INTERNSHIP REPORT

ON
MCB BANK LIMITED
(SERVICE MORE GUJRAT- 1620)

Instructed By:
Samia Ilyas
Lecturer
Virtual University of Pakistan

Presented By:

Ania Akram
M.Com
INTERNSHIP REPORT

DEDICATION

I dedicate whole of my education along with my life to my beloved parents and

respected teachers, who were always kind to me.

May God Bless Them (Amen).

ANIA AKRAM

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INTERNSHIP REPORT

ACKNOWLEGEMENT

First of all, I’m grateful to ALMIGHTY GOD, who bestowed me with the health,
abilities and guidance to complete the project in a successful manner, and without HIS
help I was unable to perform this task.

Secondly, I am grateful to my prestigious institute that made his learning opportunity

a part of our education, especially internship coordinator who guided me well.

I am also thankful to all other teachers as the knowledge imparted by them enables me
to gain knowledge of the organization in best way.

I would also thank to all the staff of MCB Bank, particularly Mr. Syed Ali Hassan
Shah (Branch Manager) who gives me an opportunity to work in the bank and gave
me a chance to explore my knowledge.

I submit my earnest thanks to my affectionate parents, who always remains at my

back to support me, I can never give the return of their un-tired struggle for me, but I
can only prove myself as they expect from me.

TABLE OF CONTENTS

1. Preface
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INTERNSHIP REPORT

2. Introduction Of Bank

3. Types Of Bank

4. Executive Summary Of MCB

5. History Of MCB

6. Vision And Mission Statement Of MCB

7. Commercial Bank

8. Branches & ATMs

9. Product & Services

10. Department In MCB

11. Management Hierarchy

12. Investment Banking

13. Know Your Customer

14. Remittance Department

15. Financial Statements

16. SWOT Analysis

17. Work Performed By Me

18. Findings

19. Recommendation

PREFACE

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INTERNSHIP REPORT

Banking sector owes a pivotal importance in the economy of any country through its
variant functions. This basic motivator that stressed me to join any bank for internship
Training. Moreover, the experienced and practice learned during this tenure also
prove very helpful and facilitating in the forthcoming profession life.

This report is the results of 6 week internship will, MCB Bank Ltd. Service More
1620 Gujrat. The motive behind selecting this bank is that, it is one of the Top 10
Asian Banks.

The fact remains that MCB Bank Ltd. process an Excel/cut and historical importance
being the most senior and leading in terms fluids and services to Pakistan at all ages
of life.

I had with the strong belief that this report will guide and facilitate the readers to
understand the functioning of banking system and more importantly have good
knowledge about MCB Bank Ltd. My utmost efforts to elaborate this report wit,
material read, listened and observed. Yet, I feel that this period was not long enough
to learn and understand the complex and widespread functioning of banking sector.

I am really thankful to the entire staff member of the aforesaid branch for the friendly
and cooperative behavior during my internship.

ANIA AKRAM

M.COM

INTRODUCTION OF BANK

MCB Bank is one of the leading banks of Pakistan with the 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
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INTERNSHIP REPORT

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.

Since privatization, MCB’s growth has been phenomenal. Today, MCB in one of the
largest foreign banks in Sri Lanka, the first bank in Pakistan to launch Global
Depository Receipts (GDR) in 2006, has strategic foreign partnership with May bank
of Malaysia which holds 20% shares in MCB through its wholly owned subsidiary
May bank International Trust (Labuan) Berhad since 2008, has international indirect
regional presence in Dubai (UAE), Bahrain, Azerbaijan, Hong Kong and Sri Lanka
and serving through a domestic network of over 1150 branches and over 690 ATMs
across Pakistan with a customer base of 4.96 million (approximately).

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.

IMPORTANCE OF BANKING

Banks play very important role in the economic life of a nation. The growth of the
economy is development upon the soundness of its banking system. Although banks
so not create new wealth but borrow, exchange and consume. These make generation

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INTERNSHIP REPORT

of wealth. In this way, they become most effective partners in the development of that
country. To encourage the habit of saving and to mobilize these savings is its basic
purpose. Banks deposits surplus from the public and then advances the surpluses in
the form of loans to the industrialists, agriculturists, businessmen and unemployed
people under different schemes so that they setup their own business. Thus banks help
in capital formation.

If there are no banks and then there would be concentration of wealth in few hands
great portion of wealth of country would be idle. In the fewer developing countries
rate of saving is very low and due to this rate of investment and rate of growth is very
low. We can take hank just like a heart in the economic structure and capital provided
by it is like blood in it. As long as the blood is in circulation, the organs will remain
sound and healthy. If the blood is not provided to any organ then the organ would
become useless. So if the finance is not provided to agriculture sector or to industrial
sector, it wills he destroyed.

Loan facility provided by bank works as an income to the producer to increase

production. Banks provide transfer of payment facility, which is cheaper, quicker and
safe. Many difficulties in the international payment have been overcome and volume
of transactions has been increased. These facilities are very much helpful for the
development of trade and commerce.

TYPES OF BANK:

Following is the list of various types of banks:

 Central Bank

 Commercial Bank

 Exchange Bank

 Industrial Bank

 Agricultural Bank

1. COMMERCIAL BANK

The banks in any country speeded over with an objective to get the excessive money
from the public in the form of deposits and providing finance to the investors. These
banks are in the ground for profit earning motive and in competition with each other.

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INTERNSHIP REPORT

These banks are providing the basic services to the customers in the form of deposits,
advances, remittances and others.

Commercial Banking Scenario In Pakistan:

At the time of Independence in 1947, there were 38 scheduled banks with 195 officers
in Pakistan. But by December 31st 1973, there were 14 scheduled Pakistan
Commercial Banks with 3233 Branches in Pakistan and 74 Branches in the Foreign
Countries. Nationalization of banks was done on 1st January 1974 under the
Nationalization AC 1947 due to certain objects. But it had negative effects on the
efficiency of the banking sector. Afterwards, a Privatization Commission was set
upon January 22nd 1991. The Commission transferred many banks to the private
sector, i.e. Muslim Commercial Bank and Allied Bank Limited. The Govt. approved
and permitted the establishment of 10 new private banks in August 1991.

Functions Of Commercial Banks:

1. Borrowing of money from customers in shape of term deposits (PLS Saving

Current Deposits and Notice Deposits)

2. Lending of money to borrowers in shape of finances, short-term Finances and

long-term Finances under various names such as Demand Finance, Small
Finance Cash Finance

3. Agency Services

4. Remittance of money

5. Foreign exchange business, foreign currency deposits, LCS, Imports and

exports etc.

ROLE OF COMMERCIAL BANKS IN THE ECONOMICS DEVELOPMENT OF

A COUNTRY:

Banks plays an important role in the economic development of a country. If the

banking system is unorganized and inefficient, it creates market adjustments and
impediments in the process of development. In Pakistan, the banking system is
organized in well manner. The State Bank of Pakistan since July 1 st 1984 stands at the
apex and is responsible of the operation of the banking system. The other bands,
which form the banking structure in Pakistan are playing role in the economic
development of the country. The role of the commercial bank in the growth and
development of the economy on sound and steady footings is discussed briefly as
follows:

Mobilization of Resources:

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INTERNSHIP REPORT

The commercial banks are the most efficient organization of the economy in the
mobilization the resources and making a profitable pool of these resources. Taking the
money from the savers and lending it to the investors in the most prominent job of the
hank.

