Internship Report

Muslim Commercial Bank

Branch Code: 1523

Presented by Kinza Babar

BSC
Accounting & Finance

Lahore School of Economics

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Contents
Acknowledgements............................................................................................................3
Executive Summary...........................................................................................................4
Overview of the Organization...........................................................................................5
Muslim Commercial Bank:...............................................................................................5
Vision of MCB....................................................................................................................5
Mission of MCB.................................................................................................................5
Brief History of the Organization....................................................................................6
Introduction of Banking....................................................................................................6
Awards & Accolades..........................................................................................................7
Head Office Address..........................................................................................................8
Product Lines.....................................................................................................................9
Competitors......................................................................................................................14
Organizational Structure................................................................................................15
Hierarchy of MCB Bank.................................................................................................16
Hierarchy of Management..............................................................................................17
Comments of the Organization Structure.....................................................................19
Internship activity Plan...................................................................................................20
Internship Duration.........................................................................................................20
Training Program............................................................................................................21
Opening a new Account Procedure................................................................................22
Cash Department.............................................................................................................24
Remittance Department..................................................................................................25
Analysis of Management Function of the Organization..............................................29
Organizing........................................................................................................................31
Leading.............................................................................................................................33
Critical Analysis...............................................................................................................34
SWOT Analysis................................................................................................................36
Strength.............................................................................................................................37
Weakness..........................................................................................................................37
Opportunities...................................................................................................................38
Threats..............................................................................................................................38
Conclusion........................................................................................................................39
Recommendations for MCB...........................................................................................40

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Acknowledgements

Initially, I would like to begin in the name of Allah, most Gracious, and most Merciful
and thank him for giving me the potency to do an Internship at MCB.
I Kinza Babar, would also like to thank Sir Omar Farooq (BM) and Sir Murtaza (OM) for
providing me the opportunity to have an excellent learning experience during my
internship.

Then I would, of course like to thank Sir Liaqat, Miss Noreen and Miss Huma for their
constant help and endless support, without them it would have been difficult to
understand MCB Policies.
Thank you.

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Executive Summary

I did my internship in Muslim Commercial Bank T-Block Branch to gain knowledge

regarding Accounting & Finance as per my majors.
Report contains introduction of Banking, history of MCB, its departments and tasks
which were assigned and done by me.
Many people defined bank in their own words. Crowther said bank consists of dealing of
debts of his own and of other people. At the time of independence there were not many
banks owned by Muslims. At the time of separation only three banks were working in
Pakistan. Soon after separation Pakistan created its own central bank known as State
Bank of Pakistan. In 1947 all the banks were nationalized which were again privatized in
1990.
MCB is the oldest bank of Pakistan, it was formed in 16 July 1947. G.M Adamjee was
first chairman of MCB. MCB was first bank to be centralized. MCB offers different
products and services to its customers. MCB have different departments like cash,
deposits, clearing, remittances etc.
During my internship I worked in four departments. (Customer service department, cash
department, remittance & clearing department). I also studied the Management Style of
MCB and analyzed how the Management of MCB is performing Management Functions,
what is there motivating method, what is the hierarchy of the organization and what is the
span of control etc and at the end I gave my interpretations and suggestions for
improvement.

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Overview of the Organization

Muslim Commercial Bank:

At the time of separation there were not many Muslim banks. So, the need for more
Muslim banks was felt and Muslims having strong financial capacity were thinking to
invest in this sector as well. Just before separation Quid-E-Azam Muhammad Ali Jinnah
expressed his desire that a Muslim bank also be established in Calcutta, this came into
reality when Adamjee with the assistance of Isphanis established Muslim Commercial
Bank a few months before the creation of Pakistan in Calcutta. This is how Muslim
Commercial Bank Ltd known as MCB came into being. This was the third Muslim bank
in the subcontinent.

Vision of MCB
The vision of MCB is to provide the leading finical services like partnering to its
customers in Prosperous way and secure their future.

Mission of MCB
The Mission of MCB is that they create team of professionals that provide the innovative
and efficient financial solution to create long-term relationship with its customers, and
ensure that their Shareholders can invest blindly and with confidence in them.

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Brief History of the Organization

Introduction of Banking
Definition of a Bank:
“Banker mean a person transacting the business of accepting, for the purpose of lending
or investment, of deposit from the public, and withdrawal by Cheques, draft, order of
otherwise and include any post office saving banks.”
The word bank has been derived from the words ‘Banco’ or ‘Banque’ all of which means
a bench. In early times all bankers transacted their services on benches in the market
place. Bank plays a very vital role in the economy because it encourages the habit of
saving among the people and mobilizes these savings for the investment purposes.
MCB Bank Limited (Actually called the Muslim Commercial Bank Limited) has a solid
foundation of over 67 years in Pakistan, the Bank provides 24 hour banking services
conveniently with approximately in total 1700 branches including Islamic branches are
currently work in the market.
The MCB is providing on time and confidential services at the current era with wide
range of networks to its targeted customers for transfer of money from one place of
country to another within the few minutes for the time being need in time. MCB now
focus on three main businesses namely Corporate, Commercial and Consumer Banking.
Corporate business includes public sector companies as well as large local and multi-
national concerns.

