MCB internship report
Trang 1The 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.
Trang 2The 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
Trang 3DEFINITION 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 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."
Trang 4HISTORY 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
Trang 5were 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)
Trang 6These 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
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)
Trang 7B) 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
Trang 8C) 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
Nationalized Commercial Banks 3
Private / Privatized Commerce Banks 18
Public Sector Specialized Banks 4
Total Schedule Banks 44
Trang 9In 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
N ATIONALIZED S CHEDULE B ANKS
• First Women Bank Ltd
• National Bank of Pakistan
• Habib Bank Ltd.
D E -N ATIONALIZED S CHEDULE B ANKS
• Allied Bank of Pakistan Limited
• MCB Bank Limited
• United Bank Ltd
Trang 10S PECIALIZED B ANKS
• Zarai Taraqiti Bank of Pakistan (ADBP)
• Industrial Development Bank of Pakistan(IDBP)
• Punjab Provincial Cooperative Bank
• Federal bank for Cooperatives
P RIVATE S CHEDULE B ANKS
• Askari Commercial Bank Ltd
• The Bank of Khyber
• The Bank of Punjab
• Union Bank Ltd
Trang 11F OREIGN B ANKS
• ABN AMRO Bank N.V
• Albaraka Islamic Bank BSC (EC)
• American Express Bank Ltd
• ANZ Grindlays Bank Ltd
• Bank of America (NT & SA)
• Bank of Tokyo Mitsubishi Ltd
• Bank of Ceylon
• Banque Indosuez
• Citibank N.A
• Credit Agricole A.G
• Deutche Bank A.G
• Doha Bank Ltd
• Emirates bank International Ltd P.J.S.C
• Habib Bank A.G Zurich
• Hong Kong and Shangai Banking Crop Ltd
• International Finance Investment and Commerce Bank Ltd
• Mashreq Bank PSC
• Oman International Bank SOAG
• Rupali Bank Ltd
• Societe Generale, the French Int Bank Ltd
• Standard Chartered Bank
• Trust Bank Ltd
Trang 12D EVELOPMENT F INANCIAL I NSTITUTIONS (DFI S )
• Investment Corp of Pakistan
• National Development Finance Corp
• Pakistan Industrial Credit and Investment Corp
• Pak Kuwait Investment Company
• Pak Libya Holding Company
• Regional Development Finance Corp
• Saudi Pak Industrial & Agricultural Investment Corporation
• Small Business Finance Corporation
• House Building Finance Corporation
• National Investment Trust
I NVESTMENT B ANKS
• Crescent Investment Bank
• First International Investment Bank
• Atlas BOT Investment Bank
• Security Investment Bank
• Fidelity Investment Bank
• Prudential Investment bank
• Islamic Investment Bank
• Asset Investment Bank
• Al-Towfeek Investment Bank
• Al-Faysal Investment Bank
Trang 13• City Corporation Investment Bank (Pak) Ltd
• Franklin Investment Bank Ltd
• Orix Investment Bank (Pak) Ltd
• Trust Investment Bank Ltd
HISTORY OF THE MCB BANK LIMITED
Before separation of Indo Pak, the need for more Muslim banks was felt And Muslims having strong financial capacity were thinking to invest in this sector as well This was the idea which paved the way for setting up MCB Bank Ltd known as MCB This was the third Muslim bank in the subcontinent
HISTORY
This bank was incorporated under companies’ act 1913 on 9th July,
1947 (just before partition) at Calcutta But due to changing scenario of the region, the certificate of incorporation was issued on 17th August, 1948 with a delay of almost 1 year; the certificate was issued at Chitagong The first Head office of the company was established at Dacca and Mr G.M Adamjee was appointed its first chairman It was incorporated with an authorized capital of Rs 15 million
After some time the registered office of the company was shifted to Karachi on August 23rd, 1956 through a special resolution, now recently the Head office of MCB has been transferred to Islamabad in July, 1999 and now Head office is termed as Principle Office
Trang 14This institute was nationalized with other on January 1st, 1974
At that time it had 506 branches and deposits amounting to Rs 1,640 million Although MCB has a reputation of a conservative bank but nationalization also left its effects on this institute as
well and by end of year 1991 in which it was privatized the total number of branches were 1.287 and deposits amounting to as high
as Rs 35,029 million
PRIVATIZATION
When privatization policy was announced in 1990, MCB was the first to be privatized upon recommendations of World Bank and IMF The reason for this choice was the better profitability condition of the organization and less risky credit portfolio which made'' it a good choice for investors On April 8th, 1991, the management control was handed over to National Group (the highest bidders) Initially only 26% of shares were sold to private sector at Rs 56 per share
AFTER PRIVATIZATION
Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer
After privatization, the growth in every department of the bank has been observed Following are some key developments:
Trang 15• Launching of different deposit schemes to increase saving level
• Increased participation on foreign trade
• Betterment of branches and staff service level
• Introduction of Rupee Traveler Cheques & Photo Credit Card for the first time in Pakistan
MCB BANK TODAY
MCB today, represents a bank that has grown with time, experience and Pakistan A major financial institution, in scope and size, it symbolizes a fully growing tree evergreen, strong, and firmly rooted
FOREIGN TRADE
The bank conducted import business during the year amounting to
RS 54.0 billion as compare to RS 56.4 Billion In 2005 The export business slightly improves to RS 36.9 Billion From RS 35.1 Billion In 2006 Home remittances decline to RS 16.7 Billion From 30.7 Billion the decline in home remittances business was due to freezing of Foreign Currency Accounts, which has affected the confidence of Pakistanis working overseas
YEAR 2006 COMPLIANCE
Trang 16MCB’s strength lies in providing a technological base at the gross root level of the society with a challenge to educate and assimilate such systems across vast cultural and economic backgrounds With over 768 automated branches, 263 online branches, over 151 MCB ATMs in 27 cities nationwide and a network of over 16 banks on the MNET ATM switch, MCB continuously innovates new products and services that harness technology for the customer’s benefits.
SOCIAL SECTOR
The bank activity participating in the Prime Minister employment Scheme The application received from various applicants is being processed on merit and disposed off as quickly
self-as possible.
THE BUSINESS
MCB is in it’s over 50 years of operation It has a network of over 1,000 branches all over the country with business establishments in Sri Lanka and Bahrain The branch break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) and Blochistan (3%) respectively
MCB has an edge over other local banks, as it was the first privatized bank The State Bank of Pakistan has restricted the number of branches that can be opened by foreign banks, an advantage that MCB capitalizes because of its extensive branch network
Fourteen years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and
Trang 17prepare the groundwork for future growth The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer
MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking Corporate clientele includes public sector companies as well as large local and multi national concerns MCB is also catering to the growing middle class by
Providing new asset and liability products The Bank provides 24 hour banking convenience with the largest ATM network in Pakistan covering 27 cities with over 151 ATM locations The Bank’s Rupee Traveller Cheques have been market leaders for the past six years and have recently launched their Gift Cheque Scheme
MCB looks with confidence at year 2007 and beyond, making strides towards fulfillment of its mission, "to become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work"
A major achievement of MCB is that the state bank of Pakistan has issued a license to MCB to start Islamic banking Now MCB is setting up a 1st Islamic banking branch at 1st floor shaheen complex, Karachi This complex starts working from September 1, 2003
Trang 18Vision Statement
CHALLENGING AND CHANGING THE WAY YOU BANK
Trang 19Mission 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
Trang 20Our Core Values
EMPLOYEE RESPECT & DIGNITY
We treat each of our employees with fairness, which includes giving constructive feedback for their development We celebrate diversity and seek suggestions from all employees for improvement We ensure that responsibility & fairness in all our decision-making
TEAM BASED APPROACH
Trang 21QUEST FOR QUALITY
We ensure that each moment of our time is spent on value adding activity We always seek ways for exceeding expectations of customers & colleagues We also ensure that we do things right, first time every time
GOOD CORPORATE CITIZENSHIP
We ensure that we contribute our due share to the Govt we realize that we have a responsibility to the society in which we operate & we seek ways of playing a positive role for the betterment of the community at large
We work towards achievement of our vision & mission as a
combines group We encourage inter &
intra-departmental communications We treat our colleagues as
our internal customers & ensure that the requirements of
internal customer focus are always met
Trang 22Management Committee
Trang 23Board of Directors
Mian Mohammad Mansha Chairman
S.M Muneer Vice Chairman
Mohammad Aftab Manzoor President & Chief Executive
Tariq Rafi Director
Trang 24Sheikh Mukhtar Ahmed Director
Mohammad Arshad Director
Shahzad Saleem Director
Mian Umer Mansha Director
Sarmad Amin Director
Trang 25Audit Committee
Mian Mohammad Mansha Chairman
Shaikh Mukhtar Ahmed Member
Shahzad Saleem Member
Chief Financial Officer
Trang 26Chartered accountants mandiwalla & zafar
