Chapter - 1

INTRODUCTION OF STUDY

1.1 BACKGROUND OF THE STUDY

Internship training program during M.COM is necessary for the partial fulfillment of
the completion of Degree of Master in Commerce as per HEC (Higher Education
Commission) requirement. It is necessary for me to complete an internship session of
about 8 weeks in some manufacturing or service industry relevant to my area of
interest and specialization. So, I choose the Banking field because I have the interest
in this sector because my study background is related with this sector.
1.2 PURPOSE OF THE STUDY
Internship is the corner stone experience that provides me with hands-on, real-world
experience in a work setting. Ideally, internship will enable internees to:

 Use my knowledge and skills get from the classroom,

 Discover where further competence is needed,
 Convert the bookish knowledge into practical life
 Become better acquainted with the types of work settings in which such
Competence can be applied.

1.3 SCOPE OF THE STUDY

This study will facilitate regarding the working of Banking sector of Pakistan because
most of the teachers during their lectures use the examples of Banks like MCB,
National Bank, UBL, Bank Alfalah and many others, Students should study about the
functioning of such Banks. It will in future.

1.4 METHODOLOGY
There are mainly two methods that are used for the collection of data.
 Primary Data
 Secondary Data
(A) Primary Data

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  Observation of functions of Branch operations on the spot.
 Observation of different processes of Branch on the spot.

(B) Secondary Data:

 Internet is very helpful for me to study more about banking sector of

Pakistan.

1.5 SCHEME OF THE REPORT

Chapter 1
This chapter encompasses the background of the study. It also looks into the purpose,
scope, limitation, objectives, methodology and scheme of the study.

Chapter 2
It gives over all view of the Bank. In this I have discussed comprehensively the
history of Banking as well as historical background of MCB, its present operations,
mission as well. Some light has also been shed on management and organizational
structure of MCB.

Chapter 3
This chapter contains what I have learned during internship at MCB.

Chapter 4
This chapter contains SWOT analysis, critical analysis and financial analysis of MCB.

Chapter 5
It summarizes the conclusions and recommendations based on the analysis.

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Chapter - 2
REVIEW OF MCB

2.1 HISTORICAL BACKGROUND

MCB Bank Limited formerly known as Muslim Commercial Bank Limited MCB
Bank was incorporated by the Adam Jee 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 South Asia
After the partition of the Indo-Pak subcontinent, the bank moved to Dhaka (then the
capital of former East Pakistan) from where it commenced business in August 1948.
In 1956, the bank transferred its registered office to Karachi, Where the head office is
presently located. Thus, the bank inherits a 59 years legacy of trust of its customers
and the citizens of Pakistan.

2.1.1 Nationalization

In January 1974, the Government of Pakistan nationalized MCB following the Banks
(Nationalization) Act 1974. MCB was the only bank which was nationalized solely as
neither it nor any other bank being merged with it due to its consistent and firm
policies and its sound position.

2.1.2 Privatization

A wave of economic reforms swept Pakistan in the lattes introducing the Need for
privatization of state owned banks and companies. This was the first bank to be
privatized in 1991 and the bank was purchased by a consortium of Pakistani corporate
groups led by Nishat Group. Nishat Group is one of the leading and most diversified
business groups in Pakistan. The group has strong presence in the most important
business sectors of the country such as banking, textile,cement and insurance.
Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has
played instrumental role in its success. In recognition of Mr. Mansha’s contribution,

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the Government of Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most
prestigious civil awards of the country.

2.2 ABOUT MCB

Over the years MCB has developed strong relationships with its customers by
understanding their needs and treating them with respect, dignity and importance. The
driving force behind its commitment and services is its focus on customers ensuring
that it not only meets, but also exceeds their expectation.
They strive to achieve excellence by ensuring that every moment of their time is spent
in adding value, making sure that they do things right, first time, and every time. With
the quest of quality MCB has always taken initiatives bringing banking into a new
arena; from cash to the convenience of plastic; from branch banking to internet
banking and from face to face customer interaction to online accessibility.
MCB now focuses on three core businesses namely Corporate, Commercial and
Consumer Banking. Corporate clientele includes public sector companies as well as
large local and multi national concerns. MCB is also catering to the growing middle
class by providing new asset and liability products. MCB Bank Limited (Formerly
Muslim Commercial Bank Limited) has a solid foundation of over 63 years in
Pakistan, the Bank provides 24 hour banking convenience with a network of over
1000 branches, the largest ATM network in Pakistan over 450 ATM locations in the
market.
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.

2.3 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. Mian Mohammed Mansha is
chairman & chief executive of the company with a team of 10 directors and 1 vice
chairman to help in the business control and strategy making for the company.

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A team of 10 professionals is handling operational management of the bank. MR.
Mian Mohammed Mansha also heads this team.
The different operational departments are:
 Consumer Banking & IT Division
 Financial & Inter Branch Division
 Banking Operations Divisions
 HRD & Legal Division
 Financial Control & Audit Division
 Credit Management Division
 Commercial Banking Division
 Corporate Banking Division

2.4 VISION & MISSION

Vision Statement
“To be the leading financial services provider, partnering with our customers for a
more prosperous and secure future.”(2)

Mission Statement
“We are a team of committed professionals, providing innovative and efficient
financial solutions to create and nurture long-term relationships with our customers.
In doing so, we ensure that our shareholders can invest with confidence in us.”(3)
 Providing innovative
 Efficient financial solutions
 Long-term relationships with our customers
 Shareholders invest with confidence

2.4.1 Values of MCB

Integrity
We are the trustees of public funds and serve our community with integrity. We
believe in being the best at always doing the right thing. We deliver on our
responsibilities and commitments to our customers as well as our colleagues.

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Respect
We respect our customer’s values, beliefs, culture and history. We value the equality
of gender and diversity of experience and education that our employees bring with
them. We create an environment where each individual is enabled to succeed.
Excellence
We take personal responsibility for our role as leaders in the pursuit of excellence. We
are a performance driven, result oriented organization where merit is the only
criterion for reward.

Customer Centricity
Our customers are at the heart of everything we do. We thrive on the challenge of
understanding their needs and aspirations, both realized and unrealized. We make
every effort to exceed customer expectations through superior services and solutions.

Innovation
We encourage and reward people who challenge the status quo and think beyond the
boundaries of the conventional. Our teams work together for the smooth and efficient
implementation of ideas and initiatives.

2.4.2 Awards and Achievement

Euro money Awards
Best Bank in Asia Award 2020
MCB has been awarded as a Euromoney Award 2020 for the “Best Bank in
Asia".Best Bank in Pakistan Award 2006
MCB has yet again received the esteemed Euromoney Award for the “Best Bank in
Pakistan”.
It is the only bank to receive the Euromoney Award for Excellence for the sixth time
in the past seven years.

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  Best Bank in Pakistan Award 2005
 Best Bank in Pakistan Award 2004
 Best Bank in Pakistan Award 2003
 Best Bank in Pakistan Award 2001

Best Domestic Bank Award 2000

MCB was awarded as a Euromoney Award 2000 for the “Best Domestic Bank in
Pakistan.

Asia Money Awards

The Best Domestic Commercial Bank Award 2005
MCB Continues to shine as once again Asia Money declares MCB as "The Best
Domestic Commercial Bank in Pakistan" for the year 2005.
The Best Domestic Commercial Bank Award 2004
MCB has a distinction of winning the Asia Money 2004 award for being "The Best
Domestic Commercial Bank in Pakistan".

2.5 DIVISIONS OF MCB

2.5.1 Agriculture Division
Agriculture division deals with the loans and development of agriculture sector. It has
the responsibility to manage all the affairs related to agriculture sector. This division
works for the development of agriculture in the country.

