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DEDICATION
Dedicated to my Loving parents, My brothers & sisters, My respected and venerable teachers, My friends, & All to all those who are praying for my success

INTERNSHIP REPORT

TABLE OF CONTENTS
ACKNOWLEDGEMENT EXECUTIVE SUMMARY OUR VISION & MISSION
VISION STATEMENT MISSION STATEMENT

5 6 6
6 7

HISTORY OF BANKING
EVOLUTION OF BANKING EARLY GROWTH DEVELOPMENT OF MODERN BANKING BANKING IN PAKISTAN

8
8 8 9 10

MCB BANK LIMITED

BRIEF HISTORY OF MCB: ABOUT MCB OUR VALUES CORPORATE PROFILE MCB

13
13 13 15 16 19 21 23 23 23

BOARD OF DIRECTORS...................................................................................................................16
HIERARCHY OF

MCBS AWARDS AND ACHIEVEMENTS STRUCTURE OF MCB AYUB MEDICAL COMPLEX BRANCH ABBOTTABAD.

OVERALL PERFORMANCE OF MCB IN 2010

24

RESERVE FUND/EQUITY.................................................................................................................24 DEPOSITS.....................................................................................................................................24 ADVANCES...................................................................................................................................24 INVESTMENTS...............................................................................................................................24 YEAR 2010 COMPLIANCE...............................................................................................................25 MCBS DEPARTMENT
ACCOUNTS

27
27

DEPARTMENT

CURRENT DEPARTMENT

28

PROFIT & LOSS SHARING (PLS) ACCOUNT......................................................................32 SAVING 365 ACCOUNTS.......................................................................................................33

REMITANCES

DEPARTMENT

36 40

DEMAND DRAFTS (DD).................................................................................................................37

CASH DEPARTMENT

CASH PAID SHEET........................................................................................................................40 CASH RECEIVED...........................................................................................................................41

ADVANCES DEPARTMENT 43

PREPARATION OF CREDIT PROPOSAL..............................................................................43 ADVANCES TYPES................................................................................................................44 COMMERCIAL ADVANCES..................................................................................................44

CLEARING DEPARTMENT 47

ADVANCE CLEARING.....................................................................................................................49

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C) CHEQUE COLLECTION................................................................................................................50 REASONS FOR CHEQUE RETURNED UNPAID IN CROSS CHEQUES...............................................................52 REPORT OF LOST OR STOLEN CHEQUE ...............................................................................................53 GREEN SHEET..............................................................................................................................53
RTC DEPARTMENT 53

IMPORTANT FEATURES....................................................................................................................53 AS GOOD AS CASH.........................................................................................................................53 DENOMINATIONS ..........................................................................................................................54 EASILY ENCASHED........................................................................................................................54 EASILY REFUNDABLE......................................................................................................................54 EXCLUSIVE SECURITY FEATURES......................................................................................................54 VALID UNTIL USED .....................................................................................................................54 TELEVERIFICATION SYSTEM ..........................................................................................................54
PROCEDURE 54 56 SWOT ANALYSIS

LEARNING AS INTERNEE
DUTIES & ACCOMPLISHMENTS

61
61

CONCLUSION RECOMMENDATIONS APPENDIX

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PREFACE
This question always seems to be arising in the minds of the students when they are to join some organization in order to comply with the compulsory requirement of Internship Experience of at least six weeks. Every student either verbally or non-verbally seems to be saying: What is the need of this break in our smooth sailing educational life. After all Why???....................... But they come to know the purpose once they join in some organization to have a taste of actual life. Student life is a period of preparation for the upcoming future. In this period one is expected to make all round developments-mental, moral, and physical. Life is a struggle and a kind of battle. This internship programme is to prepare us for this battle. Just as a soldier is not sent to the fort without proper training, in the same way, a student is not fit to enter the battle of life without an adequate training for ita training of head and heart. The true aim of the Internship Programme is to stuff the brain with all sort of facts and formulae, or to familiarize the mind with infinite things never handled, the places never saw, or the statements of facts never tried to understand. During this six weeks long practical glimpse, the theories and ideals which we received from the books have been woven in the texture of our actual life. No doubt, it has helped us in cultivating the qualities of courage, hope, initiative, and the capacity to turn our knowledge to practical purposes. It has worked towards the development of all the factors of our life, character and personality, so that at the end of our educational career, we may turn out as useful citizen, inspired leaders and successful business executives of the country.

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ACKNOWLEDGEMENT

I am very thankful to Almighty Allah the most merciful and beneficent who makes me able to complete my internship successfully. I am also grateful to the department of administrative Sciences of Govt college of management sciences Atd who gave us an opportunity of internship to enhance our capabilities. This internship programmed is very much helpful for me because, I have learnt a lot by applying theoretical knowledge in practical field. I would also show my gratitude to the co coordinator of Department of Administrative Sciences Mr. shahid mehmood I am also grateful to all the employees of MCB Bank who guide me during the course of internship. The behavior of all the department supervisors is very good to me because they gave me a lot of time to guide me the mechanism of all departments in which I worked. I am also thankful specially to branch manager Mr.Amjad and operation manager Mr.Naik Muhammad for sharing their experiences with me.

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EXECUTIVE SUMMARY

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion and total assets of around Rs.300 billion. Incorporated in 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate executives. In 1974, MCB was nationalized along with all other private sector banks. The Bank has a customer base of approximately 4 million and a nationwide distribution network of 1,026 branches, including 8 Islamic banking branches, and over 300 ATMs, in a market with a population of 60 million. During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base. 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 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 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

OUR VISION & MISSION

VISION STATEMENT

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

MISSION STATEMENT
We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.

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HISTORY OF BANKING
Evolution of Banking
It has not so far been decided as to how the word Bank originated. The explanation of this origin is attributed to the fact that the jews in Lombardy transacted the business of money exchange on banches in the market place and when the business failed, the people destroyed the Bank. Incidentally, the word bankrupt is said to have been evolved from this practice. The opponents of this opinion argue that it was so, then how is that the Italian moneychangers were never called Banchierei in the Middle Ages? Other authorities hold the opinion that the word Bank is derived from the German word back which means joined stock fund. Then Back was Italianize into Bank.

Early Growth
Banking in fact is as primitive as human society for eversince man came to realise the importance of money as a medium of exchange. Perhaps it was the Babylonians who developed banking system as early as 2000 B.C. It is evident that the Temples of Babylon were used as Banks because of the prevalent respect and confidence in the clergy. King Hamurabi ( 1728 1686 B.C ), the founder of the Babylonian empire, drew up accede where in he laid down standard rules of procedure for banking operations by temples and great landlords. He got his code inscribed on the block of diorite about 8 feet tall, containing about 150 paragraphs which deals with nearly all aspects of loans, interest, pledges, guarantees, natural accidents, loss, theft etc. Later on Sumerians, Babylonians, Hitties and Assyrians standardised the values of the goods in silver, copper and bronze.

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It is not certain as to whom invented money but history recess that king of Lydia castled electrum ingots of identical shapes and of uniform weights with a triple emblem engraved on it as an official guarantee of value in 687 B.C. In 1401 a German public bank was framed comprising the operations of discounting and transferring of money. By the 16th century, some more public banks were formed in Venice, Milan, Amsterdam, Hamburg and Nuremburg. In order to streamline Banking organisations and techniques, conferences were held in Nuremburg from 1548 to 1551 and it was agreed that the commercial interest of the time needed a bank with facilities of growth and transfer but it should not be a bank run by private individuals. Ultimately in 1587, a State Bank under the name of banco DI rialto was formed in Genoa. Later the bank of Amsterdam was also formed in 1609. This Bank had a guarantee by the State and rendered valuable services to the Netherlands traders upto the year 1795. Similarly in 1690, the Bank of Hamburg came into existence in Hamburg with the business of accepting deposits of fine silver or of foreign money and to run accounts on these deposits. This Bank rendered great service to the merchants as well as countries it dealt with until 1873, when it was merged with the Reich bank. By the year 1700, the bank of England was not only issuing notes but also conducting accounts for customers. Its directors were conducting the business like that of limited companies. The bank had the monopoly of issuing banking notes. Upto 1813 or there about in England, the main profit of bank was derived from the circulation of notes.

