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CHAPTER 1 INTRODUCTION OF INDUSTRY
Banking is one of the most sensitive businesses all over the world. Banks play very important role in the economy of a country and Pakistan is no exemption. Banks are custodian to the assets of the general masses. The banking sector plays a significant role in a contemporary world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance. It is purchase of car or building of home, banks are always there to serve you better. It is play ground or any educational or healthy societal activity the money of banks nurtures them. It is an industrial project or agricultural development of the country the sponsor-ship of banks is very much involved. Banks play very positive and important role in the overall economic development of the country. Pakistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to cater for special requirements of specific sectors. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it had acquired a flourishing banking sector. Nationalization of banks in the seventies was a major upset to domestic banking industry of the country, which changed the whole complexion of the banking industry. With irrational decision at the top all the commercial banks were made subservient to the political leadership and the bureaucracy. Specialized banking institutions were already working in the public sector. The new accountability paradigm changed the business ethics in the banking industry, and with this change started the disaster. Nationalization of banking industry was accompanied by violent changes in the external value of rupee. The commercial banks thus lost their assets management equilibrium, initiative and growth momentum. They ceased to be a

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business concern and became big bureaucracies. This was accompanied by indiscreet loaning under political pressure. They suffered from three terminal diseases: non-performing loans; higher intermediation cost; and loss of initiative and entrepreneurship. The rise to Labor Unions and Officers Associations made life tough and working conditions ugly to honest, dedicated and industrious workers in the realms of domestic banking industry. The era of nineties was the climax of privatization, deregulation and restructuring in the domestic banking industry and financial institutions. The Muslim Commercial Bank was the first bank to privatize. Followed by Allied Bank limited, United Bank Limited and now the Habib Bank Limited have been privatized. One thing good for that particular period was the recruitment of fresh officers in the domestic banking industry through well-organized policies of Banking Council. With the decay of Banking Council there was flood of insincere, nonprofessional, incompetent candidates directly appointed/ recruited in all the domestic banks of the country.

Public Sector Commercial Banks
• • • • Nation Bank of Pakistan First Women Bank Limited The Bank of Khyber The Bank of Punjab

The government of Pakistan permitted small private sector banks to operate, which indulged in doubtful policies to promote business. The public sector banking, which constituted the backbone, thus continued to suffer because of their approach, size and carried over liabilities. Mehran Bank is the prime example of that kind of lax banking in the country, which ultimately merged into National bank of Pakistan i.e. last resort of domestic banking industry.

Local Private Banks
• • • Askari Commercial Bank Limited Bank Al-Habib Limited MyBank Limited 3

• • • • • • • • • • •

Faysal Bank Limited Habib Metropolitan Bank Limited Platinum Commercial Bank Ltd Prime Commercial Bank Limited Saudi Pak Commercial Bank Ltd PICIC Commercial Bank Limited Soneri Bank Limited Allied Bank Limited MCB Bank Limited KASB Bank Ltd Atlas Bank Limited

In the meanwhile, western banks started entering into the business. They, with the support of ruling elite, concentrated on the big business, leaving the routine business to the local banks. This reduced the profitability of the local banks.

Foreign Banks
• • • • • • • • • • • • • • ABN Amro Bank Al Baraka Islamic Bank The Bank of Tokyo Mitsubishi CITI Bank Credit Agricole Indo Suez Deutsche Bank Doha Bank DIB Bank Hong Kong Shangai Banking Corporation IFIC Mashreq Bank PJSC Oman Bank NIB Bank Standard Chartered Bank 4

Specialized Banks

Zarai Taraqiati Bank Ltd. Industrial Development Bank of Pakistan Punjab Provincial Cooperative Bank Limited

CHAPTER 2 PROFILE OF MCB BANK LTD.
MCB today is one of the leading banks of Pakistan with a deposit base of about Rs. 230 billion and total assets of around Rs.300 billion. MCB has been engaged in extensive management and operational restructuring to streamline its operations and to achieve cost efficiencies. After privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer. MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking. Corporate clientele includes public sector companies as well as large local and multi national concerns. MCB is also catering to the growing middle class by providing new asset and liability products. The Bank provides 24 hour banking convenience with the largest ATM network in Pakistan covering 30 cities with over 197 ATM locations. The Bank’s Rupee Traveler Cheques have been market leaders for the past six years and have recently launched their Gift Cheque Scheme.

Mission Statement
At MCB we are committed to being the best financial services provider globally and locally. Our breadth of experience, leading-edge capabilities and financial strength create value for all our stakeholders: clients, investors, employees, and society as a whole. Though the Bank continues to evolve and change, the key to our success remains constant: focus on customer needs, spirit of innovation, and a broad range of expertise combined with technological power and financial strength delivered by diverse, highly skilled professionals across the globe. 5

Our goals are clear and merit is the only criterion for reward Social Responsibility As responsible citizens we contribute to the social welfare of the community. Our Values Trust We are the trustees of public funds and serve with integrity & commitment. forging and maintaining long term relationships Innovation We strive to be the market leaders in innovative products and services offering customized financial solutions with flawless execution Team work The diversity of our people is our strength. We inspire and challenge each other – working together to achieve synergy Achievement Our people are our most valuable asset. Ethical behavior is of critical importance to us. We are committed to a result oriented culture. operating within the legal framework Customer Focus We continuously seek to exceed our customer’s expectations. We adopt full compliance with internal and external policies and procedures. MCB Bank’s team of committed professionals is dedicated to maintaining long term customer relationships through outstanding service and convenience. 6 .Vision Statement Our vision is to “Challenge and Change the way you bank”.

