MCB Internship Report

INTERNSHIP REPORT ON MCB BANK LIMITED
INTRODUCTION
The word 'Bank' is said to have been derived from the words
Bancus or Banque or Bank. This history of banking is traced to as
early as 2000 B.C. The priests in Greece used to keep money and
valuables of the people in temples. These priests thus acted as
financial agents. The origin of banking is also traced to early
goldsmiths. They used to keep strong safes for storing the money
and valuables of the people. The persons who had surplus money
found it safe and convenient of deposit their valuables with them.
The first stage in the development of modern banking, thus, was
the accepting of deposits of cash from those persons who had
surplus money with them.
The goldsmiths used to issue receipts for the money deposited

with them. These receipts began to pass from hand to hand in
settlement of transactions because people had confidence in the
integrity and solvency of goldsmiths. When it was found that
these receipts were fully accepted in payment of debts; then the
receipts were drawn in such a way that it entitled any holder to
claim the specified amount of money from goldsmiths. A
depositor who is to make the payments may now get the money in
cash from goldsmiths or pay over the receipt to the creditor.
These receipts were the earlier bank notes. The second stage in
the development of banking thus was the issue of bank notes.
University of the Punjab, Gujranwala Campus

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The goldsmiths soon discovered that all the people who had
deposited money with them do not come to withdraw their funds
in cash. They found that only a few persons presented the

receipts for encashment during a given period of time. They also
found that most of the money deposited with them was lying idle.
At the same time; they found that they were being constantly
requested for loan on good security. They thought it profitable to
lend at least some of the money deposited with them to the
needy persons. This proved quite a profitable business for the_
goldsmiths. They instead of charging safe keeping charges from
the depositors began to give them interest on the money
deposited with them. This was the third stage in the development
of banking.

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DEFINITION OF BANK
The term 'bank' is being used for a long time, yet it has no
precise definition. The basic reason is that the commercial banks
perform not just one but many types of functions. The term bank
has been defined differently by different authors. Some are as
follows:
According to Crowther,
"Bank is a dealer in debts—his own and of other people."
According to G.W. Gilbert,

"A banker is a dealer in capital or more properly a dealer in
money. He is an intermediate party between the borrower and the
lender. He borrows from one party and lends to another."
According To Bamkinh Companies Ordinance

U/s3 (B) of Banking Companies Ordinance 1962 "Banker means
person transacting the business of accepting for the purpose of
lending or investment, of deposits of money from the public,
repayable on demand or otherwise and withdraw able by cheque,
draft, order or otherwise and includes any Post Office Savings
Bank."

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HISTORY OF BANKING IN PAKISTAN
The interesting point which I observed during the span of mine

internship was the historical background of Banking & Financial
sector which is the one in which great improvement and growth is
observed since the formation of Pakistan. For studying the
growth of this sector we can divide it into three stages, which
are as follows
a) Pre-Nationalization Era
b) Nationalization Era
c) Post Nationalization Era
A) Pre Nationalization Era
There were only two Muslim banks in Indo Pak before partition,
they were;
Habib Bank Ltd. (estd. in 1941 at Bombay) & Australia Bank Ltd.
(estd. In 1944 at Lahore). Hindus or Foreigners either owned all
other banks, at that time.
At the time of partition there were 631 bank branches in area,
which came under Pakistani control. But due to blood shed and
violence at large scale, mostly branches were closed and the
disparity can be assessed from the fact that on July 1948 there

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were 195 branches with deposits of Rs.88 crore (880 million) only.
Also a factor lagging in Pakistani industry was a central bank of
its own, by that time Reserve Bank of India was acting as central
bank for both countries and same currency notes were used in
both territories. But Reserve Bank of India was biased and Set
down Pakistan on many occasions such as the issue of funds
transfer etc.
In this period drastic steps were taken in government sector for
the improvement of overall position. The private sector also
responded to these changes and some very positive changes were
observed. Some of the steps taken by the government in this
regard were as under:
i. Inauguration of State Bank of Pakistan (SBP) on 1st July,
1948.
ii. Setting up of National Bank of Pakistan in November, 1949
to control the 'jute' export in East Pakistan and to act as
agent of SBP.
iii. Larger powers were given to SBP through SBP Act (1956)
for controlling purposes.
iv. Banking Companies Ordinance 1962 for protection and
guidance to banks.
v. Establishment of specialized banks, such as ADBP (1952);
a) HBFC (Nov, 1952);

b) P1CIC (Oct, 1957)
c) IDBP (Aug. 1961);
d) NDFC (Jan, 1973).

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These were the steps, which built a strong banking sector in

Pakistan. This is also obvious from the facts that by 1973 there
were almost 10 foreign banks were working in Pakistan and all
over deposit position was around Rs.2300 crore (23,000 million).
A bird eye view of 5 top banks was as given below:
BANKING SECTOR IN PAKISTAN IN 1973
BANK NO.OF BRANCHES DEPOSITS

Habib Bank Ltd. 667 Rs. 6,160 (million)
National bank of 579 Rs. 5,660 (million)
Pakistan Ltd.
United Bank Ltd 497 Rs. 5,670 (million)
MCB Bank Ltd. 506 Rs. 1,640 (million)
Allied Bank Ltd. 145 Rs. 570 (million)

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B) Nationalization Era:
On January 01, 1974 all Pakistani banks were nationalized through
Nationalization Act 1974. Under this law all Pakistani banks
became a public property. All small banks were merged in bigger
banks to create 5 major Pakistani banks Pakistani banks. These
banks were to control by Pakistan Banking Council. There are still
controversies about this act of government as whether it
contributed in success of failure of banks. However the major
changes after nationalization were as follows:
 Working of banks was extended to under developed

areas.
 Market expansion for credit and deposits.
 Bank were encouraged to extend cooperation to
neglected areas
 Decrease in service level of bank officers.
 Decrease in profitability as well.

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C) POST NATIONALIZATION ERA

In 1990 the government decided to denationalize all the
nationalized institutes. Some was also suggested in banking
sector. For this purpose, amendments were made to
Nationalization Act 1974 and two nationalized banks were
privatized. Along with this a permission to open banks in private
sector was also granted. The rules regarding establishment of
new banks and for incoming foreign banks were also relaxed.
The-three privatized banks are;
a) MCB taken up by a private group in April, 1991
b) ABL taken up by its own employees in September 1991.

c) UBL taken up by UAE party in 2002.
After these changes a large number of private and foreign banks
started their operations in Pakistan and the present status can
be seen from the following figures:
SCHEDULED BANKS
Category No. Of Banks

Nationalized Commercial Banks 3
Private / Privatized Commerce Banks 18
Public Sector Specialized Banks 4
Foreign Banks 19
Total Schedule Banks 44

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In addition to above mentioned scheduled banks there are 11

Development Financial Institutes (DFI’s), 16 Investment Banks
and 21 leasing and Modarbah Companies.
PAKISTAN BANKING SECTOR
• Nationalized Commercial Banks

• Privatized Banks
• Specialized banks
• Private banks
• Foreign banks
• Other financial Institutions
NATIONALIZED SCHEDULE BANKS
• First Women Bank Ltd.

• National Bank of Pakistan
• Habib Bank Ltd.
DE-NATIONALIZED SCHEDULE BANKS
• Allied Bank of Pakistan Limited

• MCB Bank Limited
• United Bank Ltd.

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SPECIALIZED BANKS
• Zarai Taraqiti Bank of Pakistan (ADBP)

• Industrial Development Bank of Pakistan(IDBP)
• Punjab Provincial Cooperative Bank
• Federal bank for Cooperatives
PRIVATE SCHEDULE BANKS
• Askari Commercial Bank Ltd.

• Bank Alfalah Ltd.
• Bank Al-Habib Ltd.
• Bolan Bank Ltd.
• Faysal Bank Ltd.
• Habib Credit & Exchange Bank
• Indus Bank Ltd.
• Metropolitan Bank Ltd.
• Platinum Bank Ltd.
• Prime Commercial Bank Ltd.
• Prudential Bank Ltd.
• Soneri Bank Ltd.
• The Bank of Khyber
• The Bank of Punjab
• Union Bank Ltd.

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FOREIGN BANKS
• ABN AMRO Bank N.V.

• Albaraka Islamic Bank BSC (EC)
• American Express Bank Ltd.
• ANZ Grindlays Bank Ltd.
• Bank of America (NT & SA)
• Bank of Tokyo Mitsubishi Ltd.
• Bank of Ceylon
• Banque Indosuez
• Citibank N.A.
• Credit Agricole A.G.
• Deutche Bank A.G.
• Doha Bank Ltd.
• Emirates bank International Ltd. P.J.S.C.
• Habib Bank A.G. Zurich
• Hong Kong and Shangai Banking Crop. Ltd.
• International Finance Investment and Commerce Bank
Ltd.
• Mashreq Bank PSC
• Oman International Bank SOAG
• Rupali Bank Ltd.
• Societe Generale, the French Int. Bank Ltd.
• Standard Chartered Bank
• Trust Bank Ltd.

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DEVELOPMENT FINANCIAL INSTITUTIONS (DFIS)
• Investment Corp of Pakistan

• National Development Finance Corp.
• Pakistan Industrial Credit and Investment Corp.
• Pak Kuwait Investment Company
• Pak Libya Holding Company
• Regional Development Finance Corp.
• Saudi Pak Industrial & Agricultural Investment
Corporation
• Small Business Finance Corporation
• House Building Finance Corporation
• National Investment Trust
INVESTMENT BANKS
• Crescent Investment Bank

• First International Investment Bank
• Atlas BOT Investment Bank
• Security Investment Bank
• Fidelity Investment Bank
• Prudential Investment bank
• Islamic Investment Bank
• Asset Investment Bank
• Al-Towfeek Investment Bank
• Al-Faysal Investment Bank

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• City Corporation Investment Bank (Pak) Ltd.

• Franklin Investment Bank Ltd.
• Orix Investment Bank (Pak) Ltd.
• Trust Investment Bank Ltd.
HISTORY OF THE MCB BANK LIMITED
Before separation of Indo Pak, the need for more Muslim banks
was felt. And Muslims having strong financial capacity were
thinking to invest in this sector as well. This was the idea which
paved the way for setting up MCB Bank Ltd known as MCB. This
was the third Muslim bank in the subcontinent.
HISTORY
This bank was incorporated under companies’ act 1913 on 9th July,
1947 (just before partition) at Calcutta. But due to changing
scenario of the region, the certificate of incorporation was
issued on 17th August, 1948 with a delay of almost 1 year; the
certificate was issued at Chitagong. The first Head office of the
company was established at Dacca and Mr. G.M. Adamjee was
appointed its first chairman. It was incorporated with an
authorized capital of Rs. 15 million.
After some time the registered office of the company was
shifted to Karachi on August 23rd, 1956 through a special
resolution, now recently the Head office of MCB has been
transferred to Islamabad in July, 1999 and now Head office is
termed as Principle Office.

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This institute was nationalized with other on January 1st, 1974.

