Title Page :

MCB Bank Limited

University Road Branch (1188)

The name of the internee

M. Khurram Shehzad
Student ID
mc070400688
Session
2007-2010
Submission date of the internship report
30-07-2010
Name of the University

VIRTUAL UNIVERSITY OF PAKISTAN

VU logo

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 Internship certificate

Dedication

I dedicate this internship report to my parents. Because of their prayers and

encouragement I have been able to complete this report. Praise is to Allah, the most Gracious
and Merciful, who blessed me with the knowledge and wisdom and enabled me to overcome
this task. Heartiest gratitude to my parents without their continuous encouragement and love I
could not have accomplished this task.

Acknowledgement

By the Grace of Almighty ALLAH, The most Merciful, The most Beneficial.
Second I would like to thank my parents who supported me. Today I submitted my internship
report at the end of my working experience with Muslim Commercial Bank Ltd provide me
the opportunity to learn new skills, concepts and other working related to my course.
I would like to thank branch manager Mr. Zafar-ul-Haq Bhatti, supervisors and
all the staff of the bank who helped me during my internship. My heartiest thanks to instructor
, all teachers and Virtual University of Pakistan. At the end I would like to thank all my
family members, friends and colleagues who supported me in the preparation of internship
report.

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Executive summary

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid
foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of
which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide and a network
of over 12 banks on the MNET ATM Switch.
MCB operations continued to be streamlined with focus on rationalization of expenses, re-
alignment of back-end processing to increase productivity, enhancement of customer service
standards, process efficiency and controls. The Bank has taken the lead in introducing the
innovative concept of centralizing Trade Services in the country by providing centralized
foreign trade services to branches with a view to improve efficiency, expertise and reduce
delivery cost.
During my internship in MCB I worked in Remittances, Advances, Foreign Exchange and
Customer Service Office department and I successfully completed all the task/duties that were
assigned to me.
During the course of internship I learned about different functions performed by Remittances,
Advances, Foreign Exchange and Customer Service Office department and bank as a whole. I
also learned bank’s correspondence with their customers and within branches.

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 Table of contents
Contents Page No.
Overview of the organization 7
Company Description 11
Nature of the organization 14
Product line 16
Product and services of MCB 17
MCB Bank Ltd Competitive Strategies 23
Organizational structure 26
Organizational Hierarchy 26
Introduction of all the Departments of MCB Bank 29
Training Program 46
Work done by me during internship 50
Structure of the Marketing Department 52
Departmental hierarchy 52
Structure of the Sales Department 64
Sales Mythology 65
Types of Selling 72
Customer based services 73
Critical Analysis 78
SWOT Analysis 79
Conclusion and recommendation 81
References & Sources 82
Annexes 83

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 Overview of the organization
Brief History
MCB BANK LTD.
(HISTORICAL BACKGROUND)
The historical background of MCB Bank Limited. Before separation of
Indo Pak, the need for more Muslim banks was felt. And Muslims
having strong financial capacity were thinking to invest in this sector as
well. This was the idea which paved the way for setting up Muslim
Commercial Bank Ltd known as MCB. This was the third Muslim bank
in the subcontinent.
HISTORY

MCB bank was incorporated under companies’ act 1913 on 9th July,
1947 (just before partition) at Calcutta. But due to changing scenario of
the region, the certificate of incorporation was issued on 17th August,
Mian Muhammad 1948 with a delay of almost 1 year; the certificate was issued at
Mansha- Chairmain
CHITAGONG. The first Head office of the company was established at
Dacca and Mr. G.M. ADAMJEE was appointed its first chairman. It was
incorporated with an authorized capital of Rs. 15 million.
After some time the registered office of the company was shifted to
Karachi on August 23rd, 1956 through a special resolution, now recently
the Head office of MCB has been transferred to Islamabad in July, 1999
and now Head office is termed as Principle Office.
This institute was nationalized with other on January 1st, 1974. At that
time it had 506 branches and deposits amounting to Rs. 1,640 million.
Although. 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

MCB Headquarter Karachi

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number of branches were 1.287 and deposits amounting to as high as Rs. 35,029 million.
When privatization policy was announced in 1990, MCB was the first to be privatized upon
recommendations of World Bank and IMF. 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. On April 8th, 1991, the management control was handed over to
National Group (the highest bidders). Initially only 26% of shares were sold to private sector
at Rs. 56 per share.

DEVELOPMENTS

After privatization, the growth in every department of the bank has been observed. Following
are some key developments:
1) Launching of different deposit schemes to increase saving level.
2) Increased participation on foreign trade.
3) Betterment of branches and staff service level.
4) Introduction of Rupee Traveler CHEQUES & Photo Credit Card for the first time in
Pakistan.
5) Extended use of information technology which is evident from the fact that there are 768
fully automated branches, 243 online branches (integrated networking), 151 ATMS in 27
cities nation wide and a M.C.B continuously innovate new product.

MCB Ltd formerly known as Muslim Commercial Bank Limited was incorporated by the
ADAMJEE Group on July 9, 1947, under the Indian Companies Act, VII of 1913 as a limited
company. The bank was established with a view to provide banking facilities to the business
community of the sub-continent. The bank was nationalized in 1974 during the government of
ZULIFQAR Ali Bhutto. This was the first bank to privatize in 1991 and the bank was
purchased by a consortium of distinguished Pakistani corporate groups led by NISHAT
Group. As of June 2008, the NISHAT Group owns a majority stake in the bank. The president
of the bank is Mr. ATIF BAJWA (previously with Citibank). Founded in 1948, NISHAT
Group is one of the leading and most diversified business groups in Pakistan. The group has

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strong presence in the most important business sectors of the country such as banking, textile,
cement and insurance.

MAIN M. MANSHA is the Chairman of the group (and also MCB) and has played
instrumental role in its success. In recognition of Mr. MANSHA contribution, the
Government of Pakistan has conferred him with "SITARA-E-IMTIAZ", one of the most
prestigious civil awards of the country.

MCB is Pakistan’s fourth largest bank by assets having an asset base of US$6.7 billion, and
the largest by market capitalization having a market capitalization of

US$4.1 billion. The Bank has a customer base of approximately 4 million and a nationwide
distribution network of 1,026 branches, including 8 Islamic banking branches, and over 300
ATMs, in a market with a population of 160 million.

In 2007, MCB reported a profit after tax of PKR16.4 billion (US$270 million) and generated
a return on average equity of 38% and a net interest margin of 8.08%. The Bank’s asset
quality is strong with a gross NPL ratio of 4.7% and provision coverage of 100%.

During the last fifteen years, the Bank has concentrated on growth through improving service
quality, investment in technology and people, utilizing its extensive branch network,
developing a large and stable deposit base and managing its non-performing loans via
improved risk management processes.
In 2005, the management of the bank changed its name from Muslim Commercial Bank
Limited to MCB Bank Limited (MCB). The reason was to explore international markets as
they were facing resistance specially from Western Countries to avail license. In 2008 the
head office of MCB was shifted to Lahore in a newly constructed building, namely MCB
House, located at Share GHOUS-AL-AZAM (formerly known as Jail Road) from Karachi.
The MCB Tower in Karachi serves as the MCB headquarters, and is also the tallest building
in Pakistan. MCB, advised by Merrill Lynch, became the fourth Pakistani company (the other
three being HUBCO, PTCL and CHAKWAL Cement - they all have been deleted) to list on
the London Stock Exchange when it raised US$150 million global depositary receipts.

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In May 2008 Malaysian bank, my bank and MCB sponsors NISHAT Group signed an
agreement, whereby my bank will acquire up to 20% of the ordinary shares in MCB from
NISHAT Group. The acquisition is in-line with my bank’s strategy, as Malaysia’s financial
services leader in the region, to build its presence in key growth markets across the region. It
also paves the way for MCB, one of Pakistan’s premier financial services groups, to engage
my bank as its exclusive foreign commercial bank strategic partner.
My bank initially acquired from NISHAT Group 94,241,527 ordinary shares in MCB,
representing a 15% stake in the Bank, for a cash price of PKR470 per share. The total
consideration paid was approximately US$686 million. The purchase price represented an
11.4% premium to MCB closing share price of PKR 422 on May 2, 2008, and a premium of
12.9% to the average closing share price for MCB over the 30 trading days immediately
preceding the date of this announcement.
Based on MCB December 31, 2007 audited book value, the purchase price represents an
implied price to book value multiple of 5.13x, a price to 2007 earnings multiple of 18.0x and
a price to 2008 earnings multiple of 15.2x. In July 2008 my bank exercised its right to
increase its stake to 20%.
The stake in MCB allows my bank the right to appoint two Directors to represent its interest
on the Board of MCB. One of these Directors was to be appointed immediately and the
second Director will be appointed upon completion of the term of the existing Board,
scheduled to be on March 27, 2009.

As part of the transaction, my bank and MCB are also expected to enter into a business
cooperation arrangement which will include, among others, Islamic banking, retail banking,
credit cards, asset management and SME banking. Leveraging my bank leadership and
experience in these segments coupled with MCB brand and broad distribution network, my
bank and MCB believe that significant revenue synergies can be attained. Both My bank and
MCB are also expected to benefit from increased business ties and trade flows between
Pakistan and Malaysia.

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 Company Description:

MCB Bank Limited is a Banking Company, which is engaged in Commercial & Retail
banking and related services domestically and overseas.

MCB BANKING COMPANY

Section 5 of banking ordinance 1962 says that Banker means a person transacting business
of transacting the business of accepting, for the purpose of lending or investment of deposits
and withdrawals by CHEQUES, drafts, orders of other wise and include any post office
saving bank.

COMMERCIAL BANKING:

Commercial banks are profit seeking organization. They have been the most effectively
mobilize the savings and have been providing short-term requirements of businesses. They
help in internal and external trade of the country.

