Ishrat Fatima (022)

8/12/2019 Ishrat Fatima (022)

1/71

INTERNSHIP REPORT ON

MCB BANK Limited

Internship Report submitted to the Faculty of Commerce &Accountancy Partial Fulfillment of

the Requirements for the Degree of Master in Commerce

By:

Name of Student:Sana javaid

Roll Number: 12052054-045

Date of Submission:15 september 2013

UNIVERSITY OF GUJRAT

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

Signature of program coordinator--------------------------
http://www.uog.edu.pk/index.ht


2/71

2

University of Gujrat

(G.T Road SciencesCampus)

Faculty of Commerce&Accountancy

Course Title: Internship (Report based on Internship)

Course Code MGT-403


3/71

3

(2)

All the praises are for the ALMIGHTY ALLAH, the CREATOR of universe, the most

Gracious& merciful, and the source of all knowledge, wisdom within and beyond my

Comprehension. ALLAH is the only, WHO can help us in every field of life. I bow my

Headbefore HIM who enabled me to work on this report and helped me to complete

This report successfully. All praises after ALMIGHTY ALLA Haredueto HOLY

PROPHET HAZARATMUHAMMAD (Peace be upon him), the most perfect exalted

among, WHO & us is forever a torch of guidance and knowledge for humanity as a

Whole. Afterward, I am greatly indebted to my Parents I here by provided a golden

Opportunity to perform working activities at MCB for a period of 6 weeks. The aforesaid

Occupancy bestow me precious moments to make learning and get experience of the

practice life with a successful approach.


4/71

4

(3)

S. no. Details Page no.

1

Executive Summary

08

2

Research Methodology

09

3 CHAPTER # 1History of MCBIntroduction of MCB

10

4

Over view of MCB

11

5

Vision Statement

11

6

Mission Statement

11

7

Values Statement

12

8

Corporate profile

13

9

Investors relation

14

10

Awards Of MCB

15

11

Business Volume

17

12 ServicesI. Trade Finance

II. Credit ManagementIII. Investment Banking

19

TABLE OF CONTENTS


5/71

5

13

Producto Cardso MCB Visao Travelers Cheuqeso Remittanceo Utility Billso Lockers

20

14

Upcoming Product

21

15

PEST Analysis

22

16

Contribution of MCB toward Economic Development

23

17

Organization Structure

24

18Branch Network

25

19 Number of Employee

26

20 Main OfficesMain Department

27

21Comment on Organization Structure

34

22 CHAPTER # 2

Work Done by Internee

35

23 First Two Week

DEPOSIT SLIPS

36


6/71

6

CHEQUES

INTRODUCTION OF ACCOUNTS

ATM CARD

24 Third & Fourth Week

CLEARING

NIFT

48

25 Fifth Week

REMITTANCE APPLICATIONS

Online Payment:

Demand Draft:

Pay Order:

Mail Transfer And Telegraphic Transfer:

55

26 Sixth Week

LOCKERS FACILITY

CASH DEPARTMENT

Clearing:

61

27 SWOT Analysis 65


7/71

7

28

Problems And Recommendation

67

29

Glossary 68

30

Conclusion

7031

References

71


8/71

(4)

This report is about MCB, its history and functions of the bank. This report contains detail about

what I have done and learned in my six-week internship in MCB Kutchery Chowk Gujrat.It

starts with the short introduction and background and introduction about the management of The

Bank. The vision of the bank along with its mission and existing status has also been discussed.

This report contains detail about Business Practicesin MCB Kutchery Chownk Gujrat.

The purpose of this exercise was to learn while working in the practical field. Specially, the

knowledge related to the General Banking, Foreign Exchange and Advances. During my

Internship in MCB I worked in Remittances, Advances, Foreign Exchange and Customer Service

Office department and I successfully completed all the task/duties that were assigned to me. It

has really helped me to observe what extent the bookish knowledge is being practiced in real

field. This report contains the Comparison of other banks with Bank Alfalah Limited, current

financial position of the bank, the business process of the bank and all my learning, during the

internship period.


9/71

9

The report is based on my

two months internship program in National Bank of Pakistan. The methodology reported for

collection of data is primary as well as secondary data. The biggest source of information is my

personal observation while working with staff and having discussion with them. Formally

arranged interviews and discussions also helped me in this regards.

Primary data:Personal observation

Interviews of staff

Secondary data:Journals

Magazine

Annual reports

Internet


10/71

1

(5)

CHAPTER # 1


11/71

1

(5.1)

MCB Bank previously known as Muslim Commercial Bank, today is one of the enormous banks

of Pakistan, was established in 1947.

As it was incorporated in 1947, MCB soon earned the reputation of a solid and conservative

financial institution managed by expatriate executives.

In 1974, MCB was nationalized along with all other private sector banks. This led to

deterioration in the quality of the Banks loan portfolio and service quality. Eventually, MCB

was privatized in 1991.

During the last fifteen years, the Bank has concentrated on growth through improving service

quality, investment in technology and people, utilizing its extensive branch network, developinga

large and stable deposit base and managing its non-performing loans via improved risk

management processes.

The strength and stability of MCB Bank Limited is evident through the credit rating assigned by

JCR-VIS Credit Rating Company Limited of AA (Double A) for long to medium term and A-1

(A one) for short term.


12/71

1

(5.2)

MCB Bank Limited is a full service institution offering consumer, corporate and investment

banking facilities to its customers. The banks widespread and growing network of branches in

the four provinces of the country and abroad, together with its corporate offices in major cities,

provides efficient services in an effective manner.

MCB Bank has attained its goodwill and fame rapidly in local financial market and around the

globe, the 9 to 5 full day banking and banks 24 hours online banking services gives it an edge

over other banks, while its fastest ATM network facility encompassing more than 34 cities

around the country provides customers such convenience that they expect from the bank.

All branches of the bank are located at vintage points covering a large segment of population and

business houses MCB is one of the leading banks of Pakistan with a deposit base of about Rs.

280 billion and Total assets of around Rs.300 billion. It has 994 branches and almost 5 branches

outside Pakistan. It has 9011 employees and 4350245 numbers of accounts according to 2009

data.

5.2.1.1)

Challenging and Changing the Way you Bank

5.2.1.2)

To maintain long term customer relationships through outstanding service and convenience


13/71

1

5.2.1.3)

Trust:MCB is the trustee of public funds and serve with integrity & commitment. Ethical behavior is

importance for them. They adopt full compliance with internal and external policies &

procedures, operating within the legal framework.

Customer Focus:MCB continuously seek to exceed their customers expectations, forging and maintaining long

term relationships.

Innovation:MCB strives to be the market leaders in innovative products and services offering customized

financial solutions with flawless execution.

Teamwork:The diversity of their people is their strength. They inspire and challenge each other working

together to achieve synergy.

Achievement:Their people are their most valuable asset. They are committed to a result oriented culture. MCB

goals are clear and merit is the only criterion for reward.

Social Responsibility:As responsible citizens MCB contributes to the social welfare of the community they live in.


14/71

1

5.2.1.4) Board of Directors Main Mohammad Manshaa Chairman S.M. Muneer Vice Chairman Tariq Rafi ShahzadSaleem Sarmad Amin MianUmerMansha Aftab Ahmad Khan AtifYaseen Dr. Muhammad Yaqub Ali Munir President / CEO

Advisor

RazaMansha

Audit Committee

Dr. Muhammad Yaqub Chairman MianUmerMansha Member Aftab Ahmad Khan Member Mr. Tariq Rafi Member

Chief Financial Officer

Tahir Hassan QureshiCompany Secretary

AbdusS.Sami


15/71

1

Auditors

KPMG TaseerHadi& Co Chartered Accountants Riaz Ahmed & Co. Chartered Accountants

Legal Advisors

Mandiwalla&Zafar Advocates & Legal Consultants

Registered Office

MCB Building , F-6 / G-6 Jinnah Avenue, Islamabad

Principal Office

MCB Tower Chundrigar Road, Karachi

Registrar's and Share Registration Office

THK Associated (Pvt.) Ltd. Shares Department, Ground Floor Modern Motors House Beaumont Road, Karachi

Investors Relations: MCB Bank Ltd shares are traded on Karachi, Lahore & Islamabad Stock Exchanges.

MCB Bank GDRs are listed on the London Stock Exchanges Professional Securities

Market.

