MCB Internship Report of Hafizabad Xeeshan Bashir

DEPARTMENT OF BUSINESS ADMINISTRATION, UOS
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Zeeshan Bashir
Roll No: 10-035
Session: 2010-2014
Xeeshan035@gmail.com
Date: 28-04-2014
University of Sargodha


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Banking sector owes a pivotal importance in the economy of any country through its variant
functions. This basic motivator that stressed me to join any bank for Internship Training.
Moreover, the experience and practice learned during this tenure also prove very helpful and
facilitating in the forth coming professional life.
This report is the result of 6 weeks Internship in Muslim Commercial bank, Railway Road
Branch Hafizabad. The motive behind selecting this bank is that it is one of the Top 10 Banks
of Asia. The fact remains that Muslim Commercial bank, possess an excel/cut and historical
importance being the most senior and leading in terms of fluids and services to Pakistan at all
ages of life.
I had with the strong belief that this report will guide and facilitate the readers to understand
the functioning of banking system and more importantly have good knowledge about Muslim
Commercial Bank. My utmost efforts to elaborate this report wit, material read, listened and
observed. Yet, I feel that this period was not long enough to learn and understand the complex
and widespread functioning of banking sector. I am really thankful to the entire staff members
of the aforesaid branch for the friendly and cooperative behavior during my internship.

Zeeshan Bashir
MBA (Finance)
Roll No. 10-035


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First of all I would like to thanks to Allah on this occasion.
I also want to show my gratitude to my loving parents and humble teachers who make me
able to be at this position.
I also thankful to all the staff members at MCB Railway Road Branch Hafizabad, especially
the Manager Mr. Furqan Saleem Danish.
I also want to dedicate whole of my education along with my life to my beloved parents and
respected teachers, who were always kind to me. May Allah Bless Them (Aamin).

Zeeshan Bashir


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EXECUTIVE SUMMARY
MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid
foundation in Pakistan, with a network of over 1150 branches, with 9397 permanent employees
over 900 of which are Automated Branches, over 495 MCB ATMs in 55 cities nationwide and
a network of over 12 banks on the MNET ATM Switch.
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.
During my internship in MCB I worked in different departments like general banking
department and learned the procedure of cheque at counter, payment of cheque and issuance
of Demand Draft also worked in the account department and Clearing Department and
Customer Service Office department and I successfully completed all the task/duties that were
assigned to me.
I also learned banks correspondence with their customers and within branches. I
learned about documentation requirements and record keeping for different activities and
processes, especially the documentation requirement for different kinds of financing facilities.


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Table of Contents
Sr. No. Title Page No.
1 Preface 3
2 Acknowledgement & Dedication 4
4 Executive Summary 5
5 Table of Content 6
6 Industry Introduction 8
7 Overview of the Organization 11
8 Vision 13
9 Mission 13
10 Products and Services 14
11 Core Values 22
12 Awards of MCB 23
13 Principles of Performance 24
14 Competitors 25
15 Organizational Structure 26
16 Main Offices 27
17 Main Departments 35
18 General Banking Department
19 Advance/ Load Department
20 Exchange Department
21 Work as an internee 41
22 Financial Analysis 46
23 Balance Sheet (From 2009-2013) 46
24 Profit & Loss Account (From 2009-2013) 47
25 Common size Analysis 49
26 Vertical Analysis of Balance Sheet 49
27 Vertical Analysis of Income Statement 50
28 Comments on Vertical Analysis 51
29 Horizontal Analysis of Balance Sheet 53
29 Horizontal Analysis of Income Statement 54
30 Comments on Horizontal Analysis 55
31 Ratio Analysis 56
32 Current Ratio 56


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33 Quick Ratio 58
34 Cash Ratio 60
36 Interest Coverage Ratio 61
37 Working Capital 62
38 Debt Ratio 64
39 Return on Assets 66
40 Return on Deposits 67
40 Cash/ Deposits 68
41 Average Profit per Branch 69
42 Comments on Ratio Analysis 71
43 SWOT Analysis 74
44 Conclusion 75
45 Recommendation 76
46 Limitations 77
47 References 77


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Industry Introduction (organization business sector
introduction):
The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank. This
history of banking is traced to as early as 2000 B.C. The origin of banking is also traced to
early goldsmiths. They used to keep strong safes for storing the money and valuables of the
people. The first stage in the development of modern banking, thus, was the accepting of
deposits of cash from those persons who had surplus money with them.
Banks play very important role in the economy of any country. The health of the economy is
closely related to the soundness of its banking system. Although banks create no new wealth
but their borrowing, lending and related activities facilitate the process of production,
distribution, exchange and consumption of wealth. In this way they become very effective
partners in the process of economic development. Today modern banks are very useful for the
utilization of the resources of the country. The banks are mobilizing the savings of the people
for the investment purposes. If there would be no banks then a great portion of a capital of the
country would remain idle.
Banking is generally a highly regulated industry. A bank is a financial intermediary. Financial
intermediary means is an entity that connects surplus and deficit agents. The economic
functions of banks include, issue of money, netting and settlement of payments, credit
intermediation, credit quality improvement, maturity transformation etc.
The first modern bank was founded in Italy in Genoa in 1406. Modern banks are playing lots
of new roles and making life of common consumer as well as business men easy.
Modern Banks now do investing, lending, brokerage, real estate, borrowing, advisory and
many functions in a very systematic manner giving the community lives in countries a new and
advanced and obviously a very better look.


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From a historical standpoint, the recent growth of international banking can be regarded as a
reversion to the situation before World War I when European banks dominated the world
capital market.
Since international trade is closely related to international banking, volume of international
trade (imports and exports together) is a determinant of the growth of international banking
and the relationship is direct. From 1960 onwards globalization of capital market started and
the emergence of surplus in petro-dollars in the seventies gave the much needed liquidity to
the international banking business.
HISTORY OF BANKING IN PAKISTAN:
At the time of independence, commercial banking facilities were provided fairly well here.
There were 487 offices of schedule banks in the territories now constituting Pakistan. An Expert
committee was appointed. The committee recommended that the reserves bank of India should continue
their function in Pakistan until 30 September. 1948, and Pakistan would take over the management of
public debt and exchange control from reserve bank of India on April 1948 and that Indian notes would
continue to be legal tender in Pakistan until 30 September 1948. Moreover the banks including those
having their registered office in Pakistan transferred them to India in order to bring a collapse of a new
state. By 30 June 1948 the number of the offices of scheduled banks in Pakistan declined from 487 to
only 195.In order to make necessary arrangement for the assumption of control and expert committee
was appointed to recommend necessary steps, including the required legislation to establish a central
bank for Pakistan. The governor-general of Pakistan Quaid-i-Azam Muhammad Ali Jinnah inaugurated
the State Bank of Pakistan order was promulgated on May 12, 1948. The first Pakistani notes were
issued in October 1948 in the State Bank of Pakistan withdrew the reserves Bank of India notes of the
value of Rs. 125.02 crores with the help the Pakistan notes.
On 1st January, 1947 all Pakistani banks were nationalized through Nationalization Act 1974.
Under this law all Pakistani Banks become a pubic property. All small banks were merged in bigger
banks to create five major Pakistani banks. These banks were to control by Pakistani Banking Council.
There are still controversies about this act of Govt. as whether it contributed in success of failure of
banks. However the major changes after Nationalization were as follows:
Working of banks was extended to under-developed areas.
Market expansion for credit and deposits.
Decrease in service level of bank officers.


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Decrease in profitability as well.
In 1990 the govt. decided to denationalize all the nationalized institutions. Same was also suggested
in banking sector. For this purpose, amendments were made to Nationalization Act 1974 and two
nationalized banks were privatized. Along with this a permission to open banks in private sector was
also granted. The rules regarding establishment of new banks and for incoming foreign banks were also
relaxed. The two privatized banks are: MCB taken up by a private group in April, 1991 & ABL taken
up by its own employees in September, 1991. After these changes a large number of private and foreign
banks started their operation in Pakistan
Now, Pakistan has a well-developed banking system, which consists of a wide variety of institutions
ranging from a central bank to commercial banks and to specialized agencies to cater for special
requirements of specific sectors. The country started without any worthwhile banking network in 1947
but witnessed phenomenal growth in the first two decades. By 1970, it had acquired a flourishing
banking sector.
Pakistan's banking sector has remained remarkably strong and resilient during the world
financial crisis in 200809, a feature which has served to attract a substantial amount of FDI in
the sector. Stress tests conducted on June 2008 data indicate that the large banks are relatively
robust, with the medium and small-sized banks positioning themselves in niche markets.
Banking sector turned profitable in 2002. Their profits continued to rise for the next five years
and peaked to Rs 84.1 ($1.1 billion) billion in 2006.
Commercial Banks:
The banks in any country speeded over with an objective to get the excessive money from the public in
the form of deposits and providing finance to the investors. These Banks are in the ground for profit
earning motive and in competition with each other. These banks are providing the basic services to the
customers in the form of deposits, Advances, remittances and others.


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Classification of Commercial Banks:
Mode of Classification Types of Banks
A.

Classification on the basis of Function i. Central Bank
ii. Commercial Bank
iii. Exchange Bank
iv. Saving Bank
v. Agricultural Bank
vi. Industrial Bank
B. Classification on the basis of Owner
ship
i. Public Sector Bank
ii. Private Sector Bank
iii. Cooperative Bank

C. Classification on the Basis of Domicile i. Domestic Bank
ii. Foreign Bank
D. Classification on the Basis of
Registration
i. Scheduled Bank
ii. Non-Scheduled Bank
E. Other Banks i. Charted Bank
ii. Investment Bank
iii. Mortgage Bank

Functions of Commercial Bank:
Borrowing money from the customer in the shape of Term deposits (PLS saving current
deposits and Notice deposits).
Lending of money to borrowers in shape of finances, short-term finances, and long-
term finances under various names such as Demand Finance, Small Finance, and Cash
Finance.
Agency services.
Remittance of money
Foreign exchange business, foreign currency deposits. LCS, Imports and exports etc.


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An overview of the Organization:
MCB is one of the leading banks of Pakistan with a deposit base of Rs. 368 Billion and total
assets over Rs.500 Billion. Muslim Commercial Bank (MCB) unfolds 52 years of growth.

MCB Past:
The bank incorporated in Calcutta on July 9, 1947, MCB soon earned the reputation of a solid
and conservative financial institution managed by expatriate executives. In 1956, the Bank
transferred its registered office to Karachi, where the Head Office is presently located. In 1974,
MCB was nationalized along with all other private sector banks.

