The Report

On

Management System of National Bank of

Pakistan

Quaid-E-Azam University
Islamabad
Department of Administrative Sciences

Submitted to:
DR. AJMAL WAHEED

Submitted By:
Waheed Zafar
Touqeer Ahmed Shahzad

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The Report
On

Management System
Of
National Bank of Pakistan

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 PREFACE

The field of banking has always been a source of inspiration for both of us. God gave us an
excellent opportunity to complete our project at National Bank of Pakistan, one of the
leading banks in.

We had a general idea about the banking, but once we practically started the Project in
banking field we observed much about banking, we realized the importance and significance
of commercial banking for the development of economy. To adjust such a large commercial
organization was not an easy task. However, by the grace of Almighty Allah, we finish our
project in a suitable manner and we learned a lot about the Management system of National
Bank of Pakistan.

This expanded our vision about the banking sector. We complete this project after six visits
in National bank of Pakistan. We have exclusively studied and observed the operations and
functioning of the bank and tried our best to familiarize ourselves with all the dimensions of
the bank. The purpose of this report is to evaluate the Management System of National
Bank of Pakistan in diversified ways and give concrete recommendation for further
improvement. Although the bank is functioning satisfactory, but the path to ultimate success
is still full of threats and hurdles. We are thankful to all those who helped us in one-way or
the other and guided us in the preparation and compilation of this project in a presentable
fashion.

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 Executive Summary
We were assigned to do project on the management system of National Bank of Pakistan.
We selected the organizing function of G9 branch. The specific codes are allotted to each
branch in National Bank of Pakistan. The code of this branch is 1932. It started its
functioning in 1995. A manager of AVP rank heads this branch. He deals with the external
functions of the branch. There is an operational manager working under branch manager.
His function is to manage the internal functions of the branch. He checks the daily
transactions accomplished in the branch. His duty is to have control on the employees
working under him. There are eleven employees working in this branch. The staff of the
branch is not sufficient for accomplishing the tasks of branch effectively. Due to too much
load of work and insufficiency of staff, the behavior of branch staff is not ideal. Moreover,
the manager has no authority to delegate his authorities to his subordinates. Therefore, the
staff has to consult him for any new task. Because of less staff, there are no separate
departments except cash department. At the closing of each month, the branch manager
conducts meeting of the staff to discuss about the functioning of the branch. However,
casual meetings can also be conducted in case of emergency. There is no information and
complaint desk available in the branch that is very essential to exist.

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 Table of Contents
Chapter No. 1......................................................................... 6
Bank Introduction ................................................................ 6
Branch Introduction ............................................................. 8
Chapter No. 2......................................................................... 9
Organizing of the Branch .................................................... 9
Analysis ............................................................................. 13
Chapter No. 3....................................................................... 16
Recommendations ............................................................. 16

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 Chapter No. 1

BANK INTRODUCTION

National Bank of Pakistan is the largest

commercial bank operating in Pakistan. Its
balance sheet size surpasses that of any of the
other banks functioning locally. It has
redefined its role and has moved from a public
sector organization into a modern commercial
bank. The Bank's services are available to
individuals, corporate entities and the
government. While it continues to act as
trustee of public funds and as the agent to the
State Bank of Pakistan (in places where SBP
does not have a presence). It has diversified
its business portfolio. It is a major lead player
in the debt equity market, corporate
investment banking, retail and consumer banking, agricultural financing, treasury services.
It is showing growing interest in promoting and developing the country's small and medium
enterprises. At the same time, it is fulfilling its social responsibilities, as a corporate citizen.
[www.nbp.com.pk]

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 Organizational Chart of NBP

PRESIDENT

MEMBER BOARD

SENIOR EXECTIVE VICE-PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICER GRADE I

OFFICER GRADE 2
BRANCH HIERARCHY

OFFICER GRADE 3

MESSENGER

PEON

SWEEPER

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 Branch Introduction

We did our project in (National Bank of Pakistan) G-9 Branch, Islamabad. This branch was
established in 1995. The code of this branch is 1932. It is the only branch in G8, G9, and
G10.

