Internship Report

CHAPTER # 1

INTRODUCTION

1.1 Introduction
Chapter one is about introduction of report. As a part of requirement of
MBA degree six week internship is necessary for student. This chapter
includes background, purpose, scope, objectives and methodology of the study. It
also include introduction of organization.

1.2 Background of the study

Internship training program during Master in Business administration
Program is necessary for the partial fulfillment of the completion of Degree of
Master in Business Administration as per HEC ( Hire education commission )
requirement. It is necessary for me to complete an internship session of about
6 weeks in some manufacturing or service industry relevant to my area of
interest and specialization. So, I choose the Banking field because I have the
interest in this sector because my study background is related with this sector.

1.3 Purpose of the study

Internship is the capstone experience that provides me with hands-on,
real-world experience in a work setting. Ideally, internship will enable internees
to:
a. Use my knowledge and skills get from the classroom,
b. Discover where further competence is needed,
c. Convert the bookish knowledge into practical life, and
d. become better acquainted with the types of work settings in which such
Competence can be applied.

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1.4 Scope of the study

This study will facilitate to me regarding the working of Banking sector of
Pakistan because most of the teachers during their lectures use the examples of
Banks like MCB, National Bank, UBL, Bank Alfalfa and many others,
Students should study about the functioning of such Banks. It will help full for me
in future.

1.5 Limitation of the study

T he study is done with the sole purpose of doing the best work but
there were certain limitation faced during the internship period. The most
important limitation from which the study suffers is the non-availability of
information in a manner required for analysis and the secrecy of the bank.
Another important limitation of the study is time and space constraint.
In the MCB New General Bus Stand Branch, Sargodha fraud was held by chief
cashier and operation manager so an Audit Team was there and management was
busy in providing information to auditor and sat s claims of customers.

1.6 Objectives
I worked as an internee in MCB New General Bus Stand branch, Sargodha.
The main objectives to study in MCB were:
a. To get some experience in working with well reputed organization.
b. To gain knowledge about the professional environment of the bank.
c. To know about the technology utilized in the banks.
d. To deal and manage with the situation of stress.

1.7 Methodology
There are mainly two methods that are used for the collection of data.
1. Primary Data
2. Secondary Data

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1. Primary Data:
a. Observation of functions of Branch operations on the spot.
b. Observation of different processes of Branch on the spot.

2. Secondary Data:
a. Internet is very helpful for me to study more about banking sector of
Pakistan.
b. Different type of booklets of the Bank.
c. Annual reports
d. Journals
e. Newspapers

1.8 Summary
This is the first chapter of the report containing the detail introduction
of the report. Internship training program during Master in Business
administration Program is necessary for the partial fulfillment of the
completion of Degree of Master in Business Administration. Internship will
enable internees to integrate and use knowledge and skills from the
classroom. This study will facilitate me regarding the working of banking sector
of Pakistan. For achieving my purposes, objectives and for the preparation
of the internship report I required some kind of data, I used both methods
of data collection that are primary sources and secondary sources for that purpose.

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CHAPTER # 2
HISTORY AND ABOUT MCB

2.1 Historical Background

MCB Bank Limited formerly known as Muslim Commercial Bank
Limited MCB Bank is not an overnight success story. It was incorporated by the
Adamjee Group on July 9, 1947, under the Indian Companies Act, VII of 1913 as a
limited company. The bank was established with a view to provide banking
facilities to the business community of the South Asia
After the partition of the Indo-Pak subcontinent, the bank moved to Dhaka (then
the capital of former East Pakistan) from where it commenced business in August
1948. In 1956, the bank transferred its registered office to Karachi, Where the head
office is presently located. Thus, the bank inherits a 59 years legacy of trust of its
customers and the citizens of Pakistan.

2.1.1 Nationalization:
In January 1974, the Government of Pakistan nationalized MCB following
the Banks (Nationalization) Act 1974. MCB was neither the only bank which was
nationalized solely as neither it nor any other bank being merged with it due to its
consistent and firm policies and its sound position.

2.1.2 Privatization:
A wave of economic reforms swept Pakistan in the lattes introducing the
Need for privatization of state owned banks and companies. This was the first bank
to be privatized in 1991 and the bank was purchased by a consortium of Pakistani
corporate groups led by Nishat Group. Nishat Group is one of the leading and most
diversified business groups in Pakistan. The group has strong presence in the most
important business sectors of the country such as banking, textile, cement and
insurance.

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Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has
played instrumental role in its success. In recognition of Mr. Mansha’s
contribution, the Government of Pakistan has conferred him with "Sitara-e-
Imtiaz", one of the most prestigious civil awards of the country.

2.2 About MCB:

Over the years MCB has developed strong relationships with its customers
by understanding their needs and treating them with respect, dignity and
importance. The driving force behind its commitment and services is its focus on
customers ensuring that it not only meets, but also exceeds their expectation.
They strive to achieve excellence by ensuring that every moment of their time is
spent in adding value, making sure that they do things right, first time, and every
time. With the quest of quality MCB has always taken initiatives bringing banking
into a new arena; from cash to the convenience of plastic; from branch banking to
internet banking and from face to face customer interaction to online accessibility.
MCB now focuses on three core businesses namely Corporate, Commercial and
Consumer Banking. Corporate clientele includes public sector companies as well
as large local and multi national concerns. MCB is also catering to the growing
middle class by providing new asset and liability products. MCB Bank Limited
(Formerly Muslim Commercial Bank Limited) has a solid foundation of over 63
years in Pakistan, the Bank provides 24 hour banking convenience with a network
of over 1000 branches, the largest ATM network in Pakistan over 450 ATM
locations in the market.

2.2.1 Vision & Mission

VISION & MISSION

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

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•
• Mission Statement
We are a team of committed professionals, providing innovative and
efficient financial solutions to create and nurture long-term relationships with our
customers. In doing so, we ensure that our shareholders can invest with confidence
in us.
a. Providing innovative
b. Efficient financial solutions
c. Long-term relationships with our customers
d. Shareholders invest with confidence

2.2.2 Values of MCB

1. Integrity
We are the trustees of public funds and serve our community with integrity.
We believe in being the best at always doing the right thing. We deliver on our
responsibilities and commitments to our customers as well as our colleagues.

2. Respect
We respect our customer’s values, beliefs, culture and history. We value the
equality of gender and diversity of experience and education that our employees
bring with them. We create an environment where each individual is enabled to
succeed.

3. Excellence
We take personal responsibility for our role as leaders in the pursuit of
excellence. We are a performance driven, result oriented organization where merit
is the only criterion for reward.

4. Customer centricity

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

challenge of understanding their needs and aspirations, both realized and
unrealized. We make every effort to exceed customer expectations through
superior services and solutions.

5. Innovation
We encourage and reward people who challenge the status quo and think
beyond the boundaries of the conventional. Our teams work together for the
smooth and efficient implementation of ideas and initiative.

2.2.3 Awards and Achievement:

1. Euro money Awards

a. Best Bank in Asia Award 2008

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

b. Best Bank in Pakistan Award 2006

MCB has yet again received the esteemed Euro money Award for the “Best
Bank in Pakistan”. It is the only bank to receive the Euro money Award for
Excellence for the sixth time in the past seven years.
• Best Bank in Pakistan Award 2005
• Best Bank in Pakistan Award 2004
• Best Bank in Pakistan Award 2003
• Best Bank in Pakistan Award 2001
c. Best Domestic Bank Award 2000

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MCB was awarded as a Euro money Award 2000 for the “Best Domestic
Bank in Pakistan".
2. Asia Money Awards
a. The Best Domestic Commercial Bank Award 2005
MCB Continues to shine as once again Asia Money declares MCB as "The
Best Domestic Commercial Bank in Pakistan" for the year 2005.

b. The Best Domestic Commercial Bank Award 2004

MCB has a distinction of winning the Asia Money 2004 award for being
"The Best Domestic Commercial Bank in Pakistan".

2.2.4 Pattern of Share Holdings

Description Shareholding Percentage
Directors, CEO and children 52,190,877 7.5518
Associated Companies 57,009,034 8.2490
NIT & ICP 5,835 0.0008
Banks, DFI & NBFI 2,239,307 0.3240
Insurance Companies 46,052,057 6.6635
Modarabas & Mutual Funds 7,208,703 1.0431
Public Sector Cos. & Corp. 131,749,731 19.0636
General Public (Local) 101,843,819 14.7364
General Public (Foreign) 2,400,126 0.3473
Others 44,237,663 6.4010
Foreign Companies 246,167,375 35.6194
Company Total 691,104,527 100.00

2.3 Organization Structure

As MCB is a banking company listed in stock exchange therefore it follows
all the legalities, which are imposed by concerned statutes. MR. Mian Mohammed

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Mansha is chairman & chief executive of the company with a team of 10 directors
and 1 vice chairman to help in the business control and strategy making for the
company.
A team of 10 professionals is handling operational management of the bank. MR.
Mian Mohammed Mansha also heads this team.
The different operational departments are:
a. Consumer Banking & IT Division
b. Financial & Inter Branch Division
c. Banking Operations Divisions
d. HRD & Legal Division
e. Financial Control & Audit Division
f. Credit Management Division
g. Commercial Banking Division
h. Corporate Banking Division

2.3.1 Board of Directors

Mian Mohammad Mansha Chairman
Mr. S. M. Muneer Vice Chairman
Mr. Tariq Rafi Member
Mr. Shahzad Saleem Member
Mr. Sarmad Amin Member
Dr. Muhammad Yaqub Member
Mian Raza Mansha Member
Dato' Mohammed Hussein Member
Mr. Aftab Ahmad Khan Member
Mr. Abdul Farid Bin Alias Member
Mian Umer Mansha Member
Mr. Muhammad Ali Zeb Member
Mr. Atif Bajwa President / CEO

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2.3.2 Organizational Structure MCB Head Office

Chairman Board of Directors

Chief Executive

5 SEVPs

10 EVPs

5 VPs

AVP

OG-I

OG-II

OG-III

Clerical Staff

Non-Clerical
Staff

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2.3.3 Organization Structure, MCB (1064)

B r a n c h M a n a g e r

A s s is t a n t
M a n a g e r

A c c o u n t a n t

O ffic e r s

C a s h ie r

M e s s e n g e r

G u a r d

2.3.4 Branches network

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(Domestic operation) (Overseas operation)

(1057 Branches) (8 Branches)

Commercial = 986 Sri Lanka = 5

Consumers = 44 Bahrain = 1

WBG = 11 EPZ =1

Islamic = 11 UAE =1

Sub branches 05

2.3.5 Province Vise Network

Province No. Of Branches

Baluchistan 37

Khyber paktunkhwa 106

Azad J. Kashmir 18

Punjab 665

Sindh 248

Domestic 1074

Total 2138

2.4 MCB, New General Bus Stand Branch, Sargodha (1064)

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Detail of Staff as on 15/7/2010

Name Job Title Job Description
ARSHAD BRANCH  To enforce effective managerial
MAHMOOD MANAGER control on overall of the branch as
(029016) (OG-111) well as on staff related matter.
 To promote business activities and
development.
 Deep look on income& expanses
matter.
 Quality customer service and
development

RASHEED MANAGER  To supervise overall operations of the

AHMAD OPERATION branch.
(021105) (OG-11)  To ensure effective control on internal
working
 Issuance of cheque books and RTC.
 Arrangement of all type of security
stationary.
 Passing cheques/vouchers
 Cash received stamp

MISS GENERAL  DD’s/ TT’s/ pond advice.

