Final Report - Faizan Idrees

Preface
It is the requirement of the MBA course, Comsat Institute of Information,

Technology Lahore that all students of MBA have to spend six or eight weeks
in any organization to get practical
exposure and to get familiarized with the ways to live in the organizational
environment which is dramatically different from the educational
environment. That two months period called
Internship Period , if spent properly and sincerely, enables the students to
be more confident, more knowledgeable, more responsible and, above all,
more committed to its work in the practical field. I have also been assigned
to do internship of six weeks period in MCB Ghalla Mandi branch
Bahawalnagar.
It has enabled me to understand the practical scenario and sharpen our
decision making power and utilizing the resources in an effective manner, so
that our resources generate maximum profit.
In preparing this report, I have put all of my best efforts and tried my level
best to give maximum knowledge. Despite of my all the coherent efforts, I do
believe that there will always be a room for improvement in the efforts of
learner like me.
Comsats Institute of Information Technology, Lahore
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Acknowledgement
Person is not a perfect in all the contexts of his life; He has a limited mind
and mind thinking approaches. It is the guidance from Almighty Allah that
shows the man light in the darkness and the person find his way in the light.
Without this helping light, person is nothing but a helpless creation.
The teaching of the Holy Prophet Muhammad (PBUH) were also the
continuous source of guidance for me especially his order of getting
knowledge and fulfilling once duty honestly was key motivation force for me.
With prayers of my parents and support of my teachers it became possible to

formulate this report. I pay high regards to them.
I am indebted to all the staff of MCB Bank Limited, Ghalla Mandi Branch
Bahawalnagar who appreciated all my work, supervised me, provided their
assistance to me when I needed and inculcated their knowledge in me.
Without their cooperation, I would never have been able to complete this
Internship contentedly and with pleasure.
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Table of Content
Preface....................................................................................................................... 1
Acknowledgement........................................................................................................... 2
Executive summary.................................................................................................... 5
Introduction of Sector....................................................................................................... 7
MCB BANK LIMITED................................................................................................ 8
Vision Statement............................................................................................... 9
Mission Statement............................................................................................ 9
Objectives of MCB............................................................................................. 9
Policies of MCB................................................................................................ 10
Core values of MCB......................................................................................... 10
Marketing Mix........................................................................................................... 11
1. Product Mix & Price of MCB Bank......................................................................12
2. Placing Strategy of MCB Bank...........................................................................16
3. Promotion strategy of MCB Bank.......................................................................17
FIELDS OF ACTIVITIES............................................................................................... 17
1.
Account Opening Department.........................................................................18
2.
Clearing department....................................................................................... 23
3.
Remittance Department...............................................................................25
3.
Advances Department.................................................................................... 27
5.
Cash Department............................................................................................ 30
6.
Technology Department................................................................................. 33
Personal Learning..................................................................................................... 35
Financial Statement Analysis.................................................................................... 37
1. Balance Sheet................................................................................................... 38
2. PROFIT & LOSS ACCOUNT.................................................................................. 41
3. Ratio analysis.................................................................................................... 43
SWOT ANALYSIS........................................................................................................ 47
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SEGGESTION............................................................................................................. 49
REFERENCES............................................................................................................ 51
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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. In1956, 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 Shah rah-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 from 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
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classified advances in to following types Agricultural Advances, Commercial

Advances.
Industrial Advances, Commercial Advances are of following types.
Demand Finance, Cash Finance, Foreign bills purchased, Finance against
imported goods, Finance against foreign bills, Export Refinance Part I (Pre Shipment)
& others. Banks Agriculture division deals with the agriculture advances. Bank
provides the Agriculture Advances in order to enhance and support the agriculture
sector of the country. Farm Credit & Non Farm Credit.
In foreign exchange, MCB is dealing Foreign Currency Accounts, Foreign
Remittances, and Foreign Bills for Collection, Imports & Exports.
Foreign currency accounts & the foreign currency department deals with the
following types of accounts, Dollar Khushali account, Current account, Saving bank
account, Term deposit, Prime Currency Scheme. Foreign accounts are convertible on
floating rate available to the bank. Letter Of Credit facility is being provided by MCB
in foreign exchange.
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Introduction of Sector
The word 'Bank' is said to have been derived from the words Bancus or
Banque or Bank. This history of banking is traced to as early as 2000 B.C. Banking
in fact is primitive as human society, for ever since man came to realize the
importance of money as a medium of exchange, the necessity of a controlling or
regulating agency or institution was naturally felt. The priests in Greece used to
keep money and valuables of the people in temples. These priests thus acted as
financial agents. The origin of banking is also traced to early goldsmiths.
They used to keep strong safes for storing the money and valuables of the
people. The first stage in the development of modern banking, thus, was the
accepting of deposits of cash from those persons who had surplus money with them
The goldsmiths used to issue receipts for the money deposited with them.
These receipts began to pass from hand to hand in settlement of transactions
because people had confidence in the integrity and solvency of goldsmiths. When it
was found that these receipts were fully accepted in payment of debts; then the
receipts were drawn in such a way that it entitled any holder to claim the specified
amount of money from goldsmiths. A depositor who is to make the payments may
now get the money in cash from goldsmiths or pay over the receipt to the creditor.
These receipts were the earlier bank notes. The second stage in the development of
banking thus was the issue of bank notes.
The goldsmiths soon discovered that all the people who had deposited money
with them do not come to withdraw their funds in cash. They found that only a few
persons presented the receipts for encashment during a given period of time. They
also found that most of the money deposited with them was lying idle. At the same
time; they found that they were being constantly requested for loan on good
security. They thought it profitable to lend at least some of the money deposited
with them to the needy persons. This proved a profitable business for the
goldsmiths. They instead of charging safe keeping charges from the depositors
began to give them interest on the money deposited with them. This was the third
stage in the development of banking.
The banking structure in Pakistan comprises of the following types.
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State Bank of Pakistan

Commercial Bank of Pakistan
Saving banks.
Cooperative banks
Specialized credit institution
All these commercial banks were nationalized in January 1, 1974, and were
recognized and merged into the following five banks:
National Bank of Pakistan

MCB bank limited
Habib Bank Limited
United Bank Limited
Allied Bank of Pakistan
The Government of Pakistan in the late 90s introducing the need for the
privatization of state owned banks and companies. The private sector has accepted
the challenge and most of the banks are privatized today. 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. Throughout the period of
banking history the banks have been expanding rapidly and achieved the desired
goal of progress.
MCB BANK LIMITED
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.
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
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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.
MCB is Pakistans largest bank by market share 18% its assets are of PKR 605
bin in 2011, and the largest by market capitalization having a market capitalization
of US$ 1.8 billion. The Bank has a customer base of approximately 4.5 million and a
nationwide distribution network of 1,130 branches, including 8 Islamic banking
branches, and over 600 ATMs, in a market with a population of over 160 million.
(July 2011 record).
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.
Objectives of MCB
MCB as being privately owned, the primary objective is maximum net profit,
growth of business and to capture maximum potential market. The operating results
of MCB shows an impressive improvement compared to the last financial year and
the improving return on assets indicate the increasing operational and
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administrative efficiency, just because MCB is continually achieving its objectives.

