MCB

INTERSHIP REPORT ON MUSLIM COMMERCIAL BANK LTD


Dedicated

To

My Parents

My Respected Teacher

Mr. Rizwan Danish

&

My Friends


Almighty

ALLAH Who has Created us for His

Worship.

All the Praise For


EXECUTIVE SUMMARY

Pakistan after getting its independence did not have a strong banking industry. However

today the banking industry of Pakistan has been growing over the past few years,

mainly because Government of Pakistan implement some policies to betterment of the

banking sector, including the privatization of banks in Pakistan and secondly the friendly

behavior of STATE BANK OF PAKISTAN in the shape of monetary policy can help to

improve the banking sector in our country. Today there are number of different banks

established in Pakistan, including foreign incorporated commercial banks, local

incorporative commercial banks, Islamic banking and so many more.

My report divided into three parts. In the first parts I briefly introduce the MCB .The MCB

is a semi public commercial bank. And they can provide the many types of products for

example a Consumer banking services, Islamic banking services, Agricultural finance

solutions, Corporate and investment banking. And second portion is about what I learn /

Practiced at MCB. I learn and again so many thing in the internship program of MCB of

Pakistan in the operation department I can learn what types of accounts are open is the

behalf of customer demand and what types of document require for account opening of

different types of accounts. I can also spend into the credit department and gain so

many thing that the why the client demand loan and what type of loans can issued of

the MCB and what types of Interest the bank charges In different loans periods.

And 3rd portion is to Analysis the financial ratios of MCB. The ratio can help to

determine the SWOT in our sector and the use of this analysis the company can solve

our problem and built our business sector again in the highest rank. And during the

internship I can analysis some factors that can in the development of the MCB first is

that the lack of online facility and second is that the shortage of employee.


ACKNOWLEDGEMENT

“Pen can do what sword cannot”. I pause to think what do justice to express my gratitude to Almighty Allah for his unlimited graciousness because words are scare and knowledge is unlimited to express his majesty. I have the pearls of my eyes to admire the blessings of the compassionate, omnipotent, the Merciful and the Beneficent Allah who is the entire source of knowledge and wisdom.Due to his bounteous blessings, I become able to contribute this comprehensive report toward the deep ocean of knowledge already exist. Heart is warmth with love & thoughts have turned to the city of knowledge The Holy Prophet (P.B.U.H) his saying “learn from Cradle to Grave” inspired the strong desire in me to under take this course of valuable studies.That project has been accomplished due to the input of so many people who provided their time expertise & support. Firstly I gratefully acknowledge the contribution of my esteemed TEACHERS, they really deserve very special thanks for this unflagging support by his advises & editorial whetting that was crucial to transfer the data to us. Their patience, constructive criticism, guidance and imaginative thinking have helped me in incorporating and reviewing different methodologies and techniques used for business operations in any organization. I especially acknowledge the efforts of Sir Hafiz Imran Akram (Incharge Department Of Commerce), Sir Navid Iqbal Ch, Sir Muhammad Ehsan Ullah & to Mam Qandeel Anjum these personalities not only provide me knowledge but also shape my personality.Secondly I would like to thank Manager MCB Jinnah Road Branch Mian Abdul Waheed, Operation Manager Madiha Abbas & to Salahuddin Khan who enormously helps me throughout the preparation of that report. They not only provided critical observation on the report but also provide me the basic information & documents of the bank. Thirdly I would like to thank my fellows who provide me help for the completion of that report they provide me time &expertise to complete the report.Finally all the credit goes to my worthy teachers, Management of MCB Bank Jinnah Road Branch & to my fellows.

SaadNisar

BB07003


INtroduction of History Of Banking

Evolution of Banking

It has not so far been decided as to how the word ‘Bank’ originated. The explanation of

this origin is attributed to the fact that the jews in Lombardy transacted the business of

money exchange on banches in the market place and when the business failed, the

people destroyed the Bank. Incidentally, the word ‘bankrupt’ is said to have been

evolved from this practice. The opponents of this opinion argue that it was so, then how

is that the Italian moneychangers were never called ‘Banchierei’ in the Middle Ages?

Other authorities hold the opinion that the word ‘Bank’ is derived from the German word

back which means joined stock fund. Then ‘Back’ was Italianize into ‘Bank’.

Early Growth

Banking in fact is as primitive as human society for eversince man came to realise the

importance of money as a medium of exchange. Perhaps it was the Babylonians who

developed banking system as early as 2000 B.C. It is evident that the Temples of

Babylon were used as ‘Banks’ because of the prevalent respect and confidence in the

clergy.

King Hamurabi ( 1728 – 1686 B.C ), the founder of the Babylonian empire, drew up

accede where in he laid down standard rules of procedure for banking operations by

temples and great landlords. He got his code inscribed on the block of diorite about 8

feet tall, containing about 150 paragraphs which deals with nearly all aspects of loans,

interest, pledges, guarantees, natural accidents, loss, theft etc. Later on Sumerians,

Babylonians, Hitties and Assyrians standardised the values of the goods in silver,

copper and bronze.


It is not certain as to whom invented money but history recess that king of Lydia castled

electrum ingots of identical shapes and of uniform weights with a triple emblem

engraved on it as an official guarantee of value in 687 B.C. In 1401 a German public

bank was framed comprising the operations of discounting and transferring of money.

By the 16th century, some more public banks were formed in Venice, Milan,

Amsterdam, Hamburg and Nuremburg. In order to streamline Banking organisations

and techniques, conferences were held in Nuremburg from 1548 to 1551 and it was

agreed that the commercial interest of the time needed a bank with facilities of growth

and transfer but it should not be a bank run by private individuals. Ultimately in 1587, a

State Bank under the name of banco DI rialto was formed in Genoa. Later the bank of

Amsterdam was also formed in 1609. This Bank had a guarantee by the State and

rendered valuable services to the Netherlands traders upto the year 1795.

Similarly in 1690, the Bank of Hamburg came into existence in Hamburg with the

business of accepting deposits of fine silver or of foreign money and to run accounts on

these deposits. This Bank rendered great service to the merchants as well as countries

it dealt with until 1873, when it was merged with the Reich bank. By the year 1700, the

bank of England was not only issuing notes but also conducting accounts for customers.

Its directors were conducting the business like that of limited companies. The bank had

the monopoly of issuing banking notes. Upto 1813 or there about in England, the main

profit of bank was derived from the circulation of notes.

Development of Modern Banking

In 1918 came into being eleven clearing banks of today. The effect of this historical

development of banking in England has been fairly wide. First, emergence of a small


number of large banks with wide network of branches. Second, increase in the

popularity of bank accounts and a large-scale use of cheques.

In 1946, the labour government nationalised the bank of England and transferred the

existing stock to the nominee of British treasury. In 1955, the British Banks made a

departure from traditional banking by undertaking hire-purchase finance for companies

buying industrial plants and machinery and took interest on hire-purchase finance.


MCB Bank LTD INTRODUCTION

Brief:

MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 230 billion

and total assets of around Rs.300 billion. 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 Bank’s 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, developing a large and stable deposit base and managing its non-performing

loans via improved risk management processes.

History:

MCB has an edge over other local bank, as it was the first privatized bank. The SBP

has restricted the number of branches that can be opened by foreign banks. An

advantage that MCB capitalizes because of its extensive branch network.

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

the gains made in recent years and prepare the groundwork for future growth. The bank

has restructured its assets portfolio and rationalized the cost structure in order to remain

a low cost producer.

MCB now focuses on three core businesses namely corporate, commercial & consumer

banking. Corporate clientele include public sector companies as well as large local &

multinational concerns. MCB is also catering to the growing middle class buy providing

new assets & liability products. The bank provides 24 hours banking convenience with


the largest ATM network in Pakistan covering 30 cities with over 197 ATM locations.

The bank’s rupee traveler cheques have been market leaders for the past six years &

have recently launched their gift cheques scheme.

MCB looks with confidence at the year 2006 & beyond, making strides towards

fulfillment of its mission, “To become the preferred provider of quality financial services

in the country with profitability & responsibility & to be the best place to work”.

MCB in it’s over fifty years of operations. It has a network of over nine hundred

branches all over the country with business establishments in Srilanka & Behrain. The

branch breakup province wise is; Punjab (57%), Sindh (31%), NWFP (19%) and

Balochistan (3%) respectively.

MCB BANK TODAY

MCB today, represents a bank that has grown with time, experience and Pakistan. A

major financial institution, in scope and size, it symbolizes a fully growing tree

evergreen, strong, and firmly rooted.

FOREIGN TRADE

The bank conducted import business during the year amounting to RS. 54.0 billion as

compare to RS. 56.4 Billion In 2005. The export business slightly improves to RS. 36.9

Billion From RS. 35.1 Billion. In 2006. Home remittances decline to RS. 16.7 Billion

From 30.7 Billion the decline in home remittances business was due to freezing of

Foreign Currency Accounts, which has affected the confidence of Pakistanis working

overseas.

YEAR 2006 COMPLIANCE


MCB’s strength lies in providing a technological base at the gross root level of the

society with a challenge to educate and assimilate such systems across vast cultural

and economic backgrounds. With over 768 automated branches, 263 online branches,

over 151 MCB ATMs in 27 cities nationwide and a network of over 16 banks on the

MNET ATM switch, MCB continuously innovates new products and services that

harness technology for the customer’s benefits.

SOCIAL SECTOR

The bank activity participating in the Prime Minister self-employment Scheme. The

application received from various applicants is being processed on merit and disposed

off as quickly as possible.

THE BUSINESS

MCB is in it’s over 50 years of operation. It has a network of over 1,000 branches all

over the country with business establishments in Sri Lanka and Bahrain. The branch

break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) and Blochistan

(3%) respectively.

MCB has an edge over other local banks, as it was the first privatized bank. The State

Bank of Pakistan has restricted the number of branches that can be opened by foreign

banks, an advantage that MCB capitalizes because of its extensive branch network.

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

in the gains made in recent years and prepare the groundwork for future growth. The

bank has restructured its asset portfolio and rationalized the cost structure in order to

remain a low cost producer.

MCB now focuses on three core businesses namely Corporate, Commercial and

Consumer Banking. Corporate clientele includes public sector companies as well as

large local and multi national concerns. MCB is also catering to the growing middle


class by Providing new asset and liability products. The Bank provides 24 hour banking

convenience with the largest ATM network in Pakistan covering 27 cities with over 151

ATM locations. The Bank’s Rupee Traveler Cheques have been market leaders for the

past six years and have recently launched their Gift Cheque Scheme.

MCB looks with confidence at year 2007 and beyond, making strides towards fulfillment

of its mission, "to become the preferred provider of quality financial services in the

country with profitability and responsibility and to be the best place to work".

A major achievement of MCB is that the state bank of Pakistan has issued a license to

MCB to start Islamic banking. Now MCB is setting up a 1st Islamic banking branch at 1st

floor shaheen complex, Karachi. This complex starts working from September 1, 2003.


