MCB Internship Part 1

FAISAL AZAM Hailey College of Commerce 1522
Letter of Transmittal
Prof. AHMAD USMAN ,

Hailey College of Commerce,
University of The Punjab,
Lahore
Dear sir,
It is a great honor for me to present you the internship report
as required for the completion of B. Com ( Hon’s) programme.The staff of the
MCB Bank has been very co-operative with me in providing information regarding
the procedures and processes in practice. Due to certain constraints and legal
formalities, I have not been able to gather all the facts and figures about the
organization. Yet, the report is a comprehensive one, containing a lot of
information. The practical work during internship period has been a reworking
and enlightening experience.
Yours truly,
FAISAL AZAM.
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ACKNOWLEDGEMENTS
O Allah! Let not our hearts deviate from the truth after You have guided
us, and bestow upon, mercy from Your grace; verily You are the Giver of
bounties without measures. Up and above every thing “All Glory be to Thee,” O,
Allah, The beneficial, The merciful, Whose blessings and exaltation flourished
our thoughts and thawed our ambitions to have the cherished fruit of our modest
efforts in form of this write up from the core of heart to the Holy Prophet Hazrat
Muhammad (Peace Be Upon Him) who is forever a torch of guidance and
knowledge for humanity as a whole.
The work presented in this manuscript was impossible to be accomplished

without the sympathetic attitude, utmost care, animate directions, cheering
perspective and enlightened supervision of our respected supervisor PROF.
AHMAD USMAN SB Hailey College of Commerce, University of the Punjab. I am
grateful to his ever-inspiring guidance, keen interest and constructive
suggestions throughout the course of our master level studies.
A great debt of gratitude and sincere thanks are extended for kind
behavior, friendly attitude, enthusiastic company and marvelous guidance to
Mr.M Zeeshan (branch manager).
Words are lacking to express our humble obligations, indebtedness and

immense gratitude to our affectionate father, mother, brothers. for their love,
good wishes, inspirations and unceasing prayers for us, without which the
present destination would have been a mere dream.
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EXECUTIVE SUMMERY
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's 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. I learned about documentation requirements and
record keeping for different activities and processes, especially the
documentation requirement for different kinds of financing facilities.
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OBJECTIVES OF STUDYING ORGANIZAION
My major objectives are as follow:
 To learn about the operations of banking

 To familiar with organization’s structure
 To know about the products and services provided by the organization
 To know the target markets of the organization
 To know about the business volume of the organization
 To make financial analysis of financial statements
 To give comments on the financial analysis
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History of Banking
Evaluation of Banking
It has not so far been decided as to how the word “Bank” originated. Some
authors opine that this word is derived from the words “Bancus” or Banque”
which mean a bench. The explanation of this origin is attributed to the fact that
the Jews in Lombardy transacted the business of money exchange on benches
in the market place and when the business failed, the “Banco” was destroyed by
the people. Incidentally the word “Bankrupt” is said to have been evolved from
this practice.
Other Authorities hold the opinion that the word “Bank” is derived from the
German word “Back” which means “Joint Stock Fund”. Later on, when the
German occupied major part of Italy, the word “Back” was Italianized into “Bank”,
It is, therefore, not possible to decide as to which of the opinions is correct. For
no record is available to ascertain the validity of any of the opinions.
Early Growth
Banking in fact is as primitive as human society, for ever since man came to
realize the importance if money as a medium of exchange, the necessity of a
controlling for regulating agency or institution was naturally felt. Perhaps it were
the Babylonians who developed banking system as early as 2000 B.C. It is
evident that the temples of Babylon were used as “Banks” because of the
prevalent respect and confidence in the clergy.
Modern Banking
Despite the classical origin, banking in its modern form and structure started in
Britain when many of the Lombardy merchants came to England in the fourteenth
century and settled in the parts of the city of London now called Lombard Street.
They were so resourceful that even the king had to depend on them for loans
despite the fact that the Church was firmly against usury. They dealt with not only
keeping the money in safe custody but also changed money for the travelers or
merchants engaged in foreign trade.
In 1695, the Bank of England was established. This bank lent GBP1,200,000 at
8% to William-III, who in return allowed a number of privileges to the bank,
specially the right to issue Note payable to bearer on demand up to the amount
of this loan. This was known as “Fiduciary” issue, not covered by gold.
Development of Modern Banking:
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In 1854, the Joint Stock Companies Act opened an era of corporations and the
Limited Liability Act. 1855 restricted the liability of shareholders of a Limited
Company to the amount of the successfully paid up value of the shares held by
them. In the succeeding years Joint Stock Banks became very common either by
absorption of private banks or amalgamation amongst Joint Stock Banks
themselves.
In 1955 the British banks made a departure from traditional banking by

undertaking hire-purchase financing for companies buying industrial plants and
machinery and took interest on hire-purchase finance.
Types of Banks:
Due to the variety of resources if money and the diversity in lending and
investment operations, banks have been placed in various categories, such as:
• Commercial Banks
• Merchant Banks
• Saving Banks
• Mortgage Banks
• Consumer Banks
• Investment Banks
• Central Banks
Banking in Pakistan
At the time of Independence, there were 487 offices of scheduled banks in the
territories now constituting Pakistan. By 30th June 1948, the number of offices of
schedule banks in Pakistan declined from 487 to 195.
The Government of Pakistan ultimately decided to deregulate the financial

sector, allowing freedom to capital market and money market both. At present
the money market structure in Pakistan companies of the following:
1. State Bank of Pakistan

2. Commercial Banks
3. Exchange Banks
4. Cooperative Banks
5. Cooperative Credit Societies
6. Saving Banks
7. Specialized Credit Institutions
Commercial Banks
Commercial Banks are companies “which transact the business of banking in

Pakistan”. The companies operate in accordance with the provisions of the
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Banking Companies Ordinance 1962. Section 5(b) of which says: “Banking

means the accepting, for the purpose of lending or investment, of deposits of
money from the public, repayable on demand or otherwise, and withdrawable by
cheques, drafts, order or otherwise.”
Commercial Banks in Pakistan have been authorized to engage in any one or

more of the forms of business in accordance with the Section 7 of the Banking
Companies Act, 1956
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History of MCB Bank Limited
MCB bank was incorporated in 1947 and soon it earned the reputation of a solid
and conservative financial institution managed by expatriate executives. In 1974,
MCB was nationalized along with all other private sector banks. This led to
deterioration in quality of the bank’s loan portfolio and service quality. Eventually,
MCB was privatized in 1991.
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.
MCB Bank Ltd. was known as “Muslim Commercial Bank Ltd.” before 2005. But
in 2005 the Management of the Bank decided to change its name from “Muslim
Commercial Bank Ltd.” To “MCB Bank Ltd.” keeping in view the over all image of
the Muslims in the world. MCB is one of the leading banks of Pakistan with a
deposit base of Rs. 368 Billion and total assets over Rs.500 Billion. The Bank
has a customer base of approximately 4 million, a nationwide distribution network
of over 1,000 branches and over 450 ATMs in the market.
Core Values
The following are the core values of MCB Bank Ltd.
• Trust
• Customer Focus
• Innovation
• Teamwork
• Achievement
• Social Responsibility
Vision
To be the leading financial services provider, partnering with our customers for a
more prosperous and secure future.
Mission Statement
MCB Bank’s team of committed professionals is dedicated to maintaining long-

term customer relationships through outstanding service and convenience.
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MCB’s leadership is stressing mainly on customer satisfaction and their objective

is:
Full Steam Ahead
MCB’s leadership – steering customers through new waves of success.
LEADERSHIP
It comes from planning ahead of time
It comes from kEeping a steady course
It comes from tAking on challenges
It comes from aDding value to our service
It comes from sEcuring common interests
It comes from bRidging the distances
It comes from aSsociating with you
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Organizational Structure.
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CORPORATE INFORMATION
Board of Directors
Mian Mohammad Mansha Chairman
Mr. S. M. Muneer Vice Chairman
Mr. Tariq Rafi Member
Mr. Shahzad Saleem Member
Mr. Sarmad Amin Member
Dr. Muhammad Yaqub Member
Mian Raza Mansha Member
Dato' Mohammed Hussein Member
Mr. Aftab Ahmad Khan Member
Mr. Abdul Farid Bin Alias Member
Mian Umer Mansha Member
Mr. Muhammad Ali Zeb Member
Mr. M.U.A. Usmani Acting President
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Audit Committee
Mr. Tariq Rafi Chairman
Dato' Mohammed Hussein Member
Mr. Aftab Ahmad Khan Member
Mr. Muhammad Ali Zeb Member
Mr. Malik Abdul Waheed Member
Human Resources Committee

