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INTERNSHIP REPORT ON MCB BANK LIMITED
2
INTERNSHIP REPORT ON MCB BANK LIMITED
Submitted to:
Branch Manager
Submitted By:
Acknowledgement
First of all I’m grateful to ALLAH ALMIGHTY, who bestowed me with health,
abilities and guidance to complete the project in a successful manner, and without
HIS help I was unable to perform this task .I am very thankful of MCB Bank for
providing me an opportunity to learn and experience in practical environment.
And I am thankful to Branch manager and all the staff of MCB Yazman for helping
me throuhout this internship.
INTERNSHIP REPORT ON MCB BANK LIMITED
Table of Content
Detail Page No
Executive summary………………………………………………………… 06
History of Banking …………………………………………………………. 08
History of MCB …………………………………………………………. 16
MCB Bank today …………………………………………………………. 18
Awards & Achievements ……………………………………………….. 23
Organizational Hierarchy ……………………………………………… 24
Organizational setup.……………..…………………………………….. 25
Organizational structure ………………………………………………. 26
SWOT Analysis …………………………………………………………. 27
Marketing Mix …………………………………………………………. 28
Product Mix ………………………………………………………… 29
Fields of Activity …………………………………………………………. 35
Information about my branch ………………………………………. 43
Work done by me ………………………………………………………… 46
Financial Analysis …………………………………………………………. 54
Recommendations ………………………………………………………. 59
INTERNSHIP REPORT ON MCB BANK LIMITED
EXECUTIVE SUMMARY
MCB Bank (Muslim Commercial Bank Limited) is one of the leading banks of Pakistan and has
made significant contributions in building and strengthening both corporate and retail banking
sector in Pakistan.
MCB Bank Limited has a very solid foundation over 50 years in Pakistan .it has a network of
over 1000 branches and above 850 braches is online branches .MCB has over 600 ATMs in 50
cities nationwide.
This report is an upshot of my six weeks internship in Muslim Commercial Bank of Pakistan.
MCB of Pakistan possesses an imperative and historical importance in the banking sector of
Pakistan. It always remains the center of hustles in business activities. It always endows with
great covenant of rally round in terms of funds and services at all epochs of its dynamism.
The main purpose of internship is to learn, by working in practical environment and to apply the
knowledge acquired, during the studies, in a real world scenario in order to tackle the problems.
During my internship I worked in remittances, account opening and the customer service office
department and I successfully complete all the tasks that were assign to me.
INTERNSHIP REPORT ON MCB BANK LIMITED
DEFINITIONS OF BANK
The term 'bank' is being used for a long time, yet it has no precise definition. The basic reason is
that the commercial 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 debts—his own and of other people."
A bank is a financial institution licensed to receive deposits and make loans. Banks may also
provide financial services, such as wealth management, currency exchange and safe deposit
boxes.
INTERNSHIP REPORT ON MCB BANK LIMITED
Pre-Nationalization Era
Nationalization Era
Post Nationalization Era
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 accessed from the fact that on July 1948 .there were 195 branches with deposits
of Rs.88 core (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:
INTERNSHIP REPORT ON MCB BANK LIMITED
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 were working in Pakistan and all over
deposit position was around Rs.2300 core (23,000 million).
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 to
control by Pakistan Banking Council. There are still controversies about this act of government
as whether it contributed in success of failure of banks.
INTERNSHIP REPORT ON MCB BANK LIMITED
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11
After these changes a large number of private and foreign banks started their operations
in Pakistan and the present status can be seen from the following figures:
SCHEDULED BANKS
Category No of Banks
Central Bank 01
Private / Privatized Commerce Banks 22
Specialized Banks 06
Public Sector Specialized Banks 05
Investment Banks 10
Microfinance Banks 09
Islamic Banks 06
Foreign Banks 06
Total Schedule Banks 56
12
CENTRAL BANK:-
o State bank of Pakistan
SPECIALIZED BANKS:-
o Zarai Taraqiti Bank of Pakistan (ADBP)
o Industrial Development Bank of Pakistan(IDBP)
o Punjab Provincial Cooperative Bank.
o SME bank.
o Arslaan bank limited.
o Karakorum cooperative bank limited.
