mcb internship part 1

8/8/2019 Mcb Internship Part 1

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FAISAL AZAM Hailey College of Commerce 1522

Letter of Transmittal

Prof. AHMAD USMAN ,Hailey College of Commerce,

University of The Punjab,Lahore

Dear sir,It is a great honor for me to present you the internship report

as required for the completion of B. Com ( Hons) programme.The staff of theMCB Bank has been very co-operative with me in providing information regardingthe procedures and processes in practice. Due to certain constraints and legalformalities, I have not been able to gather all the facts and figures about theorganization. Yet, the report is a comprehensive one, containing a lot ofinformation. The practical work during internship period has been a reworking

and enlightening experience.

Yours truly,FAISAL AZAM.

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ACKNOWLEDGEMENTS

O Allah! Let not our hearts deviate from the truth after You have guided

us, and bestow upon, mercy from Your grace; verily You are the Giver ofbounties without measures. Up and above every thing All Glory be to Thee, O,Allah, The beneficial, The merciful, Whose blessings and exaltation flourishedour thoughts and thawed our ambitions to have the cherished fruit of our modestefforts in form of this write up from the core of heart to the Holy Prophet HazratMuhammad (Peace Be Upon Him) who is forever a torch of guidance andknowledge for humanity as a whole.

The work presented in this manuscript was impossible to be accomplishedwithout the sympathetic attitude, utmost care, animate directions, cheeringperspective and enlightened supervision of our respected supervisor PROF.

AHMAD USMAN SB Hailey College of Commerce, University of the Punjab. I amgrateful to his ever-inspiring guidance, keen interest and constructivesuggestions throughout the course of our master level studies.

A great debt of gratitude and sincere thanks are extended for kindbehavior, friendly attitude, enthusiastic company and marvelous guidance toMr.M Zeeshan (branch manager).

Words are lacking to express our humble obligations, indebtedness andimmense gratitude to our affectionate father, mother, brothers. for their love,good wishes, inspirations and unceasing prayers for us, without which thepresent destination would have been a mere dream.

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EXECUTIVE SUMMERY

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solidfoundation 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 ofexpenses, 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 centralizingTrade Services in the country by providing centralized foreign trade services tobranches with a view to improve efficiency, expertise and reduce delivery cost.

During my internship in MCB I worked in Remittances, Advances, ForeignExchange 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 byRemittances, Advances, Foreign Exchange and Customer Service Officedepartment and bank as a whole. I also learned banks correspondence with theircustomers and within branches. I learned about documentation requirements andrecord keeping for different activities and processes, especially thedocumentation requirement for different kinds of financing facilities.

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History of Banking

Evaluation of Banking

It has not so far been decided as to how the word Bank originated. Someauthors opine that this word is derived from the words Bancus or Banquewhich mean a bench. The explanation of this origin is attributed to the fact thatthe Jews in Lombardy transacted the business of money exchange on benchesin the market place and when the business failed, the Banco was destroyed bythe people. Incidentally the word Bankrupt is said to have been evolved fromthis practice.

Other Authorities hold the opinion that the word Bank is derived from theGerman word Back which means Joint Stock Fund. Later on, when theGerman occupied major part of Italy, the word Back was Italianized into Bank,

It is, therefore, not possible to decide as to which of the opinions is correct. Forno record is available to ascertain the validity of any of the opinions.

Early Growth

Banking in fact is as primitive as human society, for ever since man came torealize the importance if money as a medium of exchange, the necessity of acontrolling for regulating agency or institution was naturally felt. Perhaps it werethe Babylonians who developed banking system as early as 2000 B.C. It isevident that the temples of Babylon were used as Banks because of theprevalent respect and confidence in the clergy.

Modern Banking

Despite the classical origin, banking in its modern form and structure started inBritain when many of the Lombardy merchants came to England in the fourteenthcentury and settled in the parts of the city of London now called Lombard Street.They were so resourceful that even the king had to depend on them for loansdespite the fact that the Church was firmly against usury. They dealt with not onlykeeping the money in safe custody but also changed money for the travelers ormerchants engaged in foreign trade.

In 1695, the Bank of England was established. This bank lent GBP1,200,000 at8% to William-III, who in return allowed a number of privileges to the bank,specially the right to issue Note payable to bearer on demand up to the amountof this loan. This was known as Fiduciary issue, not covered by gold.

Development of Modern Banking:

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In 1854, the Joint Stock Companies Act opened an era of corporations and theLimited Liability Act. 1855 restricted the liability of shareholders of a LimitedCompany to the amount of the successfully paid up value of the shares held bythem. In the succeeding years Joint Stock Banks became very common either byabsorption of private banks or amalgamation amongst Joint Stock Banks

themselves.

In 1955 the British banks made a departure from traditional banking byundertaking hire-purchase financing for companies buying industrial plants andmachinery and took interest on hire-purchase finance.

Types of Banks:

Due to the variety of resources if money and the diversity in lending andinvestment operations, banks have been placed in various categories, such as:

Commercial Banks Merchant Banks

Saving Banks

Mortgage Banks

Consumer Banks

Investment Banks

Central Banks

Banking in Pakistan

At the time of Independence, there were 487 offices of scheduled banks in the

territories now constituting Pakistan. By 30 th June 1948, the number of offices ofschedule banks in Pakistan declined from 487 to 195.

The Government of Pakistan ultimately decided to deregulate the financialsector, allowing freedom to capital market and money market both. At presentthe money market structure in Pakistan companies of the following:

1. State Bank of Pakistan2. Commercial Banks3. Exchange Banks4. Cooperative Banks

5. Cooperative Credit Societies6. Saving Banks7. Specialized Credit Institutions

Commercial Banks

Commercial Banks are companies which transact the business of banking inPakistan. The companies operate in accordance with the provisions of the

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Banking Companies Ordinance 1962. Section 5(b) of which says: Bankingmeans the accepting, for the purpose of lending or investment, of deposits ofmoney from the public, repayable on demand or otherwise, and withdrawable bycheques, drafts, order or otherwise.

Commercial Banks in Pakistan have been authorized to engage in any one ormore of the forms of business in accordance with the Section 7 of the BankingCompanies Act, 1956

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History of MCB Bank Limited

MCB bank was incorporated in 1947 and soon it earned the reputation of a solidand conservative financial institution managed by expatriate executives. In 1974,MCB was nationalized along with all other private sector banks. This led to

deterioration in quality of the banks loan portfolio and service quality. Eventually,MCB was privatized in 1991.

During the last fifteen years, the bank has concentrated on growth throughimproving service quality, investment in technology and people, utilizing itsextensive branch network, developing a large and stable deposit base andmanaging its non-performing loans via improved risk management processes.

MCB Bank Ltd. was known as Muslim Commercial Bank Ltd. before 2005. Butin 2005 the Management of the Bank decided to change its name from MuslimCommercial Bank Ltd. To MCB Bank Ltd. keeping in view the over all image of

the Muslims in the world. MCB is one of the leading banks of Pakistan with adeposit base of Rs. 368 Billion and total assets over Rs.500 Billion. The Bankhas a customer base of approximately 4 million, a nationwide distribution networkof over 1,000 branches and over 450 ATMs in the market.

Core Values

The following are the core values of MCB Bank Ltd.

Trust

Customer Focus

Innovation

Teamwork

Achievement

Social Responsibility

Vision

To be the leading financial services provider, partnering with our customers for amore prosperous and secure future.Mission Statement

MCB Banks team of committed professionals is dedicated to maintaining long-term customer relationships through outstanding service and convenience.

