Internship Report

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Internship Report

Internship ReportMCB ( Muslim Commercial Bank)

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

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LIST OF ACRONYMS

MCBMuslim Commercial BankSBPState Bank of PakistanEBITEarning Before Interest and TaxesDDDemand DraftTTTelephonic TransferMTMail TransferRTCRupee Traveler ChequeSEVPSenior Executive Vice PresidentAVPAssistant Vice PresidentSVPSenior Vice PresidentVPVice PresidentGMGeneral ManagerHOHead Office

TABLE OF CONTENTS

CHAPTER-1 BRIEF HISTORY1.1 BRIEF HISTORY1.2 BANKING IN PAKISTAN1.3 NATIONALIZATION1.4 PRIVATIZATION1.5 AN OVERVIEW OF MCB1.6 OBJECTIVES OF MCB1.7 STRATEGIES TO ACHIEVE OBJECTIVES OF THE BANK1.8 MCB VISION & MISSION

CHAPTER-2 DIVISIONS\ DEPARTMENTS OF MCB

2.0 DIVISIONS OF MCB2.1 HUMAN RESOURCE DIVISION2.2 GENERAL SERVICE DIVISION2.3 BUSINESS DEVELOPMENT & MARKETING DIVISION2.4 FINANCE & TREASURY DIVISION2.5 INDUSTRIAL CREDIT DIVISION2.6 INTERNATIONAL DIVISION2.7 CENTRAL ACCOUNT DIVISION2.8 AUDITS AND INSPECTION DIVISION2.9 ELECTRONIC AND DATA PROCESSING DIVISION2.10 LEGAL AFFAIRS DIVISION

2.11 ISLAMIC BANKING DIVISION2.12 TRAINING DIVISION2.13 CREDIT MANAGEMENT DIVISION2.14 DEPARTMENTS OF MCB2.15 CASH DEPARTMENT2.16 CLEARING AND COLLECTION DEPARTMENT2.17 INLAND REMITTANCES

CHAPTER#3SWOT ANALYSES

3.1 STRENGTHS3.2 WEAKNESS3.3 OPPORTUNITIES3.4 THREATS

CHAPTER-4 FINDINGS AND RECOMMENDATIONS

4.1 DEPOSITS DEPARTMENT4.2 REMITTANCES DEPARTMENT4.3 CASH DEPARTMENT4.4 BILLS AND CLEARING DEPARTMENT4.5 ADVANCES DEPARTMENT4.6 FOREIGN EXCHANGE DEPARTMENT4.7 OTHER FINDINGS AND RECOMMENDATIONSBIBLIOGRAPHY

CHAPTER-1 HISTORY OF BANKING

1.1 BRIEF HISTORYConsensus on the origination of word Bank is not yet reached at. Some authors opinion is that this word is derived from the words Bancus or Banque, which mean a bench and they further relate banking business inception to Jews in Lombardy. Other authorities state that the word Bank is derived from the German word Back which means Joint Stock fund and later on due to German occupation of Italy, this word was italianated into Bank. Authors quote Babylonians (few quotes Chinese) who developed banking system as early as 2000. B.C1 A banker is described as a person transacting the business of accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdraw-able by cheque, draft order and includes any post office savings bank.

1.2 BANKING IN PAKISTAN:Banking started in Pakistan after the bold and emergent decision of formulation of SBP on July 30, 1948. Thereafter this sector has witnessed enormous growth. In 1974 banks were nationalized, in the hope that new era of growth could be achieved through it.However the process is reverse since 1991, up till now MCB, ABL, and UBL have been privatized and HBL is in the process of its privatization. On 14th August 1947, 487 branches of different banks were operating in Pakistan. By 30th June, 1948, 292 branches winded up their business in Pakistan and the remaining 195 branches restricted their banking operations to a minimum level.The only bank, which shifted its head office from Bombay to Karachi, was the Habib Bank Limited. MCB with the assistance of Quaid-e-Azam Mohammad Ali Jinnah, started operation in July 9, 1947 with an Authorized capital of Rs.3 crores. Indo-Pak subcontinent, the Bank moved to Dhaka from where it commenced its business in August 1948. And in 1956 the bank shifted its head office to Karachi, where it is still working.In 1948 Ms. Ispahanani and Mr. Abdul Hameed Adamjee purchased the bank. At that time the bank showed a historical performance and profit.

