National Bank Of Pakistan Railway Road Branch

Published Date: 02 Nov 2017

2.4.1 Introduction of Branch

Branch of National bank of Pakistan (NBP) where I did my internship is the Railway Road Branch of Gujrat. Its branch code is 0788 and it was established in 1957 in order to cope with the financial needs of the people. Railway Road Branch of NBP is mixed type of branch such as civil secretariat branch, where every kind of work is done. The working and learning environment of the bank is very valuable and of high quality. The whole staff of NBP is very promising and intellectual, expert in their work, well mannered and efficient.

At present Mr. Malik Imtiaz is Manager and operation manager is Mr. Ansar Mehmood. 15 employees work in this branch. The Branch Manager of National Bank of Pakistan (NBP) is responsible for all the affairs of the Bank. All the decisions relating to Branch are made by him.

2.4.1.1 Branch Profile

Name of Branch

National Bank of Pakistan, Railway Road Branch

Region

Gujrat

Establishment

1957

Branch Code

0788

Address

National Bank of Pakistan

Rialway Road Branch

Gujrat

Phone Number

053-99260162

Fax Number

99260159

Name of Manager

Malik Imtiaz

Number of Working Staff

15

2.4.1.2 Organizational chart of NBP Railway Road Branch

Clearing Department

Pension Department

Credit Department

Operations Manager

Account Opening Department

Deposit Department

Department

Remittances Department

Cash Department

Manager

Coordination

There are also three watchmen, one cook and one sweeper.

2.4.1.3 Starting and ending dates of internship

Starting Date ------ 01-08-2012

Ending Date ------ 15-09-2012

2.4.2 Supervisors

Some information of my supervisors in NBP Railway Road Branch is as under:

Name

Designation

Qualification

Grade

Malik Imtiaz

Branch Manager

M.Com

OG-I

Ansar Mehmood

Operational Manager

M.Com

OG-II

Javed Iqbal

Joint Custodian

M.A

OG-I

Miss. Saima

Cash Officer(cash operations)

M.Com

OG-II

Mr.humayun

Credit officer

M.b.a(finance)

OG-I

Rana Ijaz

Management Trainee officer

MBA (Finance)

OG-II

Ansir Iqbal

Foreign Exchange Officer

M.Phil (Mathematics)

OG-II

Laeeq Ahmed

Management Trainee officer

MBA (Finance)

OG-II

2.4.3 Weekly Time Table

2.4.3.1 Deposit Department

Name of supervisor Signature

Mr. Javed lqbal ____________________

DATE

DAY

ACTIVITY

1-8-2012

Wednesday

Introduction of the Deposit department. The supervisor told me about all the tasks of this department that I have to do within week.

2-8-2012

Thursday

Learned about Cash & Transfer pay-in-slips, and filling of cheques.

3-8-2012

Friday

Learn the procedure for passing of cheque and issuance of token number.

6-8-2012

Monday

Learn the entries in BBO software for cash receipts and payment of cheques

7-8-2012

Tuesday

Learn procedure for End Of the Day.

8-8-2012

Wednesday

Do same

2.4.3.2 Clearing Department

Name of supervisor Signature

Mr. Javed lqbal ___________________

DATE

DAY

ACTIVITY

9-8-2012

Thursday

Introduction about all activities of this department

10-8-2012

Friday

Learn the procedure for outward local clearing through NIFT

13-8-2012

Monday

Learn the procedure for inward Local clearing through NIFT and prepare F-15.

14-8-2012

Tuesday

Learn the procedure for cheques returned.

15-8-2012

Wednesday

Learn to make & respond L.S.C

16-8-2012

Thursday

Learn to make & respond S.C. and about deduction of charges and preparation of vouchers for that.

17-8-2012

Friday

Learn the issuing and responding entries for S.C. and L.S.C.

20-8-2012

Monday

Learn the inward and outward local clearing entries on software.

2.4.3.3 Credit Department

Name of supervisor Signature

Mr. Laeeq Ahmed __________________

DATE

DAY

ACTIVITY

21-8-2012

Tuesday

Introduction about the activities of this department

22-8-2012

Wednesday

Learn the procedure for issuing of Gold loan

23-8-2012

Thursday

Learn the calculation of markup for closing of Gold account and prepare vouchers for it

24-8-2012

Friday

Affixation of stamps on proposal of Cash finance and issued cheque book for CF.

2.4.3.4 Account Opening Department

Name of supervisor Signature

Mr. Ansar Mehmood __________________

DATE

DAY

ACTIVITY

27-8-2012

Monday

Introduction about procedure & basics rules for opening an account

28-8-2012

Tuesday

Filling the forms for opening Current & PLS accounts

(Individual Account) + fill specimen signature (SS) card and punch stamps on forms and SS cards

29-8-2012

Wednesday

Filling the forms for

opening Current & PLS accounts (Joint

Account)+filled SS card and punch stamps on form and SS card

30-8-2012

Thursday

Filling the forms for

opening FC accounts (individual & Joint

Account)+ filled SS card and punch stamps on form and SS card

31-8-2012

Friday

Record the account opening into their specific registers

3-9-2012

Monday

Learn basic procedure for issuance of cheque book to new account holders, already existing account holders, and procedure in case of lost cheque book.

