MCB BANK LTD.

1.1 HISTORY AND BACKGROUND –

1.1.2 INTRODUCTION –
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 also exceeds their expectation.

They strive to achieve excellence by ensuring that every moment of their time is spent in adding value, making sure that they do things right, first time, and every time. With the quest of quality MCB has always taken initiatives 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.

It encourages diversity and treats each of its employees with fairness. It gives constructive feedback for their continuous development and seeks suggestion from all employees for further improvement. It ensures that quality performance is acknowledged and rewarded and exercise utmost responsibility in decision making with regards to its employees. Integrity of its employees is the strength of its performance.

MCB believe in achieving their mission and vision by working together as a combine group. It treats its colleague as its internal customer and ensures that the requirements of internal customer focus are always met. Equipped with in-depth product knowledge and recognizing the strengths in each individual, It strive for optimum-results from its coworkers and bringing out peak performances by working towards common goals and objectives in today's dynamic banking environment. Page 1 of 147

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MCB has an edge over other local banks, as it was the first privatized bank. The State Bank of Pakistan has restricted the number of branches that can be opened by foreign banks, an advantage that MCB capitalizes because of its extensive branch network.

Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer.

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 multi national concerns. MCB is also catering to the growing middle class by providing new asset and liability products. The Bank provides 24 hour banking convenience with the largest ATM network in Pakistan covering 30 cities with over 225 ATM locations. The Bank’s Rupee Traveler Cheques have been leaders for the past six years and have recently launched their Gift Cheques Scheme.

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MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of which are Automated Branches, over 225 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch.

MCB has become the only bank to receive the Euromoney award for the fourth time in the last five years. MCB won the "Best Bank in Pakistan" in 2005, 2004, 2003, 2001, and in 2000 the "Best Domestic Bank in Pakistan" awards. In addition, MCB also has the distinction of winning the Asia Money 2005 & 2004 awards for being "The Best Domestic Commercial Bank in Pakistan".

MCB offers a wide range of financial products and advice for Personal and Corporate Customers. You can also apply on-line for many of our Online Services. Customers can access their accounts using our simple and convenient MCB Virtual Internet Banking services.

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1.1.3 HISTORIAL BACKGROUND –

Before separation of Indo Pak, the need for more Muslim banks was felt. And Muslims having strong financial capacity were thinking to invest in this sector as well. This was the idea, which paved the way for setting up Muslim Commercial Bank Ltd. known as MCB. This was the third Muslim bank in the subcontinent.

This bank was incorporated under companies’ act 1913 on 9th July 1947 at Calcutta. But due to changing scenario of the region, the certificate of incorporation was issued on 17th August 1948 with a delay of almost 1-year; the certificate was issued at Chitagong. The first Head office of the company was established at Dacca and Mr. GM Adamjee was appointed its first chairman. It was incorporated with an authorized capital of RS.15 million.

After some time the registered office of the company was shifted to Karachi on August 23rd, 1956 through a special resolution, recently the Head office of MCB has been transferred to Islamabad in July 1999 and Head office is termed as Principal Office.

This institute was nationalized with other on January 1st, 1974. At that time it had 506 branches and deposits amounting to Rs.1.640 m. Although MCB has a reputation of a conservative bank but nationalization also left its effects on this institute as well and by end of year 1991 in which it was privatized the total number of branches were 1.287 and deposits amounting to as high as Rs.35,029 m.

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When privatization policy was announced in 1990, MCB was the first to be privatized upon recommendations of World Bank and IMF. The reason for this choice was the better profitability condition of the organization and less risky credit portfolio which made'' it a good choice for investors. On April 8th, 1991, the management control was handed over to National Group (the highest bidders). Initially only 26% of shares were sold to private sector at RS. 56 per share

1.1.3 REVOLUTIONS IN MCB –
• • • • • • • • Incorporated in Calcutta, India on 9th July 1947 First chairman – Mr. G.M Adamjee Head office was shifted to Dhaka in August 1948 Head office was shifted to Karachi in august 1956 Nationalized on 1st January 1947 Privatized on 8th April 1991 Fist chairman after privatization – Mr. Mian Muhammad Mansha Head office transferred to Islamabad 1991.

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1.1.4 MISSION STATEMENT –
“To become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work.”

1.1.5 THE BUSINESS –
MCB is in it’s over 50 years of operation. It has a network of over 900 branches all over the country with business establishments in Sri Lanka and Bahrain. The branch break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) and Baluchistan (3%) respectively.

1.1.6 MCB PHILOSOPHY –

MCB Bank knows the best to deal with its customers and thus has a customer oriented philosophy. The MAB philosophy in their words is described below – “For us, you are not just a set of numbers; you are a valued customer whom we know by name. This helps us serve you exactly the way you want us to – that’s the difference! We offer effective solutions derived from our personal knowledge of all your banking requirements which are met when we meet you…by name.”

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1.1.7 MARKET STANDING –
MCB has an edge over other local banks, as it was the first privatized bank. The State Bank of Pakistan has restricted the number of branches that can be opened by foreign banks, an advantage that MCB capitalizes because of its extensive branch network.

Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer.

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 multi national concerns. MCB is also catering to the growing middle class by providing new asset and liability products. The Bank provides 24 hour banking convenience with the largest ATM network in Pakistan covering 41 cities with over 225 ATM locations. The Bank’s Rupee Traveler Cheques have been market leaders for the past six years and have recently launched their Gift Cheques Scheme.

MCB looks with confidence at year 2005 and beyond, making strides towards fulfillment of its mission, "to become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work".

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1.1.8 AWARDS –
MCB bank Ltd. has also been awarded by the Euromoney Awards and the Asia Money Awards. The prestigious Euromoney award has been given to MCB for five times in the past six years.

EUROMONEY AWARD –

BEST BANK IN PAKISTAN 2005 –

MCB is the only bank to receive the Euromoney Award for Excellence for the fifth time in the last six years.

BEST BANK IN PAKISTAN AWARD 2004 –

In a continuous winning streak, MCB took pride in 2004 by receiving the Euromoney prestigious award of excellence for being the best bank in Pakistan for the fourth time in the last five years.

BEST BANK IN PAKISTAN AWARD 2003 –

MCB won the Euromoney Award 2003 for the Best Bank in Pakistan for the year 2003 due to its quality, integrity and dedication, striving to achieve collective success by understanding changing trends and assimilating into diverse cultures.

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BEST BANK IN PAKISTAN AWARD 2002 –

MCB received the Best Bank in Pakistan award for the year 2002 at the Euromoney Awards 2002.

BEST DOMESTIC BANK AWARD 2000 –

MCB was awarded the Euromoney Award 2000 for the Best Domestic Bank in Pakistan for the year 2000.

ASIA MONEY AWARDS –

THE BEST DOMESTIC COMMERCIAL BANK AWARD 2005 –

MCB received the Asia Money Award for the Best Domestic Bank Award in the year 2005.

THE BEST DOMESTIC COMMERCIAL BANK AWARD 2004 –

MCB has a distinction of winning the Asia Money 2004 award for being the Best Domestic Commercial Bank in Pakistan.

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1.1.8 PRESS RELEASES –
MCB has always been the favorite for press and what the press states about MCB and its awards is mentioned below –

EUROMONEY AWARDS –

London, July 14, 2005: MCB has again received the esteemed Euromoney Award for the “Best bank in Pakistan”. It is the only bank to receive the Euromoney Award for Excellence for the fifth time in the last six years.

The prestigious banking award was conferred on the Bank in a ceremony held in London, which was attended by the distinguished bankers representing leading banks and financial institutions of the world. Mr. Mohammad Aftab Manzoor, President and Chief Executive of MCB received the award.

MCB continues to expand its retail and corporate banking with diversified products and services portfolio. The Bank continuously endeavors to achieve leadership in innovation and customer convenience. Its emphasis has always been on multi delivery channels. Along with its easily accessible branches, the bank provides the largest network of ATMs and the most comprehensive Internet banking solution. The Bank is also the largest issuer of plastic with the largest share in ATM and Debit transactions in the county.

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The Bank has made strong inroads in the corporate banking arena, having closed some large deals and a number of large transactions including advisory business besides actively participating in various syndicated arrangements. It has also provided innovative cash management solutions and structured financing activities to a large number of top corporations of the country. In the low interest rate environment of last year, MCB introduced various initiatives to increase its fee-based income and has successfully managed to show growth in its bottom line. It has ended the monopoly of select foreign banks in the areas of hedging and derivative products by offering innovative solutions to the corporate clients. Parallel to the traditional mode of banking, MCB has also been expanding its Islamic Banking operations across the country. MCB has also been active in debt and equity markets, which also contributed a significant share in its profit growth.

The consistency with which the Bank has been receiving international accolades makes MCB truly the Best Bank in Pakistan.

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ASIA MONEY AWARDS –

May 2005: MCB has once again received the award of the “Best Domestic Commercial Bank in Pakistan” from Asia Money. This is the second consecutive year that the bank has earned this prestigious award for its leadership position in the banking industry of the country.

The award has been conferred up on the Bank for its consistent growth and staying ahead of the increasing competition. Asia Money commends the Bank’s strategy of focusing on fee based income by expanding its investment banking and cash management services at the time of low interest rates during the past year to increase its revenue and profitability. It further elaborates that the Bank has introduced several new derivative and hedging products for its corporate clients, which were previously offered only by a few foreign banks. It added that now Pakistan’s top corporate depends on MCB to provide first rate syndicated lending services.

MCB is the only bank that has received two Asia Money Awards for the best domestic bank in Pakistan besides four Euromoney Awards in the last five years for “The Best Bank in Pakistan” in recognition of its consistent and enviable performance.

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NORMAL OPERATIONS OF THE BANK –

TIMINGS MCB Bank follows the rules stated by The State Bank of Pakistan. Bank Timings Public Dealing Friday Saturday 9 am to 5 pm 9 am to 5 pm 9am to 1pm – 3pm to 5pm 9 am to 5pm

WORKING DAYS Bank working days are six, from Monday to Saturday.

WORKING METHODS MCB Bank follows computerized system they do follow manual system but to a very small extent. They use a banking software program ‘SYMBOLS’ to run the bank's business operations.

The Bank is implementing the full suite of the latest version of SYMBOLS Version 8. Muslim Commercial Bank runs SYMBOLS e-Finance modules to deliver personalized services to its customers over multiple delivery channels, while SYMBOLS Enterprise Operations Center serves as its core banking transaction processing engine.

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COMPETITORS –

• • • • • • • • • • • • • • • • • •

National Bank of Pakistan Bank Al falah United Bank Allied Bank of Pakistan Citibank Habib Bank Ltd. Faysal Bank Prime Commercial Bank ABN Amro Bank Saudi Pak Commercial Bank Indus Bank Soneri Bank The Bank of Khyber Bank of Punjab Gulf Commercial Bank Metropolitan Bank Standard Chartered Askari Bank

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1.1.7 OBJECTIVES OF ORANIZATION –
The following are the objectives of Muslim Commercial Bank Limited.

CREATING AND MANAGING VALUES –

The first objective of Muslim Commercial Bank Limited is to create and mange the values, which is one of the back bone of the objectives of any well organized and managed organization.

HUMAN VALUES –

The second objective of Muslim Commercial Bank is to take care of the Human capital which is a necessary thing for the development and prosperity of any well established organization.

BEST PLACE TO WORK –

The third objective of Muslim Commercial Bank Limited is to make it a place which is much feasible and comfortable for employees of the bank. The MCB is always conscious in developing such place where employees of the bank feel easiness.

TECHNOLOGY –

The forth objective of Muslim Commercial Bank Limited is to bring new and latest technology in the operations of the bank. At MCB, technology has a direct relation with your needs; it is a means for creating value and convenience for the customer. Over the

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last few years MCB has invested heavily into strengthening its technology backbone. Today it is leading the way in banking technology and setting new standards for the banking industry; penetrating into the local market, listening to the needs of the people and educating them of simple financial products and services that create both value and convenience. MCB’s strength lies in providing a technological base at the grass roots level of the society with a challenge to educate and assimilate such systems across vast cultural and economic backgrounds. With over 768 automated branches, 243 online branches, over 151 MCB ATMs in 27 cities nationwide and a network of over 16 banks on the MNET ATM switch, MCB continuously innovate new products and services that harness technology for the customer’s benefit.

UNDERSTANDING RELATIONSHIPS –

The fifth and very important objective of Muslim Commercial Bank Limited is to create such an environment which is suitable for creating understanding and relationship between the employees, thus going towards the way of development and prosperity. Over the years, MCB has fostered strong bonds with its customers. Understands them; their needs. They feel comfortable with MCB; it’s their bank; it responds to them; listens to them; partners with them; grows with them. At MCB, banking is all about being there for people, making a home in their hearts-continuously building relationships on mutual trust and confidence. We understand that relationships are about expectations-our products and services are based on your customers, expectations. Be it financing for personal or business related needs, funds transfer and trade related facilities or need for different types of deposit accounts, MCB offers you a variety of products and services customized to satisfy your individual needs.

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UNDERSTANDING CONVENIENCE –

The next objective of Muslim Commercial Bank Limited is to make understanding a convenient thing for the whole environment of the bank, for the purpose of boosting up its values and prosperity in such a competitive environment. Convenience is what the customer is looking for; and this is what we at MCB are continuously striving to provide. Whether it is the 24 hours cash convenience of our ATM network or the easy availability of financing requirements or simple opening of account, MCB has tailored its products and services to make your life easier. MCB knows the particular needs of its diverse customer base d continuously develop products and services that fulfill these needs.

UNDERSTANDING RELIABILITY –

The last but not least objective of Muslim Commercial Bank Limited is to make an environment which have an understanding of reliability in the whole structure of the bank. With a strong financial base, a promising team and the right resources, MCB has proved to be a reliable partner indeed. MCB understands the special needs of the business, trading and agricultural sectors. Strategically located branches in small towns and cities provide warm services and advice to the small businessmen and local traders. MCB speaks their language; it understands their needs and provides tangible results. By responding in a timely manner with a flexible approach, MCB provides its clients with the reliable financial service and support they require to successfully achieve their business objectives. With a solid foundation of over 50 years in Pakistan and having recently completed 10 successful years of privatization, MCB is strongly positioned to lead the banking sector in the new millennium. You can feel safe in our hands.

