Under Section 160 of The Companies Ordinance,

1984
This statement sets out the material facts concerning the Special Business, given in agenda item
No. 4 of the Notice, to be transacted at the 55th Annual General Meeting of National Bank of
Pakistan.
i)

Donation of net sale proceeds amounting to Rs. 82,148.50 of 1414 fractional bonus shares2002 to a charitable trust :
On the basis of operating results for the year ended December 31, 2002, the Board in its
meeting held on April 07, 2003, recommended payment of 12.5% cash dividend and 10%
Bonus Shares to the Banks shareholders, which was also approved by the Banks
shareholders in 54th AGM held on May 13, 2003.Accordingly, Dividend Warrants and Bonus
Shares were issued to the shareholders as per their entitlement. In this connection, 1414 Bonus
Shares, being fractional shares, could not be distributed to the shareholders. For disposal of
these fractional 1414 Bonus Shares a consolidated Share Certificate No. 052348 in the name of
Secretary (Board), NBP, was issued which was sold through a member of KSE, Messrs A.
Sattar Motiwalla Securities (Pvt.) Ltd., against net sale proceeds of Rs.82,148.50 .
On account of high cost of computer printing, post printing, distribution / postage and handling
charges of the fractional coupons, the NBP Board in its meeting held on March 26, 2004
recommended that the sale proceeds of the fractional Bonus Shares, be donated to a
Charitable Trust.In this connection, approval of shareholders is now being solicited for donating
the net sale proceeds amounting to Rs. 82,148.50 of 1414 fractional Bonus Shares 2002, to a
charitable trust, name of which will be approved by the President (NBP).

ii)

Donation of Rs. 15.009 million to Prime Ministers Flood Relief Fund-2003:

Prime Ministers Flood Relief Fund-2003 was established under the directives of SBP to help
the flood affected citizens of Pakistan. An appeal was made by GoP to all Pakistan nationals
and institutions to contribute generously towards this fund.NBP has been contributing towards
such funds in the past and in response to the aforesaid call made a donation of Rs.15.009
million, with the approval of the Banks Operations Committee which was subsequently ratified
by the Board of Directors in its meeting held on September 13, 2003. The cheque was handed
over by the President (NBP) to the Prime Minister to help the flood affected citizens of the
country.
The matter is now being placed before the shareholders for ratification in terms of SBP, BPRD
Circular No. 4 dated February 02, 2000.

iii)

One time grant / donation of Rs. 500,000/- to Dr. Muhammad Uzair, an ex-employee of former
NDFC (merged into NBP):

Dr. Muhammad Uzair is a renowned scholar who served in various public sector / autonomous
organizations for about 30 years. He unfortunately could not earn regular pension. He is over 70
years of age and is in dire need of financial assistance.

In recognition of his meritorious services and contributions in the fields of academics,

research and economic management, the Prime Minister of Pakistan on the
recommendations of Finance Minister sanctioned a one time pensionary grant of
Rs.500,000/-. As Dr. Uzair has spent nearly 10 years in the former NDFC (merged into
NBP), the Finance Minister requested NBP through GoP, Economic Affairs Divisions letter
dated September 15, 2003, to make a matching one time pensionary grant / donation of
Rs.500,000/- to Dr. Muhammad Uzair.
Accordingly, an amount of Rs.500,000/- was paid to Dr. Muhammad Uzair with the
approval of the Banks Operations Committee which was subsequently ratified by the Board
in its meeting held on October 17, 2003.
The matter is now being placed before the shareholders for ratification in terms of SBP,
BPRD Circular No. 4 dated February 02, 2000.
iv)

Donation of Rs. 60,000/- To Special Olympics Pakistan :

Special Olympics Pakistan is an international organization dedicated to improving
individuals with mental disabilities. The organization arranges programmes for children
and adults with mental retardation for developing improved physical fitness, greater selfconfidence and positive self-image. They organized a fund raising programme which was
held on December 31, 2003 and requested NBP for participation in the
programme.National Bank of Pakistan made a donation of Rs.60,000/- for the aforesaid
annual fund raising function with the approval of the Operations Committee which was
subsequently ratified by the Board of Directors in its meeting held on January 22, 2004.
The matter is now being placed before the shareholders for ratification in terms of SBP,
BPRD Circular No. 4 dated February 02, 2000.

