Chapter # 1 Introduction

1.1 Introduction

Chapter one is about introduction of report. As a part of requirement of MBA degree six week

internship is necessary for student. This chapter includes background, purpose, scope,

objectives and methodology of the study. It also include introduction of organization.

1.2 Background of the study

Internship training program during Master in Business administration Program is necessary

for the partial fulfillment of the completion of Degree of Master in Business Administration as

per HEC ( Hire education commission ) requirement. It is necessary for me to complete an

internship session of about 6 weeks in some manufacturing or service industry relevant to my

area of interest and specialization. So, I choose the Banking field because I have the

interest in this sector because my study background is related with this sector.

1.3 Purpose

Internship is the capstone experience that provides me with hands-on, real-world

experience in a work setting. Ideally, internship will enable internees to:

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 Use my knowledge and skills get from the classroom,

 Discover where further competence is needed,

 Convert the bookish knowledge into practical life, and

 become better acquainted with the types of work settings in which such Competence

can be applied.

1.4 Scope

This study will facilitate to me regarding the working of Banking sector of Pakistan because

most of the teachers during their lectures use the examples of Banks like MCB, National

Bank, UBL, Bank Alfalfa and many others, Students should study about the functioning of

such Banks. It will help full for me in future.

1.5 Limitation of the Study:

T he study is done with the sole purpose of doing the best work but there were certain

limitation faced during the internship period. The most important limitation from which

the study suffers is the non-availability of information in a manner required for analysis

and the secrecy of the bank. Another important limitation of the study is time and space

constraint.

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In the MCB Timber Market Branch fraud was held by chief cashier and operation manager so an

Audit Team was there and management was busy in providing information to auditor and sat s

claims of customers.

1.6 Objectives:

I worked as an internee in MCB Timber Market branch, Lahore. The main objectives to study in

MCB were:

 To get some experience in working with well reputed organization.

 To gain knowledge about the professional environment of the bank.

 To know about the technology utilized in the banks.

 To deal and manage with the situation of stress.

1.7 Methodology:

There are mainly two methods that are used for the collection of data.

 Primary Data

 Secondary Data

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(A) Primary Data:

 Observation of functions of Branch operations on the spot.

 Observation of different processes of Branch on the spot.

(B) Secondary Data:

 Internet is very helpful for me to study more about banking sector of

Pakistan.

 Different type of booklets of the Bank.

 Annual reports

 Journals

 Newspapers

1.8 Summary

This is the first chapter of the report containing the detail introduction of the report.

Internship training program during Master in Business administration Program is necessary

for the partial fulfillment of the completion of Degree of Master in Business

Administration. Internship will enable internees to integrate and use knowledge and skills

from the classroom. This study will facilitate me regarding the working of banking sector of

Pakistan. For achieving my purposes, objectives and for the preparation of the internship

report I required some kind of data, I used both methods of data collection that are

primary sources and secondary sources for that purpose.

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 Chapter # 2 History and About MCB

2.1 HISTORICAL BACKGROUN

MCB Bank Limited formerly known as Muslim Commercial Bank Limited MCB Bank is not

an overnight success story. It was incorporated by the Adamjee Group on July 9, 1947, under the

Indian Companies Act, VII of 1913 as a limited company. The bank was established with a view

to provide banking facilities to the business community of the South Asia

After the partition of the Indo-Pak subcontinent, the bank moved to Dhaka (then the capital of

former East Pakistan) from where it commenced business in August 1948. In 1956, the bank

transferred its registered office to Karachi, Where the head office is presently located. Thus, the

bank inherits a 59 years legacy of trust of its customers and the citizens of Pakistan.

2.1.1 NATIONALIZATION:

In January 1974, the Government of Pakistan nationalized MCB following the Banks

(Nationalization) Act 1974. MCB was the only bank which was nationalized solely as neither it

nor any other bank being merged with it due to its consistent and firm policies and its sound

position.

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2.1.2 PRIVATIZATION:

A wave of economic reforms swept Pakistan in the lattes introducing the Need for privatization

of state owned banks and companies. This was the first bank to be privatized in 1991 and the

bank was purchased by a consortium of Pakistani corporate groups led by Nishat Group. Nishat

Group is one of the leading and most diversified business groups in Pakistan. The group has

strong presence in the most important business sectors of the country such as banking, textile,

cement and insurance.

Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played

instrumental role in its success. In recognition of Mr. Mansha’s contribution, the Government of

Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most prestigious civil awards of the

country.

2.2 About MCB:

Over the years MCB has developed strong relationships with its customers by understanding

their needs and treating them with respect, dignity and importance. The driving force behind its

commitment and services is its focus on customers ensuring that it not only meets, but also

exceeds their expectation.

They strive to achieve excellence by ensuring that every moment of their time is spent in adding

value, making sure that they do things right, first time, and every time. With the quest of quality

6
MCB has always taken initiatives bringing banking into a new arena; from cash to the

convenience of plastic; from branch banking to internet banking and from face to face customer

interaction to online accessibility.

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. MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a

solid foundation of over 63 years in Pakistan, the Bank provides 24 hour banking convenience

with a network of over 1000 branches, the largest ATM network in Pakistan over 450 ATM

locations in the market.

2.3 Organization Profile

Name of Organization: MCB Limited.

Chairman: Main Mohammad Mansha

Location: Timber Market Ravi Road Lahore.

Branch code: 0187

Phone: +92-042-7727456 / 7720054

UAN: 111-000-622 (MCB)

Website: www.mcb.com.pk

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2.3.1 Pattern of Share Holdings

Description Shareholding Percentage

Directors, CEO and children 52,190,877 7.5518

Associated Companies 57,009,034 8.2490

NIT & ICP 5,835 0.0008

Banks, DFI & NBFI 2,239,307 0.3240

Insurance Companies 46,052,057 6.6635

Modarabas & Mutual Funds 7,208,703 1.0431

Public Sector Cos. & Corp. 131,749,731 19.0636

General Public (Local) 101,843,819 14.7364

General Public (Foreign) 2,400,126 0.3473

Others 44,237,663 6.4010

Foreign Companies 246,167,375 35.6194

Company Total 691,104,527 100.00

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ORGANIZATION STRUCTURE

As MCB is a banking company listed in stock exchange therefore it follows all the legalities,

which are imposed by concerned statutes. MR. Mian Mohammed Mansha is chairman & chief

executive of the company with a team of 10 directors and 1 vice chairman to help in the

business control and strategy making for the company.

A team of 10 professionals is handling operational management of the bank. MR. Mian

Mohammed Mansha also heads this team.

The different operational departments are:

 Consumer Banking & IT Division

 Financial & Inter Branch Division

 Banking Operations Divisions

 HRD & Legal Division

 Financial Control & Audit Division

 Credit Management Division

 Commercial Banking Division

 Corporate Banking Division

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2.3.2 Board of Directors

Mian Mohammad Mansha Chairman

Mr. S. M. Muneer Vice Chairman

Mr. Tariq Rafi Member

Mr. Shahzad Saleem Member

Mr. Sarmad Amin Member

Dr. Muhammad Yaqub Member

Mian Raza Mansha Member

Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Abdul Farid Bin Alias Member

Mian Umer Mansha Member

Mr. Muhammad Ali Zeb Member

Mr. Atif Bajwa President / CEO

2.4 VISION & MISSION

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Vision Statement

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

prosperous and secure future.

Mission Statement

We are a team of committed professionals, providing innovative and efficient financial solutions

to create and nurture long-term relationships with our customers. In doing so, we ensure that our

shareholders can invest with confidence in us.

 Providing innovative

 Efficient financial solutions

 Long-term relationships with our customers

 Shareholders invest with confidence

2.4.1 VALUES OF MCB

INTEGRITY

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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

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

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

ideas and initiatives.

MCB TODAY

MCB is one of the leading banks of Pakistan with a deposit base of Rs. 368 Billion

and total assets over Rs.500 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.  

The Bank has a customer base of approximately 4 million, a nationwide

distribution network of over 1,000 branches and over 450 ATMs in the market.

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.

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2.4.2 Awards and Achievement:

Euromoney Awards

Best Bank in Asia Award 2008

MCB has been awarded as a Euromoney Award 2008 for the “Best Bank in Asia".

Best Bank in Pakistan Award 2006  

MCB has yet again received the esteemed Euromoney Award for the “Best Bank in Pakistan”.

It is the only bank to receive the Euromoney Award for Excellence for the sixth time in the past

seven years.

 Best Bank in Pakistan Award 2005

 Best Bank in Pakistan Award 2004

 Best Bank in Pakistan Award 2003

 Best Bank in Pakistan Award 2001

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Best Domestic Bank Award 2000

MCB was awarded as a Euromoney Award 2000 for the “Best Domestic Bank in Pakistan".

Asia Money Awards

The Best Domestic Commercial Bank Award 2005

MCB Continues to shine as once again Asia Money declares MCB as "The Best Domestic

Commercial Bank in Pakistan" for the year 2005.

The Best Domestic Commercial Bank Award 2004  

MCB has a distinction of winning the Asia Money 2004 award for being "The Best Domestic

Commercial Bank in Pakistan".

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2.5 Branches network

(Domestic operation) (Overseas operation)

(Branches)

1057

Commercial = 986 Sri Lanka = 5

Consumers = 44 Bahrain = 1

WBG = 11 EPZ =1

Islamic = 11 UAE =1

Sub branches

05

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MCB
Timber market Branch (0187)
Detail of staff as on 30.6.2010
   
   
           
Serial
No. Employee No. Employee Name Department Permanent/Outsource
           
   
1 17640 SHAIKH IRFAN BM PERMANENT
2 28005 SHOAIB BOM PERMANENT
3 26265 IQBAL SAEED GBO PERMANENT
4 27364 ALI IRFAN FOREX PERMANENT
5 29640 TAHIRA ASHRAF GBO PERMANENT
6 29177 MUHAMMAD ALI ADVANCES PERMANENT
7 32619 MALIK MAJID PBA PERMANENT
8 15558 MAHMOOD AHMAD ASSISTANT PERMANENT
9 20418 NAZIR AHMAD ASSISTANT PERMANENT
10 21230 MALIK AZAM CHIEF CASHIER PERMANENT
11 32576 NATTEY AMIN ICO PERMANENT
12 32538 M ALI YAWAR INSURANCE PERMANENT
13 25335 M IQBAL GUARD PERMANENT
14 HAMIDA SHOUKAT CSO OUTSOURCE
15 28394 SADAF ALI CSO OUTSOURCE

16 4645 MUHAMMAD WASEEM CASH OFFICER OUTSOURCE

17 3982 SHAIKH AFZAL CASH OFFICER OUTSOURCE
18 481 ABDUL LATIF GUARD OUTSOURCE
19 150 MUHAMMAD ARSHAD GUARD OUTSOURCE

20 1226 MUHAMMAD AZEEM TEA BOY   OUTSOURCE

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 2.5.1 Organization Structure (MCB 0187)

Manager Operation Manger

(AVP) (OG | )

Remittance Current saving

Advances PBA (Assistant) dep. (OG |||)
(OG |||) (OG |||)

Cash
(Contract)
Forex CSO
(OG |||) (Contract)

Internal control officer

(OG |)

Regional Regional Operational

Manager Manager

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 Chapter # 3 Internship activity

Mr. Shoaib (Operation manager)

This section is based on my observation and experience and rotation during my internship at the

Timber Market Branch of MCB Limited. Some of the jobs that I performed or assisted in

performing or overlooked in the various departments were

3.1 Accounts

Malik Majid (Personal Banking Advisor)

Following are the types of account in MCB

3.1.1 CURRENT ACCOUNT

 No restriction on Withdrawals and frequency of transactions

 No profit is paid on Current Accounts

 Service Charges are recovered as specified in the Schedule of Charges

 No Zakat is to be deducted on Current Accounts.

