Mohsin Ali BBS 07 42

Muslim Commercial Bank Limited
EXECUTIVE SUMMARY
MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid
foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of
which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide and a
network of over 12 banks on the MNET ATM Switch.
MCB's operations continued to be streamlined with focus on rationalization of

expenses, re-alignment of back-end processing to increase productivity, enhancement of
customer service standards, process efficiency and controls. The Bank has taken the lead
in introducing the innovative concept of centralizing Trade Services in the country by
providing centralized foreign trade services to branches with a view to improve
efficiency, expertise and reduce delivery cost.
During my internship in MCB I worked in Remittances, Clearing, Advances, Foreign
Exchange and Customer Service Office department and I successfully completed all the
task/duties that were assigned to me.
During the course of internship I learned about different functions performed by

Remittances, Advances, Foreign Exchange and Customer Service Office department and
bank as a whole. I also learned bank’s correspondence with their customers and within
branches. I learned about documentation requirements and record keeping for different
activities and processes, especially the documentation requirement for different kinds of
financing facilities.
To open an account the customer has to meet the general banking manager with
an introducer. The procedure begins with the punching of account opening form to the
customer file i.e. customer’s master file. Before closing any account, bank send letter to
the account holder for informing him that his account is going to be closed. There is need
an approval form higher authority to close any account. Current deposits are those which
are payable to bank whenever demanded by the customer. Bank does not pay any profit
BZU, Sub-Campus Sahiwal 1

on current deposits. The following are the financial products/services of MCB, PLS
Account, Saving 365 Account, Capital growth certificate scheme, Fund Management
Scheme, Khushali Bachat Account, Term/ Fixed Deposits and others like night banking,
credit cards, traveler cheques.
In remittance department like any other bank MCB also have instruments for
transferring of money, Telegraphic Transfer, Mail Transfer. In cash department both
deposits and withdrawals go side by side. This department works under the accounts
department and deals with cash deposits and payments. This department maintains the
following sheets, books, and ledger of account cash received voucher sheet, cash paid
voucher sheet, Paying-in-slip, Cheque book, Cash balance book. The clearing in Karachi
at MCB or other banks is being done through NIFT (National Institute of Facilitation
Technology).
In clearing department include main two types of clearing Inward clearing

(clearing within the city of different banks or the same bank) and Outward clearing
(clearing outside the city included in it). In foreign exchange, MCB is dealing Foreign
Currency Accounts, Foreign Remittances, and Foreign Bills for Collection, Imports &
Exports.
Industrial Advances Commercial Advances have some types that are: Demand
Finance, Cash Finance, Foreign bills purchased, Finance against imported goods, Finance
against foreign bills, Export Refinance Part I (Pre Shipment) & others. Banks Agriculture
division deals with the agriculture advances. Bank provides the Agriculture Advances in
order to enhance and support the agriculture sector of the country Farm Credit & Non
Farm Credit.
In this internship report some analysis are included as per the requirement of the
University that are Ratio analysis, Vertical and Horizontal analysis, SWOT analysis,
PEST analysis. It also included the practical implication of my knowledge in the
organization and suggestion and recommendation as well.

INTRODUCTION OF BANKING SECTOR
The word 'Bank' is said to have been derived from the words Banca or Banque or
Bank. This history of banking is traced to as early as 2000 B.C. Banking in fact is
primitive as human society, for ever since man came to realize the importance of money
as a medium of exchange, the necessity of a controlling or regulating agency or
institution was naturally felt. The priests in Greece used to keep money and valuables of
the people in temples. These priests thus acted as financial agents. The origin of banking
is also traced to early goldsmiths. They used to keep strong safes for storing the money
and valuables of the people. The first stage in the development of modern banking, thus,
was the accepting of deposits of cash from those persons who had surplus money with
them.
The goldsmiths used to issue receipts for the money deposited with them. These
receipts began to pass from hand to hand in settlement of transactions because people had
confidence in the integrity and solvency of goldsmiths. When it was found that these
receipts were fully accepted in payment of debts; then the receipts were drawn in such a
way that it entitled any holder to claim the specified amount of money from goldsmiths.
A depositor who is to make the payments may now get the money in cash from
goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank
notes. The second stage in the development of banking thus was the issue of bank notes.
The goldsmiths soon discovered that all the people who had deposited money
with them do not come to withdraw their funds in cash. They found that only a few
persons presented the receipts for encashment during a given period of time. They also
found that most of the money deposited with them was lying idle. At the same time; they
found that they were being constantly requested for loan on good security. They thought
it profitable to lend at least some of the money deposited with them to the needy persons.

This proved a profitable business for the goldsmiths. They instead of charging safe
keeping charges from the depositors began to give them interest on the money deposited
with them. This was the third stage in the development of banking.
At the time of independence, there were 631 offices of scheduled banks in

Pakistan, of which 487 were located in West Pakistan alone. As a new country without
resources it was very difficult for Pakistan to run its own banking system immediately.
Therefore, the expert committee recommended that the Reserve Bank of India should
continue to function in Pakistan until 30th September 1948, so that problems of time and
demand liability, coinage currencies, exchange etc. be settled between India and Pakistan.
The non-Muslims started transferring their funds and accounts to India. By the
end of June 1948 the number of officers of scheduled banks in Pakistan declined from
631 to 225. There were 19 foreign banks with the status of small branch offices that were
engaged solely in export of crop from Pakistan, while there were only two Pakistani
institutions, Habib Bank of Pakistan and the Australian Bank. The customers of the bank
are not satisfied with the uncertain condition of banking. Similarly the Reserve Bank of
India was not in the favor of Govt. of Pakistan. The Govt. of Pakistan decided to establish
a full-fledge central bank. Consequently the Governor-general of Pakistan Quaid-I-Azam
inaugurated the State Bank of Pakistan on July 1, 1948. Thus a landmark was made in the
history of banking when the state bank of Pakistan assumed full control of banking and
currency in Pakistan. The banking structure in Pakistan comprises of the following types.
 State Bank of Pakistan

 Commercial Bank of Pakistan
 Saving banks
 Cooperative banks
 Specialized credit institutions

Commercial banks have been the most effective mobilizers of savings and have been
providing short-term requirements of working capitals to trade, commerce and industry.
Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned
all over the country and in some foreign countries through a network of branches. All
these commercial banks were nationalized in January 1, 1974, and were recognized and
merged into the following five banks:
 National Bank of Pakistan

 Muslim commercial bank limited
 Habib Bank Limited
 United Bank Limited
 Allied Bank of Pakistan
The state bank of Pakistan is the Central bank of the country and was established
on July 1, 1948. The separation of East Pakistan and its repercussion in the form of
economic depression has caused a lot of difficulties to the banking system in Pakistan.
The network of bank branches now covers a very large segment of national economy.
The numbers of branches have increased appreciably and there is now on branch of bank
for every 3000 heads of population approximately. There is done reasonable growth in
deposits from the establishment of Pakistan. Besides this growth, specialized credit and
financial institutions have also developed over the years.
The Government of Pakistan in the late 90’s introducing the need for the
privatization of state owned banks and companies. The private sector has accepted the
challenge and most of the banks are privatized today. The State Bank of Pakistan issues
the shares of these periodically. Bank employees and other common peoples can also
purchase these shares and earn profit. Throughout the period of banking history the banks
have been expanding rapidly and achieved the desired goal of progress.

THE MUSLIM COMMERCIAL BANK LIMITED
History
MCB was founded by I SFHANI and ADAMJEE families in Calcutta on July 9,

1947. MCB is not an overnight success story rather good track of services are responsible
for the leaps and bounds progress. After the partition of the Indo-Pak Subcontinent, the
bank moved to Dhaka from where it commenced business in August 1948. In 1956, the
Bank transfer red its registered office to Karachi, where the Head Office is presently
located. Thus, the bank inherits a 52-year legacy of trust in its customers and the citizens
of Pakistan.
The performance of MCB was badly affected by bureaucrat government. In

January 1974, MCB was nationalized by Bhutto Government following the bank act 1974
afterward in June 1974 Premier Bank Limited merged with MCB.
Privatization
When privatization policy was announced in 1990, MCB was the first to be
privatized upon recommendations of World Bank and IMF. The reason for this choice
was the better profitability condition of the organization and less risky credit portfolio
which made'' it a good choice for investors. On April 8th, 1991, the management control
was handed over to “Nishat Group” (the highest bidders). Initially only 26% of shares
were sold to private sector at Rs. 56 per share.
MCB besides being money financial organization have rendered invaluable

services in the economics and social developments of our country. MCB today,
represents a bank that has grown with time, experience and Pakistan. A major financial
institution, in scope and size, it symbolizes a fully-grown tree. Evergreen, Strong, and
firmly rooted.

VISION STATEMENT
“To be the leading financial ser vices provider, partnering with our customers for a more
prosperous and secure future”
MISSION STATEMENT
“We are a team of committed professionals, providing innovative and efficient financial
solutions to create and nurture long-term relationships with our customers. In doing so,
we ensure that our shareholders can invest with confidence in us.”
VALUES
Integrity
We are the trustees of public funds and serve our community with integrity. We believe
in being the best at always doing the right thing. We deliver on our responsibilities and
commitments to our customers as well as our colleagues.

Respect
We respect our customer’s values, beliefs, culture and history. We value the equality of
gender and diversity of experience and education that our employees bring with them.
We create an environment where each individual is enabled to succeed.
Excellence
We take personal responsibility for our role as leaders in the pursuit of excellence. We
are a performance driven, result oriented organization where merit is the only criterion
for reward.
Customer Centricity
Our customers are at the heart of everything we do. We thrive on the challenge of
understanding their needs and aspirations, both realized and unrealized. We make every
effort to exceed customer expectations through superior services and solutions.
Innovation
We encourage and reward people who challenge the status quo and think beyond the
boundaries of the conventional. Our teams work together for the smooth and efficient
implementation of ideas and initiatives.

Awards
Euromoney Awards
Best Bank In Asia Award 2008
MCB has been awarded as a Euromoney Award 2008 for the “Best Bank in Asia".
Best Bank In Pakistan Award 2006
MCB has yet again received the esteemed Euromoney Award for the “Best Bank in
Pakistan”. It is the only bank to receive the Euromoney Award for Excellence for the
sixth time in the past seven years.
MCB has again received the esteemed Euromoney Award for the “Best bank in
Pakistan”. It is the only bank to receive the Euromoney Award for Excellence for the
fifth time in the last six year.
In a continuous winning streak, MCB once again takes pride in being conferred with
Euromoney's prestigious award of excellence, for being the "Best Bank in Pakistan" for
the fourth time in the last five years.

