Report on MCB Khwaza Khela Branch
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Transcript of Report on MCB Khwaza Khela Branch
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Internship Report on Muslim Commercial Bank. (Khwaza khela Branch Swat)
CHAPTER 1
INTRODUCTION OF STUDY
1.1 BACKGROUND OF THE STUDY
It is a common practice at universities during the completion of the
master and bachelor programs to attain practical experience in different
fields. Government college of Management sciences Peshawar requires
students to undergo an eight weeks internship program. The selection
of the firm is based on the choice of the student. The institute requires
an internship report based on the theoretical and practical learning of
the student. The concern of this report is to study and analyze the
performance of Muslim Commercial Bank Ltd (MCB) in the banking
industry of Pakistan.
Commercial banks are considered to be more competent and
productive as they mobilize investment and provide better customer
services. Muslim Commercial Bank is considered to be one of the
prominent banks as far as its reputation and progress is concerned. Its
name stands for a sign of trust and reputation.
1.2 PURPOSE OF STUDY
The purpose of the report has been to review and analyze the functions
performed by the Operation Department of MCB. The report also
explores the strengths and weaknesses of the MCB and also gives
recommendation where any improvement can be possible.
1.3 SCOPE OF WORK
This report is concerned with the performance of the MCB Khwaza
khela Branch. It enlightens the functions of Operation Department at
the Khwaza khela branch however the financial analysis is based on
the national operations of the bank
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1.4 METHODOLOGY OF THE REPORT
The methodology for the collection of information and data was based
on the two primary modes of data.
Sources of Primary data:
o Personal Observation.
o Interviews of Personnel.
Sources of Secondary data:
o
Previous internship Reports.o Brochures.
o Annual Report.
o Books.
o Web site.
1.5 SCHEME OF THE REPORT
The report is arranged in the following sequence.
PART I
This Part has one chapter.
Chapter 1:
This is an introductory chapter which describes the background,
purpose, scope, methodology and scheme of the report.
PART II
This Part includes the review of Muslim Commercial Bank. This Part
is comprised of three chapters.
Chapter 2:
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This chapter encompasses a brief history of banking and over all
banking sector in Pakistan. It also tells about the history of MCB, its
vision and mission statement and the role of MCB in Pakistan.
Chapter 3:
This chapter goes in detail study about the policies adopted at the
branch, the organizational structure, different types of services offered
by the branch to its customers.
Chapter 4:
This chapter is the lengthiest chapter of the report. It precisely tells
about the several departments working at MCB Khwaza khela Branch
and their functions. The departments discussed are the Operation
Department, Clearing Department, Remittance Department, Credit
Department, Computer Department, Cash Department and Customer
Services Department. In addition to these departments the different
types of account and the procedure of the accounts have been
discussed.
PART III
This Part also has two chapters and it is about the financial and SWOT
analysis of MCB.
Chapter 5:
This chapter makes the financial analysis of MCB. Financial analysis
is made on the national performance of the bank.
Chapter 6:This chapter contains the SWOT Analysis of MCB.
PART IV
This Part contains one chapter.
Chapter 7:
This chapter gives the Finding and recommendations based on the
analysis of the organization.
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PART V
This Part contains the conclusive chapter of the report.
Chapter 8:
This chapter is about the implementation plan that has been advised for
MCB Khwaza khela Branch on the basis of the room of improvements.
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CHAPTER 2
INTRODUCTION OF
MUSLIM COMMERCIAL BANK
2.1 HISTORY OF BANKING
There are various views about the origin of the word Bank. One
view is that it is derived from an Italian word banque which means
bench the other point of view is that it has originated from the German
word bancus which means a joint stock firm.
As regards the growth of modern commercial bank, it can be traced to
as early as 600BC, G Crowther in his famous book, an outline of
Money has traced the history of modern English commercial banking.
According to him, the present day banker has three ancestors; (1) the
merchants (2) the goldsmiths and (3) the money lenders.
The Merchants.
The earliest stage in the growth of banking can be traced to the
working of merchants. These merchants were traders in commodities.
The trading activities were carried on by them from one place to
another, it was risky for the traders to carry metallic money with
themselves for payment. The traders with high reputation began to
issue receipt which were accepted as titles of money. These receipt or
letters of transfers also called hundi in indo Sub Continent were the
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first mode of payments. The merchant banking thus forms the earliest
stage in the evaluation of modern banking
The Goldsmiths.
The second stage in the growth of banking is normally traced to earlier
goldsmiths. These goldsmiths also called Seths in India used to
receive gold and silver for sage custody. The goldsmiths began to issue
receipts for the metallic money (gold and silver) kept with them. These
receipt with the passage of time a medium of exchange and a mean of
payment. The goldsmiths, thus can rightly be termed as the fore-
runners of the modern bank note.
The Money Lenders.
The third stage in the development of banking arose when the
goldsmiths became the money lenders. By experience the goldsmiths
(who were called money lenders) came to know that they could keep a
small proportion of the total deposits for meeting the demand of
customers of cash and the rest they could easily lend. They allowed the
depositors to drew over and above the money actually standing to their
credit.
2.2 DEVELOPMENT OF MODERN BANKING
It is said that the first bank was established in Barcelona in Spain.
Another statement tells that Venice and Genoa was the hub of
financial transactions and the first bank was founded there in 14th
century. The first public bank that was formed was in Germany in later
part of the time.
The first central bank was formed in Geneva in 1578. bank of England
was established in 1694. the modern commercial banking system
actually developed in the nineteenth century.
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In 1918 eleven clearing banks of today came into being. The effect of
this historical development of banking in England has been fairly wide.
Initially the emergence of a small number of banks with wide network
of branches. Second, increase in the popularity of bank accounts and a
large-scale use of checques.
In 1946, the labor government nationalized the bank of England and
transferred the existing stock to the nominee of British treasury. In
1955, the British Banks made a departure from traditional banking by
undertaking hire-purchase finance for companies buying industrial
plants and machinery and took interest on hire-purchase finance.
2.3 BANKING IN PAKISTAN
Before the partition of India and Pakistan in 1947, branches of British
banks dominated banking in sub-continent. The first domestic banking
institutions emerged in the 1940, immediately after Pakistan's
independence from Britain. These institutions include the Australasia
Bank (today, Allied Bank Limited), Habib Bank Limited, Muslim
Commercial Bank, and the National Bank of Pakistan (NBP). The NBP
was wholly owned by the government but prominent merchant families
established the other three. On August 14, 1947 by an order called
Monetary system and reserve order 1947 the main provisions of the
Monetary system and reserve order 1947 were as follows
(i) The reserve bank of India would be the sole currency note
issuing authority in Pakistan till September 30, 1948.
(ii) The Indian currency notes will remain legal tender in both
Pakistan and India until September, 30, 1948.
(iii) The reserve bank of India would transfer the assets of value
equal to Pakistani currency to the government of Pakistan
after September,30 1948.
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(iv) The government of Pakistan would also issue coins in the
country after September 30, 1948. The coins issued by the
government of India would remain legal tender in Pakistan
for at least one year form the date of issue of Pakistani
coins.
The Reserve bank of India would perform the full functions of central
bank in Pakistan up to September 30, 1948.On 1st July 1948, the SBP
was formed. From 1960 to 1970, a number of specialized development
finance institutions (DFIs) such as Industrial Development Bank of
Pakistan and the Agricultural Bank emerged. These DFIs were either
controlled directly by the state or through the SBP, and were intended
to concentrate on lending to long-term projects in specific priority
sectors.