14
INVESTMENT BANKS:-
o BMA capital management limited.
o Invest capital investment bank limited.
o AMZ securities.
o Orix leasing Pakistan limited.
o Trust investment bank limited.
o Js investment bank limited.
o Atlas bank limited.
o Al towfeek investment bank limited.
o Escorts investment bank limited.
o First investment bank limited.
15
ISLAMIC BANKS:-
o Meezan Pakistan limited.
o Al Baraka Islamic bank.
o Bank islami Pakistan limited.
o Dubai Islamic bank Pakistan limited.
o Dawood Islamic bank limited.
o Imrates global Islamic bank limited.
FOREIGN BANKS:-
o Barclays bank plc.
o Citibank n.a Pakistan operayion.
o Deutsche bank AG Pakistan operation.
o HSBC bank Middle East limited.
o Oman international bank S.AO.G Pakistan operation.
o The bank of Tokyo MITsubshi UF limited.
INTERNSHIP REPORT ON MCB BANK LIMITED
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HISTORY OF THE MCB BANK LIMITED
Development Phase.
Nationalization Phase.
Privatization Phase.
DEVLOPMENT PHASE:-
MCB Bank Limited was incorporated by the Adamjee Group on July 9, 1947, under the Indian
Companies Act, VII of 1913 as a limited company. The bank was established with a view to
provide banking facilities to the business community of the South Asia. After the
Partition of the Indo-Pak subcontinent, the bank moved to Dhaka (then the capital of former East
Pakistan) from where it commenced business in August 1948. After some time, the registered
office of the company was shifted to Karachi on August 23rd, 1956 through a special resolution,
now recently the Head office of MCB has been transferred to Islamabad in July, 1999 and now
Head office is termed as Principle Office.
This institute was nationalized with other on January 1st, 1974. At that time, it had 506 branches
and deposits amounting to Rs. 1,640 million. Although. MCB has a reputation of a conservative
bank but nationalization also left its effects on this institute as well and by end of year 1991 in which
it was privatized the total number of branches were 1287 and deposits amounting to as high as Rs.
35,029 million.
NATIONALIZATION PHASE:-
The 1960s decade is stated as the golden era in Pakistan’s economic and financial development.
The banking sector also registered noticeable growth during that period and
Lent a strong helping hand to the government to achieve rapid economic growth of the country.
But in early 1970s this scenario changed altogether. The separation of East Pakistan
(Now Bangladesh) and induction of the government led by Zulfiqar Ali Bhutto were the
most significant events of early 70s having far reaching effects on the banking system.
In the wake of rapidly changing conditions of the country, the government decided to
Nationalize all the commercial banks so that the nation as a whole can benefit from a better
use of resources. Consequently, the Muslim Commercial Bank was nationalized under the
Banks (Nationalization) Act, 1974 promulgated on January 1, 1974.
INTERNSHIP REPORT ON MCB BANK LIMITED
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PRIVITIZATION PHASE:-
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 April 8th, 1991, the management control was handed over to National Group (the
highest bidders). Initially only 26% of shares were sold to private sector at Rs. 56 per share.
AFTER PRIVATIZATION
Ten years after privatization, 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.
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.
INTERNSHIP REPORT ON MCB BANK LIMITED
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-: Vision Statement :-
To be the leading financial services provider, partnering with our customers for a more
prosperous and secure future.
-: Mission Statement :-
We are a team of committed professionals, providing innovative and efficient financial
solutions to create and nurture long-term relationships with our customers. In doing so, we
ensure that our shareholders can invest with confidence in us.
Customer Centricity
Respect
INTERNSHIP REPORT ON MCB BANK LIMITED
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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 the 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.
INTERNSHIP REPORT ON MCB BANK LIMITED
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FOREIGN TRADE
The bank conducted import business during the year 2015 greater than as compare to the
business in 2014. The export business slightly improves in 2015. Home remittances decline in
2015.
SOCIAL SECTOR
The bank activity participating in the Prime Minister Self-employment Scheme. The application
received from various applicants is being processed on merit and disposed off as quickly as
possible.
THE BUSINESS:-
MCB is in it’s over 68 years of operation. It has a network of 1257 branches all over the country
with business establishments in Sri Lanka and Bahrain.
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.
Twenty-six years after privatization, 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.
MCB now focuses on three core businesses namely Corporate, Commercial and Consumer
Banking. Corporate clientele includes public sector companies as well as large local and
multinational concerns.
