MCB Report 1
MCB Report 1
MCB Report 1
ON
Instructed by:
Presented by:
Muhammad Hussain
MBA-A
Roll No.65
Semester 3
2
1. Preface
2. Introduction Of Bank
3. Types of Bank
5. History of MCB
7. Commercial Bank
18. Findings
19. Recommandations
4
PREFACE
Banking sector owes a pivotal importance in the economy of any country through
its variant functions. This basic motivator that stressed me to join any bank for
Internship Training. Moreover, the experience and practice learned during this
tenure also prove very helpful and facilitating in the forthcoming professional life.
This report is the result of two months Internship will, Muslim Commercial bank,
Kot Fareed, Sahiwal. The motive behind selecting this bank is that it is one of the
Top 10 Asia, Bank‘s. The fact remains that Muslim Commercial bank, posses an
excel/cut and historical importance being the most senior and leading in terms
fluids and services to Pakistan at all ages of life.
I had with the strong belief that this report will guide and facilitate the readers to
understand the functioning of banking system and more importantly have good
knowledge about Muslim Commercial bank. My utmost efforts to elaborate this
report wit, material read, listened and observed. Yet, I feel that this period was
not long enough to learn and understand the complex and widespread
functioning of banking sector.
I am really thankful to the entire staff members of the aforesaid branch for the
friendly and cooperative behavior during my internship.
Muhammad Hussain
MBA-A
Roll No.65
5
DEFINITION OF BANK.
I BROADLY SPEAKING
“Banks draw surplus money from the people who are not using it at that time, and
lend to those who are in a position to use it for productive purposes.”
2 IN OTHER WORDS
“Bank also accepts the deposits from public repayable on demand or otherwise
and withdrawal by cheques. Drafts order and include any post office saving
bank.”
BANK.
6
PEGETS DEFINITION:
no one anybody. Corporate or otherwise can be a banker who does not:
I Open current account
2 Pay cheques drawn on him
3 Collect cheques for his customers.
HARTS DEFINITION.
“A hanker is one who is in the ordinary course of his business, honors cheques
drawn upon his by persons from and for whom he receives money on current
account.”
“Banker means a person transacting the business of accepting, for the purpose
of lending or investment, of deposits from the public, and withdrawal by cheques,
drafts, order of otherwise, and inclined any post office saving banks.”
IMPORTANCE OF BANKING.
Banks play very important role in the economic life of a nation. The growth of the
economy is dependent upon the soundness of its banking system. Although
banks so not create new wealth but borrow, exchange and consume. These
make generation of wealth. In this way. They become most effective partners in
the development of that country. To encourage the habit of saving and to
mobilize these savings is its basic purpose. Banks deposit surplus from the
public and then advances the surpluses in the form of loans to the industrialists,
agriculturists, businessmen and unemployed people under different schemes so
that they setup their own business. Thus banks help in capital formation
if there are no banks, and then there would be concentration of wealth in few
hands great portion of wealth of a country would be idle. In the fewer developing
countries rate of saving is very low and due to this rate of investment and rate of
growth is very low. We can take hank just like a heart in the economic structure
7
The Indian society was quite familiar with the banking, right for the beginning.
There is also sufficient evidence to show that during 51h century people were
accustomed to use 1-lounds as a credit investment. Loans were given to the
people against personal and other Securities such as ornaments, goods and
other immovable properties.
TYPES OF BANK:
I. COMMERCIAL BANK:
The banks in any country speeded over with an objective to get the excessive
money Form the public in the form of deposits and providing finance to the
investors. These Banks are in the ground for profit earning motive and in
competition with each other. These banks are providing the basic services to the
customers in the form of deposits, Advances, remittances and others.
Mobilization of Resources:
The commercial banks are the most efficient organization of the economy in the
mobilization the resources and making a profitable pool of these resources.
Taking the Money from the savers and lending it to the investors is the most
prominent job of the hank
9
The banks and other financial institutions advance loans for the development
projects that enhance the pace of overall development of the country. These
advances are made in both public and private sectors for the purpose of
achieving a good and strong economic field to catty on the other activities of
trade and business.
