INTERNSHIP REPORT

ON
MUSLIM COMMERCIAL BANK

SUBMITTED TO:
Branch Manager
MCB BANK LTD THOKAR BRANCH, LAHORE

SUBMITTED BY:
SADIA SHAHWAIZ
 DEDICATION

I would dedicate this accomplishment to my beloved and caring parents and teachers with the
support of whom I am standing at this step of my life stairs.
 DECLERATION

I work myself for this report. I made research and experience the working of MCB during my
stay as internee in bank.
 ACKNOWLEGEMENT
In the name of ALLAH ALMIGHTY, the most kind and merciful.

First of all, I would thanks to ALLAH ,who blessed me with health,abilities and guidness to
complete the project in a successful manner and without HIS help I am unable to perform this
task.

Secondly, I would like to thanks my parents for encouraging and supporting me.

In the last, I would also be thankful to the Mr. Khawar Ali (Operation Manager) and their staff
for providing me oppourtunity to have an excellent learning experience during my internship.
 EXECUTIVE SUMMARY

MCB is one of the leading banks of Pakistan incorporated in 1947 MCB Bank has made significant
contributions in building and strengthening both corporate and retail banking sector in Pakistan.

This report is an upshot of my six weeks internship in Muslim Commercial Bank of Pakistan. MCB of
Pakistan possesses an imperative and historical importance in the banking sector of Pakistan. It always
remains the center of hustles in business activities. It always endows with great covenant of rally round in
terms of funds and services at all epochs of its dynamism.

The main purpose of internship is to learn, by working in practical environment and to apply the
knowledge acquired, during the studies, in a real world scenario in order to tackle the problems. In this
report the detailed analysis of the organization has been done and all the
financial, technical, managerial and strategic aspects have been evaluated to analyze the current position
of the organization. Along with it, the background analysis, the prevailing competition analysis, the
business process analysis, and the internal environment and external environment of the organization have
been discussed and the recommendations & suggestions for the improvement have been made wherever
required. During my six weeks internship program, I mainly worked with the following departments:
GENERAL BANKING, CLEARNCE and ACCOUNT OPENING These departments have been
discussed in detail and all the policies and procedures have been described thoroughly.

This report will give a complete and clear image about MUSLIM COMMERCIAL BANK.
 TABLE OF CONTENTS

Section 1:

Vision And mission

Core values

1.Overview of the organization

1.1 Brief History of the organization

1.1.1 Development Phase

1.1.2.Nationalization Phase

1.1.3.Privatization Phase

1.1.4.Present Position of MCB

1.1.5 Awards and Achievement

1.1.6.Review of MCB

1.1.7. Objective

1.2 Nature of organization

1.3 Number of employees

1.3.1 Board of Directors

1.3.2 Key Management

1.3.3. Staff Strength

1.4. Product and Services

Section 2:

Organization Structure:

Chart: Organizational Hierarchy of MCB

 Branches Networks

2. Departments of Allama Iqbal Town Branch (1354)

2.1 General Banking Department

2.1.1 Clearing Department

2.1.2. Remittance Department

2.2 Account Department

Section 3:

3. Weakness of the organization

4. Conclusion

5. Recommendations

6. References
 VISION AND MISSION

VISION STATEMENT

To be leading financial services providers, partnering with our customers for a more prosperous and
secure future.

MISSION STATEMENT

We are a team of committed professional, providing innovative and efficient financial solutions to create
and nurture long-term relationship with our customers. In doing so, we ensure that our shareholders can
invest with confidence in us.
 CORE VALUES
INTEGRITY

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

INNOVATION

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

EXCELLENCE

We take personal responsibility for our role as leaders in the pursuit of

excellence. We are a performance driven, result oriented organization
where merit is the only criterion for reward.

CUSTOMER CENTRICITY

Our customers are at the heart of everything we do. We thrive on the

challenge of understanding their needs and aspirations, both realized and
unrealized. We make every effort to exceed customer expectations through
superior services and solutions.
SECTION 1:

1. OVERVIEW OF THE ORGANIZATION

1.1 BRIEF HISTORY OF THE ORGANIZATION

The history of MCB can be divided into four phase:

 Development Phase
 Nationalization Phase
 Privatization Phase
 Present Position of MCB

1.1. 1 DEVLOPMENT PHASE

MCB Bank Limited was incorporated by the Adamjee Group on July 9, 1947, under the Indian
Companies Act, VII of 1913 as a limited company. The bank was established with a view to provide
banking facilities to the business community of the South Asia. After the partition of the Indo-Pak
subcontinent, the bank moved to Dhaka (then the capital of former East Pakistan) from where it
commenced business in August 1948. In 1956, the bank transferred its registered office to Karachi, Where
the head office is presently located. Thus, the bank inherits a 64 years legacy of trust of its customers and
the citizens of Pakistan. MCB Bank is not an overnight success story. It started with a share capital of Rs
30 million which is divided into 3 million ordinary shares of Rs 10 each.