INTERNSHIP REPORT ON MCB BANK LIMITED
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-: Board of Directors :-
Mian Mohammad Mansha……………………………….. Chairman
S.M. Muneer ……………………………….... Vice Chairman
Imran Maqbool ………………………………….. President & Chief Executive
Tariq Rafi ………………………………….. Director
Aftaab Ahman Khan ………………………………….. Director
Ahmad Alman Aslam ………………………………….. Director
Shahzad Saleem ………………………………….. Director
Mian Umer Mansha ………………………………….. Director
Muhammad Ali Zeb ………………………………….. Director
Mr. Mohd Suhail Amar Suresh ……………………………. Director
Mrs. Iqraa Hassan Mansha ………………………………… Director
Mr. Irfan Hashmi ………………………………….. Director
-: Audit Committee :-
22
-: Management Committee :-
Imran Maqbool ……………………………… President /CEO
Laqa Sarwar ……………………………… Group Head Assets Rehabilitation
Mohammed Nauman Chughtai …………………. Group Head Risk Management
Muhammad Ramzan ……………………………. Group Head Treasury &FX
Muhtashim Ashai ……………………………. (Group Head Corporate Finance
& International Banking)
Salman Zafar Siddiqi ……………………………. Chief Financial Officer
Farid Ahmad …………………………….. Group Head Compliance & Controls
Kamran Zafar Muggo ……………………………. Group Head Operations
Nadeem Afzal …………………………….. Head Retail Banking – South
Usman Hassan ……………………………… Group Head HRM
Zargham Khan Durrani …………………………… Head Retail Banking – North
Syed Mudassar Hussain Naqvi …………………… Group Head Legal Affairs
Hassan Nawaz Tarar ……………………………… Group Head Security & Marketing
Mr. Faisal Ejaz Khan ……………………………… Chief Information Officer
23
-: Awards & Achievements :-
2015 CFA 12th Excellence Awards: Most Stable Bank of the year 2014
2015 Finance Asia Country Awards Best Bank in Pakistan 2015
2015 ICAP and ICMAP: 1st - BCR Award 2014 - Banking Sector
2015 SAFA Awards Winner of Best Presented Annual Accounts 2014 - Banking Sector
2014 The Asset Triple A: Best Bank - Pakistan
2014 The Asset Triple A: Best Domestic Bank - Pakistan
2014 CFA 11th Excellence Awards: Best Bank of the year 2013 – Large Bank
2014 CFA 11th Excellence Awards: Most Stable Bank of the year 2013
2014 Asiamoney Awards Best of the Best Domestic Bank
2014 The Asian Banker (USA) Strongest Bank in Pakistan 2014
2014 ICAP and ICMAP: 1st - BCR Award 2013 - Banking Sector
2014 SAFA Awards: 1st Runner up Best Presented Annual Accounts 2013 - Banking Sector
2013 The Asset Triple A: Best Domestic Bank - Pakistan
2013 The Asset Triple A: Best Islamic Deal
2013 ICAP and ICMAP: 1st - BCR Award 2012 - Banking Sector
2013 LK Domain Registry Sri Lanka: Best Website Award
2013 Lanka Clear Pvt. Limited: T+1 Cheque Clearing Award
2013 SAFA Awards: 2nd Runner up Best Presented Annual Accounts 2012 - Banking Sector
2012 The Asset Triple A: Best Domestic Bank - Pakistan
2012 Euromoney: Best Bank in Pakistan
2012 NFEH: CSR Business Excellence Award “Best Media Coverage”
2012 ICAP and ICMAP: 2nd Best Corporate Report Award 2011 - Banking Sector
2012 World Finance: Best Commercial Bank - Pakistan
2012 Pakistan Centre for Philanthropy: PCP Corporate Philanthropy Award
INTERNSHIP REPORT ON MCB BANK LIMITED
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-: ORGANIZATIONAL HIERARCHY OF MCB :-
PRESIDENT
SENIOR EXECUTIVE
VICE PRESIDENT
EXECUTIVE VICE
PRESIDENT
SENIOR VICE
PRESIDENT
VICE PRESIDENT
ASSISTANT VICE
PRESIDENT
OFFICERS GRADE
I II III
ASSISTANTS
CASHIER
PEONS
INTERNSHIP REPORT ON MCB BANK LIMITED
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PROVINCIAL HEAD
QUARTERS
PUNJAB LAHORE
SINDH KARACHI
BALOCHISTAN PESHAWAR
CIRCLE OFFICES
BRANCH OFFICES
INTERNSHIP REPORT ON MCB BANK LIMITED
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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 & Imran
Maqbool is CEO of the company with a team of directors and 1 vice chairman to help in the
business control and strategy making for the company.