Mr. Shahzad Saleemn Member
Mr. M.U.A. Usmani Member
Risk Management & Portfolio Review Committee

Mr. Shahzad Saleem Chairman
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Mr. Sarmad Amin Member
Committee on Physical Planning, IT System &

Contingency Arrangements
Mr. Sarmad Amin Chairman
Mr. S. M. Muneer Member
Mr. Abdul Farid Bin Alias Member
Business Strategy & Development Committee
Mr. S. M. Muneer Member
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Mr. Shahzad Saleem Member
Dato' Mohammad Hussein Member
Chief Financial Officer
Mr.Salman Zafar Siddiqi
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Variance Anlaysis. Variance compared to

2008
2009 Amount %
Mark up/return/interest RS.M 51616 11572 29%

earned
Mark up/return/interest - 15841 4281 37%

expnsed
Net mark up/interest - 35775 7291 26%

income
Provision & write off - 7465 3423 85%
Non mark up / interest - 5643 (149) -3%

income
Non mark up /interest - 10797 2433 29%

expences
Profit before taxation - 23155 1287 6%
Taxation - 7660 1167 18%
Profit after Taxation - 15495 121 1%
EPS Rupees 2242 0.17 1%
Interpretation:
Thp past two years data shows an increase in all returns(i.e. interest
earned,interest income, profit after taxation) which is a positive sign. But mosyly
expenses (i.e. interest expensed, provision taxation,)are also increase which
shows negative sign of business. The bank should have to review policies to
decrease expenses.
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Financial ratios
Financial 2009 2008

Ratio
PBIT/total 55.91% 63.80%
income
Gross 69.31% 71.13%
spread
Income/expe Times 3.84 4.10
nse
Return on 27.35% 31.49%
average equity
Return on 3.25% 3.60%
average Asset
Return on 27.35% 31.49%
capital employed
Earning per Rs 33.50 31.64
share before tax
EPS before Rs 22.42 22.25
tax
Advance/de 73.37% 82.64%
posit ratio
Gross
Advance/de 68.89% 79.39%
posit ratio
Net
Break up Rs 88.37 75.60
value per share
Break up Rs 100.91 84.55
value per share
(including surplus)
Earning 87.23% 85.70%
Asset to total Asset
Ratio
Earning 107.74% 107.75%
Asset to deposit
and borrow
Deposit to 6.02 6.32
shareholder Equity
ratio
Capital 19.07% 16.28%
adequacy Ratio
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Interpretation:
The past two year data shows that mostly financial ratio decrease which shows
negative sign of company.the bank should have to overview its policies to
decrease expenses.
Dividend ratios
Dividend 2009 2008
Ratio
Cash Rs: 11.00 11.50
dividend per share
Dividend 5% 9.14%
yield ratio
(based on
cash dividend)
Dividend 53.52% 56.19%
payout Ratio
Bonus 10.00% 10.00%
share issued
Interpretation:
The past two year data shows that dividend ratio decreases whih shows negative
sign of company . The bank should have to review its policies to decrease
expenses.
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DEPOSIT PRODUCTS
BASIC BANKING ACCOUNT

It is also known as the Salaried Account. Its is as simple as ABC to start banking
with MCB.
KEY POINTS OF BBA
• Minimum balance can be Nill.
• A person can open an account with Rs: 1000
• ATM card and Cheque Book is must.
• Two times in a month a person can deposit (including cash and clearing).
If limits exceeds above two times then a bank can charge Rs:35 on every
transaction.
• A person can withdraw two times in a month.
• Unlimited transaction through Virtual banking( GPRS activation and

person can get information about his/her account on mobile).
• Demand draft are not available on BBA account.
• No Zakat is deducted.
• A person can use ATM card at thousand of merchant’s outlets across

Pakistan.
CURRENT ACCOUNT
Current account is opened by the person who need money when he needed.
KEY POINTS OF CA
• An account can be opened with a Rs: 1000.
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• Amount should be Rs: 10000 in an account If at least Rs:10000 remains in

an account then there is no deduction .If amount is less then Rs: 10000
then Rs:58 is deducted every month.
• There is no profit in this account.
• Lockers facilities are available.
• ATM and cheque book is also available.
• Unlimited withdrawal and deposit across nationwide is available.
SAVINGS ACCOUNT
There are five types of saving accounts
1. PLS Saving.
2. SMART Saving.
3. Saving Xtra.
4. Saving 365.
5. KBA
1. PLS SAVING ACCOUNT
KEY POINTS
• Account can be open with Rs:1000.
• Minimum balance requirement is Rs:1000.
• Maximum balance must be Rs: 10000.
• Profit is calculated on least amount.
• Profit is given every six month
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• If balance is less then Rs:10000 then Rs:58 is deducted
• Lockers facility is also available.
• ATM Card and cheque is available.
• Zakat is deducted at 2.5% of amount. If amount is Rs: 29000

then no Zakat deducted. If amount exceeds then 2.5% of the
amount.
2. SMART SAVING ACCOUNT
KEY POINTS
• Account can be open in Rs: 1000.
• Balance should be at least Rs:10000
• At low balance profit can be given.
• Profit is after every three months.
• ATM is available but Cheque book is not available.
• If initial deposit is Rs: 200000 then 5% profit is given.
• If initial deposit is Rs: 300000 then 7% profit is given.
3. SAVING XTRA
KEY POINTS
• Balance should be at least Rs: 100000. If balance is less then this limit
then no profit is given.
• Profit is calculated monthly.
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• Three times free of cost withdrawals If draws above Rs: 25000. After the
third drawl charges are deducted.
• On ATM withdrawal there is no charges on any limit of amount.
• Cheque book is also available.
• Lockers facility also available.
4. SAVING 365 GOLD

KEY POINTS
• Minimum balance should be at least Rs: 500000.
• If amount is less then Rs: 50000 then Rs: 58, is deducted every
month.
• ATM is available.
• Lockers, cheque book is also available.
6. KHUSHALL BACHAT ACCOUNT
KEY POINTS
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• Account can be open with Rs: 1000.
• Minimum balance should be at least Rs: 20000. If amount is

below then Rs: 58, is deducted.
• ATM facility is also available.
• Cheque book is also available.
BUSINESS ACCOUNT
KEY POINTS
• Account can be open with Rs:1000.
• Balance must be Rs: 50000.
• There is no profit on this account.
• If balance is Rs: 50000 the drawing and depositing in other

cities is free.
• If account is opened with Rs: 1000 then Demand draft and Pay
order is 1 time free.
• Profit is given after six month.
• If account is opened with Rs: 1000 then 25 leaves cheque book

is free.
• If account is opened with Rs: 50000, then 50 leaves cheque

book is free.
• ATM card is free.
• Monthly statement free, six month statement is free.
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• Lockers are also free.
Importance of Account Opening

