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INTERNSHIP REPORT

ON
MCB Bank








Rana Azhar
BS Commerce
2010-2014




Department of Commerce
The Islamia University of Bahawalpur





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Department of Commerce
PREFACE

It is the requirement of the BS Commerce course The Islamia University of
Bahawalpur, that all students of BS Commerce have to spend six or eight weeks in any
organization to get practical exposure and to get familiarized with the ways to live in the
organizational environment which is dramatically different from the educational environment.
That two months period called Internship Period , if spent properly and sincerely, enables the
students to be more confident, more knowledgeable, more responsible and, above all, more
committed to its work in the practical field. I have also been assigned to do internship of eight
weeks period in MCB bank Jahanian
It has enabled me to understand the practical scenario and sharpen our decision
making power and utilizing the resources in an effective manner, so that our resources generate
maximum profit.
In preparing this report, I have put all of my best efforts and tried my level best to give
maximum knowledge. Despite of my all the coherent efforts, I do believe that there will always
be a room for improvement in the efforts of learner like me.


Rana Azhar
2010-2014




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Department of Commerce

ACKNOWLEDGEMENT

All praises to almighty Allah and our holy prophet Muhammad PBUH who gave me the
courage and patience for completion of this final report.
I wish to acknowledge my gratitude to my inspiring Teachers for their endless their
persistence, support and encouragement, and for providing me a lifetime opportunity to work
with MCB bank.
I am also very thankful to MCB Bank Ltd. Jahanian branch and the Branch Manager Mr.
Talha Anis who gave me opportunity to work with experienced persons in their organization.
I am also thankful to my parents, family and friends that continually offered encouraging
support



Rana Azhar
2010-2014




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Department of Commerce

TABLE OF CONTENTS
PREFACE ............................................................................................................... 2
ACKNOWLEDGEMENT ...................................................................................... 3
TABLE OF CONTENTS ....................................................................................... 4
EXECUTIVE SUMMARY .................................................................................... 6
INTRODUCTION OF SECTOR ............................................................................... 8
THE MUSLIM COMMERCIAL BANK LIMITED ...............................................11
VISION STATEMENT ........................................................................................12
MISSION STATEMENT .....................................................................................13
HEAD OFFICE ....................................................................................................14
CIRCLE OFFICE .................................................................................................15
MANAGEMENT OF ORGANIZATION ...........................................................16
ORGANIZATIONAL STRUCTURE ..................................................................17
INFORMATION ABOUT BRANCH .................................................................23
GENERAL BANKING ........................................................................................24
DEPARTMENTS WHERE INTERNSHIP WAS CARRIED OUT ...................26
OPERATIONS DEPARTMENT .........................................................................26
CLEARING DEPARTMENT ..............................................................................33
REMITTANCE DEPARTMENT ........................................................................38
OTHER DEPARTMENTS ...................................................................................42
CASH DEPARTMENT .......................................................................................43
ACCOUNTS DEPARTMENT .............................................................................44
TECHNOLOGY DEPARTMENT .......................................................................45
ADVANCES DEPARTMENT ............................................................................48


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Department of Commerce
FINANCIAL ANALYSIS OF MCB ....................................................................53
RATIO ANALYSIS .............................................................................................53

ADVANTAGES OF RATIO ANALYSIS: .............................................................54
LIQUIDITY RATIOS ..............................................................................................55
DEBT RATIO ..........................................................................................................56
MARKET RATIOS .................................................................................................57
VERTICAL ANALYSIS .....................................................................................64
HORIZONTAL ANALYSIS ...............................................................................67
SWOT ANALYSIS ..............................................................................................72
MCBs SWOT ANALYSIS .................................................................................73
STRENGTHS .......................................................................................................73
WEAKNESSES ....................................................................................................76
OPPORTUNITIES ...............................................................................................77
THREATS ............................................................................................................78
PEST ANALYSES ...............................................................................................80
APPLICATION OF CLASS ROOM LEARNING ..............................................82
WHAT I HAVE LEARNT IN MCB ....................................................................84
SUGGESTIONS & RECOMMENDATIONS .....................................................85
IF I WERE MANAGER AT MUSLIM COMMERCIAL BANK .............. Error!
Bookmark not defined.
REFERENCES & RESOURCES .........................................................................88



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EXECUTIVE SUMMARY

The banking structure in Pakistan comprises of the following types, State Bank of
Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks,
Specialized credit institutions. The state bank of Pakistan is the Central bank of the country and
was established on July 01, 1948. The network of bank branches now covers a very large
segment of national economy. The State Bank of Pakistan issues the shares of these periodically.
Bank employees and other common peoples can also purchase these shares and earn profit. In
1956, MCB transferred its Registered office to Karachi, where the Head Office is presently
located. In April 1991, MCB became Pakistans first privatized bank.
The corporate branch at Shahrah-e-Faisal Karachi (SFK) branch is the corporate branch
of MCB in Karachi. The bank is using SWIFT for transfer of information about imports and
exports. MCB SFK branch has Currently Following three Departments General Banking
Department, Advances Department & Foreign Exchange Department.
To open an account the customer has to meet the general banking manager with an
introducer. The procedure begins with the punching of account opening form to the customer file
i.e. customers master file. Before closing any account, bank send letter to the account holder for
informing him that his account is going to be closed. There is need an approval form higher
authority to close any account. Current deposits are those which are payable to bank whenever
demanded by the customer. Bank does not pay any profit on current deposits. The following are
the financial products/services of MCB Malay Mail Scheme, PLS Account, Saving 365 Account,
Capital growth certificate scheme, Fund Management Scheme, Khushali Bachat Account, Term/
Fixed Deposits and others like night banking, credit cards, traveler cheques.



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In remittance department like any other bank MCB also have instruments for transferring
of money, Telegraphic Transfer, Mail Transfer. In cash department both deposits and
withdrawals go side by side. This department works under the accounts department and deals
with cash deposits and payments. This department maintains the following sheets, books, and
ledger of account cash received voucher sheet, cash paid voucher sheet, Paying-in-slip, Cheque
book, Cash balance book. The clearing in Karachi at MCB or other banks is being done through
NIFT (National Institute of Facilitation Technology).
Bank provides this facility to the people who need advance money to meet their
requirement. Party dealing with other banks financial condition of borrower business and as a
first step credit proposal is being made. MCB provides advances, which are two types. Secured
Advances, Unsecured Advances. MCB usually classified advances in to following types
Agricultural Advances, Commercial Advances
Industrial Advances. Commercial Advances are of following types
Demand Finance, Cash Finance, Foreign bills purchased, Finance against imported
goods, Finance against foreign bills, Export Refinance Part I (Pre Shipment) & others. Banks
Agriculture division deals with the agriculture advances. Bank provides the Agriculture
Advances in order to enhance and support the agriculture sector of the country. Farm Credit &
Non Farm Credit.
In foreign exchange, MCB is dealing Foreign Currency Accounts, Foreign Remittances,
and Foreign Bills for Collection, Imports & Exports
Foreign currency accounts & the foreign currency department deals with the following
types of accounts, Dollar Khushali account, Current account, Saving bank account, Term


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Department of Commerce
deposit, Prime Currency Scheme. Foreign accounts are convertible on floating rate available to
the bank. Letter Of Credit facility is being provided by MCB in foreign exchange.



INTRODUCTION OF SECTOR
The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank.
This history of banking is traced to as early as 2000 B.C. Banking in fact is primitive as human
society, for ever since man came to realize the importance of money as a medium of exchange,
the necessity of a controlling or regulating agency or institution was naturally felt. The priests in
Greece used to keep money and valuables of the people in temples. These priests thus acted as
financial agents. The origin of banking is also traced to early goldsmiths. They used to keep
strong safes for storing the money and valuables of the people. The first stage in the development
of modern banking, thus, was the accepting of deposits of cash from those persons who had
surplus money with them.
The goldsmiths used to issue receipts for the money deposited with them. These receipts
began to pass from hand to hand in settlement of transactions because people had confidence in
the integrity and solvency of goldsmiths. When it was found that these receipts were fully
accepted in payment of debts; then the receipts were drawn in such a way that it entitled any
holder to claim the specified amount of money from goldsmiths. A depositor who is to make the
payments may now get the money in cash from goldsmiths or pay over the receipt to the creditor.
These receipts were the earlier bank notes. The second stage in the development of banking thus
was the issue of bank notes.
The goldsmiths soon discovered that all the people who had deposited money with them
do not come to withdraw their funds in cash. They found that only a few persons presented the


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Department of Commerce
receipts for encashment during a given period of time. They also found that most of the money
deposited with them was lying idle. At the same time; they found that they were being constantly
requested for loan on good security. They thought it profitable to lend at least some of the money
deposited with them to the needy persons. This proved a profitable business for the goldsmiths.
They instead of charging safe keeping charges from the depositors began to give them interest on
the money deposited with them. This was the third stage in the development of banking.