Operational Management of the bank is being handled by a team of 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 & FX 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.
Commercial Banking.
Consumer Banking.
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.
INTERNSHIP REPORT ON MCB BANK LIMITED
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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.
-: SWOT Analysis :-
Strength:-
MCB has the 2nd largest commercial bank. It has over 1100 branches all over the country
(Largest branch network). They have safe and secure investment venture, innovative and new
technology adapter employee satisfaction, well equipped and fully secure environment,
modernized banking (online internet).
Weaknesses:-
Opportunities:-
Opportunities are information technology (MIS),establishing more Foreign branches local setup
should be expanded .
Threats:-
MCB employees and they are losing their confidence towards bank performance ,fierce
competition ,changing environment of banking ,economical political condition are a great threat,
entrance of international banks.
INTERNSHIP REPORT ON MCB BANK LIMITED
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-: MARKETING MIX OF MCB BANK LIMITED :-
Marketing is the task of creating, promoting and delivering goods and services to consumers and
businesses. Organizations identify and profile distinct group of buyers who might prefer or
require varying products and marketing mixes. The customer seeks for value and satisfaction.
The organizations can increase the value of the customer offering in several ways e.g. raising
benefits, reducing costs etc. marketing mix is a set of marketing tools that the firm uses to pursue
its marketing objectives in the target market. These marketing tools are known as 4 p’s of
marketing. These four marketing tools are viewed as 4c’s by the consumers.
4 P’s 4 C’s
Place Convenience
Promotion Communication
To identify the customer needs and fulfilling them is the basic objective of an organization.
Marketing is not just satisfying your customers, you have to delight them and this can be done by
acting upon this phrase.
MCB Bank provides a winning combination of products and services to its prime customers. It is
one of the country’s leading commercial banks, which ensures complete security, and reliability
in all-financial transactions.
INTERNSHIP REPORT ON MCB BANK LIMITED
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-: PRODUCT MIX OF MCB BANK :-
Deposit Accounts:-
MCB bank provide a wide range of local and foreign accounts to best suit your needs.
Whether you want to save for that rainy day or something special, our saving deposit portfolio is
designed to provide you with ease and comfort for all your needs.
For complete day to day banking needs MCB bank current deposit accounts provides ease and
comfort for all your needs.
Home Remittance:-
MCB home remittance offers an unmatched service for overseas Pakistani’s.
Consumer Loans:-
Car4u.
Student personal loan.
Personal loan.
Home loans.
Cash4cash.
Cards:-
CREDIT CARDS:-
30
DEBIT & PREPAID CARD:-
MCB Lite:-
MCB Lite is an instant deposit facility which provides the power of Visa enabled card
coupled with the convenience of mobile payments.
BANCASSURANCE:-
FlexiLife
LifePartner
Educare
Dreemwedding
CapitalSure
RetireEasy
incomeMax
FutureAssure
ProtectionPlan
Kafalah
INTERNSHIP REPORT ON MCB BANK LIMITED
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INVESTMENT SERVICES:-
Cash funds
Income funds
Islamic funds
Assets allocation funds
Equity funds
Voluntary pension schemes
Investment plans
Single premium plans
FEATURES OF RTC:-
Easy available
As good as cash
Easily enchased
Easily refunded
Exclusive security features
Denominations
Validity of 10 years
Customers service facility
More than 900 branches of MCB deals with RTC
INTERNSHIP REPORT ON MCB BANK LIMITED
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Internet Banking:-
Funds transfer
A/c Statement
Cheque book apply
Utility bills
Donations
33
Punjab 719
Sindh 274
Baluchistan 43
Azad Kashmir 26
Domestic 1040
Overseas 8
FATA 6
GILGIT BALTISTAN 4
EPZ 1
TOTAL 1226
INTERNSHIP REPORT ON MCB BANK LIMITED
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MCB Bank is actively participating in promotion of its products and services through
advertisement and other promotional schemes.
