Muslim Commercial Bank Ltd Pakistan (GT Road Gujrat)

Prepared byAnam Sajjad

ID No:12109009Email: 12109009@gmail.com

Department of Business Administration(GBS) MSc Accounting and FinanceGIFT University Gujranwala Pakistan

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Submitted toSir Naveed Mughal

Department of Business AdministrationGIFT University Gujranwala Pakistan

August 24, 2014

PAKISTAN

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TABLE OF CONTENT

SERIAL NO

TOPIC PAGE NO

TITLE PAGE 1,2 ACKNOWEDGEMENT 31 INTRODUCTION OF ORGANIZATION 41.1 Privatization Phase Development Phase 4,51.2 Nationalization Phase 51.3 Privatization Phase 61.4 Mission Statement 61.5 Core Value 62 OVERVEIW OF THE ORGANIZATION 73 NATURE OF ORGANIZATION 134 BUSINESS VOLUME 155 NO OF EMPLOYESS 166 PRODUCT LINE 186.1 MCB ATM card6.2 Mobile Banking6.3 Call Center6.4 Bill Payment6.5 Maal-a-Maal Scheme6.6 Profit and Loss acoount6.7 Saving 365 account6.8 Capital growth Certificate scheme6.9 Fund management6.10 Khuskhali bachat6.11 Khanum Bachat Scheme6.12 `Term deposite6.13 Call Deposits6.14 Loans6.15 MCB piyara Ghar6.16 MCB car 4 u6.17 RTC6.18 Consultancy Service6. 19 self Support6.20 Night Banking Scheme6.21 Bill Payment6.22 Fax Press6.23 MCB Lockers7 ORGANIZATIONAL STRUCTURE 318 STRUCTURE OF MCB 32

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9 BUSINESS STRATEGY 3410 COMPETITORS 3511 HRM POLICIES 3612 FUTURE PROSPECT 3713 BRANCH INFORMATION 3814 WEAKNESS OF BRANCHES 3915 FUNCTIONS AND OPERATIONS 4016 DUTIES AS INTERNEE 5417 CRITICAL ANALYSIS 6218 PROBLEM ENCOUNTER 6319 IMPACT OF INTERNSHIP ON CREER 6420 CONCLUSION AND RECOMMENDATION 68

21 ORIGIN OF REPORT 72

21.1 Sources of data 21.2 Objective of report21.3 Methodology21.4 Limitation of study

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ACKNOWEDGEMENT

At the very beginning, I would like to express my deepest gratitude to the Almighty Allah for

giving me the ability and the strength to finish the task successfully within the scheduled time.

This report “Corporate internship at Muslim Commercial Bank Limited, Pakistan ” has

been prepared to fulfill the requirement of MSc Accounting and finance degree. I am very much

fortunate that I have received sincere guidance, supervision and co-operation from various

persons.

I would like to express my heartiest gratitude to my supervisor, Mr. Naveed Mughal , Professor

at GIFT University , Department of Business Administration, for his continuous guidance,

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encouragement, and patience, and for giving me the opportunity to do this work. His valuable

suggestions and strict guidance made it possible to prepare a well-organized report.

I am also indebted to Mr. BM Adnan , Mr. OM Arsalan, Mr.Atif Khan, Miss Shakeela and

Mr.Qasir and all staff of MCB( Limited) who kindly spared for me much of their precious time

in giving me support and information. During the internship I was treated so cordially by the

MCB( Limited) officials and staffs that I feel the office like my second home.

Finally, my deepest gratitude and love to my parents for their support, encouragement, and

endless love.

Anam Sajjad

12109009

1-Introduction of the organization

MCB Bank is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion

and total assets of around Rs.300 billion. Incorporated in 1947, MCB soon earned the reputation

of a solid and conventional financial institution managed by expatriate executives. In 1974, MCB

was nationalized along with all other private sector banks. This led to deterioration in the quality

of the Bank’s loan portfolio and service quality. Eventually, MCB was privatized in 1991. Since

privatization, MCB's growth has been phenomenal. Today, MCB in one of the largest foreign

banks in Sri Lanka, the first bank in Pakistan to launch Global Depository Receipts (GDR) in

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2006, has strategic foreign partnership with May bank of Malaysia which holds 20% shares in

MCB through its wholly owned subsidiary May bank International Trust (Labuan) Berhad since

2008, has international indirect regional presence in Dubai (UAE), Bahrain, Azerbaijan, Hong

Kong and Sri Lanka and serving through a domestic network of over 1,150 branches and over

690 ATMs across Pakistan with a customer base of 4.96 million (approximately) During the last

fifteen years, the Bank has concentrated on growth through improving service quality,

investment in technology and people, utilizing its extensive branch network, developing a large

and stable deposit base and managing its non-performing loans via improved risk management

processes.

1.1 Privatization Phase Development Phase

MCB Bank Limited was incorporated by the Adamjee Group on July 9, 1947, under the Indian

Companies Act, VII of 1913 as a limited company. The bank was established with a view to

provide banking facilities to the business community of the South Asia. After the partition of the

Indo-Pak subcontinent, the bank moved to Dhaka (then the capital of former East Pakistan) from

where it commenced business in August 1948. In 1956, the bank transferred its registered office

to Karachi, Where the head office is presently located. Thus, the bank inherits a 64 years legacy

of trust of its customers and the citizens of Pakistan. MCB Bank is not an overnight success

story. It started with a share capital of Rs 30 million which is divided into 3 million ordinary

shares of Rs 10 each.

1.2 Nationalization Phase

The 1960s decade is stated as the golden era in Pakistan’s economic and financial development.

The banking sector also registered noticeable growth during that period and lent a strong helping

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hand to the government to achieve rapid economic growth of the country. But in early 1970s this

scenario changed altogether.

The separation of East Pakistan (now Bangladesh) and instruction of the government led by

Zulfiqar Ali Bhutto were the most significant events of early 70s having far reaching effects on

the banking system. In the wake of rapidly changing conditions of the country, the government

decided to nationalize all the commercial banks so that the nation as a whole can benefit from a

better use of resources. Consequently, the Muslim Commercial Bank was nationalized under the

Banks (Nationalization) Act, 1974 promulgated on January 1, 1974. In the wake of rapidly

changing conditions of the country, the government decided to nationalize all the commercial

banks so that the nation as a whole can benefit from a better use of resources. Consequently, the

MCB Bank was nationalized under the Banks (Nationalization) Act, 1974 promulgated on

January 1, 1974. In the banking sector, the then government decided to retain only five major

banks by merging all the smaller banks with the large ones. As a result of this policy, the Premier

Bank was merged into Muslim Commercial Bank in 1974.

1.3 Privatization Phase

This was the first bank to be privatized in 1991 and the bank was purchased by a consortium of

Pakistani corporate groups led by Nishat Group. The banks after nationalization came under

political and bureaucratic control and deviated from normal banking practices. Some of their

senior executives were tempted to take care of a culture of obliging big businessmen, feudal and

political influential. They sacrificed their personal integrity and interest of banking sector for

gaining promotion and accumulating personal wealth. That is how banking sector started losing

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its upright and professional institutional image from mid-80s and its downward slide started

which touched new low during 1990s.

1.4 Mission Statement

“We are a team of committed professionals, providing innovative and efficient financial

solutions to create and nurture long-term relationships with our customers. In doing so, we

ensure that our shareholders can invest in us with confidence.”

1.5 Core Values

These are the standards and principles which determine our behavior and how we interact with

our customers and each other:

a-Integrity

We are the trustees of public funds and serve our community with integrity. We believe in being

the best at always doing the right thing. We deliver on our responsibilities and commitments to

our customers as well as our colleagues.

b- Respect

We respect our customer’s values, beliefs, culture and history. We value the equality of gender

and diversity of experience and education that our employees bring with them. We create an

environment where each individual is enabled to succeed.

c-Excellence

We take personal responsibility for our role as leaders in the pursuit of excellence. We are a

performance driven, result oriented organization where merit is the only criterion for reward.

d-Customer Centricity

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Our customers are at the heart of everything we do. We thrive on the challenge of understanding

their needs and aspirations, both realized and unrealized. We make every effort to exceed

customer expectations through superior services and solutions.

e- Innovation

We encourage and reward people who challenge the status quo and think beyond the boundaries

of the conventional. Our teams work together for the smooth and efficient implementation of

ideas and initiatives.

2-OVERVIEW OF THE ORGANIZATION

2.1History of MCB

MCB Bank Limited formerly known as Muslim Commercial Bank Limited was incorporated

by the Adamjee Group on July 9, 1947, under the Indian Companies Act, VII of 1913 as a

limited company. The bank was established with a view to provide banking facilities to the

business community of the South Asia. The bank was nationalized in 1974 during the

government of Zulfikar Ali Bhutto. This was the first bank to be privatized in 1991 and the bank

was purchased by a consortium of Pakistani corporate groups led by Nishat Group. As of June

2008, the Nishat Group owns a majority stake in the bank. The president of the bank is Mr. Atif

Bajwa (previously with Citi Bank).

Founded in 1948, Nishat Group is one of the leading and most diversified business groups in

Pakistan. The group has strong presence in the most important business sectors of the country

such as banking, textile, cement and insurance.