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  Free of cost account statements are dispatched on half yearly basis within one week

after the mid-year closing. If any customer wishes to receive the account statement other

than the half yearly cycle, charges will be recovered as per the Schedule of Bank

Charges RS.50

 Account opening with Rs.1000

 Minimum maintain balance Rs.10000 if less then minimum limit Rs.50 will deduct

Eligibility

 Individuals (Single/Joint)

 Firms (Sole Proprietor Partnership)

 Companies (Public and Private Limited), Trust/ Clubs/ Societies and Associations are

eligible to open Current Accounts.

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3.1.2 BASIC BANKING ACCOUNT

To provide banking facilities to low income people without the restriction to maintain minimum

balance requirement

Features

 The account is opened with a minimum initial deposit of Rs.1000.

 BBA is a Rupee Current Account (non-remunerative account).

 There is no minimum balance requirement, and hence no monthly account maintenance

charges apply.

 In case where balance in BBA remains “ZERO” for a continuous 06 month period, the

account will be closed automatically.

 Each month the account holder is allowed 02 deposits transactions (either cash or

clearing) and 02 withdrawals (cash or clearing). All customer initiated transactions over

and above this limit will be charged Rs. 25 per transaction

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  All ATM transactions conducted through electronic channels (i.e. ATM, Debit Card POS

machine, Virtual Banking) are exempted of transaction fee. Hence the customer is

allowed unlimited transactions through these channels.

 ATM cards are issued to all BBA account holders in on-line branches. Card issuance and

annual fee will be recovered as per Schedule of Bank Charges.

 ATM transaction charges on balance enquiry / mini statement and on usage of non-MCB

ATM’s will apply as per Schedule of Bank Charges.

 Statement of account to be mailed as per existing policy of the Bank. Charges for

duplicate statement will apply as per Schedule of Bank Charges.

Eligibility

 Low income individuals are eligible for opening BBA with single or joint account

type.

 Existing individual account holders can also convert their regular Savings or current

account into Basic Banking Account.

 This facility is not offered to non-individuals

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3.1.3 Smart Dollar Account

 The minimum amount to be placed under this product is USD 100, 00.

 Complimentary Pak Rupee account without minimum balance requirement.

 Free Lockers Facility

 Free of Charge Bank Statement & Smart Cards

 Discount (Up to 50%) on processing charges of Personal Loans & Car Financing.

 Preferential rates on consumer loans.

 Waiver on collection charges for crediting the amount in Foreign Currency.

 No Charges on Standing Instructions.

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  In case of any change in the above features, prescribed procedure by RBG will be

applicable.

Eligibility

Individuals (Single & Joint), Firms, Companies.

3.1.4 Foreign currency Account

Enjoy the confidence of operating an international account, locally.

MCB Foreign Currency Account offers you the option of earning attractive returns on your

Foreign Currency Investment.

KEY POINTS

 Open your account in US Dollar, UK Pound Sterling, or Euro.

 Open for as little as US$ 500 or equivalent.

 Unlimited transactions at your branch.

 Free Foreign Currency cash deposit and withdrawal facility.

 Rate of Return directly linked with international market

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  Profit paid into your account every six months.

 Foreign Remittances facility available.

 Countrywide network of Foreign Currency Branches.

 Cash withdrawal in PKR equivalent

 Network of over a thousand branches, and hundreds of online branches, at convenient

locations.

 General Inquiry e.g. ATM Locations, Product Information etc.

 Financial Services e.g. Account Balance Inquiry, Debit Card, Transaction detail, bill

payments etc

 Non-financial Services e.g. Internet Banking activation etc.

 Bank Account Statement and Cheque Book Request.

Eligibility

Only Individuals (Single and Joint) are eligible to open PLS Savings Accounts.

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3.1.5 SMART SAVINGS ACCOUNT

 Offers the opportunity to small and medium sized depositors (individuals only) to earn

attractive returns on their deposits. Cash withdrawals takes place only through

ATM/POS.

 Individuals can open an account with a minimum initial deposit of Rs. 1,000.

 Profit is calculated on a monthly basis and credited to the account after each calendar

quarter

 All ATM transactions conducted through electronic channels (i.e. ATM, Debit Card POS

machine, Virtual Banking) are exempted of transaction fees. The customer is allowed

unlimited transactions up to available balance in the account through these channels.

 The profit is calculated only on minimum deposit balance between Rs. 10,000/- and Rs.

300,000/- during a month, irrespective of the balance available in the account (as per

prescribed slabs). This range can be changed by the Bank any time without giving prior

notice to the customer (as and when required).

 Profit is calculated monthly, based on the minimum balance of the account during the

month. In case minimum balance exceeds the ceiling of Rs. 300,000/- in a month, profit

would only be paid on Rs. 300,000/-

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 MCB Smart Savings account can be merged with the regular PLS Savings account any

time by giving 3 months notice to the customers at the discretion of the Bank.

 The profit rates are estimated/provisional and subject to change any time at the discretion

of the Bank.

 Service charges would be applicable as per Bank policy if the balance goes down below

the prescribed minimum balance.

 Cheque book would not be issued to the account holder. ATM Card would be issued to

the customer for cash withdrawals.

 A customer can open only one MCB Smart Savings Account in the Bank, in case a

customer is found to have more than one Smart Savings Account, the Bank reserves the

right not to give the profit or recover profit if already paid to the customer on their

account/s.

 Zakat is deducted as per the policy. Withholding Tax is also deducted from profit (where

applicable) as per Income Tax Laws.

27
Rates

Up to RS.199, 999 5%

Rs.200, 000 – 299,999 7%

More than Rs.300, 000 5%

Profit Calculation:

Profit will be calculated on a monthly basis, based on the minimum balance maintained by the

customer during that month.

Eligibility

 Only Individuals (Single or Joint) are eligible to open PLS Smart Savings Account.

 Non-Individuals like Proprietors Company, Partnership, Trading, Collection accounts

etc are not eligible.

3.1.6 KHUSHALI BACHAT ACCOUNT

Provides additional facilities for payment of Utility Bills and Loan Installment of HBFC through

debit of Account (free of charge) with added feature of profit calculation at average daily

balance. (At designated branches only

 Minimum balance requirement as specified in the Schedule of Bank Charges.Rs.20,000

 Profit provisioning/ accruals are made on Daily Closing Balance of the day.

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  Profit is disbursed /paid on half yearly basis as per the rates notified by the bank.

 Free of cost Account Statement is dispatched on half yearly basis.

 Zakat is deducted as per the Government’s and Zakat Ushr Directives. Zakat is not

deducted on the accounts of Non- Muslims and where Affidavit is provided.

 Withholding Tax is deducted on Profit as per the Government’s policy.

Standing Instructions:

For all Standing Instructions regarding payment of Utility Bills /HBFC Installments, customer

fills out the Standing Instructions Form (SF- 256A) at the time of opening the account or

subsequently whenever desired to avail such facilities.

Conversion of Existing Account to Khushali Bachat Account:

Existing PLS Savings Accounts can be converted into Khushali Bachat Account on the request

of the customer. Branch obtains written request duly signed by the customer. Branch verifies the

customer’s signature from the record/system and attaches the application with the original

Account Opening Form.

Eligibility

Only Individuals (Single or Joint) are eligible

29
3.1.7 PLS SAVINGS 365

PLS Savings 365 also falls under the category of Savings Deposit Scheme.

 It is a checking account and there is no restriction on number of withdrawals and deposits

transactions.

 Account is opened with minimum deposit of Rs.300,000/-

 Profit is calculated on daily product basis on the balance of Rs.300,000/- and above.

However, if balances in the account fall below Rs.300,000/- on any day, the product will

be considered as well and the profit will be paid as per the rates notified by the Bank on

half yearly basis.

 All other terms and conditions including rates of profit, Zakat and Withholding tax

applicable to PLS Savings Bank Accounts are applicable.

Eligibility

All types of customers are allowed to open PLS- 365 accounts except Development Financial

Institution.

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3.1.8 PLS SAVINGS 365-Gold

Offered to Corporate Groups, Multinational Companies, Government and Autonomous bodies.

 Calculation of Profit is made on daily product basis at variable rates according to Deposit

Slab Range at declared rates on Half Yearly basis.

 There is no limitation on number of withdrawals and amount of withdrawals.

 The account requires a minimum deposit of Rs. 500,000 or more in order to get attractive

profits. In case, account holder is not maintaining a minimum deposit of Rs. 500,000 in

the account, the profit is paid at the prevailing Savings Rate.

 Service charges would be applicable as per Bank Policy if the balance goes below the

prescribed minimum monthly average balance.

 All other terms and conditions including rates of profit, Zakat and Withholding Tax

applicable to PLS Savings Bank Accounts are applicable.

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Rates

Less than 10 Million 5%

Rs.10 Million to less than 25 Million 6%

Rs.25 Million to less than 50 Million 6.5%

Rs.50 Million to less than 100 Million 7%

Rs.100 Million to less than 250 Million 7.5%

Rs.250 Million to less than Rs.500 Million 8%

Rs.500 Million and above 8.25%

Eligibility

Individuals and institutions can open the account.

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3.1.9 SAVINGS XTRA

Grow with MCB Xtra by saving more and earning greater profit.

MCB Savings Xtra Account offers you a wide range of attractive profit rates.

KEY POINTS

 Initial balance for account opening required Rs.1000

 Minimum balance maintain limit Rs.100000

 The higher your balance, the higher your profit.

 Now avail attractive rates up to 8.5%.*

 Profit calculated on monthly basis.

 Profit paid into your account semi-annually.

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  No joining fee on Debit/ ATM Card.