2.4.3.5 Remittance Department

Name of supervisor Signature

Mr. Javed Iqbal __________________

DATE

DAY

ACTIVITY

6-9-2012

Tuesday

Introduction about all activities of this department

7-9-2012

Wednesday

Prepare PO & DD and vouchers for issuance of these.

8-9-2012

Thursday

Prepare MT and Call Deposit advice

9-9-2012

Friday

Learn about cancellation of DD and prepare vouchers for deduction of charges

10-9-2012

Monday

Learn the payment procedure of PO, DD and MT

11-9-2012

Tuesday

Learn entries for issuance and payment of PO, DD and MT.

2.4.3.6 Foreign Exchange Department

Name of supervisor Signature

Mr. umair __________________

Mr. Ansir Iqbal __________________

DATE

DAY

ACTIVITY

12-9-2012

Wednesday

Introduction about activities of this department

13-9-2012

Thursday

Learn the procedure for clearing of FC cheques

14-9-2012

friday

Revise the procedure of clearing of FC cheques

17-9-2012

monday

Learn about issuance of FDD and FTT and recording of these in registers.

18-9-2012

tuesday

Recording of SWIFT messages in registers and preparation of FET A & FET C.

19-9-2012

wednesday

Payment of WUMT and SAMBA on computer terminal ant preparation of vouchers for these.

2.4.3.7 Cash Department

Name of supervisor Signature

Mr. Munir __________________

Miss Saima __________________

From 28th to 30th September 2011, I revised all the tasks of Deposit, Clearing, Remittance and FEX Departments.

2.4.4 Departments of Training

During the internship period I got training in various departments in the branch. The departments of my training are as under:

2.4.4.1 Deposit Department

2.4.4.2 Clearing Department

2.4.4.3 Remittance Department

2.4.4.4 Account Opening Department

2.4.4.5 Cash Department

2.4.4.6 Credit Department

2.4.4.7 Foreign Exchange Department

The detailed description of the departments and their operations, in which I performed my work, is as under:

2.4.4.1 Deposit Department

It is stated that deposits are the lifeblood of commercial banks. The main function of a commercial bank is to mobilize deposits of money.

2.4.4.1.1 Functions Performed By Deposit Department

2.4.4.1.1.1 Passing of cheques

2.4.4.1.1.2 Keeping record of cash transactions

2.4.4.1.1.3 End of the day

2.4.4.1.1.1 Passing of Cheque at Counter

Before passing of cheque, procedure which passing officer follow is as under:

Acceptance of Cheques:

Whenever a cheque is presented at counter for payment, the officer examines the cheque before issuing a token. The following is looked into:

The cheque is drawn on the same branch of the bank.

It is not stale or post dated.

Signature of drawer must be present on cheque

The amount written in words and figure should be same.

The drawer of the cheque duly signs all alteration or cancellation.

The presenter has signed at the back of the cheque.

Confirmation of Signatures:

The authorized officer examines the cheque for the above mention things. When cheque is found acceptable in all aspect, the signature of the drawer compared with his signature on the Specimen Signature Card. When it is found similar to specimen signature, he affixes SIGNATURE VERIFIED stamp, near the drawer signature in the cheque and sign it.

Computer Terminal Process:

After affirmation of the signature, the computer operator checks the balance of the account holder. The operator also sees whether the stop payment instructions are received from the account holder or not. After considering these two points the cheque is posted in software of BBO. The cheque is then handed over to the cashier after the allotment of the token number to the cheque, affixation of stamp PAY CASH and signature of passing officer. The token is given to the presenter and cheque to the cashier.

2.4.4.1.1.2 Keeping record of cash transactions

Recording of Cash transaction is very simple. When customer comes and wants to deposits cash in his/her account, first he has to fill receipt for cash deposit known as cash pay-in-slip. Pay-in-slip is an evidence of financial transaction which is duly signed by authorized officer. Particulars of this slip are as follows:

Date

Account number

Title of account

Amount in figures and words

After filling this slip customer deposit cash at cash counter where account number of customer and amount is recorded in cash receipt register and cashier affixes stamp of "RECEIVED BY CASH" on both parts of pay-in-slip. Then in deposit area where after signature of authorized officer counter foil of slip is given to customer for his record and credit voucher is kept by officer for Bank record. Then customer’s account is credited by the amount which is deposited.

2.4.4.1.1.3 End of the day

At the end of the day payments and receipts are matched by Computer operator and cashier. If these amounts are matched then abstract is printed out and all the work which is done in a particular date is sent to the Gujranwala Branch through E-mail. After that system is closed for that particular date.