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Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played

instrumental role in its success. In recognition of Mr. Mansha’s contribution, the Government of

Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most prestigious civil awards of the

country.

a-Profitability

MCB is Pakistan’s fourth largest bank by assets having an asset base of US$ 5.9 billion, and the

largest by market capitalization having a market capitalization of US$ 1.8 billion. The Bank has

a customer base of approximately 4 million and a nationwide distribution network of 1,081

branches, including 8 Islamic banking branches, and over 300 ATMs, in a market with a

population of over160 million.

In 2009, MCB reported a profit after tax of PKR 15.5 billion (appx.US$183 million) and

generated a return on average equity of 27.35% and a return on assets of 3.25%. The Bank’s

asset quality is strong with a gross NPL ratio of 8.62%.

During the last fifteen years, the Bank has concentrated on growth through improving service

quality, investment in technology and people, utilizing its extensive branch network, developing

a large and stable deposit base and managing its non-performing loans via improved risk

management processes.

MCB has 1081 branches (as of 31st December, 2009) including local branches, and business

establishments in SriLanka and Bahrain including newly established Rep.Office in Dubai, UAE.

The Bank has also formed a private company in Hong Kong (fully owned subsidiary of MCB) in

partnership with Standard Chartered Bank, handling trade transactions of select countries in the

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Asia-Pacific region. MCB has been successful in turning around its operations since its

privatization and is moving forward to set high performance standards with the continuous

support of its customers and leadership in banking technology. To further strengthen its financial

services base, MCB has also incorporated an Asset Management Company in the year 2005

known as MCB Asset Management Company. MCB has also incorporated a leasing company in

Azerbaijan in 2009.

Fully Owned Subsidiaries of MCB are: • Muslim Commercial Financial Services (Private)

Limited • MNET Services (Private) Limited • MCB Trade Services Limited • MCB Asset

Management Company Limited • MCB leasing (Closed Joint Stock Company) The Bank has

achieved this success, especially in the last few years, through consolidating corporate banking

operations, strengthening retail banking, launching diversified and innovative products, giving

more focus to consumer financing and investing in IT.

b-Business Strategy

The business strategy of MCB is to provide financial solutions to major segments of its customer

base, namely retail and corporate. Separate business groups have been set up to ensure a more

focused approach in satisfying the diversified customer segments. The Bank has also established

an Islamic Banking unit to offer Shariah compliant products and services, with dedicated Islamic

banking branches in six cities. The plan for future is to further realize the capacity of Islamic

Financial Systems and to bring Shariah compliant network parallel to current retail network of

traditional banking.

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Wholesale Banking Group caters to the top tier local and multinational companies. As a result of

organizational restructuring, including reinvigorating Investment Banking and beefing up

relationship teams, the Group is in line with the industry’s best practices. MCB has closed some

large deals and is currently working on a number of large transactions including advisory

business. It is a strong competitor in cash management and structured financing activities.

Retail Banking Group focuses on trading and middle market segment primarily for building risk

assets and trade related business. MCB caters to their needs of financing foreign and local trade,

funds transfer and other seasonal requirements. The Bank has renovated a large number of

branches and staff has been trained for meeting the requirements of SMEs and other retail

customers. A separate SME Financing Division has been set up to provide customized financing

solutions to this very important segment of the economy. The Group also focuses on the

development of innovative consumer asset products for satisfying the personal needs of the

customers. MCB has a significant share of consumer financing business with its House and Car

Financing schemes. The recently launched running financing facility against the mortgage of

property is also expected to go a long way in increasing the quality consumer credit portfolio of

the bank. With the experience gained in the past few years, the Bank is fast progressing towards

becoming the leading bank in consumer business.

c-Recognition at Home & Abroad

MCB at home is recognized as a successful model of privatization. It has completed almost

nineteen successful years of privatization in 2010 and its growth and stability is a case study for

prospective government institutions waiting to be privatized.

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The consistency in growth and the resilience MCB has shown during the past few years,

especially at uncertain economic times is by all means outstanding. The acknowledgements do

not end at home. MCB Bank Limited received Euromoney Award for Excellence seven times in

the last eight years, which include “Best Bank in Asia” in 2008; four times “The Best Bank in

Pakistan” award and one time “The Best Domestic Bank” award besides being declared the “The

Best Domestic Bank in Pakistan” by Asia Money for the last two years. MCB Bank also received

the “The Strongest Bank 2010” award by The Asian Banker for being Pakistan’s best-performing

financial institution in 2010. President and CEO MCB Bank, Atif Bajwa, has been awarded “The

Qatar Financial Centre Asian Banker Leadership Achievement Award 2010”.

d-MCB & Maybank

In 2005, the management of the bank abbreviated its name from Muslim Commercial Bank

Limited to MCB Bank Limited to explore international markets; they were facing resistance due

to the word Muslim especially from Western Countries to avail license. In 2008 the head office

of MCB was shifted from Karachi to Lahore in a newly constructed building, namely MCB

House located at Sharea Ghous-ul-Azam, commonly known as Jail Road.

The MCB Tower in Karachi serves as the MCB's headquarters, and is also the tallest building in

Pakistan. MCB, advised by Merrill Lynch, became the fourth Pakistani Company (the other three

being Hubco, PTCL and Chakwal cement - they all have been delisted) to list on the London

Stock Exchange when it raised US$150 million global depositary receipts.

In May 2008 Malaysian bank, Maybank and MCB signed an agreement, whereby Maybank

acquired 20% of the ordinary shares in MCB from Nishat Group. The acquisition is in-line with

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Maybank’s strategy, as Malaysia’s financial services leader in the region, to build its presence in

key growth markets across the region. It also paves the way for MCB, one of Pakistan’s premier

financial services groups, to engage Maybank as its exclusive foreign commercial bank strategic

partner.

Maybank initially acquired from Nishat Group 94,241,527 ordinary shares in MCB, representing

a 15% stake in the Bank, for a cash price of PKR470 per share. The total consideration paid was

approximately US$686 million. The purchase price represented an 11.4% premium to MCB’s

closing share price of PKR 422 on May 2, 2008, and a premium of 12.9% to the average closing

share price for MCB over the 30 trading days immediately preceding the date of this

announcement.

Based on MCB’s December 31, 2007 audited book value, the purchase price represents an

implied price to book value multiple of 5.13x, a price to 2007 earnings multiple of 18.0x and a

price to 2008 earnings multiple of 15.2x. In July 2008 Maybank exercised its right to increase its

stake to 20%.

The stake in MCB allows Maybank the right to appoint two Directors to represent its interest on

the Board of MCB. One of these Directors was to be appointed immediately and the second

Director will be appointed upon completion of the term of the existing Board, scheduled to be on

March 27, 2009.

As part of the transaction, Maybank and MCB are also expected to enter into a business

cooperation arrangement which will include, among others, Islamic banking, retail banking,

credit cards, asset management and SME banking. Leveraging Maybank’s leadership and

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experience in these segments coupled with MCB’s brand and broad distribution network,

Maybank and MCB believe that significant revenue synergies can be attained. Both Maybank

and MCB are also expected to benefit from increased business ties and trade flows between

Pakistan and Malaysia

3-NATURE OF THE ORGANIZATION

MCB where I completed my internship comes in banking sector. Bank is an institution

which deals in money and credit. Banks accepts deposits from the common man and

grants loans and advances to those who are in requirement of those finances for various

purposes. Banking and finance activities are thought as the life blood of the national

economy.

Banks and Scope of Banking

“A bank is and intermediate party who takes the funds from those who have it and

give it to those who need it and earn its own profit.”

Types of Banks

In a broad view bank has got two basic categories.

Commercial Bank

Central Bank

Commercial Bank

Usually the term bank is used for commercial banks. But, the word bank can also be used to refer

to savings institutions, savings and loan associations, and building and loan associations. A

commercial bank has the authority to receive demand deposits (payable on order) and time

deposits (payable on a specific date), lend money, provide services for fiduciary funds, issue

letters of credit, and accept and pay drafts. These banks not only serves their depositors by

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providing various services but also offers different types of loans such as installment loans,

commercial long-term loans, and credit cards.

Central Bank

The function of central bank is to manage all the commercial banks in the country and it struggle

for the economic development. The issuance of notes is one major responsibility of central bank.

Activities of central bank are not aimed at earning profit.

The Importance of Banking

Banking sector has now become an essential part of our economic system as modern trade and

commerce would almost be impossible without the availability of suitable banking services.

Banking promotes saving habits among people. All manner of people, from the ordinary laborers

and workers to the rich land owners and businessmen, can keep their money safely in banks.

Banking promotes investment activities. Banks easily invest the money they receive from people

in industry, agriculture and trade. A bank has two options for investment, first is to invest it

directly or advances loans to other investors.

Foreign trade is mostly carried on through banks. Whether we export or import, it is bank that

transfer’s money from one country to another. Bills of exchange and letters of credit are the

regular ways that the banks use to transfer money.

Although banks create no new wealth but they borrow, exchange and consume wealth efficiently

and safely, in this way playing a very useful role in the utilization of the resources of the country.

The basic role of the banks is to encourage the habit of savings among the people and to mobilize

these savings for the investment purpose. If there are no banks, then there would be

concentration of wealth in few hands and the great portion of capital of the country would remain

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idle. In the fewer developing countries rate of saving is very low and due to this, rate of

investment and rate of economic growth remains very much low.