Bahrain. 3 Overseas Branches 7 . MCB Tower I.MCB MANAGEMENT Chairman President & CEO Established Subsidiary Employees Offshore Banking Unit Head Office Mian Muhammad Mansha Mr. Karachi. Pakistan Phone: (92-21) 111-000-111 Branches 950 Domestic. Muhammad Aftab Manzoor 1948 MCB Asset Management Company The number of employees in Branch 11000. Manama.I. MCB Offshore Banking Unit. Chundrigar Road.

mortgages. personal loans. Services offered include: savings and checking accounts. credit cards. debit cards.CHAPTER 3 RETAIL BANKING Definition: Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. and so forth. MCB Retail Banking Products Bank Accounts • Khushali Bachat Account • Savings Account • Current Account • Foreign Currency Account Online Services • ATM services • Mobile Banking • Call Center • Bill Payments • Virtual Banking Traveler’s Cheque • Rupee Traveler Cheque Cards • Smart Card/Debit Card • Credit Cards Remittance • Pay Orders • Demand Drafts • Mail Transfer • Telegraphic Transfer • Online Funds Transfer 8 .

broken it up and used tools like technology. It is a way to grow economy and the economy always grows either by consumption o by other elements. and use of high. The main thing is that you have to create 9 . which has globe market of over US$30 to 35 trillion. They provide funds for the purchase of consumer durables.Loans • • • • Personal Loan Auto Loan Mortgage Loan Business Sarmaya Loan CHAPTER 4 CONSUMER BANKING Most commercial banks have ventured into consumer finance.end computing techniques to make that decision making which is judgmental. In consumers banking you got to be very fast. Housing finance is still mostly confined to two companies. namely House Building Finance Corporation and International Housing Finance Limited. All it has done is that it has taken the principles of corporate banking. automobiles and even housing. timely and wonderful at every point in time. In consumer banking you need prudent people. and delivering products. And consumption needs finance and finance needs certain set of skills. It requires lots of investment and systems to make sure that experience is error free. PICIC Commercial Bank and National Bank of Pakistan are busy in consumer banking. ABN AMRO Bank. Ours is the age of “Financial Derivatives” and consumer banking is one of them. Corporate banking is the backdrop on which consumer Banking has been made. take risks. high volume and high growth business. It’s a high energy business. It’s a much disciplined process in which you need to have an appetite for investments. Consumer banking is low risk. being undertaken by leasing companies and moharabas or separate divisions within financial institutions. It’s like working in a factory. prudential norms and high integrity. Everybody can buy technology products and copy manuals. Automobiles are covered either through leasing or auto loans. customer behavior. You got to build Infrastructure and you have to be technology oriented. Habib Bank. computers.

each one of them is geared towards making its mark in an already competitive environment that is the outcome of consumer banking. Askari and Union lack in technology. they make up by offering similar services at a much lower costs in urban centers. While the foreign banks have played the pipers’ role when it comes to introducing new products. Similarly. by virtue of their huge branch network. Multinational banks such as ABN AMRO. it is worth Rs. 17 billion. multinational or local. they have generated huge volumes of business while at the same time driving down the prices of the products they offer. REVIEW OF CONSUMER BANKING IN PAKISTAN Over the last 5 years. in 2002. HBL and MCB which have embarked in consumer financing activities in not just big cities but smaller ones too. they have targeted the same segment which may be one of 10 . UBL has launched 12 to 14 new products and according to its Former Deputy Chief Executive. Pakistan witnessed a phenomenal growth of consumer banking. By the end of 2004. This unprecedented development has followed privatization of nationalized banks. Citibank and Standard Chartered have the support of the knowledge base and funds of their foreign principals which made them first to introduce products. since 2003 when it was privatized. and for that you have to innovate new ideas to attract your customers. services and innovative technologies to their consumer base. HBL consumer banking portfolio was worth less than a billion rupees. UBL. In doing so. Be they large or small bank. And where the local banks such as Soneri. each one of them has been a market leader on month-to-month acquisition volume. For instance. Hot on the heels were the newly privatized banks. banking reforms brought about by the State Bank of Pakistan and an increasingly marketing-oriented approach primarily aimed by banks at a large urban consumer base.the willingness to take chances among your customers.

That was the time when the size of the total portfolio was a mere 200. only three banks were offering credit cards and they were all multinational concerns.their limitations in this area. back in the 1990s when consumer banking was still in its undeveloped phase. The scene all of a sudden changed when Bank Al Falah launched a no fee credit card and its consumer base ballooned to 100. On the other hand. along with many other inducements. The Image Factor 11 . banks have created awareness about their product menus in a huge way. Things would never be the same again.000 new consumers. customer relationship management is one area in which the banks need to raise their bar especially when loyalty thresholds are low. Prodigious Advertising One factor that has led to an incredible upsurge of consumer financing products has been the drastic reduction in the qualification benchmarks for premium products such as credit cards. industry experts predict that the real growth will come from local giants such as the UBL. For instance. Apart from that. which in turn is created by continuous innovation and of course a deep insight of consumer needs and requirements be the advertising is BTL or ATL. Now personal loans have longer tenures and posses easy payment options. The lesson: Never trust a bank on face value or simply what they boast in ads. The success of no fee credit card was followed by low interest packages on automobile loans and home loans.000 cards. HBL and MCB which have the necessary experience and knowledge of customizing products to specific local preferences. how does one bank differentiate its portfolio from its competitors? The answer lies in differentiation. Today. Many consumers have expressed their reservations about the low level of service and don’t think twice when it comes to switching over to other banks. Yet with so many banks offering the same product. by investing prodigiously on advertising and sales promotion efforts.