 50% discount on lockers.

 Cash deposit and withdrawal facility at hundreds of branches nationwide.

 Unlimited number of ATM withdrawal transactions.

 3 free withdrawal transactions through the branch every month.

3.1.10 BUSINESS ACCOUNT

MCB Business Account lets you build your business through the accrued savings from

discounted transaction fees, and more.

KEY POINTS

 Higher the balance the higher the number of free transactions.

 Open a Business Account with Rs.50, 000 only.

 Unlimited free cash deposit and withdrawal facility at hundreds of branches nationwide.

34
FREE SERVICES

When you maintain average monthly balance of Rs.100, 000 or above

 Demand Drafts/Pay Orders.

 Cancellation for Demand Drafts/Pay Orders.

 Cheque Book.

 International ATM Gold Card.

TERM DEPOSIT

3.2.1 SPECIAL RUPEE TERM DEPOSIT (STD):

The Special Rupee Term Deposit is governed under the PLS rules, but offers the depositor a

stable rate of return for a fixed maturity. It is a mandatory requirement for booking a Term

Deposit to have a checking account (Current/Savings) in the Bank.

Product is available in the following tenors:

3 months, 6 months, 1 year, 3 years & 5 years

The minimum amount to be placed under this scheme is Rs.1000, 000/- (amounts can be booked

in multiples of Rs.1000).

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Each tenor is divided into 3 categories based on the deposit amount.

 Rs.1,000,000 to less than Rs.10,000,000

 Rs.10,000,000 to less than Rs.25,000,000

 Rs.25,000,000 and above

Zakat

Zakat is deducted as per the rules of Zakat & Ushr Committee (as advised and amended from

time to time)

Withholding Tax

Withholding Tax, where applicable shall be deducted from the profit amount, as per Income Tax

Laws in force at the time of profit payment.

This deposit can be used as a security / collateral and the depositor can avail up to 75% of the

principal amount upfront. The depositor also has the option of increasing the financing limit up

to 90% of the principal amount, upon obtaining the necessary approvals from the relevant

authority. The tenor of the financing facility should be within the maturity date of the deposit.

In case of premature encashment, the depositor will bear the tax expense

Profit payment frequency:

Profit on the special TD is paid on the date of maturity of deposit for 3 and 6 months tenor.

Deposits booked for 1, 3 and 5 years tenor is paid profit on a quarterly basis. Hence the depositor

gets the opportunity of investing for a long term without compromising on cash flows.

36
Payment of profit:

 Profit amount will be credited into the depositor’s linked/ specified current or Savings

account.

 Cash payment of profit amount will not be allowed.

 Branch is required to maintain maturity date and profit payment dates for each account so

that there is no delay in payment of profit to the depositor.

Eligibility

(Existing Account Holders) Individuals, Firms and Companies

3.2.2 SPECIAL NOTICE DEPOSIT (SND)

SND is issued for 07 and 30 days.

07 days Notice Deposit:

Issued for 07 days only and if encashed before 07 days is not eligible for profit/interest.

30 days Notice Deposit:

Issued for 30 days and encashed after seven days is eligible for Profit/Interest payable for 07

Days Notice Deposits.

Zakat

Zakat will be deducted as per Zakat rules as advised and amended from time to time. (Applicable

only on PAK Rupees)

Withholding Tax

Withholding Tax, where applicable will be deducted from the Profit/interest amount, as per

Income Tax Laws in force at the time of profit/interest payment.

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These deposits are also received in multiple of Rs. 1000/-

If a depositor withdraws deposit on a date prior to the date of declaration of profit rates, the

profit due can be paid at the rate of profit declared for the last half year.

This, however, shall be a provisional payment with the prior approval of Regional Manager. If

the rate declared for said half year is more than what was paid to such deposit holders then the

difference shall be paid through Payment Order. In case rate of profit announced on Special

Notice Deposit is less, then customer should pay the difference. It will be appropriate if an

undertaking from the customer is taken in this respect.

The return on Foreign Currency SND is paid on maturity or as prescribed by the Bank or SBP

from time to time.

Eligibility

Existing Account Holders (Individuals, Firms and Companies)

3.2.3 SMART FOREIGN CURRENCY FIXED DEPOSITS

 The minimum amount to be placed under this product is USD $ 10,000.

 Interest rates are offered based on the amount of deposit.

 Free Lockers Facility

 Free of Charge Bank Statement & Smart Cards

 Discount (Up to 50%) on processing charges of Personal Loans & Car Financing.

 Preferential rates on consumer loans.

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  Interest on the smart foreign currency fixed deposits is paid on the date of maturity of

deposit for 3 and 6 months tenor. Deposits booked for 1 year is paid interest on a half

yearly basis.

 Cash payment of Interest amount is not allowed.

 Minimum retention period is 01 month, irrespective of the tenor for which the deposit is

booked. In case depositor wishes to encash the deposit before completion of one month,

only principal amount will be paid to the customer. If customer wishes to encash the

deposit after one month but before maturity, the branch will pay interest at the Savings

 Rate for the number of days completed.

In case of any change in the above features, prescribed procedure by RBG will be applicable.

3.3 Account Opening Documentation Requirement

The details of Account Opening Application, Specimen Signature Cards and other Documents to

be obtained for different types of accounts are as follows:

3.3.1 Individuals Accounts

1. Application for Opening Account (SF-1AA).

2. Specimen Signature Card (SF-6).

3. Attested photocopy of Computerized National Identity Card (CNIC) or Passport. It is a

mandatory requirement to verify the CNIC of the customer before opening the accounts,

from NADRA Online system- VERISYS

39
 4. In case of a salaried person, attested copy of his/her service card or any other acceptable

evidence of service, including but not limited to a certificate from the employer.

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

taking left & right thumb impressions on the Account Opening Form & Specimen

Signature Card

6. In case CNIC does not contain a photograph, Banks may allow the said customer to open

the account, subject to provision of the following documents:

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

 A copy of CNIC without photograph duly attested by the same person who has attested

the photograph as per above.

 A confirmation in writing to the effect that they have no other document bearing their

photograph.

 Moreover, the particulars/CNIC of such persons must be confirmed from NADRA in

writing or through its “VERYSES” system.

3.3.2 Partnership Account

1. Application for Opening Account (SF-1AA).

2. Specimen Signature Card (SF-6).

3. Attested photocopies of Computerized National Identity Card (CNIC) of all partners.

4. Attested copy of “Partnership Deed” or “Letter of Partnership (CF-13), in lieu of the

partnership deed, if not available) duly signed by all partners of the firm.

40
 5. Attested copy of Registration Certificate with Registrar of Firms. In case the partnership

is unregistered, this fact should be clearly mentioned on the Account Opening Form.

6. Authority letter in original, in favor of the person authorized to operate on the account of

the firm.

3.3.3 Joint Stock Companies

Copies of the following documents duly certified by the authorized officer of the:

1. Resolution of Board of Directors for opening of account specifying the person(s)

authorized to operate the company account.

2. Memorandum and Articles of Association.

3. Certificate of Incorporation.

4. Certificate of Commencement of Business.

5. Attested photocopies of Computerized National Identity Card (CNIC) of all the directors.

3.3.4 Clubs, Societies and Associations

Certified copies of:

1. Certificate of Registration issued by the Registrar of Cooperative Societies/ Registration

Authority.

2. Bye-Laws/ Memorandum and Articles of Association of the Society containing official

seal of the Registration Authority.

41
 3. Permission of the registration authority for opening of Account in the name of

Association as required under section 37 (d) of Co-operative Societies Act, 1925.

4. List of members of the Managing Committee duly certified by the Registrar of Societies.

5. Resolution duly passed by the members of Managing Committee in their meeting

regarding opening and operation of account in the name of said Society. It must be

ensured that the mandate for operation of Account given in the Resolution is not in

violation of the provision of Bye-Laws/ Memorandum and Articles of Association.

6. Attested copies of CNIC of the authorized officials/ persons.

3.3.5 Agents Accounts

1. Certified copy of “Power of Attorney”

2. Attested photocopy of Computerized National Identity Card (CNIC) of the agent.

3.3.6 Trust Accounts

1. Attested copy of Certificate of Registration

2. Resolution duly passed by the Trustees regarding opening and operation of Account in

the Bank in the name of said Trust Deed.

3. Attested copies of CNIC of all the trustees.

4. Certified copies of Letter of Administration/ Instrument of Trust.

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3.3.7 Minor Accounts: (Age below: 18)

A Minor is a person who has not attained the age of 18 years, if the Court appoints guardian of

his/her person or property, then the period of his minority extends to the age of 21.

1. An account in the name of minor is allowed to open by his guardian, preferably jointly in

the name of guardian / Minor or Minors, payable to either or survivor opener of the

Account.

2. Title of Account is on the Minor’s Name (As per Form –B) &word “Minor” be added to

the Title of Account.

3. In the Account Opening Application, the particulars of the Guardian will be filled out in

the column of “Personal Information”.

4. Attested copy of Computerized National Identity Card (CNIC) of the Guardian.

5. Attested photocopy of Form-B of Minor.

3.3.8 Illiterate / Photo/ Disable Persons Accounts

1. Attested photocopy of Computerized National Identity Cards (CNIC).

2. Two Attested Photographs. (One photograph shall be pasted on the Account Opening

Form and other will be pasted on Specimen Signature Card.

3. Left thumb impression (Right thumb impression in case of female) on the account

opening application & Specimen Signature Card (SSC)

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3.4 Account opening

Client/Account Opening Process Steps

1. Customer comes into the branch and requests for opening an account.

2. Customer Services Officer (CSO): delivers the Account Opening Application along with the

terms and Conditions (AT&C) and relevant documents to the customer.

3. Customer: receives the Account Opening Form (AOF) from CSO and submits duly completed

AOF and relevant documents to the CSO.

4. CSO: checks that all the fields in the Account Opening Form have been duly filled, and the

relevant account documentation required from the customer depending on the type of account are

completed and attached.

 Account Opening Form (AOF)

 Specimen Signature Card (SSC)

 Account Terms & Conditions acknowledgement

 Attested copy of CNIC

44
  Copy of employment or student Card & other verification documents as required on case-

to-case basis.

Obtain customer’s signatures on the AOF and SS Card (in person). Moreover one signature card

will be used to capture per signature of the client (In case of Joint Account Holders use

additional signature card). Subsequently takes the form to the Relationship and Operations

Manager for Verification and authorization.

5. Operations Manager/ Account Maintenance Officer (AMO):

Verifies introducer’s signature from Branch Teller Module > Transactions > Non- Financial

Transactions > Customer Signatory (Screen # BT44).

 Sign-off and affix stamp on the Account Application.

 Forwards AOF & Client Profile Form to Relationship Manager.