SADIA BANKING  Maintenance of all books and records.
BASHIR (OUTSOURCE)  Supervise overall ATM related
(3E-0195) operations.
 ATM claim processing manually.
 Account opening

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 Cheque collection from outstation

MR. GENERAL branches.
AKHTER BNKING  In word/ out word clearing.
PARVEZ OFFECER  Other duties advise by manger.
(019219) (ASSISTANT)  Quality customer service and
development.

MISS CHIEF CASHER  Responsible for overall supervision/

NAZISH (OG-111) monitoring of all type of cash
PAUL department.
(030948)  Cash received & paid.
 Maintenance of files and registers.
 Other duties advise by manger.
 Quality customer service and
development.

CHAPTER# 3

PRODUCTS AND SERVICES

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3.1 Personal Banking

3.1.1 Deposit Accounts

1. Khushali Bachat Account

Khushali Bachat Account, a Rupee savings account is one of MCB Bank’s

most popular products. Due to the low initial deposit, the account can be opened
by people from all walks of life and still avail the facility of daily product profit
calculation.

2. Mahana Khushali Bachat

MCB Monthly Khushali Scheme provides you with a steady income every
month. Just purchase a Monthly Khushali Certificate and you will enjoy a steady
income of your total deposit every month.

3. Pak Rupee Savings Account

MCB’s Pak Rupee Savings Account offers you attractive returns on your
Pak Rupee investment. In addition, you have access to a countrywide ATM
network convenient cash accessibility 24 hours a day. The facility also provides
you with unlimited daily transactions with a limit on maximum withdrawal
amount through the ATM machines.

4. Pak Rupee Current Account

MCB’s Pak Rupee Current Account offers you the convenience of

unlimited withdrawals i.e. access to your funds whenever you want without any
notice. There is no limit on the number of transactions you make in a day plus you
can avail finance facility up to 75% of the total deposit. In addition, you have
access to a countrywide ATM network convenient cash accessibility 24 hours a
day. The facility also provides you with unlimited daily transactions with a limit
on maximum withdrawal amount through the ATM machines.

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5. Pak Rupee Term Deposit

MCB Pak Rupee Term Deposit gives a higher rate of return. It gives you
choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5
year term deposits.

6. Saving 365

The MCB Saving 365 calculates profits on a daily product basis and gives
you the facility of unlimited withdrawals.

7. Foreign Currency Savings Account

a. MCB’s
Foreign Currency Savings Account offers you attractive returns on your Foreign
Currency investment.
b. You
can invest in any of the four currencies i.e. US Dollar, UK Pound Sterling, Japanese
Yen or Euro.
c. Your
foreign currency account is exempted from Zakat and withholding tax

8. Foreign Currency Current Account

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

unlimited withdrawals i.e. access to your funds whenever you want without any
notice. There is no limit on the number of transactions you make in a day.

9. MCB Foreign Currency Term Deposit

MCB Foreign Currency Term Deposit gives a higher rate of return. It gives
the choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5
year term deposits.

10. Dollar Khushali Account

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The Dollar Khushali Account, a Dollar based account was introduced in

1993 at selected MCB Bank branches. Today, you can open a Dollar Khushali
Account at over 200 branches in Pakistan.

3.1.2 Loan Products

1. MCB Business Sarmaya

“MCB Business Sarmaya” is the best Running Finance facility against your
residential property which empowers you to manage your business dealings
better. So act today and get MCB Business Sarmaya and thus improve your
business, avail lucrative opportunities and expand your business, with absolute
satisfaction of cash flows.

2. MCB Car 4u

Life is like a chess board. You plan your career options. You analyze your
business moves. But when you really want to improve your life, you make a
power move. MCB CAR4U Auto Finance is the power move that assists you in
more ways than you ever imagined. It is affordable, with lowest mark up, flexible
conditions, easy processing and above all, no hidden costs.

a. Eligibility
• MINIMUM NET TAKE HOME INCOME OF Rs. 15,000. Your monthly
installment for MCB Car4U should not exceed 45% of your net take home
Income.
• 25 to 57 year of age. Age of 60 shall not be reached before the maturity of
the facility.
• Pakistani National residing in cities where MCB Car4U has been
launched.
• Businessmen and self employed with the minimum experience of 3 years
in the same business and profession. For salaried individuals, 2 years with the
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same employer and overall three years of employment history.

b. Monthly Installment/Rental Calculation

Your total monthly installments will include finance installment amount
and insurance charges. You can calculate your monthly finance installment by
using the following calculator for your selected term:

Term (years) Advance Installment Deferred Installment

3 .03469 .03516
4 .02797 .02834
5 .02400 .02432

3. MCB Pyara Ghar

Some destinations require a long wait. Like waiting for a home of your own. But
with MCB Pyara Ghar it is now easy to step into your home and start living a real
life. MCB Pyara Ghar is an ideal Home Finance from your own bank that lets you
Purchase, Renovate or Construct your home the way you have always wanted.
Having your own home was never so easy.

Who Can Apply

Pakistani national residing in the city and area where the product is launched and
25 years old or above when you apply and under 60 at the time of maturity of the
applied financing period. Salaried person, self-employed professional or a
businessman with a verifiable businessman with a verifiable monthly income
stream. Net take-Home income not less than Rs.25, 000 per month, Have 5 years
or more of business or professional experience. Employed with the present
employer for 2 years with a total employment history of 5 years.

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Home Purchase Home Renovation Home Construction

Financing Rs. 200,000 to Rs. Rs. 100,000 to Rs. Rs. 200,000 to Rs.
5,000,000(flexible 2,000,000 5,000,000
Amount
up to 7m)
Debt to Equity 60:40 (3:2) 30:70 (3:7) 50:50 (1:1)
Ratio
Tenure 3 years to 15 years 2 years to 5 years 3years to 15 years

4. Easy Personal Loan

MCB Easy Personal Loan provides you with the financial advantage to do
things you've always wanted to but never had the sufficient funds for. Take that
much-needed holiday. Buy a car. Refurnish your house. Purchase a new TV.
Finance a better education for your children.

3.1.3 MCB Master Card

Since the beginning of time, people have tried to find more convenient
ways to pay, from gold to paper money and cheques. Today, money is moving
away from distinct hard currencies and towards universal payment products that
transcend national borders, time zones, and, with the Internet, even physical
space. Plastic or "virtual" money, credit, debit, and electronic cash products,
inevitably will replace cash and cheques as the money of the future.

3.1.4 MCB Rupee Traveler's Cheques

MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash
for traveling and travel related purposes. The product has been extremely popular
and is preferred over cash by customers while traveling and in all walks of life.
MCB Rupee Traveler's Cheques- The safest way to Carry Cash

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3.2 Corporate Banking

3.2.1 Cash Management Services

MCB’s network of over 900 branches in Pakistan enables it to collect and

disburse payments efficiently with its cash management services. This also
enables it to offer you a choice of paper based or electronic fund transfer solutions
including collection amounts, cross branch on- line transactions etc.

3.2.2 Working Capital Loans

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

number of different working capital financing facilities including Running
Finance, Cash Finance, Export Refinance, Pre-shipment and Post- shipment etc.
Tailor- made solutions are developed keeping in view the unique requirements of
your business.

3.2.3 Term Loans

MCB offers Short to Medium Term Finance to meet capital expenditure

and short term working capital requirements of our customers. The loans are
structured on the basis of underlying project characteristics and cash flows of the
business.

3.2.4 Trade Finance Services

Under Corporate Banking MCB offers trade finance services that include
an entire range of import and export activities including issuing Letters of Credit
(L/Cs), purchasing export documents, providing guarantees and other support
services.

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3.3 Online Services

3.3.1 MCB ATM Services

With a solid foundation of over 50 years in Pakistan, with more than 750
automated branches, 269 online branches, over 222 MCB ATMs in 41 cities
nationwide and a network of over 12 banks on the MNET ATM switch, MCB is
positioned at the forefront of the banking industry in Pakistan. This success has
been possible because of a never-ending drive to achieve higher levels of
excellence, constantly striving to raise the level of performance.

3.3.2 MCB Mobile Banking

At the forefront of technological excellence, MCB proudly introduces MCB

MOBILE BANKING. The convenience of accessing your account balance
information and mini statements whenever you want or wherever you may need
them, with comfort and peace of mind.

3.3.3 MCB Call Center

Keeping up with banking services can be tedious but not with MCB Bank,
where phone service is at your fingertips. Just dial our Call Centre from the
comfort of your home or office or wherever you happen to be. It offers basic
banking services for your convenience, eliminating the need for you to make
unwanted trips to your branch.

3.3.4 MCB Smart Card

MCB now brings you MCB Smart Card -a secure and convenient
instrument of payment with unmatched functionalities. It provides 24-hour direct
access to your bank account. The convenience and flexibility of MCB Smart
Card will help you live a smarter life. It not only helps you manage your
expenses, but also eliminates undue interest on your day to day credit card

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transactions. Your balance is always within your reach and you spend
accordingly.