2.4.4.2 Clearing Department

The transfer of funds from one branch of bank to the other branch of the same bank or the other bank on which the instrument is drawn is done through clearing process. The major function of Clearing Department is to receive cheques and collects the amount from that bank on which cheque is drawn, through the Clearing House "National Institutional Facilitation Technology" (NIFT) Pvt. Limited. In NBP Railway Road Branch, some specific types of cheques are being entertained in the clearing department, which are:

Clearing cheques

Transfer cheques

2.4.4.2.1 Types of clearing

2.4.4.2.1.1 Local Clearing

2.4.4.2.1.2 Intercity Clearing

2.4.4.2.1.3 Short Credit Service (SC)

2.4.4.2.1.4 Local Short Credit (LSC)

2.4.4.2.1.1 Local Clearing

All cheques and other Negotiable Instruments payable locally is presented to the bank for clearing. And NIFT provides the facility of clearing for locally payable instrument free of charge. In respect of local cheques the customer's account is credited on the next day from the date of acceptance of the cheque.

2.4.4.2.1.2 Intercity Clearing

NIFT is also responsible for the clearance of the outstation cheques by using its intercity arrangements. NIFT network is present in all the large cities of Pakistan. In respect of local cheques the customer's account is credited on the 2nd day from the date of acceptance of the cheque.

2.4.4.2.1.3 Short Credit Services (SC)

Bank clears the cheque either through mail or TCS where there no NIFT services are available and charge commission for providing services. S.C is used for out station remittance instruments. In respect of outstation cheques the customer’s account is credited on 4th 0r 5th day from the date of acceptance of the cheques.

2.4.4.2.1.4 Local Short Credit (LSC)

If the customer wants amount in his account on urgent basis then bank provide LSC service to its customer for those in house cheques which are presented and drawn on NBP. Branches of the bank can be different but must be located within the city. Bank did not recover charges from customers for this service. In respect of local cheques the customer's account is credited on the same day from the date of acceptance of the cheque.

2.4.4.2.2 Clearing Process

The process of clearing is carried out in following categories.

2.4.4.2.2.1 Inward clearing through NIFT

2.4.4.2.2.2 Outward clearing through NIFT

2.4.4.2.2.3 Local and outstation clearing through S.C & L.S.C

2.4.4.2.2.1 Inward clearing through NIFT

At morning bank receive cheques or other instruments which other Banks present at the clearing house. All the remittance which is received by bank then goes through the inward clearance process.

The cheques which bank receive for clearance, are cleared after checking following requirements, i.e.

Stamp required should be correct

Balance should be enough in particular account for clearance

Drawer signature should match with SS card.

Cheque should not be post dated or out dated

Amount in words and figures should be same

Advice received from issuing Branch

Payment should not stopped by the drawer

If all the above mention requirements are fulfilled then cheque is cleared otherwise it is returned to the customer by attaching return memo explaining the cause of cheque return through NIFT. Return cheques also enter into the return register by writing dates, causes of return, amount and time of return and returned to third party through NIFT. If there is any return, then that is deducted from the total and F-15 is prepared for the remaining amount.

2.4.4.2.2.2 Outward clearing through NIFT

Outward clearing includes those cheques and other instruments which are sent by the Bank to the Banks for payment on behalf of its own customers. The cheques deposited by customers are sent to clearing house. But before acceptance of cheque following is being performed.

Title of account and account number from transfer slip is checked.

Counter foil of transfer slip is handed over to the customers with branch stamping.

The procedure for outward clearance is shown through following diagram:

Stamping

Cross Stamp

Cleaning Stamp

Payee,s Account Will be Credited

Fill Transfer Slip & Receipt Hand over To Client

Instrument collection from Account Holder

Enter in NIFT Register Separately

Hand Over NIFT Agent

Instrument are Signed By Officer

Separate Transfer Slip & Cheque

NIFT Cover Bundle& Add List

OUTWARD CLEARING

Then on receiving of the clearing fanfold F-15 for instruments sent in outward clearance, the bank credit the amount in the account of customer in case of local clearing while bank deduct the charges in case of intercity clearing and then remaining amount is credited to the customer account and Bank General account is debited for the total amount.

2.4.4.2.2.3 Local and outstation clearing through S.C & L.S.C

Formation of S.C & L.S.C:

For making S.C & L.S.C Fanfold F-275 is used on which amount of instrument, S.C or L.S.C number, and the name with code of the branch to which this instrument is sent, is mentioned. Information about the instrument is recorded in relevant register and three types of stamps are affixed on instrument, which are:

Stamp of S.C & L.S.C

Special crossing stamp

Payees account will be credited on realization with branch name and code

After affixation of stamp instrument and fanfold is signed by authorized officer, and then it is sent through bank mail service. S.C and L.S.C is sent only to any branch of NBP.