Financing Development Projects:

The banks and other financial institutions advance loans for the development projects
that enhance the pace of overall development of the country. These advances are
made in both public and private sectors for the purpose of achieving a good and
strong economic field to carry on the other activities of trade and business.

Creating Climate For Capital Formation:

Capital formation is done by the act of accepting people’s money and putting into
profitable ventures. This money so accumulated, make possible the availability of the
needed capital by the investors. The investors on the other hand are able to get the
needed funds that shortfall their requirements.

Planned Development:

With the help of well-organized banking sector the government is able to make good
implementations of its economic planning and can execute developmental activities
for the welfare of the society.

Promotion of Saving Habit:

There are persons who have money but can’t put them in profitable use. The banks
attract these persons by offering a variety of accounts. They provide them not only the
safety of the funds but also higher returns on them. The banks, in this way, promote
the habit of saving among the people.

Effective Implementation of Monetary Policy:

With the help of a good banking system in the country the government and the central
banks regulate the monetary supply and demand of the money. A good system helps
in the implementation of the policies that are formulated by the government. Through
these banks using different techniques of credit control makes credit expansion and
contraction.

Narrowing Regional Disparity:

The banks help in bridging the country. The surplus fund of on Region is sent to the
centers of deficit. The less developed areas acquire funds, put them into productive
channel and increase production. The banks help in a balanced growth the economy.
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INTERNSHIP REPORT

EXECUTIVE SUMMARY

This report is about my internship report with MCB Bank Limited. In this
comprehensive report, I have discussed about every major aspect of the bank, which I
observed and provided during my internship program.

In this report you will find the detail about the bank right from its incorporation to the
current position. Along with it, the processes, policies and procedures of the bank are
also discussed in detail.

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INTERNSHIP REPORT

During my internship program, I mainly worked in Retail Banking, General Banking

& Finance. All the departments have been discussed in detail and all the policies and
procedures have been described thoroughly.

As the main purpose of internship is to learn by working in practical environment and

to apply the knowledge acquired during the studies in a real world scenario in order to
tackle the problems using the knowledge and skill learned during the academic
process, in this report the detailed analysis of the organization has been done and all
the financial, technical, managerial and strategic aspects have been evaluated to
analyze the current position of the organization. This internship report covers many
important aspects which are basically related with the operations and financial aspects
of the bank.

In the end the learning and experiences section consists of all the policies, processes,
practices and procedures which I have undergone through and learned during my
internship program.

This report also contains my perceptions about the employees’ satisfaction,

motivation level and working environment of the organization.

HISTORY OF MUSLIM COMMERCIAL BANK

The Muslim Commercial Bank Limited was incorporated on 9 th 1947 in Calcutta in

Bengal. After partition, the Registered Office of the bank was shifted to Dhaka where
it commenced business from August 1948. The Bank transferred its registered/Head
office from Dhaka to Karachi in 1956. In 1999, its registered/Head office was
transferred to Islamabad and Karachi office was named as principal office. The
government transferred a 26% management stake to a group of leading industrialists,
collectively named National Group of which Mian Muhammad Mansha is the Major
stakeholder. In 1992 a further 24% was sold to the National Group. The current

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shareholding structure is 50% National Group, 25%government and 25% floated on

bourses.

NATIONALIZATION OF MCB

Muslim Commercial Bank Limited was nationalized by the Government of Pakistan

in January 1974 under the Banks Nationalization Act, 1974. Subsequent to
nationalization the operations of premium Bank Limited were merged with the
Muslim Commercial Bank Limited in June 1974.

PRIVATIZATION OF MCB

The previous Government declared the privatization policy as one of its main
objectives and in accordance with its policy, the Government offered Muslim
Commercial Bank Ltd. for privatization. The Bank was the first public sector bank,
which was privatizes on April 2nd 1991. The Government of Pakistan transferred
management of the bank to Private Industrialists and Entrepreneurs, “National Group”
by selling 26% shares of the Bank at Rs. 56 per share.

Muhammad Asim & Sumaira Begum Present Status

Over the years Muslims Commercial Bank fostered strong bonds with its customers.
MCB understands them; their needs. They feel comfortable with MCB; is their bank,
it responds to them, listens to them, partners with them, grows with them. That’s why;
it is one of the leading bank of the country, providing a wide range of modern banking
services. At present, the banking network consists of over 1000 branches along with –
controlling offices known as Area Head Offices and Regional Head Offices. These
controlling offices are responsible for the smooth operation of the bank on National &
International level. The entire financial and operation objectives are achieved with the
Human Resources strength over 12000 employees. The bank is known as the major
credit provider, best place of working and paymaster in the financial (money market)
of the country. Over the past few years, MCB’s profits have been hit by the need to
increase provisions coverage and restructuring costs associated with the downsizing
of the workforce and branch network, whilst there is some need to boost provision,
these changes (necessary to bring the bank back into shape) are largely over. It has
also slowly received permission from the SBP to shut down the number of
unprofitable branches. In 1999 EURO MONEY recognized MCB as the best domestic
bank in Pakistan.

State Bank of Pakistan continued the process of Banking Reform, which include
strength of Prudential Regulations and focus on recovery of defaulted loans. In 1999
return on Government Savings Scheme and Treasury Bills was reduced, which led to
a lowering of lending rates, resulting in erosion of margins for banks but it is likely to
give a boost to economic activity.

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INTERNSHIP REPORT

MCB Rupee travelers Cheques continued to maintain their leadership position in the
industry and sales registered a 45% growth over last year. MCB successfully
introduced the Rs. 100000 denomination cheque countrywide and introduced RTC
dialup tele-verification facility from Lahore city as well.

Mainly there are three types of Banking in MCB. These are:

VISION & MISSION STATEMENT OF MCB

VISION STATEMENT:

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

MISSION STATEMENT:

We are a team of committed professionals, providing innovative and efficient

financial solutions to create and nurture long-term relationships with our customers.
In doing so, we ensure that our shareholders can invest in us with confidence.

OUR VALUES:

These are the standards and principles which determine our behavior and how we
interact with our customers and each other.

1. Integrity:

We are the trustees of public funds and serve our community with integrity.
We believe in being the best at always doing the right thing. We deliver on our
responsibilities and commitments to our customers as well as our colleagues.

2. Respect:

We respect our customer’s values, beliefs, culture and history. We value the
equality of gender and diversity of experience and education that our
employees bring with them. We create an environment where each individual
is enabled to succeed.

3. Excellence:

We take personal responsibility for our role and leaders in the pursuit of
excellence. We are a performance driven, result oriented organization where
merit is the only criterion for reward.

4. Customer Centricity:

Our customers are at the heart of everything we do. We thrive on the challenge
of understanding their needs and aspirations, both realized and unrealized. We

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make every effort to exceed customer expectations through superior services

and solutions.

5. Innovation:

We encourage and reward people who challenge the status quo and think
beyond the boundaries of the conventional. Our teams work together for the
smooth and efficient implementation of ideas and initiatives.

COMMERCIAL BANKING

The Commercial Banking Group of MCB continues to services the trading

community and middle market, which sustained focus on developing new customer
relationships and increasing the asset portfolio.

