The term 'bank' is being used for a long time, yet it has no precise definition. There are various viewpoints about the origin of the word µBank¶. One point of view is that it is derived from the word µBanc us¶ which means a bench. The other viewpoint is that it has originated from the German word µbank¶ which is called ban co in Italian language. It is a German word and means a joint stock fund. ³Bank is a pipeline through which currency moves into and out of circulation.´

According to Crowther:
"Bank is a dealer in debts²his own and of other people."

According to G.W. Gilbert:
"A banker is a dealer in capital or more properly a dealer in money. He is an intermediate party between the borrower and the lender. He borrows from one party and lends to another."

According To Banking Companies Ordinance 1962:
U/S 3 (B) of Banking Companies Ordinance 1962 "Banker means person transacting the business of accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheque, draft, order or otherwise and includes any Post Office Savings Bank." In proper words we can define; ³An organization, usually a corporation, chartered by a state or federal Government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects cheques, drafts, and notes; certifies depositor's checks; and issues drafts and cashier's checks.´ So from above definition we can assess that the main activity or function of banking is borrowing and lending of money with a margin of gain. However, as far as the present day banking is concerned, there are a number of different banks, set up under specific different objectives, performing various functions. Banking is one of the most sensitive businesses all over the world. banks play very big role in the economy of country. Banks are guardian to the assets. The banking sector plays a noteworthy role in modern world.





Word Bank is said to be derived from the words Banc us or Banque or Bank. The history of banking is traced to as early as 2000 BC. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths. They used to keep strong safes for storing the money and valuables of the people. The persons who had surplus money found it safe and convenient to deposit their valuables with them. The ³FIRST STAGE´ in the development of modern banking, thus, was the accepting of deposits of cash from those persons who had surplus money with them. The goldsmiths used to issue receipts for the money deposited with them. These receipts began to pass from hand to hand in settlement of transactions because people had confidence in the integrity and solvency of goldsmiths. When it was found that these receipts were drawn in such a way that it entitles any holder to claim the specified amount of money from goldsmiths, depositor who is to make the payments may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank notes. The ³SECOND STAGE´ in development of banking thus was the issue of bank notes. The goldsmiths soon discovered that all the people who had deposited money with them did not come to withdraw their funds in cash. They found that only a few persons presented the receipt for encashment during a given period of time. They also found that most of the money deposited with was lying idle. At the same time, they found that they were being constantly requested for loan on good security. They thought it profitable to lend at least some of the money deposited with them too the needy persons. This proved quite a profitable business for the goldsmiths. They instead of charging interest from the depositors began to give them interest on the money deposited with them. This was the ³THIRD STAGE¶ in the development of banking. By experience the banks came to know that they could keep a small proportion of the total deposits for meeting the demands of customers for cash and the rest they could easily lend. They allowed the depositors to draw over and above the money actually standing to their credit. In Economics terminology we can say that they allowed the overdraft facilities to their depositors. This was the ³FOURTH STAGE´, in development of banking. When every bank issues receipts and most of them allowed the overdraft facilities, there was then too much confusion in the banking system. The banks in order to earn profits could not keep adequate reserves for meeting the demands of the customers for cash. The failures on the part of the bankers to return money caused widespread distress among the peoples. In order to create confidence among the people, steps were taken to regulate the banking organization. A conference was held in Nuremberg in 1548. It was decided that a bank should be set up by the state, which should streamline the banking organization and technique. The first

4 . can be called a financial intermediary that operates for profit motive. Bank of England was established in 1694. The difference between the term on which it borrows and that on which it lends forms the source of the bank¶s profit. It is an intermediate party between the borrower and the lender. CLASSIFICATION OF BANKS The banks are classified into various types on the basis of their spheres of activities. ownership.A PROJECT REPORT ON MCB BANK LIMITED central bank was formed in Geneva in 1578. The main types of banks are:  Classification on the basis of functions  Classification on the basis of ownership CLASSIFICATION ON THE BASIS OF FUNCTIONS          Central Bank Commercial Banks Exchange Banks Saving Banks Agricultural Banks Industrial Banks Investment Bank Mortgage Bank Schedule and Non Schedule Bank CLASSIFICATION ON THE BASIS OF OWNERSHIP  Public sector banks  Private sector banks  Cooperative banks CLASSIFICATION ON THE BASIS OF DOMICILE  Domestic Banks  Foreign Banks COMMERCIAL BANK A bank or banker is a dealer in credit or more properly a dealer in money. It borrows from one party and lends to another. The responsibility of issuing of notes is now entrusted to a central bank of each country. The bank therefore. domicile etc.

A PROJECT REPORT ON MCB BANK LIMITED FUNCTIONS OF COMMERCIAL BANK The functions of commercial banks are classified as: Functions Primary or Basic Functions Accepting Deposits Making Loans & Advances Secondary or Subsidiary Functions Agency Functions & Services Utility Functions Fixed or time deposits Purchasing and discounting of bills Collection of checks. payment of Orders. bills. interest etc Execution of standing Orders. payment of Purchase and sale of securities Foreign exchange business Saving deposits Drafts Act as referee Current deposits Cash credits Issuance of travelers checks - Loans Transfer of funds Supply of trade information - - Acting as trustee Export promotion 5 .

Pakistan has recorded an annual average growth of 3% in GDP with the commodity producing sectors achieving an annual average growth of 1. and 6 . Due to lack of resources and communication network most of the banks were closed and a number of braches were reduced to 195 in June 1948. Those banks. exchange control etc. were considering the winding up of their business. 75 crore. The banks having their registered offices in Pakistan were transferred to India. It was very difficult for Pakistan to establish its own banking system immediately after independence without resources.A PROJECT REPORT ON MCB BANK LIMITED EVOLUTION OF BANKING STRUCTURE IN PAKISTAN At the time of independence there were only 487 branches of banks working in Pakistan. Consequently. ³Today there is more than 7000 branches of commercial banks along with an established network of supplementary financial institutions. To overcome immediate problems like issuance of currency. The Government of Pakistan took over exchange control from reserve bank of India on April 1st On July 1st 1948 the State Bank of Pakistan was founded as a central bank of the country and inaugurated by Quaid-e-Azam. The main reasons of establishment of SBP were:  To overcome problem of public debt management and exchange control. In an effort to bring about collapse of the new state by the persecuting an international policy of withdrawal. The recurring borrowing requirements of the government and the pressure on the budget deficit depicted the inability of the policies to meet the core objective of curtailing inflation. which was lower than the estimated annual growth in population. By 30th June 1948 the number of scheduled banks in Pakistan declined from mere scratch.9% only. At the time there were 19 branches of foreign bank working in Pakistan. The reserve bank of India was allowed to act as a central bank of Pakistan. which stayed.  Indian government had with held share of Pakistan amounting to Rs. which were accompanied by demand pressures emanating mainly from an expansionary fiscal policy that relied increasingly on borrowing from the State Bank of Pakistan and the banking system to finance mainly unproductive government expenditure. Supply bottlenecks reinforced by demand pressures led to a sharp rise in prices which increased by approximately 15% per year in the last three years. All this development in the banking sector is the result of untiring efforts of four decades´ PAKISTAN ECONOMY During the last three years. Following the announcement o the partition plan in June 1947 there was a haste movement on the part of the banks to transfer their funds and accounts across the borders. There were only two Muslim owned banks is sub-continent. The economy of Pakistan was largely dependent on Indian banks. the Indian bank offices closed quickly. supply shortages developed.

In the subsequent sections of the report. In spite of it. the State Bank resorted to tightening of the credit policy for the private sector and increased its policy rate several times putting upward pressure on lending rate of banks. MCB Bank continued to make progress in its operations and achieve sound financial results. It is a tall order of policy reforms but a dire need of the country. a sharp increase in remittances. a review of operations is followed by a detailed analysis of the financial results of the Bank along with narration of on major structural reforms undertaken to strengthen the foundations of the Bank for future growth. With continuous injection of high powered money by government excessive borrowing from the State Bank of Pakistan. higher revenue and elimination of interagency debt through their sale or reforms and thereby limiting domestic and foreign borrowing for budget financing. adverse effects of floods on domestic production. the banking system remained generally insulated from the fall out effects from the world recession and financial crisis. to partly offset the expansionary impact of the fiscal policy. and increasing price pressures the country was able to maintain a healthy level of foreign exchange reserves reflecting a rising trend in exports. thanks to privatization of banks and banking reforms introduced in the country since the nineties. increase domestic saving rate. The difficult economic conditions face by the country has had their adverse affect on the asset portfolio of the banking system and nonperforming loans increased under depressed market conditions. However. In spite of expansionary stance of the fiscal policy. accelerate economic growth and expand access to world markets of high value exports.A PROJECT REPORT ON MCB BANK LIMITED resulted in tiring impact being met through expansionary monetary measures. measures to contain inflation. the tightening of the monetary policy by increasing policy rate had only limited effect on the overall expansion of liquidity with the result that price pressures continued to mount. Notwithstanding the difficult economic situation of the country. and it was able to maintain a healthy trend in profitability. availability of bilateral assistance and disbursements from international financial organizations. Containment of government borrowing from the banking system and improvement of financial health of large public sector corporations is an essential prerequisite for the State Bank of Pakistan to contain monetary expansion within safe limits. reduce price pressures and to ease its policy rate to avoid further chocking off the private sector. which was already being adversely affected by load shedding of electricity and gas combined with an increase in their prices reflecting a rise in their world prices and reduction of subsidies under an agreement with the IMF. The demand for credit from the loss making public sector operations and financing of interagency debt by borrowing from commercial banks added to expansion of liquidity in the economy but credit squeeze for the private sector. The disturbing trends in the economy can only be reversed by major structural reforms undertaken under a well thought out and effectively implemented strategy to put the fiscal house in order including containment of expenditure. particularly the IMF under a Standby arrangement. 7 .

The losses incurred in the transition to independence were taken from Pakistan's share (a total of 230 million). remained basically unchanged until January 1. Under financial sector reforms. In May. the Bank was charged with the duty to "regulate the issue of Bank notes and keeping of reserves with a view to securing monetary stability in Pakistan and generally to operate the currency and credit system of the country to its advantage". the scope of its functions was considerably enlarged. as originally lay down in the State Bank of Pakistan Order 1948. with subsequent amendments. 1974. this autonomy was further strengthened by issuing three Amendment Ordinances (which were approved by the Parliament in May. the State Bank of Pakistan was granted autonomy in February 1994. On 30 December 1948 the British Government's commission distributed the Reserve Bank of India's reserves between Pakistan and India -30 percent (750 M gold) for Pakistan and 70 percent for India. The scope of the Bank¶s operations was considerably widened in the State Bank of Pakistan Act 1956. when the bank was nationalized. The headquarters are located in the financial capital of Pakistan.A PROJECT REPORT ON MCB BANK LIMITED ROLE OF STATE BANK OF PAKISTAN The State Bank of Pakistan (SBP) is the central bank of Pakistan. On 21st January. 1997. 1948 Under the State Bank of Pakistan Order 1948. 8 . 1962 and Banks Nationalization Act. with the Sate Bank having a role in their appointment and removal. State Bank of Pakistan Act. 1974. Islamabad. Karachi with its second headquarters in the capital. While its constitution. Banking Companies Ordinance. The State Bank of Pakistan Act 1956. These were implemented in June 1948. forms the basis of its operations today. The amendments in Banks Nationalization Act abolished the Pakistan Banking Council (an institution established to look after the affairs of NCBs) and institutionalized the process of appointment of the Chief Executives and Boards of the nationalized commercial banks (NCBs) and development finance institutions (DFIs). 1948 Muhammad Ali Jinnah (Founder of Pakistan) took steps to establish the State Bank of Pakistan immediately. 1956. The changes in the State Bank Act gave full and exclusive authority to the State Bank to regulate the banking sector. and the State Bank of Pakistan commenced operation on July 1. Before independence on 14 August 1947. during British colonial regime the Reserve Bank of India was the central bank for both India and Pakistan. to conduct an independent monetary policy and to set limit on government borrowings from the State Bank of Pakistan. which required the Bank to "regulate the monetary and credit system of Pakistan and to foster its growth in the best national interest with a view to securing monetary stability and fuller utilization of the country¶s productive resources". 1997) namely. The amendments also increased the autonomy and accountability of the Chief Executives and the Boards of Directors of banks and DFIs.