At that time it had 506 branches and deposits amounting to Rs.
1,640 million. Although. MCB has a reputation of a conservative
bank but nationalization also left its effects on this institute as
well and by end of year 1991 in which it was privatized the total
number of branches were 1.287 and deposits amounting to as high
as Rs. 35,029 million
PRIVATIZATION
When privatization policy was announced in 1990, MCB was the
first to be privatized upon recommendations of World Bank and
IMF. The reason for this choice was the better profitability
condition of the organization and less risky credit portfolio which
made'' it a good choice for investors. On April 8th, 1991, the
management control was handed over to National Group (the
highest bidders). Initially only 26% of shares were sold to private
sector at Rs. 56 per share.
AFTER PRIVATIZATION
Ten years after privatization, MCB is now in a consolidation stage
designed to lock in the gains made in recent years and prepare
the groundwork for future growth. The bank has restructured its
asset portfolio and rationalized the cost structure in order to
remain a low cost producer.
After privatization, the growth in every department of the bank
has been observed. Following are some key developments:

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• Launching of different deposit schemes to increase saving

level.
• Increased participation on foreign trade.
• Betterment of branches and staff service level.
• Introduction of Rupee Traveler Cheques & Photo Credit
Card for the first time in Pakistan.
MCB BANK TODAY
MCB today, represents a bank that has grown with time,

experience and Pakistan. A major financial institution, in scope
and size, it symbolizes a fully growing tree evergreen, strong, and
firmly rooted.
FOREIGN TRADE
The bank conducted import business during the year amounting to

RS. 54.0 billion as compare to RS. 56.4 Billion In 2005. The
export business slightly improves to RS. 36.9 Billion From RS.
35.1 Billion. In 2006. Home remittances decline to RS. 16.7 Billion
From 30.7 Billion the decline in home remittances business was
due to freezing of Foreign Currency Accounts, which has
affected the confidence of Pakistanis working overseas.
YEAR 2006 COMPLIANCE

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MCB’s strength lies in providing a technological base at the gross

root level of the society with a challenge to educate and
assimilate such systems across vast cultural and economic
backgrounds. With over 768 automated branches, 263 online
branches, over 151 MCB ATMs in 27 cities nationwide and a
network of over 16 banks on the MNET ATM switch, MCB
continuously innovates new products and services that harness
technology for the customer’s benefits.
SOCIAL SECTOR
The bank activity participating in the Prime Minister self-

employment Scheme. The application received from various
applicants is being processed on merit and disposed off as quickly
as possible.
THE BUSINESS
MCB is in it’s over 50 years of operation. It has a network of

over 1,000 branches all over the country with business
establishments in Sri Lanka and Bahrain. The branch break-up
province wise is Punjab (57%), Sindh (21%), NWFP (19%) and
Blochistan (3%) respectively.
MCB has an edge over other local banks, as it was the first
privatized bank. The State Bank of Pakistan has restricted the
number of branches that can be opened by foreign banks, an
advantage that MCB capitalizes because of its extensive branch
network.
Fourteen years after privatization, MCB is now in a consolidation

stage designed to lock in the gains made in recent years and

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prepare the groundwork for future growth. The bank has

restructured its asset portfolio and rationalized the cost
structure in order to remain a low cost producer.
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. The Bank provides 24

hour banking convenience with the largest ATM network in
Pakistan covering 27 cities with over 151 ATM locations. The
Bank’s Rupee Traveller Cheques have been market leaders for the
past six years and have recently launched their Gift Cheque
Scheme.
MCB looks with confidence at year 2007 and beyond, making

strides towards fulfillment of its mission, "to become the
preferred provider of quality financial services in the country
with profitability and responsibility and to be the best place to
work".
A major achievement of MCB is that the state bank of Pakistan

has issued a license to MCB to start Islamic banking. Now MCB is
setting up a 1st Islamic banking branch at 1st floor shaheen
complex, Karachi. This complex starts working from September 1,
2003.

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Vision Statement
CHALLENGING AND CHANGING THE WAY YOU BANK

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Mission Statement
To become the preferred provider

of quality financial services in our
country with the profitability and
responsibility and to be best place
to work

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Our Core Values
CUSTOMER FOCUS
We treat each of our customer equality & as the most important
person while we interact with him/her. We must ensure that we
do everything to meet and exceed the customers expectations
with perfect to times, accuracy & quality services.
EMPLOYEE RESPECT & DIGNITY

We treat each of our employees with fairness, which includes
giving constructive feedback for their development. We
celebrate diversity and seek suggestions from all employees for
improvement. We ensure that responsibility & fairness in all our
decision-making.
TEAM BASED APPROACH

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We work towards achievement of our vision & mission as a

combines group. We encourage inter & intra-
departmental communications. We treat our colleagues as
our internal customers & ensure that the requirements of
internal customer focus are always met.
QUEST FOR QUALITY

We ensure that each moment of our time is spent on value adding
activity. We always seek ways for exceeding expectations of
customers & colleagues. We also ensure that we do things right,
first time every time.
GOOD CORPORATE CITIZENSHIP

We ensure that we contribute our due share to the Govt. we
realize that we have a responsibility to the society in which we
operate & we seek ways of playing a positive role for the
betterment of the community at large.

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Management Committee

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Board of Directors
Mian Mohammad Mansha Chairman
S.M. Muneer Vice Chairman
Mohammad Aftab Manzoor President & Chief Executive
Tariq Rafi Director

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Sheikh Mukhtar Ahmed Director
Mohammad Arshad Director
Shahzad Saleem Director
Mian Umer Mansha Director
Sarmad Amin Director

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Audit Committee
Mian Mohammad Mansha Chairman
Shaikh Mukhtar Ahmed Member
Shahzad Saleem Member
Chief Financial Officer

Ali Amin
Company Secretary
Tameez-ul-haque
Auditor
A.F.Ferguson & co
Chartered accountants
M.Yousuf Adil Saleem & co
Chartered accountants
Legal Advisor

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Chartered accountants mandiwalla & zafar

Advocates & legal consultants
Shariah Advisor
Dr. Muhammad Zubair Usmani
Registered Office
MCB building, F-6/G-6
Jinnah Avenue, Islamabad
Principle Office
Adamjee house 2nd floor
I.I chudrigar road Karachi
Registrar and Share Registration Office
THK associates (pvt) Ltd.

Shares department, ground floor sheikh sultan trust building no
2, Beaumont road Karachi

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ORGANIZATIONAL HIERARCHY OF MCB
PRESIDENT
SENIOR EXECUTIVE
VICE PRESIDENT
EXECUTIVE VICE
PRESIDENT
SENIOR VICE
PRESIDENT
VICE PRESIDENT
ASSISTANT VICE
PRESIDENT
OFFICERS GRADE
I II III
ASSISTANTS

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CASHIER
PEONS
MANAGEMENT LEVEL
The organization chart within a department and in different

offices is as follows:
Divisional Heads ………..…………………… Head Office

Regional Head (EVP) ………..…………………… Regional Office
Zonal Head (VP) ………..…………………… Zonal Office
Branch Manager ………..…………………… Branch
(VP, AVP, GRADE 1, 2, 3)

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ORGANIZATIONAL SETUP OF MCB
HEAD QUARTER KARACHI
PROVINCIAL HEAD
QUARTERS
PUNJAB LAHORE
SINDH KARACHI
BALOCHISTAN PESHAWAR
NWFP & AZAD

QUETTA
KASHMIR
CIRCLE OFFICES
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BRANCH OFFICES
ORGANIZATIONAL STRUCTURE OF MCB
As MCB is a banking company listed in stock exchange therefore

it follows all the legalities which are imposed by concerned
statutes Mr. Muhammad Mansha is chairman & chief executive
of the company with a team of 10 directors and 1 vice chairman to
help in the business control and strategy making for the company.
Operational Management of the bank is being handled by a team

of 10 professionals. This team is also headed by Mr. Muhammad
Mansha. The different operational departments are Consumer
Banking & IT div; Financial & Inter branch div; Banking operations
div; HR & Legal div; financial control & Audit div; Credit
management div; Commercial Banking div; Corporate Banking div;
Treasury management & FX Group and lastly Special Assets
Management (SAM) Group.

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For effective handling of branches, it has been categorized into

three segments with different people handling each category.
These categories are:
a) Corporate Banking
b) Commercial Banking
c) Consumer Banking
Corporate Banking
These are branches which have an exposure of over Rs. 100

million. Usually includes multinational & public sector companies.
Commercial Banking
The branches which has a credit exposure of less than Rs. 100
million but having a credit portfolio of more than Rs. 20 million
(excluding staff loans)
Usually branches in large markets and commercial areas come
under this category.
Consumer Banking
These are the branches which have exposure up to Rs. 20 million

and these include all the branches which are neither corporate
nor commercial branches.

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Recently the organizational structure was re-designed as follows:

Province wise branches
Corporate Consumer Commercial

20 branches 637 branches 383 branches
MARKETING MIX OF MCB BANK LIMITED
Marketing is the task of creating, promoting and delivering goods and

services to consumers and businesses. Organizations identify and
profile distinct group of buyers who might prefer or require varying
products and marketing mixes. The customer seeks for value and
satisfaction. The organizations can increase the value of the customer
offering in several ways e.g. raising benefits, reducing costs etc.
marketing mix is a set of marketing tools that the firm uses to pursue
its marketing objectives in the target market. These marketing tools
are known as 4 p’s of marketing. These four marketing tools are
viewed as 4c’s by the consumers.
4 P’s 4 C’s
Product/ Service Customer Solution
Price Customer Cost
Place Convenience
Promotion Communication

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To identify the customer needs and fulfilling hem is the basic objective
of an organization. Marketing is not just satisfying your customers, you
have to delight them and this can be done by acting upon this phrase.
“Under Promise and Over Deliver”
MCB Bank provides a winning combination of products and services to
its prime customers. It is one of the country’s leading commercial
banks, which ensures complete security, and reliability in all-financial
transactions.
PRODUCT MIX & PRICES OF MCB BANK
1. MCB Rupee Traveler Cheque
MCB Rupee Travelers Cheques are as good as

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

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2. Mahnama Khushali Scheme
A 5- year fixed Deposit Scheme, targeted to persons with small

savings who would desire a regular monthly return on their
investment.
Salient Features
• Minimum amount of investment shall be Rs.0.010m and the
maximum amount of investment would be Rs. 1.000m.
• Khushali Certificates can be purchased by individuals (singly

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

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• 8% rate of return per annum.

• Returns calculated on daily.
• Average balance and paid half yearly.
• Introduced first time in Pakistan.
• The facility of helping account holders pays utility bills
(electricity, telephone and gas) through their account. No
queues. No delays.
4. Prime Currency Account

Scheme
Launched to attract deposits in foreign

currencies. US Dollars, Pound Sterling, Euro and Japanese Yen.
Salient Features
• Owing foreign currency account under the Prime Currency

Scheme allows you to earn attractive rates of interest in
foreign currency.
• You have a choice between opening this account in your
personal name and opening it under joint names.
• Whether you are a resident or a non-resident Pakistan, MCB
Prime Currency Scheme invites all to operate a foreign
currency account.

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• Foreign nationals and foreign companies can also open a

foreign currency account under the Prime Currency Scheme.
• Your foreign currency account can be opened in four global
currencies: The United States Dollar, the Pound Sterling,
the Japanese Yen and the Euro.
• Travellers Cheques and Foreign Currency Notes can also be
issued to holders of persona! and Joint accounts.
• Rupee Loan facility will also available against this account.
• You can draw any amount of foreign exchange from your
foreign currency account and transfer or remit the amount
freely to any part of the world without any restrictions.
• The restrictions imposed by the State of Pakistan for the

opening of foreign currency accounts in case of passport;
Work-permit and resident Visa have been withdrawn. Your
account will be restriction free.
• The Prime Currency Scheme is exempt from al! forms of
taxes including Income Tax, Wealth Tax and Zakat
deductions.
• MCB Prime Currency Scheme is a world in itself.
5. Hajj Mubarak Scheme
A saving scheme, of 2/3 years duration, for the convenience of

persons, with a limited income, who desire to perform Hajj was
introduced.

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Under the 2 years scheme, a monthly deposit of Rs.1800 is

required, whereas under the 3 years scheme, the required
monthly deposit is only Rs.1200
6. Capital Growth Certificate Scheme
For long term depositors under which the amount deposited

almost doubles at the end of 5 years. For the scheme, the
minimum amount of deposits is Rs. 10000 while there is no
maximum limit. In case of premature encashment of the
certificate, the depositor will profit at the same rates as that of
PL Saving Account.
7. Fund Management Scheme
This scheme is offered to corporate and customers and is aimed

at providing better rate of return up to 15% per annum. One of
the objectives of the scheme is to develop secondary market for
Government Securities.
8. Consultancy Services
In the process of privatization of public sector units, prospective

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

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9. Self Supporting Scheme
For the benefits of genuine worker/borrowers who are poor and

needy and for small entrepreneur the bank as evolved a self
supporting scheme: maximum amount of loan Rs.25000 and
minimum Rs.5000 per individual. Loan will be totally free of mark-
up.
10. Fax Press
This product was first of its kind introduced
by using modem technology of The Fax
Machine. It facilitates speedy transfer of
funds within Pakistan. The service
guarantees transfer of from one city to another, within an hour.
11. Night Banking Service
For the convenience of the account holder, service has,

especially, been introduced at busy commercial centers. Traders
and other clients can now make deposit, with case, at such
centers up to 8.00PM.
12. Utility Bill Collection
With the aim of extending this service to wider range of

customers, the number of MCB branches collecting Utility Bills
more than 900.