Advocates & legal consultants
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
Trang 27ORGANIZATIONAL HIERARCHY OF MCB
PRESIDENT
EXECUTIVE VICE PRESIDENT
SENIOR EXECUTIVE VICE PRESIDENT
SENIOR VICE PRESIDENT
OFFICERS GRADE
I II III
VICE PRESIDENT
ASSISTANT VICE PRESIDENT
Trang 28MANAGEMENT LEVEL
The organization chart within a department and in different offices is as follows:
Divisional Heads ……… ……… Head Office
Regional Head (EVP) ……… ……… Regional OfficeZonal Head (VP) ……… ……… Zonal OfficeBranch Manager ……… ……… Branch
(VP, AVP, GRADE 1, 2, 3)
CASHIER
PEONS
Trang 29ORGANIZATIONAL SETUP OF MCB
PUNJAB
NWFP & AZAD KASHMIR
SINDH
BALOCHISTAN
KARACHI LAHORE
PESHAWAR
PROVINCIAL HEAD QUARTERS
QUETTA HEAD QUARTER
CIRCLE OFFICES
KARACHI
Trang 30ORGANIZATIONAL STRUCTURE OF MCB
As MCB is a banking company listed in stock exchange therefore
it follows all the legalities which are imposed by concerned
statutes Mr Muhammad Mansha is chairman & chief executive
of the company with a team of 10 directors and 1 vice chairman to help in the business control and strategy making for the company
Operational Management of the bank is being handled by a team
of 10 professionals This team is also headed by Mr Muhammad Mansha The different operational departments are Consumer Banking & IT div; Financial & Inter branch div; Banking operations div; HR & Legal div; financial control & Audit div; Credit management div; Commercial Banking div; Corporate Banking div; Treasury management & FX Group and lastly Special Assets Management (SAM) Group
Trang 31For effective handling of branches, it has been categorized into three segments with different people handling each category These categories are:
Usually branches in large markets and commercial areas come under this category
Consumer Banking
These are the branches which have exposure up to Rs 20 million and these include all the branches which are neither corporate nor commercial branches
Trang 32Recently the organizational structure was re-designed as follows: Province wise branches
20 branches 637 branches 383 branches
MARKETING MIX OF MCB BANK LIMITED
Marketing is the task of creating, promoting and delivering goods and
services to consumers and businesses Organizations identify and profile distinct group of buyers who might prefer or require varying products and marketing mixes The customer seeks for value and satisfaction The organizations can increase the value of the customer offering in several ways e.g raising benefits, reducing costs etc marketing mix is a set of marketing tools that the firm uses to pursue its marketing objectives in the target market These marketing tools are known as 4 p’s of marketing These four marketing tools are viewed as 4c’s by the consumers.
Price Customer Cost Place Convenience Promotion Communication
Trang 33To identify the customer needs and fulfilling hem is the basic objective
of an organization Marketing is not just satisfying your customers, you have to delight them and this can be done by acting upon this phrase “Under Promise and Over Deliver”
MCB Bank provides a winning combination of products and services to its prime customers It is one of the country’s leading commercial banks, which ensures complete security, and reliability in all-financial transactions.
PRODUCT MIX & PRICES OF MCB BANK
1 MCB Rupee Traveler Cheque
MCB Rupee Travelers Cheques are as good as
cash, infact better Better because with
Rupee Travelers Cheques you have the power
to purchase and a feeling of security that should you lose them, you will get a refund
MCB Rupee Travelers Cheques are accepted at major shops, travel agents, hotels, business establishments and MCB branches all over Pakistan You don't have to be an MCB account holder to buy the Rupee Traveler Cheques Anybody can purchase them It's a safe and convenient way to conduct everyday business At a time when thefts and robberies are on the increase, you are better off carrying Travelers Cheques rather than money
Trang 342 Mahnama Khushali Scheme
A 5- year fixed Deposit Scheme, targeted to persons with small savings who would desire a regular monthly return on their investment
Salient Features
• Minimum amount of investment shall be Rs.0.010m and the maximum amount of investment would be Rs 1.000m
• Khushali Certificates can be purchased by individuals (singly
or jointly) or by the Proprietorship/Partnership concerns or Companies, etc in their name
• The Khushali Certificate will be of five years maturity
• The interim rate of profit offered will be minimum 1% per month If the profit declared by the bank is higher, additional profit will be paid
• Zakat will be deducted wherever applicable on yearly basis whether you will be receiving your profit or encashing your certificates
• As per Government Directions, tax on the profit / return is
to be deducted by MCB branches at the time of payment
3. MCB Khushali Bachat Account
Salient Features
Trang 35• 8% rate of return per annum.
