INTERNSHIP REPORT

ON

MUSLIM COMMERCIAL BANK

Instructed by:

Mr. Naveed Ahmed

Lecturer
Comsats Institute of Information Technology

Presented by:

Muhammad Hussain
MBA-A
Roll No.65
Semester 3
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Muslim Commercial Bank

DEDICATION

I dedicate whole of my education along with my life to my beloved parents and

respected teachers, who were always kind to me.
May God Bless Them (Aamin).
Muhammad Hussain
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Muslim Commercial Bank

TABLE OF CONTENTS

1. Preface

2. Introduction Of Bank

3. Types of Bank

4. Executive Summary of MCB

5. History of MCB

6. Vision & Mission Statement of MCB

7. Commercial Bank

8. Branches & ATMs 19

9. Product & Services21

10. Department in MCB25

11. Management Hierarchy28

12. Investment Banking

13. Know Your Customer

14. Remittance Department

15. Financial Statements

16. SWOT analysis

17. Work Performed By Me

18. Findings

19. Recommandations
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Muslim Commercial Bank

PREFACE

Banking sector owes a pivotal importance in the economy of any country through
its variant functions. This basic motivator that stressed me to join any bank for
Internship Training. Moreover, the experience and practice learned during this
tenure also prove very helpful and facilitating in the forthcoming professional life.
This report is the result of two months Internship will, Muslim Commercial bank,
Kot Fareed, Sahiwal. The motive behind selecting this bank is that it is one of the
Top 10 Asia, Bank‘s. The fact remains that Muslim Commercial bank, posses an
excel/cut and historical importance being the most senior and leading in terms
fluids and services to Pakistan at all ages of life.
I had with the strong belief that this report will guide and facilitate the readers to
understand the functioning of banking system and more importantly have good
knowledge about Muslim Commercial bank. My utmost efforts to elaborate this
report wit, material read, listened and observed. Yet, I feel that this period was
not long enough to learn and understand the complex and widespread
functioning of banking sector.
I am really thankful to the entire staff members of the aforesaid branch for the
friendly and cooperative behavior during my internship.
Muhammad Hussain
MBA-A
Roll No.65
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Muslim Commercial Bank

w ell-developed banking setup plays very significant role in the economic

development of a country. Banking sector is precondition for the
development of any country. The banking sector helps in proper
utilization of resources of the country by financing the less developed sector. It
also helps to keep cumulative demand in proper balance with the supply of those
resources, which are responsive to monetary demand.

DEFINITION OF BANK.

“A bank is an institution, which deals in money.”

I BROADLY SPEAKING
“Banks draw surplus money from the people who are not using it at that time, and
lend to those who are in a position to use it for productive purposes.”

2 IN OTHER WORDS
“Bank also accepts the deposits from public repayable on demand or otherwise
and withdrawal by cheques. Drafts order and include any post office saving
bank.”

BANK.
The word bank is said to have been derived from the Italian words “Bancus” or
“Banque”. The History of banking is transacted to be as early as 200 B.C.
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Muslim Commercial Bank

PEGETS DEFINITION:
no one anybody. Corporate or otherwise can be a banker who does not:
I Open current account
2 Pay cheques drawn on him
3 Collect cheques for his customers.

HARTS DEFINITION.
“A hanker is one who is in the ordinary course of his business, honors cheques
drawn upon his by persons from and for whom he receives money on current
account.”

ACCORDING TO THE BANKING COMPANIES ORDINANC, 1962:

SECTION 5(B):

“Banker means a person transacting the business of accepting, for the purpose
of lending or investment, of deposits from the public, and withdrawal by cheques,
drafts, order of otherwise, and inclined any post office saving banks.”

IMPORTANCE OF BANKING.

Banks play very important role in the economic life of a nation. The growth of the
economy is dependent upon the soundness of its banking system. Although
banks so not create new wealth but borrow, exchange and consume. These
make generation of wealth. In this way. They become most effective partners in
the development of that country. To encourage the habit of saving and to mobilize
these savings is its basic purpose. Banks deposit surplus from the public and
then advances the surpluses in the form of loans to the industrialists,
agriculturists, businessmen and unemployed people under different schemes so
that they setup their own business. Thus banks help in capital formation
if there are no banks, and then there would be concentration of wealth in few
hands great portion of wealth of a country would be idle. In the fewer developing
countries rate of saving is very low and due to this rate of investment and rate of
growth is very low. We can take hank just like a heart in the economic structure
and capital provided by it is like blood in it. As long as the blood is in circulation,
the organs will remain sound and healthy. If the blood is not provided to any
organ then the organ would become useless. So if the finance is not provided to
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Muslim Commercial Bank

agriculture sector or to industrial sector, it wills he destroyed.
Loan facility provided by bank works as an incentive to the producer to increase
production. Banks provide transfer of payment facility, which is cheaper, quicker
and safe. Many difficulties in the international payment have been overcome and
volume of transactions has been increased. These facilities are very much
helpful for the development of trade and commerce.

EVOLUTION OF BANKING IN INDO PAK SUB-CONTINENT:

The Indian society was quite familiar with the banking, right for the beginning.
There is also sufficient evidence to show that during 51h century people were
accustomed to use 1-lounds as a credit investment. Loans were given to the
people against personal and other Securities such as ornaments, goods and
other immovable properties.

TYPES OF BANK:

Following is the list of various types of banks:

Central Bank
Commercial Bank
Exchange Bank
Industrial Bank
Agriculture Bank

I. COMMERCIAL BANK:

The banks in any country speeded over with an objective to get the excessive
money Form the public in the form of deposits and providing finance to the
investors. These Banks are in the ground for profit earning motive and in
competition with each other. These banks are providing the basic services to the
customers in the form of deposits, Advances, remittances and others.

Commercial Banking Scenario In Pakistan:

At the time of Independence in 1947.ther were 38 scheduled banks with 195

offices in Pakistan. But by December 3l”, 1973 there were 14 scheduled
Pakistani Commercial Banks with 3233 Branches in Pakistan and 74 Branches in
the Foreign Countries Nationalization of banks was done on 1st January 1974
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under the Nationalization Ac 1 947 due to certain objectives. But it had negative
effects on the efficiency of the banking sector. Afterwards, a Privatization
Commission was set upon January 22nd, 1991. The Commission transferred
many banks to the private sector, i.e., Muslim commercial Bank and Allied Bank
Limited. The Govt. approved and permitted the establishment of 1 0 new private
banks in August 1991

Functions of commercial Banks:

I borrowing of money from customers in shape of term deposits (PLS Saving

Current Deposits and Notice Deposits).
2 Lending of money to borrowers in shape of finances, short-term finances, and
long-term finances under various names such as Demand Finance, Small
Finance, Cash Finance.
3 Agency services.
4 Remittance of money.
5 Foreign exchange business, foreign currency deposits. LCS, Imports and
exports etc.

ROLE OF COMMERCIAL BANKS IN THE ECONOMIC DEVELOPMENT OF A

COUNTRY:

Banks play an important role in the economic development of a country. If the

banking system is unorganized and inefficient, it creates market adjustments and
impediments in the process of development. In Pakistan, the banking system is
organized in well manner. The State Bank of Pakistan since July 1st. 1984
stands at the apex and is responsible of the operation of the banking system.
The other bands, which form the banking structure in Pakistan, are playing role in
h\the economic development of the country.
The role of the commercial bank in the growth and development of the economy
on sound and steady footings is discussed briefly as follows:

Mobilization of Resources:

The commercial banks are the most efficient organization of the economy in the
mobilization the resources and making a profitable pool of these resources.
Taking the Money from the savers and lending it to the investors is the most
prominent job of the hank

Financing Development Projects:

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The banks and other financial institutions advance loans for the development
projects that enhance the pace of overall development of the country. These
advances are made in both public and private sectors for the purpose of
achieving a good and strong economic field to catty on the other activities of
trade and business.