CONSUMER BANKING

The Consumer Banking Group focuses on the lower end of the market and micro
credit individual customer needs are being serviced through the introduction of
diverse lifestyle consumer loans and introduction of new products and partnerships
with service providers. Customers will continue to use the extensive branch network,
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which in turn will generate deposits to feed the asset development and liquidity
requirements of the Bank through its diversified and stable deposit base.

ATM TECHNOLOGY

At MCB, technology has a direct relationship with the needs of the customers. It is a
mean of creating value and convenience for the customers. Over the last few years
MCB has invested heavily into strengthening its technology backbone. Today, it is
leading the way in banking technology and setting new standards for the banking
industry, penetrating into the local market, listening to the needs of the people.
MCB’s strength lies in providing technological base at a grass root levels of the
society with a challenge to educate and assimilate such systems across vast cultural
and economic backgrounds. With over 768 automated branches, 243 online branches,
over 151 MCB’s 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.

Additionally in order to enhance the utility of the ATM services, they successfully
linked their ATM network to the MasterCard, Circus and Maestro, effectively
becoming part of the largest ATM network in the world. MasterCard, Circus/Maestro
users can now access their ATM’s network. Together with the above MCB made a
strategic decision to establish an ATM switch and open their ATM network to other
banks. The ATM switch has been named MNET. It has following banks in MNET
switch:

Standard Chartered

Citi Bank

MCB ATM SERVICES

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 is part of
MCB’s continuing efforts to provide you with convenience that suits your
requirements most and now the MCB ATM have gone global. MCB’s affiliation with
Master Card International brings about added facilities for the MCB traveler abroad
with the Cirrus and Maestro networks.

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So go ahead! Use your MCB ATM 24-Hour Cash Credit day or night, at home or
abroad.

MCB ATM Regular Card

The MCB ATM Regular Card allows withdrawal of up to Rs. 10000 per day and a
maximum of 3 withdrawals per day per card.

BRANCHES & ATM

MNET:

MNET enables all the member banks to share their electronic networks. Which means
customers of member banks can use MNET as well as 1-Link ATMs Nationwide.
MNET member banks ATM machines accepts cards issued by MCB Bank Ltd.
Citibank, Standard Chartered, HSBC, Saudi Pak Bank Ltd. Habib Metropolitan Bank,
JS Bank, Deutsche Bank, SME Bank, Arif Habib Rupali Bank and First Women
Bank. MNET customers can use over 600000 ATMs worldwide that carry the logo
and shop at over 5 Million outlets that carry the logo.

M-Net switch has currently 612 ATMs in 50 cities. We plan to have the network grow
in faster pace in future as MCB itself will be adding more ATMs by the end of the
year. The ATM development has been planned in such a manner that a customer will
be only a few minutes away from an ATM in major cities. This coupled with
geographic coverage provides the largest convenient spare in the country, because of
which we are very strongly concentrating on Device Coverage & Convenience.

M-Net Switch ATMs are present in all the major cities of the country. They are
available in the hilliest and northern areas of the country such as Murree, Abbottabad
and Swat etc. thus providing convenience of accessing 24 hours cash to the across the
country.

M-Net Switch also has its Service Centers in the main cities of the country providing
support to member banks customers. M-Net Switch ATMs are also present in all 3
main Airports of Pakistan i.e., Jinnah Terminal (Karachi), Allama Iqbal International
Airport (Lahore) & Islamabad International Airport.

NEW PRODUCTS AND SERVICES SINCE PRIVITIZATION

In order to achieve long term goals of expansion and penetration in the market. Bank
introduced various new products for its customers, which cater to the needs of various
segments of the society. In order to do so, a constant process of market research,
evaluation and development of New products was started which resulted in
introduction of various new products which were earlier not introduced by any other

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bank in the country. Introduction of these products was indeed a major source of
penetration for the bank and turned out to be a differential factor as compared to other
banks:

Prime Currency Accounts: For foreign currency deposits, (since 1991)

Mahana Khushali Scheme: A monthly income plan through deposit of a fixed sum
in the account, (since 1991)

Hajj Mubarik Scheme: For intending Pilgrims, (since 1991)

Capital Growth Certificates: It doubles the deposit of depositors in 5 years. It offers

high rate of return and was introduced for fetching long term deposit, (since 1991)

PLS 365 Saving Accounts: Introduced high earning product with feature of
calculation of profit on daily product basis. No restriction on deposit withdrawals and
Minimum deposit of Rs. 300000/- (since 1991)

Fund Management Scheme: To generate funds to develop secondary market for

Government Securities (from 1991 to 1992)

MCB Khushali Bachat Accounts: Saving accounts with added value to customers
due to profit application of daily product basis.

MCB Dollar Khushali Accounts: For foreign currency deposits, (launched in 1993)

FAXPRESS: A fast intra-city Remittance Service, (since 1991)

MCB Rupee Travelers Cheques: The main popular product of MCB, introduced
Rupee Traveler Cheque for the very first time in the country and it immediately
fetched high share of the market and MCB share is still growing (launched in 1993)

Consultancy Services: For intending buyers of state-owned enterprises being

privatized, (since 1991)

Self Financing Scheme: Mark-up free finance from 5000 to 25000 (since 1991)

Night Banking Services: (since 1991)

Utility Bills Collection Centers: Separate utility bills collection centers were
established for collection of utility bills (since 1994)

MCB MasterCard: (since 1994)

EXPORTMOR: Financing facility for exporter (since 1994)

REMITEXPRESS: A first remittance service between Pakistan and Middle East

(since 1994)

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Personal Banking Services: In order to promote Consumer Banking system in the

country a proper Personal Banking service was started for High Net worth client of
Bank in selected branches (since 1995)

MCB Custodian Services: Launched for local and international capital market
clients.

Online: The largest network of branches in the country and growing, providing
customers with 24x7 real time online facilities.

MCB Call Center: Call now for answers to your queries-banking services, ATM
services, mobile banking services, RTC services, telebanking services and MCB
product information. 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 term is available 24x7, 365 days a year to
ensure that your daily financial obligations are taken care of guaranteeing you a good
night’s sleep.

Cash Plus: Cash management services for corporate customers help customers
substantially reduce their receivable collection time frame, improve cash flowand
business management.

Islamic Banking Services: Through exclusive units/branches offering a range of

liability and asset based sharia compliant products like musharika, murabaha, ijara
and istasana.

MCB MOBILE BANKING

Banking at your finger tips. Dial in anytime to get information regarding balance and
mini statements.

At the forefront of technological excellence, MCB proudly introduces MCB MOBILE

BANKING. The convenience of accessing your account balance information and mini
statement whenever you want or wherever you may need them, with comfort and
peace of mind.

MCB Mobile Banking service is available to all MCB ATM cardholders, 24 hours –
365 days.

Just call our Help Line on 111-000- MCB (622) or any MCB online branch for
assistance.

Mobile Banking at a Glance

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MCB Mobile Banking gives you easy and quick access to your account(s) at a time
you fine convenient, including all holidays.

Banking at your Fingertips

With MCB Mobile Banking you can:

Check your balance

View the last 4 transaction of your MCB account(s)

A free Service

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.

MCB Lockers

The best protection for your valuables. Lockers of different capacities are available
nationwide.

Pyara Ghar

Flexible and competitive home financing facility with option of home purchase,
construction and renovation.

MCB Car Cash

Car financing and leasing at competitive rates with flexible option.