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MCBs leadership is stressing mainly on customer satisfaction and their objectiveis:

Full Steam Ahead

MCBs leadership steering customers through new waves of success.

LEADERSHIP

It comes from planning ahead of time

It comes from kEeping a steady course

It comes from tAking on challenges

It comes from aDding value to our service

It comes from sEcuring common interests

It comes from bRidging the distances

It comes from aSsociating with you

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Organizational Structure.

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CORPORATE INFORMATION

Board of Directors

Mian Mohammad Mansha Chairman

Mr. S. M. Muneer Vice Chairman

Mr. Tariq Rafi Member

Mr. Shahzad Saleem Member

Mr. Sarmad Amin Member

Dr. Muhammad Yaqub Member

Mian Raza Mansha Member

Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Abdul Farid Bin Alias Member

Mian Umer Mansha Member

Mr. Muhammad Ali Zeb Member

Mr. M.U.A. Usmani Acting President

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Audit Committee

Mr. Tariq Rafi Chairman


Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Muhammad Ali Zeb Member

Mr. Malik Abdul Waheed Member

Human Resources Committee




Mr. Shahzad Saleemn Member

Mr. M.U.A. Usmani Member

Risk Management & Portfolio Review Committee

Mr. Shahzad Saleem Chairman


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Mr. Sarmad Amin Member



Committee on Physical Planning, IT System &

Contingency Arrangements

Mr. Sarmad Amin Chairman

Mr. S. M. Muneer Member



Mr. Abdul Farid Bin Alias Member


Business Strategy & Development Committee


Mr. S. M. Muneer Member

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Mr. Shahzad Saleem Member



Dato' Mohammad Hussein Member



Chief Financial Officer

Mr.Salman Zafar Siddiqi

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Variance Anlaysis. Variance compared to2008

2009 Amount %

Mark up/return/interestearned

RS.M 51616 11572 29%

Mark up/return/interestexpnsed

- 15841 4281 37%

Net mark up/interestincome

- 35775 7291 26%

Provision & write off - 7465 3423 85%

Non mark up / interestincome

- 5643 (149) -3%

Non mark up /interestexpences

- 10797 2433 29%

Profit before taxation - 23155 1287 6%

Taxation - 7660 1167 18%

Profit after Taxation - 15495 121 1%

EPS Rupees 2242 0.17 1%

Interpretation:Thp past two years data shows an increase in all returns(i.e. interestearned,interest income, profit after taxation) which is a positive sign. But mosylyexpenses (i.e. interest expensed, provision taxation,)are also increase whichshows negative sign of business. The bank should have to review policies todecrease expenses.

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Financial ratios

FinancialRatio

2009 2008

PBIT/totalincome

55.91% 63.80%

Grossspread

69.31% 71.13%

Income/expense

Times 3.84 4.10

Return onaverage equity

27.35% 31.49%

Return onaverage Asset

3.25% 3.60%

Return on

capital employed

27.35% 31.49%

Earning pershare before tax

Rs 33.50 31.64

EPS beforetax

Rs 22.42 22.25

Advance/deposit ratio

Gross

73.37% 82.64%

Advance/deposit ratio

Net

68.89% 79.39%

Break upvalue per share Rs 88.37 75.60

Break upvalue per share(including surplus)

Rs 100.91 84.55

EarningAsset to total AssetRatio

87.23% 85.70%

EarningAsset to depositand borrow

107.74% 107.75%

Deposit toshareholder Equityratio

6.02 6.32

Capitaladequacy Ratio

19.07% 16.28%

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Interpretation:

The past two year data shows that mostly financial ratio decrease which showsnegative sign of company.the bank should have to overview its policies todecrease expenses.

Dividend ratiosDividend

Ratio2009 2008

Cashdividend per share

Rs: 11.00 11.50

Dividendyield ratio

(based on

cash dividend)

5% 9.14%

Dividendpayout Ratio

53.52% 56.19%

Bonusshare issued

10.00% 10.00%

Interpretation:The past two year data shows that dividend ratio decreases whih shows negativesign of company . The bank should have to review its policies to decreaseexpenses.

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DEPOSIT PRODUCTS

BASIC BANKING ACCOUNT

It is also known as the Salaried Account. Its is as simple as ABC to start banking

with MCB.

KEY POINTS OF BBA

Minimum balance can be Nill.

A person can open an account with Rs: 1000

ATM card and Cheque Book is must.

Two times in a month a person can deposit (including cash and clearing).If limits exceeds above two times then a bank can charge Rs:35 on every

transaction.

A person can withdraw two times in a month.

Unlimited transaction through Virtual banking( GPRS activation and

person can get information about his/her account on mobile).

Demand draft are not available on BBA account.

No Zakat is deducted.

A person can use ATM card at thousand of merchants outlets across

Pakistan.

CURRENT ACCOUNT

Current account is opened by the person who need money when he needed.

KEY POINTS OF CA

An account can be opened with a Rs: 1000.

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Amount should be Rs: 10000 in an account If at least Rs:10000 remains in

an account then there is no deduction .If amount is less then Rs: 10000

then Rs:58 is deducted every month.

There is no profit in this account.

Lockers facilities are available.

ATM and cheque book is also available.

Unlimited withdrawal and deposit across nationwide is available.

SAVINGS ACCOUNTThere are five types of saving accounts

1. PLS Saving.

2. SMART Saving.

3. Saving Xtra.

4. Saving 365.

5. KBA

1. PLS SAVING ACCOUNT

KEY POINTS

Account can be open with Rs:1000.

Minimum balance requirement is Rs:1000.

Maximum balance must be Rs: 10000.

Profit is calculated on least amount.

Profit is given every six month

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If balance is less then Rs:10000 then Rs:58 is deducted

Lockers facility is also available.

ATM Card and cheque is available.

Zakat is deducted at 2.5% of amount. If amount is Rs: 29000

then no Zakat deducted. If amount exceeds then 2.5% of the

amount.

2. SMART SAVING ACCOUNT

KEY POINTS Account can be open in Rs: 1000.

Balance should be at least Rs:10000

At low balance profit can be given.

Profit is after every three months.

ATM is available but Cheque book is not available.

If initial deposit is Rs: 200000 then 5% profit is given.

If initial deposit is Rs: 300000 then 7% profit is given.


3. SAVING XTRA

KEY POINTS

Account can be open in Rs: 1000.

Balance should be at least Rs: 100000. If balance is less then this limit

then no profit is given.

Profit is calculated monthly.

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Three times free of cost withdrawals If draws above Rs: 25000. After the

third drawl charges are deducted.

On ATM withdrawal there is no charges on any limit of amount.

Cheque book is also available.

Lockers facility also available.

4. SAVING 365 GOLD

KEY POINTS

Account can be open in Rs: 1000.

Minimum balance should be at least Rs: 500000.

If amount is less then Rs: 50000 then Rs: 58, is deducted every

month.

ATM is available.

Lockers, cheque book is also available.

6. KHUSHALL BACHAT ACCOUNT

KEY POINTS

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Account can be open with Rs: 1000.

Minimum balance should be at least Rs: 20000. If amount is

below then Rs: 58, is deducted.

ATM facility is also available.


Cheque book is also available.

BUSINESS ACCOUNT

KEY POINTS Account can be open with Rs:1000.

Balance must be Rs: 50000.

There is no profit on this account.

If balance is Rs: 50000 the drawing and depositing in other

cities is free.

If account is opened with Rs: 1000 then Demand draft and Pay

order is 1 time free.

