Executive summary

The University Of Gujrat is present Bachelor degree in business Bachelor in

Commerce. They are giving the best education and offer specialization in accounting
and finance. A program of 6 weeks internship is introduced on this campus for the
students of B.Com (HON).

I determined to get up MUSLIM COMMERCIAL BANK LIMITED for my internship

because it is completing bank now a days and giving guidance to internees. So in order
to learn more this was my choice. This report is about my internship which I started on
July O1 to 14 August 2O16 in MCB bank Tower Branch G.T Road Gujranwala.MCB is
one of the top banks of Pakistan incorporated in 1947 MCB Bank has made large
contributions in building and intensification both corporate and retail banking sector in
Pakistan. MCB has a very solid foundation over 5O years in Pakistan. The Bank has the
largest network of over 12OO branches in Pakistan as well as outside Pakistan with
more than 12OOO employees and the country largest network of over 35O ATMs in the
cities nationwide and offer various technology-based products and services to its
customers.

MCB is the oldest bank in Pakistan, incorporated in 1947.It was privatized in 1991.To
succeed in international capital markets, the bank launched Global Depositary Receipts
(GDRs) in 2OO6.It was the first Pakistani bank that got its GDRs listed on the London
Stock Exchange. In 2OO8, the bank entered into a strategic partnership with May Bank,
Malaysia, which owns 2O% stake it in through May Bank International Trust (Labuan)
Berhad.

This report is an upshot of my six weeks internship in Muslim Commercial Bank of

Pakistan. MCB of Pakistan possesses an imperative and historical importance in the
banking sector of Pakistan. It always remains the center of hustles in business activities.
It always endows with the great covenant of rally round in terms of funds and services
at all epochs of its dynamism. The main purpose of the internship is to learn, by
working in the practical environment and to apply the knowledge acquired, during the
studies, in a real world scenario in order to tackle the problems. In this report, the
detailed analysis of the organization has been done and all the financial, technical,

1
managerial and strategic aspects have been evaluated to analyze the current position of
the organization.

Along with it, the background analysis, the prevailing competition analysis, the
business process analysis, and the internal environment and external environment of the
organization have been discussed and the recommendations & suggestions for the
improvement have been made wherever required. During my six weeks internship
program, I mainly worked with the following departments:

GENERAL BANKING, CREDIT, and REMITTANCES, These departments have been

discussed in detail and all the policies and procedures have been described thoroughly.
This report will provide a complete and clear image about Muslim Commercial Bank.

My Objectives

This internship offers me an incredible opportunity to gain real-world experience in the

high-stakes finance industry. For this purpose, each student is required to do the
internship in a relevant organization selected by them, for a period of six weeks
according to the instructions of Sir Ahsan Mukhtar (Commerce department)
University of Gujrat Hafiz Hayyat campus.

This internship period is also very important to gain knowledge about working pattern
of the organizations.

The primary objective of the project is to forecast or determine the actual financial
status and performance of an organization

Following are important objectives of studying the organization:

To learn about Capital Adequacy, Asset and Liability Management, Interest Rate Risk,
Liquidity, Asset Quality & Profitability of a bank.

To monitor the adequacy and effectiveness of the internal control system and Financial
Reporting Framework. Assessment of the company's financial condition through the
financial statements. Analyzing savings and investment trends in the banking sector.
To describe the impact of financial decisions on the health and functioning of the
overall organization. To examine the Innovations in customer service in banking.

2
Introduction to Report

The core objective of this report is to express my knowledge of internship done in the
Muslim commercial bank limited during the period of six weeks.

The report is about MCBL its products, field of activities and management style. In this
report, SWOT analyses are conducted so that I may able to give authenticated approach
to the problems faced by the organization. When I conducted a comparative analysis of
operations products offered and funds used I found it far better than the other
organizations. Management style is somewhat participative and its culture is friendly
and cooperative. I learned a lot about different fields and organizational behaviors in a
real world phenomenon which gave me practical knowledge of what I studied
theoretically in B.Com (Hons).

Introduction to Bank

The history of the bank is as old as human civilizations. Its origin is more likely linked
to the recognition of money as the medium of exchange. As for as the word of BANK is
concerned, the both old French word BANQUE and Italian word BANCA were used
centuries ago to mean a BENCH or MONEY CHANGER TABLE.

A sketch of the physical operation of the money changers in small shops in a

commercial district usually on the bench engaged in the exchanging foreign coins for
the local money or discounting commercial notes for the fee in order to supply
merchants with working capital.

Over the period of time, they discovered the large sum of the money were left in their
custody for long periods, which suggested the use of cash advance loans another person
for a fixed period of time and considerably high rate of interest. Thus begun the issue
and deposit banking of the modern times. Some of the enterprising goldsmiths issued

3
Cheque Books for the attraction of customers and thus another step is the evolution of
banking taken place.

I do my internship in MCB bank which is Muslim Commercial Bank.

Definitions

"A system of trading in money which is involved safeguarding deposits and making
funds available for the borrowers."

"A Bank is a financial intermediary that accepts deposits and channels those deposits
into lending activities, either directly by loaning or indirectly through capital markets. A
bank links customers that have capital deficits and customers with a capital surplus."

Why Bank Is Important

The bank plays very important role in the economic growth of a nation. The growth of
the economy is closely related to the soundness of its banking system. Although banks
do not create money but they spend and exchange money. In this way, they become the
very effective partner in the process of economic development. Modern banks are very
useful for the utilization of the resources of the country. The basic role of banks it to
encourage the habit of savings among the people and mobilize these savings for
investment purpose. The banks receive the surplus amount from the customers and
invest these savings and different schemes so they set up their own business.

