INTERNSHIP REPORT

ON

MUSLIM COMMERCIAL BANK Ltd.

Submitted To:
Prof. AzamShafique

Submitted by:
Mahrish aftab
B.Com (hons)
Bc12-038
Semester 8th (morning)
Session 2013-2015

Hailey College of Commerce

University of the Punjab
Lahore.
Internship Report

AREA COVERED BY REPORT

The report which I prepared highlights almost main contents of the Muslim
Commercial Bank. The report covers the history of the company, executive
summary of the Muslim commercial Bank, introduction, and vision, mission
statement, the objectives, core values, Branch Network of The Bank of MCB,
Management of The Bank of MCB, Boards of Directors MCB, Committees of
MCB and the company target setting for its future promotion, SWOT MY Learning
at MCB (Internship), Awards and Achievements of the Bank and Financial
Analysis & interpretation. This area deeply covers the almost things which are
necessary to understand the above mention things. Later this report covers the
organizational structure which includes the management and different
committees such as business development & review, management coordination,
audit committees etc. After that report consists the data regarding the work done
by student in different department. The report covers the overall financial
highlights of company which includes ratio analysis of balance sheet items and
income statement items. Later that in this report remaining areas such as
conclusion, suggestions and recommendations, skill acquired by student and
appendix which consists balance sheet, income statement, cash flow statement
and statement of owner equities. All above mention name deeply clarify the
explanations which are necessary to understand the working report of The Bank
of MCB.

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“ACKNOWLEDGEMENT”

All praises to AlmightyALLAH and our Holy Prophet MUHAMMAD (S.A.W)

who gave me the courage and patience for completion of this final report.

I wish to acknowledge my gratitude to my inspiring Teachers for

theirendless persistence, support and encouragement, and for providing
me a lifetime opportunity to work with Muslim Commercial Bank.

I am also very thankful to Muslim Commercial Bank Ltd at Lahore, who

gave me opportunity to work with experienced persons in their
organization.

I am also thankful to my parents, family and friends that continually offered

encouraging support.

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“TABLE OF CONTENTS”

TOPICS

Area Covered by Report__________________________________2

Acknowledgement_______________________________________3

Executive Summary______________________________________4

Introduction of Sector_____________________________________8

The Muslim Commercial Bank Limited_______________________11

Vision Statement________________________________________13

Mission Statement_______________________________________13

Circle Office____________________________________________15

Management of Organization_______________________________16

Organizational Structure___________________________________17

General Banking________________________________________21

Departments Where Internship Was Carried Out________________22

Operations Department___________________________________22

Clearing Department______________________________________30

Remittance Department__________________________________35

Advances Department_____________________________________39

Other Departments_______________________________________44

Cash Department_________________________________________45

Technology Department____________________________________ 47

Financial Analysis of MCB___________________________________49

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Ratio Analysis_____________________________________________49

Advantages of Ratio Analysis_________________________________50

Liquidity Ratios____________________________________________50

Debt Ratio _______________________________________________52

Market Ratios_____________________________________________53

Swot Analysis_____________________________________________55

Weaknesses_____________________________________________59

Opportunities_____________________________________________60

Threats__________________________________________________61

Pest Analysis_____________________________________________62

Application of Class Room Learning___________________________64

What I Have Learnt In MCB__________________________________65

Suggestions & Recommendations_____________________________66

If I Were Manager At Muslim Commercial Bank___________________68

References & Resources_____________________________________69

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“EXECUTIVE SUMMARY”

The banking structure in Pakistan comprises of the following types, State

Bank of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving
banks, Cooperative banks, specialized credit institutions. The State Bank
of Pakistan is the Central Bank of the country and was established on July
01, 1948. The network of bank branches now covers a very large segment
of national economy. 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. In 1956, MCB transferred its
registered office to Karachi, where the Head Office is presently located. In
April 1991, MCB became Pakistan’s first privatized bank.

The branch at Shah rah-e-Faisal Karachi (SFK) is the corporate branch of

MCB in Karachi. The bank is using SWIFT for transfer of information about
imports and exports. MCB SFK branch has currentlyfollowing three
Departments; General Banking Department, Advances Department &
Foreign Exchange Department.

To open an account the customer has to meet the general banking

manager. The procedure begins with the punching of account opening form
to the customer file i.e. customer’s master file. Before closing any account,
bank send letter to the account holder for informing him that his account is
going to be closed. There is need an approval from higher authority to
close any account. Current deposits are those which are payable to bank
whenever demanded by the customer. Bank does not pay any profit on
current deposits. The following are the financial products/services of MCB
Basic Banking Account, Current account, Savings Account, Foreign
Currency Account, Smart Dollar Account, Saving 365 Gold, Flexi Deposit
Mahana Profit, Business Account, Saving Extra Account, Current Life

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Account, Smart Savings, Saving Maximize, KhushaliBachat and others like

Bank assurance, credit cards, traveler cheques.

In remittance department like any other bank MCB also have instruments
for transferring of money Pay order & Demand Draft. In cash department
both deposits and withdrawals go side by side.

This department maintains the following sheets, books, and ledger of

account cash received voucher sheet, cash paid voucher sheet, Paying-in-
slip, Cheque book, Cash balance book. The clearing in Karachi at MCB or
other banks is being done through NIFT (National Institutional Facilitation
Technology).

Bank provides this facility to the people who need advance money to meet
their requirement. Party dealing with other banks financial condition of
borrower business and as a first step credit proposal is being made.MCB
provides advances, which are two types; Secured Advances & Unsecured
Advances. MCB usually classified advances in to following types
Agricultural Advances, Commercial Advances, Industrial Advances.
Commercial Advances are of following types:

Demand Finance, Cash Finance, Foreign bills purchased, Finance against

imported goods, Finance against foreign bills, Export Refinance Part I (Pre
Shipment) & others. Banks Agriculture division deals with the agriculture
advances. Bank provides the Agriculture Advances in order to enhance
and support the agriculture sector of the country; Farm Credit &Non Farm
Credit.

In foreign exchange, MCB is dealing Foreign Currency Accounts, Foreign

Remittances, and Foreign Bills for Collection, Imports & Exports

Foreign currency accounts & the foreign currency department deals with
the following types of accounts; Smart Dollar account, Current account,
Saving bank account, Term deposit. Foreign accounts are convertible on

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floating rate available to the bank. Letter Of Credit facility is being provided
by MCB in foreign exchange.