Creating Climate For Capital Formation:

Capital formation is done by the act of accepting people’s money and putting into
Profitable ventures. This money so accumulated, make possible the availability of
the needed capital by the investors. The investors on the other hand are able to
get the needed funds that shortfall their requirements.

Planned Development:

With the help of well-organized banking sector the government is able to make
good Implementation of its economic planning and can execute developmental
activities for the welfare of the society.

Promotion of Saving Habit:

There are persons who have money but cannot put them in profitable use. The
banks attract these persons by offering a variety of accounts. They provide them
not only the safety of the funds but also higher returns on them. The banks, in
this way, promote the habit of saving among the people.

Effective Implementation of Monetary Policy:

With the help of a good banking system in the country the government and the
central Banks regulate the monetary supply and demand of the money. A good
system helps in the implementation of the policies that are formulated by the
government. l through these banks using different techniques of credit control
makes credit expansion and contraction.
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Narrowing Regional Disparity:

The banks help in bridging the country. The surplus fund of on Region is sent to
the centers of deficit. The less developed areas acquire funds, put them into
productive channel and increase production. The banks help in a balanced
growth the economy.

Executive Summary

CORPORATE PROFILE

Mian Mohammad Mansha Chairman

S.M.Muneer Vice Chairman

Tariq Rafi
Shahzad Saleem
Sarmad Amin
Aftab Ahmad Khan
Atif Yaseen
Dr. Muhammad Yaqub
Mian Raza Mansha

Atif Bajwa President / CEO

Board Committees :

Audit Committee

Dr. Muhammad Yaqub Chairman

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Tariq Rafi Member

Mian Raza Mansha Member

Atif Yaseen Member

HR Committee
Mian Muhammad Mansha Chairman

Dr. Muhammad Yaqub Member

Mian Raza Mansha Member

Atif Bajwa Member

Risk Management Committee

Mr. Tariq Rafi Chairman

S.M. Muneer Member

Mian Raza Mansha Member

Aftab Ahmed Khan Member

Committee on Physical Planning, IT System and Contingency

Arrangements
Sarmad Amin Chairman

Atif Yaseen Member

Aftab Ahmad Khan Member

Atif Bajwa Member

Business Strategy & Development Committee

Mian Mohammad Mansha Chairman

S.M. Muneer Member

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Muslim Commercial Bank

Tariq Rafi Member

Mian Raza Mansha Member

Atif Bajwa Member

Credit Committee
Shahzad Saleem Chairman

Sarmad Amin Member

Tariq Rafi Member

Mian Raza Mansha Member

Chief Financial Officer

Tahir Hassan Qureshi

Company Secretary

Abdus S.Sami

Auditors

KPMG Taseer Hadi & Co Chartered Accountants

Riaz Ahmed & Co. Chartered Accountants

Legal Advisors

Mandviwalla & Zafar Advocates & Legal Consultants

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Muslim Commercial Bank

History of Muslim Commercial Bank

The Muslim Commercial Bank Limited was incorporated on 9th July 1947 in
Calcutta in Bengal. After partition, the Registered Office of the bank was shifted
to Dhaka where it commenced business from August 1948. The Bank transferred
its registered/Head office from Dhaka to Karachi in 1956. In 1999, its registered /
Head office was transferred to Islamabad and Karachi office was named as
principal office. The government transferred a 26% management stake to a group
of leading industrialists, collectively named National Group of which Mian
Mohammad Mansha is the Major stakeholder. In 1992 a further 24% was sold to
the National Group. The current shareholding structure is 50% National Group,
25% government and 25% floated on bourses.

NATIONALIZATION OF MCB

Muslim Commercial Bank Limited was nationalized by the Government of

Pakistan in January 1974 under the Banks Nationalization Act, 1974. Subsequent
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to nationalization the operations of premium Bank Limited were merged with the
Muslim Commercial Bank Limited in June 1974.

PRIVATIZATION OF MCB

The previous Government declared the privatization policy as one of its main
objectives and in accordance with its policy, the Government offered Muslim
Commercial Bank Limited for privatization. The Bank was the first Public sector
bank, which was privatized on 2nd April 1991. The Government of Pakistan
transferred management of the bank to Private Industrialists and Entrepreneurs,
"National Group" by selling 26% shares of the Bank at Rs.56 per share.

Present Status

Over the years Muslim Commercial bank fostered strong bonds with its
customers. MCB understands them; their needs. They feel comfortable with
MCB; its their bank; it responds to them; listens to them; partners with them;
grows with them. That is why it is one of the leading commercial banks of the
country, providing a wide range of modem banking services. At present, the
banking network consists of over 1000 branches along with – controlling offices
known as Area Head offices and Regional Head offices. These controlling offices
are responsible for the smooth operation of the bank on National & international
levels. The entire financial and operational objectives are achieved with the
Human Resources strength over 12000 employees. The bank is known as the
major credit provider, best place of working and paymaster in the financial
(money market) of the country. Over the past few years, MCB's profits have been
hit by the need to increase provisions coverage and restructuring costs
associated with the downsizing of the workforce and branch network, whilst there
is some need to boost provisions, these charges (necessary to bring the bank
back into shape) are largely over. It has also slowly received permission from the
SBP to shut down a number of unprofitable branches.
In 1999 EURO MONEY recognized MCB as the best domestic bank in Pakistan.
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Muslim Commercial Bank

The banking sector has been worst hit by the external account crisis that

Engulfed the country following the nuclear tests. Due to the nature of banks as a

Medium for debt transactions the country's technical default and subsequent

rating downgrade impacted them the most. Those core concerns are still not fully

alleviated in the view of the investors. The closest that investors have come to

positive expectations regarding external account sustainability and a possible re-

rating was back in the fourth quarter of the year 1999, and this led to MCB

climbing to Pakistani rupees 56 per share. Resumption of the IMF funding and a

possible rescheduling of bilateral debt will positively impact the banking sector
and especially MCB.
State Bank of Pakistan continued the process of Banking Reforms, which
included strengthen of Prudential Regulations and focus on recovery of defaulted
loans. In 1999 return on Government Savings Scheme and Treasury Bills was
reduced, which led to a lowering of lending rates, resulting in erosion of margins
for banks but it is likely to give a boost to economic activity.

MCB Rupee travelers Cheques continued to maintain their leadership position in

the industry and sales registered a 45% growth over last year. MCB successfully
introduced the Rs.100, 000 denomination cheque countrywide and introduced
RTC dialup tele-verification facility from Lahore city as well.

Mainly there are three types of Banking in MCB. These are:

CORPORATE AND INVESTMENT BANKING

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Corporate Banking Group of MCB is focusing on top tier local corporate groups
and multinationals in a structured and focused manner building relationships
leading to increased market share.

Branches having Advances of Rs.100, 000,000 per party relationship and

monitoring such advances are called as Corporate Branches. These branches
include corporate clients and their requirements are looked after. There are about
20 corporate branches of MCB in Pakistan.

OUR VISION & MISSION

Vision Statement

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

for a more prosperous and secure future.
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 in us with confidence.
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COMMERCIAL BANKING

The Commercial Banking Group of MCB continues to service the trading

Community and middle market, with sustained focus on developing new
customer relationships and increasing the asset portfolio.

CONSUMER BANKING
The Consumer Banking Group focuses on the lower end of the market and micro
credit. Individual customer needs are being serviced through the introduction of
diverse lifestyle consumer loans and introduction of new products and
partnerships with service providers. Customers will continue to use the extensive
branch network, which in turn will generate deposits to feed the asset
development and liquidity requirements of the Bank through its diversified and
stable deposit base.