Development of Modern Banking

In 1918 came into being eleven clearing banks of today. The effect of this historical development of banking in England has been fairly wide. First, emergence of a small number of large banks with wide network of branches.

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Second, increase in the popularity of bank accounts and a large-scale use of cheques. In 1946, the labour government nationalised the bank of England and transferred the existing stock to the nominee of British treasury. In 1955, the British Banks made a departure from traditional banking by undertaking hire-purchase finance for companies buying industrial plants and machinery and took interest on hire-purchase finance.

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

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1) State Bank of Pakistan. 2) Commercial Bank of Pakistan. 3) Saving banks. 4) Co-operative banks 5) Specialised credit institutions.

Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all over the country and in some foreign countries through a network of branches. banks:
1) National Bank of Pakistan 2) Muslim commercial bank limited 3) Habib Bank Limited 4) United Bank Limited 5) Allied Bank of Pakistan

All these commercial banks were nationalised in

January 1, 1974, and were recognised and merged into the following five

The state bank of Pakistan is the Central bank of the country and was established on July 1, 1948.The separation of East Pakistan and its repercussion in the form of economic depression has caused a lot of difficulties to the banking system in Pakistan. The network of bank branches now covers a very large segment of national economy. The numbers of branches have increased appreciably and there is now on branch of bank for every 3000 heads of population approximately. There is done reasonable growth in deposits from the establishment of Pakistan. Besides this growth, specialised credit and financial institutions have also developed over the years. The Government of Pakistan in the late 90s introducing the need for the privatisation of state owned banks and companies. The private sector has

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accepted the challenge and most of the banks are privatised today. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit.

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MCB BANK LIMITED

BRIEF HISTORY OF MCB:
MCB Bank limited formally known as Muslim Commercial Bank (MCB) unfolds 52 years of growth. MCB is not an overnight success story. The bank started corporate life in Calcutta on July 9, 1947. After the partition of the Indo-Pak Subcontinent, the bank moved to Dhaka from where it commenced business in August 1948. In 1956, the Bank transferred its Registered office to Karachi, where the Head Office is presently located. Thus, the bank inherits a 52-year legacy of trust in its customers and the citizens of Pakistan. Nationalization In January 1974, the Government of Pakistan nationalized MCB following the banks (Nationalization) Act 1947, Premier Bank Limited merged with MCB.

PRIVATIZATION
A wave of economic reforms swept Pakistan in the late 1990, introducing the need for privatization of state owned banks companies. In April 1991, MCB became Pakistans first privatized bank. The government of Pakistan transferred the management of the Bank to National Group, a group of leading industrialists of the country by selling 26% shares of the bank. In terms of agreement between the Government of Pakistan and the National Group, the group, making their holding 50% has purchased additional 24% shares. Now, 25% is purchased by the Government, which shall be sold in the near future.

ABOUT MCB

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MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion and total assets of around Rs.300 billion. Incorporated in 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate executives. In 1974, MCB was nationalized along with all other private sector banks. The Bank has a customer base of approximately 4 million and a nationwide distribution network of 1,026 branches, including 8 Islamic banking branches, and over 300 ATMs, in a market with a population of 60 million. During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base.

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OUR VALUES
TRUST

We are the trustees of public funds and serve with integrity & commitment. Ethical behavior is of critical importance to us. We adopt full compliance with internal and external policies and procedures, operating within the legal framework

CUSTOMER FOCUS

We continuously seek to exceed our customers expectations, forging and maintaining long term relationships

INNOVATION

We strive to be the market leaders in innovative products and services offering customized financial solutions with flawless execution

TEAMWORK

The diversity of our people is our strength. We inspire and challenge each other working together to achieve synergy

ACHIEVEMENT

Our people are our most valuable asset. We are committed to a result oriented culture. Our goals are clear and merit is the only criterion for reward

SOCIAL RESPONSIBILITY

As responsible citizens we contribute to the social welfare of the community

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we live in

CORPORATE PROFILE
BOARD OF DIRECTORS
The board of directors has the authority in guiding Bank affairs and in making general policies. Some directors are the personnel of the MCB Bank and others are successful businessperson and executives of other major organization. Ten members are included in board of directors, see in a list.
Mian Mohammad Mansha Chairman Mr. S. M. Muneer Mr. Tariq Rafi Mr. Shahzad Saleem Mr. Sarmad Amin Dr. Muhammad Yaqub Mian Raza Mansha Dato' Mohammed Hussein Mr. Aftab Ahmad Khan Mr. Abdul Farid Bin Alias Mian Umer Mansha Mr. Muhammad Ali Zeb Mr. Atif Bajwa Vice Chairman Member Member Member Member Member Member Member Member Member Member President / CEO

AUDIT COMMITTEE

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HUMAN RESOURCES COMMITTEE

Mian Mohammad Mansha Dr. Muhammad Yaqub Mian Raza Mansha Mr. Shahzad Saleemn Mr. Atif Bajwa

Chairman Member Member Member Member

RISK MANAGEMENT & PORTFOLIO REVIEW COMMITTEE

Mr. Shahzad Saleem Mr. Tariq Rafi Mr. Sarmad Amin Mian Raza Mansha Mian Umer Mansha

Chairman Member Member Member Member

COMMITTEE ON PHYSICAL PLANNING, IT SYSTEM & CONTINGENCY ARRANGEMENTS:

Mr. Sarmad Amin Mr. S. M. Muneer Mr. Tariq Rafi Mian Raza Mansha Mr. Abdul Farid Bin Alias Mr. Atif Bajwa
Chairman Member Member Member Member Member

BUSINESS STRATEGY & DEVELOPMENT COMMITTEE

Mian Mohammad Mansha Mr. S. M. Muneer Mr. Shahzad Saleem Chairman Member Member

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Mian Raza Mansha Dr. Muhammad Yaqub Dato' Mohammad Hussein Mian Umer Mansha Mr. Atif Bajwa

Member Member Member Member Member

CHIEF FINANCIAL OFFICER

Mr. Ali Munir

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HIERARCHY OF

MCB
PRESIDENT AND CEO

EXECUTIVE DIRECTOR

EXECUTIVE DIRECTOR

INT DIV

SAMG & FRAUD FORGERY

INSPECTION

OPERATION

GSD

CONSUMER BANKING GROUP

CORPORATE BANKING GROUP

HRD

(continued)

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CONSUMER BANKING GROUP

CORPORATE BANKING GROUP

GENERAL MANAGER

REGIONAL MANAGER CHIEF MANAGER MANAGER

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MCBS AWARDS AND ACHIEVEMENTS

Best Bank In Asia Award 2008
MCB has been awarded as a Euromoney Award 2008 for the " Best Bank in Asia".

Best Bank In Pakistan Award 2006

MCB has yet again received the esteemed Euromoney Award for the Best Bank in Pakistan. It is the only bank to receive the Euromoney Award for Excellence for the sixth time in the past seven years.

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 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".

MCB TOWER
A Vision of the Future
The modern, urbane architecture and intelligent design of MCB Tower reflect MCBs pioneering role in the banking arena, providing cutting edge, innovative banking solution- leading with an edge of technology.

Setting Ever-Higher Standards

Towering at 116 meters, with 29 levels and 3 basements, MCB tower is the tallest building in Pakistan. It is a sound representation of MCBs leadership position in the banking sector, testified by four best bank in Pakistan Euro money Awards in five years.

Strong Foundation

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MCB tower is a manifestation of MCBs strong foundation with over 50 years of banking excellence and represents our commitment to always stay a step ahead.