2.5.2 Audit Division

Audit Division is responsible for the inspection of financial affairs. It also keeps a
check over the irregularities in different branches. They are delegated enough
authority from the Board of Directors so that it works without pressure. It appoints the
audit teams and all the irregularities pointed out are reported to this division.

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2.5.3 Business Development and Marketing Division
This division works under the Head Office (H.O). Its main concern is to develop the
business of the bank related to the introduction of new products. Changes in the
existing schemes in favor of the bank and customer are also the responsibility of this
division.

2.5.4 Central Accounts Division

Central Accounts Division takes care of the accounts of branches and records all inter
branch transactions and transaction of branches with HO. Calculation of profit on the
account of branches maintained with HO is also the responsibility of this division.

2.5.5 Corporate Affairs Division

Corporate affairs division deals with the affairs related to public limited companies. It
includes financing of large and specialized corporations projects. In short it manages
the corporate financing. It also directly controls all those branches, which are
designed as corporate branches.

2.5.6 Credit Management Division

This division has the duty to make and alter the credit rules and regulations in
accordance with the prudential rules and regulations formed by SBP. It deals with all
credit proposals submitted by advances department of different branches and designs
their limit of loans. This division also carries out marketing activities about the loan.

2.5.7 Finance and Treasury Division

It manages all the assets of MCB. Management of income tax and central excise duty
is the function of this division. The most important function is to announce the profit
rates on different schemes from time to time.

2.5.8 Foreign Trades and Exchange Operation Division

This division is responsible for managing foreign currency reserves for day-to-day
requirements of the bank. It frames all the rules and regulations regarding foreign
exchange and opening of L/C in the light of prudential regulations of SBP.

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2.5.9 General Service Division
General service section is concerned with construction of building for branches of the
bank at various localities. It is also concerned with the purchase of vehicles and other
accessories for the banks. The supply of stationary and equipment is the responsibility
of this division.

2.5.10 Human Resource Development Division

This division manages all the methods concerns with the human resources
management like selection, promotion, transfer and retirement etc. It settles all the
matters relating to salaries, increments, bonuses, and fringe benefits. It maintains
records of employees and conducts performance appraisal and disciplinary actions.

2.5.11 information Management Division

Information Management provides all the information to the top management. This
division monitors the information system of all branches and is playing a very
important role in computerization of MCB.

2.5.12 Industrial Credit Division

Previously it was a part of credit management division. It is concerned with advances
to various industrial units.

2.5.13 International Division

This division deals all the matters relating to branches located in foreign countries. It
looks after all the matters, which MCB carries out with banks and financial institution
of foreign countries. It also manages the religious matters of hajj and Umrah.

2.5.14 Investment Banking Division

This division looks after the investment of bank in various schemes introduced by the
bank. It deals with capital market at national and international level and also manages
syndicate in case of issuing of shares etc.

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2.5.15 Islamization Division
During the era of Late President Gen. Zia, steps were taken to abolish interest from
the bank transaction, MCB developed this division. This department deals with Zakat
deduction, Iqra surcharge, Qarz-e-hasana etc. This division also gives suggestions on
the adoption of interest free banking in Pakistan.

2.5.16 Legal Affairs Division

This division deals with the legal affairs of the bank. It handles all the cases filed
against the bank. It also gives suggestions in framing of new rules and regulations to
other division.
2.6 ORGANIZATIONAL STRUCTURE
It is the graphical representation of authorities and responsibilities. 4 It defines the
various level of management and its span of control. (It refers to the number of
personnel a manager manages by virtue of his post.)
MCB is a very large and complicated organization having many divisions, branches,
and administrative offices all over the country and outside the country. MCB is
running its operations successfully since 1947 and reached to the top of the banking
industry. Normally it is said that MCB has no specific organizational structure, but it
is not true because no bank without its proper organizational structure stand No. 1 for
so many years. However, MCB policies are very flexible and changes frequently
according to the situation.
MCB is a very large organization with many branches in different areas of the country
and different divisions under the Head Office. So it is managed through broad span of
control with decentralization of authority. The tendency to disperse decision-making
authority in an organization structure. All the Executives, including Senior Executive
Vice Presidents (SEVP`s), General Managers (GM`s), Regional Managers (RM`s),
Vice Presidents (VP`s), and Branch Managers are delegated with powers and
authorities, which are fairly, match able with their responsibilities and duties they
perform.
Still many decisions of small importance, are made by Top Management for control
purposes. So there is a mix of centralized and decentralized authority in this respect.

10
The tendency to restrict delegation of decision making in an organization structure,
usually by holding authority at or near the top of the organization structure.

Where practical training supports necessary, institutional training so that the trainee
can understand the actual job cooperation. It also provides them opportunity to work
in the branch environment facing customers practically and handle them.

2.7 PRODUCT & SERVICES

In order to achieve long-term goals of expansion and penetration in the market. Bank
introduced various new products for its customers, which cater to the needs of various
segments of the society. In order to do so, a constant process of market research,
evaluation and development of New products was started which resulted in
introduction of various new products which were earlier not introduced by any other
Bank in the country. Introduction of these products was indeed a major source of
penetration for the bank and turned out to be a differential factor as compared to other
banks.
The services provided by MCB Bank are:
 Personal Banking
i. Deposits
ii. Rupee Traveler Cheques
iii. Remit Express
Corporate Banking
Investment Banking
 Personal Banking
2.7.1 Deposits

 Khushhali Bachat Account

 Mahana khushalii Account
 Pak Rupees Saving Account
 Pak Rupees Current Account
 Pak Rupees Term Deposit
 Saving 365
 Foreign Currency Saving Accounts

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 Foreign Currency Current Account
 Foreign Currency Term Deposit
 Dollar Khushhali Account
 Rupees Maximize Account
 Capital Growth
 Call Deposit
 Khushali Bachat Account

Khushali Bachat Account, a Rupee savings account is one of MCB Bank’s most
popular products. Due to the low initial deposit, the account can be opened by people
from all walks of life and still avail the facility of daily product profit calculation. The
account offers unique and attractive benefits to the Account holders.

 Mahana Khushali Account

MCB Monthly Khushali Scheme provides you with a steady income every month.
Just purchase a Monthly Khushali Certificate and you will enjoy a steady income of
your total deposit every month.
o Minimum deposit of Rs. 50,000.
1. Your deposit to remain fixed for five years.
2. You can avail a credit facility up to 75% of the total deposit value.
3. Profit will be paid on a monthly basis through Cash, Pay Order,
4. Demand Draft or Direct Debit to your Saving/Current Account.

 Pak Rupees Saving Account

MCB’s Pak Rupee Savings Account offers you attractive returns on your Pak Rupee
investment.

In addition, you have access to a countrywide ATM network convenient cash

accessibility 24 hours a day. The facility also provides you with unlimited daily
transactions with a limit on maximum withdrawal amount through the ATM
machines.

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

o Open a Saving 365 Account with a minimum initial deposit of Rs. 500,000.

o Your Profits are calculated on daily product basis payable on a half yearly basis.

o No restrictions on the number of withdrawals.

o You can avail a credit facility up to 75% of the total deposit value.

 Foreign Currency Current Accounts:

MCB’s Foreign Currency Current Account offers you the convenience of unlimited
withdrawals i.e. access to your funds whenever you want without any notice. There is
no limit on the number of transactions you make in a day.

o You can invest in any of the four currencies i.e. US Dollar, UK Pound Sterling,
Japanese Yen or Deutsche Mark.
o Your foreign currency account is Zakat and withholding tax exempted.
o You can avail a credit facility up to 75% of the total deposit value.

