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MBA (3.5y) Session (201115)

Dedication:I dedicate all my efforts and struggles of the

educational life of my dear parents who help support
and guide the course of my educational life, without
them Im meaningless. Also I devote the work of this
internship report on MCB report, as respectable and
honorable teachers who teach and support me develop
my personality as a competent professional. This
internship report on bank dedicated to all students.

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Acknowledgement:FIRST OF ALL I THANKS TO

I am highly thankful to my respectable teachers and friends and
family members who were my supporter throughout my
educational career, further I thank all the employees of the
branch MCB bank Limited, where I have done my internship. The
internship report on marketing of Muslim commercial bank was
encourage by all students.
I have set light, an ever-burning flame of gratitude and deep
sense of obligation to my honorable teachers of Department of
Business Management Sciences for their valuable guidance,
constructive criticism and inspiring attitude during my studies. I
appreciate and thanks to all the member of the faculty. Besides,
this internship program makes me realize the value of working
together as a team and as a new experience in working
environment, which challenges us every minute. Not forget, great
appreciation go to the rest of MCBs staff that helped me to write
internship report on Muslim commercial bank (MCB) from time to
time during the project. The whole program really brought us
together to appreciate the true value of friendship and respect of
each other.
Last words are lacking to express my feelings and indebtedness
to my affectionate Family and Friends for their love,
appreciations, which always stand by me mentally and spiritually
during all years of my study

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Introduction:Muslim Commercial Bank is one of the leading banks of Pakistan with a deposit base of
about Rs. 280 billion and total assets of around Rs.300 billion. Incorporated in 1947,
MCB soon earned the reputation of a solid and conservative financial institution managed
by expatriate executives. In 1974, MCB was nationalized along with all other private
sector banks. This led to deterioration in the quality of the Banks loan portfolio and
service quality. Eventually, MCB was privatized in 1991.
During the last fifteen years, the Bank has concentrated on growth through improving
service quality, investment in technology and people, utilizing its extensive branch
network, developing a large and stable deposit base and managing its non-performing
loans via improved risk management processes.

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Vision Statement:To be the leading financial services

provider, partnering with our customers for
a more prosperous and secure future

Mission Statement:We are a team of committed

professionals, providing innovative and
efficient financial solutions to create and
nurture long-term relationships with our
customers. In doing so, we ensure that our

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shareholders can invest in us with


OUR VALUES:These are the standards and principles which determine our behavior and how we interact
with our customers and each other:

1. Integrity:We are the trustees of public funds and serve our community with integrity. We believe in
being the best at always doing the right thing. We deliver on our responsibilities and
commitments to our customers as well as our colleagues.

2. Respect:We respect our customers values, beliefs, culture and history. We value the equality of
gender and diversity of experience and education that our employees bring with them. We
create an environment where each individual is enabled to succeed.

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

4. 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.

5. Innovation:We encourage and reward people who challenge the status quo and think beyond the
boundaries of the conventional. Our teams work together for the smooth and efficient
implementation of ideas and initiatives.

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Introduction of Banking
Sector:Banking in its modern form and structure started in Britain when many of the Lombardy
merchants came to England in the fourteenth century and settled in the parts of the city of
London now called Lombard Street.
Over the period of time they discovered that large sum of the money were left in their custody
for long periods; which suggested the use of cash to advance loans t other person for a fixed
period of time and considerably high rate of interest. Thus began the issue and deposit
banking of the modern times. Some of the enterprising goldsmiths issued cheque books for
the attraction of their customers; and thus another step in the evolution of banking had taken

Executive Summary:MCB is one of the leading banks of Pakistan with a deposit base of Rs. $ 368 million and
total assets exceeding 500 million rupees. Founded in 1947, MCB soon earned reputation of a
solid and conservative financial institution directed by expatriate executives. In 1974, the
MCB was nationalized along with all other private sector banks.
MCB bank is doing the day and the night struggle to achieve their purposes. These control
costs and increase efficiency and effectiveness. It introduces the innovative concept of
centralized services foreign trade branch to improve efficiency competition and reduce
shipping costs. Hence the internship report on MCB is presenting true picture of this
organization. In coming pages of this internship report on Muslim commercial bank (MCB)
readers could be able to understand how to write a effective internship report on MCB with in
time table.
During my internship at the MCB, I worked in remittances, advances, cash, deposits,
customer service department office and successfully completed all tasks and duties were
allocated to me. It also performs different functions in all departments as a whole. Therefore
in the internship report on Muslim commercial bank(MCB) is presenting true facts of this
MCB bank branch and overall of this organization. The main of this internship report on mcb
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was to display a background picture of this organization as well as its SWOT analysis of

Future Prospects of the

Organization:The board of the directors and management of the MCB bank truly believe in the resilience of
Pakistani nation to overcome the political and economics challenges face up by the country.
We believe that the country fundamentals give it an edge to recover better then many nations
from the global financial crises. So the internship report on Muslim Commercial bank(MCB)
is giving true finding about future prospects of the organization.
We intend to keep investing in and nurturing the abundant natural and human resources of
Pakistan. MCB bank maintains its presences in the region, which its believes to have
enormous potential for growth. MCBs is exploring new markets and plans to open more
overseas operations once the global financial markets start showing sign of sustainable
recovery and growth in business. Meanwhile we are focusing on consolidating our position
abroad in the existing operation.

