INTERNSHIP REPORT ON MCB BANK Limited

Internship Report submitted to the Faculty of Management & Administrative Sciences in Partial Fulfillment of the Requirements for the Degree of Bachelors of Business By: Administration.

Name of Student: saira Roll Number:

Date of Submission:15

september 2013

UNIVERSITY OF GUJRAT

Name of program coordinator----------------------------Signature of program coordinator--------------------------

University of Gujrat
(G.T Road SciencesCampus)

Faculty of Management and Administrative Sciences

Course Title: Internship (Report based on Internship) Course Code MGT-403

ACKNOWLEDGEMENT

All praises to almighty Allah and our holy prophet Muhammad PBUH who gave me the courage and patience for completion of this final report. I wish to acknowledge my gratitude to my inspiring Teachers for their endless their persistence, support and encouragement, and for providing me a lifetime opportunity to work with Muslim Commercial Bank I am also very thankful to Muslim Commercial Bank Ltd. Kot Farid Branch, Sahiwal and the Branch Manager Mr. Yasin Tahir who gave me opportunity to work with experienced persons in their organization. I am also thankful to my parents, family and friends that continually offered encouraging support

Sitara Muzzamil MBS-08-13

TABLE OF CONTENTS
PREFACE............................................................ Error! Bookmark not defined. ACKNOWLEDGEMENT......................................................................................3 TABLE OF CONTENTS .......................................................................................4 EXECUTIVE SUMMARY ....................................................................................6 INTRODUCTION OF SECTOR ............................ Error! Bookmark not defined. THE MUSLIM COMMERCIAL BANK LIMITED .................................................9 VISION STATEMENT ........................................................................................10 MISSION STATEMENT .....................................................................................10 HEAD OFFICE ....................................................................................................11 CIRCLE OFFICE .................................................................................................12 MANAGEMENT OF ORGANIZATION ...........................................................13 ORGANIZATIONAL STRUCTURE ..................................................................14 INFORMATION ABOUT BRANCH .................................................................18 GENERAL BANKING ........................................................................................19 DEPARTMENTS WHERE INTERNSHIP WAS CARRIED OUT ...................20 OPERATIONS DEPARTMENT .........................................................................20 CLEARING DEPARTMENT ..............................................................................27 REMITTANCE DEPARTMENT ........................................................................31 OTHER DEPARTMENTS...................................................................................35 CASH DEPARTMENT .......................................................................................35 ACCOUNTS DEPARTMENT.............................................................................37 TECHNOLOGY DEPARTMENT .......................................................................38 ADVANCES DEPARTMENT ............................................................................40 FINANCIAL ANALYSIS OF MCB....................................................................45 RATIO ANALYSIS .............................................................................................45

ADVANTAGES OF RATIO ANALYSIS: ............ Error! Bookmark not defined. LIQUIDITY RATIOS ............................................. Error! Bookmark not defined. DEBT RATIO ......................................................... Error! Bookmark not defined. MARKET RATIOS ................................................ Error! Bookmark not defined. VERTICAL ANALYSIS .................................... Error! Bookmark not defined. HORIZONTAL ANALYSIS .............................. Error! Bookmark not defined. SWOT ANALYSIS ..............................................................................................46 MCBs SWOT ANALYSIS .................................................................................47 STRENGTHS .......................................................................................................47 WEAKNESSES ....................................................................................................49 OPPORTUNITIES ...............................................................................................50 THREATS ............................................................................................................51 PEST ANALYSES ...............................................................................................53 APPLICATION OF CLASS ROOM LEARNING..............................................55 WHAT I HAVE LEARNT IN MCB....................................................................56 SUGGESTIONS & RECOMMENDATIONS .....................................................57 IF I WERE MANAGER AT MUSLIM COMMERCIAL BANK ......................59 REFERENCES & RESOURCES.........................................................................60

EXECUTIVE SUMMARY

The banking structure in Pakistan comprises of the following types, State Bank of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks, Specialized credit institutions. The state bank of Pakistan is the Central bank of the country and was established on July 01, 1948. The network of bank branches now covers a very large segment of national economy. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit. In 1956, MCB transferred its Registered office to Karachi, where the Head Office is presently located. In April 1991, MCB became Pakistans first privatized bank. The corporate branch at Shahrah-e-Faisal Karachi (SFK) branch is the corporate branch of MCB in Karachi. The bank is using SWIFT for transfer of information about imports and exports. MCB SFK branch has Currently Following three Departments General Banking

Department, Advances Department & Foreign Exchange Department. To open an account the customer has to meet the general banking manager with an introducer. The procedure begins with the punching of account opening form to the customer file i.e. customers master file. Before closing any account, bank send letter to the account holder for informing him that his account is going to be closed. There is need an approval form higher authority to close any account. Current deposits are those which are payable to bank whenever demanded by the customer. Bank does not pay any profit on current deposits. The following are the financial products/services of MCB Malay Mail Scheme, PLS Account, Saving 365 Account, Capital growth certificate scheme, Fund Management Scheme, Khushali Bachat Account, Term/ Fixed Deposits and others like night banking, credit cards, traveler cheques.

In remittance department like any other bank MCB also have instruments for transferring of money, Telegraphic Transfer, Mail Transfer. In cash department both deposits and withdrawals go side by side. This department works under the accounts department and deals with cash deposits and payments. This department maintains the following sheets, books, and ledger of account cash received voucher sheet, cash paid voucher sheet, Paying-in-slip, Cheque book, Cash balance book. The clearing in Karachi at MCB or other banks is being done through NIFT (National Institute of Facilitation Technology). Bank provides this facility to the people who need advance money to meet their requirement. Party dealing with other banks financial condition of borrower business and as a first step credit proposal is being made. MCB provides advances, which are two types. Secured Advances, Unsecured Advances. MCB usually classified advances in to following types Agricultural Advances, Commercial Advances

THE MUSLIM COMMERCIAL BANK LIMITED

HISTORY:
MCB was founded by ISFHANI and ADAMJEE families in Calcutta on July 9, 1947. MCB is not an overnight success story rather good track of services are responsible for the leaps and bounds progress. After the partition of the Indo-Pak Subcontinent, 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 52-year legacy of trust in its customers and the citizens of Pakistan The performance of MCB was badly affected by bureaucrat government. In January 1974, MCB was nationalized by Bhutto Government following the bank act 1974 subsequently in June 1974 Premier Bank Limited merged with MCB.