Largest ATM Network of 100 ATMs connected to worldwide ATM network of

about 350000 ATMs along with Cirrus and Maestro facility enabling MCB ATM
Card to be used all over the world & anywhere in the country.

CUSTOMER SATISFACTION

For any organization to succeed, it is extremely vital to ensure Customer Satisfaction

Banks being in service sector, it is highly important that high service standards be
maintained and real value to their money is provided to its customers. In order to do
so MCB took three revolutionary steps:

Provision of comparatively better service to its customers as compared to other banks

through value added features of low cost, quick disposal of work and friendly
environment, Modernization, Computerization of most of the branches enabled Bank
stay abreast with the technology and provision of better service at the root level to its
customers.

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Bank also started an ongoing process of Branch face lifting creating a better congenial
environment for its customers. In order to be more customers’ conscious, MCB
started a very effective and timely action system on Customer Complaints

DEPARTMENTS IN MCB

Brief functions and responsibilities of departments at MCB are as follows:

Human Resources and Legal Group:

 Recruitment

 Training

 Transfer and Posting

 Promotions

 Disputes

 Staff Loans

Banks Operations Group:

 Policy

 Premises

 Capital and Operating Expenses Processing

 Return and Consolidation

 Reconciliation

 Product Sales

 Relationship Co-Ordination

 Service Standards

 Customer Complaints

Financial Institution and Overseas Groups:

 Inter-Bank Exposure

 Forex Licensing

Financial Control and Audit Group:

 Audit and Internal Control

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 Budgeting and Planning

 Monitoring of Expenses

 Financial Reports

Credit and Risk Management Group:

 Credit proposal evaluation & analysis

 Project financing

 Monitoring of credit portfolio of bank

Corporate banking group:

 Placement of all multi-national and public sector companies

Consumer Banking Group:

 Penetration in high net-worth customers

 Earning increase

 Customer retention

Commercial Banking Group:

 Conduction of normal retail operations

Treasury & FX Group:

 Funds management

 Investment management

Assets Management Group/ Fraud Control Group:

 Classified portfolio looks after

 Special assets management

 Restructuring / Rescheduling

 Out of court settlements

Information Technology Group:

 ATM / CIRRUS facilities

 I.T. related franchise management

 SWIFT system
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 On-line branches network look after

 Hardware / software support

President

(M. Aftab Manzoor)

Human Resource Group Corporate Banking Group

Legal Group Corporate Corporate Corporate

South Central North
Raheel
Bank Operation Group Ijaz (GM)

Hamid Yasin Bashir Khan

Financial Institution MCB’S
Group MANAGEMENT (AVP- Admn.)
HIERARCHY
(AVP-Credit)

Financial Control & Audit Group

Mall Branch Blue Area G-8/4 Branch

Credit & Risk Management Group Branch Nadeem
RWP (CM) ISB (CM)
Elahi (CM)

Consumer Banking Group

Operations Credit
Treasury & FX Group Foreign
Hameed
Raja Khaliq Exchange Abdul
Durrani
(AVP) Majeed (OG-2)
Asset Management / Fraud (AVP)
Control Group

Information Technology Group

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Commercial Banking North

Commercial Banking South

INTERNSHIP REPORT

BUSINESS OF MCB

MCB is in it’s over 50 years of operation. It has network of over 1100 branches all
over the country with business establishments in Bangladesh, Sri Lanka and Bahrain.
The branch break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) and
Baluchistan (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 the consumer banking of MCB provides
customers with innovative saving schemes, products and services. The ATM network
of MCB is the largest in Pakistan and the Pak Rupee Travelers Cheques and market
leaders.MCB was the first to introduce the photo card with the launch of the
MasterCard.

The corporate Banking of MCB ensures assistance from a dedicated team of

professional financial advisors for underwriting, project finance or corporate advisory
services.

When it comes to banking practices, the consumer can depend on MCB, because it
had been around for over 50 years.

The State Bank of Pakistan has restricted the number of branches that can be opened
by foreign banks, and advantage that MCB capitalizes because of its extensive branch
network.

Eighty 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 further growth. The
bank has restructured its asset portfolio and rationalized the cost structured in order to
remain a low cost producer.

MCB now focuses on three core businesses namely Corporate, Commercial and
Consumer Banking. Corporate clientele includes public sector companies as well as
large local and multi-national concerns. MCB is also creating 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 9 cities with
around 100 ATM locations. The Bank’s Rupee Traveler Cheques have been market
leaders for the past six years.

MCB looks with confidence at year 2002 and beyond, making strides towards
fulfillment of its mission, “to become the preferred provider of quality financial
services in the country with profitability and responsibility and to be the best place to
work.”

CORPORATE BANKING

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MCB’s Corporate Banking Team consists of dedicated professionals with the

requisite expertise to take care of the banking needs. The Corporate Bank with 20
branches has its presence in all major cities of Pakistan. The Area Offices are located
in Karachi, Lahore and Islamabad.

Corporate Platforms have been established in the three principal cities where terms of
dedicated Relationship Managers have been posted. These Relationship Managers
have been entrusted with the complete responsibility for managing the risk of their
allocated portfolios, acting as allusion between the customer and the bank, and
providing you with the entire range of products/services offered by the bank.

The products/services of the Corporate Bank are broadly divided into the following
categories:

Working Capital Loans:

The working capital loan includes Running Finance, Cash Finance, Export Refinance,
Pre-shipment and Post-shipment etc.

Term Loans:

Offer Short to Medium Term Finance to meet capital expenditure of the customer
business needs.

Trade Finance Services:

Trade Finances 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.

Cash Management:

The network of about 1100 branches in Pakistan enables the bankers to collect and
disburse payments efficiently with the MCB cash management services. This also
enables the Bankers to offer customer’s choice of paper based or electronic fund
transfer solutions including collection amounts rose branch on-line transactions etc.

INVESTMENT BANKING

The Investment Banking Team of MCB has emerged as a leader player in Pakistan’s
investment banking arena. The Team handles advisory, corporate finance and capital
markets related transactions. Within these areas, the investment banking team of the
MCB has developed expertise in the following areas of the investment:

 Private Placements

 Debt/Equity Underwriting
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 Team Finance Certificate

 Loan Syndication

 Arrangement of Non-Fund Facilities

 Mergers and Acquisitions

Financial Highlights

The result for the year 2001 are reflective of sustaining all-around efforts over the few
years, to maintain profitable growth along with prudent and proactive risk
management and expansion of product range of customer.
Pre-profit for the year 2001 was Rs. 2.10 Billion as against Rs. 1.32 Billion in 2000-a
healthy increase of 59%.
Growth in profitability is primarily due to fund-based activities through efficient
assets and liability management. Fee based income was lower despite increase in
volumes due to competitive pricing and discontinuation of charges on PLS accounts.
Administrative expenses grew by 3% generally attributed to absorb effect of inflation
and enhancement in Govt. levies. Pragmatic efforts are, however, under way to
manage costs in relation to revenues to further improve the revenue/expenses ration.
Higher level of provisions was in the line with the Bank’s policy to upfront recognize
problem lending.
In 2001, the Bank managed to recover Rs. 2.19 Billion as against Rs. 1.97 Billion in
2000.
The balance sheet footings have increase to Rs. 187 billion from Rs. 175 billion
primarily based on deposit growth. Deposits have registered a substantial increase of
14% and stand at Rs. 154.5 billion in 2001 as against Rs. 136 billion in 2000. Despite
of low PLS deposit rates, branch network has shown a commendable performance by
increasing and managing the deposit mix. This has been possible by improvement in
customer services and targeted sales of products like ATM cards.