Vision Statement

To be the leading financial services provider, partnering with our customers for a more prosperous and secure

future.


Mission Statement

We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In

doing so, we ensure that our shareholders can invest with confidence in us.


OUR CORE VALUES

INTEGRITY

We are the trustees of public funds and serve our community with integrity. We believe

in being the best at always doing the right thing. We deliver on our responsibilities and

commitments to our customers as well as our colleagues.

RESPECT

We respect our customer’s values, beliefs, culture and history. We value the equality of

gender and diversity of experience and education that our employees bring with them.

We create an environment where each individual is enabled to succeed.

EXCELLENCE

We take personal responsibility for our role as leaders in the pursuit of excellence. We

are a performance driven, result oriented organization where merit is the only criterion

for reward.

CUSTOMER CENTRICITY

Our customers are at the heart of everything we do. We thrive on the challenge of

understanding their needs and aspirations, both realized and unrealized. We make

every effort to exceed customer expectations through superior services and solutions.

INNOVATION

We encourage and reward people who challenge the status quo and think beyond the

boundaries of the conventional. Our teams work together for the smooth and efficient

implementation of ideas and initiatives.



BOARD OF DIRECTORS

Mian Mohammad Mansha

Chairman

S.M. Muneer

Vice Chairman

Atif Bajwa

President & Chief Executive

Tariq Rafi

Director


Shahzad SaleemDirector

Mian Raza ManshaDirector

Dr. M YaqubDirector

Mian Umer ManshaDirector


Sarmad AminDirector

Dato’ Mohammed HusseinDirector

Muhammad Ali ZebDirector

Mr. Aftab Ahmad KhanDirector

Mr. Abdul Farid Bin AliasDirector

PUNJAB

NWFP & AZAD KASHMIR

SINDH

BALOCHISTAN

KARACHI

LAHORE

PESHAWAR

PROVINCIAL HEAD QUARTERS

QUETTA

HEAD QUARTER

CIRCLE OFFICES

BRANCH OFFICES

KARACHI


ORGANIZATIONAL SETUP OF MCB


Chief Manager

Operation Manager

General Banking

ForexDepartment

Credit Department

Accounts Opening

BillingDepartment

CashDepartment

ClearingDepartment

RemittanceDepartment

CFO



PRODUCTS AND SERVICES

MCB PERFORMANCE AREAS

GENERAL BANKING:

The branch has performed the following functions among those which we have

already discussed in the above portion.

Online banking.

ATM card.

Mobile banking.

Car financing.

Durable goods financing.

House financing.

OTHERS:

Cash counter.

Remittance.

A/C opening.

Security of branch.

Lockers facility.

Customer clearing & collection.

CREDIT DEPATMENT:

Fund base facilities.

Non fund base facilities.

General Banking:


GENERAL BANKING:

Personal Banking:

ATM services:

Muslim Commercial Bank has the largest ATM Network Connectivity in the country with

over 140 ATMs and more than 220 online branches. The MCB ATM Card or MCB ATM

Cash Card can be used in over 20 cities in Pakistan. Whether you want to pay your

bills, withdraw cash, transfer funds or ask for a mini-statement or balance enquiry, MCB

ATM's gives you instant access to your bank account-anywhere, anytime.

MCB’S Funds Transfer facility is available to all MCB customers who maintain pak

rupee accounts at any on-line branch and are MCB ATM cardholders. This facility is

available to you at any time you find convenient, 24 hrs, and 365 days.

In addition to the added facilities being offered through the MCB ATMs, you will now be

able to do so much more: transfer funds between accounts with ease and flexibility.

SERVICES AT THE TOUCH OF THE BUTTON:

Transferring funds between accounts has never been so easy. No need for writing

cheques and standing in queues. All you have to do is to use your ATM card to transfer

funds between pre-registered accounts. The funds would be available immediately and

the account balance updated instantaneously.

WHAT ACCOUNT YOU WANT TO USE:

To suit your requirements you can nominate 4 Debit and 4 Debit accounts (inclusive of

the Primary ATM card account) from which you will be able to transfer funds within or to

and from any on-line branch.

HOW TO REGISTER:


You need to visit your home branch and fill out the Funds Transfer Application form.

Once your application is approved, the facility would be activated.

SERVICES CHARGES:

Service charges would be applicable as per the Bank's Schedule of charges.

Government taxes with regards to funds transfer may also be applicable.

MCB ATM BILL PAY:

For the first time in Pakistan, MCB proudly introduces a unique service - MCB ATM Bill

Pay which allows you to pay your utility bills and recharge your mobile phones the easy

way- through MCB ATM's, available to you 24hours-365 days.

This facility is for all MCB ATM Card holders and MCB ATM Cash Card holders alike.

NO QUEUES:

MCB ATM Bill Pay puts an end to your worries of standing and waiting in long queues at

different Banks and Service Providers to pay your bills. It provides a 'one stop' facility to

your utility bill payment and mobile recharge needs. With the largest network of MCB

ATMs, you can be sure to find one near you where you can easily pay your bills and

recharge your mobiles and also conduct your routine banking transactions.

CONVENIENCEAND SECURITY:

It is faster, easier, convenient and more secure. That's right you have total control - you

decide when you want to make the payment and how much you want to pay. It’s secure

as you do no have to carry cash or even your bill, just use any MCB ATM to pay your

utility bills and recharge your mobiles around the clock.

IT’S EASY:


MCB ATM account holders can pre-register their MCB account(s) and

Consumer/Account numbers of the Utility Company/Service Provider with their home

branch to avail this service.

MCB ATM Cash card holders can directly enter the Consumer/Account numbers of the

Utility Company/Service Provider onto the relevant ATM screen to make the utility bill

payment or to recharge their mobile phones.

BILL PAY CONFIRMATION:

What more once the transaction is completed, the ATM receipt will be printed which will

confirm the details and will be your proof of payment.

MAKE THE MOST FOR LESS:

The MCB Bill Pay Service is totally free* for all MCB ATM Card Holders and MCB Cash

Card Holders.

MCB ATM Cards:

It Works. Anytime in Pakistan and abroad. “With an ever-growing number of ATMs

operating across the nation, 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

that suits customer requirements most. And now the MCB ATM has gone global. MCB's

affiliation with Master Card International brings about added facilities for the MCB

traveler abroad with the Cirrus and Maestro networks.

You can use your MCB ATM 24- Hour Cash Card day or night, at home or abroad.


ATM Card Categories:

MCB ATM Regular Card:

The MCB ATM Regular Card allows withdrawal of up to Rs. 10,000 per day and a

maximum of 3 withdrawals per day per card.

MCB ATM Gold Card:

The MCB ATM Gold Card allows withdrawal up to Rs. 25,000 per day and a maximum

of 6 withdrawals per day per card. The cardholder has to make at least two transactions

to withdraw the full amount of Rs. 25,000.

Acceptability

ATM Usage outside Pakistan

MCB ATM Card can be used to access MCB account from anywhere around the globe.

MCB ATM is accepted at 634,700 locations where there are *Master Card or

Cirrus ATMs allowing you a daily withdrawal limit of US$ 200 (or equivalent in

other currencies) on availability of funds in your account. Plus, the convenience of

shopping through over 5 million Maestro POS (Point of Sales) terminals globally.

ATM Usage within Pakistan

MCB Bank has the largest ATM Network in the country with over 200 ATMs and over

300 online branches. The MCB ATM Card can be used in over 35 cities in Pakistan.

Whether you want to withdraw cash or ask for a mini-account statement, or even use it

as a debit card at Maestro POS terminals, the MCB ATM Card gives instant access to

your bank account, anytime, anywhere.

Additional Conveniences


MCB's revolutionary M-Net Switch enables to access MCB Account from any

member bank's ATM Machine

Mobile Banking helps to use GSM Phone to access mini-account statements and

balance information from anywhere

Funds Transfer Facility enables to transfer funds from one registered ATM Account

to another.

Mobile Banking:

MCB Mobile Banking service is available to all MCB ATM cardholders, 24 hours - 365

days to provide the account information and mini statements.

Mobile Banking at a Glance:

MCB Mobile Banking gives easy and quick access to customer’s account(s) at a time

you find convenient, including all holidays.

Banking at your Fingertips:

With MCB Mobile Banking you can:

Check your balance

View the last 4 transactions of your MCB account(s).

A Free Service:

MCB Mobile Banking is a free service for MCB account holders who have an ATM card.

All you pay for is the cost of an SMS message if charged by the service provider.

MCB Call Centre:

Services Offered:

General Inquires:


ATM Locations

Account opening procedures

MCB bank charges

Product information

MCB merchant locations

Financial Services:

Account Balance inquire

Pay orders request

Funds transfer request

Debit card Transactions details

Last five transactions details

Demand drafts request

Cheque book request

24 Hour ATM card blocking

Bill Payments (PTCL, SSGC, Mobilink, UFONE, Paktel)

Non-Financial Services:

Balance Certificate request

Bank Statements request

Address Change request

Virtual Banking activation

24 Hour complaint registration

Zakat Deduction certificate request

Tax deduction certificate request

Mobile Banking activation

Debit card blocking


MCB Bill Payments:

About MCB Bill Payments:

MCB is the only bank that offers 3 convenient options of making bill payments to

PTCL, SSGC, Instaphone, Mobilink, Paktel and Ufone. So, saves precious time by

avoiding long queues and pay bills through MCB Easy Bill Pay.

MCB Smart Card or MCB ATM Card Holder can easily pay their bills or re-charge their

prepaid mobile phone account through the following convenient options of MCB easy

bill pay.

Bill Payments Features:

Pay your bills 24 hours a day 7 days a week.

Make total payments of up to Rs. 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 pre-paid account for Ufone, Instaphone and Paktel as per their

fixed slabs

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.

MCB Virtual Banking:

MCB Virtual Internet Banking offers you the convenience to manage and control your

banking and finances – when you want to, where you want to. MCB’s Virtual Internet

Banking facility is

Simple

Secure

Free of cost.


With MCB Virtual Internet Banking you can access any of the banking services, 24

hours a day, 7 days a week and throughout the year.

Services Offered:

MCB Virtual Internet Banking offers a wide range of online services, which makes your

banking accessible anytime and from anywhere.

Detailed Account Summary of all listed accounts.

Mini-statements of each of the listed accounts showing recent transaction history for

that account(s).

Statement-by-Period of each of the listed accounts, based on the period specified.

Immediate or Scheduled Transfer of Funds between your own accounts, as well as to

third-party accounts setup as beneficiaries, maintaining accounts with MCB.

Scheduling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers.

Payment of utility bills for registered Utility Companies.

Immediate or Scheduled Bills Payment. Scheduling of ‘One-Time’ as well as

‘Recurring’ bill payments. Option for ‘Full’ or ‘Partial’ payment based on the payment

conditions specified by a particular Utility Company.

