MCB Bank

Evolution of Banking
The word 'Bank' is said to have been derived from the words
Bancus or Banque or Bank. This history of banking is traced to as early
as 2000 B.C. The priests in Greece used to keep money and valuables
of the people in temples. These priests thus acted as financial agents.
The origin of banking is also traced to early goldsmiths. They used to
keep strong safes for storing the money and valuables of the people.
The persons who had surplus money found it safe and convenient of
deposit their valuables with them. The first stage in the development of
modern banking, thus, was the accepting of deposits of cash from those
persons who had surplus money with them.
The goldsmiths used to issue receipts for the money deposited
with them. These receipts began to pass from hand to hand in
settlement of transactions because people had confidence in the
integrity and solvency of goldsmiths. When it was found that these
receipts were fully accepted in payment of debts; then the receipts were
drawn in such a way that it entitled any holder to claim the specified
amount of money from goldsmiths. A depositor who is to make the
payments may now get the money in cash from goldsmiths or pay over
the receipt to the creditor. These receipts were the earlier bank notes.
The second stage in the development of banking thus was the issue of
bank notes.
The goldsmiths soon discovered that all the people who had
deposited money with them do not come to withdraw their funds in
cash. They found that only a few persons presented the receipts for
encashment during a given period of time. They also found that most of
the money deposited with them was lying idle. At the same time; they
found that they were being constantly requested for loan on good
security. They thought it profitable to lend at least some of the money
deposited with them to the needy persons. This proved quite a
profitable business for the_ goldsmiths. They instead of charging safe
keeping charges from the depositors began to give them interest on the
money deposited with them. This was the third stage in the
development of banking.
DEFINITION OF A BANK:
The term 'bank' is being used for a long time, yet it has no precise
definition. The basic reason is that the commercial banks perform not
just one but many types of functions. The term bank has been defined
differently by different authors. Some are as follows:
According to Crowther,
www.hailianz.com
Muslim Commercial Bank Limited Internship Report 6
"Bank is a dealer in debts—his own and of other people."
According to G.W. Gilbert,

"A banker is a dealer in capital or more properly a dealer in
money. He is an intermediate party between the borrower and the
lender. He borrows from one party and lends to another."
According to Banking companies ordinance 1962
u/s3(B) of Banking Companies Ordinance 1962 "Banker means

person transacting the business of accepting for the purpose of lending
or investment, of deposits of money from the public, repayable on
demand or otherwise and withdraw able by cheque, draft, order or
otherwise and includes any Post Office Savings Bank."
Hailey College Of Commerce

Commercial Banking In
Pakistan
The interesting point which I observed during the span of mine
internship was the historical background of Banking & Financial sector
which is the one in which great improvement and growth is observed
since the formation of Pakistan. For studying the growth of this sector
we can divide it into three stages, which are as follows:
a) Pre-Nationalization Era
b) Nationalization Era
c) Post Nationalization Era
A) PRE NATIONALIZATION PERIOD:

There were only two Muslim banks in Indo Pak before partition,
they were;
Habib Bank Ltd. (estd. in 1941 at Bombay) & Australia Bank Ltd.
(estd. In 1944 at Lahore). All other banks, at that time, were either
owned by Hindus or Foreigners.
At the time of partition there were 631 bank branches in area
which came under Pakistani control. But due to blood shed and violence
at large scale, mostly branches were closed and the disparity can be
assessed from the fact that on July 1948 there were 195 branches with
deposits of Rs.88 crore (880 million) only. Also a factor lagging in
Pakistani industry was a central bank of its own, by that time Reserve
Bank of India was acting as central bank for both countries and same
currency notes were used in both territories. But Reserve Bank of India
was biased and Set down Pakistan on many occasions such as the
issue of funds transfer etc.
In this period drastic steps were taken in government sector for
the improvement of overall position. The private sector also responded
to these changes and some very positive changes were observed.
Some of the steps taken by the government in this regard were as
under:
1) Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.
2) Setting up of National Bank of Pakistan in November, 1949 to control
the 'jute' export in East Pakistan and to act as agent of SBP.
3) Larger powers were given to SBP through SBP Act (1956) for
controlling purposes.
4) Banking Companies Ordinance 1962 for protection and guidance to

banks.
5) Establishment of specialized banks, such as ADBP (1952);
a) HBFC (Nov, 1952);
b) P1CIC (Oct, 1957)
c) IDBP (Aug. 1961);
d) NDFC (Jan, 1973).
These were the steps, which built a strong banking sector in Pakistan.
This is also obvious from the facts that by 1973 there were almost 10 foreign
banks were working in Pakistan and all over deposit position was around
Rs.2300 crore (23,000 million). A bird eye view of 5 top banks was as given
below:
BANK POSITION IN 1973
BANK NO. OF BRANCHES DEPOSITS

HBL 667 6,160
NBP 579 5,660
UBL 497 5,670
MCB 506 1,640
ABL 145 570
B) NATIONALIZATION PERIOD
On January 01, 1974 all Pakistani banks were nationalized through
Nationalization Act 1974. Under this law all Pakistani banks became a
public property. All small banks were merged in bigger banks to create
5 major Pakistani banks Pakistani banks. These banks were to control
by Pakistan Banking Council. There are still controversies about this act
of government as whether it contributed in success of failure of banks.
However the major changes after nationalization were as follows:
 Working of banks was extended to under developed
areas.
 Market expansion for credit and deposits.
 Decrease in service level of bank officers.
 Decrease in profitability as well.
However the effect of expansion was enormous and it can also
be depicted with the help of table 2 which shows the deposit & branch
positions of different nationalized banks.

BANK POSITION IN 1992
Bank No. of Branches Deposits (Rs. In Millions)

HBL 1926 153,431
NBP 1448 128,679
UBL 1684 87,482
MCB 1288 50,013
ABL 750 33,757
TOTAL 7096 453,362
C) POST NATIONALIZATION ERA

In 1990 the government decided to denationalize all the
nationalized institutes. Some was also suggested in banking sector. For
this purpose, amendments were made to Nationalization Act 1974 and
two nationalized banks were privatized. Along with this a permission to
open banks in private sector was also granted. The rules regarding
establishment of new banks and for incoming foreign banks were also
Relaxed.
The-three privatized banks are;
a) MCB taken up by a private group in April, 1991
b) ABL taken up by its own employees in September, 1991.1
c) UBL taken up by UAE party in 2002.
After these changes a large number of private and foreign banks
started their operations in Pakistan and the present status can be seen
from the following figures:
SCHEDULE BANKS
Category No. of Banks
Nationalized Commercial Banks 3
Private / Privatized Commerce Banks 18
Public Sector Specialized Banks 4
Foreign Banks 19
Total Schedule Banks 44
In addition to above mentioned scheduled banks there are 7
Development Financial Institutes, 14 Investment Banks and Modarbah
Companies.
1
UBL to her uply a UAE party in 2002.

Muslim Commercial Bank Ltd.

(Historical Background)
Now let us discuss the historical background of Muslim
Commercial Bank Limited. Before 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 paved the way for setting up Muslim Commercial Bank Ltd known
as MCB. This was the third Muslim bank in the subcontinent.
HISTORY
This bank was incorporated under companies’ act 1913 on 9th
July, 1947 (just before partition) at Calcutta. But due to changing
scenario of the region, the certificate of incorporation was issued on 17th
August, 1948 with a delay of almost 1 year; the certificate was issued at
Chitagong. The first Head office of the company was established at
Dacca and Mr. G.M. Adamjee was appointed its first chairman. It was
incorporated with an authorized capital of Rs. 15 million.
After some time the registered office of the company was shifted
to Karachi on August 23rd, 1956 through a special resolution, now
recently the Head office of MCB has been transferred to Islamabad in
July, 1999 and now Head office is termed as Principle Office.
This institute was nationalized with other on January 1st, 1974. At
that time it had 506 branches and deposits amounting to Rs. 1,640
million. Although. MCB has a reputation of a conservative bank but
nationalization also left its effects on this institute as well and by end of
year 1991 in which it was privatized the total number of branches were
1.287 and deposits amounting to as high as Rs. 35,029 million.
When privatization policy was announced in 1990, MCB was the
first to be privatized upon recommendations of World Bank and IMF.
The reason for this choice was the better profitability condition of the
organization and less risky credit portfolio which made'' it a good choice
for investors. On April 8th, 1991, the management control was handed
over to National Group (the highest bidders). Initially only 26% of shares
were sold to private sector at Rs. 56 per share.
DEVELOPMENTS
After privatization, the growth in every department of the bank
has been observed. Following are some key developments:
1) Launching of different deposit schemes to increase saving level.
2) Increased participation on foreign trade.

3) Betterment of branches and staff service level.

4) Introduction of Rupee Traveler Cheques & Photo Credit Card for the
first time in Pakistan.
5) Extended use of information technology which is evident from the
fact that there are 768 fully automated branches, 243 online
branches (integrated networking), 151 ATMS in 27 cities nation wide
and a M.C.B continuously innovate new product.