Privatization:
In April 1991, MCB became Pakistans first privatized bank. MCB was the first to be privatized
upon recommendations of World Bank and IMF. The government of Pakistan transferred the
management of the Bank to National Group, a group of leading industrialists of the country by
selling 26% shares of the bank. In terms of agreement between the Government of Pakistan
and the National Group, the group, making their holding 50% has purchased additional 24%
shares. Now, 25% is purchased by the Government, which shall be sold in the near future. .
MCB is a bank that has grown with time, experience and Pakistan.
(After privatize the MCB the important development in the history of Bank is the Introduction
of Rupee Traveler Cheques & Photo Credit Card for the first time in Pakistan)
MCB Present:
The Bank has a customer base of approximately 4 million, a nationwide distribution network
of over 1,000 branches and over 450 ATMs in the market. 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.
A major achievement of MCB is that the state bank of Pakistan has issued a license to MCB to
start Islamic banking.
Extended use of information technology which is evident from the fact that there are 768 fully
automated branches, more than 250- online branches (integrated networking), 151 ATMS in
27 cities nation-wide and a M.C.B continuously innovate new product.


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MCB Future:
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 product.
MCB claims that we are a team of committed professionals, providing innovative and efficient
financial solutions. MCB future will bright that an important steps towards the success of the
Pakistani economy.

The Vision of MCB is
To be the leading financial services provider, partnering with our customers for
a more prosperous and secure future.

The Mission Statement of MCB is
We are a team of committed professionals, providing innovative and efficient
financial solutions to create and nurture long-term relationships with our customers. In
doing so, we ensure that our shareholders can invest with confidence in us.
Strategic Objectives
Delivering remarkable returns to stakeholders, sustainable performance, exceeding
market and shareholder expectations.
Providing value added services through operational expansion, geography and
upgraded systems.


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Building a corporate culture of equality, trust and team spirit as we remain dedicated to
be a socially responsible organization.
Connecting dots to prosperity:
We understand that the little decisions in our daily life eventually change our overall state of
existence. You are working hard to ensure that your future is prosperous. MCB is marching
right next to you, helping you with each decision, ensuring a state of afuence and abundance
in your life with our efforts.
Connecting dots to Happiness:
Your relationship with MCB helps you enjoy a unique happiness that only a reliable and
vigilant banking solution can give. We are working day and night to identify the next dot that
brings you closer to a joyous life.
Connecting the Dots to Security
Life is often unpredictable. For any unexpected turns that it might take, MCB works out
efficient plans to help keep your tomorrow secure and give you greater independence with
however you wish to design your life.
PRODUCTS AND SERVICES
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.


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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.
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.


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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:
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.
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 Car 4u:
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


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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.
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 much-needed 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.


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


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MCB Mobile Banking:
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.
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 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.


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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.

Capital Growth Certificate Scheme:
For long term depositors under which the amount deposited almost doubles at the end of 5
years. For the scheme, the minimum amount of deposits is Rs. 10000 while there is no
maximum limit. In case of premature encashment of the certificate, the depositor will profit at
the same rates as that of PL Saving Account.
Fund Management Scheme:
This scheme is offered to corporate and customers and is aimed at providing better rate of
return up to 15% per annum. One of the objectives of the scheme is to develop secondary
market for Government Securities.
Consultancy Services:
In the process of privatization of public sector units, prospective buyers need professional
assistance and MCB, with its expertise, offers to them specialized service for valuation of the


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market value of the industrial unit, preparing bid documents and arranging finance for the
purchase of the unit.
Self Supporting Scheme:
For the benefits of genuine worker/borrowers who are poor and needy and for small
entrepreneur the bank as evolved a self supporting scheme: maximum amount of loan Rs.25000
and minimum Rs.5000 per individual. Loan will be totally free of mark-up.
Fax Press:
This product was first of its kind introduced by using modem
technology of The Fax Machine. It facilitates speedy transfer of funds
within Pakistan. The service guarantees transfer of from one city to
another, within an hour.
Night Banking Service:
For the convenience of the account holder, service has, especially, been introduced at busy
commercial centers. Traders and other clients can now make deposit, with case, at such centers
up to 8.00PM.
Utility Bill Collection:
With the aim of extending this service to wider range of customers, the number of MCB
branches collecting Utility Bills more than 900.
MCB Mobile Banking:
At the forefront of technological excellence, MCB proudly introduces MCB MOBILE
BANKING*. The convenience of accessing account balance information and mini statements
whenever want or wherever may need them, with comfort and peace of mind. MCB Mobile
Banking service is available to all MCB ATM cardholders, 24 hours - 365 days.


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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
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

Hajj Mubarak Scheme:
A saving scheme, of 2/3 years duration, for the convenience of persons, with a limited income,
who desire to perform Hajj was introduced.Under the 2 years scheme, a monthly deposit of
Rs.1800 is required, whereas under the 3 years scheme, the required monthly deposit is only
Rs.1200
MOBILE BANKING AT A GLANCE:
MCB Mobile Banking gives easy and quick access to account(s) at a time find convenient,
including all holidays.


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Core Values
INTEGRITY
We are the trustees of public funds and serve our community with integrity. We believe
in being the best at always doing the right thing. We deliver on our responsibilities and
commitments to our customers as well as our colleagues.
RESPECT
We respect our customers values, beliefs, culture and history. We value the equality of
gender and diversity of experience and education that our employees bring with them.
We create an environment where each individual is enabled to succeed.
EXCELLENCE
We take personal responsibility for our role as leaders in the pursuit of excellence. We
are a performance driven, result oriented organization where merit is the only criterion
for reward.
CUSTOMER CENTRICITY
Our customers are at the heart of everything we do. We thrive on the challenge of
understanding their needs and aspirations, both realized and unrealized. We make every
effort to exceed customer expectations through superior services and solutions.
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.
Awards of MCB:

MCB has become the only bank to receive the Euromoney award for the seventh time and
Asiamoney award for fifth time in the last ten years.


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MCB won Best Bank in Asia award in 2008. MCB also won the "Best Bank in Pakistan".
Best Bank award 2008
MCB also won the
Best Domestic Bank in Pakistan awards 2000
In addition, MCB also has the distinction of winning the Asia Money awards for being
"The Best Domestic Commercial Bank in Pakistan".
Best Domestic Commercial Bank award 2005
Best Domestic Commercial Bank award 2004
PRINCIPLES OF PERFORMANE:
Customer Focus:
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


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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 in-depth 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:
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.
Competitors:
1. MCB Bank, Rawalpindi
2. Atlas Bank, Karachi
3. Bank AL Habib, Karachi
4. Bank Alfalah, Karachi
5. Bank Islami Pakistan Limited, Karachi
6. Barclays Bank, Karachi
7. Faysal Bank, Karachi
8. Habib Bank, Karachi
9. Habib Metropolitan Bank, Karachi
10. KASB Bank, Karachi
11. NIB Bank, Karachi
12. Royal Bank of Scotland
13. Silk Bank formerly Saudi Pak Non-Commercial Bank, Karachi
14. United Bank, Karachi


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15. Bank Of Punjab, Lahore
16. Summit Bank, Karachi
17. Allied Bank of Pakistan, Karachi
Organizational Structure:


27
Main Offices:
Principal Office:
MCB 15 Main Gulberg, Lahore
Registrar's and Share Registration Office:
MCB 15 Main Gulberg, Lahore
M/s. THK Associates (Pvt.) Limited
State Life Building No.3,
Dr. Ziauddin Ahmed Road
Karachi.
Circle Offices:
CIRCLE OFFICE COMMERCIAL - KARACHI CITY (5027)
2nd Floor, Mehdi Tower, 115/ A, Shahrah-e-Faisal, Karachi.
Contact # 021 - 34329048
CIRCLE OFFICE COMMERCIAL - KARACHI EAST (5003):
Mezzanine Floor, Mehdi Tower, 115/A, Shahrah-e-Faisal, Karachi.
Contact # 021 - 34554412
CIRCLE OFFICE COMMERCIAL - KARACHI WEST (5002):
Adamjee House, Mezzanine Floor, I.I. Chundrigar Road, Karachi.
Contact # 021 - 32414683 / 021 - 32427932
CIRCLE OFFICE COMMERCIAL - HYDERABAD (5011):
A/97, Latifabad No.3, Hyderabad.
Contact # 022 - 3865848


28
CIRCLE OFFICE COMMERCIAL - QUETTA (5019):
Near Arts Council, M.A. Jinnah Road, Quetta.
Contact # 081 - 2841272 / 081 2836224
CIRCLE OFFICE COMMERCIAL - BAHAWALPUR (5109):
4-A Qasim Road, Model Town, Bahawalpur.
Contact # 062 - 2889858
CIRCLE OFFICE COMMERCIAL - MULTAN (5303):
3rd Floor, MCB Building, 59-A, Abdali Road, Multan.
Contact # 061 4508300
CIRCLE OFFICE COMMERCIAL - SUKKUR (5024):
Near Mehran View Plaza, Bunder Road, Sukkur.
Contact # 071 - 9310151
CIRCLE OFFICE COMMERCIAL - LAHORE (5013):
5th Floor, MCB 15-Main, Gulberg, Jail Road, Lahore.
Contact # 042 - 36041515 / 042 - 36041516
CIRCLE OFFICE COMMERCIAL - FAISALABAD (5009):
Bank Square, Circular Road, P.O. Box No.175, Faisalabad.
Contact # 041- 2617298 / 041 - 2627171
CIRCLE OFFICE COMMERCIAL - GUJRANWALA (5010):
Trust Plaza, G.T. Road, Gujranwala.
Contact # 055 - 3251148
CIRCLE OFFICE COMMERCIAL - SARGODHA (5022):
400-Club Road, Sargodha.