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Awards & Accolades

Euro Money Awards

Best bank in Pakistan 2001
Best bank in Pakistan 2003
Best bank in Pakistan 2004
Best bank in Pakistan 2005
Best bank in Pakistan 2006
Best bank in Pakistan 2008
Best bank in Asia 2008
Best bank in Pakistan 2011
Best bank in Pakistan 2012

Asia Money Awards

Best domestic bank in Pakistan 2004
Best domestic bank in Pakistan 2005
Best domestic bank in Pakistan 2006
Best domestic bank in Pakistan 2009

The assets triple A

Best domestic bank Pakistan 2012
Best domestic bank Pakistan 2013
Best Islamic deal 2013

The Asian Banker

Strongest Bank in Pakistan 2010
Leadership Achievement Award 2010

ICAP and ICMAP

1st - BCR Award 2009 - Banking Sector 2010
1st - BCR Award 2010 - Banking Sector 2011
2nd Best Corporate Report Award 2011 - Banking Sector 2012

LK Domain Registry Sri Lanka

Best Website Award 2013

Head Office Address

Registered / Principal Office:
MCB Building, 15 - Main Gulberg, Jail Road, Lahore, Pakistan
UAN: +92 42 111000111

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PABX: +92 42 36041998-9
Website: www.mcb.com.pk
Email: info@mcb.com.pk

Registrars & Share Registration Offices:

Head Office
M/s. THK Associates (Pvt.) Ltd
State Life Building No. 3, 2nd Floor,
Dr. Ziauddin Ahmed Road, Karachi, Pakistan
UAN: +92 21 111000322
FAX: +92 21 35655595
Email: secretariat@thk.com.pk

Branch Office
M/s. THK Associates (Pvt.) Ltd
2nd Floor, DYL Motorcycles Ltd., Office Building
Plot No. 346, Block No. G-III
Khokhar Chowk, Main Boulevard
Johar Town, Lahore, Pakistan
TEL: +92 42 35290740-43
FAX: +92 42 35290667
Email: secretariat@thk.com.pk

Product Lines

The Muslim commercial bank is providing different types of banking facilities and
services to its customers like many accounts and deposit schemes that customers like.

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MCB also providing personal, short term and long term loans facility to its customers
against pledge, lien and mortgage.

List of products and services being provided by MCB Ltd:

 Current Account
 PLS Account
 Kushali Bachat Account
 PLS Term Deposit Receipts
 MCB visa credit card
 MCB online Banking
 MCB Islamic Banking
 MCB cash Management
 MCB Mobile Banking services
 ATMs card facility 24 hours all over the world
 MCB home Remittance
 MCB Advisory services
 MCB channel Financing
 Commercial Banking
 Corporate Banking
 Consumer Banking
Online
The Largest network of over 315 on-line branches in the country and growing. Providing
customers with 24x7 real time on-line transaction facilities.

MCB Lockers
The best protection for your valuables. Lockers of different capacities are available
nationwide.
Remit Express
International remittances with a two-way messaging facility delivered at your doorstep
within 24 to 72 hours.

Isamic Banking
MCB Islamic banking provides Riba free and Shariah Compliant solutions to various
Customer segments in a growing number of cities with the help of Sharia specialists,
Lawyers and professional commercial bankers.

MCB Debit Cards

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A Local Point of Sale acquiring network facilitating acceptance of all major card brands.

MCB Virtual Banking

MCB provides the convenience of banking on internet. You can access your account
anytime, anywhere & enjoy 24-hour access to all your accounts at MCB.

MCB Call Center

Call now for answer to your queries about banking, ATM, mobile banking, RTC, Tele-
banking services and MCB product information.

MCB ATM
The nation's largest network of over 210 ATMs and growing. Get 24 hour convenience of
cash withdrawal, mini statement and bill payment and funds transfer services.

MCB Mobile Banking

Banking at your fingertips. Dial in anytime to get information regarding balance and mini
statements.

M -Net
MCB Network for Electronic Transactions is an electronic hub for ATM sharing plus
other touch points. The nation's largest operating switch with the highest transaction
volume.

MCB Smart Card

A secure instrument of payment, offering CASH FREE convenience. It is the most
powerful Debit and ATM Card providing 24 hour direct access to your bank account.

Corporate Financing

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Providing access to diversified financing options including working capital loans, term
loans, trade finance services and investment banking.