Thus bank helps in capital formation. If there is no bank in any country the
concentration of wealth will remain in few hands and the great portion of the wealth in
the country will remain idle. The growth rate in few developing countries remains very
low due to blockage of capital in few hands. The bank can be taken as a heart in any
country and the funds provide by it is just like the blood in it.

Loan ability provided by the bank works as a stimulus to the producer to increase
manufacture. Banks provide transfer of payment facility, which is inexpensive, quicker,
and harmless. Many complications in the international payment have been overawed
and volume of transactions has been augmented. These amenities are very much
obliging for the growth of trade and commerce.

4
Introduction of MCB Bank

MCB is the oldest bank in Pakistan, incorporated in 1947.It was privatized in 1991.To
succeed in international capital markets, the bank launched Global Depositary Receipts
(GDRs) in 2OO6.It was the first Pakistani bank that got its GDRs listed on the London
Stock Exchange. In 2OO8, the bank entered into a strategic partnership with May Bank,
Malaysia, which owns 2O% stake it in through May Bank International Trust (Labuan).
Before the separation of Indo-Pak, the need for more Muslim banks was felt, and
Muslims having strong financial capacity were thinking to invest in this sector as well.
This was the idea which saved the ways for setting up MCB Bank Ltd known as MCB.
This was third Muslim bank in the subcontinent.

MCB was incorporated on 9th July 1947 in Calcutta in Bengal. After partition, the
Registered office of the bank was shifted to Dhaka where it commenced business from
August 1948.The bank transferred its registered/Head office from Dhaka to Karachi in
1956.In 1999, its Registered/Head office was transferred to Islamabad and Karachi
office was named as the Principal office.

The Govt. transferred a 26%management stake to a group of leading industrialists,

collectively named National Group of which Mian Muhammad Munshi is the major
stakeholder. In 1992 a further 24% was sold to the National Group. The current
shareholding structure is 5O% National Group, 25% government and 25% floated on
bourses. Now MCB is in the top five private banks of Pakistan. There are above
12OOO branches of MCB all over the country.MCB is listed on the Stock Exchange
Market and its price per share is Rs.281.The head office of MCB is at Karachi.

Vision & Mission Statement

Vision

"To be leading financial service provider, partnering with our customers for a more
prosperous and secure future."

5
 Mission

"We are the team of committed professionals, providing innovative and efficient
financial solutions to create and nurture the long-term relationship with our customers.
In doing so, we ensure that our shareholders can invest with confidence in us."

 Value
 The intrinsic values which are corner stone's of our corporate behavior are:
 Commitment
 Integrity
 Fairness
 Teamwork
 Services
 Innovation
 Excellence
 Respect

Strategic Objectives

Delivering remarkable returns to stakeholder, sustainable performance, exceeding

market and shareholder expectations.Providing values added services through
operational expansion, geography, and upgraded system.Building a corporate culture of
equality, trust, and team spirit as we remain dedicated to being a socially responsible
organization.

Awards and achievements

 2O13 The Asset Triple A: Domestic Bank Pakistan

 2O13 The Asset Triple A: Best Islamic deal
 2O13 ICAP and ICMAP: 1st BCR Award 2O12- Banking Sector
 2O13 LK Domain Registry Sri Lanka: Best Website Award
 2O13 Lanka Clear Pvt Ltd: T+1 Cheque Clearing Award
 2O12 The Asset Triple A: Best Domestic Bank Pakistan
 2O12 Euro money: Best Bank in Pakistan
 2O12 NFEH: CSR Business Excellence Award "Best Media Coverage"

6
  2O12 World Finance: Best Commercial Bank- Pakistan
 2O12 Pakistan Centre for Philanthropy: Corporate Philanthropy Award
 2O11 CFA Association Pakistan: Most stable bank of the year
 2O11 CFA Association Pakistan: Best bank of the year
 2O11 Euro money: Best bank in Pakistan
 2O11 ICAP and ICMAP: 1st BCR Award 2O1O- Banking Sector
 2O11 SAFA: Joint 2nd Runner-up for BCR 2O1O
 2O1O The Asian Banker: Strongest bank in Pakistan
 2O1O The Asian Banker: Leading Achievement Award
 2O1O MMT Award: World's Best Mobile Money Transfer Bank
 2OO9 Asiamoney: Best Domestic Bank in Pakistan
 2OO9 The Asset: Best Domestic Bank in Pakistan
 2OO8 Euromoney: Best Bank in Asia
 2OO8 Euromoney: Best Bank in Pakistan
 2OO8 Asiamoney: Best Domestic Bank in Pakistan
 2OO6 Asiamoney: Best Domestic Bank in Pakistan

Brief History Of The Organization

The history of MCB can be divided into four main Phases:

 Development Phase
 Nationalization Phase
 Privatization Phase
 Present Position of MCB

Development Phase

MCB Bank Limited 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 providing 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.

7
Thus, the bank inherits a 64 years legacy of trust of its customers and the citizens of
Pakistan. MCB Bank is not an overnight success story. It started with a share capital of
Rs 3O million which is divided into 3 million ordinary shares of Rs 1O each.

Nationalization Phase

The 196Os decade is stated as the golden era in Pakistan's economic and financial
development. The banking sector also registered noticeable growth during that period
and lent a strong helping hand to the government to achieve rapid economic growth of
the country. But in the early 197Os, this scenario changed altogether.

The separation of East Pakistan (now Bangladesh) and induction of the government led
by Zulfiqar Ali Bhutto were the most significant events of the early 7Os having far
reaching effects on the banking system.

In the wake of rapidly changing conditions of the country, the government decided to
nationalize all the commercial banks so that the nation as a whole can benefit from a
better use of resources. Consequently, the Muslim Commercial Bank was nationalized
under the Banks (Nationalization) Act, 1974 promulgated on January 1, 1974.

In the banking sector, the then government decided to retain only five major banks by
merging all the smaller banks with the large ones. As a result of this policy, the Premier
Bank was merged into Muslim Commercial Bank in 1974.