Management of the
organization
MANAGEMENT OF THE BANK
• Mian Mohammad Mansha Chairman

• S.M. Muneer Vice Chairman
• Mohammad Aftab Manzoor President & Chief Executive
• Tariq Rafi Director

• Sheikh Mukhtar Ahmed Director
• Mohammad Arshad Director
• Shahzad Saleem Director
• Raza Mansha Director
• Sarmad Amin Director
• Mian Umer Mansha Director
AUDIT COMMITTEE
• Mian Mohammad Mansha Chairman

• Shaikh Mukhtar Ahmed Member
• Shahzad Saleem Member
CHIEF FINANCIAL OFFICER
• Ali Amin
COMPANY SECRETARY
• Tameez-ul-haque

ORGANIZATIONAL STRUCTURE
As MCB is a banking company listed in stock exchange therefore
it follows all the legalities which are imposed by concerned statutes Mr.
Muhammad 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.
Operational Management of the bank is being handled by a team
of 10 professionals. This team is also headed by Mr. Muhammad
Mansha. The different operational departments are Consumer Banking
& IT div; Financial & Inter branch div; Banking operations div; HR &
Legal div; financial control & Audit div; Credit management div;
Commercial Banking div; Corporate Banking div; Treasury management
& FX Group and lastly Special Assets Management (SAM) Group.
For effective handling of branches, it has been categorized into
three segments with different people handling each category. These
categories are:
a) Corporate Banking
b) Commercial Banking
c) Consumer Banking
A) CORPORATE BANKING:
These are branches which have an exposure of over Rs. 100
million. Usually includes multinational & public sector companies.
B) COMMERCIAL BANKING;
The branches which has a credit exposure of less than Rs. 100
million but having a credit portfolio of more than Rs. 20 million
(excluding staff loans)
Usually branches in large markets and commercial areas come under
this category.
C) CONSUMER BANKING
These are the branches which have exposure up to Rs. 20 million
and these include all the branches which are neither corporate nor
commercial branches.
Recently the organizational structure was re-designed as follows:
Province wise branches
Corporate Consumer Commercial

20 branches 637 branches 383 branches

NUMBER OF BRANCHES IN DIFFERENT LOCALITIES
Punjab 632
Sindh 232
NWFP 123
Blochistan 34
Azad Kashmir 19
Domestic 1040
Overseas 4
EPZ 1
Total 1045
Sri Lanka 3
Bahrain 1
Furthermore, the bank has some proposals under consideration to open

more brances in some European countries and as well as in japan &
china

Hierarchy Of Management
GRADES OF BANK
SEVP
ESEVP
SVP
VP
AVP
GRADE-1
GRADE-2
GRADE-3
ASSISTANT
Clerical staff Non-clerical staff
Cashier Messenger
Technical Staff Dispatch Rider

Mediocre Level Management
The organization chart within a department and in different offices is as

follows:
Divisional Heads ………..…………………… Head Office
Regional Head (EVP) ………..…………………… Regional Office
Zonal Head (VP) ………..…………………… Zonal Office
Branch Manager ………..…………………… Branch
(VP, AVP, GRADE 1, 2, 3)

Fields of Activities of MCB

The purpose of banks is to provide some services to the general
public. And for this purpose different banks provide different services to
the people in different forms. The Muslim Commercial Bank (MCB) is a
commercial bank, in modern time commercial banks play a very
important role and their functions are manifold. The main functions and
services which Muslim Commercial Bank Limited provides to different
peoples are as follows.
1) Open Different accounts for different peoples

2) Accepting various types of deposits
3) Accepting various types of deposits
4) Granting loans & advances
5) Undertaking of agency services and also general utility functions,
few of those are as under:
a) Collecting cheques and bill of exchange for the customers.
b) Collecting interest due, dividend, pensions and other sum due
to customers.
c) Transfer of money from place to place.
d) Acting an executor, trustee or attorney for the customers.
‘Providing safe custody and facilities to keep jewellery,
documents or securities.
e) Issuing of travelers cheques and letters of credit to give credit
facilities to travel.
f) Accepting bills of exchange on behalf of customers.
g) Purchasing shares for the customers.
h) Undertaking foreign exchange business.
i) Furnishing trade information and tendering advice to
customers.
For proper functioning of branches and the over all bank has
been divided in different departments. These departments handle
different jobs so that division of work is there for improvement of
functions and also it is easy to control the situation. The general division
in a branch is as follows:
1) Cash department
2) Deposit department
3) Advances & credit department
4) Foreign exchange department
Technology department (new addition in order to cop with the
growing needs of day to day technology requirements)

Cash Department
The following books are maintained in the Cash Department:
1. Receiving Cash Book
2. Paying Cash Book
3. Token Book
4. Scroll Book
5. Cash Balance Book
When cash is received in counter, it is entered in the Scroll Book
and Receiving Cashier Book. At the close of the day, these are
balanced with each other.
When the cheque or any negotiable instrument is presented at
counter for payment, it is entered in the token book and token is issued
to the customer. The token clerk and the Cashier make entries in the
paying book and payment is made to payee. At the close of day, the
Token Book and Paying Cashier Book are balanced.
The consolidated figure of receipt and payment of cash is entered
in the cash balance book and drawn closing balance of cash.
Opening Balance + Receipts - Payments = closing Balance.
This is very important department because cash is the most liquid
asset and mostly frauds are made in this department, therefore, extra
care is taken in this department and nobody is allowed to enter or leave
the area freely. Mostly, cash area is grilled and its door is under
supervision of the head of that department. All the books maintained in
this department are checked by an officer.

Deposit Department
Bank deals in money and they are merely mobilizing funds within
the economy. They borrow from one person and lend to another, the
difference between the rate of borrowing lending forms their spread or
gross profit. Therefore we can rightly state that deposits are the blood of
the bank which causes the body of an institution to get to work. These
deposits are liability of the bank so from point of view of bank we can
refer to them as liabilities.
The total deposits of MCB are growing since its inauguration but
after privatization there is a sharp incline in over all deposits of the
bank. The increase in deposits is also a cause of increase on total
number of accounts; bank has progressed in both aspects.
TYPES OF DEPOSITS
Deposits can be segregated on two bases, one is the duration in
which there funds are expected to be with the bank and second is the
cost of getting these funds. So divide deposits in two classes according
to duration of deposits i.e.
1) Time deposits / liabilities
2) Demand deposits / liabilities
And on the basis of the cost to acquire these funds, a deposit
can be classified as any one of following four, High Cost Medium
Cost, Low Cost No Cost.
Banks has different kinds of deposit schemes in order to induce
deposits. These schemes are a mixture of the above mentioned two
types of deposits with an addition of different services & requirements
such as minimum balance' requirement, mode of transaction, basis for
calculation of profit, deductions, additional benefits, eligibility for
different groups.
In the similar fashion, MCB has a large variety of deposit
schemes and some of them are as follows:
CURRENT A/C (CD):

In this type of accounts the client is allowed to deposit or
withdraw money as and when he likes. He may, thus, deposits or
withdraws money several times in a day if he likes. There is also no
restriction of amount to be deposited or withdrawn. However, there is
requirement of minimum balance maintenance of Rs. 1000/-. Usually
this type of account is opened by the businessmen. No profit is paid by
the bank and no service charges are deducted by the bank on current

deposits account. These types of deposits are also exempt from

compulsory deduction of Zakat.
PLS SAVING BANK A/C (SA):

This type of account is for those persons who want to make small
savings'. This type of account is opened with a minimum deposit of Rs.
1000/-. Under this scheme deposits can be made only up to a-costing
amount and withdrawals are allowed twice a week or 8 times a month. If
a big amount is required a seven days notice is required before the
withdrawal. The profit is paid on these accounts on the minimum
balance during a month for the whole of that month. Zakat & other
withholding taxes are deducted as per rules of the government.
KUSHALI BACHAT A/C (KBA):

This is an advance form of PLS saving a/c, in this type of
account. The minimum balance requirement for this type is Rs. 2500/-.
There is also restriction on the number of withdrawals as well, i.e. up to
4 times in a calendar month. For maintaining this extra balance the
customer gets the benefits of profit calculation on daily product basis
and also free service of standing instructions of paying utility bills and
HBFC installments. All other rules of saving account are applicable.
PLS 365 SAVING A/C:

This is a special type of saving account in which customer
maintains a minimum balance of Rs. 300,000- and in turn he gets the
benefits of daily profit calculations and also there is no restriction on the
maximum number of withdrawals as was there in the case of KBA.
There is also another advantage of this scheme that if balance on a
particular day falls below the minimum balance then only the product of
that day is ignored whereas in KBA, if balance falls below the minimum
limit then all the products for that month are ignored on in other words
no profit is paid for that month.
NOTE:
PLS Saving, Kushali Bachat & PLS 365 saving accounts can be
opened in foreign currency also. Before nuclear tests of 1998 these
accounts were opened in four major currencies but now these are only
opened in USD ($). However, now bank discourages the opening of
foreign currency accounts because no forward cover risk is provided by
State Bank of Pakistan (SBP) and all the loss in case of devaluation or
depreciation in local currency has to be born by bank himself. This
increase in cost has left foreign currency account of no use, therefore,
now bank prefers to accept deposits in local currency rather in foreign
exchange.

KHANUM BACHAT SCHEME:

This is a type of term deposit, in this type of deposit an account is
deposited and monthly payments of Rs. 1000/- are made by the
account holder in this account for a minimum of 10 years. After the
expiry of term, he receives his funds along with profit for the tenor. The
distinctive feature of this product is that profit is calculated on monthly
basis and charged to account on end of each half /ear. Then profit is
also calculated on that amount of profit which is credited to the
customer's account. So we can say that in this type of account there is a
concept of accumulated profits on profit. This ends in getting a heavy
return for the depositor at the end of tenor for his small savings. This
product was actually introduced to promote saving habits in the people.
Zakat and withholding taxes are deducted as per rules only at the time
of maturity while making payment to the customer.
HAJJ MUBARIK SCHEME:

This is also very closely related with Khanum Bachat scheme.
This was designed to help the persons who are willing to offer Hajj but
are unable to save required funds. In this deposit schemes, 2 or 3 years
agreement is entered with a customer. During this time he keeps on
depositing monthly deposits and his account is charged with the
accumulated profits calculated on 6 monthly basis. The scheme is so
designed that total amount to be received at the end of this scheme
comes equal to the anticipated cost of offering Hajj at the end of tenor.
Zakat & withholding tax are deducted at the time of payment.
MONTHLY KUSHALI SCHEME:

This scheme is similar to CGC in the sense that an initial deposit
is made in this case also but instead of lump sum payment at the end of
the tenor, the person gets a monthly profit on his deposits. Under this
scheme, the bank has guaranteed minimum rate of 1% per month but
usually this rate is more than 1% per month. Zakat & withholding tax are
calculated as per rules laid down by the government.
PLS TERM DEPOSIT RECEIPTS (TDR’S)

This is a type of term deposit in which a receipt is issued for
varying tenors ranging from 1 month to 5 years or more. These are in
the form of receipts and profit on these receipts is paid biannually.
These receipts are encashable after expiry of the period for which they
were issued. Different profit rates are applied to different type of TDRs.
SPECIAL NOTICE DEPOSITS (SND):

Under this deposit scheme, a deposit is received from the

depositor under the condition that he will intimate the bank before a
certain period in case of withdrawals. There are two types of SNDs,
they are 7 days and 30 days notice deposits. The profit is paid on these
deposits but it is nearly equivalent to saving account rate.
FUNCTIONS
This was a brief review of different types of deposit schemes. The
Deposit Department handles the account opening, profit payment and
accounting of all types of deposit schemes.
ACCOUNT OPENING:
Account opening is an agreement in which customer offers his
funds and bank accepts these funds, therefore the nature of relation
between a banker and customer is of a contractual one and all the
conditions applicable to this contract act are also applicable.
PROCEDURE FOR OPENING:

Procedure for opening of account is as follows:
A person, who wants to open any kind of account, has to fill in a
printed form which is provided by the bank, free of cost. Separate
account opening forms are used for different types of accounts.
Bank usually requires that new depositor must be introduced by
some one. An introducer can be any person known to the bank but
preferably it should be a customer of the bank. However, the manager
can open the account by his own introduction.
If the manager is satisfied, it will obtain the full signature of the
customer- on the form and specimen signature card, makes the first
deposit, and issues the cheque book.
The following are given to the customers:
Pay-in-slip is the proof of deposit. For every payment which is. to
be deposited in the bank, the pay-in-slip is to be filled up. The object of
this book is to provide the customer with the bank's acknowledgment for
receipt of money to be credited this account.
Cheque Book contains a number of cheques. It enables a
customer to make withdrawal from this account or make payment of
various parties by issue of cheque.
Pass Book is a copy of the customers account as appears in the
books of the bank. Balance is recorded in this book by the Clerk.
NOTE:
1) In case of partnership account partnership deed should be
attached.

