Full Report Rec | Islamic Banking And Finance | Transaction Account

Chapter - 1 INTRODUCTION OF STUDY

1.1 BACKGROUND OF THE STUDY

Internship training program during Masters in Business administration Program is necessary for the partial fulfillment of the completion of Degree of Masters in Business Administration as per HEC (Higher Education Commission) requirement. It is necessary for me to complete an internship session of about 8 weeks in some manufacturing or service industry relevant to my area of interest and specialization. So, I choose the Banking field because I have the interest in this sector because my study background is related with this sector.

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PURPOSE OF THE STUDY

Internship is the corner stone experience that provides me with handson, real-world experience in a work setting. Ideally, internship will enable internees to: • • • • Use my knowledge and skills get from the classroom, Discover where further competence is needed, Convert the bookish knowledge into practical life Become better acquainted with the types of work settings in which such Competence can be applied.

1.3

SCOPE OF THE STUDY

This study will facilitate to me 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

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Alfalah and many others, Students should study about the functioning of such Banks. It will help for me in future.

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• •

METHODOLOGY
Primary Data Secondary Data

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

(A) Primary Data • • Observation of functions of Branch operations on the spot. Observation of different processes of Branch on the spot.

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

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1.5

SCHEME OF THE REPORT

Chapter 1 This chapter encompasses the background of the study. It also looks into the purpose, scope, limitation, objectives, methodology and scheme of the study. Chapter 2 It gives over all view of the Bank. In this I have discussed comprehensively the history of Banking as well as historical background of MCB, its present operations, mission as well. Some light has also been shed on management and organizational structure of MCB. Chapter 3 This chapter contains SWOT analysis, critical analysis and financial analysis of MCB. Chapter 4 It summarizes the conclusions and recommendations based on the analysis. Chapter 5 This chapter includes the implementation plan.

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VII of 1913 as a limited company. under the Indian Companies Act. 2.2 Privatization A wave of economic reforms swept Pakistan in the lattes introducing the Need for privatization of state owned banks and companies. the Government of Pakistan nationalized MCB following the Banks (Nationalization) Act 1974. 2. It was incorporated by the Adam jee Group on July 9. the bank moved to Dhaka (then the capital of former East Pakistan) from where it commenced business in August 1948.2 REVIEW OF MCB 2. the bank transferred its registered office to Karachi. 1947.1 HISTORICAL BACKGROUND MCB Bank Limited formerly known as Muslim Commercial Bank Limited MCB Bank is not an overnight success story.1. Where the head office is presently located. the bank inherits a 59 years legacy of trust of its customers and the citizens of Pakistan.1.Chapter .1 Nationalization In January 1974. Thus. In 1956. MCB was the only bank which was nationalized solely as neither it nor any other bank being merged with it due to its consistent and firm policies and its sound position. The bank was established with a view to provide banking facilities to the business community of the South Asia After the partition of the Indo-Pak subcontinent. This 4 .

dignity and importance. Mansha’s contribution.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. one of the most prestigious civil awards of the country.cement and insurance. MCB now focuses on three core businesses namely Corporate. MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation 5 . the Government of Pakistan has conferred him with "Sitara-e-Imtiaz". Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played instrumental role in its success. The group has strong presence in the most important business sectors of the country such as banking. In recognition of Mr. The driving force behind its commitment and services is its focus on customers ensuring that it not only meets. and every time. textile.2 ABOUT MCB (1) Over the years MCB has developed strong relationships with its customers by understanding their needs and treating them with respect. Nishat Group is one of the leading and most diversified business groups in Pakistan. first time. from cash to the convenience of plastic. They strive to achieve excellence by ensuring that every moment of their time is spent in adding value. With the quest of quality MCB has always taken initiatives bringing banking into a new arena. Commercial and Consumer Banking. Corporate clientele includes public sector companies as well as large local and multi national concerns. making sure that they do things right. MCB is also catering to the growing middle class by providing new asset and liability products. from branch banking to internet banking and from face to face customer interaction to online accessibility. 2. but also exceeds their expectation.

The different operational departments are: • • • • • • • • Consumer Banking & IT Division Financial & Inter Branch Division Banking Operations Divisions HRD & Legal Division Financial Control & Audit Division Credit Management Division Commercial Banking Division Corporate Banking Division 6 . the Bank has concentrated on growth through improving service quality.3 ORGANIZATIONAL STRUCTURE As MCB is a banking company listed in stock exchange therefore it follows all the legalities. Mian Mohammed Mansha also heads this team. investment in technology and people.of over 63 years in Pakistan. MR. the largest ATM network in Pakistan over 450 ATM locations in the market. the Bank provides 24 hour banking convenience with a network of over 1000 branches. utilizing its extensive branch network. 2. MR. which are imposed by concerned statutes. A team of 10 professionals is handling operational management of the bank. During the last fifteen years. Mian Mohammed Mansha is chairman & chief executive of the company with a team of 10 directors and 1 vice chairman to help in the business control and strategy making for the company. developing a large and stable deposit base.

7 . We create an environment where each individual is enabled to succeed.”(2) Mission Statement “We are a team of committed professionals.”(3) • • • • Providing innovative Efficient financial solutions Long-term relationships with our customers Shareholders invest with confidence 2. We deliver on our responsibilities and commitments to our customers as well as our colleagues. We value the equality of gender and diversity of experience and education that our employees bring with them. Respect We respect our customer’s values. In doing so.2. providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. We believe in being the best at always doing the right thing. partnering with our customers for a more prosperous and secure future. culture and history. beliefs.4.4 VISION & MISSION Vision Statement “To be the leading financial services provider. we ensure that our shareholders can invest with confidence in us.1 Values of MCB (4) Integrity We are the trustees of public funds and serve our community with integrity.

result oriented organization where merit is the only criterion for reward. Customer Centricity Our customers are at the heart of everything we do. Innovation We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. We thrive on the challenge of understanding their needs and aspirations.Excellence We take personal responsibility for our role as leaders in the pursuit of excellence. We make every effort to exceed customer expectations through superior services and solutions. • • Best Bank in Pakistan Award 2005 Best Bank in Pakistan Award 2004 8 .Best Bank in Pakistan Award 2006 MCB has yet again received the esteemed Euromoney Award for the “Best Bank in Pakistan”. It is the only bank to receive the Euromoney Award for Excellence for the sixth time in the past seven years. Our teams work together for the smooth and efficient implementation of ideas and initiatives. both realized and unrealized.2 Awards and Achievement (5) Euro money Awards Best Bank in Asia Award 2008 MCB has been awarded as a Euromoney Award 2008 for the “Best Bank in Asia". We are a performance driven.4. 2.

It appoints the audit teams and all the irregularities pointed out are reported to this division. Asia Money Awards The Best Domestic Commercial Bank Award 2005 MCB Continues to shine as once again Asia Money declares MCB as "The Best Domestic Commercial Bank in Pakistan" for the year 2005. It has the responsibility to manage all the affairs related to agriculture sector.5.2 Audit Division Audit Division is responsible for the inspection of financial affairs.5 DIVISIONS OF MCB (6) 2.• • Best Bank in Pakistan Award 2003 Best Bank in Pakistan Award 2001 Best Domestic Bank Award 2000 MCB was awarded as a Euromoney Award 2000 for the “Best Domestic Bank in Pakistan. 9 . They are delegated enough authority from the Board of Directors so that it works without pressure. The Best Domestic Commercial Bank Award 2004 MCB has a distinction of winning the Asia Money 2004 award for being "The Best Domestic Commercial Bank in Pakistan". This division works for the development of agriculture in the country. It also keeps a check over the irregularities in different branches. 2. 2.1 Agriculture Division Agriculture division deals with the loans and development of agriculture sector.5.

which are designed as corporate branches.7 Finance and Treasury Division It manages all the assets of MCB. Changes in the existing schemes in favor of the bank and customer are also the responsibility of this division.5. It also directly controls all those branches.5 Corporate Affairs Division Corporate affairs division deals with the affairs related to public limited companies.O). Its main concern is to develop the business of the bank related to the introduction of new products.5.3 Business Development and Marketing Division This division works under the Head Office (H. This division also carries out marketing activities about the loan.5. 2.4 Central Accounts Division Central Accounts Division takes care of the accounts of branches and records all inter branch transactions and transaction of branches with HO. It includes financing of large and specialized corporations projects. 2. It deals with all credit proposals submitted by advances department of different branches and designs their limit of loans.5. The most important 10 . Calculation of profit on the account of branches maintained with HO is also the responsibility of this division.2. Management of income tax and central excise duty is the function of this division.6 Credit Management Division This division has the duty to make and alter the credit rules and regulations in accordance with the prudential rules and regulations formed by SBP. 2.5. In short it manages the corporate financing. 2.