29
Contact # S048 - 3722929
CIRCLE OFFICE COMMERCIAL - ISLAMABAD (5012):
MCB Building, Ist Floor, F-6/G-6, Jinnah Avenue 28, Blue Area, Islamabad.
Contact # 051 - 2801043
CIRCLE OFFICE COMMERCIAL - JHELUM (5120):
10-Civil Line, Opposite District Nazim Office, Jhelum City.
Contact # 0544 - 629504
CIRCLE OFFICE COMMERCIAL - PESHAWAR (5018):
Cantonment Complex, Fish Plaza, Fakhr-e-Alam Road, Peshawar Cantt.
Contact # R091 - 5273675 / 091 - 5276843
CIRCLE OFFICE COMMERCIAL - ABBOTTABAD (5107):
199, Kala Pul Murree Road, Abbottabad.
Contact # 0992 333475
Regional Offices:
REGIONAL OFFICE COMMERCIAL - KARACHI CITY
2nd Floor, Mehdi Tower, 115/A, Shahrah-e-Faisal, Karachi.
Contact # 021 - 34329053
REGIONAL OFFICE COMMERCIAL - KARACHI NORTH:
2nd Floor, Mehdi Tower, 115/A, Shahrah-e-Faisal, Karachi.
Contact # 021 - 34329052
REGIONAL OFFICE COMMERCIAL - KARACHI EAST:
Contact # 021 - 34550542


30
REGIONAL OFFICE COMMERCIAL - KARACHI SOUTH:
Contact # 021 - 34550542
REGIONAL OFFICE COMMERCIAL - KARACHI CENTRAL:
Contact # 021 - 32432529
REGIONAL OFFICE - KARACHI WEST:
Contact # 021 - 32415003 / 021 2469018
REGIONAL OFFICE COMMERCIAL HYDERABAD:
A/97, Latifabad No.3, Hyderabad.
Contact # 022 - 3865981
REGIONAL OFFICE COMMERCIAL NAWABSHAH:
A-97 Latifabad No.3, Hyderabad.
Contact # 022 - 3869787
REGIONAL OFFICE COMMERCIAL - MAKRAN (5112):
Jinnah Avenue Branch Building, Opp. Javed Complex, Airport Road, Gwadar.
Contact # 0864 - 211325
REGIONAL OFFICE COMMERCIAL BAHAWALPUR:
4-A Qasim Road, Model Town, Bahawalpur.
Contact # 062 - 2886794
REGIONAL OFFICE COMMERCIAL - RAHIM YAR KHAN (5157):
Model Town, Rahim Yar Khan.


31
Contact # 068 5881327
REGIONAL OFFICE COMMERCIAL - VEHARI (5148):
240 Nothern Block, Main Road, Sharqi Colony, Vehari.
Contact # 067 - 3362763
REGIONAL OFFICE COMMERCIAL - DERA GHAZI KHAN (5111):
MCB Building, 1st Floor, Microwave Tower, College Road, Dera Ghazi Khan.
Contact # 064 - 2464022
REGIONAL OFFICE COMMERCIAL MULTAN:
3rd Floor, MCB Building, 59-A, Abdali Road, Multan.
Contact # 061 - 4508301
REGIONAL OFFICE COMMERCIAL - SAHIWAL (5021):
Mission Chowk, Jinnah Road, Sahiwal.
Contact # 040 - 4465503
REGIONAL OFFICE COMMERCIAL LARKANA:
Contact # 071 9310912
REGIONAL OFFICE COMMERCIAL SUKKUR:
Contact # 071 - 9310152
REGIONAL OFFICE COMMERCIAL - LAHORE CENTRAL:
Contact # 042 - 36041580


32
REGIONAL OFFICE COMMERCIAL - LAHORE CITY:
Contact # 042 - 36041577 / 042 - 36041578
REGIONAL OFFICE COMMERCIAL - LAHORE EAST:
Contact # 042 - 36041511
REGIONAL OFFICE COMMERCIAL - LAHORE WEST:
Contact # 042 - 36041552 / 042 - 36041553
REGIONAL OFFICE COMMERCIAL - FAISALABAD CITY:
Bank Square, Circular Road, P.O. Box No.175, Faisalabad.
Contact # 041 - 2604913
REGIONAL OFFICE COMMERCIAL - SHEIKHUPURA (5142):
MCB Building, Lahore-Sargodha Road, Sheikhupura.
Contact # 056 - 3614242 / 056 - 3783828
REGIONAL OFFICE COMMERCIAL GUJRANWALA:
Trust Plaza, G.T. Road, Gujranwala.
Contact # 055 3259806
REGIONAL OFFICE COMMERCIAL - GUJRAT (5116):
G.T. Road, Opp. Fruit Market, Gujrat.
Contact # 053 - 3520649 / 053 - 3520347
REGIONAL OFFICE COMMERCIAL - SIALKOT (5023):
CC & I Building, Paris Road, Sialkot.


33
Contact # 052 - 4272886 / 052 - 4265223
REGIONAL OFFICE COMMERCIAL - JHANG (5119):
Nawaz Chowk Moza Civil Station, Jhang Saddar.
Contact # 047 - 7620092 / 047 - 7613041
REGIONAL OFFICE COMMERCIAL - MIANWALI (5129):
PAF Road, Mianwali.
Contact # 0459 - 235575 / 0459 - 230112
REGIONAL OFFICE COMMERCIAL SARGODHA:
400-Club Road, Sargodha.
Contact # 048 - 3724130
REGIONAL OFFICE COMMERCIAL - CHAKWAL (5008):
BH-9/995, Girls College Road, Chakwal.
Contact # 0543 - 541399
REGIONAL OFFICE COMMERCIAL ISLAMABAD:
MCB Building, Ist Floor, F-6/G-6, Jinnah Avenue 28, Blue Area, Islamabad.
Contact # 051 2801012
REGIONAL OFFICE COMMERCIAL - RAWALPINDI (5140):
Al-Gilan Building, Satellite Town, Murree Road, Rawalpindi.
Contact # 051 - 4571265
REGIONAL OFFICE COMMERCIAL - JHELUM (5120):
10-Civil Line, Opposite District Nazim Office, Jhelum City.
Contact # 0544 - 629504


34
REGIONAL OFFICE COMMERCIAL - MUZAFFARABAD A.K. (5017):
Bank Square, Chatter Domel, Azad Kashmir.
Contact # 05822 - 921257
REGIONAL OFFICE COMMERCIAL - KOHAT (5121):
House No.101, Sector 4, Opposite Circuit House, Kohat Development Authority, Kohat.
Contact # 0922 - 515220 / 0922 - 515225
REGIONAL OFFICE COMMERCIAL - MARDAN (5128):
1ST Floor, The Mall Branch, Mardan.
Contact # 0937 - 870614
REGIONAL OFFICE COMMERCIAL PESHAWAR:
Cantonment Complex, Fish Plaza, Fakhr-e-Alam Road, Peshawar Cantt.
Contact # 091 - 5275683
REGIONAL OFFICE COMMERCIAL ABBOTTABAD:
199, Kala Pul Murree Road, Abbottabad.
Contact # 0992 - 344465
REGIONAL OFFICE COMMERCIAL - ATTOCK (5108):
1564, Afzal Shaheed Road, Attock Cantt.
Contact # 057 - 2610041
REGIONAL OFFICE COMMERCIAL - SWAT (5145):
Main Bazar, Mingora, Swat.
Contact # 0946 - 711772
WHOLESALE BANKING OPERATIONS:
2nd Floor, MCB 15 Main Gulberg, Lahore.


35
Contact # 042 - 36041220
ISLAMIC BANKING GROUP:
MCB Building, F-6, G-6, Blue Area, Jinnah Avenue, Islamabad.
Contact # 051 - 2801273
PRIVILEGE BANKING (5373):
Plot 11-C Khayaban-e-Shahbaz Lane No.1, DHA, Karachi.
Contact # 02` - 35240417 / 021 - 111 000 - 111 Ext - 4618
MAIN DEPARTMENTS AND THEIR JOBS:
There are three main departments in any branch of MCB
1) GENERAL BANKING
2) FOREIGN EXCHANGE
3) ADVANCES/CREDIT
1) GENERAL BANKING
General banking deals with following services:
REMITTANCE
It is transfer of funds. Funds can be transferred in shape of pay orders, demand draft,
mail telegram and telegraph transfer. Payments of fees of different organizations, fulfillment
of tenders, and collection of funds are the main functions of remittance. Maximum part of
general banking depends on this department.
Issuance of different kinds of remittance:
PAY ORDER
Pay order is the property of person/company that has to take the benefit of the amount
being pay ordered by the concerned person. Pay orders are made for the payment of fees, tender
or issued for the payments of dealings. These are required for the proof of payments made
between the bank and the customer in the favor of beneficiary. These are noted in printed block
letters and yearly serial numbers are issued from computerized system.


36
DEMAND DRAFT
Demand drafts are made for the beneficiary for payments, funds etc, these are made for
outstation branches of the concerned banks. An advice is also made for the confirmation of the
draft send. These are also approved and safe way of sending amount to the beneficiary. These
are also noted by computerized system and a serial number is issued from the computer system.
MAIL TRANSFER
Mail Transfer is made with in the city for transfer of amount. An advice is also made for the
confirmation of the draft send. These are also approved and safe way of sending amount to the
beneficiary. These are also noted by computerized system and a serial number is issued from the
computer system.
TELEGRAPHIC TRANSFER
Telegraph Transfer is telegram message for transferring the amount from one branch to other
branch. A message advice and a confirmation advice both are made with TT numbers that are issued
for TEST. TEST depends on two steps:
First TEST is on Day, Date and Code Number of branch.
Second TEST is on Currency, whether Pak rupees or foreign currency, amount and TT number issued
from manual registers and confirmed from computerized system.
PAYMENT OF PAY-ORDER AND DEMAND DRAFT
Pay-Order and Demand Draft both could be paid in shape of physical payment of cash and in
case transfer of amounts; the amount could be transferred in the beneficiary account. In case of physical
payment authorized signature of beneficiary are taken for the proof of amount being paid to him and in
case of transferring of amount authorized signature of the beneficiary are checked and verified for
reducing risks.
CANCELLATION OF PAY-ORDER AND DEMAND FRAFT
Any type of Pay-Order / Demand Draft is cancelled by the permission and instructions made
by the beneficiary. The customer could only cancel the pay order/ demand draft as the verified
signatures of beneficiary are present on the advice.
VOUCHERS
Vouchers are made for records and they should be completed in all respects, the amount, date,
its head, particulars, amount in words, authorized signatures and contra advice or voucher should be
present. Vouchers are advice either debit or credit slips. They are contra of each other. If any voucher


37
of debit is passed its contra credit voucher should also be passed for the balancing of accounts, their
respective sheets.
INWARD CLEARING
It depends on those checks that are cleared inter branch and with in the city. As the concerned
branch receive any type of clearing check first of all physical checking is taken place. For clearing
procedure there should be two days margin. These cheques have their vouchers and the amount of the
cheque and voucher should be identical. Than these cheques are stamped and noted on receiving sheet
as well as feed in to the computerized system.
OUTWARD CLEANING
It depends on those cheques that are cleared outside the city. For outward clearing cheques are
send because the home branch has their accounts but checks are of other banks. Contras of these cheques
are vouchers that are recorded in the home branch.
ISSUANCE OF CHEQUE BOOKS
Any account holder that has opened the account he/she could credit his/her account and for this
purpose there should be a cheque book, so he/she could be able to credit the needed amount whatever
he/she wishes. For the issuance of the cheque book a person is advised to fill a requisite slip with his/her
full names and the account number with two verified signatures. These signatures are checked and then
another requisite slip prepared by the bank staff send to the NIFT, and it issues the printed cheque books
after completion of the procedure in two or three days.
Account holder can take it by singing on the issuance register or if the absence of the account holder
another person could also take the cheque book only if he/she has authorized signature of the account
holder. When the cheque books are issued they are feed in the computer system from the requisite slip
so when the cheques are given for the credit/transfer of amount they could checked. In this way neither
the cheques could be repeated nor could the invalid cheques be claimed.
ISSUANCE OF ATM CARDS
Head office issues ATM (Auto Teller Machine) cards with their PIN (Personal Identification
Number) codes and when the customer claims for their ATM card they are checked from the list that is
also issued from the head office, and the claim is checked from the list and if the name is found than
the cards are issued by taking a signature and their PIN codes are given to them by taking signatures on
their ATM card forms. The ATM card has been activated by the number provided at or with the specific
card.