2) In case of companies memorandum and article of association,

certificate of incorporation, certificates for commencement of
business, list of directors and board resolution for opening of
account is also obtained from the customer.
3) Accounts of Trusts, Executors & Administrators can also be
opened but with the prior approval of the Head Office.
Profit payment & calculation is done in accordance with the rules
of each type of deposit scheme-by the deposit department. The
products for each deposit scheme are calculated separately and added
till the end of 6 month period. Then the sum total of these products is
multiplied with the respective profit rates which are issued by the Head
Office at the end of each half yearly closing. The profit provisions for
each type of deposits are also calculated on monthly basis by the same
department in order to calculate the net profit or loss position of the
branch.
Accounting entries are also made in the respective books
of account by this department. However, in small and medium size
branches, the accountant performs the book keeping duties for all kinds
of ledgers.

Clearing Department
Every banker acts both as a paying as well as a collecting
banker, It is however an important function of crossed cheques. A large
part of this work is carried out through the bankers clearing house.
A clearing house is a place where representative of all banks of
the city get together and settle the receipts and payment of cheques
drawn on each other. As the collecting banker runs certain risks in
receipt of their ownership the law has provided certain protections to the
banks.
The Negotiable Instrument Act, 1881, lays down hat drawer or
holder of a cheque or draft may cross the instrument generally or
specially. It further lies down that a crossed cheque can only be paid to
a banker, who collects it for a customer in good faith and without
negligence.
TYPES OF CHEQUES COLLECTED

Transfer cheques: are those cheques, which are collected and
paid by the same branch of bank.
Transfer delivery cheques: are those cheques, which are
collected and paid by two different branches of the same bank situated
in the same city.
Clearing cheques: are those cheques, which are drawn on the
branches of some other bank of the same city or of the same area,
which is covered by a particular clearing house.
Collection cheques: are those cheques, which are drawn on the
branches of either the same bank or of another bank, but those
branches, are not in the same city or they are not the members of
clearing house.
FUNCTIONS OF CLEARING SDEPARTMENT:

1. To accept Transfer, Transfer delivery, clearing and
collection cheques from the customers of the branch and to
arrange for their collection.
2. To arrange the payment of cheques drawn on the
branch and given for collection to any other branch on MCB or
any other members or sub member of the local clearing house.
3. To collect amount of cheques drawn on members,
sub-member of local clearing house, sent for collection by MCB
Branches, not represented at the local clearing house.

COMMON PROCEDURE FOR ALL CHEQUES:

i) Receiving and scrutinizing the cheques and other
deposit instruments, and the pay-in-slip at the counter.
ii) Fixing the stamps.
iii) Scrutiny and receipt by the authorized officer.
iv) Returning the counter file to the depositor.
v) Certificate and confirmation by the officer in charge
of the department. ,
vi) Separating the cheque into transfer, transfer delivery,
and clearing cheques.
SCRUTINY OF CHEQUES
a) The instrument should be neither stale/ nor post-dated.
b) If the instrument is crossed not negotiable it can be for the third
party (an endorsee of an order cheque, or a holder of bearer
cheque).
c) The Instrument should not bear any unauthorized alternation.
d) The instrument should not be mutilated.
e) The amount in words and figures should be same.
f) The instrument should be drawn on any local branch.
g) If cheque is "crossed Account Payee's" only or "Payee's
Account", it should only be accepted for collection for the payee's
account.
h) The cheques or drafts should not be crossed specially to any
other bank.
i) A cheque payable to a firm should not be accepted for credit to a
partner's account.
j) A cheque payable to one of the joint account holders should not
be collected for the joint account without the payee's
endorsement, or consent.
k) A cheque drawn by a customer in the capacity of agent, Attorney,
or Manager of his company or firm, should not be collected for
credit to his personal account.
l) Pay orders, although negotiable should not be collected for third
parties.
m) Do not collect an instrument in the account of an agent or of the
servant of the payee or endorsee of the instrument.
n) “Not transferable" instruments, like Telegraphic Transfer, or Mail

Transfer Receipt, Pay-slips, and Treasury Receipts, should be

collected for a person other payee.
o) If an account is new or the balance or operation of the account is
not satisfactory, satisfy your self about the title of the customers
to the instruments before accepting the deposits.
p) Branch agent's permission should be obtained before accepting a
third party cheque or draft for the credit of the member.
q) If the payee is a Government Department, Government Official,
or a trust account the instrument cannot be collected, but for the
payee's account.
r) If the payee of an instrument is UBL, it can be collected for credit
of the drawers account, or the amount of the instrument may be
utilized as desired by the drawer in writing.
s) Cheque payable to a trust, account should not be collected for
credit to a trustee's account.
t) All the endorsement should be regular, and no endorsement
should be missing.
Note: No charges are charged by the bank for this purpose.
LEDGERS OF DEPOSIT DEPARTMENT:

The following types of ledgers are concerned with deposit departments:
1. Saving Ledgers
2. Current Ledgers
3. Profit & Loss Sharing Ledgers
4. Fix Deposit Register
5. S.N.T.D. Register
6. Call deposit register
7. Cumulative deposit certificate register
8. Cash book
9. Daily profit and loss summary book
10. Officer spaceman signature book
11. Voucher register
However, in computerized branches all these ledgers are no
more there but only day books are maintained. The rest of the work is
done on computers.

Advances Department
Advances are the most important source of earning for the banks.
MCB is also giving full attention towards this aspect and it is also
obvious from the growing portfolio of advances and from very low
delinquency rate. The credit portfolio of this institution is in a very much
better shape than other financial institutions of Pakistan and the credit
goes to the management and the staff who are concerned about the
quantity and quality as well.
1) Loans
2) Cash Credits
3) Overdraft
1) LOANS:
Loans are monetary assistance by a financial institution to a
business, individual etc. The loans are granted by the bank in lump
sum, so these types called fixed or demand loans. Interest is charged
on the whole amount of a fixed loan.
The borrower withdraws whole the amount of loan. This type of
loan is normally granted against security of gold documents.
In case of demand loans against gold or documents, a demand
promissory note for the amount of loan is taken from the borrower loans
are granted under;
A) LOAN AGAINST GOLD:

Under this type of loan, which is granted to the borrower the Head
Cashier estimates the value of Gold or Gold ornaments through an
agent (Gold smith) and keeps a margin of 40 to 50 percent. After the
opening the gold loan account a token is given to the borrower, which is
a bank receipt.
On repayment of loan, the gold or ornaments held as security for
it, together with the demand promissory note duly discharged is
returned to the borrower and his receipt for the gold ornament taken in
the demand loan ledger. This receipts states that he ornaments
returned are complete and in order. Part delivery of ornaments is given
against part payment of a loan but care is taken that the ornaments still
in banks possession fully covers the balance of the loan outstanding.
The interest gold loan is to be applied with quarterly.
B) LOAN AGAINST PLEDGED OF STOCK:

In case of advancing such types of loans, the following

precautions are dept in the mind:
i) Stock pledged must be readily saleable
ii) Products should be readily saleable
iii) Advance should be within the borrows means
REQUIREMENT FOR LOAN:

For granting loan to any party or individual, the bank checks
following particulars of the client:
1) Credibility
2) Feasibility Report
By Credibility, bank Judges the credibility of the client by his past
bank record, CBI report etc. it is very important in making decision
about giving him loan.
Feasibility report is on the running or proposed business of the
client. The report enables the bank to judge the likely return of the
business.
2) CASH CREDIT
Cinder such cash account is opened in the name of the
customer who borrows from the bank. Customer is granted a loan up to
a certain limit, sanctioned by the head office, from which he can draw
when he requires and interest is charged on the amount actually utilized
by the customer. In order to avoid the danger of idle fund, the bank
charges a certain rate of interest, even if the customer does not
withdraw any amount. The rate charged by the bank on cash credit in
46 paisa per thousand on daily basis.
The credit is usually given against the securities of goods or
merchandize as follows:
1. ADVANCES AGAINST PLEDGE STOCK IN TRADE

OR PRODUCTS
When a cash is granted against the pledge of stock or product,
cash credit form is taken, from the certain products or stock, but the
actual pledge is created when the stock or finished product are placed
under the bank's lock or the document of title are duly endorsed to the
bank by the borrower.
2. HYPOTHECATION OF STOCK ON FINISHED

PRODUCTS:
The difference between pledge and hypothecation is that under

a pledge the borrower's goods are placed in the bank's possession

under own lock, whereas, under a hypothecation, they remain in the
possession of the borrower or guarantor and are merely charged to the
bank under documents signed by them. Even though the documents
empower the bank to take possession of the goods hypothecated, but it
is possible that the borrower may actually resist any attempt.
3. MORTGAGES OF PROPERTY:
Title deeds of immovable property are accepted by the bank only
as collateral security or alternatively as unauthorized security.
MODES OF CREDIT FACILITIES

