Report on MCB Khwaza Khela Branch

7/30/2019 Report on MCB Khwaza Khela Branch

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Internship Report on Muslim Commercial Bank. (Khwaza khela Branch Swat)

CHAPTER 1

INTRODUCTION OF STUDY

1.1 BACKGROUND OF THE STUDY

It is a common practice at universities during the completion of the

master and bachelor programs to attain practical experience in different

fields. Government college of Management sciences Peshawar requires

students to undergo an eight weeks internship program. The selection

of the firm is based on the choice of the student. The institute requires

an internship report based on the theoretical and practical learning of

the student. The concern of this report is to study and analyze the

performance of Muslim Commercial Bank Ltd (MCB) in the banking

industry of Pakistan.

Commercial banks are considered to be more competent and

productive as they mobilize investment and provide better customer

services. Muslim Commercial Bank is considered to be one of the

prominent banks as far as its reputation and progress is concerned. Its

name stands for a sign of trust and reputation.

1.2 PURPOSE OF STUDY

The purpose of the report has been to review and analyze the functions

performed by the Operation Department of MCB. The report also

explores the strengths and weaknesses of the MCB and also gives

recommendation where any improvement can be possible.

1.3 SCOPE OF WORK

This report is concerned with the performance of the MCB Khwaza

khela Branch. It enlightens the functions of Operation Department at

the Khwaza khela branch however the financial analysis is based on

the national operations of the bank

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1.4 METHODOLOGY OF THE REPORT

The methodology for the collection of information and data was based

on the two primary modes of data.

Sources of Primary data:

o Personal Observation.

o Interviews of Personnel.

Sources of Secondary data:

o

Previous internship Reports.o Brochures.

o Annual Report.

o Books.

o Web site.

1.5 SCHEME OF THE REPORT

The report is arranged in the following sequence.

PART I

This Part has one chapter.

Chapter 1:

This is an introductory chapter which describes the background,

purpose, scope, methodology and scheme of the report.

PART II

This Part includes the review of Muslim Commercial Bank. This Part

is comprised of three chapters.

Chapter 2:

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This chapter encompasses a brief history of banking and over all

banking sector in Pakistan. It also tells about the history of MCB, its

vision and mission statement and the role of MCB in Pakistan.

Chapter 3:

This chapter goes in detail study about the policies adopted at the

branch, the organizational structure, different types of services offered

by the branch to its customers.

Chapter 4:

This chapter is the lengthiest chapter of the report. It precisely tells

about the several departments working at MCB Khwaza khela Branch

and their functions. The departments discussed are the Operation

Department, Clearing Department, Remittance Department, Credit

Department, Computer Department, Cash Department and Customer

Services Department. In addition to these departments the different

types of account and the procedure of the accounts have been

discussed.

PART III

This Part also has two chapters and it is about the financial and SWOT

analysis of MCB.

Chapter 5:

This chapter makes the financial analysis of MCB. Financial analysis

is made on the national performance of the bank.

Chapter 6:This chapter contains the SWOT Analysis of MCB.

PART IV

This Part contains one chapter.

Chapter 7:

This chapter gives the Finding and recommendations based on the

analysis of the organization.

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PART V

This Part contains the conclusive chapter of the report.

Chapter 8:

This chapter is about the implementation plan that has been advised for

MCB Khwaza khela Branch on the basis of the room of improvements.

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CHAPTER 2

INTRODUCTION OF

MUSLIM COMMERCIAL BANK

2.1 HISTORY OF BANKING

There are various views about the origin of the word Bank. One

view is that it is derived from an Italian word banque which means

bench the other point of view is that it has originated from the German

word bancus which means a joint stock firm.

As regards the growth of modern commercial bank, it can be traced to

as early as 600BC, G Crowther in his famous book, an outline of

Money has traced the history of modern English commercial banking.

According to him, the present day banker has three ancestors; (1) the

merchants (2) the goldsmiths and (3) the money lenders.

The Merchants.

The earliest stage in the growth of banking can be traced to the

working of merchants. These merchants were traders in commodities.

The trading activities were carried on by them from one place to

another, it was risky for the traders to carry metallic money with

themselves for payment. The traders with high reputation began to

issue receipt which were accepted as titles of money. These receipt or

letters of transfers also called hundi in indo Sub Continent were the

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first mode of payments. The merchant banking thus forms the earliest

stage in the evaluation of modern banking

The Goldsmiths.

The second stage in the growth of banking is normally traced to earlier

goldsmiths. These goldsmiths also called Seths in India used to

receive gold and silver for sage custody. The goldsmiths began to issue

receipts for the metallic money (gold and silver) kept with them. These

receipt with the passage of time a medium of exchange and a mean of

payment. The goldsmiths, thus can rightly be termed as the fore-

runners of the modern bank note.

The Money Lenders.

The third stage in the development of banking arose when the

goldsmiths became the money lenders. By experience the goldsmiths

(who were called money lenders) came to know that they could keep a

small proportion of the total deposits for meeting the demand of

customers of cash and the rest they could easily lend. They allowed the

depositors to drew over and above the money actually standing to their

credit.

2.2 DEVELOPMENT OF MODERN BANKING

It is said that the first bank was established in Barcelona in Spain.

Another statement tells that Venice and Genoa was the hub of

financial transactions and the first bank was founded there in 14th

century. The first public bank that was formed was in Germany in later

part of the time.

The first central bank was formed in Geneva in 1578. bank of England

was established in 1694. the modern commercial banking system

actually developed in the nineteenth century.

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In 1918 eleven clearing banks of today came into being. The effect of

this historical development of banking in England has been fairly wide.

Initially the emergence of a small number of banks with wide network

of branches. Second, increase in the popularity of bank accounts and a

large-scale use of checques.

In 1946, the labor government nationalized the bank of England and

transferred the existing stock to the nominee of British treasury. In

1955, the British Banks made a departure from traditional banking by

undertaking hire-purchase finance for companies buying industrial

plants and machinery and took interest on hire-purchase finance.

2.3 BANKING IN PAKISTAN

Before the partition of India and Pakistan in 1947, branches of British

banks dominated banking in sub-continent. The first domestic banking

institutions emerged in the 1940, immediately after Pakistan's

independence from Britain. These institutions include the Australasia

Bank (today, Allied Bank Limited), Habib Bank Limited, Muslim

Commercial Bank, and the National Bank of Pakistan (NBP). The NBP

was wholly owned by the government but prominent merchant families

established the other three. On August 14, 1947 by an order called

Monetary system and reserve order 1947 the main provisions of the

Monetary system and reserve order 1947 were as follows

(i) The reserve bank of India would be the sole currency note

issuing authority in Pakistan till September 30, 1948.

(ii) The Indian currency notes will remain legal tender in both

Pakistan and India until September, 30, 1948.

(iii) The reserve bank of India would transfer the assets of value

equal to Pakistani currency to the government of Pakistan

after September,30 1948.

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(iv) The government of Pakistan would also issue coins in the

country after September 30, 1948. The coins issued by the

government of India would remain legal tender in Pakistan

for at least one year form the date of issue of Pakistani

coins.

The Reserve bank of India would perform the full functions of central

bank in Pakistan up to September 30, 1948.On 1st July 1948, the SBP

was formed. From 1960 to 1970, a number of specialized development

finance institutions (DFIs) such as Industrial Development Bank of

Pakistan and the Agricultural Bank emerged. These DFIs were either

controlled directly by the state or through the SBP, and were intended

to concentrate on lending to long-term projects in specific priority

sectors.