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13. MCB Mobile Banking
At the forefront of technological excellence, MCB proudly

introduces MCB MOBILE BANKING*. The convenience of
accessing account balance information and mini statements
whenever want or wherever may need them, with comfort and
peace of mind.
MCB Mobile Banking service is available to all MCB ATM
cardholders, 24 hours - 365 days.
MOBILE BANKING AT A GLANCE

MCB Mobile Banking gives easy and quick access to account(s) at a
time find convenient, including all holidays.
• WITH MCB MOBILE BANKING

· Check balance
· View the last 4 transactions of your MCB account(s).
• 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.
• BANKING AT FINGERTIPS
Dial in anytime to get information regarding balance and mini
statements.
14. MCB Islamic Banking Services

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Islamic banking services through exclusive units/branches

offering a range of liability and asset based Sharia compliant
products like Musharika, Murabaha, Ijara and Istasana.
15. MCB Car Cash
Car financing and leasing at competitive rates with flexible

options Car cash finances both semi-commercial and non-
commercial vehicles for personal and business use.
16. MCB Locker

The best protection for your valuables. Lockers of different
capacities are available nationwide
17. MCB Master Card
THE FUTURE OF MONEY
Since the beginning of time, people have

tried to find more convenient ways to pay, from gold to paper
money and checks. Today, money is moving away from distinct
hard currencies and towards universal payment products that
transcend national borders, time zones, and, with the Internet,
even physical space.
Plastic or "virtual" money, credit, debit, and electronic cash

products, inevitably will displace cash and checks as the money of
the future.

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MasterCard 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 loss.
• Welcomed at over 3, 000 outlets in Pakistan.
• Provides up-to 45 days Free Credit.
• Joining and Annual Fees to suit you.
• 24 Hour Customer Services- Call 111-700-700 and you can

get information from our customer services representatives
on new card application or have your queries resolved anytime

of the day.
• 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.
Our Consumer Banking provides customers with innovative saving

schemes, products and services. Our ATM network is the largest
in Pakistan and our Pak Rupee Travelers Cheques are market
leaders. We were the first to introduce the photo card with the
introduction of the MasterCard.

41
Our Corporate Banking ensures assistance from a dedicated team

of professional financial advisors for underwriting, project
finance or corporate advisory services.
When it comes to banking practices, you can depend on us. We’ve

been around for over fifty years.
18. MCB Smart Card
MCB now brings you MCB SmartCard -a

secure and convenient instrument of payment
with unmatched functionalities. It provides
24-hour direct access to your bank account
The convenience and flexibility of MCB SmartCard will help live a

smarter life. It not only helps you manage your expenses, but also
avoids undue interest on your day to day credit card transactions.
Your balance is always within your reach and you spend

accordingly.
MCB is the only bank to introduce a debit card that gives the
option to choose from domestic and international card for local
and global usage respectively
19. Remit Express
Fastest to Pakistan. Anywhere in

Pakistan.

42
The fastest way of getting your money across to Pakistan. Remit

Express offers low cost remittance from U.A.E. and Saudi Arabia.
Your relatives, friends or business associates 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.
20. Easy Personal Loan

Helping You Do More
MCB Easy Personal Loan provides you with the financial advantage
to do things you've always wanted to but never had the sufficient
funds for. Take that much-needed holiday. Buy a car. Refurnish
your house. Purchase a new TV. Finance a better education for
your children.
Salient Features
• MCB will lend you any amount, from Rs 30,000 to Rs

490,000, depending upon your net monthly income
• You can choose tenure of 1 to 3 years for the repayment of
the loan
• Bank to Bank Balance transfer
• Credit Card balance transfer
• Loan Protector Shield- insurance coverage of balance loan
amount in case of death or permanent and total disability
• Availability of early repayment option
• Repayment Arrangements

43
• Repayment of principal and mark-up is monthly and can

repaid using either one of the following modes:
• Direct Salary Transfers
• Payroll Deduction
Eligibility Criteria
• Minimum net monthly income Rs 10,000
• 25 to 55 years of age
• Pakistani national
• At least 2 years of employment with current employer.
• Processing fee of 1% of the principal loan amount to be
charged at the time of loan disbursement.
21. MCB Pyara Ghar
MCB gives dream home at the lowest and

best possible mark-up rates. You can
choose either one of our two mark-up rate
options- fixed or variable.
Early repayment option tailor-made to allow making partial
prepayments at dates that suit.
Who Can Apply

Anyone who fulfills the following criteria is eligible to apply:
• Pakistani national residing in the city and area where the
product is launched.

44
• 25 years old or above when you apply and under 60 at the

time of maturity of the applied financing period.
• Salaried person, self-employed professional or a
businessman with a verifiable monthly income stream.
• Net take -Home income not less than Rs. 25,000 per month.
• Have 5 years or more of business or professional
experience.
• Employed with the present employer for 2 years with a total
employment history of 5 years.
• Home Purchase Home Renovation Home Construction
• Tenure 3 years to 15 years 2 years to 5 years 3 years to 15
years
22. MCB Virtual
MCB Virtual provides the continence of banking

on internet. Whether at office or home or
traveling. Log on at www.mcb.com.pk and enjoy 24 hours access of
all your accounts for the largest array of service.
23. MCB Business Sarmaya

45
MCB Business Sarmaya is a running finance against your

residential property. It offers running finance up to 20 millions
with low markup.
24. MCB Car 4 U
MCB car 4 u auto finance is a power move that

gets you not only a car of your own choice but leads you best in
life. It is affordable with competitive markup, flexible
conditioning and easy processing and above all no hidden cost.
PLACING STRATEGIES OF MCB BANK
The location of the bank plays
a vital role in making its
operations profitable. If the
bank is located in some

46
business center then it will be very easy for it to attract business
people as its customers. Therefore MCB has most of its branches
at places where it can reach its targets customer easily. The
branch network of MCB is given as follows:
Punjab 632
Sindh 232
NWFP 123
Blochistan 34
Azad Kashmir 19
Domestic 1040
Overseas 4
Total 1045
PROMOTION STRATEGIES OF MCB BANK

47
MCB Bank is actively participating in promotion of its

products and services through advertisement and other
promotional schemes.
Initially, the bank focused on the upper class customer’s
only and offered products for a limited class of people. But
now the strategy has been changed and the bank is now
targeting the middle market also. The products offered are
of diverse nature to cater the needs of maximum number of
people.
Customer Oriented Attitude
MCB Bank values its customers. Customers’ complaints are

encouraged because it gives an opportunity to know the
needs of the customer and build more confidence in them.
Most of the promotional efforts are done through
 Direct marketing
 Public relations
MCB bank sometimes gets suggestions and

recommendations from its good customers.
Branch layout is being designed in such a way that more and

more customers are attracted. Some of the branches of MCB
Bank have a very good entrance and outlook but many still
need to be improved.
FIELDS OF ACTIVITIES
48
The purpose of banks is to provide some services to the general

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

2) Accepting various types of deposits
3) Accepting various types of deposits
4) Granting loans & advances
5) Undertaking of agency services and also general utility
functions, few of those are as under
• Collecting cheques and bill of exchange for the

customers.
• Collecting interest due, dividend, pensions and other sum
due to customers.
• Transfer of money from place to place.
• Acting an executor, trustee or attorney for the
customers. ‘Providing safe custody and facilities to keep
jewellery, documents or securities.
• Issuing of travelers cheques and letters of credit to
give credit facilities to travel.
• Accepting bills of exchange on behalf of customers.

• Purchasing shares for the customers.
• Undertaking foreign exchange business.

49
• Furnishing trade information and tendering advice to

customers.
For proper functioning of branches and the over all bank has been
divided in different departments. These departments handle
different jobs so that division of work is there for improvement
of functions and also it is easy to control the situation. The
general division in a branch is as follows:
1. Cash department
2. Deposit department
3. Advances & credit department
4. Remittance department
5. Foreign exchange department
6. Technology department (new addition in order to cop with
the growing needs of day to day technology
requirements)
CASH DEPARTMENT

50
The following books are maintained in the Cash Department:

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

51
DEPOSIT DEPARTMENT
Bank deals in money and they are merely mobilizing funds within
the economy. They borrow from one person and lend to another,
the difference between the rate of borrowing lending forms
their spread or gross profit. Therefore we can rightly state that
deposits are the blood of the bank which causes the body of an
institution to get to work. These deposits are liability of the bank
so from point of view of bank we can refer to them as liabilities.
The total deposits of MCB are growing since its inauguration but
after privatization there is a sharp incline in over all deposits of
the bank. The increase in deposits is also a cause of increase on
total number of accounts; bank has progressed in both aspects.
TYPES OF DEPOSITS
Deposits can be segregated on two bases, one is the duration in
which there funds are expected to be with the bank and second is
the cost of getting these funds. So divide deposits in two classes
according to duration of deposits i.e.
1) Time deposits / liabilities

2) Demand deposits / liabilities
And on the basis of the cost to acquire these funds, a deposit
can be classified as any one of following four, High Cost Medium
Cost, Low Cost No Cost.

52
Banks has different kinds of deposit schemes in order to induce

deposits. These schemes are a mixture of the above mentioned
two types of deposits with an addition of different services &
requirements such as minimum balance' requirement, mode of
transaction, basis for calculation of profit, deductions, additional
benefits, eligibility for different groups.
In the similar fashion, MCB has a large variety of deposit
schemes and some of them are as follows:
CURRENT ACCOUNT
In this type of accounts the client is allowed to deposit or
withdraw money as and when he likes. He may, thus, deposits or
withdraws money several times in a day if he likes. There is also
no restriction of amount to be deposited or withdrawn. However,
there is requirement of minimum balance maintenance of Rs.
1000/-. Usually this type of account is opened by the
businessmen. No profit is paid by the bank and no service charges
are deducted by the bank on current deposits account. These
types of deposits are also exempt from compulsory deduction of
Zakat.
PLS ACCOUNT
This type of account is for those persons who want to make small
savings'. This type of account is opened with a minimum deposit
of Rs. 1000/-. Under this scheme deposits can be made only up to
a-costing amount and withdrawals are allowed twice a week or 8
times a month. If a big amount is required a seven days notice is
required before the withdrawal. The profit is paid on these
accounts on the minimum balance during a month for the whole of

53
that month. Zakat & other withholding taxes are deducted as per
rules of the government.
KHUSHALI BACHAT ACCOUNT

This is an advance form of PLS saving a/c, in this type of account.
The minimum balance requirement for this type is Rs. 2500/-.
There is also restriction on the number of withdrawals as well,
i.e. up to 4 times in a calendar month. For maintaining this extra
balance the customer gets the benefits of profit calculation on
daily product basis and also free service of standing instructions
of paying utility bills and HBFC installments. All other rules of
saving account are applicable.
PLS 365 GOLD

This is a special type of saving account in which customer
maintains a minimum balance of Rs. 300,000- and in turn he gets
the benefits of daily profit calculations and also there is no
restriction on the maximum number of withdrawals as was there
in the case of KBA. There is also another advantage of this
scheme that if balance on a particular day falls below the
minimum balance then only the product of that day is ignored
whereas in KBA, if balance falls below the minimum limit then all
the products for that month are ignored on in other words no
profit is paid for that month.
Khaunm Bachat Scheme

This is a type of term deposit, in this type of deposit an account
is deposited and monthly payments of Rs. 1000/- are made by the
account holder in this account for a minimum of 10 years. After

54
the expiry of term, he receives his funds along with profit for
the tenor. The distinctive feature of this product is that profit is
calculated on monthly basis and charged to account on end of
each half /ear. Then profit is also calculated on that amount of
profit which is credited to the customer's account. So we can say
that in this type of account there is a concept of accumulated
profits on profit. This ends in getting a heavy return for the
depositor at the end of tenor for his small savings. This product
was actually introduced to promote saving habits in the people.
Zakat and withholding taxes are deducted as per rules only at the
time of maturity while making payment to the customer.
Term Deposits Receipts

This is a type of term deposit in which a receipt is issued for
varying tenors ranging from 1 month to 5 years or more. These
are in the form of receipts and profit on these receipts is paid
biannually. These receipts are encashable after expiry of the
period for which they were issued. Different profit rates are
applied to different type of TDRs.
Under this deposit scheme, a deposit is received from the
depositor under the condition that he will intimate the bank
before a certain period in case of withdrawals.