Capital formation is done by the act of accepting people’s money and putting into
Profitable ventures. This money so accumulated, make possible the availability of
the needed capital by the investors. The investors on the other hand are able to
get the needed funds that shortfall their requirements.
Planned Development:
With the help of well-organized banking sector the government is able to make
good Implementation of its economic planning and can execute developmental
activities for the welfare of the society.
There are persons who have money but cannot put them in profitable use. The
banks attract these persons by offering a variety of accounts. They provide them
not only the safety of the funds but also higher returns on them. The banks, in
this way, promote the habit of saving among the people.
With the help of a good banking system in the country the government and the
central Banks regulate the monetary supply and demand of the money. A good
system helps in the implementation of the policies that are formulated by the
10
The banks help in bridging the country. The surplus fund of on Region is sent to
the centers of deficit. The less developed areas acquire funds, put them into
productive channel and increase production. The banks help in a balanced
growth the economy.
Executive Summary
CORPORATE PROFILE
Tariq Rafi
Shahzad Saleem
Sarmad Amin
Aftab Ahmad Khan
Atif Yaseen
Dr. Muhammad Yaqub
Mian Raza Mansha
Board Committees :
Audit Committee
11
HR Committee
Mian Muhammad Mansha Chairman
Credit Committee
Shahzad Saleem Chairman
Company Secretary
Abdus S.Sami
Auditors
Legal Advisors
NATIONALIZATION OF MCB
14
PRIVATIZATION OF MCB
The previous Government declared the privatization policy as one of its main
objectives and in accordance with its policy, the Government offered Muslim
Commercial Bank Limited for privatization. The Bank was the first Public sector
bank, which was privatized on 2nd April 1991. The Government of Pakistan
transferred management of the bank to Private Industrialists and Entrepreneurs,
"National Group" by selling 26% shares of the Bank at Rs.56 per share.
Present Status
Over the years Muslim Commercial bank fostered strong bonds with its
customers. MCB understands them; their needs. They feel comfortable with
MCB; its their bank; it responds to them; listens to them; partners with them;
grows with them. That is why it is one of the leading commercial banks of the
country, providing a wide range of modem banking services. At present, the
banking network consists of over 1000 branches along with – controlling offices
known as Area Head offices and Regional Head offices. These controlling offices
are responsible for the smooth operation of the bank on National & international
levels. The entire financial and operational objectives are achieved with the
Human Resources strength over 12000 employees. The bank is known as the
major credit provider, best place of working and paymaster in the financial
(money market) of the country. Over the past few years, MCB's profits have been
hit by the need to increase provisions coverage and restructuring costs
associated with the downsizing of the workforce and branch network, whilst there
is some need to boost provisions, these charges (necessary to bring the bank
15
The banking sector has been worst hit by the external account crisis that
Engulfed the country following the nuclear tests. Due to the nature of banks as a
Medium for debt transactions the country's technical default and subsequent
rating downgrade impacted them the most. Those core concerns are still not fully
alleviated in the view of the investors. The closest that investors have come to
rating was back in the fourth quarter of the year 1999, and this led to MCB
climbing to Pakistani rupees 56 per share. Resumption of the IMF funding and a
possible rescheduling of bilateral debt will positively impact the banking sector
and especially MCB.
State Bank of Pakistan continued the process of Banking Reforms, which
included strengthen of Prudential Regulations and focus on recovery of defaulted
loans. In 1999 return on Government Savings Scheme and Treasury Bills was
reduced, which led to a lowering of lending rates, resulting in erosion of margins
for banks but it is likely to give a boost to economic activity.
Corporate Banking Group of MCB is focusing on top tier local corporate groups
and multinationals in a structured and focused manner building relationships
leading to increased market share.