In this respect the following resolution is proposed to be passed, as an Ordinary Resolution:

RESOLVED THAT the donation of Rs.82,148.50, being the net sale proceeds of
1414 fractional Bonus Shares 2002 to a charitable trust, name of which will be
approved by the President (NBP), be and is hereby approved.

FURTHER RESOLVED THAT the decisions taken by the Management / Board

towards approving donations aggregating Rs.15.569 Million, as mentioned below,
be and are hereby ratified:
i)
ii)
iii)

Donation to Prime Ministers Flood Relief Fund-2003

One time grant / donation to Dr. Muhammad Uzair
an ex-employee of former NDFC (merged into NBP)
Donation to Special Olympics Pakistan :
Total:

Rs.
Rs.
Rs.
Rs.

15.009 Million
0.500
0.060

Million
Million

15.569 Million

AUDITORS REVIEW REPORT TO THE MEMBERS

Auditors Review Report to the Members on Statement of
Compliance with best Practices of the Code of Corporate Governance

We have reviewed the Statement of Compliance with the best practices (the Statement)
contained in the Code of Corporate Governance (the Code) prepared by the Board of Directors
of National Bank of Pakistan to comply with the Prudential Regulation No. XXIX,
responsibilities of Board of Directors vide BSD Circular No. 15, dated June 13, 2002, Listing
Regulation No. 37 of the Karachi Stock Exchange, and Chapter XIII of the Lahore Stock
Exchange and Chapter XI of the Islamabad Stock Exchange where the Company is listed.

The responsibility for compliance with the Code is that of the Board of Directors of the Bank.
Our responsibility is to review, to the extent where such compliance can be objectively verified,
whether the Statement reflects the status of the Banks compliance with the provisions of the
Code and report if it does not. A review is limited primarily to inquiries of the Bank personnel
and review of various documents prepared by the Bank to comply with the Code.

As part of our audit of the financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective
audit approach. We have not carried out any special review of the internal control system to
enable us to express an opinion as to whether the Boards statement on internal control covers
all controls and the effectiveness of such internal controls.
Based on our review, nothing has come to our attention which causes us to believe that the
Statement does not appropriately reflect the Banks compliance, in all material respects, with
the best practices contained in the Code as applicable to the Bank for the year ended December
31, 2003.
M. Yousuf Adil Saleem & Co.
Chartered Accountants
Karachi

Taseer Hadi Khalid & Co.