These objectives are:
Delivering remarkable returns to stakeholders, sustainable performance,
exceeding market and shareholder expectations
Providing value added services through operational expansion, geography
and upgraded systems
Building a corporate culture of equality, trust and team spirit as we remain
dedicated to be a socially responsible organization
Improved customer services
Effective ues of electronic media.
Decentralization of authority.
Enlightened personal policies.
Modernization of branches.
Launching of new product.
Effective staff motivation policies.
Policies of MCB
MCB Bank since its establishment in 1947 has been providing excellent services
all because of the strengthened policies and strategies set out by its Broad and
Management, these policies cover all grounds of good banking, following is the road
map to their success:
Customer satisfaction will always remain the number one benchmark; the
aim is to maximize value for clients by offering high quality financial solutions
that best meet their current needs and long-term goals.
Bank is continuously looking for expansion in terms of deposits so highly
dedicated Business development Officers (B.D.Os) is being hired.
To maintain sufficient resources over a long period of time and utilize them in
productive way. This can be done through Liquidity Management and Credit
Risk Management.
To promote strong and ethical business practices in the industry by focusing
more on effective collaboration with stakeholders.
The corporate policy focuses on striking the optimum balance in
organizational workflows and processes.
The policies include; employ and retain an unparalleled workforce of highly
motivated, energetic, well-trained and productive employees, and offer them
an inspiring work environment, competitive salaries, excellent benefits and
caring leadership.
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MCB Bank is committed to the personal welfare and professional

development of all team members and sharing expertise and operational
excellence across the groups.
The Bank is fully aware that branch network has direct impact on the
business so; an intensive branch network will be established all around the
Country.
Core values of MCB

These values and business principles provide the framework within which
they carry out their operations, abides by;
INTEGRIY
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
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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.
Marketing Mix
Marketing is the task of creating, promoting and delivering goods and
services to consumers and businesses. Organizations identify and profile distinct
group of buyers who might prefer or require varying products and marketing mixes.
The customer seeks for value and satisfaction. The organizations can increase the
value of the customer offering in several ways e.g. raising benefits, reducing costs
etc. marketing mix is a set of marketing tools that the firm uses to pursue its
marketing objectives in the target market. These marketing tools are known as 4 ps
of marketing. These four marketing tools are viewed as 4cs by the consumers.
Product
Price
Place
Promotion
Customer solution
Cost for customer
Convenience
Communication
To identify the customer needs and fulfilling hem is the basic objective of an
organization. Marketing is not just satisfying your customers, you have to delight
them and this can be done by acting upon this phrase.
Under Promise and Over Deliver
MCB Bank provides a winning combination of products and services to its
prime customers. It is one of the countrys leading commercial banks, which
ensures complete security, and reliability in all-financial transactions.
1. Product Mix & Price of MCB

MCB Rupee Traveler cheque
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MCB Rupee Travelers Cheques are as good as cash, in fact better. Better
because with Rupee Travelers Cheques you have the power to purchase and a
feeling of security that should you lose them, you will get a refund.MCB Rupee
Travelers Cheques are accepted at major shops, travel agents, hotels, business
establishments and MCB branches all over Pakistan. You don't have to be an MCB
account holder to buy the Rupee Traveler Cheques. Anybody can purchase them. It's
a safe and convenient way to conduct everyday business. At a time when thefts and
robberies are on the increase, you are better off carrying Travelers Cheques rather
than money.
Mahnama Khushali Scheme

A 5- year fixed Deposit Scheme, targeted to persons with small savings who
would desire a regular monthly return on their investment.
Salient Features
Minimum amount of investment shall be Rs.0.010m and the maximum
amount of investment would be Rs. 1.000m.
Khushali Certificates can be purchased by individuals (singly or jointly) or by
the Proprietorship/Partnership concerns or Companies, etc. in their name
The Khushali Certificate will be of five years maturity.
The interim rate of profit offered will be minimum 1% per month. If the profit
declared by the bank is higher, additional profit will be paid.
Zakat will be deducted wherever applicable on yearly basis whether you will
be receiving your profit or encashing your certificates.
As per Government Directions, tax on the profit / return is o be deducted by
MCB branches at the time of payment
MCB Khushali Bachat Account

Salient Features
8% rate of return per annum.

Returns calculated on daily.
Average balance and paid half yearly.
Introduced first time in Pakistan.
The facility of helping account holders pays utility bills (electricity, telephone
and gas) through their account. No queues. No delays
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Prime Currency Account Scheme

Launched to attract deposits in foreign currencies. US Dollars, Pound Sterling, Euro
and Japanese Yen.
Salient Features
Owing foreign currency account under the Prime Currency Scheme allows you
to earn attractive rates of interest in foreign currency.
You have a choice between opening this account in your personal name and
opening it under joint names.
Whether you are a resident or a non-resident Pakistan, MCB Prime Currency
Scheme invites all to operate a foreign currency account.
Foreign nationals and foreign companies can also open a foreign currency
account under the Prime Currency Scheme.
Your foreign currency account can be opened in four global currencies: The
United States Dollar, the Pound Sterling, the Japanese Yen and the Euro.
Travelers Cheques and Foreign Currency Notes can also be issued to holders
of personal and Joint accounts.
Rupee Loan facility will also available against this account.
You can draw any amount of foreign exchange from your foreign currency
account and transfer or remit the amount freely to any part of the world
without any restrictions.
The restrictions imposed by the State of Pakistan for the opening of foreign
currency accounts in case of passport; Work-permit and resident Visa have
been withdrawn. Your account will be restriction free.
The Prime Currency Scheme is exempt from all forms of taxes including
Income Tax, Wealth Tax and Zakat deductions.
MCB Prime Currency Scheme is a world in itself
Hajj Mubarak Scheme

A saving scheme, of 2/3 years duration, for the convenience of persons, with
a limited income, who desire to perform Hajj, was introduced. Under the 2 years
scheme, a monthly deposit of Rs.2800 is required, whereas under the 3 years
scheme, the required monthly deposit is only Rs.2200.
Capital Growth Certificate Scheme

For long term depositors under which the amount deposited almost doubles
at the end of 5 years. For the scheme, the minimum amount of deposits is Rs.
100000 while there is no maximum limit. In case of premature encashment of the
certificate, the depositor will profit at the same rates as that of PL Saving Account.
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MCB Mobile Banking

At the forefront of technological excellence, MCB proudly introduces MCB
MOBILE BANKING*. The convenience of accessing account balance information and
mini statements whenever want or wherever may need them, with comfort and
peace of mind.MCB Mobile Banking service is available to all MCB ATM cardholders,
24 hours - 365 days.
MCB Islamic Banking Services

Islamic banking services through exclusive units/branches offering a range of
liability and asset based Shari compliant products like Musharika, Murabaha, and
Ijara and is tasana.
MCB Smart Card

MCB now brings you MCB Smart Card-a secure and convenient instrument of
payment with unmatched functionalities. It provides 24-hourdirect access to your
bank account the convenience and flexibility of MCB Smart Card will help live a
smarter life. It not only helps you manage your expenses, but also avoids undue
interest on your day to day credit card transactions. Your balance is always within
your reach and you spendaccordingly.MCB is the only bank to introduce a debit card
that gives the option to choose from domestic and international card for local and
global usage respectively.
Fund Management Scheme

This scheme is offered to corporate and customers and is aimed at providing
better rate of return up to 15% per annum. One of the objectives of the scheme is to
develop secondary market for Government Securities.
Consultancy Services
In the process of privatization of public sector units, prospective buyers need
professional assistance and MCB, with its expertise, offers to them specialized
service for valuation of the market value of the industrial unit, preparing bid
documents and ranging finance for the purchase of the unit.
Self Supporting Scheme

For the benefits of genuine worker/borrowers who are poor and needy and for
small entrepreneur the bank as evolved a self supporting scheme: maximum
amount of loan Rs.25000 and minimum Rs.5000 per individual. Loan will be totally
free of mark-up.
Fax Press
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This product was first of its kind introduced by using modem technology of
The Fax Machine. It facilitates speedy transfer of funds within Pakistan.
Utility Bill Collection

With the aim of extending this service to wider range of customers, the
number of MCB branches collecting Utility Bills more than 900.
MCB Car Cash

Car financing and leasing at competitive rates with flexible options Car cash
finances both semi-commercial and non-commercial vehicles for personal and
business use.
MCB Locker
The best protection for your valuables. Lockers of different capacities are
available nationwide.
MCB Master Card

THE FUTURE OF MONEY Since the beginning of time, people have tried to find
more convenient ways to pay, from gold to paper money and checks. Today, money
is moving away from distinct hard currencies and towards universal payment
products that transcend national borders, time zones, and, with the Internet, even
physical space. Plastic or "virtual" money, credit, debit, and electronic cash
products, inevitably will displace cash and checks as the money of the future.
MasterCard International has expanded globally in more locations in the world than
any other card. The card was introduced by MCB Bank Limited in 1995 and now
offers card members over15 million outlets in 232 countries.
Remit Express
Fastest to Pakistan. Anywhere in Pakistan.
The fastest way of getting your money across to Pakistan. Remit Express offers low
cost remittance from U.A.E. and Saudi Arabia .Your relatives, friends or business
associates receive draft within 72 hours. MCB Remit Express has been specifically
designed to meet the needs of the expatriate Pakistani community residing in the
Gulf countries.
Easy Personal Loan

Helping You Do More
MCB Easy Personal Loan provides you with the financial advantage to do
things you've always wanted to but never had the sufficient funds for. Take that
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much-needed holiday. Buy a car. Refurnish your house. Purchase a new TV. Finance
a better education for your children.
MCB Pyara Ghar

MCB gives dream home at the lowest and best possible mark-up rates. You
can choose either one of our two mark-up rate options- fixed or variable. Early
repayment option tailor-made to allow making partial prepayments at dates that
suit.
MCB Virtual
MCB Virtual provides the continence of banking on internet. Whether at office
or home or traveling. Log on at www.mcb.com.pk and enjoy24 hours access of all
your accounts for the largest array of service.
2. Placing Strategy of MCB Bank

The location of the bank plays a vital role in making its operations profitable.
If the bank is located in some business center then it will be very easy for it to
attract business people as its customers. Therefore MCB has most of its branches at
places where it can reach its targets customer easily.
3. Promotion strategy of MCB bank

MCB Bank is actively participating in promotion of its products and services
through advertisement and other promotional schemes. Initially, the bank focused
on the upper class customer sonly and offered products for a limited class of
people. But now the strategy has been changed and the bank is now targeting the
middle market also. The products offered are of diverse nature to cater the needs of
maximum number of people.
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FIELDS OF ACTIVITIES
The purpose of banks is to provide some services to the general public. And for
this purpose different banks provide different services to the people in different
forms. The MCB Bank is a commercial bank, in modern time commercial banks play
a very important role and their functions are manifold. The main functions and
services which MCB Bank Limited provides to different peoples are as follows.
Open Different accounts for different peoples

Accepting various types of deposits
Accepting various types of deposits
Granting loans & advances
Undertaking of agency services and also general utility functions, few of those are,
as under;
Collecting cheques and bill of exchange for the customers.
Collecting interest due, dividend, pensions and other sum due to
customers
Transfer of money from place to place.
Acting an executor, trustee or attorney for the customers, Providing
safe custody and facilities to keep jewellery, documents or securities
Issuing of travelers cheques and letters of credit to give credit
facilities to travel.
Accepting bills of exchange on behalf of customers.
Purchasing shares for the customer
Undertaking foreign exchange business.
Furnishing trade information and tendering advice to customers.
For proper functioning of branches and the overall bank has been divided in
different departments. These departments handle different jobs so that division
of work is there for improvement of functions and also it is easy to control the
situation. The general division in a branch is as follows:
1. Account Opening Department

Account opening and closing is the function of accounts departments.
Account opening department is the most important department in any
commercial bank's operations. The reason is that it serves as a first step in
establishing customer-bank relationship. The main objective of any bank is to
attract as many new accounts and deposits as possible. In order to fulfill this
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objective the first step is the opening of new accounts and maintaining the
existing ones. The department of account opening is the major source of doing
so.
BASICS TO OPEN AN ACCOUNT
INTRODUCTION AND PRELIMINARY INVESTIGATION
Before opening an account MCB as like the other banks in Pakistan as certain
whether or not the person who is going to open the account is a desirable
customer or not. Then MCB determine the prospective customers integrity,
respectability, occupation and the nature of business by the introductory
references given at the time of account opening. Negligence in this informal
preliminary investigation may result in serious consequences not only for the
banker concerned directly but also for other bankers and the general public who
may be affected indirectly.
In order to further strengthen and streamline this process, the Federal
Ombudsman of Pakistan, vide his ruling on complaint no. II/31/5186, has directed
the banks to retain with the account opening form a Photostat copy each of the
National Identity Cards of the person desiring to open an account as well as that
of the introducer. As per these directions, the concerned Branch Managers are
required to obtain the original National Identity Cards along with their Photostat
copies and then return the original after attesting the authenticity of the retained
copy.
Preliminary investigation is necessary because of the following reasons:

Avoid Frauds:
If a banker does not make the necessary inquiries mentioned above he may
enabled is honest persons to possess cheque books for fraudulent purposes. If
any such person happens to be an undercharged bankrupt, the banker might be
placed in an awkward position for having allowed such a person to open and
open a bank account.
Safeguard against unintended overdrafts:
Sometimes due to a mistake an account may be given an overdraft, For
instance, the ledger keeper, misreading the balance of an account honors a
cheque for an amount larger than the balance. Similarly a credit entry belonging
to a customer may be made by mistake in another customers account. In such
situations the excess amount withdrawn by the customer can only be realized if
the customer is a respectable person.
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Inquiries about clients:

Being a banker MCB has a business obligation to respond to inquiries from
other banks etc. about his customers financial position. Though the banker gives
only a general ideal about the financial standing of his customer.
Specimen Signature;
When an account is opened with MCB customer provides to the bank a
specimen of the form of signature which would appear on all his cheques to
express his authority for the payment of cheques drawn on his banker. This
specimen is taken generally on a card specially designed for this purpose, and
rule for the customers, full name, and account number are entered on it.
If the bank has reasons to doubt the genuineness of a signature, he should
either get it confirmed for his satisfaction or return the cheque with the remark
Signature differs. If the signature of the customer is forged the banker cannot
escape his liability because he has actually acted on his customers mandate.
HOW TO OPEN AN ACCOUNT (GENERAL)
Before opening an account in MCB the following points must be considered in
this regard.
Another account holder of the bank should properly introduce the new
customer.
The account holder should sign the account opening form in the presence
of bank officer and the signature is duly verified.
A copy of identity Card is required by Bank.
Against submission of the Banks prescribed application form, duly
introduced in the manner provided and on supplying such document, as
may be required and account may be opened. The Bank reserves to itself
the right to refuse to open an account without assigning any reason.
Each account shall be allotted a distinct number that is to be quoted in all
correspondence with the bank relation to the account.
Minimum amount for opening and continued maintenance of various types
of accounts is as follows:
Saving
Current
10000
10000
The bank reserves the right to change the above mentioned minimum
balance requirement at any time without any notice.
PROCEDURE TO OPEN AN ACCOUNT
When a customer wants to open an account, the bank officer gives him an
application form. All information, which is necessary to be known by the bank, are
requirements of the application form. Form also requires the essential documents to
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be attached by the customer. Basically following information is required to open an

account with MCB.
Title of Account
Full Name of Applicant
Occupation
Address
Telephone No.
Currency of account
Nature of Business
Introducers Name, Address & Signatures
Special instruction regarding the account
Initial Amount of the Deposit
Signature of the applicant
DOCUMENTS TO BE ATTACHED
Further I learned that if you wanted to open an account with MCB then you
should attach the following documents with your application form which are
different for different categories.
SOLE PROPRIETORS ACCOUNT
In order to open an account with MCB Sole Proprietors have to submit their
business registration certificate number.
PRIVATE / JOINT ACCOUTS
For individual or private or joint accounts National Identity Card is required.
JOINT STOCK COMPANY
Before an account of a Public Limited Company is opened MCB must ask the
person authorized to do so to submit the certified copies or the following
documents;
Certified true copy of the Memorandum and Articles of Association of the
company.
Certified true copy of the resolution of the board of directors / managing
committee / governing body regarding conduct of the account.
Certified list containing names and signatures of the directors / office
bearers.
Certified true copy of the certificate of incorporation or registration.
Certified true copy of the certificate of commencement of business (in
case of public limited companies).
Balance Sheet
I.D. Card copy of each director
Page 21
Original is also enclosed for inspection and return

List of persons authorized to operate the account.
Power of Attorney in favor of the person opening account.
PARTNERSHIP FIRM ACCOUNT
Information which is required to be submitted to MCB by a partnership firm in
this case is as follows:
Full Names
Address
Specimen of signatures of the partners
Certified true copy of partnership deed
Registration No. if the Partnership is registered.
SOCIETIES / CLUBS AND ASSOCIATIONS ACCOUNT

MCB is authorized to open the accounts of the societies/clubs and
associations, These are non-trading organizations, formed for the promotion of
culture, science, education, recreational activities and charitable purposes etc.
some of these institution are registered under the Societies Registration Act, 1866,
and are issued a certificate of registration after they have been found fit for
registration.
ISSUANCE OF CHEQUE BOOK
When a customer opens an account with the bank, he is provided with
cheque book for withdrawals from account. However, the first cheque book is given
to the customer only when all the required documents are checked. A cheque book
contains ten, twenty five, fifty or hundred leaves.
The cheque book also carries a requisition slip for the issuance of the new
cheque book .This slip is duly filled and signed by the customer. The signature of
the customer is verified by the bank and new cheque book is issued to the customer
and serial numbers of the cheque are duly entered in the book of the bank. Along
with the signature, person should also write his full name & address. Usually only
one cheque book is issued at a time, however big concerns who need a number of
cheque books at a time, may ask the bank to stock as number of cheque books in
their name and to point their name on these cheque books.
The officer keeps and maintains the cheque book register Cheque book
inventory and cheque books issued are recorded in this register cheque book is
issued at a time, however big concerns who need a number of cheque books at a
time, may ask the bank to stock as number of cheque books in their name and to
point their name on these cheque books.
Page 22
The officer keeps and maintains the cheque book register Cheque
inventory and cheque books issued are recorded in this register.
book
In case of loss of cheque book or requisition slip on cheque book the

customer has to fill the Form No. 216-B to obtain a new cheque book.
2. Clearing department
Every banker acts both as a paying as well as a collecting banker, It is however
an important function of crossed cheques. A large part of this work is carried out
through the bankers clearing house.
A clearing house is a place where representative of all banks of the city get together
and settle the receipts and payment of cheques drawn on each other. As the
collecting banker runs certain risks in receipt of their ownership the law has
provided certain protections to the banks.
Page 23
The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a cheque or
draft may cross the instrument generally or specially. It further lies down that a
crossed cheque can only be paid to a banker, who collects it for a customer in good
faith and without negligence.
Types of Cheques
Transfer cheques:
Are those cheques, which are collected and paid by the same branch of bank.
Transfer delivery cheques:

Are those cheques, which are collected and paid by two different branches of
the same bank, situated in the same city.
Clearing cheques:
Are those cheques, which are drawn on the branches of some other bank of
the same city or of the same area, which is covered by a particular clearing house.
Collection cheques:
Are those cheques, which are drawn on the branches of either the same bank
or of another bank, but those branches, are not in the same city or they are not the
members of clearing house.
PROCESSING OF OUTWARD CLEARING (Collections)

Cheques are received from the clients. These cheques are received along
with a deposit slip. One part of the deposit slip is returned to the customer with a
clearing stamp on it. The date of clearing is one day ahead of the current day,
because it takes one day for a cheque to get clearance.
The cheques are then sort out as local and outstation. The details of
cheque i.e. the amount, cheque number, the account number and the name of
Drawee bank are entered. These cheques are then prepared to be sent to
clearing house. A slip and a sheet are along with the cheques to ensure that all
cheques are being entered and sent.
the
the
the
the
PROCESSING OF INWARD CLEARING (Payments):

Exchange and settlement of cheques and other instruments is done in the
clearing house. These cheques are received and then sort out. The process of
Page 24
sorting out includes checking of all the necessary and required particulars. The
signatures are also verified.
PROCESSING OF RETURN CLEARING:

If there is any particular missing in the cheques, then these are returned back
to the clearing house along with the memo.
PROCESSING OF CHEQUES RETURNED:

The cheques of the customers that are being returned by the Drawee banks due to
any reason stated in the cheque returning memo are given back to the presenting
back in the clearing house. These cheques are returned to the customers.
3. Remittance Department
Remittance department performs following functions:

Mail Transfer (MT)
Page 25
Telegraphic Transfer (TT)

Demand Drafts (DD)
MAIL TRANSFER (MT)

When a customer requests the bank to transfer his money from one branch of
bank to another branch of the same bank or from one city to another city to the
same bank or any other bank. Customer fills the form given by bank. If the
customer has an account with that amount as mentioned in the application form
then concerned officer will undertake the following procedure to make the mail
transfer complete.
1. Branch Mail transfer form
2. Receiving Branch Register copy
3. Issuing branch register Copy
4. Beneficiary advice
5. Advice to customer
In case where the customer is not account holder of the bank then the
customer will have to deposit the amount which he wants to transfer under Mail.
Then the above said procedure will be done.
TELEGRAPHIC TRANSFER (TT)

This type of transfer is simple. After filling the application form the concerning
officer shall fill the telegraphic transfer form. Then it is sent to the required bank
which on receiving it immediately makes the payment to the customer and after
wards the voucher are sent to that bank by ordinary mail.
DEMAND DRAFT (DD)

Demand draft is just like cheques and issued when the customer wants to
take cash with him personally. The idea behind is to avoid the risk and burden of
currency notes in huge quantity. Demand draft can easily be handled whatever
amount it has and the money can easily be taken from the bank when it is
presented. In fact, the bank persuades the customer to transfer money by drafts
and avoid the risk of frauds involves in MT and T.T. Draft is only issued when the
bank knows customer and bank has the confidence in him.
In case of transfer of money by drafts, the customer has to fill an application
form. Then the concerned officer fills the following forms:
Customers advice
Page 26
Customers debit form

Register copy
Cover Advice
FOREIGN DEMAND DRAFT

Foreign Demand Draft is just like demand draft. The only difference is that a
bank issues FDD to the bank of another country. It requires foreign exchange and it
involves seven forms, which are to be filled.
PAY ORDER
Pay order is meant for banks own payments but in practice these are also
issued to our customer for making payments.
A pay order is written authorization for payment, made in a receipt form
issued and payable by the bank, to the person named and addressed therein
on his giving a proper discharge thereon.
It is issued by and drawn upon and payable by the same branch of the bank.
It is neither transferable nor negotiable and as such it is payable to the payee
named therein.
Pay order cannot be issued to a minor. Some time bank dont want to give its
deposits to customer. So in that case pay order is given to that customer and
he can use it for making payments. When customer wants to cash the pay
order then the amount of the pay order will be debited from the bank. If pay
order submitted to other bank like ABL, BAL then the process of clearing will
be adopt.
3. Advances Department
Page 27
Advances are the most important source of earning for the banks. MCB is also
giving full attention towards this aspect and it is also obvious from the growing
portfolio of advances and from very low delinquency rate. The credit portfolio of this
institution is in a very much better shape than other financial institutions of Pakistan
and the credit goes to the management and the staff who are concerned about the
quantity and quality as well.
Loans
Cash Credits
Overdraft
LOANS
Loans are monetary assistance by a financial institution to a business,
individual etc. The loans are granted by the bank in lump sum, so these types called
fixed or demand loans. Interest is charged on the whole amount of a fixed loan. The
borrower withdraws whole the amount of loan. This type of loan is normally granted
against security of gold documents. In case of demand loans against gold or
documents, a demand promissory note for the amount of loan is taken from the
borrower loans are granted under;
LOAN AGAINST GOLD
Under this type of loan, which is granted to the borrower the Head Cashier
estimates the value of Gold or Gold ornaments through an agent (Gold smith) and
keeps a margin of 40 to 50 percent. After the opening the gold loan account a token
is given to the borrower, which is a bank receipt. On repayment of loan, the gold or
ornaments held as security for it, together with the demand promissory note duly
discharged is returned to the borrower and his receipt for the gold ornament taken
in the demand loan ledger.
This receipts states that he ornaments returned are complete and in order.
Part delivery of ornaments is given against part payment of a loan but care is taken
that the ornaments still in banks possession fully covers the balance of the loan
outstanding. The interest gold loan is to be applied with quarterly.
LOAN AGAINST PLEDGE OF STOCKS

In case of advancing such types of loans, the following precautions are kept in the
mind:
Stock pledged must be readily saleable
Products should be readily saleable
Advance should be within the borrows means.
Page 28
REQUIREMENTS OF LOAN
For granting loan to any party or individual, the bank checks following particulars of
the client:
Credibility
Feasibility Report
By Credibility, bank Judges the credibility of the client by his past bank record, CBI
report etc. it is very important in making decision about giving him loan.
Feasibility report is on the running or proposed business of the client. The report
enables the bank to judge the likely return of the business.
The following documentation is made for loan
An application or request letter for loan by the customer

Legal opinion of the legal advisor of the bank (for the title deeds)
Consent letter from the regional office
Vetting Certificate (includes consent No., Facility whether fund based or nofund based, addresses etc.
Valuation of property any consultant or any panel of consultants approved by
State Bank of Pakistan
Original title deed or sale deed
Affidavit
General power of attorney (made by advocate for the person/owner taking
loan for the company)
Mortgage deed
Mutation document made
Verification of the property by the bank from the competent authority
Hypothecation of stock certificate (Running is to be given against 75% margin
of stock)
IB-25R Letter of hypothecation (duly signed by the party)
IB-12 , DP Note/Promissory Note (Bank prepared itself, duly signed by the
party, revenue stamps of Rs. 100 put on it)
IB-6R Agreement of finance mark up (Contract with party for taking mark up
on quarterly basis)
IB-24 (used for title deed)
IB-29 (used for guarantee from party)
IB-26 (used for pledge of stock, margin is different for different goods)
No. IB-28 (used for lien) etc.
After that Loan is sanctioned to the party fulfilling all the terms and conditions for
the purpose. The procedure given above is for both short and long term loans.
Page 29
SECURITIES HELD AGAINST FINANCING
FOR RUNNING FINANCE

Hypothecation of Stocks (50% Margin) Collateral security (house, land, factory etc..
FOR CASH FINANCE
Pledge of stocks (20 to 25% Margin) Collateral security (house, land, factory etc...)
CASH CREDIT
Such cash account is opened in the name of the customer who borrows from
the bank. Customer is granted a loan up to a certain limit, sanctioned by the head
office, from which he can draw when he requires and interest is charged on the
amount actually utilized by the customer. In order to avoid the danger of idle fund,
the bank charges a certain rate of interest, even if the customer does not withdraw
any amount. The rate charged by the bank on cash credit in 46 paisa per thousand
on daily basis.
5. Cash Department
Page 30
The following books are maintained in the Cash Department:
Receiving Cash Book

Paying Cash Book
Token Book
Scroll Book
Cash Balance Book When cash is received in counter, it is entered in the Scroll
Book and Receiving Cashier Book. At the close of the day, these are balanced with
each other. When the cheque or any negotiable instrument is presented at counter
for payment, it is entered in the token book and token is issued to the customer. The
token clerk and the Cashier make entries in the paying book and payment is made
to payee. At the close of day, the Token Book and Paying Cashier Book are balanced.
The consolidated figure of receipt and payment of cash is entered in the cash
balance book and drawn closing balance of cash.
Opening Balance + Receipts - Payments = closing Balance.
This is very important department because cash is the most liquid asset and
mostly frauds are made in this department, therefore, extra care is taken in this
department and nobody is allowed to enter or leave the area freely. Mostly, cash
area is grilled and its door is under supervision of the head of that department. All
the books maintained in this department are checked by an officer.
Stop Payment
The department also makes arrangements for stop payment of cheques on
the request of the client. The request of stop payment is made in the
following case
The cheque has been stolen or lost
To cancel the cheque, which has already been written out, and handle to the
counterpart, and the client will request the bank not to make the payment if
presented.
DEPOSIT DEPARTMENT
Bank deals in money and they are merely mobilizing funds within the
economy. They borrow from one person and lend to another, the difference between
the rate of borrowing lending forms their spread or gross profit. Therefore we can
rightly state that deposits are the blood of the bank which causes the body of an
institution to get to work. These deposits are liability of the bank so from point of
view of bank we can refer to them as liabilities.
The total deposits of MCB are growing since its inauguration but after
privatization there is a sharp incline in over all deposits of the bank. The increase in
Page 31
deposits is also a cause of increase on total number of accounts; bank has

progressed in both aspects.
TYPES OF DEPOSITS
Deposits can be segregated on two bases, one is the duration in which there
funds are expected to be with the bank and second is the cost of getting these
funds. So divide deposits in two classes according to duration of deposits i.e.
Time deposits / liabilities
Demand deposits / liabilities And on the basis of the cost to acquire
These funds, a deposit can be classified as any one of following four,
High Cost Medium Cost, Low Cost No Cost.
Banks has different kinds of deposit schemes in order to induced posits. These
schemes are a mixture of the above mentioned two types of deposits with an
addition of different services &requirements such as minimum balance'
requirement, mode of transaction, basis for calculation of profit, deductions,
additional benefits, eligibility for different groups.
In the similar fashion, MCB has a large variety of deposit schemes and some of them are
as follows:
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.10000/-.
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 ACCOUNT
This type of account is for those persons who want to make small savings.
This type of account is opened with a minimum deposit of Rs.10000/-. Under this
scheme deposits can be made only up to a-costing amount and withdrawals are
allowed twice a week or 8 times a month. If a big amount is required a seven days
notice is required before the withdrawal. The profit is paid on these accounts on the
minimum balance during a month for the whole of that month. Zakat & other
withholding taxes are deducted as per rules of the government.
Page 32
KHUSHALI BACHAT ACCOUNT

This is an advance form of PLS saving a/c, in this type of account. The
minimum balance requirement for this type is Rs. 10000/-.There is also restriction
on the number of withdrawals as well,i.e. up to 4 times in a calendar month. For
maintaining this extra balance the customer gets the benefits of profit calculation
on daily product basis and also free service of standing instructions of paying utility
bills and HBFC installments. All other rules of saving account are applicable.
PLS 365 GOLD
This is a special type of saving account in which customer maintains a
minimum balance of Rs. 300,000- and in turn he gets the benefits of daily profit
calculations and also there is no restriction on the maximum number of withdrawals
as was there in the case of KBA. There is also another advantage of this scheme
that if balance on a particular day falls below the minimum balance then only the
product of that day is ignored whereas in KBA, if balance falls below the minimum
limit then all the products for that month are ignored on in other words no profit is
paid for that month.
Khaunm Bachat Scheme
This is a type of term deposit, in this type of deposit an account is deposited
and monthly payments of Rs. 1000/- are made by the account holder in this account
for a minimum of 10 years. After the expiry of term, he receives his funds along with
profit for the tenor. The distinctive feature of this product is that profit is calculated
on monthly basis and charged to account on end of each half /ear.
Then profit is also calculated on that amount of profit which is credited to the
customer's account. So we can say that in this type of account there is a concept of
accumulated profits on profit. This ends in getting a heavy return for the depositor
at the end of tenor for his small savings. This product was actually introduced to
promote saving habits in the people. Zakat and wit holding taxes are deducted as
per rules only at the time of maturity while making payment to the customer.
Term Deposits Receipts
This is a type of term deposit in which a receipt is issued for varying tenors
ranging from 1 month to 5 years or more. These are in the form of receipts and
profit on these receipts is paid biannually. These receipts are encashable after
expiry of the period for which they were issued. Different profit rates are applied to
different type of TDRs.
Page 33
6. Technology Department
Technological advancements are also affecting the banking industry. The

foreign banks have a competitive edge over all local banks in their technologies'
advancements and automated systems. Local banks have also realized the gravity
oil this situation and are striving to add computerized systems to their branches.
MCB is ahead of all other local banks in this field and now it is in a position to
even compete with foreign banks. There are more than 1045 branches of MCB all
over Pakistan and out of these more than 300 branches are fully computerized
Almost all the branches of big cities are computerized; therefore, the need for a
technology department at each branch is growing. Now a day, a computer division
is working in each city to provide service to and the branches of that area.
MCB has also introduced the now concept of online banking. There are now
more than 250 branches linked through this system and they can transact with each
other directly using computer systems at their own branches. Now customers do not
have to wait long for their transactions and can operate their account through all
the online branches.
ATM NETWORK
ATM stands for Automatic Teller Machine. This machine is used to transact in
one's account without intervention of humans. These machines are basically used
for taking cash, confirming balances and requesting statements / 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. This
network covers more than the 27 cities of Pakistan including the provincial capitals
and large commercial cities of the country.
ATMs are operated through a card issued to the valued customers and by
application of Personal Identification Number (PIN number). A person can withdraw
from any machine across Pakistan with having an account in only one branch of
MCB. This was only possible with the help of online system. In this system all the
machines are linked to central banking host at IRM division Karachi through either
satellite or telephone controller. This system identifies the card holder and his PIN
Number.
Page 34
Now MCB has also entered into a contract with Cirrus which is a subsidiary of
MasterCard. This contract will enable an ATM cardholder 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.
Page 35
Personal Learning
In this 6 weeks period, at Muslim Commercial Bank Limited, I have gone

through all the departments and tried to understand and learn the process of all the
activities.
Week # 1
ASSALAM O ALAIKUM SIR, as I was supposed to keep u in touch with my weekly
progress of internship. I m designated at MCB Bank Limited. During this week I
worked with CSO (Customer Service Officer) and I perform the following activities.
Maintenance of account opening register and folder
I have also learnt how to open an account, document necessary for account
opening.
Phone banking i.e. informs callers about their current position.
Attend the phone calls.
Attend the customer inquiries.
Filling deposit slips.
Received ATM forms.
Received and entered daily DAK.
Issued balance certificate and bank statement.
Made charges voucher for TT / DD/ and PO.
Made CCs (cheque collection)
Week # 2
progress of internship. I m designated at MCB Bank Limited. In the second week I
posted at Clearing department. And I learnt and perform the following activities.
Page 36
Counting of the total no. of cheques presented for clearing.

Sent those cheques to the area office for clearing.
Checks the stamping on cleared cheque and enter those cheques in record.
Issuance of local DD and Pay order.
To fill incomplete documents.
Made entries in the day book.
Made the entries against intercity received cheques.
Learn how to make cancellation entries in case of any discrepancy.
Procedure of cancellation of cheques.
Week # 3
progress of internship. I m designated at MCB Bank Limited. The whole week I was
posted at Remittance department. And I learnt and perform the following activities.
Maintenance of Remittance registers.
To check the folder consisting of inward and outward remittances and
telegraphic transfer.
Learned about payment against PP & DD received from other branches.
Learn how to issue a PP & DD.
Made credit and debit vouchers (contra) against TT, PP & DD.
Made incoming and out coming TT.
Learned basics of remittance software system
Learned about stamps used in TT, PP & DD.
Issued credit advice against the DD.
Learned how to make cancellation entries in the remittance software system
in case of any discrepancy.
Learn how to cancel a DD.
Made entries in the day book.
Made enter branch credit advice against the cheques.
Week # 4
progress of internship. I m designated at MCB Bank Limited. The week four was very
interesting. The whole week I spent with operation manager. And learnt about what
function performed by operation manager. During the whole internship I touch with
operation manager and see multiple tasks that he was performing.
Check the activities performing in different departments.
Handing all the issues regarding any mishaps in any department.
Page 37
Apply the rules and different orders in the branch forward from the head
office.
Issuance of ATM cards.
Check and verifying the cash vouchers and transfer vouchers.
Answer the mail of different types from other banks and head office.
Verifying the cheques of customers that use thumbs.
Issuance of cheques book to the customer
Made entries in the daily book.
Inform all the employs about ant changes occur in any procedure.
Week # 5
progress of internship. I m designated at MCB Bank Limited. In the fifth week I was
posted at credit department. And I learnt and perform the following activities.
How to approve a specific credit line for a client.

Learnt about the Running finance against the saving certificate.
Studies few pages of credit manual.
Learnt about the cash financing.
Learnt about the entries against monthly installment for car financing.
Read Running finance in detail from manual.
Studied a Running and Cash finance case.
Learnt about the different document required for credit investigation.
Daily check the foreign exchange rates and write down on the foreign
exchange board.
Studied Documentation / collateral guideline.
Made entries for monthly markup against RF ( Running Finance)
Learned documentation required for each type of financing.
Learnt basics of foreign exchange operation.
Learnt about for foreign currency cash withdrawals.
Week # 6
progress of internship. I m designated at MCB Bank Limited. The whole week I
posted at cash department. And I learnt and perform the following activities.
Receiving Cash Book

Paying Cash Book
Token Book
Scroll Bor
Page 38
Financial Statement Analysis
ITEMS
2006
2007
2008
2009
Rupees on '000'
Assets
cash and balances with treasury
banks
32,465,976
39,683,883
39,631,172
38,774,871
6,577,017
3,807,519
4,043,100
6,009,993
Lending to financial intution
21,081,800
1,051,372
4,100,079
3,000,000
Investments
63,486,316
113,089,261
96,631,874
167,134,465
213
198,239,155
218,960,598
262,135,470
253,249,407
25
9,054,156
16,024,123
17,263,733
18,014,896
balance with other banks
Advances
Operating fixed assets
172,373
Deferred tax assets
20
-
11,031,450
17,868,761
19,810,476
23,040,095
342,108,243
410,485,517
443,615,904
509,223,727
7,089,679
10,479,058
10,551,468
8,201,090
10
23,943,476
39,406,831
22,663,840
44,662,088
25
257,461,838
292,098,066
330,181,624
367,604,711
43
1,597,440
479,232
Other assets
Total Assets
27
567
Liabilities
Bills payable
Borrowings
Deposits and Other accounts
Sub-ordinated loans
Liabilities against assets subject to
finance lease
Deffered Tax Liabilities
Other liabilities
Total Liabilities
Net Assets
1,180,162
437,137
3,196,743
11,171,496
11,722,493
21,345,781
15,819,082
301,263,929
355,365,842
385,179,850
439,483,714
488
40,844,314
55,119,675
58,436,054
69,740,013
79
5,463,276
6,282,768
6,282,768
6,911,045
24,662,426
34,000,638
36,768,765
38,385,760
5,530,973
5,130,750
9,193,332
15,779,127
35,665,675
45,414,156
52,244,865
61,075,932
69
Represented by:
Share capital
Reserves
Unappropriateed profit
Page 39
surplus on revaluation of assets
5,187,639
9,705,519
6,191,189
8,664,081
40,844,314
55,119,675
58,436,054
69,740,013
79
1. Balance Sheet
Vertical Analysis of Balance Sheet
ITEMS
V 06
V 07
V 08
V 09
V 10
Vertical Analysis (Values in %)
Assets
cash and balances with treasury banks
Lending to financial intution
Investments
Advances
Deferred tax assets
Other assets
9.49%
9.67%
8.93%
7.61%
8.00%
1.92%
0.93%
0.91%
1.18%
0.26%
6.16%
0.26%
0.92%
0.59%
0.78%
18.56%
27.55%
21.78%
32.82%
37.54%
57.95%
53.34%
59.09%
49.73%
44.85%
2.65%
3.90%
3.89%
3.54%
3.69%
0.05%
0.00%
0.00%
0.00%
0.00%
3.22%
4.35%
4.47%
4.52%
4.88%
100.00%
100.00%
100.00%
100.00%
100.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2.07%
2.55%
2.38%
1.61%
1.81%
7.00%
9.60%
5.11%
8.77%
4.53%
75.26%
71.16%
74.43%
72.19%
76.01%
0.47%
0.12%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.29%
0.10%
0.63%
0.87%
3.27%
2.86%
4.81%
3.11%
2.84%
Total Liabilities
88.06%
86.57%
86.83%
86.30%
86.04%
Net Assets
Represented by:
Share capital
Reserves
11.94%
13.43%
13.17%
13.70%
13.96%
0.00%
0.00%
0.00%
0.00%
0.00%
1.60%
1.53%
1.42%
1.36%
1.34%
7.21%
8.28%
8.29%
7.54%
7.08%
1.62%
1.25%
2.07%
3.10%
3.77%
10.43%
11.06%
11.78%
11.99%
12.19%
Total Assets
Liabilities
Bills payable
Borrowings
Sub-ordinated loans
Liabilities against assets subject to
finance lease
Other liabilities
Page 40
1.52%
2.36%
1.40%
1.70%
1.77%
0.00%
0.00%
0.00%
0.00%
0.00%
11.94%
13.43%
13.17%
13.70%
13.96%
Horizontal Analysis of Balance Sheet
ITEMS
H 06-07
H 07-08
H 08-09
H 09-10
Horizontal Analysis _ Moving Base Method (Values in
%)
Assets
cash and balances with treasury banks
Lending to financial intuition
Investments
Advances
Deferred tax assets
Other assets
1.87%
-7.59%
-14.77%
5.07%
-51.75%
-1.74%
29.50%
-77.93%
-95.84%
260.85%
-36.26%
31.65%
48.46%
-20.93%
50.68%
14.38%
-7.95%
10.78%
-15.84%
-9.82%
47.50%
-0.31%
-9.09%
4.33%
35.00%
2.59%
1.32%
7.89%
Total Assets
Liabilities
0.00%
0.00%
0.00%
0.00%
Bills payable
Borrowings
Sub-ordinate loans
23.19%
-6.83%
-32.29%
12.31%
37.17%
-46.78%
71.67%
-48.40%
-5.45%
4.60%
-3.01%
5.29%
-75.00%
-100.00%
-65.73%
537.07%
38.48%
-100.00%
Liabilities against assets subject to finance lease

Other liabilities
-12.55%
68.49%
-35.44%
-8.73%
Total Liabilities
-1.69%
0.29%
-0.60%
-0.30%
Net Assets
Represented by:
Share capital
Reserves
12.47%
-1.90%
3.97%
1.90%
-4.16%
-7.47%
-4.17%
-1.30%
14.90%
0.07%
-9.05%
-6.12%
-22.69%
65.80%
49.52%
21.77%
Page 41
6.12%
6.45%
1.84%
1.63%
55.92%
-40.97%
21.91%
3.81%
12.47%
-1.90%
3.97%
1.90%
2. PROFIT & LOSS ACCOUNT
Profit & Loss Account
2006
2007
2008
2009
2010
Markup/ return/ interest earned
25,778,061
31,786,595
40,043,824
51,616,007
54,821,296
Mark up/ return/ interest expense
4,525,359
7,865,533
11,560,740
15,841,463
17,987,767
Net mark up/ interest income

- Provision for dimininution in the value of
investment
21,252,702
23,921,062
28,483,084
35,774,544
36,833,529
121,197
105,269
2,683,994
1,484,218
444,476
- Provision against loans and advances
1,014,540
2,959,583
1,335,127
5,796,527
3,100,594
- Bad debts written off directly
47,000
199
41,576
52,047
1,182,737
3,065,051
4,019,121
7,322,321
3,597,117
20,069,965
20,856,011
24,463,963
28,452,223
33,236,412
Fee, commission and brokerage income
2,311,235
2,634,610
2,954,394
3,331,856
4,129,540
Dividend income
811,801
632,300
617,554
459,741
543,906
Income from dealing in foreign currencies
692,010
693,408
727,564
341,402
632,346
Gain on investment
Unrealized gain/ loss on revaluation of
investment
605,865
1,500,865
740,429
773,768
411,834
Classified as Holding as Trading
(13,105)
(103,198)
Other income
570,505
563,213
855,697
736,118
547,680
Total non mark up interest income
4,991,416
6,011,291
5,791,440
5,642,885
6,265,306
Net mark up/interest income after

provisions
Non mark up/interest income
Page 42
25,061,381
26,867,302
30,255,403
34,095,108
39,501,718
- Administrative expenses
6,482,592
5,022,416
7,546,878
10,107,189
12,173,942
- Other proposition/write off
11,411
(3,743)
23,135
142,824
88,261
- Other charges
66,708
540,594
817,824
690,150
986,440
Total non mark up/ interest expense
6,560,711
5,559,267
8,387,837
10,940,163
13,248,643
Extra ordinary/unusual items
Profit before taxation
18,500,670
21,308,035
21,867,566
23,154,945
26,253,075
Taxation-Current year
5,701,443
6,442,356
7,341,257
7,703,305
8,027,433
- Prior years
593,497
(1,294,473)
(864,824)
(2,232,226)
- Defferd
63,332
894,590
16,533
2,188,569
1,352,467
6,358,272
6,042,473
6,492,966
7,659,648
9,379,900
Profit after Taxation
12,142,398
15,265,562
15,374,600
15,495,297
Unappropriateed profit brought Forward

Transfer from surplus on revaluation of
fixed assets
4,990,260
5,530,973
5,130,750
9,193,332
15,779,127
32,166
11,855
21,319
22,324
21,792
5,022,426
5,542,828
5,152,069
9,215,656
15,800,919
17,164,824
20,808,390
20,526,669
24,710,953
32,674,094
19.33
24.30
22.25
22.42
22.20
Non mark up/interest expense
Profit available for appropriation

Basic/diluted earnings per share
(In
Rupees)
Page 43
16873175
Page 44
3. Ratio analysis
Regulatory Ratio
2008
2009
Advance
198,239,155
218,960,598
262,135,470
253,249,407
Deposit
257,461,838
292,098,066
330,181,624
367,604,711
77.00%
74.96%
79.39%
68.89%
Cash to deposit ratio

Cash on Hand & Cash with other Banks
6,577,017
3,807,519
4,043,100
6,009,993
Total Deposit
Cash on Hand & Cash with Other Banks / Total
Deposit
257,461,838
292,098,066
330,181,624
367,604,711
Capital Adequacy Ratio
Equity To Asset Ratio
2.55%
1%
1%
2%
Shareholder Equity
35,665,675
45,414,156
52,244,865
61,075,932
Total Asset
342,108,243
410,485,517
443,615,904
509,223,727
10.43%
11.06%
Shareholder Equity
35,665,675
45,414,156
52,244,865
61,075,932
Total Deposit
257,461,838
292,098,066
330,181,624
367,604,711
Shareholder Equity / Total Asset
2007
Advance To Deposit Ratio
Advance / Deposit
2006
11.78%
11.99%
Equity To Deposit Ratio
Shareholder Equity / Total Deposit
Efficiency Ratio
Deposit To Total Liabilities
13.85%
15.55%
15.82%
16.61%
Total Deposit
257,461,838
292,098,066
330,181,624
367,604,711
Total Liabilities
301,263,929
355,365,842
385,179,850
439,483,714
Total Deposit / Total Liabilities
85.46%
82.20%
85.72%
Page 45
83.64%
Investment in Total Asset

Investment
63,486,316
113,089,261
96,631,874
167,134,465
Total Asset
342,108,243
410,485,517
443,615,904
509,223,727
18.56%
27.55%
21.78%
32.82%
Profit After Tax
12,142,398
15,265,562
15,374,600
15,495,297
Total Income
20,069,965
20,856,011
24,463,963
28,452,223
60.50%
73.20%
Investment / Total Asset
Profitability Ratio
Net Profit Margin
Profit After Tax / Total Income
Operating profit
4,991,416
6,011,291
5,791,440
5,642,885
Total Income
20,069,965
20,856,011
24,463,963
28,452,223
24.87%
28.82%
Net Profit
17,164,824
20,808,390
20,526,669
24,710,953
Total Equity
35,665,675
45,414,156
52,244,865
61,075,932
48.13%
45.82%
Net Profit
17,164,824
20,808,390
20,526,669
24,710,953
Total Asset
342,108,243
410,485,517
443,615,904
509,223,727
23.67%
19.83%
Return On Total Equity
Net Profit / Total Equity
54.46%
Operating profit margin
Operating Profit / Total Income
62.85%
39.29%
40.46%
Return On Total Asset
Net Profit / Total Asset
5.02%
5.07%
4.63%
Comments on Ratios
1. Regulatory Ratios;
Advances to Deposit Ratio
Page 46
4.85%
This ratio is calculated by dividing the amount of advances by deposits,

indicating the relationship of advances and deposits. It means that what is the
percentage of advances to deposit of a bank. Overall this ratio shows decreasing
trend that means management is inefficient toward advancing of loan.
Cash to deposit Ratio
The ratio is calculated by dividing the cash on hand and cash with other
banks by total deposits of the bank. This ratio tells that at any time if cash is
needed to meet the liabilities of deposit liabilities to what percentage it is available.
This ratio is on decreased trend which is unfavorable, indicate that bank is not
utilizes its deposits.
2. Capital Adequacy Ratios;

Equity to Assets
This ratio is calculated by dividing shareholders equity by total assets. This

ratio shows continuously increasing trend which is favorable for bank resulting in
decrease in debt ratio.
Equity to Deposits
This ratio shows the percentage of shareholders equity to total deposit and
calculated by shareholders equity by total deposits of the bank. This ratio shows
increasing trend which is favorable for a bank.
3. Efficiency Ratios;
Deposit to Total Liabilities

This ratio is calculated by dividing total deposits by total liabilities. This ratio
shows the percentage of total deposits (major liability of the bank) to total liabilities.
This ratio is in increased trend it means that management doing properly investing
its funds.
Investment to Total Assets
This ratio is calculated by dividing investment by total assets. The investment
to total asset indicates the portion of investment in banks total assets; in 2010 it is
increased which is a favorable sign. This shows that management work properly and
efficiently and utilizing the assets fully by investment.
Net Profit Margin
Page 47
This ratio is calculated by dividing profit after tax by total income. This ratio
shows what the percentage of net profit to total income is. This ratio decreased in
2010 which is not favorable this shows management does not work efficiently.
Operating Profit Margin

This ratio is calculated by dividing the operating profit by total income
indicating that what the percentage of operating profit to the total income is.
Operating profit ratio shows the profits of a firm that earn on its income. It decrease
in 2010, which shows a negative sign.
Return on Equity
This ratio is calculated by dividing net profit by total equity. It measures a
firm's efficiency at generating profits from every rupee of net assets (assets minus
liabilities), and shows how well a company uses investment rupees to generate
earnings growth. last year it show a negative trend.
Return on Total Assets
This ratio is obtained by dividing net profit by total assets. This ratio shows
that what percentage of earning the company is attaining on total assets.
This ratio measure bank ability to utilize its assets to create profit by
comparing profit with assets generates profit. This ratio shows decreasing trend in
2006 this mean that management is not properly using its assets. And in 2007 it is
increased.
Page 48
SWOT ANALYSIS
STRENGTH
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 your call the highly cooperative and professional individuals ready to
serve you with maximum zeal and zest.
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.
MCB in Pakistan is the also in the list of highly automated banks like Emirates
because of its modern style of banking through fully computerized control and
twenty four hour banking. The joining of experienced people, advanced
management, advance setup and facilities gave MCB an edge over its competitors.
WEAKNESSES
The majority of people are not well aware about the products of MCB.
Therefore it should advertise extensively especially RTC and Master Cards. 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.
In MCB there is lack of specialized skill because of job rotation policy of
human resource department. The bank should concentrate upon increasing its
abilities on individual service basis. Mismanagement of time 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.
Page 49
OPPORTUNITIES
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, is 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 unbaked. 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.
THREATS
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.
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.
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.
Page 50
SEGGESTION
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.
Financially unsophisticated people might feel bank accounts, cheque books,
credit cards, etc. are difficult to understand and to keep control thereof.
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 the branch or some
important shopping plazas.
It is widely known that there is a substantial Black Economy in Pakistan,
Where people earn income that is undisclosed to their venues authorities. Payments
for goods and services in the black economy are necessarily in cash, because
transactions by cheques are more likely to be exposed to the revenue authorities.
Some people will therefore avoid bank accounts to preserve secrecy of earnings.
One way to retain the personal sector 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. Banks must have
Page 51
a slightly different mix of services and mean of providing these such that customers
can choose the mix that suits them best.
Arguably, there has been a little encouragement from banks to persuade
people to open a bank account. Opening hours are restricted, and there is
commonly held beliefs that bank operate for their convenience and not for the
convenience of the customers.
Logic leads to promotional campaign through employers who are customers
of the banks and their employees are paid in cash. Such business accounts should
be encouraged to open the accounts of their employees with the banks. It might be
worth offering free banking for a specific period to new accounts or simply
publicizing the services available by means of posters at the employers premises.
It might be possible to attract another type of personal customers through
business accounts, namely directors and denier employees, etc. Again an incentive
package could be put together. The banks may choose to make its existing products
distinctive or to introduce new products. It is often easier to benefit from adverse
changes made by other banks than to attract customers by innovations.
A short term promotional technique is to offer price incentives, for example,
low interest rates on advances or limited issue high profit bearing term deposits.
Longer term, a Loss Leader may be offered. For example, profit bearing current
accounts are not very lucrative but any bank cannot afford not to offer these. The
reduced profits can be augmented by profits made on other products.
Page 52
REFERENCES
http://www.sbp.org.pk/
http://en.wikipedia.org/wiki/MCB_Bank
http://www.mcb.com.pk/privilege/product_proposition/current_life_account.as
p
http://www.mcb.com.pk
Statistical Bureau of Pakistan http://www.fbs.gov.pk
Personal Meeting with Branch Manager
Personal Meeting with Operational Manager
Page 53

Final Report - Faizan Idrees

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Preface

It is the requirement of the MBA course, Comsat Institute of Information,

Comsats Institute of Information Technology, Lahore

With prayers of my parents and support of my teachers it became possible to

Comsats Institute of Information Technology, Lahore

Core values of MCB......................................................................................... 10

Account Opening Department.........................................................................18

Comsats Institute of Information Technology, Lahore

Comsats Institute of Information Technology, Lahore

classified advances in to following types Agricultural Advances, Commercial

Comsats Institute of Information Technology, Lahore

Comsats Institute of Information Technology, Lahore

State Bank of Pakistan

National Bank of Pakistan

MCB BANK LIMITED

MCB was founded by ISFHANI and ADAMJEE families in Calcutta on July 9,

Comsats Institute of Information Technology, Lahore

administrative efficiency, just because MCB is continually achieving its objectives.

Comsats Institute of Information Technology, Lahore

MCB Bank is committed to the personal welfare and professional

Core values of MCB

Comsats Institute of Information Technology, Lahore

1. Product Mix & Price of MCB

Mahnama Khushali Scheme

MCB Khushali Bachat Account

8% rate of return per annum.

Comsats Institute of Information Technology, Lahore

Prime Currency Account Scheme

Hajj Mubarak Scheme

Capital Growth Certificate Scheme

MCB Mobile Banking

MCB Islamic Banking Services

MCB Smart Card

Fund Management Scheme

Self Supporting Scheme

Utility Bill Collection

MCB Car Cash

MCB Master Card

Easy Personal Loan

MCB Pyara Ghar

2. Placing Strategy of MCB Bank

3. Promotion strategy of MCB bank

Comsats Institute of Information Technology, Lahore

Open Different accounts for different peoples

1. Account Opening Department

Preliminary investigation is necessary because of the following reasons:

Inquiries about clients:

be attached by the customer. Basically following information is required to open an

Original is also enclosed for inspection and return

SOCIETIES / CLUBS AND ASSOCIATIONS ACCOUNT

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

Transfer delivery cheques:

PROCESSING OF OUTWARD CLEARING (Collections)

PROCESSING OF INWARD CLEARING (Payments):

Comsats Institute of Information Technology, Lahore

PROCESSING OF RETURN CLEARING:

PROCESSING OF CHEQUES RETURNED:

Remittance department performs following functions:

Telegraphic Transfer (TT)

MAIL TRANSFER (MT)

TELEGRAPHIC TRANSFER (TT)

DEMAND DRAFT (DD)

Customers debit form