internship report on MCB bank ltd 2011

internship report on MCB bank ltd 2011

The Internship Report on

MCB Bank Ltd

I NTERNSHIP R EPORT ON MCB B ANK L TD

PREFACE

Internship is an integral part of B.Com (HONS) program For the sake of internship the most initial thing is to have a practical experience This effort may get as a student to get a practical experience if right organization is selected During this internship, a student comes to particle knowledge He learns what the has so far studied As a B.Com (HONS) student I have also done my internship in MCB Bank Ltd Sargodha Here I come to know

a different and very interesting experience of learning and working with people First of all

I will tell you about Bank then I will tell operations of different departments

This internship report is specially meant for the students of B.Com (HONS) It is concerned

to a brief study of operation, functions, tasks and services of the MCB Bank Ltd Banking play very important role in the commerce and economic development of any country Now-a-days banks are using different modern technologies which influence the managerial activities that are why I decided to do my internship training in the bank

In preparation of this report I have tried my best to provide all possible information about the operation, functions, task and the corporate information of the MCB Bank Ltd in brief and comprehensive way This internship ends with some recommendations after identification of problems that I observed during the course of my internship training

Ali Raza Sahni

I NTERNSHIP R EPORT ON MCB B ANK L TD

Acknowledgement

Most grateful to Almighty Allah who enabled me to utilized my knowledge and skills for the preparation and completion of this internship report I want to express my most humble gratitude to my supervisor and all other teachers and class fellows who furnished me with the opportunity to complete report I m also thankful to the manager Mr Rashid Iqbal of MCB, Girls College Road Branch, Sargodha I am also grateful to my colleagues and friends who provided with the moral support during the completion of this report

Ali Raza Sahni

EXECUTIVE SUMMARY

The banking structure in Pakistan comprises of the following types, State Bank of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks, specialized credit institutions The state bank of Pakistan is the Central bank of the country and was established on July 01, 1948 The network of bank branches now covers a very large segment of national economy The State Bank of Pakistan issues the shares of these periodically Bank employees and other common people can also purchase these shares and earn profit In 1956, MCB transferred its registered office to Karachi, where the Head Office is presently located In April 1991, MCB became Pakistan‟s first privatized bank The corporate branch at Shahrah-e-Faisal Karachi (SFK) branch is the corporate branch of MCB in Karachi The bank is using SWIFT for transfer of information about imports and exports

MCB SFK branch has Currently Following three Departments General Banking Department, Advances Department & Foreign Exchange Department To open an account the customer has to meet the general banking manager with an introducer The procedure begins with the punching of account opening form to the customer file i.e customer‟s master file Before closing any account, bank send letter to the account hold for informing him that his account is going to be closed There is need an approval form higher authority

to close any account Current deposits are those which are payable to bank whenever demanded by the customer

Bank does not pay any profit on current deposits The following are the financial products/services of MCB Malay Mail Scheme, PLS Account, Saving 365 Account, Capital growth certificate scheme, Fund Management Scheme, Khushali Bachat Account, Term/ Fixed Deposits and others like night banking, credit cards, traveler cheques In remittance department like any other bank MCB also have instruments for transferring of money, Telegraphic Transfer, Mail Transfer

In cash department both deposits and withdrawals go side by side This department works under the accounts department and deals with cash deposits and payments This department maintains the following sheets, books, and ledger of account cash received voucher sheet Cash paid voucher sheet, Paying- in-slip, Cheque Book, Cash balance book The clearing in

I NTERNSHIP R EPORT ON MCB B ANK L TD

Karachi at MCB or other banks is being done through NIFT (National Institute of

Facilitation Technology) Bank provides this facility to the people who need advance money to meet their requirement

Party dealing with other banks financial condition of borrower business and as a first step credit proposal is being made MCB provides advances, which are of two types Secured Advances, Unsecured Advances MCB usually classified advances in to following types Agricultural Advances, Commercial Advances Industrial Advances Commercial Advances are of following types Demand Finance, Cash Finance, Foreign bills purchased, Finance against imported goods, Finance against foreign bills, Export Refinance Part I (Pre Shipment) & others Banks Agriculture division deals with the agriculture advances Bank provides the Agriculture Advances in order to enhance and support the agriculture sector of the country Farm Credit & Non Farm Credit In foreign exchange, MCB is dealing Foreign Currency Accounts, Foreign Remittances, and Foreign Bills for Collection, Imports & Exports Foreign currency accounts & the foreign currency department deals with the following types of accounts, Dollar Khushali account, Current account, Saving bank account, Term deposit, Prime Currenc y Scheme Foreign accounts are convertible on floating rate available to the bank Letter Of Credit facility is being provided by MCB in foreign exchange