The information presented within MCB Investor Relations is obtained by MCB fromsources believed by MCB to be accurate and reliable. All information is provided as is

without warranty of any kind and they strongly recommend customers to read their

disclaimer text.


16/71

1

(5.2.3)

MCB has become the only bank to receive the Euro money award for the seventh time and Asia

money award for fifth time in the last ten years

MCB won Best Banking Asia award in 2008. MCB also won the "Best Bank in Pakistan"

award in 2008, 2006, 2005, 2004, 2003, 2001, 2000. In addition, MCB also has the distinction of

winning the Asia Money award in 2009, 2008, 2006, 2005 & 2004 for being "The BestDomestic Commercial Bank in Pakistan".

2010 The Asian Banker: Strongest Bank in Pakistan

2010 The Asian Banker: Leadership Achievement Award

2010 MMT: Best Bank Led MMT Service

2010 ICAP / ICMAP: BCR Award 2009-Banking Sector

2010 SAFA: Certificate of Merit Award

2009 Asia money: Best Domestic Bank in Pakistan

2009 The Asset: Best Domestic Bank in Pakistan

2008 Euro money: Best Bank in Asia

2008 Euro money: Best Bank in Pakistan

2008 Asia money: Best Domestic Bank in Pa




17/71

1








(5.2.3.1

Business volume in terms of Revenue, Assets, Deposits, Advances and Investment is

as under.

o Total Revenue (Interest Income + Non Interest Income)Years 2010 2009 2008 2007 2006

Total Revenue 12,017,858 12,417,459 12,824,663 8,483,996 6,907,542

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

06Years 07080910

Total Revenue


18/71

1

(5.2.4)

Year 2010 2009 2008 2007 2006

Total Assets 1,035,025 944,583 817,758 762,194 635,133

Deposits 832,152 727,465 624,939 591,907 501,872

Advances 477,507 475,243 412,987 340,319 316,110

Investments 301,324 217,643 170,822 211,146 139,947

Share holders 'equity 103,762 94,142 81,367 69,271 53,045

Pre-tax Profit 24,415 21,300 23,001 28,061 26,311

After-Tax Profit 17,563 17,562 15,459 19,034 17,022

Earnings per Share Rs. 13.05 13.05 11.49 14.15 12.65

Number of Branches 1289 1,287 1,276 1,261 1,250

Number of employees 16457 16,248 15,441 14,079 14,019


19/71

1

(5.2.4.1)

(1) TRADE FINANCE

Under Corporate Banking MCB offers trade finance services that include an entire range of

import and export activities including issuing Letters of Credit (L/Cs), purchasing export

documents, providing guarantees and other support services.

(2) CASH MANAGEMENT

MCB network of over 900 branches in Pakistan enables them to collect and disburse payments

efficiently with their cash management services. This also enables them to offer customers a

choice of paper based or electronic fund transfer solutions including collection amounts, cross

branch online transactions etc.

(3) INVESTMENT BANKING

MCB Investment Banking Team has emerged as a leading player in Pakistan's Investment

Banking arena. The Team handles advisory, corporate finance and capital markets related

transactions. Within these areas, the team has developed expertise in:

Private Placements Debt/ Equity Underwriting Term Finance Certificates Loan Syndication Arrangement of Non- Fund Facilities Mergers and Acquisitions Privatization


20/71

2

Corporate Advisory

(5.2.4.2)

(1) CARDS

(1.1) SMART CARD/ DEBIT CARD:

MCB Smart Card is a secure and convenient instrument of payment with unmatched

functionalities. It provides 24-hour direct access to their bank account. The convenience and

flexibility of MCB Smart Card will help customers to live a smarter life. It not only helps them

to manage their expenses, but also eliminates undue interest on their day to day credit card

transactions. Their balance is always within their reach and they can spend accordingly.MCB is

the only bank to introduce a debit card that gives the option to choose from domestic and

international cards for local and global usage respectively.

(1.2) MCB VISA:

MCB Visa is not just another card in customers wallet. It not only provides the conventional

credit card services in a manner that is superior in comparison, but goes an extra mile. MCB Visa

is accepted at all ATMs across Pakistan as well as at 27 million acceptance locations worldwide.

This card comes packed with the most amazing features and is the only card that truly lives up to

their expectations.

(2) TRAVELERS CHEQUES

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


21/71

2

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 is the safest way to Carry Cash.

(3) UPCOMING PRODUCTS

Presently, we are launching Islamic Banking Operations with necessary products, but we are

planning to introduce following products in near future:

Deposit Side

One Month TDR MahanaMunafa Savings Accounts

Financing Side

Musharaka Term Finance Diminishing Musharaka for Housing Finance MurabahahcumIstisna for Export of Goods Issuance of LC

Others

Frequently asked questions Ask Sharia Advisor

(5.2.5)

A broad view of market is important when management is interested in introducing better

services for customers. Rapid technological change, global competition and the diversity of

buyers preferences in many markets require the constant attention of the market vouchers to

identify promises business opportunities, see the shifting requirements of the buyers, evaluate

changes in competitors positioning and guide the choice of which buyers to target and classify


22/71

2

them according to respective segments. Identification of external and macro factors that

influence buyers and thus change the size and composition of market overtime involves initially

building customer profiles. These influences include:

Political and legal environment Economic trends Socio cultural environment Technological factors POLITICAL AND LEGAL ENVIRONMENT:

Banks are strongly affected by the political and legal considerations. This environment is

composed of regulatory agencies and government law that influence and limit various

organizations and individuals. Mostly these laws create new opportunities for business.

Business legislation has following main purposes

o To protect banking companies from unfair competition.o To protect consumers from unfair business practices adopted by banking companieso To protect the interest of the society from unbridled business behavior. ECONOMIC TRENDS:

A banking market requires better consumer market in volume along with higher borrowing

power. The available borrowing power depends on:

o Consumer incomeo Saving rateso Consumption patronso Rates of interesto Budget deficito Exchange rateso Cost of livingo Inflation SOCIO-CULTURAL ENVIRONMENT:

A society is shaped by beliefs, norms and values. People in a society consciously and

unconsciously interact with:


23/71

2

Themselves Others Organization Society TECHNOLOGICAL FACTORS:

Forces of technological advancement have played the most dramatic role in shaping the lives of

people. The rate of change of technology has greatly affected the rate of growth of economy.

New technology is creating deep rooted affects which could be observed in long run. The

improvement techniques involved in on line banking. In brief PEST analysis affects the overall

banking companies and provides us the information about the external macro condition.

(5.2.6)

MCB Bank is one of the leading financial services provider in Pakistan and as one of

the largest and oldest banking corporations in the country; we not only embrace our heritage and

traditions, but strive for growth and change. Our goal is to create and nurture long term

relationships with our customers by catering to all their financial needs, including traditional

banking services, insurance and investment advisory, coupled with the highest level of customer

service.

Our bottom line is to ensure that we have motivated, professional and customer-centric

employees on board who help us deliver this promise of becoming the best in class across the

industry.MCB we inspire every individual to play a significant role in our continued success bycreating Maximum economic value for our clients and shareholders, while maintaining the

highest human Values and principles. Utility of the commercial banks in the promotion of

national economy was of paramount importance and sound banking system ensured stability of

the economy. The bank worked under a set mechanism.


24/71

2

(5.3)

(5.3.1)ORGANIZATIONAL HIERARCHY Chart

Manager

Cash Department

In charge (Qayyum)Lockers Department

(Naveed)

Cash Officer

(Wahab)Cash Officer

(Iftikhar)Cash Officer

(Ejaz)

Operational Department

Sa id

3 Guards 2 Office Bo s

KPOGeneral Ledger

(Suleman Butt)

KPOSaving Account

(Yasin Butt)

Clearing

(Bukhari)

Unskilled WorkersKPO Checking Officer

(Zulfiqar Butt)

Remittance(Amir)

CSO

Ayesha


25/71

2

(5.3.1.1)

Commercial Banking 971

Lahore East 61

Lahore West 72

Faisalabad 58

Gujranwala 83

Islamabad 83

Sargodha 82

Peshawar 64

Abbottabad 82

Karachi East 51

Karachi West 42

Karachi Central 17

Hyderabad 58

Sukkur 52

Quetta 34

Bahawalpur 54

Multan 78

Wholesale Banking Group 11

Karachi 03

Lahore 05

Islamabad 03

Islamic Banking 06

Karachi 01Lahore 01

Multan 01

Hyderabad 01

Faisalabad 01


26/71

2

(5.3.2)

Training received by number of employees:For the efficient working training is an important part and it clears the direction of the

employees towards attaining the organizational goals. In banks every employee received the

basic course of training of the banking system in which overall view of all the bank work is

provided and than every person get the training in his particular job that is assigned to him. So inbanks no one can be appointed with out the basic training

Workload:The work load of the bank staff is based upon on the daily system. The office timing starts from

9.00 am to 5.00 pm (Monday to Friday) and 9.00 am to 1.00 pm on Saturday for the customers.