6. Relationship/ Branch Manager

 Interviews the customer.

 Completes and sign off Know Your Customer (KYC)/ Client Profile Form.

 Returns the same to the CSO for further processing.

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7. Customer Services Officer (CSO):

Selects SYMBOLS Branch Teller Module > Transaction > Non-Financial Transaction > Client

Definition (Screen # BT41) to create a client.

 Insert Client Short Name. This is used as the default Title of Account whenever an

account is opened.

 Input Client full Name. Pop-up box will appear on the screen: Input or select appropriate

ID Type & insert CNIC number & press OK. (Box will close automatically)

 Insert Country Code, State, Country of Citizen, Country of Risk.

 In the next section of the same screen, insert Client Indicator as “N” Normal, “S” Staff

and/or “V” VIP Account.

 Input address as written in Account Opening Application- SF-1AA.

 Select Account Executive & Client Type then press F-10 or click save icon available on

Tool Bar.

System generates the client number and Pop-up box appear on the screen with the following

message:

“SUCCESSFULLY OPENED 09 DIGIT CLIENT NO xxxxxxxxx”

CSO notes down the client number on the account opening form.

In case of joint account holders, separate client numbers will be given to each client.

46
Account Opening:

Uses SYMBOLS BT Module > Transaction > Non-Financial Transaction > Account Opening >

select type of account Current or PLS (Screen # BT42) and for Term Deposit (Screen # BT422).

Input Account Type, insert Client Number and press enter.

Client information will be retrieved on the screen:

Service Charges:

Service Charges TAB shows following two charges attached with the account.

 SVC- Service Charges Current

 SVP- Service Charges PLS

 ZAK- Zakat Service Charge

Service Charges (SVC & SVP) are not link with the exempted accounts. (The above exemption

would be applicable only on those accounts where account holders have provided relevant

documentary evidence to the branch) Zakat Deduction service charge type (ZAK) is only

attached with the accounts where Zakat Declaration Form is not submitted by the customer (Only

for Muslims). Zakat deduction is not applicable on Non-Muslims.

Select ZAK as Type, ZK as frequency & press enter Next Charge Date by default appears as for

the next year.

47
For example: If account opening date is 07th November, 2006 than Next Charge date should be

07th November, 2007.

Note: ZK is the auto frequency type for Zakat Deduction. System generates the account number:

 CSO note down Client &/or Account Number on the Account Opening Application and

Deposit slip.

 Provides the initial Cash Deposit slip to the customer.

 Forwards the Account Opening Form, relevant documents, cheque book requisition &

ATM Request to the Branch Operations for further processing.

8. Customer: Deposit cash in the account & obtains the receipt from the teller and leaves the

branch.

9. Operations Manager:

Admits customer’s signature, affix stamp & sign-off the Application/ SS Card.

Account Maintenance Officer: Verifies customer data (inserted in BT by CSO) with the Account

Opening Application & other relevant documents.

Step 1.

AMO scans customer’s signature in the Branch Teller Module (BT) > Transactions > Non-

Financial Transactions > Customer Signatory > (Screen # BT45)

48
Input or Select Client Number, press enter customer Name will appear on the screen , Input

Name of Signatory & Description

 System shows message at the bottom “Scanning to SYMBOLS”

 Pop-up box appears on the screen and shows message “Loading image”. Press Ok and

then Click “Save icon” or press F10.

 Popup appear as “Transaction completed: Records applied and saved.

Step 02

Select Branch Teller Module >> Transactions >> Non-Financial Transactions >> Account

Signatory (Screen # BT 44). Enter Account number, press enter and save.

 Keep Specimen Signature Cards (SSC) in fire proof cabinets.

 Forwards Account Opening Application along with the relevant documents to the

Centralized Operations (in a sealed envelop via courier) for insertion of Client

information in Kernel Module (Financial Management), issuance & dispatch of Thank

You Letter to the New Customer and introducers. Also enclose covering note which

contains the total number of forms in the envelope.

10. Central Processing Division (CPD): performs the following functions:

49
  Selects Kernel Module > Static > Client Information > Client (Screen # FM144) and

completes client opening screen # 144 in Kernel Module (Financial Management).

 Dispatches Thank You Letter to the customer and introducer.

 After three working days, returns account opening application, relevant documents, copy

of Thank You Letter, Account Details Report & Covering Letter to the branch for their

record. Also enclose undelivered Thank You Letters, if there are any.

11. Operations Manager/ Account Maintenance Officer:

Receives account opening applications from CPD counts the total number of forms and tallies

the number mentioned on the covering letter. After verification branch forwards

acknowledgement to CPD.

 Keep Account Opening Forms along with the relevant documents in the Fire Proof

Cabinets or Vault for record.

 Keep Signature Cards in the Fire Proof Cabinets in a sequential order.

50
3.5 Classification of Accounts

3.5.1 Dormant Accounts

Checking accounts are classified as dormant accounts on the following conditions:

 Current accounts not operated for “6” months and Savings accounts not operated for one

year shall be classified as dormant accounts.

 Half yearly profit shall continue to be applied as usual on Savings account only.

3.5.2 Inoperative Accounts

 Current Accounts not operated for “2” years and Savings accounts not operated for “3”

years shall be classified as “Inoperative accounts”

 Half yearly profit shall continue to be applied as usual.

3.5.3 Unclaimed Deposit Account

If a Current & Savings Accounts remains Inoperative for “08 & 07” years respectively will be

classified as Unclaimed Deposit Account. In addition to this, Bank Drafts, Government Drafts,

51
Payment Orders, Mail Transfers, Fixed/Term Deposits etc. remains outstanding for 10 years

from the date of issuance will be classified as Unclaimed Accounts.

Banking Companies Ordinance 1962 under section 31 clearly defines that Banks are required to

transfer the Unclaimed Deposits to State Bank of Pakistan (SBP) on the completion of a period

of Ten (10) years without any delay.

 All unclaimed deposits including time deposit or any other kind of deposits or financial

instrument (Pay in slips, Payment Orders, Demand Draft, TT, MT’s or any other financial

instruments)

 However, Deposits/Instruments recorded in the name of Minor or Government

Department/Agency or Courts of Law are not transferred to SBP.

 No profit/interest is paid on deposits transferred to Unclaimed Accounts. Similarly, no

service charges are deducted.

3.5.3.1 Notice to the Holder of Unclaimed Deposits/ Instruments

 03 months prior to the completion of Unclaimed Deposits, branches are required to

intimate the account holder in writing via mail on the customer’s address regarding the

settlement of their deposits/instruments.

 If on the expiry of the three month’s period no acknowledgement or reply is received

from the holder of unclaimed Deposit/Instrument, the entire funds should be transferred

to SBP.

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  Branches are required to maintain complete record of letters sent tithe holders of

Unclaimed Deposits

 Branches are also required to send written intimation to the Government Institutions,

Agencies, Court of Law and Minors (After acquiring the age of maturity) for the

settlement of their deposits/instruments.

3.5.3.2 Reporting Of Unclaimed Deposits

Branch submits list of unclaimed deposits/ instruments separately for Pak Rupee and in Foreign

Currency (FCY) on the Form XI (Annexure- I-05-B) within thirty days after the close of each

calendar year.

3.5.3.3 Transfer of Unclaimed Accounts to State Bank of Pakistan

 The amount of unclaimed PKR and FCY deposits/ instruments is transferred to SBP at

the end of each calendar year along with a list of unclaimed deposits/instruments.

 In case of Frozen FCY deposits / Instruments of 1998, as and when become unclaimed,

the Bank/DFIs will surrender the equivalent PAK RUPEES to State Bank

3.5.3.4 Retention of Documents

Preserve all signature cards and documents indicating the “Signing Authority” and other

documents in the dual custody of Operations Manager and Designated Authorized Officer.

53
3.5.3.5 Refund Procedure

All claims lodged with the Branch about Unclaimed Balances transferred to State Bank of

Pakistan (SBP), should be forwarded to State Bank of Pakistan through Principal Office and after

getting Proceeds from State Bank of Pakistan same shall be paid to the Claimant.

While forwarding any claim for refund, branches are required to obtain the following documents:

 Original application for refund long with verification of attested signature/thumb

impression of the claimant by the Branch Operations Manager or Designated Authorized

Officer with the name and stamp.

 Claimant’s address and contact number must be clearly mentioned in the application.

 Copy of Intimation Letter sent to the holder of unclaimed deposit/instrument.

 Attested copy of CNIC of the claimant.

 Certificate as per Annexure- I-05-C.

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3.6 Account Closure

For the purpose of account closing a form has been constructed to aide this process. Whenever

the client wants to close the account, the only responsibility of the bank is to collect the issued

cheque book from the customer and to get the constructed application form of account closing

completely filled. After that the payment of the entire amount in the account is paid to the client.

1. Customer: Presents duly completed account closure application to the CSO.

2. Customer Services Officer- CSO:

 Receives account closure application

 Confirms Account balance from the Branch Teller Module

 Informs account balance and returns the same to the customer, in order to fill out

the cheque of the complete amount (Account Balance)

Designated Authorized Officer Verifies customer’s signature on Account Closure

Application.

3. Customer: Fills out the cheque of the total amount and presents the same to the Teller for

encashment.

4. Teller: Verifies the customer’s signature & amount from the system

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  Selects transaction type "CQWR" (Cheque withdrawal) from List of Values

 Debits the entire amount from the customer’s account.

 Enters the transaction details i.e. customer's account number, currency, amount of

withdrawal and cheque number etc.(If transaction amount exceeds the Teller’s limit,

screen pop-ups “Authorization Required” message. Chief Teller authorizes/approves the

transaction).

Note: In case of any Restraint on the account: Teller informs the customer to submit a written

application to the CSO, in order to remove the restraint from the account.

5. CSO: Receives restraint removal application from the customer & forwards the same to the

Relationship Manager for signature verification and deletion of restraint from the account in

order to close customer’s account.

6. Account Maintenance Officer (AMO) Verifies the details and remove restraint from the

customer’s account.

 Forwards the application to the Teller in order to close the account.

7. Teller: After receiving the application from the AMO, inserts the transaction details in the

system, it will generate the following entries:

56
Branch Teller Module:

DR: Customer Account

CR: Cash In Vault

Accounting Entry For Account Closure Charges:

Dr: Cash In Vault/ Customer’s Account

Cr: Miscellaneous Earning (A/c Closure)

Counts the cash and deliver the same to the customer.

8. Customer: Counts the cash and leaves the branch.

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 3.7 Overview of cheque

(Mr. Mahmood. Remittance)

Cheque book is a safe custody instrument. Cheque is used for cash withdrawal and making

payments. Cheque books are relatively sensitive items hence due care must be exercised while

handling them.

