Internship Report

INTERNSHIP REPORT ON MCB Bank Limited Adalat Garh Branch, Sialkot
M

BY Haseeb Razzaq MBA (Finance) 08031020-076 Session: 2008-2010

DEPATMENT OF MANAGEMENT SCIENCES UNIVERSITY OF GUJRAT
April, 2010

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Internship Report

INTERNSHIP REPORT ON MCB Bank Limited Adalat Garh Branch, Sialkot

Internship Report submitted to the Department of Administrative Sciences In Partial Fulfillment of the Requirements for the Degree of Master of Business Administration April 2010

DEPATMENT OF MANAGEMENT SCIENCES
UNIVERSITY OF GUJRAT
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Internship Report

Faculty of Management and Administrative Sciences University of Gujrat, HH-Campus

INTERNSHIP REPORT ON

MCB Bank Limited Adalat Garh Branch, Sialkot

SUPERVISED BY:

Signature: Name: Designation:

Chairman:

Signature: Name: _

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Acknowledgement

First of all I would like to thanks to Allah on this occasion.

I also want to show my gratitude to my loving parents and humble teachers who make me able to be at this position.

I also thankful to all the staff members at MCB Adalat Garh Branch, Sialkot especially Mr. Muhammad Asif (Manager) & Mr.

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Executive Summary

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 1000 branches, over 850 of which are Automated Branches, over 350 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch. MCB's operations continued to be streamlined with focus on rationalization of expenses, re -alignment of back-end processing to increase productivity, enhancement of customer service standards, process efficiency and controls. The Bank has taken the lead in introducing the innovative concept of centralizing Trade Services in the country by providing centralized foreign trade services to branches with a view to improve efficiency, expertise and reduce delivery cost. During my internship in MCB I worked in Remittances, Advances, Foreign Exchange and Customer Service Office department and I successfully completed all the task/duties that were assigned to me. During the course of internship I learned about different functions performed by Remittances, Advances, Foreign Exchange and Customer Service Office department and bank as a whole. I also learned bank¶s correspondence with their customers and within branches. I learned about documentation requirements and record keeping for different activities and processes, especially the documentation requirement for different kinds of financing facilities.

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Table of Content:
TABLE OF C ONTENT: ................................ ................................ ................................ ......... 1 CHAPTER # 1 INTRODUCTION ................................ ................................ .... 9 INTRODUCTION: ................................ ................................ ................................ ................ 9 BACKGROUND OF THE STUDY: ................................ ................................ ........................... 9 PURPOSE................................ ................................ ................................ ........................... 9 SCOPE ................................ ................................ ................................ ............................ 10 LIMITATION OF THE STUDY: ................................ ................................ ............................ 10 OBJECTIVES ................................ ................................ ................................ .................... 10 METHODOLOGY ................................ ................................ ................................ .............. 10 Primary Data: ................................ ................................ ................................ ........ 10 Secondary Data: ................................ ................................ ................................ .... 11 ORGANIZATION: ................................ ................................ ................................ .............. 11 SUMMARY ................................ ................................ ................................ ...................... 11 CHAPTER # 2 ROLE OF SECTOR AND ORGANIZATION .......................... 13 INTRODUCTION: ................................ ................................ ................................ ......... 13 OVERALL RESPECTIVE SECTORS IN P AKISTAN:................................ ................................ .. 13 HISTORY OF BANKING IN PAKISTAN: ................................ ................................ ..... 13 ROLE OF THE ORGANIZATION IN PAKISTAN:................................ ................................ ...... 15 OVERALL ORGANIZATION AND FUNCTIONS OF ORGIN PAKISTAN: ................................ ...... 16 Vision Statement: ................................ ................................ ................................ ....... 17 Mission Statement:................................ ................................ ................................ ..... 18 VALUES:................................ ................................ ................................ ................... 19 FUNCTIONS: ................................ ................................ ................................ .................... 20 Principal function:................................ ................................ ................................ ..... 20 Deposits: ................................ ................................ ................................ ............... 20 FINANCING ................................ ................................ ................................ ........ 21 Auxiliary function ................................ ................................ ................................ ...... 22 ORGANIZATION OFFICE IN WHICH YOU ARE WORK : ................................ ...................... 24 ING SUMMARY: ................................ ................................ ................................ ..................... 25 CHAPTER # 3 HISTORY OF ORGANIZATION ................................ ........... 26 INTRODUCTION: ................................ ................................ ................................ .............. 26 BRIEF HISTORY OF THE ORGANIZATION:................................ ................................ ........... 26 NATIOINALIZATION:................................ ................................ ............................... 26 PRIVATIZATION:................................ ................................ ................................ ...... 27 Awards of MCB: ................................ ................................ ................................ ........ 27 Present Status:................................ ................................ ................................ ........... 28 RELATIONSHIP OF HEAD OFFICE TO THE BRANCH OFFICES: ................................ ................ 30 MAIN DEPARTMENTS AND THEIR JOBS ................................ ................................ . 30 GENERAL BANKING ................................ ................................ ................................ 30 REMITTANCE ................................ ................................ ................................ ..... 30 PAY ORDER ................................ ................................ ................................ ... 31 DEMAND DRAFT................................ ................................ ........................... 31 MAIL TRANSFER................................ ................................ ........................... 31 TELEGRAPHIC TRANSFER ................................ ................................ .......... 31 PAYMENT OF PAY-ORDER AND DEMAND DRAFT ................................ .. 32 CANCELLATION OF PAY-ORDER AND DEMAND FRAFT ....................... 32 VOUCHERS ................................ ................................ ................................ .... 32 INWARD CLEARING ................................ ................................ ..................... 32 OUTWARD CLEANING ................................ ................................ ................. 33 ISSUANCE OF CHEQUE BOOKS ................................ ................................ .. 33 ISSUANCE OF ATM CARDS ................................ ................................ ......... 33 CANCELLATION OF ATM CARDS ................................ ............................... 34 SHORT NOTICE TERM DEPOSIT ................................ ................................ . 34 CALL DEPOSIT ................................ ................................ .............................. 34 FOREIGN EXCHANGE ................................ ................................ ....................... 34 LC¶S ESTABLISHMENT ................................ ................................ ................ 34 PAYMENT OR RETIREMENT ................................ ................................ ....... 35