2.4 HISTORY OF MUSLIM COMMERCIAL BANK

Muslim Commercial Bank (MCB) unfolds 62 years of growth. MCB is

not an overnight success story. The bank started corporate life in

Calcutta on July 9, 1947. After the partition of the Indo-Pak Sub-

continent, the bank moved to Dhaka 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 62-years legacy of trust in its customers and the

citizens of Pakistan.

2.4.1 Nationalization

In 1974 the Government felt a harsh need of nationalization of banks

and financial institutions and nationalization act was introduced. Under

this act MCB was the first bank, which was nationalized. In the same

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year Premier Bank was merged with MCB and it started work as a

government bank. This nationalization affected the bank badly.

2.4.2 Privatization

All the financial institutions and banks did not show good performance

after nationalization, and again the government felt a big need to

privatize these banks. In 1991 the bank was privatize during Nawaz

Sharifs government. The government of Pakistan transferred the

management of the bank to National group, one of the leading groups

in the field of business. They were sold 25% shares. Now this group is

having 50% of the total shares. Government is having 25% shares and

general public is also having the same shares.

2.5 MCB Today.

Today MCB is one of the leading banks of Pakistan with a deposit base

of about Rs. 280 billions and total assets of around Rs. 443,616

millions. The Bank has a customer base of approximately 4 million and

a nationwide distribution network of 1,047 branches, including 8

Islamic banking branches and 7 overseas branches , and over 300

ATMs, and having 10,160 own permanent employees.

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.

2.6 VISION AND MISSION STATEMENT OF

MUSLIM COMMERCIAL BANK.

VISION: To be the leading financial services provider, partnering with

our customers for a more prosperous and secure future.

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MISSION: 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.

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References

Nasir, Saeed M. (2010)Money Banking & finance. Lahore:

Khan Faizan,Report on BoK, MBA (F), 2006-08(A/N)

Balance Sheet of MCB (Dec 31, 2011)

(On-line) Available. http://WWW.MCB.Com .

Ahmad Zeeshan ,Report On MCB, MBA (F), Session 2006-2011.

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CHAPTER 3

OVERVIEW OF MCB KHWAZA KHELA

BRANCH

The MCB Khwaza khela Branch is headed by the manager. He is the

responsible person for any activity that is happening inside the

premises of the branch. He looks over different issues in the branch.

There is also sub manager knows as Operation Manager. The operation

manager is responsible for the operation side of the branch. There are

also many officers who include the remittances, clearing, on-line, cash

department and credit officer, but all the activities of the officers are

linked with the operation manager except the credit officer.

3.1 PROCESS FLOW

The MCB Khwaza khela branch is headed by the Branch Manager.

Several staff officers are delegated different responsibilities. The

organizational structure is a combination of line and staff hierarchy.

The branch manager is assisted by the Manager Operation. Several

other officers like the head of cash department and remittance

department coordinate with the Manager Operation.

Credit department is not as busier as the remittance and other

departments while the credit officer does not assist the manager

operation. Though the branch does not deal in letter of credits and

foreign exchange, but it is over burden. There are not routine

transactions in the credit department therefore only one officer is

responsible for the department. While operation department is over

burden, that is why several other workers from remittance department

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or contract workers assist the department. Internees are often assigned

with the operation for help.

The customer service department is responsible for assistance of

customer related issues. The officer of the department is known as

Customer Service Officer (CSO). The officer deals and helps the

account holder as well as the walk in customers

The details of all the departments are given in a later chapter of the

report.

3.2 ORGANIZATIONAL STRUCTURE at Head office

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Board Of

Directors

Computer

DivisionMarketing Division H R M Division Legal Affair Division

Secretary

Division Heads

Inspection andAudit Division

Treasury Division

Credit ManagementDivision

Training &

Research DivisionAccount Division

Business

Development

DivisionR&D Division

President & CEO

R T C Division


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G. M(Regional Head)

R M PeshawarR M Mardan R M Kohat

Credit In

charge

Financial

Controller

Internal Control

Unit(ICU)

Cash Mgt

Officer

Staff Officer

Quality

Service

Assurance(Q S A)


STRUCTURE AT THE CIRCLE OFFICE

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STRUCTURE AT MCB KHWAZA KHELA BRANCH

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3.3 SERVICES OFFERED AT THE MCB

Muslim Commercial Bank offers different kind of services to its

customers. The Bank charges its customer according to the schedule of

charges. However, it also offers some complimentary services for free.

Some of the services, offered at MCB Khwaza khela Branch are as

follows:

1. Credit Cards

2. ATM Cards.

3. Lockers

3.3.1 credit cards

MCB provides two kinds of Credit Cards. The first one is known as

Visa Cards and the second one is called Master Card.

3.3.1.1 MCB VISA Card

Whenever customer needs cash, he/she can use MCB VISA with a PIN

(Personal identification Number) at ATMs to withdraw an amount up

to 50% of his available credit limit. MCB VISA card is not just another

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Branch Manager

Mr. Tasbih Ullah

Khan

Manager Operation

Sajid

Credit Officer

Qasim Faroqi

Clearing Officer Remittances Officer Computer Department

Cash DepartmentCustomer Services

Officer


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credit card. It not only provides conventional credit card services in a

manner that is superior in comparison, but goes an extra mile. MCB

VISA is accepted at all ATMs across Pakistan as at 27 million

acceptance locations worldwide. MCB VISA is a name synonymous

with unique, innovative and state of the art services making it the most

secure affordable and rewarding card. MCB offers two types of VISA

card.

a. Classic Card

The joining fee of classic card is Rs. 250 and annual fee is 250 rupees.

The supplementary annual fee is 250 rupees. Here it should be noted

that to avail the facility of credit card the person must have an account

in the banks branch.

b. Gold Card

The joining fee of Gold card is 350 rupees; while the annual fee is 350

rupees and the supplementary annual fee are 350 rupees.

Monthly payments are made as follows:

For paying cash over the counter at any MCB Branch, the bank

will charge Rs.100 on cash payment.

Sending a checques/pay order/draft in the name of MCB,

VISA. Bank will charge Rs.250 on all checques that are

returned unpaid.

Telegraphic Transfer: Payment is credited to the customers

account when bank receives the funds.

Documents Required for Credit Card:

Copy of National Identity Card

Personal bank statement for last 6 months -

If Partnership Firm, Partnership Deed/Bank letter

If Proprietorship, Bank Letter

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For salaried people, Salary Slip should be attached.

3.3.1.2 MCB MASTER CARD.

MCB master card is simply a credit facility to its clients. The card

holders have a facility to shop to a particular limit from over 12

millions merchants welcoming the card with in the country and

globally as well. The card was introduced in the year 1995, and now

offered more flexible services to its holders. The main feature of the

card is as under.

MCB is the 1st bank in Pakistan introduced enhanced feathers

of photograph on the card limiting fraud.

It has over 3000 outlets in Pakistan.

Provides 24 hours customers services.

Cash advance facilities are available in Pakistan and world

wide.

3.3.2 ATM Cards

ATM stands for Automated Teller Machine. ATM cards are issued

on the request of the customer and are only for Pak Rupees account

holders. ATM card provides the customers with round the clock access

to their accounts even after the banking hours. MCB provides the

following types of ATM cards. Here it should be noted that to avail the

facility of ATM card the person must have account and balance in

account.

