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INTERNSHIP REPORT ON
MUSLIM COMMERCIAL BANK
Internship Report submitted to the Faculty of Commerce
&Accountany in Partial Fulfillment of the Requirements for the
Degree of Mater in Commerce.
By
Name of Student: Sehrish Khalid
Roll Number: 12052054-062
Date of Submission : 15 september 2013
Name of Program Coordinator
Signature of Program Coordinator
University of Gujrat(G.T Road
Science Campus)
Faculty of Commerce &Accountancy
Course Title: Internship (Report based on Internship)
Course Code: MGT -403
Page 2
I dedicate this internship report to my parents. Because of their prayers and
encouragement I have been able to complete this report.
Praise is to Allah, the most Gracious and Merciful, who blessed me with the
knowledge and wisdom and enabled me to overcome this task. Heartiest gratitude to
my parents without their continuous encouragement and love I could not have
accomplished this task.
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S.NO TITLE1 Acknowledgement2 dedication3 Executive summary
Chapter#1 Introduction
1.1 Background of study1.2 purpose1.3 Scope1.4 Objective1.5 Banking sector overview1.6 MCB performance over view
Chapter#2 Overview of organization
2.1 Brief history of MCB2.2 mission2.3 vision2.4 Awards and achievement2.5 Business volume2.6 Products/service line2.7 PEST Analysis2.8 MCB competitive strategies
Chapter#3 Organization structure
3.1 Number of Employees of MCB3.2 Introduction of all Departments3.3 Comments on Organization Structure
Chapter#4 My internship work
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4.1 Introduction of branch4.2 Internee work4.3 Learning Summary
Chapter#5 Conclusion
5.1 SOWT analysis
Capter#6 Recommendations
Chapter#7 References
Page 5
MCBBank Limited (Formerly Muslim Commercial Bank Limited) has a solid
foundation of over 50 years in Pakistan, with a network of over 900 branches, over
750 of which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide
and a network of over 12 banks on the MNET ATM Switch.
MCB's operations continued to be streamlined with focus on rationalization of
expenses, re-alignment of back-end 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.
During my internship in MCB I worked in Remittances, Advances, Foreign Exchange
and Customer Service Office department and I successfully completed all the
task/duties that were assigned to me.
During the course of internship I learned about different functions performed by
Remittances, Advances, Foreign Exchange and Customer Service Office department
and bank as a whole. I also learned bank’s correspondence with their customers and
within branches. I learned about documentation requirements and record keeping for
different activities and processes, especially the documentation requirement for
different kinds of financing facilities.
Chapter#1
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Introduction to the ReportThe basic purpose behind the preparation of an internship report is to make the
student job down the experiences of the internship and discuss the understanding of
the operations of the organizations. So, We can work well in future. For this purpose I
did my internship in MCB Bank Limited, Kutchery Road Gujrat which was the most
feasible being the oldest, reputed and well established bank and it is the main branch
of the district, where I can enhance my skills and learn the basics of business
environment. This report is about MCB’s products, fields of activities and its
management style.
The results show the progressive image of the MCB bank as compare to the
competitors. Management style is somewhat participative and its culture is friendly
and cooperative. All the employees were extremely cooperative and accommodating.
All the employees under whom I worked were learning from the experience as well.
Background of the study:
Internship training program during commerce accountancy Program is
necessary for the partial fulfillment of the completion of Degree of Commerce in
master . It is necessary for me to complete an internship session of about 6 weeks in
some manufacturing or service industry relevant to my area of interest and
specialization. So, I choose the Banking field because I have the interest in this sector
because my study background is related with this sector.
: Purpose
Internship is the great experience that provides me with hands-on, practical job
experience. Ideally, internship will enable interns to :
)a (Integrate and use my knowledge and skills from the classroom ,
)b (Discover where further competence is needed ,
)c (Take steps to gain that competence under educational supervision, and
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)d (Become better acquainted with the types of work settings in which such competence can be applied .
:Scope
This study will facilitate the students regarding the working of Banking sector of
Pakistan because most of the teachers during their lectures use the examples of Banks
like MCB, National Bank, UBL, Bank Alfalah and many others, students should study
this report so that they must grasp the functioning of such Banks. Report will help to
know working of banking sector in Pakistan. And it helped me a lot in getting the
practical knowledge of working in bank as internee.
:Objectives
I worked as an internee in MCB Kutchery Road, Gujrat. The main objectives
to study in MCB were:
To get some experience in working with well reputed organization.
To gain knowledge about the professional environment of the bank.
To know about the technology utilized in the banks.
To deal and manage with the situation of stress.
Banking Sector Overview
Pakistan’s banking and finance sector grew by over 21 percent from July 2004-
March 2005 amid the eight percent expansion in the services sector in Pakistan.
Financial sector in Pakistan is going through a fast-paced transition as new groups
were buying out foreign banks’ operations in Pakistan. The number of listed banks is
also increasing. While the income from core banking activity has increasing due to
higher business volume, earnings are also expected to improve due to ventures into
consumer finance, housing finance and enhanced lending to the agriculture sector.
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In just four years the banking industry has expanded tremendously and now there are
more than two dozen commercial and investment banks operating in the country.
Commercial banks in the private sector had performed well since their inception,
registering overall growth in the deposit base and profits. The banks also managed to
maintain a healthy credit portfolio.
Foreign banks have a strong presence in all major cities and are targeting high net
worth individuals and blue chip companies. Their strategy is quite successful as they
account for about 34 percent of total sector profits, despite having only 15 percent of
deposits and 16 percent of advances.
During the first six months of the ongoing fiscal year, total assets of all the scheduled
banks increased by Rs 239 billion. Total assets grew by 8.5 percent from Rs 2,800
billion in June 2004 to Rs 3,039 billion in Dec 2004. During the first six months of
2004-05, there was also an increase of Rs 277 billion in the net advances of the
scheduled banks. Net advances grew by 19.3 percent from Rs 1,437 billion in June
2004 to Rs 1,714 billion in Dec 2004.
MCB’s Performance Overview
The first half of 2005 was very promising for MCB, as the bank has achieved pre tax
profits of Rs. 4.2 billion, compared with Rs. 2.2 billion for the same period in 2004.
Profit after tax has more than doubled compared to the corresponding period for 2004
and exceeds Rs. 3 billion – highest ever profit in the history of MCB. This translates
into earning per shares of Rs. 7.43.
Advance and deposit increased to Rs. 156 billion and Rs. 241 billion reflecting a
growth of 14% and 10% respectively. Additionally the bank’s assets expanded by
16% during the half year ended 2005 and crossed Rs. 300 billion marks.
Bank’s equity (capital and reserves) increased by 41% during the half year, which was
due to the issue of right shares and retained earnings. Increase in equity would
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improve the lending limit and would provide the opportunity for significant growth of
the bank’s balance sheet. This would also help to meet the capital requirement under
Basel Accord II, which will be effective from 2007.
Based on continuing growth and consistently outstanding performance, MCB has
once again received the Euromoney Award 2005 for the “Best Bank in Pakistan”.
MCB has become the only bank to receive the Euromoney Award for Excellence for
the fifth time in last six years. In addition, Asia Money has also declared MCB as
“The Best Domestic Commercial Bank in Pakistan” for the year 2005.
CHAPTER#2
History of MCBMCBBank Limited (Formerly Muslim Commercial Bank Limited) has a solid
foundation of over 50 years in Pakistan, with a network of over 900 branches, over
750 of which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide
Page 11
and a network of over 12 banks on the MNET ATM Switch, which as a combination
is considered to be the core competence of MCB.
MCB has become the only bank to receive the Euromoney award for the fourth time
in the last five years. MCB won the "Best Bank in Pakistan" in 2005, 2004, 2003,
2001, and in 2000 the "Best Domestic Bank in Pakistan" awards. In addition, MCB
also has the distinction of winning the Asia Money 2005 & 2004 awards for being
"The Best Domestic Commercial Bank in Pakistan".
Ten years after privatization, MCB is now in a consolidation stage designed to lock in
the gains made in recent years and prepare the groundwork for future growth. The
bank has restructured its asset portfolio and rationalized the cost structure in order to
remain a low cost producer.
MCB now focuses on three core businesses namely Corporate, Commercial and
Consumer Banking. Corporate clientele includes public sector companies as well as
large local and multi national concerns. MCB is also catering to the growing middle
class by providing new asset and liability products. MCB looks with confidence at
year 2005 and beyond, making strides towards fulfillment of its mission, "to become
the preferred provider of quality financial services in the country with profitability
and responsibility and to be the best place to work".