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 Foreign Currency Saving Accounts

MCB’s Foreign Currency Savings Account offers you attractive returns on your
Foreign Currency investment.

o You can invest in any of the four currencies i.e. US Dollar, UK Pound Sterling,
Japanese Yen or Euro.

o Your foreign currency account is exempted from Zakat and withholding tax.

 Foreign Currency Term Deposit

Place your investment in a MCB Foreign Currency Term Deposit and receive a higher
rate of return. Avail your choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3
years, 4 years and 5 year term deposits.

 Dollar Khushhali Account

The Dollar Khushali Account, a Dollar based account was introduced in 1993 at
selected MCB Bank branches. Today, you can open a Dollar Khushali Account at
over 200 branches in Pakistan.
o You can open a Dollar Khushali Account with a minimum initial deposit of US
Rs. 100.
o Your Profits are paid on daily product basis payable half yearly on interest
calculated at the Dollar Savings Rate.
o No prior notice required for withdrawal.
o You can avail a credit facility up to 75% of the total deposit value.
o Your account is not subject to Zakat.

 Rupees Maximize Account

MCB Rupees Maximize Account is our latest PLS saving Account specially made to
help MCB Foreign Currency Account holder to convert their account into Pak
Rupees. It gives individual, businessmen and Corporation the chance to earn a high
rate of return on their deposits in Pak Rupees. The account offers unique and
attractive benefits to the account holder:

o Profits calculated on a daily product basis.

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o No restrictions on number of withdrawals.
o No restriction on initial deposit.
o Free ATM Card to each customer.
o Locker facility free of cost
 Capital Growth

In this scheme, deposits are to stay with the bank for five years and every six months
the profit is calculated and added into the initial deposit in this way it is a form of
compounding. The profit rate on capital growth certificate is 4.00% Minimum
Deposit of 10,000

 Call Deposit

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

2.7.2. Rupee Traveler’s Cheques

Ideal for Every Deal

MCB Bank has been at the forefront of providing it’s customers with new and
innovative products and financial instruments that are safe, secure and profitable.
MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash for
traveling and travel related purposes. The product has been extremely popular and is
preferred over cash by customers while traveling and in all walks of life. MCB Rupee
Traveler's Cheques- The safest way to Carry Cash

Rupee Traveler’s Cheques Features:

 Easily available: Buy them from any of the designated branches in Pakistan. 
 As good as cash: MCB RTCs are safe to carry and can be used without any
inconvenience especially by Travelers.
 Easily encased: At any designated MCB branch
 Easily refunded: in case of loss or theft, you can get the full amount back.

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 Exclusive security features: Due to special printing and safety precautions,
Cheques cannot be duplicated. 
 Denominations: Available in denominations of Rs 1000, Rs 5000, and Rs 10,000
and gift cheques of Rs 500.
 Valid until Used: Validity of Cheques indefinite.
 24-hour Service available at Airport MCB booths Karachi, Lahore & Islamabad.

 More than 900 MCB Authorized branches are selling and purchasing Cheques all
over Pakistan.

 MCB Rupee Traveler's Cheques are also available at the counters of Foreign
Banks such as ABN Amro and HSBC and private bank i.e. Bank Al-Habib.

2.7.3 Remit Express

The fastest way of getting your money across to Pakistan. Remit Express offers low
cost remittance from U.A.E. and Saudi Arabia. The receiver i.e. business associates or
relatives receive drafts within 72 hours. MCB Remit Express has been specifically
designed to meet the needs of the expatriate Pakistani community residing in the Gulf
countries.

Remit Express Features

 Easiest and safest way to remit funds.

 Remittance within 24 to 72 hours.

 Personal delivery to the beneficiary.

 Delivery confirmation to the remitter.

 Message facilities for both parties.

 Your beneficiary will receive the amount even if he/she does not have an MCB
account.

2.8 Corporate Banking

MCB has its 20 corporate branches in major cities of all over the Pakistan. Its area
offices are located in Karachi, Lahore, and Islamabad. The MCB corporate banking

16
 team consists of enthusiastic, cooperative professionals with the requisite expertise to
take care of your banking needs.
Corporate branches have been established in the three prime cities where teams of
obsessive managers have been appointed. These managers have been delegated with
the inclusive responsibility for managing the risk of there allocated portfolios, acting
as a liaison between you and the bank, and providing you with the entire range of
products/ services presented by the bank. The corporate bank offers an absolute range
of banking products/ services that can be generally separated in to the following
categories
i. Working Capital Loans
ii. Term Loans
iii. Trade Finance Services
iv. Cash Management

2.8.1 Working Capital Loans

The corporate bank offers a number of different working capital financing facilities
together with running finance, cash finance, export refinance, pre-shipment and post-
shipment etc.
2.8.2 Term Loans
For meeting the capital expenditure and short term working capital requirement of
customers, bank offers short to medium term finance. The loans are structured on the
basis of underline project characteristic and cash flows of the business.
2.8.3 Trade Finance Service
It include entire range of import export activities including issuing letters of credit,
purchasing export documents, providing guarantees and other sport services.
2.8.4 Cash Management
The network of abut more than 1200 branches in Pakistan enables MCB to collect and
disburse payments efficiently with its cash management services. It also enables the
bank to offer you a choice of paper based on electronic fund transfer solutions
including collection amounts, cross branch on-line transactions.
2.9 Investment Banking

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

2.10 ONLINE SERVICES

2.10.1 Automated Teller Machine (ATM)
MCB introduced automated teller machine in 1995 to provide 24 hours cash facility to
its customers. Over the years it got great success and this encouraged the bank to
expand its ATM Network. Now in 2003 MCB ATM network is the largest ATM
network in Pakistan with over 160 ATM branches in different cities of Pakistan and
158 online branches where ATM cards are issued. MCB placed its ATM in Karachi,
Lahore and Islamabad airports to facilitate its customers.
MCB has two kinds of ATM cards with different cash with drawl limits.
2.10.2 MCB ATM Regular Card
The MCB ATM Regular Card allows withdrawal up to Rs10, 000 per day and a
maximum of 3 with drawl per day per card.
2.10.3 MCB ATM Gold Card
The MCB ATM Gold Card allows with drawls up to Rs 25,000 per day and a
maximum of 6 with draws per day per card. The card holder has to make at least two
transactions to withdraw the full amount of Rs 25,000.
2.10.4 MCB Master Card
(The Future of Money)
Since the beginning of time, people have tried to find more convenient ways to pay,
from gold to paper money and checks. Today, money is moving away from distinct

18
hard currencies and towards universal payment products that transcend national
borders, time zones, and, with the Internet, even physical space.
“Plastic or virtual’’ money, credit, debit, and electronic cash products, inevitably will
displace cash and checks as the money of the future.
Master card International has expanded globally in more locations in the world than
any other card. The card was introduced by MCB Bank Limited in 1995 and now
offers card members over 15 million outlets in 232 countries.
 Photo security – the first bank in Pakistan to introduce the enhanced feature of
photograph on the card limiting fraud in case of card of card loss.
 Welcomed at over 3,000 outlets in Pakistan.
 Provides up-to 45 days Free Credit.
 Joining and Annual Fees to suit you.
Cash Advance Facilities available in Pakistan and worldwide.
With a network of over 1,000 branches and a team of dedicated professionals, MCB is
Pakistan’s largest private sector commercial bank.
2.10.5 MCB ATM Cash Card
The wide spread acceptability and frequent use of MCB ATM Cards has prompted the
Bank to add more value to the cards which cater to customers evolving cash needs
enabling them to go ahead with ease and convenience. This reinforces MCB
commitment to provide to its customers safe and secure mode of cash substitute.
MCB Cash Card is useful means of cash for MCB customers and non customers like:
o Travelers
o Businessmen
o General Public
Advantages
MCB Cash Card enables MCB customers/non customers to meet their day to day cash
requirements and settlement of their commercial personals cash requirement
transactions.