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

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 Chittagong The first Head office of the company was established at Dacca

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 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 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:

 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

I NTERNSHIP R EPORT ON MCB B ANK L TD

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

COMPALINCE YEAR 2006

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 innovates new products and services that harness technology for the

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 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

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 1stfloor shaheen complex, Karachi This complex starts working from September 1, 2003

I NTERNSHIP R EPORT ON MCB B ANK L TD

 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

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

 QUEST 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

Board of Directors

Mian Mohammad Mansha Chairman

S.M Muneer Vice Chairman

Mohammad Aftab Manzoor President & Chief Executive

I NTERNSHIP R EPORT ON MCB B ANK L TD

Sheikh Mukhtar Ahmed Director

Mian Ume r Mansha Director

Audit Committee

Mian Mohammad Mansha Chairman

Shaikh Mukhtar Ahmed Member

Chief Financial Officer

Chartered accountants Mandviwalla & Zafar

Advocates & legal consultants

Shariah Advisor

Dr Muhammad Zubair Usmani

I NTERNSHIP R EPORT ON MCB B ANK L TD

ORGANIZATIONAL HIERARCHY OF MCB

PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

OFFICERS GRADE

I II III

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

CASHIER ASSISTANTS

PEONS

MANAGEMENT LEVEL

The organization chart within a department and in different offices is as follows:

Divisional Heads ……… ……… Head Office

Regional Head (EVP) ……… ……… Regional Office

Zonal Head (VP) ……… ……… Zonal Office

Branch Manager ……… ……… Branch

(VP, AVP, GRADE 1, 2, 3)

ORGANIZATIONAL SETUP OF MCB

PUNJAB

NWFP & AZAD KASHM IR

SINDH

BALOCHISTAN

KARACHI LAHORE

PESHAWAR

PROVINCIAL HEAD QUARTERS

QUETTA HEAD QUARTER

CIRCLE OFFICES

BRANCH OFFICES

KARACHI

I NTERNSHIP R EPORT ON MCB B ANK L TD

ORGANIZATIONAL 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 M r Muhammad Mans ha 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

For effective handling of branches, it has been categorized into three segments wit h different people handling each category These categories are:

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

Recently the organizational structure was re-designed as follows:

Province wise 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 produc ts 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

To 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, whic h ensures complete security, and reliability in all- financial transactions

I NTERNSHIP R EPORT ON MCB B ANK L TD

PRODUCT MIX & PRICES OF MCB BANK

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

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.6

MCB Khushali Bachat Account

Salient Features

 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

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

 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

I NTERNSHIP R EPORT ON MCB B ANK L TD

 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

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 Under 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

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

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

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

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 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

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

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

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

I NTERNSHIP R EPORT ON MCB B ANK L TD

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

 Check balance

 View the last 4 transactions of your MCB account(s)

 A FREE SERVICE

MCB Mobile Banking is a free service for MCB account holders who have an ATM card

of an SMS message if charged by the service provider

 BANKING AT FINGERTIPS

Dial in anytime to get information regarding balance and mini statements

 MCB Islamic Banking Services

Islamic banking services through exclusive units/branches offering a range of liability and asset based Sharia compliant products like Musharika, Murabaha, Ijara and Istasana

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

MasterCard International has expanded globally in more locations in the world than any other card The card was introduced by MCB Bank Limited in 1995 and now offers card

members over 15 million outlets in 232 countries

 Photo security- The first bank in Pakistan to introduce the enhanced feature of

photograph on the card limiting fraud in case of card loss

 Welcomed at over 3, 000 outlets in Pakistan

 Provides up-to 45 days Free Credit

 Joining and Annual Fees to suit you

 24 Hour Customer Services- Call 111-700-700 and you can get information from

our customer services representatives on new card application or have your queries resolved anytime of the day

 Cash Advance Facilities

Available in Pakistan and worldwide with a network of over 1,000 branches and a team of dedicated professionals, MCB is Pakistan‟s largest private sector commercial bank

Our Consumer Banking provides customers with innovative saving schemes, products and services Our ATM network is the largest in Pakistan and our Pak Rupee Tra velers Cheques are market leaders We were the first to introduce the photo card with the introduction of the MasterCard

I NTERNSHIP R EPORT ON MCB B ANK L TD

Our Corporate Banking ensures assistance from a dedicated team of professional financial advisors for underwriting, project finance or corporate advisory services

