MCB Bank Limited Nishter Chowk Branch Multan

Internship Report
Binte Zainab BT-08-17

Submitted to Mehreen Khalil [19-09-2011]

Institute of Management Sciences BZ University Multan

Internship Report
TABLE OF CONTENTS Preface... 2 Acknowledgement..3 Introduction of MCB Bank Limited..4 History.7 Corporate information..8 Organogram....9 Branch network ..10 Vision....11 Mission..11 Strategic Objective...12 Values.12 Objective of MCB..13 Awards...16 Product Line17 Fields of activities of MCB......,... 24 Departments of MCB ......25 Cash department26 Deposit account...27 Account opening ,.29 Clearing department....31 Remittances department...34 Advances department...38 Foreign exchange department..42 ATM network...49 Financial Statement Analysis52 PEST Analysis and Environmental Scan..57 SWOT Analysis OF MCB...59 Internship Schedule.61 Recommendations62 Conclusions..63

MCB Bank Limited Nishter Chowk Branch Multan

Internship Report

All praise is for Allah, The Lord of the Universe. The Most Beneficial, the Most Merciful. The Master of The Day Of Judgment. (Al-Fatiha; verse: 1-4)
.

PREFACE
MCB Bank Limited Nishter Chowk Branch Multan

Internship Report

Banking sector owes a pivotal importance in the economy of any country through its functions. This is the deep seated motivator that geared up me to join any bank for internship. Moreover, the practice and familiarity learned during this tenure would also attest very helpful and alleviating in the awaiting proficient life. This report is an upshot of my six weeks internship in MCB Bank Nishter Chowk. MCB limited posses an imperative and historical importance in the banking sector of Pakistan. It always remains the center of hustles in business activities. Although, a derisory period of six weeks is not enough to learn the complex operations of the bank yet I made industrious efforts to converse them comprehensively in this report. Particularly, I have remunerated more accents on study of corporate banking at MCB. I have made maximum venture to elaborate this report with the material read, listened and observed. I have strong belief that this report will guide and ease the readers to understand the operations of banking system.

ACKNOWLEDGMENTS
MCB Bank Limited Nishter Chowk Branch Multan

Internship Report
I am very gratifying to Almighty Allah who permitted me to be trained in a real world organization, MCB, as well as to complete this report in a very limited time. My thanks are also due to the young, dynamic, congenial, and qualified staff of MCB Branch, Nishter Chowk Multan. Who never let me bog down in different situations related to my internship, without their humble help, it would have been difficult for me to achieve optimum from this internship.

I cannot forget to pay my special thanks to Mr. Ahmad Waqas, Senior Audit Manager, MCB Circle Office Multan, who managed the internship permission for me from the Head Office of MCB Lahore to depute my internship in Nishter Chowk Branch, Multan.

MCB Bank Limited Nishter Chowk Branch Multan

Internship Report

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

Development of Modern Banking

In 1918 came into being eleven clearing banks of today. The effect of this historical development of banking in England has been fairly wide. First, emergence of a small number of large banks with wide network of branches. Second, increase in the popularity of bank accounts and a large-scale use of cheques. In 1946, the labour government nationalised the bank of England and transferred the existing stock to the nominee of British treasury. In 1955, the British Banks made a departure from traditional banking by undertaking hirepurchase finance for companies buying industrial plants and machinery and took interest on hire-purchase finance.

MCB Bank Limited Nishter Chowk Branch Multan

Internship Report
Banking In Pakistan
At the time of independence, there were 631 offices of scheduled banks in Pakistan, of which 487 were located in West Pakistan alone. As a new country without resources it was very difficult for Pakistan to run its own banking system immediately. Therefore, the expert committee recommended that the Reserve Bank of India should continue to function in Pakistan until 30th September 1948, so that problems of time and demand liability, coinage currencies, exchange etc. be settled between India and Pakistan. The nonMuslims started transferring their funds and accounts to India. By the end of June 1948 the number of officers of scheduled banks in Pakistan declined from 631 to 225. There were 19 foreign banks with the status of small branch offices that were engaged solely in export of crop from Pakistan, while there were only two Pakistani institutions, Habib Bank of Pakistan and the Australasia Bank. The customers of the bank are not satisfied with the uncertain condition of banking. Similarly the Reserve Bank of India was not in the favour of Govt. of Pakistan. The Govt. of Pakistan decided to establish a full-fledge central bank. Consequently the Governor-general of Pakistan Quaid-I-Azam inaugurated the State Bank of Pakistan on July 1, 1948. Thus a landmark was made in the history of banking when the state bank of Pakistan assumed full control of banking and currency in Pakistan. The banking structure in Pakistan comprises of the following types. 1) State Bank of Pakistan. 2) Commercial Bank of Pakistan. 3) Saving banks. 4) Co-operative banks 5) Specialized credit institutions. Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all over the country and in some foreign countries through a
MCB Bank Limited Nishter Chowk Branch Multan

Internship Report
network of branches. banks: 1) National Bank of Pakistan 2) MCB Bank Limited limited 3) Habib Bank Limited 4) United Bank Limited 5) Allied Bank of Pakistan The state bank of Pakistan is the Central bank of the country and was established on July 1, 1948.The separation of East Pakistan and its repercussion in the form of economic depression has caused a lot of difficulties to the banking system in Pakistan. The network of bank branches now covers a very large segment of national economy. The numbers of branches have increased appreciably and there is now on branch of bank for every 3000 heads of population approximately. There is done reasonable growth in deposits from the establishment of Pakistan. Besides this growth, specialised credit and financial institutions have also developed over the years. The Government of Pakistan in the late 90s introducing the need for the privatisation of state owned banks and companies. The private sector has accepted the challenge and most of the banks are privatised today. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit. All these commercial banks were nationalized in

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

MCB Bank Limited Nishter Chowk Branch Multan

Internship Report

MCB BANK LIMITED

History of MCB Bank Limited
MCB Bank Limited (MCB) unfolds 64 years of growth. MCB is not an overnight success story. The bank started corporate life in Calcutta on July 9, 1947. After the partition of the Indo-Pak Subcontinent, the bank moved to Dhaka from where it commenced business in August 1948. In 1956, the Bank transferred its registered office to Karachi, where the Head Office is presently located. Thus, the bank inherits a 64-year legacy of trust in its customers and the citizens of Pakistan.

Nationalization
In January 1974, the Government of Pakistan nationalized MCB following the banks (Nationalization) Act 1947, Premier Bank Limited merged with MCB.

