CHAPTER # 1

INTRODUCTION

1.1 INTRODUCTION OF A BANK

According to (Sir John Paget) “An organization or a business house which deals with
money credit and other financial transaction is called a Bank. In general bank attract surplus
money from people who are not using it at the time and lend to those who are in a position to use
for productive purpose. Thus people who have spare money they deposit the same bank where it
con profit. On the one hand bank receives deposits from the people and pays at a specified rate
and on the other hand advances loans to the people in need at the specified rate of markup”.

Muslim Commercial Bank is one of the leading banks of Pakistan with a deposit base
of about Rs.280 billion and total assets of around Rs.300 billion. Incorporated in 1947, MCB
soon earned the reputation of a solid and conservative financial institution managed by
expatriate executives. In 1974, MCB was nationalized along with all other private sector
banks. This led to deterioration in the quality of the Bank’s loan portfolio and service quality.
Eventually, MCB was privatized in 1991 ( Meenai, 2011).

During the last fifteen years, the Bank has concentrated on growth through improving
service quality, investment in technology and people, utilizing its extensive branch network,
developing a large and stable deposit base and managing its non-performing loans via
improved risk management processes ( Meenai, 2011).

1.2 WHAT IS A BANK?

Some definitions are given below regarding Bank are as under:-

1. According to chamber’s English Dictionary, bank means bench,

office of institution for keeping, lending and exchanging of money.

(1)
2. Collins English Dictionary define bank as “an institution offering
certain financial services, such as the safer keeping of money,
conversion domestic into and from foreign currencies lending of
money at interest”. ( www.wikipedia.com )

1.3 THE HISTORY OF BANKING SYSTEM IN PAKISTAN

The history of banking system in Pakistan dates back to

independence of Pakistan in August 1947, when various banks transferred
their Head Quarters and funds to area likely fall in India. This trend
emerged due to dominate role of Hindus in pre partitioned Indian Banking
System.

There were 3496 branches of Indian Scheduled Banks in the

Undivided Sub continent as on 1st march 1947, out of which only 487
branches were located in area presently constituting Pakistan. However the
number of branches of scheduled banks drastically declined to 195 from
487 immediately after partition ( Meenai, 2011).

At the time of Partition, there were only two banks having the honor
to be the first commercial bank of Pakistan, namely Habib Bank Limited,
which was established in 1941 with his Head Office in India and Australia
Bank Limited, which was established in 1944 with his Head Office in
Pakistan (Muzaffar Hussain, 1998).

Following the partition, an expert committee was setup and this

committee recommended that the Reserve Bank of India being the Central
Bank of the undivided India should continue to functions as the Central
Bank of Pakistan and the Indian Currency notes would continue to be legal
tender in Pakistan till 30th September 1948. Subsequently it was decided to
have separate Central Bank and the State Bank Of Pakistan was setup and
started functioned from 1st July 1948 ( S.A. Meenai, 2011).

(2)
 Thus the history of Banking System in Pakistan started with the
establishment of State Bank Of Pakistan which was inaugurated by
Quaid-e-Azam Muhammad Ali Jinnah on 1st July 1948. Consequently
Three Banks were established which includes Muslim Commercial Bank
formed in September, 1948. Bank Of Bhawalpur in October, 1948, and
National Bank Of Pakistan in 1949.

The number of schedule Banks remained unchanged up to 1955. The

State Bank of Pakistan allowed bigger Banks to open any number of
Branches. By the end of June, 1993, the total number of Pakistani
Scheduled and Foreign Banks increased to 77560 (Siddique A.H., 2010).

After the Nationalization of Commercial Banks in 1974, five major

banks emerged to be the main commercial banks, i.e. Bank of Bahawlapur
merged with National Bank of Pakistan, Habib (Overseas) Limited and
Standard Bank Limited with Habib Bank Limited, Premier Bank Limited
with Muslim Commercial Bank Limited, Schedule Bank Limited and Pak
Bank Limited with Australian Bank Limited & renamed as Allied Bank of
Pakistan.

The results of Nationalization of the Banking system were favorable to

overall banking industry, because of number of branches increased from
3397 to 7306 (December 1973 to December 1982) ( Meenai, 2011).

In early 1990s Government of Pakistan established 1st Women Bank

to encourage women for making savings, investments and to provide them
more job opportunities and to seek their active participation and
development of National Economy.

The Government of Pakistan in 1991 started the Privatization

Process of State Owned Banks and Enterprise. From Banking, the Muslim
Commercial Bank was first Bank which has been Privatized, so as to
achieve the objectives of bank with strict and progressive policies. Then the
Allied Bank was Privatized. (Siddique A.H, 2010).

(3)
1. 4 MUSLIM COMMERCIAL BANK

The Muslim Commercial Bank was established in July, 1947 in

Calcutta. After the independence it was shifted from Calcutta to Dacca. In
1948 the registered office transferred from Dacca to Karachi.

In 1974 Muslim Commercial Bank also nationalized along with other

Commercial Banks, and at the time of nationalization Premier Bank was
merged into Muslim Commercial Bank in June, 1974 ( Meenai 2011).

Government of Pakistan announced the policy of Privatization,

according to which main organization industries of public sector would be
given to private sector, with a view to stable the economy of the country. In
this regard Muslim Commercial Bank was the first Commercial Bank which
is given to Private Sector (Khawaja Amjad Saeed, 1999).