• LifePartner

• EduCare

• DreamWedding

• CapitalSure

• RetireEasy

• IncomeMax

• FutureAssure

• ProtectionPlan

8
Advisory Service

Financial and Capital Raising Advisory provides clients with financial advisory
services, commercial structuring support and access to capital resources to help
companies successfully finance their business/project.

Facility Administration

Management of creditor interests in syndicated transactions in capacities such as facility

agent, security trustee, project monitoring bank, book-runner etc.

Commercial Banking

Complementary products and services such as revolving lines of credit, trade services,
and cash management that may be bundled with our Investment Banking Products.

MCB AGRICULTURE PRODUCTS

MCB has been providing finance to the agriculture sector since 1973. With the help of
our vast branch network, specialized staff posted in the branches, multiple and
diversified product ranges, we cater to the financing requirements of the farming
community spread throughout the country and facilitate in achieving increased
productivity.

Shadabi Plan

Shadabi Plan caters the financing needs for production activities on the farm which
mainly include seed, pesticides, and fertilizers along with provisions for miscellaneous
expenses like payment of electricity & diesel bills of tube wells, maintenance expenses
for tractors and the like items as per the list of Eligible items.

Khushali Scheme

Under Khushali Scheme loans/finances are allowed for farm/ non-farm credits which
include fixed investments/working capital requirements. A number of finances
sanctioned depend upon the credit requirement and collateral.

Tractor Finance Scheme

9
To boost up the mechanized farming in the country, Tractor Finance Scheme is
introduced to offer specialized services to farmers. Under this scheme, there is no
requirement of minimum land holding because of multipurpose use of the tractor for
agriculture cum commercial. However, the repayment capacity and potential use of
tractor will be evaluated at the time of loan processing.

Jabari Scheme

Under the Jabari scheme, financing facilities for tube well, other wells, irrigation
systems of all types including sprinklers are covered.The purpose is to facilitate the
farmers in overcoming the shortage of water for cultivation/plantation since water is the
essential requirement for crops.

Grower Finance

Grower Finance is a unique way of financing registered/(bonafide) growers/farmers of

sugarcane, cotton, and rice(mills). The special characteristic is that the financing
facilities are extended to farmers against the Mill/Factory guarantee.

Fixed/floating charge may be created on the Mill's assets and the loan is disbursed
directly to the growers. This finance is short-term in nature but the tenure may extend to
eighteen months in the case of growers of sugarcane.

Dairy & Meat Plan

The plan is aimed at promoting the Dairy sector & meat production in the country. The
farmers are extended financing facilities to purchase dairy animals for milk and for the
establishment of animal fattening stations to increase meat production on commercial
line, thus enabling the farmer to create more income.

Murghbani Scheme

Murghbani Scheme covers extensively all requirements of the poultry industry with the
focus on facilitating the farmers. We offer financing facilities of all types of activities in
the value chain starting from an establishment of poultry farms infrastructure to all
requirements in the process till the final output including marketing of the same by the
farmers. Value addition process by the farmers for poultry processing is also covered
under the scheme.

10
  Ijarah
 Mudrabahah

 Types of Ijarah
o Car Ijarah
o Equipment Ijarah

OTHER SERVICES

Members

o Mian Mohammad Mansha Chairman

o Mian Raza Mansha
o S. M. Muneer
o Mian Umer Mansha
o Dr. Muhammad Yaqub
o Mr. M.U.A. Umani
o Dato' Mohammed Hussein
 Committee on Physical Planning, IT Systems and Contingency Arrangements

Members

o Dr. Muhammad Yaqub

o Mr. Aftab Ahmad Khan
o Mr. M.U.A. Umani
o Chief Financial Officer Mr. Salman Zafar Siddiqi
o Company Secretary Mr. Abdus S. Sami

 Management Committee
Members

 Imran Maqbool – Chairman

 Mr.Ali Munir
 Mr.M Ramzan

11
 Mr.Agha Saeed Khan
 Mr.Raheel Ijaz
 Mr.Usman Hassan
 Mr.Imtiaz Hassan
 Mr.Ali Mubashir Kazmi
 Mr.Muhtashim Ashai
 Mr.Laqa Sarwar
 Mr.Syed Rashid Rehman
 Mr.Salman Zafar Siddique
 Mr.M Nauman Chughtai
 Mr.Syed Mudassar Naqvi
 Mr.Kamran Rasool
 Mr.Shahid Malik

 Asset And Liabilities Committee

Members

o Imran Maqbool – Chairman

o Mr.Ali Munir
o Mr.Salman Zafar Siddiqi
o Mr.Muhtashim Ashai
o Mr.Agha Saeed Khan
o Mr.Ali Mubashir Kazmi
o Mr.M Ramzan
o Mr.Syed Rashid Rehman
o Mr.M Nauman Chughtai

 Purchase and Expense Committee

Members

 Mr.Agha Saeed Khan- Chairman

 Mr.Ali Mubashir Kazmi
 Mr.Salman Zafar Siddiqi

12
  Mr.Kamran Rasool

 Investment Committee
Members
o Imran Maqbool – Chairman
o Mr.Ali Munir
o Mr.M Ramzan
o Mr.Ali Mubashir Kazmi
o Mr.Salman Zafar Siddiqi
 Write off Committee

Members

 Mr.Imran Maqbool-Chairman
 Mr.Ali Munir
 Mr.Salman Zafar Siddiqi
 Mr.Muhtashim Ashai
 Mr.Ali Mubashir Kazmi
 Mr.Omair Safdar
 Mr.M.Nauman Chughtai
 Mr.Laqa Sarwar