55
FUNCTIONS OF DEPOSIT DEPARTMENT

This was a brief review of different types of deposit schemes.
The Deposit Department handles the account opening, profit
payment and accounting of all types of deposit schemes.
Account Opening
Account opening is an agreement in which customer offers his
funds and bank accepts these funds, therefore the nature of
relation between a banker and customer is of a contractual one
and all the conditions applicable to this contract act are also
applicable.
Profit payment & calculation
Profit payment & calculation is done in accordance with the rules
of each type of deposit scheme-by the deposit department. The
products for each deposit scheme are calculated separately and
added till the end of 6 month period. Then the sum total of these
products is multiplied with the respective profit rates which are
issued by the Head Office at the end of each half yearly closing.
The profit provisions for each type of deposits are also
calculated on monthly basis by the same department in order to
calculate the net profit or loss position of the branch.
Accounting Entries
Accounting entries are also made in the respective books of
account by this department. However, in small and medium size
branches, the accountant performs the book keeping duties for
all kinds of ledgers.

56
CLEARING DEPARTMENT
Every banker acts both as a paying as well as a collecting banker,

It is however an important function of crossed cheques. A large
part of this work is carried out through the bankers clearing
house.
A clearing house is a place where representative of all banks of
the city get together and settle the receipts and payment of
cheques drawn on each other. As the collecting banker runs
certain risks in receipt of their ownership the law has provided
certain protections to the banks.
The Negotiable Instrument Act, 1881, lays down hat drawer or
holder of a cheque or draft may cross the instrument generally or
specially. It further lies down that a crossed cheque can only be
paid to a banker, who collects it for a customer in good faith and
without negligence.
Types of Cheques
• Transfer cheques: are those cheques, which are
collected and paid by the same branch of bank.
• Transfer delivery cheques: are those cheques, which
are collected and paid by two different branches of
the same bank situated in the same city.
• Clearing cheques: are those cheques, which are drawn
on the branches of some other bank of the same city

57
or of the same area, which is covered by a particular

clearing house.
• Collection cheques: are those cheques, which are
drawn on the branches of either the same bank or of
another bank, but those branches, are not in the same
city or they are not the members of clearing house.
Functions of Clearing Department
• To accept Transfer, Transfer delivery, clearing and

collection cheques from the customers of the branch and to
arrange for their collection.
• To arrange the payment of cheques drawn on the branch and
given for collection to any other branch on MCB or any
other members or sub member of the local clearing house.
• To collect amount of cheques drawn on members, sub-
member of local clearing house, sent for collection by MCB
Branches, not represented at the local clearing house
• Receiving and scrutinizing the cheques and other deposit
instruments, and the pay-in-slip at the counter.
• Fixing the stamps.
• Scrutiny and receipt by the authorized officer.
• Returning the counter file to the depositor.
• Certificate and confirmation by the officer in charge of the
department. ,
• Separating the cheque into transfer, transfer delivery, and
clearing cheques.

58
CLEARING PROCESS (FLOW CHART)
Cheque with slip given Slip is asked & filled
Cheque along with slip checked, signed &

received by officer
Entries in daybooks are made
Entries checked & verified by another

officer after banking hours by officer
Cheques collected at the day end by Main

Branch’s Officials
Cheques are sent to respective banks next

day after posting in computer by Main
Branch
The same day not honored cheques are

returned to Main Branch
The day after tomorrow the banks are

informed about dishonored cheques
Provisional entries for returned cheques are

debited again in both computer & daybooks
Party is informed about returned cheques

through Phone or personal contact
Cheques are mailed through TCS in case of

no personal contact the same day
(If there is any availability)

59
ADVANCES DEPARTMENT
Advances are the most important source of earning for the

banks. MCB is also giving full attention towards this aspect and it
is also obvious from the growing portfolio of advances and from
very low delinquency rate. The credit portfolio of this institution
is in a very much better shape than other financial institutions of
Pakistan and the credit goes to the management and the staff
who are concerned about the quantity and quality as well.
• Loans
• Cash Credits
• Overdraft
LOANS
Loans are monetary assistance by a financial institution to a

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

60
LOAN AGAINST GOLD

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

In case of advancing such types of loans, the following
precautions are kept in the mind:
• Stock pledged must be readily saleable

• Products should be readily saleable
• Advance should be within the borrows means

61
REQUIREMENTS OF LOAN
For granting loan to any party or individual, the bank checks following
particulars of the client:
 Credibility
 Feasibility Report
By Credibility, bank Judges the credibility of the client by his
past bank record, CBI report etc. it is very important in making
decision about giving him loan.
Feasibility report is on the running or proposed business of the
client. The report enables the bank to judge the likely return of
the business.
CASH CREDIT
Such cash account is opened in the name of the customer who
borrows from the bank. Customer is granted a loan up to a certain
limit, sanctioned by the head office, from which he can draw
when he requires and interest is charged on the amount actually
utilized by the customer. In order to avoid the danger of idle
fund, the bank charges a certain rate of interest, even if the
customer does not withdraw any amount. The rate charged by
the bank on cash credit in 46 paisa per thousand on daily basis.
The credit is usually given against the securities of goods or
merchandize as follows:
ADVANCE AGAINST PLEDGE OF STOCKS

62
When cash is granted against the pledge of stock or product,

cash credit form is taken, from the certain products or stock,
but the actual pledge is created when the stock or finished

products are placed under the bank's lock or the document of
title is duly endorsed to the bank by the borrower.
HYPOTHECATION OF STOCKS
The difference between pledge and hypothecation is that under a
pledge the borrower's goods are placed in the bank's possession
under own lock, whereas, under a hypothecation, they remain in
the possession of the borrower or guarantor and are merely
charged to the bank under documents signed by them. Even
though the documents empower the bank to take possession of
the goods hypothecated, but it is possible that the borrower may
actually resist any attempt.
MORTGAGE OF PROPERTY
Title deeds of immovable property are accepted by the bank only
as collateral security or alternatively as unauthorized security.

63
REMITTANCE DEPARTMENT
Remittance department performs following functions:
• Mail Transfer (MT)
• Telegraphic Transfer (TT)
• Demand Drafts (DD)
MAIL TRANSFER (MT)
When a customer requests the bank to transfer his money from

one branch of bank to another branch of the same bank or from
one city to another city to the same bank or any other bank.
Customer fills the form given by bank. If the customer has an
account with that amount as mentioned in the application form
then concerned officer will undertake the following procedure to
make the mail transfer complete.
1. Branch Mail transfer form
2. Receiving Branch Register copy
3. Issuing branch register Copy
4. beneficiary advice
5. advice to customer

64
In case where the customer is not account holder of the bank

then the customer will have to deposit the amount which he wants
to transfer under Mail. Then the above said procedure will be
done.
TELEGRAPHIC TRANSFER (TT)
This type of transfer is simple. After filling the application form

the concerning officer shall fill the telegraphic transfer form.
Then it is sent to the required bank which on receiving it
immediately makes the payment to the customer and afterwards
the voucher are sent to that bank by ordinary mail.
DEMAND DRAFT (DD)
Demand draft is just like cheques and issued when the customer
wants to take cash with him personally. The idea behind is to
avoid the risk and burden of currency notes in huge quantity.
Demand draft can easily be handled whatever amount it has and
the money can easily be taken from the bank when it is
presented. In fact, the bank persuades the customer to transfer
money by drafts and avoid the risk of frauds involves in MT and
T.T. Draft is only issued when the bank knows customer and bank
has the confidence in him
In case of transfer of money by drafts, the customer has to fill
an application form. Then the concerned officer fills the following
forms:
1. Customer’s advice
2. Customer’s debit form
3. Register copy
4. Cover Advice

65
FOREIGN DEMAND DRAFT
Foreign Demand Draft is just like demand draft. The only

difference is that a bank issues FDD to the bank of another
country. It requires foreign exchange and it involves seven forms,
which are to be filled.
Bank Charges (July-December 2006)
S. # Item Rate
1 Telegram on TT Actual-MinimumRs.75
2 Postage on MT Actual-MinimumRs.50
3 Cancellation of DD/Pay order Rs.50 far Account holder
Rs.100 far non Account
holder
4 Issuance of Cheque Book Rs. 3 per leaf
5 Account closing Cost Rs.250 for LCY
6 Issuance of duplicate Draft Rs.200 far Account holder
holder
7 Issuance of duplicate FDD Rs.300
8 Issuance of duplicate Pay order Rs.100 far Account holder
holder
9 Issuance of RTC Rs.5 per piece
10 Stop payment charges Rs.150

66
11 Issuance of fresh statement Rs.25

12 Issuance of duplicate statement Rs 50
TECHNOLOGY DEPARTMENT
Technological advancements are also affecting the banking

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

67
ATM stands for Automatic Teller Machine. This machine is used

to transact in one's account without intervention of humans.
These machines are basically used for taking cash, confirming
balances and requesting statements / cheque books.
MCB has the largest ATM network in the country at the moment
with almost one ATM at each online branch and also ATM
terminals at International Airports. This network covers more
than the 27 cities of Pakistan including the provincial capitals and
large commercial cities of the country.
ATMs are operated through a card issued to the valued
customers and by application of Personal Identification Number
(PIN number). A person can withdraw from any machine across
Pakistan with having an account in only one branch of MCB. This
was only possible with the help of online system. In this system
all the machines are linked to central banking host at IRM division
Karachi through either satellite or telephone controller. This
system identifies the card holder and his PIN Number.
Now MCB has also entered into a contract with Cirrus which is a
subsidiary of MasterCard. This contract will enable an ATM card
holder to use his account even when he is out of country at all the
ATMs where Cirrus logo is displayed.
Green Cards are ordinary cards with a maximum
withdrawal facility of Rs. 10,000/- in a day. The annual fee for
this card is Rs. 300/- only.
Gold Cards are special cars with maximum withdrawal limit
of Rs. 25000/- in a day. These cards are issued to the persons
having more than Rs. 500000/- as their average balance.

68
International Cards are issued in collaboration with Cirrus

and are useable all over the world with maximum withdrawal
facility according to the standards of Cirrus.
INFORMATION ABOUT MY BRANCH
I did my internship in MCB Bank Limited Muridke Branch. Some

important information about my branch which I observed is as
follows:
MANAGEMENT OF THE BRANCH
Branch Manager Ch. Sabir Hussain
Operational Manager Muhammad Munir
Accountant Fozan ul Qamer
Credit Manager Farruk Afrooz
Forex Manager Majid Iqbal
Chief Cashier Khursheed Ahmed

69
Cashier Muhammad Usman
Billing Cashier Miss Farwa Asif
CSO Miss Sumera
OTHER GENERAL INFORMATION OF THE

BRANCH
Deposits
The total deposits of this about to 322.734 million. In deposit

there is increasing trend.

70
Deposits
25
20
Amount in Million
15
10
0
2003 2004 2005
Years

71
Profit
Total remittance of this branch is 2157.319 million in 2005.there

is also incrasing trend in profit from 2003 to 2005 because of
higher mark up rate charged on the finances.
No. of vouchers
The vouchers which are transacted in this branch in 2005 are as

follows:
CASH TRANFER
Month DEBIT CREDIT DEBIT CREDIT Total

January 2521 2303 2140 1967 8911
February 2209 2268 1835 1725 8037
March 2753 2508 2141 2395 9797
April 3079 2569 1982 2040 9670
May 3433 2726 1944 2018 10121
June 2813 2578 1962 1972 9325
July 3555 2229 2021 2123 9928
August 3784 2123 1928 2030 9865
September 4134 2114 2078 2135 10461
October 4923 1980 2337 2350 11590
November 6427 1968 2871 2720 13986
December 2808 2312 2992 2925 14037

72
Financing & Advances
Mainly, the short term financing such as cash finance, running

finance, Demand finance, ERF II, FAFB, FBP are being dealt here.
Number of accounts
Accounts in this branch of MCB are as follows:
Current account
Total numbers of current accounts are 1236.
PLS account
Total numbers of profit and loss accounts are 3950.
Khushali bachat account:

These are about to 301 accounts
Basic Banking Account (Newly Introduced by SBP for salaried

person)
There are about to 19 accounts.
Foreign Currency Accounts:

MCB 365 Gold Account


73
WORK DONE BY ME
During my internship in the MCB Limited, I really enjoyed to work
with the staff of Branch, G.T Road, Muridke from 17thJuly to 2nd
September, 2006 and have a wish to be employee of MCB. It was
almost impossible to work in all the departments within that
limited time. But on my request, the staff of the branch provided
me the opportunity to work in the different departments for the
sake of practical knowledge. I am really very thankful to branch
manager Sir Ch. Sabir sb that provides me a learning environment
in the branch.
During my internship training in the MCB as I early mentioned
that I have worked in different departments & seats and learnt
the followings.