Instant Financing
Get a loan in an instant at any MCB branch. Offering same day financing facility against
Liquid collateral at competitive pricing.

MCB Pyara Ghar

MCB Pyara Ghar is an ideal home financing facility with options of home purchase,
construction and renovation. Financing available up to 20 years for amount up to Rs. 20
Million.

RTC
The most widely accepted way to pay cash for travel related purposes. A safe and secure
way to make payments nationwide.

MCB car4u
Car financing and leasing at competitive rates with flexible options. Car4u finances both
Semi-commercial and non-commercial vehicles for personal and business use.

Easy personal loan

Personal loans for salaried individuals of reputed local and foreign companies at rates
tailored to customer's repayment capacity.

Cash Plus
Cash Management services for corporate customers. Helps customers substantially
reduce their receivable collection time frame, improve cash flow and business
management.

MCB Full Day Banking

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Enjoy the convenience of extended banking hours from 9am to 5am across the country.

Bill Payments
MCB easy bill pay offers unmatched convenience to pay your utility and mobile phone
bills or re-charge your prepaid mobile phone accounts anywhere, anytime with security
and peace of mind. MCB is the only bank that offers you 3 convenient options of making
bill payments to PTCL, SSGC, Instaphone, Mobilink, Paktel and Ufone. So, save your
precious time by avoiding long queues and pay your bills through MCB Easy Bill Pay.
MCB Smart Card or MCB ATM Card Holder can easily pay their bills or re-charge their
prepaid mobile phone account through the following convenient options of MCB easy
bill pay.

MCB Internet
MCB Internet Banking Service is a convenient way to access your account(s) 24/7. It’s
secure, free of cost and lets you bank freely with a choice of location and time. This
service allows you to transfer funds, pay utility/mobile bills, set up standing order
instruction, download account statement and much more.

MCB Investment Services

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

MCB Salary Club

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

MCB Lite
The worlds 1st socially connected mobile wallet that lets you transfer money from your
bank account over to your mobile wallet. That’s not all it is also enabled by a visa
powered card that helps you withdraw money from an ATM or use it on a POS machine
locally or Internationally, more so you may invite family and friends onto the MCB Lite
grid and conveniently transfer money from one wallet to another, creating a financial
connect in your inner circles while having full control over your funds.

MCB Fun Club

MCB Fun Club – Banking for Kids is a product designed for the minors. This product
offers two types of accounts; Savings & Current. The main features of this product
include: customized and branded Cheque book and debit card that are issued in the name
of the minor & guardian both. The debit card is loaded with various deals and discount
offers at several outlets across Pakistan. In addition to this, Fun Club also offers two
augmented features; WWF-Tag a Plant, where the minor gets to tag a tree in his name and
Adamjeelife – Education Plan, that acts as an insurance cover for the minor’s education.
MCB Mobile ATM
MCB Mobile ATM brings extra comfort & convenience in our existing banking services.
Our innovative MCB mobile ATM van ensures that we offer our services wherever the
need may be felt, be it concerts, fairs or any other occasion/special event.

MCB Merchant Acquiring

MCB is the second largest merchant acquirer in Pakistan with 32% market share,
currently our acceptance is spread around 41 cities of Pakistan. Quality service,
Competitive Discount Rates and state of the art POS terminals are the primary objectives

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 on which our business thrives. We readily accept Visa, Master & Union Pay local and
international credit & debit cards.

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

Competitors
 Bank Alfalah Limited
 United Bank Limited
 Askari Bank Limited
 Habib Bank Limited
 Allied Bank Limited
 Standard Chartered Bank
 National Bank of Pakistan
 Bank Al-Habib
 Atlas Bank
 Soneri Bank
 The Bank of Punjab

Organizational Structure
Organizational Hierarchy chart

Chairman/boa
rd of directors

Audit
Committee

Corporate & Legal Affairs

President (Syed Mudassar Hussain
Audit & Naqvi)
RAR

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Risk Management Treasury & Wholesale Retail HRM
Forex Banking Banking

Operation Strategic Information Compliance & Financial

Planning & Technology Control (Raheel Control
Investment Ejaz)

Special Assets Islamic CCM & CSR &

Management (Laqa Banking Special Security
Sarwar) Projects

Hierarchy of MCB Bank

BOARD OF DIRECTORS
Mian Mohammad Mansha Chairman
S. M. Muneer Vice Chairman
Mr. Tariq Rafi Director
MR. Shahzad Saleem Director
Mr. Sarmad Amin Director
Dr. Muhammad Yaqub Director
Mian RazaMansha Director
Aftab Ahmad Khan Director
Mian UmerMansha Director
Mr. M. Ali Zeb Director
Dato’ Seri Ismail Shahudin Director
Mr. M.U.A. Usmani (President / CEO)