management of foreign exchange. State Bank of Pakistan performs both the traditional and developmental functions to achieve macro-economic goals. the maintenance of monetary stability.. the program¶s reliance is mainly on open market operations. as well as the promotion of economic growth. the Bank makes use of both direct and indirect instruments of monetary management. and provision of credit to priority sectors. banker to Government. In terms of the program. thereby leading towards the stability in the domestic prices. Pakistan embarked upon a program of financial sector reforms in the late 1980s. Until recently. etc. and conduct of monetary policy. A number of fundamental changes have since been made in the conduct of monetary management which essentially marked a departure from administrative controls and quantitative restrictions to market-based monetary management. The State Bank also has been playing an active part in the process of islamization of the banking system. The basic objective underlying its functions is two-fold i.the operating target. which are generally performed by central banks almost all over the world. provision of training facilities to bankers. A reserve money management program has been developed. 9 . The traditional functions. The main functions and responsibilities of the State Bank can be broadly categorized as under.A PROJECT REPORT ON MCB BANK LIMITED Like a Central Bank in any developing country. may be classified into two groups: a) The primary functions including issue of notes. REGULATION OF LIQUIDITY Being the Central Bank of the country. the monetary and credit scenario was characterized by acute segmentation of credit markets with all the attendant distortions. institutionalization of savings and investment. and other functions like advising the government on policy matters and maintaining close relationships with international financial institutions. regulation and supervision of the financial system. performed by the State Bank include development of financial framework.e. bankers¶ bank. To regulate the volume and the direction of flow of credit to different uses and sectors. While use in now being made of such indirect instruments of control as cash reserve ratio and liquidity ratio. State Bank of Pakistan has been entrusted with the responsibility to formulate and conduct monetary and credit policy in a manner consistent with the Government¶s targets for growth and inflation and the recommendations of the Monetary and Fiscal Policies Co-ordination Board with respect to macro-economic policy objectives. b) The secondary functions including the agency functions like management of public debt. the intermediate target of M2 would be achieved by observing the desired path of reserve money . lender of the last resort. The non-traditional or promotional functions.

direct banks to refrain from window dressing and prohibit them to extend fresh loan to defaulters of old loans. modarbas and leasing companies. technical sophistication is improving and technical base of banking activities is expanding. a number of non-bank financial institutions (NBFIs) were allowed to increase substantially. besides providing for credit and risk exposure limits. prohibit criminal use of banking channels for the purpose of money laundering and other unlawful activities. prescribe guide lines relating to classification of short-term and long-term loan facilities. on-site inspection is undertaken by the State Bank in the premises of the concerned banks when required. Accordingly. Revised capital requirements. The State Bank has also been charged with the responsibilities of regulating and supervising of such institutions. ensuring adequate transparency of operations. Off-site surveillance is conducted by the State Bank through regular checking of various returns regularly received from the different banks. which is also 10 . Effective December.A PROJECT REPORT ON MCB BANK LIMITED ENSURING THE SOUNDNESS OF FINANCIAL SYSTEM: REGULATION AND SUPERVISION One of the fundamental responsibilities of the State Bank is regulation and supervision of the financial system to ensure its soundness and stability as well as to protect the interests of depositors. The "Prudential Regulations" for banks. The "Rules of Business" for NBFIs became effective since the day NBFIs came under State Bank¶s jurisdiction. and to ensure the viability of institutions providing these services. To deepen and broaden financial markets as also to diversify the sources of credit. As from January. The existing format of balance sheet and profit-and-loss account has been changed to conform to international standards. 1997. lay down rules for the payment of dividends. All this requires the State Bank for endeavoring hard to keep pace with the fast-changing financial landscape of the country. the out dated inspection techniques have been replaced with the new ones to have better inspection and supervision of the financial institutions. the State Bank has issued a comprehensive set of Prudential Regulations (for commercial banks) and Rules of Business (for NBFIs). 1997. On other hand. Moreover. NBFIs Regulation and Supervision Department was set up. The institutional complexity is increasing. has made the supervisory role more difficult and challenging. together with growing complexities of modern banking operations.500 million have been enforced. To regulate and supervise the activities of these institutions. set criteria for management. The banking activities are now being monitored through a system of µoff-site¶ surveillance and µon-site¶ inspection and supervision. a new Department namely. envisaging minimum paid up capital of Rs. in order to safeguard the interest of ultimate users of the financial services. every bank was required to maintain capital and unencumbered general reserves equivalent to 8 per cent of its risk weighted assets. The rapid advancement in information technology.

it was decided to adopt the managed floating exchange rate system w. under which the exchange rate is determined by the demand and supply positions in the foreign exchange market. However. the Bank has been authorized to purchase and sale gold. Pakrupee remained linked to Pound Sterling till September. 22nd July 1998. with a view to reduce the pressure on official reserves and prevent the economy to some extent from adverse implications of sanctions imposed on Pakistan. rather than the State Bank of Pakistan? EXCHANGE RATE MANAGEMENT AND BALANCE OF PAYMENTS One of the major responsibilities of the State Bank is the maintenance of external value of the currency. are being regulated and supervised by the Securities and Exchange Commission (SECP). The Bank is responsible to keep the exchange rate of the rupee at an appropriate level and prevent it from wide fluctuations in order to maintain competitiveness of our exports and maintain stability in the foreign exchange market.A PROJECT REPORT ON MCB BANK LIMITED specialized type of NBFIs. The surrender requirement of foreign exchange receipts on account of exports and services. thereby making the Pak-rupee convertible for current international transactions with effect from July 1. takes decision to make investment of surplus funds in such a manner that 11 . Dollar. 1982 under which the value of the rupee was determined on daily basis. Adjustments were made in its value as and when the circumstances so warranted. among other measures taken by it. the State Bank is also responsible for the management of the foreign exchange reserves. After nuclear detonation by Pakistan in 1998. In this regard. a two-tier exchange rate system was introduced w. 1971 and subsequently to U. During the course of time. The task is being performed by an Investment Committee which. As an agent to the Government. To achieve the objective. maturities and payment obligations. with reference to a basket of currencies of Pakistan¶s major trading partners and competitors. an important development took place when Pakistan accepted obligations of Article-VIII. after taking into consideration the overall level of reserves. Section 2. the exchange rate has been unified.e. January 8. has now been done away with and the commercial banks and other authorized dealers have been made free to hold and undertake transaction in foreign currencies. As the custodian of country¶s external reserves. to regulate foreign exchange reserves of the country in line with the stipulations of the Foreign Exchange Act 1947.f. However. 3 and 4 of the IMF Articles of Agreement. 1994.e. the Bank is required. effective 19th May 1999. silver or approved foreign exchange and transactions of Special Drawing Rights with the International Monetary Fund under sub-sections 13(a) and 13(f) of Section 17 of the State Bank of Pakistan Act. 1956. with the introduction of marketbased floating exchange rate system.S.f. previously required to be made to State Bank through authorized dealers. various exchange policies have been adopted from time to time keeping in view the prevailing circumstances.

the orthodox central banking functions have been combined by the State Bank with a well-recognized developmental role. Saleem Raza. the State Bank of Pakistan. establishment of Development Financial Institutions (DFIs). 12 . providing subsidized credit. For this purpose. Accordingly.A PROJECT REPORT ON MCB BANK LIMITED ensures liquidity of funds as well as maximizes the earnings. The current Governor of State Bank of Pakistan is Mr. These reserves are also being used for intervention in the foreign exchange market. The explicit recognition of the promotional role of the Central Bank evidently stems from a desire to re-orientate all policies towards the goal of rapid economic growth. DEVELOPMENTAL ROLE OF STATE BANK The responsibility of a Central Bank in a developing country goes well beyond the regulatory duties of managing the monetary policy in order to achieve the macro-economic goals. Ever since its establishment. besides discharging its traditional functions of regulating money and credit. a Foreign Exchange Dealing Room has been set up at the Central Directorate of State Bank of Pakistan and services of a µForex Expert¶ have been acquired. This role covers not only the development of important components of monetary and capital markets but also to assist the process of economic growth and promote the fuller utilization of a country¶s resources. directing the use of credit according to selected development priorities. The principal officer of the SBP is the Governor. The scope of Bank¶s operations has been widened considerably by including the economic growth objective in its statute under the State Bank of Pakistan Act 1956. and development of the capital market. development of new financial institutions and debt instruments in order to promote financial intermediation. The Bank¶s participation in the development process has been in the form of rehabilitation of banking system in Pakistan. has played an active developmental role to promote the realization of macro-economic goals.

It was incorporated with an authorized capital of Rs. 13 . This was the third Muslim bank in the subcontinent.M. Following are some key developments:  Launching of different deposit schemes to increase saving level. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer.  Increasing ATM machines and online branches. This was the idea which paved the way for setting up MCB Bank Ltd known as MCB (Muslim Commercial Bank). This bank was incorporated under companies¶ act 1913 on 9th July. 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.029 million.640 million. 1. But due to changing scenario of the region. Adamjee was appointed its first chairman. The first Head office of the company was established at Dacca and Mr. G. This institute was nationalized with other on January 1st. 1947 (just before partition) at Calcutta.A PROJECT REPORT ON MCB BANK LIMITED HISTORY OF THE MCB BANK LIMITED Before separation of Indo Pak. incorporated in 1947. The reason for this choice was the better profitability condition of the organization and less risky credit portfolio which made'' it a good choice for investors. PRIVATIZATION When privatization policy was announced in 1990.  Introduction of Rupee Traveler Cheques. Now recently the head office of MCB has been transferred to Islamabad in July. It was privatized in 1991 to the Nishat Group. 15 million. the certificate of incorporation was issued on 17th August. 1948 with a delay of almost 1 year. the growth in every department of the bank has been observed. MCB has a reputation of a conservative bank but nationalization also left its effects on this institute as well and by end of year 1991 in which it was privatized the total number of branches were 1287 and deposits amounting to as high as Rs. At that time it had 506 branches and deposits amounting to Rs. MCB is one of the oldest banks of Pakistan. Later on the registered office of the company was shifted to Karachi on August 23rd. 1999 and now head office termed as principle office. the need for more Muslim banks was felt at the same time Muslims having strong financial capacity were thinking to invest in this sector as well. Although. AFTER PRIVATIZATION After privatization. MCB was the first to be privatized upon recommendations of World Bank and IMF. 1974. the certificate was issued at Chittagong. 1956 through a special resolution.  Increased participation on foreign trade. 35.

equity research and underwriting. administer and manage modaraba funds.950% Profile: One of the largest service providers for Electronic Transactions to various financial institutions / banks including related services in Information Technology. which owns 20% stake in it through May ban International Trust (Labuan) Berhad. FIRST WOMEN BANK LIMITED Holding: 26.A PROJECT REPORT ON MCB BANK LIMITED To accede to international capital markets.13% 14 . modarabas and also acts as trustees of various mutual funds. MNET SERVICES (PRIVATE) LIMITED Holding: 99. MCB TRADE SERVICES LIMITED Holding: 100% Profile: Provides agency services trade transactions. the bank launched Global Depositary Receipts (GDRs) in 2006.999% Profile: Float. MCB FINANCIAL SERVICES LIMITED Holding: 99. In 2008. or work with you to create a personalized solution completely focused on your expectations of the capital markets. Software and data processing.78% ADAMJEE INSURANCE COMPANY LIMITED Holding: 29. We can suggest the products most suited for your needs. MCB Investment Services offer distribution of mutual funds managed by the leading fund managers of Pakistan. MCB ASSET MANAGEMENT COMPANY LIMITED Holding: 99.990% Profile: Asset management. the Bank entered into a strategic partnership with May bank. It was the first Pakistani bank that got listed its shares on the London Stock Exchange. Malaysia. SUBSIDIARIES OF MCB Make the most of your wealth with investment opportunities that match your unique financial aspirations. investment advisory. portfolio management.


both realized and unrealized. 4. We create an environment where each individual is enabled to succeed. We believe in being the best at always doing the right thing.A PROJECT REPORT ON MCB BANK LIMITED VISION STATEMENT To be the leading financial services provider. 2. We deliver on our responsibilities and commitments to our customers as well as our colleagues. 16 . culture and history. RESPECT We respect our customer¶s values. result oriented organization where merit is the only criterion for reward. We are a performance driven. In doing so. beliefs. We thrive on the challenge of understanding their needs and aspirations. We make every effort to exceed customer expectations through superior services and solutions. OUR VALUES These are the standards and principles which determine our behavior and how we interact with our customers and each other: 1. CUSTOMER CENTRICITY Our customers are at the heart of everything we do. MISSION STATEMENT We are a team of committed professionals. we ensure that our shareholders can invest in us with confidence. partnering with our customers for a more prosperous and secure future. INTEGRITY We are the trustees of public funds and serve our community with integrity. 3. providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. EXCELLENCE We take personal responsibility for our role as leaders in the pursuit of excellence. We value the equality of gender and diversity of experience and education that our employees bring with them.

Our teams work together for the smooth and efficient implementation of ideas and initiatives.A PROJECT REPORT ON MCB BANK LIMITED 5.  Building a corporate culture of equality. sustainable performance. INNOVATION We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. STRATEGIC OBJECTIVES  Delivering remarkable returns to stakeholders. exceeding market and shareholder expectations.  Providing value added services through operational expansion. trust and team spirit as we remain dedicated to be a socially responsible organization. geography and upgraded systems. AWARDS                    2010 The Asian Banker: Strongest Bank in Pakistan 2010 The Asian Banker: Leadership Achievement Award 2010 MMT: Best Bank Led MMT Service 2010 ICAP / ICMAP: BCR Award 2009-Banking Sector 2010 SAFA: Certificate of Merit Award 2009 Asia money: Best Domestic Bank in Pakistan 2009 The Asset: Best Domestic Bank in Pakistan 2008 Euro money: Best Bank in Asia 2008 Euro money: Best Bank in Pakistan 2008 Asia money: Best Domestic Bank in Pakistan 2006 Asia money: Best Domestic Bank in Pakistan 2006 Euro money: Best Bank in Pakistan 2005 Asia money: Best Domestic Bank in Pakistan 2005 Euro money: Best Bank in Pakistan 2004 Euro money: Best Bank in Pakistan 2004 Asia money: Best Domestic Bank in Pakistan 2003 Euro money: Best Bank in Pakistan 2001 Euro money: Best Bank in Pakistan 2000 Euro money: Best Bank in Pakistan 17 .