3.3.5 MCB Debit Card

Now MCB brings a secure, convenient and quick payment facility that
enables you to do purchasing by using your existing MCB ATM / MCB Smart
Card as a DEBIT CARD.

3.4 Virtual Banking

MCB Virtual Internet Banking offers you the convenience to manage and
control your banking and finances – when you want to, where you want to.
MCB’s Virtual Internet Banking facility is simple and secure. And it’s free of
cost. With MCB Virtual Internet Banking you can access any of the banking
services, 24 hours a day, 7 days a week and throughout the year.MCB Virtual
Internet Banking offers a wide range of online services which makes your
banking accessible anytime and from anywhere

a. Detaile
d Account Summary of all listed accounts. Mini-statements of each of the listed accounts
showing recent transaction history for that account(s).
b. Statem
ent-by-Period of each of the listed accounts, based on the period specified.
c. Immed
iate or Scheduled Transfer of Funds between your own accounts, as well as to third-party
accounts setup as beneficiaries, maintaining accounts with MCB.
d. Schedu
ling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers.
e. Payme
nt of utility bills for registered Utility Companies.
f. Immed
iate or Scheduled Bills Payment. Scheduling of ‘One-Time’ as well as ‘Recurring’ bill

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payments. Option for ‘Full’ or ‘Partial’ payment based on the payment conditions
specified by a particular Utility Company.
g. Salary
to the corporate employees, who maintain accounts with MCB.
h. Bulk
Funds Transfer for Corporate Customers.
i. Chequ
e Book Request for any of your listed accounts.
j. Payme
nt/Transfer Alerts for reminding, in advance, prior to the processing of specified
payments and transfers. Personal Alerts for reminding of pre-specified events and
occasions.

3.5 Islamic Banking

3.5.1 Deposit Schemes

For customers who are looking for a deposit opportunity where they can
purse their funds and reap halal returns on it, we offer the following products:

1. Al-
Makhraj Saving Account

The minimum deposit requirement for Al-Makhraj Saving Account is only

Rs. 5000 and profits can be earned 6-monthly. Other features associated with this
product are as follows:
a. Minimum Initial Deposit: Rs. 5000
b. Islamic Tools used in designing the product: Mudaraba/ Musharaka
c. Product to be availed by: Individuals & Joint Account Holders (Local)
Companies, Corporate, Trusts, etc

Advantages

a. Withdrawal Facility from ATM/ Debit Card

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b. Online deposit as per bank's policy

c. 6-monthly profit payment on the basis of monthly declared rates
d. Issuance of duplicate statement of account (as per SOBC)
e. Free bank balance certificates (once in 6 months)
f. Taking stop payment/ hold mail/ standing instructions
g. No penalty if balance falls below minimum level.
h. Personal financial consultancy services (regarding Shariah Compliant
products)
i. Utility bill payment via ATM card
j. Choice
of statement frequency (as per Schedule of Charges)

2. Al-
Makhraj Ianat Account

For customers who are looking for a chequing account that gives them the
ease of doing unrestricted number of transactions, we offer Al-Makhraj Ianat
Account. With a minimum of only Rs. 10,000, Ianat Account may be opened.
With all the features and facilities that this product offers, it is highly
recommended for management of business funds.
Details of the product are as follows:
a. Minimum Initial Deposit: Rs. 10,000
b. Product to be availed by: Individuals & Joint Account Holders (Local),
Companies, Corporate, Trusts, etc
c. Banking Network: IBD's Branch only

Advantages

a. Personalized Cheque books

b. Withdrawal Facility from ATM/ Debit Card

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c. Online deposit as per bank's policy

d. Taking stop payment/ hold mail/ standing instructions

e. Virtual Banking

f. Call center facilities

g. Debit card; Utilities payment via ATM card

3. Al-
Makhraj Term Deposit

A minimum of Rs. 25,000 is required for investment in Al-Makhraj Term

Deposit. Choice of tenors can be made from a list of options namely 1, 3 & 6
months, 1 or 2years. Profit payment options available to customers are monthly,
quarterly and/ or at maturity.
Details of the product are as follows:
a. Minimum Deposit: Rs. 25,000
b. Islamic Tools used in designing the product: Mudaraba/ Musharaka
c. Tenors Available:1 mth, 3 mth, 6 mth, 1 yr or 2 yrs
d. Product to be availed by: Individuals & Joint Account Holders (Local),
Companies, Corporate, Trusts, etc

Advantages

a. For Customers = Profit Payment Options customized to suit needs of

customers; Minimum Deposit requirement’s lower than most banks so it is more
accessible/ affordable for people
b. Shariah = Meets requirements for Shariah Compliance

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c. Taking hold mail/ standing instructions for profit payments etc

d. Personal financial consultancy services (regarding Shariah Compliant
products)

3.5.2 Fund Based Facilities

1. Ijarah Products

MCB’s Islamic Ijarah, analogous to the English term 'leasing’, is based on

the ‘Ijarah waIqtina’ concept which means the sale of the asset to the lessee after
the Ijarah has matured. Under this scheme, MCB will be the owner of the asset,
and the customer (lessee) will be given the asset to use for a certain period of time
in return for monthly rental payments. MCB will give a separate unilateral
undertaking that it will offer to sell the asset to the customer (lessee) at the
maturity of the Ijarah agreement at a price that may be equal to the security
deposit amount, hence the term ‘WaIqtina’.

Types of Ijarah

a. Car
Ijarah
b. Equip
ment Ijarah

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CHAPTER# 4

DEPARTMENTATION OF MCB

Every organization in banking sector is divided into a number of departments.

MCB is divided into various departments. These are:

4.1 Cash Department

It deals with the flow of cash and records the receiving and paying of cash.
This department also deals with the selling and buying of govt. bonds and
securities. This department is also responsible for deposit and disbursement of
cash through cheques. For disbursement of cash this department accepts cheques.
Opened cheques are paid on the counter after verifying the signature of accounts
holder, which crossed the cheques are sent to clearing department for clearances.
This department on a printed form of MCB accepts, the printed form is signed by
the concern officers. The amount is then created to the account of the customer,
the cheques which does not fulfill the criteria, of MCB is rejected after specifying

27
Internship Report

the reason of rejection.

MCB may reject a cheque on the following grounds:
a. NSF
b. Chequ
e post-dated.
c. Chequ
e of outdates
d. Drawer
's signature differs
e. Amou
nts in words and figures differ
f. Payme
nt stopped by drawer.
g. Payee's
endorsement requirement.
h. Chequ
e manipulated.

4.2 Remittances Department

Remittance is the department in the bank through which the customers are
sent their money from one branch to any other branch, or from one bank to any
other bank in the country and with the foreign country banks.
The meaning of remittance of the word remittance is "sending out money". These
remittances are credited or debited to the accounts of customer after verifying the
branch code and the receipt of advice. This has very important for the business
either in the country, anywhere or in abroad.
The MCB remittances are taken place in the following ways:

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Internship Report

4.2.1 Demand Draft

The transfer of money, which is taken place on demand. It is of two kinds.

1. Dema
nd Draft Issues
When any person in Mingora Swat wants to send some amount to another
person anywhere in Pakistan, can use this cham1el. The branch is called
originating and the bank where this draft will be payable is called responding
branch.
Example:
MCB Mingora Swat is originating or issuing branch while Ghala Mindi
Lahore is responding branch where draft will be payable.

a. Proce
dure for Issuance
The person, who wants to send the money through D.D, will fill the
application form, for ail the channels i.e. T.T, MT, and pay order is the same.
Application form should provide the following information's:
• Branch
Code, Issuer Bank name, Date of Issuance.
• Type
of channels i.e. TT, MT, D.D and P.O.
• D.D,
T.T, MT etc are Name of responding branch.
• Benefi
ciary name and A/C no. i.e. who will receive the amount of draft, sender name,
address and phone no.
b. Char
ges Section
Commission
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Internship Report

A) Form Rs. 50,000 0.10% minimum Rs. 50/-

And postage charges Rs 75.
Example:
Jan wants to send Rs. 50,000 through demand draft. Commission = 0.10%
(50,000) = 50
Postage charges =75
Total =50,125
In this case the sender has to pay Rs. 50,000 face value of draft and Rs. 125
as charges. After filling application form, draft is filled and draft amount is
written in three places in the figure like Rs. 50,000/- and another in words like
fifty thousand only and on another place figures are printed on machine in Red
colour for safety purpose figures are taped so that if anyone want to make changes
in figures, he cannot done any change.
Now draft will be handed over to the customer. After giving draft to
customer, voucher is kept in DD issue register.
We record DD issue in this manner:

Machine Purchaser Favoring Amount Exchange Commission

no./series
Date S. No. / Beneficiar and postage
Remitter y name
Name

15/4/2007 59/14 12345 Jan Khan 50,000 125

Four vouchers are prepared containing all the information and signature of
authorized person. The bank for office record will keep one copy; and "another
one advice will be sent to the responding branch. At the time of receiving of cash
on counter in cash sheet record will be as follow:
Cash 50,000 (Dr)
H.O (G.M Lahore) Cr

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Internship Report

2. Demand Draft Payable

When advice sent by issuing branch reach to the responding branch i.e.,
We record in DD payable in this manner.

Date D.D No. Beneficiary Initial Date Paid Initial Remarks

Issued Name

15/04/2007 12345 Khan a/c 17/04/07

1430

When G.M Lahore branch receives actual Draft, bank will check at with advice
send by issuing bank in order to keep himself safe and avoid any fraud Bank should
check. Issuing date, beneficiary name, amount after this bank will credit the amount to
the account holder, and will pass the entry.
Ho ( Mingora) (Dr) 50,000
Cash (Cr) 50,000.

3. In Case of Demand for Cash

If DD holder wants cash at counter then bank will verify that either DD holder is
the actual beneficiary or not, verification may be 1hrough Identity Card, or guarantee of
some reliable person.

4. In Case of Lost
If some person losses DD, then bank will make payment only after verification or
in major losses amount is credited to the A/C holder name mentioned in the DD.
NOTE:
It is not necessary that the receiver of the draft must have account in that branch.
Such draft may be clear through transfer delivery state bank of Pakistan i.e. clearing
house.

5. Test is Must

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Internship Report

This is secrete code number with bank through which they verify that DD, TT,
MT etc. are free from fraud, this key is only known and available to the concerned
person.