1.1.2 NATIONALIZATION PHASE

The 1960s decade is stated as the golden era in Pakistan’s economic and financial development. The
banking sector also registered noticeable growth during that period and lent a strong helping hand to the
government to achieve rapid economic growth of the country. But in early 1970s this scenario changed
altogether. The separation of East Pakistan (now Bangladesh) and induction of the government led by
Zulfiqar Ali Bhutto were the most significant events of early 70s having far reaching effects on the
banking system. In the wake of rapidly changing conditions of the country, the government decided to
nationalize all the commercial banks so that the nation as a whole can benefit from a better use of
resources. Consequently, the Muslim Commercial Bank was nationalized under the Banks
(Nationalization) Act, 1974 promulgated on January 1, 1974. In the banking sector, the then government
decided to retain only five major banks by merging all the smaller banks with the large ones. As a result
of this policy, the Premier Bank was merged into Muslim Commercial Bank in 1974.

1.1.3. PRIVITIZATION PHASE

This was the first bank to be privatized in 1991 and the bank was purchased by a consortium of Pakistani
corporate groups led by Nishat Group.The banks after nationalization came under political and
bureaucratic control and deviated from normal banking practices. Some of their senior executives were
tempted to nurture a culture of obliging big businessmen, feudal and political influential. They sacrificed
their personal integrity and interest of banking sector for gaining promotion and accumulating personal
wealth. That is how banking sector started losing its upright and professional institutional image from
mid-80s and its downward slide started which touched new low during 1990s.

The then PML government also became conscious of the falling standard of the banking sector and
decided to privatize all the commercial banks. Banks (Nationalization) (Second Amendment) Ordinance
1991 was also promulgated to pave the way for privatization of banks in Pakistan.In the wake of above
amendments, 26% shares valuing Rs. 149.8 millions of the Muslim Commercial Bank, held by the State
Bank of Pakistan were sold and the Bank’s management was transferred to the purchasers of these 26%
shares. Mian Mohammad Mansha is the Chairman of the MCB and has played instrumental role in
its success.

1.1.4 PRESENT POSITION OF MCB

MCB has significant contributions in building & strengthening both corporate and retail banking sector in
Pakistan. MCB Bank Ltd in 2009 delivered a profit before tax of Rs. 23.2 Billion registering a growth of
6% over last year. This growth is directly attributable to an increase of 14% in CASA deposits, 21% in
revenues and a tight control on expense base enabling to retain position as one of the most profitable
banks in the country.

In 2009, MCB delivered a superior return on equity of 27.4% and assets crossed the Rs. 500 Billion mark.
This performance is all the more remarkable keeping in view the economic & political challenges faced
by the country during this past year and miscreant created issues that MCB specifically grappled with for
a large part of the year. MCB fundamental belief is that a financial services company can only succeed if
it meets its customers’ needs. If they can understand customer’s financial objectives and offer them the
right products and services so that they can be financially successful, then MCB Bank will continue to
build on its leadership position and provide requisite returns to its shareholders. During 2009, MCB took
several initiatives that brought even closer to their customers. With the launch of MCB Privilege, MCB
became the first local bank to offer a dedicated proposition for the affluent segment; to meet the growth
and protection needs of customers, we introduced Bancassurance and Investment Products in many of our
branches; to enhance transactional convenience for customers, MCB became the first Pakistani bank to
launch mobile banking.These coupled with several other initiatives enabled us to continue on the path of
growing customer base and profitability. Last year, to expand and reach customer proposition, MCB also
reached an agreement with RBS Pakistan to acquire their business. Unfortunately, the deal did not go
through but bank continue to invest organically to further strengthen businesses.

1.1.6.REVIEW OF MCB

MCB Bank Limited, with more than 60 years of experience as one of the leading banks in Pakistan, was
incorporated on July 9 in 1947. The bank has journeyed remarkable tenure of more than half a century of
competitively edged and well positioned heights of success by deploying quality banking, heads on
technological developments, professionally leading management and prudent and ethical work
methodologies. MCB was nationalized along with other private banks in 1974 as part of Government of
Pakistan's economic reform movement and was later privatized to Nishat Group lead consortium in 1991.

Since privatization, MCB's growth has been phenomenal. Today, MCB in one of the largest foreign banks
in Sri Lanka, the first bank in Pakistan to launch Global Depository Receipts (GDR) in 2006, has strategic
foreign partnership with Maybank of Malaysia which holds 20% shares in MCB through its wholly
owned subsidiary Mayban International Trust (Labuan) Berhad since 2008, has international indirect
regional presence in Dubai (UAE), Bahrain, Azerbaijan, Hong Kong and Sri Lanka and serving through a
domestic network of over 1,150 branches and over 690 ATMs across Pakistan with a customer base of
4.96 million (apprx.)

MCB is reputed as one of the most sound financial institution and as one of the leading banks in Pakistan
with a deposit base of PKR. 545 bln (apprx.) and total assets of PKR 766 bln (apprx.). The bank is versed
as one of the oldest and most responsible banks in Pakistan and has played pivotal role in representing the
country on global platforms while being one of the few institutions that are recognised and traded in the
international market.