It is very important that the account of a customers are opened properly and with
due diligence, so that the relationship of a customer and a banker remains for a
long period of time. The accounts which are opened with the due care and
keeping in view the different law requirements then it will be very useful in long
term relationship of a banker and a customer. On the other hand, if the accounts
are opened without proper diligence and care, then there will be problem in
maintaining in such accounts which could pose various risks on the bank and a
customer and it will affect the relationship of a banker and a customer.
“Account Opening” Documentation Requirement for Various accounts
types
1. Individuals.
2. Joint accounts.
3. Sole proprietorship Account
4. Partnership.
5. Trust accounts
6. Societies/Co-operative societies/clubs/NGOs/NPOs etc.
7. Minor accounts.
1. Individual
• Attested copy of CNIC of a customer and if the customer lives in

abroad then the PASSPORT duly verified through NADRA before
account is opened. Verification cost cannot be charged to the
customer.
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In case the person does not bear a CNIC having a photo then the
bank should also obtain, in addition to CNIC, any other document such
as passport or diving license that contains a photo. If no document
exist with a photo, then the bank obtain (a) photos attested by the
Gazetted officer/ Nazim (b) copy of CNIC duly verified by NADRA and
the same person who attested photo(c) Confirmation in writing that
he/she does not have any document containing that contains a
photograph.
a) Application For Opening Account
b) Specimen Signature Card
c) New KYC Form
d) Proof of income (e.g. employer’s letter from salaried person or
salary slip. For Self Employed, copy of his accounts (un-audited), or
BM to estimate his income based upon his takings (Inflows and
Outflows).
e) CNIC to be verified with NADRA before opening the Account.
f) Copy of CNIC of the account holder with “Original Seen Stamp”.
2. Joint Accounts
a) Application for Opening Account
b) Specimen Signature Card
c) KYC Form
d) Proof of income ( For example an account in the names of husband
& wife is to be opened then proof of income of husband and
sources of wife be also verified as required under KYC).
e) CNICs to be verified with NADRA before opening the Account.
f) Copy of CNICs of the account holders with “Original Seen Stamp”.
3. Partnership Firm
• Attested copies of CNICs duly verified by NADRA of all partners.
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• Attested copy of “Partnership Deed” duly signed by all partners of

the firm or Letter of Partnership (form CF-13) in lieu of partnership
ship deed.
• Attested copy of Registration Certificate with Registrar of Firms. In

case the partnership is unregistered, this fact should be clearly
mentioned on the Account Opening Form as well as request letter
to open account on letter head.
• Original Authority Letter in favor of the person authorized to

operate the account of the firm.
a) Application for Opening the Account

b) Specimen Signature Card.
c) KYC Form.
d) Registration Certificate in case of Registered Firm.
e) Copy of partnership deed & authentication.
f) Proper resolution with company’s stamp to open and operate the account
of the firm jointly signed by all the partners.
g) CNICs of all the partners to be verified with NADRA before opening the
Account.
h) Copies of CNICs of all the partners / account holders with “Original Seen
Stamp”.
4. Joint Stock Companies
 Application For Opening Account

 Specimen Signature Card.
 KYC Form.
 Board of Directors resolution with Company Seal & authorizing
Directors to open and operate account.
 Certified true copy of the Certificate of Incorporation or Registration
from SECP.
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 Certified true copy of the Certificate of Commencement of business

from SECP. (In case of Public Limited Company only)
 Certified true copy from SECP as amended up to date of the
Memorandum and Articles of Association.
 List of present Directors duly certified by the Registrar Joint Stock
Companies i.e. Attested Copy of Form-29 issued by SECP
 Balance Sheet if the Company is already functioning.
 Form “A” to determine the actual beneficial owner of the company.
 CNIC’s of all the directors of the company to be verified with
NADRA before opening the Account.
 Copies of CNICs of all the directors with “Original Seen Stamp”.
5. Trust Account
1. Attested copy of Deed of Trust duly registered with the Registrar of
Properties / Commissioner Income Tax.
2. Certified copy of the “Instrument of Trust” (Letter of Administration). There
is no need of this if attested deed of trust (point 1) has been obtained.
3. Attested copies of CNICs of all the authorized trustees duly verified
through NADRA.
4. Resolution duly passed by the trustees to open A/C in MCB in the name of
the trust. It should be ensured that mandate for opening of account given
in the resolution does not violate the provisions of Trust Deed?
5. List of Trustees duly certified by at least two trustees.
POINTS TO BE KEPT IN MIND WHILE OPENING TRUST ACCOUNT
• All trustees duly authorized through Resolution should sign the application
for opening account.
• Ledger and Specimen Signatures Cards should be BOLDLY marked as
“TRUST ACCOUNT”
• No cheque or Pay Order or Credit Voucher issued in the name of Trust
should be collected for credit to the PRIVATE Account of Trustee or
Trustees.
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a) Attested copy of certificate of Registration with Registrar of Properties /

Commissioner of Income Tax
b) Attested copies of CNICS of all trustees with original seen stamp.
c) CNICs to be verified with NADRA before opening the Account.
d) Copy of CNIC of the account holder with “Original Seen Stamp”.
e) Certified copy of “Instrument of Trust / Trust Deed”.
f) Resolution duly passed by the trustees in their meeting for opening and
operation of account in the Bank in the name of said trust.
g) List of present trustees duly certified at by at least 2 trustees.
h) Moreover, Bank can open trust accounts covered under section 227
Companies ordinance 1984 i.e. Provident Fund, Gratuity Funds, pension
funds after obtaining evidence of registration with Govt. Department.
6. Clubs, Societies, Associations and NGOs / NPOs
• Certificate of registration issued by the registrar of Co-operate
Societies/ Registration Authority.
• By-Laws/Memorandum & Articles of Association of the Society

containing official seal of the registration authority for opening of
account in the name of association as required under section 37(d)
of Co-operative Societies Act 1925.
• List of members of the Managing Committee duly certified by the

Registrar of Societies.
• Resolution duly passed by members of Managing committee in

their meeting regarding opening and operation of the account in the
name of said society. It must be ensured that mandate for operation
of account given in resolution is not in violations of the provisions of
Bye-Laws/ Memorandum & Articles of Association.
• Attested copies of CNICs of authorized officials / persons with

original seen stamp and CNICs to be verified with NADRA before
opening the Account.
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8. Minor Accounts (Age below 18 Years)
• Minor, a person who has not attained the age of 18. If court appoints
guardian for him, the period of minority extends to the age of 21.
• Guardian is authorized to open minor account jointly in the name of
guardian and minor(s), payable to either or survivor.
• Title of A/C should be on minor’s name (as per Form B), word minor to be
added to the title.
• In AOF, particulars of the guardian will be filled in personal details.
• Attested copy of the CNIC of guardian duly verified through NADRA.
Attested copy of the Form B of the minor.
9. ILLITERATE PERSON
• Right / Left both thump impressions of the account holder (in case of
women the thumb impression is right and in case of men the thumb
impression is left hand).
• Two recent Passport size photographs of the account holder.
• Marking of All Drawings in person Account on AOF.
• In case of withdrawal of large amounts in excess of Rs.5000, it is
advisable that the thump impression of the account holder be affixed in the
presence of an independent witness known to the Branch Manager and
his full name and address should be recorded below his signatures as
required under operational Manual of the Bank.
• Cheques in clearing not allowed.
• Photos are not staple and are pasted with the gum because when the
illiterate person wants to put the thumb impression, with the staple
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pictures the thumb impression can be misplaced and it is advisable to

paste the photos of the illiterate holder.
“Account Opening” Common Irregularities
• All columns of Account Opening Forms not filled in properly.
• Source of income, evidence of Business and nature of

service not mentioned.
• Monthly turnover not Input in Symbols / turnover does not

match.
• Letter of thanks to Account Holder not sent or sent without

dispatch number.
• CNIC not verified with NADRA before opening account.
• Un-delivered letter of thanks not kept on the file and notation

is not made into the system.
• Account opened on the basis of indirect address which is

risky & dangerous.
• Same day issuance of cheque book without verifying A/c

holders’ postal / business address.
• Not taking acknowledgement signatures for Account

Opening Forms, Cheque Books.
• Date of Cheque Book issued not stated on Account Opening

Forms.
• Customer’s signatures neither admitted nor verified.
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• Cheque Book acknowledgment received without delivering

the cheque book.
• Government Accounts opened without orders of competent

authority.
• Agreement on A/c opening forms not signed by the A/c

holders.
• Notation that customer was interviewed by the manager and

that CNIC verified through NADRA not recorded on AOF.
• CPF (Client Profile Form) not properly filled in with

respective information.
• Customer’s not categorized according to risks e.g.
High risk customer.

