MUSLIM COMMERCIAL BANK

ContentsAcknowledgement3Executive Summary4History of Banking5Company Name:5Introduction of MCB Bank Limited6Ownership6Business Volume6Vision Statement7Mission Statement8Organizational Structure.8External Environment of MCB:10Products and Services:10Corporate Banking12Personal Banking13Personal And Corporate Banking15Competition:17Internal Environment:18SWOT Analysis18Strengths:18Weaknesses:18Opportunities:19Threats:20Human Resource Management:21Activities performed by HR department:21HR Department Hierarchy:21Strategic Human Resource Management22Job Analysis22Recruitment and Selection Procedure:22Orientation and Training Development:24Performance Appraisals:25Compensation Management:26Health and Safety Conditions:26Career Management:27Flaws in HR practices:27Recommendations:27References:28

Acknowledgement

Person is not a perfect in all the contexts of his life, He has a limited mind and mind thinking approaches. It is the guidance from Almighty Allah that shows the man light in the darkness and the person find his way in the light. Without this helping light, person is nothing but a helpless creation.I also owe my thanks to my teachers. We feel so richly blessed to have them as our instructors, whose strength and wisdom we learn up to and no doubt experience of studies with them is far better than I believed possible. I appreciated the way of Supervised, explained and guided me. They are really a source of inspiration for us and for every student of University of Management and Technology.We also very thankful to all our honorable staff members of MCB New Alamgir Market,Lahore for there co-operation and guidelines for preparing this report. I tried my level best to prepare this event with high level of accuracy but no one claim to perfect other than ALMIGHTY ALLAH.Last but not the least; ordinary words of gratitude do not encompass the true love and guidance extended to my loving and caring parents. Their constant interest, prayers and encouragement have been a very strong support for me and have enabled us to finish this task.

Executive Summary

Muslim commercial bank limited was incorporated in Pakistan and is engaged in commercial banking and related services. It is serving the nation as one of the leading Banks in Pakistan. The bank is listed on all the stock exchanges in Pakistan, in accordance with the directives of the federal government regarding the shifting of the banking system to Islamic modes; the State Bank of Pakistan has issued various circulars from time to time. Muslim commercial bank provided quality financial services in the country with profitability and responsibility and to be the best place to work. has a solid foundation of over 60 years in Pakistan MCB's operations continued to be streamlined with focus on rationalization of expenses, realignment of backend processing to increase productivity, enhancement of customer service standards, process efficiency and controls. The Bank has taken the lead in introducing the innovative concept of centralizing Trade Services in the country by providing centralized foreign trade services to branches with a view to improve efficiency, expertise and reduce delivery cost. With a network branches all over the Pakistan and a team of dedicated professionals, MCB is Pakistans largest private sectors commercial bank.Further MCBs organizational structure, design, advantages, charts and hierarchies are discussed. Whereas, on the other hand, its competitors, external and internal environment and background are discussed too.

History of Banking

The word Bank is said to have been derived from the words Bancus or Banque or Bank.This history of banking is traced to as early as 2000 B.C. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths. They used to keep strong safes fro storing the money and valuables of the people. The persons who had surplus money found it safe and convenient of deposit their valuables with them. The first stage in the development of modern banking, thus, was the accepting of deposits of cash from those persons who had surplus money with them.The goldsmiths used to issue for the money deposited with them. These receipts began to pass of transactions form hand to hand in settlement because people had confidence in the integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted in payment of debts; then the receipts were drawn in such a way that it entitled any holder to claim the specified amount of money form goldsmiths. A depositor who is to make the payments may now get the money in cash form goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank notes. The second stage in the development of banking thus was the issue of bank notes. The goldsmiths soon discovered that all the people who had deposited money with them do not come to withdraw their funds in cash. They found that only a few persons presented the receipts for encashment during a given period of time. They also found that most of the money deposited with them was lying idle.

