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MCB Bank Limited

Internship Report on

MCB BANK LTD, RISALA ROAD BRANCH, HYDERABAD


An internship report submitted in partial fulfillment of the Requirements for the degree of Bachelor of Business Administration (Hons)

Prepared By

Pirbhat Abbasi 0804-BBA (Hons) 27


Department of Management Science FACULTY OF ECONOMICS, COMMERCE AND MANAGEMENT SCIENCES Hyderabad December 2011

MCB Bank Limited

ISRA UNIVERSITY HYDERABAD

DEPARTMENT OF MANAGEMENT SCIENCES

CERTIFICATE
This is to certify that Ms. Piribhat Abbasi D/O of Abdul Sattar Abbasi has worked under my supervision for the internship report on MCB Bank Limited, as partial requirement of the award of degree BBA (HONS) and the work is satisfactory.

Prof. Dr. Asandas Manwani Chairperson Department of Management Sciences ISRA University, Hyderabad

Ms. Hira Bachani Supervisor Department of Management Sciences ISRA University, Hyderabad

MCB Bank Limited

ACKNOWLEDGEMENT
Person is not a perfect in all the contexts of life; He/she has a limited mind and mind thinking approaches. It is the guidance from Almighty Allah that shows the man light in the darkness and the person find way in the light. Without this helping light, person is nothing but a helpless creation. The teaching of the Holy Prophet Muhammad (S.A.W) were also the continuous source of guidance for me especially his order of getting knowledge and fulfilling once duty honestly was key motivational force for me. I am also indebted to my family whose prayers and support in every walk of life helps me to obtain my goals successfully. And it is because of them that I am here today. I humbly want to thanks Our Dean, Prof. Dr. Muhammad Iqbal Bhatti, our Chairman Prof. Dr. Asandas Manwani (Faculty of Economics, Commerce and Management Sciences) and our teachers, for the guidance and aspiration provided by them. I offer sincere wishes to Maam Hira Bachani due to her able guidance which is really unforgettable. She gives her full support and precious time whenever we needed it. I am also thankful to the employees of MCB who provided me a friendly and knowledgeable environment through which I learned a lot. And Last but not least I am also thankful to all my friends and to all those who helped me in one way or the other and guided me in the preparation and compilation of this report in a presentable fashion.

PIRBHAT ABBASI ID: 0804-BBA27 ISRA UNIVERSITY HYDERABAD

MCB Bank Limited

PREFACE
Prerequisite of BBA study is to undergo internship. I got the opportunity to join the MCB Risala Road Branch, Hyderabad (for the said purpose) for a period of 6 weeks. To work in a bank, to acquaint with its working mechanism was a point of interest for me and Allah gave me a golden opportunity to complete my internship at MCB, one of the leading banks in Pakistan. I had a general idea about the banking, but once I practically started the internship in banking field I observed much about banking, I realized the importance and significance of commercial banking for the development of economy. To adjust myself in such a large commercial organization was not an easy task, but by the grace of Almighty Allah aids my internship in a befitting manner and I learned a lot about the overall banking field and this expanded my vision about the banking sector. This report is a thorough essence of my rigorous studies which I undergone through in a period of two months in MCB. I have exclusively studied and observed the operations/ functioning of the bank and tried my best to abreast myself with all the dimensions of the banks. The experience at MCB was great and interesting, officers were co- operative, hard working and manager manages all the things very well. The overall environment of bank is satisfactory and internship at MCB was also satisfactory as all the workers were very friendly and were providing all the information needed. But I humbly want to thanks following persons who have encouraged & guide me a lot. I learned very much under their guidance. Mr. Mohammad Yasir (Internal Control Officer) Mr. Zahid Husain Memon (Branch Operations Manager)

MCB Bank Limited

EXECUTIVE SUMMARY
I had done my internship at MCB Bank and during the course of my internship I have found that the role of banking in growth of the economy is sizable and significant. Economic history indicates that the banks have played a better role in supporting economic growth across the broad spectrum of countries. MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 1000 branches, over 400 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch. The main objective of MCB is the maximization of profits for the owners or shareholders. The maximum return increases the wealth of shareholders. For that purpose MCB tries to facilitate its customers in every possible way and provide several products and services to its customers including ATM cards, Mobile banking, Visa cards etc, according to the requirements or needs of their customers. Like any other business concern the entity of MCB is represented and controlled by its general body. This general body is known as Board of Directors which is based at the Principle Office in Lahore. MCB is divided into many different departments kike accounts, remittance, advancing, clearing, cash, foreign exchange and I.T departments which are further linked with each other for cash transfer, for each day transactions. These all departments are linked with each other in different ways. During the course of internship I learned about different functions performed by Remittances, Advances, Foreign Exchange and Customer Service Office department and bank as a whole. I also learned banks correspondence with their customers and within branches. I learned about documentation requirements and record keeping for different activities and processes, especially the documentation requirement for different kinds of financing facilities. MCB has some flaws like higher turnover of employees, lack of trained employees, both customers and employees are not much satisfied. MCB need to introduce new training programs for employees, introduce perfect reward and punishment system and increase salaries of employees because satisfied employees are key for satisfaction of customers.

MCB Bank Limited

TABLE OF CONTENTS
Acknowledgement.. Preface. Executive Summary.
I II III

Section- I_______________________________________ 01
Chapter-1 Introduction to report
1.1 Introduction.... 1.2 Background of the study. 1.3 Purpose.. 1.4 Scope... 1.5 Limitations 1.6 Objectives. 1.7 Methodology.. 1.8 Structure of report. 02 02 02 02 02 03 03 03

Section- II______________________________________
Chapter-2 Banking in Pakistan
2.1 Bank.. 2.2 History of banking 2.2.1 Early growth. 2.2.2 Development of modern banking... 2.3 Banking in Pakistan. 2.3.1 History of Pakistan banking sector.. 2.3.2 Current Pakistan banking sector...

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05 05 05 06 06 06 08

Section- III______________________________________ 10
Chapter-3 Introduction to MCB
3.1 Introduction. 3.1.1 Historical background 3.1.2 MCB bank today 3.1.3 Vision and mission statements 3.1.4 Strategic objectives. 3.1.5 Core values 3.1.6 Awards and achievements. 3.2 Management system of MCB. 3.2.1 Top management. 3.2.2 Organizational structure. 3.2.3 Branch network. 3.3 Products and services..
6

11 11 13 13 13 14 15 16 16 17 18 18

MCB Bank Limited

3.4 SWOT analysis.. 3.4.1 Strengths... 3.4.2 Weakness.. 3.4.3 Opportunities. 3.4.4 Threats 3.5 Overall performance of MCB. 3.5.1 Core Competencies and capabilities.. 3.5.2 Mean of MCB to outperform its competitors.. 3.5.3 Strategies for MCB bank competitive position. 3.6 Entity rating.

24 24 26 26 26 27 27 28 28 29

Chapter-4 Introduction to MCB Risala Road Branch


4.1 Introduction. 4.1.1 Organizational profile 4.2 Branch departmentalization 4.3 Performance... 4.4 Organizational chart.. 4.5 Current staff. 4.5.1 Training received by number of employees... 4.5.2 Workload.. 4.5.3 Responsibilities. 30 30 30 31 31 32 33 33 33

Section- IV______________________________________ 34
Chapter-5 Department/ Process studied
5.1 Clearing department 5.1.1 Local and intercity clearing.. 5.1.2 Cheques collection. 5.2 Foreign exchange department. 5.2.1 Imports 5.2.2 Letter of credit.. 5.2.3 Exports 5.3 Account opening departments. 5.3.1 Account opening. 5.3.2 Dormant account 5.4 Advance department.. 5.4.1 Information required by the bank.. 5.4.2 Preparation of credit proposal.. 5.4.3 Sanction advice. 5.4.4 Types of advances.. 5.5 Remittance department... 5.5.1 Important terms.. 5.5.2 Types of remittance.. 5.5.3 Modes of payment. 5.6 Cash department... 5.7 Cheque book and debit card issuance. 35 35 35 35 36 36 37 37 38 40 40 41 41 42 42 43 43 43 44 45 46

MCB Bank Limited

5.7.1 Issuance of cheque book.. 5.7.2 Issuance of debit (Atm) card 5.8 Customer service department.... 5.9Information Technology 5.9.1 Hardware department. 5.9.2 Software department.. 5.9.3 Network department

46 47 47 48 48 48 48

Section- V______________________________________ 49
Chapter-6 Problems identified at MCB
6.1Problems identified.. 6.1.1 Shortage of staff.. 6.1.2 Staff is not adequately trained.. 6.1.3 Others.. 50 50 50 50

Chapter-7 Conclusion and suggestions


7.1 Conclusion. 7.2 Suggestions.. 7.2.1 Refresher courses. 7.2.2 Reward and punishment.... 7.2.3 Others 51 52 52 52 52 53 57

Appendices. References..

MCB Bank Limited

MCB Bank Limited

CHAPTER # 1
1.1 INTRODUCTION

INTRODUCTION TO REPORT

Chapter one is about introduction of report. As a part of requirement of BBA degree six week internship is necessary for student. This chapter includes background, purpose, scope, objectives and methodology of the study.