Bulk Salary Transfer for Corporate Customers, to facilitate them in paying salary to

the corporate employees, who maintain accounts with MCB.

Bulk Funds Transfer for Corporate Customers.

Cheque Book Request for any of your listed accounts.

Payment/Transfer Alerts for reminding, in advance, prior to the processing of

specified payments and transfers.

Personal Alerts for reminding of pre-specified events and occasions


Cards:

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 your bank account.

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. You can avail

the following functionalities on your MCB Smart Card.

Smart Features:

Purchasing:

Smart Card 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.

Existing MCB ATM Card holders have been automatically provided with the debit

facility.

International Usage:


International cardholders have the un-matched advantage of using this facility at

millions of Iocations worldwide carrying the logo.

Bill Payment:

Hassled by long queues and short bill- T accepting hours at limited locations? Now you

can use the Smart Card to pay your utility bills at the largest nationwide network of

MCB ATMs. Pay online and get instant confirmation of payment.

Make bill payments up to 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.

Funds Transfer:

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 Smart Card 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.

24 Hour Cash Withdrawal:


The purchasing, bill payment and funds transfer facilities of the Smart Card frees you

from the inconvenience of carrying cash. However, your Smart Card gives you the 24-

hour freedom to withdraw cash from the largest network of MCB & ATMs across 30

cities in Pakistan and growing. In addition to ATMs, you will also soon be able to

withdraw cash from POS terminals at selected merchant outlets.

International Usage:

International Cardholders can withdraw cash from their account in Pakistan from a

global network of over 634,000 ATMs worldwide with the logo. So whether you

are on a business trip or a vacation, MCB Smart Card will be you’re trusted.

Balance Inquiry:

Whether abroad or in Pakistan, far from your branch, Smart Card gives you the

flexibility to instantly obtain your account balance, 24 hours a day, without the

inconvenience of calling or visiting a branch.

This service can be availed via any of the following:

From MCB POS terminals at merchant locations

At the largest nationwide network of MCB ATMs

By using the MCB Mobile Banking facility.

Mini Statement:

The mini-statement facility gives you 24 hour access to your updated account balance &

the status of recent entries for your record keeping and reconciliation.

This service can be availed via any of the following:

1. From MCB POS terminals at merchant locations

2. At the largest nationwide network of MCB ATMs


3. By using the MCB Mobile Banking facility.

Easy steps that guide you through getting Balance Information

At ATMs:

Step 1: Insert your Smart Card into the ATM and enter your PIN.

Step 2: Select "Balance Inquiry"

Step 3: Collect slip with your balance information.

At POS Terminals:

Step 1: Present your Smart Card to your merchant.

Step 2: The merchant will swipe your card to follow a prescribed procedure.

Step 3: Enter your PIN on being handed a portable POS or a pin-pad and press “Enter”.

Step 4: Collect slip with your balance information.

*For getting your account balance using Mobile Banking, see the Mobile Banking

section.

** Selected merchant locations.

AT MCB Mobile Banking:

Smart Card holders can enjoy the free 24 hour facility of checking their account information

and mini-statements on their mobile phones using SMS (Short Messaging Service) with

comfort and peace of mind.

MCB Mobile Banking is available 24 hours, 365 days and gives you quick and easy

access to your accounts at a time you find convenient, including all holidays. This facility

is also available globally, if you are on roaming with messaging facility provided by your


phone service provider. Just call our Call Centre on (021) 111-000-622 or any MCB

online branch for assistance.

With MCB Mobile Banking you can:

1. Check your balance

2. View the last 4 transactions of your MCB account(s).

A Free Service

This service is free of charge (however SMS charges of the phone service provider may

apply) and is currently available on Instaphone, Mobilink & Ufone.

How to get connected

If not already enrolled, please visit your branch and fill out an MCB Mobile Banking

registration form. You need to provide your mobile phone number and the account

number(s) for which you want the service to be activated. Subsequently, you will receive

a message on your mobile phone confirming your registration and requesting you to

select a PIN (Personal Identification Number) which is for Mobile Banking only.

Y our Mobile Banking PIN:

PIN is your confidential code for security and it identifies you as an authorized MCB

Mobile Banking user. You can select your own PIN.

Step 1: Access the message function menu from your mobile phone.

Step 2: Then go to the Write Message screen, and enter your 4 digits PIN by typing

the following command: PIN (space) ****


Step 3: Send the message command containing your PIN to the phone number 999

– an exclusively dedicated phone number for MCB Mobile Banking.

Step 4: Once you receive the confirmation message on your mobile, please call our

Call Centre on (021) 111-000-622 or contact your branch for the activation of your

service.

Smart Support:

Currency Conversion:

USD (US Dollar)* amounts are converted to PKR (Pak Rupee) at the exchange rate

specified by the State Bank of Pakistan for card transactions.

For ATM transactions, $3 or 2.75% of cash withdrawn (whichever is higher) will be

charged on international transactions and $1 will be charged for balance information.

International usage of your card is governed by the rules and regulations of State Bank

of Pakistan.

* Your transactions in other currencies are converted into US dollars at MasterCard

specified exchange rates.

Spending Limits:

Only MCB gives you the flexibility to choose from a range of card usage limits. Smart

Card 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 following table:

ATM Withdrawal

Limit (Rs.)

POS Purchasing

Limit (Rs.)

Local

Classi 10,000 50,000


c

Gold 25,000 100,000

International

Classi

c10,000 100,000

Gold 25,000 150,000

Reporting a Dispute:

In case you notice any discrepancy either after completing a transaction or on

reconciling the transaction slips on receipt of your statement, notify the bank within 7

days by filling out a Dispute Resolution Form. This form is available at your branch

Lost or Stolen Card:

If your card is lost or stolen or you suspect your PIN is compromised, it is important that

you report it immediately so that we can block/cancel the card and reissue a new card.

Call the 24-hour MCB Call Centre on 0800-69622 and get an acknowledgment

reference number or report to the Manager of your MCB Online branch and receive a

written acknowledgment. (Please always quote the acknowledgment reference number

in all your subsequent correspondence)

MCB Master card:

THE FUTURE OF MONEY:

Since the beginning of time, people have tried to find more

convenient ways to pay, from gold to paper money and cheques.


Today, money is moving away from distinct hard currencies and towards universal

payment products that transcend national borders, time zones, and, with the Internet,

even physical space.

Plastic or "virtual" money, credit, debit, and electronic cash products, inevitably will

replace

Master Card Features:

MasterCard International has expanded globally in more locations in the world than any

other card. The card was introduced by Muslim Commercial Bank Limited in 1995 and

now offers card members over 15 million outlets in 232 countries.

Photo security- The first bank in Pakistan to introduce the enhanced feature of

photograph on the card limiting fraud in case of card loss.

Welcomed at over 3, 000 outlets in Pakistan.

Provides up-to 45 days Free Credit.

Joining and Annual Fees to suit you.

24 Hour Customer Services- Call 111-000-622 and you can get information from

our customer services representatives on new card application or have your queries

resolved anytime of the day.

Cash Advance Facilities available in Pakistan and worldwide.

MCB VISA:

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

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

Introducing unique, innovative and state of the art services, MCB Visa is the most

secure, affordable and rewarding credit card... turning your shopping into a much more

exciting experience.

MCB Visa is accepted at all ATMs across Pakistan as well as at 27 million acceptance

locations worldwide.

Your card comes packed with the most amazing features and is the only card that truly

lives up to your expectations.


Traveller’s Cheques:

MCB Bank has been at the forefront of providing it’s

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 Traveler's Cheques Features

Easily available: Buy them from any of the designated branches in Pakistan.

As good as cash: MCB RTC’s are safe to carry and can be used without any

inconvenience especially by Travelers.

Easily encashed: 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, and Rs 10,000 and

gift cheques of Rs 500.

Valid until Used: Validity of Cheques indefinite.

24-hour Service available at Airport MCB booths Karachi, Lahore & Islamabad.

Tele-verification System allows checking validity of all Cheques through telephone or

fax. Tele-verification No. (021) 111-000-456. or call MCB CALL CENTRE (021)-111-

000-622

24-hour Customer Service Facility: (021) 111-000-123.


More than 900 MCB Authorized branches are selling and purchasing Cheques all

over Pakistan.

MCB Rupee Traveler's Cheques are also available at the counters of Foreign Banks

such as ABN Amro and HSBC and private bank i.e. Bank Al-Habib.

GIFT CHEQUE:

MCB Gift Cheques eliminates guesswork in trying to find out the perfect Gift for any

occasion birthdays, wedding, graduation and religious festivals. Gift Cheque is

beautifully packed in a Gold / Silver envelope with a personalized Gift Card

designed to suit all occasions. They are safer than cash, because they can be

replaced if lost or stolen. They are also available at all TCS Express Centers round the

clock.

Remittances:

Fast, secure and easy-to-use, MCB's Remittance Services is an efficient way to transfer

money overseas. You can remit funds from any country to Pakistan through Swift

System.

About Remit Express:

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 72 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 have an MCB account

Accounts:

Pak Rupee Accounts:

Saving accounts:

MCB’s Rupee Savings account is the most convenient way to manage your savings.

Low average balance requirement

Enjoy unlimited free of cost transaction facility at your branch

Profit is paid on your account on a half yearly basis

Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan

(conditions apply)

Withdraw cash through Pakistan’s largest ATM network.

Make cash free transactions, from your account at thousands of merchant outlets

through your MCB Smart Card (local & international)

Stay in touch with your account through MCB’s Virtual Banking Service.

Use your account to pay your bills 24 hours a day, 7 days a week through Virtual

Banking

Get instant updates about your account through MCB’s sms banking

1. Saving 365:

The MCB Saving 365 calculates profits on a daily product basis and gives you the

facility of unlimited withdrawals.

Open a Saving 365 Account with a minimum initial deposit of Rs. 300,000. Low

average balance requirement.

Enjoy unlimited free of cost transaction facility at your branch.

Profit is paid on your account on a half yearly basis.



(conditions apply).



through your MCB Smart Card (local & international).

Stay in touch with your account through MCB’s Virtual Banking service.


Banking.

Get instant updates about your account through MCB’s sms banking.

You can avail a credit facility up to 75% of the total deposit value

2. Saving 365 Gold:

At MCB, you can open an account that fits your requirements. MCB offers a wide range

of attractive term deposit schemes to suit your requirements.

Open a Saving 365 Gold Account with a minimum initial deposit of Rs. 10 Million.

Offers a tiered profit rate structure.




(conditions apply).




Stay in touch with your account through MCB’s Virtual Banking service.


Banking.


You can avail a credit facility up to 75% of the total deposit value.


3. Khushali Bachat Account:

Enjoy the facility of a savings account and earn profit on daily balances.

Low average balance requirement.



(conditions apply).






Banking.