a. Secure
MCB Cash Cards are the safest alternative of the cash because the purchaser can rest
assure of its security. If MCB ATM Cash Card is lost it would be cancelled

19
immediately and the purchaser would get amount refunded easily subject to
completion of refund formalities.

b. Ease of Use
MCB ATM cash card is the best because unlike other mode of transfer of
funds/remittance which are drawn on particular branch can only be cashed at that
branch. MCB ATM cash card holder can draw cash from any of MCB ATM all over
the country, m-net members ATM and cirrus member ATMs globally. MCB Cash
Card is disposable and with a prescribed determined value. When the value of MCB
cash card is utilized fully the balance amount is nil the card will be discarded.
Features
 MCB Cash Card pin code is confidential and is only known to the purchaser. It
can be changed from MCB ATM Machine.
 MCB ATM Cash Card if lost or stolen then the same will be immediately marked
“HOT” on the request of purchaser.
 The amount remaining on MCB Cash Card will be refunded to the purchaser.
 Loss/theft will only be entertained through the original purchaser.
 Loss/Theft is to be reported to the issuing branch by the purchaser of MCB.

2.11 MCB Mobile Banking

At the forefront of technological excellence, MCB proudly introduces MCB Mobile
Banking. The convenience of accessing your account balance information and mini
statements whenever you want or wherever you may need them with comfort and
peace of mind. MCB Mobile Banking service is available to all MCB ATM
cardholders, 24 hour 365 days.

2.11.1 Mobile Banking at a Glance

MCB Mobile Banking gives you easy and quick access to your account(s) at a time
you find convenient, including all holidays.

2.11.2 Banking At Your Fingertips

With MCB mobile banking you can:

20
 Check your balance
 View the last 4 transaction of your MCB account.

21
2.11.3 A Free Service
MCB Mobile Banking is a free service for MCB account holders who have an ATM
card of an SMS message if charged by the service provider.

2.12 Virtual Banking

MCB Virtual Internet Banking offers you the convenience to manage and control your
banking and finances – when you want to, where you want to. MCB’s Virtual Internet
Banking facility is simple and secure. And it’s free of cost. With MCB Virtual
Internet Banking you can access any of the banking services, 24 hours a day, 7 days a
week and throughout the year.

MCB Virtual Internet Banking offers a wide range of online services which makes
your banking accessible anytime and from anywhere.

 Detailed Account Summary of all listed accounts.

 Mini-statements of each of the listed accounts showing recent transaction history
for that account(s).

 Statement-by-Period of each of the listed accounts, based on the period specified.

 Immediate or Scheduled Transfer of Funds between your own accounts, as well as

to third-party accounts    setup as beneficiaries, maintaining accounts with MCB.

 Scheduling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers.

 Payment of utility bills for registered Utility Companies.

 Immediate or Scheduled Bills Payment. Scheduling of ‘One-Time’ as well as

‘Recurring’ bill payments. Option   for ‘Full’ or ‘Partial’ payment based on the
payment conditions specified by a particular Utility Company.

 Bulk Salary Transfer for Corporate Customers, to facilitate them in paying salary
to the corporate employees,   who maintain accounts with MCB.

22
 Bulk Funds Transfer for Corporate Customers.

 Cheque Book Request for any of your listed accounts.

 Payment/Transfer Alerts for reminding, in advance, prior to the processing of

specified payments and    transfers.

 Personal Alerts for reminding of pre-specified events and occasions.

CHAPTER – 3

WHAT I LEARNED
During my internship at MCB, I worked in different departments, and I
successfully completed all tasks and duties that were assigned to me.
This is one of ideal branches of MCB in Peshawar, working there for the
customers for almost one year, the duties which I performed and experiences that I
gained during each task of the day and explained below.
Basically during the first two weeks I got used to the environments and was intro-
duced to the bank staff, till that point I was not assigned any task and once I got
familiar then I was given a green signal to work in different department from
week to week basis, as explained below in brief starting from 1st week.

My 1st & 2nd Week at Clearing Department

The branch manager was very cooperative with me during my internship period.
First of all he referred me to Clearing Department. First of all the concerned
officer told me to observe the bank environment that what is happening in bank
for at least two or three days. After two days of observing bank environment he
started taking working from me. He was the man to get me familiar with clearing
cheques, filling out credit & debit vouchers and stamping the cheques. There are
different kinds of stamps for clearing the cheques like Bank Cross Stamp,
Clearing Stamp for next day date for example if cheque come to bank for transfer
money to another account that will be clear on next day not on the same day
because sometimes there will be no balance or insufficient balance in respective
cheque holder account.

23
I spent my whole first two weeks in this department and learn lots of work
regarding clearance of cheques and making credit debit vouchers.

My 3rd week
I came in contact with the officer who made me familiar with how to do online
transfer the money from one account to another city MCB branch account. I learnt
that there are several rules and limits of transferring cash from one account to
another account. Whenever client wants to credit or debit his own account he can
only debit & credit his account up to certain limited or maximum amount. And
whenever one client wants to transfer cash to another client account then there
will be no limit of transfer. There are different kinds of problems associated with
online transferring cash like sometimes the links of different cities branches got
down then it will be not possible to transfer cash from one account to another
account. He also got me familiar with how to handle Locker what are the
procedures to give locker to customers.

My 4th week at Remittance Department

At the start of 4th week, I was promoted to another department that is Remittance
department that is mainly controlled by the junior remittance officer. The
Remittance Department primarily deals in Demand Drafts (D.D.), pay order,
banker cheques and fund transfer. From him I learned how to make SC (Short
Credit), and LSC (Local Short Credit) that includes handling cheques that belong
to the local branches of our bank (MCB) and all other banks as well. Cheque is
presented at counter with credit voucher. It is then properly stamped and logged in
the clearing register. At the end of the week I was also given idea about a lot of
DDs, Pay Orders and Fund Transfers etc.

5th week Accounts opening Depart

After spending week 4th in Remittances Department, I was sent to officer grade
III, and the opening officer. He guided me throughout all process of how to open a
Current, Saving and profit and loss account. When a customer wants to open an
account first of all bank will ask for his national identity card (NIC) photocopy
then bank will send that copy to NADRA officer for verification. After
verification of NIC, attestation of CNIC copy, proof of income, National Tax
Number certificate and Company Documents are required. The account-opening

24
officer was extremely cooperative as he always gave me much more time than
needed to get familiar me with account opening department.

6th & 7th Week

At the time of these weeks, I met with another two officers, who were responsible
for making government pension disbursement and advancing agricultural loans
respectively. Both were very cooperative with me they familiar me with the
procedure of the government pension disbursement. And I used to assist them
during their responsibilities. At this point of time I was also given the task of
making pension scrolls either manually of by computer. Form those officer, I
came to know that agricultural credit could be given in the form of farm credit and
production loan. Farm credit is provided on medium basis for Land improvements
and purchase of machinery such as tractors etc. Farm credit can be renewed for 1
month from 3 months. On the other hand Production loans are short term in nature
such as to have seeds, fertilizers and sprayers, etc.

8th Week
During my last week of internship I spent it with the head of Cash Department and
guided me throughout his job responsibilities that what are the task that he has to
perform in his department. I observed those tasks that are associated with this
department. This department deals in all kind of transactions in which there is
involvement of money. The payment and receiving of money is subject to the
banks rules and regulations, without which it's not possible. The record of money
paid to the customers is made manually. This department has to receive or pay
money through the cash receipts with the customers.