(en.wikipedia.org/wiki/Bank) Company Name: MUSLIM COMMERICAL BANK LIMITED

Introduction of MCB Bank Limited

MCB is one of the top banks of Pakistan founded by ISFHANI and ADAMJEE families on July 1947 under the Indian Companies Act. In 1974 MCB was nationalized along with all other private sector banks. After the Indo-Pak partition, bank moved to Dhaka and then bank transferred its registered office to Karachi in 1948. The head office of MCB was shifted to Lahore in 2008. The new headquarter located at Jail Road and the building called MCB house. MCB headquarter is still in Karachi serving the nation. The MCB tower in Karachi is the tallest building in Pakistan. The Bank has more than 5.2 million customers nationwide and have network of more than 1,700 branches and 500 ATMs in the market.

OwnershipThe ownership of the bank was changing with the passage of time. Bank was nationalized by the Bhutto Government in January 1974 and then Premier Bank limited merged with MCB. In the late 1991, the bank get privatized and purchased by a Pakistani corporate groups named as Nishat Group, founded in 1948. Nishat group is the most diversified business group in Pakistan, including banking sector, textile sector, and insurance and cement sectors. NCB was the first bank of Pakistan who gets privitized. Chairman of the Nishat group and NCB is Mian Mohammad Mansha and hi did his best and play the most import role in the success of the bank as well as group. .

Business VolumeMCB is the Pakistans largest Bank according to the market share which is 18% in 2011. Its assets are worth of PKR 605 billion in the same year. Its network is wised consisting of 1,221 branches around all over the Pakistan including eight Islamic banking branches, 689 ATMs with a market of 200 million. The Bank is also doing its operations in SriLanka, Bahrain ad Dubai, UAE. MCB Also incorporates an Asset Management Company known as MCB asset Management Company in 2005. The bank also establishes a private company in Hong Kong which is the subsidiary of MCB with the partnership of Standard Chartered Bank. MCB is growing very quickly specially in Pakistan by setting high performance standards and innovativeness in their product and services. Bank is also leading in the technology and providing its customers best technical services as compare to all competitor banks. Its extensive network of branches helps its customers to avail best services of the customer. Fully Owned Subsidiaries of MCB include : 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..MCB reported net profit of PKR 15.5 billion or approximately US$183 million in 2009 and generated a return on average equity of 27.35% and a return on assets of 3.25%. The Banks asset quality is strong with a gross NPL ratio of 8.62%.Vision Statement

To be the leading financial services provider, partnering with our customers for a more prosperous and secure future.

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 with confidence in us.

Organizational Structure.

External Environment of MCB:

Products and Services:

FULL DAY BANKING:To satisfy the customers banking needs at all MCB Full Day Banking branches across the country enjoy the convenience of extended banking hours 9 to 5, even on Saturdays. MCB now serve the wide range of services throughout the day. 365 DEPOSIT ACCOUNTS:365 deposit accounts is an account for the customers with substantial balances, offering profit on daily product basis with the facility of unlimited withdrawals. MCB LOCKERS: MCB provides the lockers for the customers to protect the valuables documents and other things. Lockers of different capacities are available nationwide. MCB ISLAMIC BANKING:MCB Islamic banking provides Riba Free and Shariah Complaint Solutions to various customer segments in a growing number of cities. With the help of Shariah Specialists, Lawyers and professional Commercial Bankers, MCB have the best solutions to cater to customers needs the Islamic way. MCB ENHANCED SAVING ACCOUNT:MCB Enhanced Savings Account is meant for small-savers who are looking for higher returns on their savings. CALSSIC AND GOLD CREDIT CARDS:A suit of classic and Gold Credit Cards are focusing primarily on providing superior services, convenience, safety, shopping pleasure and security that is giving a different feel to the world of Credit Cards through innovative features. These include comprehensive insurance plans, installment plans, reward points, upfront loyalties and much more. MCB MOBILE BANKING:Banking at customers finger tips. You can message any time or from anywhere to get information regarding balance and statements. Cash withdrawal, balance inquiry and unlimited shopping can be done by MCB mobile banking. CORPORATE FINANCING:Providing access to diversified financing options, including working capital loans, term loans, trade finance services and investment banking. MCB SABZAZAAR:MCB Sabzazar is an agricultural financing scheme for farmers that offer financing plans. MCB Shadabi Plan for short-term financial needs and MCB khushali Plan for long-term financial needs. Other schemes are tractor finance scheme, Baghbani scheme, Growers finance, Dairy and MeatPlan, Murghabi scheme, Aabiari scheme, and Mahigeri scheme.