Understanding At all levels

From individual customers to corporate and commercial clients, MCBs flexible solutions reach out to a diversified audience -reflected in all levels of MCB tower

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Structure of MCB Ayub medical complex branch Abbottabad.

r a n c h

a n a g e r

A s s is t a n t M a n a g e r A O C M G c c o u n t a n t ffic e r s a s h ie r e s s e n g e r u a r d

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Overall performance Of MCB in 2010

Net Profit

Profit after taxation in 2006 was Rs. 399.2 million, an increase of 67% from Rs. 238.8 million in 1994. Since a complete provision for non-performing assets has been made, the balance of the bank now reflects its true strength. For the first time after MCBs privatization in 1991, a dividend of 15% was declared. It gives me great pleasure to state that for the year 2010 it has been decided to announce an increased dividend of 24.39Rs.

Reserve Fund/Equity
A sum of Rs. 90.8 million has been transferred to Statutory Reserve this year, raising the total Reserves to Rs. 1,796.6 million at the end of 2006, from Rs. 2,416.8 million as last year.

Deposits
Deposits with the Bank at the end of year 2010 stood at Rs. 292,088 billion as compared to Rs. 292,088 billion in 2007.

Advances
Total Advances at the end of 2010 were Rs. 262,508
billion as compared to Rs 218,959

billion in 2007 showing a increase of 2.3%.

Investments
Investments y declined by 0.9%. The current policy of the management is to dispose off Investment in shares of listed and unlisted companies at the best possible prices.in 2010 it is 97,790 Rs. Billion and in 2007 it was 115,358billion due to financial crunch in

the whole world.

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FOREIGN TRADE

The bank conducted Import business during the year amounting to Rs. 60.0 billion as compared to Rs. 56.4 billion in 2007.. Home remittances increased to Rs. 16.7 billion from 30.6 billion. The increase in home remittances business was due to better working polices, which has effected the confidence of the Pakistanis working overseas.
RUPEE TRAVELLERS CHEQUES

Muslim Commercial Bank who are pioneers of Rupee Travellers Cheque in Pakistan maintained their leadership position and sales recovered during the year 2010 were Rs275 billion an increase of 57% over the previous year.
HUMAN RESOURCES

To induct fresh blood in the bank and cater for future needs, a new batch of management trainees was selected strictly on merit. After thorough training these offices have been inducted in various divisions and branches. Attention was paid to upgrade operational and managerial skills of staff and a number of professional courses were conducted at MCB Staff and Training Institutes during the year. We have continued our programme of hiring of some senior level Banking Executives from the market, wherever necessary.

Year 2010 Compliance

The management and the staff of relevant divisions are fully aware about the Millenium issues. All the core computer systems operating in MCB are in full compliance. All the necessary steps had been taken and MCB was very much aware about the Y2K bug.
FOREIGN OPERATIONS

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Our banks foreign operations in Bangladesh and Sri Lanka continue to remain profitable. In April 1999, the bank opened its third branch in Sri Lanka at Maradana a suburb of Colombo. Our country is passing through a critical phase of its history. Pakistans economy continues to remain under pressure as it adjusts to new economic challenges and realities. The performance of the economy directly influences the performance of the financial sector. MCB is cognizance of its role in the national economy, and will continue to play its role as a lead bank.

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MCBS DEPARTMENT
GENERAL BANKING
It is backbone of banking It is one of the major department of MCB. It consist of following departments: 1. Accounts Department 2. Current Department 3. Remittance Department 4. Clearing Department 5. Cash Department

ACCOUNTS

DEPARTMENT

Every transaction which takes place recorded in the computer so all transactions in different departments are forwarded to account department. Since all vouchers from different departments are forwarded to current department so this department tallies all such transactions with current department after maintaining the ledger of each department. Following are different functions performed by this department: Preparation of Financial Statements for different time span Maintain all accounts of different departments Calculation of profit on different schemes Calculation of markup on different advances Preparation Different types of reports for State Bank Daily position of cash & every accounts Matching daily summaries of all departments with ledger

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CURRENT DEPARTMENT
This department maintains all formalities of the accounts and account holders like it account name, account holders name, code number and full address. Different cheques debit and credit voucher come form different departments like Token, Clearing, Remittances, Cash, Foreign Exchange, Advances and posted against different accounts. A working Journal called Manual is prepared daily which shown the balance accounts of all parties. Mark-up and profit are calculated daily. That would be debited at credited from or to account holders account after specific period of time. Markup is debit from the account after every three month profit is credited to accounts after every six month. New accounts are also opened in this department. The fund deposited in the MCB bank can be classified under the main heads: 1) CURRENT ACCOUNT 2) SAVING ACCOUNT 3) TERM /CALL DEPOSITS

ACCOUNT OPENING

To open an account the customer have to meet the general banking manager with an introducer (the person who is going go introduce that person in the bank) and get an application form used for account opening. Different color-coded application forms are available for each type of account. Along with the form a card for specimen signature is also supplied to customer. Manager has every right not to accept this contract if he is not satisfied by the details provided by the customer. In case the contract is acceptable to both, now it is ready to open the account formally.

PROCEDURE

The procedure begins with the punching of account opening form to the customer file i.e. customers master file. The manager records the necessary details into this register and allots an a/c number from this a/c opening register. This register is maintained for each type of account and the a/c nos are allotted serially. After opening a saving and current account every applicants data is entered into the computer to maintain a safe record and application form is properly filled so that it can be available when necessary. Checking officer is responsible to Tele the manual application form with the computerized a/c opening file. For fixed deposit only that application form is needed which is prepared manually, because most of the procedure of fixed deposit is done manually. The signature specimen card contains three signatures of an applicant, applicant a/c no, a/c type, branch code, title of a/c, it will be attached with an application form. Banker uses this card at the time when he

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receives the cherub; he compares customers signature with the signature on the cherub for avoiding fraud.

ACCOUNTS TYPES

Though in theory there many types of accounts but commonly account operators can be classified in one of the following categories, each have different documentation requirements: Single Joint Partnership Private Limited Public Limited

1) SINGLE Only one person can operate this a/c. An individual who can fulfill the requirement of bank can open this a/c. We can call it a personnel or individual a/c. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Letter of Kinship etc.

2) JOINT
In case of joint a/c applicant mentions that how much person will operate the a/c. Instruction are given for joint a/c such that the account shall be operated by anyone or more. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Letter Kinship, Additional Signature Form (For Joint Account), Declaration regarding the operator of account.

3) PARTNERSHIP
For partnership a/c, along with the application form other requirements needs satisfied. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Registration certificate, agreement among partners and Commencement of business and private registration, resolution of board of directors, commencement of business, memorandum and articles of association and balance sheet etc.

4) PRIVATE LIMITED
Such type of account is opened in the name of the businesses having private limited concern and mostly medium business enterprises open such kind of accounts. All the board of directors have to submit the declaration regarding the account operator on the

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company pad and with the rubber stamp with the signature of the all the members of the board of directors. In case of any change in directors bank must be informed regarding that. In case funds are borrowed by the company all the directors approval is necessary rather not only the authorized partner who can be the operator of the account.

5) PUBLIC LIMITED
Public Limited A/C type of account is opened in the name of the businesses having Public limited concern and mostly medium business enterprises open such kind of accounts. All the board of directors have to submit the declaration regarding the account operator on the company pad and with the rubber stamp with the signature of the all the members of the board of directors. In case of any change in directors bank must be informed regarding that. In case funds are borrowed by the company all the directors approval is necessary rather not only the authorized partner who can be the operator of the account.

ACCOUNT CLOSING

There are no. of reasons of closing an account can be one of the following if customer desire to close his account, in case of death of one account holder, bankruptcy of the account holder and If an account contain nil balance or not up to the requirement of rules. Before closing any account, bank send letter to the account hold for informing him that his account is going to be closed. There is need an approval form higher authority to close any account.