Issuance of ATM Card:

All activities related to ATM cards are performed by Operation

department. The operation Manager collects the request for ATM cards

by getting the form filled by the customer. A file is preserved to record

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all the ATM cards applications. A list is then made of these requests

and is sent to the Karachi Head Office (card division). When the bank

receives the cards, the concerned officer arranges them in alphabetical

order of customers names. A file is maintained to record the names

and account numbers of the customers whose cards have been received

by the bank. Customers are called at their phone numbers then to

collect their cards or they are earlier at the time of filling application

notified about the collection date. The customer can collect their cards

from the bank when they are ready. It should be noted that the card is

kept in the custody of operation manager while the PIN code is kept in

the custody of supervisor of the branch.

a. Classic Card

The joining fee of classic card is Rs. 250 and annual fee is 250 rupees.

The supplementary annual fee is 250 rupees. The maximum limit of

withdrawal on the classic card is Rs. 10000. In 24 hours.

b. Gold Card

The joining fee of Gold card is 350 rupees; while the annual fee is 350

rupees and the supplementary annual fee are 350 rupees. The

maximum limit of withdrawal on the gold card is Rs. 25000 in 24

hours.

3.3.2.1 Functions of ATM card:ATM card has following functions:

Cash Withdrawal.

It can be used to check the account balance.

Transfer balance from one account to another account.

Withdrawals through credit cards.

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3.4 LOCKER SERVICE

At the MCB Khwaza khela branch, safe keeping service is also

provided to customers. When a customer rent locker, the relation

between the Bank and the Renter is that of a Licensor and Licensee.

To acquire a locker,

He/ she must be an account holder at the Bank.

The customer must attach a copy of ID card with the locker

rental form.

3.4.1 Locker Rent

The rent of locker is determined by the Bank. New charges for

year 2012 are:

Small size lockers are rented for Rs.3,500 p.a.

Medium size locker is rented for Rs. 4200. p.a

Large lockers are rented for Rs.5000. p.a

Locker purchase fee is Rs.2000

If key is lost by the customer or for any other damage to the

locker, Bank charge Rs.5000

One locker is rented to one person only.

3.4.2 Rules and Regulations

Lockers are rented for a period of one year in the first instance

and are automatically renewed from year to year.

Lockers may be hired in two or more names but the Renter

must give explicit instructions to Bank for mode of operation.

A Renter may at his own risk appoint another person to have

access to his locker by completing the requisite authority form

available on application at the Bank.

Letters, telegrams, and telephonic messages implying to

authorize a third party access to the lockers are not accepted.

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The Renter can not use Locker for the deposit of any liquid or

anything of explosive, dangerous or offensive nature.

In the event of non-payment of rent when due, the Renter

forfeits all rights to the use of the locker.

If the key of the locker is lost by the Renter, the Bank must be

notified without delay. In such an event any expenses to which

the Bank may be put in breaking open the locker and

substituting a fresh lock and key will be hand over to the

Renter.

The Bank has a lien on the contents of the locker for all rent

due form the renter to the Bank and also for all expenses to

which the Bank may be put in breaking open the locker and

substituting a fresh lock and key. Bank is entitled to sell the

contents of the locker so to recover such expenses.

Bank has the authority to Debit the account that Renter may

have with the bank, without previous reference to Renter, all

dues recoverable from him in respect of the locker.

3.4.3 Termination of Rental

In order to terminate the rental, notice must be given one month prior

to the expiry date of the rental. The locker with its key must be

surrendered to the Bank before closing hours of the bank on the expiry

date of the rental.

3.4.4 Death of Renter

In the event of the death of a sole Renter of a locker or of the last

surviving Joint Renter of a locker, the Bank may at its option permit

the legal representative of the deceased sole Renter, to inspect the

contents of the locker. On the production of Probate letter of

Administration, the Executor or Administration named, have power to

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deal with the contents of the locker and is deemed to be the Renter of

such locker in the place of the original Renter.

References:

Brochures of MCB Visa Card

Sajjad Muhammad,Report of MCB, MBA (F), 2006-08

Gul, Naveed, S.Report on MCB, MBA (F), 2010-08

Schedule of Bank Charges 2010-11.

Interview with the Manager Operation.

Locker opening form.

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CHAPTER 4

PROFILE OF DIFFERENT DEPARTMENTS

Every organization is divided into definite departments. Each

department performs different kind of job and requires staff with

specialized skill to handle the particular job. This increases the

efficiency of workers and makes the job of the employees easier.

There are several aspects on which departmentalization in an

organization can be based. The division can be made on the basis of

functions, product, customers or geographical location.

The Khwaza khela Branch of MCB is comprised of several

departments. The division is made on the based of functions and job

they perform. Hence it can be concluded that MCB has adapted to the

policy of functional departmentalization.

The main departments at the MCB Khwaza khela Branch are

mentioned below, also included is the detailed study at the specific

function these departments perform.

(1) Operation Department.

(2) Clearing Department.

(3) Remittance Department.

(4) Credit Department.

(5) Computer Department.(6) Cash Department.

(7) Customer Services Department (CS)

4.1 OPERATION DEPARTMENT.

The operation department is one of the most important departments at

any commercial bank. This department is responsible for the entire

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operation and function of the branch. This department is controlled by

the operation manager, who is senior and experienced employees of

the bank, for the post of operation manager the employee should be at

least, O G I or II having service in bank of minimum 10 years. The

operation manager ensures the smooth and error free working in

branch. He/she is responsible for the rectification of the entire audit

objection imposed by the Internal Control Unit (ICU). The tasks of the

operation manager are under.

Feeding of newly opened accounts in to system

Issuance of checque book.

Custodian of security stationery.

Dealing with the claim of the customers.

Issuance of PIN code of ATMs Card to customers.

Supervision of heavy amount transactions.

Supervising the working of the rest of the departments.

4.2 CLEARING DEPARTMENT.

Clearing system is a device that enables bankers to settle checques and

other instruments, drawn on each other. System is of immense value in

saving a lot of labor, time and expenditure there by increasing the

efficiency of the banking system.

SBP provides the services of clearing house, to all the schedule banks

in Pakistan. SBP has its branches in all big cities nationwide and

clearing in these cities is supervised by SBP. In cities with no SBP

coverage, the clearing is supervised by NBP.

Brief Working of Clearing Department

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The Checques received by a bank drawn on other banks are sorted

bank wise. A schedule is prepared for checques drawn on each bank.

The checques along with the schedule are presented in the

clearinghouse where they are delivered to the representative of the

various banks. Thus each bank receives from other banks checques

drawn upon it and delivers to other bank checques drawn upon them.

The first one is the inward clearing and the other is the outward

clearing. The net difference is settled by Dr and Cr, to their banks

account with the supervising bank.

Inward and Outward Clearing.

Checques collections for credit cards and reporting to Credit

Center.

Collections of outstation checques.

Honoring of checques, orders and drafts sent by other

branches/banks.

4.3 REMITTANCE DEPARTMENT.

This department of the commercial banks is responsible for the

issuance of Demand Draft (DD), Pay order, Telegraphic Transfer (TT),

Mail Transfer (MT).

Demand Draft is a written order issued by one branch to another

branch of the same bank to pay a certain some of money to the person

named in the instrument. Every customer whether account holder or

not can avail this facility by paying bank charges and the amount of

draft and can get the demand draft. Normally the D D is crossed at the

time of its issuance, so the payment of the instrument is paid just like

the crossed checque.