2.4 HISTORY OF MUSLIM COMMERCIAL BANK
Muslim Commercial Bank (MCB) unfolds 62 years of growth. MCB is
not an overnight success story. The bank started corporate life in
Calcutta on July 9, 1947. After the partition of the Indo-Pak Sub-
continent, the bank moved to Dhaka from where it commenced
business in August 1948. In 1956, the Bank transferred its registered
office to Karachi, where the Head Office is presently located. Thus,
the bank inherits a 62-years legacy of trust in its customers and the
citizens of Pakistan.
2.4.1 Nationalization
In 1974 the Government felt a harsh need of nationalization of banks
and financial institutions and nationalization act was introduced. Under
this act MCB was the first bank, which was nationalized. In the same
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year Premier Bank was merged with MCB and it started work as a
government bank. This nationalization affected the bank badly.
2.4.2 Privatization
All the financial institutions and banks did not show good performance
after nationalization, and again the government felt a big need to
privatize these banks. In 1991 the bank was privatize during Nawaz
Sharifs government. The government of Pakistan transferred the
management of the bank to National group, one of the leading groups
in the field of business. They were sold 25% shares. Now this group is
having 50% of the total shares. Government is having 25% shares and
general public is also having the same shares.
2.5 MCB Today.
Today MCB is one of the leading banks of Pakistan with a deposit base
of about Rs. 280 billions and total assets of around Rs. 443,616
millions. The Bank has a customer base of approximately 4 million and
a nationwide distribution network of 1,047 branches, including 8
Islamic banking branches and 7 overseas branches , and over 300
ATMs, and having 10,160 own permanent employees.
During the last fifteen years, the Bank has concentrated on growth
through improving service quality, investment in technology and
people, utilizing its extensive branch network, developing a large and
stable deposit base.
2.6 VISION AND MISSION STATEMENT OF
MUSLIM COMMERCIAL BANK.
VISION: To be the leading financial services provider, partnering with
our customers for a more prosperous and secure future.
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MISSION: We are a team of committed professionals, providing
innovative and efficient financial solutions to create and nurture long-
term relationships with our customers. In doing so, we ensure that our
shareholders can invest with confidence in us.
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References
Nasir, Saeed M. (2010)Money Banking & finance. Lahore:
Khan Faizan,Report on BoK, MBA (F), 2006-08(A/N)
Balance Sheet of MCB (Dec 31, 2011)
(On-line) Available. http://WWW.MCB.Com .
Ahmad Zeeshan ,Report On MCB, MBA (F), Session 2006-2011.
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CHAPTER 3
OVERVIEW OF MCB KHWAZA KHELA
BRANCH
The MCB Khwaza khela Branch is headed by the manager. He is the
responsible person for any activity that is happening inside the
premises of the branch. He looks over different issues in the branch.
There is also sub manager knows as Operation Manager. The operation
manager is responsible for the operation side of the branch. There are
also many officers who include the remittances, clearing, on-line, cash
department and credit officer, but all the activities of the officers are
linked with the operation manager except the credit officer.
3.1 PROCESS FLOW
The MCB Khwaza khela branch is headed by the Branch Manager.
Several staff officers are delegated different responsibilities. The
organizational structure is a combination of line and staff hierarchy.
The branch manager is assisted by the Manager Operation. Several
other officers like the head of cash department and remittance
department coordinate with the Manager Operation.
Credit department is not as busier as the remittance and other
departments while the credit officer does not assist the manager
operation. Though the branch does not deal in letter of credits and
foreign exchange, but it is over burden. There are not routine
transactions in the credit department therefore only one officer is
responsible for the department. While operation department is over
burden, that is why several other workers from remittance department
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or contract workers assist the department. Internees are often assigned
with the operation for help.
The customer service department is responsible for assistance of
customer related issues. The officer of the department is known as
Customer Service Officer (CSO). The officer deals and helps the
account holder as well as the walk in customers
The details of all the departments are given in a later chapter of the
report.
3.2 ORGANIZATIONAL STRUCTURE at Head office
13
Board Of
Directors
Computer
DivisionMarketing Division H R M Division Legal Affair Division
Secretary
Division Heads
Inspection andAudit Division
Treasury Division
Credit ManagementDivision
Training &
Research DivisionAccount Division
Business
Development
DivisionR&D Division
President & CEO
R T C Division
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G. M(Regional Head)
R M PeshawarR M Mardan R M Kohat
Credit In
charge
Financial
Controller
Internal Control
Unit(ICU)
Cash Mgt
Officer
Staff Officer
Quality
Service
Assurance(Q S A)
Internship Report on Muslim Commercial Bank. (Khwaza khela Branch Swat)
STRUCTURE AT THE CIRCLE OFFICE
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STRUCTURE AT MCB KHWAZA KHELA BRANCH
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3.3 SERVICES OFFERED AT THE MCB
Muslim Commercial Bank offers different kind of services to its
customers. The Bank charges its customer according to the schedule of
charges. However, it also offers some complimentary services for free.
Some of the services, offered at MCB Khwaza khela Branch are as
follows:
1. Credit Cards
2. ATM Cards.
3. Lockers
3.3.1 credit cards
MCB provides two kinds of Credit Cards. The first one is known as
Visa Cards and the second one is called Master Card.
3.3.1.1 MCB VISA Card
Whenever customer needs cash, he/she can use MCB VISA with a PIN
(Personal identification Number) at ATMs to withdraw an amount up
to 50% of his available credit limit. MCB VISA card is not just another
16
Branch Manager
Mr. Tasbih Ullah
Khan
Manager Operation
Sajid
Credit Officer
Qasim Faroqi
Clearing Officer Remittances Officer Computer Department
Cash DepartmentCustomer Services
Officer
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credit card. It not only provides conventional credit card services in a
manner that is superior in comparison, but goes an extra mile. MCB
VISA is accepted at all ATMs across Pakistan as at 27 million
acceptance locations worldwide. MCB VISA is a name synonymous
with unique, innovative and state of the art services making it the most
secure affordable and rewarding card. MCB offers two types of VISA
card.
a. Classic Card
The joining fee of classic card is Rs. 250 and annual fee is 250 rupees.
The supplementary annual fee is 250 rupees. Here it should be noted
that to avail the facility of credit card the person must have an account
in the banks branch.
b. Gold Card
The joining fee of Gold card is 350 rupees; while the annual fee is 350
rupees and the supplementary annual fee are 350 rupees.
Monthly payments are made as follows:
For paying cash over the counter at any MCB Branch, the bank
will charge Rs.100 on cash payment.
Sending a checques/pay order/draft in the name of MCB,
VISA. Bank will charge Rs.250 on all checques that are
returned unpaid.
Telegraphic Transfer: Payment is credited to the customers
account when bank receives the funds.
Documents Required for Credit Card:
Copy of National Identity Card
Personal bank statement for last 6 months -
If Partnership Firm, Partnership Deed/Bank letter
If Proprietorship, Bank Letter
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For salaried people, Salary Slip should be attached.
3.3.1.2 MCB MASTER CARD.
MCB master card is simply a credit facility to its clients. The card
holders have a facility to shop to a particular limit from over 12
millions merchants welcoming the card with in the country and
globally as well. The card was introduced in the year 1995, and now
offered more flexible services to its holders. The main feature of the
card is as under.
MCB is the 1st bank in Pakistan introduced enhanced feathers
of photograph on the card limiting fraud.
It has over 3000 outlets in Pakistan.
Provides 24 hours customers services.
Cash advance facilities are available in Pakistan and world
wide.
