Internship Report on MCB

INTERNSHIP REPORT

MCB

Report requirement for the degree of

MBA6th finance

University of Gujrat

INTERNSHIP REPORT

ACKNOWLEDGEMENT

Most grateful to Almighty Allah who enable me to utilize my

knowledge and skills for the preparation and completion of this

internship report am thankful to God who helps me to complete

my internship report. I am also thankful to teachers, friends and

bank staff who guided me. The bank staff was cooperative,

friendly and sincere. Mam Iram who was the general manager of

the MCB helped me a lot in the learning process.


INTERNSHIP REPORT

EXECUTIVE SUMMARY

The banking structure in Pakistan comprises of the following types, State Bank

of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks,

Cooperative banks, specialized credit institutions. The state bank of Pakistan

is the Central bank of the country and was established on July 01, 1948. The

network of bank branches now covers a very large segment of national economy.

The State Bank of Pakistan issues the shares of these periodically. Bank

employees and other common peoples can also purchase these shares and earn

profit. MCB was incorporated under companies’ act 1913 on 9th July; 1947.The

bank transferred its registered office to Karachi, where the Head Office is

presently located.

In April 1991, MCB became Pakistan’s first privatized bank. The bank has

corporate branch at Shahrah-e-Faisal Karachi (SFK). The bank is using SWIFT

for transfer of information about imports and exports. MCB SFK branch has

Currently Following three Departments General Banking Department,

Advances Department & Foreign Exchange Department.

To open an account the customer has to meet the general banking manager with

an introducer. The procedure begins with the punching of account opening form

to the customer file i.e. customer’s master file. Before closing any account, bank

send letter to the account holder for informing him that his account is going to be

closed. There is need of an approval form higher authority to close any account.

Current deposits are those which are payable to bank whenever demanded by

the customer. Bank does not pay any profit on current deposits. The following

are the financial products/services of MCB Malay Mail Scheme, PLS Account,

Saving 365 Account, Capital growth certificate scheme, Fund Management

Scheme, Khushali Bachat Account, Term/ Fixed Deposits and others like

night banking, credit cards, traveler cheques.

In remittance department like any other bank MCB also have instruments for

transferring of money, Telegraphic Transfer, Mail Transfer.


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In cash department both deposits and withdrawals go side by side. This

department works under the accounts department and deals with cash deposits

and payments. This department maintains the following sheets, books, and

ledger of account cash received voucher sheet Cash paid voucher sheet, Paying-

in-slip, Cheque Book, Cash balance book. The clearing in Karachi at MCB or

other banks is being done through NIFT (National Institute of Facilitation

Technology).

Bank provides this facility to the people who need advance money to meet their

requirement. Party dealing with other banks financial condition of borrower

business and as a first step credit proposal is being made. MCB provides

advances, which are two types. Secured Advances and Unsecured

Advances.MCB usually classified advances in to following types Agricultural

Advances, Commercial Advances Industrial Advances. Commercial Advances

are of following types Demand Finance, Cash Finance, Foreign bills purchased,

Finance against imported goods, Finance against foreign bills, Export Refinance

Part I (Pre Shipment) & others. Banks Agriculture division deals with the

agriculture advances. Bank provides the Agriculture Advances in order to

enhance and support the agriculture sector of the country. Farm Credit & Non

Farm Credit are two basic types of agriculture credit.

In foreign exchange, MCB is dealing Foreign Currency Accounts, Foreign

Remittances, and Foreign Bills for Collection, Imports & Exports, Foreign

currency accounts & the foreign currency department deals with the following

types of accounts, Dollar Khushali account, Current account, Saving bank

account, Term deposit, Prime Currency Scheme. Foreign accounts are

convertible on floating rate available to the bank. Letter Of Credit facility is being

provided by MCB in foreign exchange.


INTERNSHIP REPORT

HISTORY OF THE MCB BANK LIMITED

Before separation of Indo Pak, the need for more Muslim banks was felt. And

Muslims having strong financial capacity were thinking to invest in this sector as

well. This was the idea which paved the way for setting up MCB Bank Ltd known

as MCB. This was the third Muslim bank in the subcontinent.

History

This bank was incorporated under companies’ act 1913 on 9th July, 1947 (just

before partition) at Calcutta. But due to changing scenario of the region, the

certificate of incorporation was issued on 17th August, 1948 with a delay of

almost 1 year; the certificate was issued at Chitagong. The first Head office of the

company was established at Dacca and Mr. G.M. Adamjee was appointed its first

chairman. It was incorporated with an authorized capital of Rs. 15 million.

After some time the registered office of the company was shifted to Karachi on

August 23rd, 1956 through a special resolution, now recently the Head office of

MCB has been transferred to Islamabad in July, 1999 and now Head office is

termed as Principle Office.

This institute was nationalized with other on January 1st, 1974. At that time it

had 506 branches and deposits amounting to Rs. 1,640 million. Although. MCB

has a reputation of a conservative bank but nationalization also left its effects on

this institute as well and by end of year 1991 in which it was privatized the total

number of branches were 1.287 and deposits amounting to as high as Rs.

35,029 million.

Privatization

When privatization policy was announced in 1990, MCB was the first to be

privatized upon recommendations of World Bank and IMF. The reason for this

choice was the better profitability condition of the organization and less risky

credit portfolio which made'' it a good choice for investors. On April 8th, 1991, the

management control was handed over to National Group (the highest bidders).

Initially only 26% of shares were sold to private sector at Rs. 56 per share.


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After privatization

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.

After privatization, the growth in every department of the bank has been

observed. Following are some key developments:

Launching of different deposit schemes to increase saving level.

Increased participation on foreign trade.

Betterment of branches and staff service level.

Introduction of Rupee Traveler Cheques & Photo Credit Card for the first

time in Pakistan.

In short MCB is one of the leading banks of Pakistan with a deposit base of about

Rs. 280 billion and total assets of around Rs.300 billion. Incorporated in 1947,

MCB soon earned the reputation of a solid and conservative financial institution

managed by expatriate executives. In 1974, MCB was nationalized along with all

other private sector banks. This led to deterioration in the quality of the Bank’s

loan portfolio and service quality. Eventually, MCB was privatized in 1991.

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

improving service quality, investment in technology and people, utilizing its

extensive branch network, developing a large and stable deposit base and

managing its non-performing loans via improved risk management processes.

MCB BANK TODAY

MCB today, represents a bank that has grown with time, experience and

Pakistan. A major financial institution, in scope and size, it symbolizes a fully

growing tree evergreen, strong, and firmly rooted.