ATM TECHNOLOGY

At MCB, technology has a direct relationship with the needs of the customers, it
is a mean of creating value and convenience for the customer. Over the last few
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years MCB has invested heavily into strengthening its technology backbone.
Today it is leading the way in banking technology and setting new standards for
the banking industry, penetrating into the local market, listening to the needs of
the people. MCB’s strength lies in providing technological base at a grass root
levels of the society with a challenge to educate and assimilate such systems
across vast cultural and economic backgrounds. With over 768 automated
branches, 243 online branches, over 151 MCB’s ATMs in 27 cities nationwide
and a network of over 16 banks on the MNet ATM switch, MCB continuously
innovates new products and services that harness technology for the customer’s
benefits.

Additionally in order to enhance the utility of the ATM services they successfully
linked their ATM network to the MasterCard, Cirrus and Maestro, effectively
becoming part of the largest ATM network in the world. MasterCard and
Cirrus/Maestro users can now access their ATM's network. Together with the
above MCB made a strategic decision to establish an ATM switch and open their
ATM network to other banks. The ATM switch has been named MNET. It has
following banks in MNET switch:

Standard Chartered
Citi Bank
MCB ATM SERVICES

MCB ATM Card

Welcome to a world of convenience with the MCB ATM 24- Hour Smart Card. "It
Works. Anytime in Pakistan and abroad."

With an ever growing number of ATMs operating across the nation, the MCB ATM
Network is the largest and most advanced of its kind in the country, and is part of
MCB's continuing efforts to provide you with convenience that suits your
requirements most. And now the MCB ATM has gone global. MCB's affiliation
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with Master Card International brings about added facilities for the MCB traveler
abroad with the Cirrus and Maestro networks.

So go ahead! Use your MCB ATM 24- Hour Cash Card day or night, at home or
abroad.
MCB ATM Regular Card
The MCB ATM Regular Card allows withdrawal of up to Rs. 10,000 per day and a
maximum of 3 withdrawals per day per card.

BRANCHES & ATMs

Mnet

MNET enables all the member banks to share their electronic networks. Which
means customers of member banks can use MNET as well as 1-Link ATMs
Nationwide. MNET member banks ATM machines accept cards issued by MCB
Bank Ltd, Citibank, Standard Chartered, HSBC, Saudi Pak Bank Limited, Habib
Metropolitan Bank, JS Bank, Deutsche Bank, SME Bank, Arif Habib Rupali Bank
and First Women Bank. MNET customers can use over 600,000 ATMs worldwide
that carry the logo and shop at over 5 million outlets that carry the logo.

M-Net switch has currently 612 ATMs in 50 cities. We plan to have the network
grow in faster pace in future as MCB itself will be adding more ATMs by the end
of the year. The ATM deployment has been planned in such a manner that a
customer will be only a few minutes away from an ATM in major cities. This
coupled with geographic coverage provides the largest convenient spread in the
country, because of which we are very strongly concentrating on Diverse
Coverage & Convenience.

M-Net Switch ATMs are present in all the major cities of the country. They are
available in the hilliest and northern areas of the country such as Murree,
Abbottabad and Swat etc thus providing convenience of accessing 24 hours cash
to the customers across the country.
M-Net switch also has its Service Centers in the main cities of the country
providing support to member banks customers. M-Net Switch ATMs are also
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present in all 3 main Airports of Pakistan i.e., Jinnah Terminal (Karachi), Allama
Iqbal International Airport (Lahore) & Islamabad International Airport.

MEMBER BANKS & their ATM Locations

In Pakistan, the ATM facilities can be availed at any of the following locations:

MCB Bank Ltd. Standard Chartered

CITIBANK Saudi Pak Bank limited

HSBC Habib Metropolitin Bank

Arif Habib Rupali Bank Deutsche Bank

First Women Bank SME Bank

CORPORATE IMAGE BUILDING

In view of Goals established through mission and vision statement, the first step
taken was to change the corporate image of the Bank, which inclined following
aspects:

In 1991 Bank changed its logo from

to current logo which is:

Which signifies the growth and prosperity? The change of logo was part of effort
to change image of the Bank as a progressive bank in the minds of people of
country.

A comprehensive electronic media campaign was launched with a logo "Good

Banking getting even better" stressing on the improvement.
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An on going process of Face Lifting and renovation of MCB branches was started
which is still going on. The purpose of it was to ensure the overall outlook of the
bank changes and employees get a better environment to work and customers of
the bank feel more comfortable.

NEW PRODUCTS AND SERVICES SINCE PRIVITIZATION

In order to achieve long-term goals of expansion and penetration in the market.

Bank introduced various new products for its customers, which cater to the needs
of various segments of the society. In order to do so, a constant process of
market research, evaluation and development of New products was started
which resulted in introduction of various new products which were earlier not
introduced by any other Bank in the country. Introduction of these products was
indeed a major source of penetration for the bank and turned out to be a
differential factor as compared to other banks:

Prime Currency Accounts - For foreign currency deposits, (since 1991)

Mahana Khushali Scheme - A monthly income plan through deposit of a fixed
sum in the account, (since 1991)
Hajj Mubarik Scheme - For intending Pilgrims, (since 1991)
Capital Growth Certificates - It doubles the deposit of depositor in 5 years. It
offers high rate of return and was introduced for fetching long-term deposit,
(since 1991)
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PLS 365 Savings Accounts. - Introduced high earning product with feature of
calculation of profit on daily product basis. No restriction on deposit withdrawals
and Minimum deposit of Rs.300,000/- (since 1992)
Fund Management Scheme - To generate funds to develop secondary market
for Government Securities (from 1991 to 1992)
MCB Khushali Bachat Accounts - Savings accounts with added value to
customers due to profit application of daily product basis.
MCB Dollar Khushali Accounts - For foreign currency deposits, (launched in
1993)
FAXPRESS - A fast inter-city Remittance Service, (since 1991)
MCB Rupee Travelers Cheques - The most popular product of MCB, introduced
Rupee Traveler cheque for the very first time in the country and it immediately
fetched high share of the market and MCB share is still growing - (launched in
1993)
Consultancy Services For intending buyers of State-owned enterprises being
privatized, (since 1991)
Self-Financing Scheme - Mark-up free finance from 5000 to 25000. (since
1991)
Night Banking Services (since 1991)
Utility Bills Collection Centers - Separate utility Bills collection centers were
established for collection of utility bills (since 1994)
MCB MasterCard - (since 1994)
EXPORTMOR - Financing facility for exporter (since 1994)
REMITEXPRESS - A fast remittance service between Pakistan and Middle East.
(Since 1994)
Personal Banking Services- In order to promote Consumer Banking system in
the country a proper personal Banking service was started for High Net worth
clients of Bank in selected branches (since 1995)
MCB Custodian Services - Launched for local and international capital market
clients.
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Online- The largest network of branches in the country and growing. Providing
customers with 24x7 real time online facilities.
MCB Call Center- Call now for answers to your queries-banking services, ATM
services, mobile banking services, RTC services, telebanking services and MCB
product information. The state of the art MCB call center is the right choice to
keep you in step with your ever hectic schedule by providing you services
relating to your account and Smart card at any point in time.
Our well-abreast and friendly call center team is available 24 x 7, 365 days a
year to ensure that your daily financial obligations are taken care of
guaranteeing you a good night’s sleep.

Cash Plus-Cash management services for corporate customers help customers

substantially reduce their receivable collection time frame, improve cash flow and
business management.
Islamic banking services through exclusive units/ branches offering a range of
liability and asset based sharia compliant products like musharika, murabaha,
ijara and istasana.
MCB Mobile banking-
Banking at your figure tips. Dial in anytime to get information regarding balance
and mini statements.
At the forefront of technological excellence, MCB proudly introduces MCB
MOBILE BANKING. The convenience of accessing your account balance
information and mini statements whenever you want or wherever you may need
them, with comfort and peace of mind.