74
ACCOUNT OPENING DEPARTMENT
Account opening and closing is the function of accounts

departments. Bank’s customers may be individuals (Single or
Joint), firms (partnership/proprietorship), Autonomous
F
corporations, Limited Companies, Charitable Institutions,
I
Associations Educational Institutions or Local Bodies.
R
S
T
BASICS TO OPEN AN ACCOUNT
During the span of mine internship in MCB, I learned and

T
observed a lot of about the opening of an account. Basically
W
I think that the opening of an account is the establishment
of a contractual relationship between the banker and the
O
customer. By opening an account at a bank a person
becomes a ‘customer’ of a bank. Further I am going to
express the basic requirements and steps involved in the
opening of an account.
W
E
E
K
S
75
INTRODUCTION AND PRELIMINARY INVESTIGATION
Before opening an account MCB as like the other banks in

Pakistan ascertain whether or not the person who is going to open
the account is a desirable customer or not. Then MCB determine
the prospective customer’s integrity, respectability, occupation
and the nature of business by the introductory references given
at the time of account opening. Negligence in this informal
preliminary investigation may result in serious consequences not
only for the banker concerned directly but also for other bankers
and the general public who may be affected indirectly.
In order to further strengthen and streamline this process, the
Federal Ombudsman of Pakistan, vide his ruling on complaint No.
II/31/5186, has directed the banks to retain with the account
opening form a Photostat copy each of the National Identity
Cards of the person desiring to open an account as well as that of
the introducer. As per these directions, the concerned Branch
Managers are required to obtain the original National Identity
Cards along with their Photostat copies and then return the
original after attesting the authenticity of the retained copy.
Preliminary investigation is necessary because of the following
reasons:
Avoid Frauds: In this regard I learned that if a banker does not
make the necessary inquiries mentioned above he may enable
dishonest persons to possess cheque books for fraudulent
purposes. If any such person happens to be an undercharged

76
bankrupt, the banker might be placed in an awkward position for

having allowed such a person to open and open a bank account.
Safeguard against unintended overdrafts: Sometimes due to a

mistake an account may be given an overdraft, For instance, the
ledger keeper, misreading the balance of an account honors a
cheque for an amount larger than the balance. Similarly a credit
entry belonging to a customer may be made by mistake in another
customer’s account. In such situations the excess amount
withdrawn by the customer can only be realized if the customer
is a respectable person.
Inquiries about clients: Being a banker I think MCB has a

business obligation to respond to inquiries from other banks etc.
about his customer’s financial position. Though the banker gives
only a general ideal about the financial standing of his customer,
it should nevertheless have the necessary information available
with him.
Specimen Signature
When an account is opened with MCB customer provides to the
bank a specimen of the form of signature which would appear on
all his cheques to express his authority for the payment of
cheques drawn on his banker. This specimen is taken generally on
a card specially designed for this purpose, and rule for the
customers, full name, and account number are entered on it.
If the bank has reasons to doubt the genuineness of a signature,
he should either get it confirmed for his satisfaction or return
the cheque with the remark ‘Signature differs’. If the signature

77
of the customer is forged the banker cannot escape his liability

because he has actually acted on his customer’s mandate.
HOW TO OPEN AN ACCOUNT (GENERAL)
Before opening an account in MCB I observed that the following

points must be considered in this regard.
• Another account holder of the bank should properly
introduce the new customer.
• The account holder should sign the account opening form in
the presence of bank officer and the signature is duly
verified.
• A copy of identity Card is required by Bank.
• Against submission of the Bank’s prescribed application
form, duly introduced in the manner provided and on
supplying such document, as may be required and account
may be opened. The Bank reserves to itself the right to
refuse to open and account without assigning any reason.
• Each account shall be allotted a distinct number that is to
be quoted in all correspondence with the bank relation to
the account.
• Minimum amount for opening and continued maintenance of
various types of accounts is as follows:
Rs.
Saving 500

78
Current 500
Term Deposit 1000
The bank reserves the right to change the above mentioned

minimum balance requirement at any time without any notice.
PROCEDURE TO OPEN AN ACCOUNT
According to my practice in MCB, when a customer wants to open

an account, the bank officer gives him an application form. All
information, which is necessary to be known by the bank, are
requirements of the application form. Form also requires the
essential documents to be attached by the customer.
Basically following information is required to open an account with
MCB.
• Title of Account
• Full Name of Applicant
• Occupation
• Address
• Telephone No.
• Currency of account
• Nature of Business
• Introducer’s Name, Address & Signatures
• Special instruction regarding the account
• Initial Amount of the Deposit

79
• Signature of the applicant
DOCUMENTS TO BE ATTACHED
Further I learned that if you wanted to open an account with

MCB then you should attach the following documents with your
application form which are different for different categories.
SOLE PROPRIETOR’S ACCOUNT
In order to open an account with MCB Sole Proprietors have to

submit their business registration certificate number.
PRIVATE / JOINT ACCOUTS
For individual or private or joint accounts National Identity Card

is required.
JOINT STOCK COMPANY
Before an account of a Public Limited Company is opened MCB

must ask the person authorized to do so to submit the certified
copies or the following documents
• Certified true copy of the Memorandum and Articles of
Association of the company.
• Certified true copy of the resolution of the board of
directors / managing committee / governing body regarding
conduct of the account.

80
• Certified list containing names and signatures of the

directors / office bearers.
• Certified true copy of the certificate of incorporation or

registration.
• Certified true copy of the certificate of commencement of
business (in case of public limited companies).
• Balance Sheet
• I.D. Card copy of each director
• Original is also enclosed for inspection and return
• List of persons authorized to operate the account.
• Power of Attorney in favor of the person opening account.
PARTNERSHIP FIRM ACCOUNT

Information which is required to be submitted to MCB by a
partnership firm in this case is as follows:
• Full Names
• Address
• Specimen of signatures of the partners
• Certified true copy of partnership deed
• Registration No. if the Partnership is registered
SOCIETIES / CLUBS AND ASSOCIATIONS ACCOUNT

MCB is authorized to open the accounts of the societies/clubs
and associations, These are non-trading organizations, formed for
the promotion of culture, science, education, recreational
activities and charitable purposes etc. some of these institution

81
are registered under the Societies Registration Act, 1866, and

are issued a certificate of registration after they have been
found fit for registration.
ISSUANCE OF CHEQUE BOOK

When a customer opens an account with the bank, he is provided
with cheque book for withdrawals from account. However, the
first cheque book is given to the customer only when all the
required documents are checked. A cheque book contains ten,
twenty five, fifty or hundred leaves. The cheque book also carries
a requisition slip for the issuance of the new cheque book. This
slip is duly filled and singed by the customer. The signature of
the customer is verified by the bank and new cheque book is
issued to the customer and serial numbers of the cheque are duly
entered in the book of the bank. Along with the signature, person
should also write his full name & address.
Usually only one cheque book is issued at a time, however big
concerns who need a number of cheque books at a time, may ask
the bank to stock as number of cheque books in their name and to
point their name on these cheque books.
Bank debits the client’s account for excise duty of Rs.2.50/- per
cheque and keeps the cheque book ready for the customer, as on
his advice.
The officer keeps and maintains the cheque book register Cheque
book inventory and cheque books issued are recorded in this
register. The account number for which the cheque book is issued
and the number of leaves are also recorded in this register when
the cheque book issued an entry is passed in the cheque book
issue register.
In case of loss of cheque book or requisition slip on cheque book

82
the customer has to fill the Form No. 216-B to obtain a new
cheque book.
UTILITY BILLS COLLECTION
I worked in the utility bills collection department as the MCB
collects utility bills on behalf of WAPDA, Sui Gas Companies, and

T
Pakistan Telecommunication Corporation Limited by putting the
H
stamp on the utility bills “Paid”, Date of payment, Signature of
I
the officer receiving the utility bills. After receiving utility bills
R
a list is made on the form which is called Bills scroll form. One
D
copy of the scroll is with the bank for evidence whereas the
original copy with the receipt of the bills is sent to the billing
W
department of the respective corporation. The bank charge
E
commission on the bills.
E
K

83
CASH MANAGEMENT
The most important department of MCB which deals in money

(receiving deposits at lower rates and lend them out at higher
F
rates of interest). This department also called as Chest
O
Department and manager of it is called Cash Manager or Chest
Manager. In those branches where this department is not
R
separately existed, the branch manager performs the duties of
the Chest Manager. T
H
The excess cash (More than its insured limit by the insurance
company) of the branches of the region is collected by the main
W
branch. The main branch is also bound to send its excess cash
E
(more than its insured limit) to the State Bank of Pakistan. No
branch can have cash its safe more than its insurance at any time
E
at the time of closing cash, if it is so the manager will be
K
responsible (not the insurance company) whether or not he
informed to the regional office (exception to the limit which is
insured for the day).
New Notes and Prize Bonds are also part and parcel of the Cash
Management. Keys of the Safe lockers are with the three

84
authorized persons each one of them is responsible for cash as at

the time of closing the cash the officers including Cash officer
presented and lock the safe after counting and scrutinize the
cash. The cash officer maintain its daily cash book with
specification of notes (Bonds are also recorded in the books in
relation with cash) and other vouchers, after being satisfied the
manager authenticates the books and vouchers regarding cash
with stamp and signature. at the end I would like to conclude that
the cash management is being done in the MCB very effectively.

85
ADVANCES DEPARTMENT
On my first day of Internship, Manager gives me some advice and

told me the ways to success. He told me that if some one wants
L
to get success in banking career then he must have the knowledge
A
of the one major department of the bank. I.e. Advances. So from
very first day I was interested to work in advances department
S
and at my request bank offer me opportunity to work in this
department last two weeks T
Bank adopts the following procedure in order to grant a loan. A
customer applies for a loan to the manager, who says him to give
T
details of his property. The details of the proposal and the
W
photocopies of the document to the title of property are sent to
the legal advisor of bank. The legal advisor gives his legal opinion
O
upon the documents. The branch manager, in the light of the
opinion received from the legal advisor, discusses the proposal
with the advancing manager whether to give or not the loan to the
W
applicant. If manager allows granting the loan all the documents
E
along with request letter are sent to regional office for approval.
In the regional office the proposal is analyzed and if the office is
E
satisfied a consent letter prepared which is signed by the
K
86 S
regional controller credit. This letter is sent to the branch

manager. After receiving it the manager finance reviews the
consent letter, and prepares a DAC (Disbursement Authorization
Certificate). DAC can be made only for people who have a bank
account.
The following documentation is made for loan.

• An application or request letter for loan by the customer
• Legal opinion of the legal advisor of the bank (for the title
deeds)
• Consent letter from the regional office
• Vetting Certificate (includes consent No., Facility whether
fund based or no-fund based, addresses etc.)
• Valuation of property any consultant or any panel of
consultants approved by State Bank of Pakistan
• Original title deed or sale deed
• Affidavit
• General power of attorney (made by advocate for the
person/owner taking loan for the company)
• Mortgage deed
• Mutation document made
• Verification of the property by the bank from the
competent authority
• Hypothecation of stock certificate (Running is to be given
against 75% margin of stock)
• IB-25R Letter of hypothecation (duly signed by the party)

87
• IB-12 , DP Note/Promissory Note (Bank prepared itself,

duly signed by the party, revenue stamps of Rs. 100 put on
it)
• IB-6R Agreement of finance mark up (Contract with party
for taking mark up on quarterly basis)
• IB-24 (used for title deed)
• IB-29 (used for guarantee from party)

• IB-26 (used for pledge of stock, margin is different for
different goods)
• No. IB-28 (used for lien) etc.
After that Loan is sanctioned to the party fulfilling all the terms
and conditions for the purpose. The procedure given above is for
both short and long term loans. The thing which is most important
here is that the banks first keeps in mind and analyzes according
to the rules prudential regulations of the State Bank of Pakistan.
Following finances in which Muridke Branch is dealing.

• Running Finance
• Cash Finance (Against Pledge of Stocks of wheat & rice)
• Demand Finance (against Lien On DSC’s)
• Tractor Finance
• Foreign Bills Purchased
• Finance Against Foreign Bills
• Export Refinance I
• Export Refinance II

88
The exposure of Muridke Branch is more than 500 Million.
I have learnt about the documentation required for the financing.