Chartered Accountants
Karachi

B AL AN CE S HEE T
as at December 31, 2003
2002
US dollars

2003
in ' 000

2003
Note

2002
in '000

ASSETS
966,294
624,309

1,033,967
420,301

Cash and balances with treasury banks

Balances with other banks

6
7

59,420,502 55,531,453
24,154,070 35,878,101

377,891

525,738

Lendings to financial institutions

30,213,352 21,716,802

2,497,455

2,891,943

Investments

2,445,642

2,801,365

Advances

10

166,195,619 143,524,971
160,990,265 140,547,374

478,332

381,892

Other assets

11

21,946,846 27,489,021

141,210

155,554

Operating fixed assets

12

8,939,483

Deferred tax assets

7,531,133

8,115,131
-

8,210,760

471,860,137 432,802,853
LIABILITIES

58,567
174,568

95,647
287,001

Bills payable
Borrowings from financial institutions

14
15

6,314,166

6,883,222

Deposits and other accounts

16

5,496,738
16,493,514

3,365,744
10,032,135

395,568,490 362,865,637

Sub-ordinated loans
1,289
516,506

715
453,821

49,526

10,369

Liabilities against assets subject to

finance lease
Other liabilities

17
18

41,117
26,080,400

74,051
29,682,837

Deferred tax liabilities

13

595,864

2,846,186

7,114,622

7,730,775

444,276,123 408,866,590

416,511

479,985

NET ASSETS

64,912
124,317

71,403
141,526

REPRESENTED BY
Share capital
Reserves

59,243

102,616

Unappropriated profit

248,472
168,039

315,545
164,440

Surplus on revaluation of assets

416,511

479,985
Contingencies and commitments

19

20

21

27,584,014

23,936,263

4,103,422
8,133,312

3,730,384
7,144,326

5,897,163

3,404,593

18,133,897
9,450,117

14,279,303
9,656,960

27,584,014

23,936,263

ROFIT AND LOSS ACCOUNT

for the year ended December 31, 2003
2002

472,030
255,766
216,264
31,707

2003
US dollars in '000

338,487
117,205
221,282
29,317

366
1,813
2,824
36,710
179,554

7,996
8,261
45,574
175,708

54,587
15,957
11,471
185
8,443
90,643
270,197

56,742
19,606
12,367
2
37,408
126,125
301,833

79,406
28,354
8,928
42,318
159,006
55
415
159,476
110,721
5,536

82,852
4,883
5,109
42,999
135,843
582
398
136,823
165,010
8,250

105,185
46,112
17,401
2,461
65,974
39,211
13,089

156,760
80,914
25,048
(22,252)
83,710
73,050
59,243

24,592
877
38,558
77,769

833
60,076
133,126

(3,921)

(7,305)

(6,491)

(14,280)

(8,114)
(18,526)

(8,925)
(30,510)

2003

Mark-up/return/interest earned
Mark-up/return/interest expensed
Net mark-up/interest income
Provision against non-performing advances
Provision for diminution in the value of
investments
Provision against off balance sheet obligations
Bad debts written off directly

22
23
10.3
9.10
18.1
10.5.1

Net mark-up/interest income after provisions

NON MARK-UP/INTEREST INCOME
Fee, commission and brokerage income
Dividend income
Income from dealing in foreign currencies
Share of profit of joint venture
Other income
Total non mark-up/interest income

24
9.5
25

NON MARK-UP/INTEREST EXPENSES

Administrative expenses
Salaries and allowances
Charge for defined benefit plans
Provision for voluntary handshake scheme
Other administrative expenses
Other provisions/write offs
Other charges
Total non mark-up/interest expenses

26
27

Staff Welfare Fund

Extra ordinary items
Profit before tax
Taxation - Current
- Prior year(s)
- Deferred
Profit after tax
Unappropriated profit brought forward
Transfer from surplus on revaluation of fixed assets:
Prior year(s)
Current year
Profit available for appropriation
Appropriations
Transfer To:
Statutory reserve
Capital reserve
Revenue reserve
Reserve for issue of bonus shares @ 20% (2002: 10%)
Proposed cash dividend Rs. 1.25 per share
(2002: Rs 1.25 per share)

2002
Rupeesin '000

Note

28

19,452,317
6,735,579
12,716,738
1,684,777

27,126,839
14,698,507
12,428,332
1,822,154

459,523
474,743
2,619,043
10,097,695

21,031
104,217
162,276
2,109,678
10,318,654

3,260,863
1,126,742
710,726
108
2,149,800
7,248,239
17,345,934

3,137,007
917,020
659,247
10,609
485,209
5,209,092
15,527,746

4,761,408
280,632
293,612
2,471,083
7,806,735
33,454
22,894
7,863,083
9,482,851
474,143

4,563,326
1,629,445
513,073
2,431,935
9,137,779
3,134
23,874
9,164,787
6,362,959
318,148

9,008,708
4,650,000
1,439,444
(1,278,839)
4,810,605
4,198,103
3,404,593

6,044,811
2,650,000
1,000,000
141,426
3,791,426
2,253,385
752,226

47,890
3,452,483
7,650,586

1,413,246
50,411
2,215,883
4,469,268

(419,811)

(225,339)

(820,684)

(373,038)

(512,928)
(1,753,423)

(466,298)
(1,064,675)

59,243
0.09

102,616
0.18

Unappropriated profit carried forward

Basic/diluted earnings per share (Rupees)

5,897,163

3,404,593

10.23

5.49

30

CASH FLOW STATEMENT

for the year ended December 31, 2003
2002

2003

2003

2002

US dollars in '000

Note

CASH FLOW FROM OPERATING ACTIVITIES

105,185
156,759
Profit before taxation
15,957
19,606
Less: Dividend income
89,228 137,153
Adjustments for non-cash charges
8,557
6,728 Depreciation
31,707
29,317 Provision against non-performing advances
366
7,996 Provision for diminution in the value of investments
1,813
8,261 Provision against off balance sheet obligations
8,928
5,109 Provision for voluntary handshake scheme
(84)
(132) (Gain) on sale of fixed assets
162
219 Financial charges on leased assets
55
582 Other provisions/ write off
(185)
(2) Share of (profit) of Joint Venture
51,318 58,078
140,546 195,231