Net advances as at December 31, 2001 stood at Rs. 76.6 billion, a reduction of Rs. 9.8
billion, a reduction of Rs. 9.8 billion. Demand for credit from manufacturing and
export clients fell considerable, post September 11, 2001, which led to a reduction in
advances as on the balance sheet date from a higher level during the year.

MAIN CATEGORIES OF ACCOUNT OPENING FORM

There is a category of “Type of Account”, the customer can check any option to open
certain account.
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Following are certain kinds of account:

 Current

 PLS-Saving

 MCB Saving-365

 Khushali Bachat

 PLS Term Deposit

 New Foreign Currency Account (Current/Saving)

TYPES OF ACCOUNTS

CURRENT ACCOUNT:

The current account is the most common account and the most preferred amongst
business concerns. The theoretical explanation for this would be that they can
function more efficiently but since in reality there are no restrictions on any with
drawl the only reason we could think of is that current account facilities online
banking which saves time (which in this ultra competitive business world the most
precious resource) to a considerable extent. In case of a current account the client
does not earn any interest. Current account enables the client to do cash transactions
in a more efficient manner.

Features:

A sum of Rs. 10,000/- in cash as initial deposit is required for opening a current
account and the same may be maintained as minimum average running credit balance.
No profit is paid on credit balances held in current accounts. The bank reserves the
right to allow opening of current a/c at its description. All deposits and withdrawal
from a current a/c cannot be overdrawn, except by prior agreed agreements with the
bank. The correspondence related to Current A/Cs should be addressed to manager of
the branch where the account is being maintained.

The account holder can draw sums from his account by means of cheque supplied to
him by the bank for that particular account. Account holder should take well care of
the cheque book issued to them.

SAVING ACCOUNT:

Individuals who wish to earn profit/interest on their investment normally maintain the
profit and loss sharing account but in order to earn interest the client is required to
keep his / her deposits with the bank for some time. In theory, there are some
restrictions on withdrawal of money from a Profit and Loss Sharing Account. But in
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general banking practice there is no restriction on any withdrawal from a Profit and
Loss Sharing Account. The interest/profit is paid half yearly.

Profit and Loss Sharing Account:

PLS saving account having a running minimum credit balance of Rs. 10000. The bank
would be within its rights to make investment of credit balances in the PLS saving
accounts in any manner at its sole discretion and to make use of the fund to the best of
its judgment in the banking business under the PLS system.

Profit/Loss:

The profit/loss will be Credited / Debited on the basis of its net working results at the
end of each half year. Calculation of products on PLS Saving A/C will be made for
each calendar month on the lowest credit balance of an account between the close of
business on the 6th day and the last day of the month.

Rules for PLS:

 Account holder can only withdraw sums from his account by means of
cheques supplied to him by the bank for that particular account.

 Post dated and stale cheques will not be paid.

 The bank reserve to itself the rights to close any account without previous
notice any account which has not satisfactory account credit balance.

 If the account holder withdraws the money under 7 days notice, the profit &
loss earning products will be computed on the minimum balance. Zakat is
deducted every year on non-exempted account.

Saving 365 Gold:

This account is newly developed of MCB and it provides flexibility of saving account
to business people. Profit on deposits will be payable on daily product basis on
balance of Rs. 500,000/- and above. However, if balance in the account falls below
Rs. 500,000/- on any day, the product will be ignored. There will be no restrictions on
withdrawal from the account. Zakat and withholding Tax is also applicable on the
account t opened under this scheme.

 Minimum balance is Rs. 500,000/-

 Below minimum balance, profit calculation ignored

 Profit calculated on daily basis

 Profit paid on annually basis

 Zakat deducted on 2.5%

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 The higher the balance, higher the rate is offered

TERM DEPOSITS:

Term deposits are fixation of certain amount of money for a specific span of time. The
instrument term deposit is like a slip containing bank name, account number to
operate on computer, deal number, customer name, reference, date of issue, amount,
rate on maturity date etc

CURRENCY

There is a category of “Currency” in the form:

In this section there are four kinds of currencies are given in which MCB opens
account. They are:

 Pakistani Rupee

 US dollar

TYPES OF CUSTOMERS

INDIVIDUAL ACCOUNT:

Only one person can operate this account. We can call it a personnel or individual
account.

Following are required to open it.

 Signature of customer on back of AOF

 CNIC photocopy attached

 Mention next of kin (nominee)

JOINT ACCOUNT:

In case of joint account, applicant mentions that how much person will operate the
A/C. Instructions is given for joint A/C such that the account shall be operated by:

Any one of us or survivor

In first case if one of the account holders died then the other can operate the account
individually.

Any two / all of us jointly

In second case if one of the account holders died then the other partner can’t operate
this account individually without having permission from the court.
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REQUIREMENTS:

 Sign of both customers on the back of AOF

 Sign on joint account mandate

 Name and A/C number of introducer

 CNIC copies of both members

 Mode of operation

PARTNERSHIP ACCOUNT:

For partnership A/C, along with the application from signature card. Other documents
are also needed such as:

 Partnership deed certified copy

 CNIC photocopies of all partners

 Partnership mandate for account signed by all the partners

 A letter duly signed by all the partners containing the operating instructions of
the account also has to be taken

 In case of addition or withdrawal of any partner a new agreement will be

required

COMPANY ACCOUNT:

For Company Accounts following documents are required:

 Copy of certificate of incorporation

 Memorandum of Association

 List of Directors

 Copy of board resolution

 Certificate of Commencement of Business

 Copies of CNIC of Directors

 Company’s Balance Sheet

LETTER OF THANKS:

Bank prepares “Letter of Thanks” for the new customer. This act promotes goodwill
among the customer.

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PAY-IN-SLIP:

This slip is used for depositing the additional amount. The bank will accept the
Pakistani’s notes. All cheques and other instruments should be crossed before they are
deposited for credit into the account. There shall be no restriction on number of
withdrawals in current account. An account holder wishes to close his account must
surrender the unused cheques to the bank. The current account is computerized, thus it
generate the statement of account for all account holders periodically. Incidental
charges of Rs. 50 are beard by the account holder if its credit balance is less than Rs.
10000/-

CLOSING OF AN ACCOUNT:

There are number of reasons of closing an account. Some are listed below:

 If customer desires to close his account

 In case of death of one account holder

 Bankruptcy of the account holder

 If an account contain nil balance or not up to the requirement of rules

Before close any account, bank send letter to the account holder for informing him
that his account is going to be closed. There is need an approval from higher authority
to close any account.

PAYMENT OF CHEQUES:

The cheques that are presented for either payment or for deposit are the main points
where most of the frauds occur. There are few points to be noted while scrutinizing a
cheque for payment or deposit:

 Date of the cheque

 Signature of drawer

 Signature of presenter

 Amount in figures and words

 Branch stamp

 Account number of the drawer

 Crossing in favor of any other person

The cheques which are presented for deposit in accounts of customers for them a pay-
in-slip is to be filled in and the cheques is presented along with that slip. As the
cheques are taken for deposit in customer’s account, a cheque receipt summary is
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prepared in which cheques are entered according to their category, i.e. Transfer
delivery, clearance or collection.

