Вы находитесь на странице: 1из 66


Internship Report submitted to the Faculty of Commerce &Accountany in Partial Fulfillment of the Requirements for the Degree of Mater in Commerce. By Name of Student: Roll Number: Date of Submission :

Sehrish Khalid
12052054-062 15 september 2013

Name of Program Coordinator Signature of Program Coordinator

University of Gujrat(G.T Road

Science Campus) Faculty of Commerce &Accountancy Course Title: Internship (Report based on Internship)
Course Code: MGT -403

Page 2

I dedicate this internship report to my parents. Because of their prayers and encouragement I have been able to complete this report. Praise is to Allah, the most Gracious and Merciful, who blessed me with the knowledge and wisdom and enabled me to overcome this task. Heartiest gratitude to my parents without their continuous encouragement and love I could not have accomplished this task.

Page 3

1 2 3 Chapter#1 1.1 1.2 1.3 1.4 1.5 1.6 Chapter#2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 Chapter#3 3.1 3.2 3.3

Acknowledgement dedication Executive summary Introduction Background of study purpose Scope Objective Banking sector overview MCB performance over view Overview of organization Brief history of MCB mission vision Awards and achievement Business volume Products/service line PEST Analysis MCB competitive strategies Organization structure Number of Employees of MCB Introduction of all Departments Comments on Organization Structure

Page 4

Chapter#4 4.1 4.2 4.3 Chapter#5 5.1 Capter#6

My internship work Introduction of branch Internee work Learning Summary Conclusion SOWT analysis Recommendations



Page 5

MCBBank 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, 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 banks 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.

Page 6


Page 7

Introduction to the Report

The basic purpose behind the preparation of an internship report is to make the student job down the experiences of the internship and discuss the understanding of the operations of the organizations. So, We can work well in future. For this purpose I did my internship in MCB Bank Limited, Kutchery Road Gujrat which was the most feasible being the oldest, reputed and well established bank and it is the main branch of the district, where I can enhance my skills and learn the basics of business environment. This report is about MCBs products, fields of activities and its management style. The results show the progressive image of the MCB bank as compare to the competitors. Management style is somewhat participative and its culture is friendly and cooperative. All the employees were extremely cooperative and accommodating. All the employees under whom I worked were learning from the experience as well.

Background of the study:

Internship training program during commerce accountancy Program is necessary for the partial fulfillment of the completion of Degree of Commerce in master . It is necessary for me to complete an internship session of about 6 weeks in some manufacturing or service industry relevant to my area of interest and specialization. So, I choose the Banking field because I have the interest in this sector because my study background is related with this sector.

Internship is the great experience that provides me with hands-on, practical job experience. Ideally, internship will enable interns to: (a) Integrate and use my knowledge and skills from the classroom, (b) Discover where further competence is needed, (c) Take steps to gain that competence under educational supervision, and
Page 8

(d) Become better acquainted with the types of work settings in which such competence can be applied.

This study will facilitate the students regarding the working of Banking sector of Pakistan because most of the teachers during their lectures use the examples of Banks like MCB, National Bank, UBL, Bank Alfalah and many others, students should study this report so that they must grasp the functioning of such Banks. Report will help to know working of banking sector in Pakistan. And it helped me a lot in getting the practical knowledge of working in bank as internee.

I worked as an internee in MCB Kutchery Road, Gujrat. The main objectives to study in MCB were: To get some experience in working with well reputed organization. To gain knowledge about the professional environment of the bank. To know about the technology utilized in the banks. To deal and manage with the situation of stress.

Banking Sector Overview

Pakistans banking and finance sector grew by over 21 percent from July 2004March 2005 amid the eight percent expansion in the services sector in Pakistan. Financial sector in Pakistan is going through a fast-paced transition as new groups were buying out foreign banks operations in Pakistan. The number of listed banks is also increasing. While the income from core banking activity has increasing due to higher business volume, earnings are also expected to improve due to ventures into consumer finance, housing finance and enhanced lending to the agriculture sector.

In just four years the banking industry has expanded tremendously and now there are
Page 9

more than two dozen commercial and investment banks operating in the country. Commercial banks in the private sector had performed well since their inception, registering overall growth in the deposit base and profits. The banks also managed to maintain a healthy credit portfolio. Foreign banks have a strong presence in all major cities and are targeting high net worth individuals and blue chip companies. Their strategy is quite successful as they account for about 34 percent of total sector profits, despite having only 15 percent of deposits and 16 percent of advances.

During the first six months of the ongoing fiscal year, total assets of all the scheduled banks increased by Rs 239 billion. Total assets grew by 8.5 percent from Rs 2,800 billion in June 2004 to Rs 3,039 billion in Dec 2004. During the first six months of 2004-05, there was also an increase of Rs 277 billion in the net advances of the scheduled banks. Net advances grew by 19.3 percent from Rs 1,437 billion in June 2004 to Rs 1,714 billion in Dec 2004.

MCBs Performance Overview

The first half of 2005 was very promising for MCB, as the bank has achieved pre tax profits of Rs. 4.2 billion, compared with Rs. 2.2 billion for the same period in 2004. Profit after tax has more than doubled compared to the corresponding period for 2004 and exceeds Rs. 3 billion highest ever profit in the history of MCB. This translates into earning per shares of Rs. 7.43. Advance and deposit increased to Rs. 156 billion and Rs. 241 billion reflecting a growth of 14% and 10% respectively. Additionally the banks assets expanded by 16% during the half year ended 2005 and crossed Rs. 300 billion marks. Banks equity (capital and reserves) increased by 41% during the half year, which was due to the issue of right shares and retained earnings. Increase in equity would improve the lending limit and would provide the opportunity for significant growth of

Page 10

the banks balance sheet. This would also help to meet the capital requirement under Basel Accord II, which will be effective from 2007. Based on continuing growth and consistently outstanding performance, MCB has once again received the Euromoney Award 2005 for the Best Bank in Pakistan. MCB has become the only bank to receive the Euromoney Award for Excellence for the fifth time in last six years. In addition, Asia Money has also declared MCB as The Best Domestic Commercial Bank in Pakistan for the year 2005.


History of MCB
MCBBank 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, which as a combination is considered to be the core competence of MCB.