FUNCTIONS OF COMMERCIAL BANKS:

Today there are unlimited no. branches of commercial banks along with an established
network of supplementary financial institutions.The function of a modern commercial bank
can be divided under the four headings as:

1. Accepting of deposits.
2. Advancing of loans.
3. Agency service.
4. General utility service.

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ACCEPTING DEPOSITS:

The primary function of a bank is to receive surplus balances from individuals, firms,
public institutions and government etc and honor CHEQUES drawn upon it. Three types
of deposits are

• Current or demand deposits

• Saving deposits
• Fixed or term deposits

ADVANCING OF LOANS:

The most important function is to provide loans to individuals, firms, business

concerns and government bodies against securities to meet their financial needs at a
fixed percentage of interest. These are some kinds of loans:

• Loan to business
• Loan to real estate mortgage
• Consumer loan
• Loan for purchasing security
• Loan to agriculture
• Bank investment for security

AGENCY SERVICES:

The commercial bank provides following agency services to its customer

• Collection and payment of CHEQUES

• Collection of dividend

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 • Purchase of securities
• Execution of standing orders
• Acting as trustee or executer
• Make transfer of funds
• Act as an agent

GENERAL UTILITY SERVICES

Commercial bank performs general utility services as follows

• Foreign exchange business

• Act as referee
• Accepting of bills for collection
• Issuer of traveler’s CHEQUES
• Supplier of trade information

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 NATURE OF THE ORGANIZATION

MCB Bank Limited is a Banking Company, which is engaged in

Commercial & Retail banking and related services domestically
and overseas.

Section 5 of banking ordinance 1962 says that Banker means a

person transacting business of transacting the business of
accepting, for the purpose of lending or investment of deposits
and withdrawals by CHEQUES, drafts, orders of other wise and include any post office
saving bank.

COMMERCIAL BANKING:

Commercial banks are profit seeking organization. They have

been the most effectively mobilize the savings and have been
providing short-term requirements of businesses. They help in
internal and external trade of the country.

FUNCTIONS

Today there are unlimited no. branches of commercial banks

along with an established network of supplementary financial
institutions.The function of a modern commercial bank can be
divided under the four headings as:

5. Accepting of deposits.
6. Advancing of loans.
7. Agency service.
8. General utility service.

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:

The primary function of a bank is to receive surplus balances from individuals, firms,
public institutions and government etc and honor CHEQUES drawn upon it. Three types
of deposits are

• Current or demand deposits

• Saving deposits
• Fixed or term deposits

The most important function is to provide loans to individuals, firms, business

concerns and government bodies against securities to meet their financial needs at a
fixed percentage of interest. These are some kinds of loans:

• Loan to business
• Loan to real estate mortgage
• Consumer loan
• Loan for purchasing security
• Loan to agriculture
• Bank investment for security

The commercial bank provides following agency services to its customer

• Collection and payment of CHEQUES

• Collection of dividend
• Purchase of securities
• Execution of standing orders
• Acting as trustee or executer
• Make transfer of funds
• Act as an agent

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Product
lines

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 PRODUCTS AND SERVICES OF MCB

Following are some products of MCB that are introduced by Musing Commercial Bank after
privatization.

1) MCB RUPEE TRAVELLER CHEQUE:

MCB Rupee Travelers CHEQUES are as good as cash, infact better. Better because with
Rupee Travelers CHEQUES you have the power to purchase and a feeling of security that
should you lose them, you will get a refund. MCB Rupee Travelers CHEQUES are accepted
at major shops, travel agents, hotels, business establishments and MCB branches all over
Pakistan. You don't have to be an MCB account holder to buy the Rupee Traveler
CHEQUES. Anybody can purchase them. It's a safe and convenient way to conduct everyday
business. At a time when thefts and robberies are on the increase, you are better off carrying
Travelers CHEQUES rather than money.

2) MAHNAMA KHUSHALI SCHEME:

A 5- year fixed Deposit Scheme, targeted to persons with small savings who would desire a
regular monthly return on their investment.

SALIENT FEATURE:

a) Minimum amount of investment shall be Rs.0.010m and the maximum amount of

investment would be Rs. 1.000m.
b) Khushali Certificates can be purchased by individuals (singly or jointly) or by the

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 Proprietorship/Partnership concerns or Companies, etc. in their name
c) The Khushali Certificate will be of five years maturity.
d) The interim rate of profit offered will be minimum 1% per month. If the profit declared
by the bank is higher, additional profit will be paid.
e) ZAKAT will be deducted wherever applicable on yearly basis whether you will be
receiving your profit or enchasing your certificates.
f) As per Government Directions, tax on the profit / return is to be deducted by MCB
branches at the time of payment.

3) MCB KHUSHALI BACHAT ACCOUNT:

FEATURES:
a) 8% rate of return per annum.
b) Returns calculated on daily.
c) Average balance and paid half yearly.
d) Introduced first time in Pakistan.
e) The facility of helping account holders pays utility bills (electricity, telephone and gas)
through their account. No queues. No delays.

4) PRIME CURRENCY ACCOUNT SCHEME:

Launched to attract deposits in foreign currencies. US Dollars, Pound Sterling, Euro and
Japanese Yen.

FEATURES:
a) Owing foreign currency account under the Prime Currency Scheme allows you to earn
attractive rates of interest in foreign currency.
b) You have a choice between opening this account in your personal name and
opening it under joint names.

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c) Whether you are a resident or a non-resident Pakistan, MCB Prime Currency Scheme
invites all to operate a foreign currency account.
d) Foreign nationals and foreign companies can also open a foreign currency account under
the Prime Currency Scheme.
e) Your foreign currency account can be opened in four global currencies: The United States
Dollar, the Pound Sterling, the Japanese Yen and the Euro.
f) Travelers CHEQUES and Foreign Currency Notes can also be issued to holders of persona!
And Joint accounts.
g) Remittance from abroad, Travelers CHEQUES, Foreign Currency Notes and Foreign
Exchange generated by encasing F.E.B.Cs may be deposited in these accounts.
h) Rupee Loan facility will also available against this account.
i) You can draw any amount of foreign exchange from your foreign currency account and
transfer or remit the amount freely to any part of the world without any restrictions.
j) The restrictions imposed by the State of Pakistan for the opening of foreign currency
accounts in case of passport; Work-permit and resident Visa have been withdrawn. Your
account will be restriction free.
k) The Prime Currency Scheme is exempt from all Forms of taxes including Income Tax,
Wealth Tax and ZAKAT deductions.
l) MCB Prime Currency Scheme is a world in itself.
MCB - committed to working for your convenience - offers the foreign currency account
facility at more seventy of its branches all over Pakistan.
5) HAJJ MUBARAK SCHEME

A saving scheme, of 2/3 years duration, for the convenience of persons, with a limited
income, who desire to perform Hajj, was introduced.
Under the 2 years scheme, a monthly deposit of Rs.1800 is required, whereas under the 3
years scheme, the required monthly deposit is only Rs.1200.

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6) CAPITAL GROWTH CERTIFICATE SCHEME:

For long term depositors under which the amount deposited almost doubles at the end of 5
years. For the scheme, the minimum amount of deposits is Rs. 10000 while there is no
maximum limit. In case of premature encashment of the certificate, the depositor will profit at
the same rates as that of PL Saving Account.

7) FUND MANAGEMENT SCHEME

This scheme is offered to corporate and customers and is aimed at providing better rate of
return up to 15% per annum. One of the objectives of the scheme is to develop secondary
market for Government Securities.

8) CONSULTANCY SERVICES:

In the process of privatization of public sector units, prospective buyers need professional
assistance and MCB, with its expertise, offers to them specialized service for valuation of the
market value of the industrial unit, preparing bid documents and arranging finance for the
purchase of the unit.

9) SELF SUPPORTING SCHEME:

For the benefits of genuine worker/borrowers who are poor and needy and for small
entrepreneur the bank as evolved a self supporting scheme: maximum amount of loan
Rs.25000 and minimum Rs.5000 per individual. Loan will be totally free of mark-up.

10) FAX PRESS

This product was first of its kind introduced by using modem technology of The Fax

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Machine. It facilitates speedy transfer of funds within Pakistan. The service guarantees
transfer of from one city to another, within an hour.

11) NIGHT BANKING SERVICE:

For the convenience of the account holder, service has, especially, been introduced
at busy commercial centers. Traders and other clients can now make deposit, with case, at
such centers up to 8.00PM.

12) UTILITY BILLS COLLECTION

With the aim of extending this service to wider range of customers, the number of MCB
branches collecting Utility Bills more than 900.
1. MCB Mobile
2. Islamic Banking Services

13. MCB MOBILE

Banking at your fingertips. Dial in anytime to get information regarding balance and mini
statements.

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14. PYARA GHAR

Flexible and competitive home financing facility with options of home

purchase, construction and renovation.

15. ISLAMIC BANKING SERVICES

Islamic banking services through exclusive units/branches offering a range of liability and
asset based Sharia compliant products like Musharika, Mudarba, Ijara and Istasana.

16. MCB CAR CASH

Car financing and leasing at competitive rates with flexible options Car cash finances
both semi-commercial and non-commercial vehicles for personal and business use.

17. MCB LOCKERS

The best protection for your valuables. Lockers of different capacities are available
nationwide

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 MCB Bank Ltd Competitive Strategies

To be competitive the Bank has further reinforced its position in the Consumer Banking arena
by streamlining and re-launching the consumer financing products and introducing more
convenience based solutions. With the re-launch of auto finance and house finance products,
the Bank pushed the products with full thrust. The Bank has also launched a running finance
facility against mortgage of property.
Technology continued to play an important role in improving and expanding product
offerings. The Bank introduced more IT based products to cater to the changing lifestyles and
needs of the customers. MCB Virtual-Internet Banking was launched with wide ranging
banking solutions for the customers ranging from individual to corporate customers and it has
become the most preferred Internet banking solution in the country.
MCB also had the privilege of being the first Bank in Pakistan to launch the comprehensive
bill payment facility through its alternate delivery channels which include Internet Banking,
ATMs and MCB Call Centre, currently with six payment partners. Similarly, the Bank also
took initiatives to increase the usage of debit facility. To provide timely and updated
information, MCB has also provided a new look to its website which is user friendly and
considerably easy to browse.
The Islamic Banking initiative has been very successful in attracting new customer, both
individuals and companies. Similarly, those relationships, which were confined only to
current account facility, have grown into stronger business relationships. The branch network
was expanded to Lahore and Multan during the last year and recently been extended to
Hyderabad and Faisalabad. The Bank plans to further expand its Islamic Banking branch

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network to other metropolitan areas and also to introduce new sharia compliant banking
solutions to a wider range of customers for satisfying their individual and business needs.
Some wide-ranging new strategic initiatives were also taken up which will be important for
the Bank in years to come. A private company has been formed in Hong Kong (fully owned
subsidiary of MCB) in partnership with Standard Chartered Bank, handling trade transactions
of select countries in the Asia-Pacific region. It is projected to earn US$ 1 million in its first
year of operations. To increase its international presence, the Bank will be opening its
representative office in Dubai and entering into major strategic alliances with banks in the
UAE/ especially for marketing
our consumer banking products to non-resident Pakistanis. Furthermore, feasibility is also
being carried out for entering other international markets.
MCB operations continued to be streamlined with focus on rationalization of expenses, re-
alignment of back-end processing to increase productivity, enhancement of customer service
standards, process efficiency and controls. The Bank has taken the lead in introducing the
innovative concept of centralizing Trade Services in the country by providing centralized
foreign trade services to branches with a view to improve efficiency, expertise and reduce
delivery cost.
Management of Human Resources has been one of our core focus areas. MCB is committed
towards attracting, retaining and motivating outstanding people. Challenge for MCB is to
provide an environment in which employees can better realize their potential. The Bank
introduced 'reward for performance' where high potential officers were identified and
rewarded accordingly. In view of the competitive environment, the Bank is focusing on
performance and introducing a more robust performance management system. MCB is also
strongly committed to training its staff at all levels.
The Bank will also be implementing the full suite of the latest version of SYMBOLS Version
8. MCB Bank will run SYMBOLS Finance modules to deliver personalized services to its
customers over multiple delivery channels, while SYMBOLS Enterprise Operations Center
will serve as its core banking transaction-processing engine. By implementing SYMBOLS,
MCB Bank aims to raise the level of its customer service and its time to market in new
product offerings for its three cores banking businesses in Corporate, Commercial and
Consumer Banking - retaining its market leadership as Pakistan's progressive Bank.