38
CANCELLATION OF ATM CARDS
The Cancellation of ATM Cards becomes necessary in the following conditions:
If folded or damaged
Stolen
PIN code missed or forgotten
Card captured by the machine and expired
If requested by the customer
The cancellation or inactivity of the card is being processed by the request or
instructions provided from the customer.
SHORT NOTICE TERM DEPOSIT
There are short times either for seven days or for thirty days and the profit is calculated by the
given percentage from the head office at the payment time. If the customer fails to complete the duration
of seven days or thirty days then no profit is given. If any amount is outstanding, only in case of
automatic continuity, then the profit is calculated for the whole period by the rate given from the head
office multiplying from the numbers of days divided by the 365 for the one-day profit.
AMOUNT, RATE, NUMBER OF DAYS / 365 DAYS
Profit is calculated for the six months only for outstanding SND. Zakat is also deducted but if
Zakat deduction form is submitted to the bank, no Zakat will be deducted then, 10% withholding tax is
also deducted from the profit to calculate net profit.
CALL DEPOSIT
It is highly liquid instrument; it can be cashed at any time when needed. This instrument bears
no profit on it. It is mostly used for the purpose of tenders.
2) FOREIGN EXCHANGE:
LCS ESTABLISHMENT
Any company can provide its documents containing e-form, bill of lading, short shipment
notice in case of short shipment, packaging list etc. the information provided from the documents is
recorded in the LC establishment portion or section in the computer.
PAYMENT OR RETIREMENT
When the transactions have been completed then approved documents from the
concerned bank are sent to the home bank for the payment or retirement of the LC.


39
These transactions have recorded in the payment or retirement section of the computer.
FOREIGN CURRENCY DEPOSITS
The Foreign Currency Deposit relates with the foreign currency accounts, cash deposit
or credit and foreign remittances.
FOREIGN REMITTANCES
In this we received the messages through SWIFT for foreign remittances, which we record in
their respective accounts, if these are relates with Pak rupees than it was transferred in Pak rupees with
the latest rate and if this relates to the foreign currency than it is dealt with accordingly. The amount
has been credited to the respective account and the head office has been debited against it. After
crediting the amount to the respective account. All the subsequent entries have been made in the
registers and also in the computer record as the system now have been upgraded on computers. As we
are reporting daily to the head office, so an annexure has been maintained and faxed to the head office.
ADVANCES / CREDIT
This department deals with the approval of different kinds of loans to different business
entities. The loans, which are being approved by the department, are kept with some securities
such as bonds, properties and any other type of asset, which is equally valuable or more than
this as a guarantee. Every branch has its own limit, if the amount of loans is with in the limit
of the branch then it is being approved by the branch but if the amount of loan is exceeding the
limit then it has to make it approved by the head office. In this case the branch stored all the
required papers and sent them to the head office for necessary action. If the head office
approved the loan then mostly the period contains a year. And if the party requires more loan
than after a year the loan has been re-approved required that they should have the limit. In case
if the head office do not approve the loans then the return letter came back with the reasons of
not approval of loan and if the reasons have been made approved by the concerned party then
it could be sent again for approval. This whole process is recorded in the back remain with the
bank until the party has not refunded all the amount of loan and bank has the authority to
liquidate those assets for preventing it from loss.


40
Types of Advances
MCB provides advances, which are of two types. These are as following:
i. Fund Based Advances
ii. Non Fund Based Advances
i) Fund Based Advances
Funds are given to customer according to their requirement against securities.
These loan are given specially to traders, business, small industrial units, including cottage
industries, agriculturists, thus ensuring an equitable distribution of bank credit among
various sectors of the countrys economy.
There are following types of advances, which are given to customer on fund basis.
i. Industrial loan
ii. Commercial loan
iii. Agricultural loan
i) Industrial Loan
Loans are given to industrial units including cottage industries up to or less than RS. 20
million. Loans and advances shall not exceed amount specified by marginal restriction on
the type of securities offered. Industrial loans are granted to the manufacturing section of
the economy including finance for fixed investments and working capital requirements of
small industries.
Loan Period
Loans are allowed for a maximum period of 5 years including a maximum grace period of
1 year. In special case up to 10 years also, depending upon the merit of the case.
ii) Commercial Loan
Total principal amount of loans to a single enterprise/borrower shall not exceed RS. 0.5
million. Maximum maturity is 3 years, depending upon the nature and type of advances,
decided upon case to case basis.


41
Mark-up
Both for commercial and industrial loan, mark-up will be charges as per existing rate,
subject to changes from time to time. Presently it is 0.51 RS per day per RS. 1000/-.
Mode of Repayment
Equal monthly, quarterly or half-yearly, repayment of principal and interest or as per term
of approval.
Securities and Margin
Loans can be made against any or more of the following securities mortgages of immovable
property (land and building), pledge of stocks, raw materials, and finished goods,
hypothecation of stocks, raw material, and finished goods, State bank of Pakistan
guarantee.
iii) Agricultural Loan
Bank provides the agriculture advances in order to enhance and support the agriculture
sector of the country. Banks Agriculture division deals with the agriculture advances.
These advances are of following types:
i. Farm Credit
ii. Non-Farm Credit
i) Farm Credit
These are the credits provided by the MCB or purchases of inputs for development of
agriculture sector. Following are two main Sub classes of Farm credit:
Production Finance
These are short term loans. These loans are provided to farmers for purchases of different
types of input, for example seeds, fertilizer, and pesticides.
WORK PERFORMED BY ME AS AN INTERNEE:
I joined Muslim Commercial Bank, Railway road Branch, Hafizabad 10
th
Feb 2014. First day
I reached there at 9O clock and reported to manager who introduced me about the functioning
of the branch and its staff.


42
Account Opening:
This department deals with retail banking i.e. opening customers accounts without opening an
account customer cannot operate in the bank. Once the account is opened relationship between
customer and bank is created.
Procedure for opening an account:
A person, who wants to open any kind of account, has to fill in a printed form which is
provided by the bank, free of cost. Separate account opening forms are used for different
types of accounts.
Bank usually requires that new depositor must be introduced by someone. An
introducer should be an employee of the bank. However, the manager can open the
account by his own introduction.
Bank provides 30 minutes for KYC document to customer to know income source.
If the manager is satisfied, it will obtain the full signature of the customer- on the
account opening form and specimen signature card, makes the first deposit, and issues
the cheque book after the confirmation TCS or post office receipt.
The following are given to the customers:
Pay-in-slip is the proof of deposit. For every payment which is to be deposited in the
bank, the pay-in-slip is to be filled up. The object of this book is to provide the customer
with the bank's acknowledgment for receipt of money to be credited this account.
Cheque Book contains a number of cheques. It enables a customer to make withdrawal
from this account or make payment of various parties by issue of cheque. Pass Book is
a copy of the customers account as appears in the books of the bank. Balance is
recorded in this book by the Clerk.
Documents:
Attested Copy of Computerized National Identity Card
Two attested photographs to be obtained in case of shaky signature and Thumb
Impressions (Right and Left Both Thumbs).
In case of salaried person, attested copy of his service card or any other acceptable
evidence of service.
In case of partnership attested copy of partnership deed duly signed by all the partners


43
Attested copy of registration certificate with registrar of firms in case partnership deed
is not registered.
Authority letter in original in favour of the person authorized to operate on the account
of the firm.
In case of joint stock companies certified copies of:
Memorandum and articles of association
Certificate of incorporation
Certificate of commencement of business
Attested photocopies of identity cards of all the directors.
GENERAL BANKING
First of all, I was asked to work in different sections of General Banking. Here I was attached
Mr. Bashir Ahmad who has good command on this section. Here we dealt with new customers
who wanted to get information about the branch and will to deal with the branch. This is a very
interesting department because here we met people of different types and deal with them
accordingly. In thi ssection,I observed the following functions:
CASH DEPARTMENT
The cash department is t he most import ant depart ment of the bank. It recei ves
cash from customers and t hen deposits it into the account s of the customers
and maint ained thei r MCB branches.
The offi cers in t his department are call ed tel ler and there were four tel lers at
the count er. Thi s depart ment i nvol ves in t wo activat es: -

Deposit cash i n cust omers account
Make payments from customers account

Deposit Cash In Customers Account:-
When the customer want to deposit amount in his account at opening of account
or aft er t hat t hen he has to fill a deposit sli p t hat shows the amount and the
account in whi ch t he cash will be deposit ed. Then tel ler will receive amount
and credit the cust omers account t hat shows increase in customers bank
account .


44

Make Payments From Customers Account: -
When t he customer draws a cheque on t he bank t o pay a certain amount then
tell er will debi t t he cust omers account t hat shows reduct i on in his account
MCB Bank branch.
There are two main t ypes of cheques t hat are
Open Cheques
Crossed Cheques

Open Cheques:-
Open Cheques are those cheques, whi ch are paid across the counter o f the bank.
Open cheques may be;
Bearer Cheques
Order Cheques.