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

Corporate Information
MCB Bank Limited Nishter Chowk Branch Multan

Internship Report
Board of Directors
Mian Mohammad Mansha Chairman (Non-Executive Director) S.M. Muneer Vice Chairman (Non-Executive Director) Tariq Rafi (Non-Executive Director) Shahzad Saleem (Non-Executive Director) Sarmad Amin (Non-Executive Director) Dr. Muhammad Yaqub (Non-Executive Director) Dato Mohammed Hussein (Non-Executive Director) Mian Raza Mansha (Non-Executive Director) Aftab Ahmad Khan (Non-Executive Director) Mian Umer Mansha (Non-Executive Director) Muhammad Ali Zeb (Non-Executive Director) Dato Seri Ismail Shahudin (Non-Executive Director) M.U.A. Usmani President & Chief Executive Officer (Executive Director) Audit Committee Tariq Rafi Chairman (Non-Executive Director) Dr. Muhammad Yaqub (Non-Executive Director) Dato Mohammed Hussein (Non-Executive Director) Aftab Ahmad Khan (Non-Executive Director) Muhammad Ali Zeb (Non-Executive Director)

Chief Financial Officer

MCB Bank Limited Nishter Chowk Branch Multan

10

Internship Report

Salman Zafar Siddiqi Company Secretary Abdus S. Sami

Auditors

KPMG Taseer Hadi & Co. Chartered Accountants Legal Advisors Khalid Anwer & Co. Advocates & Legal Consultants

MCB Bank Limited Nishter Chowk Branch Multan

11

Internship Report

MCB Bank Limited Nishter Chowk Branch Multan

12

Internship Report

PROVINCE WISE BRANCH NETWORK Province Punjab Sindh Khyber Pakhtunkhwa Balochistan Azad J. Kashmir Domestic Total Overseas Export Processing Zone Grand Total Branche s 700 251 110 40 24 1125 6 1 1132 Sub Branches 9 4 1 14 14 Total 709 255 111 40 24 1139 6 1 1146

Vision
MCB Bank Limited Nishter Chowk Branch Multan

13

Internship Report

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

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

Strategic Objectives
MCB Bank Limited Nishter Chowk Branch Multan

14

Internship Report
Delivering remarkable returns to stakeholders, sustainable performance, exceeding market and shareholder expectations. Providing value added services through operational expansion, geography and upgraded systems. Building a corporate culture of equality, trust and team spirit as we remain dedicated to be a socially responsible organization.

Values
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.

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.

Excellence
We take personal responsibility for our role as leaders in pursuit of excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward.

Customer Centricity
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.

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.

Objectives of MCB
The following are the objectives of MCB Bank Limited Limited.
MCB Bank Limited Nishter Chowk Branch Multan

15

Internship Report

Creating and managing values.

The first objective of MCB Bank Limited Limited is to create and mange the values, which is one of the back bone of the objectives of any well organized and managed organization.

Human Capital.
The second objective of MCB Bank Limited is to take care of the Human capital which is a necessary thing for the development and prosperity of any well established organization.

Best Place to Work.

The third objective of MCB Bank Limited Limited is to make it a place which is much feasible and comfortable for employees of the bank. The MCB is always conscious in developing such place where employees of the bank feel easiness.

Technology.
The forth objective of MCB Bank Limited Limited is to bring new and latest technology in the operations of the bank. At MCB, technology has a direct relation with your needs; it is a means for creating value and convenience for the customer. Over the last few years MCB has invested heavily into strengthening its technology backbone. Today it is leading the way in banking technology and setting new standards for the banking industry; penetrating into the local market, listening to the needs of the people and educating them of simple financial products and services that create both value and convenience. MCBs strength lies in providing a technological base at the grass roots level of the society with a challenge to educate and assimilate such systems across vast cultural and economic backgrounds. With over 768 automated branches, 243 online branches, over 151 MCB ATMs in 27 cities nationwide and a network of over 16 banks on the MNET ATM switch, MCB continuously innovates new products and services that harness technology for the customers benefit.

Understanding & Relationship.

The fifth and very important objective of MCB Bank Limited is to create such an environment which is suitable for creating understanding and relationship between the employees, thus going towards the way of development and
MCB Bank Limited Nishter Chowk Branch Multan

16

Internship Report
prosperity. Over the years, MCB has fostered strong bonds with its customers. Understands them; their needs. They feel comfortable with MCB; its their bank; it responds to them; listens to them; partners with them; grows with them. At MCB, banking is all about being there for people, making a home in their heartscontinuously building relationships on mutual trust and confidence. We understand that relationships are about expectations-our products and services are based on your customers, expectations. Be it financing for personal or business related needs, funds transfer and trade related facilities or need for different types of deposit accounts, MCB offers you a variety of products and services customized to satisfy your individual needs.

Understanding convenience.
The next objective of MCB Bank Limited is to make understanding a convenient thing for the whole environment of the bank, for the purpose of boosting up its values and prosperity in such a competitive environment. Convenience is what the customer is looking for; and this is what we at MCB are continuously striving to provide. Whether it is the 24 hours cash convenience of our ATM network or the easy availability of financing requirements or simple opening of account, MCB has tailored its products and services to make your life easier. MCB knows the particular needs of its diverse customer base d continuously develop products and services that fulfill these needs.

Understanding reliability.
The last but not least objective of MCB Bank Limited Limited is to make an environment which have an understanding of reliability in the whole structure of the bank. With a strong financial base, a promising team and the right resources, MCB has proved to be a reliable partner indeed. MCB understands the special needs of the business, trading and agricultural sectors. Strategically located branches in small towns and cities provide warm services and advice to the small businessmen and local traders. MCB speaks their language; it understands their needs and provides tangible results. By responding in a timely manner with a flexible approach, MCB provides its clients with the reliable financial service and support they require to successfully achieve their business objectives. With a solid foundation of over 50 years in Pakistan and having recently completed 10 successful years of privatization, MCB is strongly positioned to lead the banking sector in the new millennium. You can feel safe in our hands.

MCB Bank Limited Nishter Chowk Branch Multan

17

Internship Report

Awards:
2010 The Asian Banker: Strongest Bank in Pakistan 2010 The Asian Banker: Leadership Achievement Award 2010 MMT: Best Bank Led MMT Service

MCB Bank Limited Nishter Chowk Branch Multan

18

Internship Report
2010 ICAP / ICMAP: BCR Award 2009-Banking Sector 2010 SAFA: Certificate of Merit Award 2009 Asiamoney: Best Domestic Bank in Pakistan 2009 The Asset: Best Domestic Bank in Pakistan 2008 Euromoney : Best Bank in Asia 2008 Euromoney: Best Bank in Pakistan 2008 Asiamoney: Best Domestic Bank in Pakistan 2006 Asiamoney: Best Domestic Bank in Pakistan 2006 Euromoney: Best Bank in Pakistan 2005 Asiamoney: Best Domestic Bank in Pakistan 2005 Euromoney: Best Bank in Pakistan 2004 Euromoney: Best Bank in Pakistan 2004 Asiamoney: Best Domestic Bank in Pakistan 2003 Euromoney: Best Bank in Pakistan 2001 Euromoney: Best Bank in Pakistan 2000 Euromoney: Best Bank in Pakistan

PRODUCTS LINE
Current Account

MCB Bank Limited Nishter Chowk Branch Multan

19

Internship Report
MCB Bank offers a variety of current accounts to cater to the everyday transactional needs of various customers. These accounts ensure ease and freedom to bank from any of the 1100+ branches across the country. The different accounts include: the Basic Banking Account that has no minimum balance; Business Account offering free online transactions, Demand Drafts, Pay Orders and lots more to meet the day to day business requirements; Current Life Account which offers the security of life insurance free of cost; and for all others, the conventional Current Account.

Savings Account
MCB Bank offers a wide array of savings products that suit short term growth & transactional needs. Our savings accounts offer attractive profit rates as well as flexibility to transact. Savings Xtra is targeted for customers having Rs. 5 million + deposit, 365 Gold offers profit rate on daily balance while PLS savings has a lower minimum balance requirement. In addition, two uniqueproducts: Smart Savings and Savings Maximizer are special saving accounts run solely via debit cards and other remote banking channels, offering a very competitive rate to both high and low end savers.

Term Deposit
MCB Term Deposit offer attractive short to mid-term investment options with flexibility, convenience and security. With various tenor options available, customers can choose one that suit their needs. This is combined with different profit payout options and the added facility of being able to availcredit facility against their deposits.