Last Day of Internship

This excellent experience finally came to as end when my internship time period
ended. I was waiting very anxiously to get the certificate/letter from MCB. I went
to the Operation Manager and offered him appreciation and thanks, there I
informed him that I was done with the internship program and he provided me
with the certificate/letter from MCB for my services as their internee. I thanked all
the employees associated with me in this excellent ended my internship.

25
 Chapter - 4
ANALYSIS
4.1 SWOT ANALYSIS
4.1.1 Strengths
1. MCB has long-term vision, which plays a very important role in
organization’s success.
2. First bank to privatize, which has, now become the leader in market with
largest on line ATM network in the country.
3. Bank’s emphasis on consumer banking by providing them with innovative
saving schemes, products and services suiting best to their life style.
4. Extension and improvement in services to domestic as well as foreign
customer.
5. Best and optional policies and attractive compensation packages, for
employees, which has really improved their commitment, dedication and hard
work, towards the accomplishment of banks objectives.
6. MCB instant financing products for customer wanting instant loan facility at
MCB branches.
7. 24 hours cash access through ATM.
8. Pioneer in introduction of MCB Master Card and RTC, which minimize the
degree of riskiness.
9. Attention and sensitivity to competition prevailing in the country.
10. Easy access to the customers at their residential localities through a large
number of branches.
11. Recognition of critical condition and need for Drastic immediate change.
12. MCB has a brand name and recognition.
13. It is well aware of the Market and adopts strategy according to the
competitor’s strategy.
14. MCB has now started Mobile banking, which is definitely a truly innovative
product and according to the needs of the customers.
15. The current customers list of MCB is very large and having a large number of
deposit.

26
4.1.2 Weaknesses
1. Customers having account, with small amounts are not given some services and
dealing to those with high accounts.
2. A sense Insecurity of jobs, with the down sizing, among the employees is found.
3. Experienced but old staff, who are not aware of using modern technologies/
equipments
4. Political pressure from vested interest group selection.
5. A very small foreign. Network
6. Financial weaknesses i.e excess operating cost
7. Human Resources i.e low morale due to following factors:
 Under compensation
 No accountability
 No development
 Political interference
 No database
 Untapped markets
8. No marketing of advances
9. No training for advances in-charge.
10. Not many advances to agriculture sector and small and medium enterprises.

4.1.3 Opportunities
1. Due to largest ATM network, MCB can expand its 24 hours cash facilities to the far
off cities of the growing market demand.
2. They can capture a large portion of the market, if they expand its ATM and branch
network to other countries of the as well.
3. Increasing focus/target on different types of customers, MCB can open women
branches, especially in those areas where women class want to get involved but
couldn’t due to environmental restriction.

27
4. Growing policies of government on business and commerce sector provides MCB
and opportunity to efficiently meet with the business people’s requirement of instant
cash and financing facilities.
5. MCB has also an opportunity to expand its new technological advancement like;
tele-bank and Internet banking efficiently.
6. Stronger position to recover bad debts
7. Benefits from incoming expertise and competition.
8. Focus on small business, export/ import sector.
9. launching of new products like Mala Maal and Cash Card etc type of product in
future
10. To open overseas branches through out the world like National Bank and HBL or
merger with other foreign banks outside Pakistan.
11. New schemes should be introduced to finance commodity operations.
12. The formation of new and energetic marketing teams can increase the
disbursement of loans and new customers can be searched out.
4.1.4 Threats
1. Increasing foreign banks in the country.
2. Privatization of other domestic banks has also increased their services.
3. Highly specialized and attractive services provided by foreign banks to their
customers.
4. Un-consistency in government policies regarding to business and economic sector.
5. Growing global technological advancement.
6. Strict regulations by the government over credit facilities to the customers as to
meet the prudential regulations.
7. Loss of confidence of the customers due to freezing of accounts
8. Rising customer’s expectations
9. Concentration risk is involved with the credit department.
10. Slower economic growth rate of the country.
11. Return of deposits is very low.
12. Inflation rate is high.
13. GNP and GDP rates are low and so the saving are low.(1)

28
4.2 GENERAL ANALYSIS
4.2.1 Customer Relationship
In the bank the officers come across many customers daily. There is a need to
improve the customer relationship in all the departments. The relationship manager
has a very close contact with the customers and this is his duty to give proper
guidance to the customers. Where as in MCB I have found that the customer
relationship is not up-to the satisfactory level.

4.2.2 Inadequate Training Program

As the employee finishes his training he is induced in a specified field since he does
not have knowledge about the specific job assigned to him thus he feel difficulty to
perform his job.
There is no special training given to the employees for motivating customers.

4.2.4 Job Rotation

There is no specific job rotation in MCB, The Mall, Pesh. Officers spend most of the
time in the same department. A person can spend years sitting in one department,
performing the same duties. The employees of the foreign exchange and other
departments have the same routine for years after giving a seat to the probationary
officer, the management forgets about him for at least six months.

4.2.5 Lack of Security

The most important aspect consider in the bank is security. But in MCB I have seen
that there was easy accessibility to account information.
There was not enough security as far as the accounts were concerned. Anyone can call
and can get the information from the bank, which has been creating trouble in the
bank.

4.2.6 Shortage of Staff

There is a shortage of staff in the deposit, credit and foreign exchange department of
the bank. (MCB,G.T Road). Few people are working and the workload is very much
high on them.

29
4.2.7 Lack of Motivation
Motivation is the most important aspect in any organization. There is a lack of
motivation in the employees of all departments, which has to be improved. By
motivating people they can create a change in the bank.
4.2.8 High Work Load
The workload on the employees of MCB is immense. It is usual practice for the
employees to stay beyond the official working hours. The manager specially faces
problems in this regard.
They most of the time, work till late night at stretch without getting any over time.
Moreover they even have to come to the bank early to finish the remaining work and
also sometime on holiday.

4.2.9 Improper Work Distribution

I have noticed it through out my whole internship, which was also irritating for me
that the work distribution is totally improper here.
Few people have to perform less responsibility with same grade and few have to
perform more responsibility.

4.2.10 Lack of Appreciation

Another very important thing that is ignored in different department is appreciation of
the employees who work with dedication and efficiency. If hard work and
performance of the staff members is not recognized and appreciated, it dis-hearts
them resulting in poor efficiency.

30
4.3 FINANCIAL ANALYSIS

Financial statements are the principal means of reporting the financial condition and
results of operations of a business entity. These statements are the means to assist
various parties in decision making who are interested in the activities of the business.
These statements are means to an end of helping stakeholders in decision making to
improve the quality of decision making proper analysis of these statements helps a lot.
Financial statement analysis helps in determining the financial conditions at any
particular point in time and effectiveness of operations of a firm during a specific
period.

The various stakeholders of business are all interested in the analysis of financial
statements. But the focus of interest of all is not the same. For example creditors and
credit reporting agencies are interested in finding out the credit worthiness of the firm
to which they have extended credit or intend to extend credit. Short term creditors are
interested in the short term liquidity of the business and long term creditors are
interested in the long run cash flow which the firm can generate over the long period
of time. Investors are interested in the firm’s ability to sustain profitability over a
period of time. Government agencies analyze financial data for tax purposes. The
internal users of financial statement like management also analyze financial data for
planning and control.

The financial data of MCB is analyzed in the two following ways:

1. Time Series Analysis.

2. Ratio Analysis

Index and common size analyses are used to measure a firm’s performance over time
in relation to itself. Such analysis is called time series analysis.

