PRESENTATED BY:

M USMAN KHAN

M SOHAIL KHAN

M UMER DOGAR

M EJAZ GADI

M SALMAN FARSI

M WASEEM JUTT

INTERNAL CONTROL SYSTEM DEFINITION In accounting and auditing, internal control is

defined as a process affected by an organization's structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives.

INTERNAL CONTROL PROCESS

INTRODUCTION:National Bank of Pakistan is the largest commercial bank operating in Pakistan

The bank is engaged in providing commercial banking and related services in Pakistan and overseas.

The Bank's services are available to individuals, corporate entities and government.

its business portfolio is a major lead player in the debt equity market, corporate investment banking, retail and consumer banking, agricultural financing,

NBP headquarters in Karachi, Pakistan with over 1,254 branches country wide.

Participating in "World Bank" and "Asian Development Bank's" lines of credit.

VISION:"To be recognized as a leader and a brand the same with trust, highest standards of service quality, international best practices and social responsibility."

MISSION:NBP will aspire to the values that make NBP truly the Nation’s Bank, by:Institutionalizing a merit and performance culture. Creating a distinctive brand identity by providing the highest standards of services Adopting the best international management practices.

GOALS: To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products.

Excellence in Direction Excellence in Growth Excellence in Performance Excellence in Management Excellence in Achievement 

OVER VIEW OF THE ORGANIZATION:

CORPORATE & INVESTMENT BANKING GROUP

CORPORATE & INVESTMENT BANKING GROUP

CREDIT MANAGEMEN

T GROUP

CREDIT MANAGEMEN

T GROUP

AUDIT & INSPECTION GROUP

AUDIT & INSPECTION GROUP

COMPLIANCE GROUP

COMPLIANCE GROUP

PRESIDENT’S

SECRETARIAT

PRESIDENT’S

SECRETARIAT

BOARD OF DIRECTORBOARD OF DIRECTOR

HRM & ADMINSTRATIO

N GROUP

HRM & ADMINSTRATIO

N GROUP

OPERATION GROUP

OPERATION GROUP

COMMERCIAL & RETAIL BANKING GROUP

COMMERCIAL & RETAIL BANKING GROUP

TREASURY MANGEMEN

T GROUP

TREASURY MANGEMEN

T GROUP

SPECIAL ASSET

MANAGEMENT GROUP

SPECIAL ASSET

MANAGEMENT GROUP

Overseas Management

Group

Overseas Management

GroupI.T. GROUPI.T. GROUP

SECRETARY BOARD OF DIRECTOR

SECRETARY BOARD OF DIRECTOR

CHAIRMAN & PRESIDENT

ORGANIZATIONAL STRUCTURE:

ORGANIZATIONAL NETWORK:

BRANCH NETWORK:-10 Groups headed 9 Regions reporting to as many Regional Chiefs and 15 Single Branch Zones headed by Zonal Chiefs; 12 corporate branches and 1,254 domestic branches headed by Branch Managers control its field operations.

GLOBAL NETWORK:- 18 Oversea Branches5 Representative Offices1 overseas Subsidiaries

DOMESTIC NETWORK:-1254 Domestic Branches6 domestic Subsidiaries 29 domestic regional offices 

DEPARTMENTALIZATION:

COMMERCIAL & RETAILING

DEPARTMENT

COMMERCIAL & RETAILING

DEPARTMENT

ACCOUNTS DEPARTMENT

ACCOUNTS DEPARTMENT

GOVERNMENT DEPARTMENT

GOVERNMENT DEPARTMENT

FOREIGN EXCHANGE DEPARTMENT

FOREIGN EXCHANGE DEPARTMENT

CREDIT AND ADVANCE DEPARTMENT

CREDIT AND ADVANCE DEPARTMENTGENERAL BANKING

DEPARTMENTGENERAL BANKING

DEPARTMENT

NBP DEPARTMENTS

1. GENERAL BANKING DEPARTMENT:

General banking involves the following sections:

•Deposit Section•Accounts Opening Section•Cash dealing Section•Clearance Section•Remittance Section•Lockers Handling Section

1 DEPOSIT SECTION:-DEPOSITDEPOSIT

Checking DEPOSIT Accounts

Non-Checking Accounts

PLS Saving Account

PLS TDR’s

Current Deposit Accounts

NIDA

Special Notice Deposit

Accounts

Foreign Currency Accounts

There are two broad categories of deposits. These are1. Time deposit 2. Demand deposit

TYPES OF ACCOUNT/ DEPOSIT:-Following types of accounts are open in NBP•Current or demand account •Saving account •Fixed account•Call Deposit Accounts •Foreign Currency Accounts

2 ACCOUNT OPENING SECTION:- This section performs the following functions:•Opening of Accounts•Issuance of cheque books•Closing of accounts

3 LOCKER SERVICE SECTION:- There are four types of locker depending upon the size of lockers operate in banks.•Small size locker •Medium size locker •Large size locker •Extra large size locker

4 CASH DEALING SERVICES:-

•Cash receipts for receive deposits.•Cash payment for encashment of cheques.

5 CLEARING SECTION:-

•Local Clearing, •Short Credit Service, •Local Short Credit and •Inter City

CLEARING PROCESS:

•Inward Clearing.•Outward Clearing .

6 REMITTANCE SECTION:-

•Pay Order. •Mail Transfer .•Demand Draft.•Telegraphic Transfer.