4. Smart Saving Account:

MCB smart saving accounts gives a 7% return per annum, calculated on monthly

basis, based on the minimum monthly balance maintained during that month

3.0% p.a if minimum balance is ≥ Rs 10,000 < 100,000

5.0% p.a if minimum balance is ≥ Rs 100,000 < 200,000

7.0% p.a if minimum balance is ≥ Rs 200,000 ≤ 300,000

Profit will not be paid on any amount above Rs 300,000

MCB Smart Saving account is available through MCB’s vast network of about 600

online branches all over the country.

No issuance fee will be charged on issuance of the MCB Smart Card not only for you

but also for customer’s spouse.

The MCB Smart account holders will receive a preference over anyone else to use

the facility of MCB Lockers.

50% discount will be given if Smart Account holder avails any of Customer Loans

Facility.


Free virtual banking facility at no cost

Its meant for Individuals (joint or singles) only

Existing account holders can also open this account

Minimum deposit requirement 10,000 only

Account will be operated through Smart Card only , cash withdrawal shall take place

through all M-net and 1-Link ATMs and cash payments at over 6,000 merchant

outlets in all across Pakistan

Zakat shall be deducted as other saving accounts

Customer can get DD/TT/MT/PO issued and online transactions done through your

MCB Smart Saving account.

Current accounts:

MCB’s Rupee Savings account is the most convenient way to manage your savings.

Low average balance requirement.




(conditions apply).






Banking.


Basic Banking Account:

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

issued on November 29, 2005, the Basic Banking Account has been launched with

effect from February 27, 2006.


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

existing 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 minimum

initial deposit of Rs. 1000/- only. Account holders will be allowed 2 deposit transactions

(either 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 of charge cash withdrawals are allowed through MCB's own

ATMs.

There will be no minimum balance maintenance requirement, and hence no monthly

account maintenance charges will apply.

“In cases where balance in BBA remains ‘zero’ for…” a continuous 6 month period, the

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

account holders who wish to convert their existing account into Basic Banking Account

are requested to contact their respective Branch Manager.

Term deposit:

At MCB, you can open an account that fits your requirements. MCB offers a wide range

of attractive term deposit schemes to suit your requirements

Avail your choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years

and 5 year term deposits.

Low investment threshold.

Half yearly profit payment.

Avail a credit facility up to 75% of the total deposit value.

Special term deposit:

MCB’s Special Rupee Term deposits offer a very attractive long term investment option

with ease and convenience.


Highly attractive profit rates.

Tenors available are 3 months, 6 months, 1, 3 and 5 years.

Profit on 3 and 6 months deposit is payable at maturity of deposit.

Profit on 1, 3 and 5 years deposit is payable quarterly.

Profit can withdraw your profit amount through our wide network of ATMs.

Avail a credit facility up to 75% of the total deposit value.

Contact your branch for information on the present profit rates on offer.

Foreign Currency Accounts:

Saving accounts:

MCB’s Foreign Currency Savings Account offers you attractive returns on your Foreign

Currency investment.

Open a foreign currency Savings account in any of the four currencies i.e. US Dollar,

UK Pound Sterling, and Euro.

Unlimited transaction facility.

Low balance requirement.

Profit credited to your account on a half yearly basis.


A foreign currency account can be opened at any of our foreign exchange dealing

branches.

Current accounts:

MCB’s Foreign Currency Current Account offers you the convenience of unlimited

withdrawals i.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.

Open a foreign currency Current account in any of the four currencies i.e. US Dollar,

UK Pound Sterling, and Euro.

Unlimited transaction facility.

Low balance requirement.

CREDITS

FUND BASE FACILITIES

NON-FUND BASE FACILITIES



A foreign currency account can be opened at any of our foreign exchange dealing

branches

2 - MCB LOANS:

TYPES OF LOANS OFFERED:

LONGTERM/PROJECT LOAN/LEASING

SHORT TERM LOAN/WORKING CAPITAL LOAN

LETTER OF CREDIT

LETTER OF GUARANTEE


TERM LOAN:

You as an individual can gain and benefit the most through MCB Consumer Banking. In

MCB you get friendly, efficient and attentive personalized banking services - a unique

banking relationship experienced by each MCB client.

MCB Corporate Banking ensures assistance from a dedicated team of professional

financial advisors for underwriting, project finance or corporate advisory services.

SHORT TERM LOAN (working capital loan):

It’s a business purpose loan usually given to business organization having interest. It

fulfills the needs of working capital. This loan is given for one year but after one year it

can be renewed.

Based on the customer’s specific needs, the Corporate Bank offers a number of

different working capital financing facilities including Running Finance, Cash Finance,

Export Refinance, Pre-shipment and Post- shipment etc. Tailor- made solutions are

developed keeping in view the unique requirements of your business.

LONG TERM LOAN (project loan):


It’s also a business loan for long period, having % interest. This loan is usually

provided for the major project. Previous balance sheets must be checked by the bank

for evaluate their reputation.

CASH FINANCING:

It’s a seasonal loan given to shallers; floor mills owners etc. having % interest. This

loan is given for 6 months.

O THER SPECIALIZED LOANS:

Saving Account with Current Account Facilities

The MCB Saving 365 calculates profits on a daily product basis and gives you the

facility of unlimited withdrawals.

Open a Saving 365 Account with a minimum initial deposit of Rs. 500,000.

Your Profits are calculated on daily product basis payable on a half yearly basis

No restrictions on the number of withdrawals

You can avail a credit facility up to 75% of the total deposit value

With a network of over 1,000 branches and a team of dedicated professionals, MCB is

Pakistan’s largest private sector commercial bank.

MCB Business Sarmaya:

MCB Business Sarmaya offers a running finance facility against your

house/flat and is the best way to resolve all your cash flow problems.

Flexible:

Running finance facility to use when and for whatever you want

Financing up to Rs 20 million

Renewed every year

Business Set... Tau Life Set


Pay back when you want

No fixed monthly payment

Affordable

Lower mark up and that too only on utilized amount.

High Loan Amount

Loans up to 70% of the value of your house / flat.

Speed

Fast and hassle free processing of application after completion of your

documents.

Ease

Doorstep service and assistance from our dedicated sales staff to fill and submit

application along with documents.

Wide Accessibility

Access your Business Sarmaya account through our vast ATM and branch

network anywhere in Pakistan.

Special Benefits

Hassle free process to transfer your similar facility from any other bank at

a special discount.

Availability


Access your Business Sarmaya account through our vast ATM and branch

network anywhere in Pakistan.

Existing Customers

Get a discount if you are already a customer of similar facility of any other bank.

MCB Personal 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

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.

Affordable

Equal monthly installments

Lower interest rates

Higher loan limits

Special Benefits

Loan amount renewed anytime after nine months.


Existing Customers

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.

MCB Easy Personal Loan provides you with the financial advantage to do things you've

always wanted to but never had the sufficient funds for. Take that much-needed holiday.

Buy a car. Refurnish your house. Purchase a new TV. Finance a better education for

your children.

Features Offered:

MCB will lend you any amount, from Rs 30,000 to Rs 490,000, depending upon

your net monthly income

You can choose a tenure of 1 to 3 years for the repayment of the loan

Facilities Available:

Bank to Bank Balance transfer

Credit Card balance transfer

Loan Protector Shield- insurance coverage of balance loan amount in case of

death or permanent and total disability

Availability of early repayment option

Repayment Arrangements:

Repayment of principal and mark-up is monthly and can repay using either one of the

following modes:


Direct Salary Transfers

Payroll Deduction

Post-dated Cheques.

Eligibility Criteria:

Minimum net monthly income Rs 10,000

25 to 55 years of age

Pakistani national

Permanent resident of Karachi

At least 2 years of employment with current employer.

Initially offered to employees of selected institutional MCB customers in Karachi.

Processing Fee:

Processing fee of 1% of the principal loan amount to be charged at the time of loan

disbursement.

MCB Car 4 U:

Through MCB Car 4 u locally manufactured as well as imported cars can be financed at

affordable rates. They can be either Brand new or used

Flexible:

Option for financing or leasing

Financing tenures from 1 to 7 years

Options for new as well as used cars

Option for local as well as imported cars

Kahin na Kahin tau Hai.. 1 Car 4 U.


Financing up to Rs. 35 laces

Option for early payment.

Option for Replacement Loan

Option for first year insurance financing

Affordable:

Lower mark-up rates

Lower insurance rates

Only up to 10% down payment

Equal monthly installments.

Speed:

Fast and hassle free processing of application

Priority delivery on different vehicles

Special Benefits:

Option to pay your 1st installment after 3 months

Pay your down payment after your loan is approved

Availability:

Currently available in 16 major cities: Karachi, Lahore, Faisalabad, Rawalpindi,

Islamabad, Quetta, Multan, Peshawar, Hyderabad, Sialkot, Gujrat, Gujranwala,

Sargodha, Mirpur (AJK), Jhelum, Sahiwal

Will soon be launched in Rahim Yar Khan, Sukkur, Mianwali, Abbottabad, Mardan

and many more cities.

Existing Customers


Get 1 % discount if you are already our customer for Personal Loan, Pyara Ghar or

Business Sarmaya.

If you are our branch customer, you can avail this facility anywhere in Pakistan


MCB Pyara Ghar:

Desire a home of your own? Want to renovate your existing home?

MCB Pyara Ghar now provides you with all you want as you can

renovate your existing home, buy or construct a dream house that

you always envisioned for you and your family. After all, "Apna

Ghar... Pyara Ghar"

Flexible:

Financing up to Rs 20 million

Financing Tenures from 2 to 20 years

Options to buy construct or renovate your house or flat

Option for partial payments

Option for early payment.

Affordable:

Lower mark up rate

Loans up to 80% of the value of your house or flat

Option to club your spouse's income to avail higher financing limits

Equal monthly installments.

Speed:

Fast & hassle free processing of application

Special Benefits:

Hassle Free Process to transfer your similar facility from any other bank at a

discount.

Ease:


Doorstep service and assistance from our dedicated sales staff to fill and submit

application along with documents.

Availability:

Available in all major cities i.e. Karachi, Lahore, Faisalabad, Rawalpindi and

Islamabad.

Muslim Commercial Bank has launched Pyara Ghar-Your window to own a home. Yes!

MCB puts your dream home within your reach.

A Pyara Ghar of Your Own:

Surely, you may have cherished a dream of having your own house or an apartment for

a long time. Now you can build and own a comfortable place for your family. Choose

from any of our three home financing options and you are on your way to your own

Pyara Ghar.

Why Borrow:

Your Savings are never enough and not time to catch up with the soaring property

prices. With the MCB Pyara Ghar Scheme you can obtain the financing to purchase a

house/apartment, construct your own house or renovate your existing house

immediately. Nothing could be more convenient than owning a house and paying easy

installments that take you a step closer to becoming the owner of your house. It is better

than paying a monthly house rent which takes you nowhere other than increasing your

expenses. Pyara Ghar is definitely the most feasible and most direct route your dream

house.