Profit is given after six month.

If account is opened with Rs: 1000 then 25 leaves cheque book

is free.

If account is opened with Rs: 50000, then 50 leaves cheque

book is free.

ATM card is free.

Monthly statement free, six month statement is free.

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Lockers are also free.

Importance of Account Opening

It is very important that the account of a customers are opened properly and with

due diligence, so that the relationship of a customer and a banker remains for a

long period of time. The accounts which are opened with the due care and

keeping in view the different law requirements then it will be very useful in long

term relationship of a banker and a customer. On the other hand, if the accounts

are opened without proper diligence and care, then there will be problem in

maintaining in such accounts which could pose various risks on the bank and a

customer and it will affect the relationship of a banker and a customer.

Account Opening Documentation Requirement for Various accounts

types

1. Individuals.

2. Joint accounts.

3. Sole proprietorship Account

4. Partnership.

5. Trust accounts

6. Societies/Co-operative societies/clubs/NGOs/NPOs etc.

7. Minor accounts.

1. Individual

Attested copy of CNIC of a customer and if the customer lives inabroad then the PASSPORT duly verified through NADRA before

account is opened. Verification cost cannot be charged to the

customer.

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In case the person does not bear a CNIC having a photo then the

bank should also obtain, in addition to CNIC, any other document such

as passport or diving license that contains a photo. If no document

exist with a photo, then the bank obtain (a) photos attested by the

Gazetted officer/ Nazim (b) copy of CNIC duly verified by NADRA and

the same person who attested photo(c) Confirmation in writing that

he/she does not have any document containing that contains a

photograph.

a) Application For Opening Account

b) Specimen Signature Card

c) New KYC Form

d) Proof of income (e.g. employers letter from salaried person or

salary slip. For Self Employed, copy of his accounts (un-audited), or

BM to estimate his income based upon his takings (Inflows and

Outflows).

e) CNIC to be verified with NADRA before opening the Account.

f) Copy of CNIC of the account holder with Original Seen Stamp.

2. Joint Accountsa) Application for Opening Account

b) Specimen Signature Card

c) KYC Form

d) Proof of income ( For example an account in the names of husband

& wife is to be opened then proof of income of husband and

sources of wife be also verified as required under KYC).

e) CNICs to be verified with NADRA before opening the Account.

f) Copy of CNICs of the account holders with Original Seen Stamp.

3. Partnership Firm

Attested copies of CNICs duly verified by NADRA of all partners.

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Attested copy of Partnership Deed duly signed by all partners of

the firm or Letter of Partnership (form CF-13) in lieu of partnership

ship deed.

Attested copy of Registration Certificate with Registrar of Firms. In

case the partnership is unregistered, this fact should be clearly

mentioned on the Account Opening Form as well as request letter

to open account on letter head.

Original Authority Letter in favor of the person authorized to

operate the account of the firm.

a) Application for Opening the Account

b) Specimen Signature Card.

c) KYC Form.

d) Registration Certificate in case of Registered Firm.

e) Copy of partnership deed & authentication.

f) Proper resolution with companys stamp to open and operate the account

of the firm jointly signed by all the partners.

g) CNICs of all the partners to be verified with NADRA before opening the

Account.

h) Copies of CNICs of all the partners / account holders with Original Seen

Stamp.

4. Joint Stock Companies

Application For Opening Account

Specimen Signature Card.

KYC Form.

Board of Directors resolution with Company Seal & authorizing

Directors to open and operate account.

Certified true copy of the Certificate of Incorporation or Registration

from SECP.

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Certified true copy of the Certificate of Commencement of business

from SECP. (In case of Public Limited Company only)

Certified true copy from SECP as amended up to date of the

Memorandum and Articles of Association.

List of present Directors duly certified by the Registrar Joint Stock

Companies i.e. Attested Copy of Form-29 issued by SECP

Balance Sheet if the Company is already functioning.

Form A to determine the actual beneficial owner of the company.

CNICs of all the directors of the company to be verified with

NADRA before opening the Account.

Copies of CNICs of all the directors with Original Seen Stamp.

5. Trust Account

1. Attested copy of Deed of Trust duly registered with the Registrar of

Properties / Commissioner Income Tax.

2. Certified copy of the Instrument of Trust (Letter of Administration). There

is no need of this if attested deed of trust (point 1) has been obtained.

3. Attested copies of CNICs of all the authorized trustees duly verified

through NADRA.

4. Resolution duly passed by the trustees to open A/C in MCB in the name of

the trust. It should be ensured that mandate for opening of account given

in the resolution does not violate the provisions of Trust Deed?

5. List of Trustees duly certified by at least two trustees.

POINTS TO BE KEPT IN MIND WHILE OPENING TRUST ACCOUNT

All trustees duly authorized through Resolution should sign the application

for opening account.

Ledger and Specimen Signatures Cards should be BOLDLY marked asTRUST ACCOUNT

No cheque or Pay Order or Credit Voucher issued in the name of Trust

should be collected for credit to the PRIVATE Account of Trustee or

Trustees.

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a) Attested copy of certificate of Registration with Registrar of Properties /

Commissioner of Income Tax

b) Attested copies of CNICS of all trustees with original seen stamp.

c) CNICs to be verified with NADRA before opening the Account.

d) Copy of CNIC of the account holder with Original Seen Stamp.

e) Certified copy of Instrument of Trust / Trust Deed.

f) Resolution duly passed by the trustees in their meeting for opening and

operation of account in the Bank in the name of said trust.

g) List of present trustees duly certified at by at least 2 trustees.

h) Moreover, Bank can open trust accounts covered under section 227

Companies ordinance 1984 i.e. Provident Fund, Gratuity Funds, pension

funds after obtaining evidence of registration with Govt. Department.

6. Clubs, Societies, Associations and NGOs / NPOs

Certificate of registration issued by the registrar of Co-operate

Societies/ Registration Authority.

By-Laws/Memorandum & Articles of Association of the Society

containing official seal of the registration authority for opening of

account in the name of association as required under section 37(d)

of Co-operative Societies Act 1925.

List of members of the Managing Committee duly certified by the

Registrar of Societies.

Resolution duly passed by members of Managing committee in

their meeting regarding opening and operation of the account in the

name of said society. It must be ensured that mandate for operation

of account given in resolution is not in violations of the provisions ofBye-Laws/ Memorandum & Articles of Association.

Attested copies of CNICs of authorized officials / persons with

original seen stamp and CNICs to be verified with NADRA before

opening the Account.

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8. Minor Accounts (Age below 18 Years)

Minor, a person who has not attained the age of 18. If court appoints

guardian for him, the period of minority extends to the age of 21.

Guardian is authorized to open minor account jointly in the name of

guardian and minor(s), payable to either or survivor.

Title of A/C should be on minors name (as per Form B), word minor to be

added to the title.

In AOF, particulars of the guardian will be filled in personal details.

Attested copy of the CNIC of guardian duly verified through NADRA.

Attested copy of the Form B of the minor.

9. ILLITERATE PERSON

Right / Left both thump impressions of the account holder (in case of

women the thumb impression is right and in case of men the thumbimpression is left hand).

Two recent Passport size photographs of the account holder.

Marking of All Drawings in person Account on AOF.

In case of withdrawal of large amounts in excess of Rs.5000, it is

advisable that the thump impression of the account holder be affixed in the

presence of an independent witness known to the Branch Manager and

his full name and address should be recorded below his signatures as

required under operational Manual of the Bank.

