INTERNSHIP REPORT ON MCB BANK Limited

Internship Report submitted to the Faculty of Commerce &Accountancy in Partial Fulfillment of the Requirements for the Degree of Mater in commerce

By:

Name of Student: Sana javaid Roll Number: 12052054-045

Date of Submission:15

september 2013

UNIVERSITY OF GUJRAT
Name of program coordinator----------------------------Signature of program coordinator--------------------------

University of Gujarat
(G.T Road Sciences Campus)

Faculty of Commerce &Accountancy

Course Title: Internship (Report based on Internship) Course Code MGT-403

2. ACKNOWLEGEMENT

All the praises are for the almighty Allah, the creator of universe, the most gracious & merciful, and the source of all knowledge, wisdom within and beyond my comprehension. Allah is the only, who can help us in every field of life. I bow my head before him who enabled me to work on this report and helped me to complete this report successfully. All praises after almighty Allah are due to holy prophet Hazrat Muhammad (Peace be upon him), the most perfect exalted among, who & us is forever a torch of guidance and knowledge for humanity as a whole. Afterward, I am greatly indebted to my Parents and the instructor for providing me excellent guidance to successfully complete my Internship report of MCB Bank of Pakistan. I here by provided a golden opportunity to perform working activities at MCB for a period of 6 weeks. The aforesaid occupancy bestow me precious moments to make learning and get experience of the practice life with a successful approach. Soon after, I am heartily grateful to Mr.Ramzan,Branch manger of MCB Bank of Pakistan, who confer me possibility to enhance my understanding and knowledge about the working systems of MCB, which would ultimately useful for my future career and whose cooperation enables me to compile this comprehensive report.

Table of Content
S.NO
2 4 Chapter#1 5.1.2 5.1.3 5.1.4 5.1.5 5.1.6 5.1.7 5.1.8 5.1.9 5.2 5.2.1 5.2.2 5.2.3 5.2.4 Chapter#2 6.1.1 6.1.2 6.1.3

TITLE
Acknowledgement Executive summary Introduction Histroy of MCB Award of MCB Business Volume Mission Vision General profile Product &Services Loan Product Corporate Banking Online Service Virtual Banking Islamic Banking Pest Analysis Organization structure Branch Network Hierarchy of organization Competitor of M.C.B

Chapter#3 7.8 7.9 Chapter#4 8.2 8.3

My Internship work Swot analysis Financial analysis of MCB Recomdations Conclusion References

4. EXECUTIVE SUMMARY The banking structure in Pakistan comprises of the following types, State Bank of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks, specialized credit institutions. The state bank of Pakistan is the Central bank of the country and was established on July 01, 1948. The network of bank branches now covers a very large segment of national economy. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit. MCB was incorporated under companies act 1913 on 9th July; 1947.The bank transferred its registered office to Karachi, where the Head Office is presently located. In April 1991, MCB became Pakistans first privatized bank. The bank has corporate branch at Shah rah-e-Faisal Karachi (SFK). The bank is using SWIFT for transfer of information about imports and exports. MCB SFK branch has Currently Following three Departments General Banking Department, Advances Department & Foreign Exchange Department. To open an account the customer has to meet the general banking manager with an introducer. The procedure begins with the punching of account opening form to the customer file i.e. customers master file. Before closing any account, bank send letter to the account holder for informing him that his account is going to be closed. In remittance department like any other bank MCB also have instruments for transferring of money, Telegraphic Transfer, Mail Transfer. In cash department both deposits and withdrawals go side by side. This department works under the accounts department and deals with cash deposits and payments. This department maintains the following sheets, books, and ledger of account cash received voucher sheet Cash paid voucher sheet, Paying-in-slip, Cheque Book, Cash balance book. The clearing in Karachi at MCB or other banks is being done through NIFT (National Institute of Facilitation Technology).

(5)

5.1.1 INTRODUCTION
MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion and total assets of around Rs.300 billion. Incorporated in 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate executives. In 1974, MCB was nationalized along with all other private sector banks following the Bank Nationalization Act 1947.

The Bank has a customer base of approximately 4 million and a nationwide distribution network of 1,700 branches, including Islamic banking branches, and ATMs.

During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base.

5.1.2.HISTORY AND BACKGROUNG

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 1700 branches. Eighteen 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. MCB is also catering to the growing middle class by providing new asset and liability products. MCB looks with confidence at year 2005 and beyond, making strides towards fulfillment of its mission, "to become the preferred

provider of quality financial services in the country with profitability and responsibility and to be the best place to work".

(5.1.3)

MCB has become the only bank to receive the Euro money award for the seventh time and Asia money award for fifth time in the last ten years .MCB won Best Banking Asia award in 2008. MCB also won the "Best Bank in Pakistan" award in 2008, 2006, 2005, 2004, 2003, 2001, 2000. In addition, MCB also has the distinction of winning the Asia Money award in 2009, 2008, 2006, 2005 & 2004 for being "The Best Domestic Commercial Bank in Pakistan". 2010 The Asian Banker: Strongest Bank in Pakistan 2010 The Asian Banker: Leadership Achievement Award 2010 MMT: Best Bank Led MMT Service 2010 ICAP / ICMAP: BCR Award 2009-Banking Sector 2010 SAFA: Certificate of Merit Award 2009 Asia money: Best Domestic Bank in Pakistan 2009 The Asset: Best Domestic Bank in Pakistan 2008 Euro money: Best Bank in Asia 2008 Euro money: Best Bank in Pakistan 2008 Asia money: Best Domestic Bank in Pa 2006 Asia money: Best Domestic Bank in Pakistan