Pay order, is issued with in the city payment, or if the bank want to

make payment to any person, for this purpose pay order is issued, it

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should be noted that this instrument is drawn upon the issued branch

not on any other like demand draft.

Telegraphic Transfer, this mean of transfer of fund has diminished due

to online banking service, but still this mean of transfer of fund is used

to far-flung areas branches or where the on-line facility is not

available, here an written advise is send through FAX machine to the

respondent branch having the complete account detail of the person in

favor of whom the fund is transferred. Mail Transfer is also used to the

branches in remote area of no on-line facility, here the amount of fund

is transferred just like the T T but it is through post/ mail to the

responding branch.

4.4 CREDIT DEPARTMENT.

Lending produces the profit for a bank. It is the most important

function of a bank. It generates the banks own profits. The money that

a bank lends to someone is already somebody elses deposit. All the

banks do is pay less interest to deposit holders and earn more from

lending customer. The difference generates profit to the bank. The

credit department of the branch sanctions the following types of loans/

credit.

4.4.1 Loans

MCB advances three types of loans

a. Running Finance Facility

b. Demand Finance Facility

c. Personal Loans

4.4.1.1 Running Finance Facility

This facility is allowed to current account holders only, under this type

of loan the customer is given a limit on his account, which runs on the

debit side when he/she withdraws money. The interest is calculated

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only on the portion of money which has actually been used by the

account holder on daily basis and is payable at the end of every

quarter. This facility is allowed to the account holder for the period of

one year from the date of sanction of the loan, while it could be

renewed upon the request of the customer and also the financial

position of the account holder.

4.4.1.2 Demand Finance Facility

It is a terminating loan in which full sum of the sanctioned loan is

credited to the customers account on the day the loan is sanctioned.

The difference between the running finance and demand finance is that

in running finance the customer is given a limit and he can withdrawals

up to that limit according to his need and he can return the money

whenever he/she wish and the interest is charged on the money which

has been used actually. However, in demand finance facility, after the

loan is sanctioned and the money is withdrawals by the customer, the

customer repays the loan and the interest amount in monthly

installments. While the interest is calculated on the principal amount of

loan whether is used or not by the customer. The monthly installment

consists the portion of principal amount plus the portion of interest.

4.4.1.3 Personal Loans

MCB Personal loan provides with the financial advantages ofsufficient fund for holiday, buying a car, refurnishing house and

purchasing new T,V, they can also finance better education for

children. The client can choose tenure of one to three years for the

repayment of loan. Its distinction features includes

Bank to Bank balance transfer.

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Loan protector shield insurance coverage of balance loan and in

case of death or permanent and total disability.

Availability of early repayment option.

ELIGIBILITY FOR FINANCE FACILITY

Loan is only sanction when 100% cash back guarantee is provided to

the bank. The following types of securities are accepted for sanction of

loan.

Government Bonds Special Saving Certificate (SSC),

Defense Saving Certificate (DSC)

Cash Deposit at the same bank.

Foreign bank Guarantees.

4.5 CASH DEPARTMENT

Cash Department deals in receive and Payment of cash. At the cash

counter, customers deposit the money and withdrawals cash. The

money is deposited either in account or may be for the payment of

credit card bill etc while bank makes payments only against the

checques. Checques are received and presented for transfer or

collection purpose. The employees at cash department also handle the

utility bills and credit Card payments.

4.5.1 Cash Collection

Cash collection is accompanied by cash deposit slip. The slip contains

the account number; title of account and denomination of cash

deposited both in words and in figures followed by the signature of the

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depositor. The received cash is counted and is verified with the deposit

slip. Entries for cash deposits are recorded before handling over

receipts to the customer. Customers copy of the deposit slip is handed

over to the depositor. Before cash deposit slip is released, it is matched

and validated with the entries in the register for cash collection.

4.5.2 Cash Payment

Amount of payment of cash in a single transaction is fixed. Payments

beyond a certain limits are supported to be approved by an appropriate

authority. Before payment, the checques must be checked for post

dated payees name, crossing, amount both in words and in figures and

authentication of alterations. Tellers verify signatures on checques

before payment. In case of illiterate account holder the customer is

identified through the photograph available in the banks record and

thumb impression attested under the full signature of the teller who is

authorized to approve the transaction.

The money is kept in the vault which is built along with the cash

department. Cash counter is also termed as teller counter. The

Department is supervised by a Chief Teller. Every Cashier is provided

with a specific amount of money in the morning from the vault. The

cashier makes payments to the customers from that money at the end

of the day the cashiers check their balances and the remaining amounts

is placed back in the vault.

Cash handling is sensitive work. Every body at the branch is notallowed to enter the cash department premises. The names of the

authorized personnel who are allowed in cash department are

mentioned on the entrance door of the cash department. Internees are

not allowed to enter the cash department with out the proper

permission from the branch manager or chief teller.

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4.6 COMPUTER DEPARTMENT

Computer department is the place where the computer Part of the bank

is located. This is a very sensitive department of the Bank and only

authorized personnel are allowed to enter this Part. The computer

department consists of the server of the branch and it regulates all the

information that is feed by employees into their computers. Back-up

for all the computer systems is maintained in this Part. Every employee

is given their personal code which they feed into the system when they

work the code is consist on the employee no and password. This code

is the identification of an employee. This code is recorded at the

computer department and it records every transaction made by any

code at any time. Other than recording every transaction the computer

department also performs the following functions.

Hardware and Software trouble shooting.

Installation of new hardware and software.

Start of day procedure and end of day procedure i.e.

downloading all the data from Karachi Head Office in the

morning and, sending all the data back at the end of the day

Keeping inventory of all the hardware installed

Contacting dealers for maintenance of computers.

Taking back-ups on daily basis.

Training computer users.

The setup of computer department includes the following functions.

Setting servers files.

Sitting communication and networking equipments.

Handling the printers setup in the branch.

Maintaining the back-up tape devices.

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In other words maintaining every technical aspect of the bank comes in

the responsibilities of the data center. Well trained personnel have been

employed to look after the operations in computer department. The

MCB Khwaza khela Branch is also assisted by the MCB Islamabad

Branch in the data center department. Highly qualified recruits from

MCB Islamabad Branch make their visits to the MCB Khwaza khela

Branch for assistance.

4.7 Customer Service Department

Customer Service Department is the department in the branch which is

directly involve in the service and care of customers. This department

consist a female officer known as Customer Service Officer (CSO);

she serves the account holders and walk in customers. The officer is

responsible to attend customers at first hand and solve their problems.

4.8 ACCOUNTS OFFERED

MCB has introduced varied type of accounts to meet different class of

customers requirement. It offers accounts in Pak Rupee only. Some of

the accounts offered at MCB Khwaza khela Branch are discussed

below.

Types of Accounts

MCB Khwaza khela Branch offers the following local currency

accounts.

(i) Current Account.

(ii) Khushali Bachat Account.

(iii) Basic Banking Account.

(iv) Smart Saving Account.

(v) P L S Saving

The salient features of the accounts are described below:

4.8.1 Current Account

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MCB current account allows customers to deposit and withdraw cash

at their own convenience. It is best suited for those customers who

make huge amount regularly transactions of money in their accounts.

