Professional Documents
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Introduction
Muslim Commercial Bank is one of the leading banks of Pakistan
with a deposit base of about Rs. 280 billion and total assets of
around Rs.300 billion. Incorporated in 1947, MCB soon earned
the reputation of a solid and conservative financial institution
managed by expatriate executives. In 1974, MCB was nationalized
along with all other private sector banks. This led to deterioration
in the 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
through improving service quality, investment in technology and
people, utilizing its extensive branch network, developing a large
and stable deposit base and managing its non-performing loans
via improved risk management processes.
Vision Statement
To be the leading financial services provider, partnering with our
customers for a more prosperous and secure future.
Mission Statement
We are a team of committed professionals, providing innovative
and efficient financial solutions to create and nurture long-term
relationships with our customers. In doing so, we ensure that our
shareholders can invest in us with confidence.
Our Values
1. Integrity
We are the trustees of public funds and serve our community with
integrity. We believe in being the best at always doing the right
thing. We deliver on our responsibilities and commitments to our
customers as well as our colleagues.
2. Respect
We respect our customers values, beliefs, culture and history. We
value the equality of gender and diversity of experience and
education that our employees bring with them. We create an
environment where each individual is enabled to succeed .
3. Excellence
We take personal responsibility for our role as leaders in the
pursuit of excellence. We are a performance driven, result
oriented organization where merit is the only criterion for reward .
Our customers are at the heart of everything we do. We thrive on
the challenge of understanding their needs and aspirations, both
realized and unrealized. We make every effort to exceed customer
expectations through superior services and solutions.
5. Innovation
We encourage and reward people who challenge the status quo
and think beyond the boundaries of the conventional. Our teams
work together for the smooth and efficient implementation of
ideas and initiatives.
Departments of MCB
Accounts Department
Remittance Department
Clearing Department
Cash Department
Advances
Account Opening
Application Form
The customer would like to open his account is required to meet
with the manager or second officer, who will give him an
APPLICATION FORM.
Specimen Card
As I have already mentioned about Signature Specimen Card.
This card contains two signatures of an applicant, applicant A/c
no, A/c type, branch code, title of A/c, it will be
attached with an application form. Banker uses this card at the
time when he receives the cheque; he compares customers
signature with the signature on the cheque for avoiding fraud.
Manager has every right not to accept this contract if he is not
satisfied by the details provided by the customer.
The manager records the necessary details into this register and
allots an a/c number from this a/c opening register. This register
is maintained for each type of account and the a/c numbers are
allotted serially. After opening a saving and current account every
applicants data is entered into the computer to maintain a safe
record and application form is properly filled so that it can be
available when necessary.
Cheque Book
Cheque book is issued to the customer when. the bank accepts
the A/C opening application form and letter of thanks is received
Types Of Customers
Individual
Joint
In case of joint A/c, applicant mentions that how much person
will operate the A/c. Instruction are given for joint A/c such that
the account shall be operated by
Any one of us or survivor
In first case if one of the a/c holders died then the other can
operate the a/c individually.
Requirements
Mode of operation.
Partnership A/C
For partnership a/c, along with the application form
signature card.Other documents are also needed such as
Company Account
Letter of Thanks
For company accounts following documents are required: Copy of certificate of incorporation
Memorandum of Association
List of Directors
Copy of board resolution
Certificate of Commencement of Business
Copies of NIC of Directors
Companys Balance Sheet
Bank prepares Letter Of Thanks for the new customer. This act
promotes good will among the customer.
PayIn Slip
This slip is used for depositing the additional amount. The bank
will accept the Pakistanis notes. All cheques and other
instruments should be crossed before they are deposited for credit
into the account. There shall be no restriction on number of
withdrawals in current account. An account holder wishing to
close his account must surrender the unused cheques to the bank.
The current account is computerized, thus it generate the
statement of account for all account holders periodically.
Incidental charges of Rs.50 are beard by the account holder if its
credit balance is less than Rs.10000.