Foreign trade


INTERNSHIP REPORT

The bank conducted import business during the year amounting to RS. 54.0

billion as compare to RS. 56.4 Billion In 2005. The export business slightly

improves to RS. 36.9 Billion From RS. 35.1 Billion. In 2006. Home remittances

decline to RS. 16.7 Billion From 30.7 Billion the decline in home remittances

business was due to freezing of Foreign Currency Accounts, which has affected

the confidence of Pakistanis working overseas.

Year 2006 compliance

MCB’s strength lies in providing a technological base at the gross root level of

the society with a challenge to educate and assimilate such systems across vast

cultural and economic backgrounds. With over 768 automated branches, 263

online branches, over 151 MCB ATMs in 27 cities nationwide and a network of

over 16 banks on the MNET ATM switch, MCB continuously innovates new

products and services that harness technology for the customer’s benefits.

Social sector

The bank is participating in the Prime Minister self-employment Scheme. The

application received from various applicants is being processed on merit and

disposed off as quickly as possible.

The business

MCB is in it’s over 50 years of operation. It has a network of over 1,000 branches

all over the country with business establishments in Sri Lanka and Bahrain. The

branch break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) and

Blochistan (3%) respectively.

MCB has an edge over other local banks, as it was the first privatized bank. The

State Bank of Pakistan has restricted the number of branches that can be

opened by foreign banks, an advantage that MCB capitalizes because of its

extensive branch network.

Fifteen 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.


INTERNSHIP REPORT

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. The Bank provides 24

hour banking convenience with the largest ATM network in Pakistan covering 27

cities with over 151 ATM locations. The Bank’s Rupee Traveler Cheques have

been market leaders for the past six years and have recently launched their Gift

Cheque Scheme.

A major achievement of MCB is that the state bank of Pakistan has issued a

license to MCB to start Islamic banking. Now MCB is setting up a 1st Islamic

banking branch at 1st floor shaheen complex, Karachi. This complex starts

working from September 1, 2003.

Challenging and changing the way you bank.


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MCB Bank’s team of committed professionals is dedicated to maintaining

long term customer relationships through outstanding service and

convenience.

MANAGEMENT COMMITTEE


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BOARD OF DIRECTORS


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Mian Mohammad Mansha Chairman

S.M. Muneer Vice Chairman

Dr. Muhammad Yaqub Director

Mian Umer Mansha Director

Shahzad Saleem Director

Sheikh Mukhtar Ahmed Director

Tariq Rafi Director

Sarmad Amin Director

Atif Yaseen Director

Mohammad Aftab Manzoor President & Chief

Executive

Advisor

Raza Mansha

Audit committee

Dr. Muhammad Yaqub Chairman

Tariq Rafi Member

Mian Umer Mansha Member

Aftab Ahmad Khan Member

Chief financial officer

Ali Munir

Secretary


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Tahir Hassan Qureshi

Auditors

KPMG Taseer Hadi & Co.

Chartered Accountants

Riaz Ahmad & Co.

Chartered Accountants

Legal Advisor

Mandviwalla & Zafar

Advocates & legal consultants

Shariah Advisor

Dr. Muhammad Zubair Usmani

Registered Office

MCB building, F-6/G-6

Jinnah Avenue, Islamabad

Principle Office

MCB tower

I.I chudrigar road Karachi

Registrar and Share Registration Office

THK associates (pvt) Ltd.

Shares department, ground floor sheikh sultan trust building no 2, Beaumont

road Karachi

ORGANIZATIONAL HIERARCHY OF MCB


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PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

OFFICERS GRADE

I II III

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

CASHIER

ASSISTANTS

PEONS

INTERNSHIP REPORT

ORGANIZATIONAL SETUP OF MCB

ORGANIZATIONAL STRUCTURE OF MCB


PUNJAB

NWFP & AZAD KASHMIR

SINDH

BALOCHISTAN

KARACHI

LAHORE

PESHAWAR

PROVINCIAL HEAD QUARTERS

QUETTA

HEAD QUARTER

CIRCLE OFFICES

BRANCH OFFICES

KARACHI

INTERNSHIP REPORT

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.

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

with different people handling each category. These categories are:

a) Consumer Banking

b) Corporate Banking

c) Commercial banking

Consumer Corporate Commercial

637 branches 20 branches 383 branches

a) 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.

b) Corporate Banking

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

includes multinational & public sector companies.

c) 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.

PRODUCTS AND SERVICES

Consumer (personal) banking


INTERNSHIP REPORT

The products and services offered by MCB as a consumer bank are as

follows:

1. Online services

i. ATMs

ii. Mobile Banking

iii. Call Centre

iv. Bill Payments

v. Virtual Banking

2. Accounts

i. Khushali Bachat accounts

ii. Pak Rupee Accounts

iii. Saving Accounts

iv. Basic Banking accounts

v. Foreign Accounts

3. Cards

i. Smart Card / Debit Card

ii. MCB Visa

4. Traveler's cheque

i. Rupee Traveler's cheques

ii. Gift Cheques

5. Remittance

i. Overseas Remittance

6. Branches & ATMs

i. ATMs Locator

ii. Online Branches

iii. Branch Network

7. MNET switch

i. M NET Switch

The details of above mentioned products & services are as follows.


INTERNSHIP REPORT

1. Online services

The particulars of the online services are as follows:

i. MCB ATM Card

Welcome to a world of convenience with the MCB ATM 24- Hour Smart Card. "It

Works. Anytime in Pakistan and abroad."

With an ever growing number of ATMs operating across the nation, the MCB

ATM Network is the largest and most advanced of its kind in the country, and it is

part of MCB's continuing efforts to provide you with convenience that suits your

requirements most. And now the MCB ATM has gone global. MCB's affiliation

with Master Card International brings about added facilities for the MCB traveler

abroad with the Cirrus and Maestro networks.

Categories of MCB ATM card

MCB ATM Regular Card

The MCB ATM Regular Card allows withdrawal of up to Rs. 10,000 per day and

a maximum of 3 withdrawals per day per card.

MCB ATM Gold Card

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

maximum of 6 withdrawals per day per card. The cardholder has to make at least

two transactions to withdraw the full amount of Rs. 25,000.

ii. Mobile banking

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 Mobile Banking is a free service for MCB account holders who have an

ATM card. All you pay for is the cost of an SMS message if charged by the

service provider.

iii. Call centre


INTERNSHIP REPORT

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

your ever hectic schedule by providing you services relating to your account and

Smart card at any point in time.

Our well-abreast and friendly call center team is available 24 x 7, 365 days a

year to ensure that your daily financial obligations are taken care of

guaranteeing you a good night’s sleep.