The account holder will have to maintain a minimum balance of Rs.10,

000 in this account on the other hand if in any current account the

balance is goes down from this amount Rs.50 will be deducted

monthly. Bank does not pay any interest on this account. The features

promoted for this account by MCB are as follows:

Is opened from Rs.10, 000.

Non-interest bearing checking account.

No Zakat deduction as per the rules of SBP.

Standing instructions for regular payments.

Any other standing instructions.

Running finance facility/Over draft facility.

Free 24-hour balance inquiry facility on Phone.

Free 24-hour withdrawal facilities through ATM network.

Unlimited checques writing.

4.8.2 Khushali Bachat Account (KBA)

MCB pays close attention to the low income people and for this

purpose many initiatives have been taken in this regards, Khushali

Bachat Account is one of these. This type of account is for low income

house holders, this account can be opened with one thousand rupees;

there is no restriction on regular deposit and withdrawals, however

large amount could not be withdrawals at a time. MCB pays half

yearly profit on KBA but the rate for the profit is not predetermined.

Main features of KBA are

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Is opened from Rs. 1,000.

No monthly deduction.

No restriction on deposit and withdrawals.

Profit is paid on half yearly basis.

Account holder can avail ATM and other banking facilities.

No Running finance/ Over draft is allowed.


4.8.3 Basic Banking AccountMCB considers the Students one of the important part of its customer

strategy, and special care is given to students. For this purpose a

special type of account have been lunched i.e. Basic Banking Account

(BBA). BBA can be opened with a minimum amount of one thousand

rupees, for opening the account the student would have to present

student ID card National I D Card and written request from the

concerned institution. No profit is paid and there is no deduction on

BBA, maximum withdrawal is from Rs 1500 up to Rs 2000, at a time.

Online and ATM facilities are given to the account holder.

Main features of BBA are as

Is opened from Rs 1000.

Is especially for students.

No profit is given.

No deduction on least balance.

ATM and Online facility.

Free 24-hour withdrawal facility through ATM network.

No Running finance/ over draft facility.

Maximum withdrawal is from Rs 1500 up to 2000.

4.8.4 Smart saving Account

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Salaried and small income group is also the target customer of MCB,

and for this purpose Smart Saving Account has been introduced. Smart

Saving Account is opened with a minimum amount of one thousand

rupees; the account holder would have to show his/ her pay slip along

with the national ID card. Profit is given on this type of account on half

year basis, while there is no restriction of the deposit and withdrawals,

no running finance facility is given to the account holder. There is also

no deduction on the least balance.

Main features of the account are as.

Is opened from Rs.1000

Is especially for salaried persons.

Profit is given after six months.

Zakat deduction on 1st Ramadan.

No deduction on least balance.

4.8.5 Profit & loss sharing (PLS) Accounts.

Another type of account is Profit and loss sharing account (PLS). No

interest is paid on this account but it is maintained on the basis of

sharing of profit and loss. These accounts are opened mainly by those

customers whose banking transactions are not frequent and numerous.

Lower and middle income groups, small traders, professionals, farmers

and other salaried classes usually make such deposits. Funds can be

deposited frequently through cash, checques, demand drafts, pay

orders, telegraphic transfers and other such instruments.

Main features of the account are as.

Is opened from Rs. 5,000.

No monthly deduction.

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Zakat deduction on 1st Ramadan.

No restriction on deposit and withdrawals.

Profit is paid on half yearly basis.

Account holder can avail ATM and other banking facilities.

No Running finance/ Over draft is allowed.


4.9 ACCOUNT RELATED ISSUES

There are several issues which affects the status and legitimacy of the

account. They are given stepwise.

4.9.1 Account Opening

Account opening determines relationship between banker and

customer. Bank practice maximum concern before opening of an

account. Official procedure for opening an account with the bank is

given below.Formal Request

Account opening form is provided by the bank to its customers. It

contains information about the customer, the business or profession

he/she works in, income status, addresses and contact numbers etc.

Reference

The applicant is asked to provide an apposite reference. The individual

who gives the reference should be a customer or a bank employee.

Specimen Signature

Signature serves as an authority of customer drawn on bank. The

customer is asked to give specimen signature on a card known as

Specimen Signature Card. For illiterate persons, along with two recent

photos, left-hand thumb impression for men and right hand thumb

impression for women is taken. Signatures of the customers are then

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scanned and saved in the computer for signature verification for future

reference.

Regulations of Account Opening

The following rules and regulations are taken into account when an

account is opened. When the bank and the applicant accept mutual

position and accept all the rules, the account is opened.

Against submission of the Banks prescribed application form,

duly introduced in the manner provided and on supply of

documents required, an account may be opened. Bank has the

right to refuse opening an account without giving any reason.

Account maintenance fare is charged in rupee for PKR

accounts and foreign currency accounts are charged in foreign

currency. Current and PLS saving accounts are charged

according to the Banks schedule of charges when minimum

balance falls below the balance requirement.

4.9.2 Deposits

The bank receives deposits on the following conditions.

The Bank accepts checques, drafts, and other instruments,

payable to the depositor for collection; entirely at depositors

risk.

When counting of cash deposited is done after the customer has

left the counter and if the amount indicated on the pay-in slip

differs from that of the actual cash count, the Bank count is

final and conclusive.

4.9.3 Withdrawals

Withdrawals at MCB are made in the following pattern.

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Checques and other payment instruments are to be signed

according to the specimen signature provided to the Bank and

amendment are to be legitimated by the drawer full signature.

Rupee savings, High Yield Deposits and all types of accounts

can not be overdrawn.

Cash withdrawals from accounts are subject to availability of

currency notes.

4.9.4 Issuance of Cheque Books

MCB has started a new system for issuing the checque books to its

customers. Checque books are not issued at the time of account

opening, this is because MCB issues checque books to its customers

after the confirmation of all the information provided by the customer

to the bank, and this done through the sending of letter of thanks to the

customer by post, when the customer receives the letter and bring it to

the branch, it shows that the address and the information provided by

the customer are true and correct.

Procedure

After opening the account with the bank and receiving letter of thanks,

customer is asked to fill a checque book request form, provided by the

bank the form contains the account numbers, customers names,

number of leaves needed by the customer and date of collection of

checque book by the customer After getting the checque book request

forms the signature of the customer is verified by the verification

officer, the officer verifies the signatures, already scanned in the

computer at the time of account opening. After verification of

signatures, the requisition is given to the operation manager and the

operation manager issues the checque book to the customer. Usually

25 or 50-leaf checque book is issued to the individuals and 100-leaf

checque book is issued for the companies.

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4.9.5 Return on Account

The return on accounts is given as:

Profit on certain deposits is applied twice a year for periods ending

June and December. The profit is announced after respective profit

computation is completed for each period according to applicable

regulations.

Interest on foreign currency account is applied half yearly in June and

December on minimum balance during each calendar month. Interest

rates on foreign currency savings and term deposits are normally fixed

at the beginning of each half-year but the bank has the liberty to fix

them on a monthly basis.

4.9.6 Statement Of Account

Bank present account statements to its customer for understanding. In

these statements the Bank ensures that all debit and credit entries are

correct. In case of error, the bank passes adjusting entries to rectify

error without notice. The bank is not liable for any loss or damage due

to such errors.

The Bank does not require any earlier authorization from the account

holder for debiting the account for any expenses, fees, commissions,

interest, zakat, tax, stamp duty, excise duty etc. that have come up out

of any dealings with the bank.