We will draw from the respect we have earned as Trusted Third Party Processor and
will become a distinctive organization known for innovative use of technology to
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continually improve products and services for the benefit of our customers and their
customers and keep them abreast with times to compete in the global society.
We focus on our customers as an active component in growth process. We continue to
offer services that expand their access to excellent and affordable technologies. Our
qualified and experienced workforce must work closely with our customers to
continually enhance their confidence and trust in us.
Euromoney Awards
Best Bank Award 2008
Page 13
Best Bank Award 2006
Best Bank Award 2005
Best Bank Award 2004
Best Bank Award 2003
Best Bank Award 2001
Best Domestic Bank Award 2000
Asia Money Award
Best Domestic Commercial Bank Award 2005
Best Domestic Commercial Bank Award 2004
Euromoney Awards
Best Bank In Asia Award 2008
MCB has been awarded as a Euromoney Award 2008 for the " Best
Page 14
Best Bank In Pakistan Award 2006
MCB has yet again received the esteemed Euromoney Award for the
“Best Bank in Pakistan”. It is the only bank to receive the Euromoney
Award for Excellence for the sixth time in the past seven years.
Best Bank In Pakistan Award 2005
MCB has again received the esteemed Euromoney Award for the “Best
bank in Pakistan”. It is the only bank to receive the Euromoney Award
for Excellence for the fifth time in the last six
years.
Best Bank In Pakistan Award 2004
In a continuous winning streak, MCB once again takes pride in being
conferred with Euromoney's prestigious award of excellence, for being the
"Best Bank in Pakistan" for the fourth time in the last five years.
Best Bank In Pakistan Award 2003
MCB believes in you. Together we work with quality, integrity and
dedication, striving to achieve collective success by understanding
changing trends and assimilating into diverse cultures. Your trust in our
ability and our commitment to deliver has again won us the Euromoney
Award 2003 for the "Best Bank in Pakistan".
Best Bank In Pakistan Award 2001
Page 15
Your trust and our commitment is always an award wining combination
MCB was awarded as a Euromoney Award 2001 for the " Best Bank in
Pakistan".
Best Domestic Bank Award 2000
MCB was awarded as a Euromoney Award 2000 for the " Best
Domestic Bank in Pakistan".
Asia Money Awards
The Best Domestic Commercial Bank Award 2005
MCB Continues to shine as once again Asia Money declares MCB as
"The Best Domestic Commercial Bank in Pakistan" for the year 2005.
The Best Domestic Commercial Bank Award 2004
MCB has a distinction of winning the Asia Money 2004 award for being
"The Best Domestic Commercial Bank in Pakistan"
Business volume:
Page 16
MCB Bank Ltd.
TypePublic (KSE:[2])
IndustryBanking
Capital Markets
Founded1947
HeadquartersRegistered Office: Islamabad, Principal Office: Karachi Pakistan
Key peopleMian Mohammad Mansha (Chairman)
ProductsLoans, Credit Cards, Savings, Consumer Banking etc.
RevenuePKR 35.782 Billion (2009)[1]
Net incomePKR 26.753 Billion (2009)[1]
Total assetsUSD 6.02 Billion
Websitewww.mcb.com.pk
Page 17
Deposit Accounts
Khushali Bachat Account
Khushali Bachat Account, a Rupee savings account is one of MCB Bank’s
most popular products. Due to the low initial deposit, the account can be
opened by people from all walks of life and still avail the facility of daily
product profit calculation.
Mahana Khushali Bachat
MCB Monthly Khushali Scheme provides you with a steady income every
month. Just purchase a Monthly Khushali Certificate and you will enjoy a
steady income of your total deposit every month.
Pak Rupee Savings Account
MCB’s Pak Rupee Savings Account offers you attractive returns on your Pak
Rupee investment.
In addition, you have access to a countrywide ATM network convenient cash
accessibility 24 hours a day. The facility also provides you with unlimited
daily transactions with a limit on maximum withdrawal amount through the
ATM machines.
Pak Rupee Current Account
MCB’s Pak Rupee Current Account offers you the convenience of unlimited
withdrawals i.e. access to your funds whenever you want without any notice.
There is no limit on the number of transactions you make in a day plus you
can avail finance facility up to 75% of the total deposit.
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In addition, you have access to a countrywide ATM network convenient cash
accessibility 24 hours a day. The facility also provides you with unlimited
daily transactions with a limit on maximum withdrawal amount through the
ATM machines.
Pak Rupee Term Deposit
MCB Pak Rupee Term Deposit gives a higher rate of return. It gives you
choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5
year term deposits.
Saving 365
The MCB Saving 365 calculates profits on a daily product basis and gives you
the facility of unlimited withdrawals.
Foreign Currency Savings Account
MCB’s Foreign Currency Savings Account offers you attractive returns on
your Foreign Currency investment.
You can invest in any of the four currencies i.e. US Dollar,
UK Pound Sterling, Japanese Yen or Euro
Your foreign currency account is exempted from Zakat and
withholding tax
Foreign Currency Current Account
MCB’s Foreign Currency Current Account offers you the convenience of
unlimited withdrawals i.e. access to your funds whenever you want without
any notice. There is no limit on the number of transactions you make in a day.
MCB Foreign Currency Term Deposit
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MCB Foreign Currency Term Deposit gives a higher rate of return. It gives the
choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5
year term deposits.
Dollar Khushali Account
The Dollar Khushali Account, a Dollar based account was introduced in 1993
at selected MCB Bank branches. Today, you can open a Dollar Khushali
Account at over 200 branches in Pakistan.
Loan Products
MCB Business Sarmaya
“MCB Business Sarmaya” is the best Running Finance facility against your
residential property which empowers you to manage your business dealings
better. So act today and get MCB Business Sarmaya and thus improve your
business, avail lucrative opportunities and expand your business, with absolute
satisfaction of cash flows.
MCB Car4u
Life is like a chess board. You plan your career options. You analyze your
business moves. But when you really want to improve your life, you make a
power move.MCB CAR4U Auto Finance is the power move that assists you in
more ways than you ever imagined. It is affordable, with lowest mark up,
flexible conditions, easy processing and above all, no hidden costs.
MCB Pyara Ghar
Some destinations require a long wait. Like waiting for a home of your own.
But with MCB Pyara Ghar it is now easy to step into your home and start
living a real life.
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MCB Pyara Ghar is an ideal Home Finance from your own bank that lets you
Purchase, Renovate or Construct your home the way you have always wanted.
Having your own home was never so easy
Easy Personal Loan
MCB Easy Personal Loan provides you with the financial advantage to do
things you've always wanted to but never had the sufficient funds for. Take
that much-needed holiday. Buy a car. Refurnish your house. Purchase a new
TV. Finance a better education for your children.
MCB Master Card
Since the beginning of time, people have tried to find more convenient ways to pay,
from gold to paper money and cheques. Today, money is moving away from distinct
hard currencies and towards universal payment products that transcend national
borders, time zones, and, with the Internet, even physical space. Plastic or "virtual"
money, credit, debit, and electronic cash products, inevitably will replace cash and
cheques as the money of the future.
MCB Rupee Traveler's Cheques
MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash for
traveling and travel related purposes. The product has been extremely popular and is
preferred over cash by customers while traveling and in all walks of life.
MCB Rupee Traveler's Cheques- The safest way to Carry Cash
Corporate Banking
Cash Management Services
MCB’s network of over 900 branches in Pakistan enables it to collect and disburse
payments efficiently with its cash management services. This also enables it to offer
Page 21
you a choice of paper based or electronic fund transfer solutions including collection
amounts, cross branch on- line transactions etc.
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 etc. Tailor- made
solutions are developed keeping in view the unique requirements of your business.
Term Loans
MCB offers Short to Medium Term Finance to meet capital expenditure and short
term working capital requirements of our customers. The loans are structured on the
basis of underlying project characteristics and cash flows of the business.
Trade Finance Services
Under Corporate Banking MCB offers trade finance services that include an entire
range of import and export activities including issuing Letters of Credit (L/Cs),
purchasing export documents, providing guarantees and other support services.
Online Services
MCB ATM Services
With a solid foundation of over 50 years in Pakistan, with more than 750 automated
branches, 269 online branches, over 222 MCB ATMs in 41 cities nationwide and a
network of over 12 banks on the MNET ATM switch, MCB is positioned at the
forefront of the banking industry in Pakistan. This success has been possible because
of a never-ending drive to achieve higher levels of excellence, constantly striving to
raise the level of performance.