11 information Management Division Information Management provides all the information to the top management. It frames all the rules and regulations regarding foreign exchange and opening of L/C in the light of prudential regulations of SBP.8 Foreign Trades and Exchange Operation Division This division is responsible for managing foreign currency reserves for day-to-day requirements of the bank. It is also concerned with the purchase of vehicles and other accessories for the banks.5.10 Human Resource Development Division This division manages all the methods concerns with the human resources management like selection.9 General Service Division General service section is concerned with construction of building for branches of the bank at various localities. transfer and retirement etc. promotion. 2. 11 . It maintains records of employees and conducts performance appraisal and disciplinary actions. This division monitors the information system of all branches and is playing a very important role in computerization of MCB. It settles all the matters relating to salaries. 2.function is to announce the profit rates on different schemes from time to time. increments.5. 2. and fringe benefits.5. 2. bonuses.5. The supply of stationary and equipment is the responsibility of this division.

It deals with capital market at national and international level and also manages syndicate in case of issuing of shares etc.12 Industrial Credit Division Previously it was a part of credit management division. This department deals with Zakat deduction.5.5.5. 12 . which MCB carries out with banks and financial institution of foreign countries. It also manages the religious matters of hajj and Umrah. 2.5.13 International Division This division deals all the matters relating to branches located in foreign countries. It handles all the cases filed against the bank. Qarz-e-hasana etc.14 Investment Banking Division This division looks after the investment of bank in various schemes introduced by the bank. steps were taken to abolish interest from the bank transaction. 2. It also gives suggestions in framing of new rules and regulations to other division. 2. Zia.2.15 Islamization Division During the era of Late President Gen.5. This division also gives suggestions on the adoption of interest free banking in Pakistan.16 Legal Affairs Division This division deals with the legal affairs of the bank. MCB developed this division. Iqra surcharge. It is concerned with advances to various industrial units. It looks after all the matters. 2.

Vice Presidents (VP`s). MCB is a very large organization with many branches in different areas of the country and different divisions under the Head Office. usually by holding authority at or near the top of the organization structure. So it is managed through broad span of control with decentralization of authority. General Managers (GM`s). MCB policies are very flexible and changes frequently according to the situation. are made by Top Management for control purposes. but it is not true because no bank without its proper organizational structure stand No.2. Normally it is said that MCB has no specific organizational structure. Still many decisions of small importance.4 It defines the various level of management and its span of control. 1 for so many years. The tendency to disperse decision-making authority in an organization structure. So there is a mix of centralized and decentralized authority in this respect. branches. including Senior Executive Vice Presidents (SEVP`s). MCB is running its operations successfully since 1947 and reached to the top of the banking industry. However. It also 13 . (It refers to the number of personnel a manager manages by virtue of his post. Where practical training supports necessary. Regional Managers (RM`s). and Branch Managers are delegated with powers and authorities. and administrative offices all over the country and outside the country.6 ORGANIZATIONAL STRUCTURE It is the graphical representation of authorities and responsibilities. All the Executives. match able with their responsibilities and duties they perform. which are fairly. The tendency to restrict delegation of decision making in an organization structure. institutional training so that the trainee can understand the actual job cooperation.) 5 MCB is a very large and complicated organization having many divisions.

In order to do so. The services provided by MCB Bank are: • Personal Banking i.7. Deposits Rupee Traveler Cheques Remit Express Corporate Banking Investment Banking • 2. iii. 2.7 PRODUCT & SERVICES (7) In order to achieve long-term goals of expansion and penetration in the market. evaluation and development of New products was started which resulted in introduction of various new products which were earlier not introduced by any other Bank in the country.1        Personal Banking Deposits Khushhali Bachat Account Mahana khushalii Account Pak Rupees Saving Account Pak Rupees Current Account Pak Rupees Term Deposit Saving 365 Foreign Currency Saving Accounts 14 . ii. a constant process of market research. which cater to the needs of various segments of the society.provides them opportunity to work in the branch environment facing customers practically and handle them. Introduction of these products was indeed a major source of penetration for the bank and turned out to be a differential factor as compared to other banks. Bank introduced various new products for its customers.

o Minimum deposit of Rs. Demand Draft or Direct Debit to your Saving/Current Account. the account can be opened by people from all walks of life and still avail the facility of daily product profit calculation. The account offers unique and attractive benefits to the Account holders. Pay Order. 50. 2. You can avail a credit facility up to 75% of the total deposit value. Due to the low initial deposit. a Rupee savings account is one of MCB Bank’s most popular products.000. 1. 3.  Mahana Khushali Account MCB Monthly Khushali Scheme provides you with a steady income every month. Pak Rupees Saving Account  MCB’s Pak Rupee Savings Account offers you attractive returns on your Pak Rupee investment. 15 . 4.       Foreign Currency Current Account Foreign Currency Term Deposit Dollar Khushhali Account Rupees Maximize Account Capital Growth Call Deposit Khushali Bachat Account Khushali Bachat Account. Profit will be paid on a monthly basis through Cash. Your deposit to remain fixed for five years. Just purchase a Monthly Khushali Certificate and you will enjoy a steady income of your total deposit every month.

500. o Open a Saving 365 Account with a minimum initial deposit of Rs. 1 year. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines. In addition. 2 years. 4 years and 5 year term deposits. you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. Avail your choice of 1 month. 16 . 3 months. For more information or to open an account at MCB visit one of our 900 branches today. There is no limit on the number of transactions you make in a day plus you can avail finance facility up to 75% of the total deposit. 6 months. you have access to a countrywide ATM network convenient cash accessibility 24 hours a day.  Saving 365 The MCB Saving 365 calculates profits on a daily product basis and gives you the facility of unlimited withdrawals. 3 years.  Pak Rupees Term Deposit Place your investment in a MCB Pak Rupee Term Deposit and receive a higher rate of return.e. access to your funds whenever you want without any notice.000.  Pak Rupees Current Account MCB’s Pak Rupee Current Account offers you the convenience of unlimited withdrawals i. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines. o No restrictions on the number of withdrawals. o Your Profits are calculated on daily product basis payable on a half yearly basis.In addition.

Avail your choice of 1 month.e. o You can invest in any of the four currencies i. access to your funds whenever you want without any notice. Your foreign currency account is Zakat and withholding tax You can avail a credit facility up to 75% of the total deposit UK Pound Sterling. • Foreign Currency Saving Accounts You can invest in any of the four currencies i.  Foreign Currency Term Deposit Place your investment in a MCB Foreign Currency Term Deposit and receive a higher rate of return. Japanese Yen or Deutsche Mark. o Your foreign currency account is exempted from Zakat and withholding tax.e. 3 years. 4 years and 5 year term deposits. US Dollar. MCB’s Foreign Currency Savings Account offers you attractive returns on your Foreign Currency investment.o You can avail a credit facility up to 75% of the total deposit value. UK Pound Sterling. exempted. • Foreign Currency Current Accounts: MCB’s Foreign Currency Current Account offers you the convenience of unlimited withdrawals i. Japanese Yen or Euro. • Dollar Khushhali Account 17 .e. There is no limit on the number of transactions you make in a day. o o o value. 2 years. 6 months. 1 year. 3 months. US Dollar.