Vision Statement
Mission Statement
COMMERCIAL BANKING
CONSUMER BANKING
The Consumer Banking Group focuses on the lower end of the market and micro
credit. Individual customer needs are being serviced through the introduction of
diverse lifestyle consumer loans and introduction of new products and
partnerships with service providers. Customers will continue to use the extensive
branch network, which in turn will generate deposits to feed the asset
development and liquidity requirements of the Bank through its diversified and
stable deposit base.
ATM TECHNOLOGY
18
At MCB, technology has a direct relationship with the needs of the customers, it
is a mean of creating value and convenience for the customer. Over the last few
years MCB has invested heavily into strengthening its technology backbone.
Today it is leading the way in banking technology and setting new standards for
the banking industry, penetrating into the local market, listening to the needs of
the people. MCB’s strength lies in providing technological base at a grass root
levels of the society with a challenge to educate and assimilate such systems
across vast cultural and economic backgrounds. With over 768 automated
branches, 243 online branches, over 151 MCB’s 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.
Additionally in order to enhance the utility of the ATM services they successfully
linked their ATM network to the MasterCard, Cirrus and Maestro, effectively
becoming part of the largest ATM network in the world. MasterCard and
Cirrus/Maestro users can now access their ATM's network. Together with the
above MCB made a strategic decision to establish an ATM switch and open their
ATM network to other banks. The ATM switch has been named MNET. It has
following banks in MNET switch:
Standard Chartered
Citi Bank
MCB ATM SERVICES
With an ever growing number of ATMs operating across the nation, the MCB
19
So go ahead! Use your MCB ATM 24- Hour Cash Card day or night, at home or
abroad.
MCB ATM Regular Card
The MCB ATM Regular Card allows withdrawal of up to Rs. 10,000 per day and
a maximum of 3 withdrawals per day per card.
Mnet
MNET enables all the member banks to share their electronic networks. Which
means customers of member banks can use MNET as well as 1-Link ATMs
Nationwide. MNET member banks ATM machines accept cards issued by MCB
Bank Ltd, Citibank, Standard Chartered, HSBC, Saudi Pak Bank Limited, Habib
Metropolitan Bank, JS Bank, Deutsche Bank, SME Bank, Arif Habib Rupali Bank
and First Women Bank. MNET customers can use over 600,000 ATMs worldwide
that carry the logo and shop at over 5 million outlets that carry the logo.
M-Net switch has currently 612 ATMs in 50 cities. We plan to have the network
grow in faster pace in future as MCB itself will be adding more ATMs by the end
of the year. The ATM deployment has been planned in such a manner that a
customer will be only a few minutes away from an ATM in major cities. This
coupled with geographic coverage provides the largest convenient spread in the
country, because of which we are very strongly concentrating on Diverse
Coverage & Convenience.
M-Net Switch ATMs are present in all the major cities of the country. They are
available in the hilliest and northern areas of the country such as Murree,
20
In Pakistan, the ATM facilities can be availed at any of the following locations:
In view of Goals established through mission and vision statement, the first step
taken was to change the corporate image of the Bank, which inclined following
aspects:
Which signifies the growth and prosperity? The change of logo was part of effort
to change image of the Bank as a progressive bank in the minds of people of
country.
21
MCB Mobile Banking service is available to all MCB ATM cardholders, 24 hours -
365 days.
24
A Free Service
MCB Mobile Banking is a free service for MCB account holders who have an
ATM card. All you pay for is the cost of an SMS message if charged by the
service provider.
MCB lockers- The best protection for your valuables. Lockers of different
capacities are available nationwide.
Pyara ghar- Flexible and competitive home financing facility with options of
home purchase, construction and renovation.
MCB car cash- Car financing and leasing at competitive rates with flexible
options.
Largest ATM Network- of 100 ATMs connected to worldwide ATM network of
about 350,000 ATMs along with Cirrus and Maestro facility enabling MCB ATM
card to be used All over the world & anywhere in the country.