however. Banks also need to remember that while advertising works big time to attract both old and new customers.When all is said and done. Some industry experts. The best. Currently. there are many and especially the rising middle class who have started utilizing their services for improving their lifestyle. it is the quality of service and quick turnaround time that will make the consumer an ardent customer of any bank’s products and services. they also face competition from smaller banks (with less advertising budget) whose terms and conditions may turn out to be more attractive especially for consumers with less money. At the end of the day. So while big names continue to spend their huge advertising budget to promote their products. although the sky remains the limit when it comes to exploring the full potential of consumer banking because a large portion of urban Pakistan still remains untapped. with a mortgage the bank can always forecloses one’s property. is yet to come. word-of-mouth remains the most effective way of communication for their products and offerings. the recovery rate is around 97% and even if the customer is unable to pay up. The logic is simple: While advertising helps to build the image. however. banks still have to concentrate on continuous product development to retain their customers. say that the real test of default will come once the products started ageing and people will start getting tired of long loan repayments. in the auto-financing sector. the default rate is low. For instance. 12 . Now what does the future hold for consumer financing? Have the banks done enough homework to create awareness about their products through right strategies? Some top notch banks continue to hire professionals who have worked laboriously on brand development and building identities for their products. It has been nearly five years since banks started emphasizing on consumer financing and although majority of our population do not have the means to cash in on this development. it is the product that sustains that particular image. Aggressive marketing along with an effective and innovative mix of ATL and BTL has to continue at an impressive pace. however. And to a great extent they have succeeded.

its real strength is attractive rate on interest. In last eighteen months the brand has come a long way which is evident from the portfolio review given below. While the large MCB branch network makes it convenient for customers. MCB has also entered into other consumer financing products which include: • • • • Auto Financing Personal Loan House Financing Scheme (Pyara Ghar) Business Sarmaya All the above mentioned products and services are aimed at making the bank the most preferred provider of quality financial and asset building products and services.CHAPTER 5 MCB CONSUMER BANKING MCB is probably one of the first local banks to extensively explore the opportunities prevailing in the consumer banking area. & after that in 2002 the name was revised & starts new business with name of CAR4U. Auto Finance The auto finance brand was launched in January 2004 with a new brand name of “MCB Car4U”. The brand. Auto Loan MCB Deal in Auto Loan since Oct 2000 with name of CARCASH In 2 different categories that is Auto finance & Auto Lease. before it was re-launched 13 .

Car4U transfers cars at the end of the leasing period to the lesser at the residual value. The addition of PL in the MCB product suite will not 14 . and all other costs associated with the ownership of the vehicle. credit checks. First year insurance is taken up front from the customer along with the down payment. The car is owned by MCB but driven by the customer. The accounting treatment of financial leases differs from traditional financing.as Car4U. The installments (rentals) paid during the tenure cover the disbursed amount as well as the bank’s spread. duties. The product was launched with a tagline of “your power move!” The slogan portrayed power moves in all aspects of life to our potential customers and was illustrated by a ‘check-mate’ situation on a chess board. Post-launch. The failure of MCB Easy Personal Loans (EPL) was due to absence of a non-operational system which led to problems in Collections resulting in high delinquencies. If a customer chooses to pre-pay his/her loan. Surprisingly.539 cases. The risks involved with leasing are not any greater than those associated with financing. Car4U only engages in financial leases. the entire outstanding moneys to settle the disbursed amount are retrieved from the customer. Leasing involves an inherent risk. the re-launch on January 12th 2004 can be considered as the main launch. Now again MCB launched it Personal loan scheme in May 2006 with the different strategies & policies. Personal Loan MCB introduce Personal Loan in way back 2002 with the name of Easy Personal Loan. In essence. This risk is mitigated by insurance. But this product was fail. had less than 2. Auto Lease Leasing is treated as a separate product. while the insurance for subsequent years is amortized in to the installments. the number of cases grew by almost 75% in 18 months. about 70% of the portfolio consisted of MCB Staff Personnel and still the delinquency rate was more than 10%. and verification. As per the agreement the customer is responsible for the payment of taxes. due to higher brand recall and greater awareness.

but also provide the much needed profitability boost that the portfolio requires in the absence of any unsecured product.Home construction 3. 15 . Mortgages Loans The term loan brand was launched on 12th April 2004 with a tagline of “Ab tu ghar ki baat hai”. customers have to pledge his property. This is Running Finance product. MCB is offering Mortgages in three different sections: 1. accessibility and convenience along with the literal meaning.Home Renovation Business Sarmaya MCB introduce the Business Sarmaya in March 2005. The brand before launch had less than 50 cases so in essence it can be considered as a main launch. The maximum limit of this loan is 20 million.only strengthen the bank’s image as an upcoming dominant player in the market. The tagline was multi facet bringing out the local status of the bank. The market potential for PL is huge and the demand for the product is reasonably high.Home Purchase 2. only 30-35% of actual market has been captured. To avail this Running Finance facility.

financial. constituents. Now many domestic banks are hiring experts of risk management to secure their precious assets. human. A valuable system is created by the conversion of available resources i.e. and controlling organization systems and resources to achieve objectives. customers. and intangible assets into goods and services that fulfill the needs of the customers and save the best interests of the banking and financial organization.CHAPTER 6 Problems of Domestic Banking Industry of Pakistan & Global Trends a) Knowledge of Risk Management is missing The main purpose of financial and banking organization is to create valuable system by interacting with its environment. directing. Managing risk must come from within and act to change the organization and its response to changes in the environment. Risk management performs all these diversified but integrated work to achieve maximum out-put. suppliers. physical. Managing risk is actually managing the organization: planning. technology. b) Total Quality Management: Paradigm Shift 16 . etc. economy. organizing. government. MCB Bank Limited has also created risk management group at head office and as well as regional level to save the best interests of the bank and enhance the chances of investments. competition.