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Clients
There are thousands of clients which
deal MCB Bank. The are asset of our
bank and loyal for our bank
perspective.
Competitors

There are many banks in PAKSITAN which compete with each other which are following

BANK ALFALAH LIMITED

HBL BANK LIMITED
STANDARD CHARTERED BANK
ASKARI BANK LIMITED
SILK BANK
THE BANK OF PUNJAB
FAISAL BANK LIMITED
MEZAN BANK LIMITED
SONERI Bank

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 Organizational structure
Organizational Hierarchy chart
The organization chart within a department and in different offices is as follows:

Board of Directors

Chairman

President

Internal Audit Department

Operation Department

MEDIOCRE LEVEL MANAGEMENT

Divisional Heads ………..………………Head Office

Regional Head (EVP) ………..……………………Regional Office

Zonal Head (VP) ………..…………… Zonal Office

Branch Manager ………..…………………… Branch

(VP, AVP, GRADE 1, 2, 3)

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 ORGANIZATIONAL STRUCTURE

As MCB is a banking company listed in stock exchange therefore it

follows all the legalities which are imposed by concerned statutes Mr.
Muhammad MANSHA is chairman & chief executive of the company with
a team of 10 directors and 1 vice chairman to help in the business control
and strategy making for the company.
Operational Management of the bank is being handled by a team of 10
professionals. This team is also headed by Mr. Muhammad MANSHA. The different
operational departments are Consumer Banking & IT div; Financial & Inter branch div;
Banking operations div; HR & Legal div; financial control & Audit div; Credit management
div; Commercial Banking div; Corporate Banking div; Treasury management & FX Group
and lastly Special Assets Management (SAM) Group.
For effective handling of branches, it has been categorized into three segments with different
people handling each category. These categories are:

a) Corporate Banking
b) Commercial Banking
c) Consumer Banking

A) CORPORATE BANKING:
These are branches which have an exposure of over Rs. 100 million. Usually includes
multinational & public sector companies.

B) COMMERCIAL BANKING;
The branches which has a credit exposure of less than Rs. 100 million but having a credit
portfolio of more than Rs. 20 million (excluding staff loans)
Usually branches in large markets and commercial areas come under this category.

25
C) CONSUMER BANKING

There are the branches which have exposure up to Rs. 20 million and these include all the
branches which are neither corporate nor commercial branches.
Recently the organizational structure was re-designed as follows:
Province wise branches

Number of employees

There are Million of employees are doing job in MCB Bank Ltd.

Jail Rd, Lahore

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 INTRODUCTION OF ALL THE DEPARTMENTS

The purpose of banks is to provide some services to the general public. And for this purpose
different banks provide different services to the people in different forms. The Muslim
Commercial Bank (MCB) is a commercial bank, in modern time commercial banks play a
very important role and their functions are manifold. The main functions and services which
Muslim Commercial Bank Limited provides to different peoples are as follows.

1) Open Different accounts for different peoples

2) Accepting various types of deposits
3) Accepting various types of deposits
4) Granting loans & advances
5) Undertaking of agency services and also general utility functions, few of those are as
under:
a) Collecting CHEQUES and bill of exchange for the customers.
b) Collecting interest due, dividend, pensions and other sum due to customers.
c) Transfer of money from place to place.
d) Acting an executor, trustee or attorney for the customers. ‘Providing safe custody and
facilities to keep jewellery, documents or securities.
e) Issuing of travelers CHEQUES and letters of credit to give credit facilities to travel.
f) Accepting bills of exchange on behalf of customers.
g) Purchasing shares for the customers.
h) Undertaking foreign exchange business.
i) Furnishing trade information and tendering advice to customers.

For proper functioning of branches and the over all bank has been divided in different
departments. These departments handle different jobs so that division of work is there for
improvement of functions and also it is easy to control the situation. The general division in a
branch is as follows:

27
1) Cash department
2) Deposit department
3) Advances & credit department
4) Foreign exchange department
5)Technology department (new addition in order to cop with the growing needs of day to day
technology requirements)
CASH DEPARTMENT

The following books are maintained in the Cash Department:

1. Receiving Cash Book
2. Paying Cash Book
3. Token Book
4. Scroll Book
5. Cash Balance Book
When cash is received in counter, it is entered in the Scroll Book and Receiving Cashier
Book. At the close of the day, these are balanced with each other.
When the CHEQUES or any negotiable instrument is presented at counter for payment, it is
entered in the token book and token is issued to the customer. The token clerk and the Cashier
make entries in the paying book and payment is made to payee. At the close of day, the Token
Book and Paying Cashier Book are balanced.
The consolidated figure of receipt and payment of cash is entered in the cash balance book
and drawn closing balance of cash.
Opening Balance + Receipts - Payments = closing Balance.
This is very important department because cash is the most liquid asset and mostly frauds are
made in this department, therefore, extra care is taken in this department and nobody is
allowed to enter or leave the area freely. Mostly, cash area is grilled and its door is under
supervision of the head of that department. All the books maintained in this department are
checked by an officer.

28
DEPOSIT DEPARTMENT

Bank deals in money and they are merely mobilizing funds within the economy. They borrow
from one person and lend to another, the difference between the rate of borrowing lending
forms their 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. These deposits are liability of
the bank so from point of view of bank we can refer to them as liabilities.
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 increase in deposits is also a cause of
increase on total number of accounts; bank has progressed in both aspects.

TYPES OF DEPOSITS

Deposits can be segregated on two bases, one is the duration in which there funds are
expected to be with the bank and second is the cost of getting these funds. So divide deposits
in two classes according to duration of deposits i.e.
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 four, High Cost Medium Cost, Low Cost No Cost.
Banks has different kinds of deposit schemes in order to induce deposits. These schemes are a
mixture of the above mentioned two types of deposits with an addition of different services &
requirements such as minimum balance' requirement, mode of transaction, basis for
calculation of profit, deductions, additional benefits, eligibility for

different groups.
In the similar fashion, MCB has a large variety of deposit schemes and some of them are as
follows:

29
CURRENT A/C (CD):

In this type of accounts the client is allowed to deposit or withdraw money as and when he
likes. He may, thus, deposits or withdraws money several times in a day if he likes. There is
also no restriction of amount to be deposited or withdrawn. However, there is requirement of
minimum balance maintenance of Rs. 1000/-. Usually this type of account is opened by the
businessmen. No profit is paid by the bank and no service charges are deducted by the bank
on current deposits account. These types of deposits are also exempt from compulsory
deduction of ZAKAT.

PLS SAVING BANK A/C (SA):

This type of account is for those persons who want to make small savings'. This type of
account is opened with a minimum deposit of Rs. 1000/-. Under this scheme deposits can be
made only up to a-costing amount and withdrawals are allowed twice a week or 8 times a
month. If a big amount is required a seven days notice is required before the withdrawal. The
profit is paid on these accounts on the minimum balance during a month for the whole of that
month. Zakat & other withholding taxes are deducted as per rules of the government.

KUSHALI BACHAT A/C (KBA):

This is an advance form of PLS saving a/c, in this type of account. The minimum balance
requirement for this type is Rs. 2500/-. There is also restriction on the number of withdrawals
as well, i.e. up to 4 times in a calendar month. For maintaining this extra balance the 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. All other rules of saving account
are applicable.

PLS 365 SAVING A/C:

This is a special type of saving account in which customer maintains a minimum balance of
Rs. 300,000- 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 is
also another advantage of this scheme that if balance on a particular day falls below the

30
minimum balance then only the product of that day is ignored whereas in KBA, 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.

NOTE:
PLS Saving, Kushali Bachat & PLS 365 saving accounts can be opened in foreign currency
also. Before nuclear tests of 1998 these accounts were opened in four

major currencies but now these are only opened in USD ($). However, now bank discourages
the opening of foreign currency accounts because no forward cover risk is provided by State
Bank of Pakistan (SBP) and all the loss in case of devaluation or depreciation in local
currency has to be born by bank himself. This increase in cost has left foreign currency
account of no use, therefore, now bank prefers to accept deposits in local currency rather in
foreign exchange.

KHANUM BACHAT SCHEME:

This is a type of term deposit, in this type of deposit an account is deposited and monthly
payments of Rs. 1000/- are made by the account holder in this account for a minimum of 10
years. After the expiry of term, he receives his funds along with profit for the tenor. The
distinctive feature of this product is that profit is calculated on monthly basis and charged to
account on end of each half /ear. Then profit is also calculated on that amount of profit which
is credited to the customer's account. So we can say that in this type of account there is a
concept of accumulated profits on profit. This ends in getting a heavy return for the depositor
at the end of tenor for his small savings. This product was actually introduced to promote
saving habits in the people. Zakat and withholding taxes are deducted as per rules only at the
time of maturity while making payment to the customer.

HAJJ MUBARIK SCHEME:

This is also very closely related with Khanum Bachat scheme. This was designed to help the
persons who are willing to offer Hajj but are unable to save required funds. In this deposit
schemes, 2 or 3 years agreement is entered with a customer. During this time he keeps on

31
depositing monthly deposits and his account is charged with the accumulated profits
calculated on 6 monthly basis. The scheme is so designed that total amount to be received at
the end of this scheme comes equal to the anticipated cost of offering Hajj at the end of tenor.
ZAKAT & withholding tax are deducted at the time of payment.