1.3 NATIONALIZATIONIn 1974 the government felt a harsh need of nationalization of banks and financial institution and the nationalization act was introduced. Under this act, MCB was the first bank, which was nationalized. In the same year Premier Bank was merged with MCB and it started work as a government bank this nationalization affected the bank badly.

1.4 PRIVATIZATIONAll the financial institutions and banks did not show good performance after nationalization, and again the government felt a big need to privatize these banks. In 1991 the bank was privatized again. The government of Pakistan transferred the management of the bank to National group, one of the leading groups in the field of business. They were sold 25% shares. Now this group has 50% of the total shares. Government has 25% shares and general public also has the same shares.

1.5 AN OVERVIEW OF MCBThe MCB was established one month before the independence in June 1947 first head quarter in Calcutta and after independence it was shifted from Calcutta to Dhaka and afterward its Head quarter was shifted from Dhaka to Karachi in 1948.Among the other 22 scheduled banks with 3525 branches network nationalized on 01st January, 1947through the nationalization of Banks Act, 1974 under the nationalization policy of the Government. MCB was also nationalized and at that time of nationalization Premier Bank was merged in M.C.B LTD in 1974.After the failure of the communism, it was realized though the world the idea of nationalization was not correct and has no any positive effects on economy. This idea developed especially in 1980 decade under which in sub-continent of Asia its importance was also realized. In Pakistan Privatization and de-regulation policy was started in 1998 under this policy the first unit privatized was M.C.B, with a view to stable the economy and to reduce the burden on national exchequer of other sick units.In 1990 this bank was announced for Privatization on the grounds that 51% shares would be for general public out of which 26% shares would be offered to a particular party, which will take administration of bank and lead by Mian Mohammad Mansha who was the first chairman of MCB LTD.

Now out of 10% shares only 14.90% shares are being held by State Bank of Pakistan and all other being held by individuals, directors and joint Stock Companies etc (Annual Report of M.C.B).

1.6 OBJECTIVES OF MCBThe main objectives of MCB are to earn Profit by investing the money of depositors, who cant utilize that money for getting required return. So the bank invests that money in the shape of advances and shares, the return or interest Charged on those advances with the depositors. Beside above-mentioned objectives the Bank serves the society by facilitating them in the shape of advances to industries, agriculturists etc. it also provides employment to people; it help in developing economy of the country. It also provides facilities in doing business with other countries.

1.7 STRATEGIES TO ACHIEVE OBJECTIVES OF THE BANKMCB Limited is a business entity and all its activities are directed towards the prime objectives, which is profit. But the only difference is that it sells intangible products i.e. the services.Now in order to achieve this important goal, the management has evolved multidimensional policies. Especially after privatization of the bank on April 1991, a very enlightened management took the charge of MCB Limited. Mr. Hussain Lawai the renowned and experienced banker assumed the office of the Chief Executive i.e. the President of the MCB.Major aspects concentrating are the following:1.Effective use of electronic media2.Enlighten Personnel PoliciesMainly the whole program was based on the following points. A) Special preference was given to MBA's and then to the experienced staff of BCCI. Ultimately the 1st batch of MBA's was hired in July 1992. The management was aware of the fact that if you offer peanuts, you will find only monkeys, therefore they offered attractive packages and thus was able to succeed in skimming cream of the market.

B) A comprehensive six months theoretical program was devised at MCB Staff Colleges, located at Karachi and Lahore for providing some reasonable knowledge to the newly hired qualified staff. The stated theoretical training program was supplemented by the practical branch training.3.Compatible PackageAfter privatization the staff salaries have been revised three times. The first time was 35%, the second was 32%, and the last one was 20%. 4.Excellent Working Environment5.Modernization of Branches6.Launching of New Products7.Decentralization of Authority 8.Effective Reward Punishment Policy. 1.8 MCB VISION & MISSIONVision StatementChallenging and Changing the Way you Bank.