Responding entries of S.C & L.S.C:

On clearance of the S.C or L.S.C from responding bank, the issuing bank receives debit voucher i.e. F-15. On receiving that fanfold bank deduct its charges in case of S.C. there are no charges for L.S.C. After deduction of charges bank give credit to the customer's account and debit NBP general account. And also mark responding entry in register. Charges which are deducted in case of S.C are:

Commission

Federal excise duty (FED)

Postage & Telegram (P&T)

Commission Rates

NBP to NBP -------------------------- 0.16% (min. Rs. 75)

NBP to Other Banks----------------- 0.20% (min. Rs. 100)

P& T Rates

P & T rates are fixed for every instrument i.e. Rs.70

Federal Excise Duty

FED is---------------------------------- 16% of Commission

NBP to NBP --------------------------- Min. Rs. 12

NBP to Other Banks------------------- Min. Rs. 16

2.4.4.3 Remittance Department

Remittance means a sum of money sent in payment for something. This department deals with either the transfer of money from one bank to other bank or from one branch to another branch for their customers. NBP offers following types of remittance:

2.4.4.3.1 Demand Draft

2.4.4.3.2 Mail Transfer

2.4.4.3.3 Telegraphic Transfer

2.4.4.3.4 Pay Order

2.4.4.3.1 Demand Draft (DD)

Demand draft is a written order drawn by a branch of a NBP upon the branch of same or any other bank to pay certain amount to or to the order of specified person. It can be issued to account holder of bank or non account holder. It can be issued against cash or cheque and letter of instruction.

Types:

Junior draft (From Rs. 1 to 10,000)

Senior draft (From over Rs. 10,000 to 10 million)

Particulars of DD:

Date

Name of the office on which it is drawn

Name of beneficiary

Amount in words and figures

Bank exchange rates

Signature and address of the applicant

Issuance charges on DD:

Exchange on DD

From Rs.1 to 100, 000

0.10%

Minimum Rs.80 (for A/c Holder)

Minimum Rs.100 (for non- A/c Holder)

From over Rs.100,000 to 1000000.

0.05%

Minimum Rs.130 (for A/c Holder)

Minimum Rs.150 (for non A/c Holder)

From over Rs. 1000000

0.04%

Minimum Rs.500 (for A/c Holder)

Minimum Rs.700 (for non A/c Holder)

FED

16% of exchange

With Holding Tax (WHT)

Above 2500

Rs. 2 per 1000

Payment of DD

When DD is issued, its issuance advice is sent to the responding branch. So whenever DD comes for payment it is only paid if advice of that DD is already received by bank.

2.4.4.3.2 Mail Transfer (MT)

The same application form which is used for DD is generally used for MT in NBP. MT is not handed over to purchaser but instead it is directly sent to the beneficiary’s branch by the issuing office through mail on its own risk and responsibility. MT is issued only from one to the other branch of the same bank i.e. from NBP to NBP. The applicant desiring to send the funds by way of MT can either deposit cash or can give cheque to debit his account with the cost of MT including bank charges. An exchange memo is issued to the applicant as a receipt for his record.

But for MT it is necessary that the customer must have the Branch Code of the host branch, account number of a drawer and name of place, etc.

Issuance charges of MT

Exchange, FED and WHT rates are same as that of DD. additional charges which is taken for MT issuance is postage. And it is Rs. 70 for any amount of MT.

Payment of MT

When MT I received by branch for payment, its signature are checked. Every branch has specimen signatures of manager and operation manager of every branch of NBP. If signature on MT matches with specimen signatures then MT is paid. And it is also recorded in inward mail transfer register.

2.4.4.3.3 Telegraphic Transfer (TT)

Transfer of funds form one branch to another i.e. through NBP to NBP or upon other banks under special arrangements for the payment to beneficiary through telegram, telex or fax is called Telegraph Transfer (TT).

Issuance and payment of TT:

In telegraphic transfer (TT) the bankers use secret codes. One code is with issuing person and the second is with receiving person. When these are combining it become an amount that is called check. Following important things should be included in TT at the time of issuance:

Full name or account number of the beneficiary should be mentioned in the application form.

Instruction for the mode of payment should be obtained.

It should be recorded in remittance outward register.

TT issuance and payment is controlled through secret attest and the payment is only made after the confirmation of the check. When it is paid, it is entered in the TT payable register.

Issuance charges of TT:

Exchange, FED, WHT and P&T rates are same as that of MT. but additional 100 is charged for TT.

2.4.4.3.4 Pay Order

Pay order is an instrument which is issued from one branch and is only payable from the same branch. It is issued for payment in the same city. Pay order is meant for bank own payment but in practice they are also issued to customers.

Payment of pay order:

Payment of pay order is done only through issuing branch, so they are paid after completion of clearing process.

2.4.4.4 Account Opening Department

Account opening section of NBP can be considered the most important department because banking starts with the account opening. Every customer of the bank either he is of credit section or foreign section or any other department must have his account in order to get benefit and transaction with the bank. This section performs the following functions:

2.4.4.4.1 Opening of Accounts

2.4.4.4.2 Issuance of cheque books

2.4.4.4.3 Closing of accounts

2.4.4.4.1 Opening of Accounts

The opening of an account is the establishment of banker & customer relationship. There are certain formalities, which a banker has to complete before opening an account with a bank. Steps involved for account opening are as under:

Verification:

The first important step to take place in bank for account opening is to get satisfactory verification of the person, who wants to become bank’s customer. For this purpose NADRA verification is made.