MCB Online Banking

MCB has a fast growing network of 1100+ online branches in the country providing customers real-time online transaction facilities.

MCB MNET
MNET is an electronic inter-bank connectivity platform for online transactions on ATM and other remote banking channels. It offers other value added services that include a portfolio of e-banking and payment system products as well as management and day-to-day operations of the same. Members include 10 local and foreign financial institutions enjoying ATM sharing and value added services.
MCB Bank Limited Nishter Chowk Branch Multan

20

Internship Report
MCB Cash Management
Cash Management provides a wide range of value added services to large corporations through its vast network of online branches. Our structured and customized products enable our customers to realize their sales proceeds swiftly from all over the country, supported by real-time MIS. Cash Management also provides payment solutions through MCB network and through third parties and customized solutions for dividend payouts.

MCB Channel Financing

MCB Channel Financing provides working capital facilities to dealers and vendors of selected companies under a structured product program. This product enables our customers dealers to leverage themselves and increase their business capacity with their respective business partners.

MCB Local Rupee Drawing Arrangement

Transaction Banking Department at MCB, provides Local Rupee Drawing Arrangement, a product for small banks and financial institutions to use our vast branch network platform to make payments in areas where their own branch network does not exist, thus extending their reach nationwide.

MCB Home Remittance

MCB Home Remittance provides a seamless inflow of foreign remittances credited in the beneficiarys account within minutes. Cash payments can also be made at our designated branches on behalf of XpressMoney, Samba (SpeedCashNow), MoneyGram and Maybank Money Express Malaysia, along with cash payments from other correspondents from all over the world under the brand name of MCB Fast & Easy.

MCB Corporate Financing

MCB Corporate Financing provides access to diversified financing options, including working capital loans, term loans, trade finance services and investment banking.

MCB Project & Structured Finance

MCB Project & Structured Finance involves financing complex projects, usually in an SPV structure, where the loan is tightly structured around the cash flows,
MCB Bank Limited Nishter Chowk Branch Multan

21

Internship Report
risks are allocated amongst various stakeholders, and there is limited or no recourse to the sponsors.

MCB Syndicated Loans and Debt Capital Markets

MCB Syndicated Loans and Debt Capital Markets involves arrangement, underwriting and placement services for significant financing requirements by large corporate and institutional clients to other financial institutions or through the debt capital markets.

MCB Equity Capital Raising

MCB Equity Capital Raising relates to raising capital for our clients by offering common or preferred equity to public or private investors, through initial public offers, offers for sale, rights issues and private equity placements.

MCB Advisory Services

Financial and Capital Raising Advisory provides our clients with financial advisory services, commercial structuring support and access to capital resources to help companies successfully finance their business/project.

MCB Islamic Banking

With the help of Shariah specialists, lawyers and professional commercial bankers, MCB Islamic Banking provides Riba Free and Shariah Compliant products and services both on the liability and asset side of the statement of financial position to various customers of all demographic segments with its presence in a growing number of cities. MCBs Islamic Banking products are available to cater the need of Working Capital, Capital Expenditures, International/Local trade and consumers requirements.

MCB Agri Products

MCB is committed to the farming community to support their national objectives of self sufficiency & food security to the people of Pakistan. Dedicated and specialized staff, supervised by the Agri Credit Division, is posted in lending branches to cater for strong business relationships & facilitation. The banks extensive branch network in all the provinces and diversified product range extends our reach of agri credit facilities to farmers engaged in any type of activity, encompassing both crop & non crop sectors.We overwhelmingly cherish and stay committed to support the farmers in view of unparallel significance of
MCB Bank Limited Nishter Chowk Branch Multan

22

Internship Report
agri sector in our national life aligned with economic priorities of the country and role of our bank as a responsible corporate citizen.

MCB Privilege
A first from a local bank, MCB Privilege through its dedicated, world class Privilege Centers offers a higher level of personalized services, more rewarding in-branch experiences and a wide array of deposit and investment products that are tailored to meet the financial expectations of our affluent clientele. As members of MCB Privilege, customers experience unparalleled advantages that put them ahead of others. MCBs dedicated Privilege Centers await to welcome you in Karachi, Lahore, Islamabad and Multan, with plans to expand to more locations.

MCB Salary Club

A payroll solution designed to make life easy; it simplifies all the monthly payroll related banking needs of employers and opens the door to a world of special offers for employees. Salary Club provides the convenience of having an extensive range of financial services available to employees at their place of work.

MCB Investment Services

Make the most of your wealth with investment opportunities that match your unique financial aspirations. MCB Investment Services offer distribution of mutual funds managed by the leading fund managers of Pakistan. We can suggest the products most suited for your needs, or work with you to create a personalized solution completely focused on your expectations of the capital markets.

MCB Visa Credit Card

MCB offers a complete suite of Classic, Gold and Platinum Visa Credit Cards focusing on providing, superior services, travel privileges & shopping pleasure. It also offers comprehensive insurance & installment plans, reward points and SMS alerts that give a different feel to the world of credit cards. These unique features include i-revolve, which makes variable mark-up rate available to customers allowing them to repay at affordable rates.

MCB Car4U

MCB Bank Limited Nishter Chowk Branch Multan

23

Internship Report
MCB Car4U not only gets you a car of your own choice but is also affordable with competitive mark-up, flexible conditions, easy processing and above all, no hidden costs.

MCB Instant Finance

With MCB Instant Finance, you can get a loan instantly at any MCB branch against liquid collateral at competitive pricing.

MCB Smart Card

MCB Smart Card opens the opportunity to have access to your funds via multiple banking channels. It enables you to withdraw cash from ATMs across Pakistan and around the world, transfer funds, pay utility and mobile bills and register for mobile and virtual banking services.

MCB Rupee Travelers Cheque

MCB Rupee Travelers Cheque is the best and safest alternate way of carrying cash. It can be used by travelers, businessmen or by the general public in meeting their day to day cash requirements while they travel. It is a safe and secure way to make payments because it gives the purchaser security that even if the cheque is lost it can be refunded. Unlike other modes of fund/remittance transfer which can only be drawn at a particular branch and can be encashed only at that branch, MCB Rupee Travelers Cheque can be encashed at any of our branches across the nation.

MCB ATMs
MCB has one of the nations largest ATM networks with 500 ATMs covering 110 cities across the country and still growing. MCB ATMs give you a 24-hours convenience of cash withdrawal, mini-statement, utility bill payments, mobile top-ups, funds transfer services and much more.

MCB Mobile ATM

Through our MCB Mobile ATM we allow for convenient world class banking services. Our innovative MCB Mobile ATM van ensures that we offer our
MCB Bank Limited Nishter Chowk Branch Multan

24

Internship Report
services wherever you are, be it concerts, fairs or any other occasion/special event.

MCB Lockers
MCB Lockers are the best protection for your valuables. Lockers of different capacities are available nationwide.

MCB SMS Banking

With MCB SMS Banking, you can bank on your fingertips. Once youre registered onto the service you can SMS anytime to get account information.

MCB Full-Day Banking

Enjoy the convenience of extended banking hours from 9am to 5pm, including Saturdays at MCB Full-Day Banking branches across the country.

MCB Bancassurance
Combining the best of banking and insurance solutions, MCB Bancassurance has created a one-stop shop for all your financial and insurance needs. Whether you want to save for your childs education or marriage, for the security of dignity after retirement or gaining maximum return on savings, MCB Bancassurance has a plan for you. You can also buy instant insurance coverage through your mobile without any medical assessment.