6. Parties involve in DD
a. Purchaser: Is the person, firm, company or local authority. Issuing or Drawing
Branch: The Branch which issues a Draft on another Branch.
b. Drawee Branch: Is the Branch on which a draft is drawn.
c. Payee / Beneficiary

Draft
Remitter Beneficiary

Fund
receive
d

Draft

Advice
Issuing Branch Drawee Branch

4.2.2 Telegraphic Transfer

It is the fastest transfer of money. All the procedure for filling the
application form deposit cash at counter records in register is the same as for DD,
although there is some basic difference between DD & TT.
TT holder receives receipts as a memorandum from bank, which he has

32
Internship Report

deposited at the TT amount. In TT two number are mentioned i.e. TT No &

Remittances No.
Note:
TT No, can be extended beyond 100, but remittance a can be extended to
any digit, each year Remittance will start from 1. In TT we record in four books:

1. Day Book
When fax or telephone is received from issuing branch for our own
convenience we record it in this book, so that we could easily give response at
calling of TT Beneficiary that your TT is being received by our branch on dated----

2. TT Payable Register
Entry after recovery from another
H.O 200,000 Dr
TT Payable 200,000 Cr
TT Payable 200,000 Dr
A/C Jan 200,000 Cr

3. TT Received Register

Record in Daily Sheet

Commission and Telephone Charges is Bank Income:
Commission 10%
Telephone Charges Rs. 100/-
Postage's Charges Rs. 75/-
Procedure for records in register is the same as for DD, in TT issues register
all the TT are recorded one by one. So that we know at the end of the month that
many TT issued during the month of….
If T.T beneficiary has no accoUl1t with the bank, the bank will contact him by
Fax, Telephone and will make payment to him.

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Internship Report

Note:
Test information is must even TT is Rs. 1, no excise duty is taken on TT.

4. T.T transfer
TT transfer means amount of TT is not paid in cash on the counter, but
amount is deducted from his account, -such TT issues is not recorded in sheet of
Remittance section, but it will be only recorded in sheet of current and saving
account section entry.
Current Account-Khan 20,000 (Dr)
H.O-MCB Abottabad 20,000 (Cr)

4.2.3 Mail Transfer

Procedure for filling of application form depositing of cash, records, in cash
registers, preparing of voucher and advices in the same as for DD and YT. MT is
sent by post through T.C.S, which is reach to the responding branch within 24
hours. After receiving of advice, the branch will make payment or will give credit
to the account of beneficiary, no excise duty is charged on MY, while text
information is must in MT
If MY will not reach to, the bank, the MY holder will show the
memorandum receipt of the issuing bank.

4.2.4 Pay Order

Pay order is made for local transfer of money. Here no originating and no
responding branch will be shown. The payment will be made at the branch from
where pay order is issue. Pay order also comes for clearing from SBP. MCB
officials check it with register and debit the entry in the register. It is made for
payment of repairs etc.

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Internship Report

Charges:
Pay order charges are fixed where pay order amount is Rs, 10/- or 10,00,000
and above.
For A/C holder Rs 25/- pay order.
For non A/C holder Rs 501- pay order.

1. Draft Payment in Suspense Account

If payment to draft is made only on a presentation of original draft although
advice from issuing branch is still not received, bank is bound to make payment
and record it in suspense a/c as:
DD Paid suspense a/c (Dr)
Cash a/c (Cr)
Entry after receiving advice H.o (Dr)

DD Payable (Cr)

DD Payable (Dr)

DD Paid suspense (Cr)

4.3 Accounting Department

The job of this deptt. is that, it scrutinizes all types of reports. This
department also helps in transfer of cheques and preparation staff salary. The
reconciliation statement of each department is also prepared here.
This department in MCB performs the following main functions:

4.3.1 Staff Salary

After deduction of income tax and provident fund, the staff salary is
prepared on monthly basis by the account depmiment. The account department
also process medical claims. There will be deduction from loaner employee's

35
Internship Report

salary in installment with interest. Moreover the following functions are also
performed by account department:
It maintains record of all banking transactions of bank.
a. It daily prepares statement of affairs and the same is sent to the Head office.
b. After receiving the statements from the State Bank through Head office, accounts
department also prepares daily reconciliation statements.
c. It follows a predetermined method of depreciation, as MCB maintains different
types of asset depreciation by the account department.
d. Along with administrative function Account department also performs others
functions, such as scrutiny of reports etc.

4.4 Clearing Department

The clearing process is performed in the State Bank of Pakistan. This
department helps in clearing all those cheques on which they have made payment
on the behalf of other banks. The clearing is done twice in each day. All the
cheques related to MCB are brought in the morning. When the cheques are verified
because of account holder the same is returned in the afternoon session.
There are two types of clearing.

4.4.1 Outward clearing

“Outward clearing is to send the cheques to other branch”
There are three types of outward clearing

1. Same day clearing

In same day clearing send the cheque in the morning and receive the
payment in the evening,
There are two conditions in the same day clearing
a. Cheque will be 500000 or above

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Internship Report

b. Member of the same day

2. Normal clearing
In normal clearing send the cheque today and receive the payment next
day. No condition will impose in normal clearing like same day clearing.

3. Inter city clearing

Clearing between two cities is called intercity clearing. In inter city
clearing cheque will clear in two or three days.
To understand the process of clearing we first need to understand and comprehend
the workings and the purpose of the state banks institution called NIFT.

4. NIFT (National Institutional Of Facilitation Technology)

In the process of clearing NIFT plays a very important role. NIFT (national
institutional facilitation technology) has a very vital role as it is the “middle man”
in the purpose of clearing and issuances of cheque books to the customer on
demand of the bank or branch. This institution has been formed by the State Bank
of Pakistan and it performs the duties of receiving all the clearing cheques from all
the branches of all the banks and taking them to the state bank. At the SBP first the
NIFT forms a list of all the cheques from all the banks and then forwards it to the
SBP representative. That person categorizes all these cheques according to their
respective banks and branches and forms another list of his own. Then these sorted
cheques are again given to the NIFT agent and he then takes them to the head
offices of their respective banks and from there they are distributed to the
respective branches also through NIFT. This way NIFT delivers all the cheques to
their parent branch from which they have been issued.

FLOW CHART OF WORKING OF NIFT

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Internship Report

4.4.2 In Ward Clearing

In the morning time I am received the in ward clearing from the NIFT
employee and then I count the instruments which I received and match with the
summery which is also attached with these instruments. Than give these
instruments to the computer operator who posts these instruments, after posting
all these instruments then he again give me the instruments and I enter all these
instruments into the clearing sheet in his Debit side.

1. Memo on Cheques Return

Also prepare the Memo on (S.F 16) in which the details of objections are
given that for purpose we return this instrument, and charge RS 200/- per
instrument

2. Calculate the Difference Vouchers of Clearing

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Internship Report

Difference voucher means the difference between the Out ward Clearing
and In Ward Clearing. If the liabilities are outstanding on our side which means
that our branch will pay this difference amount than I will prepare the H-O Credit
Voucher, and if the Liabilities are outstanding on there side which means that now
we are receiving the difference amount so I will prepare the H-O Debit Voucher.
a. If liabilities are outstanding on our side than made Credit voucher
b. If liabilities are outstanding are on there side than madeCHQ
Customer Debit Voucher
holder

Gives cheque Goes where he has

his own
3. OfCalculate
MCB to the Difference Vouchers of Clearing Return
I have A/Cwhich are R.U.P
also made the difference voucher of those cheques
Other party
means Return Un Paid. Means those cheques which our branch is returned and
those cheques which other banks returned our cheques which we send for clearing
Bank keeps
and itAt
had been rejected
evening
CHQ and
If liabilities are outstanding on our side than made Credit voucher
Bank send
Makes
If liabilities
That CHQare to
outstanding are on there side than made Debit Voucher Than
Transaction
finally enter all these difference vouchers in to the clearing sheet and
balancing with the computer. So this the complete process of Clearing.

MCB receives

CHQ and checks

Name is mention The following
On CHQ Things

Their own branch instrument

FLOWCHART
NIFTOF INWARD CLEARING
transfer Date of instrument

Amount to the Date of clearing

Drawer bank Over writing

Amount in figures

Amounts in words

MCB Dr. the A/C 39

Of customer and

Cr. A/C of NIFT

Internship Report

4.5 Computer Department

The MCB also uses the computers very efficiently. Through networking
from one computer to another. The computer facilities, the communication
facilities, the MCB major branches are greatly full use of computer. Computers
are mostly used in MCB Online Branches. The Melody Branch Islamabad is also
one of the online branches of MCB network.

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Internship Report

4.6 Advances Department

Advance department is one of the most important and sensitive
departments in any bank. The MCB makes profit by advancing loans. Muslim
commercial Bank advances loans to individuals and business for productive
activities. In giving loan the bank keep in consideration the over all condition of
the long term trends, the government policies, the law & order situation and the
need of product for which the loan is required.

4.6.1 Different Types of Advances

Financial accommodation provided by the bank fall into two broad
categories namely:
1. Funded Facilities
Running Finance, Demand Finance, Cash Finance, Payment against
document, Finance against imported merchandise, Finance against Trust Receipt,
Export Finance, Foreign bills purchased and such facilities where funds are
provided to customers depend upon functions of the respective credit lines.

a. Running Finance
Various modes of Bank financing, credit lines afforded to customers under
the above head (Running Finance) are the most commonly used. Withdraws on
the current account are allowed in excess of the credit balance, which the
customer has maintained, thereby creating Running Finance.
In this type of financial accommodation the borrower is required to adjust the
finance provided by the bank with the stipulated expiry period.

b. Cash Finance
Finance is provided on mark up basis on reducing balance system as stated
earlier. It is provided either against pledge or hypothecation of goods, produce or
merchandise.

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Internship Report

c. Demand Finance
A fixed amount of financing accommodation is allowed 10 borrower for a
fixed period under the above classified, repayable either in periodic installments
or in lump sum at a fixed future date. This accommodation is extended in lump
sum for the mutually agreed period and the borrower has to pay the entire amount
of finance, together with mark-up the agreed rate.

d. Payment Against Documents

The importer has to enter into an agreement with the bank to meet his
obligation to purchase the import documents at marked-up price in the non-
interest based system. The documents as per mark-up agreement would be
purchased by the bank and sold to the importer at marked up price when as import
bill is received and lodged, two types of transactions shall be deemed to have
taken place i.e. purchase and sale of import documents.

e. Finance Against Imported Merchandise

Financing against import is established through letters of credit on the
basis on mark-up for a short period. According to it facilities an available not
exceeding from sixty days.

f. Export Finance
Export refinance facility is available to banks from State Bank of Pakistan
under the Export Refinance Scheme at low rate of mark-up. The government's
policy is low mark-up rate in order to boost the country's exports.