At the time of independence, there were 631 offices of scheduled banks in Pakistan, of
which 487 were located in West Pakistan alone. As a new country without resources it was very
difficult for Pakistan to run its own banking system immediately. Therefore, the expert
committee recommended that the Reserve Bank of India should continue to function in Pakistan
until 30
th
September 1948, so that problems of time and demand liability, coinage currencies,
exchange etc. be settled between India and Pakistan.
The non-Muslims started transferring their funds and accounts to India. By the end of
June 1948 the number of officers of scheduled banks in Pakistan declined from 631 to 225.
There were 19 foreign banks with the status of small branch offices that were engaged solely in
export of crop from Pakistan, while there were only two Pakistani institutions, Habib Bank of
Pakistan and the Australian Bank. The customers of the bank are not satisfied with the uncertain
condition of banking. Similarly the Reserve Bank of India was not in the favor of Govt. of
Pakistan. The Govt. of Pakistan decided to establish a full-fledge central bank. Consequently the
Governor-general of Pakistan Quaid-I-Azam inaugurated the State Bank of Pakistan on July 1,
1948. Thus a landmark was made in the history of banking when the state bank of Pakistan
assumed full control of banking and currency in Pakistan. The banking structure in Pakistan
comprises of the following types.
State Bank of Pakistan


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Department of Commerce
Commercial Bank of Pakistan
Saving banks.
Cooperative banks
Specialized credit institutions.
Commercial banks have been the most effective mobilizers of savings and have been
providing short-term requirements of working capitals to trade, commerce and industry.



Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all
over the country and in some foreign countries through a network of branches. All these
commercial banks were nationalized in January 1, 1974, and were recognized and merged into
the following five banks:
National Bank of Pakistan
Muslim commercial bank limited
Habib Bank Limited
United Bank Limited
Allied Bank of Pakistan

The state bank of Pakistan is the Central bank of the country and was established on July
1, 1948. The separation of East Pakistan and its repercussion in the form of economic depression
has caused a lot of difficulties to the banking system in Pakistan. The network of bank branches
now covers a very large segment of national economy. The numbers of branches have increased


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Department of Commerce
appreciably and there is now on branch of bank for every 3000 heads of population
approximately. There is done reasonable growth in deposits from the establishment of Pakistan.
Besides this growth, specialized credit and financial institutions have also developed over the
years.
The Government of Pakistan in the late 90s introducing the need for the privatization of
state owned banks and companies. The private sector has accepted the challenge and most of the
banks are privatized today. The State Bank of Pakistan issues the shares of these periodically.
Bank employees and other common peoples can also purchase these shares and earn profit.
Throughout the period of banking history the banks have been expanding rapidly and achieved
the desired goal of progress.


THE MCB BANK LIMITED
HISTORY:
MCB was founded by ISFHANI and ADAMJEE families in Calcutta on July 9, 1947.
MCB is not an overnight success story rather good track of services are responsible for the leaps
and bounds progress. After the partition of the Indo-Pak Subcontinent, the bank moved to Dhaka
from where it commenced business in August 1948. In 1956, the Bank transferred its Registered
office to Karachi, where the Head Office is presently located. Thus, the bank inherits a 52-year
legacy of trust in its customers and the citizens of Pakistan
The performance of MCB was badly affected by bureaucrat government. In January
1974, MCB was nationalized by Bhutto Government following the bank act 1974 subsequently
in June 1974 Premier Bank Limited merged with MCB.
PRIVATIZATION:


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Department of Commerce
When privatization policy was announced in 1990, MCB was the first to be privatized
upon recommendations of World Bank and IMF. The reason for this choice was the better
profitability condition of the organization and less
risky credit portfolio which made'' it a good
choice for investors. On April 8th, 1991, the
management control was handed over to
National Group (the highest bidders).
Initially only 26% of shares were sold to
private sector at Rs. 56 per share.
MCB besides being money financial organization have rendered invaluable services in
the economics and social developments of our country. MCB today, represents a bank that has
grown with time, experience and Pakistan. A major financial institution, in scope and size, it
symbolizes a fully-grown tree. Evergreen, Strong, and firmly rooted.








VISION STATEMENT


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Department of Commerce

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

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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Department of Commerce

DEVELOPMENTS:
After privatization, the growth in every department of the bank has
been observed. Following are some key developments:
Launching of different deposit schemes to increase saving
level.
Increased participation on foreign trade.
Betterment of branches and staff service level.
Introduction of Rupee Traveler Cheques & Photo Credit
Card for the first time in Pakistan.
Extended use of information technology which is evident from the
fact that there are 768 fully automated branches, more than 250- online
branches (integrated networking), 151 ATMS in 27 cities nation wide and
a M.C.B continuously innovate new product.
HEAD OFFICE
Chudrigor Road of Karachi has same importance in Pakistans economy as of the Wall
Street in world economy. The division working under MCB Head office is as follows:
Administration
Credit Management
Investment Banking
Human Resource


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Department of Commerce
Information Technology
Corporate Planning & Budgeting

Finance & Treasury
International Division
Inspection & Audit
Law Division
Marketing & Development
Trustee Division
Under the President an Executive Committee and a Credit Committee works. All the
matter of the bank join to the board of director are presented to the executive committee which is
responsible for daily operation of the bank .The request for credit exceeding the General
Manager power is approved by the Credit Committee. Under the area Executive is the General
Manager who is the in charge of the Circle Office. Under the General Manager is the Zonal
Manager and then the Branch Manager. At present, there are 9 circles, 47 regions and 1400+
branches. Before privatization there were provincial chiefs for all the four provinces. But this
management now has abolished the provincial officers and improved the efficiency of the bank.
CIRCLE OFFICE
The working of circle office is to control and regulate the functions of branches which are
under in its control. The functions of circle office are to mobilize the deposits and receive reports
from branches. Circle office is like a mini head office. Agents and correspondents of MCB are in
all commercial cities of the world. Circle office is divided in the following division:


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Department of Commerce
Credit Management
Audit & Inspection
Human Resource
Marketing & Development

MANAGEMENT OF ORGANIZATION

MANAGEMENT OF BANK:

Mian Mohammad Mansha Chairman
S.M. Muneer Vice Chairman
Imran Maqbool President & Chief Executive
Tariq Rafi Director
Sheikh Mukhtar Ahmed Director
Mohammad Arshad Director
Shahzad Saleem Director
Raza Mansha Director
Sarmad Amin Director
Mian Umer Mansha Director


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Department of Commerce
AUDIT COMMITTEE:
Tariq Rafi Chairman
Aftab Ahmad Khan Member

Dato' Seri Ismail Shahudin Member

Ahmad Alman Aslam Member




CHIEF FINANCIAL OFFICER:
Ali Amin
COMPANY SECRETARY:
Mudassar Hussain naqvi

ORGANIZATIONAL STRUCTURE
As MCB is a banking company listed in stock exchange therefore it follows all the
legalities which are imposed by concerned statutes Mian Muhammad Mansha is Chairman of
the company with a team of 10 directors and 1 vice chairman to help in the business control and
strategy making for the company.
Operational Management of the bank is being handled by a team of 10 professionals.
This team is also headed by Mr. Muhammad Mansha. The different operational departments are
Consumer Banking & IT div; Financial & Inter branch div; Banking operations div; HR & Legal
div; financial control & Audit div; Credit management div; Commercial Banking div; Corporate


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Department of Commerce
Banking div; Treasury management & FX Group and lastly Special Assets Management (SAM)
Group.
For effective handling of branches, it has been categorized into three segments with
different people handling each category. These categories are:

Corporate Banking
Commercial Banking
Consumer Banking



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Department of Commerce

CORPORATE BANKING:
These are branches which have an exposure of over Rs. 100 million. Usually includes
multinational & public sector companies
COMMERCIAL BANKING:
The branches which has a credit exposure of less than Rs. 100 million but having a credit
portfolio of more than Rs. 20 million (excluding staff loans)
Usually branches in large markets and commercial areas come under this category.
CONSUMER BANKING:
These are the branches which have exposure up to Rs. 20 million and these include all the
branches which are neither corporate nor commercial branches.
Recently the organizational structure was re-designed as follows:
Punjab
650
Sindh
243
NWFP
103
Blochistan
36
Azad J.Kashmir
14
Domestic
1046
Overseas
7
Total
1053
Furthermore, the bank has some proposals under consideration to open more branches in
some European countries and as well as in Japan & china


