MCB BANK LTD

INTERNSHIP REPORT
Prepared by
Sahar
INTERNSHIP REPORT

ACKNOWLEDGEMENT

First of all I thank Allah, who is the holder of my breaths, without his order nothing is
possible.

I am highly thankful to my respectable teachers and friends and family members who
were my supporter throughout my educational career, further I thank all the
employees of the branch MCB bank Limited, where I have done my internship. The
internship report on marketing of muslim commercial bank was encourge by all
students.

I have set light, an ever-burning flame of gratitude and deep sense of obligation to
my honorable teachers of Department of Business Management Sciences for their
valuable guidance, constructive criticism and inspiring attitude during my studies. I
appreciate and thanks to all the member of the faculty. Besides, this internship
program makes me realize the value of working together as a team and as a new
experience in working environment, which challenges us every minute. Not forget,
great appreciation go to the rest of MCB’s staff that helped me to write internship
report on Muslim commercial bank (MCB) from time to time during the project. The
whole program really brought us together to appreciate the true value of friendship
and respect of each other.

Last words are lacking to express my feelings and indebtedness to my affectionate

Family and Friends for their love, appreciations, which always stand by me mentally
and spiritually during all years of my study.

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TABLE OF CONTENTS

No. Particulars

01 Acknowledgement

02 Executive Summary

03 Introduction

04 History of Bank

05 Objectives of MCB

06 Vision Statement

07 Mission Statement

08 Core values

09 Management of MCB

10 Awards and achievements

11 Work Done by me

12 SWOT Analysis

13 Conclusion

14 Recommendation

15 References

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Executive Summary

MCB is one of the leading banks of Pakistan founded in 1947, MCB soon earned
reputation of a solid and conservative financial institution directed by expatriate
executives. In 1974, the MCB was nationalized along with all other private sector
banks.

MCB bank is doing the day and the night struggle to achieve their purposes. These
control costs and increase efficiency and effectiveness. It introduces the innovative
concept of centralized services foreign trade branch to improve efficiency
competition and reduce shipping costs. Hence the internship report on mcb is
presenting true picture of this organization. In coming pages of this internship report
on Muslim commercial bank (MCB) readers could be able to understand how to write
a effective internship report on MCB with in time table.

During my internship at the MCB, I worked in remittances, advances, cash,

deposits, customer service department office and successfully completed all tasks
and duties were allocated to me. It also performs different functions in all
departments as a whole. Therefore in the internship report on muslim commercial
bank(MCB) is presenting true facts of this MCB bank branch and overall of this
organization. The main of this internship report on mcb was to display a background
picture of this organization as well as its SWOT analysis of MCB.

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INTRODUCTION

BANK
The term 'bank' is being used for a long time, yet it has no precise definition. The
basic reason is that the commercial banks perform not just one but many types of
functions. The term bank has been defined differently by different authors. Some are
as follows:

According to Crowther

"Bank is a dealer in debts—his own and of other people."

According to G.W. Gilbert,

"A banker is a dealer in capital or more properly a dealer in

money. He is an intermediate party between the borrower and
the lender. He borrows from one party and lends to another."

According To Bamkinh Companies Ordinance

U/s3 (B) of Banking Companies Ordinance 1962 "Banker

means person transacting the business of accepting for the
purpose of lending or investment, of deposits of money from the
public, repayable on demand or otherwise and withdraw able by
cheque, draft, order or otherwise and includes any Post Office
Savings Bank."

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History of MCB Bank

Before separation of Indo Pak, the need for more Muslim banks was felt. And
Muslims having strong financial capacity were thinking to invest in this sector as well.
This was the idea which paved the way for setting up MCB Bank Ltd known as MCB.
This was the third Muslim bank in the subcontinent.

History

This bank was incorporated under companies’ act 1913 on 9 th July, 1947 (just
before partition) at Calcutta. But due to changing scenario of the region, the
certificate of incorporation was issued on 17th August, 1948 with a delay of almost 1
year; the certificate was issued at Chitagong. The first Head office of the company
was established at Dacca and Mr. G.M. Adamjee was appointed its first chairman. It
was incorporated with an authorized capital of Rs. 15 million.

After some time the registered office of the company was shifted to Karachi
on August 23rd, 1956 through a special resolution, now recently the Head office of
MCB has been transferred to Islamabad in July, 1999 and now Head office is termed
as Principle Office.

This institute was nationalized with other on January 1st, 1974. At that time it
had 506 branches and deposits amounting to Rs. 1,640 million. Although. MCB has
a reputation of a conservative bank but nationalization also left its effects on this
institute as well and by end of year 1991 in which it was privatized the total number
of branches were 1.287 and deposits amounting to as high as Rs. 35,029 million.

Privatization

When privatization policy was announced in 1990, MCB was the first to be
privatized upon recommendations of World Bank and IMF. The reason for this choice

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was the better profitability condition of the organization and less risky credit portfolio
which made'' it a good choice for investors. On April 8th, 1991, the management
control was handed over to National Group (the highest bidders). Initially only 26% of
shares were sold to private sector at Rs. 56 per share.

After Privatization

Ten years after privatization, MCB is now in a consolidation stage designed to

lock in the gains made in recent years and prepare the groundwork for future growth.
The bank has restructured its asset portfolio and rationalized the cost structure in
order to remain a low cost producer.

After privatization, the growth in every department of the bank has been observed.
Following are some key developments:
● Launching of different deposit schemes to increase saving level.
● Increased participation on foreign trade.
● Betterment of branches and staff service level.
● Introduction of Rupee Traveler Cheques & Photo Credit Card for the first time
in Pakistan.
●

OBJECTIVES OF MCB
The main objectives of MCB are:
❖ Improved Customer Services
❖ Effective Use of Electronic Media
❖ Enlightened Personnel Policies

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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.

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

❖ 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.

Management of the organization

As MCB is a banking company listed in stock exchange therefore it follows all the
legalities which are imposed by concerned statutes Mr. Muhammad Mansha is
chairman & chief executive of the company with a team of 10 directors and 1 vice

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chairman to help in the business control and strategy making for the company

i)

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ii) Board of Directors

Mian Mohammad Mansha Chairman

Mr. Imran Maqbool President

Mr. Tariq Rafi Member

Mr. Shahzad Saleem Member

Mr. Sarmad Amin Member

Dr. Muhammad Yaqub Member

Mian Raza Mansha Member

Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Abdul Farid Bin Alias Member

Mian Umer Mansha Member

Mr. Muhammad Ali Zeb Member

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Audit Committee
Mr. Tariq Rafi Chairman

Dr. Muhammad Yaqub Member

Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Muhammad Ali Zeb Member

Mr. Malik Abdul Waheed Member

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Chief Financial Officer

Mr.Salman Zafar Siddiqi

Human Resources Committee

Mian Mohammad Mansha Chairman

Dr. Muhammad Yaqub Member
Mian Raza Mansha Member
Mr. Shahzad Saleem Member
Mr. M.U.A. Usmani Member

Risk Management & Portfolio Review Committee

Mr. Shahzad Saleem Chairman

Mr. Tariq Rafi Member
Mr. Sarmad Amin Member
Mian Raza Mansha Member
Mian Umer Mansha Member

Business Strategy & Development Committee

Mian Mohammad Mansha Chairman
Mr. S. M. Muneer Member
Mr. Shahzad Saleem Member
Mian Raza Mansha Member
Dr. Muhammad Yaqub Member
Dato' Mohammad Hussein Member
Mian Umer Mansha Member

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Mr. M.U.A. Usmani Member

Account Opening Department

Basic Account
Current Account

Savings Account
Foreign Currency
Saving 365 Gold

Special Rupee Term

Smart Business Account

Business Current Account

Account Opening Documentation Requirement

The details of Account Opening Application, Specimen Signature Cards and other
Documents to be obtained for different types of accounts are as follows:

Individuals Accounts
1. Application for Opening Account (SF-1AA).
2. Specimen Signature Card (SF-6).
3. Attested photocopy of Computerized National Identity Card (CNIC) or
Passport. It is a mandatory requirement to verify the CNIC of the customer
before opening the accounts, from NADRA Online system- VERISYS
4. In case of a salaried person, attested copy of his/her service card or any other
acceptable evidence of service, including but not limited to a certificate from
the employer.

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5. In case of illiterate person, a passport size photograph of the new account

holder besides taking left & right thumb impressions on the Account Opening
Form & Specimen Signature Card
6. In case CNIC does not contain a photograph, Banks may allow the said
customer to open the account, subject to provision of the following
documents:

❖ A copy of the photograph duly attested by gazette officer/Nazim.

❖ A copy of CNIC without photograph duly attested by the same person who
has attested the photograph as per above.
❖ A confirmation in writing to the effect that they have no other document
bearing their photograph.
❖ Moreover, the particulars/CNIC of such persons must be confirmed from
NADRA in writing or through its “VERYSES” system.

Partnership Account
1. Application for Opening Account (SF-1AA).
2. Specimen Signature Card (SF-6).
3. Attested photocopies of Computerized National Identity Card (CNIC) of all
partners.
4. Attested copy of “Partnership Deed” or “Letter of Partnership (CF-13), in lieu
of the partnership deed, if not available) duly signed by all partners of the firm.
5. Attested copy of Registration Certificate with Registrar of Firms. In case the
partnership is unregistered, this fact should be clearly mentioned on the
Account Opening Form.
6. Authority letter in original, in favor of the person authorized to operate on the
account of the firm.

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Joint Stock Companies

Copies of the following documents duly certified by the authorized officer of the:
1. Resolution of Board of Directors for opening of account specifying the
person(s) authorized to operate the company account.
2. Memorandum and Articles of Association.
3. Certificate of Incorporation.
4. Certificate of Commencement of Business.
5. Attested photocopies of Computerized National Identity Card (CNIC) of all the
directors.

Clubs, Societies and Associations

Certified copies of:
1. Certificate of Registration issued by the Registrar of Cooperative Societies/
Registration Authority.
2. Bye-Laws/ Memorandum and Articles of Association of the Society containing
official seal of the Registration Authority.
3. Permission of the registration authority for opening of Account in the name of
Association as required under section 37 (d) of Co-operative Societies Act,
1925.
4. List of members of the Managing Committee duly certified by the Registrar of
Societies.
5. Resolution duly passed by the members of Managing Committee in their
meeting regarding opening and operation of account in the name of said
Society. It must be ensured that the mandate for operation of Account given in
the Resolution is not in violation of the provision of Bye-Laws/ Memorandum
and Articles of Association.
6. Attested copies of CNIC of the authorized officials/ persons.

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Agents Accounts
1. Certified copy of “Power of Attorney”
2. Attested photocopy of Computerized National Identity Card (CNIC) of the
agent.
Trust Accounts
1. Attested copy of Certificate of Registration
2. Resolution duly passed by the Trustees regarding opening and operation of
Account in the Bank in the name of said Trust Deed.
3. Attested copies of CNIC of all the trustees.
4. Certified copies of Letter of Administration/ Instrument of Trust.

Minor Accounts: (Age below: 18)

A Minor is a person who has not attained the age of 18 years, if the Court appoints
guardian of his/her person or property, then the period of his minority extends to the
age of 21.
1. An account in the name of minor is allowed to open by his guardian,
preferably jointly in the name of guardian / Minor or Minors, payable to either
or survivor opener of the Account.
2. Title of Account is on the Minor’s Name (As per Form –B) &word “Minor” be
added to the Title of Account.
3. In the Account Opening Application, the particulars of the Guardian will be
filled out in the column of “Personal Information”.
4. Attested copy of Computerized National Identity Card (CNIC) of the Guardian.
5. Attested photocopy of Form-B of Minor.
Illiterate / Photo/ Disable Persons Accounts
1. Attested photocopy of Computerized National Identity Cards (CNIC).
2. Two Attested Photographs. (One photograph shall be pasted on the Account
Opening Form and other will be pasted on Specimen Signature Card.
3. Left thumb impression (Right thumb impression in case of female) on the

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account opening application & Specimen Signature Card (SSC)

Account Opening Process

Client/Account Opening Process Steps

1. Customer comes into the branch and requests for opening an account.
2. Customer Services Officer (CSO): delivers the Account Opening Application along
with the terms and Conditions (AT&C) and relevant documents to the customer.
3. Customer: receives the Account Opening Form (AOF) from CSO and submits duly
completed AOF and relevant documents to the CSO.
4. CSO: checks that all the fields in the Account Opening Form have been duly filled,
and the relevant account documentation required from the customer depending on
the type of account are completed and attached.

❖ Account Opening Form (AOF)

❖ Specimen Signature Card (SSC)
❖ Account Terms & Conditions acknowledgement
❖ Attested copy of CNIC
❖ Copy of employment or student Card & other verification documents as
required on case-to-case basis.
❖ Obtain customer’s signatures on the AOF and SS Card (in person). Moreover
one signature card will be used to capture per signature of the client (In case
of Joint Account Holders use additional signature card). Subsequently takes
the form to the Relationship and Operations Manager for Verification and
authorization.
❖ Operations Manager/ Account Maintenance Officer (AMO):
❖ Verifies introducer’s signature from Branch Teller Module > Transactions >
Non- Financial Transactions > Customer Signatory (Screen # BT44).
❖ Sign-off and affix stamp on the Account Application.

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❖ Forwards AOF & Client Profile Form to Relationship Manager.

❖ Relationship/ Branch Manager
❖ Interviews the customer.
❖ Completes and sign off Know Your Customer (KYC)/ Client Profile Form.
❖ Returns the same to the CSO for further processing.
❖ Customer Services Officer (CSO):
❖ Selects SYMBOLS Branch Teller Module > Transaction > Non-Financial
Transaction > Client Definition (Screen # BT41) to create a client.
❖ Insert Client Short Name. This is used as the default Title of Account
whenever an account is opened.
❖ Input Client full Name. Pop-up box will appear on the screen: Input or select
appropriate ID Type & insert CNIC number & press OK. (Box will close
automatically)
❖ Insert Country Code, State, Country of Citizen, Country of Risk.
❖ In the next section of the same screen, insert Client Indicator as “N” Normal,
“S” Staff and/or “V” VIP Account.
❖ Input address as written in Account Opening Application- SF-1AA.
❖ Select Account Executive & Client Type then press F-10 or click save icon
available on Tool Bar. System generates the client number and Pop-up box
appear on the screen with the following message:

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.
❖ The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a

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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.

Cheque
Cheque book is a safe custody instrument. Cheque is used for cash withdrawal and
making payments. Cheque books are relatively sensitive items hence due care must
be exercised while handling them.

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.

Processes Involved In Clearing Department

Clearing of Bank Instruments includes collection and payment of cheques, Demand

Draft, Payment Order, Mail Transfer, Telegraphic Transfer, and Dividend Warrants
etc. Collection and Payment of cheques are known as Outward and Inward Clearing
respectively.

Lockers

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Basically it is a facility which is provided by the bank to its customers in order to

secure there money gold important property documents etc. before this locker
concept people are very much worried about the lose of there money, gold and
important documents so now the people are very much relax because now they use
this facility quite frequently.

● Process Of Clearing
❖ Receiving of cheque
❖ Entry in register / MIS
❖ Stamping
❖ Sorting
❖ Dispatching
❖ Posting with float
❖ Process at NIFT
❖ Bank wise/ branch wise sorting
❖ Dispatching to the drawee bank branch
❖ Receiving of invert clearing
❖ Posting (to be honored)
❖ Return of applicable
❖ Receiving of returns by NIFT
❖ Sorting of return cheques by bank branch
❖ Dispatching of returned cheques to respective bank branch
❖ Receiving of return cheque

Remittances
This department deals with various instruments and modes of transferring funds both
Locally and Internationally. It deals with following:

Telegraphic Transfer
“T.T instructions regarding PMT are sent to Drawee branch in a coded language and

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under confidential number known as TEST Number.”

Parties Involved
1 Applicant
2. Remitting or Drawing Branch
3. Drawee Branch
4. Beneficiary /Payee
.
Mail Transfer
Like T.T funds can be remitted by MT for the Cr of the payee a/c or the Beneficiary
can be advised to receive the PMT from Drawee branch either in cash on proper
identification or through his banker.”

Parties Involved
1. Applicant
2. Drawing Branch
3. Drawee Branch
4. Beneficiary

Internal Fund Transfer

It’s also a fund transfer but only by Online within the Branches. Funds transfer facility
through FTA has eliminated the requirement of obtaining schedule from the
customers, if they wish to remit funds from one branch to another branch or in the
same branch. FTA works, as a customer’s authorization to debit the customer’s
account without presenting a cheque debit authority therefore cheque should not be
obtained from customers in the process of internal funds transfer.
❖ Customer presents duly completed Funds Transfer Application (FTA) to the
teller in order to credit Beneficiary’s account.
❖ Teller:
❖ Receives FTA from the customer.
❖ Verify the details & customer’s signature given on FTA with the system as per
the assigned limit of the teller. If transaction amount exceeds the teller limit,

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Chief Teller authorizes the transaction.

❖ Chief Teller authorizes the transaction on the system
❖ Teller:
❖ Affix Transfer Stamp and sign-off FTA.
❖ Forwards the instruments to the Chief Teller for validation & record keeping.
❖ Delivers Customer Copy to the applicant.
❖ Customer collects “Customer Copy” of FTA and leaves the branch.

iii) Demand Draft

❖ Demand Draft is a written order.
❖ Drawn by one branch of a Bank upon another branch of the same Bank, or
upon other Bank to pay a certain sum of money to or to the order of a
specified person. It is issued by one branch of a bank and payable by
another branch of the same bank or another bank
❖ Demand Draft is a negotiable instrument.
❖ Demand Draft is neither issued payable to bearer nor drawn on branches
situated within the same city.
❖ Legal provisions as to crossing, endorsement, collection and payment in
due course are similar to those as for cheques and other negotiable
instruments.
Parties involved
1. Purchaser
Is the person, firm, company or local authority.
2. Issuing or Drawing Branch
The Branch which issues a Draft on another Branch.
3. Drawee Branch
Is the Branch on which a draft is drawn.

Payment of Demand Draft via Cash

When Demand Draft is presented at the counter of a drawee branch for cash
payment, identification of a payee is required. If a payee is the customer of a branch,

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his signature can be verified from the specimen signatures on the record.
A Crossed DD cannot be paid in cash, except to a banker who collects the same for
credit to his customer’s account. As such, a crossed DD cannot be presented by the
Payee for Cash payment at the counter. Otherwise amount is paid against it.

Payment of Demand Draft in Transfer

Payment of Demand Drafts can also be made in Transfer/ Clearing. A complete
procedure for collection / payment has been explained in inward and outward
clearing.

Scrutiny of Demand Draft

❖ When the payee presents a draft or the collecting banker for payment
presents it, following should be checked:
❖ DD is drawn on the branch to which it is being presented.
❖ DD is not more than six months old.
❖ There is no alteration or overwriting on it.
❖ The draft is not mutilated.
❖ The payee has been duly identified or signature of identifier has been duly
verified or if it is being presented through a bank, a proper discharge
regarding the disbursement of proceeds is given.
❖ Ensure that the name of issuing branch is printed / written or rubberstamped.
Payment Order
Payment Order is used for making payments within a city. Literal definition of
Payment Order is as follows:
“A Pay Order is a written authorization for payment, made in a cheque 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.

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Parties involved
Purchaser
Purchaser is a person, firm, company, Government/Semi Government Organization
or local authority.
Issuing/Paying Branch
These issues/pays on presentation of the instrument.

Payee
Payee is the person named on a bill to whom, or to whose order, payment is to be
made. Where a bill is not payable to bearer, the payee must be named or otherwise
indicated therein with reasonable certainly. The procedure delineated for change in
the name of Payee of DD,

iv) Procedure for Sale Of Pay Order

❖ Customer presents duly completed Fund Transfer Application (FTA) along
with the cheque to the teller.
❖ Teller receives Fund Transfer Application (FTA) from the customer.
❖ Verifies FTA to ensure that all the relevant information has been provided.
❖ Verifies customer’s signature.
❖ After inserting the required information transaction
❖ Executes the transaction.
❖ Delivers acknowledgement slip to the customer.
❖ Chief Teller
❖ Verifies and authorizes the transaction (if required)
❖ Teller
❖ Checks the printed Payment Order against Fund Transfer Application
(FTA).
❖ Sign off the same (1st Signature)
❖ Forwards the Payment Order along with FTA to the Chief Teller for
2ndsignature.
❖ Chief Teller

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❖ Checks and sign off the same. (2nd signature)

v) Procedure for Pay Order Purchase – (Transfer into Account)

❖ Customer presents duly completed deposit slip along with the Payment Order
to the Teller.
❖ Teller
❖ Verifies the pay order and deposit slip to ensure that all the information
given on the pay order and deposit slip is correct and payment has not
been made.
❖ Executes transaction.
❖ Chief Teller
❖ Verifies and authorizes the transaction (if required) System
❖ Credits the customer’s account and generate necessary entries
❖ Teller
❖ Affixes Posted and Transfer stamp on the pay order and Deposit slip.
❖ Sign off the same and delivers deposit slip to the depositor.
❖ Forwards the instrument to the back office for checking and record
Keeping

vi) Call Deposit Receipt

CDR is just like a hard cash, basically CDR is used for transfer purpose means
amount transfer from one account to another account, CDR is used for Bidding
purpose or some time government introduces different housing scheme and here he
mentioned that you must submit the CDR instead if net cash, but in now a days
when the government of Pakistan impose .2% withholding tax of the amount which is
withdrawal over RS.25000/- in a day, then the use of this instrument is increasing. it
is just like Demand Draft , but with no validity date
Issuance of Call Deposit Receipt
❖ Receive the request letter from customer and also receive the cheque and
verify this cheque weather this post dated, stale cheque or not and also check
the sign verification of this customer which is mentioned on this cheque and
compare with signature card which is scanned in computer.

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❖ Than send this cheque for posting here and see that is it enough amount in
his account which he written down on this cheque, if yes than further
processing.
❖ Fills the CDR block and write down the following information on it
❖ Issue date of this CDR
❖ In favor of
❖ On account of
❖ Amount in words
❖ Amount in figures
❖ CDR serial number i.e. 58/07
❖ Than take the signature, account number his contact number at the back side
of the copy which we kept as record
❖ Paste stamps on this cheque that is Branch crossing stamp
❖ Transfer stamp on this cheque

Advances
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
MCB provides the facility to the people who need advance money to meet their
requirements. For getting the advance the following steps are there:
1) Information required by the bank
2) Preparation of credit proposals
3) Sanction advice

Initial Information
Following information is required to be submitted to bank.
➢ Nature & structure of borrower business.
➢ Names of proprietors, partners or directors.
➢ Detail of all firms or companies associated with borrower.

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❖ Financial condition of borrower business.

❖ An assessment of his business abilities.
❖ Accurate and up to date financial statements of last two years for comparison
purposes.
❖ Market report on the borrower where borrower has maintained an account
with another bank, a report from his bank should also be obtained.
❖ A report from credit standing bureau of STATE BANK OF PAKISTAN.

2. Preparation of Credit Proposal

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

3. Sanction Advice
❖ When the documents required are complete and there is no ambiguity then

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the party is advised that their credit or loan is approved and will be available
to you soon. There is a separate form for every annual approval or in case of
a new facility
❖ The form contains following information:
❖ Nature and amount of limit.
❖ Purpose
❖ Security/ Collateral
❖ Margin (%).
❖ Mark up/ Charges
❖ Validity

Types of Advances:
❖ MCB provides advances, which are of two types. These are as following:
❖ Fund Based Advances
❖ Non Fund Based Advances
Fund Based Advances
Funds are given to customer according to their requirement against securities. These
loan are given specially to traders, business, small industrial units, including cottage
industries, agriculturists, thus ensuring an equitable distribution of bank credit among
various sectors of the country’s economy.
There are following types of advances, which are given to customer on fund basis.
1) Industrial loan
2) Commercial loan
3) Agricultural loan

Industrial Loan
Loans are given to industrial units including cottage industries up to or less than RS.
20 million. Loans and advances shall not exceed amount specified by marginal
restriction on the type of securities offered. Industrial loans are granted to the
manufacturing section of the economy including finance for fixed investments and

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working capital requirements of small industries.

Loan Period
Loans are allowed for a maximum period of 5 years including a maximum grace
period of 1 year. In special case up to 10 years also, depending upon the merit of the
case.
Commercial Loan
Total principal amount of loans to a single enterprise/borrower shall not exceed RS.
0.5 million.

Loan Period
Maximum maturity is 3 years, depending upon the nature and type of advances,
decided upon case to case basis.

Eligibility of Guarantor
1) He has been living at the given address at least for one year.
2) He is neither the employee nor the family member of MCB.
3) He is not the officer of any Government organization.

Important documents required

❖ Two copies of application form (one original & one photocopy).
❖ Original Identity card will have to be shown. Similarly two photo copies of ID
card will also be required.
❖ Two passport size snaps of both applicant & guarantor.
❖ Original & attested documents of asset of guarantor.
Non Fund Based Advances
❖ When an applicant for an advance cannot offer any tangible security the

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banker may rely on personal guarantees, letters of credit to protect himself

against loss on advance or loan.
❖ There are two types of advances which come under Non Fund Advances.
❖ Guarantees.
❖ Letter Of Credit.
Letter Of Credit is explained in Foreign Exchange Department while Guarantees are
elaborated below.

Guarantees
Bank examines customer’s relation with the bank 7 the nature of the business. Bank
also sees his past business with the bank. Sometimes bank issues Guarantee on the
behalf of the customer by getting some margin from him. This margin may vary from
customer to customer.

Requirements for Guarantee

Banks issue guarantee on the behalf of customers. Limit proposals covering
transactions should be submitted with full details for the approval of appropriate
sanctioning authority.
Generally Guarantees are issued in favoring of Shipping companies, Government
Departments guaranteeing specific payments at future dates by customer on whose
behalf the guarantees are issued. While executing a guarantee, the terms and
conditions of the guarantee are closely examined in order to determine the extent of
bank obligations and financial liability under the guarantee and the type of
guarantee, all condition are contained in the guarantee.
Procedure
Bank charges a commission on the amount for which guarantee is issued. Normally
the validity period of guarantee does not exceed one year. After the guarantee has
been issued, a copy of same is issued to the counter guarantee issued to the
customer.

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Work Done by Me
I did my internship in MCB Bank Limited MCB Fruit Market Lahore Branch.
Some important information about my branch which I observed is as follows:

MANAGEMENT OF THE BRANCH

Branch Manager Majid Miraj

Operational Manager Zahid Rasool

Credit Manager Farooq Ahmed

TSS Danish Ali

GBO Faisal Naseer

GBO Arfrat Pervaiz

Customer Services Officer Sidra Ashraf

During my internship in the MCB Limited, I really enjoyed to work with the staff
of Branch 01-11- 2012 from 13-12-2012 and have a wish to be employee of MCB. It
was almost impossible to work in all the departments within that limited time. But on
my request, the staff of the branch provided me the opportunity to work in the
different departments for the sake of practical knowledge. I am really very thankful to
branch manager Azhar Iqbal that provides me a learning environment in the
branch.
During my internship training in the MCB as I early mentioned that I have
worked in different departments & seats and learnt the followings.

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FIRST WEEK

GENERAL BANKING
I was very excited to join MCB as an internee. On my first day I entered the premises
of Bank I was confused but with the God name I entered to area office and I met the
branch manager who welcomed me and told me the various rules, regulations and
various matters which I have to take care as an internee.
I was asked to work in different sections of general banking. The incharge of
general banking having good command on banks operations. Here I dealt with new
customers who wanted to get information about the branch and willing to deal with
the branch. This is a very interesting department because here I met people of
different types and deals with them accordingly

SECOND WEEK

RECEPTION
Dealing with customer is an important task of receptionist. We listen carefully
complaints and suggestions of customers and quickly forward it to responsible
persons or higher authorities according to the nature of complaint and suggestion.
During my stay on reception I came to know about the psychology of customers and
their behavior that came to bank. In my observation I came to know that:
❖ Some customers are friendly and happily wait as their work is being done
❖ Some customers have angry nature and wants their work should be given
priority before everyone else’s work

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❖ Some are annoying and continuously interrupt you in your work

❖ Some are mischievous and often try to enter into bank exclusive areas for
employees only

DUTIES ON RECEPTION
❖ Customer Dealing
❖ Fill Deposit Slips
❖ Receive Cheque of transfer, Clearing and OBC
❖ Fill the Cheque for customers
❖ Entry in receiving register
❖ Forward cheque to its concerned person

The main responsibility of receptionist is to hand over all cheque to their concerned
person and take initials against each cheque.
THIRD WEEK
Opening Of New Account
During the span of mine internship in MCB I learned and observed a lot of
about the opening of an account. Basically I think that the opening of an account is
the establishment of a contractual relationship between the banker and the
customer. By opening an account at a bank a person becomes a ‘customer’ of a
bank. Further I am going to express the basic requirements and steps involved in the
opening of an account.

Investigation
Before opening an account MCB as like the other banks in Pakistan ascertain
whether or not the person who is going to open the account is a desirable customer
or not. Then MCB determine the prospective customer’s 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

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other bankers and the general public who may be affected indirectly. In Ladbroke &
Co. V Todd (1914), the banker did not obtain introduction at the time of opening the
account, and it was construed a negligence within Section 82 of the Bills of
Exchange Act 1882.
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.

Requirements

Before opening an account in MCB I observed that 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 Bank’s 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
and 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 to open an account is required regarding the nature of account.

Procedure

According to my practice in MCB, when a customer wants to open an

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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 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

● Introducer’s Name, Address & Signatures

● Initial Amount of the Deposit

● Signature of the applicant

Fourth week
Types of Cheques Received

During my internship training in the Muslim Commercial Bank Limited, I

observed and found Cheques are received for the following purposes.

vii) For Cash payments

viii) For transfer(from one account to another account)
ix) For Clearing

Cash Payments

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Cheques which are presented on Bank counter must be checked in the

following way:
o Date.
o Signature of Drawer.
o Signature of Payee.
o Whether Bearer has cancelled.
o Whether Payee account duly is there.
o If condition 4&5 exist then check the signatures of Drawer.
o Match the figure and wordily amount of cheque.
When all above matters are satisfied then come to the Token register and
check:
1) Token number.
2) Cheque number.
3) Amount of cheque.
4) Particulars.

Two stamps are put on cheque.

a) Cash Payment (on the face of cheque).
b) Stamp for Token (on the back of cheque).

On stamp which is put for token their details are as follows:

● Token number.
● Time of giving token to client.
● Signature of token giver.

Cheques for Transfer

When cheques are presented to be sent for collection and drawn on bank
situated within the city then there are three stamps to be put on face as well as on
back of cheque.

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a) Crossing Stamp (face).

b) Transfer Stamp (face).
c) Bank Manager Stamp (back)
Only in MCB branches

Cheques For Clearance

There are two stamps put on each cheque, sent for clearing:
a) Crossing Stamp.
b) Manager Stamp.

Types Of Cheques Received

During my internship training in the Muslim Commercial Bank Limited, I
observed and found Cheques are received for the following purposes.

x) For Cash payments

xi) For transfer(from one account to another account)
xii) For Clearing.

Fifth WEEK
My third weak requires attention, high sense of responsibly as I was about to joint
cash and remittances department which demand the said qualities to be cope the
threats which are beings faced in this department. one should has to be very
attentive in this job as all department requires attention but this department didn’t
accept negligence in any one part as it deals in clearing of cheque ,giving payment
to customer, depositing money ,transferring money from one account to another
account ,making pay orders .
The need for remittance is commonly felt in commercial life particularly and inn
everyday life .a major function of banking system is the transfer of funds from one
client or one place to another place .by providing this service to the customer the
bank earns a lot of income in the form of service charges. The demand deals in local

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currency remittances i.e. remittance from one city to another without actually carrying
the currency. Al Baraka uses following instruments for transferring of money.
● Demand draft (DD)
● Pay order (PO)
● Mail transfer (MT)

First of all I learnt what demand draft is and how it is made. Demand draft is an
instrument and it is drawn on the same bank branches or to institutions where the
customer does not have any account and payment is to be transferred. It is the most
common form of payment. The other instruments used are telegraphic transfer and
mail transfer. Mail transfer is the fastest way. Previously telegraphic transfer was
very popular but now it is not commonly used.
I also learnt what pay order is. Pay order is used to make payments which are local
as within city. It is the only difference between demand draft and pay order. Suppose
a person’s salary bank receives and the person does not have any account with the
bank, his salary is paid through pay order. Following is the detail of above mentioned
instruments.

SIXTH WEEK

I spent my fourth and fifth week of internship in the advances department and the
cash department.

In the advances department the procedure of giving loan to the firms or individuals
was described to me. For the purpose of sanctioning the loan the specific CIB form is

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filled. The CIB form include the following particulars

● Name of the borrower

● NIC no of borrower
● National tax no of borrower
● Address of the borrower
● Type of business
● Ownership of the business
The particulars for these both forms were as under

● Name of borrower
● Gender of borrower
● Marital status of borrower
● Father name of borrower
● NIC no of the borrower
● Address of borrower
● Mother name of borrower
● Contact no of borrower
● Type of business
● Ownership of business
● Name of partners of business
● Amount of loan

SWOT Analysis

● Strengths
1. Provision Of Services in Diversified Sectors(Corporate, Retail, Islamic,

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Privilege)
2. Increase in Market Price of Share
3. Increase in Net Profitability (grew by 1.6% to Rs 15.536billion in FY09)
4. High Credit Rating(AA+ in short term & A1+ in long term)
5. Large ATM Network
6. Technological advancements (Mobile Banking, Virtual Banking ,ATMs)
7. Wide Countrywide branches network
8. International Expansion
9. Strong Asset Base (ROA = 3% while Industry average was close to 2.10%FY
09)
10. Steady increase in Customer Deposits (increased by 11.3% to Rs 367.60
billion in FY09 as compared to industry growth of 10.03%.)
11. Steady increase in Customer base
12. High Brand Recognition
13. Low cost Funding

Weaknesses
1. High Employee Turnover.
2. Manual Book-Keeping
3. Less attractive rate of return.
4. Dissatisfied Employees
5. Lack of trained and experienced staff
6. Less efficiency of SYMBOL System due to disconnectivity.
7. Old Branch Structure
8. Centralized Structure
9. Poor management
10. Unfair recruitments and promotions
11. Inadequate work allocation
12. Improper ATM Network
13. Lack of promotional activities

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14. Improper Branch Network

15. Poor Customer Service
Opportunities
1. More Overseas Operations.
2. Employee Training Programs with in and Outside Pakistan
3. Branches in Rural Areas.
4. Efficient ways of Recruitment and promotions
5. Launch more effective and modern banking online system.
6. Growing Market
7. High growth Potential I Islamic Banking
8. New Products and Schemes
9. Increase in Branch Network
10. Improvement in segmenting in customer needs and developing focused
customer propositions,
11. Mass Media Publicity

Threats
1. Higher rates of return on NSS as a part of tight monetary policy
2. Increase in Non Mark up Expenses due to inflation and adverse condition of
stock markets
3. Poor Economic conditions of country
4. Technological forces
5. Rapid increase in new entrants
6. Foreign banks providing better facilities
7. Competitors banks attracting experienced employees
8. Instable Political Conditions
9. Switching of customers to competitors
10. Terrorist activities
11. Natural climaties (egcfloods in Pakistan)

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CONCLUSION
With Cooperation of all branch members, I have been able to learn and experience
many new things related to the banking sector and the banks workings. I am able to
handle the public with respect to many different workings on many different
instances and also in account opening for customers and can handle many other
tasks as well.

Finally I concluded that MCB is a good organization for a person for his long term
career workings. Overall working and environment of the bank is very comfortable
and the staff is very helpful and respectful of each other and it still maintains a
professional environment. Management of the bank is very strong.

Employees of MCB Timber Market branch work more than their working hours and
all the workings take place in a very friendly atmosphere that does not induce
pressure on the person working there. It also shows their loyalty and commitment to
the organization. This branch of MCB relatively small and has climbed its way up
very quickly and all that only because of the employee’s efforts and consideration for
each other.

Understanding and the effective management of the human resources is the most
difficult challenge faced not only by the bank but by all the organizations. Even
though the people have been sacrificed in the new organizational developments, it is
becoming clear that the true lasting competitive advantage comes through human
resources and how they are managed. MCB seems to not focusing on this highly
critical issue as the job satisfaction level of the employees working at MCB is very
low

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Recommendations

● Human Resource Issues

o Recruitments should be strictly on merit basis and induction should be
after proper and extensive training.
❖ Most of the bank employees, are sticking to one seat only with the result
that they become master of one particular job and loose their grip on other
banking operation. In my opinion all the employees should have regular
job experience all out-look towards banking. The promotion policy should
be adjusted.
❖ Refresher Courses for the staff are most important in any international
organization. Alt the employees should have these courses according to
their requirement. Foreign experts can also be called for this purpose.
❖ Bank should give some more incentive to its employees in order to remove
the conflict between lower and higher officers and should try to improve
the working condition of the bank.
❖ Such system should be designed that every employee who has some
problems with his officers can communicate it to the higher management
and some steps must be taken to improve that.

● Management and Strategic Issues

❖ The higher authorities should form team-based management rather than
centralized management. It would result in improvement in uplifting the
morale of the employees.
❖ Foreign branches should be opened in order to capture the international
market and to earn international repute for the bank.
❖ Working environment, equipment, furniture and staff dressing should be
according to the modern banking style.
❖ Proper attention should be paid to upgrade customer services.
❖ Attention should be given to improve the network of branches as well ATM
network

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❖ New and improved technologies should be used in order to get 24 hours

connectivity

References

❖ Introduction:http://mcb.com.pk/mcb/about_mcb.asp

❖ Vision / Mission:http ://mcb .com.p k /mcb /mis s ion _vis ion .as p

❖ Corporate information: http://mcb.com.pk/mcb/corporate_information.as

❖ Financial Statements:google.com.pk
❖ Ratios:Analysis of financial statements By Gitt Man

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