MCB Call Centre

The simplest way to bank is with the new enhanced 24/7 MCB Call Centre, which blends innovation and convenience to provide banking services that go beyond expectations. MCB Call Centre enables you to manage your VISA Credit & ATM/Debit Cards, confirm account balances & view last 5 transactions, pay utility/mobile phone & MCB Visa Credit Card bills, top up your mobile, transfer money within MCB network accounts and register complaints. Most importantly it provides you with our very own banking consultant to discuss your financial needs and requirements. Simply call at 111-000-622 and well do the rest

MCB Mobile
MCB Bank Limited Nishter Chowk Branch Multan

25

Internship Report
MCB Mobile is a quick easy and secure way to recharge mobile phones, transfer money, pay bills and do much more. Visit the nearest MCB ATM or call 111-000622 to register and logon to www.mcbmobile.com using your mobile phone to start transacting.

MCB Virtual Banking

MCB Virtual Banking Service is a convenient way to access your account(s) 24/7. It is secure, free of cost and lets you do your banking whenever and wherever. This service allows you to transfer funds, pay utility/mobile bills, set up standing order instruction, download account statement and much more.

Fields of Activities of MCB

The purpose of banks is to provide some services to the general public. And for this purpose different banks provide different services to the people in different forms. The MCB Bank Limited (MCB) is a commercial bank, in modern time commercial banks play a very important role and their functions are manifold. The main functions and services which MCB Bank Limited Limited provides to different peoples are as follows.

1) Open Different accounts for different peoples

MCB Bank Limited Nishter Chowk Branch Multan

26

Internship Report
2) Accepting various types of deposits 3) Accepting various types of deposits 4) Granting loans & advances 5) Undertaking of agency services and also general utility functions, few of those are as under: a) Collecting cheques and bill of exchange for the customers. b) Collecting interest due, dividend, pensions and other sum due to customers. c) Transfer of money from place to place. d) Acting an executor, trustee or attorney for the customers. Providing safe custody and facilities to keep jewellery, documents or securities. e) Issuing of travelers cheques and letters of credit to give credit facilities to travel. f) Accepting bills of exchange on behalf of customers. g) Purchasing shares for the customers. h) Undertaking foreign exchange business. i) Furnishing trade information and tendering advice to customers.

DEPARTMENTS OF MCB
For proper functioning of branches and the over all bank has been divided in different departments. These departments handle different jobs so that division of work is there for improvement of functions and also it is easy to control the situation. The general division in a branch is as follows:

Cash department Deposit department Advances & credit department

MCB Bank Limited Nishter Chowk Branch Multan

27

Internship Report
Foreign exchange department Technology department

Cash Department
The following books are maintained in the Cash Department: Receiving Cash Book Paying Cash Book Token Book Scroll Book Cash Balance Book

When cash is received in counter, it is entered in the Scroll Book and Receiving Cashier Book. At the close of the day, these are balanced with each other.
MCB Bank Limited Nishter Chowk Branch Multan

28

Internship Report
When the cheque or any negotiable instrument is presented at counter for payment, it is entered in the token book and token is issued to the customer. The token clerk and the Cashier make entries in the paying book and payment is made to payee. At the close of day, the Token Book and Paying Cashier Book are balanced. The consolidated figure of receipt and payment of cash is entered in the cash balance book and drawn closing balance of cash.

Opening Balance + Receipts - Payments = Closing Balance.

This is very important department because cash is the most liquid asset and mostly frauds are made in this department, therefore, extra care is taken in this department and nobody is allowed to enter or leave the area freely. Mostly, cash area is grilled and its door is under supervision of the head of that department. All the books maintained in this department are checked by an officer.

Deposit Department
Bank deals in money and they are merely mobilizing funds within the economy. They borrow from one person and lend to another, the difference between the rate of borrowing lending forms their spread or gross profit. Therefore we can rightly state that deposits are the blood of the bank which causes the body of an institution to get to work. These deposits are liability of the bank so from point of view of bank we can refer to them as liabilities. The total deposits of MCB are growing since its inauguration but after privatization there is a sharp incline in over all deposits of the bank. The increase in deposits is also a cause of increase on total number of accounts; bank has progressed in both aspects.

OVERVIEW
Currently MCB Branch is offering following types of accounts / banking services to MCB Bank Limited Nishter Chowk Branch Multan

29

Internship Report
its customers. Specific features and eligibility criteria of each product is elaborated in the following pages. CURRENT ACCOUNTS Current Deposit Account Basic Banking Account Business Account New Foreign Currency Account Call Deposit Receipt SAVING ACCOUNTS PLS Saving Accounts Khush Hali Bachat Account New Foreign Currency Saving Account 365 Saving Account Salary Club Gold Account TERM DEPOSITS Flexi Deposit Account (FDA) Mahana Profit Account (MPA) Special Foreign Currency Term Deposit REMOTE CHANNELS Call Center ATM Smart Card Mobile Banking Virtual Banking

Account Opening:
Account opening is an agreement in which customer offers his funds and bank accepts these funds, therefore the nature of relation between a banker and customer is of a contractual one and all the conditions applicable to this contract act are also applicable.

1. Procedure for opening:

Procedure for opening of account is as follows:

MCB Bank Limited Nishter Chowk Branch Multan

30

Internship Report
A person, who wants to open any kind of account, has to fill in a printed form which is provided by the bank, free of cost. Separate account opening forms are used for different types of accounts. Bank usually requires that new depositor must be introduced by some one. An introducer can be any person known to the bank but preferably it should be a customer of the bank. However, the manager can open the account by his own introduction. If the manager is satisfied, it will obtain the full signature of the customer- on the form and specimen signature card, makes the first deposit, and issues the cheque book. The following are given to the customers: Pay-in-slip is the proof of deposit. For every payment which is. to be deposited in the bank, the pay-in-slip is to be filled up. The object of this book is to provide the customer with the bank's acknowledgment for receipt of money to be credited this account. Cheque Book contains a number of cheques. It enables a customer to make withdrawal from this account or make payment of various parties by issue of cheque. Pass Book is a copy of the customers account as appears in the books of the bank. Balance is recorded in this book by the Clerk. NOTE: 1) In case of partnership account partnership deed should be attached. 2) In case of companies memorandum and article of association, certificate of incorporation, certificates for commencement of business, list of directors and board resolution for opening of account is also obtained from the customer. 3) Accounts of Trusts, Executors & Administrators can also be opened but with the prior approval of the Head Office. Profit payment & calculation is done in accordance with the rules of each type of deposit scheme-by the deposit department. The products for each deposit scheme are calculated separately and added till the end of 6 month period. Then the sum total of these products is multiplied with the respective profit rates which are
MCB Bank Limited Nishter Chowk Branch Multan

31

Internship Report
issued by the Head Office at the end of each half yearly closing. The profit provisions for each type of deposits are also calculated on monthly basis by the same department in order to calculate the net profit or loss position of the branch. Accounting entries are also made in the respective books of account by this department. However, in small and medium size branches, the accountant performs the book keeping duties for all kinds of ledgers.