MCB Mobile Banking
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At the forefront of technological excellence, MCB proudly introduces MCB MOBILE
BANKING. The convenience of accessing your account balance information and mini
statements whenever you want or wherever you may need them, with comfort and
peace of mind.
MCB Call Center
Keeping up with banking services can be tedious but not with MCB Bank, where
phone service is at your fingertips. Just dial our Call Centre from the comfort of your
home or office or wherever you happen to be. It offers basic banking services for your
convenience, eliminating the need for you to make unwanted trips to your branch.
MCB Smart Card
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 Debit Card
Now MCB brings a secure, convenient and quick payment facility that enables you to
do purchasing by using your existing MCB ATM / MCB Smart Card as a DEBIT
CARD.
Deposit Schemes
For customers who are looking for a deposit opportunity where they can purse
their funds and reap halal returns on it, we offer the following products:
Al-Makhraj Saving Account
Page 23
Al-Makhraj Ianat Account
Al-Makhraj Term Deposit
Fund Based Facilities
Ijarah Products
MCB’s Islamic Ijarah, analogous to the English term 'leasing’, is based on the
‘Ijarah wa Iqtina’ concept which means the sale of the asset to the lessee after
the Ijarah has matured. Under this scheme, MCB will be the owner of the
asset, and the customer (lessee) will be given the asset to use for a certain
period of time in return for monthly rental payments. MCB will give a
separate unilateral undertaking that it will offer to sell the asset to the
customer (lessee) at the maturity of the Ijarah agreement at a price that may be
equal to the security deposit amount, hence the term ‘Wa Iqtina’.
Types of Ijarah
Car Ijarah
Equipment Ijarah
MCB’s Competitive Strategies
To be competitive the Bank has further reinforced its position in the Consumer
Banking arena by streamlining and re-launching the consumer financing products and
introducing more convenience based solutions. With the re-launch of auto finance and
house finance products, the Bank pushed the products with full thrust. The Bank has
also launched a running finance facility against mortgage of property.
Technology continued to play an important role in improving and expanding product
offerings. The Bank introduced more IT based products to cater to the changing
Page 24
lifestyles and needs of the customers. MCB Virtual-Internet Banking was launched
with wide ranging banking solutions for the customers ranging from individual to
corporate customers and it has become the most preferred Internet banking solution in
the country.
MCB also had the privilege of being the first Bank in Pakistan to launch the
comprehensive bill payment facility through its alternate delivery channels which
include Internet Banking, ATMs and MCB Call Centre, currently with six payment
partners. Similarly, the Bank also took initiatives to increase the usage of debit
facility. To provide timely and updated information, MCB has also provided a new
look to its website which is user friendly and considerably easy to browse.
The Islamic Banking initiative has been very successful in attracting new customer,
both individuals and companies. Similarly, those relationships, which were confined
only to current account facility, have grown into stronger business relationships. The
branch network was expanded to Lahore and Multan during the last year and recently
been extended to Hyderabad and Faisalabad. The Bank plans to further expand its
Islamic Banking branch network to other metropolitan areas and also to introduce new
sharia compliant banking solutions to a wider range of customers for satisfying their
individual and business needs.
Some wide-ranging new strategic initiatives were also taken upwhich will be
important for the Bank in years to come. A private company has been formed in Hong
Kong (fully owned subsidiary of MCB) in partnership with Standard Chartered Bank,
handling trade transactions of select countries in the Asia-Pacific region. It is
projected to earn US$ 1 million in its first year of operations. To increase its
international presence, the Bank will be opening its representative office in Dubai and
entering into major strategic alliances with banks in the UAE/ especially for
marketing our consumer banking products to non-resident Pakistanis. Furthermore,
feasibility is also being carried out for entering other international markets.
MCB's operations continued to be streamlined with focus on rationalization of
expenses, re-alignment of back-end processing to increase productivity, enhancement
of customer service standards, process efficiency and controls. The Bank has taken
Page 25
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.
Management of Human Resources has been one of our core focus areas. MCB is
committed towards attracting, retaining and motivating outstanding people. Challenge
for MCB is to provide an environment in which employees can better realize their
potential. The Bank introduced 'reward for performance' where high potential officers
were identified and rewarded accordingly. In view of the competitive environment,
the Bank is focusing on performance and introducing a more robust performance
management system. MCB is also strongly committed to training its staff at all levels.
The Bank will also be implementing the full suite of the latest version of SYMBOLS
Version 8. MCB Bank will run SYMBOLS eFinance modules to deliver personalized
services to its customers over multiple delivery channels, while SYMBOLS
Enterprise Operations Center will serve as its core banking transaction-processing
engine. By implementing SYMBOLS, MCB Bank aims to raise the level of its
customer service and its time to market in new product offerings for its three core
banking businesses in Corporate, Commercial and Consumer Banking - retaining its
market leadership as Pakistan's progressive Bank.
MCB posted an after tax profit of Rs15.26b with earnings per share of Rs 24.30 in
FY07 as compared to profit after tax of Rs12.14b with earnings per share of Rs 19.33
in FY06, depicting a significant growth of 26.0% in FY07. Net interest income
increased by 13% to Rs23.9b from Rs21.2b in FY06. The gross interest income grew
by 23%, while the interest expense grew by 74%, depicting an increase in the cost of
raising funds. The non-mark-up income increased by 20% to Rs 6 billion. The major
contribution came from a 148% increase from the capital gained on sale of securities.
The asset base increased by 20% from 342 billion to 420 billion in 2007 as compared
Page 26
to 2006.Deposits showed a steady increase of 13% to bring the figure to Rs 292
billion as compared to Rs 257.4 billion in FY06. Advances increased by 10% to
Rs218b, while the investments increased by 78% to Rs 113 billion.
Recent Results:MCB Bank Limited posted profit after tax of Rs4.1b with an earnings per share of Rs
6.55 in 1Q'08 vis-a-vis of Rs 3.7 billion with an earnings per share of Rs 5.93 in
1Q'07, depicting a growth of 10.3% during the period despite dismal performance of
banking sector during 1Q'08.
Net interest income of the bank grew by just 2.5% during the period to Rs 6.1 billion
as compared to Rs 6.0 billion in the corresponding period of last year. High cost of
deposits was the main reason behind.
Political
§ Employment practices are expected to change.
§ Unions, Associations are being allowed to work effectively which can affect the
performance of the company both positively or negatively.
§ Political interference regarding policies is expected to increase as current
government is in race of power gain.
§ Due to lack of confidence on government investor is reluctant so mobilization of
funds is going to decrease.
Economic§ Inflation is very high which will decrease the demand as purchasing power is
decreasing.
§ Staff cost is increasing as basic wage rate has increased and inflation has compelled
to will compel to increase salaries.
Page 27
§ Operating costs are increasing due to inflation.
§ Interest rate is increasing so loan taking has decrerased.
§ Value of rupee is decreasing which is pressurizing the economy.
Social And Cultural§ Lack of experts is in our country regarding management hence innovative activities
are slow and conventional methods are adopted.
§ Cultural strain to savings is the reason due to which investment remains low .
§ Declining work ethics is also our problem which is mainly due to poverty, lack of
training.
§ Inadequate Accountability ,lack of good governance and lack of good infrastructure
helps creditor to cheat and heavy bad debts occur. Same situation is hoped to prevail.
§ Inadequate Empowerment is also a usual problem in our organization as every
person want to get more power hence there is less delegation of authority and decision
making.
Technical §MCB has computerized its most of the branches but still some are manual there is
need to computerized otherwise customers will get bad image.
§Now a days computerized system is used by banks whis is very effective. But MCB
will have to improve its computerized technology as some fake transactions occur by
ATM.
§Shortage of electricity is a big problem,
§Employees of each organization need IT training and organization has this trend.
MCB will have to follow it.
Page 28
Page 29
Chapter#4Organizational Structure of the MCB Branch
Page 30
ORGANIZATIONAL STRUCTURE As MCB is a banking company listed in stock exchange therefore it follows all the
legalities which are imposed by concerned statutes Mr. Muhammad Mansha is
chairman & chief executive of the company with a team of 10 directors and 1 vice
chairman to help in the business control and strategy making for the company.
Operational Management of the bank is being handled by a team of 10 professionals.