There are two types of facilities
A FUNDED FACILITY
1) Running finance
2) Cash finance
3) Demand finance
4) Payment against documents
5) Finance against imported merchandise
6) Finance against trust receipt
7) Export finance
8) Foreign bill purchased
9) Others
NON FUNDED FACILITY

1) Letter of credit
2) Letter of guarantees
3) Bid bonds
4) Performance bonds
5) Other facilities

Remittances
DEMAND DRAFT
1) Demand draft is a written order drawn by a branch of a bank upon
the branch of same or any other bank to pay certain sum of
money to or to the order of specified person
2) Demand draft is a negotiable instrument.
3) Legal provisions are same as that of cheque.
4) It is to be ensured that purchaser can at least sign.
5) Thumb expression is not accepted on DD
6) The following are the parties.
a) purchaser
b) issuing branch
c) drawee branch
d) payee
A demand draft may be issued against the written request of the
customer before issuing it must be seen that the demand draft is in
order.
SCRUTINY OF APPLICATION
The DD application must be scrutinized by the counter clerk in
respect of following points.
A There should be branch where payment is to be made.
B full name of payer should be mentioned
C amount in words and figures must be same
D application to be signed by the purchaser
TELEGRAPHIC TRANSFER
■ Transfer of funds from one branch to another branch of the
same bank or upon other bank under special arrangements.
■ Telegraphic transfer is not negotiable
■ The funds are not payable to bearer
■ Minor cannot avail this facility

PARTIES
Following are the parties involved
■ Applicant
■ Drawing branch
■ Drawee branch
■ Beneficiary
Full name of the beneficiary or account number should be mentioned in
the application form.
■ Instruction regarding mode of payment should be obtained.
■ A record in the remittance outward register should be
maintained.
■ All the remittance must be controlled through number.
MAIL TRANSFER
■ Transfer of funds from one branch to another branch of the
same bank with in or out side the city is called mail transfer.
■ Mail transfer is not negotiable
■ The procedure is same as for DD
■ All precautions must be observed
PAY ORDERS
■ Pay order is meant for bank own payment but in practice they
are also issued to customers.
■ A pay order is written authorization for payment made in a
receipt form issued and payable by the bank. To the person
named and address.
The following are the parties
A purchaser
B issuing branch
C payee
■ Charges must be recovered at prescribed rate.
■ Pay order should be prepared like demand draft.
■ A record of all issued and paid should be maintained.
■ Credit voucher should be prepared

Technology Department
Technological advancements are also affecting the banking
industry. The foreign banks have a competitive edge over all local
banks in their technologies' advancements and automated systems.
Local banks have also realized the gravity oil this situation and are
striving to add computerized systems to their branches
MCB is ahead of all other local banks in this field and now it is in
a position to even compete with foreign banks. There are more than
1045 branches of MCB all over Pakistan and out of these more than
300 branches are fully computerized Almost all .the branches of big
cities are computerized; therefore, the need for a technology
department at each branch is growing. Now a day, a computer division
is working in each city to provide service to ad the branches of that
area.
MCB has also introduced the now concept of online banking.
There are now more than 250 branches linked through this system
and they can transact with each other directly using computer systems
at their own branches. Now customers do not have to wait long for their
transactions and can operate their account through all the online
branches.
ATM NETWORK:
ATM stands for Automatic Teller Machine. This machine is used
to transact in one's account without intervention of humans. These
machines are basically used for taking cash, confirming balances and
requesting statements / cheque books.
MCB has the largest ATM network in the country at the moment
with almost one ATM at each online branch and also ATM terminals at
International Airports. This network covers more than the 27 cities of
Pakistan including the provincial capitals and large commercial cities of
the country.
ATMs are operated through a card issued to the valued
customers and by application of Personal Identification Number (PIN
number). A person can withdraw from any machine across Pakistan
with having an account in only one branch of MCB. This was only
possible with the help of online system. In this system all the machines
are linked to central banking host at IRM division Karachi through either
satellite or telephone controller. This system identifies the card holder
and his PIN Number.
Now MCB has also entered into a contract with Cirrus which is

a subsidiary of MasterCard. This contract will enable an ATM card

holder to use his account even when he is out of country at all the ATMs
where Cirrus logo is displayed.
Green Cards are ordinary cards with a maximum withdrawal
facility of Rs. 10,000/- in a day. The annual fee for this card is Rs. 300/-
only.
Gold Cards are special cars with maximum withdrawal limit of
Rs. 25000/- in a day. These cards are issued to the persons having
more than Rs. 500000/- as their average balance.
International Cards are issued in collaboration with Cirrus and
are useable all over the world with maximum withdrawal facility
according to the standards of Cirrus.
MCB WEB SITE

MCB has also initiated its own website on internet with the
address.
www.mcb.com.pk

Miscellaneous
PRODUCTS AND SERVICES OF MCB
Following are some products of MCB that are introduced by
Musing Commercial Bank after privatization.
1) MCB RUPEE TRAVELLER CHEQUE:

MCB Rupee Travelers Cheques are as good as cash, infact
better. Better because with Rupee Travelers Cheques you have the
power to purchase and a feeling of security that should you lose them,
you will get a refund.
MCB Rupee Travelers Cheques are accepted at major shops,
travel agents, hotels, business establishments and MCB branches all
over Pakistan. You don't have to be an MCB account holder to buy the
Rupee Traveler Cheques. Anybody can purchase them. It's a safe and
convenient way to conduct everyday business. At a time when thefts
and robberies are on the increase, you are better off carrying Travelers
Cheques rather than money.
2) MAHNAMA KHUSHALI SCHEME:

A 5- year fixed Deposit Scheme, targeted to persons with small
savings who would desire a regular monthly return on their investment.
SALIENT FEATURE:
a) Minimum amount of investment shall be Rs.0.010m and the
maximum amount of investment would be Rs. 1.000m.
b) Khushali Certificates can be purchased by individuals (singly or
jointly) or by the Proprietorship/Partnership concerns or
Companies, etc. in their name
c) The Khushali Certificate will be of five years maturity.
d) The interim rate of profit offered will be minimum 1% per month. If
the profit declared by the bank is higher, additional profit will be
paid.
e) Zakat will be deducted wherever applicable on yearly basis
whether you will be receiving your profit or encashing your
certificates.
f) As per Government Directions, tax on the profit / return is to be
deducted by MCB branches at the time of payment.

3) MCB KHUSHALI BACHAT ACCOUNT:
FEATURES:
a) 8% rate of return per annum.
b) Returns calculated on daily.
c) Average balance and paid half yearly.
d) Introduced first time in Pakistan.
e) The facility of helping account holders pays utility bills (electricity,
telephone and gas) through their account. No queues. No delays.
4) PRIME CURRENCY ACCOUNT SCHEME:

Launched to attract deposits in foreign currencies. US Dollars,
Pound Sterling, Euro and Japanese Yen.
FEATURES:
a) Owing foreign currency account under the Prime Currency
Scheme allows you to earn attractive rates of interest in foreign
currency.
b) You have a choice between opening this account in your personal
name and opening it under joint names.
c) Whether you are a resident or a non-resident Pakistan, MCB
Prime Currency Scheme invites all to operate a foreign currency
account.
d) Foreign nationals and foreign companies can also open a foreign
currency account under the Prime Currency Scheme.
e) Your foreign currency account can be opened in four global
currencies: The United States Dollar, the Pound Sterling, the
Japanese Yen and the Euro.
f) Travellers Cheques and Foreign Currency Notes can also be
issued to holders of persona! and Joint accounts.
g) Remittance from abroad, Travellers Cheques, Foreign Currency
Notes and Foreign Exchange generated by encashing F.E.B.Cs
may be deposited in these accounts.
h) Rupee Loan facility will also available against this account.
i) You can draw any amount of foreign exchange from your foreign
currency account and transfer or remit the amount freely to any
part of the world without any restrictions.
j) The restrictions imposed by the State of Pakistan for the opening
of foreign currency accounts in case of passport; Work-permit
and resident Visa have been withdrawn. Your account will be

restriction free.
k) The Prime Currency Scheme is exempt from al! forms of taxes
including Income Tax, Wealth Tax and Zakat deductions.
l) MCB Prime Currency Scheme is a world in itself.
MCB - committed to working for your convenience - offers the
foreign currency account facility at more seventy of its branches
all over Pakistan.
5) HAJJ MUBARAK SCHEME

A saving scheme, of 2/3 years duration, for the convenience of
persons, with a limited income, who desire to perform Hajj was
introduced.
Under the 2 years scheme, a monthly deposit of Rs.1800 is
required, whereas under the 3 years scheme, the required monthly
deposit is only Rs.1200.
6) CAPITAL GROWTH CERTIFICATE SCHEME:

For long term depositors under which the amount deposited
almost doubles at the end of 5 years. For the scheme, the minimum
amount of deposits is Rs. 10000 while there is no maximum limit. In
case of premature encashment of the certificate, the depositor will profit
at the same rates as that of PL Saving Account.
7) FUND MANAGEMENT SCHEME

This scheme is offered to corporate and customers and is
aimed at providing better rate of return up to 15% per annum. One of
the objectives of the scheme is to develop secondary market for
Government Securities.
8) CONSULTANCY SERVICES:
In the process of privatization of public sector units, prospective
buyers need professional assistance and MCB, with its expertise, offers
to them specialized service for valuation of the market value of the
industrial unit, preparing bid documents and arranging finance for the
purchase of the unit.
9) SELF SUPPORTING SCHEME:

For the benefits of genuine worker/borrowers who are poor and
needy and for small entrepreneur the bank as evolved a self supporting
scheme: maximum amount of loan Rs.25000 and minimum Rs.5000 per
individual. Loan will be totally free of mark-up.