The bank has also been acknowledged though prestigious recognition and awards by Euromoney, MMT,
Asia Money, SAFA (SAARC), The Asset and The Asian Banker.
 1.1.7 OBJECTIVES
This internship offers me an incredible opportunity to gain real-world experience in the high-stakes
finance industry. The primary objective of the project is to forecast or determine the actual financial status
and performance of an organization

Following are important objectives of studying the organization:

To learn about Capital Adequacy, Asset and Liability Management,

Interest Rate Risk , Liquidity, Asset Quality & Profitability of bank.

To monitor the adequacy and effectiveness of the internal control

system and Financial Reporting Framework.

Assessment of the company’s financial condition through the financial statements.

Analyzing savings and investment trends in banking sector.

To describe the impact of financial decisions on the health and

functioning of the overall organization.

To examine the Innovations in customer service in banking.

1.2 NATURE OF THE ORGANIZATION
MCB Bank Limited is a banking company incorporated in Pakistan and is engaged in commercial
banking and related services. The Bank’s ordinary shares are listed on all the stock exchanges in Pakistan
whereas it’s Global Depository Receipts (GDRs) representing two ordinary shares are traded on the
International Order Book (IOB) system of the London Stock Exchange. MCB Bank Limited is a Pakistan-
based company. The Bank operates in four business
segments:

• Corporate finance
• Trading and sales
• Retail and consumer banking
• Commercial banking

1.3 NUMBER OF EMPLOYEEs

1.3.1 BOARD OF DIRECTORS

Mian Mohammad Mansha Chairman

S. M. Muneer Vice Chairman

Mr.Tariq Rafi Director

MR. Shahzad Saleem Director

Mr. Sarmad Amin Director

Dr. Muhammad Yaqub Director

Dato’ Mohammed Hussein Director

Mian Raza Mansha Director

Aftab Ahmad Khan Director

Mian Umer Mansha Director

Mr. M. Ali Zeb Director

Dato’ Seri Ismail Shahudin Director

Mr.M.U.A. Usmani (President / CEO)

1.3.2. KEY MANAGEMENT

Audit Committee
Members

Tariq Rafi – Chairman

Dr. Muhammad Yaqu

Dato’ Mohammed Hussein

Aftab Ahmad Khan

Muhammad Ali Zeb

Malik Abdul Waheed

HUMAN RESOURCE COMMITTEE

Members
Mian Mohammad Mansha Chairman

Dr. Muhammad Yaqub

Mian Raza Mansha

MR. Shahzad Saleem

Mr. M.U.A. Usmani

RISK MANAGEMENT AND PORTFOLIO REVIEW COMMITTEE

Members

Mian Umer Mansha Chairman

Mr. Tariq Rafi

Mr. Sarmad Amin

Mian Raza Mansha

Mr. Shahzad Saleem

BUSINESS STRATEGYAND DEVELOP COMMITTEE

Members
Mian Mohammad Mansha Chairman

Mian Raza Mansha

S. M. Muneer

Mian Umer Mansha

Dr. Muhammad Yaqub

Mr. M.U.A. Umani

Dato' Mohammed Hussein

COMMITTEE ON PHYCISAL PLANNING, IT SYSTEM AND CONTINGENCY

ARRANGMENTS

Members

Mr. Sarmad Amin Chairman

Mian Raza Mansha

Mr. Tariq Rafi

S. M. Muneer

Mr. M.U.A. Umani

SBP REPORT COMPLIANCE MONITORING COMMITTEE

Members

Dr. Muhammad Yaqub

Mr. Aftab Ahmad Khan

Mr. M.U.A. Umani

CHIEF FINANCIAL OFFICER

Mr. Salman Zafar Siddiqi

COMPANY SECRETARY

Mr. Abdus S. Sami

Auditors

KPMG Taseer Hadi & Co.

Chartered Accountants

Legal Advisors

Khalid Anwer & Co.

Advocates & Legal Consultant

1.3.3. STAFF STRENGHTH

2009 2008 2007 2006

Number of Permanent Employee 9397 10160 9721 9011

 1.4 PRODUCTS AND SERVICES
MCB provides following product and services to their customers

1.4.1 CURRENT ACCOUNT

MCB offers a variety of current account to cater everyday trancational needs of customers.these account
ensure ease and freedom to bank from any of 1100+ branches across the country.The different account
include: The Basic Banking Account which has no minimum balance requirement. Business Account
offering free online transaction,Demand Drafts, Pay order and lot more to meet day to day business
requirement. Current life Account that offers life insurance free of cost and for all other; Convential
Current Account.

1.4.1.SAVING ACCOUNT
MCB bank offer a wide array of saving products that suit short-term growth and transactional needs.Our
saving account offers attractive profit rates as well as fexible transact .Saving Xtra is targets for customers
having Rs 5 million + deposits and 365 Gold offers profit rates on daily balances with no minimum
balance requirements. In addition to unique product i.e. Smart Saving and Saving Maximizer are special
saving accounts run solely via debit cards and other remote banking channels offering a competive rate to
both high and low end savers.

