INTERNSHIP REPORT

ON
Clifton Branch, Karachi
By
Faisal Hayat
MBA (Finance)
Submission Date: 03/01/2012
ACKNOWLEDGEMENT
First of all I would like to thanks to Allah Almighty
who has given me a chance and ability to think and
judge the matters and then to make use of the
blessed abilities. I also want to show my gratitude to
my loving parents and most respectable teachers
who directed me to apply our abilities in the required
direction. I also thanks to the management of MCB
Bank limited for their support in completing this
valuable internship report.
Table of Content
Particulars Page
1. Preface / Introduction of the Organization
1.1 History 1
1.2 Mission Statement 1
1.3 Values 2
1.4 Departments &Hierarchy 3
1.5 Organization Culture 5
2. Purpose of Internship
2.1 Reason of choice 6
2.2 Personal Objectives 6
3. Field of Activity
3.1 Reporting duties 7
3.2 Job performed 8
3.3 Overview of a process 9
3.4 Product and Services 10
3.5 Self-Assessment 11
4. What have I done? 12
5. Suggestions and Recommendations
5.1 SWOT Analysis 18
5.2 Problem identification 20
5.3 Suggestion for improvements/ Solution recommendations 20
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1. Introduction of the Organization
1.1 Brief History
MCB Bank Limited (Formerly Muslim Commercial Bank) was
incorporated by the Adamjee Group on July 9, 1947, under the Indian
Companies Act, VII of 1913 as a limited company. The bank was
established with a view to provide banking facilities to the business
community of the South Asia. The bank was nationalized in 1974 during
the government of Zulfikar Ali Bhutto. This was the first bank to be
privatized in 1991 and the bank was purchased by a consortium of
Pakistani corporate groups led by Nishat Group. As of June 2008, the
Nishat Group owns a majority stake in the bank. The president of the
bank is M.U.A Usmani.
Founded in 1948, Nishat Group is one of the leading and most
diversified business groups in Pakistan. The group has strong presence
in the most important business sectors of the country such as banking,
textile, cement and insurance.
1.2 Vision Statement
To be the leading financial services provider, partnering with our
customers for a more prosperous and secure future.
1.2 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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1.3 Values
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.
Respect: We respect our customers 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.
Excellence: We take personal responsibility for our role as leaders in the
pursuit of excellence. We are a performance driven, result oriented
organization where merit is the only criterion for reward.
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 make every effort to exceed
customer expectations through superior services and solutions.
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.
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1.4 Departments & Hierarchy
Relationship between Head Office and Branch Offices
Departments at MCB Head office
Human Resource Banks operation
Financial Institution
& overseas
Financial control &
Audit
Credit & risk
management
Corporate banking
Consumer banking Treasury & FX
Assets management
/ Fraud control
Information
Technology
Head
Office
Section
Branch Offices
Decisions,
Strategies &
Policies
Implement
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Organization Hierarchy
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1.5 Organization Culture
Officers of the bank don't need to spend a lot of time into whether they
should consider issues or ideas. They just know their certain parameters
beyond which they won't go.
The employees in the organization are well dressed, well communicated
and well co-operative.
Officers learn what these parameters are through their experience with
various committees-through a process osmosis. In visiting and in
participating on committees, individuals get to see what their cohorts are
doing. Cross - fertilization of ideas occurs and, often, morale is helped.
Major corporate policy changes occur through a process of involvement
by levels of management.
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2. Purpose of Internship
2.1 Reason of choice
It is very important to have a good start in every walks of life especially in
career and what do you think what is good start in career? It is
something choosing a best Organization for a job according to his/her
own field. My name is Faisal Hayat and I am a MBA (finance) student of
Iqra University. I found MCB the best opportunity for my internship
because it is very a well-known financial institution among the top most
financial institutions in Pakistan. It has a sound environment and good
employees who always out there to help. As a Finance student I think
that this is a right organization specifically for the finance student to get
some positive experience.
2.2 Personal Objectives
I worked as an internee in MCB Clifton branch and my personal
objectives are:
To get some experience in working with well reputed organization.
To gain knowledge about the professional environment of the bank.
To give finest performance and get the job.
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Branch
Manager
Operation
Manager
Remittance Officer
Clearing Officer
Cash Officer
Forex
Officer
Advance /
Credit Manager
Advance /
Credit Officer
3. Field of Activity
3.1 Reporting duties
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3.2 Job Performed
Home Remittance
Remittance customer dealing & paid voucher to customer.
Making telegraphic transfer & demand draft on software.
Advances/ Credit
Manages, supervises and directs all loan and credit activities.
Identifies credit risk situations and provides guidance to line-of
business lending managers and staff.
Monitors and reviews credit relationships to determine adequacy
of under writing.
Foreign exchange and trade
Maintaining Standard Settlement Instructions.
Prepare MIS reports as directed.
Validating deal economics of Money Market trades and applying
relevant settlement instructions maintained.
Creating SWIFT MT
Operations (Clearing)
Raising clearing entries on a daily basis.