PRIVATIZATION:
When privatization policy was announced in 1990, MCB was the first to be privatized upon recommendations of World Bank and IMF. The reason for this choice was the better profitability condition of the organization and less risky credit portfolio which made'' it a good choice for investors. On April 8th, 1991, the management control was handed over to National Group (the highest bidders). Initially only 26% of shares were sold to private sector at Rs. 56 per share. MCB besides being money financial organization have rendered invaluable services in the economics and social developments of our country. MCB today, represents a bank that has grown with time, experience and Pakistan. A major financial institution, in scope and size, it symbolizes a fully-grown tree. Evergreen, Strong, and firmly rooted.

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 with confidence in us.

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DEVELOPMENTS:
After privatization, the growth in every department of the bank has been observed. Following are some key developments: Launching of different deposit schemes to increase saving level. Increased participation on foreign trade. Betterment of branches and staff service level. Introduction of Rupee Traveler Cheques & Photo Credit Card for the first time in Pakistan. Extended use of information technology which is evident from the fact that there are 768 fully automated branches, more than 250- online branches (integrated networking), 151 ATMS in 27 cities nation wide and a M.C.B continuously innovate new product.

HEAD OFFICE
Chudrigor Road of Karachi has same importance in Pakistans economy as of the Wall Street in world economy. The division working under MCB Head office is as follows: Administration Credit Management Investment Banking Human Resource Information Technology Corporate Planning & Budgeting

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Finance & Treasury International Division Inspection & Audit Law Division Marketing & Development Trustee Division

Under the President an Executive Committee and a Credit Committee works. All the matter of the bank join to the board of director are presented to the executive committee which is responsible for daily operation of the bank .The request for credit exceeding the General Manager power is approved by the Credit Committee. Under the area Executive is the General Manager who is the in charge of the Circle Office. Under the General Manager is the Zonal Manager and then the Branch Manager. At present, there are 9 circles, 47 regions and 1400+ branches. Before privatization there were provincial chiefs for all the four provinces. But this management now has abolished the provincial officers and improved the efficiency of the bank.

CIRCLE OFFICE
The working of circle office is to control and regulate the functions of branches which are under in its control. The functions of circle office are to mobilize the deposits and receive reports from branches. Circle office is like a mini head office. Agents and correspondents of MCB are in all commercial cities of the world. Circle office is divided in the following division: Credit Management Audit & Inspection Human Resource Marketing & Development

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MANAGEMENT OF ORGANIZATION

MANAGEMENT OF BANK:

Mian Mohammad Mansha S.M. Muneer Mohammad Aftab Manzoor Tariq Rafi Sheikh Mukhtar Ahmed Mohammad Arshad Shahzad Saleem Raza Mansha Sarmad Amin Mian Umer Mansha

Chairman Vice Chairman President & Chief Executive Director Director Director Director Director Director Director

AUDIT COMMITTEE:
Mian Mohammad Mansha Shaikh Mukhtar Ahmed Shahzad Saleem Chairman Member Member

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CHIEF FINANCIAL OFFICER:

Ali Amin

COMPANY SECRETARY:
Tameez-ul-haque

ORGANIZATIONAL STRUCTURE
As MCB is a banking company listed in stock exchange therefore it follows all the legalities which are imposed by concerned statutes Mian Muhammad Mansha is Chairman of the company with a team of 10 directors and 1 vice chairman to help in the business control and strategy making for the company. Operational Management of the bank is being handled by a team of 10 professionals. This team is also headed by Mr. Muhammad Mansha. The different operational departments are Consumer Banking & IT div; Financial & Inter branch div; Banking operations div; HR & Legal div; financial control & Audit div; Credit management div; Commercial Banking div; Corporate Banking div; Treasury management & FX Group and lastly Special Assets Management (SAM) Group. For effective handling of branches, it has been categorized into three segments with different people handling each category. These categories are:

Corporate Banking Commercial Banking Consumer Banking

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CORPORATE BANKING:
These are branches which have an exposure of over Rs. 100 million. Usually includes multinational & public sector companies

COMMERCIAL BANKING:
The branches which has a credit exposure of less than Rs. 100 million but having a credit portfolio of more than Rs. 20 million (excluding staff loans) Usually branches in large markets and commercial areas come under this category.

CONSUMER BANKING:
These are the branches which have exposure up to Rs. 20 million and these include all the branches which are neither corporate nor commercial branches. Recently the organizational structure was re-designed as follows: Punjab Sindh NWFP Blochistan Azad J.Kashmir Domestic Overseas Total

650 243 103 36 14 1046 7 1053

Furthermore, the bank has some proposals under consideration to open more branches in some European countries and as well as in Japan & china

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Chairman Mian Muhammad Mansha

President Muhammad Aftab Manzoor

Corporate Banking Group Muhammad Shoaib Qureshi

Commercial Banking Group - North Imdad Ali Butt

Commercial Banking Group - South Shahid Sattar

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OVERSEAS BRANCHES:

Total no. of branches Colombo Mardana Pettah OBU Bahrain Wellawatte EPZ Kandy

7 1 1 1 1 1 1 1

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INFORMATION ABOUT BRANCH

I did my internship in Muslim Commercial Bank Limited Kot Farid Branch, Sahiwal. And some important information about my branch which I observed are as follows:

MANAGEMENT OF THE BRANCH:

Branch manager Accountant Operational manager Cashier Peon Secrity guard

Mr. Yasin Tahir Ms. Shumaila Malik Mr. Ayaz Mr. Nazir Khalid Haidar

DEPOSITS:
The total deposits of this about to 207.10 million.