Major focus on the financing is depending on the account
turnover and collateral offered.
While financing to the fresh client the credit proposal of the
client is elevated to the higher office. The bank’s official get the
applications form the customer and prepare the case for getting
approval for the higher office.
SECURITIES HELD AGAINST FINANCING

FOR RUNNING FINANCE
Hypothecation of Stocks (50% Margin)
Collateral security (house, land, factory etc..)
FOR CASH FINANCE

Pledge of stocks (20 to 25% Margin)
Collateral security (house, land, factory etc..)
FOR DEMAND FINANCE

Lien over Defense Savings Certificate
Lien over Deposits (TDR)
Lien over Foreign Currency deposits
FOR TRACTOR FINANCING

89
Joint ownership of the Tractor

Collateral security (Agri land)
FOR EXPORT REFINANCE PART I

Lien over export bills drawn under firms order or contracts
Collateral security (house, land, factory etc...)
FOR EXPORT REFINANCE PART II

Hyp & Pledge of Stocks
Lien over EE statement
FOR FOREIGN BILLS PURCHASED

Lien over export bills drawn under LCs
FOR FINANCE AGAINST FOREIGN BILLS

Lien over export bills drawn under firm order and contracts
FOR BANK GUARANTEE

Cash Margin (As Per Approval of Finance)

90

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BALANCE SHEET

92
2005 2004
(Rupees in thousands)
ASSETS
Cash 23665549 23833253
Balance with other banks 1469333 5708323
Lending to financial institutions 9998828 10965297
Investments_ net 69481487 67194971
Advances – net 180322753 137317773
Operating fixed assets 8182454 7999821
Other assets_net 5464426 6154370
Deferred tax assets_net 19196 -------------
298776797 259173808
LIABILITIES
Deposits and other accounts 229345176 221069158
Borrowings from financial inst. 27377502 7590884
Bills payable 8536674 7566684
Other liabilities 8611600 6525999
Deferred tax liabilities ------------- 269498
Sub ordinated loans 1598080 1598720
Liabilities against assets ------------- -------------
275469034 244620924
NET ASSETS 23307763 14552884
REPRESENTED BY
Share capital 4265327 3371800
Reserve 13408005 5661553
Unappropriated profit 210662 165208
17883994 9198561
Surplus on revaluation of assets 5423768 5354323
23307763 14552884
PROFIT & LOSS ACCOUNT

93
2005 2004
(Rupees in ‘000)
Mark-up/return/interest earned 17756232 9083863
Mark-up/return/interest expensed 2781468 2057640
Net mark-up/interest income 14974764 7026223
Provision against non-performing loans and 1242153 442595
advances
Provision for diminution in the value of (98982) (172876)
investments
Bad debts written off directly 1184 8771
Provision for potential lease losses ---------- 1200
1144355 279690
Net mark-up/interest income after 13830409 6746533
provisions
NON MARK-UP/INTEREST INCOME
Fee commission and brokerage income 2448950 1992356
Dividend income 480344 378908
Income from dealing in foreign currencies 531455 492738
Other income 1084576 576007
Gain on Investments 866895 804478
Gain / Loss on trading in government 851 (11440)
securities
Total non-mark-up/interest income 5413071 4232988
19243480 10979521
NON MARK-UP/INTEREST EXPENSES
Administrative expenses 6459490 7244200
(Reversal) / Other provisions (72740) 149893
Other charges 178841 41864
Total non-mark-up/interest expenses 6565591 7435657
Compensation on delayed tax refund 340598 513850
PROFIT BEFORE TAXATION 13018487 4057716
Taxation – current year 4611359 1555764
Prior years (149763)
Deferred (365524) 70240

PROFIT AFTER TAXATION 8922415 2431532
Unappropriated profit brought forward 165208 195966

94
Transferred from surplus on revaluation of 83749 25839

fixed Assets
248957 221605
Profit available for appropriation 9171372 2653337
APPROPRIATIONS
Transfer to
Statutory reserve 892241 507999
General reserve 5500000 800000
Capital reserve ----------- -----------
Proposed cash dividend 426533 -----------
Reserve for issue of bonus shares 853065 337180
Interim cash dividend Rs 1.75 per share 649072 337180
Interim cash dividend Rs 1.50 per share 639799 505770
8960710 2488129
Unappropriated profit carried forward 210662 185208
Basic and diluted earning per share after 21.36 7.21
tax
CASH FLOW STATEMENT

95
2005 2004
(Rupee in 000)
CASH FLOW FROM OPERATING
ACTIVITIES
Profit/(Loss) before taxation 13018487 4057716
Less: Dividend income (480344) (378908)
12538143 3678808
Adjustments for non-cash charges
Depreciation 575538 598928
Amortization – intangible assets 60113 ----------
Provision against non-performing advances 1242153 442595
Provision for diminution in the value of (98982) (172876)
investment
Provision for diminution in the value of other (72740) 149593
assets
Bad debts written off directly 1184 8771
Gain on sale of non banking assets (24664) -------
Loss on sale of fixed assets 22114 (39324)
Provision for potential lease losses ----------- 1200
Surplus on revaluation of held for trading (1634) ----------
securities
1703082 988887
14241225 4667695
(Increase)/Decrease in operating assets
Lendings to financial institutions 966469 (534847)
Advances (44248317) (40570180)
Others assets 982933 26142
(455458801) (41422187)
(Increase)/Decrease in operating assets
Bills Payable 969990 (829636)
Borrowings from financial institutions 19786638 (25037087)
Deposits 8276020 9557765
Other liabilities 982933 26142
30015581 (16282816)
(1289074) (53037308)
Income tax paid (1152343) (683995)
Income tax refund -------------- 370208
Net cash flow operating activities (2441417) (53351095)

96
CASH FLOW FROM INVESTING

ACTIVITIES
Net investments in available-for-sale (20301953) 105292873
securities
Net investments in held-to-maturity 16278483 (45878054)
securities
Net investments in held-for trading securities (66056) ---------------
Dividend received 588153 181258
Investments in operating fixed assets (1029307) (1265675)
Investment in subsidiary and associated (77) --------------
companies
Sale proceeds from non banking assets 589876 --------------
disposed of
Sale proceeds of fixed assets disposed of 127254 81308
Net cash flow from investing activities (1813827) 58411710
CASH FLOW FROM FINANCING
ACTIVITIES
Redemption of subordinated loans (640) (640)
Proceeds from issue of right shares 1390868 --------
Dividend paid (1545483) (818306)
Net cash flow from financing activities (155255) (818946)
Ex. difference in cash transactions in foreign 3805 (56354)
branches
Increase/(Decrease) in cash and cash (4406694) 4185315
equivalents
Cash and cash equivalent at beginning of 29547922 25500460
the year
Effects of exchange rate changes (6346) (144199)
29541576 25356261
Cash and cash equivalents at end of the 25184882 29541576
year
FINANCIAL ANALYSIS

97
"Financial statement analysis is the process of identifying of

financial strengths and weaknesses of the firm by properly
establishing relationship between the items of the balance sheet
and the profit &loss account," and it is done through ratio
analysis.
RATIO ANALYSIS
Ratio means “one number expressed in term of another a ratio is

statistical yardstick by mean of which relationship between two
or various figures can be compared or measured. Here we are
going to explain the ratio analysis of MCB.

98
Financial ratios can be divided into the following six parts.
A. Liquidity ratios
B. Activity ratios
C. Leverage ratios
D. Profitability ratios
E. Investor ratios
F. Bank special ratios
A. Liquidity ratios
 Current ratios
 Quick ratios
 Absolute Liquid ratio
B. Activity ratios
 Inventory turnover ratio
 Average collection period
 Average payment period
 Total assets turnover ratio
C. Leverage ratios
 Proprietary ratio
 Debt ratio
 Debt to Equity ratio
 Debt to Tangible net worth ratio
 Debt to Funds ratio
 External-Internal Equity ratio
D. Profitability ratio
 Return on total assets

99
 Return on-equity
 Return on investment
 Return on fixed assets
 Average profit per branch
 Net profit Margin
 Interest income to total income
 Interest expense to total expense
 Return on advances
E. Investor Ratios
 Earning per share
 P/E ratio
 Dividend per share
 Dividend yield ratio
 Dividend payout ratio
 Break up value/Book value per share
 M/B ratio
F. Bank special Ratios

 Earning assets to total assets
 Return on earning assets
 Net margin to earning assets
 Loan loss coverage ratio
 Equity to total assets
 Deposit time equity
 Loan to deposit ratio
Because here we are discussing ratio analysis of bank, therefore

we will not discuss A & B category of ratios.

100
LEVERAGE/SOLVENCY ANALYSIS
Solvency analysis of a firm indicates the amount of the other

people’s money being used to generate profit. In general, these
analyses are more concerned with long term debts, because these
commit the firm to a stream of payments over the long run.
Solvency analysis includes:
 Proprietary ratio
 Debt ratio
 Debt to Equity ratio
 Debt to Tangible net worth ratio
 Debt to Funds ratio
 External-Internal Equity ratio

101
1. PROPRIETARY RATIO
Total equity
= Total Assets
Year 2005 (000) 2004 (000)

Total Equity 23307763 14552884
Total Assets 298776797 259173808
ratio 0.08 0.06
2. DEBT RATIO/ SOLVENCY RATIO
= Total equity
Total Assets
Year 2005 (000) 2004 (000)

Total Debts 275469034 244620924
Total Assets 298776797 259173808
ratio 0.92 0.94
3. DEBT TO EQUITY RATIO
Total Debt
= Equity
Year 2005 (000) 2004 (000)

Total Debts 275469034 244620924
Equity 23307763 14552884
ratio 11.82 16.81

102
4. DEBT TO TANGIBLE NET WORTH
= Total Debt
Equity
Year 2005 (000) 2004 (000)

Total Debts 275469034 244620924
Tangible net worth 23058725 14552884
ratio 11.94 16.81
5. DEBT TO FUNDS RATIO
= Long term Debt

Long Term Funds
Year 2005 (000) 2004 (000)

Long Term Debts 41318331 22455384
Long Term Funds 64626094 37008268
ratio 0.63 0.60
6. EXTERNAL INTERNAL EQUITY RATIO
= External Equity
Internal Equity
Year 2005 (000) 2004 (000)

External Equity 275469034 244620924
Internal Equity 23307763 14552884
ratio 11.82 16.81

103
INTERPRETATION
The overall leverage position is showing better trend as compare

to previous year. The contribution of equity in total assets is
increasing, while the debt contribution is decreasing which is
better for business. Equity ratio is increased which shows the
better condition of the bank. Solvency Ratio is in good condition.
So we can say that overall Solvency condition of the MCB is
better with the comparison to the previous year.

104
PROFITABILITY ANALYSIS
Profitability analysis of a firm indicates the overall efficiently of

the management. Without profit a company can not attract the
outside capital. Profitability analysis includes:
 Return on total assets

 Return on-equity
 Return on investment
 Return on fixed assets
 Average profit per branch
 Net profit Margin
 Interest income to total income
 Interest expense to total expense
 Return on advances

105
1. RETURN ON ASSETS
Net Profit after Tax
= × 100
Total Assets
Year 2005 (000) 2004 (000)

Net Profit after Tax 8922415 2431532
Total Assets 298776797 259173808
return 3.0% 0.93%
2. RETURN ON EQUITY
= × 100
Equity
Year 2005 (000) 2004 (000)

Equity 23307763 14552884
return 38.28% 16.71%
3. RETURN ON INVESTMENT

= × 100
Investment
Year 2005 (000) 2004 (000)

Investment 69481487 67194971
return 12.84% 3.62%

106
4. RETURN ON FIXED ASSETS

= × 100
Fixed Assets
Year 2005 (000) 2004 (000)

Fixed Assets 8182454 7999821
return 109% 30.39%
5. AVERAGE PROFIT PER BRANCH

= No. of branches
Year 2005 2004

No. of branches 1045 1045
Average Profit 8546375 2329054
6. NET PROFIT MARGIN
= Net Profit after Tax × 100

Interest Income
Year 2005 (000) 2004 (000)

Interest Income 17756232 9083863
return 50.25% 26.77%

107
7. INTEREST INCOME TO TOTAL INCOME
Interest Income
= × 100
Total Income
Year 2005 (000) 2004 (000)

Total Income 23169303 13316851
return 76.64% 68.21%
8. INTEREST EXPENSE TO TOTAL EXPENSE
= Interest Expense × 100

Total Expense
Year 2005 (000) 2004 (000)

Total Expense 9347059 9493097
Interest Expense 2781468 2057640
return 29.76% 21.67%
9. RETURN ON ADVANCES
Interest Income
= × 100
Total Loans
Year 2005 (000) 2004 (000)

Total Advances/ Loans 180322753 137317773

108
return 9.85% 6.61%
INTERPRETATION
Profitability analysis shows the entire performance of a business

and if we study the profitability trend of bank then it will clear to
us that it showing a positive trend. Net profit after tax is
increased as compare to previous year, due to it return on assets,
equity and investment is increasing. Not only overall profit is
increasing but also average profit of all the branches is increasing.
Bank interest income is also increasing due to more advances in this
year. This year bank total deposits are also increased and that’s
why interest expenses are showing up ward trend.