MCB Mobile Banking service is available to all MCB ATM cardholders, 24 hours -
365 days.

Just call our Help Line on 111-000-MCB(622) or any MCB online branch for
assistance.
Mobile Banking at a Glance
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MCB Mobile Banking gives you easy and quick access to your account(s) at a
time you find convenient, including all holidays.

Banking at your Fingertips

With MCB Mobile Banking you can:
Check your balance
View the last 4 transactions of your MCB account(s).

A Free Service
MCB Mobile Banking is a free service for MCB account holders who have an
ATM card. All you pay for is the cost of an SMS message if charged by the
service provider.
MCB lockers- The best protection for your valuables. Lockers of different
capacities are available nationwide.
Pyara ghar- Flexible and competitive home financing facility with options of
home purchase, construction and renovation.
MCB car cash- Car financing and leasing at competitive rates with flexible
options.
Largest ATM Network- of 100 ATMs connected to worldwide ATM network of
about 350,000 ATMs along with Cirrus and Maestro facility enabling MCB ATM
card to be used All over the world & anywhere in the country.

CUSTOMER SATISFACTION

For any organization to succeed, it is extremely vital to ensure Customer

Satisfaction. Banks being in service sector, it is highly important that high service
standards be maintained and real value to their money is provided to its
customers. In order to do so MCB took three revolutionary steps:
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Muslim Commercial Bank

Provision of comparatively batter service to its customers as compared to other

banks through value added features of low cost, quick disposal of work and
friendly environment. Modernization, Computerization of most of the branches
enabled Bank stay abreast with the technology and provision of better service at
the root level to its customers.

Bank also started an ongoing process of Branch face lifting creating a better
congenial environment for its customers. In order to be more customers'
conscious, MCB started a very effective and timely action system on Customer
Complaints

Departments in MCB

Brief functions and responsibilities of departments at MCB are as follows.

Human Resources and legal group:

 Recruitment.
 Training.
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Muslim Commercial Bank

 Transfer & posting.
 Promotions.
 Disputes.
 Staff loans.

Banks operations group:

 Policy.
 Premises.
 Capital & operating expenses processing.
 Return & consolidation.
 Reconciliation.
 Product sales.
 Relationship co-ordination.
 Service standards.
 Customer complaints.

Financial Institution & overseas group:

 Inter-bank exposure.
 Forex licensing.
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Muslim Commercial Bank

Financial control & Audit group:
 Audit & internal control.
 Budgeting & planning.
 Monitoring of expenses.
 Financial reports.

Credit & risk management group:

 Credit proposal evaluation & analysis.
 Project financing.
 Monitoring of credit portfolio of bank.
.
Corporate banking group:
 Placement of all multi-national & public sector companies.

Consumer banking group:

 Penetration in high net-worth customers.
 Earning increase.
 Customer retention.

Commercial banking group:

 Conduction of normal retail operations.
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Muslim Commercial Bank

Treasury & FX group:

 Funds management.
 Investment management.

Assets management group/ Fraud control group:

 Classified portfolio looks after.
 Special assets management.
 Restructuring / Rescheduling.
 Out of court settlements

Information technology group:

 ATM / CIRRUS facilities.
 I.T. related franchise management.
 SWIFT system.
 On-line branches network look after.
 Hardware / software support.
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Muslim Commercial Bank

MCB’s Management Hierarchy

President
(M. Aftab Manzoor)

Human Resource Group Corporate Banking Group

Legal Group Corporate Corporate Corporate

South Central North
Raheel Ijaz
Bank Operation Group (GM)

Hamid Yasin Bashir Khan

Financial Institution Group (AVP-Credit) (AVP-Admn.)

Financial Control & Audit

Group

Mall Branch Blue Area G-8/4 Branch

Credit & Risk Management Branch ISB
RWP ISB
Group Nadeem Elahi
(CM) (CM)
(CM)
Consumer Banking Group

Operations Foreign Credit

Treasury & FX Group
Raja Khaliq Exchange Hameed
(AVP) Abdul Majeed Durrani
Assets Management/Fraud (OG-2) (AVP)
Control Group

Information Technology Group

Commercial Banking-North

Commercial Banking-South
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Business of MCB

MCB is in it’s over 50 years of operation. It has network of over 1,100 branches
all over the country with business establishments in Bangladesh, Sri Lanka and
Bahrain. The branch break-up province wise is Punjab (57%), Sindh (21%),
NWFP (19%) and Baluchistan (3%) respectively.

MCB has an edge over other local banks, as it was the first privatized bank. The
State Bank of Pakistan has restricted the number of The Consumer Banking of
MCB provides customers with innovative saving schemes, products and
services. The ATM network of MCB is the largest in Pakistan and the Pak Rupee
Travelers Cheques are market leaders. MCB was the first to introduce the Photo
Card with the launch of the MCB MasterCard.

The Corporate Banking of MCB ensures assistance from a dedicated team of

professional financial advisors for underwriting, project finance or corporate
advisory services.

When it comes to banking practices, the consumer can depend on MCB,

because it'd been around for over fifty years.

The State Bank of Pakistan has restricted the number of branches that can be
opened by foreign banks, an advantage that MCB capitalizes because of its
extensive branch network.

Eight years after privatization, MCB is now in a consolidation stage designed to

lock in the gains made in recent years and prepare the groundwork for future
growth. The bank has restructured its asset portfolio and rationalized the cost
structure in order to remain a low cost producer.
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Muslim Commercial Bank

MCB now focuses on three core businesses namely Corporate, Commercial and
Consumer Banking. Corporate clientele includes public sector companies as well
as large local and multi national concerns. MCB is also catering to the growing
middle class by providing new asset and liability products. The Bank provides 24
hour banking convenience with the largest ATM network in Pakistan covering 9
cities with around 100 ATM locations. The Bank's Rupee Traveler Cheques have
been market leaders for the past six years.

MCB looks with confidence at year 2002 and beyond, making strides towards
fulfillment of its mission, "to become the preferred provider of quality financial
services in the country with profitability and responsibility and to be the best
place to work".

Corporate Banking

MCB's Corporate Banking Team consists of dedicated professionals with the

requisite expertise to take care of the banking needs. The Corporate Bank with
20 branches has its presence in all major cities of Pakistan. The Area Offices are
located in Karachi, Lahore and Islamabad.

Corporate Platforms have been established in the three principal cities where
teams of dedicated Relationship Managers have been posted. These
Relationship Managers have been entrusted with the complete responsibility for
managing the risk of their allocated portfolios, acting as allusion between the
customer and the bank, and providing you with the entire range of
products/services offered by the bank.

The products/services of the Corporate Bank are broadly divided into the
following categories:

Working Capital Loans:

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Muslim Commercial Bank

The working capital loan includes Running Finance, Cash Finance, Export
Refinance, Pre-shipment and Post-shipment etc.

Term Loans:

Offer Short to Medium Term Finance to meet capital expenditure of the customer
business needs.

Trade Finance Services:

Trade finances services that include an entire range of import and export
activities including issuing Letters of Credit (L/Cs), purchasing export documents,
providing guarantees and other support services.

Cash Management:

The network of about 1100 branches in Pakistan enables the bankers to collect
and disburse payments efficiently with the MCB cash management services. This
also enables. the bankers to offer the customer’s choice of paper based or
electronic fund transfer solutions including collection amounts, rose branch on-
line transactions etc.
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Muslim Commercial Bank

Investment Banking

The Investment Banking Team of MCB has emerged as a leading player in

Pakistan's investment banking arena. The Team handles advisory, corporate
finance and capital markets related transactions. Within these areas, the
investment banking team of the MCB has developed expertise in the following
areas of the investment:

Private Placements
Debt/Equity Underwriting
Term Finance Certificates
Loan Syndication
Arrangement of Non- Fund Facilities
Mergers and Acquisitions

Financial Highlights

The results for the year 2001 are reflective of sustaining all-around efforts over
the few years, to maintain profitable growth along with prudent and proactive risk
management and expansion of product range of customers.