4-Business Volume

MCB Bank Ltd.

Type Public

Traded as KSE: MCB, LSE, ISE

Industry Banking Capital Markets

Founded 1947

Headquarters Registered Office: Islamabad, Principal Office: Karachi Pakistan

Key people Mian Mohammad Mansha(Chairman)

Products Loans, credit cards, savings, consumer

banking etc.

Revenue PKR 35.782 Billion (2009)

Net income PKR 26.753 Billion (2009)

Total assets USD 6.02 Billion

Website www.mcb.com.pk

5-NO OF EMPLOYEES

ORGANIZATIONAL HERIARCHY

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President

Vice President

Executive Vice President

Senior vice president

Vice president

Assistant vice president

Officers grade 1,2,3

Assistants

Cashier

BOARD OF DIRECTORS

Chairman Mian Muhammad Mansha

Vice-Chairman S.M.Munir

President & Chief Executive Imran Maqbool

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Directors

1 Tariq Rafi

2 Shahzad Saleem

3 Sarmad Amin

4 Mian Raza Mansha

5 Aftab Ahmad Khan

6 Mian Umer Mansha

7 Dato' Seri Ismail Shahudin

8 Ahmad Alman Aslam

9 Muhammad Ali Zeb

10 Mohd Suhail Amar Suresh Bin Abdullah

Chief Financial Officer Salman Zafar Siddiqi

LEGAL ADVISORS Syed Mudassar Hussain Naqvi (Group Head Legal Affairs)

6-PRODUCT LINE

A group of related products manufactured by a single company. For example, a cosmetic

company's makeup product line might include foundation, concealer, powder, blush, eyeliner,

eyeshadow, mascara and lipstick products that are all closely related. The same company might

also offer more than one product line. The cosmetic company might have a special product line

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geared toward teenagers and another line geared toward women older than 60, in addition to its

regular product line, that can be used by women of any age.

PRODUCTS AND SERVICES

Online services

Accounts

Loans

Cards

Traveler Cheque and many more

Online Services

6.1MCB ATM Card

MCB ATM Smart Card is accepted at over 4,000 ATMs nationwide. MCB ATM Smart Card

enables you to access fast cash, inquire account balance, transfer funds and pay utility

and mobile bills/mobile top-ups from any of over 450 MCB ATMs in the country. MCB

offers the following two types of ATM cards

MCB ATM Regular Card

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MCB ATM Classic Card allows withdrawal of up to Rs.15, 000 per day and a maximum of

3 withdrawals per day per card.

- MCB ATM Gold Card

The MCB ATM Gold Card allows withdrawal up to Rs. 25,000 per day and a maximum of

6 withdrawals per day per card. The cardholder has to make at least two transactions to

withdraw the full amount of Rs. 25,000.

6.2-Mobile Banking

At the forehead technological excellence, MCB proudly introduces MCB mobile banking.

This service is available to all MCB ATM cardholders, 24 hours- 365 days.

6.3-Call Centers

The state of the art MCB call center is the right choice to keep you in step with your ever

hectic schedule by providing you services relating to the account and the smart card at

any point in time.

The state of the art MCB call center is the right choice to keep you in step with your ever

hectic schedule by providing you services relating to the account and the smart card at any point

in time.

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6.4-Bill Payments

MCB easy bill pay offers unmatched convenience to pay your utility and mobile phone

bills or re-charge your prepaid mobile phone accounts anywhere, anytime with security

and peace of mind.

MCB is the only bank that offers you 3 convenient options of making bill payments to

PTCL, SSGC, SNGPL, KESC, Mobilink, Supernet, IESCO, HESCO,and Ufone.

Accounts

MCB offers following types of accounts to its customers:

SAVING ACCOUNT

Saving accounts are opened on proper introduction with sums of credit balance within certain

limit for individual (single, joint) institutions, companies, educational institutions etc. MCB has

introduced various schemes under saving a/c are following:

Mala Maal Scheme

PLS Account

Saving 365 Account

Capital growth certificate scheme

Fund Management Scheme

Khanm Bachat Scheme

Khushali Bachat Account

Term/ Fixed Deposits

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6.5-MAAL-A-MAAL SCHEME

This scheme is recently launched by the MCB after severe financial crisis of year 1998 created as

result of atomic bomb explosion, to mobilize the deposits. It is the most profitable scheme of the

bank and MCB has got Rs. 20 billion deposits through this scheme and the certificate is for Rs.

25000/-

Procedure

The procedure of Maal-a-Maal certificate is very simple. The applicant has to fill the slip of

certificate where he have to write Branch code, Applicant’s name, ID Card Number, Address,

Phone #, Date and tenure etc. For different tenure different profit percentages are declared as

show below:

Tenure (Months) Rate of Return (%)

  Two          06

  Four          07

  Eight          08

 Twelve          10

These certificates are automatically renewable after maturity. Copy of ID card is attached with

certificate. Profit is calculated at the time of drawing. At register, the officer writes reference or

serial #, name of applicant, certificate #, date of issue and date of maturity. At Maal-a-Maal

certificate, the officer write date of issue, maturity date, reference #, and name of the applicant.

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6.6-PROFIT & LOSS SHARING (PLS) ACCOUNT

This account was started in 1980s after the issuing of banking ordinance in 1980 by Zia

Government to develop Islamic banking in Pakistan. In this case customer would be responsible

for bearing profit as well as loss.  The bank would be within its rights to make investment of

credit balances in the PLS saving accounts in any manner at its sole discretion and to make use

of the fund to the best of its judgment in the banking business under the PLS system. For

withdrawal of larger amount, 7 days notice in writing is required to be given:

Minimum balance is Rs.500/=

Below minimum balance charges will be debited

Not more than eight withdrawals in a year allowed

More than Rs.15000/= are not allowed to draw

Seven day notice is required for withdrawal

Profit calculated on monthly basis

Profit paid on annually basis

Profit paid on lowest balance at the end

10% Withholding Tax on minimum balance

Zakat deducted on  @ 2.5%

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6.7-SAVING 365 ACCOUNTS

This account is newly developed of MCB and it provides flexibility of saving account to

business people.  Profit on deposits will be payable on daily product basis on balance of RS.

500,000/- and above.  However, if balance in the account falls below RS. 500,000/- on any day,

the product will be ignored.  There will be no restriction on withdrawal from the account.  Zakat

and withholding Tax is also applicable on the account opened under this scheme.

Minimum balance is Rs.500,000/=

Below minimum balance, profit calculation ignored

Profit calculated on daily basis

Profit paid on annually basis

10% Withholding Tax on minimum balance

Zakat deducted on  @ 2.5%

6.8-CAPITAL GROWTH CERTIFICATE SCHEME

Long term deposit

Profit rate as that of PLS Saving Account

Minimum amount of deposit is Rs. 10,000/=

Amount deposited  double in of 5 years

No maximum limit of Deposits

10% Withholding Tax on minimum balance

Zakat deducted on  @ 2.5%

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6.9-FUND MANAGEMENT SCHEME

Rate of return upto 15% per annum

Offered to corporate and business community

Development of secondary market for Government Securities

10% Withholding Tax on minimum balance

No maximum limit of deposits

Zakat deducted on  @ 2.5%

6.10-KHUSHALI BACHAT ACCOUNT

Saving type account

Rate of return is 8% per annum

Profit calculated on daily basis

Profit paid on half yearly basis

Utility bills can be debited through this a/c

No charges will be debited for utility payments

6.11-KHANUM BACHAT SCHEME

Designed to support small savings of people

Depositing money for 10 years

No return until 10 year

Payments are made on monthly basis

No limit for monthly payments

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After 10 year return will be on fixed rates

6.12-TERM DEPOSITS

Term deposits are fixation of certain amount of money for a specific span of time. These can be

of majorly two types i.e. short term notice deposits and long term notice deposits. Different rates

are charged for different period of times like as shown by following table. If presented before

maturity then previous period rate would be charged.

Duration Rate Of Interest

 01 month        08.1%

 02 month      10.1%

 03 month     11.0%

 06 month     11.5%

 01 year    12.5%

 02 year    13.3%

 03 year   14.5%

 05 year   16.4%

The instrument term deposit is like a slip containing issuing bank name, a/c # to operate on

computer, deal #, customer name, reference #, date of issue, amount, rate maturity date etc.

6.13-CALL DEPOSITS

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These call deposits are presented in the bidding process as guarantee or security from the bank

that this much money is deposited in the bank. These are made in the favor the party offering

contract or any other person. The bank offer no interest rate on it because these can be called at

any time. For encashment the applicant must have to cancelled the call deposit instrument from

its beneficiary. For collection the beneficiary usually send the authority letter for paying in the

shape of Demand Draft or pay order. The call deposit instrument containing the information

regarding applicant and beneficiary name, joint name a/c opened, signature cards for

encashment, reference #, amount, date of issue, authorized signature etc.

6.14-Loans

Personal loans

“The more you praise and celebrate your life, the more there is in life to celebrate”. MCB

personal loan shortens the distance between your dreams and your celebration. It is fast,

flexible and affordable.