Welcome to the MCB PHONE BANKING Experience : 111-000-MCB(622)!

Services Offered by MCB call centers

ATM locations

Account opening procedures

MCB bank charges

Product information

MCB merchant locations

Account Balance inquire

Pay orders request

Funds transfer request

Debit card Transactions details

Last five transactions details

Balance Certificate request

Bank Statements request

Address Change request

Zakat Deduction certificate request

Tax deduction certificate request

Mobile Banking activation


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Debit card blocking

iv. Bill payments

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

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

with security and peace of mind.

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

payments to PTCL, SSGC, KESC, Instaphone, Mobilink,and Ufone. So, save

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

Bill Pay.

MCB Smart Card or MCB ATM Card Holder can easily pay their bills or re-charge

their prepaid mobile phone account.

MCB's partners in

v. Virtual banking


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MCB Virtual Internet Banking offers you the convenience to manage and control

your banking and finances – when you want to, where you want to. MCB’s Virtual

Internet Banking facility is

Simple

Secure

Free of cost.

With MCB Virtual Internet Banking you can access any of the banking services,

24 hours a day, 7 days a week and throughout the year.

Services of MCB virtual

MCB Virtual Internet Banking offers a wide range of online services which makes

your banking accessible anytime and from anywhere.

Detailed Account Summary of all listed accounts.

Mini-statements of each of the listed accounts showing recent transaction

history for that account(s).

Statement-by-Period of each of the listed accounts, based on the period

specified. .

2. Accounts

MCB offers following accounts to customers.

i. Khushali bachat account

It is a savings account which gives profit on daily balances.

Features

Low average balance requirement.

Profit is paid on your account on a half yearly basis.

Cash deposit and withdrawal facility at hundreds of MCB branches across

Pakistan (conditions apply).

Make cash free transactions, from your account at thousands of merchant

outlets through your MCB Smart Card (local & international).

Stay in touch with your account through MCB’s Virtual Banking Service.

Use your account to pay your bills 24 hours a day, 7 days a week through

Virtual Banking.


INTERNSHIP REPORT

ii. Pak rupee accounts

Pak rupee account is of four types.

Saving Account

Current Account

Term Deposit

Special Term Deposit

Saving account

MCB’s Rupee Savings account is the most convenient way to manage your

savings. Its features are

Low average balance requirement

Enjoy unlimited free of cost transaction facility at your branch

Profit is paid on your account on a half yearly basis


Pakistan (conditions apply)


outlets through your MCB Smart Card (local & international)

Stay in touch with your account through MCB’s Virtual Banking Service.

Current account

The features of current account are.


Enjoy unlimited free of cost transaction facility at your branch.






Term deposit

MCB offers a wide range of attractive term deposit schemes to suit your

requirements.


INTERNSHIP REPORT

Avail your choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3

years, 4 years and 5 year term deposits.

Low investment threshold.

Half yearly profit payment.

Avail a credit facility up to 75% of the total deposit value.

Special term deposit

MCB’s Special Rupee Term deposits offer a very attractive long term investment

option with ease and convenience.

Highly attractive profit rates.

Tenors available are 3 months, 6 months, 1, 3 and 5 years.

Profit on 3 and 6 months deposit is payable at maturity of deposit.

Profit on 1, 3 and 5 years deposit is payable quarterly.

Withdraw your amount through our wide network of ATMs.


iii. Saving accounts

There are two types of saving accounts offer by MCB which are

Saving 365

Saving 365 Gold

iv. Basic banking accounts

In compliance with the directives of State Bank of Pakistan via BDP Circular No.

30, issued on November 29, 2005, the Basic Banking Account has been

launched with effect from February 27, 2006.

This product has been introduced to facilitate the low income group as well as

the existing account holders who wish to convert their regular savings or current

account into Basic Banking Account.

v. Foreign accounts

For foreign accounts there are two options

Saving Accounts

Current Accounts


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Saving accounts

MCB’s Foreign Currency Savings Account offers you attractive returns on your

Foreign Currency investment.

Open a foreign currency Savings account in any of the four currencies i.e.

US Dollar, UK Pound Sterling, and Euro.

Unlimited transaction facility.

Low balance requirement.

Profit credited to your account on a half yearly basis.

You can avail a credit facility up to 75% of the total deposit value.

A foreign currency account can be opened at any of MCB’s foreign

exchange dealing branches.

Current accounts

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.

Open a foreign currency Current account in any of the four currencies i.e.







3. Cards

MCB provides smart card as a debit card and visa card as a credit card. MCB

visa card has several options which a customer can avail according to his

requirements.

i. Smart card / Debit card


INTERNSHIP REPORT

MCB now brings you MCB SmartCard a secure and convenient instrument of

payment with unmatched functionalities. It provides 24-hours 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 is the only bank to introduce a debit card that gives the option to choose

from domestic and international cards for local and global usage respectively.

Features of smart card

The features of smart card are as follows.

Purchasing

International usage

Bill payment

Funds transfer

24 Hours cash withdrawals

Balance inquiry

Mini statement

MCB mobile banking

ii. MCB visa

Credit card is called as MCB visa in MCB. It not only provides the conventional

credit card services in a manner that is superior in comparison, but goes an extra

mile.

MCB visa has the following types


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i-resolve

i-secure

i-party

i-plan

i-switch

i-dial

i-insure

i-cash

4. Traveler's cheque

MCB provides following two types of traveler cheques.

i. Rupee traveler's cheques

MCB Bank has been at the forefront of providing it’s customers with new and

innovative products and financial instruments that are safe, secure and profitable.

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 travelling and in all walks of

life.

ii. Gift cheques

MCB Gift Cheques, eliminates guesswork in trying to find out the perfect

Gift for any occasion birthdays, wedding, graduation and religious

festivals.

Gift Cheque is beautifully packed in a Gold / Silver envelope with a personalized

Gift Card designed to suit all occasions. They are safer than cash, because they

can be replaced if lost or stolen. They are also available at all TCS Express

Centres round the clock.

5. Remittance

Overseas remittance

MCB's Remittance Services are an efficient way to transfer money overseas. You

can remit funds from any country to Pakistan through Swift System.


INTERNSHIP REPORT

Corporate banking

The products and services provided by MCB as corporate bank are as follows.

1. Accounts

i. Pak Rupee Accounts

ii. Basic Banking Accounts

iii. Foreign Accounts

2. Loans

i. Term Loan

ii. Working Capital Loan

3. Financing

i. Trade Finance

4. Cash management

i. Cash Management

5. Investment

i. Investment Banking

Details of products and services for corporations are as follows.

