National Bank of Pakistan

History:

National Bank of Pakistan was established on November 8, 1949 through passing of a special ordinance in the National Assembly. The need for the establishment came due to the reason when after that time newly born country was facing economic crises. To get rid the intervention form the reserve bank of India, a self-owned and operated Central Bank by the name of State Bank of  Pakistan was formed in July 1948 to carry on the responsibilities of issuing the currency and most importantly controlling the flow of money inside the country. State Bank of Pakistan after its formation demanded from the Indian Reserve bank the assets against the Indian currency retired from Pakistan territory. Government of India refused to hand over the assets worth about five hundred million rupees. This dispute is still unsettled and these assets are still not delivered to Pakistan. In 1949 National Bank of Pakistan (NBP) was established under the National Bank of Pakistan Ord ina nce 1949   and was  100 %  gove rnme n t own ed .  NBP ac t ed   a s   an   age n t   o f   t he Cen t r a l  Ban k  wherever the State Bank did not have its own Branch. It also undertook Government Treasury operations. Its first branches were in jute growing areas in East Pakistan. Offices in Karachi and Lahore followed.1950 NBP established a branch in Jeddah, Saudi Arabia.1955 By this time NBP had branches in London and Calcutta.1957 NBP established a branch in Baghdad, Iraq.1962 NBP established a branch in Dar-es-Salaam, Tanganyika.1964 The Iraqi government nationalized NBP's Baghdad branch.1965 The Indian government seized the Calcutta branch on the outbreak of hostilities between India and Pakistan.1967 The Tanzanian government nationalized the Dar-es-Salaam branch.1971 NBP acquired Bank of China's two branches, one in Karachi and one at Chittagong. At separation of East Pakistan NBP lost its branches there. NBP merged with Eastern Mercantile Bank and with Eastern Bank Corporation.1974 the government of Pakistan nationalized NBP. As part of the concomitant consolidation of the banking sector, NBP acquired Bank of Bahawalpur (est. 1947).1977 NBP opened an offshore brain Cairo.1994 NBP amalgamated Mehran Bank (est. 1991).1997 NBP's branch in Ashgabat, Turkmenistan commenced operations.2000 NBP opened a representative office in Almaty, Kazakhstan.2001 State Bank of Pakistan and Bank of England agree to allow only 2 Pakistani banks to operate in the UK. NBP and United Bank agreed to merge their operations to form Pakistan International Bank, of which NBP would own 45% and United Bank 55%. Also that year, NBP closed its branch in New York. 2002 Pakistan International Bank renamed itself United National Bank Limited (UNB). Theown er s h ip   s t ruc tu r e   o f   t he  UN B   rema in ed   a s   be fo re .  The  on ly   cha nge to   t he   sha reh o ld ing structure is that UBL had recently been privatized in Pakistan and was now owned 49% by the Government of Pakistan and 51% by a joint foreign consortium of Abu Dhabi.2003 NBP received permission to open a branch in Afghanistan. 2005 NBP closed its offshore branch in Cairo.

Registered offices:

The head office of NBP is situated in Karachi. There, the high ups are in function. The president of the bank is also there. Including that, there are twenty three regions in Pakistan; each region has its own regional head quarter.

Fig # 2: National Bank of Pakistan branch in   Washington, D.C.

Internationally, NBP also has branches /offices in the following countries and states:

USA UK Canada Germany France Bahrain Egypt Bangladesh Hong Kong Japan South Korea The People's Republic of China, Afghanistan Turkmenistan Kyrgyz Republic Kazakhstan Uzbekistan Azerbaijan

Saudi Arabia.

Fig # 1: Map depicting worldwide operations of National Bank of Pakistan. Highlighted countries have branches, subsidiaries and/or representative offices of the bank. Pakistan

is highlighted in dark green for reference.

Organizational Chart:

In the national bank, the whole organization is controlled by the president. That president is alloted by the BOD of NBP.

Fig # 2: Organizational chart – From branch to head office

Under the president, different group chiefs are alloted to organize there related fields. There are seven major fields in the bank. These are described as following:

i. Business groupii. Credit manegment group

iii. Operations groupiv. Human Resourse Manegment (HRM) groupv. Audit and inspection group

vi. Compliance groupvii. Overseas banking group

SWOT Analysis:

Strenghts:

I. ATM finder: There is also the strength that they are the founders of ATM. They now provide this facilityto the customers.

II. Government’s bank: In commercial banking system, NBP is the only government bank. They make their policies according to the government’s rules and regulations. It enjoys its position in the market of banking system in Pakistan. Government of Pakistan also facilitates the NBP.

III. Customer satisfaction: Because of government’s bank, it’s enjoying the customer’s satisfactoin. Customers feel secure their money in NBP.

IV. Online banking: There is also strenght of NBP thay 130 branches are online. It helps the speedy services giving to the customres.

Weaknesses:

I. Lack of comunication between employees: There is a lack of communication among the employees of the bank. They have not very much understanding with each other. This can cause a huge damage to the bank.

II. Punishment is not very strong for the employees: Some employees are not very professional in their fields but the top management doesn’t take proper action against such employees.

III. Public dealing isn’t very effective: Public respect is not that much effective in NBP. Employees aren’t taking care of the customers, especially in pension and bills dept.

IV.

Major Competetors:

National bank, as we know, is one and only bank, which works under the government organizations. So, all other banks compete with NBP. As all other banks are private.

Fig # 4: Major competitors of NBP

Not only that, national bank is under the sight of all other govt. organizations, private banks, and The State bank of Pakistan. Internationally, the bank is well known due to its services and customer satisfaction.

Differentiation Points:

Following are the facts and figures, which describe the difference between all other banks and national bank.

Fig # 5: Major difference between Govt. banks

and Private banks

i. The ownership of an organization matters, the ownership of the national bank goes to the current government of the country, whereas the ownership of other banks are private.

ii. The facilities of a government organization are more than that of the private sector.iii. National bank is the only bank, which provides the pensions to the pensioners.

iv. The bank is the founder of ATM service. Not only that, it has a vast connection among its branches, while the other banks aren’t at this stage.

v. The branches of the bank are more than 1400 in Pakistan.

Conclusion: