ContentsBANKS AND THE IMPORTANCE OF BANKING IMPORTANCE OF BANK
HISTORY OF BANKING IN PAKISTAN AN OVER VIEW OF BANKING IN PAKISTAN
AN OVERVIEW OF MCB CORE VALUE OBJECTIVES OF MCB DEPARTMENTS OF MCB
CASH DEPARTMENT PAYMENT OF CHEQUES AT COUNTER ACCOUNTS DEPARTMENT
CLEARING DEPARTMENT REMITTANCE DEPARTMENT ADVANCE DEPARTMENT MCB
FINANCE TYPES OF FINANCE IMPROVEMENT IN SERVICES AFTER
PRIVATIZATION COMPARISON OF INVESTMENT SCHEMES VARIOUS SCHEMES
OFFERED BY MCB MCB DEBIT AND CREDIT CARD TYPES of MCB ATM Cards
CONCLUSIONS RECOMMENDATION BIBLIOGRARY
Page Number2 2 3 5 6 7 7 8 8 9 11 12 15 17 18 20 21 22 23 26 27
31 32 33
1|Page
BANKS AND THE IMPORTANCE OF BANKINGSome authors are of opinion
that the word bank is derived from the words Banco, Bancus or
Banquet which means Bench (Gillani & Sariwal, 1994). This is
attributed to the fact that the Jewish transacted the business of
money exchange on bench in market place. According to Banking
Companies Ordinance 1962 Banking is business receiving for lending
or investment, of deposits of money, from public repayable on
demand or otherwise and which draw able by cheque, draw and order
or otherwise. A simple definition of bank is An institution whose
debts are widely accepted in settlement of other peoples debt to
each other.(Gillani & Sariwal, 1994, p.1).
IMPORTANCE OF BANKBank plays an important role in promoting
economic development of a country. Bank provides necessary funds
for executive program in the process of economic development. They
collect savings of large masses of people scattered throughout the
country, which is the absence of bank world have remained idle and
unproductive. These amounts are collected, pooled together and made
available to commerce and industry for meting the requirement. This
provides finance for successfully carrying on various stages of
production as well as distribution. Bank stimulate the habit of
savings amount people by the security and interest they offer with
these savings which are deposited by people are in position to
utilize the deposited amount more productively. The bank increased
the transaction capacity of the customers by advancing loans when
they require for additional funds to finance their expanded program
of transaction. In short, the economic development of a particular
country depends on the sound banking system (Gillani & Sariwal,
1994, p. 13).
2|Page
HISTORY OF BANKING IN PAKISTANAt the time of independence on
14th august 1947, there were 487 branches of all banks operating in
the new territory of Pakistan. After 1 year 292 branches windup
their business in Pakistan and remaining 195 branches restricted
their banking operating at a minimum level. Up to 1948s half year
imperial bank of India also worked as an agent of Govt: of Pakistan
& reserve bank of India. On 1st July Quaid-e- Azam Muhammad Ali
Jinnah inaugurated the state bank of Pakistan by passing banking
act in December 1948 with the power to control the operation of
banking companies in Pakistan with extensive power to work as
central bank of Pakistan. The important task of SBP was creating a
sound banking system in country. For the help of SBP court the
Govt: of Pakistan set up a new bank namely National Bank of
Pakistan, to serve as agent of Pakistan. Along with other steps
take by the SBP it also issued Pakistani currency notes in October
1948 in the denomination of Rs: 5, 10, and 100. For expending
business foreign banks, operation was permitted and some other
operations were prohibited up to some limits and liquidate some
unsound banks. In the banking system of Pakistan commercial banks
and development financial institutions and investment, oriented
institutions has played a very important role for improving the
economy of the country. The DFI s consist of about 9 financial
institutions which objects, which vary from once another Pakistan
Industrial Credit and Investment Corporation (PICIC) was
established in 1957 with objects to provide financial and other
assistance to the industrial Pvt. sector for increasing the base of
industrialization in the country. Eventually this institution could
not accelerate the industrial development and other (DFI) namely
Industrial Development Bank of Pakistan (IDBP) was established in
1949. The main object of IDBP is to provide loans to industrial
sector to accelerate the pace of industrialization. 3|Page
Basically Pakistan is agro _ based county and 70% population is
dependent on this sector, which is back bone of the countrys
economy .To achieve the maximum degree of production in this sector
got of Pakistan planned to introduce the agricultural technology
and agricultural inputs by offering credit faculties to the
agriculturist through agriculture development bank of Pakistan
(ADBP) which was established in 1961 by merging agriculture
development Finance Corporation in 1961. Another DFI; NDFC was
established in 1973 with object to provide financial and technical
assistance for the growth of economy. This institution facility
especially the large enterprise in public sector and provides loans
in local and as well as foreign currency. Over comes the deficiency
of financing in private sector and to accelerate the pace. Bankers
equity was established in 1980 and was sponsored by SBP &
Nationalized commercial banks of Pakistan. The main objects were to
bridge the gap in industrial as Consequence of half cost of
projects plus misappropriate matching resources with the sponsors
in existing financial institutions .The bankers equity lay has been
since privatized. For the development of any country employment
plays very important role to keep the train on the track.
Employment enables people for purchasing the goods of other
industries in this way cycle revolves. For reducing the
unemployment in country house building Finance Corporation was
established in 1952 with object to provide credit facility to
individuals, small firms. For the foreign investment Govt:
established the financial institutions with the cooperation of
brotherly Muslim countries e.g. Pak Libya holding company was
incorporate as a joins stock company on the 14th October 1978 for
economic co-operation b/w the Govt: of Pakistan and Libya in the
same manner, Pakistan Kuwait company ltd was established in 1979.
With ltd liability under Pakistani law, in the result of joint
venture agreement signed by the Govt of Pakistan and Kuwait with
initial capital of 250 millions with object to promote economic and
investment collaboration b/w Pakistan and Kuwait by providing
financial assistance in Pvt. public sector(Gillani & Sariwal,
1994). 4|Page
Along with above (SAPICO) Saudi Pak Industrial and Agriculture
Investment Co. Ltd. was established to fill the gap of matching
recourses of sponsors. SAPICO was established with initial, cement,
sugar, vegetable and ghee etc.
AN OVER VIEW OF BANKING IN PAKISTANAt the time of independence
the areas, which now constitute Pakistan, were producing only food
grains and agricultural raw material. For Indo- Pak sub continent
there were practically no industries and whatever raw material was
produced was being exported from Pakistan. How ever commercial
banking facilities were provided fairly well here. There were 487
offices of scheduled banks in the territories now constituting
Pakistan. As a new country without resources it was very difficult
for Pakistan to run its own banking system immediately. There fore
in accordance with the provisions of Indian independence Act 1974,
an expert committee was appointed to study the issue. On the
recommendation of committee Reserve Bank Of India continued to
function in Pakistan till 30th September 1984, so that problem of
time and demand liability, coinage, currencies exchange etc be
settled between India and Pakistan .it was decided that Pakistan
will take over management of public debt and exchange control from
reserve Bank Of India on 1st April 1948, and that India notice
would continue to be legal tender to Pakistan till 30th September
1984. Following the announcement of independence plan in June 1947,
the Hindus residing in the territories now comprising Pakistan
started transferring their assets to India. Moreover the banks
including those having the registered offices in Pakistan
transferred to India in order to bring a collapse of new state. By
30 th June 1948, the number of offices of scheduled banks in
Pakistan declined from 487 to only 195. There were 19 non Indian
foreign banks with the status of small branch offices, which were
engaged solely in export of corps from Pakistan institutions I-e,
Habib Bank and Australia Bank. 5|Page
The imperial Bank of India failed to work satisfactory .The
Government of Pakistan decided and established State Bank of
Pakistan on July1 st1948 on the recommendations of committee of
experts (Nasir, 1999, 6-10). The nationalization of Banks in
Pakistan since January 1st1947 has heralded a new era of
development and progress. It has taken a complete baking system
with effect from January 1981. Privatization process of state owned
banks and enterprises started in 1991. From banking industry, the
MCB was first bank, which has been privatized so as to achieve the
objectives of the bank with strict and progressive policies, and
then ABL was privatized. Yet some other banks I e UBL and HBL are
also being considered for privatization decision already approved
by previous caretaker Government (Annual Report 2007).
AN OVERVIEW OF MCBThe Muslim Commercial Bank was established one
month before the independence in June 1947 first head quarter in
Calcutta and after independence it was shifted from Calcutta to
Dhaka and afterward its Head quarter was shifted from Dhaka to
Karachi in 1948. Among the other 22 scheduled banks with 3525
branches network nationalized on 1 st January 1947 through the
nationalization of Banks Act, 1974 under the nationalized of the
government. Muslim commercial bank also nationalized and at the
time of nationalization premier banks was merged in MCB LTD in
1974. After the failure of the communism, it was realized though
the world the idea of nationalization was not correct and has no
any positive effects on economy. This idea developed especially in
1980 decade under which in sub-continent of Asia its importance was
also realized. In Pakistan Privatization and de-regulation policy
was started in 1998 under this policy the first unit privatized was
M.C.B with a view to stable the economy and to reduce the burden on
national exchequer of other sick units. In 1990 this bank was
announced for privatization on the grounds that 51% shares would be
for general public out of which 26% shares would be offered to a
particular 6|Page
party which will take administration of bank and leady by Mian
Mohammad Mansha who was the first chairman of Muslim Commercial
Bank LTD. Now out of 10% shares only 14.90% shares are being held
by State Bank of Pakistan and all other being held by individuals,
directors and joint stock companies etc (Annual Report of MCB
2007)
CORE VALUETrust We are the trustees of public funds and serve
with integrity & commitment. Ethical behavior is of critical
importance to us. We adopt full compliance with internal and
external policies and procedures, operating within the legal
framework Customer Focus We continuously seek to exceed our
customers expectations, forging and maintaining long term
relationships (Muslim Commercial Bank, Ltd). Innovation We strive
to be the market leaders in innovative products and services
offering customized financial solutions with flawless execution
(Muslim Commercial Bank, Ltd). Teamwork The diversity of our people
is our strength. We inspire and challenge each other working
together to achieve synergy (Muslim Commercial Bank, Ltd).
Achievement Our people are our most valuable asset. We are
committed to a result oriented culture. Our goals are clear and
merit is the only criterion for reward (Muslim Commercial Bank,
Ltd).
OBJECTIVES OF MCBThe main objectives of M.C.B are to earn profit
by investing the money of depositors, who can not utilize that
money for getting required .so the bank invests that money in the
shape of advances and shares, the return or interest charged on
those advances with the depositors. Beside above-mentioned
objectives the Bank serves the society by facilitating them in the
shape of advances to industries etc (Annual Report, 7|Page
2007).
DEPARTMENTS OF MCBMCB is one of the largest private banks of
Pakistan. It offers a well-organized structure of specialized
services distributed among its various departments. This
departmental segregation provides MCB with more proper and
professional approach and efficient means of performing each
service. Departmentalization makes the services more proficient and
specialized procedures for every job are used. At each branch level
the duties are divided into seven departments. There is a chief
manager at the top level of each branch. He is responsible for the
overall performance and working of his branch. The authority is
then divided into two heads at the next level. There is a credit
manager who handles the credit department operations of the branch.
The other one is the operations manager who is responsible for all
the rest of the departments. Each branch is divided into the
following departments: Cash department Clearing and collection
department Remittance department Qureshi. Hameed (personal
communication, June 26, 2008) The functions of each department and
their operations are explained as follows:
CASH DEPARTMENTCash department is the back bone which is the
receives cash from the depositors and make payment to the holder of
cheque, in cash department customers come and deposits their
surplus amount as saving and they may be able to draw the amount as
saving and they may be able to draw the amount to meet their needs
as and when they demand when the people come to get their maintain
outward in the shape of (D.D, T.T, M.T, P.O) from one place to
another they deposit their money in the bank for that purpose the
bank can get money from State Bank of Pakistan. NBP (National Bank
of Pakistan) to adjusts and dealing properly and to carry on its
business. The casher of the department prepares two sheets one for
cash receipt and other for cash 8|Page
payment. As and when customer come to deposit balance in their
accounts called cash deposit and to with draw balances in their
accounts called cash payments. In the end pf working hours the
casher prepares daily cash book showing the remaining cash with him
after the payment and receipts this amount is known as closing
balance of that day and on the next day this will be considered as
opening balance, the cash book contain the column of PLS, Current
& Other Accounts and the balances debited or credited in
appropriate amount heading, according to the nature of the
transaction. The bank not only receives the payment of electricity
bills special schemes, which are operated through commercial bank
and the receipts of sponsorship scheme. T. Shaikh (personal
communication, June 30, 2008)
PAYMENT OF CHEQUES AT COUNTERThe bearer cheques are paid at the
counter, to the bearer of the cheque. When the cheque is presented
on the counter for payment, it must be properly scrutinized, it
must be that, The cheque has a proper number in series. The amount
in words and figures tally. The cheque has signature of the payee
on back side. The cheque is drawn on the bank where it has been
presented. After the basic checks the cashier checks the balance of
the drawer is found sufficient. He also keeps in the mind that
cheque has not got stopped payment by the drawer and either stop
payment is order has been issued. The signatures on specimen
signature card are tally. After being satisfied in all these
respects the payment is made to the payee. Stop Payment Order To
stop payment against any cheque the drawer writes an application to
the Manager of the bank when such application received the time is
marked on it the signature of applicant is verified from specimen
signature card and stamp is affixed. This stamp has blank lines for
cheque no, favoring, date, time asked etc.
9|Page
Issue of Cheque Books The cheque book is the most sensitive item
of bank stationary, so due care is taken in handling them. In Frere
Road Branch the cheque book received from NIFT. The customer are
required to fill a cheque requisition slip which is different in
case of new account holder and existing account holder. For new
account holders a separate slip is provided while the others have
attached the requisition slips in their cheque book, after
receiving their requisition slips. Separate requisition slips are
filled are filled for each account holder. Which are sent to NIFT
in the same bag, which carries clearing? These cheque books are
received in five days. At the top of each leaf of the cheque book
the A/c number and at the place of signature the name account
holder is written a cheque. First seven digits in this number are
for serial number of cheque, next three digits for bank code and
next digits for branch code. After receiving from NIFT these books
are issued to account holder. The series of cheques is written on
the cheque requisition slip and signature of the A/c holder are
taken on same there the entry is made in register and slip is sent
to computer operator to enter the series of cheque numbers. In
order to receive the cheque book the account holder must have an
authority letter from the account holder. At the time of issuance
of cheque book the signatures of the receiving person to ensure
that the right person is receiving cheque book. N. Memon (personal
communication, Aug 05, 2008)
10 | P a g e
ACCOUNTS
DEPARTMENT
Accounts department posts the day-to-day transactions of every
department. All the departments have to submit their detailed
progress reports to this department. Accounts department prepares
the daily, weekly, fro nightly, monthly, quarterly, semiannually,
and yearly statements. Which are to be submitted to Head Office? In
this department of bank, different types of accounts are
maintained. Customers who want to open an account in bank have to
interact with the officers of this department R. Ghumro (personal
communication, Aug 12, 2008) Types of Accounts Three main types of
accounts are maintained in the bank are as follows: Current Account
The current account can be opened in bank with the initial of Rs.
1000. The depositor does not receive any interest against current
account deposits. There are no restrictions of withdrawal of money
from the bank. But in case of over draft obtained by customer under
current account has to abide by the rules and regulations. PLS
Account PLS account is based on the Profit and Loss Sharing. The
amount, which is deposited by the customers in the bank, is
involved in business or it is landed to the investors, both are
bound to share and losses arising from such transaction. Term
Deposit Account These deposits are called as time deposits, because
the deposits are based on fixed duration. The period for which
these deposits are kept with bank ranges from seven days to 10
years in the light of agreement between customers and the bank. The
profit allowed on these deposits depends on the duration, longer
the duration, the higher will be the profit (Terms & Conditions
account opening, 2007, p. 1, 2)
11 | P a g e
CLEARING DEPARTMENTWhen cheque drawn on one bank is present for
deposit in other bank then it is dealt with clearing. There are
many kinds of clearing cheque and procedure to collect cheque from
different banks. This is different from bigger cities to smaller.
However the following modes of the clearing cheque are generally
used in commercial banks. Clearing Cheque Transfer Cheque C.C
Cheque Same Day Clearing M. Rehman (personal communication, Aug 15,
2008) Clearing Cheque There are two types of clearing cheque
clearing. Clearing Sent and Receive. i) Clearing Sent Clearing sent
consist of the cheque drawn on any other bank in the same city but
presented for deposit in our branch. When these cheque received on
the counter. Clearing stamp is affixed on the pay in-slip and on
the cheque and at the backside of cheque payees account credit or
(According the nature of payees cheque) stamp is affixed. Clearing
stamp with next days date is used. Because cheque received on one
day are cleared next day. All cheque and voucher recorded on daily
voucher sheet after the affixed clearing stamp and payees account
credited stamp. Cheque and vouchers recorded separately. Vouchers
are recorded debit side and cheques are recoded credit side. At the
end of the day cheque and pay-in-slip are separated. Cheques are
sent for clearing to NIFT (National Institutional Facilitation
Technology) for clearing, while payin slip serve the purpose of
vouchers in the branch, and on realization of the cheque. Customer
accounts credited on the strength of the credit voucher. ii)
Clearing Received Clearing received consist of cheque drawn on our
bank but deposited in other banks of the city. These cheques when
received from the NIFT are properly scrutinized 12 | P a g e
and debited to their respective accounts. The cheques that
cannot be paid due to any reason are return to NIFT. Cheque Return
When clearing cheque are received and sent. It is not necessary
that all cheque received or sent will be passing, if there is in
sufficient balance customers account. Cheques are being returned.
There are many reasons to return the cheque. There are two types of
cheque returned. i) Inward Cheque Return Inward cheque returns are
those, which we had sent in clearing. For the amount of these
cheques their respective accounts debited and the cheque are
returned to the parties after making entry in register. ii) Outward
Cheque Return Outward cheque returns are those, which come in our
branch for clearing. We recorded these cheques in the register and
attach a cheque return slip with them and are sent back to NIFT.
Transfer Cheque This second category of cheque received on clearing
counter. Transfer cheques are those drawn on our branch and
presented for deposit in the same branch. When these cheques are
received then transfer stamp affixed on pay-in-slip and the cheque
is sent to the computer operator. Because the drawer is also from
our bank then the cheque is immediately credited in the payees
account. Cash Collection Cheque Cheque presented for deposit in our
bank but drawn on a bank out side the city are sent for collection.
These cheques are recorded in the C.C register and a C.C slip is
filled in duplicate. Its original copy is attached with cheque and
sent for collection while the duplicate copy remains with us
attached with pay-in-slip. These cheques are sent to our main
branch in the city where drawers bank is situated. Incase of cheque
drawn on any of the branches of MCB the cheque is sent directly to
that branch. The records of the C.C sent two vouchers are prepared
BRBC debit & BCBR
13 | P a g e
credit for the amount of cheque. At the time of realization of
C.C the entry passed earlier is reversed. The account of the payee
is debited by the amount of postal charge and 25% recovered and
commission on bills (Gillani & Sariwal, 1994, p. 23-35).
Same Day ClearingThere are two types of same day clearing,
cheques of same day clearing sent and same day receive. Same Day
Clearing Sent Clearing sent consist of the cheques drawn on any
other bank in the same city but presented for deposit in our
branch. When these cheques are received on the counter, same day
clearing stamp is affixed on the pay-in-slip and the cheque and on
back side of cheque payees account credited stamp affixed. Cheques
received on which date also cleared on same date. All cheques and
vouchers recorded on daily voucher sheet after the affixed same day
clearing stamp and payees account credited stamp. Cheques and
vouchers recorded separately. Vouchers are recorded debit side and
cheques are recorded credit side. Same Day Clearing Received
Clearing received consist of cheques drawn on our bank but
deposited in their bank of the city. These cheques when received
from the NIFT are properly scrutinized and debited to there
respective accounts as quick as possible. The cheques that can not
be paid due to any reason are returned to NIFT. S. Ahmed (personal
communication, Aug 20, 2008). Note: Same day clearing, cheques must
be at least amount of Rs.500000 and bank charged Rs.300 on clearing
of cheque and in the same case of returned bank charged Rs.400.
14 | P a g e
REMITTANCE DEPARTMENTREMITTANCE Fast, secure and easy-to-use,
MCB's Remittance Services is efficient ways to transfer money
overseas. You can remit funds from any country to Pakistan through
Swift System. Posting department posts the day-to-day
transactions of every department. Bank provides the facility of
remitting the funds from one country to another county and inside
the county, within some restrictions. It makes the devilry of funds
much quickly and safety and thus saves the time of business
community and the general public. The remittances department is
divided into two sections. S. Ahmed (personal communication, Aug
20, 2008) A. In-Land Remittance. B. Foreign Remittance. a. In- Land
Remittance In land remittance means in-flow and out-flows of the
funds from one branch to another branch within the country though
banking instruments, is termed as in land remittance.
Banking Instruments for In-Land Remittance1 2 2 3 4 5 Demand
Draft Travel Cheque Pay Order Telegraphic Transfer / Telex or Fax
Transfer Mail Transfer Online (Cross Branch Transaction). It is a
written order drawn by one branch of the bank to the other branch
of the same bank, under the certain agreement to pay a certain sum
of money to the order of the 15 | P a g e
1. Demand Draft
special present, can be used from one city to another city. Bank
charges the commission according to the amount. 2. Travel Cheque
MCB Bank has been at the forefront of providing its customers with
new and innovative products and financial instruments that are
safe, secure and profitable. MCB Rupee Traveler's Cheques were
first introduced in 1993 as safe cash for traveling and travel
related purposes. The product has been extremely popular and is
preferred over cash by customers while traveling and in all walks
of life. MCB Rupee Traveler's Cheques- The safest way to Carry Cash
Rupee Travelers Cheques Features Easily available: Buy them from
any of the designated branches in Pakistan. As good as cash: MCB
RTCs are safe to carry and can be used without any inconvenience
especially by Travelers. Easily encased: At any designated MCB
branch. Easily refunded: in case of loss or theft, you can get the
full amount back. Exclusive security features: Due to special
printing and safety precautions, Cheques cannot be duplicated.
Denominations: Available in denominations of Rs 1000, Rs 5000, Rs
10,000 and gift cheques of Rs 500. Valid until Used: Validity of
Cheques indefinite. 3. Pay Order Pay order is issued for banks own
payments purpose. But in practice these are also issued to customer
for making payments. 4. Telegraphic Transfer / Telex or Fax
Transfer Transfer of funds from one branch to another branch of the
same bank under special arrangements for the payment to the
beneficiary through Telegram/Telex or Fax is called telegraphic
transfer. It is necessary that there should be account mentioning.
The 16 | P a g e
bank charges are same as on demand draft. 5. Mail Transfer
Transfer of funds from one branch to another branch of the same
bank within city or out of city through mail or courier service is
called mail transfer. 6. Online This is a Transfer of funds between
two branches through Internet. Every branch is connected through
server thats why ever branch have facility to transfer fund in the
account of another person, which is locate in different cities of
Pakistan. So these branches are called online branches (Annual
Report, 2007). FOREIGN REMITTANCES The term Remittance means to
send money by bank or by post. Thus the act of remitting money from
one place to another place is called Remittance. According to
foreign remitting circular, the function of issuing and accepting
of foreign remittance is performed by the Foreign Remittance
section to domestic resident as well as to the foreigners. This
means that any person either of Pakistani nationality or foreigner
can send money from Pakistan to another country. The bank also
provides the foreign exchange in the shape of the travelers cheque
and credit cards to intending visitors. Travelers cheque are only
issued to that person, who has an account with the M.C.B. S. Ahmed
(personal communication, Aug 22, 20080
ADVANCE DEPARTMENTThis department lends money to the customers /
account holders for the purpose of financing the account holders.
There are various types of advances. 1. Over Draft. 2. Cash Credit.
3. Loans. 4. Secured Loans 5. Un Secured Loans. 17 | P a g e
Usually the banks lend credit on short term bases. They lend
loans to any body but that any body customer must fulfill the 5 Cs.
1. Character. 2. Capital 3. Condition. 4. Collateral. 5. Cash Flow.
Haroon (personal communication, Aug 25, 2008)
MCB FINANCEPERSONAL LOAN
The more you praise and celebrate your life, the more there is
in life to celebrate. MCB Personal Loan shortens the distance
between your dreams and your celebrations. It is fast, flexible and
affordable Fast Speedy loan approval No guarantor / security /
collateral required Flexible Borrow up to Rs. 1,000,000 1 to 5-year
tenures Partial and full adjustments allowed anytime during the
tenure Optional insurance. Equal monthly installments Lower
interest rates Higher loan limits Special Benefits Loan amount
renewed anytime after nine months. Existing Customers 18 | P a g
e
Fill in and submit the application form along with a copy of
your CNIC if you have been a customer of MCB Car4U, MCB Pyara Ghar
or MCB Business Sarmaya for at least 12 months Get greater loan
limits if you are an existing MCB Branch Customer. Get 1 % discount
if you already have a similar facility from any other bank and want
it transferred to MCB Personal Loan through our BTF option. Credit
Card BTF option is also available at very competitive rates.
Prepayment Penalty You can fully pre-pay or partially adjust your
loan only once a year subject to a penalty as given in chart below.
Also, partial adjustment must be at least equal to 6 monthly
installments (Annual Report, 2007).MCB CAR4U
MCB CAR4U Auto Finance assists the customers in many ways. It is
affordable, with lowest mark up, flexible conditions, easy
processing and, no hidden costs. MCB Car4U offers the following
benefits to its customers: Option of financing or leasing.
Competitive financing rates. Flexible equity/rate options.
Financing tenure from 1-7 years. Low processing fee of Rs. 3,500/-.
It is valid for salaried personnel on contract. The eligibility
criteria for Car4U scheme is: Pakistani national residing in an
approved area/city. Not less than 21 years for businessmen, or 22
years of salaried personnel, and would not be more than 70 years on
the maturity of the facility of Auto Finance. Salary/Income is at
least Rs.12, 000/- per month with monthly installment not exceeding
50% of the take-home salary/income. Businessman/Self-employed
person with a minimum experience of 1 year in the 19 | P a g e
same business/profession. Permanent employee. For contract
employees, 2 years on the job with the current employer or 3 years
of overall experience. Its distinctive features are: Insurance MCB
Car4U gives an option to choose from a panel of reputable Insurance
companies and secures auto finance deal, on discounted rates.
Flexibility MCB CAR4U provides complete flexibility in creating
customized deals. The client has the power to choose the rate/
equity option that suits him the best. They can also choose a
suitable tenure between 1-7 years. Excellence It provides
opportunity to make early payments, twice a year. It also gives
access to a wide dealership network with quick processing. There is
convenient access through more than 900 MCB branches. There are
Independent Service Quality Representatives to assist customers.
MCB Car4U offers a variable rate i.e. 12% markup at 10% equity. It
also offers a 'No Documents' option where the markup rate is 13% at
20% equity. The three months deferred product provides the customer
with 3 months of financial relief after making their down payment;
the rate for this option is 12.5% (MCB CAR4U, 2007).
TYPES OF FINANCEThere are 4 main types of finance. 1. Running
Finance. 2. Demand finance. 3. Staff finances. 4. Cash finance. 1.
Running Finance It is provided only to current account holders
regional office can sanction the loan
20 | P a g e
maximum one lac. The General Manager of the Circle office
Hyderabad has the power to sanction the loan up to 1 Million
rupees; beyond this limit the head office will be the sanctioning
authority. 2. Demand Finance The rules and demand finance are same
as for running finance. PLS account holder can also take the loan.
The repayment of the loan will be made by monthly equal
installments. 3. Staff Finance The bank provides this finance only
to its staff. The member can get the loan for these purposes. i)
ii) iii) House Building Personal vehicle. (Car) Computer Loan.
4. Cash Finance Cash finance is provided on markup bases
reducing balance system. The customer would be required to adjust
the advance within the expiry period, but he or she would operate
the account freely, within the sanctioned limit (Annual Report,
2007).
IMPROVEMENT IN SERVICES AFTER PRIVATIZATIONAs told by the branch
Manager Mr. Abdul Hafeez Qureshi, at the marketing and business
development division, the MCB was privatized in April 1991, after
privatization the bank made a remarkable growth and improvement in
its services.
COMPUTERIZATIONModernization and computerization of branches is
an aspect which has attract more clients, the latest equipment has
been provided to the most of the branches especially, the computer
for the ledger keeping & etc. Now MCB Install software with
name Symbols. This software is very help to employees during the
time of transaction, at time of the posting automatically
transaction are posted in the general ledger. Those 21 | P a g
e
branches which are Symbols through out the Pakistan do not pay
any charges against online money transfer. So this software is very
helpful for employees as well as customer.
CONSULTANCY SERVICESAfter privatization a public sector unit,
prospective buyers need professional assistance MCB offers the
specialized services for the valuation of industrial units,
preparing bid documents and arranging finance for the purchase of
units. FAX PRESS The fax and telexes facilities provide speedy
transfer of documents within Pakistan or all around the world, just
within a minutes, such technology was not introduced before
privatization.
COMPARISON OF INVESTMENT SCHEMESAfter privatization the bank
introduced several saving schemes to attract the customers and to
meet their needs. Capital Growth Certificate Scheme. Foreign
Currency Scheme. Mahana Khushali Scheme. Hajj Mubarak Scheme. Rupee
Travelers Cheques. Photo Credit Scheme. Khushali Bachat Account.
MCB Gold 365
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VARIOUS SCHEMES OFFERED By MCBEvery bank provides different
schemes under different circumstances, policies for their customers
and general public. From time to time M.C.B Bank Limited offered
several schemes to general public and its account holders. The main
motive of their schemes is to create the habit of saving among the
people of the country. M.C.B Bank Limited attracts the people with
reasonable rates of return on the schemes (Investment Scheme, 2007,
p. 1-6).
VARIOUS SCHEMES OF MCBFollowing are the schemes, which are
offered by M.C.B Bank Limited. 1. M.C.B Car for You. 2. Current
account 3. Pls account 4. khushali bachat account 5. Agricultural
Loan. 6. House Finance. 7. ATM / Debit Card 8. Debit Card. 9. Hajj
& Umrah Services. 10. M.C.B Master Card & Smart Card 11.
M.C.B Rupee Travelers Cheque. M.C.B CAR FOR YOU 23 | P a g e
This scheme of M.C.B has attracted the masses of people with its
lowest rate of 13% markup and a short period of document processing
to facilitate and save the precious time of their customers.
CURRENT ACCOUNT The current account can be opened in a bank with
the initial amount of Rs. 1000. The depositor does not receive any
interest against current account deposits. There are no
restrictions whatever, on withdrawal of money from the bank. But in
the case of over draft obtained by the customer under current
account has to abide by the rules and regulations. PLS ACCOUNT
There are the accounts, which are based on the Profit and Loss
Sharing. The amount, which is deposited by the customer in the
bank, is involved in business or it is landed to the investors,
both are bound to share in then profit as well as the loss arising
from such transaction. KHUSHALI BACHAT ACCOUNT Khushali Bachat
Account provides a high rate of return & lots of other benefits
to its account holders. According to M.C.B brochures, the rate of
profit is 8% per annum. AGRICULTURE LOAN This scheme of M.C.B has
increased the hopes of the formers who cant afford or in need of a
financial help in their agricultural system. This scheme has helped
many farmers to develop or cultivate their lands. HOUSE FINANCE
This scheme has 3 different aspects or options from which the
customers have to choose as per their own need. Either the customer
wants to buy a house or want to renovate the house or want to build
a house;
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M.C.B provides finance in this regard at the reasonable markup
i.e. 11%.
AUTOMATED TELLER MACHINE (ATM) ATM machines have been installed
in 102 branches of M.C.B in all over cites of Pakistan extending
round the clock money withdraws facilities to the bank clients.
DEBIT CARD This is a new and attractive scheme of launched by
M.C.B. in this scheme all that u have in your account is in your
card. So you can buy accessories on the spot with this card and the
payment is being made easily from your account, by simply debiting
your account. Thats why it is called as SIKA-E-RAIJ-UL-WAQT. HAJJ
& UMRAH For performing Hajj & Umrah sound financial
background is need, which every one can not have. So H.B.L also
helps the pilgrimage in this regard, by financing them to perform
Hajj & Umrah. M.C.B MASTER CARD & SMART CARD Both
facilities will be available to the M.C.B clients having a foreign
currency account with the bank. MCB RUPEE TRAVELLERS CHEQUES M.C.B
Rupee travelers cheques are as good as cash. M.C.B rupee travelers
cheques are accepted at major shops, travel agents, hotels,
business establishments and M.C.B branches all over the Pakistan
(Investment Scheme, 2007, p. 10-18).
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MCB DEBIT AND CREDIT CARDINTRODUCTION Introducing new banking
products, the introduced 24-hours cash withdrawal ATM services in
1996. These services have been extended to 13 cities of the country
and 147 online branches are covered over a network of 91 ATMs at
that time. The installation of ATMs help the concerned branches in
many ways i.e. counter services are improved and the rush of small
withdrawal at centers are eliminated / reduced. Besides the
cardholder are provided a convenience of 24-hours cash withdrawal.
S. Ahmed (personal commission, Aug 15, 2008) Facilities on ATM The
following facilities are provided on ATMs to cardholders.
Withdrawal of cash with in 30 seconds, 24-hours and 365 days of the
year. Balance inquiry of MCB rupee account. Mini statement. Fund
transfer. Fast cash. Application for obtaining MCB ATM Cards
Customer of online branches of our bank willing to obtain MCB ATM
card will furnish application from dully filled in complete in all
respects, signed along with copy of NIC to the online branch where
he/she maintaining his/her accounts. The branches will process the
application and take up the matter with ATM card department of
information technology division, principal office, Karachi MCB head
office issuance of the MCB ATM cards.
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The department after the preparing the MCB ATM card of the
account holder and allotting PIN i.e. personal identification
number will send both of these items separately in sealed envelops
to the branch from where the same will be delivered to the account
holder after obtaining the proper acknowledgement recites. Users
guide also provided to the card holder along with PIN. Spending
Limits Only MCB gives you the flexibility to choose from a range of
card usage ATM Withdrawal Limit (Rs.) Local Classic Gold
International Classic Gold 10,000 25,000 10,000 25,000 POS
Purchasing Limit (Rs.) 50,000 100,000 100,000 150,000
limits.SmartCard is available in the Classic and Gold category
with a further choice of Local or International versions. With
these card categories, supplementary cards for your family members
are also available. The difference between the Classic and Gold
categories is based on their purchasing and withdrawal limits as
given in the above table (Terms & Conditions MCB 24/7 Smart
Card, 2007, p. 6, 7).
TYPES of MCB ATM CardsTwo types of MCB ATM Cards are issued I.e.
Master Card & Smart Card. PURCHASING Smartcard is your debit
card for cash free convenience. Use it for your shopping and
purchases at a rapidly growing nationwide network of merchant
locations including petrol pumps, stores, bakeries, departmental
stores, jewelers, travel agents, restaurants, chemists, hospitals
etc. Its simple, safe and convenient to use: Shop at locations
displaying the Cash Free sign and the MCB Cards logo. For payment,
no need to pay cash. Simply present your card. 27 | P a g e
Merchant will swipe your card for the amount of the transaction.
You simply authorize your transaction by entering your PIN
(Personal Identification Number) yourself. The PIN is for extra
security. The purchase amount is debited from your account To make
your transaction safe and secure, MCB has installed State of the
art smart terminals at your merchant locations, to ensure your
personal convenience. At restaurants & fuel Stations your
merchant will bring portable terminals to you for your PIN entry.
Existing MCB ATM Card holders have been automatically provided with
the debit facility. So go use it now! International Usage
International cardholders have the un-matched advantage of using
this facility at millions of Locations worldwide carrying the logo.