A PROJECT REPORT ON MCB BANK LIMITED ORGANIZATIONAL BRANCH STRUCTURE OF THE MCB MCB Board of Directors Chairman President Audit & RAR Wholesale Banking Consumer Banking Islamic Banking Commercial Banking Treasury & Forex Cooperate Affairs Special Assets Management Risk Manageme nt Compliance & Control Strategic Planning & Investment Financial Control Information Technology Human Resource Manageme nt Operations 18 .



A PROJECT REPORT ON MCB BANK LIMITED CORPORATE INFORMATION BOARD OF DIRECTORS Mian Mohammad Mansha Chairman (Non-Executive Director) S.M. Muneer Vice Chairman (Non-Executive Director) Tariq Rafi (Non-Executive Director) 21 .

A PROJECT REPORT ON MCB BANK LIMITED Shahzad Saleem (Non-Executive Director) Mian Umer Mansha (Non-Executive Director) Sarmad Amin (Non-Executive Director) Aftab Ahmad Khan (Non-Executive Director) 22 .

A PROJECT REPORT ON MCB BANK LIMITED Dr. Muhammad Yaqoob (Non-Executive Director) Dato¶ Mohammed Hussein (Non-Executive Director) Mian Raza Mansha (Non-Executive Director) Muhammad Ali Zeb (Non-Executive Director) 23 .

Usmani President and Chief Executive Officer (Executive Director) Audit Committee Tariq Rafi ± Chairman (Non-Executive Director) Dr. Muhammad Yaqub (Non-Executive Director) Dato¶ Mohammed Hussein (Non-Executive Director) Aftab Ahmad Khan (Non-Executive Director) Muhammad Ali Zeb (Non-Executive Director) Chief Financial Officer Salman Zafar Siddiqi Company Secretary Abdus S.A.A PROJECT REPORT ON MCB BANK LIMITED Dato¶ Seri Ismail Shahudin (Non-Executive Director) M. Sami Auditors KPMG Taseer Hadi & Co.U. Chartered Accountants 24 .

Jinnah Avenue. F-6/G-6. Advocates & Legal Consultants Registered Office MCB Building.mcb. 25 . THK Associates (Pvt.) Ltd. Principal Office MCB 15 Main Gulberg. Lahore.A PROJECT REPORT ON MCB BANK LIMITED Legal Advisors Khalid Anwer & Co.pk ‡ investor. 3. Karachi. Dr. Ziauddin Ahmed Road.com.com. UAN: (042) 111-000-111 PABX: (042) 36041998-9 Website: www.relations@mcb.pk Email: info@mcb.com. State Life Building No. Islamabad..pk Shares Registrar M/s.


A PROJECT REPORT ON MCB BANK LIMITED DEPARTMENTS OF MCB CASH DEPARTMENT The following books are maintained in the Cash Department:  Receiving Cash Book  Paying Cash Book  Token Book  Scroll Book  Cash Balance Book MCB bank Limited is running two parallel programs viz. 1881. In MIBS all above mentioned books are to be maintained. Mostly. It further lies down that a crossed cheque can only be paid to a banker. MIBS and Symbols.Payments = Closing Balance This is very important department because cash is the most liquid asset and mostly frauds are made in this department. A clearing house is a place where representative of all banks of the city get together and settle the receipts and payment of cheques drawn on each other. paying cash book. therefore. extra vigilance is taken in this department and nobody is allowed to enter or leave the area freely. Opening Balance + Receipts . token book & scroll book are obsolete. cash area is grilled and its door is under supervision of the head of that department. However in Symbols cash receiving cash book. It is however an important function of crossed cheques. lays down that drawer or holder of a cheque or draft may cross the instrument generally or specially. who collects it for a customer in good faith and without negligence. As the collecting banker runs certain risks in receipt of their ownership the law has provided certain protections to the banks. A large part of this work is carried out through the bankers clearing house. The Negotiable Instrument Act. The consolidated figure of receipt and payment of cash is entered in the cash balance book and drawn closing balance of cash. ATM machines are also operated and handled by the head of Cash department who intern maintains the cash in ATM machines for 24 hour service. All the books maintained in this department are checked by an officer. TYPES OF CHEQUES: 27 . CLEARING DEPARTMENT Every banker acts both as a paying as well as a collecting banker.

sub-member of local clearing house.A PROJECT REPORT ON MCB BANK LIMITED 1. which are collected and paid by the same branch of bank. Transfer cheques: are those cheques. Scrutiny and receipt by the authorized officer. which is covered by a particular clearing house. Fixing the stamps. To collect amount of cheques drawn on members. clearing and collection cheques from the customers of the branch and to arrange for their collection. Returning the counter file to the depositor. Certificate and confirmation by the officer in charge of the department. Transfer delivery cheques: are those cheques. FUNCTIONS OF CLEARING DEPARTMENT:  To accept Transfer. which are drawn on the branches of either the same bank or of another bank. . are not in the same city or they are not the members of clearing house. sent for collection by MCB Branches. Separating the cheque into transfer. Clearing cheques: are those cheques. To arrange the payment of cheques drawn on the branch and given for collection to any other branch on MCB or any other members or sub member of the local clearing house. and clearing cheques. but those branches. 4.         28 . Collection cheques: are those cheques. not represented at the local clearing house Receiving and scrutinizing the cheques and other deposit instruments. and the payin-slip at the counter. which are collected and paid by two different branches of the same bank situated in the same city. which are drawn on the branches of some other bank of the same city or of the same area. Transfer delivery. 3. 2. transfer delivery.

Cheque from other branches are also received by the main branch. signed & received by officer. 29 .A PROJECT REPORT ON MCB BANK LIMITED CLEARING PROCESS (FLOW CHART) Cheque with slip given Slip is asked & filled Cheque along with slip checked. Entries in daybooks are made Entries checked & verified by another officer after banking hours by officer Cheques presented in the Clearing House The same day not honored cheques are returned to Main Branch The day after tomorrow the banks are informed about dishonored cheques Provisional entries for returned cheques are debited again in both computer & daybooks Party is informed about returned cheques through Phone or personal contact Advices are provided to the branches after getting credit in NBP account.

Foreign Currency Funded Facilities.NON FUND BASED Fund Based Facilities: ³Bank¶s Funds Involved´ Non±Funded Facilities ³Bank¶s Fund are not Involved´ In these finances only bank¶s name is used. 5. if customer fails to perform the actions on its part. 7.Pak Rupees Funded Facilities. 30 . BROAD CATEGORIES A --FUND BASED      Funded Facilities. Fund Based Facilities: 1. 8. Non-fund based finances convert into fund based. 3.Pak Rupees: 1. Payment Against Documents (PAD) Inland Bills Purchased (IBP) Finance Against Imported Merchandise (FIM) Finance Against Trust Receipt (FATR) Finance Against Foreign Bills (FAFB) Foreign Bills Purchased (Negotiated Under L/C). 9. 6. Funded Facilities. 2. Running Finance (RF) Cash Finance (CF) Demand Finance (DF).State Bank of Pakistan Scheme Seasonal Finance MCB Instant Finance B -. 4.A PROJECT REPORT ON MCB BANK LIMITED ADVANCES DEPARTMENT Advances are the most important source of earning for the banks. MCB is also giving full attention towards this aspect and it is also obvious from the growing portfolio of advances and from very low delinquency rate. A. The credit portfolio of this institution is in a very much better shape than other financial institutions of Pakistan and the credit goes to the management and the staff who are concerned about the quantity and quality as well.

3. MCB Instant Finance: B. 2.Export Finance Part-II 4. Finance Against Packing Credit (FAPC) 2.State Bank of Pakistan: 1. Foreign Currency Export Financing (FCEF) 3. Working Capital Finance to Sugar Mills Working Capital Finance to Rice Mills Working Capital Finance to Flour Mills and Traders Working Capital Finance to Cotton Ginners Working Capital Finance to Textile Mills 5. Funded Facilities.Foreign Currency: 1. Seasonal Finance: 1. 3. Funded Facilities. Foreign Currency Bill Discounting (FCBD) 3. 4. 5. Lien Lien is the right of the creditor to retain debtor¶s property until such time the debt due to him is repaid in full. Performance/ Bid Bonds. Letter of Credit DA Bills Guarantees. Non-Fund Based Facilities: 1. Types of Securities and Charges: 1. Types of Lien: General Lien: Arises out of general dealings between the two parties Particular Lien: 31 . etc. 2. Foreign Currency Import Financing (FCIF) 2.A PROJECT REPORT ON MCB BANK LIMITED 10.Export Finance Part-I 2.

The bailor in this case is called pawnor. Fixed & Floating Charge 32 .A PROJECT REPORT ON MCB BANK LIMITED Arises out of particular transactions connected with the property subject to lien.´ 4. Registered Mortgage: The registered mortgage is also termed as ³Legal Mortgage´ which according to section 58(b) of Transfer of Property Act 1882 takes place when a person by an instrument signed by him. The bailee is called pawnee. 2.´ Equitable Mortgage: The equitable mortgage is also termed as ³Mortgage by Deposit of Title Deeds´ which according to section 58(f) of Transfer of Property Act 1882 takes place when a person delivers title deed of his immoveable property to a creditor in any District Headquarter Town of Pakistan with the intention to create a security thereon for an existing or future debt of for performance of a financial obligation. and existing or future debt. attested by at least two witnesses and registered under Registration Act 1908. the mortgage shall have the right to cause the mortgaged property to be sold and sale proceeds maybe appropriated towards outstanding. A Banker¶s Lien is spread over all the goods and securities which come into the possession of banker in its ordinary course of business as a banker and ownership of which belongs to his customer. 5. binds himself personally to pay the loan and expressly that in the event of his default.´ 3. or the performance of an engagement which may rise to a pecuniary liability. Mortgage Mortgage is defined under section 58(a) of Transfer of Property Act 1882 as: ³A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan. Hypothecation Hypothecation is type of a security where possession of the property itself remains with the customer/debtor. Pledge: Pledge is defined under section 172 of Contract Act 1872 as: ³The bailment of goods as security for payment of a debt or performance of a promise is called pledge. It is defined as: ³A legal transaction whereby goods may be made available as security for a debt without transferring either the property or possession to the lender.

FUND BASED FACILITIES: i. thereby ensuring that the guarantee cannot be statute barred until three years from the date when demand is made upon the guarantor. knowing it to be a guarantee and being under no possible mistake or misapprehension the bank will have a satisfactory security. the borrower is required to adjust the finance provided by the Bank within the stipulated expiry period (normally once in a year). The liability of the guarantor are expressed to be payable on demand. A fixed charge is a charge given by a company over specified assets whereby company cannot dispose of those assets without banker¶s consent. Under this type of financial accommodation. which the principal may owe to the bank when the demand is made. 33 . In case of default by the borrower.Pak Rupees: 1. but the security may be considered inadequate by itself.A PROJECT REPORT ON MCB BANK LIMITED Joint Stock Companies usually borrow through issuance of debentures. maintained with the Bank. Signature of the Guarantor: Where the worth of the guarantor is undoubted or adequately secured and he signs the guarantee of his own free will. A. Third Party Guarantee: Where the repayment of an advance is guaranteed in writing by a third party then the advance is termed as and advances against a guarantee. in practice. for presence. Such an advance may be clean or may be already secured. Funded Facilities. which. participation terms certificates that are acknowledgement of debt owed by the company. This type of security is perhaps very easily obtained but. the guarantor may be called upon to liquidate the advance. it has certain characteristics like: 6. Liability of the Guarantor: The guarantor accepts responsibility for every possible amount. however. These loans are secured by floating charge and sometimes by fixed charge as well as mortgage of property. it is very difficult to realize. should be inserted in the guarantee by the guarantor in his own handwriting. subject to a limitation on his maximum liability. There is not any specific definition of floating charge. Running Finance: Running Finance is provided to a customer allowing withdrawals from their current account in excess of the credit balance.