Call deposit receipts are also issued to the customers especially before the holy month
of “Ramadan”. The reason is that customers convert their savings from saving
account to the PLS account. The reason for this activity is that the customers want to
take out there money from the accounts in order to skip the deduction of Zakat. For
this purpose, CDR’s were issued having both applicant and beneficiary the same
person.

CDRs are issued to the contractors favoring building departments in order to get
tenders for various buildings.

Before opening an account a banker should ascertain whether or not the person
desirous of opening the account is a desirable customer. There is Reference Section in
the form in which the person who wants to open an account must provide a reference
of a person who has already an account with MCB. For current account only reference
of a current account holder is accepted whereas for saving account reference of any
whether current or saving is allowed. Preliminary investigation is necessary because
of following reasons:

 To avoid frauds

 Safeguard against unintended overdrafts

 To avoid negligence

 To replay inquiries against clients

 To comply with Prudential Regulations/Laws

There is a specimen signature card with the bank on which the signature of account
holder is to be taken while opening his account. And then he is issued with a cheque
book. It is advised that one must keep his cheque book under proper care but there are
cases that people sometimes lost their cheque books. In that case there is an
application form in the name of manager is available and the customer who wants to
get a new cheque book fills that form and gives it to the manager then he is provided
with a new cheque book. In other case a requisition slip is present in the cheque book
and whenever the customer wants a new cheque book he simply fills that requisition
slip and presents it to manager and gets a new cheque book.

KNOW YOUR CUSTOMER (KYC)

In view of recent heightened global efforts to prevent the possible use of the banking
sector for money laundering, terrorist financing, transfer of illegal/ill-gotten monies
and as a conduit for while collar crime etc. the importance of “Know Your Customer”
has increased. The objective of knowing a customer is to have a fair idea about the
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identity, financial resources and general information about the customer at the time
when the relationship is established. A banker must have following information about
the customer.

Customer’s Name:

Enter complete name as mentioned in Original Identity Card/other business

documents.

Nature of Business/Profession:

If the customer is of salaried class then banker will enter his employer's name. If the
customer is a businessman, trader, sole proprietor, then the banker will enter the
business name. Also enter the customer’s title/position and address of the
employer/business. Addresses with P.O. Box are not acceptable. Similarly remarks
like “Private Service”. “Business” are not acceptable, rather specify what type of
company/business the customer is associated with.

In case of individual his attested Photocopy of national identity card or passport is

required, in case of salaried person, attested photocopy of his service card. In case of
partnership attested photocopy of identity cards of all partners is required and attested
photo copy of “Partnership Deed” along with a copy of Registration certificate with
registrar of firm. In case of Company, Memorandum and Article of association,
certificate of incorporation, certificate of commencement of business and attested
photocopy of identity cards of all the directors is required.

Address:

Enter the complete residential/business address. Within the brackets you may also
provide prominent address identification marks for ease of physically locating the
address.

Contact Number:

Enter home, official, mobile, fax numbers and e-mail address (if available).

Special Instructions:

Clear-cut operational instructions must be obtained from the customers, if the

customer has not given any special instructions in specified column; the column must
be cancelled by drawing a line, as this column must not be left blank under any
circumstances.

The bankers considered the above mentioned points while opening the accounts:

REMITTANCES DEPARTMENT

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The next department I worked in is Remittances department. The in-charge of this

department, Ms Sana Irshad told me that there are four kinds of remittances they deal
in:

 Telegraphic Transfer

 Mail Transfer

 Demand Draft

 Pay Order

Another task of this department was to issue the traveler cheque and to give the ATM
card number.

Here is a little detail of all of these works:

TELEGRAPHIC TRANSFER (TT)

It is a facility provided by the bank through which a customer can send or transfer any
amount immediately. The procedure for the customer is simple. And more
importantly the person who wants to transfer the funds may not have the account in
the bank even application form named as “Application For Remittance” in which he
mentions the bank to which he wants to transfer the funds also the name of the payee,
his account number, also he has to mention his own address etc. then there are charges
for this special facility provided by the bank and the bank receives these from the
person who is sending the funds.

Furthermore there are two kinds of telegraphic transfers:

 Ordinary TT

 Simple TT

The Ordinary TT reaches to its destination after two days of its dispatch whereas
Simple TT reaches to its payee immediately because the payee branch is informed
immediately through telephone and fax.

Telephone Charges:

In the application form of TT there are two options available for the person who is
sending the funds i.e. whether the payees account is credited for the same amount or
payee is simply to receive the payment in hand.

Documents Prepared:

The documents that are prepared for the TT are:

 TT register

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 Remittances

 Confirmation of cable sent

And afterwards whole of these information are recorded in a big register named as:

Branch outward remittance register

And after this procedure the respective branch is informed through telephone.

Recommendations:

This whole procedure is quite lengthy and hectic. So the only recommendation that
could be given is, it must be computerized.

Another task of the accounts department is to give the customers the ATM card
number. The procedure is like this that when a customer applies for the ATM card, he
is given a certain time to collect the card. On due date the customer gets his card from
manager and for safety purpose the ATM number remains with the account
department and the customer gets his number from there.

Traveler Cheque:

In account department there are two people working. One’s job is to issue the traveler
cheque and the other is supposed to make the payment of TC. This work is separated
for the purpose of safety and to prevent the frauds.

When RTC is issued it is written in Traveler Cheque Register and when it is paid, it is
posted in MBIS. Traveler Cheque Register is used to maintain the stock of RTC’s.
when RTC is issued HO RTC department is credited and when RTC is purchased it is
debited. One of the person has the complete register of staff’s salary, he maintains a
Staff Salary Register.

The remittance facilities of the MCB are according to the need of the customer. Your
beneficiary will receive the amount even if he/she does not have an MCB account.
The Remit Express facilities the MCB can be avail in the following Bank/Companies:

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 MT 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

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 Beneficiary Branch Name & Code

 Number of MT

 Amount in words & figure

 Test key

DEMAND DRAFT (DD)

Demand Draft can be explained as the instrument which is payable on demand as its
name implies the same, the value of which has already been received. This instrument
is issued by one branch and payable at other branch of same bank or other bank’s
branch e.g. DD issued by MCB payable by ACBL.

Procedure of issuance:

The customer wants to make the DD (Demand Draft) fills in the same form or
application i.e. of the remittances in which he maintains the DD, the beneficiary’s
name, the place, the mode of payment, i.e. whether he wants the payee the receive the
cash, cheque or debit his account, signature and his name and address.

Check the application form.

Commission is charged as per bank policy. Also excise duty and with-holding tax are
recovered as per application rates.

Entry is then made in DD issued register. In the DD issued register, separate folio is
allotted for each drawee branch and a serial control number is applied.

The entries made in DD payable account is credited and cash id debited and when the
payee receives the cash against DD, DD payable account is debited and cash is
credited.

Procedure of Cancellation of DD

One receiving the application for cancellation in writing along with original DD the
signature of the applicant is verified. This signature should tally with the signature on
DD application form. Then cancellation is marked in DD Issued Register and the
drawee branch is informed about cancellation.

Issuance of Duplicate DD In Case of Lost/Stop payment:

Application is received and signature is verified, then the drawee branch is informed
about the loss of DD and further they are advised to tell the branch the status of DD
i.e. whether it has been paid or not. Then a duplicate of DD is issued with “Duplicate
in lieu of original DD No. ______ dated ______ reported lost” written on its face. The
duplicate DD will have the same control number.