CUSTOMER SATISFACTION
25
Bank also started an ongoing process of Branch face lifting creating a better
congenial environment for its customers. In order to be more customers'
conscious, MCB started a very effective and timely action system on Customer
Complaints
Departments in MCB
President
(M. Aftab Manzoor)
Legal Group
Corporate Corporate Corporate
South Central North
Raheel Ijaz
Bank Operation Group (GM)
Commercial Banking-North
Commercial Banking-South
30
MCB is in it’s over 50 years of operation. It has network of over 1,100 branches
all over the country with business establishments in Bangladesh, Sri Lanka and
Bahrain. The branch break-up province wise is Punjab (57%), Sindh (21%),
NWFP (19%) and Baluchistan (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 The Consumer Banking of
MCB provides customers with innovative saving schemes, products and
services. The ATM network of MCB is the largest in Pakistan and the Pak Rupee
Travelers Cheques are market leaders. MCB was the first to introduce the Photo
Card with the launch of the MCB MasterCard.
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.
MCB looks with confidence at year 2002 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".
Corporate Banking
Corporate Platforms have been established in the three principal cities where
teams of dedicated Relationship Managers have been posted. These
Relationship Managers have been entrusted with the complete responsibility for
managing the risk of their allocated portfolios, acting as allusion between the
customer and the bank, and providing you with the entire range of
products/services offered by the bank.
The products/services of the Corporate Bank are broadly divided into the
following categories:
The working capital loan includes Running Finance, Cash Finance, Export
Refinance, Pre-shipment and Post-shipment etc.
Term Loans:
Offer Short to Medium Term Finance to meet capital expenditure of the customer
business needs.
Trade finances services that include an entire range of import and export
activities including issuing Letters of Credit (L/Cs), purchasing export documents,
providing guarantees and other support services.
Cash Management:
The network of about 1100 branches in Pakistan enables the bankers to collect
and disburse payments efficiently with the MCB cash management services. This
also enables. the bankers to offer the customer’s choice of paper based or
electronic fund transfer solutions including collection amounts, rose branch on-
line transactions etc.
33
Private Placements
Debt/Equity Underwriting
Term Finance Certificates
Loan Syndication
Arrangement of Non- Fund Facilities
Mergers and Acquisitions
Financial Highlights
The results for the year 2001 are reflective of sustaining all-around efforts over
the few years, to maintain profitable growth along with prudent and proactive risk
management and expansion of product range of customers.
Pre-profit for the year 2001 was Rs.2.10 billion as against Rs.1.32 billion in 2000-
a healthy increase of 59%.
The balance sheet footings have increased to Rs.187 billion from Rs.175 billion
primarily based on deposit growth. Deposits have registered a substantial
increase of 14% and stand at Rs.154.5 billion in 2001 as against Rs.136 billion in
2000. Despite of low PLS deposit rates, branch network has shown a
commendable performance by increasing and managing the deposit mix. This
has been possible by improvement in customer services and targeted sales of
products like ATM cards.
Leadership in ATM’s: With around 100 ATMs and 170 online branches, MCB is
again an undoubted Indus leader with connectivity extended to 16 cities of
Pakistan. In the year 2002 further ATM will be deployed and connectivity
increased to other cities. MCB ATMs not only serve 24-hour cash convenience
but also improve on the counter services and turn around time at cash counters.
The MCB ATM Master Card with Maestro and Cirrus networks has become a
global service furthering the convenience to our customers. Traveling customers
35
The MCB ATM Switch - MNET is now operational. IT GROUP of MCB has been
able to create the largest network for secure electronic financial transactions in
Pakistan. Local branches of six international banks are connecting to this
network. This will enable participating banks to use each others' ATMs resulting
in an increased convenience to MCB customers and customers of other banks.
The IT Group is currently expanding the network capability to provide the
customers access to banking through
multiple electronic channels.
American Express Bank enters into an ATM sharing alliance with Muslim
Commercial Bank:
Muslim Commercial Bank Limited and American Express Bank Ltd. signed a
Memorandum Of Understanding creating a mutually beneficial alliance, which will
enable customers of American Express Bank to use ATM facilities offered by
Muslim Commercial Bank. Mr. Taufiq A. Hussain, Country Manager, American
Express Bank Ltd., Pakistan in a simple ceremony in Karachi, signed the MOU.