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FOREIGN CURRENCY DEPOSITS ................................ ................................ 35 FOREIGN REMITTANCES ................................ ................................ ............. 35 ADVANCES / CREDIT................................ ................................ ............................... 35 BASIC BANKING ACCOUNT ................................ ................................ ............ 36 PAK RUPEE OR FOREIGN CURRENCY ACCOUNTS ................................ .............. 36 SAVING ACCOUNT ................................ ................................ ............................ 36 MCB RUPEE MAXIMIZER ACCOUNT ................................ .............................. 37 CURRENT ACCOUNT ................................ ................................ ........................ 37 KHUSHALI BACHAT ACCOUNT ................................ ................................ ...... 37 MCB ENHANCED SAVING ACCOUNT ................................ ............................ 37 MCB¶s PARTNERS IN BILL PAYMENT................................ ................................ ..... 38 INVESTMENT BANKING ................................ ................................ .......................... 38 ABOUT REMIT EXPRESS ................................ ................................ .................. 39 FEATURES ................................ ................................ ................................ ..... 39 PERSONAL LOAN ................................ ................................ .............................. 39 OFFICES OR FIELD OFFICES ................................ ................................ .............................. 40 MCB BRANCH NETWORKS: ................................ ................................ .................... 40 CURRENT STAFF................................ ................................ ................................ .............. 40 Current staff of branch according to qualification and experience: ............................. 41 Training received by number of employees: ................................ ........................... 41 Workload ................................ ................................ ................................ ................... 41 Responsibilities ................................ ................................ ................................ .......... 41 PHYSICAL FACILITIES................................ ................................ ................................ ...... 42 CRITICAL ANALYSIS OFTHE BRANCH ................................ ................................ ............... 42 Performances ................................ ................................ ................................ ............ 43 In term of customer¶s satisfaction: ................................ ................................ ......... 43 In term of accounts and budgets:................................ ................................ ............ 43 SUMMARY: ................................ ................................ ................................ ..................... 43 CHAPTER # 4 POLICIES ................................ ................................ ............... 44 INTRODUCTION ................................ ................................ ................................ ............... 44 POLICIES:................................ ................................ ................................ ........................ 44 Internship Policy: ................................ ................................ ................................ ...... 44 MCB has no gender bias ................................ ................................ ............................ 44 Opening account policy................................ ................................ .............................. 44 Training of employees ................................ ................................ ................................ 44 Revenue Recognition................................ ................................ ................................ .. 44 Investments Policy ................................ ................................ ................................ ..... 45 RISK MANAGEMENT ................................ ................................ ............................... 45 Currency Risk Management ................................ ................................ .................. 45 Credit Risk Management ................................ ................................ ....................... 45 MCB¶s Competitive Strategies ................................ ................................ .................... 45 SUMMARY: ................................ ................................ ................................ ..................... 48 CHAPTER # 5 DIFFERENT MODELS ................................ ........................... 49 INTRODUCTION: ................................ ................................ ................................ .............. 49 SWOT ANALYSIS: ................................ ................................ ................................ ....... 49 STRENGTH:................................ ................................ ................................ .............. 49 WEAKNESS:................................ ................................ ................................ .............. 49 OPPORTUNITIES:................................ ................................ ................................ .... 50 THREATS:................................ ................................ ................................ ................. 50 PEST ANALYSIS AND ENVIRONMENTAL SCAN................................ ..................... 50 POLITICAL AND LEGAL ENVIRONMENT:................................ .............................. 51 ECONOMIC TRENDS ................................ ................................ ............................... 51 SOCIO-CULTURAL ENVIRONMENT ................................ ................................ ....... 51 TECHNOLOGICAL FACTORS ................................ ................................ .................. 52 RATIO ANALYSIS OF THE MCB:................................ ................................ ....................... 52 Interpretation: ................................ ................................ ................................ ... 53 Interpretation: ................................ ................................ ................................ ... 55 CHAPTER # 6 RECOMMENDATION ................................ ........................... 56 SHORTAGE OF STAFF: ................................ ................................ ................................ ...... 56

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STAFF IS N OT ADEQUATELY TRAINED: ................................ ................................ ............ 56 ONLINE BANKING ................................ ................................ ................................ ........... 56 OTHERS ................................ ................................ ................................ .......................... 57 OVERALL SUGGESTIONS F OR IMPROVEMENT ................................ ................................ ... 57 Introduce Various Profitable Investment Schemes ................................ ...................... 57 Training Staff: ................................ ................................ ................................ ........... 57 Change The Nature Of Work: ................................ ................................ ..................... 58 Refresher Courses: ................................ ................................ ................................ .... 58 Special Training In Abroad ................................ ................................ ........................ 58 Incentive to Employees: ................................ ................................ ............................. 58 Others ................................ ................................ ................................ ....................... 58 Reward and Punishment ................................ ................................ ............................ 59 Survival Of The Fittest ................................ ................................ ............................... 59 REFERENCES ................................ ................................ ................................ .............. 60

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Internship Report

Chapter # 1
Introduction:

Introduction

Chapter one is about introduction of report. As a part of requirement of MBA degree six week internship is necessary for student. This chapter includes background, purpose, scope, objectives and methodology of the study. It also include introduction of organization.

Background of the study:
Internship training program during Master in Business administration Program is necessary for the partial fulfillment of the completion of Degree of Master in Business Administration. It is necessary for me to complete an internship session of about 6 weeks in some manufacturing or ser vice industry relevant to my area of interest and specialization. So, I choose the Banking field because I have the interest in this sector because my study background is related with this sector.

Purpose
Internship is the capstone experience that provide me with hands-on, s real-world experience in a work setting. Ideally, internship will enable interns to: (a) integrate and use my knowledge and skills from the classroom, (b) discover where further competence is needed, (c) take steps to gain that competence under educational supervision, and (d) become better acquainted with the types of work settings in which such competence can be applied.

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Internship Report

Scope
This study will facilitate the students regarding the working of Bank sector ing of Pakistan because most of the teachers during their lectures use the examples of Banks like MCB, National Bank, UBL, Bank Alfalah and many others, students should study this report so that they must grasp the functioning of such Banks.

Limitation of the Study:
The study is done with the sole purpose of doing the best work but there were certain limitation faced during the internship period. The most important limitation from which the study suffers is the non -availability of information in a manner required for analysis and the secrecy of the bank. Another important limitation of the study is time and space constraint.

Objectives
I worked as an internee in MCB Adalat Garh branch, Sialkot. The main objectives to study in MCB were: y y y y To get some experience in working with well reputed organization. To gain knowledge about the professional environment of the bank. To know about the technology utilized in the banks. To deal and manage with the situation of stress.

Methodology
There are mainly two methods that are used for the collection of data.

Primary Data:
y y Observation of functions of Branch operations on the spot. Observation of different processes of Branch on the spot.

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Secondary Data:
y Internet is very helpful for me to study more about banking sector of Pakistan. y y y y Different type of booklets of the Bank. Annual reports Journals Newspapers

Organization:
MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion and total assets of around Rs.300 billion. Incorporated i n 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate executives. In 1974, MCB was nationalized along with all other private sector banks. The Bank has a customer base of approximately 4 million, a nationwide distribution network of over 1,000 branches and over 450 ATMs in the market. During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base.

Summary
This is the first chapter of the report containing the detail introduction of the report. Internship training program during Master in Business administration Program is necessary for the par tial fulfillment of the completion of Degree of Master in Business Administration. Internship will enable interns to integrate and use my knowledge and skills from the classroom. This study will facilitate the students regarding the working of banking sector of Pakistan.

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Internship Report For achieving my purposes, objectives and for the preparation of the internship report I required some kind of data, I used both methods of data collection that are primary sources and secondary sources for that purpose .

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Internship Report

Chapter # 2

Role of Sector and Organization

INTRODUCTION:
This chapter will summarize that what¶s the current situation of the banking sector in Pakistan. What elaborate the importance of MCB in the banking sector of Pakistan? This chapter will explore the role of MCB in the economic & social development of Pakistan. Moreover this will also tells you about the functions that¶s the organization is performing and about the internship office.

Overall respective sectors in Pakistan:
Banking is one of the most sensitive busine sses all over the world. Banks play very important role in the economy of a country and Pakistan is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance.

HISTORY OF BANKING IN PAKISTAN:
At the time of independence, commercial banking facilities were provided fairly well here. There were 487 offices of schedule banks in the territories now constituting Pakistan. An Expert committee was appointed. The committee recommended that the reserves bank of India should continue their function in Pakistan until 30 September. 1948, and Pakistan would take over the management of public debt and exchange control from reserve bank of India on April 1948 and that Indian notes would continue to be legal te nder in Pakistan until 30 September 1948. Moreover the banks including those

having their registered office in Pakistan transferred them to India in order to

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Internship Report bring a collapse of a new state. By 30 June 1948 the number of the offices of scheduled banks in Pakistan declined from 487 to only 195.In order to make necessary arrangement for the assumption of control and expert committee was appointed to recommend necessary steps, including the required legislation to establish a central bank for Pakistan. The g overnor-general of Pakistan Quaid-i-Azam Muhammad Ali Jinnah inaugurated the State Bank of Pakistan order was promulgated on May 12, 1948. The first Pakistani notes were issued in October 1948 in the State Bank of Pakistan withdrew the reserves Bank of India notes of the value of Rs. 125.02 crores with the help the Pakistan notes. On 1st January, 1947 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani Banks become a pubic property. All small banks were merged in bigger banks to create five major Pakistani banks. These banks were to control by Pakistani Banking Council. There are still controversies about this act of Govt. as whether it contributed in success of failure of banks. However the major changes afte Nationalization r were as follows:  Working of banks was extended to under-developed areas.  Market expansion for credit and deposits.  Decrease in service level of bank officers.  Decrease in profitability as well. In 1990 the govt. decided to denationalize all the nationalized institutions. Same was also suggested in banking sector. For this purpose, amendments were made to Nationalization Act 1974 and two nationalized banks were privatized. Along with this a permission to open banks in private sector was also granted. The rules regarding establishment of new banks and for incoming foreign banks were also relaxed. The two privatized banks are: MCB taken up by a private group in April, 1991 & ABL taken up by its own employees in September, 1991. After these changes a large number of private and foreign banks started their operation in Pakistan Now, Pakistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks

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Internship Report and to specialized agencies to cater for special requirements of specific sectors. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it had acquired a flourishing banking sector. Pakistan's banking sector has remained remarkably strong and resilient during the world financial crisis in 2008±09, a feature which has served to attract a substantial amount of FDI in the sector. Stress tests conducted on June 2008 data indicate that the large banks are relatively robust, with the medium and small-sized banks positioning themselves in niche markets. Banking sector turned profitable in 2002. Their profits continued to rise for the next five years and peaked to Rs 84.1 ($1.1 billion) billion in 2006. During the fiscal year of 2008-2009, total assets of all the scheduled banks increased by Rs 574.7 billion. Total assets grew by 6.4 percent from Rs 8861 billion in June 2008 to Rs 9436 billion in June 2009. During the fiscal year of 2008-09, there was also an increase of Rs 248 billion in the net advances of the scheduled banks. Net advances grew by 8.67 percent from Rs 2873 billion in June 2008 to Rs 3128 billion in June 2009.

Role of the organization in Pakistan:
MCB Bank Limited formerly known as Muslim Commercial Bank Limited was incorporated by the Adamjee Group on July 9, 1947 in Kolkata in Bengal, under the Indian Companies Act, VII of 1913 as a limited company`. But due to changing scenario of the region, the certificate of incorporation was issued on 17 August, 1948 with a delay of almost 1 year; the certificate was issued at Chittagong. The first Head office of the company was established at Dacca and Mr. G.M. Adamjee was appointed its first chairman. It was incorporated with an authorized capital of Rs. 15 million. The Bank transferred its registered/Head office from Dhaka to Karachi on August 23, 1956 through a special Resolution.

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Internship Report The bank was established with a view to provide banking facilities to the business community of the South Asia. The bank was nationalized in 1974 during the government of Zulfiqar Ali Bhutto. This was the first bank to be privatized in 1991 and the bank was purchased by a consortium of Pakistani corporate groups led by Nishat Group. MCB is Pakistan¶s fourth largest bank by assets having an asset base of US$6.7 billion, and the largest by market capitalization having a market capitalization of US$4.1 billion. The Bank has a customer base of approximately 4 million and a nationwide distribution network of 1, 26 0 branches, including 8 Islamic banking branches, and over 300 ATMs, in a market with a population of 160 million. In 2008 the head office of MCB was shifted from Karachi to Lahore in a newly constructed building, namely MCB House located at Sharea Ghous ul-Azam, commonly known as Jail Road.

Overall organization and functions of org in Pakistan:
MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion and total assets of around Rs.300 billion. Incorporated in 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate executives. In 1974, MCB was nationalized along with all other private sector banks. The Bank has a customer base of approximately 4 million, a nationwide distribution network of over 1,000 branches and over 450 ATMs in the market. During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base.

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Vision Statement:

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

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Mission Statement:
We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long -term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.

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VALUES: 
INTEGRITY We are the trustees of public funds and serve our community with integrity. We believe in being the best at always doing the right thing. We deliver on our responsibilities and commitments to our customers as well as our colleagues. 

RESPECT We respect our customer¶s values, beliefs, culture and history. We value the equality of gender and diversity of experience and education that our employees bring with them. We create an environment where each individual is enabled to succeed.  EXCELLENCE We take personal responsibility for our role as leaders in the pursuit of excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward. 

CUSTOMER CENTRICITY Our customers are at the heart of everything we do. We thrive on the challenge of understanding their needs and aspirations, both realized and unrealized. We make every effort to exceed customer expectations through superior services and solutions. 

INNOVATION We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. Our teams work together for the smooth and efficient implementation of ideas and initiatives.

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Functions:
Basically there are two basic categories on the basis of functioning of MCB Bank, which are y y Principal function Auxiliary function

Principal function:
The principal functions are basically the core functions of the bank that is their lifeblood of bank, which are y y Acceptance of deposits Financing

Deposits:
There are basically two types of deposits and their nature vary due totime factor, which are y Demand deposits The demand deposits have no legal restriction on drawing of the deposited amount and the cash is readily available on demand without any conditions Demand deposits are further classified into two categories o Current deposits: The current deposits are non-interest bearing deposits and earn the most for banks as there is no cost for the banks but the depositor can claim no interest whatsoever.

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Internship Report o Saving deposits: The saving deposits are the interest bearing deposits and a lthough there are no such restrictions but it is mostly preferred for saving and salaried class and similar class clients deposit in this category to earn interest so no regular withdrawal takes place in this type of deposits. y Time deposits: On the contrary the time deposits are deposits for a particular period of time and cannot be easily withdrawn on demand and if the amount is withdrawn certain penalty is lev on withdrawal before ied time. Time deposits are further categorized into two categories that are o Notice time deposits: The opposite is a Demand deposit or a sight deposit which can be withdrawn at any time, without any notice or penalty; e.g. money deposited in a checking accoun or savings account in a t bank. o Fixed term deposits: A deposit held at a financial institution that has a fixed term. These are generally short-term with maturities ranging anywhere from a month to a few years.

FINANCING
The second important function of the MCB is to provide finances to the individuals and businesses against securities at a certain fixed rate of interest. As the different types of accounts in accepting deposits MCB also have the different types of account in which it provide the loan to its customers. Following are the different types of the accounts in which loan is made.

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Internship Report y Demand Finances: Demand Finances are those finances, which are given on demand. It is a single transaction. It can be long, medium and short term. Markup is also charged. Here the amount can be withdrawn once at the time of disbursement. y Running Finances: It is always a short-term loan i.e., one-year. It can be withdrawn at any time and deposited at any time. It is basically for running day today business operations. This type of loan is provided to the person who has the strong relation with the bank. y Cash Finances: Cash finances are for a limited period of time i.e., one year. It is advanced to people to complete the working process. y Fixed Asset Financing:

This type of account is provided to the business for the purchase of fixed assets and the assets is considered as the security. y Overdraft

This type of loan is provided to the individual that has very healthy position and they are allowed to draw up to the limit if there is no balance in the account. The rate of interest is charged on the daily basis.

Auxiliary function
These are the functions that have the secondary position in the bank point of view. These functions are cause to attract the customer. Banks performs this kind of functions as per demand on the extra charges.

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Internship Report y Collection of Cheques MCB acts as an agent to its customers in the collection and payment of cheques, bills and promissory notes. This is done on the behalf of the customer and MCB charges the commission. y Locker: MCB also provides locker facility to its valuable clients. where of people can be kept their precious ornaments. y Collection of Dividends: The bank provides a very useful service in the collection of dividends or interest earned on stocks and shares held by his customers. The customer is simply to inform the issuer of the securities that the interest on the securities is to be credited to his account in the bank. y Purchase and Sale of Securities: MCB is authorized by the customer, purchase or sale securities on his behalf and thus adds other benefits to his portfolio. y Transfer of Funds: MCB also transfer funds of the customers from one bank to another bank. If the transfer is at one station, they don¶t charge any commission and even if they charge, they charge on reduce rate y Issue of Traveler¶s Cheques: The bank has introduced the schemes of Rupee Travelers Cheques and issues them for the convenience of travelers and charges a nominal commission. In addition to these bank also performs a number of functions and activities for and on behalf of its clients with the sole purpose of serving them to the best of its capabilities and potentialities.

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Internship Report y DISCOUNTING BILLS OF EXCHANGE: The bank utilizes their surplus funds in another important way. They discount the bills of exchange at their market worth, i.e., the pay to the holders of the bill an amount equal to their face value after deducting interest at the current market rate for the period the bill has to mature. The bills of exchange are a very liquid asset for a bank to hold. These bills are usually dra for wn three months and are used for financing internal as well as external trade. y Acts as a Referee: MCB provides a useful service to his customers by acting as a referee for his credit worthiness. The information is supplied in almost secrecy and is based impartially on the respectability and financial standing of the client. y Foreign Exchange Business: MCB transacts foreign exchange business by discounting foreign bills of exchange and thus provides facilities for financing the foreign trade.