6.15-MCB Payara Ghar

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MCB offers flexible and competitive home financing facility with options of home purchase,

construction and renovation.

6.16-MCB Car Cash

Car financing and leasing at competitive rates with flexible options Car cash finances both

semi-commercial and non-commercial vehicles for personal and business use

6.17-RTC Department

This department deals in RTC. It stands for Rupees Travellers Cheques. MCB RTC has the largest share

of the total RTC Market. Over 1.5 Million satisfied customers have made  MCB RTCs. These are printed

in the UK and carry a thread watermark- a feature that prevent counterfeiting.(fake)

As good as cash

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The most convenient substitute for cash for all kinds of transactions(property, trade, personal

etc).

Denominations

Cheques are available in the denomination of Rs 1,000  Rs 10,000  Rs 50,000.

Easily Encashed

They can be encashed at any MCB branch.

Easily refundable

In case of Loss Or Theft we can get the full amount back.

Exclusive Security Features

MCB RTCs can’t be duplicated. Various security features both in design and materials make

counterfeiting or fraudulent alteration extremely difficult.

Valid Until Used 

Validity of Cheque is indefinite. We can use them for a week, a year or more after the date of

purchase.

Tele verification System  

It enables us to check the validity of cheque 24 hours a day .

Procedure

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First of all RTC-10 is given to customer. It is filled and then cash is deposited to cash department

. One copy is for office and one copy is given to the customer and RTC are issued at that time.

When RTCs are sold then H.O A/C is credited by using form no RTC-20. 

It has five copies:

 A,B,C,D,E.

A= H.O(head office) copy, B= RTC Dept, C& D= Branch.

When RTCs are returned or purchased by the MCB then H.O is debited by that amount by using

form RTC-30. Summary of all RTC purchased by branch is made on form RTC-40.

6.18-Consultancy Services

In the process of privatization of public sector units, prospective buyers need professional

assistance and MCB, with its expertise, offers to them specialized service for valuation of the

market value of the industrial unit, preparing bid documents and arranging finance for the

purchase of the unit.

6.19-Self Supporting Scheme

For the benefits of genuine worker/borrowers who are poor and needy and for small entrepreneur

the bank as evolved a self supporting scheme: maximum amount of loan Rs.25000 and minimum

33

Rs.5000 per individual. Loan will be totally free of mark-up. Fax Press .This product was first of

its kind introduced by using modem technology of The Fax Machine. It facilitates speedy

transfer of funds within Pakistan. The service guarantees transfer of from one city to another,

within an hour.

6.20- Night Banking Service

For the convenience of the account holder, service has, especially, been introduced at busy

commercial centers. Traders and other clients can now make deposit, with case, at such centers up

to 8.00PM.

6.21-Bill Payments

MCB easy bill pay offers unmatched convenience to pay your utility and mobile phone bills or

re-charge your prepaid mobile phone accounts anywhere, anytime with security and peace of

mind. MCB is the only bank that offers you 3 convenient options of making bill payments to

PTCL, SSGC, SNGPL, KESC, Mobilink, Super net, IESCO,HESCO, and Ufone. So, save your

precious time by avoiding long queues and pay your bills through MCB Easy Bill Pay.

6.22-Fax Press

This product was first of its kind introduced by using modem technology of The Fax

Machine. It facilitates speedy transfer of funds within Pakistan. The service guarantees

transfer of from one city to another, within an hour.

.

6.23-MCB Lockers

34

The best protection for your valuables. Lockers of different capacities are available

nationwide.

7-ORGANIZATION STRUCTURE

MAIN OFFICES

REGISTERED OFFICE:

MCB BUILDING, F6/G6

Jinnah Avenue, Islamabad

PRINCIPAL OFFICE:

MCB TOWER

I.I. Chundrigar Road, Karachi

REGISTRAR AND SHARE REGISTRATION OFFICE:

THK Associates (pvt) Ltd.

Shares Department, ground floor Modern Motors House

Beaumont road Karachi

8-ORGANIZATIONAL STRUCTURE OF MCB

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As MCB is a banking company listed in stock exchange therefore it follows all the legalities,

which are imposed by concerned statutes. Mr. Muhammad Mansha is chairman & chief

executive of the company with a team of 10 directors and 1 vice chairman to help in the business

control and strategy making for the company. A team of 10 professionals is handling operational

management of the bank. Mr.Muhammad Mansha is also the member of this team.

Recently the organizational structure was re-designed as follows:

Segments of MCB

For effective handling of branches, it has been categorized into three segments with

36

Chairman Mian Muhammad Mansha

President

Consumer Banking Group Head

Commercial Banking Group Head

Corporate Banking Group Head

different people handling each category. These categories are:

Corporate Banking

Commercial Banking

Consumer Banking

Corporate Banking

These are branches which have an exposure of over Rs. 100 million. Usually includes

multinational & public sector companies.

Commercial Banking

The branches which has a credit exposure of less than Rs. 100 million but having accredit

portfolio of more than Rs. 20 million (excluding staff loans). Usually branches in large

markets and commercial areas come under this category.

Consumer Banking

These are the branches which have exposure up to Rs. 20 million and these include all the

branches which are neither corporate nor commercial branches.

9-BUSINESS STRATEGY

The business strategy of MCB is to provide financial solutions to major segments of its customer

base, namely retail and corporate. Separate business groups have been set up to ensure a more

focused approach in satisfying the diversified customer segments. The Bank has also established

an Islamic Banking unit to offer Shariah compliant products and services, with dedicated Islamic

banking branches in six cities. The plan for future is to further realize the capacity of Islamic

Financial Systems and to bring Shariah compliant network parallel to current retail network of

traditional banking.

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Wholesale Banking Group caters to the top tier local and multinational companies. As a result of

organizational restructuring, including reinvigorating Investment Banking and beefing up

relationship teams, the Group is in line with the industry’s best practices. MCB has closed some

large deals and is currently working on a number of large transactions including advisory

business. It is a strong competitor in cash management and structured financing activities.

Retail Banking Group focuses on trading and middle market segment primarily for building risk

assets and trade related business. MCB caters to their needs of financing foreign and local trade,

funds transfer and other seasonal requirements. The Bank has renovated a large number of

branches and staff has been trained for meeting the requirements of SMEs and other retail

customers. A separate SME Financing Division has been set up to provide customized financing

solutions to this very important segment of the economy. The Group also focuses on the

development of innovative consumer asset products for satisfying the personal needs of the

customers. MCB has a significant share of consumer financing business with its House and Car

Financing schemes. The recently launched running financing facility against the mortgage of

property is also expected to go a long way in increasing the quality consumer credit portfolio of

the bank. With the experience gained in the past few years, the Bank is fast progressing towards

becoming the leading bank in consumer business.

10-COMPETITORS

Local private bank:

Bank al Habib limited

Bank Al_Falah limited

Askari bank

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Faysal bank

Soneri bank limited

Allied bank limited

Atlas bank limited

Bolan bank limited

Indus bank limited

Union bank limited

11-HRM POLICIES

The Human Resource Management Group of MCB is totally responsible for the overall functions

of the HR for the entire network of branches throughout the country. The group performs all the

necessary functions of from a strategic point of view and aspires to use its human potential in the

best possible way that can lead the organization towards a competitive advantage.

Role play by senior managers

Senior management is generally a team of individuals at the highest level of organizational

management who have the day-to-day responsibilities of managing a corporation. They have

higher levels of responsibility, such as a board of directors and those who own the company

shares, but they focus on managing the senior management instead of the day-to-day activities of

the business. They are sometimes referred to, within corporations, as top management, upper

management, or simply seniors .The first thing which senior management must realize from the

outset is that Total quality management is a long-term business strategy. The senior management

should start TQM implementation because they are the primary internal change agent for quality

39

improvement. In this situation, the senior management has two major roles; they are shaping

organizational values and establishing a managerial infrastructure to actually bring about change.

They have to prepare themselves with knowledge about the criteria of quality and put in their

mind the TQM agenda.Total quality management is the management process used to make

continuous improvement to all

Functions in organizations, the ideal continuous improvement process are the ones that begin

with and have genuine senior management involvement. On the other hand, TQM

implementation needs commitment to quality and continuously improving from all levels of

staff.

Process of change in Muslim Commercial bank :Muslim commercial bank after being a private

limited focus on the improvement of the services and product of the organization that Muslim

commercial bank is offering to its customer and has bought a change in the following areas.

1: Technological Change.

2: Training program.

3: Motivation of employees.

4: Benefits for employees.

5: Compensation system.

6: Appraisal system.

7: Structural change.

8:Technological change

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All the MCB branches are 100% computerized and more than 19 cities in Pakistan are connected

with online service. Two well-known advancement in technology of MCB are the introduction of

MCB mobile banking and MCB ATM 24-hours cash card.MCB mobile banking is providing the

convenience of accessing account balance information and mini statement whenever want.

12-FUTURE PROSPECT OF THE FIRM

“To be the leading financial services provider, partnering with our customers for a more

prosperous and secure future”

MCB bank is a leading commercial bank of Pakistan. The year 2011 is expected to pose a more

challenging environmental than a 2010. MCB is fully geared to not only maintain its growth

pattern but would also increase its share in the industry through the introduction of a series of

electronic based products, introduction of Consumer Financing to increase volumes and risk

diversification.