1. Accounts

i. PAK rupee accounts

Pak rupee account is of four types.

Saving Account

Current Account

Term Deposit

Special Term Deposit

Saving account

MCB’s Rupee Savings account is the most convenient way to manage your

savings. Its features are

Low average balance requirement

Enjoy unlimited free of cost transaction facility at your branch

Profit is paid on your account on a half yearly basis


INTERNSHIP REPORT


Pakistan (conditions apply)

Current account

The features of current account are.


Enjoy unlimited free of cost transaction facility at your branch.




Withdraw cash through Pakistan’s largest ATM network.



Term deposit

MCB offers a wide range of attractive term deposit schemes to suit your

requirements.

Avail your choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3

years, 4 years and 5 year term deposits.

Low investment threshold.

Half yearly profit payment.


Special term deposit

MCB’s Special Rupee Term deposits offer a very attractive long term investment

option with ease and convenience.

Highly attractive profit rates.

Tenors available are 3 months, 6 months, 1, 3 and 5 years.

Profit on 3 and 6 months deposit is payable at maturity of deposit.

Profit on 1, 3 and 5 years deposit is payable quarterly.

Withdraw your amount through our wide network of ATMs.


ii. Basic banking accounts


INTERNSHIP REPORT

In compliance with the directives of State Bank of Pakistan via BDP Circular No.

30, issued on November 29, 2005, the Basic Banking Account has been

launched with effect from February 27, 2006.

This product has been introduced to facilitate the low income group as well as

the existing account holders who wish to convert their regular savings or current

account into Basic Banking Account.

The Basic Banking Account is a current account and can be opened with a

minimum initial deposit of Rs. 1000/- only. Account holders will be allowed 2

deposit transactions (either cash or through clearing) and 2 withdrawals (cash or

clearing) each month. All customer-initiated transactions over and above this limit

will be charged a transaction fee. However unlimited free of charge cash

withdrawals are allowed through MCB's own ATMs.

iii. Foreign accounts

For foreign accounts there are two optins

Saving Accounts

Current Accounts

Saving accounts

MCB’s Foreign Currency Savings Account offers you attractive returns on your

Foreign Currency investment.

Open a foreign currency Savings account in any of the four currencies i.e.



Low balance requirement .

Profit credited to your account on a half yearly basis.




Current accounts

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.


INTERNSHIP REPORT

Open a foreign currency Current account in any of the four currencies i.e.







2. Loans

The loans provided to corporations are

Term Loan

Working Capital Loan

i. Term loan

In MCB you get friendly, efficient and attentive personalized banking services - a

unique banking relationship experienced by each MCB client. MCB offer term

loans to its valued customers.

ii. Working capital loan

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.

3. Financing

Trade finance

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.

4. Cash management

Cash management


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MCB’s network of over 900 branches in Pakistan enables its customers to collect

and disburse payments efficiently with MCB’s cash management services. MCB

also offers its customers a choice of paper based or electronic fund transfer

solutions including collection amounts, cross branch online transactions etc.

5. Investment

Investment banking

MCB’s Investment Banking Team has emerged as a leading player in Pakistan's

Investment Banking arena. The Team handles advisory, corporate finance and

capital markets related transactions. Within these areas, the team has developed

expertise in:

Private Placements

Debt/Equity Underwriting

Term Finance Certificates

Loan Syndication

Arrangement of Non- Fund Facilities

Mergers and Acquisitions

Privatization

Corporate Advisory

PLACING STRATEGIES OF MCB BANK

The location of the bank plays a vital role in

making its operations profitable. If the bank is

located in some business center then it will

be very easy for it to attract business people

as its customers. Therefore MCB has most of

its branches at places where it can reach its

targets customer easily. The branch network

of MCB is given as follows:


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PROMOTION STRATEGIES OF MCB BANK

MCB Bank is actively participating in promotion of its products and services

through advertisement and other promotional schemes.

Initially, the bank focused on the upper class customer’s only and offered

products for a limited class of people. But now the strategy has been changed

and the bank is now targeting the middle market also. The products offered are

of diverse nature to cater the needs of maximum number of people.

Customer oriented attitude

MCB Bank values its customers. Customers’ complaints are encouraged

because it gives an opportunity to know the needs of the customer and build

more confidence in them.

Most of the promotional efforts are done through

Direct marketing

Public relations


Place No. of branches

Punjab 632

Sindh 232

NWFP 123

Blochistan 34

Azad Kashmir 19

Domestic 1040

Overseas 4

Total 1045

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MCB bank sometimes gets suggestions and recommendations from its good

customers.

FIELDS OF ACTIVITIES

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 MCB Bank 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 MCB Bank Limited provides to different peoples are as

follows.

1) Open Different accounts for different peoples

2) Accepting various types of deposits

3) Granting loans & advances

4) Undertaking of agency services and also general utility functions.

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:

DEPARTMENTS OF MCB

The departments of MCB are:

1. Cash department

2. Deposit department

3. Clearing department

4. Advances department

5. Remittance department

6. Foreign exchange department

7. Technology department (new addition in order to cop with the growing

needs of day to day technology requirements)

CASH DEPARTMENT


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In cash department both deposits and withdrawals go side by side. This

department works under the accounts department and deals with cash deposits

and payments. This department maintains the following sheets, books, ledger of

account:

Cash paid voucher sheet.

Cash received voucher sheet.

Cash balance book

Paying-in-slip

Cash department is performing its job completely through computers.

DEPOSIT DEPARTMENT

Bank deals in money and this is merely mobilizing fund 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.

Types of deposits

1) Time deposits / liabilities

2) Demand deposits / liabilities

Functions of deposit department

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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Profit payment & calculation

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 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

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 that 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

Transfer cheques: are those cheques, which are collected and

paid by the same branch of bank.


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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.

Functions of clearing department

To accept Transfer, Transfer delivery, clearing and collection cheques

from the customers of the branch and to arrange for their collection.

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.

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

Receiving and scrutinizing the cheques and other deposit instruments,

and the pay-in-slip at the counter.

Fixing the stamps.

Scrutiny and receipt by the authorized officer.

Returning the counter file to the depositor.

Certificate and confirmation by the officer in charge of the department..

Separating the cheque into transfer, transfer delivery, and clearing

cheques.