Departments of MCB:I did internship in Railway Road (0260) branch which had the following departments.

The Following are the Departments that are Operate in Railway

Road Branch.
1. Current Saving Department
2. Accounts Department
3. Remittance Department
4. Clearing Department
5. Cash Department
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6. Advances
7. Customer Relation Department

Organizational Structure of
the MCB Branch:-

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Account Opening:Application Form:

The customer would like to open his account is required to meet with the manager or second
officer, who will give him an APPLICATION FORM.

Specimen Card:
As I have already mentioned about Signature Specimen Card. This card contains two
signatures of an applicant, applicant A/c no, A/c type, branch code, title of A/c, it will be
attached with an application form. Banker uses this card at the time when he receives the
cheque; he compares customers signature with the signature on the cheque for avoiding
Manager has every right not to accept this contract if he is not satisfied by the details
provided by the customer.

Account Opening Register:

The manager records the necessary details into this register and allots an a/c number from
this a/c opening register. This register is maintained for each type of account and the a/c
numbers are allotted serially. After opening a saving and current account every applicants
data is entered into the computer to maintain a safe record and application form is properly
filled so that it can be available when necessary.

Cheque Book:
Cheque book is issued to the customer when. the bank accepts the A/C opening application
form and letter of thanks is received.

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Types of Customers:The Following are the types of Customers,

INDIVIDUAL:Only one person can operate this a/c. We can call it a personnel or individual a/c.
Followings are the requirements to open this Account
1. Signature of customer on back of AOF.
2. N.I.C photocopy attached
3. Mention next of kin (nominee)

JOINT : In case of joint A/c, applicant mentions that how much person will operate the A/c.
Instruction are given for joint A/c such that the account shall be operated by

Any one of us or survivor:

In first case if one of the a/c holders died then the other can operate the a/c individually.

Any two/All of us jointly:

In second case if one of the a/c holders died then the other partner cant operate this a/c
individually without having permission from the court.


Sign of both customers on back of AOF

Sign on joint A/C # mandate
Name and A/C # of introducer
NIC copies of both members
Mode of operation

Partnership A/C
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For partnership a/c, along with the application form signature card. Other documents are
also needed such as
1. Partnership deed certified copy
2. NIC photocopies of all partners.
3. Partnership mandate for account signed by all the
4. A letter duly signed by all the partners containing the
operating instructions of the account also has to be taken.
5. In case of addition or withdrawal of any partner a new
agreement will be required.

Company Account:For company accounts following documents are required: 1.


Copy of certificate of incorporation

Memorandum of Association
List of Directors
Copy of board resolution
Certificate of Commencement of Business
Copies of NIC of Directors
Companys Balance Sheet

Letter of Thanks:
Bank prepares Letter Of Thanks for the new customer. This act promotes good will
among the customer.

PayIn Slip:
This slip is used for depositing the additional amount. The bank will accept the Pakistani
notes. All cheques and other instruments should be crossed before they are deposited for
credit into the account. There shall be no restriction on number of withdrawals in current
account. An account holder wishing to close his account must surrender the unused
cheques to the bank. The current account is computerized, thus it generate the statement
of account for all account holders periodically. Incidental charges of Rs.50 are beard by
the account holder if its credit balance is less than Rs.10000.

Closing of an Account:Page 13

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

If customer desires to close his account

In case of death of one account holder
Bankruptcy of the account holder
If an account contain nil balance or not up to the
requirement of rules

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

Payment of Cheques:The first work that was assigned to me was Scrutiny of cheques. It is considered, as the
simplest work in consumer banking operations, but actually it is not that simple. The
cheques that are presented for either payment or for deposit are the main points where
most of the frauds occur.
There are few points to be noted while scrutinizing a cheque for payment or deposit,

Date of the cheque

Signatures of drawer
Signature of Presenter
Amount in figures and words
Branch stamp
Account number of the drawer
Crossing in favor of any other person

The cheques which are presented for deposit in accounts of customers for them a pay-inslip is to be filled in and the cheque is presented along with that slip. As the cheques are
taken for deposit in customers account, a Cheques Receipt Summary is prepared in
which cheques are entered according to their category, i.e., Transfer Delivery, Clearance
or Collection.
Call Deposit Receipts are also issued to the customers especially before the holy month of
Ramzan. The reason is that customers convert their savings from saving account to the
PLS account. The reason for this activity is that the customers want to take out there
money from the accounts in order to skip the deduction of Zakat. For this purpose, CDRs
were issued having both applicant and beneficiary the same person.
CDRs are issued to the contractors favoring building departments in order to get tenders
for various buildings.

