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Assignment 1Topic Prime Minister Youth Business LoanSubmitted By Saffa, Khadija, Rubina, Ameer shad, Baber, Farhan Roll No 20, 26, 38, 17, 103, 5Semester 7th Submitted To Sir Ihtisham KhanDepartment Management SciencesProgram MBA (3.5)Date Jan 12 2017The National Bank of Pakistan:Introduction:The?National Bank of Pakistan?(NBP) is a major Pakistani?commercial Bank with headquarters in?Karachi. Although state-owned it operates as commercial bank, while continuing 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.The bank provides both commercial and public sector banking services. It is a lead player in the debt equity market,?NBP maintains its position as Pakistan’s premier Bank with a network of over 1310 branches locally, 23 overseas branches, 9 National and International Subsidiaries and 10 Regional/Representative offices all over the world.HISTORY OF NBP:1949 National Bank of Pakistan (NBP) was established under the National Bank of Pakistan Ordinance of 1949 and was government-owned. NBP acted as an agent of the?central bank?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 as 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 as 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.1977 NBP opened an offshore brain?Cairo.1994 NBP amalgamated?Mehran Bank.1997 NBP 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%.2002 Pakistan International Bank renamed itself United National Bank Limited (UNB). The ownership structure of the UNB remained as before. The only change to the shareholding structure is that UNB 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.NBP needed to redefine its role and shed the public-sector bank image, for a modern commercial bank. It has offloaded 23.2 percent share in the stock market, and while it has not been completely privatized like the other three public sector banks, partial privatization has taken place. It is now listed on the Karachi Stock Exchange.2003 NBP opened its branch in?Kabul, and the first ATM in?Afghanistan?was installed there.2005 NBP closed its offshore branch in?Cairo.2010 NBP opened its branch in Karaganda (Kazakhstan).2011 NBP opened its representative office in Toronto (Canada).Department:The Bank has employed more than 15,000 people worldwide. The various departments include:Consumer Banking-Corporate Finance-Investment Banking-Agricultural Banking-Transactional Banking-Operations-Software Development and Automation-Financial Control-Treasury-Internal Audit-Risk Management & credit-Economic &Business Research-Training & Development-Strategic Planning-Human resources.Operations:Several initiatives have been taken, in terms of institutional restructuring, changes in the field structure, in policies and procedures, in internal control systems with special emphasis on corporate governance, adoption of Capital Adequacy Standards under Basel II framework, in the upgradation of the IT infrastructure and developing the human resources.National Bank of Pakistan has built an extensive branch network with 1250 branches in Pakistan and operates in major business canter abroad. The Bank has representative offices in Beijing, Tashkent, Chicago and Toronto. It has agency arrangements with more than 3000 correspondent banks worldwide.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.The Bank saw significant growth between 2000 and 2006. In 2006, total assets were estimated at PKR 635 billion, while deposits have grown to nearly PKR 502 billion. Pre-tax profit rose to PKR 26 billion. Earnings per share have jumped to PKR 24.01. The increase in profit was achieved through strong growth in core banking income. Interest income increased by PKR 10 billion through growth in the loan portfolio as well as increase in spreads. Advances increased by PKR 48 billion to PKR 316 billion. It ranges from providing credit to the?unbanked?market segment under NBP Karo bar, to?small and medium enterprises, to agricultural loans, to large corporate customers.It has taken various measures to facilitate overseas Pakistanis to send their remittances. In 2002 the Bank signed an agreement with?Western Union?for expanding the base for documented remittances.Subsidiaries:The NBP's subsidiaries are Taurus Securities Ltd, NBP Exchange Company Ltd, NBP Leasing Ltd, NBP Modaraba Management Company Ltd, and CJSC Bank, Almaty, Kazakhstan. The Bank's joint ventures are, United National Bank (UK), First Investment Bank and NAFA, an Asset Management Company (a joint venture with NIB Bank & Fullerton Fund Management of Singapore)International Offices:NBP also have a joint venture with UBL at U.K., with the name of Pakistan International Bank (UK)Ltd., with seven branches at main Branch, London, Manchester Branch, Glasgow Branch, Bradford Branch, Sheffield Branch, Birmingham Branch and Knightsbridge Branch (London).The National Bank of Pakistan have so many services which provided to customers and borrowers. For example, (Advance salary, PM Loan, Gold loan, SME loan, corporate loaned.).Prime Minister Youth Business Loan:Program is a revolutionary program for the socio-economic development of youth, in a bid to combat soaring unemployment in the country.?It has a broad canvas