(132,872) (182,649)
6,682
(1,762)
498,950 (385,040)
61,339
80,533
434,099 (488,918)
19,496
37,081
(25,280)
112,433
230,537
569,057
24,887
(74,115)
249,640 644,456
23,261
(90,736)
(105,044)
(5,172)
(162)
(219)
(81,945) (96,127)
742,340 254,642
(1,078,416)
(423,058)
(55,963)
(1,362)
15,957
19,606
(2,800)
(10,172)
(5,509)
(4,539)
279
275
(1,126,452) (419,250)

(Increase)/decrease in operating assets

Lendings to financial institutions
Held-for-trading securities
Advances
Other assets
Increase/(decrease) in operating liabilities
Bills payable
Borrowings from financial institutions
Deposits
Other liabilities
Income tax (paid)/received
Special separation package cost paid
Financial charges paid
Net cash flows from operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Net investments in available-for-sale securities
Net investments in held-to-maturity securities
Dividend received
Investments in operating fixed assets
Investments in subsidiaries, associates and joint venture
Sale proceeds of property and equipment disposed off
Net cash (used) in investing activities

Rupees
in '000

9,008,708
1,126,742
7,881,966

6,044,811
917,020
5,127,791

386,662
1,684,777
459,523
474,743
293,612
(7,568)
12,584
33,454
(108)
3,337,679
11,219.645

491,764
1,822,154
21,031
104,217
513,073
(4,833)
9,361
3,134
(10,609)
2,949,292
8,077,083

(10,496,550)
(101,263)
(22,127,668)
4,628,100
(28,097,381)

(7,635,970)
383,984
28,673,903
3,525,063
24,946,980

2,130,994
6,461,379
32,702,853
(4,259,266)
37,035,960
(5,214,439)
(297,239)
(12,584)
(5,524,262)
14,633,962

1,120,395
(1,452,828)
13,248,569
1,430,240
14,346,376
1,336,778
(6,036,703)
(9,361)
(4,709,286)
42,661,153

(24,312,528)
(78,276)
1,126,742
(584,586)
(260,876)
15,799
(24,093,725)

(61,974,971)
(3,216,109)
917,020
(160,935)
(316,597)
16,007
(64,735,585)

(463,814)
(32,934)
(496,748)
121,529
(9,834,982)
94,313,554
84,478,572

(466,298)
(29,715)
(496,013)
154,959
(22,415,486)
116,729,040
94,313,554

CASH FLOW FROM FINANCING ACTIVITIES

(8,114)
(8,071) Dividend paid
(517)
(573) Payments of lease obligations
(8,631)
(8,644) Net cash (used) in financing activities
2,696
2,115
Effects of exchange rate changes on cash and cash
(390,047) (171,137) Decrease in cash and cash equivalents
2,031,182 1,641,135 Cash and cash equivalents at the beginning of the year
1,641,135 1,469,998
Cash and cash equivalents at the end of the year
31

STATEMENT OF CHANGES IN EQUITY for

the year ended December 31, 2003

Share
Capital

Exchange Reserve for Statutory General Unappropriated

Total
Equalization
issue of
Reserve
Bonus Shares

Reserve

.................................................................................................... Rupees in '000

....................................................................................................
Balance as at December 31, 2001

3,730,384

3,109,488

3,845,237

521,338

752,226

11,958,673

Profit after taxation for the year

ended December 31, 2002 ---------------------------------------------------------------------------------------------------2,253,385 2,253,385
Transfer to statutory reserve
(225,339)
------------------------------------------------------------------------------------------------------------------------Proposed cash dividend ------------------------------------------------------------------------------------------------------------(466,298) (466,298)
Transferred to reserve for
issue of bonus shares
373,038
(373,038)
Exchange adjustments on
revaluation of capital
of foreign branches
243,396
243,396
Transfer from surplus on revaluation
of fixed assets - incremental
depreciation
- prior year(s) -------------------------------------------------------------------------------------------------------------------------1,413,246

1,413,246
- current year - net of tax ----------------------------------------------------------------------------------------------------------50,411 50,411
Deferred tax liability recognized
on exchange equalization reserve
(1,173,510)
(1,173,510)
Balance as at December 31, 2002

3,730,384

2,179,374

373,038

4,070,576

521,338

3,404,593 14,279,303

Profit after taxation for the year

ended December 31, 2003 -----------------------------------------------------------------------------------------------------4,198,103
Transfer to statutory reserve
(419,811)
-------------------------------------------------------------------------------------------------------------------------Issue of bonus shares
373,038
(373,038) -------------------------------------------Proposed cash dividend ------------------------------------------------------------------------------------------------------------(512,928)
Transferred to reserve for
issue of bonus shares
820,684
(820,684)
Exchange adjustments on
revaluation of capital
of foreign branches
186,968
Transfer from surplus on revaluation
of fixed assets- incremental
depreciation --------------------------------------------------------------------------------------------------------------------------47,890

4,198,103
(512,928)
-

186,968

47,890

1. STATUS AND NATURE OF BUSINESS

National Bank of Pakistan (the bank) was established under the National Bank of Pakistan Ordinance,
1949 and is listed on all the stock exchanges in Pakistan. Its registered and 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 1,183 (2002: 1,189) branches
in Pakistan and 16 (2002: 15) overseas branches (including the Export Processing Zone branch,
Karachi). Under a Trust Deed, the bank also provides services as trustee to National Investment Trust
(NIT) including safe custody of securities on behalf of NIT .
2.

BASIS OF PRESENTATION
In accordance with the directives of the Federal Government regarding the shifting of the banking system
to Islamic modes, SBP has issued various circulars from time to time. Permissible form of trade related
mode of financing includes purchase of goods by the bank from their customers and immediate resale to
them at appropriate mark-up in price on deferred payment basis. The purchases and sales arising under
these arrangements are not reflected in these accounts as such but are restricted to the amount of facility
actually utilized and the appropriate portion of mark-up thereon.
US dollar equivalent
The US dollar amounts shown on the balance sheet, profit and loss account and cash flow statement are
stated as additional information solely for the convenience of readers. For the purpose of conversion to
US Dollars, the rate of Rs 57.4685 to one US Dollar has been used for both 2003 and 2002 as it was
prevalent rate as on December 31, 2003.

3.

STATEMENT OF COMPLIANCE
These financial statements are prepared in accordance with approved accounting standards as
applicable in Pakistan and the requirements of the Companies Ordinance, 1984 and the Banking
Companies Ordinance, 1962. Approved accounting standards comprise of such International Accounting
Standards as notified under the provisions of the Companies Ordinance, 1984. Wherever the
requirements of the Companies Ordinance, 1984, Banking Companies Ordinance, 1962 or directives
issued by the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan
(SBP) differ with requirements of these standards the requirements of the Companies Ordinance, 1984,
Banking Companies Ordinance, 1962 or the requirements of the said directives take precedence.
The SECP has approved the adoption of International Accounting Standard 39, Financial Instruments:
Recognition and Measurement and International Accounting Standard 40, Investment Property. The
requirements of these standards have not been taken into account for the purpose of these financial
statements as the implementation of the said
standards have been deferred by SBP, vide BSD circular number 10 dated August 26, 2002, for banks in
Pakistan till further instructions. However, investments have been classified in these financial statements
in accordance with the format of financial statements for banks issued by SBP vide BSD circular No. 36
dated October 10, 2001.

Consolidation
The bank accounts for its investments in associates and subsidiaries at cost, except for quoted
associates which are valued at market rates prevailing at reporting date. The details of these investments
are given in notes 9.4 and 9.6.
The bank considers that the effect of consolidation of subsidiaries ' financial statements will not have any
material impact on bank's financial position or results and accordingly consolidated financial statements
have not been prepared. The SECP has granted exemption to the bank from the requirements of sub
section (1) of section 237 of the Companies Ordinance, 1984 vide its letter No. EMD/CO/233/627/20031164 dated August 5, 2003.

TECHNOLOGY
For technology, existing CAMS systems bas been enhanced / modified in the light of the proposed
scheme. The system is centralized and its database is to be maintained at Head Officer level the I.T
system (CAMS) will be lived at all National Bank of Pakistan online branches

IT platform with specific automation and MIS generation capabilities for the scheme, as under:
o Product type sales i.e. CNG auto Rickshaw, Utility Store & PCO etc.
o Geographical distribution of loans
o Processing Turn Around Time
o Performance evaluation reports on Turn Around Time
o By Classification of applicant
o Loan limits
o Loan tenure
o Mark-up rate wise
o Govt. mark-up share collection and loss sharing reports Etc.