MCB has setup an ATM Switch called MNET and American Express Bank is the
fourth foreign bank to sign the sharing MOU.
Speaking at the ceremony - AEB Country Manager said, "Customer service
quality is the cornerstone of AEB's philosophy and this initiative will significantly
enhance our customer service capability for our consumer banking clients". He
added "After having considered various routes to acquire this capability AEB
selected MCB as an ideal partner keeping in view the large network capability
and long standing relationship with MCB".
MCB with a network of over 1000 branches in the largest private sector bank of
the country. The Bank is a market leader in 24 hour banking convenience with
36
CITI bank and Muslim Commercial Bank sign ATM sharing agreement:
Muslim Commercial Bank and CITI Bank signed an ATM sharing agreement
today. By the middle of this year, both Banks’ customers will be able to use the
services of either Bank's ATMs. Seen at the signing ceremony are Mr. Haroon
Basheer Sheikh, Head of Consumer Banking and Information Technology - MCB
and Mr. Nadeem Hussain, General Manager Global Manager Global Consumer
Banking – CITI Bank Pakistan with their respective team members.
To avoid frauds
Safe guard against unintended overdrafts
To avoid negligence
To replay inquiries against clients
To comply with Prudential Regulations/Laws
There is a specimen signature card with the bank on which the signature of
account holder is to be taken while opening of his account. And then he is issued
with a cheque book.
It is advised that one must keep his cheque book under proper care but there are
cases that people sometimes lost their cheque books. In that case there is an
application form in the name of manager is available and the customer who
wants to get a new cheque book fills that form and gives it to the manager then
he is provided with a new cheque book. In other case a requisition slip is present
in the cheque book and whenever the customer wants a new cheque book he
simply fills that requisition slip and presents it to manager and gets a new cheque
book.
\
40
Address:
Enter the complete residential/business address. Within the brackets you may
also provide prominent address identification marks for ease of physically
locating the address.
Contact Number:
Enter home, official, mobile, fax numbers and e-mail address (if available).
41
The bankers considered the following points while opening the accounts:
Remittances Department
The next department I worked in is Remittances department. The incharge of this
department, Mr. Khalid told me that there are four kinds of remittances they deal
in:
Telegraphic Transfer
Mail transfer
Demand Draft
Pay order
Another task of this department was to issue the traveler cheque and to give the
ATM card numbers.
Here is a little detail of all of these works:
Telegraphic Transfer:
It is a facility provided by the bank through which a customer can send or transfer
any amount immediately. The procedure for the customer is simple. And more
importantly the person who wants to transfer the funds may not have the account
in the bank even then he can avail this facility. The procedure is like this, a
customer walks in and fills an application form named as “APPLICATION FOR
REMITTANCE” in which he mentions the bank to which he wants to transfer the
funds also the name of the payee, his account number, also he has to mention
his own address etc. then there are charges for this special facility provided by
the bank and the bank receives these from the person who is sending the funds.
42
The ordinary TT reaches to its destination after two days of its dispatchment
whereas simple TT reaches to its payee immediately because the payee branch
is informed immediately through telephone and fax.
For ordinary TT only two vouchers are prepared:
Commission Voucher
Postage Voucher
Whereas for TT three vouchers are prepared:
Commission
Postage
Telephone charges
In the application form of TT there are two options available for the person who is
sending the funds i.e whether the payees account is credited for the same
amount or payee is simply to receive the payment in hand.
Documents Prepared:
Another task of the accounts department is to give the customers the ATM card
number. The procedure is like this that when a customer applies for the ATM
card, he is given a certain time to collect the card. On due date the customers
gets his card from manager and for safety purpose the ATM number remains
with the account department and the customer gets his number from there.
Traveler cheque
In account deptt there are two people working. One’s job is to issue the traveler
cheque and the other is suppose to make the payment of TC. This work is
separated for the purpose of safety and to prevent the frauds.