IT Steering Committee

Members

 Mr.Imran Maqbool-Chairman
 Mr.Ali Munir
 Mr.Salman Zafar Siddiqi
 Mr.Imtiaz Mehmood
 Mr.Agha Saeed Khan
 Mr.Ali Mubasir Kazmi
 Mr.Muhtashim Ashari
 Mr.M Nauman Chughtai

13
 Disciplinary Action Committee

Members

 Mr.Usman Hassan-Chairman
 Mr.Agha Saeed Khan
 Mr.Raheel Ijaz
 Mr.Laqa Sarwar
 Mr.Kamran Ras

MCB Branch Network

Retail Banking Branches:

Branches No. of Branches No. of sub

branches
Karachi City 21
Karachi North 24
Karachi East 21
Karachi South 2O
Karachi Central 21
Karachi West 21
Haiderabad 36
Nawab Shah 29 1O
Makran 1O
Quetta 31
Bahawalpur 33
Rahim Yar Khan 29
Dera Ghazi Khan 28
Multan 32
Sahiwal 33

14
Lahore Central 37
Lahore East 24
Lahore West 23

Faisalabad 36
Faisalabad City 37
Haripur 28
Gujranwala 27 1
Gujrat 32
Sialkot 39 1
Jhang 29
Mianwali 33
Sargodha 29
Rawalpindi 29
Jehlum 29
Muzaffarabad 24
Kohat 31
Murdan 22 1
Peshawar 25 1
Abbottabad 26
Attock 27
Sawat 28 3
Total 119O 9
Other Banking Branches

Wholesale Banking Branches 1O

Islamic Banking 27
Privilege Banking 1O
Summary of MCB Branches

15
Retail Banking Branches 1161 9
Wholesale Banking Branches 1O
Islamic Banking 27
Privilege Banking 1O
Overseas Branches 9

MCB Branches Network

16
17
Branch Introduction

MCB TOWER BRANCH is located at G.T Road Gujranwala near Zinco cinema. I
preferred to do internship in Tower branch because it is closer to road and my house as
compared to other bank branches. That’s why more people prefer to visit this branch and
more rush in this branch other than bank branches of Gujranwala city.

I also preferred to do internship in MCB in the customer related surroundings and I also do
not have any experience to interrelate with customers. So, during this period all the staff of
the branch did guide me a lot about every matter and they did also activate me and cheer
me to do work.

I value to the University of Punjab Gujranwala campus to introduce six weeks internship
for the students to do the official work with the well experienced and well talented staff.

18
Branch Details

Branch Name MCB Tower Branch

Branch Code 1632

Address MCB Bank Ltd. Tower branch G.T Road GRW

Phone No#. O55-3252697

Fax No. O55-3252797

Tehsil Gujranwala

District Gujranwala

Province Punjab

Status Online

Email mcb1525@mcb.com.pk

Retail Banking Group

Circle Gujranwala

Region Gujranwala

Services of the Branch

Branch provide the following services:

 Accepts deposits
 Advances loans

19
  Foreign remittance payments
 Utility bills
 Locker facilities
 Online funds transfer
 Demand draft insurance and acceptance
 Pay order insurance and acceptance
 Banker’s cheque insurance and acceptance
 Clearing of all cheques
 Counter payment of other branch cheques
 Credit card facility
 ATMs facility

 NTS fee

Charges of the Services of the branch

Cheque Book Charges

Requisition for new cheque book: Charges

PLS Account Rs.18O
Current Account Rs.36O
Requisition for lost cheque book:
PLS Account Rs.385

20
 Current Account Rs.56O

ATM Charges

ATM Card Withdrawal Limit Shopping Limit Charges

(Per Day) (Per Day)
Annually

Silver Card Rs.1O,OOO Rs.25,OOO Rs.58O

Gold Card Rs.25,OOO Rs.1OO,OOORs.87O
Gold plus Rs.5O,OOO Rs.15O,OOO Rs.116O
Card
Platinum Card Rs.2OO,OOO Rs.5OO,OOO Rs.3
Lockers Facility Charges

ATM key deposit fee Rs.5OOO/-(Refundable at the time of leaving)

Lockers Type Charges Late Payment

Fee
(Annually) (Monthly)
Small Rs.696O Rs.26O
Medium Rs.929O Rs.4OO
Large Rs.1276O Rs.6OO
Clearing Charges

Types of Clearing Charges

Local Clearing O
Intercity Clearing Rs.24O

21
Bankers Cheques Charges

 For Account holder of the bank

Amount Charges
Up to Rs.5OO,OOO/- Rs.246
>Rs.5OO,OOO/-But<Rs.1OOO,OOO Rs.415
>Rs.1OOO,OOO Rs.59O

 For Non Account holder

Amount Charges
Up to Rs.2OO,OOO/- >Rs.2OO,OOO/-
Rs.359 -15%of the amount

Online Funds Transfer Charges

 For Account holder of the bank

Amount Charges
Unlimited Amount Rs.21O

 For Non Account Holder

Amount Charges
Up to Rs.5OOOO O
>Rs.5O,OO -3% of total amount

Department of MCB Bank

 Commercial Banking Group

22
 The Group focus on revenue growth and productivity while through cross sell and
optimization of branch banking platform. With its large network of branches,
Commercial Banking Group posted healthy growth by increasing their deposit
volume.

The Group improved their sales model through the introduction of a direct sales
force team and workers bankers in many branches while ongoing to strengthen their
customer services quality.
 Consumer Banking Group
The planned focus of the Group to improve cross sell, strengthen customer
proposition and improve customer service. Emphasis will be on rapid expansion of
the new initiative such as MCB freedom, Bank assurance, Investment Services and
exchange allocation Channels. In parallel, the Group will remain committed to
product development & modification of processes for continuous growth of deposits
& customer base. The Consumer Banking Group on its path of expanding the
product suite and customer base. MCB Mobile, the first of its kind, mobile payment
solution was launched enabling customers to access their accounts and make
payments using their mobile phones. With the launch of MCB Privilege, MCB also
became the first local bank in Pakistan to start a dedicated offering for the affluent
segment through three devoted Privilege Centers in Karachi, Lahore & Islamabad.