NUMBER OF ACCOUNTS:
Accounts in this branch of MCB are as follows:

CURRENT ACCOUNT:
Total numbers of current accounts are 1049

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PLS ACCOUNT:
Total numbers of profit and loss accounts are 2120.

KHUSHALI BACHAT ACCOUNT:

These are about to 600 accounts.

REMITTANCE:
Total remittance of this branch is 26.22 million.

RATE OF INTEREST:
The rate of interest provided by such bank is minimum 4.45% and maximum 9%.

GENERAL BANKING
It is backbone of banking It is one of the major department of MCB. It further consists of following departments: Operations Department Current Department Remittance Department Clearing Department Cash Department Accounts Department Technology Department

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DEPARTMENTS WHERE INTERNSHIP WAS CARRIED OUT

Operations Department Clearing Department Remittance Department

OPERATIONS DEPARTMENT
In Operations department I was under supervision of Mr. Ayaz, Operational manager. And I learnt to open accounts of different types and nature which are as follows,

TYPES OF ACCOUNTS:
Single Joint Partnership Private Limited Public Limited

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SINGLE:
Only one person can operate this a/c. An individual who can fulfill the requirement of bank can open this a/c. We can call it a personnel or individual a/c. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Letter of Kinship etc.

JOINT:
In case of joint a/c applicant mentions that how much person will operate the a/c. Instruction are given for joint a/c such that the account shall be operated by anyone or more. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Letter Kinship, Additional Signature Form (For Joint Account), Declaration regarding the operator of account.

PARTNERSHIP:
For partnership a/c, along with the application form other requirements needs satisfied. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Registration certificate, agreement among partners and Commencement of business and private registration, resolution of board of directors, commencement of business, memorandum and articles of association and balance sheet etc.

PRIVATE LIMITED:
Such type of account is opened in the name of the businesses having private limited concern and mostly medium business enterprises open such kind of accounts. All the board of directors have to submit the declaration regarding the account operator on the company pad and with the rubber stamp with the signature of the all the members of the board of directors. In case of any change in directors bank must be informed regarding that. In case funds are borrowed by the company all the directors approval is necessary rather not only the authorized partner who can be the operator of the account.

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PUBLIC LIMITED:
Public Limited A/C type of account is opened in the name of the businesses having Public limited concern and mostly medium business enterprises open such kind of accounts. And terms regarding board of directors are the same as of private limited.

NATURE OF ACCOUNTS:
Current Account PLS Saving bank A/C Khushali Bachat Account (KBA) Saving 365 A/C Basic banking A/C (BBA)

CURRENT ACCOUNT:
In this type of accounts the client is allowed to deposit or withdraw money as and when he likes. He may, thus, deposits or withdraws money several times in a day if he likes. There is also no restriction of amount to be deposited or withdrawn. However, there is requirement of minimum balance maintenance of Rs. 1000/-. Usually this type of account is opened by the businessmen. No profit is paid by the bank and no service charges are deducted by the bank on current deposits account. These types of deposits are also exempt from compulsory deduction of Zakat.

PLS SAVING BANK A/C:

This account was started in 1980s after the issuing of banking ordinance in 1980 by Zia Government to develop Islamic banking in Pakistan. In this case customer would be responsible for bearing profit as well as loss. 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

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of the fund to the best of its judgment in the banking business under the PLS system. For withdrawal of larger amount, 7 days notice in writing is required to be given. Minimum balance is Rs.500/= Not more than eight withdrawals in a year allowed More than Rs.15000/= are not allowed to draw Seven day notice is required for big withdrawal Zakat deducted on @ 2.5% Profit calculated on monthly basis Profit paid on annually basis

SAVING 365 ACCOUNT :

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 restriction on withdrawal from the account. Zakat and withholding Tax is also applicable on the account 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 10% Withholding Tax on minimum balance Zakat deducted on @ 2.5%

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KHUSHALI BACHAT ACCOUNT:

Saving type account Rate of return is 8% per annum Profit calculated on daily basis Profit paid on half yearly basis Utility bills can be debited through this a/c No charges will be debited for utility payments

BASIC BANKING A/C (BBA):

Introduced specially for salaried persons. Minimum balance is Rs.1000/= No service charges. Only two transactions allowed, in one month. For more than two transactions Rs.35/- per transaction. Single natured A/C.

ACCOUNT OPENING PROCEDURE:

Following steps are involved in A/C opening,

ACCOUNT OPENING FORM: Firstly the customer fills the account opening form and
provides all the information as provided above. I experienced to fill this form

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INTRODUCTION:
An account is needed to be introduced. The introduction of a current account holder is accepted for the opening of an account. The introducer should be a branch customer or may be account holder of any branch of MCB; however signatures should be verified by the banker. In certain cases, introduction from bank other than bank MCB may be allowed. Personally known accounts may be introduced by the bank staff. Introduction from an account holder not personally coming to the bank should be verified by the bank.

STAMPING:
Then it is stamped. Stamps like. BAL sign verified, Sign Admitted Stamp, Sign Verified stamps etc are affixed.

ACCOUNT NUMBER:
When all the procedures are completed than the final approval is taken from the branch manager. After obtaining approval, an account number is allotted to the customer and all the information is entered in to the computer and KYC is filled up. Then that account number is writing on the Cheque Book, Specimen Signature cards and account opening form.

KNOWING YOUR CUSTOMER:

After entering information KYC is filled up. It should be ensured that at the time of filling information in KYC, a customer should be physically present. After this all information is saved in system. I filled KYC form also.

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APPROVAL:
This account is further approved by Manager Operations.

SEND FORM TO HEAD OFFICE:

After fulfilling all the requirements and verifying the forms from operation manager the account opening form is sent to Head Office Karachi and make request to issue the printed cheque book. LETTER OF THANKS: Subsequent to the opening of an account, letter of thanks should be sent under registered post or courier service to the customer and the introducer.