Cheques in clearing not allowed.

Photos are not staple and are pasted with the gum because when the

illiterate person wants to put the thumb impression, with the staple

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pictures the thumb impression can be misplaced and it is advisable to

paste the photos of the illiterate holder.

Account Opening Common Irregularities

All columns of Account Opening Forms not filled in properly.

Source of income, evidence of Business and nature of

service not mentioned.

Monthly turnover not Input in Symbols / turnover does not

match.

Letter of thanks to Account Holder not sent or sent without

dispatch number.

CNIC not verified with NADRA before opening account.

Un-delivered letter of thanks not kept on the file and notation

is not made into the system.

Account opened on the basis of indirect address which is

risky & dangerous.

Same day issuance of cheque book without verifying A/c

holders postal / business address.

Not taking acknowledgement signatures for Account

Opening Forms, Cheque Books.

Date of Cheque Book issued not stated on Account Opening

Forms.

Customers signatures neither admitted nor verified.

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Cheque Book acknowledgment received without delivering

the cheque book.

Government Accounts opened without orders of competent

authority.

Agreement on A/c opening forms not signed by the A/c

holders.

Notation that customer was interviewed by the manager and

that CNIC verified through NADRA not recorded on AOF.

CPF (Client Profile Form) not properly filled in with

respective information.

Customers not categorized according to risks e.g.

High risk customer.

Medium risk customer.

Low risk customer.

Record of Accounts opened & closed not maintained by

checking Symbols Listings.

MCBBANCASSURANCE

Products

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Risk Management

Risk Management at MCB is aimed at maximizing value for its stakeholders. All

entities face uncertainty and the challenge for management is to determine howmuch uncertainty to accept as it strives to grow stakeholder value and whatshould be the return associated with the risks taken. Uncertainty presents bothrisk and opportunity, with the potential to erode value. Risk Management at MCBBank enables management to effectively deal with uncertainty and associatedrisk and opportunity, enhancing the capacity to build value. Value is maximizedby setting strategy and objectives to strike an optimal balance between growthsand return goals vis--vis related risks, and efficient and effective deployment ofresources in pursuit of the set objectives.

Risk Management Encompasses:

Aligning risk appetite and strategy-considering the entitys risk appetite inevaluating strategic alternatives, setting related objectives, and developingmechanisms to manage related risks.

Enhancing risk response decisions-provides the rigor to identify and selectamong alternative risk responses-risk avoidance, sharing, mitigation andacceptance.

Reducing operational surprises and losses-identify potential events and establishresponses, reducing surprises and associated costs or losses.Improving deployment of capital-obtaining robust risk information allowsmanagement to effectively assess overall capital needs.

These capabilities help management achieve the entitys performance andprofitability targets and prevent losses. Risk Management ensures effectivereporting, compliance with laws & regulations an helps avoiding damages to theentitys reputation and associated consequences.

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At strategic and macro levels, we have reconstructed our Risk Managementorganization in line with framework provided by Risk Management Guidelines ofthe State Bank of Pakistan, frameworks for risk identification, measurement,monitoring and controlling at micro level are in the final phase of development

and will be implemented by the end of Financial Year 2007. We are, however, oncourse for implementation of Basel II Capital Accord.

Staff Retirement Benefits:

The Bank operates the following staff retirement benefits for its employees:

a) For clerical / non-clerical staff who did not opt for the new scheme, theBank operates the following:

1) an approved contributory provident fund;2) an approved gratuity scheme; and3) a contributory benevolent scheme

b) For clerical / non-clerical staff who joined the Bank after the introductionof the new scheme and for others who opted for the new schemeintroduced in 1975, the Bank operates the following:

1) an approved non-contributory provident fund introduced in lieuof the contributory provident fund;

2) an approved pension fund; and3) contributory benevolent scheme

c) For officers who joined the Bank after the introduction of the new schemeand for others who opted for the new scheme introduced in 1977, theBank operates the following:

1) an approved non-contributory provident fund introduced in lieuof the contributory provident fund; and

2) an approved pension fund.

However, the management has replaced the pension benefits for employees inthe officer category with a contributory provident fund for services rendered afterDecember31, 2003.

d) For executives and officers who joined the Bank on or after January 01,2000 the Bank operates an approved contributory provident fund.

e) Post retirement medical benefits to entitled employees.

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Annual contributions towards the defined benefit plans and schemes are madeon the basis of actuarial advice using the projected unit credit method. The abovebenefits are payable to staff at the time of separation from the Banks servicessubject to the completion of qualifying period of service. The net cumulative

actuarial gains/losses at each balance sheet date are recognized equally over aperiod of three years or the expected remaining average working lives ofemployees, whichever is lower.

Past service cost resulting from changes to defined benefit plans to the extentthe benefits are already vested is recognized immediately and the remainingunrecognized past service cost is recognized as an expense on a straight linebasis over the average period until the benefits become vested.

Segment reporting:

A segment is a distinguishable component of the Bank that is engaged inproviding products or services (business segment) or in providing products orservices within a particular economic environment (geographical segment), whichis subject to risks and reqards that are different from those of other segments.The Banks primary format of reporting is based on business segments.

1- Business Segment

Corporate FinancingIt includes underwriting, securitization, investment banking,syndications, IPO related activities (excluding investments) andsecondary private placements.

Trading and SalesIt includes fixed income, equity, foreign exchanges commodities,lending to financial institutions, repos and brokerage debt.

Retail and Consumer BankingIt includes retail lending and deposits, private lending and deposits,banking services and retail offered to its retail customers and small andmedium enterprises.

Commercial BankingIt includes project finance, export finance, trade finance, leasing,lending, guarantees and bill of exchange relating to its corporatecustomers.

2- Geographical Segment

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The Bank operates in three geographic regions being:

Pakistan

Asia Pacific (including South Asia)

Middle EastDuring the year, the Bank was admitted to the Official List of the UK Listing

Authority and to the London Stock Exchange Professional Securities Market fortrading of Global Depositary Receipts (GDRs) issued by the Bank. The GDRsconstitute an offering in the United States only to qualified institutional buyers inreliance on Rule 144A under the U.S Securities Act of 1933 and an offeringoutside the United States in reliance on Regulation S. The Bank has issued8,622,100 GDRs each representing four ordinary equity shares at an offer priceof US$17.3970 per GDR (total receipt being USD$149.999 million) Accordingly,based on an exchange rate of Rs.60.70=US$1.00 (which was the exchange rateon the date of the final offering circular relating to the GDR issue made by theBank), 34,488,400 ordinary equity shares of nominal value of Rs.10 each of theBank were issued at a premium of Rs.254 per ordinary equity share (total

premium amount being Rs.8,760.054 million).

The net proceeds from the issue of the GDRs are being utilized for generalcorporate purposes. Holders of GDRs are entitled, subject to the provisions ofthe Deposit Agreement, to receive dividend, if any and rank pari passu with otherequity shareholders in respect of dividend. However, the holder of GDR have novoting rights or other direct rights of shareholder with respect to the equity sharesunderlying such GDRs. Subject to the terms and restrictions set out in theoffering circular dated October 11, 2006, the deposits equity shares in respect ofwhich the GDRs were issued may be withdrawn from the depository facility.Upon withdrawal, the holders will rank pari passu with other equity shareholders

in respect of dividend, voting and other direct rights of shareholder. As atDecember 31, 2006, 4.900 million of the deposited equity shares had beenwithdrawn from the depository facility.