Clearing Department
Every banker acts both as a paying as well as a collecting banker, It is however an important function of crossed cheques. A large part of this work is carried out through the bankers clearing house. A clearing house is a place where representative of all banks of the city get together and settle the receipts and payment of cheques drawn on each other. As the collecting banker runs certain risks in receipt of their ownership the law has provided certain protections to the banks.
MCB Bank Limited Nishter Chowk Branch Multan

32

Internship Report
The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a cheque or draft may cross the instrument generally or specially. It further lies down that a crossed cheque can only be paid to a banker, who collects it for a customer in good faith and without negligence.

Types of cheques collected Transfer cheques: are those cheques, which are collected and paid by the same branch of bank. Transfer delivery cheques: are those cheques, which are collected and paid by two different branches of the same bank situated in the same city. Clearing cheques: are those cheques, which are drawn on the branches of some other bank of the same city or of the same area, which is covered by a particular clearing house. Collection cheques: are those cheques, which are drawn on the branches of either the same bank or of another bank, but those branches, are not in the same city or they are not the members of clearing house.

Functions of Clearing Department:

1. 2. Customers of the branch and to arrange for their collection. To arrange the payment of cheques drawn on the branch and given for collection to any other branch on MCB or any other members or sub member of the local clearing house. To collect amount of cheques drawn on members, sub-member of local clearing house, sent for collection by MCB BTo accept Transfer, Transfer delivery, clearing and collection cheques from the branches, not represented at the local clearing house.

3.

Common procedure for all cheques:

MCB Bank Limited Nishter Chowk Branch Multan

33

Internship Report
i) ii) iii) iv) v) vi) Receiving and scrutinizing the cheques and other deposit instruments, and the pay-in-slip at the counter. Fixing the stamps. Scrutiny and receipt by the authorized officer. Returning the counter file to the depositor. Certificate and confirmation by the officer in charge of the department. , Separating the cheque into transfer, transfer delivery, and clearing cheques.

SCRUTINY OF CHEQUES
a) b) c) d) e) f) g) h) i) j) The instrument should be neither stale/ nor post-dated. If the instrument is crossed not negotiable it can be for the third party (an endorsee of an order cheque, or a holder of bearer cheque). The Instrument should not bear any unauthorized alternation. The instrument should not be mutilated. The amount in words and figures should be same. The instrument should be drawn on any local branch. If cheque is "crossed Account Payee's" only or "Payee's Account", it should only be accepted for collection for the payee's account. The cheques or drafts should not be crossed specially to any other bank. A cheque payable to a firm should not be accepted for credit to a partner's account. A cheque payable to one of the joint account holders should not be collected for the joint account without the payee's endorsement, or consent. Pay orders, although negotiable should not be collected for third parties. Branch agent's permission should be obtained before accepting a third party cheque or draft for the credit of the member.
MCB Bank Limited Nishter Chowk Branch Multan

k) l)

34

Internship Report
m) n) If the payee is a Government Department, Government Official, or a trust account the instrument cannot be collected, but for the payee's account. If the payee of an instrument is UBL, it can be collected for credit of the drawers account, or the amount of the instrument may be utilized as desired by the drawer in writing. Cheque payable to a trust, account should not be collected for credit to a trustee's account. All the endorsement should be regular, and no endorsement should be missing.

o) p)

Remittances
The need of remittance is commonly felt in commercial life particularly and in everyday 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 instrument for transferring of money: Demand Drafts (DD) Pay Order (PO) Telegraphic Transfer (TT) Mail Transfer (MT)

Demand Drafts (DD):

MCB Bank Limited Nishter Chowk Branch Multan

35

Internship Report
DD is a written order given by the branch of the bank on behalf of the customer to other branch of the same bank to pay the certain amount to the customer. DD are issued for the particular place other than place of issuance. A drafts is a Cheque drawn by a bank on its own branch or any other branch of another bank at a different place requesting it to pay on demand a specified amount of money which is already received to the person named on it. Documentation: A printed application form is provided for filling in completely and signing by the applicant. After depositing an amount of draft and commission of the bank, duly completed and signed by two authorized officers, then it is handed over the applicant and credit order is dispatched to drawee branch. Following are the prerequisites for the processing of DD: Bank Serial No No. of DD Central No Test Key Rs.60 Postage charges
0.02% With holding tax

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

MCB Bank Limited Nishter Chowk Branch Multan

36

Internship Report
The party who requires a pay order will get a printed application from the bank. He will fill it and deposits the amount and commission. The bank charges are same as on demand draft. Bank Serial No. No. of PO Central No. 0.02% With holding tax

TELEGRAPHIC TRANSFER (TT): In this case the authority is given from one bank to other on the behalf of the customer through telecommunication to debit their inter office account through them and credit their parties account mentioned in TT. It is an inter bank transaction. Telegraphic transfer is an instant transfer of funds. Through this method applicant can transfer money from one place to another place. There are two types of TT, Both types of TT are maintained in separate registers, test is applied by the manager of every amount of TT. Incoming TT Outgoing TT Applicant has to fill a form along with depositing amount to be transferred and bank commission. MCB charges the commission at the same rate as in the case of demand drafts. Documentation: Issuing Branch Name & Code Beneficiary Branch Name & Code
MCB Bank Limited Nishter Chowk Branch Multan

37

Internship Report
No. of TT 60 Rs Postage and 140 Rs for Fax Amount in words & Figure 0.02% With holding tax Test key

Mail Transfer (MT): As the name shows, it is transfer of money in the shape of document through mail. Procedure is like TT. The transfer of funds from one place to another by mail is called Mail Transfer (MT). The MT can be foreign or domestic. The applicant who is desiring to remit the funds by way of Mail Transfer can either deposit cash or ask the bank to debit his/her account with the cost of MT including the bank charges. These all measures are for safe transfer of funds. Documentation: Issuing Branch Name & Code Beneficiary Branch Name & Code Number of MT Amount in words & Figure
0.02% Withholding taxes.

Advances Department
Advances are the most important source of earning for the banks. MCB is also giving full attention towards this aspect and it is also obvious from the growing portfolio of advances and from very low delinquency rate. The credit portfolio of this institution is in a very much better shape than other financial institutions of Pakistan and the credit goes to the management and the staff who are concerned about the quantity and quality as well. 1) Loans
MCB Bank Limited Nishter Chowk Branch Multan

38

Internship Report
2) 3) Cash Credits Overdraft

1) Loans: Loans are monetary assistance by a financial institution to a business, individual etc. The loans are granted by the bank in lump sum, so these types called fixed or demand loans. Interest is charged on the whole amount of a fixed loan. The borrower withdraws whole the amount of loan. This type of loan is normally granted against security of gold documents. In case of demand loans against gold or documents, a demand promissory note for the amount of loan is taken from the borrower loans are granted under; a) Loan against Pledge of Stock:

In case of advancing such types of loans, the following precautions are kept in the mind: i) ii) Stock pledged must be readily saleable Products should be readily saleable

iii) Advance should be within the borrows means

Requirement for loan:

For granting loan to any party or individual, the bank checks following particulars of the client: 1) 2) Credibility Feasibility Report

By Credibility, bank Judges the credibility of the client by his past bank record, CBI report etc. it is very important in making decision about giving him loan. Feasibility report is on the running or proposed business of the client. The report enables the bank to judge the likely return of the business. 2) Cash Credit
MCB Bank Limited Nishter Chowk Branch Multan