1.2 BACKGROUND OF THE STUDY


Internship training program during Bachelors in Business Administration is necessary for the partial fulfillment of the completion of Degree of Bachelors in Business Administration as per HEC (Higher Education Commission) requirement. It is necessary for me to complete an internship session of about 6 weeks in some manufacturing or service industry relevant to my area of interest. So, I choose the Banking field because my study background is related with this sector and its fact that there is no business that can be done without involvement of bank. I did my internship in MCB Bank Limited Risala Road (0076) Branch.

1.3 PURPOSE
My basic purpose of study is to work in real life situation and to learn banking practices by doing. Internship is the capstone experience that provides an internee with hands-on, realworld experience in a work setting. Ideally, internship will enable internees to: Use knowledge and skills get from the classroom, Convert the bookish knowledge into practical life, and Become better acquainted with the types of work settings in which such Competence can be applied.

1.4 SCOPE
This study will facilitate me regarding the working of Banking sector of Pakistan because most of the teachers during their lectures use the examples of Banks like MCB, National Bank, UBL, Bank Alfalfa and many others, Students should study about the functioning of such Banks. It will helpful for me in future.

1.5 LIMITATIONS OF THE STUDY


The study is done with the sole purpose of doing the best work but there were certain limitations faced during the internship period. The most important limitations from which my study suffers include over workload of each employ (because of shortage of staff) due to which they pay less attention towards training of the internee and the secrecy of the bank. Another important limitation of the study is time and space constraint.
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MCB Bank Limited

1.6 OBJECTIVES
I worked as an internee in MCB Risala Road branch, Hyderabad. The main objectives to study in MCB were: To get some experience in working with well reputed organization. To gain knowledge about the professional environment of the bank. To know about the technology utilized in the banks.

1.7 METHODOLOGY
There are mainly two methods that are used for the collection of data. PRIMARY DATA: Observation of functions of Branch operations on the spot. Observation of different processes of Branch on the spot. Discussion with Bank Personnel.

SECONDARY DATA: Internet is very helpful for me to study more about banking sector of Pakistan. Different type of booklets/manuals of the Bank. Annual report of MCB of year ended 2010. Internship reports on MCB available in library.

1.8 STRUCTURE OF REPORT


The report is divided into five sections as under: Section-I consists of chapter 1, which includes background, purpose, scope, limitations, methodology and scheme of the report. Section-II consists of chapter 2, which includes background and definition of banking. Also include review of banking sector of Pakistan. Section-III consists of two chapters (Chapter 3-4) and includes organizational review. In this section background, history of MCB, its organizational structure, products etc are included. Section-IV consists of chapter 5 which summarizes the learning of various operations (of different departments) during internship period. Section-V consists of two chapters 6 and 7 which summarizes the findings and suggestions.

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MCB Bank Limited

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CHAPTER # 2
2.1 BANK

BANKING IN PAKISTAN

The term 'bank' is derived from BANCO, the Italian word for bench, as the Lombard Jews in Italy kept BENCHES in the market place, where they exchanged money and bills. This term is being used for a long time, yet it has no precise definition. The basic reason is that the banks perform not just one but many types of functions. The term bank has been defined differently by different authors. Some are as follows: According to Crowther: "Bank is a dealer in debtshis own and of other people." According to G.W. Gilbert: "A banker is a dealer in capital or more properly a dealer in money. He is an intermediate party between the borrower and the lender. He borrows from one party and lends to another."

2.2 HISTORY 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 benches 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 it that the Italian money changers 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) when the word Back was Italianize (into Bank).

2.2.1 EARLY GROWTH


Banking in fact is as primitive as human society for ever since man came to realize the importance of money as a medium of exchange. This history of banking is traced to as early as 2000 B.C. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths. They used to keep strong safes for storing the money and valuables of the people. The persons who had surplus money found it safe and convenient to deposit their valuables with them. The first stage in the development of 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

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MCB Bank Limited

confidence in the integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted in payment of debts; then the receipts were drawn in such a way that it entitled any holder to claim the specified amount of money from goldsmiths. A depositor who is to make the payments may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank notes. The second stage in the development of banking thus was the issue of bank notes. The goldsmiths soon discovered that all the people who had deposited money with them do not come to withdraw their funds in cash. They found that only a few persons presented the receipts for encashment during a given period of time. They also found that most of the money deposited with them was lying idle. At the same time; they found that they were being constantly requested for loan on good security. They thought it profitable to lend at least some of the money deposited with them to the needy persons. This proved quite a profitable business for the goldsmiths. They instead of charging safe keeping charges from the depositors began to give them interest on the money deposited with them. This was the third stage in the development of banking.

2.2.2 DEVELOPMENT OF MODERN BANKING


In 1918, eleven clearing banks of today came into being. The effect of this historical development of banking in England has been fairly wide. First of all, the emergence of a small number of large banks with wide network of branches and secondly, increase in the popularity of bank accounts and a large-scale use of cheques in 1920s serve as a base for the development of modern banking system. In 1946, the labour government nationalized 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 hire-purchase finance for companies buying industrial plants and machinery and took interest on hire-purchase finance.

2.3 BANKING IN PAKISTAN


Banking is one of the most sensitive businesses all over the world. Banks play very important role in the economy of a country and Pakistan is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance.

2.3.1 HISTORY OF PAKISTAN BANKING SECTOR


The interesting point which I observed during the span of mine internship was the historical background of Banking & Financial sector which is the one in which great improvement and

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MCB Bank Limited

growth is observed since the formation of Pakistan. For studying the growth of this sector we can divide it into three stages, which are as follows: 1. Pre-Nationalization Era 2. Nationalization Era 3. Post Nationalization Era PRE NATIONALIZATION ERA There were only two Muslim banks in Indo Pak before partition; they were Habib Bank Ltd. (established in 1941 at Bombay) & Australia Bank Ltd. (established in 1944 at Lahore). Hindus or Foreigners owned all other banks at that time. At the time of partition there were 631 bank branches in area, which came under Pakistani control. But due to bloodshed and violence at large scale, mostly branches were closed and the disparity can be assess from the fact that on July 1948 there were 195 branches with deposits of Rs.88 crore (880 million) only. Also a factor lagging in Pakistani industry was a central bank of its own, by that time Reserve Bank of India was acting as central bank for both countries and same currency notes were used in both territories. But Reserve Bank of India was biased and Set down Pakistan on many occasions such as the issue of funds transfer etc. In this period drastic steps were taken in government sector for the improvement of overall position. The private sector also responded to these changes and some very positive changes were observed. Some of the steps taken by the government in this regard were as under: Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948. Setting up of National Bank of Pakistan in November, 1949 to control the 'jute' export in East Pakistan and to act as agent of SBP. Larger powers were given to SBP through SBP Act (1956) for controlling purposes. Banking Companies Ordinance 1962 for protection and guidance to banks. Establishment of specialized banks, such as 1. ADBP (1952) 2. HBFC (Nov, 1952) 3. P1CIC (Oct, 1957) 4. IDBP (Aug, 1961) 5. NDFC (Jan, 1973)

These were the steps, which built a strong banking sector in Pakistan. This is also obvious from the facts that by 1973 there were almost 10 foreign banks working in Pakistan. A bird eye view of 5 top banks was as given below:

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MCB Bank Limited

BANKING SECTOR IN PAKISTAN IN 1973 BANK Habib Bank Ltd. National bank of Pakistan Ltd United Bank Ltd MCB Bank Ltd. Allied Bank Ltd. NATIONALIZATION ERA On January 01, 1974 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani banks became a public property. All small banks were merged in bigger banks to create 5 major Pakistani banks. These banks were managed by Pakistan Banking Council. There are still controversies about this act of government as whether it contributed in success or failure of banks. However the major changes after nationalization were as follows: Working of banks was extended to under developed areas. Market expansion for credit and deposits. Banks were encouraged to extend cooperation to neglected areas. Decrease in service level of bank officers. Decrease in profitability as well. NO.OF BRANCHES 667 579 497 506 145 DEPOSITS Rs. 6,160 (million) Rs. 5,660 (million) Rs. 5,670 (million) Rs. 1,640 (million) Rs. 570 (million)

POST NATIONALIZATION ERA In 1990 the government decided to denationalize all the nationalized institutes. For this purpose, amendments were made to Nationalization Act 1974 and two nationalized banks were privatized. Along with this a permission to open banks in private sector was also granted. The rules regarding establishment of new banks and for incoming foreign banks were also relaxed. The three privatized banks are: MCB taken up by a private group in April, 1991. ABL taken up by its own employees in September 1991. UBL taken up by UAE party in 2002.

After these changes a large number of private and foreign banks started their operations in Pakistan.