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MANAGEMENT SYSTEM

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2.1 MANAGEMENT SYSTEM –

MANAGEMENT OF MCB BANK LTD • • • • • • • Tariq Rafi Sheikh Mukhtar Ahmed Mohammad Arshad Shehzad Saleem Raza Mansha Sarmad Amin Mian Umer Mansha Director Director Director Director Director Director Director

AUDIT COMMITTEE • • • Mian Mohammad Mansha Sheikh Mukhtar Ahmed Shehzad Saleem Chairman Member Member

CHIEF FINANCIAL OFFICER • Ali Amin

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COMPANY SECRETARY • Tameez-ul-haque

AUDITORS • • A.F. Ferguson & Co. M. Yousuf Adil Saleem & Co. Chartered accountants LEGAL ADVISORS • Mandiwalla & Zafer Advocates and legal consultants REGISTERED OFFICE • MCB Building, F – 6/G – 6 Jinnah Avenue, Islamabad PRINCIPAL OFFICE • Adamjee House, 2nd Floor 1.1 Chundrigar Road, Karachi

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MANAGEMENT COMMITTEE

• • • • • • • • • • •

M.U.A Usmani Malik Abdul Waheed Salman Ahmed Usmani Ali Munir Muhammad Aftab Manzoor Shahid Sattar Aniq Khawar Shoaib Qureshi Mussadiq Ijaz Zafar Abbas Naqvi Ammar Hassan Zaidi

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2.1.1 ORGANIZATIONAL STRUCTURE OF MCB BANK LTD –
As MCB is a banking company listed in stock exchange therefore it follows all the legalities which are imposed by concerned statutes Mr. Muhammad Mansha is chairman & chief executive of the company with a team of 10 directors and 1 vice chairman to help in the business control and strategy making for the company.

Operational Management of the bank is being handled by a team of 10 professionals. This team is also headed by Mr. Muhammad Mansha. The different operational departments are Consumer Banking & IT div; Financial & Inter branch div; Banking operations div; HR & Legal div; financial control & Audit div; Credit management div; Commercial Banking div; Corporate Banking div; Treasury management & FX Group and lastly Special Assets Management (SAM) Group.

For effective handling of branches, it has been categorized into three segments with different people handling each category. These categories are:

• • •

Corporate Banking Commercial Banking Consumer Banking

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CORPORATE BANKING These are branches, which have an exposure of over Rs. 100 million. Usually includes multinational & public sector companies.

COMMERCIAL BANKING The branches which has a credit exposure of less than Rs. 100 million but having a credit portfolio of more than Rs. 20 million (excluding staff loans) Usually branches in large markets and commercial areas come under this category.

CONSUMER BANKING These are the branches that have exposure up to Rs. 20 million and these include all the branches that are neither corporate nor commercial branches. Recently the organizational structure was re-designed as follows:

PROVINCES WISE BRANCHES –

Corporate 20 branches

Consumer 637 branches

Commercial 383 branches

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NUMBER OF BRANCHES IN DIFFERENT LOCALITIS –

Punjab Sindh NWFP Baluchistan Azad Kashmir Domestic Overseas EPZ Total

601 217 112 35 16 981 4 1 986

Among the four overseas branches three are located in Sri Lanka and one in Bahrain. Furthermore, the bank has some proposals under consideration to open more brunches in some European countries and as well as in Japan & china.

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2.1.2 ORGANIZATIONAL STRUCTURE –

• • • • • •

President Group heads Divisions and field Circle offices Regional offices Branch offices

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LINE OF BUSINESS (LOB) – ORGANIZATION
President and CEO

Group Head Corporate

Group Head Commercial North

Group Head Commercial South

South Karachi North Karachi

Lahore East Lahore West Faisalabad Gujranwala Abbotabad Sargodha Peshawar

Karachi East Karachi west
Karachi Central

Quetta Bahawalpur Multan Hyderabad Sukkur

General Manager/ Circle Offices

General Manager/ Circle Offices

General Manager/ Circle Offices

Regional Managers/ Regional Offices

Regional Managers/ Regional Offices

Regional Managers/ Regional Offices

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2.1.3 MANAGEMENT HIERARCHY –
Branch – Eden Centre

Chief Manager

Operational Manager

Credit Department

Supervisor

Operation Officer

Clearing

Cash Dept. (Chief cash)

Teller

Teller

Deposits/withdrawals

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POLICY FORMATION PROCESS – At MCB Bank all policies are formulated at the Head Office at Karachi and are then distributed among the vast network of more than 950 branches of MCB. Among some of the policies they implement are that the Commercial Office – East or West, keeps in view new opportunity for a suitable and profitable location for its new branch. But as all policies are done by the HO no suitable information could be gathered.

MANAGERIAL POLICIES – Managers handle their staff at branch level. The duties assigned to them are to keep the monthly deposit up to the mark; opening of new accounts has to be either stable or increasing.

They are responsible for assigning leaves to their staff on yearly basis and even handle emergency absence. MCB has a rule of working 9 to 5 daily but, internally their staff has alternate off on Saturdays. The manager has to develop a leave program so as this routine does not disturbs any customer.

They have to handle the problems of disappointed or angry customers and convince them about the best service MCB provides.

They receive specific targets which they have o achieve within the given time period which results in bonuses distributed among the staff and the manager released by the HO.

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MCB PRODUCTS AND SERVICES

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3.1 MCB PRODUCTS AND SERVICES –

3.1.1 PODUCT FOCUS OF MCB – “OUR BUSINESS IS TO MAKR SURE THAT YOUR CASH MANAGEMENT
NEEDS ARE MET; NO HALF BAKED SOLTIONS”.

3.1.2 WORKING CAPITAL LOANS –
Based on the customer specific needs, the corporate bank offers a number of different working capital finance facilities including Running finance, Cash finance, export refinance, preshipment & post shipment etc. Tailor-made solutions are developed keeping in view the unique requirements of the customers business.

3.1.3 TRADE FINANCE –
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.

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3.1.4 INVESTMENT BANKING –
MCB’s investment banking team has emerged as a leading player in Pakistan’s Investment Banking arena .The team handles advisory, corporate finance and capital markets related transactions. With these areas, the team has developed expertise in • • • • • • • Private Placements Debt/equity underwriting Term Finance Certificates Loan Syndication Arrangements of Non funded facilities Mergers and acquisitions Privatization Corporate Advisory

3.1.5 TERM LOANS –
MCB offers Short or medium term Finance certificates to meet capital expenditures and short term working capital requirements of its customers. The loans are structured on the basis of underlying project characteristics and ash flows of the business.

3.1.6 CASH MANAGEMENT –

MCB‘s network of over 900 branches in Pakistan enables us to collect and disburse payments efficiently with our cash management services. This also enables us to offer

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you a choice of paper based or electronic fund transfer solutions including collection amounts, cross branch on- line transactions etc.

3.1.7 MCB ONLINE SERVICES –

With a solid foundation of over 50 years in Pakistan, with more than 750 automated branches, 269 online branches, over 190 MCB ATMs in 34 cities nationwide and a network of over 16 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 neverending drive to achieve higher levels of excellence, constantly striving to raise the level of performance.

3.1.8 MCB ATM SERVICES –

With an ever growing number of ATMs operating across the nation, the MCB ATM Network is the largest and most advanced of its kind in the country, and is part of MCB's continuing efforts to provide you with convenience that suits your requirements most. And now the MCB ATM has gone global. MCB's affiliation with Master Card International brings about added facilities for the MCB traveler abroad with the Cirrus and Maestro networks.

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MCB ATM WITHIN PAKISTAN – MCB Bank has the largest ATM Network in the country with over 200 ATMs and over 300 online branches. The MCB ATM Card can be used in over 35 cities in Pakistan. Whether customers want to withdraw cash or ask for a mini-account statement, or even use it as a debit card at Maestro POS terminals, the MCB ATM Card gives its customers instant access to their bank account, anytime, anywhere. Additional Conveniences – MCB's revolutionary M-Net Switch enables customers to access their MCB

Account from any member bank's ATM Machine.

Mobile Banking

helps use GSM Phone to access mini-account statements

and balance information from anywhere.

Funds Transfer

Facility enables to transfer funds from one registered ATM

account to another. MCB's Funds Transfer facility is available to all MCB customers who maintain Pak rupee accounts at any on-line branch and are MCB ATM cardholders. This facility is available at any time you find convenient, 24 hrs, and 365 days.

MCB ATM INTERNATIONALLY – MCB ATM Card can be used to access MCB account from anywhere around the globe.

MCB ATM is accepted at 634,700 locations where there are *Master Card

or

Cirrus

ATMs allowing a daily withdrawal limit of US$ 200 (or equivalent in

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other currencies) on availability of funds in account. Plus, the added convenience of shopping through over 5 million Maestro POS (Point of Sales) terminals globally. ATMS’ ADDITIONAL INFORMATION –

PIN CHANGE –

PIN change option is now given so that customers can have added security with their card. For added security, it is advisable to customers to change their PIN as soon as they receive the card. It is also advisable to keep on changing PIN on a regular basis. If customers feel that their PIN has been disclosed to others, be sure to change the number as soon as possible.

PIN FORGOTTEN –

Customers are advised to memorize their PIN and are asked to never write their PIN down on anything in their wallet, or on the card itself. In case if customers forget their PIN, a new card will have to be made, which can be done by returning the old card to the MCB online branch and submitting an application for a new card. The new card can be received by MCB users within 72 hours to 5 days.

DAMAGED CARD –

If card breaks in two or gets distorted, please return the card to MCB Online branch. Customers can receive new MCB ATM card from MCB Online branch within a few days.

CARD LOSS –

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from MCB Online branch within a few days. If card is not returned from the ATM, contact the branch where the card is lost. Customers will have to complete a form and will then receive their card from MCB Online branch. • INCORRECT PAYMENT –

If by any chance the ATM does not dispense the correct amount of money or does not dispense the money at all, customers can contact the branch where the ATM was used or their home branch and inform them immediately. They will have to complete a form and the amount will then be credited to their bank account.

ATM RECEIPTS –

Customers are advised to keep their ATM receipts after every transaction. It is a good way to guard against fraud and make record-keeping easier.

3.1.9 MCB ATM REGULAR CARD –
MCB ATM allows withdrawal of up to Rs. 10,000 per day and a maximum of 3 withdrawals per day per card.

3.1.10 MCB GOLD CARD –
MCB gold card allows Rs. 25000/- per day and a maximum of 6 withdrawals per day are allowed.

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3.1.11 MCB BILL PAYMENT –
For the first time in Pakistan, MCB has introduced unique service - MCB ATM Bill Pay which allows customer to pay utility bills and recharge their mobile phones the easy waythrough MCB ATM's, available 24 hours-365 days. This facility is for all MCB ATM Card holders and MCB ATM Cash Card holders alike.

It is faster, easier, convenient and more secure. Customers can decide when he has to make the payment and how much he wants to pay. It’s secure as customers do no have to carry cash or even their bill, they can just use any MCB ATM to pay their utility bills and recharge mobiles around the clock.

MCB ATM account holders can pre-register their MCB account(s) and Consumer / Account numbers of the Utility Company / Service Provider with their home branch to avail this service.

MCB ATM Cash card holders can directly enter the Consumer / Account numbers of the Utility Company/Service Provider onto the relevant ATM screen to make the utility bill payment or to recharge their mobile phones.

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3.1.12 MCB MOBILE BANKING –

At the forefront of technological excellence, MCB has proudly introduced MCB MOBILE BANKING. MCB mobile banking provides the convenience of accessing account balance information and mini statements whenever the customer is available. MCB Mobile Banking service is available to all MCB ATM cardholders, 24 hours - 365 days. They just have to call MCB Help Line on (021) 111-000-777 or any MCB online branch for assistance. MCB Mobile Banking gives customer easy and quick access to their account(s) at any time including holidays. With MCB Mobile Banking customer can

• •

Check your balance View the last 4 transactions of your MCB account

MCB Mobile Banking is a free service for MCB account holders who have an ATM card. All they have to pay for is the cost of an SMS message if charged by the service provider.

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3.1.13 MCB CALL CENTRE –

Keeping up with banking services can be tedious but not with MCB Bank, where phone service is at fingertips. The customers just have to dial Help Line from the comfort of their home or office or wherever they happen to be. It offers basic banking services for their convenience, eliminating the need for them to make unwanted trips to branch.

MCB CALL CENTRE SERVICES –

BANKING SERVICES –

Balance Inquiry (receive details through fax, SMS or email - registered users) Foreign Exchange Rates (receive details through fax, SMS or email -registered users) Account Statement Cheques book requests

ATM SERVICES –

ATM Lost / Stolen Reporting (Hot / Warm) ATM Transaction Details, History & Complaints

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MCB MOBILE BANKING SERVICES –

M-PIN Reset Block / Unblock Service

RUPEE TRAVELER CHEQUS (RTC) SERVICES –

RTC Verification (receive details through fax, SMS or email -registered users) Lost / Stolen Reporting (receive details through fax, SMS or email -registered users)

OTHER SERVICES –

Product Information (receive details through fax, SMS or email -registered users. ATM Locator (receive details through fax, SMS or email -registered users) Branch Locator (receive details through fax, SMS or email -registered users) Tele-banking Services Management i.e. TPIN change, Block / Unblock service Customer Complaints Fax & email Service

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3.1.14 MCB SMART CARDS –

Smart Card is a multi-function debit card that provides with round the clock access to bank account for purchasing, cash withdrawals and other transactions.

MCB’s Smart Card is a secure and convenient instrument of payment with unmatched functionalities. It provides 24-hour direct access to bank account. The convenience and flexibility of MCB Smart Card helps live a smarter life. It not only helps managing expenses, but also eliminates undue interest on day to day credit card transactions. Balance is always within reach and customers can spend accordingly.