Pre-profit for the year 2001 was Rs.2.10 billion as against Rs.1.32 billion in 2000-
a healthy increase of 59%.

Growth in profitability is primarily due to fund-based activities through efficient

assets and liability management. Fee based income was lower despite increase
in volumes due to competitive pricing and discontinuation of charges on PLS
accounts.

Administrative expenses grew by 3% generally attributed to absorb effect of

inflation and enhancement in Govt. levies. Pragmatic efforts are, however, under
 34

Muslim Commercial Bank

way to manage costs in relation to revenues to further improve the
revenue/expense ratio. Higher level of provisions was in the line with the Bank’s
policy to upfront recognize problem lending. In 2001, the Bank managed to
recover Rs.2.19 billion as against Rs.1.97 billion in 2000.

The balance sheet footings have increased to Rs.187 billion from Rs.175 billion
primarily based on deposit growth. Deposits have registered a substantial
increase of 14% and stand at Rs.154.5 billion in 2001 as against Rs.136 billion in
2000. Despite of low PLS deposit rates, branch network has shown a
commendable performance by increasing and managing the deposit mix. This
has been possible by improvement in customer services and targeted sales of
products like ATM cards.

Net advances as at December 31, 2001 stood at Rs.76.6 billion, a reduction of

Rs.9.8 billion. Demand for credit from manufacturing and export clients fell
considerably, post September 11,2001, which led to a reduction in advances as
on the balance sheet date from a higher level during the year.

Leadership in Rupee Travelers Cheques: Sales have grown by 26% in the

year 2001 and continue to reflect meteoric growth. With the extension of the
generic brand, increase in the range of denomination backed by a powerful
verification system and over 900 branches involved in this business.

Leadership in ATM’s: With around 100 ATMs and 170 online branches, MCB is
again an undoubted Indus leader with connectivity extended to 16 cities of
Pakistan. In the year 2002 further ATM will be deployed and connectivity
increased to other cities. MCB ATMs not only serve 24-hour cash convenience
but also improve on the counter services and turn around time at cash counters.

The MCB ATM Master Card with Maestro and Cirrus networks has become a
global service furthering the convenience to our customers. Traveling customers
 35

Muslim Commercial Bank

can access their account from a large number of internationally deployed ATMs
and point of Sale (POS) units.

The MCB ATM Switch - MNET is now operational. IT GROUP of MCB has been
able to create the largest network for secure electronic financial transactions in
Pakistan. Local branches of six international banks are connecting to this
network. This will enable participating banks to use each others' ATMs resulting
in an increased convenience to MCB customers and customers of other banks.
The IT Group is currently expanding the network capability to provide the
customers access to banking through
multiple electronic channels.

American Express Bank enters into an ATM sharing alliance with Muslim
Commercial Bank:
Muslim Commercial Bank Limited and American Express Bank Ltd. signed a
Memorandum Of Understanding creating a mutually beneficial alliance, which will
enable customers of American Express Bank to use ATM facilities offered by
Muslim Commercial Bank. Mr. Taufiq A. Hussain, Country Manager, American
Express Bank Ltd., Pakistan in a simple ceremony in Karachi, signed the MOU.
MCB has setup an ATM Switch called MNET and American Express Bank is the
fourth foreign bank to sign the sharing MOU.
Speaking at the ceremony - AEB Country Manager said, "Customer service
quality is the cornerstone of AEB's philosophy and this initiative will significantly
enhance our customer service capability for our consumer banking clients". He
added "After having considered various routes to acquire this capability AEB
selected MCB as an ideal partner keeping in view the large network capability
and long standing relationship with MCB".

MCB with a network of over 1000 branches in the largest private sector bank of
the country. The Bank is a market leader in 24 hour banking convenience with
 36

Muslim Commercial Bank

the largest nationwide ATM network covering 11 major cities in all provinces of
the country.

CITI bank and Muslim Commercial Bank sign ATM sharing agreement:

Muslim Commercial Bank and CITI Bank signed an ATM sharing agreement
today. By the middle of this year, both Banks’ customers will be able to use the
services of either Bank's ATMs. Seen at the signing ceremony are Mr. Haroon
Basheer Sheikh, Head of Consumer Banking and Information Technology - MCB
and Mr. Nadeem Hussain, General Manager Global Manager Global Consumer
Banking – CITI Bank Pakistan with their respective team members.

Standard Chartered Grindlays and Muslim Commercial Bank to launch co-

branded credit card:
Rated as Pakistan's best banks ('domestic' and foreign' respectively) by Euro
money magazine Muslim Commercial Bank (MCB) and Standard Chartered
Grindlays signed a Memorandum of Understanding to launch the first-ever joint
servicing co-branded credit card in Pakistan. Under the arrangement the
partnering banks will have shared as well as distributed responsibilities to service
the customers in line with their respective strength's.
The Partnership will derive its strength by combining the large diversified
customer base of MCB and the track record of Standard Chartered Grindlays in
managing a successful credit card business in Pakistan. MCB, the largest Private
Bank in Pakistan, has over four million accounts domiciled in 1100 branches
across the country.
Standard Chartered Grindlays, the largest foreign bank in Pakistan, has over
ninety thousand satisfied card members and is a leading international player in
the cards business. With this new initiative the customers product of the two
leading banks in Pakistan. This agreement further strengthens the relationship
between these two banks; earlier this year Standard Chartered Grindlays signed
an agreement to join MCB's switch/ATM network, the largest in the country.
 37

Muslim Commercial Bank

FAYSAL BANK LIMITED to sell Muslim Commercial Bank’s Rupee traveler’s

cheques:
Muslim Commercial Bank Limited and Faysal Bank Limited signed an agreement
for the Sale and purchase of MCB Rupee Travelers Cheques at all 11 Faysal
Bank branches in Pakistan.
 38

Muslim Commercial Bank

Main categories of Account opening form:
Type of Account
There is a category of “Type of Account “, the customer can check any option to
open a certain account.
Following are certain kinds of accounts:
Current
PLS-Saving
MCB Saving-365
Khushali Bachat
PLS Term Deposit
New Foreign Currency Account (Current/Saving)
Currency
There is a category of “Currency” in the form:
In this section there are four kinds of currencies are given in which MCB opens
account. They are:
Pakistani Rupee
US dollar
Nature of Account
There is a category of “nature of account” i.e.
Individual
Partnership
Sole proprietor
Joint stock company
Introduction
Before opening an account a banker should ascertain weather or not the person
desirous of opening the account is a desirable customer. There is Reference
section in the form in which the person who wants to open an account must
provide a reference of a person who has already an account with MCB. For
current account only reference of current account holder is accepted whereas for
saving account reference of any whether current or saving is allowed. Preliminary
investigation is necessary because of the following reasons:
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Muslim Commercial Bank

 To avoid frauds
 Safe guard against unintended overdrafts
 To avoid negligence
 To replay inquiries against clients
 To comply with Prudential Regulations/Laws

There is a specimen signature card with the bank on which the signature of
account holder is to be taken while opening of his account. And then he is issued
with a cheque book.

It is advised that one must keep his cheque book under proper care but there are
cases that people sometimes lost their cheque books. In that case there is an
application form in the name of manager is available and the customer who
wants to get a new cheque book fills that form and gives it to the manager then
he is provided with a new cheque book. In other case a requisition slip is present
in the cheque book and whenever the customer wants a new cheque book he
simply fills that requisition slip and presents it to manager and gets a new cheque
book.