2.3.2 CURRENT PAKISTAN BANKING SECTOR


Now, Pakistan has a well-developed banking system, which consists of wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. The country started without any

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MCB Bank Limited

worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it had acquired a flourishing banking sector. Pakistans banking sector has remained remarkably strong and resilient during the World financial crises in 2008-2009, a feature which has served to attract a substantial amount of FDI in the sector. Stress Tests conducted on June 2008 data indicate that the large banks are relatively robust, with the medium and small- sized banks positioning themselves in niche markets. Banking sector turned profitable in 2002. Their profits continued to rise for the next five years and peaked to Rs. 84.1 ($1.1 billion) billion in 2006. The present status of Pakistan banking sector can be seen from the following figures: SCHEDULED BANKS Category Nationalized Commercial Banks Private / Privatized Commercial Banks Specialized Banks Foreign Banks Total Schedule Banks No. Of Banks 3 18 4 22 47

In addition to above mentioned scheduled banks there are 10 Development Financial Institutes (DFIs), 14 Investment Banks and 21 leasing and Modarbah Companies.

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CHAPTER # 3 3.1 INTRODUCTION

INTRODUCTION TO MCB

MCB Bank Limited was established on July 9, 1947 with a view to provide banking facilities to the business community of the South Asia. The bank was nationalized in 1974 during the government of Zulfikar Ali Bhutto. This was the first bank to be privatized in 1991. Currently Mian Mohammad Mansha is the Chairman of the MCB and has played instrumental role in its success. In recognition of Mr. Manshas contribution, the Government of Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most prestigious civil awards of the country. Over the years MCB has developed strong relationships with its customers by understanding their needs and treating them with respect, dignity and importance. The driving force behind its commitment and services is its focus on customers, ensuring that it not only meets, but also exceeds their expectation. They strive to achieve excellence by ensuring that every moment of their time is spent in adding value, making sure that they do things right, first time, and every time. With the quest of quality MCB has always taken initiatives bringing banking into a new arena; from cash to the convenience of plastic; from branch banking to internet banking and from face to face customer interaction to online accessibility. It encourages diversity and treats each of its employees with fairness. It gives constructive feedback for their continuous development and seeks suggestion from all employees for further improvement. It ensures that quality performance is acknowledged and rewarded and exercise utmost responsibility in decision making with regards to its employees. Integrity of its employees is the strength of its performance. MCB believe in achieving their mission and vision by working together as a combine group. It treats its colleague as its internal customer and ensures that the requirements of internal customer focus are always met. Equipped with in-depth product knowledge and recognizing the strengths in each individual. It strives for optimum-results from its co-workers and bringing out peak performances by working towards common goals and objectives in today's dynamic banking environment. MCB has an edge over other local banks, as it was the first privatized bank. The State Bank of Pakistan has restricted the number of branches that can be opened by foreign banks, an advantage that MCB capitalizes because of its extensive branch network.

3.1.1 HISTORICAL BACKGROUND


Now let us discuss the historical background of MCB. Before separation of Indo Pak, the need for more Muslim banks was felt. And Muslims having strong financial capacity were

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MCB Bank Limited

thinking to invest in this sector as well. This was the idea which paved the way for setting up Muslim Commercial Bank Limited known as MCB. This was the third Muslim bank in the subcontinent. MCB Bank Limited formerly known as Muslim Commercial Bank Limited was incorporated by the Adamjee Group on July 9, 1947 in Kolkata in Bengal, under the Indian Companies Act, VII of 1913 as a limited company. But due to changing scenario of the region, the certificate of incorporation was issued on 17 August, 1948 with a delay of almost 1 year; the certificate was issued at Chittagong. The first Head office of the company was established at Dhaka and Mr. G.M. Adamjee was appointed its first chairman. It was incorporated with an authorized capital of Rs. 15 million. The Bank transferred its registered/Head office from Dhaka to Karachi on August 23, 1956 through a special Resolution. NATIONALIZATION In January 1974, the government of Pakistan nationalized MCB following the banks (Nationalization) Act 1974, subsequently, in June 1974, Premier Bank limited merged with MCB. PRIVATIZATION A wave of economic reforms swept Pakistan in 1990s, introducing the need for privatization of state owned banks and companies. When privatization policy was announced in 1990, MCB was the first to be privatized upon recommendations of World Bank and IMF. The reason for this choice was the better profitability condition of the organization and less risky credit portfolio which made it a good choice for investors. On 8th April, 1991, the government of Pakistan transferred the management of the Bank to Nishat Group (the highest bidders) group of leading industrialists of the country by selling 26% shares (at Rs. 56 per share) of the Bank. With a view to broaden equity holding the government sold 25% of the paid up capital to the general public. In terms of agreement between the government of Pakistan and the Nishat Group additional 24% shares have been purchased by the group making their holding 50%. As of June 2008, the Nishat Group owns a majority stake in the bank. 25% was retained by the government. Now it is fully privatized. AFTER PRIVATIZATION After privatization, the Bank concentrated on the growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base. MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer.

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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.

3.1.2 MCB BANK TODAY


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 growing tree evergreen, strong, and firmly rooted. MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 431,372 million and total assets of Rs.79, 204 million. MCB has the reputation of a solid financial institution managed by expatriate executives. The Bank has a customer base of 4million 3lac 70 thousand 23 (4,370,023), a nationwide distribution network of over 1132 branches and over 493 ATMs in the market.

3.1.3 VISSION AND MISSION STATEMENTS


VISSION 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.

3.1.4 STRATEGIC OBJECTIVES


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. Building Teams: With a winning combination of leading professionals and best operating practices, we create teams that are geared towards value-creation and value-growth driven by time-tested partnerships.

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Building Alliances: Our alliances help us gain strategic advantage across all markets helping us to secure and sustain our leadership and foster a spirit of partnership. Building Relationships: Our integrity and transparency in all aspects of our business, across the country, demand that we build relationships on trust, confidence and the full measure of discretion for both our internal and external customers. Building Focus: With the right combination of insight, foresight and hindsight, we can focus on a variety of strategic and leadership goals to help bring our vision to life in ways that add more perspective to the business. Building Trust: Relationships that are built on trust prove to be an important and sustainable competitive advantage. We believe that winning our customers trust is the way to benefit from an investment in their hearts and minds

3.1.5 CORE 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.

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3.1.6 AWARDS AND ACHIEVEMENTS


MCB at home is recognized as a successful model of privatization. It has completed almost twenty successful years of privatization in 2011 and its growth and stability is a case study for prospective government institutions waiting to be privatized. The consistency in growth and the resilience MCB has shown during the past few years, especially at uncertain economic times is by all means outstanding. The acknowledgements do not end at home. MCB Bank Limited received Euromoney Award for Excellence seven times in the last eight years, which include Best Bank in Asia in 2008; four times The Best Bank in Pakistan award and one time The Best Domestic Bank award besides being declared the The Best Domestic Bank in Pakistan by Asia Money for the last two years. MCB Bank also received the The Strongest Bank 2010 award by The Asian Banker for being Pakistans best-performing financial institution in 2010. President and CEO MCB Bank, Atif Bajwa, has been awarded The Qatar Financial Centre Asian Banker Leadership Achievement Award 2010. AWARDS AND ACHIEVEMENTS 2010 2010 2010 2010 2010 2009 2009 2008 2008 2008 2006 2006 The Asian Banker: The Asian Banker: MMT: ICAP / ICMAP: SAFA: Asiamoney: The Asset: Euromoney: Euromoney: Asiamoney: Asiamoney: Euromoney: Strongest Bank in Pakistan Leadership Achievement Award Best Bank Led MMT Service BCR Award 2009-Banking Sector Certificate of Merit Award Best Domestic Bank in Pakistan Best Domestic Bank in Pakistan Best Bank in Asia Best Bank in Pakistan Best Domestic Bank in Pakistan Best Domestic Bank in Pakistan Best Bank in Pakistan

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3.2 MANAGEMENT SYSTEM OF MCB


3.2.1 TOP MANAGEMENT
Like any other business concern the entity of MCB Limited is represented by its general body known as Board of Directors. The Board of Directors has the authority in guiding Bank affairs and in making general policies. Some directors are the personnel of the MCB Bank and others are successful businesspersons and executives of other major organization. Thirteen members are included in board of directors, see in a list. BOARD OF DIRECTORS Mian Mohammad Mansha S.M. Muneer M.U.A. Usmani Tariq Rafi Shahzad Saleem Sarmad Amin Dr. Muhammad Yaqob Dato Mohammed Hussein Mian Raza Mansha Aftab Ahmad Khan Mian Umer Mansha Muhammad Ali Zeb Dato Seri Ismail Shahudin AUDIT COMMITTEE Mian Mohammad Mansha Shaikh Mukhtar Ahmed Shahzad Saleem Chairman Member Member Chairman Vice Chairman President & Chief Executive Officer (Non-Executive Director) (Non-Executive Director) (Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director) (Non-Executive Director)

CHIEF FINANCIAL OFFICER AND COMPANY SECRETARY Ali Amin Tameez-ul-haque Chief financial officer Company secretary

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MCB Bank Limited

3.2.2 ORGANIZATIONAL STRUCTURE


As MCB is a banking company listed in stock exchange therefore it follows all the legalities which are imposed by concerned statutes Mr. Muhammad Mansha is chairman of the company with a team of 1 Vice Chairman, 1 Chief Executive Officer and 10 directors to help in the business control and strategy making for the company. Operational Management of the bank is being handled by a team of 10 professionals. This team is also headed by Mr. Muhammad Mansha. 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 & Forex Group and lastly Special Assets Management (SAM) Group. For effective handling of branches, it has been categorized into three segments with different people handling each category. These categories are: 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. CONSUMER BANKING These are the branches which have exposure up to Rs. 20 million and these include all the branches which are neither corporate nor commercial branches. . Recently the organizational structure was re-designed as follows:
Corporate Consumer Commercial

20 branches

637 branches

475 branches

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MCB Bank Limited

ORGANIZATIONAL STRUCTURE

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MCB Bank Limited

3.2.3 BRANCH NETWORK


The Bank is fully aware that the branch network has direct implications on the services that it provides to its customers and the location of the bank plays a vital role in making its operations profitable. If the bank is located in some business center then it will be very easy for it to attract business people as its customers. Therefore MCB has most of its branches at places where it can reach its target customer easily. The branch network of MCB is given as follows: Provinces Punjab Sindh Khyber Pakhtunkhwa Blochistan Azad J.Kashmir Domestic Overseas EPZ Total No: of Branches 709 255 111 40 24 1,139 6 1 1,146

Furthermore, the bank has some proposals under consideration to open more branches in some European countries and as well as in Japan & China.