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Clearing process (Flow Chart)


Cheque with slip given

Cheque along with slip checked, signed & received by officer

The same day not honored cheques are returned to Main Branch

The day after tomorrow the banks are informed about dishonored cheques

Provisional entries for returned cheques are debited again in both computer & daybooks

Party is informed about returned cheques through Phone or personal contact

Cheques are mailed through TCS in case of no personal contact the same day

(If there is any availability)

Slip is asked & filled

Entries in daybooks are made

Entries checked & verified by another officer after banking hours by officer

Cheques collected at the day end by Main Branch’s Officials

Cheques are sent to respective banks next day after posting in computer by

Main Branch

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ADVANCES DEPARTMENT

It is another major department of the branch. Bank provides this facility to the

people who need advance money to meet their requirements. For getting the

advances, the first step is the preparation of credit proposal. Some principles of

lending are considered whenever financing being is made. These principles are:

Character

Capacity

Collateral

Capital

Condition

Required information

An assessment of his business abilities

Accurate & up-to-date financial statements

Market reports about the borrower

Party dealing with other banks

Nature and structure of borrower business

Names of proprietors, partners or Directors

Detail of companies associated with borrower business

Financial condition of borrower business

Preparation of credit proposal

At first, a formal application for credit approval is obtained from the party along

with complete group position. The parties credibility report is also obtained from

the banks from which the party has been doing the business. The party

creditability report is also taken from the head office of Trade information

Division.


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For obtaining credit, party has to submit the last two years Balance Sheet and

Profit & Loss Statement duly attested but authorized auditors. If the party also

involve in export or import business then the bank also consider the data of three

years about imports and exports.

Then recommendations are made the type of data required to prepare the credit

proposal is to be gathered from different departments. Some data is obtained

from the foreign exchange department. Some data is obtained from current

account department and some data is available in advances department. The

purpose for which the financing is required should be explained very clearly. The

security offered by the party to the bank is also evaluated. In case of pledging of

the property in shape of land or building the complete evaluation of the property

should also be attached.

After all the requirements and necessary documents for applying for advances is

fulfilled by the party then, the case is sent to the Chief Manager for approval. If

the manager will find any discrepancies, he may write on these documents. If the

credit limit is in his range, he may approve the party for credit. If the amount is

exceeding the Chief Manager forward the case to the Circle Office for approval

and here the same procedure is repeated and if the credit amount is in the range

of GM, he can approve and if the credit amount is very large from Circle Office,

the case is then sent to Head Office and if it is a real big then is to be decided by

Board of Director. MCB provides advances which are two types. These are two

types of advances:

Secured Advances

Unsecured Advances

In secured advances, the bank takes any security against the loans while in case

of unsecured advance no security is taken by the bank.

Advances types

MCB usually classified advances in to following types:

Commercial Advances


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Agricultural Advances

Industrial Advances

Commercial advances

MCB divided the advances in to two major types:

Fund Based

Non Fund Based

In the fund base advances, the funds of MCB is involved and in Non Fund based

only guarantee is given by the bank.

Fund base advance

MCB have following Fund base facilities of advance in its corporate branches.

The details of these types would be later. These are as follows:

Demand Finance (DF)

Cash Finance (CF)

Running Finance (RF)

Finance against imported goods (FIM)

Export Refinance Part I (Pre Shipment)

Export Refinance Part I (Post Shipment)

Export Refinance Part II

Finance against purchase collection (FACP)

Finance against foreign bills (FAFB)

Foreign bills purchased (FBP)

Local Manufacturing Machinery (LMM)

Payment against document (PAD)

Demand finance


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This is a type of secured loan and demand loan never allowed without security. It

is a type of long term financing. MCB also gives loan under the head of demand

finance to individuals, industrial units & commercial business etc.

Cash finance

In this, the borrower gives a specific reason for the need of cash. MCB gives the

facility of cash credit to business. The amount is passed through voucher and

credit to the party account. Normally 0.60 paisa per thousand is charged on daily

basis to customer.

Running finance

These finances as evident by the name are given to the business to meet their

daily needs. The mark up is charged on daily balances. This type of advances

are given to trade, commerce and manufacturing for general purpose. Normally

0.60 paisa per thousand is charged on daily basis. It is drawn through Cheque.

Finance against imported merchandise

This type of advances is granted against the pledge of imported merchandise.

The goods imported are pledged by bank. Bank pays all the charges to exporter

and customs and keeps the goods in its control. On payment from the client to

bank, the bank releases these goods.

Exports refinance PART-I pre-shipment

This type of loan is provided by the bank to the customer at the rate of 12% for

the period of 150 days. The bank provides this type of advance facility to those

exporters who have not enough money to make shipment. To promote the

export, the government pursues the Banks to provide loans to the exporters.

Exports refinance PART-I post shipment

This type of facility is provided to the customers who have enough amount of

money to make first shipment but not more. So the bank issues a loan to the

exporter, this financing is for period of 150 days. Finance is provided by the SBP


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to exporters for the purchase of raw material and for its processing packing and

shipment. The mark up rate currently set by the SBP is 12%. In case, if the party

is unable to make the shipment within 150 days of financing. The party has to

pay certain amount of finance as asked by the SBP and after 150 days the

markup rate also charges up @ 60 paisa per thousand per day. So usually

exporters try to make the shipment within the fixed period set by the SBP which

is usually 150 days.

Exports refinance PART-II

In this case the bank after receiving the performance of years in export business

of the party the limit is set for a period of one year. Here the limit cannot be set

by the terms pledged of the permission of the bank.

Finance against purchase of collection document

The bank provides this type of advance facility to those exporters who have not

enough money to make shipment. A bill (Cheque, draft, etc.) may be purchased

by the bank. Bank pays the amount to the client after deducting its commission.

Finance against foreign bills

This facility is given to the exporter, If he needs an urgent money. Bank also

provides finance against the foreign bills. He gives bills of exchange to the bank

as a security and bank send these bills for collection and bank gives money to

the exporter.

Foreign bill purchase

The exporters which are under L/C are also provided with the facility of loan.

Amount is given to the exporter after the approval of L/C by the issuing bank.

Payment against document

Bank make the payment to party against document and upon expire date. Bank

receives back money with mark up in this type of lending.


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The opening bank makes sure that documents are according to terms and

conditions of the credit.

Agriculture credit

Banks Agriculture division deals with the agriculture advances. Bank provides the

Agriculture Advances in order to enhance and support the agriculture sector of

the country. Agriculture advances are of the two types. The types are as follows:

Farm Credit

Non Farm Credit

Farm credit

These are the credits provided by the MCB for the purchases of inputs for

development of agriculture sector. Following are two main sub classes of Farm

Credit.

Production Finance

Development Finance

Production finance

These are short term loans. These loans are provided to farmers for purchases

of different type of input, for example, Seeds, Fertilizers, and Pesticides. These

loans are provided against personal guarantees or mortgage of land as a

security. Rate of profit for these loans is 10%.