Corporate Banking WORKING CAPITAL LOANS:Based on the customer's specific needs, the Corporate Bank offers a number of different working capital financing facilities including Running Finance Cash Finance Export Refinance Pre-shipment and Post- shipment Tailor- made solutions are developed keeping in view the unique requirements of your business. TERM LOANS:Individual can gain and benefit the most through MCB Consumer Banking. In MCB you get friendly, efficient and attentive personalized banking services - a unique banking relationship experienced by each MCB client.

INVESTMENT BANKING:Our Investment Banking Team has emerged as a leading player in Pakistan's Investment Banking arena. The Team handles advisory, corporate finance and capital markets related transactions. Within these areas, the team has developed expertise in: CASH MANAGEMENT:Our network of over 900 branches in Pakistan enables us to collect and disburse payments efficiently with our cash management services. This also enables us to offer you a choice of paper based or electronic fund transfer solutions including collection amounts, cross branch on- line transactions etc MCB PERSONAL LOANS:MCB Personal loan is a simply a clean cash facility extended for personal use. It offers a fixed installment loan that provides the access to cash instantly without any collateral. Financing available is up to 5 years for amount up to Rs. 1 million.

Personal Banking ONLINE SERVICES:One of the largest networks of over 700 online branches in the country and are growing with the passage of time. Providing customers with 24/7 real time online transaction facilities. MCB ATM 24 HOUR CASH:MCB ATM Smart Card is accepted at over 4,500 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 550 MCB ATMs in the country.Get 24-hour convenience of cash withdrawal, mini-statement, utility bill payment, funds transfer services and much more. Welcome to a world of convenience with the MCB ATM Smart Card. MCB ATM Regular Card: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.

MCB VIRTUAL BANKING:MCB Virtual Internet Banking offers you the convenience to manage and control your banking and finances; when you want and where you want. 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, Mobil ink, Supernet, IESCO, HESCO,and Ufone. So, save your precious time by avoiding long queues and pay your bills through MCB Easy Bill Pay.

MCB Smart Card or MCB ATM Card Holder can easily pay their bills or re-charge their prepaid mobile phone account through the following convenient options of MCB easy bill pay. MCB Car4U:MCB CAR4U gets you not only a car of your own choice but leads you to the best in life. It is affordable with competitive mark-up, flexible conditions, easy processing and above all, no hidden costs. "Kahin Na Kahin Tau Hai1 Car 4 You". Smart card / DEBIT CARDS:

MCB now brings you MCB Smartcard -a secure and convenient instrument of payment with unmatched functionalities. It provides 24-hour direct access to your bank account.The convenience and flexibility of MCB Smartcard will help you live a smarter life. It not only helps you manage your expenses, but also eliminates undue interest on your day to day credit card transactions. Your balance is always within your reach and you spend accordingly. MCB VISA:MCB Visa is not just another card in your wallet. It not only provides the conventional credit card services in a manner that is superior in comparison, but goes an extra mile.

Personal And Corporate Banking CURRENT ACCOUNTDiscover the quick, easy, and convenient way to manage and use your money with an MCB Current Account. SAVINGS ACCOUNT:MCB Savings Account offers you one of the most suitable ways to manage your hard-earned money. So start saving and earning profit today. BASIC BANKING ACCOUNT:Look after your money the simple way, with MCB Basic Banking Account.