Initially, the bank focused on the upper class customer’s only and offered products for a limited
class of people. But now the strategy has been changed and the bank is now targeting the middle
market also. The products offered are of diverse nature to cater the needs of maximum number of
people.
MCB Bank values its customers. Customers’ complaints are encouraged because it gives an
opportunity to know the needs of the customer and build more confidence in them.
Direct marketing
Public relations
MCB bank sometimes gets suggestions and recommendations from its good customers.
Branch layout is being designed in such a way that more and more customers are attracted. Some
of the branches of MCB Bank have a very good entrance and outlook but many still need to be
improved.
INTERNSHIP REPORT ON MCB BANK LIMITED
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-: FIELDS OF ACTIVITIES :-
The purpose of banks is to provide some services to the general public. And for this purpose
different banks provide different services to the people in different forms. The MCB Bank is a
commercial bank, in modern time commercial banks play a very important role and their
functions are manifold. The main functions and services which MCB Bank Limited provides to
different peoples are as follows:-
For proper functioning of branches and the overall bank has been divided in different
departments. These departments handle different jobs so that division of work is there for
improvement of functions and also it is easy to control the situation. The general division in a
branch is as follows:
1. Cash department
2. Deposit department
3. Advances & credit department
4. Remittance department
5. Foreign exchange department
6. Technology department (new addition in order to cop with the growing needs of day to day
technology requirements)
INTERNSHIP REPORT ON MCB BANK LIMITED
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-: CASH DEPARTMENT:-
When cash is received in counter, then cashier count the cash and perform transactions.
When the cheque or any negotiable instrument is presented at counter for payment, it is entered
in the computer system and a slip is present to the customer.
The consolidated figure of receipt and payment of cash is entered in the cash balance book and
drawn closing balance of cash.
This is very important department because cash is the most liquid asset and mostly frauds are
made in this department, therefore, extra care is taken in this department and nobody is allowed
to enter or leave the area freely. Mostly, cash area is grilled and its door is under supervision of
the head of that department. All the books maintained in this department are checked by an
officer.
-: DEPOSIT DEPARTMENT:-
Bank deals in money and they are merely mobilizing funds within the economy. They borrow
from one person and lend to another, the difference between the rate of borrowing lending forms
their spread or gross profit. Therefore, we can rightly state that deposits are the blood of the bank
which causes the body of an institution to get to work. These deposits are liability of the bank so
from point of view of bank we can refer to them as liabilities.
The total deposits of MCB are growing since its inauguration but after privatization there is a
sharp incline in over all deposits of the bank. The increase in deposits is also a cause of increase
on total number of accounts; bank has progressed in both aspects.
INTERNSHIP REPORT ON MCB BANK LIMITED
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TYPES OF DEPOSITS:-
Deposits can be segregated on two bases, one is the duration in which there funds are expected to
be with the bank and second is the cost of getting these funds. So divide deposits in two classes
according to duration of deposits i.e.
This was a brief review of different types of deposit schemes. The Deposit Department handles
the account opening, profit payment and accounting of all types of deposit schemes.
Account Opening:-
Account opening is an agreement in which customer offers his funds and bank accepts these
funds, therefore the nature of relation between a banker and customer is of a contractual one and
all the conditions applicable to this contract act are also applicable.
Profit payment & calculation is done in accordance with the rules of each type of deposit
scheme-by the deposit department. The products for each deposit scheme are calculated
separately and added till the end of 6-month period. Then the sum total of these products is
multiplied with the respective profit rates which are issued by the Head Office at the end of each
half yearly closing. The profit provisions for each type of deposits are also calculated on monthly
basis by the same department in order to calculate the net profit or loss position of the branch.
INTERNSHIP REPORT ON MCB BANK LIMITED
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Accounting Entries:-
Accounting entries are also made in the respective books of account by this department.
However, in small and medium size branches, the accountant performs the book keeping duties
for all kinds of ledgers.
-: CLEARING DEPARTMENT :-
Every banker acts both as a paying as well as a collecting banker, it is however an important
function of crossed cheques. A large part of this work is carried out through the bankers clearing
house.
A clearing house is a place where representative of all banks of the city get together and settle
the receipts and payment of cheques drawn on each other. As the collecting banker runs certain
risks in receipt of their ownership the law has provided certain protections to the banks.