INTRODUCTION OF SECTOR

The word 'Bank' is said to have been derived from the words Bancus or
Banque or Bank. This history of banking is traced to as early as 2000 B.C.
Banking in fact is primitive as human society, for ever since man came to
realize the importance of money as a medium of exchange, the necessity
of a controlling or regulating agency or institution was naturally felt. The
priests in Greece used to keep money and valuables of the people in
temples. These priests thus acted as financial agents. The origin of
banking is also traced to early goldsmiths. They used to keep strong safes
for storing the money and valuables of the people. The first stage in the
development of modern banking thus, was the accepting of deposits of
cash from those persons who had surplus money with them.

The goldsmiths used to issue receipts for the money deposited with them.
These receipts began to pass from hand to hand in settlement of
transactions because people had confidence in the integrity and solvency
of goldsmiths. When it was found that these receipts were fully accepted in
payment of debts; then the receipts were drawn in such a way that it
entitled any holder to claim the specified amount of money from
goldsmiths. A depositor who is to make the payments may now get the
money in cash from goldsmiths or pay over the receipt to the creditor.
These receipts were the earlier bank notes. The second stage in the
development of banking thus was the issue of bank notes.

The goldsmiths soon discovered that all the people who had deposited
money with them do not come to withdraw their funds in cash. They found
that only a few persons presented the receipts for encashment during a
given period of time. They also found that most of the money deposited
with them was lying idle. At the same time; they found that they were being
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constantly requested for loan on good security. They thought it profitable to

lend at least some of the money deposited with them to the needy persons.
This proved a profitable business for the goldsmiths. They instead of
charging safe keeping charges from the depositors began to give them
interest on the money deposited with them. This was the third stage in the
development of banking.

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 non-Muslims 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 Australian 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 favor 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.

State Bank of Pakistan

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Commercial Bank of Pakistan

Saving banks

Cooperative banks

Specialized credit institutions

Commercial banks have been the most effective mobilizers of savings and
have been providing short-term requirements of working capitals to trade,
commerce and industry.

Up to December 31, 1973, there were 14 Pakistan commercial banks that

functioned all over the country and in some foreign countries through a
network of branches. All these commercial banks were nationalized in
January 1, 1974, and were recognized and merged into the following five
banks:

National Bank of Pakistan

Muslim Commercial Bank Limited

Habib Bank Limited

United Bank Limited

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

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done reasonable growth in deposits from the establishment of Pakistan.

Besides this growth, specialized credit and financial institutions have also
developed over the years.

The Government of Pakistan in the late 90’s introducing the need for the
privatization of State owned banks and companies.The private sector has
accepted the challenge and most of the banks are privatized 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. Throughout the period of banking history the banks have
been expanding rapidly and achieved the desired goal of progress.

THE MUSLIM COMMERCIAL

BANK LIMITED

HISTORY:

MCB was founded by ADAMJEE Group in Calcutta on July 9, 1947. MCB

is not an overnight success story rather good track of services are
responsible for the leaps and bounds progress. 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 66-year legacy of trust in its customers and the

citizens of Pakistan.The performance of MCB was badly affected by

bureaucrat Government. In January 1974, MCB was nationalized by Bhutto
Government following the bank act 1974 subsequently in June 1974
Premier Bank Limited merged with MCB.

PRIVATIZATION:

When privatization policy was announced in 1990, MCB was the first to be
privatized upon recommendations of World Bank and IMF. The reason for
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this choice was the better profitability condition of the organization and less
risky credit portfolio which made it a good choice for investors. On April
8th, 1991, the management control was handed over to “NishatGroup” (the
highest bidders). Initially only 26% of shares were sold to private sector at
Rs. 56 per share.

MCB besides being money financial organization have rendered invaluable

services in the economics and social developments of our country. MCB
today, represents a bank that has grown with time, experience and
Pakistan. A major financial institution, in scope and size, it symbolizes a
fully-grown tree, Evergreen, Strong, and firmly rooted.

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“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 with confidence in us.”

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DEVELOPMENTS:

After privatization, the growth in every department of the

bank has been observed. Following are some key
developments:

Launching of different deposit schemes to increase

saving level

Increased participation on foreign trade

Betterment of branches and staff service level

Introduction of Rupee Traveler Cheques& Photo Credit

Card for the first time in Pakistan

Extended use of information technology which is evident

from the fact that there are 768 fully automated
branches, more than 250- online branches (integrated networking), 151
ATMS in 27 cities nationwide and a M.C.B continuously innovate new
product.

“HEAD OFFICE”

I.I Chudrigar Road of Karachi has same importance in Pakistan’s economy

as of the Wall Street in world economy. The division working under MCB
Head office is as follows:

Administration

Credit Management

Investment Banking

Human Resource

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Information Technology

Corporate Planning & Budgeting

Finance & Treasury

International Division

Inspection & Audit

Law Division

Marketing & Development

Trustee Division

Under the President an Executive Committee and a Credit Committee

works. All the matter of the bank join to the board of director are presented
to the executive committee which is responsible for daily operation of the
bank .The request for credit exceeding the General Manager power is
approved by the Credit Committee. Under the area Executive is the
General Manager who is the in charge of the Circle Office. Under the
General Manager is the Zonal Manager and then the Branch Manager. At
present, there are 20 circles, 47 regions and 1200+ branches. Before
privatization there were Provincial Chiefs for all the four provinces. But this
management now has abolished the provincial officers and improved the
efficiency of the bank.

“CIRCLE OFFICE”

The working of circle office is to control and regulate the functions of

branches which are under in its control. The functions of circle office are to
mobilize the deposits and receive reports from branches. Circle office is
like a mini head office. Agents and correspondents of MCB are in all
commercial cities of the world. Circle office is divided in the following
division:

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Credit Management

Audit & Inspection

Human Resource

Marketing & Development

“MANAGEMENT OF ORGANIZATION”

MANAGEMENT OF BANK:

Mian Mohammad Mansha Chairman

S.M. Muneer Vice Chairman

Imran Maqbool President & Chief Executive

Tariq Rafi Director

ShahzadSaleem Director

Sarmad Amin Director

MianRazaMansha Director

Aftab Ahmad Khan Director

MianUmerMansha Director

Dato’ Seri Ismail Shahudin Director

Datuk Abdul Farid Bin Alias Director

Ahmad AlmanAslam Director

Muhammad Ali Zeb Director

AUDIT COMMITTEE:

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Tariq Rafi Chairman

Aftab Ahmad Khan Member

Dato’ Seri Ismail Shahudin Member

Ahmad AlmanAslam Member

CHIEF FINANCIAL OFFICER:

Salman ZafarSiddiqi

COMPANY SECRETARY:

Syed MudassarHussainNaqvi

“ORGANIZATIONAL STRUCTURE”

As MCB is a banking company listed in stock exchange therefore it follows

all the legalities which are imposed by concerned statutes Mian
Muhammad Mansha is Chairman of the company with a team of 10
directors and 1 vice chairman to help in the business control and strategy
making for the company.