4.3.1 Common size analysis

Common size analysis is an analysis of financial statements where total assets divide
all balance sheet items and all income statement items are divided by net sales or
revenues. Common size statements can be extremely helpful to highlight changes over
time in the financial performance and financial condition of a company. However,

31
growth or decline in various items of balance sheet and income statement cannot be
detected from the common size percentage only changes in the data relative to a total
for a particular date or period can be determined. A statement item that has increased
in rupee amount will show a decrease percentage if the total has increased at a greater
rate than the individual item or vice versa.

32
Table 1: Common Size Balance Sheet
2021 2020 2019
ASSETS (Rs in million)
Cash and balance with treasury 39683.88 32465.98 23665.549
banks
Balance with other Banks 3807.52 6577.02 1466.045
Lending to institutions 1051.37 21081.80 9998.828
Investment 113089.26 63486.32 69481.487
Advances 218960.60 198239.16 180322.753
Other Assets-net 17868.76 11031.45 5471.697
Total current Assets 394461.40 332881.71 290406.359
Operating fixed assets 16024.12 9054.16 8182.454
Deferred tax assets 0.00 172.37 191.967
Total Assets 410485.52 342108.24 298780.780
LIABILITIES
Bills payable 10479.06 7089.68 8536.674
Borrowings 39406.83 23943.48 27377.502
Deposits and other accounts 292098.07 257461.84 229341.890
Sub-ordinate loan 479.23 1597.44 1598.080
Liabilities against assets subject to 0.00 0.00 0.00
finance lease
Other liabilities 11722.49 11171.50 8192.338
Total current liabilities 354185.68 301263.93 275046.484
Deferred tax liabilities-net 1180.16 0.00 0.00
Total liabilities 355365.84 301263.93 275046.484
NET ASSETS REPRESENTED BY:
Share capital 6282.77 5463.28 4265.327
Reserves 34000.64 24662.43 9054.940
Inappropriate profit 5130.75 5530.97 4990.260
Total 45414.0 35657.0 18311.0
Surplus on revaluation of assets 9705.52 5187.64 5423.769
Shareholders equity 55119.68 40844.31 23734.296
Total Liabilities& O’E 410485.52 342108.24 298780.780
Source: MCB Annual Report 2021

33
 INCOME STATEMENT PERFORMANCE
Table No. 2
2021 2020 2019
Mark-up/return/interest earned 31787 25778 17756
Mark-up/return/interest expensed 7866 4525 2781
Net mark-up/ interest income 23921 21253 14975

Provision for diminution in the value of 105 121 -98

invest
Provision against loan and advances 2960 1015 1242
Bad debts written off directly 0 47 1
3065 1183 1144
Net mark-up/interest income after 20856 2021 0 13830
provision
Non-mark-up / interest income:
Fee, commission & brokerage income 2635 2311 2449
Dividend income 632 812 480
Income from dealing in foreign 693 692 531
currencies
Gain on sale of securities-net 1501 606 866
Unrealized loss on revaluation of
investment
Classified as held for trading -13 - 2
Other income-net 563 571 1425
Total non-mark-up/interest income 6011 4991 5754
26867 25061 19584
Non-mark-up / interest expenses:
Administrative expenses 5022 6483 6459
(reversal) other provision-net -4 11 -73
Other charges 541 67 179
Total non-markup / interest expenses 5559 6561 6566
Extra ordinary / unusual item - - -
Profit before taxation 21308 18501 13018
Taxation-current year 6442 5701 4611
-prior years -1294 593 -150
-deferred 895 63 -365
6042 6358 4096
Profit after taxation 15266 12142 8922
Unappropriate profit brought forward 5531 4990 502
Transfer from surplus on revaluation of 12 32 84
fixed assets- net of tax
5543 5022 586
Profit available for appropriation 20808 17165 9509
Basic & dilute earning per share-after 24.3 19.33 17.43
tax
Source: MCB Annual Report 2021

34
4.3.2 Ratio Analysis

A ratio is a quantitative relation between two magnitudes of the same kind. In ratio
analysis, the financial ratios of the firm are compared to that of its competitors. This
comparison allows the firm to detect major operating differences, which if corrected,
will increase its efficiency. Another very popular method of ratio analysis is to
compare the firm’s financial ratios to industry average or similar form in industry or
to our own past performance.

Before discussion financial ratios, three cautions are in order:

a. A single ratio does not generally provide sufficient information to judge the
overall performance of the firm. Only when a group of ratios is used, a
reasonable judgment concerning the firm’s overall financial state can be made.

b. An analyst, when comparing financial statement, should ensure that

predetermined uniform standards are used for this purpose.

c. It must be ensured that the data used in calculating financial ratios have been
developed in the same manner and are sound and reliable.

There is no doubt that financial ratios are a useful guide for managerial decision-
making but these are not exact and definite. Ratios only suggest the questions that
need to be answered and provide no answers.

Let us now calculate some of the key financial ratios of MCB for the years 2020 -
2021 and try to answer the questions that these ratios suggest.

These ratios are calculated from the “Balance Sheet” and “Profit and Loss Account”
of MCB Bank.

Financial Ratio

“A financial ratio is an index that relates two accounting numbers and is obtained by
dividing one number by the other”.

One may ponder that why there is a need to mingle with these ratios and not take the
actual figures straightforwardly. Among various reasons one cogent reason can be put
forward that ratios help in comparison. When ratio analysts are to compare the

35
internal performance of the organization in relation to time, only ratios are the viable
option for them. Along with it, comparison with the other competitors in the same
industry can only be carried out with the help of financial ratios.

The number of financial ratios the might be created is virtually limitless. But there are
certain basic ratios the are frequently used, these ratios are as:

Financial Ratios of MCB

CURRENT RATIO

Current Assets

Current Liabilities

Its shows the firm’s ability to meet its short term obligations. The higher the ratio, the
greater is the company’s ability to meet its short term obligation as the come due.
Current ratio is calculated by dividing current assets by current liabilities.

Table No.3

Current Ratios For 2019 , 2020 , 2021

2019 2020 2021

Current assets 290406 332882 394461
Current liabilities 275046 301264 354186
Current ratio 1.06 1.10 1.11

36
Graph No.1

1.10 1.11
1.12
1.10
1.08 1.106
Ratio
1.06
Ratio
1.04
1.02
2019 2020 2021
Years

Source: MCB, (2021 ) Annual Report

INTERPRETATION

Current Ratio of MCB for the last three years shows an increasing trend. In the year
2019 it was 1.06 and thenit increased to 1.10 in the year 2020 mainly due to an
increase in current assets of the bank. But in the year 2021 it was just increased from
1.10 to 1.11. this rise in the current ratio of MCB shows the defensive approach of
MCB towards working capital. This surely improves profitability as the percentage of
current assets.

37
 ASSETS TURNOVER RATIO

Net sale (advances + investment)

Total Assets

This shows revenues generated per rupee investment in total assets. This ratio is
calculated by dividing net sales (advances and investment) by total assets.

Table No. 4

Assets turn over ratio for, 2019 , 2020 , and 2021

2019 2020 2021

Sales 249804.24 261725.48 332049.86
Total assets 298781 342108 410486
ATR 0.84 0.77 0.81

Graph no.2

1.0 0.84 0.81

0.77
0.80
0.60
Ratio
0.40
Ratio
0.20
0
2019 2020 2021
Years

38
Source: MCB, (2021 ) Annual Report

INTERPRETATION

This shows revenue generated per rupee investment in total assets. This ratio is
decreased in 2020 as compared to 2019 which is 0.84 and in 2020 it comes to 0.77.
but in 2021 again the ratio increased to 0.81. so we can interpret that MCB is
effectively utilizes its resources.