After the bank timing the staff fulfill the daily vouchers transaction and made the entries on the

net system and then counted the cash, put it in the safe. The banking staff should finished their

word on daily basis whether there work is short or long.

Responsibilities:Responsibilities of staff depend upon the scale of the staff members. Higher the rank of the staff

higher will be the responsibility on it. For example the Branch Manager responsibility is higher

than the Operational Manager.

Branch Manager has the responsibility to deal with the Branch customer and with the

outsider parties also while all the remaining staff is responsible to deal with the Branchcustomers only. Branch Manager is responsible for the internal and external environment and the

remaining staff is responsible for internal environment only.


27/71

2

Operational Manager has the responsibility to check the activities of his subordinates. Cashier is

responsible for all the cash transactions which occur in the Bank. Customer Relation officer is

responsible to deal the customers well and provide them the necessary information if required.

Physical facilities:The branch where I have done my internship is MCBShaheenChowkGujrat branch, here the

physical facilities available to the customers are sufficient, proper sitting arrangement is

available, and gas heater in winter and air conditioners for summer is also available. But the

facilities for the employees is not sufficient, employees have the combined table there is no

separate rooms for the employees.

(5.3.3) Offices or field offices

OR

Main Offices

Offices means the Head office which is situated in MCB House located at Fruit Mendi

Branch. Field offices mean the Branches. MCB has the forth largest domestic branch network in

Pakistan. The bank has a network of over 1000 branches in Pakistan and 6 branches worldwidein 6 countries.

(5.3.4)MAIN DEPARTMENTS

There are three main departments in any branch of MCB

GENERAL BANKING FOREIGN EXCHANGE ADVANCES/CREDIT

1)GENERAL BANKINGGeneral banking deals with following services:


28/71

2

REMITTANCEIt is transfer of funds. Funds can be transferred in shape of pay orders, demanddraft, mail

telegram and telegraph transfer. Payments of fees of differentorganizations, fulfillment of

tenders, and collection of funds are the main functions ofremittance. Maximum part of general

banking depends on this department. Issuance of different kinds of remittance:

PAY ORDER:Pay order is the property of person/company that has to take the benefit of the amount being pay

ordered by the concerned person. Pay orders are made for thepayment of fees, tender or issued

for the payments of dealings. These are required for the proof of payments made between the

bank and the customer in the favor of beneficiary. These are noted in printed block letters and

yearly serial numbers are issued from computerized system.

DEMAND DRAFT:Demand drafts are made for the beneficiary for payments, funds etc, these are made for

outstation branches of the concerned banks. An advice is also made for the confirmation of the

draft send. These are also approved and safe way of sending amount to the beneficiary. These are

also noted by computerized system and a serial number is issued fromthe computer system.

MAIL TRANSFER:Mail Transfer is made with in the city for transfer of amount. An advice is also made for the

confirmation of the draft send. These are also approved and safe way offending amount to the

beneficiary. These are also noted by computerized system and a serial number is issued from the

computer system.

TELEGRAPHIC TRANSFER:Telegraph Transfer is telegram message for transferring the amount from one branch to other

branch. A message advice and a confirmation advice both are made with TTnumbers that areissued for TEST. TEST depends on two steps:

1. First TEST is on Day, Date and Code Number of branch.

2. Second TEST is on Currency, whether Pak rupees or foreign currency, amount and TT number

issued from manual registers and confirmed from computerized system.

PAYMENT OF PAY-ORDER AND DEMAND DRAFT:


29/71

2

Pay-Order and Demand Draft both could be paid in shape of physical payment of cash and in

case transfer of amounts; the amount could be transferred in the beneficiary account. In case of

physical payment authorized signature of beneficiary are taken for the proof of amount being

paid to him and in case of transferring of amount authorized signature of the beneficiary are

checked and verified for reducing risks.

CANCELLATION OF PAY-ORDER AND DEMAND FRAFT:Any type of Pay-Order / Demand Draft is cancelled by the permission and instructions made by

the beneficiary. The customer could only cancel the pay order/demand draft as the verified

signatures of beneficiary are present on the advice.

VOUCHERS:Vouchers are made for records and they should be completed in all respects, the amount, date,its head, particulars, amount in words, authorized signatures and contra advice or voucher should

be present. Vouchers are advice either debit or credit slips. They are contra of each other. If any

voucher of debit is passed its contra credit voucher should also be passed for the balancing of

accounts, their respectivesheets.

INWARD CLEARING:It depends on those checks that are cleared inter branch and with in the city. As the concerned

branch receive any type of clearing check first of all physical checking is taken place. For

clearing procedure there should be two days margin. Thesecheques have their vouchers and the

amount of the cheque and voucher should be identical. Than these cheques are stamped and

noted on receiving sheet as well as feed in to the computerized system.

OUTWARD CLEANING:It depends on those cheques that are cleared out side the city. For outward clearingcheques are

send because the home branch has there accounts but checks are of other banks. Contras of these

cheques are vouchers that are recorded in the home branch.

ISSUANCE OF CHEQUE BOOKS:Any account holder that has opened the accounthe/she could credit his/her accountant for this purpose there should be a cheque book, so

he/she could be able to credit the needed amount whatever he/she wishes. For the

issuance of the chequebook a person is advised to fill a requisite slip with his/her full


30/71


31/71


32/71

3

upgraded on computers. As we are reporting daily to the head office, so an annexure has been

maintained and faxed to the head office.

3) BASIC BANKING ACCOUNT

In compliance with the directives of State Bank of Pakistan via BDP Circular No. 30,issued on

29th November 2005, the Basic Banking Account has been launched with effect from 27th

February 2006. This product has been introduced to facilitate the low-income group as well as

the existing account holders who wish to convert the irregular savings or current account into

Basic Banking Account. The Basic Banking Account is a current account and can be opened

with a minimum initial deposit of Rs. 1000/- only. Account holders will be allowed 2 deposit

transactions (each cash or through clearing) and 2 withdrawals (cash or clearing)each month. All

customer-initiated transactions over and above this limit will be charged a transaction fee.

However unlimited free charge cash withdrawals are allowed through MCBs own ATMs.

MCB RUPEE MAXIMIZER ACCOUNTMCB Rupee Maximizer Account provides you an opportunity to convert youre the recent

changes in the economic scenario MCB launched the Rupee MaximizeAccount exclusively for

its Foreign Currency Account Holders. MCB ForeignCurrency Account holders now have an

opportunity to convert their Foreign CurrencyAccount balances into Pak Rupees and earn a

profit at the rate of 12.6% per annum.Other features include profits calculated on a daily product

basis, no restrictions onthe number of the withdrawals, no minimum deposit required. Special

benefits include one free ATM card and locker facility free of cost. MCB Rupee

MaximizeAccount is being advertised in leading daily newspaper as well as local papers. Foreign

Currency Account into Pak Rupee and earn profit at the rate of 12.6% perineum.

CURRENT ACCOUNTMCBs Foreign Currency Current Account offers you the convenience of unlimited withdrawalsi.e. access to your funds whenever you want without any notice. There is no limit on the number

of transactions you make in a day.

KHUSHALI BACHAT ACCOUNTOpen a KhushaliBichat or Dollar Khushali Account, both require low minimum income deposits

plus you receive profit on daily product basis. Get a saving withcurrent account facilities through


33/71

3

saving 365 or double your investment throughcapital growth and receive monthly profits through

monthly Khushali.

MCB ENHANCED SAVING ACCOUNTKeeping in view the small savers, looking for higher returns on their savings, MCBintroduces the

Enhanced Saving Account (ESA). This account can be operated vial the channels available at the

MCB such as Cheques, Virtual Banking, Mobile Banking, MCB Smart Card and ATMs/Point of

sales all across Pakistan. MCB ESA, governed under PLS rules, can be opened with a minimum

initial deposit of Rs. 5000and the profit shall be calculated on an average basis maintained by the

customer during that month.