3.3.2 ATM Cards
ATM stands for Automated Teller Machine. ATM cards are issued
on the request of the customer and are only for Pak Rupees account
holders. ATM card provides the customers with round the clock access
to their accounts even after the banking hours. MCB provides the
following types of ATM cards. Here it should be noted that to avail the
facility of ATM card the person must have account and balance in
account.
Issuance of ATM Card:
All activities related to ATM cards are performed by Operation
department. The operation Manager collects the request for ATM cards
by getting the form filled by the customer. A file is preserved to record
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all the ATM cards applications. A list is then made of these requests
and is sent to the Karachi Head Office (card division). When the bank
receives the cards, the concerned officer arranges them in alphabetical
order of customers names. A file is maintained to record the names
and account numbers of the customers whose cards have been received
by the bank. Customers are called at their phone numbers then to
collect their cards or they are earlier at the time of filling application
notified about the collection date. The customer can collect their cards
from the bank when they are ready. It should be noted that the card is
kept in the custody of operation manager while the PIN code is kept in
the custody of supervisor of the branch.
a. Classic Card
The joining fee of classic card is Rs. 250 and annual fee is 250 rupees.
The supplementary annual fee is 250 rupees. The maximum limit of
withdrawal on the classic card is Rs. 10000. In 24 hours.
b. Gold Card
The joining fee of Gold card is 350 rupees; while the annual fee is 350
rupees and the supplementary annual fee are 350 rupees. The
maximum limit of withdrawal on the gold card is Rs. 25000 in 24
hours.
3.3.2.1 Functions of ATM card:ATM card has following functions:
Cash Withdrawal.
It can be used to check the account balance.
Transfer balance from one account to another account.
Withdrawals through credit cards.
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3.4 LOCKER SERVICE
At the MCB Khwaza khela branch, safe keeping service is also
provided to customers. When a customer rent locker, the relation
between the Bank and the Renter is that of a Licensor and Licensee.
To acquire a locker,
He/ she must be an account holder at the Bank.
The customer must attach a copy of ID card with the locker
rental form.
3.4.1 Locker Rent
The rent of locker is determined by the Bank. New charges for
year 2012 are:
Small size lockers are rented for Rs.3,500 p.a.
Medium size locker is rented for Rs. 4200. p.a
Large lockers are rented for Rs.5000. p.a
Locker purchase fee is Rs.2000
If key is lost by the customer or for any other damage to the
locker, Bank charge Rs.5000
One locker is rented to one person only.
3.4.2 Rules and Regulations
Lockers are rented for a period of one year in the first instance
and are automatically renewed from year to year.
Lockers may be hired in two or more names but the Renter
must give explicit instructions to Bank for mode of operation.
A Renter may at his own risk appoint another person to have
access to his locker by completing the requisite authority form
available on application at the Bank.
Letters, telegrams, and telephonic messages implying to
authorize a third party access to the lockers are not accepted.
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The Renter can not use Locker for the deposit of any liquid or
anything of explosive, dangerous or offensive nature.
In the event of non-payment of rent when due, the Renter
forfeits all rights to the use of the locker.
If the key of the locker is lost by the Renter, the Bank must be
notified without delay. In such an event any expenses to which
the Bank may be put in breaking open the locker and
substituting a fresh lock and key will be hand over to the
Renter.
The Bank has a lien on the contents of the locker for all rent
due form the renter to the Bank and also for all expenses to
which the Bank may be put in breaking open the locker and
substituting a fresh lock and key. Bank is entitled to sell the
contents of the locker so to recover such expenses.
Bank has the authority to Debit the account that Renter may
have with the bank, without previous reference to Renter, all
dues recoverable from him in respect of the locker.
3.4.3 Termination of Rental
In order to terminate the rental, notice must be given one month prior
to the expiry date of the rental. The locker with its key must be
surrendered to the Bank before closing hours of the bank on the expiry
date of the rental.
3.4.4 Death of Renter
In the event of the death of a sole Renter of a locker or of the last
surviving Joint Renter of a locker, the Bank may at its option permit
the legal representative of the deceased sole Renter, to inspect the
contents of the locker. On the production of Probate letter of
Administration, the Executor or Administration named, have power to
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deal with the contents of the locker and is deemed to be the Renter of
such locker in the place of the original Renter.
References:
Brochures of MCB Visa Card
Sajjad Muhammad,Report of MCB, MBA (F), 2006-08
Gul, Naveed, S.Report on MCB, MBA (F), 2010-08
Schedule of Bank Charges 2010-11.
Interview with the Manager Operation.
Locker opening form.
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CHAPTER 4
PROFILE OF DIFFERENT DEPARTMENTS
Every organization is divided into definite departments. Each
department performs different kind of job and requires staff with
specialized skill to handle the particular job. This increases the
efficiency of workers and makes the job of the employees easier.
There are several aspects on which departmentalization in an
organization can be based. The division can be made on the basis of
functions, product, customers or geographical location.
The Khwaza khela Branch of MCB is comprised of several
departments. The division is made on the based of functions and job
they perform. Hence it can be concluded that MCB has adapted to the
policy of functional departmentalization.
The main departments at the MCB Khwaza khela Branch are
mentioned below, also included is the detailed study at the specific
function these departments perform.
(1) Operation Department.
(2) Clearing Department.
(3) Remittance Department.
(4) Credit Department.
(5) Computer Department.(6) Cash Department.
(7) Customer Services Department (CS)
4.1 OPERATION DEPARTMENT.
The operation department is one of the most important departments at
any commercial bank. This department is responsible for the entire
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operation and function of the branch. This department is controlled by
the operation manager, who is senior and experienced employees of
the bank, for the post of operation manager the employee should be at
least, O G I or II having service in bank of minimum 10 years. The
operation manager ensures the smooth and error free working in
branch. He/she is responsible for the rectification of the entire audit
objection imposed by the Internal Control Unit (ICU). The tasks of the
operation manager are under.
Feeding of newly opened accounts in to system
Issuance of checque book.
Custodian of security stationery.
Dealing with the claim of the customers.
Issuance of PIN code of ATMs Card to customers.
Supervision of heavy amount transactions.
Supervising the working of the rest of the departments.
4.2 CLEARING DEPARTMENT.
Clearing system is a device that enables bankers to settle checques and
other instruments, drawn on each other. System is of immense value in
saving a lot of labor, time and expenditure there by increasing the
efficiency of the banking system.
SBP provides the services of clearing house, to all the schedule banks
in Pakistan. SBP has its branches in all big cities nationwide and
clearing in these cities is supervised by SBP. In cities with no SBP
coverage, the clearing is supervised by NBP.
Brief Working of Clearing Department
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The Checques received by a bank drawn on other banks are sorted
bank wise. A schedule is prepared for checques drawn on each bank.
The checques along with the schedule are presented in the
clearinghouse where they are delivered to the representative of the
various banks. Thus each bank receives from other banks checques
drawn upon it and delivers to other bank checques drawn upon them.
The first one is the inward clearing and the other is the outward
clearing. The net difference is settled by Dr and Cr, to their banks
account with the supervising bank.
Inward and Outward Clearing.
Checques collections for credit cards and reporting to Credit
Center.
Collections of outstation checques.
Honoring of checques, orders and drafts sent by other
branches/banks.
4.3 REMITTANCE DEPARTMENT.
This department of the commercial banks is responsible for the
issuance of Demand Draft (DD), Pay order, Telegraphic Transfer (TT),
Mail Transfer (MT).
Demand Draft is a written order issued by one branch to another
branch of the same bank to pay a certain some of money to the person
named in the instrument. Every customer whether account holder or
not can avail this facility by paying bank charges and the amount of
draft and can get the demand draft. Normally the D D is crossed at the
time of its issuance, so the payment of the instrument is paid just like
the crossed checque.