1) CURRENT ACCOUNTS
Current deposits are those which are payable to bank whenever demanded by the customer. Bank does not pay any profit on current deposits. There are of different scheme of saving deposits, which are classified under different duration purpose and rate of interest. Fixed deposits are those deposits which are by the bank under the conditions that they will not be payable on demand but will be payable under fixed or determinable future time date.

FEATURES

A sum of Rs. 500/= in cash as initial deposit is required for opening a current account and the same may be maintained as minimum average running credit balance. No profit will be paid on credit balances held in current accounts. The bank reserves the right to allow opening of current a/c at its description. All deposits and withdrawal from a current a/c will take place only at the branch where the account is being maintained. Current a/c cannot be overdrawn, except by prior agreed agreements with the bank. The correspondence relating to current A/Cs should be addressed to manager of the branch where the account is being maintained. A distinctive number will be allotted to each current account and shall be quoted on all correspondence relating to the respective account and at the time of making deposits and withdraws.

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The account holder can draw sums from his account by means of cheque supplied to him by the bank for that particular account. Account holder should take well care of the chequebooks issued to them. The account holder will pay excise duty of Rs.4 per leaf to the government.

PAYIN SLIP

This slip is used for depositing the additional amount. The bank will accept the Pakistanis notes. All cheques and other instruments should be crossed before they are deposited for credit into the account. There shall be no restriction on number of withdrawals in current account. The account holder is expected to maintain a minimum running credit balance of Rs.500/. An account holder wishing to close his account must surrender the unused cheques to the bank. The current account is computerized, thus it generate the statement of account for all account holders periodically. Incidental charges are beard by the account holder if its credit balance is less than Rs.500/. Service charges of RS. 20/= will be taken by the bank, if an account is closed within 6 months from the date of its opening.

FINANCIAL PRODUCTS

2) SAVING ACCOUNT
Saving accounts are opened on proper introduction with sums of credit balance within certain limit for individual (single, joint) institutions, companies, educational institutions etc. MCB has introduced various schemes under saving a/c are following:
Mala Maal Scheme PLS Account Saving 365 Account Capital growth certificate scheme Fund Management Scheme Khanm Bachat Scheme Khushali Bachat Account Term/ Fixed Deposits

MAAL-A-MAAL SCHEME

This scheme is recently launched by the MCB after severe financial crisis of year 1998 created as result of atomic bomb explosion, to mobilize the deposits. It is the most profitable scheme of the bank and MCB has got Rs. 20 billion deposits through this scheme and the certificate is for Rs. 25000/-

PROCEDURE

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The procedure of Maal-a-Maal certificate is very simple. The applicant has to fill the slip of certificate where he have to write Branch code, Applicants name, ID Card Number, Address, Phone #, Date and tenure etc. For different tenure different profit percentages are declared as show below:

Tenure (Months) Two Four Eight Twelve

Rate of Return (%) 06 07 08 10

These certificates are automatically renewable after maturity. Copy of ID card is attached with certificate. Profit is calculated at the time of drawing. At register, the officer writes reference or serial #, name of applicant, certificate #, date of issue and date of maturity. At Maal-a-Maal certificate, the officer write date of issue, maturity date, reference #, and name of the applicant.

PROFIT & LOSS SHARING (PLS) ACCOUNT

This account was started in 1980s after the issuing of banking ordinance in 1980 by Zia Government to develop Islamic banking in Pakistan. In this case customer would be responsible for bearing profit as well as loss. The bank would be within its rights to make investment of credit balances in the PLS saving accounts in any manner at its sole discretion and to make use of the fund to the best of its judgment in the banking business under the PLS system. For withdrawal of larger amount, 7 days notice in writing is required to be given: Minimum balance is Rs.500/= Below minimum balance charges will be debited Not more than eight withdrawals in a year allowed More than Rs.15000/= are not allowed to draw Seven day notice is required for withdrawal Profit calculated on monthly basis Profit paid on annually basis Profit paid on lowest balance at the end 10% Withholding Tax on minimum balance Zakat deducted on @ 2.5%

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SAVING 365 ACCOUNTS

This account is newly developed of MCB and it provides flexibility of saving account to business people. Profit on deposits will be payable on daily product basis on balance of RS. 500,000/- and above. However, if balance in the account falls below RS. 500,000/- on any day, the product will be ignored. There will be no restriction on withdrawal from the account. Zakat and withholding Tax is also applicable on the account opened under this scheme. Minimum balance is Rs.500,000/= Below minimum balance, profit calculation ignored Profit calculated on daily basis Profit paid on annually basis 10% Withholding Tax on minimum balance Zakat deducted on @ 2.5%

CAPITAL GROWTH CERTIFICATE SCHEME

Long term deposit Profit rate as that of PLS Saving Account Minimum amount of deposit is Rs. 10,000/= Amount deposited double in of 5 years No maximum limit of Deposits 10% Withholding Tax on minimum balance Zakat deducted on @ 2.5% Rate of return upto 15% per annum Offered to corporate and business community Development of secondary market for Government Securities 10% Withholding Tax on minimum balance No maximum limit of deposits Zakat deducted on @ 2.5%

FUND MANAGEMENT SCHEME

KHUSHALI BACHAT ACCOUNT

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Saving type account Rate of return is 8% per annum Profit calculated on daily basis Profit paid on half yearly basis Utility bills can be debited through this a/c No charges will be debited for utility payments Designed to support small savings of people Depositing money for 10 years No return until 10 year Payments are made on monthly basis No limit for monthly payments After 10 year return will be on fixed rates

KHANUM BACHAT SCHEME

TERM DEPOSITS

Term deposits are fixation of certain amount of money for a specific span of time. These can be of majorly two types i.e. short term notice deposits and long term notice deposits. Different rates are charged for different period of times like as shown by following table. If presented before maturity then previous period rate would be charged.
Duration 01 month 02 month 03 month 06 month 01 year 02 year 03 year 05 year Rate Of Interest 08.1% 10.1% 11.0% 11.5% 12.5% 13.3% 14.5% 16.4%

The instrument term deposit is like a slip containing issuing bank name, a/c # to operate on computer, deal #, customer name, reference #, date of issue, amount, rate maturity date etc.

CALL DEPOSITS

These call deposits are presented in the bidding process as guarantee or security from the bank that this much money is deposited in the bank. These are made in the favor the party offering contract or any other person. The bank offer no

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interest rate on it because these can be called at any time. For encashment the applicant must have to cancelled the call deposit instrument from its beneficiary. For collection the beneficiary usually send the authority letter for paying in the shape of Demand Draft or pay order. The call deposit instrument containing the information regarding applicant and beneficiary name, joint name a/c opened, signature cards for encashment, reference #, amount, date of issue, authorized signature etc.

OTHER PRODUCT / SERVICES

The privatization process for the expansion and diversification of economic activities in the country also demanded the introduction of new banking products. MCB took initiative in this direction and for the first time MCB devised and marketed new products and services with brand names to enter the varying requirements of its diverse customers. MCB currently have following products or services in banking sector that are making it more prominent in the banking sector: Night Banking Fax Utility Consultancy Services Traveler Cheques Self Supporting Scheme Utility Bills Collection Credit Cards ATM

CONSULTANCY SERVICES
In the process of privatization of public sector units, prospective buyers need professional assistance and MCB, with its expertise offers to their specialized service for valuation of the market value of the industrial unit, preparing bid documents and arranging finance for the purchase of the unit.

SELF SUPPORTING SCHEME

Loan for poor/needy people No mark-up charged Maximum amount of Rs. 25,000/= Minimum amount of loan Rs. 5,000/= FAX utility Pioneer to introduced Fax for customer service. Facilitates speedy transfer of funds.