Risk Management:

The wide variety of Banks business necessitates a risk management system toidentify, measure, monitor and manage risks effectively. Banks risk managementframework is based on three pillars; risk principles, organizational structures andprudent risk measurement and monitoring processes which are closely alignedwith the activities of the Bank so as to ensure that risks are kept within an

acceptable level.

Risk Management Organization:

The bank risk management function is independent of the business areas. Basedon the State Bank of Pakistans (SBP) guidelines and Bank for InternationalSettlements frameworks, the bank has constituted a Risk ManagementCommittee (RMC), developed an elaborate risk identification measurement and

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management framework and has also reorganized risk management functionbroadly based on the following:

Setting up of separate risk areas (as detailed below)

Engaging the advisory services of an international consultant for the

overall risk management function.

The head of risk management is a member of risk management & managementcommittees of the Bank and is responsible for credit, market and operational riskmanagement activities within the Bank in close coordination with respectivebusiness areas. To ensure independence, head of risk management is directlyreporting to the RMC.

For each risk, i.e. credit, operational and market, a specific department has beenestablished with the mandate to:

Identify, measure, monitor and mitigate risk while ensuring thatrisk/reward relationship is maintained at an optimal Setting up ofseparate risk areas (as detailed below)

Ensure that the business conducted is consistent with the riskappetite of the Bank.

Formulate and Implement risk policies, procedures andmethodology n coordination with business areas.

Conduct periodic reviews to ensure that the risk are within

acceptable parameters, and

Develop & implement risk management infrastructure & systemsthat are appropriate for each area and flexible to cater riskemanating from changing banking environment.

The most important risk that Bank management assumes arespecific banking risks and risks arising from the general businessenvironment.

The Banks risk management process distinguishes among various kinds ofspecific banking risks and mainly comprises of credit risk, liquidity risk,operational risk and market risk. The policies and procedures for managing risksare outlines below:

Credit Risk:

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Credit risk makes up the largest part of the Banks risk exposures. The Bankmeasures and manages its credit risk by adopting the following policies:

Consistent standards are applied for credit decision processes.

The approval of credit limits for counter parties and the managementof individual credit exposures are subject to credit review.

Every extension of credit or material change to a credit facility (suchas tenor, collateral structure or major covenants) to counter partyrequires credit approval and independent review at the appropriatelevels.

The Bank assigns credit approval authorities to individuals accordingto their qualifications, experience and training and the managementreviews these periodically. The approval process is checked through

independent review by Risk Management Group (RMG), and post-fact by the audit function.

In addition, the below listed initiatives have been initiated by the Bank forenhancement of risk management capabilities:

Development of risk based credit MIS.

Exposure and Collateral related database is being beefed up as perBasel II requirements.

Credit Administration role being revitalized and Credit Risk Control(CRC) roll out plan being implemented.

Automation of CRC function is being planned in line with the roll outof the Banks core banking application.

Establishment of portfolio management function.

Up-dation of credit manual to provide comprehensive guidelines forcredit process and to adopt latest development in credit riskmanagement practices.

The management measures and consolidates all the Banks credit exposures toeach obligor on a global consolidated basis that applies across the Bank.

Concentration of Credit and Deposits:

Out of the total financial assets of Rs.325,641 million (2005: Rs.287,127 million)the financial assets which are subject to credit risk amounting to Rs.317,694million (2005: Rs.281,063 million). To manage credit risk the bank applies credit

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limits to its customers and obtains adequate collaterals. Investments amountingto Rs.46,953 million (2005: Rs.57,103 million) are guaranteed by theGovernment of Pakistan. In addition, an amount of Rs.21,870 million (2005:Rs.15,054 million) are held by the Bank with the State Bank of Pakistan andcentral banks of other countries.

Market Risk Management:

The bank is exposed to interest rate risk, foreign exchange risk and equity pricerisk. The bank is using in-house and vendor based solutions for calculating markto market value of its positions, and generating VaR (value at risk) and sensitivitynumbers. Besides conventional methods, the Bank is using VaR for market riskassessment of assets booked by treasury and capital market groups. Forcalculating VaR numbers, of conventional products, the Bank is using variancecovariance methodology, while for derivatives and structured products MonteCarlo simulations are used.

Further stress testing of both banking and trading books are performed in linewith SBP guidelines.

The Bank is exposed to interest rate risk both in trading and banking books.Presently the market risk reporting system is generating risk numbers ofGovernment securities held by the Banks treasury. The risk managementsystem generates daily reports based upon the marked to market value of theseassets. These reports provide risk numbers i.e. duration, PVB and VaR onindividual security basis. The system also generates summarized reports onportfolio basis. These reports are presented to the senior management for reviewon daily basis.

Foreign Exchange Risk Management:

Main objective of foreign exchange risk management is to ensure the foreignexchange exposure of the Bank lies within the defined risk appetite (10% of thepaid up capital). Daily reports are generated to evaluate the exposure in differentcurrencies. Further risk management system generates VaR and PVBP numbersfor foreign exchange portfolio to estimate the potential loss under normalconditions. Stress testing of foreign exchange portfolio is also performed andreported to senior management. All these activities are performed on daily basis.

Equity Price Risk:

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Equity price risk is managed by applying trading limit, scrip-wise and portfoliowise nominal limits. VaR numbers generation and stress testing of the equityportfolio are also performed and reported to senior management on daily basis.

Liquidity Risk:

It is the policy of the Bank to maintain adequate liquidity at all times, in allgeographical locations and for all currencies and hence to be in a position, in thenormal course of business, to meet all the obligations, to repay depositors, tofulfill commitments to lend and to meet any other commitments made. The Bankmanages liquidity risk in three stages:

Balance sheet management;

Liquidity management; and

Intraday liquidity management.

Balance sheet management:

Balance sheet management is the practice of reviewing the actual and plannedstrategic growth of business and its impact from a balance sheet integrity andsustainability perspective. As such the goal is to identify any risks arising fromstructural imbalances and concentration, and seek to alter plans in order to avoidthese developing into a liquidity problem.

Liquidity management:

Liquidity management is the day-to-day practice of ensuring that the Bank is ableto meet all its payment obligations as they fall due without having to sell assets orborrow funds at short notice at adverse market prices. While primarily focused onthe management of cash flows, the Bank maintains a portfolio of marketablesecurities that can either be sold outright or sold through a repurchaseagreement to generate cash flow for meeting liquidity requirements.

Intraday Liquidity management

Intraday Liquidity is the practice of ensuring that the Bank has sufficient cashduring the day to make payments through the local payment system. In thisrespect, the Bank maintains cash balances from which payments are made orgenerate cash balances through the receipt of payments due or from borrowingsor the outright sale or pledging of qualifying securities with the State Bank ofPakistan.

Operational Risk:

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Operational risk is defined as the risk of loss resulting from inadequate or failedinternal processes, people and systems or from external events.

The Bank has an operational risk policy approved by Board of Directors.

Operational risk is presently in state of evolution. The policy among other aspectsfocuses on measuring operational risk through establishing systems formaintaining operational loss database, identifying and monitoring key riskindicators, setting operational risk tolerance levels, etc.

The Bank is in the process of developing and documenting a detailed operationalrisk framework. The purpose of framework is to guide the implementation ofoperational risk policy. The framework aims at laying out clearly defined rolesand responsibilities of individuals/units across different functions of the Bank thatwould be involved in performing various operational risk management tasks.