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PAY ORDERS (PO)

Pay order is a kind of instrument issued and paid in the same branch. It is normally
issued for payment in the same city.

Procedure of Issuance of Pay Order:

The customer fills the remittances application form and mark check on pay order. On
receiving application, he is issued with a pay order after receiving charges. All pay
orders are crossed i.e. “Payees A/C Only”.

Procedure of Cancellation of Pay Order:

On receiving application for cancellation of pay order along with the pay order, it is
cancelled and cancellation charges are recovered.

Duplicate Pay Order:

If the payment of pay order has not yet been made, a duplicate copy of it can be made
on receiving application from the customer. The duplicate charges are recovered from
customer.

CLEARING DEPARTMENT

CLEARING:

Clearing implies a system by which banks exchange cheques and other negotiable
instruments drawn on each other within a specified area and there by secure payment
for their clients through the clearing house at specified time in an efficient way.

CLEARING HOUSE:

In past State Bank was indulged in clearing function i.e. for the settlement of mutual
obligation of different commercial banks. As all banks have their accounts and keep a
certain percentage of the cash deposits as a reserve with Central Bank, it becomes
easy to set up their mutual obligation by off-setting their accounts.

The claim of banks against each other is settled by simple transfers from and to their
accounts. These methods of settling accounts through the Central Bank, apart from
being convenient is economical as regards the use of cash since account are adjusted
through accounts, there is usually no need for cash.

At present, this function of State Bank is performed by NIFT. And now clearing
house is a place where NIFT’s representatives of all scheduled banks sit together and
interchange their claims against each other with the help of controlling staff of State

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Bank of Pakistan and where there is no branch of State Bank of Pakistan the
designated branch of National Bank of Pakistan acts as controlling member instead of
State Bank of Pakistan.

Reasons of Cancellation of Membership:

 When a bank is no longer a schedule bank.

 When any bank fails to meet its liabilities.

 When it is prohibited to receive fresh deposits by State Bank of Pakistan or

Central Government.

Advantages of Clearing:

 As clearing does not involve any cash etc. and all the transaction takes place
through book entries, the number of transactions can be unlimited.

 no cash is needed, as such the risk of robbery, embezzlements and pilferage

are totally eliminated.

 As major payments are made through clearing, the banks came manage cash
payments at the counters with a minimum amount of cash in values.

 A lot of time, cost and labor are saved. Since it provides an extra service to the
customers of banks without any service charges or costs, more and more
people are inclined and attracted towards banking.

Rules & Regulations of Clearing House:

Timing: Monday through Saturday

1st Clearing 10:00 A.M

2nd Clearing 2:30 P.M

 Cheques and other negotiable instruments are sent through NIFT’s

representative for exchange.

 All the cheques and other negotiable instruments must be properly stamped
and suitably discharged.

 Each and every cheque must be accompanied by an objection meno when

returned unpaid duly initialed.

 Each bank is required to maintain sufficient funds in the principal account

with SBP to meet the payment obligations.

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 The State Bank of Pakistan debits the account of each member of the clearing
house with the proportionate working expenses incurred on the operation of
clearing house. These expenses are very nominal.

Functioning of Clearing House:

All the scheduled banks which are the member of clearing house, must maintain
accounts with SBP, by debit and credit to which the clearing settlements are made. If
on a particular day, a bank delivers cheques and other negotiable instruments worth
more than the total amount of cheque received by it that banks account with State
Bank of Pakistan will be credited with the differential amount. If on the other hand the
total amount of cheque and other negotiable instruments drawn on a certain bank by
other banks is more than the total amount receivable by it from other banks, then this
bank’s account will be debited on that day.

The cheque delivered to the other banks through NIFT’s representatives for clearing
are called Outward Clearing. Whereas cheque received from the representatives of
other banks for payment are called Inward Clearing.

The SBP maintains two major books for clearing house purpose:

HOUSE REGISTER

This book contains the information about the amounts and number of cheques
received and delivered by each bank is noted down. Its column are just like our
clearing house page.

HOUSE BALANCE BOOK

This book contains the amount and number of cheques received and delivered by each
bank as well as the amounts which are to be received and paid to respective banks
through their accounts by SBP is written down. This book has the following columns:

initials To Pay No. of Cheques Name Received To Initials

Amount Received/Delivered of Amount Received
Bank Amount

Both sides of this book are balanced. Vouchers are prepared from the slips received
from the respective banks and the amounts are compared with this balance book.

Summary of Clearing House Working:

The working of clearing house may be summarized as under:

 The instruments are delivered to the respective banks.

 The instruments drawn on our Bank are received from other banks.
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 The amount and number of instruments received are entered in the House
Book from the main schedules of respective banks.

 The amount of instruments delivered, received and the difference is written on

a figure slip provided in the clearing house and the slip is returned to the
supervisor.

 The instruments are arranged branch-wise.

 Schedules are detached and kept safely.

OUTWARD CLEARING AT THE BRANCH:

The following points are to be taken into consideration with an instrument is accepted
at the counter to be presented in Outward Clearing.

 The name of the branch appears on its face where it is drawn on.

 It should not be stale or post dated or without date.

 Amount in words and figures does not differ.

 Signature of the drawer appears on the face of instrument.

 Instrument is not mutilated.

 There should be no material alteration if so, it should be properly

authenticated.

 If order instrument, suitably endorsed and the last endorsee’s account being
credited.

 Endorsement is in accordance with the crossings if any.

 The amount of the instrument is same as mentioned on the paying-in-slip and

counterfoil.

 The title of account on the paying-in-slip is that of payee or endorsee (with the
exception of bearer cheque).

If an instrument is in order then our bank’s special crossing stamp is affixed across
the face of the instrument. Clearing stamp is affixed on the face of the instrument,
paying-in-slip and counterfoil (The stamp is affixed in such a manner that half
appears on paying-in-slip and half on counterfoil). The instrument is suitably
discharged, where a bearer cheque does not require any discharge and also an
instrument in favor of a bank need not be discharged. The instrument along with
paying-in-slip is retained while the counterfoil is given to the customer duly signed.
Then he following steps is to be taken:

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 The particulars of the instruments and the paying-in-slips or credit vouchers

are entered in the Outward Clearing Register.

 Serial number is given to each voucher.

 The register is balanced; the credit vouchers are separated from the
instruments and are released to respective departments against
acknowledgement in the register.

 The instruments are arranged bank-wise.

 The schedules are prepared in triplicate, two copies of which are attached with
the relevant instruments and the third is kept as office copy.

 The house page is prepared from schedules in triplicate.

 The office in-charge with branch stamp signs the schedules and house pages.

 The grand total of the house page is taken and agreed with that of the outward
clearing register.

 The instruments along with duplicate schedules and house page are sent to the
Main Office.

 However the amount is kept in float till final status of various instruments is
known from respective paying banks in second dealing.

The entry of the instruments returned unpaid is made in Cheques Returned Register. If
the instrument isn’t to be presented again in clearing, then a covering memo is
prepared.

The covering memo along with returned instrument and objection memo is sent to the
customer who deposited the same in his account.

INWARD CLEARING OF THE BRANCH:

The particulars of the instruments are compared with the list.

 The instruments are detached and sorted out department-wise.

 The entry is made in the Inward Clearing Register (Serial Number,

Instrument Number, Account Number and amount of instrument is
written).