Why Pyara Ghar:


Low mark-up rates: MCB gives you your dream home at the lowest and best possible

mark-up rates.

You can choose either one of our two mark-up rate options- fixed or variable.

Early repayment option tailor-made to allow you to make partial prepayments at

dates that suit you.

Option to club your spouse's income to avail higher financing amount.

We also tailor Corporate Packages for the employees of selected institutions

And now a home financing that helps you get your own Pyara Ghar

Who Can Apply?

Anyone who fulfills the following criteria is eligible to apply.

Pakistani national residing in the city and area where the product is launched.

25 years old or above when you apply and under 60 at the time of maturity of the

applied financing period.

Salaried person, self-employed professional or a businessman with a verifiable

monthly income stream.

Net take -Home income not less than Rs. 25,000 per month.

Have 5 years or more of business or professional experience.

Employed with the present employer for 2 years with a total employment history of 5

years.

Home PurchaseHome

Renovation

Home

Construction

Financing

Amount

Rs. 200,000 to Rs.

5,000,000(Flexibility up to

Rs.7m.)

Rs. 100,000 to Rs.

2,000,000

Rs. 200,000 to Rs.

5,000,000

Debt to

Equity Ratio60:40 30:70 50:50

Tenure 3 years to 15 years 2 years to 5 years 3 years to 15 years


Existing Customers

Get discount if you are already a customer of similar facility of any other bank.


This part of the report is based upon practical exposure which I got in MCB Bank

Limited Branch during my eight weeks training.

I have worked in four departments, which are Account Opening, Clearing

Department, Operations Department, and Remittance Department. The experience

and knowledge that I got during my work over there is remarkable. Most importantly

the way all the Managers and employees treated me is appreciable. I felt free to ask

all questions in my mind and clear all the ambiguities which I need to understand.

Following is the detail of activities performed in

General Banking Department

1. Operations Department

2. Clearing Department

3. Remittance Department

Customer Facilitation Department

The first week of internship was in operations department and on reception; the

duties assigned to me on reception were as follows

Fill the pay-in-slips for the deposit of cash

Fill the pay-in-slips for the deposit of cheques

Fill the On line slips

Fill the pay order and demand draft slips

To give any other information regarding MCB Bank Limited

Now these all are explained one by one in detail as follows:


Fill the pay-in-slips for the deposit of cash

Many customers want to deposit cash into their own account or into the account of any

other person. There is a need to fill the Pay-in-slip of the customer. It is very easy to fill

it.

There are two parts if this slip. One is kept by the customer and one for the bank record.

First of all the date is written on top right corners of both parts, then one must have the

name and account number of the person in which he wants to deposit the amount. Then

on the particular portion of that slip the word “Cash” is written on the centre of both parts

which shows that the mode of payment is by cash.

Then the amount in words and figures is also written on both parts. The amount in

words and figures must be same otherwise the bank is not going to accept the slip. At

the end there is a need of signature of the customer on the part which is retained by the

bank. After filling this slip the customer is sent to cash counter where the amount written

on the slip is received by the cashier and supervised by the deposit in charge. He then

stamps “Cash Received” and hand over the customer part to the customer.

Fill the pay-in-slips for the deposit of cheques

Filling of pay in slip of deposit of cheques is very much similar to the pay in slip of the

cash. The date, name and account number is written in the same way. In particulars the

cheque number, name of bank and branch issuing cheque and the name of city of that

branch is written. Then we write the amount in words and figures on the slip.

Then put a crossing and a clearing stamp on the cheque. The officer signs the slip and

gives it to the customer. These cheques are retained by he officer for entering them into

the register. Day’s serial number of cheques starts from one, we write the account

number, in which the cheque is deposited, then the cheque number and amount and

then the name of bank whose cheque is it is entered in the register.


These cheques are then handed over to the responsible persons, i-e the online cheques

are given to the person dealing online, the local cheques are given to the person who is

on posting of local cheques and cheques of other banks are given to the person who is

on clearing. When each cheque is given initial signatures are received in front of that

particular cheque to make sure that no cheque is misplaced.

To give any other information regarding MCB Bank Limited

I help the customers in case of any inquiry. For example if the person want to get loan

from the bank then he in sent to loan department and if a person want to get information

about foreign trade then he is sent to foreign trade officers. Some other kind of

information may include that where is Mr. ABC etc.

So these are all the duties which one has to perform when one is sent to reception. The

main purpose of training at reception is to know customer dealing and how to satisfy our

customers.

ACCOUNT OPENING

Account Opening documentation is the primary evidence of the relationship between

bank and the Customer, it is of much importance that these information’s be correctly

obtained. Similar care must be exercised in obtaining additional documentation as

and when they become necessary due to change in the future of constitution of an

account.


During the second week of my internship program, I got an opportunity in the

account-opening department, which is one of the basic and major operations of the

ban. I am open many accounts during my training. Here, I have described the

procedure of account opening, types, and other requirements.

Types of account

Individual Account

Joint account

Proprietorship account

Partnership account

Private Limited Companies account

Public Limited Companies account

Basic Documentation

The basic Account Opening documents generally required to open and operate any

account are:

The account opening form

Know your customer (KYC) form

The specimen signature card

Copy of CNIC/passport(original + copy)

Other additional documents required at the time of opening different types of

accounts, in addition to the basic documentation.

Account Opening Form (AOF)

First of all customer is asked to fill an account opening form which contains the

following sort of information.

Title of the account

Type of account


Initial deposit

Nominee

Reference

Residential information and other bio data of the customer

Specimen Signature Card

It contains the title of account, name of account holder and signatures of the

customer.

The Manager Operations (MO) will sign in full, against all the signatures on SSC and

affix the stamp of “Signature Admitted” close to the signature of the account

holder/customer.

The SSC must be sent for the capturing of the signature into the system.

KYC form

This form is also filled while opening any account. It contains the information about

account holder like; profession or business, account in any other bank, residential

details, vehicle details, employer or business address etc.

The purpose of KYC form is to know whether account holder really earns much to

hold the balance in its account that it contains. The purpose is to avoid opening an

account of a person who seems to earn illegally or black money.

ACCOUNTS

Individual Account

For individual account, following documents will be required:

Attested copy of CNIC

Letter of kinship/nomination

Cheque book requisition slip

KYC form

Joint Account


Joint account is an account in the names of two or more persons (Other than

Partners). In this regard it is to be ensured that:

Cheques are signed according to the mandate

Before making payments of the major amounts drawn jointly through

cheques by the account holders, each signature must be verified with due

care. In this regard confirmation should be obtained from all the related

Account Holders.

In this case following documents should be obtained

Attested copy CNIC of all the account holders

AOF

KYC form

Cheque Book Requisition Slip

Sole Proprietorship

A formally stamped written request on the official Letter Head of the business/Firm of

the Sole proprietor in order to open a Sole Proprietor Account must be submitted

along with AOF. This request for opening of a Sole Proprietorship Account should

comprise the following clause:

“I am a Sole Proprietor in the firm and as such, I am entirely

responsible for all transactions carried out in the name of the firm and I am

personally liable for any overdraft or other obligations arising in or in connection

with this account with commission and/or other banking charges and expenses

incurred in connection with this account.”

For this type of account, following documents are required to open an account.


Attested copy CNIC of all the account holders

AOF

KYC form

Cheque Book Requisition Slip

“Letter of declaration” for the proprietorship concern on Letter Head

Certified true copy of “Business Registration Certificate”, if any

Account of an Illiterate Person

In the matter of Illiterate Customers account, it should be ensured that the attested

photograph may be attached with the SSC.

It should further be ensured that

Only saving accounts are opened for illiterate customers.

At the time of Account Opening, photographs and thumb impression will be

attested by MO.

Two latest passport size photographs of such customer must be obtained

and pasted on AOF and SSC, duly attested by MO.

Illiterate customer must attend the bank personally along with the Cheque

book for the withdrawals of funds from their account. It will be mandatory

for such account holder to affix the thumb impression on Cheque in the

presence of MO at the time of withdrawal.

Partnership Account

Partnership is an association of two more persons who have agreed to share profits

of a business carried on by all or by any one of them acting for all. The terms and

conditions must be spelled out in the “Partnership Deed”.

It should be ensured that

Accounts of only registered Partnership concerns will be opened and the

“Partnership Deed” will be obtained and critically reviewed.


AOF must be signed by all the partners.

The signing and delegation of power of those authorized to operate the

account should be clearly stated on the AOF documentation in accordance

with “Partnership deed”

For Partnership Account following documents will be required

A Request Letter for opening of a new account on the Letter Head.

Attested copy of CNIC of all partners

Attested photocopies of the registered “Partnership Deed” duly signed

by all partners

The Deed, clearly setting out the extent and personnel authority of each

of the Partners to represent the partnership

ACCOUNT OPENING PROCEDURE

Following steps are followed while opening an account

i. First step will be verification of the introducer of new account. The introducer

should preferably be an existing Account Holder of the Bank/Branch.

ii. A copy of CNIC of the Customer will be attested by MO of the Branch

iii. Customer will be asked to fill AOF

iv. The customer will sign the AOF

v. The AOF along with relevant documents will be obtained

vi. AOF along with documents will be forwarded to MO for his approval


vii. MO will ensure that all the requirements for Account Opening have been

met and the style of signatures of Account Holder(s) on the AOF and SSC

are identical. MO will then sign in full against all the signatures given in AOF

and SSC and affix the stamp of “signature Admitted” near the specimen

signature of the Account Holder/Customer. MO will also approve the KYC by

signing in full.

viii. Now MO will obtain Account Number from the system and note it down on

the AOF, SSC, KYC and all other relevant underlined documents.

ix. Then customer service officer will key-in the data of the new Account

Holder(s) in the system and new account transaction will be saved in the

system.

x. After that all forms and documents will be hand over to MO for authorization

and supervision in the system.

xi. MO will scrutinize AOF and all underlying documents and compare the

same with the information loaded in the system by retrieving the Account

Opening data i.e., name of the customer, title of the account, CNIC number

and Depositor’s code etc.

xii. Once satisfied with the documentation and accuracy of the transaction in the

System, MO will authorize/ supervise the same and new account will

become operative.

xiii. Then deposit slip along with account number will be supplied to account

holder to make initial deposit. This is Rs. 10000.

xiv. After that it must be ensure that “Letter of Thanks” on the Bank’s format has

been sent to the introducer and new account holder through registered post/

courier.

All customers’ accounts are numbered in numerical serial order in a register.

CHEQUE BOOK ISSUANCE

Cheque book are issued to the Account Holders after the completion of all Account

Opening formalities and successful completion of “Account Opening Form” in all

respects.


Customer will be required to fill and submit a duly signed “Cheque Book Requisition

Slip” for the issuance of Cheque books and an acknowledgement will be obtained

from the customer at the time of delivery.