financial discipline. Our commercial banks must pay attention to this shift and start thinking strategically for providing high quality products and services to customers. The banking industry should determine where improvement is needed. why they occur and how they can be avoided. scarcity of resources. human resource administration and above all genuine leadership qualities to adequately operate within a highly sensitive and complicated industry.Ours is the age of cutthroat competition. 17 . financial and treasury management techniques. At the dawn of WTO and increasing chances of investment banking among the SARRC countries the TQM is the need of the hour. expansion of economic markets and cultural diversity. integration of financial services. crisis management tools. The Changing Global Commercial Banking Industry Structure. technological advancement.1% from $6. According to a study from Business Communications Company. total commercial banking assets are expected to climb at an average annual growth rate [AAGR] of 7. soundness and transparency of banking system.537 billion in 2006. Inc. The middle management should need to have basic understandings about complicated management processes. In these complicated and conflicting financial and economic scenarios the need of TQM in the ranks of domestic banking industry is indispensable. how service can be improved and where operating system breakdowns occur.772 billion in 2001 to $9. marketing/product strategies. There is urgent need of having TQM in the realms of banking industry of the country.

During all this period we observed a lot of things. Before starting its full fledge consumer banking division the consumer banking operations were carried out at branch level. And there isn’t any proper check on them. I used to observe that whether all the employees are coming on time or not. They should try to improve co-ordination among themselves in order to avoid minor problems.Core Problem in MCB Consumer Banking As MCB is one of the largest private banks in Pakistan. So this thing needs to be improved. 4) Cleanliness: 18 . many key issues are still unresolved. I noticed that some people from the sales department used to come very late. Some of our observations are as under: 1) Attendance: I noticed that all the employees mark their attendance themselves. No matter how long they have to stay at bank. 2) Responsibility level of employees: The best thing I found here in MCB was that a part from a few employees all other workers are fully responsible and dedicated towards their work. they are performing their work honestly and with full dedication. The bank started its initial consumer operations from Karachi at low level in 2000 and shifted its operations to Lahore in 2002. Another thing that I observed was that the concerned people take much time in resolving different discrepancies. 3) Co-ordination of different departments: During our research we went through different departments and I found that coordination among different departments was not good at all.

and this is not the proper place for them. b) Some of the customers had a very chronic behavior due to the parking problem. stinky and gives a look of fish market. and a few of them were very chronic. 8) Employees are leaving: During my research I overheard that employees from the sales department were resigning because of the poor salaries. Washrooms’ condition is really pathetic on the 3rd floor. and this is something that should be appreciated. There are many reasons for their dissatisfaction: a) Most of the customers used to get hyper because of the miss commitments from the sales department. 7) Record keeping: I found that there was not enough space for keeping files or other papers. Sometimes customers misbehave a lot. and they complaint that we were not informed about that particular product properly. c) Another thing that really disturbs the customer is that sometimes sales department does not provide complete information to the consumers. Sweepers are not as responsible as they should be.Also noticed that cleanliness and neatness on the 4th floor is okay but it’s really bad on the 3rd floor. I saw that different files and papers were placed in the conference room. 6) Customer dealing: Customer dealing is really good when it comes to patience. So you should take into notice this thing as well. So you should try to make a large record room in which files could be placed orderly. There is not enough space. as they are not available with enough space to park their cars. 19 . 5) Overall impression of the customers: Some of the customers were satisfied. 3rd floor is very congested. Comparatively 4th floor is much better than the 3rd when it comes to neatness and cleanliness. but the staff here tries their level best to deal with them patiently and politely. And that’s why there are a lot of complaints from customers’ side. majority of them were not.

We have conducted research through special previous annual audit reports and by conversing with internal consumer banking experts. some are backward especially in remote areas. All its branches are not online. energetic and people with new ideas. This is really good. the Bank’s performance was not good at that time. where most of the work is done manually and equipments such as computers and fax machines are available in these areas. 4) Short-Term.9) Customer satisfaction survey: I noticed that a customer satisfaction survey to get their feedback is conducted. Top management was then hired from Citibank. 60 to 70 % is done. Research Methodology The methodology used in our research project is primarily derived from secondary data. The idea is to hire young professionals so as to train them overtime and place them in the middle management so as to increase the efficiency and performance of the bank in the long term. procedures and policies the bank has managed to reach sky rocketing profits. 10) Lack of training: There is no proper training for the employees. Internal restructuring in organization. In this way you can have an idea about the needs and requirements of the consumers and if they are satisfied with your services or not. ABN AMRO and other foreign banks. There should be proper training sessions for them to polish their potentials and for more improvement. The recruitment decision made by the Chairman 14 years ago is bearing fruit today. web portals and reports published by the R&D department of the consumer banking group from time to time. In 1992. It has de-motivated employees as there is a network of almost 1000 branches that has a much diversified culture. they are retiring old employees since they are in need of young. Short Term and Long Term Issue 1) Technical Problems. Due to the exceptional managerial efficiencies. 3) Some of them are very modern. 2) Commercial Banking. They are now more focused on organizational change. When MCB was taken over by Mian Mansha. 20 .

Sample Size The sample size of the research conducted is 24. According to that questionnaire our analysis are as follows: Our first heading in questionnaire is Consumer. This was filled by MCB Consumer employees of different departments. CHAPTER 7 Situation Analysis & Trends For the purpose of this project we prepare a questionnaire for MCB Consumer.Research Tool The research tool used in this project report is Questionnaires from Consumer Banking Group staff. The format of that questionnaire was in Annexure. 1) Consumer a) Do you think rising markup rates effect customer ability to pay? 21 . Under this heading we have three different questions about the consumer.

of people 8 6 4 2 0 1 2 3 Options 4 5 This graph shown that most of the employees think that there is some effect on the consumer by raising the mark up rates but it’s not much.14 12 10 No. So most of the employees think that the SBP policies will not affect on the bank as well as on customer because of both 22 . The trend of consumer financing remains the same but might be rising rate of the business will not as much as earlier. b) Do you think that SBP regulatory policies effect have a harmful effect on customer/bank? 14 12 10 No. of People 8 6 4 2 0 1 2 3 Options 4 5 As all we are aware that SBP is continuously changing its regulatory policies for consumer banking and all the banks are bind to adopt those changes.