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

Chapter-2 DIVISIONS /DEPARTMENTS OF MCB

2.0 Divisions of MCBFollowing are the main divisions established in the head office taking the responsibility of their respective functions under the guidance and instructions of their respective heads.

2.1 Human resource divisionAll matters related to staff as pension, provident fund medical allowances, recruitment policy and other staff matters are dealt here.

2.2 General Service divisionThis division has been created to look after and maintain banks properties. The function of this division is explained as under: Purchase or lease branches premises. Purchase/sale of furniture, fittings, banks vehicles etc. Proper maintenance of banks assets. Looking after communication system.

2.3 Business development & marketing divisionThis division is established for the promotion of the business of the bank and sets the deposit targets and then makes the schemes to achieve those targets. The functions of this division are categorized as under: Publicity department. Branches opening/closing shifting. Shares floatation/government deposits. Consideration on complaints. Utility bills collections. Hajj arrangements. New and innovative policies.

2.4 Finance & treasury divisionFinance and treasury division deals with following functions:

Inward and outward remittances are recorded. Surplus funds are utilized (to purchase the shares of other companies). Balance sheet of the bank is prepared. Public sector advances are released. The safe custody of the securities is maintained. Declaration of the rates of return on PLS Account.

2.5 Industrial credit divisionIndustrial credit division was established in 1983 with the object of providing loans for different industrial projects and to assist in economic Development of the country and also to invest money for the purpose of earning profit.

2.6 International divisionInternational division deals with the supervision of the foreign exchange function of branches. It solves the problems of the branches regarding international trade.

2.7 Central account divisionThe central accounts division is categorized by the functions as under: Payment section (purchases and procurement and fringes benefits to executives). Reconciliation. Stationery. Zakat and Usher section.

2.8 Audits and inspection divisionInspection division is established so as to detect any fraud forgery in the branches and sudden visits to branches to keep them alert and attentive during banking hours.This department is working for the improvement of auditing system and continuously searching the best possible means of inspection for effective auditing. MCB uses the both methods i.e. internal audit and external Audit.

2.9 Electronic and data processing divisionThe function of this division is to record the business of the bank with computer programming, and taking all the transactions and dealings of the bank recorded for the particular period.

2.10 Legal affairs divisionThis division deals in following matters: Handling on property documents sent to them by various circles and head office i.e. loan documents etc. Follow up, recovery cases and cases of fraud against employee. The cases against bank are dealt too. Give opinion on various accounts i.e. partnership, deceased and pension accounts. It gives opinions on all-important legal matters.

2.11 Islamic banking divisionIt is established with the aim of introducing the Islamic Banking at branches in different cities.

2.12 Training divisionThe training division is established, so as to train the newly employed staff and the promoted staff to keep them efficient on service. At Presented their two training centers providing facilities to new employees in the country which are situated in Karachi and Lahore.

2.13 Credit management divisionThis division generally looks after the credit policy of bank .It also maintains and approves the advances and loans. It sets the rate of interest over the loan for specific period. It usually receives applications from intending borrowers and submits the same application to higher authority for approval.

2.14 DEPARTMENTS OF MCBMCB is one of the largest private banks of Pakistan. It offers a well-organized structure of specialized services distributed among its various departments. This departmental segregation provides MCB with more proper and professional approach and efficient means of performing each service. Departmentalization makes the services more proficient and specialized procedures for every job are used.At each branch level the duties are divided into seven departments. There is a chief manager at the top level of each branch. He is responsible for the overall performance and working of his branch. The authority is then divided into two heads at the next level. There is a credit manager who handles the credit department operations of the branch. The other one is the operations manager who is responsible for all the rest of the departments. Each branch is divided into the following departments: Cash department Clearing and collection department Remittance department