Development finance

These are medium or long term loans. These loans are provided for the

development of agriculture sector. Main purpose of these loans is to purchase

instrument:

Tractors

Implements (Trolley, Thresher etc.)

Installation of tube-well


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Planting of garden

The loans are disbursed against security of land (mortgage) or any other security

acceptable to bank. The rate of profit for these loans is 11% to 17%.

Non farm credit

Second major form of agriculture advance is Non-Farm Credit. These loans are

provided against mortgage of land as a security or pledge of equipment as a

Collateral security. These are medium or long term investment depending up the

project. These loans are provided to boost up agriculture sector to provide the

sources of earning of foreign exchange as well as to provide employment to

people. Following are the different types of small industries for which loans are

provided to improve the economy of the country:

Fish Farm

Cattle Farm

Poultry Farm

Dairy Farm

Securities

Bankers lend money in the form clean advances against promissory note as well

as secured advances against tangible and marketable. These reports are only

valid MCB normally allow the advances to the customers against the following

types of securities:

Bankers Lien

Mortgage

Pledges

Hypothecation

Banker’s lien


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This type of security is accepted in case of advances against share, life policies,

bonds, ornaments and fixed deposits etc. It is type of most liquid security.

Mortgages

There are two types of Mortgage. These are following:

Legal Mortgage

Equitable Mortgage

Legal mortgage and equitable mortgage are accepted in case of immovable

properties like land, building and machinery etc.

Pledge

This type of security is accepted in case of stocks or raw materials. In a pledge,

the borrower has no right to sell the stocks without the permission of bank.

REMITTANCE DEPARTMENT

The need of remittance is commonly felt in commercial life particularly and in

every day life general. A major function of any banking system is the transfer of

funds from one client or one place to another. By providing this service to the

customer the bank earns a lot of income in the form of service charges. This

department deals with local currency remittance i.e. remittance from one city to

another without actually carrying the currency. MCB uses following instrument for

transferring of money:

i. Demand Drafts (DD)

ii. Pay Order (PO)

iii. Telegraphic Transfer (TT)

iv. Mail Transfer (MT)

i. Demand drafts (DD)

DD is a written order given by the branch of the bank on behalf of the customer

to other branch of the same bank to pay the certain amount to the customer. DD

are issued for the particular place other than place of issuance. A draft is a

Cheque drawn by a bank on its own branch or any other branch of another bank


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at a different place requesting it to pay on demand a specified amount of money

which is already received to the person named on it.

Documentation

A printed application form is provided for filling in completely and signing by the

applicant. After depositing an amount of draft and commission of the bank, duly

completed and signed by two authorized officers, then it is handed over the

applicant and credit order is dispatched to drawee branch. Following are the pre-

requisites for the processing of DD:

Bank Serial No

No. of DD

Central No

Test Key

ii. Pay order

For this kind of remittance the payer must have the account in the issuing bank.

Pay order are more liquid as compared to cheques because cheques may be

dishonored while PO can’t be. It is written order issued by the bank drawn and

payable on itself. It is used for local transfer of money from one person to another

person. It is also used by the public for depositing money with Government or

Semi Government department.

Documentation

The party who requires a pay order will get a printed application from the bank.

He will fill it and deposits the amount and commission. The bank charges are

same as on demand draft.

Bank Serial No.

No. of PO

Central No.

iii. Telegraphic transfer (TT)

In this case the authority is given from one bank to other on the behalf of the

customer through telecommunication to debit their inter office account through


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them and credit their parties account mentioned in TT. It is an inter bank

transaction. Telegraphic transfer is an instant transfer of funds. Through this

method applicant can transfer money from one place to another place. There are

two types of TT; both types of TT are maintained in separate registers, test is

applied by the manager of every amount of TT.

Incoming TT

Outgoing TT

Applicant has to fill a form along with depositing amount to be transferred and

bank commission. MCB charges the commission at the same rate as in the case

of demand drafts.

Documentation

Issuing Branch Name & Code

Beneficiary Branch Name & Code

No. of TT

Amount in words & Figure

Test key

iv. Mail transfer (MT)

As the name shows, it is transfer of money in the shape of document through

mail. Procedure is like TT. The transfer of funds from one place to another by

mail is called Mail Transfer (MT). The MT can be foreign or domestic. The

applicant who is desiring to remit the funds by way of Mail Transfer can either

deposit cash or ask the bank to debit his/her account with the cost of MT

including the bank charges. These all measures are for safe transfer of funds.

Documentation

Issuing Branch Name & Code

Beneficiary Branch Name & Code

Number of MT

Amount in words & Figure

Test key


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FOREIGN EXCHANGE DEPARTMENT

H. E. Evit states that “the means and methods by which right to wealth express in

terms of currency of one country are converted into rights to wealth in term of the

currency of another country are known as foreign exchange”.

Encyclopedia Britannic defines Foreign Exchange as “a system by which

commercial nations discharges their debts to each other”.

In MCB

This department works like general banking department with the difference that it

deals in foreign currencies like US ($) and Pound Sterling, Dutch Mark (DM),

Euro and Japanese Yen (Y). This department deals with the following

products/services:

Foreign Currency Accounts

Foreign Remittances

Foreign Bills for Collection

Selling of Government Certificates

Imports & Exports

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


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computer division is working in each city to provide service to add 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.

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.

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).

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.

INFORMATION ABOUT MY BRANCH


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I did my internship in MCB, Settla town, GRW. The information about the bank is

as follow:

Management of the branch

Branch Manager Ashiq Ali

Operational Manager Miss Madiha Abbass

General manager Miss Iram

Clearing Manager Mubasshar Hassan

Chief Cashier Afzal Ch

Cashier Khuram Zaffar

Billing Cashier Sadia Nawaz

CSO Miss Sundas

Other general information of the branch

Deposits

The total deposits of this about to 800 million. In deposit there is increasing trend.


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WORK DONE BY ME

During my internship in the MCB bank Limited, I really enjoyed to work with the

staff of Branch, Settla town GRW and have a wish to be employee of MCB. My

internship was six weeks which was ended at 22 august. It was 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 am very thankful to

branch manager Sir Ashiq Ali who provides me a learning environment in the

branch.

During my internship in MCB I have worked in different departments & seats and

learnt the followings.

FIRST TWO WEEKS

ACCOUNT OPENING DEPARTMENT

Account opening and closing is the function of accounts departments. Bank’s

customers may be individuals (Single or Joint), firms (partnership/proprietorship),

Autonomous corporations, Limited Companies, Charitable Institutions,

Associations Educational Institutions or Local Bodies.