MCB believes in you. Together we work with quality, integrity and dedication, striving to
achieve collective success by understanding changing trends and assimilating into diverse
cultures. Your trust in our ability and our commitment to deliver has again won us the
Euromoney Award 2003 for the "Best Bank in Pakistan".
Your trust and our commitment is always an award wining combination MCB was
awarded as a Euromoney Award 2001 for the "Best Bank in Pakistan".
Best Domestic Bank Award 2000
MCB was awarded as a Euromoney Award 2000 for the "Best Domestic Bank in
Pakistan".
Asia Money Awards
The Best Domestic Commercial Bank Award 2005
MCB Continues to shine as once again Asia Money declares MCB as "The Best
Domestic Commercial Bank in Pakistan" for the year 2005.
The Best Domestic Commercial Bank Award 2004

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

CORPORATE PROFILE
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. M.U.A. Usmani Acting President
Audit Committee
Mr. Tariq Rafi Chairman

Dato' Mohammed Hussein Member
Mr. Aftab Ahmad Khan Member
Mr. Muhammad Ali Zeb Member
Mr. Malik Abdul Waheed Member

Human Resources Committee

Mr. Shahzad Saleemn Member
Mr. M.U.A. Usmani Member
Risk Management & Portfolio Review Committee
Mr. Shahzad Saleem Chairman

Mr. Sarmad Amin Member
Committee on Physical Planning, IT System & Contingency Arrangements
Mr. Sarmad Amin Chairman

Mr. S. M. Muneer Member
Mr. Abdul Farid Bin Alias Member
Business Strategy & Development Committee

Mr. S. M. Muneer Member
Mr. Shahzad Saleem Member


Dato' Mohammad Hussein Member
Chief Financial Officer
Mr.Salman Zafar Siddiqi
Principal Office
MCB 15 Main Gulberg, Lahore
Registrar’s and Share Registration Office
MCB 15 Main Gulberg, Lahore M/s. THK Associates (Pvt.) Limited State Life
Building No.3, Dr. Ziauddin Ahmed Road, Karachi

Organizational Structure of MCB Bank Ltd
As MCB is a banking company listed in stock exchange therefore it follows all

the legalities which are imposed by concerned statutes Mr. Muhammad Mansha is
chairman & chief executive of the company with a team of 10 directors and 1 vice
chairman to help in the business control and strategy making for the company.
Operational Management of the bank is being handled by a team of 10

professionals. This team is also headed by Mr. Muhammad Mansha. The different
operational departments are Consumer Banking & IT div; Financial & Inter branch div;
Banking operations div; HR & Legal div; financial control & Audit div; Credit
management div; Commercial Banking div; Corporate Banking div; Treasury
management & FX Group and lastly Special Assets Management (SAM) Group.
For effective handling of branches, it has been categorized into three segments with
different people handling each category. These categories are:
 Corporate Banking
 Commercial Banking
 Consumer Banking
Corporate Banking
These are branches, which have an exposure of over Rs. 100 million. Usually
includes multinational & public sector companies.
Commercial Banking
The branches which has a credit exposure of less than Rs. 100 million but having
a credit portfolio of more than Rs. 20 million (excluding staff loans).

Usually branches in large markets and commercial areas come under this category.
Consumer Banking
These are the branches that have exposure up to Rs. 20 million and these include
all the branches that are neither corporate nor commercial branches.
MCB has restructured their Branch structure as follows:
Province Branches
Punjab 673
Sindh 246
K.P.K 106
Balochistan 39
Azad J. Kashmir 21
Domestic Total 1,085
Overseas 6
EPZ 1
Grand Total 1,092
Furthermore, the bank has some proposals under consideration to open more brunches in
some European countries and as well as in Japan & china.

Information about Branch
I have performed my internship Muslim Commercial Bank Main Civic Centre G-

6, Islamabad for two month with my all honest and hard work. Some important
information regarding branch is as follows:
Management of the Branch
M. Babar Sohail Branch Manager / Vice President

M. Awais Noor Operation Manager
Ms. Nusrat Bhatti Credit Manager
Iqbal Hussain Siddiqui Supervisor
Ms. Shela Teller (on contract)
Ms. Musarrat Teller (on contract)
M. Ghalib Cash Officer
M. Liaqat Cashier
Mr. Nizami Cashier (on contract)
Muhammad Ali Client Advisor/ Bank Insurance
M. Sajid Insurance Advisor
M. Ehsaan Clearing Head
Sajjad Hussain Clearing (on contract)
Ms. Zartashia Foreign Currency Head
Ms. Sayyeda Hina Fatima Administration Head
Haji Liaqat Ali In charge Strong Room
Mian Naeem Strong Room
Branch also has five Security Guard and six other workers included one cook.
Management Hierarchy
Branch- Main Civic Centre G-6, Islamabad
Chief Manager

Supervisor Clearing Manager Teller
Operational Deposits/withdrawals
Operation Officer Teller
Cash Department Credit Department

MCB PRODUCTS
AND SERVICES

MCB Online Banking
MCB has a fast growing network of over 1,100 online branches in the country providing
customers real time online transaction facilities.

MCB MNET
MNET is an electronic inter-bank connectivity platform for online transactions on ATM

and other remote banking channels. It offers other Value Added Services that include a
portfolio of e-banking and payment system products as well as management and day-to-
day operations of the same. Members include 10 local and foreign financial institutions
enjoying ATM sharing and Value Added Services.
MCB Cash Management
Cash Management provides a wide range of value added services to large corporations
through its vast network of online branches. Our structured and customized products
enable our customers to realize their sales proceeds swiftly from all over the country,
supported by real-time MIS.
MCB Channel Financing
MCB Channel Financing provides working capital facilities to dealers and vendors of
selected companies under a structured product program. This product enables our
customer's dealers to leverage themselves and increase their business capacity with their
respective business partners.
MCB Local Rupee Drawing Arrangement
Transaction Banking Department at MCB, provides Local Rupee Drawing Arrangement,

a product for small banks and financial institutions to use our vast branch network

platform to make payments in areas where their own branch network does not exist, thus
extending their reach countrywide.
MCB Home Remittance
MCB Home Remittance provides a seamless inflow of foreign remittances credited in the
beneficiary’s account within minutes. Cash payments can also be made at our designated
branches on behalf of Xpressmoney, Samba (SpeedcashNow) and Moneygram, along
with cash payments from other correspondents all over the world.
MCB Advisory Services
Financial and Capital Raising Advisory provides our clients with financial advisory
services, commercial structuring support and access to capital resources to help
companies successfully finance their business/project.
MCB Instant Finance
With MCB instant Finance get a loan instantly at any MCB branch against liquid
collateral at competitive pricing.
MCB Investment Services
Make the most of your wealth with investment opportunities that match your unique
financial aspirations. MCB Investment Services offer distribution of mutual funds
managed by the leading fund managers of Pakistan. We can suggest the products most
suited for your needs, or work with you to create a personalized solution completely
focused on your expectations of the capital markets.
MCB Visa Credit Card

MCB offers a complete suite of Classic, Gold and Platinum Visa Credit Cards focusing
on providing, superior service, travel privileges & shopping pleasure. It also offers
comprehensive insurance & installment plans, reward point sand SMS alerts that give a
different feel to the world of Credit Cards. These unique features include i-revolve, which
makes variable mark-up rate available to customers allowing them to repay at affordable
rates.
MCB Car4U
MCB Car4U not only gets you a car of your own choice but is also affordable with
competitive mark-up, flexible conditions, easy processing and above all, no hidden costs.
MCB Smart Card
MCB Smart Card is the key that enables access to convenient banking services. Smart
Card allows you to manage your account, withdraw cash, transfer funds, pay utility and
mobile bills, recharge prepaid connections, and register for mobile and internet banking
services and much more.
MCB Rupee Travelers Cheque
It is a safe and secure way to make payments nationwide.

MCB Rupee Travelers Cheque, being the market leader, is the
most widely accepted way to pay cash for travel-related purposes.
MCB ATMs

MCB has one of the nation's largest ATM networks with over 450 ATMs and still
growing. MCB ATMs give you 24-hours convenience of cash withdrawal, mini-
statement, utility bill payment, funds transfer services and much more.
MCB Mobile ATM
With MCB Mobile ATM not only do we provide you with world class banking service
but we also provide convenience. Our innovative mobile ATMs ensure that you are given
service close to you.
MCB Lockers
MCB Lockers are the best protection for your valuables. Lockers of different capacities
are available nationwide.
MCB Call Center
There’s no easier way to bank than the new enhanced 24/7 MCB Call Center, which
blends innovation and convenience to provide Banking Services that go beyond
expectations. With MCB Call Centre you can maintain your VISA credit & ATM/Debit
cards, check your account balances, confirm last 5 transactions, pay utility & mobile
phone bills, top-up your mobile, pay MCB Visa Credit Card bill from your MCB
account, transfer money within your own accounts in MCB and register complaints.
MCB Mobile

MCB Mobile is a quick easy and secure way to recharge mobile phones, transfer money,
pay bills and do much more. No need to visit a branch or an ATM anymore, login to
www.mcbmobile.com using your mobile phone and start transacting.
MCB Virtual Banking
MCB provides the convenience of banking via internet, whether at home, office or on
travel, log on to www.mcb.com.pk and enjoy 24 hour access to all your accounts at MCB
for a great number of services such as Funds Transfer, Utility Bill Payments, Mobile
Top-ups and much more.
MCB Full Day Banking
Enjoy the convenience of extended banking hours form 9am to 5pm, including Saturdays
at MCB FULL Day Banking branches across the country.
DEPARTMENTS WHERE INTERNSHIP WAS CARRIED OUT

The internship held in different section that can be divided further into different
department. Following are some main sections or department where I have accomplished
my whole internship:
1. Account Maintenance
2. Remittance Department (Funds Transfer)
3. Clearing Department
ACCOUNT MAINTENANCE
It deals with general rules, policies and procedures relating to opening and
maintenance of customer relationship through “Accounts”. It also deals with other
functions related to customer account maintenance, which includes issuance,
maintenance and procedural guidelines regarding ATM/Smart Card & Cheque book.
Account Opening Procedure
Account opening is one of the important and first step toward building the
relationship between the customer and Bank. Following are the some steps for the
account opening:
Account opening form: The first step is to fill the form which included Application for
Opening Account (SF-1AA) and Specimen Signature Card (SF-6) provided by the bank.
Documents: Some documents are required that are mandatory, which are attested
photocopy of Computerized National Identity Card (CNIC) or Passport. It is a mandatory
requirement to verify the CNIC of the customer before opening the accounts, from
NADRA Online system- VERSYS
In case of a salaried person, attested copy of his/her service card is required.