2. ADVANCE DEPARTMENT:

TYPES OF ADVANCES:DEMAND FINANCE:CASH FINANCE:RUNNING FINANCE:LOANS:

TYPES OF LOAN:The credit department of NBP has providing the following types of loans•Short term loans •Long term loans •Working capital loan•Syndicate (project) loan

3. ACCOUNTS DEPARTMENT: The main function of account department of NBP is to maintain general ledger accounts and after the business hours the function of the account officer is to close books.

1)   ROUTING OF EXPENSE VOUCHERS:-

VOUCHER SYSTEM: Voucher is a system, which is generally designed to provide strong internal control over the transaction, In bank two vouchers are used DEBIT VOUCHER CREDIT VOUCHER

2. PREPARATION OF DAILY ACTIVITY REPORTS:-

The main function of this department is to check daily transactions whether cash, transfer of payments, billing, and clearing of all the departments. It includes the details of the following:•Loan transactions.•general ledger transactions•Foreign currency related transactions.•Fixed deposits transactions. 3. PREPARATION OF WEEKLY AND MONTHLY STATEMENTS:

Second major function of accounts department is the preparation of various statements. These statements are:A. WEEKLY STATEMENTSB. MONTHLY STATEMENTS

4. PREPARATION OF TAX PURPOSE STATEMENTS:

The department also prepares two statements for the purpose of paying tax on monthly and annual basis.

4. BILLING & GOVERNMENT RECEIPT/ PAYMENT DEPARTMENT:

In this department all types of Government receipts i.e. Revenues, Taxes, Agriculture Tax, Government Fees, EOBI Funds and Utility Bills are deposited.

1 Payment of Provident Fund 2 Payment of Benevolent Fund 3 Payment of pension 4 Collection of utility bills, property taxes, Challans and dues of educational institution. 5 Payment of salaries 6 Payment of zakat

5. FOREIGN EXCHAGE DEPARTMENT:-The foreign exchange department has four main parts on which the national bank works. It consists of:I.   Imports and Exports.II.   Foreign remittance.

 

ADVANCE PAYMENT: COLLECTION:                 LETTER OF CREDIT:

2. FOREIGN REMITTANCE:It includes local and foreign currency fund transfer. NBP also provide the facility to its customers in remitting funds from one place to another place. At present bank provides the following instrument that facilitates the transfer of funds.

•TT ( telegraphic Transfer)• DD (Demand Draft)• PO (Pay Order)

1.   IMPORT AND EXPORT:-

National bank acts as an intermediary in the exports and imports between the two parties.. There are four major types of contracts or term of payment that are being used in the trade.

 OPEN ACCOUNT:

6. COMMERCIAL & RETAIL BANKING DEPARTMENT:

National Bank of Pakistan serving following product lines:

1) PREMIUM AAMDANI SCHEME: - Monthly Income Scheme

2) PREMIUM SAVER SCHEME:- Yours saving reward (PLS Saving Account)

3) SAIBAN SCHEME: - Open the Door to Your Dream Home (Home Financing)

Main features of this scheme are as under.•Finance is available for:•Home Purchase•Home Construction •Home Renovation•Purchase of Land + Construction

4) ADVANCE SALARY SCHEME:- Personal Loan

Take up to 20 times of Your Take Home Salary

5) CASH CARD SCHEME: - one card does it all

ATM + Debit Card

6) INVESTOR ADVANTAGE SCHEME:- easier financing, profitable trading

Financing Facility for Stock / Retail Investors

7) CASH N GOLD SCHEME:- Ancash and meet your needs

Ready Cash against Gold

8) KISAN DOST SCHEME:- Agriculture Made Easy

Agriculture Farming Program

9) KISAN TAQAT SCHEME:- promise of prosperity

Dairy Farm Scheme

10) PAKREMIT SCHEME:- NBP's Internet Based Home Remittance Service

STRENGTH:•NBP one of the largest financial institutions of Pakistan with eight million of customer•NBP has 1254 branches located all over Pakistan. And 23 international locations including the USA, United Kingdom, Europe and the Far East.•It acts as an agent of the Central Bank wherever the State Bank does not have its own Branch.•Performing social responsibilities and claiming “The Nation’s Bank”•Earning commission from SBP on Government transaction•Leading bank in agriculture financing amongst commercial banks with the market share of 15%

WEAKNESSES:•Lowest Internal Control and Compliance System, SBP rated “Marginal” which is alarming for the Bank.•Unsatisfactory corporate culture of the Bank.•Less number of Online Branches.•Ineffectively use of technologies i.e. Information technology•Shortage of staff- per employee customer is very high side•Technical education and training of staff is insufficient The workload in NBP is not evenly distributed

CONCLUSION:The primary objective of NBP was to purchase jute from the growers in the former East Pakistan and also to perform the commercial banking functions in the country.

The strength of this bank is that it is acting as Agent of State Bank of Pakistan, providing Agency Arrangements for different government organizations include WAPDA and PIA, Profitability and a vide coverage throughout Pakistan.

The challenge it is facing is currently the lack of implementation of rules and regulations that may lead to weak organizational culture, old organizational culture, no regular promotions practices.

As analysis shows that NBP is a most growing organization with highest return on capital, largest market share amongst all Pakistani banks and cost to income ratio is the highest in banking sector. But there is further need for improvement to overcome weaknesses and to maintain its position as an “Asian Tiger” in banking field.

THANKYOU