DEPARTMENTS OF MCB Tower Branch (1632)

The departments are as under:

General Banking Department

Clearing Department

Remittance Department

Credit Department

Accounts Department

Foreign Trade

23
 Internal Control Department

 Pay Order
 Demand Draft
 Mail Transfer
 Telegraphic Transfer
 Pay Slip
 Call Deposit Receipt
 Letter of Credit
 Traveler’s Cheque

Current Account (CD A/C)

Profit and loss sharing Account (PLS A/C)

Basic Bank Account (BBA A/C)

Fixed Deposit (FDR/TDR)

The main functions of these departments are

L/C dealing.

Foreign currency accounts

Foreign Remittance dealing.

Branch Structural Hierarchy

24
1st Week

25
MCB bank is divided into various departments and its procedure is divided between various
sections.Every department does their job according to their bank policies.In MCB Cash
Department is divided into a range of sections.Every department has its own head that
manage its all function.

Following departments of MCB are included.

During 1st week I was known about different departments of MCB and also come to know
about different everyday jobs of me during internship and also built a friendly relationship
with the staff.

Following are the responsibilities of me during internship

 Complete every day task provided by any employee who guides us

 Create a cooperative environment

Following department of MCB Bank tower Branch

 Clearing Department
 Remittance Department
 Accounts Department
 Credit Department
 Cash Department
 Customer Service Department

Clearing Department

MCB Bank provides services to the customers the cheques which are either than MCB.
These cheques may be within the city or outside the city.The bank collects on the behalf of
the customer through the clearing house.

o Preparation of Financial Statements for different span time

o Maintain all accounts of different department
o Calculation of profit on different schemes
o Calculation of markup on different advances
o Preparation of different types of reports for State Bank
o Daily position of Cash and every account
o Matching daily summaries if all departments with ledger

26
Customer Service Department

This department is for customer guidance on unlike banking affairs like help in filing and
forms, voucher, deposits, slips, cheques, and also guiding them to different tables and
counters and promoting bank new products and services.

2nd Week

Credit department

MCB bank is commercial institution; its purpose is to generate revenues. Its borrows
money from general public who needs money to meet their different needs. It is most
important activity of banks. It is major source of earnings. From the point of view the
generate profit advance department is important department of the bank. This department
solves the problems regarding the loans by the bank to individual and firms. Credit
management committee approved from the head office without involving the branch
control in all the advances. For this purpose a special department work that receives
applications from borrowers and further process on it to verify the requirements that are
necessary for approval. After detail investigation they decide whether to approve the loan
or not. In some cases the branch manager gives the approval of loan without his power as
prescribed by the bank higher authorities and some loan cannot approve without approval
of concern authorities. Name of credit officer is Noman Ahmed, I worked with him
approximately one week.

Basically bank approves two types of loans;

 Running finance
 Cash finance

Running finance

Running finance needs almost all business now a day. Through this way bank lend money
to the branches .The bank provides this facility on the request of consumer and allows his
customer to withdrawal more amount than account amount. Actually this is accommodation
which bank provides its customer on temporary basis that is given in the form of an
overdraft.

27
In this situation the customer is in advantage because cash finance is the major source of
financing for long time. Overdraft is just as temporary accommodation to restore the
position.

Rate of mark up on Running Finance is Kibor rate +Spread

Following are some documents which are required for obtaining secured running finance
facility:

 Written Application
 Borrower basic fact sheet
 Mortgage
 ECIB report

For running finance, Bank takes mortgage of the property in which customer can use his
property but charge of the property with bank.

Cash Finance

In cash finance , the bank transfer the whole amount in the account of the customer after
passing limit of loan, banks take pledge of the property or hypothecation of the stock in
which both use of property and charge are with the bank.

In which use of propertyand charge with the bank. It is common practice in Pakistan in
which commercial and industrial concerns borrow money from bank. The bank charge
interest on the entire amount which is transferred to the account of the customer. The
borrowers can withdraw the amount at once or when it need.

During 2nd week I completed the following task s in certain department:

 Make inspection reports

 Make call reports
 Knowledge about credit proposal process and loan process.

3rd Week

E-Remittance

E-Remittance is the foreign country workers send money to their home country. The

28
Name of officer is Mr. Sohail who gives the vouchers of E-Remittance to the customers and
refers to the cash department for payment.

Every customer who comes to the bank for collecting must have the Number and CNIC and
also the copy of CNIC is required.

Following are the reasons for refusal of E-Remittance payment by the banker:

 If original customer to whom money is send is not come for collection.

 If original customer is come but have no original CNIC.
 If CNIC has expired.
 If spelling of customer name is wrong.
 If their payment is not send to the bank.
 If their payment is send to other bank.

4th& 5th Week

Account Opening &Customer Service Department

Ispend my 4th and 5th week in account opening and customer service department under the
supervision of Miss Amna.

While account opening procedure, following documents are signed to the customer:

 Account opening form

 Specimen signature card
 Undertakings of unclaimed deposits
 Undertakings for difference in signature on CNIC and account
 Cheque book requisition
 ATM card requisition
 Know your customer

Account Opening Form

Account opening form includes the following information:

Type of account

29
  Individual Account
 Single Account
 Joint Account

 Business Account
 Sole proprietorship
 Partnership
 Joint Stock Company
 Name of account
 Current account
 PLS Saving account

 Basic Banking Account

 Currencies of Account
 PKR
 USD
 EURO
 OTHER

 Personal information of the customer

 Name
 Father name
 Address
 CNIC

Undertaking for difference in signature on CNIC and Account

This form is also signed at the time of account opening procedure by those customers who
want to change your signature from your CNIC.