From last many years, this branch is not only achieving its targets of deposits and advances
rather it remains above the targets. According to the financial record of last year, this
branch was earning more than 20% of total profit of the region. Every year the targets of
this branch are increasing by 20 to 25 percent but still there is a potential in the market to
meet these additional targets. This branch is performing its functions in traditional style and
soon will be converted into an online branch. [Branch manager; Muhammad Nayyer]

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 Chapter No. 2

Organizing of the Branch

The National Bank of Pakistan, in order to facilitate its functions on branch level appoints
Branch Managers & other staff according to branch’s activities and volume of business. The
branch managers are responsible for all functions and staff within the branch office. The job
of branch managers is to take charge of the entire operation of his branch, making sure that
everything runs smoothly. The other functions involve assuring that proper procedures are
followed, and reporting to upper management any problems or providing reports and
updates as required by bank’s protocol.

The G9 branch is headed by a manager of AVP rank. The function of this manager is to
communicate with head office and regional office. He also creates links with
businesspeople for increase in deposits and accounts of branch. He deals mostly with the
outside operations of the branch. The internal operations of branch are managed by
operational manager. His duty is to have control on the accounts and transactions. He
checks vouchers and slips filled by the employees each day before closing. He also checks
transactions, their postings, and accounts to find out errors from them.

Departments:

We found no concept of departments in this branch except cash department. There are three
ordinary cashiers and a head cashier in the branch. All other tasks are performed by
individual employees. For example, one employee is attached with pensions, one to
remittances, and one to salaries.

Staff:

There are a branch manager, operation manager, pension officer, remittance officer, four
cashiers, one trainee, three guards, and an employee of scale five working in this branch.
Staff of the branch is insufficient for the workload. Due to which the staff feels problems in

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giving proper time to their customers. Sometimes due to this shortage of time, they lose
their good customers. The shortage of staff, sometimes, creates problems in record keeping
and performance of other functions of the branch. In addition, the staff relationship was
normal. We found them shouting on each other on minor issues. This sort of attitude is not
good because it mars bank image and juniors’ willingness to learn and work hard and in the
end will hurt the whole team.

Authority Responsibility Relationship:

Manager has very limited authority. He has to take the approval from general and regional
manager for any diversification. The manager has lesser authorities to delegate. However,
the employees perform their activities according to given instructions.

Line and Staff Concept:

There is no concept of line officers and staff officers in the branch. In place of that, the
concepts of branch manager, operation manager, pension’s officer, remittance officer, and
cashiers are there in the branch.

Meetings:

The staff meetings are conducted at the closing of each month. However, the branch
manager and operation manager conduct meetings whenever they find some issue.

Recruitment:

The branch manager has no authority to recruit any person. Special recruitment committees
are established by the head office to perform this task. However, the security personals are
hired through security agencies.

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Span of Management:

There are three types of branch categories in National Bank of Pakistan that are category I,
II, and III.
Category I Branches:
Four employees report to their branch manager.
Category II Branches:
Eleven employees report to their branch manager.
Category III Branches:
Fifteen employees report to their branch manager.

In G9 branch there are eleven employees working under the supervisions of the branch
manager. Therefore, this branch lies in category II. It shows that flat (narrow) structure of
organization is being followed in this branch. The organizational chart of branch is as
under:

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Training and Promotion:

The new recruited employees are trained according the policies established by head office.
There are lesser in-service training programs for lower staff; however, there are training
facilities at managerial level. On considering this issue, different training programs have
been started by the head office for the improvement in the skills of the staff. All the
promotions are made by the head office. Pays are determined according to the scales no
performance. There is no proper way of measuring performance for promotions. However,
ACR’s of employees, prepared by the operational manager, are considered while promotion.

Risk Management:

The management of the branch tries to adopt Basel II guidelines for risk management. Basel
I and II are the international guidelines for risk management.

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Analysis
Shortage of Staff:

There are long processes for making a transaction in the branch because of insufficient staff.
Because of less staff, the record keeping system of the branch is delayed. For example, the
money deposited in account is posted to account on the next day. If you send money to
someone, it will reach there after one or two days. Number of customers per employee is
very high. Cash department is suffering very badly and facing great deal of over workload.
All this give rise to delays. Sometimes due to this delay, the branch loses its good
customers. The delays time enlarges during the salary days of government employees, and a
customer, in these days, needs one or two hours to withdraw his/her amount.

Delegation of Authority

Manager has very limited authority and has to take approval from his management authority
i.e. for approving advance he has to take the approval of general and regional manager first.
The other problem is created, when the manager does not present in his office, the customer
has to wait for hours. Nobody has too time to wait for hours. This discourages both the
customers and the officers because they have to suffer a lot.