When it comes to banking practices, you can depend on us We‟ve been around for over fifty years

 MCB Smart Card

MCB now brings you MCB Smart Card -a secure

and convenient instrument of payment with

unmatched functionalities It provides 24-hour direct

access to your bank account

The convenience and flexibility of MCB Smart Card will help live a smarter life It not

only helps you manage your expenses, but also avoids undue interest on your day to day credit card transactions

Your balance is always within your reach and you spend accordingly

MCB is the only bank to introduce a debit card that gives the option to choose from domestic and international card for local and global usage respectively

 Remit Express

Fastest to Pakistan - Anywhere in Pakistan

The fastest way of getting your money across to

Pakistan Remit Express offers low cost remittance

from U.A.E and Saudi Arabia Your relatives,

friends or business associates receive drafts within

72 hours.MCB Remit Express has been specifically designed to meet the needs of the expatriate Pakistani community residing in the Gulf countries

 Easy Personal Loan

Helping You Do More

MCB Easy Personal Loan provides you with the financial advantage to do things you've always wanted to but never had the sufficient funds for Take that much-needed holiday Buy a car Refurnish your house Purchase a new TV Finance a better education for your children

Salient Features

 MCB will lend you any amount, from Rs 30,000 to Rs 490,000, depending upon your net monthly income

 You can choose tenure of 1 to 3 years for the repayment of the loan

 Bank to Bank Balance transfer

 Credit Card balance transfer

 Loan Protector Shield- insurance coverage of balance loan amount in case of death

or permanent and total disability

 Availability of early repayment option

I NTERNSHIP R EPORT ON MCB B ANK L TD

 Processing fee of 1% of the principal loan amount to be charged at the time of loan disbursement

 MCB Pyara Ghar

MCB gives dream home at the lowest and best

possible mark-up rates You can choose either one of

our two mark- up rate options- fixed or variable

Early repayment option tailor- made to allow making partial prepayments at dates that suit

Who Can Apply

Anyone who fulfills the following criteria is eligible to apply:

 Pakistani national residing in the city and area where the product is launched

 25 years old or above when you apply and under 60 at the time of maturity of the applied financing period

 Salaried person, self-employed professional or a businessman with a verifiable monthly income stream

 Net take -Home income not less than Rs 25,000 per month

 Have 5 years or more of business or professional experience

 Employed with the present employer for 2 years with a total employment history of 5 years

 Home Purchase Home Renovation Home Construction

 Tenure 3 years to 15 years 2 years to 5 years 3 years to 15 years

 MCB Virtual

MCB Virtual provides the continence of banking on

internet Whether at office or home or traveling Log on

at www.mcb.com.pk and enjoy 24 hours access of all

 MCB Business Sarmaya

MCB Business Sarmaya is a running finance against your residential property It offers running finance up to 20 millions with low markup

 MCB Car 4 U

MCB car 4 u auto finance is a power move that gets you

not only a car of your own choice but leads you best in

life It is affordable with competitive markup, flexible

conditioning and easy processing and above all no hidden cost

PLACING STRATEGIES OF MCB BANK

The location of the bank plays a

vital role in making its operations

profitable If the bank is located in

some business center then it will be

very easy for it to attract business

people as its customers Therefore

MCB has most of its branches at

places where it can reach its targets customer easily The branch network of MCB is given

I NTERNSHIP R EPORT ON MCB B ANK L TD

PROMOTION STRATEGIES OF MCB BANK

MCB Bank is actively participating in promotion of its products and services through advertisement and other promotional schemes

Initially, the bank focused on the upper class customer‟s only and offered products for a limited class of people But now the strategy has been changed and the bank is now targeting the middle market also The products offered are of diverse nature to cater the needs of maximum number of people

Custome r Oriented Attitude

MCB Bank values its customers Customers‟ complaints are encouraged because it gives an opportunity to know the needs of the customer and build more confidence in them

Most of the promotional efforts are done through

 Direct marketing

 Public relations

MCB bank sometimes gets suggestions and recommendations from its good customers Branch layout is being designed in such a way that more and more customers are attracted Some of the branches of MCB Bank have a very good entrance and outlook but many still need to be improved

My Internship experience

&

FIELDS OF ACTIVITIES

Which I observed and done

The purpose of banks is to provide some services to the general public And for this purpose different banks provide different services to the people in different forms The MCB Bank is a commercial bank, in modern time commercial banks play a very important role and their functions are manifold The main functions and services which MCB Bank Limited provides to different peoples are as follows