In 1990 this Bank was announced on the grounds that 51% shares
would be fore general public, out of which 26% shares would be offered to a
particular party which will take the responsibility of administration of the
Bank. Remaining 25% shares would be for general public, and all the
remaining 49% shares will remain as the Government Shares.

Finally Mansha Group declared successful for the management of

Muslim Commercial Bank, after a long tussle between Tawakal Group and
Government (Khawaja Amjad Saeed, 1999).

(4)
1.5 CATEGORIES OF SHARE HOLDERS

Particulars Share Holdings Percentage.

Associated Companies 197,310,846 21.4501%

NIT & ICP 486,497 0.0529%

Banks, DFI & NBFI 3,175,647 0.3452%

Insurance Companies 60,756,081 6.6049%

Modarabas & Mutual Funds 1,153,092 0.1254%

Public Sector COS. & CORP. 27,079,155 2.9438%

General Public (Local) 135,480,447 14.7284

General Public (Foreign) 2,541,784 0.2763%

Foreign Companies 333,904,991 36.2995%%

Others 59,043,576 6.4188%

Company Total 919,860,123 100%

(Categories of shareholders - as of January, 2024)

(https://www.mcb.com.pk/mcb/compliance_status.asp)

(5)
1.6 OBJECTIVES OF MCB BANK
Following are the main objectives of the Muslim Commercial Bank.
( http://www.mcb.com.pk )

1. The first and foremost objective of bank is to earn profit.

2. To introduce new schemes to attract the investors to enhance the

investment, to earn high profit.

3. To play an important role by earning a valuable business to support

the economy of Pakistan.

4. To facilitate the people to deposit their utility bills in every branch at

their door step.

5. To reduce the unemployment ratio.

1.7 PURPOSE OF THE INTERNSHIP

Following were the purposes of doing internship;

 For getting the Bachelor degree of Business Administration, each
student is required to spend at least six weeks as an internee in a
recognized organization.
 Main purpose of this program is to make students familiar with the
practical work, as there is great difference between what they have
learnt during their BBA and how the job is practically done.
 Another important aspect of the internship program is that internee is
placed in most of the departments of the organization through job
rotation. It provides a glance of each department, as the period is too
short for learning in detail.

(6)
1.8 RESAERCH METHODOLOGY.
During my internship I applied the following research methodology to
collect the data.
-Primary Data: The primary Data was collected by following way
 With the help of branch manager, heads of various and time to time periodic
lectures of the senior executives, vice president and assistant vice president for
understanding the functioning of the bank properly.
 By doing work personally in various departments and the facts figures were
collected for the analysis and interpretation.
- Secondary Data: The secondary Data were collected by following
way:
 Annual reports of the bank.
 Records maintained by the bank.
 Library books.
 Newspapers, magazines and business journals.
 Internet.
 Professionals.

1.9 LIMITATION.

Following limitations I faced during my internship, which are mentioned below:

 Due to short span (6 weeks) of time I could not work in all departments and so
could not get complete help or guidance during my internship.
 There was no any training department through which I could get help or
guidance during my internship
 There were some hindrances in the way of collection of data even some desired
data was unavailable and inaccessible.

(7)
 CHAPTER # 2
ORGANIZATIONAL STRUCTURE
2.1 ORGANIZATION

Organization is a harmonious adjustment of specialized parts for the

accomplishment of some common purpose or purposes. The term
organization implies that something is brought into being in the sense that
certain elements are put together in particular pattern of relation ship.
(Terry & Franklin, 1982-84).

2.2 ORGANIZATIONAL STRUCTURE

Organizational Structure is the anatomy of organization. Providing the

foundation within which the Organization Functions.
The best structure is one that enables the organization to interact
effectively with its environment, to effectively and efficiently channel the
efforts to its people, to make efficient use of its resources, and thereby to
meet the needs of its customers and attain its objectives.
As the purpose of organizational structure is to achieve coordinated
efforts through the design of structure of task and authority relationship.
(Terry & Franklin, 1982-84).

2.3 CORPORATE BRANCH’S ORGANIZATIONAL

CHART

AVP

General
Foreign Advanc
Banking
Exchang e

e
(8)
2.4 GENERAL ORGANIZATIONAL CHART OF MCB

President

Senior Management Group

Executive

Board of Directors

Regional Chief Executive

Regional General Manager

General Manager Finance

Branch Manager

(Source: M.C.B Bank Annual Report 2024)

(9)
2.5 CHART OF ORGANIZATIONAL STRUCTURE

PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

Officer Officer Officer

Grade-I Grade-II Grade-III

Assistant
Cashiers

Sub-Categories

Messenger Peons

Watchman &
Security Guards

(MCB RECORD: THE H.R.D CIRCLE OFFICER HYDERABAD-2024)

(Source: M.C.B Bank Annual Report 2024)

(10)
2.6 THROUGH OUT PAKISTAN ORGANIZATION FILED
SETUP

HEAD OFFICE
KARACHI

CIRCLE OFFICES

Sindh Punjab Balochistan NWFP & AJK

05 09 01 02

REGIONAL OFFICES

Sindh Punjab Balochistan NWFP & AJK

12 27 02 07

(Source: M.C.B Bank Annual Report 2024)

(11)
2.9 BRANCHES OF MUSLIM COMMERCIAL BANK AT A
GLANCE.