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Department of Commerce



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Department of Commerce

Chairman
Mian Muhammad Mansha


President
Imran Maqbool





Corporate Banking
Group
Muhammad Shoaib
Qureshi


Commercial Banking
Group - North
Imdad Ali Butt

Commercial Banking
Group - South
Shahid Sattar


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Department of Commerce



OVERSEAS BRANCHES:














Total no. of branches 7
Colombo
1
Mardana
1
Pettah
1
OBU Bahrain
1
Wellawatte
1
EPZ
1
Kandy
1


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Department of Commerce

INFORMATION ABOUT BRANCH
I did my internship in Muslim Commercial Bank Limited Kot Farid Branch, Sahiwal.
And some important information about my branch which I observed are as follows:
MANAGEMENT OF THE BRANCH:

Branch manager Mr. Talha Anis
Operational manager Mr. Asim
TSOs Mr. Shahid Hussain
Mr. Yasir Naveed
Peon Munir
Secrity guard Azmat

DEPOSITS:
The total deposits of this about to 207.10 million.
NUMBER OF ACCOUNTS:
Accounts in this branch of MCB are as follows:
CURRENT ACCOUNT:
Total numbers of current accounts are 1049


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Department of Commerce



PLS ACCOUNT:
Total numbers of profit and loss accounts are 2120.
KHUSHALI BACHAT ACCOUNT:
These are about to 600 accounts.
REMITTANCE:
Total remittance of this branch is 26.22 million.
RATE OF INTEREST:
The rate of interest provided by such bank is minimum 4.45% and maximum 9%.

GENERAL BANKING
It is backbone of banking It is one of the major department of MCB. It further consists of
following departments:
Operations Department
Current Department
Remittance Department
Clearing Department


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Department of Commerce
Cash Department
Accounts Department
Technology Department


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Department of Commerce

DEPARTMENTS WHERE INTERNSHIP WAS CARRIED OUT
Operations Department
Clearing Department
Remittance Department

OPERATIONS DEPARTMENT
In Operations department I was under supervision of Mr. Ayaz, Operational manager.
And I learnt to open
accounts of different
types and nature which
are as follows,




TYPES OF ACCOUNTS:
Single
Joint
Partnership


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Department of Commerce
Private Limited
Public Limited


SINGLE:
Only one person can operate this a/c. An individual who can fulfill the requirement of
bank can open this a/c. We can call it a personnel or individual a/c. The requirements for this
type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening
Form, Letter of Kinship etc.
JOINT:
In case of joint a/c applicant mentions that how much person will operate the a/c.
Instruction are given for joint a/c such that the account shall be operated by anyone or more. The
requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance,
Account Opening Form, Letter Kinship, Additional Signature Form (For Joint Account),
Declaration regarding the operator of account.
PARTNERSHIP:
For partnership a/c, along with the application form other requirements needs satisfied.
The requirements for this type are National Identity Card Photocopy, Minimum Deposited
Balance, Account Opening Form, Registration certificate, agreement among partners and
Commencement of business and private registration, resolution of board of directors,
commencement of business, memorandum and articles of association and balance sheet etc.
PRIVATE LIMITED:


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Department of Commerce
Such type of account is opened in the name of the businesses having private limited
concern and mostly medium business enterprises open such kind of accounts. All the board of
directors have to submit the declaration regarding the account operator on the company pad and
with the rubber stamp with the signature of the all the members of the board of directors. In case
of any change in directors bank must be informed regarding that. In case funds are borrowed by
the company all the directors approval is necessary rather not only the authorized partner who
can be the operator of the account.

PUBLIC LIMITED:
Public Limited A/C type of account is opened in the name of the businesses having
Public limited concern and mostly medium business enterprises open such kind of accounts. And
terms regarding board of directors are the same as of private limited.
NATURE OF ACCOUNTS:
Current Account
PLS Saving bank A/C
Khushali Bachat Account (KBA)
Saving 365 A/C
Basic banking A/C (BBA)
CURRENT ACCOUNT:
In this type of accounts the client is allowed to deposit or withdraw money as and when
he likes. He may, thus, deposits or withdraws money several times in a day if he likes. There is
also no restriction of amount to be deposited or withdrawn. However, there is requirement of
minimum balance maintenance of Rs. 1000/-. Usually this type of account is opened by the


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Department of Commerce
businessmen. No profit is paid by the bank and no service charges are deducted by the bank on
current deposits account. These types of deposits are also exempt from compulsory deduction of
Zakat.
PLS SAVING BANK A/C:
This account was started in 1980s after the issuing of banking ordinance in 1980 by Zia
Government to develop Islamic banking in Pakistan. In this case customer would be responsible
for bearing profit as well as loss. The bank would be within its rights to make investment of
credit balances in the PLS saving accounts in any manner at its sole discretion and to make use

of the fund to the best of its judgment in the banking business under the PLS system. For
withdrawal of larger amount, 7 days notice in writing is required to be given.
Minimum balance is Rs.500/=
Not more than eight withdrawals in a year allowed
More than Rs.15000/= are not allowed to draw
Seven day notice is required for big withdrawal
Zakat deducted on @ 2.5%
Profit calculated on monthly basis
Profit paid on annually basis
SAVING 365 ACCOUNT :
This account is newly developed of MCB and it provides flexibility of saving account to
business people. Profit on deposits will be payable on daily product basis on balance of RS.
500,000/- and above. However, if balance in the account falls below RS. 500,000/- on any day,


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Department of Commerce
the product will be ignored. There will be no restriction on withdrawal from the account. Zakat
and withholding Tax is also applicable on the account opened under this scheme.
Minimum balance is Rs.500,000/=
Below minimum balance, profit calculation ignored
Profit calculated on daily basis
Profit paid on annually basis
10% Withholding Tax on minimum balance
Zakat deducted on @ 2.5%

KHUSHALI BACHAT ACCOUNT:
Saving type account
Rate of return is 8% per annum
Profit calculated on daily basis
Profit paid on half yearly basis
Utility bills can be debited through this a/c
No charges will be debited for utility payments
BASIC BANKING A/C (BBA):
Introduced specially for salaried persons.
Minimum balance is Rs.1000/=
No service charges.


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Department of Commerce
Only two transactions allowed, in one month.
For more than two transactions Rs.35/- per transaction.
Single natured A/C.
ACCOUNT OPENING PROCEDURE:
Following steps are involved in A/C opening,
ACCOUNT OPENING FORM: Firstly the customer fills the account opening form
and provides all the information as provided above. I experienced to fill this form



INTRODUCTION:
An account is needed to be introduced. The introduction of a current account holder is
accepted for the opening of an account.
The introducer should be a branch customer or may be account holder of any
branch of MCB; however signatures should be verified by the banker. In certain
cases, introduction from bank other than bank MCB may be allowed.
Personally known accounts may be introduced by the bank staff.
Introduction from an account holder not personally coming to the bank should be
verified by the bank.
STAMPING:


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Department of Commerce
Then it is stamped. Stamps like. BAL sign verified, Sign Admitted Stamp, Sign Verified
stamps etc are affixed.
ACCOUNT NUMBER:
When all the procedures are completed than the final approval is taken from the branch
manager. After obtaining approval, an account number is allotted to the customer and all the
information is entered in to the computer and KYC is filled up. Then that account number is
writing on the Cheque Book, Specimen Signature cards and account opening form.
KNOWING YOUR CUSTOMER:
After entering information KYC is filled up. It should be ensured that at the time of
filling information in KYC, a customer should be physically present. After this all information is
saved in system. I filled KYC form also.



APPROVAL:
This account is further approved by Manager Operations.
SEND FORM TO HEAD OFFICE:
After fulfilling all the requirements and verifying the forms from operation manager the
account opening form is sent to Head Office Karachi and make request to issue the printed
cheque book.
LETTER OF THANKS:


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Department of Commerce
Subsequent to the opening of an account, letter of thanks should be sent under registered
post or courier service to the customer and the introducer.
ISSUANCE OF A CHEQUE BOOK:
After opening an a/c with the bank, the a/c holder can not immediately start operating
his/ her account. The cheque book is issued, when a customer will submit a copy of letter of
acknowledgement duly signed by him, in case of new account. And for subsequent issuance of
cheque book He/she has to make a request once again in the name of bank for the issuance of
cheque book and he should mention title of A/C, A/C number, sign it properly and mention the
number of leaves requires. Normally a cheque book having at least 25 leaves is issued but it can
also be of 50 leaves.
CLOSING OF AN ACCOUNT:
There is no. of reasons of closing an account. Some are listed below:
If customer desires to close his account
In case of death of one account holder.
Bankruptcy of the account holder.
If an account contain nil balance or not up to the requirement of rules.