MCB is the only bank to introduce a debit card that gives the option to choose from domestic and international cards for local and global usage respectively. Customers can avail the following functionalities on MCB Smart Card.

Smart Card is available in the Classic and Gold category with a further choice of Local or International versions. With these card categories, supplementary cards for family members are also available. The difference between the classic and gold categories is based on their purchasing and withdrawal limits as given below.

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ATM Withdrawal Limit (Rs.) Local Classic Gold International Classic Gold 10,000 25,000 10,000 25,000

POS Purchasing Limit (Rs.) 50,000 100,000

100,000 150,000

MCB SMART CARDS’ FEATURES –

• • • • • • • •

Purchasing Bill payments Funds transfer Cash withdrawals Balance inquiry Mini statement Mobile banking Internet banking

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3.1.15 MCB DEBIT CARD –
MCB Debit Card is a secure, convenient and quick payment facility that enables to do purchasing by using existing MCB ATM / MCB Smart Card as a DEBIT CARD.

MCB DEBIT CARD FEATURES – • • No need to carry cash, when MCB Card is your companion. Acceptability of your card at Merchant Locations, including Petrol Pumps, Grocery Stores, Bakeries, Departmental Stores, Jewelers, Travel Agents, Restaurants, chemists, hospitals and many more locations displaying this sign. • When MCB Card is used, payment is made by directly debiting your Bank account. • No need for signature, as PIN (Personal Identification Number) is being used for security.

3.1.16 MCB CASH CARD –
The wide spread acceptability and frequent use of MCB ATM Cards has prompted the Bank to add more value to the cards which cater to customers evolving cash needs enabling them to go ahead with ease and convenience. This reinforces MCB commitment to provide to its customers safe and secured mode of cash substitute.

MCB CASH CARD is useful means of cash for MCB customers and non customers alike: • • Travelers Businessmen

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General Public

MCB CASH CARD DENOMINATIONS – MCB Cash Cards are issued in the following preloaded denominations.

MCB Classic Card (CL) Rs 5,000 (Rupees Five Thousand) MCB Silver Card (SL) Rs 10,000 (Rupees Ten Thousand)

All the MCB CASH CARDS of different denominations have the same design, feature, size and are easy to place in the wallet.

MCB CASH CARD FEATURES –

MCB Cash Card Pin Code is confidential and is only known to the purchaser. It can be changed from the MCB ATM Machines.

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MCB Cash Card if lost or stolen then the same will be immediately marked "HOT" on request of purchaser.

The amount remaining on the MCB Cash Card account will be refunded to the purchaser

• •

Loss/ theft will only be entertained through the original purchaser. Loss / theft are to be reported to the issuing branch by the purchaser or MCB Cash Card / ATM Help Line Call Centre (111-000-777).

MCB CASH CARD ADVANTAGES – MCB ATM Cash Card enables MCB customers / non customers to meet their day-to-day cash requirements and settlements of their commercial / personal cash requirements transactions. Secure MCB ATM Cash Card is the safest alternative to cash because the purchaser can be rest assured of its security. If the ATM Cash Card is lost it would be cancelled immediately and the purchaser would get the amount refunded easily subject to completion of refund formalities.

Ease of use MCB ATM Cash Card is the best because unlike other modes of transfer of Funds / Remittances which are drawn on a particular branch and can only be en cashed at that branch. MCB ATM Cash Card holder can draw cash from any of MCB ATMs all over the country, M-Net Members ATMs and Cirrus Member ATMs globally. MCB CASH CARD is disposable and with a prescribed determined value. When the value of MCB CASH CARD is utilized fully and the balance amount is NIL the cards will be discarded.

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Sale procedure Sale procedure of MCB CASH CARD is also very simple, any one who is customer of MCB or a non customer of the Bank may purchase the MCB CASH CARD through any of our Authorized Online Branches with ease and completion of minimum formalities. The purchaser is required to fill an application Form CC-10 and hand over the same at the counter of any authorized online branch of his choice and the rest will be done by the friendly staff of the bank.

3.2 OTHER PRODUCTS –

3.2.1 MCB PYARA GHAR –

MCB offers three home financing options for Pyara Ghar. MCB Pyara Ghar provides flexible and competitive home financing facility with options of home purchase, construction and renovation. With the MCB Pyara Ghar Scheme customers can obtain the financing to purchase a house/apartment, construct own house or renovate existing house immediately. Nothing could be more convenient than owning a house and paying easy installments that takes a step closer to becoming the owner of their house. It is better than paying a monthly house rent which takes no where other than increasing your expenses. Pyara Ghar is definitely the most feasible and direct route to a dream house.

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MCB gives its customers their dream home at the best possible mark-up rates. They can choose either one of their two mark-up rate options- fixed or variable. They also have an option to club spouse’s income to avail higher financing amount.

Early repayment option is tailor-made to allow making partial prepayments at dates that suit Pyara Ghar Clients.

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MCB PYARA GHAR BENEFITS –

• • • • • • •

Option to Purchase, Renovate or Construct. Competitive financing rates. Financing tenure from 2-20 years. Financing up to Rs. 20 Million. BTF-hassle free process to transfer your facility from another institution. Pre-approved for Auto Finance. Service at your doorstep.

Home Purchase
Financing Amount Rs. 500k to Rs. 20 m

Home Renovation
Rs. 500k to Rs. 7m

Home Construction
Rs. 500k to Rs. 10m

BTF
Rs. 500k to Rs. 15m

75:25 for businessmen 65:35 for businessmen 65:35 for businessmen 80:20 for all segments with 3 years business with 3 years business with 3 years business proof proof proof Loan to Value Ratio 80:20 for businessmen 70:30 for businessmen 70:30 for businessmen with 5 years business with 5 years business with 5 years business proof proof proof 80:20 for salaried employees Tenure 3 - 20 years 70:30 for salaried individuals 2 - 20 years 70:30 for salaried employees 3 - 20 years 3 - 20 years

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MCB PYARA GHAR ELIGIBILITY –

• • •

Pakistani national residing in an approved city. Not less than 21 years or more than 65 years (at the time of finance maturity). Salary / income is at least Rs. 18,000 per month with monthly installment not exceeding 50% of the take-home salary/income.

• •

Association with business / profession for at least 3 years. Salaried Individuals.

MCB PYARA GHAR FACILITIES –

INSURANCE – MCB Pyara Ghar provides its customers the mandatory property insurance (for the amount of loan). The life insurance is optional; however MCB encourages its customers to go for it as it secures the loan repayment, hence securing their family.

BALANCE TRANSFER FACILITY – In case customers have a home loan outstanding with another bank for at least one year, they can have it transferred to MCB through a hassle-free process on much better terms. • • Preferred Rate Break in Processing Fee

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PROCESSING – Customers are advised to carefully read and fill out the MCB Pyara Ghar application and the Letter of Understanding (LOU), which will be provided at their doorstep by MCB sales staff. Submit it along with the related documents. On the approval of application, customers will get a Sanction letter.

In case of Home Purchase the property will be transferred through relevant Housing Authority / Registrar office / Society in your presence along with Bank’s authorized officer, lawyer and seller of the property. Whereas for others, MCB will disburse the sanctioned amount in your presence and bank’s authorized officer.

EXCELLENCE – • • • Convenient access through more than 1000 MCB branches. Relationship with MCB, a bank with over 50 years of quality service. Financing up to Rs. 20 Million (depending upon your income and appraised value of your property). • Independent Service Quality Representatives to assist customers.

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3.2.2 DEPOSIT ACCOUNTS –

MCB offers two major categories of accounts. • • Local currency accounts and Foreign currency accounts.

Among the local currency accounts MCB offers Khushali Bachat account, Pak Rupee Saving account, Pak Rupee Current Account, Pak Rupee Term Deposit, Special Pak Rupee Term Deposit, Saving 365, Saving 365 Gold, and Basic Banking Accounts. And among the foreign currency account MCB offers Foreign Currency Saving Account, Foreign Currency Current Account.

KHUSHALI BACHAT ACCOUNT –

Khushali Bachat Account is one of the most popular deposit accounts offered by MCB. It’s a special type of account which provides the account holder additional facilities for payment of utility and HBFC. • • • Low average balance requirement. Profit is paid on your account on a half yearly basis. Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan (conditions apply). • Withdraw cash through Pakistan’s largest ATM network.

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Make cash free transactions, at thousands of merchant outlets through MCB Smart Card (local & international).

Customers can stay in touch with their account through MCB’s Virtual Banking Service.

They can use their account to pay bills 24 hours a day, 7 days a week through Virtual Banking.

They can get instant updates about their account through MCB’s sms banking.

PAK RUPEE SAVING ACCOUNT –

• • • •

Low average balance requirement Enjoy unlimited free of cost transaction facility. Profit is paid on account on a half yearly basis Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan (conditions apply)

• •

Withdraw cash through Pakistan’s largest ATM network. Make cash free transactions, at thousands of merchant outlets through MCB Smart Card (local & international)

• •

Stay in touch with MCB’s Virtual Banking Service. Customers can use their accounts to pay their bills 24 hours a day, 7 days a week through Virtual Banking

Customers can get instant updates about their account through MCB’s sms banking.

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PAK RUPEE CURRNT ACCOUNT –

• • • •

Low average balance requirement. No Zakat or withholding tax deductions. Enjoy unlimited free of cost transaction facility. Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan (conditions apply).

• •

Withdraw cash through Pakistan’s largest ATM network. Make cash free transactions, at thousands of merchant outlets through MCB Smart Card (local & international).

• •

Stay in touch through MCB’s Virtual Banking Service. Customers can use their account to pay bills 24 hours a day, 7 days a week through Virtual Banking.

Customers can get instant updates about their account through MCB’s sms banking.

PAK RUPEE TERM DEPOSIT ACCOUNT –

Avail choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits.

• •

Low investment threshold. Half yearly profit payment.

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Avail a credit facility up to 75% of the total deposit value.

SPECIAL PAK RUPEE TERM DEPOSIT ACCOUNT – • MCB’s Special Rupee Term deposits offer a very attractive long term investment option with ease and convenience. • • • • • • Highly attractive profit rates. Tenors available are 3 months, 6 months, 1, 3 and 5 years. Profit on 3 and 6 months deposit is payable at maturity of deposit. Profit on 1, 3 and 5 years deposit is payable quarterly. Profit can withdraw your profit amount through MCB’s wide network of ATMs. Avail a credit facility up to 75% of the total deposit value.

SAVING 365 – The MCB Saving Account offers facilities of Current Account. The MCB Saving 365 calculates profits on a daily product basis and gives you the facility of unlimited withdrawals. • • • • Open a Saving 365 Account with a minimum initial deposit of Rs. 300,000. Low average balance requirement. Enjoy unlimited free of cost transaction facility. Profit is paid on account on a half yearly basis.

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Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan (conditions apply).

Withdraw cash through Pakistan’s largest ATM network.

Make cash free transactions, at thousands of merchant outlets through your MCB Smart Card (local & international).

• •

Stay in touch through MCB’s Virtual Banking service. Customers can use their account to pay their bills 24 hours a day, 7 days a week through Virtual Banking.

Customers can get instant updates about their account through MCB’s sms banking.

Customers can avail a credit facility up to 75% of the total deposit value

SAVING 365 GOLD – As balance grows, so does the rate of return on Savings 365 Gold account.

Open a Saving 365 Gold Account with a minimum initial deposit of Rs. 10 Million.

• • •

Offers a tiered profit rate structure. Enjoy unlimited free of cost transaction facility. Profit is paid on account on a half yearly basis.

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Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan (conditions apply).

Withdraw cash through Pakistan’s largest ATM network.

Make cash free transactions, thousands of merchant outlets through MCB Smart Card (local & international).

• •

Stay in touch with MCB’s Virtual banking service. Customers can use their account to pay bills 24 hours a day, 7 days a week through Virtual Banking.

Customers can get instant updates about their account through MCB’s sms banking.

Customers can avail a credit facility up to 75% of the total deposit value.

BASIC BANKING ACCOUNT – In compliance with the directives of State Bank of Pakistan via BDP Circular No. 30, issued on November 29, 2005, the Basic Banking Account has been launched with effect from February 27, 2006. This product has been introduced to facilitate the low income group as well as the existing account holders who wish to convert their regular savings or current account into Basic Banking Account.

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The Basic Banking Account is a current account and can be opened with a minimum initial deposit of Rs. 1000/- only. Account holders will be allowed 2 deposit transactions (either cash or through clearing) and 2 withdrawals (cash or clearing) each month. All customer-initiated transactions over and above this limit will be charged a transaction fee. However unlimited free of charge cash withdrawals are allowed through MCB's own ATMs. There will be no minimum balance maintenance requirement, and hence no monthly account maintenance charges will apply. In cases where balance in BBA remains ‘zero’ for a continuous 6 month period, the account will be closed automatically, without any notice to the account holder.

FOREIGN CURRENCY SAVING ACCOUNT – MCB’s Foreign Currency Savings Account offers attractive returns on Foreign Currency investment. • Open a foreign currency Savings account in any of the four currencies i.e. US Dollar, UK Pound Sterling, and Euro. • • • • • Unlimited transaction facility. Low balance requirement. Profit credited to customers account on a half yearly basis. Customers can avail a credit facility up to 75% of the total deposit value. A foreign currency account can be opened at any of MCB’s foreign exchange dealing branches.

FOREIGN CURRENCY CURRENT ACCOUNT –

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MCB’s Foreign Currency Current Account offers its customers the convenience of unlimited withdrawals i.e. access to their funds whenever they want without any notice. There is no limit on the number of transactions they can make in a day. • Open a foreign currency Current account in any of the four currencies i.e. US Dollar, UK Pound Sterling, and Euro. • • • • Unlimited transaction facility. Low balance requirement. Customers can avail a credit facility up to 75% of the total deposit value. A foreign currency account can be opened at any of MCB’s foreign exchange dealing branches.