ISSUANCE OF A CHEQUE BOOK:

After opening an a/c with the bank, the a/c holder can not immediately start operating his/ her account. The cheque book is issued, when a customer will submit a copy of letter of acknowledgement duly signed by him, in case of new account. And for subsequent issuance of cheque book He/she has to make a request once again in the name of bank for the issuance of cheque book and he should mention title of A/C, A/C number, sign it properly and mention the number of leaves requires. Normally a cheque book having at least 25 leaves is issued but it can also be of 50 leaves.

CLOSING OF AN ACCOUNT:
There is no. 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.

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

CLEARING DEPARTMENT
In clearing department I worked under supervision of Miss Shumaila Malik. In clearing department and learned about inward and outward clearing and I also learnt about,

MEANING OF CLEARING:
The word clearing has been derived from the word clear and is defined as,

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

CLEARING HOUSE
It is a place where cheques are presented, collected from bank branch. It is one of the services provided by NIFT to other commercial banks. NIFT acts as a clearinghouse.

NIFT:
NIFT stands for National Institutional

Facilitation Technologies. Clearing House of SBP has shifted a tiresome part of its work to a private institution named NIFT. NIFT collects cheques, demand drafts, Pay orders, Travelers Cheques, etc. from all the branches of different banks within city through its carriers and send them to the branches on which these are drawn for clearing. After the branches approve the instruments drawn on them, NIFT prepares a sheet for each branch showing the number for instruments and amount

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in its favor and drawn on it and sends it to each branch. A similar sheet for each bank is also sent to clearing house of SBP where accounts of banks are settled in the same manner.

LEARNING IN CLEARING DEPARTMENT

My learning in clearing department was of following things: Procedure of clearing a cheque. Checking of cheques. Inward and outward clearing. Different reasons of returning a cheque. Types of clearing stamps.

CLEARING PROCEDURE:
Instruments collected are treated as Transfer, Transfer Delivery, Clearing, and Cheque collection.

CHECKING OF CHEQUES:
When the instruments are collected from the client. Following things are checked Cheque date, instrument should be neither stale/ nor post-dated. Title Amount in figures and words should be the same There should be no cutting and overwriting on the cheque Instrument should not bear any unauthorized alternation. Cheque is crossed.

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TRANSFER:
When the instruments are collected and paid by the same branch, it is called transfer.

TRANSFER DELIVERY:
When instruments are collected and paid by two different branches of the same bank situated in the same city, it is called transfer delivery A cheque is processed under transfer delivery when it has crossing stamp and is from local branch of MCB

CLEARING:
Instruments which are drawn on the branches of some other bank of the same city or of the same area, which is covered by a particular clearing house, are processed for clearing. In outward clearing when cheque is received two copies of voucher SF-37 are prepared, one copy and instruments along with clearing stamp, realization stamp, add list and two vouchers of clearing summary are sent to NIFT in a sealed bag. And clearing records are recorded in clearing register. In Inward clearing instruments received from NIFT are posted in Computers after checking.

CHEQUE COLLECTION (C.C):

When cheque is from another city then it is grouped as C.C.Such instruments are processed as cheque for collection. In this procedure SF-37 form is used in Cheque collection. Original voucher with cheque, stamped as C.C along with C.C number is sent to main branch of the responding city which is further sent to NIFT. Whereas Carbon copy with Pay-In-Slip is taken by bank for record purposes.

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PAY-IN-SLIP:
It is used for two purposes Whenever we want to deposit cash in our account then pay-in-slip is used by writing amount on it and depositing it to cashier along with money. Whenever we have cheque from any party to be collected in our account we fill pay-in-slip. One part is attached with cheque and another is given to cheque holder as a receipt.

NOTE:
In inward clearing sometimes cheques are not passed due to some reasons then cheques are sent back to NIFT along with cheque return memo. Some of these reasons are, Cheque incomplete Clearing stamp Required. Drawers sign incomplete Drawers sign different from specimen Post Dated Payment stopped by drawer. Amount in words and figures differ. Insufficient funds etc.

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REMITTANCE DEPARTMENT

REMITTANCE:
Remittance is transfer of funds from one place to another or from one person to another. It is an important service provided by banks to customers as well as non-customers. Since it is not a free service it is a source of income for the bank.

PARTIES INVOLVED IN REMITTANCE

Four parties involved in remittance: Remitter, Remittee, Issuing Bank, Paying Bank

REMITTER:
One who initiates, or requests for a remittance. The bank charges him a commission for this service. He may or may not be the branchs customer.

REMITTEE:
A Remittee is also called the beneficiary, or the payee. The person in whose name the remittance is made. A Remittee is also the one who receive the payment.

ISSUING BANK:
The bank that sends or effects the remittance, through demand drafts, telegraphic transfers, or Mail Transfers.

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PAYING BANK:
Paying Bank also knows as the drawee branch. The branch from where the instrument is drawn.

TYPES OF REMITTANCE:
Remittance is classified into following four types Inward remittance, instruments received for payment Outward remittance, issuing instrument to the responding branch. Inland remittance, with in same country. Foreign remittance, from one country to another country.

INSTRUMENTS USED IN REMITTANCE:

Demand Draft (DD) Telegraphic Transfer (TT) Pay Order (PO) Call Deposit Receipt (CDR) Rupees Traveler Cheque (RTC)

DEMAND DRAFT:
DD is a written order given by the branch of the bank on behalf of the customer to other branch of the same bank to pay the certain amount to the customer.DD are issued for the particular place other than place of issuance. DD applicant or recipient, who might not be an A/C holder present it to another bank at a different place requesting it to pay on demand a specified amount of money which is already received to the person named on it.

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DOCUMENTATION:
A printed application form is provided for filling in completely and signing by the applicant. After depositing an amount of draft and commission of the bank, duly completed and signed by two authorized officers, then it is handed over the applicant and credit order is dispatched to drawee branch.