MCB bank is in procedure of lunching more innovative product which will help in MCB bank

growing more. As the size of mcb is very large and it comes under the five largest banks there

are lot probabilities of growth for MCB du to its strength.

Now MCB bank open new branches

Expand there business more and more

Introduce more electronic based products

MCB focus on outstanding services

13-BRANCH INFORMATION

I did my internship in MCB Bank Limited G. T Road Branch, Gujrat some important

41

information about my branch is as follows:

Branch Code 1410

Branch Name G. T Road Gujrat

Address G. T Road

Contact Numbers 053-3513311

Management of the Branch

Position Name

Branch Manager Mr. Muhammad Adnan

Operation Manager Mr. Syed Arslan

Regional Head Mr. Shahid Raffiqe

Remittance Supervisor Mr. Atif Rubbani

Remittance Officer Ms. Kubra

Remittance Officer Ms. Sadaf

Cash Supervisor Mr. Shahzad Butt

Chief Cashier Mr. Asjad Raffiqe

Credit Officer Mr. Arfan Khalid

Office Boy Mr. Saqib

Guard Mr. Muhammad Tufail, Mr. Muhammad

Alam

SUPERVISORS

During my internship at MCB I worked under the kind supervision of the whole branch

staff including the Branch manager, Operation Manager and other bank officers.

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PERIOD OF INTERNSHIP

I completed six weeks internship at MCB G. T Road Branch Gujrat.

14-WEAKNESSES OF BRANCH

1. Majority of the people are not well aware off its products.

2. All the customers are not equally treated.

3. Lack of specialized skills due to job rotation policy of the bank.

4. Mismanagement of time is another weak point the staff is normally on their seats

still 7:00PM or 8:00.

5. Political instability in country

6. Internal political issues

15-FUNCTIONS AND OPERATIONS

DESCRIPTION OF THE ACTIVITIES OF THE DEPARTMENTS

One main and basic purpose of banks is to provide services to the general public. Now-adays

commercial banks play a vital role in the overall development of the country and the

functions performed by these banks are changed and enhanced. MCB where I did my

internship is a Commercial bank; main activities performed by different departments of

MCB are as follows

43

Open Different accounts for different people

MCB offers different kind of Accounts for its customers according to their needs and

requirements and these are:

Current account

Saving account

Term account

Opening of individual account

There are a number of rules and regulations that are followed in banking , and

requirements checked before opening an account for people similarly MCB like all other

banks in Pakistan make sure whether the person who is going to open the account in the

bank is a desirable customer or not. After that MCB determines the integrity,

respectability, occupation and the nature of business of the perspective customers

through the introductory references which is provided at the time of account opening.

This initial investigation of the people asking for account is important to conduct carefully

because if it is not properly done may result serious consequences not only for the banker

concerned but also for other bankers and general public.

Procedure to open an account:

When a person desired to open an account in MCB, bank required some basic

information.

Following information is needed by MCB before opening an account

1. Title of Account

2. Full Name of Applicant

3. Occupation

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4. Address

5. Mother’s Name

6. Telephone No.

7. Currency of account

8. Nature of Business

9. Introducer’s Name, Address & Signatures

10. Special instruction regarding the account

11. Initial Amount of the Deposit

12. Signature of the applicant

Issuance of cheque book

When a customer opens an account with the bank, a cheque book is provided to him for

withdrawals from account. However, the first cheque book is given to the customer after

checking all the required documents. A requisition slip is also attached with the cheque

book issued for the first time; this requisition slip is a request for the issuance of new

cheque book. This slip is completely filled and signed by the customer at the time of reissue,

the signature of the customer is verified by the bank for security purposes and new

cheque book is issued to the customer and serial numbers of the cheque are entered in

the book of the bank. Along with the signature the person is required to write his full

name and address.

Normally only one cheque book is issued at a time but customers, who need a number of

cheque books at a time can request the bank to stock as number of cheque books in their

name and to point their name on these cheque books.

The cheque books register keeps and maintained by the officer that hold the record of

45

cheque book inventory and cheque book issued. The account number against which the

cheque book issued to the customer and the number of leaves that the book contained

also recorded in this register. Cheque book issue registers keeps the record of the cheque

books issued to the customers.

CLEARING DEPARTMENT

Clearing means collection of cheques receive from our customers but drawn on other

banks.Receiving the instruments deposited by customers Posting the amount of instruments in

credit of customer’s account If cheque returns from the concerned bank, the customer account is

debited. Crossing stamp is put on the instrument and slip given to customer on receipt of the

instrument. Clearing stamp and “payee account credited” are put on the instrument and the

voucher. Clearing House has provided this facility. Clearing house facilitates different banks, in

one city, to get their cheques drawn upon other banks to be cleared.

Outward Clearing

When cheques, TC’s and other negotiable instruments drawn upon other banks like NBP,

ABN AMRO of the same city (as Lahore) are presented in Muslim Commercial bank to

deposit them in the respective payee’s accounts, these instruments are lodged in outward

clearing (o/w clg) of MCB bank.

Procedure of Outward Clearing

• The name of the branch appears on its face where it is drawn

• It should not stale or post - dated or without date.

• Amount in words and figures does not differ.

46

• Signature of the drawer appears on the face of the instrument.

• Instrument is not mutilated.

• There should be no material alteration, if so, it should be properly authenticated.

• If order instrument suitably indorsed and the last endorsee’s account being credited.

• Endorsement is in accordance with the crossing if any.

The amount of the instrument is same as mentioned on the paying-in-slip and

counterfoil.

• The title of the account on the paying-in-slip is that of payee or endorsee (with the

exception of bearer cheque).

• If an instrument received other than MCB of Pakistan then special crossing stamp is

affixed across the face of the instrument. Clearing stamp is affixed on the face of the

instruments, paying-in-slip and counterfoil (The stamp is affixed in such a manner

that half appears on counterfoil and paying-in-slip). The instrument is suitably

discharged, where a bearer cheque does not require any discharge and also an

instrument in favor a bank not need be discharged.

Return Outward Clearing

• Over writing

47

• No stamp of clearing or if it is not clear

• No stamp of crossing or if it is not clear

Inward Clearing

Inward clearing means cheques drawn on us and presented by other banks. In inward

clearing Branch acts as paying banker. After realization of inward clearing, banks deposits

are decreased as bank makes payment to other banks from the balances held by the branch.

This realization of inward clearing is also referred to as responding to the clearing. Cheques

and other negotiable instruments instruments (PO, DD, PS, CDR etc.) drawn on Muslim

bank, sent by other banks, constitute the inward clearing of MCB.

Procedure of Inward Clearing

• Instruments with schedules are received from NIFT.

• Amount of each instrument entered is in inward clearing register.

• Instruments are detached and handed over to the deposits and other respective

department for checking and payment.

• In case of any instrument is returned, return memo is prepared stating the reason of

the return.

• Entry is made in cheques Return register.

• Cheques return charges are recovered from the party as per charges schedule.

48

Checking / Return of Instruments

• Over writing

• No stamp of clearing or if it is not clear

• No stamp of crossing or if it is not clear

Granting loans & advances

The bank offer clean advances against promissory notes etc and the secured advances

against different types of tangible and marketable securities. The advances department

lends money against different securities for the commercial and personal purposes.

1. Commercial Loans

2. Personal Loans

Commercial

These loans are for business purposes. Consumer loans can be categorizes as

Running finance

It is usually given to meet the temporary requirements of the customer. This is

of two types which are as under.

Secured: In this type of commercial loans the banks permits the customer to

withdraw more than his deposits present at bank after giving the security

against the amount withdrawn.

Unsecured: Here the bank pays upon the personal security of the customer

mentioned on the customer account.

Project Finance

49

The advances that are provided to finance a project. A lump sum is given and repaid in

installments.

Demand finance

They are often termed as packing credit. They are given to the exporters of handicrafts,

surgical instruments at concessional rate of interest.

Agriculture finance

Advances are given to the farmers to meet the short, medium and long term production

requirements such as agricultural inputs, tube wells, livestock farming, poultry farming

etc. they are also given against different types of securities.

Industrial Loans

These Loans are given to industrial sector for purchase of machinery and other capital

nature goods.

Cash Finances (Commercial Loans Inward)

These types of loans are given against following:

Against locally manufactured goods.

Cash finance against Rice and Paddy

Against pledge

Against commodities

Against Trust Receipts

Procedure for Granting Commercial Loans

The commercial loans are usually given against property. The detailed procedure for

granting loans is as under.

Re-payment capacity (customer valuation)

50

Account turnover

Balance sheet of company (weather going good or not)

Market reputation

Credit history through SBP

Loan requirements

Then the bank has to think about security, security may be in the form of

Fixed asset

Liquid asset

Mostly commercial loans are given against fixed asset

Request from party

Bank take request from customer for loan, party write any amount for loan but we have

seen the repayment capacity and then give the loans.

Documentation

Then documentation starts.

.

Property Valuation

Then legal documentation started. First of all we do the property verifications.

Property verification

Property documents will show ownership of property. They are also called as title

documents.

Title deed (may not had by every property because of inheritance)

Fard outside committee limits

PT1: inside committee limits (excise and taxation issue it)

51

PTD(permanent transfer deed)

For places, housing schemes etc where title deed does not exist.Property which the party

wants to be mortgaged in valuates.