Page 11

MCB has become the only bank to receive the Euromoney award for the fourth time in the last five years. MCB won the "Best Bank in Pakistan" in 2005, 2004, 2003, 2001, and in 2000 the "Best Domestic Bank in Pakistan" awards. In addition, MCB also has the distinction of winning the Asia Money 2005 & 2004 awards for being "The Best Domestic Commercial Bank in Pakistan". Ten 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. MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking. Corporate clientele includes public sector companies as well as large local and multi national concerns. MCB is also catering to the growing middle class by providing new asset and liability products. MCB looks with confidence at year 2005 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".

We will draw from the respect we have earned as Trusted Third Party Processor and will become a distinctive organization known for innovative use of technology to continually improve products and services for the benefit of our customers and their customers and keep them abreast with times to compete in the global society.

Page 12

We focus on our customers as an active component in growth process. We continue to offer services that expand their access to excellent and affordable technologies. Our qualified and experienced workforce must work closely with our customers to continually enhance their confidence and trust in us.

Euromoney Awards Best Bank Award 2008

Best Bank Award 2006

Best Bank Award 2005

Page 13

Best Bank Award 2004

Best Bank Award 2003

Best Bank Award 2001

Best Domestic Bank Award 2000

Asia Money Award Best Domestic Commercial Bank Award 2005

Best Domestic Commercial Bank Award 2004

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

Page 14

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.

Best Bank In Pakistan Award 2005

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 years.

Best Bank In Pakistan Award 2004

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. Best Bank In Pakistan Award 2003

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". Best Bank In Pakistan Award 2001

Your trust and our commitment is always an award wining combination MCB was awarded as a Euromoney Award 2001 for the " Best Bank in
Page 15

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"

Business volume:
MCB Bank Ltd.

Page 16




Banking Capital Markets



Headquarters Registered Office: Islamabad, Principal Office: Karachi Pakistan

Key people

(Chairman)Mian Mohammad Mansha


Loans, Credit Cards, Savings, Consumer Banking etc.


PKR 35.782 Billion (2009)[1]

Net income

PKR 26.753 Billion (2009)[1]

Total assets

USD 6.02 Billion



Page 17

Deposit Accounts
Khushali Bachat Account
Khushali Bachat Account, a Rupee savings account is one of MCB Banks most popular products. Due to the low initial deposit, the account can be opened by people from all walks of life and still avail the facility of daily product profit calculation.

Mahana Khushali Bachat

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

Pak Rupee Savings Account

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

Pak Rupee Current Account

MCBs Pak Rupee Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day plus you can avail finance facility up to 75% of the total deposit.
Page 18

In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines.

Pak Rupee Term Deposit

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

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

Foreign Currency Savings Account

MCBs Foreign Currency Savings Account offers you attractive returns on your Foreign Currency investment.

UK Pound Sterling, Japanese Yen or Euro

withholding tax

Foreign Currency Current Account

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

MCB Foreign Currency Term Deposit

Page 19

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

Dollar Khushali Account

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

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

MCB Car4u
Life is like a chess board. You plan your career options. You analyze your business moves. But when you really want to improve your life, you make a power move.MCB CAR4U Auto Finance is the power move that assists you in more ways than you ever imagined. It is affordable, with lowest mark up, flexible conditions, easy processing and above all, no hidden costs.

MCB Pyara Ghar

Some destinations require a long wait. Like waiting for a home of your own. But with MCB Pyara Ghar it is now easy to step into your home and start living a real life.

Page 20

MCB Pyara Ghar is an ideal Home Finance from your own bank that lets you Purchase, Renovate or Construct your home the way you have always wanted. Having your own home was never so easy

Easy Personal Loan

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

MCB Master Card

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

MCB Rupee Traveler's Cheques

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

Corporate Banking
Cash Management Services
MCBs network of over 900 branches in Pakistan enables it to collect and disburse payments efficiently with its cash management services. This also enables it to offer

Page 21

you a choice of paper based or electronic fund transfer solutions including collection amounts, cross branch on- line transactions etc.

Working Capital Loans

Based on the customers specific needs, the Corporate Bank offers a number of different working capital financing facilities including Running Finance, Cash Finance, Export Refinance, Pre-shipment and Post- shipment etc. Tailor- made solutions are developed keeping in view the unique requirements of your business.

Term Loans
MCB offers Short to Medium Term Finance to meet capital expenditure and short term working capital requirements of our customers. The loans are structured on the basis of underlying project characteristics and cash flows of the business.

Trade Finance Services

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

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

MCB Mobile Banking

Page 22

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 Call Center

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

MCB Smart Card

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

MCB Debit Card

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

Deposit Schemes
For customers who are looking for a deposit opportunity where they can purse their funds and reap halal returns on it, we offer the following products: -Makhraj Saving Account
Page 23

-Makhraj Ianat Account -Makhraj Term Deposit

Fund Based Facilities Ijarah Products

MCBs Islamic Ijarah, analogous to the English term 'leasing, is based on the Ijarah wa Iqtina concept which means the sale of the asset to the lessee after the Ijarah has matured. Under this scheme, MCB will be the owner of the asset, and the customer (lessee) will be given the asset to use for a certain period of time in return for monthly rental payments. MCB will give a separate unilateral undertaking that it will offer to sell the asset to the customer (lessee) at the maturity of the Ijarah agreement at a price that may be equal to the security deposit amount, hence the term Wa Iqtina.

Types of Ijarah
Car Ijarah Equipment Ijarah

MCBs Competitive Strategies

To be competitive the Bank has further reinforced its position in the Consumer Banking arena by streamlining and re-launching the consumer financing products and introducing more convenience based solutions. With the re-launch of auto finance and house finance products, the Bank pushed the products with full thrust. The Bank has also launched a running finance facility against mortgage of property. Technology continued to play an important role in improving and expanding product offerings. The Bank introduced more IT based products to cater to the changing
Page 24