Before closing any account, bank send letter to the account hold for informing him that
his account is going to be closed. There is need an approval form higher authority to close any
account.
CLEARING DEPARTMENT


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Department of Commerce
In clearing department I worked under supervision of Miss Shumaila Malik. In clearing
department and learned about inward and outward clearing and I also learnt about,
MEANING OF CLEARING:
The word clearing has been derived from the word clear and is defined as,
A system by which banks exchange cheques and other negotiable instruments drawn on
each other within a specific area and thereby secure payment for their clients through the
Clearing House at specified time in an efficient way.
CLEARING HOUSE
It is a place where cheques are presented, collected from bank branch. It is one of the
services provided by NIFT to other commercial banks. NIFT acts as a clearinghouse.
NIFT:
NIFT stands for National Institutional Facilitation Technologies. Clearing House of
SBP has shifted a tiresome part of its work to a private institution named NIFT. NIFT collects
cheques, demand drafts, Pay orders, Travelers Cheques, etc. from all the branches of
different banks within city through its carriers and send them to the branches on which these are
drawn for clearing. After the branches approve the instruments drawn on them, NIFT prepares a
sheet for each branch showing the number for instruments
and amount

in its favor and drawn on it and sends it to each
branch. A similar sheet for each bank is also sent to
clearing house of SBP where accounts of banks are settled
in the same manner.


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Department of Commerce
LEARNING IN CLEARING DEPARTMENT
My learning in clearing department was of following things:
Procedure of clearing a cheque.
Checking of cheques.
Inward and outward clearing.
Different reasons of returning a cheque.
Types of clearing stamps.
CLEARING PROCEDURE:
Instruments collected are treated as Transfer, Transfer Delivery, Clearing, and Cheque
collection.
CHECKING OF CHEQUES:
When the instruments are collected from the client. Following things are checked
Cheque date, instrument should be neither stale/ nor post-dated.
Title
Amount in figures and words should be the same
There should be no cutting and overwriting on the cheque
Instrument should not bear any unauthorized alternation.
Cheque is crossed.

TRANSFER:


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Department of Commerce
When the instruments are collected and paid by the same branch, it is called transfer.
TRANSFER DELIVERY:
When instruments are collected and paid by two different branches of the same bank
situated in the same city, it is called transfer delivery
A cheque is processed under transfer delivery when it has crossing stamp and is from
local branch of MCB
CLEARING:
Instruments which are drawn on the branches of some other bank of the same city or of
the same area, which is covered by a particular clearing house, are processed for clearing.
In outward clearing when cheque is received two copies of voucher SF-37 are prepared,
one copy and instruments along with clearing stamp, realization stamp, add list and two vouchers
of clearing summary are sent to NIFT in a sealed bag. And clearing records are recorded in
clearing register.
In Inward clearing instruments received from NIFT are posted in Computers after
checking.
CHEQUE COLLECTION (C.C):
When cheque is from another city then it is grouped as C.C.Such instruments are
processed as cheque for collection. In this procedure SF-37 form is used in Cheque collection.
Original voucher with cheque, stamped as C.C along with C.C number is sent to main branch of
the responding city which is further sent to NIFT. Whereas Carbon copy with Pay-In-Slip is
taken by bank for record purposes.




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Department of Commerce
PAY-IN-SLIP:
It is used for two purposes
Whenever we want to deposit cash in our account then pay-in-slip is used by
writing amount on it and depositing it to cashier along with money.
Whenever we have cheque from any party to be collected in our account we fill
pay-in-slip. One part is attached with cheque and another is given to cheque
holder as a receipt.
NOTE:
In inward clearing sometimes cheques are not passed due to some reasons then cheques
are sent back to NIFT along with cheque return memo. Some of these reasons are,
Cheque incomplete
Clearing stamp Required.
Drawers sign incomplete
Drawers sign different from specimen
Post Dated
Payment stopped by drawer.
Amount in words and figures differ.
Insufficient funds etc.




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Department of Commerce


REMITTANCE DEPARTMENT



REMITTANCE:
Remittance is transfer of funds from one place to another or from one person to another.
It is an important service provided by banks to customers as well as non-customers. Since it is
not a free service it is a source of income for the bank.
PARTIES INVOLVED IN REMITTANCE
Four parties involved in remittance: -
Remitter, Remittee, Issuing Bank, Paying Bank
REMITTER:
One who initiates, or requests for a remittance. The bank charges him a commission for
this service. He may or may not be the branchs customer.
REMITTEE:


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Department of Commerce
A Remittee is also called the beneficiary, or the payee. The person in whose name the
remittance is made. A Remittee is also the one who receive the payment.
ISSUING BANK:
The bank that sends or effects the remittance, through demand drafts, telegraphic
transfers, or Mail Transfers.


PAYING BANK:
Paying Bank also knows as the drawee branch. The branch from where the instrument is
drawn.
TYPES OF REMITTANCE:
Remittance is classified into following four types
Inward remittance, instruments received for payment
Outward remittance, issuing instrument to the responding branch.
Inland remittance, with in same country.
Foreign remittance, from one country to another country.
INSTRUMENTS USED IN REMITTANCE:
Demand Draft (DD)
Telegraphic Transfer (TT)
Pay Order (PO)


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Department of Commerce
Call Deposit Receipt (CDR)
Rupees Traveler Cheque (RTC)
DEMAND DRAFT:
DD is a written order given by the branch of the bank on behalf of the customer to other
branch of the same bank to pay the certain amount to the customer.DD are issued for the
particular place other than place of issuance. DD applicant or recipient, who might not be an A/C
holder present it to another bank at a different place requesting it to pay on demand a specified
amount of money which is already received to the person named on it.

DOCUMENTATION:
A printed application form is provided for filling in completely and signing by the
applicant. After depositing an amount of draft and commission of the bank, duly completed and
signed by two authorized officers, then it is handed over the applicant and credit order is
dispatched to drawee branch.
TELEGRAPHIC TRANSFER (TT):


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Department of Commerce
TT is fund that is transferred electronically which is remitted on the order of a certain
person. In this case the authority is given from one bank to other on the behalf of the customer
through telecommunication to debit their inter office account through them and credit their
parties account mentioned in TT. But it is not practiced these days frequently.
PAY ORDER:
For this kind of remittance the payer must have the account in the issuing bank. Pay order
are more liquid as compared to cheques because cheques may be dishonored while PO cant be.
It is written order issued by the bank drawn and payable on itself. It is used for local transfer of
money from one person to another person.

DOCUMENTATION:
The party who requires a pay order will get a printed application from the bank. He will
fill it and deposits the amount and commission.
CALL DEPOSIT RECEIPT (CDR):
It is an instrument like Cheque issued by the bank on account of a customer & in favor of
a person, to pay the specified amount. CDRs are issued to make payments, especially when a
company goes for some tenders or for purchase of government
securities or any contracts with others.
DOCUMENTATION:
The party who requires a CDR will get a printed
application from the bank. He will fill it and deposits the
amount and commission. The bank enjoys the benefit of keeping funds deposited until the
payment is not made.


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Department of Commerce
RUPEES TRAVELER CHEQUE (RTC):
RTC is the traveler cheque are acceptable at all branches
of MCB, and they carry dozens o f benefits. Security is always
being an important issue of concern. TCs provide maximum
security while carrying big amounts.
DOCUMENTATION:
First of all RTC-10 is given to customer. It is filled and then cash is deposited to cash
department. One copy is for office and one copy is given to the customer and RTC are issued at
that time.
NOTE:
At time of my stay in remittance department, there was no issue of CDR, TT, RTC, PO
so I were unable to understand its practical aspects, except clearing.

OTHER DEPARTMENTS
There have been some departments in which internship was not allowed, these
departments were
1. CASH DEPARTMENT
2. ACCOUNTS DEPARTMENT
3. ADVANCES DEPARTMENT
And in TECHNOLOGY DEPARTMENT I got information about ATM and Online
Banking and just filled their forms because computer work was not allowed to internees.