MONTHLY KUSHALI SCHEME:

This scheme is similar to CGC in the sense that an initial deposit is made in this case also but
instead of lump sum payment at the end of the tenor, the person gets a monthly profit on his
deposits. Under this scheme, the bank has guaranteed minimum rate of 1% per month but
usually this rate is more than 1% per month. ZAKAT & withholding tax are calculated as per
rules laid down by the government.

PLS TERM DEPOSIT RECEIPTS (TDR’S)

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. These are in the form of receipts and profit on these receipts is paid
biannually. These receipts are encashable after expiry of the period for which they were
issued. Different profit rates are applied to different type of TDRs.

SPECIAL NOTICE DEPOSITS (SND):

Under this deposit scheme, a deposit is received from the depositor under the condition that
he will intimate the bank before a certain period in case of withdrawals.

There are two types of SNDs, they are 7 days and 30 days notice deposits. The profit is paid
on these deposits but it is nearly equivalent to saving account rate.

FUNCTIONS

This was a brief review of different types of deposit schemes. The Deposit Department
handles the account opening, profit payment and accounting of all types of deposit schemes.

32
ACCOUNT OPENING:

Account opening is an agreement in which customer offers his funds and bank accepts these
funds, 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.

PROCEDURE FOR OPENING:

Procedure for opening of account is as follows:
A person, who wants to open any kind of account, has to fill in a printed form which is
provided by the bank, free of cost. Separate account opening forms are used for different
types of accounts.
Bank usually requires that new depositor must be introduced by some one. An introducer can
be any person known to the bank but preferably it should be a customer of the bank. However,
the manager can open the account by his own introduction.
If the manager is satisfied, it will obtain the full signature of the customer- on the form and
specimen signature card, makes the first deposit, and issues the CHEQUE book.
The following are given to the customers:
Pay-in-slip is the proof of deposit. For every payment which is. to be deposited in the bank,
the pay-in-slip is to be filled up. The object of this book is to provide the customer with the
bank's acknowledgment for receipt of money to be credited this account.
CHEQUE Book contains a number of CHEQUES. It enables a customer to make withdrawal
from this account or make payment of various parties by issue of

33
CHEQUE.
Pass Book is a copy of the customers account as appears in the books of the bank. Balance is
recorded in this book by the Clerk.
NOTE:
1) In case of partnership account partnership deed should be attached.
2) In case of companies memorandum and article of association, certificate of incorporation,
certificates for commencement of business, list of directors and board resolution for opening
of account is also obtained from the customer.
3) Accounts of Trusts, Executors & Administrators can also be opened but with the prior
approval of the Head Office.
Profit payment & calculation is done in accordance with the rules of each type of deposit
scheme-by the deposit department. The products for each deposit scheme are calculated
separately and added till the end of 6 month period. 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. 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.
Accounting entries are also made in the respective books of account by this department.
However, in small and medium size branches, the accountant performs the book keeping
duties for all kinds of ledgers.

CLEARING DEPARTMENT
Every banker acts both as a paying as well as a collecting banker, It is however an important
function of crossed CHEQUES. A large part of this work is carried out through the bankers
clearing house.
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. As the collecting banker runs
certain risks in receipt of their ownership the law has provided certain protections to the
banks.

34
The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a CHEQUE or draft
may cross the instrument generally or specially. It further lies down that a crossed CHEQUE
can only be paid to a banker, who collects it for a customer in good faith and without
negligence.

TYPES OF CHEQUES COLLECTED

Transfer CHEQUES: are those CHEQUES, which are collected and paid by the same branch
of bank.
Transfer delivery CHEQUES: are those CHEQUES, which are collected and paid by two
different branches of the same bank situated in the same city.
Clearing CHEQUES: are those CHEQUES, which are drawn on the branches of some other
bank of the same city or of the same area, which is covered by a particular clearing house.
Collection CHEQUES: are those CHEQUES, which are drawn on the branches of

either the same bank or of another bank, but those branches, are not in the same city or they
are not the members of clearing house.

FUNCTIONS OF CLEARING DEPARTMENT:

1. To accept Transfer, Transfer delivery, clearing and collection CHEQUES from the
customers of the branch and to arrange for their collection.
2. 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.
3. To collect amount of CHEQUES drawn on members, sub-member of local clearing house,
sent for collection by MCB Branches, not represented at the local clearing house.
COMMON PROCEDURE FOR ALL CHEQUES:
i) Receiving and scrutinizing the CHEQUES and other deposit instruments, and the pay-in-
slip at the counter.
ii) Fixing the stamps.
iii) Scrutiny and receipt by the authorized officer.

35
iv) Returning the counter file to the depositor.
v) Certificate and confirmation by the officer in charge of the department.
vi) Separating the CHEQUE into transfer, transfer delivery, and clearing CHEQUES.

SCRUTINY OF CHEQUES
a) The instrument should be neither stale/ nor post-dated.
b) If the instrument is crossed not negotiable it can be for the third party (an endorsee of an
order CHEQUE, or a holder of bearer CHEQUE).
c) The Instrument should not bear any unauthorized alternation.
d) The instrument should not be mutilated.
e) The amount in words and figures should be same.
f) The instrument should be drawn on any local branch.
g) If CHEQUE is "crossed Account Payee's" only or "Payee's Account", it should only be
accepted for collection for the payee's account.
h) The CHEQUES or drafts should not be crossed specially to any other bank.
i) A CHEQUE payable to a firm should not be accepted for credit to a partner's account.
j) A CHEQUE payable to one of the joint account holders should not be collected for the joint
account without the payee's endorsement, or consent.
k) A CHEQUE drawn by a customer in the capacity of agent, Attorney, or Manager of his
company or firm, should not be collected for credit to his personal account.
l) Pay orders, although negotiable should not be collected for third parties.
m) Do not collect an instrument in the account of an agent or of the servant of the payee or
endorsee of the instrument.
n) “Not transferable" instruments, like Telegraphic Transfer, or Mail Transfer Receipt, Pay-
slips, and Treasury Receipts, should be collected for a person other payee.
o) If an account is new or the balance or operation of the account is not satisfactory,

satisfy your self about the title of the customers to the instruments before accepting the
deposits.
p) Branch agent's permission should be obtained before accepting a third party CHEQUE or

36
draft for the credit of the member.
q) If the payee is a Government Department, Government Official, or a trust account the
instrument cannot be collected, but for the payee's account.
r) If the payee of an instrument is UBL, it can be collected for credit of the drawers account,
or the amount of the instrument may be utilized as desired by the drawer in writing.
s) CHEQUE payable to a trust, account should not be collected for credit to a trustee's
account.
t) All the endorsement should be regular, and no endorsement should be missing.
Note: No charges are charged by the bank for this purpose.

LEDGERS OF DEPOSIT DEPARTMENT:

The following types of ledgers are concerned with deposit departments:

1. Saving Ledgers
2. Current Ledgers
3. Profit & Loss Sharing Ledgers
4. Fix Deposit Register
5. S.N.T.D. Register
6. Call deposit register
7. Cumulative deposit certificate register
8. Cash book
9. Daily profit and loss summary book
10. Officer spaceman signature book
11. Voucher register

However, in computerized branches all these ledgers are no more there but only day books
are maintained. The rest of the work is done on computers.

37
 REMITTANCES

DEMAND DRAFT

1) Demand draft is a written order drawn by a branch of a bank upon the branch of same or
any other bank to pay certain sum of money to or to the order of specified person
2) Demand draft is a negotiable instrument.

3) Legal provisions are same as that of CEQUE.

4) It is to be ensured that purchaser can at least sign.
5) Thumb expression is not accepted on DD
6) The following are the parties.
a) purchaser
b) issuing branch
c) drawer branch
d) payee
A demand draft may be issued against the written request of the customer before issuing it
must be seen that the demand draft is in order.

SCRUTINY OF APPLICATION
The DD application must be scrutinized by the counter clerk in respect of following points.
A There should be branch where payment is to be made.
B full name of payer should be mentioned
C amount in words and figures must be same
D application to be signed by the purchaser

TELEGRAPHIC TRANSFER

■ Transfer of funds from one branch to another branch of the same bank or upon other bank

38
under special arrangements.
■ Telegraphic transfer is not negotiable
■ The funds are not payable to bearer
■ Minor cannot avail this facility
PARTIES
Following are the parties involved
■ Applicant
■ Drawing branch
■ Drawer branch
■ Beneficiary
Full name of the beneficiary or account number should be mentioned in the application form.
■ Instruction regarding mode of payment should be obtained.
■ A record in the remittance outward register should be maintained.
■ All the remittance must be controlled through number.
MAIL TRANSFER
■ Transfer of funds from one branch to another branch of the same bank with in or out side
the city is called mail transfer.
■ Mail transfer is not negotiable
■ The procedure is same as for DD
■ All precautions must be observed
PAY ORDERS
■ Pay order is meant for bank own payment but in practice they are also issued to customers.
■ A pay order is written authorization for payment made in a receipt form issued and payable
by the bank. To the person named and address.
The following are the parties
A purchaser
B issuing branch
C payee
■ Charges must be recovered at prescribed rate.
■ Pay order should be prepared like demand draft.

39
■ A record of all issued and paid should be maintained.
■ Credit voucher should be prepared
TECHNOLOGY DEPARTMENT

Technological advancements are also affecting the banking industry. The foreign banks have
a competitive edge over all local banks in their technologies' advancements and automated
systems. 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. There are more than 1045
branches of MCB all over Pakistan and out of these more than 300 branches are fully
computerized Almost all .the branches of big cities are computerized; therefore, the need for a
technology department at each branch is growing. Now a day, a computer division is working
in each city to provide service to ad the branches of that area.
MCB has also introduced the now concept of online banking. There are now more than 250
branches linked through this system and they can transact with each other directly using
computer systems at their own branches. Now customers do not have to wait long for their
transactions and can operate their account through all the online branches.