3.2.3 INSTANT FINANCING –

Customers can get a loan in an instant at any MCB branch. MCB is offering same day financing facility against liquid collateral at competitive pricing to its customers.

3.2.4 MCB REMIT EXPRESS –

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MCB sends money fastest to Pakistan, anywhere in Pakistan. International remittances with a two-way messaging facility delivered at customer’s doorstep within 24 to 72 hours. Fast, secure and easy-to-use, MCB's Remittance Services is an efficient way to transfer money overseas. Customers can remit funds from any country to Pakistan through Swift System. Customers are required to provide the following Swift Code to their bank in their country. The following details are to be included: • • Name and Account Number of Beneficiary Name of the Branch/ Name of the city (Where beneficiary is maintaining an account). • • • • • • Easiest and safest way to remit funds Remittance within 24 to 72 hours Personal delivery to the beneficiary Delivery confirmation to the remitter Message facilities for both parties The beneficiary will receive the amount even if he/she does not have an MCB account

3.2.5 MCB CAR FINANCING –

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Car financing and leasing at competitive rates with flexible options. Car4u finances both semi-commercial and non-commercial vehicles for personal and business use. FLEXIBLE – • • • • • • • • Option for financing or leasing Financing tenures from 1 to 7 years. Options for new as well as used cars. Option for local as well as imported cars. Financing up to Rs.20 lacs. Option for early payment Option for Replacement Loan. Option for first year insurance financing.

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AFFORDABLE – • • • • Lower mark-up rates. Lower insurance rates Only up to 10% down payment. Equal monthly installments.

SPEED – • • Fast and hassle free processing of application. Priority delivery on different vehicles.

SPECIAL BENEFITS – • • Option to pay 1st installment after three months. Pay down payment after loan is approved.

AVAILABILITY – • • Currently available in 16 major cities. Will soon be launched in Rahim Yar Khan, Sukkur, Mianwali, Abbottabad, Mardan and many more cities.

EXISTING CUSTOMERS – • MCB offers 1% discount to its existing customers for Personal Loan, Pyara Ghar or Business Sarmaya.

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3.2.6 MCB RUPEE TRAVELLER CHEQUES –

MCB Rupee Traveler's Cheques 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 Cheques- The safest way to Carry Cash the most widely accepted way to pay cash for travel related purposes. RTC is a safe and secure way to make payments nationwide. MCB Bank has been at the forefront of providing it’s customers with new and innovative products and financial instruments that are safe, secure and profitable.

• •

Easily available: Buy them from any of the designated branches in Pakistan. As good as cash: MCB RTCs are safe to carry and can be used without any inconvenience especially by Travelers.

• • •

Easily en-cashed: At any designated MCB branch. Easily refunded: in case of loss or theft, you can get the full amount back. Exclusive security features: Due to special printing and safety precautions, Cheques cannot be duplicated.

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Denominations: Available in denominations of Rs 1000, Rs 5000, Rs 10,000 and gift Cheques of Rs 500.

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• •

Valid until Used: Validity of Cheques indefinite. More than 900 MCB Authorized branches are selling and purchasing Cheques all over Pakistan.

MCB Rupee Traveler's Cheques are also available at the counters of Foreign Banks such as ABN Amro and HSBC and private bank i.e. Bank Al-Habib.

MCB RTC GIFT CHEQUES –

MCB Gift Cheques eliminates guesswork in trying to find out the perfect Gift for any occasion birthdays, wedding, graduation and religious festivals. Gift Cheques is beautifully packed in a Gold / Silver envelope with a personalized Gift Card designed to suit all occasions. They are safer than cash, because they can be replaced if lost or stolen. They are also available at all TCS Express Centre round the clock.

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3.2.7 MCB EASY PRSONAL LOAN –

Personal loans for salaried individuals of reputed local and foreign companies at rates tailored to customer's repayment capacity. FEATURES OFFERED – • MCB will lend any amount, from Rs 30,000 to Rs 490,000, depending upon net monthly income. • Customers can choose tenure of 1 to 3 years for the repayment of the loan.

FACILITIES AVAILABLE – • • • Bank to Bank balance transfer. Credit Card balance transfer. Loan Protector Shield- insurance coverage of balance loan amount in case of death or permanent and total disability. • Availability of early repayment option.

REPAYMENT ARRANGEMENTS – Repayment of principal and mark-up is monthly and can be repaid using either one of the following modes: • • • Direct Salary Transfers. Payroll Deduction. Post-dated Cheques.

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ELIGIBILITY – • • • • • • Minimum net monthly income Rs 10,000. 25 to 55 years of age. Pakistani national. Permanent resident of Karachi. At least 2 years of employment with current employer. Initially offered to employees of selected institutional MCB customers in Karachi.

PROCESSING FEE – Processing fee of 1% of the principal loan amount to be charged at the time of loan disbursement.

3.2.8 MCB CORPORATE FINACING –

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

WORKING CAPITAL LOANS – Based on the customer’s 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 their customer’s business.

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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. INVESTMENT BANKING – MCB Investment Banking Team has emerged as a leading player in Pakistan's Investment Banking arena. The Team handles advisory, corporate finance and capital markets related transactions. Within these areas, the team has developed expertise in: • • • • • • • • Private Placements Debt/Equity Underwriting Term Finance Certificates Loan Syndication Arrangement of Non- Fund Facilities Mergers and Acquisitions Privatization Corporate Advisory

CASH MANAGEMENT SERVICES – MCB network of over 900 branches in Pakistan enables them to collect and disburse payments efficiently with their cash management services. This also enables them to

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offer its customers a choice of paper based or electronic fund transfer solutions including collection amounts, cross branch on- line transactions etc.

3.2.9 MCB VIRTUAL BANKING –

MCB, the leader in banking technology, now provides the convenience of banking on the internet. Customers can now access their account anytime and anywhere MCB Virtual Internet Banking offers its customers the convenience to manage and control their banking and finances – when they want to, where they want to. It is convenient, simple, secure and totally free of cost. MCB Virtual Internet Banking offers its customers the convenience to manage and control their banking and finances – when they want to, where thy want to. MCB’s Virtual Internet Banking facility is simple and secure and it’s free of cost. With MCB Virtual Internet Banking customers can access any of the banking services, 24 hours a day, 7 days a week and throughout the year. MCB VIRTUAL BANKING SERVICES – MCB Virtual Internet Banking offers a wide range of online services which makes their banking accessible anytime and from anywhere. • • Detailed Account Summary of all listed accounts. Mini-statements of each of the listed accounts showing recent transaction history for that account(s). • Statement-by-Period of each of the listed accounts, based on the period specified.

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Immediate or Scheduled Transfer of Funds between customers 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. Cheques 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

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3.2.10 MCB LOCKERS –

MCB lockers provide the best protection for customer’s valuables. Lockers of different capacities are available nationwide.

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3.2.11 MCB BUSINESS SARMAYA –

“MCB Business Sarmaya” is the best Running Finance facility against residential property which empowers to manage business dealings better. So customers can get MCB Business Sarmaya and thus improve their business, avail lucrative opportunities and expand their business, with absolute satisfaction of cash flows.

FLEXIBLE – • • • • • Running finance facility to use when and for whatever they want. Financing up to Rs. 20 million. Renewed every year Customers can pay back when they want No fixed monthly payment

AFFORDABLE – • Lower mark up and that too only on utilized amount.

HIGH LOAN AMOUNT – • Loans up to 70% of the value of house / flat.

SPEED – • Fast and hassle free processing of application after completion of documents.

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EASE – • Doorstep service and assistance from dedicated sales staff to fill and submit application along with the documents. WIDE ACCESSIBILITY – • Customers can access their Business Sarmaya accounts through MCB’s vast ATM and branch network anywhere in Pakistan. SPECIAL BENEFITS – • Hassle free process to transfer similar facility from any other bank at a special discount. AVAILABILITY – • Available in all major cities i.e. Karachi, Lahore, Faisalabad, Rawalpindi and Islamabad. EXISTING CUSTOMERS – • Customers can get discounts if they are already a customer of similar facility of any other bank.

3.2.12 MCB MASTER CARD –
MasterCard International has expanded globally in more locations in the world than any other card. The card was introduced by Muslim Commercial Bank Limited in 1995 and now offers card members over 15 million outlets in 232 countries.

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Photo security- The first bank in Pakistan to introduce the enhanced feature of photograph on the card limiting fraud in case of card loss.

• • • •

Welcomed at over 3, 000 outlets in Pakistan. Provides up-to 45 days Free Credit. Joining and Annual Fees to suit its customers. 24 Hour Customer Services- Call 111-700-700 and customers can get information from their customer services representatives on new card application or have their queries resolved anytime of the day.

Cash Advance Facilities available in Pakistan and worldwide.

3.2.13 MCB EASY BILL PAY –
MCB provides its customers the facility to pay their utility bills anywhere, anytime through their three convenient options. MCB Easy Bill pay offers unmatched convenience to pay utility and mobile phone bills or re-charge their prepaid mobile phone accounts anywhere, anytime with security and peace of mind. MCB bank is the only bank that offers its customers three convenient options of making bill payments to PTCL, SSGC, Instaphone, Mobilink, Paktel, and Ufone. So, customers can save their precious time by avoiding long queues and pay bills through MCB Easy Bill Pay. MCB Smart card or MCB ATM Card Holder can easily pay their bills or re-charge their prepaid mobile phone account through the following convenient options of MCB Easy Bill Pay:

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• • •

MCB ATM MCB Call Centre MCB Virtual Banking

3.3 MCB ISLAMIC BANKING –
MCB is the place where they work as a team, having no barriers, no boundaries. At MCB, everything they do is rooted in their values and a true understanding of this diversified market. At the core of it lie not only achieving successful results, but the curiosity to delve into the consumer’s insights for a better and a simpler lifestyle. The bank possesses sufficient expertise, necessary infrastructure, information technology, and manpower to run Islamic Banking Operation. MCB understands the special needs of the customers desirous of availing local and international financing facilities for their business and trading under Islamic Modes. MCB now provides its customers with the reliable Islamic Financial Services and support they require to successfully achieve their business objectives. Keeping in view the said purpose bank has recently formed Islamic Banking Division and Islamic Banking

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Management Committee under the supervision of Mr. Muhammad Shoaib Qureshi, Senior Executive Vice President and Head of Bank’s Operations and Islamic Banking Group, who has an experience of more than 36 years covering all segments of 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 – The minimum deposit requirement for Al-Makhraj Saving Account is only Rs. 10,000 and profits can be earned 6-monthly. Other features associated with this product are as follows: • • • • Minimum Deposit: Rs. 10,000 Minimum Monthly Balance: Rs. 10,000 Islamic Tools used in designing the product: Mudaraba/ Musharaka Product to be availed by: Individuals & Joint Account Holders (Local and Foreign), Companies, Corporate, Trusts, etc • Special Advantages: For Customer= Bi-Annual Profit Payment; Withdrawal Facility Shariah = Meets requirements for Shariah Compliance • Additional Features: Personalized Cheques books Withdrawal Facility from ATM Online deposit/ withdrawal facility as per bank's policy

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Debit card Utilities payment via ATM card Mobile Banking Call center facilities 6-monthly profit payment Free bank balance certificates (once in 6 months) Taking stop payment/ hold mail/ standing instructions Issuance of duplicate statement of account (as per Schedule of Charges) Personal financial consultancy services (regarding Shariah Compliant products) Choice of statement frequency (as per Schedule of Charges) • • Balance for Profit Calculation: Monthly Average Balance Frequency of Announcements: The first announcement shall be made at the end of December 2003) • • Profit Payment Options: 6-Monthly Weight ages: Initially single weight age for product; Later weight ages can be made according to tiers (Volume-wise) • • Communication Process: Announcement on notice boards, and website Banking Network: IBD's Branch only

IANAT ACCOUNT – For customers who are looking for a chequing account that gives them the ease of doing unrestricted number of transactions, MCB offers Al-Makhraj Ianat Account. With a minimum of only Rs. 10,000, Ianat Account may be opened. With all the features and

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facilities that this product offers, it is highly recommended for management of business funds. Details of the product are as follows: • • • Minimum Deposit: Rs. 10,000 Minimum Monthly Balance: Rs. 10,000 Product to be availed by: Individuals & Joint Account Holders (Local and Foreign), Companies, Corporate, Trusts, etc • Additional Features: Personalized Cheque books Withdrawal Facility from ATM Online deposit/ withdrawal facility as per bank's policy Debit card; Utilities payment via ATM card Mobile Banking Call center facilities Free bank balance certificates (once in 6 months) Taking stop payment/ hold mail/ standing instructions Issuance of duplicate statement of account (as per Schedule of Charges) Personal financial consultancy services (regarding Shariah Compliant products) Choice of statement frequency (as per Schedule of Charges) • Banking Network: IBD's Branch only

AL-MAKHRAJ TERM DEPOSIT ACCOUNT –

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A minimum of only Rs. 25,000 is needed to invest money in Al-Makhraj Term Deposit. Choice of tenors can be made from a list of options namely 1, 3 & 6 months, 1, 2, 3 or 5 years. Profit payment options available to customers are monthly, quarterly and/ or at maturity. However, monthly profit payment and deposit product of 1 month are not available currently. Details of the product are as follows: • • • Minimum Deposit: Rs. 25,000 Islamic Tools used in designing the product: Mudaraba/ Musharaka Tenors Available: 1 month, 3 month, 6 month, 1 yr, 2 yrs, 3 yrs & 5 yrs (1-month product to be made available later in a few months’ time) • Product to be availed by: Individuals & Joint Account Holders (Local and Foreign), Companies, Corporate, Trusts, etc • Special Advantages: For Customers= Profit Payment Options customized to suit needs of customers; Minimum Deposit requirement’s lower than most banks so it is more accessible/ affordable for people Shariah= Meets requirements for Shariah Compliance • Additional Features: Call center facilities Taking hold mail/ standing instructions for profit payments etc Personal financial consultancy services (regarding Shariah Compliant products) Frequency of Announcements: The first announcement shall be made at the end of the month of December 2003.