10) FAX PRESS

This product was first of its kind introduced by using modem
technology of The Fax Machine. It facilitates speedy transfer of funds
within Pakistan. The service guarantees transfer of from one city to
another, within an hour.
11) NIGHT BANKING SERVICE:

For the convenience of the account holder, service has,
especially, been introduced at busy commercial centers. Traders and
other clients can now make deposit, with case, at such centers up to
8.00PM.
12) UTILITY BILLS COLLECTION

With the aim of extending this service to wider range of
customers, the number of MCB branches collecting Utility Bills more
than 900.
1. MCB Mobile
2. Islamic Banking Services
13. MCB MOBILE
Banking at your fingertips. Dial in anytime to get information
regarding balance and mini statements.
14. PYARA GHAR

Flexible and competitive home financing facility with options of home
purchase, construction and renovation.
15. ISLAMIC BANKING SERVICES

Islamic banking services through exclusive units/branches
offering a range of liability and asset based Sharia compliant products
like Musharika, Murabaha, Ijara and Istasana.
16. MCB CAR CASH

Car financing and leasing at competitive rates with flexible
options Carcash finances both semi-commercial and non-commercial
vehicles for personal and business use.
17. MCB LOCKERS

The best protection for your valuables. Lockers of different
capacities are available nationwide.

Objectives of MCB
The following are the objectives of Muslim Commercial Bank Limited.
CREATING AND MANAGING VALUES.

The first objective of Muslim Commercial Bank Limited is to
create and mange the values, which is one of the back bone of
the objectives of any well organized and managed organization.
HUMAN CAPITAL.
The second objective of Muslim Commercial Bank is to take care
of the Human capital which is a necessary thing for the
development and prosperity of any well established organization.
BEST PLACE TO WORK.
The third objective of Muslim Commercial Bank Limited is to
make it a place which is much feasible and comfortable for
employees of the bank. The MCB is always conscious in
developing such place where employees of the bank feel
easiness.
TECHNOLOGY.
The forth objective of Muslim Commercial Bank Limited is to bring
new and latest technology in the operations of the bank. At MCB,
technology has a direct relation with your needs; it is a means for
creating value and convenience for the customer. Over the last
few years MCB has invested heavily into strengthening its
technology backbone. Today it is leading the way in banking
technology and setting new standards for the banking industry;
penetrating into the local market, listening to the needs of the
people and educating them of simple financial products and
services that create both value and convenience. MCB’s strength
lies in providing a technological base at the grass roots level of
the society with a challenge to educate and assimilate such
systems across vast cultural and economic backgrounds. With
over 768 automated branches, 243 online branches, over 151
MCB ATMs in 27 cities nationwide and a network of over 16
banks on the MNET ATM switch, MCB continuously innovates
new products and services that harness technology for the
customer’s benefit.
UNDERSTANDING & RELATIONSHIP.
The fifth and very important objective of Muslim Commercial Bank
Limited is to create such an environment which is suitable for
creating understanding and relationship between the employees,
thus going towards the way of development and prosperity. Over
the years, MCB has fostered strong bonds with its customers.
Understands them; their needs. They feel comfortable with MCB;

it’s their bank; it responds to them; listens to them; partners with

them; grows with them. At MCB, banking is all about being there
for people, making a home in their hearts-continuously building
relationships on mutual trust and confidence. We understand that
relationships are about expectations-our products and services
are based on your customers, expectations. Be it financing for
personal or business related needs, funds transfer and trade
related facilities or need for different types of deposit accounts,
MCB offers you a variety of products and services customized to
satisfy your individual needs.
UNDERSTANDING CONVENIENCE.
The next objective of Muslim Commercial Bank Limited is to
make understanding a convenient thing for the whole
environment of the bank, for the purpose of boosting up its values
and prosperity in such a competitive environment. Convenience is
what the customer is looking for; and this is what we at MCB are
continuously striving to provide. Whether it is the 24 hours cash
convenience of our ATM network or the easy availability of
financing requirements or simple opening of account, MCB has
tailored its products and services to make your life easier. MCB
knows the particular needs of its diverse customer base d
continuously develop products and services that fulfill these
needs.
UNDERSTANDING RELIABILITY.
The last but not least objective of Muslim Commercial Bank
Limited is to make an environment which have an understanding
of reliability in the whole structure of the bank. With a strong
financial base, a promising team and the right resources, MCB
has proved to be a reliable partner indeed. MCB understands the
special needs of the business, trading and agricultural sectors.
Strategically located branches in small towns and cities provide
warm services and advice to the small businessmen and local
traders. MCB speaks their language; it understands their needs
and provides tangible results. By responding in a timely manner
with a flexible approach, MCB provides its clients with the reliable
financial service and support they require to successfully achieve
their business objectives. With a solid foundation of over 50 years
in Pakistan and having recently completed 10 successful years of
privatization, MCB is strongly positioned to lead the banking
sector in the new millennium. You can feel safe in our hands.

Branch Network
The following is the Branch Network of Muslim Commercial Bank
Limited.
Sector wise position of circle,
As on 30-12-2002
Consumer Sector 810 Branches.
Area Head South Area Head Centre Area Head North

180 Branches 360 Branches 370 Branches
Commercial Sector 210 Branches
Area Head Area Head Area Head Area Head

Karachi South Central Punjab North
40 Branches 45 Branches 70 Branches 54 Branches
Corporate Sector 20 Branches
South Karachi North Islamabad Main Karachi Central Lahore

9 Branches 3 Branches 1 Branch 7 Branches
Overseas Branches 4
EPZ Branch 1
Total Branches 1045

Information About My Branch

I did my internship in Muslim Commercial Bank Limited Grain
Market Branch, Renala Khurd.And some important informations about
my branch which I observed are as follows:
MANAGEMENT OF THE BRANCH

BRANCH MANAGER GHULAM MUJTABA
ACCOUNTANT MUHAMMAD SADIQUE
GRADE ONE OFFICER MALIK TUFAIL
CASHIER WAHEED AHMED
HEAD CLERCK M. SHAFIQUE
JUNIOR CLERCK M. ASIF
PEON JAMEEL
SECRITY GUARD M. ASLAM
SWEEPER IFTIKHAR AHMED
TRAINEE ABDUL SATTAR AMIR
OTHER GENERAL INFORMATION

DEPOSITS:
The total deposits of this about to 207.10 million.
NUMBER OF ACCOUNTS:
Accounts in this branch of MCB are as follows:
CURRENT ACCOUNT:
Total numbers of current accounts are 1049.
PLS ACCOUNT:
Total numbers of profit and loss accounts are 2120.
KHUSHALI BACHAT ACCOUNT:

These are about to 600 accounts.

REMITTANCE:
Total remittance of this branch is 26.22 million.
NO. OF VOUCHERS:
The vouchers which are transacted in this branch are as
follows:
TYPES DEBIT CREDIT
Transfer 961 901
Clearing 591 810
Cash 1754 1389
Rate of interest 4.45%
Maximum 9%
That gives to this year.
RATE OF INTEREST:
The rate of interest provided by such bank is minimum 4.45% and
maximum 9%.
FINANCING:
Mainly, the short term financing schemes are being dealt here.
CAPITAL:
Capital of branch is treated in its Head Office.
REVENUES:
The total revenues of this branch are near to 11.25 million.

Work done by me
In the Muslim Commercial Bank Ltd. I really enjoyed working with
the staff of Ghalla Mandi Branch Renala Khurd and having a wish to be
employee of MCB. It was almost impossible to work in all the
departments within that limited time. But on my request, the staff of the
branch provided me the opportunity to work in the different departments
for the sake of practical knowledge. I feel highly indebted to work in the
Renal Khurd Branch on the request of the manager of that branch Ch.
Abdul Sattar, because I learnt a lot in that branch.
During my internship training in the MCB as I early mentioned
that I have worked in different departments & seats and learnt the
followings.
UTILITY BILLS COLLECTION

Muslim Commercial Bank Ltd. collects utility bills on behalf of
WAPDA, Sui Gas Companies, and Pakistan Telecommunication
Corporation Limited by putting the stamp on the utility bills “Paid”, Date
of payment, Signature of the officer receiving the utility bills. After
receiving utility bills a list is made on the form which is called Bills scroll
form. One copy of the scroll is with the bank for evidence whereas the
original copy with the receipt of the bills is sent to the billing department
of the respective corporation. The bank charge commission on the bills.
OPENING NEW ACCOUNT BASICS
During the span of mine internship in MCB I learned and observed a lot
of about the opening of an account. Basically I think that the opening of
an account is the establishment of a contractual relationship between
the banker and the customer. By opening an account at a bank a
person becomes a ‘customer’ of a bank. Further I am going to express
the basic requirements and steps involved in the opening of an account.
INVESTIGATION
Before opening an account MCB as like the other banks in

Pakistan ascertain whether or not the person who is going to open the
account is a desirable customer or not. Then MCB determine the
prospective customer’s integrity, respectability, occupation and the
nature of business by the introductory references given at the time of
account opening. Negligence in this informal preliminary investigation
may result in serious consequences not only for the banker concerned

directly but also for other bankers and the general public who may be
affected indirectly. In Ladbroke & Co. V Todd (1914), the banker did not
obtain introduction at the time of opening the account, and it was
construed a negligence within Section 82 of the Bills of Exchange Act
1882.
In order to further strengthen and streamline this process, the
Federal Ombudsman of Pakistan, vide his ruling on complaint No.
II/31/5186, has directed the banks to retain with the account opening
form a Photostat copy each of the National Identity Cards of the person
desiring to open an account as well as that of the introducer. As per
these directions, the concerned Branch Managers are required to obtain
the original National Identity Cards along with their Photostat copies and
then return the original after attesting the authenticity of the retained
copy.
HOW TO OPEN AN ACCOUNT (IN GENERAL)

Before opening an account in MCB I observed that the following
points must be considered in this regard.
1. Another account holder of the bank should properly introduce the

new customer.
2. The account holder should sign the account opening form in the
presence of bank officer and the signature is duly verified.
3. A copy of identity Card is required by Bank.
4. Against submission of the Bank’s prescribed application form, duly
introduced in the manner provided and on supplying such document,
as may be required and account may be opened. The Bank reserves
to itself the right to refuse to open and account without assigning any
reason.
5. Each account shall be allotted a distinct number that is to be quoted
in all correspondence with the bank relation to the account.
6. Minimum amount to open an account is required regarding the
nature of account.
PROCEDURE TO OPEN AN ACCOUNT

According to my practice in MCB, when a customer wants to open
an account, the bank officer gives him an application form. All
information, which is necessary to be known by the bank, are
requirements of the application form. Form also requires the essential
documents to be attached by the customer.
Basically following information is required to open an account with MCB
1. Title of Account
2. Full Name of Applicant