ATM NETWORK:

ATM stands for Automatic Teller Machine. This machine is

used to transact in one's account without intervention of

humans. These machines are basically used for taking cash,

confirming balances and requesting statements / CHEQUE
books.
MCB has the largest ATM network in the country at the
moment with almost one ATM at each online branch and also
ATM terminals at International Airports. This network covers

40
more than the 27 cities of Pakistan including the provincial capitals and large commercial
cities of the country.
ATMs are operated through a card issued to the valued customers and by application of
Personal Identification Number (PIN number). A person can withdraw from any machine
across Pakistan with having an account in only one branch of MCB. This was only possible
with the help of online system. In this system all the machines are linked to central banking
host at IRM division Karachi through either satellite or telephone controller. This system
identifies the card holder and his PIN Number.
Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard.
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.
Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/- in a day.
The annual fee for this card is Rs. 300/- only.
Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day. These
cards are issued to the persons having more than Rs. 500000/- as their average balance.
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.

Comments on the organizational structure

From some previous years Pakistan has been facing serious political instability and
challenges. However, after the reinstatement of the deposed judges, lifting of governor rule in
Punjab, reinstatement of Sharif’s government in Punjab and move towards reconciliation of
two major political parties Pakistan is once again on the path of political stability. As effect of
this, Pakistan stock market has also started going on positive trend, showing a slightly bullish
trend. Hopefully this political stability will affect every industry especially the Banking sector
in positive way. Pakistani banking sector is still growing but on medium pace as compared to
previous growth in recent years. In 2008 Pakistan banking sector showed a growth of 7%.
Especially in Islamic banking there are more growth prospects.

41
MCB Bank is a leading commercial bank of Pakistan. It is among the five largest banks of
Pakistan. These banks dominate the banking structure of Pakistan. In the previous years MCB
has shown a significant growth. It is a first Pakistani organization which was listed on London
stock exchange. In 2008 it received a euro money award for best bank in Asia 2008. Future
prospects for MCB are very bright. MCB has a shown 43% growth in FY 2007.With SBP
raising the upper limit of retail exposure to PkR75mn (not be more than 2% of gross retail
portfolio of the bank) in case of consumer loans and small business loans, MCB has increased
its penetration this

high margin segment. Despite the challenges of declining demand & rising NPLs due to
higher interest rate vulnerability and late entry along with established brand equity of existing
players like UBL, Consumer financing continues to be a profitable niche for MCB. MCB is in
process of launching more innovative products which will help MCB bank in growing more.
As the size of MCB is very large and it comes under the five largest banks there are much
chances of growth for MCB due to its strong muscles. Market share: Overall the banking
industry of Pakistan comprises of both nationalized and private banks. In terms of both loans
and deposits, 76 % of the banking sector comprises of private banks. This is primarily because
of the privatization policy adopted by the government. The remaining 24% are partially or
wholly owned by the state .in the private sector both local and foreign banks operate. 94 % are
local banks where as foreign bank participation is only up to 6%.Among the local banks, 90
% of the share is distributed among the top 5 banks which are1.Muslim Commercial
Bank2.National Bank of Pakistan 3.United Bank Limited 4.Habib Bank Limited 5. Bank
Alfallah. These 5 banks form 55% of the whole banking sector of Pakistan and the stability of
the sector is highly depended on the smooth running of these five banks. More over these
banks are the trend setters in the overall banking sector. Among these top five banks, more
than 35% of the share is with Muslim Commercial Bank.

42
Main offices of MCB Bank Ltd
Lahore
MCB Bank Limited.
15-Main Gulburg, Jail road
Lahore.
Karachi.

MCB Bank Limited.

Plot 11-c SHAHBAZ lane no. 1 DHA Phase, VI
Karachi.
Islamabad.

MCB Bank Limited.

Block no. 1 united Bakery school road F6

A brief introduction of branch where i done my internship program

I did my internship from MCB Bank Limited University Road SARGODHA. some important
information about my BRANCH is as follows:

MANAGEMENT OF THE BRANCH

BRANCH MANAGER
Zafar-ul-haq Bhatti

Operation Manager
Umar Farooq Bajwa
Assistant
Mumtaz Hussain
C.S.O
Miss Sadia

Loan Manager
Sohail Zafar
Chief Cashier
Farooq Ahmed Mahi

Cash officer
Imran Nasir

TRAINEE
M. Khurram Shahzad (VU)

43
Starting and ending dates of my internship

The starting date of my internship is 01.04.2010

The ending date of my internship is.15.05.2010

DEPARTMENTS
1. Cash
2. Deposit
3. Advances and loans Department
4. Bills and Remittance
5. Establishment
6. Foreign Exchange
7. Management
8. Govt. receipt & payment

Training program

Field of Work of my Bank (MCB)

The purpose of banks is to provide some services to the general public. And for this purpose
different banks provide different services to the people in different forms. The Muslim
Commercial Bank (MCB) is a commercial bank, in modern time commercial banks play a
very important role and their functions are manifold. The main functions and services which
Muslim Commercial Bank Limited provides to different peoples are as follows.

Customer Services department

customers are the ‘meat of the business,’

companies should put value in building good customer
relationships. Once you are able to establish connections,
you keep loyal customers who continue doing business

44
with you and bring more people into the business good customer
relationships drive the business to success. Just make people believe in your ability to satisfy
their needs and fulfill their expectations as well as in your products and services. In the
process of finding people who would believe in you, consider making a relationship with
them and your company will not have to spend huge amounts of money just to attract more
customers.

CREDITS 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. 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.
1) Loans
2) Cash Credits
3) Overdraft

LOANS –

Loans are monetary assistance by a financial institution to a business, individual etc. The
loans are granted by the bank in lump sum, so these types called fixed or demand loans.
Interest is charged on the whole amount of a fixed loan.

The borrower withdraws whole the amount of loan. This type of loan is normally granted
against security of gold documents.
In case of demand loans against gold or documents, a demand promissory note for the
amount of loan is taken from the borrower loans are granted under;

45
REQUIREMENT FOR LOAN –
For granting loan to any party or individual, the bank checks following particulars of the
client:
• Credibility
• Feasibility Report
By Credibility, bank judges the credibility of the client by his past bank record, CBI report
etc. it is very important in making decision about giving him loan.
Feasibility report is on the running or proposed business of the client. The report enables the
bank to judge the likely return of the business.
TYPE OF FACILITY –
Basically two types of facilities are available in banks
• Funded facility
• Non funded facility
FUNDED FACILITY –
• Running finance
• Cash finance
• Demand finance
RUNNING FINANCE –
• The running finance facility is available for enhancement of business and
• customer’s working capital
• In running finance markup is charged only on the amount utilized by customer.
• This facility is given against equitable and registered mortgage
• The stock is hypothecated by bank.
• The customer can get his limit renewed after an year.
• The rate charged by the bank on cash credit in 46 paisa per thousand on daily
• basis.
CASH FINANCE –
• Cash finance is basically given against the pledge of stock or stock in trade
• The amount is adjusted as the goods are released from godown.

46
DEMAND FINANCE
Demand finance is also given against hypothecated
• This type of loan is advanced in lump sum amount
• The customer repays the loan in monthly equal installments.
FUNDED FACILITY –
•Running finance
•Cash finance
•Demand finance
• Payment against documents
• Finance against imported merchandise
• Finance against trust receipt
• Export finance
• Foreign bill purchased
• Others
NON – FUNDED FACILITY –
• Letter of credit
• Letter of guarantees
• Bid bonds
• Performance bonds
Other facilities

47
 WORK DONE BY ME DURING INTERNSHIP
BRANCH INTRODUCTION
I have completed my internship training program from Muslim Commercial Bank Limited
,University Road Branch ,Sargodha . This is not a main branch but it has all departments
during my training I gained lot of practical as well as theoretical knowledge about all
departments and other banking activities

BRANCH CODE= 1188

STARTING DATE:
The starting date of my internship program is 01-04-2010

ENDING DATE:
The ending date of my internship program is 15-05-2010

NAME OF DEPARTMENTS TO BE WORKED:

• customer service department (01-04-2010 to 10-04-2010)

• Account opening department (12-04-2010 to 19-04-2010)
• Credit department (20-04-2010 to 14-05-2010)

OPERTAION AND ACTIVITES :

I have worked in three different departments and gained a lot of practical and theoretical
knowledge about all these departments on first day I learned about the procedure of account
opening.
I also learned about the maintaining different records and about PLS and Current account.
During my training program I also learned about preparation of check book, debit cards,
demand drafts, Mail transfer and pay orders etc

WORK ASSINGED TO ME :
During my training program I have done following tasks, which were assigned to me:-
• Account opening
• Making and issuance of credit cards
• Maintenance of different records
• Procedure of lending of agricultural and personal loans
• Car financing
• Home financing
• Foreign remittances

48
•

• NADRA verification
• Issuance of pay order and demand drafts
• Issuance of cash book

49
Structure of the marketing Department
Departmental hierarchy
Management of Marketing Hierarchy
Manager
C.S.O
Loan Manager
Recovery Officer
No. of employees
There are 3 people work in MCB Bank Ltd in Marketing department.
Marketing Operation
There are several task done by marketing department in the bank which are following.
Loans
Cash Credits
Overdraft
Advances Department
Auto financing

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. 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.

50
LOANS:
Loans are monetary assistance by a financial institution to a business, individual etc. The
loans are granted by the bank in lump sum, so these types called fixed or demand loans.
Interest is charged on the whole amount of a fixed loan.
The borrower withdraws whole the amount of loan. This type of loan is normally granted
against security of gold documents.
In case of demand loans against gold or documents, a demand promissory note for the
amount of loan is taken from the borrower loans are granted under;

A) LOAN AGAINST GOLD:

Under this type of loan, which is granted to the borrower the Head Cashier estimates the
value of Gold or Gold ornaments through an agent (Gold smith) and keeps a margin of 40
to 50 percent. After the opening the gold loan account a token is given to the borrower,
which is a bank receipt.
On repayment of loan, the gold or ornaments held as security for it, together with the
demand promissory note duly discharged is returned to the borrower and his receipt for
the gold ornament taken in the demand loan ledger. This receipts states that he ornaments
returned are complete and in order. Part delivery of ornaments is given against part
payment of a loan but care is taken that the ornaments still in banks possession fully
covers the balance of the loan outstanding. The interest gold loan is to be applied with
quarterly.

B) LOAN AGAINST PLEDGED OF STOCK:

In case of advancing such types of loans, the following precautions are dept in the mind:
i) Stock pledged must be readily saleable
ii) Products should be readily saleable
iii) iii) Advance should be within the borrows means

51
REQUIREMENT FOR LOAN:
For granting loan to any party or individual, the bank checks following particulars of the
client:
1) Credibility
2) Feasibility Report
By Credibility, bank Judges the credibility of the client by his past bank record, CBI
report etc. it is very important in making decision about giving him loan.
Feasibility report is on the running or proposed business of the client. The report enables
the bank to judge the likely return of the business.