 2006 Euro money: Best Bank in Pakistan 2005 Asia money: Best Domestic Bank in Pakistan 2005 Euro money: Best Bank in Pakistan 2004 Euro money: Best Bank in Pakistan 2004 Asia money: Best Domestic Bank in Pakistan 2003 Euro money: Best Bank in Pakistan 2001 Euro money: Best Bank in Pakistan 2000 Euro money: Best Bank in Pakistan

(5.1.4)
Business volume in terms of Revenue, Assets, Deposits, Advances and Investment is as under. o Total Revenue (Interest Income + Non Interest Income)
Years Total Revenue

2010
12,017,858

2009
12,417,459

2008
12,824,663

2007
8,483,996

2006
6,907,542

Total Revenue
14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 -

Years

10

09

08

07

06

Year

2010

2009

2008

2007

2006

10

Total Assets Deposits Advances Investments Share holders 'equity Pre-tax Profit After-Tax Profit Earnings per Share Rs. Number of Branches Number of employees

1,035,025 832,152 477,507 301,324 103,762 24,415 17,563 13.05 1289 16457

944,583 727,465 475,243 217,643 94,142 21,300 17,562 13.05 1,287 16,248

817,758 624,939 412,987 170,822 81,367 23,001 15,459 11.49 1,276 15,441

762,194 591,907 340,319 211,146 69,271 28,061 19,034 14.15 1,261 14,079

635,133 501,872 316,110 139,947 53,045 26,311 17,022 12.65 1,250 14,019

(5.1.5)Mission:
To become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work.

(5.1.6)Vision Statement:
To be the leading financial services provider, partnering with our customers for a more prosperous and secure future.

(5.1.7)GENERAL PROFILE

PRINCIPLES OF PERFORMANE
Customer Focus:

11

Over the years MCB has developed strong relationships with its customers by understanding their needs and treating them with respect, dignity and importance. The driving force behind its commitment and services is its focus on customers, ensuring that it not only meets, but exceeds their expectations. Quest for Quality: MCB strives to achieve excellence by ensuring that every moment of our time is spent in adding value, making sure that we do things right, first time, and every time. With this quest for quality, MCB has always taken initiatives in bringing banking into a new arena; from cash to the convenience of plastic; from branch banking to internet banking and from face-to-face customer interaction to online accessibility. Employees Respect: MCB encourages diversity and treat each of our employees with fairness. MCB gives constructive feedback for their continuous development and seek suggestions from all employees for further improvement. The bank ensures that quality performance is acknowledged and rewarded and exercise utmost responsibility in decision-making with regards to our employees. Team Based Approach: MCB believes in achieving its Mission and Vision by working together as a combined group. MCB treats its employees as its internal customers and ensure that the requirements of internal customer focus are always met. Equipped with indepth product knowledge, and recognizing the strengths in each individual, the bank strives for optimum-results from our co-workers and bringing out peak performances by working towards common goals and objectives in today's dynamic banking environment. Good Corporate Citizenship:

12

MCB seeks to continuously improve the quality of life in our communities. The bank realizes that it has a responsibility to the society in which it operates and it seeks ways of playing a positive role for the betterment of the community at large for a progressive environment, better living and a brighter future.

(5.1.8)PRODUCTS AND SERVIES

Commercial Banking

Deposit Accounts: Basic Banking Account:

A simple account to produce the habit of saving for beginners like students. The account can be opened with only Rs. 1000, no minimum balance required, no any monthly or annual charges applicable on this account, two deposits and two withdrawals can be made in a month. Also you can avail the facility of MCB ATM card and MCB smart card. Pak Rupee Current Account: MCBs Pak Rupee Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day plus you can avail finance facility up to 75% of the total deposit. In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines Pak Rupee Savings Account: MCBs Pak Rupee Savings Account offers you attractive returns on your Pak Rupee investment with a minimum balance of Rs. 10,000.

13

In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines. You can also use MCB Smart card and Locker Facility at economical charges. Pak Rupee Term Deposit: MCB Pak Rupee Term Deposit gives a higher rate of return. It gives you choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits.Saving 365 The MCB Saving 365 calculates profits on a daily product basis and gives you the facility of unlimited withdrawals. Foreign Currency Savings Account: MCBs Foreign Currency Savings Account offers you attractive returns on your Foreign Currency investment. You can invest in any of the four currencies i.e. US Dollar, UK Pound Sterling, Japanor Euro Your foreign currency account is exempted from Zakat and withholding tax. Foreign Currency Current Account: MCBs Foreign Currency Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day. MCB Foreign Currency Term Deposit: MCB Foreign Currency Term Deposit gives a higher rate of return. It gives the choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits. Smart Dollar Account:

14

The Dollar Khushali Account, a Dollar based account was introduced in 1993 at selected MCB Bank branches. Today, you can open a Smart Dollar Account at over 200 branches in Pakistan with a minimum amount of USD 10,000. Business Account With MCB Business Account you can avail higher number of free transactions with higher balance. The account can be opened with Rs. 50,000. You can make free Deposits and Withdrawals from all nation-wide branches.

(5.19)Loan Products:
MCB Business Sarmaya: MCB Business Sarmaya is the best Running Finance facility against your residential property which empowers you to manage your business dealings better. So act today and get MCB Business Sarmaya and thus improve your business, avail lucrative opportunities and expand your business, with absolute satisfaction of cash flows. MCB Car4u: Life is like a chess board. You plan your career options. You analyze your business moves. But when you really want to improve your life, you make a power move. MCB CAR4U Auto Finance is the power move that assists you in more ways than you ever imagined. It is affordable, with lowest mark up 16%, flexible conditions, easy processing and above all, no hidden costs. MCB Pyara Ghar: Some destinations require a long wait. Like waiting for a home of your own. But with MCB Pyara Ghar it is now easy to step into your home and start living a real life.