lifestyles and needs of the customers. MCB Virtual-Internet Banking was launched with wide ranging banking solutions for the customers ranging from individual to corporate customers and it has become the most preferred Internet banking solution in the country. MCB also had the privilege of being the first Bank in Pakistan to launch the comprehensive bill payment facility through its alternate delivery channels which include Internet Banking, ATMs and MCB Call Centre, currently with six payment partners. Similarly, the Bank also took initiatives to increase the usage of debit facility. To provide timely and updated information, MCB has also provided a new look to its website which is user friendly and considerably easy to browse. The Islamic Banking initiative has been very successful in attracting new customer, both individuals and companies. Similarly, those relationships, which were confined only to current account facility, have grown into stronger business relationships. The branch network was expanded to Lahore and Multan during the last year and recently been extended to Hyderabad and Faisalabad. The Bank plans to further expand its Islamic Banking branch network to other metropolitan areas and also to introduce new sharia compliant banking solutions to a wider range of customers for satisfying their individual and business needs. Some wide-ranging new strategic initiatives were also taken upwhich will be important for the Bank in years to come. A private company has been formed in Hong Kong (fully owned subsidiary of MCB) in partnership with Standard Chartered Bank, handling trade transactions of select countries in the Asia-Pacific region. It is projected to earn US$ 1 million in its first year of operations. To increase its international presence, the Bank will be opening its representative office in Dubai and entering into major strategic alliances with banks in the UAE/ especially for marketing our consumer banking products to non-resident Pakistanis. Furthermore, feasibility is also being carried out for entering other international markets. 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
Page 25

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. Management of Human Resources has been one of our core focus areas. MCB is committed towards attracting, retaining and motivating outstanding people. Challenge for MCB is to provide an environment in which employees can better realize their potential. The Bank introduced 'reward for performance' where high potential officers were identified and rewarded accordingly. In view of the competitive environment, the Bank is focusing on performance and introducing a more robust performance management system. MCB is also strongly committed to training its staff at all levels. The Bank will also be implementing the full suite of the latest version of SYMBOLS Version 8. MCB Bank will run SYMBOLS eFinance modules to deliver personalized services to its customers over multiple delivery channels, while SYMBOLS Enterprise Operations Center will serve as its core banking transaction-processing engine. By implementing SYMBOLS, MCB Bank aims to raise the level of its customer service and its time to market in new product offerings for its three core banking businesses in Corporate, Commercial and Consumer Banking - retaining its market leadership as Pakistan's progressive Bank.

MCB posted an after tax profit of Rs15.26b with earnings per share of Rs 24.30 in FY07 as compared to profit after tax of Rs12.14b with earnings per share of Rs 19.33 in FY06, depicting a significant growth of 26.0% in FY07. Net interest income increased by 13% to Rs23.9b from Rs21.2b in FY06. The gross interest income grew by 23%, while the interest expense grew by 74%, depicting an increase in the cost of raising funds. The non-mark-up income increased by 20% to Rs 6 billion. The major contribution came from a 148% increase from the capital gained on sale of securities. The asset base increased by 20% from 342 billion to 420 billion in 2007 as compared
Page 26

to 2006.Deposits showed a steady increase of 13% to bring the figure to Rs 292 billion as compared to Rs 257.4 billion in FY06. Advances increased by 10% to Rs218b, while the investments increased by 78% to Rs 113 billion.

Recent Results:
MCB Bank Limited posted profit after tax of Rs4.1b with an earnings per share of Rs 6.55 in 1Q'08 vis-a-vis of Rs 3.7 billion with an earnings per share of Rs 5.93 in 1Q'07, depicting a growth of 10.3% during the period despite dismal performance of banking sector during 1Q'08. Net interest income of the bank grew by just 2.5% during the period to Rs 6.1 billion as compared to Rs 6.0 billion in the corresponding period of last year. High cost of deposits was the main reason behind.

Employment practices are expected to change. Unions, Associations are being allowed to work effectively which can affect the performance of the company both positively or negatively. Political interference regarding policies is expected to increase as current government is in race of power gain. Due to lack of confidence on government investor is reluctant so mobilization of funds is going to decrease.

Inflation is very high which will decrease the demand as purchasing power is decreasing. Staff cost is increasing as basic wage rate has increased and inflation has compelled to will compel to increase salaries.
Page 27

Operating costs are increasing due to inflation. Interest rate is increasing so loan taking has decrerased. Value of rupee is decreasing which is pressurizing the economy.

Social And Cultural

Lack of experts is in our country regarding management hence innovative activities are slow and conventional methods are adopted. Cultural strain to savings is the reason due to which investment remains low . Declining work ethics is also our problem which is mainly due to poverty, lack of training. Inadequate Accountability ,lack of good governance and lack of good infrastructure helps creditor to cheat and heavy bad debts occur. Same situation is hoped to prevail. Inadequate Empowerment is also a usual problem in our organization as every person want to get more power hence there is less delegation of authority and decision making.

MCB has computerized its most of the branches but still some are manual there is need to computerized otherwise customers will get bad image. Now a days computerized system is used by banks whis is very effective. But MCB will have to improve its computerized technology as some fake transactions occur by ATM. Shortage of electricity is a big problem, Employees of each organization need IT training and organization has this trend. MCB will have to follow it.

Page 28

Page 29

Organizational Structure of the MCB Branch

Page 30

As MCB is a banking company listed in stock exchange therefore it follows all the legalities which are imposed by concerned statutes Mr. Muhammad Mansha is chairman & chief executive of the company with a team of 10 directors and 1 vice chairman to help in the business control and strategy making for the company. Operational Management of the bank is being handled by a team of 10 professionals. This team is also headed by Mr. Muhammad Mansha. The different operational departments are Consumer Banking & IT div; Financial & Inter branch div; Banking operations div; HR & Legal div; financial control & Audit div; Credit management div; Commercial Banking div; Corporate Banking div; Treasury management & FX Group and lastly Special Assets Management (SAM) Group. For effective handling of branches, it has been categorized into three segments with different people handling each category. These categories are: a) Corporate Banking b) Commercial Banking c) Consumer Banking

A) CORPORATE BANKING: These are branches which have an exposure of over Rs. 100 million. Usually includes multinational & public sector companies.

B) COMMERCIAL BANKING; The branches which has a credit exposure of less than Rs. 100 million but having a credit portfolio of more than Rs. 20 million (excluding staff loans) Usually branches in large markets and commercial areas come under this category.

C) CONSUMER BANKING These are the branches which have exposure up to Rs. 20 million and these include all the branches which are neither corporate nor commercial branches. Recently the organizational structure was re-designed as follows: Province wise branches
Page 31

Corporate Consumer Commercial 20 branches 637 branches 383 branches

MCB is the largest bank of the country. It serves its customers well. It has the highly skilled and qualified employees to serve their customers. Total number of employees of MCB is 9704.