Account Opening Form and Specimen Signature Card:

Account Opening Form

After verification of a person from NADRA a person is provided with an application form known as Account Opening Form (AOF). This form contains

Type of account

Account Number

Nature of Account

Initial Deposit Amount

Currency of Deposit

Particulars of customers e.g.;

Next of Kin information

Operating instructions

Know Your Customer (KYC)

Zakat deduction instructions

Signatures of the applicant

Service charges deduction instructions

Specimen Signature Card (SS card)

Specimen of signatures will be obtained from depositor at the time of opening an account. A specially designed card is used for this purpose. SS card must be countersigned by an authorized officer of the bank. For illiterate person a recent picture of new account holder is taken and attached with SS Card to reduce the risk of frauds and misuse of the cheque.

Stamping and Scrutinizing

After the fulfillment of all the necessary terms and conditions the relevant officer of Account Opening affixed stamps on the AOF for the sake of completion of all the formal rules and regulations. He affixed two types of stamps on the form and two types of documents.

Affixed stamps:

National Bank of Pakistan Stamp

Authorized Stamp

Affixed Documents:

NADRA Verification

Signature Card

Account Opening Register

After completion of step mentioned above, the details of account holder such as title, address, CNIC number and phone number etc. is recorded in account opening register.

Opening of Account in BBO (Branch Back Office System)

After opening of an account manually it is opened in BBO, so that all the transaction executed by customer can be recorded in a system. There are separate ledgers which are maintained for different types of accounts e.g.

Current Account Ledger (GL Code:555)

Saving Account Ledger (GL Code:567)

Fixed Deposit Account Ledger

Call Deposit Account Ledger

N.I.D.A (GL Code:513)

Foreign Currency Account Ledger (GL Code: 591)

Letter of thanks

After opening of an account in BBO letter of thanks is printed, which is latter issued by the bank to the customer for two purposes i.e. to say thanks to customers and to confirm the address of account holder provided by him at the time of opening the account.

2.4.4.4.2 Issuance of cheque books

The cheque book will ordinarily be issued to all customers who want to have withdrawing facility. At first, the cheque book is issued to the customer who comes with the letter of thanks and requests for the issuance of the cheque book. A cheque book which is issued at present in NBP Railway Road branch consists of 25 leaves for Rs. 125.

All subsequent cheque books are issued against the requisition Slip extracted from the previous cheque book. This slip is duly filled and signed by the customer. The signature of the customer is verified by the bank and new cheque book is issued to the customer. Serial numbers of cheques, name and account number are duly entered in the cheque book issue register of the bank.

If the cheque book is wasted or lost by customers then they have to submit a stamp paper for issuance of a new cheque book. If cheque book is lost then with stamp paper account holder must have to submit F.I.R for lost cheque book. Also, with cheque book issuance charges i.e. Rs. 125, Rs. 250 are charged in excess of that, in case of cheque book lost or wasted by customer.

2.4.4.4.3 Closing of accounts

Account Closing by Customer:

The customer can close the account. Customer is required to submit an application for closing of an account. Then the account is closed after deduction of closing charges i.e., Rs. 250 and the remaining balance is paid to the customer and the application is filed in Account Closing File. Remaining leaves of cheques will also be collected from the customer.

Account Closing by Bank:

All current accounts which have not been operated for six months or all saving accounts which have not been operated upon for one year classify as dormant account. And all the current accounts which have not been operated upon for 2 years or all saving accounts which have not been operated since 3 years are classified as inoperative accounts. The operations in accounts classified as dormant or inoperative will remained suspended unless request in writing for activation or restoration is received from the Account Holder. If the account holder fails to reactive the account despite of bank's notice, the bank will have the right of exercising option of closing of account and in such case will refund the balance to the customer after deducting all applicable charges.

2.4.4.5 Cash Dealing Department

Cash department of NBP handle all receipts & payments of cash in both local and foreign currencies. As a result it is also responsible for the book keeping of these transactions & the safe custody of cash and near cash securities of NBP.

Cash department of NBP is separate close part and it performs following functions.

Cash receipts & payments

Government receipts & payments

Collection of utility bills, etc.

The following books are maintained in the cash department:

Receiving Cashier Books

Paying Cashier Book

Scroll Books

Cash Balance Book

When cash is received in counter with pay-in-slip it is entered in Receiving Cashier Book. When the cheque or any negotiable instrument is presented at counter for payment, it is entered in the cashier Payment Book and the payment is made to payee. The consolidate figure of receipts and payments of cash is entered in the Balance Book and closing balance of cash is drawn, i.e.

OPENING BALANCE + RECEIPT – PAYMENT = CLOSING BALANCE

2.4.4.6 Credit Department

Advances department is among one of the most important departments of NBP. Through this department, major portion of the profit is earned. All advances are directly controlled by the Credit Management Division of Head Office. Bank is a profit seeking organization so it attracts deposits from the customers at low rate of interest and makes advances at a higher rate of interest to the individuals and business firms.