Reconciling all clearing accounts on a daily basis.
Perform call back function on all inward clearing checks.
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3.3 Overview of a Process
Home remittance
A remittance is a transfer of money by a foreign worker to his or her
home country. MCB brings FAST and FREE Home Remittance service to
beneficiaries in Pakistan. With our large network of over 1100 branches,
MCB can deliver your remittances to every part of Pakistan. For receiving
the money receiver are required to provide Reference Number and
original CNIC to the home remittance officer.
Advances and Credit
Advances and credit is basically a department / job in which product
such as Running Finance, Cash Finance, Demand Finance/ Term
finance, FIM (Finance against importer merchandise are offer to the
clients according to their business need.
Foreign exchange and trade
Foreign exchange and trade deals with modes of payment of trade
include; Letter of Credit (LC), Document Purchase, Registered Contract
and foreign remittance is also dealt in this department which includes
inward remittance and outward remittance.
Operations (Clearing)
Clearing process starts with the customer submitting deposit slips and
cheques in favoring the customers so the amount is credit to his account
after some banking process.
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3.4 Products & Services
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3.5 Self-Assessment
Working with MCB Bank Limited, Clifton Branch(0074) was a great
learning experience for me, as the whole branch staff was very supportive
specially Branch Manager: Saqib Sharif, ATM Custodian: Khurram Mirza
and Credit Officer: Zeeshan they provide a very good learning
environment as each staff member was supportive and helpful. I am
thankful to all for their support and sharing their experience with me, it
was very fruitful for my future corporate career.
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4. What have I done?
I was appointed as an internee at MCB Bank Limited Clifton branch for
six weeks internship program from Nov11
th
, 2011 to Dec23
rd
, 2011.
During the period of entire program I was rotated in several departments
which includes; Home Remittance, Foreign Exchange/ Trade Advances and
Operations (Clearing)
Overview of the Entire Experience:
1. Home Remittance:
In the first week of the internship I was trained under the supervision
of Khurram Mirza (Remittances Incharge), I learnt to manage the home
remittance service; the most familiar companies with which the bank
deals are Xpress money, Money gram and the other 36 companies are
dealt with MCB payments software. Under the same Incharge, I assisted
in the issuance of cheque books to the customers, understood the
process of feeding the cheque book requests in the system and helped in
maintaining the record of the cheque books and ATM cards delivered.
2. FOREIGN EXCHANGE/TRADE:
In the following two weeks I was trained under the supervision of Mr.
Arshad Ali Memon and Madam Sheila Perveen. In this department I
learnt about the modes of payment of trade. The modes of payment of
trade include;
Letter of Credit (LC)
Document Purchase
Registered Contract
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Letter of Credit (LC)
Letter of credit is a written undertaking by an issuing bank given to the
seller (beneficiary) at the request and instructions of the buyer
(applicant) to pay at sight or at a determinable future date. The unique
feature of LC is that the bank is liable for the payment to the exporter, if
the buyer fails to make payment. The bank normally charges 0.4% per
quarter on the entire amount of the LC.
There are two types of LC:
LC at Sight
Documents acceptance (DA)
The only difference between the two is that in LC Sight the payment is
made with in the five working days of approval by TSC (Trade Service
Center). Where as in the DA, the customer is has to make the payment
within 180 days.
The documents required to open LC are:
IB8 Form worth of RS. 500
Performa invoice
LC open request
Sanction Slip (defines Limit)
Document forwarding Letter (Issued by Bank)
Insurance letter
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Document of Purchase
In this the customers buys the documents from the bank and submits it
to the customs office and receives the shipment. The bank is not liable
for the payment.
Registered Contract
The process in which the customer has registered a contract with the
bank, in which the import documents are received by the customers and
the payment, is made through the bank to the beneficiary. The bank
charges 0.4% of the total amount.
Foreign remittance is also dealt in this department,
which includes;
Inward Remittance
It is when the payment has been received by the bank from some foreign
source. The bank checks the details of the payment and the purpose of
the payment from the customer, and then the account of the receiving
customer is credited.
Outward Remittance
It is when the payment is made to a foreign beneficiary, for this the
applicant provides the following details;
Beneficiary details
Beneficiarys bank name
Account number
Swift code or sort code
Title of account
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Once these details are presented to the bank, bank makes a foreign
demand draft (FDD) favoring the beneficiary bank. Once the FDD is sent
the bank send the swift message (110) to the beneficiary informing him
about the payment.
3. Advances
I spent my next two weeks under the supervision of Mr. Syed Zeeshan
and Mr. Abdul Qadeer Dayo.
In this department I learnt about the main objective of Funded Facilities,
which includes
Running Finance
Cash Finance
Demand Finance/ Term finance
FIM (Finance against importer merchandise)
1) Running Finance
Running finance is provided for working capital requirements. The RF
account is allowed to be operated freely by way of multi-transactions,
provided that the sanctioned limit is not violated and the account is
operated strictly in accordance with the approved terms and conditions
at all times. However borrower is required to adjust the finance provided
by the bank with the stipulated expiry period (normally once a year) as
per state bank requirement.