Bearer Cheque:
If t he drawer orders the bank to pay a st ated sum of money t o the bearer, it i s
called a bearer cheque. Any person who lawful l y possesses a bearer cheque i s
entit led to receive payment of t hat cheque.

Order Cheque:-
The amount of this cheque is payable to t he person whose name is writt en on
the face of t he cheque. The amount is paid at count er aft er identificati on of
that person.

Crossed Cheque:-
The amount of t his cheque is not pai d at count er. The amount of t his cheque i s
transferred to the persons account whose name i s speci fied on the cheque. Two
parallel t ransverse li nes are drawn across the face of t he cheque.


45
Kinds Of Crossing:-
Legall y t here are two kinds of crossing
General Crossing
Speci al Crossing
General Crossing:
In case of General Crossing the payment can onl y be deposited into the payees
account onl y.

Special Crossing:
In case of Special Crossing the payment can onl y be made to bank named
therein t he cheque.

CHEQUE ENCASHMENT PROCEDURE
Cheque Encashment are made in four st eps, these are:
Recei ving Of Cheques
Veri fi cati on Of Signature
Comput er Terminal Process
Payment Of Cash

Receiving Of Cheques:
The cash is paid agai nst t he cheque of the cli ent. The foll owi ng poi nts are kept
in mind whil e receiving t he cheque from the cli ent.
Cheque is drawn on MCB BANK
Cheque is not post dat ed.
Amount i n words and fi gure are same.
It shoul d be a bearer cheque so the word bearer should not cross.

Verification Of Signature:
Aft er receiving the cheque t he cheque t he offi cer verify the signature of the
account hol der and t he signature on the cheque. If the si gnature is not same it
is ret urned back otherwi se forward to comput er termi nal.


46
Computer Terminal Process:-
The cheque is recei ved i n comput er t erminal , where the comput er operator
checks t he MCB Bank ance of the account hol der. The operat or also sees the
stop payment inst ructions are received from account holder or not . Aft er
considering these points computer operat or post the cheque in account holder
ledger and ret urned back to t he offi cer.

Payment of Cash:
Aft er posting the cheque the offi cer cancelled t he cheque and returned back to
cashi er. The cashier ent ers t he cheque in cash paid regi st ered and pay against
the second signat ure of recei ver on t he back of the cheque.
If t he payment i s of Rs. 50000 t he cashier can make it on its own. If the amount
is great er t han Rs. 50000 to Rs. 100, 000 the cashi er and cash deposit Inch arge
will veri fy the check and will sing it. Then the payment will be made. But, i f
the amount is great er t han Rs. 100000 t o Rs. 1000, 000 t he manager operation
will also veri fy t he check and sign it so t hat the payment can be made. If the
amount i s great er than Rs. 1000, 000 the Branch Manager will also verify the
check and si gn i t. Ot herwi se the payment will not be made.
CLEARING DEPARTMENT:
In clearing department we deal with cheques of our clients drawn on different banks. Here I
also watched the working of clearing house up to 12.00 pm all the branches send their cheques
to main branch. Where they stored and presented in the State Bank of Pakistan.


47
FINANCIAL ANALYSIS
Balance Sheet Of MCB (From 2009 to2013)
(Rupee in 000)
Assets
2013 2012 2011 2010
2009
Cash and balances with
treasury banks
59,946,150 57,420,129 53,122,522 45,407,183 38,774,871
Balances with other banks 1,536,946 1,191,974 2,281,263 1,478,569 6,009,993
Lending to financial
intuitions
1,224,638 1,551,472 955,087 4,401,781 3,000,000
Investments 449,006,019 402,068,916 316,651,613 213,060,882 167,134,465
Advances 248,242,965 239,583,320 227,580,139 254,551,589 253,249,407
Operating fixed assets 28,595,338 23,738,454 22,007,903 20,947,540 18,014,896
Deferred tax assets -
Other assets 26,956,315 41,520,432 31,183,765 27,705,069 23,040,095

815,508,371 767,074,697 653,782,292 567,552,613 509,223,727
Liabilities
Bills payable 10,138,726 9,896,284 9,466,818 10,265,537 8,201,090
Borrowings 38,542,660 78,951,103 39,100,627 25,684,593 44,662,088
Deposits and Other accounts 632,330,286 545,060,728 491,188,710 431,371,937 367,604,711
Sub-ordinate loans - -
Liabilities against assets
subject to finance lease
-

-
Deferred tax liabilities 4,201,373 9,529,727 6,487,525 4,934,018 3,196,743
Other liabilities 20,064,345 21,166,166 18,378,373 16,092,319 15,819,082
705,277,390 664,604,008 564,622,053 488,348,404 439,483,714
Net assets 110,230,981 102,470,689 89,160,239 79,204,209 69,740,013
Represented by:

Share capital 10,118,461 9,198,601 8,362,365 7,602,150 6,911,045
Reserves 46,601,214 44,253,270 42,186,467 40,162,906 38,385,760
Unappropriated profit 40,552,043 35,424,921 28,723,928 21,414,955 15,779,127


48

Profit & Loss Account of MCB (2009 & 2013)
Items
2013 2012 2011 2010 2009
Markup/ return/ interest earned 65,064,123 68,356,191 68,146,588 54,821,296 51,616,007
Mark up/ return/ interest expense 27,195,894 27,500,019 23,620,274 17,987,767 15,841,463
Net mark up/ interest income 37,868,229 40,856,172 44,526,314 36,833,529 35,774,544

Provision for dimininution in the
value of investment
(6,834) (3,044) 778,526 444,476 1,484,218
Provision against loans and
advances
(2,828,783) 480,903 2,846,523 3,100,594 5,796,527
Bad debts written off directly - 206 28,565 52,047 41,576
(2,835,617) 478,065 3,653,614 3,597,117 7,322,321

Net mark up/interest income
after provisions
40,703,846 40,378,107 40,872,700 33,236,412 28,452,223

Non mark up/interest income

Fee, commission and brokerage
income
6,741,404 5,934,472 4,921,383 4,129,540 3,331,856
Dividend income 932,717 1,197,615 1,003,272 543,906 459,741
Income from dealing in foreign
currencies
916,572 822,856 921,262 632,346 341,402
Gain on investment 2,130,341 824,539 735,639 411,834 773,768

97,271,718 88,876,792 79,272,760 69,180,011 61,075,932
Surplus on revaluation of
assets
12,959,263 13,593,897 9,887,479 10,024,198 8,664,081

110,230,981 102,470,689 89,160,239 79,204,209 69,740,013


49
Unrealized loss on revaluation of
investments
classified as held for trading
_ _ -
Other income 449,604 373,849 530,635 547,680 736,118

Total non mark up interest
income
11,170,638 9,153,331 8,112,191 6,265,306 5,642,885

Income after interest income 51,874,484 49,531,438 48,984,891 39,501,718 34,095,108

Non mark up/interest expense
- Administrative expenses 18,709,969 17,476,862 15,584,687 12,173,942 10,107,189
- Other proposition/write off (52,285) (187,305) 514,646 88,261 142,824
-Other charges 928,595 599,974 1,402,379 986,440 690,150

Total non mark up/ interest
expense
19,586,279 17,889,531 17,501,712 13,248,643 10,940,163

Extra ordinary/unusual items -
Profit before taxation 32,288,205 31,641,907 31,483,179 26,253,075 23,154,945
Taxation-Current year 15,170,974 9,600,760 9,724,467 8,027,433 7,703,305
-Prior years - 116,725 1,037,910 - (2,232,226)
-Defferd (4,378,107) 1,251,420 1,295,896 1,352,467 2,188,569
10,792,867 10,968,905 12,058,273 9,379,900 7,659,648
Profit after taxation 21,495,338 20,673,002 19,424,906 16,873,175 15,495,297

Inappropriate profit brought
forward
21,495,338 20,673,002 21,414,955 15,779,127 9,193,332
Transfer from surplus on
revaluation of fixed assets
35,788 35,789 35,788 21,792 22,324
35,460,709 28,759,717 21,450,743 15,800,919 9,215,656
Profit available for appropriation 56,956,047 49,432,719 40,875,649 32,674,094 24,710,953


50
Basic/diluted earning per share 21.24 20.43 23.23 20.18 22.42

COMMON SIZE ANALYSIS
Vertical Analysis of Balance Sheet (From 2009 to 2013)

Assets
Rs. (Million)
Analysis
2013 2012 2011 2010 2009 2013 2012 2011 2010 2009
Cash and balances
with treasury banks
59,946

57,420 53,123 45,407 38,775 7% 8% 8% 8% 8%
Balances with other
banks
1.537 1,192 2,281 1,479 6,010 0.2% 0.2% 0.4% 0.3% 1%
Lending to financial
intuitions
1,225 1,551 955 4,402 3,000 0.2% 0.2% 0.2% 1% 1%
Investments 449,006 402,069 316,652 213,061 167,134 55% 52% 48% 38% 33%
Advances 248,243 239,583 227,580 254,552 253,249 30% 31% 35% 45% 50%
Operating fixed
assets
28,595 23,738 22,008 20,948 18,015 4% 3% 3% 4% 4%
Deferred tax assets - - - -
Other assets 26,956 41,520 31,184 27,706 23,040 3% 5% 5% 5% 5%

815,508 767,075 653,782 567,553 509,224 100
%
100
%
100
%
100
%
100
%
Liabilities
Bills payable 10,139 9,896 9,467 10,266 8,201 1% 1% 1% 2% 2%
Borrowings 38,543 78,951 39,101 25,685 44,662 5% 10% 6% 5% 9%
Deposits and Other
accounts
632,330 545,061 491,189 31,372 367,605 78% 71% 75% 76% 72%
Deferred tax
liabilities
4,201 9,530 6,488 4,934 3,197 1% 1% 1% 1% 1%
Other liabilities 20,064 21,166 18,378 16,092 15,819 2% 3% 3% 3% 3%
705,277 664,604 564,622 488,349 439,484 87% 86% 86% 86% 86%
Net assets 110,231 102,471 89,160 79,204 69,740 14% 13% 14% 14% 14%