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Within an hour any where in Pakistan. Charges are debited to Customer account. To facilitate business community Only in commercial trades centers premises Clients can make deposits upto 8:00 pm Date moved to next for all such transaction Utility bill collection for maximum customers Objective is to create interaction with customers Currently 1050 branches are performing this job Can be a safest way to carry cash

NIGHT BANKING SERVICES

UTILITY BILLS COLLECTION

MCB RUPEE TRAVELERS CHEQUE

Cheque is accepted at trade centers & branches No need to be a/c holder for traveler cheques Cheque is signed once when issued. Upon delivering second signed are made In case of theft no fair to encash But informing bank is necessary if thefted Minimum balance of Rs. 500/=

ATM (Automated Teller Machine)

No charges are debited per transaction Only two hundred per annum debited

REMITANCES

DEPARTMENT

The need of remittance is commonly felt in commercial life particularly and in every day life general. A major function of any banking system is the transfer of funds from one client or one place to another. By providing this service to the customer the bank earns a lot of income in the form of service charges. This department deals with local currency remittance i.e. remittance from one city to

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another without actually carrying the currency. MCB uses following instrument for transferring of money: Demand Drafts (DD) Pay Order (PO) Telegraphic Transfer (TT) Mail Transfer (MT)

DEMAND DRAFTS (DD)

DD is a written order given by the branch of the bank on behalf of the customer to other branch of the same bank to pay the certain amount to the customer. DD are issued for the particular place other than place of issuance. A drafts is a Cheque drawn by a bank on its own branch or any other branch of another bank at a different place requesting it to pay on demand a specified amount of money which is already received to the person named on it. DD is of following two types: DD payable DD Paid Suspense a/c

In the first type as advice reaches for payment the immediately pay to the customer while in later as DD presented by the customer, it is paid and the suspense account is debited. DOCUMENTATION A printed application form is provided for filling in completely and signing by the applicant. After depositing an amount of draft and commission of the bank, duly completed and signed by two authorized officers, then it is handed over the applicant and credit order is dispatched to drawee branch. Following are the prerequisites for the processing of DD: Bank Serial No

No. of DD Central No Test Key Rs.60 Postage charges 0.02% With holding tax

PAY ORDER

For this kind of remittance the payer must have the account in the issuing bank. Pay order are more liquid as compared to cheques because cheques may be dishonored while PO cant be. It is written order issued by the bank drawn and payable on itself. It is used for local transfer of money from one person to

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another person. It is also used by the public for depositing money with Government or Semi Government department. DOCUMENTATION The party who requires a pay order will get a printed application from the bank. He will fill it and deposits the amount and commission. The bank charges are same as on demand draft. Bank Serial No.

No. of PO Central No. 0.02% With holding tax

TELEGRAPHIC TRANSFER (TT)

In this case the authority is given from one bank to other on the behalf of the customer through telecommunication to debit their inter office account through them and credit their parties account mentioned in TT. It is an inter bank transaction. Telegraphic transfer is an instant transfer of funds. Through this method applicant can transfer money from one place to another place. There are two types of TT, Both types of TT are maintained in separate registers, test is applied by the manager of every amount of TT. Incoming TT Outgoing TT

Applicant has to fill a form along with depositing amount to be transferred and bank commission. MCB charges the commission at the same rate as in the case of demand drafts. DOCUMENTATION Issuing Branch Name & Code Beneficiary Branch Name & Code No. of TT 60 Rs Postage and 140 Rs for Fax Amount in words & Figure 0.02% With holding tax Test key

MAIL TRANSFER (MT)

As the name shows, it is transfer of money in the shape of document through mail. Procedure is like TT. The transfer of funds from one place to another by mail is called Mail Transfer (MT). The MT can be foreign or domestic. The applicant who is desiring to remit the funds by way of Mail Transfer can either

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deposit cash or ask the bank to debit his/her account with the cost of MT including the bank charges. These all measures are for safe transfer of funds. DOCUMENTATION Issuing Branch Name & Code Beneficiary Branch Name & Code Number of MT Amount in words & Figure 0.02% With holding tax Test key

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CASH DEPARTMENT
In cash department both deposits and withdrawals go side by side. This department works under the accounts department and deals with cash deposits and payments. This department maintains the following sheets, books, ledger of account:

Cash received voucher sheet. Cash paid voucher sheet. Paying-in-slip Cheque Book Cash balance book

Cash department is performing its job completely through computers. The following staff members are performing their duties with patience and hard work. Only two peoples are working in cash department named Mr. Ashraf OGII and Mr. Arshad OG-III with one computer with them. CASH PAID SHEET The only instrument that can be used to withdraw an amount from an account is the Cheque book. No payments are made by another instrument. Cheques can be of two types, they may be presented at the counter and encashed and the others are clearing or transfer cheques. Cashier manually inspect the Cheque for following: Signature & date Cross cutting Drawees a/c title Amounts in words & figures Two signatures at the back

The cheques should not be stated as post dated. If in the Cheque there may discrepancy regarding any of the aspects described above the cheque is returned to the customer for rectification. On other hand if the cheque is valid in all respects, the cashier enters the necessary inputs in the computer and post the entry so that account balance is updated. When cashier posts these entries, computer automatically display the balance before posting the transaction amount, balance after posting. The cashier easily and quickly see whether the amount being withdrawn so exceed the balance or within the balance. If the amount does exceed the balance then it is upon the discretion of the manager to allow an overdraft and not depending upon the customers reputation. If he does not allow an over draft, the procedure is repeated again as described for the mismatch of the signature Cheque is return.

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The detail of notes (currency) is written on the back side of the Cheque. The cashier at the same time maintain the Cash Voucher Received Record Sheet. Then once again inspect the signature of the customer cancellation mark of checking officer and stamp of POSTED is placed on cheque before hand over the cash to customer.

CASH RECEIVED
For depositing the cash into customers accounts, there is need to fill in the paying-in-slip giving the related details of the transaction. This paying-in-slip contains the date, a/c/no, a/c title, particulars, amount being deposited and details of the cash. There are two portion of the paying-in-slip. The depositor signs the one part of the paying-in-slip one is retained by the bank to show an acceptance of the entries made in the slip. The different colored paying-in-slip are used for all the types of deposits. Only the slips related to a particular type of a/c is acceptable by the bank. For example current paying-in-slip for current a/c and saving paying-in-slips for saving a/c etc. The paying-in-slip serves as a voucher to update to computerized transaction ledger. The transaction ledger is only updated by paying-in-slip and Cheque. The cashier responsible to receive both the paying-in-slip and cash from the depositor. The cashier check the necessary details provided I the paying-inslip and accounts the cash and tallies with the amount declared in the slip. If the amount does not tally with the cash given, the deposit is not entertained until the customer remove the discrepancy. On the other hand if the two amounts tally, the cashier fills in the Cash voucher received Record Sheet and assigns a voucher no. to both the transaction being made in the sheet and the slip. This voucher no. starts with one and continue by serial increments of one for each day till the closing of the sheet, the cashier fills the voucher no, an account, cash day till the closing of the sheet. The cashier fills in the voucher no, an account of, cash entry in the related type of a/c and he post his initials on both part of the voucher. Then the cashier send both to the accountant who verifies all the entries in the two documents, if the entries in the two documents, if the entries in the two documents tally with one another, the accountant authenticates the two by singing on the two documents and posting stamps on the slip. One part of the slip is then returned to the customer and other is given to the computer operator. A very important check is that the dates mentioned into the two documents must be the same. The 2nd cashier posts the transaction entries in computer ledger. This ledger contains the a/c no, a/c title, voucher no, voucher date, transaction code, transaction amount. After posting these entries, computer display before posting balance and after posting. On every transaction computer generates an output of transaction ledger. He assigns the stamp POSTED on the voucher to show voucher transaction entries are posted. Checking officer receive this voucher and the compute output transaction ledge, he manually inspects the entries of ledger and voucher. If both are tallied, he then signs the ledger and put a mark of cancellation on the voucher. After the verifications from the checking officer, cashier receives the voucher.

