Acknowledgement

Person is not a perfect in all the contexts of his life, He has a limited mind and mind thinking approaches. It is the guidance from Almighty Allah that shows the man light in the darkness and the person find his way in the light. Without this helping light, person is nothing but a helpless creation. The teaching of the Holy Prophet Muhammad (PBUH) were also the continuous source of guidance for me especially his order of getting knowledge and fulfilling once duty honestly was key motivation force for me. With prayers of my parents and support of my teachers it became possible to formulate this report. I pay high regards to them.

I am also thankful to all my friends and class fellows who helped me and provided me support to complete this hard task.

Executive Summary

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch. The Nishat Group bought the majority shares of the bank and so got the rights to control the bank's operations. Since the privatization of the bank, MCB has implement different policies to make it one of the best banks of Pakistan, which included introducing new products and services and increase its operations by opening new branches in Pakistan. I did my six weeks internship at MCB Iqbal Nagar, and worked in account opening department, accounts department, Customer Service department. Some of the work that I did in these departments included collecting cheques, filling account opening forms, activity checking and stop payments and closing of accounts. Although there were no such big problems found in the working of MCB, there were some problems in training of the employees, incentive schemes and product innovation. Some of the recommendations include workshops for employees, job rotation, teams work to find innovative products and scholarship programs for employees. Lastly MCB has seen a rapid growth in its activities by introducing a range of products and services and showing its presence in the country by opening new branches and in future should keep this momentum and always strive to become the best.

A Brief History of Banks

The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank. This history of banking is traced to as early as 2000 B.C. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths. They used to keep strong safes for storing the money and valuables of the people. The persons who had surplus money found it safe and convenient of deposit their valuables with them. The first stage in the development of modern banking, thus, was the accepting of deposits of cash from those persons who had surplus money with them. The goldsmiths used to issue receipts for the money deposited with them. These receipts began to pass from hand to hand in settlement of transactions because people had confidence in the integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted in payment of debts then the receipts were drawn in such a way that it entitled any holder to claim the specified amount of money from goldsmiths. A depositor who is to make the payments may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank notes. The second stage in the development of banking thus was the issue of bank notes. The goldsmiths soon discovered that all the people who had deposited money with them do not come to withdraw their funds in cash. They found that only a few persons presented the receipts for encashment during a given period of time. They also found that most of the money deposited with them was lying idle.

At the same time; they found that they were being constantly requested for loan on good security. They thought it profitable to lend at least some of the money deposited with them to the needy persons. This proved quite a profitable business for the_ goldsmiths. They instead of charging safe keeping charges from the depositors began to give them interest on the money deposited with them. This was the third stage in the development of banking.

Banking Sector In Pakistan

Our financial sector evolved very differently from banks in the developed world. For nearly a year after partition, Pakistan had no central bank. Habib Bank established in 1941 filled this gap initially until the State Bank of Pakistan (SBP) was set up in 1948 under quasi-government ownership. The role of domestic banks was particularly limited at the time accounting for only 25 of the total 195 bank branches in the country. Therefore the SBP was initially mandated to develop commercial banking channels and maintain monetary stability so trade and commerce could flourish in the newly-created state. Subsequently Habib Bank Allied Bank and National Bank were amongst the first to start operations with strong support from the central bank. Commercial banking grew favourably in Pakistan until 1974. Under the nationalisation policy implemented by Zulfikar Ali Bhuttos government thirteen banks were brought under full government control and consolidated into six nationalised banks. The Pakistan Banking Council was set up to monitor nationalised banks marginalising the SBPs role as a regulator. These measures were meant to improve lending to prioritised industries. However while directed lending was viewed favourably at the time little can be said of the longterm gains that have been achieved. By 1991 the Bank Nationalisation Act was amended and 23 banks were established of which ten were domestically licensed. Muslim Commercial Bank was privatised in 1991 and the majority ownership of Allied Bank was transferred to its management by 1993. By 1997 there were still four major state-owned banks but they now faced competition from 21 domestic banks and 27 foreign banks. More importantly administered interest rates were streamlined bank-wise credit ceilings removed and a system of auctioning government securities was established forcing the government to borrow at market determined rates. Beyond by the spirit of liberalisation the sectors landscape has changed significantly. By 2010 there were five public commercial banks 25 domestic private banks six foreign banks and four specialised banks. There are now 9,348 bank branches spread throughout the country creating to the needs of some 28 million deposit account-holders.