Know your Customer

In view of recent heightened global efforts to prevent the possible use of the
banking sector for money laundering, terrorist financing, transfer of illegal/ill-
gotten monies and as a conduit for white collar crime etc, the importance of
“Know your Customer” has increased. The objective of knowing a customer is to
have a fair idea about the identity, financial resources and general information
about the customer at the time when the relationship is established. A banker
must have following information about the customer:

\
 40

Muslim Commercial Bank

Customer’s Name:
Enter complete name as mentioned in original Identity Card/other business
documents.
Nature of Business/Profession:
If the customer is of salaried class then banker will enter his employer’s name. If
the customer is a businessman, trader, sole proprietor, then the banker will enter
the business name. Also enter the customer’s title/position and address of the
employer/business. Addresses with P.O. Box are not acceptable. Similarly
remarks like “Private Service”, “Business” are not acceptable, rather specify what
type of company/business the customer is associated with.
In case of individual his attested Photocopy of national identity card or passport
is required, in case of salaried person, attested photocopy of his sarvice card. In
case of partnership attested photocopy of identity cards of all partners is required
and attested photo copy of “Partner ship Deed” along with a copy of Registration
certificate with registrar of firms. In case of Company, Memorandom and Article
of association, certificate of incorporation, certificate of commencement of
business and attested photocopy of identity cards of all the directors is required.

Address:

Enter the complete residential/business address. Within the brackets you may
also provide prominent address identification marks for ease of physically
locating the address.

Contact Number:

Enter home, official, mobile, fax numbers and e-mail address (if available).
 41

Muslim Commercial Bank

Special Instructions:
Clear-cut operational instructions must be obtained from the customers. If the
customer has not given any special instructions in specified column, the column
must be cancelled by drawing a line, as this column must not be left blank under
any circumstances.

The bankers considered the following points while opening the accounts:

Remittances Department
The next department I worked in is Remittances department. The incharge of this
department, Mr. Khalid told me that there are four kinds of remittances they deal
in:

 Telegraphic Transfer
 Mail transfer
 Demand Draft
 Pay order

Another task of this department was to issue the traveler cheque and to give the
ATM card numbers.
Here is a little detail of all of these works:
Telegraphic Transfer:
It is a facility provided by the bank through which a customer can send or transfer
any amount immediately. The procedure for the customer is simple. And more
importantly the person who wants to transfer the funds may not have the account
in the bank even then he can avail this facility. The procedure is like this, a
customer walks in and fills an application form named as “APPLICATION FOR
REMITTANCE” in which he mentions the bank to which he wants to transfer the
funds also the name of the payee, his account number, also he has to mention
 42

Muslim Commercial Bank

his own address etc. then there are charges for this special facility provided by
the bank and the bank receives these from the person who is sending the funds.
Further there are two kinds of telegraphic transfers:
Ordinary TT
TT

The ordinary TT reaches to its destination after two days of its dispatchment
whereas simple TT reaches to its payee immediately because the payee branch
is informed immediately through telephone and fax.
For ordinary TT only two vouchers are prepared:
Commission Voucher
Postage Voucher
Whereas for TT three vouchers are prepared:
Commission
Postage
Telephone charges

In the application form of TT there are two options available for the person who is
sending the funds i.e whether the payees account is credited for the same
amount or payee is simply to receive the payment in hand.

Documents Prepared:

The documents that are prepared for the TT are:

TT register
Remittances
Confirmation of cable sent
And afterwards whole of these information are recorded in a big register named
as:
Branch outward remittance register
And after this procedure the respective branch is informed through telephone.
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Muslim Commercial Bank

Recommendations
This whole procedure is quite lengthy and hectic. So the only recommendation
that could be given is, it must be computerized

Another task of the accounts department is to give the customers the ATM card
number. The procedure is like this that when a customer applies for the ATM
card, he is given a certain time to collect the card. On due date the customers
gets his card from manager and for safety purpose the ATM number remains with
the account department and the customer gets his number from there.

Traveler cheque

In account deptt there are two people working. One’s job is to issue the traveler
cheque and the other is suppose to make the payment of TC. This work is
separated for the purpose of safety and to prevent the frauds.
When RTC is issued it is written in Traveler cheque register and when it is paid it
is posted in MBIS. Traveler cheque register is used to maintain the stock of
RTC’s.
When RTC is issued HO RTC deptt. Is credited and when RTC is purchased it is
debited.
One of the person has the complete register of staff’s salary he maintains a staff
salary register.

The remittance facilities of the MCB are according to the need of the customer.
Your beneficiary will receive the amount even if he/she does not have an MCB
account. The Remit Express facilities the MCB can be avail in the following
Bank/Companies:
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Muslim Commercial Bank

Demand draft

Demand Draft can be explained as the instrument which is payable on demand

as its name implies the same, the value of which has already been received. This
instrument is issued by one branch and payable at other branch of same bank or
other bank’s branch e.g. DD issued by MCB payable by ACBL.

Procedure of issuance:

The customer wants to make the DD fills in the same form or application i.e of
remittances in which he mentions the DD, the beneficiary’s name, the place, the
mode of payment i.e, whther he wants the payee to receive the cash, cheque or
debit his account, signature and his name and address
Check the application form.
Commission is charged as per bank policy. Also excise duty & withholding tax are
recovered as per applicable rates.
Entry is then made in DD issued register. In the DD issued register, separate folio
is allotted for each drawee branch and a serial control number is applied.
The entries made is DD payable account is credited and cash is debited and
when the payee receives the cash against DD, DD payable account is debited
and cash is credited.

Procedure of Cancellation of D.D.

On receiving the application for cancellation in writing along with original DD the
signature of the applicant is verified This signature should tally with the signature
on DD application form. Then cancellation is marked in DD issued register and
the drawee branch is Informed about cancellation.

Issuance of Duplicate DD In case of Lost/Stop Payment:

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Muslim Commercial Bank

Application is received and signature is verified, then the drawee branch is

informed about the loss of DD and further they are advised to tell the branch the
status of DD i.e whether it has been paid or not. Then a duplicate of DD is issued
with "Duplicate in lieu of original DD No____ dated____ reported lost" written
on its face. The duplicate DD will have the same control number.

PAY ORDERS:

Pay order is a kind of instrument issued and paid in the same branch. It is
normally issued for payment in the same city.

Procedure of Issuance of Pay order:

The customer fills the remittances application form and mark check on pay order.
On receiving application he is issued with a pay order after receiving charges. All
pay orders are crossed i.e “Payees a/c only”

Procedure of Cancellation of Pay order:

On receiving application for cancellation of pay order along with the pay order, it
is cancelled and cancellation charges are recovered.

Duplicate Pay Order:

If the payment of pay order has not yet been made a duplicate copy of it can be
made on receiving application from the customer. The duplicate charges are
recovered from customer.
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Muslim Commercial Bank

Clearing Department
CLEARING:

Clearing implies a system by which banks exchange cheques and other

negotiable instruments drawn on each other within a specified area and thereby
secure payment for their clients through the clearing house at specified time in an
efficient way.

Clearing House:

In past State bank was indulged in clearing function i.e for the settlement of
mutual obligations of different commercial banks. As all banks have their
accounts and keep a certain percentage of the cash deposits as a reserve with
Central Bank, it become easy to set up their mutual obligations by off-setting their
accounts.
The claim of banks against each other is settled by simple transfers from and to
their accounts. These methods of settling accounts though the central bank,
apart from being convenient is economical as regards the use of cash since
account are adjusted through accounts, there is usually no need for cash.
At present this function of state bank is performed by NIFT. And now clearing
house is a place where NIFT’s representatives of all scheduled banks sit together
and interchange their claims against each other with the help of controlling staff
of State Bank of Pakistan and where there is no branch of State Bank of Pakistan
the designated branch of National Bank of Pakistan acts as controlling member
instead of State Bank of Pakistan.
 47

Muslim Commercial Bank

Reasons of Cancellation of Membership:

When a bank is no longer a scheduled bank.