Issuance of Cheque book for New Account Holders

MF-80R is used for cheque book issuance to the New Account Holders as well as the exiting

customers (In absence of existing cheque book or cheque book requisition slip).

Issuance of Cheque book for Existing Customer

Prior to issuance of a new cheque-book, please ensure that the affair of the account is satisfactory

in all respect (customer maintaining minimum balance requirement, account is not dormant

/blocked/ inoperative, the relationship activity is within the prescribed norms of banking

regulations & the customer’s signatures are verified as per the required practice).

Cheque books should be issued to the account holder or his/her authorized representative at the

Bank’s counter if DAO is fully satisfied. However, in exceptional cases the Operations Manager

may allow issuance/ dispatch of cheque book to the customers through courier after completing

all the relevant formalities.

Handling of Undelivered Cheque books

All processed cheque books that remain uncollected by the customers for six months from the

date of issuance must be destroyed by the branches after the recovery of Cheque book issuance

charges and Excise Duty (If any).

58
 The cheque-book custodian (Designated Authorized Officer) records the details of all

such cheque books in the Annexure 1- 09-A.

 Branch Manager would approve the list for destruction and sign-off.

 Custodian (Designated Authorized Officer) destroys the books/leaves in the presence of

the Branch Manager and obtains his/her signature.

 Ensure proper notation on cheque-book issuance Report for the books destroyed.

3.7.1 Procedure for Issuance of Cheque books

1. Customer: Visits the branch and presents cheque book requisition slip. (Available in the

existing cheque book)

In case of new customers or lost requisition slip/Cheque book, customer fills out a cheque book

Requisition slip

2. CSO: receives requisition slip from the customer.

 Confirms Account balance from the Branch Teller Module >. Also confirm the status of

account (Active, Dormant, and Inoperative).

 In case of dormant or inoperative account, CSO request the customer to perform a

financial transaction on the cash counter in order to activate the account & process

cheque book issuance request.

 System does not permit the processor to submit the cheque book request by disabling the

“SUBMIT” icon on the screen, if account has dormant or inoperative status.

59
 CSO Forwards cheque book requisition slip to Designated Authorized Officer to verify

customer’s signature from the Branch Teller module- BT.

3. Designated Authorized Officer/ Account Maintenance Officer (AMO)

 Verifies customers signature through Branch Teller Module >

 Input account number, press enter, account information & signature appears on the

screen.

 Sign-off and affix stamp “Signature Verified” stamp on the requisition slip.

 Returns requisition slip to CSO for further processing.

4. Customer Services Officer (CSO- Input USER)

 Receives Requisition Slip.

 Log in to Cheque book Registration System (CBR).

 Input Account Number & click on submit icon.

 Next screen shows the customer’s account details. (At the bottom of the screen all the

Cheque Book Request that are linked to the customer’s account are shown along with

their status).

 Click to the option “Proceed” available on the above screen. Input “Number of Leaves”

as requested by the customer.

 Click on submit icon, system saves the cheque book request with the “New” status.

60
5. Designated Authorized Officer/ Account Maintenance Officer (Approver)

 Approver inserts Login ID and password in the Cheque book Request System in order to

approve the cheque book requests. Click on submit icon.

 Click on customer’s Name link, Cheque book Request Details will appear on the screen.

 Check details with the Requisition Slips and select Application Status as “Accepted”

 Click on “SUBMIT” ICON.

 Keep Cheque book Requisition Slips in the Fire Proof Cabinets under Dual Control.

Approver ensures that all the above fields are properly filled by the Input user and

approve the Cheque Book Request accordingly.

6. Central Processing Division (CPD)

 Inserts USERID & Password and submit.

 Main Menu Bar screen appears, clicks on Print Cheque book Tab on the top Menu Bar.

 Screen will show the details and total number of request received from all the SYMBOLS

Branches.

 Click on “Print” Icon & system gives following message “The Cheque book Request has

been set to Printed”.

 Details of the Cheque book Request automatically upload in the text file.

 Forwards Text File to NIFT via e-mail.

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7. NIFT: Forwards Text file to Printer for marking “Magnetic Ink Character Recognition”

(MICR) & Account Details (Number & Title of Account)

8. Printer:

 Receives cheque book requisition slips from the NIFT for marking MICR codes.

 After one working day, delivers the same to the respective branches along with the

covering schedule.

 Forwards the details (Via e-mail- Text file) of the printed cheque books to the CPD for

verification and for uploading the cheque series in the CBR system

9. Central Processing Division (CPD)

 Receives Text File from Printer and updates the cheque series in the system.

 After uploading the series in the system, “Printed” status automatically changed into

“Received”.

10. Designated Authorized Officer

 Receives processed cheque books from Printer along with the covering schedule.

 Mark received on the cheque book covering Schedule (report) and sign off the same.

 Notes down cheque series on the Cheque book requisition slip on which customer’s

signature is already verified. Note down the receipt date on the right corner of the cheque

book.

62
 Attach requisition slips with the respective cheque books.

 Keeps the cheque books in the safe custody under dual control. (Strong Room or Fire

Proof Cabinets).

 Designated Authorized Officer daily delivers the cheque book Box to CSO for onward

delivery to the customers.

11. CSO (Customer Service Officer) Daily generates Cheque book Issuance Report and maintain

in a box file. Match the total number of cheque books received in day with system generated

report.

3.7.2 Collection of Cheque book by the Customer

1. Customer: Visits the branch to collect his/her cheque book.

2. Customer Services Officer - CSO:

 Retrieves the cheque book from the box.

 Detach requisition slip from the cheque book.

 Obtains Customer’s signature on the cheque book requisition slip & Issuance Report.

Ensures that the signatures are duly verified.

 Delivers the cheque book to the customer.

3. Customer: Collects cheque book and leaves the branch.

63
4. Customer Services Officer (CSO)

After obtaining the acknowledgement (Signature),

 Attach Cheque book series with the account by using Branch Teller- BT >> Transactions

>> Non-Financial Transactions >> Cheque book Issuance (BT- 47)

 Input or Select Account Number, press enters.

 Input appropriate Size Type e.g. “S” Small

 System will show Number of Leaves.

 Input Start Cheque Number, system shows the End Cheque Number.

 Press F10 or Click on save icon available on the tool bar.

System automatically debit customer’s account and credit Income Head (Miscellaneous

Earning).

Auto Account Entry:

Dr: Customer’s Account (CBIC)

Cr: Miscellaneous Earning- (Account No.)

Cr: Stamp Duty (If any)

CSO enters Login ID & Password in CBR system in order to change the “Received” Status to

“Delivered”.

64
Click on View Request option available on Tool Bar, cheque book details report displays on

screen, CSO click on Customer’s Name & verifies the cheque series and changes the status into

“Delivered”

After performing the above task, system shows the message “The Application Status has been set

to Delivered”.

Forwards all the requisition slips to the Designated Authorized Officer for the validation of Daily

Cheque Issuance Listing Report for the day.

At end of Day, returns all the undelivered cheque books to Designated Authorized Officer for

stock balancing.

5. Designated Authorized Officer:

Generates Daily Cheque Issuance Listing Report from MCB Reports and verify the details from

the entire requisition slip issued in a day.

There is a report available in SYMBOLS that provides details of the entire cheque books issued

to all the account holders in the branch since the account opening date.

3.8 REMITTANCES

This covers the services and products that Bank offers to its customers for Funds Transfer.

Currently Bank is offering following Products & Services for Fund Transfer: (Locally &

Internationally).

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 Payment Order

 Demand Draft (Local & Foreign Currency)

 Telegraphic Transfer (Local & Foreign Currency)

 Mail Transfer (Local Currency)

Note: But here now a day the time of online transfer so TT (Telegraphic Transfer ) and

MT( Mail Transfer) not in practically use because people like online quick and safe transfer of

amount even DD ( Demand Draft ) and PO ( Pay Order ) use for documentary prove

3.8.1 Demand Draft

Features

 Demand Draft is a written order.

 Drawn by one branch of a Bank upon another branch of the same Bank, or upon other

Bank to pay a certain sum of money to or to the order of a specified person. It is issued

by one branch of a bank and payable by another branch of the same bank or another bank

 Demand Draft is a negotiable instrument.

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

the same city.

 Legal provisions as to crossing, endorsement, collection and payment in due course are

similar to those as for cheques and other negotiable instruments.

 It is to be ensured that the purchaser of Demand Draft is able to at least sign his name.

 Thumb impression is not to be accepted on Funds Transfer Application except in cases

where purchaser is maintaining an account with the issuing branch. A person unable to

66
 sign and not having an account may be advised to apply for the DD through a literate

person to sign on his behalf.

3.8.1.1 Parties involved in the Demand Draft

1. Purchaser: Is the person, firm, company or local authority.

2. Issuing or Drawing Branch: The Branch which issues a Draft on another Branch.

3. Drawee Branch: Is the Branch on which a draft is drawn.

4. Payee / Beneficiary

Remitter Draft Beneficiary

Fund
received

Draft

Advice
Issuing Branch Drawee Branch

3.8.1.2 Accounting entry for DD issuance

DEBIT PARTY ACCOUNT

CREDIT HO (specific branch of MCB on which DD issued)

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3.8.1.3 Accounting entry for DD Payable Branch.

DEBIT HO (Specific branch by which DD issued)

CREDIT DD PAYABLE

Once the DD present to the branch then the following entry will pass

DEBIT DD PAYABLE

CREDIT PARTY ACCOUT CREDIT

Payment of Demand Draft via Cash

When Demand Draft is presented at the counter of a Drawee branch for cash payment,

identification of a payee is required. If a payee is the customer of a branch, his signature can be

verified from the specimen signatures on the record.

A Crossed DD cannot be paid in cash, except to a banker who collects the same for credit to his

customer’s account. As such, a crossed DD cannot be presented by the Payee for Cash payment

at the counter.

Payment of Demand Draft in Transfer/ Clearing

Payment of Demand Drafts can also be made in Transfer/ Clearing. A complete procedure for

collection / payment has been explained in the section of Cash and Counter Services (Inward

Clearing

68
 Revalidation of Demand Draft

Since DD is payable within six months from the date of its issue, therefore, an instrument being

older than six months requires revalidation before payment.

Following procedure will be used:

 The signature on such letter should be duly verified.

 DD should be presented to the Issuing branch.

 Particulars of the DD should be compared with those given in the RSBS or Branch Teller

Module.

A rubber stamp reading “Revalidated on --------” should be affixed on the DD under signature of

two authorized officers of the branch with IBS or AS Numbers.

3.8.2 Payment Order

Payment Order is used for making payments within a city. Literal definition of Payment Order is

as follows:

“A Pay Order is a written authorization for payment, made in a cheque form issued and payable

by the bank, to the person named and addressed therein on his giving a proper discharge

thereon”.