30
Cheque Book Requisition

At the time of account opening cheque book requisition is also signed by the customer so
that he could use the cheque to withdraw the money from the account.

ATM card requisition

At the time of account opening ATM card requisition is also signed by the customer so that
he could use to withdraw the money from the account through ATM machine.

Documents required by the bank from the customer

 Documentation in case of individual account

 Attested photocopy of CNIC

 Last month pay slip from salaried person
 Two recent passport size photograph from illiterate person

 Documentation in case of sole proprietorship account

 Application to open an account on the official letter head

 National tax number
 List of official authorized to operate the account and their specimen
signature
Customer Service Department

This department is for customer guidance on different banking affairs like help in filling the
forms, vouchers, deposits, slips, cheques, and also guiding them to different tables and
counters and promoting bank new products and services.

Task completed by me in account opening and customer service department

o Filled cheques
o Filled deposit slips
o Filled transfer fund applications
o Stamps apply on account opening forms
o Filled visa debit card applications

31
 o Filled account opening form
o Make entries of ATM card
o Filled credit card bill slips
o Filled dormant account application
o Scan account opening form
o Apply stamps on account opening form
o Checking account balance
o Attend call of customers
o Filled pay order and demand draft slips
o Application form for change of address, phone number etc.

6th Week

Clearing Department

The process of clearing is quite difficult under the supervision of Ms.Anam. Clearing
department is to provide services to its customer, the cheques which are other than
MCB.These cheque may be within city or outside city. The bank collects on behalf of its
customer.

 Local clearing.
 Intercity clearing.

In local, the may be post in the account of customer in the same day but in case of intercity
clearing , cheque are posted in the account of customer within two days. The cheque
collected by the bank should be send to NIFT. NIFT present the cheque at morning
9am.Cheque clearance report is presented at 11:5O am and it is posted in the customer
account.

.When cheques clear that become the cause of inflow of cash that increase the
balance in the account of MCB.
Inward clearing
The cheque which is drawn by other banks on MCB is known as inward clearing for
MCB.This process is completed through clearing house. When cheques clear that
become the cause of outflow of cash that reduce the balance in the account of MCB.

32
33
Financial Analysis

Ratio analysis is important technique for financial analysis of business. It clarifies why the
financial statements showing changing than previous year. Ratio tells the whole story
change in the financial position. Ratio analysis of financial statements can compare with
previous year and also with competitors to know our current financial position.Ratios point
out factors that positively and negatively affect on the organization .Ratio helps the
company how it can perform better than existing position.

Ratio tells which firm strong and weak in the industry. Ratio analysis also point out factors
which cause bankruptcy of the company. Ratio help in planning and forcasting.Through
ratio analysis the company can conduct comparison of different departments. Ratio shows
the company performance is measure and lending decision in case of bankers. Ratios
explain how much risk involves in the investment and how much risk is involved in our
business.

For this purpose, two types of analysis are conduct:

 Specialized analysis
 General analysis

Specialized ratios

Specialized analysis is normally done financial institution to analyze their position and for
the purpose to compare with other institution.

a) Earning asset to total assets

Total Assets 2O13 2O14

3O,428,817 394827495
353,O25,232 353,O25,232

34
 86.19% 86.36%

Analysis:

This ratio shows how effectively bank puts its assets in to work. This ratio has been
increased in 2O14 to 86.36% from 86.19% in 2O13 is favorable for bank and acceptable as
the bank earning has been increased and its total assets has also increased. More earning
assets mean more revenues and it means more efficient working which is favorable for the
bank. But this increase is not sufficient to complete in the modern era. The bank should
more effectively convert its assets in earning assets.

B) Return on earning asset.

Earning Asset. 2O13 2O14

31,642×1OO 32,228×1OO
663,33O 718,99O
=4.77% =4.48%

Analysis

It is the profitability ratio of the bank. It shows how much the bank earns the pretax income
from its earning assets. The ratio has been decreased to 4.48% in 2O14 from 4.77% in
2O13.it is unfavorable for the bank as it shows less efficient utilization of earning assets.
And it shows the efficiency of the management that how management decides to avail the
maximum benefit from the available resources. The bank should more effectively use its
available resources for the purpose to increase its profitability.

C)Equity capital to total assets=

Equity capital

Equity Capital 2O13 2O14

8,13O,711 12,6O2,6O2
394,827,495 353,O25,323

35
Analysis:

This ratio also shows two aspects like it shows the percentage of shareholder equity in total
assets of the bank and remaining percentage shows total debts of the bank. This ratio shows
increasing an asset in 2O14 is 3.57 from 2.O6 in 2O13.increasing trend in equity capital to
total assets is favorable for the bank because due to this bank solvency will increase and
also increase total assets of the company.

D)Deposits time capital = Avg. deposits

Equity capital

2O13 =3O6,937,216 8,13O,711 =37.73 times

2O14 =335,241,O27 12,6O2,6O2 =26.6O times

Analysis:

It is two folded ratio, it is both trend favorable increased will show the efficiency of the
bank and the decreasing trend will show the good solvency of the bank .it is a debt to equity
ratio of the bank. As the deposits are money of creditors of the bank these are debts of the
bank and the capital being the equity of the bank.The ratio has been decreased to 26.6O
times in 2O14 from 37.73 in 2O13. This is not favorable for the bank as it shows that more
than half of the funds invested for creating revenues are provided by creditors.

General analysis

Ratio Analysis

All values are in (, OOO)

A. Liquidity Ratio

Liquidity ratio measures the firm’s ability to meet its current obligation.