The profit rate on capital growth certificate is 4. Locker facility free of cost Capital Growth In this scheme. Free ATM Card to each customer. yearly on interest calculated at the Dollar Savings Rate.00% Minimum Deposit of 10. a Dollar based account was introduced in 1993 at selected MCB Bank branches. o  Your account is not subject to Zakat. MCB Rupees Maximize Account is our latest PLS saving Account specially made to help MCB Foreign Currency Account holder to convert their account into Pak Rupees. businessmen and Corporation the chance to earn a high rate of return The account offers unique and attractive benefits to the account holder: o o o o o • Profits calculated on a daily product basis.000 18 . you can open a Dollar Khushali Account at over 200 branches in Pakistan. It gives individual. o o o o value. 100. Today. No restrictions on number of withdrawals. No restriction on initial deposit. on their deposits in Pak Rupees. You can avail a credit facility up to 75% of the total deposit initial deposit of US Rs. Rupees Maximize Account You can open a Dollar Khushali Account with a minimum Your Profits are paid on daily product basis payable half No prior notice required for withdrawal.The Dollar Khushali Account. deposits are to stay with the bank for five years and every six months the profit is calculated and added into the initial deposit in this way it is a form of compounding.

Semi Government. The Call Deposit receipt is usually issued in the favor of Government.• Call Deposit This is a type of deposit offered by MCB on which no Markup is paid. 19 . as security deposit. and Institution Corporations etc.

5000.2. precautions. secure and profitable. amount back.2. Rs Valid until Used: Validity of Cheques indefinite. MCB Rupee Traveler's Cheques. The product has been extremely popular and is preferred over cash by customers while traveling and in all walks of life. in Pakistan. 20 . • More than 900 MCB Authorized branches are selling and purchasing Cheques all over Pakistan. Rupee Traveler’s Cheques (8) Ideal for Every Deal MCB Bank has been at the forefront of providing it’s customers with new and innovative products and financial instruments that are safe.7. you can get the full Exclusive security features: Due to special printing and safety Denominations: Available in denominations of Rs 1000. Cheques cannot be duplicated. and Rs 10.The safest way to Carry Cash Rupee Traveler’s Cheques Features: • • • • • • • • Easily available: Buy them from any of the designated branches As good as cash: MCB RTCs are safe to carry and can be used Easily encased: At any designated MCB branch Easily refunded: in case of loss or theft.000 and gift cheques of Rs 500. 24-hour Service available at Airport MCB booths Karachi. without any inconvenience especially by Travelers. MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash for traveling and travel related purposes. Lahore & Islamabad.

MCB Remit Express has been specifically designed to meet the needs of the expatriate Pakistani community residing in the Gulf countries. The receiver i. Corporate branches have been established in the three prime cities where teams of obsessive managers have been appointed. cooperative professionals with the requisite expertise to take care of your banking needs.3 Remit Express (9) The fastest way of getting your money across to Pakistan. and Saudi Arabia. Its area offices are located in Karachi. Lahore.E. These 21 .A. Bank Al-Habib. 2. Delivery confirmation to the remitter.8 Corporate Banking (10) MCB has its 20 corporate branches in major cities of all over the Pakistan. Personal delivery to the beneficiary.e.7.• MCB Rupee Traveler's Cheques are also available at the counters of Foreign Banks such as ABN Amro and HSBC and private bank i. and Islamabad. The MCB corporate banking team consists of enthusiastic. 2. Remittance within 24 to 72 hours.e. Your beneficiary will receive the amount even if he/she does not have an MCB account. Remit Express offers low cost remittance from U. Message facilities for both parties. Remit Express Features • • • • • • Easiest and safest way to remit funds. business associates or relatives receive drafts within 72 hours.

The loans are structured on the basis of underline project characteristic and cash flows of the business. iii. pre-shipment and post-shipment etc.1 Working Capital Loans Term Loans Trade Finance Services Cash Management Working Capital Loans The corporate bank offers a number of different working capital financing facilities together with running finance. and providing you with the entire range of products/ services presented by the bank. cash finance.8. 22 . The corporate bank offers an absolute range of banking products/ services that can be generally separated in to the following categories i. bank offers short to medium term finance. 2. purchasing export documents. ii. export refinance. It also enables the bank to offer you a choice of paper based on electronic fund transfer solutions including collection amounts.2 Term Loans For meeting the capital expenditure and short term working capital requirement of customers. providing guarantees and other sport services. acting as a liaison between you and the bank.8. iv. 2.4 Cash Management The network of abut more than 1200 branches in Pakistan enables MCB to collect and disburse payments efficiently with its cash management services. 2.3 Trade Finance Service It include entire range of import export activities including issuing letters of credit.8. 2. cross branch on-line transactions.managers have been delegated with the inclusive responsibility for managing the risk of there allocated portfolios.8.

2.9 Investment Banking MCB investment banking team has emerged as a leading player in banking arena. The team handles advisory, corporate finance, and capital market related transactions. Within these areas the team has developed expertise in: • • • • • • • • Private Placement Debt Equity Underwriting Term Finance Certificates Loans Syndication Arrangement of Non Fund Facilities Merger and Acquisitions Privatization Corporate Advisory

2.10 ONLINE SERVICES (11)
2.10.1 Automated Teller Machine (ATM) MCB introduced automated teller machine in 1995 to provide 24 hours cash facility to its customers. Over the years it got great success and this encouraged the bank to expand its ATM Network. Now in 2003 MCB ATM network is the largest ATM network in Pakistan with over 160 ATM branches in different cities of Pakistan and 158 online branches where ATM cards are issued. MCB placed its ATM in Karachi, Lahore and Islamabad airports to facilitate its customers. MCB has two kinds of ATM cards with different cash with drawl limits. 2.10.2 MCB ATM Regular Card The MCB ATM Regular Card allows withdrawal up to Rs10, 000 per day and a maximum of 3 with drawl per day per card.

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2.10.3 MCB ATM Gold Card The MCB ATM Gold Card allows with drawls up to Rs 25,000 per day and a maximum of 6 with draws per day per card. The card holder has to make at least two transactions to withdraw the full amount of Rs 25,000. 2.10.4 MCB Master Card (The Future of Money) Since the beginning of time, people have tried to find more convenient ways to pay, from gold to paper money and checks. Today, money is moving away from distinct hard currencies and towards universal payment products that transcend national borders, time zones, and, with the Internet, even physical space. “Plastic or virtual’’ money, credit, debit, and electronic cash products, inevitably will displace cash and checks as the money of the future. Master card International has expanded globally in more locations in the world than any other card. The card was introduced by MCB Bank Limited in 1995 and now offers card members over 15 million outlets in 232 countries. • Photo security – the first bank in Pakistan to introduce the enhanced feature of photograph on the card limiting fraud in case of card of card loss. • • • Welcomed at over 3,000 outlets in Pakistan. Provides up-to 45 days Free Credit. Joining and Annual Fees to suit you.

Cash Advance Facilities available in Pakistan and worldwide. With a network of over 1,000 branches and a team of dedicated professionals, MCB is Pakistan’s largest private sector commercial bank.