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Department of Commerce
CASH DEPARTMENT

The cash department is the most important department of the bank. In cash department
both deposits and withdrawals go side by side. This department deals with cash deposits and
payments.
The following books are maintained in the Cash Department:
Cash Receipt Book
Cash Payment Book
Cash Balance Book



The officers in this department are called teller and there were 2 tellers Mr. Nazir and Mr.
Abrash at the counter. This department is involved in two activities: Cash Deposits, Cash
Payments.
CASH RECEIPT BOOK:
The cashier is responsible to receive both
the paying-in-slip and cash from the depositor.
For depositing the cash into customers accounts,
there is need to fill in the paying-in-slip giving the
related details of the transaction. The cashier
check the necessary details provided in the paying-in-slip and accounts the cash and tallies with


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Department of Commerce
the amount declared in the slip then cashier fills in the Cash voucher received Record Sheet
and assigns a voucher no. to both the transaction being made in the sheet and the slip. The 2
nd

cashier posts the transaction entries in computer ledger. After posting these entries, computer
display before posting balance and after posting. Cashier assigns the stamp POSTED on the
voucher to show voucher transaction entries are posted.
CASH PAYMENT BOOK:
The only instrument that can be used to withdraw an amount from an account is the
Cheque book. No payments are made by another instrument. When cheque is valid in all
respects, the cashier enters the necessary inputs in the computer and posts the entry so that
account balance is updated. When cashier posts these entries, computer automatically display
the balance before posting the transaction amount, balance after posting.
The cashier at the same time maintains the Cash Voucher Received Record Sheet.
Then inspects the signature of the customer, cancellation mark of checking officer and stamp of
POSTED is placed on cheque before he hands over the cash to customer.
CASH BALANCE BOOK:
At the end of the working day cashier is responsible to maintain the cash balance book.
The cash book contains the date, opening balance, detail of cash payment and received in figures,

The consolidated figure of receipt and payment of cash is entered in the cash book and
the closing balance of cash is drawn from that i.e.
Opening Balance of Cash + Receipts - Payments = Closing Balance

ACCOUNTS DEPARTMENT


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Department of Commerce
The most important aspect in record keeping of a bank is its accounting system. The basic
purpose for maintaining an accounting system is to ensure consistency in record keeping and
accounts. The basic requirement for any accounting system is that it should be in accordance
with the GAAP i.e. Generally Accepted Accounting Principles. There are two choices available
to an organization for an accounting system.
Main Functions of Accounts Department:
The major function of this department is keeping the record maintenance of each and
every transaction and prepares reports about the amount of deposits and advances and sent to
Head office or State Bank of Pakistan on monthly, quarterly and yearly basis.
Following activities are carried out in
Accounts Department.
Budgets and budget review form
Income & expenditures.
Reports and Reconciliation.
Activity checking.

Depreciation & Maintenance of fixed assets provision.
Maintenance & depreciation of fixed assets.

TECHNOLOGY DEPARTMENT


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Department of Commerce

It includes;
Mobile Banking
Phone Banking
Online Banking
ATM
MOBILE BANKING:
It has been launched recently during my
internship. It helps in getting accounts details
and making transactions using mobiles.
PHONE BANKING:
"MCB Phone Banking is available to all customers on a countrywide basis. Customers
can dial 111-000-622(without any city code/prefix) from their respective cities
Customers enjoy 24x7 Round the Clock Phone Banking Services. MCB is the first bank
in Pakistan to offer Centralized connectivity.

ONLINE BANKING:
MCB now offers the facility of on-line banking to
its customers through its country wide network of
branches. Customers can use the ATMs or the banking
counters of any branch for day-to-day banking needs,


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Department of Commerce
irrespective of branch where they maintain their accounts.
There are now more than 250 branches linked through this system and they can transact
with each other directly using computer systems and the software named SYMBOLS at their
own branches.
ATM (Automatic Teller Machine):
ATM stands for Automatic Teller Machine. This machine is used to transact in one's
account without intervention of humans. These machines are basically used for taking cash,
confirming balances and requesting statements / cheque books.
MCB has the largest ATM network in the country at the moment
with almost one ATM at each online branch and also ATM
terminals at International Airports covering 27 cities of Pakistan
ATMs are operated through a card issued to the valued
customers and by application of Personal Identification Number
(PIN number). Now MCB has also entered into a contract with
Cirrus which is a subsidiary of MasterCard. This contract will enable an ATM card holder to
use his account even when he is out of country at all the ATMs where Cirrus logo is displayed.
Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/- in a
day. The annual fee for this card is Rs. 300/- only.
Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day.
These cards are issued to the persons having more than Rs. 500000/- as their average balance.
International Cards are issued in collaboration with Cirrus and are useable all over the
world with maximum withdrawal facility according to the standards of Cirrus.



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Department of Commerce

ADVANCES DEPARTMENT
Different banks provide loan facility to general public, companies etc. but MCB provides
two types of loans that are as under:
Fund Base Loans
Non Fund Base Loans
FUND BASE LOANS:
In this type of loans cash is directly involved. Bank provides loans in shape of cash. Bank
gives credit or limit facility to customers that needed it. In fund based loans there are two further
classifications:
Long Term Loans:
Lease facility for car
For Machinery
For Fixed Assets
Short Term Loans:
Running Finance (R/F)
Cash Finance (C/F)
RUNNING FINANCE:
The MCB provides overdraft facility to the customers for the working capital
requirement. These are the loans which are given to those customers whose business runs
through out the year or continuously. Its duration is one year and it is for running business.


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Department of Commerce


In advances there are two securities one is known primary security and other is secondary
or collateral security.
Hypothecation of stock is the primary security and mortgage is the secondary or
collateral security.
SECURITIES FOR FUND BASE LOANS:
Hypothecation of Stock
Mortgage
Pledge
HYPOTHECATION OF STOCK:
In hypothecation of stock the possession of goods and the title remains in the favour of
customer. Without the permission of the bank the customer can't sell the stock. It is the
restriction of the bank that in god own there should be stock according to the instructions of bank
every time. The draw back of this is that there is no check and balance of stock from the bank.
The customer can easily sell his stock.
MORTGAGE:
The bank can mortgage the immovable property like land, building etc as a security. In
mortgage the possession remains to customer and title of goods remains to bank.
PLEDGE:
In this, bank requires the moveable property of the customer as a security like stock,
vehicle etc. possession of goods remains to customer and title in the favor of bank. The bank
hires a muqaddam [Guard] and the key of store where the stock is pledged is in the security of


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Department of Commerce
bank. When customer wants to sell the stock then he pays the amount equivalent to stock which
he wants to sell. After receiving amount bank releases his stock for the same amount


NON FUND BASE LOANS:
In non-fund based loans cash is not directly involved but bank gives guarantee on
the behalf of customer. Bank works as a third party and known as Guarantor. Bank provides a
security to customer when he needs and someone requires from the customer.
DOCUMENTS REQUIRED BY BANK FOR ADVANCES:
Request of customer
Credit application from bank
Basic borrower sheet
Net worth certificate
CIB report
Financials
Account statement
Property evaluation report
For sale value certificate
Property documents
Title deed [fard]


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Department of Commerce
Property map
CNIC
Account opening form
Undertaking

Following steps are there:
Information required by the bank
Preparation of credit proposals
Sanction advice
INITIAL INFORMATION:
Following information is required to be submitted to bank.
Nature & structure of borrower business
Names of proprietors, partners or directors
Detail of all firms or companies associated with borrower.
Financial condition of borrower business
An assessment of his business abilities
Accurate and up to date financial statements of last two years for comparison
purposes
Market report on the borrower where borrower has maintained an account with
another bank, a report from his bank should also be obtained.


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Department of Commerce
A report from credit standing bureau of State Bank of Pakistan
PREPARATION OF CREDIT PROPOSAL:
At first a formal application for credit approval is obtained from the party along with
complete group position. The partys credibility report is obtained from the bank with which the
bank is doing its business. The partys credibility report is also taken from the Head office of
Trade Information Division.

For obtaining credit, party has to submit the last two years Balance Sheet and Profit &
Loss statement duly attested by authorised auditors. If the party is also involved in export or
import business then the bank also considers the data of three years about import & export.
Current debt and equity ratio is also calculated by the bank. The type of data required to prepare
the credit proposal is to be gathered from the different departments. Some data is obtained from
the foreign Exchange department. Some data is available in Advance Department. The purpose
of obtaining Credit should be explained clearly. The securities offered by the party to the bank
are also evaluated. In case of pledging of property in shape of land or building the complete
evaluation of the property should also be attached.
After all the necessary documents for applying for advance is fulfilled by the party then
the case is sent to Manager for approval. If the credit limit is in his range then he can decide over
it otherwise the case is forwarded to seniors. If there is any discrepancy then the party is
informed of it.
Sanction Advice:
When the documents required are complete and there is no ambiguity then the party is
advised that their credit or loan is approved and will be available to you soon.
The form contains following information:
Nature and amount of limit.


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Department of Commerce
Purpose
Security/ Collateral
Margin (%).
Mark up/ Charges
Validity


FINANCIAL ANALYSIS OF MCB

RATIO ANALYSIS
Ratio analysis is an important and old technique of financial analysis. Ratios are
important and helpful in the reference that:
These simplify the comprehension of financial statement and tell the whole story
of changes in the financial conditions of the business.
These provide data for inter-firm comparison. The ratios highlight the factors
associated with successful and unsuccessful firms, also reveal strong and weak
firms.
These help in planning and forecasting these can assist management in its basic
functions of forecasting, planning, coordination and control.
These help in investment decision in case of investor and lending decision in case
of Bankers etc.