51
Vertical Analysis of Income Statement (From 2009 to 2013)

Rs. (Million) Analysis (%)
Items
2013 2012 2011 2010 2009 2013 2012 2011 2010 2009
Markup/ return/
interest earned
65,064 68,356 68,147 54,821 51,616 100
%
100
%
100
%
100
%
100
%
Mark up/ return/
interest expense
(27,196) (27,500) (23,620) (17,988) (15,837) -42% -40% -35% -33% -31%
Net mark up/
interest income
37,868 40,856 44,526 36,834 35,779 58% 60% 65% 67% 69%
Provision for bad
debts
2,888 (291) (4,168) (3,685) (7,465) 4% 0 -6% -7% -15%
Net mark up/
interest income
after provision
40,756 40,565 40,358 33,149 28,314 63% 59% 59% 60% 55%
Total non mark
up interest
income
11,171 9,153 8,112 6,265 5,643 17% 13% 12% 11% 11%
Non mark
up/interest
expense
(19,639) (18,077) (16,987) (13,160) (10,801) -30% -26% -25% -24% -21%
Profit Before
Taxation
32,288 31,642 31,483 26,254 23,155 50% 46% 46% 48% 45%
Taxation (10,793) (10,969) (12,058) 9,380) (7,660) -17% -16% -18% -17% -15%
Represented by:
Share capital 10,118 9,199 8,362 7,602 6,911 1% 1% 1% 1% 1%
Reserves 46,601 44,253 42,186 40,163 38,386 6% 6% 6% 7% 8%
Unappropriated
profit
40,552 35,425 28,724 21,416 15,779 5% 4% 5% 4% 3%
Surplus on
revaluation of
assets
12,959 13,594 9,887 10,024 8,664 2% 2% 2% 2% 2%
110,231 102,471 89,160 79,204 69,740 14% 13% 14% 14% 14%


52
Profit after
taxation
21,495 20,673 20,673 16,873 15,495 33% 30% 30% 31% 30%
COMMENTS
Vertical analysis of Balance Sheet:
Assets:
Cash is at stable position which is 8% of Total assets from 2009 to 2012, in 2013 it is
decreased by 1% which shows that the liquidity position of the bank is going to be
weak, so it is alarming sign for the bank. Therefore bank should take necessary steps
according to the position.
The balance with other banks is constant in 2012 and 2013 while in it is high in 2011.
An increasing trend is also observed in the field of investment with the passage of time.
It is common term of finance more investment more return.
Advances of MCB bank are showing decreasing trend over the last five years which is
not a good sign for a bank which heavily relies on advancing loans and interest charged
on these loans. MCB bank should reconsider their terms and conditions in this regard.
LIABILITIES
Deposits are high in 2013 as compared to other four years which is a good sign and also
shows the interest and confidence of customers to MCB bank.
Borrowing is high in 2012 but in 2013 it is decreased by 50% which is a good sign
because it will definitely reduce the interest expense of MCB. Although it is observed
that banks borrowing is increasing with the passage of time which is not a good sign
but there is a positive thing in this behalf, usually banks borrow money at that time
when they would have to give it for earning more profit, I think the MCB BANK LTD.
doing the same thing for increasing its profits.
Bills payable is showing constant picture in Liabilities over the last 3 years and it is
also constant in 2010 and 2009. Which is a good sign.


53
Vertical Analysis of Income Statement:
INCOME
Income statement is showing an increase in interest expense which is a negative sign.
As we know that banks provide many facilities other than money lending and
borrowing. Banks receive fee, commission etc. for these services. Therefore an increase
in fee and commission income is favorable for an MCB. MCB is experiencing an
increasing trend in this type of income.
EXPENSES
As mentioned earlier that deposits are high in 2013 but it must be kept in mind that
MCB must have to pay more amount in case of Return on Deposits which will increase
the expenses.
Administration expenses are also increasing which will decrease net income.
Horizontal Analysis of Balance Sheet (From 2011 to 2013)

Rs.(000)
Analysis
Assets
2013 2012 2011 2010 2009 2013 2012 2011 2010 2009
Cash and
balances with
treasury banks
59,946 57,420 53,123 45,407 38,775 155% 148% 137% 117% 100%
Balances with
other banks
1,537 1,192 2,281 1,479 6,010 26% 20% 38% 25% 100%
Lending to
financial
intuitions

1,225 1,551 955 4,402 3,000 41% 52% 32% 147% 100%
Investments 449,006 402,069 316,652 213,061 167,134 269% 241% 189% 127% 100%
Advances 248,243 239,583 227,580 254,552 253,249 98% 95% 89% 101% -100%


54

Operating
fixed assets
28,595 23,738 22,008 20,948 18,015 159% 132% 122% 116% 100%
Other assets 26,956 41,520 31,184 27,706 23,040 117% 180% 135% 120% 100%

Total assets 815,508 767,075 653,782 567,553 509,224 160% 151% 128% 112% 100%
Liabilities
Bills payable 10,139 9,896 9,467 10,266 8,201 124% 121% 115% 125% 100%
Borrowings 38,543 78,951 39,101 25,685 44,662 86% 177% 88% 58% 100%
Deposits and
Other
accounts
632,330 545,061 491,189 431,372 367,605 172% 148% 134% 117% 100%
Deferred tax
liabilities
4,201 9,530 6,488 4,934 3,197 131% 298% 203% 154% 100%
Other
liabilities
20,064 21,166 18,378 16,092 15,819 127% 134% 116% 102% -100%
705,277 664,604 564,622 488,349 439,484 161% 151% 129% 111% 100%
Net assets 110,231 102,471 89,160 79,204 69,740 158% 147% 128%

114% 100%
Represented
by:

Share capital 10,118 9,199 8,362 7,602 6,911 146% 133% 121% 110% 100%
Reserves 46,601 44,253 42,186 40,163 38,386 121% 115% 110% 105% 100%
Unappropriate
d profit
40,552 35,425 28,724 21,416 15,779 257% 225% 182% 136% 100%
Surplus on
revaluation of
assets
12,959 13,594 9,887 10,024 8,664 150% 157% 114% 116% 100%

110,231 102,471 89,160 79,204 69,740 158% 147% 128% 114% 100%


55
Horizontal Analysis of Income Statement (From 2009 to 2013)
Rs. (000)
Analysis
2013 2012 2011 2010 2009 2013 2012 2011 2010 2009

Markup/
return/
interest
earned
65,064 68,356 68,147 54,821 51,616 126% 132% 132
%
106
%
100%
Mark up/
return/
interest
expense
(27,196) (27,500) (23,620) (17,988) (15,837) 172% 174% 149
%
114
%
100%
Net mark up/
interest
income
37,868 40,856 44,526 36,834 35,779 106% 114% 124
%
103
%
100%
Provision for
bad debts
2,888 (291) (4,168) (3,685) (7,465) 39% 4% 56% 49% 100%
Net mark up/
interest
income after
provision
40,756 40,565 40,358 33,148 28,314 144% 143% 143
%
117
%
100%
Total non
mark up
interest
income
11,171 9,153 8,112 6,265 5,643 198% 162% 144
%
111
%
100%
Non mark
up/interest
expense
(19,639) (18,077) (16,987) (13,160) (10,801) 182% 167% 157
%
122
%
100%
Profit Before
Taxation
32,288 31,642 31,483 26,253 23,155 139% 137% 136
%
113
%
100%
Taxation (10,793) (10,969) (12,058) (9,380) (7,660) 141% 143% 157
%
122
%
100%
Profit after
taxation
21,495 20,673 19,425 16,873 15,495
139%
133% 125
%
109
%
100%


56
COMMENTS ON HORIZONTAL ANALYSIS:
INCOME
Interest income is increasing which is favorable. It means that interest received by the
bank is increasing with the passage of time.
As we all know that banks provide many services for their customers and also act as a
agent of the customer. The banks receive fee and commission after their services. In
case bank is taking more fee as compared to previous years. This is good for the bank.
EXPENSE
Deposits are showing increasing trend which means that Return on deposit also
increases which shows an increase in expense and it will reduce the Net income of MCB
bank.
Bad debts provision is high in 2013 as compared to last year which is not a good sing
for and organization. MCB bank must pay attention to recover their bad debts.
Profit before taxation has increased but not with greater proportion. Tax expense
showing an unclear trend but if there is an increase in tax expense it is not a bad sign in
my point of view because tax increases as profit increases.
RATIOS ANALYSIS:
Ratio analysis is an important and age-old technique of financial analysis. Ratios are important
and helpful in the reference that:
These simplify the comprehension of financial statements and depict the whole story of
changes in the financial conditions of the business. These provide data for inter-firm
comparison. The ratios highlight the factors associated with successful and unsuccessful firms,
also reveal strong and weak firms. These help in planning and forecasting these can assist
management in its basic functions of forecasting, planning, coordination and control. These
help in investment decision in case of investor and lending decision in case of Bankers etc.
However, the ratios are only indicators, they cannot be taken as final regarding good or bad
financial position of the business other things have also to be seen.


57
1) Current Ratio:
A liquidity ratio that measures a company's ability to pay short-term obligations.
Explanation:
The ratio is mainly used to give an idea of the company's ability to pay back its short-term
liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher
the current ratio, the more capable the company is of paying its obligations. A ratio under 1
suggests that the company would be unable to pay off its obligations if they came due at that
point. While this shows the company is not in good financial health, it does not necessarily mean
that it will go bankrupt - as there are many ways to access financing - but it is definitely not a
good sign.
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability
to turn its product into cash. Companies that have trouble getting paid on their receivables or
have long inventory turnover can run into liquidity problems because they are unable to alleviate
their obligations. Because business operations differ in each industry, it is always more useful to
compare companies within the same industry.
This ratio is similar to the acid-test ratio except that the acid-test ratio does not include inventory
and prepaid as assets that can be liquidated.
Current ratio=current asset/ current liabilities

2009

2010

Current asset 468,168,736
Current liabilities 420,467,889
Current ratio 1.11
Current asset
518,900,004
Current liabilities
467,322,067
Current ratio
1.110369145


58
2011

2012

2013

Current Ratio

2) Quick ratios:
An indicator of a companys short-term liquidity. The quick ratio measures a companys ability
to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes
inventories and prepaid expenses from current assets.
Since banks dont have any sorts of inventories, therefore only prepaid expenses are
subtracted from the current assets of the bank.