Operational Management of the bank is being handled by a team of 15

professionals. This team is also headed by Mr. Imran Maqbool. The
different operational departments are Consumer Banking & IT div;
Financial & Inter branch div; Banking operations div; HR & Legal div;
financial control & Audit div; Credit management div; Commercial Banking
div; Corporate Banking div; Treasury management & FX Group and lastly
Special Assets Management (SAM) Group.

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For effective handling of branches, it has been categorized into three

segments with different people handling each category. These categories
are:

Corporate Banking

Commercial Banking

Consumer Banking

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CORPORATE BANKING:

These are branches which have an exposure of over Rs. 100 million.
Usually includes multinational & public sector companies.

COMMERCIAL BANKING:

The branches which has a credit exposure of less than Rs. 100 million but
having a credit portfolio of more than Rs. 20 million (excluding staff loans).

Usually branches in large markets and commercial areas come under this
category.

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Chairman

Mian Muhammad Mansha

President&CEO

Imran Maqbool

Retail Corporate Virtual Islamic Privilege

Banking Banking Banking Banking Banking

Group Group Group Group Group

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“GENERAL BANKING”

It is backbone ofbanking. It is one of the major department of MCB. It

further consists of following departments:

Operations Department

Credit Department

Remittance Department

Clearing Department

Cash Department

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“DEPARTMENTS WHERE INTERNSHIP WAS CARRIED OUT”

Operations Department

Clearing Department

Remittance Department

Credit Department

“OPERATIONS DEPARTMENT”

In Operations department I was under supervision of Mr. ArifMehmood,

Operational Manager. And I learnt to open accounts of different types and
nature which are as follows:

TYPES OF ACCOUNTS:

Single& Joint

Sole Proprietorship

Partnership

Private Limited

Public Limited
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SINGLE& JOINT:

Only one person can operate this a/c. An individual who can fulfill the
requirement of bank can open this a/c. We can call it a personnel or
individual a/c. In joint account all the conditions remain same but copy of
family member is not needed. The requirements for this type are:

Account Opening Form

2CNICCopy of Applicant

CNIC Copy of Family Member

Specimen Signature Card

Source of Income (Any Document Evidence)

Minimum Deposited Balance

Copy of Utility Bill(incase of Resident of outsidethe City)etc

SOLE PROPRIETORSHIP:

In case of Sole Proprietorship a/c applicant mentions that he is doing a

business by his own. Instructions are given for Sole Proprietorship a/c such
that the account shall be operated by the sole proprietor. The requirements
for this type are:

Account Opening Form

2 CNICCopy of Applicant

CNIC Copy of Family Member

NTN Certificate Copy

Specimen Signature Card

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2 Letter Head (1 for Account opening Request and other for Bank
Declaration).

PARTNERSHIP:

For Partnership a/c along with the application form other requirements
needs satisfied. The requirements for this type are:

Account Opening Form

CNIC Copy of Partners (Attested by Notary Public)

Partnership Deed Copy (Attested by Notary Public)

Registration Certificate

NTN Certificate Copy

Request of Account Opening on Letter Head

Authority Letter

Specimen Signature Card

Minimum Deposited Balance etc.

PRIVATE LIMITED:

Such type of account is opened in the name of the businesses having

private limited concern and mostly medium business enterprises open such
kind of accounts. All the board of directors have to submit the declaration
regarding the account operator on the company pad and with the rubber
stamp with the signature of the all the members of the board of directors. In
case of any change in directors bank must be informed regarding that. In
case funds are borrowed by the company all the directors approval is

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necessary rather not only the authorized member who can be the operator
of the account.

Account Opening form

Memorandum of Association

Article of Association

Certificate of Incorporation

List of Director in Form-29

Attested CNIC copies of Directors

Board of Directors Resolution

Specimen Signature Cardetc

PUBLIC LIMITED:

Public Limited A/C type of account is opened in the name of the

businesses having Public limited concern and mostly medium business
enterprises open such kind of accounts. And terms regarding board of
directors are the same as of private limited but “Certificate of
Commencement” also included.

NATURE OF ACCOUNTS:

Current Account

PLS Saving bank A/C

Saving 365 A/C

Basic Banking A/C (BBA)

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CURRENT ACCOUNT:

In this type of accounts the client is allowed to deposit or withdraw money

as and when he likes. He may, thus, deposits or withdraws money several
times in a day if he likes. There is also no restriction of amount to be
deposited or withdrawn. However, there is requirement of minimum
balance maintenance of Rs. 1000/-. Usually this type of account is opened
by the businessmen. No profit is paid by the bank and no service charges
are deducted by the bank on current deposits account. These types of
deposits are also exempt from compulsory deduction of Zakat.

PLS SAVING BANK A/C:

This account was started in 1980s after the issuing of banking ordinance in
1980 by Zia Government to develop Islamic banking in Pakistan. In this
case customer would be responsible for bearing profit as well as loss. The
bank would be within its rights to make investment of credit balances in the
PLS saving accounts in any 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.

Minimum balance is Rs.1000

Zakat deducted on @ 2.5% (If Zakat Exemption declaration is not given)

Profit calculated on average balance

Profit paid on semi annually basis

SAVING 365 GOLD ACCOUNTS:

This account is newly developed of MCB and it provides flexibility of saving

account to business people. Profit on deposits will be payable on daily
product basis on balance of Rs. 500,000/- and above. There will be no

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restriction on withdrawal from the account. Zakat and withholding Tax is

also applicable on the account opened under this scheme.

Minimum balance is Rs.500,000.

Below minimum balance, profit calculation ignored

Profit calculated on daily basis

Profit paid on monthly basis

Zakat deducted on @ 2.5% (If Zakat Exemption declaration is not given)

BASIC BANKING A/C (BBA):

Introduced specially for salaried persons& Students.