CASH CREDIT
Cinder such cash account is opened in the name of the customer who borrows from the
bank. Customer is granted a loan up to a certain limit, sanctioned by the head office, from
which he can draw when he requires and interest is charged on the amount actually
utilized by the customer. In order to avoid the danger of idle fund, the bank charges a
certain rate of interest, even if the customer does not withdraw any amount. The rate
charged by the bank on cash credit in 46 paisa per thousand on daily basis.
The credit is usually given against the securities of goods or merchandize as follows:

1. ADVANCES AGAINST PLEDGE STOCK IN TRADE OR PRODUCTS

When a cash is granted against the pledge of stock or product, cash credit form is taken,
from the certain products or stock, but the actual pledge is created when the stock or
finished product are placed under the bank's lock or the document of title are duly
endorsed to the bank by the borrower.

2. HYPOTHECATION OF STOCK ON FINISHED PRODUCTS:

The difference between pledge and hypothecation is that under a pledge the borrower's

52
goods are placed in the bank's possession under own lock, whereas, under a
hypothecation, they remain in the possession of the borrower or guarantor and are merely
charged to the bank under documents signed by them. Even though the documents

empower the bank to take possession of the goods hypothecated, but it is possible that the
borrower may actually resist any attempt.

3. MORTGAGES OF PROPERTY:
Title deeds of immovable property are accepted by the bank only as collateral security or
alternatively as unauthorized security.
MODES OF CREDIT FACILITIES
There are two types of facilities
A FUNDED FACILITY
1) Running finance
2) Cash finance
3) Demand finance
4) Payment against documents
5) Finance against imported merchandise
6) Finance against trust receipt
7) Export finance
8) Foreign bill purchased
9) Others
NON FUNDED FACILITY
1) Letter of credit
2) Letter of guarantees
3) Bid bonds
4) Performance bonds
5) Other facilities

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 Auto leasing

Car Leasing
Auto financing

Working Capital Loans

Based on the customer’s specific needs, the Corporate Bank offers a number of different
working capital financing facilities including Running Finance, Cash Finance, Export
Refinance, Pre-shipment and Post- shipment etc. Tailor- made solutions are developed
keeping in view the unique requirements of your business.

Term Loans

MCB offers Short to Medium Term Finance to meet capital expenditure and short term
working capital requirements of our customers. The loans are structured on the basis of
underlying project characteristics and cash flows of the business.

Trade Finance Services

Under Corporate Banking MCB offers trade finance services that include an entire range of
import and export activities including issuing Letters of Credit (L/Cs), purchasing export
documents, providing guarantees and other support services.

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 i. SEGMENTATION STRATEGY

Market segmentation identifies those groups of customers whose

similar requirements can be satisfied by a distinct marketing mix.

"Segmentation includes the various activities the company undertakes to make the product
accessible and available to the customer".
They also have a banking network of more than 950 branches. If you want financial advice,
walk into any of their branches. Head office and Main office is on the in Karachi, which is the
center of business activity. Locations of MCB Bank depend on the locality around and how
much business it supports. The services provided to customers too depend on the location of
the branch and its total deposits. About the future development MCB bank is looking forward
to open its more branches in the various cities of Pakistan. This will create more flexibility
and also give the diversification to the bank.

ii. Target marketing strategy

The bank has focused to increase sales of existing products in the existing market by means of
increased and more effective positioning and targeting, delivery and promotional activities.
Some basic strategies prevail the following:

i Selling present services to new customers: Within the framework of existing customer
segments, the bank has tried to attract new customers and a higher share of market; for
example, the bank has assisted small and medium sized business particularly in the agriculture
and housing sector.

ii Selling more services to present customers: The bank has tried to develop long lasting
relationship with the existing customers. This was perhaps the most important strategy of the

55
bank that demanded efficiency. In this regard, the bank has established effective advertising
and promotion, ATM network, and Saturday banking.

iii Introducing MCB Visa and MCB Master card: The introduction of these cards was a
major marketing operation and despite the enormous initial cost this was the highly successful
exercise in terms of the market penetration that was achieved and the ultimate profitability.

iii. Product planning, development & management

Product development: The objective behind this strategy was to introduce and develop sales
of new products / services in existing markets. Some examples include:

a) MCB - Saving 365 Scheme', introduced in 1991, with the special benefit for the
business community as the profit has been paid on daily product basis.

(b) 'Fund Management Scheme' it has been offered to corporate and other customers in
order to provide a better rate of return up to 15 % per annum. One of the objective of
this service was to develop secondary market for government securities.

iv. Positioning

With internet spreading its net across the markets, financial products are being invented and
developed by companies – read as independent innovators. The selling points for all such
innovators mostly revolve around three common spokes – Speed, Secure & Service. With
multiplicity of products and innovators in the financial intermediary space, a relook on Bank’s
positioning is undoubtedly warranted. Bank need not consider these upheavals as competitive
threats to its existence. Instead, these independent innovations should strengthen Bank’s role
in the market. This is where a Bank has to position as a giant and demonstrate success models
to active innovators for their existence.

On a wider perspective, Bank should assume role of a multinational hypermarket. What to

sell, where to sell, how to sell and why to sell should form integral part of Bank’s alliance

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strategies with independent innovators. Rest of the marketing initiatives should be taken care
of by independent innovators. The bank’s sight should be focused on expanding, nurturing
and refining their customer base. Bank should invest on this front. More achievement on this
front, would be more gain through alliances with independent innovators. The more attractive
clientele Bank has, the more would be their negotiating power to derive maximum value to
the bottom line. In the alliance, Bank would be opening the market of its million customers.
Through the alliance, Banks can offer an innovative product to its clientele, for reaping the
benefits of technological growth with better experience. On intermediary role, Bank would be
cherishing its role both functionally and financially.

Drawing parallels with hyper market, promotional sales can be offered at Banking floors.
Imagine customers receiving brochures on new offering on products in their shelves. It can be
promotion of international payments during a period with lesser processing charges, mostly
during off-peak days for load balancing, or when bank looks for float funds.

Banks need not follow the alternate small players in producing such products, rather it should
position as a custodian of customer trust. It should oil the infrastructure, refine the processes
and practices of selling products. It should concentrate on improving turn around times and
understanding the customer preferences. This should be linked back to all alliance strategies.
Better understanding of the customer needs will certainly result in better alliance stories. Bank
should ratify good products and advise customers to experience the product and service
through them.

Confronting the innovators, Banks need to project the trust of millions, project the satisfaction
in customer faces while closing a service request, project achievements as a customer partner.
Independent innovators may rarely have choice but to join the wagon. Deliver the best
solution through the established level of service delivery and aim to achieve better customer
experiences. The bottom line is - trust reposed by customers through the ages is a real power
for every successful Bank. This power should drive the Banks to meet small transitional
challenges by alternate players in the intermediary space. This power should pose survival

57
challenges to average products and cultivate value propositions to innovative products, by
scripting successful alliances, with customers at one hand and innovators on the other.

v. Pricing strategy
All organizations must settle a price for the services they offer. The price for services is an
important element of the marketing mix, being an important income source for the
organization. The settlement of a correct price, both for the market and the competition, is a
significant element for the sector of financial – banking services. Another important factor to
take into consideration is the fact that the banks do not settle only the prices for individual
services, but also coordinate their prices for service packages. As the competition in the
financial – banking services has intensified, the settlement of correct prices has become an
essential element for the marketing strategy. Nevertheless it is important to remind that the
price is not a central element. There are other significant grounds, the price being only one of
the
elements of the marketing mix.
As it has been mentioned before, the price is a very important part of the marketing mix. If a
product is not given a correct price, this may affect the sales and may lead
to the product’s failure. The price and sales of the product are therefore related one to another.
There are 6 main strategies to settle the price for a product. These are:

1. Cost plus profit –

Tthis is the most sensitive strategy to costs; the institution calculates how
much the manufacturing of the product cost it, adds a margin for the profit
and requires the clients this price;

2. The settlement of the prices for “taking the cream” –

This strategy may be used for products that are very new and of high quality; it
means the settlement of the price when the product is freshly introduced on the market

58
 to “take the cream” of the demand for that product, maximizing the profit to
cover the research and development expenses,after which, later, in time, the price may
be reduced
to increase the demand;

3. The settlement of the price depending on the competition

This strategy takes into consideration the price the competition practices, thus the
price will be similar to the one of the competition, but will allow the covering of the
expenses and the profit margin;

4. The settlement of the price on the market –

The price of a product is settled depending on the price of a similar product already
existing on the market. The difference in comparison to the settlement of the price
depending on the competition is that the settlement of the price on the market might
not cover the production expenses of the product;

5. The settlement of the price depending on the value –

This strategy is based on the evaluation of the clients’ perception vis-a-vis the value of
the product answering the question “How much a client would pay for this product?”,
this strategy is then the most oriented towards marketing.

6. The settlement of the price to penetrate –

The bank will settle a low price for a product with the purpose to win fast a big quota
of the market and thus to realize a fast and substantial penetration. Entering more
detailed in the mechanisms of the price forming, first, the difference between, on one
side, the services for which the prices are settled centralized, either as a small price,
either as a price interval and which are (usually) published and, on the other side, the
services for which the prices are negotiated individually with the involved clients must
be made. For the main banking services, the approach is, usually, the following:

59
A. Centralized settled:
1. personal current accounts, including interests
2. deposit accounts, including interests
3. payments
4. cash out/cash in
5. factoring
6. leasing
7. fixed terms credits for natural persons or small trading companies
8. exchange rates
9. trade finance operations (letters of credit, guaranties, collection)

B. Individually negotiated
1. legal persons current accounts, including interests
2. currency services
3. credits (fixed or reference rate plus a margin)
4. individual services.

vi. Distribution strategy

In marketing, distribution is the means through which a seller makes his product available to
the buyer. A channel of distribution for banking should be considered in a somewhat different
manner. It can be regarded as any means of increasing the availability and / or convenience of
a service that increases its use or the revenue from its use.

During the early phase of the privatization, MCB Ltd seemed to focus on two channels of
distribution, viz:

Bank branches: This is the most important channel of distribution for the bank as the bank is
conveniently serving potential customers and from which the largest portion of business is
being generated. Following are some basic steps taken by the bank at the initial stage of the
implementation.