FOREIGN CURRENCY ACCOUNT:Enjoy the confidence of operating an international account, locally. MCB Foreign Currency Account offers you the option of earning attractive returns on your Foreign Currency Investment. SMART DOLLAR ACCOUNT:Discover a sensible solution that helps make more of your dollar savings. MCB Smart Dollar Account is a sensible way to maintain or grow your US Dollar deposit across USD Current, Savings or Term Deposits. BUSINESS ACCOUNT:MCB Business Account lets you build your business through the accrued savings from discounted transaction fees, and more. SAVINGS XTRA:Grow with MCB Xtra by saving more and earning greater profit. MCB Savings Xtra Account offers you a wide range of attractive profit rates. BancAsssurance:Your policy will be selected from the most reliable insurance companies. You will feel confident that your policy has already passed MCBs strict standards for selection unparalleled protection. Its products are: Dream wedding Capital Sure Edu-care Life partner

Competition:

The transition period is having a positive impact on commercial banks. Muslim Commercial Bank (MCB) seems to be one of the banks capable of taking advantage of these dynamics. MCB is the largest private bank and third largest commercial bank in Pakistan. They had been improving over the last two years so much.The Bank accounts for 10 per cent of total assets, 10 per cent of deposits and 11 per cent of loans in the banking sector. It enjoys an competitive edge over smaller banks due to advantage of much lower cost of funds and higher capital base. MCB has CHANGED management restructuring in the past three years. MCB is now in a position to have greater control over administrative expenses. Right sizing of staff and closure of loss making branches will result in significant cost savings. MCB has plans to have greater focus on consumer banking. It is probably one of the first local banks to extensively explore the opportunities in this area.MCB has the largest ATM network in Pakistan. It has also launched an innovative nationwide service called MCB Switch whereby any bank in Pakistan will be able to utilize Bank's ATM network. All MCB Switch members will also be able to use ATMs worldwide through Master Card's International 'clients' network; MCB seems to be in an increasingly sound financial position. The banking competition is very stiff in market now days. To target top client is the most important thing to do in banking and to target these clients you have to have a strong relation with them and facing competition with many other banks like Al-falah Faysal etc

Internal Environment:SWOT AnalysisStrengths: One of the major strengths of MCB is that it has very stable deposit base. MCB is largest private bank in Pakistan with more than 1000 branches domestic (including 8 Islamic branches and over 550 ATM's) and 5 foreign branches. The bank enjoys competitive advantage and competitive profitability over other banks in Pakistan. MCB has the accounts of big organizations like OGDCL, PTCL, EFU, PTC etc. MCB is Successive and Market oriented. MCB investing huge sums on HR development and training. Customer default rate is lower as compared to other banks. MCB has the largest ATM network in the country. Meeting the challenges of latest Technology by introducing Smart card remit express, mobile banking etc. 24 hours cash access through ATM. Easy access to the customers at their residential localities through a large number of branches. Best and optional policies and attractive compensation packages, for employees, which has really improved their commitment, dedication and hard work, towards the accomplishment of banks objectives. Conservative financial institution operated by expatriate executives. Offers a wide variety of services to its customers and has a customer base of 4 million The bank has efficient IT infrastructure and network of on line branches.

Weaknesses: Decision making process is very slow. It is not having greater no. of branches abroad. Though ATM network is the largest in Pakistan, still some potential areas dont have the ATM. Some management positrons needed are not professional. Low motivational level; non-aggressive marketing. Employees dissatisfaction due to ill treatment and improper reward system. Favoritism and Nepotism in recruitment. Interest rate is very higher. A sense Insecurity of jobs, with the downsizing, among the employees is found. Financial weaknesses i.e. excess operating cost. No training for advances in-charge. Not many advances to agriculture sector and small and medium enterprises. Political interference

Opportunities:

Leasing sector is growing in Pakistan for the last few years which provide opportunity to MCB to go ahead in this area as well. MCB is providing Consumer Finances at comparatively lower rates which paves a way to grab more customers Financing to small/medium cottage industries will definitely increase its advances and profitability as well. Islamic Trading Based Banking can enhance the business of the bank. Targeting of Hundi/Hawalla through networking and IT potential of MCB. Ongoing development on energy sector of the country. Due to largest ATM network, MCB can expand its 24 hours cash facilities to the far off cities of the growing market demand. Increasing focus/target on different types of customers, MCB can open women branches, especially in those areas where women class want to get involved but couldnt due to environmental restriction. Growing policies of government on business and commerce sector provides MCB and opportunity to efficiently meet with the business peoples requirement of instant cash and financing facilities. New schemes can be introduced to finance commodity operations. The formation of new and energetic marketing teams can increase the disbursement of loans and new customers can be searched out. Low exposure to consumer banking providing opportunity to explore the segment.Threats: Other private commercial bank with sound profitability is also a threat to MCB e.g. UBL, Alfalah, HBL etc. For the last of many years, Pakistan is facing economic and political instability which is a big threat. Foreign banks are flourishing in field of consumer financing. People dont prefer banking culture.They mostly prefer cash transactions. Increasing foreign banks in the country. Privatization of other domestic banks has also increased their services. Highly specialized and attractive services provided by foreign banks to their customers. Inconsistency in government policies regarding to business and economic sector. Growing global technological advancement. Slower economic growth rate of the country. Return on deposits is very low. Inflation rate is high. GNP and GDP rates are low and so the savings are low. Decline in private and public sector credit due to tight monetary policy. Participation of foreign banks in local market that can hurt the market share. Mergers & acquisition activities (M&A) consolidating the banking sector and MCB is also vulnerable to it.

Human Resource Management:

Activities performed by HR department: Establishing Policies for Human Resource Human resource planning and forecasting Aligning employees work with the banks goals. Performing Job analysis and developing JD and JS. Recruitment. Orientation and Training. Performance appraisal Compensation management Setting pay plans Employee benefits Reward and Recognition programs Establishing and maintaining workforce relationship Communicating organizational goals and strategiesHR Department Hierarchy:

Strategic Human Resource Management Branch HR manager have to be very conscious about the employees performance. HR manager strictly need to Job AnalysisJob analysis is every important as job analysis information is used in Selecting and recruiting, compensation, performance appraisal, training and in resolving other issues which MCB faces. They mostly collect job analysis information through observation, questionnaire and interviews. These entire tasks are performed by HR manager assistants. Recruitment and Selection Procedure:The recruitment process followed by MCB HR department is clearly understandable by the following diagram.

The procedure starts with the requirement of job, they analyze and identify candidates of their interest that full fill their requirements specified by JD & JS. Then the pre-screening process undergoes. Screening focuses on creating a qualified pool of candidates to share with the hiring manager. Common activities include resume/application reviews for select qualifications, supplemental questionnaires, and formal testing. After pre-screening and short listing, they call candidates for test and interview. A panel of interviewer conduct interview of the candidates. The interview content is very complex and covering all factors that they need to evaluate before hiring a person for job. Like they identify candidate's behavioral aspects, e.g; if he/she face a situation where he/she have to deal with the annoyed customers? what was his/her reaction? etc. Similarly they took cognitive test to identify person's intelligence level, knowledge regarding banking and achievements since yet etc. Then they did the back ground investigation and physical exams.For executives and higher level posts, 90% of recruitments were made from leadings and foreign banks and the other lower levels posts were filled with professionally Qualified candidates i.e. MBAs , M. Coms, Computer Programming etc from well recognized National and international universities. Sources include internal hiring as well as external hiring. External hiring mostly done in case of new or low or middle level positions in banks. The job posting mostly done by using the sources like newspaper, website, social media and magazine of Lahore chamber of Commerce. They also engage with placement agencies sometimes for the recruitment and pay them for this task. The selected candidates come from this source are no further interviewed from the HR department of the Bank. While Internal hiring mostly done on the basis of performance and promotion if there a higher post get need to fill, In this case, instead of hiring a new person, they prefer to hire existing employee who know the bank's culture and everything about it and have experience with the bank.