Medium risk customer.
Low risk customer.
• Record of Accounts opened & closed not maintained by
checking Symbols Listings.
MCB BANCASSURANCE
Products
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Risk Management
Risk Management at MCB is aimed at maximizing value for its stakeholders. All
entities face uncertainty and the challenge for management is to determine how
much uncertainty to accept as it strives to grow stakeholder value and what
should be the return associated with the risks taken. Uncertainty presents both
risk and opportunity, with the potential to erode value. Risk Management at MCB
Bank enables management to effectively deal with uncertainty and associated
risk and opportunity, enhancing the capacity to build value. Value is maximized
by setting strategy and objectives to strike an optimal balance between growths
and return goals vis-à-vis related risks, and efficient and effective deployment of
resources in pursuit of the set objectives.
Risk Management Encompasses:
Aligning risk appetite and strategy-considering the entity’s risk appetite in

evaluating strategic alternatives, setting related objectives, and developing
mechanisms to manage related risks.
Enhancing risk response decisions-provides the rigor to identify and select

among alternative risk responses-risk avoidance, sharing, mitigation and
acceptance.
Reducing operational surprises and losses-identify potential events and establish

responses, reducing surprises and associated costs or losses.
Improving deployment of capital-obtaining robust risk information allows
management to effectively assess overall capital needs.
These capabilities help management achieve the entity’s performance and

profitability targets and prevent losses. Risk Management ensures effective
reporting, compliance with laws & regulations an helps avoiding damages to the
entity’s reputation and associated consequences.
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At strategic and macro levels, we have reconstructed our Risk Management

organization in line with framework provided by Risk Management Guidelines of
the State Bank of Pakistan, frameworks for risk identification, measurement,
monitoring and controlling at micro level are in the final phase of development
and will be implemented by the end of Financial Year 2007. We are, however, on
course for implementation of Basel II Capital Accord.
Staff Retirement Benefits:
The Bank operates the following staff retirement benefits for its employees:
a) For clerical / non-clerical staff who did not opt for the new scheme, the
Bank operates the following:
1) an approved contributory provident fund;

2) an approved gratuity scheme; and
3) a contributory benevolent scheme
b) For clerical / non-clerical staff who joined the Bank after the introduction
of the new scheme and for others who opted for the new scheme
introduced in 1975, the Bank operates the following:
1) an approved non-contributory provident fund introduced in lieu

of the contributory provident fund;
2) an approved pension fund; and
3) contributory benevolent scheme
c) For officers who joined the Bank after the introduction of the new scheme
and for others who opted for the new scheme introduced in 1977, the
Bank operates the following:
1) an approved non-contributory provident fund introduced in lieu

of the contributory provident fund; and
2) an approved pension fund.
However, the management has replaced the pension benefits for employees in
the officer category with a contributory provident fund for services rendered after
December31, 2003.
d) For executives and officers who joined the Bank on or after January 01,
2000 the Bank operates an approved contributory provident fund.
e) Post retirement medical benefits to entitled employees.
Page | 32
Annual contributions towards the defined benefit plans and schemes are made
on the basis of actuarial advice using the projected unit credit method. The above
benefits are payable to staff at the time of separation from the Bank’s services
subject to the completion of qualifying period of service. The net cumulative
actuarial gains/losses at each balance sheet date are recognized equally over a
period of three years or the expected remaining average working lives of
employees, whichever is lower.
Past service cost resulting from changes to defined benefit plans to the extent
the benefits are already vested is recognized immediately and the remaining
unrecognized past service cost is recognized as an expense on a straight line
basis over the average period until the benefits become vested.
Segment reporting:
A segment is a distinguishable component of the Bank that is engaged in

providing products or services (business segment) or in providing products or
services within a particular economic environment (geographical segment), which
is subject to risks and reqards that are different from those of other segments.
The Bank’s primary format of reporting is based on business segments.
1- Business Segment
Corporate Financing
It includes underwriting, securitization, investment banking,
syndications, IPO related activities (excluding investments) and
secondary private placements.
Trading and Sales

It includes fixed income, equity, foreign exchanges commodities,
lending to financial institutions, repos and brokerage debt.
Retail and Consumer Banking

It includes retail lending and deposits, private lending and deposits,
banking services and retail offered to its retail customers and small and
medium enterprises.
Commercial Banking
It includes project finance, export finance, trade finance, leasing,
lending, guarantees and bill of exchange relating to its corporate
customers.
2- Geographical Segment
Page | 33
The Bank operates in three geographic regions being:

• Pakistan
• Asia Pacific (including South Asia)
• Middle East
During the year, the Bank was admitted to the Official List of the UK Listing
Authority and to the London Stock Exchange Professional Securities Market for
trading of Global Depositary Receipts (GDRs) issued by the Bank. The GDRs
constitute an offering in the United States only to qualified institutional buyers in
reliance on Rule 144A under the U.S Securities Act of 1933 and an offering
outside the United States in reliance on Regulation S. The Bank has issued
8,622,100 GDRs each representing four ordinary equity shares at an offer price
of US$17.3970 per GDR (total receipt being USD$149.999 million) Accordingly,
based on an exchange rate of Rs.60.70=US$1.00 (which was the exchange rate
on the date of the final offering circular relating to the GDR issue made by the
Bank), 34,488,400 ordinary equity shares of nominal value of Rs.10 each of the
Bank were issued at a premium of Rs.254 per ordinary equity share (total
premium amount being Rs.8,760.054 million).
The net proceeds from the issue of the GDRs are being utilized for general
corporate purposes. Holders of GDRs are entitled, subject to the provisions of
the Deposit Agreement, to receive dividend, if any and rank pari passu with other
equity shareholders in respect of dividend. However, the holder of GDR have no
voting rights or other direct rights of shareholder with respect to the equity shares
underlying such GDRs. Subject to the terms and restrictions set out in the
offering circular dated October 11, 2006, the deposits equity shares in respect of
which the GDRs were issued may be withdrawn from the depository facility.
Upon withdrawal, the holders will rank pari passu with other equity shareholders
in respect of dividend, voting and other direct rights of shareholder. As at
December 31, 2006, 4.900 million of the deposited equity shares had been
withdrawn from the depository facility.
Risk Management:
The wide variety of Bank’s business necessitates a risk management system to

identify, measure, monitor and manage risks effectively. Bank’s risk management
framework is based on three pillars; risk principles, organizational structures and
prudent risk measurement and monitoring processes which are closely aligned
with the activities of the Bank so as to ensure that risks are kept within an
acceptable level.
Risk Management Organization:
The bank risk management function is independent of the business areas. Based
on the State Bank of Pakistan’s (SBP) guidelines and Bank for International
Settlement’s frameworks, the bank has constituted a Risk Management
Committee (RMC), developed an elaborate risk identification measurement and
Page | 34
management framework and has also reorganized risk management function

broadly based on the following:
• Setting up of separate risk areas (as detailed below)