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Types of Accounts:The followings are the types of Accounts,

The current account is the most common account and the most preferred amongst
business concerns. The theoretical explanation for this would be that they can function
more efficiently but since in reality there are no restrictions on any with drawl the only
reason we could think of is that current account facilitates online banking which saves
time (which in this ultra competitive business world the most precious resource) to a
considerable extent. In case of a current account the client does not earn any interest.
Current account enables the client to do cash transactions in a more efficient manner

A sum of Rs. 10000/= in cash as initial deposit is required for opening a current account
and the same may be maintained as minimum average running credit balance. No profit is
paid on credit balances held in current accounts. The bank reserves the right to allow
opening of current a/c at its description. All deposits and withdrawal from a current a/c
takes place only at the branch where the account is being maintained. Current a/c cannot
be overdrawn, except by prior agreed agreements with the bank. The correspondence
relating to current A/Cs should be addressed to manager of the branch where the account
is being maintained.
The account holder can draw sums from his account by means of cheque supplied to him
by the bank for that particular account. Account holder should take well care of the
chequebooks issued to them.

Saving Account:Individuals who wish to earn profit/interest on their investment normally maintain the
profit and loss sharing account but in order to earn interest the client is required to keep
his/her deposits with the bank for some time. In theory there are some restrictions on
withdrawal of money from a Profit and Loss Sharing account but in general banking
practice there is no restriction on any with drawl from a Profit and Loss Sharing account.
The interest/profit is paid half yearly.

Profit and Loss Sharing Account:PLS saving account having a running minimum credit balance of RS.10000. The bank
would be within its rights to make investment of credit balances in the PLS saving
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accounts in any manner at its sole discretion and to make use of the fund to the best of its
judgment in the banking business under the PLS system.

Profit/Loss:The profit/loss will be credited/debited on the basis of its net working results at the end of
each half-year. Calculation of products on PLS saving A/c will be made for each calendar
month on the lowest credit balance of an account between the close of business on the
6th day and the last day of the month.

Rules for PLS:1. Account holder can only withdraw sums from his account
by means of cheques supplied to him by the bank for that
particular account.
2. Post dated and stale cheques will not be paid.
3. The bank reserve to itself the rights to close any account
without previous notice any account which has not
satisfactory account credit balance.
4. If the account holder withdrawals the money under 7 days
notice, the profit loss earning products will be computed
on the monthly minimum balance. Zakat is deducted every
year on non-exempted accounts.

Saving 365 Gold:This account is newly developed of MCB and it provides flexibility of saving account to
business people. Profit on deposits will be payable on daily product basis on balance of
RS. 500,000/- and above. However, if balance in the account falls below RS. 500,000/- on
any day, the product will be ignored. There will be no restriction on withdrawal from the
account. Zakat and withholding Tax is also applicable on the account opened under this

Minimum balance is Rs.500,000/=

Below minimum balance, profit calculation ignored
Profit calculated on daily basis
Profit paid on annually basis
Zakat deducted on @ 2.5%
The higher the balance, higher the rate is offered.
Profit calculated on daily basis.
Profit paid into your account every month

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Term Deposits:Term deposits are fixation of certain amount of money for a specific span of time. The
instrument term deposit is like a slip containing issuing bank name, a/c # to operate on
computer, deal #, customer name, reference #, date of issue, amount, rate maturity date

Accounts Department:Every transaction which takes place recorded in the computer so all transactions in
different departments are forwarded to account department. Since all vouchers from
different departments are forwarded to accounts department so this department tallies all
such transactions with current department after maintaining the ledger of each
department. The branch where I worked Mr Azeem-ud-din Bukhari was performing these
activities. I was not allowed to use software but I observed all the fuctions performed by
Following are different functions performed by this department,
1. Preparation of Financial Statements for different time
2. Maintain all accounts of different departments
3. Calculation of profit on different schemes
4. Calculation of markup on different advances
5. Preparation Different types of reports for State Bank
6. Daily position of cash & every accounts
7. Matching daily summaries of all departments with ledger
As swift software is used therefore all these tasks have become quite simple just it
requires posting and then all tasks can be performed by giving computer commands.

Remittances:The need of remittance is commonly felt in commercial life particularly and in every day
life general. A major function of any banking system is the transfer of funds from one
client or one place to another. By providing this service to the customer the bank earns a

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lot of income in the form of service charges. This department deals with local currency
remittance i.e. remittance from one city to another without actually carrying the currency.
MCB uses following instrument for transferring of money,

Demand Drafts (DD)

Pay Order (PO)
Telegraphic Transfer (TT)
Mail Transfer (MT)

Demand Drafts (DD):DD is a written order given by the branch of the bank on behalf of the customer to other
branch of the same bank to pay the certain amount to the customer. DD are issued for the
particular place other than place of issuance. A drafts is a Cheque drawn by a bank on its
own branch or any other branch of another bank at a different place requesting it to pay
on demand a specified amount of money which is already received to the person named
on it.
DD is of following two types,
1. DD payable
2. DD Paid Suspense a/c
In the first type as advice reaches for payment the immediately pay to the customer while
in later as DD presented by the customer, it is paid and the suspense account is debited.