TELEGRAPHIC TRANSFER (TT):

TT is fund that is transferred electronically which is remitted on the order of a certain person. In this case the authority is given from one bank to other on the behalf of the customer through

telecommunication to debit their inter office account through them and credit their parties account mentioned in TT. But it is not practiced these days frequently.

PAY ORDER:
For this kind of remittance the payer must have the account in the issuing bank. Pay order are more liquid as compared to cheques because cheques may be dishonored while PO cant be. It is written order issued by the bank drawn and payable on itself. It is used for local transfer of money from one person to another person.

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DOCUMENTATION:
The party who requires a pay order will get a printed application from the bank. He will fill it and deposits the amount and commission.

CALL DEPOSIT RECEIPT (CDR):

It is an instrument like Cheque issued by the bank on account of a customer & in favor of a person, to pay the specified amount. CDRs are issued to make payments, especially when a company goes for some tenders or for purchase of government securities or any contracts with others.

DOCUMENTATION:
The party who requires a CDR will get a printed application from the bank. He will fill it and deposits the amount and commission. The bank enjoys the benefit of keeping funds deposited until the payment is not made.

RUPEES TRAVELER CHEQUE (RTC):

RTC is the traveler cheque are acceptable at all branches of MCB, and they carry dozens o f benefits. Security is always being an important issue of concern. TCs provide maximum security while carrying big amounts.

DOCUMENTATION:
First of all RTC-10 is given to customer. It is filled and then cash is deposited to cash department. One copy is for office and one copy is given to the customer and RTC are issued at that time.

NOTE:
At time of my stay in remittance department, there was no issue of CDR, TT, RTC, PO so I were unable to understand its practical aspects, except clearing.

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OTHER DEPARTMENTS
There have been some departments in which internship was not allowed, these departments were 1. CASH DEPARTMENT 2. ACCOUNTS DEPARTMENT 3. ADVANCES DEPARTMENT And in TECHNOLOGY DEPARTMENT I got information about ATM and Online Banking and just filled their forms because computer work was not allowed to internees.

CASH DEPARTMENT

The cash department is the most important department of the bank. In cash department both deposits and withdrawals go side by side. This department deals with cash deposits and payments. The following books are maintained in the Cash Department: Cash Receipt Book Cash Payment Book Cash Balance Book

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The officers in this department are called teller and there were 2 tellers Mr. Nazir and Mr. Abrash at the counter. This department is involved in two activities: Cash Deposits, Cash Payments.

CASH RECEIPT BOOK:

The cashier is responsible to receive both the paying-in-slip and cash from the depositor. For depositing the cash into customers accounts, there is need to fill in the paying -in-slip giving the related details of the transaction. The cashier check the necessary details provided in the paying-in-slip and accounts the cash and tallies with the amount declared in the slip then cashier fills in the Cash voucher received Record Sheet and assigns a voucher no. to both the transaction being made in the sheet and the slip. The 2nd cashier posts the transaction entries in computer ledger. After posting these entries, computer display before posting balance and after posting. Cashier assigns the stamp POSTED on the voucher to show voucher transaction entries are posted.

CASH PAYMENT BOOK:

The only instrument that can be used to withdraw an amount from an account is the Cheque book. No payments are made by another instrument. When cheque is valid in all respects, the cashier enters the necessary inputs in the computer and posts the entry so that account balance is updated. When cashier posts these entries, computer automatically display the balance before posting the transaction amount, balance after posting. The cashier at the same time maintains the Cash Voucher Received Record Sheet. Then inspects the signature of the customer, cancellation mark of checking officer and stamp of POSTED is placed on cheque before he hands over the cash to customer.

CASH BALANCE BOOK:

At the end of the working day cashier is responsible to maintain the cash balance book. The cash book contains the date, opening balance, detail of cash payment and received in figures,

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The consolidated figure of receipt and payment of cash is entered in the cash book and the closing balance of cash is drawn from that i.e. Opening Balance of Cash + Receipts - Payments = Closing Balance

ACCOUNTS DEPARTMENT
The most important aspect in record keeping of a bank is its accounting system. The basic purpose for maintaining an accounting system is to ensure consistency in record keeping and accounts. The basic requirement for any accounting system is that it should be in accordance with the GAAP i.e. Generally Accepted Accounting Principles. There are two choices available to an organization for an accounting system.

Main Functions of Accounts Department:

The major function of this department is keeping the record maintenance of each and every transaction and prepares reports about the amount of deposits and advances and sent to Head office or State Bank of Pakistan on monthly, quarterly and yearly basis. Following activities are carried out in Accounts Department. Budgets and budget review form Income & expenditures. Reports and Reconciliation. Activity checking.

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Depreciation & Maintenance of fixed assets provision. Maintenance & depreciation of fixed assets.

TECHNOLOGY DEPARTMENT

It includes; Mobile Banking Phone Banking Online Banking ATM

MOBILE BANKING:
It has been launched recently during my internship. It helps in getting accounts details and making transactions using mobiles.

PHONE BANKING:
"MCB Phone Banking is available to all customers on a countrywide basis. Customers can dial 111-000-622(without any city code/prefix) from their respective cities Customers enjoy 24x7 Round the Clock Phone Banking Services. MCB is the first bank in Pakistan to offer Centralized connectivity.

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ONLINE BANKING:
MCB now offers the facility of on-line banking to its customers through its country wide network of branches. Customers can use the ATMs or the banking counters of any branch for day-to-day banking needs, irrespective of branch where they maintain their accounts.

There are now more than 250 branches linked through this system and they can transact with each other directly using computer systems and the software named SYMBOLS at their own branches. ATM (Automatic Teller Machine):
ATM stands for Automatic Teller Machine. This machine is used to transact in one's account without intervention of humans. These machines are basically used for taking cash, confirming balances and requesting statements / cheque books. MCB has the largest ATM network in the country at the moment with almost one ATM at each online branch and also ATM terminals at International Airports covering 27 cities of Pakistan ATMs are operated through a card issued to the valued customers and by application of Personal Identification Number (PIN number). Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard. This contract will enable an ATM card holder to use his account even when he is out of country at all the ATMs where Cirrus logo is displayed. Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/- in a day. The annual fee for this card is Rs. 300/- only. Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day. These cards are issued to the persons having more than Rs. 500000/- as their average balance. International Cards are issued in collaboration with Cirrus and are useable all over the world with maximum withdrawal facility according to the standards of Cirrus.