Minimum balance is Rs.1000.

No service charges.

Only two transactions allowed, in one month.

For more than two transactions Rs.35/- per transaction.

Single natured A/C.

ACCOUNT OPENING PROCEDURE:

Following steps are involved in A/C opening;

ACCOUNT OPENING FORM:

Firstly the customer fills the account opening form and provides all the
information as provided above. I experienced to fill this form.

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STAMPING:

Then it is stamped. Stamps like, Sign Admitted Stamp, Sign Verified

stamps etc are affixed.

ACCOUNT NUMBER:

When all the procedures are completed than the final approval is taken
from the Branch Manager. After obtaining approval, an account number is
allotted to the customer and all the information is entered in to the
computer and KYC is filled up. Then that account number is writing on the
Cheque Book, Specimen Signature cards and account opening form.

AOF CHECK LIST:

It is prepared by checking all the required documents for accounting

opening are completed and have attached with the account opening form.

KNOWING YOUR CUSTOMER:

After entering information KYC is filled up. It should be ensured that at the
time of filling information in KYC, a customer should be physically present.
After this all information is saved in system. I filled KYC form also.

APPROVAL:

This account is further approved by Manager Operations.

RISK RATING SHEET:

Customer Risk Rating sheet is also prepared whether customer is at Low

Risk, Medium Risk or High Risk according to specified parameters given in
the form.

SEND FORM TO HEAD OFFICE:

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After fulfilling all the requirements and verifying the forms from operation
manager the account opening form is sent to Head Office and make
request to issue the printed cheque book.

LETTER OF THANKS:

Subsequent to the opening of an account, letter of thanks should be sent

under registered post or courier service to the customer.

ISSUANCE OF A CHEQUE BOOK:

After opening an a/c with the bank, the a/c holder cannot immediately start
operating his/ her account. The cheque book is issued, when a customer
will submit a copy of letter of acknowledgement duly signed by him, in case
of new account. And for subsequent issuance of cheque book. He/she has
to make a request once again in the name of bank for the issuance of
cheque book and he should mention title of A/C, A/C number, sign it
properly and mention the number of leaves requires. Normally a cheque
book having at least 25 leaves is issued but it can also be of 50 leaves/100
leaves.

CLOSING OF AN ACCOUNT:

There is no. of reasons of closing an account. Some are listed below:

If customer desires to close his account

In case of death of one account holder.

Bankruptcy of the account holder.

If an account contain nil balance or not up to the requirement of rules.

Before closing any account, bank send letter to the account hold for
informing him that his account is going to be closed. There is need an
approval form higher authority to close any account.

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“CLEARING DEPARTMENT”

In clearing department I worked under supervision of Mr.Iftikhar and Sadat

Ullah.In clearing department I have learned about inward and outward
clearing and I also learnt about:

MEANING OF CLEARING:

The word clearing has been derived from the word “clear” and is defined
as,

“A system by which banks exchange cheques and other negotiable

instruments drawn on each other within a specific area and thereby secure
payment for their clients through the Clearing House at specified time in an
efficient way.”

CLEARING HOUSE

It is a place where cheques are presented, collected from bank branch. It is

one of the services provided by NIFT to other commercial banks. NIFT acts
as a clearinghouse.

NIFT:

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NIFT stands for National Institutional Facilitation Technologies. Clearing

House of SBP has shifted a tiresome part of its work to a private institution
named NIFT. NIFT collects cheques, demand drafts, Pay orders, Travelers
Cheques, etc. from all the branches of different banks within city through its
carriers and send them to the branches on which these are drawn for
clearing. After the branches approve the instruments drawn on them, NIFT
prepares a sheet for each branch showing the number for instruments and
amount in its favor and drawn on it and sends it to each branch. A similar
sheet for each bank is also sent to clearing house of SBP where accounts
of banks are settled in the same manner.

LEARNING IN CLEARING DEPARTMENT

My learning in clearing department was of following things:

Procedure of clearing a cheque

Checking of cheques

Inward and outward clearing

Different reasons of returning a cheque.

Types of clearing stamps

CLEARING PROCEDURE:

Instruments collected are treated as Transfer, Transfer Delivery, Clearing,

and Cheque collection.

CHECKING OF CHEQUES:

When the instruments are collected from the clientFollowing things are
checked

Cheque date

Instrument should be neither stale/ nor post-dated.

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Title

Amount in figures and words should be the same

There should be no cutting and overwriting on the cheque

Instrument should not bear any unauthorized alteration.

Cheque is crossed.

TRANSFER:

When the instruments are collected and paid by the same branch, it is
called transfer.

TRANSFER DELIVERY:

When instruments are collected and paid by two different branches of the
same bank situated in the same city, it is called transfer delivery.

A cheque is processed under transfer delivery when it has crossing stamp

and is from local branch of MCB.

CLEARING:

Instruments 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, are processed for clearing.

Inoutward clearing when cheque is received two copies of voucher SF-37

are prepared, one copy and instruments along with clearing stamp,
realization stamp, add list and two vouchers of clearing summary are sent

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to NIFT in a sealed bag. And clearing records are recorded in clearing

register.

In Inward clearinginstrumentsreceived from NIFT are posted in Computers

after checking.

CHEQUE COLLECTION (C.C):

When cheque is from another city then it is grouped as C.C.Such

instruments are processed as cheque for collection. In this procedure SF-
37 form is used in Cheque collection. Original voucher with cheque,
stamped as C.C along with C.C number is sent to main branch of the
responding city which is further sent to NIFT. Whereas Carbon copy with
Pay-In-Slip is taken by bank for record purposes.

PAY-IN-SLIP:

It is used for two purposes:

Whenever we want to deposit cash in our account then pay-in-slip is used

by writing amount on it and depositing it to cashier along with money.

Whenever we have cheque from any party to be collected in our account

we fill pay-in-slip. One part is attached with cheque and another is given to
cheque holder as a receipt.

NOTE:

In inward clearing sometimes cheques are not passed due to some

reasons then cheques are sent back to NIFT along with cheque return
memo. Some of these reasons are,

Cheque incomplete

Clearing stamp Required.

Drawer’s sign incomplete

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Drawer’s sign different from specimen

Post Dated

Payment
stopped
by drawer.