Basics to open an account


60

65

70

75

80

2009, 2010 2011

Deposits

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During the span of my internship in MCB, I learned and observed a lot 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.

Introduction and preliminary investigation

Before opening an account MCB as like the other banks in Pakistan ascertain

whether or not the person who is going to open the account is a desirable

customer or not. Then MCB determine the prospective customer’s integrity,

respectability, occupation and the nature of business by the introductory

references given at the time of account opening

In order to further strengthen and streamline this process, the Federal

Ombudsman of Pakistan, vide his ruling on complaint No. II/31/5186, has

directed the banks to retain with the account opening form a Photostat copy each

of the Computerized National Identity Cards of the person desiring to open an

account as well as that of the introducer. As per these directions, the concerned

Branch Managers are required to obtain the original National Identity Cards along

with their Photostat copies and then return the original after attesting the

authenticity of the retained copy.

Preliminary investigation is necessary because of the following

reasons:

Avoid frauds: In this regard I learned that if a banker does not make

the necessary inquiries mentioned above he may enable dishonest

persons to possess cheque books for fraudulent purposes. If any such

person happens to be an undercharged bankrupt, the banker might be

placed in an awkward position for having allowed such a person to open a

bank account.

Safeguard against unintended overdrafts: Sometimes due to a

mistake an account may be given an overdraft, For instance, the ledger


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keeper, misreading the balance of an account honors a cheque for an

amount larger than the balance. Similarly a credit entry belonging to a

customer may be made by mistake in another customer’s account. In such

situations the excess amount withdrawn by the customer can only be

realized if the customer is a identifiable person.

Inquiries about clients: Being a banker I think MCB has a business

obligation to respond to inquiries from other banks etc. about his

customer’s financial position. Though the banker gives only a general idea

about the financial standing of his customer, it should nevertheless have

the necessary information available with him.

How to open an account (General)

Before opening an account in MCB I observed that the following points must be

considered in this regard.

Another account holder of the bank should properly introduce the new

customer.

The account holder should sign the account opening form in the presence

of bank officer and the signature is duly verified.

A copy of computerized national identity Card is required by Bank.

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.

Each account shall be allotted a distinct number that is to be quoted in all

correspondence with the bank relation to the account.

Minimum amount for opening and continued maintenance of various types

of accounts is as follows:

Rs.

Saving 500

Current 500

Term Deposit 1000


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The bank reserves the right to change the above mentioned minimum balance

requirement at any time without any notice.

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.

Title of Account

Full Name of Applicant

Occupation

Address

Telephone No.

Currency of account

Nature of Business

Introducer’s Name, Address & Signatures

Special instruction regarding the account

Initial Amount of the Deposit

Signature of the applicant

Documents to be attached

Further I learned that if you wanted to open an account with MCB then you

should attach the following documents with your application form which are

different for different categories.

Sole proprietor’s account

In order to open an account with MCB Sole Proprietors have to submit their

business registration certificate number.

Private / joint account

For individual or private or joint accounts Computerized National Identity Card is

required.

Joint stock company


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Before an account of a Public Limited Company is opened MCB must ask the

person authorized to do so to submit the certified copies or the following

documents

Certified true copy of the Memorandum and Articles of Association of the

company.

Certified true copy of the resolution of the board of directors / managing

committee / governing body regarding conduct of the account.

Certified list containing names and signatures of the directors / office

bearers.

Certified true copy of the certificate of incorporation or registration.

Certified true copy of the certificate of commencement of business (in

case of public limited companies).

Balance Sheet

I.D. Card copy of each director

Original is also enclosed for inspection and return

List of persons authorized to operate the account.

Power of Attorney in favor of the person opening account.

Partnership firm account

Information which is required to be submitted to MCB by a partnership firm in this

case is as follows:

Full Names

Address

Specimen of signatures of the partners

Certified true copy of partnership deed

Registration No. if the Partnership is registered

Societies / clubs and associations account

MCB is authorized to open the accounts of the societies/clubs and associations,

These are non-trading organizations, formed for the promotion of culture,

science, education, recreational activities and charitable purposes etc. some of

these institution are registered under the Societies Registration Act, 1866, and


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are issued a certificate of registration after they have been found fit for

registration.

Specimen signature

When an account is opened with MCB customer provides to the bank a

specimen of the form of signature which would appear on all his cheques to

express his authority for the payment of cheques drawn on his banker. This

specimen is taken generally on a card specially designed for this purpose, and

rule for the customers, full name, and account number are entered on it.

If the bank has reasons to doubt the genuineness of a signature, he should either

get it confirmed for his satisfaction or return the cheque with the remark

‘Signature differs’. If the signature of the customer is forged the banker cannot

escape his liability because he has actually acted on his customer’s mandate.

Issuance of cheque book

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

customer only when all the required documents are checked. A cheque book

Contains of 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.5.0/- 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


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recorded in this register when the cheque book issued an entry is passed in the

cheque book issue register.

In case of loss of cheque book or requisition slip on cheque book the customer

has to fill the Form No. 216-B to obtain a new cheque book.

THIRD WEEEK

FOREIGN EXCHANGE DEPARTMENT

In my third week of internship I work in foreign exchange department. The most

important thing that I learned in this department was the transaction with letter of

credit.

The steps involved in any international trade transaction are:

The Pakistan Importer places an order with the US exporter and asked the

American if he would be willing to ship under L/C.

The US exporter agrees to ship under a L/C and specifies relevant

information such as prices and delivery terms.

Power Plants The Pak. Importer applies to MCB for a L/C to be issued in

favor of the US exporter for the merchandise the importer wishes to buy.

MCB issues a L/C in the Pak. Importer’s favor and sends it to the US

exporter’s bank, the Bank of New York.

The bank of New York advises the US exporter of the opening of a L/C in

his favor.

The US exporter ships the goods to the Pak. Importers on a common

carrier. An official of the carrier gives the exporter a bill of lading.

The US exporter presents a 90-days draft drawn on MCB in accordance

with its L/C and the bill of lading to the bank of New York. The US exporter


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endorses bill of lading so title to the goods is transferred to the Bank of

New York.

The Bank of New York sent the draft and bill of lading to MCB. MCB

accept the draft taking possession of the documents and promising to pay

the now accepted draft in 90-days.

MCB returns the accepted draft to the Bank of New York.

The Bank of New York tells the US exporter that it has received the

accepted bank draft, which is payable in 90 days.

The exporter sells the draft to the Bank of New York at a discount from its

face value and receives the discounted cash value of the draft in return.