Documentation:A printed application form is provided for filling in completely and signing by the
applicant. After depositing an amount of draft and commission of the bank, duly
completed and signed by two authorized officers, then it is handed over the applicant and
credit order is dispatched to drawer branch.

Following are the pre-requisites for the processing of DD,

1. Bank Serial No
2. No. of DD
3. Central No
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4. Test Key

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

DOCUMENTATION:The party who requires a pay order will get a printed application from the bank. He will
fill it and deposits the amount and commission. The bank charges are same as on demand
1. Bank Serial No.
2. No. of PO

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


Issuing Branch Name & Code

Beneficiary Branch Name & Code
No. of TT
Amount in words & Figure
Test key

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


Issuing Branch Name & Code

Beneficiary Branch Name & Code
Number of MT
Amount in words & Figure
Test key

Clearing:All the external functions of clearing are carried by NIFT (National Institute of
Facilitation Technology) while the internal operations are performed by clearing
department. It is just like any courier service which takes the cheques of other banks and
delivers the cheques of that branch to it.
Clearing is a system by which banks exchange cheques and other negotiable instruments
drawn on each other within a specified area and thereby securing the payment for its
clients through the clearing house. A clearing house is a general organization of the banks
at a given place, Its main purpose is offsetting the cross obligation in the form of cheques.
When there are many banks in the country each will receive a number of cheques drawn
on other banks, deposited within for collection. A clearing house is an organization where
these cheques are brought and the mutual claims of each bank on the other are offset and
a settlement is made by the payment of differences. The representatives off all the banks
in Pakistan attend office of the bank which is performing these duties of clearing house,
on each business day at a fixed time. They deliver cheques that their bank may have
negotiated and receive in exchange cheques drawn on their bank negotiated by other
bank. The responsibility of smooth cooperation of the clearing function lies with the State
Bank of Pakistan.
The operation of clearing refers to the collection of cheques drawn on other banks. These
cheques may be drawn on UBL, HBL, NBP, or any other bank of Pakistan. The respective
officer collects all cheques and enter them in clearing Register. Then he affix a stamps on
these cheques and sorts out cheques of different banks and prepares schedule for them.
These cheques are sent to clearing house. Exchange of cheques takes place through NIFT.

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Further they settle their account. State Bank of Pakistan representative will work out the
balances and will settle their account from their balances with State Bank of Pakistan.

Advances:It is another major department of the branch. Bank provides this facility to the people
who need advance money to meet their requirements. For getting the advances, the first
step is the preparation of credit proposal. Some principles of lending are considered
whenever financing being is made.
These principles are:


Required Information:1.

An assessment of his business abilities

Accurate & up-to-date financial statements
Market reports about the borrower
Party dealing with other banks
Nature and structure of borrower business
Names of proprietors, partners or Directors
Detail of companies associated with borrower business
Financial condition of borrower business

Preparation Of Credit
Proposal:At first, a formal application for credit approval is obtained from the party along with
complete group position. The parties credibility report is also obtained from the banks
from which the party has been doing the business. The party creditability report is also
taken from the head office of Trade information Division.
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For obtaining credit, party has to submit the last two years Balance Sheet and Profit &
Loss Statement duly attested but authorized auditors. If the party also involve in export or
import business then the bank also consider the data of three years about imports and
The Current and Debt equity ratio is also calculated by the bank.
Then recommendations are made the type of data required to prepare the credit proposal
is to be gathered from different departments. Some data is obtained from the foreign
exchange department. Some data is obtained from current account department and some
data is available in Advance Department. The purpose for which the financing is required
should be explained very clearly. The securities offered by the party to the bank is also
evaluated. In case of pledging of the property in shape of land or building the complete
evaluation of the property should also be attached.
After all the requirements and necessary documents for applying for advances is fulfilled
by the party then, the case is sent to the Chief Manager for approval. If the manager find
any discrepancies, he may write on these documents. If the credit limit is in his range, he
may approve the party for credit. If the amount is exceeding the Chief Manager send the
case is forward to the Circle Office for approval and here the same procedure is repeated
and if the credit amount is in the range of GM, he can approve and if the credit amount is
very large from Circle Office, the case is then sent to Head Office and if it is a real big
then is to be decided by Board of Director. MCB provides advances which are two types.
These are two types of advances:
1. Secured Advances
2. Unsecured Advances
In secured advances, the bank takes any security against the loans while in case of
unsecured advance no security is taken by the bank.

MCB divided the advances in to two major types:

1. Fund Based
2. Non Fund Based
In the fund base advances, the funds of MCB is involved and in Non Fund based only
guarantee is given by the bank.

Fund Base Advance:Page 22

MCB have following Fund base facilities of advance in its corporate branches. The details
of these types would be later.