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ADVANCES DEPARTMENT
Different banks provide loan facility to general public, companies etc. but MCB provides two types of loans that are as under: Fund Base Loans Non Fund Base Loans

FUND BASE LOANS:

In this type of loans cash is directly involved. Bank provides loans in shape of cash. Bank gives credit or limit facility to customers that needed it. In fund based loans there are two further classifications:

Long Term Loans:

Lease facility for car For Machinery For Fixed Assets

Short Term Loans:

Running Finance (R/F) Cash Finance (C/F)

RUNNING FINANCE:
The MCB provides overdraft facility to the customers for the working capital requirement. These are the loans which are given to those customers whose business runs through out the year or continuously. Its duration is one year and it is for running business.

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In advances there are two securities one is known primary security and other is secondary or collateral security. Hypothecation of stock is the primary security and mortgage is the secondary or collateral security.

SECURITIES FOR FUND BASE LOANS:

Hypothecation of Stock Mortgage Pledge
HYPOTHECATION OF STOCK:

In hypothecation of stock the possession of goods and the title remains in the favour of customer. Without the permission of the bank the customer can't sell the stock. It is the restriction of the bank that in god own there should be stock according to the instructions of bank every time. The draw back of this is that there is no check and balance of stock from the bank. The customer can easily sell his stock.
MORTGAGE:

The bank can mortgage the immovable property like land, building etc as a security. In mortgage the possession remains to customer and title of goods remains to bank.

PLEDGE:
In this, bank requires the moveable property of the customer as a security like stock, vehicle etc. possession of goods remains to customer and title in the favor of bank. The bank hires a muqaddam [Guard] and the key of store where the stock is pledged is in the security of bank. When customer wants to sell the stock then he pays the amount equivalent to stock which he wants to sell. After receiving amount bank releases his stock for the same amount

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NON FUND BASE LOANS:

In non fund based loans cash is not directly involved but bank gives guarantee on the behalf of customer. Bank works as a third party and known as Guarantor. Bank provides a security to customer when he needs and someone requires from the customer.
DOCUMENTS REQUIRED BY BANK FOR ADVANCES:

Request of customer Credit application from bank Basic borrower sheet Net worth certificate CIB report Financials Account statement Property evaluation report For sale value certificate Property documents Title deed [fard] Property map CNIC Account opening form Undertaking

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Following steps are there: Information required by the bank Preparation of credit proposals Sanction advice

INITIAL INFORMATION:
Following information is required to be submitted to bank. Nature & structure of borrower business Names of proprietors, partners or directors Detail of all firms or companies associated with borrower. Financial condition of borrower business An assessment of his business abilities Accurate and up to date financial statements of last two years for comparison purposes Market report on the borrower where borrower has maintained an account with another bank, a report from his bank should also be obtained. A report from credit standing bureau of State Bank of Pakistan

PREPARATION OF CREDIT PROPOSAL:

At first a formal application for credit approval is obtained from the party along with complete group position. The partys credibility report is obtained from the bank with which the bank is doing its business. The partys credibility report is also taken from the Head office of Trade Information Division.

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For obtaining credit, party has to submit the last two years Balance Sheet and Profit & Loss statement duly attested by authorised auditors. If the party is also involved in export or import business then the bank also considers the data of three years about import & export. Current debt and equity ratio is also calculated by the bank. The type of data required to prepare the credit proposal is to be gathered from the different departments. Some data is obtained from the foreign Exchange department. Some data is available in Advance Department. The purpose of obtaining Credit should be explained clearly. The securities offered by the party to the bank are also evaluated. In case of pledging of property in shape of land or building the complete evaluation of the property should also be attached. After all the necessary documents for applying for advance is fulfilled by the party then the case is sent to Manager for approval. If the credit limit is in his range then he can decide over it otherwise the case is forwarded to seniors. If there is any discrepancy then the party is informed of it.

Sanction Advice:
When the documents required are complete and there is no ambiguity then the party is advised that their credit or loan is approved and will be available to you soon. The form contains following information: Nature and amount of limit. Purpose Security/ Collateral Margin (%). Mark up/ Charges Validity

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FINANCIAL ANALYSIS OF MCB

RATIO ANALYSIS
Ratio analysis is an important and old technique of financial analysis. Ratios are important and helpful in the reference that: These simplify the comprehension of financial statement and tell the whole story of changes in the financial conditions of the business. These provide data for inter-firm comparison. The ratios highlight the factors associated with successful and unsuccessful firms, also reveal strong and weak firms. These help in planning and forecasting these can assist management in its basic functions of forecasting, planning, coordination and control. These help in investment decision in case of investor and lending decision in case of Bankers etc. However, the ratios are only indicators, they cannot be taken as final regarding good or bad financial position of the business other things have also to be seen. Great care is needed while calculating meaningful ratios and in interpreting them. Although there are several ratios, which an analyst can employ yet the type of ratios he would, use entirely depends on the purpose for which the analysis is done i.e., a creditor would keep him abreast about the ability of a concern to cover up its current obligations and so would care about current and liquid ratios, Turnover of receivables, coverage of interest by the level of earnings etc.

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SWOT ANALYSIS

The overall evaluation of a companys strengths, weaknesses, opportunities and threats Strengths (S) include internal capabilities, resources and positive situational factors that may help the company to serve its customers and achieve its objectives

Weaknesses include internal limitations and negative situational factors that may interfere with the companys performance. Opportunities are favorable factors or trends in the external environment that the company may be able to exploit to its advantage. And Threats are unfavorable external factors or trends that may present challenges to performance.