When any bank fails to meet its liabilities.
When It is prohibited to receive fresh deposits by State Bank of Pakistan or
Central Government.

Advantages of Clearing:

♪ As clearing does not involve any cash etc and all the transaction takes
place through book entries, the number of transactions can be unlimited.

♪ No cash is needed, as such the risks of robbery, embezzlements and

pilferage are totally eliminated.

♪ As major payments are made through clearing, the banks came manage
cash payments at the counters with a minimum amount of cash in vaults.

♪ A lot of time, cost and labor are saved. Since it provides an extra service
to the customers of banks without any service charges or costs, more and
more people are inclined and attracted towards banking.
 48

Muslim Commercial Bank

Rules & Regulations of Clearing House:

Timing: - Monday through Saturday

1st Clearing 10.00 A.M.
2nd Clearing 2.30 P.M.

 Cheques and other negotiable instruments are sent through NIFT’s

representative for exchange.

 All the cheques and negotiable instruments must be properly stamped and
suitably discharged

 Each and every Cheque must be accompanied by an objection memo

when returned unpaid duly initialed.

 Each bank is required to maintain sufficient funds in the principal account

with SBP to meet the payment obligations.

 The State Bank of Pakistan debits the account of each member of the
clearinghouse with the proportionate working expenses incurred on the
operation of clearing house. These expenses are very nominal.

Functioning of Clearing House:

All the scheduled banks which are the member of clearing house, must maintain
accounts with SBP, by debit and credit to which the clearing settlements are
made. If on a particular day, a bank delivers Cheque and other negotiable
instruments worth more than the total amount of Cheque received by it that
banks account with State Bank of Pakistan will be credited with the differential
amount. If on the other hand the total amount of Cheque and other negotiable
instruments drawn on a certain bank by other banks is more than the total
 49

Muslim Commercial Bank

amount receivable by it from other banks, then this bank's account will be debited
on that day.

The Cheque delivered to the other banks through NIFT’s representatives for
clearing are called outward clearing; whereas Cheque received from the
representatives of other banks for payment are called inward clearing.

How settlement is done in NIFT?

Presume that MCB got the Cheque, which are drawn on UNION BANK, UBL and
ACBL for amounts Rs.50,000/-, Rs.30,000/-, Rs.15,000/- respectively, its total
being Rs.95,000/-. It means that this amount is to be credited to MCB A/c with
S.B.P. On the other hand the Cheques drawn on MCB are from UNION BANK,
UBL & ACBL of Rs.15,000/- Rs.75,000/- and Rs.30,000/- respectively, its total
being Rs.1,20,000/-. It means that this amount is to be debited from MCB A/c.
The difference between Rs. 95.000/- credit and Rs.120.000/- debit is Rs.
25,000/- debit, which means the house, is against MCB for Rs. 25,000/-.

If we separately show it then,

MCB has to receive Rs.50,000/- from UNION BANK and to pay Rs.15,000/- to
UNION BANK so difference is Rs.35,000/- credit.
MCB has to receive Rs.30,000/- from UBL and to pay Rs.75,000/- to UBL so
difference is Rs.45,000/- debit.
MCB has to receive from ACBL Rs.15,000/- and to pay Rs.30,000/- to MCB so
difference is Rs.15,000/- debit.

GRAND TOTAL: + 35,000, - 45,000, -15,000 = -25,000

i.e. Rs.25,000/- debit.
 50

Muslim Commercial Bank

Hence MCB A/c with State Bank of Pakistan will be debited with Rs.25,000/- and
the contra will be other banks accounts respectively. This is called as "Debit and
Credit Rule".
The amounts and number of instruments received are entered in the House Book
from the main schedules of the respective banks.

The State Bank of Pakistan maintains two major books for clearing house
purpose :-

HOUSE REGISTER.

This book contains the information about the amounts and number of cheques
received and delivered by each bank is noted down. Its columns are just like our
clearing house-page.

HOUSE BALANCE BOOK:

This book contains the amount and number of cheques received and delivered
by each bank as well as the amounts which are to be received and paid to
respective banks through their accounts by State Bank of Pakistan is written
down. This book has the following columns:-

N To
To Pay No. of Cheques Receive
Initial ame Receive Initials
Amoun Received/Delivere d
s of d
t d Amount
Bank Amount

Both sides of this book are balanced. Vouchers are prepared from the slips
received from the respective banks and the amounts are compared with this
balance book.

Summary of Clearing House Working:

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Muslim Commercial Bank

The working of clearing house may be summarized as under:-

 The instruments are delivered to the respective banks.

 The instruments drawn on our Bank are received from other banks.
 The amount and number of instruments received are entered in the House
Book from the main schedules of respective banks.
 The amount of instruments delivered, received and the difference is
written on a Figure slip provided in the clearinghouse and the slip is
returned to the supervisor.
 The instruments are arranged branch-wise.
 Schedules are detached and kept safely.

OUTWARD CLEARING AT THE BRANCH:

The following points are to be taken into consideration white an instrument is

accepted at the counter to be presented in Outward Clearing:

 The name of the branch appears on its face where it is drawn on.
 It should not be stale or post dated or without date.
 Amount in words and figures does not differ.
 Signature of the drawer appears on the face of instrument.
 Instrument is not mutilated.
 There should be no material alteration if so, it should be properly
authenticated.
 If order instrument, suitably endorsed and the last endorsee's account
being credited.
 Endorsement is in accordance with the crossings if any.
 The amount of the instrument is same as mentioned on the paying-in-slip
and counterfoil.
 The title of account on the paying-in-slip is that of payee or endorsee (with
the exception of bearer cheque).
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Muslim Commercial Bank

If an instrument is in order then our bank's special crossing stamp is affixed

across the face of the instrument. Clearing stamp is affixed on the face of the
instruments, paying-in-slip and counterfoil (The stamp is affixed in such a manner
that half appears on paying-in-slip and half on counterfoil). The instrument is
suitably discharged, where a bearer cheque does not require any discharge and
also an instrument in favor of a bank need not be discharged. The instrument
along with paying-in-slip is retained while the counterfoil is given to the customer
duly signed. Then the following steps are to be taken:-

 The particulars of the instruments and the pay-in-slips or credit vouchers

are entered in the Outward Clearing Register.
 Serial number is given to each voucher.
 The register is balanced, the credit vouchers are separated from the
instruments and are released to respective departments against
acknowledgement in the register.
 The instruments are arranged bank-wise.
 The schedules are prepared in triplicate, two copies of which are attached
with the relevant instruments and the third is kept as office copy.
 The house page is prepared from schedules in triplicate.
 The Officer Incharge with branch stamp signs the schedules and house
pages.
 The grand total of the house page is taken and agreed with that of the
outward clearing register.
 The instruments along with duplicate schedules and house-page are sent
to the Main Office.

 However the amount is kept in float till final status of various instruments is
known from respective paying banks in second dealing.
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Muslim Commercial Bank

The entry of the instruments returned unpaid is made in Cheques Returned
Register. If the instrument is not to be presented again in clearing then a covering
memo is prepared. The covering memo along with returned instrument and
objection memo is sent to the customer who deposited the same in his account.

INWARD CLEARING OF THE BRANCH:

The particulars of the instruments are compared with the list.

 The instruments are detached and sorted out department-wise.
 The entry is made in the Inward Clearing Register (Serial Number,
instrument number, Account number and amount of instrument is written).
 The instruments are sent to the respective departments against
acknowledgement in the Inward Clearing Register.
 The instruments are scrutinized in each respect before honoring the same.

OUTWARD CHEQUES RETURNED UNPAID:

These are the cheques returned unpaid by us presented to us in Inward Clearing

due to some objections.