Amount
in words and figures differ.

Insufficient funds etc.

“REMITTANCE DEPARTMENT”

REMITTANCE:

Remittance is transfer of funds from one place to another or from one

person to another. It is an important service provided by banks to
customers as well as non-customers. Since it is not a free service it is a
source of income for the bank.

PARTIES INVOLVED IN REMITTANCE

Four parties involved in remittance: -

Remitter, Remit tee, Issuing Bank, Paying Bank

REMITTER:

One who initiates, or requests for a remittance. The bank charges him a
commission for this service. He may or may not be the branch’s customer.

REMITTEE:

A Remit tee is also called the beneficiary, or the payee. The person in
whose name the remittance is made. A Remit tee is also the one who
receive the payment.

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ISSUING BANK:

The bank that sends or affects the remittance, through demand drafts,
telegraphic transfers, or Mail Transfers

PAYING BANK:

Paying Bank also knows as the drawee branch. The branch from where the
instrument is drawn.

TYPES OF REMITTANCE:

Remittance is classified into following four types

Inward remittance, instruments received for payment

Outward remittance, issuing instrument to the responding branch

Inland remittance, within same country

Foreign remittance, from one country to another country

INSTRUMENTS USED IN REMITTANCE:

Demand Draft (DD)

Pay Order (PO)

DEMAND DRAFT:

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. DD applicant or recipient, who might not be an A/C holder
present it to another bank at a different place requesting it to pay on

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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.

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 can’t 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.

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.

CALL DEPOSIT RECEIPT (CDR):

It is an instrument like Cheque issued by the bank on account of a

customer & in favor of a person, to pay the specified amount. CDR’s are
issued to make payments, especially when a company goes for some
tenders or for purchase of government securities or any contracts with
others.

DOCUMENTATION:

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The party who requires a CDR will get a printed application from the bank.
He will fill it and it is free of cost to the
customer. The bank enjoys the benefit of
keeping funds deposited until the payment is
not made.

RUPEES TRAVELER CHEQUE (RTC):

RTC is the traveler chequeare acceptable at

all branches of MCB, and they carry dozens of
benefits. Security is always being an important issue of concern. TCs
provide maximum security while carrying big amounts.

DOCUMENTATION:

First of all RTC-10 is given to customer. It is filled and then cash is

deposited to cash department. One copy is for office and one copy is given
to the customer and RTC are issued at that time.

“ADVANCES / CREDIT DEPARTMENT”

In credit department I worked under supervision of Mr.IrfanAhmed.In credit

department I have learned about Approval of finance to customers, Bank
Guarantee and I also learnt about documentation which is used for
approving loans.

Different banks provide loan facility to general public, companies etc. but
MCB provides two types of loans that are as under:

Fund Base Loans

Non Fund Base Loans

FUND BASE LOANS:

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In this type of loans cash is directly involved. Bank provides loans in shape
of cash. Bank gives credit or limit facility to customers that needed it. In
fund based loans there are two further classifications:

Long Term Loans:

Lease facility for car

Short Term Loans:

Running Finance (R/F)

Cash Finance (C/F)

RUNNING FINANCE:

The MCB provides overdraft facility to the customers for the working
capital requirement. These are the loans which are given to those customers
whose business runs throughout the year or continuously. Its duration is one year
and it is for running business.

In advances there are two securities one is known primary security and
other is secondary or collateral security.

Hypothecation of stock is the primary security and mortgage is the

secondary or collateral security.

SECURITIES FOR FUND BASE LOANS:

Hypothecation of Stock

Mortgage

Pledge

HYPOTHECATION OF STOCK:

In hypothecation of stock the possession of goods and the title remains in

the favor of customer. Without the permission of the bank the customer

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can't sell the stock. It is the restriction of the bank that in warehouse there
should be stock according to the instructions of bank every time. The
drawback of this is that there is no check and balance of stock from the
bank. The customer can easily sell his stock.

MORTGAGE:

The bank can mortgage the immovable property like land, building etc as a
security. In mortgage the possession remains to customer and title of
goods remains to bank.

PLEDGE:

In this, bank requires the moveable property of the customer as a security

like stock, vehicle etc. possession of goods remains to customer and title in
the favor of bank. The bank hires a muqaddam [Guard] and the key of
store where the stock is pledged is in the security of bank. When customer
wants to sell the stock then he pays the amount equivalent to stock which
he wants to sell. After receiving amount bank releases his stock for the
same amount.

FUND BASE LOANS:

In non fund based loans cash is not directly involved but bank gives
guarantee on the behalf of customer. Bank works as a third party and
known as Guarantor. Bank provides a security to customer when he needs
and someone requires from the customer.

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DOCUMENTS REQUIRED BY BANK FOR ADVANCES:

Request of customer

Credit application from bank

Basic borrower sheet

Net worth certificate

CIB report

Financials

Account statement

Property evaluation report

For sale value certificate

Property documents

Title deed [fard]

Property map

CNIC

Account opening form

Undertaking

Following steps are there:

Information required by the bank

Preparation of credit proposals

Sanction advice

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INITIAL INFORMATION:

Following information is required to be submitted to bank.

Nature & structure of borrower business

Names of proprietors, partners or directors

Detail of all firms or companies associated with borrower.

Financial condition of borrower business

An assessment of his business abilities

Accurate and up to date financial statements of last two years for

comparison purposes

Market report on the borrower where borrower has maintained an account

with another bank, a report from his bank should also be obtained.

A report from credit standing bureau of State Bank of Pakistan

PREPARATION OF CREDIT PROPOSAL:

At first a formal application for credit approval is obtained from the party
along with complete group position. The party’s credibility report is
obtained from the bank with which the bank is doing its business. The
party’s credibility report is also taken from the Head office of Trade
Information Division.

For obtaining credit, party has to submit the last two years Balance Sheet
and Profit & Loss statement duly attested by authorised auditors. If the
party is also involved in export or import business then the bank also
considers the data of three years about import & export. Current debt and
equity ratio is also calculated by the bank. The type of data required to
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prepare the credit proposal is to be gathered from the different

departments. Some data is obtained from the foreign Exchange
department. Some data is available in Advance Department. The purpose
of obtaining Credit should be explained clearly. The securities offered by
the party to the bank are also evaluated. In case of pledging of property in
shape of land or building the complete evaluation of the property should
also be attached.