Legal documentation

Documents are sent to lawyer and he will send legal opinion. Lawyer will verify property

in revenue record and approve that documents are legally good. (Then processing starts)

Proposal by RHQ

Then the proposal is prepared by RHQ, it is called as Sanction advice. In this bank propose

customer that we can give up to this amount.

Told to party

Then the credit officer will tell the party that the bank can give up to this extent. This is

compulsory that we should tell and discuss with the party that whether it is acceptable or

Mortgage deed

Mortgage deed is a contract between the bank and the party that the property is

mortgaged with the bank against credit.

Registered mortgaged: registered with sub-registrar so that it can come to

know that properties mortgaged with bank

Equitable mortgaged: because registered mortgaged expenses are high so

remaining is equitable but in MCB in place of equitable mortgaged MODTD

(Memorandum of Deposit of Title Deed)

Implementation

On property documents it is written that property is mortgaged. Mortgaged

52

deed is given to the party and he will take it to the sub-registrar.

The party will then bring

Mutated fard or mutated PT1

Encumbrance certificate (EC) mortgaged deed number; date must be

mentioned otherwise it will not be valid.

Indemnity bonds (IB’S)

IB’s are the contracts between the bank and the party on which duty is paid to the

government. They may be of following different forms.

Demand promissory note: Customer agrees to buy back with mark up i.e. he

will pay the credit with return.

Letter of continuity: Party will continue it for 1 year

Letter of hypothecation: Inventory in hypothecate as security

MODTD: Memo of Deposit of Title Deed

Letter of guarantee (personal guarantee): Guarantee is given that (Principal +

markup + 210 days default markup) will be repaid.

Inventory insurance

Inventory insurance is also done, which is hypothecated to banks.

CAD (Credit Administration Department)

Then all these documents are sent to the CAD. CAD will check it and give the authority to

disburse the loans. This department exists at RHQ level

Consumer loans

These loans are offered to individual persons usually. They are also called as the Personal

53

Loans.

1. Here bank risk is high

2. Mark up rate is high

3. Insecure loans usually

4. Security is there but may not be materialized.

The various types of consumer loans include

1. Car Financing

2. Credit Card

3. Personal Financing

4. Flexi Loans

5. Demand Finance (staff) The Loan for staff can also be included in loans offered to individuals

i.e. consumer loans. Loans are offered to the staff of the

following categories.

- House Building loans against property mortgage

- Loans equivalent to monthly salary

- Loans for purchasing vehicles.

Collection of Utility Bills

MCB collects utility bills on behalf of WAPDA, Sui Gas Companies, and Pakistan

Telecommunication Corporation Limited by putting the stamp on the utility bills “Paid”,

Date of payment, Signature of the officer receiving the utility bills. After receiving utility bills

from people a list is made on the form which is called Bills scroll form. One copy of

the scroll is held with the bank for evidence whereas the original copy with the receipt of

the bills is sent to the billing department of the respective corporation. The bank charge

54

commission on the bills for collection

ATM Service

Through ATM facility customers can use the amount in their accounts at any time. An

account in MCB is necessary for ATM facility

A form is filled by customer where the basic information about the customer and

if he wants supplementary card, the details about that supplementary is given.

It is checked by the officer and sent to the head office.

Head office sends the card to the customer at the address given by the customer.

Pin code is held by the customer

Then customer will come to the branch take pin code and the card become active.

1st time he has to use the card in the bank timings.

Charges for this facility are taken on annual basis.

Locker facility

Lockers are provided to the customers of MCB. They are of different sizes for

example small, medium and large. Charges on lockers are on annual basis and

vary according to the size of locker.

The customer must have an account in MCB in order to open the locker.

Then he will fill the locker opening form which will be checked and signed by

the officer of the bank.

It may be opened by singly, jointly and up to three persons.

Bank will take the copy of customer’s ID card and now the key is given to the

customer but the master key is held by the officer and to operate the locker

firstly the master key will be required

55

Annual charges are debited to the customer account when they become due.

If the locker holder died the legal heirs can go to the court within 18 months. If the don’t

go the court the officer sends the remainder. If they don’t react the bank will open locker

in presence of lawyer after 18 months, takes his charges due and return the remaining to

the heirs.

Dealing with Cash

Dealing with cash is a very major operation of cash department which involves payment

of cheques presented by the customer and receipt of the cash deposited by the customer

in their accounts.

Cash Payments: Payment of cash to customer involves the following procedure

1. The cheque is presented to the cashier first, who takes care of following

precautions

a) It should not be out dated.

b) There should not be any crossing on it, if so the signature should be with cutting.

c) Two signature of the customer receiving the cheque should be in the back of the

cheque.

d) There should not be any difference between the amount and figures

e) It should not be crossed.

2. The cheque is entered in the computer by the cashier and customer account is

debited.

3. If the amount of the cheque exceed the customer balance in that account a note

56

regarding this will automatically appeared on the computer screen. Such entries

are immediately scratched.

4. Finally the cheque goes to the officer, who first, checks the signatures, whatever it

is according to the specimen signature card, he will also check the conditions mentioned in no.1.

If he has any doubt he will reject the transaction. Otherwise he

authenticated the transaction and sign on the cheque.

5. The cheque is finally returned to the cashier for payment.

6. If the cheque is dishonored due to any reason Rs.200 is deducted from the

account of the customer as a penalty for that return.

7. At the start of next day all the cheques, which are honored by the bank on

previous day, are sent to account department for permanent record.

Receipts of Cash: Receipt of cash involves the following procedures.

1. All the cash is deposited on a specific deposit slip. The depositor has to mention

specific deposit account number, name of the account holder and the amount which he wishes to

deposit in his account on this slip.

2. This slip is presented to the cashier along with the currency note, he count the

notes and stamp the slip with “cash received” if he is satisfied, then he enters the

slip in the computer by crediting the account.

3. Finally the transaction regarding deposit of cash is authenticated by the

responsible officer and put his signature on the slip. Now the transaction is

permanently stored in the computer.

4. At the start of next day all deposit slip of the previous day is sent to accounts

department for permanent record.

57

The following books are maintained in the Cash Department:

Receiving Cash Book

Paying Cash Book

Cash Balance Book

The consolidated figure of receipt and payment of cash is entered in the cash balance

book and drawn closing balance of cash.

16-DUTIES

DESCRIPTION OF THE DEPARTMENT

During my internship at MCB G. T Road Branch, I got an opportunity to work in the

following departments

Cash department

Remittances department

Clearing department

Advances department

Clearing Department

Types of Clearing

Outward clearing: Cheques drawn on other banks here the bank act as Collecting

Bank.

Inward clearing: Cheques drawn on us here the bank act as Paying Bank.

Types of Cheques Collected

Transfer cheques: transfer cheques are those cheques, which are collected and

paid by the same branch of bank.

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Transfer delivery cheques: transfer delivery cheques are those cheques, which are

collected and paid by two different branches of the same bank situated in the

same city.

Clearing cheques: clearing cheques are those cheques, which are drawn on the

branches of the other banks located in the same city or in the same area. And

which is covered by a particular clearing house.

Collection cheques: collection cheques are those cheques, which are drawn on

the branches of either the same bank or of another bank, but those branches are

not in the same city or they are not the members of clearing house

Function of Clearing Department

1. First important function of clearing department is to accept transfer, transfer

deliveries and clearing cheques from the customer of the branch and to arrange for

their collection.

2. Another important function is to arrange the payment of cheque drawn on the

branch and given for collection to any other branch of MCB or any other members, or

sub-members of the local clearing house.

3. To collect amounts of cheques drawn on members, sub-members of the local

clearing house, sent for collection by MCB branches which are not represented the

local clearing house. Bank charges some commission of these facilities.

Now a days clearing is being supervised and conducted by a private company NIFT.

Remittance Department

It is a most important and interesting department. Transfer of money or equivalent to

59

money from one branch to another of the same bank is called remittance. Now it is

become easier and safer method for the client and banker to transfer their money from

one branch to another within the city and outside the city.

Benefits and Functional Importance

Cheap as compared to other modes of remittances available to the public i.e. money

order. Normally any amount can be remitted through banks. Important source of

earnings i.e. commission, service charges, and FED. The risk involved in physical

transportation of money is eliminated.

Types of Remittance

Inward remittance

Outward remittance

Inward Remittance: The branch receives the instrument directly from the customer or

from the originating branch, and is responsible to pay to part is called inward remittance.

Outward Remittance: The branch, which issue or sold the instrument to the responding

branches, called outward remittance.

Modes of Payment

1. Banker’s Cheque

2. Telegraphic Transfer (TT)

Banker’s Cheque

A Banker's Cheque is a Cheque where the funds are taken directly from the financial

institution rather than the individual drawer's account.

A normal cheque represents an instruction to transfer a sum of money from the drawer's

60

account to the payee's account. When the payee deposits the cheque into their account,

the cheque is verified as genuine. Any individual or company operating a current

account (or checking account) has authority to draw cheques against the funds stored in

that account.