When RTC is issued it is written in Traveler cheque register and when it is paid it
is posted in MBIS. Traveler cheque register is used to maintain the stock of
RTC’s.
When RTC is issued HO RTC deptt. Is credited and when RTC is purchased it is
debited.
One of the person has the complete register of staff’s salary he maintains a staff
salary register.
The remittance facilities of the MCB are according to the need of the customer.
Your beneficiary will receive the amount even if he/she does not have an MCB
account. The Remit Express facilities the MCB can be avail in the following
Bank/Companies:
44
Procedure of issuance:
The customer wants to make the DD fills in the same form or application i.e of
remittances in which he mentions the DD, the beneficiary’s name, the place, the
mode of payment i.e, whther he wants the payee to receive the cash, cheque or
debit his account, signature and his name and address
Check the application form.
Commission is charged as per bank policy. Also excise duty & withholding tax
are recovered as per applicable rates.
Entry is then made in DD issued register. In the DD issued register, separate
folio is allotted for each drawee branch and a serial control number is applied.
The entries made is DD payable account is credited and cash is debited and
when the payee receives the cash against DD, DD payable account is debited
and cash is credited.
On receiving the application for cancellation in writing along with original DD the
signature of the applicant is verified This signature should tally with the signature
on DD application form. Then cancellation is marked in DD issued register and
the drawee branch is Informed about cancellation.
PAY ORDERS:
Pay order is a kind of instrument issued and paid in the same branch. It is
normally issued for payment in the same city.
The customer fills the remittances application form and mark check on pay order.
On receiving application he is issued with a pay order after receiving charges. All
pay orders are crossed i.e “Payees a/c only”
On receiving application for cancellation of pay order along with the pay order, it
is cancelled and cancellation charges are recovered.
If the payment of pay order has not yet been made a duplicate copy of it can be
made on receiving application from the customer. The duplicate charges are
recovered from customer.
46
Clearing Department
CLEARING:
Clearing House:
In past State bank was indulged in clearing function i.e for the settlement of
mutual obligations of different commercial banks. As all banks have their
accounts and keep a certain percentage of the cash deposits as a reserve with
Central Bank, it become easy to set up their mutual obligations by off-setting their
accounts.
The claim of banks against each other is settled by simple transfers from and to
their accounts. These methods of settling accounts though the central bank,
apart from being convenient is economical as regards the use of cash since
account are adjusted through accounts, there is usually no need for cash.
At present this function of state bank is performed by NIFT. And now clearing
house is a place where NIFT’s representatives of all scheduled banks sit together
and interchange their claims against each other with the help of controlling staff
of State Bank of Pakistan and where there is no branch of State Bank of Pakistan
the designated branch of National Bank of Pakistan acts as controlling member
instead of State Bank of Pakistan.
47
Advantages of Clearing:
♪ As clearing does not involve any cash etc and all the transaction takes
place through book entries, the number of transactions can be unlimited.
♪ As major payments are made through clearing, the banks came manage
cash payments at the counters with a minimum amount of cash in vaults.
♪ A lot of time, cost and labor are saved. Since it provides an extra service
to the customers of banks without any service charges or costs, more and
more people are inclined and attracted towards banking.
48
All the cheques and negotiable instruments must be properly stamped and
suitably discharged
The State Bank of Pakistan debits the account of each member of the
clearinghouse with the proportionate working expenses incurred on the
operation of clearing house. These expenses are very nominal.
All the scheduled banks which are the member of clearing house, must maintain
accounts with SBP, by debit and credit to which the clearing settlements are
made. If on a particular day, a bank delivers Cheque and other negotiable
instruments worth more than the total amount of Cheque received by it that
banks account with State Bank of Pakistan will be credited with the differential
amount. If on the other hand the total amount of Cheque and other negotiable
instruments drawn on a certain bank by other banks is more than the total
49
The Cheque delivered to the other banks through NIFT’s representatives for
clearing are called outward clearing; whereas Cheque received from the
representatives of other banks for payment are called inward clearing.