Audit Committee Members

Tariq Rafi

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Dr. Muhammad Yaqub
Dato’ Mohammed Hussein
Aftab Ahmad Khan
Muhammad Ali Zeb
Malik Abdul Waheed

Human Resource Committee Members

Mian Mohammad Mansha
Dr. Muhammad Yaqub
Mian Raza Mansha
MR. Shahzad Saleem
Mr. M.U.A. Usmani

Risk Management and Portfolio Review Committee Members

Mian Umer Mansha
Mr. Tariq Rafi
Mr. Sarmad Amin
Mian Raza Mansha
Mr. Shahzad Saleem

Business Strategy and Development Committee Members

Mian Mohammad Mansha
Mian Raza Mansha
S. M. Muneer
Mian Umer Mansha
Dr. Muhammad Yaqub
Mr. M.U.A. Umani
Dato' Mohammed Hussein

Hierarchy of Management
The hierarchy of management of MCB bank is as follow

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ORGANIZATIONAL STRUCTURE

PRESIDENT

SENIOR EXECUTIVE
VICE
PRESIDENT
EXECUTIVE VICE
PRESIDENT

SENIOR VICE
PRESIDENT

VICE PRESIDENT

ASSISTANT VICE
PRESIDENT

OFFICE GRADE-I, II,

III

ASSISTANT

CASHIERS

PEONS

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 GRADES OF OFFICER OF MCB

CHAIRMAN

CHIEF EXECUTIVE

SEVP

EVP

SVP

VP

AVP

GRADE I

GRADE II

GRADE III

ASSISTANTS

Clerical Staff, Cashier, Non-clerical Staff

Technical Staff Messengers, dispatch rider

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 Comments of the Organization Structure

According to my point of view, the organizational structure of MCB Limited is good and
sound, as I mentioned above the Board of Directors consist of totally 13 members in
which 10 non-executive Directors, 1 Chairman, 1 Vice chairman and 1 is president &
CEO of the Board. I think this structure has a very strong foundation and can run the
Business of Bank like corporate, commercial and consumer banking efficiently and
effectively according to the requirements of consumers and modern era.
The structure of MCB Bank is divided into divisions and these divisions is further
divided into different departments in other words you can say that the structure of the
organization is pyramid style. This style of organizational structure helps the management
of the bank to check the efficiency of employees and to control its resources because the
span of control is clearly defined, each department report to the central department and
central department reports to the head office. The communication among the departments
is very easy and effective. Every department helps the management in controlling the
operations of the bank effectively. Each division and department is responsible for its
respective duties.

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Internship activity Plan

A brief introduction of the branch

First of all I would like to thank MCB who gave me a chance to do my internship. I
worked in T block Branch. I enjoyed working in a professional environment. The staff of
that branch was really cooperative, they answered each and every question asked by me
and helped me to gain maximum knowledge but it was very difficult for me to learn
everything in this short time period. I tried to do my best.

I am highly thankful to the staff specially the branch manager Omer Farooq for giving me
a chance to learn. I wish to be the employee of MCB after I graduate.

Number of employees working in the branch

There is 1 Tea Boy, 1 sweeper, three Guards & following permanent officers in the
branch:
Branch Manager: Omer Farooq
Operations Manager: Syed Murtaza Ali
Customer Services Officer: Liaqat Ali
General Banking Officer: Miss Noureen & Miss Huma
Cash Officer: Sir Imran & Sir Umar

Internship Duration
Starting Date: 11th July 2016
To
Ending Date: 21st August 2016

Departments I worked in
During my internship I worked in various departments of the branch and done different
tasks
 Customer service Department
 Remittance Department
 Cash Department
 Clearing Department

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Training Program

The time period of my internship was six weeks. In this time i worked in different
departments for a few days to get the maximum knowledge of every department of the
bank. The staff of the branch was very cooperative, they trained me and helped me in
learning all the tasks of the departments like Account Opening, Remittance Department,
Cash Department etc.
In the first half of my internship tenure I worked in Customer Service Department the
Major Function of the Department is opening of New Account, Closing of existing
Account, Requisition Slip, filling Deposit Slips and Cheques of the customers, helping
the customers by guiding them in branch and on Phone. Miss Noreen and Sir Liaqat
assisted me on it.
Moreover during this period I talked to customers on the phone regarding the Credit
Card, Dormant Account, Visa Debit card and Saving plan and also dealing with the
customers visiting the branch for it, which I was guided by the Branch Manager Sir Omer
Farooq.
During the second half of my internship, Miss Huma taught me all about the Cheques and
the clearing. In this duration I also worked in Cash Department under very strict
preservation of Operation Manger Sir Murtaza and Chief cashier of the branch because
this is very sensitive department of the branch. In this Department I Learned what is the
procedure of Cash Deposit and withdrawal, how the Utility Bills are collected and what
are the books that are relevant of the Cash and how these are prepared.