39

Internship Report
Such cash account is opened in the name of the customer who borrows from the bank. Customer is granted a loan up to a certain limit, sanctioned by the head office, from which he can draw when he requires and interest is charged on the amount actually utilized by the customer. In order to avoid the danger of idle fund, the bank charges a certain rate of interest, even if the customer does not withdraw any amount. The rate charged by the bank on cash credit in 46 paisa per thousand on daily basis. The credit is usually given against the securities of goods or merchandize as follows: 1. Advances AGAINST PLEDGE stock in trade or products When a cash is granted against the pledge of stock or product, cash credit form is taken, from the certain products or stock, but the actual pledge is created when the stock or finished product are placed under the bank's lock or the document of title are duly endorsed to the bank by the borrower. 2.Hypothecation of stock on Finished Products: The difference between pledge and hypothecation is that under a pledge the borrower's goods are placed in the bank's possession under own lock, whereas, under a hypothecation, they remain in the possession of the borrower or guarantor and are merely charged to the bank under documents signed by them. Even though the documents empower the bank to take possession of the goods hypothecated, but it is possible that the borrower may actually resist any attempt. 3.Mortgages of property: Title deeds of immovable property are accepted by the bank only as collateral security or alternatively as unauthorized security. MODES OF CREDIT FACILITIES There are two types of facilities A. Funded Facility 1) Running finance 2) Instant Running Finance 3) Cash finance 4) Demand finance
MCB Bank Limited Nishter Chowk Branch Multan

40

Internship Report
5) Payment against documents 6) Finance against imported merchandise 7) Finance against trust receipt 8) Export finance 9) Foreign bill purchased 10) Others B. Non Funded Facility 1) Letter of credit 2) Letter of guarantees 3) Bid bonds 4) Performance bonds 5) Other facilities

FOREIGN EXCHANGE DEPARTMENT

H. E. Evit states that the means and methods by which right to wealth express in terms of currency of one country are converted into rights to wealth in term of the currency of another country are known as foreign exchange. Encyclopedia Britannic defines Foreign Exchange as a system by which commercial nations discharges their debts to each other. WHY? Nature has granted its wealth unevenly Need of Imports & Exports Because no international Money unit exists IN MCB This department works like general banking department with the difference that it deals in foreign currencies like US ($) and Pound Sterling, Dutch Mark (DM),
MCB Bank Limited Nishter Chowk Branch Multan

41

Internship Report
Euro and Japanese Yen (Y). This department deals with the following products/services: Foreign Currency Accounts Foreign Remittances Foreign Bills for Collection Selling of Government Certificates Imports & Exports

FOREIGN CURRENCY ACCOUNTS

These accounts can be operated foreign national and Pakistani National. The foreign currency department deals with the following types of accounts: Current account Saving bank account Term deposit

Term Deposit Accounts

Issued in US $ and sterling Duration of 3 months Interest in paid at maturity

FOREIGN REMITTANCES
Remittances to abroad through telegraphic transfer is remitted to the person to whom it is payable. Bank charges Rs.50/- as its commission. Funds can be transferee abroad either by drafts and telegraphic transfer in US dollar and pound Sterling. For transferring money, Client must give specific reason for sending money abroad. Without any specific reason and proper identification of person
MCB Bank Limited Nishter Chowk Branch Multan

42

Internship Report
who is remitting amount, bank avoids to transfer money. Similarly Money gram is used for inward remittances: Foreign Bills for collection Government Bills for collection

FOREIGN BILL FOR COLLECTION

Cheques and drafts in any other foreign currency deposited by account holders are sent for collection. If the cheques are drawn within the country i.e. Issuing Bank is in Pakistan then they are sent to respective branches. If these cheques are drawn on other countries then these are sent to respective countries. MCB credits the accounts of account holder when these bills are realized. Banks credit his account with the same rate of that day on which the Cheque was deposited with the bank. Bank charges Rs.100/- as its commission and plus telephone/fax charges if any.

IMPORTS & EXPORTS

To enter into an import or export enterprise an individual must follow the following steps, later I will discuss these in detail: Registration at Corporate Law Authority Membership with of Chamber of Commerce/association NIT # must be obtained from Income Tax Authorities Affidavit of not a government servant/ not been black listed
Submit a photo copy of CNIC along with the documents

Company must have a foreign currency account in any bank The individual/company must have registered at EPB The exporter/importer should have some party in contact

MCB Bank Limited Nishter Chowk Branch Multan

43

Internship Report
CHAMBER OF COMMERCE
It is essential for an importer/exporter to be member of some recognized chamber or association. Normally the importer or exporter is member of Chamber of Commerce, however, membership of other chambers or associations like APTMA is also acceptable. The importer/exporter applies for membership along with admission fee of Rs.100 and annual subscription. After the serenity the chamber or association issues a membership certificate. The following information is required to be given along with application. Name of individual or firm & Address Name of directors or partners Particulars of business Import or export registration number National Tax Number Bank certificate (photo copy) National Identity Card copy Photo copy of form C from registrar

INCOME TAX OFFICE

According to the rules the importer/exporter has to pay various taxes in the national exchequer, like income tax, corporate tax, withholding tax, sales tax, super tax, etc. For this purpose he must possess a national tax number (NTN). If the individual/company is already paying income tax then the NTN would have already been allotted. However, a new exporter/importer individual or company would require fresh NTN. Income tax return for registered firms. Income tax return for companies. Documents required for obtaining NTN are: Copy of National Identity Card List of existing bank accounts
MCB Bank Limited Nishter Chowk Branch Multan

44

Internship Report
Copy of certificate of registration Copy of partnership deed Copy of certificate of incorporation NTN (for verification only)

MCB Bank Limited Nishter Chowk Branch Multan

45

Internship Report LETTER OF CREDIT

The marketing of merchandise in foreign involves a long period of time, the seller or exporter may be unable to carry the burden of financing, such a lengthy transactions for he may not wish to tie up his capital for such a long period. It is the assurance of the bank that the payment would be made on completion of transactions in terms of L/C. The terms of credit could be documents against payments (DP) or documents against acceptance (DA).

TYPES OF L/C
There are several methods for making payment of an import or export transaction. These are listed below:

Irrecoverable Letter Of Credit

The issuing bank (importers bank) gives a lasting undertaking to accept and pay bills drawn upon it, to the exporter, upon fulfilling the terms and conditions stipulated in the Letter of Credit (LC). It gives complete protection to the exporter.

Recoverable Letter of Credit

The issuing bank (importers bank) can modify the LC without any obligation on its part. These are usually not accepted by the exporters.

Confirmed Letter of Credit

This kind of LC has the protection of the credit standing of the importers as well exporters banks. The exporters bank which confirms this LC, takes full responsibility of making payment if the importers bank fails to do so.

Unconfirmed Letter of Credit

Though the issuing bank gives a commitment to honor the drafts, however, it does not give any guarantee. From the exporters point of view confirmed irrecoverable LC is the best form of receiving payment.

Modes of Payment
There are four modes payments which are as follows:
MCB Bank Limited Nishter Chowk Branch Multan

46

Internship Report
Deferred Credit Sight Credit Acceptance Credit Negotiation Credit

SHIPPING CLEARANCE
Import or export license is no more required for clearance at customs. Only requirement is to have registration EPB as importer or exporter. The imported or exported goods must confirm to the trade policy. The goods have been categorized as:

Negative List
Goods not permitted to be exported or imported e.g. old machinery, old tires, export of antiques, obscene and sectarian literature, etc.

Prohibited/ Restricted Goods

These items can be imported or exported but subject to certain conditions e.g. boilers, medicines, animals, seeds, arms and ammunition of certain bores.