DEBT TO EQUITY RATIO

Total Debt

Shareholder Equity

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

Table No.5

Debt to Equity Ratio for 2019 , 2020 and 2021

2019 2020 2021

Total debt 275046 301264 355366
Shareholder equity 23734 40844 55120
Debt Ratio 11.59 7.38 6.45

Graph no. 3

39
 11.59
14
12
10 7.38
6.45
Ratio 8
6 Ratio
4
0
2019 2020 2021
Years

Source: MCB, (2021 ) Annual Report

INTERPRETATION

MCB‘s upward trend of Debt to Equity ration shows that the bank is not relying in
debt financing. The ratio of 2021 as compared to 2019 has increased.

40
 DEBT TO TOTAL ASSET
RATIO
Total Debt

Total Assets

Debt ratio shows the fraction of the company’s assets that is financed by debt. The
ratio is derived by dividing a firm’s total debt by its total assets.

Table No.6

Debt to total Asset Ratio for the year 2019 , 2020 and 2021 .

2019 2020 2021

Total debt 275046 301264 355366
Total assets 298781 342108 410486
Debt Ratio 0.92 0.88 0.87

Graph no.4

1.2 0.92
0.88 0.87
1.0

0.8
Ratio
0.6
0.4

0.2
2019 2020 2021

Source: MCB, (2021 )

41
Source: MCB, (2021 ) Annual Report

INTERPRETATION

This ratio highlights the relative importance of debt financing to the firm by showing
the percentage of the firm’s assets that is supported by debt financing. Here in our
case of MCB this ratio is decreasing from last three years, the higher the debt-to-total
assets ratio, the greater the financial risk, the lower this ratio the lower the financial
risk. So we can interpret that MCB is taking continuous steps to lower its debt
financing and thus lower its risks.

INTEREST EARNED RATIO

Earning before interest & Taxes

Interest Expense

This ratio shows that number of time a company can cover or meet its financial
charges or obligation.

Table No.7

Coverage Ratios for 2019 , 2020 , and 2021

2019 2020 2021

EBIT 13018 18501 21308

Interest expense 2781 4525 7866

Interest earned ratio 4.68 4.09 2.71

42
Graph no. 5

4.68 4.09
5
4
2.71
3
2
Ratio
1

0
2019 2020 2021
Years

Source: MCB, (2021 ) Annual Report

INTERPRETATION

The interest coverage ratio of MCB serves as one measure of the firm’s ability to
meet interest payments and thus avoid bankruptcy. In general the higher the ratio, the
greater the likelihood that the company cour its interest payment without difficulty.
The interest coverage ratio of MCB has shown a decrease over the period of three
years. In the year 2021 , the ratio is 2.71 which show that the income in 2021 cover
only 2.71 times the interest expense.

43
 GROSS PROFIT MARGIN RATIO

Gross Profit X 100

Net Revenue
This ratio tells that the profit of the firm relatively to sales, after we deduct the cost of
producing the goods.

Table No. 8

Gross Margin Ratio For 2019 , 2020 And 2021

2019 2020 2021

Gross profit 14975 21253 23921
Revenue 17756 25778 31787
Gross profit margin 84.34% 82.44% 75.25%

Graph no. 6

100.00% 84.34% 82.44%

75.25%
80.00%

Ratio 60.00%
Ratio
40.00%

20.00%
2019 2020 2021
Years

44
 Source: MCB, (2021 ) Annual Report

INTERPRETATION

It is obvious from the figures of Gross profit margin that the Trent is constantly
decreasing for the last three years. The reason for this decreasing trend is that the
gross profit of the bank is decreasing and this decreasing in gross profits is due to the
remarkable increase in mark up interest. The reason for this increase in mark up
expenses may be the management inefficiency in controlling these expenses.

NET PROFIT MARGIN RATIO

Net Profit after Taxes X 100

Net sale
It is measure of the firm profitability of sale after taking account of all expense and
income taxes.

Table No.9

Net Profit Margin For 2019 , 2020 And 2021

2019 2020 2021

Net profit after tax 8922 12142 15266
Sales 249804.24 261725.48 332049.86
Net profit margin 3.57% 5.60% 4.60%

Graph no. 7

45
 6.00% 5.60%
4.60%
5.00% 3.57%

4.00%
Ratio
3.00%
Ratio
2.00%
1.00%
2019 2020 2021
Years

Source: MCB, (2021 ) Annual Report

INTERPRETATION

Net profit margin of MCB has shown a fluctuating trend in the year 2019 it was
3.57% but in the year 2020 it was increased to 5.60% and again slightly dropped to
4.60 in the year 2021 . This means that through the selling price has increased the
other expenses of the bank like operating, general administration or selling expenses
has shown a slight decrease.

RETURN ON INVESTMENT RATIO

Net Profit after Taxes X 100

Total Assets
This ratio measures the profitability per rupee of investment in assets.
Table No.10
Return on Investment Ratio for 2019 , 2020 , and 2021

2019 2020 2021

46
Net profit after tax 8922 12142 15266
Total assets 298781 342108 410485
ROI 3.00% 3.55% 3.72%

Graph no.8

3.55% 3.72%
5.00%
4.00% 3.00
%
3.00%
Ratio
2.00% Ratio
1.00%
0.00%
2019 2020 2021
Years

Source: MCB, (2021 ) Annual Report

INTERPRETATION

MCB’s ROI has shown improvement over the last three years. In 2019 the ROI is
3.0% and increase to 3.55% in 2020 and then slightly increased to 3.72%. This is due
to the increase in net profit margin of MCB.

RETURN ON EQUITY RATIO

Net Profit X 100

Total Equity

This ratio shows that residual profit as a proportion of the bank value of common
shareholder equity.
Table No. 11

47
Return On Equity For 2019 , 2020 , And 2021

2019 2020 2021

Net profit after tax 8922 12142 15266
Shareholder equity 23734.29 40844.31 55119.68
ROE 37.60% 29.73% 27.72%

Graph no.9

100.00%
80.00%
60.00% 37.60%
Ratio 29.73%
40.00% 27.72%
Ratio
20.00%
0.00%
2019 2020 2021
Years

Source: MCB, (2021 )

Source: MCB, (2021 ) Annual Report

INTERPRETATION

The ROE of MCB has shown a decrease trend. In the year 2019 the ROI is 37.6% but
decrease in the year2020 and also in 2021 it comes to 27.72%. this decrease in ROE
is due to unimprovement in Net Profit Margin.

48
49
Chapter - 5
CONCLUSIONS & RECOMMENDATIONS

5.1 CONCLUSIONS
With Cooperation of all branch members, I have been able to learn and experience
many new things related to the banking sector and the banks workings. I am able to
handle the public with respect to many different workings on many different instances
and also in account opening for customers and can handle many other tasks as well.

Finally I concluded that MCB is a good organization for a person for his long term
career workings. Overall working and environment of the bank is very comfortable
and the staff is very helpful and respectful of each other and it still maintains a
professional environment.
Management of the bank is very strong. Employees of MCB Peshawar Branch work
more than their working hours and all the workings take place in a very friendly
atmosphere that does not induce pressure on the person working there. It also shows
their loyalty and commitment to the organization. This branch of MCB relatively
small and has climbed its way up very quickly and all that only because of the
employee’s efforts and consideration for each other. Understanding and the effective
management of the human resources is the most difficult challenge faced not only by
the bank but by all the organizations. Even though the people have been sacrificed in
the new organizational developments, it is becoming clear that the true lasting
competitive advantage comes through human resources and how they are managed.
MCB seems to not focusing on this highly critical issue as the job satisfaction level of
the employees working
at MCB, was quite low.