Foreign exchange department Credit departmentThe functions of each department and their operations are explained as follows:

2.15 Cash departmentThe main function of this department is Payment and receipt. It collects and pays money to the customers, on behalf of their account, through cheques or any other negotiable instruments.There are three main functions of the cash department: Payment Clearing Receipts

2.15.1 PaymentThe cash department issues payments on request. The checks are received by the department and after their clearance cash is issued to the check-holder.The payment deals with that customer who withdraws money through cheques or any other negotiable instruments. The cashier keeps the record of all payments in the register book. At the end the payment and receipt cashier checks the balance and count the cash. They verify that both register cash and the cash in hand are balance.

2.15.2 ClearingAnother main aspect is the clearance of checks. It includes verification of proper date, amount, endorsements, such as issue stamp, clearing stamp and back-side stamp, and signature. After proper verification of checks the payments are issued. At the issuance of cash the cash is debited in the clients account.

2.15.3 ReceiptsIt is responsible for taking cash deposits from its clients who want to store or invest their surplus reserves. In the receipt section, the cashier receives money from the customers on behalf of any individual or the company. Most of the receipt goes through the accounts of the MCB.The cash receipts are done in two forms: Collection of money from customers in their accounts Collection of utility bills

2.15.4 Collection of money from the customer in their accountsThe cash is received from the customers in their accounts. At the time of cash receipt, the clients accounts are credited.Every account holder deposit money in his account, they deposit the money through the bank receive voucher, which is of specific nature i.e. it may be PLS, current or MBKS etc. So the cashier deposits the money that is received. He keeps in record the voucher no, amounts, a/c no etc and then presents to the computer department for posting.

2.15.5 Collection of utilities billsMCB also offers the facility of payment of utility bills. The customer can deposit electricity, gas, and telephone bills through the bank. The bills are received, stamped and kept in record. Then it is posted in the corresponding accounts of the bank in which the money is deposited.It also provides this convenience to private companies as well. Private companies also deposit their bills in the MCB accounts, which are similarly received, kept in record and deposited in the corresponding accounts.

2.16 Clearing and collection departmentClearing implies a system by which banks exchange cheques and other negotiable instruments drawn on each other within a specified area and thereby secure payment for their clients through the clearinghouse at specified time in an efficient way.The major operations of clearing departments are related to the check verification. This is divided as follows: Transfer of checks Clearing of checksClearing department handles check related issues. It handles the checks of different other banks such as Allied Bank, NBP etc. At the time of cash deposits, different checks from other banks also come to MCB for deposits. This is the job of clearing department to sort out checks of each bank. Then the net balance for each bank is calculated and adjusted.

The procedures for check transfer and clearance are as follows:

2.16.1 TRANSFER OF CHECKSIt deals within the inter-bank transfer of checks. Suppose a person X gives a check of MCB to another person Y who also has an account in MCB, the clearing department will handle it. The clearing department simply debits one account and credits the other one.

MCB BankTransfer checksXGives checkYX account DrY account -- Cr

2.16.2 CLEARING OF CHECKSIt also deals with the checks of other banks. Suppose an NBP account-holder gives a crosscheck for MCB. Similarly, MCB account-holders give check to people having accounts in other banks; these all banks need to clear their overall balances with each other. The clearing department does this.

NBP BankClearing checksXCross checkYMCB DepositedMCBAccount-holderNBPAccount-holderThe clearing department makes different envelops for different checks of each bank. It then sends these envelops to the clearinghouse. In the clearinghouse, representatives of different banks take the balances of all the checks and the balances are cleared. Now National Institution of Facilitation Technology (NIFT) takes the job of clearinghouse. It not only separates balances for each bank but also for each branch. The clearing department of MCB separates checks of each bank in different envelops and sends it to NIFT. After NIFT sends the checks to other banks, they send an OK report to NIFT which sends that report back to MCB. This ensures that all checks are safely deposited in the respective banks.