As our review the 96% who said that the mark up rate is competitive with other banks. & return is going lower. & in this segment we ask four different questions of MCB product.are bounded to adopt those changes & those changes are for the safety of the banks for the customer and for the Govt. have a 23 . c) Do you think that rising inflation is also a problem for business (bank)? 16 14 12 No. 2) Product The 2nd segment of our questionnaire is Product. & only 4% think that MCB mark is not competitive with other banks. & due this inflation mark up rate of banks are going higher & higher. No doubt inflation is serious problem for every one. a) Is your price/markup competitive as compared to other banks? Competitivity of Pricing Don’t Know 0% No 4% Yes 96% 96% said that MCB mark up rate/pricing is better then their competitor banks. of People 10 8 6 4 2 0 1 2 3 Options 4 5 Here is again trend is almost the same as we seen in previous 2 questions.

Customer must pay the penalty on his remaining principle. 24 . Either customer pay off his loan in very first year or either in the last of approved tenure. more than one million of Mortgages & 1000+ of personal loan every year. Mark up rate can be vary as per state bank instructions or own bank’s will. Here 96% says that MCB is not offering fixed mark up rate.strong reason that MCB booked almost 1200+ Cars. Also the rates of the penalty vary from year to year. b) Did the bank offer fix rates on your products? Number of Questionnaires 0% 4% Yes No Don’t Know 96% In this question trend is again the same as previous question. Bank can re-price its products on every year closed. Where as 4% says that bank is offering fixed rate which shows the unawareness of the staff. C) Do you offer pre-payment penalty free offers? Penalty Free Prodcuts 25 20 15 10 5 0 Yes No Don’t Know 100 % people say that bank is not offering penalty free products.

As the strong network of any organization is helpful for its growth.Good 5.Excellent .Good 59% 5.Low 17% 2.Low 29% 2. In this scenario our questions are as follows. Like other banks MCB is also advertise their products thru different channels (TV. 70% think that the advertisement of MCB products is averagely influence the customer. 3) Coordination between Branches & Consumer Division The 3rd segment of the questionnaire is the relation & coordination of MCB Consumer & MCB Commercial Branches.Yes Excellent 70% As we all are aware that there is great influence of advertisement on the customers of any kind of product. 25 .Above Low 3. The marketing staff did not manage well to promote the products.Yes but not much 3. Boards).Average 4. Radio. 17% think that the advertisement is good.d) Do you think that there is customer influencing advertisement of your product? 0% 13% 0% 1. Coordination of COAD & Branches 0% 8% 4% 1. a) Supporting Level of Branches to Consumer Division. Where as only 13% think that the advertisement of MCB products put a great impact on customer.Average 4.

Excellent 53% 53 % said the Role of branches of MCB Bank to promote the MCB Consumer products is on average.How much branches support to Consumer section of MCB. where as 13% think that the branches are playing well to promote the Consumer products. c) Role of Branches in promoting the Consumer Products.Average 4.Very Good 5. Number of Questionnaires 0% 8% 13% 13% 1.Very Good 5. b) Branch behavior towards consumer division customer.Very Poor 2.Poor 3.Average 4.Very Poor 17% 2. Number of Questionnaires 13% 0% 17% 1. 4. 59% said that the branches support is average which is very high rate. Customer Satisfaction 26 . Even 13% said that the behavior is very poor.Poor 3. as consumer section can’t issue the Pay orders & demand draft so they need the support of branches in this regard & if the supporting level is average than it’s indication to the management to check out the issues.Excellent 66% Again 66% said that the same thing as in previous question.

where as 50% said that they are on average.Low 2. But over all it’s a good trend. b) Are your customers satisfied with the services provided by you? Number of Questionnaires 4% 46% 1.Excellent 67% So 67% said that these depts.The most important segment & most important thing of any organization Customer Satisfaction. we put 6 different questions in this section.very Much 5. 27 .Average 4.Average 50% 4. & 29% said the working of these Depts.Very Good 5. & 50% are confident that they facilitate the customer in good manner & customer is happy with relation to MCB. 46% said that customer is very much satisfied 4% said that Customer is highly satisfied with the services. And there are only 4 % said who said that they are going to be poor 7 below the bench mark. Are working properly & performing their jobs in a good manner.Highly satisfied This is a self testing question.Not Much 3. is on average. a) Are your customer services/collection/recovery/sales doing their jobs well? 0% 4% 29% 1.Poor 3.Very Poor 2.

d) Is there any proper call center for Consumer Assets? 4%0% Yes No Don’t Know 96% 4% said that there is not any proper any call centre of COAD. 17% said yes which also has shown the unawareness of the employees that they are not known about the existence of a department.c) Are walk-in customer services centers available in all major cities? 8% 17% Yes N o D on’t Know 75% 8% are unaware about this. Means 4% are unaware of about the call centre. e) Is your verification department working properly? 28 . Might the reason of this unawareness is that call centre of COAD is not much active.