CIRCLES REGIONS BRANCHES

SINDH 05 12 278

PUNJAB 09 27 823

BALOCHISTAN 01 02 35

N.W.F.P. AND AJ & K 02 07 235

DOMESTIC 17 48 1371

PROCESSING ZONE --- --- 1

FOREIGN BRANCHES --- --- 5

TOTAL (2015) 17 48 1377

REPRESENTATIVE OFFICES AT LONDON (UK) & BEIJING (CHINA)

AGENTS AND CORRESPONDENTS IN ALL MAJOR COMMERCIAL
CITIES OF THE WORLD

(Source: Brochures by M.C.B Bank, 2024)

(12)
 CHAPTER # 3
GENERAL DIVISIONS/DEPARTMENTS IN
MCB
DIVISIONS/DEPARTMENTS OF MCB.

The organization perform its functions and core businesses

through divisions and departments. As per published material of

Muslim Commercial Bank, following are the departments or

divisions of Muslim Commercial Bank.

3.1 BUSINESS DEVELOPMENT AND MARKETING DIVISION

Business promotion division has been renamed as Business

Development and Marketing Division, it controls all over marketing activities

of Muslim Commercial Bank. The strategy is core of successful marketing

plan. By good marketing strategy the form can achieve its objectives.

In Banks these strategies are called schemes. Through that schemes

the bankers are tried to get planned target to investments i.e, money.

Muslim Commercial Bank has a very well established Marketing

Department which work under Executive Vice President. Marketing

Department is setup in the big branches. Following are the main functions

of marketing Division.

1. Introduction of valued depositor to Bank branches.

2. Earning of valuable business for Bank.
3. To provide financial facilities.
4. It also plays a very important role in increasing the savings of the
country.
5. It introduces new schemes to attract investors to enhance the
investment which results in terms of higher profit to Bank.

(13)
 The Marketing and Business Development Division of Muslim
Commercial Bank introduce six schemes of Marketing, they are;

1. Mahana Khushali Scheme.

2. Prime Currency Scheme.

3. Haj Mubarak Saving Scheme.

4. Capital Growth (Fixed Deposit) Scheme.

5. M.C.B Master Card Scheme.

6. PLS Saving 365 Scheme.

M.C.B is the only Bank which introduces four schemes at the same
time. It shows that they have trained and skilled marketing staff and it also
seems that efficiency is improved after privatization of Muslim Commercial
Bank ( http://www.mcb.com.pk ).

3.2 GENERAL SERVICES DIVISION

A new formed division of General Service controls the general

activities of the Bank.

Following are the functions of General Services Division;

1. Receiving Deposits.
2. Advancing loans.
3. Discounting bills.

The staff under this department is always busy because they

maintain daily and weekly statements. The Department of Division of Public
Relation also comes under this Division ( http://www.mcb.com.pk ).

(14)
3.3 FINANCE OR TREASURY DIVISION

This division is the back bone of the bank. It controls the process
which includes receiving cash from depositors and make payment to the
holder of cheque. It generally looks after the current and future financial
position of bank ( http://www.mcb.com.pk ).

3.4 CREDIT MANAGEMENT DIVISION

This division generally looks after the credit policy of bank. It also
maintains and approves the advances and loans. It sets the rate of interest
over the loan for a specific period. This department works under supervision
of Senior Executive Vice President ( http://www.mcb.com.pk ).

3.5 HUMAN RESOURCES DIVISION

Human Resources Division is vital for the growth an Institution. Bank

has taken necessary steps to equip its manpower with upto date knowledge
latest techniques and skills to match with rapidly changing Business
Environment.
The staff training programs are also organized by this Division.
(https:/www.mcb.com.pk ).

3.6 LEGAL AFFAIRS DIVISION

This Division takes care of all legal affairs of the bank, for this
purpose they have separate Division which hold certain expertise in this
field who makes the certain policies of bank by negotiating with the rules
and regulations.

(15)
3.7 INTERNATIONAL DIVISION

All foreign exchange dealing, branches maintain the record and

preserve bills of entry as per requirement of State Bank of Pakistan
(http://www.mcb.com.pk ).

Following are the functions of International Division.

1. Expert processing some branches.
2. Development of over seas operations, including opening of Foreign
Branches, setting up of Joint Venture Management contract with
other banks or Exchange Companies.
3. Hajj Cell.

3.8 AUDIT AND INSPECTION DIVISION

Fraud and forgery Division have been merged with Inspection

Division. Audit function is performed by regional offices. The regional offices
continue perform inspection functions ( http://www.mcb.com.pk).

3.9 ELECTRONIC DATA PROCEEDING DIVISION

This Division looks after the whole computerization process of bank.

Muslim Commercial Bank is the only bank in Pakistan which is using micro
computers in branch banking for which all of the software has been
developed by its officers ( http://www.mcb.com.pk ).

(16)
 CHAPTER # 4
DEPARTMENTS OF MCB AT BRANCHES

4.1 DEPARTMENTS OF MUSLIM COMMERCIAL BANK AT

BRANCHES

Muslim Commercial Bank has different types of Departments for to

work quickly and easily, through their workers specialization in specific
department. Through this they are working effectively and efficiently.

Following are the departments and their functions which are mainly
used in busy branch ( http://www.mcb.com.pk ).

1. Accounts Department.

2. Cash Department.

3. Clearing Department.

4. Advances Department.

5. Foreign Exchange Department.

6. Bills Department.

7. Remittance Department.

8. Dispatch Department.

9. Ledger Department.

(17)
4.2 ACCOUNTS DEPARTMENT

This department is the heart of any branch. Account Deals with

Following Functions.

A) FIXED DEPOSITS

With this function of accounts department, they are going to control

all those types of schemes which are fixed for specific time period.