BILL PAYMENT Hassled by long queues and short bill- T accepting
hours at limited locations? Now you can use the Smartcard to pay
your utility bills at the largest nationwide network of MCB ATMs.
Pay online and get instant confirmation of payment. Make bill
payments upto Rs. 20,000 per day per card. Currently available for
payment of gas bills of Sui Southern Gas customers, this facility
is being expanded to cover all utility bill payments. Pay as a
registered or non-registered user. Registration will help you avoid
the time delay in entering details each time you carry out a
transaction. Please fill out the MCB utility bill (i.e. SSGC)
payment application form available for your convenience at your MCB
online branch. FUNDS TRANSFER 28 | P a g e
Want to avoid the hassle of writing cheques and time-delays in
making pay orders, demand drafts and telegraphic transfers? Enjoy
the benefit of MCB Funds Transfer facility with your Smartcard at
the largest nationwide network of MCB ATMs. Transfer funds between
a maximum of 8 pre-registered online accounts within the growing
network of MCB branches across 30 cities. Get round the clock
convenience with the largest nationwide network of MCB ATMs.
Transfers take place instantly & funds become accessible for
use You can use the balance inquiry facility to reconfirm for your
Satisfaction. MCB took the award of First Asian Bank of the year,
due to best performance. The branch is situated in main business
area of the town where the huge transactions mostly a prated by the
business man even then the MCB Frere Road Sukkur is performing
better services to the clients. The over all facilities are
attractive from bank to the customer.
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CONCLUSIONSAfter the completion of the internship at M.C.B
internee had drawn the following conclusions. The traditional
banking system is still followed by MCB. Like Utility Bills are
recorded manually etc. The process of documentation is lengthy and
time consuming. MCB Frere Road Sukkur is failed to provide good
quality service according to the expectations of the customers. The
relationship between employees and customers is satisfactory.
Customers face some difficulty in dispatching of bank documents.
The bank has managed to achieve greater profitability by
introducing innovative products and implementing effective
strategies. The branch managers are usually given very little
regarding sanction of advances
and over draft whereas the responsibilities are numerous. The
bank staff has been found as less satisfied with bank policies and
the recent
retrenchment in the bank has created unrest and panic.
Administrative expenditure is very high. The increase in
profitability resulted in increase in share price and earnings per
Share of the bank. The deposits and advances of the bank have grown
consistently over a period of last 5 to 6 years The bank also has
the facility of Loan /credit products including products like MCB
CAR 4 U, MCB Pyara Ghar, etc. The MCB ATM Network is the largest
and most advanced of its kind in the country, and is part of MCB's
continuing efforts to provide convenience to its customers. Lockers
facility is only available in limited branches. 30 | P a g e
Now they install new software Symbols, so now they improving
fast day by day. Limitation of withdrawals in MCB ATM cards. ATM
card services are facilitate in more than 70 cities of Pakistan.
More than 500 branches are located in Pakistan ant at least 100 MCB
ATM machine in Pakistan. A job rotation program should be followed
for the individuals after three years at the bank in order to keep
them motivated and energetic so that doing the same job for years
may not bore them. Despite all these facts there are some areas,
which needs to be improved, Equal distribution of work should be
done and bring professional people to all of its branches in order
to meet the requirements of a new era and to fulfill the needs of
21st century.
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RECOMMENDATIONIn the whole internship (6 weeks) at MCB, I saw
lots of deficiencies at branch. So I give some suggestions which
are as under. In PLS term deposit account you fixed a period,
called date of maturity such cash deposited under PLS term deposit
account for 6 months and over but less than one year. It means in
such case date of maturity is after the 6 months and if depositor
cash his money before the date of maturity bank treated this term
deposit account as a PLS saving account. I think that this
exemption is not good because you made it as a fixed account, you
are liable to assist people for the completion of period, dont
allow to any one to with draw their money before the date of
maturity the concept of PLS term deposit account would be end or
died. Modern banking system should be adopted. MCB must improve the
quality of services. MCB should create an ideal working environment
in order to create good relations between employees and customers.
Safety deposits and lockers should be provided to the customers for
their safe keeping of money and valuables. MCB should choose a
reliable courier services or mail to remove the difficulty of
customers in dispatching of bank statements. Processing of loans
should be simplified and the time for the loan approval should be
revised. There are lengthy and cumbersome legal procedures that
make the customer more reluctant to come to the bank. The emphasis
of the bank should be on speedy processing and prompt services. MCB
must concentrate on promotion of their products and services. Bank
should disburse its loans to diversified fields. The use of the
technology should be further improved. Although they have computers
but most of their work is manual. 32 | P a g e
Time deposits should be properly administered Fund Investments
should be made after careful analysis.
BIBLIOGRARYGillani, A., & Sariwal, G. (1994). Banking.
Karachi: Kifiyat Academy. Muslim Commercial Bank, (2007). Annual
Report. Karachi. Muslim Commercial Bank (2008). Our Values.
Retrieved September 10, 2008, From
http://www.mcb.com.pk/mcb/our_values.asp - top Terms &
Conditions For Account Opening. (2007). Guide line for account
opening [Brochure]. MCB. Terms & Conditions For MCB ATM 24/7.
(2007). Guide line for ATM Cards [Brochure]. MCB.
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