Procedures
The import and export business is not also a profitable business but also, it helps in improving countrys economic condition. To improve our countrys balance of payments we must concentrate upon increasing exports. Though the specific procedures might differ from product to product, the major steps follow the same line. The knowledge of such like process would be useful for an MCB in the practical field.

IMPORTS
When the goods arrive at port or dry port, the importer will file the Bill of Entry giving the detail of imports, Value of imports, Rate of duty &Tariff. Customs appraisal officer will carry out an assessment of goods according to the rules/tariff manual. Depending upon the assessment following taxes will be
MCB Bank Limited Nishter Chowk Branch Multan

47

Internship Report
remitted by the importer: Custom duty based upon ad valorem, specific rate or both. Sales tax - 15% of ad valorem + custom duty. With-holding tax 4% of ad valorem + custom duty + sales tax. Regulatory duty as imposed by the government from time to time under the power of customs act.

EXPORTS
To dispatch the shipment, the exporter will submit shipping bill. The customs appraisal officer will examine the goods for correctness of declared description, value, and claimed duty drawback. Thereafter the goods will be allowed for shipping.

ATM Network:
ATM stands for Automatic Teller Machine. This machine is used to transact in one's account without intervention of humans. These machines are basically used for taking cash, confirming balances and requesting statements / cheque books. MCB has the largest ATM network in the country at the moment with 584 ATMs and also ATM terminals at International Airports. This network covers more than the 27 cities of Pakistan including the provincial capitals and large commercial cities of the country. ATMs are operated through a card issued to the valued customers and by application of Personal Identification Number (PIN number). A person can withdraw from any machine across Pakistan with having an account in only one branch of MCB. This was only possible with the help of online system. In this system all the machines are linked to central banking host at IRM division Karachi through either satellite or telephone controller. This system identifies the card holder and his PIN Number. Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard. This contract will enable an ATM card holder to use his account even when he is out of country at all the ATMs where Cirrus logo is displayed. Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/- in a day. The annual fee for this card is Rs. 300/- only. Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day. These cards are issued to the persons having more than Rs. 500000/- as their average balance.
MCB Bank Limited Nishter Chowk Branch Multan

48

Internship Report
International Cards are issued in collaboration with Cirrus and are useable all over the world with maximum withdrawal facility according to the standards of Cirrus.

MCB web site

MCB has also initiated its own website on internet with the address. www.mcb.com.pk

MCB Bank Limited Nishter Chowk Branch Multan

49

Internship Report

Financial Statements Analysis

Vertical Analysis- Statement of Financial Position/ Profit & Loss 2010 2009 Statement of Financial Position Rs M % Rs M % ASSETS
Cash and balances treasury banks with 45,4 1,4 Balances with other banks Lendings to financial institutions Investments Advances Operating fixed assets Deffered tax assets Other Assets 79.00 4,4 02.00 213,0 61.00 254,5 52.00 20,9 47.00 27,7 05.00 5% 1% 38% 45% 4% 0% 0% 07.00 8% 38,7 75.00 6,0 10.00 3,0 00.00 167,1 34.00 253,2 49.00 18,0 15.00 8% 1% 1% 33% 50% 4%

0% 23,0 40.00 5%

Total Assets LIABILITIES

Bills payable Borrowings Deposits Sub-ordinated loan Deffered tax liabilities Other liabilities

567,55 100 3.00 %

509,22 100 3.00 %

10,2 66.00 25684 431372 0 4934 16092

Total Liabilities NET ASSETS

488,34 86 8.00 % 79,20 14 5.00 %

2% 5% 76% 0% 1% 3%

8201 44662 367605 0 3197 15819

439,48 86 4.00 % 69,73 14 9.00 %

2% 9% 72% 0% 1% 3%

Represented By
MCB Bank Limited Nishter Chowk Branch Multan

50

Internship Report
Share Capital Reserves Unappropriated Profit Surplus on revaluation of assets net of tax 7602 40163 21415 10024 1% 7% 4% 2% 6911 38386 15779 8664 1% 8% 3% 2%

Total PROFIT & LOSS ACCOUNT

Mark-up earned Mark-up expensed Net mark-up income Provision & write off Net mark-up income provisions Non-mark-up Income Non-mark-up expense profit before tax Taxation after

79204

14 %

69740

14 %

54821 -17988 36834 -3685 33149 6265 -13160 26253 -9380

90% 29% 60% -6% 54% 10% 22% 43% 15%

51616 -15837 35779 -7465 28314 5643 -10801 23155 7660

90% 28% 62% 13% 49% 10% 19% 40% 13%

Profit after Taxation

16873

28 %

15495

27 %

MCB Bank Limited Nishter Chowk Branch Multan

51

Internship Report

Horizontal Analysis- Statement of Financial Position/ Profit & Loss 2010 2009 10 09 Statement of Financial VS VS Position Rs M 09 Rs M 08 ASSETS
Cash and balances treasury banks with 45,4 07.00 1,4 Balances with other banks 79.00 -75% Lendings to financial 4,4 institutions 02.00 47% 213,0 Investments 61.00 27% 254,5 Advances 52.00 1% 20,9 Operating fixed assets 47.00 16% Deffered tax assets Other Assets 27,7 05.00 20% 0% 17% 38,7 75.00 6,0 10.00 3,0 00.00 167,1 34.00 253,2 49.00 18,0 15.00 -2% 49% -27% 73% -3% 4%

0% 23,0 40.00 16%

Total Assets LIABILITIES

Bills payable Borrowings Deposits Sub-ordinated loan Deffered tax liabilities Other liabilities

567,55 3.00 11%

509,22 3.00 15%

10,2 66.00 25684 431372 0 4934 16092

25% -42% 17% 0% 54% 2%

8201 44662 367605 0 3197 15819

-22% 97% 11% 0% 631% -26%

Total Liabilities NET ASSETS

488,34 8.00 11% 79,20 5.00 14%

439,48 4.00 14% 69,73 9.00 19%

MCB Bank Limited Nishter Chowk Branch Multan

52

Internship Report

Represented By
Share Capital Reserves Unappropriated Profit Surplus on revaluation of assets net of tax 7602 40163 21415 10024 10% 5% 36% 16% 6911 38386 15779 8664 10% 4% 72% 40%

Total PROFIT & LOSS ACCOUNT

Mark-up earned Mark-up expensed Net mark-up income Provision & write off Net mark-up income provisions Non-mark-up Income Non-mark-up expense profit before tax Taxation

79204

14%

69740

19%

54821 -17988 36834 -3685 after 33149 6265 -13160 26253 -9380

6% 14% 3% -51% 17% 11% 22% 13% 22%

51616 -15837 35779 -7465 28314 5643 -10801 23155 7660

29% 37% 26% 85% 16% -3% 29% 6% 18%

Profit after Taxation

16873

9%

15495

1%

MCB Bank Limited Nishter Chowk Branch Multan

53

Internship Report

MCB Bank Limited Nishter Chowk Branch Multan

54

Internship Report

PEST ANALYSIS AND ENVIRONMENTAL SCAN

A broad view of market is important when management is interested in introducing better services for customers. Rapid technological change, global competition and the diversity of buyers preferences in many markets require the constant attention of the market to identify business opportunities, see the shifting requirements of the buyers, evaluate changes in competitors positioning and guide the choice of which buyers to target and classify them according to respective segments. Identification of external and macro factors that influence buyers and thus change the size and composition of market over time involves initially building customer profiles. These influences include: Political and legal environment Economic trends Socio cultural environment Technological factors