15

MCB Pyara Ghar is an ideal Home Finance from your own bank that lets you Purchase, Renovate or Construct your home the way you have always wanted. Having your own home was never so easy. Easy Personal Loan: MCB Easy Personal Loan provides you with the financial advantage to do things you've always wanted to but never had the sufficient funds for. Take that muchneeded holiday. Buy a car. Refurnish your house. Purchase a new TV. Finance a better education for your children. MCB Master Card: Since the beginning of time, people have tried to find more convenient ways to pay, from gold to paper money and checks. Today, money is moving away from distinct hard currencies and towards universal payment products that transcend national borders, time zones, and, with the Internet, even physical space. Plastic or "virtual" money, credit, debit, and electronic cash products, inevitably will replace cash and checks as the money of the future. MCB Rupee Traveler's Checks:

MCB Rupee Traveler's Checks were first introduced in 1993 as safe cash for traveling and travel related purposes. The product has been extremely popular and is preferred over cash by customers while traveling and in all walks of life. MCB Rupee Traveler's Checks- The safest way to carry Cash.

(5.2)Corporate
Cash Management Services:

Banking

MCBs network of over 1700 branches in Pakistan enables it to collect and disburse payments efficiently with its cash management services. This also enables

16

it to offer you a choice of paper based or electronic fund transfer solutions including collection amounts, cross branch on-line transactions etc. Working Capital Loans: Based on the customers specific needs, the Corporate Bank offers a number of different working capital financing facilities including Running Finance, Cash Finance, Export Refinance, Pre-shipment and Post- shipment etc. Tailor- made solutions are developed keeping in view the unique requirements of your business. Term Loans: MCB offers Short to Medium Term Finance to meet capital expenditure and short term working capital requirements of our customers. The loans are structured on the basis of underlying project characteristics and cash flows of the business. Trade Finance Services: Under Corporate Banking MCB offers trade finance services that include an entire range of import and export activities including issuing Letters of Credit (L/Cs), purchasing export documents, providing guarantees and other support services.

(5.2.1)Online Services:
MCB ATM Services With a solid foundation of over 50 years in Pakistan, with more than 750 automated branches, 269 online branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM switch, MCB is positioned at the forefront of the banking industry in Pakistan. This success has been possible because of a never-ending drive to achieve higher levels of excellence, constantly striving to raise the level of performance. MCB Mobile Banking:

17

At the forefront of technological excellence, MCB proudly introduces MCB MOBILE BANKING. The convenience of accessing your account balance information and mini statements whenever you want or wherever you may need them, with comfort and peace of mind. MCB Call Center: Keeping up with banking services can be tedious but not with MCB Bank, where phone service is at your fingertips. Just dial our Call Centre from the comfort of your home or office or wherever you happen to be. It offers basic banking services for your convenience, eliminating the need for you to make unwanted trips to your branch. MCB Smart Card: MCB now brings you MCB SmartCard -a secure and convenient instrument of payment with unmatched functionalities. It provides 24-hour direct access to your bank account. The convenience and flexibility of MCB SmartCard will help you live a smarter life. It not only helps you manage your expenses, but also eliminates undue interest on your day to day credit card transactions. Your balance is always within your reach and you spend accordingly. MCB Debit Card: Now MCB brings a secure, convenient and quick payment facility that enables you to do purchasing by using your existing MCB ATM / MCB Smart Card as a DEBIT CARD.

( 5.2.2)Virtual Banking:
MCB Virtual Internet Banking offers you the convenience to manage and control your banking and finances when you want to, where you want to. MCBs Virtual Internet

18

Banking facility is simple and secure. And it is free of cost. With MCB Virtual Internet Banking you can access any of the banking services, 24 hours a day, 7 days a week and throughout the year. MCB Virtual Internet Banking offers a wide range of online services which makes your banking accessible anytime and from anywhere. Detailed Account Summary of all listed accounts. Mini-statements of each of the listed accounts showing recent transaction history for that account(s). Statement-by-Period of each of the listed accounts, based on the period specified. Immediate or Scheduled Transfer of Funds between your own accounts, as well as to third-party accounts setup as beneficiaries, maintaining accounts with MCB. Scheduling of One-Time as well as Recurring Funds Transfers. Payment of utility bills for registered Utility Companies. Immediate or Scheduled Bills Payment. Scheduling of One-Time as well as Recurring bill payments. Option for Full or Partial payment based on the payment conditions specified by a particular Utility Company. Bulk Salary Transfer for Corporate Customers, to facilitate them in paying salary to the corporate employees, who maintain accounts with MCB. Bulk Funds Transfer for Corporate Customers. Check Book Request for any of your listed accounts. Payment/Transfer Alerts for reminding, in advance, prior to the processing of specified payments and transfers. Personal Alerts for reminding of pre-specified events and occasions.