Presume that MCB got the Cheque, which are drawn on UNION BANK, UBL and
ACBL for amounts Rs.50,000/-, Rs.30,000/-, Rs.15,000/- respectively, its total
being Rs.95,000/-. It means that this amount is to be credited to MCB A/c with
S.B.P. On the other hand the Cheques drawn on MCB are from UNION BANK,
UBL & ACBL of Rs.15,000/- Rs.75,000/- and Rs.30,000/- respectively, its total
being Rs.1,20,000/-. It means that this amount is to be debited from MCB A/c.
The difference between Rs. 95.000/- credit and Rs.120.000/- debit is Rs.
25,000/- debit, which means the house, is against MCB for Rs. 25,000/-.
MCB has to receive Rs.50,000/- from UNION BANK and to pay Rs.15,000/- to
UNION BANK so difference is Rs.35,000/- credit.
MCB has to receive Rs.30,000/- from UBL and to pay Rs.75,000/- to UBL so
difference is Rs.45,000/- debit.
MCB has to receive from ACBL Rs.15,000/- and to pay Rs.30,000/- to MCB so
difference is Rs.15,000/- debit.
The State Bank of Pakistan maintains two major books for clearing house
purpose :-
HOUSE REGISTER.
This book contains the information about the amounts and number of cheques
received and delivered by each bank is noted down. Its columns are just like our
clearing house-page.
This book contains the amount and number of cheques received and delivered
by each bank as well as the amounts which are to be received and paid to
respective banks through their accounts by State Bank of Pakistan is written
down. This book has the following columns:-
Nam To
To Pay No. of Cheques Receive
Initial e of Receive Initials
Amoun Received/Delivere d
s Bank d
t d Amount
Amount
Both sides of this book are balanced. Vouchers are prepared from the slips
received from the respective banks and the amounts are compared with this
balance book.
The name of the branch appears on its face where it is drawn on.
It should not be stale or post dated or without date.
Amount in words and figures does not differ.
Signature of the drawer appears on the face of instrument.
Instrument is not mutilated.
There should be no material alteration if so, it should be properly
authenticated.
If order instrument, suitably endorsed and the last endorsee's account
being credited.
Endorsement is in accordance with the crossings if any.
The amount of the instrument is same as mentioned on the paying-in-slip
and counterfoil.
The title of account on the paying-in-slip is that of payee or endorsee (with
the exception of bearer cheque).
52
However the amount is kept in float till final status of various instruments is
known from respective paying banks in second dealing.
53
These are the cheques returned unpaid to us, which were lodged by us in
Outward Clearing.
Suppose all cheques received in the inward clearing are passed and later on it is
found that a cheque should have been returned. In such cases, we contact the
collecting branch and request them not to make payment against the proceeds of
54
To balance the cash-cum-day book we may debit Suspense A/c Sundry Debtors
with the approval of the manager. When the payment order is received, it is
lodged in clearing and the Suspense A/c -Sundry Debtor is adjusted accordingly.
SPECIAL CLEARING:
Bills Collection:
The bills collection is the key department in each and main branch. The objective
of this department is to receive the cheque of different bank of different area.
Often the cheque is drawn to the customer of another bank or account holder of
the MCB and similarly the customer of another bank draw cheque to MCB
account. In both cases the cheque is cleared, endorsement conformed, or takes
the disbursed guarantee. And then deposit to the corresponding department or
banks or whatever the case may be.
55
STRENGTHS
WEAKNESSES
Opportunities:
Leasing sector is growing in Pakistan for the last two to three years which
provides opportunity to MCB to go ahead in this area as well.
MCB is providing Consumer Finances at comparatively lower rates which
paves a way to grab more customers
Financing to small/medium cottage industries will definitely increase its
advances and profitability as well.
58
THREATS
Other private commercial bank with sound profitability is also a threat to
MCB e.g. UBL, Alfalah, HBL etc.
For the last of many years, Pakistan is facing economic and political
instability which is a big threat.
Afghan war and Iraq war has a deep effect on the economy of Pakistan,
which may affect MCB.