After all the necessary documents for applying for advance is fulfilled by
the party then the case is sent to Manager for approval. If the credit limit is
in his range then he can decide over it otherwise the case is forwarded to
seniors. If there is any discrepancy then the party is informed of it.

Sanction Advice:

When the documents required are complete and there is no ambiguity then
the party is advised that their credit or loan is approved and will be
available to you soon.

The form contains following information:

Nature and amount of limit

Purpose

Security/ Collateral

Margin (%).

Mark up/ Charges

Validity

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“OTHER DEPARTMENTS”

There have been some departments in which internship was not allowed,
these departments were

CASH DEPARTMENT

And in TECHNOLOGY DEPARTMENTI got information about ATM and

Online Banking and just filled their forms because ATM work was not
allowed to internees.

“CASH DEPARTMENT”

The cash department is the most important

department of the bank. In cash department
both deposits and withdrawals go side by side. This department deals with
cash deposits and payments.

The following books are maintained in the Cash Department:

Cash Receipt Book

Cash Payment Book

Cash Balance Book

The officers in this department are called teller and there were 2
tellersMr.Bashir and Mr.Owais at the counter. This department is involved
in two activities:

Cash Deposits

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Cash Payments

CASH RECEIPT BOOK:

The cashier is responsible to receive both the paying-in-slip and cash from
the depositor. For depositing the cash into customer’s accounts, there is
need to fill in the paying-in-slip giving the related details of the transaction.
The cashier check the necessary details provided in the paying-in-slip and
accounts the cash and tallies with the amount declared in the slip then
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.
The 2nd cashier posts the transaction entries in computer ledger. After
posting these entries, computer display before posting balance and after
posting. Cashier assigns the stamp “POSTED” on the voucher to show
voucher transaction entries are posted.

CASH PAYMENT BOOK:

The only instrument that can be used to withdraw an amount from an

account is the Cheque book. No payments are made by another
instrument. When cheque is valid in all respects, the cashier enters the
necessary inputs in the computer and posts 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 at the same time maintains the “Cash Voucher Received
Record Sheet”. Then inspects the signature of the customer, cancellation
mark of checking officer and stamp of “POSTED” is placed on cheque
before he hands over the cash to customer.

CASH BALANCE BOOK:

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At the end of the working day cashier is responsible to maintain the cash
balance book. The cash book contains the date, opening balance, detail of
cash payment and received in figures,

The consolidated figure of receipt and payment of cash is entered in the

cash book and the closing balance of cash is drawn from that i.e.

Opening Balance of Cash + Receipts - Payments = Closing Balance

“TECHNOLOGY DEPARTMENT”

It includes;

Mobile Banking

Phone Banking

Online Banking

ATM

MOBILE BANKING:

It has been recently launched and it helps in getting accounts details and
making transactions using mobiles.

PHONE BANKING:

"MCB Phone Banking” is available to all customers on a countrywide basis.

Customers can dial 111-000-622(without any city code/prefix) from their
respective cities.
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Customers enjoy 24x7 Round the Clock Phone Banking Services. MCB is
the first bank in Pakistan to offer Centralized connectivity.

ONLINE BANKING:

MCB now offers the facility of on-line banking to its customers through its
country wide network of branches. Customers can use the ATMs or the
banking counters of any branch for day-to-day banking needs, irrespective
of branch where they maintain their accounts.

There are now all the branches linked through this

system and they can transact with each other directly
using computer systems and the software named
“SYMBOLS” at their own branches.

ATM (Automatic Teller Machine):

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 / chequebooks.MCB has the largest ATM network in the
country at the moment with almost one ATM at each online branch and
also ATM terminals at International Airports covering many cities of
Pakistan

ATMs are operated through a card issued to the valued customers and by
application of Personal Identification Number (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.

Silver 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.

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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.

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.

“FINANCIAL ANALYSIS OF MCB”

“RATIO ANALYSIS”

Ratio analysis is an important and old technique of financial analysis.

Ratios are important and helpful in the reference that:

These simplify the comprehension of financial statement and tell the whole
story of changes in the financial conditions of the business.

These provide data for inter-firm comparison. The ratios highlight the
factors associated with successful and unsuccessful firms, also reveal
strong and weak firms.

These help in planning and forecasting these can assist management in its
basic functions of forecasting, planning, coordination and control.

These help in investment decision in case of investor and lending decision

in case of Bankers etc.

However, the ratios are only indicators, they cannot be taken as final
regarding good or bad financial position of the business other things have
also to be seen.

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Great care is needed while calculating meaningful ratios and in interpreting

them. Although there are several ratios, which an analyst can employ yet
the type of ratios he would, use entirely depends on the purpose for which
the analysis is done i.e., a creditor would keep him abreast about the ability
of a concern to cover up its current obligations and so would care about
current and liquid ratios, Turnover of receivables, coverage of interest by
the level of earnings etc.

ADVANTAGES OF RATIO ANALYSIS:

It helps to give comprehensive financial statements in evaluating aspects

of any undertaking in respect of financial health, operations efficiency and
profitability. It gives a chance of inter-firm-comparison to measure
efficiency and helps management to resort to some remedial measures. It
provides a good help in decision making for investors and the financial
institutions.

CATEGORIES OF RATIO ANALYSIS:

Liquidity ratios

Activity ratios

Debt ratios

Profitability ratios

Market ratios

LIQUIDITY RATIOS

The liquidity of a firm is measured by its ability to satisfy its short-term

obligations as they come due. Liquidity refers to the solvency of the firm’s
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overall financial position i.e. the ease with which it pays its bills. Due to low
or declining liquidity firm moves towards financial distress and bankruptcy

Liquidity Measures are:

Current ratio

Quick (acid-test) ratio

CURRENT RATIO:

The current ratio, one of the most commonly cited financial ratios, measure
the firm’s ability to meet its short-term obligations. It is expressed as
follows:

Current assets
Current ratio = Current liability

Years 2015 2014 2013

Current ratio 1.69 1.53 1.57

RESULT:

From the above ratios it is clear that the firm’s investment in current assets
has increased. In 2008 it is in better position to pay its obligations as they
come due. But in three years we can see that the firm has the ability to pay
its current liabilities efficiently. The standard for this ratio is 2:1 it is
calculated by the current assets by total of the current liabilities.

This ratio is below the standard. The management should take steps to
improve the short- term financial position of the firm.