2. Non-Funded Facilities
Non-funded facility is also known as "contingent facilities" e.g. letter of
credit, letter of guarantees and Bonds. MCB formulated various instructions based
upon extracts from various Head office circulars.

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Internship Report

4.7 Foreign Exchange Department

Foreign Exchange business arises primarily from trading and trade related
transactions, although investment monies, dividends and royalty payments as well
as gifts, legacies, loans and interest payments, give rise to very substantial flow of
funds moving from one currency to another. For each international trading
transaction either the importer or the exporter and sometimes, both, will be
involved in a foreign exchange operation, unless one or both maintains a foreign
currency account.
MCB Mardan main Branch deals in foreign exchange. The bank opens
letter of credit for importers and exporter. Letter of Credit is a conditional
undertaking by the bank that it will pay on behalf of the customer to the exporter.

4.7.1 Import
This department provides the facility to their customers to import
machinery or products from other countries. It is necessary for the importers to
have the licenses, which is issued by the chief controller of imports and exports.
Before obtaining an import license the license must be registered with the chief
controller of import and export. For having the license, an individual or firm
submits the application through his bank.

Documents Required
a. Filled application form for Register

b. The National Identity Card of the applicant

c. National Tax Certificate issued by the Income Tax department

d. In case of firm or company, the Memorandum and the Article of Association.

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Internship Report

e. Banker issues the letter of credit normally in the response of the Performa
Invoice. The seller sends this invoice to the buyer and it contains seller name,
product quality. Rate, mode of shipment, and other terms and conditions.

1. Letter of Credit

A letter of credit is a written instrument issued by a bank authorising the

seller to draw in accordance with certain terms and stipulating legal forms, that all
such bills will be honoured.

A letter of credit is a: Written undertaking by importers bank to a third party i.e.

the exporter.

• That it will be pay or accept draft (letter of credit) drawn upon it up to a started
sum of money within a specified time.

• That the payment will only be made to the exporter if he complies with the
specified terms of credit.

a. Reasons For L/C

• The exporters are uncertain of the importer capacity to pay.

• The importers are unwilling to pay the amount unless the goods are actually
shipped and the documents received by the bank.

• In case of non-payment the seller should be assured to legal rights in foreign

country.

• There should be an agency, which should meet the seller’s need of finance when
the goods are shipped.

• The commercial banks come to the help of exporters and importers.

• The importers can undertake the obligation to pay to the exporter for the purchase
made by the importer and this is usually done through a letter of credit.

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Internship Report

b. Parties Involved in a Letter of Credit

There are four parties involved in a letter of credit

• Account party or Importer

The buyer or the importer on whose account and request the letter of credit
is opened is known as account party.

• Issuing party
The bank, which issues or opens a letter of credit at the request of
importer, it is called the issuing bank.

• Exporter
The seller or the party in whose favour the letter of credit is draw is the
third party and it is also known as beneficiary.

c. Types of Letter of Credit

• Irrevocable letter of credit

It is the one in which the issuing bank gives a lasting undertaking to accept
and in due course to pay bills drawn upon it provided the exporter fulfils the terms
and conditions. It gives a complete protection to the exporter.

• Revocable letter of credit

It is the one in which can be modified or cancelled by the issuing bank at
any time without any obligation on its part. They are not acceptable to the
businessman

• Confirmed letter of credit

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Internship Report

It is that which has the protection of the credit standing of the importers as
well as the exporter’s bank. The exporter bank, which confirms the letter of credit,
takes the liability of paying in case the issuing bank fails to make payment to the
exporter.

• Unconfirmed letter of credit

It is one under which the exporter’s bank does not give any guarantee to
the exporter that the bills drawn will be honoured by the issuing bank. It is the
commitment of the issuing bank to honour the draft. From the exporter’s point of
view, the confirm irrevocable letter of credit is the best form of receiving
payment.

• Documentary letter of credit

It is the one of which provides for bills to be accompanied by documents
of title to goods such as the bills of landing, invoice, the policy of insurance etc.

d. Opening of Letter Of Credit in MCB

Before opening of L/C certain requirements are necessary that are

• The applicant must has import registration #

• He must has account in that bank

• He must pledges his security against the L/C amount

• He must have IB-8 form, indent or agent form, and performance invoice.

e. Bank Charges

• The bank takes commission @ 0.40 % of amount of L/C for one quarter and
0.25% for two or more quarters.

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Internship Report

• If L/C amount is low then minimum bank commission is RS 500/-

• Postal charges are RS. 1200/-.

• Stamp duty is calculated @ 0.50% of L/C amount.

• Mark up is calculated at RS 0.50 per day per 1000.

4.7.2 Export
Usually the exporter does not rely on the credit of a banker in the country
of importer, and insist on a confirmation from a banker carrying on business in his
own country. Thus this department of a bank helps the exporters to settle down
their financial affairs. For exporting it is necessary for exporter to get export
license from the chief controller of import and export after registration.

Documents are required for the registration such as N. I. C. Card, income

tax certificate, bank certificate which shows that the exporter is his account holder
and have a good dealing with them. In response to the letter of credit exporter
submit the following documents to the negotiating bank.

a. Bill of exchange

b. Invoice

c. Bill of lading or Airway bill/railway receipt/truck receipt

d. Insurance documents

e. Packing list

f. Any other documents, if so required.

g. The negotiating bank will send the same documents to the issuing bank. In
accordance with the terms and condition laid down in letter of credit.

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Internship Report

1. Security of Documents
Whether documents received are meant for the opening bank and
specifically for the branch which established the letter of credit. The documents
would be negotiated within the validity of L/C. The goods have been shipped
within the time allowed under L/C. The goods are mentioned in invoice and other
documents (e.g. bill of lading, packing list etc) are in accordance with
merchandise clause L/C. Whether the documents received pertains to L/C,
established by the opening bank and the documents negotiated are within or equal
to L/C amount. In case where the value of documents exceeds the L/C amount,
the foreign bank may negotiate the documents for amount being marginally
excess or sends them on collection, remittance may be allowed in excess subject
to the following conditions.

a. The amount does not exceed 5% of the amount of L/C subject to the
maximum of US$ 500/-

b. The importers hold a valid import license against which the excess amount
is adjusted-provided remittance is affected within 1.5 year from the date of issue
of import license.

c. The name of the importer on the bill of exchange does not differ from that
on the import license.

d. The tenor of the bill should be valid.

e. See that the goods are not shipped prior to the date of opening of L/C or
the documents are not stated.

f. The goods are consigned or endorsed in the favor of the bank only
opening the letter of credit, and in no case it should be consigned to the importer
directly.

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Internship Report

2. Retirement of Documents
When the opening bank against a letter of credit receives documents. The
customer retires the documents under different arrangements e.g.

a. Retirement against payment by the importer

b. Retirement of documents in case of None-payment by the importer

c. Retirement of documents under trust receipt

4.8 Lockers
Basically it is a facility which is provided by the bank to its customers in
order to secure there money gold important property documents etc. before this
locker concept people are very much worried about the lose of there money, gold
and important documents so now the people are very much relax because now
they use this facility quite frequently.

4.8.1 Issuance of License

It is not an easy task to get the licence of opening the locker facility in the
branch for every bank, for this purpose the bank should get permission from State
Bank of Pakistan who is the banker’s bank; with out his permission no body can
provide this facility to the customers. The branch who wants to get licence he
must sent a written request letter to State Bank than the state bank officer visit this
branch and see that is there enough place to provide the licence of lockers to this
branch or not? If they are satisfy they charge the licence fee from this branch.

4.8.2 Types of Lockers

Small Size (Rent RS 1400 per Annum) 16% FED Rs.224
(Key Security Rs.2000)

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Internship Report

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

(Key Security Rs.2000)
Large Size (Rent RS 3500 per Annum) 16% FED Rs.560
(Key Security Rs.2500)

4.8.3 Insurance of Lockers

Bank will also pay the insurance on behalf of this lockers so in case of any
bank misshape then the insurance company will accept the certain claim but it
depends open the size of the lockers
Small Size Locker Claim up to RS 500,000/-
Medium Size Locker Claim up to RS 10, 00,000/-
Large Size Locker Claim up to RS 15, 00,000/-

4.8.4 Renewal / Expiry of Lockers

Usually the time period of this facility is one year, at the end of the time
period the bank will ask to the client that weather he will continue this facility or
not if the customer says yes then he will pay the charges again in order to use this
facility which is provided by the bank.

4.8.5 Procedure of Use of Lockers

One key is given to the customer and the other key is handed over to any
bank person who is the authorized person, and the locker is opened with both
keys.
The authorized person who keeps keys He/She note following things
a. Customer name
b. Signatures of customers
c. Time of lockers operating
d. Account number
e. Leaving time

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Internship Report

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

CHAPTER # 5

WORK PERFORMANCE DURING INTERNSHIP

My internship provided me a great opportunity to learn & experience
different banking practices. During the six weeks of my internship I got a good
chance to see what the actual banking is regarding the operations performed at my
branch i.e. account opening, remittance, clearing and deposit department.

5.1 1st Week:

During the first week of my internship, I learnt the following things.