When Cheque books are issued to a third person it is to be ensured that third person

is duly authorized by the Account Holder and his Signs and NIC number is checked.

When Cheque book is to be issued to an illiterate person, the affixing of thumb

impression must be witnessed by the MO. If Cheque books are held undelivered for

more than 30 days, a reminder is sent to the account holder.

All subsequent Cheque books after the first issuance will be issued against the

Cheque Book Requisition Slip which is extracted from previous Cheque book issued

to the Account Holder.

Issuance of ATM cards

The ATM card is initially collected from the verification department than the pin code is

taken from the operation department. The registered is maintained for the recording of

the information of the person like his name, the card number, and telephone number,

which all shows that he has taken the card.

Loss of ATM

In case of loss of ATM card. Immediately block that card. Through the account number

of the customer the number of card can be traced to the computer


Clearing department

Nearly all the banks provide a wide variety of services to their depositors. One

valuable service provided by MCB Bank Limited Branch is that of clearing. Clearing

department also plays an important role in performing the activities of the bank.

Before presenting the function performed through clearing, we must have an

understanding of its definition.

We can define clearing as,

"The transfer of funds from a branch of bank to the other

branch of the same bank or the other bank on which the instrument is

drawn, without involving cash through "State Bank's clearing house"

The function which clearing department plays is that it provides a service to its

customers regarding the collection of their cheques of other banks, whether they are

in city or outside the city. The customer can get the money in his/her account at MCB

Bank Limited from the cheques drawn on another bank. The bank accepts the

cheque in the clearing department & later on collects these cheque from the other

bank on which it is drawn through the clearing house NIFT i.e., State Bank of

Pakistan.

For example, sometimes the account holder of MCB Bank Limited presents a cheque

which is not drawn on MCB Bank Limited but the person has an account in MCB

Bank Limited. In this case bank accepts this cheque in clearing department & after


collecting the amount from that bank on which cheque is drawn; MCB Bank Limited

will credit the account of customer (account-holder). This function is called clearing

function.

Clearing house

It is one of the services provided by central bank i.e., State Bank of Pakistan to the

other commercial banks. SBP acts as a clearinghouse. Different banks are the

members of the clearinghouse.

"A clearing house is an association of commercial banks set up in a given locality

for the purpose of interchange & settlement of credit claims".

A representative of each bank represents his/her bank in the clearinghouse. Each

bank’s representative has cheques on behalf of his banks customer (these

cheques are not drawn on their own bank) in the clearinghouse. They hand over

these cheques to the respective banks on which these cheques are drawn &

received from other banks, if any.

The SBP maintains the accounts of the MCB Bank Limited like other scheduled

banks and debits the account of the drawee bank and credits the presented bank

which is MCB Bank Limited in that case.

Types of instruments

Following instruments can be presented at the clearing department:

1. Cheques

2. Demand drafts

3. Pay orders


4. FTD

5. RTC

Cheques

Some specific types of cheque are being entertained in the clearing department of

MCB Bank Limited Branch. These types of cheques are:

1. Local cheque

2. Out station cheque

3. In house Cheque

1. Local Cheque

By local cheque we mean collection of cheques from the banks which are the

members of the clearinghouse and which are located within the city.

2. Out Station Cheque

By out station cheque we mean collection of cheque from the banks, which are

situated outside the city. It means that presenting bank and the bank on which the

cheque is drawn are not situated in the same city.

3. In House Cheque

In house cheque are drawn on one branch of MCB Bank Limited and presented to

another branch of MCB Bank Limited such cheques are marked with transfer

stamp.


Types of clearing

Clearing department deals in two types of clearance. These are stated below:

1. Inward clearance

2. Outward clearance

1. Inward Clearance

Cheque drawn on MCB Bank Limited and presented to other Banks or handed

over to MCB Bank Limited agent in clearing house. That is inward clearance for

MCB Bank Limited. So inward clearing results in outflow of funds to collecting

banks reducing the balance in the clearing account.

Inward Clearing Forms:

SB 63 - Clearing Register (instruments received are recorded in received column)

SF 15 - Voucher sheet (recording of instruments received)

SF 16 - Memo of objection (returned Instruments)

SB 15 – Cheques Returned Register (cheques returned unpaid are recorded)

Accounting Entries:

Customer A/c Dr

Clearing Control A/c Cr

Clearing Control A/c Dr

Main Branch Cr

1. Outward Clearance


Similarly cheques which are drawn on other bank and presented to MCB Bank

Limited branch are known as outward clearance for MCB Bank Limited branch.

So outward clearing results in inflow of funds from paying bank into the clearing

account maintained with the clearing house, increasing the balance in the clearing

account.

Outward clearing thus may be:

Local clearing

Outstation clearing

Excess of outward clearing over inward clearing produces a net increase in the

clearing account balance. Excess of inward clearing over outward clearing

produces a net decrease in the clearing account balance. The first case is referred

to as favorable clearing & the second case as unfavorable clearing.

Outward bills for collection (OBC)

Outward collection means the cheque of other banks. Outward bills for collection are

the reciprocal of IBC that is drawn on bank & deposited in other bank.

For example, person A, who is in Islamabad and payment, will be made by him. Now

seller will deposit the cheque deposit slip in his bank, UBL Islamabad. UBL will

prepare a draft & letter & send it to Prime Commercial Bank Limited Lahore.

Prime Commercial Bank Limited Lahore will debit his customer A's a/c & credit

clearing. This draft will be then transferred back to Islamabad through clearing where

credit will be given to customer & debit to clearing house.

Within 3 days payment should be received otherwise reminder will be send to the

payer to pay amount. This reminder will be either through courier service or TCS etc.

If payment is not received within 15 days then reminder should be send after 8 days

of 15 days limit

CLEARING

Inward Outward

Final Voucher Prepared

Bundle Cover

Separate Deposit Slips and Cheques

Posting

Stamping

Scrutiny of Cheques and Deposit Slips

Cheques Deposited

Make Bundle of 50 Cheques per List

Hand Over to NIFT Agent



Stamping

Three stamps will be used in case of IBC & OBC.

1. Stamp of OBC (or IBC) whichever is the case.

2. Crossing stamp.

3. Payees a/c will be credited.

First two will be in front side of cheque while the 3rd stamp will be on the backside of

the cheque.

Entry is made in the register of OBC (or IBC) & from the register the no. of OBC (or

IBC) is given on the cheque.

Procedure of clearing the cheques

Pay in Slip

The customer fills pay in slip, this slip is just like deposit slip. The cheque number,

date, amount, & account number must be written on this slip.

Stamping and Scrutinizing

The officer on receipt of cheque and pay in slip will stamp the pay in slip with

"Cheque Received" and give a portion of slip to customer and the remaining portion

is attached with the original cheque. The original cheque will marked with two

stamps:

i) MCB Bank Limited


ii) Clearing Stamp

Before 3.30 P.M all cheques are counted and then scrutinized in bank wise and

sent to clearing house.

Stamping the Instruments

The instrument of payment accompanied by a pay-in-slip (cheque receipt) is

received at the counter of the bank by the concerned officer who conducts strutting

of the instruments. If no discrepancies are noted then the officer should sign the

pay-in-slip & its counter foil.

The counter-foil & the pay-in-slip should then be stamped in the following manner.

i. The clearing stamp bearing the date of the next working day should be

affixed on the face of the cheques.

ii. Special crossing stamp containing "the name & branch name of bank"

should also be affixed on the face of the cheques.

iii. The third necessary stamp indicates the paying bank to "credit payee's

account". It is the confirmation of outward clearing.

iv. If "payee's account only" is mentioned on the cheque, the payee should sign

on the back of cheque for endorsement of cheque to another person.

Foems of clearing

Clearing is of two forms:

i) Local clearing

ii) Collection


Local Clearing

By local clearing we mean collection of cheques from the banks, which are

member of clearinghouse within the city. Banks take responsibility by endorsing

these cheques. Sort out these cheques bank wise; prepare the settlement sheet

bearing the name of the bank and number of cheques with total amounts.

There is a time for presenting the cheques in clearing house. If before that time

cheques are not sent to clearing house. Then they will be delayed for next day. On

the specific time gate of clearing house has been closed and nobody can enter

into it. So next day bank will presents cheques in clearing house. Cheques sent to

clearing department must be debited to SBP and credited to customer account,

and when bank receive back these cheques then debits customer and credits

SBP. A simple example for understanding the entries made, is that, when cheque

comes to clearing house from Citibank (e.g. any customer of Allied Bank Limited

has made payment to a person who is customer of Citibank) then SBP will credit

the Citi bank and debit the account of Allied Bank Limited’ because cheques are of

Prime Commercial Bank Limited.

Collection

In case if any bank or branch of bank is not the member of the clearing house then

bank present or receives cheques through collection. Its credit advices is made on

SF-179 with 300 transaction code.


Items to be checked on clearing cheques

When cheques are received from the clearing following items should be checked

immediately:

1. Cross stamp

2. Clearing stamp

3. Date (which should be current)

4. Endorsement stamp on backside

5. Amount in figures and words should be matched

NOTE

Bank, which is sending the cheque, makes its stamp on backside so that other bank

will pay him. This is called endorsement stamp when there is a stamp of SBP on front

side then there is no need of endorsement stamp.

Cheque returned

There may be a case when cheque is returned by the bank when it is received from

clearing. There maybe any one or more than one reasons. These reasons are written

on the slip, which is then attached with the returned cheque by marking (x) against

that reason for which cheque is returned.

This slip is called “cheque returned slip” and contains following items:

I. Cheque no.

II. Amount of cheque,

III. Name of a person who has drawn it and

IV. Date


This cheque return Memo (SF-16) contains the list of following reasons:

Refer to drawer

Not arranged for

Effects not cleared may be presented again

Funds insufficient

Crossed Cheque must be presented through a bank

Payee’s discharge on revenue stamp required

Post dated/ out of date

Payment stopped by the drawer(s)

Amount in words and figures differs

Multination required bank’s guarantee

Drawer’s signature differs from specific filled in this office

Not drawn on us

Alteration requires drawer’s signature in full

Funds drawn against not yet received, present again

Cheque incomplete

Bank’s crossing/ clearing stamp required

Advice not received, we shall, however, pay if the collecting bank guarantees

disbursement

Payee’s endorsement required

Payee’s endorsement irregular

Other………………………….

OUTWARD RETURNS PROCESS

CLEARING

Inward Outward rR Returns

Check Account Number of the Customer

Received from NIFT Agent

Returns Sheet Prepared

Re-lodged Cheques Cheques Return to Customer

Posting

Informed to Customer


CLEARING

Outward Inward

Send to Account Department

Scrutiny of Cheques and Stamps

Cheques Withdrawals

Cancellation

Posting

Returns Marked

Hand Over to NIFT Agent

Transfer Stamp Attach Return Memo

Return Voucher Prepared


INWARD CLEARING

AND

INWARD RETURNS PROCESS

Note: credit advices are made on SF-179 with transaction code 2242, and returned

cheuqes advices are made the debit advice on SF-180 with transaction code 2293.