1.4.2.TERM DEPOSITS
MCB term deposits offers attractive short to mid-term investment options
with felixiblity, convience and security.With various tenor available,customer
can choose one that suits their needs.This is combine with profit pay-out
options and the added facility of being able to avail credit facility against
their deposits

1.4.3.MCB ONLINE BANKING

MCB has a fast growing network of 1100+ online branches in the country
providing customer real-time online transactional facilities

1.4.4.MCB MNET
MNET is an electronic inter-bank connectivity platform for online
transactions on ATM and other remote banking channels. It offers other value
added services that include a portfolio of e-banking and payment system
products as well as management and day-to-day operations of the same.
Members include 10 local and foreign financial institutions enjoying ATM
sharing and value added services.

1.4.5.MCB CASH MANAGEMENT

Cash Management provides a wide range of value-added services to large

corporations through its vast network of online branches. Our structured and
customized products enable our customers to realize their sales proceeds
swiftly from all over the country, supported by real-time MIS. Cash
Management also provides payment solutions through MCB network,
dividend pay-outs, custodian banking and utility companies’ bills processing.

1.4.6.MCB HOME REMITTANCE

MCB Home Remittances offers unmatched services for overseas Pakistanis

to send money home FAST and FREE at no cost across Pakistan through
MCB’s large network of over 1100 branches. Money can be sent FREE &
INSTANT through our international send agents like Money Gram, Xpress
Money and many others. We also offer facility to Overseas Pakistanis to open
accounts in their home country through our “Motherland account”. This is
designed to allow transferring of funds to your family & loved ones through
your own personal account back home.

1.4.7.MCB CORPORATE FINANCING

MCB Corporate Financing provides access to diversified financing options,

including working capital loans, term loans, trade finance services and
investment banking.

1.4.8.MCB PROJECT & STRUCTURED FINANCE

MCB Project & Structured Finance involves financing complex projects,

usually in an SPV structure, where the loan is tightly structured around the
cash flows, risks are allocated amongst various stakeholders, and there is
limited or no recourse to the sponsors.
1.4.9.MCB SYNDICATED LOANS & DEBT CAPITAL
MARKETS

MCB Syndicated Loans and Debt Capital Markets involves arrangement,

underwriting and placement services for significant financing requirements
by large corporate and institutional clients to other financial institutions or
through the debt capital market

1.4.10.MCB ADVISORY SERVICES

Financial and Capital Raising Advisory provides our clients with financial
advisory services, commercial structuring support and access to capital
resources to help companies successfully finance their business/project.

1.4.11.MCB-ISLAMIC BANKING

MCB-Islamic Banking Group provides Shariah-compliant products and

services both on the liability and asset sides to various customers of all
demographic segments to cater a wide range of Working Capital, Capital
Expenditures, Trade Business and Consumer requirements. In addition to
existing Shariah-compliant IB products, Islamic Banking Group also provides
customized solutions to its valued customers for execution of complex
financial transactions. Furthermore, Islamic Banking Group also provides
Shariah advisory services in structuring of various syndicated transactions for
its valued customers. To facilitate its valued clients, MCB Islamic Banking
has also increased outreach of its dedicated Islamic Banking branches to the
tune of 27 in 14 cities across the country.

1.4.12.MCB AGRI PRODUCT

MCB is committed to the farming community to support their national

objectives of self-sufficiency and food security to the people of Pakistan.
Dedicated and specialized staff, supervised by the Agri Credit Division is ,

posted in lending branches to cater for strong business relationships and

facilitation. The bank’s extensive branch network in all the provinces and
diversified product range extends our reach of agri credit facilities.

1.4.13.OTHER SERVICES

MCB also provide other services other than describe above. These other
services are describe as below:

 MCB ATMs

MCB has one of the nation’s largest ATM networks with 682+ ATMs
covering 182 cities across the country and still growing. MCB ATMs
give you a 24-hour convenience of cash withdrawal, mini-statement,
utility bill payments, mobile top-ups, funds transfer services and much
more.
 MCB MOBILE ATM

Through our MCB Mobile ATM we allow for convenient world-class

banking services. Our innovative MCB mobile ATM van ensures that we
offer our services wherever you are, be it concerts, fairs or any other
occasion/special event.

 MCB LOCKERS

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

SIZE & RENT OF LOCKERS:

Size Rent Federal Exsice Duty

Small Rs.2500 16% (Rs 400)
Medium Rs.3500 16% (Rs 560)
Large Rs.5000 16% (Rs 800)

KEY DEPOSIT:

Key deposit is the security of bank for lockers.It is fixed i.e. Rs 3500.
It is returnable after customer close its locker.

 MCB VISA CREDIT CARD

MCB offers a complete suite of Classic, Gold and Platinum Visa Credit
Cards focusing on providing superior services, travel privileges and
shopping pleasures. It also offers comprehensive insurance and installment
plans, reward points and SMS alerts that give a different feel to the world of
credit cards.These unique features include i-revolve, which makes variable
mark-up rates available to customers allowing them to repay at affordable
rates.

 MCB FULL-DAY BANKING

Enjoy the convenience of extended banking hours from 9am to 5pm,

including Saturdays at MCB Full-Day Banking branches across the country.

