MCB internship report
INTERNSHIP REPORT ON MCB BANK LIMITED INTRODUCTION The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank. This history of banking is traced to as early as 2000 B.C. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths. They used to keep strong safes for storing the money and valuables of the people. The persons who had surplus money found it safe and convenient of deposit their valuables with them. The first stage in the development of modern banking, thus, was the accepting of deposits of cash from those persons who had surplus money with them. The goldsmiths used to issue receipts for the money deposited with them. These receipts began to pass from hand to hand in settlement of transactions because people had confidence in the integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted in payment of debts; then the receipts were drawn in such a way that it entitled any holder to claim the specified amount of money from goldsmiths. A depositor who is to make the payments may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank notes. The second stage in the development of banking thus was the issue of bank notes. University of the Punjab, Gujranwala Campus 1 INTERNSHIP REPORT ON MCB BANK LIMITED The goldsmiths soon discovered that all the people who had deposited money with them do not come to withdraw their funds in cash. They found that only a few persons presented the receipts for encashment during a given period of time. They also found that most of the money deposited with them was lying idle. At the same time; they found that they were being constantly requested for loan on good security. They thought it profitable to lend at least some of the money deposited with them to the needy persons. This proved quite a profitable business for the_ goldsmiths. They instead of charging safe keeping charges from the depositors began to give them interest on the money deposited with them. This was the third stage in the development of banking. University of the Punjab, Gujranwala Campus 2 INTERNSHIP REPORT ON MCB BANK LIMITED DEFINITION OF BANK The term 'bank' is being used for a long time, yet it has no precise definition. The basic reason is that the commercial banks perform not just one but many types of functions. The term bank has been defined differently by different authors. Some are as follows: According to Crowther, "Bank is a dealer in debts—his own and of other people." According to G.W. Gilbert, "A banker is a dealer in capital or more properly a dealer in money. He is an intermediate party between the borrower and the lender. He borrows from one party and lends to another." According To Bamkinh Companies Ordinance U/s3 (B) of Banking Companies Ordinance 1962 "Banker means person transacting the business of accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheque, draft, order or otherwise and includes any Post Office Savings Bank." University of the Punjab, Gujranwala Campus 3 INTERNSHIP REPORT ON MCB BANK LIMITED HISTORY OF BANKING IN PAKISTAN The interesting point which I observed during the span of mine internship was the historical background of Banking & Financial sector which is the one in which great improvement and growth is observed since the formation of Pakistan. For studying the growth of this sector we can divide it into three stages, which are as follows a) Pre-Nationalization Era b) Nationalization Era c) Post Nationalization Era A) Pre Nationalization Era There were only two Muslim banks in Indo Pak before partition, they were; Habib Bank Ltd. (estd. in 1941 at Bombay) & Australia Bank Ltd. (estd. In 1944 at Lahore). Hindus or Foreigners either owned all other banks, at that time. At the time of partition there were 631 bank branches in area, which came under Pakistani control. But due to blood shed and violence at large scale, mostly branches were closed and the disparity can be assessed from the fact that on July 1948 there University of the Punjab, Gujranwala Campus 4 INTERNSHIP REPORT ON MCB BANK LIMITED were 195 branches with deposits of Rs.88 crore (880 million) only. Also a factor lagging in Pakistani industry was a central bank of its own, by that time Reserve Bank of India was acting as central bank for both countries and same currency notes were used in both territories. But Reserve Bank of India was biased and Set down Pakistan on many occasions such as the issue of funds transfer etc. In this period drastic steps were taken in government sector for the improvement of overall position. The private sector also responded to these changes and some very positive changes were observed. Some of the steps taken by the government in this regard were as under: i. Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948. ii. Setting up of National Bank of Pakistan in November, 1949 to control the 'jute' export in East Pakistan and to act as agent of SBP. iii. Larger powers were given to SBP through SBP Act (1956) for controlling purposes. iv. Banking Companies Ordinance 1962 for protection and guidance to banks. v. Establishment of specialized banks, such as ADBP (1952); a) HBFC (Nov, 1952); b) P1CIC (Oct, 1957) c) IDBP (Aug. 1961); d) NDFC (Jan, 1973). University of the Punjab, Gujranwala Campus 5 INTERNSHIP REPORT ON MCB BANK LIMITED These were the steps, which built a strong banking sector in Pakistan. This is also obvious from the facts that by 1973 there were almost 10 foreign banks were working in Pakistan and all over deposit position was around Rs.2300 crore (23,000 million). A bird eye view of 5 top banks was as given below: BANKING SECTOR IN PAKISTAN IN 1973 BANK NO.OF BRANCHES DEPOSITS Habib Bank Ltd. 667 Rs. 6,160 (million) National bank of Pakistan Ltd. 579 Rs. 5,660 (million) United Bank Ltd 497 Rs. 5,670 (million) MCB Bank Ltd. 506 Rs. 1,640 (million) Allied Bank Ltd. 145 Rs. 570 (million) University of the Punjab, Gujranwala Campus 6 INTERNSHIP REPORT ON MCB BANK LIMITED B) Nationalization Era: On January 01, 1974 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani banks became a public property. All small banks were merged in bigger banks to create 5 major Pakistani banks Pakistani banks. These banks were to control by Pakistan Banking Council. There are still controversies about this act of government as whether it contributed in success of failure of banks. However the major changes after nationalization were as follows: Working of banks was extended to under developed areas. Market expansion for credit and deposits. Bank were encouraged to extend cooperation to neglected areas Decrease in service level of bank officers. Decrease in profitability as well. University of the Punjab, Gujranwala Campus 7 INTERNSHIP REPORT ON MCB BANK LIMITED C) POST NATIONALIZATION ERA In 1990 the government decided to denationalize all the nationalized institutes. Some was also suggested in banking sector. For this purpose, amendments were made to Nationalization Act 1974 and two nationalized banks were privatized. Along with this a permission to open banks in private sector was also granted. The rules regarding establishment of new banks and for incoming foreign banks were also relaxed. The-three privatized banks are; a) MCB taken up by a private group in April, 1991 b) ABL taken up by its own employees in September 1991. c) UBL taken up by UAE party in 2002. After these changes a large number of private and foreign banks started their operations in Pakistan and the present status can be seen from the following figures: SCHEDULED BANKS Category No. Of Banks Nationalized Commercial Banks 3 Private / Privatized Commerce Banks 18 Public Sector Specialized Banks 4 Foreign Banks 19 Total Schedule Banks 44 University of the Punjab, Gujranwala Campus 8 INTERNSHIP REPORT ON MCB BANK LIMITED In addition to above mentioned scheduled banks there are 11 Development Financial Institutes (DFI’s), 16 Investment Banks and 21 leasing and Modarbah Companies. PAKISTAN BANKING SECTOR • Nationalized Commercial Banks • Privatized Banks • Specialized banks • Private banks • Foreign banks • Other financial Institutions NATIONALIZED SCHEDULE BANKS • First Women Bank Ltd. • National Bank of Pakistan • Habib Bank Ltd. DE-NATIONALIZED SCHEDULE BANKS • Allied Bank of Pakistan Limited • MCB Bank Limited • United Bank Ltd. University of the Punjab, Gujranwala Campus 9 INTERNSHIP REPORT ON MCB BANK LIMITED SPECIALIZED BANKS • Zarai Taraqiti Bank of Pakistan (ADBP) • Industrial Development Bank of Pakistan(IDBP) • Punjab Provincial Cooperative Bank • Federal bank for Cooperatives PRIVATE SCHEDULE BANKS • Askari Commercial Bank Ltd. • Bank Alfalah Ltd. • Bank Al-Habib Ltd. • Bolan Bank Ltd. • Faysal Bank Ltd. • Habib Credit & Exchange Bank • Indus Bank Ltd. • Metropolitan Bank Ltd. • Platinum Bank Ltd. • Prime Commercial Bank Ltd. • Prudential Bank Ltd. • Soneri Bank Ltd. • The Bank of Khyber • The Bank of Punjab • Union Bank Ltd. University of the Punjab, Gujranwala Campus 10 [...]