69
FEATURES

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

 It is neither transferable nor negotiable and as such it is payable to the payee named

therein

 It is in a receipt from and therefore is payable only after obtaining a discharge of the

payee on adequate revenue stamp

 Pay Order cannot be issued to a minor

 Pay Order meant for bank’s own payment but in practice these are also issued to

customers for making payment.

 Pay Order is issued for payments within the same city

3.8.2.1 Characteristics of the Payment Order

 It is issued by and drawn upon and payable by the same branch of the Bank.

 It is neither transferable nor negotiable and as such it is payable to the payee named

therein.

Parties involved in the Pay Order

Purchaser: Purchaser is a person, firm, company, Government/Semi Government Organization

or local authority.

Issuing/Paying Branch: These issues/pays on presentation of the instrument.

70
Payee: Payee is the person named on a bill to whom, or to whose order, payment is to be made.

Where a bill is not payable to bearer, the payee must be named or otherwise indicated therein

with reasonable certainly.

3.8.2.2 Accounting entries for P.O issuance

DEBIT: PARTY OR CASH

CREDIT: PAY ORDER ISSUANCE

3.8.2.3 ACCOUNTING ENTRY WHEN PAY

DEBIT: PAY ORDER

CREDIT: PARTY

3.8.3 Term Deposit Receipt

Term Deposit Receipt is basically used for the saving purpose, and it is also use for transfer

purpose, which means amount moves from one account to another account, in term deposit

receipt specific time period is mentioned and during this particular period no one can withdraw

this amount from his account, so when we talk about some specific time period it may be three

months, six months three years etc basically it depends open on customer according to his desire

I made this Term deposit receipt. Term Deposit Receipt is basically a profit oriented instrument,

because customer deposits his money for specific period of time and on behalf of this bank will

pay some percentage of profit which depends upon the amount of deposit higher the deposit

higher will be the percentage of profit.

Basically TDR is profit oriented instrument so that’s why zakat is also applicable on it, no

commission is charged on this term deposit receipt.

71
3.8.3.1 Procedure of Issuance of Term Deposit Receipt

First of all receive the request letter from customer on (S.F 265)

Also receive the cheque which is transfer from cheque to TDR.

The client can also made his TDR by depositing cash but his account must be opened in our

branch which is necessary because TDR payment is made only through account no counter

payment is made on behalf of this TDR.

Fills the TDR block and write down the complete information on it.

 Date of issued TDR

 Received from

 On Account of

 Amount in wards and Amount in Figures

 Than send this TDR for signature one from the Accountant and one from the Manager.

 Taking all this information in to the TDR register that is TDR

 Serial number 58/15

 Customer name

 Account number

 Issued date

 Expiry of this TDR

 Deposit Receipt which is TDR block Number

72
Renewal of Term Deposit Receipt

When the customer fills the S.F 265 which is TDR application form, in this form one option is

given and the option is

Rollover the Same Tenure

If the customer tick this option while filling this form than automatically the renewal of TDR is

happened no need for any customer request, which means that customer is agree with rules and

regulation, and if the customer is not tick this option than he again gives us the request letter on

which he wants to extend this time period of TDR, for this purpose he will also come to the

branch with original TDR and change the date which is mentioned on this TDR.

3.8.3.2 Payment Procedure of Term Deposit Receipt

The payment procedure of TDR is only made through account no counter payment is made for

this Term Deposit Receipt. Customer transfer this TDR at the expiry of this TDR in to his own

account and than present a cheque and mention the required amount which he wants to withdraw.

3.8.3.3 Deduction of Zakat Thereon

73
Because TDR is profit oriented instrument so that’s why zakat is applicable on it, now the

percentage of zakat which is deducted form the whole amount which is available in his account

is 2.5%. So this is the simple rule of Zakat deduction

3.8.3.4 Voucher in Sheet of TDR

Dr Cheque

TO

CR Term Deposit Receipt(General)

3.8.4 Call Deposit Receipt

CDR is just like a hard cash, basically CDR is used for transfer purpose means amount transfer

from one account to another account, CDR is used for Bidding purpose or some time government

introduces different housing scheme and here he mentioned that you must submit the CDR

instead if net cash, but in now a days when the government of Pakistan impose .2% withholding

tax of the amount which is withdrawal over RS.25000/- in a day

3.8.4.1 Issuance of Call Deposit Receipt

Receive the request letter from customer and also receive the cheque and verify this cheque

weather this post dated, stale cheque or not and also check the sign verification of this customer

which is mentioned on this cheque and compare with signature card which is scanned in

computer.

74
Than send this cheque for posting here and see that is it enough amount in his account which he

written down on this cheque, if yes than further processing.

Fills the CDR block and write down the following information on it

 Issue date of this CDR

 In favor of

 On account of

 Amount in wards

 Amount in figures

 CDR serial number i.e. 58/07

 Than take the signature, account number his contact number at the back side of

the copy which we kept as record

 Paste stamps on this cheque that is Branch crossing stamp

 Transfer stamp on this cheque

Charges of CDR

Bank charge Rupees 50/- per CDR

3.8.4.2 Enter these vouchers into Transfer sheet

Debit Cheque

TO

Credit CDR

75
Also made commission voucher, and this commission is deducted from his account the customer

may this commission charger through cash or I can charge from his account

Debit Account

TO

Credit MISE Earning (General)

3.8.4.3 Maintenance of Records of CDR

For the purpose of maintenance of CDR record I used the CDR register. This register uses to

write down the following things

 Date of Deposit

 Deposit number i.e. 58/10

 Deposit Receipt i.e. 770012

 Depositor name

 Account number

 Due Date (At Call)

At Call means that the bank will provide the same amount to the customer who made this CDR

at any time.

Payment procedure of Call Deposit Receipt

76
The customer whose name, account number is mentioned on this CDR he is only person who can

take this amount through his account not in counter payment. Basically CDR is mostly used for

transfer purpose that’s why his payment is made only through account.

3.8.4.4 DIFFERENCE BETWEEN CDR AND TDR:

CDR VS TDR

Non interest bearing instrument Interest bearing instrument

Demand at Call Demand after the specific period

No Zakat is deducted Zakat is deducted

Use for Transfer Purpose Use for saving Purpose

Charges on CDR No Charges on TDR

3.9 Clearing

“Fund transfer between two banks and branches is called clearing”

There are two types of clearing

 Outward clearing

 Inward clearing

Outward clearing

77
“Outward clearing is to send the cheques to other branch”

There are three types of outward clearing

1. Same day clearing

2. Normal clearing

3. Inter city clearing

1. Same day clearing

In same day clearing send the cheque in the morning and receive the payment in the evening,

There are two conditions in the same day clearing

 Cheque will be 500000 or above

 Member of the same day

2. Normal clearing

In normal clearing send the cheque today and receive the payment next day. No condition will

impose in normal clearing like same day clearing.

3. Inter city clearing

Clearing between two cities is called intercity clearing. In inter city clearing cheque will clear in

two or three days.

To understand the process of clearing we first need to understand and comprehend the workings

and the purpose of the state banks institution called NIFT.

3.9.1 NIFT (NATIONAL INSTITUTIONAL OF FACILITATION TECHNOLOGY)

78
In the process of clearing NIFT plays a very important role. NIFT (national institutional

facilitation technology) has a very vital role as it is the “middle man” in the purpose of clearing

and issuances of cheque books to the customer on demand of the bank or branch. This institution

has been formed by the State Bank of Pakistan and it performs the duties of receiving all the

clearing cheques from all the branches of all the banks and taking them to the state bank. At the

SBP first the NIFT forms a list of all the cheques from all the banks and then forwards it to the

SBP representative. That person categorizes all these cheques according to their respective banks

and branches and forms another list of his own. Then these sorted cheques are again given to the

NIFT agent and he then takes them to the head offices of their respective banks and from there

they are distributed to the respective branches also through NIFT. This way NIFT delivers all the

cheques to their parent branch from which they have been issued.

3.9.1.1 FLOW CHART OF WORKING OF NIFT

79
3.9.2 In Ward Clearing

In the morning time I am received the in ward clearing from the NIFT employee and then I count

the instruments which I received and match with the summery which is also attached with these

instruments. Than give these instruments to the computer operator who posts these instruments,

after posting all these instruments then he again give me the instruments and I enter all these

instruments into the clearing sheet in his Debit side.

Memo on Cheques Return

Also prepare the Memo on (S.F 16) in which the details of objections are given that for purpose

we return this instrument, and charge RS 200/- per instrument

Calculate the Difference Vouchers of Clearing

80
Difference voucher means the difference between the Out ward Clearing and In Ward Clearing.

If the liabilities are outstanding on our side which means that our branch will pay this difference

amount than I will prepare the H-O Credit Voucher, and if the Liabilities are outstanding on

there side which means that now we are receiving the difference amount so I will prepare the H-

O Debit Voucher.

 If liabilities are outstanding on our side than made Credit voucher

 If liabilities are outstanding are on there side than made Debit Voucher

Calculate the Difference Vouchers of Clearing Return

I have also made the difference voucher of those cheques which are R.U.P means Return Un

Paid. Means those cheques which our branch is returned and those cheques which other banks

returned our cheques which we send for clearing and it had been rejected

 If liabilities are outstanding on our side than made Credit voucher

 If liabilities are outstanding are on there side than made Debit Voucher

Than finally enter all these difference vouchers in to the clearing sheet and balancing with the

computer. So this the complete process of Clearing.

3.9.2.1 FLOWCHART OF INWARD CLEARING

81
 Customer CHQ holder
Gives cheque Goes where he
Of MCB to has his own
Other party A/C

Bank keeps
At evening CHQ and
Bank send Makes
That CHQ to Transaction

NIFT send MCB MCB receives

CHQ next CHQ and checks
Morning to that The following
Branch whose Things
Name is mention
On CHQ

Their own branch

NIFT transfer instrument
Amount to the Date of instrument
Drawer bank Date of clearing
Over writing
Amount in figures
Amounts in words

MCB Dr. the A/C

Of customer and
Cr. A/C of NIFT

3.9.3 OUTWARD CLEARING

82
When the account holder of our bank receives payment from any other party in the form of

cheque, and that cheque is not of our bank or branch, and our account holder deposits it in his

MCB account then that cheque has to pass from the process of outward clearing.

All the cheques deposited in one day of other banks are then again sent through the NIFT to the

SBP which sends them to the head offices of their respective banks which through NIFT sends

the instruments to the respective branches from which they were issued. This process of outward

clearing is exactly opposite to the process of inward clearing which I explained in detail before.

This process of outward clearing is also of three days.