Appendices: Organizational Setup

3.3 PRODUCTS AND SERVICES


CURRENT ACCOUNT 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

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MCB Bank offers a wide array of savings products that suit short term growth & transactional needs. 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 unique products: 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 suits their needs. This is combined with different profit payout options and the added facility of being able to avail credit 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 CASH MANAGEMENT Cash Management provides a wide range of value added services to large corporations through its vast network of online branches. MCBs structured and customized products enable 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 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 vast branch network platform to make payments in areas where their own branch network does not exist, thus extending their reach nationwide.

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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 MCBs 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, 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 involve 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 QUASI EQUITY/HYBRID INSTRUMENTS MCB Quasi Equity/Hybrid Instruments structure and place a category of debt that has some characteristics of equity such as being unsecured, subordinated or with a potential equity upside. MCB EQUITY CAPITAL RAISING MCB Equity Capital Raising relates to raising capital for 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 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.

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MCB Bank Limited

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 reach of agri credit facilities to farmers engaged in any type of activity, encompassing both crop & non crop sectors. MCB overwhelmingly cherish and stay committed to support the farmers in view of unparallel significance of agri sector in national life aligned with economic priorities of the country and role of 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 banks affluent clientele. As members of MCB Privilege, customers experience unparalleled advantages that put them ahead of others. MCBs dedicated Privilege Centers wait to welcome people 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 customer wealth with investment opportunities that match their unique financial aspirations. MCB Investment Services offer distribution of mutual funds managed by the leading fund managers of Pakistan. Bank can suggest the products most suited for customers needs, or work with customers to create a personalized solution completely focused on their 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.

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MCB CAR4U MCB Car4U not only gets customers a car of their 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, customer 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 customer funds via multiple banking channels. It enables customer 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 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 customers a 24-hours convenience of cash withdrawal, mini-statement, utility bill payments, mobile top-ups, funds transfer services and much more. MCB MOBILE ATM MCB through MCB Mobile ATM allow customers convenient world class banking services. Banks innovative MCB Mobile ATM van ensures that Bank offer its services wherever customers are, be it concerts, fairs or any other occasion/special event. MCB LOCKERS MCB Lockers are the best protection for customer valuables. Lockers of different capacities are available nationwide. MCB SMS BANKING With MCB SMS Banking, customers can bank on their fingertips. Once customers are registered onto the service they can SMS anytime to get account information.

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MCB FULL-DAY BANKING Customers enjoy the convenience of extended banking hours from 9am to 5pm, including Saturdays at MCB Full-Day Banking branches across the country. MCB BANC ASSURANCE Combining the best of banking and insurance solutions, MCB Banc assurance has created a one stop shop for all customers financial and insurance needs. Whether customers want to save for their childs education or marriage, for the security of dignity after retirement or gaining maximum return on savings, MCB Banc assurance has a plan for them. Customers can also buy instant insurance coverage through their 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 customers to manage their VISA Credit & ATM/Debit Cards, confirm account balances & view last 5 transactions, pay utility/mobile phone & MCB Visa Credit Card bills, transfer money within MCB network accounts and register complaints. Most importantly it provides customers with their very own banking consultant to discuss their financial needs and requirements. MCB said: Simply call at 111-000-622 and well do the rest. MCB MOBILE MCB Mobile is a quick easy and secure way to recharge mobile phones, transfer money, pay bills and do much more. Customers can visit the nearest MCB ATM or call at 111-000-622 to register and logon to www.MCBmobile.com using their mobile phone to start transacting. MCB VIRTUAL BANKING MCB Virtual Banking Service is a convenient way for customers to access their accounts 24/7. It is secure, free of cost and lets customer do their banking whenever and wherever. This service allows customer to transfer funds, pay utility/mobile bills, set up standing order instruction, download account statement and much more.

3.4 SWOT ANALYSIS OF MCB BANK LIMITED


3.4.1 STRENGTH
The strength of the MCB Bank is given as follow. DIVERSE RANGE OF SERVICES MCB Bank limited has strength that it provides the diverse range of unique services to its customers, like MCB mobile banking, SMS banking services for its customers. These services

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are unique and new in Pakistan because no other services of like this are provide by other bank in Pakistan. STRONGEST BANK IN PAKISTAN MCB Bank is the strongest bank and strongest financial institution in Pakistan and last year it is awarded by Singapore The Qatar Financial Centre (QFC) Asian Banker Leadership Achievement Award 2010 due to its excellence performance in financial sector. PART OF NISHAT GROUP, PAKISTAN MCB Bank is the largest bank in Pakistan and is part of the Nishat Group of Pakistan which is biggest industrial and conglomerate of 21 companies in Pakistan. The chairman of the Nishat Group is Mian Muhammad Mansha (who is the richest person of Pakistan). LARGEST NETWORK OF ATMS The MCB Bank has the largest network of ATMs in Pakistan and it has unique strength in provision of banking that It provide banking in rural areas where there is no other bank is providing. In 2011 the branches of MCB are increase by 143% as compare to 2010 year. LOW COST SERVICES The MCB Bank has the strength in term of low cost competitive priorities that is provide the financial and banking services to its customer in low cost and in time of financial crunch and high rate of unemployment the MCB is still attracting the customer with this strategy. INCREASE IN FINANCIAL PERFORMANCE The financial performance of the MCB is the main strength of the MCB Bank. The profit after tax is continuously increasing and in 2010 there is increase of 9% net profit as compare to the 2009. The dividend per share is also increase in 2010 like in 2009 it was 11.00 and in 2010 it is 11.50. The market capitalization is also increase in 2010 by 174 billion as compare to 2009, 152 billion. Overall the all major financial indicator of MCB is showing the positive results like Total Assets, Profit before Tax, Profit after Tax, Deposits, and Investments etc everything is increasing in Last year (2010). INCREASE IN NON FINANCIAL PERFORMANCE The non financial indicators are also increase in 2010 like there is break through increase in mobile banking customer in 2010 which are 166% increase as compare to 2009. Over all the number of customers is increase by 9% in 2011 as compared to previous year. STRONG TECHNOLOGICAL DEPARTMENT MCB has an edge over its competitor that it has latest technological department in Pakistan which always provide the new technological solutions to the employees for ease of work and also to the customers for better service.

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MCB Bank Limited

3.4.2 WEAKNESS
HIGH EMPLOYEE TURNOVER The MCB has major weakness that there is high rate of turnover of employee in MCB Bank Limited because of employee dissatisfaction. The employees in MCB are dissatisfied because of low pay level and more than 9 to 5 hour job and poor working conditions. INCREASE IN OPERATING EXPENSES There is another key weakness in MCB Bank is its increasing operating expenses since 2005 and this is a burden on MCB operating profit because its operating profit is also decrease in 2010 as compare to 2009. SMALL FOREIGN NETWORK Unlike its competitor the weakness of MCB is that it has no international branches at other countries like Habib Bank Limited, Pakistan and leading competitor of MCB Bank has branches in London and is providing services at international level but MCB has international branches.

3.4.3 OPPORTUNITIES
TREND OF INTERNET BANKING The trend of internet usage is growing in each and every passing day and people in Pakistan are becoming more and more aware about the benefits of internet so there is an opportunity for the MCB Bank to provide its services through internet banking. EXPAND OUT OF PAKISTAN It is a great opportunity for MCB Bank to expand network out of Pakistan, like in country where there is large community of Pakistanis and they send money to their family through other sources. MCB can open new branches in specific countries in specific areas to avail that opportunities. INCREASE ISLAMIC BANKING Another opportunity for MCB is that it can start proper Islamic banking in Pakistan because now MCB is providing consumer banking services in Pakistan and in Islam the interest is forbidden and people feel reluctant to take loan so MCB can loan through Islamic banking and MCB can increase its customers profile.