Organization office in which you are working:
I have completed internship in MCB Adalat Garh branch (1077), Sialkot. Although it¶s a small branch in this area, but they are facilitating their customers by providing quality services. They provided different services to their customer. To fully satisfy their customer, and for efficient working, they assign different services to different departments. Few of these given below:  Cash Department  Deposit Department  Advance & Credit Department  Remittance Department  Foreign Exchange Department

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Summary:
Banking started in Pakistan after the bold and emergent decision of formulation of SBP on July 1, 1948. Thereafter this sector has witnessed enormous growth. In 1974 banks were nationalized, in the hope that new era of growth could be achieved through it. However the process is reverse since 1991, up till now MCB, ABL, and UBL have been privatized and HBL is in the process of its privatization. Pakistan's banking sector has remained remarkably strong and resilient during the world financial crisis in 2008±09. During the fiscal year of 2008-2009, total assets of all the scheduled banks increased by Rs 574.7 billion. During the fiscal year of 2008 -09, there was also an increase of Rs 248 billion in the net advances of the scheduled banks. The principal functions of MCB are acceptance of deposits & financing and auxiliary functions of MCB are Collection of Cheques, Locker, Collection of Dividends, Purchase and Sale of Securities & etc.

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Chapter # 3
Introduction:

History of Organization

Chapter three is about the introduction to the MCB Bank Limited. In this chapter the overall working of MCB is described. This chapter contains information about the brief history of the organization. When the bank was established and who starts it. Banks have a proper communication system through which the head office communicate to the branch offices. The details of communication system followed by head office are included in chapter three.

Brief History of the organization:
MCB Bank Limited formerly known as Muslim Commercial Bank Limited was incorporated by the Adamjee Group on July 9, 1947 in Kolkata in Bengal, under the Indian Companies Act, VII of 1913 as a limited company. But due to changing scenario of the region, the certificate of incorporation was issued on 17 August, 1948 with a delay of almost 1 year; the certifica was te issued at Chittagong. The first Head office of the company was established at Dacca and Mr. G.M. Adamjee was appointed its first chairman. It was incorporated with an authorized capital of Rs. 15 million. The Bank

transferred its registered/Head office from Dhaka to Karachi on August 23, 1956 through a special Resolution.

NATIOINALIZATION:
In January 1974, the government of Pakistan nationalized MCB following the banks (Nationalization) Act 1974, subsequently, in June 1974, Premier Bank limited merged with MCB.

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PRIVATIZATION:
A wave of economic reforms swept Pakistan in the late 1990¶s introducing the need for privatization of state owned banks and companies in April 1991, MCB because Pakistan¶s first privatized Bank, the government o f Pakistan transferred the management of the Bank to Nishat Group± group of leading industrialists of the country by selling 26% shares of the Bank. With a view to broaden equity holding the government sold 25% of the paid up capital to the general public. In terms of agreement between the government of Pakistan and the Nishat Group additional 24% shares have been purchased by the group making their holding 50%. As of June 2008, the Nishat Group owns a majority stake in the bank. 25% was retained by the government. Now it is fully privatized. Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played instrumental role in its success. In recognition of Mr. Mansha¶s contribution, the Government of Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most prestigious civil awards of the country. MCB is Pakistan¶s fourth largest bank by assets having an asset base of US$6.7 billion, and the largest by market capitalization having a market capitalization of US$4.1 billion. The Bank h a customer base of as approximately 4 million and a nationwide distribution network of 1,026 branches, including 8 Islamic banking branches, and over 300 ATMs, in a market with a population of 160 million.

Awards of MCB:

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

MCB won ³Best Bank in Asia´ award in 2008. MCB also won the "Best Bank in Pakistan" award in 2008, 2006, 2005, 2004, 2003, 2001, 2000. In addition, MCB also has the distinction of winning the Asia Money award in 2009, 2008, 2006, 2005 & 2004 for being " The Best Domestic Commercial Bank in Pakistan".

Present Status:
In 2007, MCB reported a profit after tax of PKR16.4 billion (US$270 million) and generated a return on average equity of 38% and a net interest margin of 8.08%. The Bank¶s asset quality is strong with a gross NPL ratio of 4.7% and provision coverage of 100%. During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base and managing its non-performing loans via improved risk management processes. In 2005, the management of the bank abbreviated its name from Muslim Commercial Bank Limited to MCB Bank Limited to explore international markets; they were facing resistance due to the word Muslim specially from Western Countries to avail license. In 2008 the head office of MCB was shifted from Karachi to Lahore in a newly constructed building,

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Internship Report namely MCB House located at Sharea Ghous-ul-Azam, commonly known as Jail Road. The MCB Tower in Karachi serves as the MCB's headquarters, and is also the tallest building in Pakistan. MCB, advised by Merrill Lynch, became the fourth Pakistani company (the other three being Hubco, PTCL and Chakwal Cement - they all have been delisted) to list on the London Stock Exchange when it raised US$150 million global depositary receipts. In May 2008 Malaysian bank, Maybank and MCB signed an agreement, whereby Maybank will acquire up to 20% of the ordinary shares in MCB from Nishat Group. The acquisition is in-line with Maybank¶s strategy, as Malaysia¶s financial services leader in the region, to build its presence in key growth markets across the region. It also paves the way for MCB, one of Pakistan¶s premier financial services groups, to engage Maybank as its exclusive foreign commercial bank strategic partner. Maybank initially acquired from Nishat Group 94,241,527 ordinary shares in MCB, representing a 15% stake in the Bank, for a cash price of PKR470 per share. The total consideration paid was approximately US$686 million. The purchase price represented a 11.4% premium to MCB¶s closing share price of PKR 422 on May 2, 2008, and a premium of 12.9% to the average closing share price for MCB over the 30 trading days immediately preceding the date of this announcement. Based on MCB¶s December 31, 2007 audited book value, the purchase price represents an implied price to book value multiple of 5.13x, a price to 2007 earnings multiple of 18.0x and a price to 2008 earnings multiple of 15.2x. In July 2008 Maybank exercised its right to increase its stake to 20%. The stake in MCB allows Maybank the right to appoint two Directors to represent its interest on the Board of MCB. One of these Directors was to be appointed immediately and the second Director will be appointed upon completion of the term of the existing Board, scheduled to be on March 27, 2009.

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Internship Report As part of the transaction, Maybank and MCB are also expected to enter into a business cooperation arrangement which will include, among others, Islamic banking, retail banking, credit cards, asset management and SME banking. Leveraging Maybank¶s leadership and experience in these segments coupled with MCB¶s brand and broad distribution network, Maybank and MCB believe that significant revenue synergies can be attained. Both Maybank and MCB are also expected to benefit from increased business ties and trade flows between Pakistan and Malaysia.

Relationship of head office to the branch offices:
In MCB decision, strategies, policies are made by the top level management and these are implemented in each branch. Top level management don¶t involve the lower management in decision making process. MCB is the pioneer of computerization, as far as it has a very developed and fastest network. So the head office and all of its branch are es linked through a electronic network, that make possible easy and in time transformation of the important information.