Page 32

REGISTERED OFFICE: MCB BUILDING, F6/G6 Jinnah Avenue, Islamabad PRINCIPAL OFFICE: MCB TOWER I.I. Chandigarh Road, Karachi

REGISTRAR AND SHARE REGISTRATION OFFICE: THK Associates (pvt) Ltd. Shares Department, ground floor Modern Motors Houses Beaumont road Karachi

Page 33

sehu ur f rebemuN
Punjab 632 Sindh 232 NWFP 123 Blochistan 34 Azad Kashmir 19 Domestic 1040 Overseas 4 EPZ 1 Total 1045 Sri Lanka 3 Bahrain 1

Furthermore, the bank has some proposals under consideration to open more brances in some European countries and as well as in japan & china

MEDIOCRE LEVEL MANAGEMENT The organization chart within a department and in different offices is as follows: Divisional Heads .. Head Office Regional Head (EVP) .. Regional Office Zonal Head (VP) .. Zonal Office Branch Manager .. Branch (VP, AVP, GRADE 1, 2, 3)

The purpose of banks is to provide some services to the general public. And for this purpose different banks provide different services to the people in different forms.
Page 34

The Muslim Commercial Bank (MCB) is a commercial bank, in modern time commercial banks play a very important role and their functions are manifold. The main functions and services which Muslim Commercial Bank Limited provides to different peoples are as follows.

1) Open Different accounts for different peoples 2) Accepting various types of deposits 3) Accepting various types of deposits 4) Granting loans & advances 5) Undertaking of agency services and also general utility functions, few of those are as under: a) Collecting cheques and bill of exchange for the customers. b) Collecting interest due, dividend, pensions and other sum due to customers. c) Transfer of money from place to place. d) Acting an executor, trustee or attorney for the customers. Providing safe custody and facilities to keep jewellery, documents or securities. e) Issuing of travelers cheques and letters of credit to give credit facilities to travel. f) Accepting bills of exchange on behalf of customers. g) Purchasing shares for the customers. h) Undertaking foreign exchange business. i) Furnishing trade information and tendering advice to customers.

For proper functioning of branches and the over all bank has been divided in different departments. These departments handle different jobs so that division of work is there for improvement of functions and also it is easy to control the situation. The general division in a branch is as follows:

1) Cash department 2) Deposit department 3) Advances & credit department 4) Foreign exchange department Technology department (new addition in order to cop with the growing needs of day to day technology requirements)
Page 35

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

Bank deals in money and they are merely mobilizing funds within the economy. They borrow from one person and lend to another, the difference between the rate of borrowing lending forms their spread or gross profit. Therefore we can rightly state that deposits are the blood of the bank which causes the body of an institution to get to work. These deposits are liability of the bank so from point of view of bank we can
Page 36

refer to them as liabilities. The total deposits of MCB are growing since its inauguration but after privatization there is a sharp incline in over all deposits of the bank. The increase in deposits is also a cause of increase on total number of accounts; bank has progressed in both aspects.

Deposits can be segregated on two bases, one is the duration in which there funds are expected to be with the bank and second is the cost of getting these funds. So divide deposits in two classes according to duration of deposits i.e. 1) Time deposits / liabilities 2) Demand deposits / liabilities And on the basis of the cost to acquire these funds, a deposit can be classified as any one of following four, High Cost Medium Cost, Low Cost No Cost. Banks has different kinds of deposit schemes in order to induce deposits. These schemes are a mixture of the above mentioned two types of deposits with an addition of different services & requirements such as minimum balance' requirement, mode of transaction, basis for calculation of profit, deductions, additional benefits, eligibility for different groups. In the similar fashion, MCB has a large variety of deposit schemes and some of them are as follows:


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

PLS SAVING BANK A/C (SA): This type of account is for those persons who want to make small savings'. This type
Page 37

of account is opened with a minimum deposit of Rs. 1000/-. Under this scheme deposits can be made only up to a-costing amount and withdrawals are allowed twice a week or 8 times a month. If a big amount is required a seven days notice is required before the withdrawal. The profit is paid on these accounts on the minimum balance during a month for the whole of that month. Zakat & other withholding taxes are deducted as per rules of the government.

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

PLS 365 SAVING A/C: This is a special type of saving account in which customer maintains a minimum balance of Rs. 300,000- and in turn he gets the benefits of daily profit calculations and also there is no restriction on the maximum number of withdrawals as was there in the case of KBA. There is also another advantage of this scheme that if balance on a particular day falls below the minimum balance then only the product of that day is ignored whereas in KBA, if balance falls below the minimum limit then all the products for that month are ignored on in other words no profit is paid for that month.

NOTE: PLS Saving, Kushali Bachat & PLS 365 saving accounts can be opened in foreign currency also. Before nuclear tests of 1998 these accounts were opened in four major currencies but now these are only opened in USD ($). However, now bank discourages the opening of foreign currency accounts because no forward cover risk is provided by State Bank of Pakistan (SBP) and all the loss in case of devaluation or depreciation in local currency has to be born by bank himself. This increase in cost has left foreign currency account of no use, therefore, now bank prefers to accept deposits in local currency rather in foreign exchange.
Page 38

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

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

MONTHLY KUSHALI SCHEME: This scheme is similar to CGC in the sense that an initial deposit is made in this case also but instead of lump sum payment at the end of the tenor, the person gets a monthly profit on his deposits. Under this scheme, the bank has guaranteed minimum rate of 1% per month but usually this rate is more than 1% per month. Zakat & withholding tax are calculated as per rules laid down by the government. PLS TERM DEPOSIT RECEIPTS (TDRS) This is a type of term deposit in which a receipt is issued for varying tenors ranging
Page 39

from 1 month to 5 years or more. These are in the form of receipts and profit on these receipts is paid biannually. These receipts are encashable after expiry of the period for which they were issued. Different profit rates are applied to different type of TDRs.

SPECIAL NOTICE DEPOSITS (SND): Under this deposit scheme, a deposit is received from the depositor under the condition that he will intimate the bank before a certain period in case of withdrawals. There are two types of SNDs, they are 7 days and 30 days notice deposits. The profit is paid on these deposits but it is nearly equivalent to saving account rate.