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CASH BOOK BALANCE

At the end of the working day cashier is responsible to maintain the cash balance book. The cash book contain the date, opening balance, detail of cash payment and received in figures, closing balance, denomination of government notes (Currency). It s checked by manager. The consolidated figure of receipt and payment of cash is entered in the cash book and the closing balance of cash is drawn from that i.e.

Opening Balance Of Cash + Receipts - Payments = Balance The closing balance of today will be the opening balance of tomorrow. This department is one of the most important department of the bank. All the books maintained in this department are checked by officer.

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ADVANCES DEPARTMENT
It is another major department of the branch. Bank provides this facility to the people who need advance money to meet their requirements. For getting the advances, the first step is the preparation of credit proposal. Some principles of lending are considered whenever financing being is made. These principles are: Character Capacity Collateral Capital Condition An assessment of his business abilities Accurate & up-to-date financial statements Market reports about the borrower Party dealing with other banks Nature and structure of borrower business Names of proprietors, partners or Directors Detail of companies associated with borrower business Financial condition of borrower business

REQUIRED INFORMATION

PREPARATION OF CREDIT PROPOSAL

At first, a formal application for credit approval is obtained from the party along with complete group position. The parties credibility report is also obtained from the banks from which the party has been doing the business. The party creditability report is also taken from the head office of Trade information Division. For obtaining credit, party has to submit the last two years Balance Sheet and Profit & Loss Statement duly attested but authorized auditors. If the party also involve in export or import business then the bank also consider the data of three years about imports and exports.
The Current and Debt equity ratio is also calculated by the bank.

Then recommendations are made the type of data required to prepare the credit proposal is to be gathered from different departments. Some data is obtained from the foreign exchange department. Some data is obtained from current account department and some data is available in Advance Department. The purpose for which the financing is required should be explained very clearly. The

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securities offered by the party to the bank is also evaluated. In case of pledging of the property in shape of land or building the complete evaluation of the property should also be attached. After all the requirements and necessary documents for applying for advances is fulfilled by the party then, the case is sent to the Chief Manager for approval. If the manager find any discrepancies, he may write on these documents. If the credit limit is in his range, he may approve the party for credit. If the amount is exceeding the Chief Manager send the case is forward to the Circle Office for approval and here the same procedure is repeated and if the credit amount is in the range of GM, he can approve and if the credit amount is very large from Circle Office, the case is then sent to Head Office and if it is a real big then is to be decided by Board of Director. MCB provides advances which are two types. These are two types of advances: Secured Advances Unsecured Advances
In secured advances, the bank takes any security against the loans while in case of unsecured advance no security is taken by the bank.

ADVANCES TYPES
MCB usually classified advances in to following types:

Agricultural Advances

Commercial Advances Industrial Advances

COMMERCIAL ADVANCES
MCB divided the advances in to two major types:

Fund Based

Non Fund Based

Fund Base Advance

In the fond base advances, the funds of MCB is involved and in Non Fund based only guarantee is given by the bank.

MCB have following Fund base facilities of advance in its corporate branches. The details of these types would be later. These are as follows: Demand Finance (DF) Cash Finance (CF) Running Finance (RF) Foreign bills purchased (FBP) Local Manufacturing Machinery (LMM) Payment against document (PAD)

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Finance against imported goods (FIM) Finance against purchase collection (FACP) Finance against foreign bills (FAFB) Export Refinance Part I (Pre Shipment) Export Refinance Part I (Post Shipment) Export Refinance Part II

DEMAND FINANCE This is a type of secured loan and demand loan never allowed without security. It is a type of long term financing. MCB also gives loan under the head of demand finance to individuals, industrial units commercial business etc. CASH FINANCE In this, the borrower gives a specific reason for the need of cash. MCB gives the facility of cash credit to business. The amount is passed through voucher and credit to the party account. Normally 0.60 paisa per thousand is charged on daily basis to customer.

RUNNING FINANCE
These finances as evident by the name are given to the business to meet their daily needs. The mark up is charged on daily balances. This type of advances are given to trade, commerce and manufacturing for general purpose. Normally 0.60 paisa per thousand is charged is charged on daily basis. It is drawn through Cheque. FINANCE AGAINST IMPORTED MERCHANDISE This type of advances are granted against the pledge of imported merchandise. The goods imported are pledged by bank. Bank pays all the charges to exporter and customs and keeps the goods in its control. On payment from the client to bank, the bank releases these goods.

EXPORT REFINANCE PART-I PRE-SHIPMENT

This type of loan is provided by the bank to the customer at the rate of 12% for the period of 150 days. The bank provides this type of advance facility to those exporters who have not enough money to make shipment. To promote the export, the government pursue the Banks to provides loans to the exporters. EXPORT REFINANCE PART-I POST SHIPMENT This type of facility is provided to the customers who have enough amount of money to make first shipment but not more. So the bank issues a loan to the exporter, this financing is for period of 150 days. Finance is provided by the SBP to exporters for the purchase of raw material and for its processing packing and shipment. The mark up rate currently set by the SBP is 12%. In case, if the party is unable to make the shipment within 150 days of financing. The party has to pay certain amount of finance as asked by the SBP and after 150 days the markup rate also charges up @ 60 paisa per thousand per day. So usually exporters tries to make the shipment within the fixed period set by the SBP which is usually 150 days.
EXPORT REFINANCE PART-II In this case the bank after receiving the performance of years in export business of the party the limit is set for a period of one year. Here the limit cannot be set by the terms pledged of the permission of the bank.

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FINANCE AGAINST PURCHASE OF COLLECTION DOCUMENT The bank provides this type of advance facility to those exporters who have not enough money to make shipment. A bill(Cheque, draft, etc.) may be purchased by the bank. Bank pays the amount to the client after deducting its commission. FINANCE AGAINST FOREIGN BILLS This facility is given to the exporter, If he needs an urgent money. Bank also provides finance against the foreign bills. He gives bills of exchange to the bank as a security and bank send these bills for collection and bank gives money to he exporter. FOREIGN BILL PURCHASE The exporter which are under L/C are also provided with the facility of loan. Amount is given to the exporter after the approval of L/C by the issuing bank. LOCAL MANUFACTURING MACHINERY The bank provides this facility to the business man who wants to buy the local manufactured machinery. LMM funds are provided by the SBP. Rate of markup for this type of loan facility is 12% on this type of loan. Legal Mortgage/REGIRSTERED MORTGAGE Equitable Mortgage Legal mortgage and equitable mortgage are accepted in case of immovable properties like land, building and machinery etc. Pledge This type of security is accepted in case of stocks or raw materials. In a pledge, the borrower has not right to sell the stocks with the permission of bank.

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CLEARING DEPARTMENT
Cheques

When we talk of cheques then there are two types of cheques

1) Open Cheque

Open cheque has following properties:

Token

The word Bearer is not crossed. Cross stamp is not there Cheque is not of limited companies. Self or name should be written on the cheque.

A token is given on open cheques when presented to bank for payment. In this case payment is made at the spot to the cheque holder. First of all cheque is presented to bank for payment. The name of holder, no of cheque and amount is written on the register by the bank employee & token is given to cheque holder. Then Cheque reaches the computer department. There it is again feeded in computer & it is stamped after checking the holder has enough amount in his account or not. After feeding in computer ( debiting holders A/C ) , the cheque reaches the cash department where the holder can receives his cash by giving token to the cashier provided that he has enough amount in his A/C.
2) Crossed cheque

When the cheque does not fulfil the requirement of open cheque then it is known as crossed cheque.

A) TRANSFER DELIVERY

When cheque has following properties then it is proceeded as Transfer Delivery.

Cheque is crossed.

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Cheque is of MCB. Cheque is from local branch.