2.16.3 BILLS COLLECTIONThe bills collection is the key department in each branch. The objective of this department is to receive the cheques of different bank of different area. Often the cheque is drawn to the clients of another bank or account holder of the MCB and similarly the customer of another bank draw cheque to MCB account. In both cases the cheque is cleared, endorsement conformed, or takes the disbursed Guarantee. And then deposit to the corresponding department or banks or whatever the case may be.Shortly the bills are divided in the following two main categories.

Local bills collection (LBC)Country bills collection (CC)

2.17 Inland remittancesThis means transfer of funds from one branch to another within the country through following banking instrumentsDemand Drafts (DDs)Telegraphic / Telex Transfers (TTs) / Fax PressMail Transfers (MTs)Mail TransferWhen a customer requests the bank to transfer his money from this bank to any other bank or the branch of some other bank in the city, outside the city or outside the country, the first thing he had to do is to fill an application form. In which he states that I want to transfer the money from this bank to that bank by mail. If the customer is the account holder of the bank, it will debit his account and the concerned officer will fill the six different forms to make the transfer complete. The five forms used for this purpose are listed below:

2.17.1 Demand Draft (DD):Demand draft is another way of transfer of money from one bank to another bank. Unlike pay order, a form is required to be filled for the issuance of the demand draft in which necessary particulars about the beneficiary and the sender are given. The sender deposits the amount of DD plus commission and other charges on the bank counter, from where he is given a receipt and in accordance with this receipt he is issues a demand draft.

2.17.2 Telegraphic Transfer (TT):With the changing requirements of customers, MCB has introduced a faster mode of transfer of money. Like DD the sender is required to apply through a form in which he will give all the necessary details about the sender and the beneficiary. The sender deposits the amount of DD plus commission and other charges on the bank counter, from where he is given a receipt, the remittance officials send a telegram to the concerned branch and they make payment to the customer. Vouchers are sent by ordinary mail to keep the record. On TT, no excise duty is charged only commission and telegram charges are charged.

CHAPTER#3 SWOT ANALYSIS

3.1 Strengths

One of the major strengths of MCB is that it has very stable deposit base. MCB is largest private bank in Pakistan with around 1000 branches, which cover almost every part of Pakistan. The bank enjoys competitive advantage over other banks in Pakistan. The bank enjoys competitive profitability in the industry. MCB has captured majority of potential customers in Pakistan. MCB has the accounts of big organizations like OGDCL, PTCL, EFU, PTC etc. MCB is Successive and Market oriented. MCB investing huge sums on HR development and training. Customer default rate is lower as compared to other banks. MCB has the largest ATM network in the country. Meeting the challenges of latest Technology by introducing Smart card remit express, mobile banking etc. Laying foundation on sound basis; recently for this they met with the ORACLE representative of South Asia, to purchase ORACLE software for their banking system and transform its environment in such a way so as to come in line with those of other international banks. Establishment of TFC: Centralized import and export center of MCB in one special circle taking this extensive burden from branches, whereas no other bank has done this so far. Maintaining an Excessive Earning Acceleration, this is expected to result in substantial value enhancement for investors. EUROMONEY Awards of Best Bank in Pakistan for best bank in Pakistan, plus the accolade of best domestic band in Pakistan. Extensive Management Restructuring to translate into bottom line improvement for going forward. This includes induction of professionals in strategic business areas, shedding surplus staff and shutting down loss making low potential branches. From 1996 onwards some 350 Branches were closed down & releasing staff of approx 4600 with golden handshake. Larger Market Share: MCB accounts for 10.4% of total assets, 10.0% of deposits and 11% of loans in the banking system. So it has a clear edge over smaller banks. Striving for income: New Team after massive restructuring, is looking to strive for greater operating income, as is evident from the figure (15) that since 1996 bank has been able to gain some net positive Profit After Tax amount consistently and will be aiming to do so in near future. Perhaps the only large bank in Pakistan to have a formal electronic banking research cell that is exploring the technical requirements and market size Potential of Internet Banking.