B) INTERNAL WORKING

Many core responsibilities are carried out under this function. Which
are:

 Maintenance of Head Office Account

When we are talking about Head Office Accounts, which are being
made because of branches network within the country and all the income
and expenses accounts are maintained by accounts department, receiving
and payments on behalf of Head Office (H.O) Accounts. One branch Debiting
the H.O account while other branch Crediting the H.O account, and
reporting daily to the Head Office.

 Sundry Creditors & Sundry Debtors

Sundry books are also maintained because if any account number
which is written by account holder wrongly they put the amount in the
Sundry account until the right account number is found, and also for given
the advances like rent advances, petty cash purposes and so on.

C) BANK RECONCILIATION

All the branches are working as a network within one another on the
behalf of Head Office (H.O) Account, they are doing their work and reporting
the Head Office daily.

(18)
 When any branch not reporting properly or their amounts are not
balance, than Head Office sending Bank Reconciliation Statement and
Accounts Department reconcile it with the help of computer of with the help
of books, which are maintained by the branch. ( http://www.mcb.com.pk )

4.3 CASH DEPARTMENT

The Cash Department is main department for any bank. All the
payments and receiving cash are carried by Cash Department. The Cash
Department’s Cashier receiving cash and he will write it in the cash
receiving sheet, and payments on cash payments sheet.
The Cash Department also collecting utility bills, on the scroll of every
department like, PTC, Gas, Electricity, HAD, etc.( http://www.mcb.com.pk )

4.4 CLEARING DEPARTMENT

Clearing Department is dealing with following works,

 Transfer Delivery.
 Clearing
 Cheques Received for Collection (C.C).

Transfer delivery is made within the city branches of MCB. If any

account holder received the cash from any other branch, in which he has no
accounts, so with the help of Transfer Delivery he can get the cash in
branch in which he has the account.

Clearing is also the same thing but difference between transfer

delivery and clearing is that the transfer delivery collects the cheques which
belong to MCB, but clearing collects the cheques of other Banks with in the
city. And Cheques Received for Collection (C.C) deals with the cheques
received from out side the city from any Bank. ( http://www.mcb.com.pk )
4.5 ADVANCES DEPARTMENT

(19)
 This function is related with the Loan facility. Following type of Loan
are given.

A. CASH FINANCE

This finance is mostly allowed to the cotton ginners, sugar mills, rice
mills, for purchasing heavy stock at the peak level of harvesting. The stock
is pledged with bank along with additional securities of mortgage property of
factories, personal guarantee of the Directors. The interest charges for this
facility are 52 to 54 paisas a day per thousand.

B. RUNNING FINANCE

It is provided to the current account holder. Zonal Office can sanction

the loan upto 3 lacs. General Manager of the Circle has the power to section
the loan upto 1 million. The loan can be guaranteed on personal guarantee.
The security (Stock and Property) must be ensured by the party. Interest
rate on this facility is 62 paisas per thousand on daily product basis.

C. DEMAND FINANCE

This is short term finance. This type of advance is allowed to the

intending borrowers, who intend to borrow for some fixed period like, one
year, six months, three months. The repayment of the loan will be made in
monthly installments. The markup will be charged on the expiry of the
scheduled date of loan.

D. STAFF FINANCE

This type of finance is entitled against provident fund to any staff

member for the purposes of

1. House Building.
2. Personal Vehicle, etc.
E. EXPORT FINANCE.

(20)
 In this facility bank plays role of mediator between State Bank of
Pakistan and the Exporters, for which bank charges 3% and State Bank
charges 10%. This facility is most cheaper for exporters for operating the
wheel of product on track. ( http://www.mcb.com.pk )

4.6 FOREIGN EXCHANGE DEPARTMENT

The Foreign Exchange Department of any bank plays vital role in the
international trade of any country (Meenai, 2011).
MCB has the Foreign Exchange Department, which gives the facilities of,

 Transfer money from one country to another country.

 Transmission should be made through Demand Draft and Telegraph
Transfer.
 Provide Letter of Credit for Import and Export.
 Foreign Currency Accounts (Prime Currency Accounts).
 Travelers Cheques and Foreign Currency Notes are also issued, etc.
( http://www.mcb.com.pk )

4.7 BILLS DEPARTMENT

Bills Department deals with the Import and Export. There are two
type of bills, named as Inland Bills and Foreign Bills.

I. Inland Bills
Inland Bills must be drawn and payable within the country.

II. Foreign Bills

Foreign Bills must be drawn in one country to another country.
For clearing purposes they are using cheques, for clearing in business
which are followed by cheque are called clean bills, and those in which
documents are involved are called documentary bills.

(21)
( http://www.mcb.com.pk )

4.8 REMITTANCE DEPARTMENT

Remittance is transfer of funds from one place to another or from one

person to another. It is an important service provided by banks to
customers as well as non-customers. Since it is not a free service it is a
source of income for the bank.

INLAND REMITTANCE

A. DEMAND DRAFT (DD)

Demand draft is purchased by the customer by filling the application

form against the payment of original amount and service charges and with
holding tax. It is the written order to one branch to another branch of same
bank or another bank, under special arrangement to pay certain amount to
or to the order of specified person.

B. TELEGRAPHIC TRANSFER (T.T.)

Transfer of fund with the help of Telex / Fax is called T.T. This mode
of service involves less time then DD. This is also important that there
should be account of the person for whom the T.T. is made. The bank also
charges on T.T. like DD.