 MCB Call Centre

The simplest way to bank is with the new enhanced 24/7 MCB Call Centre,
which blends innovation and convenience to provide banking services that go
beyond expectations. MCB Call Centre enables you to manage your VISA
Credit and ATM/Debit Cards, confirm account balances and view last 6
transactions, pay utility/mobile phone and MCB Visa Credit Card bills, topup
your mobile, transfer money within MCB network accounts and register
complaints. Most importantly it provides you with our very own banking
consultant to discuss your financial needs and requirements. Simply call at
111-000-622 and we’ll do the rest.

 MCB Mobile

MCB Mobile is a quick, easy and secure way to recharge mobile phones,
transfer money, pay bills and do much more. Visit the nearest MCB ATM or
call 111-000-622 to register and login to www.mcbmobile.com using your
mobile phone to start transacting
  MCB VIRTUAL BANKING

MCB Virtual Banking Service is a convenient way to access your account(s)

24/7. It is secure, free of cost and lets you do your banking whenever and
wherever it suits you. This service allows you to transfer funds, pay
utility/mobile bills, set up standing order instruction, download account
statement and much more.

SECTION:2
ORGANIZATIONAL STRUCTURE
CHART1: ORGANIZATIONAL HIERARCHY OF MCB BANK

CHAIRMAN

BOARD OF DIRECTORS

CHIEF EXECUTIVE/PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT PRESIDENT

OG-1 OG-2 OG-3

CLERICAL STAFF

NON-CLERICAL STAFF
 CHART 2: BRANCHES NETWORK OF MCB IN 2001
PRINCIPAL OFFICE

AREA OFFICE NORTH OVERSEAS BRANCHES

AREA OFFICE SOUTH

PUNJAB NWFP BALOCHISTAN

SINDH BAHRAIN SIR LANKA

10 2 CIRCLES 5 CIRCLES 1 CIRCLES

CIRCLES

25 7 REGIONS 12 REGIONS 1 REGIONS

REGIONS

710 199 262 38

BRANCHES BRANCHES BRANCHES BRANCHES
ES
 BRANCHES NETWORKS

BRANCHES NETWORK
IN DEC 2010

DOMESTIC OVERSEAS-08
OPERATIONS-1139

SRI LANKA- 05
BRANCHES-
1125
SUB
BRANCHES-09

BAHRAIN-01
PUNJAB-700

SUB
BRANCHES-04
EPZ-01
SINDH-251

SUB BRANCHES-
01

UAE-01
KHBER
PAKHTUNKHAWA-
110

BALOCHISTAN-40

AZAD KASHMIR-04
 2.DEPARTMENTS OF ALLAMA IQBAL TOWN BRANCH
(1354)
The departments are as under:

 General Banking Department

 Clearing Department
 Remittance Department

 Account Department

 Bannasurance Department

2.1 GENERAL BANKING DEPARTMENT:

2.1.1 CLEARING DEPARTMENT

Clearing means collection of cheques receive from our customers but drawn on other banks.Receiving the
instruments deposited by customers Posting the amount of instruments in credit of customer’s account If
cheque returns from the concerned bank, the customer account is debited. Crossing stamp is put on the
instrument and slip given to customer on receipt of the instrument. Clearing stamp and “payee account
credited” are put on the instrument and the voucher. Clearing House has provided this facility. Clearing
house facilitates different banks, in one city, to get their cheques drawn upon other banks to be cleared.

Cheques lodged in clearing constitute in clearing constitute two types of clearing:

 Outward Clearing
 Inward Clearing

 Outward Clearing

When cheques, TC’s and other negotiable instruments drawn upon other banks like NBP, ABN AMRO of
the same city (as Lahore) are presented in Muslim Commercial bank to deposit them in the respective
payee’s accounts, these instruments are lodged in outward clearing (o/w clg) of MCB bank.

Procedure of Outward Clearing

• The name of the branch appears on its face where it is drawn

• It should not stale or post - dated or without date.

• Amount in words and figures does not differ.

• Signature of the drawer appears on the face of the instrument.

• Instrument is not mutilated.

• There should be no material alteration, if so, it should be properly authenticated.

• If order instrument suitably indorsed and the last endorsee’s account being credited.

• Endorsement is in accordance with the crossing if any.

• The amount of the instrument is same as mentioned on the paying-in-slip and counterfoil.

• The title of the account on the paying-in-slip is that of payee or endorsee (with the exception of
bearer cheque).

• If an instrument received other than MCB of Pakistan then special crossing stamp is affixed across the
face of the instrument. Clearing stamp is affixed on the face of the instruments, paying-in-slip and
counterfoil (The stamp is affixed in such a manner that half appears on counterfoil and paying-in-slip).
The instrument is suitably discharged, where a bearer cheque does not require any discharge and also an
instrument in favor a bank not need be discharged.