3.2 Weakness

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

Extensive Management Restructuring though beneficial has some negative impacts on the existing performance of work. Such large scale restructuring results in too much load on single person plus the fear of being fired from the job at any moment. Slight neglect as part of human resource management staff. Initially employees were given a quota of 2 weeks vacation per year or its equivalent amount in Rs. as a Recreational Activities have been withdrawn. Such program was essential to keep the employees in high spirit giving that extra bit of time for them to personal life. It is extremely condemnable that sometime a circular is kept clandestine and not disclose to the staff by the branch managers which is in line with their needs due to some inexplicit ulterior motives. Lack of Job Rotation: Job rotation has not been given due consideration and employees get bored due to monotony. No Conspicuous rise in Staff Salary: As part of Human of resource Management apart from lack of other employees benefit funds, nothing is done to enhance the staff salary to be used as basic motivational factors in an effort to cut down the administrative cost by the management. Prevailing Bias and Prejudice: Senior Junior Consideration may result in tussle in future. Therefore it is extremely necessary to develop such amicable environment that builds up harmony.

3.3 Opportunities

Leasing sector is growing in Pakistan for the last two to three years which provides opportunity to MCB to go ahead in this area as well. MCB is providing Consumer Finances at comparatively lower rates which paves a way to grab more customers Financing to small/medium cottage industries will definitely increase its advances and profitability as well. Islamic Trading Based Banking can enhance the business of the bank. Targeting of Hundi/Hawalla through networking and IT potential of MCB. Profitability is expected to strengthen despite decline in interest rate. The drop in interest rates is expected to spur the private sector credit growth in an effort to kick-start the dormant economy serving as impetus for productivity activity in economy; which is likely to compensate for lower interest margins that result from less than proportionate drop in deposit rates. Banking sector fundamentals improving; on the back of economic stabilization, improved monetary and foreign exchange reserves management by the central bank and drive against loan defaulters. MCB with its large branch network and hence huge, diversified clientele is placed to benefit from lower NPLs, a new dynamic and cost conscious management, and greater credit demand on the back of governments conscious initiative towards a deflationary monetary policy. Only Operationally efficient banks will benefit from Low Interest Rates: The declining interest rate environment would lower MCBs cost of equity (COE), thus having a positive impact on its ROIE COE spread, which in turn allows MCB to show growth in value creation. More Focus on consumer banking activities. Strong earnings momentum expected in future, through focus on loan book growth, efficient utilization of idle cash and declining NPL. Deposit expected to grow in future: The Governments decision to lower interest rates has challenged the banking sector, including MCB, on the deposit mobilization front. At the same, however, MCBs large branch network coupled with its excellent market standing compared with other banks offering similar returns on deposits is expected to retain even bolster its deposit base in future at the expense of less efficient public Sector competitors.

3.4 Threats

Other private commercial bank with sound profitability is also a threat to MCB e.g. UBL, Alfalah, HBL etc. For the last of many years, Pakistan is facing economic and political instability which is a big threat. Afghan war and Iraq war has a deep effect on the economy of Pakistan, which may affect MCB. Foreign banks are flourishing in field of consumer financing. People dont prefer banking culture. They mostly prefer cash transactions. MCB since 1996 is performing well in all most every department at national level particularly. However if there is some competition that MCB may expect to face come from the four nationalized commercial banks, which compete with the MCB in terms of deposit mobilization at retail level. Other banks working on the same phenomena seeking for proficient and efficient staff is expected to enamor qualified and experienced employees of organization by offering some brilliant incentives in the form of high salary and other benevolent funds and this thing may also attract existing efficient staff of MCB. To some extent they seem to be effective in their efforts.

Chapter-4FINDINGS AND RECOMMENDATIONS

Recommendations are based on the previous sections of a report and are suggestions that the analyst feels are required to be implemented in order to improve further the standing and position of the firm in the financial world. These are thus based on the findings and shortcomings noted in an organization while working with it and then writing on it. Opinions of various capable individuals are sought who through their real life experiences and deep insight are better able to judge whether the course of action adopted by the organization is going to prove fruitful or does it require further improvement in the form of changes in its strategies.Following are the findings and recommendations for various Departments that were felt are required while consulting the staff members of Zafarwal Branch.