Closing of an Account
Payment of Cheques
The first work that was assigned to me was Scrutiny of
cheques. It is considered, as the simplest work in consumer
banking operations, but actually it is not that simple. The
cheques that are presented for either payment or for deposit
are the main points where most of the frauds occur. There
are few points to be noted while scrutinizing a cheque for
payment or deposit,
Date of the cheque
Signatures of drawer
Signature of Presenter
Amount in figures and words
Branch stamp
Types of Accounts
Current Account
The current account is the most common account and the most
preferred amongst business concerns. The theoretical explanation
for this would be that they can function more efficiently but since
in reality there are no restrictions on any with drawl the only
reason we could think of is that current account facilitates online
banking which saves time (which in this ultra competitive
business world the most precious resource) to a considerable
extent. In case of a current account the client does not earn any
Features
A sum of Rs. 10000/= in cash as initial deposit is required for
opening a current account and the same may be maintained as
minimum average running credit balance. No profit is paid on
credit balances held in current accounts. The bank reserves the
right to allow opening of current a/c at its description. All
deposits and withdrawal from a current a/c takes place only at the
branch where the account is being maintained. Current a/c cannot
be overdrawn, except by prior agreed agreements with the bank.
The correspondence relating to current A/Cs should be addressed
to manager of the branch where the account is being maintained.
The account holder can draw sums from his account by means of
cheque supplied to him by the bank for that particular account.
Account holder should take well care of the chequebooks issued to
them.
Saving Account
Individuals who wish to earn profit/interest on their investment
normally maintain the profit and loss sharing account but in order
to earn interest the client is required to keep his/her deposits with
the bank for some time. In theory there are some restrictions on
withdrawal of money from a Profit and Loss Sharing account but
in general banking practice there is no restriction on any with
drawl from a Profit and Loss Sharing account. The interest/profit
is paid half yearly.
manner at its sole discretion and to make use of the fund to the
best of its judgment in the banking business under the PLS
system.
Profit/Loss
The profit/loss will be credited/debited on the basis of its net
working results at the end of each half-year. Calculation of
products on PLS saving A/c will be made for each calendar month
on the lowest credit balance of an account between the close of
business on the 6th day and the last day of the month.
Term Deposits
Term deposits are fixation of certain amount of money for a
specific span of time. The instrument term deposit is like a slip
containing issuing bank name, a/c # to operate on computer, deal
#, customer name, reference #, date of issue, amount, rate
maturity date etc.
Accounts Department
Every transaction which takes place recorded in the
computer so all transactions in different departments are
forwarded to account department. Since all vouchers from
Remittances
The need of remittance is commonly felt in commercial life
particularly and in every day life general. A major function of
any banking system is the transfer of funds from one client
or one place to another. By providing this service to the
customer the bank earns a lot of income in the form of
service charges. This department deals with local currency
remittance i.e. remittance from one city to another without
actually carrying the currency. MCB uses following
Documentation
A printed application form is provided for filling in
completely and signing by the applicant. After depositing an
amount of draft and commission of the bank, duly completed
and signed by two authorized officers, then it is handed over
the applicant and credit order is dispatched to drawer
branch. Following are the pre-requisites for the processing of
DD:
Bank Serial No
No. of DD
Central No
Test Key
Pay Order
For this kind of remittance the payer must have the account in the
issuing bank. Pay order are more liquid as compared to cheques
because cheques may be dishonored while PO cant be. It is
written order issued by the bank drawn and payable on itself. It is
used for local transfer of money from one person to another
person. It is also used by the public for depositing money with
Government or Semi Government department.
DOCUMENTATION
The party who requires a pay order will get a printed
application from the bank. He will fill it and deposits the
amount and commission. The bank charges are same as on
demand draft.
Bank Serial No.
No. of PO
Documentation
Issuing Branch Name & Code
Documentation
Issuing Branch Name & Code
Beneficiary Branch Name & Code
Number of MT
Amount in words & Figure
Test key
Clearing
All the external functions of clearing are carried by NIFT
(National Institute of Facilitation Technology) while the internal
operations are performed by clearing department. It is just like
any courier service which takes the cheques of other banks and
delivers the cheques of that branch to it.