(5.2.3)Islamic Banking:
Deposit Schemes : For customers who are looking for a deposit opportunity where they can purse their funds and reap halal returns on it, we offer the following products: Al-Makhraj Saving Account

19

 Al-Makhraj Ianat Account Al-Makhraj Term Deposit Fund Based Facilities Ijarah Products MCBs Islamic Ijarah, analogous to the English term 'leasing, is based on the Ijarah wa Iqtina concept which means the sale of the asset to the lessee after the Ijarah has matured. Under this scheme, MCB will be the owner of the asset, and the customer (lessee) will be given the asset to use for a certain period of time in return for monthly rental payments. MCB will give a separate unilateral undertaking that it will offer to sell the asset to the customer (lessee) at the maturity of the Ijarah agreement at a price that may be equal to the security deposit amount, hence the term Wa Iqtina. Types of Ijarah: 1. Car Ijarah 2. Equipment Ijarah

(5.2.4)
A broad view of market is important when management is interested in introducing better services for customers. Rapid technological change, global competition and the diversity of buyers preferences in many markets require the constant attention of the market vouchers to identify promises business opportunities, see the shifting requirements of the buyers, evaluate changes in competitors positioning and guide the choice of which buyers to target and classify them according to respective segments. Identification of external and macro factors that influence buyers and thus change the size and composition of market overtime involves initially building customer profiles. These influences include: Political and legal environment Economic trends

20

Socio cultural environment Technological factors

POLITICAL AND LEGAL ENVIRONMENT:

Banks are strongly affected by the political and legal considerations. This environment is composed of regulatory agencies and government law that influence and limit various organizations and individuals. Mostly these laws create new opportunities for business. Business legislation has following main purposes o To protect banking companies from unfair competition. o To protect consumers from unfair business practices adopted by banking companies o To protect the interest of the society from unbridled business behavior.

ECONOMIC TRENDS:
A banking market requires better consumer market in volume along with higher borrowing power. The available borrowing power depends on: o Consumer income o Saving rates o Consumption patrons o Rates of interest o Budget deficit o Exchange rates o Cost of living o Inflation

SOCIO-CULTURAL ENVIRONMENT:
A society is shaped by beliefs, norms and values. People in a society consciously and unconsciously interact with: Themselves Others Organization

21

Society

TECHNOLOGICAL FACTORS: Forces of technological advancement have played the most dramatic role in shaping the lives of people. The rate of change of technology has greatly affected the rate of growth of economy. New technology is creating deep rooted affects which could be observed in long run. The improvement techniques involved in on line banking. In brief PEST analysis affects the overall banking companies and provides us the information about the external macro condition.

(6)
ORGANIZATIONAL STRUCTURE Board of Directors
Mian Mohammad Mansha Chairman

Mr. S. M. Muneer

Vice Chairman

Mr. Tariq Rafi

Member

Mr. Shahzad Saleem

Member

Mr. Sarmad Amin

Member

22

Dr. Muhammad Yaqub

Member

Mian Raza Mansha

Member

Dato' Mohammed Hussein

Member

Mr. Aftab Ahmad Khan

Member

Mr. Abdul Farid Bin Alias

Member

Mian Umer Mansha

Member

Mr. Muhammad Ali Zeb

Member

Mr. Atif Bajwa

President / CEO

(6.1.1)
Commercial Banking Lahore East Lahore West Faisalabad Gujranwala Islamabad Sargodha 971 61 72 58 83 83 82

23

Peshawar Abbottabad Karachi East Karachi West Karachi Central Hyderabad Sukkur Quetta Bahawalpur Multan

64 82 51 42 17 58 52 34 54 78

(6.1.2)Organizational Hierarchy

President
Senior executive vice president Executive vice president Senior Vice p resident Vice president Assistant Vice President Grade 1 Grade 11 Grade 111

24

Assistant

Clerical Staff
1) Cashier 2) Technical Staff

Non-Clerical Staff
1) Messenger 2) Dispatch Rider

The Organizational chart within deptt. & in different offices. Head Office
Divisional head (SEVP)

Regional Office
Regional Head (EVP)

Zonal Office
Zonal Head (VP)

Branch
Branch Manager (VP, AVP)

(6.1.3)MCBs Competitive Strategies

To be competitive the Bank has further reinforced its position in the Consumer Banking arena by streamlining and re-launching the consumer financing products and introducing more convenience based solutions. With the re-launch of auto finance and house finance products, the Bank pushed the products with full thrust. The Bank has also launched a running finance facility against mortgage of property. Technology continued to play an important role in improving and expanding product offerings. The Bank introduced more IT based products to cater to the changing lifestyles and needs of the customers. MCB Virtual-Internet Banking was launched with wide ranging banking solutions for the customers ranging from individual to corporate customers and it has become the most preferred Internet banking solution in the country. MCB also had the privilege of being the first Bank in Pakistan to launch the comprehensive bill payment facility through its alternate delivery channels which include Internet Banking, ATMs and MCB Call Centre, currently with six payment partners.

25

Similarly, the Bank also took initiatives to increase the usage of debit facility. To provide timely and updated information, MCB has also provided a new look to its website which is user friendly and considerably easy to browse. The Islamic Banking initiative has been very successful in attracting new customer, both individuals and companies. Similarly, those relationships, which were confined only to current account facility, have grown into stronger business relationships. The branch network was expanded to Lahore and Multan during the last year and recently been extended to Hyderabad and Faisalabad. The Bank plans to further expand its Islamic Banking branch network to other metropolitan areas and also to introduce new sharia compliant banking solutions to a wider range of customers for satisfying their individual and business needs. Some wide-ranging new strategic initiatives were also taken up which will be important for the Bank in years to come. A private company has been formed in Hong Kong (fully owned subsidiary of MCB) in partnership with Standard Chartered Bank, handling trade transactions of select countries in the Asia-Pacific region. It is projected to earn US$ 1 million in its first year of operations. To increase its international presence, the Bank will be opening its representative office in Dubai and entering into major strategic alliances with banks in the UAE/ especially for marketing our consumer banking products to nonresident Pakistanis. Furthermore, feasibility is also being carried out for entering other international markets. MCB's operations continued to be streamlined with focus on rationalization of expenses, re-alignment of back-end processing to increase productivity, enhancement of customer service standards, process efficiency and controls. The Bank has taken the lead in introducing the innovative concept of centralizing Trade Services in the country by providing centralized foreign trade services to branches with a view to improve efficiency, expertise and reduce delivery cost. Management of Human Resources has been one of our core focus areas. MCB is committed towards attracting, retaining and motivating outstanding people. Challenge for MCB is to provide an environment in which employees can better realize their potential.