4.1 Deposits DepartmentThe comparative analyses reveal that MCB has the lowest share of Deposits out of the total in the market. Since deposits are the lifeblood of a bank, it should attract more customers and expand its deposit base in the following manner

4.1.1 Simplification of proceduresThe procedure of opening an account should be simplified. The account opening form should be self-explanatory and include translations in Urdu for those customers who are not well read, since the fact cannot be ignored that many people do not have a good understanding of English.

4.1.2 No Duplication of activitiesOnce the account opening form is filled there should be no reason to submit a written application for opening an account, since it not only is a wasteful and time consuming exercise on the part of the customer but also makes filing lengthy.

4.1.3 Incentives for depositorsThose who deposit large amounts of money or are old customers of the bank should be given free credit lines upto a certain limit. Besides, financial advice should be provided to customers in case there is a change in the market trend before they seek for it.

4.1.4 Integrated marketing approachAll the officers in Deposits Department should be involved in marketing and not just opening accounts and maintaining their records. This can be done through improving their personnel relations skills and applying the Uni-Service concept of visiting the potential customers at their offices and homes.

4.1.5 Performance appraisalMCB should follow the performance evaluation policy strictly and award those who bring in deposits and help it increase its market share. Unfortunately, this has been stated in the banks policy but is not being implemented.

4.2 Remittances DepartmentThe Remittances Department at the Branch is divided into Inland Remittances and Foreign Remittances.Both these are dealt by separate officers and involve using specific stationary and procedures. The following recommendations are made for this very important Department of the bank

4.2.1 Organizing the departmentThe Department is spread over the entire bank with no specific person or desk for the purpose. Usually drafts and telegraphic transfers are made in the cash counter that results in hassle for the other customers. A senior officer detached from the other officers Performing inland remittance transactions handles the foreign remittances. It would be better for them to sit together so that they can benefit from his experience and know how.

4.2.2 Centralized money gram servicesThe customers receiving funds from abroad have to wait quite long in order to get their money as the branch sends the application form through fax to the City Branch from where it is confirmed whether the amount has been credited to the Zafarwal Branch or not. This confirmation takes long at times and there is always a fear of the bank losing its goodwill in case of lengthy delays. The service should thus be decentralized and the Hub Branch having the authority of directly confirming the amount.

4.3 Cash DepartmentThe following recommendations are made for the Cash Department.

4.3.1 Expansion of the cash counterThe Cash Department at the Branch needs special attention in the sense that the cash counter is small and becomes crowded when there are more than five to six customers to attend. Customers purchase drafts and other instruments from the very same counter where utility bills are collected and cash is deposited and withdrawn. Hence, if a new counter cannot be built due to certain limitations the utility bills should be collected through a window so that the regular customers do not face any problems.

4.3.2 Extended timings for cash In order for the bank to progress and compete with the others in the market, it should extend the time for accepting and withdrawing cash. The customers face great hardship especially when they come from far off places and find that the cash counter is closed for the daily transactions.

4.4 Bills and Clearing Department The following suggestions are made for this Department keeping in view the problems noted in it.4.4.1 Career developmentIt has been noted that the officers taking bills for clearing do not involve themselves much with the other operations of the bank and thus remain on the very same post and seat throughout their banking career. This is against the modern day policies of organizations giving their employees conducive, rewarding and equal opportunities of prospering and growing with it. Thus, the Human Resource Department at the Head Office should prepare a plan that shows the future growth potential of the employees based on their job performance and evaluation and make it known to all.

4.4.2 Job rotation There should be job rotation of employees especially in this department as it was felt that the employees here know quite less as compared to the others. This will enhance their capabilities and help them break the monotony making them find their work more interesting.