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Profit Payment Options: Monthly/ Quarterly/ At Maturity (Monthly payment option to be made available later in a few months time) Weightages: Different weightages based on tenors and profit payment options Communication Process: Announcement every month on notice boards, and website • Banking Network: IBD's Branch only

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FUNDS BASED FACILITIES – MCB Islamic Banking provides funds based facilities for Ijarah Products, Equipment Ijarah, Car Ijarah, and Murabahah.

3.3.1 ISLAMIC BANKING DIVISION Islamic Banking Division has been formed with effect from 1st January 2003, which in a short span of time, has developed Islamic Banking Products, prepared Operational Manual, arranged local & international training for its own executives as well as at all management level.

3.3.2 ISLAMIC BANKING MANAGEMENT COMMITTEE –
Recently the bank has established an Islamic Banking Management Committee comprising of the senior executives representing various important functions of the bank, such as, Credit & Risk Management, Finance, Treasury, Operations, Islamic Banking Division and Sharia Advisor. The objective of this committee is to review the products offered by Islamic Banking Branches, and to improve them not only to make them competitive and practicable but also make them truly Sharia Compliant.

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3.4 MCB SERVICES –

3.4.1 FIELD OF ACTIVITIES –
Commercial banks are the most effective mobilizer of savings and have bee providing short term requirements of working capital to trade, commerce & industry .The commercial banks are authorized to engage in forms of business.

The banks play a very important role in economy of a country. Businesses depend upon banks for carrying out various activities relating to finances, obtaining agency services etc .Banks provide facilities to individuals too. The manifold services of the bank can be divided into major head as the purpose of banks is to provide some services to the general public. And for this purpose different banks provide different services to the people in different forms. The Muslim Commercial Bank (MCB) is a commercial bank, in modern time commercial banks play a very important role and their functions are manifold. The main functions and services which Muslim Commercial Bank Limited provides to different peoples are as follows.

• • • • •

Open Different accounts for different peoples Accepting various types of deposits Accepting various types of deposits Granting loans & advances Undertaking of agency services and also general utility functions, few of those are as under:

• •

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• •

Transfer of money from place to place. Acting an executor, trustee or attorney for the customers. ‘Providing safe custody and facilities to keep jewelry, documents or securities.

Issuing of travelers Cheques and letters of credit to give credit facilities to travel.

• • • •

Accepting bills of exchange on behalf of customers. Purchasing shares for the customers. Undertaking foreign exchange business. Furnishing trade information and tendering advice to customers.

For proper functioning of branches and the over all bank has been divided in different departments. These departments handle different jobs so that division of work is there for improvement of functions and also it is easy to control the situation.

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MARKETING MIX

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MARKETING MIX –
Marketing mix is one of the key concepts in modern marketing era. "Marketing Mix is the set of marketing tools that the firm uses to pursuits marketing objectives in the target market". Marketing is very essential in the increment of profit of an organization. It has been observed that the Union Bank is looking after all the basic requirements. The management of Union Bank is concerned enough to accept and modify the desired changes in their organizational setup to attract maximum customers. There is no separate department for marketing in every branch only Karachi main branch hold it. In every branch 2 or 3 people are there to provide the promotion services. Marketing is done on high level because management is centralized. Now are discussed four variables of marketing mix of Union Bank. • • • • Product Price Placing Promotion

Price

Placing

Marketing Mix
Product Promotio n

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MARKETING MIX - PRODUCT
"Any thing that can be offered to a market for attention, acquisition, use for consumption that might satisfy a need. It includes physical object, services, persons, places, organization and ideas."

- The largest network of 315 on-line branches in the country and growing, providing customers with 24 x 7 real time online transaction facilities.

- Enjoy the convenience of extended banking hours from 9 to 5, even on Saturdays for satisfying banking at all MCB Full Day Banking Branches all across the country where customers are now served with wide range of services throughout the day.

-

A deposit account for customer with substantial balances, offering profit

on daily product basis with the facility of unlimited withdrawals. MCB SPECIAL RUPEE TERM DEPOSITS – MCB’s Special Rupee Term Deposits offer a very attractive long term investment option with ease and convenience. Tenor’s option available is of 3 months, 6 months, 1 year, 3 years, and 5 years. Customers can also avail a credit facility up to 75% of total deposits.

- The best protection for the valuables of MCB customers. Lockers of
different capacities are available nationwide.

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- International remittances with a two – way messaging facility
delivered at customer’s doorstep within 24 to 72 hours.

MCB ISLAMIC BANKING – MCB Islamic Banking provides Riba Free and Shariah Compliant solutions to various customer segments in a growing number of cities. With the help of Shariah Specialties, lawyers and professional commercial bankers, MCB offers the best solutions to cater their customers’ needs – the Islamic way.

MCB CARDS – A local point of sale acquiring network facilitating acceptance of all major card brands.

- MCB Smart card and ATM card holders can avail cash withdrawal facility at over 900,000 ATMs worldwide.

- MCB Smart card and ATM card holders can enjoy the convenience of shopping at over 5 million POS locations globally.

- MCB provides the convenience of banking on the internet. Whether at office, home or traveling, customers can log on to www.mcb.com.pk and enjoy 24 – hour access to customers for their accounts at MCB for the largest array of services.

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- customers can call for answers to their queries about banking services, ATM services, mobile banking services, RTC services, Tele – banking services, and MCB product information.

- MCB mobile banking brings banking to fingertips. Customers can dial in anytime to get information regarding balance and mini statements.

- MCB has the largest network of ATMs with around 210 at present and is still growing. Customers can get 24 hour convenience of cash withdrawal, mini statement, bill payment, and funds transfer services.

- MNET is an electronic hub for ATM sharing plus other touch points. Members include 12 local financial institutions enjoying ATM sharing and bureau services. MNET is Pakistan’s largest operating switch with the highest transaction volume.

- MCB easy bill pay is an easy solution to pay utility and mobile phone bills. MCB ATM card and MCB Smart Card holders can easily pay their bills through MCB ATMs, MCB Virtual Banking, and MCB Call Centre with security and peace of mind.

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- MCB customers can get a loan instantly at MCB Branches. MCB offers same day financing facility against liquid collateral at competitive pricing. CORPORATE FINANCING – providing access to diversified financing options, including working capital loans, term loans, trade finance services, and investment banking.

- RTC is the most widely accepted way to pay cash for travel – related purposes. MCB RTC is a safe and secure way to make payments nationwide.

- MCB Business Sarmaya is a running finance facility against residential property. It offers running finance up to 20 million with low mark up and BTF facility at competitive rates.

- MCB Pyara Ghar is an ideal home finance product that allows customers to purchase, renovate or construct their home the way the want to. Financing available is up to 20 years for amount up to 20 million.

- MCB Car4U auto finance is the power move that gets customers not only car of their choice but leads to the best in life. It is affordable with competitive mark up, flexible conditions, easy processing and above all no hidden costs.

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MARKETING MIX – PRICE

"The amount of money that customers pay for the product"

Price should be commensurate with the offers perceived value. If it is not, customers will turn to competitor's product. Prices offered by MCB Bank Limited are according to the high quality services they render to their customers. About the markup charges it’s vary banks to banks but not very much difference according to my analysis. MCB bank has different tenure to different products so and also the different rates to charge. They believe in the higher the amount the higher the profit.

MARKETING MIX – PLACE

"Place includes the various activities the company undertakes to make the product accessible and available to the customer".

They also have a banking network of more than 950 branches. If you want financial advice, walk into any of their branches. Head office and Main office is on the in Karachi, which is the center of business activity. Locations of MCB Bank depend on the locality around and how much business it supports. The services provided to customers too depend on the location of the branch and its total deposits.

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About the future development union bank is looking forward to open its more branches in the various cities of Pakistan. This will create more flexibility and also give the diversification to the bank.

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MARKETING MIX – PROMOTION –
"Promotion includes all activities that an organization undertakes to communicate and promote the products to customers. Promotion programs consist of advertising, sales promotion and public relations."

At MCB Bank it is appreciated if staff member introduces new customers but usually it is based on personal relations. Advertising is done in form of Neon signs and signboards. They publish their brochures and pamphlets so that the information is communicated to a large number of people. They distribute calendars, diaries and key chains to their officers and customers. No doubt MCB bank is doing promotion activities very strongly. The marketing department knows the competitive environment very well. And the department is working very well in this context. Promotion managers are using every media to advertise their products as others banks are doing.

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SWOT ANALYSIS

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5.1 SWOT ANALYSIS –
5.1.1 STRENGTHS – • • • Services offering are all Unique and different to others. Have the advantage of being the first mover in customer services. MCB Bank able to give really good customer care, because they know that customers are the source of funds for them and also there is a great competition among the banks in Pakistan. • • Very well and good atmosphere in bank. Attractive deposits and financing schemes offer by MCB bank with suit able interest rate. • • • MCB bank is currently in a good financial position Great check on operations and working of business through the Mystery shoppers. MCB Bank is always there, with absolute convenience and cutting edge technology, to provide service beyond horizons. • Online banking is the key feature. Key benefits of MCB Bank Online system is its simplicity, convenient banking solutions over phone, instant access to banking services from anywhere at anytime, and saves time and money. • Use of ‘SYMBOLS’; banking software which produces greater customer satisfaction by providing better services. • MCB bank has an edge over other banks with regard to its timings which are from 9am – 5pm throughout the week and even on Saturdays.

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Islamic banking is especially popular among religious people and is opted by Muslims from all around the globe.

Various types of personal loans are offered to general public for e.g. Car4u, Pyara Ghar etc.

MCB Banks virtual Banking provides greater convenience to customers as they can handle their transactions from anywhere at anytime.

• • • •

Diversification of their portfolio. Greater network with more than 900 branches all around Pakistan. Better control on losses. Distinctive customer service provided to customers.

5.1.2 WEAKNESSES –

• •

Difficulty in managing the extended network of branches. MCB Bank has various types of Debit card but it does not provide its customers the facility of Credit Card.

• •

Need to focus more Human Resource issues. Shortage of staff, which causes extra burden on existing staff leading to fatigue and boredom.

Inexperienced hiring process which results in placement of the wrong person at the wrong seat.

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5.1.3 OPPORTUNITIES – • Changes in social patterns, population, and lifestyle changes and in economical. Mean people now thinking to deposit their money in such a sound bank. • Good financial position creating a good reputation for future advances and huge deposits. • The MCB bank is entering in a growing industry and also going to further expand its branches all over Pakistan as well as internationally. • Such products or services which can give MCB Bank a monopolistic position.

5.1.4 THREATS – • • • • Large and increasing competition. Threat of new entrants is always there. Threat of new entrants leads to the tough competition. ‘Hundi’ system is still operating in Pakistan in growing rate, which is a great threat of the Remittance department of the union bank limited.

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FINANCIAL STATEMENT ANALYSIS

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6.1 FINANCIAL STATEMENT ANALYSIS –

SIX YEARS PROGRESS REPORT

OPERATING RESULTS

2005

2004

2003

2002

2001

(Rupees in Million) Mark-up / Return Mark-up / Return expensed Fee, Commission, Brokerage and FX income Fund based Income Dividend and Capital Gains Total Income Provisions / write-off Operating expenses Exceptional Items Operating Profit Before tax and provision Profit before taxation Profit after tax Dividends Bonus shares 17,756 2,781 4,065 14,975 1,348 20,388 1,072 6,638 341 14,091 13,079 8,922 1,215 853 9,084 2,058 3,061 7,026 1,172 11,259 429 7,286 514 4,487 4,058 2,432 843 337 4,444 3,613 2,230 843 307 10,370 2,933 2,118 7,437 2,414 11,969 831 7,565 3,822 3,100 1,739 666 400 15,386 6,075 1,909 9,311 681 11,901 722 6,079 17,033 7,545 1,944 9,488 257 11,689 2,256 7,332 4,357 2,101 1,108 606

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Profit before taxation 14000 Rupees in Millions 12000 10000 8000 6000 4000 2000 0 1 2 3 Years 4 5 4058 3613 3100 13079

2101

Profit after tax 10000 Rupees in Millions 8000 6000 4000 2000 0 1 2 3 Years 4 5 2432 2230 8922

1739

1108

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MCB BANK LTD CONSOLIDATED BALANCE SHEETS AS AT DECEMBER 31, 2005 ASSETS Cash and Balances with treasury banks Balances with other banks Lending to financial institutions Investments – net Advances – net Other assets – net Operating fixed assets Deferred tax assets – net LIABILITIES Bills payable Borrowing from financial institutions Deposits and other accounts Subordinated loan Liabilities against asset subject to finance lease Other liabilities Deferred tax liabilities – net NET ASSETS EQUITY Share Capital Reserves Unappropriated Profit Surplus on Revaluation of assets - net of tax 4,265,327 13,408,005 210,662 17,883,994 5,423,769 23,307,763 3,371,800 5,661,553 359,340 9,392,693 5,354,323 14,747,016 3,065,273 4,379,255 281,636 7,726,164 3,382,529 11,108,693 8,536,674 27,377,502 229,345,178 1,598,280 8,611,600 275,469,034 23,307,763 7,566,684 8,396,320 8,693,965 32,627,951 219,966,057 211,511,393 1,598,720 1,599,360 6,398,239 6,372,596 314,154 707,306 244,537,819 261,214,926 14,747,016 11,108,693 2005 2,366,549 1,469,333 9,998,828 69,481,487 180,322,753 5,464,426 8,182,454 191,967 298,776,797 2004 2003

23,833,253 24,053,669 5,708,323 1,302,592 10,965,297 10,430,450 67,194,971 128,276,842 137,317,773 97,200,179 6,265,397 6,477,064 7,999,821 4,582,823 259,284,835 272,323,619