In this situation cheques are collected separately as transfer Delivery. Procedure In Transfer Delivery following process is done. First of all cheques are noted in Transfer Delivery Ledger with the date in advance because it takes one day to reach cheque issuing branch in the same city. In T.D Ledger Name of account holder, Number & amount of Cheque are written and two copies , one original and one carbon copy of voucher SF-73 B are prepared. Original copy of voucher along with cheque is send to issuing branch while carbon copy and Pay-In-Slip is with the bank. The cheque with voucher goes to Main branch then to issuing branch and then reverse from issuing branch to main branch and then to our branch.
B) CLEARING

In clearing the cheques which are

crossed limited company different bank in the same city

Procedure Such cheques are collected as clearing cheques and are noted in Clearing Ledger. Two copies of voucher SF-37 are prepared (See Annexe ). Original voucher with the cheques are send to Main branch which then send to S.B.P in advance date. The payment is not given at hand but it is transferred to account of account holder. In case if cheque is returned due to number of reasons then the objection is finished and again send to

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main branch but this time a credit voucher along with original cheque is send to main branch instead of any Pay-In-Slip.

Advance Clearing
When cheque is sorted for clearing because of different branch in the same city then we note these cheques in two days advance date because it takes more time to reach that faraway branch . For example HBL of Baha-ud-Din Zakariya University Multan.

Procedure of Payment of Cheque of Foreign Currency

When cheques are denominated in foreign currency then procedure is not like that of ordinary cheques of Rs. First of all cheques are issued and the person give cheque to another person. When any party receives cheque in foreign currency to deposit in his account then it gives it to the ban where he has his bank account. The Bank sends this cheque to its Head Office. Head Office send it to the country where transaction is done over that currency. Then cheque goes to New York. From there it is send to that issuing bank (domestic) from where party has received cheque whose bank whose cheque it is. N.Y is credited and that bank is debited by that amount. N.Y send it to head office of our Bank. Then H.O is credited and N.Y is debited. Amount of Foreign currency is then send to main or local branch where the party has its account. Now the account of that person is credited and the H.O is debited Now there may be two cases:
1) Either account is in Pak Rs. 2) Or account is in that country 3) Or account is in Foreign Currency other than the currency in cheque.

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C) Cheque Collection
When cheque is from another city then it is grouped as C.C. Procedure SF-37 form is used in Cheque collection (See Annexe Slip is taken by bank for record purposes.
Pay-In-Slip

) Original

voucher with cheque is send to main branch. Carbon copy with Pay-In-

Here it is very necessary to have knowledge about Pay-In-Slip Purpose It is used for two purposes

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

Types It is of two types depending upon the type of account.

Green Pay-In-Slip is used for Saving Account (See Annexe Blue Pay-In-Slip is used for Current Account (See Annexe

) )

STAMPS USED IN BANK (MCB)

Following stamps are used in for different purposes.

(1)Cross Stamp
This stamp is used to cross the cheque. Crossing can be done by 3 ways. a) General Crossing Sometimes the cheque is crossed by the drawing two lines on the upper left corner of the cheque without writing any sentence on the cheque.

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b) Written Crossing Cheque can also be crossed by stamping it with sentence Pays Account Only c) Special Crossing Crossing can also be done by stamping a cheque with the words MCB GBS Branch. This means that now cheque is in use of bank only. If it is lost or dropped then it is of no use to anybody because now it is a cheque of bank. This cheque will not be cashed any where else.

(2) Payees Account Will be Credited on Realisation

This is used to stamp on the back of following instruments. Cheque (simple). 2) Travellers Cheque. 3) Pay Order. 4) Speed Cash. This means that the account of the payee will be credited provided that cheque is accepted by Drawers bank otherwise not.

(3) Disbursement Guaranteed; Payees Account will be credited on Realisation

It is used to stamp on the back of following instruments 1) Demand Draft . 2) Foreign Remittance

(4) Payees Account Credited

This stamp is used on back of those cheques which are of the same branch. It is of guarantee that if there is no problem with the cheque or A/C then Payees account will be credited.

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(5) Clearing Stamp

This stamp is placed in front of clearing voucher on the same day in which clearing was made (one day advance date). Or the date in which it is presented by Main branch in State Bank Of Pakistan. (6) Round Stamp MCB It is used in two places.

When we are dealing with C.C then we write the number of C.C which is written inside the stamp. One stamp is on cheque and other on Pays-In-Slip. When we fill Pay-In-Slip and give it to the bank officer along with cheque then he places this round stamp on the face of one part of PayIn-Slip and marks his signature on it and give it to the customer as a evidence.

(7) Pay Cash

This stamp is used when cheque is not crossed, it is open cheque. The officer places this stamp on the front of cheque and writes token number on it. This means that payment in cash will be made of this cheque on presentation of token to cashier. This is like indication for cashier to pay cash.

Reasons for Cheque returned unpaid in Cross Cheques

Following are the reasons for the cheque return.

Cheque incomplete Clearing stamp Required. Drawers sign incomplete Drawers sign different from specimen Post Dated Payment stopped by drawer.

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Amount in words and figures differ.

Report of Lost or Stolen cheque

In case of lost or stolen incidents following procedure is performed.

Cheque no of lost cheque Whether it was single or double signed. Whether it was crossed or related to someone Phone / Fax of reporter. NIC no of reporter. Signature of reporter. How cheque was lost. FIR Lodged or not.

Green Sheet
At the end of banking time ( 1:30 o clock), three Green sheets are prepared for clearing , cash and account side. One Green Sheet is also prepared by clearing department.

RTC DEPARTMENT
This department deals in RTC. It stands for Rupees Travellers Cheques. MCB RTC has the largest share of the total RTC Market. Over 1.5 Million satisfied customers have made MCB RTCs. These are printed in the UK and carry a thread watermark- a feature that prevent counterfeiting.

Important Features As good as cash

The most convenient substitute for cash for all kinds of transactions(property, trade, personal etc).

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Denominations
Cheques are available in the denomination of Rs 1,000 Rs 10,000 Rs 50,000.

Easily Encashed
They can be encashed at any MCB branch.

Easily refundable
In case of Loss Or Theft we can get the full amount back.

Exclusive Security Features

MCB RTCs cant be duplicated. Various security features both in design and materials make counterfeiting or fraudulent alteration extremely difficult.

Valid Until Used

Validity of Cheque is indefinite. We can use them for a week, a year or more after the date of purchase.

Televerification System
It enables us to check the validity of cheque 24 hours a day . Televerification UAN (021) 111-000-456.

Procedure
First of all RTC-10 is given to customer. It is filled and then cash is deposited to cash department . One copy is for office and one copy is given to the customer and RTC are issued at that time. When RTCs are sold then H.O A/C is credited by using form no RTC-20. It has five copies: A,B,C,D,E.

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A= H.O copy, B= RTC Dept, C& D= Branch. When RTCs are returned or purchased by the MCB then H.O is debited by that amount by using form RTC-30. Summary of al RTC purchased by branch is made on form RTC-40.

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ANALYSIS
SWOT ANALYSIS

STRENGTH
Strong Financial Position As we can see in the financial statements of the bank, the financial position of the organization is very sound and its profitability is in increasing. The Earning per share has been increased on a rate of about 50%, which is a very positive sign. Highly Qualified Employees The bank has highly qualified and skilled workforce and it has succeeded to attract the best banking professionals from across the country due to its growing pace and sound reputation. Conducive Environment The management of the bank is very much concerned with the development of and improvement of the working environment. The bank has state of the art and purpose built branches where all the modern technologies are provided to get the efficiency of the workforce and the customer satisfaction. Govt. Support and Encouragement As the owners of the bank belong to UAE and the type of their investment in Pakistan is a foreign investment, the govt. is fully supporting the bank management due to its policy to maximize the foreign investment in the country, to get the economic prosperity. Fastest Growing Financial Institution Due to its successful business policies and the strong financial position the bank has achieved the reputation of fastest growing financial institution in the country. It has greatly increased the customers confidence in the bank Huge Expansion Plan Due to its strong financial position the bank has undergone a huge expansion plan to compete with the existing bank all over the country and with the passage of time the branch network is expanding at a very good pace. Young and Energetic Workforce As the bank is a newer one in the country, the bank has an advantage over its competitors because the majority of its workforce is young and not very much over aged. Thus the bank is getting maximum out put from its young and energetic workforce by spending comparatively less on their remunerations.