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The bank began with five computerized branches to provide on - line banking. One of the
facilities was the real time banking to draw and deposit amount from any of participating
branches. In order to satisfy the unique needs of net - worth clients, MCB Ltd has opened
special personal banking branches. These branches were equipped to give the investment
advisory services to local and international capital market clients. The bank started providing
Saturday banking in almost all the major cities of the country and such branches were
equipped with ATM (Automated Teller Machines) network.

vii. Promotional strategy

This tool stands for the various activities the bank undertakes to communicate its products
merits and to pursue target customers to use their services. MCB Ltd has used term promotion
to decide how information about the bank and its services can be disseminated. The Bank
widely used (still using) the four basic promotional tools for this purpose. These are:

Advertising

Personal selling

Publicity

Sales promotion

Advertising is the bank's paid non - personal presentation and promotion of goods and
services by an identified sponsor; television and media are typical examples. Bank managers
have used personal selling in order to create an impression of trust, reliance, friendliness and
familiarity. Most importantly, the bank remained quite successful in attracting customers
through sales promotion; these include the clocks, pictorial cheques books, gifts etc. I must
say that the bank's promotional tools have enhanced the perception of the bank and its brands
through increasing awareness. This awareness was essential especially when there was
increasing competition from foreign banks, and other financial institutions.

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 Structure of the Sales department

i. Department hierarchy
o Branch manager
o Operational manager
o Customer Sales Officer
o Broker
o Agents
ii. Number of employees working in the sales department

there are three employees in sales department

iii. Sales operations

Develop and implement sales plan in line with the business objectives

• Execute the sales plan including prospecting for customers and attending visits
• Manage his/ her portfolio of customers and target new customers to achieve sales
targets
• Monitor competition and customer feedback on an ongoing basis and use market
intelligence to review sales strategies, report the same to the BSM
• Drive the delivery of high quality customer experience in all branches that builds
relations and credibility
• Handle any customer issues or internal problems that require immediate attention
• Ensure adherence to operational procedures and contribute towards efficient running
of the branch on a daily basis
• Manage, motivate and provide guidance to the branch staff and support them in
achievement of their monthly sales targets
• Ensure adherence to overall KPIs and internal and external SLAs of the department
• Enhance the technical knowledge and personal skills development

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 i. Sales methodology
There are many kinds of sales methodologies being used in banks
Different types of methodologies implies for whole the year or seasonally , at
different branches , some of methodologies are as under:-

1. Building and Retaining Customer Relationships

Building and Retaining Customer Relationships methodology emphasis on knowledge and

skills necessary to start, organize, maintain, and execute a sales portfolio. Which prepares
implement a sales portfolio comprised of client records at their work as a final step. In which
sales officers works through a series of exercises and projects.

Key Factor :-

• Describe the benefits of building and retaining client relationships through a well-
managed portfolio
• Identify the steps of the portfolio process
• Assess sales potential of clients
• Set criteria that support sales and client retention
• Group clients in a portfolio
• Organize portfolio to support and track activity
• Plan for starting a portfolio at work
• Prepare for initial contact with clients

2. Cross-Selling Deposit Products

Cross-Selling Deposit Products techniques tells how to sell deposit products effectively and
how to conduct sales interactions with clients, and how to prepare for effective cross-selling
to maximize sales of deposit products and ensure client satisfaction. Course exercises provide
opportunities for students to practice cross-selling concepts through realistic client scenarios.

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Key Factors

• Explain the importance of cross-selling

• Describe typical bank products and their features and benefits
• Interpret clues and identify client needs
• Cross-sell deposit product solutions that match client needs
• Respond to questions and objections from clients
• Close the sale or refer the client

3. Effective Referrals

Effective Referrals provides branch or operations personnel with the skills to provide
confident and effective referrals. To identify sales and service opportunities and use benefits
statements to make the referral.

Bank/operations personnel who service client transactions and are in a position to identify
referral opportunities.

KEY FACTORS:

• Describe what customers expect from their bank

• Identify the four steps in the Effective Referral Model
• Identify sales and service referral opportunities
• Match referral opportunities with the appropriate financial need type
• Make an effective referral using the appropriate referral technique
• Follow up with a customer when necessary

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 4.

4. Event Based Selling

Event Based Selling will focus on using group events as a marketing tool to promote sales and
to target their market, plan group events, and use networking techniques to increase the
number of business contacts made at group events.

Those bankers whose responsibilities include attending, participating in, or hosting

community-based group events..

KEY FACTORS

Identify group event opportunities within their market

• Identify common characteristics within groups

• Identify common financial needs within groups
• Identify networking strategies to increase the number of contacts made at group events
• Maximize sales opportunities gained through group events
• Create an action plan and timeline for hosting a group event

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 5. Introduction to Relationship Selling

Introduction to Relationship Selling introduces relationship selling process, and the skills and
techniques that support a client needs-focused sales approach. A marketing officer can
prepare for the sale and conduct an effective sales interaction with clients, and an overview of
each step in the relationship selling process to guide sales interactions with clients. Which
involves with personnel sales activities in a retail-banking environment.

KEY FACTORS

• Identify what clients expect from their bank

• Describe sales skills and techniques to successfully move through the sales process
• Examine the steps used to respond to client objections
• Identify techniques to effectively sell against the competition
• Determine actions to follow-up with a client and ask for a referral

6. Profiling Mortgage Prospects

It is a knowledge which need to profile and refer mortgage loan clients to a product that
matches their needs. Many of the real estate products available in the current market will be
covered, including Federal Housing Administration (FHA), Veterans Administration (VA),
and conventional mortgage loan

Bank employees who or are referring or prescreening prospective mortgage loan clients are
more capable with it .

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KEY FACTORS

• Describe features and benefits of conventional fixed rate, adjustable rate, FHA, and
VA loans
• Identify client profiles that generally benefit from each product type
• Use key questions to help clients determine beneficial mortgage financing options
• Effectively refer mortgage loan application clients to the appropriate person
• Identify mortgage-lending regulations that apply during the prescreening and referral
process

7. Sales Coaching in the Bank

Sales Coaching in the Bank will helps to identify sales coaching opportunities and basic
techniques used to incorporate knowledge and skill building into a team's workday routine.
These skills needed to support a team and develop a strategy to support knowledge and skill
building for each job function. Banker examine the common types of goals used in the
banking industry and address specific factors to consider when setting goals for a specific
team and individual team members. Finally explore how to support team members in reaching
their sales goals.

KEY FACTORS

• Identify their role as a sales coach

• Provide techniques and opportunities that will support their sales team
• Coach team members based on their individual job functions
• Set and support team goals

Successful Sales Campaigns

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How to effectively run a sales campaign using step-by-step techniques for involving each staff
member in various aspects of the sales campaign. Banker use this to set campaign objectives
and use demographic information to help identify clients who are in need of the product that

is being promoted. Its is methodsto handle working on simultaneous campaigns, and for
shopping competitive banks and incorporating this into campaign methods.

KEY FACTORS

• Use demographic information to match bank products to the client base

• Develop a sales campaign that captures the attention of the bank's clients
• Identify the regulatory limits of bank product advertising
• Prepare bank personnel for the sales campaign
• Create and maintain enthusiasm for the sales campaign
• Use creative methods to track the progress of the campaign
• Evaluate the results of the promotion after it has ended

Teleconsulting

Teleconsulting is designed for bankers who are familiar with the basic sales cycle and want to
use the telephone as a strategic tool to enhance their service and sales performance. It helps to
understand the unique challenges of telephone sales and learn specific techniques to overcome
the common obstacles to success and maximize the advantages when using this sales
approach.

Teleconculting is most appropriate for banking professionals who need to make outbound
telephone service and sales contact with an assigned customer portfolio.

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KEY FACTORS

• List the business reasons for using teleconsulting

• Describe the common challenges of teleconsulting
• Identify service and sales potential for existing customers
• Plan and organize teleconsulting contacts
• Establish rapport and gain customer interest
• Describe the legal parameters for teleconsulting practices

• Conduct an effective teleconsulting interview

• Make an effective teleconsulting product presentation
• Use scripts to handle common teleconsulting objections
• Close a teleconsulting contact effectively
• Describe important teleconsulting follow-up tasks
• Set realistic teleconsulting performance goals

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 Type of selling
Telemarketing

MCB bank doesn't wait for customers to come into its branches to open accounts, apply for
loans or learn about new bank offerings. Telebanking is not new MCB bank offer customer
24-hour access to their accounts and to bank services via automated inbound call centers. For
example, bank customers can call in to get checking account balances or transfer money from
one account to another. MCB bank also sell credit card services through outbound calling
campaigns. However, telemarketing bank products, such as checking accounts, loans, CDs
and other investment opportunities to consumer and business accounts is new attraction in
banking sector This process, coupled with sophisticated inbound, outbound and blended call
center technology, is producing results far exceeding original projections. \

Door to Door Selling

MCB Bank use door to door selling for the auto financing and now for the credit
cards and also for the attractive new business accounts. This technique gains competitive
advantage to the bank perspective.
Door to Door marketing means the agent of the bank target the customer and
focuses his need and present the banks product according to the client portfolio. Products like
Auto financing
Agricultural loans
Credit/visa cards

Product Based Selling

MCB launches the products with the requirement of current era, current
situation is highly competitive so MCB announced business account & Foreign currency
account. Saving extra account , saving 365 gold for the economy class and specially to attract
the salary persons.

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 CUSTOMER BASED SERVICES

Customers are the ‘meat of the business,’ companies should put value in building good
customer relationships. Once bank ables to establish connections, It keep loyal customers who
continue doing business with and bring more people into the business good customer
relationships drive the business to success. Just make people believe in Bank’s ability to
satisfy their needs and fulfill their expectations as well as in bank’s products and services. In
the process of finding people who would believe in bank, consider making a relationship with
them and bank will not have to spend huge amounts of money just to attract more customers.

Relationships are developed over time and are not built overnight. It is not a one-time
experience with customers. That is why effective marketing plans include strategic activities
that entail building good customer relationship apart from developing the product or adding a
new product line to the market. In what ways can business develop strong connections?
Below are some helpful techniques for bank in building customer relationships.

Build Network

Every business probably has a desire to grow and expand its operations. One way to achieve it
is to build the network of customers. The bank should not just focus on promotional activities
and advertising programs but must take efforts to expand the network. A Bank’s network may
consist of business associates, acquaintances, existing and potential customers, business
partners or clients, suppliers, and contractors. Even family members and friends are part of
that large network of the business.

The market is so huge a bank is not able to reach out to everyone who can benefit from their
product or service. There are a lot of prospective customers out there waiting whose needs
bank’s business can address. This is possible through the process of networking.