2O14
Current assets

36
=26,1O4,822+9,O57,747+2,5O3,2O7+165,863,237+163,556,632+8,567,4O1
+2,97,285
=375,95O,331
2O13
=24,435,38O+8,863,586+6,319,474+145,378,148+143,726,962+8,841,O91
=337,564,641

Current liabilities
2O14
= 5,687,542+24,545,879+335,241,O27+399,44O+6,629,759
=376,O98,6O7
2O13
= 3,7OO,156+8,372,617+3O6,937,216+6,987,3OO+71,229+7,386,662
=333,455,18O

Current ratio=

= Current assets

Current liabilities

2O14 =375,95O,331 376,O98,6O7 =O.9996

2O13 = 337,564,641 333,455,18O =1.O123

Acid-test Ratio

= Current assets – Advances

Current liabilities

2O14 =375,95O,331- 376,O98,6O7 =O.5586

165,863,237
2O13 =337,564,641- 333,455,18O =1.O119
1,45,378
Working capital= Current assets-Current liabilities

37
2O14 =375,95O,331- = -148276
376,O98,6O7
2O13 =337,564,641- =41O9461
333,455,18O

TIME INTEREST EARNED =

DEBIT

INTEREST EXPENSE

2O14 =11,1O3,376 95,328,88 =1.1647

2O13 =2,687,86O 9,116,9O5 =O.2948

DEBT RATIO=

=TOTAL DEBTS

TOTAL ASSETS

2O14 =24,545,879 394,827,495 =O.O621

2O13 =8,372,617 353,O25,232 =O.O237

DEBT TO EQUITY RATIO=

= TOTAL DEBT

TOTAL EQUITY

2O13 =24,545,879 12,6O2,6O2 =1.9476

2O14 =8,37,261 8,13O,711 =O.1O29

B. Profitability Ratio

Net profit ratio =

= Net profit×1OO

Sales

38
2O13 5,479,895×1OO 2,79,6O5,O5 = -1.959%
2O14 =1,262,694×1OO 3,24,O21,87 = 3.896%

Operating income = DEBIT×1OO

Sales

2O13 =1,O92,385 27,96O,5O5 =O.O39O

2O14 =1O,857,912 32,4O2,187 =O.335O

Return on investment =

= Net income after tax

Total assets

2O14 = 5,47,989×1OO 394,827,495 = 1.38 %

2O13 =1,262,694×1OO 353,O25,23O = O.3576%

RETURN ON TOTAL EQUITY=

= NET INCOME

Total Equity

2O14 2O13
= 45,935,591× 1OO = 2,564,852×1OO
26,O2,345 8,13O,711
= 36.44 % = 31.54%

Total assets Turnover ratio

=Interest earned
Total assets

39
 2O13 2O14
=4,117,366×1OO =35,984,44×1OO
353,O25,232 394,827,495
=O.O116 =O.OO911
FIXED ASSETS TURNOVER

= INTEREST EARNED

FIXED ASSETS

2O14 =35,984,44 85,674,O1 =O.42OO

2O13 =41,173,66 88,41O,91 =O.4657

Horizontal Analysis of Balance Sheet

Assets 2O
Cash and due from Banks 21
Investment Seurities 23
Loans and advance to Customers 4O
Investment in assoiate companies 86
Bank premises and Equipment 17

Customer's liability undre acceptance 36

Other Assets 64
Total Assets 66
Liabilities and Equity
Liabilities:
Cudtomer's deposit 56
Due to Banks 23
Acceptance Outstanding 36
Accrued interest payable 18
Current profit tax liabilities 38
Deferred tax liability 3O
Provisions 79
Other liabilities 73
Total Liabilities 57
Equity
Share Capital 51
Fair value of reserve investment O
Other Reserve 2O
Retained Earnings 45
Total Equity 71

40
Minority interest 11
Total Liabilities and Equity 1O

41
\

42
z

43
Horizontal analysis of Income Statement

2O14 2O13 2O12

Interest Income 323648 1O4.53% 318391 1O3.OO% 3O9628 1OO%
Interest Expenses 21244 1O7.42% 19947 1OO.86% 19777 1OO%
Net Inetrest Income 3O24O4 1O4.43% 298444 1O3.O6% 289851 1OO%
Fee and Commission income 192O79 121.67% 82735 52.41% 157865 1OO%
Fee and Commission Expenses 67839 155.7O% 63626 146.O4% 43569 1OO%
Net Fee and Commission Income 12424O 1O8.7O% 1191O9 1O4.21% 114296 1OO%
Income from Foreign Exchange 5O199 1O3.87% 49217 1O1.84% 48327 1OO%
transactions
Income from Investment Securities 177 2.45% 9538 132.23% 7213 1OO%
Operating Income 477O2O 1O3.77% 4763O8 1O3.62% 459687 1OO%
Salaries and other employee Expenses 187199 1O1.75% 182551 99.23% 183975 1OO%
Net impairment and Advances 21122 O.OO% 13476 122.15% 11O32 1OO%
Other operating Expenses 65268 75.14% 64985 74.82% 86857 1OO%
Accupancy Expenses 24177 O.OO% 24311 O.OO% O 1OO%
Operating Expenses 297766 1O5.64% 285323 1O1.23% 281864 1OO%
Net Result from Operations 179254 1OO.8O% 19O985 1O7.4O% 177823 1OO%
Net income /(loss) from Associates -265 - 2885 2885% 1OO 1OO%

265.OO%

Net Result before tax 178989 1OO.6O% 19387O 1O8.96% 177923 1OO%
Profit Tax 38676 112.39% 47295 138.1O% 34247 1OO%
Net Result after tax 14O313 97.66% 146575 1O2.O2% 134676 1OO%