Clearing is a system by which banks exchange cheques and other
negotiable instruments drawn on each other within a specified
area and thereby securing the payment for its clients through the
clearing house. A clearing house is a general organization of the
banks at a given place, Its main purpose is offsetting the cross
obligation in the form of cheques. When there are many banks in
the country each will receive a number of cheques drawn on other
banks, deposited within for collection. A clearing house is an
organization where these cheques are brought and the mutual
claims of each bank on the other are offset and a settlement is
made by the payment of differences. The representatives off all
Advances
It is another major department of the branch. Bank provides
this facility to the people who need advance money to meet
their requirements. For getting the advances, the first step is
the preparation of credit proposal. Some principles of
lending are considered whenever financing being is made.
These principles are:
Character
Capacity
Collateral
Capital
Condition
Required Information
An assessment of his business abilities
Accurate & up-to-date financial statements
Market reports about the borrower
Party dealing with other banks
Nature and structure of borrower business
Names of proprietors, partners or Directors
Detail of companies associated with borrower business
Financial condition of borrower business
Secured Advances
Unsecured Advances
In secured advances, the bank takes any security against the
loans while in case of unsecured advance no security is taken
by the bank.
MCB divided the advances in to two major types:
Fund Based
Non Fund Based
In the fond base advances, the funds of MCB is involved and in Non Fund
based only guarantee is given by the bank.
Demand Finance
This is a type of secured loan and demand loan never allowed
without security. It is a type of long term financing. MCB also
gives loan under the head of demand finance to individuals,
industrial units commercial business etc.
Cash Finance
In this, the borrower gives a specific reason for the need of cash.
MCB gives the facility of cash credit to business. The amount is
passed through voucher and credit to the party account. Normally
0.60 paisa per thousand is charged on daily basis to customer .
Running Finance
These finances as evident by the name are given to the business to
meet their daily needs. The mark up is charged on daily balances.
This type of advances are given to trade, commerce and
manufacturing for general purpose. Normally 0.60 paisa per
thousand is charged is charged on daily basis. It is drawn through
Cheque.
Letter of Credit
Line of credit
Before issuing a letter of credit, bank takes all necessary
precautions for securing its credit. The bank first examines the
customers credit standing, the type of goods to be imported, the
market demand for the goods, the collateral offered to cover the
credit. Then it establishes the amount i.e. the line of credit.
Cash Department
In cash department both deposits and withdrawals go side by
side. This department works under the accounts department
and deals with cash deposits and payments. This department
maintains the following sheets, books, ledger of account:
Cash received voucher sheet.
Cash paid voucher sheet.
Paying-in-slip
Cheque Book
Cash balance book
Cross cutting
Drawees a/c title
Amounts in words & figures
Two signatures at the back
The cheques should not be stated as post dated. If in the
Cheque there may discrepancy regarding any of the aspects
described above the cheque is returned to the customer for
rectification. On other hand if the cheque is valid in all
respects, the cashier enters the necessary inputs in the
computer and post the entry so that account balance is
updated.
When cashier posts these entries, computer automatically
display the balance before posting the transaction amount,
balance after posting. The cashier easily and quickly see
whether the amount being withdrawn so exceed the balance
or within the balance. If the amount does exceed the balance
then it is upon the discretion of the manager to allow an
overdraft and not depending upon the customers reputation.
If he does not allow an over draft, the procedure is repeated
again as described for the mismatch of the signature Cheque
is return.
The detail of notes (currency) is written on the back side of
the Cheque. The cashier at the same time maintain the Cash
Voucher Received Record Sheet. Then once again inspect
the signature of the customer cancellation mark of checking
officer and stamp of POSTED is placed on cheque before
hand over the cash to customer.
Cash Received
For depositing the cash into customers accounts, there is
need to fill in the paying-in-slip giving the related details
of the transaction. This paying-in-slip contains the date,
a/c/no, a/c title, particulars, amount
being deposited and details of the cash. There are two
portion of the paying-in-slip. The depositor signs the one
part of the paying-in-slip one is retained by the bank to
show an acceptance of the entries made in the slip.
The different colored paying-in-slip are used for all the
types of deposits. Only the slips related to a particular
type of a/c is acceptable by the bank. For example
current paying-in-slip for current a/c and saving paying-inslips for saving a/c etc. The paying-in-slip serves as a
voucher to update to computerized transaction ledger.