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CONSOLIDATED BALANCE SHEETS HORIZONTAL ANALYSIS

ASSETS

Increase or (Decrease) 2005 - 2004 PKR % (21,466,704 Cash and Balances with treasury banks ) (90.07) Balances with other banks (238,990) (74.26) Lending to financial institutions (966,469) (8.80) Investments - net 2,286,516 3.40 Advances - net 43,004,980 31.31 Other assets - net (800,971) 12.78 Operating fixed assets 182,633 2.28 Deferred tax assets - net 191,967 39,491,962 15.23 LIABILITIES Bills payable Borrowing from financial institutions Deposits and other accounts Subordinated loan Liabilities against asset subject to finance lease Other liabilities Deferred tax liabilities - net NET ASSETS EQUITY Share Capital Reserves Unappropriated Profit Surplus on Revaluation of assets net of tax 893,527 7,746,452 (148,678) 8,491,301 69,446 8,560,747 26.50 136.80 (41.38) 90.40 1.29 58.05 969,990 18,683,537 9,379,121 (440) 2,213,361 (31,415) 30,931,215 8,560,747 12.81 214.90 4.26 (0.03) 34.59 12.65 12.64 58.05

Increase or (Decrease) 2004 -2003 PKR % (220,416) 4,405,731 534,847 (6,181,871) 40,117,594 (211,667) 3,416,998 (13,038,784) (829,636) (23,933,986) 8,454,664 (640) 25,643 (393,152) (16,677,107) 3,638,323 (0.92) 338.20 5.13 47.62 41.27 3.26 74.56 (4.78) (9.88) (28.96) 3.99 (0.04) 0.40 (55.58) (6.38) 32.75

306,527 1,282,298 77,704 1,666,529 1,971,794 3,638,323

9.99 29.28 27.59 21.56 36.82 32.75

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CONSOLIDATED BALANCE SHEETS VERTICAL ANALYSIS Percentage of Total Assets 2005 2004 2003 % % % 0.79 9.19 8.83 0.49 2.20 0.48 3.34 4.22 3.83 23.25 25.91 47.10 60.35 52.96 35.69 1.82 2.16 2.37 2.73 3.09 1.68 0.06 100.00 100.00 100.00

ASSETS Cash and Balances with treasury banks Balances with other banks Lending to financial institutions Investments – net Advances – net Other assets – net Operating fixed assets Deferred tax assets – net LIABILITIES Bills payable Borrowing from financial institutions Deposits and other accounts Subordinated loan Liabilities against asset subject to finance lease Other liabilities Deferred tax liabilities – net NET ASSETS EQUITY Share Capital Reserves Unappropriated Profit Surplus on Revaluation of assets - net of tax

2.85 9.16 76.76 0.54 2.88 92.19 7.80

2.92 3.35 8.84 0.61 2.46 0.12 94.31 5.68

3.08 11.98 77.66 0.58 2.34 0.59 95.92 4.07

1.42 4.48 0.07 5.99 1.81 7.80

1.30 2.18 0.14 3.62 2.06 5.68

1.13 1.61 0.10 2.83 1.24 4.08

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MCB BANK LTD CONSOLIDATED INCOME STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2005 2005 17,756,23 2 2,781,468 14,974,76 4 (98,982) 1,242,153 1,184 1,144,355 13,830,40 9 2,448,950 430,344 531,455 866,895 851 1,084,576 5,413,071 19,243,48 0 NON MARK-UP / INTEREST EXPENSES Administrative income (Reversal) / other provisions Other charges Total non mark up / interest expenses Exceptional item Compensation on delayed tax refunds PROFIT BEFORE TAXATION 6,459,480 (72,740) 178,841 6,565,591 340,598 13,018,48 7 2004 9,083,863 2,057,640 7,026,223 (172,876) 442,595 1,200 8,771 279,690 6,746,533 1,992,356 378,908 492,738 804,419 (11,440) 576,007 4,232,988 10,979,52 1 7,244,200 149,593 41,864 7,435,657 513,852 4,057,716

Mark -up /return / interest earned mark -up /return / interest expensed Net mark-up /interest income (Reversal) /provision for diminution in value of investments Provision against loans and advances Provision for potential lease loses Bad debts written off directly

Net mark -up / interest income after provisions NON MARK-UP / INTEREST INCOME Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain /(Loss) on investment Gain / (loss) in trading in government securities Other income Total non - mark -up /interest income

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Taxation - Current year - Prior year - Deferred PROFIT AFTER TAXATION CONSOLIDATED INCOME STATEMENTS HORIZONTAL ANALYSIS

4,611,359 (149,763) (365,524) 4,096,072 8,922,415

1,555,764 70,420 1,626,184 2,431,532

Increase or (Decrease) PKR % Mark -up /return / interest earned mark -up /return / interest expensed Net mark-up /interest income (Reversal) /provision for diminution in value of investments Provision against loans and advances Provision for potential lease loses Bad debts written off directly Net mark -up / interest income after provisions NON MARK-UP / INTEREST INCOME Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain /(Loss) on investment Gain / (loss) in trading in government securities Other income Total non - mark -up /interest income NON MARK-UP / INTEREST EXPENSES Administrative income (Reversal) / other provisions Other charges Total non mark up / interest expenses Exceptional item Compensation on delayed tax refunds 8,672,369 723,828 7,948,541 73,894 799,558 (1,200) (7,587) 864,665 7,083,876 456,594 51,436 38,717 62,476 12,291 508,569 1,180,083 8,263,959 (784,720) (222,333) 136,977 (870,066) (173,254) 95.470055 35.1775821 113.126797 -42.743932 180.652289 -100 -86.500969 309.151203 105.000242 22.9172899 13.5747992 7.85752266 7.76659925 -107.43881 88.2921562 27.8782505 75.2670267 -10.83239 -148.62527 327.195204 -11.701266 -33.716712

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PROFIT BEFORE TAXATION Taxation - Current year - Prior year - Deferred PROFIT AFTER TAXATION

8,960,771 3,055,595 (149,763) (435,944) 2,469,888 6,490,883

220.832877 196.404789 -619.06277 151.882444 266.94623

CONSOLIDATED INCOME STATEMENTS VERTICAL ANALYSIS Percentage of Profit after taxation 2005 2004 199.01 373.59 31.17 84.62 167.83 288.96 -1.11 13.92 0.01 12.83 155.01 27.45 4.82 5.96 9.72 0.01 12.16 60.67 215.68 72.40 -0.82 2.00 73.59 3.82 -7.11 18.20 0.05 0.36 11.50 277.46 81.94 15.58 20.26 33.08 -0.47 23.69 174.09 451.55 297.93 6.15 1.72 305.80 21.13 Page 104 of 147

Mark -up /return / interest earned mark -up /return / interest expensed Net mark-up /interest income (Reversal) /provision for diminution in value of investments Provision against loans and advances Provision for potential lease loses Bad debts written off directly Net mark -up / interest income after provisions NON MARK-UP / INTEREST INCOME Fee, commission and brokerage income Dividend income Income from dealing in foreign currencies Gain /(Loss) on investment Gain / (loss) in trading in government securities Other income Total non - mark -up /interest income NON MARK-UP / INTEREST EXPENSES Administrative income (Reversal) / other provisions Other charges Total non mark up / interest expenses Exceptional item Compensation on delayed tax refunds

MCB BANK LTD.

PROFIT BEFORE TAXATION Taxation - Current year - Prior year - Deferred PROFIT AFTER TAXATION

145.91 51.68 -1.68 -4.10 45.91 100.00

166.88 63.98 2.90 66.88 100.00

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RATIO ANALYSIS – Financial analysis, while varying according to the particular interest of the analyst, always involves the use of various financial statements - primarily the balance sheet and income statement and the cash flow statement. Financial analysis involves the use of various financial statements. The balance sheet summarizes the assets, liabilities, and owners' equity of a business at a point in time, while the income statement summarizes revenues and expenses of a firm over a particular period of time and about cash flow it tells the cash generated by the bank. A conceptual framework for financial analysis provides the analyst with an inter-locking means for structuring the analysis. For example, in the analysis of external financing, one is concerned with the firm's funds needs, its financial condition and performance, and its business risk. Upon analysis of these factors, one is able to determine the firm's financing needs and to negotiate with outside suppliers of capital. Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the bank’s performance. Interested parties – Ratio analysis of a firm, s financial statements is of interest to shareholders, creditors and the firm’s own management. Both present and prospective shareholders are interested in the firm’s current and future level of risk and return, which directly affect share price. The firm’s creditors are interested primarily in the short term liquidity of company and its ability to make interest and principal payments. A secondary concern of creditors is the firm’s profitability; they want assurance that the business is healthy. Management is concerned with all aspects of the firm’s financial situation and its attempts to produce financial ratios that will be considered favorable by both owners and creditors.

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RATIOS
2005

YEAR 2004 2003

NET PROFIT RATIO Before tax = Profit before tax / Markup earned

13,018,487 / 17,756,232 = 73.31%

4,057,716 / 9,083,863 = 44.66% 2,431,532 / 9,083,863 = 26.76 %

-

After tax = Profit after tax / Markup earned

8,922,415 / 17,756,232 = 50.24%

-

OPERATING RATIO Operating cost = markup expense + administrative expenses

2,781,468 + 6,459,480 = 9,240,948

2,057,640 + 7,244,200 = 9,301,840

-

Operating ratio = operating cost / markup earned

9,440,948 / 17,756,232 = 53.16%

9,301,840 / 9,083,863 = 102.39%

-

OPERATING EXPENSE RATIO Administrative expenses / markup earned

6,459,480 / 17,756,232 = 36.37%

7,244,200 / 9,083,863 = 79.75%

-

RETURN ON TOTAL ASSETS Profit after tax / total assets
8,922,415 / 298,776,797 = 2.98% 2,431,532 / 259,284,835 = 1.01% -

RETURN ON SHARE CAPITAL Profit after tax / Share capital

8,922,415 / 4,265,327 = 209.18%

2,431,532 / 3,371,800 = 72.11%

-

RETURN ON EQUITY Shareholder's equity = share capital + reserve + unappropriate profit

4,265,327 + 13,408,005 + 210,662 = 17,883,994

3,371,800 + 5,661,553 + 359,340 = 9,392,693

-

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Return on equity = Profit after tax / Shareholder's equity

8,922,415 / 17,883,994 = 5.157%

2,431,532 / 9,392,693 = 25.89%

-

NET PROFIT PER BRANCH Profit after tax / No. of branches

8,922,415 / 945 = 9441.7

2,431,532 / 946 = 2570.32

-

SOLVENCY RATIO Total assets / total liabilities - issued capital
298,776,797 / 275,469,034 - 4,265,327 = 1.10 times 259,284,835 / 244,537,819 3,371,800 = 1.07 times 272,323,619 / 261,214,926 3,065,273 = 1.05 times

ADVANCE TO TOTAL DEPOSITS Advances / Deposits and other accounts
180,322,753/ 229,345,178 = 78.62% 137,317,773 / 219,966,057 = 62.42% 97,200,179 / 211,511,393 = 45.95%

PROPRIETY RATIO Shareholder’s equity / total assets
17,883,994 / 298,776,797 = 5.98% 9,392,693 / 259,284,835 = 3.62% 7,726,164 / 272,323,619 = 2.83%

CASH TO DEPOSIT RATIO Cash / deposits
2,366,549 / 229,345,178 = 1.03% 23,833,253 / 219,966,057 = 10.8% 24,053,669 / 211,511,393 = 11.37%

SHAREHOLDERS TO TOTAL LIABILITIES Shareholder's equity / Total Liabilities
17,883,994 / 275,469,034 = 6.49% 9,392,693 / 244,537,819 = 3.84% 7,726,164 / 261,214,926 =2.95%

RETURN ON DEPOSITS Profit after tax / Total deposits
8,922,415 / 22,9345,178 = 3.89% = 92.19% 2,431,532 / 219,966,057 =1.10% = 94.31% =95.92% -

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COMMENTS ON FINANCIAL RATIOS – NET PROFIT RATIO – Net profit ratio is the best measure to have an idea about the overall profitability of any organization. More of this ratio better it is. The NP ratio of MCB is increasing it is a good sign. OPERATING RATIO – The operating ratio measures the cost of operations per rupee of sales. It shows the operational efficiency of the business. Higher the ratio, less profits available to share holders. The MCB operating ratio has increased during the year and it is a negative sign. This ratio should be between 75%-80%. But in year 2005 the ratio has declined to 53% which is a sign that MCB this year has given more than usual profits to its shareholders. OPERATING EXPENSE RATIO – The lower the ratio, better it is as it means the greater profitability. But this ratio of MCB is constantly increasing as by passing years showing a decreased profitability for the organization. But year 2005 has proved profitable for MCB as this ratio has declined by a great margin. RETURN ON TOTAL ASSETS – Return on total assets shows the use of total assets in financial year. This ratio has increased during 2005 in MCB which is a sign of good performance. RETURN ON SHARE CAPITAL – Higher the rate better for the owners. In MCB this ratio has increased by a very great margin in 2005. RETURN ON EQUITY – Return on equity is important for shareholders who want to know what profit earned will be made available. This ratio for MCB has decreased in 2004 and in 2005 which is not good a favorable sign. Page 109 of 147

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NET PROFIT PER BRANCH – Net profit per branch is increasing which is the sign of its progress. SOLVENCY RATIO – Solvency ratio determines the firm; ability to pay off its liabilities. MCB solvency ratio has increased in 2005 which is a good sign. ADVANCE TO TOTAL DEPOSITS It is in favor of bank if this ratio is lower. In 2005 this ratio has increased which is not good. PROPRIETY RATIO – Propriety ratio shows the claims of owners and outsiders on the assets of the firm. Higher the ratio better for all concerned. In MCB this ratio has increased in 2005 to 5.98%which is better for the organization. CASH TO DEPOSIT RATIO – Cash to deposit ratio is important for banking sector. For MCB it was constant during previous two years. This ratio shows that how much cash is available to meet the demand of depositors. The bank should have reasonable cash balances to meet the customer requirements against their deposits in bank. Ratio was decreased a little bit in 2004. But in 2005 the ratios has declined to a very dangerous level which should be a matter of concern for the bank. RETURN ON DEPOSITS – When this ratio is higher, it is good for the bank. Return on deposits is increasing which results in more deposits increasing business opportunities for the bank.