4.4.3 Personality nourishmentThe clearing officer has less to do with the operations of the bank and thus does not sit at a front desk of the branch. As a result, he becomes usually casual and relaxed about his apparel. This leaves a bad impression of the bank when he leaves the premises. A dress code should be implemented and observed by all the employees in order to build a reputation of the bank.

4.5 Advances DepartmentThere were certain drawbacks in the application and processing for the loan requests that were observed at the branch. The findings and the recommendations are as under

4.5.1 Proper documentationIf valid documents are not obtained before sanctioning the loan limit, it becomes irrecoverable in case of default by the borrower. It has been noted that at times the related officers oblige the customer by letting him submit the documents later and approving the limit by getting the Disbursement Authorization Certificate from the Credit Committee. It proves to be very time and resource consuming afterwards tracing the borrower to bring in the documents. Therefore, correct and complete documents should be attained before the amount is sanctioned and no leniency shown in any case.

4.5.2 Computerized recordAll the sanctioned cases should have record on the computer as it is easy to access and does not involve the hassles of maintaining and retrieving large and old files. For this purpose, training programs should be organized for the Relationship Managers to enable them to have a basic computer know how. Through this, they would also be able to assess the financial position of the prospective borrower in minutes by using related financial software.

4.5.3 Verification of securityPhysical verification of the security tendered is a must rather than to merely rely on the documents. It had been noted that where the property to be hypothecated/ mortgaged lay in remote areas such as the Gadoon Industrial Estate regular physical visits are avoided by the officers

4.6 Foreign Exchange DepartmentThere various shortcomings that were noted in this Department and hence the following recommendations

4.6.1 Centralization of the DepartmentAll foreign trade related transactions are routed to the Foreign Exchange Department in Islamabad, which causes unnecessary delay to the customer. In case of haste or pressure from the importer/ exporter or some other reason the documents sent to the Forex Department are not complete or correct the case is sent back to the Zafarwal Branch and it takes yet longer to process it.

4.7 Other Findings and RecommendationsThe following recommendations are for the bank as a whole

4.7.1 Establishment of marketing department at the hub branchNowadays no organization can survive in this tough competitive world without having able to market itself and its products. Keeping this in mind a Marketing Department should be introduced in all the Hub branches that would easily implement the marketing policies of the Head Office.

4.7.2 Development of managerial leadershipGood managerial skills make positive contribution towards higher effective results. MCB should focus on the effective utilization of its human resource by applying the modern style of management. This can only be possible if political interferences are discouraged especially when hiring and placing personnel and the recruitment policies are changed to give preference to M.B.A. and M. Com. Students.

4.7.3 Tests for promotionsA sizeable portion of the officers at MCB is promoted without conducting any tests and interviews. This results in undeserving people sitting on the managerial posts and steering the organization away from its goals and objectives in the long run.

4.7.4 Training for credit managementSpecial trainings on credit management should be imparted to the staff dealing in financing activities of the bank. This is very important in light of current loan default scenario in the economy.

4.7.5 Delegation of powersDelegating powers to the Department in-charges up to the greater possible extent will most certainly reduce the workload on the managers and they would be able to perform well by taking quick remedial actions where necessary. Besides, the spare time will be spent dealing with matters of more important nature.

4.7.6 Research and development departmentA Research and Development Department in MCB will help it to adopt new procedures and modern techniques that will help the bank to compete with the others. An R&DD should be maintained at all the Hub Branches that would define the target market For the bank in that particular area and through its findings suggest measures to improve the performance of branches there.

BIBLIOGRAPHY 1. Siddiqui A.H. (1983 P.nos. 16-22) Practice & Law of banking in Pakistan. 2. Meenai S.A (1984) Money & Banking.3. Prof. Dr. Khawaja Amjad Saeed (Financial Institution in Pakistan) 4. Koontz. (Management. 8" edition page: 8) 5. Brochures/Leaflets (n.d) 6. Accounts opening forms of MCB.7. Donnelley, Gibson, Ivanceivich (Fundamentals of Management) Briefings by head of each division department & other officer of MCB

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