This team is also headed by Mr. Muhammad Mansha. The different operational
departments are Consumer Banking & IT div; Financial & Inter branch div; Banking
operations div; HR & Legal div; financial control & Audit div; Credit management
div; Commercial Banking div; Corporate Banking div; Treasury management & FX
Group and lastly Special Assets Management (SAM) Group.
For effective handling of branches, it has been categorized into three segments with
different people handling each category. These categories are:
a) Corporate Banking
b) Commercial Banking
c) Consumer Banking
A) CORPORATE BANKING:
These are branches which have an exposure of over Rs. 100 million. Usually includes
multinational & public sector companies.
B) COMMERCIAL BANKING;
The branches which has a credit exposure of less than Rs. 100 million but having a
credit portfolio of more than Rs. 20 million (excluding staff loans)
Usually branches in large markets and commercial areas come under this category.
C) CONSUMER BANKING
These are the branches which have exposure up to Rs. 20 million and these include all
the branches which are neither corporate nor commercial branches .
Recently the organizational structure was re-designed as follows :
Province wise branches
Page 31
Corporate Consumer Commercial
20 branches 637 branches 383 branches
NUMBER OF EMPLOYEES:
MCB is the largest bank of the country. It serves its customers well. It has the highly
skilled and qualified employees to serve their customers. Total number of employees
of MCB is 9704.
Page 32
MAIN OFFICE REGISTERED OFFICE:
MCB BUILDING, F6/G6
Jinnah Avenue, Islamabad
PRINCIPAL OFFICE:
MCB TOWER
I.I. Chandigarh Road, Karachi
REGISTRAR AND SHARE REGISTRATION OFFICE:
THK Associates (pvt) Ltd.
Shares Department, ground floor Modern Motors Houses
Beaumont road Karachi
Page 33
Numeber of branches Punjab 632
Sindh 232
NWFP 123
Blochistan 34
Azad Kashmir 19
Domestic 1040
Overseas 4
EPZ 1
Total 1045
Sri Lanka 3
Bahrain 1
Furthermore, the bank has some proposals under consideration to open more brances
in some European countries and as well as in japan & china
MEDIOCRE LEVEL MANAGEMENT
The organization chart within a department and in different offices is as follows :
Page 34
Divisional Heads ………..…………………… Head Office
Regional Head (EVP) ………..…………………… Regional Office
Zonal Head (VP) ………..…………………… Zonal Office
Branch Manager ………..…………………… Branch
)VP, AVP, GRADE 1, 2, 3(
The purpose of banks is to provide some services to the general public. And for this
purpose different banks provide different services to the people in different forms.
The Muslim Commercial Bank (MCB) is a commercial bank, in modern time
commercial banks play a very important role and their functions are manifold. The
main functions and services which Muslim Commercial Bank Limited provides to
different peoples are as follows.
1 (Open Different accounts for different peoples
2 (Accepting various types of deposits
3 (Accepting various types of deposits
4 (Granting loans & advances
5 (Undertaking of agency services and also general utility functions, few of those are
as under:
a) Collecting cheques and bill of exchange for the customers.
b) Collecting interest due, dividend, pensions and other sum due to customers.
c) Transfer of money from place to place.
d) Acting an executor, trustee or attorney for the customers. ‘Providing safe custody
and facilities to keep jewellery, documents or securities.
e) Issuing of travelers cheques and letters of credit to give credit facilities to travel.
f) Accepting bills of exchange on behalf of customers.
g) Purchasing shares for the customers.
h) Undertaking foreign exchange business.
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i) Furnishing trade information and tendering advice to customers.
For proper functioning of branches and the over all bank has been divided in different
departments. These departments handle different jobs so that division of work is there
for improvement of functions and also it is easy to control the situation. The general
division in a branch is as follows:
1 (Cash department
2 (Deposit department
3 (Advances & credit department
4 (Foreign exchange department
Technology department (new addition in order to cop with the growing needs of day
to day technology requirements)
CASH DEPARTMENT
The following books are maintained in the Cash Department:
1 .Receiving Cash Book
2 .Paying Cash Book
3 .Token Book
4 .Scroll Book
5 .Cash Balance Book
When cash is received in counter, it is entered in the Scroll Book and Receiving
Cashier Book. At the close of the day, these are balanced with each other.
When the cheque or any negotiable instrument is presented at counter for payment, it
is entered in the token book and token is issued to the customer. The token clerk and
the Cashier make entries in the paying book and payment is made to payee. At the
close of day, the Token Book and Paying Cashier Book are balanced.
The consolidated figure of receipt and payment of cash is entered in the cash balance
book and drawn closing balance of cash.
Opening Balance + Receipts - Payments = closing Balance.
This is very important department because cash is the most liquid asset and mostly
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frauds are made in this department, therefore, extra care is taken in this department
and nobody is allowed to enter or leave the area freely. Mostly, cash area is grilled
and its door is under supervision of the head of that department. All the books
maintained in this department are checked by an officer.
DEPOSIT DEPARTMENTBank deals in money and they are merely mobilizing funds within the economy. They
borrow from one person and lend to another, the difference between the rate of
borrowing lending forms their spread or gross profit. Therefore we can rightly state
that deposits are the blood of the bank which causes the body of an institution to get
to work. These deposits are liability of the bank so from point of view of bank we can
refer to them as liabilities.
The total deposits of MCB are growing since its inauguration but after privatization
there is a sharp incline in over all deposits of the bank. The increase in deposits is also
a cause of increase on total number of accounts; bank has progressed in both aspects.
TYPES OF DEPOSITSDeposits can be segregated on two bases, one is the duration in which there funds are
expected to be with the bank and second is the cost of getting these funds. So divide
deposits in two classes according to duration of deposits i.e.
1 (Time deposits / liabilities
2 (Demand deposits / liabilities
And on the basis of the cost to acquire these funds, a deposit can be classified as any
one of following four, High Cost Medium Cost, Low Cost No Cost .
Banks has different kinds of deposit schemes in order to induce deposits. These
schemes are a mixture of the above mentioned two types of deposits with an addition
of different services & requirements such as minimum balance' requirement, mode of
transaction, basis for calculation of profit, deductions, additional benefits, eligibility
for different groups.
In the similar fashion, MCB has a large variety of deposit schemes and some of them
are as follows:
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CURRENT A/C (CD):In this type of accounts the client is allowed to deposit or withdraw money as and
when he likes. He may, thus, deposits or withdraws money several times in a day if he
likes. There is also no restriction of amount to be deposited or withdrawn. However,
there is requirement of minimum balance maintenance of Rs. 1000/-. Usually this type
of account is opened by the businessmen. No profit is paid by the bank and no service
charges are deducted by the bank on current deposits account. These types of deposits
are also exempt from compulsory deduction of Zakat.
PLS SAVING BANK A/C (SA):
This type of account is for those persons who want to make small savings'. This type
of account is opened with a minimum deposit of Rs. 1000/-. Under this scheme
deposits can be made only up to a-costing amount and withdrawals are allowed twice
a week or 8 times a month. If a big amount is required a seven days notice is required
before the withdrawal. The profit is paid on these accounts on the minimum balance
during a month for the whole of that month. Zakat & other withholding taxes are
deducted as per rules of the government.
KUSHALI BACHAT A/C (KBA):
This is an advance form of PLS saving a/c, in this type of account. The minimum
balance requirement for this type is Rs. 2500/-. There is also restriction on the number
of withdrawals as well, i.e. up to 4 times in a calendar month. For maintaining this
extra balance the customer gets the benefits of profit calculation on daily product
basis and also free service of standing instructions of paying utility bills and HBFC
installments. All other rules of saving account are applicable.
PLS 365 SAVING A/C:
This is a special type of saving account in which customer maintains a minimum
balance of Rs. 300,000- and in turn he gets the benefits of daily profit calculations and
also there is no restriction on the maximum number of withdrawals as was there in the
case of KBA. There is also another advantage of this scheme that if balance on a
particular day falls below the minimum balance then only the product of that day is
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ignored whereas in KBA, if balance falls below the minimum limit then all the
products for that month are ignored on in other words no profit is paid for that month.
NOTE:
PLS Saving, Kushali Bachat & PLS 365 saving accounts can be opened in foreign
currency also. Before nuclear tests of 1998 these accounts were opened in four major
currencies but now these are only opened in USD ($). However, now bank
discourages the opening of foreign currency accounts because no forward cover risk is
provided by State Bank of Pakistan (SBP) and all the loss in case of devaluation or
depreciation in local currency has to be born by bank himself. This increase in cost
has left foreign currency account of no use, therefore, now bank prefers to accept
deposits in local currency rather in foreign exchange.