MAIN DEPARTMENTS AND THEIR JOBS
There are three main departments in any branch of MCB  GENERAL BANKING  FOREIGN EXCHANGE  ADVANCES/CREDIT

GENERAL BANKING
General banking deals with following services:

REMITTANCE
It is transfer of funds. Funds can be transferred in shape of pay orders, demand draft, mail telegram and telegraph transfer. Payments of fees of different organizations, fulfillment of tenders, and collection of funds are the

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Internship Report main functions of remittance. Maximum part of general banking depends on this department. Issuance of different kinds of remittance: PAY ORDER Pay order is the property of person/company that has to take the benefit of the amount being pay ordered by the concerned person. Pay orders are made for the payment of fees, tender or issued for the payments of dealings. These are required for the proof of payments made between the bank and the customer in the favor of beneficiary. These are noted in printed block letters and yearly serial numbers are issued from computerized system. DEMAND DRAFT Demand drafts are made for the beneficiary for payments, funds etc, these are made for outstation branches of the concerned banks. An advice is also made for the confirmation of the draft send. These are also approved and safe way of sending amount to the beneficiary. These are also noted by computerized system and a serial number is issued from the computer system. MAIL TRANSFER Mail Transfer is made with in the city for transfer of amount. An advice is also made for the confirmation of the draft send. These are also approved and safe way of sending amount to the beneficiary. These are also noted by computerized sys tem and a serial number is issued from the computer system. TELEGRAPHIC TRANSFER Telegraph Transfer is telegram message for transferring the amount from one branch to other branch. A message advice and a confirmation advice both are made with TT numbers that are issued for TEST. TEST depends on two steps: 1. First TEST is on Day, Date and Code Number of branch.

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Internship Report 2. Second TEST is on Currency, whether Pak rupees or foreign currency, amount and TT number issued from manual registers and confirmed from computerized system. PAYMENT OF PAY-ORDER AND DEMAND DRAFT Pay-Order and Demand Draft both could be paid in shape of physical payment of cash and in case transfer of amounts; the amount could be transferred in the beneficiary account. In case of physical payment authorized signature of beneficiary are taken for the proof of amount being paid to him and in case of transferring of amount authorized signature of the beneficiary are checked and verified for reducing risks. CANCELLATION OF PAY-ORDER AND DEMAND FRAFT Any type of Pay-Order / Demand Draft is cancelled by the permission and instructions made by the beneficiary. The customer could only cancel the pay order/ demand draft as the verified signatures of beneficiary are present on the advice. VOUCHERS Vouchers are made for records and they should be completed in all respects, the amount, date, its head, particulars, amount in words, authorized signatures and contra advice or voucher should be present. Vouchers are advice either debit or credit slips. They are contra of each other. If any voucher of debit is passed its contra credit voucher should also be passed for the balancing of accounts, their respectivesheets. INWARD CLEARING It depends on those checks that are cleared inter branch and with in the city. As the concerned branch receive any type of clearing check first of all physical checking is taken place. For clearing procedure there should be two days margin. These cheques have their vouchers and the amount of the cheque and voucher should be identical. Than these cheques are stamped and noted on receiving sheet as well as feed in to the computerized system.

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Internship Report OUTWARD CLEANING It depends on those cheques that are cleared out side the city. For outward clearing cheques are send because the home branch has there accounts but checks are of other banks. Contras of these cheques are vouchers that are recordrd in the home branch. ISSUANCE OF CHEQUE BOOKS Any account holder that has opened the account he/she could credit his/her account and for this purpose there should be a cheque book, so he/she could be able to credit the needed amount whatever he/she wishes. For the issuance of the cheque book a person is advised to fill a requisite slip with his/her full names and the account number with two verified signatures. These signatures are checked and then another requisite slip prepared by the bank staff send to the NIFT, and it issues the printed cheque books after completion of the procedure in two or three days. Account holder can take it by singing on the issuance register or if the absence of the account holder another person could also take the cheque book only if he/she has authorized signature of the account holder. When the cheque books are issued they are feed in the computer system from the requisite slip so when the cheques are given for the credit/transfer of amount they could checked. In this way neither the cheques could be repeated nor could the invalid cheques be claimed. ISSUANCE OF ATM CARDS Head office issues ATM (Auto Teller Machine) cards with their PIN (Personal Identification Number) codes and when the customer claims for their ATM card they are checked from the list that is also issued from the head office, and the claim is checked from the list and if the name is found than the cards are issued by taking a signature and their PIN codes are given to them by taking signatures on their ATM card forms. The ATM card has been activated by the number provided at or with the specific card.

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Internship Report CANCELLATION OF ATM CARDS The Cancellation of ATM Cards becomes necessary in the following conditions:       If folded or damaged Stolen PIN code missed or forgotten Card captured by the machine and expired If requested by the customer The cancellation or inactivity of the card is being processed by the request or instructions provided from the customer. SHORT NOTICE TERM DEPOSIT There are short times either for seven days or for thirty days and the profit is calculated by the given percentage from the head office at the payment time. If the customer fails to complete the duration of seven days or thirty days then no profit is given. If any amount is outstanding, only in case of automatic continuity, then the profit is calculated for the whole period by the rate given from the head office multiplying from the numbers of days divided by the 365 for the one-day profit. AMOUNT, RATE, NUMBER OF DAYS / 365 DAYS Profit is calculated for the six months only for outstanding SND. Zakat is also deducted but if Zakat deduction form is submitted to the bank, no Zakat will be deducted then, 10% with holding tax is also deducted from the profit to calculate net profit. CALL DEPOSIT It is highly liquid instrument, it can be cashed at any time when needed. This instrument bears no profit on it. It is mostly used for the purpose of tenders.

FOREIGN EXCHANGE
LC¶S ESTABLISHMENT Any company can provide its documents containing eform, bill of lading, short shipment notice in case of short shipment,

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Internship Report packaging list etc. the information provided from the documents is recorded in the LC establishment portion or section in the computer. PAYMENT OR RETIREMENT When the transactions have been completed then approved documents from the concerned bank are sent to the home bank for the payment or retirement of the LC. These transactions have recorded in the payment or retirement section of the computer. FOREIGN CURRENCY DEPOSITS The Foreign Currency Deposit relates with the foreign currency accounts, cash deposit or credit and foreign remittances. FOREIGN REMITTANCES In this we received the messages through SWIFT for foreign remittances, which we record in their respective accounts, if these are relates with Pak rupees than it was transferred in Pak rupees with the latest rate and if this relates to the foreign currency than it is dealt with accordingly. The amount has been credited to the respective account and the head office has been debited against it. After crediting the amount to the respective account. All the subsequent entries have been made in the registers and also in the computer record as the sysem t now have been upgraded on computers. As we are reporting daily to the head office, so an annexure has been maintained and faxed to the head office.

ADVANCES / CREDIT
This department deals with the approval of different kinds of loans to different business entities. The loans, which are being approved by the department, are kept with some securities such as bonds, properties and any other type of asset, which is equally valuable or more than this as a guarantee. Every branch has its own limit, if the amount of loans is with in the limit of the branch then it is being approved by the branch but if the amount of loan is exceeding the limit then it has to make it approved by the head office. In this case the branch stored all the required papers and sent them to the head office

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Internship Report for necessary action. If the head office approved the loan then mostly the period contains a year. And if the party requires more loan than after a year the loan has been re-approved required that they should have the limit. In case if the head office do not approve the loans then the return letter came back with the reasons of not approval of loan and if the reasons have been made approved by the concerned party then it could be sent again for approval. This whole process is recorded in the back remain with the bank until the party has not refunded all the amount of loan and bank has the authority to liquidate those assets for preventing it from loss.

BASIC BANKING ACCOUNT
In compliance with the directives of State Bank of Pakistan v ia BDP Circular No. 30, issued on 29th November 2005, the Basic Banking Account has been launched with effect from 27th February 2006. This product has been introduced to facilitate the low income group as well as the existing account holders who wish to c onvert their regular savings or current account into Basic Banking Account. 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 (each cash or through clearing) and 2 withdrawals (cash or clearing) each month. All customerinitiated transactions over and above this limit will be charged a transaction fee. However unlimited free charge cash withdrawals are allowed through MCB¶s own ATM¶s.

PAK RUPEE OR FOREIGN CURRENCY ACCOUNTS
SAVING ACCOUNT
MCB¶s Foreign Currency Savings Account offers you attractive returns on your foreign currency investment. Unlimited transaction facility, profit credited to your account on a half yearly basis. You can avail a credit facility up to 75% of the total deposits value. A foreign currency account can be opened at any of our foreign exchange dealing branches.