C. MAIL TRANSFER (MT)

Transfer of fund from one branch to another branch to another

branch of same bank inside or out side the country, through mail / courier
service is called Mail Transfer (MT.)
D. PAY ORDER

A pay order is a written authorization of repayment in a receipt from

issued and payable by same branch, to the person named and addressed.

(22)
FOREIGN REMITTANCE

The bank provides the facility of Foreign Remittance to the domestic

residential and foreigners to send money from one country to another
country. Bank is also provides the foreign exchange in shape of travelers

cheques ( http://www.mcb.com.pk ) .

4.9 DISPATCH DEPARTMENT

Dispatch Department deals with the Inward Dispatch and Outward
Dispatch. Those letters or mails came to the branch are called Inward
Dispatch, and those letters or mails sent by the branch are called Outward
Dispatch.
Dispatch department has also responsible work, to maintain the
register for issuing and receiving mails in proper way to keep effective filling
( http://www.mcb.com.pk ).

4.10 LEDGER DEPARTMENT

Under this department there are two type of services.

A. OPENING OF ACCOUNT

When new customer comes to the branch for opening a new account
it is the responsibility of this department to give him all information about
opening of new account.

B. MAINTAINING OF BOOKS / LEDGERS

(23)
 It is also the responsibility of this department to maintain of Books of
Account or Ledgers. The Muslim Commercial Bank has Computers in all
branches, which are use for this purpose, and gives quick and accurate
information about accounts. Many other facilities also taken from computes,
like Income Statement (Daily, Weekly, Monthly, etc.) Balance Sheet, etc
( http://www.mcb.com.pk ).

(24)
 CHAPTER # 5
TYPES OF ACCOUNTS &
SCHEMES AND ANCILLARY SERVICES

5.1 PROCEDURE OF OPENING THE NEW ACCOUNT.

A contract arises between the banker and customer, when a new

account is opened by the customer. It is therefore necessary that a bank
should be careful and take the requisite precautions before the undertakes
any obligations. To safeguard himself, he should make himself aware of the
financial status of the prospective customers in particulars, and his
characters are respectability in general. He must ascertain the nature if the
account the client desires to open and ask for references, especially when a
current account is opened, which is requiring to mention few references and
satisfy him about customer’s reputation by referring to them. The
advantages of inquiry, which were revealed during internship program
2016, are as under:

a. The banker will know, whether the prospective customers is

desirable or not.
b. Whether he will be proved as an honest and credit worthy,
especially regard to over draft transaction.
c. The banker will be in position to answer references about his
customers in his return, with great confidence when needed.
d. The Bank will be safeguarding himself against any risk.

The banker further has to get specimen signature of the

customer. It is necessary to verify signatures of account holder, when he
presents cheque for encashment.

In case if joint accounts following conditions are followed:

a) He should get an application to open a join account signed by

the all applicants.

(25)
 b) Get particulars as to how it should be operated on.

c) As to who is authorized to operate an account.

d) The scope and extent of authority given to such person.

e) Get specimen signature of all parties.

5.2 TYPES OF ACCOUNTS

Muslim Commercial Bank receives the deposits on the following

nature of accounts.

5.2.1 CURRENT ACCOUNT

According to Muslim Commercial Bank Manual (Volume-I P-3) in

current account the following different kinds of accounts can be opened
(Source: M.C.B Bank Annual Report, 2024).

i) Individual Account

ii) Joint Account

iii) Proprietor Ship Account

iv) Partnership Account

v) Private Limited Companies Account

vi) Public Limited Companies Account

vii) Liquidators account (permission from H.O/Provincial Head

Quarter)

viii) Trust Account

ix) Societies, Association and Club Account etc.

x) Local Bodies Account etc.

xi) Autonomous and Semi Autonomous institution accounts etc.

xii) Local / District Zakat / Usher Committee Account.

(26)
 The current account can be opened with the initial deposit of Rs.500
in cash. The depositor will not receive the return on deposit. There is no
restriction, whatever in withdrawn of money from the account. Rules and
regulation governing the current account are given below:-

a. Current account is opened on proper introduction by current

holder of repute may be accepted at the discretion of manager.
b. The minor will not be allowed to open a current account
directly.
c. No profit will be paid on credit balance held in current account.
d. Current account cannot be overdrawn except by prior agreed
arrangement with the bank.
e. At the time of opening the account in the name of an individual,
the bank will record the name and address of the next of the
kin of the account holder as disclosed by hi, who can be
contacted in the event of account remains inoperative for more
than 3 years.
f. All cheque and other instruments should be crossed, before
they are deposited for credit into account.
g. The bank would not require any prior permission from the
account holder for debiting his account for charges expenses,
fees commission, markup etc arising out of any dealing with the
bank.
h. The bank will register instructions in writing from the drawer of
the cheque to stop its payment, but it cannot accept ay
responsibility in case, such introductions are overlooked. The
verbal instructions to stop payment of the cheque will not be
accepted.
i. The account holder is expected to maintain a minimum ruining
average credit balance of Rs.500/- or whatever the minimum
amount prescribed for the purpose.
(Application form for Opening Account)
( http://www.mcb.com.pk )

(27)
5.2.2 PLS SAVING ACCOUNT.