AWARDS AND ACCOLADESEuromoney AwardsBest Bank Award 2008Best Bank Award 2006Best Bank Award 2005Best Bank Award 2004Best Bank Award 2003Best Bank Award 2001Best Domestic Bank Award 2000Asia Money AwardBest Domestic Commercial Bank Award 2005Best Domestic Commercial Bank Award 2004

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CHEQUE WITHDRAWL & DEPOSIT

(OUTWARD/INWARD CLEARING)

Cheque Deposit & Withdrawal through Clearing

Overview

Clearing of banking instruments like demand draft, payment order, collection and

payment of cheque, mailing transfers , telegraphic transfer, dividend warrants,

etc,. Collection and payment of cheques are known as inward and outward

clearing. In the past the clearing process is done in a way that if a cheque is

come to bank for clearing the bank collect all the cheques at specific time limit

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and after that time the bank clearing officer goes with a guard and goes to

different bank for clearing of cheque. It is quite a lengthy process and risky

process and now state bank offers this facility for the clearing of cheques through

NIFT. The NIFT system is more efficient and quick in terms of time and accuracy

as compared to the manual system of cheque clearing. NIFT is introducing

modern techniques for clearing of financial instruments by duly realizing the

future problems and prospects of the payments system in Pakistan. The

automated system, installed by NIFT, is not only quick and efficient but also

flexible to accommodate various types of instruments and expected increase in

their volumes .NIFT has installed automatic cheque-sorters that can sort 30,000

cheques per hour.

a)Inward Clearing:

Payments of cheques of our customers drawn on MCB.

b)Outward Clearing:

Collection of funds of local cheques deposited by the customer drawn on other

Banks like the cheques of MEEZAN bank , Faysal bank, Askari bank and all

these cheques have the same city and come to the branch of Samnabad for

clearing . This is known as the outward clearing.

CLEARING REGISTERThe clearing officer put all the records on the clearing register. The register

contains the columns like L.B.C. In this we register the name of the person in

whose account te amount is to be deposited. The second column contains the

ACCOUNT TITLE in this the name of the person in which the amount is to be

deposited. The next column is DRAWER we mention the name of the city for

which cheque belongs. Like Faisalabad. The next column is DRAWEE which

contains the name of the bank whose cheque is to be sent for clearing. The next

column contains the CHQUE NO. In this the instrument number is mentioned.

And next column is AMOUT and this the amount which is mentioned on cheque

and is on deposit slip which must be same is recorded. After recording all the

data the clearing officer puts the total on the ADD LIST and only cheque amounts

are mentioned on it and not seen the deposit slips. The officer also put the

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carbon paper and after that he puts the total and telly it with the amount put on

the register. And at last he put the bundle cover form and written the total amount

on it and after various stamps like clearing stamps which must be of the next day

put cheque is presented on 3rd August the clearing officer put 4th August stamp

on it and another stamp on the back after all that process he put the cheque with

bundle cover form in the bag of the NIFT. One thing also kept in mind is that

cheque have the name mentioned on it if a cheque sent for clearing and having

no name of the holder or bearer then the cheque is returned and is not cleared

and also note that that a person who us thumb impression for account is not

eligible for clearing.

Clearing process by NIFT:

The automated cheque processing system is operated by the NATIONAL

INSTITUTIONAL FACILITATION TECHNOLOGIES (NIFT), a private company

for the clearing of cheques. In this different banks and their branches will directly

approach the NIFT and send their cheques and various instruments for the

clearing purposes. In NIFT every bank has appointed a representative for the

clearing, for example MCB representatives, ALLIED bank representative etc,

have been appointed by the NIFT. At night all the representative get together and

sorted the cheques o of all the branches and then makes the clearing of

cheques. NIFT sends its representative to the branches to the banks and gives

them an INTER CITY Clearing advice. At morning the advice called

DIFFERENCE and its contains;

Transaction code: 2242

Cheques delivered by you: xxxxx

Cheques received by you: xxxxx

Difference xxxxx

If the difference is favorable then the entry is

HEAD OFFICE .. DEBIT

BRANCHCREDIT

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If the difference is unfavorable then the entry is reversed

BRANCH. DEBIT

HEAD OFFICE..CREDIT

And the evening advice is called CHEQUE RETURN advice it contains the

cheque which are return and which are dishonored due to various reasons like

bouncing of cheque( cheques returned due to insufficient funds) like cheque is

mutilated and there are many reasons by which a cheque can be returned.

If a cheque is returned the clearing officers put this cheque in the cheques

returned register and gets the initials of the cheque holder on it.

CROSSING OF CHEQUES

WHAT IS CHEQUE:

A cheque is an instrument which is used for drawing the amount from the bank it

is called Cheque.

Cheque crossing

When a cheque bears across its face two parallel lines containing the words And

Company or any other abbreviation thereof , the cheque is said to be crossed.

Crossed cheque categories

Cheque crossed specifically.

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Cheque crossed generally

Definition of General crossing:

Where a cheque bears across its face an addition of the words and

company or any abbreviation thereof, between two parallel transverse

lines, or of two parallel transverse lines simply, either with or without the

words not negotiable, that addition shall be deemed a crossing, and the

cheque shall be deemed to be crossed generally. [section 123]

(source: http://en.wikipedia.org/wiki/Crossing_of_cheques)

Crossing must be across the face of the cheque. Crossing may either be

in ink, printed or typed.

By crossing a cheque generally the banker is directed not to make

payment except through another banker and thus a person who is not

entitled to receive payment is prevented from getting the cheque

encashed at the counter of the paying bank.

1. 1 and 2 crossing on the instrument explains that payment cannot be made on

the cash counter rather the funds will be credited into the beneficiarys account

with the same bank or another bank.2. Crossing at serial number three indicates or gives direction to the paying bank

that payment has to be made:

o Through account or Bank

o To the named Payees only

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A person taking a cross cheque, crossed generally or specifically bearing in

either case the words Not Negotiable shall not have and shall not be capable of

giving a better title to the cheque than that which the person from whom he/she

took it in first instance had. Practically this crossing deprives the cheque of it two

characteristics of negotiability and transferability free from the defects and

transferability by endorsement.

Definition of Special Crossing:

Where a cheque bears across its face an addition of the name of a banker

with or without the words Not Negotiable that addition, shall be deemed

a crossing and the cheque shall be deemed to be crossed specially and to be

crossed to that banker.

Conversion of a Crossed Cheque into Open Cheque:

A crossed Cheque can be converted into an open cheque by writing, Please pay

Cash near the crossing with full signature of the drawer. The drawer can cancel

the crossing. However, the banker can cancel the special crossing.

Who can cross the cheque?

1. The drawer.

2. Holder, where the cheque is uncrossed.

3. Holder may cross a cheque especially where the cheque is crossed

generally.

4. A cheque crossed specially to one banker may be crossed specially to

another banker.

5. Where an uncrossed cheque or cheque crossed generally is sent to a

banker for collection may cross it especially to himself.

Cheque Deposit (Outward CLEARING):

a) Scrutiny of the Deposit Slip:

Deposit slips and the cheques/instruments should be properly scrutinizedbefore accepting them:o Title and Account number are mentioned.o Amount tallies with that of cheque(s).o There are no unauthorized alterations.