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MCB RUPEE MAXIMIZER ACCOUNT
MCB Rupee Maximizer Account provides you an opportunity to convert you¶re the recent changes in the economic scenario MCB launched the Rupee Maximizer Account exclusively for its Foreign Currency Account Holders. MCB Foreign Currency Account holders now have an opportunity to convert their Foreign Currency Account balances into Pak Rupees and earn a profit at the rate of 12.6% per annum. Other features include profits calculated on a daily product basis, no restrictions on the number of the withdrawals, no minimum deposit required. Special benefits include one free ATM card and locker facility free of cost. MCB Rupee Maximizer Account is being advertised in leading daily newspaper as well as local papers. Foreign Currency Account into Pak Rupee and earn profit at the rate of 12.6% per annum.

CURRENT ACCOUNT
MCB¶s Foreign Currency Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day.

KHUSHALI BACHAT ACCOUNT
Open a Khushali Bachat or Dollar Khushali Account, both require low minimum income deposits plus you receive profit on daily product basis. Get a saving with current account facilities through saving 365 or double your investment through capital growth and receive monthly profits through monthly Khushali.

MCB ENHANCED SAVING ACCOUNT
Keeping in view the small savers, looking for higher returns on their savings, MCB introduces the Enhanced Saving Account (ESA). This account can be operated via all the channels available at the MCB such as Cheques, Virtual Banking, Mobile Banking, MCB Smart Card and ATMs/Point of sales all across Pakistan. MCB ESA, governed under PLS rules, can be opened with a minimum initial deposit of Rs.

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Internship Report 5000 and the profit shall be calculated on an average basis maintaine d by the customer during that month. Following shall be the slabs used for profit calculation:  If average balance is greater than Rs. 20,000 standard PLS rates will apply.  If average balance less than Rs. 20,000 (or equal to 20,000) with up to 4 withdrawal transactions per month (excluding ATMs, PSO, and VB) 4.0% p.a.  If average balance is less than Rs.20,000 (or equal to 20,000) with over 4 withdrawal transactions per month (excluding ATMs, PSO, and VB) then standard PLS rates will apply. The rates mentioned above are expected and shall be revised at least every six months. Average account balances can exceed Rs. 20,000 during a month. However, in that case, they shall be paid profit as per the standard PLS rates, as mentioned in slabs above. Profit shall be calculated on average basis and shall be credited to the account after each calendar quarter.

MCB¶s PARTNERS IN BILL PAYMENT
Pay your bills 24 hours a day, a day, 7 days, and a week. Make total payments of up to Rs. 20,000 per day. Carry out up to 10 transactions per day per card. Make either full or partial payments. Full payment is required for PTCL only. Recharge your prepaid account for Mobilink, Ufone and Telenor as per their fixed slabs. Pay as a registered or non-registered user. Registration will help you avoid the time delay in entering details each time you carry out a transaction. o Pay with MCB ATM o Pay through MCB Virtual o Pay through MCB Call Centre

INVESTMENT BANKING
Our 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:

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Internship Report  Private Placements  Debt/Equity Underwriting  Team Finance Certificates  Loan Syndication  Arrangement of Non-Fund Facilities  Mergers and Acquisitions  Privatization  Corporate Advisory

ABOUT REMIT EXPRESS
Fastest to Pakistan, anywhere in Pakistan, the fastest way of getting your money across to Pakistan. Remit express offers low cost remittance from U.A.E and Saudi Arabia. Your relatives¶ friends or business associates receive drafts within 72 hours. MCB remit express has been specifically designed to meet the needs of the expatriate Pakistani community residing in the gulf countries. FEATURES Easiest and safest way to remit funds, remittance within 24 to 74 hours, personal delivery to the beneficiary, delivery confirmation to the remitter, message facilities for both parties. Your beneficiary will receive the amount even if he/she does not havean MCB account.

PERSONAL LOAN
³The more you praise and celebrate your life, the more there is in life to celebrate´. MCB personal loan shortens the distance between your dreams and your celebrations. It is fast, flexible and affordable, speedy loan approval. No guarantor / security / collateral required. Borrow up to Rs. 1,000,000. 1 to 5 year tenures, partial and full adjustments allowed anytime during the tenure, optional insurance, equal monthly installments, lower interest rates, higher loan limits, loan amount renewed anytime after nine months. You as an individual can gain and benefit the through MCB consumer banking. In MCB you get friendly, efficient and attentive personalized banking services, a unique banking relationship experienced by each MCB clie nt.

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Offices or field offices
Offices means the Head office which is situated in MCB House located at Sharea Ghous-ul-Azam, commonly known as Jail Road. Field offices mean the Branches. MCB has the forth largest domestic branch network in Pakistan. The bank has a network of over 1000 branches in Pakistan and 6 branches worldwide in 6 countries.

MCB BRANCH NETWORKS:
PROVINCE ±WISE Province Punjab Sindh N.W.F.P. Balochistan Azad J. Kashmir Domestic Total Overseas EPZ Grand Total Branches 665 248 106 37 18 1,074 6 1 1,081 Sub ± Brs. 7 1 ± ± ± 8 ± ± 8 Total 672 249 106 37 18 1,082 6 1 1,089

Current staff
MCB Adalat Garh branch has the 8 staff member in which 2 security guards are also included, which are as fellows: Mohammad Asif Farhan Sharif Mohammad Asif Mohammad Qasim Khalid Masood Malik Mohammad Arshad Credit Officer Cashier Cashier Manager Operatinal Manager

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Current staff of branch according to qualification and experience:
Mostly the staff of the Bank has not the lot of experience but their qualification is high because mostly employees are young. Let¶s see the brief introduction of the Banks staff experience and their qualification: Mohammad Asif Farhan Sharif Mohammad Asif Mohammad Qasim Khalid Masood Malik Mohammad Arshad M.Com M.BA M.B.A M.B.A Matric Matric 7 years 4 years 3 years 2.5 years 27 years 23 years

Training received by number of employees:
For the efficient working training is an important part and it clears the direction of the employees towards attaining the organizational goals. In banks every employee received the basic course of training of the banking system in which overall view of all the bank work is provided and than every person get the training in his particular job that is assigned to him. So in banks no one can be appointed with out the basic training.

Workload
The work load of the bank staff is based upon on the daily system. The office timing starts from 9.00 am to 5.00 pm (Monday to Friday) and 9.00 am to 1.00 pm on Saturday for the customers. After the bank timing the staff fulfill the daily vouchers transaction and made the entries on the net system and then counted the cash, put it in the safe. The banking staff should finished their word on daily basis whether there work is short or long.

Responsibilities
Responsibilities of staff depend upon the scale of the staff members. Higher the rank of the staff higher will be the responsibility on it. For example the Branch Manager responsibility is higher than the Operational Manager.

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Internship Report Branch Manager has the responsibility to deal with the Branch customer and with the outsider parties also while all the rema ining staff is responsible to deal with the Branch customers only. Branch Manager is responsible for the internal and external environment and the remaining staff is responsible for internal environment only. Operational Manager has the responsibility to c heck the activities of his subordinates. Cashier is responsible for all the cash transactions which occur in the Bank. Customer Relation officer is responsible to deal the customers well and provide them the necessary information if required.

Physical facilities
The branch where I have done my internship is MCB Adalat Garh branch, here the physical facilities available to the customers are sufficient, proper sitting arrangement is available, and gas heater in winter and air conditioners for summer is also available. But the facilities for the employees is not sufficient, employees have the combined table there is no separate rooms for the employees.

Critical analysis of the branch
Although the bank is performing their function very well but mostly the staff of the bank is young. They have very less experience and low banking knowledge. The banking staff always worries about for increasing the deposit of the bank rather than improving the customer¶s services. The Branch is not located in the business or industry area that why the customer¶s output is very low in the Branch. Every morning the Branch Manager gives the Branch report to the Regional Manager on the telephone meeting which has no logic because Branch Manager always worries for the deposit.

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Performances
In term of customer¶s satisfaction:
The customers are very satisfied with the performance of the bank. The bank is provided latest banking services to the customers so that they can easily access to their accounts. The bank is also providing the internet facility to theirs customers through this they can access to t eir accounts on the net h and they can check their balance with out going to Bank. The Bank also provides the door to door services to those customers who transactions are daily occurs that why those customers are very satisfied with the Bank and this thing also helps to the Banks for increasing their accounts holders.