In case of illiterate person, a passport size photograph of the new account holder besides
taking left & right thumb impressions on the Account Opening Form & Specimen
Signature Card.
Account Number: When all the procedures are completed then the final approval is taken
from the branch manager. After obtaining approval, an account number is allotted to the
customer and all the information is entered in to the computer and KYC is filled up. Then
that account number is writing on the Cheque Book, Specimen Signature cards and
account opening form.
Know your Customer Form: KYC form is needed to know about the customer in which
customer provide the reference of the already customer of MCB or it can be bank staff
Approval: This account is further approved by Operations Manager.
Send Form to Head Office: After fulfilling all the requirements and verifying the forms
from operation manager the account opening for m is sent to Head Office Karachi and
make request to issue the printed cheque book.
Letter Of Thanks: Subsequent to the opening of an account, letter of thanks should be sent
under registered post or courier service to the customer and the introducer.
Types of Account
i. Current Account
 Current Account is non-remunerative account i.e.no profit paid on the deposited

amount.
 There is no restriction on Withdrawals and frequency of transactions.
 No Zakat is to be deducted on Current Account.
 Service Charges are recovered as specified in the Schedule of Charges.
 Account statements are dispatched on half yearly on basis within one week after
the mid-year closing.
We can classify further current account into different accounts that are:

a. Individual Accounts
b. Joint Accounts
c. Proprietorship Accounts
d. Partnership Accounts
e. Private Limited Companies Accounts
f. Public Limited Companies Accounts
g. Trust Account
h. Liquidators Accounts
i. Societies, Associations, NGO’s and Club Accounts
j. Local Bodies Accounts
k. Autonomous and Semi- Autonomous Institutions Accounts
l. Local/ District Zakat/ Usher Committee Accounts
m. Accounts of Government Department
ii. Basic Banking Account
 Basic Banking Account to provide banking facilities to low income people

without the restriction to maintain minimum balance requirement.
 The account is opened with a minimum initial deposit of Rs.1000.
 There is no minimum balance requirement, and hence no monthly account
maintenance charges apply.
 If a BBA account have “ZERO” balance for 6 month continuous, the account will
be closed automatically.
 Each month the account holder is allowed 02 deposits transactions (either cash or
clearing) and 02 withdrawals (cash or clearing).
 If transactions over and above this limit, it will be charged Rs. 25 per transaction.
ATM cards are issued to all BBA account holders in on-line branches.
 Statement of account to be mailed as per policy of the Bank.
 ATM transaction charges on balance enquiry / mini statement and on usage of
non-MCB ATM’s will apply as per Schedule of Bank Charges.
 Charges on duplicate statement are deducted or debited from the account.
iii. Call Deposits Receipts

 Issued in favor of Government, Semi-Government, Institutions, Corporations, and

Semi-Autonomous Bodies etc as a security deposit. It is also issued in favor of
individual.
 Call Deposit does not earn any income or profit.
 No Zakat is deducted on Call Deposits.

 Call Deposit Receipt is issued in the name of Beneficiary.
 Receipt is payable to beneficiary on proper discharge through collection or
clearing or internal transfer.
iv. Smart Foreign Currency Current Account
 The minimum amount to be placed under this product is USD 10,000.

 This account has Complimentary Pak Rupee account without minimum balance
requirement.
 It has Free Lockers Facility as well as Free of Charge Bank Statement & Smart
Cards.
 Discount (Up to 50%) on processing charges of Personal Loans & Car Financing.
 Special rate on consumer loans.
 Waiver on collection charges for crediting the amount in Foreign Currency.
v. Profit And Loss Sharing Savings Accounts
 PLS Savings account is on profit and loss sharing basis in Pak Rupees only.
 It has a checking account with no restriction on Withdrawals & Deposits.
 It should have a specified balance requirement as specified in the schedule of
Bank Charges. Service Charges will be deducted, if average monthly balance
requirement is not maintained.

 Interest Provisioning done on the monthly basis and provide it on the half yearly
basis.
 Free of cost Account Statement is dispatched on half yearly basis.
 Zakat are deducted as per the Government’s and Zakat Ushr Directives.
 Withholding Tax is deducted on Profit as per the Government’s policy.
Following are the some types of PLS Accounts:
a. Profit & Loss Sharing (PLS) Savings/ Foreign Currency Savings Account
b. PLS Smart Savings Account
c. Smart Foreign Currency Savings Account
d. Khushali Bachat Account
e. PLS 365 Savings Account
f. PLS 365 Savings Gold Account
vi. Term Deposit
a. Special Rupee Term Deposit

b. Special Notice Deposit
c. Smart Foreign Currency Fixed Deposits
Cheque Book Maintenance
Cheque book is a safe custody instrument. Cheques are used for cash withdrawal
and making payments. MF-80R is used for cheque book issuance to the New Account
Holders as well as the exiting customers. Prior to Issuance of a new cheque-book to the
existing customer, it should be ensured that the situation of the account is satisfactory in
all respect.
Cheque book requisition slip is designed in a way that customer will sign-off the same
once at the time of requesting the new cheque book and other at the time of receiving the
cheque book.

The purpose of two signatures on the requisition slips at two different intervals allows the
bank to keep a stringent control on the inventory of the Cheque-books.
ATM Maintenance
Customer submit application on SF-1C for “Classic ATM Card and SF-1(H) for
“ATM Gold Card” duly filled and completed in all respects, signed along with copy of
CNIC in the home branch. The Branch will process the application on the system and
online request shall be forwarded to Cards Production Division for issuance of the MCB
ATM/Smart Card. Cards Production Division prepares the MCB ATM Card of the
Account holder and system generates PIN i.e. Personal Identification Number. Cards
Production Division forwards card to the respective branches after the necessary
processing and on the following day dispatch PIN Mailers to the respective branches in a
sealed envelopes for onward delivery to the Account holder. Authorized Officer in the
branch delivers the ATM Card to the customer after verification of the customer’s
signature.
REMITTANCE DEPARTMENT
In remittance department I have learned all related work to the remittance under
the supervision of Mr. Iqbal Hussain Siddiqui. Remittance department performs the
function of remitting funds i.e. to transfer funds for customers from one location to
another. The transfer of funds may be from one branch to another or from one bank to
another. It is an important service provided by banks to customers as well as non-
customer s. Since it is not a free service it is a source of income for the bank.
Parties involved in Remittance
Four Parties involved in remittance that are:

Remitter
One who initiates, or requests for a remittance. The bank charges him a
commission for this service. He may or may not be the branch’s customer.
Remit tee
A Remit tee is also called the beneficiary, or the payee. The person in whose
name the remittance is made. A Remit tee is also the one who receive the payment.
Issuing Bank
The bank that sends or effects the remittance, through demand drafts, telegraphic
transfers, or Mail Transfers.
Paying Bank
Paying Bank also knows as the drawee branch. The branch from where the
instrument is drawn.
Types of Remittance
Remittance is classified into following four types:
Inward remittance: instruments received for payment

Outward remittance: issuing instrument to the responding branch.
Inland remittance: with in same country.
Foreign remittance: from one country to another country.

Instrument used in Remittance
 Pay Order
 Demand Draft
 Telegraph Transfer
 Mail Transfer
 Bank Draft
Pay Order
When a branch situated in Islamabad is required to send the draft to any other
branch situated in the same locality, the process will say to be within locality. i.e. MCB
corporate branch Islamabad, send any draft to MCB Main Civic Centre branch, this is
known as within locality. Pay order is used for payment within the cities; the main
purpose of pay order is to make payment in record this payment in the bank as evidence.
Bank charge the commission for its services. The purchaser fill an application form,
which includes the amount of payment or order, the name of the payee and complete
address of purchaser and payee application form is also singed by the purchaser.
Demand Draft
The instrument used to transfer fund outside the city is demand draft i.e. MCB
Main Civic Centre branch Islamabad, sent any draft to a branch situated in Peshawar city.
DD is a written order given by the branch of the bank on behalf of the customer to other
branch of the same bank to pay the certain amount to the customer. DD are issued for the
particular place other than place of issuance. DD applicant or recipient, who might not be
an A/C holder present it to another bank at a different place requesting it to pay on
demand a specified amount of money which is already received to the person named on
it.

Telegraphic Transfer (TT)
TT is fund that is transferred electronically which is remitted on the order of a

certain person. In this case the authority is given from one bank to other on the behalf of
the customer through telecommunication to debit their inter office account through them
and credit their parties account mentioned in TT.
But it is not practiced these days frequently. Now a day, new technology is used
for this purpose i.e. fax, e-mail. The big traders and businessman use this method of
remittance in this method of remittance the purchaser is not responsible for the dispatch.
Mail Transfer
Mail transfer draft is one of the bank modes of remittance. Mail transfer is issued
by one branch of bank to another branch of the same bank by instructing to branch to pay
the other branch by issuing mail transfer receipts.
In M.T the purchaser is not responsible for dispatch, but the bank will be
responsible for dispatch.
Bank Draft
Bank draft is the most important type of remittance. Draft is an instrument issued
by a bank. Draft is issued by one branch to another branch out of the city. The difference
branches of same bank can issue the bank draft to each other and it is also called the
banker cheques i.e. the main branch of MCB in Islamabad issued the draft to the MCB
Peshawar.

CLEARING DEPARTMENT
In clearing department I have learned inward and outward clearing under the
supervision of Mr. Ehsaan Malik. Managing clearing is a system by which banks
exchange cheques and other negotiable instruments drawn on each other within a specific
area and thereby secure payment for their clients through the Clearing House at specified
time in an efficient way.
Clearing House
It is a place where cheques are presented, collected from bank branch. It is one of
the services provided by NIFT to other commercial banks. NIFT acts as a clearing house.
NIFT
NIFT stands for Nat ional Institutional Facilitation Technologies. Clearing House
of SBP has shifted a tiresome part of its work to a private institution named NIFT. NIFT
collects cheques, demand drafts, Pay orders, Travelers Cheques, etc. from all the
branches of different banks within city through its carriers and send them to the branches
on which these are drawn for clearing. After the branches approve the instruments drawn
on them, NIFT prepares a sheet for each branch showing the number for instruments and
amount in its favor and drawn on it and sends it to each branch. A similar sheet for each
bank is also sent to clearing house of SBP where accounts of banks are settled in the
same manner.
Learning in the Clearing Department

 Procedure of clearing a cheque
 Checking of cheques
 Inward and outward clearing
 Different reasons of returning a cheque

Procedure of clearing a cheque
Instrument collected are treated as Transfer, Transfer Delivery, Clearing and

Chaeque Collection.
Inspection of Cheques
When the instruments are collected from the client. Following things are included
to check it:
 Cheque date, instrument should be neither stale/ nor post-dated.