• Engaging the advisory services of an international consultant for the
overall risk management function.
The head of risk management is a member of risk management & management

committees of the Bank and is responsible for credit, market and operational risk
management activities within the Bank in close coordination with respective
business areas. To ensure independence, head of risk management is directly
reporting to the RMC.
For each risk, i.e. credit, operational and market, a specific department has been
established with the mandate to:
• Identify, measure, monitor and mitigate risk while ensuring that

risk/reward relationship is maintained at an optimal Setting up of
separate risk areas (as detailed below)
• Ensure that the business conducted is consistent with the risk

appetite of the Bank.
• Formulate and Implement risk policies, procedures and

methodology n coordination with business areas.
• Conduct periodic reviews to ensure that the risk are within

acceptable parameters, and
• Develop & implement risk management infrastructure & systems

that are appropriate for each area and flexible to cater risk
emanating from changing banking environment.
• The most important risk that Bank management assumes are

specific banking risks and risks arising from the general business
environment.
•
The Bank’s risk management process distinguishes among various kinds of
specific banking risks and mainly comprises of credit risk, liquidity risk,
operational risk and market risk. The policies and procedures for managing risks
are outlines below:
Credit Risk:
Page | 35
Credit risk makes up the largest part of the Bank’s risk exposures. The Bank
measures and manages its credit risk by adopting the following policies:
• Consistent standards are applied for credit decision processes.
• The approval of credit limits for counter parties and the management
of individual credit exposures are subject to credit review.
• Every extension of credit or material change to a credit facility (such

as tenor, collateral structure or major covenants) to counter party
requires credit approval and independent review at the appropriate
levels.
• The Bank assigns credit approval authorities to individuals according

to their qualifications, experience and training and the management
reviews these periodically. The approval process is checked through
independent review by Risk Management Group (RMG), and post-
fact by the audit function.
In addition, the below listed initiatives have been initiated by the Bank for
enhancement of risk management capabilities:
• Development of risk based credit MIS.
• Exposure and Collateral related database is being beefed up as per

Basel II requirements.
• Credit Administration role being revitalized and Credit Risk Control

(CRC) roll out plan being implemented.
• Automation of CRC function is being planned in line with the roll out
of the Bank’s core banking application.
• Establishment of portfolio management function.
• Up-dation of credit manual to provide comprehensive guidelines for

credit process and to adopt latest development in credit risk
management practices.
The management measures and consolidates all the Bank’s credit exposures to
each obligor on a global consolidated basis that applies across the Bank.
Concentration of Credit and Deposits:
Out of the total financial assets of Rs.325,641 million (2005: Rs.287,127 million)
the financial assets which are subject to credit risk amounting to Rs.317,694
million (2005: Rs.281,063 million). To manage credit risk the bank applies credit
Page | 36
limits to its customers and obtains adequate collaterals. Investments amounting

to Rs.46,953 million (2005: Rs.57,103 million) are guaranteed by the
Government of Pakistan. In addition, an amount of Rs.21,870 million (2005:
Rs.15,054 million) are held by the Bank with the State Bank of Pakistan and
central banks of other countries.
Market Risk Management:
The bank is exposed to interest rate risk, foreign exchange risk and equity price
risk. The bank is using in-house and vendor based solutions for calculating mark
to market value of its positions, and generating VaR (value at risk) and sensitivity
numbers. Besides conventional methods, the Bank is using VaR for market risk
assessment of assets booked by treasury and capital market groups. For
calculating VaR numbers, of conventional products, the Bank is using variance
covariance methodology, while for derivatives and structured products Monte
Carlo simulations are used.
Further stress testing of both banking and trading books are performed in line
with SBP guidelines.
The Bank is exposed to interest rate risk both in trading and banking books.
Presently the market risk reporting system is generating risk numbers of
Government securities held by the Bank’s treasury. The risk management
system generates daily reports based upon the marked to market value of these
assets. These reports provide risk numbers i.e. duration, PVB and VaR on
individual security basis. The system also generates summarized reports on
portfolio basis. These reports are presented to the senior management for review
on daily basis.
Foreign Exchange Risk Management:
Main objective of foreign exchange risk management is to ensure the foreign

exchange exposure of the Bank lies within the defined risk appetite (10% of the
paid up capital). Daily reports are generated to evaluate the exposure in different
currencies. Further risk management system generates VaR and PVBP numbers
for foreign exchange portfolio to estimate the potential loss under normal
conditions. Stress testing of foreign exchange portfolio is also performed and
reported to senior management. All these activities are performed on daily basis.
Equity Price Risk:
Page | 37
Equity price risk is managed by applying trading limit, scrip-wise and portfolio
wise nominal limits. VaR numbers generation and stress testing of the equity
portfolio are also performed and reported to senior management on daily basis.
Liquidity Risk:
It is the policy of the Bank to maintain adequate liquidity at all times, in all
geographical locations and for all currencies and hence to be in a position, in the
normal course of business, to meet all the obligations, to repay depositors, to
fulfill commitments to lend and to meet any other commitments made. The Bank
manages liquidity risk in three stages:
• Balance sheet management;

• Liquidity management; and
• Intraday liquidity management.
• Balance sheet management:
Balance sheet management is the practice of reviewing the actual and planned
strategic growth of business and its impact from a balance sheet integrity and
sustainability perspective. As such the goal is to identify any risks arising from
structural imbalances and concentration, and seek to alter plans in order to avoid
these developing into a liquidity problem.
• Liquidity management:
Liquidity management is the day-to-day practice of ensuring that the Bank is able
to meet all its payment obligations as they fall due without having to sell assets or
borrow funds at short notice at adverse market prices. While primarily focused on
the management of cash flows, the Bank maintains a portfolio of marketable
securities that can either be sold outright or sold through a repurchase
agreement to generate cash flow for meeting liquidity requirements.
• Intraday Liquidity management
Intraday Liquidity is the practice of ensuring that the Bank has sufficient cash
during the day to make payments through the local payment system. In this
respect, the Bank maintains cash balances from which payments are made or
generate cash balances through the receipt of payments due or from borrowings
or the outright sale or pledging of qualifying securities with the State Bank of
Pakistan.
Operational Risk:
Page | 38
Operational risk is defined as the risk of loss resulting from inadequate or failed
internal processes, people and systems or from external events.
The Bank has an operational risk policy approved by Board of Directors.

Operational risk is presently in state of evolution. The policy among other aspects
focuses on measuring operational risk through establishing systems for
maintaining operational loss database, identifying and monitoring key risk
indicators, setting operational risk tolerance levels, etc.
The Bank is in the process of developing and documenting a detailed operational

risk framework. The purpose of framework is to guide the implementation of
operational risk policy. The framework aims at laying out clearly defined roles
and responsibilities of individuals/units across different functions of the Bank that
would be involved in performing various operational risk management tasks.
AWARDS AND ACCOLADES

Euromoney Awards
Best Bank Award 2008
Best Domestic Bank Award 2000
Asia Money Award

Best Domestic Commercial Bank Award 2005
Best Domestic Commercial Bank Award 2004
Page | 39
CHEQUE WITHDRAWL & DEPOSIT