INWARD CHEQUES RETURNED UNPAID:

These are the cheques returned unpaid to us, which were lodged by us in
Outward Clearing.

RETURN OF CHEQUES AFTER CLEARING HOUSE:

Suppose all cheques received in the inward clearing are passed and later on it is
found that a cheque should have been returned. In such cases, we contact the
collecting branch and request them not to make payment against the proceeds of
the cheque which was not returned unpaid by us in due time. The cheque with
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Muslim Commercial Bank

objection memo along with a covering letter is sent to the collecting branch,
making request to issue a payment order in our favor.

To balance the cash-cum-day book we may debit Suspense A/c Sundry Debtors
with the approval of the manager. When the payment order is received, it is
lodged in clearing and the Suspense A/c -Sundry Debtor is adjusted accordingly.

SPECIAL CLEARING:

In addition to the normal clearing function at Clearing House it is mutually agreed

to hold an extra clearing at the Clearing House on a particular day and time,
which is known, as "Special Clearing". It is arranged due to rush of work arising
out of say, more holidays declared by the Central Government at a time, but
normally special clearing is held on last working day of our half yearly and yearly
closing, i.e. 30th June and 31st December every year.

Bills Collection:

The bills collection is the key department in each and main branch. The objective
of this department is to receive the cheque of different bank of different area.
Often the cheque is drawn to the customer of another bank or account holder of
the MCB and similarly the customer of another bank draw cheque to MCB
account. In both cases the cheque is cleared, endorsement conformed, or takes
the disbursed guarantee. And then deposit to the corresponding department or
banks or whatever the case may be.

Financial Statements
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Muslim Commercial Bank

SWOT ANALYSIS
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Muslim Commercial Bank

STRENGTHS

• MCB is Successive and Market oriented.

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

WEAKNESSES

• Low motivational level; non-aggressive marketing.

• Employees’ dissatisfaction due to ill treatment and improper reward
system.
• Favoritism and Nepotism in recruitment.
• Interest rate is very meager.
• Decision making process is very slow.
• It is not having greater no. of branches abroad.
• Though ATM network is the largest in Pakistan, still some potential areas
don’t have the ATM.
• MCB RTC is useable only in Pakistan.
• Some management positrons needed are not professional.
• Although most of the branches are computerized now, still some important
branches don’t have computers.
•

Opportunities:

• Leasing sector is growing in Pakistan for the last two to three years which
provides opportunity to MCB to go ahead in this area as well.
• MCB is providing Consumer Finances at comparatively lower rates which
paves a way to grab more customers
• Financing to small/medium cottage industries will definitely increase its
advances and profitability as well.
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Muslim Commercial Bank

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

THREATS

 Other private commercial bank with sound profitability is also a threat to

MCB e.g. UBL, Alfalah, HBL etc.
 For the last of many years, Pakistan is facing economic and political
instability which is a big threat.
 Afghan war and Iraq war has a deep effect on the economy of Pakistan,
which may affect MCB.
 Foreign banks are flourishing in field of consumer financing.
People don’t prefer banking culture. They mostly prefer cash transactions
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Muslim Commercial Bank

Work Performed By Me

I joined Muslim Commercial Bank, Kot Fareed Branch, Sahiwal 18th July 2008.
First day I reached there at 9’O clock and reported to manager who introduced
me about the functioning of the branch and its staff. During these two months I
worked in different sections of the branch to learn the maximum practices of
banking system.

GENERAL BANKING

First of all, I was asked to work in different sections of General Banking. Here I
was attached Mr. Ayaz Ahmad who has good command on this section. Here we
dealt with new customers who wanted to get information about the branch and
will to deal with the branch. This is a very interesting department because here
we met people of different types and deal with them accordingly.
In this section, I observed the following functions:

CHEQUE AT COUNTER.

A cheque is presented on the counter with the two signatures of the bearer on
the back of the cheque. Operation’s manager verifies the following points:
The cheque number
Cheque Date
The cheque signature with the signature specimen card position in the officer
signature
received at the time of opening the customer’s account in the presence of the
officer
Cheque amount in figure and words
Branch stamp in the front of the cheque
Check the nature of cheque, bearer cheque, cross cheque etc.

CHEQUE PAYMENT PROCEDURE.

Receiving and scrutinizing the cheque

Fixing the stamp
Scripting and receipt by the authorized officer
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Muslim Commercial Bank

ISSUANCE OF DEMAND DRAFT

A demand draft is provided to the client in whom he has to specify that on which
bank it is drawn. The amount both in words and figures is written on the demand
draft.

BILLS COLLECTIONS DEPARTMENT

I spent second week of my training in bills collection department.

Miss Sumaira is the in charge of this section. Here we collected utility bills like
electricity bill.

BILLS REMITTANCE DEPARTMENT.

It is most important and interesting department. This section deals with the
transfer of money from one branch to another branch. Nearly six drafts issued
daily from this department.
Here I know the amount transferred and what is the procedure. This department
also deals with T.T. transfer of money. I worked nearly three weeks in this
department.

DEPOSIT DEPARTMENT.

Deposit department deals with current, saving fixed accounts for a long period.
In current account the bank does not offer any interest you can deposit or
withdraw any amount during banking hours. In PLS account we can only
withdraw up to Rs. 25OOO/ without notice if you want to withdraw more than a
notification must he given to the bank. In Fixed account people normally of old
age are more interested because they get a lump sum amount every month as a
markup or interest. These accounts are normally for two to five years.

CLEARING DEPARTMENT.

In clearing department we deal with cheques of our clients drawn on different

banks. Here I also watched the working of clearing house up to 12.00 pm all the
branches send their cheques to main branch. Where they stored and presented
in the State Bank of Pakistan.
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Muslim Commercial Bank

FINDINGS

N
ormally which we study the performance of Muslim Commercial Bank it is
considered that on the whole bank is contributing a lot towards the
industrial development and capital formation in the country. As it is
exhibited from the data regarding the banks financial performance as shown in
this report that the bank is sharing major banking business of the country. Further
the policies and schemes as are introduced and carried on by the bank are of
great source of help in industrial and trading growth. All these things reflect the
great and valuable efforts on the part of executive command of the bank which is
finally responsible for the productive performance of the bank. But as it is said
that nothing is perfect in this work. This might stand true in the case of Muslim
Commercial Bank also.
So far as my own observations are concerned. I have concluded a major
drawback in the inner current banking system. In addition to the I have also learnt
some disciplinary wrong practices on the part of staff of the bank branches.

NO QUALITY IN ATTITUDE.

The attitude of the bankers with all of their customers is not the same, they pay
more attention and good service to some of the customers and neglect a major
portion of them. Some of the customers approach to the bank officials and get
their work done before others; it is not a good practice.

NO PROPER GUIDANCE

There are so many customers who don’t know how to fill cheques, pay-in-slip,
application form, etc. They waste a lot of time of the bank stall.

RECOMMANDATIONS
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Muslim Commercial Bank

PROPER PLANNING

Bank should make a plan to gear up its recovery efforts on war footing and
reorganize the recovery function of global bases. In addition, bank should tighten
up control on
expenditure.

PROPER GUIDANCE.

Bank should adopt such an induction plan that when a customer opens his
account with the bank he should be supplied with a booklet which enables him to
know the procedure of filing the cheques, pay-in-slip etc. It will save a lot of time
of the bank staff afterward during the conduct of the account of that customer.

DIVISION OF WORK.

The billing system of MCB must be improved to facilitate the customers and
workers. The work should be divided among the staff e.g. collection of bills.
Countering of cash and then entry of these.

CHECK OF EXPENDITURES.

Expenditure must be controlled. Which are very high and unnecessary?

BORROWING AT LOW COST.

Deposits must be taken at a lower cost and given at higher interest rates.