 Title of Account
 Amount in figures and words should be the same
 There should be no cutting and overwriting on the cheque
 Instrument should not bear any unauthorized alternation.
 Cheque is crossed.
Transfer:
When the instruments are collected and paid by the same branch, it is called transfer.
Transfer Delivery
When instruments are collected and paid by two different branches of the same
bank situated in the same city, it is called transfer delivery. A cheque is processed under
transfer delivery when it has crossing stamp and is from local branch of MCB

Clearing
Instruments which are drawn on the branches of some other bank of the same city
or of the same area, which is covered by a particular clearing house, are processed for
clearing.
In outward clearing when cheque is received two copies of voucher SF-37 are
prepared, one copy and instruments along with clearing stamp, realization stamp, add list
and two vouchers of clearing summary are sent to NIFT in a sealed bag. And clearing
records are recorded in clearing register. In Inward clearing instruments received from
NIFT are posted in Computers after checking.
Cheque Collection
When cheque is from another city then it is grouped as C.C. Such instrument are
processed as cheque fro collection. In this procedure SF-37 form is used in Cheque
collection. Original voucher with cheque, stamped as C.C along with C.C number is sent
to main branch of the responding city which is further sent to NIFT. Whereas Carbon
copy with Pay-In-Slip is taken by bank for record purposes.
Pay In Slip
It is used for two purposes:
Whenever we want to deposit cash in our account then pay-in-slip is used by

writing amount on it and depositing it to cashier along with money.
Whenever we have cheque from any party to be collected in our account we fill pay-in-
slip. One part is attached with cheque and another is given to cheque holder as a receipt.

Reason of return cheque
In inward clearing sometimes cheques are not passed due to some reasons then cheques
are sent back to NIFT along with cheque return memo. Some of these reasons are:
 Cheque incomplete
 Clearing stamp required
 Drawer’s sign incomplete
 Drawer’s sign different from specimen
 Post Dated
 Payment stopped by drawer
 Amount in words and figur es differ
 Insufficient funds etc.
OTHER DEPARTMENTS
There are some other departments where I have spent few days in each section to gain
experience about that department, these department are:
 Cash Department
 Advances/Credit Department
 Foreign Exchange Department
Cash Department
The cash department is the most important department of the bank. In cash
department both deposits and withdrawals go side by side. This department deals with
cash deposits and payments.

The following books are maintained in the Cash Department:
 Cash Receipt Book

 Cash Payment Book
 Cash Balance Book
The officers in this department are called teller and there were 2 tellers Mr. Waqar
and Mr. Nizami at the counter. This department is involved in two activities: Cash
Deposits, Cash Payments.
Cash Receipt Book
The cashier is responsible to receive both the paying- in-slip and cash from the
depositor. For depositing the cash into customer’ accounts, there is need to fill in the
paying-in-slip giving the related details of the transaction. The cashier check the
necessary details provided in the paying- in-slip and accounts the cash and tallies with the
amount declared in the slip then cashier fills in the Cash voucher received Record Sheet
and assigns a voucher no. to both the transaction being made in the sheet and the slip.
The 2nd cashier posts the transaction entries in computer ledger. After posting these
entries, computer display before posting balance and after posting. Cashier assigns the
stamp POSTED on the voucher to show voucher transaction entries are posted.
Cash Payment Book
The only instrument that can be used to withdraw an amount from an account is
the Cheque book. No payments are made by another instrument. When cheque is valid in
all respects, the cashier enters the necessary inputs in the computer and posts the entry so
that account balance is updated. When cashier posts these entries, computer automatically
display the balance before posting the transaction amount, balance after posting.

The cashier at the same time maintains the Cash Voucher Received Record Sheet.
Then inspects the signature of the customer, cancellation mark of checking officer and
stamp of POSTED is placed on cheque before he hands over the cash to customer.
Cash Balance Book
At the end of the working day cashier is responsible to maintain the cash balance
book.
The cash book contains the date, opening balance, detail of cash payment and received in
figures.
The consolidated figure of receipt and payment of cash is entered in the cash book
and the closing balance of cash is drawn from that i.e.
Opening Balance of Cash + Receipts - Payments = Closing Balance
Advances/Credit Department
Different banks provide loan facility to general public, companies etc. but MCB
provides two types of loans that are as under:
 Funds Base Loan

 Non-Fund Base Loan
Funds Base Loan
In this type of loans cash is directly involved. Bank provides loans in shape of
cash. Bank gives credit or limit facility to customers that needed it. In fund based loans
there are two further classifications:

Long Term Loan
 Lease facility for car

 For Machinery
 For Fixed Assets
Short Term Loan
 Running Finance
 Cash Finance
Securities for Fund Base Loans
 Hypothecation Stock
 Mortgage
 Pledge
Hypothecation Stock
In hypothecation of stock the possession of goods and the title remains in the
favour of customer. Without the permission of the bank the customer can't sell the stock.
It is the restriction of the bank that in god own there should be stock according to the
instructions of bank ever y time. The draw back of this is that there is no check and
balance of stock from the bank. The customer can easily sell his stock.
Mortgage

The bank can mortgage the immovable property like land, building etc as a
security. In mortgage the possession remains to customer and title of goods remains to
bank.
Pledge
In this, bank requires the moveable property of the customer as a security like
stock, vehicle etc. possession of goods remains to customer and title in the favor of bank.
The bank hires a muqaddam [Guard] and the key of store where the stock is pledged is in
the security of bank. When customer wants to sell the stock then he pays the amount
equivalent to stock which he wants to sell. After receiving amount bank releases his stock
for the same amount
Non Fund Base Loans
In non fund based loans cash is not directly involved but bank gives guarantee on
the behalf of customer. Bank works as a third party and known as Guarantor. Bank
provides a security to customer when he needs and someone requires from the customer.
Following documents required for advances:
Request of customer, Credit application from bank, Basic borrower sheet, Net
worth certificate, CIB report, Financials, Account statement, Property evaluation report,
For sale value certificate, Property documents, Title deed, Property map, CNIC, Account
opening form, Undertaking.
Following steps are there:
 Information required by the bank

 Preparation of credit proposals
 Sanction advice

Following information is required to be submitted to bank.
 Nature & structure of borrower business

 Names of proprietors, partners or directors
 Detail of all fir ms or companies associated with borrower.
 Financial condition of borrower business
 An assessment of his business abilities
 Accurate and up to date financial statements of last two years for
comparison purposes
 Market report on the borrower where borrower has maintained an account with
another bank, a report from his bank should also be obtained.
 A report from credit standing bureau of State Bank of Pakistan
Preparation of Credit Proposal
At first a formal application for credit approval is obtained from the party along
with complete group position. The party’s credibility report is obtained from the bank
with which the bank is doing its business. The party’s credibility report is also taken from
the Head office of Trade Information Division.
For obtaining credit, party has to submit the last two years Balance Sheet and
Profit & Loss statement duly attested by authorized auditors. If the party is also involved
in export or import business then the bank also considers the data of three years about
import & export. Current debt and equity ratio is also calculated by the bank. The type of
data required to prepare the credit proposal is to be gathered from the different
departments. Some data is obtained from the foreign Exchange department. Some data is
available in Advance Department. The purpose of obtaining Credit should be explained

clearly. The securities offered by the party to the bank are also evaluated. In case of
pledging of property in shape of land or building the complete evaluation of the property
should also be attached.
After all the necessary documents for applying for advance is fulfilled by the party then
the case is sent to Manager for approval. If the credit limit is in his range then he can
decide over it otherwise the case is forwarded to seniors. If there is any discrepancy then
the party is informed of it.

FINANCIAL STATEMENTS

Muslim Commercial Bank Ltd.
Balance Sheet
AS AT December 31, 2007-2009
2007 2008 2009
Rupees in ‘000’
ASSETS:
Cash and balances with treasury banks 39,683,883 39,631,172 38,774,871
Balances with other banks 3,807,519 4,043,100 6,009,993
Lending to financial institutions 1,051,372 4,100,079 3,000,000
Investments-net 113,089,261 96,256,874 167,134,465
Advances-net 218,960,598 262,510,47 253,249,407

0
Operating fixed assets 16,024,123 17,263,733 18,014,896
Deferred tax assets-net --- --- ---
Other Assets-net 17,868,761 19,810,476 23,040,095
Total assets 410,485,517 443,615,90 509,223,727

4
LIABILITIES:
Bills payable 10,479,058 10,551,468 8,201,090
Borrowings from financial institutions 39,406,831 22,663,840 44,662,088
Deposits and other accounts 292,098,066 330,274,15 367,604,711

5
Sub-ordianted loans 479,232 --- ---
Liabilities against assets subject to finance --- --- ---

lease
Deferred tax liabilities-net 1,180,162 437,137 3,196,743

Other liabilities 11,722,493 21,253,250 15,819,082
Total liabilities 355,365,842 385,179,85 439,483,714

0
Net Assets 55,119,675 58,436,054 69,740,013
REPRESENTED BY:
Share capital 6,282,768 6,282,768 6,911,045
Reserves 34,000,638 36,768,765 38,385,760
Unappropriated profits 5,130,750 9,193,332 15,779,127
Total common stockholder equity 45,414,156 52,244,865 61,075,932
Surplus/ (deficit ) on revaluation of securities 9,705,519 6,191,189 8,664,081
55,119,675 58,436,054 69,740,013

Profit and Loss Account
For the years ended December 31, 2007-2009
2007 2008 2009
Rupees in ‘000’
Mark- up /return/ interest earned 31,786,595 40,043,824 51,616,007
Mark- up/ return/ interest expensed 7,865,533 11,560,740 15,841,463
Net Mark-up /return/ interest income 23,921,062 28,483,084 35,774,544
Provision for diminution in the value of 105,269 2,683,994 1,484,218

investment
Provision against non- performing loans and 2,959,583 1,335,127 5,796,527

advances - net
Bad debts written off directly 199 --- 41,576
Total Provisions 3,065,051 4,019,121 7,322,321
Net mark-up /interest income after 20,856,011 24,463,963 28,452,223

provisions
Non-mark-up / interest income
Fee, commission and brokerage income 2,634,610 2,866,729 3,331,856
Dividend income 632,300 617,554 459,741
Income from dealing in foreign currencies 693,408 727,564 341,402
Gain on sale of securities - net 1,500,865 740,429 773,768
Unrealized loss on revaluation of investments (13,105) (103,198) ---