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Internship Report

5.1.1 To open the Account:

During my internship, I opened two types of account;

1. Singl
e Account:
I monitored three types of accounts under this head along with
documentation required for these accounts.’
a. Accou
nt of a literate person
b. Accou
nt of a salaried person
c. Accou
nt of an illiterate person

2. Joint
Account:
Besides opening this account I was provided with the following
information regarding JOINT ACCOUNT by manager ops.
how a joint account is affected by the death of one joint account holder:

3. Partn
ership Account:
I did not open this account personally, but I know the following regarding
PARTNERSHIP ACCOUNT.
a. Docum
ents needed to open this account
b. Moreo
ver the operation manager told me these things regarding the partnership account:

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Internship Report

• Death
of a partner:
• Admis
sion of new partner
• Docum
ents required in case of a new partner

5.1.2 Account Maintenance Activities:

Related to the account maintenance activities, i have learnt these things:
1. Chequ
e book issuance to the existing /new account holder:
2. Issuanc
e of smart card (ATM) to the existing/ new account holder:
Other things which I have learnt about ATM involve:
a. ATM
Card Categories
b. ATM
Card Features
c. Fund
Transfer via ATM
d. ATM
Card Charges
e. Deliver
y & Custody of ATM Card

5.2 2nd Week:

My 2nd & 3rd weeks of internship were at remittance department, where I
learnt the following things:
1. Study
of different types of vouchers related to the TRANSFER

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Internship Report

2. To fill
a voucher for online transfer
3. Online
transfer via cheque
4. To
issue a demand draft via cheque
5. To
post the voucher for online transfer & DD
6. Got
some information about pay order from the relevant officer
7. To
make a TT to transfer access money to the head office

5.3 3rd Week:

1. To
make the online transfer voucher via cash
2. To
post these vouchers
3. To
issue a DD via cash
4. To
post the vouchers for this DD
5. Study
of cash book
6. Study
of cash position book
7. Visit to
strong room
8. How
the cash is maintained in strong room

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5.4 4th Week:

My 4th week was in the cash cabin and I performed following work there:
1. How
he checks the daily vouchers related to transfer, cash and clearance departments
2. I have
some idea about the opening & closing of bank but not have a through grip on it.
3. How
the manager ops authorize various transactions
4. I also
have some idea about the DAILY GENERAL LEDGER REPORT

5.5 5th Week:

During the 5th week, I worked with the operation manager and learnt about his
working.
1. Issuanc
e of RTC (Against Cash)
2. Issuanc
e of RTC (Against Account):
3. Encash
ment of RTC
4. Chequ
e deposit & withdrawal through clearing

5.6 6TH Week:

I did miscellaneous work in the last week of internship:
1. What is the function of a feeding/pooling branch?

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2. What is the inter branch Dr/Cr advice

3. Study that how CDRs are issued
4. How an account is made exempted from ZAKAT.
5. Study of key book

CHAPTER# 6

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FINANCIAL ANALYSIS

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6.3 Ratio Analysis

The term “ratio” means, “the relationship between any two variables”,
while analysis is a tool, which is used for checking the over all performance of
any organization. In other words, the ratios analysis is used to identify the
financial strengths and weaknesses. For this purpose, we use ratio analysis of
financial statements such as, balance sheet and income statement. However, “ratio
analysis is a tool, which involves methods of calculating & interpreting financial
ratios to analyze and monitor the firm performance”. There are many ratios such
as liquidity ratios, profitability ratios, debt ratios, activity ratios. For this purpose,
we use data from 2007 to 2009 of annual reports of the MCB, to check the
liquidity, leverage and profitability.

6.3.1 Profitability Ratios

This ratio examines the relationship between the profits made on trading
activities against the sales. It is the indication of business ability to use capital,
labor & management to generate profit. There are many ratios of profitability,
such as ROA, ROE and EPS which is given as under;

1. Return on Assets (ROA):

Net Income / Total Assets * 100
2007 2008 2009
Net Income 4,105,83 4,198,06 1,032,816
Total Assets 82,504,652 85,467,274 93,386,336
Ratio % 0.50% 0.49% 1.11%

Interpretation of Return on Assets (ROA):

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The ROA is gradually increasing from 2007 to 2009 due to increase in the
amount of total assets and total income. The ROA in 2007 is lower from the rest
of the year which is 0.50% that shows a bank can earn less money on more
investment. The ROA is gradually decrease to 0.49% while sharply increase to
1.11% in 2009, that shows a bank can earn more money on less investment. The
Higher the ROA ratio shows that the bank has efficiently managed its assets
portfolio to earn a more money on total assets, achieving economic efficiency &
more opportunities of financing in the year 2009 as compared to the rest of years.

2.
Return on Equity (ROE):
Net Income / stockholder’s Equity * 100
2007 2008 2009
Net Income 410,853 419,806 1,032,816
Equity 13062397 13600171 14955492
Ratio % 9.29% 8.25% 13.65%

Interpretation of Return on Equity (ROE):

The ROE is moderate in 2007 which is 9.29% & gradually decreased to 8.25% in
2008 due to the lower in income. Any how, the ROE is sharply increased to
13.65% in 2009 due to increase in the amount of total income and stockholder’s
equity. The highest ROE indicates that bank can earn a high return on less equity is

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generating cash internally. The higher the ROE ratio, the greater will be the
opportunities to earn high return & consider to be favorable while lower the ROE
ratio, the lower will be the opportunities to earn low return & consider to be
unfavorable.

3. Earnings Per Shares (EPS):

Net Income / Total No. of Ordinary Shares * 100
2007 2008 2009
Net Income 4,105,83 4,198,06 1,032,816
Ordinary Shares 1,186,961 1,186,961 1,186,961
Ratio % 34.6% 35.36% 87.0%

Interpretation of EPS:
The EPS from 2007 to 2008 is gradually increasing from 34.6% to 35.36%
respectively. A small increase is seen in 2008 due to increase in net income which
is 419,806. While in 2009, the EPS is sharply increased to 87.0% due to further
increase in net income with same amount of total number of ordinary shares.
Higher the EPS indicates that the MCB can earn on behalf of each share, but not
the amount of earnings actually distributed to shareholders.

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6.3.2 Liquidity Ratios

It is measured by its ability to satisfy short-term obligations when they
become due. There are many ratios of liquidity such as, current ratio, quick ratio
and networking capital, which is given as under;

1. The Current Ratio:

Current Ratio = current assets/ current liabilities = times

2007 2008 2009

Current Assets 75,145,219 75,550,076 82,964,819
Current Liabilities 57,341,925 57,450,253 59,177,412
Ratio(times) 1.31 1.32 1.40

Interpretation:
If we interpret the current ratio of the MCB, it is slowly increasing from 2007
to 2009. The current ratio in 2007 lower than rest of the years which is 1.31 which
means that the bank is able to pay the current liabilities 1.31 times from its current
assets. In 2008, the current ratio is 1.32 and then sharply increased to 1.40 in 2009.
However, the higher the current ratio, the more the bank is considered to be liquid
in order to satisfy short term obligation.

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2. Quick Ratio:
Quick Ratio= Quick Assets / Current Liabilities * 100

2007 2008 2009

Quick Assets 22,219,933 14,711,019 21,651,813
Current Liabilities 57,341,925 57,450,253 59,177,412
Ratio% 39 % 26% 37%

Interpretation of Current Ratio:

If we interpret the quick ratio of MCB, it is higher in 2007 while lower in 2008.
The quick ratio of 1.0 or greater is occasionally recommended but for the
organizations, the quick ratio cannot provides a better measure of overall
liquidity only when a firm’s inventory cannot be converted into cash, because
the short term investment is lower than short term financing from 2007 to 2009.

3. Net Working Capital (NWC):

Total Current Assets – Total Current Liabilities

2007 2008 2009

T.C.A 75,145,219 75,550,076 82,964.819
T.C.L 57,341,925 57,450,253 59,177,412
N.W.C 17,803,295 18,129,823 23,787,407

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Interpretation of NWC:
The NWC of the MCB from 2007 to 2009 is increasing gradually and has positive
working capital & considering favorable, because the total current assets are
greater than total current liabilities and the bank is better able to pay its short term
obligation as they become due. On the other hand, if total current assets are lower
than total current liabilities, the firm has negative working capital & considering
unfavorable. In this case the bank is not able to pay its short term obligation as
they become due.

6.3.3 Leverage Ratios:

It measures the firm's ability to repay long-term debt that is used in a firm’s
capital structure. There are many ratios of leverage; i.e. debt ratio, total debt to net
worth ratio & time interest earned ratio which are given as under;

1.
Debt Ratio:
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Internship Report

Debt Ratio = Total Liabilities / Total Assets * 100

2007 2008 2009

Total Liabilities 69,442,255 71,667,103 78,430,844
Total Assets 82,504,652 85,467,274 93,386,336
Ratio % 84.17% 83.85% 84.00%

Interpretation of Debt Ratio:

The debt ratio of the MCB in 2007 is 84.17%, which is a highest from the rest of the
years while lower in 2008 which is 83.50% and then gradually increase to 84% in 2009.
The high the ratio, the more the bank is risky & having more leveraged while low ratio
will leads a firm less risky & having less leveraged. The high leveraged consider to
beunfavrable if the creditors of the bank can start to demand repayment of debt.

2. Total Debt to Net Worth Ratio:

Total Liabilities / Net worth * 100
2007 2008 2009
Total Liabilities 69,442,255 71,667,103 78,430,844
Net Worth 13062397 13600171 14955492
Ratio % 5.32% 5.27% 5.24%

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Interpretation of Total Debt to Net Worth Ratio:

If we interpret the debt to net worth ratio of the MCB, it is gradually decreasing
from 2007 to 2009. In 2007, the debt to net worth ratio is greater form the rest of
the year which is 5.32% while lower in 2009, which is 5.24%. In 2009, the MCB
can improved the debt to net worth ratio, which is 5.24% and is lower &
considered to be favorable from the rest of the years. The higher the debt to net
worth ratio, greater will be the business is considered to be risky and consider to
be unfavorable. The lower the debt to net worth ratio, lower will be the business is
considered to be risky and consider to be favorable. The high leverage usually
indicates the business has a lot of risk because it must meet principal and interest
on its obligations.

3. Time Interest Earned Ratio:

EBIT / interest Expanse = Times

2007 2008 2009

EBIT 5,184,713 5,466,642 5,680,759
Interest Expanse 4,467,677 4,819,839 3,866,247
Ratio (Times) 1.16 1.13 1.47

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Interpretation of Time Interest Earned Ratio:

The time interest earned ratio of the MCB in 2007 is 1.16 which is lower from the
rest of the years while highest in 2009 which is 1.47. The higher the time interest
earned ratio, the bank is better able to fulfill its interest obligation. In 2009, the
time interest earned ratio is improved due to the highest amount of the earning
before interest & taxes as compared to other years.

CHAPTER# 7

SWOT ANLYSIS

A SWOT analysis is an important tool to analyze the overall situation in which

organization is conducting its affairs. Each issue remains relevant and useful for
corporate strategy formulation.