3.9.3.1 Procedure of Out Ward Clearing

First of all receive the instrument from different customers which they present on our branch.

 Separate these instruments with in city clearing wise and inter city wise.

 Giving the receiving slip to the customers.

 Write Down the detail of these entire instruments which I received from customer in to

the Clearing Register.

 Paste the Cross Stamp and clearing stamp at the front of these instruments Face.

 Paste the Payees Account Credited stamp at the back of these instruments.

 Calculate the amount of all these instruments

83
  Prepare the delivery summery report

 Prepare the Clearing Bundle Cover

 Also prepare the Add List

After each and every thing is completed now put all these instruments into the NIFT bag and

closed this bag with seal. Than the third copy of delivery summery along with deposit slips keeps

in our custody, and then enter all these vouchers in to the clearing sheet in his Credit side so this

is the complete procedure of out ward clearing.

3.9.4 Intercity Clearing

There is the new concept of clearing which is named as inter city clearing. State Bank of

Pakistan now revises his policies and introduces this concept, because before this action if any

instrument which is belong to out of city, so in order to clear this instrument we sent this cheque

through CC Cheque Collection. Under cheque collection procedure it took five to six days which

time taking even though the CC procedure is not yet finished but minimum up to the certain

extent. Now in most of the big cities inter city Clearing performing his job instead of CC, with

the help of inter city clearing time duration is definitely minimum.

Facility of Inter City Clearing is now offer in these cities

 Karachi

84
 Lahore

 Mulatn

 Gujranwala

 Rawalpindi

 D.G Khan

 Hyderabad

 Islamabad

 Sialkot

 Bahawalpur

 Quetta

 Peshawar

3.9.4.1 Procedure of Intercity Clearing

 First of all receive the instrument from different customers which they present on our

branch.

 Separate these instruments inter city clearing wise.

 Giving the receiving slip to the customers.

 Write Down the detail of these entire instruments which I received from customer in to

the inter city Clearing Register.

 Paste the Cross Stamp, clearing stamp and inter city stamp at the front of these

instruments face.

85
  Paste the Payees Account Credited stamp at the back of these instruments.

 Calculate the amount of all these instruments

 Prepare the delivery summery report for each city

 Prepare the Clearing Bundle Cover for each city

After each and every thing is completed now put all these instruments city wise into the separate

envelope of every city and all these envelopes put in to the NIFT bag and closed this bag with

seal. Than the third copy of delivery summery along with deposit slips keeps in our custody city

wise. But inter city payment procedure is different I can not credit the particular account until or

unless I am receive the NILL value voucher through NIFT, and also receive the summery from

NIFT about all these instruments which I am sent separately into different cities. When I receive

the NILL value voucher then enter these vouchers into the clearing sheet

Dr H-O

To

Cr A /C

Also charge the commission on inter city Clearing which is RS 200/- per instrument. And also

made the commission voucher that is account Debit and Mise Earning is Credit

Dr A /C

TO

Cr Mise Earning (General)

3.10 Lockers

86
Basically it is a facility which is provided by the bank to its customers in order to secure there

money gold important property documents etc. before this locker concept people are very much

worried about the lose of there money, gold and important documents so now the people are very

much relax because now they use this facility quite frequently.

3.10.1 Issuance of License

It is not an easy task to get the licence of opening the locker facility in the branch for every bank,

for this purpose the bank should get permission from State Bank of Pakistan who is the banker’s

bank; with out his permission no body can provide this facility to the customers. The branch who

wants to get licence he must sent a written request letter to State Bank than the state bank officer

visit this branch and see that is there enough place to provide the licence of lockers to this branch

or not? If they are satisfy they charge the licence fee from this branch.

3.10.2 Types of Lockers

Small Size (Rent RS 1400 per Annum) 16% FED Rs.224

(Key Security Rs.2000)

Medium Size (Rent RS 2200 per Annum) 16% FED Rs.352

(Key Security Rs.2000)

Large Size (Rent RS 3500 per Annum) 16% FED Rs.560

(Key Security Rs.2500)

3.10.3 Insurance of Lockers

87
Bank will also pay the insurance on behalf of this lockers so in case of any bank misshape then

the insurance company will accept the certain claim but it depends open the size of the lockers

Small Size Locker Claim up to RS 500,000/-

Medium Size Locker Claim up to RS 10, 00,000/-

Large Size Locker Claim up to RS 15, 00,000/-

3.10.4 Renewal / Expiry of Lockers

Usually the time period of this facility is one year, at the end of the time period the bank will ask

to the client that weather he will continue this facility or not if the customer says yes then he will

pay the charges again in order to use this facility which is provided by the bank.

Procedure of Use of Lockers

One key is given to the customer and the other key is handed over to any bank person who is the

authorized person, and the locker is opened with both keys.

The authorized person who keeps keys He/She note following things

 Customer name

 Signatures of customers

 Time of lockers operating

 Account number

 Leaving time

Customers can use this locker during the banking hour that is 9: Am to 5: PM.

Chapter # 3 Self Experience

88
 Dressing (Suiting)

 Regularity

 Punctuality

 Account Opening

 Account Closing

 Account activation

 Stop Payment

 Interaction with peoples & professional

 Issuance of Cheque Book

 Remittance

 Clearing

 Counter services

 Symbols software

 Facing stress environment

Chapter # 4 Financial Analysis of MCB

89
4.1 Horizontal Analysis

Muslim Commercial Bank Limited

Balance Sheet
As on 31st December
2007 2008 (2008-2007)/2007
Assets

Cash and balances with treasury banks 32,465,976 39,683,883 22%

Balances with other banks 6,577,017 3,807,519 -42%
Lending to financial intuitions 21,081,800 1,051,372 -95%
Investments 63,486,316 113,089,261 78%
Advances 198,239,155 218,960,598 10%
Operating fixed assets 9,054,156 16,024,123 77%
Deferred tax assets 172,373 -100%
Other assets 11,031,450 17,868,761 62%

342,108,243 410,485,517 20%

Liabilities

Bills payable 7,089,679 10,479,058 48%

Borrowings 23,943,476 39,406,831 65%
Deposits and Other accounts 257,461,838 292,098,066 13%
Sub-ordinated loans 1,597,440 479,232 -70%
Deffered tax liabilities   1,180,162
Other liabilities 11,171,496 11,722,493 5%
301,263,929 355,365,842 18%

Net assets 40,844,314 55,119,675 35%

Represented by:
Share capital 5,463,276 6,282,768 15%
Reserves 24,662,426 34,000,638 38%
Unappropriateed profit 5,530,973 5,130,750 -7%

35,656,675 45,414,156 27%

Surplus on revaluation of assets 5,187,639 9,705,519 87%

40,844,314 55,119,675 35%

Muslim Commercial Bank Limited

Profit and Loss Account
90
 As on 31st December

(2008-
2007 2008 2007)/2007

Markup/ return/ interest earned 25,778,061 31,786,595 23%

Mark up/ return/ interest expense 4,525,359 7,865,533 74%
Net mark up/ interest income 21,252,702 23,921,062 13%

Provision for dimininution H52in the value of

investment 121,197 105,269 -13%
Provision against loans and advances 1,014,540 2,959,583 192%
Bad debts written off directly 47,000 199 -100%

Net mark up/interest income after

provisions 20,069,965 20,856,011 4%

Non mark up/interest income

Fee, commission and brokerage income 2,311,235 2,634,610 14%

Dividend income 811,801 632,300 -22%
Income from dealing in foreign currencies 692,010 693,408 0%
Gain on investment 605,865 1,500,865 148%
Unrealized gain/ loss on revaluation of
investment -13,105
Other income 570,505 563,213 -1%
Total non mark up interest income 4,991,416 6,011,291 20%

Income after interest income 25,061,381 26,867,302 7%

Non mark up/interest expense

Administrative expenses 6,482,592 5,022,416 -23%

Other proposition/write off 11,411 -3,743 -133%
Other charges 66,708 540,594 710%
Total non mark up/ interest expense 6,560,711 5,559,267 -15%

Profit before taxation 18,500,670 21,308,035 15%

Taxation-Current year 5,701,443 6,442,356 13%

Prior years 593,497 -1,294,473 -318%
Defferd 63,332 894,590 1313%

Profit after taxation 12,142,398 15,265,562 26%

91
Unappropriate profit brought forward 4,990,260 5,530,973 11%

Transfer from surplus on revaluation of fixed

assets 32,166 11,855 -63%
5,022,426 5,542,828 10%
Profit available for appropriation 17,164,824 20,808,390 21%
Basic/diluted earning per share 23.4 24.3 4%

4.2 Vertical Analysis

Muslim Commercial Bank Limited

Balance Sheet
As on 31st December

2007 vertical 2008 vertical

Assets

Cash and balances with treasury

banks 32,465,976 79.5% 39,683,883 72.0%
Balances with other banks 6,577,017 16.1% 3,807,519 6.9%
Lending to financial intuitions 21,081,800 51.6% 1,051,372 1.9%
Investments 63,486,316 155.4% 113,089,261 205.2%
Advances 198,239,155 485.4% 218,960,598 397.2%
Operating fixed assets 9,054,156 22.2% 16,024,123 29.1%
Deferred tax assets 172,373 0.4%
Other assets 11,031,450 27.0% 17,868,761 32.4%

342,108,243 837.6% 410,485,517 744.7%

Liabilities

Bills payable 7,089,679 17.4% 10,479,058 19.0%

Borrowings 23,943,476 58.6% 39,406,831 71.5%
Deposits and Other accounts 257,461,838 630.3% 292,098,066 529.9%
Sub-ordinated loans 1,597,440 3.9% 479,232 0.9%
Deffered tax liabilities   1,180,162 2.1%
Other liabilities 11,171,496 27.4% 11,722,493 21.3%
301,263,929 737.6% 355,365,842 644.7%

Net assets 40,844,314 100.0% 55,119,675 100.0%

Represented by:
Share capital 5,463,276 13.4% 6,282,768 11.4%

92
Reserves 24,662,426 60.4% 34,000,638 61.7%
Unappropriateed profit 5,530,973 13.5% 5,130,750 9.3%

35,656,675 87.3% 45,414,156 82.4%

Surplus on revaluation of assets 5,187,639 12.7% 9,705,519 17.6%

40,844,314 100.0% 55,119,675 100.0%

Muslim Commercial Bank Limited

Profit and Loss Account
As on 31st December

2007 vertical 2008 vertical

Markup/ return/ interest earned 25,778,061 212.3% 31,786,595 208.2%

Mark up/ return/ interest expense 4,525,359 37.3% 7,865,533 51.5%
Net mark up/ interest income 21,252,702 175.0% 23,921,062 156.7%