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DEBT RATIO

The debt position of a firm indicates the amount of other people’s money
being used to generate profits. In general, the financial analyst is most
concerned with long term debts, because these commit the firm to a
stream of payment s over the long run.

The debt ratio measures the proportion of total assets financed by the
firm’s creditors. The higher this ratio the greater the amount of other people
money being used to generate profit. The ratio is calculated by following
formula

Debt ratio = Total liabilities

Total assets

Years 2015 2014 2013

Debt ratios 0.8649 0.8475 0.8475

RESULT:

The ratio indicates the more than half of the assets financed by the debt.
This ratio is almost showing the same trend throughout the previous three
years. Debt ratio indicates the greater the risk and more financial leverage
it has. It also shows that firm has paid some portion of the debt during the
year 2008.

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MARKET RATIOS

Return on total assets

Return on equity

Earnings per share

RETURN ON TOTAL ASSETS:

It measures the overall effectiveness of management in generating profits

with its available assets. The higher the Return on total assets better will
be the performance.

Earning available for common stockholders

Return on total assets =
Total assets

Year 2015 2014 2013

ROA 2.76% 2.95% 3.18%

RESULT:

The return on investment of the firm is 2.76% in 2013. It is less than the
previous year. It shows that firm generates Rs.2.76 for each Rs.100 of the
investment which is very poor for the company progress.

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RETURN ON EQUITY:

Earning available for common stockholders

Return on total assets =
Total Equity

Year 2015 2014 2013

ROE (%) 23.09% 25.07% 26.23%

RESULT:

The return on equity of the firm is 23.09% in 2013. It is less than the
previous year. It shows that firm generates Rs.23.09 for each Rs.100 of the
investment made by the partners or shareholders of the company (which
are privately owned by four brothers).

EARNING PER SHARE:

Year 2015 2014 2013

EPS 21.62 23 20.95

RESULT:

This ratio indicates the amount of income earned by the common

stockholders. Above figures clearly show the progress of the company and
it maintains this ratio more than Rs.20 which is good for the investors.

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“SWOT ANALYSIS”
“The overall evaluation of a company’s strengths, weaknesses,
opportunities and threats”

Strengths (S) include internal capabilities, resources and positive

situational factors that may help the company to serve its customers and
achieve its objectives.

Weaknesses include internal limitations and negative situational factors

that may interfere with the company’s performance.

Opportunities are favorable factors or trends in the external environment

that the company may be able to exploit to its advantage.

And Threats are unfavorable external factors or trends that may present
challenges to performance.

A scan of the internal and external environment is an important part of the

strategic planning process.The SWOT Analysis provides information that is
helpful in matching the firm’s resources and capabilities to the competitive
environment in which it operates.

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“MCB’s SWOT ANALYSIS”

“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.

The joining of experienced people, advanced management, advance setup

and facilities gave MCB an edge over its competitors.

MUSLIM COMMERCIAL BANK’S IMAGE:

MCB is a reputable financial organization and is well known all over the
Pakistan. Perception is of producing a high quality services.

CUSTOMER CARE:

The Bank not only provides high quality services but it also look for the
comfort and convenience of the clients, MCB always preferred their
customers.

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MARKET SHARE:

MCB has covered much of the potential market and the net profit is
increasing years after years. Deposits and advances have sufficiently
increased.

LARGE NUMBER OF DIVERSIFY PRODUCTS:

This is also its main strength as it has diversified in many products such as:

Debit Card

Visa Card

Car Financing

Agriculture Financing

BRANCH NETWORK

It is the greatest strength of the Bank. In 2004, five more branches were
added to the network and by the end of the year 2013 the total number of
branches was raised from just 1188, but today MCB has 1208 branches in
Pakistan and 09 branches in other countries in the world. MCB has also
planned to open more branches in next coming years.

SOUND MARKETING:

Skillful marketing of the products is being achieving countrywide goals of

Muslim Commercial Bank Limited.

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PHONE BANKING:

Every account holder can conform its balance on Phone and may ask for
any query. There are also 24 hours help lines for customers.

MOBILE BANKING:

It has been launched recently. It helps in getting accounts details and

making transactions using mobiles.

HIGHLY AUTOMATED BANK:

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.

FASTER BANKING SERVICE:

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.

INTERNATIONALLY DESIGNED PRODUCTS:

MCB’s products are internationally designed products. These are valuable

and operational in all over the world.

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CONTRACT WITH CIRRUS:

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.

“WEAKNESSES”

ADVERTISEMENT:

The majority of people are not well aware about the products of MCB.
Therefore it should advertise extensively especially RTC and Master
Cards.

ACCOMMODATE BEHAVIORALLY:

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.

MISMANAGEMENT OF TIME:

Mismanagement of time is another big mistake in MCB branches, the bank

official time of closing is 5:30pm but due mismanagement of time allocation
and work the staff is normally on their seats till 7:00 or 8:00 clock.

AND ALSO,

Costly documents are required for loan sanctioning.

Sometimes bank also never meets stated rate of profit

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“OPPORTUNITIES”

PRIVATIZATION:

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 184 million. Total number of personal accounts with all
scheduled banks as on December 31, 1997 is 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.

DIVERSIFICATION:

They may enter in Newbusiness or any other consumer-durable product in

order to promote their name, by introducing Loan for the students, small
businesses, and handicraft industry and new products for agriculture
sector.

SOME MORE OPPORTUNITIES:

Information technology

Credit cards can give more earning

Establishing more foreign Branches

They should introduce Student Finance Facility

They should also introduce mobile ATM

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“THREATS”

CHANGE IN GOVERNMENT POLICIES:

Change in government policies has 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.

COMPETITION:

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.

LOW INVESTMENT:

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.

STATE BANK REGULATION:

As the Bank introduces unique products so they face problem if State Bank
Of Pakistan employ taxes on them which force them to increase the rate of
Interest.

EXPECTATIONS OF THE PEOPLE:

Due to huge competition among those banks and MCB,, people are the
basic beneficiaries from it and thus their expectationstend to increase
about the products and the relative rate of interest thus creating a threat for
MCB.

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“PEST ANALYSES”

PEST analyses tell How Political, Economical, Social and technological

factors affect MCB. These are the external factors which affects the whole
organization.

POLITICAL-LEGAL FACTORS:

Stable government

Stable policies in favor of business

Improved relation with outside world

Law and order

UNSTABLE GOVERNMENT:

Due to this reason foreigners hesitate to invest their savings in banks, as a

result of economy of our country is going downward and banks suffer.