Pay order, is issued with in the city payment, or if the bank want to
make payment to any person, for this purpose pay order is issued, it
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should be noted that this instrument is drawn upon the issued branch
not on any other like demand draft.
Telegraphic Transfer, this mean of transfer of fund has diminished due
to online banking service, but still this mean of transfer of fund is used
to far-flung areas branches or where the on-line facility is not
available, here an written advise is send through FAX machine to the
respondent branch having the complete account detail of the person in
favor of whom the fund is transferred. Mail Transfer is also used to the
branches in remote area of no on-line facility, here the amount of fund
is transferred just like the T T but it is through post/ mail to the
responding branch.
4.4 CREDIT DEPARTMENT.
Lending produces the profit for a bank. It is the most important
function of a bank. It generates the banks own profits. The money that
a bank lends to someone is already somebody elses deposit. All the
banks do is pay less interest to deposit holders and earn more from
lending customer. The difference generates profit to the bank. The
credit department of the branch sanctions the following types of loans/
credit.
4.4.1 Loans
MCB advances three types of loans
a. Running Finance Facility
b. Demand Finance Facility
c. Personal Loans
4.4.1.1 Running Finance Facility
This facility is allowed to current account holders only, under this type
of loan the customer is given a limit on his account, which runs on the
debit side when he/she withdraws money. The interest is calculated
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only on the portion of money which has actually been used by the
account holder on daily basis and is payable at the end of every
quarter. This facility is allowed to the account holder for the period of
one year from the date of sanction of the loan, while it could be
renewed upon the request of the customer and also the financial
position of the account holder.
4.4.1.2 Demand Finance Facility
It is a terminating loan in which full sum of the sanctioned loan is
credited to the customers account on the day the loan is sanctioned.
The difference between the running finance and demand finance is that
in running finance the customer is given a limit and he can withdrawals
up to that limit according to his need and he can return the money
whenever he/she wish and the interest is charged on the money which
has been used actually. However, in demand finance facility, after the
loan is sanctioned and the money is withdrawals by the customer, the
customer repays the loan and the interest amount in monthly
installments. While the interest is calculated on the principal amount of
loan whether is used or not by the customer. The monthly installment
consists the portion of principal amount plus the portion of interest.
4.4.1.3 Personal Loans
MCB Personal loan provides with the financial advantages ofsufficient fund for holiday, buying a car, refurnishing house and
purchasing new T,V, they can also finance better education for
children. The client can choose tenure of one to three years for the
repayment of loan. Its distinction features includes
Bank to Bank balance transfer.
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Loan protector shield insurance coverage of balance loan and in
case of death or permanent and total disability.
Availability of early repayment option.
ELIGIBILITY FOR FINANCE FACILITY
Loan is only sanction when 100% cash back guarantee is provided to
the bank. The following types of securities are accepted for sanction of
loan.
Government Bonds Special Saving Certificate (SSC),
Defense Saving Certificate (DSC)
Cash Deposit at the same bank.
Foreign bank Guarantees.
4.5 CASH DEPARTMENT
Cash Department deals in receive and Payment of cash. At the cash
counter, customers deposit the money and withdrawals cash. The
money is deposited either in account or may be for the payment of
credit card bill etc while bank makes payments only against the
checques. Checques are received and presented for transfer or
collection purpose. The employees at cash department also handle the
utility bills and credit Card payments.
4.5.1 Cash Collection
Cash collection is accompanied by cash deposit slip. The slip contains
the account number; title of account and denomination of cash
deposited both in words and in figures followed by the signature of the
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depositor. The received cash is counted and is verified with the deposit
slip. Entries for cash deposits are recorded before handling over
receipts to the customer. Customers copy of the deposit slip is handed
over to the depositor. Before cash deposit slip is released, it is matched
and validated with the entries in the register for cash collection.
4.5.2 Cash Payment
Amount of payment of cash in a single transaction is fixed. Payments
beyond a certain limits are supported to be approved by an appropriate
authority. Before payment, the checques must be checked for post
dated payees name, crossing, amount both in words and in figures and
authentication of alterations. Tellers verify signatures on checques
before payment. In case of illiterate account holder the customer is
identified through the photograph available in the banks record and
thumb impression attested under the full signature of the teller who is
authorized to approve the transaction.
The money is kept in the vault which is built along with the cash
department. Cash counter is also termed as teller counter. The
Department is supervised by a Chief Teller. Every Cashier is provided
with a specific amount of money in the morning from the vault. The
cashier makes payments to the customers from that money at the end
of the day the cashiers check their balances and the remaining amounts
is placed back in the vault.
Cash handling is sensitive work. Every body at the branch is notallowed to enter the cash department premises. The names of the
authorized personnel who are allowed in cash department are
mentioned on the entrance door of the cash department. Internees are
not allowed to enter the cash department with out the proper
permission from the branch manager or chief teller.
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4.6 COMPUTER DEPARTMENT
Computer department is the place where the computer Part of the bank
is located. This is a very sensitive department of the Bank and only
authorized personnel are allowed to enter this Part. The computer
department consists of the server of the branch and it regulates all the
information that is feed by employees into their computers. Back-up
for all the computer systems is maintained in this Part. Every employee
is given their personal code which they feed into the system when they
work the code is consist on the employee no and password. This code
is the identification of an employee. This code is recorded at the
computer department and it records every transaction made by any
code at any time. Other than recording every transaction the computer
department also performs the following functions.
Hardware and Software trouble shooting.
Installation of new hardware and software.
Start of day procedure and end of day procedure i.e.
downloading all the data from Karachi Head Office in the
morning and, sending all the data back at the end of the day
Keeping inventory of all the hardware installed
Contacting dealers for maintenance of computers.
Taking back-ups on daily basis.
Training computer users.
The setup of computer department includes the following functions.
Setting servers files.
Sitting communication and networking equipments.
Handling the printers setup in the branch.
Maintaining the back-up tape devices.
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In other words maintaining every technical aspect of the bank comes in
the responsibilities of the data center. Well trained personnel have been
employed to look after the operations in computer department. The
MCB Khwaza khela Branch is also assisted by the MCB Islamabad
Branch in the data center department. Highly qualified recruits from
MCB Islamabad Branch make their visits to the MCB Khwaza khela
Branch for assistance.
4.7 Customer Service Department
Customer Service Department is the department in the branch which is
directly involve in the service and care of customers. This department
consist a female officer known as Customer Service Officer (CSO);
she serves the account holders and walk in customers. The officer is
responsible to attend customers at first hand and solve their problems.
4.8 ACCOUNTS OFFERED
MCB has introduced varied type of accounts to meet different class of
customers requirement. It offers accounts in Pak Rupee only. Some of
the accounts offered at MCB Khwaza khela Branch are discussed
below.
Types of Accounts
MCB Khwaza khela Branch offers the following local currency
accounts.
(i) Current Account.
(ii) Khushali Bachat Account.
(iii) Basic Banking Account.
(iv) Smart Saving Account.
(v) P L S Saving
The salient features of the accounts are described below:
4.8.1 Current Account
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MCB current account allows customers to deposit and withdraw cash
at their own convenience. It is best suited for those customers who
make huge amount regularly transactions of money in their accounts.
The account holder will have to maintain a minimum balance of Rs.10,
000 in this account on the other hand if in any current account the
balance is goes down from this amount Rs.50 will be deducted
monthly. Bank does not pay any interest on this account. The features
promoted for this account by MCB are as follows:
Is opened from Rs.10, 000.