This facility normally commences from the date of procurement of raw material. at a future date. Demand Finance: Under this facility. Purpose: New/ Fresh Project: No exiting operation Expansion: Increase in existing production/ operation capacity. 34 . finance is allowed to the borrower for fixed period usually exceeding one year.A PROJECT REPORT ON MCB BANK LIMITED However. The documents. The importer enters into an agreement with the Bank to meet the obligation to purchase the import documents at Marked±up Price (purchase price). 2. 3. Customer can utilize this facility only when the goods are pledged and bank¶s macadam verifies the quantity of pledged goods.  Adding back process/other machines in existing production line to improve balance. would be purchased by the Bank for the amount of finance and sold to the importer at the Marked±up Price. Modernization & Replacement (BMR):  Replacement of existing old/ obsolete machines with new ones. Types of Term Finance:     Demand Finance. the account may be freely operated by the way of multi-transaction provided that the sanctioned limit is not exceeded and the account is operated strictly in accordance with approved limit and terms and conditions at all times. Payment Against Documents: PAD (Payment Against Documents) arises when the Bank receives documents under a Letter of Credit and makes payment against the documents. as per Mark±up Agreement. Cash Finance: This facility is provided against the pledge of inventory (raw / finished).Fixed Assets Finance (DF-FAF) Lease Finance (LF) Direct Lease Sale and lease-Back 4. repayable either in periodic installments or in lump sum. Balancing. This facility is sanctioned for a period of one year. The basic purpose is to enable the customers to purchase seasonal raw inventory.

An Inland Bills Purchased facility should be extended on the basis of Mark±up / Mark±down system. Mark-down amount and margin (if any). both located within the country. Mark-down to be recovered upfront and recorded as liability under Mark-up recovered in advance. 6. while finance is booked at Bill amount. Retirement occurs when the importer receives the documents from the Bank and pays the bill amount along-with mark-up. Under the FIM. 5. two types of transactions shall be deemed to have taken place. Tenure of the Limit: This facility is approved for a period of one year but the borrower is required to get each consignment released within a short period. Sometimes.e. This liability is accounted for as Mark-up income on realization/ adjustment or on quarter ends. Finance Against Imported Merchandise (FIM): Bank usually endorses LC documents in customer¶s name when the full payments excluding cash margin is paid by him. The concept / working of this system is explained hereunder: Mark-up: This mode of financing would be applied only in case where Bank charges are to be recovered from the drawee i. Trust Receipt (TR). Commission + Mark-down for 20 days (in case of sight bills) / up to maturity period (in case of usance bills) shall be recovered upfront. customer is unable to pay this amount and applied for the facility of Finance against Imported Merchandise (FIM). 35 . financing shall only be made available on the basis of mark-up for imported goods against LC established and goods pledged with MCB. Customer gets Bill amount less Commission / other charges. The same may also be affected through available / approved limit of Finance Against Imported Merchandise (FIM). the correspondent bank will honor the payment of the Bill of Exchange. but not exceeding 120 days. Mark-Down: This mode of financing will be applied only when the Bank charges are recoverable from drawer. Bank acts as an agent of the drawer under an agreement with the drawer that he will repurchase it back from the Bank or the drawee would promptly retire the bill. The imported goods are to be pledged with MCB. Inland Bill Purchased (IBP): This type of facility is created when the Bank purchases the goods (documents of title to goods) from the drawer of the bill and sells the same to the drawee. purchase and sale of import documents. whichever is earlier.A PROJECT REPORT ON MCB BANK LIMITED When an import bill is received and lodged.

The term "documentary bills" is used for Bills of Exchange accompanied by the relevant documents of title to goods. the bank may hand over the documents of title to goods like railway receipt. Finance against Trust Receipt (FATR): A trust receipt is a document which is executed whenever goods / documents of title to goods are handed over to the customer ± either for sale or warehousing. and he will pay the proceeds into his account.A PROJECT REPORT ON MCB BANK LIMITED 7. Foreign Bills Purchased (Negotiated Under L/C): Exporters requiring funds immediately against their export bills approach the Bank who then negotiates / purchases / discounts the bills and pays exporters the value in Pak Rupees. whereas in case of rupee bills. 36 . In case of Bills in foreign currencies. it is a condition that all direct Bank expenses i. Finance Against Foreign Bills (FAFB): Financing against Foreign Bills (FAFB) is made on export bills which are drawn under L/C and or Firm Contract and are sent for payment under documentary collection against DP / DA basis. negotiation of export bills drawn under L/C is Bank¶s purchase and claiming/ obtaining reimbursement there against is Bank¶s Sales. The acknowledgement that he is holding the goods in trust for the bank preserves the bank¶s charge. if any. to the borrower against execution of trust receipt. for clearance of goods and giving formal possession thereof to the bank. should be recoverable from the Exporters unless it is explicitly stated in the Letter of Credit that the charges are on Opener's Account. 9. In cash credit accounts against pledge of goods. etc. This will specify that he takes the goods in trust for the bank and agrees to keep them apart from all his other goods. It is a matter of agreement between the borrower and the banker to submit periodical statements of stock held under trust receipt. bank¶s profit is in the shape of negotiation commission. However. foreign correspondents charges claimed by the opening Bank / Reimbursing Bank. Tenure of limit This facility is approved for a period of one year but each trust receipt transaction is allowed for a period of 60 days or as per sanction advice. held as security for advances. In other words. 8.. the difference of exchange earning between purchases and sales of foreign currency is bank¶s profit. bill of lading.e. Documentary collection consists of export bills accompanied with documents evidencing the shipment of goods.

during Import stage. who are already availing credit facilities with a good track record and have sufficient earnings stream. additional collaterals are also obtained from the borrower to safeguard Bank¶s interest. The Bank will finance the funding from Funds of F. The exporter will pay amount of the Mark-up plus cost of goods/ documents upon negotiation of export documents drawn under L/C or upon receipt of export proceeds. In the event of nonpayment of overdue Export Bill. The marked-up price comprises cost of goods/ documents and mark-up is added to the total cost of goods at a mutually agreed price between the exporter and the Bank. Handling Charges.E. the goods or product are to be purchased by the Bank on behalf of the exporter who then repurchases them from the Bank at Marked-up price. The facility under packing finance is secured by creating a lien on the irrevocable letter of Credit/ firm order and stocks required for the export thereof. It also entails the signing up of a buy-back agreement between the exporter and the Bank. SBP Cash margin restrictions (if any) to be held in Margin Account. the exporter undertakes to re-purchase the documents of title to goods or export bill from the Bank at marked-up price agreed in the buy-back agreement. Foreign Currency Import Financing (FCIF): The Bank will provide financing in foreign currency. Security: Pledge/ Hypothecation or Trust Receipt of Imported Stocks and charge on existing/ fresh collateral (where required). At times. 37 . Export Duty. ii. normally US Dollars. Packing Requirement.A PROJECT REPORT ON MCB BANK LIMITED 10. extended to the exporters against valid export letter of credit/ firm order. 25 deposits and as such is subject to availability of funds of such deposits. FUNDED FACILITIES ± FOREIGN CURRENCY 1. The product will be offered to our prime customers. against import purchases. Purchase of Goods. It is also applicable to items not eligible under the concessionary Export Refinance Scheme of the Government. In other words. Basic concept of purchase and sale. Finance Against Packing Credit (FAPC): Finance Against Packing Credit (FAPC) is Pre-shipment or Pre-export Finance. The finance is extended to exporters to meet the expenses like Freight Charges. However. Margin: Margin to be held as per approval. Clearing Forwarding Charges. applied to FAPC and Finance is provided to the exporter for the purchase of goods to be exported.

who are already availing credit facilities with a good track record. 2.E. who are already availing credit facilities with a good track record. customer to execute additional documentation to the effect that where customer fails to adjust the finance by maturity. Tenor: The tenor of the facility will be determined on a case-to-case basis but will not exceed 180 days. 25 deposits and as such is subject to availability of funds of such deposits. The product will normally be offered to our prime export oriented customers. bank may finance repayment of the liability in FCY through Forced Rupee finance. The Bank will finance the funding from Funds of F. 3. 25 deposits and as such is subject to availability of funds of such deposits. whichever is higher. Foreign Currency Export Financing (FCEF): The Bank will provide financing in foreign currency. beyond 180 days from the date of initiation of the finance. However. normally US Dollars. Tenor: The tenor of the facility will be determined on the basis of tenor of the bill. normally US Dollars. No rollover shall be permissible. Security: Post-shipment finance would be secured by lien on Export documents under L/C of top 1000 Banks and any other security as per terms of existing facility being blocked to allow US Dollar denominated exposure. 38 . against Pre-Shipment Finance and Post-Shipment Finance. Accordingly. The Bank will finance the funding from Funds of F. Post-shipment Finance ± This will be allowed by blocking the existing ERF Post Shipment /FAFB/ FBP limits.A PROJECT REPORT ON MCB BANK LIMITED Stocks: SBP margin restrictions applicable on stocks held against FCIF or as per Approval of Finance. The product will be offered to our prime export oriented customers.E. it should not exceed 180 days from the date of shipment or as allowed by the SBP from time to time whichever is lower. Pre-shipment Finance ± This will be allowed by blocking the existing C F/ RF/ FAPC / ERF Part-1 and 2 limits against export contracts or L/C. Foreign Currency Bill Discounting (FCBD): The Bank will provide financing in foreign currency.

In part-II. Bank disburses the amount to its customer and after that applies to SBP for re-finance. iv. Sugar mills remain operative only during Sugar Cane season necessitating seasonal financing needs. At present. Working Capital Finance to Sugar Mills The main raw material for sugar mills in Pakistan is Sugar Cane (though sugar beet is also used to produce sugar). Normally. Working Capital financing to sugar mills are usually allowed against pledge of refined sugar and a small portion in exceptional case may be allowed against Stores / Spares / Chemicals / Molasses. in order to get foreign exchange reserves. Tenor: The tenor of the facility will be determined on a case-to case basis but will not exceed 180 days. Any shortfall in security value (on the basis of revaluation to be undertaken at least monthly) to be topped up. this finance is allowed on pre-shipment and post-shipment basis. Cash Finance Cash Finance to sugar mill is provided keeping in view the production 39 . financing should be restricted up to 85% to 90% of the Contract/ LC / Bill amount. this is being operated in two parts. FUNDED FACILITIES ± STATE BANK OF PAKISTAN Export Refinance SBP. finance is allowed on the basis of previous year¶s export proceeds. This will be the responsibility of Branch and controlling offices of respective Business Group. In Part-I. Post-shipment finance would be secured by lien on Export documents under L/C and contracts as per terms of existing facility being blocked to allow US Dollar denominated exposure. Tenure of limit This facility is approved for a period of one year but SBP allows refinance for a period of maximum 180 days or as per the validity of the LC.A PROJECT REPORT ON MCB BANK LIMITED Security: Pre-shipment finance would be secured by lien on export contracts / L/C as well as the existing securities structure in place for the limit being blocked. launched this scheme. SEASONAL FINANCE: 1. whichever is earlier. iii.

its storage for curing (Quality of rice improves with storage. Export Finance Normally. sugar is not exported. Fund Based: FIM against imported sugar stocks to be considered on merit and shall be subject to SBP minimum margin requirement for advances. when Government permits export. in exceptional cases hypothecation based exposure can be allowed to the extent of 25 % of the approved CF line as an independent line subject to completion of certain conditions. Import of Sugar: Non-Fund Based: As per SBP restriction. The SBP minimum margin requirement as applicable to advances shall apply. request for such financing to be considered on merit. 3. Traders / Exporters require financing for purchase of rice. Working Capital Finance to Rice Mills Rice Mills (Husking / Processing Units) / Traders require financing for procurement of Paddy. Working Capital Finance to Flour Mills and Traders With the paradigm shift in Government of Pakistan¶s Policy to encourage Private Sector. Rice Mills purchase paddy and require finance to pay to Farmers / Zamindars / Middlemen. However. The Paddy is stored in open within mill premises under Bank¶s pledge in custody of Bank¶s approved Macadam. Running Finance: Any hypothecation based line (Running Finance) must not exceed 15 % of the approved CF limit at any given point in time. Sight L/C may be opened retaining adequate margin. However. Financing to Private Sector against Wheat up till now had been mostly limited to flour mills to support the procurement of wheat by them from Provincial Food Department / PASSCO (Pakistan Agriculture Storage & Supplies Corporation) and lately against procurement from market as 40 . 2. where-after finance is released proportionate to its value retaining margin on receipt of stock report from Bank¶s approved Muccadum. Limit for a Sugar Mill must not exceed 25 % of the last year¶s refined sugar production. banks are not allowed to open L/C on Usance basis. Banks are required to gear-up their financing to Private Sector for the purpose. its processing and against semi-finished product (Brown Rice) or finished product (Rice). However. Cash is secured aganist Pledge of Sugar Stocks with minimum margin of 15% (Group Head may reduce the same to 10%).A PROJECT REPORT ON MCB BANK LIMITED capacity and lending principles. provided properly stored & fumigated) and/or awaiting its sale. Working Capital requirement of Sugar Mill should be calculated on the basis of their refined sugar production capacity after taking into consideration the operating capacity.