A scan of the internal and external environment is an important part of the strategic planning process. The SWOT Analysis provides information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates.

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MCBs SWOT ANALYSIS STRENGTHS

MCB is the first Pakistani privatized bank and because of its quality management, marketing, innovation in products and services. Owing to all such factors they have established a good reputation in the banking market. The name of MCB makes you recall the highly cooperative and professional individuals ready to serve you with maximum zeal and zest. The joining of experienced people, advanced management, advance setup and facilities gave MCB an edge over its competitors.

MUSLIM COMMERCIAL BANKS IMAGE: MCB is a reputable financial organization and is well known all over the Pakistan.
Perception is of producing a high quality services.

CUSTOMER CARE:
The Bank not only provides high quality services but it also look for the comfort and convenience of the clients, MCB always preferred their customers.

MARKET SHARE:
MCB has covered much of the potential market and the net profit is increasing years after years. Deposits and advances have sufficiently increased.

LARGE NUMBER OF DIVERSIFY PRODUCTS:

This is also its main strength as it has diversified in many products such as: Debit Card

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Visa Card Car Financing

Agriculture Financing BRANCH NETWORK

It is the greatest strength of the Bank. In 2004, five more branches were added to the network and by the end of the year 2005 the total number of branches was raised from just 53 to 143. MCB has also planned to open more branches in next coming years.

SOUND MARKETING:
Skillful marketing of the products is being achieving countrywide goals of Muslim Commercial Bank Limited.

PHONE BANKING:
Every account holder can conform its balance on Phone and may ask for any query. There are also 24 hours help lines for customers.

MOBILE BANKING:
It has been launched recently. It helps in getting accounts details and making transactions using mobiles.

HIGHLY AUTOMATED BANK:

MCB in Pakistan is the also in the list of highly automated banks, about 750, like Emirates because of its modern style of banking through fully computerized control and twenty four hour banking.

FASTER BANKING SERVICE:

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MCB have faster banking services that are making it more prominent in the banking industry especially in operations and Foreign exchange. The customer prefers this bank not only because of its faster speedy service rather due to reasonable service charges.

INTERNATIONALLY DESIGNED PRODUCTS:

MCBs products are internationally designed products. These are valuable and operational in all over the world.

CONTRACT WITH CIRRUS:

Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard. This contract will enable an ATM card holder to use his account even when he is out of country at all the ATMs where Cirrus logo is displayed.

WEAKNESSES
ADVERTISEMENT:
The majority of people are not well aware about the products of MCB. Therefore it should advertise extensively especially RTC and Master Cards.

ACCOMMODATE BEHAVIORALLY:
A behavior has been noted that bank tries to feel at ease with good looking, rich and educated people and the poor looking customers feel some bit strange in the environment of the bank. The bank employees should try to accommodate behaviorally all type of customers.

MISMANAGEMENT OF TIME:

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Mismanagement of time is another big mistake in MCB branches, the bank official time of closing is 5:30pm but due mismanagement of time allocation and work the staff is normally on their seats till 7:00 or 8:00 clock.

AND ALSO,
Costly documents are required for loan sanctioning. Some times bank also never meets stated rate of profit

OPPORTUNITIES
PRIVATIZATION:
As on December 31, 1998, sixty-eight scheduled banks with 9,106 branches are operating in Pakistan. As on this date, total population of Pakistan is 140.03 million. Total number of personal accounts with all scheduled banks as on December 31,1997, are 28.98 million. If we consider the population statistics of working age group as on December 31,1997, it stands to the figure of 96.64 million. Thus we can say those 28% of working age people of Pakistan are having accounts with banks while 72% are unbanked. The need of privatization has made people to switch to banks to satisfy their needs of lending and borrowing. This not only increases the deposits but also the credit business.

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DIVERSIFICATION:
They may enter in New business or any other consumer-durable product in order to promote their name, by introducing Loan for the students, small businesses, and handicraft industry.

SOME MORE OPPERTUNITIES:

Information Technology. Credit cards can give more earning. Establishing more foreign Branches. They should introduce Student Finance Facility. They should also introduce mobile ATM

THREATS
CHANGE IN GOVERNMENT POLICIES:
Change in government policies has affected the banking business. Still banks have to wait to get permission of state bank. The freezing of foreign currency accounts is a vital example of letting people not to trust on banks.

COMPETITION:
The Competition has become severe by the entrants of so many banks, So to exist one will have to prove himself in its services through excellent management and will have to satisfy its shareholders. Otherwise he will be out the market.

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LOW INVESTMENT:
The decrease purchasing power of consumer in the current economic situation of the country affecting the business activity speed too much and the result is the low investment from the investors in new projects can create problem for the bank because it is working a lot in trade.

STATE BANK REGULATION:

As the Bank introduces unique products so they face problem if State Bank Of Pakistan employ taxes on them which force them to increase the rate of Interest.

EXPECTATIONS OF THE PEOPLE:

Due to huge competition among those banks and MCB,, people are the basic beneficiaries from it and thus their expectations tend to increase about the products and the relative rate of interest thus creating a threat for MCB.

SOME BANKS ARE OFFERING KISAN CARDS.

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PEST ANALYSES
PEST analyses tell How Political, Economical, Social and technological factors affect MCB. These are the external factors which affects the whole organization.

POLITICO-LEGAL FACTORS:
Stable government Stable policies in favor of business Improved relation with outside world Law and order.

UNSTABLE GOVERNMENT:

Due to this reason foreigners hesitate to invest their savings in banks, as a result of economy of our country is going downward and banks suffer.
ADVERSE LAW AND ORDER SITUATION:

The situation of law and order is adverse. The policies are not very handy and beneficial for the country. The Govt. passes such rules which are not in the favour of bank e.g. The Govt. of Pakistan has passed a rule that if anyone withdraws more than Rs.25000 then he will be charged 0.30% on withdrawal.

