Professional Documents
Culture Documents
INTERNSHIP REPORT ON
MCB Bank Limited
Adalat Garh Branch, Sialkot
M
BY
Haseeb Razzaq
MBA (Finance)
08031020-076
Session: 2008-2010
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INTERNSHIP REPORT ON
SUPERVISED BY:
Signature:
Name:
Designation:
Chairman:
Signature:
Name:
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Acknowledge
ment
First of all I would like to thanks
to Allah on this occasion.
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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 banks correspondence with their customers and within
branches. I learned about documentation requirements and record
keeping for different activities and processes, especially the
documentation requirement for different kinds of financing facilities.
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Table of Content:
TABLE OF CONTENT:...............................................................................................................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 PAKISTAN:.....................................................................13
HISTORY OF BANKING IN PAKISTAN:.........................................................................13
ROLE OF THE ORGANIZATION IN PAKISTAN:..........................................................................15
OVERALL ORGANIZATION AND FUNCTIONS OF ORG IN 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 WORKING:.........................................................24
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
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LCS ESTABLISHMENT......................................................................................34
PAYMENT OR RETIREMENT............................................................................35
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
MCBs 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 OF THE BRANCH....................................................................................42
Performances...................................................................................................................43
In term of customers 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
MCBs 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
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CHAPTER # 6
RECOMMENDATION.....................................................................56
SHORTAGE OF STAFF:............................................................................................................56
STAFF IS NOT ADEQUATELY TRAINED:.................................................................................56
ONLINE BANKING.................................................................................................................56
OTHERS.................................................................................................................................57
OVERALL SUGGESTIONS FOR 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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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.
Purpose
Internship is the capstone experience that provides me with hands-on,
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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Scope
This study will facilitate the students regarding the working of Banking sector
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.
Objectives
I worked as an internee in MCB Adalat Garh branch, Sialkot. The main
objectives to study in MCB were:
Methodology
There are mainly two methods that are used for the collection of data.
Primary Data:
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Secondary Data:
of Pakistan.
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 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.
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 partial 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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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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Chapter # 2
INTRODUCTION:
This chapter will summarize that whats 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 thats the organization is performing and about the
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bring a collapse of a new state. By 30 June 1948 the number of the offices of
scheduled banks in Pakistan declined from 487 to only 195.In order to make
necessary arrangement for the assumption of control and expert committee
was appointed to recommend necessary steps, including the required
legislation to establish a central bank for Pakistan. The governor-general of
Pakistan Quaid-i-Azam Muhammad Ali Jinnah inaugurated the State Bank of
Pakistan order was promulgated on May 12, 1948. The first Pakistani notes
were issued in October 1948 in the State Bank of Pakistan withdrew the
reserves Bank of India notes of the value of Rs. 125.02 crores with the help
the Pakistan notes.
On 1st January, 1947 all Pakistani banks were nationalized through
Nationalization Act 1974. Under this law all Pakistani Banks become a pubic
property. All small banks were merged in bigger banks to create five major
Pakistani banks. These banks were to control by Pakistani Banking Council.
There are still controversies about this act of Govt. as whether it contributed in
success of failure of banks. However the major changes after Nationalization
were as follows:
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and to specialized agencies to cater for special requirements of specific
sectors. The country started without any worthwhile banking network in 1947
but witnessed phenomenal growth in the first two decades. By 1970, it had
acquired a flourishing banking sector.
Pakistan's banking sector has remained remarkably strong and resilient
during the world financial crisis in 200809, a feature which has served to
attract a substantial amount of FDI in the sector. Stress tests conducted on June
2008 data indicate that the large banks are relatively robust, with the medium
and small-sized banks positioning themselves in niche markets. Banking
sector turned profitable in 2002. Their profits continued to rise for the next
five years and peaked to Rs 84.1 ($1.1 billion) billion in 2006.
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.
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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 Pakistans 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 1,026
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 Ghousul-Azam, commonly known as Jail Road.
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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 customers values, beliefs, culture and history. We
value the equality of gender and diversity of experience and education
that our employees bring with them. We create an environment where
each individual is enabled to succeed.
EXCELLENCE
We take personal responsibility for our role as leaders in the pursuit of
excellence. We are a performance driven, result oriented organization
where merit is the only criterion for reward.
CUSTOMER CENTRICITY
Our customers are at the heart of everything we do. We thrive on the
challenge of understanding their needs and aspirations, both realized
and unrealized. We make every effort to exceed customer expectations
through superior services and solutions.
INNOVATION
We encourage and reward people who challenge the status quo and
think beyond the boundaries of the conventional. Our teams work
together for the smooth and efficient implementation of ideas and
initiatives.
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Functions:
Basically there are two basic categories on the basis of functioning of MCB
Bank, which are
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
Acceptance of deposits
Financing
Deposits:
There are basically two types of deposits and their nature vary due to time
factor, which are
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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o Saving deposits:
The saving deposits are the interest bearing deposits and although
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.
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 levied on withdrawal before
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 account or savings account in a
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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Demand Finances:
Demand Finances are those finances, which are given on demand.