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The Threats, Opportunity, weakness and Strength in summery can be stated for
MCB as below:

STRENGTHS
1. MCB is Successive and Market oriented.
2. MCB investing huge sums on HR development and training.
3. Customer default rate is lower as compared to other banks.
4. MCB has the largest ATM network in the country.
5. Meeting the challenges of latest Technology by introducing Smart card
remit express, mobile banking etc.
6. One of the major strengths of MCB is that it has very stable deposit base.
7. MCB is largest private bank in Pakistan with around 1000 branches, which
cover almost every part of Pakistan.
8. The bank enjoys competitive advantage over other banks in Pakistan.
9. The bank enjoys competitive profitability in the industry.
10. MCB has captured majority of potential customers in Pakistan.
11. MCB has the accounts of big organizations like OGDCL, PTCL, EFU,
PTC etc.

WEAKNESSES
1. Low motivational level
2. Employees, dissatisfaction due to ill treatment and improper reward
system.
3. Favoritism and Nepotism in recruitment.
4. High Employees Turnover.
5. Decision making process is very slow.
6. It is not having greater no. of branches abroad.
7. Though ATM network is the largest in Pakistan, still some potential areas
don’t have the ATM.
8. MCB RTC is useable only in Pakistan.

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9. Some management positrons needed are not professional.

10. Although most of the branches are computerized now, still some important
branches don’t have computers.
11. Less efficiency of SYMBOL System due to disconnectivity

Opportunities
1. Leasing sector is growing in Pakistan for the last two to three years which
provides opportunity to MCB to go ahead in this area as well.
2. MCB is providing Consumer Finances at comparatively lower rates which
paves a way to grab more customers
3. Financing to small/medium cottage industries will definitely increase its
advances and profitability as well.
4. Islamic Trading Based Banking can enhance the business of the bank.
5. Overseas Operations.
6. Launch the more effective and modern banking online system.

THREATS
1. Other private commercial bank with sound profitability is also a threat to
MCB e.g. UBL, Alfalah, HBL etc.
2. For the last of many years, Pakistan is facing economic and political
instability which is a big threat.
3. Afghan war and Iraq war has a deep effect on the economy of Pakistan,
which may affect MCB.
4. Foreign banks are flourishing in field of consumer financing.
5. People don’t prefer banking culture. They mostly prefer cash transactions.
6. New competition in Domestic & Foreign Markets.
7. Political instability results in inconsistent bank policies.
8. Cutbacks in Compensations for the employees.
9. Demoralized staff.

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CHAPTER# 8

RECOMMENDATIONS

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

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First of all, the management needs to overlook the major problems that the
organization is currently facing and then develop strategies to eradicate them.
Some of the suggestions that I would like to give at the end are:

1. Promotion and Mass Media Publicity

MCB Bank can improve its Marketing strategies to acquire more promotion and
mass media publicity by the use of effective channels of promotions like TV,
Newspaper Advertisements. It can also improve its magazine publication that it
releases each month.

2. Need introduce friendly Products

In order to compete in the ever-expanding market both nationally and
internationally, introducing new and efficient products is one of its major
requirements.

3. Centralized Structure
Centralized Structure that enables employee involvement needs to be formed.

4. Better Reward System

Better reward system is one of the most important requirements in order to reduce
the problem of Employee retention and improve Employee motivation.

5. Continuous Training of Employees

a. Creation of enhanced performance appraisal system
b. Implementation of enhanced Marketing system
c. Continuous lecture on better communication of staff with customers

6. ATM Machines Maintained

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ATM machine must be maintained properly to make it more convenient for the
customers and to decrease the load of work to the employees of the bank
especially in the salary days.

7. Staff Member
I have observe during working that there need of more staff due to pressure of
work MCB should hire more employees for better performance even any
employee when take leaves Manager has no choice to his work to other employee
so this situation built high pressure.

8. Symbol System
To make the SYMBOL system more efficient and make sure its connectivity all
the time in order to provides more convenience to customers.

9. Job Rotation for Employees

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

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CHAPTER# 9
IMPLEMENTATION/ACTION PLAN
Every organization has its own strengths, weaknesses and possesses opportunities
for improvements. Nothing is impossible in this world, as someone has rightly
said, an impossible is often untried”.
Here are the implementation/action plans for the recommendations concluded in
the previous chapter.

9.1 Business Development Plan

In order to develop the implementation procedure to reach business development
objective, the following steps should be taken:

1. Campaigns to open more Accounts

The volume of business, profits and size of bank depends significantly upon the
number of account holders banking with it. In order to increase the number of
accounts, There should be a clear market plan. The strategy should be to either
penetrate a new market or increase the share of a given market.
The staff, branch managers and executives involved in business development
should prepare lists of different groups of prospective account holders and their
neighbors, friends and influential people and make efforts to open their volume of
business and deposit composition. This should be done in coordination with the
various branches of the Bank.
The campaign to op0en more and more accounts should be launched on yearly
basis by fixing monthly targets to open new accounts, and targets should be
reviewed after every month by the circles concerned in the Head Office

2. Campaigns for Mobilization of Deposits

Deposits are the main source of commercial bank funds and without them
banks cannot exist. It is very important for an individual bank to get funds, as
its one basic function is to put them to work safely and profitably.

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The act of attracting funds is important but, likes so many other processes of a
salesmanship, is intangible. The bank can get funds by advertising for them, by
direct salutation, by contact through their officers, managers and executives.
Thus, they can get the customers and hold them ultimately by furnishing the kinds
of banking services that depositors feel is what they want should have.
One of the best ways to retain deposits and increase is by courteous and efficient
services for the satisfaction of the needs and requirements of the customers,
because:
“A satisfied customer is a best advertisement”.

3. Campaigns to Increase Business Share

Campaigns to secure highest share of business like imports, exports, issuance of
guarantee, remittances, bills identification of productive, secure and easily
realizable advances etc. should be launched. The management of the bank should
prepare a business developments plan strategy by taking into accounts the overall
market position of the banks in the business, the market share of the Bank and the
proposed plan to achieve the market share in the banking industry. In the light of
the market share, business development targets should be fixed on annual basis by
fixing monthly targets for imports, exports, issuance of letters of guarantee, bills
etc. The achievement of targets should be reviewed every monthly by the
respective circles at the Head Office and necessary instruction and guidelines
provided to the respective area control and zones where the business
performances are not accordingly the set targets.

4. Training of Personnel
We all know that the profitability, growth and survival of a bank depend upon the
business development. Therefore, the Banks should take steps to impart training
to the probationary officers, senior officers, managers and executives in modern
business and public relation. s
Business development training is the process of imparting knowledge creating
skills and shaping attitude, work habits, and consists of testing, showing and

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teaching the trainee and then monitoring his/her results and making constructive
correction.

9.2 Market Research & Analysis Plan

Before launching any venture or expansion plan, a detailed market
research/analysis must be carried out using any and/or of the following methods:
a. The best method is collecting first hand data from potential market
through surveys. The questionnaires must be unbiased and should not prompt the
desired result.
b. Historical data, if available could be very useful in determining the
potential and trends.
c. In case, the lack of awareness about the service or non-existence of
historical data makes it impossible to conduct a research, data of the location,
which have similar or close characteristics, can be used.

9.3 Product Development Plan

The method to achieve strategic objectives is to develop new products or services
to meet he needs of a target market segment. New product development plan of
the Bank should incorporate the following:
a. A description of the key elements of the new product or service.
b. The return on investment to be achieved at certain specified demand
levels.
c. Degree of exclusivity of schemes to be developed.
d. Effects on existing schemes or services and whether alternatives are
available by upgrading or improving existing products.
e. Printing and packing techniques that may be incorporated in the new
service or scheme in order to increase sales of existing service.
f. Interest rates of the new scheme or new service.

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9.4 Plan for Monitoring & Evaluation of Systems

The systems and procedures of the Bank must be dynamic, flexible and subject to
continuous monitoring and evaluation. The pre-requisites of an effective
monitoring and evaluation process are as follows:
a. A good , open and unbiased feedback system should be established to
identify the problems and suggesting improvements.
b. The feedback system must include the customers and all the staff members
from top to bottom within the Bank.
c. The feedback system must allow both, as needed and fixed interval
information.
d. The problems and errors must be analyzed and removed. The suggestions
should be discussed at all concerned levels and implemented if found useful.

9.5 Performance Evaluation Plan

Periodic performance evaluation is very important function to be performed. The
objective of evaluation must not be limited for salary review only. It should
include and be performed in the following manner:
a. Objectives for each employee must be clearly defined in a measurable
quantifiable manner.
b. A methodical system must be adopted, whereby the employees also
participate in the evaluation process.
c. The system must be such that where the performance against the given
objectives can be measured numerically,
d. The performance review must be done at short intervals say quarterly. The
periodical performance reporting and meetings could be effective tools.
e. The performance review must be aimed at improving employees, skills
and productivity by identifying training needs.
f. The system must be adopted where personal liking and disliking could not
pave through.

9.6 Hiring Process & Job Description Plan

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The human resource people believe that the failure of sub-ordinate is in fact
failure of manager as either he/she has not made the right selection or he/she has
not able to manage the will. The problem could be in the hiring process or unclear
job description. To enable employees most productive at all levels the Bank
should improve its hiring process and job description.
This can only be attained through the following.
a. Requirement analysis of the position.
b. Preparing qualification and experience specification in accordance with
the objectives to be from achieved the position.
c. Implementing standardized selection criterion.
d. Offering reasonable compensation package in accordance with job of the
existing, experience, and qualification keeping in view the salary packages of the
existing stuff at the level.
e. Preparing detailed job description.
f. Arranging detailed orientation programmers.
g. Setting objectives for the period.

9.7 Internship Programmed Plan

Although the above selected method would help the selection of right employees
a lot, yet there are chances that candidates having stupefaction knowledge can get
through and be selected. Thus a lot of organization resources in term of time and
money have to be spent on them for their proper training.
One of the best and cost effective methods to select the right kind of people is to
hire graduates from business and management’s schools as internees. The
internship programme should spread over a period of at least six months. During
the internship period, a close watch should be kept on the internees. At the end of
the internship period, the performance of the internees should be evaluated and
competent, diligent and energetic internees should be hired on permanent basis.