of schemes aimed at enabling youth and poor segments of population to: Get good employment, opportunities, Secure economic empowerment, acquire skills needed for gainful employment, have access to higher education and IT tools, Access to on-the-job training/internship for young graduates to improve the probability of getting a productive jobThe name of the scheme will be “PRIME MINISTER’S YOUTH BUSINESS LOANS” and it will focus on unemployed youth, especially educated youth looking for establishing or extending business enterprises.Eligibility Criteria:CNIC holder;Age 21-45;Entrepreneurial potential;Applicant may apply for under this scheme only from the designated branch mapped with his/her area of residence/business.Security Requirements:Collateral (mortgage, trenching).Guarantor Information & Requirement:Guarantor must be a government servant of BPS 15 or aboveIf guarantor is not a government servant, then that person must have net worth 1.5 times above the loan total amount applied forThat person should not be bank corrupted or applied for any loan from governmentNo father, mother, sister, brother or any blood relatives is accepted as guarantor.Focus on women:50% quota of women borrowers.Debt-equity Ratio:90:10 with tenor of to 8 years (including 1years grace period). The borrower’s contribution of equity would be either in the form of cash or immoveable property, and will be required only after approval of the loan.Permissible collaterals (business hypothecation) Pricing:8% mark-up, 6%customer, 2% fixed for government will pay the difference of the coast at KIBOR +500bps.Sectoral Distribution of Loans:For the time being, there will be no limit on the maximum number of loans for any sector. Placement of ceilings can be considered subsequently keeping in view the importance of sectors and applications received for various sectors.?Size of Loan:Up to Rs.20 lacsGeographical Distribution:Whole of Pakistan. In the case of Baluchistan, at least one branch of NBP will be designated per division.All non-designated NBP branches will guide the borrowers to the nearest designated branch along with facilitation to receive and dispatch the application to the nearest designated branch if so requested by the borrower.SBP to ensure that loans are broadly in conformity with provincial populations.Fee Form processing:Non-refundable form processing fee would be Rs.100/- at the time of submission of form. However, no fee will be charged for the form itself and a photocopy will also be admissible.Application Form:The Form would be both in English and Urdu, and required minimum essential information with simple format. The processing time will not exceed 15 days and will be so stated clearly in the application form; and?the form would be readily available both in branches and through dedicated websites of the banks.?Non - refundable form processing fee will be Rest. 100 (One Hundred)?Monitoring SBP will publish consolidated information about the loans extended under?the scheme for information of the public on quarterly bases on its website; An effective Complaints Centre to process and resolve complaints will be?set up; E-government directorate of Ministry of IT will provide support.Training:SBP will arrange appropriate training for private banks to implement the scheme. NBP and FWBL will provide appropriate training to their own staff. NBP will also assist in training of FWBL and SMEDA StaffSectors and Products:All sectors. Standardized schemes/projects/ undertakings will be designed by?SMEDA, projects designed by private sector service providers or by individuals themselves. All sectors. Standardized schemes /projects/undertakings will be designed by SMEDA, projects designed by private sector service providers or individuals themselves will also be admissible.?Role of SMEDA:?a) The 50 feasibilities prepared and uploaded by SMEDA will be extensively publicized and their access to public made easier through multiple linkages with other relevant websites.?b) SMEDA will work closely with Punjab Information Technology Board (PITB) to ensure that the schemes are accessible to those who participate in PITB survey.?Following documents are required along with loan application form.1 recent passport size photograph of the applicant.Photocopy of applicants CNICPhotocopy of Guarantor’s CNICBasic borrower’s fact sheet (part A of form)Guarantor’s information (part B of form)Copy of SMEDA pre-feasibility study or applicant’s own prepared business plan / feasibility / project proposal 16-May-2016 Ballot1 Ballot2 Ballot3 Ballot4 totalApplications Received - Till Feb 24, 2016?62,964Applications Rejected?40,516Applications Approved5,3505,0925,34810,44215,790Offers Accepted5,0013,4523,8828,45312,335Presdisbursement Formalities Pending1,0367582,2981,7944,092Presdisbursement Formalities Completed3,9652,6941,5846,6598,243No. of Loans Disbursed3,8342,6201,4626,4547,916Disbursement in Process13174122205327AMOUNT DISBURSED?????Amount of Loans Disbursed (Billion Rupees)3.5032.431.5845.9337.517Disbursement in Process (Billion Rupees)0.0820.0460.1390.1280.267New Applications Marketed (Since February 24, 2016) and in process?8,174 ................
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