The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a cheque or draft may
cross the instrument generally or specially. It further lies down that a crossed cheque can only be
paid to a banker, who collects it for a customer in good faith and without negligence.
Types of Cheques:-
Transfer cheques: are those cheques, which are collected and paid by the same branch
of bank.
Transfer delivery cheques: are those cheques, which are collected and paid by two
different branches of the same bank situated in the same city.
Clearing cheques: are those cheques, which are drawn on the branches of some other
bank of the same city or of the same area, which is covered by a particular clearing
house.
Collection cheques: are those cheques, which are drawn on the branches of either the
same bank or of another bank, but those branches, are not in the same city or they are not
the members of clearing house.
INTERNSHIP REPORT ON MCB BANK LIMITED
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To accept Transfer, transfer delivery, clearing and collection cheques from the
customers of the branch and to arrange for their collection.
To arrange the payment of cheques drawn on the branch and given for collection
to any other branch on MCB or any other members or sub member of the local
clearing house.
To collect amount of cheques drawn on members, sub-member of local clearing
house, sent for collection by MCB Branches, not represented at the local clearing
house
Receiving and scrutinizing the cheques and other deposit instruments, and the
pay-in-slip at the counter.
Fixing the stamps.
Scrutiny and receipt by the authorized officer.
Returning the counter file to the depositor.
Certificate and confirmation by the officer in charge of the department.
Separating the cheque into transfer, transfer delivery, and clearing cheques.
INTERNSHIP REPORT ON MCB BANK LIMITED
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CLEARING PROCESS (FLOW CHART)
41
-: ADVANCES DEPARTMENT :-
Advances are the most important source of earning for the banks. MCB is also giving full
attention towards this aspect and it is also obvious from the growing portfolio of advances and
from very low delinquency rate. The credit portfolio of this institution is in a very much better
shape than other financial institutions of Pakistan and the credit goes to the management and the
staff who are concerned about the quantity and quality as well.
Loans
Cash Credits
Overdraft
LOANS:-
Loans are monetary assistance by a financial institution to a business, individual etc. The loans
are granted by the bank in lump sum, so these types called fixed or demand loans. Interest is
charged on the whole amount of a fixed loan.
The borrower withdraws whole the amount of loan. This type of loan is normally granted against
security of gold documents.
In case of demand loans against gold or documents, a demand promissory note for the amount of
loan is taken from the borrower loans are granted under;
Under this type of loan, which is granted to the borrower the Head Cashier estimates the value of
Gold or Gold ornaments through an agent (Gold smith) and keeps a margin of 40 to 50 percent.
After the opening the gold loan account a token is given to the borrower, which is a bank receipt.
INTERNSHIP REPORT ON MCB BANK LIMITED
On repayment of loan, the gold or ornaments held as security for it, together with the demand
42
promissory note duly discharged is returned to the borrower and his receipt for the gold
ornament taken in the demand loan ledger. This receipts states that he ornaments returned are
complete and in order. Part delivery of ornaments is given against part payment of a loan but
care is taken that the ornaments still in banks possession fully covers the balance of the loan
outstanding. The interest gold loan is to be applied with quarterly.
In case of advancing such types of loans, the following precautions are kept in the mind:
43
I did my internship in MCB Bank Limited Yazman (0728) Branch. Some important information
about my branch which I observed is as follows:-
44
Deposits:-
The total deposits of this branch in 2015 are about to 226.00 million. In deposit there is
decreasing trend.
Profit:-
Total remittance of this branch is 4.200 million in 2015.there is also decreasing trend in profit
from 2014 to 2015 because most people around here are in profession of agriculture. Because of
bad season in crops they didn’t make much profit to deposit.
No. of vouchers:-
The vouchers which are transacted in this branch from 2015 to June 2016 are 126336.
Number of accounts:-
SYSTEM:-
In my branch SYMBOLS MIS system is used to perform daily transactions.
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ACA
CDR
CUR
365 Gold
KBA
GLD
SBA
BBA
KSA
MSX
MEA
PLS
BUS
MSM
ESA
46
-: WORK DONE BY ME :-
During my internship in the MCB Limited, I really enjoyed to work with the staff of Branch,
Yazman (0728) from 18thAugest to 29th September, 2016 and have a wish to be employee of
MCB. It was almost impossible to work in all the departments within that limited time. But on
my request, the staff of the branch provided me the opportunity to work in the different
departments for the sake of practical knowledge. I am really very thankful to branch manager Sir
Muhammad Sohail Malik who provides me a learning environment in the branch.