A PROJECT REPORT ON MCB BANK LIMITED well. To facilitate self liquidation, it is prudent that financing is allowed against the pledge of wheat and financing against finished stock (flour) is kept at minimum. The obligor procures wheat procures from Food Departments/ PASSCO/ Market. The wheat so procured is pledged by the obligor under charge of Bank¶s Muccadum in a godown. In case of Flour mills within Mill premises. When obligor wishes to use / sell pledged wheat/ flour, it repays the bank. Bank issues a Delivery Order (DO) to the obligor who presents it to Muccadum for release of wheat/ flour. 4. Working Capital Finance to Cotton Ginners Cotton ginners require working capital financing for procurement of Phutti / Seed Cotton, its processing and to finance ginned cotton awaiting sale. To facilitate self liquidation of Bank¶s exposure, it is prudent that financing to support storage of finished product (ginned cotton) is kept at minimum. The cotton ginning operation is simple and its processing time is short, thus funds held for work in process is negligible. Hoarding of the same for speculative price increase with the help of Bank¶s financing is discouraged, therefore Bank¶s financing should be limited to productive purposes only. However, to profitably utilize its by-product (cotton seed) a ginning unit may also have oil expelling unit within its premises, operations of which may also be financed by the Bank. Cotton Ginners are provided with facility of CF and RF as per bank criterion moreover TRF is also provided to exceptional cases. 5. Working Capital Finance to Textile Mills Textile industry is divided into various different segments. These segments can be broadly categorized as Ginning, Spinning, Weaving, Knitting, Processing / Finishing. Textile industry holding costs of various types of inventories may be substantial, which also require financing. As a principal, risk involved in financing against cotton is lesser as compared to financing against yarn, fabric, or end products. As we move from yarn to fabric and to end product, the risk increases as it is difficult to accurately price these items and secondary market is not as liquid as in case of cotton (cotton is traded daily on Karachi Cotton Exchange). Therefore, finance against yarn, fabric, and end products should be kept at minimum. Similarly, finance against knitwear should be discouraged as far as possible, as pricing of knitwear garments / fabric is very complex. Extreme prudence must be carried out in evaluating credit worthiness of a knitwear client and effort should be made to secure finance against realizable assets not part of the knitting business e.g. realizable residential property etc.


A PROJECT REPORT ON MCB BANK LIMITED iv. MCB INSTANT FINANCE: MCB offers these facilities exclusively to its existing account holders against one of the following securities:      MCB deposits/ receipts/ certificates. Deposits/ certificates/ receipts of other scheduled banks subject to FIID clearance. Against National Saving Certificates / Government Securities i.e. SSCs, DSCs, RICs. FCY deposits / receipts / certificates under FE-25. Growth Certificates of MCB Asset Management Company Dynamic Cash Fund

For allowing financing against any liquid security in addition to the above categories, prior approval must be obtained from RMG despite of the fact that the loan amount falls within the powers of relevant business discretionary power holder. This accommodation is extended in lump sum for the mutually agreed period and the borrower has to repay the entire amount of finance together with mark-up at the rate prescribed from time to time. It should be noted that the credit facility is not available in the name or against deposit receipts or certificates of:  Minors or Non-Profit Organizations (unless their By-Laws / Trust Deed permits them to do so).  Partnership concerns (unless the names of all partners appear on the deposit receipts or certificates and no partner is minor).  Bahbood Savings Certificates can not be pledged as security. For financing against FCY deposits, valuation of the same to be done in accordance with treasury & FX Circulars at the time of initiation of finance and revaluation of the same to be done on monthly basis. In case of any shortfall the same must be adjusted / topped-up within three working days.

Second type known as non-fund based does not require funds/ cash, in these finances only bank¶s name is used. Non-fund based finances convert into fund based, if customer fails to perform the actions on its part. Following finances are non-fund based: 1. Letter of Credit (LC) 2. DA Bills 3. Bank Guarantee (BG) 1. Letter of Credit (LC):

A PROJECT REPORT ON MCB BANK LIMITED A Letter of Credit is a document issued by a bank on behalf of a customer, authorizing a beneficiary to draw a draft or sometimes without requirement of a draft(s), which will be honored on presentation by the bank if drawn in accordance with terms and conditions specified in the letter of credit. It is a written undertaking by a bank (issuing bank) given to the seller (beneficiary) at the request and on the instructions of the buyer (applicant) to pay at sight or at a determinable future date a stated sum of money against the required documents. The documents include commercial invoice, certificate of origin, transport document relating to the mode of transport used and other documents required as per terms of letter of credit. Documentary credits are, therefore, an arrangement of security for the parties involved provided by the bank in the form of a conditional guarantee. The conditional guarantee is related to the documents only and not to the underlying goods, services and/or performances to which the documents may relate. Parties to a Letter of Credit:        The Applicant (Opener of L/C) Opening Bank (Issuing Bank) Advising Bank Beneficiary (Exporter) Confirming Bank Negotiating Bank Reimbursing Bank

2. DA Bills: The facility is extended when the Bank has already handed over the documents to the importers against their acceptance of Usance bill, which means they may already have taken custody, and/ or disposed off the imported goods. Such facility is allowed only to reputable clients and / or backed by collateral. The Bank has in its possession only the accepted Usance bill/ draft for which payment by the importers is awaited. However, it is Bank¶s policy that the goods against such accepted bill shall remain under Bank¶s pledge/ control unless the customer has approved limit of Document Delivered Against Acceptance (DDAA) which is usually backed by T/R. Whether or not the importers make the payment, the Bank is bound to provide reimbursement, as per terms of L/C, to the correspondent negotiating bank on the date of maturity already conveyed to them. The DA Bills may be retired on maturity through any of the following means:


In other words BG is an irrevocable undertaking of a bank (guarantor) to effect payment against presentation of a written statement of the Guarantee-holder (beneficiary) to the effect that a given contractually agreed obligation has not been fulfilled. which is concluded on behalf of a third party. Principal Debtor and Creditor. The person to whom the guarantee is given is called the Creditor. 3. The guarantee is a unilateral agreement between the bank and the beneficiary.  Through initiating a forced PAD/ DF in case customer fails to make the payment at maturity. The person in respect of whose default the guarantee is given is called the Principal debtor. defines Contract of Guarantee. if there is adequate credit balance/ limit available.A PROJECT REPORT ON MCB BANK LIMITED  Through debit to the customer¶s account. or discharge the liability of a third person incase of his default. Surety. Bank Guarantee: Section 126 of Contract Act 1872. A Contract of guarantee is a contract to perform the promise. Broad Classification: Bank guarantees may be broadly classified under the following heads:          Performance Guarantees Bid Bonds / Tender Deposit Guarantees Shipping Guarantees Guarantees for Advance Payments/ Mobilization Gte Security Deposit Guarantees Guarantees for Payment of Dues/ Court Guarantee Loan Repayment Guarantees Permanent Guarantees Guarantees Expressed in FCY 44 . The person who gives the guarantee is called the Surety/ guarantor.

T. After filling the application form the concerning officer shall fill the telegraphic transfer form. beneficiary advice 5. Issuing branch register Copy 4. the bank persuades the customer to transfer money by drafts and avoid the risk of frauds involves in MT and T. Demand draft can easily be handled whatever amount it has and the money can easily be taken from the bank when it is presented. If the customer has an account with that amount as mentioned in the application form then concerned officer will undertake the following procedure to make the mail transfer complete. The idea behind is to avoid the risk and burden of currency notes in huge quantity. DEMAND DRAFT (DD) Demand draft is just like cheques and issued when the customer wants to take cash with him personally. Then it is sent to the required bank which on receiving it immediately makes the payment to the customer and afterwards the voucher are sent to that bank by ordinary mail. Receiving Branch Register copy 3. Then the above said procedure will be done. TELEGRAPHIC TRANSFER (TT) This type of transfer is simple. In fact. Customer fills the form given by bank.A PROJECT REPORT ON MCB BANK LIMITED REMITTANCE DEPARTMENT Remittance department performs following functions:  Mail Transfer  Demand Drafts (MT) (DD)  Telegraphic Transfer (TT) MAIL TRANSFER (MT) When a customer requests the bank to transfer his money from one branch of bank to another branch of the same bank or from one city to another city to the same bank or any other bank. Draft is only issued when the bank knows customer and bank has the confidence in him 45 . 1. Branch Mail transfer form 2. advice to customer In case where the customer is not account holder of the bank then the customer will have to deposit the amount which he wants to transfer under Mail.

bank has progressed in both aspects. At the end of 2007 MCB Bank Limited was maintaining 3. High Cost. These schemes are a mixture of the above mentioned two types of deposits with an addition of different services & 46 . Cover Advice FOREIGN DEMAND DRAFT Foreign Demand Draft is just like demand draft. Register copy 4. The increase in deposits is also a cause of increase on total number of accounts. one is the duration in which there funds are expected to be with the bank and second is the cost of getting these funds. the customer has to fill an application form. Customer¶s advice 2. 1) Time deposits / liabilities 2) Demand deposits / liabilities And on the basis of the cost to acquire these funds. a deposit can be classified as any one of following three. These deposits are liability of the bank so from point of view of bank we can refer to them as liabilities. TYPES OF DEPOSITS Deposits can be segregated on two bases.e.140 accounts holding 292. It requires foreign exchange and it involves seven forms. The total deposits of MCB are growing since its inauguration but after privatization there is a sharp incline in over all deposits of the bank. the difference between rates of borrowing and lending sets the spread or gross profit. Therefore we can rightly state that deposits are the blood of the bank which causes the body of an institution to get to work. Low Cost & No Cost.A PROJECT REPORT ON MCB BANK LIMITED In case of transfer of money by drafts. Customer¶s debit form 3. Banks has different kinds of deposit schemes in order to induce deposits. The only difference is that a bank issues FDD to the bank of another country. Then the concerned officer fills the following forms: 1. So divide deposits in two classes according to duration of deposits i.098 Million of deposits. DEPOSIT DEPARTMENT Bank deals in money and they are merely mobilizing funds within the economy. which are to be filled. They borrow from one person and lend to another.902.

All deposits and withdrawal from a current a/c takes place only at the branch where the account is being maintained. The current account is the most common account and the most preferred amongst business concerns. The bank reserves the right to allow opening of current a/c at its description. Current Life Account which offers the security of life insurance free of cost. Account holder should take well care of the cheque books issued to them. MCB has a large variety of deposit schemes and some of them are as follows: CURRENT ACCOUNT In this type of accounts the client is allowed to deposit or withdraw money as and when he likes.A PROJECT REPORT ON MCB BANK LIMITED requirements such as minimum balance' requirement. Demand Drafts. The different accounts include: the Basic Banking Account that has no minimum balance. Pay Orders and lots more to meet the day to day business requirements. except by prior agreed agreements with the bank. 10000/= in cash as initial deposit is required for opening a current account and the same may be maintained as minimum average running credit balance. 47 . eligibility for different groups. No profit is paid by the bank moreover. these types of deposits are also exempt from compulsory deduction of Zakat. deposits or withdraws money several times in a day if he likes. Current a/c cannot be overdrawn. deductions. In the similar fashion. Current account enables the client to do cash transactions in a more efficient manner. The account holder can draw sums from his account by means of cheque supplied to him by the bank for that particular account. basis for calculation of profit. thus. the conventional Current Account. In case of a current account the client does not earn any interest. There is also no restriction of amount to be deposited or withdrawn. The theoretical explanation for this would be that they can function more efficiently but since in reality there are no restrictions on any with drawl the only reason we could think of is that current account facilitates online banking which saves time (which in this ultra competitive business world the most precious resource) to a considerable extent. He may. The correspondence relating to current A/Cs should be addressed to manager of the branch where the account is being maintained. Usually this type of account is opened by the businessmen. Business Account offering free online transactions. MCB Bank offers a variety of current accounts to cater to the everyday transactional needs of various customers. No profit is paid on credit balances held in current accounts. mode of transaction. Features A sum of Rs. These accounts ensure ease and freedom to bank from any of the 1100+ branches across the country. and for all others. additional benefits.

There is no limit on the number of transactions you make in a day. The profit/loss will be credited/debited on the basis of its net working results at the end of each half-year. However if declaration of no Zakat deduction is submitted by the account holder then no Zakat deduction is marked on the account. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines. 365 Gold offers profit rate on daily balance while PLS savings has a lower minimum balance requirement. The profit is paid on these accounts on the minimum balance during a month for the whole of that month. SAVINGS ACCOUNT MCB Bank offers a wide array of savings products that suit short term growth & transactional needs.e.e. Savings Xtra is targeted for customers having Rs. two unique products: Smart Savings and Savings Maximizer are special saving accounts run solely via debit cards and other remote banking channels. In addition. 5 million + deposit. This type of account is opened with a minimum deposit of Rs. Calculation of products on PLS saving A/c will be made for each calendar month on the lowest credit balance of an account between the close of business on the 6th day and the last day of the month.A PROJECT REPORT ON MCB BANK LIMITED PAK RUPEE CURRENT ACCOUNT MCB¶s Pak Rupee Current Account offers you the convenience of unlimited withdrawals i. Zakat & other withholding taxes are deducted as per rules of the government. 1000/-. In addition. PLS SAVINGS ACCOUNT This type of account is for those persons who want to make small savings'. access to your funds whenever you want without any notice. Our savings accounts offer attractive profit rates as well as flexibility to transact. you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. 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. Foreign Currency Current Account MCB¶s Foreign Currency Current Account offers you the convenience of unlimited withdrawals i. The bank would be within its rights to make investment of credit balances in the PLS saving accounts in any manner at its sole discretion and to make use of the fund to the best of its judgment in the banking business under the PLS system. 48 . offering a very competitive rate to both high and low end savers. access to your funds whenever you want without any notice.