26

The Bank introduced 'reward for performance' where high potential officers were identified and rewarded accordingly. In view of the competitive environment, the Bank is focusing on performance and introducing a more robust performance management system. MCB is also strongly committed to training its staff at all levels.

(7)

The following activities have been done during the time period of internship. The activities given below are on the weekly basis. Mainly during the internship I worked in all the departments and learned the working and procedures that are necessary for the processes. (7.1)First week: Observed basic business process Observed movement of customers and Employees inside the Branch Learned basics of Account Opening Opened Accounts of GOVT employed persons Opened PLS saving Accounts Opened BBA accounts Opened Student account

27

Worked as CSO(Customer Service Officer) because CSO was on leave and performed the following activities: o Attended phone calls o Attended customer inquiries o Received ATM forms o Received and entered daily DAK o Filled cheaque book requisition slips

In first week I observed the basic business process. At the end of each day I totaled the electricity, water, telephone and check amounts. Mostly the total was correct. But sometimes when the total does not match with the sheet of the PRINTING I had to do it two or even three times. Process: Account opening is the basic procedure to create a relationship between a customer and a banker. When a customer opens his/her account it increases the business of the bank. The following steps are taken while a new customer enters in a bank for opening his/her account. These steps are; When a customer wants to open an account the authorized officer gives him/her an account opening form. This form is known as RELATIONSHIP CONTRACT FORM. This form is filled out with the hands of the customers. All the required fields that are mandatory for account opening should be filled

compulsory. These are the fields like title name of the customer, occupation, address of the customer, phone nos, correspondence address, e-mail address, etc.

(a) requirements for opening an account for the individual; In case of employed person Copy of CNIC Salary slip A letter from employer Initial deposit of Rs.100 to 1000.

28

Photo copy of utility bill

In case of non employed person Copy of CNIC A letter from Dist. Nazam Initial deposit of Rs.100 to 1000. Photo copy of utility bill.

(b) requirements for opening an account for the partnership; Copy of CNIC Copy of CNIC of all the partners Request letter of account opening Company letter head Copy of registered certificate (if registered) Signature specimen duly attested Initial deposit may be from Rs.100 to 1000

In both cases there is some amount which is fixed for opening current and saving account that is; For opening current account Rs.10, 000 is required. For saving account Rs.5000 is the limit.

After all these requirements, the authorized officer attaches two signature specimen

forms called SSC and one requisition form. On which the authorized officer put his/her signature and pasted signature admitted and verified and bank stamp on it. Along with this form the copy of CNIC and a Verisys form and form known as (KYC) At the last a separate file is maintained for each of the customer for banks record.

is attached with it.

(7.2)Second week:

29

In the second week of my internship I learned about Cheaque book, Debit card and Alico products. Some details are as follows: Learned About the Requisition request of Check for new Account Learned about the issuance of new cheaque book. Filled the ATM request forms Learned how to issue the ATM cards Learned how to issue the ATM Pins Got basic information about Bank Assurance offered by Alico Learned about various offers of Alico Learned about the installments of assurance account Learned about the Terms and conditions of Alico.

(A) Process of getting the new Check Book. After opening an account, a letter of thanks is sent to the customers from the Circle Office after 2 or 3 days. After receiving that letter a customer can obtain his/her check book from the bank. But while customer is coming to the bank for receiving his/her check book this letter of thanks should be with him.

These are the following steps that are used for gaining check book: The customer brings the letter of thanks and give to the authorized person. The person fills the check book requisition slip for the customer and takes his signatures. Then the authorized person saves that slip in his record and fills another slip and fwd to Karachi via NIFT and customer is asked to come after 5 days. After 5 days cheaque book is given to customer after taking his signature in a separate register But in case if ; (a) Customer is new than after taking letter of thanks check books would be hand over to him/her. (b) But in other case if customer is not new he is a regular customer than at the end of each check book a requisition slip is attached. So whenever a new check

30

book would be needed the customer will put his/her signature on it and submit it to the authorized officer.

(B) Process of getting an ATM/DEBIT card The following steps are taken while issuing an ATM/DEBIT card. When an ATM or Debit Cards issue, the following steps are needed: A copy of CNIC A minimum Rs.550 should be in respective account.

After filling up all the required documents for ATM card these documents are given to the authorized person who pasted a verification stamp on these documents and signing on it. And at the end, after 5 days the person is called again to hand over ATM card after taking his Signatures.