General Tasks assigned to Me

During the tenure of my internship I also did everything that was assigned to me by BM
or BOM or any other staff member like;
 Office Activities
 Handling office record files
 Handling Account opening files
 Helping Customers to Fill in Pay slips and Cheques
 Helping Cashier to Make Scrolls Of Utility bills

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Opening a new Account Procedure
Customer Service Department

The account opening department is very essential department of any bank, it is the basic
step for the customer and banker to form a relationship. It is very important because in
this department the customer makes 1st relation with the bank. The First task given to me
was to learn how to open a new account.
Opening of a new account is the starting of the contractual relationship between the bank
and the customer.
Here are following some important things that are essential for the Opening of new
Account according to the MCB Bank’s policy.
 Valid new CNIC
 Source of income
 Next of kin
 In case of illiterate 2 passport size snaps
 Minimum amount of account opening Rs.1500/-

After opening an account the person becomes the customer of the bank. I currently have a
saving account in MCB. There are different requirements for opening an account but the
first step of opening of every new account is getting application letter from a person that
is to determine customer’s integrity, responsibility, occupation and source where he got
money to open a new account. The application form is filled by the customer in the
presence of a bank officer containing all the information required by the bank such as
Title of Accounts, Full name of Applicant, Occupation, Address, Telephone number,
Currency type and a photo copy of customer’s ID card from whom source of income is
obtained along with his signature. Then the identification of the person is checked from
the data base of NADRA, for which NADRA has given access to the banks.
When all the requirements are filled and everything is found correct, account is opened
for the customer and a Cheque book is given to the customer for the withdrawals from his
account.
A Cheque book contains ten, twenty, fifty or hundred leaves. Each Cheque book carries a
requisition slip for the issuance of the new Cheque book which is signed by the customer
and after his signature verification, the new Cheque book is issued.

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I also helped customers to fill the Cheque and deposit slips as we had customers who did
not know how to fill it. My duty was to help and guide customers to solve their various
problems.

Specimen signature card (SS card)

For the account opening SS Card is also a very essential document. It is the basic form
for the customer identification. Along with account opening form, SS card is also to be
filled. SS Card consist of details like
 Account type saving/current/term saving(deposit)
 Phone number (personal resident PTCL/Mobile number)
 Nature of account
 Operation instructions in case of joint account
 Specimen Signature (according to NIC)

Requisition slip
The Requisition slip is also a very essential document, it is used for the request for the
issuance of Cheque book. Mostly it is used for the new customer for the first time request
of the Cheque book. So I helped the customer to fill the requisition slip for the purpose of
Cheque book. I also told him/her when a customer completely uses his Cheque book then
he has to apply again for new Cheque book. For this purpose he has to take the
requisition
from the old Cheque book and submit after filling it. The officer matches the signature
with bank record, with the SS Card that bank take at the time of opening an account, the
Cheque book will be issued according to the type of account because the Cheque books
are different for different accounts.

Letter of Thanks
This is computer generated and it requires no signature for the issuance, the basic purpose
of this letter is to confirm the account holder’s postal address. Letter of thanks and
welcome is issued and send to new account holder.
Amendments /closing of account

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Lastly I asked my seniors about closing process of an account so he told me that in case
of amendments, customer have to fill out the permission form with bank, like addresses
change case, details change case, authority change case.
If customer wishes to close his account, he has to submit an application to bank for
closing the account and also have to submit the unused Cheque book to bank.

Cash Department
Cash Receipt
Cash is the life Blood of every bank and is the most important and sensitive department
of all. This department deals with the most liquid assets therefore chances of fraud are
there. The management of my branch was very strict regarding cash department. Only
authorized persons are allowed to enter in Cash Room. I was also allowed to work under
strict orders of the manager.
There were three tellers in cash room, one was receiving Cash other was making
Payments and the other was collecting Utility Bills. When cash is received at the counter,
it is posted in the system in customer account written on pay in slip.

Utility Bills department

In this department the teller received different types of utility bills affix. Cash received
stamp is done on bill stub in the customer custody

Balancing of Cash
Opening Balance + Receipts – Payments = closing balance
Balancing figure is drawn as closing balance of the cash and is written in cash balance
book which my duty was to present to the manager operations.
Total five books are maintained in the Cash Department:
 Cash in Vault Book
 Cash ratios Register
 Scroll Book
 Cash Balance Book
 Cheque Register

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Remittance Department

After the working in customer services department I had a chance to work in remittance
department. I found it very interesting department and enjoyed allot working in it.