RF is further divided into two sub category:
RF instant
RF General
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Rf Instant:
Totally secured, and it can easily be cashed at any time in the market.
Rf General:
In this the bank keeps some property of the beneficiary as a security.
2) Cash Finance
Cash finance is the facility where an amount is disbursed against pledge
of locally procured goods and merchandise. The amount after retaining
the prescribed percentage of margin on stocks is transferred in a
separate C/F account of the customer. Delivery of pledged stocks is
allowed on payment of finance along with markup for relevant
transaction.
3) Demand Finance/ Term Finance
Under this type of facility finance is allowed to the borrower for a fixed
period usually exceeding one year, repayable either in periodic
installments or in lump sum, at a finance date. This type of finance is of
non-revolving in nature. The primary purpose is to finance fixed assets
such as plant and machinery, Land & Building.
4) FIM (Finance Against Importer Merchendise)
This facility is allowed against the commodity imported from other
countries using LC (Letter of Credit), sometimes the importer does not
have enough amount for paying imported merchandise, so they request
bank to pay all dues to the exporter against security of imported
merchandise. Banks pays the amount to exporter and releases the goods
when the importer clears its liabilities.
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4. OPERATION- CLEARING
I spent my last week in the operations department under the supervision of Mr.
Irshad and Mr. Adnan. The clearing process starts with the customer
submitting deposit slips and cheques in favoring the customers so the amount
is credit to his account after some banking process. There are four steps of
clearing:
Inter City Clearing
In inter-city there are around 20 to 21station nationwide which facilitate in
the intercity services. The cheque is sent in intercity clearing if the payee
account is in some other city. This process takes 3 to 4 working days and
the charges for intercity clearing is RS. 200 and FED RS. 32.
Same Day Clearing
The branches that are in 10 km range of NIFT can only avail this facility.
The minimum amount for this is Rs. 500000 and the bank charges are Rs.
348.
Normal Clearing
In this the customer has the cheque of another bank, so the cheque is sent
to that particular bank for verification through NIFT. This process takes 2
working days to clear the payment of the customer.
Collection Cheques (Cc)
The payer account is in the city where the intercity facility is not available
so the cheque is sent in CC where the cheque is directly sent to the
respective bank through NIFT. Bank charges for this RS. 100 minimum or
0.25% of the entire amount, 16% FED and postal charges RS. 75.
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5. Suggestions & Recommendations
5.1 SWOT Analysis
The overall evaluation of a companys strength, weakness, opportunities
and threats are called SWOT analysis.
Strength:
MCB is reputed as one of the soundest financial institution and as
one of the leading banks in Pakistan with a deposit base of PKR. 462
bln (apprx.) and total assets of PKR 605 bln (apprx.).
MCB has a largest network of over 1,130 branches and 600 ATMs
across Pakistan with a customer base of 4.5 million (apprx.)
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 Maybank of Malaysia which holds
20% shares in MCB through its wholly owned subsidiary Mayban
International Trust (Labuan) Berhad since 2008, has international
indirect regional presence in Dubai (UAE), Bahrain, Azerbaijan, Hong
Kong and Sri Lanka.
The bank has also been acknowledged though prestigious recognition
and awards by Euromoney, MMT, Asia Money, SAFA (SAARC), The
Asset and The Asian Banker.
MCB has captured majority of potential customers in Pakistan.
Meeting the challenges of latest Technology by introducing Smart card
remitexpress, mobile banking etc.
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Weakness:
Staff is overburdened with unproductivity tasks from the
management. One employee is performing four person tasks at a time.
Decision making process is very slow.
Most of the branches are computerized now; still not performing.
Opportunities:
The bank management should use the modern ways of
communicating with staff and staff in return to the customers, so that
flow of information leads to rapid and positive results.
The bank management should introduce various new courses for the
staff to keep them abreast.
The bank should enter into new market segments.
Increase the product range to meet the broader range of customers
needs.
Threats:
Government policies changing day by day and government stability is
not there.
Weak economic condition of Pakistan is producing hindrance in the
way to progress because people are not in good financial position to do
business themselves or to finance it from the banks.
Growing global technological advancements and adaptation of modern
style of management in banking sectors.
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5.2 Problem Identification
i. Shortage of Staff
Shortage of staff is the main problem in MCB. One employee handle 3 to 4
employees work at a time as a result:
Concentration lapses
Employees feel overburden
Employees fail to deliver the best customer service
Mistakes always happen.
ii. Staff is not adequately trained
The second main issue is staff in almost branches except Clifton Branch has
not adequately trained; even not aware about the innovative products like
home remittances is one of the most prominent issue for them to deal.
5.3 Suggestion for Improvements/ Solution
Recommendations
I have heard a policy from the staff that trainees and internees/else
are not allow to access system. I want to suggest you to please allow
trainees and internees to access system because it adds lot of
confidence in them to step in real-world.
There has to be a proper guideline for internees in terms of work detail
and with proper schedule.