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Islamic Banking Division The bank is one of the pioneers of the commercial banks who have started the Islamic Banking along with their conventional banking. The bank has a separate network of its Islamic Banking Division which has 16 branches across the country and this network is also expanding at a very good pace.

WEAKNESSES
WAIVER OF CHARGES
Currently the middle management of bank Al-Falah is the big reason for waiver of charges. Bank Al-Falah loosing a lot of its income likes (Cheque book charge, online charges, statement charges, and other things) because of management. This is a weakness of bank Al-Falah.

INEXPERIENCED WORKFORCE
As the majority of the workforce consists of young professional, they lack in their experience. And sometimes lack of experience becomes a hurdle while serving to the customers. It is the point where they feel difficulty while competing the other bank, which have a very experienced workforce.

OVER WORK LOAD ON EMPLOYEES

It was observed in the branch that as compared to huge business the bank is dealing in, the no. of employees is lesser and thus there is an increased workload on the employees. Due to this the efficiency of the employees is reduced.

EMPLOYEES ARE NOT VERY MUCH MOTIVATED

As discussed before, the workload is high and the employees, especially the credit department, have to do late sittings to complete their tasks. On the other hand the bank has revised its salary increments policy to decrease the increment rate, as a result a decreased motivation level of employees is observed.

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OPPORTUNITY:
Govt. is taking very bold steps to promote IT in Pakistan. ACBL has an opportunity to improve in technology. Stock exchange is very volatile and takes immediate effect. So, in the time of crises, conservative investors return to saving deposits. MCB is surrounded by many competitors. It has an opportunity to do aggressive marketing to increase its business. As information technology is helping with different fields of business and banking so its the opportunity for us to utilize the information technology to achieve our major goals. Through promotional strategy we still have the opportunity to attract more customers.

THREATS

UNCERTAINTY OF ECONOMY Although the economy is growing at a good pace, but there are many factors which results in the uncertain position of the economy. Such as political uncertainty, WTO, increase in poverty etc. etc. As a result there are permanent threats of future risks and losses for the bank.

HIGH RATE OF INFLATION

The inflation rate of the country has gone above the 10%. This can result into an unfavorable situation for the bank. And especially when the ownership of the bank is UAE based, the net spread for them can substantially decrease.

TREND OF MERGERS
There is a trend of mergers among the banks to become prominent in the market and to get the maximum market share. This trend can result into the union of some leading banks which can give tough time to the bank and it will become difficult for the bank to compete with them.

RISK OF DEFAULTS
As discussed earlier that there is a trend of launching mega projects in the country. And every one is involved in this trend without taking any measure for the successfulness of these projects. This can result into the failure of this project which can make it difficult for the banks to recover their funds from these defaulters.

RISK OF HUMAN RECOURSE

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Some other banks have competent taskforce, which is also a threat for MCB. Because human resource is the most valuable resource.

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LEARNING AS INTERNEE

Duties & Accomplishments

During my internship in MCB I worked in Remittances, clearing department and Customer Service Office department and I successfully completed all the task/duties that were assigned to me. The duties that I performed and the thing I learned each day are given as follows: Learned basic operations of remittance department Made vouchers and entries for Incoming TT Observed other operations e.g. PO (Pay Order), DD (Demand Draft) Learned bank charges for PO, DD Learned how to make entries and vouchers for Outgoing TT(Telegraphic Transfer) Made few Outgoing DD

Learned & Made Inter-Branch Credit Advices against the checks received from outer city branches

Made Debit vouchers against the TT, PO & DD charges

Made Inter-Branch Credit Advices against the checks

Made entries in the Day Book Learned PO and DD issuance in detail Learned about clearing of cheques

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CONCLUSION

If I have to express my experience of internship in MCB Limited AMC Branch Abbottabad I would briefly say: MCB is a good Organization in the way that anybody can join it for his/ her long-term career. Overall working environment is comfortable. Management of branch cares a lot of its employees and considers them as the Asset of bank. Behavior of senior executive of bank is very polite and they are caring about the individuals career and their growth. However management is very demanding about the targets but good reward at the achievement of assigned targets is awarded. Employees at MCB Bank are quite efficient. its employees have to bring their bank among the list of good banks. Therefore, they work more than their working hours and it is all according to their will. It also shows their loyalty, commitment to organization. Employees are given the benefits like bonus, gratuity funds, loans, increments, and medical. All the customers are entertained individually. Same kind of behavior and attention is given to all the customers. Getting ideas for improvement from customer side is a new idea and that is working very well in MCB Ltd. All the customers are asked to fill a suggestion form and the standards of the bank are improved through them. Prioritizing its product portfolio in line with its corporate and consumer needs and wants the bank is committed to develop products that give more value to its customers in both the sectors. In bank, all the work is done on computers. All the entries are made in computer. Balance are fed into the computer. This increases efficiency of the bank. During my internship training I gathered information regarding how a successful bank operational aspect decorticated with the practical. I found my internship training at MCB Limited Amc Branch Atd to be a very rewarding experience. The training was beneficial because it helpful me to aware a real life working environment. So far my learning is concerned; all the employees at branch were quite cooperative. They helped me to understand the activities of a bank to possible extent. Their good attitude gave me more confidence to learn more and to ask if I have any query in my mind. Besides their ever going activities they never get irritant by my questioning. I had made an honest efferent to present the working & operation of MCB Limited Amc branch Abbottabad in simplest way. I feel pleasure that I have really gained a lot during 6 weeks & enjoyed working with experienced cooperative & intelligent staff.

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RECOMMENDATIONS
It was an interested experience to do internship in MCB limited. The staff was highly cooperated and due to their help I learned big deal about modern banking. I suggest that such an internship program highly integrative for the students of business education so that the students should be enquired with the knowledge of practice world .I do summarize that it would be a great help to me in selection of job or future field of work. Here I am putting some suggestions, which will enable the bank to compete with other banks more effectively & efficiently. It is observed that the employees were overburdened so they have to stay at branch till late at night. In this way their efficiency is affected and hiring more employees can reduce their work. The employees should be signed jobs for specific period and than they should shifted to other department so that they gain knowledge of other jobs. MCB Limited should properly advertise and Communicate to

public about the services provided by it, so that more customers will be attracted.

The banks management should give more incentives and pay scale of officers should be revised & improved. System and operations should be more defined and organized. IT draw backs should be improved. Administration drawbacks should be improved by the strict control of general issues. Audit should be held internally. Rather there should be an Audit Department in the branch to make audit on daily basis. This can become so helpful as different banks are having this department of their own. Lockers, ATM, all these facilities should be provided to attract more customers. Expenditures must be control, which are very high.

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APPENDIX

CEO Chief Executive Officer SME Small Medium Enterprises B.D Board of Directors V.C. Vice Chairman
Pre. Group CEO President And Group Of Chief Executive Officer Group Crd. & RM Head Credit And Risk Management GROUP HRDGroup Head Human Resource Development

Cou. H. ULCountry Head Union Leasing Group.H.R.BGroup Head Retail Banking Group.H. Con.B Group Head Consumer Banking H.I. Audit Head Of Internal Audit
Com. Sec. C.F.O Company Sectary And Chief Financial Officer

AMEX Card American Express Card PO Pay Order DD Demand Draft ATM Auto Teller Machine PLS Profit And Loss Saving A/C LTF Loan Transfer Facility RF Running Finance RM Relationship Manager RO Relationship Officer TL Transfer Letter DAF Delivery Acceptance Form PO Purchase Order LOA Letter Of Acceptance NAS New Accountability System VA Verification

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SOURCES/REFERENCES
www. habibbankltd.com www.businessrecorder.com www.paksearch.com www.dawn.com www.findarticles.com Bank Magazine; Brochures Information provided by the employees My observation