(OUTWARD/INWARD CLEARING)
Cheque Deposit & Withdrawal through Clearing
Overview
Clearing of banking instruments like demand draft, payment order, collection and
payment of cheque, mailing transfers , telegraphic transfer, dividend warrants,
etc,. Collection and payment of cheques are known as inward and outward
clearing. In the past the clearing process is done in a way that if a cheque is
come to bank for clearing the bank collect all the cheques at specific time limit
Page | 40
and after that time the bank clearing officer goes with a guard and goes to
different bank for clearing of cheque. It is quite a lengthy process and risky
process and now state bank offers this facility for the clearing of cheques through
NIFT. The NIFT system is more efficient and quick in terms of time and accuracy
as compared to the manual system of cheque clearing. NIFT is introducing
modern techniques for clearing of financial instruments by duly realizing the
future problems and prospects of the payments system in Pakistan. The
automated system, installed by NIFT, is not only quick and efficient but also
flexible to accommodate various types of instruments and expected increase in
their volumes .NIFT has installed automatic cheque-sorters that can sort 30,000
cheques per hour.
a)Inward Clearing:
Payments of cheques of our customers drawn on MCB.
b)Outward Clearing:
Collection of funds of local cheques deposited by the customer drawn on other
Banks like the cheques of MEEZAN bank , Faysal bank, Askari bank and all
these cheques have the same city and come to the branch of Samnabad for
clearing . This is known as the outward clearing.
CLEARING REGISTER
The clearing officer put all the records on the clearing register. The register
contains the columns like L.B.C. In this we register the name of the person in
whose account te amount is to be deposited. The second column contains the
ACCOUNT TITLE in this the name of the person in which the amount is to be
deposited. The next column is DRAWER we mention the name of the city for
which cheque belongs. Like Faisalabad. The next column is DRAWEE which
contains the name of the bank whose cheque is to be sent for clearing. The next
column contains the CHQUE NO. In this the instrument number is mentioned.
And next column is AMOUT and this the amount which is mentioned on cheque
and is on deposit slip which must be same is recorded. After recording all the
data the clearing officer puts the total on the ADD LIST and only cheque amounts
are mentioned on it and not seen the deposit slips. The officer also put the
Page | 41
carbon paper and after that he puts the total and telly it with the amount put on
the register. And at last he put the bundle cover form and written the total amount
on it and after various stamps like clearing stamps which must be of the next day
put cheque is presented on 3rd August the clearing officer put 4th August stamp
on it and another stamp on the back after all that process he put the cheque with
bundle cover form in the bag of the NIFT. One thing also kept in mind is that
cheque have the name mentioned on it if a cheque sent for clearing and having
no name of the holder or bearer then the cheque is returned and is not cleared
and also note that that a person who us thumb impression for account is not
eligible for clearing.
Clearing process by NIFT:

The automated cheque processing system is operated by the NATIONAL
INSTITUTIONAL FACILITATION TECHNOLOGIES (NIFT), a private company
for the clearing of cheques. In this different banks and their branches will directly
approach the NIFT and send their cheques and various instruments for the
clearing purposes. In NIFT every bank has appointed a representative for the
clearing, for example MCB representatives, ALLIED bank representative etc,
have been appointed by the NIFT. At night all the representative get together and
sorted the cheques o of all the branches and then makes the clearing of
cheques. NIFT sends its representative to the branches to the banks and gives
them an INTER CITY Clearing advice. At morning the advice called
DIFFERENCE and its contains;
Transaction code: 2242
Cheques delivered by you: xxxxx
Cheques received by you: xxxxx
Difference xxxxx
If the difference is favorable then the entry is
HEAD OFFICE …………………….. DEBIT
BRANCH…………………………………………CREDIT
Page | 42
If the difference is unfavorable then the entry is reversed

BRANCH………………………. DEBIT
HEAD OFFICE………………………..CREDIT
And the evening advice is called CHEQUE RETURN advice it contains the
cheque which are return and which are dishonored due to various reasons like
bouncing of cheque( cheques returned due to insufficient funds) like cheque is
mutilated and there are many reasons by which a cheque can be returned.
If a cheque is returned the clearing officers put this cheque in the cheques
returned register and gets the initials of the cheque holder on it.
CROSSING OF CHEQUES
WHAT IS CHEQUE:
A cheque is an instrument which is used for drawing the amount from the bank it
is called Cheque.
Cheque crossing
When a cheque bears across its face two parallel lines containing the words” And
Company ” or any other abbreviation thereof , the cheque is said to be crossed.
Crossed cheque categories
• Cheque crossed specifically.
Page | 43
• Cheque crossed generally
Definition of General crossing:

Where a cheque bears across its face an addition of the words “and
company” or any abbreviation thereof, between two parallel transverse
lines, or of two parallel transverse lines simply, either with or without the
words “not negotiable”, that addition shall be deemed a crossing, and the
cheque shall be deemed to be crossed generally. [section 123]
(source: http://en.wikipedia.org/wiki/Crossing_of_cheques)
Crossing must be across the face of the cheque. Crossing may either be
in ink, printed or typed.
By crossing a cheque generally the banker is directed not to make
payment except through another banker and thus a person who is not
entitled to receive payment is prevented from getting the cheque
encashed at the counter of the paying bank.
1. 1 and 2 crossing on the instrument explains that payment cannot be made on

the cash counter rather the funds will be credited into the beneficiary’s account
with the same bank or another bank.
2. Crossing at serial number three indicates or gives direction to the paying bank
that payment has to be made:
o Through account or Bank

o To the named Payees only
Page | 44
A person taking a cross cheque, crossed generally or specifically bearing in

either case the words “Not Negotiable” shall not have and shall not be capable of
giving a better title to the cheque than that which the person from whom he/she
took it in first instance had. Practically this crossing deprives the cheque of it two
characteristics of negotiability and transferability free from the defects and
transferability by endorsement.
Definition of Special Crossing:
“Where a cheque bears across its face an addition of the name of a banker
with or without the words “Not Negotiable” that addition, shall be deemed
a crossing and the cheque shall be deemed to be crossed specially and to be
crossed to that banker.”
Conversion of a Crossed Cheque into Open Cheque:
A crossed Cheque can be converted into an open cheque by writing, “Please pay
Cash” near the crossing with full signature of the drawer. The drawer can cancel
the crossing. However, the banker can cancel the special crossing.
Who can cross the cheque?
1. The drawer.
2. Holder, where the cheque is uncrossed.
3. Holder may cross a cheque especially where the cheque is crossed
generally.
4. A cheque crossed specially to one banker may be crossed specially to
another banker.
5. Where an uncrossed cheque or cheque crossed generally is sent to a
banker for collection may cross it especially to himself.
Cheque Deposit (Outward CLEARING):
a) Scrutiny of the Deposit Slip:
Deposit slips and the cheques/instruments should be properly scrutinized

before accepting them:
o Title and Account number are mentioned.
o Amount tallies with that of cheque(s).
o There are no unauthorized alterations.
Page | 45
o The amount, account number and the title of account in the

customer copy are same as in the Original /pay-in-slip.
o The pay-in-slip bears the signature of the depositor at the specified
place.
o The amount in words and figures are same
b) Scrutiny of Cheque/Instruments:
Following points should be properly checked:

o The cheque is not post dated or undated or stale.
o There is no unauthorized alteration in the cheque.
o The amount in words and figures is same.
o Any endorsement and special crossing are in order.
o Nothing on the cheque indicates that the depositor is not entitled to
receive the amount.
o The cheque payable to a firm, company or institution should not be
accepted for credit to the account of partner, director, agent,
attorney, manager or any employee.
o If the payee is a Government Department / Official or a Trust, a
cheque should not be collected for a person other than the payee.
o Cheque Crossed / Marked “Payee Account Only” is not deposited in
another customers account.
o Order cheque being deposited in other account is properly endorsed
by the Payee in favor of depositor and also signed by the depositor.
o “Non-Transferable” instruments should not be collected for a person
other than the payee.
Cash Department
There are three sub-departments of cash;