The transaction ledger is only updated by paying-in-slip
and Cheque. The cashier responsible to receive both the
paying-in-slip and cash from the depositor. The cashier
check the necessary details provided I the paying-in-slip
and accounts the cash and tallies with the amount
declared in the slip. If the amount does not tally with the
cash given, the deposit is not entertained until the
customer remove the discrepancy.
On the other hand if the two amounts tally, the cashier
fills in the Cash voucher received Record Sheet and
assigns a voucher no. to both the transaction being made
in the sheet and the slip. This voucher no. starts with one
and continue by serial increments of one for each day till
the closing of the sheet, the cashier fills the voucher no,
an account, cash day till the closing of the sheet. The
cashier fills in the voucher no, an account of, cash entry
in the related type of a/c and he post his initials on both
part of the voucher. Then the cashier send both to the
accountant who verifies all the entries in the two
documents, if the entries in the two documents, if the
entries in the two documents tally with one another, the
accountant authenticates the two by singing on the two
documents and posting stamps on the slip. One part of
the slip is then returned to the customer and other is
given to the computer operator. A very important check is
that the dates mentioned into the two documents must
be the same.
The cashier posts the transaction entries in computer
ledger. This ledger contains the a/c no, a/c title, voucher
no, voucher date, transaction code, transaction amount.
After posting these entries, computer display before
posting balance and after posting. On every transaction
computer generates an output of transaction ledger. He
assigns the stamp POSTED on the voucher to show
voucher transaction entries are posted. Checking officer
receive this voucher and the compute output transaction
ledge, he manually inspects the entries of ledger and
voucher. If both are tallied, he then signs the ledger and
put a mark of cancellation on the voucher. After the
verifications from the checking officer, cashier receives
the voucher.
Cash Book Balance
Cheque
Cheque book is issued to the customer when. the bank accepts the
A/C opening application form and letter of thanks is received
book is issued to the customer when. the bank accepts the A/C
opening application form and letter of thanks is received
The closing balance of today will be the opening balance of
tomorrow. This department is one of the most important
department of the bank. All the books maintained in this
department are checked by office
Growth
EPS
Cash Dividend
Stock Dividend
(Bonus)
Right Issue
Book Value Per
Share
Deposits per share
6%
Annual Annual
Annual
Dec-07
Dec-06
24.3
22.2
12.50
7.5
Dec-05
20.9
4.25
0%
15%
20%
88
75
55
465
471
538
218,961
113,089
198,239
63,486
180,323
69,481
BalanceSheet
Advances
Investments
10%
Total Assets
Deposits
Share Capital
Reserves & Unapp.
Profit
Equity
Surplus on
revaluation Total
20%
13%
410,486
292,098
6,283
342,108
257,462
5,463
298,777
229,345
4,265
39,131
30,193
13,618
45,414
35,657
17,883
9,706
5,188
5,424
55,120
40,844
23,307
23%
31,787
25,778
17,756
74%
7,866
4,525
2,781
13%
23,921
21,253
14,975
2,960
1,015
106
168
(98)
3,879
632
1,500
3,574
812
606
480
867
5,559
6,561
6,566
351
15%
21,308
18,501
13,018
26%
6,042
15,265
6,358
12,142
4,096
8,922
12%
12%
10%
75%
77%
79%
38%
4.1%
28%
20%
13%
27%
45%
3.8%
34%
15%
12%
99%
65%
3.2%
31%
15%
4%
90%
Mark-up / return /
interest earned
Mark-up / return /
interest expensed
Net mark-up /
interest income
Provision against
non-performing
loans & adv.
Other Provision/
(reversal)
Fee, commission
Dividend income
Capital Gains
Administration
expenses etc
Profit before
taxation
Taxation
Profit after taxation
9%
Ratios
Spread
Advances to
Deposits Ratio
ROE
ROA
Tax Rate
Assets
Deposits
Equity
Recent Results
MCB Bank Limited posted profit after tax of Rs4.1b with an
earnings per share of Rs 6.55 in 1Q'08 vis-a-vis of Rs 3.7 billion
with an earnings per share of Rs 5.93 in 1Q'07, depicting a growth
of 10.3% during the period despite dismal performance of banking
sector during 1Q'08.