Classified as held for trading

Other income - net 563,213 942,362 736,118
Total non-mark- up / interest income 6,011,291 5,791,440 5,642,885
26,867,302 30,255,403 34,095,108
Non-mark-up / interest expenses
Administrative expenses 5,022,416 7,546,878 10,107,189
Other provision / (reversal) - net (3,743) 10,120 142,824
Other charges 540,594 830,839 690,150
Total non-mark- up / interest expenses 5,559,267 8,387,837 10,940,163
Extra ordinary / unusual item --- --- ---
Profit before taxation 21,308,035 21,867,566 23,154,945
Taxation -Current year 6,442,356 7,341,257 7,703,305

-Prior years (1,294,473) (864,824) (2,232,226)
-Deferred 894,590 16,533 2,188,569
Total Taxation 6,042,473 6,492,966 7,659,648
Profit after taxation 15,265,562 15,374,600 15,495,297
Unappropriate profit brought forward 5,530,973 5,130,750 9,193,332
Transfer from surplus on revaluation of fixed 11,855 21,319 22,324

assets
5,542,828 5,152,069 9,215,656
Profit available for provision 20,808,390 20,526,669 24,710,953

FINANCIAL ANALYSIS OF MCB
FINANCIAL ANALYSIS OF MCB

FINANACIAL RATIO ANALYSIS
The information contained in the four basic financial statements is of major

significance to the various interested parties who regularly need to have relatives measure
of the company operating activities efficiency. Relative is a key word here, because the
analysis of financial statements is based on the use of ratio or relative values.
What is ratio analysis?
“Ratio analysis involves method of calculating and interpreting financial ratio to

analyze and monitor the firm’s performance.”
Categories of ratio analysis
Financial ratios can be divided for convenience into five basic categories:
 Liquidity ratios
 Activity ratios
 Debt ratios
 Profitability ratios
 Market ratios
Liquidity Ratios
A firm’s ability to satisfy its short-term obligations as they come due is called
liquidity. Liquidity refers to the ability of an individual, business, or institution to convert
assets to cash without significant loss at a particular point in time. These ratios are
viewed as a good indicator of cash flow problems. Some of the liquidity ratios are:
Current Ratio

A measure of liquidity calculated by dividing the firm’s current assets by its

current liabilities. It measures the firm’s ability to meet its short-term obligations. It is
expressed as follow:
Current Ratio = Current Assets

Current Liabilities
468,168,736,000
=
420,467,889,000
= 1.11 Times
CURRENT RATIO ANALYSIS

Year 2005 2006 2007 2008 2009
Times 1.068 1.109 1.099 1.118 1.113
1.12
Current Ratio (Times)
1.11
1.1
1.09
1.08 1.118 1.113
1.109
1.099
1.07
1.06 1.067
1.05
1.04
2005 2006 2007 2008 2009
Years
Interpretation of Current Ratio

From the above data we come to know that in year 2008 MCB is in strong
position than other four year which means that organization can fulfill their short term
obligation more efficiently in this year. In addition, in year 2009 current ratio is less than
the previous years due to high difference between current assets and current liabilities. In
sum we can say that organization is proficient to meet their short term obligation, but it
does not show the true picture of the organization.
Cash Ratio
The ratio of a company's which is equal to total cash and cash equivalents to its
current liabilities. The cash ratio is most commonly used as a measure of company
liquidity. It can therefore determine if, and how quickly, the company can repay its short-
term debt. A strong cash ratio is useful to creditors when deciding how much debt, if
any, they would be willing to extend to the asking party.
Cash and cash equivalent

Cash Ratio =
Current Liabilities
= 44,784,864,000
420,467,889,000
= 0.106 Times
CASH RATIO
0.14
Year 2005 2006 2007 2008 2009
Times 0.12 0.094 0.134 0.127 0.120 0.106
0.1
Cash Ratio
0.08
4
13
7
12
12
0.06
0.
6
0.
0.
10
4
09
0.
0.04
0.
0.02
0
2005 2006 2007 2008 2009
Years
Interpretation of Cash Ratio
Higher the Cash ratio higher will be the satisfaction rate like other liquidity ratios.
It was 0.094 times in 2005 that increases to 0.134 times in 2006 due to increase in
deposits, further it decreases and it turns out to be 0.106 times in 2009. It seems to be that
MCB’s liquidity ratios are shown better than other years.
Net Working Capital
Working Capital refers to that portion of total found, which finances day to day
working expenses during the operating cycle and Net Working Capital is the difference
between current assets and current liabilities. Working capital is often considered a
measure of liquidity by it self. This ratio shows the amount of liquidity. Working capital
is used to check liquidity of the organization.
Net Working Capital = Current Assets – Current Liabilities
= 468,168,736,000 – 420,467,889,000
= Rs. 47,700,847,000
NET WORKING CAPITAL

Year 2005 2006 2007 2008 2009
Rs. (000) 18,080,516 31,757,831 34,129,446 42,052,232 47,700,847

50,000,000
45,000,000
40,000,000
WorkingCapital ( Rs)
35,000,000
47,700,847
30,000,000
43,052,232
34,129,446
25,000,000
31,757,831
20,000,000
18,080,516
15,000,000
10,000,000
5,000,000
0
2005 2006 2007 2008 2009
Years
Interpretation of Net Working Capital
Working Capital of MCB is increasing gradually in each year which shows that
MCB are utilizing their assets more economically. In the last year net working capital
was 47,700.847 million which highest from the previous years.
Leverage Ratio
Any ratio used to calculate the financial leverage of a company to get an idea of
the company's methods of financing or to measure its ability to meet financial
obligations. There are several different ratios, but the main factors looked at include debt,
equity, assets and interest expenses.
Debt Ratio
It measures the proportion of total assets financed by the firm’s creditors. The
higher this ratio, the greater the amount of other people’s money being used to generate
profits. It is calculated as follows:

Total liabilities
Debt ratio =
Total assets
439,483,714,000
=
509,223,727,000
= 0.8682*100
= 86.82 %
DEBT RATIO
Year 2005 2006 2007 2008 2009
% 92.05 88.06 86.57 86.82 86.30
93%
92%
91%
Debt Ratio
90%
89%
88% 92%
87%
86% 88%
85% 87% 87% 86%
84%
83%
2005 2006 2007 2008 2009
Years
Interpretation of Debt Ratio
Debt ratio is the extent to which affirm is financed with debt. The amount of the
debt a firm uses has both positive and negative effects. The more debt the more it is
possibility that the firm will have trouble in meeting its obligation. Thus the more debts
higher profitability of the financial distress and even bankruptcy. Further more the chance

of financial distress and debt obligation generally may create conflicts of interest among
the stockholders. In year 2005 MCB was heavily financed because debt was the major
source of financing in 2003, it was about 92%. In previous year 2009 the situation was to
some extent better because bank in this year was not heavily financed and not trouble to
pay its obligation.
Debt to Equity Ratio
Debt-to-Equity ratio shows the extent to which debt financing is used relative to
equity financing. Debt equity is calculated by dividing total liabilities of the bank by the total
owner equity.
Total Liabilities
Debt to equity =
Share holder Equity
439,483,714,000
=
6.911.045.000
= 63.59
DEBT TO EQUITY RATIO
Year 2005 2006 2007 2008 2009
64.48 55.14 56.56 61.30 63.59
66
64
62
Debt to Equity Ratio
60
58 64.48 63.59
56 61.3
54 56.56
55.14
52
50
2005 2006 2007 2008 2009
Years
Interpretation of Debt-to-Equity Ratio
Debt to Equity ratio shows how the firm’s stockholders bear the risk of the firm.
Greater the debt greater risk for the firm’s shareholders. In year 2005 risk for the
shareholders was very high because of heavy financing and in year 2009 also, the risk
was low in year 2005 as compared to other years.
Time interest earned ratio
It is also called interest coverage ratio, measures the firm’s ability to make
contractual interest payments it is calculated as follows.
Earning before interest and taxes

Time interest earned ratio =
Interest expense
28,452,223,000
=
15,841,463,000
= 1.796 Times
TIME INTEREST EARNED RATIO

Year 2005 2006 2007 2008 2009
Times 4.972 4.434 2.652 2.116 1.796

5
4.5
4
Interest Coverage Ratio 3.5
3
2.5 4.97
4.43
2
1.5 2.65
2.12
1 1.79
0.5
0
2005 2006 2007 2008 2009
Years
Interpretation of Interest Coverage Ratio
Coverage Ratio shows the number of the times a firm can recover or meet
particular financial obligation. It measures the coverage of the firm interest expense. 2005
is the best year for coverage their interest and fixed charge obligations.2006 year is also a
good one for the bank for cover their interest expense but next three year are worst on for
the bank wit respect to coverage ratio.
Equity Multiplier
Like all debt management ratios, the equity multiplier is a way of examining how
a company uses debt to finance its assets. It is the ratio of Total Assets to Stockholder’s
equity, this ratio demonstrate that how much an organization’s are financed by the
stockholders’ equity.
It can be calculated as:
Total Assets

Equity Multiplier =
Stockholders’ Equity
509,223,727,000
=
6,911,045,000
= 73.68
EQUITY MULTIPLIER
Year 2005 2006 2007 2008 2009
70.04 62.62 65.34 70.61 73.68
74
72
70
Equity Multiplier
68
66
73.68
64 70.04 70.6
62
65.34
60 62.62
58
56
2005 2006 2007 2008 2009
Years
Interpretation of Equity Multiplier
It shows how much total assets the firm has for each dollar of equity. In MCB it is
better in the last year 2009 it means that bank has about 73.68 in total assets of 100 of
equity. It was lowest in year in 2006 in my analysis that was 62.62.
Profitability ratio:

There are many measures of profitability. As a group, these measures enable the
analyst to evaluate the firm’s profit s with respect to a given level of sales, a certain level
of assets, or the owners’ investment.
Gross profit margin
It measures the percentage of sales dollar remaining after the firm has paid for its
goods. It is calculating as follow:
Sale – CGS
Gross profit margin =
Sale
Gross profit
=
Sales
35,774,544,000
=
51,616,007,000
= 69.30 %
GROSS PROFIT MARGIN