Return Outward Clearing

 Over writing
 No stamp of clearing or if it is not clear
 No stamp of crossing or if it is not clear

 Inward Clearing

Inward clearing means cheques drawn on us and presented by other banks. In inward clearing Branch acts
as paying banker. After realization of inward clearing, banks deposits are decreased as bank makes
payment to other banks from the balances held by the branch. This realization of inward clearing is also
referred to as responding to the clearing. Cheques and other negotiable instruments instruments (PO, DD,
PS, CDR etc.) drawn on Muslim bank, sent by other banks, constitute the inward clearing of MCB.

Procedure of Inward Clearing

• Instruments with schedules are received from NIFT.
• Amount of each instrument entered is in inward clearing register.

• Instruments are detached and handed over to the deposits and other respective department for checking
and payment
.
• In case of any instrument is returned, return memo is prepared stating the reason of the return
.
• Entry is made in cheques Return register.

• Cheques return charges are recovered from the party as per charges schedule.
Checking / Return of Instruments

• Over writing
• No stamp of clearing or if it is not clear
• No stamp of crossing or if it is not clear

2.2.2 REMITTANCE DEPARTMENT

The Remittance department deals with the transfer of money from one place to another.Funds transfer
facility or remittance of funds is one of the key functions of the banks all over the world. Remittances
through banking channels save time, costs less and eliminate the risks involved in physical transportation
of money from one place to another. Muslim Commercial Bank of Pakistan transfers money in the
following ways.
Pay Order
Demand Draft
Mail Transfer
Telegraphic Transfer
Pay Slip
Call Deposit Receipt
Letter of Credit
Traveler’s Cheque

 DEMAND DRAFT

It is used for payment made outside the city. It is write on the name of head office. Accounting entry by
drawing branch. When the customer purchases a draft, the drawing branch sends the advice (a copy of
DD) to the drawee branch and the original copy of DD is given to the purchaser. On the arrival of advice
the drawee branch debits HO account and credits the DD payable account. When the customer comes
with the original DD to the drawee branch, his account is credited by debiting the DD payable account.
Charges Commission 50/- but if amount increase or decrease then it will also increase or decrease and
FED 8/- also increase or decrease.

 PAY ORDER

Payment Orders are issued for the money transfer with in the city. Pay order is made for local transfer of
money. Pay order is the most convenient, simple and secure way of transfer of money For Pay order form
is filled my customers. Charges are Rs 125 + 4% FED.

 MAIL TRANSFER
A Mail Transfer is a form of remittance in which the amount remitted by a customer or a non-customer is
directly credited to the account of the beneficiary with another branch. Move your money safely and
quickly using MCB Mail Transfer service. And MCB also offer the most competitive rates in the market.
They charges Rs 50/- exchange rate and RS 75/- postage charges on issuing mail transfer. When the
money is not required immediately,the remittances can also be made by mail transfer (MT). Here the
selling office of the bank sends instructions in writing by mail to the paying bank for the payment of a
specified amount of money. Debiting to the buyer’s account at the selling office and crediting to the
recipient’s account at the paying bank make the payment under this transfer.

 TELEGRAPHIC TRANSFER
Telegraphic Transfer is a form of remittance, which is advised by telegram, telex or fax. The fundamental
principles of such transfer are otherwise identical with the Mail Transfer. It is the message, which is sent
from one branch to another on the order of payer to payee through wire. It is one of the quickest means to
transfer fund through the use of telex/fax/internet or cable.

 TRAVELLER CHEQUE
This kind of cheque are use by customers during travelling. It is alternative to money.

 DEPOSIT SLIP
These slips are fill by customers when they deposit cheques or cash in the bank. Cutting is not
allowed on slips if cutting then sign of drawee is made on the place of cutting.

FORMAT OF SLIP

 Account Title
 Account No.
 Bank/Branch
 Cash/Cheque
 Amount in figure and word
 Date
2.2 ACCOUNTS DEPARTMENT
Opening of account is the most important department of the Branch as this is a contract between the
customer and bank. All future transaction/operation are carried out as per this contract and any deviation
may jeopardize the bank’s interest. The opening of a new account is the establishment of customer banker
relationship. By opening an account at a bank, a person becomes a customer of the bank. The customers
can open following accounts:
 Current Account
 Profit and loss sharing Account (PLS A/C)
 Company Account

Account Opening
When a client comes to the bank, and makes a request for opening of an A/C. The officer says that first
fill up a prescribed application form. If he/she wants to open a PLS A/C, then he/she has to fill a form
according to the account.

Requirements
ID Card of applicant
ID Card of father, mother, brother, sister, husband or wife
Student card (if applicant is student)
Two photos for illiterate person or those who use Urdu signatures
Source of Income (salary slip/salary certificate)

Documents Attach with A/C Opening Form

A/c opening form
Specimen signature card
Zakat form (for non-muslims)
Deposit slip
Requisition form

COMPANY ACCOUNT

MCB bank open various types of company account.These types are discuss briefly as below.

TYPES OF COMMANY ACCOUNT

 Sole Properiator
 Partnership
 Public Limited
 Private limited
 Clubs
 Association
 Trust (ENGO,NPO)

REQUIRMENT FOR SOLE PROPERIATOR

In addition to above requirement following documents are also require for opening sole properiator
account.