By contrast, when an individual requests a banker's cheque they must immediately

transfer the amount of the draft plus any applicable fees and charges from their own

account to the bank's account. An individual without an account at the issuing bank may request

a banker's draft and pay for it in cash, subject to applicable anti-money

laundering law and the bank's issuing policies. Because the funds of a banker's draft have

already been transferred they are proven to be available; unless the draft is a forgery or

stolen, or the bank issuing the draft goes out of business before the draft is deposited and

cleared, the draft will be honored. Like other types of cheques, a draft must still be

cleared and so it will take several days for the funds to become available in the payee's

account.

Following three parties are involves in the pay order:

Purchaser

Issuing branch

Payee

2. Telegraphic Transfer:

Transfer of funds from one branch to another branch of the same bank or

upon other bank under special arrangements. This type of transfer is

simple

Telegraphic transfer is not negotiable

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The funds are not payable to bearer

Minor cannot avail this facility

PARTIES:

Following are the parties involved

1. Applicant

2. Drawing branch

3. Drawee branch

4. Beneficiary

Cash Department

The books that are maintained in the Cash Department are as under:

1. Receiving Cash Book

2. Paying Cash Book

3. Token Book

4. Scroll Book

5. Cash Balance Book

When cash is received in counter, it is normally entered in the Scroll Book and Receiving

Cashier Book. At the close of the day, these two are balanced with each other.

When the cheque or any negotiable instrument is presented at counter for payment, it is

entered in the token book and then token is issued to the customer. After that the token

clerk and the Cashier make entries in the paying book and payment is made to payee. At

the close of day, the Token Book and Paying Cashier Book both are balanced.

The consolidated figure of receipt and payment of cash is entered in the cash balance

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book and then drawn closing balance of cash.

Opening Balance + Receipts - Payments = closing Balance

This section of general banking is very important because cash is the most liquid asset and

mostly frauds are made in this department, therefore, extra care is taken in this

department and nobody is allowed to enter or leave the area freely. Mostly, cash area is

grilled and the doors of this area are under supervision of the head of that department.

All the books maintained in Cash department are checked by an officer.

Advances Department

Advances are one of the most important sources of earning for the banks. When a

customer borrows a fixed amount from a banker, which is repayable either in periodic

installments or in lump sum at a fixed future times, Customer has to pay mark-up

normally termed as interest on the entire amount.

MCB is also giving full attention towards its advances department and it is also obvious

from the growing portfolio of advances and from very low delinquency rate. The credit

portfolio of MCB is in a very much better shape than other financial institutions of

Pakistan and for this all credit goes to the management and the staff who are concerned

about the quantity and quality as well. This department basically deals with

Loans

Cash Credits

Overdraft

TASKS ASSIGNED TO ME

During my internship at MCB, G. T Road Branch I was assigned with different tasks such as

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Opening of an account

I firstly learn about different types of accounts that MCB offers to its customers and the

requirements for opening a new account. Then after having a complete knowledge, I opened two

individual accounts and a sole proprietor’s account with the help of my supervisor.

Issuance of cheque book

I issued cheque book to the customers and learns that when a customer opens an account with the

bank, he is provided with the cheque book for withdrawals from account. However the first

cheque book is issued to the customer after checking all the required documents. The cheque

book also contains a requisition slip for the issuance of the new cheque book. This requisition

slip is duly filled and signed by the customer. In case of re issuance the signature of the customer

is verified by the bank and new cheque book is issued to the customer and serial numbers of the

cheque are duly entered in the book of the bank. Person has to write his full name and address

along with the signature.

Making Entries in Clearing Register

I made entries in clearing register and record the following information in register

Name of the favoring party

Name of the bank on whom drawn

Account title

Account number

Cheque number

Amount of transaction

Issuing Deposit Slips to Customers

Worked in clearing department, received cheques from customers and issued deposit

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slips to them.

Collection of Utility Bills

MCB collects utility bills on behalf of WAPDA, Sui Gas Companies, and Pakistan

Telecommunication Corporation Limited by putting the stamp on the utility bills “Paid”,

Date of payment, Signature of the officer receiving the utility bills. After receiving utility

bills from people a list is made on the form which is called Bills scroll form. One copy of

the scroll form is kept with the bank for evidence whereas the original copy with the

receipt of the bills is sent to the billing department of the respective corporation. The

bank charge commission on the bills collection.

Working as Customer Service Officer

During my internship at MCB, I also worked as Customer Service Officer and provided the

people with the general information that they needed like how to open an account, how

to fill up the form etc.

17-CRITICAL ANALYSIS ON MANAGEMENT PATTERNS

First on the counter of customer service officer ,there must two officers because that officer have

to deal with the customers as well he /she have to submit the forms to Lahore (Head Office) till

12 AM ,after that account will not open next day.

There are so many people gather on this counter for filling the slips ,online transfer slips so there

must be two officers on that post.

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Second ,the system hanged to mush in this branch whatever the purpose, if the customer want to

inquire about his/her balance in the account or he/she want to get his /her last month’s

statement .The customer got difficulty in this situation.

This will cause lose their customers from the bank .and their Goodwill is affecting from it.

The employees are not fully awared about which service is exactly deliver by which employee,

this cause again difficult for customer.

The bank pay more attention to the specific customer not on the specifically on the middle class

businessmen.

The important reason is that this bank take charges on cash online transfer if the amount is above

RS.25000, Most of the customers argue on that but at the end just said to him/her that Madam

/sir it is the policy of the bank.

Most of the senior used that language which is not allowed in professional especially in front of

public.

There are no specific duties assign to employees ,if a person knows about the work he/she do it .

18-PROBLEM ENCOUNTERS

-This week A person came to transfer his money through cash online service ,My senior told me

that whenever the customer of online transfer came first ask for the charges which are as follow

For Cash online

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200+32 and .3% charges

For Example A person want to transfer the amount of Rs.100000 so one option is that the

deduction is made in the amount which is going to transfer and another way that the customer

paid the additional charges which mean he have to pay Rs.100532

So the customer augmenting with me that why the bank is receiving that much amount I just said

that it is the bank policy but the kept on saying that the charges are very high I sent him to the

senior officer to held him.so He satisfy him in better way.

There are different codes for every branch

One of the customer came and ask me would you tell me about the where this branch locate ,he

gave me the number /code of the branch

I went to my senior and ask that person want to know about the baranch he told me to open the

file which is on the desktop name “branches name”

In this way I held the customer in few minutes.

To deal with different type of people is challenge itself .Some people has different accent to

pronounciate the amount it create problem to write the amount on the cheque.

A person came to bank ,he was in a great hurry because he had flight to London that evening and

he want to activate his inactive account .But the rule is that who have inactive account must

submit his /her ID card copy and a Form which is being provided by the bank.So after some time

I just told him to give authority to his father or wife that he \she gave the signature and deposit

or withdraw the amount from his account then the problem solved.

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19-HOW INTERNSHIP IMPACT MY CAREER

I did my internship at MCB G. T Road Branch, one of the leading banks of Pakistan. The

bank has completed more than 15 years, since its privatization and during this period,

MCB has performed well and has sustained growth.

It was a great experience for me to work with such a well-known and reputed bank. The

internship proves very valuable for me as it not only enhances my skills and qualifications

but also gives me experience and brings clarity in my future plans. I gained a number of

skills that will be beneficial for me in my future career some of these are

Enhanced my confidence level

Strengthen my interpersonal and communication skills

Developed work ethics in me

Helped to improve team work and leadership skills

It gave me a lot of confidence and manners to behave in the working environment

Improved time management skills and made me punctual

It helps me to understand how to behave in different situations professionally

It made me think critically in difficult situations and act accordingly

Improved my decision making capability

After doing internship I acquired good work habits

It provided in depth knowledge of the formal functions of the banking sector.

During my internship period I got an opportunity to work in the General Banking, Cash,

Remittances, Credit and Clearing department and learned about the basic functions

performed by these departments and bank as a whole. I also come to know about bank’s

relationship with their customers and within branches. I come to know about

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documentation requirements and record keeping by bank for different activities and

processes of the bank, especially the documentation requirement for different kinds of financing

facilities.

I was assigned with multiple tasks and responsibilities that I had completed successfully

under the guidance of my supervisors. Different responsibilities assigned to me were

1-Assigned with the responsibility to open two individual and one sole proprietor’s

account. I completed this task after getting complete knowledge about the

different types of accounts offered by MCB to its customers and their

requirements.

2-Issuance of cheque book to the customers. I completed this responsibility and

issued cheque books to both the existing and the new customers.

3- Data entry in clearing registers.

4- I was asked to work as Customer Service Officer. Being a customer service officer,

provided information to the new people who are interested in becoming the

customer of MCB and listened the problems and issues of the customers of the

bank.

5-Collection of Utility Bills was another responsibility handed over to me.

6- Issuance of deposit slips

Internship provides information to the new people who are interested in becoming the

customer of MCB and listened the problems and issues of the customers of the

bank.

7- Collection of Utility Bills was another responsibility handed over to me.

8- Issuance of deposit slips

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Internship provides opportunities to experiment and purse careers that match academic

and personal interest. Planning about the career is always difficult as there are many

doubts regarding different possible opportunities and it is really difficult for the students

to select the best possible place for their future job because they do not have enough

knowledge about different work settings, they do not have the experience that can

provide help to them in attaining the best possible job alternative. So in this situation

internship programs provides great help and gave the students and the people who are

looking for jobs for the first time, the opportunity to select the best field in which they

can show their full potential, can better utilize their skills and knowledge, and most

importantly that matches and suits to their temperament .