3.4.4 THREATS
PRIVATIZATION AND COMPETITION Due to the privatization of the banking sector different banks from other countries come and acquire license in Pakistan and open their branches for the banking like Mybank, RBS so

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MCB Bank Limited

this is putting pressure on MCB bank to remain competitive in market and attract customers. CHANGE IN GOVERNMENT POLICIES Due to rapid change in Government policies in Pakistan specially in monetary policy and regular change in interest rate, banking sector is affecting most in Pakistan because banks give loan to the customer base on interest rate and if Government change interest rate regularly then bank have to change the terms and condition in Pakistan regularly and this all things is affecting MCB Bank as well. INFLATION Due to the high inflation rate in Pakistan the purchasing power of people is decreasing continuously and this is affecting the banking sector because in banking sector if people deposit money for interest and if inflation is rising more than the interest means when customer receive less money so they reduce to deposit money for longer term. POLITICAL INSTABILITY The political stability is necessary for growth and development of the industry and business in any country but the political condition in Pakistan is instable because of frequent change of Government and past dictatorship so these all things are affecting banking sector in Pakistan because Government of Pakistan is not supporting business sector rather than they are resolving their own conflicts. GOOD SERVICE OF FOREIGN BANKS Other foreign banks like Mybank, RBS etc is providing top class services to the customers and they are attracting the customers from other banks so this is another threat for the MCB bank that to maintain the competition MCB must provide the same or more services to the customer compare to the other foreign banks.

3.5 OVERALL POSITION OF MCB


3.5.1 MCB BANK CORE COMPETENCIES AND CAPABILITIES
Core competencies are the capabilities that serve as a source of competitive advantage for a firm over its rivals. Core competencies distinguish a company competitively and reflect its personality. The following are the core competencies of MCB in Pakistan. LOW COST Low cost operation is the core competency of MCB Bank in Pakistan and this competency keep MCB one step ahead of its competitors. If we compare the different rates of the services provided by MCB and make comparison against its competitors then we can see that the rate of MCB is lesser than the rates of Habib Bank Ltd.

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MCB Bank Limited

INNOVATION The introduction of innovative products is another core competency of the MCB bank. We can evaluate its competency by analyzing MCB previous products. If we see in past then we can see that MCB has introduced lot of products and all other bank follow MCB in Pakistan. For example the rupee travelers cheques first time introduced by MCB in Pakistan and all other banks follow MCB. Then ATM introduced by MCB and Now MCB mobile banking is the new innovative product in Pakistan. The all of the innovative products keep MCB one step ahead of its competitors and customers have a strong brand image in their mind about MCB. Now customer of MCB is waiting for Internet Banking from MCB Bank.

3.5.2 MEAN OF MCB TO OUTPERFORM ITS COMPETITORS


If we examine the porter value chain then we can identify the mean in which organization is outperforming its competitors. For MCB the mean to outperform its competitor is the Marketing and operation of the Bank. As I discuss above that MCB core competencies are low cost and bringing innovative products in Pakistan banking service sector and MCB is achieving this objective due to its efficient marketing department and operations. The marketing department of MCB always remains efficient and forecast the future need of the customers, customer preferences, and customer requirements from banking sector. Just like they did in term of mobile banking because MCB know the future era is digital and customer requirements are dynamic and they always introduce new service in market before other do. The role of operation in low cost is very important because without low cost to offer something for success is difficult so MCB in Pakistan due to high level of unemployment and inflation. But MCB is achieving this objective due to its high investment in technology. Although it is increasing burden on MCB operating profit which are always increasing but the potential benefits from satisfied customers are always more than the investment.

3.5.3 STRATEGIES FOR MCB BANK COMPETITIVE POSITION


The MCB is using both cost leadership by providing low cost operations and differentiation strategy by providing new innovative products to the customers and MCB is well managing these strategies because according to Michael Porter, Organization may pursue a differentiation, overall cost leadership, or focus strategy at the business level. MCB bank is following the same thing which is said by porter. The overall strategy of MCB is low cost but some where MCB is using focus cost differentiating like in big cities most of people use internet on mobiles, MCB differentiate itself by providing the mobile services but these service are on low cost while on the other hand the areas where there is no internet like in some rural areas MCB is providing the general banking at low cost.

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MCB Bank Limited

3.6 ENTITY RATING


MCB has the following Entity Ratings from the Pakistan Credit Rating Agency Limited (PACRA): Short Term Long Term A1+ AA

DEFINITIONS BY PACRA: A1+ (A one plus) These ratings are applicable to senior unsecured creditors (depositors) of the bank. A plus (+) appended to a rating denotes relative status within major rating categories. AA (Double A) These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.

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MCB Bank Limited

CHAPTER # 4
4.1 INTRODUCTION

INTRODUCTION TO MCB RISALA ROAD BRANCH

I have completed internship in MCB Risala Road (0076) Branch, Hyderabad. MCB Risala Road (0076) branch is one of the oldest branches of MCB and is located in the commercial area thats why the customers output is very high in the branch and is perform its all function very well. It is a commercial (For several years, it work as a corporate branch but from last few years it is recognized as commercial bank because it deal with all types of customers instead of corporate customers only), multi functioning and full portfolio branch which includes all the departments that other branches also possess but it also includes I.T center, ICO (Internal Control Officer) department and Foreign exchange department (all the issues and requests for LC opening are first sent by other branches of region to Risala Road branch which then after proper scrutinize forward requests/documents to head office). These features make MCB Risala Road (0076) branch unique and distinct from other branches in Hyderabad region.

4.1.1 ORGANIZATION PROFILE


Name of Organization: Chairman: Location: Branch code: Phone: UAN: Fax: Website: Email: MCB Limited. Main Mohammad Mansha Risala Road Hyderabad 0076 022 - 2780996 021-111-000-111 021 - 2270022 www.mcb.com.pk info@mcb.com.pk investor.relations@MCB.com.pk

4.2 BRANCH DEPARTMENTALIZATION


The process of grouping individuals into separate units and departments to facilitate the accomplishment of organizational goals, to fully satisfy their customer, and for efficient working is known as departmentalization. In MCB Risala Road Branch, departmentalization is done on pure functional basis. In the functional form of departmentalization, people and resources having a common activity to support are grouped together. Some of the important departments of MCB Risala Road branch are given below: Cash Department Deposit Department Advance & Credit Department
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MCB Bank Limited

Remittance Department Foreign Exchange Department Internal Control Department I.T department

4.3 PERFORMANCES
IN TERM OF CUSTOMERS SATISFACTION The customers are very satisfied with the performance of the bank (branch). The bank is providing latest banking services to the customers so that they can easily access to their accounts. The bank is also providing the internet facility to their customers through this they can access to their accounts on the net and they can check their balance without going to Bank. The Bank also provides the door to door services to those customers who transactions daily occurs thats why those customers are very satisfied with the Bank and this thing also helps to the Banks for increasing their accounts holders. IN TERM OF ACCOUNTS AND BUDGETS The performance of the Banks is increasing day by day. The accounts holders are very satisfied with the facilities which they provide.

4.4 ORGANIZATIONAL CHART

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MCB Bank Limited

4.5 CURRENT STAFF


MCB Risala Road (0076) branch has about 20 staff members in which 2 security guards are also included. Most of the staff members have lot of experience but their qualification is low. Some of staff members are following: Permanent Staff: Names Mohammad Zaheerudin Zahid Husain Memon Abdul Aleem Somro Taimeer Ahmad Danish Illyas Irfana Perveen Shireen Tabasum Irfan Qurashi Iqbal Akber Ali Mohammad Asif Khan Shahbudin Shiakh Aminat Mehsar Sayed Ali Raza Mohammad Yasir Razaq Ahmad Mohammad Javed Nizam Outsourced Staff (on contractual basis) Lateef Azhar Akram Bhutto Saba Naimat Symbols Support Officer Symbols Support Officer Customer Service Officer Designations Manager Operational Manager Loan and advance Incharge General Banking Officer General Banking Officer General Banking Officer Cash Supervisor Chief Cashier Cashier Cashier (Utility counter) Foreign Exchange Incharge Foreign Exchange officer I.T Incharge Internal Control Officer Guard Guard Tea boy

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MCB Bank Limited

4.5.1 TRAINING RECEIVED BY NUMBER OF EMPLOYEES


For efficient working, training is an important part and it clears the direction of the employees towards attaining the organizational goals. In banks every employee received the basic course of training of the banking system in which overall view of all the bank work is provided and then every person get the training in his/her particular job that is assigned to him/her. So in banks no one can be appointed without the basic training.

4.5.2 WORKLOAD
The work load of the bank staff is based upon on the daily system. The office timing starts from 9.00 am to 5.00 pm (Monday to Friday) and 9.00 am to 1.00 pm on Saturday for the customers. After the bank timing the staff fulfill the daily vouchers transaction and made the entries on the net system and then counted the cash, put it in the safe. The banking staff should finished their word on daily basis whether there work is short or long.

4.5.3 RESPONSIBILITIES
Responsibilities of staff depend upon the scale of the staff members. Higher the rank of the staff higher will be the responsibility on it. For example the Branch Managers responsibility is higher than the Operations Manager. Branch Manager has the responsibility to deal with the Branch customer and with the outsider parties also while all the remaining staff is responsible to deal with the Branch customers only. Branch Manager is responsible for the internal and external environment and the remaining staff is responsible for internal environment only. Operational Manager has the responsibility to check the activities of his subordinates. Cashier is responsible for all the cash transactions which occur in the Bank. Customer Service officer is responsible to deal the customers well and provide them the necessary information if required.