A PROJECT REPORT ON MCB BANK LIMITED Rules for PLS  Account holder can only withdraw sums from his account by means of cheques supplied to him by the bank for that particular account. If the account holder withdrawals the money under 7 days notices. you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. DOLLAR KHUSHALI ACCOUNT 49 . Japanese Yen or Euro Your foreign currency account is exempted from Zakat and withholding tax KHUSHALI BACHAT ACCOUNT This is an advance form of PLS saving A/c. There is restriction on the number of withdrawals as well. FOREIGN CURRENCY SAVINGS ACCOUNT MCB¶s Foreign Currency Savings Account offers you attractive returns on your Foreign Currency investment. PAK RUPEE SAVINGS ACCOUNT MCB¶s Pak Rupee Savings Account offers you attractive returns on your Pak Rupee investment. US Dollar. Zakat is deducted every year on non-exempted accounts. For making extra transaction customer has to pay service charges that are deducted from customer account. Customer gets the benefits of profit calculation on daily product basis and also free service of standing instructions of paying utility bills and HBFC installments.  The bank reserve to itself the rights to close any account without previous notice any account which has not satisfactory account credit balance. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines.e.  Post dated and stale cheques willl not be paid. However.e. All other rules of saving account are applicable. the profit loss earning products will be computed on the monthly minimum balance. i. in this type of account. up to 4 times in a calendar month. In addition. UK Pound Sterling. You can invest in any of the four currencies i.

With various tenor options available. reference #. date of issue.and in turn he gets the benefits of daily profit calculations and also there is no restriction on the maximum number of withdrawals as was there in the case of KBA. There will be no restriction on withdrawal from the account. However. higher the rate is offered. The instrument term deposit is like a slip containing issuing bank name. This is combined with different profit payout options and the added facility of being able to avail credit facility against their deposits. Today. the product will be ignored. you can open a Dollar Khushali Account at over 200 branches in Pakistan. if balance in the account falls below RS. Profit calculated on daily basis. convenience and security. deal #. profit calculation ignored Profit calculated on daily basis Profit paid on annually basis Zakat deducted on @ 2. customer name. customers can choose one that suits their needs.5% The higher the balance.and above. PAK RUPEE TERM DEPOSIT 50 . There is also another advantage of this scheme that if balance on a particular day falls below the minimum balance then only the product of that day is ignored whereas in KBA.000. PLS 365 GOLD This is a special type of saving account in which customer maintains a minimum balance of Rs. 500. Zakat and withholding Tax is also applicable on the account opened under this scheme. Profit paid into your account every month TERM DEPOSITS Term deposits are fixation of certain amount of money for a specific span of time.on any day.000/.         Minimum balance is Rs.500. if balance falls below the minimum limit then all the products for that month are ignored on in other words no profit is paid for that month. This account is newly developed of MCB and it provides flexibility of saving account to business people. amount.000/. 500.000/= Below minimum balance. 500.A PROJECT REPORT ON MCB BANK LIMITED The Dollar Khushali Account. Profit on deposits will be payable on daily product basis on balance of RS. rate maturity date etc. MCB Term Deposit offer attractive short to mid-term investment options with flexibility. a Dollar based account was introduced in 1993 at selected MCB Bank branches. a/c # to operate on computer.

3 months. This ends in getting a heavy return for the depositor at the end of tenor for his small savings. Different profit rates are applied to different type of TDRs. 1000/. 2 years. 1 year. MCB FOREIGN CURRENCY TERM DEPOSIT MCB Foreign Currency Term Deposit gives a higher rate of return. These are in the form of receipts and profit on these receipts is paid biannually. KHANUM BACHAT SCHEME This is a type of term deposit. 4 years and 5 year term deposits. A saving account where not only customer gets a competitive return but also enjoys a unlimited numbers of fringe benefits. The distinctive feature of this product is that profit is calculated on monthly basis and charged to account on end of each half /ear. So we can say that in this type of account there is a concept of accumulated profits on profit.A PROJECT REPORT ON MCB BANK LIMITED MCB Pak Rupee Term Deposit gives a higher rate of return. These receipts are encashable after expiry of the period for which they were issued. 3 months. 1 year. This product was actually introduced to promote saving habits in the people. 4 years and 5 year term deposits. however ATM card is issued by which customer can make transaction. After the expiry of term. An important feature is to maintain a specific amount of balance in the account as decided or informed by the management to get desired profit. 6 months. in this type of deposit an account is deposited and monthly payments of Rs. But in this account no cheque book is issued. TERM DEPOSIT RECEIPTS This is a type of term deposit in which a receipt is issued for varying tenors ranging from 1 month to 5 years or more. 3 years. he receives his funds along with profit for the tenor. It gives you choice of 1 month. Under this deposit scheme.. Then profit is also calculated on that amount of profit which is credited to the customer's account. 3 years. MCB SMART SAVINGS ACCOUNT: MCB Smart Savings Accounts gives the optimum value. It gives the choice of 1 month. Zakat and withholding taxes are deducted as per rules only at the time of maturity while making payment to the customer. a deposit is received from the depositor under the condition that he will intimate the bank before a certain period in case of withdrawals. MAIN FUNCTIONS OF DEPOSIT DEPARTMENT 51 . 6 months. 2 years.are made by the account holder in this account for a minimum of 10 years.

in small and medium size branches. There are now more than 1100 branches linked through this system and they can transact with each other directly using computer systems at their own branches. therefore the nature of relation between a banker and customer is of a contractual one and all the conditions applicable to this contract act are also applicable. the need for a technology department at each branch is growing. Now a day. There are more than 1127 branches of MCB all over Pakistan and out of these more than 1100 branches are fully computerized Almost all . The profit provisions for each type of deposits are also calculated on monthly basis by the same department in order to calculate the net profit or loss position of the branch. The products for each deposit scheme are calculated separately and added till the end of 6 month period. a computer division is working in each city to provide service to ad the branches of that area. Then the sum total of these products is multiplied with the respective profit rates which are issued by the Head Office at the end of each half yearly closing. However. the accountant performs the book keeping duties for all kinds of ledgers. 52 . Local banks have also realized the gravity oil this situation and are striving to add computerized systems to their branches MCB is ahead of all other local banks in this field and now it is in a position to even compete with foreign banks. therefore. MCB has also introduced the now concept of online banking. TECHNOLOGY DEPARTMENT Technological advancements are also affecting the banking industry. Now customers do not have to wait long for their transactions and can operate their account through all the online branches.the branches of MCB are computerized. The foreign banks have a competitive edge over all local banks in their technologies' advancements and automated systems. The Deposit Department handles the account opening.A PROJECT REPORT ON MCB BANK LIMITED This was a brief review of different types of deposit schemes. profit payment and accounting of all types of deposit schemes. Accounting Entries: Accounting entries are also made in the respective books of account by this department. Profit payment & calculation: Profit payment & calculation is done in accordance with the rules of each type of deposit scheme-by the deposit department. Account Opening Account opening is an agreement in which customer offers his funds and bank accepts these funds.

MCB Mobile is a quick easy and secure way to recharge mobile phones. MCB ATMs give you a 24-hours convenience of cash withdrawal. Visit the nearest MCB ATM or call 111-000-622 to register and logon to www.A PROJECT REPORT ON MCB BANK LIMITED ATM NETWORK ATM stands for Automatic Teller Machine. mobile top-ups. MCB has one of the nation¶s largest ATM networks with 500 ATMs covering 110 cities across the country and still growing. Gold Cards are special cars with maximum withdrawal limit of Rs. Gold and Platinum Visa Credit Cards focusing on providing. 53 .in a day. superior services. which makes variable mark-up rate available to customers allowing them to repay at affordable rates. transfer money. confirming balances and requesting statements / cheque books.mcbmobile. 300/. In this system all the machines are linked to central banking host at IRM division Karachi through either satellite or telephone controller. A person can withdraw from any machine across Pakistan with having an account in only one branch of MCB. These machines are basically used for taking cash. This was only possible with the help of online system. These cards are issued to the persons having more than Rs. This contract will enable an ATM card holder to use his account even when he is out of country at all the ATMs where Cirrus logo is displayed. Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard. utility bill payments. 10. It offers other value added services that include a portfolio of ebanking and payment system products as well as management and day-to-day operations of the same. travel privileges & shopping pleasure.in a day. The annual fee for this card is Rs. These unique features include i-revolve. International Cards are issued in collaboration with Cirrus and are useable all over the world with maximum withdrawal facility according to the standards of Cirrus. 25000/. This system identifies the card holder and his PIN Number.000/. It also offers comprehensive insurance & installment plans. mini-statement. Members include 10 local and foreign financial institutions enjoying ATM sharing and value added services. This machine is used to transact in one's account without intervention of humans. pay bills and do much more. Green Cards are ordinary cards with a maximum withdrawal facility of Rs. ATMs are operated through a card issued to the valued customers and by application of Personal Identification Number (PIN number).only.com using your mobile phone to start transacting. reward points and SMS alerts that give a different feel to the world of credit cards. MNET is an electronic inter-bank connectivity platform for online transactions on ATM and other remote banking channels. funds transfer services and much more.as their average balance. MCB offers a complete suite of Classic. 500000/.

two unique products: Smart Savings and Savings Maximizer are special saving accounts run solely via debit cards and other remote banking channels. Pay Orders and lots more to meet the day to day business requirements. MCB ONLINE BANKING MCB has a fast growing network of 1100+ online branches in the country providing customers real-time online transaction facilities. In addition. These accounts ensure ease and freedom to bank from any of the 1100+ branches across the country. Savings Xtra is targeted for customers having Rs. Our savings accounts offer attractive profit rates as well as flexibility to transact. customers can choose one that suits their needs. Business Account offering free online transactions. The different accounts include: the Basic Banking Account that has no minimum balance. With various tenor options available. Demand Drafts. convenience and security.A PROJECT REPORT ON MCB BANK LIMITED PRODUCTS AND SERVICES CURRENT ACCOUNT MCB Bank offers a variety of current accounts to cater to the everyday transactional needs of various customers. Members include 10 local and foreign financial institutions enjoying ATM sharing and value added services. offering a very competitive rate to both high and low end savers. 365 Gold offers profit rate on daily balance while PLS savings has a lower minimum balance requirement. TERM DEPOSIT MCB Term Deposit offer attractive short to mid-term investment options with flexibility. the conventional Current Account. It offers other value added services that include a portfolio of ebanking and payment system products as well as management and day-to-day operations of the same. MCB MNET MNET is an electronic inter-bank connectivity platform for online transactions on ATM and other remote banking channels. This is combined with different profit payout options and the added facility of being able to avail credit facility against their deposits. 5 million + deposit. MCB CASH MANAGEMENT 54 . Current Life Account which offers the security of life insurance free of cost. and for all others. SAVINGS ACCOUNT MCB Bank offers a wide array of savings products that suit short term growth & transactional needs.

a product for small banks and financial institutions to use our vast branch network platform to make payments in areas where their own branch network does not exist. supported by real-time MIS. MCB BUSINESS SARMAYA 55 . MCB PYARA GHAR Some destinations require a long wait. Money Gram and May bank Money Express Malaysia. MCB HOME REMITTANCE MCB Home Remittance provides a seamless inflow of foreign remittances credited in the beneficiary¶s account within minutes. Take that much-needed holiday. MCB CHANNEL FINANCING MCB Channel Financing provides working capital facilities to dealers and vendors of selected companies under a structured product program. Our structured and customized products enable our customers to realize their sales proceeds swiftly from all over the country. Having your own home was never so easy. But with MCB Pyara Ghar it is now easy to step into your home and start living a real life. thus extending their reach nationwide. MCB LOCAL RUPEE DRAWING ARRANGEMENT Transaction Banking Department at MCB.A PROJECT REPORT ON MCB BANK LIMITED Cash Management provides a wide range of value added services to large corporations through its vast network of online branches. provides Local Rupee Drawing Arrangement. Buy a car. Refurnish your house. Like waiting for a home of your own. Finance a better education for your children. along with cash payments from other correspondents from all over the world under the brand name of MCB Fast & Easy. Samba (Speed Cash Now). EASY PERSONAL LOAN MCB Easy Personal Loan provides you with the financial advantage to do things you've always wanted to but never had the sufficient funds for. This product enables our customer¶s dealers to leverage themselves and increase their business capacity with their respective business partners. Renovate or Construct your home the way you have always wanted. MCB Pyara Ghar is an ideal Home Finance from your own bank that lets you Purchase. Cash payments can also be made at our designated branches on behalf of Xpress Money. Cash Management also provides payment solutions through MCB network and through third parties and customized solutions for dividend payouts. Purchase a new TV.