Following shall be the slabs used for profit calculation:

If average balance is greater than Rs. 20,000 standard PLS rates will apply. If average balance less than Rs. 20,000 (or equal to 20,000) with up to 4 withdrawal

transactions per month (excluding ATMs, PSO, and VB) 4.0% p.a.

If average balance is less than Rs.20,000 (or equal to 20,000) with over 4 withdrawaltransactions per month (excluding ATMs, PSO, and VB) then standard PLS rates will

apply.

The rates mentioned above are expected and shall be revised at least every six months. Average

account balances can exceed Rs. 20,000 during a month. However, in that case, they shall be

paid profit as per the standard PLS rates, as mentioned in slabs above. Profit shall be calculated

on average basis and shall be credited to the account after each calendar quarter.

MCBs PARTNERS IN BILL PAYMENTPay your bills 24 hours a day, a day, 7 days, and a week. Make total payments of up toRs. 20,000

per day. Carry out up to 10 transactions per day per card. Make either full or partial payments.

Full payment is required for PTCL only. Recharge your prepaid account for Mobil ink, Ufone

and Teleport as per their fixed slabs. Pay as registered or non-registered user. Registration willhelp you avoid the time delay in entering details each time you carry out a transaction.

o Pay with MCB ATMo Pay through MCB Virtualo Pay through MCB Call Centre


34/71

3

INVESTMENT BANKINGOur investment banking team has emerged as a leading player in Pakistans investmentbanking

arena. The team handles advisory, corporate finance and capital markets related transactions,

within these areas the team has developed expertise in:

Private Placements Debt/Equity Underwriting Team Finance Certificates Loan Syndication Arrangement of Non-Fund Facilities Mergers and Acquisitions Privatization Corporate Advisory

ABOUT REMIT EXPRESSFastest to Pakistan, anywhere in Pakistan, the fastest way of getting your money across to

Pakistan. Remit express offers low cost remittance from U.A.E and Saudi Arabia. Your relatives

friends or business associates receive drafts within 72 hours.MCB remit express has been

specifically designed to meet the needs of the expatriate Pakistani community residing in the gulf

countries.

FEATURES

Easiest and safest way to remit funds, remittance within 24 to 74 hours, personal delivery to the

beneficiary, delivery confirmation to the remitter, message facilities for both parties. Your

beneficiary will receive the amount even if he/she does not haven MCB account.

(5.3.5)

MCB performs several functions and have many departments in order to retain and maintain

their customers some of these departments are the collections department, Advance department,


35/71

3

Bill department, clearingdepartment etc.To motivate the employees MCB provide many

allowances and facilities to its employees such as medical facility, huge amount of bonuses and

also motivate the employees through promotions. The branch in which I have done my

internship is providing the very satisfactory services to its customers and large numbers of

customers are satisfied with the attitude and the services provided the branch.

The performance of the Banks is increasing day by day. The accounts holders are very satisfied

with the facilities which they provide.

(5.4)CHAPTER#2

(5.4.1)

I joined MCB Bank Limited (Bank Kutchery ChowkGujrat) as an interneeon

15-07.2013 .I was welcomed by the Branch Manager, Mr RamzanAt my first day, he described

me about his branch rules, learning behavior of people and shared his life experiences. I felt

myself more comfortable by the supervision of that person.

Manager directed me to Miss Saira the Customer Services Officer of that branch. My first day

was become an excited one because all branch members welcomed me and most of them were

linked with PCIT.

During my6 weeksinternship program, I worked in many departments. First two weeks I spent

with CSOwhere I learnt about:

Filling deposit slips and cheques.


36/71

3

Procedure for opening and closing of accounts. Apply for ATM cards. Working on computer. Dealing with customers.

Then I worked in Clearing Departmentfor Third and fourth weeks where I learnt about:

Cheque Book Issuance. Intercity Clearance Local Clearance of Cheques.

I worked in Remittance Department for Fifth week where I learnt about:

Apply for DD, TT and Pay Order.

Transfer money through Online.At the Last week I spent in Cash and Lockers Department where I learnt about:

Cash Receipt and payment of cash Lockers account opening and operating the Lockers.

(5.4.2)

During my first two weeks in MCB I learnt following:

(5.4.2.1) DEPOSIT SLIPS

By using of deposit slips customers can deposit any amount, cheque, DD, Pay order, Traveler

Chequesetc into their account. While filling of deposit slip following information should be

mentioned:

Date when the amount is deposited. If the amount is being deposited today then dateshould be the same day.

Account Number that is given by the bank to its account holder. Title of account which can be the account holders name or the name of his firm. Amount in figures and words should be same.


37/71

3

Mention of Currency either it is Pak Rupees, US Dollars, Euros, Ponds etc. Any instrument number. Like: Cheque Number, DD Number, Pay Order Number etc. Signature done by depositor.

A sample of deposit slip is placed below. It has two portions one is called as Receipt which is

kept by the account holder for any further claim and second portion is known as Voucher

which is kept by the bank.

(5.4.2.1.1) TYPES OF DEPOSIT SLIP:

There are two types of deposit slip:

Current Account Deposit Slip:This type of deposit slip is available for current account holders only. It is available in blue color.

Current account holders can use this slip for depositing their amount into account.

PLS Saving Deposit Slip:This type of slip is available in green color for all other account holders either it is saving, term

deposit, BBA or any other account holder.

(5.4.2.2) CHEQUESThrough cheque we can withdraw any amount. While filling of a Cheque there should be no

mistake, cutting or overwriting. When I filled Cheques I was very attentive because a little

mistake of any word and spell can create more problems. I mentioned following information:

Name of the Bearer.


38/71

3

Date when it should be withdrawn. Amount in Words and Figure. Three signatures or thumb impressions.

If there is any mistake in cheque then it can be covered while getting signature by account

holder. There is a permission of almost 3 mistakes otherwise cheque will be rejected.

(5.4.2.2.1) TYPES OF CHEQUES:

There are two types of cheques:

Open Cheques Crossed Cheques

Opened Cheques:

These cheques are those cheques which are paid across the counter of the bank. Open cheques

can be:

a) By Name Cheque

b) Self Chequec) Order Cheque

a) By Name/ Bearer Cheque:

If a drawer orders the bank to pay a stated sum of money to the bearer, it is called a Bearer

Cheque. These cheques are usually mentioned with the party name and can be easily cashed.

b) Self Cheque:

This type of cheque can be easily cashed because there is no problem of checking Name of

bearer. In this cheque particular account holder make one sign at the front of cheque and two

signs on the back. BearerCheques and Self Cheques are mostly the same but on Self Cheques the

word Self is mentioned.

c) Order Cheque:

If a cheque is to the order of a person in whose favor the cheque is drawn, it is called Order

Cheque. This type of cheque can create problem if some one has not any reference in the

particular bank branch from where he want to withdrawal money. The Order Cheque is paid by

the bank only when it is satisfied about the identity of the person.


39/71

3

CrossedCheque:

This type of cheque is highlighted with two Parallel lines across the face of the cheque, with or

without the words & Co or A/c payee only, it is called a Crossed Cheque. The Crossed Chequecan not be paid on the counter of the drawee bank. It will be deposited in the account of a person

in whose order or favor it is drawn.

(5.4.2.3) INTRODUCTION OF ACCOUNTS

(5.4.2.3.1) CURRENCY OF ACCOUNTS:

Accounts that are opened in MCB are available in different currencies. These are:

Pak Rupee US Dollars Ponds Euro Others

In cases where balance in MCBs Accounts remains zero for a continuous 6 month period, the

account will be closed automatically, without any notice to the account holder.

All accounts can be opened in Pak Rupees but only Saving and Current Accounts are opened in

any other Foreign Currency.

(5.4.2.3.2)NATURE OF ACCOUNT:

Saving Account Current Account Basic Banking Account KhushaliBachat Account Enhanced Saving Account Foreign Currency Accounts


40/71

4

(1)Saving Account:

MCBs Rupee Savings account is the most convenient way to manage their savings. Customers

can enjoy the following facilities through opening the saving account in MCB Bank:

An average balance of 10,000/- is required for opening a saving account in Pak Rupee. An average balance of 500/- is required for opening a saving account in other currencies. Profit is paid on account on a half yearly basis. Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan. Withdraw cash through Pakistans largest ATM network. Use account to pay their bills 24 hours a day, 7 days a week. Rs 50/- or 5/- if it is in other Currency will be charged each month if account holder has a

low balance from its average balance.