5.2 RECOMMENDATIONS
5.2.1 Customer Relationship
Knowing the customers and their needs is the key to business success. By attitude the
manager can improve the relationship with the customers. By having the

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understanding, what a customer wants, the manager can improve the relationship with
the customers.
MCB should understand that the commitment to satisfy customer’s needs must be
fulfilled within a professional and ethical framework. They should observe a culture
of high ethical standards, based upon development of right attitude.
Although MCB has been improving its corporate behavior, even then they should
continue their effort for better corporate behavior. There is a need of improving
customer relations in MCB. For attitude improvement special courses should be
arranged under specialized teachers, through lectures, seminars and other interactive
techniques. It will cost the bank but will be more profitable for the bank in the long
run.

5.2.2 Management and Subordinate Relations

Employees, who are apparently ordinary workers, play a vital role in the
organization. The staff is the most valuable asset. The human resource manager
should focus on multi talent hiring and professional grooming. The manager should
improve attitude towards their subordinates. Self-dignity is the most valuable thing to
every body, if the lower employees are given proper attention and the attitude of the
manager towards lower management is good, they will be motivated satisfied and
loyal to the organization.

5.2.3 Top-Bottom Communication

The down ward communication is very important because the information flows
down the hierarchy from superiors to subordinates. The downward communications
needs to be improved, by making sure that policies made at the higher level properly
reach the lower level and those policies and procedures are properly understood.
Decisions should reach as quickly as possible without any delays. Delays create
hurdles in the functioning of the bank.

Flow of information, decisions and other instructions and policies in efficient and
effective manner will enhance the over all productivity and image of the organization.

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To improve the communications in the bank the managers should strive to become
better communicator and they must accomplish to separate tasks. They must improve
their messages, the information they wish to transmit. Secondly they must improve
their own understanding of what customers and subordinates are trying to
communicate to them; they must become better encoders and decoders. Proper
training from specialized communication teacher should be given to the managers as
well as the lower level employees so that they become good listener as well.

5.2.4 Empowerment of Employees

Commitment is a function of empowerment down the line, therefore, the future of
MCB lies in the fact that they should remain committed and necessary empowerment
should flow regularly to lower levels of hierarchy, so that the performance delivery is
made more flexible. With the empowerment of lower level employees they will feel
secure in the organization and they will work with devotion for the betterment of the
organization.

5.2.5 Technology Incorporation

Latest software should be introduced in all departments so that data processing of
computers can be enhanced. The officers in all deptt: of the bank are still working
with the old computers. The conditions of the computers are not satisfactory.
Another drawback is that there is only one computer at MCB, The Mall Branch, The
workload is very high in this deptt: so to decrease the workload a fast version of
windows should be introduced. The use of new technology can help the employees of
computer deptt; i.e to provide training on new specialized program to the employees
of computer department. So, that, they could compete on equal footings with other
banks.

5.2.6 Marketing Culture

The employees should be given special training for marketing. Proper action should
be taken for marketing so that the increased sale of different products will result in
increase

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of the profit of the bank. The employees of the bank should be trained with the basic
concepts of the marketing under the guidance of the experts.

5.2.7 Improve Productivity

In order to strengthen the operational capabilities of the employees the bank must
organize a number of in-house training courses and seminars on different topic relate
to advances and other departments.
Moreover the bank should send the employees for specialized courses. So with the
passage of time the employees become up-to date with the latest innovations of the
bank.

5.2.8 Proper Distribution of Work Load

Load of work on the employees in all the departments of MCB Peshawar Branch is
very high. This can be decreased either by hiring more people or by introduction of
advance computer technology in the bank. For hiring the standard procedures of the
bank should be applied.

5.2.9 Availability of ATM cards

Ensuring the availability of ATM cards is very important. If the communication
system is improved as earlier discussed, this problem can be solved out. Another way
to improve this facility is online issuance of ATM cards through direct access on the
net. It will take less time and customers will receive their cards on time.

5.3 HUMAN RESOURCE DEVELOPMENT

Human resource development is a key priority of the bank. The bank should continue
to build on its human resource base with the right level of skills and talent to meet the
current and future business. Special emphasis should be laid on the skills and
personality development. Hiring the business graduates, in different fields, from
reputed institutions, to improve the efficiency and productivity of the organization,
can solve this problem.
In addition to in-house course the officers and executives of the bank should also send
for advance level courses in management and banking, offered by various specialized
training institutions such as Lahore University of Management sciences (LUMS) and

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the institute of Bankers in Pakistan (IBP). This will help in enhancing professionalism
and employee development.

5.4 PROPER JOB ANALYSIS

Right person for the right job is the most important factor for any organization. Only
on the basis of proper job analysis it can be decided how a right person can be hired,
trained, compensated or promoted.
Some of the employees are simple graduates; the employees being a graduate do not
have proper know how about the job. They are unable to optimize the efficiency of
the bank thus creating problems for both organizations and the employees. However,
the bank new recruitment policy is based on hiring highly qualified young people like
MBA, MPA etc, which will surely be helpful in their operations.

5.5 PROPER MOTIVATION

Motivation is the most important aspect in any organization. So the managers in MCB
should properly motivate their subordinates. Employees on the job must be motivated
to perform at an acceptable level. Managers themselves must be motivated to do a
good job. Proper compensation and incentives should be given as it will satisfy their
wants and in return the employees will work with dedication. Also employees should
be given some extra benefits like bonuses etc to motivate them.

5.6 ON-LINE BANKING

MCB should start online banking through out the country as they are the pioneers in
it, still they do not have all the branches online. They should try to improve this area
and to diminish the entire book keeping methods. Online banking is impossible
without the modern IT technology. Also, in a branch having one computer, there is a
lot of work to do with it, needs more and modern computers to handle the situations,
along with the trained staff.

5.7 E-BANKING
MCB should try to develop e-banking as well, as it will broaden the scope and the
market for the organization. They already have its own web site but it have no proper

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detail about its products and other facilities. Also there is a need to improve the
website and to improve the facilities on it. For example, there should be the facility to
open online account and other such dealings should be made on-line.

5.8 IMPROVEMENT OF SERVICE QUALITY

MCB should try to the service quality and bring it up-to international standards. One-
window operations should be introduced so that the customer could wind up his work
as quickly as possible. It means, the entire customers should be served at a single
counter and there is no need for the customer to move from one to other for a separate
work.

5.9 FEMALE BRANCHES OF MCB

MCB should seriously consider opening of female branches to solve the problems of
those female employees who does not feel good while working with male staff. MCB
already have female staff but they are up-to few model branches. It should seriously
consider about the female staff and also to open some exclusively female branches.
Before opening female branches proper market survey is needed which will help the
bank to judge the response of the people about the female banking of MCB.

5.10 HEALTHY ACTIVITIES

There is lack of healthy and entertainment activities like excursions on weekend,
parties and other important days, celebration in their tidy life. Such activities should
be encouraged at once in a month.

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References

1. Ghani, M.A. (2002). Advanced Accounting, Lahore; Pak-Imperial Book Depot, p.

798.

2. Ghani. M.A, (2002). Advanced Accounting, Lahore: Pak-Imperial Book Depot. P.

799.

3. Robert, F.M. Williams, S.F Haka and M.S. Bettner. (1999). Accounting; the basis

for business decisions, New York; Irwin McGraw-Hill, P.13.

4. Van Horne, J.C and J.M. Wachowicz, Jr. (1998). Foundation of Financial

Management, 10th edition, New Jersey; Printice-hall, Inc. p.143.

5. Van Horne, J.C and J.M. Wachowicz. Jr. (1998). Foundation of Financial

Management, 10th edition, New Jersey: Printice-hall Inc. p.139.

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