MCB¶s Islamic Banking products are 56 . risks are allocated amongst various stakeholders. and there is limited or no recourse to the sponsors. lawyers and professional commercial bankers. including working capital loans. MCB CORPORATE FINANCING MCB Corporate Financing provides access to diversified financing options.A PROJECT REPORT ON MCB BANK LIMITED ³MCB Business Sarmaya´ is the best Running Finance facility against your residential property which empowers you to manage your business dealings better. trade finance services and investment banking. where the loan is tightly structured around the cash flows. subordinated or with a potential equity upside. MCB Islamic Banking provides Riba Free and Shariah Compliant products and services both on the liability and asset side of the statement of financial position to various customers of all demographic segments with its presence in a growing number of cities. through initial public offers. MCB QUASI EQUITY/HYBRID INSTRUMENTS MCB Quasi Equity/Hybrid Instruments structure and place a category of debt that has some characteristics of equity such as being unsecured. commercial structuring support and access to capital resources to help companies successfully finance their business/project. So act today and get MCB Business Sarmaya and thus improve your business. MCB EQUITY CAPITAL RAISING MCB Equity Capital Raising relates to raising capital for our clients by offering common or preferred equity to public or private investors. term loans. usually in an SPV structure. offers for sale. MCB PROJECT & STRUCTURED FINANCE MCB Project & Structured Finance involves financing complex projects. MCB SYNDICATED LOANS AND DEBT CAPITAL MARKETS MCB Syndicated Loans and Debt Capital Markets involve arrangement. underwriting and placement services for significant financing requirements by large corporate and institutional clients to other financial institutions or through the debt capital markets. MCB ADVISORY SERVICES Financial and Capital Raising Advisory provides our clients with financial advisory services. MCB ISLAMIC BANKING With the help of Shariah specialists. with absolute satisfaction of cash flows. rights issues and private equity placements. avail lucrative opportunities and expand your business.

MCB AGRI PRODUCTS MCB is committed to the farming community to support their national objectives of self sufficiency & food security to the people of Pakistan.A PROJECT REPORT ON MCB BANK LIMITED available to cater the need of Working Capital. MCB PRIVILEGE A first from a local bank. world class Privilege Centers offers a higher level of personalized services. is posted in lending branches to cater for strong business relationships & facilitation. It also offers comprehensive insurance & installment plans. encompassing both crop & non crop sectors. Gold and Platinum Visa Credit Cards focusing on providing. International/Local trade and consumer¶s requirements. MCB VISA CREDIT CARD MCB offers a complete suite of Classic. We can suggest the products most suited for your needs. which makes variable mark-up rate available to customers allowing them to repay at affordable rates. MCB Privilege through its dedicated. Salary Club provides the convenience of having an extensive range of financial services available to employees at their place of work. MCB CAR4U 57 . Islamabad and Multan. Capital Expenditures. The bank¶s extensive branch network in all the provinces and diversified product range extends our reach of agri credit facilities to farmers engaged in any type of activity. MCB SALARY CLUB A payroll solution designed to make life easy. Dedicated and specialized staff. it simplifies all the monthly payroll related banking needs of employers and opens the door to a world of special offers for employees. These unique features include i-revolve. supervised by the Agri Credit Division. travel privileges & shopping pleasure. or work with you to create a personalized solution completely focused on your expectations of the capital markets. superior services. customers experience unparalleled advantages that put them ahead of others. more rewarding in-branch experiences and a wide array of deposit and investment products that are tailored to meet the financial expectations of our affluent clientele. reward points and SMS alerts that give a different feel to the world of credit cards. with plans to expand to more locations. Lahore. MCB¶s dedicated Privilege Centers await to welcome you in Karachi. As members of MCB Privilege. MCB Investment Services offer distribution of mutual funds managed by the leading fund managers of Pakistan. MCB INVESTMENT SERVICES Make the most of your wealth with investment opportunities that match your unique financial aspirations.

MCB SMS BANKING 58 . mini-statement. MCB ATMs give you a 24-hours convenience of cash withdrawal. MCB ATMS MCB has one of the nation¶s largest ATM networks with 500 ATMs covering 110 cities across the country and still growing. It enables you to withdraw cash from ATMs across Pakistan and around the world. you can get a loan instantly at any MCB branch against liquid collateral at competitive pricing. MCB INSTANT FINANCE With MCB Instant Finance. MCB RUPEE TRAVELERS CHEQUE MCB Rupee Travelers Cheque is the best and safest alternate way of carrying cash. transfer funds. fairs or any other occasion/special event. easy processing and above all.A PROJECT REPORT ON MCB BANK LIMITED MCB Car4U not only gets you a car of your own choice but is also affordable with competitive mark-up. It can be used by travelers. Unlike other modes of fund/remittance transfer which can only be drawn at a particular branch and can be encashed only at that branch. mobile top-ups. Lockers of different capacities are available nationwide. no hidden costs. utility bill payments. funds transfer services and much more. It is a safe and secure way to make payments because it gives the purchaser security that even if the cheque is lost it can be refunded. pay utility and mobile bills and register for mobile and virtual banking services. MCB MOBILE ATM Through our MCB Mobile ATM we allow for convenient world class banking services. be it concerts. MCB LOCKERS MCB Lockers are the best protection for your valuables. MCB SMART CARD MCB Smart Card opens the opportunity to have access to your funds via multiple banking channels. Our innovative MCB Mobile ATM van ensures that we offer our services wherever you are. flexible conditions. businessmen or by the general public in meeting their day to day cash requirements while they travel. MCB Rupee Travelers Cheque can be encashed at any of our branches across the nation.

Visit the nearest MCB ATM or call 111-000-622 to register and logon to www. download account statement and much more. MCB FULL-DAY BANKING Enjoy the convenience of extended banking hours from 9am to 5pm. Most importantly it provides you with our very own banking consultant to discuss your financial needs and requirements.A PROJECT REPORT ON MCB BANK LIMITED With MCB SMS Banking. This service allows you to transfer funds. pay utility/mobile bills. pay utility/mobile phone & MCB Visa Credit Card bills. including Saturdays at MCB Full-Day Banking branches across the country.com using your mobile phone to start transacting. Simply call at 111-000-622 and we¶ll do the rest. transfer money within MCB network accounts and register complaints.mcbmobile. MCB VIRTUAL BANKING MCB Virtual Banking Service is a convenient way to access your account(s) 24/7. pay bills and do much more. transfer money. 59 . MCB CALL CENTRE The simplest way to bank is with the new enhanced 24/7 MCB Call Centre. confirm account balances & view last 5 transactions. you can bank on your fingertips. top up your mobile. which blends innovation and convenience to provide banking services that go beyond expectations. It is secure. MCB BANCASSURANCE Combining the best of banking and insurance solutions. MCB Bancassurance has a plan for you. MCB Bancassurance has created a onestop shop for all your financial and insurance needs. Once you¶re registered onto the service you can SMS anytime to get account information. Whether you want to save for your child¶s education or marriage. for the security of dignity after retirement or gaining maximum return on savings. set up standing order instruction. You can also buy instant insurance coverage through your mobile without any medical assessment. MCB Call Centre enables you to manage your VISA Credit & ATM/Debit Cards. free of cost and lets you do your banking whenever and wherever. MCB MOBILE MCB Mobile is a quick easy and secure way to recharge mobile phones.


569 4.014. The quantity of information available from the financial statements can be quite inundating. therefore. provides an insight into the institution¶s operations carried out in the year 2009-2010.net of provision Operating fixed assets 45. MCB is the only financial institution from Pakistan that is listed on the London Stock Exchange.134. Analysis of the financial statements of a company reveals important information to its stakeholders thereby leading them to make inferences about its financial condition and attractiveness as an investment. regulators and other stakeholders of a firm to assess its past and future performance.183 1. Muslim Commercial Bank (MCB) is Pakistan¶s largest private bank by assets and market capitalization.060.249.896 61 2009 .540 38.774.993 3.589 20.000. as extracted from its 2010 annual report. creditors.401. managers. With its 65 year history.407 18.407.009. Financial statement users.465 253. adopt ratio analysis to counter this burden of information overload and get an accurate picture of the firm performance.000 167.882 254.A PROJECT REPORT ON MCB BANK LIMITED FINANCIAL ANALYSIS Financial statements are a source of information for customers. BALANCE SHEET MUSLIM COMMERTIAL BANK LIMITED Balance Sheet Figures In ³000´ 2010 Assets Cash and balances with treasury banks Balances with other banks Lending to financial institution Investments Advances.947. MCB has depicted a tremendous growth record and is listed on all stock exchanges in Pakistan with a significant market capitalization The financial information of MCB.478.781 213.871 6.551. employees.

371.414.932 8.385.348.740.162.604.090 44.711 ----------27.088 367.727 Liabilities against assets subject to finance -----lease Other liabilities Deferred tax liability Total Net Assets Presented By Share capital Reserves Unappropriated profit Total Equity Surplus on revaluation of asset Total 7.714 69.198 79.61 23.040.911.223.075.209 3.069 -----567.201.743 15.537 25.662.937 -----8.204.602.593 431.760 15.180.483.934.955 69.127 61.045 38.664.024.552.196.095 -----509.081 69.740.209 4.011 10.265.684.705.404 79.779.092.819.319 488.013 6.150 40.A PROJECT REPORT ON MCB BANK LIMITED Other assets Deferred tax assets Total Liabilities Bills payable Borrowings Deposits and other accounts Sub-ordinate loans 10.204.018 16.906 21.082 439.013 62 .

616.456.322.796.527 1.364 Net mark up/interest income after provision NON MARKUP/INTEREST INCOME Fee .834 543.680 6.476 2009 51.741 341.821.885 34.948 773.026 5.594 444.249 NON MARKUP / INTEREST EXPENSES 63 .265.402 612.322 35.117 41.129.833.455.576 7.236.A PROJECT REPORT ON MCB BANK LIMITED INCOME STATEMENT MUSLIM COMMERTIAL BANK LIMITED INCOME STATEMENT FIGURES Amount in ³000´ 2010 Markup/Return/Interest earned Markup/Return/Interest Expensed Net markup/interest Income Provision against non-performing loans & advances Reversal of provision against diminution in value of investment Bad debts written off directly 54.412 4.597.837.987. commission and brokerage income Income / gain on sale of securities Dividend income Income from dealing in foreign currencies Other income Total non markup / interest income 33.306 39.321 28.529 3.501.484.346 547.685 5.540 411.296 17.778.642.767 36.768 459.718 3.218 632.007 15.047 3.

569 7.027.659.710.193.440 13.175 15.173.current -prior years .226) 2.643 -----26.A PROJECT REPORT ON MCB BANK LIMITED Administrative expenses Other provisions / write offs Other charges Total Non mark up / interest expenses Extra ordinary / unusual item PROFIT BEFORE TAXATION Taxation .154.656 24.297 9.261 986.094 7.352.379.248.467 9.900 PROFIT AFTER TAXATION Equity holders of the bank Minority interest 16.075 -----23.188.779.873.305 (2.945 64 .127 21.953 12.253.942 88.433 -----1.800.332 22.674.495.703.324 9.deferred 8.232.919 Profit available for appropriation 32.648 15.215.792 15.

176 3.477 (30.210.551.906) 25.A PROJECT REPORT ON MCB BANK LIMITED CASH FLOW STATEMENT MUSLIM COMMERTIAL BANK LIMITED Consolidated Cash Flow Statement In ³000´ 2010 CASH FLOW FROM OPERATING ACTIVITIES Profit before taxation Less.204 909.169 Adjustment for non±cash charges:: Depreciation /Adjustments Provision against diminution in the value of investments ± net Provision against loans and advances ± net Amortization Provision against other assets ± net Bad debts written off directly Operating fixed assets written off Gain on disposal of fixed assets ± net 1.100.086) 65 2009 23.012.709.527 153.253.781) -----(4.352 88.876 31.823) (2.695.067 (Increase) /decrease in operating assets Lendings to financial institutions Net investments in µheld for trading¶ securities Loans and advances Other assets -net (1.614) 8.741) 22.945 (459.960 (3.347) 1.416.154.218 5.161 444.047 -----(15.514.841.476 3.079 94.401.471 1.454.576 17.075 (543. Dividend income and share of profit of associated and joint venture companies 41.080 .261 52.898 30.246.796.993) 4.594 160.397 142.484.

998.635 Income tax paid-net NET CASH FLOW FROM OPERATING ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES Net investments in µavailable for sale¶ securities Net investments in µheld to maturity¶ securities Investment in subsidiary company Dividends received Investments in operating fixed assets Sale proceeds of property and equipment disposed off NET CASH FLOW FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Dividend paid NET CASH FLOW FROM FINANCING ACTIVITIES Exchange differences on translation of the net investment in foreign branches Increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Effects of exchange rate changes on cash and cash equivalents (70.519 70.064.735.554) (72.248 (2.693 (47.986) 93.657.528 (6.445) 3.341 47.102.226 (18.369.358.701.603) 78.767.510) (6.181 (1.100.445) (11.056.350.641.735.378 (6.592 43.369.495) 2.579 641.515.474) 58.447 1.429.317.828 2.725.977.465 1.720 (84.788 (2.148.A PROJECT REPORT ON MCB BANK LIMITED (8.317.251) 33.481) 50.445) (8.336 59.951) Increase/(decrease) in operating liabilities Deposits and other accounts Borrowing from financial institutions Bills payable Other liabilities-net 63.476 82.107 (394) 446.129 66 .032.241 (48.082 826.572.161 (2.913) .893.303.139) 570.445.567.510) 67.122.465.910.350.888 44.685 (4.378) 21.547) 89.092 (70.110.