And on the other side if collection people are collecting the installments of any customer then they will also think like that the customer was not verified in proper way. Where as 21 think that their working is on average & 13% think that they job is poor.Poor 3. Might be these are the sales persons or collection people who think like this because sales is also dependent on the verification Dept if they clear the customer then the further processing of that case will be done. 5. The summary of those suggestions is that to build up proper customer services dept in every bossiness area & especially in remote areas. We got the different suggestion for this question that which kind of improvement required.Excellent 66% are said that customer verification Dept is doing their jib in good manner. f) Is there any improvement required to retain the customer? 0% 4% Yes No Don’t Know 96% Here 96% said there is further improvement required to retain the customer.Number of Questionnaires 13% 1. Also a good training required of sales people.Average 4.Training of Sales Force 29 .Very Good 5.Very Poor 21% 66% 2.

Excellent 34% 30 .Poor 3.Very good 5.Average 4. a) Is sales force completely trained? Training of Sales Force 8% 13% 29% 1.Poor 3.This is also a very important segment of the questionnaire.Very poor 25% 2.Very Poor 2. where as 21 % think that they very good & above the average.Average 4. If your sales working well then you’re got the unlimited profit. Might be these are the sales people who said by yourself that they are on the best. We all aware of the importance of the Sales team of any organization.Excellent 21% 79% think that sales people are not properly trained they are on average or below average.Very Good 29% 5. b) Have you been providing adequate training to your staff? Staff Training 4% 29% 8% 1.

Very good 5.Poor 3.Very poor 2. 29% said they provide very good training to his or her staff and 4% said that the training for his staff is excellent.Very good 5.Excellent 50% 50% staff said they got training but on average bases.Poor 3.34% said that they had to provide the training but on average. c) Have you been providing adequate training? Your own Training 8% 17% 0% 25% 1.Average 4. 17% are very well trained where as the 25% said they poorly training means not efficiently trained.Average 38% 4. d) Commitment level of your sales forces to meet the targets? 4% 0% 8% 1.Excellent 50% 31 .Very poor 2.

e) Do Sales force cross sell all products? Cross Selling of Sales 4% 4% 29% 1.50% said that sales force is very much committed to achieve the targets. Over all 86% said the sales force of MCB Consumer is on average or above the average to achieve their assign targets.High 21% 42% said that they are on average to do the cross selling of all the products. Where as 38% put them on average rank. 6) Responsibility Level of Employees This is also a self-testing segment. And 50% said they are they are below the average to do the cross sell of all the consumer products. 32 .Average 42% 4-Above Average 5.Above Low 3. Where employees test their selves that where they are: a) Punctuality of Employees.Low Level 2.

which shows that punctuality of employees is not good & on average or below the average point. Amazing there is not any employee who selects the option below the average.9 8 7 6 5 4 3 2 1 0 1.Average 4. 33 . 0% 29% 1.Poor 3.Poor 54% 17% 3.Very poor 2. b) Responsibility towards their work. 29% said they doing excellent job and employees are fully responsible.Excellent As we can see most of the area is below the very good point.Very good 5.Very good 5.Average 4.Very poor 2. And 17% said that employees are taking responsibility in good manners. c) Level of Commitment with organization.Excellent 54% said that employees are taking responsibility of their works on averagely.

Low 2.Good 5.Average 4. Honestly & loyality of employees 0% 21% 33% 1. where as 29% think that commitment level is on average. which shows that employees commitment with the organization.Excellent 46% 46% vote that employees are honest & loyal towards their job more that average and 33% vote that the honestly & loyalty level of the employees is excellent. The trend shows the clear picture of the honesty & loyalty of Consumer employees.13% 0% 17% Low Above Low Avergae Good Excellent 41% 29% 41% said that employees of Consumer banking are committed with the organization in good manners. 7) Employees Turn over Ratio a) Is organization aware of the reason for employee turnover? 34 . d) Honesty and Loyalty towards their job. Only 21% think that it’s on average.Above low 3. So above the average is 54% & on average or below the average its 46%.

b) Is organization/management introducing incentives for employee retention? 0% 13% 1. The major reason of the turnover is the new induction of the banks in consumer sector and higher the experienced person from different banks on higher salary & grades.0% 4% 21% 25% 1.Highly Aware 50% 71% employees think that management is well aware about the turnover of the staff.Not Aware 2.Average 58% 29% 4.Much Aware 5.Not Much 3. 8) Motivation of Employees 35 .Aware but Not Much 3.No 2.Aware Averagly 4.Excellent 58% think that management take good action to retain his experienced & value added employee by giving them incentives/salary increment or by promoting them in next grade.Very good 5.

c) Is the management providing good leadership? 36 .High 63% 71% think that staff is highly motivated & fully dedicated towards their jobs.Very Much 5. Where as 21% think that self motivation is on average.Not Much 3. If employees are not motivated then no organization can achieve its goal & objective.Low 2. Its shows that they have complain with the management.Average 4. b) Does management take proper action to motivate the employees? 8% 8% 0% 13% 1.Very Much 5. a) Are your employees self motivated? 8% 0% 8% 21% 1.Average 4.Not Much 3.Low 2.Motivation is strong factor in the success of any organization.High 71% 71% people think that management action is on average to motivate the employees.

Average 46% 4. 8% think that leadership is excellent.Very good 51% 5.Poor 33% 3.Excellent 51% people think that leadership is on average. 35% think that leadership is very good. e) Are employees satisfied with their jobs timing? 0% 33% 8% 1.Very poor 2.No 2. f) Are employees satisfied with their salaries/benefits? 37 .Average 4.Very Much 5.8% 0% 8% 1. And only 8% people look much angry with the provided leadership. But amazing figure is 67% think that employees are not satisfied or they are averagely satisfied of which 46% said employees are not much satisfied with the job timings.Not Much 3.Very Highly 13% 37% think that employees are very much satisfied with their timings.