Current ratio 1.11
Current ratio 1.107
Current ratio 1.116
Year 2009 2010 2011 2012 2013
1.11% 1.11% 1.112% 1.107% 1.115%


59
Explanation:
For example, consider a firm with the following current assets on its balance sheet:
Cash $5 million, marketable securities $10 million, accounts receivable $15 million,
inventories $20 million. This is offset by current liabilities of $20 million. The quick ratio in
this case is 1.5 and the current ratio is 2.5. The quick ratio is more conservative than the current
ratio because it excludes inventories from current assets. The ratio derives its name presumably
from the fact that assets such as cash and marketable securities are quick sources of cash.
Inventories generally take time to be converted into cash, and if they have to be sold quickly,
the company may have to accept a lower price than book value of these inventories. As a result,
they are justifiably excluded from assets that are ready sources of immediate cash.
Whether accounts receivable is a source of ready cash is debatable, however, and depends
on the credit terms that the company extends to its customers. A firm that gives its customers
only 30 days to pay will obviously be in a better liquidity position than one that gives them 90
days. But the liquidity position also depends on the credit terms the company has negotiated
from its suppliers. For example, if a firm gives its customers 90 days to pay, but has 120 days
to pay its suppliers, its liquidity position may be reasonable.
The other issue with including accounts receivable as a source of quick cash is that unlike cash
and marketable securities which can typically be converted into cash at the full value shown
on the balance sheet the total accounts receivable amount actually received may be slightly
below book value because of discounts for early payment and credit losses.
Quick Ratio = Quick Assets/Current Liabilities
2009

Quick assets 301,034,271
Current Liabilities 420,467,889
Quick Ratio 0.72:1
2010
Quick assets 305,839,122
Quick Ratio 0.65:1


60
2011
Quick Assets 283,939,011
Quick Ratio 0.53:1
2012
Quick Ratio 0.47:1
2013
Quick Ratio 0.46:1
Quick Ratio

Year 2009 2010 2011 2012 2013
0.72:1 0.65:1 0.53:1 0.47:1 0.46:1

3) Cash Ratio:
Cash and equivalent are the most liquid assets. The cash ratio shows the proportion of the assets
held in the most liquid possible form. It is used to check the liquidity of the organization.

Explanation:
The cash ratio is generally a more conservative look at a company's ability to cover its liabilities
than many other liquidity ratios. This is due to the fact that inventory and accounts receivable
are left out of the equation. Since these two accounts are a large part of many companies, this
ratio should not be used in determining company value, but simply as one factor in determining
liquidity.
Cash Ratio= Cash Equivalents + Marketable Securities/Current Liabilities


61
2009
Cash Equivalent +
Marketable Securities
44,784,864
Cash Ratio 0.11
2010
Cash Equivalent +
46,885,752
Cash Ratio 0.100
2011
Cash Equivalent +
55,403,785
Cash Ratio 0.103
2012
Cash Equivalent +
58,612,103
Working Capital 0.092
2013
Cash Equivalent +
61,483,096
Working Capital 0.09
Cash Ratio
Year 2009 2010 2011 2012 2013
0.11 0.100 0.102 0.092 0.090

4) Interest Coverage Ratio
Interest coverage ratio shows the ability of a firm to cover up its interest charges on the income


62
before interest and taxes. The ratio is obtained through dividing earning before interest and
taxes (EBIT) of the bank by its interest expenses.
Explanation:
The lower the ratio, the more the company is burdened by debt expense. When a company's
interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable.
An interest coverage ratio below 1 indicates the company is not generating sufficient revenues
to satisfy interest expenses. A ratio under 1 means that the company is having problems
generating enough cash flow to pay its interest expenses.

Ideally you want the ratio to be over 1.5. A company that barely manages to cover its interest
costs may easily fall into bankruptcy if its earnings suffer for even a single month. To
understand more on the importance of this ratio, read Why Interest Coverage Matters To
Investors.
Interest coverage ratio=EBIT/Interest expense
2009
EBIT 23,154,945
Interest Expense 15,841,463
Interest coverage ratio 146%
2010
EBIT 26,253,075
Interest coverage ratio 1.46
2011
EBIT 31,483,179
2012
EBIT 31,641,907


63
2013
EBIT 32,288,205

Interest Coverage Ratio

Year 2009 2010 2011 2012 2013
146% 1.46 1.333 1.151% 1.187

5) Working Capital:
Working capital is the difference between current assets and current liabilities. Working capital
is often considered a measure of liquidity by itself. This ratio shows the amount of liquidity.
Working capital is used to check liquidity of the organization.
Explanation:
If a company's current assets do not exceed its current liabilities, then it may run into trouble
paying back creditors in the short term. The worst-case scenario is bankruptcy. A declining
working capital ratio over a longer time period could also be a red flag that warrants further
analysis. For example, it could be that the company's sales volumes are decreasing and, as a
result, its accounts receivables number continues to get smaller and smaller.
Working capital also gives investors an idea of the company's underlying operational
efficiency. Money that is tied up in inventory or money that customers still owe to the company
cannot be used to pay off any of the company's obligations. So, if a company is not operating
in the most efficient manner (slow collection), it will show up as an increase in the working
capital. This can be seen by comparing the working capital from one period to another; slow
collection may signal an underlying problem in the company's operations.
If the ratio is less than one then they have negative working capital.
A high working capital ratio isn't always a good thing, it could indicate that they have too much
inventory or they are not investing their excess cash.
Working Capital= Current Assets Current Liabilities


64
2009
Current Assets 468,168,736
Working Capital 47,700,847
2010
2011
2012
2013
Working Capital:

Year 2009 2010 2011 2012 2013
Ratio 47,700,847 51,577,937 60,834,469 67,907,696 78,945,046

6) Debt Ratio:

A financial ratio that measures the extent of a companys or consumers leverage. The debt
ratio is defined as the ratio of total debt to total assets, expressed in percentage, and can be
interpreted as the proportion of a companys assets that are financed by debt.


65
Explanation:
The higher this ratio, the more leveraged the company and the greater its financial risk. Debt
ratios vary widely across industries, with capital-intensive businesses such as utilities and
pipelines having much higher debt ratios than other industries like technology. In the consumer
lending and mortgage businesses, debt ratio is defined as the ratio of total debt service
obligations to gross annual income.
A company with total assets of $100 million and total debt of $30 million has a debt ratio of
30%. Is this company in a better financial situation than one with a debt ratio of 40%? It
depends on the industry in which the companies operate. A debt ratio of 30% may be too high
for a company that operates in a sector where cash flows are volatile and its peers have little
debt, since this debt level may reduce its financial flexibility and competitive advantage.
Conversely, a debt level of 40% may be easily manageable for a company in a sector such as
utilities, where cash flows are stable and higher debt ratios are the norm.
A debt ratio of greater than 1 indicates that a company has more debt than assets. Meanwhile,
a debt ratio of less than 1 indicates that a company has more assets than debt. Used in
conjunction with other measures of financial health, the debt ratio can help investors determine
a company's risk level.
In the consumer lending and mortgages business, two common debt ratios used to assess a
borrowers ability to repay a loan or mortgage are the gross debt service ratio and the total debt
service ratio. The gross debt ratio is defined as the ratio of monthly housing costs (including
mortgage payments, home insurance and property costs) to monthly income, while the total
debt service ratio is the ratio of monthly housing costs plus other debt such as car payments
and credit card borrowings to monthly income. Acceptable levels of the total debt service ratio,
in percentage terms, range from the mid-30s to the low-40s.
Debt Ratio: Total Liabilities / Total Assets
2009
Total Liabilities 439,483,714
Total Assets 509,223,727
Debt Ratio 86%


66
2010
Debt Ratio 86%
2011
Debt Ratio 86%
2012
Debt Ratio 87%
2013
Debt Ratio 86%

Debt ratio
Year 2009 2010 2011 2012 2013
Ratio 86% 86% 86% 87% 86%

7) Return on assets:

An indicator of how profitable a company is relative to its total assets. ROA gives an idea as
to how efficient management is at using its assets to generate earnings. Calculated by dividing
a company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes
this is referred to as "return on investment".
Explanation:
ROA tells you what earnings were generated from invested capital (assets). ROA for public
companies can vary substantially and will be highly dependent on the industry. This is why


67
when using ROA as a comparative measure, it is best to compare it against a company's
previous ROA numbers or the ROA of a similar company.
The assets of the company are comprised of both debt and equity. Both of these types of
financing are used to fund the operations of the company. The ROA figure gives investors an
idea of how effectively the company is converting the money it has to invest into net income.
The higher the ROA number, the better, because the company is earning more money on less
investment. For example, if one company has a net income of $1 million and total assets of $5
million, its ROA is 20%; however, if another company earns the same amount but has total
assets of $10 million, it has an ROA of 10%. Based on this example, the first company is better
at converting its investment into profit. When you really think about it, management's most
important job is to make wise choices in allocating its resources. Anybody can make a profit
by throwing a ton of money at a problem, but very few managers excel at making large profits
with little investment. ROA And ROE Give Clear Picture Of Corporate Health.
ROA= Net Profit After Tax / Total Assets

2009
Net Profit After Tax 15,495,297
Return On Assets 3.3%
2010
Return On Assets 3%
2011
Return On Assets 3%
2012


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2013

ROA
Year 2009 2010 2011 2012 2013
3.3% 3% 3% 2.7% 2.6%

8) Return on Deposits:

ROD= Net Profit After Tax/Total Deposits

2009
Total Deposits
367,604,711
Return On Deposits
4.2%
2010
Total Deposits
431,371,937
Return On Deposits
4%
2011
Total Deposits
491,188,710
Return On Deposits
4%
2012
Total Deposits
545,060,728
Return On Deposits
3.8%


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2013
Total Deposits
632,330,286
Return On Deposits
3.4%
ROD
Year 2009 2010 2011 2012 2013
4.2% 4% 4% 3.8% 3.4%

9) Cash/ Deposits ratio:
Cash/deposits ratio= Cash / Total Deposits
2009
Cash 44,784,864
Total Deposits
367,604,711
Cash/ Deposits ratio
0.121828863

2010
Cash 46,885,752
Total Deposits
431,371,937
0.108689852
2011
Cash 55,403,785
Total Deposits
491,188,710
0.112795314
2012
Cash 58,612,103
Total Deposits
545,060,728
0.107533161


70
2013
Cash 61,483,096
Total Deposits
632,330,286
0.097232566

Cash / Deposits Ratio

10) Average Profit per Branch:
Average Profit per Branch = Net profit / No. of Branches
2009
Net profit 15,495,297
No. of Branches 1150
Average Profit per
Branch
13474.17
2010
Average Profit per
Branch
14672.33
2011
Average Profit per
Branch
16891.22

Year 2009 2010 2011 2012 2013
0.122 0.109 0.113 0.108 0.098


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2012
Average Profit per
Branch
17976.52
2013
Average Profit per
Branch
18691.59