(2)Current Account:Customers can enjoy the following facilities through

opening the current account in MCB Bank:

An average balance of 10000/- is required for opening current account in Pak Rupee. An average balance of 500/- is required for opening a saving account in other currencies. Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan. Withdraw cash through Pakistans largest ATM network. Use their account to pay their bills 24 hours a day, 7 days a week. Rs 50/- or 5/- if it is in other Currency will be charged each month if account holder has a

low balance from its average balance.

(3)Basic Banking Account:

The Basic Banking Account has the followinfeature:

This account has been introduced to facilitate the low income group as well as theexisting account holders who wish to convert their regular savings or current account into

Basic Banking Account.

The Basic Banking Account is a current account and can be opened with a minimuminitial deposit of Rs. 1000/- only. Account holders will be allowed 4 withdrawal

transactions (cash or clearing) each month.


41/71

4

There will be no minimum balance maintenance requirement, and hence no monthlyaccount maintenance charges will apply.

(4) KhushaliBachat Account:

This account provides the following facilities to customers with a daily basis profit

rate:

Minimum Rs 2500/- is required for opening this account. Profit is paid on account on a half yearly basis. Withdraw cash through Pakistans largest ATM network. Account holders will be allowed 4 withdrawal transactions (cash or clearing) each month.

(5)Enhanced Saving Account:

Keeping in view the small savers, looking for higher returns on their savings, MCB introduces

the Enhanced Savings Account (ESA). This account can be operated via all the channels

available at the MCB Bank such as Cheques, Virtual Banking, Mobile Banking, MCB Smart

Debit Card and ATMs/Point of Sales all across Pakistan. MCB ESA, governed under PLS rules,

can be opened with a minimum initial deposit of Rs.5,000 and the profit shall be calculated on an

average balance maintained by the customer during that month.

Following shall be the slabs used for profit calculation:

If Average Balance is greater than Rs. 20,000 Standard PLS rates will apply. If Average Balance is less than Rs.20,000 (or equal to 20,000) with up to 4 withdrawal

transactions per month 4.0% p.a.

If Average Balance is less than Rs.20,000 (or equal to 20,000) with over 4 withdrawaltransactions per month then Standard PLS rates will apply.

The rates mentioned above are expected and shall be revised at least every six months.

Average account balances can exceed Rs.20,000 during a month. However, in that case, they

shall be paid profit as per the Standard PLS rates, as mentioned in slabs above. Profit shall becalculated on average basis and shall be credited to the account after each calendar quarter.

(5.4.2.4) ACCOUNT OPENING

My next step was opening of accounts.

(5.4.2.4.1) DOCUMENTS REQUIRED:


42/71

4

Documents required for account opening are as follow:

(1)Individual:

Original Computerized Identity Card and two photocopies of it. In case of salaried person, a copy of his/ her service card or any evidence of service. In case of illiterate person, two recent passport size photographs besides taking his right and

left thumb impression on the specimen signature card.

(2)Sole Proprietorship:

Application to open an account on the official letter head of the sole proprietorship. National Tax Number/ Sale Tax Registration Certificate (If available). Evidence of members of Trade Organization/ Chamber of Commerce etc. List of officials authorized to operate the account and their specimen signatures.(3)Partnership:

Copy of Partnership Deed / Letter of Partnership duly signed by all partners of firm. Copy of Registration Certificate.(4)Trust Accounts:

Copy of Certificate of Registration. Certified copies of Instrument of Trust.Joint Stock Company: Resolution of Board of Directors for opening of account specifying the person(s) authorized

to operate the company account.

Memorandum and Article of Association. Certificate of Incorporation. Certificate of Commencement of Business.Account Opened In The Name Of Minor:

In case of minor (age below 18 years) the word MINOR to be added to the title of account.The particulars of Guardian (if not one of the applicant of same account with the minor) be

provided as required under particulars of account in the account application form.

Copy of CNIC of the Guardian along with form B for minor to be provided.


43/71

4

(5.4.2.4.2) PROCEDURE FOR ACCOUNT OPENING

The procedure for opening of account is as follow:

STEP 1: Fill account opening form:A person who wants to open an account in MCB Bank fill the account opening form and there

should be no cutting and overwriting. Account can be opened at the name of Customer or

Corporate name. It can be opened in any type of accounts like: Current, Saving, BBA etc.

Account can also be a Pak Rupee or a Foreign Currency account. For Pak Rupee account there

should be minimum deposit of Rs10,000/- while US dollars and Euro should be 500.

When form is filled then signatures/ thumb impressions should be taken from customers at

minimum three places. Two signatures are done at the specimen signature card and at least one is

signed on the account opening form. Signatures done by the customer should be same as in ID

Card. If a customer wants to do a different signature, it should get permission from Manager

First. A sample of Account Opening Form and Specimen Signature Card is given on the next

coming pages.


44/71

4

STEP 2: Introducer:Person should also come with an introducer who is already theaccount holder of bank. The introducer verifies the integrity, reliability and honesty of

customer. If the introducer does not sign on form, customer will not be able to open his

account in MCB.


45/71

4

STEP 3: Assign Account Number:At this stage, account number is assigned tothe customer. Firstly account number is recorded on register then account is posted on

computed.

STEP 4: Issuance of ChequeBook: Acheque book will not be issued till thecustomer deposits the amount into its account. When he deposits his amount then a

cheque book will be issued where account number and title is printed. While given of

cheque book to customer it is firstly recorded on Cheque Book Register. ACheque Book

can be issued by consisting of 25, 50 and 100 Leaves and rupees 3 are charged as per

leave from customer.

STEP 5: Issuance of Letter of Thanks:At the last a letter of thanks is issued toboth account opener and introducer. This letter is sent for the purpose of sending thanks

for opening of account to both persons. Hidden purpose of issuing this letter is to confirm

the address of account opener.

Then accounts opening forms are pasted on register and a record of all accounts sent to head

office after every month.

(5.4.2.4.3) CLOSING OF ACCOUNT

There can be different reasons for closing of account by Bank:

If the account holder has no balance in its account and not try to deposit any amount. If account holder involve in any unfair means. Account can also be closed by the will of

account holder itself.

PROCEDURE FOR CLOSING OF ACCOUNT:For closing of account:

A request letter for closing of account was written by account holder. Rupees 250 is charged. Cheque Book and ATM Card is taken back.


46/71

4

LOST OF CHEQUE BOOK: Ifcheque book is lost then a requisition slip was filled first.

Signature of account holder is verified. Lostdcheque book is stopped. Rs 100 will be charged and

a new cheque book will be issued. Whencheque book is lost then it should be stopped by writing

an application. Otherwise it can create problems for the account holder.

A sample of Cheque book requisition slip is given below:

(5.4.2.5) ATM CARDAutomatic Teller Machine Card or Smart Card or Debit Card can be used for drawing any

amount by using ATM Machine.

(5.4.2.5.1) TYPES OF ATM CARD:

There are 4 types of ATM Card:

International Gold International Classic Local Gold Local Classic

1) International Gold:

This type of card can be used internationally. Through this card customers can withdraw 25000/-

amount each day. An annual fee is charged as Rs 500/-


47/71

4

2) International Classic:

This type of card can also be used internationally but through this card customers can withdraw

10000/- amount each day. An annual fee is charged as Rs 350/-

3) Local Gold:

This type of card is used within Pakistan. Through this card customers can withdraw Rs 25000/-

each day. An annual fee is charged as Rs 350/-

4) Local Classic:

This card can be used within Pakistan. Through this card customers can withdraw Rs 10000/-

each day. An annual fee is charged as Rs 250/-

(5.4.2.5.2) APPLY FOR ATM CARD:

If a customer wants to get an ATM Card, he/she should mention in Account Opening Form.

Under this form customer should select the type of ATM Card. On the next page ATM Card

Portion is given. Customer will fill this portion and then his/her ATM Card application is given

to the Head Office. After one week his/her ATM Card and Pin Card will be sent by the Head

Office.

TERMS AND CONDITIONS:

There are different terms and conditions that are followed by the Card Holder:

The Card shall be used by the Card Holder and is not transferable. The Card Holder shall, at under no circumstances, disclose to any person, whomsoever,

his/her PIN allotted for operating the ATM of the Bank.