2.4.4.6.1 Types of Advances

The types of advances given in NBP Railway Road Branch are:

Demand Finance (Gold Finance)

In this type of financing facility, the whole amount which is sanctioned to customer is paid at one time. Any person individual or group, company or firm etc. can achieve this type of financing. The mark-up is calculated on the total amount given to customer and it should be paid or renewed before the date of final adjustment. Under demand finance Gold ornaments are often taken as security for loan in NBP Railway Road Branch. The markup rate on Gold Loan is 15.5% and amount sanctioned on net 1 gram of gold is Rs. 2500 and margin is 50%.

The documents which are required to sanction Gold Loan is as follows

Borrowers CNIC

Legal Heirs CNIC

Contact Number

Value sheet of Gold by Gold Smith

Cash Finance

In this type of financing the borrower is allowed to make withdrawals of funds as and when he requires, but the total amount outstanding cannot exceed the limit sanctioned which is rupees five hundred thousand maximum. The mark-up/interest is calculated on the amount outstanding and the prevailing markup rate is almost 16.7% but markup rate on cash finance is determined by three things i.e. KIBOR Rate + Cover Rate + 3.25. Cash Finance is sanctioned only to the businesses that are well established and have good will in market.

Running Finance

Running finance is sanctioned where the amount goes beyond the limit of rupees five hundred thousand. Security against running finance is that which can be easily convertible in to cash and bank kept 25% margins with it. Mostly it is given against Defense Saving Certificate and prevailing markup rate is 15%. The mark-up is calculated the same way as in case of CF.

NBP Advance Salary

NBP Advance Salary is a personal loan, in which salaried person can avail maximum 20 salaries with easy repayment installments. But for Advance Salary maximum amount which can be sanctioned is four hundred ninety thousand only. Prevailing markup rate on this kind of financing facility is 19%. It is given to the Permanent Employees of Govt. or Semi-Govt., Autonomous or Semi Autonomous, Local & other bodies who are maintaining their Salary A/Cs with NBP. Its maximum repayment period is 5 year and installments are directly deducted from the salary in every month.

Document required for Advance salary are:

Completely filled Application Form

Attested CNIC of borrower

Salary slips for latest Six months

ICIL verification

2.4.4.6.2 Steps for sanction of loan from NBP

STEP 1:

In the first step, bank receives an Application Form from the customer in which an individual or company, who wants loan from NBP provides the following information to the banker.

Purpose of loan

Details of all firms or companies associated with business

Name of proprietor/ partner/directors

Accurate and up-to-date balance sheet and profit and loss statement of last two years of business

CIB report etc.

STEP 2:

In this step, bank looks all the details provided by the customer. Bank in return sends OFFER LETTER to the customer. In the offer letter, bank writes all the details of the loan facility, mark up rate, installments to be paid and other terms and conditions.

STEP 3:

The customer SIGNS the offer letter and accepts all the terms and conditions given by the bank.

STEP 4:

To get the approval from the head office, NBP make the CREDIT LINE PROPOSAL (CLP) and PROPOSAL ABOUT CUSTOMER and sends it to head office.

STEP 5:

After approval from the head office, Bank sanction amount to customer and open two accounts i.e.

Loan account

Current account

The purpose of these two accounts is to give credit to the customer and debit the bank account or vice-versa.

2.4.4.7 Foreign Exchange Department

Foreign exchange is an important department in NBP. In the foreign exchange (FEX) department all the operations of the bank are done in the same way, as in all other departments of the bank. The only difference in dealings of FEX and other departments is that the foreign exchange department deals in foreign currency rather than in local currency.

2.4.4.7.1 Functions

This department performs following functions:

2.4.4.7.1.1 Opening of account in FC

2.4.4.7.1.2 Closing of FC account

2.4.4.7.1.3 Recording of transactions of FC

2.4.4.7.1.4 Inward & outward foreign remittance

2.4.4.7.1.1 Opening of account in FC

The FC account is opened by depositing foreign currency. In NBP, foreign currency account can be opened in:

Us Dollar ($)

Great Briton Pound (£)

Euro (€)

Foreign currency account can be current or saving. In foreign currency accounts profit is paid but zakat is not deducted. For sharing of profit in FC account, there should be minimum balance equivalent to $1000. If there is less balances, than $5 are deducted each month from that account. Procedure of Account Opening in Foreign Exchange is done in same way, as done in other department.

2.4.4.7.1.2 Closing of FC account

Procedure for closing FC account is same but charges which are deducted for closing of FC account id equivalent to $5.

2.4.4.7.1.3 Recording of transactions of FC

The same procedure is followed for the recording of all transactions in BBO and passing of cheques etc. Only additional thing which is done in FEX is the preparation of FET A and FET C. FET stands for Foreign Exchange Transactions. In this statement all the transactions are recorded which are being executed in a whole day whether it is encashment of cheque or issuance of FDD, FTT, or responding of SWIFT messages or clearance of FC cheques etc. Then at the end of the day this statement is sent to the Head Office Karachi.