ADVERSE LAW AND ORDER SITUATION:

The situation of law and order is adverse. The policies are not very handy
and beneficial for the country. The Govt. passes such rules which are not
in the favor of bank e.g. The Govt. of Pakistan has passed a rule that if
anyone deposit more than Rs.25000 then he will be charged 0.30% on
deposits.

ECONOMIC FACTORS:

Pakistan's economy is going weaker and weaker. 9/11 has a great

influence on the economic crisis of all over the world. With economic
factors the bank influenced very much that are as under:

Impact of WTOforce to cost reduction methodology

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Low interest rate

Inflation

Low GDP growth

Budget deficit

Increase in Govt. duties

Fluctuation in exchange rates

SOCIAL FACTORS:

Social environment includes family, friends, a person's role and status. An

individual’s life directly by society and the person acts according to his or
her society. Cultural environment includes norms, values, religion,
conception and perception.

If we see the religion point of view then interest is not allowed that's why
most of the people hesitate to invest their savings in banks and yet they
are not aware of ISLAMIC BANKING

Traditional businessmen do not like the business with bank. They pay their
creditors through cash not through cheque. They do not want to get the
bank facilities.

TECHNOLOGICAL FACTORS:

Today is the era of technology. In the every aspect of life technology plays
an important role.

 Due to rapid change in technology every bank has to change its

technology to compete other ones.
 Increasing issue of securities due to technology resulted
increase in cyber crime. Cyber crime means manipulation. One
person can easily transfer amount from any other's account to
his account.
61 Hailey College of Commerce
University of the Punjab
Internship Report

“APPLICATION OF CLASS ROOM LEARNING”

During my internship of 8 weeks in Muslim Commercial Bank, Ltd Railway

Road Branch Lahore the knowledge given by my respected and devoted
teachers proved to be very helpful in understanding the environment in the
organization and working practically.

Following are some key points about application of my class room learning
in the organization:

The knowledge achieved from the subject “Business Communication”

helped me in understanding customer dealing i.e. how to deal with them?
How to understand their problems? etc

It also helped me in understanding the inter Organizational Communication

i.e. circulars, notices etc.

Also the Knowledge which I got from the subject “Computer application in
Business” also proved very useful.

Financial Management and Principles of Accounting helped me in

understanding the accounting terminologies which are used in bank e.g.
what is debit and credit vouchers? What are these for? And also in
understanding that how entries are made against certain heads.

I could do this only with the help of the knowledge provided to me in my

semestersof M.Comat Hailey College of Commerce, Punjab University
Lahore.

62 Hailey College of Commerce

University of the Punjab
Internship Report

“WHAT I HAVE LEARNT IN MCB”

The staff of the branch provided me the opportunity to work in the different
departments for the sake of practical knowledge. I feel highly indebted to
work in the Lahore township barkat chok branch the manager of that
branch Mr. Asif Rao, because I learnt a lot in that branch.

During my internship training in the MCB as I early mentioned that I have

worked in different departments &seats and learnt the following things:

How to deal with different types of customers

Account opening.

Cheque book issuance.

Outward clearing

Cheque for Collection

Different forms and vouchers filling

Documentation for granting loans

Experience of working in a well reputed organization.

63 Hailey College of Commerce

University of the Punjab
Internship Report

“SUGGESTIONS & RECOMMENDATIONS”

Following are some suggestions for Muslim Commercial Bank, Ltd.

ADVERTISING:

Bank must let potential customers know that all attractions for banking
exist. This is done by advertising on television and obtaining press
coverage, in conjunction with direct mail, window displays, leaflet in
branches and in appropriate other locations (such as hotels, shops, etc.)
and including leaflets in statement of accounts sent to existing customers
in the hope that they will tell potential customers about the services
provided by our bank.

INCREASED ATM’S LOCATIONS:

Some personal sector customers prefer not to come to branch. They

increasingly want to deal with the bank in other ways, such as home
banking or use of Automated Teller Machines (ATMs), which need to be at
every branch or some important shopping plazas and airports etc.

INCREASED SERVICES:

One way to retain the customers is to offer a wide range of services such
as tax advice, free life insurance equivalent to amount deposited, shares
portfolio management, fund management facility, etc., complimentary to
the core services. Banks must have a slightly different mix of services and
mean of providing these such that customers can choose the mix that suits
them best.

64 Hailey College of Commerce

University of the Punjab
Internship Report

MANAGEMENT OF TIME:

There should be a good management of time for the sake of employees i.e.
offering them free break hours instead of making them work in this time as
well.

GROWTH SCOPE FOR EMPLOYEES:

MCB should provide greater facilities to its employees, and give them
bonuses for their hard work and Promotions as well.There is a criticism on
the banking management that the salaries of the employees are
decreasing in every succeeding year due to rise of inflation. And I think this
will shake the confidence and working habit of the employees

ATTRACT CUSTOMERS:

The banking company should offer such policies which would attract
customers which are denied by other banking in the market.

JOB ROTATION AND PROMOTIONS:

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.

COMMUNICATION SYSTEM FOR EMPLOYEES:

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.

“IF I WERE MANAGER AT MUSLIM COMMERCIAL BANK”

65 Hailey College of Commerce

University of the Punjab
Internship Report

If I would be a manager at MCB I’ll take following steps;

I will apply such a communication system specially designed for employees

through they can share the problems regarding work environment.

Complete working and break hours will be offered so that employees can
work efficiently.

I will make it sure that some of the employees should be sent for training to
other countries and employees from other branches should be brought
here.

I will make promotions, job rotation and bonuses, an important part of

policies of MCB.

At every month’s closing when employees stay at branch even after

working hours, a dinner from bank will be offered.

To retain potential customers certain services will be provided and let them
know with advertising.

I will make it sure that Working environment, equipment, furniture and staff
dressing should be according to the modern banking style.

66 Hailey College of Commerce

University of the Punjab
Internship Report

“REFERENCES & RESOURCES”

To make this internship report data is taken from the following resources:

ONLINE RESOURCES:

Muslim Commercial Bank, Ltd http://www.mcM.Com.pk

State Bank of Pakistan http://www.sbp.org.pk

Pakistan Bureau of Statistics http://www.pbs.gov.pk

67 Hailey College of Commerce

University of the Punjab