FUNCTIONS This was a brief review of different types of deposit schemes. The Deposit Department handles the account opening, profit payment and accounting of all types of deposit schemes.

Account opening is an agreement in which customer offers his funds and bank accepts these funds, therefore the nature of relation between a banker and customer is of a contractual one and all the conditions applicable to this contract act are also applicable.

PROCEDURE FOR OPENING: Procedure for opening of account is as follows: A person, who wants to open any kind of account, has to fill in a printed form which is provided by the bank, free of cost. Separate account opening forms are used for different types of accounts. Bank usually requires that new depositor must be introduced by some one. An introducer can be any person known to the bank but preferably it should be a customer of the bank. However, the manager can open the account by his own introduction. If the manager is satisfied, it will obtain the full signature of the customer- on the form and specimen signature card, makes the first deposit, and issues the cheque book.
Page 40

The following are given to the customers: Pay-in-slip is the proof of deposit. For every payment which is. to be deposited in the bank, the pay-in-slip is to be filled up. The object of this book is to provide the customer with the bank's acknowledgment for receipt of money to be credited this account. Cheque Book contains a number of cheques. It enables a customer to make withdrawal from this account or make payment of various parties by issue of cheque. Pass Book is a copy of the customers account as appears in the books of the bank. Balance is recorded in this book by the Clerk. NOTE: 1) In case of partnership account partnership deed should be attached. 2) In case of companies memorandum and article of association, certificate of incorporation, certificates for commencement of business, list of directors and board resolution for opening of account is also obtained from the customer. 3) Accounts of Trusts, Executors & Administrators can also be opened but with the prior approval of the Head Office. Profit payment & calculation is done in accordance with the rules of each type of deposit scheme-by the deposit department. The products for each deposit scheme are calculated separately and added till the end of 6 month period. Then the sum total of these products is multiplied with the respective profit rates which are issued by the Head Office at the end of each half yearly closing. The profit provisions for each type of deposits are also calculated on monthly basis by the same department in order to calculate the net profit or loss position of the branch. Accounting entries are also made in the respective books of account by this department. However, in small and medium size branches, the accountant performs the book keeping duties for all kinds of ledgers.

Every banker acts both as a paying as well as a collecting banker, It is however an important function of crossed cheques. A large part of this work is carried out through the bankers clearing house.
Page 41

A clearing house is a place where representative of all banks of the city get together and settle the receipts and payment of cheques drawn on each other. As the collecting banker runs certain risks in receipt of their ownership the law has provided certain protections to the banks. The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a cheque or draft may cross the instrument generally or specially. It further lies down that a crossed cheque can only be paid to a banker, who collects it for a customer in good faith and without negligence.


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

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

COMMON PROCEDURE FOR ALL CHEQUES: i) Receiving and scrutinizing the cheques and other deposit instruments, and the payPage 42

in-slip at the counter. ii) Fixing the stamps. iii) Scrutiny and receipt by the authorized officer. iv) Returning the counter file to the depositor. v) Certificate and confirmation by the officer in charge of the department. , vi) Separating the cheque into transfer, transfer delivery, and clearing cheques.

a) The instrument should be neither stale/ nor post-dated. b) If the instrument is crossed not negotiable it can be for the third party (an endorsee of an order cheque, or a holder of bearer cheque). c) The Instrument should not bear any unauthorized alternation. d) The instrument should not be mutilated. e) The amount in words and figures should be same. f) The instrument should be drawn on any local branch. g) If cheque is "crossed Account Payee's" only or "Payee's Account", it should only be accepted for collection for the payee's account. h) The cheques or drafts should not be crossed specially to any other bank. i) A cheque payable to a firm should not be accepted for credit to a partner's account. j) A cheque payable to one of the joint account holders should not be collected for the joint account without the payee's endorsement, or consent. k) A cheque drawn by a customer in the capacity of agent, Attorney, or Manager of his company or firm, should not be collected for credit to his personal account. l) Pay orders, although negotiable should not be collected for third parties. m) Do not collect an instrument in the account of an agent or of the servant of the payee or endorsee of the instrument. n) Not transferable" instruments, like Telegraphic Transfer, or Mail Transfer Receipt, Pay-slips, and Treasury Receipts, should be collected for a person other payee. o) If an account is new or the balance or operation of the account is not satisfactory, satisfy your self about the title of the customers to the instruments before accepting the deposits. p) Branch agent's permission should be obtained before accepting a third party cheque
Page 43

or draft for the credit of the member. q) If the payee is a Government Department, Government Official, or a trust account the instrument cannot be collected, but for the payee's account. r) If the payee of an instrument is UBL, it can be collected for credit of the drawers account, or the amount of the instrument may be utilized as desired by the drawer in writing. s) Cheque payable to a trust, account should not be collected for credit to a trustee's account. t) All the endorsement should be regular, and no endorsement should be missing. Note: No charges are charged by the bank for this purpose.


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

Advances are the most important source of earning for the banks. MCB is also giving
Page 44

full attention towards this aspect and it is also obvious from the growing portfolio of advances and from very low delinquency rate. The credit portfolio of this institution is in a very much better shape than other financial institutions of Pakistan and the credit goes to the management and the staff who are concerned about the quantity and quality as well. 1) Loans 2) Cash Credits 3) Overdraft

1) LOANS: Loans are monetary assistance by a financial institution to a business, individual etc. The loans are granted by the bank in lump sum, so these types called fixed or demand loans. Interest is charged on the whole amount of a fixed loan. The borrower withdraws whole the amount of loan. This type of loan is normally granted against security of gold documents. In case of demand loans against gold or documents, a demand promissory note for the amount of loan is taken from the borrower loans are granted under;

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

B) LOAN AGAINST PLEDGED OF STOCK: In case of advancing such types of loans, the following precautions are dept in the
Page 45

mind: i) Stock pledged must be readily saleable ii) Products should be readily saleable iii) Advance should be within the borrows means

REQUIREMENT FOR LOAN: For granting loan to any party or individual, the bank checks following particulars of the client: 1) Credibility 2) Feasibility Report By Credibility, bank Judges the credibility of the client by his past bank record, CBI report etc. it is very important in making decision about giving him loan. Feasibility report is on the running or proposed business of the client. The report enables the bank to judge the likely return of the business.