• Billing Department.
• Receipt Department.
• Payment Department.
Page | 46
Billing Department:
In this department the person receives the payment of the bills. At the end of the
day
Physical cash + stub = Balance
Physical cash means the cash in vault / cash in hand which the person receives
from the customer for the payment of the bills.
Stub means the transfer of funds which must be on the separate scroll,
At the day end it must be balance and there is no difference.
Bill Collector must kept in mind that the amount which he is receiving is
according to the payment which is within due date or I the payment is not within
due date then he receives the amount which is due after the date and this
amount includes the fine for not paying the bill within due date.
Bill collector charges Rs:8 on every bill he receives for the FESCO as a bank
services charges. And the bank charges for the FESCO collection is done
DAILY.
While on other bills like WASA, SUI GAS, PTCL, the collector charges RS:8 on
each bill but it s done at the end of the Month.
Receipt Department:
Receipt department is the department which receives cash for the depositing in
the account of the customers. In this;
ONLINE + DEPOSIT
Online
In this the cash receiver, receives a full account digit which is of 16 digits
plus CNIC copy plus bank charges.
Full digit a/c + NIC COPY + Bank Charges
The bank charges for online;
Within city………….. No charges
Out of the city…………… Rs:120
Page | 47
DEPOSIT:
In this the bank officer receives the deposit slip plus the a/c no.
SLIP + A/C No.
PAYMENT DEPRTMENT
In this the officer
Online cheques (out of city cheques) + within city cheques
The bank charges for out of the city are
Current Account…………. Rs: 120
Saving Account………………. Rs: 174
If the party is presenting cheque its self then NIC copy is must and if the party
has not the copy of CNIC then the Varisys must be used.
OWN BRANCH CHEQUES:
If the party resent the cheque itself then payment made to the party and if the 3 rd
person presenting the cheque the CNIC copy is must.( above Rs: 25000)
At the end of the day after 5’ O clock all three departments balance the amount
itself and after balancing the amount itself the three departments collectively
balance all together
Cash limit
The MCB kept the cash in hand for about limit to Rs: 80000 which can also
includes he prize bond amount and if the amount is excess then the get EXCESS
INSURANCE = Bank has obtained insurance from the ADAMGEE INSURANCE
and they get over-night insurance.
CASH CATAGORIES
Page | 48
Cash may be re-issuable ,soiled, defective, un-sorted and the average payment
must be equal to re-issue , it should not be less and can be excess. And this all
wok is done on a CMR( cash management register).
PRIZE BOND REGISTER
In this register the prize bond which are purchased and then re-sale.
When the prize bong are purchased the entry is:
Bond………………………….. debit
Cash……………………………..credit
And when the prize bond are sold then the reverse entry is done. Prize bond
should be write-off after 1 month period and the schedule is provided by the
STATE BANK OF PAKISTAN.
Cash Position Register
In this the officer use the formula
Ratios = Average cash in hand/ Average deposit * 100
Ratio is calculated at the end of the month and deposit average is calculated
weekly and the average cash in hand is calculated by the cash in number of days
and divided by the number of days.
Other terms and products
RUPEES TRAVELERS CHEQUE:
Page | 49
In old age it was used to carry cash from one place to another without any fear of
theft. In Pakistan Rupees Travelers Cheque is first time issued by the MCB bank
in 1993. It makes a convenient way to carry cash. MCB issues RTC
denomination of Rs:10000 & Rs5000 & Rs:1000. And only this denomination is
used in Pakistan. RTC is valid for 10 years from the date of issue.
Demand Draft:
Like cheque is a customer’s cheque Demand Draft is the BANKER’S CHEQUE.
Demand Draft is used with within the city and Demand Draft is made payable at a
specified branch of bank and at a specified centre of a bank. It is a pre-paid
negotiable instrument.
PAY ORDER:
Pay Order is also a Banker’s cheque. This instrument is issued by the bank for its
full value and it is similar to the Demand Draft. Pay order are used out of the city.
In practice, these instruments are payable at the branch of issue and made
payable within the local jurisdiction.
MCB Mobile BANKING:

Now-a-days the MCB has provided the facility if a mobile banking. Customers
can get the current balance and latest promotions and mini statements on the
way to mobile.
MCB ATM CARDS:

MCB has the owner of issuing the first ATM card in Pakistan. Now MCB
has the largest ATM network in Pakistan and MCB ATM Card is accepted over
4000 ATM’s nation wide.MCB issue ATM Gold Card and MCB Regular Card.
MCB ATM on Wheels
MCB also looks after the convenience of its customers. MCB gives ATM
on wheels facility to its customers and through ATM on Wheels customers of
MCB can get their amount through any other ATM outlet which is not of MCB.
Like MCB customer can get the amount from the UBL ATM machine and they
are charged very low price for this
Page | 50
Other Products and Services
Online:
The largest network of over 600 online branches in the country and growing.
Providing customers with 24/7 real time online transaction facilities.
Page | 51
Full Day Banking:
Enjoy the convenience of extended banking hours from 9 to 5, even on

Saturdays. To satisfy your banking needs at all MCB Full day Banking branches
across the country we now serve you a wide range of services throughout the
day.
MCB Lockers:
The best protection for your valuables. Lockers of different capacities are
available nationwide.
Remit Express:
International remittances with a two-way messaging facility delivered at your

door-step within 24 to 72 hours.
Islamic Banking:
MCB Islamic Banking provides Riba Free and Sharjah Compliant solutions to
various customer segments in a growing number of cities. With the help of
Sharjah Specialists, lawyers and Professional Commercial Bamkers, we have the
best solutions to cater to your needs-the Islamic way.
MCB Virtual International Banking:
MCB provide the convenience of banking on the internet. Whether at office,

home or traveling long on to and enjoy 24-hour access to all your accounts at
MCB for the largest array of services such as Inter Bank Funds Transfer, Utility
Bill Payments, Mobile Top-ups and many more.
MCB Call Center
There’s no easier way to bank than the new enhanced MCB Call Center, which
blends innovation and convenience to provide you banking services that go
beyond your expectation. We make sure your banking needs are met 24/7 from
the comfort of your very home because we at MCB, are just a call away!
Personal Loan
MCB Personal Loan is simply a clean cash facility extended for personal use. It
offers a fixed installment loan that provides you access to cash instantly without
any collateral. Financing available is up to 5 years for amount up to Rs.1 million.
Page | 52
MCB Visa Card
A suit of Classic and Gold Credit Cards focusing primarily on providing

convenience, safety, shopping pleasure and security giving a different feel to the
world of Credit Cards through innovative features. These unique features include
i-revolve, which makes the variable mark-up rate available to you upon revolving
and is the first of its kind in Pakistan. Other ad-ons include comprehensive
insurance plans, installment plans, reward points, upfront loyalties and much
more.
MCB Mobile Banking
Banking at your fingertips. SMS anytime to get information regarding balance

and mini statements.
MCB ATM Card
The nation’s largest network of over 260 ATMs and still growing. Get 24-hours
convenience of cash withdrawal, mini-statement, utility bill payment, funds
transfer services and much more.
MCB ATM on Wheels
MCB on wheels. Now not only do you get a world class banking service but we
make sure of your convenience. Our new classy mobile ATMs ensure that you
are given a service closer to you.
M NET
MNET is an electronic hub for ATM sharing plus other touch points. Members
include 16 local and foreign financial institutions enjoying ATM sharing and
bureau services.
Smart Card
A secure instrument of payment providing Cash Free Convenience. It is more

than just an ordinary Debit Card offering customers the peace of mind through
unmatched and convenient services including easy bill payments, funds transfer,
24-hours cash drawl, balance inquiry and unlimited shopping pleasure.
Business Sarmaya
MCB Business Sarmaya is a Running Finance facility against your residential

property. It offers Running finance up to 20 million with low mark-up and BTF
facility at competitive rates.
Page | 53
Corporate Financing:
Providing access to diversified financing options, including working capital loans,

term loans, trade finance services and investment banking.
Instant Financing:
Get a loan instantly at any MCB branch. Offering same day financing facility
against liquid collateral at competitive pricing.
Rupee Travelers Cheque:
A safe and secure way to make payments nationwide. MCB Rupee Travelers
Cheque, being the market leader, is the most widely accepted way to pay cash
for travel-related purposes.
Easy Bill Pay:
MCB Easy Bill Pay is an easy solution to pay your Utility and Mobile Phone bills.
MCB ATM Card or MCB Smart Card holders can easily pay their bills through
MCB ATMs, MCB Virtual-Internet Banking and MCB Call Centre with security
and peace of mind.
Pyara Ghar:
Page | 54
MCB Pyara Ghar is an ideal Home Finance product that lets you purchase,
renovate or construct your home the way you have always wanted. Financing
available is up to 20 years for amount up to Rs. 20 million.
Car 4 U:
MCB Car4U Auto Finance is your power move that gets you not only a car of
your own choice but leads you to the best in life. It is affordable with competitive
mark-up, flexible conditions, easy processing and above all, no hidden costs.
MCB Sabzazar:
MCB Sabzazar is an agricultural financing scheme for farmers that offers two
financing plans, MCB Shadabi Plan for short-term financial needs and MCB
Khushali Plan for long-term financial requirements
Swot analysis
The over all evaluation of a company’s strength, weekness,opportunities,and