9.8 Customer Retention Plan

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Retaining a customer is more difficult than acquiring a customer. Any disruption

in continuity and quality of the service may result in a quick chum in the presence
competitive environment.
a. The bank should set up the following for customer retaining:
b. Effective and efficient complaint management system.
c. Customer feedback system through independent source.
d. Effective and efficient management information system.
e. Proactive curtsy calls.

CHAPTER# 10

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CONCLUSIONS

With Cooperation of all branch members, I have been able to learn and experience
many new things related to the banking sector and the banks workings. I am able
to handle the public with respect to many different workings on many different
instances and also in account opening for customers and can handle many other
tasks as well.
Finally I concluded that MCB is a good organization for a person for his long
term career workings. Overall working and environment of the bank is very
comfortable and the staff is very helpful and respectful of each other and it still
maintains a professional environment. Management of the bank is very strong.
Employees of MCB New General Bus Stand branch, Sargodha work more than
their working hours and all the workings take place in a very friendly atmosphere
that does not induce pressure on the person working there. It also shows their
loyalty and commitment to the organization. This branch of MCB relatively small
and has climbed its way up very quickly and all that only because of the
employee’s efforts and consideration for each other
Understanding and the effective management of the human resources is the most
difficult challenge faced not only by the bank but by all the organizations. Even
though the people have been sacrificed in the new organizational developments, it
is becoming clear that the true lasting competitive advantage comes through
human resources and how they are managed. MCB seems to not focusing on this
highly critical issue as the job satisfaction level of the employees working at
MCB, was quite low.

LIST OF PERSONS INTERVIEWED

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Name Job Title Employee No

Arshad Mahmood Branch Manager 029016

Rasheed Ahmad Manager Operation 021105

Miss Sidra Bashir General Banking 3E-0195

Mr. Akhter Pervez General Banking Officer 019219

Miss. Nazish Paul Chief Cashier 030948

BIBLIOGRAPHY

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BOOKS

1. Brigham F. Eugene and Joel F. (2001). Fundamentals of Financial Management.

Indian Edition: Harcourt Asia PTE. Ltd, Dehli.

2. Horngren, Sundem. (1999). Introduction to Financial Accounting. New

Jersey: Pentice Hall Press.

3. Block, Stanely B and Hirt, Geottrey A. (7th edition) Foundation of

Financial

ARTICLE AND REPORTS

1. Banking sector grows by 21.8%”, Daily Times

2. Small banks in the private sector gear up for mergers, acquisitions” by MONEM
FAROOQI, February 10, 2005

3. Muslim Commercial Bank, Brochures of products & Services.

4. Muslim Commercial Bank, (2008). Annual Report, Karachi.

5. Muslim Commercial Bank, (2009). Annual Report, Karachi.

WEBSITS

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

2. http;//www.goggle.com

ANNEXTURES

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Annexure- I

Current level of front-end load and back-end load and the

management fee effective for the fund

Front-end Load:
2.50% of Par Value or Net Asset Value, whichever is applicable, on Class “A”
Units

Back-end Load:
5.0% of Net Asset Value at the time of redemption of Units including Bonus Units.
Any change in the load structure shall be notified to Unit Holders through
by publication in a widely Circulate newspaper at leas t seven (7) days before
the said change becomes effective under intimation to the Trustee and SECP.

Management fee:
The Management Company shall be entitled to be paid out of the Deposited
Property monthly in arrears Of the acc rued remuneration of an amount not
exceeding one and a half percent (1.50%) of the average annual Net Assets of
the Fund calculated on a daily basis during the year. However, the
Management Company shall forego its right to receive remuneration in terms of
this Clause starting from the Business Day that the Investment Portion of the Fund
is reduced to zero; provided that this condition shall cease to take effect on the
Business Day such Portion of the Fund is greater than zero again.

Annexure- II

Application Form
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Name

Designation Employee #

Date of Birth - - 1 9 Marital Status

Place of Posting Code

Region Circle

Group

New NIC No. — —

Address (Off):
Tel

Fax

Address (Res):
Tel

Mobile
Email Address:

Subscription Option (please tick “” one box only)

Monthly Payment Upfront payment of 11 installments

I have read and clearly understood the terms of Umrah Mubarak Scheme printed overleaf which are
acceptable to me and hereby agree to abide by and be bound and governed under said terms and
conditions alongwith any modifications or amendments which may be carried out therein from time
to time.
Documents to be attached Bank Account Details
 Copy of New NIC Title of Account:
 Copy of salary slip Account No:
Branch Name:

- - 2 0 0
(day) (month (year)
)
___________________
Signature of Applicant

FOR OFFICE USE ONLY

Processed By:
Membership No. allotted
Dated: - - 2 0 0

Terms and Conditions

By submitting Application Form of Umrah Mubarak Scheme (hereinafter referred to as “UMS”), the applicant
irrevocably and unconditionally agrees to be governed and bound by following terms and conditions of UMS:

1. A successful applicant shall be allotted a Membership number and designated as “Member” of Umrah Mubarak
Scheme as long as he/she contributes monthly payment without any default and remains in the employment of Muslim
Commercial Bank Ltd.

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2. The Member shall contribute monthly payment as per prevalent rates towards Umrah Mubarak Scheme and hereby
authorizes Muslim Commercial Bank Limited (hereinafter referred to as “Bank”) and MCB Employees Foundation
(hereinafter referred to as “MCBEF”) to recover the same from his monthly salary and/or bank account.

3. Any member who chooses to pay entire installments of one (1) year in advance during the Grace Period, shall be
entitled to a discount/rebate of one (1) monthly installment i.e. he/she shall make payment equivalent of eleven (11)
monthly installments in lump sum.

4. Applicants joining the Umrah Mubarak Scheme after expiry of Grace Period shall have to pay arrears for six (6)
months.

5. The funds contributed by Members shall be non-refundable and non-transferable under any circumstances except as
per Clause # 16.

6. A member, who fails to contribute any monthly payment within stipulated time period, shall not be entitled to
participate in subsequent computerized draws unless he/she clears all his/her outstanding dues. Till receipt of
outstanding dues, his/her membership shall remain suspended.

7. Names of members for performing Umrah shall be chosen through a computerized draw that shall take place in
corresponding Gregorian/Islamic Calendar months of April/Rabiual Awaal, May/Rabi-u-Sathni, June/Jamadiual Awaal,
July/Jamadi-u-Sathni, August/Rajab and September/Shaban.

8. All members who won the draw shall be required to make up-front payment of balance monthly installments due in
that calendar (Gregorian) year however, they shall not be entitled to participate in subsequent computerized draw
taking place in that gregorian year.

9. A member selected through computerized ballot shall receive Rs.90,000/- (Rs.45,000/- for self plus Rs.45,000/- for
spouse) for performing Umrah, from MCBEF upon producing his as well as spouse’s Passport bearing valid Umrah Visa.
In case, if any successful member does not have any spouse then he/she shall be entitled to take along his mother OR
father OR brother OR sister for Umrah. MCBEF shall be authorized to make all such enquiries to ascertain usage of
amount received by a member for self and spouse.

10. If a successful member is not in a position to travel immediately due to any valid reason, then he/she shall remain
entitled for his/her amount for a maximum period of one year commencing from the date of draw.

11. Selection of travel agent and travel plan shall be the responsibility of member. MCBEF shall not be liable in any
manner in case of any dispute between the member and travel agent and immigration/custom officials at the airports
of Pakistan and Kingdom of Saudi Arabia or any other country.

12. MCBEF shall charge Processing Fee @1.75% per month on the funds collected under Umrah Mubarak Scheme or on
such rates as revised and prevalent from time to time, for the services performed by MCBEF under this Scheme.
Moreover, at the time of each Ballot, a Balloting Fee of Rs. 25,000/- shall be deducted from the funds collected under
Umrah Mubarak Scheme.

13. The member would keep sufficient credit balance in his/her account to ensure deduction of monthly installments as
per his / her cadre. In case of non-deduction of monthly/annual installment from his/her salary or due to insufficient
credit balance in his/her account or due to any other reason, MCBEF shall not be responsible under any circumstances,
whatsoever for suspension of his/her membership under this scheme and he/she shall not be eligible to participate in
computerized ballot.

14. As and when designation of a member changes, he/she would inform MCBEF about the same and shall be further
responsible for depositing revised contribution in accordance with applicable rates for his/her new designation/cadre.

15. Funds collected under this scheme shall be exclusive property of its members.

16. The Scheme is amendable and renewable at the end of every year at the discretion of the Board of Trustees of MCB
Employees Foundation, if the said scheme is not renewed then the pool money shall be distributed among the existing
members on pro-rata basis.
Date: _________________ Signature of the Applicant

Annexure - III
Date: ______________________

UMRAH MUBARAK SCHEME

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MCB Employees Foundation

10-C Cosmopolitan Society
Opp.V.I.P Gate
Mazar-e-Quaid-e-Azam
Karachi

Dear Sirs,

We are enclosing herewith Application Forms of Staff members posted at

_______________________________ who wish to join Umrah Mubarak Scheme.
(name of Branch / Region / Circle / Division)

SERIAL
NAME OF APPLICANTS DESIGNATION
NO.

Yours sincerely,

______________________________________________________
(BRANCH MANAGER / REGIONAL MANAGER / GENERAL MANAGERS / DIVISIONAL HEAD)

Annexure – IV
Date: __________________

The Chief Manager / Incharge,

_____________________ Branch,

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Muslim Commercial Bank Ltd.

_________________

Sub: Debit Authority

Dear Sir,

In consideration of my subscribing to Umrah Mubarak Scheme, I hereby

irrevocably authorize Muslim Commercial Bank Ltd. to recover my contribution /
subscription towards Umrah Mubarak Scheme by debiting my salary in the following
manner:

Deduction on per month basis1

Deduction of upfront payment annually (11 installments only)

Yours sincerely,

_______________________________
Name:
Designation:
Employee No.
Place of Posting:

Annexture- V

Branches Network

1
Executives (AVPs to SEVPs/President) Rs. 250 per month
Officers Grade I Rs. 200 per month
Officers Grade II Rs. 175 per month
Officers Grade III, Cash Off. & Prob. Off. Rs. 150 per month
Clerical Rs. 75 per month
Non-Clerical Rs. 50 per month

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