2.4.4.7.1.4 Inward & outward foreign remittance

FEX deals with following types of remittances which can be inward or outward,

Foreign Telegraphic Transfer (FTT)

Foreign Demand Draft (FDD)

Foreign mail transfer(FMT)

SWIFT

Western union money transfer(WUMT)

Samba

FTT, FDD & FMT

Issuance of these three services is just like ordinary local currency DD, MT & TT. The only difference is that FTT, FDD and FMT is issued in foreign currency and for the foreign payee.

SWIFT

SWIFT stands for "Society for Worldwide Interbank Financial Telecommunication". SWIFT sends payment orders to the receiving bank which must be settled via correspondent accounts that the institutions have with each other. SWIFT message consists on one-page containing the name and code of the originating bank, value date, the address and code of the receiving bank, Information of remitter and beneficiary and also include the MT category of the transmission e.g. 103 0r 202 etc.

The MT (message type) 103 indicates that this message is for the payment and the amount mentioned in SWIFT message is credited to the account of beneficiary. If MT is other than 103, then its mean that this message is not for payment, that message can be for getting the credit information e.g. if SWIFT message does not convey complete information about all parties involved in the transaction then MT 202 is used for getting missing information.

Western Union Money Transfer

Western union money transfer is a fastest way for transferring of funds. Different Government and private organization are dealing with WUMT. Before payment of WUMT following things are needed from customer

MTC NO (10 digit number)

Receiver name

Sender name

Telephone number

Photo copy of ID card

Expected amount (10% margin is acceptable)

WUMT payment can be taken from any bank or organization dealing with WUMT.

SAMBA

For Samba payments requirements are same as that for WUMT. But these payments can be paid only through any branch of NBP.

For samba payments 8, 14 & 16 digit number are used. NBP also deals with Xpress money payments which have 16 digit numbers.

2.4.5 Work Done By Me

In Deposit department, I was given instructions by Mr. Javed Iqbal in performing different tasks which are described below:

I filled the cash pay-in-slips according to customer information.

I confirm the signature of account holder and pass cheques at cash counters.

I learned operating of BBO system in this section.

Preparation of debit and credit vouchers

I cross checked the amount in figures and words written on cheques.

I learned the procedure for payment of cheque at counter

I learned the procedure for payment of cheques in transfer

In clearing department I was also given instructions by Mr. Javed Iqbal who is well qualified as well as experienced person in his work. Experience at clearing department was awesome. In this department I learned that fanfolds are used for inter branch transfer of funds. Tasks performed by me in this department were:

I helped to keep the cheques separate which are brought in bank for clearing purpose.

I filled the transfer pay-in-slips.

I recorded local clearing entries in NIFT register.

I stamped the cheques and Vouchers for Local clearing through NIFT.

I prepared bundle and add list of local clearing cheques.

I prepared some memos for cheque return.

I record the data of cheques which are returned.

I learned that it is very important to keep the record of previous clearing in hard form.

I prepared and respond L.S.C in this department and keep its record in register.

I prepared S.C clearing and keep its record.

I also prepared transfer and credit vouchers for responding of S.C.

I also prepared fanfold F-15 for clearing of inward cheques.

During my stay in Remittance department I assist Mr. Javed Iqbal and observe different mode of transfer like

Issuance of Demand draft

Issuance of Mail Transfer

Issuance of Pay Orders

Issuance of Call Deposit

I made charges vouchers for DD and MT and call deposit

I learned entries of DD, MT and PO issuance and cancellation in remittance software.

Made Debit vouchers against the DD & MT charges

Made Credit vouchers (contra) against the DD & MT charges

Learnt the procedure and entries of payment of PO, DD & MT

In Cash department, I assist Cash Officer Miss Saima in performing different tasks which are described below:

I learned the procedure for cash deposit and cash payment.

I prepared credit scroll for Govt. receipts, traffic chalan and electricity bills.

I prepared F-16 for pension.

I prepared F-15 for Govt. receipts.

In this department I also made Electricity Bills Vouchers

In Foreign Exchange department, I assist the incharge of this department Mr. Rana Ijaz in performing different tasks and for E-Remittance I assist Mr. Ansir Iqbal. The tasks which are assigned to me in this department are:

In this department, I again prepared debit and credit vouchers.

Made vouchers for Foreign Currency Cash Deposit

Learned about Payment against Foreign Currency Checks

I learned about the payment of western union and Samba on computer terminal.

I also prepared vouchers and daily statements of WUMT and Samba payments.

I learned how to issue and cancel FDD and its entry in system.

I learned about issuance of FTT.

I also learned Clearing procedure of Foreign Cheques.

In this department I also issue cheque book and entered it in required register.

I prepared FET A and FET C.

I also record swift message in register.

In Credit department, I assist the incharge of this department Mr. Laeeq Ahmed in performing different tasks which are described below:

I Learned about the documents required for Gold Loan (Demand Finance)

I also learned about the calculation of Markup for Gold Loan.

I learn how to open and close account for gold loan.

I also prepare vouchers required for closing of gold loan.