These are as follows,

1. Demand Finance (DF)
2. Cash Finance (CF)
3. Running Finance (RF)

Demand Finance:This is a type of secured loan and demand loan never allowed without security. It is a type
of long term financing. MCB also gives loan under the head of demand finance to
individuals, industrial units commercial business etc.

Cash Finance:In this, the borrower gives a specific reason for the need of cash. MCB gives the facility
of cash credit to business. The amount is passed through voucher and credit to the party
account. Normally 0.60 paisa per thousand is charged on daily basis to customer.

Running Finance:These finances as evident by the name are given to the business to meet their daily needs.
The mark up is charged on daily balances. This type of advances are given to trade,
commerce and manufacturing for general purpose. Normally 0.60 paisa per thousand is
charged is charged on daily basis. It is drawn through Cheque.

Letter of Credit:A letter of credit is a written instrument issued by a bank authorizing the seller to draw in
accordance with certain terms and stipulating legal forms, that all such bills will be

How a letter of credit is opened ?

1. Application for a letter of credit
2. Line of credit
3. Opening of the letter of credit
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4. Handling of the documents

5. Payment by the importer to the bank
6. Liability of the issuing bank

Application for a letter of credit:

An importer prepares an application on the prescribed form available from the bank. The
information which are supplied in the application are based on the contract of sale and
include only the importer feature of contract such as the value of the merchandise, port of
shipment, port of unloading, expiry date of the papers and brief description of the goods.
If the bank is satisfied with the applications, it will signed and acceptance agreement with
the importer.

Line of credit:
Before issuing a letter of credit, bank takes all necessary precautions for securing its
credit. The bank first examines the customers credit standing, the type of goods to be
imported, the market demand for the goods, the collateral offered to cover the credit.
Then it establishes the amount i.e. the line of credit.

Opening of letter of credit:

The letter of credit can be opened by mail or by cable. When it is opened by mail, the
issuing bank sends letter of credit and to carbon copies to the importer. The importer then
dispatches the letter of credit to the exporter in foreign country by mail. One carbon copy
is kept for the record. The second carbon copy after signing is sent to the bank by the
importer. If an importer directs the bank to open letter of credit by cable, the importers
bank sends a cable to the corresponding bank in the foreign country with a request to
notify the exporter.

Handling of the documents:

When the exporter receives a letter of credit, he presents the required documents and the
draft to the bank in his own country after shipping of documents. If the bank is satisfied
with the documents in the importing country and pays the exporter at official ratein the
currency of his own country.

Payment by importer to the bank:

When a bank approves the application of a customer for opening letter of credit, it does
not lend money to the importer. The bank only lends the importer to use the credit
standing of the bank to the exporter in the foreign country. The bank makes a contract
with the importer that when the draft if send by the negotiating bank for payment the
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importer will make the payment to the bank not later then the day only the bank is to
honour the obligation. In case of a sight letter of credit the payment to the corresponding
bank is to be made on the day the draft and documents are received. When the time of
letter of credit is used the importer is to arrange the payment not later than the day on
which the draft is to mature.

Opening of Letter Of Credit

In MCB:1.

Before opening of L/C certain requirements are necessary that are

The applicant must has import registration number
He must has account in that bank
He must pledges his security against the L/C amount

Cash Department:In cash department both deposits and withdrawals go side by side. This department works
under the accounts department and deals with cash deposits and payments. This
department maintains the following sheets, books, ledger of account:

Cash received voucher sheet.

Cash paid voucher sheet.
Cheque Book
Cash balance book

Cash Paid Sheet: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. Cheques can be of two
types, they may be presented at the counter and enchased and the others are clearing or
transfer cheques.
Cashier manually inspects the Cheque for following:
1. Signature & date
2. Cross cutting
3. Drawees a/c title
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4. Amounts in words & figures

5. Two signatures at the back
The cheques should not be stated as post dated. If in the Cheque there May discrepancy
regarding any of the aspects described above the cheque is returned to the customer for
rectification. On other hand if the cheque is valid in all respects, the cashier enters the
necessary inputs in the computer and 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 so exceed the balance or within the balance. If the
amount does exceed the balance then it is upon the discretion of the manager to allow an
overdraft and not depending upon the customers reputation. If he does not allow an over
draft, the procedure is repeated again as described for the mismatch of the signature
Cheque is return.
The detail of notes (currency) is written on the back side of the Cheque. The cashier at the
same time maintains the Cash Voucher Received Record Sheet. Then once again
inspect the signature of the customer cancellation mark of checking officer and stamp of
POSTED is placed on cheque before hand over the cash to customer.