Year 2005 2006 2007 2008 2009
% 84.34 82.44 75.26 71.12 69.30
90.00%
80.00%
70.00%
GrossProfit Margin
60.00%
50.00%
4%
4%
6%
.3
.4
2%
40.00%
0%
84
82
.2
.1
75
.3
71
69
30.00%
20.00%
10.00%
0.00%
2005 2006 2007 2008 2009
Years
Interpretation of Gross Profit Margin
In case of banking sector we deduct interest expense from the sales/revenue which
result the gross profit of a firm. The gross profit margin shows that how efficient an
organization using their resources to generate profits. A higher margin percentage is a
favorable profit indicator.
MCB shows 84.34% gross profit margin in 2005 year in my analysis and the least gross
profit margin is 69.30% in the previous year 2009.
Operating profit margin
It measures the percentage of each sales dollar remaining after all costs and
expenses other than interest, taxes, and preferred stock dividend are deducted.
It is also called “pure profit” earned on each sales dollar. It is calculating as follow:
Operating profits
Operating profit margin =
Sales
28,452,223,000
=
51,616,007,000

= 55.12%
OPERATING PROFIT MARGIN

Year 2005 2006 2007 2008 2009
% 77.89 77.86 65.61 61.09 55.12
80.00%
70.00%
OperatingProfit Margin
60.00%
50.00%
6%
9%
40.00%
.8
.8
1%
77
77
9%
.6
2%
30.00%
.0
65
61
.1
55
20.00%
10.00%
0.00%
2005 2006 2007 2008 2009
Years
Interpretation of Operating Profit Margin
It shows that how efficient a firm uses their operating expense to generate
operating profit; operating expense included selling, general and administrative expense
that deducted from gross profit, we get gross operating income. In year 2005 and 2006
MCB has 77.89% and 77.86% operating profit margin which shows that organization use
their operating resources economically. In year 2009 this ratio is 55.12% which is least in
the previous four year.
Net profit margin:
It measures the percentage of each sales dollar remaining after all costs, expenses,
including interest and taxes have been deducted.
It is calculating as follow:
Net Income

Net profit margin =

Sales
15,495,297,000
=
51,616,007,000
= 30.02 %
NET PROFIT MARGIN

Year 2005 2006 2007 2008 2009
% 50.24 47.10 48.02 38.39 30.02
60.00%
50.00%
Net Profit Margin
40.00%
30.00%
4%
2%
0%
.2
.0
.1
50
9%
48
47
20.00%
.3
2%
38
.0
30
10.00%
0.00%
2005 2006 2007 2008 2009
Years
Interpretation of Net Profit Margin
Net Profit Margin tells you exactly how the managers and operations of a
business are performing. Net Profit Margin compares the net income of a firm with total
sales achieved. MCB shows 50.24% higher profit margin in year 2005 as compared to
other years that I have analyzed and the least net profit margin in 2009 that was 30.02%,
reason is that the tax provision and administrative expense has increased.
Cost to Sales Ratio

Cost to sales ratio determines the cost incurred in generating the sales of the bank.
The net sales of banks are its interest/mark up earned while costs of sales are its
interest/mark up expense incurred. The ratio is obtained by dividing cost of sales by net
sales.
It can be calculated as:
Interest Expense
Cost to Sales Ratio =
Interest Earned
15,841,463,000
=
51,616,007,000
= 30.69%
COST TO SALES RATIO

Year 2005 2006 2007 2008 2009
% 15.66 17.56 24.74 28.87 30.69
35.00%
30.00%
Cost to SalesRatio
25.00%
20.00%
9%
7%
.6
15.00%
4%
.8
30
28
.7
24
6%
10.00%
6%
.5
.6
17
15
5.00%
0.00%
2005 2006 2007 2008 2009
Years

Interpretation of Cost to Sales Ratio
Cost to Sales Ratio shows the cost incurred in generating the sales. In year 2005
the cost to generate sales was low as compared to other year which was only 15.66%,
after that it increase gradually due to increase in running business cost and in 2009 the
cost to sales ratio was 30.69%.
Earnings Per Share
EPS represents the number of dollars earned during the period on behalf of each
outstanding share of common stock. It is calculating as follow:
Earning available for common stockholders

E.P.S =
No. Of shares of common stock outstanding
15,495,297,000
=
691,104,527
= Rs. 22.42
EARNING PER SHARE

Year 2005 2006 2007 2008 2009
Rs 17.43 23.40 24.30 22.25 22.42
25
20
15
(Rs.)
EPS
23.4 24.3
22.25 22.42
10 17.43
0
2005 2006 2007 2008 2009
Years
Interpretation of Earning per Share
EPS told about the share price with respect to the earning available for common
stockholder i.e. the portion of a company's profit allocated to each outstanding share of
common stock. In year 2007 earning per share was highest as compared to the other
years.
Return on Total Assets (ROA)
It is also called the return on investment measures the overall effectiveness of

management in generating profit with its available assets. The higher the firms return on
total assets the better the firm is.

ROA =
Total assets
15,495,297,000
=
509,223,727,000
= 3.04 %
RETURN ON ASSETS
Year 2005 2006 2007 2008 2009
% 2.98 3.54 3.72 3.46 3.04

4.00%
3.50%
3.00%
2.50%
ROA
2.00% 3.54% 3.72% 3.46%
2.98% 3.04%
1.50%
1.00%
0.50%
0.00%
2005 2006 2007 2008 2009
Years
Interpretation of ROA
An indicator of how profitable a company is relative to its total assets. ROA gives
an idea as to how efficient management is at using its assets to generate earnings. It also
called as “return on Investment”. In year 2007 ROA was 3.72% which means that the
organization have 3.72% return of their investments. In last year 2009 it was to some
extent satisfactory.
Return on equity (ROE):
The return on common equity measures the return earned on common

stockholders investment in the firm. It is calculating as follow:

ROE =
Common stock equity
24,710,954,000
=
69,740,013,000

= 35.43%
RETURN ON EQUITY
Year 2005 2006 2007 2008 2009
% 40.79 42.02 37.75 35.12 35.43
44.00%
42.00%
40.00%
38.00%
ROE
2%
9%
.0
36.00%
42
.7
40
5%
34.00%
.7
3%
2%
37
.4
.1
35
35
32.00%
30.00%
2005 2006 2007 2008 2009
Years
Interpretation of ROE
Return on equity measures a corporation's profitability by revealing how much

profit a company generates with the money shareholders have invested. In year 2006 it
was 42.02% which shows the positive trend for the shareholder or investor in this
organization. In year 2008 it was least one and after that on last year 2009 was also lower
one with respect to year 2006.
Market ratios
Market ratio relate to the firm’s market value, as measured by its current share
price, to certain accounting values. It is measured in two ways:
 Price/Earning ratio
 Market/Book ratio

Price/Earning ratio:
It measures the amount that investors are willing to pay for each dollar of the
firm’s earning. The higher the price earning ratio the greater is investors’ confidence.
It is calculating as follows:
Market price per share of common stock

P/E ratio =
EPS
219.68
=
22.42
= 9.80 Times
PRICE/EARNING RATIO
Year 2005 2006 2007 2008 2009
Times 9.62 10.52 16.46 5.65 9.80
18
16
14
Price/EarningRatio
12
10
16.46
8
6 10.52 9.8
9.62
4
5.65
2
0
2005 2006 2007 2008 2009
Years
Interpretation of Price/Earning Ratio

In year 2007 the P/E ratio was highest because of the higher market price per
share that was about Rs. 399.95 In year 2008 this ratio was worst one due to lower
market price that was about Rs. 125.81 and the ultimate effect of the market price is on
P/E ratio.
Market/Book ratio
It provides an assessment of how investor views the firm’s performance. Firm

expected to earn high return relative to their risk typically sells at higher market/book
multiples.
Here first we will calculate Book Value per share as follows:
Common stock equity

Book value per share of common stock =
Number of shares of common stock
outstanding
61,075,932,000
=
691,104,527
= Rs. 88.37 per share
BOOK VALUE PER SHARE OF COMMON STOCK

Year 2005 2006 2007 2008 2009
Rs 35.77 68.71 72.28 75.60 88.37

90
80
70
BookValue/Share (Rs)
60
50
88.37
40 72.28 75.6
68.71
30
20 35.77
10
0
2005 2006 2007 2008 2009
Years
Market price per share of common stock

Market/Book (M/B) ratio =
Book value per share of common stock
219.68
=
88.37
= 2.48 Times
MARKET/BOOK RATIO
Year 2005 2006 2007 2008 2009
Times 4.69 3.58 4.15 1.66 2.48
5
Market/ BookRatio (Times)
4.5
4
3.5
3
2.5 4.69
4.15
2 3.58
1.5 2.48
1 1.66
0.5
0
2005 2006 2007 2008 2009
Years
Interpretation of Market/Book Ratio
It measures how much a company worth at present, in comparison with the

amount of capital invested by current and past shareholders into it. In year 2005 M/B
ratio was better one as compared to other years, it was 4.69 tomes which means that
market price per share is 4.69 times of the book value of the common stock. In year 2008
it was least one as compared to other year because of lower market price per share.
VERTICAL AND HORIZONTAL ANALYSIS

Vertical Analysis
Balance Sheet
2007 2008 2009
% % %
ASSETS:
Cash and balances with treasury banks 9.67 8.93 7.61
Balances with other banks 0.93 0.91 1.18
Lending to financial institutions 0.26 0.92 0.59
Investments-net 27.55 21.70 32.82
Advances-net 53.34 59.18 49.73
Operating fixed assets 3.90 3.89 3.55
Deferred tax assets-net 0.00 0.00 0.00
Other Assets-net 4.35 4.47 4.52
Total assets 100.00 100.00 100.00

LIABILITIES:
Bills payable 2.95 2.75 1.87
Borrowings from financial institutions 11.09 5.88 10.16
Deposits and other accounts 82.20 85.74 83.64
Sub-ordianted loans 0.13 0.00 0.00
Liabilities against assets subject to finance lease 0.00 0.00 0.00
Deferred tax liabilities-net 0.33 0.11 0.73
Other liabilities 3.30 5.52 3.60
Total liabilities 100.00 100.00 100.00
REPRESENTED BY:
Share capital 11.40 10.75 9.91
Reserves 61.69 62.92 55.04
Unappropriated profits 9.30 15.73 22.63
Total common stockholder equity 82.39 89.40 87.58
Surplus/ (deficit ) on revaluation of securities 17.61 10.60 12.42
100.00 100.00 100.00
Interpretation
Assets
Cash and balances with treasury banks
Cash and balances with treasury banks are decreasing year by year which also
shows the less percentage of total assets.
Balances with other banks

Balances with other banks are increasing slowly because bank mostly used these
funds in investment and advances. It only shows the slight portion of total assets.
Lending to financial institutions
In 2007 it was only 0.26% of the total asset but it increase in 2008that was 0.92%
of the total assets and then decrease in year 2009
Investments-net
Investment in MCB bank in year 2007 was 27.55 of total assets which decreases
in 2008 and become 21.70 The reason is less funds are used as investment in fully paid
up ordinary shares of listed companies and unlisted term finance certificates in 2008. It
increases in 2009 that was 32.82%.
Advances-net
Advances in 2007 was 53.34% and in 2008 it was about 59.18% of the total assets
and advances decreases in year 2009 up to 40.73% of total assets.
Operating fixed assets
Operating fixed asset is decreasing year by year but is same with total assets of
3% throughout the year.
Other Assets-net