Muslim Commercial Bank manual (Volume-I P-3) describe that in this

two types of account can be opened as:
i) Individual Account.
ii) Joint Account
According to O.G.I the PLS saving account is opened with minimum
deposit of Rs.100/- the rate of return in the deposit varies from time to
time, usually after six months. The bank fixes the interest of deposits from
January to June. The bank in different projects invests the deposited
money. If the bank earns the profit then it will share with depositors and
vice-versa. ( http://www.mcb.com.pk )

5.2.3 FIXED DEPOSIT ACCOUNT

These deposits are also called time deposits, because these deposits
are based on fixed duration. The longer duration gives the higher profit.
( http://www.mcb.com.pk )

5.3 RULES AND REGULATIONS FOR OPERATING AN

ACCOUNT

There are some rules and regulations for operating the accounts, it is
essential for a person who want to open the account of any type.

1. The account must be opened on proper introduction, and the

minimum amount is fixed for every type of account.

2. It described at the time of open the account, that the amount is

operated by one or more persons.

3. Not more than one account is opened on one name.

(28)
4. Bank have right to invest the amount of account in any manner under
the rights of bank.

5. A distinctive number will be allocated to each account, which shall be

quoted in all correspondence relating to the account.

6. Account holder ca only withdraws sums from his account by means of

cheques supplied to him by the bank for the particular account.

7. The amount is deposited in account through the pay-in slip, showing

the name an account number of the account.

8. Cheques should be singed as per specimen signature, supplied by

him to the bank.

9. Any change in the address of the account holder should be

immediately communicated to the Bank.

10. Account may be transferred from one branch to another branch of the
bank, free of charge.

11. The bank reserves it self the right to add or alter any or all of the rules after
advertisement in newspapers or any other source, and such rules are
immediately applied on the accounts.

12. The bank reserves to it self the right to close without notice, any
account which in its opinion is not satisfactorily operated.

13. Post-dated and stale cheques shall not be paid.

14. Account holder wishing to close the account must present the pass
book and the unused cheques to the bank, in order to draw the
balance amount. In case of account holder wishing to close the
account within the period of six months from the date of its opening,
a charge of Rs.25/- on account of cost of Pass Book will be made.

15. In case of current account if the deposited amount is less than

Rs.1,000/- than after the period of six months the Rs.50/- will be
charged ass incidental charges.

(29)
16. In case of PLS account if the with drawls are made before the 5th of
month, and no with drawing up to end of month, then the profit will
be charged on account. Other wise no profit will be charged on
account.

17. If the deposited amount of PLS account is less than Rs.500/- than no
profit will be charged on the account.

18. In case of death of any one or more of account holders, the amount is
become payable to the survivor or survivors.

( http://www.mcb.com.pk )

There are some formalities for opening of the account depending on

the nature of the account, by different customers. Likewise Bylaws,
Contracts, Articles of Association, Minutes of Meetings, Authorities to
Operate the account, etc. In case where the account is opened by,

 Individual (Single or Joint)

 Firms (Proprietorship / Partnership)

 Limited Companies

 Autonomous Corporations

 Charitable Institutions

 Applications

 Educational Institutions

 Local Bodies etc.

( http://www.mcb.com.pk )

(30)
5.4 SCHEMES AND ANCILLARY SERVICES OF MUSLIM
COMMERCIAL BANK

Muslim Commercial Bank is the only bank who has introduced more
new deposit schemes than any other bank. Muslim Commercial Bank offers
a range of deposit schemes, especially designed to meet particular
requirements of its various customers. In addition it also offers Travelers
Cheque and Credit Cards Facilities.

Following are the Main Schemes and Ancillary Products and services
of Muslim Commercial Bank. ( http://www.mcb.com.pk/products )

5.5 PROFIT AND LOSS SHARING (PLS) DEPOSIT SCHEMES

I. PRIME CURRENCY SCHEME

Muslim Commercial Bank Prime Currency Scheme is a world in it

self. Muslim Commercial Bank is committed to working for the convince and
offer the foreign currency account facility at Sixty Eight (68) of its branches
all over the Pakistan. Prime Currency Scheme allows you to earn attractive
rates of interest in foreign currency, weather you are resident of non-
resident of Pakistan, Foreign. Nationals and foreign companies can also
open a foreign currency account, under the Prime Currency Scheme. The
foreign currency account can be opened in four global currencies, US
Dollar, Pound Sterling, Japanese Yen and Deuteshe Mark.

Prime Currency Scheme is exempt from all forms taxes including

Income Tax, Welath Tax and Zakat Deduction. Rupees loan faculties also
available against Prime Currency Scheme. The customer can earn more
than 10% per annum.

(31)
II. PLS SAVING 365 DAYS SCHEME

This product is ideally suited for profit conscious customers who like
to both higher return and flexibility of operating their accounts any time
they want. While there are no restriction on with drawls, it is required that
the customer maintains a minimum credit balance of Rs.3,00,000/- in
his/her account at all times. This deposit account provides profits on daily
product basis and it is therefore suitable for both individuals and business
customers.

This is a specially saving bank account scheme and offers the profit
on daily product (balance) basis, the profit rate applicable on investment
under. This scheme is 8% per annum, and being paid at half year rest.

III. KHUSHALI BACHAT ACCOUNT SCHEME

There are basically re-designed saving accounts required a minimum

balance of Rs.2500/- at all times. Maximum of 4 withdrawals per month are
allowed. Profit is paid on daily product basis. The benefit accruing to the
customer is free of charge payment of electricity, telephone, and gas bills on
the basis of direct debit man date. This type of account combines to benefits
of convenience of utility bills with those accruing with common saving
deposit accounts.

People must have Muslim Commercial Bank’s Khushali Bachat

Account for high returns and a lot of more benefits. The rate of profit under
this account is 8% per annum. Return calculated on daily average balance
and paid half yearly.