(c) Process of getting an ATM/DEBIT card Pin When the customer is given ATM card he goes to another Person to get his/her secrete Pin code. The person take the signatures and give it to customer. Then Customer goes to CSO and activates his CARD. Alico Products: Alico offers various products for persons belonging to different age groups. The purpose is to provide the insurance side by side with savings. Some of them are given below: Income Max Current Life Account Capital Sure Flexi Life Har Pal Mehfooz Life Partner Dream Weddindg

31

 Retire Easy Edu Care (7.3)Third week: The main objective is to know about the different functions of cash department. Cash handling etc.. Although internees were not allowed in cash department because of sensitivity of matter, they provide me maximum possible knowledge, and I spent few time in cash. Learned basic things about Cash department Learned how to write Cash book Signature verification Cash Deposit slips Processing Intercity Cheaque Processing Arranged an event to give Customers awareness about Alico Made a list of Valued customers Made invitation letters for customers Arranged necessary items for the Event Filled Cash deposit slips Filled some cheaques for aged persons Filled cash deposit slips for online Deposit

Process: In Cash department customer after filling up the checks, bonds etc give it to the authorized office. The following information are required for further preceding of the check; Name of the customer Exact amount in words and figures Code of currency Date of the check and signature of the Customer

32

 After providing all the above mandatory places check is hand over to the relevant person. The authorized person after receiving Checks or bonds puts bank stamp on it Checks the balance of the customer account. Verify the signatures of customer Then gives the cash to the customer.

Some important things that must keep in mind while filling up a check: a. The check should be enchased on that date which has to be written on the check b. No cutting/overwriting is allowed c. Signature should be matched with the ID card signature d. On the back of the check there should be the sign of the issuer I learned that how to accomplish different tasks like deposit, credit cards slips, and as well as bonds. I also learned that how original Checks are identified.

Some important things that must keep in mind while filling deposit slips: a. No cutting/overwriting is allowed in amount b. Amount should be same in words and figures c. For online deposit a copy of CNIC of depositor is necessary

(7.4)Fourth Week: Fourth week I spent in Remittance Department and learned

following things: Learned basic operations of remittance department (PO, DD) Learned how to make entries and vouchers of incoming TT Made vouchers and entries for Incoming TT Learned the difference between DD and PO

33

Observed other operations e.g. PO (Pay Order), DD (Demand Draft) Learned bank charges for PO, DD, TT & MT (Mail Transfer) Learned how to make entries and vouchers for Outgoing TT(Telegraphic Transfer) Made few Outgoing TT Learned & Made Inter-Branch Credit Advices against the checks received from outer city branches Learned how to make entries and vouchers for Outgoing TT(Telegraphic Transfer)

With these activities, also observed the other activities. The remittance officer also has to pass the entry that is entered by the cashier. The cashier enters the amount of check and the check number. Then the remittance officer enters the password and passes the entry. If the remittance officer is present on the seat then the operation manager has the authority to pass the entry. It is actually based on the amount of the transaction. When the amount of check exceeds a specific amount of Rs. 200000 the remittance officer has to pass that. And when the amount increases to Rs. 500000 the operation manager has to pass that entry. To open the customers account and to keep information of each of the customer separately so that when information is needed can be obtained easily.

Learned basic operations of remittance department. Remittance department deals with the foreign remittances. First of all the remittances are received in the post. Normally two types of remittances come. One is credited to the accounts in our branch and the other is to be given in cash to the holder of the XPIN. One advice is normally made for all the advices that are to be credited to the accounts. Then the relevant advices are made. In the advices, originating branch is Dharampura Branch. PNSC Branch is written in the responding branch. The code for the originating branch is 0992 and for the responding branch code is 0069. Current date is written in the date field. The amount is written in the relevant fields in figures and in words. In the favoring, we write the name, account numbers, DD numbers and the amount in front of every beneficiary. Three copies are prepared for each advice. One advice goes to CSO for

34

record. One goes for cashier and one goes to the clearing department for entry in the computer.

(7.5)Fifth Week:
Learned how to Issue the CDR Made vouchers and entries for CDR Made few CDR Learned how to manage CDR register Learned payment against CDR Balanced the CDR Head of GL for 31 July, 2009. Learned how to issue a PO Made Debit vouchers against the PO & DD charges Made Credit vouchers (contra) against the PO & DD charges Learned how to make DD and PO Made outgoing Clearing Made local clearing Made intercity clearing Made return clearing

The Fifth week is from 3rd July, 2009 to 8th July, 2009. The main objective of this is to know about the demand draft (DD), pay order (PO), and cash deposit receipt (CDR). To know about these entire why all these documents are used. And how much charges have to be paid for making all these.

(a) Procedure of making Demand Draft (DD) and Pay Order (PO): Out of the city DD is used, DD is made through Check and Cash. Rs.50 is charged on cash slip and in case of check slip Rs.220 is charged. PO is made within a city. It is also in the form of Cash and Check. Rs.50 is charged on cash and Rs.220 is charged on check slip.

35

If a regular customer wants to make DD or PO then in this case he/she has to fill up a form. This form is known as FUNDS TRANSFER FROM; on making this DD/PO Rs.50 is charged for making this in case of account holder but for non account holder Rs.220 is charged.

In the form all the mandatory places are compulsory to fulfill. Like, currency of instrument, type of remittance, beneficiary details, particular of applicant, applicant signature etc. these are such requirements that must be fill up.

And at the last the authorized officer puts his/her signature on DD/PO form and three stamps are pasted on it; a. Transfer stamp b. Signature verified stamp c. Crossing check stamp ( in case if half payment is made through cash form, then a check is fill up for this and attached with the DD/PO form)

And at the last the operational manager puts supervision on this and all the records are transferred into computer for bank records.

(b) Procedure of making of Cash Deposit Receipt (CDR): CDR is used locally. It is also in from of Cash AND Check. CDR has no charges. A request form is filled by the hands of the customer for making CDR. This form is known as CREDIT DEPOSIT FORM. In this form some requirements are compulsory which has to be full up these are check no, the person name to whom it is going to be transferred, signature specimen, date etc. After all these the verification stamp, check transfer stamp, and signature verified stamp is pasted on it. And at the final stage, all the transactions are recorded in a register for keeping banks records. I learned that how DDs, CDRs and POs are made. And how many charges are applied on it.