 Undertaking of agency services and also general utility functions, few of those are

as under

 Collecting cheques and bill of exchange for the customers

 Transfer of money from place to place

 Acting an executor, trustee or attorney for the customers „Providing safe custody and facilities to keep jewellery, documents or securities

 Issuing of travelers cheques and letters of credit to give credit facilities to travel

 Accepting bills of exchange on behalf of customers

 Purchasing shares for the customers

 Undertaking foreign exchange business

 Furnishing trade information and tendering advice to customers

For proper functioning of branches and the over all bank has been divided in different departments These departments handle different jobs so that division of work is there for improvement of functions and also it is easy to control the situation The general division in

a branch is as follows:

(i) Cash department

(ii) Deposit department

(iii)Advances & credit department

(iv) Remittance department

(v) Technology department (new addition in order to cop with the growing needs of day to day technology requirements)

CASH DEPARTMENT

The following books are maintained in the Cash Department:

 Receiving Cash Book

 Paying Cash Book

 Token Book

 Scroll Book

 Cash Balance Book

When cash is received in counter, it is entered in the Scroll Book and Receiving Cashier Book At the close of the day, these are balanced with each other

I NTERNSHIP R EPORT ON MCB B ANK L TD

When the cheque or any negotiable instrument is presented at counter for payment, it is entered in the token book and token is issued to the customer The token clerk and the Cashier make entries in the paying book and payment is made to payee At the close of day, the Token Book and Paying Cashier Book are balanced

The consolidated figure of receipt and payment of cash is entered in the cash balance book and drawn closing balance of cash

Opening Balance + Receipts - Payments = Closing Balance

This is very important department because cash is the most liquid asset and mostly frauds are made in this department, therefore, extra care is taken in this department and nobody is allowed to enter or leave the area freely Mostly, cash area is grilled and its door is under supervision of the head of that department All the books maintained in this department are checked by an officer

DEPOSIT DEPARTMENT

Bank deals in money and they are merely mobilizing funds within the economy They borrow from one person and lend to another, the difference between the rate of borrowing

lending forms their spread or gross profit Therefore we can rightly state that deposits are

the blood of the bank which causes the body of an institution to get to work These deposits

are liability of the bank so from point of view of bank we can refer to them as liabilities

The total deposits of MCB are growing since its inauguration but after privatization there is

a sharp incline in over all deposits of the bank The increase in deposits is also a cause of increase on total number of accounts; bank has progressed in both aspects

TYPES OF DEPOSITS

Deposits can be segregated on two bases, one is the duration in which there funds are expected to be with the bank and second is the cost of getting these funds So divide

deposits in two classes according to duration of deposits i.e

(i) Time deposits / liabilities

Banks has different kinds of deposit schemes in order to induce deposits These schemes

are a mixture of the above mentioned two types of deposits with an addition of different

services & requirements such as minimum balance' requirement, mode of transaction, basis for calculation of profit, deductions, additional benefits, eligibility for different groups

In the similar fashion, MCB has a large variety of deposit schemes and some of them are as follows:

PLS ACCOUNT

This type of account is for those persons who want to make small savings' This type of

account is opened with a minimum deposit of Rs 1000/- Under this scheme deposits can be

made only up to a-costing amount and withdrawals are allowed twice a week or 8 times a month If a big amount is required a seven days notice is required before the withdrawal The profit is paid on these accounts on the minimum balance during a month for the whole

of that month Zakat & other withholding taxes are deducted as per rules of the government

Zakat and withholding taxes are deducted as per rules only at the time of maturity while making payment to the customer

Term Deposits Receipts

This is a type of term deposit in which a receipt is issued for varying tenors ranging from 1 month to 5 years or more These are in the form of receipts and profit on these receipts is paid biannually These receipts are encashable after expiry of the period for which they were issued Different profit rates are applied to different type of TDRs

I NTERNSHIP R EPORT ON MCB B ANK L TD

FUNCTIONS OF DEPOSIT DEPARTMENT

This was a brief review of different types of deposit schemes The Deposit Department handles the account opening, profit payment and accounting of all types of deposit schemes

Account Opening

Account opening is an agreement in which customer offers his funds and bank accepts these funds, therefore the nature of relation between a banker and customer is of a contractual one and all the conditions applicable to this contract act are also applicable

Profit payment & calculation

Profit payment & calculation is done in accordance with the rules of each type of deposit scheme-by the deposit department The products for each deposit scheme are calculated separately and added till the end of 6 month period Then the sum total of these products is multiplied with the respective profit rates which are issued by the Head Office at the end of each half yearly closing The profit provisions for each type of deposits are also calculated

on monthly basis by the same department in order to calculate the net profit or loss position