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NET PROFIT MARGIN RATIO – Net profit margin ratio is constantly increasing for the bank which is a good sign for the bank. This ratio is to show that is the proportion of net profit to the income of the organization. It gives an idea about the income earning of the bank. EARNINGS PER SHARE – This is very important ratio for shareholders and investor. The shareholders and investors give the main emphasis to the earning per share while making the decision to invest. Earning per share has increased in 2005 which is very good from the perspective of its shareholders and investors. DEBT TO TOTAL ASSET RATIO – Debt-to-Total Assets indicates the percentage of firm’s assets that are supported by debt financing. In case of MCB Bank, this ratio is revealing a very large amount of debt duly accompanied by large expenses of debt servicing. Further, this ratio is more and less stable in all three years e.g. in 2004, it indicates that for every hundred rupees invested in the bank, debtors and general creditors are providing 94.3% of return. DEBT TO EQUITY RATIO – This ratio indicates the extent to which debt financing is used relative to equity financing. This ratio is an important ratio as it is a direct comparison of internal and external financing. TOTAL ASSET TURNOVER – This ratio shows how actively the assets are being converted into income. This ratio is continuously increasing indicating proper utilization of assets and more and more income generation

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TRAINING PROGRAM

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7.1 TRAINING PROGRAM –
During my six week internship program at MCB Bank – Eden Centre Branch I worked at the Accounts Opening department, Remittances, Clearing and Credit Department. MCB Bank has various departments and among the general and international banking the following departments perform their daily actions: 1. Cash department 2. Deposit department 3. Advances & credit department 4. Foreign exchange department 5. Technology department (new addition in order to cope with the growing needs of day to day technology requirements)

CASH DEPARTMENT –
The following books are maintained in the Cash Department: • • • • • Receiving Cash Book Paying Cash Book Token Book Scroll Book Cash Balance Book

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DEPOSIT DEPARTMENT –
Bank deals in money and they are merely mobilizing funds within the economy. They borrow from one person and lend to another, the difference between the rate of borrowing lending forms their spread or gross profit. Therefore we can rightly state that deposits are the blood of the bank which causes the body of an institution to get to work. These deposits are liability of the bank so from point of view of bank we can refer to them as liabilities. The total deposits of MCB are growing since its inauguration but after privatization there is a sharp incline in over all deposits of the bank. The increase in deposits is also a cause of increase on total number of accounts; bank has progressed in both aspects. INTERNSHIP EXPERIENCE – The first task which was assigned to me was ‘accounts opening’. This develops relationship among the bank and its customer. Following is the procedure for opening an account – OPENING OF AN ACCOUNT – For opening an account, first of all an account opening form is required. This form is an entry to the banking system through ones deposits in the form of cheques and cash. Requirements Two most important requirements for opening an account are • • Original and photocopy of ID card. Introduction

A person can be introduced by any staff member or by any account holder.

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Type of Accounts • • • • • • • • Current account PLS Saving Savings (FCY) Term deposit Notice deposit Call deposit Khushali Bachat Others

Some of the most popular types of accounts and their opening procedure are mentioned below –

CURRENT ACCOUNT – In this type of accounts the client is allowed to deposit or withdraw money as and when he likes. He may, thus, deposits or withdraws money several times in a day if he likes. There is also no restriction of amount to be deposited or withdrawn. However, there is requirement of minimum balance maintenance of Rs. 10,000/-. Usually this type of account is opened by the businessmen. No profit is paid by the bank and no service charges are deducted by the bank on current deposits account. These types of deposits are also exempt from compulsory deduction of Zakat.

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PLS SAVINGS – This type of account is for those persons who want to make small savings'. This type of account is opened with a minimum deposit of Rs. 10,000/-. Under this scheme deposits can be made only up to a-costing amount and withdrawals are allowed twice a week or 8 times a month. If a big amount is required a seven days notice is required before the withdrawal. The profit is paid on these accounts on the minimum balance during a month for the whole of that month. Zakat & other withholding taxes are deducted as per rules of the government.

TERM DEPOSIT ACCOUNT – This is a type of term deposit in which a receipt is issued for varying tenors ranging from 1 month to 5 years or more. These are in the form of receipts and profit on these receipts is paid biannually. These receipts are en-cashable after expiry of the period for which they were issued. Different profit rates are applied to different type of TDRs.

KHUSHALI BACHAT ACCOUNT – This is an advance form of PLS saving a/c, in this type of account. The minimum balance requirement for this type is Rs. 2500/-. There is also restriction on the number of withdrawals as well, i.e. up to 4 times in a calendar month. For maintaining this extra balance the customer gets the benefits of profit calculation on daily product basis and also free service of standing instructions of paying utility bills and HBFC installments. All other rules of saving account are applicable.

BASIC BANKING ACCOUNT (BBA) –

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This type of account is opened by those people who are employed on not very favorable salaries, by students or by housewives. Rs. 1000/- is the minimum balance requirement for this type of account with only two deposits and withdrawals per month.

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ACCOUNT OPENING PROCEDURE FOR INDIVIDUAL ACCOUNT –

The first step to open an individual account is to fill the account opening form SF – 1AA – 1 ( see annexure), Know your customer form SF-1B-1 (see annexure) which is then checked by the operational manager and signatures are taken on a Signature Specimen Card (usually known as SSC). After checking all the information the account is opened on SYMBOLS and customer is then free to deposit or withdrawal any time. If the customer is desirous of ATM card and Cheque book he has to fill out a form for ATM request SF – 1C revised (see annexure) and can collect after one week fro the branch.

The following are the requirements to open an individual account – 1. Attested photocopy of computerized National Identity Card / passport of individual. 2. In case of salaried persons, attested copy of his service card or any other acceptable evidence of service, including, but not limited to a certificate from the employer. 3. In case of a person unable to properly sign, two recent passport size photographs of the new account holder besides taking his right and left thumb impression on the specimen signature card. 4. In case of proprietorship account application on company’s letter head along with the rubber stamp.

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ACCOUNT OPENING PROCEDURE FOR PARTNERSHIP ACCOUNTS –

The first step to open a partnership account is to fill the account opening form SF – 1AA – 1 (see annexure), Know your customer forms SF-1B-1 (see annexure), of all partners, which is then checked by the operational manager and signatures are taken on the Signature Specimen Cards (usually known as SSC). After checking all the information the account is opened on SYMBOLS and customers are then free to deposit or withdrawal any time. If the customers are desirous of ATM card and Cheque book they have to fill out a form for ATM request SF – 1C revised (see annexure) and can collect after one week from the branch.

The following are the requirements to open a partnership account – 1. Attested photocopy of computerized National Identity Card of all partners. 2. Attested copy of “Partnership Deed” of Letter of Partnership (CF – 13, in lieu of the partnership deed, if not available) duly signed by all partners of the firm. 3. Attested copy of Registration Certificate with Registrar of firms. In case the partnership is unregistered, this fact should be clearly mentioned on the Customer Relationship Form. 4. Authority letter (SF – 67) in original, in favor of a person, other than the partners, authorized to operate on account of the firm.

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ACCOUNT OPENING PROCEDURE FOR JOINT STOCK COMPANIES –

The first step to open an account for a joint stock company is to fill the account opening form SF – 1AA – 1 ( see annexure), Know your customer forms SF-1B-1 (see annexure), of all partners, which is then checked by the operational manager and signatures are taken on the Signature Specimen Cards (usually known as SSC). After checking all the information the account is opened on SYMBOLS and customers are then free to deposit or withdrawal any time. If the customers are desirous of ATM card and Cheque book they have to fill out a form for ATM request SF – 1C revised (see annexure) and can collect after one week from the branch.

The following are the requirements to open a joint stock company account – 1. Resolution of Board of Directors for opening of account specifying. The persons(s) authorized to operate the company account. 2. Memorandum and Article of Association. 3. Certificate of Incorporation. 4. Certificate of Commencement of Business. 5. Attested photocopies of CNIC of all Directors. 6. List of Directors in Form-29 issued for the Registrar Joint Stock Companies.

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ACCOUNT

OPENING

PROCEDURE

FOR

CLUBS,

SOCIETIES

AND

ASSOCIATIONS –

The first step to open an account for a Club, Societies and Associations is to fill the account opening form SF – 1AA – 1 ( see annexure), Know your customer forms SF-1B1 (see annexure), of all partners, which is then checked by the operational manager and signatures are taken on the Signature Specimen Cards (usually known as SSC). After checking all the information the account is opened on SYMBOLS and customers are then free to deposit or withdrawal any time. If the customers are desirous of ATM card and Cheque book they have to fill out a form for ATM request SF – 1C revised (see annexure) and can collect after one week from the branch.

The following are the requirements to open a Clubs, societies and Associations1. Certified Copies ofCertificate of Registration. By laws, Rules and Regulations. 2. Resolution of the Governing Body / Executive Committee for opening of account authorizing the person (s) to operate the account and attested copy of the CNIC of the authorized person (s) 3. An undertaking signed by authorized person on behalf of the institution mentioning that when any change takes place in the persons authorized to operate on the account, the bank will be informed immediately.

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ACCOUNT OPENING PROCEDURE FOR MINOR-

The first step to open an account for a Minor is to fill the account opening form SF – 1AA – 1 ( see annexure), Know your customer forms SF-1B-1 (see annexure), of all partners, which is then checked by the operational manager and signatures are taken on the Signature Specimen Cards (usually known as SSC). After checking all the information the account is opened on SYMBOLS and customers are then free to deposit or withdrawal any time. If the customers are desirous of ATM card and Cheque book they have to fill out a form for ATM request SF – 1C revised (see annexure) and can collect after one week from the branch.

The following are the requirements to open a Minor-

1. In case of account being operated n the name of the minor (age below: 28 yrs), the word “MINOR” be added to the title of account. The particular of the Guardian, (if not one of the same account with the minor), be provided as required as required under ‘personal information’ in the account application. 2. Attested copy of CNIC of guardian along-with form B for minor is provided.

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ISSUANCE OF ATM CARDS AND CHEQUES BOOKS –

Customers who wish to apply for MCB ATM card or for their Cheques books have to fill out an ATM request and a Cheques Book requisition slip. This is then posted online and approved by the operational manager. The request is responded by MCB Bank’s head office and Cheque books along with the ATM cards are sent to the requesting branch after one week of time. Customers can then collect their ATM cards or their Cheque books any time from the branch from 9am to 5pm. Their ATM cards are activated online and Cheque books numbers are also posted online. Customers’ signatures are verified before handing over the card or the Cheque book.

Customers are further advised to use their ATM cards after one-hour of activation as it normally takes one hour for activation of the ATM card by the Head office. They are also guided on the security issues e.g. pin codes, safety of Cheque books and careful handling of ATM card.

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REMITTANCES DEPARTMENT –
One of the most frequently utilized banking services is transfer of funds of remittances through banking channels. Funds can be transferred from one account to another account or accounts between the branches of the banks. There are two kinds of remittances KINDS OF REMITTANCES – Inward Remittances – Funds are coming in. It is favorable Outward Remittances – Funds are going out. It is unfavorable Local remittance can be done in following ways at MCB Bank Ltd • • • • • • Pay order Demand draft Telegraphic transfer Mail Transfer Online transactions Rupee traveler Cheques

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PAY ORDER – Payment Order is meant for bank’s own payment but in practice it is also issued to our customer r making payments. “A pay order is a written authorization for payment ,made in receipt form issued and payable by the bank, to the person named and addressed therein on his giving a proper discharge therein,” • • It is issued by and payable by the same branch of the bank. It is neither transferable nor negotiable and as such it is payable to payee named therein. • • Pay order cannot be issued to a minor A receipt form and therefore it is payable only after discharge of the payee on adequate revenue stamps.

PARTIES TO PAYORDER – Following are the parties to the pay order Purchaser – Is a person, firm, company, or local authority Issuing / paying branch – Which issues / pays on presentation Payee – Is the person named therein

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PREPARATION OF A PAYORDER – The customer duly fills in the funds transfer application form SF-100 If the pay order is to be issued in cash a cash credit voucher is prepared, the customer presents it at cash counter. The cash officer after receiving payment gives this to remittance in charge. If the pay order is to be issued in transfer, the customer presents its Cheque, through which the account is debited. Entry in daybook and pay order issued register The pay order is allotted a serial number according to ear of banks operation and serial number of issuing branch to be allocated from register Like PAB/57/925 In computerized branches, there isn’t any need of a pay order register. So the record is automatically updated in computer.

PAYMENT OF A PAYORDER – The pay order can be paid back in clearing or transfer. Whenever a pay order is paid date is marked against the pay order register. (Not for computerized branches), whereas it is paid in the system for automated branches.

ISSUANCE OF A DUPLICATE PAYORDER – In case a duplicate pay order is to be issued (like if it is misplaced / damaged or lost in transit) a duplicate pay order can be issued. A letter indemnity CF -15 is obtained from purchaser.

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A note of damaged/lost pay order is made in register.

BALANCING OF PAYORDER – Pay order account is balanced once a week as well as on monthly basis.

UNCLAIMED PAYORDERS – Pay orders which are outstanding for more than 3 years are transferred to Unclaimed balances accounts.

DEMAND DRAFTS – • Demand draft is a written order, drawn by one branch of the bank upon another branch of the same bank, or upon other bank under special arrangements to pay a certain sum of money to or to the order of specified person. • Demand draft is a negotiable instrument. Demand draft is not issued and payable to bearer nor drawn on branches in he same city.