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Department of Commerce
However, the ratios are only indicators, they cannot be taken as final regarding good or
bad financial position of the business other things have also to be seen.
Great care is needed while calculating meaningful ratios and in interpreting them.
Although there are several ratios, which an analyst can employ yet the type of ratios he would,
use entirely depends on the purpose for which the analysis is done i.e., a creditor would keep him
abreast about the ability of a concern to cover up its current obligations and so would care about
current and liquid ratios, Turnover of receivables, coverage of interest by the level of earnings
etc.



ADVANTAGES OF RATIO ANALYSIS:
It helps to give comprehensive financial statements in evaluating aspects of any
undertaking in respect of financial health, operations efficiency and profitability. It gives a
chance of inter-firm-comparison to measure efficiency and helps management to resort to some
remedial measures. It provides a good help in decision making for investors and the financial
institutions.
CATEGORIES OF RATIO ANALYSIS:
Liquidity ratios
Activity ratios
Debt ratios
Profitability ratios
Market ratios


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Department of Commerce
LIQUIDITY RATIOS
The liquidity of a firm is measured by its ability to satisfy its short-term obligations as
they come due. Liquidity refers to the solvency of the firms overall financial position i.e. the
ease with which it pays its bills. Due to low or declining liquidity firm moves towards financial
distress and bankruptcy.
Liquidity Measures are
Current ratio
Quick (acid-test) ratio



CURRENT RATIO:
The current ratio, one of the most commonly cited financial ratios, measure the firms
ability to meet its short-term obligations. It is expressed as follows:
Current assets
Current ratio = Current liability



RESULT:
Years 2008 2007 2006
Current ratio 1.42 1.02 1.31


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Department of Commerce
From the above ratios it is clear that the firms investment in current assets has increased.
In 2008 it is in better position to pay its obligations as they come due. But in three years we can
see that the firm has the ability to pay its current liabilities efficiently. The standard for this ratio
is 2:1 it is calculated by the current assets by total of the current liabilities.
This ratio is below the standard. The management should take steps to improve the short-
term financial position of the firm.
DEBT RATIO
The debt position of a firm indicates the amount of other peoples money being used to
generate profits. In general, the financial analyst is most concerned with long term debts, because
these commit the firm to a stream of payment s over the long run.
The debt ratio measures the proportion of total assets financed by the firms creditors.
The higher this ratio the greater the amount of other people money being used to generate profit.
The ratio is calculated by following formula
Debt ratio = Total liabilities
Total assets


Years 2012 2011 2010
Debt ratios
0.864958 0.860627 0.877075

RESULT:
The ratio indicates the more than half of the assets financed by the debt. This ratio is
almost showing the same trend throughout the previous three years. Debt ratio indicates the


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Department of Commerce
greater the risk and more financial leverage it has. It also shows that firm has paid some portion
of the debt during the year 2012.
MARKET RATIOS

Return on total assets
Return on equity
Earnings per share
RETURN ON TOTAL ASSETS:
It measures the overall effectiveness of management in generating profits with its
available assets. The higher the Return on total assets better will be the performance.

Earning available for common stockholders
Return on total assets =
Total assets




Year 2012 2011 2010
ROA 5.030% 5.505% 5.219%

RESULT:


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Department of Commerce
The return on investment of the firm is 5.03 % in 2012. It is less than the previous year. It
shows that firm generates Rs.5.03 for each Rs.100 of the investment which is very poor for the
company progress.
RETURN ON EQUITY:
Earning available for common stockholders
Return on total assets =
Total Equity


Year 2012 2011 2010
ROE (%) 28.313 34.73238 34.448881

RESULT:
The return on equity of the firm is 28.313% in 2012. It is less than the previous year. It
shows that firm generates Rs.28.313 for each Rs.100 of the investment made by the partners or
shareholders of the company (which are privately owned by four brothers).



EARNING PER SHARE:
Year 2012 2011 2010


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Department of Commerce




RESULT:
This ratio indicates the amount of income earned by the common stockholders. Above
figures clearly show the progress of the company and it maintains this ratio more than Rs.20
which is good for the investors.
VERTICAL ANALYSIS:
In vertical analysis each item of a financial statement is presented as a % age of the total
of items or some other suitable items.
HORIZONTAL ANALYSIS:
In vertical analysis each item in financial statement of the last year is considered as a base
of the same items.

EPS 24.38929 26.16947 22.95


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Department of Commerce
BALANCE SHEET
AS AT 31 December 2012,2011,2010

2012 2011 2010

(Rs. In '000') (Rs. In '000') (Rs. In '000')
ASSETS

Cash and balances with treasury banks
39,631,219 39,683,883 32465976.00
Balances with other banks
4,106,526 3,867,591 6649659.00
Lending to financial institutions
4,100,079 1,051,372 21081800.00
Investments
97,790,391 115,358,590 64450761.00
Advances
262,508,830 218,959,786 198236682.00
operating fixed assets
17,320,485 16,082,781 9073276.00
deferred tax assets
- - 174886.00
Other Assets
19,828,228 17,896,838 11044909.00

445,285,758 412,900,841 343177949.00
LI ABI LI TI ES

Bills payable

Borrowings from financial institutions
10,551,468 10,479,058 7089678
Deposits and other accounts
22,663,840 39,406,831 23943476
Sub-ordinate loans
330,245,080 292,088,347 257185110
Liabilities against assets subject to
finance lease
- 479,232 1597440


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Department of Commerce
Other liabilities
440,295 1,183,586

21,252,942 11,716,465 11177125
NET ASSETS
385,153,625 355,353,519 300992830

60,132,133 57,547,322 42185119
REPRESENTED BY:

Share capital

Reserves
6,282,768 6,282,768 5463276
Unappropriated profits
36,772,321 34,000,927 24662446

11,065,723 7,054,472 6278593
Minority interest
54,120,812 47,338,167 36404315

69 63 52
Surplus/ (deficit ) on revaluation of
securities
54,120,881 47,338,230 36404367

6,011,252 10,209,092 5780752

60,132,133 57,547,322 42185119

Income Statement
For the Years 2012,2011,2010

2012 2011 2010

Rs. In
'000'
Rs. In
'000'
Rs. In
'000'


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Department of Commerce
Mark-up /return/ intertest earned
40,049,505 31791754 25784853
Mark-up/ return/ interest expensed
11,592,922 7858819 4509146
Net Mark-up /return/ intertest income
28,456,583 23932935 21275707
Provision for diminution in the value of
investment - nrt
2,683,994 105269 121197
Provision against non-performing loans and
advances - net
1,335,127 2959583 1014540
Bad debts written off directly
- 199 47000

4,019,121 3065051 1182737
Net mark-up /interest income after provisions
24,437,462 20867884 20092970
Non-mark-up / interest income

Fee, commission and brokerage income
2,878,663 2,772,615 2325171
Income earned as trustee to various funds
21,867 5,859 483
Dividend income
451,312 535,813 746276
Income from dealing in foreign currencies
727,564 693,408 692010
Gain on sale of securities net
748,139 1,507,610 605865
Unrealized loss on revaluation of investments
(99,531) (3,329)
classified as held for trading

Other income net
1,201,834 1,002,160 577703
Total non-mark-up / interest income
5,929,848 6,514,136 4947508

30,367,310 27,382,020 25040478


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Department of Commerce
Non-mark-up / interest expenses

Administrative expenses
7580302 5,440,305 6505576
Other provision / (reversal) net
10120 (3,743) 11411
Other charges
920991 642,780 66708
Total non-mark-up / interest expenses
8511413 6,079,342 6583695
Share of profit of associated undertaking
30843 1,223,633 474030
Extra ordinary / unusual item
- -
Profit before taxation
21886740 22,526,311 18930813
Taxation

Current year
7387345 6,463,560 5709140
Prior years
-865344 -1294586 593906
Deferred
16348 899,898 61213
Share of tax of associated undertaking
25164 15,769 25675

6563513 6,084,641 6389934
Profit after taxation
15323227 16,441,670 12540879


Basic and diluted earnings per share - after tax
24.39 26.17 19.96




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Department of Commerce

VERTICAL ANALYSIS
BALANCE SHEET
AS AT 31 December 2012
2012 2011 2010
ASSETS
% % %
Cash and balances with treasury banks
8.90 9.61 9.46
Balances with other banks
0.92 0.94 1.94
Lending to financial institutions
0.92 0.25 6.14
Investments
21.96 27.94 18.78
Advances
58.95 53.03 57.76
operating fixed assets
3.89 3.90 2.64
deferred tax assets
0.05
Other Assets
4.45 4.33 3.22
total assets
100.00 100.00 100.00
LIABILITIES

Bills payable
2.37 2.54 2.07
Borrowings from financial institutions
5.09 9.54 6.98
Deposits and other accounts
74.16 70.74 74.94
Sub-ordianted loans
0.12 0.47