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Keep in Touch with Customers Regularly

When we build good relationships with people, permanence is never a guarantee. Customers
may come and go for some reasons, even with the most loyal of your customers. That is why
once you have built a relationship with them, do not end from there. The process is
continuous; a business has to constantly communicate with their customers. Communication
should be done early and regularly.

After attending networking events and meeting new acquaintances, make it a point to initiate
the next encounter and always make a follow-up. For existing customers, provide them with
the latest updates of new products and any of your marketing programs. It is also a way of
educating them with the latest market trends and keeping them up-to-date with industry
technology.

Reward Loyal Customers

The first paragraph of this article mentions keeping loyal customers and in turn, they bring
more people in the business which in fact, is a reality. A bank should never disregard the
value and potential of loyal customers. These people contribute a lot in network expansion.

If banks reward loyal, repeat customers, they will pay you back by bringing in more
customers to itsr business from their network of connections. If bank thinks about it, the
process becomes effortless marketing on its part. Banks loyal customers become best
salespeople and marketing agents.
A Bank that is able to sustain devoted and dedicated customers in the business has already
developed a solid reputation in the industry it is in. Then again, the secret is to always
constantly communicate with them and keep new ones coming.
Develop relationships with people who do not just use your product but are interested about
what you can do for them. Keep the connection alive and always regard them with value, and
they will be more than excited to tell others about their positive experiences and would want
these people to also experience what they just did. It is but a domino effect.

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TECHNIQUES OF RETAINING CUSTOMERS

The best bank customer retention stategy for existing customers is to classify each type of
customer (silent attrition, ideal and unhappy) and create appropriate initiatives to change their
behaviour.

For instance customers in silent attrition are those that have reduced or stopped using a
product but where the account is still open. Examples for instance are credit card accounts
with little or no spending. For these customers you must determine why they are no longer
using your product (are you are their "back of wallet" card) and create initiatives to change
their behaviour.

Examples of Existing customer management programs include

• Product design evolution

• Payment automation optimisation
• Active customer complaints management
• Cross-sell leads management
• Product activation
• Usage stimulation
• Preapproved products
• IVR Messaging Offers
• Leveraging sponsorships
• Leveraging affinity marketing
• High value relationship programs
• Low value relationship programs
• Local area marketing
• 3rd Party and Sales consultant commissions
• Driving customers to highest ROI channel mix
• Product bundling
• Product Upsell
• Silent attrition
• Collections process
• Move and Follow
• Differentiated levels of service
• Optimizing product mix

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 TECHNIQUES OF ATTRACTING NEW CUSTOMERS

The single largest group of customer retention strategies that can be implemented in the New
section of the customer lifecycle is customer on boarding. Customer on boarding is the
process of bedding a customer into your organization and includes ensuring that their personal
data is correct, that they understand the products they have purchased and how to quickly
contact the organization.

We have proved time and again that customers that are properly on boarded will stay with the
company longer and spend more money than other customers.

Other areas of New customer management include:

• Data integrity management

• Cross-sell leads management
• Product benefit education
• Product activation
• Payment automation optimisation

WAYS TO HANDLE DIFFICULT CUSTOMERS

Point out the customer problem

Customers are the king of the business and they are loyal for the business perspective and its
growth. Customer should satisfy with the bank services. If customer is no satisfied with the
bank then it is recommended that point out the customer problem and try to solve the
customer problem to satisfy the customer need.

1. Validate the customer's anger - before solving or explaining anything.

Customers that they matter the employee can say, "I don't blame you for being angry,"
or "Of course you're angry!" The employee must avoid saying "I'd be angry, too!" or anything
else that shifts the focus away from the customers. Their anger will continue to subside if they
know the employee takes it seriously.

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 2. Focus on the solution, not on the person.

Focus on the solution, not on the person keeps the employee from feeling personally
attacked, and also keeps customers from blaming the employee for the problem. The
employee can say such things as, "I can replace this or refund you. Which would you
prefer?" or "We can credit your account 20 Rupees, because of the ten-rupees error," or "I
can schedule another repair-person right now. What day and time would work for you?"
Within the limits set by company policy or resources, the employee is guiding customers
toward a solution that meets their needs.

3. Ask for follow-up.

Ask for follow-up that the company really wants to make sure the problem was solved. The
employee may say, "Here's my business card. Please call and let me know when it arrives," or
"Can we call you to make sure the error in your account was corrected?" or "Can we call to
make sure the repair-person showed up on time and did a good job?" Although customers'
anger very likely has subsided by now, this step addresses any frustration they may feel about
having to take time to complain about the problem.

Thank the customer for taking the time to point out the problem.

Thank the customer for taking the time to point out the problem may surprise and please
customers. It shows that the employee - and, through him or her, the company - cares about
customers. The employee might say, "Thank you for letting us know about the problem," or
"Thank you for letting us solve this problem," or "I appreciate you letting us help you with
this." This step closes the transaction on an upbeat note for both the employee and the
customer.

By showing your employees how to use these steps, you will help them manage anger - both
the customers' and their own.

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 CRITICAL ANALYSIS

During my internship program I got lot of knowledge from different departments and
observed that bank perform the different kinds of theoretical concepts practically. The top
level management in bank like branch manager and operation manager perform different
kinds of managerial roles, functions, tasks as well as duties .observing that manager has
strong interpersonal and decisional skills and also assign the duties at middle & lower level
management. Bank officers and staff have positive attitude however keeping in view the
customer’s need and differential .customer oriented products and services have been designed
in the way that it meets the requirement of the customer. Product differential strategies have
been adopted in banks as bank offers product like PLS account , current account, agricultural
loans and car financing etc. if MCB produce any other product then it would have differential
edge. However there is always a space of new competitor in any kind of business so different
Islamic banks have been entered in the banking sector as their infrastructure deals with all
kind of solutions for the customers as consumer banking and cooperate banking which is a
huge threat for the bank. There is a threat of substitute product or services for the banks i.e in
car financing, bank deals with other financial intuitions (e.g EFU insurance & Adamjee
insurance etc) currently operating are also dealing in consumer products providing them on
different terms and conditions. These can act as substitute for the customers , therefore it is
important to keep an eye on these companies and revise the policies accordingly.
Customer relationship management is most important aspect for the bank as bank is mostly a
service oriented organization but MCB less emphasizes on CRM as compare to other banks
like Alfalah , Soneri and Askari banks. One window operation is not available in bank .
customer has to wait a lot for checks, pay orders, demand draft like transactions ,
conventional products being present to the customer
Banking organization is to create valuable system by interacting with its environment,
customers, constituents, suppliers, technology , competition economy , government etc so all
in these factors managing risk is actually managing the organization :planning , organizing ,
directing and controlling organization systems and resources to achieve objectives. Managing

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risk must come from within and act to change the organization and its response to changes in
the environment
Now many banks are hiring experts of risk management to secure their precious assets,
National bank of Pakistan has also created risk management group at head office and as well
as regional lever to save the best interests of the bank and enhance the chances of investments
The middle management should need to have basic understanding about complicated
management processes, crisis management tools, marketing/product strategies , financial and
treasury management techniques, financial discipline , soundness and transparency of banking
system.
At the end there is an urgent need of having TQM for MCB as well as for other banks. At the
dawn of WTO and increasing chances of investment banking among the SARRC countries the
TQM is need of the hour.

SWOT analysis of organization in the business sector

STRENGTHS

1. MCB operated by Mansha’s Group

2. Highest return on equity
3. MCB is a customer bank of round about 4 million.
4. MCB has an efficient network infrastructure.
5. Focusing on development of new customer products.
6. Strong relations with customers
7. Internet based interlink banking
8. 700 online branches
9. AA+ rating

10. Help to earn large foreign exchange

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WEAKNESSES

1. Most employees are not satisfied with their jobs

2. NADARA verification is time consuming process

3. Lack of providing quick services.
4. Due to decreasing in discounts rates of agricultural gains , administrative expenses have
been increased
5. Decentralization
6. Lack of self-motivation and promotion of employees
7. Different attitude towards senior and junior staff

OPPORTUNITIES

1. MCB has an opportunity to become global.

2. To enhance Islamic banking in all over the country.
3. Rectifying risk of mistakes through proper training
4. focusing more on consumer banking
5. MCB can gain lots of profit through agricultural financing

THREATS

1. Today’s economic conditions.

2. Political instability.
3. Fastest growing interest rates.
4. Consumer losing trust in banks
5. Threat from competitors
6. SDP rules and regulations.

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 Conclusion & recommendations for improvement

RECOMMENDATION
•

• I suggest that MCB should computerized its branch transactioned and record like UBL
which can minimize the burden of paper work and would be convenient in
operationalization of work.like UBL Bank.
• MCB should provide all its branches the internet facility which would increase its
customers.
• Management should make policies to recover bad debts
• MCB should establish a reception section in main branches for the convenience of
customers who are seldom, rare , or first time visitor
• MCB should provide best training facility according to international banking standard
• Internal control should be improved
• Try to minimize threats and weaknesses
• MCB should develop strong relationship with customers
• Positive attitude should be developed towards senior and junior staff to create healthy
team work environment
• Standard operation procedure should be develop for the casual/long leaves for the staff
• One window operation should be adopt like ALFALAH & ASKARI banks.
• New products must be advertise for the awareness of customers
• Fair recruitment polices should be adopted
• Minimize decentralization
• Should provide mobile banking facility with batter services.
• Provide best products for customer satisfaction.
• Promotions and rewards are necessary for the moral encouragement of staff

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 CONCLUSION

According to my practical and theoretical knowledge gained during my internship program

and from this report . I concluded that MCB is making progress day by day , the profit of
MCB is growing rapidly. The profit of MCB is growing rapidly. The main object of the MCB
is to maximize the shareholders wealth. I conclude that if the MCB would be able to adopt
above mentioned recommendations, then MCB leads towards success. I also concluded that
MCB should restructure its infrastructure , because self –motivation of employees plays an
important rile in success of every organization.
MCB should focus to enhance customer satisfaction through new products and services.
In the end I concluded that MCB is fastest growing bank in the banking industry . MCB has a
very bright future and capability to expand its business internationally
.

Reference & Sources used

Following Sources and references are used for the Internship Report.

From the website of MCB Bank Limited

www.mcb.com.pk

Articles and Reports

From the Bank Branch (MCB Bank Ltd university Road SARGODHA)

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Annexes

Letter of undertaking

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Internship Letter

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