Orientation and Training Development:

After selection, orientation is conducted for selected employees where all new recruits are provided with the background information about MCB. Mostly in orientation, they provide information about employee's benefits, personnel policies. The daily routine, organization and operations and Safety measures and regulations. These are the basic info that provided to new recruits in the time of orientation. After orientation, new recruits do On-the-Job Training (OJT). Bank assign them task under coaching of professionals who trained them and assign task to them on the daily basis. Managerial level trainees work direct with the senior management or with who he/she is going to replace. For existing employees, the training programs are offered for different purposes. For example, in Feb 2014, relation building workshop has been organized for the every employee in the bank and provide certificate to them as well. Old employees are also trained through this method like when some new innovation is introduced, old employees are trained in order to learn and handle that new innovation. All senior managers have been trained to operate Misys Software (Automation of service provision and book management) in 2008 and relation building workshop in 2014. Job rotation is also done at the managerial level in order to keep them motivated and allow them opportunities to learn and experience more and diversified things. It is obligatory for each employee of the Bank to attend at least one training course (of a minimum duration of one full day) in a calendar year. MCB uses following programs for training and development Management Trainee Management associate Cash officers Internships

Performance Appraisals:

HR manager set departmental goals with the help of departments heads. Supervisory staff is evaluated by the Branch Manager and Units Heads directly. When observed an employees performance, supervisor usually makes a judgment about whether that performance is acceptable or not. The process of appraisal process is modified, improved and upgraded with the passage of time with the banks requirements. HR department notifies all units of the Bank of the PA system and procedure currently in use. Branches are notified deadlines for goal setting, form filling, monitoring and final appraisals. The increments in sales are based on performance evaluation of employees annually. Grade promotions are based on: Availability of higher position Employees ability to fill those positions Sustain high performance during last few yearsThis decision has been taken in second quarter of each year.

Performance appraisal tool that is used by MCB is ACR (Absolute Category Rating) which contain information such like the employee background, nature of his work, performance of employee, performance rating as compare to evaluation factors and recommendations. A branch manager writes the ACRs of employees in his branch, regional manager writes the ACRs for the various branch managers working under him. These ACRs are sent to the Gm office from where they are forwarded to the human resource division.

Compensation Management:

MCB awards their employees compensation in return of their tough mental labor. Apart from basic salaries they are offered many other benefits like:

Utility Allowance, Medical Allowance Overtime Allowance Education Allowance House Rent Allowance Bonuses Cash Prizes House Building Loans Non Interest Loans

Employees, who pass IBP part 1 exam in first attempt, are offered Rs.60, 000 cash prize or two increments. Employees those who pass part 2 exams are offered Rs.100, 000 or three increments and those who pass both examinations within one year of training are promoted to OG 2, and those who get the gold medal in the exam, are promoted to OPERATING GRANT.

Health and Safety Conditions:

Employees are specially get training regarding health and safety conditions in which instructor provides them all kind of information and tips to get healthy. They also informed about emergency issues and their solutions. Fire extinguishers and other emergency tools are ready available at every branch.

Career Management:The career of employees developed after working Pakistans best bank. In MCB, employees get trained very well and bank compensate them with educational allowances and arranging workshops and training programs for employees which made the employee comparable more professional, knowledgeable and experienced than all others. One of HRD's key responsibilities is to encourage growth and career development of employees by coaching and by helping employees achieve their personal goals in our organization and beyond that.

Flaws in HR practices:

As such our study about MCBs HR department practices, there are not such kind of flaws that important or highly concerned. As they are having best HR expertise and using best HR practices, strategies and tools in order to utilize best their human resources to achieve goals. The one problem that was high in past few years is the turnover rate of employees after getting experience from the bank. Due to growth in the banking sector, those employees get jobs in other banks. So this is the major problem for MCB as per their practices.

Recommendations:MCB is also did work to reduce turnover by doing some strategies. They increase the incentive and benefits plan for employees as well as providing them solution of their problems. They started to involving employees into different events and activities. Multinational banks are moving rapidly to our banking industry and if MCB will not adopt new procedures, the productivity can suffer. The solution that we are proposing is to use the job-rotation technique for employees so that they work in new environment and learn and experience more and diversified. 26