4.9.7 Account Closure

When an account is closed, the unused checques are returned to the

bank immediately. It is made sure to the bank in writing that idle

checques have been destroyed. The Bank also can close an account and

terminate any other type of relationship with the customer without

assigning any reason or prior notice.

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References

Interviews & working with the respective departments officers.

Account Opening Form of MCB.

(On-line) Available http://WWW.MCB.Com

CHAPTER 5

FINANCIAL ANALYSIS

Analysis of an organization discovers its potential areas of

improvement and evaluates its performance of the past period. It

identifies the possible solutions to problems faced inside the bank and

gives an insight of the opportunities which can be exploited to reap

benefits.

Financial Analysis

The financial analysis is based on the national performance of MCB.

The different Ratios calculations (figures) have been taken from the

annual audited balance sheet for the year ended December 30, 2011.

5.1 FINANCIAL ANALYSIS

Financial analysis of an organization expresses the performance of the

bank for over a period of time. Different ratios analyze the banks

capabilities. Varied relations are drawn on the basis of this analysis.

Financial ratios have their own importance in analyzing the

organizations performance. An increase or decrease in one ratio does

not mean anything good or bad. It is always linked to another one that

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is more important. Considering the example of higher interest, if the

bank wants to have most of the deposits of the market, it has to offer

higher interest rates. This would bring the deposits, thus deposits will

increase, but on the other hand it will have to pay higher interest as

well, thus decreasing the profit ratio. Relativity is the prime factor in

evaluation of ratios.

The financial ratios of the MCB reflect that the banks deposits have

increased and it has also increased the profits. Advances have been

made which have resulted in the fall of cash. The overall financial

position shows that the bank is growing and is on upward direction in

profitability as well.

The financial Analysis is as follows. Different values come out from

the calculations for year ended 2011.

5.1.1 LIQUIDITY RATIOS

5.1.1.1Working Capital Ratio

Current Assets-current Liabilities

2011 2010

41172321 39095552

A measure of liquidity calculated by subtracting current liability from

the current assets of the firm. This figure is not useful for comparing

the performance of different firms, but it is quite useful for internal

control.

2011 2010

Current Assets

42635217

1 394461394

Current Liabilities

38517985

0 355365842

40

Working Capital Ratio (RS in '000')

394461394

426352171

385179850

355365842

300000000

320000000

340000000

360000000

380000000

400000000

420000000

440000000

Current Ass tes Current Laibilities


41/60

Cash Ratio (Rs in '000')

355365842

3968388339631172

385179850

0

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

450000000

Cash Current Laibilities


5.1.1.2 Current Ratio

Current Assets/Current Liabilities

2011 2010

1.107 1.110

The Current ratio,

one of the most commonly cited financial ratios, measurers the firms

ability to meet its short-term obligations. In the year 2010 the ratio is

1.110, while the following year it comes to 1.107

5.1.1.3 Cash Ratio

Cash/Current Liabilities

2011 2010

0.103 0.112

This ratio measures the ability of the firms to meet

the current liability by its most liquid asset that is cash in hand.

5.1.2 TURN OVER RATIOS.

5.1.2.1 Assets Turn over

Interest Revenue/Total Assets

2011 2010

0.090 0.077

2011 2010

Current Assets

42635217

1 394461394

Current Liabilities

38517985

0 355365842

2011 2010

Cash 39631172 39683883

Current Liabilities

38517985

0 355365842

41

Assets turn over Ratio (Rs in' 000')

44361590

4

3178659540043824

41048551

7

0

50000000

100000000

150000000

200000000250000000

300000000

350000000

400000000

450000000

500000000

Interest Revenue Total Ass ets

Current Ratio(Rs in '000')

426352171

394461394

355365842

385179850

300000000

320000000

340000000

360000000

380000000

400000000

420000000

440000000

Current A sstes

Current Laibilities


42/60

Gross Profit Margin (Rs in '000')

40043824

28483084

23921062

31786595

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

Gross Profit Interest Revenve


The Assets turn over ratio tells us the relative efficiency with which a

firm utilizes its total assets to generate interest revenue. From the

calculation above the ratio of MCB has shown improvement.

5.1.3 DEBT RATIO.

5.1.3.1 Total Debt RatioTotal Liabilities/Total Assets

2011 2010

0.868 0.866

The bebt ratio measures the proportion of total assets financed by the

creditors. The high this ratio, the greater the amount of other peoples

money being used in an attempt to generate profits.

5.1.4 PROFITABILITY RATIO

5.1.4.1 Gross Profit Margin

Goss Profit (Fund Based Income)/Interest

Revenue

2011 2010

71.130 75.255

2011 2010

Interest Revenue 40043824 31786595

Total Assets443615904 410485517

2011 2010

Total Liabilities

38517985

0 355365842

Total Assets

44361590

4 410485517

2011 2010

Gross Profit 28483084 23921062Interest Revenue 40043824 31786595

42

Total Debt Ratio (Rs in '000')

443615904

355365842

385179850

410485517

0

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

450000000

500000000

Total Liabilities Total Assets


43/60

Operating Profit Margin (Rs in 'Millions')

24373

40043

25887

31786

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Operating Profit Interest Revenue

Return on Equity (Rs in'000')

52244865

1526556215374600

45414158

0

10000000

20000000

30000000

40000000

50000000

60000000

Net Profit Af ter Tax Owner's Equity


This ratios measure the percentage of each interest Rupee remaining

after the firm has paid for its interest paid, the higher the gross profit

margin, the better, and the lower the relative cost of merchandise sold.

5.1.4.2 Operating Profit Margin

Operating Profit Margin

Operating Profit/Interest Revenue*100

2011 2010

64.648 76.678

Measures the percentage of each interest Rupee

remaining after all costs and expenses other than

interest and taxes are deducted, the pure profits earned on each Interest

Rupee.

5.1.4.3 Profit Before Tax Ratio

Profit Before Tax/Total Income*100

2011 2010

63.799 70.164

This ratio measures the amount of profit

earned by the firm before the Tax.

5.1.4.4 Return on equity

Net Profit after Tax/Owner's equity *100

2011 2010

2011 2010

Operating Profit 25887 24373

Interest Revenue 40043 31786

2011 2010Net Profit Before Tax 21867 21308

Total Income 34275 30369

43

Profit Before Tax Ratio ( Rs in 'Millions')

34275

30369

21867 21308

0

5000

10000

15000

20000

25000

30000

35000

40000

Net Profit Before Tax Total Income


44/60

Retun on Assets (Rs in '000 ')

443615904

1526556215374600

410485517

0

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

450000000

500000000

Net Profit After Tax Total Assets


29.43 33.61

The return on equity measures the return earned on the owners

investment in the firm. Generally the higher this return, the better off

are the owners.

5.1.4.5 Return On Assets

Net Profit After Tax/Total Assets*100

2011 2010

3.466 3.719

This ratio is also called return on investment,

Measures the firms overall effectiveness in generating profits with its

available assets,

the time interest earned ratio, measures the firms ability to make

contractual interest payments. The higher the value of this ratio, the

better able the firm to fulfill its interest obligations.

5.1.4.7 Net Profit Margin

Net Profit/ Interest Revenue

2011 2010

2011 2010Net Profit After Tax 15374600 15265562

Owner's Equity 52244865 45414158

2011 2010

Net Profit After Tax 15374600 15265562

Total Assets

44361590

4 410485517

44

Net profit Margin (Rs in '000)

15374600 15265562

40043824

31786595

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

45000000

Net Profit Interest Revenve


45/60


38.394 48.025

The net profit margin measures the percentage of each Interest. The net

profit margin measures the percentage of each interest Rupee

remaining after all costs and expenses, including interest and taxes,

have been deducted. The higher the firms net profit margin, the betterthe net profit margin will be.