In term of accounts and budgets:
The performance of the Banks is increasing day by day. The accounts holders are very satisfied with the faclities which they provides.

Summary:
In this chapter basically organizational attitude towards its employees and employee¶s satisfaction and attachment is discussed. MCB performs several functions and have many departments in order to retain and maintain their customers some of these departments are the c ollections department, Advance department, Bill department, Clearing department etc. To motivate

the employees MCB provide many allowances and facilities to its employees such as medical facility, huge amount of bonuses and also motivate the employees through promotions. The branch in which I have done my

internship is providing the very satisfactory services to its customers and large numbers of customers are satisfied with the attitude and the sevices provided the branch.

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Internship Report

Chapter # 4 Policies
Introduction
Chapter four is about policies of MCB. It include brief introduction of policies of MCB.

Policies:
Internship Policy:
MCB is the bank that serves all type of customers and makes its policies according to their needs and demands here the MCB has the policy to serve the students that is six weeks internship.

MCB has no gender bias
For the selection of the employee MCB focus on merit rather than gender. There is no any kind of discrimination on the basis of male or female, a person having the sk and knowledge and is ills perfect of that particular job can be selected as the employee.

Opening account policy
Prior to establishing a relationship with new customer MCB obtains basic information i.e. business, source of income, expected level of activity in the account and reasons for opening the account.

Training of employees
MCB has the program through which all the employees of the bank get proper training and then work for the achieving the goals.

Revenue Recognition
MCB recognized its revenue on accrual basis. For example if MCB invest in some different securities and entitled for the profit yet not received, the profit is recorded as when it earned not when it received.

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Investments Policy
MCB also invest its money other than the advances, while investing in the securities MCB has the following policy to invest in a) Held for trading b) Held to maturity In the light SBP regulations quoted securities are shown at market values and any changes arising are taken to profit and loss account only upon actual realization.

RISK MANAGEMENT
The bank is primarily subject to interest rate, credit and currency risks. The bank has designated and implemented a frame work of controls to identify, monitor and manage these risks are as follow

Currency Risk Management
To handle with currency risk, MCB enters into futures and swaps transactions in the inter-bank market and with the State Bank of Pakistan in order to hedge its assets and liabilities and cover its foreign exchange position.

Credit Risk Management
In order to manage the credit risk MCB has a good policy the bank first scan the information about the person who wants to obtain the loan and then assign the limit of sanctioned amount that is decided on the critical analysis of the person¶s income and resources. M CB is government backed bank that¶s why it provide the loan only against the security. y y Interest rate Risk Management To hedge with the interest rate MCB also focus on to make the interest rate swap and other documents.

MCB¶s Competitive Strategies
To be competitive the Bank has further reinforced its position in the Consumer banking area by streamlining and re-launching the consumer financing products and introducing more convenience based solutions. With

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Internship Report the re-launch of auto finance and house finance products, the Bank pushed the products with full thrust. The Bank has also launched a running finance facility against mortgage of property. Technology continued to play an important role in improving and expanding product offerings. The Bank introduced more IT based products to cater to the changing lifestyles and needs of the customers. MCB Virtual-Internet Banking was launched with wide ranging banking solutions for the customers ranging from individual to corporate customers and it has become the most pre ferred Internet banking solution in the country. MCB also had the privilege of being the first Bank in Pakistan to launch the comprehensive bill payment facility through its alternate delivery channels which include Internet Banking, ATMs and MCB Call Centre, currently with six payment partners. Similarly, the Bank also took initiatives to increase the usage of debit facility. To provide timely and updated information, MCB has also provided a new look to its website which is user friendly and considerably easy to browse. The Islamic Banking initiative has been very successful in attracting new customer, both individuals and companies. Similarly, those relationships, which were confined only to current account facility, have grown into stronger business relationships. The branch network was expanded to Lahore and Multan during the last year and recently been extended to Hyderabad and Faisalabad. The Bank plans to further expand its Islamic Banking branch network to other metropolitan areas and also to introduce new sharia compliant banking solutions to a wider range of customers for satisfying their individual and business needs. Some wide-ranging new strategic initiatives were also taken up which will be important for the Bank in years to come. A private company has been formed in Hong Kong (fully owned subsidiary of MCB) in partnership with Standard Chartered Bank, handling trade transactions of select countries in the Asia-Pacific region. It is projected to earn US$ 1 million in its first year of operations. To increase its international presence, the Bank will be opening its representative office in Dubai and entering into major strategic alliances with

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Internship Report banks in the UAE/ especially for marketing our consumer banking products to non-resident Pakistanis. Furthermore, feasibility is also being carried out for entering other international markets. MCB's operations continued to be streamlined with focus on rationalization of expenses, re-alignment of back-end processing to increase productivity, enhancement of customer service standards, process efficiency and controls. The Bank has taken the lead in introducing the innovative concept of centralizing Trade Services in the country by providing centralized foreign trade services to branches with a view to improve efficiency, expertise and reduce delivery cost. Management of Human Resources has been one of our core focus areas. MCB is committed towards attracting, retaining and motivating outstanding people. Challenge for MCB is to provide an environment inwhich employees can better realize their potential. The Bank introduced 'reward for performance' where high potential officers were identified and rewarded accordingly. In view of the competitive environment, the Bank is focusing on performance and introducing a more robust performance management system. MCB is also strongly committed to training its staff at all levels. The Bank will also be implementing the full suite of the latest version of SYMBOLS Version 8. MCB Bank will run SYMBOLS E-Finance modules to deliver personalized services to its customers over multiple delivery channels, while SYMBOLS Enterprise Operations Center will serve as its core banking transaction-processing engine. By implementing SYMBOLS, MCB Bank aims to raise the level of its customer service and its time to market in new product offerings for its three core banking businesses in Corporate, Commercial and Consumer Banking ± retaining its market leadership as Pakistan's progressive Bank.

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Summary:
This chapter discuss about policies of MCB. MCB has the policy to serve the students that is six weeks internship. MCB focus on merit rather than gender. To be competitive the Bank has further reinforced its position in the Consumer banking area by streamlining and re-launching the consumer financing products and introducing more convenience basedsolutions.

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Chapter # 5
Introduction:

Different Models

In this chapter have some models that analysis and explain the real situation about the MCB. models that are following y y y SWOT Analysis PEST Analysis Ratios Analysis For gathering the real information about the opportunities and the threats that are facing the MCB this chapter include four

SWOT ANALYSIS:
The overall evaluation of a company¶s strength, weakness, opportunities, and threats is called SWOT analysis.

STRENGTH:
The main strength of the bank lies in its services. The other fact that contributes is approaching to each segment of society. Another positive issue that because the strength its innovation. Some others are as follows: y y y y y y y y y Bank reputation Technical management skills Customer satisfaction Promotion effectiveness Team based approach. Continuous improvement. Quest for quality. Employees respect and dignity. Good corporate citizenship

WEAKNESS:
Competition pressure: bank has tough competition pressure. We are having very well established and well reputed competitor in the market having

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Internship Report addressing the same community as we are dealing and is having good services. Financial pressure: no doubt MCB has a lot of finance but due to competition pressure they have a need of finance.

OPPORTUNITIES:
For more amelioration there is a need of new market. Extra advertising support will enable us to improve our services. Almost every organization has the tendency to grow in size. We also have this opportunity.