The Card Holder undertakes to accept full responsibility to maintain sufficient funds in


48/71

4

his/her account(s) to meet withdrawal(s) affected through the use of his/her Card and

he/she undertakes not to overdraw the account unless prior arrangements to this effect

have been made with the Bank.

In the event of Card Holder, at any time, drawing an amount in excess of the creditbalance, either inadvertently or deliberately, he/she shall be bound to repay the amount

overdrawn immediately on demand, along with liquidated damages at the rate of Twenty

percent (@ 20%) on the amount overdrawn.

Card Holder also undertakes to pay all taxes, ceases, levies and/or duties on ATMtransactions by any Government (Federal/Provincial/Local) from time to time.

In the event of loss or theft of the Card, the Card Holder shall immediately notify suchloss or theft to ATM Customer Services of MCB Bank Limited at Ground Floor,ShaikhSultanTrustBuilding, Beaumont Road, Karachi, in writing as quickly as possible.

It is.

However clear that the Bank shall in no case be liable for any transaction and account(s) of the

Card Holder will be debited accordingly.

(5.4.3)

(5.4.3.1) CLEARING

It is a process where different instruments are sent for clearance if they are other than the

existing branch of Bank and comefor clearance from different branches or banks.

(5.4.3.1.1)TYPES OF INSTRUMENTS:

Following instruments can be presented at the clearing department:

Cheques Demand drafts Pay orders FDD


49/71

4

Clearing

(5.4.3.1.2) TYPES OF CLEARING:

Intercity Clearance:When a cheque comes for clearance that is outside the range from Kamoki to Khariyan.It will

be under the intercity clearing. This type of clearing has some charges. Local Clearance:

When a cheque comes for clearance that is inside the range i.e. Kamoki to Khariyan.It will be

under the local clearing. This type of clearing is free from all charges.

Intercity

1) INTERCITY CLEARING1.1) OBC (OUTWARD BANK COLLECTION):

Intercity Local

OBC IBC


50/71

5

In OBC cheques are drawn on other banks that are outside the range. For this purpose, MCB

Bank takes NIFTservices and makes CCs.

NIFT Services:

Record in Register:When a customer provides a cheque that is drawn on other Bank or Branch of different cities it

will be recorded on a register that is called Bills Register.After recording bank will sent this

cheque for intercity clearance.

Stamping:Bank will place 3 different stamps on cheque. Two stamps at the front of cheque that are

Crossing & Clearance and one on the back that is Endorsement.

Crossing Stamp:Indicates that Cheque is under the possession of Bank. Clearing Stamp: Indicates that Cheque is presented for clearance and it has to

complete in all aspects and fulfill all requirements.

Endorsement Stamp: Indicates that Payee's account will be credited on realizationfor Bank.

Bundle Cover:Then cheques are attached with a Bundle Cover page in which total amount & instrument

number are mentioned and sent to the NIFTof that city. NIFTdirectly presents cheques to the

concerning bank/ branch. A sample of Bundle Coven is given below:


51/71

5

Delivery Report:When cheques are presented to the NIFT then next day it sends a Delivery Reportwhich shows

that the cheque has been delivered to the NIFT. After 2 or 3 days when it sends a report with

NIL VALUEit means cheque has been cleared. If it is not clear then cheque will be returned to

the bank.

Charges:NIFTcollects its service charges from bank each month while Bank charges are as follow that it

takes from customers:

Commission (Fixed):Rs 200

Federal Excise Duty (Fixed): Rs 10

After the Clearance, all cheques will come to the Gujranwala MCB's Main Branch. Main Branch

will then sent an advice to the Bank Square. On the basis of that advice all accounts are credited.

CC (CHEQUES FOR CLEARANCE):

Where the NIFTservice is not available CC will be sent for clearance of cheque. The procedure

for the CC is as follow:

Record In Register:For the Clearance of Cheques all cheques are recorded on Bills register and CC number is

allotted to those cheques. If these cheques are for any other branch of MCB then they will

directly send to the branch of that city and if cheques are for any other

Banksbranch then they will send to MCBs Main Branch at that city where the bank sends these

cheques for local clearance.

Charges:Charges on cheques are as follow:

MCB Other Bank

Commission: 0.15% of Amount 0.20% of Amount

Postage Charges (Fixed): RS 75/- RS 75/-


52/71

5

FED Charges: 5% of Commission 5% of Commission

If any cheque is returned, RS 100/- commission charges are fixed. Postage and FED willremain with the same rate as above.

If more cheques are send by one account holder then only commission and FED chargeswill be charged. Postage charges will be deducted from account just one time.

Customers who have an average balance of RS 500,000/- have 10 CCs and onlinecharges free each month.

After clearance of intercity cheques:

If these cheques have been cleared through CC then a credit advice will be sent by theMCB Main Branch Gujranwala in which whole record of cheques will be added and if

any cheque is not clear then it will be returned back.

If this cheque has been cleared through NIFT then credit advices will be sent by the MainBranch of that city where through NIFT it has already been sent and if any cheque is not

clear then it will be returned back.

After Clearance, all accounts are credited after getting commission from cheques and if any

cheque is not clear then it is returned to the depositor.

1.2) IBC (INWARD BANK COLLECTION)

In IBC cheques are drawn on Bank. Branch of that city confirms about that Cheque through fax

which are drawn on MCB Bank Square.

In IBC Clearing, with all cheques NIFT also sends record of those cheques. These cheques have

come for the purpose of clearance.

If there is no problem in returning of cheques then these cheques will be debited from the

accounts and credited to the MCB Main Branch of Gujranwala. If there is any return of cheques

then these cheques will be attached to a Bundle Cover with describing the reason of returning

and send to the Head Office through NIFT.

Local

Inward Outward


53/71

5

2)LOCAL CLEARING

(2.1) INWARD

In Inward Clearing any instrument like: DD, TT, Pay Order, Chequesetc comes for clearance and

will be drawn on bank. In Inward Clearing, with all cheques NIFT also sends record of those

cheques. These cheques have come for the purpose of clearance. If there is no problem in coming

cheques then these cheques will be debited from the accounts and credited to the MCB Main

Branch of Karachi. If there is any return of cheques then these cheques will be attached to a

Bundle Cover with describing the reason of returning and send to the Head Office through

(2.2) OUTWARD

In Outward Clearance any instrument like: DD, TT, Pay Order, Chequesetc sent for clearance

and drawn on other banks that are inside the range.

For outward clearing:

All cheques are Recorded in a Register An Add List is prepared where amount of these cheques are recorded. 3 stamps are then placed on cheques.

With a Request Slip, Delivery Receipt and Add List, Cheques are attached and send to the NIFT.

Next day a credit advicewas sent by the MCB Main Branch Karachi. It is also attached with a

list in which all those cheques' amount and number are mentioned that are not cleared. All

returned cheques given back to the depositors and on the basis of cleared cheques accounts are

credited.

REASONS FOR RETURNING OF CHEQUE

Cheques can be returned due to different reasons:


54/71

5

Payment stopped by drawer. Amount in words and figures differs. Cheque post dated/ out of date. Clearing banks endorsement required. Clearing stamp required. Crossing stamp required. Advice not received. Account closed. Insufficient fund. Not drawn on that branch.

Title of account required. Second/ Third signature required. Drawers signature incomplete/ differ/ required. Cheque is incomplete etc..

NIFT:NIFTstands for National Institutional Facilitation Technologies Private Limited

were incorporated in September 1995as a joint venture between a consortium of six banks and

entrepreneurs from the private sector. All commercial banks and their branches in major cities

avail NIFT services. From June 2005, 43 commercial banks and their 3000 branches in 9 major

cities utilize NIFT services.

NIFT provides services at individual branch level to over 3000 branches in 9 major cities i.e.

Karachi, Lahore, Islamabad, Peshawar, Rawalpindi, Hyderabad, Multan, Faisalabadand

Quetta.And 30 smaller cities. These services include cheques clearing, collection & delivery,

reconciliation, return (unpaid) cheques processing, same day clearing (express 2 hours

clearing service), intercity clearing and inter branch & inter bank settlement.

Clearing Services: NIFTdeals, directly, with every branch in major cities and

adjoining 30 Industrial and Commercial towns. This is managed with an effective collection and

delivery system of professional couriers. Inter-bank and intra-bank clearing (transfer delivery)

has been merged.