36

In this week I was a bit for remittances that are to be paid in cash, one advice is made for each of the remittance. The person comes in the bank with the XPIN. He gives it to us. With XPIN he gives the photocopy of the CNIC. One advice is made for him. Three copies are prepared for each advice. One advice goes to CSO for record. One goes for cashier and one goes to the clearing department for entry in the computer.

Procedure for outgoing clearing I also made out going clearing, for outgoing clearing a list I made an excel sheet of all bills having depositing account number, amount and cheaque number then separated bills from slips then posted various stemps on bills and slips as follows Clearing stamp of next date on front of bill Accounts credited stamp on back of bill Clearing stamp on front of deposit slip

Procedure for intercity Clearing I also made intercity clearing. For Intercity Clearing a stamp of intercity posted on face of bill, then amount, acct number and city name is entered in a separate register and deposit slip is attached in a specific file. And a stamp is posted on back of bill. A separate slip is filled for every city given by NIFT. In the specified envelope is used for every city given by NIFT with printed name of city.

(7.6)Sixth week:
(FINANCE,PUBIC DEALING, TDR) Learned about dormant account. Learned about the activation of dormant account Learned about TDR Learned how to make TDR

37

Learned basic types of financing Studied a Running Finance Case Learned about instant finance Learned about the different documents required for Credit Investigation Studied Financial statements of a client company Learned about the documents required for Running Finance Learned the Concepts of Demand and Cash Finance

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

Procedure for activation of a dormant account: a. The customer has to given a written request for activation of the account. b. Copy of CNIC. c. And a Debit transaction on the same day is made. After working in this area I learned that what things are compulsory to running an account and how we can avoid the dormant account.

TDR (Term deposit receipt):

Procedure:

38

TDR may be issued for 2 months or 3 months but calculation is made on daily basis. A term deposit receipt has to be filled for TDR on which the following mandatory places have to be fulfilled: Received form Amount Deposit period Amount in figures And account number

After the whole information is recorded into the computer system. And prepare TDR is given to the customer.

(7.7)Seventh Week: Made GL (general Ledger) analysis Analyze different heads of Assets, Liabilities, Income, and Expenses. Made Annual Expanses increase Analysis Filled Credit Proposal cum Sanction Advice MCB Instant Financing, BBFS (Borrower Basic Fact Sheet) and Application for Finance for renewal of 3 cases of CF. Studied credit proposals. Studied Credit Scoring and Risk Rating for the clients Studied classification of customers in the categories Substandard Doubtful Loss In the last week of my Internship Manager offered me to learn something of managerial level which I accepted happily. So manager gave me data and asked to analyze the difference of expenses of July 2008 and July 2009 because there was a major increase in

39

Expanse account. So I analyze different sub account and separate 6 accounts showing major increase, I also separated 6 accounts which were showing major decrease.

Online transactions and Lockers

Objective: The objective is to learn about the money grams how they make? And to know about the lockers and as well as to get knowledge that how online transactions are done.

(a)ONLINE TRANSACTIONS Procedure: In on line transaction the process is so simple in this the client receives a request form from the customer for online transactions. In such case customer presence is not compulsory. In this the following requirements are necessary to keep in mind. These are: Sender name, Customer account number, Bank and branch name, Check no, Beneficiary branch no, Total deposit and date. An online check is received form customer along with the print out of a voucher is attached with the check. And three stamps are pasted on it, these are; Clearing Stamp Intercity stamp Transfer Stamp And then in the last entry of an online check is recorded in the register for maintaining bank records.

(b) LOCKERS Procedure:

40

whenever a new customer wants to operate locker he/she signs on a SSC card. And a separate register is maintained for this purpose. and after that whenever customer wants to operate the locker than the authorized person takes the customer signature on the maintained register. And these signatures are matched with the SSC card signatures. only relevant customer is allowed to operate.

Learning: After working in this area I learned what money gram is and why it is used for? And as well as I also learned about the online transactions and the procedure used for lockers.

( 7.8 )
MCB Limited is one of the most thriving commercial banks at present in Pakistan. The organization is in the process of building itself into a force to consider. The bank is doing all sorts of new things in order to accumulate a set of distinctive competencies that could later on be transformed into a competitive advantage of considerable value. In this process of developing, striving, facing minor set backs and striving with even more zeal, the bank enjoys some strengths, needs to improve upon some weaknesses, can exploit some opportunities and is hampered by few threats. This SWOT analysis of MCB Limited takes into consideration the external as well as the internal environmental structure of the bank.

Strengths :The predominant strengths of MCB Limited are

Humble Management Strength And Commitment Of Sponsors Efficiency Phenomenal Growth Vastly Experienced Management

41

Highly Professional Human Resource Department Crucial Location Of Branches Good reputation Strong branch network Trained, Skilled & cooperative employees Faster banking services Reasonable service charges Personnel of MCB are well trained and highly skilled. Majority of employees has many years of experience in banking sector and are an asset for the bank MCB has a wide network of branches at the ideal locations, catering the financial needs of its clients Foreign Trade is the focus of bank. It has become an ideal bank for the importers and exporters Strong Security System

Weaknesses:
The chief weaknesses are Small Size Less Efficient Computer And I. T. System Disproportionate Presence Of Old Staff In The Upper Management Hierarchy Skill Set Of Employees Is Not Up to The Mark As There Is No Job Rotation Foreign Banks Still Are A Little More Prestigious MCB Limited Does Not Possess Foreign Network No Advertising In Electronic Media Behavior towards customer Insufficient advertisement Inefficient HR policies Mismanagement of time Overloading of work on employees Outdated software