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2.10.5 MCB ATM Cash Card The wide spread acceptability and frequent use of MCB ATM Cards has prompted the Bank to add more value to the cards which cater to customers evolving cash needs enabling them to go ahead with ease and convenience. This reinforces MCB commitment to provide to its customers safe and secure mode of cash substitute. MCB Cash Card is useful means of cash for MCB customers and non customers like: o o o Advantages MCB Cash Card enables MCB customers/non customers to meet their day to day cash requirements and settlement of their commercial personals cash requirement transactions. a. Secure Travelers Businessmen General Public

MCB Cash Cards are the safest alternative of the cash because the purchaser can rest assure of its security. If MCB ATM Cash Card is lost it would be cancelled immediately and the purchaser would get amount refunded easily subject to completion of refund formalities. b. Ease of Use MCB ATM cash card is the best because unlike other mode of transfer of funds/remittance which are drawn on particular branch can only be cashed at that branch. MCB ATM cash card holder can draw cash from any of MCB ATM all over the country, m-net members ATM and cirrus member ATMs globally. MCB Cash Card is disposable and with a prescribed determined value. When the value of MCB cash card is utilized fully the balance amount is nil the card will be discarded.

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MCB proudly introduces MCB Mobile Banking. 2.11.1 Mobile Banking at a Glance MCB Mobile Banking gives you easy and quick access to your account(s) at a time you find convenient. The convenience of accessing your account balance information and mini statements whenever you want or wherever you may need them with comfort and peace of mind.2 Banking At Your Fingertips With MCB mobile banking you can: • • Check your balance View the last 4 transaction of your MCB account. including all holidays. 2.11 MCB Mobile Banking At the forefront of technological excellence. 2. purchaser of MCB. 24 hour 365 days. MCB Mobile Banking service is available to all MCB ATM cardholders.Features • • • • • MCB Cash Card pin code is confidential and is only known to MCB ATM Cash Card if lost or stolen then the same will be The amount remaining on MCB Cash Card will be refunded to Loss/theft will only be entertained through the original Loss/Theft is to be reported to the issuing branch by the the purchaser. 26 . the purchaser. immediately marked “HOT” on the request of purchaser. It can be changed from MCB ATM Machine. purchaser.11.

• Mini-statements of each of the listed accounts showing recent transaction history for that account(s). as well as to third-party accounts maintaining accounts with MCB.12 Virtual Banking MCB Virtual Internet Banking offers you the convenience to manage and control your banking and finances – when you want to. Scheduling of ‘OneTime’ as well as ‘Recurring’ bill payments. 27 . • Detailed Account Summary of all listed accounts. • Immediate or Scheduled Bills Payment.3 A Free Service MCB Mobile Banking is a free service for MCB account holders who have an ATM card of an SMS message if charged by the service provider. • Scheduling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers. MCB’s Virtual Internet Banking facility is simple and secure. 2. 24 hours a day. And it’s free of cost. 7 days a week and throughout the year. Option for ‘Full’ or setup as beneficiaries.11. where you want to. • Payment of utility bills for registered Utility Companies.2. • Immediate or Scheduled Transfer of Funds between your own accounts. With MCB Virtual Internet Banking you can access any of the banking services. • Statement-by-Period of each of the listed accounts. MCB Virtual Internet Banking offers a wide range of online services which makes your banking accessible anytime and from anywhere. based on the period specified.

accounts with MCB. MCB will be the owner of the asset. • Personal Alerts for reminding of pre-specified events and who maintain 2. transfers. • Payment/Transfer Alerts for reminding. to facilitate them in paying salary to the corporate employees. MCB offer the following products: • • • Al-Makhraj Saving Account Al-Makhraj Ianat Account Al-Makhraj Term Deposit 2.‘Partial’ payment based on the payment conditions specified by a particular Utility Company. in advance.13 ISLAMIC BANKING (12) • Deposit Schemes For customers who are looking for a deposit opportunity where they can purse their funds and reap halal returns on it. analogous to the English term 'leasing’. Under this scheme.13. is based on the ‘Ijarah wa Iqtina’ concept which means the sale of the asset to the lessee after the Ijarah has matured. and the customer (lessee) will be given the asset to use for a certain period of time in return for monthly rental 28 . • Cheque Book Request for any of your listed accounts. prior to the processing of specified payments and occasions.1 Fund Based Facilities Ijarah Products MCB’s Islamic Ijarah. • Bulk Salary Transfer for Corporate Customers. • Bulk Funds Transfer for Corporate Customers.

Mode of Repayment Immediately in cash On mutually agreed future date Spot Murabahah (Import Related Transactions) Deferred Sale Murabahah 2. customer and then sells it to same customer after adding profit.payments. Parties in Murabahah Buyer Bank’s Customer Seller Bank Appointment of customer as agent of the bank (Foreign Agent Transactions) / common broker (for Local Transactions). hence the term ‘Wa Iqtina’.13. The share of the Bank is further divided into a number of units and it is agreed that the client will purchase the bank’s share periodically. MCB will give a separate unilateral undertaking that it will offer to sell the asset to the customer (lessee) at the maturity of the Ijarah agreement at a price that may be equal to the security deposit amount. 2.2 Types of Ijarah o Car Ijarah o Equipment Ijarah Murabahah It is a contract between a buyer and a seller under which the later first purchases the goods at the request of the former i..e.3 Diminishing Musharika Equipment Defination It is a contract through which the bank and its client participate in the joint ownership of a property.13. thus increasing his own share until all the 29 .

2.13. The client will pay rentals for using MCB’s share of equipment.4 Parties in Diminishing Musharakah Bank (In joint partnership with its customer) Partner(Bank’s customer) Common Features Request of customer for starting a new project/expanding business/buying equipment for specific purpose. The bank will have to share all the obligations of being the co-owner. Appropriate collateral / securities can be obtained as per mutual consent Insurance / Takaful will continue to execute 30 . Bank and the client shall jointly contribute funds to purchase the equipment in the pre-agreed ratio.units of the bank are purchased by him so as to make the client the sole owner of the property.

asp http://www.pk/psc/travelers_chq/ Ibid 10.mcb.asp http://www.asp 31 .REFFERENCES 1.mcb.pk/virtual_banking/ 12.mcb. 6.mcb.mcb.mcb.com.com/business/divisions-of-mcb-bank/ http://www. 4.com.pk/mcb/about_mcb. 3. 7.asp http://bizcovering. 5.com.pk/psc/accounts/basic_account.pk/mcb/our_values. http://www. 2. http://www.pk/islamic_banking/introduction.com.com. http://www.com.pk/mcb/awards_accolades.mcb.mcb.asp http://www.pk/mcb/mission_vision. 8. http://www. 9.mcb.pk/psc/corporate/ 11.com.com.com.asp Ibid http://www.

products and services suiting best to their life style.1 Strengths 1. 11. 5. Best and optional policies and attractive compensation packages. 3.3 ANALYSIS 3. which has. Recognition of critical condition and need for Drastic immediate change. Bank’s emphasis on consumer banking by providing them with innovative saving schemes. MCB has a brand name and recognition. MCB instant financing products for customer wanting instant loan facility at MCB branches. 4. 2. 12. towards the accomplishment of banks objectives. First bank to privatize. Easy access to the customers at their residential localities through a large number of branches. Pioneer in introduction of MCB Master Card and RTC. 7. The largest private sector bank in Pakistan with a network of 1040 domestic and 5 foreign branches. for employees. 9. Attention and sensitivity to competition prevailing in the country. 8. MCB has long-term vision. 10.1 SWOT ANALYSIS 3.Chapter . 32 . 13. 6. now become the leader in market with largest on line ATM network in the country. which has really improved their commitment. dedication and hard work. Extension and improvement in services to domestic as well as foreign customer. 24 hours cash access through ATM.1. which plays a very important role in organization’s success. which minimize the degree of riskiness.