THREATS:
y y Weak economic conditions of Pakistan Unregistered business concerns

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

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

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

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

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

Ratio Analysis of the MCB:
³An index that relates two accounting numbers and is obtained by dividing one number by other´ Ratio Analysis is an important and age -old technique of financial analysis. It simplifies the comprehension of financial statements. Ratios tell the whole story of changes in the financial condition of business. It provides data fro inter firm comparison. They also reveal strong firms and weak firms, over- valued and undervalued firms. Ratio analysis also makes possible comparison of the performance of different divisions of the firm. The ratios are helpful in decision about their efficiency of otherwise in the past and likely performance in future. Ratios also help in Investment decisions in the investors and lending decisions in the case of bankers etc. Following are the main types of ratios that I am going to calculate in this report to compare and high light the financial performance of MCB in 2009 with 2008

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Internship Report Variance compared to 2008 2009 Mark-up / return / interest earned Mark-up / return / interest expensed Net mark-up / interest income Provisions & write off Non-mark-up / interest income Non-mark-up / interest expenses Profit before taxation Taxation Profit after taxation EPS Rs. M 51,616 Amount 11,572 % 29%

"

15,841

4,281

37%

" " "

35,775 7,465 5,643

7,291 3,423 (149)

26% 85% -3%

" " " " Rupees

10,797 23,155 7,660 15,495 22.42

2,433 1,287 1,167 121 0.17

29% 6% 18% 1% 1%

Interpretation: The past two years data shows an increase in all return (i.e. interest earned, interest income, Profit after taxation) which is a positive sign. But mostly expenses (i.e. interest expensed, Provisions, Taxation) are also increase which show negative sign of business. The Bank should have to review its policies to decrease expenses.

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FINANCIAL RATIOS Profit before tax ratio (PBT/ total income) Gross Income) Income/ expense ratio Return on average equity (ROE) Return on average assets (ROA) Return on Capital Times Spread (NIM/Int

2009 55.91%

2008 63.80%

69.31%

71.13%

3.84 27.35%

4.10 31.49%

3.25%

3.60%

27.35%

31.49%

Employed (ROCE) Earnings per share (EPS Rs. before tax) Earnings per share (EPS Rs. after tax) Advances/ deposits ratio (Gross) Advances/ deposits ratio (Net) Breakup value per share Rs. 88.37 100.91 75.60 84.55 68.89% 79.39% 73.37% 82.64% 22.42 22.25 33.50 31.64

Breakup value per share Rs. (including surplus) Earning assets to total assets ratio Earning assets to Deposits & borrowings Deposits to shareholder Times equity ratio Capital Adequacy Ratio

87.23%

85.70%

107.74%

107.75%

6.02

6.32

19.07%

16.28%

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Internship Report

Interpretation: The past two years data shows that mostly financial ratios decrease which show negative sign of company. The Bank should have to review its policies to decrease expenses.

DIVIDEND RATIOS Cash Share Dividend Yield Ratio (based on cash dividend) Dividend Payout Ratio Bonus Shares Issued Dividend Per Rs.

2009 11.00

2008 11.50

5% 53.52% 10.00%

9.14% 56.19% 10.00%

Interpretation: The past two years data shows that dividend ratios decrease which show negative sign of company. The Bank should have to review its policies to decrease expenses.

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Chapter # 6
Shortage of Staff:

Recommendation

Almost in all branches of Muslim Commercial the problem of Shortage of Staff is very common. There are only few employees who are the be alland end all of the whole branch resulting in burden of work. Basically the main idea behind it is that whenever there is shortage of staff in any or ganization it always result in lot of work and also boots up the destructiveness as well because people working over there feel like that they can do whatever they feel like so are least bothered about the rules and regulations as implemented by the head office and mostly it results in corruption.

Staff Is Not Adequately Trained:
Staff in almost all branches of MCB is not adequately trained with the contemporary era. Basically MCB is from the very beginning, is pioneer of new products including ATMs, Mobile Banking and Online banking as well but as they developed the new systems and products in order to satisfy the customers want they didn¶t get their staff trained in relation with those innovations. MCB having two staff colleges one in Lahore and One in Karachi but both make you aware of the systems and procedures but are not training or can say emphasizing on these innovated products.

Online Banking
This problem is related to the previous problem as well because when the staff is not adequately trained then how can they satisfy their customer¶s needs, which is the basic theme or mission of MCB. When MCB started their online banking, there were only one or two banks (foreign Banks) doing this practice because of having a larger network as compared to all other domestic banks MCB started doing this practice but not successful in it because of the above two problems.

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Others
A lot of productive time is wasted by the staff in unproductive pursuits and tea and launch breaks are got voluntarily extended and the ti e spent in m corridors, depends on the staff will. This tendency of late must be eliminated which reflect adversely on the image of the institution and has posed aserious problem. No proper allocation of duties, suitable person for suitable job. Distribution of work is not on equity basis, work has not been allocated properly some workers have to work hard in late hours without any extra reward. So I suggest that steps should be taken to allocate the work properly. No periodic increase on salaries of employees.

Overall Suggestions For Improvement
From the quantum of the profit and its financial data it can easily judged that after privatization MCB is performing well. Its deposits are growing day-by-day and so is profitability. The controlling body is responsible for the productive performance of the bank. Following are my observation and suggestion to improve the efficiencyfor the development of the economy.

Introduce Various Profitable Investment Schemes
A big portion of the home remittance is sent by Paki tan working s capital through MCB Limited. As we know a big portion of this amount is wasted purchasing of luxuries. The people motivated to save money by offering the deposit through various investment schemes. The rate of profit should increase 1% or 2% than the other banks and it would be profitable step for bank.

Training Staff:
Staff turnover particularly of trained staff result in financial and other losses. The amount spent by the bank on employment, induction and training of an outgoing officer constitutes to beat till another officer should ready prove his work. The exodus of bank officer in the past has worsened the situation.

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Change The Nature Of Work:
Most of the bank employees are sticking to one seat only with the result that they become master of one particular job and loose their grip on other banking operation. In my opinion all the employees should have regular job experience all out-look towards banking. The promotion policy should be adjusted.

Refresher Courses:
Refresher courses for the staff are most important in any international organization. All the employees should have these courses according to their requirement. Foreign experts can also be called for this purpose.

Special Training In Abroad
Every year some of the employees should be sent for training to other countries and employees from other branches should be brought here. Some more reading material should be provided the purpose should be to educatethe employees with the advance studies in their field. The employees should be provided the opportunities to attend and participate in seminars andlectures on banking.

Incentive to Employees:
Bank should give some more incentive to its employees in order to remove the conflict between lower and higher officers and should try to improve the working condition of the bank. Such system should be designed that every employee who has some problems with his officers can communicate it to the higher management and some steps must be taken to improve that.

Others
The period of internship should be divided into the number of department of the MCB. The internee should be given timetable mentioning the number of days he has to work at different places in the bank. On the 1st 4 day in each department internee should be given a lecture by the officer of the department concerned about working of the department. A lot of productive time is wasted by the staff in unproductive pursuits and tea and lunch breaks are got voluntarily extended and the time spent in

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Internship Report corridors, courtyards, depends on the staff will. This tendency of late must be eliminated which reflect adversely on the image of the institution and has posed a serious problem. Distribution of work is not on equity basis, work has not been allocated properly some workers have to work hard and ha to work in late hours ve without any extra reward. So I suggest that steps should be taken to allocate the work properly.

Reward and Punishment
It is human nature one goes behind reward and incentives while and try to avoid from punishment. Likewise in com mercial institution like bank this system be introduced with full force means active smart, educated skilled, self spoken and well versed staff personal, should be reward and appreciates,while on the other hand lazy, lethargic, heared, rough dealers and il mannered must l be warned penalized and punished. But this all should be on merit and considering the policy of honesty is the best policy and mot due to some personal liking, disliking prejudice and patrimonial. It is therefore suggest certain schemes and checks may be introduced in banks to increase efficiency through reward and punishment system.

Survival Of The Fittest
It is not nearly a sentence or idiom right man for the right job according to his qualification to his qualification, profession skills and experience with the job specification must be considered while posting and placing the employees. It should not be like that a person who may be a very good worker but possessing lack of managerial capabilities should be posted as manager. Butas second place in command or some heavy working department wishedpersons together with managerial qualities and manners in the same fashion should be posted and placed as manager.

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REFERENCES
y http://www.oppapers.com/essays/Pakistans-Banking-Sector-Industry Analysis/181995

y

http://en.wikipedia.org/wiki/Economy_of_Pakistan

y

http://www.sbp.org.pk/reports/annual/arfy09/annex_index.htm

y

http://en.wikipedia.org/wiki/Muslim_Commercial_Bank

y

http://www.blurtit.com/q501915.html

y y

MCB Brochures Manuals Annual Report

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