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MCB Bank Limited

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MCB Bank Limited

CHAPTER # 5

DEPARTMENT/PROCESS STUDIED

This section is based on my observation, experience and rotation during my internship at the Risala Road Branch of MCB Bank Limited. During my internship, I visit almost all the main departments (nine departments) and learned the functions of each department except that I also observed basic business process and the movement and interactions of customers and Employees inside the Branch. The functions of each department of MCB, Risala Road Branch Hyderabad as briefed by the concerned officer are as under:

5.1 CLEARING DEPARTMENT


I spent my first week in clearing department where I learned about local clearing, intercity clearing and cheques collection (CC).

5.1.1 LOCAL AND INTERCITY CLEARING


Clearing department collects all the cheque of other banks deposited by the customers in their bank. Clearing also collects all the inland remittances. When a customer of MCB deposits a cheque of ABL in his account the cheque first goes to national institute facilitation tech (NIFT). All the banks daily send all the deposited cheques of different banks to NIFT from where these cheques are separated city wise and branch wise. All the cheques are then sent to their respective banks of collection. All cheques of one city are collected by local clearing, where as cheques that are send from one city to another are collected by inter-city clearing. Local clearing is performed within one day where as Inter-city clearing requires 4-5 days.

5.1.2 CHEQUES COLLECTION


If cheques deposited are of those cities in which the institute of NIFT is not present then the amount of the cheque is collected by cheques collection (CC). In CC, the banks instead of sending cheque to NIFT (because NIFT is not present in that city only) send cheques for collection to their main branch of the required city from where by local clearing its amount is collected by the main branch of MCB in the required city and then is sent back to the branch from where it came.

Appendices: Clearing Process

5.2 FOREIGN EXCHANGE DEPARTMENT


I spent second week of my internship in Foreign Exchange department where I learned about Imports, Exports and letter of credit (LC). Some details are as follows:

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5.2.1 IMPORT
This department provides the facility to their customers to import machinery or products from other countries. It is necessary for the importers to have the license, which is issued by the Chief Controller of Imports and Exports (C.CT.E). For having the license or registration, an individual or firm submits the application through his/her bank. DOCUMENTS REQUIRED Filled application form for Register. The National Identity Card of the applicant. National Tax Certificate issued by the Income Tax department. In case of firm or company, the Memorandum and the Article of Association.

Banker issues the letter of credit normally in the response of the Performa Invoice. The seller sends this invoice to the buyer and it contains seller name, product quality, rate, mode of shipment, and other terms and conditions.

5.2.2 LETTER OF CREDIT


A letter of credit is a: Written undertaking by importers bank to a third party i.e. the exporter. That it will be pay or accept draft (letter of credit) drawn upon it up to a started sum of money within a specified time. That the payment will only be made to the exporter if he/she complies with the specified terms of credit.

PARTIES INVOLVED IN A LETTER OF CREDIT There are four parties involved in a letter of credit The buyer or the importer on whose account and request the letter of credit is opened is known as account party. The bank which issues or opens a letter of credit at the request of importer, it is called the issuing bank. The seller or the party in whose favor the letter of credit is draw is the third party and it is also known as beneficiary or exporter. The paying bank in the exporters country on which the draft is drawn is called the paying bank.

OPERATION OF A LETTER OF CREDIT The importer or buyer contacts the seller in foreign country for the purchase of particular goods. Importer settles with the seller the quantity and quality of the goods to be imported. The sale contract also includes the method of payment.

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The importer then submits an application to his/her bank for the issuing of an individual letter of credit. The form on which the importer employees for a letter of credit is supplied by the bank. This form contains all the necessary details discussed between the importer and exporter for the shipment of goods which include the description of merchandise, port of shipment, port of unloading, the documents against which the bank honour the draft, the total value of the goods etc. If the documents supplied by the seller conform to the terms of contract the exporter will be paid. The issuing bank will not be responsible if there is any fraud or the merchandise does not conform to the sales contract. The obligation of the buyers bank is: To issue letter of credit on agreed terms and condition with the buyer. To have a proper examination of the documents. To honour draft when presented with proper documents.

5.2.3 EXPORT
Usually the exporter does not rely on the credit of a banker in the country of importer and insist on a confirmation from a banker carrying on business in his/her own country. Thus this department of a bank helps the exporters to settle down their financial affairs. For exporting it is necessary for exporter to get export license from the Chief Controller of Imports and Exports after registration. Documents are required for the registration such as N. I. C. Card, income tax certificate, bank certificate which shows that the exporter is his/her account holder and have a good dealing with them. In response to the letter of credit exporter submit the following documents to the negotiating bank. Bill of exchange Invoice Bill of lading or Airway bill/railway receipt/truck receipt Insurance documents Any other documents, if so required

The negotiating bank will send the same documents to the issuing bank. In accordance with the terms and condition laid down in letter of credit.

5.3 ACCOUNTING OPENING DEPARTMENT


In this department I learn about account opening, types of account, dormant account and activation of dormant account.

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MCB Bank Limited

5.3.1 ACCOUNT OPENING


Account opening and closing is the function of accounts departments. Banks customer may be individuals (single or joint), firms (Partnership/ proprietorship), and Autonomous corporations, Limited companies, Charitable Institutions, Associations, Educational Institutions or Local Bodies. BASICS TO OPEN ACCOUNT During my internship in MCB, I learned and observed a lot of about the opening of an account. Basically I think that the opening of an account is the establishment of a contractual relationship (based on trust) between the banker and the customer. By opening an account at a bank a person becomes a customer of a bank. Further I am going to express the basic requirements and steps involved in the opening of an account. INTRODUCTION AND PRELIMINARY INVESTIGATION Before opening an account MCB as like the other banks in Pakistan ascertain whether or not the person who is going to open the account is a desirable customer or not. Then MCB determines the prospective customers integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. SPECIMEN SIGNATURE When an account is opened with MCB customer provides to the bank a specimen of the form of signature which would appear on his/her cheques to express his/her authority for the payment of cheques drawn on his/her banker. This specimen is taken generally on a card specially designed for this purpose and customers full name and account number are entered on it. PROCEDURE TO OPEN AN ACCOUNT According to my practice in MCB, when a customer wants to open an account, the bank officer gives him/her an application form. All information, which is necessary to be known by the bank, are requirements of the application form. Form also requires the essential documents to be attached by the customer. Only completed application forms with all required documents attached will be accepted by bank. Before opening an account in MCB I observed that the following points must be considered in this regard. Another account holder of the bank should properly introduce the new customer. A copy of identity card is required by bank. Against submission of the banks prescribed application form, duly introduced in the manner provided and on supplying such documents, as may be required and account may be opened. But except that bank reserves to itself the right to refuse to open an account without assigning any reason.

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Each account shall be allotted a distinct number that is to be quoted in all correspondence with the bank relation to the account. Minimum amount for opening and continued maintenance of various types of accounts is as follows: Accounts Saving Current Term Deposit Foreign Currency Rs. / USD 1000 1000 1000 500

The bank reserves the right to change the above mentioned minimum balance requirement at any time without any notice. DOCUMENTS TO BE ATTACHED Further I learned that if you wanted to open an account with MCB then you should attach the following documents with your application form which are different for different categories: SOLE PROPRIETOR ACCOUNT In order to open an account with MCB sole proprietors have to submit their business registration certificate number. PRIVATE / JOINT ACCOUNTS For individual, private or joint accounts national identity card is required. JOINT STOCK COMPANY Before an account of a Public Limited Company is opened MCB must ask the person authorized to do so to submit the certified copies of the following documents: Certified true copy of the Memorandum and Articles of Association of the company. Certified true copy of the resolution of the board of directors / managing committee / governing body regarding conduct of the account. Certified list containing names and signatures of the directors / office bearers. Certified true copy of the certificate of incorporation or registration. Certified true copy of the certificate of commencement of business (in case of public limited companies). Balance sheet. I.D Card copy of each director. Original is also enclosed for inspection and return. List of persons authorized to operate the account. Power of Attorney in favor of the person opening account.

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PARTNERSHIP FIRM ACCOUNT Information which is required to be submitted to MCB by a partnership firm in this case is as follows: Full names Address Specimen of signatures of the partners Certified true copy of partnership deed Registration number if partnership is registered

SOCIETIES / CLUBS AND ASSOCIATIONS ACCOUNT MCB is authorized to open the accounts of the societies/clubs and associations. These are non-trading organizations, formed for the promotion of culture, science, education, recreational activities and charitable purposes etc. Some of these institution are registered under the Societies Registration Act, 1866 and are issued a certificate of registration after they have been found fit for registration.

5.3.2 DORMANT ACCOUNT


An account is closed when a customer does not make any transaction in his/her account till 90 days. A letter is send to customer to inform him/her, and in case if bank does not receive any response from customers side then the account of customer becomes DORMANT, after that a customer cannot make any DR or Cr transaction in his/her account. But in case if a customer draws a check in dormant account then it is returned back from the clearing department with a stamp of dormant account. After that customer cannot make any type of transaction in his/her account.

PROCEDURE FOR ACTIVATION OF A DORMANT ACCOUNT The customer has to give a written request for activation of the account. Copy of CNIC. And a Debit transaction on the same day is made.