Remittance Department

Remittance is the monitory transfer from one place to another place or from one

country to another country to fulfill the requirements of the customers by the order of

the customer.

MCB Bank carries out, on behalf of its customers the act of transfer of money, both

Domestic and Foreign, from one place to another. This activity in whole is known as

“Remittance”.

DOMESTIC/LOCAL REMITTANCE

The term “Local Remittance” means transfer of funds from one Bank/Branch to

another Bank/Branch, within the country.

For example MCB Ghalla Mandi Branch Gujranwala Branch accepts money from

customer ‘A’ and makes arrangement for the payment of the same amount of money

to either the customer ‘B’ or his “order”. In return for having rendered this service, the

Bank charges a pre-decided sum known as commission or service charge. This

commission or service charges differs depending upon the mode of transfer.

The remittance (incoming and outgoing but only in local i.e. Pak rupee and within

Pakistan.) is called local remittance.

MCB Ghalla Mandi Gujranwala offers following banking instruments to its Customers.


TYPES OF FUND TRANSFER

Demand draft

Pay order

Telegraphic/telephonic transfers

Mail transfer

Cross branch on-line transfer

Branch to branch transfer through advice

Travelers cheque

Fund transfer through registered ATMs

Fund transfer through virtual banking

International fund transfer products

Speed cash

Money gram

Remitt express

Home remittance

Swift

MCB FUND TRANSFER PRODUCTS

Domestic

International/Overseas

DOMESTIC FUND TRANSFER PRODUCTS

1) Demand

2) Pay order

3) Telegraphic / telephonic transfer

4) Mail transfer

Demand draft (D.D)


DEMAND DRAFT is a written order, drawn by one branch of a bank upon another

branch of the same bank, or upon other bank under special arrangements to pay

a certain sum of money to or to the order of a specified person

Demand Draft is neither payable to bearer nor drawn on branches situated within

the same city

Parties Involved

1. Purchaser

2. Issuing or drawing branch

3. Drawee branch

4. Payee / beneficiary

5. Online cross branch transactions(CBT )

Precaution for issuance of drafts

1. There should be a branch at the place where payment is desired to be made

2. Full name of the payee should be mentioned

3. Amounts in words & figures should not differ

Procedure of DD issuance

1. Filling the application (S.F 100 Revised) Annex “A”

2. Payment through cash or cheque

3. Entry in the DD issue register

4. Making the Demand Draft

5. Signing of the Demand Draft

6. Application of test

7. Preparation of advice & test application


Pay order (P.O)

A PAYORDER is a written authorization for payment, made in a receipt form issued &

payable by the bank, to the person named & addressed therein on his giving a proper

discharge thereon

Features

It is issued by and drawn upon and payable by the same branch of the bank

It is neither transferable nor negotiable & as such it is payable to the payee

named therein

It is in a receipt form & therefore, is payable only after obtaining a discharge of

the payee on adequate revenue stamps

PAY ORDER cannot be issued to a minor

PAY ORDER is meant for bank’s own payment but in practice these are also

issued to our customers for making payments

PAY ORDER is issued for payment within the same city.

Parties to a pay order

1. Purchaser

2. Issuing/Paying Branch

3. Payee

Online cross branch transactions (CBT)

This facility is only available for MCB branches only you can transfer funds from one

branch to another branch of MCB. There is no completion that you have an account with

the MCB bank but to whom the fund is transferred must have account with the bank.


First of all check the status of the branch where you want to sent the amount is it online

or offline, if it is online than the transaction is made and the amount is transferred to the

customer’s account

The slip has two sides one is right and other is left .The left side is given to the customer

for his record and the right side is taken by the bank.

Information Required

The information required for the slip is

Write date on both sides of the slip

Than the branch code where you want to send the amount

Type of account

Account number

For credit of means the name of the person to whom you send the amount.

Particulars of the depositor

Name of depositor

Account number (if available with the bank)

CNIC No

Address

Telephone number

Particulars (cheque / cash)

Purpose of remittance means for what purpose you send the amount

210 fixed charges


Analysis of mcb bank

Analysis of financial Statements

General Analysis Specialized Analysis

General Analysis

General analysis of bank contains solvency measure, return analysis, and market

analysis.

Solvency Analysis

The ability of business to pay its long term debts

There are two kinds of solvency

i. Periodic payment

ii. Original principle amount

i. Periodic payment

Periodic payment is the ability of a business to pay its fixed payment through its

normal operating income in one year.

ii. Original principle amount

Original principle amount is the ability of a business to pay its original principle

amount from its available resources

Concerned years

Current year : 2007

Base year : 2006

Items Involved

Total debts

Total assets


Total equity

Long term debts

Solvency Analysis

Ratio 2006 2007 Results Reasons for change

Debt Ratio 0.88

Times

0.86

Times

Favorable a) Total Assets by 20%

Debt to equity ratio 0.04

Times

0.01

Times

Favorable a)Long term debts by

70%

b)Equity by 27%

Equity Ratio 0.10

Times

0.11

Times

Favorable a) Total Assets by 20%

Graphical presentation of solvency analysis

0.094

0.096

0.098

0.1

0.102

0.104

0.106

0.108

0.11

0.112

0.1

0.11

Equity Ratio

2006 2007

Tim

es


0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

0.04

0.045

0.04

0.01

Debt to Equity Ratio

2006 2007

Tim

es

Critical Analysis of Solvency

The long term debt paying ability of company is favorable as it is shown by the ratios. All

indicators of company are showing that company is in the situation that it can easily pay

its debts.

The reason of these favorable results is increase in earning assets of MCB. The bank

has favorable impact about investments as company’s debt decreased by11% and

equity is increased by 27%. And there is a positive increase in sales of bank which

shows that bank is using its resources properly.

The solvency analysis of company provides an idea that the bank should focus on the

optimal utilization of available funds instead of taking further debts or equity to get better

results of solvency which are presently favorable. It also shows that bank has higher

long term debt paying ability as compared to previous year.

Profitability Analysis

“Overall effectiveness of management”

OR

“The ability of business to generate returns for the owner”

The continued viability of any bank depends on its ability to earn an appropriate return

on its assets and capital. Good earning performance enables a bank to fund its


operations, remain competitive in the market and increase or decrease in market funds.

In profitability measure for bank we calculate return analysis.

Return Analysis

This analysis indicates the availability of profit against investment, total revenue or

equity.

Items Involved

Total assets

Operating assets

Operating profit

Net profit before interest and tax

Net profit after interest and tax

Operating expenses

Equity

Current assets

Investment

Deferred cost

Concerned years

Current year : 2007

Base year : 2006

Return Analysis

Name of Ratio 2006 2007 Result Reason for Change

ROA 3.55% 3.7% Favorable a) Net income by

26%

b) Total Assets by

20%

ROI 9.24% 9.36% Favorable a) Net income before


interest and tax by

7%

ROE 34% 33.61% Unfavorable a) Net income by 26%

b) Equity by 27%

Graphical presentation of Return analysis

3.45%

3.50%

3.55%

3.60%

3.65%

3.70%

3.75%

3.55%

3.70%

Return on Assets

2006 2007

Perc

enta

ge

33%

34%

35%

34%33.61%

Return on Equity

2006 2007

Perc

enta

ge


9.15%

9.20%

9.25%

9.30%

9.35%

9.40%

9.24%

9.36%

Return on Investment

2006 2007

Critical Analysis

For measuring the profitability of a company one measure is Return Analysis, which

provides the idea about the generation of profit on resources, investment and equity.

The bank’s analysis indicates effective utilization of its resources and investment to

generate returns.

However ROE > ROI > I, it shows the ROI is more than the market fix return which is

favorable for company. The debt position of company indicates that the bank is using

high amount of debts in the current year as compared to previous year. MCB has also

increased its equity position.

To get the proper response from the investor the bank should increase its ROE. The

reason for unfavorable change in ROE is that the increase in net profit after interest and

tax is less than the increase in equity. Which means that bank is not earning much on

equity.

Marketability Analysis/ Prospective Investor Analysis

“Marketability Analysis shows the strengths of the share of business in the market”

Items Involved

Total equity

Number of shares outstanding


Earning available for common stock holders

Interest

Dividend per share

Earning Per share

Market price per share

Book value per share

Concerned Year

Current year:2007

Base year : 2006

Marketability Analysis

Name of

Ratio

2006 2007 Result Reason for Change

Price

Earning

Ratio

10.52

Times

16.46

Times

Favorable a) Increase in market

price by 63%

Book

Value

Ratio

65.27 72.28 Favorable a) Increase in total equity

by 27%

Market

to Book

Value

Ratio

3.12 5.53 Favorable a) Increase in market price

by 63%

Graphical presentation of Marketability analysis


0

2

4

6

8

10

12

14

16

18

10.52

16.46

Price Earning Ratio

2006 2007

Tim

es

60

62

64

66

68

70

72

74

65.27

72.28

Book Value Ratio

2006 2007


0

1

2

3

4

5

6

3.12

5.53

Market to Book Value Ratio

2006 2007

Critical Analysis

The marketability of company shows the strength and growth of companies share in the

market. The indicators calculated shows that the strength of company’s shares in

market is increasing in comparative years. It means the capital gain which is one part of

the return is favorable for the company and for the investor as well.

Return to Investor

Name of

Ratio

2006 2007 Result Reason for Change

Earning

Per Share

23 24.30 Favorable a) Increase in net

income By 26%

Dividend

Yield

0.03 0.03 Favorable a) Increase in dividend

per share

Dividend

Payout

Ratio

30.98 51.44 Favorable a) Increase in EPS by

4%

b) Increase in dividend

per share 72%

% of

earning

Retained

69.02 48.56 Favorable a) Increase in EPS by

4%

b) Increase in dividend


per share 72%

Graphical presentation of Return to Investor analysis

22

22.5

23

23.5

24

24.5

23

24.3

Earning Per share

2006 2007

0

0.005

0.01

0.015

0.02

0.025

0.03

0.035

0.03 0.03

Dividend Yeild

2006 2007


0

10

20

30

40

50

60

30.98

51.44

Dividend Payout Ratio

2006 2007

0

10

20

30

40

50

60

70

80

69.02

48.56

Percentage of Earning Retained

2006 2007

Critical Analysis

The investors also consider the return from the company while investing in the

company. The indicators calculate shows that all the indicators are favorable. It means

the return available for investor has increased in comparative years. It also shows that

paying ability of business has also risen up, it means that the short term goals of

investors has achieved in the concerned year.