KHANUM BACHAT SCHEME:
This is a type of term deposit, in this type of deposit an account is deposited and
monthly payments of Rs. 1000/- are made by the account holder in this account for a
minimum of 10 years. After the expiry of term, he receives his funds along with profit
for the tenor. The distinctive feature of this product is that profit is calculated on
monthly basis and charged to account on end of each half /ear. Then profit is also
calculated on that amount of profit which is credited to the customer's account. So we
can say that in this type of account there is a concept of accumulated profits on profit.
This ends in getting a heavy return for the depositor at the end of tenor for his small
savings. This product was actually introduced to promote saving habits in the people.
Zakat and withholding taxes are deducted as per rules only at the time of maturity
while making payment to the customer.
HAJJ MUBARIK SCHEME:
This is also very closely related with Khanum Bachat scheme. This was designed to
help the persons who are willing to offer Hajj but are unable to save required funds. In
this deposit schemes, 2 or 3 years agreement is entered with a customer. During this
time he keeps on depositing monthly deposits and his account is charged with the
accumulated profits calculated on 6 monthly basis. The scheme is so designed that
total amount to be received at the end of this scheme comes equal to the anticipated
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cost of offering Hajj at the end of tenor. Zakat & withholding tax are deducted at the
time of payment.
MONTHLY KUSHALI SCHEME :
This scheme is similar to CGC in the sense that an initial deposit is made in this case
also but instead of lump sum payment at the end of the tenor, the person gets a
monthly profit on his deposits. Under this scheme, the bank has guaranteed minimum
rate of 1% per month but usually this rate is more than 1% per month. Zakat &
withholding tax are calculated as per rules laid down by the government.
PLS TERM DEPOSIT RECEIPTS (TDR’S)
This is a type of term deposit in which a receipt is issued for varying tenors ranging
from 1 month to 5 years or more. These are in the form of receipts and profit on these
receipts is paid biannually. These receipts are encashable after expiry of the period for
which they were issued. Different profit rates are applied to different type of TDRs.
SPECIAL NOTICE DEPOSITS (SND):
Under this deposit scheme, a deposit is received from the depositor under the
condition that he will intimate the bank before a certain period in case of withdrawals.
There are two types of SNDs, they are 7 days and 30 days notice deposits. The profit
is paid on these deposits but it is nearly equivalent to saving account rate.
FUNCTIONS
This was a brief review of different types of deposit schemes. The Deposit
Department handles the account opening, profit payment and accounting of all types
of deposit schemes.
ACCOUNT OPENING:Account opening is an agreement in which customer offers his funds and bank accepts
these funds, therefore the nature of relation between a banker and customer is of a
contractual one and all the conditions applicable to this contract act are also
applicable.
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PROCEDURE FOR OPENING:
Procedure for opening of account is as follows:
A person, who wants to open any kind of account, has to fill in a printed form which
is provided by the bank, free of cost. Separate account opening forms are used for
different types of accounts.
Bank usually requires that new depositor must be introduced by some one. An
introducer can be any person known to the bank but preferably it should be a
customer of the bank. However, the manager can open the account by his own
introduction.
If the manager is satisfied, it will obtain the full signature of the customer- on the
form and specimen signature card, makes the first deposit, and issues the cheque
book.
The following are given to the customers:
Pay-in-slip is the proof of deposit. For every payment which is. to be deposited in the
bank, the pay-in-slip is to be filled up. The object of this book is to provide the
customer with the bank's acknowledgment for receipt of money to be credited this
account.
Cheque Book contains a number of cheques. It enables a customer to make
withdrawal from this account or make payment of various parties by issue of cheque.
Pass Book is a copy of the customers account as appears in the books of the bank.
Balance is recorded in this book by the Clerk.
NOTE:
1 (In case of partnership account partnership deed should be attached .
2 (In case of companies memorandum and article of association, certificate of
incorporation, certificates for commencement of business, list of directors and board
resolution for opening of account is also obtained from the customer .
3 (Accounts of Trusts, Executors & Administrators can also be opened but with the
prior approval of the Head Office.
Profit payment & calculation is done in accordance with the rules of each type of
deposit scheme-by the deposit department. The products for each deposit scheme are
calculated separately and added till the end of 6 month period. Then the sum total of
these products is multiplied with the respective profit rates which are issued by the
Head Office at the end of each half yearly closing. The profit provisions for each type
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of deposits are also calculated on monthly basis by the same department in order to
calculate the net profit or loss position of the branch .
Accounting entries are also made in the respective books of account by this
department. However, in small and medium size branches, the accountant performs
the book keeping duties for all kinds of ledgers .
CLEARING DEPARTMENT
Every banker acts both as a paying as well as a collecting banker, It is however an
important function of crossed cheques. A large part of this work is carried out through
the bankers clearing house.
A clearing house is a place where representative of all banks of the city get together
and settle the receipts and payment of cheques drawn on each other. As the collecting
banker runs certain risks in receipt of their ownership the law has provided certain
protections to the banks.
The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a cheque or
draft may cross the instrument generally or specially. It further lies down that a
crossed cheque can only be paid to a banker, who collects it for a customer in good
faith and without negligence.
TYPES OF CHEQUES COLLECTEDTransfer cheques: are those cheques, which are collected and paid by the same branch
of bank.
Transfer delivery cheques: are those cheques, which are collected and paid by two
different branches of the same bank situated in the same city.
Clearing cheques: are those cheques, which are drawn on the branches of some other
bank of the same city or of the same area, which is covered by a particular clearing
house.
Collection cheques: are those cheques, which are drawn on the branches of either the
same bank or of another bank, but those branches, are not in the same city or they are
not the members of clearing house.
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FUNCTIONS OF CLEARING SDEPARTMENT:
1 .To accept Transfer, Transfer delivery, clearing and collection cheques from the
customers of the branch and to arrange for their collection.
2 .To arrange the payment of cheques drawn on the branch and given for collection to
any other branch on MCB or any other members or sub member of the local clearing
house.
3 .To collect amount of cheques drawn on members, sub-member of local clearing
house, sent for collection by MCB Branches, not represented at the local clearing
house.
COMMON PROCEDURE FOR ALL CHEQUES:
i) Receiving and scrutinizing the cheques and other deposit instruments, and the pay-
in-slip at the counter.
ii) Fixing the stamps.
iii) Scrutiny and receipt by the authorized officer.
iv) Returning the counter file to the depositor.
v) Certificate and confirmation by the officer in charge of the department, .
vi) Separating the cheque into transfer, transfer delivery, and clearing cheques.
SCRUTINY OF CHEQUES a) The instrument should be neither stale/ nor post-dated.
b) If the instrument is crossed not negotiable it can be for the third party (an endorsee
of an order cheque, or a holder of bearer cheque).
c) The Instrument should not bear any unauthorized alternation.
d) The instrument should not be mutilated .
e) The amount in words and figures should be same.
f) The instrument should be drawn on any local branch.
g) If cheque is "crossed Account Payee's" only or "Payee's Account", it should only
be accepted for collection for the payee's account.
h) The cheques or drafts should not be crossed specially to any other bank.
i) A cheque payable to a firm should not be accepted for credit to a partner's account.
j) A cheque payable to one of the joint account holders should not be collected for the
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joint account without the payee's endorsement, or consent.
k) A cheque drawn by a customer in the capacity of agent, Attorney, or Manager of
his company or firm, should not be collected for credit to his personal account.
l) Pay orders, although negotiable should not be collected for third parties.
m) Do not collect an instrument in the account of an agent or of the servant of the
payee or endorsee of the instrument.
n) “Not transferable" instruments, like Telegraphic Transfer, or Mail Transfer
Receipt, Pay-slips, and Treasury Receipts, should be collected for a person other
payee.
o) If an account is new or the balance or operation of the account is not satisfactory,
satisfy your self about the title of the customers to the instruments before accepting
the deposits.
p) Branch agent's permission should be obtained before accepting a third party cheque
or draft for the credit of the member.
q) If the payee is a Government Department, Government Official, or a trust account
the instrument cannot be collected, but for the payee's account.
r) If the payee of an instrument is UBL, it can be collected for credit of the drawers
account, or the amount of the instrument may be utilized as desired by the drawer in
writing.
s) Cheque payable to a trust, account should not be collected for credit to a trustee's
account.
t) All the endorsement should be regular, and no endorsement should be missing.