After working in this area I learned that what things are compulsory to open and run an account and how we can avoid the dormant account.

5.4 ADVANCES DEPARTMENT


MCB provides the facility to the people who need advance money to meet their requirements. For getting the advance the following steps are there:

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MCB Bank Limited

5.4.1 INFORMATION REQUIRED BY THE BANK


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 borrowers 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/her bank should also be obtained. A report from credit standing bureau of State Bank of Pakistan.

5.4.2 PREPARATION OF CREDIT PROPOSAL


At first a formal application for credit approval is obtained from the party along with complete group position. The partys credibility report is obtained from the bank with which the party is doing its business. The partys credibility report is also taken from the Head office of Trade Information Division. For obtaining credit, party has to submit the at least last two years Balance Sheet and Profit & Loss statement duly attested by authorized 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 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.

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5.4.3 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. There is a separate form for every annual approval or in case of a new facility. The form contains following information: Nature and amount of limit. Purpose Security/ Collateral Margin (%) Mark up/ Charges Validity

5.4.4 TYPES OF ADVANCES


MCB provides advances, which are of two types. These are as following: Fund based Advances Non-Fund based Advances

MCB give various types fund based and few types of non-fund based advances to its customers and also to staff members. Following are the most common Fund based advances made by MCB to customers: RUNNING FINANCE This mode of funding is generally allowed to the whole-seller, retailer businessmen who are involved in day-to-day transactions. The facility is allowed on mark able securities, mortgage properties and hypothecation of stock and two personal guarantees. DEMAND FINANCE This type of advance is allowed to the borrowers, who intend to borrow for a fixed period say one year, six month, three months. The securities obtained by the borrower are mark able securities, properties document, hypothecation of stock and two personal guarantees etc. FINANCE AGAINST FOREIGN BILLS This mode of advance involves purchase of foreign bills and against exported merchandise. Banks prior to allowing advance against Foreign bills obtain proper documents like letter of credit that is in favor of exporter, bill of exchange, bill of lending, indent letter mentioning price, quality and quantity along with the quota certificate and copy of registration of exporters.

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CASH FINANCE This finance is generally allowed to cotton gunners, sugar mills, rice mills, which enables to borrower for purchasing heavy stock at peak level of harvesting. The stock is pledged with bank along with additional securities of mortgage property of factories, personal guarantees of the directors etc. EXPORT RE-FINANCE In this facility banks play role of mediator between the State Bank of Pakistan and exporters for which bank charges 3% and 10% charged by the State Bank. This facility encourages the exporters and as a result exports increases that benefits exporter in particular and is beneficial for the country in general. FINANCE AGAINST MERCHANDISE This type of finance involves to the importers who import the merchandise from the exporter by opening letter of credit in the favor of exporter. This type of finance is allowed mostly to ship breakers. The ship breakers industry in Pakistan ranks top in the world.

5.5 REMITTANCE DEPARTMENT


Transfer of money or equivalent to money from one branch to another branch is called remittance.

5.5.1 IMPORTANT TERMS


ORIGINATING BRANCH It is the branch from which money is send to another branch or the point of origin of remittance. RESPONDING BRANCH The branch which receives the instrument or money for remittance is known as Responding Branch.

5.5.2 TYPES OF REMITTANCE


According to the related officers of this department, bank promotes the facility of remitting of funds within and outside the country within certain limits. Remittance is classified into following four types: INWARD REMITTANCE The branch which receives the instrument(T.T, D.D etc) directly from the customer or from the originating branch and is responsible to pay to party is called inward remittance. For example if some D.D is drawn on our bank and we have to pay the party (to whom it was send).

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OUTWARD REMITTANCE The branch which issues or sold the instrument to the responding branch is called outward remittance. In this case we are sending remittance to another branch of the same bank in any location. INLAND REMITTANCE Transfer of money from one branch to another branch of the same bank within the same country is called inland remittance. In this case both originating branch and responding branch will be situated in the same country. FOREIGN REMITTANCE Transfer of money from one country to another country is called foreign remittance. The bank provides the facility of foreign remittance to the domestic residential and foreigners to send money from one country to another. The money can be sent in the form of demand draft, telegraphic transfer, and foreign traveler cheques all these instruments are used in a similar way as they are used in inland remittance. The bank also provides foreign exchange in the shape of travelers cheques to intending visitors. Traveler cheque is an order drawn by the bank in favor of travelers upon specific bank to pay those traveler specific amount on demand after proper identifications abroad.

5.5.3 MODES OF PAYMENT


MCB uses following four types of modes of payment DEMAND DRAFT Demand Draft is used for the transfer of money outside station. A draft is an instrument drawn by a bank in favour of any person on a branch of its own bank or any other bank to pay a certain amount of money which is demanded to the person named on it. It is not necessary for the demand draft that applicant or recipient account should be open in originating and responding branches. It is one of the cheapest methods of transference of money within the country or outside the country. Applicant has to fill in the application form for availing the facility of demand draft. After depositing the amount of draft, remittance officer prepares the cheque of demand draft. When banker issue draft to the customer, banker also records customer particulars in a demand draft register where record is maintained branch wise. Responding branch and originating branch debit/credit the head office account and send the daily statement of transaction to head office.

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PAY ORDER Pay Order is used as instrument for transfer of money within station or city. Pay order is written order, which is issued and received by the same bank or drawn and payable on same branch. For pay order it is not necessary that applicant should be account holder. It is used for local transference of money from one person to another.

MAIL TRANSFER The transfer of money from one branch to another branch of the same bank through mail or courier service is called mail transfer. The applicant should be the regular customer or the account holder of the responding as well as originating branch.

TELEGRAPHIC TRANSFER Originating branch send funds to responding branch instantly and immediately through telegram and fax. Bank charges commission, telegram/fax charges on telegraphic transfer.

ONLINE FUND TRANSFER Online transfer also known as Cross Branch Transaction (C.B.T), is most reliable, fast and safest mode of fund transfer. General customer as well as the walk-in customers can send money from one branch to another branch of the same bank online. This facility is only available in those branches of MCB, which have the MNET facility available with them.

Appendices: Remittance Process

5.6 CASH DEPARTMENT


Although internees were not allowed in cash department because of sensitivity of matter, they provide me maximum possible knowledge and I spent a small amount of time in cash department. In cash department both deposits and withdrawals go side by side. This department works under the accounts department and deals with cash deposits and payments. 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. Cashier manually inspects the Cheque for following: Signature & date Cross cutting Drawers account title Amounts in words & figures
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MCB Bank Limited

The cheques should not be stated as post dated. If in the Cheque, there is any discrepancy regarding any of the aspects described above the cheque then is returned to the customer for rectification. On other hand if the cheque is valid in all respects, the cashier enters the necessary inputs in the computer and 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 easily and quickly see whether the amount being withdrawn exceed the balance or within the balance. If the amount does exceed the balance then it is upon the discretion of the manager to allow an overdraft and not depending upon the customers reputation. If manager does not allow an overdraft, the procedure is repeated again as described for the mismatch of the signature cheque is return. The detail of notes (currency) is written on the back side of the Cheque. The cashiers at the same time maintain the Cash Voucher Received Record Sheet. Then once again inspect the signature of the customer cancellation mark of checking officer and stamp of POSTED is placed on cheque before hand over the cash to customer. New Notes and Prize Bonds are also part of the Cash Management. Keys of the Safe lockers are with the three authorized persons each one of them is responsible for cash as at the time of closing the cash the officers including Cash officer presented and lock the safe after counting and scrutinize the cash. At the end of the working day cashier is responsible to maintain the cash book balance. The cash book contain the date, opening balance, detail of cash payment and received in figures, closing balance, denomination of government notes (Currency). Its checked by manager. 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 = Balance All the books maintained in this department are checked by office and after being satisfied the manager authenticates the books and vouchers regarding cash with stamp and signature. The closing balance of today will be the opening balance of tomorrow. At the end I would like to conclude that the cash management is being done in the MCB very effectively.

5.7 CHEQUE BOOKS & DEBIT CARD ISSUANCE


In this department I learned following things:

5.7.1 ISSUANCE OF CHEQUE BOOK


Any account holder that has opened the account he/she should need cheque book in order to credit his/her account. For the issuance of cheque book a person is advised to fill a

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MCB Bank Limited

requisite slip with his/her full names and account number with two verified signatures. These signatures are checked and then another requisite slip is prepared by the bank staff, send to the NIFT. NIFT issues the printed cheque books after completion of the procedure in two or three days. Account holder can take it by signing on the issuance register or in the absence of the account holder another person could also take the cheque book only if he/she has authorized signature (or letter) of account holder. When cheque books are issued they are feed in the computer system from the requisite slip so when the cheques are given for the credit/transfer of amount they could checked. In this way neither the cheques could be repeated nor could the invalid cheques be claimed.

5.7.2 ISSUANCE OF ATM CARDS


For the issuance of ATM card a person is advised to fill a requisite slip with his/her full names and account number with two verified signatures. These signatures are checked and then another requisite slip prepared by the bank staff sends to the Head Office instead of NIFT. Head Office issues ATM (Auto Teller Machines) cards with their PIN (Personal Identification Number) codes in one week and when customers claims for their ATM card they are checked from the list and if the name is found then the cards are issued by taking a signature and they get PIN codes and also activate their ATM cards (by the number provided at or with the specific card) by making call to MCB call center Karachi.