Training:

The training of employees during service is necessary to keep up with the changing trends.
Extra customers can be dealt by using the new technology. But unfortunately, the
employees are less aware of new technologies as compared to other banks. Even old
employees are not able to operate PCs. The staff of the branch hesitates to use new
technologies. National Bank of Pakistan needs extended training facilities for its employees
to cope with this problem. But, it has lesser training facilities for its employees. Due this
fact, their performance suffers badly. Moreover, this situation creates difficulty for handling
new challenge.

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Staff Attitude:

According to manager of the branch, the branch deals with more customers in one day than
other banks deal even in one month. In contrast, the staff is less. So, the behavior of staff is
not ideal due to heavy load of work. Because of extensive load, the employees are suffering
different diseases like tension, heart attack, and high blood pressure, etc. Moreover, the
tension of this heavy work disturbs their personal lives also.

Departmentalization:

We hardly found any separate department in the branch except accept cash department. An
employee deals various nature of work. Because of this, his/her efficiency and speed of
work decreases.

Work Environment:

Work environment is not satisfactory because of visits of many customers’ in a single day.
Furniture, temperature, light, and sitting arrangements are insufficient for the customers and
branch employees. The businesspeople hesitate to open account in the branch because of
unfriendly environment of the branch.

Unjustified Appraisal Criteria:

The management should have certain measures to check performance of employees. Then
employees should be promoted by considering their performance. But, no justified appraisal
criteria are implemented for annual increase in salary and promotion of staff. The
promotions are made seniority basis not on performance basis. It creates un-satisfaction
among the employees of the Bank. The branch manager has no authority in this regard.
However, ACR’s, prepared by operational manager, are consulted in this regard.

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Difference between Theory and Practice

A vast difference exists between theory and practice. National Bank of Pakistan has written
procedures for the performance of each activity. To mitigate risk it has guidelines of Basel
II. But practically, these procedures are not followed by the employees of the branch. This
diversification from defined procedures creates causes of errors and these errors may lead to
the loss of organization.

Customer Complaint Cell:

Not every person can go to the manager for the complaint because most of the people are
hesitant to meet the manager. To mitigate this problem, there should be an information desk
to provide the information and to receive the complaints of the customer in the bank. But,
there is no complaint box or reception desk available in the branch.

Finance System of the Organization

As National Bank of Pakistan is the bank of government, it financial system is mixed and
complicated. It has to deal with government, public, and other banks. In addition, it deals
with all kinds of lending and investing activities and hold down the cash position of others
financial institutions like banks (MCB, UBL, ABL, etc.) and insurance companies.

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 Chapter No. 3

Recommendations
 The branch should improve the quality of training of its employees and the honesty,
controls and efficiency of its structure and procedure.

The branch of National Bank of Pakistan, situated in G-9 Islamabad, should improve the
quality of its employees.
This can be done through regular training programs for employees. Their moral will also
increase through training. It is not much difficult as one thinks. The one of the problem that
will be faced regarding employees training with the intention of towards honesty, efficiency
and control of its structure and procedure, is how they can be trained. This branch can get
benefit from the Staff School Situated in Melody, Regional Office, Islamabad. Obviously
second problem regarding this will be setting of time. According to our analysis and
knowledge, employees of G-9 Branch can set their training timing after their Bank timing
once a week or four full days in a month. That is not stiff as the staff college is not too far
from G-9 Branch. For motivation to the training, the bank should give extra remuneration to
the employees who are getting training.
The results of this training will be long lasting not only to the National Bank of Pakistan, but
to employees and customers also.

 The G-9 branch should adopt modern banking tools and techniques by further
investment in IT infrastructure.

The manager of the G-9 branch Muhammad Nayyer can easily adopt modern banking tools
and techniques and that is not difficult for him to invest on it. In fact, that branch has to
handle a lot of customers regarding pensions, gratuity funds, other government payments
and receipts. The manager grouped these activities under the government department.
Department use to spend normally 10 days to pay pension to employees other than
employees of railways then next 10 days of month are spending to handle railways

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employees. If they use modern techniques this can be done in 1 or 2 days instead of 10
days.
Simply information system can be acquired or a new one can be made if manager of this
branch contact with an IT professional. The all data related to employees’ pensions and
their gratuity funds will be computerized. The statement that they use to make on daily
basis e.g. scroll of government employees will be an easy task through this information
system. The manager can allocate reserves from profit after approving them from higher
authorities. He can get approval of the bill by providing them strong reasons of less staff
and more customers.

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