3.1. Network 7. Financial weaknesses i. MCB has now started Mobile banking. No training for advances in-charge. 6. Not many advances to agriculture sector and small and medium enterprises. among the employees is found. with small amounts are not given some services and dealing to those with high accounts. The current customers list of MCB is very large and having a large number of deposit. 33 . A sense Insecurity of jobs. with the down sizing. 15. No. No marketing of advances 10. 16. 3. Customers having account.14. Human Resources i.e low morale due to following factors: • • • • • • Under compensation No accountability No development Political interference No database Untapped markets 9. 2. A very small foreign.2 Weaknesses 1. which is definitely a truly innovative product and according to the needs of the customers. 11.e excess operating cost 8. Political pressure from vested interest group selection. who are not aware of using modern technologies/ equipments 5. It is well aware of the Market and adopts strategy according to the competitor’s strategy. Experienced but old staff. 4. Of branches is decreasing because of low profitability.

MCB can open women branches. launching of new products like Mala Maal and Cash Card etc type of product in future 10. They can capture a large portion of the market. tele-bank and Internet banking efficiently.3 Opportunities 1. MCB has also an opportunity to expand its new technological advancement like. Highly specialized and attractive services provided by foreign banks to their customers. Increasing foreign banks in the country.3. 2. Increasing focus/target on different types of customers. if they expand its ATM and branch network to other countries of the as well.1. MCB can expand its 24 hours cash facilities to the far off cities of the growing market demand.1. The formation of new and energetic marketing teams can increase the disbursement of loans and new customers can be searched out. Privatization of other domestic banks has also increased their services. Growing policies of government on business and commerce sector provides MCB and opportunity to efficiently meet with the business people’s requirement of instant cash and financing facilities. 6. Focus on small business. 3. To open overseas branches through out the world like National Bank and HBL or merger with other foreign banks outside Pakistan. 34 . 9. New schemes should be introduced to finance commodity operations. export/ import sector. 3. 4.4 Threats 1. 8. 12. 3. Due to largest ATM network. especially in those areas where women class want to get involved but couldn’t due to environmental restriction. Stronger position to recover bad debts 7. 2. 5. Benefits from incoming expertise and competition. 11.

Concentration risk is involved with the credit department.2. 12. Rising customer’s expectations 9.4. 35 . 7. 10. 3. Inflation rate is high.2 GENERAL ANALYSIS 3. There is a need to improve the customer relationship in all the departments. Slower economic growth rate of the country. 11. There is no special training given to the employees for motivating customers.1 Customer Relationship In the bank the officers come across many customers daily.2. The relationship manager has a very close contact with the customers and this is his duty to give proper guidance to the customers. GNP and GDP rates are low and so the saving are low. 13. Return of deposits is very low.2 Inadequate Training Program As the employee finishes his training he is induced in a specified field since he does not have knowledge about the specific job assigned to him thus he feel difficulty to perform his job. Growing global technological advancement. Where as in MCB I have found that the customer relationship is not up-to the satisfactory level. 5. Strict regulations by the government over credit facilities to the customers as to meet the prudential regulations. Un-consistency in government policies regarding to business and economic sector. 6. Loss of confidence of the customers due to freezing of accounts 8.(1) 3.

2. But in MCB I have seen that there was easy accessibility to account information.3 Shortage of Latest Computers There is a shortage of latest computers.T Road). By motivating people they can create a change in the bank. the management forgets about him for at least six months.2.G. 3.There is a lack of motivation in the employees of all departments. There is also lack of latest software. Few people are working and the workload is very much high on them. 3. It results in the inefficiency of work. which has been creating trouble in the bank.2. There was not enough security as far as the accounts were concerned. Pesh. (MCB.6 Shortage of Staff There is a shortage of staff in the deposit. The employees of the foreign exchange and other departments have the same routine for years after giving a seat to the probationary officer. performing the same duties. The Mall. 3.2.3.4 Poor Job Rotation There is no specific job rotation in MCB.2. which has to be improved. 3. credit and foreign exchange department of the bank. They have been using the same old computers.5 Lack of Security The most important aspect consider in the bank is security. A person can spend years sitting in one department. 36 .7 Lack of Motivation Motivation is the most important aspect in any organization. those are out dated now a day. Anyone can call and can get the information from the bank. which results in slow processing. Officers spend most of the time in the same department.

If hard work and performance of the staff members is not recognized and appreciated. it dis-hearts them resulting in poor efficiency. They most of the time. 3.9 Improper Work Distribution I have noticed it through out my whole internship.2. It is usual practice for the employees to stay beyond the official working hours. Few people have to perform less responsibility with same grade and few have to perform more responsibility. Moreover they even have to come to the bank early to finish the remaining work and also sometime on holiday. The manager specially faces problems in this regard.2.3. 37 .10 Lack of Appreciation Another very important thing that is ignored in different department is appreciation of the employees who work with dedication and efficiency. which was also irritating for me that the work distribution is totally improper here. work till late night at stretch without getting any over time. 3.2.8 High Work Load The workload on the employees of MCB is immense.

3. For example creditors and credit reporting agencies are interested in finding out the credit worthiness of the firm to which they have extended credit or intend to extend credit. Ratio Analysis Index and common size analyses are used to measure a firm’s performance over time in relation to itself. These statements are the means to assist various parties in decision making who are interested in the activities of the business. These statements are means to an end of helping stakeholders in decision making to improve the quality of decision making proper analysis of these statements helps a lot. Government agencies analyze financial data for tax purposes.3 FINANCIAL ANALYSIS Financial statements are the principal means of reporting the financial condition and results of operations of a business entity. Financial statement analysis helps in determining the financial conditions at any particular point in time and effectiveness of operations of a firm during a specific period. The internal users of financial statement like management also analyze financial data for planning and control. 38 . But the focus of interest of all is not the same. Short term creditors are interested in the short term liquidity of the business and long term creditors are interested in the long run cash flow which the firm can generate over the long period of time. The financial data of MCB is analyzed in the two following ways: 1. Such analysis is called time series analysis. Investors are interested in the firm’s ability to sustain profitability over a period of time. The various stakeholders of business are all interested in the analysis of financial statements. 2. Time Series Analysis.

3. However.1 Common size analysis Common size analysis is an analysis of financial statements where total assets divide all balance sheet items and all income statement items are divided by net sales or revenues. 39 .3. growth or decline in various items of balance sheet and income statement cannot be detected from the common size percentage only changes in the data relative to a total for a particular date or period can be determined. A statement item that has increased in rupee amount will show a decrease percentage if the total has increased at a greater rate than the individual item or vice versa. Common size statements can be extremely helpful to highlight changes over time in the financial performance and financial condition of a company.

02 21081.769 23734.484 0.64 Inappropriate profit 5130.828 69481.52 LIABILITIES Bills payable 10479.674 27377.359 8182.50 301263.890 1598.83 Deposits and other accounts 292098.296 298780.16 11031.40 Operating fixed assets 16024. (2009) Annual Report 40 .484 4265.52 Lending to institutions 1051.454 191.88 banks Balance with other Banks 3807.24 7089.26 Advances 218960.44 0.68 23943.780 8536.07 Sub-ordinate loan 479.37 342108.487 180322.52 Shareholders equity 55119.0 Surplus on revaluation of assets 9705.32 198239.940 4990.49 Total current liabilities 354185.23 Liabilities against assets subject to 0.97 35657.48 257461.549 1466.98 6577.52 Source: MCB.37 Investment 113089.00 8192.28 24662.00 finance lease Other liabilities 11722.00 Total Assets 410485.75 Total 45414.64 40844.93 5463.68 Deferred tax liabilities-net 1180.045 9998.0 5423.00 275046.780 2009 ASSETS (Rs in million) Cash and balance with treasury 39683.68 Total Liabilities& O’E 410485.84 1597.12 Deferred tax assets 0.Table 1: Common Size Balance Sheet 2008 32465.60 Other Assets-net 17868.00 11171.16 Total liabilities 355365.967 298780.24 2007 23665.31 342108.327 9054.502 229341.80 63486.84 NET ASSETS REPRESENTED BY: Share capital 6282.76 Total current Assets 394461.16 172.260 18311.43 5530.06 Borrowings 39406.753 5471.00 301263.71 9054.080 0.697 290406.338 275046.77 Reserves 34000.0 5187.93 0.45 332881.