Non-interest bearing checking account.
No Zakat deduction as per the rules of SBP.
Standing instructions for regular payments.
Any other standing instructions.
Running finance facility/Over draft facility.
Free 24-hour balance inquiry facility on Phone.
Free 24-hour withdrawal facilities through ATM network.
Unlimited checques writing.
4.8.2 Khushali Bachat Account (KBA)
MCB pays close attention to the low income people and for this
purpose many initiatives have been taken in this regards, Khushali
Bachat Account is one of these. This type of account is for low income
house holders, this account can be opened with one thousand rupees;
there is no restriction on regular deposit and withdrawals, however
large amount could not be withdrawals at a time. MCB pays half
yearly profit on KBA but the rate for the profit is not predetermined.
Main features of KBA are
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Is opened from Rs. 1,000.
No monthly deduction.
No restriction on deposit and withdrawals.
Profit is paid on half yearly basis.
Account holder can avail ATM and other banking facilities.
No Running finance/ Over draft is allowed.
Free 24-hour withdrawal facilities through ATM network.
4.8.3 Basic Banking AccountMCB considers the Students one of the important part of its customer
strategy, and special care is given to students. For this purpose a
special type of account have been lunched i.e. Basic Banking Account
(BBA). BBA can be opened with a minimum amount of one thousand
rupees, for opening the account the student would have to present
student ID card National I D Card and written request from the
concerned institution. No profit is paid and there is no deduction on
BBA, maximum withdrawal is from Rs 1500 up to Rs 2000, at a time.
Online and ATM facilities are given to the account holder.
Main features of BBA are as
Is opened from Rs 1000.
Is especially for students.
No profit is given.
No deduction on least balance.
ATM and Online facility.
Free 24-hour withdrawal facility through ATM network.
No Running finance/ over draft facility.
Maximum withdrawal is from Rs 1500 up to 2000.
4.8.4 Smart saving Account
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Salaried and small income group is also the target customer of MCB,
and for this purpose Smart Saving Account has been introduced. Smart
Saving Account is opened with a minimum amount of one thousand
rupees; the account holder would have to show his/ her pay slip along
with the national ID card. Profit is given on this type of account on half
year basis, while there is no restriction of the deposit and withdrawals,
no running finance facility is given to the account holder. There is also
no deduction on the least balance.
Main features of the account are as.
Is opened from Rs.1000
Is especially for salaried persons.
Profit is given after six months.
Zakat deduction on 1st Ramadan.
No deduction on least balance.
4.8.5 Profit & loss sharing (PLS) Accounts.
Another type of account is Profit and loss sharing account (PLS). No
interest is paid on this account but it is maintained on the basis of
sharing of profit and loss. These accounts are opened mainly by those
customers whose banking transactions are not frequent and numerous.
Lower and middle income groups, small traders, professionals, farmers
and other salaried classes usually make such deposits. Funds can be
deposited frequently through cash, checques, demand drafts, pay
orders, telegraphic transfers and other such instruments.
Main features of the account are as.
Is opened from Rs. 5,000.
No monthly deduction.
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Zakat deduction on 1st Ramadan.
No restriction on deposit and withdrawals.
Profit is paid on half yearly basis.
Account holder can avail ATM and other banking facilities.
No Running finance/ Over draft is allowed.
Free 24-hour withdrawal facilities through ATM network.
4.9 ACCOUNT RELATED ISSUES
There are several issues which affects the status and legitimacy of the
account. They are given stepwise.
4.9.1 Account Opening
Account opening determines relationship between banker and
customer. Bank practice maximum concern before opening of an
account. Official procedure for opening an account with the bank is
given below.Formal Request
Account opening form is provided by the bank to its customers. It
contains information about the customer, the business or profession
he/she works in, income status, addresses and contact numbers etc.
Reference
The applicant is asked to provide an apposite reference. The individual
who gives the reference should be a customer or a bank employee.
Specimen Signature
Signature serves as an authority of customer drawn on bank. The
customer is asked to give specimen signature on a card known as
Specimen Signature Card. For illiterate persons, along with two recent
photos, left-hand thumb impression for men and right hand thumb
impression for women is taken. Signatures of the customers are then
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scanned and saved in the computer for signature verification for future
reference.
Regulations of Account Opening
The following rules and regulations are taken into account when an
account is opened. When the bank and the applicant accept mutual
position and accept all the rules, the account is opened.
Against submission of the Banks prescribed application form,
duly introduced in the manner provided and on supply of
documents required, an account may be opened. Bank has the
right to refuse opening an account without giving any reason.
Account maintenance fare is charged in rupee for PKR
accounts and foreign currency accounts are charged in foreign
currency. Current and PLS saving accounts are charged
according to the Banks schedule of charges when minimum
balance falls below the balance requirement.
4.9.2 Deposits
The bank receives deposits on the following conditions.
The Bank accepts checques, drafts, and other instruments,
payable to the depositor for collection; entirely at depositors
risk.
When counting of cash deposited is done after the customer has
left the counter and if the amount indicated on the pay-in slip
differs from that of the actual cash count, the Bank count is
final and conclusive.
4.9.3 Withdrawals
Withdrawals at MCB are made in the following pattern.
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Checques and other payment instruments are to be signed
according to the specimen signature provided to the Bank and
amendment are to be legitimated by the drawer full signature.
Rupee savings, High Yield Deposits and all types of accounts
can not be overdrawn.
Cash withdrawals from accounts are subject to availability of
currency notes.
4.9.4 Issuance of Cheque Books
MCB has started a new system for issuing the checque books to its
customers. Checque books are not issued at the time of account
opening, this is because MCB issues checque books to its customers
after the confirmation of all the information provided by the customer
to the bank, and this done through the sending of letter of thanks to the
customer by post, when the customer receives the letter and bring it to
the branch, it shows that the address and the information provided by
the customer are true and correct.
Procedure
After opening the account with the bank and receiving letter of thanks,
customer is asked to fill a checque book request form, provided by the
bank the form contains the account numbers, customers names,
number of leaves needed by the customer and date of collection of
checque book by the customer After getting the checque book request
forms the signature of the customer is verified by the verification
officer, the officer verifies the signatures, already scanned in the
computer at the time of account opening. After verification of
signatures, the requisition is given to the operation manager and the
operation manager issues the checque book to the customer. Usually
25 or 50-leaf checque book is issued to the individuals and 100-leaf
checque book is issued for the companies.
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4.9.5 Return on Account
The return on accounts is given as:
Profit on certain deposits is applied twice a year for periods ending
June and December. The profit is announced after respective profit
computation is completed for each period according to applicable
regulations.
Interest on foreign currency account is applied half yearly in June and
December on minimum balance during each calendar month. Interest
rates on foreign currency savings and term deposits are normally fixed
at the beginning of each half-year but the bank has the liberty to fix
them on a monthly basis.
4.9.6 Statement Of Account
Bank present account statements to its customer for understanding. In
these statements the Bank ensures that all debit and credit entries are
correct. In case of error, the bank passes adjusting entries to rectify
error without notice. The bank is not liable for any loss or damage due
to such errors.
The Bank does not require any earlier authorization from the account
holder for debiting the account for any expenses, fees, commissions,
interest, zakat, tax, stamp duty, excise duty etc. that have come up out
of any dealings with the bank.
4.9.7 Account Closure
When an account is closed, the unused checques are returned to the
bank immediately. It is made sure to the bank in writing that idle
checques have been destroyed. The Bank also can close an account and
terminate any other type of relationship with the customer without
assigning any reason or prior notice.