I am always interested to get a job in banking sector. Six weeks internship program

helped me to critically analyze the banking sector as a whole and I can openly say that

banking sector provides conducive environment for career growth. After completing my

education I will look forward to join a well reputed bank like MCB because I feel that the

banking sector is where I can better utilize my academic and personal interests.

Another important aspect of internship was that, it provided the opportunities to practice

and apply our theoretical class room knowledge into real work settings. During my study I

studied different subjects such as money and banking, economics and Public Relation and

I observed that these subjects are closely related to the banking sector. In the subject of

Money and Banking I studied about banking sector, how the overall banking operations

are conducted, various types of banks, opening and operations of different accounts and

different types of cheques, procedure to fill those cheques, parties to the cheque and

other similar topics in detail but I got only the theoretical knowledge. During my

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internship, I practically applied all my concepts in the real work settings. I opened

different accounts, fill up and guide customers about how they can fill a cheque and

personally observed the different operations of banking that I had studied theoretically in

my class room.

Internship also helped me to practically learn and observe about the motivation,

leadership and team work concepts that I studied in my class room. I learned that how

manager influence and motivate the employees of the branch. I studied Public

Relationing as s subject that is really important in this field. The first objective of every

bank is to build the strong customer relationship that is possible only by having good

relationship with them, by knowing their needs and then offering them accordingly.

Choosing MCB for my internship was really a good decision and it created a big worth for

me. It was a very rewarding experience to work in such a disciplined organization with

highly experienced and cooperative staff. I really gained very beneficial knowledge about

banking during my 6 weeks internship and also enjoyed working with experienced and

Intelligent staff.

20-CONCLUDING REMARKS

The Bank has now completed more than 15 years, since its privatization and it is, indeed,

gratifying to note that during this period, MCB has performed well and has sustained its

growth in all the major sectors. The well deserved credit, for this good performance and

progress, must surely go to the Bank’s management, its Directors and, in no small

measure, to the entire MCB team for its dedication, concerted efforts and excellent team

spirit.

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MCB has been a pioneer among the banks in Pakistan, particularly in introducing a

number of innovative banking products and services. For the first time in the history of

Pakistan, these multifarious products mostly in the shape of saving schemes have been

introduced by MCB with brand names. This has set the trend and many other banks, both

local and foreign, have since followed in MCB’s footsteps, by launching new products and

services, on similar lines.

MCB has implemented a SYMBOL system which promises the efficiency and the growth of

the bank in the long run. MIS and computerization of branches all over the country has

enhanced the overall performance of the bank. The bank provides a flexible environment

for career growth and development. The bank pays a very low rate of interest on deposits

which in unattractive for its customers. Formalities and procedures involved in mortgage

of properties offered as collateral to the bank are very lengthy.

Banking is now become an important part of our economic system. I observed that

although banks create no new wealth but they borrow exchange and consume wealth. In

this way, banks become effective partners in the process of economic development.

Modern banks are very helpful for the utilization of the scarce resources of the country. In

the broader sense we can say without the availability of the suitable banking services

modern trade and commerce would almost be impossible

Recommendations

From the Quantum of the profit and its financial data it can be easily judged that after

privatization, MCB BANK is performing well. Its deposits are growing day by day and so its

profitability. The controlling body of the bank is responsible for the productive

performance of the Bank.

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Following are my observation and suggestion to improve the efficiency of the bank for the

development of the economy.

1. A big portion of the home remittance is sent by Pakistan working capital through

MCB. A big portion of this amount is normally wasted purchasing of luxuries.

However the people motivated to save money by offering the deposit through

various investment schemes. The rate of profit should increase 1% or 2% than other banks and it

would really be a profitable step for bank.

2. There is a criticism on the banking management that the salaries of the employees

are decreasing in every succeeding year. And I think this will shake the confidence

and working habit of the employees.

3. There is another recommendation about the bank that there is no proper timing

of the bank and there is made an unnecessary delay in the banking transactions,

which might not be a good sign for the bank from future prosperity point of view.

4. Turnover of the staff, especially the turnover of trained staff results in financial

and other loss for the bank. The amount spent by the bank on employment,

induction and training of outgoing officers constitutes to beat till another officer

should ready prove this work.

5. I observed that most of the bank employees, are sticking to one seat only with the result that

they become master of one particular job and lose their grip on other

banking operation. In my opinion all the employees should have regular job

experience about all out-look towards banking. The promotion policy should be adjusted.

6. Refresher Courses for the staff are most important in any international

organization. All the employees should have these courses according to their

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requirement. Foreign experts can also be called for this purpose.

7. Every year some of the employees should be sent for training to other countries

and employees from other branches should be brought here. Some more reading

material should be provided. The purpose should be to educate the employees

with the advance studies in their field. The employee should be provided the

opportunities to attend and participate in seminars and lectures on banking.

8. Bank should give some more incentive to its employees in order to remove the

conflict between lower and higher officers and should try to improve the working

condition of the bank.

9. As such system should be designed that every employee who has some problems

with his officers can communicate it to the higher management and some steps

must be taken to improve that.

10. Recruitments should be strictly on merit basis and induction should be after

proper and extensive training.

11. Old and lazy staff should be replaced by young, qualified and energetic staff.

12. Foreign branches should be opened in order to capture the international market

and to earn international repute for the bank.

13. Working environment, equipment, furniture and staff dressing should be

according to the modern banking style.

14. Proper attention should be paid to upgrade customer services.

15. Banks different schemes must be conveyed to the targeted customers so that to

have a have a reasonable share in market.

16. Bank should help the society by providing interest free loans to the Talented

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Students.

17. Mismanagement of resources must be avoided as much as possible as it decreases

profit but also discourage hard worker and honest employees.

18. Bank should adopt the global organizational banking structure to meet the

international standards of banking sector

Conclusion

After completing my internship in MCB and having the experience to work in the different

department of bank I have concluded that MCB is really a big organization which is

providing wide range of services to a large number of customers. The financial conditions

are also great and it has a great market share.

The environment should be changed, it should be more welcoming and appropriate space

for the customers should be provided during the rush hours. One thing I really observed

for a lot of time during my internship that the customers have a great brand loyalty for

MCB. This is really a big strength of MCB.

Choosing MCB for my internship was really a good decision and it created a big worth for

me. It was a very rewarding experience to work in such a disciplined organization with

highly experienced and cooperative staff. I really gained very beneficial knowledge about

banking during my 6 weeks internship and also enjoyed working with experienced and

intelligent staff.

21-Origin of the Report

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The purpose of this report is to focus practical Experiences of my day-to-day work as a part of

my internship period.

Methodology what I have applied to prepare this report

Observation

Projection Techniques

Depth Interviews

Interaction with the Customers and Colleagues

21.1-Sources of Data Doing practical work in different desks

Study of old files/documents/formats

Personal investigation.

My colleagues and Customers

Collection of Data from different statements and abstracts.

Internet, Brochures, annual report etc.

21.2-Objective of the Report

The main objective of this report is to fulfill partial requirements of M.S.C degree program. In

order to be able to obtain the M.S.C degree program from GIFT University of Gujranwala, every

student is required to do internship program in a well-reputed organization for 1 months and 15

days , after completing all the required courses. After the internship period, each student or intern

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has to submit a report about the respective organization. I have completed my internship program

in Muslim Commercial Bank Ltd. And this report is about this bank.

As one of the main objectives of internship is to gather job experience, I have tried to put some

of the experiences that I have learnt from my internship in this report.

The specific objectives of this report are –

To present an overview of Muslim Commercial Bank Ltd.

To appraise the performance of Muslim Commercial Bank Ltd.

To apprise financial performance of Muslim Commercial Bank Ltd.

To identify the problems of Muslim Commercial Bank Ltd.

To recommend/ remedial measures of the development of Muslim Commercial bank Ltd.

21.3-Methodology of the study:

Both the Secondary and Primary Sources have been used to collect data for this purpose

Collection of Secondary Data:

Data regarding the operations of Muslim Commercial Bank Ltd. and analysis of financial

statement were collected from secondary sources like annual report, Brochures, Manuals

and Publications of Muslim Commercial bank Ltd.

Collection of Primary Data:

Many of the data and information were collected from my practical experience and

queries from the executives while doing our assignment period at National Bank Ltd.

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Information and data regarding products & services, interest rates & charges, banking

operations, organization structure, management personnel, and policies were collected

from these sources

21.4-Limitations of the report:

To prepare the internship I encountered some limitations. The limitations are given below-

Limitation of time was a major constraint in making a complete study, due to

time limitation. The duration was only six weeks. It was too limited to cover

all the banking area. Many aspects could not be discussed in the present study.

Lack of comprehension of the respondents was the major problem that created

a lot of confusion regarding verification of conceptual question.

Confidentiality of data was another important barrier that was faced during the

process of this study.

As being an intern, it also created some problems as I was unable to acquire

hands-on-experience in all the departments, due to the bank’s policy of

maintaining secrecy and also because I did not get the opportunity in all the

departments.

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