Provision for dimininution H52in the value of

investment 121,197 1.0% 105,269 0.7%
Provision against loans and advances 1,014,540 8.4% 2,959,583 19.4%
Bad debts written off directly 47,000 0.4% 199 0.0013%

Net mark up/interest income after

provisions 20,069,965 165.3% 20,856,011 136.6%

Non mark up/interest income

Fee, commission and brokerage income 2,311,235 19.0% 2,634,610 17.3%

Dividend income 811,801 6.7% 632,300 4.1%
Income from dealing in foreign currencies 692,010 5.7% 693,408 4.5%
Gain on investment 605,865 5.0% 1,500,865 9.8%
Unrealized gain/ loss on revaluation of investment -13,105 -0.1%
Other income 570,505 4.7% 563,213 3.7%
Total non mark up interest income 4,991,416 41.1% 6,011,291 39.4%

Income after interest income 25,061,381 206.4% 26,867,302 176.0%

Non mark up/interest expense

Administrative expenses 6,482,592 53.4% 5,022,416 32.9%

Other proposition/write off 11,411 0.1% -3,743
Other charges 66,708 0.5% 540,594 3.5%
Total non mark up/ interest expense 6,560,711 54.0% 5,559,267 36.4%

93
Profit before taxation 18,500,670 152.4% 21,308,035 139.6%

Taxation-Current year 5,701,443 47.0% 6,442,356 42.2%

Prior years 593,497 4.9% -1,294,473 -8.5%
Defferd 63,332 0.5% 894,590 5.9%

Profit after taxation 12,142,398 100.0% 15,265,562 100.0%

Unappropriate profit brought forward 4,990,260 41.1% 5,530,973 36.2%

Transfer from surplus on revaluation of fixed

assets 32,166 0.3% 11,855 0.1%
5,022,426 41.4% 5,542,828 36.3%
Profit available for appropriation 17,164,824 141.4% 20,808,390 136.3%
Basic/diluted earning per share 23.4 24.3

4.3 RATIO ANALYSIS

4.3.1 PROFIT TO DEPOSIT RATIO

PROFIT / INTEREST
PROFIT / INTEREST TO DEPOSIT RATIO 
DEPOSIT

  2008 2007
Profit 15,265,562 12,142,398
Deposit 292,098,066 257,461,838
Ratio (%) 5.2% 4.7%

 This ratios is expressing the positive trend in 2008.

 Deposited increased and profit on deposits also increase.

4.3.2 RETURN ON AVERAGE EQUITY (ROE)

94
 NET PROFIT AFTER TAX
RETURN ON EQUITY CAPITAL RATIO 
EQUITY CAPITAL

  2008 2007
Profit After Tax 15,265,562 12,142,398
Equity Capital 45,414,156 35,656,675
Ratio (%) 33.61% 34.05%

 It is negative trend as compare to 2007.

 Equity Capital increased in 2008 but return is very low.

4.3.3 RETURN ON AVERAGE ASSETS (ROA)

RETURN ON ASSETS RATIO = NET PROFIT AFTER TAX

AVERAGE ASSETS

  2008 2007
Profit 15,265,562 12,142,398
95
 Average Assets 410,485,517 342,108,243
Ratio (%) 3.7% 3.5%

 Increasing trend in 2008 of return on assets.

 Profit margin increase in 2008 as compare to 2007

4.3.4 FIXED DEPOSIT TO TOTAL DEPOSIT RATIO

FIXED DEPOSIT TO TOTAL DEPOSITS RATIO = FIXED DEPOSIT

TOTAL DEPOSITS

  2008 2007
Fixed Deposits 43,578,126 42,589,457
Total Deposits 292,098,066 257,461,838
Ratio (%) 14.9% 16.5%

 Fixed Deposits are more than 2007.

 Total Deposits are also more than 2007. But with decreasing ratio

 It is not good trend

4.3.5 PROFIT TO ADVANCES RATIO

INTEREST / PROFIT
INTEREST / PROFIT TO ADVANCES RATIO 
ADVANCES

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   2008 2007
Profit 15,265,562 12,142,398
Advances 218,960,598 198,239,155
Ratio (%) 6.97% 6.12%

 Profits are more in 2008 as compare to 2007.

 Advances Increases in 2008

 It good trend.

4.3.6 ADMIN EXPENSES TO DEPOSIT RATIO

ADMIN EXPENSE
ADMIN EXPENSE TO DEPOSITS RATIO 
TOTAL DEPOSITS

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 2008

  2007
Admin Expenses 5,022,416 6,482,592
Deposit 292,098,066 257,461,838
Ratio (%) 1.71% 2.51%

 Admin expenses are less as compare to 2007

 Deposits increases in 2008

 Its over all good trend

Chapter # 5 SWOT ANALYSIS

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STRENGTHS

 MCB is Successive and Market oriented.

 MCB investing huge sums on HR development and training.

 Customer default rate is lower as compared to other banks.

 MCB has the largest ATM network in the country.

 Meeting the challenges of latest Technology by introducing Smart card remit express,

mobile banking etc.

 One of the major strengths of MCB is that it has very stable deposit base.

 MCB is largest private bank in Pakistan with around 1000 branches, which cover almost

every part of Pakistan.

 The bank enjoys competitive advantage over other banks in Pakistan.

 The bank enjoys competitive profitability in the industry.

 MCB has captured majority of potential customers in Pakistan.

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  MCB has the accounts of big organizations like OGDCL, PTCL, EFU, PTC etc.

WEAKNESSES

 Low motivational level

 Employees, dissatisfaction due to ill treatment and improper reward system.

 Favoritism and Nepotism in recruitment.

 High Employees Turnover.

 Decision making process is very slow.

 It is not having greater no. of branches abroad.

 Though ATM network is the largest in Pakistan, still some potential areas don’t have the

ATM.

 MCB RTC is useable only in Pakistan.

 Some management positrons needed are not professional.

 Although most of the branches are computerized now, still some important branches

don’t have computers.

 Less efficiency of SYMBOL System due to disconnectivity

Opportunities

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  Leasing sector is growing in Pakistan for the last two to three years which provides

opportunity to MCB to go ahead in this area as well.

 MCB is providing Consumer Finances at comparatively lower rates which paves a way to

grab more customers

 Financing to small/medium cottage industries will definitely increase its advances and

profitability as well.

 Islamic Trading Based Banking can enhance the business of the bank.

 Overseas Operations.

 Launch the more effective and modern banking online system.

THREATS

 Other private commercial bank with sound profitability is also a threat to MCB e.g. UBL,

Alfalah, HBL etc.

 For the last of many years, Pakistan is facing economic and political instability which is a

big threat.

 Afghan war and Iraq war has a deep effect on the economy of Pakistan, which may affect

MCB.

 Foreign banks are flourishing in field of consumer financing.

 People don’t prefer banking culture. They mostly prefer cash transactions

Chapter # 6 CONCLUSIONS

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With Cooperation of all branch members, I have been able to learn and experience many new

things related to the banking sector and the banks workings. I am able to handle the public with

respect to many different workings on many different instances and also in account opening for

customers and can handle many other tasks as well.

Finally I concluded that MCB is a good organization for a person for his long term career

workings. Overall working and environment of the bank is very comfortable and the staff is very

helpful and respectful of each other and it still maintains a professional environment.

Management of the bank is very strong.

Employees of MCB Timber Market branch work more than their working hours and all the

workings take place in a very friendly atmosphere that does not induce pressure on the person

working there. It also shows their loyalty and commitment to the organization. This branch of

MCB relatively small and has climbed its way up very quickly and all that only because of the

employee’s efforts and consideration for each other

Understanding and the effective management of the human resources is the most difficult

challenge faced not only by the bank but by all the organizations. Even though the people have

been sacrificed in the new organizational developments, it is becoming clear that the true lasting

competitive advantage comes through human resources and how they are managed. MCB seems

to not focusing on this highly critical issue as the job satisfaction level of the employees working

at MCB, was quite low.

Chapter # 7 RECOMMENDATIONS

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After doing a deep study and witnessing everything that goes on in a branch, I would then like to

make the recommendations that;

First of all, the management needs to overlook the major problems that the organization is

currently facing and then develop strategies to eradicate them. Some of the suggestions that I

would like to give at the end are:

Promotion and Mass Media Publicity

MCB Bank can improve its Marketing strategies to acquire more promotion and mass media

publicity by the use of effective channels of promotions like TV, Newspaper Advertisements. It

can also improve its magazine publication that it releases each month.

Need introduce friendly Products

In order to compete in the ever-expanding market both nationally and internationally,

introducing new and efficient products is one of its major requirements.

Centralized Structure

Centralized Structure that enables employee involvement needs to be formed.

Better Reward System

Better reward system is one of the most important requirements in order to reduce the problem of

Employee retention and improve Employee motivation.

Continuous Training of Employees

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  Creation of enhanced performance appraisal system

 Implementation of enhanced Marketing system

 Continuous lecture on better communication of staff with customers

ATM Machines Maintained

ATM machine must be maintained properly to make it more convenient for the customers and to

decrease the load of work to the employees of the bank especially in the salary days.

Staff Member

I have observe during working that there need of more staff due to pressure of work MCB should

hire more employees for better performance even any employee when take leaves Manager has

no choice to his work to other employee so this situation built high pressure.

SYMBOL SYSTEM

To make the SYMBOL system more efficient and make sure its connectivity all the time in order

to provides more convenience to customers.

Job Rotation for Employees

MCB should to make the strategy where make the job rotation of employees

Chapter # 8 Abbreviations
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MCB Muslim Commercial Bank

ATM Automatic Teller Machine

FED Federal Excise Duty

WHT with Holding Tax

TDR Term Deposit Receipts

CDR Call Deposit Receipts

PBA Personal Banking Advisor

BBA Basic Banking Account

PLS Profit and Loss A/C

TD Term Deposit

AOF Account opening Foam

AMO Account maintenance officer

KYC Know your customers

SSC Specimen Signature card

GBO General banking officer

ICO Internal control officer

CSO Customer service officer

DD Demand Draft

PO Pay Order

FTA Fund Transfer Application

CPD Central Processing Division

NIFT National Institute of Facilitation Technology

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TDR Term Deposit Receipt

RTC Rupee Travel Cheque

IBC Inward Bills for Collection

OBC Outward Bills for Collections

MO Main Office

HO Head Office

9.1 References

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

 Vision / Mission: http://mcb.com.pk/mcb/mission_vision.asp

 Corporate information: http://mcb.com.pk/mcb/corporate_information.asp

 Internship Activities:

PBO (Mr., Majid)

BOM (Mr. Shoaib)
CSO (Miss Sadaf)
Remittance (Mahmood)

 Financial Statement: Google.com.pk

 Ratios: Analysis of Financial Statement by Charles. P. Jones

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