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References
Interviews & working with the respective departments officers.
Account Opening Form of MCB.
(On-line) Available http://WWW.MCB.Com
CHAPTER 5
FINANCIAL ANALYSIS
Analysis of an organization discovers its potential areas of
improvement and evaluates its performance of the past period. It
identifies the possible solutions to problems faced inside the bank and
gives an insight of the opportunities which can be exploited to reap
benefits.
Financial Analysis
The financial analysis is based on the national performance of MCB.
The different Ratios calculations (figures) have been taken from the
annual audited balance sheet for the year ended December 30, 2011.
5.1 FINANCIAL ANALYSIS
Financial analysis of an organization expresses the performance of the
bank for over a period of time. Different ratios analyze the banks
capabilities. Varied relations are drawn on the basis of this analysis.
Financial ratios have their own importance in analyzing the
organizations performance. An increase or decrease in one ratio does
not mean anything good or bad. It is always linked to another one that
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is more important. Considering the example of higher interest, if the
bank wants to have most of the deposits of the market, it has to offer
higher interest rates. This would bring the deposits, thus deposits will
increase, but on the other hand it will have to pay higher interest as
well, thus decreasing the profit ratio. Relativity is the prime factor in
evaluation of ratios.
The financial ratios of the MCB reflect that the banks deposits have
increased and it has also increased the profits. Advances have been
made which have resulted in the fall of cash. The overall financial
position shows that the bank is growing and is on upward direction in
profitability as well.
The financial Analysis is as follows. Different values come out from
the calculations for year ended 2011.
5.1.1 LIQUIDITY RATIOS
5.1.1.1Working Capital Ratio
Current Assets-current Liabilities
2011 2010
41172321 39095552
A measure of liquidity calculated by subtracting current liability from
the current assets of the firm. This figure is not useful for comparing
the performance of different firms, but it is quite useful for internal
control.
2011 2010
Current Assets
42635217
1 394461394
Current Liabilities
38517985
0 355365842
40
Working Capital Ratio (RS in '000')
394461394
426352171
385179850
355365842
300000000
320000000
340000000
360000000
380000000
400000000
420000000
440000000
Current Ass tes Current Laibilities
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Cash Ratio (Rs in '000')
355365842
3968388339631172
385179850
0
50000000
100000000
150000000
200000000
250000000
300000000
350000000
400000000
450000000
Cash Current Laibilities
Internship Report on Muslim Commercial Bank. (Khwaza khela Branch Swat)
5.1.1.2 Current Ratio
Current Assets/Current Liabilities
2011 2010
1.107 1.110
The Current ratio,
one of the most commonly cited financial ratios, measurers the firms
ability to meet its short-term obligations. In the year 2010 the ratio is
1.110, while the following year it comes to 1.107
5.1.1.3 Cash Ratio
Cash/Current Liabilities
2011 2010
0.103 0.112
This ratio measures the ability of the firms to meet
the current liability by its most liquid asset that is cash in hand.
5.1.2 TURN OVER RATIOS.
5.1.2.1 Assets Turn over
Interest Revenue/Total Assets
2011 2010
0.090 0.077
2011 2010
Current Assets
42635217
1 394461394
Current Liabilities
38517985
0 355365842
2011 2010
Cash 39631172 39683883
Current Liabilities
38517985
0 355365842
41
Assets turn over Ratio (Rs in' 000')
44361590
4
3178659540043824
41048551
7
0
50000000
100000000
150000000
200000000250000000
300000000
350000000
400000000
450000000
500000000
Interest Revenue Total Ass ets
Current Ratio(Rs in '000')
426352171
394461394
355365842
385179850
300000000
320000000
340000000
360000000
380000000
400000000
420000000
440000000
Current A sstes
Current Laibilities
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Gross Profit Margin (Rs in '000')
40043824
28483084
23921062
31786595
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
45000000
Gross Profit Interest Revenve
Internship Report on Muslim Commercial Bank. (Khwaza khela Branch Swat)
The Assets turn over ratio tells us the relative efficiency with which a
firm utilizes its total assets to generate interest revenue. From the
calculation above the ratio of MCB has shown improvement.
5.1.3 DEBT RATIO.
5.1.3.1 Total Debt RatioTotal Liabilities/Total Assets
2011 2010
0.868 0.866
The bebt ratio measures the proportion of total assets financed by the
creditors. The high this ratio, the greater the amount of other peoples
money being used in an attempt to generate profits.
5.1.4 PROFITABILITY RATIO
5.1.4.1 Gross Profit Margin
Goss Profit (Fund Based Income)/Interest
Revenue
2011 2010
71.130 75.255
2011 2010
Interest Revenue 40043824 31786595
Total Assets443615904 410485517
2011 2010
Total Liabilities
38517985
0 355365842
Total Assets
44361590
4 410485517
2011 2010
Gross Profit 28483084 23921062Interest Revenue 40043824 31786595
42
Total Debt Ratio (Rs in '000')
443615904
355365842
385179850
410485517
0
50000000
100000000
150000000
200000000
250000000
300000000
350000000
400000000
450000000
500000000
Total Liabilities Total Assets
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Operating Profit Margin (Rs in 'Millions')
24373
40043
25887
31786
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
Operating Profit Interest Revenue
Return on Equity (Rs in'000')
52244865
1526556215374600
45414158
0
10000000
20000000
30000000
40000000
50000000
60000000
Net Profit Af ter Tax Owner's Equity
Internship Report on Muslim Commercial Bank. (Khwaza khela Branch Swat)
This ratios measure the percentage of each interest Rupee remaining
after the firm has paid for its interest paid, the higher the gross profit
margin, the better, and the lower the relative cost of merchandise sold.
5.1.4.2 Operating Profit Margin
Operating Profit Margin
Operating Profit/Interest Revenue*100
2011 2010
64.648 76.678
Measures the percentage of each interest Rupee
remaining after all costs and expenses other than
interest and taxes are deducted, the pure profits earned on each Interest
Rupee.
5.1.4.3 Profit Before Tax Ratio
Profit Before Tax/Total Income*100
2011 2010
63.799 70.164
This ratio measures the amount of profit
earned by the firm before the Tax.
5.1.4.4 Return on equity
Net Profit after Tax/Owner's equity *100
2011 2010
2011 2010
Operating Profit 25887 24373
Interest Revenue 40043 31786
2011 2010Net Profit Before Tax 21867 21308
Total Income 34275 30369
43
Profit Before Tax Ratio ( Rs in 'Millions')
34275
30369
21867 21308
0
5000
10000
15000
20000
25000
30000
35000
40000
Net Profit Before Tax Total Income
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Retun on Assets (Rs in '000 ')
443615904
1526556215374600
410485517
0
50000000
100000000
150000000
200000000
250000000
300000000
350000000
400000000
450000000
500000000
Net Profit After Tax Total Assets
Internship Report on Muslim Commercial Bank. (Khwaza khela Branch Swat)
29.43 33.61
The return on equity measures the return earned on the owners
investment in the firm. Generally the higher this return, the better off
are the owners.
5.1.4.5 Return On Assets
Net Profit After Tax/Total Assets*100
2011 2010
3.466 3.719
This ratio is also called return on investment,
Measures the firms overall effectiveness in generating profits with its
available assets,
the time interest earned ratio, measures the firms ability to make
contractual interest payments. The higher the value of this ratio, the
better able the firm to fulfill its interest obligations.