Cash Received:For depositing the cash into customers accounts, there is

need to fill in the paying-in-slip giving the related details
of the transaction. This paying-in-slip contains the date,
a/c/no, a/c title, particulars, amount being deposited and
details of the cash. There are two portion of the paying-inslip. The depositor signs the one part of the paying-in-slip
one is retained by the bank to show an acceptance of the
entries made in the slip.
The different colored paying-in-slip are used for all the types of deposits. Only the slips
related to a particular type of a/c is acceptable by the bank. For example current payingPage 26

in-slip for current a/c and saving paying-in-slips for saving a/c etc. The paying-in-slip
serves as a voucher to update to computerized transaction ledger. The transaction ledger is
only updated by paying-in-slip and Cheque. The cashier responsible to receive both the
paying-in-slip and cash from the depositor. The cashier check the necessary details
provided I the paying-in-slip and accounts the cash and tallies with the amount declared
in the slip. If the amount does not tally with the cash given, the deposit is not entertained
until the customer removes the discrepancy.
On the other hand if the two amounts tally, the cashier fills in the Cash voucher received
Record Sheet and assigns a voucher no. to both the transaction being made in the sheet
and the slip. This voucher no. starts with one and continue by serial increments of one for
each day till the closing of the sheet, the cashier fills the voucher no, an account, cash day
till the closing of the sheet. The cashier fills in the voucher no, an account of, cash entry
in the related type of a/c and he post his initials on both part of the voucher. Then the
cashier send both to the accountant who verifies all the entries in the two documents, if
the entries in the two documents, if the entries in the two documents tally with one
another, the accountant authenticates the two by singing on the two documents and
posting stamps on the slip. One part of the slip is then returned to the customer and other
is given to the computer operator. A very important check is that the dates mentioned into
the two documents must be the same.
The cashier posts the transaction entries in computer ledger. This ledger contains the a/c
no, a/c title, voucher no, voucher date, transaction code, transaction amount. After posting
these entries, computer display before posting balance and after posting. On every
transaction computer generates an output of transaction ledger. He assigns the
stamp POSTED on the voucher to show voucher transaction entries are posted.
Checking officer receive this voucher and the compute output transaction ledge, he
manually inspects the entries of ledger and voucher. If both are tallied, he then signs the
ledger and put a mark of cancellation on the voucher. After the verifications from the
checking officer, cashier receives the voucher.

Cash Book Balance:At the end of the working day cashier is responsible to maintain the cash balance book.
The cash book contain the date, opening balance, detail of cash payment and received in
figures, closing balance, denomination of government notes (Currency). It s checked by

Page 27

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 =

The closing balance of today will be the opening balance of tomorrow. This department is
one of the most important department of the bank. All the books maintained in this
department are checked by office

MCB Financial Results:Title

Cash Dividend
Stock Dividend
Right Issue
Book Value Per Share
Deposits per share


Annu Annua
Annual al
Dec-12 Dec-11










Page 28




Total Assets
Share Capital
Reserves & Unapp.
Surplus on revaluation































Profit & Loss:Mark-up / return /

interest earned
Mark-up / return /
interest expensed
Net mark-up / interest
Provision against nonperforming loans &
Other Provision/
Fee, commission
Dividend income
Capital Gains
expenses etc

Profit before
Profit after taxation















Page 29

l Annual

Advances to
Deposits Ratio
Tax Rate
























Financial Analysis of MCB for

2007 results:MCB posted an after tax profit of Rs15.26b with earnings per share of Rs 24.30 in FY07
as compared to profit after tax of Rs12.14b with earnings per share of Rs 19.33 in FY06,
depicting a significant growth of 26.0% in FY07. Net interest income increased by 13%
to Rs23.9b from Rs21.2b in FY06. The gross interest income grew by 23%, while the
interest expense grew by 74%, depicting an increase in the cost of raising funds. The nonmark-up income increased by 20% to Rs 6 billion. The major contribution came from a
148% increase from the capital gained on sale of securities.
The asset base increased by 20% from 342 billion to 420 billion in 2007 as compared to
2006.Deposits showed a steady increase of 13% to bring the figure to Rs 292 billion as
compared to Rs 257.4 billion in FY06. Advances increased by 10% to Rs218b, while the
investments increased by 78% to Rs 113 billion.

Recent Results:MCB Bank Limited posted profit after tax of Rs4.1b with an earnings per share of Rs
6.55 in 1Q'08 vis-a-vis of Rs 3.7 billion with an earnings per share of Rs 5.93 in 1Q'07,
depicting a growth of 10.3% during the period despite dismal performance of banking
sector during 1Q'08.
Net interest income of the bank grew by just 2.5% during the period to Rs 6.1 billion as
compared to Rs 6.0 billion in the corresponding period of last year. High cost of deposits
was the main reason behind.

Page 30

SWOT Analysis:Swot Analysis Include.


The strengths of MCB are as:

1. MCB is the first Pakistani privatized bank and because

of its quality management, marketing, innovation in
products and services is performing well in financial
2. Has established a good reputation in the banking
3. Strict adherence with the banking procedures
requirements, SBPs prudential regulation requirements
and its SROs and international banking requirement as
well as to its own set policies.
4. Strong and its attractive products.
5. Better focus on customer services and customization.
6. Flexibility with the changing environment.
7. Induction of the highly qualified professionals to
change overall set up.