2) CASH CREDIT Cinder such cash account is opened in the name of the customer who borrows from the bank. Customer is granted a loan up to a certain limit, sanctioned by the head office, from which he can draw when he requires and interest is charged on the amount actually utilized by the customer. In order to avoid the danger of idle fund, the bank charges a certain rate of interest, even if the customer does not withdraw any amount. The rate charged by the bank on cash credit in 46 paisa per thousand on daily basis. The credit is usually given against the securities of goods or merchandize as follows:

1. ADVANCES AGAINST PLEDGE STOCK IN TRADE OR PRODUCTS When a cash is granted against the pledge of stock or product, cash credit form is taken, from the certain products or stock, but the actual pledge is created when the stock or finished product are placed under the bank's lock or the document of title are duly endorsed to the bank by the borrower.

2. HYPOTHECATION OF STOCK ON FINISHED PRODUCTS: The difference between pledge and hypothecation is that under a pledge the
Page 46

borrower's goods are placed in the bank's possession under own lock, whereas, under a hypothecation, they remain in the possession of the borrower or guarantor and are merely charged to the bank under documents signed by them. Even though the documents empower the bank to take possession of the goods hypothecated, but it is possible that the borrower may actually resist any attempt.

3. MORTGAGES OF PROPERTY: Title deeds of immovable property are accepted by the bank only as collateral security or alternatively as unauthorized security.

MODES OF CREDIT FACILITIES There are two types of facilities

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

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

Page 47


1) Demand draft is a written order drawn by a branch of a bank upon the branch of same or any other bank to pay certain sum of money to or to the order of specified person 2) Demand draft is a negotiable instrument. 3) Legal provisions are same as that of cheque. 4) It is to be ensured that purchaser can at least sign. 5) Thumb expression is not accepted on DD 6) The following are the parties. a) purchaser b) issuing branch c) drawee branch d) payee A demand draft may be issued against the written request of the customer before issuing it must be seen that the demand draft is in order.

SCRUTINY OF APPLICATION The DD application must be scrutinized by the counter clerk in respect of following points. A There should be branch where payment is to be made. B full name of payer should be mentioned C amount in words and figures must be same D application to be signed by the purchaser

TELEGRAPHIC TRANSFER Transfer of funds from one branch to another branch of the same bank or upon other bank under special arrangements. Telegraphic transfer is not negotiable
Page 48

The funds are not payable to bearer Minor cannot avail this facility

PARTIES Following are the parties involved Applicant Drawing branch Drawee branch Beneficiary Full name of the beneficiary or account number should be mentioned in the application form. Instruction regarding mode of payment should be obtained. A record in the remittance outward register should be maintained. All the remittance must be controlled through number.

Transfer of funds from one branch to another branch of the same bank with in or out side the city is called mail transfer. Mail transfer is not negotiable The procedure is same as for DD All precautions must be observed

Pay order is meant for bank own payment but in practice they are also issued to customers. A pay order is written authorization for payment made in a receipt form issued and payable by the bank. To the person named and address. The following are the parties A purchaser B issuing branch
Page 49

C payee Charges must be recovered at prescribed rate. Pay order should be prepared like demand draft. A record of all issued and paid should be maintained. Credit voucher should be prepared

Technological advancements are also affecting the banking industry. The foreign banks have a competitive edge over all local banks in their technologies' advancements and automated systems. Local banks have also realized the gravity oil this situation and are striving to add computerized systems to their branches MCB is ahead of all other local banks in this field and now it is in a position to even compete with foreign banks. There are more than 1045 branches of MCB all over Pakistan and out of these more than 300 branches are fully computerized Almost all .the branches of big cities are computerized; therefore, the need for a technology department at each branch is growing. Now a day, a computer division is working in each city to provide service to ad the branches of that area. MCB has also introduced the now concept of online banking. There are now more than 250 branches linked through this system and they can transact with each other directly using computer systems at their own branches. Now customers do not have to wait long for their transactions and can operate their account through all the online branches.

ATM stands for Automatic Teller Machine. This machine is used to transact in one's account without intervention of humans. These machines are basically used for taking cash, confirming balances and requesting statements / cheque books. MCB has the largest ATM network in the country at the moment with almost one ATM at each online branch and also ATM terminals at International Airports. This network covers more than the 27 cities of Pakistan including the provincial capitals and large commercial cities of the country.
Page 50

ATMs are operated through a card issued to the valued customers and by application of Personal Identification Number (PIN number). A person can withdraw from any machine across Pakistan with having an account in only one branch of MCB. This was only possible with the help of online system. In this system all the machines are linked to central banking host at IRM division Karachi through either satellite or telephone controller. This system identifies the card holder and his PIN Number. Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard. This contract will enable an ATM card holder to use his account even when he is out of country at all the ATMs where Cirrus logo is displayed. Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/in a day. The annual fee for this card is Rs. 300/- only. Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day. These cards are issued to the persons having more than Rs. 500000/- as their average balance. International Cards are issued in collaboration with Cirrus and are useable all over the world with maximum withdrawal facility according to the standards of Cirrus.

Page 51

Internship Program
I had done my internship in MCB bank limited, G.T Road GUJRAT. Following is the brief introduction of the branch. Branch Code Address Contact Numbers 1297 Kutchery Chowk, GUJRAT 053-3524692

In the Muslim Commercial Bank Ltd. I really enjoyed working with the staff of Kutchery Chowk Gujrat (1297)and having a wish to be employee of MCB. It was almost impossible to work in all the departments within that limited time. But on my request, the staff of the branch provided me the opportunity to work in the different departments for the sake of practical knowledge. I feel highly indebted to work in this Branch on the request of the manager of that branch because I learnt a lot in that branch. During my internship training in the MCB as I early mentioned that I have worked in different departments & seats and learnt the followings


Muslim Commercial Bank Ltd. collects utility bills on behalf of WAPDA, Sui Gas Companies, and Pakistan Telecommunication Corporation Limited by putting the
Page 52

stamp on the utility bills Paid, Date of payment, Signature of the officer receiving the utility bills. After receiving utility bills a list is made on the form which is called Bills scroll form. One copy of the scroll is with the bank for evidence whereas the original copy with the receipt of the bills is sent to the billing department of the respective corporation. The bank charge commission on the bills.