5.1.4.7 Net Profit Margin
Net Profit/ Interest Revenue
2011 2010
2011 2010Net Profit After Tax 15374600 15265562
Owner's Equity 52244865 45414158
2011 2010
Net Profit After Tax 15374600 15265562
Total Assets
44361590
4 410485517
44
Net profit Margin (Rs in '000)
15374600 15265562
40043824
31786595
0
5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
45000000
Net Profit Interest Revenve
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38.394 48.025
The net profit margin measures the percentage of each Interest. The net
profit margin measures the percentage of each interest Rupee
remaining after all costs and expenses, including interest and taxes,
have been deducted. The higher the firms net profit margin, the betterthe net profit margin will be.
References:
Annual Balance Sheet (Dec 31,2011) Of MCB.
Gitman, Lawrence, J. 2001 Managerial Finance 9th Patparganj, Dehli
India. Edition Chapter 4.
James C. Van Horne & John M. Wachowicz, Jr. Fundamentals of
Financial Management.11th. Edition Chapter 6.
2011 2010
Net Profit
1537460
0 15265562
Interest Revenue
4004382
4 31786595
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CHAPTER 6
SWOT ANALYSIS
MCB has some unique factors like being the oldest bank of the
country, which adds to its value. Its foreign background and the look
of multinational institutions create attraction for people. The formal
SWOT analysis constitutes of four different solid parts. The SWOT
analysis comprise of the strengths it has, the weaknesses that are a part
of it, the opportunities that it can exploit and the threats it faces from
competitors. However it also encompasses generally the Khwaza khela
Branch. Certain factors are already attached with the name of MCB,
whose benefit or loss is automatically the part of MCB Khwaza khela
Branch.
6.1 STRENGTHS
MCB benefit from a few points which ultimately makes its backing
strengthened. Some of these points are as follows:
Owned by very strong financial group (Mansha Group)
The largest private sector bank in Pakistan with a network of1047 branches domestically and 7 foreign branches and 01 E P
Z.
Since MCB is one of the oldest banks in Pakistan it started its
operation in 1947 so it has sufficient operation experience.
First bank to privatize which has now became the leader in
market with the largest on-line and ATM network in country.
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Sole provider of mobile banking.
Bank emphasis on consumer needs and demands which is
ensured in the branches through the Quality Service Assurance
(QSA) department of the bank.
MCB emphasis on the extension and improvement in service.
Attractive and high rate of interest.
Best and optional policies and attractive compensation
packages for employees.
Human Resource development and employment of new
An efficient and experienced group of management.
Easy access to the customers at their residential localities
through large network of branches.
6.2 WEAKNESSES
Weaknesses, like strengths are a part of almost every organization.
These weaknesses points out the potential areas of improvements andmake the organizational behavior intelligent. A cumulative effort to
overcome these flaws makes success possible.
During the internship period the weaknesses that generally surfaced
and were visible at MCB Khwaza khela Branch are described below.
Slow down in advance growth in the short term as MCB
focuses on quality customers in the market.
Customers having accounts of small amount are not given thesame services and dealing given to those of high amount.
MCB keep on increasing the numbers of branches while the
numbers of employee are not at the same pace which has lead
to the shortage of employees.
Unrest among employees due to continuous changes in the
employees policies from management.
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Managing group is also having huge investment in other sector
like textile and cement industry etc, which may divide their
attention.
6.3 OPPORTUNITIES
Success, more than anything is all about converting into opportunity
what everybody else considers danger Opportunities, when exploited
properly reap profits and earn success. They are almost always a matter
of time. They are to be sought, picked and made use of, before any
body else gets up and do so.
Due to largest ATM network, MCB can expend its 24 hours
cash facilities to other cities of the country in order to meet the
growing market demand.
Increasing focus/target on different types of customers MCB
can open women branches especially in those areas where
women class want to get involved but could not due to
environmental restrictions.
Growing policies of government on business and commerce
sectors provides MCB an opportunity to efficiently meet with
the businessmens requirements of instant cash and financing
facilities.
To further expend its branch network in business territories.
MCB also has an opportunity to expend it new technological
advancement like tele bank and online banking facilities in
order to serve the customers more efficiently.
To increase the number of branches in forging countries.
6.4 THREATS
Threats are the unseen, futuristic, probable events that can occur and
prove dangerous in consequences. Every organization is faced by some
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category of threats in its operations and functions. Opening new
outlets, altering existing policies, designing fresh marketing strategies,
bringing change in physical structure, almost every activity that an
organization does, it faces some kind of threats, just like the benefits it
seeks.
MCB also faces some threats which can just prove minor assumed
fears; as well as can become events with grave consequences. The
prevailing condition indicates the following as the possible threats.
Inconsistency in governments policies regarding to business
and economic sector.
Growing global technological advancement.
Strict regulation by the government over credit facilities to the
customers as well as meet the Prudential Regulation as by the
SBP.
Loss of confidence of prospective customers due to freezing of
accounts in the past by the government.
References:
Gitman, Lawrence, J. 2001 Managerial Finance 9th Patparganj, Dehli
India. Edition Chapter 4.
James C. Van Horne & John M. Wachowicz, Jr. Fundamentals of
Financial Management 11th Edition Chapter 6.
Ahmad Zeeshan,Report On MCB, MBA (F), Session 2006-2011.
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CHAPTER 7
FINDINGS AND RECOMMENDATIONS
Since the name and icon of MCB stands for sign of trust and reputation
that is why the number of customers of MCB is growing day by day.
Analyzing the banks performance in several departments and
evaluating the strengths and weaknesses leads to some proposals.
There are certain rooms of improvement which has been found during
the period of internship.
1. There Are Always Long Queues On The Cash Counter.
In MCB Khwaza khela branch there are long lines from the very
beginning of day. At the cash counter the customers are some times
starts to speak harsh wording due to the turning of numbers of each
customers.
2. The Attitude Of Employees Is Not Customers
Oriented.
In marketing it said that the customer is the king, and must be obeyed.
But this concept is not used in the branch, the staff of the branch do not
know any thing about the value of customer, however only the
customers having huge balance is given the due attention.
3. No Proper Setting Arrangement For Customers.
The setting arrangement is important for both the employees and for
the customers as well. Often it was visible that during peak banking
hours many customers use to stand anywhere they wanted to. This
creates stress for the employees as well as for the customers.
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4. Technology Incorporated Is Not Up To Date.
Technology plays a crucial role in the present age, the technology used
in the branch is not up to date the employees still working on the old
computers, the internet connection which is used for the online
transaction is the old dial up connection, which should be the Digital
Subscriber Line (DSL).
5. Insufficient Staff.
Another serious problem at the branch is the scarcity of staff, the staff
working in the branch is enough as compare to any other branch but if
we glance over the number of customers and the location of branch the
staff is scare.
6. No Formal Training And Development Program.
The MCB claims of training and educating its employees but
practically speaking it should initiate a good employee training and
development plan. This would help employees to know more about
their specific job and its actual requirements.
7. Employees Are Given Hard Targets.
Targets which are given to the employees should be in such a way that
it can be accessible, but normally it has been observed that hard targets
are given to the employees and are asked to be achieve in a short span
of time.
8. Whole Concentration Is On The Upper Class Customers
Only.
The whole concentration of the staff remains on the customers having
huge amount of balance, while the customers having less amount in
their accounts are neglected.
9. Employees Are Over Loaded.
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The employees of the entire working department in the branch are over
loaded, even any employee can not take a leave of a single day.
10. Employees Are Tortured By The Internal Control Unit
(ICU).
In MCB the employees are tortured by the unit, if the member of the
unit finds any error in the working of any employee, the employee is
given a charge sheet, and is asked for explanation, and after that the
case is hand over to the enquiry committee for further procedure, so
this is a long way process and creates unrest among employees.