POLITICAL AND LEGAL ENVIRONMENT: Banks are strongly affected by the political and legal considerations. This environment is composed of regulatory agencies and government law that influence and limit various organizations and individuals. Mostly these laws create new opportunities for business. Business legislation has following main purposes: To protect banking companies from unfair competition. To protect consumers from unfair business practices adopted by banking companies To protect the interest of the society from unbridled business behavior. ECONOMIC TRENDS: A banking market requires better consumer market in volume alongwith higher borrowing power. The available borrowing power depends on: Consumer income Saving rates Consumption patrons Rates of interest Budget deficit
MCB Bank Limited Nishter Chowk Branch Multan

55

Internship Report
Exchange rates Cost of living Inflation

SOCIO-CULTURAL ENVIRONMENT: A society is shaped by beliefs, norms and values. People in a society consciously and unconsciously interact with: Themselves Others Organization Society

TECHNOLOGICAL FACTORS: Forces of technological advancement have played the most dramatic role in shaping the lives of people. The rate of change of technology has greatly affected the rate of growth of economy. New technology is creating deep rooted affects which could be observed in long run. The improvement techniques involved in online banking. In brief PEST analysis affects the overall banking companies and provides us the information about the external macro conditions.

MCB Bank Limited Nishter Chowk Branch Multan

56

Internship Report SWOT ANALYSIS OF MCB

STRENGTHS
MCB is the first Pakistani privatized bank and because of its quality management, marketing, innovation in products and services. Owing to all such factors they have established a good reputation in the banking market. The name of MCB makes you recall the highly cooperative and professional individuals ready to serve you with maximum zeal and zest. MCB have faster banking services that are making it more prominent in the banking industry especially in operations and Foreign exchange. The customer prefers this bank not only because of its faster speedy service rather due to reasonable service charges. MCB in Pakistan is the also in the list of highly automated banks like Emirates because of its modern style of banking through fully computerized control and twenty four hour banking. The joining of experienced people, advanced management, advance setup and facilities gave MCB an edge over its competitors.

WEAKNESSES
The majority of people are not well aware about the products of MCB. Therefore it should advertise extensively especially RTC and Master Cards. A behavior has been noted that bank tries to feel at ease with good looking, rich and educated people and the poor looking customers feel some bit strange in the environment of the bank. The bank employees should try to accommodate behaviorally all type of customers. In MCB there is lack of specialized skill because of job rotation policy of human resource department. The bank should concentrate upon increasing its abilities on individual service basis. Mismanagement of time is another big mistake in MCB branches, the bank official time of closing is 5:00 pm but due to mismanagement of time allocation and work, the staff is normally on their seats till 7:00 or 8:00 clock.

MCB Bank Limited Nishter Chowk Branch Multan

57

Internship Report
OPPORTUNITIES
As on December 31, 1998, sixty-eight scheduled banks with 9,106 branches are operating in Pakistan. As on this date, total population of Pakistan is 140.03 million. Total number of personal accounts with all scheduled banks as on December 31,1997, are 28.98 million. If we consider the population statistics of working age group as on December 31,1997, it stands to the figure of 96.64 million. Thus we can say those 28% of working age people of Pakistan are having accounts with banks while 72% are unbanked. The need of privatization has made people to switch to banks to satisfy their needs of lending and borrowing. This not only increases the deposits but also the credit business.

THREATS
Changes in government policies have affected the banking business. Still banks have to wait to get permission of state bank. The freezing of foreign currency accounts is a vital example of letting people not to trust on banks. The Competition has become severe by the entrants of so many banks, So to exist one will have to prove himself in its services through excellent management and will have to satisfy its shareholders. Otherwise he will be out the market. The decrease purchasing power of consumer in the current economic situation of the country affecting the business activity speed too much and the result is the low investment from the investors in new projects can create problem for the bank because it is working a lot in trade.

INTERNSHIP SCHEDULE
MCB Bank Limited Nishter Chowk Branch Multan

58

Internship Report

SR # DEPARTMENT 01 02 03 04 05 06 07 Customer services Account opening/TDR Clearing Bills/Remittances/Online Accounts/Lockers Foreign Trade Credits (commercial)

Days 3 1 week 1 week 1 week 3 1 week 1 week

From 23.7.2011 27.7.2011 03.08.2011 10.08.2011 17.08.2011 20.08.2011 29.08.2011

To 26.07.2011 02.08.2011 09.08.2011 16.08.2011 19.08.2011 27.08.2011 06.09.2011

RECOMMENDATIONS

MCB Bank Limited Nishter Chowk Branch Multan

59

Internship Report
From the Quantum of the profit and its financial data it can be easily judged that after privatization, MCB BANK LIMITED is performing remarkably 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 observation and suggestion to improve the efficiency for the development of the economy. A big portion of the home remittance is sent by Pakistan working capital through MCB Bank Limited Limited. As we know a big portion of this amount is wasted purchasing of luxuries. The people motivated to save money by offering the deposit through various investment schemes. The rate of profit should increase 1% or 2% than other banks and it would be profitable step for bank. There is a criticism on the banking management that the salaries of the employees are decreasing in every succeeding year. And I think this will shake the confidence and working habit of the employees. There is another recommendation about the bank that there is no proper timing of the bank and there is made an unnecessary delay in the banking transactions, which might not be a good sign for the bank from future prosperity point of view. Staff turnover particularly of trained staff result in financial and other losses. The amount spent by the bank on employment, induction and training of outgoing officers constitutes to beat till another officer should ready prove this work. The exodus of bank officer in the past has worsened the situation. Most of the bank employees, are sticking to one seat only with the result that they become master of one particular job and loose their grip on other banking operation. In my opinion all the employees should have regular job experience all out-look towards banking. The promotion policy should be adjusted. Refresher Courses for the staff are most important in any international organization. Alt the employees should have these courses according to their requirement. Foreign experts can also be called for this purpose. Every year some of the employees should be sent for training to other countries and employees from other branches should be brought here.
MCB Bank Limited Nishter Chowk Branch Multan

60

Internship Report
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 opportunities to attend and participate in seminars and lectures on banking. 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. As such system should be designed that every employee who has some problems with his officers can communicate it to the higher management and some steps must be taken to improve that. Recruitments should be strictly on merit basis and induction should be after proper and extensive training. Old and lazy staff should be replaced by young, qualified and energetic staff. Foreign branches should be opened in order to capture the international market and to earn international repute for the bank. Working environment, equipment, furniture and staff dressing should be according to the modern banking style. Proper attention should be paid to upgrade customer services. Bank should adopt the global organizational banking structure to meet the international standards of banking sector.

CONCLUSION
It is evident from this report and the financial statements of MCB that it is making progress by leaps and bounds. The profits of MCB have grown considerably during the last few years and this trend is expected to continue into the future.
MCB Bank Limited Nishter Chowk Branch Multan

61

Internship Report
Therefore, we conclude that MCB has a very prosperous present and future, which assures the shareholders of wealth maximization. Side by side of it, I think that if bank would be able to cover and control on the above mentioned recommendations; then it would be in such a situation that will really lead it towards the road of prosperity, development and integrity. And with the above mentioned sentences; I think there is fault on part of the customers also and in order to make the proper working of the bank the customers should also cooperate with the bank which will be really a good, ambitious and diligent condition for the bank. And then bank will be really in such a situation and position to compete its competitors in the country as well as on international level.

MCB Bank Limited Nishter Chowk Branch Multan

62