109
INVESTOR ANALYSIS
Investor analysis or market analysis are related to firm market

valve, as measure by its current share price to certain accounting
values. Investor analysis includes:
 Earning per share

 P/E ratio
 Dividend per share
 Dividend yield ratio
 Dividend payout ratio
 Break up value/Book value per share
 M/B ratio

110
1. EARNING PER SHARE

=
No. of Shares
Year 2005 2004

No. of Shares 426532700 337180000
Earning 21 7.21
2. P/E RATIO
MP Per Share
=
EPS
Market price per share is Rs.247.75 on 4th Jan.2007
Year 2005 2004

MP Per Share 247.75 247.75
EPS 21 7.21
ratio 11.80 34.36
3. DIVIDEND PER SHARE
= Total Dividend
No, of Shares
Year 2005 2004

Total Dividend 1288871000 842950000
No. of Shares 426532700 337180000

111
DPS 3.02 2.5
4. DIVIDEND YIELD RATIO
= DPS
MV Per Share
Year 2005 2004

DPS 3.02 2.5
MV Per Share 247.75 247.75
ratio 0.012 0.01
5. DIVIDEND PAYOUT RATIO
= DPS × 100
EPS
Year 2005 2004

DPS 3.02 2.5
EPS 21 7.21
ratio 14.38% 34.67%
6. BOOK VALUE PER SHARE
= Equity
No. of Shares
Year 2005 2004

Equity 23307763000 14552884000
No. of Shares 426532700 337180000
ratio 54.64 43.16

112
7. M/B RATIO
= MV Per Share
BV Per Share
Year 2005 2004

BV Per Share 54.64 43.16
MV Per Share 247.75 247.75
ratio 4.53 5.74

113
INTERPRETATION
MCB has also has good investment opportunities for the

investors. This bank has more attraction for investors as compare
to previous year. Earning per share is increased due to increase in
profit. Book value and market valve of one share in also increased
as compare to 2004. Only dividend yield and payout ratio is
decreased because bank declared fewer dividends as compare to
last year but it is also in favor of investors because it will
increase wealth of shareholders and ultimate benefit to
investors.

114
BANK SPECIAL ANALYSIS
Bank ratio analysis is little bit different from other organizations

and if we want to see the real picture of a bank we have to focus
on given special ratios.
 Earning assets to total assets

 Return on earning assets
 Net margin to earning assets
 Loan loss coverage ratio
 Equity to total assets
 Deposit time equity
 Loan to deposit ratio

115
1. EARNING ASSETS TO TOTAL ASSETS
= Earning Assets
Total Assets
Year 2005 (000) 2004 (000)

Earning Assets 261272401 221186364
Total Assets 298776797 259173808
ratio 0.87 0.85
INTERPRETATION
The efficiency of the banking firm is measured by its ability to

utilize its assets in a manner that they could be profitable for the
firm. Bank earning assets are increasing as compare to last year
but it is just a little bit increase. Advances of bank are increasing
but investment as compare to 2004 is decreased. Lending to
financial institutions is also not very well. Balance with other banks
is also not desirable but overall earning assets showing
satisfactory position in 2005.

116
2. RETURN ON EARNING ASSETS
= NP before Tax × 100

Earning Assets
Year 2005 (000) 2004 (000)

Earning Assets 261272401 221186364
Net Profit before tax 13018487 4057716
return 4.98% 1.83%
INTERPRETATION
Return on earning assets is increased as compare to previous year

because there is increased in net profit in 2005 as compare to
2004. The increasing trend in this ratio is beneficial for business
and investors because this ratio shows real profitability position
of business.

117
3. NET MARGIN TO EARNING ASSETS
= Net Margin × 100

Earning Assets
Year 2005 (000) 2004 (000)

Earning Assets 261272401 221186364
Net Margin 14974764 7026223
ratio 5.73% 3.17%
INTERPRETATION
Spread is difference between interest income and interest

expense. This ratio shows the spread position of a bank. In this
year bank net margin is increased due to increase in advances and
interest income as compare to 2004. Interest expense is also
increased but their increasing trend is lesser as compare to
interest income so that’s why spread position of bank is increased
in this year.

118
4. LOAN LOSS COVERAGE RATIO
= Pre tax Income + Provision for loan loss

Net Charges off + Provision for loan loss
Year 2005 (000) 2004 (000)

Pre tax Income 13018487 4057716
Provision for Loan Loss 1242153 442595
Net Charges Off 1184 8771
ratio 11.47 times 9.97 times
INTERPRETATION
This ratio shows how much money is there against Rs 1 loss. This
ratio provides a protection to customers who are going to deposit
their money in bank. Higher the ratio is beneficial for the bank
and customers. In this year loan loss coverage ratio is increased
due to decrease in bad debts but in 2004 the ratio of bad debts
is more as compare to this year. This shows the efficiency of
bank in this year instead of 2004.

119
5. EQUITY TO TOTAL ASSETS
= Equity
Total Assets
Year 2005 (000) 2004 (000)

Total Equity 23307763 14552884
Total Assets 298776797 259173808
ratio 0.08 0.06
INTERPRETATION
This ratio shows the position of equity in total assets of business.

In both years this ratio is almost same. But the bank should
increase its equity by increasing the wealth of shareholders.

120
6. DEPOSIT TIME EQUITY

Debt
=
Equity
Year 2005 (000) 2004 (000)

Total Debts 275469034 244620924
Equity 23307763 14552884
ratio 11.82 16.81
INTERPRETATION
This ratio is also known as debt to equity ratio. This shows how
much outsiders share in business total equity. Lesser ratio is
better for a business and this year bank ratio is decreasing which
showing better trend as compare to previous years.

121
7. LOAN TO DEPOSIT
Loan
= × 100
Deposit
Year 2005 (000) 2004 (000)

Loan 180322753 137317773
Deposit 229345178 221069158
ratio 78.62% 62.11%
INTERPRETATION
Loans or advances are the major assets of a bank while deposits

are major liabilities of a bank. Higher ratio shows the better
solvency of bank. This ratio is increased instead of previous years
because advances of the bank are increased as previous years
although deposits are also increased this years but its ratio is
less.

122

123
TREND ANALYSIS
In trend analysis we done two types of analysis, these are
Horizontal Analysis
It is conducted by setting consecutive balance sheet, income

statement or statement of cash flow side-by-side and reviewing
changes in individual categories on a year-to-year or multiyear
basis.
A comparison of statements over several years reveals direction,

speed and extent of a trend(s). The horizontal financial
statements analysis is done by restating amount of each item or
group of items as a percentage.
Vertical Analysis
Like horizontal analysis this can also done for balance sheet and
income statement. Here we assign 100% value to any key item of

124
balance sheet or income statement and then see portion of other

items in this percentage.

125

126
Particulars 2002 2003 2004 2005

ASSETS
Cash 100% 134% 133% 132%
Balance with other banks 100% 60% 264% 68%
Lending to financial institutions 100% 30% 32% 30%
Investments_ net 100% 143% 75% 78%
Advances – net 100% 123% 174% 228%
Operating fixed assets 100% 120% 209% 214%
Other assets_net 100% 73% 69% 72%
Deferred tax assets_net 100% 0% 0% 191967%
100% 116% 110% 127%
LIABILITIES
Deposits and other accounts 100% 116% 121% 126%
Borrowings from financial inst. 100% 148% 35% 125%
Bills payable 100% 134% 121% 136%
Other liabilities 100% 70% 72% 95%
Deferred tax liabilities 100% 38% 15% 0%
Sub ordinated loans 100% 99.9% 99.9% 99.8%
Liabilities against assets 100% 0% 0% 0%
100% 117% 109% 123%
NET ASSETS 100% 94% 124% 199%
REPRESENTED BY
Share capital 100% 115% 126% 160%
Reserve 100% 145% 187% 443%
Unappropriated profit 100% 45% 26% 34%
100% 122% 146% 283%
Surplus on revaluation of assets 100% 62% 99% 101%
100% 94% 124% 199%

127
2002 2003 2004 2005
250%
200%
150%
100%
50%
0%
Total Assets Total Liabilities Equity
The horizontal analysis of the balance sheet of the bank over all
give the positive trend .The result of the balance sheet depict
that there is a constant increasing trend in cash, total assets,
total liability and equity. There is extraordinary high trend in
2005 in all factors of balance sheet as compare to 2002.
The trend of cash is increasing to upward with 32%. The trend of

Total asset is also increasing to upward with 27%, and the trend
of total liabilities is also increasing with 23% to upward. Equity is
increased by 99%.

128
Particulars 2002 2003 2004 2005

Mark-up/return/interest earned 100% 67% 59% 115%

129
Mark-up/return/interest expensed 100% 48% 34% 46%

Net mark-up/interest income 100% 80% 75% 161%
Provision against non-performing loans and 100% 705787% 442575 1242153
advances % %
Provision for diminution in the value of 100% - - -98982%
investments 150000% 172876%
Bad debts written off directly 100% 31% 1.2% 0.16%
Provision for potential lease losses 100% 168% 234% 0%
100% 108% 39% 159%
Net mark-up/interest income after 100% 77% 79% 161%
provisions
NON MARK-UP/INTEREST INCOME
Fee commission and brokerage income 100% 115% 220% 270%
Dividend income 100% 125% 127% 161%
Income from dealing in foreign currencies 100% 66% 193% 106%
Other income 100% 149% 116% 217%
Gain on Investments 100% 532% 209% 226%
Gain / Loss on trading in government 100% 0% -11440% -851%
securities
Total non-mark-up/interest income 100% 175% 163% 209%
100% 100% 92% 172%
NON MARK-UP/INTEREST EXPENSES
Administrative expenses 100% 87% 96% 87%
(Reversal) / Other provisions 100% 50000% 149593% -72740%
Other charges 100% 4496% 3189% 13468%
Total non-mark-up/interest expenses 100% 94% 92% 81%
Compensation on delayed tax refund 100% 0% 513852% 340596
%
PROFIT BEFORE TAXATION 100% 117% 130% 420%
Taxation – current year 100% 79% 102% 301%
Prior years 100% 0% 0% -
149763%
Deferred 100% -101% -42% 216%
PROFIT AFTER TAXATION 100% 128% 140% 513%
Unappropriated profit brought forward 100% 219% 69% 58%

Transferred from surplus on revaluation of 100% 41% 42% 137%
fixed Assets

130
Profit available for appropriation 100% 126% 116% 402%

APPROPRIATIONS
Transfer to
Statutory reserve 100% 128% 146% 256%
General reserve 100% 1000000 800000 5500000
% % %
Capital reserve 100% 0% 0% 0%
Reserve for issue of bonus shares 100% 77% 84% 213%
Interim cash dividend Rs 1.75 per share 100% 69% 51% 97%
Interim cash dividend Rs 1.50 per share 100% 383159% 50577% 639799
%
100% 157% 156% 541%
Unappropriated profit carried forward 100% 45% 26% 34%
2002 2003 2004 2005
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
Mark up Income Mark up Net mark up Net mark up after
Expense before provision provision

131
2002 2003 2004 2005
600%
500%
400%
300%
200%
100%
0%
Net Profit before tax Net Profit after tax
According to horizontal analysis of profit and loss account there

is increasing trend. In 2005 there is increase in all factors such
as interest income interest income interest income after
provision and profit before and after tax because the trust of
people on banks is increasing day by day. The increase in profit in
2005 is almost 5 times as compare to 2002.