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o The amount, account number and the title of account in thecustomer copy are same as in the Original /pay-in-slip.o The pay-in-slip bears the signature of the depositor at the specifiedplace.o The amount in words and figures are same

b) Scrutiny of Cheque/Instruments:

Following points should be properly checked:o The cheque is not post dated or undated or stale.o There is no unauthorized alteration in the cheque.o The amount in words and figures is same.o Any endorsement and special crossing are in order.o Nothing on the cheque indicates that the depositor is not entitled toreceive the amount.o The cheque payable to a firm, company or institution should not be

accepted for credit to the account of partner, director, agent,attorney, manager or any employee.o If the payee is a Government Department / Official or a Trust, acheque should not be collected for a person other than the payee.o Cheque Crossed / Marked Payee Account Only is not deposited inanother customers account.o Order cheque being deposited in other account is properly endorsedby the Payee in favor of depositor and also signed by the depositor.o Non-Transferable instruments should not be collected for a personother than the payee.

Cash Department

There are three sub-departments of cash;

Billing Department.

Receipt Department.

Payment Department.

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Billing Department:

In this department the person receives the payment of the bills. At the end of the

day

Physical cash + stub = Balance

Physical cash means the cash in vault / cash in hand which the person receives

from the customer for the payment of the bills.

Stub means the transfer of funds which must be on the separate scroll,

At the day end it must be balance and there is no difference.

Bill Collector must kept in mind that the amount which he is receiving is

according to the payment which is within due date or I the payment is not within

due date then he receives the amount which is due after the date and this

amount includes the fine for not paying the bill within due date.

Bill collector charges Rs:8 on every bill he receives for the FESCO as a bank

services charges. And the bank charges for the FESCO collection is done

DAILY.

While on other bills like WASA, SUI GAS, PTCL, the collector charges RS:8 on

each bill but it s done at the end of the Month.

Receipt Department:

Receipt department is the department which receives cash for the depositing in

the account of the customers. In this;

ONLINE + DEPOSIT

Online

In this the cash receiver, receives a full account digit which is of 16 digits

plus CNIC copy plus bank charges.

Full digit a/c + NIC COPY + Bank Charges

The bank charges for online;

Within city.. No charges

Out of the city Rs:120

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DEPOSIT:

In this the bank officer receives the deposit slip plus the a/c no.

SLIP + A/C No.

PAYMENT DEPRTMENT

In this the officer

Online cheques (out of city cheques) + within city cheques

The bank charges for out of the city are

Current Account. Rs: 120

Saving Account. Rs: 174

If the party is presenting cheque its self then NIC copy is must and if the party

has not the copy of CNIC then the Varisys must be used.

OWN BRANCH CHEQUES:

If the party resent the cheque itself then payment made to the party and if the 3 rd

person presenting the cheque the CNIC copy is must.( above Rs: 25000)

At the end of the day after 5 O clock all three departments balance the amount

itself and after balancing the amount itself the three departments collectively

balance all together

Cash limit

The MCB kept the cash in hand for about limit to Rs: 80000 which can also

includes he prize bond amount and if the amount is excess then the get EXCESS

INSURANCE = Bank has obtained insurance from the ADAMGEE INSURANCE

and they get over-night insurance.

CASH CATAGORIES

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Cash may be re-issuable ,soiled, defective, un-sorted and the average payment

must be equal to re-issue , it should not be less and can be excess. And this all

wok is done on a CMR( cash management register).

PRIZE BOND REGISTER

In this register the prize bond which are purchased and then re-sale.

When the prize bong are purchased the entry is:

Bond.. debit

Cash..credit

And when the prize bond are sold then the reverse entry is done. Prize bond

should be write-off after 1 month period and the schedule is provided by the

STATE BANK OF PAKISTAN.

Cash Position Register

In this the officer use the formula

Ratios = Average cash in hand/ Average deposit * 100

Ratio is calculated at the end of the month and deposit average is calculated

weekly and the average cash in hand is calculated by the cash in number of days

and divided by the number of days.

Other terms and products

RUPEES TRAVELERS CHEQUE:

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In old age it was used to carry cash from one place to another without any fear of

theft. In Pakistan Rupees Travelers Cheque is first time issued by the MCB bank

in 1993. It makes a convenient way to carry cash. MCB issues RTC

denomination of Rs:10000 & Rs5000 & Rs:1000. And only this denomination is

used in Pakistan. RTC is valid for 10 years from the date of issue.

Demand Draft:

Like cheque is a customers cheque Demand Draft is the BANKERS CHEQUE.

Demand Draft is used with within the city and Demand Draft is made payable at a

specified branch of bank and at a specified centre of a bank. It is a pre-paid

negotiable instrument.

PAY ORDER:

Pay Order is also a Bankers cheque. This instrument is issued by the bank for its

full value and it is similar to the Demand Draft. Pay order are used out of the city.

In practice, these instruments are payable at the branch of issue and made

payable within the local jurisdiction.

MCB Mobile BANKING:

Now-a-days the MCB has provided the facility if a mobile banking. Customers

can get the current balance and latest promotions and mini statements on the

way to mobile.

MCB ATM CARDS:

MCB has the owner of issuing the first ATM card in Pakistan. Now MCB

has the largest ATM network in Pakistan and MCB ATM Card is accepted over

4000 ATMs nation wide.MCB issue ATM Gold Card and MCB Regular Card.

MCB ATM on Wheels

MCB also looks after the convenience of its customers. MCB gives ATM

on wheels facility to its customers and through ATM on Wheels customers of

MCB can get their amount through any other ATM outlet which is not of MCB.

Like MCB customer can get the amount from the UBL ATM machine and they

are charged very low price for this

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Other Products and Services

Online:

The largest network of over 600 online branches in the country and growing.Providing customers with 24/7 real time online transaction facilities.

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Full Day Banking:

Enjoy the convenience of extended banking hours from 9 to 5, even onSaturdays. To satisfy your banking needs at all MCB Full day Banking branches

across the country we now serve you a wide range of services throughout theday.

MCB Lockers:

The best protection for your valuables. Lockers of different capacities areavailable nationwide.

Remit Express:

International remittances with a two-way messaging facility delivered at yourdoor-step within 24 to 72 hours.

Islamic Banking:

MCB Islamic Banking provides Riba Free and Sharjah Compliant solutions tovarious customer segments in a growing number of cities. With the help ofSharjah Specialists, lawyers and Professional Commercial Bamkers, we have thebest solutions to cater to your needs-the Islamic way.

MCB Virtual International Banking:

MCB provide the convenience of banking on the internet. Whether at office,home or traveling long on to and enjoy 24-hour access to all your accounts atMCB for the largest array of services such as Inter Bank Funds Transfer, UtilityBill Payments, Mobile Top-ups and many more.

MCB Call Center

Theres no easier way to bank than the new enhanced MCB Call Center, whichblends innovation and convenience to provide you banking services that gobeyond your expectation. We make sure your banking needs are met 24/7 fromthe comfort of your very home because we at MCB, are just a call away!

Personal Loan

MCB Personal Loan is simply a clean cash facility extended for personal use. Itoffers a fixed installment loan that provides you access to cash instantly withoutany collateral. Financing available is up to 5 years for amount up to Rs.1 million.

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MCB Visa Card

A suit of Classic and Gold Credit Cards focusing primarily on providingconvenience, safety, shopping pleasure and security giving a different feel to the

world of Credit Cards through innovative features. These unique features includei-revolve, which makes the variable mark-up rate available to you upon revolvingand is the first of its kind in Pakistan. Other ad-ons include comprehensiveinsurance plans, installment plans, reward points, upfront loyalties and muchmore.

MCB Mobile Banking

Banking at your fingertips. SMS anytime to get information regarding balanceand mini statements.

MCB ATM Card

The nations largest network of over 260 ATMs and still growing. Get 24-hoursconvenience of cash withdrawal, mini-statement, utility bill payment, fundstransfer services and much more.