Demand Draft
Demand draft is a non-negotiable instrument that is used to transfer funds. It’s a written
order drawn by the branch of the bank upon the specified branch to pay certain sum of
money to or to the order of specified person. Demand draft is that instrument that is used
in case of inert city transaction. It has same legal requirements as for Cheque; for
example it is only valid for six months it can only deposit in payees account only. If the
customer wants to cancel the DD there is a procedure that is to be adopted for the
cancellation of the DD, Customer requests the bank officer for the issuance of the
demand draft and the banker issues it on drawer bank with the name of payee on it. Few
things must be kept in mind while issuing the demand draft that amount must be written
clearly in both words and figures, name of the payee must be certain, drawer bank must
be mentioned and it should be signed by the purchaser. In case customer having a running
account in the issuing bank, bank charges no amount on issuance of the demand draft and
if customer is not an account holder then bank charges nominal amount on issuance of
demand draft.

Pay Orders
Pay order is also a written instrument to pay certain sum of amount to the payee just like
demand draft. Pay order is meant for bank own payment but in practice they are also
issued to customers. But unlike demand draft pay order is used for intra city transactions.
A pay order is a written authorization for payment made in a receipt form issued and
payable by the bank to the person named and address.
Three parties are involved in pay order
 Purchaser
 Issuing branch
 Payee

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Call Deposit Receipt
MCB also facilitate his customers by issuing CDR .This is a mode of taking guaranty of
the customer that he is genuine and will obey the contract. This is mostly used for
government and Private Contracts. After the completion of the task the payee release the
CDR and the customer can cash it.

Clearing Department
The main job of clearing department is to receive and clear the Cheque which is drawn on
the other banks. Bank receives these Cheques and collects the amount from other bank
and charges some service charges to customer on this service.

Inward Clearing
This contains the Cheques from other Banks of the city (with in the city). These Cheques
drawn up/paid up by the bank which gets the inward clearing appliance.

Intercity Clearing
If the Cheques deposited to the customer is out of city, it is sent in outward intercity
clearing.

Outward Clearing
The Cheques of other banks received from MCB customers to deposit in their accounts is
entered in outward clearing register and sent for clearing to payee bank is called outward
clearing.
State bank of Pakistan has an additional named NIFT (National Institutional
Facilitation Technologies) clearing house. It collects Cheques, demand draft, travel
Cheques, pay orders etc. from all the branches of different banks with in city through its
carriers and send these to those branches on which these are drawn for clearing then wait
for approval of the Cheques from branches. When confirmed, the National Institutional
Facilitation Technologies prepare fact sheet, showing the number of Cheques and amount
debit and credit, then send a copy to each branch also to State Bank of Pakistan clearing
house where account of the banks are balanced according to fact sheet by bank.

26
The collection of Cheques from the client
When bank collect the Cheques from the client, carefully check the following points.
Very first is date of Cheque, it should be within validity (six month).
 Title of the Cheque
 Amount in figure and words should match
 No cutting and overwriting
 Deposit should also match with the Cheque

Stamping Procedure
After above necessary checking, Cheque is forwarded for stamping procedure. For
outward clearing, the clearing stamp of next date on payees account only for MCB bank
is affixed on the back of the Cheque and crossing stamp is affixed on the front of the
Cheque.

Transfer Stamp
If the Cheques is from the same bank and both drawer and the payee have an account in
same bank then the Cheque is directly forwarded to posting computer terminal where one
of it will be debited and other is credited respectively.

Credit Department
Out of all the departments that I worked in, I found advances department most complex
and difficult to learn. Advances are the main sources of the income for the banks. Bank
charges different rates of interest on loans as specified by Karachi Inter Bank Offering
Rate (KIBOR) plus banks own rate of interest. MCB also provides different types of
loans. Loans are the monetary assistance for individual and business. I spent most of the
time to understand and observe the working in this department.

Loan against Pledge of stock

Next type of loan that MCB provides is loan against pledge of stock. First of all, banks
verifies the credibility and past dealings of the applicant as well as record of CBI. When
an investigation is satisfactory then bank makes sure that the stock to pledge must be in
saleable form. Bank keeps its safety margin so stock must have value greater than the

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amount of loan requested. Bank takes the possession of the stocks and keeps it in its own
lock. When full amount of loan is paid back to the bank the possession of the stock is
given back to the customer.

Hypothecation of stock
Difference between pledge and hypothecation is that in pledge bank takes the full
possession of the stock and puts it in its own lock and in hypothecation the bank does not
take full possession of the stock, it remains in borrower’s possession.

Mortgage of Property
Title deeds of immoveable property are accepted by the bank only as collateral security
or alternatively as unauthorized security. Mortgage of property has lots of legality
involved which I found difficult to understand. Bank legally charges in the process of
mortgage of property as the ownership gets transferred to the bank till the borrower
repays the entire amount of loan back. Apart from understanding the loan procedures my
duty was to calculate the mark up’s on daily basis.