INCOME STATEMENT PERFORMANCE Table no. 2 Mark-up/return/interest earned Mark-up/return/interest expensed Net mark-up/ interest income 2009 31787 7866 23921 2008 25778 4525 21253 121 1015 47 1183 20090 2311 812 692 606 571 4991 25061 6483 11 67 6561 18501 5701 593 63 6358 12142 4990 2007 17756 2781 14975 -98 1242 1 1144 13830 2449 480 531 866 2 1425 5754 19584 6459 -73 179 6566 13018 4611 -150 -365 4096 8922 502 Provision for diminution in the 105 value of invest Provision against loan and 2960 advances Bad debts written off directly 0 3065 Net mark-up/interest income after 20856 provision Non-mark-up / interest income: Fee. commission & brokerage 2635 income Dividend income 632 Income from dealing in foreign 693 currencies Gain on sale of securities-net 1501 Unrealized loss on revaluation of investment Classified as held for trading -13 Other income-net 563 Total non-mark-up/interest 6011 income 26867 Non-mark-up / interest expenses: Administrative expenses 5022 (reversal) other provision-net -4 Other charges 541 Total non-markup / interest 5559 expenses Extra ordinary / unusual item Profit before taxation 21308 Taxation-current year 6442 -prior years -1294 -deferred 895 6042 Profit after taxation 15266 Unappropriate profit brought 5531 41 .

net of tax 5543 Profit available for appropriation 20808 Basic & dilute earning per 24. Ratios only suggest the questions that need to be answered and provide no answers. three cautions are in order: a. will increase its efficiency. A single ratio does not generally provide sufficient information to judge the overall performance of the firm. which if corrected. 42 .3. should ensure that predetermined uniform standards are used for this purpose. Another very popular method of ratio analysis is to compare the firm’s financial ratios to industry average or similar form in industry or to our own past performance. (2009) Annual Report 3.3 share-after tax Source: MCB. Before discussion financial ratios. a reasonable judgment concerning the firm’s overall financial state can be made. when comparing financial statement. An analyst. It must be ensured that the data used in calculating financial ratios have been developed in the same manner and are sound and reliable. the financial ratios of the firm are compared to that of its competitors. This comparison allows the firm to detect major operating differences. In ratio analysis.33 84 586 9509 17. There is no doubt that financial ratios are a useful guide for managerial decision-making but these are not exact and definite.43 A ratio is a quantitative relation between two magnitudes of the same kind.forward Transfer from surplus on 12 revaluation of fixed assets. Only when a group of ratios is used. c.2 Ratio Analysis 32 5022 17165 19. b.

When ratio analysts are to compare the internal performance of the organization in relation to time. Financial Ratio “A financial ratio is an index that relates two accounting numbers and is obtained by dividing one number by the other”. these ratios are as: Financial Ratios of MCB CURRENT RATIO Current Assets Current Liabilities 43 . comparison with the other competitors in the same industry can only be carried out with the help of financial ratios. The number of financial ratios the might be created is virtually limitless. But there are certain basic ratios the are frequently used.Let us now calculate some of the key financial ratios of MCB for the years 2007-2008 and try to answer the questions that these ratios suggest. One may ponder that why there is a need to mingle with these ratios and not take the actual figures straightforwardly. Along with it. only ratios are the viable option for them. Among various reasons one cogent reason can be put forward that ratios help in comparison. These ratios are calculated from the “Balance Sheet” and “Profit and Loss Account” of MCB Bank.

Its shows the firm’s ability to meet its short term obligations. (2009) Annual Report 44 . The higher the ratio. 2008.08 1.11 Graph no. 2009 2007 Current assets Current liabilities Current ratio 290406 275046 1.10 1.06 1.04 1.02 2007 1.06 2008 332882 301264 1. the greater is the company’s ability to meet its short term obligation as the come due. Table No.11 Ratio 2008 Years 2009 Source: MCB.3 Current Ratios For 2007.106 1.1 1.10 Ratio 1.12 1.10 2009 394461 354186 1. Current ratio is calculated by dividing current assets by current liabilities.

45 .

4 Assets turn over ratio for.81 46 .86 410486 0. ASSETS TURNOVER RATIO Net sale (advances + investment) Total Assets This shows revenues generated per rupee investment in total assets. In the year 2007 it was 1. this rise in the current ratio of MCB shows the defensive approach of MCB towards working capital.48 342108 0.84 2008 261725. 2008. and 2009 2007 Sales Total assets ATR 249804. This ratio is calculated by dividing net sales (advances and investment) by total assets.INTERPRETATION Current Ratio of MCB for the last three years shows an increasing trend. Table No. This surely improves profitability as the percentage of current assets.10 to 1. 2007.06 and thenit increased to 1. But in the year 2009 it was just increased from 1.11.10 in the year 2008 mainly due to an increase in current assets of the bank.24 298781 0.77 2009 332049.

20 0 0.0 0. but in 2009 again the ratio increased to 0.40 0. so we can interpret that MCB is effectively utilizes its resources.77. (2009) Annual Report INTERPRETATION This shows revenue generated per rupee investment in total assets. This ratio is decreased in 2008 as compared to 2007 which is 0.2 1.80 Ratio 0. DEBT TO EQUITY RATIO Total Debt Shareholder Equity 47 .84 and in 2008 it comes to 0.77 0.81 Ratio 2007 2008 Years 2009 Source: MCB.Graph no.84 0.81.60 0.

48 .The Ratio shows extend to which the firm is financed by debt.

38 2009 355366 55120 6.38 6.59 2008 301264 40844 7.59 7.45 Graph no.45 Ratio 2007 2008 Years 2009 Source: MCB.Table No.5 Debt to Equity Ratio for 2007. 3 14 12 10 Ratio 8 6 4 0 11. (2009) Annual Report INTERPRETATION 49 . 2008 and 2009 2007 Total debt Shareholder equity Debt Ratio 275046 23734 11.

MCB‘s upward trend of Debt to Equity ration shows that the bank is not relying in debt financing. The ratio of 2009 as compared to 2007 has increased. 50 .

4 275046 298781 0.6 Debt to total Asset Ratio for the year 2007. 2008 and 2009. The ratio is derived by dividing a firm’s total debt by its total assets.DEBT TO TOTAL ASSET RATIO Total Debt Total Assets Debt ratio shows the fraction of the company’s assets that is financed by debt.92 2008 301264 342108 0.88 2009 355366 410486 0. Table No. 2007 Total debt Total assets Debt Ratio Graph no.87 51 .

1.4 0.2 1. So we 52 .2 0.92 0.88 0.87 Ratio 2007 2008 2009 Source: MCB. (2009) Annual Report INTERPRETATION This ratio highlights the relative importance of debt financing to the firm by showing the percentage of the firm’s assets that is supported by debt financing.8 0. the higher the debt-to-total assets ratio. the greater the financial risk.0 0. the lower this ratio the lower the financial risk.6 0. (2009) Source: MCB. Here in our case of MCB this ratio is decreasing from last three years.

71 53 . and 2009 2007 EBIT Interest expense Interest earned ratio 13018 2781 4.can interpret that MCB is taking continuous steps to lower its debt financing and thus lower its risks. 2008.09 2009 21308 7866 2.7 Coverage Ratios for 2007.68 2008 18501 4525 4. INTEREST EARNED RATIO Earning before interest & Taxes Interest Expense This ratio shows that number of time a company can cover or meet its financial charges or obligation. Table No.