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Department of Commerce
Deferred tax liabilities
0.10 0.29 0.00
Other liabilities
4.77 2.84 3.26
total liabilities
86.50 86.06 87.71


REPRESENTED BY:

Share capital
1.41 1.52 1.59
Reserves
8.26 8.23 7.19
Unappropriated profits
2.49 1.71 1.83
total common stockholder equity
12.15 11.46 10.61
Surplus/ (deficit ) on revaluation of securities
1.35 2.47 1.68
total liabilities & equity
100.00 100.00 100.00



Income Statement
For the Years 2012,2011,2010
2012 2011 2010
Mark-up /return/ intertest earned
100 100 100
Mark-up/ return/ interest expensed
28.95 24.72 17.49
Net Mark-up /return/ intertest income
71.05 75.28 82.51
Provision for diminution in the value of investment nrt
6.70 0.33 0.47
Provision against non-performing loans and advances net
3.33 9.31 3.93


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Department of Commerce
Bad debts written off directly
0.00 0.18
Total Provisions
10.04 9.64 4.59
Net mark-up /interest income after provisions
61.02 65.64 77.93

0.00 0.00 0.00
Non-mark-up / interest income
0.00 0.00 0.00
Fee, commission and brokerage income
7.19 8.72 9.02
Income earned as trustee to various funds
0.05 0.02 0.00
Dividend income
1.13 1.69 2.89
Income from dealing in foreign currencies
1.82 2.18 2.68
Gain on sale of securities net
1.87 4.74 2.35
Unrealized loss on revaluation of investments
0.00 0.00 0.00
classified as held for trading
-0.25 -0.01 0.00
Other income net
3.00 3.15 2.24
Total non-mark-up / interest income
14.81 20.49 19.19

75.82 86.13 97.11
Non-mark-up / interest expenses
0.00 0.00 0.00
Administrative expenses
18.93 17.11 25.23
Other provision / (reversal) net
0.03 -0.01 0.04
Other charges
2.30 2.02 0.26
Total non-mark-up / interest expenses
21.25 19.12 25.53


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Share of profit of associated undertaking
0.08 3.85 1.84
Profit before taxation
54.65 70.86 73.42
Taxation
0.00 0.00 0.00
Current year
18.45 20.33 22.14
Prior years
-2.16 -4.07 2.30
Deferred
0.04 2.83 0.24
Share of tax of associated undertaking
0.06 0.05 0.10

16.39 19.14 24.78
Profit after taxation
38.26 51.72 48.64


Basic and diluted earnings per share - after tax
24.39 26.17 19.96

HORIZONTAL ANALYSIS

BALANCE SHEET
AS AT 31 December 2012
2012 2011 2010
ASSETS
% % %
Cash and balances with treasury banks
122 122 100


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Balances with other banks
62 58 100
Lendings to financial institutions
19 5 100
Investments
152 179 100
Advances
132 110 100
operating fixed assets
191 177 100
deferred tax assets
100
Other Assets
180 162 100

130 120 100
LIABILITIES

Bills payable
149 148 100
Borrowings from financial institutions
95 165 100
Deposits and other accounts
128 114 100
Sub-ordianted loans
30 100
Liabilities against assets subjectto finance lease
100
Deferred tax liabilities
100
Other liabilities
190 105 100

128 118 100
NET ASSETS
143 136 100


REPRESENTED BY:



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Share capital
115 115 100
Reserves
149 138 100
Unappropriated profits
176 112 100

149 130 100
Minority interest
133 121 100

149 130 100
Surplus/ (deficit ) on revaluation of securities
104 177 100

143 136 100

Income Statement
For the Years 2012,2011,2010
2012 2011 2010

% % %
Mark-up /return/ intertest earned
155.32 123.30 100
Mark-up/ return/ interest expensed
257.10 174.29 100
Net Mark-up /return/ intertest income
133.75 112.49 100
Provision for diminution in the value of investment nrt
2214.57 86.86 100
Provision against non-performing loans and advances net
131.60 291.72 100
Bad debts written off directly
0.42 100
Total Provisions
339.82 259.15 100
Net mark-up /interest income after provisions
121.62 103.86 100


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Non-mark-up / interest income

Fee, commission and brokerage income
123.80 119.24 100
Income earned as trustee to various funds
4527.33 1213.04 100
Dividend income
60.48 71.80 100
Income from dealing in foreign currencies
105.14 100.20 100
Gain on sale of securities net
123.48 248.84 100
Unrealized loss on revaluation of investments

classified as held for trading

Other income net
208.04 173.47 100
Total non-mark-up / interest income
119.86 131.66 100

121.27 109.35 100
Non-mark-up / interest expenses

Administrative expenses
116.52 83.63 100
Other provision / (reversal) net
88.69 -32.80 100
Other charges
1380.63 963.57 100
Total non-mark-up / interest expenses
129.28 92.34 100
Share of profit of associated undertaking
6.51 258.13 100
Extra ordinary / unusual item

Profit before taxation
115.61 118.99 100


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Taxation

Current year
129.40 113.21 100
Prior years
-145.70 -217.98 100
Deferred
26.71 1470.11 100
Share of tax of associated undertaking
98.01 61.42 100

102.72 95.22 100
Profit after taxation
122.19 131.10 100
Basic and diluted earnings per share - after tax
122.19 131.11 100



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RESULT ON THE BASIS OF VERTICAL & HORIZONTAL ANALYSIS:
From the above mentioned analysis following are my Result about the Operations of
branches of MCB for the year 2012,
MCBs income by operations has been increased by 122.19% than 2011.
Companys Total Assets in Pakistan has been increased by 130% than 2011.
Deficit has been decreased by 104 % in comparison with year 2011
Due to financial crisis in the world investment activities are slowed down in year 2008
and they are decreased by 152% than year 2011.
Due to its sound financial policies MCBs borrowing from financial institutions has been
decreased by 95 % than year 2011.

SWOT ANALYSIS
The overall evaluation of a companys strengths, weaknesses, opportunities and threats
Strengths (S) include internal capabilities, resources and positive situational factors that
may help the company to serve its customers and achieve its objectives
Weaknesses include internal limitations and negative situational factors that may interfere
with the companys performance.
Opportunities are favorable factors or trends in the external environment that the
company may be able to exploit to its advantage.


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And Threats are unfavorable external factors or trends that may present challenges to
performance.


A scan of the internal and external environment is an important part of the strategic
planning process. The SWOT Analysis provides information that is helpful in matching the
firms resources and capabilities to the competitive environment in which it operates.


MCBs SWOT ANALYSIS
STRENGTHS
MCB is the first Pakistani privatized bank and because of its quality management,
marketing, innovation in products and services. Owing to all such factors they have established a


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good reputation in the banking market. The name of MCB makes you recall the highly
cooperative and professional individuals ready to serve you with maximum zeal and zest.
The joining of experienced people, advanced management, advance setup and facilities
gave MCB an edge over its competitors.

MUSLIM COMMERCIAL BANKS IMAGE:
MCB is a reputable financial organization and is well known all over the Pakistan.
Perception is of producing a high quality services.
CUSTOMER CARE:
The Bank not only provides high quality services but it also look for the comfort and
convenience of the clients, MCB always preferred their customers.
MARKET SHARE:
MCB has covered much of the potential market and the net profit is increasing years after
years. Deposits and advances have sufficiently increased.
LARGE NUMBER OF DIVERSIFY PRODUCTS:
This is also its main strength as it has diversified in many products such as:
Debit Card
Visa Card
Car Financing
Agriculture Financing
BRANCH NETWORK


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It is the greatest strength of the Bank. In 2004, five more branches were added to the
network and by the end of the year 2005 the total number of branches was raised from just 53 to
143. MCB has also planned to open more branches in next coming years.
SOUND MARKETING:
Skillful marketing of the products is being achieving countrywide goals of Muslim
Commercial Bank Limited.


PHONE BANKING:
Every account holder can conform its balance on Phone and may ask for any query.
There are also 24 hours help lines for customers.
MOBILE BANKING:
It has been launched recently. It helps in getting accounts details and making transactions
using mobiles.
HIGHLY AUTOMATED BANK:
MCB in Pakistan is the also in the list of highly automated banks, about 750, like
Emirates because of its modern style of banking through fully computerized control and twenty
four hour banking.
FASTER BANKING SERVICE:
MCB have faster banking services that are making it more prominent in the banking
industry especially in operations and Foreign exchange. The customer prefers this bank not only
because of its faster speedy service rather due to reasonable service charges.


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INTERNATIONALLY DESIGNED PRODUCTS:
MCBs products are internationally designed products. These are valuable and
operational in all over the world.
CONTRACT WITH CIRRUS:
Now MCB has also entered into a contract with Cirrus which is a subsidiary of
MasterCard. This contract will enable an ATM card holder to use his account even when he is
out of country at all the ATMs where Cirrus logo is displayed.