Two Letter Head of company

Company Rubber Stamp
NTN Certificate

REQUIRMENT FOR PARTNERSHIP

In addition to above requirement following documents are also require for opening partnership account.
Two Letter Head of company
Company RubberStamp
NTN Certificate
Partnership Deed Copy if registered than registration certificate

REQUIRMENT FOR PRIVATE LIMITED

In addition to above requirement following documents are also require for opening private limited
account.

List of Director
Board Rezolution
Memorandum Articles (company detail, agents, heads etc)
Form no.29 (registered director name & share detail)
Form A (authorization, director name, charted accountant)
Certificate of co-operation
Company Rubber Stamp
Imposed Stamp
Attested Memorandum, Forms by Security Exchange Commission of Pakistan (SECP).

REQUIRMENT FOR TRUST ACCOUNT

Trusts account requirements are same as of public limited account requirement but it involve TRUSTEES
instead of Director and MEMORANDUM ARTICLE is not require

ISSUANCE OF CHEQUE BOOK

After opening an A/C with the bank, the A/C holder once again makes a request in the name of bank for
the issuance of a cheque book. The A/C holder mentions title of A/C, A/C number, sign it properly and
mentions the no of leaves he requires.

NUMBER OF LEAVES IN DIFFERENT ACCOUNT/FOREIGN ACCOUNT

CHEQUE BOOK

ACCOUNT NO. of LEAVES

Current 50
Profit & Loss 25
Foreign current 25
Foreign Profit & Loss 10

MCB also issues cheque book of 100 leaves. This kind of cheque book are issues to large companies such
as LESCO and AL-KHIDMAT FOUNDATION PUNJAB.

MCB CARDS

 SMART CARDS

MCB Smart Card is the key that enables access to convenient banking services. Smart Card allows you to
manage your account, withdraw cash, transfer funds, pay utility and mobile bills, recharge prepaid
connections, register for mobile and internet banking services and much more. The convenience and
flexibility of MCB SmartCard will help you live a smarter life. It not only helps you manage your
expenses, but also eliminates undue interest on your day to day credit card transactions. Your balance is
always within your reach and you spend accordingly. MCB now brings MCB SmartCard -a secure and
convenient instrument of payment with unmatched functionalities. It provides 24-hour direct access to
your bank account. Charges for Smart Card is Rs 25000+ 16% FED

 VISA DEBIT CARD

Now MCB brings a secure, convenient and quick payment facility that enables you to do purchasing by
using your existing MCB ATM / MCB Smart Card as a DEBIT CARD. VDC Charges Rs 1200 and Rs
250 will return on first transcation BY LAW.

 VISA CREDIT CARD

MCB offers a complete suite of Classic, Gold and Platinum Visa Credit Cards focusing on providing,
superior service, travel privileges & shopping pleasure. It also offers comprehensive insurance &
installment plans, reward points and SMS alerts that give a different feel to the world of Credit Cards.
These unique features include i-revolve, which makes variable mark-up rate available to customers
allowing them to repay at affordable rates.

TYPES OF CHEQUES
There are three types of cheques. Below we describe these cheques briefly.

 Bearer Cheque
 Crossed Cheque
 Rupee Traveller Cheque
BEARER CHEQUE
These cheque can be drawn by anyone.There is no need of identification of account holder.

CROSSED CHEQUE
These cheque cannot be drawn by anyone. There is need of identification of account holder. On cheque
two lines are drawn on the left corner to make it cross cheque.

RUPEE TRAVELLER CHEQUE

These cheque are use by customer during travelling. It is alternative to money.

2.2.2 STOP CHEQUE PAYMENT

This stop payment is made when cheques are lost or any violation in the done
payment. Following are the requirement for stop payment:
 Form
 Check immediately whether use or not
 Cheque Status
 Charges 300+ 48 FED (Rs 348)
 Telly with stop cheque report

SECTION 3

3. WEAKNESSES OF THE ORGANIZATION

 Income / expense ratio decreasing from last three years its alarming situation for a bank
2007- 5.06
2008- 4.10
2009- 3.84

 The efficiency of banks can be measured through the use of the return-on-equity (ROE) ratio,
which shows to what extent banks use reinvested earnings to produce future profits. MCB (ROE)
decreasing consecutively from last three years.

 Profit before tax PBT/Total income ratio decreased from 63.30% to 55.91% in 2009.
 (ROA) return on average assets also decreased from 3.60% to 3.25% as compared to last year.
 (ROCE) return on capital employed decreased from 31.49% 2008 to 27.35% 2009.
 MCB poorly managing their operating expenses. Operating expenses before pension fund (PF)
reversal rose by 7.8% to Rs. 14.9B from Rs. 13.8B in 2008. Due to rising inflationary pressures
 coupled with additional expenditure on insurance and security companies, the administrative
expenses rose by only 8.4% to Rs. 14B in 2009.
 Borrowing from other financial institutions increasing from 22,664 to 44,662 in 2009.
 Cash dividend per share decreased from 11.50 (2008) to 11.00 (2009).