Weaknesses:The weaknesses of MCB are as:

Page 31

1. The majority of people are not well aware about the

products of MCB.
2. Therefore it should advertise extensively especially RTC
and Master Cards.
3. A behavior has been noted that bank tries to feel at
ease with good looking, rich and educated people and
the poor looking customers feel some bit strange in the
environment of the bank. The bank employees should
try to accommodate behaviorally all type of customers.
4. In MCB there is lack of specialized skill because of job
rotation policy of human resource department. The
bank should concentrate upon increasing its abilities on
individual service basis.
5. Mismanagement of time is another big mistake in MCB
branches, the bank official time of closing is 5:30pm but
due mismanaging of time allocation and work the staff
is normally on their seats till 7:00 or 8:00 clock.
6. Process of development is bit slow due to its
conservative approach.
7. Never prefer to be a leader and prefer to be a follower
of others.
8. Slow improvement and acceptance of technological
9. More emphasis on deposit accumulation and less on
their mobilization.

Opportunities:1. Greater potential and opportunities for Credit Division

if Liberal Policies being adopted.
2. Can grab more market share for its RTCs, remittances
and forex department through effective promotional
and liberal policies.
3. Inclusion of highly qualified professional can change the
whole scenario and position of the bank if they have
given the due liberty in performing their duties.
4. Adoption of information technology will improve the
customer services.
5. More mobilization of accumulated deposit is possible
through innovative financing to,
Page 32

1. Agro Based Sector

2. Leasing
3. Personalized Financing

Threats:The Threats of MCB are as:

1. Change in government policies has affected the banking
business. Still banks have to wait to get permission of
state bank. The freezing of foreign currency accounts is
a vital example of letting people not to trust on banks.
2. The Competition has become severe by the entrants of
so many banks, So to exist one will have to prove
himself in its services through excellent management
and will have to satisfy its shareholders. Otherwise he
will be out the market.
3. Employees unions have been allowed if not managed
properly can affect performance.
4. The decrease purchasing power of consumer in the
current economic situation of the country affecting the
business activity speed too much and the result is the
low investment from the investors in new projects can
create problem for the bank because it is working a lot
in trade.
5. Introduction of credit marketing by local and foreign
banks is badly affecting the mobilization of the MCBs
deposits due to the non presence of such department in
6. Introduction and adoption of information technology as
well as promotion of the computer culture by the local
as well as foreign banks will definitely affect the
services and business of the MCB.

Page 33



POLITICAL :Employment practices are expected to change.

Unions, Associations are being allowed to work effectively which can affect the
performance of the company both positively or negatively.
Political interference regarding policies is expected to increase as current government is
in race of power gain.
Due to lack of confidence on government investor is reluctant so mobilization of funds is
going to decrease.

ECONOMIC :Inflation is very high which will decrease the demand as purchasing power is decreasing.
Staff cost is increasing as basic wage rate has increased and inflation has compelled to
will compel to increase salaries.
Operating costs are increasing due to inflation.

Page 34

Interest rate is increasing so loan taking has decreased.

Value of rupee is decreasing which is pressurizing the economy.

SOCIAL AND CULTURAL :Lack of experts is in our country regarding management hence innovative activities are
slow and conventional methods are adopted.
Cultural strain to savings is the reason due to which investment remains low .
Declining work ethics is also our problem which is mainly due to poverty, lack of
Inadequate Accountability ,lack of good governance and lack of good infrastructure helps
creditor to cheat and heavy bad debts occur. Same situation is hoped to prevail.
Inadequate Empowerment is also a usual problem in our organization as every person
want to get more power hence there is less delegation of authority and decision making.

TECHNICAL :MCB has computerized its most of the branches but still some are manual there is need to
computerized otherwise customers will get bad image.
Now a days computerized system is used by banks whis is very effective. But MCB will
have to improve its computerized technology as some fake transactions occur by ATM.
Shortage of electricity is a big problem,
Employees of each organization need IT training and organization has this trend.

Page 35

CONCLUSION:During the internship I worked in many departments. I feel that there is lack of staff, due to
this reason an each worker has to do a lot of works and responsibilities.
I judge that there was lack of trained people and motivation. So the efficiency and
effectiveness are affected. It seems low advertisement Of MCB BANK. Therefore after
writing internship report on MCB i have reached at this point that MCB worth in marked is
good as compare to other bank.
MCB should continue with the same spirit to serve the Pakistani citizens in the country and
all over the world. The financial position of the bank is very strong, as compared to some of
the nationalized banks and even some of the private banks.
MCB has tried to provide the best services and safety to the public by introducing the
Rupees Travelers Cheques and by having the largest network of Automated Teller Machines.
After writing internship report of MCB and Financial ratio analysis groups the ratios into
categories which tell us about different facets of a companys finances and operations. An
overview of some of the categories of ratios is given below.