132

133
Particulars 2002 2003 2004 2005

ASSETS 100% 100% 100% 100%
Cash 8% 9% 9% 8%
Balance with other banks 0.92% 0.5% 2.2% 2.8%
Lending to financial institutions 14% 3.8% 4% 3.3%
Investments_ net 38% 47% 26% 23%
Advances – net 34% 36% 53% 60%
Operating fixed assets 1.08% 1.3% 2% 27%
Other assets_net 4% 2.4% 3.8% 0.4%
Deferred tax assets_net 0% 0% 0% 0%
100% 100% 100% 100%
LIABILITIES 100% 100% 100% 100%
Deposits and other accounts 82% 81% 90% 83%
Borrowings from financial inst. 10% 12.5% 3% 10%
Bills payable 2.8% 3.2% 3% 3%
Other liabilities 4% 2.4% 2.6% 3.4%
Deferred tax liabilities 0.48% 0.3% 0.8% 0%
Sub ordinated loans 0.72% 0.6% 0.6% 0.6%
Liabilities against assets 0% 0% 0% 0%
100% 100% 100% 100%
NET ASSETS 100% 100% 100% 100%
REPRESENTED BY
Share capital 23% 28% 23% 18%
Reserve 26% 29% 39% 58%
Unappropriated profit 5% 3% 1% 1%
54% 70% 63% 77%
Surplus on revaluation of assets 46% 30% 37% 23%
100% 100% 100% 100%

134
Assets
Cash and balances

w ith treasury banks
Deferred tax assets Balances with other
Operatig fixed
banks
assets
Other assets
Lendings to financial
institutions
Investments
Advances
Deferred tax
Liabilities against liabilities
Unappropriated
assets subject to
Other liabilities profit
finance lease Reserves
Share capital Borrowings from

Bills payable
Sub-ordinated loans financial institutions
Deposits and other

accounts

135
INTERPRETATION
In balance sheet of bank the most important item is earning

assets. There are four earning assets. Bank has strong earning
assets like advances investments and lending to financial
institutions has major percentage in of assets of bank. In liability
and equity analysis the Borrowings from financial institutions and
deposits have major portion and reserve and share capital has
major portion in equity

136

137
Particulars 2002 2003 2004 2005

Mark-up/return/interest earned 100% 100% 100% 100%
Mark-up/return/interest expensed 39% 28% 23% 16%
Net mark-up/interest income 61% 72% 77% 84%
Provision against non-performing loans and 0% -1.44% -1% -0.55%
advances
Provision for diminution in the value of 0% 7% 5% 7%
investments
Bad debts written off directly 4.6% 0.008% 0.01% 0%
Provision for potential lease losses 0.003% 2.2% 0.09% 0.006%
5% 8% 4% 6%
Net mark-up/interest income after 56% 64% 72% 78%
provisions
Particulars 2002 2003 2004 2005

NON MARK-UP/INTEREST INCOME 100% 100% 100% 100%
Fee commission and brokerage income 35% 23% 47% 45%
Dividend income 11% 8.2% 9% 9%
Income from dealing in foreign currencies 19% 7.3% 12% 10%
Other income 15% 45% 14% 16%
Gain on Investments 30% 16.5% 19% 19.9%
Gain / Loss on trading in government 0% 0% -1.1% 0.01%
securities
Total non-mark-up/interest income 100% 100% 100%% 100%%
NON MARK-UP/INTEREST EXPENSES 100% 100% 100% 100%
Administrative expenses 93% 87% 97% 98%
(Reversal) / Other provisions 6.5% 12.4% 2% -1%
Other charges 0.5% 0.6% 1% 3%
Total non-mark-up/interest expenses 100% 100% 100% 100%

138
INTERPRETATION
In vertical analysis of profit and loss account the interest
expense has decreasing trend from 2002 to 2005 but in 2005
there little bit increase in net interest income but almost have
same trend. According to this analysis fee, commission and
brokerage income has some worth in our income statement its
almost one fourth or one fifth of our interest income and it has
increasing trend.
The administrative expenses are also increasing from 2002 to

2005 but overall management is able to reduce expenses, so due
to which there is continuous increase in profit before and after
tax.

139
COMPARATIVE STUDY
140
In comparative study of financial statements, we compare the

given year statements with different years or compare with
competitors in industry. For this we conduct two types of
analysis.
Liquidity ratios
 Time Series Analysis
 Cross Sectional Analysis

141

142
Ratios 2004 2005 Comments
Leverage Ratios
Proprietary Ratio 0.06 0.08 Good
Debt Ratio 0.94 0.92 Good
Debt to Equity 16.81 11.82 Good
Debt to Tangible Net worth 16.81 11.94 Good
Debt to Funds Ratio 0.62 0.63 Bad
External Internal Equity 16.81 11.82 Good
Profitability Ratios
Return on Assets 0.94% 3.0% Good
Return on Equity 16.71% 38.28% Good
Return on Investment 3.62% 12.84% Good
Return on fixed Assets 30.22% 109% Good
Average profit Per Branch 2329054 8546375 Good
Investors Ratios
EPS 7.21 21 Good
P/E Ratio 34.36 11.80 Bad
Dividend Yield Ratio 0.01 0.012 Good
Dividend Payout Ratio 34.67% 14.38% Bad
Book valve per Share 43.16 54.64 Good
Bank Special Ratios

Earning assets to Total assets 0.85 0.87 Good
Return on earning assets 1.83% 4.98% Good
Net margin to Earning assets 3.17% 5.73% Good
Loan loss coverage Ratio 9.97 times 11.47 times Good
Equity to Total assets 0.06 0.08 Good
Deposit time Equity 16.81 11.82 Good
Loan to Deposit 62.11% 78.62% Good

143
INTERPRETATIPN
Solvency Ratios
Proprietary Ratio, Solvency Ratio, Debt to Equity are all in good
position but only debt to fund ratio showing poor condition in this
year.
All the ratios involved in profitability showing better trend as
compare to 2004 and this shows the efficient management of
bank.
Investor Ratios
Price Earning Ratio, Market/Book Ratio are both in good condition
the difference as per previous year is very large. Only dividend
yield and payout is decreasing due to lesser declaration of
dividend in this year.
Bank Special Ratios

These ratios shows real picture of a bank. All these ratios
showing better position as compare to 2004 so overall bank
showing better position.

144

145
Ratios Bank Alfalah MCB Comments

Leverage Ratios
Proprietary Ratio 0.04 0.08 Good
Debt Ratio 0.96 0.92 Good
Debt to Equity 33.6 11.82 Good
Debt to Tangible Net worth 14.62 11.94 Good
Debt to Funds Ratio 0.52 0.63 Bad
External Internal Equity 33.6 11.82 Good
Return on Assets 0.685% 3.0% Good
Return on Equity 25.26% 38.28% Good
Return on Investment 3.62% 12.84% Good
Return on fixed Assets 30.22% 109% Good
Investors Ratios
EPS 5.75 21 Good
P/E Ratio 15.65 11.80 Bad
Dividend Yield Ratio 0.02 0.012 Ok
Dividend Payout Ratio 24.14% 14.38% Bad
Book valve per Share 38.54 54.64 Good
Bank Special Ratios
Earning assets to Total assets 0.95 0.87 Good
Return on earning assets 1.83% 4.98% Good
Net margin to Earning assets 2% 5.73% Good
Loan loss coverage Ratio 5.65 times 11.47 times Good
Equity to Total assets 0.04 0.08 Good
Deposit time Equity 33.6 11.82 Good
Loan to Deposit 62.11% 78.62% Good

146
INTERPRETATION
MCB Limited is not only showing better trend in this year but also
showing better position in industry. The major competitor of MCB
is bank Alfalah and it is necessary to depict the real scenario of
MCB financial ratios, we compare these with bank Alfalah ratios,
so for this purpose we have done cross sectional analysis of MCB
with bank Alfalah.
In this analysis, overall leverage position of MCB is good as

compare to bank Alfalah. Profitability analysis is also better as
compare to bank Alfalah. In investor analysis, P/E ratio is bad but
overall market value of MCB is good as compare to bank Alfalah.
Bank special ratios of MCB are also good as compare to bank
Alfalah.

147
RECOMMENDATIONS
From the Quantum of the profit and its financial data it can be
easily judged that after privatization, MCB is performing well. Its
deposits are growing day by day and so its profitability. The
controlling body is responsible for the productive performance of
the Bank.
Following are my observation and suggestion to improve the
efficiency for the development of the bank.
• There is a criticism on the banking management that the
salaries of the employees are decreasing in every
succeeding year. And I think this will shake the confidence
and working habit of the employees.
• There is another recommendation about the bank that there
is no proper timing of the bank and there is made an
unnecessary delay in the banking transactions, which might
not be a good sign for the bank from future prosperity point
of view.

148
• Staff turnover particularly of trained staff result in
financial and other losses. The amount spent by the bank on
employment, induction and training of outgoing officers
constitutes to beat till another officer should ready prove
this work. The exodus of bank officer in the past has
worsened the situation.
• Most of the bank employees, are sticking to one seat only
with the result that they become master of one particular
job and loose their grip on other banking operation. In my
opinion all the employees should have regular job experience
all out-look towards banking. The promotion policy should be
adjusted.
• Refresher Courses for the staff are most important in any
international organization. Alt the employees should have
these courses according to their requirement. Foreign
experts can also be called for this purpose.
• Every year some of the employees should be sent for
training to other countries and employees from other
branches should be brought here. Some more reading
material should be provided. The purpose should be to

149
Educate the employees with the advance studies in their field.
The employee should be provided the opportunities to attend
and participate in seminars and lectures on banking.
• Bank should give some more incentive to its employees in
order to remove the conflict between lower and higher
officers and should try to improve the working condition of
the bank.
• As such system should be designed that every employee who
has some problems with his officers can communicate it to
the higher management and some steps must be taken to
improve that.
• Recruitments should be strictly on merit basis and induction
should be after proper and extensive training.
• Old and lazy staff should be replaced by young, qualified
and energetic staff.
• Foreign branches should be opened in order to capture the
international market and to earn international repute for
the bank.
• Working environment, equipment, furniture and staff
dressing should be according to the modern banking style.

150
• Proper attention should be paid to upgrade customer
services.
• Bank should adopt the global organizational banking
structure to meet the international standards of banking
sector.

151

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INTERNSHIP REPORT ON MCB BANK LIMITED

The goldsmiths used to issue receipts for the money deposited

University of the Punjab, Gujranwala Campus

in cash. They found that only a few persons presented the

University of the Punjab, Gujranwala Campus

According to G.W. Gilbert,

According To Bamkinh Companies Ordinance

University of the Punjab, Gujranwala Campus

HISTORY OF BANKING IN PAKISTAN

The interesting point which I observed during the span of mine

A) Pre Nationalization Era

University of the Punjab, Gujranwala Campus

a) HBFC (Nov, 1952);

University of the Punjab, Gujranwala Campus

These were the steps, which built a strong banking sector in

BANKING SECTOR IN PAKISTAN IN 1973

BANK NO.OF BRANCHES DEPOSITS

Allied Bank Ltd. 145 Rs. 570 (million)

University of the Punjab, Gujranwala Campus

 Working of banks was extended to under developed

University of the Punjab, Gujranwala Campus

C) POST NATIONALIZATION ERA

b) ABL taken up by its own employees in September 1991.

Category No. Of Banks

University of the Punjab, Gujranwala Campus

In addition to above mentioned scheduled banks there are 11

PAKISTAN BANKING SECTOR

• Nationalized Commercial Banks

NATIONALIZED SCHEDULE BANKS

• First Women Bank Ltd.

DE-NATIONALIZED SCHEDULE BANKS

• Allied Bank of Pakistan Limited

University of the Punjab, Gujranwala Campus

• Zarai Taraqiti Bank of Pakistan (ADBP)

PRIVATE SCHEDULE BANKS

• Askari Commercial Bank Ltd.

University of the Punjab, Gujranwala Campus

• ABN AMRO Bank N.V.

University of the Punjab, Gujranwala Campus

DEVELOPMENT FINANCIAL INSTITUTIONS (DFIS)

• Investment Corp of Pakistan

• Crescent Investment Bank

University of the Punjab, Gujranwala Campus

• City Corporation Investment Bank (Pak) Ltd.

HISTORY OF THE MCB BANK LIMITED

University of the Punjab, Gujranwala Campus

This institute was nationalized with other on January 1st, 1974.

University of the Punjab, Gujranwala Campus

• Launching of different deposit schemes to increase saving

MCB BANK TODAY

MCB today, represents a bank that has grown with time,

The bank conducted import business during the year amounting to

YEAR 2006 COMPLIANCE

University of the Punjab, Gujranwala Campus

MCB’s strength lies in providing a technological base at the gross

The bank activity participating in the Prime Minister self-

MCB is in it’s over 50 years of operation. It has a network of

Fourteen years after privatization, MCB is now in a consolidation

University of the Punjab, Gujranwala Campus

prepare the groundwork for future growth. The bank has