Very Highly 55% 55% employees think that employees are averagely satisfied with their benefits/remuneration. b) Is environment suitable for work? 38 .No 2.Very Much 5.8% 8% 0% 29% 1. 9) Working Environment a) Are the working conditions comfortable of all offices? 17% 1.Poor 3.Average 4.Very Poor 42% 2.Very Good 5.Average 4. It is also serious indication for the management that employees are not satisfied with the remuneration and might be the major reason of their turnover.Excellent 41% 41% think that working conditions are average & 42 % think that working conditions are very good.Not Much 3. Its mean little effort can make them more satisfied about the conditions. & 29% are not much satisfied with their benefits/remuneration.

25% think that environment is good but as much and might be these are the people who are in remote areas.Very Highly 38% 38% think that systems they are using support them at average.Average 4.Not Much 3. where as 21% think that environment is very good for working.Very Highly 46% 46% think that environment is average class.Not Much 3.Average 4. 29% think that system supports them a lot & same ratio is saying that system is not supporting much as they required.Very Much 5.No 2. 10) System/Manual Work/Documentation a) Does System of your division support you in all manners? 4%0% 29% 29% 1.Very Much 5. b) Is there proper check and balance in place? 39 .No 2.8% 25% 21% 1. Its mean the medium range of system is using.

c) Is your daily working fully automated? 4% 0% 33% 8% 1.Very Highly 55% says that automation is there but on average. d) Is there unnecessary documentation? 40 . and 41% says that there is average check & balance. Only 8% think that working is not automated.No 2. But 42% think that check & balance is more than average or excellent.Very Much 55% 5.13% 0% 17% 1.Not Much 3.Excellent 17% think that check & balance in consumer is very low.Poor 29% 41% 3.Very good 5.Average 4.Average 4. But 33% said that daily working is very much automated. 58% voted that check & balance is at average or below the average. Graph shows that consumer section is going on the process of automation time by time.Very poor 2.

Not Much 3.Very Much 5. so management also thinks over it & reduce this thing.0% 46% 8% 13% 1.Average 4.No 2.Very Much 5.Not Much 45% 3.Average 4.Very Highly 38% 45% says that policies & process are defined but not as clearer as required mean it’s on average. e) Processes & Policies are completely clear and well defined? 13% 0%4% 1. 36% says that process & policies are very much & very clearly defined but peoples are not much aware.Very Highly 33% Graph shows that 46% employees think that there is unnecessary documentation.No 2. 41 .

Average 4.11) Record Management a) Is there proper record keeping in the division? 13% 0% 13% 1.No 2. We believe that these 25% are from the remote areas.Very poor 2. Its mean a little concentration make the data more secure.Very good 5.Excellent 37% 37% Here data is not much scattered.Very Highly 58% 75% said that record is very much in safe custody.Not Much 3.Poor 3. But 25% said that it’s on average or not much. 42 .Average 4. almost equal ratio between average & very good.Very Much 5. b) Is record in safe custody? 17% 0% 8% 17% 1.

No 33% 2.c) Is record available on short notice? 8% 0% 4% 1.Very Highly 21% 43 .Not Much 3.Not Much 3.Very Much 5.Average 4. But over all trend shows that availability of record on short notice is good.Average 59% 4.Very Highly 55% 55% says that availability of record on short notice is very good. d) Is there any backup data available of record? 8% 8% 4% 1. where as 33% think that it’s on average.No 2.Very Much 5.

CONCLUSION As lots of banks are offering the same product. which in turn is created by continuous innovation and of course a deep insight of consumer needs and requirements. you should have something interesting and appealing and that would create interest in your customers. You should keep in mind consumers’ needs and requirements along with his financial background. how you can diffuse that innovation among your consumers. which means that after launching a new product or idea. And then you will be able to persuade them. Trend shows that there is not any tradition of data scanning. how does one bank differentiate its portfolio from its competitors? The answer lies in differentiation. After that they will evaluate that idea with their background and then they will be in a position to take the final decision. There is a need to bring the concept of diffusion of innovation in banking. It’s a five step process which includes: • • • • • Awareness Interest Persuasion Evaluation Confirmation While launching any new product. 44 .59% says that there is no scanning of record or data 21% says that not much data scanning.

Do not provide only that information to your consumers which you want them to know. 45 . Client Participation: For giving new services. Better Coordination: In order to create a better coordination the management should try to organize regular meetings. the following recommendations are suggested. RECOMMENDATIONS & SUGESSTIONS In the view of findings & situation analysis. the bank must involve the client’s opinion. Management must know about clients changing demands. This is to gain their sympathy & ensure them that they are important for the bank. It will also build a check on the employee’s work. Importance of time: How much important the time of clients must be noted by employee because foreign banks give a very quick response to clients. But in local banks it is noted that sometimes employees are busy in there own gossip or work. services to improve the efficiency and employee morale. Management must have notice on it. Innovations: New investment schemes must be offered for to attract clients towards your bank. Ideas from Employee(s): Ideas from the employee(s) should be taken in developing products. They must realize there employees that they are representative of the bank for its betterment. Provide your customer with detailed information.

etc. (Promotion policies.). loss & prevention mechanism) • There should be central compliant cell in the bank in order to reduce people’s complaints and foster the ratios of productivity. refreshing courses. award & reward) etc. Money laundering and white-collar crimes are on the rampant. It is good for bank reputation. accountability. Areas Where Improvements is needed • • • • • Internal & External Audits (concept of financial discipline. it must be lenient and flexible. Aggressive and comprehensive mechanism should be set-up to save the domestic banking industry of the country. rigorous planning and development. professionalism and impartiality) Communications Skills. Consumers Feed Back: On regular basis the customer’s feedback is very important. etc. No ambiguity should be left. international markets knowledge. Clear and comprehensive instructions Transparency in all matters especially in financing Aggressive marketing strategies in retail and commercial banking Institutionalization of Human Resource Management (best man should be posted to best assignment. Research and Development facilities (Domestic market research. because human is supreme than any entity. 46 . • • General working conditions ought to be improved. . economic analysis. . good corporate governance. seminar on emerging banking and financial problems etc.Consumer Financing: The term and conditions for giving loans are very strict. strategic insight of major economic and financial accords. • • Humanistic administration. There must be a suggestion form just to know about the customer’s complaints and management must take action on it.