References:

Annual Balance Sheet (Dec 31,2011) Of MCB.

Gitman, Lawrence, J. 2001 Managerial Finance 9th Patparganj, Dehli

India. Edition Chapter 4.

James C. Van Horne & John M. Wachowicz, Jr. Fundamentals of

Financial Management.11th. Edition Chapter 6.

2011 2010

Net Profit

1537460

0 15265562

Interest Revenue

4004382

4 31786595

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CHAPTER 6

SWOT ANALYSIS

MCB has some unique factors like being the oldest bank of the

country, which adds to its value. Its foreign background and the look

of multinational institutions create attraction for people. The formal

SWOT analysis constitutes of four different solid parts. The SWOT

analysis comprise of the strengths it has, the weaknesses that are a part

of it, the opportunities that it can exploit and the threats it faces from

competitors. However it also encompasses generally the Khwaza khela

Branch. Certain factors are already attached with the name of MCB,

whose benefit or loss is automatically the part of MCB Khwaza khela

Branch.

6.1 STRENGTHS

MCB benefit from a few points which ultimately makes its backing

strengthened. Some of these points are as follows:

Owned by very strong financial group (Mansha Group)

The largest private sector bank in Pakistan with a network of1047 branches domestically and 7 foreign branches and 01 E P

Z.

Since MCB is one of the oldest banks in Pakistan it started its

operation in 1947 so it has sufficient operation experience.

First bank to privatize which has now became the leader in

market with the largest on-line and ATM network in country.

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Sole provider of mobile banking.

Bank emphasis on consumer needs and demands which is

ensured in the branches through the Quality Service Assurance

(QSA) department of the bank.

MCB emphasis on the extension and improvement in service.

Attractive and high rate of interest.

Best and optional policies and attractive compensation

packages for employees.

Human Resource development and employment of new

An efficient and experienced group of management.

Easy access to the customers at their residential localities

through large network of branches.

6.2 WEAKNESSES

Weaknesses, like strengths are a part of almost every organization.

These weaknesses points out the potential areas of improvements andmake the organizational behavior intelligent. A cumulative effort to

overcome these flaws makes success possible.

During the internship period the weaknesses that generally surfaced

and were visible at MCB Khwaza khela Branch are described below.

Slow down in advance growth in the short term as MCB

focuses on quality customers in the market.

Customers having accounts of small amount are not given thesame services and dealing given to those of high amount.

MCB keep on increasing the numbers of branches while the

numbers of employee are not at the same pace which has lead

to the shortage of employees.

Unrest among employees due to continuous changes in the

employees policies from management.

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Managing group is also having huge investment in other sector

like textile and cement industry etc, which may divide their

attention.

6.3 OPPORTUNITIES

Success, more than anything is all about converting into opportunity

what everybody else considers danger Opportunities, when exploited

properly reap profits and earn success. They are almost always a matter

of time. They are to be sought, picked and made use of, before any

body else gets up and do so.

Due to largest ATM network, MCB can expend its 24 hours

cash facilities to other cities of the country in order to meet 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 could not due to

environmental restrictions.

Growing policies of government on business and commerce

sectors provides MCB an opportunity to efficiently meet with

the businessmens requirements of instant cash and financing

facilities.

To further expend its branch network in business territories.

MCB also has an opportunity to expend it new technological

advancement like tele bank and online banking facilities in

order to serve the customers more efficiently.

To increase the number of branches in forging countries.

6.4 THREATS

Threats are the unseen, futuristic, probable events that can occur and

prove dangerous in consequences. Every organization is faced by some

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category of threats in its operations and functions. Opening new

outlets, altering existing policies, designing fresh marketing strategies,

bringing change in physical structure, almost every activity that an

organization does, it faces some kind of threats, just like the benefits it

seeks.

MCB also faces some threats which can just prove minor assumed

fears; as well as can become events with grave consequences. The

prevailing condition indicates the following as the possible threats.

Inconsistency in governments policies regarding to business

and economic sector.

Growing global technological advancement.

Strict regulation by the government over credit facilities to the

customers as well as meet the Prudential Regulation as by the

SBP.

Loss of confidence of prospective customers due to freezing of

accounts in the past by the government.

References:

Gitman, Lawrence, J. 2001 Managerial Finance 9th Patparganj, Dehli

India. Edition Chapter 4.

James C. Van Horne & John M. Wachowicz, Jr. Fundamentals of

Financial Management 11th Edition Chapter 6.

Ahmad Zeeshan,Report On MCB, MBA (F), Session 2006-2011.

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CHAPTER 7

FINDINGS AND RECOMMENDATIONS

Since the name and icon of MCB stands for sign of trust and reputation

that is why the number of customers of MCB is growing day by day.

Analyzing the banks performance in several departments and

evaluating the strengths and weaknesses leads to some proposals.

There are certain rooms of improvement which has been found during

the period of internship.

1. There Are Always Long Queues On The Cash Counter.

In MCB Khwaza khela branch there are long lines from the very

beginning of day. At the cash counter the customers are some times

starts to speak harsh wording due to the turning of numbers of each

customers.

2. The Attitude Of Employees Is Not Customers

Oriented.

In marketing it said that the customer is the king, and must be obeyed.

But this concept is not used in the branch, the staff of the branch do not

know any thing about the value of customer, however only the

customers having huge balance is given the due attention.

3. No Proper Setting Arrangement For Customers.

The setting arrangement is important for both the employees and for

the customers as well. Often it was visible that during peak banking

hours many customers use to stand anywhere they wanted to. This

creates stress for the employees as well as for the customers.

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4. Technology Incorporated Is Not Up To Date.

Technology plays a crucial role in the present age, the technology used

in the branch is not up to date the employees still working on the old

computers, the internet connection which is used for the online

transaction is the old dial up connection, which should be the Digital

Subscriber Line (DSL).

5. Insufficient Staff.

Another serious problem at the branch is the scarcity of staff, the staff

working in the branch is enough as compare to any other branch but if

we glance over the number of customers and the location of branch the

staff is scare.

6. No Formal Training And Development Program.

The MCB claims of training and educating its employees but

practically speaking it should initiate a good employee training and

development plan. This would help employees to know more about

their specific job and its actual requirements.

7. Employees Are Given Hard Targets.

Targets which are given to the employees should be in such a way that

it can be accessible, but normally it has been observed that hard targets

are given to the employees and are asked to be achieve in a short span

of time.

8. Whole Concentration Is On The Upper Class Customers

Only.

The whole concentration of the staff remains on the customers having

huge amount of balance, while the customers having less amount in

their accounts are neglected.

9. Employees Are Over Loaded.

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The employees of the entire working department in the branch are over

loaded, even any employee can not take a leave of a single day.

10. Employees Are Tortured By The Internal Control Unit

(ICU).

In MCB the employees are tortured by the unit, if the member of the

unit finds any error in the working of any employee, the employee is

given a charge sheet, and is asked for explanation, and after that the

case is hand over to the enquiry committee for further procedure, so

this is a long way process and creates unrest among employees.

Advice is seldom welcome and those who want it the most always like

it the least Recommendations suggest improvements in areas which

have room for polishing and progress.