71 times the interest expense. In general the higher the ratio. GROSS PROFIT MARGIN RATIO 54 .09 2. the ratio is 2. 5 5 4 3 2 4. In the year 2009.68 4. the greater the likelihood that the company cour its interest payment without difficulty. (2009) Annual Report INTERPRETATION The interest coverage ratio of MCB serves as one measure of the firm’s ability to meet interest payments and thus avoid bankruptcy. The interest coverage ratio of MCB has shown a decrease over the period of three years.71 Ratio 1 0 2007 2008 Years 2009 Source: MCB.71 which show that the income in 2009 cover only 2.Graph no.

Gross Profit Net Revenue X 100 This ratio tells that the profit of the firm relatively to sales. 8 Gross Margin Ratio For 2007. 6 2007 14975 17756 84.00% 84.44% 2009 23921 31787 75.34% 2008 21253 25778 82. Table No.00% 80.34% 82. (2009) Annual Report 55 . after we deduct the cost of producing the goods.00% Ratio 60.44% 75.00% 20.00% 40.25% 100.25% Ratio 2007 2008 Years 2009 Source: MCB. 2008 And 2009 Gross profit Revenue Gross profit margin Graph no.

56 .

48 5. NET PROFIT MARGIN RATIO Net Profit after Taxes Net sale It is measure of the firm profitability of sale after taking account of all expense and income taxes. The reason for this decreasing trend is that the gross profit of the bank is decreasing and this decreasing in gross profits is due to the remarkable increase in mark up interest.60% X 100 57 .INTERPRETATION It is obvious from the figures of Gross profit margin that the Trent is constantly decreasing for the last three years.9 Net Profit Margin For 2007. 2008 And 2009 2007 Net profit after tax Sales Net profit margin 8922 249804. The reason for this increase in mark up expenses may be the management inefficiency in controlling these expenses.57% 2008 12142 261725.60% 2009 15266 332049.86 4. Table No.24 3.

57% but in the year 2008 it was increased to 5. 7 6. general administration or selling expenses has shown a slight decrease.60% Ratio 2. (2009) Annual Report INTERPRETATION Net profit margin of MCB has shown a fluctuating trend in the year 2007 it was 3. This means that through the selling price has increased the other expenses of the bank like operating.00% 5.57% 4.00% 3.00% 2007 2008 Years 2009 Source: MCB.60% and again slightly dropped to 4.Graph no. RETURN ON INVESTMENT RATIO Net Profit after Taxes Total Assets X 100 58 .00% Ratio 4.00% 5.00% 1.60 in the year 2009.60% 3.

59 .This ratio measures the profitability per rupee of investment in assets.

72% Ratio 2009 Source: MCB.00 % 3.72% 3.Table No.55% 5.00% 2008 12142 342108 3. (2009) Annual Report INTERPRETATION 60 .8 8922 298781 3.00% 2007 2008 Years 3.00% Ratio 3.00% 4.00% 2.00% 0.10 Return on Investment Ratio for 2007. and 2009 2007 Net profit after tax Total assets ROI Graph no. 2008.55% 2009 15266 410485 3.00% 1.

55% in 2008 and then slightly increased to 3.MCB’s ROI has shown improvement over the last three years.0% and increase to 3. This is due to the increase in net profit margin of MCB. In 2007 the ROI is 3. 61 .72%.

00% 0.00% 80. (2009) 37.29 37.72% 100. Table No.RETURN ON EQUITY RATIO Net Profit Total Equity X 100 This ratio shows that residual profit as a proportion of the bank value of common shareholder equity.60% 2008 12142 40844. 11 Return On Equity For 2007. 2008.31 29.00% 40.00% Ratio 60.60% 29. And 2009 2007 Net profit after tax Shareholder equity ROE Graph no.73% 27.00% 2007 2008 Years Source: MCB.00% 20.68 27.9 8922 23734.73% 2009 15266 55119.72% Ratio 2009 62 .

this decrease in ROE is due to unimprovement in Net Profit Margin. In the year 2007 the ROI is 37.6% but decrease in the year2008 and also in 2009 it comes to 27.72%.Source: MCB. (2009) Annual Report INTERPRETATION The ROE of MCB has shown a decrease trend. 63 .

F. 3.13 64 .M. (1999). S. New York. Bettner. Accounting. http://bizcovering. the basis for business decisions. P. Irwin McGraw-Hill.com/business/swot-analysis/ 2.S. Williams.REFERENCES 1.F Haka and M. Robert. MCB Manual on General Banking.

I have been able to learn and experience many new things related to the banking sector and the banks workings. was quite low. I am able to handle the public with respect to many different workings on many different instances and also in account opening for customers and can handle many other tasks as well. It also shows their loyalty and commitment to the organization. MCB seems to not focusing on this highly critical issue as the job satisfaction level of the employees working at MCB. This branch of MCB relatively small and has climbed its way up very quickly and all that only because of the employee’s efforts and consideration for each other. Even though the people have been sacrificed in the new organizational developments. 65 .1 CONCLUSIONS With Cooperation of all branch members. Understanding and the effective management of the human resources is the most difficult challenge faced not only by the bank but by all the organizations. Finally I concluded that MCB is a good organization for a person for his long term career workings.4 CONCLUSIONS & RECOMMENDATIONS 4. it is becoming clear that the true lasting competitive advantage comes through human resources and how they are managed. Overall working and environment of the bank is very comfortable and the staff is very helpful and respectful of each other and it still maintains a professional environment. Management of the bank is very strong.Chapter . Employees of MCB Timber Market branch work more than their working hours and all the workings take place in a very friendly atmosphere that does not induce pressure on the person working there.

They should observe a culture of high ethical standards. By having the understanding. through lectures. 66 . play a vital role in the organization. what a customer wants. they will be motivated satisfied and loyal to the organization. even then they should continue their effort for better corporate behavior. The manager should improve attitude towards their subordinates. Although MCB has been improving its corporate behavior.2. based upon development of right attitude. For attitude improvement special courses should be arranged under specialized teachers. Self-dignity is the most valuable thing to every body. The staff is the most valuable asset. MCB should understand that the commitment to satisfy customer’s needs must be fulfilled within a professional and ethical framework.1 Customer Relationship Knowing the customers and their needs is the key to business success. It will cost the bank but will be more profitable for the bank in the long run.2 RECOMMENDATIONS 4. By attitude the manager can improve the relationship with the customers.4. the manager can improve the relationship with the customers.2 Management and Subordinate Relations Employees. if the lower employees are given proper attention and the attitude of the manager towards lower management is good. seminars and other interactive techniques. who are apparently ordinary workers. There is a need of improving customer relations in MCB.2. The human resource manager should focus on multi talent hiring and professional grooming. 4.

Secondly they must improve their own understanding of what customers and subordinates are trying to communicate to them. therefore. by making sure that policies made at the higher level properly reach the lower level and those policies and procedures are properly understood. decisions and other instructions and policies in efficient and effective manner will enhance the over all productivity and image of the organization. the future of MCB lies in the fact that they should remain committed and necessary empowerment should flow regularly to lower levels of hierarchy. 4. they must become better encoders and decoders. Proper training from specialized communication teacher should be given to the managers as well as the lower level employees so that they become good listener as well. so that the performance delivery is made more flexible.2. The downward communications needs to be improved. Decisions should reach as quickly as possible without any delays.2. Delays create hurdles in the functioning of the bank. Flow of information. 67 .3 Top-Bottom Communication The down ward communication is very important because the information flows down the hierarchy from superiors to subordinates. With the empowerment of lower level employees they will feel secure in the organization and they will work with devotion for the betterment of the organization. To improve the communications in the bank the managers should strive to become better communicator and they must accomplish to separate tasks.4 Empowerment of Employees Commitment is a function of empowerment down the line.4. the information they wish to transmit. They must improve their messages.