Reservations regarding disclosure of key information Limited access to the Hub’s of Consumer Asset Division Limitation to reach Senior Executives Senior Executives were not interested to fill out the questionnaire Workload of four courses in the current semester.Limitations of Research Some key limitations of research are as follows: • • • • • • • • • • Shortage of time Working professionals Should obey the rules & regulations of MCB Bank Ltd. Obligations to the profession Difficult to conduct research in working hours 47 .

org.pk www.euromoney.org.mcb.pk www.sbp.com.net News Papers & Articles • • • The Daily News The Daily Dawn Daily Business Recorder 48 .map.Bibliography Websites • • • • • www.mediamonitors.pk www.com www.

Role of Branches in promoting the Consumer products 1 1 1 2 2 2 3 3 3 4 4 4 49 5 5 5 4. Encircle 1 for low & 5 for high rating.Product a.Do you offer penalty free products d. The subject project will be filed to University of central Punjab without declaring the confidential material & issues of MCB.Do you think that rising inflation is also a problem for business(Bank) 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 2.• Time Magazine Annexure Questionnaire on MCB Consumer This questionnaire is being prepared to accomplish the Research Project on MCB Consumer Banking.Customer Satisfaction .Supporting level of Branches to Consumer Division b.Do you think rising mark up rates effect customer ability to pay b.Do you offer fix rate on your product c.Do you think that there is customer influencing advertisement of your product Yes Yes Yes No No No Don’t Know Don’t Know Don’t Know 1 2 3 4 5 3.Is your price/markup competitive with other banks b.Branches behavior to Consumer Division’s customer c.Coordination between Branches & Consumer Division a. 1.Do you think that SBP’s regulatory policies effect (harmfully) on Customer/Bank c. Your kind cooperation will help us a lot to accomplish this project.Consumer a.

Is the management providing good leadership d.Level of their commitment with organization d.Responsibility level of employees towards their work c. If Yes.Training of sales force a.Does the management take proper action to motivate the employees c.Is organization/management doing things for employee to retain them 8.Commitment level of your sales force to meet the targets d.Motivation of Employees a.Is customer services walk in centers available in all the business cities d. then why? If No.Are employees satisfied with their salaries/benefits 9.Responsibility level of employees a.a.Are your employees self motivated b.System/Manual Work/Documentation 50 .Are employees satisfied with their jobs timing e.Is there any improvement required to retain the customer.Sales people do the Cross selling of all products 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 6. then why? 5. please support your answer.Is the environment suitable for work 10.Is your customer services/collection/recovery/sales doing their jobs well b.Is there any proper call center for Consumer Assets e.Is the atmosphere comfortable of all the offices b.Punctuality of employees b.Employees Turn Over Ratio a.Is your verification Dept working properly 1 1 Yes Yes 2 2 3 3 No No 4 4 Don’t Know Don’t Know 5 5 1 Yes 2 3 No 4 Don’t Know 5 f.Have you been providing adequate training(s) d.Is organization aware of the reason for the turn over of employees b.Are your customers satisfied with the services provided c.Atmosphere of the offices a.Have you been providing adequate training to your staff c.Is sales force completely trained b.Do they perform their job with honesty & loyalty 7.

Is there proper record keeping in the division b.Record Management a.Systems of your division supports you in all manners b.There is proper check & balance in place c. 51 .Is there unnecessary documentation e.a.Is there any backup of available of the record like scanning etc.Most of the work is automated d.Processes & Policies are completely clear & well-defined 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 11. Name: Title: Date: Note: Name & Title is not necessary to mark.Is Record of Assets in safe custody c.Is record available at short time notice d.

Management Hirarchy President Head of Retail Banking Head of Consumer Banking Head of Credit & policies Head of Consumer Asset/Business Country Manager Collection Secured Country Manager Collection UnSecured Country Manager Recovery Country Manager CIU Secured Country Manager CIU Un-Secured Regional Collection Manager South Regional Collection Manager North Regional Collection Manager Central Regional Credit Manager South Regional Credit Manager North Regional Credit Manager Central Same as RCM of Secured 3 RCM unsecured reporting to Collection Manager Un-secured Same as RM of Secured 3 RM unsecured reporting to CIU Manager Un-secured Head of Consumer Asset/Business Head of Operations & IT Marketing/ Advertisement Manager Accounts National Sales Managers Manager Autos Manager Personal Loan Manager Mortgages & BS RSM Autos Sales RSM Personal Loan Sales RSM Mortgages & BS Sales There are further 3 RSM’s of each product reporting to RSM Sales 52 .

Adeel Arshad & Mr. Usman Malik is approved: Prof. Kashif Ud Din Khan Advisor Research Project Cell Prof. Abdul Rauf Co-Assessor Research Project Cell 53 .Research Project MCB BANK LIMITED CONSUMER BANKING Project report submitted in partial fulfillment of the requirements for the degree of MASTER OF BUSSINESS ADMINISTRATION (EXECUTIVE) By ADEEL ARSHAD L1F04MBEX0011 USMAN MAILK L1F05MBEX1061 The Project report of Mr.