During my internship training in the MCB as I early mentioned that I have worked in different
departments & seats and learnt the followings.
47
In order to further strengthen and streamline this process, the Federal Ombudsman of Pakistan,
vide his ruling on complaint no. II/31/5186, has directed the banks to retain with the account
opening form a Photostat copy each of the National Identity Cards of the person desiring to open
an account as well as that of the introducer. As per these directions, the concerned Branch
Managers are required to obtain the original National Identity Cards along with their Photostat
copies and then return the original after attesting the authenticity of the retained copy.
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 all his cheques to express his
authority for the payment of cheques drawn on his banker. This specimen is taken generally on a
card specially designed for this purpose, and rule for the customers, full name, and account
number are entered on it.
If the bank has reasons to doubt the genuineness of a signature, he should either get it confirmed
for his satisfaction or return the cheque with the remark ‘Signature differs’. If the signature of the
customer is forged the banker cannot escape his liability because he has actually acted on his
customer’s mandate.
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Another account holder of the bank should properly introduce the new customer.
The account holder should sign the account opening form in the presence of bank
officer and the signature is duly verified.
Type Rs.
Saving 100
Current 1000
The bank reserves the right to change the above mentioned minimum balance requirement at any
time without any notice.
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Title of Account
Occupation
Address
Telephone No.
Currency of account
Nature of Business
50
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.
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.
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Full Names
Address
Specimen of signatures of the partners
Certified true copy of partnership deed
Registration No. if the Partnership is registered
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When a customer opens an account with the bank, he is provided with cheque book for
withdrawals from account. However, the first cheque book is given to the customer only
when all the required documents are checked. A cheque book contains ten, twenty five, fifty
or hundred leaves. The cheque book also carries a requisition slip for the issuance of the new
cheque book. This slip is duly filled and signed by the customer. The signature of the
customer is verified by the bank and new cheque book is issued to the customer and serial
numbers of the cheque are duly entered in the book of the bank. Along with the signature,
person should also write his full name & address.
Usually only one cheque book is issued at a time, however big concerns who need a number
of cheque books at a time, may ask the bank to stock as number of cheque books in their
name and to point their name on these cheque books.
Bank debits the client’s account for excise duty of Rs.2.50/- per cheque and keeps the cheque
book ready for the customer, as on his advice.
The officer keeps and maintains the cheque book register Cheque book inventory and cheque
books issued are recorded in this register. The account number for which the cheque book is
issued and the number of leaves are also recorded in this register when the cheque book
issued an entry is passed in the cheque book issue register.
In case of loss of cheque book or requisition slip on cheque book the customer has to fill the
Form No. 216-B to obtain a new cheque book.
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CASH MANAGEMENT:-
The excess cash (More than its insured limit by the insurance company) of the branches of the
region is collected by the main branch. The main branch is also bound to send its excess cash
(more than its insured limit) to the State Bank of Pakistan. No branch can have cash its safe more
than its insurance at any time at the time of closing cash, if it is so the manager will be
responsible (not the insurance company) whether or not he informed to the regional office
(exception to the limit which is insured for the day).
New Notes and Prize Bonds are also part and parcel 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. The cash officer maintain its daily cash book with specification
of notes (Bonds are also recorded in the books in relation with cash) and other vouchers, after
being satisfied the manager authenticates the books and vouchers regarding cash with stamp and
signature. at the end I would like to conclude that the cash management is being done in the
MCB very effectively.