3. Occupation
4. Address
5. Telephone No.
6. Currency of account
7. Nature of Business
8. Introducer’s Name, Address & Signatures
9. Special instruction regarding the account
10. Initial Amount of the Deposit
11. Signature of the applicant
PROCEDURE TO HONOUR A CHEQUE
During my internship training in the Muslim Commercial Bank Limited, I

observed and found Cheques are received for the following purposes.
i) For Cash payments

ii) For transfer(from one account to another account)
iii) For Clearing
I) FOR CASH PAYMENTS
Cheques which are presented on Bank counter must be checked

in the following way:
1) Date.
2) Signature of Drawer.
3) Signature of Payee.
4) Whether Bearer has cancelled.
5) Whether Payee account duly is there.
If condition 4&5 exist then check the signatures of Drawer.
6) Match the figure and wordily amount of cheque.
When all above matters are satisfied then come to the Token
register and check:
1) Token number.
2) Cheque number.
3) Amount of cheque.
4) Particulars.
Two stamps are put on cheque.

a) Cash Payment (on the face of cheque).
b) Stamp for Token (on the back of cheque).
On stamp which is put for token their details are as follows:

• Token number.
• Time of giving token to client.
• Signature of token giver.
Note:
Payment is also made when cheques of same branch account is
presented for transfer to other account in same ranch along with cheque
for payment.
II) CHEQUE FOR TRANSFER:

When cheques are presented to be sent for collection and drawn
on bank situated within the city then there are three stamps to be put on
face as well as on back of cheque.
a) Crossing Stamp (face).

b) Transfer Stamp (face).
c) Bank Manager Stamp (back).
Only in MCB branches.
CHEQUES FOR CLEARING:
There are two stamps put on each cheque, sent for clearing:
a) Crossing Stamp.
b) Manager Stamp.
CHEQUES IN COLLECTION:
When cheques received in clearing are intra city then these are
controlled under CC.
First of all, these cheques are recorded in day book then allotted
number and then serial number. Then a performa is prepared in which
Bank on whom was drawn, cheque number, amount, beneficiary name
are recorded. After completing that performa cheque is posted along
with performa.
CLEARING
Following information is entered in clearing register.

a) Name of favoring party.
b) Name of bank on whom drawn.
c) Branch.
d) Cheque number.
e) Amount.
Clearing is sent after entering in register. In clearing register
future date and day is putted. Cheques and vouchers are then

separated and Cheques are sent for clearing.

Clearing credit vouchers are entered on clearing sheet. Such
credits are balanced by giving debits to cheques received in clearing
from other branches. At the beginning of the day clearing return sheet is
received. Vouchers are made if
1. Clearing received is more than clearing delivered then Credit
voucher.
2. Clearing delivered is more than clearing received then Credit
voucher.
On the same day, credit vouchers sent for clearing are entered on
the sheet's credit side.
Cheques are sent to NIFT after taking them on calculator, their
total amount along with total number of instruments. A summary is
prepared and sealed after noting the number of seal in summary.
Telephonic Transfer
DD- Demand Draft
PO- Payment Order
For TT, the account of beneficiary must be there in branch. DD is
also prepared and beneficiary can get payment.
First of all, Performa is filled by purchasing party along with
cheque or cash payment. When cheque is received it is first posted in
computer section in order to check the balance of account. After posting
the bank officer calculate tax if National Tax number is not there. i.e.
Rs.100000 @0, 1%
More than Rs.40000 @0.4%
Commission and postage charges are also calculated. These are
paid in cash or otherwise by cheque.
ISSUANCE OF CHEQUE BOOK

During my period of internship in MCB i observed that when a account
is opened then a cheque is issued to thecustomer for drawing his
money at per rules. Following procedure is adopting for the issuance of
cheque.
When a customer opens an account with the bank, he is provided
with cheque book for withdrawals from account. However, the first
cheque book is given to the customer only when all the required
documents are checked. A cheque book contains ten, twenty five, fifty
or hundred leaves. The cheque book also carries a requisition slip for
the issuance of the new cheque book. This slip is duly filled and singed
by the customer. The signature of the customer is verified by the bank
and new cheque book is issued to the customer and serial numbers of
the cheque are duly entered in the book of the bank. Along with the
signature, person should also write his full name & address.
Usually only one cheque book is issued at a time, however big

concerns who need a number of cheque books at a time, may ask the
bank to stock as number of cheque books in their name and to point
their name on these cheque books.
Bank debits the client’s account for excise duty of Rs.2.50/- per
cheque and keeps the cheque book ready for the customer, as on his
advice.
The officer keeps and maintains the cheque book register
Cheque book inventory and cheque books issued are recorded in this
register. The account number for which the cheque book is issued and
the number of leaves are also recorded in this register when the cheque
book issued an entry is passed in the cheque book issue register.
RUPEE TRAVELLER CHEQUES: RTCS

When RTCs are to be issued payment is received in cash or by
cheque, tax @0.03% is charged id National Tax number is nor
available. RTCs are issued in consecutive number of face value of
 Rs.1000
 Rs.5000
 Rs.10000
 Rs.50000
 Rs.100000
Specimen signatures of buyer are taken and clearing slip is in
four pages. One is sent to Head office, one to RTC division, one for
bank record and one for client.
If client wants immediate payment of RTCs then he will
bring RTCs with two signatures, one copy of deal and ID card
copy. Payment is made. RTCs can be endorsed to other party.
Once receiving party will pay the RTCs along with credit
vouchers in their relevant account with Bank. Payment will be
credited to account of paying party.

Financial Analysis
BALANCE SHEET (ASSETS)

AS ON 31ST DECEMBER 2000-01-02
Rupees (000)
Item 2000 2001 2002
Cash and balance 12571424 212559900 17867991
Balance with other bank 4757413 3025689 2154190
More at call and short notice 6064332 15470519 33874620
Investment 36480913 55432235 89609821
Advance 86312721 46584120 78923737
Fixed assets 3482950 3659646 3825045
Other assets 13862305 11400906 8883163
Total 174715063 187053515 235138567

MUSLIM COMMERCIAL BANK LIMITED

BALANCE SHEET (LIABILTY)
Rupees (000)
Item 2000 2001 2002
Deposit & other account 135990147 154544451 182705716
Borrowing from bank 5856198 8946624 21987824
Bills payable 7803443 8097178 6261957
Others 8438055 8578240 9045634
Share capital 2202855 2423140 2665455
Preserve 12277630 2278980 3026517
Un-appropriated profit 3185 283940 621985
Surplus on revelation of 1188122 1900962 5384934
fixed assets
174715063 187053515 235138567


HORIZONTAL ANALYSIS
Rupees (000)
Item Increase (Decrease Increase (Decrease)
Amount %age Amount %age
Cash 8688476 69.11 (339109) (15.95)
Balance with other bank (1731724) (36%) (871499) (28.80)
Money at call and short notice 4618425 42.55 18404101 118.96
Investment 12321288 28.58 341775896 61.65
Advance (9773140) (113.31) 2339617 3.05
Operating fixed assets 55290 1.53 165399 4.51
Other assets (1803004) (13.65) (2517743) 22.8


BALANCE SHEET (LIABILITIES)
HORIZONTAL ANALYSIS
Rupees (000)
Item Increase (Decrease) Increase (Decrease)
2000-2001 2001-2002
Deposits and other account 18554304 13.64 28161265 1822
Borrowings (7944051) 47.03 13041200 145.76
Bills payable 293735 3.76 (1835221) 22.66
Other liabilities 142064 1.68 467394 5.44
Share capital 220285 9.99 242315 10
Reserve fund & other 1350 0.5 747537 32.81
reserves
Un-appropriated profit 2800775 8814.9 338045 119.05
Surplus on revaluation of 791889 71.40 3483972 183.27
fixed assets


VERTICAL ANALYSIS
Rupees (000)
Items 2000 2001 2002
Cash 7.21% 1137% 7.60%
Balance with other bank 2.73 1.61 0.92
Money at call and short notice 6.22 7.75 14.41
Investment 24.71 29.67 38.11
Advance 49.50 41 33.56
Operating fixed assets 2.07 1.95 1.62
Other assets 7.57 6.10 3.78
Total 100% 100% 100%


BALANCE SHEET (LIABILITIES)
VERTICAL ANALYSIS
Rupees (000)
Items 2000 2001 2002
Deposits and other account 77.84% 82.62% 78.85%
Borrowings 9.67 4.78 9.49
Bills payable 4.47 4.32 2.70
Other liabilities 4.83 4.59 3.90
Share capital 1.26 1.30 1.15
Reserve fund & other reserves 1.30 1.22 1.30
Un-appropriated profit .0018 .15 .27
Surplus on revaluation of fixed .63 1.02 2.32
assets
Total 100% 100% 100%


PROFIT AND LOSS ACCOUNTS (INCOME)
FOR THE PERIOD ENDED DECEMBER 2000-01-02
Rupees (000)
Items 2000 2001 2002
Interest / return earned 1424242 17033225 15385869
Fees, commission 909045 868637 907071
Income from dealing foreign 609838 687854 503593
currency
Dividend income 158909 243994 297748
Other income 1085614 400140 881746
Total 16887648 19233850 17976027


PROFIT AND LOSS ACCOUNTS (EXPENSES)
Rupees (000)
Items 2000 2001 2002
Cost / return on deposit 7238680 7544897 6074682
Administrative expense 7128658 7331623 8077395
Provision for diminution the 46048 62064 -
value of investment
Provision against non- 601799 1704944 -
performing advance
Other provisions 30000 40000 -
Bad debts 483943 448999 721105
Other charges 36725 147 1313
Profit before tax 1321795 2101176 3101020
Taxation 587066 993000 1362426
Total 17474714 20226850 19337941


HORIZONTAL ANALYSIS
Rupees (000)
2000-2001
2001-2002
Interest / return 2908983 20.60 (1647356) (9.67)
earned
Fees, commission (40408) (4.44) 38434 44.42
etc.
Income from dealing 78016 12.79 (184261) (26.78)
foreign
Dividend income 85085 53.54 53754 22
Other income (685204) (63.11) 481606 120.35