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.
Cash Finances:
Cash finances are for a limited period of time i.e., one year. It is
This type of account is provided to the business for the purchase of fixed
assets and the assets is considered as the security.
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.
Collection of Cheques
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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.
Locker:
MCB also provides locker facility to its valuable clients. where of
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.
Transfer of Funds:
MCB also transfer funds of the customers from one bank to another
bank. If the transfer is at one station, they dont charge any commission and
even if they charge, they charge on reduce rate
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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 drawn for
three months and are used for financing internal as well as external trade.
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.
of exchange and thus provides facilities for financing the foreign trade.
Cash Department
Deposit Department
Advance & Credit Department
Remittance Department
Foreign Exchange Department
Summary:
Banking started in Pakistan after the bold and emergent decision of
formulation of SBP on July 1, 1948. Thereafter this sector has witnessed
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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 200809.
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
History of
Organization
Introduction:
with
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 1990s
introducing the need for privatization of state owned banks and companies in
April 1991, MCB because Pakistans first privatized Bank, the government of
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.
Manshas contribution, the Government of Pakistan has conferred him with
"Sitara-e-Imtiaz", one of the most prestigious civil awards of the country.
MCB is Pakistans 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 1,026
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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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 Best 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 Banks 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
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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,
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 Maybanks strategy,
as Malaysias 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
Pakistans 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 MCBs 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 MCBs 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
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completion of the term of the existing Board, scheduled to be on March 27,
2009.
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 Maybanks leadership and experience in these
segments coupled with MCBs 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.
top level
GENERAL BANKING
General banking deals with following services:
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REMITTANCE
It is transfer of funds. Funds can be transferred in shape of pay orders,
demand draft, mail telegram and telegraph transfer. Payments of fees of
different organizations, fulfillment of tenders, and collection of funds are the
main functions of remittance. Maximum part of general banking depends on
this department.
Issuance of different kinds of remittance:
PAY ORDER
Pay order is the property of person/company that has to take the
benefit of the amount being pay ordered by the concerned person. Pay
orders are made for the payment of fees, tender or issued for the
payments of dealings. These are required for the proof of payments
made between the bank and the customer in the favor of beneficiary.
These are noted in printed block letters and yearly serial numbers are
issued from computerized system.
DEMAND DRAFT
Demand drafts are made for the beneficiary for payments,
funds etc, these are made for outstation branches of the concerned
banks. An advice is also made for the confirmation of the draft send.
These are also approved and safe way of sending amount to the
beneficiary.
These are also noted by computerized system and a serial number is
issued from the computer system.
MAIL TRANSFER
Mail Transfer is made with in the city for transfer of amount.
An advice is also made for the confirmation of the draft send. These
are also approved and safe way of sending amount to the beneficiary.
These are also noted by computerized system and a serial number is
issued from the computer system.
TELEGRAPHIC TRANSFER
Telegraph Transfer is telegram message for transferring the
amount from one branch to other branch. A message advice and a
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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.
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 respective sheets.
INWARD CLEARING
It depends on those checks that are cleared inter branch and
with in the city. As the concerned branch receive any type of clearing
check first of all physical checking is taken place. For clearing
procedure there should be two days margin. These cheques have their
vouchers and the amount of the cheque and voucher should be
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identical. Than these cheques are stamped and noted on receiving sheet
as well as feed in to the computerized system.
OUTWARD CLEANING
It depends on those cheques that are cleared 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
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card forms. The ATM card has been activated by the number provided
at or with the specific card.
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.
FOREIGN EXCHANGE
LCS ESTABLISHMENT
Any company can provide its documents containing e-form,
bill of lading, short shipment notice in case of short shipment,
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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 system
now have been upgraded on computers. As we are reporting daily to
the head office, so an annexure has been maintained and faxed to the
head office.
ADVANCES / CREDIT
This department deals with the approval of different kinds of loans to
different business entities. The loans, which are being approved by the
department, are kept with some securities such as bonds, properties and any
other type of asset, which is equally valuable or more than this as a guarantee.
Every branch has its own limit, if the amount of loans is with in the limit of
the branch then it is being approved by the branch but if the amount of loan is
exceeding the limit then it has to make it approved by the head office. In this
case the branch stored all the required papers and sent them to the head office
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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.
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CURRENT ACCOUNT
MCBs Foreign Currency Current Account offers you the
convenience of unlimited withdrawals i.e. access to your funds
whenever you want without any notice. There is no limit on the
number of transactions you make in a day.
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5000 and the profit shall be calculated on an average basis maintained
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.
INVESTMENT BANKING
Our investment banking team has emerged as a leading player in
Pakistans 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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Private Placements
Debt/Equity Underwriting
Team Finance Certificates
Loan Syndication
Arrangement of Non-Fund Facilities
Mergers and Acquisitions
Privatization
Corporate Advisory
PERSONAL LOAN
The 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 client.
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Branches
665
248
106
37
18
1,074
6
1
1,081
Sub Brs.