55/71


56/71

5

This is a process through which funds are transferred from one branch of bank to another.

2.4.4.1.1) KINDS OF TRANSFER PAYMENT

Online Payment Demand Draft Pay Order Telegraphic Transfer/ Mail Transfer

5.4.4.1.2) Online Payment:

Due to online payment, you can send your amount to any branch of MCB which is online within

few minutes.

Features Of Online Payment Amount is transferred from one branch of a bank to another branch of the same bank. Payer and Payee bank is the same but branches are different. It is an unconditional form of payment. Procedure For Online Payment

For online payment, a form is filled in which following information is mentioned:

Name and Account number of Receiver/ Beneficiary. Amount which is transferred. Place and Branch code where amount is payable. Mode in which money is to be paid i.e. Cash or through Cheque. Name and Account of Sender.

Online Payment can be sent by account holder and non-account holder both. For non-account

holder a copy of CNIC is required.

Online charges are same for both account holder and non-account holder. These are:

Commission: RS 200/- (fixed) Federal Excise Duty (FED): RS 10/- (fixed)

If MCB branch is not online or still not online then payment will be made through sending Credit

Advice to that branch and it will take at least one day.


57/71

5

5.4.4.1.3) Demand Draft:

It is a method used by individual to make payments from one bank account to another.

OR

A written order directing that payment to be made, on sight, to a third party.

The person writing the draft is called the Drawee; the bank making the payment is the Drawer,

or the Payorbank. The beneficiary of a demand draft (the person receiving the payment) is the

Payee. Drafts may be payable at some future date (time drafts) or on sight (demand drafts).

Demand drafts drawn on banks are known as Cheques.

Demand drafts are marketed as a relatively secure method for cashing checks. The major

difference between demand drafts and normal cheques is that demand drafts do not require a

signature in order to be cashed also known as "Remotely Created Cheques".

Features Of Demand Draft Demand Draft is drawn by one branch of a bank to another branch of the same bank. Drawer and Drawee bank is the same but branches are different. The amount payable is specified in the draft. The person to whom amount is payable is also specified therein.

It is payable on demand. It is an unconditional order for payment. Procedure For Getting DD:

A customer fills a form with following information.

Name of Receiver/ Beneficiary. Account number of Receiver (Optional). Amount which is transferred. Mode in which money is to be paid i.e. Cash or through Cheque. Name and Account of Sender. Place where amount is payable.

Charges were paid by customer other than their sending amount as follow:

Commission: Up to the amount of Rs 50,000, Rs 50 was charged.Up to the amount of Rs 100,000, Rs 100 was charged.


58/71

5

If amount is more than Rs 100,000 then 0.50% of amount was charged.

Postage (Fixed):Rs 75 Federal Excise Duty:5% of Commission.

Total amount is submitted by account and non-account holder and then Demand Draft is issued.

5.4.4.1.4) Pay Order:

This is another mode for Transfer of Fund.

Features Of Pay Order It is paid only to the branch that issues it. The amount payable is specified in Pay Order. The person to whom amount is payable is also specified therein. It is payable on demand. It is an unconditional order for payment. Procedure For Pay Order:

A customer fills a form for P.O in which following information are mentioned.

Name and Account number of Receiver/ Beneficiary. Amount which is payable. Mode in which money is to be paid i.e. Cash or through Cheque. Name and Account of payer.

Pay Order charges for non-account holder are same as Online Charges, these are:

Commission:Rs 200/- Federal Excise Duty (FED):Rs 10/-

Pay Order for account holder are as follow: Commission:Rs 50/- Federal Excise Duty (FED):Rs 3/-

Total amount was submitted by account and non-account holder and then Pay Order is issued.


59/71


60/71

6

or destroyed instrument in connection with any request that may be made for the issuance

of replacement instrument or in connection with the refund of the amount of the

instrument.

In the event of cancellation request of a demand draft and pay order, the instrument mustbe endorsed by the beneficiary in discharge of its claim and a refund/ replacement request

will only be obtained after such discharge to the entire satisfaction of the bank.

In case of a foreign currency remittance, unless specified otherwise, all charges/commission outside Pakistan are on beneficiarys account.

In case of issuance of Pay Order/ Draft the instrument issued will be valid for 6 monthsfrom the date of issuance.

A sample of Remittance Application Form is given:


61/71

6

5.4.5)

5.4.5.1) LOCKERS FACILITY

MCB offers their customers Safe Deposit Lockers in a pleasant and secure environment. Users

are assured complete privacy when using their lockers. Customers can use lockers for keeping

their valuables.

5.4.5.1.1) USERS OF LOCKERS

In MCB only the account holders can get the facility of lockers either it is male or female. They

pay only annual fee and can operate his/ her locker at any time.

5.4.5.1.2) SIZE OF LOCKERS

Account holder may choose from three different sizes of lockers to suit their individual needs at

reasonable annual rentals. Locker rental and key deposit is as per current schedule of charges.

Size Height Width Depth ChargesSmall 41/2 7'' 22'' 1000 p.a

Medium 41/2 14'' 22'' 2000 p.a

Large 101/2 14'' 22'' 3000 p.a


62/71

6

Small lockers:If a customer has a small locker he should payRs1000/- as an annual fee. He/she has to deposit

Rs 3000/- as security in addition which is returnable.

Medium LockersIf a customer has a medium size locker, he has to pay Rs 2000/- as an annual fee. He/she has to

deposit Rs 3000/- as security in addition which is returnable.

Large LockersIf a customer has a large size locker, he has to pay Rs 4000/- as an annual fee. He/she has to

deposit Rs 3000/- as security in addition which is returnable.

5.4.5.1.3)LOCKER ENTERING REGISTERS:

Lockers Opening Register Locker Operating Register Lockers Rent Register

Lockers Opening Register:

If a customer wants to get Locker facility he/ she should fill a Lockers Opening Form and

mention specific signature on it. All forms are attached in Lockers Opening Register'.

Locker Operating Register:

When a customer comes for the operating of his/ her Locker whole record is added into a register

that is called Lockers Operating Register

Lockers Rent Register:

Register in which annual charges are mentioned is known as 'Locker Rent Register'.

5.4.5.1.4) LEVER OF LOCKERS

There are 2 levers of lockers with two different keys. One key remains with manager which is

called Master Key and second key is kept by the customer which is known as Customer Key.

Locker is opened with both of these keys. One lever is opened with the Master Key and second

lever is opened with the Customer Key.


63/71

6

5.4.5.1.5) LOSS OF KEY:

There is no duplicate key of Lockers. If a customer loses the key of locker he/she has to pay

Rs500/- minimum first then the locker is broken.

5.4.5.1.6) OPERATING OF LOCKER:

When customer wants to operate its locker it should go to the operational manager. Operational

manager will ask Code Number, that is a secret Number between bank and account holder.

If code number is correct then Account holder's name, specific signature and timing of

Customer's visiting are noted and recorded on 'Lockers Operating Register'. Then the customer

has permission for using its locker.

5.4.5.1.7) CLOSING OF LOCKER

For closing the locker:

Account holder writes an application first. Locker key is taken from the customer. Security is returned back to the customer.

5.4.5.2) CASH DEPARTMENTBasic purpose of this department is to receive and payment of cash.

5.4.5.2.1) DEPOSIT OF CASH:

If a customer wants to deposit cash into its account:

He/ She should provide cash and a deposit slip to the cashier. Cashier counts the amount that is same as mentioned on deposit slip. On deposit slip depositor's signature should be done.

Date should be the same day. For example, if a customer wants to deposit its amount on4th January 2008. Then it should come for deposit at the same day.

Then Account number and title are recorded on cash receipt page. On deposit slip two authorized persons do signatures. Receipt is given to the depositor

and voucher is kept by the bank. At the last, amount is posted to the account and account

will be credited.


64/71

6

While posting of account if any problem is found in account number or title, a pay order will be

made. When customer claims for its amount, depositor's signature is matched and correction will

be made. At the last account is credited.

5.4.5.2.2) DEPOSIT OF CHEQUE:

If a customer wants to deposit the amount of a cheque which is drawn on the same branch of

Bank:

He/ She should firstly ask from CFO whether this cheque will be cleared or not. If it canbe cleared then he/ she should go to the cashier for depositing.

This cheque should be a crossed cheque.