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55
BALANCE SHEET
2015 2014
(Rupees in thousands)
ASSETS
Cash 61,208,938 46,753,804
Balance with other banks 3 ,681,893 3 ,015,624
Lending to financial institutions 5 ,132,480 1 ,418,181
Investments_ net 568,802,508 511,137,192
Advances – net 314,124,939 303,559,480
Operating fixed assets 32,432,650 31,192,588
Other assets net 31,246,245 37,554,615
Deferred tax assets net ----------- ----------
1,016,629,653 934,631,484
LIABILITIES
Deposits and other accounts 708,091,171 688,329,520
Borrowings from financial inst. 118,459,448 59,542,861
Bills payable 11,975,237 16,627,700
Other liabilities 28,926,802 29,630,241
Deferred tax liabilities 11,376,589 10,397,100
Sub ordinated loans ---------- ----------
Liabilities against assets ---------- ----------
878,829,247 804,527,422
NET ASSETS 137,800,406 130,104,062
REPRESENTED BY
Share capital 11,130,307 11,130,307
Reserve 51,309,081 48,830,005
Unappropriated profit 50,464,155 46,947,863
112,903,543 106,908,175
Surplus on revaluation of assets 24,896,863 23,195,887
137,800,406 130,104,062
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Basic and diluted earning per share after tax 22.96 21.85
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CASH FLOW STATEMENT
2015 2014
(Rupee in 000)
CASH FLOW FROM OPERATING ACTIVITIES
Profit/(Loss) before taxation 42,333,262 36,729,447
Less: Dividend income (1,266,530) (1,060,729)
41,066,732 35,668,718
Adjustments for non-cash charges
Depreciation 2,037,048 1,724,216
Amortization – intangible assets 381,334 359,734
Provision / (reversal) against loans and advances – (288,195) (1,093,906)
net
Provision for diminution in the value of investment 831,369 (355,809)
Other provision / (reversal) – net 155,240 76,935
Bad debts written off directly 67 20
Provision for Workers' Welfare Fund 846,665 734,589
Charge / (reversal) for defined benefit plan – net (447,691) (413,543)
Unrealized (gain) / loss on revaluation of 4,392 2,273
investments classified as held for trading
Gain on sale of shares in associate (224,748) -
Gain on disposal of fixed assets – net (136,283) (31,120)
3,159,198 1,003,389
44,225,930 36,672,107
(Increase)/Decrease in operating assets
Lending’s to financial institutions (3,714,299) (193,543)
Net investments in 'held for trading' securities (317,152) (52,330)
Advances ( 10,277,331) ( 54,222,629)
Others assets 4,148,739 ( 12,150,909)
( 10,160,043) ( 66,619,411)
(Increase)/Decrease in operating assets
Bills Payable (4,652,463) 6,488,974
Borrowings from financial institutions 58,762,142 21,284,080
Deposits 19,761,651 55,999,234
Other liabilities (2,425,532) 9,157,104
71,445,798 92,929,392
105,511,685 62,982,088
Defined benefits paid (357,224) (603,308)
Income tax paid (15,952,216) (9,035,362)
Net cash flow operating activities 89,202,245 53,343,418
CASH FLOW FROM INVESTING ACTIVITIES
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-: RECOMMENDATIONS :-
From the Quantum of the profit and its financial data it can be easily judged that after
privatization, MCB is performing well. Its deposits are growing day by day and so its
profitability. The controlling body is responsible for the productive performance of the Bank.
Following are my observation and suggestion to improve the efficiency for the development of
the bank.
There is a criticism on the banking management that the salaries of the employees are not
compatible with their workload.
Staff turnover particularly of trained staff result in financial and other losses. The amount
spent by the bank on employment, induction and training of outgoing officers constitutes
to beat till another officer should ready prove this work. The exodus of bank officer in the
past has worsened the situation.
Most of the bank employees, are sticking to one seat only with the result that they
become master of one particular job and loose their grip on other banking operation. In
my opinion all the employees should have regular job experience all out-look towards
banking. The promotion policy should be adjusted.
Refresher Courses for the staff are most important in any international organization. Alt
the employees should have these courses according to their requirement. Foreign experts
can also be called for this purpose.
Educate the employees with the advance studies in their field. The employee should be
provided the opportunities to attend and participate in seminars and lectures on banking.
Bank should give some more incentive to its employees in order to remove the conflict
between lower and higher officers and should try to improve the working condition of the
bank.
As such system should be designed that every employee who has some problems with his
officers can communicate it to the higher management and some steps must be taken to
improve
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Recruitments should be strictly on merit basis and induction should be after proper and
extensive training.
Old and lazy staff should be replaced by young, qualified and energetic staff.
Working environment, equipment, furniture and staff dressing should be according to the
modern banking style.
Bank should adopt the global organizational banking structure to meet the international
standards of banking sector.
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THE END