Note: No charges are charged by the bank for this purpose.
LEDGERS OF DEPOSIT DEPARTMENT:The following types of ledgers are concerned with deposit departments:
1 .Saving Ledgers
2 .Current Ledgers
3 .Profit & Loss Sharing Ledgers
4 .Fix Deposit Register
5 .S.N.T.D. Register
6 .Call deposit register
7 .Cumulative deposit certificate register
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8 .Cash book
9 .Daily profit and loss summary book
10 .Officer spaceman signature book
11 .Voucher register
However, in computerized branches all these ledgers are no more there but only day
books are maintained. The rest of the work is done on computers .
ADVANCES DEPARTMENT
Advances are the most important source of earning for the banks. MCB is also giving
full attention towards this aspect and it is also obvious from the growing portfolio of
advances and from very low delinquency rate. The credit portfolio of this institution is
in a very much better shape than other financial institutions of Pakistan and the credit
goes to the management and the staff who are concerned about the quantity and
quality as well.
1 (Loans
2 (Cash Credits
3 (Overdraft
1 )LOANS:
Loans are monetary assistance by a financial institution to a business, individual etc.
The loans are granted by the bank in lump sum, so these types called fixed or demand
loans. Interest is charged on the whole amount of a fixed loan.
The borrower withdraws whole the amount of loan. This type of loan is normally
granted against security of gold documents.
In case of demand loans against gold or documents, a demand promissory note for the
amount of loan is taken from the borrower loans are granted under;
A) LOAN AGAINST GOLD:
Under this type of loan, which is granted to the borrower the Head Cashier estimates
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the value of Gold or Gold ornaments through an agent (Gold smith) and keeps a
margin of 40 to 50 percent. After the opening the gold loan account a token is given to
the borrower, which is a bank receipt.
On repayment of loan, the gold or ornaments held as security for it, together with the
demand promissory note duly discharged is returned to the borrower and his receipt
for the gold ornament taken in the demand loan ledger. This receipts states that he
ornaments returned are complete and in order. Part delivery of ornaments is given
against part payment of a loan but care is taken that the ornaments still in banks
possession fully covers the balance of the loan outstanding. The interest gold loan is
to be applied with quarterly.
B) LOAN AGAINST PLEDGED OF STOCK:
In case of advancing such types of loans, the following precautions are dept in the
mind:
i) Stock pledged must be readily saleable
ii) Products should be readily saleable
iii) Advance should be within the borrows means
REQUIREMENT FOR LOAN:
For granting loan to any party or individual, the bank checks following particulars of
the client:
1 (Credibility
2 (Feasibility Report
By Credibility, bank Judges the credibility of the client by his past bank record, CBI
report etc. it is very important in making decision about giving him loan.
Feasibility report is on the running or proposed business of the client. The report
enables the bank to judge the likely return of the business.
2 )CASH CREDIT
Cinder such cash account is opened in the name of the customer who borrows from
the bank. Customer is granted a loan up to a certain limit, sanctioned by the head
office, from which he can draw when he requires and interest is charged on the
amount actually utilized by the customer. In order to avoid the danger of idle fund, the
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bank charges a certain rate of interest, even if the customer does not withdraw any
amount. The rate charged by the bank on cash credit in 46 paisa per thousand on daily
basis .
The credit is usually given against the securities of goods or merchandize as follows :
1 .ADVANCES AGAINST PLEDGE STOCK IN TRADE OR PRODUCTS
When a cash is granted against the pledge of stock or product, cash credit form is
taken, from the certain products or stock, but the actual pledge is created when the
stock or finished product are placed under the bank's lock or the document of title are
duly endorsed to the bank by the borrower.
2 .HYPOTHECATION OF STOCK ON FINISHED PRODUCTS:
The difference between pledge and hypothecation is that under a pledge the
borrower's goods are placed in the bank's possession under own lock, whereas, under
a hypothecation, they remain in the possession of the borrower or guarantor and are
merely charged to the bank under documents signed by them. Even though the
documents empower the bank to take possession of the goods hypothecated, but it is
possible that the borrower may actually resist any attempt.
3 .MORTGAGES OF PROPERTY:
Title deeds of immovable property are accepted by the bank only as collateral security
or alternatively as unauthorized security.
MODES OF CREDIT FACILITIES
There are two types of facilities
A FUNDED FACILITY
1 (Running finance
2 (Cash finance
3 (Demand finance
4 (Payment against documents
5 (Finance against imported merchandise
6 (Finance against trust receipt
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7 (Export finance
8 (Foreign bill purchased
9 (Others
NON FUNDED FACILITY
1 (Letter of credit
2 (Letter of guarantees
3 (Bid bonds
4 (Performance bonds
5 (Other facilities
REMITTANCES
DEMAND DRAFT 1 (Demand draft is a written order drawn by a branch of a bank upon the branch of
same or any other bank to pay certain sum of money to or to the order of specified
person
2 (Demand draft is a negotiable instrument.
3 (Legal provisions are same as that of cheque.
4 (It is to be ensured that purchaser can at least sign.
5 (Thumb expression is not accepted on DD
6 (The following are the parties.
a) purchaser
b) issuing branch
c) drawee branch
d) payee
A demand draft may be issued against the written request of the customer before
issuing it must be seen that the demand draft is in order .
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SCRUTINY OF APPLICATION
The DD application must be scrutinized by the counter clerk in respect of following
points.
A There should be branch where payment is to be made .
B full name of payer should be mentioned
C amount in words and figures must be same
D application to be signed by the purchaser
TELEGRAPHIC TRANSFER
■Transfer of funds from one branch to another branch of the same bank or upon other
bank under special arrangements.
■Telegraphic transfer is not negotiable
■The funds are not payable to bearer
■Minor cannot avail this facility
PARTIES
Following are the parties involved
■Applicant
■Drawing branch
■Drawee branch
■Beneficiary
Full name of the beneficiary or account number should be mentioned in the
application form.
■Instruction regarding mode of payment should be obtained.
■A record in the remittance outward register should be maintained.
■All the remittance must be controlled through number.
MAIL TRANSFER ■Transfer of funds from one branch to another branch of the same bank with in or
out side the city is called mail transfer.
■Mail transfer is not negotiable
■The procedure is same as for DD
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■All precautions must be observed
PAY ORDERS ■Pay order is meant for bank own payment but in practice they are also issued to
customers.
■A pay order is written authorization for payment made in a receipt form issued and
payable by the bank. To the person named and address.
The following are the parties
A purchaser
B issuing branch
C payee
■Charges must be recovered at prescribed rate .
■Pay order should be prepared like demand draft .
■A record of all issued and paid should be maintained .
■Credit voucher should be prepared
TECHNOLOGY DEPARTMENT
Technological advancements are also affecting the banking industry. The foreign
banks have a competitive edge over all local banks in their technologies'
advancements and automated systems. Local banks have also realized the gravity oil
this situation and are striving to add computerized systems to their branches
MCB is ahead of all other local banks in this field and now it is in a position to even
compete with foreign banks. There are more than 1045 branches of MCB all over
Pakistan and out of these more than 300 branches are fully computerized Almost
all .the branches of big cities are computerized; therefore, the need for a technology
department at each branch is growing. Now a day, a computer division is working in
each city to provide service to ad the branches of that area.
MCB has also introduced the now concept of online banking. There are now more
than 250 branches linked through this system and they can transact with each other
directly using computer systems at their own branches. Now customers do not have to
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wait long for their transactions and can operate their account through all the online
branches.
ATM NETWORK:ATM stands for Automatic Teller Machine. This machine is used to transact in one's
account without intervention of humans. These machines are basically used for taking
cash, confirming balances and requesting statements / cheque books.
MCB has the largest ATM network in the country at the moment with almost one
ATM at each online branch and also ATM terminals at International Airports. This
network covers more than the 27 cities of Pakistan including the provincial capitals
and large commercial cities of the country.
ATMs are operated through a card issued to the valued customers and by application
of Personal Identification Number (PIN number). A person can withdraw from any
machine across Pakistan with having an account in only one branch of MCB. This
was only possible with the help of online system. In this system all the machines are
linked to central banking host at IRM division Karachi through either satellite or
telephone controller. This system identifies the card holder and his PIN Number .