• Returns calculated on daily
• Average balance and paid half yearly
• Introduced first time in Pakistan
• The facility of helping account holders pays utility bills (electricity, telephone and gas) through their account No queues No delays.
4. Prime Currency Account
Scheme
Launched to attract deposits in foreign
currencies US Dollars, Pound Sterling, Euro and Japanese Yen
Salient Features
• Owing foreign currency account under the Prime Currency Scheme allows you to earn attractive rates of interest in foreign currency
• You have a choice between opening this account in your personal name and opening it under joint names
• Whether you are a resident or a non-resident Pakistan, MCB Prime Currency Scheme invites all to operate a foreign currency account
Trang 36• Foreign nationals and foreign companies can also open a foreign currency account under the Prime Currency Scheme.
• Your foreign currency account can be opened in four global currencies: The United States Dollar, the Pound Sterling, the Japanese Yen and the Euro
• Travellers Cheques and Foreign Currency Notes can also be issued to holders of persona! and Joint accounts
• Rupee Loan facility will also available against this account
• You can draw any amount of foreign exchange from your foreign currency account and transfer or remit the amount freely to any part of the world without any restrictions
• The restrictions imposed by the State of Pakistan for the opening of foreign currency accounts in case of passport; Work-permit and resident Visa have been withdrawn Your account will be restriction free
• The Prime Currency Scheme is exempt from al! forms of taxes including Income Tax, Wealth Tax and Zakat deductions
• MCB Prime Currency Scheme is a world in itself
5. Hajj Mubarak Scheme
A saving scheme, of 2/3 years duration, for the convenience of persons, with a limited income, who desire to perform Hajj was introduced
Trang 37Under the 2 years scheme, a monthly deposit of Rs.1800 is required, whereas under the 3 years scheme, the required monthly deposit is only Rs.1200
6. Capital Growth Certificate Scheme
For long term depositors under which the amount deposited almost doubles at the end of 5 years For the scheme, the minimum amount of deposits is Rs 10000 while there is no maximum limit In case of premature encashment of the certificate, the depositor will profit at the same rates as that of
PL Saving Account
7. Fund Management Scheme
This scheme is offered to corporate and customers and is aimed
at providing better rate of return up to 15% per annum One of the objectives of the scheme is to develop secondary market for Government Securities
8. Consultancy Services
In the process of privatization of public sector units, prospective buyers need professional assistance and MCB, with its expertise, offers to them specialized service for valuation of the market value of the industrial unit, preparing bid documents and arranging finance for the purchase of the unit
Trang 389. Self Supporting Scheme
For the benefits of genuine worker/borrowers who are poor and needy and for small entrepreneur the bank as evolved a self supporting scheme: maximum amount of loan Rs.25000 and minimum Rs.5000 per individual Loan will be totally free of mark-up
10.Fax Press
This product was first of its kind introduced
by using modem technology of The Fax
Machine It facilitates speedy transfer of
funds within Pakistan The service
guarantees transfer of from one city to another, within an hour
11.Night Banking Service
For the convenience of the account holder, service has, especially, been introduced at busy commercial centers Traders and other clients can now make deposit, with case, at such centers up to 8.00PM
12.Utility Bill Collection
With the aim of extending this service to wider range of customers, the number of MCB branches collecting Utility Bills more than 900
Trang 3913. MCB Mobile Banking
At the forefront of technological excellence, MCB proudly introduces MCB MOBILE BANKING* The convenience of accessing account balance information and mini statements whenever want or wherever may need them, with comfort and peace of mind
MCB Mobile Banking service is available to all MCB ATM cardholders, 24 hours - 365 days
MOBILE BANKING AT A GLANCE
MCB Mobile Banking gives easy and quick access to account(s) at a time find convenient, including all holidays
• WITH MCB MOBILE BANKING
Trang 40Islamic banking services through exclusive units/branches offering a range of liability and asset based Sharia compliant products like Musharika, Murabaha, Ijara and Istasana
15. MCB Car Cash
Car financing and leasing at competitive rates with flexible options Car cash finances both semi-commercial and non-commercial vehicles for personal and business use
THE FUTURE OF MONEY
Since the beginning of time, people have
tried to find more convenient ways to pay, from gold to paper money and checks Today, money is moving away from distinct hard currencies and towards universal payment products that transcend national borders, time zones, and, with the Internet, even physical space
Plastic or "virtual" money, credit, debit, and electronic cash products, inevitably will displace cash and checks as the money of the future