MCB ATM on Wheels

MCB on wheels. Now not only do you get a world class banking service but wemake sure of your convenience. Our new classy mobile ATMs ensure that youare given a service closer to you.

M NET

MNET is an electronic hub for ATM sharing plus other touch points. Membersinclude 16 local and foreign financial institutions enjoying ATM sharing andbureau services.

Smart Card

A secure instrument of payment providing Cash Free Convenience. It is morethan just an ordinary Debit Card offering customers the peace of mind throughunmatched and convenient services including easy bill payments, funds transfer,24-hours cash drawl, balance inquiry and unlimited shopping pleasure.

Business Sarmaya

MCB Business Sarmaya is a Running Finance facility against your residentialproperty. It offers Running finance up to 20 million with low mark-up and BTFfacility at competitive rates.

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Corporate Financing:

Providing access to diversified financing options, including working capital loans,term loans, trade finance services and investment banking.

Instant Financing:

Get a loan instantly at any MCB branch. Offering same day financing facilityagainst liquid collateral at competitive pricing.

Rupee Travelers Cheque:

A safe and secure way to make payments nationwide. MCB Rupee TravelersCheque, being the market leader, is the most widely accepted way to pay cashfor travel-related purposes.

Easy Bill Pay:

MCB Easy Bill Pay is an easy solution to pay your Utility and Mobile Phone bills.MCB ATM Card or MCB Smart Card holders can easily pay their bills throughMCB ATMs, MCB Virtual-Internet Banking and MCB Call Centre with securityand peace of mind.

Pyara Ghar:

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MCB Pyara Ghar is an ideal Home Finance product that lets you purchase,renovate or construct your home the way you have always wanted. Financingavailable is up to 20 years for amount up to Rs. 20 million.

Car 4 U:

MCB Car4U Auto Finance is your power move that gets you not only a car ofyour own choice but leads you to the best in life. It is affordable with competitivemark-up, flexible conditions, easy processing and above all, no hidden costs.

MCB Sabzazar:MCB Sabzazar is an agricultural financing scheme for farmers that offers twofinancing plans, MCB Shadabi Plan for short-term financial needs and MCBKhushali Plan for long-term financial requirements

Swot analysis

The over all evaluation of a companys strength, weekness,opportunities,andthreats is called SWOT analysis.

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StrengthsThe main strength of the bank lies in its services.the other fact that

contributes is approaching to each segement of society.another positiveissue that because the strength its innovation.some others are as follows

Bank reputation

Technical management skills

Customer satisfaction

Promotion effectiveness

Team based approach

Continuous improvement

Quest for quality

Employees respect and dignity

Good corporate itizenship

Weakness

Competition pressure:bank has tough competition pressure.we arehaving very well established and well reputed ompeitor in themarket having addressing the same community as we are dealingand is havig good services

Financial pressure:no doubt MCB has a lot of finance but due tocompetition pressure they have a need of finance

Opportunities

For more amelicration there is a new market.extra advertising support willenable us to improve our services. Almost every organization has thetendency to grow in size.we also have this opportunity

Threats

Weak economic conditions of Pakistan

Uregistered business concerns

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RECOMMENDATIONS

Shortage of staff:

Almost in all branches of muslim commercial bank the problem ofshortage of staff is very common. There are only few employees who are thealland end all of the whole branch resulting in burden of work. Basically the mainidea it is that whenever there is shortage of staff in any organization it alwaysresult in lot of work and also boost up the destructiveness as well becausepeople working over there feel like that they can do whatever they feel like so sreleast bothered about the rules and regulations as implemented by the head officeand mostly it resultsin corruption

Staff Is Not Adaquately Trained:Staff in almost all branches of MCB is not adequately trained with thecontemporary era. Basically MCB is from the very beginning, is pioneer of newproducts including ATMs , Mobile Banking & Online banking as well but as theydeveloped the new systems and products in order to satisfy the customer wantthey didt get their staff trained in relation with those iinnovations . MCB havingtwo staff colleges one in Lahore and one in Karachi but both make you aware ofthe systems and procedures but are not training or can say emphasizing onthese innovated products.

Online banking:

This problem is related to the previous problem as well because when thestaff is not adequately trained then how can they satisfy their customers needs,which is the basic theme or mission of MCB.When MCB started their online banking, there were only one or twobanks(foreign banks) doing this practice because of having a larger network ascompared to all other domestic banks MCB started doing this practice but notsuccessful in it because of the abovetwo problems.

Others:

A lot of productive time is wasted by the staff in unproductive pursuits andtea and lunch breaks are got voluntarily extanded and the time spent in corridors,depends on the staff will. This tendency of late must be eliminated which relectadversely on the image of the institution and has posed a serious problem.No proper allocation of duties, suitable person for suitable job.Distribution of work is not on equity basis, work has not been alloated properlysome workers have to work in late hours without any extra reward. So I suggest

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that steps should be taken to allocate the work properly. No periodic increase onsalaries of employees.

Overall Suggestions For ImprovementFrom the quantum of the profit and its financial data it can easily judged

that after privatization MCB is performing well. Its deposit are growing day by dayand so is profitability. The controlling body is responsible for the productiveperformance of the bankFollowing are my suggestion to improve the efficiency for the development of thecountry

Introduce various profitable investment schemeA big portion of the home remittance is sent by Pakistan working capital

through MCB limited As we know a big portion of this amount is wastedpurchasing of luxuries. The people motivated to save money by offering thedeposit through various investment scheme. The rateof profit should increase 1%

or 2%than the other bank and it would be profitable step for bank

Training staff:

Staff turnover particularly of trained staff result in financial and otherlosses. The amount spent by bank on employment, induction and training of anoutgoing officer constitutes to beat till another officer should ready prove hiswork. The exodus of bank officer in the past has worsened the situation

Change the nature of workMost of the bank employees are sticking to one seat with the result that

they become master of one particular job and loose their grip on other bankingoperation. In my opinion all the employees should have regular job experience allout-look towards banking. The promotion policy should be adjusted.

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Conclusion

During the internship report , I drew the following conclusion,MCB limited has implemented a SYMBOL system which promises the efficiencyand growth of the bank. MIS and computerization of branches has enhanced theefficiency of the bank. Delegation of authority, wide branch network with ATMinstallation and wide participation of employees in the decision making providesthe bank a competitive edge. The bank provides a conducive environment forcareer growth. The bank pays a too low rate of interest on deposit which inunattractive for its customers. There are too lengthy formalities and proceduresinvolved in mortgage of properties offered as collateral to the bank.

The MCB bank has made substation progree, recording strong growth in

revenues and earnings. The main derives were increase in outreach,strengthened human resources. Including changes at the senior managementlevel, enhanced product portfoloios, improved control and vigilant credit riskmanagement. Our primary focus was our customers and we worked diligentlythrough the year to increasesatisfaction and loyalty as the needs and expectationof our diversified base of customers continued to expand. A key initiative aimedat including a segment based approach to the overall businesswas thesegeration of the retail banking group into commercial and consumer bankinggroups. This expected to help the MCB bank in providing customer centricsolution in a more group generated healthy deposit and strengthened its SMElending.

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REFRENCES

//:www.mcb.com.pk

//:www.ibp.com.pk

//:www.wikipedia.com

//:www.sbp.com.

//:book of advanced accountsAhthour: sohail afzal, shukla, meags and meags

//:www.efulife.com.pk

//:www.lse.com.pk

// MCB broucher manual /annual report

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mcb internship part 1

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