Specialized Analysis

Specialized analysis is done to check the profitability and the efficiency of Bank. In this

analysis we calculate the following ratios:

Earning assets to total assets

Return on earning assets

Net margin to earning assets

Loan loss coverage ratio

Deposit time capital

Loan to deposit

Earning assets to total assets

For 2006 For 2007 Change Reason for change

84.59% 82% Unfavorable a) Earning Assets

16%

b) Total Assets 20

%

80.50%

81.00%

81.50%

82.00%

82.50%

83.00%

83.50%

84.00%

84.50%

85.00%

84.59%

82%

Earning Assets to Total Assets

2006 2007


Comments

This ratio indicates the activity of ban, i.e. how well management put its assets to

earn direct earning. The comparative analysis of ratio of MCB shows that it is

unfavorable for the bank. The reason of the change is more increase in total

assets which shows that bank is not properly utilizing its earning assets. This

change is because of increase in operating fixed assets and other assets while

the bank needs to increase its earning assets in order to earn more out of its

assets.



6.39% 6.32% No change a) Earning Assets by

16%

b) Net profit before tax

by 15%

6.28%

6.30%

6.32%

6.34%

6.36%

6.38%

6.40%

6.39%

6.32%


2006 2007

Comments


The analysis of MCB bank’s return on earning assets shows almost no change.

After the analysis it is observed that bank has performed well just like 2006.

The net profit before tax of bank has also been increased by 15%, which is

because of increase in interest income. Earning assets is increased by 16%.

In this year, the bank has also increased investments and advances which

ultimately increased the banks profitability.

Net margin to earning assets


7.34% 7.10% Unfavorable a) Earning Assets by

16%

b) Net margin

increased by 13%

6.95%7.00%7.05%7.10%7.15%7.20%7.25%7.30%7.35%7.40%

7.34%

7.10%

Net margine to earning assets

2006 2007

Comments

This ratio shows another profitability measure of MCB bank. The calculation of

ratio shows unfavorable results because increase in net margin is less as


compared to increases in earning assets. This ratio also provides the strength of

bank to manage the spread of interest income over interest expense.

The reason of unfavorable change is that bank has increased its interest income

by 18%, while the change in interest expense is by 42%. The increases in

interest expense is the hurdle sue to which bank is not in the position to increase

its profitability.



6.3 Times 5.2 Times Favorable a) Capital 35%

b) Deposits 36%

01234567

6.35.2


2006 2007

Comments

This is a debt to equity ratio of bank. It is a two folded ratio because both high

debt and high equity has their own features.

The increase in equity means better solvency of bank. It shows that the bank can

save money as bank is not required to pay interest on equity as they have to pay

on deposits. This ratio also shows the good credit rating of bank. This increase in


deposits and capital shows the more availability of cash to give loan to the

customers and Bank can increase its return.

Loan to deposit


0.85 Times 0.75 Times Unfavorable a) Loans 0.31%

b) Deposits 36%

0.70.720.740.760.78

0.80.820.840.86

0.850000000000001

0.750000000000001

Loan to Deposit

2006 2007

Comments

It is asset over liability ratio. It shows the assets available to against each liability. This

ratio shows the decrease in assets available against each liability. This shows the

increase in deposits of bank while bank is not properly utilizing its deposits to give loans

due to which they may not earn the desired level of revenue.



SWOT ANALYSIS

SWOT analysis is a simple framework for generating strategic alternatives from a

situation analysis. It is applicable to either the corporate level or the business unit level

Strengths

Excellence in services is key to success of MCB.

1000+ branches nationwide.

MCB ATM network is the largest in Pakistan.

MCB Pak Rupee Travelers Cheque is the Market leader.

MCB consumer banking provides customers with innovative saving products and

services.

In 2003 MCB declared as the best bank of Pakistan.

In 2005 MCB achieves Best Domestic Commercial Bank Award.

MCB is having the advantage of highly committed employees.

No charges from MCB to MCB transaction from debit card.

Rs.15 per transaction for using ATM of other banks

More than 27,000 individual virtual banking users.

More than 130 corporate virtual banking users.

More than 60,000 mobile banking users.


More than 7,000 registered call center customers.

Weakness

Small and congested space creates problems for customer to get their services.

Capital has been decreased as compared to previous year.

There are no special arrangements for rewards & special incentives based on the

performance of employees.

Due to lack of staff customers have to wait for getting their services.

Record keeping system is not up to the mark due to which problem of time

management occurs.

Late sitting (at Gujranwala branch) is the major issue in the work life of the

employees due to which they are unable to maintain a healthy balance between

their work life and family/social life.

Opportunities

Government incentives and policies conducive for private investment in

Commercial banking.

Opportunity for the exiting products and services with new features, design and

facilities.

Opportunity for worldwide banking commercial and corporate banking services.

General public awareness (especially in rural areas) about importance of

commercial banking.

Up gradation of small branches

Extensive training and development program


Threats

Entrants of new local and international banks can reduce their sales

Bargaining power of customer

Threat of substitute

Increase in kibor rates

Low charges that are provided by other banks to the customers is also a threat

for MCB.

Problems

During my internship in MCB I found following problems:

1 No segregation of departments

2 Limited capacity of building

3 Lack of training facilities for employees

4 Sitting problem for employees

5 Lack of staff for members

6 No half day

7 No good dealing with customers

8 Lack of marketing expertise

9 No time management

10 Machinery not up to date

11 No proper placement of documents

12 Congested environment

13 Lack of motivation of employees

14 Switchover rate is very high

Recommendations and Solutions


MCB is leading bank in Pakistan and it has the advantage of largest branch network.

They need to encounter certain changes in their branch so that they can attract more

customers.

First of all, they need to expand the building for their operations. Due to small

building customers have to face many problems.

MCB is already doing their best to attract more customers but they should

introduce high profit schemes with low maturity period so that customers submit

more deposits in MCB.

It is a competitive era and MCB is facing high competition. They should develop

research department region wide so that they can easily analyze their

competitor’s strategies and then develop new products accordingly or they can

bring improvements in their existing products.

Every employee of the bank should know their responsibilities and duties and

should perform properly.

Recruitments should be strictly on basis of merit and they should train every

employee according to the job he or she is going to perform.

Refresher courses must be conducted in order to train the employees.

Customer services department needs more attention at the bank because it is

overloaded. Management should work on this problem and try to hire more

people for customer service dept.

Bank needs to use more marketing channels to make the public aware of its

products and services. In the presence of intense competition Bank has to realize

the importance of marketing.


CONCLUSION

From the all above discussion, I come to know that MCB is a financially

strong bank. It is a stable bank hence depositors are attracted toward it.

Services of this bank are ethically proven and reliable in nature.

Decision-making is well structured in this bank. The bank is increasing

its operations and scope of business. Sales of bank are increased to a

great extent. Profits are not such increased but assets of bank are

increasing every moment.

Bank is paying a very good dividend per share. In view of SWOT

analysis, bank has good strength and less weakness. There are equal

opportunities and threats to bank. It is on bank to use the opportunity

and reduce the threat.


REFERENCES:

MCB Operations Manual

MCB Credit Manual

www.mcb.com.pk

Stephen P.Robbins,“Management”, San Diego State: San Diegopage no: 220-245.

http://www.mcb.com.pk/


….and in the end I’d like to thanks once again to all the staff of MCB who helped me

even more than these web sites and manuals in my learning and compiling my report.


Accounting:

Accounting is the art of recording, classifying, and summarizing in terms of money, transactions

and events and interpreting the results thereof.

Administration:


The management and disposal, under legal authority, of the estate of an intestate, or of a testator

having no competent executor.

Audit:

It is a practice by which some subject of interest is examined by independent and professionally

qualified person and report is presented to the owners.

Attitude:

Evaluative statements, either favorable or unfavorable, concerning objects, people or events. A

way of thinking or behaving.

Absenteeism:

The failure to report to work and job satisfaction.

Activities:

The time or resources needed to progress from one event to another.

Authority:

The right inherent in a managerial position to tell people what to do and to expect them to do it.

Billing:

The relative importance of a performer or act as reflected in the advertisements.

Bibliography:

References, literature cited.

Communication:

The transfer and understanding of meaning.


Customer:

Anyone who buys the stuff we produce.

Competitors:

Two or more parties selling same goods in the same market.

Control:

The process of monitoring activities to ensure that they are being accomplished as planned and

of correcting any significant deviations.

Comprehensive:

Understandable, including all or many kinds of people or things.

Career:

A sequence of positions held by a person during his or her life time.

Centralization:

Chief, middle point of the part.

Defective:

Having a defects, imperfect, mentally defective, not quite same.

Department:

One of the several divisions of any business, distinct division of a business.

Development:

New stage which is the result of development.

Data:

Raw, unanalyzed facts.

Decision:

A choice of two or more alternatives.


Exploiting:

Use or develop resources, use a person or things selfishly.

Envisage:

To view, to ponder over.

Evolution:

Evolving, gradual change in to something different.

Flexibility:

Quality of being flexible.

Feed back:

Opinion.

Grant:

Something granted specially a sum of money, allow someone what he has asked for.

Hire:

To appoint someone (employee) on a work (job).


Independent:

Free not dependent upon someone.

Job analysis:

An assessment that defines job and the behavior necessary to perform them.

Job rotation:

Job design technique in which employees are moved between two or mere jobs in a planned

manner.

Liability:

All those debts, which are payable by a business to its proprietor and outsiders.

Leading:

The process of influencing others to engage in the work behaviors necessary to reach

organizational goals.

Manager:

Someone who works with and through other people by coordinating their work activities in order

to accomplish organizational goals.

Mission:

Aim, parties send abroad for special purpose.

Motto:

Phrase or a short sentence for publicity.

Management:


Coordinating and overseeing the work activities of others so that their activities are completed

effectively and efficiently.

Need:

An internal state that makes certain outcomes appear attractive.

Obsolescence:

Out dated words, methods etc.

Opportunities:

Positive trend in external environment factors.

Organization:

A deliberate arrangement of people to accomplish some specific purpose.

Outcome:

The desired results of input.

Performance:

The end result of an activity.

Policy:

A guideline for making decision.

Purchase:

Obtain something in return for money.

Planning:

Scheme, program.

Price:

Physical or mental cost at which something is obtained.


Quality:

The ability of a product or services to reliably do what its supposed to do and to satisfy customer

expectations.

Quotation:

A statement of price, something quoted, quoting.

Research:

Careful inquiry for discovering new factors.

Recommendation:

Advice, statement of favorable suggestions.

Supervisor:

Caretaker, one who keeps a check on employees.

Strength:

Power, vagour, energy.

Supplies:

Provide something needed by someone.

Subordinates:

Inferior in rank, person who works under another.


Tool:

Any hard implement used by workmen.

Tax:

Fee or charges or any sum or amount payable under income tax ordinance, 2001.

Threat:

Sign of coming trouble.

Training:

To enhance the skills of people.

Vision:

Something seen in imagination, imaginative insight.

Weight:

Heaviness of something.

Weakness:

Activities that an organization does not do well or resources it needs but does not process.


MCB

Documents

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