Average Profit per Branch

Comment on Ratio Analysis

1. Current Ratio:
In MCB bank limited from 2009 to 2013 current ratio is almost same in all years. Current ratio
greater than 1 is a good sign for and organization and MCB is experiencing it. A ratio under 1
suggests that the company would be unable to pay off its obligations if they came due at that
point. While this shows the company is not in good financial health, it does not necessarily
mean that it will go bankrupt - as there are many ways to access financing - but it is definitely
not a good sign.
2. Quick Ratio:
The quick ratio is more conservative than the current ratio because it excludes inventories from
current assets. The ratio derives its name presumably from the fact that assets such as cash and
marketable securities are quick sources of cash. Inventories generally take time to be converted
into cash, and if they have to be sold quickly, the company may have to accept a lower price

Year 2009 2010 2011 2012 2013
13474.17 14672.33 16891.22 17976.52 18691.59


72
than book value of these inventories. As a result, they are justifiably excluded from assets that
are ready sources of immediate cash.
Prepaid expenses are considered as current assets so they are included in current ratio
calculation. Prepaid expenses are less liquid. Normally it is not easily converted into cash on
short notice. In 2009 quick ratio is better than other years it shows that bank can easily recover
its liabilities on short notice.
3. Working Capital:
If a company's current assets do not exceed its current liabilities, then it may run into trouble
paying back creditors in the short term. The worst-case scenario is bankruptcy. A declining
working capital ratio over a longer time period could also be a red flag that warrants further
analysis. For example, it could be that the company's sales volumes are decreasing and, as a
result, its accounts receivables number continues to get smaller and smaller.
Working capital also gives investors an idea of the company's underlying operational
efficiency. A high working capital ratio isn't always a good thing, it could indicate that they
have too much inventory or they are not investing their excess cash. Working capital is better
in 2013, which is 78,945,046. It means that
assets were utilized more economically in 2013 as compared to 2009, 2010, 2011 and 2012.

4. Cash Ratio:
The cash ratio is generally a more conservative look at a company's ability to cover its liabilities
than many other liquidity ratios. This is due to the fact that inventory and accounts receivable
are left out of the equation. Since these two accounts are a large part of many companies, this
ratio should not be used in determining company value, but simply as one factor in determining
liquidity.
Higher cash ratio also shows the higher rate of satisfaction like other liquidity
ratios. Cash ratio is more important liquidity ratio. Cash ratio is little bit higher in 2009 as
compared to other years.
5. Debt Ratio:
The higher this ratio, the more leveraged the company and the greater its financial risk. Debt
ratios vary widely across industries, with capital-intensive businesses such as utilities and
pipelines having much higher debt ratios than other industries like technology. Financial


73
leverage is the extent to which a firm is financed with debt. In Muslim Commercial bank, years
2012 was financed 1% more with debt as compare to other years. The Debt ratio of MCB bank
is same in other four years which is 86%.

6. Interest Coverage Ratio:
The lower the ratio, the more the company is burdened by debt expense. When a company's
interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable.
An interest coverage ratio below 1 indicates the company is not generating sufficient revenues
to satisfy interest expenses. A ratio under 1 means that the company is having problems
generating enough cash flow to pay its interest expenses.
Ideally you want the ratio to be over 1.5. A company that barely manages to cover its interest
costs may easily fall into bankruptcy if its earnings suffer for even a single month. Interest
Coverage ratio shows the number of the times a firm can recover or meet particular financial
obligations. The interest coverage ratio, which is also called the time
interest earned ratio, measure the coverage of the firm s interest expense. Year 2013 is better
in interest coverage ratio as compare to the other years.

7. Return on Assets:
ROA tells you what earnings were generated from invested capital (assets). ROA for public
companies can vary substantially and will be highly dependent on the industry. This is why
when using ROA as a comparative measure, it is best to compare it against a company's
previous ROA numbers or the ROA of a similar company.
The assets of the company are comprised of both debt and equity. Both of these types of
financing are used to fund the operations of the company. The ROA figure gives investors an
idea of how effectively the company is converting the money it has to invest into net income.
The higher the ROA number, the better, because the company is earning more money on less
investment. For example, if one company has a net income of $1 million and total assets of $5
million, its ROA is 20%; however, if another company earns the same amount but has total
assets of $10 million, it has an ROA of 10%. Based on this example, the first company is better
at converting its investment into profit. When you really think about it, management's most
important job is to make wise choices in allocating its resources. Anybody can make a profit


74
by throwing a ton of money at a problem, but very few managers excel at making large profits
with little investment. ROA And ROE Give Clear Picture Of Corporate Health.
This ratio has a decreasing trend. It means the assets of the business are not fully utilized in
more and efficient way and also shows an unfavorable trend of the business. This ratio of the
bank is too low in 2013 as compare to other four years.
8. Return on Deposits:
The more the Return on Deposit Ratio means that it will attract more customers. MCB is
experiencing a decreasing trend in this ratio which is not a favorable sign for bank. MCB bank
should take it seriously in order to increase the trust of customers.

9. Cash / Deposit Ratio:
This ratio is also showing a decreasing trend. It is some kind of Reserve Ratio means that this
quantity of reserve should be maintained by Bank.
10. Average profit per Branch:
MCB is experiencing an increasing trend in this ratio. Increasing trend is favorable for the
organization which means that profit per branch is increasing and it will produce cash for
an organization.
SWOT Analysis:
Strengths:
Strong capital base & Highest Capital Adequacy Ratio in peer Banks
Highest CASA ratio / low cost deposits (90%) in the industry
Offering of comprehensive solutions to clients across products (Debt, equity issuance,
advisory and facility arrangement)
Ability to introduce new products to improve margin and volumes
Diversified Portfolio of loans and advances and diversified income streams
2nd lowest infection ratio in peer banks
Conservative and sustainable business policy


75
Weaknesses:
Limited credit opportunities having low risk profiles
Concentration in Govt. securities & Lending to Public/Govt. owned entities
Lesser international / Global presence as compare to peer banks
Dependence on the money and capital markets
Linkage of minimum deposits rate with discount rate by regulator squeezing banks
margin
Exposure to the Euro/US dollar exchange rate, with an impact on growth and results
Opportunities:
Potential for capitalization on the anticipated growth in Islamic industry
Strong capital base enable the Bank to explore international markets
GSP plus status helping to raise the credit demand and recovery of classified portfolio
in textile sector
Positive and macroeconomic stability will increase demand
Significant increase in the customer base, further extension of the range of the products
Expansion in Africa, Europe and Middle East- Growth and expansion opportunities in
emerging economies
Expanding the advisory and other services offered to clients and investors
Potential relationship with non-resident Pakistanis to attract FDI and home remittance
Population demographics show an increase in working age population and hence
increase in Banking needs.
Threats:
Competition from peer banks
Competition from growing branchless banking
Inflationary expectation, high degree of dollarization
Delinquencies of credit portfolio due to ailing economic conditions
Squeezing margin of Banking industry due to minimum threshold for deposits rates and
reducing discount rate
Prevailing global financial markets crisis, sovereign debt crisis in Europe, increasing
US debt levels, slowdown in the world economy


76
Prevalent energy crises adversely affecting projects viabilities and demand for credits
Opportunities.
CONCLUSION:
With Cooperation of all branch members, I have been able to learn and experience many new
things related to the banking sector and the banks workings. I am able to handle the public with
respect to many different workings on many different instances and also in account opening
for customers and can handle many other tasks as well.
Finally I concluded that MCB is a good organization for a person for his long term career
workings. Overall working and environment of the bank is very comfortable and the staff is
very helpful and respectful of each other and it still maintains a professional environment.
Management of the bank is very strong.
Employees of MCB Fatimah Jinnah Road branch, Sargodha work more than their working
hours and all the workings take place in a very friendly atmosphere that does not induce
pressure on the person working there. It also shows their loyalty and commitment to the
organization. This branch of MCB relatively small and has climbed its way up very quickly
and all that only because of the employees efforts and consideration for each other
Understanding and the effective management of the human resources is the most difficult
challenge faced not only by the bank but by all the organizations. Even though the people have
been sacrificed in the new organizational developments, it is becoming clear that the true
lasting competitive advantage comes through human resources and how they are managed.
MCB seems to not focusing on this highly critical issue as the job satisfaction level of the
employees working at MCB, was quite low.
The attitude of the bankers with all of their customers is not the same, they pay more attention
and good service to some of the customers and neglect a major portion of them. Some of the
customers approach to the bank officials and get their work done before others; it is not a good
practice
There are so many customers who dont know how to fill cheques, pay-in-slip, application
form, etc. They waste a lot of time of the bank stall.


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RECOMMENDATIONS:
After doing a deep study and witnessing everything that goes on in a branch, I would then like
to make the recommendations that;
First of all, the management needs to overlook the major problems that the organization
is currently facing and then develop strategies to eradicate them. Some of the suggestions
that I would like to give at the end are:

Promotion and Mass Media Publicity
MCB Bank can improve its Marketing strategies to acquire more promotion and mass media
publicity by the use of effective channels of promotions like TV, Newspaper Advertisements.
It can also improve its magazine publication that it releases each month.

Better Reward System
Better reward system is one of the most important requirements in order to reduce the problem
of Employee retention and improve Employee motivation.

Continuous Training Of Employees
There is lack of proper and continuous training of employees that needs to be solved.
Creation of enhanced performance appraisal system.
Proper use of stationary.
Implementation of enhanced Marketing system.
Salary Packages
Improvement should be made in the salary package of the employees as it is comparatively less
when compared to the other operating banks in Pakistan
Staff Member
In branch only two employees in cash counter and it must be increased to four person for proper
handling of cash because there is heavy load work.


78
SYMBOL SYSTEM
To make the SYMBOL system more efficient and make sure its connectivity all the time in
order to provides more convenience to customers.
Limitations:
Time constraints are the big limitation of this report because the time was not enough
to detail explain the MCB analysis.
Non availability of the proper information
Non availability of the confidential documentation from MCB due to working as an
internee.
As an internee we just can see the Rosy picture of the organization not permitted to go
the security and management areas.
Bibliography:
Mr. Farooq Ali Khan (Manager Fatimah Jinnah Road Branch)
www.mcb.com.pk
www.wikipedia.org
www.scribd.com
www.google.com

Thank You

MCB Internship Report of Hafizabad Xeeshan Bashir

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