7
1
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
Manager
Farhan Sharif
Operatinal Manager
Mohammad Asif
Mohammad Qasim
Credit Officer
Cashier
Mohammad Arshad
Cashier
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M.Com
7 years
Farhan Sharif
M.BA
4 years
Mohammad Asif
M.B.A
3 years
Mohammad Qasim
M.B.A
2.5 years
Matric
27 years
Mohammad Arshad
Matric
23 years
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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Branch Manager has the responsibility to deal with the Branch
customer and with the outsider parties also while all the remaining 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 check 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.
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Performances
In term of customers 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 their accounts on the net
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.
Summary:
In this chapter basically organizational attitude towards its employees
and employees 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 collections 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.
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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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.
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
MCB is government
backed bank thats why it provide the loan only against the security.
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the re-launch of auto finance and house finance products, the Bank pushed the
products with full thrust. The Bank has also launched a running finance
facility against mortgage of property.
Technology continued to play an important role in improving and
expanding product offerings. The Bank introduced more IT based products to
cater to the changing lifestyles and needs of the customers.
MCB Virtual-Internet Banking was launched with wide ranging
banking solutions for the customers ranging from individual to corporate
customers and it has become the most preferred Internet banking solution in
the country.
MCB also had the privilege of being the first Bank in Pakistan to
launch the comprehensive bill payment facility through its alternate delivery
channels which include Internet Banking, ATMs and MCB Call Centre,
currently with six payment partners. 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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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 in which
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 based solutions.
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Chapter # 5
Different Models
Introduction:
In this chapter have some models that analysis and explain the real
situation about the MCB.
opportunities and the threats that are facing the MCB this chapter include four
models that are following
SWOT Analysis
PEST Analysis
Ratios Analysis
SWOT ANALYSIS:
The overall evaluation of a companys 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:
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
addressing the same community as we are dealing and is having good services.
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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:
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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
o
o
o
o
o
o
o
Consumer income
Saving rates
Consumption patrons
Rates of interest
Budget deficit
Exchange rates
Cost of living
Inflation
SOCIO-CULTURAL ENVIRONMENT
A society is shaped by beliefs, norms and values. People in a society
consciously and unconsciously interact with:
Themselves
Others
Organization
Society
TECHNOLOGICAL FACTORS
Forces of technological advancement have played the most dramatic
role in shaping the lives of people. The rate of change of technology has
greatly affected the rate of growth of economy. New technology is creating
deep rooted affects which could be observed in long run. The improvement
techniques involved in on line banking. In brief PEST analysis affects the
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overall banking companies and provides us the information about the external
macro condition.
Variance compared to
2009
Mark-up / return / interest
earned
Mark-up / return / interest
expensed
Net mark-up / interest
income
Provisions & write off
2008
Amount
Rs. M
51,616
11,572
29%
"
15,841
4,281
37%
"
35,775
7,291
26%
"
7,465
3,423
85%
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Non-mark-up / interest
income
Non-mark-up / interest
expenses
Profit before taxation
Taxation
Profit after taxation
EPS
"
5,643
(149)
-3%
"
10,797
2,433
29%
"
"
"
Rupees
23,155
7,660
15,495
22.42
1,287
1,167
121
0.17
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
2009
2008
55.91%
63.80%
69.31%
71.13%
Income)
Income/ expense ratio
Times
Return on average equity
3.84
27.35%
4.10
31.49%
(ROE)
Return on average assets
3.25%
3.60%
(ROA)
Return
27.35%
31.49%
Employed (ROCE)
Earnings per share (EPS Rs.
33.50
31.64
before tax)
Earnings per share (EPS Rs.
22.42
22.25
after tax)
Advances/ deposits ratio
73.37%
82.64%
(Gross)
Advances/ deposits ratio
68.89%
79.39%
(Net)
Breakup value per share
Rs.
Breakup value per share Rs.
88.37
100.91
75.60
84.55
(including surplus)
Earning assets to total
87.23%
85.70%
assets ratio
Earning assets to Deposits
107.74%
107.75%
& borrowings
Deposits to shareholder Times
6.02
6.32
equity ratio
Capital Adequacy Ratio
19.07%
16.28%
on
Capital
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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
Dividend
Per
Share
Dividend Yield Ratio
(based
on
cash
dividend)
Dividend Payout Ratio
Bonus Shares Issued
Rs.
2009
2008
11.00
11.50
5%
9.14%
53.52%
10.00%
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
Recommendation
Shortage of Staff:
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 all and
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 organization 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.
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 customers
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 time spent in
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 a serious
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.
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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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.
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.
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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
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 have to work in late hours
without any extra reward. So I suggest that steps should be taken to allocate
the work properly.
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REFERENCES
http://www.oppapers.com/essays/Pakistans-Banking-SectorIndustry Analysis/181995
http://en.wikipedia.org/wiki/Economy_of_Pakistan
http://www.sbp.org.pk/reports/annual/arfy09/annex_index.htm
http://en.wikipedia.org/wiki/Muslim_Commercial_Bank
http://www.blurtit.com/q501915.html
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