Muslim Commercial Bank facilitating by helping account holders to

pay utility bills through their account, no need of making queues.

(32)
IV. DOLLAR KHUSHALI ACCOUNT SCHEME

It is an US Dollar Saving Bank Account which may be opened by

tendering Pak rupees which will be converted into US Dollars through
purchase at Market rate. A minimum constant balance of 100/- US Dollars
is to be maintained at all times. Profit is paid on daily product basis. The
benefit accruing to the customer is free of charge payment of utility bills.

( http://www.mcb.com.pk/ products )

5.6 TIME DEPOSIT SCHEMES

V. MAHANA KHUSHALI SCHEME

Through Mahana Khushali Scheme the customer can get a steady

income month after month on his investment at his door step. Any one can
invest with minimum amount of Rs.10,000/- and the maximum amount of
Rs.10 Million. The Khushali Certificate will be of five years maturity. The
guaranteed rate off profit offered is minimum 1% per month. If the profit
declared by the bank is higher, additional profit will be paid to the
depositors. Following table gives the monthly on various amount, based
method of calculation.

AMOUNT RUPEES MONTHLY PROFIT

RUPEES
1,000,000 12,417
5,00,000 6,208
1,00,000 1,242
50,000 621
25,000 310
10,000 124

(33)
 Zakat will be applicable once a year on the principle amount of
investment. Tax on the profit is to be deducted by Muslim Commercial
Bank’s branches at the time of payment. Monthly profit payment procedure
will be made through crossed pay order which may be collected by the
depositor. (Source: M.C.B Bank Annual Report 2022).

VI. HAJJ MUBARAK SAVING SCHEME

Muslim Commercial Bank helps a Muslim to realize a life time

ambition that is Hajj. Hajj is an obligation on every Muslim with resources.
Hajj demands money expenditures an few are able to collect such amount at
one time to perform this duty. For those without the means but with the
desire to perform this pilgrimage. Muslim Commercial Bank will help them
to save over the period of 2 or 3 years to meet all necessary expenses.

Under 2 years scheme a monthly deposit of Rs.1800/- and under the

scheme of 3 years a monthly deposit of Rs.1200/- will be required. After 2
years bank will pay approximately Rs.48,160/- and Rs.51,200/- after 3
years, less the Zakat and with holding tax when ever applicable.

In case of withdrawal from scheme, the participant will be entitled to

the profit rate of the PLS saving account for that particular period.

In case of death of participant the successor will take the rate of the
participant if he/she agrees to pay the remaining installments.

(https://www.mcb.com.pk/products )

VII. CAPITAL GROWTH CERTIFICATE SCHEME.

(FIXED DEPOSIT SCHEME)

Muslim Commercial Bank has a risk free return scheme by which

your capital can grow to nearly double the amount in just few years time.
All that is required is minimum amount of deposit or investment is

(34)
Rs.10,000/- with no limit on the maximum amount. Time period for the
maturity of that certificate is 5 years, renewable for further period of 5
years. ON the maturity of certificate the following returns are expected to be
made after deduction of zakat where ever applicable and with holding tax.

In case of premature encashment of certificates, the depositor will be

given PLS Saving Account profit rates declared by the Bank for that
particular period.

This scheme is beneficial for retired persons because it offers a range

of profit on deposit amount. (https://www.mcb.com.pk/products )

VIII. KHANAM BACHAT ACCOUNT SCHEME (KHB)

Under Khanam Bachat account scheme a monthly sum of Rs.1,000/-

will be required to be deposited by a customer for ten years, on or before the
6th day of each month and at maturity, a lump sum amount including profit
will be made to the Account holder. The total expected amount would be
around Rs.257,000/-, subject to deduction of Zakat and withholding tax.
Where ever applicable at the time of payment.

Expected rate of profit is 14.7% per annum. In case of cancellation of

Account before the maturity, the bank should apply the PLS account profit

rate for each six months. (https://www.mcb.com.pk/products )

5.7 ANCILLARY PRODUCTS AND SERVICES

IX. MCB PHOTO CREDIT CARD.

Muslim Commercial Bank Photo Credit Card is only issued to their

loyal depositors and executive staff. This card is also authorized for various

(35)
branches and shops. Through this card the card holder can shop any
commodity of any price from any authorized shop.

MCB Photo Credit Card saving the card holder from taking a heavy
amount of money with him. The Photo Credit Card holder have at least
Rs.200,000/- in his account.

X. AUTOMATED TELLER MACHINES (ATMS)

A number of Automated Teller Machines have been installed at several

branches in all major cities of Pakistan for extending ‘Round the Clock’
money withdrawal facility to the bank clients. It is planned to initially raise
the number to 50 of the Automated Teller Machines, and in the second
phase go for much bigger expansion.

XI. MCB RUPEES TRAVELERS CHEQUES SCHEME.

This service is being offered to facilitate instant fund availability to

travelers. Muslim Commercial Bank has made it easy for every one specially
for businessmen to take these currency through out the Pakistan with out
the fear of theft and steal.

It eliminate the risk involved in carrying large sums of money,

especially by businessmen traveling around the country trying to have
immediately cash in on profitable deals. The Rupees Travelers Cheques can
be purchased form most MCB branches. They are available in denomination
of Rs.1,000/-, Rs.10,000/- and Rs.50,000/-.