The percentages of the other assets are increasing year by year of the total assets.
Liabilities
Bills payable
Bills payable are decreasing year by year, in year 2007 it was 2.95% of the total
liabilities which decreases up to 1.87% in year 2009.
Borrowings from financial institutions
Borrowings from financial institutions in 2007 was 11.09% of total liabilities

which means that MCB borrowings about 11% from other financial institution, and it
decreases in 2008 to 5.88% of total liabilities and further it increase up to 10.16%.
Deposits and other accounts
Deposits and other accounts increased in 2008 year and decrease in 2009 but lies
82% to 85% of total liabilities.
Sub-ordianted loans
It was 0.13% in year 2007 but further years there is no Sub-ordianted loans.
Deferred tax liabilities-net
Deferred tax liabilities-net in 2007 was 0.33% if total liabilities and decreases in
year 2007 and further it increase in year 2009.
Other liabilities

Other liabilities in year 2007 was about 3.30% that increase in year 2008 up to
5.52% of total liabilities, and decrease in year 2009 that was 3.60% of total liabilities.
Share capital
Share capitals are decreasing year by year due to lack of interest of investor in banking
sectors.
Reserves
Reserves of MCB are increasing year by year but decrease in year 2009.
Vertical Analysis
2007 2008 2009
% % %
Mark- up /return/ interest earned 100.00 100.00 100.00
Mark- up/ return/ interest expensed 24.74 28.87 30.69
Net Mark-up /return/ interest income 75.26 71.13 69.31
Provision for diminution in the value of 0.33 6.70 2.88

investment - nrt
Provision against non- performing loans and 9.31 3.33 11.23

advances - net
Bad debts written off directly 00.00 00.00 0.08
Total Provisions 9.64 10.04 14.19
Net mark-up /interest income after 65.62 61.09 55.12

provisions

Non-mark-up / interest income:
Fee, commission and brokerage income 8.29 7.16 6.46
Dividend income 1.99 1.54 0.89
Income from dealing in foreign currencies 2.18 1.82 0.66
Gain on sale of securities - net 4.72 1.85 1.50
Unrealized loss on revaluation of investments (0.04) (0.26) 0.00
Other income - net 1.77 2.35 1.43
Total non-mark- up / interest income 18.91 14.46 10.94
84.53 75.55 66.06
Non-mark-up / interest expenses:
Administrative expenses 15.80 18.85 19.58
Other provision / (reversal) - net (0.01) 0.03 0.28
Other charges 1.70 2.07 1.34
Total non-mark- up / interest expenses 17.49 20.94 21.20
Extra ordinary / unusual item 0.00 0.00 0.00
Profit before taxation 63.04 54.61 44.86
Taxation-Current year 20.27 18.33 14.92

-Prior years (4.07) (2.16) (4.32)
-Deferred 2.81 0.04 4.42
Total taxation 19.01 16.21 14.84
Profit after taxation 48.03 38.40 30.02
Unappropriated profits brought forward 17.40 12.81 17.81
Transfer from surplus on revolution of Fixed 0.04 0.05 0.04

Assets
17.44 12.86 17.85
Profit available for appropriation 65.47 51.26 47.87
Interpretation
Net Mark-up /return/ interest income
Interest income of the MCB are increasing year by year because with the increase
in the interest revenue the interest expense are also increasing but with the great
percentage there is another is that the return on deposit are increasing which leads to
increase in interest expense and the ultimate effect will be on interest income.
Administrative expenses
Administration expenses are increasing every year as approved pension fund as

well as post retirement benefits were high. Administrative expenses are increasing with
respect to the interest earned.
Taxation
Taxes are decreasing year by year because of decrease in Profit before taxation and
increase in non-markup expenses.
Profit after taxation

Profits after taxation’s percentage with respect to the interest earned are decreasing
because of overall effect of expenses and taxation.
Horizontal Analysis
Balance Sheet
2007 2008 2009
% % %
ASSETS:
Cash and balances with treasury banks 100 99.87 97.66
Balances with other banks 100 106.18 157.84
Lending to financial institutions 100 389.97 285.34
Investments 100 85.12 52.22
Advances 100 117.88 115.65
Operating fixed assets 100 107.73 12.42
Deferred tax assets 100 --- ---
Other Assets 100 110.86 128.94
Total assets 100 108.07 124.05
LIABILITIES:
Bills payable 100 100.69 78.27
Borrowings from financial institutions 100 57.52 113.33
Deposits and other accounts 100 113.06 125.84

Sub-ordianted loans 100 0.00 ---
Liabilities against assets subject to finance 100 --- ---

lease
Deferred tax liabilities 100 37.05 270.87
Other liabilities 100 181.30 134.94
Total liabilities 100 108.38 123.67
NET ASSETS 100 106.02 126.52
REPRESENTED BY:
Share capital 100 100 200
Reserves 100 108.14 112.89
Unappropriated profits 100 179.18 307.54
100 115.04 134.48
Surplus/ (deficit ) on revaluation of securities 100 96.41 89.27
100 106.02 126.52
Interpretation
Cash and balances with treasury banks, Lending to financial institutions, Advances,
Operating fixed assets, Investments are decreasing with respect to the base year 2007
while Balances with other banks and Other Assets are increasing with respect the base
year. In liabilities portion Bills payable increase in 2008 but decrease in 2009 regarding
base year, Borrowings from financial institutions in 2008 drop off but in 2009 increase,
Deposits and other accounts are escalating from the base year, deferred tax liabilities
decrease in 2008 but increase in 2009 regarding base year, and other liabilities decline
regarding base year

Horizontal Analysis
2007 2008 2009
% % %
Mark- up /return/ interest earned 100 125.98 162.38
Mark- up/ return/ interest expensed 100 147.98 201.40
Net Mark-up /return/ interest income 100 119.07 149.55
Provision for diminution in the value of 100 2549.65 1409.93

investment
Provision against non- performing loans and 100 (21.67) 209.29

advances - net
Bad debts written off directly 100 0.00 20792.46
Total Provisions 100 131.12 238.89
Net mark-up /interest income after 100 117.29 136.42

provisions
Non-mark-up / interest income
Fee, commission and brokerage income 100 108.81 126.46
Dividend income 100 97.67 72.71
Income from dealing in foreign currencies 100 104.92 49.24
Gain on sale of securities - net 100 49.34 51.56

Unrealized loss on revaluation of investments 100 787.47 0.00

Other income - net 100 167.32 130.69
Total non-mark- up / interest income 100 96.35 93.48
100 112.61 126.90
Non-mark-up / interest expenses
Administrative expenses 100 150.26 201.24
Other provision / (reversal) - net 100 470.37 4015.70
Other charges 100 153.69 111.02
Total non-mark- up / interest expenses 100 150.88 196.79
Extra ordinary / unusual item 100 --- ---
Profit before taxation 100 102.62 108.67
Taxation -Current year 100 113.95 119.57

-Prior years 100 133.19 1172.44
-Deferred 100 1.85 244.64
Total Taxation 100 107.45 126.76
Profit after taxation 100 100.71 101.50
Unappropriate profit brought forward 100 92.77 166.21
Transfer from surplus on revaluation of fixed 100 179.83 188.30

assets
100 92.95 166.26
Profit available for provision 100 98.63 118.75
Interpretation
Interest earned, Interest expensed, and total provision are escalating regarding the base
year 2007. Total non-mark up interest income is declining but the total non mark up
interest expense has increased gradually and Profit before taxation also show same
behavior. Total taxation has increased but the profit after taxation increase slightly.

SWOT ANALYSIS OF MCB

SWOT Analysis Of MCB
“The overall evaluation of a company’s strengths, weaknesses, opportunities, and threats”
Strengths included internal capabilities, resources and positive situational factors

that can help the organization to provide the best services and products to their customers
and to achieve their objectives.
Weakness is also included in the internal of the organization but these are the
limitation and negative situational factor of the organization which may interfere in the
company’s performance.
Opportunities are favorable factors or trends of external environment in which

company has able to exploit its advantages.
Threats are the external unfavorable factors or trends that may be challenges to
performance for the organization.
Strengths Weakness
 Image or Repute of the MCB  Low Job Satisfaction
 Technical Management Skills  Human Resource Issues
 Customers Satisfaction  Lack of advertisement
 Continuous Improvement  Centralization
 Diversify in Products  Manual Book-Keeping
 Employees respect and dignity  Multifaceted procedure of
 Faster Banking Account opening
Opportunities Threats
 Globally branch network  Economic Crunch
 Explore the consumer banking  Political Instability
Segment  New entrance of domestic and
 Diversification in products and foreign banks
services  Increase in Non-Profit Loans
 Expand Islamic Banking

Strengths
 Services offering are all Unique and different to others.

 Have the advantage of being the first mover in customer services.
 MCB Bank able to give really good customer care, because they know that
customers are the source of funds for them and also there is a great competition
among the banks in Pakistan.
 Attractive deposits and financing schemes offer by MCB bank with suitable
interest rate.
 Great check on operations and working of business through the Mystery shoppers.
 MCB Bank is always there, with absolute convenience and cutting edge
technology, to provide service beyond horizons.
 Online banking is the key feature. Key benefits of MCB Bank Online system is its
simplicity, convenient banking solutions over phone, instant access to banking
services from anywhere at anytime, and saves time and money.
 Use of ‘SYMBOLS’; banking software which produces greater customer
satisfaction by providing better services.
 MCB bank has an edge over other banks with regard to its timings which are from
9am – 5pm throughout the week and even on Saturdays.
 Islamic banking is especially popular among religious people and is operated by
Muslims from all around the globe.
 Various types of personal loans are offered to general public for e.g. Car4u, Pyara
Ghar etc.
 MCB Banks virtual Banking provides greater convenience to customers as they
can handle their transactions from anywhere at anytime.
 Diversification of their portfolio.
 Greater network with more than 1000 branches all around Pakistan.
 An Active ATM system in all over the Pakistan.

Weakness
 Difficulty in managing the extended network of branches.