MCB notifies the Pak. Importer of the arrival of the documents. He/She

agrees to pay MCB in 90 days. MCB releases the documents so the

importer can take possession of the shipment.

In 90 days MCB receives the importer’s payment, so it has funds to pay

the maturing draft.

FOURTH WEEK

CASH MANAGEMENT

In fourth week I was sent to cash department and I observed that the most

important department of MCB which deals in money.

The excess cash (More than its insured limit by the insurance company) of the

branches of the region is collected by the main branch. The main branch is also

bound to send its excess cash to the State Bank of Pakistan. No branch can

have cash its safe more than its insurance at any time at the time of closing cash,

if it is so the manager will be responsible whether or not he informed to the

regional office (exception to the limit which is insured for the day).

New Notes and Prize Bonds are also part and parcel of the Cash Management.

Keys of the Safe lockers are with the three authorized persons each one of them

is responsible for cash as at the time of closing the cash the officers including


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Cash officer presented and lock the safe after counting and scrutinize the cash.

The cash officer maintain its daily cash book with specification of notes (Bonds

are also recorded in the books in relation with cash) and other vouchers, after

being satisfied the manager authenticates the books and vouchers regarding

cash with stamp and signature at the end I would like to conclude that the cash

management is being done in the MCB very effectively.

UTILITY BILLS COLLECTION

Then I was transferred in utility bills collection section. I worked in the utility bills

collection department as the MCB collects utility bills on behalf of WAPDA, Sui

Gas Companies, and Pakistan Telecommunication Corporation Limited by

putting the stamp on the utility bills “Paid”, Date of payment, Signature of the

officer receiving the utility bills. After receiving utility bills 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.

Fifth week

HOW TO HONOUR A CHEQUE

During my internship span in the Muslim Commercial Bank Limited, I observed

that Cheques are received for the following purposes.

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.


Cheque verified for signatures

Entries posting in computer

Cheque approval

Token is assigned to cheque

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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.

Cheque Encashment Process (Flow Chart)


Balance is checked

2nd signatures of senior officer

Cash counted and given

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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)

iii) Cheques for clearing

There are two stamps put on each cheque, sent for clearing:

a) Crossing Stamp.

b) clearing Stamp.

iv) 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.


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Sixth week

CLEARING

I spent my sixth week of internship in clearing department. The procedure of

clearing the cheques:

Following information is entered in clearing register.

a) Name of favoring party.

b) Name of bank on whom drawn.

c) Branch.

d) Cheque number.

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.


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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.

SWOT ANALYSIS

The SWOT analysis of MCB is as follows:

STRENGTHS

The strengths of MCB are:

Good reputation

MCB is the first Pakistani privatized bank because of its quality management,

marketing, innovation in products and services. Due to all such factors they have

established a good reputation in the banking market.

Strong branch network

There are large number of branches of MCB and still more branches are under

expansion plan. All the branches of MCB are in commercial areas.

Trained, Skilled & cooperative employees

The name of MCB makes you recall the highly cooperative and professional

individuals ready to serve you with maximum co-operation. Personnel of MCB

are well trained and highly skilled. Majority of employees has many years of

experience in banking sector and are an asset for the bank. The joining of

experienced people, advanced management, advance setup and facilities gave

MCB an edge over its competitors

Faster banking services

MCB has faster banking services that are making it more prominent in the

banking industry especially in operations and Foreign exchange. Moreover bank

provides high status services in every field, whether consumer banking,

commercial banking & corporate banking


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Reasonable service charges

The customer prefers this bank not only because of its faster speedy service but

also due to reasonable service charges.

Strict advances policy

One of the major strengths of MCB Bank is that very less amounts of debts turn

doubtful or bad due to their conservative policy.

Highly automated bank

MCB in Pakistan is also in the list of highly automated banks because of its

modern style of banking through fully computerized control and twenty four hour

banking.

WEAKNESSES

The weaknesses in MCB would be categorized as following:

Insufficient advertisement

The majority of people are not well aware about the products of MCB. Therefore

it should advertise extensively especially RTC and Master Cards.

Behavior towards customer

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 types of customers.

Inefficient HR policies

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.

Mismanagement of time

Mismanagement of time is another big mistake in MCB branches, the bank

official time of closing is 5:30pm but due mismanagement of time allocation staff

is normally on their seats till 7:00 or 8:00’o clock.

Overloading of work on employees


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Most of the employees of MCB are overloaded with work. There is uneven

distribution of work. Promotions are not very timely.

Outdated software

The version of the software (MIBS) used by MCB is outdated. The newer version

is available but it is not applied in all the branches. So the branches with old

software have less efficiency as compared to the branches with new software.

OPPORTUNITIES

Opportunities for MCB are:

Emphasis on information technology

All the opportunities of the 21st century are to be availed in the information

technology. Information technology is the future. Therefore MCB should

emphasize much on IT, especially the E Banking. Bank can design a universal

account like other foreign banks, to enhance online facilities.

Effect of Privatization

The need of privatization has made people to switch to banks to satisfy their

needs of lending and borrowing. This not only increases the deposits but also the

credit business.

Branch network

Due to lenient licensing policy by SBP MCB Bank has more opportunities to open

new branches.

To be in the list of top banks

MCB bank has grown up its business with a very high pace and it has got

tremendous popularity. There are many opportunities for the bank and by

availing that it can stand amongst the top banks.

Marketing

More market share and customers can be gained by effective marketing

strategies. New customer friendly products can be introduced.

THREATS

The threats from which MCB should be aware of are:


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Government policies

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.

Increased competition in banking market

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 of the market.

Unstable economic situation

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. The recession experienced by

the economy has overall affected the banking industry.

RECOMMENDATIONS

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

after privatization, MCB is performing well. Its deposits are growing day by day.

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 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 unnecessary delay is made in the banking

transactions, which might not be a good sign for the bank from future

prosperity point of view.

Staff turnover particularly trained staff results 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


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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. All 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 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.


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Bank should adopt the global organizational banking structure to meet the

international standards of banking sector.

Conclusion

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 also a 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.

REFERENCES

Gitman, Lawrence, “Principles of managerial finance”, Singapore: Pearson

education, Tenth edition, 2003.

Myers, Stewart and Brealey Richarad, “Principles of corporate finance”, New

York: MacGraw-Hill, Seventh edition, 2003

www.mcb.com.pk

MCB newsletter

www.bluechipmag.com by Shukat Aziz

www.sbp.gov.pk

www.bluechipmag.com by Atif Aziz

www.google.com


Internship Report on MCB

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