5.8 CUSTOMER SERVICE DEPARTMENT


The primary responsibility of CSO is to guide the customer in the best possible way & resolve their queries proficiently. During interactions, CSO create positive image of bank and establish strong relationship with customer. CSO also provides the best service to the customer in a professional style to improve the service quality standards of the branch. CSO reports directly to the branch manager for day-to-day matters and indirectly to service quality department. CSO (Customer Service Officer) performs the following activities: Attended phone calls. Attended customer inquiries and Guide customers. Check the balance of accounts on request. Reply to the mails for signature verification. Received ATM forms. Received inward and send outward DAK. Make entries for daily DAK. Provide forms for Fund transfer. Provide check book requisition slip (if lost).

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MCB Bank Limited

5.9 INFORMATION TECHNOLOGY


I.T center in this branch is the central hub for all the branches in region. It deals with all I.T related issues faced by any branch in region. It is consists of three departments: Hardware Department Software Department Network Department

5.9.1 HARDWARE DEPARTMENT


Here I learned about Pc systems and servers that connect all branches of MCB together. Here I also learn about ATM (auto teller machine). I.T division in Karachi is responsible for repair and maintenance of all devices used in different branches of Sindh.

5.9.2 SOFT WARE DEPARTMENT


Here I learned about Symbols (an oracle software) used in all branches of MCB. Bank uses the full suite of the latest version of SYMBOLS Version 8. Bank runs SYMBOLS E-Finance modules to deliver personalized services to its customers over multiple delivery channels, while SYMBOLS Enterprise Operations Center serve as its core banking transaction processing engine.

5.9.3 NETWORK DEPARTMENT


Here I learned about MNET and optical fiber. M-Net switch has currently 612 ATMs in about 50 cities and is one of the largest networks for secure online real time financial transactions. MNET enables all the member banks to share their electronic networks which means customers of member banks can use MNET as well as 1-Link ATMs Nationwide. MNET member banks ATM machines accept cards issued by MCB Bank Ltd, Citibank, Standard Chartered, HSBC, My Bank, Bank of Punjab, Prime Commercial Bank, Saudi Pak Bank Limited, Habib Metropolitan Bank, KASB, JS Bank, Deutsche Bank, SME Bank, Arif Habib Rupali Bank and First Women Bank. MNET customers can use over 600,000 ATMs worldwide that carry the logo and shop at over 5 million outlets that carry the logo.

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CHAPTER # 6

PROBLEMS IDENTIFIED AT MCB

6.1 PROBLEMS IDENTIFIED AT MCB


During my internship at MCB I found some problems at bank, which were acting as the barriers to the banks growth and expansion. The problems which I identified are following:

6.1.1 SHORTAGE OF STAFF


Almost in all branches of MCB the problem of Shortage of Staff is very common. Whenever there is shortage of staff in any organization it always results in lot of work and also boots up the destructiveness.

6.1.2 STAFF IS NOT ADEQUATELY TRAINED


Staff of MCB is not adequately trained with the contemporary era. Basically MCB is from the very beginning, is pioneer of new products including ATMs, Mobile Banking and Online banking as well but as they developed the new systems and products in order to satisfy the customers want they didnt get their staff trained in relation with those innovations. MCB having two staff colleges one in Lahore and One in Karachi but both make you aware of the systems and procedures but are not training or can say emphasizing on these innovated products.

6.1.3 OTHERS
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. No proper allocation of duties, no suitable person for suitable job. Distribution of work is not on equity basis, work has not been allocated properly some workers have to work hard in late hours without any extra reward. So I suggest that steps should be taken to allocate the work properly. In MCB employees turnover is high because of less job satisfaction that is the result of over workload, less incentives, no facilities like lunch break or tea etc. satisfaction of staff is necessary for the satisfaction of customers and for the growth of company.

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CHAPTER # 7 7.1 CONCLUSION

CONCLUSION AND SUGGESTIONS

In a nut shell it can be concluded that the overall performance of the MCB is quite satisfactory. No doubt MCB is one of the best banks of Pakistan and MCB has unique set of values and responsibilities as compared to other banks in the economic development of the country. Bank provide help in many governmental transaction in which it deals with general public so it needs improvement in its system to reduce flaws. I personally feel that MCB has effective impact on the well being of our economy, as it is growing its roots day by day. Employees of MCB Risala Road branch work more than their working hours and all the workings take place in a very friendly atmosphere that does not induce pressure on the person working there. It also shows their loyalty and commitment to the organization. This branch of MCB is relatively large and has climbed its way up very quickly and all that only because of the employees efforts and consideration for each other. Understanding and the effective management of the human resources is the most difficult challenge faced not only by the MCB but by all the organizations. Even though the people have been sacrificed in the new organizational developments, it is becoming clear that the true lasting competitive advantage comes through human resources and how they are managed. MCB seems to not focusing on this highly critical issue as the job satisfaction level of the employees working at MCB, was quite low. I personally want to say that I have gain a lot of experience and became able to know that how the theoretical studies can be implemented in the practical life. With Cooperation of all branch members, I have been able to learn and experience many new things related to the banking sector and the banks workings. I am able to handle the public with respect to many different workings on many different instances and also in account opening for customers and can handle many other tasks as well.

At the end I wish for the rapid and successful growth and prosperity of MCB bank which is already known as a progressive bank.

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7.2 SUGGESTIONS
On the basis of the problems that I have identified at bank during my internship I have following suggestions for the improvement of efficiency and effectiveness of bank:

7.2.1 REFRESHER COURSES


Changes with the environment the knowledge of a person requires being improved or enhanced according to demand. This can help to perform operations effectively. Time to time Refresher courses in different disciplines introduced to enhance the efficiency of the staff. All 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. Some more reading material should be provided the purpose should be to educate the employees with the advance studies in their field. The employees should be provided the opportunities to attend and participate in seminars and lectures on banking.

7.2.2 REWARD AND PUNISHMENT


Better reward and punishment system is one of the most important requirements in order to reduce the problem of Employee retention and improve Employee motivation. It is human nature one goes behind reward and incentives while and try to avoid punishment. Likewise in commercial institution like bank this system be introduced with full force means active smart, educated skilled, self spoken and well versed staff person, should be reward and appreciate, while on the other hand lazy, lethargic, rough dealers and ill mannered must be warned, penalized and punished. But this all should be on merit and considering the policy of honesty is the best policy. Certain schemes and checks should be introduced in banks to increase efficiency and reduce turnover through reward and punishment system.

7.2.3 OTHERS
The period of internship should be divided into the number of department of the MCB. The internee should be given a timetable mentioning the number of days he/she has to work at different places in the bank. On the 1st 2 days in each department internee should be given a lecture by the officer of the department concerned about working of the department.

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APPENDICES
ORGANIZATIONAL SETUP

HEAD QUARTER

LAHORE

PROVINCIAL HEAD QUARTERS

PUNJAB

LAHORE

SINDH

KARACHI

BALOCHISTAN

PESHAWAR

NWFP & AZAD KASHMIR

QUETTA

CIRCLE OFFICES

BRANCH OFFICES

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CLEARING PROCESS FLOW CHART

Cheque with slip given

Slip is asked & filled

Cheque along with slip checked, signed & received by officer Entries in daybooks are made Entries checked & verified by another officer after banking hours Cheques collected at the day end by NIFT Officials Cheques are sent to respective banks next day after posting in computer by NIFT

The same day not honored cheques are returned to NIFT The day after tomorrow the banks are informed about dishonored cheques Provisional entries for returned cheques are debited again in both computer & daybooks Party is informed about returned cheques through Phone or personal contact Cheques are mailed through TCS in case of no personal contact the same day (If there is any availability)

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REMITTANCE PROCESS (DEMAND DRAFT)

Remitter

Draft

Beneficiary Fund received

Draft

Issuing Branch

Advice

Drawee Branch

PARTIES INVOLVED IN THE DEMAND DRAFT


1. Purchaser/Remitter: Is the person, firm, company or local authority.

2. Issuing or Drawing Branch: The Branch which issues a Draft on another Branch. 3. Drawee Branch: Is the Branch on which a draft is drawn. 4. Payee / Beneficiary

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REFERENCES
WEBSITES:
For preparing my internship report I use following sites: http:// www.mcb.com.pk http:// www.mcbannualreport2010.com.pk http:// www.mcbimages.com http:// www.mcb.com.pk/psc/remittance/default.asp http:// www.essaysfree.com http://en.wikipedia.org/wiki/Muslim_Commercial_Bank

PERSONS:
For preparing my internship report, following People help me: MCB Bank Staff: Sir Yasir (Internal Control Officer) Sir Zaheerudin (Branch Manager) Sir Shohab (Foreign Exchange Incharge) Maam Saba (Customer Service Officer) Maam Shireen (Cash Supervisor)

Teachers Maam Hira Bachani Maam Paras Bhatti

OTHERS:
For preparing my internship report I also use following other sources: MCB annual report MCB Brochures Credit Manuals Branch Operations manuals

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