Opportunities:
The opportunities on which MCB can capitalize upon are Extension of local branch network Establishing foreign branch network Capitalizing on information technology Effect of Privatization Emphasis on information technology Branch network

42

To be in the list of top banks Marketing Unexplored market of multinational corporations Growth in textile sector Adopt E-banking

Thearts:
The predominant threats MCB is facing at the moment are discussed in the following lines. Private sector banks Government policies Increased competition in banking market Unstable economic situation Network expansion by foreign banks If Pakistani banks (especially state owned banks), backed by huge network improve the service they give and their employee skill set Terrorist image of the country Inconsistency in government policies (7.9)

Ratio Analysis of the MCB:

Indexes that relates two accounting numbers and is obtained by dividing one number by other Ratio Analysis is an important and age-old technique of financial analysis. It simplifies the comprehension of financial statements. Ratios tell the whole story of changes in the financial condition of business. It provides data for inter firm comparison. They also reveal strong firms and weak firms, over- valued and undervalued firms. Ratio analysis also makes possible comparison of the performance of different divisions of the firm. The ratios are helpful in decision about their efficiency of otherwise in the past and likely performance in future. Ratios also help in Investment decisions in the investors and lending decisions in the case of bankersetc.Following are the main types of ratios that I am going to calculate in this report to compare and highlight the financial performance of MCB in 2009 with 2008.

43

FINANCIAL RATIOS Profit before tax ratio (PBT/ total income) Gross Spread (NIM/Int Income) Income/ expense ratio Times Return on average equity (ROE) Return on average assets (ROA) Return on Capital Employed (ROCE) Earnings per share (EPS Rs. before tax) Earnings per share (EPS Rs. after tax) Advances/ deposits ratio (Gross) Advances/ deposits ratio (Net)

2009 55.91% 69.31% 3.84 27.35% 3.25% 27.35% 33.50 22.42 73.37% 68.89%

2008 63.80% 71.13% 4.10 31.49% 3.60% 31.49% 31.64 22.25 82.64% 79.39%

(8)
(8.1)Recommendations
In the light of above given SWOT analysis, in the following lines I shall put forth some of the measures MCB Limited should necessarily take in the near future. The following recommendations include short term as well as long-term issues.

44

MCB Limited should continue to expand its business, by increasing its deposit portfolio through aggressive market penetration strategies. MCB Limited needs to use more marketing channels to make the public aware of its products and services. In the presence of intense competition MCB Limited has to realize the importance of marketing. MCB Limited should immediately improve its Information Technology System. The soft wares currently in use should be made error free. Management should distribute work equally among different employees. Some of the employees are overburdened while some sections are overstaffed. There are a disproportionate number of seasoned bankers in the top management who have the responsibility of making strategic decisions. They should also include a reasonable proportion of young bankers whose mindsets teem with new creative ideas, which might prove to be invaluable for MCB Limited. One of the most pressing needs of the time is to advertise MCB Limited in the electronic media. MCB Limited has not, till date, employed advertisement in electronic media as a full fledge marketing tool. I think it is high time that BAL does this. MCB Limited needs to improve its website. More information relating to financial performance of the bank should be available on the website. MCB Limited should evolve a very serious management policy to attract multinational corporations as its clients. This action, if actualized, would not only prove to be highly profit generating, but it would also contribute a lot towards MCB Limiteds image building. The number of women hired by MCB Limited is very less. MCB Limited should employ more women. Moreover it should also recruit women for working in Credits Presently, like most of the commercial banks working in Pakistan, a high percentage of Bank MCB credit client hail from two or three industrial sectors. MCB should make makes work teams in Credits like other banks such as ABN AMRO and City Bank. It will have a positive impact on the morale of employees. Their performance will improve as a result of distribution of work and responsibility. And it will also enable the bank to hire talented women in the Credits as well.

(8.2)Conclusion:
Practical Training Program, spanning across twelve weeks, does a world of good for the students, as it enables them to have a glance into the organization, which they plan

45

to join in the near future as managers. At this point it certainly is significant to write a word of gratitude for the institutes administration, which makes it sure, that all the students get an exposure to practical life in relatively well-reputed organizations.I must underscore the fact that writing this internship report was an evenly memorable experience as actually doing the internship. I honestly tried my level best to come up with an original piece of writing that could serve as a vivid proof of the fact that students at UOG are certainly no mug at what they do. I truly hope that this report also certifies the fact that all of my worthy teachers performed their duties of academic guidance and moral mentoring with utmost efficiency and effectiveness. It is evident from this report and the financial statements of MCB that it is making progress by leaps and bounds. The profits of MCB have grown considerably during the last few years and this trend is expected to continue into the future. Therefore, we conclude that MCB has a very prosperous present and future, which assures the shareholders of wealth maximization.Side by side of it I think that if bank would be able to cover and control on the above mentioned recommendations then it would be in such a situation that will really lead it towards the road of prosperity, development and integrity. And with the above mentioned sentences I think there is also a fault of the customers and in order to make the proper working of the bank the customers should also cooperate with the bank which will be really a good, ambitious and diligent condition for the bank. And then bank will be really in such a situation and position to compete its competitors in the country as well as on international level.I hope that this report enables me to keep a memory of those days at the Bank when after a few years I read this report.

46

(8.3)References:

Introduction: http://mcb.com.pk/mcb/about_mcb.asp Vision / Mission: http://mcb.com.pk/mcb/mission_vision.asp Corporate information: http://mcb.com.pk/mcb/corporate_information.as Financial Statement: Google.com.pk Ratios: Analysis of Financial Statement by Charles. P. Jones

47

48