HORIZONTAL ANALYSIS
Rupees (000)
2000-2001
2001-2002
Cost/return on 306217 4.23 (1470215) 19.48
deposit
Administrative 202965 2.84 745772 10.17
expense
Provision for 160126 34.78 (62064) (100)
diminution
Provision against 1103145 183.30 (1704308) (100)
non-performing
advances
Other provisions 1000 33 (4000) (100)
Bad debts (34944) 7.22 272106 606
Profit before tax 779381 58.96 999844 47.58
Tax 405934 69.14 369426 37.20


VERTICAL ANALYSIS
AS AT DECEMBER 2000-01-02
Items 2000 2001 2002

Interest earned 83.6% 88.56% 85.60%
Fees, commission etc. 5.38 4.52 5.04
Income for dealing foreign 3.61 3.58 5.04
currency A/C
Dividend income 0.94 1.27 1.66
Other income 6.43 2.08 4.91
Total 100% 100% 100%


VERTICAL ANALYSIS
AS AT DECEMBER 2000-01-02
2000 2001 2002

Items %age %age %age
Cost / return on deposit 41.42 37.30 31.41
Administrative expense 41 36.25 41.76
Provision for diminution the 0.26 0.306 00
value of investment
Provision against non- 3.44 8.42 00
performing advance
Other provisions 0.17 0.20 00
Bad debts 2.76 2.25 3.72
Other charges 0.21 00 .006
Profit before tax 4.56 10.39 16.35
Taxation 3.35 4.90 7.05
Total 100% 100% 100%

PERFORMANCE 1993-2002
The following figures will give an idea of the progress made after
privatization.
(Rs. In million)
1993 2002
Authorized share capital 2000 3500
Paid-up share capital 663 2665
Reserve funds & other reserves 12010 3027
Total assets (excl. contra) 75427 235139
Deposits 62783 182706
Advances 30753 78924
Investments 27864 89610
Imports 32734 48842
Exports 16931 28284
Home remittance 3023 32962
Pre-tax profit 346 3103
No. of branches 1290 1045
No. of employees 13768 10926
No. of accounts 3411427 4463530


HORIZONTAL ANALYSIS
COMMENTS
■ Cash is increased in 2001 but decrease in 2002; it shows that

the liquidity position of the bank is going to be weak, so it is
alarming sign for the bank. Therefore bank should take
necessary steps according to the position.
■ There is decreasing trend in balance with other banks which is
a negative sign.
■ Increase in money at call and short notice, it means that
customers of bank are very punctual in making payments.
Therefore it is good sign for the bank.
■ In the field of investment there is increasing trend with the
passage of time. It is common term of finance” more
investment more return.
■ As we know that main source of profit of a bank is the
difference between the percentages of interest, Banks pay
less rate of interest than receiving the interest from the
customers. In this case advance to customers very low in
2001 but increase in 2002. It means that MCB is running very
well.
■ MCB is in a position that it is earning more and more profit
with passage of time. Then bank can purchase more and more
fixed assets, and it is bank is doing. Assets of the banks are
increasing day by day by purchasing the assets. More assets
mean that bank has more capacity to pay off its liabilities.
There is increasing trend in field of fixed assets. It is due to
purchase of new assets.
■ Other assets have a decreasing trend which is not a positive
sign. Decrease in assets decrease the worth of organization

LIABILITIES
■ There is increasing trend in deposits and other accounts which

shows the credibility of the bank.
■ Borrowing is decreasing in 2001 but there is increasing trend
in the year 2002. Although it is seeing that bank’s borrowing is
increasing with the passage of time which is not a good sign
but there is a positive thing in this behalf, usually banks borrow
money at that time when they would have to give it for earning
more profit, I think the Muslim Commercial Bank doing the
same thing for increasing its profits.
■ Bills payable increase in 2001 but decrease in 2002 positive
sign.
■ Other liability has an increasing trend not good because
increase in liability decreases the liquidity position of the bank.
■ Share capital increase that shows the creditability of bank.
■ The Muslim Commercial Bank Limited is increasing its
reserves and Un-appropriated profit in order to increase its
lending power, which is good sign, because according to the
prudential regulations of State Bank of Pakistan, a bank can
lend money (per party exposure) equal to the 30% of its
assigned capital plus reserves.


PROFIT AND LOSS A/C
HORIZONTAL ANALYSIS
INCOME
■ Interest income decrease in 2002 will great proposition which
is not favorable. It means that interest received by the bank is
decreasing with the passage of time. It is not good for a
banking company.
■ As we all know that banks provide many services for their
customers and also act as a agent of the customer. The banks
receive fee and commission after their services; it is a main
source of bank to receive fee and commission from their
customers. In case bank is taking more fees as compared to
previous years. This is good for the bank.
■ In foreign currency dealing and dividend there is huge
increasing trend which shows the investment of bank in
healthy organization.
■ Other income decrease in 2001 but this increase mean
positive situation.
EXPENSE
■ Return on deposit decreases which shows good sign and it is
due to decrease in return rate.
■ Adm and diminution and provision against non performing loan
decreasing turned that is favorable.
■ Bad debts increased with huge amount not positive sign.
■ Profit before taxation has increased with greater proportion.
■ Tax increases which are not bad because it is interrelated with
profit, if profit increased, tax also increase.

VERTICAL ANALYSIS
INCOME
■ Interest earned decrease which is negative sign.
■ As we know that banks provide many facilities other than
money lending and borrowing. Banks receive fee, commission
etc. for these services. Therefore fee and commission income
are increasing which is good and favorable signs.
■ Divided income increased but it is very small.
■ Other income increase with great proportion good sign.
EXPENSES
■ Return on deposit decrease good sign because it increases
the profit.
■ Administration expenses are increased but no alarming rate.
■ Position against non performing loan us zero which show bank
have good customer.
■ All provision is zero which sows the good credit policy.
■ Bad debt and other charges increased but the situation is not
alarming.
■ Profit increased.
■ Tax is increased but it is interrelated with profit.

Overall Review
The Bank has now completed more than 12 years, since its
privatization and it is, indeed, gratifying to note that during this period,
MCB has performed well and has sustained its growth in all the major
sectors. The well deserved credit, for this good performance and
progress, must surely go to the Bank’s management, its Directors and,
in no small measure, to the entire MCB team for its dedication,
concerted efforts and excellent team spirit.
MCB has been a pioneer among the banks in Pakistan,

particularly in introducing a number of innovative banking products and
services. For the first time in the history of Pakistan, these multifarious
products mostly in the shape of saving schemes have been introduced
by MCB with brand names. This has set the trend and many other
banks, both local and foreign, have since followed in MCB’s footsteps,
by launching new products and services, on similar lines.

Ratios Analysis
Ratio analysis is an important and age-old technique of financial

analysis. Ratios are important and helpful in the reference that:
 These simplify the comprehension of financial statement and tell
the whole story of changes in the financial conditions of the
business.
 These provide data for inter-firm comparison. The ratios highlight
the factors associated with successful and unsuccessful firms,
also reveal strong and weak firms.
 These help in planning and forecasting these can assist
management in its basic functions of forecasting, planning,
coordination and control.
 These help in investment decision in case of investor and lending
decision in case of Bankers etc.
However, the ratios are only indicators, they cannot be taken as
final regarding good or bad financial position of the business other
things have also to be seen.
RATIO ANALYSIS
1. RETURN ON EQUITY
Rs. (000)
2000 2001 2002
N.P.A.T × 100 734729×100 1108176× 100 1738594× 100
Share holder equtiy 5592743 6887022 11698891
13.14% 16.09% 14.86%
2. RETURN ON ASSETS
Rs. (000)
2000 2001 2002
N.P.A.T ×100 734729×100 1108176× 100 1738594× 100
Total assets 5592743 187053515 235138567
0.42% 0.59% 0.73%
3. EARNING PER SHARE

Rs. (000)
2000 2001 2002
N.P.A.T 73472900 110817600 173859400
No. of outstanding shares 220285500 242314075 266545483
3.33 4.57 6.52
4. RETURN ON DEPOSIT
Rs. (000)
2000 2001 2002
N.P.A.T 734729×100 1108176× 100 1738594× 100
Total Deposit 135990147 6887022 182705716
0.54% 0.71% 0.95%
5. CASH / DEPOSIT RATIO

Rs. (000)
2000 2001 2002
Cash 3484511× 100 39845132× 100 4261259× 100
Deposit 135990147 154544451 182705716
2.56% 2.25% 2.33%
6. TOTAL ASSETS / NETWORK

Rs. (000)
2000 2001 2002
Total assets 174715063 187055394 235138567
Network ratio 5592743 6887022 11698891
31.23 times 27.16 times 20.09times
Rs. (000)
2000 2001 2002
135990147 154544451 182705716
5592743 6887022 11698891
24 times 22 times 15 times
8. INTEREST EXPENSES / TOTAL EXPENSES RATIO

Rs. (000)
2000 2001 2002
Intrest Expenses 723680×100 7544897× 100 6074682× 100
Total Expenses 17474714 20226850 19337941
41% 37.30% 31%
9. INTEREST INCOME / TOTAL INCOME RATIO

Rs. (000)
2000 2001 2002

IntrestIncome 1424242× 100 17033225× 100 × 100

15385896
Total Income 16887648 19233850 17976027
83% 88% 85%
10. NET PROFIT MARGIN

Rs. (000)
2000 2001 2002
N.P.A.T × 100 734729×100 1108176× 100 1738594× 100
Total Income 16887648 19233850 17976027
4.35% 5.76% 9.67%
11. AVERAGE PROFIT PER BRANCH

Rs. (000)
2000 2001 2002
Profit Net 734729000 754489700 1738594000
No. of Branches 1210 1061 1045
Rs. 607214 Rs. 1044463 Rs. 1663726

1. RETURN ON EQUITY 18.00%

Return on Equity
16.00%
This ratio is more meaningful for 14.00%
12.00%
share holders who are interested to
Percentage
10.00%
know the profit earned by the 8.00%
6.00%
company because the dividend paid 4.00%
from available profit higher ratio 2.00%
0.00%
means factor of production fully 2000 2001 2002
utilized and good position. Here ratio Ye ar s
is increased in 2001 but again

decrease in 2002. And I think that the
Bank improved its return on equity
ratio in the year 2001. But it again fall
down in the year 2002, which is an Return on Assets
alarming sign for the Bank.
0.80%
0.70%
2. RETURN ON ASSETS 0.60%
Percentage
0.50%
This ratio has an increasing 0.40%

