10 objectives of national bank of Pakistan

National Bank of Pakistan is the leading commercial bank in our country. After the independence the growth of commercial banks was very poor. The necessity of a lage bank was urgently felt at that time for the development of banking system in the country. As a result, the Government and State Bank of Pakistan took the initiative to establish the National Bank of Pakistan.

Objectives of national bank of Pakistan


This bank was set up with authorized capital of Rs. 6 crors (6 lacs shares of Rs. 100 e*ch) and a paid up capital of Rs. 3 crors. Prior to the nationalization, the Government had 25% shares in the ownership of the bank 75% shares wereaeld by others. Upto 31st December 2016 the paid up capital of the bank was 212,751 million.


  • The central board of directors and local board of directors manage the affair of the bank before nationalization.
  • After nationalization, the boards were replaced by the executive board consisting of five members- including president (chief executive) of the bank. This board was responsible for general direction, administration and supervision of the affairs and
  • business of the bank
  • Now (30-06-2017) a board of directors consisting of eight members including one chairman (President) is responsible for the management ofbank.


Its head office is in Karachi and there are 1,468 online branches of I he bank inside and outside the country (by 31-12-2016).


  • National Bank was formed on November 8, 1949 under a special ordinance.
  • NBP started its banking functions on November 21,1949.
  • NBP has been working as an agent ofSBP since 1952.


  1. To tackle the problem of smuggling of cotton & jute to India.
  2. To grant loans to increase the production of cotton and jute.
  3. To guide traders about the production and export of cotton &jute.
  4. To give assurance to the farmers & cultivators of cotton and jute

for the purchase.

  1. To work as an agent of SBP where it has no branch.
  2. To work as a commercial bank.


National bank performs all the functions of commercial banks.

I hese functions are explained below.


National Bank receives deposits from the public and pay interest

I Afferent kinds of deposits are given below:- f

  • Fixed Deposit Account:

In this account, money is deposited for a fixed period of time. High rale of interest is paid on this deposit.

  • Current Account:

In this account money can be deposited and withdrawn from bank at any time during banking hours. Interest in not paid on this account.

  • Saving Account:

Persons with little savings, deposit their money in the saving account. Saving deposits can be withdrawn on demand upto a certain limit. Banks also pay interest on these accounts.

  • Foreign Currency Account:

This account is opened with foreign currency which may be current, saving and fixed.


The second primary function of the National Bank is to lend money. Bank borrows money in order to re-lend.


  • Demand Loans.
  • Short Term Loans.
  • Medium Term Loans.
  • Long Term Loans.
  • Project Loans.


  • By Overdraft.
  • Cash Credit.
  • By Discounting of B/E.
  • By Mortgage.
  • By Opening Loan A/C.



  1. Collection & Payment of Cheques:

National bank collects and makes payment of cheques on the behalf of its customers.

  1. Collection of Dividends:

National Bank collects dividend and interest on shares on the behalf of its customer. For this purpose, customer informs the issuer of security to pay interest or dividend in his account of bank.

  • Purchase & Sale of Security:

If the customer directs the bank to purchase and sale sc<uiiiic .on his behalf, bank will do this by charging nominal commission.

  • Agent:

National Bank also acts as an agent or representative of cir.tomci at home and abroad.

  • Execution of Standing Instructions:

National Bank also executes instructions of its customcis by charging nominal charges. For instance, if a person has to pay Rs. 600 Io insurance company and Rs. 200 as rent every month then the bank will make monthly payments on the written order of customer.

  • Transfer of Fund:

National Bank also performs the function of transferring fund from one place to another by charging nominal commission.

  • Trustee:

National Bank also acts as a trustee on the behalf of customer.


  • Credit Instruments:

National Bank issues various credit instruments which are of considerable benefit to the business community; (e.g.) cheques, draft and L.C. etc.

  • Foreign Exchange:

National Bank deals in foreign exchange and facilitates both foreign trade and foreign travel.

  • Precious Articles:

National Bank accepts valuables like ornaments, documents, securities, insurance policy, etc., from its customers for safe custody. Rates for different lockers are given below (Small Rs. 1000, Medium Rs. 1500, Large Rs. 2500, E-large Rs. 4000).

  • Underwriting:

National Bank underwrites shares, bonds, etc., issued by Government, public bodies or trading corporations.

  • Referee:

National Bank acts as referee and provides information relating to the credit worthiness of its customers.

  • Trade Information:

National Bank collects useful trade information for its customers.

  • Acceptance of B/E:

National Bank accepts bills of exchange on the behalf of customers to meet their financial needs.

  • Easy Medium of Exchange:

Issued cheques of banks are considered as an easy medium of exchange, because their presence minimizes the use of cash in business transactions.

  • 24 Hours Cash Service:

Now a day, National Bank is using computerized counters to provide twenty-four hours cash service through automated teller machines (ATM) to its valuable customers.

  • Special Services:

In particular circumstances, National bank also provides following services to its customers and govt.

  • Receipt of Zakat and Ushr.
  • Receipt of Haj Applications.
  • Issuance of Qarz-e-Hasna.
  • Receipt and payment of bills.
  • Fee receipt of educational institutions.
  • Receipt of donation.


  1. The bank has introduced many schemes to develop the habit of saving among people.
  2. It introduces various refresher courses to improve the efficiency of banking staff.
  3. It is working as the trustee of National Investment Trust (NIT).
  4. It issues Qarz-e-Hasna to get professional education.
  5. It grants loans and advances for the construction of houses.
  6. Grants loans for the industrial & agricultural development.
  7. It is granting special loans to increase productivity since 1972.
  8. Currently NBP is included in top ten worlds banks and it is rated 1st in Asia on profit basis.
  9. It was globally recognized as “Bank of the Year” for Pakistan in 2001, 2002, 2004 and 2015.

During 2015-2016, the profit of the bank before tax was Rs. 37.6 billions.

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