ECONOMIC FACTORS:
Pakistan's economy is going weaker and weaker. 9/11 has a great influence on the economic crisis of all over the world. With economic factors the bank influenced very much that are as under: Impact of WTO force to cost reduction methodology. Low interest rate

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Inflation Low GDP growth Budget deficit Increase in Govt. duties Fluctuation in exchange rates

SOCIAL FACTORS:
Social environment includes family, friends, a person's role and status. An individuals life directly by society and the person acts according to his or her society. Cultural environment includes norms, values, religion, conception and perception. If we see the religion point of view then interest is not allowed that's why most of the people hesitate to invest their savings in banks and yet they are not aware of ISLAMIC BANKING. Traditional business men do not like the business with bank. They pay their creditors through cash not through cheque. They do not want to get the bank facilities.

TECHNOLOGICAL FACTORS:
Today is the era of technology. In the every aspect of life technology plays an important role. Due to rapid change in technology every bank has to change its technology to compete other ones. Increasing issue of securities due to technology resulted increase in cyber crime. Cyber crime means manipulation. One person can easily transfer amount from any other's account to his account.

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APPLICATION OF CLASS ROOM LEARNING

During my internship of eight weeks in Muslim Commercial Bank, Ltd. Kot Farid Branch, Sahiwal the knowledge given by my respected and devoted teachers proved to be very helpful in understanding the environment in the organization and working practically. Following are some key points about application of my class room learning in the organization: The knowledge achieved from the subject Business Communication helped me in understanding customer dealing i.e. how to deal with them? How to understand their problems? etc. It also helped me in understanding the inter Organizational Communication i.e. circulars, notices etc. Also the Knowledge which I got from the subject Computer application in Business also proved very useful. Financial Management and Principles of Accounting helped me in understanding the accounting terminologies which are used in bank e.g. what is debit and credit vouchers? What are these for? And also in understanding that how entries are made against certain heads. I could do this only with the help of the knowledge provided to me in my two semesters of MBA at Bahauddin Zakariya University, Sub Campus Sahiwal.

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WHAT I HAVE LEARNT IN MCB

In Muslim Commercial Bank Ltd. I really enjoyed working with the staff of Kot Farid Branch, Sahiwal having a wish to be employee of MCB. It was almost impossible to work in all the departments within that limited time. But the staff of the branch provided me the opportunity to work in the different departments for the sake of practical knowledge. I feel highly indebted to work in the Kot Farid Branch with the manager of that branch Mr. Yasin Tahir, because I learnt a lot in that branch. During my internship training in the MCB as I early mentioned that I have worked in different departments & seats and learnt the following things,

How to deal with different types of customers. Account opening. Cheque book issuance. Outward clearing. Cheque for Collection. Different forms and vouchers filling. Experience of working in a well reputed organization.

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SUGGESTIONS & RECOMMENDATIONS

Following are some suggestions for Muslim Commercial Bank, Ltd.

ADVERTISING:
Bank must let potential customers know that all attractions for banking exist. This is done by advertising on television and obtaining press coverage, in conjunction with direct mail, window displays, leaflet in branches and in appropriate other locations (such as hotels, shops, etc.) and including leaflets in statement of accounts sent to existing customers in the hope that they will tell potential customers about the services provided by our bank.

INCREASED ATMS LOCATIONS:

Some personal sector customers prefer not to come to branch. They increasingly want to deal with the bank in other ways, such as home banking or use of Automated Teller Machines (ATMs), which need to be at every branch or some important shopping plazas and airports etc.

INCREASED SERVICES:
One way to retain the customers is to offer a wide range of services such as tax advice, free life insurance equivalent to amount deposited, shares portfolio management, fund management facility, etc., complimentary to the core services. Banks must have a slightly different mix of services and mean of providing these such that customers can choose the mix that suits them best.

MANAGEMENT OF TIME:
There should be a good management of time for the sake of employees i.e. offering them free break hours instead of making them work in this time as well.

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GROWTH SCOPE FOR EMPLOYEES:

MCB should provide greater facilities to its employees, and give them bonuses for their hard work and Promotions as well. There is a criticism on the banking management that the salaries of the employees are decreasing in every succeeding year. And I think this will shake the confidence and working habit of the employees

BANKING PROFESSIONALS:
The bank should hire banking professionals having experience in their respective fields that will boost the performance of the company as currently MBAs are produced for this field so they should be hired for enhancing the performance of company.

ATTRACT CUSTOMERS:
The banking company should offer such policies which would attract customers which are denied by other banking in the market.

JOB ROTATION AND PROMOTIONS:

Most of the bank employees, are sticking to one seat only with the result that they become master of one particular job and loose their grip on other banking operation. In my opinion all the employees should have regular job experience all out-look towards banking. The promotion policy should be adjusted

COMMUNICATION SYSTEM FOR EMPLOYEES:

As such system should be designed that every employee who has some problems with his officers can communicate it to the higher management and some steps must be taken to improve that.

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IF I WERE MANAGER AT MUSLIM COMMERCIAL BANK

If I would be a manager at MCB Ill take following steps, I will apply such a communication system specially designed for employees trough they can share the problems regarding work environment. Complete working and break hours will be offered so that employees can work efficiently. I will make it sure that some of the employees should be sent for training to other countries and employees from other branches should be brought here. I will make promotions, job rotation and bonuses, an important part of policies of MCB. At every months closing when employees stay at branch even after working hours, a dinner from bank will be offered. To retain potential customers certain services will be provided and let them know with advertising. I will make it sure that Working environment, equipment, furniture and staff dressing should be according to the modern banking style.

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REFERENCES & RESOURCES

To make this internship report data is taken from the following resources:

ONLINE RESOURCES:
Muslim Commercial Bank, Ltd http://www.mcb.com Muslim Commercial Bank Pakistan http://www.mcb.com/pakistan/ State Bank of Pakistan http://www.sbp.org.pk Statistical Bureau of Pakistan http://www.fbs.gov.pk

Interview with key persons at MCB, Kot Farid Branch Sahiwal.

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