0.30%
trend. It means the assets of the 0.20%

0.10%
business are fully utilized in more and 0.00%
2000 2001 2002
efficient way and also shows the Years
favorable trend of the business. This

ratio of the bank was too low in the
year 2000, but it improved in the year
2001, and it was much good in the
year 2002. Earning per Share
3. EARNING PER SHARE 6

5
Rupees
4
This ratio got really improved as 3
it has gone with the increase in profit. 2

1
Earning per share is a good measure 0
of profitability when compared with 2000 2001

Years
2002
similar other business. Here

increasing EPS, which will surely
increase share price. This ratio has
the same trend as the return on the
Return on Deposits
1.00% assets. And is improving in the

0.80% every succeeding year.
Percentage
0.60%
0.40%
0.20%
0.00%
2000 2001 2002
Return on deposit is increasing
Ye ars
trend which is favorable. This ratio
shows with the increase of deposit
the profit margin also increases.
Increase in return on deposit is

positive sign. This ratio has the same trend as the above mentioned
ratio of return on equity has which is a good sign for the Bank.
5. CASH / DEPOSIT Cash/Deposit Ratio
RATIO 2.60%
2.50%
Cash deposits ratio means 2.40%
Percentage
liquidity position of the bank. This 2.30%
2.20%
ratio is very low means that Bank 2.10%
has no idle fund but even low ratio 2.00%
bank has not liquidity problems. 2000 2001

Years
2002
Bank meets all its financial

problems. This shows the strategic
policy of the bank and efficiency of
the bank.
6. TOTAL ASSETS / NET Total Assets/Net Worth
WORTH 35
30
This ratio shows the 25
Percentage
decreasing trend. But it is not had 20

15
position because net worth of the 10
bank increasing day by day. 5

0
Increase in net worth shows that 2000 2001 2002
Years
bank is on sound footing. And I
think that this will provide benefit
to the bank in the long run.
7. TOTAL DEPOSIT / NET WORTH

This ratio has also decreasing trend but decreasing is due to increase in
net worth. And it will provide benefit Interest Expenses/Total Expenses
Ratio
to the Bank in the long run and in
the coming years. 50%
40%
Percentage
30%
8. SOLVENCY RATIO 20%
This ratio shows that the 10%
assets of the bank have increased 0%

2000 2001 2002
more as compared to its liability Years
which is good effect on the Inte re st Incom e /Tota l Incom e Ra tio
solvency of the bank. Solvency

means the ability to meet its 89%
88%
obligation: with the passage of time 87%
86%
Percentage
it is increasing which is good sign. 85%

84%
83%
82%
9. INTEREST EXPENSE / 81%

80%
2000 2001 2002
Ye ar s

TOTAL EXPENSE RATIO

A decrease figure shows that deposits are getting low. The
reason is the decrease in the return on deposit. When decrease return
then people prefer to invest in business for more earning. This decrease
in the interest expenses is due to the decrease in the borrowings of the
bank. or it might be due to decrease in the payable interest rate to the
lenders.
10. INTEREST INCOME / TOTAL INCOME RATIO
A little decrease figure rather than stagnant figure showing same
amount of income generation. Net Profit Margin
Although the rate of markup come
down but it has no bad effect on the 12.00%
earnings of the bank. This ratio 10.00%
Percentage
8.00%
shows that interest income as 6.00%
compared to the total income of the 4.00%

2.00%
bank is decreasing. But it does not 0.00%
mean that it is a bad effect. Because 2000 2001

Years
2002
it might be due to increase in the

other Income of the bank which is too
a Good affect for the bank.
11. NET PROFIT MARGIN
Average Profit per Branch
This is being improved yearly.
Although bank is earning huge 2000000
income but its expenses increased
1500000
quite a bit simultaneously. Ultimately
Rupees
result is increase in the net profit of 1000000
the bank. And it means that bank 500000
has an improving trend from the 0

2000 2001 2002
point of view of the income and will Ye ars
be improving in the coming years.
12. AVERAGE PROFIT PER

BRANCH
The average profit per branch is increasing rapidly every year. It
is healthy good and encouraging for bank. This ratio of the bank shows
that it profit of the branches is increasing in the coming years. if it was
one time in the year 2000, then it was two time in the year 2001 and
three times in the year 2002.
Recommendation

From the Quantum of the profit and its financial data it can be
easily judged that after privatization, MUSLIM COMMERCIAL BANK is
performing well. Its deposits are growing day by day and so its
profitability. The controlling body is responsible for the productive
performance of the Bank.
Following are my observation and suggestion to improve the

efficiency for the development of the economy.
• A big portion of the home remittance is sent by Pakistan working

capital through Muslim Commercial Bank Limited. As we know a
big portion of this amount is wasted purchasing of luxuries. The
people motivated to save money by offering the deposit through
various investment schemes. The rate of profit should increase
1% or 2% than other banks and it would be profitable step for
bank.
• There is a criticism on the banking management that the

salaries of the employees are decreasing in every succeeding
year. And I think this will shake the confidence and working
habit of the employees.
• There is another recommendation about the bank that there is

no proper timing of the bank and there is made an unnecessary
delay in the banking transactions, which might not be a good
sign for the bank from future prosperity point of view.
• Staff turnover particularly of trained staff result in financial and

other losses. The amount spent by the bank on employment,
induction and training of outgoing officers constitutes to beat till
another officer should ready prove this work. The exodus of
bank officer in the past has worsened the situation.
• Most of the bank employees, are sticking to one seat only with
the result that they become master of one particular job and
loose their grip on other banking operation. In my opinion all the

employees should have regular job experience all out-look

towards banking. The promotion policy should be adjusted.
• Refresher Courses for the staff are most important in any

international organization. Alt the employees should have these
courses according to their requirement. Foreign experts can
also be called for this purpose.
• Every year some of the employees should be sent for training to

other countries and employees from other branches should be
brought here. Some more reading material should be provided.
The purpose should be to educate the employees with the
advance studies in their field. The employee should be provided
the opportunities to attend and participate in seminars and
lectures on banking.
• Bank should give some more incentive to its employees in order

to remove the conflict between lower and higher officers and
should try to improve the working condition of the bank.
• As such system should be designed that every employee who

has some problems with his officers can communicate it to the
higher management and some steps must be taken to improve
that.
• Recruitments should be strictly on merit basis and induction

should be after proper and extensive training.
• Old and lazy staff should be replaced by young, qualified and

energetic staff.
• Foreign branches should be opened in order to capture the

international market and to earn international repute for the
bank.
• Working environment, equipment, furniture and staff dressing

should be according to the modern banking style.

• Proper attention should be paid to upgrade customer services.
• Bank should adopt the global organizational banking structure to

meet the international standards of banking sector.
conclusion
It is evident from this report and the financial statements of MCB
that it is making progress by leaps and bounds. The profits of MCB

have grown considerably during the last few years and this trend is
expected to continue into the future. Therefore, we conclude that MCB
has a very prosperous present and future, which assures the
shareholders of wealth maximization. Side by side of it I think that if
bank would be able to cover and control on the above mentioned
recommendations then it would be in such a situation that will really
lead it towards the road of prosperity, development and integrity. And
with the above mentioned sentences I think there is too fault of the
customers and in order to make the proper working of the bank the
customers should also cooperate with the bank which will be really a
good, ambitious and diligent condition for the bank. And then bank will
be really in such a situation and position to compete its competitors in
the country as well as on international level.

MCB Bank

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

MCB Bank

Uploaded by

Copyright:

Available Formats

Evolution of Banking

"Bank is a dealer in debts—his own and of other people."

According to G.W. Gilbert,

According to Banking companies ordinance 1962

u/s3(B) of Banking Companies Ordinance 1962 "Banker means

Hailey College Of Commerce

A) PRE NATIONALIZATION PERIOD:

Hailey College Of Commerce

BANK NO. OF BRANCHES DEPOSITS

Hailey College Of Commerce

BANK POSITION IN 1992

Bank No. of Branches Deposits (Rs. In Millions)

C) POST NATIONALIZATION ERA

Hailey College Of Commerce

Muslim Commercial Bank Ltd.

Hailey College Of Commerce

3) Betterment of branches and staff service level.

Hailey College Of Commerce

MANAGEMENT OF THE BANK

• Mian Mohammad Mansha Chairman

• Tariq Rafi Director

• Mian Mohammad Mansha Chairman

CHIEF FINANCIAL OFFICER

Hailey College Of Commerce

Corporate Consumer Commercial

Hailey College Of Commerce

NUMBER OF BRANCHES IN DIFFERENT LOCALITIES

Furthermore, the bank has some proposals under consideration to open

Hailey College Of Commerce

Clerical staff Non-clerical staff

Technical Staff Dispatch Rider

Hailey College Of Commerce

Mediocre Level Management

The organization chart within a department and in different offices is as

Divisional Heads ………..…………………… Head Office

Regional Head (EVP) ………..…………………… Regional Office

Zonal Head (VP) ………..…………………… Zonal Office

Branch Manager ………..…………………… Branch

(VP, AVP, GRADE 1, 2, 3)

Hailey College Of Commerce

Fields of Activities of MCB

1) Open Different accounts for different peoples

Hailey College Of Commerce

Hailey College Of Commerce

CURRENT A/C (CD):

Hailey College Of Commerce

deposits account. These types of deposits are also exempt from

PLS SAVING BANK A/C (SA):

KUSHALI BACHAT A/C (KBA):

PLS 365 SAVING A/C:

Hailey College Of Commerce

KHANUM BACHAT SCHEME:

HAJJ MUBARIK SCHEME:

MONTHLY KUSHALI SCHEME:

PLS TERM DEPOSIT RECEIPTS (TDR’S)

SPECIAL NOTICE DEPOSITS (SND):

Hailey College Of Commerce

Under this deposit scheme, a deposit is received from the

PROCEDURE FOR OPENING:

Hailey College Of Commerce

2) In case of companies memorandum and article of association,

Hailey College Of Commerce

TYPES OF CHEQUES COLLECTED