Analysis of Management Function of the

Organization

Planning

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According to my point of view about MCB’s future, the high or top management of this
organization wishes to take the bank on the top and to make it the best, biggest bank of
the Pakistan. MCB wants to continue to invest in our branches to make more sales and
services oriented. Through the introduction of our new sales and service model,
strengthened transaction processing and leading financial products menu, MCB aspired to
achieve this ambition. MCB want to be viewed as the leader in transactional convenience.
To get to top market share, MCB will continue to invest in our alternate channel payment
capabilities and services as well as getting a larger share of transaction driven businesses.
“The Vision of MCB is to be the leading financial services provider, partnering with our
customers for a more prosperous and secure future.”

Mission of MCB
The Mission of MCB is that they create a team of professionals that provide the
innovative and efficient financial solution to create long-term relationship with its
customers, and ensure that their Shareholders can invest blindly and with confidence in
them.
According to mission statement, one can analyze how much strong planning is required
by MCB.
There are five core values of MCB

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

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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.

Decision making process

Identify problem, causes behind this inquiring internal and external environment, holding
discussion with employees for purpose of their suggestion, conflict the environment in to
finding the best, apply & critically analyze and compare outcome with normal standard.

Organizing

Departmentalization
The following departments are under the head of MCB banking. These departments are
following the approaches of continuous learning for development of organization and its

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 products and services. These departments are based on the departmentalization, every
department has its own work specialization, chain of command. Span of control is narrow
in each department but it’s not permanent, it vary according to situation, all department
are centralized/decentralized according to situation and on formulation.
 Operation department
 Clearing department
 Account & finance department
 Car 4you Department
 Home Loan Department

Span of Control
In the Muslim Commercial Bank Ltd narrow span of control vary according to situation
& condition every time.

Chain of Command:
Board of Directors
Chief Executive
Executive in Charge

Credit card Credit Audit International Banking Marketing Finance

Centralization/Decentralization
MCB Bank Ltd follow the centralized concept. All of its departments are centralized. For
example Issuance of ATM Cards & Cheque Books Etc are Centralized.

Formalization

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MCB Bank has a specific code of conduct which has to be signed by every employee and
everyone in the organization is responsible for rules and regulation formulated by the
management.

Work Specialization
During my internship I observe that each and every person is having particular
experience according to his/her job. Also training program made them more experts in
their filed.

Managing change & innovation

MCB Limited is continually and fully up to date according to needs and requirement of
market. They continuously update to differentiate itself in market place along with
conventional banking behavior of capital mobilization and credit disbursement. They
carefully watch the departments and employees and apply the change strategies if needed
in any department.

Managing IT & communication

MCB Limited is very conscious about its building namely MCB. It tower up to date with
modern technology and has computerized system. It is also working with its objective to
be automated and fully computerized in all of its banking behavior. MCB is very
conscious about its IT equipment it have its IT manual in which they clearly states what
policy should be followed while using IT equipment and while working in branch.
It also have complaint cell where you can Lodge any complain. MCB also has a very fast
communication channel and also its check & balance through MCB network.

Leading
Leadership style
MCB bank Limited is working with excellent and outstanding leadership and is using
Autocratic Leadership style in order to achieve the purpose of MCB bank Limited
because autocratic style of leadership allows the manager to make the decisions
independently without any interception of any other staff members.

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In MCB, group heads takes the Deposit targets from higher management and imposes
them without any consultation on their joiners.

Power & Politics

In MCB power & politics is too low, every one follows the policies accordingly.

Motivation
MCB is using handsome salary Packages, Annual performance bonuses, respect and trust,
promotion & empowerment for motivational purpose. Due to this Positive Motivational
Approach the Employees of MCB are prosperous and everyone is willing to be a part of
MCB.

Controlling
MCB has properly set a system of check & balance of daily transactions, operational
affairs and properly monitoring system for routine work. It has a daily progress reporting
system. At the end of the day every Branch Manager has to inform RH or his coordinator
about the progress of the day.
G
MCB control its departments in premed H style.
GM

RH

BM

In this ways it controls all its resources. BOM

ALL OPERATION STAFF

Critical Analysis
During the 6 weeks of my internship I come to know that how the business and
organizational life is different from the student life concepts but I found it quite different
from my book knowledge.

1. Customer Loyalty

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Customer loyalty is the basic key of success for the Good will of every organization as
well as MCB. It gives the impression that the priority is given to mostly corporate
customers in MCB as compared to the common customer from middle level.

2. Lacks of capable staff

During my internship, I observe that there is shortage of capable staff in MCB. There are
not enough employees to facilitate the customers as per requirement of competence.
Extra Working Hours:
Staff of MCB is facilitating the customer at their best but there is a lot of work to do in
routine banking hours so they work for more than official timing for the completion of
daily working.