XII. FUND MANAGEMENT SERVICES

This is a non-banking financial service. The bank accept funds from

investors on no liability basis and arranges to invest them in a portfolio of
Government Securities there by offering a higher and more secure return on
investment. For this purpose customers need to open separate Fund
Management Account from where their funds are routed to the portfolio.
Profit is paid annually. (https://www.mcb.com.pk/products )

(36)
 CHAPTER # 6
CONCLUSIONS & SUGGESTIONS

6.1 CONCLUSIONS

MCB bank is the one of the largest bank in Pakistan and ranked 1 to 3 in
Asia. When I got a deep study about this bank, it was very difficult for me to
check out the key factors which make MCB, “THE BEST”. A huge network,
largest number of branches, it is very difficult to control, organize and keep
the institute on a progressive way. When I studied about
MCB, I am on the point that top level management, policy makers had a
huge contribution for MCB but the most important role is played by Human
Resource Department (HR).

1. It seems that A/C opening formalities are too

lengthy.

2. There is a lack of giving incentives to the

depositors/ customers.

3. It seems the performance of the business

development in marketing department of MCB is not satisfactory.

4. There is lack of motivation and compensating to the

employees.

5. There seems less online banking system, It appears

that there are great rush days for the Customers as well as for the staff
members due to limited counters.

6. Physical structure of the branch is not properly

designed.

7. The staff members are not well trained and their

education level doesn’t match with their job.

(37)
6.2 SUGGESTIONS

During my internship at the MCB, I find out weak areas that require
improvements for long-term benefit of the organization. These suggestions
and recommendation are as follows:

1. The procedure of opening an account should be simplified. The

account opening form should be self-explanatory and include translations in
Urdu for those customers who are not well read, since the fact cannot be
ignored that many people do not have a good understanding of English.

2. Those who deposit large amounts of money or old customers of the

bank should be given free credit lines up to a certain limit. Besides,
financial advice should be provided to customers in case there is a change
in the market trend before they seek for it.

3. All the officers in Deposits Department should be involved in

marketing and not just opening accounts and maintaining their records.
This can be done through improving their personnel relations’ skills and
applying the Uni-Service concept of visiting the potential customers at their
offices and homes.

4. MCB should follow the performance evaluation policy strictly and

award those who bring in deposits and help it increase its market share.
Unfortunately, this has been stated in the bank’s policy but is not being
implemented.

5. IT has changed the old method of making business. So,

computerization in MCB is become the basic need. Though MCB has the
computer system yet the system has not totally shifted on computer.
Manual procedure is still there, hence computer facility is not fully availed
and many branches are working without computer and computer system, it
should be fully availed and system should be fully computerized.
Computerization will save too much time which is wasted due to manual
procedures.

(38)
6. Physical appearance of the location and inside the building also

matters. It helps a lot to attract the customer. Some branches of MCB are

very attractive but all the branches should be well dressed.

7. There should be proper staff training refresher courses programs to

train the employees latest tool and techniques of the banking. They should

be given be given computer training. Most of the employees of the MCB

know nothing about the computer and its application in the banking.

(39)
 BIBLIOGRAPHY
Books:

 Khowaja Amjad Saeed, (2006), Economy of Pakistan, institute of

Business Management Lahore.

 Inter Commerce.

 Meerani S.A, (2011), Oxford University Press Karachi (8th Edition).

 Khowaja Amjad Saeed, (2004), Mercantile Law of Pakistan, Institute

of Business Management Lahore.

 M. Saeed Nasir, (2012), Banking & Finance, Marhaba, Karachi,

Pakistan

 Terry & Franklin, (1982-84), Management, 5th edition, Aitbs

Publishers, India.

 Muzaffar Hussain, (1998), Pakistan Economy, Farooq Kitab Lahore,

Pakistan

 Bartol & Martin, (1992), Management, 3rd Edition, New York

McGraw-Hill, Inc.

 Gorden J. Alexander, Fundamentals of Investments, (2009), 3rd

Edition, published by PHI learning private limited from New Dehli.

 James C. Van Horne, Fundamental of Financial Management, 13th

Edition, PHI learning private limited from New Dehli.

 Harold Randell, Accounting, (2005), published by Cambridge

University Press from New York.

 Professor Sher M. Chaudhary, Introduction to Statistical Theory, 8th

Edition, published by Markazi Kutub Khana from Urdu Bazar Lahore.

(40)
 Siddique A.H, Practice and Law of Banking in Pakistan, (2010), 7th

Revised Edition), published by Royal Book Company from Karachi.

 Philip Kotler, Marketing Management, 14th Edition, published by

Pearson from New Dehli.

 Robet M. Fulmer, “The New Management”, 3rd Edition, published by

McMillian from New York

 Stephen A. Rose, Corporate Finance, 8th Edition, published by

McGraw Hill from New Dehli.

 Charles H. Gibson, Financial Statement Analysis, 12th Edition,

published by Cengage learning from Mexico.

 Gary Dessler, Human Resource Management, 12th Edition, published

by Pearson from Dehli.

 Dr. K K Dewitt, Modern Economic Theory, published by S. Chand

Higher Academic from New Dehli.

(41)
Others:
 Annual Report 2024 of MCB Bank
 https://www.mcb.com.pk/products
 https://www.mcb.com.pk/publications
 https://www.mcb.com.pk/islamic
 https://www.mcb.com.pk/mcb/compliance_status.asp
 https://www.sbp.com.pk
 https://accountancy.com.pk/forum
 https://www.investopedia.com
 https://www.scribd.com
 https://www.wekiapedia.com

(42)