... Punjab, Gujranwala Campus 21 INTERNSHIP REPORT ON MCB BANK LIMITED Management Committee University of the Punjab, Gujranwala Campus 22 INTERNSHIP REPORT ON MCB BANK LIMITED Board of Directors Mian Mohammad Mansha Chairman S.M Muneer Vice Chairman Mohammad Aftab Manzoor President & Chief Executive Tariq Rafi Director University of the Punjab, Gujranwala Campus 23 INTERNSHIP REPORT ON MCB BANK LIMITED Sheikh... Punjab, Gujranwala Campus 28 INTERNSHIP REPORT ON MCB BANK LIMITED ORGANIZATIONAL SETUP OF MCB HEAD QUARTER KARACHI PROVINCIAL HEAD QUARTERS PUNJAB LAHORE SINDH KARACHI BALOCHISTAN PESHAWAR NWFP & AZAD KASHMIR QUETTA CIRCLE OFFICES University of the Punjab, Gujranwala Campus 29 BRANCH OFFICES INTERNSHIP REPORT ON MCB BANK LIMITED ORGANIZATIONAL STRUCTURE OF MCB As MCB is a banking company listed in stock... 17 INTERNSHIP REPORT ON MCB BANK LIMITED Vision Statement CHALLENGING AND CHANGING THE WAY YOU BANK University of the Punjab, Gujranwala Campus 18 INTERNSHIP REPORT ON MCB BANK LIMITED Mission Statement To become the preferred provider of quality financial services in our country with the profitability and responsibility and to be best place to work University of the Punjab, Gujranwala Campus 19 INTERNSHIP. .. Gujranwala Campus 24 INTERNSHIP REPORT ON MCB BANK LIMITED Audit Committee Mian Mohammad Mansha Chairman Shaikh Mukhtar Ahmed Member Shahzad Saleem Member Chief Financial Officer Ali Amin Company Secretary Tameez-ul-haque Auditor A.F.Ferguson & co Chartered accountants M.Yousuf Adil Saleem & co Chartered accountants Legal Advisor University of the Punjab, Gujranwala Campus 25 INTERNSHIP REPORT ON MCB BANK LIMITED... Campus 15 INTERNSHIP REPORT ON MCB BANK LIMITED MCB s strength lies in providing a technological base at the gross root level of the society with a challenge to educate and assimilate such systems across vast cultural and economic backgrounds With over 768 automated branches, 263 online branches, over 151 MCB ATMs in 27 cities nationwide and a network of over 16 banks on the MNET ATM switch, MCB continuously... now recently the Head office of MCB has been transferred to Islamabad in July, 1999 and now Head office is termed as Principle Office University of the Punjab, Gujranwala Campus 13 INTERNSHIP REPORT ON MCB BANK LIMITED This institute was nationalized with other on January 1st, 1974 At that time it had 506 branches and deposits amounting to Rs 1,640 million Although MCB has a reputation of a conservative... the number of branches that can be opened by foreign banks, an advantage that MCB capitalizes because of its extensive branch network Fourteen years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and University of the Punjab, Gujranwala Campus 16 INTERNSHIP REPORT ON MCB BANK LIMITED prepare the groundwork for future growth The bank has restructured... Registered Office MCB building, F-6/G-6 Jinnah Avenue, Islamabad Principle Office Adamjee house 2nd floor I.I chudrigar road Karachi Registrar and Share Registration Office THK associates (pvt) Ltd Shares department, ground floor sheikh sultan trust building no 2, Beaumont road Karachi University of the Punjab, Gujranwala Campus 26 INTERNSHIP REPORT ON MCB BANK LIMITED ORGANIZATIONAL HIERARCHY OF MCB PRESIDENT... developments: University of the Punjab, Gujranwala Campus 14 INTERNSHIP REPORT ON MCB BANK LIMITED • Launching of different deposit schemes to increase saving level • Increased participation on foreign trade • Betterment of branches and staff service level • Introduction of Rupee Traveler Cheques & Photo Credit Card for the first time in Pakistan MCB BANK TODAY MCB today, represents a bank that has grown with... PRODUCT MIX & PRICES OF MCB BANK 1 MCB Rupee Traveler Cheque MCB Rupee Travelers Cheques are as good as cash, infact better Better because with Rupee Travelers Cheques you have the power to purchase and a feeling of security that should you lose them, you will get a refund MCB Rupee Travelers Cheques are accepted at major shops, travel agents, hotels, business establishments and MCB branches all over