The conditions of the computers are not satisfactory. 4. The use of new technology can help the employees of computer deptt. they could compete on equal footings with other banks. The employees of the bank should be trained with the basic concepts of the marketing under the guidance of the experts.e to provide training on new specialized program to the employees of computer department. The workload is very high in this deptt: so to decrease the workload a fast version of windows should be introduced. So with the passage of time the employees become up-to date with the latest innovations of the bank. So. The Mall Branch. Another drawback is that there is only one computer at MCB. that. 4.6 Marketing Culture The employees should be given special training for marketing.2.5 Technology Incorporation Latest software should be introduced in all departments so that data processing of computers can be enhanced.2. Moreover the bank should send the employees for specialized courses. Proper action should be taken for marketing so that the increased sale of different products will result in increase of the profit of the bank.4.2.7 Improve Productivity In order to strengthen the operational capabilities of the employees the bank must organize a number of in-house training courses and seminars on different topic relate to advances and other departments. 68 . i. The officers in all deptt: of the bank are still working with the old computers.

69 . Another way to improve this facility is online issuance of ATM cards through direct access on the net. 4.2. The bank should continue to build on its human resource base with the right level of skills and talent to meet the current and future business. It will take less time and customers will receive their cards on time. in different fields.2. If the communication system is improved as earlier discussed. This can be decreased either by hiring more people or by introduction of advance computer technology in the bank. In addition to in-house course the officers and executives of the bank should also send for advance level courses in management and banking. For hiring the standard procedures of the bank should be applied.9 Availability of ATM cards Ensuring the availability of ATM cards is very important. can solve this problem. from reputed institutions.4. Hiring the business graduates. Special emphasis should be laid on the skills and personality development. this problem can be solved out. This will help in enhancing professionalism and employee development. to improve the efficiency and productivity of the organization.8 Proper Distribution of Work Load Load of work on the employees in all the departments of MCB The Mall Branch is very high. 4.3 HUMAN RESOURCE DEVELOPMENT Human resource development is a key priority of the bank. offered by various specialized training institutions such as Lahore University of Management sciences (LUMS) and the institute of Bankers in Pakistan (IBP).

needs more and modern computers to handle the situations. Only on the basis of proper job analysis it can be decided how a right person can be hired. However. which will surely be helpful in their operations. Also. Proper compensation and incentives should be given as it will satisfy their wants and in return the employees will work with dedication. Some of the employees are simple graduates. They should try to improve this area and to diminish the entire book keeping methods.4. Employees on the job must be motivated to perform at an acceptable level. in a branch having one computer.4 PROPER JOB ANALYSIS Right person for the right job is the most important factor for any organization. still they do not have all the branches online.5 PROPER MOTIVATION Motivation is the most important aspect in any organization. They are unable to optimize the efficiency of the bank thus creating problems for both organizations and the employees. Online banking is impossible without the modern IT technology. 4. there is a lot of work to do with it. compensated or promoted. Also employees should be given some extra benefits like bonuses etc to motivate them. Managers themselves must be motivated to do a good job. 4. MPA etc. trained. So the managers in MCB should properly motivate their subordinates. the bank new recruitment policy is based on hiring highly qualified young people like MBA. 70 . the employees being a graduate do not have proper know how about the job.6 ON-LINE BANKING MCB should start online banking through out the country as they are the pioneers in it. along with the trained staff.

4.9 FEMALE BRANCHES OF MCB MCB should seriously consider opening of female branches to solve the problems of those female employees who does not feel good while working with male staff. parties and other important days.8 IMPROVEMENT OF SERVICE QUALITY MCB should try to the service quality and bring it up-to international standards.4. 71 . It should seriously consider about the female staff and also to open some exclusively female branches. They already have its own web site but it have no proper detail about its products and other facilities.10 HEALTHY ACTIVITIES There is lack of healthy and entertainment activities like excursions on weekend. 4. Before opening female branches proper market survey is needed which will help the bank to judge the response of the people about the female banking of MCB. 4. the entire customers should be served at a single counter and there is no need for the customer to move from one to other for a separate work. One-window operations should be introduced so that the customer could wind up his work as quickly as possible. celebration in their tidy life. It means. MCB already have female staff but they are up-to few model branches.7 E-BANKING MCB should try to develop e-banking as well. as it will broaden the scope and the market for the organization. there should be the facility to open online account and other such dealings should be made on-line. Such activities should be encouraged at once in a month. Also there is a need to improve the website and to improve the facilities on it. For example.

Following are different strategies.Chapter . cultural. and capabilities of the various available element of bank. utilizing the power elements in varying combinations. Instead of down sizing. spiritual. which MCB can follow: • Stability Strategy This type of strategy is used when organization is in stable condition/ position or reaches its maturity period. moral. taking into account the opposition that may be met as the strategy unfolds. political. Then possible courses of action. right sizing should be adopted so that to inject new blood to the bank which will bring innovations according to the demand of the market. are analyzed to develop the best strategy possible. Options should be developed to provide choices for possible contingencies. Vertical and horizontal integration is done in this stage. size. social. 72 . After banks objectives have been determined all aspects of the problems confronting the bank must be thoroughly examined and accurate evaluation made of the character. Strategy can be formulated only after the objectives to be accomplished have been determined. Strategy involves the use and close integration of economic. and psychological power.5 ACTION PLAN ACTION PLAN Surely if the strategy is correct and then implemented in a right way then there will be no doubt that desired results wouldn’t be achieved by the bank in a particular time.

So. They must try to increase focus on the already existing customer. Implementation In stability strategy. All these innovations and quality services need modern technology and heavy investment in this field. out which most of the branches are not productive/ profitable. There is no need to attract more and more customers. and big organizations. MCB should focus on customer retention. New and innovative products like cash cards must be introduced to facilitate the customer. It will help to develop long run relations with the customers and they will become brand loyal forever. They search for more and more facility at banks. but urgency is needed. If. Retrenchment strategy should be adopted for those branches whose performance is not good for the past few years and still making loss to the bank. as the peoples are getting busy day by day. all the above suggestions are seriously considered. universities. Account opening facility must be provided at the doorstep. MCB must try to provide services at the doorstep. Providing quality services to them can retain the customers.• Retrenchment Strategy As MCB has a very large network of branches. The ATM network must be at each and every market. It will also take some time take action on it. 73 . The attitude of the employees can also attract the customers.

Wachowicz. New Jersey: Printice-hall Inc. Wachowicz. Inc. Bettner. S. F. (1998). M. 10th edition. (2002). 798 3. p. Jr. Van Horne. Lahore: Van Horne.M. J. Ghani. M. Pak-Imperial Book Depot. Williams. Advanced Accounting. Lahore. New York. the basis for business decisions.A. New Jersey. Printice-hall. P. Foundation of Financial Management.139 6. Robert.M. Irwin McGraw-Hill. p. Jr. Ibid 74 .M.REFERENCES: 1.143 4. Pak-Imperial Book Depot. 799 5. P. (2002). (1998). 10th edition.13 2.F Haka and M. J. Foundation of Financial Management.C and J. p. Advanced Accounting. (1999).C and J. Accounting.S. Ghani.A.

Advanced Accounting. Pak-Imperial Book Depot. Jr.mcb.A. New Jersey. 10th edition. F. Advanced Accounting. S. M. Bettner.BIBLIOGRAPHY BOOKS Robert.C and J. Williams. New York.M.F Haka and M. Wachowicz.M. Ghani.S. Accounting. (1999). WEBSITES http://www. M. Management. (1998).com. Lahore: Pak-Imperial Book Depot. (2002).com MAGAZINES/ ANNUAL REPORTS Magazines of MCB Annual reports of MCB MCB Manual on General Banking. Lahore. the basis for business decisions. J. (2002). Van Horne. Printice-hall. Foundation of Financial Inc. 75 .A.pk http://bizcovering. Irwin McGraw-Hill Ghani.

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