Now MCB has also entered into a contract with Cirrus which is a subsidiary of
MasterCard. This contract will enable an ATM card holder to use his account even
when he is out of country at all the ATMs where Cirrus logo is displayed.
Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/-
in a day. The annual fee for this card is Rs. 300/- only .
Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day.
These cards are issued to the persons having more than Rs. 500000/- as their average
balance .
International Cards are issued in collaboration with Cirrus and are useable all over the
world with maximum withdrawal facility according to the standards of Cirrus .
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Chapter#5
Internship Program
INTRODUCTION:
I had done my internship in MCB bank limited, G.T Road GUJRAT. Following is the brief introduction of the branch.
Branch Code 1297
Address Kutchery Chowk, GUJRAT
Contact Numbers 053-3524692
In the Muslim Commercial Bank Ltd. I really enjoyed working with the staff of
Kutchery Chowk Gujrat (1297)and having a wish to be employee of MCB. It was
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almost impossible to work in all the departments within that limited time. But on my
request, the staff of the branch provided me the opportunity to work in the different
departments for the sake of practical knowledge. I feel highly indebted to work in this
Branch on the request of the manager of that branch because I learnt a lot in that
branch.
During my internship training in the MCB as I early mentioned that I have worked in
different departments & seats and learnt the followings
UTILITY BILLS COLLECTION
Muslim Commercial Bank Ltd. collects utility bills on behalf of WAPDA, Sui Gas
Companies, and Pakistan Telecommunication Corporation Limited by putting the
stamp on the utility bills “Paid”, Date of payment, Signature of the officer receiving
the utility bills. After receiving utility bills a list is made on the form which is called
Bills scroll form. One copy of the scroll is with the bank for evidence whereas the
original copy with the receipt of the bills is sent to the billing department of the
respective corporation. The bank charge commission on the bills .
OPENING NEW ACCOUNT BASICS
During the span of mine internship in MCB I learned and observed a lot of about the
opening of an account. Basically I think that the opening of an account is the
establishment of a contractual relationship between the banker and the customer. By
opening an account at a bank a person becomes a ‘customer’ of a bank. Further I am
going to express the basic requirements and steps involved in the opening of an
account.
HOW TO OPEN AN ACCOUNT )IN GENERAL)
Before opening an account in MCB I observed that the following points must be
considered in this regard.
1 .Another account holder of the bank should properly introduce the new customer.
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2 .The account holder should sign the account opening form in the presence of bank
officer and the signature is duly verified.
3 .A copy of identity Card is required by Bank.
4 .Against submission of the Bank’s prescribed application form, duly introduced in
the manner provided and on supplying such document, as may be required and
account may be opened. The Bank reserves to itself the right to refuse to open and
account without assigning any reason .
5 .Each account shall be allotted a distinct number that is to be quoted in all
correspondence with the bank relation to the account.
6 .Minimum amount to open an account is required regarding the nature of account.
PROCEDURE TO OPEN AN ACCOUNT
According to my practice in MCB, when a customer wants to open an account, the
bank officer gives him an application form. All information, which is necessary to be
known by the bank, are requirements of the application form. Form also requires the
essential documents to be attached by the customer.
Basically following information is required to open an account with MCB
1 .Title of Account
2 .Full Name of Applicant
3 .Occupation
4 .Address
5 .Telephone No.
6 .Currency of account
7 .Nature of Business
8 .Introducer’s Name, Address & Signatures
9 .Special instruction regarding the account
10 .Initial Amount of the Deposit
11 .Signature of the applicant
PROCEDURE TO HONOUR A CHEQUE
During my internship training in the Muslim Commercial Bank Limited, I observed
and found Cheques are received for the following purposes.
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i) For Cash payments
ii) For transfer(from one account to another account)
iii) For Clearing
I) FOR CASH PAYMENTS
Cheques which are presented on Bank counter must be checked in the following way:
1 (Date .
2 (Signature of Drawer.
3 (Signature of Payee.
4 (Whether Bearer has cancelled.
5 (Whether Payee account duly is there.
If condition 4&5 exist then check the signatures of Drawer.
6 (Match the figure and wordily amount of cheque.
When all above matters are satisfied then come to the Token register and check:
1 (Token number.
2 (Cheque number.
3 (Amount of cheque.
4 (Particulars.
Two stamps are put on cheque.
a) Cash Payment (on the face of cheque).
b) Stamp for Token (on the back of cheque).
On stamp which is put for token their details are as follows:
•Token number.
•Time of giving token to client.
•Signature of token giver.
Note:
Payment is also made when cheques of same branch account is presented for transfer
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to other account in same ranch along with cheque for payment.
II) CHEQUE FOR TRANSFER:When cheques are presented to be sent for collection and drawn on bank situated
within the city then there are three stamps to be put on face as well as on back of
cheque.
a) Crossing Stamp (face).
b) Transfer Stamp (face).
c) Bank Manager Stamp (back).
Only in MCB branches .
CHEQUES FOR CLEARING:
There are two stamps put on each cheque, sent for clearing:
a) Crossing Stamp.
b) Manager Stamp.
CHEQUES IN COLLECTION :
When cheques received in clearing are intra city then these are controlled under CC.
First of all, these cheques are recorded in day book then allotted number and then
serial number. Then a performa is prepared in which Bank on whom was drawn,
cheque number, amount, beneficiary name are recorded. After completing that
performa cheque is posted along with performa.
CLEARING
Following information is entered in clearing register.
a) Name of favoring party.
b) Name of bank on whom drawn.
c) Branch.
d) Cheque number .
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e) Amount.
Clearing is sent after entering in register. In clearing register future date and day is
putted. Cheques and vouchers are then separated and Cheques are sent for clearing.
Clearing credit vouchers are entered on clearing sheet. Such credits are balanced by
giving debits to cheques received in clearing from other branches. At the beginning of
the day clearing return sheet is received. Vouchers are made if
1 .Clearing received is more than clearing delivered then Credit voucher.
2 .Clearing delivered is more than clearing received then Credit voucher.
On the same day, credit vouchers sent for clearing are entered on the sheet's credit
side.
Cheques are sent to NIFT after taking them on calculator, their total amount along
with total number of instruments. A summary is prepared and sealed after noting the
number of seal in summary.
Telephonic Transfer
DD- Demand Draft
PO- Payment Order
For TT, the account of beneficiary must be there in branch. DD is also prepared and
beneficiary can get payment.
First of all, Performa is filled by purchasing party along with cheque or cash payment.
When cheque is received it is first posted in computer section in order to check the
balance of account. After posting the bank officer calculate tax if National Tax
number is not there. i.e .
Rs.100000 @0, 1%
More than Rs.40000 @0.4%
Commission and postage charges are also calculated. These are paid in cash or
otherwise by cheque.
ISSUANCE OF CHEQUE BOOK
During my period of internship in MCB i observed that when a account is opened
then a cheque is issued to thecustomer for drawing his money at per rules. Following
procedure is adopting for the issuance of cheque.
When a customer opens an account with the bank, he is provided with cheque book
for withdrawals from account. However, the first cheque book is given to the
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customer only when all the required documents are checked. A cheque book contains
ten, twenty five, fifty or hundred leaves. The cheque book also carries a requisition
slip for the issuance of the new cheque book. This slip is duly filled and singed by the
customer. The signature of the customer is verified by the bank and new cheque book
is issued to the customer and serial numbers of the cheque are duly entered in the
book of the bank. Along with the signature, person should also write his full name &
address.
Usually only one cheque book is issued at a time, however big concerns who need a
number of cheque books at a time, may ask the bank to stock as number of cheque
books in their name and to point their name on these cheque books.
Bank debits the client’s account for excise duty of Rs.2.50/- per cheque and keeps the
cheque book ready for the customer, as on his advice.
The officer keeps and maintains the cheque book register Cheque book inventory and
cheque books issued are recorded in this register. The account number for which the
cheque book is issued and the number of leaves are also recorded in this register when
the cheque book issued an entry is passed in the cheque book issue register.
RUPEE TRAVELLER CHEQUES: RTCS
When RTCs are to be issued payment is received in cash or by cheque, tax @0.03% is
charged id National Tax number is nor available. RTCs are issued in consecutive
number of face value of
v Rs.1000
v Rs.5000
v Rs.10000
v Rs.50000
v Rs.100000
Specimen signatures of buyer are taken and clearing slip is in four pages. One is sent
to Head office, one to RTC division, one for bank record and one for client.