Net interest income of the bank grew by just 2.5% during the
period to Rs 6.1 billion as compared to Rs 6.0 billion in the
corresponding period of last year. High cost of deposits was the
main reason behind.
Swot Analysis
STRENGTHS
The strengths of MCB are as:
MCB is the first Pakistani privatized bank and because of its
quality management, marketing, innovation in products and
services is performing well in financial market.
Has established a good reputation in the banking market
Strict adherence with the banking procedures requirements,
SBPs prudential regulation requirements and
its SROs and international banking requirement as well as to
its own set policies
Strong and its attractive products
Better focus on customer services and customization
Flexibility with the changing environment
Induction of the highly qualified professionals to change
overall set up
Weaknesses
Opportunities
Greater potential and opportunities for Credit Division if
Liberal Policies being adopted.
Can grab more market share for its RTCs, remittances and
forex department through effective promotional and liberal
policies.
Inclusion of highly qualified professional can change the
whole scenario and position of the bank if they have given
the due liberty in performing their duties.
Threats
Pest Analysis
Poitical
Economic
Inflation is very high which will decrease the demand as
purchasing power is decreasing.
Staff cost is increasing as basic wage rate has increased and
inflation has compelled to will compel to increase salaries.
Operating costs are increasing due to inflation.
Interest rate is increasing so loan taking has decrerased.
Value of rupee is decreasing which is pressurizing the
economy.
Technological
MCB has computerized its most of the branches but still
From the quantum of the profit and its financial data it can easily
judged the after privatization Muslim Commercial Bank is
performing well. Its deposits are growing day-by-day and so its
profitability. The controlling body is responsible for the
productive performance of the bank.Following are my
observations and suggestion to improve the efficiency for the
development of the bank.
Increase In Profits
People can be motivated to save money by offering the deposit
through various investment schemes. The rate of profit should
increase 1% or 2 % it would be profitable step for bank.
Increase Salaries
MCB is making good profits but giving less pay to their employees
as compared to their competitors. So their salaries should be
increased.
Training
Every year some of the employees should be sent for training to
other countries and employees from other branches should be
brought here. Some more reading material should be provided the
purpose should be to educate the employees with the advance
studies in their field. The employee should be provided the
Incentive To Employees
Bank should give some more incentive to its employees in order to
remove the conflict between lower and higher officers and should
try to improve the working condition of the bank. Such system
should be designed that every employee who has some problems
with his officers can communicate to the higher management and
some steps must be taken to improve that.
Over Employed
During my internship period I felt that at some place the Muslim
Commercial Bank Limited is over employed which is causing in
expenditure. I think that the best way out for this problem is to
pen new branches.
Internship Facilities
The period of internship should be divided in to the number of
department of the Muslim Commercial Bank Ltd. The internee
should be given timetable mentioning the number of days he has
to work at different places in the bank. On the first 4 days in each
department internee should be given a lecture the officer of the
department concerned about working of the department.
that are presented for either payment or for deposit are the
main points where mostof the frauds occur.
I learned whole process of account opening of individuals
practically. I remained involved very much in practical
activities of account opening as Miss Uzma whos duty was
account opening would remain very busy as number of
customers coming for account opening and getting
information was high. So I assisted her I havent issued any
cheque book personally, but the procedure is very simple for
issuance.
I observed the process.
I filled many applications form for remittances. I
prepared remittance slips and learned to apply tests
on TT and MT.
I processed the Inward cheques for collection and
clearance, and have also prepared vouchers
Every transaction which takes place recorded in the
computer so all transactions in different departments
are forwarded to account department. The branch
where I worked Mr Azeem-ud-din Bukhari was
performing these activities. I was not allowed to use
software but I observed all the fuctions performed by
him.
Miss Maria was credit officer who explained me the
procedure of advances. Mostly work is done through
computer. I was not able to perform activities by
myself as access to software is not allowed. I
observed how the application is processed. I think it
sufficient to know the procedure.
In cash department I observed the process of
deposits, filled deposit slips, and learned how the
cash registers are maintained. In this department I