LIQUIDITY RATIOS measure a firms ability to meet its current

PROFITABILITY RATIOS measure the earning ability of a firm.
ACTIVITY RATIOS measure a firms ability to convert different accounts
within their Balance sheets into cash or sales.
MARKET RATIOS are commonly used by the investors to assess the
performance of a business as an investment and also the cost of
issuing stock.
LEVERAGE RATIOS which show the extent that debt is used in a
companys capital structure.
As we can see that bank current ratio is not increasing in 2010
and quick ratio is decreasing in 2010 as compared to other
Page 36

years. Working capital is negative. This is not a good sign.

Earnings have decrease and interest expenses have decrease.
Debt has decrease Net profit and operating income margin
have increase in 2008 Return on Operating Assets is
satisfactory. the net sales have increase profit.

Recommendations and
Suggestion:From the quantum of the profit and its financial data it can easily judged the after
privatization Muslim Commercial Bank is performing well. Its deposits are growing dayby-day and so its profitability. The controlling body is responsible for the productive
performance of the bank. Following are my observations and suggestion to improve the
efficiency for the development of the bank.

People can be motivated to save money by offering the deposit through various
investment schemes. The rate of profit should increase 1% or 2 % it would be profitable
step for bank.

MCB is making good profits but giving less pay to their employees as compared to their
competitors. So their salaries should be increased.

Change The Nature Of Work:

Most of the bank employees are sticking to one seat only with the result that they become
master of one particular job and loose their grip on other banking operation. In my
opinion all the employees should have regular job experience all out-look towards
banking. Their promotion policy should be adjusted accordingly.

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
Page 37

studies in their field. The employee should be provided the opportunities to attend and
participate in seminars and lectures on banking.

Incentive To Employees:
Bank should give some more incentive to its employees in order to remove the conflict
between lower and higher officers and should try to improve the working condition of the
bank. Such system should be designed that every employee who has some problems with
his officers can communicate to the higher management and some steps must be taken to
improve that.

Performance And Reward:

Smart, educated, skilled, well spoken and well versed staff personals should be rewarded
and appreciated, while on the other hand lazy, lethargic, heard, rough-dealers and ill
mannered must be warned and penalized but this all should be on merit and considering
the policy of honesty is the best policy and not due to some personal liking, disliking
prejudice and patrimonial. It is therefore suggested certain schemes and checks may be
introduced in banks to increase efficiency through reward and punishment system.

Over Employed:
During my internship period I felt that at some place the Muslim Commercial Bank
Limited is over employed which is causing in expenditure. I think that the best way out
for this problem is to pen new branches.

Promotion And Advertising:

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

More Focus on Salary Accounts:

A logic leads to promotional campaign through employers who are customers of the
banks and their employees are paid in cash. Such business accounts should be encouraged
to open the accounts of their employees with the banks. It might be worth offering free
banking for a specific period to new accounts or simply publicizing the services available
by means of posters at the employers premises.

Internship Facilities:
Page 38

The period of internship should be divided in to the number of department of the Muslim
Commercial Bank Ltd. The internee should be given timetable mentioning the number of
days he has to work at different places in the bank. On the first 4 days in each department
internee should be given a lecture the officer of the department concerned about working
of the department.

What Were My Duties and

What I Learned:In first weak I assisted Mr Mahboob in Scrutiny of cheques. It is considered, as the
simplest work in consumer banking operations, but actually it is not that simple. The
cheques that are presented for either payment or for deposit are the main points where
most of the frauds occur.
I learned whole process of account opening of individuals practically. I remained
involved very much in practical activities of account opening as Miss Uzma whose duty
was account opening would remain very busy as number of customers coming for
account opening and getting information was high. So I assisted her.
I havent issued any cheque book personally, but the procedure is very simple for
issuance. I observed the process.
I filled many applications form for remittances. I prepared remittance slips and learned to
apply tests on TT and MT.
I processed the Inward cheques for collection and clearance, and have also prepared
Every transaction which takes place recorded in the computer so all transactions in
different departments are forwarded to account department. The branch where I worked
Mr Azeem-ud-din Bukhari was performing these activities. I was not allowed to use
software but I observed all the fuctions performed by him.
Miss Maria was credit officer who explained me the procedure of advances. Mostly work
is done through computer. I was not able to perform activities by myself as access to
software is not allowed. I observed how the application is processed. I think it sufficient
to know the procedure.
In cash department I observed the process of deposits, filled deposit slips, and learned
how the cash registers are maintained. In this department I did little work practically as it
was not allowed.

Page 39

During my internship I dealt with many customers and employees, this was a great
experience to learn,

How to deal with customers

How to work under pressure i.e. in rush hours.
How to manage an office.
My communication skills were improved.
I observed some signs of mismanagement which I think can be removed if branch
manager take more responsibility.
I observed the practical application of many accounting concepts.


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anjum, A. I. (n.d.). Internship Report on Muslim Commercial Bank (MCB). Retrieved September 01, 2013, from

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