If client wants immediate payment of RTCs then he will bring RTCs with two
signatures, one copy of deal and ID card copy. Payment is made. RTCs can be
endorsed to other party. Once receiving party will pay the RTCs along with credit
vouchers in their relevant account with Bank. Payment will be credited to account of
paying party.
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Learning summary:
I did my internship at MCB Kutchery road Branch, one of the leading banks of
Pakistan. The bank has completed more than 18 years, since its privatization and
during this period, MCB has performed well and has sustained growth.
It was a great experience for me to work with such a well-known and reputed bank.
The internship proves very valuable for me as it not only enhances my skills and
qualifications but also gives me experience and brings clarity in my future plans. I
gained a number of skills that will be beneficial for me in my future career some of
these are
Enhanced my confidence level
Strengthen my interpersonal and communication skills
Developed work ethics in me
Helped to improve team work and leadership skills
It gave me a lot of confidence and manners to behave in the working
environment
Improved time management skills and made me punctual
It helps me to understand how to behave in different situations professionally
It made me think critically in difficult situations and act accordingly
Improved my decision making capability
After doing internship I acquired good work habits
It provided in depth knowledge of the formal functions of the banking sector.
Internship provides opportunities to experiment and purse careers that match
academic and personal interest. Planning about the career is always difficult as
there are many doubts regarding different possible opportunities and it is really
difficult for the students to select the best possible place for their future job
because they do not have enough knowledge about different work settings, they
do not have the experience that can provide help to them in attaining the best
possible job alternative. I am always interested to get a job in banking sector but
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there were some doubts in my mind about the banking environment, bank timings
etc. but after internship all doubts are vanished. I have personally experienced the
banking environment and concluded that it is very good and safe for females. Six
weeks internship program helped me to critically analyze the banking sector as a
whole and I can openly say that banking sector provides conducive environment
for career growth.
It is evident from this report and the financial statements of MCB that it is making
progress by leaps and bounds. The profits of MCB have grown considerably during
the last few years and this trend is expected to continue into the future. Therefore, we
conclude that MCB has a very prosperous present and future, which assures the
shareholders of wealth maximization. Side by side of it I think that if bank would be
able to cover and control on the above mentioned recommendations then it would be
in such a situation that will really lead it towards the road of prosperity, development
and integrity. And with the above mentioned sentences I think there is too fault of the
customers and in order to make the proper working of the bank the customers should
also cooperate with the bank which will be really a good, ambitious and diligent
condition for the bank. And then bank will be really in such a situation and position to
compete its competitors in the country as well as on international level.
:
StrengthThe strengths of MCB are as:
Ø MCB is the first Pakistani privatized bank and because of its quality management,
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marketing, innovation in products and services is performing well in financial market.
Ø Has established a good reputation in the banking market
Ø Strict adherence with the banking procedures requirements, SBP’s prudential
regulation requirements and its SROs and international banking requirement as well
as to its own set policies
Ø Strong and its attractive products
Ø Better focus on customer services and customization
Ø Flexibility with the changing environment
Ø Induction of the highly qualified professionals to change overall set up
:
Weaknesses
Ø The noted weaknesses of MCB are as:
Ø The majority of people are not well aware about the products of MCB .
Ø Therefore it should advertise extensively especially RTC and Master Cards .
Ø A behavior has been noted that bank tries to feel at ease with good looking, rich and
educated people and the poor looking customers feel some bit strange in the
environment of the bank. The bank employees should try to accommodate
behaviorally all type of customers .
Ø In MCB there is lack of specialized skill because of job rotation policy of human
resource department. The bank should concentrate upon increasing its abilities on
individual service basis .
Ø Mismanagement of time is another big mistake in MCB branches, the bank official
time of closing is 5:30pm but due mismanaging of time allocation and work the staff
is normally on their seats till 7:00 or 8:00 clock.
Ø Process of development is bit slow due to its conservative approach
Ø Never prefer to be a leader and prefer to be a follower of others
Ø Slow improvement and acceptance of technological changes
Ø More emphasis on deposit accumulation and less on their mobilization
Opportunities
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Ø Greater potential and opportunities for Credit Division if Liberal Policies being
adopted.
Ø Can grab more market share for its RTCs, remittances and forex department
through effective promotional and liberal policies.
Ø Inclusion of highly qualified professional can change the whole scenario and
position of the bank if they have given the due liberty in performing their duties.
Ø Adoption of information technology will improve the customer services.
Ø More mobilization of accumulated deposit is possible through innovative financing
to
·Agro Based Sector
·Leasing
·Personalized Financing
Threats
Ø Change in government policies has affected the banking business. Still banks have
to wait to get permission of state bank. The freezing of foreign currency accounts is a
vital example of letting people not to trust on banks.
Ø The Competition has become severe by the entrants of so many banks, So to exist
one will have to prove himself in its services through excellent management and will
have to satisfy its shareholders. Otherwise he will be out the market.
Ø Employees unions have been allowed if not managed properly can affect
performance.
Ø The decrease purchasing power of consumer in the current economic situation of
the country affecting the business activity speed too much and the result is the low
investment from the investors in new projects can create problem for the bank
because it is working a lot in trade.
Ø Introduction of credit marketing by local and foreign banks is badly affecting the
mobilization of the MCB’s deposits due to the non presence of such department in it.
Ø Introduction and adoption of information technology as well as promotion of the
computer culture by the local as well as foreign banks will definitely affect the
services and business of the MCB.
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From the Quantum of the profit and its financial data it can be easily judged that after
privatization, MUSLIM COMMERCIAL BANK is performing well. Its deposits are
growing day by day and so its profitability. The controlling body is responsible for the
productive performance of the Bank.
Following are my observation and suggestion to improve the efficiency for the
development of the economy.
A big portion of the home remittance is sent by Pakistan working capital through
Muslim Commercial Bank Limited. As we know a big portion of this amount is
wasted purchasing of luxuries. The people motivated to save money by offering the
deposit through various investment schemes. The rate of profit should increase 1% or
2% than other banks and it would be profitable step for bank .
There is a criticism on the banking management that the salaries of the employees are
decreasing in every succeeding year. And I think this will shake the confidence and
working habit of the employees.
There is another recommendation about the bank that there is no proper timing of the
bank and there is made an unnecessary delay in the banking transactions, which might
not be a good sign for the bank from future prosperity point of view.
Staff turnover particularly of trained staff result in financial and other losses. The
amount spent by the bank on employment, induction and training of outgoing officers
constitutes to beat till another officer should ready prove this work. The exodus of
bank officer in the past has worsened the situation .
Most of the bank employees, are sticking to one seat only with the result that they
become master of one particular job and loose their grip on other banking operation.
In my opinion all the employees should have regular job experience all out-look
towards banking. The promotion policy should be adjusted .
Refresher Courses for the staff are most important in any international organization.
Alt the employees should have these courses according to their requirement. Foreign
experts can also be called for this purpose .
Every year some of the employees should be sent for training to other countries and
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employees from other branches should be brought here. Some more reading material
should be provided. The purpose should be to educate the employees with the advance
studies in their field. The employee should be provided the opportunities to attend and
participate in seminars and lectures on banking .
Bank should give some more incentive to its employees in order to remove the
conflict between lower and higher officers and should try to improve the working
condition of the bank.
As such system should be designed that every employee who has some problems with
his officers can communicate it to the higher management and some steps must be
taken to improve that.
Recruitments should be strictly on merit basis and induction should be after proper
and extensive training .
Old and lazy staff should be replaced by young, qualified and energetic staff .
Foreign branches should be opened in order to capture the international market and to
earn international repute for the bank .
Working environment, equipment, furniture and staff dressing should be according to
the modern banking style .
Proper attention should be paid to upgrade customer services .
Bank should adopt the global organizational banking structure to meet the
international standards of banking sector
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REFERENCE:
http://www.oppapers.com/essays/Pakistans-Banking-Sector-Industry
Analysis/181995
http://en.wikipedia.org/wiki/Economy_of_Pakistan
http://en.wikipedia.org/wiki/Muslim_Commercial_Bank
http://www.blurtit.com/q501915.html
MCB Brochures Manuals
Annual Report2005
http://www.ccsenet.org/journal/index.php/ijbm/article/view/1179/1127
http://www.mcb.com.pk/psc/online_services/pay_bills.asp
Annual Report2008
http://www.mcb.com.pk/psc/loans/easy_personal_loan.asp\
http://www.mcb.com.pk/psc/cards/mcb_visa.asp
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