threats is called SWOT analysis.
Page | 55
Strengths
The main strength of the bank lies in its services.the other fact that
contributes is approaching to each segement of society.another positive
issue that because the strength its innovation.some others are as follows
• Bank reputation
• Technical management skills
• Customer satisfaction
• Promotion effectiveness
• Team based approach
• Continuous improvement
• Quest for quality
• Employees respect and dignity
• Good corporate itizenship
Weakness
 Competition pressure:bank has tough competition pressure.we are
having very well established and well reputed ompeitor in the
market having addressing the same community as we are dealing
and is havig good services
 Financial pressure:no doubt MCB has a lot of finance but due to
competition pressure they have a need of finance
Opportunities
For more amelicration there is a new market.extra advertising support will

enable us to improve our services. Almost every organization has the
tendency to grow in size.we also have this opportunity
Threats
• Weak economic conditions of Pakistan
• Uregistered business concerns
Page | 56
RECOMMENDATIONS
Shortage of staff:
Almost in all branches of muslim commercial bank the problem of

shortage of staff is very common. There are only few employees who are the
alland end all of the whole branch resulting in burden of work. Basically the main
idea it is that whenever there is shortage of staff in any organization it always
result in lot of work and also boost up the destructiveness as well because
people working over there feel like that they can do whatever they feel like so sre
least bothered about the rules and regulations as implemented by the head office
and mostly it resultsin corruption
Staff Is Not Adaquately Trained:

Staff in almost all branches of MCB is not adequately trained with the
contemporary era. Basically MCB is from the very beginning, is pioneer of new
products including ATMs , Mobile Banking & Online banking as well but as they
developed the new systems and products in order to satisfy the customer want
they did’t get their staff trained in relation with those iinnovations . MCB having
two staff colleges one in Lahore and one in Karachi but both make you aware of
the systems and procedures but are not training or can say emphasizing on
these innovated products.
Online banking:
This problem is related to the previous problem as well because when the
staff is not adequately trained then how can they satisfy their customer’s needs,
which is the basic theme or mission of MCB.
When MCB started their online banking, there were only one or two
banks(foreign banks) doing this practice because of having a larger network as
compared to all other domestic banks MCB started doing this practice but not
successful in it because of the abovetwo problems.
Others:
A lot of productive time is wasted by the staff in unproductive pursuits and

tea and lunch breaks are got voluntarily extanded and the time spent in corridors,
depends on the staff will. This tendency of late must be eliminated which relect
adversely on the image of the institution and has posed a serious problem.
No proper allocation of duties, suitable person for suitable job.
Distribution of work is not on equity basis, work has not been alloated properly
some workers have to work in late hours without any extra reward. So I suggest
Page | 57
that steps should be taken to allocate the work properly. No periodic increase on
salaries of employees.
Overall Suggestions For Improvement

From the quantum of the profit and its financial data it can easily judged
that after privatization MCB is performing well. Its deposit are growing day by day
and so is profitability. The controlling body is responsible for the productive
performance of the bank
Following are my suggestion to improve the efficiency for the development of the
country
Introduce various profitable investment scheme

A big portion of the home remittance is sent by Pakistan working capital
through MCB limited As we know a big portion of this amount is wasted
purchasing of luxuries. The people motivated to save money by offering the
deposit through various investment scheme. The rateof profit should increase 1%
or 2%than the other bank and it would be profitable step for bank
Training staff:
Staff turnover particularly of trained staff result in financial and other

losses. The amount spent by bank on employment, induction and training of an
outgoing officer constitutes to beat till another officer should ready prove his
work. The exodus of bank officer in the past has worsened the situation
Change the nature of work

Most of the bank employees are sticking to one seat with the result that
they become master of one particular job and loose their grip on other banking
operation. In my opinion all the employees should have regular job experience all
out-look towards banking. The promotion policy should be adjusted.
Page | 58
Conclusion
During the internship report , I drew the following conclusion,

MCB limited has implemented a SYMBOL system which promises the efficiency
and growth of the bank. MIS and computerization of branches has enhanced the
efficiency of the bank. Delegation of authority, wide branch network with ATM
installation and wide participation of employees in the decision making provides
the bank a competitive edge. The bank provides a conducive environment for
career growth. The bank pays a too low rate of interest on deposit which in
unattractive for its customers. There are too lengthy formalities and procedures
involved in mortgage of properties offered as collateral to the bank.
The MCB bank has made substation progree, recording strong growth in
revenues and earnings. The main derives were increase in outreach,
strengthened human resources. Including changes at the senior management
level, enhanced product portfoloios, improved control and vigilant credit risk
management. Our primary focus was our customers and we worked diligently
through the year to increasesatisfaction and loyalty as the needs and expectation
of our diversified base of customers continued to expand. A key initiative aimed
at including a segment based approach to the overall businesswas the
segeration of the retail banking group into commercial and consumer banking
groups. This expected to help the MCB bank in providing customer centric
solution in a more group generated healthy deposit and strengthened its SME
lending.
Page | 59
REFRENCES
//:www.mcb.com.pk
//:www.ibp.com.pk
//:www.wikipedia.com
//:www.sbp.com.
//:book of advanced accounts

Ahthour: sohail afzal, shukla, meags and meags
//:www.efulife.com.pk
//:www.lse.com.pk
// MCB broucher manual /annual report
Page | 60
Page | 61

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FAISAL AZAM Hailey College of Commerce 1522

Prof. AHMAD USMAN ,

The work presented in this manuscript was impossible to be accomplished

Words are lacking to express our humble obligations, indebtedness and

MCB's operations continued to be streamlined with focus on rationalization of

During my internship in MCB I worked in Remittances, Advances, Foreign

During the course of internship I learned about different functions performed by

OBJECTIVES OF STUDYING ORGANIZAION

My major objectives are as follow:

 To learn about the operations of banking

Development of Modern Banking:

In 1955 the British banks made a departure from traditional banking by

The Government of Pakistan ultimately decided to deregulate the financial

1. State Bank of Pakistan

Commercial Banks are companies “which transact the business of banking in

Banking Companies Ordinance 1962. Section 5(b) of which says: “Banking

Commercial Banks in Pakistan have been authorized to engage in any one or

History of MCB Bank Limited

The following are the core values of MCB Bank Ltd.

MCB Bank’s team of committed professionals is dedicated to maintaining long-

MCB’s leadership is stressing mainly on customer satisfaction and their objective

Full Steam Ahead

MCB’s leadership – steering customers through new waves of success.

It comes from planning ahead of time

It comes from kEeping a steady course

It comes from tAking on challenges

It comes from aDding value to our service

It comes from sEcuring common interests

It comes from bRidging the distances

It comes from aSsociating with you

Mr. S. M. Muneer Vice Chairman

Mr. Tariq Rafi Member

Mr. Shahzad Saleem Member

Mr. Sarmad Amin Member

Dr. Muhammad Yaqub Member

Mian Raza Mansha Member

Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Abdul Farid Bin Alias Member

Mian Umer Mansha Member

Mr. Muhammad Ali Zeb Member

Mr. M.U.A. Usmani Acting President

Dr. Muhammad Yaqub Member

Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Muhammad Ali Zeb Member

Mr. Malik Abdul Waheed Member

Human Resources Committee

Dr. Muhammad Yaqub Member

Mian Raza Mansha Member

Mr. Shahzad Saleemn Member

Mr. M.U.A. Usmani Member

Risk Management & Portfolio Review Committee

Mr. Tariq Rafi Member

Mr. Sarmad Amin Member

Mian Raza Mansha Member

Mian Umer Mansha Member

Committee on Physical Planning, IT System &

Mr. Sarmad Amin Chairman

Mr. S. M. Muneer Member

Mr. Tariq Rafi Member

Mian Raza Mansha Member