3. Work load
There is unequal distribution of work load. I found that some lazy staff did not like to
work, while the other ones have to bear more work load as compared to other.

4. Unprofessional behaviour of staff

Due to working pressure and crowd, the customers sometime have to face unprofessional
and rude behavior of staff.

5. Training programs
Training of new technologies is very essential for the better performance of staff, the
training programs polishes the staff to overcome the day to day problems but MCB Bank
is not providing the opportunity of training to existing employees for new technology.
Not also to new employees which creates difficulty to worker to handle the challenges.

6. Not adaptation of new technology

Worker feels hesitant in adapting to new technologies, some are unable according to their
knowledge for example less educated but high experience old human resources.

7. Un-satisfaction of employees

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I observe that MCB did not have the proper method of employee motivation, as monetary
rewards is big motivation tool for the employee, but here in MCB personal liking and
disliking of management for monetary rewards. Due to this reason mostly employees are
unsatisfied with their jobs.

8. Insecurity of job
During the internship program I observe that here in MCB mostly staff feel insecure due
to unlawful management decision and there is less implementation of labor law.

9. Communication system
There is a lack of proper communication system between employees and management,
between Low level management and top level management.

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SWOT Analysis

36
 Strength Weakness
1. MCB has strong Capitalistic position as 1. Limited credit opportunities having low risk
compared to its competitors. profiles.
2. MCB bank has the strongest low cast deposits 2. Concentration in Govt. securities & Lending to
position in the banking industry of Pakistan. Public/Govt owned entities.
3. MCB bank has the comprehensive customer 3. Lesser international / Global presence as
supporting products (Debt, equity issuance, and compare to other banks.
4. Dependence on the money and capital markets.
advisory and facility arrangement).
5. Exposure to the Euro/US dollar exchange rate,
4. MCB bank have strong polices to introduce
with an impact on growth and results.
new products to improve margin and volumes.
6. Low quality assurance as compare to its
5. MCB bank has the wide range for Portfolio of
competitors.
loans and advances and for income streams.
6. MCB Bank has goodwill power in banking
industry due to its oldest history and wide range
of branches all over the Pakistan.
7. MCB Bank has good credit risk rating.

Opportunities Threats
1. MCB Bank has possibilities for capitalization
1. Competition from peer banks.
on the anticipated growth in Islamic banking 2. Delinquencies of credit portfolio due to ailing
industry. economic conditions.
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2. Strong capital base enable the Bank to explore 3. Squeezing margin of Banking industry due to
international markets. minimum threshold for deposits rates and
3. Positive and economic stability will increase
reducing discount rate.
demand. 4. Prevailing global financial markets crisis,
4. MCB Bank can enhance its stability by gaining
sovereign debt crisis in Europe, increasing US
Government deposit shares.
debt levels, slowdown in the world economy.
5. Significant increase in the customer base,
5. Prevalent energy crises adversely affecting
further extension of the range of the products.
projects viabilities and demand for credits.
6. Expansion in Africa, Europe and Middle East-
6. Due to high inflation rate, low saving power of
Growth and expansion opportunities in
people and low deposit rate.
emerging economies. 7. High rate of employees turnover
7. Expanding the advisory and other services 8. Unstable Political and economic environment of
offered to clients and investors. Pakistan and Unstable customer’s loyalty.
8. Potential relationship with non-resident
Pakistanis to attract FDI and home remittance.

Conclusion

At the end of this report I want to say that I had a great time doing an internship in a well
reputed bank like Muslim Commercial Bank (MCB). It was a great opportunity for me to
gain a lot of experience, which gave me the practical touch of the banking field. I
understood the operations of banking. This internship program enhanced my knowledge
about the banks.

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MCB is one of the oldest banks in Pakistan and it has a solid foundation. Chairman Mian
Muhammad Mansha has contributed alot in the success of MCB. From the history of the
MCB bank it is clear to us that MCB has been seen many ups and down with the passage
of time. But the top management is committed to take the bank to the next level of the
success. According to my ratios and personal observe I think that the bad political,
economic conditions and energy crises of the Pakistan is badly affecting the MCB which
is one of the reasons of decrease in the revenue of the bank in recent times. Bank should
take some more productive steps to avoid decreasing revenue. After overcoming on the
problems MCB banking company will become the best bank of the Pakistan.

Recommendations for MCB

At the end of this I want to say that MCB is performing very well but there is some
deficiency in different department if these are removed that can enhance the profitability
of the organization
Following are the suggestions and recommendations which I want to give to MCB:
 Almost in all branches of the MCB the problem of shortage of staff is very
common. There are few employees who are handling the whole branch resulting
in a burden of work.

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 Advertisement of MCB is not such good as of other banks.
 MCB should provide more incentives to the lower level officers.
 MCB should provide refresher courses for the staff according to their
requirements. It is most important in any international organization.

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