During the span of mine internship in MCB I learned and observed a lot of about the opening of an account. Basically I think that the opening of an account is the establishment of a contractual relationship between the banker and the customer. By opening an account at a bank a person becomes a customer of a bank. Further I am going to express the basic requirements and steps involved in the opening of an account. HOW TO OPEN AN ACCOUNT (IN GENERAL) Before opening an account in MCB I observed that the following points must be considered in this regard. 1. Another account holder of the bank should properly introduce the new customer. 2. The account holder should sign the account opening form in the presence of bank officer and the signature is duly verified. 3. A copy of identity Card is required by Bank. 4. Against submission of the Banks prescribed application form, duly introduced in the manner provided and on supplying such document, as may be required and account may be opened. The Bank reserves to itself the right to refuse to open and account without assigning any reason. 5. Each account shall be allotted a distinct number that is to be quoted in all correspondence with the bank relation to the account. 6. Minimum amount to open an account is required regarding the nature of account.


Page 53

According to my practice in MCB, when a customer wants to open an account, the bank officer gives him an application form. All information, which is necessary to be known by the bank, are requirements of the application form. Form also requires the essential documents to be attached by the customer. Basically following information is required to open an account with MCB 1. Title of Account 2. Full Name of Applicant 3. Occupation 4. Address 5. Telephone No. 6. Currency of account 7. Nature of Business 8. Introducers Name, Address & Signatures 9. Special instruction regarding the account 10. Initial Amount of the Deposit 11. Signature of the applicant


During my internship training in the Muslim Commercial Bank Limited, I observed and found Cheques are received for the following purposes.

i) For Cash payments ii) For transfer(from one account to another account) iii) For Clearing


Cheques which are presented on Bank counter must be checked in the following way: 1) Date. 2) Signature of Drawer. 3) Signature of Payee. 4) Whether Bearer has cancelled.
Page 54

5) Whether Payee account duly is there. If condition 4&5 exist then check the signatures of Drawer. 6) Match the figure and wordily amount of cheque.

When all above matters are satisfied then come to the Token register and check: 1) Token number. 2) Cheque number. 3) Amount of cheque. 4) Particulars.

Two stamps are put on cheque. a) Cash Payment (on the face of cheque). b) Stamp for Token (on the back of cheque).

On stamp which is put for token their details are as follows: Token number. Time of giving token to client. Signature of token giver.

Note: Payment is also made when cheques of same branch account is presented for transfer to other account in same ranch along with cheque for payment.


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

a) Crossing Stamp (face). b) Transfer Stamp (face). c) Bank Manager Stamp (back). Only in MCB branches.
Page 55


There are two stamps put on each cheque, sent for clearing: a) Crossing Stamp. b) Manager Stamp.

CHEQUES IN COLLECTION: When cheques received in clearing are intra city then these are controlled under CC. First of all, these cheques are recorded in day book then allotted number and then serial number. Then a performa is prepared in which Bank on whom was drawn, cheque number, amount, beneficiary name are recorded. After completing that performa cheque is posted along with performa.


Following information is entered in clearing register. a) Name of favoring party. b) Name of bank on whom drawn. c) Branch. d) Cheque number. e) Amount. Clearing is sent after entering in register. In clearing register future date and day is putted. Cheques and vouchers are then separated and Cheques are sent for clearing. Clearing credit vouchers are entered on clearing sheet. Such credits are balanced by giving debits to cheques received in clearing from other branches. At the beginning of the day clearing return sheet is received. Vouchers are made if 1. Clearing received is more than clearing delivered then Credit voucher. 2. Clearing delivered is more than clearing received then Credit voucher. On the same day, credit vouchers sent for clearing are entered on the sheet's credit side. Cheques are sent to NIFT after taking them on calculator, their total amount along with total number of instruments. A summary is prepared and sealed after noting the
Page 56

number of seal in summary. Telephonic Transfer DD- Demand Draft PO- Payment Order For TT, the account of beneficiary must be there in branch. DD is also prepared and beneficiary can get payment. First of all, Performa is filled by purchasing party along with cheque or cash payment. When cheque is received it is first posted in computer section in order to check the balance of account. After posting the bank officer calculate tax if National Tax number is not there. i.e. Rs.100000 @0, 1% More than Rs.40000 @0.4% Commission and postage charges are also calculated. These are paid in cash or otherwise by cheque.

ISSUANCE OF CHEQUE BOOK During my period of internship in MCB i observed that when a account is opened then a cheque is issued to thecustomer for drawing his money at per rules. Following procedure is adopting for the issuance of cheque. When a customer opens an account with the bank, he is provided with cheque book for withdrawals from account. However, the first cheque book is given to the customer only when all the required documents are checked. A cheque book contains ten, twenty five, fifty or hundred leaves. The cheque book also carries a requisition slip for the issuance of the new cheque book. This slip is duly filled and singed by the customer. The signature of the customer is verified by the bank and new cheque book is issued to the customer and serial numbers of the cheque are duly entered in the book of the bank. Along with the signature, person should also write his full name & address. Usually only one cheque book is issued at a time, however big concerns who need a number of cheque books at a time, may ask the bank to stock as number of cheque books in their name and to point their name on these cheque books. Bank debits the clients account for excise duty of Rs.2.50/- per cheque and keeps the cheque book ready for the customer, as on his advice.
Page 57

The officer keeps and maintains the cheque book register Cheque book inventory and cheque books issued are recorded in this register. The account number for which the cheque book is issued and the number of leaves are also recorded in this register when the cheque book issued an entry is passed in the cheque book issue register.

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

Learning summary:
I did my internship at MCB Kutchery road Branch, one of the leading banks of Pakistan. The bank has completed more than 18 years, since its privatization and during this period, MCB has performed well and has sustained growth. It was a great experience for me to work with such a well-known and reputed bank. The internship proves very valuable for me as it not only enhances my skills and qualifications but also gives me experience and brings clarity in my future plans. I gained a number of skills that will be beneficial for me in my future career some of these are
Page 58

Enhanced my confidence level Strengthen my interpersonal and communication skills Developed work ethics in me Helped to improve team work and leadership skills It gave me a lot of confidence and manners to behave in the working environment Improved time management skills and made me punctual It helps me to understand how to behave in different situations professionally It made me think critically in difficult situations and act accordingly Improved my decision making capability After doing internship I acquired good work habits It provided in depth knowledge of the formal functions of the banking sector.

