Banking Assignment

Shaharyar Naeem

17U00019

Question 1:

Let’s suppose you have visited to branches of MCB bank one in Defence and the other one in
Shadbagh. What difference you have noticed in the operational activities and in working
environment?

There is a big difference between a branch at Shadhbag and a branch in defence. Some might be:

 Finance functions - understand the financial position of the bank branch, how much money does
it have
 Risk functions - what exposure does the bank branch have to different markets, is it stable, is
decisioning effective and secure?
 IT - ATMs, all of the systems which calculate interest, or allow you to take out money on the
other side of the world, etc. all need to be built and maintained

There is also a difference in the environment, employees might be less careful with their job in
Shadbagh than in defense. The working environment might seem more professional in defense rather
than in Shadbagh.

Question 2:

If you are the executive member of any bank and you have to define the loan policy of your respective
bank. What attributes you will introduce in your loan policy?

I would introduce the following attributes in my loan policy:

 Amount of Loan: The loan amount may very-small, medium or large. There might be the
difference between the applied amount and the sanctioned amount on the basis of the quality
and capacity of the borrower and the purpose for which applied.
 Ultimate Decision: Banks’ decision is final in the case of loan application. That is bank can fully
sanction, partially sanction or may totally reject the loan application after considering the
goodwill of the clients, its own fund and other issues related with creditworthiness.
 Mode of Loan: Generally, loans are given in cash. But in exceptional cases, the same may be
provided in kind, such as raw materials, machinery, and other inputs etc.
 Security: Generally, loans are provided against collateral. But the sometimes-small amount of
loans can be sanctioned on the basis of personal guarantee.
 Loan Price: Banks never sanction loan without interest. But interest rate can vary on the basis of
types of loan or track records of the clients.
 Periodicity’ of Bank Loan: Depending on types of the loan, goodwill of the clients and purpose,
the periodicity of the loans can vary. The loan may be sanctioned for immediate use, short-term,
and mid-term or long-term basis.
 Repayment of Loan: Loans are repaid on an installment basis or it may be a one-shot
arrangement. In preparing the loan repayment schedule, banks generally, focus on the possible
cash flow stream of the clients’ projects. At a glance, these are the characteristics of bank loans
generally that are seen in case of every’ commercial bank