PARTIES TO DEMAND DRAFT –

PURCHASER Is the person, name or company or any firm

ISSUING OR DRAWING BRANCH This issues a draft on another bank

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Is one on which a draft is drawn

PAYEE Person named therein for whom it is directed to pay

PROCEDURE FOR ISSUANCE – • • • • • An application on SF -100 is obtained by the customer The application form is scrutinized by the officer. The officer prepares cash credit voucher (according to bank schedule of charges) The commission and postage on demand draft is levied according to the amount. Customer may give a Cheque in favor of MCB if he desires the amount to be debited thorough his account. • • • • Cheque number is written on sf-100 Both the Cheque and application is taken in daily transfer sheet for balancing. For issuance of draft the amount and particulars are written in DD Register. The serial number of an issued draft constitutes its printed serial number, the year of bank’s operation and the number of DD issued on the particular branch. 2000125/7/25 • • Then it is signed by two officers. As remittance in charge I put first signatures on the DD whereas my immediate boss (manager Operations) scrutinizes the prepared DD and writes his IBS after signatures. • An Inter branch DD advice SF -177 is prepared favoring issuing branch.

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The following particulars are mentioned on the advice , Serial # Payee’s name Amount of DD Printed # of DD leaf.

• • • •

Then test is applied on DD as well as on advice. The DD amounting Rs. 10000/- and above are applied test. Whereas an advice amounting Rs.25000/- and above is applied with test. The advice is sent to relevant branch for the purpose of intimation of draft issuance.

PAYMENT OF DEMAND DRAFT – When a draft is presented by the payee or it is presented by the collecting banker for payment it is scrutinized by the following manner • • • DD is drawn on the branch to which it is resented DD is not older than ^ months, An advice has been received and responded from relative branch.

PAYMENT IN CASH – • • The identification of payee is required if the DD is to be paid in cash. In case payee is customer of branch his signatures are verified

PAYMENT IN TRANSFER / CLEARING – For payment in clearing it should be checked that Demand draft bears a special crossing of the collecting branch. All endorsements are regular. Page 129 of 147

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DRAFTS PAID SUSPENSE ACCOUNT – • Sometimes a demand draft is presented for payment, the advice of which has not been received from DD issuing branch. In such case draft is paid from DD paid suspense Account. • When original DD advice is received the amount is debited from DD PAID suspense account and credited to DD paid suspense account. TELEGRAPHIC TRANSFER – “A telegraphic transfer is issued or transfer of funds from on branch of the bank to another branch of the same bank.” • • • • The message is conveyed through fax or phone. Telegraphic transfer is not negotiable. Funds transferred through TT are payable to payee only. Following Re the parties to Telegraphic transfer

Applicant – A person, firm, company or local authority who desires to remit funds to another branch. Drawee branch – On which TT is issued Payee – The person named therein to pay. The instructions are sent to drawee branch through coded language called test

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ISSUANCE OF TT – • • • The customer fills the funds transfer application form. Full name of payee is mentioned on the form,-. Instructions regarding payment are given like whether the TT is to be credited in payee’s account or on proper identification of banker through ADVICE & PAY • • A record in TT issued register is made separately branch wise Charges are taken either in cash or through debiting the account of customer through Cheque or voucher. • A TT number is allotted to each TT .it is serial # an telegram # LIKE 14R 5 • • • • The message is written on SF -119 The entry is also recorded at telegram dispatched register. Then the test is applied by the authorized officer. Then a confirmation of cable sent is prepared on SF 189-A containing Telegram serial number Remittance number Mode of payment Amount Name of beneficiary Account number Test number

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The message is conveyed through telephone, or fax or mail.

PAYMENT OF TT – • When a TT is received at drawee branch, it is recorded in telegram received register and TT payable registers. • • • • TT is scrutinized Test number is verified If there is any difference in test the issuing branch is referred. TT vouchers are prepared. Debit: Head office (issuing branch) Credit: TT payable account (sf-10) Debit: TT payable Credit: customers account • Vouchers are signed by officer and amount is credited in customer’s account.

MAIL TRANSFER – • • • Transfer of funds through mail / courier service is called Mail transfer Mail Transfer is not negotiable. The procedure for application and parties to TT is same.

ISSUANCE OF MT – • • The customer fills in the form SF-100 Amount is either paid in cash or through Cheque. Page 132 of 147

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• • • • •

An entry is made in MT issued registered. The number is allotted through branch wise serial. Mail transfer advice is prepared on sf-178 Two copies are sent to branch whereas third copy is kept as credit voucher. Test is applied on MT and it is dispatched.

HANDLING OF MT AS DRAWEE BRANCH – • • • • • When a mail transfer is received it is scrutinized by the authorized officer. Test is checked. IBS (inter branch signatures) are verified. Particulars are entered in MT payable register. Amount is credited in customer’s account.

CROSS BRANCH TRANSACTION – Nowadays TT & Mt is replaced by cross branch or online transaction .The facility is available only in some branches .The branches in remote areas still rely on TT & MT.

POCEDURE FOR CROSS BRANCH TRANSACTION – The customer fills in the form SfF-176 • • • • The form contains particulars as Name of the payee Account number of beneficiary and code of branch Amount to be transferred

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• • • • •

Name and address of the depositor Purpose of remittance Charges are recovered either in cash or by debiting the account Customer pays cash or a Cheque Amount is transferred at the same time to the payee’s branch.

RUPEE TRAVELLER CHEQUES – SALE OF RTC • • • • • • Name and address of purchaser is written on RTC 10 RTC number is written on RTC-10 Customer’s signatures are obtained on copy of RTC-10 Customer is handed over a copy of RTC and RTC’s sold The proceeds are credited to RTC Division Karachi by an advice. Entry is recorded in RTC stock register.

PURCHASE OF RTC – • • • • • The RTC’s can be paid in cash or in transfer When an RTC is received following procedure takes place Crossing stamp is marked on face of RTC Transfer or cash stamp is marked Signatures of the authorized office of issuing branch are verified

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• • • •

Payee Account Credited is marked on the back. Signatures of the holder on the upper left corner of RTC are checked. Date of payment is marked on RTC. In case of cash customer must possess the C copy of RTC. (Given to the customer at the time of purchase) otherwise the RTC will be credited into account.

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CLEARING DEPARTMENT –
Every banker acts both as a paying as well as a collecting banker. It is however an important function of crossed Cheques. A large part of this work is carried out through the bankers clearing house. A clearing house is a place where representative of all banks of the city get together and settle the receipts and payment of Cheques drawn on each other. As the collecting banker runs certain risks in receipt of their ownership the law has provided certain protections to the banks. The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a Cheque or draft may cross the instrument generally or specially. It further lies down that a crossed Cheque can only be paid to a banker, who collects it for a customer in good faith and without negligence.

TYPES OF CHEQUES COLLECTED – Transfer Cheques: are those Cheques, which are collected and paid by the same branch of bank. TRANSFER DELIVERY CHEQUES – Are those Cheques, which are collected and paid by two different branches of the same bank, situated in the same city.

CLEARING CHEQUES – Are those Cheques, which are drawn on the branches of some other bank of the same city or of the same area, which is covered by a particular clearing house.

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COLLECTION CHEQUES – Are those Cheques, which are drawn on the branches of either the same bank or of another bank, but those branches, are not in the same city or they are not the members of clearing house.

FUNCTIONS OF CLEARING DEPARTMENT – • To accept Transfer, Transfer delivery, clearing and collection Cheques from the customers of the branch and to arrange for their collection. • To arrange the payment of Cheques drawn on the branch and given for collection to any other branch on MCB or any other members or sub member of the local clearing house. • To collect amount of Cheques drawn on members, sub-member of local clearing house, sent for collection by MCB Branches, not represented at the local clearing house. RECEIVING & SCRUTINY OF CHEQUES – • Receiving and scrutinizing the Cheques and other deposit instruments, and the pay-in-slip at the counter. • • • • • Fixing the stamps. Scrutiny and receipt by the authorized officer. Returning the counter file to the depositor. Certificate and confirmation by the officer in charge of the department. , Separating the Cheque into transfer, transfer delivery, and clearing Cheques.

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BANKERSHOULD CHECK THE FOLLOWING – • • The instrument should be neither stale/ nor post-dated. If the instrument is crossed not negotiable it can be for the third party (an endorsee of an order Cheque, or a holder of bearer Cheque). • • • • • The Instrument should not bear any unauthorized alternation. The instrument should not be mutilated. The amount in words and figures should be same. The instrument should be drawn on any local branch. If cheque is "crossed Account Payee's" only or "Payee's Account", it should only be accepted for collection for the payee's account. • • The cheques or drafts should not be crossed specially to any other bank. A cheque payable to a firm should not be accepted for credit to a partner's account. • A cheque payable to one of the joint account holders should not be collected for the joint account without the payee's endorsement, or consent. • A cheque drawn by a customer in the capacity of agent, Attorney, or Manager of his company or firm, should not be collected for credit to his personal account. • • Pay orders, although negotiable should not be collected for third parties. Do not collect an instrument in the account of an agent or of the servant of the payee or endorsee of the instrument.

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“Not transferable" instruments, like Telegraphic Transfer, or Mail Transfer Receipt, Pay-slips, and Treasury Receipts, should be collected for a person other payee.

If an account is new or the balance or operation of the account is not satisfactory, satisfy your self about the title of the customers to the instruments before accepting the deposits.

Branch agent's permission should be obtained before accepting a third party Cheque or draft for the credit of the member.

If the payee is a Government Department, Government Official, or a trust account the instrument cannot be collected, but for the payee's account.

If the payee of an instrument is UBL, it can be collected for credit of the drawers account, or the amount of the instrument may be utilized as desired by the drawer in writing.

Cheque payable to a trust, account should not be collected for credit to a trustee's account.

All the endorsement should be regular, and no endorsement should be missing.

CREDITS DEPARTMENT –
Advances are the most important source of earning for the banks. MCB is also giving full attention towards this aspect and it is also obvious from the growing portfolio of advances and from very low delinquency rate. The credit portfolio of this institution is in a very much better shape than other financial institutions of Pakistan and the credit goes to the management and the staff who are concerned about the quantity and quality as well. 1) Loans

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2) 3)

Cash Credits Overdraft

LOANS – Loans are monetary assistance by a financial institution to a business, individual etc. The loans are granted by the bank in lump sum, so these types called fixed or demand loans. Interest is charged on the whole amount of a fixed loan. The borrower withdraws whole the amount of loan. This type of loan is normally granted against security of gold documents. In case of demand loans against gold or documents, a demand promissory note for the amount of loan is taken from the borrower loans are granted under;

REQUIREMENT FOR LOAN – For granting loan to any party or individual, the bank checks following particulars of the client: • • Credibility Feasibility Report

By Credibility, bank judges the credibility of the client by his past bank record, CBI report etc. it is very important in making decision about giving him loan. Feasibility report is on the running or proposed business of the client. The report enables the bank to judge the likely return of the business.

TYPE OF FACILITY – Basically two types of facilities are available in banks Page 140 of 147

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• •

Funded facility Non funded facility

FUNDED FACILITY – • • • Running finance Cash finance Demand finance

RUNNING FINANCE – • The running finance facility is available for enhancement of business and customer’s working capital • • • • • In running finance markup is charged only on the amount utilized by customer. This facility is given against equitable and registered mortgage The stock is hypothecated by bank. The customer can get his limit renewed after an year. The rate charged by the bank on cash credit in 46 paisa per thousand on daily basis.

CASH FINANCE – • • Cash finance is basically given against the pledge of stock or stock in trade The amount is adjusted as the goods are released from godown.

DEMAND FINANCE –

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• • •

Demand finance is also given against hypothecated This type of loan is advanced in lump sum amount The customer repays the loan in monthly equal installments.

FUNDED FACILITY – • • • • • • • • • Running finance Cash finance Demand finance Payment against documents Finance against imported merchandise Finance against trust receipt Export finance Foreign bill purchased Others

NON – FUNDED FACILITY –

• • • •

Letter of credit Letter of guarantees Bid bonds Performance bonds

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Other facilities

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GENERAL INFORMATION OF BRANCH –

Branch manager Operations manager Credit Manager In charge remittances Clearing in charge Customer services Officer Key punch operator Floor Manager Cash officer Cash officer 2

Mr. Atta Ullah Mr. Gulzaar Miss Kulsoom Rafia Riaz Mr. Adnan Arif Miss Sadia Ismail Muhammad Owais Mr. Butt Haji Mohammad Shehzad

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CONCLUSION

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8.1 CONCLUSIONS AND RECOMMENDATIONS –

The Bank has now completed more than 15years, since its privatization and it is, indeed, gratifying to note that during this period, MCB has performed well and has sustained its growth in all the major sectors.

MCB has been a pioneer among the banks in Pakistan, particularly in introducing a number of innovative banking products and services. For the first time in the history of Pakistan, these multifarious products mostly in the shape of saving schemes have been introduced by MCB with brand names. This has set the trend and many other banks, both local and foreign, have since followed in MCB’s footsteps, by launching new products and services, on similar lines. The well deserved credit, for this good performance and progress, must surely go to the Bank’s management, its Directors and, in no small measure, to the entire MCB team for its dedication, concerted efforts and excellent team spirit.

RECOMMENDATIONS –

Today the biggest challenge for banking industry in Pakistan is to retain existing customers and tap new avenues to capture potential customers. As the spreads are increasing the emphasis has shifted to high volume of profitable transactions. The key to achieve this objective lies in dealing with the customers effectively and meeting their expectations on a continuous basis.

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This is the transformation of banking from product orientation to customer orientation. Initially it was believed that banks are in finance industry and not in service industry but now image has changed .For survival quality is the challenge in this era of cutthroat competition .high deposits and high profits are not the only source of survival.

So the paradigm shifts customers and services become the life blood of any business. Change in banking trends demand new type of banking services delivered actually in new ways and new resources.

Therefore Following are my observations and suggestion to improve the efficiency more for the development of the economy and improve market standing

Foreign branches should be opened in order to capture the international market and to earn international repute for the bank.

Working environment, equipment, furniture and staff dressing should be according to the modern banking style.

Proper attention should be paid to upgrade customer services especially in rural areas.

More branches should be automated in order to survive through the cutthroat competition.

Employees should be given refresher courses.

The management should employ job rotation policy to retain the interest of the employees in job.

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