 The instruments are sent to the respective departments against

acknowledgement in the Inward Clearing Register.

 The instruments are scrutinized in each respect before honoring the same.

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OUTWARD CHEQUES RETURNED UNPAID:

These are the cheques returned unpaid by us presented to us in Inward Clearing due to
some objections.

INWARD CHEQUES RETURNED UNPAID:

These are the cheques returned unpaid to us, which were lodged by us in Outward
Clearing.

RETURNE OF CHEQUES AFTER CLEARING HOUSE:

Suppose all cheques received in the inward clearing are passed and later on it is found
that a cheque should have been returned. In such cases, we contact the collecting
branch and request them not to make payment against the proceeds of the cheque
which was not returned unpaid by us in due time. The cheque with objection memo
along with a covering letter is sent to the collecting branch, making request to issue a
payment order in our favor.

To balance the cash-cum-day book we may debit Suspense A/C Sundry Debtors with
the approval of the manager. When the payment order is received, it is lodged in
clearing and the Suspense A/C Sundry Debtor is adjusted accordingly.

SPECIAL CLEARING:

Addition to the normal clearing function at Clearing House it is mutually agreed to

hold and extra clearing at the Clearing House on a particular day and time, which is
known, as “Special Clearing”. It is arranged due to rush of work arising out of say,
more holidays declared by the Central Government at a time, but normally special
clearing is held on last working day of our half yearly and yearly closing, i.e. 30 th
December every year.

BILLS COLLECTION:

The bills collection is the key department in each and main branch. The objective of
this department is to receive the cheque of different bank of different area. Often is
cheque is drawnto the customer of another bank or account holder of MCB and
similarly the customer of another bank draw cheque to MCB account. In both cases
the cheque is cleared, endorsement conformed, or takes the disbursed guarantee. And
then deposit to the corresponding department or whatever the case may be.

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FINANCIAL STATEMENTS
SWOT ANALYSIS

STRENGTHS:
 MCB is Successive and Marketing Oriented.
 MCB investing huge sums on HR development and training.
 Customer default rate is lower as compared to other banks.
 MCB has the largest ATM network in the country.
 Meeting the chellenges of least Technology by introducing Smart Card Remit
Express, Mobile Banking etc.
 One of the major strengths of MCB is that it has very stable deposit base.
WEAKNESSES:
 Low motivational level, non-aggressive marketing.
 Employees’ dissatisfaction due to ill treatment and improper reward system.
 Favoritism and Nepotism in recruitment.
 Interest rate is very meager.
 Decision making process is very low.
OPPORTUNITIES:
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 Leasing sector is growing in Pakistan for the last two to three years which
provides opportunity to MCB to go ahead in this area as well.
 MCB is providing Consumer Finances at comparatively lower rates which
pave a way to grab more customers.
THREATS:
 Other private commercial bank with sound profitability is also a threat to
MCB e.g. UBL, Alfalah, HBL etc.
 For the last of many years, Pakistan is facing economic and political instability
which is a big threat.
WORK PERFORMED BY ME

I joined MCB Bank Ltd. (Service More Gujrat 1620) on 23 rd June 2017. First day, I
reached there at 8:30 A.M and reported to manager who introduced me about the
functioning of the branch and its staff. During these 6 weeks, I worked in different
sections of the branch to learn the maximum practices of banking system.

What Were My Duties And What I Learned:

 In first week I assisted to Miss Sana Irshad in Scrutiny of cheques. It is

considered as the simplest work in consumer banking operations, but actually
it is not that simple. The cheques that are presented for either payment or for
deposit are the main points where most of the frauds occur.

 I learned whole process of account opening of individuals practically. I

remained involved very much in practical activities of account opening as
Miss Sana whose duty was account opening would remain very busy as
number of customers coming for account opening and getting information was
high. So I assisted her.

 I have not issued any cheque book personally, but the procedure is very simple
for issuance. I observed the process.

 I filled many applications form for remittances. I prepared remittance slips and
learned to apply tests on TT and MT.

 I processed the in-ward cheques for collection and clearance, and have also
prepared vouchers.

 Every transaction which takes place recorded in the computer so all

transactions in different departments are forwarded to account department.

 The credit officer who explained me the procedure of advances. Mostly work
is done through computer. I observed how the application is processed.
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 In cash department I observed the process of deposits, filled deposit slips, and
learned how the cash registers are maintained and did a lot of deposit work.

 During my internship I dealt with many customers and employees, this was a
great experience to learn:

 How to deal with customers.

 How to work under pressure i.e. in rush hours.

 How to manage an office.

 My communication skills were improved.

 I observed the practical application of many accounting

concepts.

FINDINGS

Normally, which we study the performance of Muslim Commercial Bank it is

considered that on the whole bank is contributing a lot towards the industrial
department and capital formation in the country. As it is exhibited from the data
regarding the banks financial performance as shown in this report that the bank is
sharing major banking business of the country. Further the policies and schemes as
are introduced and carried on by the bank are of great source of help in industrial and
trading growth. All these things reflect the great and valuable efforts on the part of
executive command of the bank which is finally responsible for the productive
performance of the bank. But as it is said that nothing is perfect in this work. This
might stand true in the case of MCB Bank Ltd. also. So far, as my own observations
are concerned. I have concluded a major drawback in the inner current banking
system. In addition to that I have also learnt some disciplinary wrong practices on the
part of staff of the bank branches.

NO QUALITY IN ATTITUDE:

The attitude of the bankers with all of their customers is not the same. They pay more
attention and good service to some of the customers and neglect a major portion of
them. Some of the customers approach to the banks officials and get their work done
before others. It is not a good practice.

NO PROPER GUIDANCE:
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There are so many customers who don’t know how to fill cheque, pay-in-slip,
application form etc. they waste a lot of time of the bank staff.

RECMMENDATIOS & SUGGESTIONS

From the quantum of the profit and its financial data it can easily judged the after
privatization Muslim Commercial Bank is performing well. Its deposits are growing
day by day and so its profitability. The controlling body is responsible for the
productive performance of the bank.

Following are my observations and suggestions to improve the efficiency for the
development of the bank.

Increase In Profits:

People can be motivated to save money by offering the deposit through various
investment schemes. The rate of profit should increase 1% or 2%. It would be
profitable.

Increase Salaries:

MCB is making good profits but giving less pay to their employees as compared to
their competitors. So their salaries should be increased.

Training:

Every year some of the employees should be sent foe 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.

Over Employed:

During my internship period, I felt that at some place the Muslim Commercial Bank
Ltd. is over employed which is causing in expenditure. I think that the best way out
for this problem is to open new branches.

Proper Guidance:

Bank should adopt such an induction plan that when a customer opens his account
with the bank. He should be supplied with a booklet which enables him to know the

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procedure of filling the cheque, pay-in-slip etc. it will save a lot of time of the bank
staff afterward during the conduct of the account of the customer.

Division Of Work:

The billing system of MCB must be improved to facilitate the customers and workers.
The work should be divided among the staff e.g. collection of bills. Countering of
cash and then entry of these.

Internship Facilities:

The period of internship should be divided into the number of department of the MCB
Bank Ltd. the internee should be given timetable mentioning the number of days he
has to work at different places in the bank. On the first 4 days in each department
internee should be given a lecture the officer of the department concerned about
working of the department.

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