Foreign banks are flourishing in field of consumer financing.
People don’t prefer banking culture. They mostly prefer cash transactions
59
Work Performed By Me
I joined Muslim Commercial Bank, Kot Fareed Branch, Sahiwal 18 th July 2008.
First day I reached there at 9’O clock and reported to manager who introduced
me about the functioning of the branch and its staff. During these two months I
worked in different sections of the branch to learn the maximum practices of
banking system.
GENERAL BANKING
First of all, I was asked to work in different sections of General Banking. Here I
was attached Mr. Ayaz Ahmad who has good command on this section. Here we
dealt with new customers who wanted to get information about the branch and
will to deal with the branch. This is a very interesting department because here
we met people of different types and deal with them accordingly.
In this section, I observed the following functions:
CHEQUE AT COUNTER.
A cheque is presented on the counter with the two signatures of the bearer on
the back of the cheque. Operation’s manager verifies the following points:
The cheque number
Cheque Date
The cheque signature with the signature specimen card position in the officer
signature
received at the time of opening the customer’s account in the presence of the
officer
Cheque amount in figure and words
Branch stamp in the front of the cheque
Check the nature of cheque, bearer cheque, cross cheque etc.
A demand draft is provided to the client in whom he has to specify that on which
bank it is drawn. The amount both in words and figures is written on the demand
draft.
It is most important and interesting department. This section deals with the
transfer of money from one branch to another branch. Nearly six drafts issued
daily from this department.
Here I know the amount transferred and what is the procedure. This department
also deals with T.T. transfer of money. I worked nearly three weeks in this
department.
DEPOSIT DEPARTMENT.
Deposit department deals with current, saving fixed accounts for a long period.
In current account the bank does not offer any interest you can deposit or
withdraw any amount during banking hours. In PLS account we can only
withdraw up to Rs. 25OOO/ without notice if you want to withdraw more than a
notification must he given to the bank. In Fixed account people normally of old
age are more interested because they get a lump sum amount every month as a
markup or interest. These accounts are normally for two to five years.
CLEARING DEPARTMENT.
N
ormally which we study the performance of Muslim Commercial Bank it is
considered that on the whole bank is contributing a lot towards the
industrial development and capital formation in the country. As it is
exhibited from the data regarding the banks financial performance as shown in
this report that the bank is sharing major banking business of the country. Further
the policies and schemes as are introduced and carried on by the bank are of
great source of help in industrial and trading growth. All these things reflect the
great and valuable efforts on the part of executive command of the bank which is
finally responsible for the productive performance of the bank. But as it is said
that nothing is perfect in this work. This might stand true in the case of Muslim
Commercial Bank also.
So far as my own observations are concerned. I have concluded a major
drawback in the inner current banking system. In addition to the I have also learnt
some disciplinary wrong practices on the part of staff of the bank branches.
NO QUALITY IN ATTITUDE.
The attitude of the bankers with all of their customers is not the same, they pay
more attention and good service to some of the customers and neglect a major
portion of them. Some of the customers approach to the bank officials and get
their work done before others; it is not a good practice.
NO PROPER GUIDANCE
There are so many customers who don’t know how to fill cheques, pay-in-slip,
application form, etc. They waste a lot of time of the bank stall.
RECOMMANDATIONS
62
Bank should make a plan to gear up its recovery efforts on war footing and
reorganize the recovery function of global bases. In addition, bank should tighten
up control on
expenditure.
PROPER GUIDANCE.
Bank should adopt such an induction plan that when a customer opens his
account with the bank he should be supplied with a booklet which enables him to
know the procedure of filing the cheques, pay-in-slip etc. It will save a lot of time
of the bank staff afterward during the conduct of the account of that customer.
DIVISION OF WORK.
The billing system of MCB must be improved to facilitate the customers and
workers. The work should be divided among the staff e.g. collection of bills.
Countering of cash and then entry of these.
CHECK OF EXPENDITURES.
Deposits must be taken at a lower cost and given at higher interest rates.