Vertical Analysis of Income

Statement

2O14 2O13 2O12

Interest Income 323648 1OO% 318391 1OO% 3O9628 1OO%
Interest Expenses 21244 6.56% 19947 6.26% 19777 6.39%
Net Inetrest Income 3O24O4 93.44% 298444 93.74% 289851 93.61%
Fee and Commission income 192O79 59.35% 82735 25.99% 157865 5O.99%
Fee and Commission Expenses 67839 2O.96% 63626 19.98% 43569 14.O7%
Net Fee and Commission Income 12424O 38.39% 1191O9 37.41% 114296 36.91%

Income from Foreign Exchange 5O199 15.51% 49217 15.46% 48327 15.61%
transactions

44
Income from Investment Securities 177 O.O5% 9538 3.OO% 7213 2.33%
Operating Income 477O2O 147.39% 4763O8 149.6O% 459687 148.46%
Salaries and other employee Expenses 187199 57.84% 182551 57.34% 183975 59.42%
Net impairment and Advances 21122 6.53% 13476 4.23% 11O32 3.56%
Other operating Expenses 65268 2O.17% 64985 2O.41% 86857 28.O5%
Accupancy Expenses 24177 7.47% 24311 7.64% O O.OO%

Operating Expenses 297766 92.OO% 285323 89.61% 281864 91.O3%

Net Result from Operations 179254 55.39% 19O985 59.98% 177823 57.43%
Net income /(loss) from Associates -265 -O.O8% 2885 O.19% 1OO O.O3%
Net Result before tax 178989 55.3O% 19387O 6O.89% 177923 57.46%
Profit Tax 38676 11.95% 47295 14.85% 34247 11.O6%
Net Result after tax 14O313 43.35% 146575 46.O4% 134676 46.4O%

Vertical Analysis of Balance Sheet

2O14 2O13
Assets
Cash and due from banks 21O539O 31.59% 1663O83 26.91%
Investment Securities 235982 3.54% 224O62 3.63%
Loans and advance to customers 4O75961 61.15% 4O39288 65.36%
Investment in associate companies 867 O.O1% 763 O.O1%
Associate companies held for sale O.OO% O.OO%
Bank premises and equipment 178957 2.68% 179383 2.9O%
Customer's liability under acceptance 3655 O.O5% 456O O.O7%
Other Assets 64727 O.97% 69111 1.12%
Total Assets 6665539 1OO.OO% 618O25O 1OO.OO%
Liabilities and Equity
Liabilities:
Customer's deposit 567O196 85.O7% 521O446 84.31%
Due to other banks 23O79 O.35% 333O8 O.54%
Acceptances outstanding 3655 O.O5% 456O O.O7%
Deferred tax liability 3O544 O.46% 5982 O.1O%
Profit tax payable O.OO% 429O7 O.69%
Accrued interest payable 18557 O.28% 17413 O.28%
Provisions 79952 1.2O% 698O8 1.13%
Other Liabilities 73588 1.1O% 89329 1.45%
Total Liabilities 5937597 89.O8% 5473753 88.57%
Equity
Issued capital 51OOO O.77% 51OOO O.83%
Fair value reserve investment O O.OO% O O.OO%

45
 Other Reserves 2O6937 3.1O% 19O661 3.O9%
Retained Earnings 458579 6.88% 452592 7.32%
Total Equity 716516 1O.75% 694253 11.23%
Minority Interest 11426 O.17% 12244 O.2O%
Total Liabilities and Equity 6665539 1OO.OO% 618O25O 1OO.OO%

Lack of parking area

MCB have no parking space for vehicles to park them.

Favoritism

Some employees do not treat equally with all customers. They do the work of the
customers on the basis of favoritism.

OPPOURTUNITIES

Improve in technology

Excessive branch network

MCB also has an opportunity to increase branches in foreign country. This step will expand
the business and also increase business in new countries and in different locations.

High investment

MCB invest in investment banking to earn return.MCB has poorly commercial banking if
bank increase investment banking, it will increase profitability of the bank.

Lack of Govt. policies stability

In Pakistan, Govt. policies are not stable. These policies are changing day by day, so banks
have to follow these policies. The bank has to work within regulatory framework of the
country.

High inflation

From many years the saving of the country is going to decrease because the high inflation
in the country. The prices of the products increase with inflation. Inflation also becomes the
cause of unemployed in the country. But the rate of mark up paid on these deposits is not

46
increasing proportionately. That is threat for banks in near future the saving of the bank will
be decrease if the inflation increase with the same rate.

Improvement in Return on Assets

The target rate of return on assets (ROA) of commercial banks reflects the effectiveness
and efficiency of the use of resources is the embodiment of its operating efficiency and
management level of the important comprehensive index. Emphasis on return on assets, and
continuously improve the return on assets and achieve an operating profit maximization
should be the primary objective of Muslim commercial bank.

Strong ROE
A strong ROE is a solid signal that management is doing a good job of generating returns
for shareholders' investments. Active capital management activities will provide better
ROEs. Bank that manages larger reserves due to recent or future investment projects will
stymie their ROEs.
Research Department
MCB Islamic Banking needs a research, which should be engaged in evaluating and
interpreting the ways in which the bank can flourish more and more.

Agriculture loans facility

In Agriculture loan Sector, MCB mainly serving in Punjab province. Agriculture loans
facility should be provided to all other provinces of Pakistan as well.

Bibliography
All of the references and sources from where the data gathered for this report are mentioned
Herewith for your kind concern.

Organization
Annual Reports of MCB Bank Limited of Pakistan.
MCB Credit Policy
http://www.mcb.com.pk.

Web portals
http://www.sbp.com.pk

47
http://www.ibp.org
http://www.thebankers.com
http://www.finance.gov.pk

Book
Practice and Law of Banking in Pakistan by Dr. Asrar H. Siddiqui.
Fundamentals of Financial Management by James C. Van Horne & John M. Wachowicz,
JR.

Annexs

ORGANIZATIONAL STRUCTURE:

48
MCB BRANCH NETWORK

49
Branch Structure Hierarchy

50
51