4. CONCLUSION

The banking system, as a whole, remains healthy despite the economy going through a period of
economic difficulty. The banking sector absorbed the build-up of non-performing loans in the system
while maintaining profitability and robust balance sheets. Much of the
credit for this must go to the SBP for the policies it has pursued over the last decade to ensure that banks
are adequately capitalized and adhere to prudent risk management. The objectives were targeted towards
customers, improved management policies, strong policy framework, improved governance structure,
strategic investment initiatives and
implementation of cost effective measure across bank. The group structure of the bank individually
worked hard in achieving the milestones under continuous monitoring and supervision of the senior
management and Board. The bank displayed extraordinary results in both financial and non-financial
terms. With the banking industry recovering at a steady pace since the 2007 crisis, MCB ensured availing
all possible positive opportunities and delivered substantial profits ensuring sound asset growth

Financial year 2009 MCB stood up to the challenges and produced significant increases in major areas of
its business while maintaining higher profitability, stronger asset base with corresponding increase in
equity. The sector also made positive recoveries while heading
towards its actual position prior to 2007 and 2008 financial market crisis.MCB registered continuous
positive performance, by delivering PBT of Rs. 23B and PAT of Rs. 15B, with a rise of 6% and 1%
respectively, over 2008. Interest Income increased by
29% to Rs. 52B over Rs. 40B in 2008 owing to increased volume and yields. Income earned on advances,
representing 70% of the total Interest Income, increased by 21% over Rs. 30B in 2008, to Rs. 36B in
2009. Interest Expense however, also simultaneously increased by
37%, owing mainly to the increased cost of deposits with interest expensed on deposits rising by 47% to
Rs. 14B in 2009. Despite this, due to larger proportion of Interest Income, the resultant Net Interest
Margin (NIM) of Rs. 36B significantly rose by Rs. 7B, 26% rise
over Rs. 28B last year The Bank's outstanding performance resulted in improved efficiency and
profitability ratios,stable market share, and attractive share price at the close of the year 2009 combined
with a
high Break-up Value (before surplus) of 88.37 per share.
Consequent to the average increase in balance sheet footing and equity of 12% and 16% respectively,
return on assets and return on equity were reported at 3.25% and 27.35% respectively.

5. RECOMMENDATIONS

Following are some of the suggestions and recommendations that I want to give on the basis of shortfalls
/ weaknesses found in the bank.
The target rate of return on assets (ROA) of commercial banks reflects the effectiveness and efficiency
of the use of resources is the embodiment of its operating efficiency and management level of the
important comprehensive index. Emphasis on return on assets, and continuously improve the return on
assets and achieve an operating profit maximization should be the primary objective of Muslim
commercial bank.
 A strong ROE is a solid signal that management is doing a good job of generating returns for
shareholders' investments. Active capital management activities will provide better ROEs. Bank that
manages larger reserves due to recent or future investment projects will stymie their ROEs. Another
determinant of the ROE is the operating profit margin of banks. Recently, this tends to converge towards
noninterest
income as net interest margins tend to cause net interest income to be
squeezed over time due to rising competition. Muslim Commercial Bank should enable to raise their
operating profit margins can smoothly enhance their ROEs.Loans with higher returns will produce better
profit opportunities. Alternatively, may diversify earnings through transaction and recurring non-interest
income activities. MCB’s can expand more differentiated products, such as wealth management and
insurance to improve their ROE position.
Profit before tax ratio 55.91% in 2009 which is 7% lower than in that of last year mainly on account of
higher administration cost and provision charge so MCB should control its interest expenses.
The Bank's controlled budgeting and diligent monitoring on operating expenditure block. Effective
monitoring at management level ensured managed increase in administrative charge within the approved
budgetary limits.
Borrowing from other financial institutions increasing from 22,664 in 2008 to 44,662
in 2009 and deposits decreasing the bank should develop strategy, employs the
policy and emphasized to increase deposits reserves that enable to reduce borrowings.
MCB’s lead over rivals if they more emphasis on its aggressive investment strategy and capital
strength, the investments may bolster MCB’s.
MCB Bank Ltd Pakistan’s largest lender by market value should plans to expand overseas and add
branches and employees at home even as economic growth slows after the worst floods in the nation’s
history. Increase staff as it expands tradefinancing, remittances management and mobile-banking
operations.

Better managed expense-to-income ratios will then produce higher operating profit margins. Banks
that use capital more efficiently will have better financial leverage and thus, higher ROEs. A higher
financial leverage multiplier would show that banks are able to leverage on a smaller base of stakeholders
funds to produce interest bearing assets that optimize earnings.
Efficient cost-control procedures may limit the growth of operating expenses leading to higher
operating profit margin. Banks poorly managed their operating expenses.

Further improvement may be necessary to enhance ROE development.

MCB Islamic Banking needs a research, which should be engaged in evaluating and interpreting the
ways in which the bank can flourish more and more.
In Agriculture loan Sector, MCB mainly serving in Punjab province. Agriculture loans facility should
be provided to all other provinces of Pakistan as well.
The bank should emphasis on the organization of effective training and development programs for its
new as well as existing employees so that these are gradually updated regarding the recent developments
in the field of banking.