Advice is seldom welcome and those who want it the most always like
it the least Recommendations suggest improvements in areas which
have room for polishing and progress.
Criticizing several factors at MCB Khwaza khela Branch does not
mean that these aspects are permanent flaws of the branch. Instead, it is
intended that these mistakes be removed. For the confiscation of these
errors, certain recommendations are forwarded.
1. QUEUING MODELS FOR CASH COUNTERS
The long queues at cash counter give an awkward look. This problem
can be solved by using the Queuing Model concept. These models are
proposed to facilitate organizations control waiting lines. Through this
approach, the bank can decide the best possible number of checkout
stands. The number of checkouts should balance personnel cost and
customer waiting time.
2. CUSTOMER ORIENTED ATTITUDE
The bank staff should be properly educated about the customers value.
The bank should use the marketing approach, and customer satisfaction
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should be taken into account. There should be no status discrimination
between customers. The bank staff should be courteous to all
customers. A customer is fascinated and brings other customers also to
the bank if the service is efficient and courteous.
3. PROPER SEATING ARRANGEMENT
Customers, waiting for their turns, should be provided with proper
seating arrangements. Often it was visible that during peak banking
hours many customers use to stand anywhere they wanted to. This
created stress for the employees as well as other customers waiting for
their job getting done. A specific place should be reserved for the
customers by placing chairs there. The staff should politely tell the
customers to be seated till their work is ready. This would ease the job
of the employees as well as clients wont bear the pain of being
standing still and waiting.
4. INSUFFICIENT STAFF
Another crucial problem in MCB is the scarcity of staff, all the
branches of MCB are over loaded due to high customers attractiveness,
which not only create problem for the customers but also for the
existence staff, while the quality and fairness of work is also affected.
So MCB should hire more staff in order to cope with the issue, for this
issue short and long term plan which has been given in the
implementation plan may be used.
5. TRAINING AND DEVELOPMENT PROGRAM
The MCB claims of training and educating its employees but
practically speaking it should initiate a good employee training and
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development plan. This would help employees to know more about
their specific job and its actual requirements.
7. PERFORMANCE APPRAISAL
The practice of performance appraisal should be made a serious and
mature process which can identify an employees potential accurately.
Giving unachievable tasks to employees discourages them and they
dont strive for the achievements of those tasks. If targets which are
practical given to employees and any bonus or reward are announced
on the achievements, this would greatly influence the performance of
employees. It can be possible only then that the employees will take
their performance appraisal serious and would yearn for betterment.
8. MARKET SEGMENTATION
The general target market of MCB is the upper class of the society.
The sales force is often busy in looking at probable clients with largeamount of money. It can also prove costly when sometimes another
potential customers gets deviated because of the less attention paid to
him. Also concentration in one market segment bears high risk and can
lead to huge losses if a deposit is withdrawn. The bank should also
offer some products for potential customers with comparatively low-
income level. Most of the potential customers cannot fulfill the high
balance requirements and high service charges. Bank should revise its
policies on charges for services it provides. This will result in more
satisfied and trustworthy relationship between clients and employees.
9. EQUITY CONCEPT
All the departments should be given with an equivalent load of work
this would result in a friendly relation among employees as well as it
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will boost the coordination between different departments. Another
suggestion would be that the staff should be involved in the decision
making process. So that they can make arguments about their status of
work after accepting the new responsibilities. This would also clarify
the issue between staff members and responsibilities and authorities
will be properly delegated, resulting in the ending of the confusions
about work and responsibilities. It would also give a feeling of own
ness and security to the workforce of being very much a part of the
bank.
10. FAIR INTERNEE SELECTION PROGRAM
A fair internees selection system should be established for selection of
internees. Instead of sending CVs to Karachi Head Office, the
applicants should be interviewed locally in the branch on some specific
date. Aptitude and competence of the candidates should be considered
a merit for selection instead of their references. Bank administration
should give proper training to the internees. They should educate them
about the purpose of all the functions they perform. MCB also give
internship generally for six weeks and for the maximum of eight
weeks. This is a problem for MCB itself. Thus during the six or eights
weeks duration when an internee gets some know how about the banks
operation, his/her time completes; and when he/she can be more useful
than ever, he/she is asked to leave. If MCB increases its internship
period for a quota of seats, it will help MCB in taking much use of
internees it trains for work. MCB also does not pay any stipend to the
internees, which lead to discouragement among the internees.
11. EMPLOYEES ARE TORTURED BY THE ICU.
The main job of the Internal Control Unit (ICU) is to ensure error less
work in a branch. This unit critically checks the routine activities of a
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branch on monthly basis. The recommendation for this finding is that if
the ICU finds any error/ mistake it should be rectified on the spot
instead creating such a big issue which create un rest among
employees.
References
1. Interview with the employees and personal observation.
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CHAPTER 8
IMPLEMENTATION PLAN
Analyzing the banks performance in several departments and
evaluating the strengths and weaknesses leads to some proposals. The
implications of these suggestions are more important issue. MCB
Khwaza khela Branch is generating profits and is targeting the market
efficiently with its energetic management. Its location at the centre of
business sector in Peshawar city is also adding to its easy accessibility
by customers. Thus the outlook requirements of the bank are almost
complete. The place for improvement in the bank is inside.
The underlying problem of several other problems that was observed
during the internship period was that MCB Khwaza khela Branch is
and understaffed bank. It has enough vacant room for new
employees. This hitch is the root cause of many other problems.
Considering the prevailing circumstances at MCB Khwaza khela
Branch and taking a broad overview of the possible solution, one
would surely come up with the idea of employing fresh energetic
workers. This would root out the above mentioned problems.
Additionally an employee in the cash department would lessen the
burden of the already working tellers as well as it would help in thereduction of long queues at the cash counter.
IMPLEMENTATION PLAN
Thus now when the basic area of problem is identified, the
understaffing, several measures can be taken into account to deal with
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this problem. There are two plans which are suggested for dealing for
this problem.
8.1 Short Term Plan
8.2 Long Term Plan
8.1 SHORT TERM PLAN
The short term plan is devised for employees who would be given the
chance to serve in the bank for a limited period. This can be done in
the following two methods.
a: Longer Duration Internship Program
The bank normally offers a 6 weeks internship program. At the
maximum this duration stretches to 8 weeks. During this period the
employees of the bank helps the internees to understand various
procedures regarding different departments. After the coaching and
teaching of these 6 or 8 weeks the internee is able to comprehend most
of the functions of the bank and he or she is able to follow the
appropriate procedure which is to be followed for the completion of
that function.
The bank can introduce a long internship program for its own benefit
as well as these graduates. To keep the normal internees unaffected, it
can reserve a special quota for these kinds of long duration internees.
The selection can be made in the local branches. To get good
recommendation on this kind of a report the applicant will be
motivated and will work hard. This will help him in getting experience
as well knowledge about the delicacies of practical job. Most of the
organization requires earlier experience in the field, thus MCB can be
helpful in developing the youth into a positive direction as well. Since
the name of MCB already means trust, this will build many peoples
career in good organizations. The bank will benefit in the shape of
obtaining a motivated and energetic employee and that also at a lesser
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cost than the normal employees. The cost would be less because since
these would be fresh graduates seeking experience and
recommendation, hence they can take as internees.
b: Contract Workers
The bank can also employ contract workers also. If the bank wants to
be careful in choosing a better lot among the pool of candidates for its
operations, it can offer contract seats. Contracts seats will be for
applicants who will be employed on contract basis.