Internship provides opportunities to experiment and purse careers that match academic and personal interest. Planning about the career is always difficult as there are many doubts regarding different possible opportunities and it is really difficult for the students to select the best possible place for their future job because they do not have enough knowledge about different work settings, they do not have the experience that can provide help to them in attaining the best possible job alternative. I am always interested to get a job in banking sector but there were some doubts in my mind about the banking environment, bank timings etc. but after internship all doubts are vanished. I have personally experienced the banking environment and concluded that it is very good and safe for females. Six weeks internship program helped me to critically analyze the banking sector as a whole and I can openly say that banking sector provides conducive environment for career growth.

It is evident from this report and the financial statements of MCB that it is making
Page 59

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

The strengths of MCB are as: MCB is the first Pakistani privatized bank and because of its quality management, marketing, innovation in products and services is performing well in financial market. Has established a good reputation in the banking market Strict adherence with the banking procedures requirements, SBPs prudential regulation requirements and its SROs and international banking requirement as well as to its own set policies Strong and its attractive products Better focus on customer services and customization Flexibility with the changing environment Induction of the highly qualified professionals to change overall set up


Page 60

The noted weaknesses of MCB are as: The majority of people are not well aware about the products of MCB. Therefore it should advertise extensively especially RTC and Master Cards. A behavior has been noted that bank tries to feel at ease with good looking, rich and educated people and the poor looking customers feel some bit strange in the environment of the bank. The bank employees should try to accommodate behaviorally all type of customers. In MCB there is lack of specialized skill because of job rotation policy of human resource department. The bank should concentrate upon increasing its abilities on individual service basis. Mismanagement of time is another big mistake in MCB branches, the bank official time of closing is 5:30pm but due mismanaging of time allocation and work the staff is normally on their seats till 7:00 or 8:00 clock. Process of development is bit slow due to its conservative approach Never prefer to be a leader and prefer to be a follower of others Slow improvement and acceptance of technological changes More emphasis on deposit accumulation and less on their mobilization

Greater potential and opportunities for Credit Division if Liberal Policies being adopted. Can grab more market share for its RTCs, remittances and forex department through effective promotional and liberal policies. Inclusion of highly qualified professional can change the whole scenario and position of the bank if they have given the due liberty in performing their duties. Adoption of information technology will improve the customer services. More mobilization of accumulated deposit is possible through innovative financing to Agro Based Sector Leasing Personalized Financing

Page 61

Change in government policies has affected the banking business. Still banks have to wait to get permission of state bank. The freezing of foreign currency accounts is a vital example of letting people not to trust on banks. The Competition has become severe by the entrants of so many banks, So to exist one will have to prove himself in its services through excellent management and will have to satisfy its shareholders. Otherwise he will be out the market. Employees unions have been allowed if not managed properly can affect performance. The decrease purchasing power of consumer in the current economic situation of the country affecting the business activity speed too much and the result is the low investment from the investors in new projects can create problem for the bank because it is working a lot in trade. Introduction of credit marketing by local and foreign banks is badly affecting the mobilization of the MCBs deposits due to the non presence of such department in it. Introduction and adoption of information technology as well as promotion of the computer culture by the local as well as foreign banks will definitely affect the services and business of the MCB.

Page 62

Page 63

From the Quantum of the profit and its financial data it can be easily judged that after privatization, MUSLIM COMMERCIAL BANK is performing well. Its deposits are growing day by day and so its profitability. The controlling body is responsible for the productive performance of the Bank. Following are my observation and suggestion to improve the efficiency for the development of the economy. A big portion of the home remittance is sent by Pakistan working capital through Muslim Commercial Bank Limited. As we know a big portion of this amount is wasted purchasing of luxuries. The people motivated to save money by offering the deposit through various investment schemes. The rate of profit should increase 1% or 2% than other banks and it would be profitable step for bank. There is a criticism on the banking management that the salaries of the employees are decreasing in every succeeding year. And I think this will shake the confidence and working habit of the employees. There is another recommendation about the bank that there is no proper timing of the bank and there is made an unnecessary delay in the banking transactions, which might not be a good sign for the bank from future prosperity point of view. Staff turnover particularly of trained staff result in financial and other losses. The amount spent by the bank on employment, induction and training of outgoing officers constitutes to beat till another officer should ready prove this work. The exodus of bank officer in the past has worsened the situation. Most of the bank employees, are sticking to one seat only with the result that they become master of one particular job and loose their grip on other banking operation. In my opinion all the employees should have regular job experience all out-look towards banking. The promotion policy should be adjusted. Refresher Courses for the staff are most important in any international organization. Alt the employees should have these courses according to their requirement. Foreign experts can also be called for this purpose. Every year some of the employees should be sent for training to other countries and
Page 64

employees from other branches should be brought here. Some more reading material should be provided. The purpose should be to educate the employees with the advance studies in their field. The employee should be provided the opportunities to attend and participate in seminars and lectures on banking. Bank should give some more incentive to its employees in order to remove the conflict between lower and higher officers and should try to improve the working condition of the bank. As such system should be designed that every employee who has some problems with his officers can communicate it to the higher management and some steps must be taken to improve that. Recruitments should be strictly on merit basis and induction should be after proper and extensive training. Old and lazy staff should be replaced by young, qualified and energetic staff. Foreign branches should be opened in order to capture the international market and to earn international repute for the bank. Working environment, equipment, furniture and staff dressing should be according to the modern banking style. Proper attention should be paid to upgrade customer services. Bank should adopt the global organizational banking structure to meet the international standards of banking sector

Page 65

http://www.oppapers.com/essays/Pakistans-Banking-Sector-Industry Analysis/181995 http://en.wikipedia.org/wiki/Economy_of_Pakistan http://en.wikipedia.org/wiki/Muslim_Commercial_Bank http://www.blurtit.com/q501915.html MCB Brochures Manuals Annual Report2005 http://www.ccsenet.org/journal/index.php/ijbm/article/view/1179/1127 http://www.mcb.com.pk/psc/online_services/pay_bills.asp Annual Report2008 http://www.mcb.com.pk/psc/loans/easy_personal_loan.asp\ http://www.mcb.com.pk/psc/cards/mcb_visa.asp

Page 66