WEAKNESSES
ADVERTISEMENT:
The majority of people are not well aware about the products of MCB. Therefore it
should advertise extensively especially RTC and Master Cards.
ACCOMMODATE BEHAVIORALLY:
A behavior has been noted that bank tries to feel at ease with good looking, rich and
educated people and the poor looking customers feel some bit strange in the environment of the
bank. The bank employees should try to accommodate behaviorally all type of customers.
MISMANAGEMENT OF TIME:
Mismanagement of time is another big mistake in MCB branches, the bank official time
of closing is 5:30pm but due mismanagement of time allocation and work the staff is normally
on their seats till 7:00 or 8:00 clock.


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AND ALSO,
Costly documents are required for loan sanctioning.
Some times bank also never meets stated rate of profit






OPPORTUNITIES
PRIVATIZATION:
As on December 31, 1998, sixty-eight scheduled banks with 9,106 branches are operating
in Pakistan. As on this date, total population of Pakistan is 140.03 million. Total number of
personal accounts with all scheduled banks as on December 31,1997, are 28.98 million. If we
consider the population statistics of working age group as on December 31,1997, it stands to the
figure of 96.64 million. Thus we can say those 28% of working age people of Pakistan are
having accounts with banks while 72% are unbanked.
The need of privatization has made people to switch to banks to satisfy their needs of
lending and borrowing. This not only increases the deposits but also the credit business.
DIVERSIFICATION:


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They may enter in New business or any other consumer-durable product in order to
promote their name, by introducing Loan for the students, small businesses, and handicraft
industry.
SOME MORE OPPERTUNITIES:
Information Technology.
Credit cards can give more earning.
Establishing more foreign Branches.
They should introduce Student Finance Facility.
They should also introduce mobile ATM



THREATS
CHANGE IN GOVERNMENT POLICIES:
Change in government policies has affected the banking business. Still banks have to wait
to get permission of state bank. The freezing of foreign currency accounts is a vital example of
letting people not to trust on banks.
COMPETITION:


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The Competition has become severe by the entrants of so many banks, So to exist one
will have to prove himself in its services through excellent management and will have to satisfy
its shareholders. Otherwise he will be out the market.
LOW INVESTMENT:
The decrease purchasing power of consumer in the current economic situation of the
country affecting the business activity speed too much and the result is the low investment from
the investors in new projects can create problem for the bank because it is working a lot in trade.
STATE BANK REGULATION:
As the Bank introduces unique products so they face problem if State Bank Of Pakistan
employ taxes on them which force them to increase the rate of Interest.
EXPECTATIONS OF THE PEOPLE:
Due to huge competition among those banks and MCB,, people are the basic
beneficiaries from it and thus their expectations tend to increase about the products and the
relative rate of interest thus creating a threat for MCB.
SOME BANKS ARE OFFERING KISAN CARDS.



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PEST ANALYSES
PEST analyses tell How Political, Economical, Social and technological factors affect
MCB. These are the external factors which affects the whole organization.
POLITICO-LEGAL FACTORS:
Stable government
Stable policies in favor of business
Improved relation with outside world
Law and order.
UNSTABLE GOVERNMENT:
Due to this reason foreigners hesitate to invest their savings in banks, as a result of
economy of our country is going downward and banks suffer.
ADVERSE LAW AND ORDER SITUATION:
The situation of law and order is adverse. The policies are not very handy and beneficial
for the country. The Govt. passes such rules which are not in the favour of bank e.g. The Govt. of
Pakistan has passed a rule that if anyone withdraws more than Rs.25000 then he will be charged
0.30% on withdrawal.
ECONOMIC FACTORS:
Pakistan's economy is going weaker and weaker. 9/11 has a great influence on the
economic crisis of all over the world. With economic factors the bank influenced very much that
are as under:


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Impact of WTO force to cost reduction methodology.
Low interest rate

Inflation
Low GDP growth
Budget deficit
Increase in Govt. duties
Fluctuation in exchange rates
SOCIAL FACTORS:
Social environment includes family, friends, a person's role and status. An individuals
life directly by society and the person acts according to his or her society. Cultural environment
includes norms, values, religion, conception and perception.
If we see the religion point of view then interest is not allowed that's why most of
the people hesitate to invest their savings in banks and yet they are not aware of
ISLAMIC BANKING.
Traditional business men do not like the business with bank. They pay their
creditors through cash not through cheque. They do not want to get the bank
facilities.
TECHNOLOGICAL FACTORS:
Today is the era of technology. In the every aspect of life technology plays an important
role.


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Due to rapid change in technology every bank has to change its technology to
compete other ones.
Increasing issue of securities due to technology resulted increase in cyber
crime. Cyber crime means manipulation. One person can easily transfer
amount from any other's account to his account.


APPLICATION OF CLASS ROOM LEARNING

During my internship of eight weeks in Muslim Commercial Bank, Ltd. Kot Farid
Branch, Sahiwal the knowledge given by my respected and devoted teachers proved to be very
helpful in understanding the environment in the organization and working practically.
Following are some key points about application of my class room learning in the
organization:
The knowledge achieved from the subject Business Communication helped me in
understanding customer dealing i.e. how to deal with them? How to understand their problems?
etc.
It also helped me in understanding the inter Organizational Communication i.e. circulars,
notices etc.
Also the Knowledge which I got from the subject Computer application in Business
also proved very useful.
Financial Management and Principles of Accounting helped me in understanding the
accounting terminologies which are used in bank e.g. what is debit and credit vouchers? What
are these for? And also in understanding that how entries are made against certain heads.


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WHAT I HAVE LEARNT IN MCB

In Muslim Commercial Bank Ltd. I really enjoyed working with the staff of Mandi
Branch, Jahanian having a wish to be employee of MCB. It was almost impossible to work in all
the departments within that limited time. But the staff of the branch provided me the opportunity
to work in the different departments for the sake of practical knowledge. I feel highly indebted to
work in the Jahanian Branch with the manager of that branch Mr. Talha Anis, because I learnt a
lot in that branch.
During my internship training in the MCB as I early mentioned that I have worked in
different departments & seats and learnt the following things,

How to deal with different types of customers.
Account opening.
Cheque book issuance.
Outward clearing.
Cheque for Collection.
Different forms and vouchers filling.
Experience of working in a well reputed organization.



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SUGGESTIONS & RECOMMENDATIONS

Following are some suggestions for Muslim Commercial Bank, Ltd.
ADVERTISING:
Bank must let potential customers know that all attractions for banking exist. This is done
by advertising on television and obtaining press coverage, in conjunction with direct mail,
window displays, leaflet in branches and in appropriate other locations (such as hotels, shops,
etc.) and including leaflets in statement of accounts sent to existing customers in the hope that
they will tell potential customers about the services provided by our bank.
INCREASED ATMS LOCATIONS:
Some personal sector customers prefer not to come to branch. They increasingly want to
deal with the bank in other ways, such as home banking or use of Automated Teller Machines
(ATMs), which need to be at every branch or some important shopping plazas and airports etc.
INCREASED SERVICES:
One way to retain the customers is to offer a wide range of services such as tax advice,
free life insurance equivalent to amount deposited, shares portfolio management, fund
management facility, etc., complimentary to the core services. Banks must have a slightly
different mix of services and mean of providing these such that customers can choose the mix
that suits them best.
MANAGEMENT OF TIME:
There should be a good management of time for the sake of employees i.e. offering them
free break hours instead of making them work in this time as well.


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GROWTH SCOPE FOR EMPLOYEES:
MCB should provide greater facilities to its employees, and give them bonuses for their
hard work and Promotions as well. There is a criticism on the banking management that the
salaries of the employees are decreasing in every succeeding year. And I think this will shake the
confidence and working habit of the employees
BANKING PROFESSIONALS:
The bank should hire banking professionals having experience in their respective fields
that will boost the performance of the company as currently MBAs are produced for this field so
they should be hired for enhancing the performance of company.
ATTRACT CUSTOMERS:
The banking company should offer such policies which would attract customers which
are denied by other banking in the market.
JOB ROTATION AND PROMOTIONS:
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
COMMUNICATION SYSTEM FOR EMPLOYEES:
As 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.


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REFERENCES & RESOURCES

To make this internship report data is taken from the following resources:
ONLINE RESOURCES:
Muslim Commercial Bank, Ltd http://www.mcb.com
Muslim Commercial Bank Pakistan http://www.mcb.com/pakistan/
State Bank of Pakistan http://www.sbp.org.pk
Statistical Bureau of Pakistan http://www.fbs.gov.pk
Interview with key persons at MCB, Mandi Branch Jahanian.