272 44.864 Cash and cash equivalents at the end of year 46.332 Total 52.277.2 97 67.244.29 7 15.495.885.702.752 43.465 ------ ------ ------ 15.69 2) (1.277) -----(1. 2009 Profit after taxation for -----the year ended December 31.282.784.77 3) 67 .A PROJECT REPORT ON MCB BANK LIMITED 44.277 December 2008 Final cash dividend ± -----December 2008 Interim cash dividend ± -----March 2009 Interim cash dividend ± -----June 2009 Share Exchange Statutory premium translation reserve reserve 9.570.562.324 -------------------------- 1.193.781 ) (1.768 31.528 (Rupees in µ000) 188.600. 2008 Changes in equity for 2009 Profit after taxation for -----the year ended December 31.495. 2010 Capital Reserves Revenue Reserves Share capital Balance as at December 6.727.686 8.773 (1.465 ------ ------ ------ 15.551 General reserve 18.530 -----) (628.727.0 00 ------ Unappro priated paid 9.530 --------------------- -------------------------- -------------------------- (1.324 22.495.7 62 ------ ------ ------ ------ 22.78 1) 1.784.8 65 15.727. 2009 Total comprehensive -----income for the year ended December 31.674.727. 2009 Transferred from surplus -----on revaluation of fixed assets to unappropriated profit ± net of tax Transferred to statutory -----reserve Issue of bonus shares ± 628.29 7 ------ ------ ------ ------ 67.549.549.570.864 STATEMENT OF CHANGES IN EQUITY MUSLIM COMMERTIAL BANK LIMITED Statement of Changes in Equity For the year ended December 31.692 ) (1.

792 21.600.280.600.081 -----18.A PROJECT REPORT ON MCB BANK LIMITED Interim cash dividend ± -----September 2009 Balance as at December 691.318 -------------------------11.702.645 ) 21.64 5) 69.528 -----9.727. 2010 -----9.280. 2010 Transferred from surplus -----on revaluation of fixed assets to unappropriated profit ± net of tax Transferred to statutory -----reserve Issue of bonus shares ± 691.528 -----9. 2010 Exchange differences on -----translation of net investment in foreign branches Total comprehensive -----income for the year ended December 31.514.9 32 16.773 ) 15.0 00 -----(1.873.873.873.549 ) (2.414.1 75 89.318 -----) (691.418.17 5 16.900.075.602.645 ) (2.105 31.418.792 ------------------------------9.95 5 (2.0 00 (1.64 5) (2.528 ------------------------------345.702.0 11 68 .280.979 1.828 ------ ------ ------ ------ 89.105 December 2009 Final cash dividend ± -----December 2009 Interim cash dividend ± -----March 2010 Interim cash dividend ± -----June 2010 Interim cash dividend ± -----September 2010 Balance as at December 7.828 ------ ------ ------ 89. 2009 Changes in equity for 2010 Profit after taxation for -----the year ended December 31.180.827.77 3) 61.399 ------------------------------18.150 31.54 9) (2.779.828 ------ ------ 16.900.17 5 (1.12 7 16.87 7) (1.687.280.877 ) (1.702.105) -----(2.963.727.0 03 ------ ------ ------ ------ 21.687.

 Has established a good reputation in the banking market  Strict adherence with the banking procedures requirements. SBP¶s prudential regulation requirements and its SROs and international banking requirement as well as to its own set policies  Strong and its attractive products  Better focus on customer services and customization  Flexibility with the changing environment  Induction of the highly qualified professionals to change overall set up WEAKNESSES The noted weaknesses of MCB are as:  The majority of people are not well aware about the products of MCB. marketing.A PROJECT REPORT ON MCB BANK LIMITED SWOT ANALYSIS STRENGTHS The strengths of MCB are as:  MCB is the first Pakistani privatized bank and because of its quality management. innovation in products and services is performing well in financial market. rich and educated people and the poor looking customers feel some bit strange in the environment of the bank. the bank official time of closing is 5:30pm but due mismanaging of time allocation and work the staff is normally on their seats till 7:00 or 8:00 clock.  Therefore it should advertise extensively especially RTC and Master Cards.  Process of development is bit slowly due to its conservative approach  Never prefer to be a leader and prefer to be a follower of others  Slow improvement and acceptance of technological changes  More emphasis on deposit accumulation and less on their mobilization OPPORTUNITIES 69 . The bank should concentrate upon increasing its abilities on individual service basis. The bank employees should try to accommodate behaviorally all type of customers.  Mismanagement of time is another big mistake in MCB branches.  A behavior has been noted that bank tries to feel at ease with good looking.  In MCB there is lack of specialized skill because of job rotation policy of human resource department.

Introduction and adoption of information technology as well as promotion of the computer culture by the local as well as foreign banks will definitely affect the services and business of the MCB.A PROJECT REPORT ON MCB BANK LIMITED  Greater potential and opportunities for Credit Division if Liberal Policies being adopted. Otherwise he will be out the market.  Introduction of credit marketing by local and foreign banks is badly affecting the mobilization of the MCB¶s deposits due to the non presence of such department in it.  More mobilization of accumulated deposit is possible through innovative financing to Agro Based Sector Leasing Personalized Financing THREATS  Change in government policies has affected the banking business. 70 . remittances and forex department through effective promotional and liberal policies. So to exist one will have to prove himself in its services through excellent management and will have to satisfy its shareholders. Still banks have to wait to get permission of state bank.  Inclusion of highly qualified professional can change the whole scenario and position of the bank if they have given the due liberty in performing their duties.  Can grab more market share for its RTCs.  Adoption of information technology will improve the customer services. The freezing of foreign currency accounts is a vital example of letting people not to trust on banks.  Employees unions have been allowed if not managed properly can affect performance.  The Competition has become severe by the entrants of so many banks.  The decrease purchasing power of consumer in the current economic situation of the country affecting the business activity speed too much and the result is the low investment from the investors in new projects can create problem for the bank because it is working a lot in trade.


Same situation is hoped to prevail.  Inadequate Empowerment is also a usual problem in our organization as every person want to get more power hence there is less delegation of authority and decision making. Associations are being allowed to work effectively which can affect the performance of the company both positively or negatively. lack of good governance and lack of good infrastructure helps creditor to cheat and heavy bad debts occur.  Declining work ethics is also our problem which is mainly due to poverty. 72 .  Value of rupee is decreasing which is pressurizing the economy.  Unions.  Staff cost is increasing as basic wage rate has increased and inflation has compelled to will compel to increase salaries.  Due to lack of confidence on government investor is reluctant so mobilization of funds is going to decrease. SOCIAL AND CULTURAL  Lack of experts is in our country regarding management hence innovative activities are slow and conventional methods are adopted. TECHNICAL  MCB has computerized its most of the branches but still some are manual there is need to computerized otherwise customers will get bad image.A PROJECT REPORT ON MCB BANK LIMITED PEST ANALYSIS POLITICAL  Employment practices are expected to change. lack of training.  Inadequate Accountability. ECONOMIC  Inflation is very high which will decrease the demand as purchasing power is decreasing.  Interest rate is increasing so loan taking has decreased.  Cultural strain to savings is the reason due to which investment remains low .  Operating costs are increasing due to inflation.  Political interference regarding policies is expected to increase as current government is in race of power gain.

73 . But MCB will have to improve its computerized technology as some fake transactions occur by ATM.A PROJECT REPORT ON MCB BANK LIMITED  Now a days computerized system is used by banks whis is very effective. MCB will have to follow it.  Shortage of electricity is a big problem.  Employees of each organization need IT training and organization has this trend.

 There is a criticism on the banking management that the salaries raise of the employees are not significant over the years as compared to other banks. an APEC body of the SAARC region. The maintenance of the discount rates is the key factor to curtail the inflationary pressure on the cost of credit. The controlling body is responsible for the productive performance of the Bank. Effectiveness of the Bank¶s risk management systems. We are hopeful. given the increasing foreign reserves and reviving investor confidence. control on war on terror. And I think this will shake the confidence and working habit of the employees.  MCB is also listed as one of the top 25 listed companies acknowledged by the Karachi Stock Exchange. Following are my observation and suggestion to improve the efficiency for the development of the bank. capitalization on low cost liability franchise. the economic conditions will be comfortably better than 2010. Its deposits are growing day by day and so its profitability. Corporate Awards and Recognition During the year. Infrastructural developments. the Annual Report of the Bank for the year 2009 won:  Accountants of Pakistan and the Institute of Cost and Management Accountants of Pakistan. 74 . trim in the political instability and the sustainability of the tax reforms in order to meet the international debt are the likely factors of focus in the upcoming year. From the Bank¶s perspective the focus will be provision of value added services via operational expansion and technological improvements. We will strive to enhance our domestic as well as global image to take the Bank from strong to stronger. disciplined expense growth. RECOMMENDATIONS From the Quantum of the profit and its financial data it can be easily judged that after privatization. power shortage mitigation.  ³Certificate of Merit Award´ in the Banking Sector subject to Prudential Supervision category.A PROJECT REPORT ON MCB BANK LIMITED FUTURE OUTLOOK The effectiveness of the economic reforms will continue to be the main concern in 2011 as the country is highly volatile with respect to the systematic risks. by the South Asia  Federation of Accountants (SAFA). MCB is performing well. encouraging the private sector. expansion of our capital base and strengthened compliance culture are primary factors in depicting continued strong financial soundness. The pace of the growth of loan infection is likely to reduce in the coming quarters. Effective leadership with a clear vision is the key element of long term sustainability leading to highest levels of employee satisfaction and our aim is to build cohesive teams and strong ethical standards.

A PROJECT REPORT ON MCB BANK LIMITED  There is another recommendation about the bank that there is no proper timing of the bank and there is made an unnecessary delay in the banking transactions. induction and training of outgoing officers constitutes to beat till another officer should ready prove this work. furniture and staff dressing should be according to the modern banking style. Staff turnover particularly of trained staff result in financial and other losses. Recruitments should be strictly on merit basis and induction should be after proper and extensive training. Refresher Courses for the staff are most important in any international organization. All the employees should have these courses according to their requirement. The promotion policy should be adjusted.            75 . equipment. As such system should be designed that every employee who has some problems with his officers can communicate it to the higher management and some steps must be taken to improve that. Working environment. Most of the bank employees. which might not be a good sign for the bank from future prosperity point of view. Foreign branches should be opened in order to capture the international market and to earn international repute for the bank. The exodus of bank officer in the past has worsened the situation. In my opinion all the employees should have regular job experience all out-look towards banking. Foreign experts can also be called for this purpose. Bank should adopt the global organizational banking structure to meet the international standards of banking sector. qualified and energetic staff. are sticking to one seat only with the result that they become master of one particular job and loose their grip on other banking operation. Old and lazy staff should be replaced by young. Proper attention should be paid to upgrade customer services. The amount spent by the bank on employment. Bank should give some more incentive to its employees in order to remove the conflict between lower and higher officers and should try to improve the working condition of the bank.

More training and development programs should be launched in order to clear the concepts of employees about new products and banking techniques. A research cell should continuously try to gather information about the present action of its competitors and their expected future actions.A PROJECT REPORT ON MCB BANK LIMITED CONCLUSION As I have studied and analyzed MCB Bank Ltd I found out that this a good bank as its working. MCB Bank made heavy investments. Then the first-degree competitors should be watched closely. towards enhancing its capabilities in the area of automation and technology. MCB Bank limited should become specific about its competitors. and from the analysis of previous year I concluded that it is improving and in 2008 profits are more than the previous year. ³A happy employee deliver more than he receive from organization´. include ATM network etc shows that MCB Bank is taking good care of their customers. MCB is providing their customers with wide range of services including online banking. management is concerned. so that it can understand who its competitor is in the first degree and who is in the second degree. So I can say that MCB Bank is performing very well. MCB is well positioned to meet client needs. In this way consciousness about the bank¶s financial matters will tend to improve. MCB should continuously conduct its financial analysis and compare it with that of other banks. During my stay at Bank MCB I have observed that some people are over burdened and some people used to sit idle for most of their working hours. And from the financial and when I conduct comparative analysis with other banks I found that it is somewhat better than others. As system failure is encountered often. So in this way more effective strategies can be formulated. 76 . The performance reward linkages should be made strong as it said. New marketing strategies should be developed to attract customers. First of all the reason of this is that there is no directive style in the management of MCB and which shows that there is decentralization in the Bank and every branch manager can take decision according to the situation. The bank should improve its online transaction system and intranet. There should be work load analysis for all employees and work load should be distributed respectively keeping in view the capacities and capabilities of employees. with improved competitive advantage. virtual banking and some of their new products in the pipeline.

org.pk/ 77 .pk/ www.com.com. wikipedia.mcb.asp www.org/wiki/MCB_Bank_Limited www.pk/locators/mnet.A PROJECT REPORT ON MCB BANK LIMITED REFRENCES       Annual report 2010 Visiting different branches of MCB www.mcb.sbp.

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