Cashier will check whether this cheque is payable for the depositor or not. He will check the date which is mentioned on the cheque. Date can be from previous

months but it can not be the coming date.

Amount in figures and words should be same. Thumb impression / signature of the payer is verified by the Passing Officer At the last he will deduct the amount from the cheques account and credit it to the

depositors account.

Clearing:

If a customer wants to deposit the amount of a cheque in its account which is not drawn on the

same bank/ branch of the bank then it will be sent for clearance.

5.4.5.2.3) WITHDRAW AMOUNT:

When customer wants to withdraw his/her amount from his account:

He/ She should make a cheque first.

Then he/ she should get a token. Cashier will receive the cheque if it is drawn on the same branch of bank. Token number is mentioned on the back of cheque. Date can be for previous 6 months but it can not be the coming date. For example: today

is 4th January 2008, this cheque can be cashed if it has any date from 4th July 2007 but if


65/71

6

there is a date mentioned 5th January 2008. Then it will not be cashed.

Amount in figure and words should be same. Thumb impression and signature is verified by the Passing Officer One signature/ thumb impression should be placed on the right sight of cheque and 2

signatures/ thumb impression on the back of cheque.

If all things are clear then amount will be given to the customer and account is debited. If amount withdrawal is up to the Rs 25000/- 2.5% will be deducted as a commission

from customer's account.

If a customer wants to withdraw amount from others account then the procedure will be same

but some following enquiries will be made: Cheque will be received only if it is drawn on the same branch of bank. Cashier will cash this cheque only if it is an open cheque. Cheque should be made for the cash receiver.

5.4.5.2.4) CASH IN HAND:

When the whole day passed then Cash In Hand is founded on the basis of Cash department

working. Cash In Hand is basically the total amount in cash that is available to the bank.

It is denoted by the following formula:

Cash In Hand= Opening Balance of the day (which is the closing balance of previous

Day) + Whole day ReceiptsWhole Day Payments

(6)6.1.1) STRENGTHS

MCB ATM network is the largest in Pakistan. MCB Pak Rupee Travelers Cheques is the Market Leader.


66/71

6

MCB Consumer Banking Provides Customers with innovative saving products andservices.

In 2003 MCB declared as the best bank of Pakistan MCB interest income increased by 45.17% in 2006. It has more book value in 2006. In 2006, it has increased its net profit by 14.50%.

6.1.2) WEAKNESSES

MCB works as a learning institution. Employees have low satisfactory because of low salary and highly working. MCB give incentive to their employees according to its rules. Investments of bank decreased by 9.44% Interest expense increased by 62.70% Bad debts increased by 3870%

6.1.3) OPPORTUNITIES

MCB bank has an opportunity to open more branches outside Pakistan.

It has needed to provide more quality service. Bank can bring innovation in their services. Expansion of Branches in those cities where customers are highly linked.

6.1.4) THREATS

Major competitors like: City Bank, Allied Bank, Askari etc. Entrance of International Banks like: Dubai Islamic.

(7)


67/71

6

7.1) PROBLEMS

Limited capacity of building. Low training to the staff members. Less learning environment. No proper telephone system. No proper segregation of the department. No proper time management. Inefficient Machinery. Electricity problem. More workings of CFOs seat. No lunch break. No Half Day. Seating arrangement is a big problem.

7.2)RECOMMENDATIONS

MCB Bank Kutchery Chowk Gujrat situated in a very commercial place. So a lot of

improvement in needed in this branch for enhancing customers. Some of the recommendations

are given for the Bank and MCB Bank Limited as follow:

7.2.1) Selection Criteria:

Bank should be careful while selecting their employees because a healthy working environment

results a good work. There should be eligible persons related to their studies and there should be

proper recruitment system for hiring of employees. When employees are hired then not only at

that time they should be trained but after some time period they should be sent for training in

different branches.

7.2.2)Competition:

MCB is facing a highly competition. It should always aware with its competitors strategies and

customers problems. It shouldestablish a research team who will give them information. On the

basis of that information Bank should make reward-given strategies to employees and should

open its branches where customers mostly face problems for safety.


68/71

6

7.2.3) Reward System:

Rewards affect the overall working of bank. If employees are not satisfied with their work or

salary then it will affect their overall performance. Bank should give some targets to its

employees and give reward on the basis of their performance.

7.2.4) Attract Depositors:

MCB is already trying to attract more customers by launching new products. But it should

introduce highly-deposit profit scheme from which customers can get more interest by depositing

high amount for more time period.

7.2.5) Others:

Some other problems should be covered by the Bank Square Branch Like:

Mostly telephone is kept as a busy because CFO not only works as its own but also performs the

duties of telephone operator so sometime it feels more problems for handling customers and

picking the phone at the same time. So there should be hired one person as a telephone operator.

Also there should be lunch break. Without eating it becomes very difficult for continuing the

work.

(8)

Underwriting:It is a process by which investment bankers raise investment capital from investors on behalf of

corporations and governments that are issuing securities (both equity and debt).

Clearance of Cheque:It is the movement of cheques from the banks or other depository institutions where they are

deposited to those on which they are written, and funds movement in the opposite direction.

Syndications:It is a method of selling property whereby a sponsor (or Syndicator) sells interests to investors.

Equity:The value of an owners interest in property, computed by subtracting the amount of outstanding

mortgages or liens from the total value of the property is known as equity.

Deferred Taxation:


69/71

6

It is a sum set aside for tax in the Financial Statements that will become payable in a financial

year other than the current financial year.

Earning per Share:Profit after taxation divided by the weighted average number of ordinary share in issue.

Liquid Assets:Assets that are held in cash or in a form that can be converted to cash readily, such as deposits

with other banks, bills of exchange, treasury bills.

Price Earnings Ratio (P/E Ratio):Market price of a share divided by earnings per share.

Return on Assets:Profit after tax divided by the average assets.

Revenue Reserve:Reserves set aside for future distribution and investment

Return on Equity:Net profit for the year, less preference share dividends if any, expressed as a percentage of

average ordinary shareholders equity.

Shareholders Funds:Total of Issued and fully paid share capital and capital and revenue reserves.

Current Account:In this type of account customers will not receive any profit.

Saving Account:Accounts that require funds to be kept on deposit for a minimum length of time, but most permit

unlimited access to funds. In this type of account customer will receive some profit after some

definite period of time.

Enormous:Very great in size, extent, number, or degree.

Remittance:It means transfer of fund from one place to another.


70/71

7

9)

The overall performance of MCB Bank limited has a favorable result. All the measures that are

calculated show that the management of bank is properly utilizing all of its available resources.

As the banks debts has increased by 9.53% in 2010 but it has enough assets to cover its total

debts. Due to this increase banks solvency is also increasing because there is increase in equity

by 72.1% which shows the high contribution of owner in income.

The increase in reserves by 172.36% indicates that the bank has enough income to not only pay

its all debts but also can be used for the investment in different securities and sectors. Book value

of MCB bank is also increasing which has an identification of banks internal strength. When the

people invest in any organization they have more focus on their capital gain which can be find

from book value. As bank has more book value then it will attract more investors for doing

investments.

Bank not only increasing its assets and equity but it also has more cash flow for the use in

operations. This availability of cash flow shows that the bank has enough amounts to pay its total

debts and dividends. The net profit of bank is also increasing by 14.50% it is also representing

the profitability of the bank. Earning assets of bank is also increasing but these earning assets are

not the quality assets because there is more increase in interest expense which is increased by

62.70%.Bank is not also increasing its investments while it is getting reasonable dividend

income from its currents investments. Bank is also providing more loans to its customers as

compared to the previous years but it has more increase in deposits which shows that the is not

properly utilizing its assets against deposits.

The increase in deposits is also beneficial for the bank because the bank can use this amount forfurther investments and sanctioning loans to customers and on return it can get profits.


71/71

(10)

Most of the information for the completion of this Report has been gathered from doing

Internship in MCB Bank Square and from the following sources:

WEBSITE

www.mcb.com.pk http://en.wikipedia.org/wiki/Muslim_Commercial_Bank

BOOKS

MANUALS

From the Branch Manager Mr. Ramzan Customer Services Officer Miss Saira Clearing Officer Miss lram
http://www.mcb.com.pk/http://en.wikipedia.org/wiki/Muslim_Commercial_Bankhttp://en.wikipedia.org/wiki/Muslim_Commercial_Bankhttp://www.mcb.com.pk/