 MCB Bank has various types of Debit card but it does not provide its customers
the facility of Credit Card.
 Need to focus more Human Resource issues.
 Shortage of staff, which causes extra burden on existing staff leading to fatigue
and boredom.
 Inexperienced hiring process which results in placement of the wrong person at
the wrong seat which leas low job satisfaction.
 There is a high degree of centralization in the bank. Almost all the decision-
making is in the hands of the upper management.
 Although the bank has computerized accounting system but, still the bankers use
to make their entries in the accounting register.
Opportunities
 Changes in social patterns, population, and lifestyle changes and in economical.

Mean people now thinking to deposit their money in such a sound bank.
 Good financial position creating a good reputation for future advances and huge
deposits.
 The MCB bank is entering in a growing industry and also going to further expand
its branches all over Pakistan as well as internationally.
 Such products or services which can give MCB Bank a monopolistic position.
 Islamic Banking attracts a large number of people.

Threats
 Unpredicted situation and fluctuation in the economy of Pakistan

 Political Instability leads to change in government policies that effect directly or
indirectly to the banking sectors.
 Threats of new entrance either they are domestic or foreign is considered as the
biggest threat for the MCB.
 Growing NPL’s of the industry which may hurt MCB also.
 Cost of doing business is going increasing day by day so it is very hard to
compete with the financial sectors.

PEST ANALYSIS OF MCB
PEST analyses tell How Political, Economical, Social and technological factors affect
MCB. These are the external factors which affects the whole organization.
Political and Legal Environment
Banks are strongly affected by the political and legal consideration. This
environment is composed of regulatory agencies and government law that influence and
limit various organizational and individuals. Mostly these laws create new opportunities
for business.
In Pakistan there is uncertainty about the government and their policies change
dramatically like a policy for withdrawn is that if anyone withdraws more than Rs.25000
then he will be charged 0.30% on withdrawal.
The law and order situation are not well which create uncertainty for the investor.
Business legislation has following main purposes:
 To protect banking companies from unfair competition

 To protect consumer from unfair business practices adopted by banking
companies
 To protect the interest of the unbridled business behavior
Economic Factors
Pakistan's economy is going weaker and weaker. 9/11 has a great influence on the
economic crisis of all over the world. Law and order situation also affect the economy of

Pakistan due to hesitation of investors in the bank. With economic factors the bank
influenced very much that are as under:
 Impact of WTO force to cost reduction methodology

 Low interest rate
 Inflation
 Low GDP growth
 Budget deficit
 Increase in Govt. duties
 Fluctuation in exchange rates
Socio-Cultural Environment
Social environment includes family, friends, a person's role and status. An

individual’s life directly by society and the person acts according to his or her society.
Cultural environment includes norms, values, religion, conception and perception.
 If we see the religion point of view then interest is not allowed that's why most of
the people hesitate to invest their savings in banks and yet they are not aware of
ISLAMIC BANKING
 Traditional business men do not like the business with bank. They pay their
creditors through cash not through cheque. They do not want to get the bank
facilities.
Technological Factors
Today is the era of technology. In the every aspect of life technology plays an important
role.

 Due to rapid change in technology every bank has to change its technology to
compete other ones.
 Increasing issue of securities due to technology resulted increase in cyber crime.

Cyber crime means manipulation. One person can easily transfer amount from
any other's account to his account.

APPLICATION OF CLASS ROOM LEARNING
It was my magnificent internship experience of eight weeks in Muslim

Commercial Bank Ltd. Main Civic Centre G-6, Islamabad. The knowledge given by my
respected and devoted teachers proved to be very helpful in understanding the
environment in the organization and working practically.
Following are some key points about application of my class room learning in the
organization:
The knowledge achieved from the subject Understanding Psychology and

Business Communication helped me in understanding customer dealing i.e. how to deal
with them? How to understand their problems? etc.
It also helped me in understanding the inter Organizational Communication i.e.

circulars, notices etc.
Also the Knowledge which I got from the subject Computer application in
Business especially Excel skills help me very much.
Financial Management and Principles of Accounting helped me in understanding

the accounting terminologies which are used in bank e.g. what is debit and credit
vouchers? What are these for? And also in understanding that how entries are made
against certain heads.
Math and statically courses helped me very much in understanding the some stat’s
analyses in the banks reports.

I could do this only with the help of the knowledge provided to me in my six
semesters of BBA (Hons.) at Bahauddin Zakariya University, Sub Campus Sahiwal.
WHAT I HAVE LEARNT IN MCB
In Muslim Commercial Bank Ltd. I really enjoyed working with the staff of Main
Civic Centre Branch, Islamabad. It was almost impossible to work in all the departments
within that limited time. But the staff of the branch provided me the opportunity to work
in the different departments for the sake of practical knowledge. I feel highly indebted to
work in the Main Civic Centre Branch, Islamabad with the experienced supervisor and a
young Operating Manager, because I have learnt a lot in that branch.
During my internship training in the MCB as I early mentioned that I have worked in
different departments & seats and learnt the following things:
 How to deal with different customers

 How to overcome the pressure
 How to manage your time with respect to work
 Collections of Cheques
 Opening Account
 Inward Outward clearing
 Different form of filling Vouchers
 Changing behavior with respect to the situation

SUGGESTIONS AND RECOMMENDATION
Following are some suggestions and recommendation for Muslim Commercial Bank
Ltd.:
Advertising
Bank must let potential customers know that all attractions for banking exist. This
is done by advertising on television and obtaining press coverage, in conjunction with
direct mail, window displays, leaflet in branches and in appropriate other locations (such
as hotels, shops, etc.) and including leaflets in statement of accounts sent to existing
customers in the hope that they will tell potential customers about the ser vices provided
by our bank.
Increase ATM’s Locations
Some personal sector customers prefer not to come to branch. They increasingly
want to deal with the bank in other ways, such as home banking or use of Automated
Teller Machines (ATMs), which need to be at every branch or some important shopping
plazas and airports etc.
Increased Services
One way to retain the customer s is to offer a wide range of services such as tax
advice, free life insurance equivalent to amount deposited, shares portfolio management,
fund management facility, etc., complimentary to the core services. Banks must have a

slightly different mix of services and mean of providing these such that customers can
choose the mix that suits them best.
Time Management
There should be a good management of time for the sake of employees i.e.
offering them free break hours instead of making them work in this time as well.
Growth Scope fro Employees
MCB should provide greater facilities to its employees, and give them bonuses for
their hard work and Promotions as well. There is a criticism on the banking management
that the salaries of the employees are decreasing in every succeeding year. And I think
this will shake the confidence and working habit of the employees
Professional Banking
The bank should hire banking professionals having experience in their respective
fields that will boost the performance of the company as currently MBAs and BBAs are
produced for this field so they should be hired for enhancing the performance of
company.
Job Rotation and Promotions
Most of the bank employees, are sticking to one seat only with the result that they
become master of one particular job and loose their grip on other banking operation. In
my opinion all the employees should have regular job experience all out-look towards
banking. The promotion policy should be adjusted

Communication for Employees
As such system should be designed that every employee who has some problems with his
officers can communicate it to the higher management and some steps must be taken to
improve that.
IF I AM THE MANAGER AT MUSLIM COMMERCIAL BANK
If I would be a manager at MCB I’ll take following steps:
I will apply such a communication system specially designed for employees

trough they can share the problems regarding work environment.
Complete working and break hours will be offered so that employees can work
efficiently.
I will make it sure that some of the employees should be sent for training to other
countries and employees from other branches should be brought here.
I will make promotions, job rotation and bonuses, an important part of policies of
MCB.
At every month’s closing when employees stay at branch even after working
hours, a
Dinner from bank will be offered.
To retain potential customers certain services will be provided and let them know
with advertising.
I will make it sure that Working environment, equipment, furniture and staff
dressing should be according to the modern banking style.

References
http://mcb.com.pk/
http://www.sbp.org.pk/
http://www.kse.com.pk/
http://www.investopedia.com/
http://www.scribd.com/
Business Recorder
Staff of MCB Main Civic Centre G-6, Islamabad

Mohsin Ali BBS 07 42

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Muslim Commercial Bank Limited

MCB's operations continued to be streamlined with focus on rationalization of

During the course of internship I learned about different functions performed by

BZU, Sub-Campus Sahiwal 1

In clearing department include main two types of clearing Inward clearing

BZU, Sub-Campus Sahiwal 2

INTRODUCTION OF BANKING SECTOR

BZU, Sub-Campus Sahiwal 3

At the time of independence, there were 631 offices of scheduled banks in

 State Bank of Pakistan

BZU, Sub-Campus Sahiwal 4

 National Bank of Pakistan

BZU, Sub-Campus Sahiwal 5

THE MUSLIM COMMERCIAL BANK LIMITED

MCB was founded by I SFHANI and ADAMJEE families in Calcutta on July 9,

The performance of MCB was badly affected by bureaucrat government. In

MCB besides being money financial organization have rendered invaluable

BZU, Sub-Campus Sahiwal 6

BZU, Sub-Campus Sahiwal 7

BZU, Sub-Campus Sahiwal 8

Best Bank In Asia Award 2008

Best Bank In Pakistan Award 2006

Best Bank In Pakistan Award 2005

Best Bank In Pakistan Award 2004

BZU, Sub-Campus Sahiwal 9

Best Bank In Pakistan Award 2003

Best Bank In Pakistan Award 2001

Best Domestic Bank Award 2000

Asia Money Awards

The Best Domestic Commercial Bank Award 2005

The Best Domestic Commercial Bank Award 2004

BZU, Sub-Campus Sahiwal 10

Mian Mohammad Mansha Chairman

Mr. Tariq Rafi Chairman

BZU, Sub-Campus Sahiwal 11

Human Resources Committee

Mian Mohammad Mansha Chairman

Risk Management & Portfolio Review Committee

Mr. Shahzad Saleem Chairman

Committee on Physical Planning, IT System & Contingency Arrangements

Mr. Sarmad Amin Chairman

Business Strategy & Development Committee

Mian Mohammad Mansha Chairman

BZU, Sub-Campus Sahiwal 12

Mian Raza Mansha Member

Chief Financial Officer

Mr.Salman Zafar Siddiqi

MCB 15 Main Gulberg, Lahore

Registrar’s and Share Registration Office

BZU, Sub-Campus Sahiwal 13

Organizational Structure of MCB Bank Ltd

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

Operational Management of the bank is being handled by a team of 10

BZU, Sub-Campus Sahiwal 14

MCB has restructured their Branch structure as follows:

BZU, Sub-Campus Sahiwal 15

Information about Branch

I have performed my internship Muslim Commercial Bank Main Civic Centre G-

Management of the Branch

M. Babar Sohail Branch Manager / Vice President

BZU, Sub-Campus Sahiwal 16

BZU, Sub-Campus Sahiwal 17

BZU, Sub-Campus Sahiwal 18