In Account opening department, I assist Mr. Ansar Mehmood who told me about the working of this department. Working in this department gave me a chance to understand the whole process with interest because as student I have read about it a lot. My assignments in this department were:

I fill the account opening forms.

Recheck the forms to make sure that the forms are error free.

I stamped the documents on the instruction.

I checked the essentials to attach with the forms like ID cards, Application form.

Then I issue the cheque book and record it in cheque book issue register.

I learned about opening of account in BBO.

I dispatched letter of thanks to customers.

2.4.6 Summary of learning

2.4.6.1 What skills and qualifications you think that you have gained from the internship?

I have gained many skills during internship period, which will be helpful in future. The skills I gained during my internship session are as follows

Time Management Skills

During my internship period I have learnt punctuality and the significance of time in an organization. I have realized that time management is an important element of work. My practical learning has taught me to prioritize and organize my work according to schedule that enabled me to complete my tasks in the allotted time.

Human Skills

I learnt the human skills in NBP in true manner. Human skills associated with an employee’s ability to work well with others both as a member of a group as well as individual leader who gets things done through others.

Self Control

Our ability to exercise control over our own behavior by setting standards and providing consequences for our own actions refers to self control. As an internee this skill is really important because an internee does not have much of authority.

Co-Ordination

Co-ordination means the smooth flow of work that must be carried on consistently and systematically without any breakage. In a corporate environment like banking there is need for integration making co-ordination an essential environment. As an internee it is necessary to co-ordinate well with supervisors and co-workers.

Better Communication Skills

During my BS (Hons) I have attended courses on communication in different semesters and was taught how to communicate effectively with others. This was my first hand experience of communicating with the manager and all other staff members to socialize myself among those professionals. This experience improved my communication skills and gave me the confidence of communicating with professional people.

2.4.6.2 What kind of responsibilities you have undertaken during the internship period?

During my internship in NBP, i have given many responsibilities, which I have accomplished by using my Interpersonal, Communication and Conceptual Skills. But if I found any responsibility risky or my supervisor give me some task risky I always done that task under the supervision of someone. I learnt some responsibilities of the operational manager. During internship I have given the responsibility to deal with customers, guide them for their problems and provide them service what they want e.g. filling of vouchers. I have also given the responsibly of clearing of cheques for which I have to deposit the cheques and then go through all the procedure of clearing. Also I assist operational manager, incharge of foreign exchange department and complete all the responsibilities provided by them e.g.

To provide information to customers who want to open account with NBP.

Checking that whether all debit and credit transactions entered in BBO have any financial evidence in hard form?

Balancing of TDR register

In FEX, preparation of daily statements, clearing of cheques & payments of E-Remittance etc.

In addition to all these, I have also given the responsibilities which I have already mentioned in section 2.4.5.

2.4.6.3 How do you think the internship will influence your future career plans?

I learnt a lot during my internship, few of which are as: I got the practical experience about how to work in a professional environment. I can say that it is a very good experience of doing my internship in NBP Railway Road Branch. If I want to apply in banking sector then, this experience is very helpful in my interviews and also has much impact in my practical life to be professional.

As far as my internship and experience is concerned, I learnt a lot during my internship because I got practical knowledge before entering in the practical life. I learn a lot about banking practicing in Pakistan, rules and regulations and different procedures followed by banks, the organizational culture and structure of the bank, National Bank of Pakistan (NBP). Also internship provides me the opportunity to assess myself and my interest for future. As I have a very good experience of working in NBP, so I have a positive attitude towards banking sector. And I will plan my future according to my interest.

2.4.6.4 How do you think the internship activities that you carried out are correlated with your classroom knowledge?

During Internship it was my prime objective to furnish my knowledge (Theory) to various practical situations. The practical work presents an analytical problem while relating theory with practice. As a result, analysis of practical versus theory requires a distinct approach. This part of report is the essence of the internship, as this will help to better understand the working environment of the bank by finding the relationship between what is written in the books and what is actually going on in fields. The theory written in the books in cases is not implemented as it is. In some cases theory is implemented with a little modification but in other cases theory has nothing to do with practice.

Although I have already studied the course of "Accounting" & "Money and Banking" before my internship, still I found it of very minor help in the bank. In accounting, banks don’t prepare worksheet, but part of worksheet is prepared like trial balance. The securities for the loans are handled in the same way as theory says like mortgage, pledge, hypothecation, advances against insurance policies or liquidation procedure is the same. There is some difference lies in types of loans in bank that is theory talks about four or five types of loans that is cash finance, overdraft, loans etc., but in practice there are some more types used by bank like running finance, demand finance etc. All other concepts of remittances, bills, foreign exchange deposits, letters of credit are in accordance with theory almost. A bank's balance sheet is different from that of a typical company. You won't find inventory, accounts receivable, or accounts payable. Instead, under assets, you'll see mostly loans and investments, and on the liabilities side, you'll see deposits and borrowings. To conclude all this, for me, Theory gives the direction to understand the processes and the terminologies going across the World while on the contrary practical life is specific, enclosed in a jar.