Criticizing several factors at MCB Khwaza khela Branch does not

mean that these aspects are permanent flaws of the branch. Instead, it is

intended that these mistakes be removed. For the confiscation of these

errors, certain recommendations are forwarded.

1. QUEUING MODELS FOR CASH COUNTERS

The long queues at cash counter give an awkward look. This problem

can be solved by using the Queuing Model concept. These models are

proposed to facilitate organizations control waiting lines. Through this

approach, the bank can decide the best possible number of checkout

stands. The number of checkouts should balance personnel cost and

customer waiting time.

2. CUSTOMER ORIENTED ATTITUDE

The bank staff should be properly educated about the customers value.

The bank should use the marketing approach, and customer satisfaction

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should be taken into account. There should be no status discrimination

between customers. The bank staff should be courteous to all

customers. A customer is fascinated and brings other customers also to

the bank if the service is efficient and courteous.

3. PROPER SEATING ARRANGEMENT

Customers, waiting for their turns, should be provided with proper

seating arrangements. Often it was visible that during peak banking

hours many customers use to stand anywhere they wanted to. This

created stress for the employees as well as other customers waiting for

their job getting done. A specific place should be reserved for the

customers by placing chairs there. The staff should politely tell the

customers to be seated till their work is ready. This would ease the job

of the employees as well as clients wont bear the pain of being

standing still and waiting.

4. INSUFFICIENT STAFF

Another crucial problem in MCB is the scarcity of staff, all the

branches of MCB are over loaded due to high customers attractiveness,

which not only create problem for the customers but also for the

existence staff, while the quality and fairness of work is also affected.

So MCB should hire more staff in order to cope with the issue, for this

issue short and long term plan which has been given in the

implementation plan may be used.

5. TRAINING AND DEVELOPMENT PROGRAM

The MCB claims of training and educating its employees but

practically speaking it should initiate a good employee training and

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development plan. This would help employees to know more about

their specific job and its actual requirements.

7. PERFORMANCE APPRAISAL

The practice of performance appraisal should be made a serious and

mature process which can identify an employees potential accurately.

Giving unachievable tasks to employees discourages them and they

dont strive for the achievements of those tasks. If targets which are

practical given to employees and any bonus or reward are announced

on the achievements, this would greatly influence the performance of

employees. It can be possible only then that the employees will take

their performance appraisal serious and would yearn for betterment.

8. MARKET SEGMENTATION

The general target market of MCB is the upper class of the society.

The sales force is often busy in looking at probable clients with largeamount of money. It can also prove costly when sometimes another

potential customers gets deviated because of the less attention paid to

him. Also concentration in one market segment bears high risk and can

lead to huge losses if a deposit is withdrawn. The bank should also

offer some products for potential customers with comparatively low-

income level. Most of the potential customers cannot fulfill the high

balance requirements and high service charges. Bank should revise its

policies on charges for services it provides. This will result in more

satisfied and trustworthy relationship between clients and employees.

9. EQUITY CONCEPT

All the departments should be given with an equivalent load of work

this would result in a friendly relation among employees as well as it

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will boost the coordination between different departments. Another

suggestion would be that the staff should be involved in the decision

making process. So that they can make arguments about their status of

work after accepting the new responsibilities. This would also clarify

the issue between staff members and responsibilities and authorities

will be properly delegated, resulting in the ending of the confusions

about work and responsibilities. It would also give a feeling of own

ness and security to the workforce of being very much a part of the

bank.

10. FAIR INTERNEE SELECTION PROGRAM

A fair internees selection system should be established for selection of

internees. Instead of sending CVs to Karachi Head Office, the

applicants should be interviewed locally in the branch on some specific

date. Aptitude and competence of the candidates should be considered

a merit for selection instead of their references. Bank administration

should give proper training to the internees. They should educate them

about the purpose of all the functions they perform. MCB also give

internship generally for six weeks and for the maximum of eight

weeks. This is a problem for MCB itself. Thus during the six or eights

weeks duration when an internee gets some know how about the banks

operation, his/her time completes; and when he/she can be more useful

than ever, he/she is asked to leave. If MCB increases its internship

period for a quota of seats, it will help MCB in taking much use of

internees it trains for work. MCB also does not pay any stipend to the

internees, which lead to discouragement among the internees.

11. EMPLOYEES ARE TORTURED BY THE ICU.

The main job of the Internal Control Unit (ICU) is to ensure error less

work in a branch. This unit critically checks the routine activities of a

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branch on monthly basis. The recommendation for this finding is that if

the ICU finds any error/ mistake it should be rectified on the spot

instead creating such a big issue which create un rest among

employees.

References

1. Interview with the employees and personal observation.

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CHAPTER 8

IMPLEMENTATION PLAN

Analyzing the banks performance in several departments and

evaluating the strengths and weaknesses leads to some proposals. The

implications of these suggestions are more important issue. MCB

Khwaza khela Branch is generating profits and is targeting the market

efficiently with its energetic management. Its location at the centre of

business sector in Peshawar city is also adding to its easy accessibility

by customers. Thus the outlook requirements of the bank are almost

complete. The place for improvement in the bank is inside.

The underlying problem of several other problems that was observed

during the internship period was that MCB Khwaza khela Branch is

and understaffed bank. It has enough vacant room for new

employees. This hitch is the root cause of many other problems.

Considering the prevailing circumstances at MCB Khwaza khela

Branch and taking a broad overview of the possible solution, one

would surely come up with the idea of employing fresh energetic

workers. This would root out the above mentioned problems.

Additionally an employee in the cash department would lessen the

burden of the already working tellers as well as it would help in thereduction of long queues at the cash counter.

IMPLEMENTATION PLAN

Thus now when the basic area of problem is identified, the

understaffing, several measures can be taken into account to deal with

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this problem. There are two plans which are suggested for dealing for

this problem.

8.1 Short Term Plan

8.2 Long Term Plan

8.1 SHORT TERM PLAN

The short term plan is devised for employees who would be given the

chance to serve in the bank for a limited period. This can be done in

the following two methods.

a: Longer Duration Internship Program

The bank normally offers a 6 weeks internship program. At the

maximum this duration stretches to 8 weeks. During this period the

employees of the bank helps the internees to understand various

procedures regarding different departments. After the coaching and

teaching of these 6 or 8 weeks the internee is able to comprehend most

of the functions of the bank and he or she is able to follow the

appropriate procedure which is to be followed for the completion of

that function.

The bank can introduce a long internship program for its own benefit

as well as these graduates. To keep the normal internees unaffected, it

can reserve a special quota for these kinds of long duration internees.

The selection can be made in the local branches. To get good

recommendation on this kind of a report the applicant will be

motivated and will work hard. This will help him in getting experience

as well knowledge about the delicacies of practical job. Most of the

organization requires earlier experience in the field, thus MCB can be

helpful in developing the youth into a positive direction as well. Since

the name of MCB already means trust, this will build many peoples

career in good organizations. The bank will benefit in the shape of

obtaining a motivated and energetic employee and that also at a lesser

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cost than the normal employees. The cost would be less because since

these would be fresh graduates seeking experience and

recommendation, hence they can take as internees.

b: Contract Workers

The bank can also employ contract workers also. If the bank wants to

be careful in choosing a better lot among the pool of candidates for its

operations, it can offer contract seats. Contracts seats will be for

applicants who will be employed on contract basis.