A clearing house is a place where representative of all banks of the city get together and settle the receipts and payment of cheques drawn on each other As the collecting banker

The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a cheque or draft may cross the instrument generally or specially It further lies down that a crossed cheque can only be paid to a banker, who collects it for a customer in good faith and without negligence

Types of Cheques

 Transfer cheques: are those cheques, which are collected and paid by the same branch

of bank Both parties have account in the same bank

 Transfer delive ry cheques: are those cheques, which are collected and paid by two

different branches of the same bank situated in the same city

 Clearing cheques: are those chequnes, which are drawn on the branches of some other

bank of the same city or of the same area, which is covered by a particular clearing house

 Collection cheques: are those cheques, which are drawn on the branches of either the

same bank or of another bank, but those branches, are not in the same city or they are not the members of clearing house.( out station cheques)

Functions of Clearing Department

 To accept Transfer, Transfer delivery, clearing and collection cheques from the customers of the branch and to arrange for their collection

 To arrange the payment of cheques drawn on the branch and given for collection to any other branch on MCB or any other members or sub member of the local clearing house

 To collect amount of cheques drawn on members, sub-member of local clearing house, sent for collection by MCB Branches, not represented at the local clearing house

 Receiving and scrutinizing the cheques and other deposit instruments, and the in-slip at the counter.(verify by the way of a/c number and a/c title)

pay- Fixing the stamps

 Scrutiny and receipt by the authorized officer

 Returning the counter file to the depositor

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 Certificate and confirmation by the officer in charge of the department

 Separating the cheque into transfer, transfer delivery(same bank diff branch), and clearing cheques

CLEARING PROCESS (FLOW CHART)

Cheque with slip taken

Cheque along with slip checked, signed &

received by officer

The same day not honored cheques are

returned to Main Branch

The day after tomorrow the banks are informed

about dishonored cheques

Provisional entries for returned cheques are debited again in both computer & daybooks

Party is informed about returned cheques

Slip is asked & filled

Entries in daybooks are made

Entries checked & verified by another officer

after banking hours by officer

Cheques collected at the day end by Main

Branch’s Officials

Cheques are sent to respective banks next day after posting in computer by Main Branch

ADVANCES DEPARTMENT

Advances are the most important source of earning for the banks MCB is also giving full attention towards this aspect and it is also obvious from the growing portfolio of advances and from very low delinquency rate The credit portfolio of this institution is in a very much better shape than other financial institutions of Pakistan and the credit goes to the management and the staff who are concerned about the quantity and quality as well

The borrower withdraws whole the amount of loan This type of loan is normally granted against security of gold documents

In case of demand loans against gold or documents, a demand promissory note for the amount of loan is taken from the borrower loans are granted under;

LOAN AGAINST GOLD

Under this type of loan, which is granted to the borrower the Head Cashier estimates the value of Gold or Gold ornaments through an agent (Gold smith) and keeps a margin of 40

to 50 percent After the opening the gold loan account a token is given to the borrower, which is a bank receipt

On repayment of loan, the gold or ornaments held as security for it, together with the demand promissory note duly discharged is returned to the borrower and his receipt for the gold ornament taken in the demand loan ledger This receipts states that he ornaments returned are complete and in order Part delivery of ornaments is given against part payment of a loan but care is taken that the ornaments still in banks possession fully covers the balance of the loan outstanding The interest gold loan is to be applied with quarterly

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LOAN AGAINST PLEDGE OF STOCKS

In case of advancing such types of loans, the following precautions are kept in the mind:

 Stock pledged must be readily saleable

 Products should be readily saleable

 Advance should be within the borrows means

By Credibility, bank Judges the credibility of the client by his past bank record, CBI report

etc it is very important in making decision about giving him loan

Feasibility report is on the running or proposed business of the client The report enables

the bank to judge the likely return of the business

on cash credit in 46 paisa per thousand on daily basis

The credit is usually given against the securities of goods or merchandize as follows:

ADVANCE AGAINST PLEDGE OF STOCKS

When cash is granted against the pledge of stock or product, cash credit form is taken, from the certain products or stock, but the actual pledge is created when the stock or finished

 Branch Mail transfer form

 Receiving Branch Register copy

 Issuing branch register Copy

 beneficiary advice

 advice to customer

In case where the customer is not account holder of the bank then the customer will have to deposit the amount which he wants to transfer under Mail Then the above said procedure will be done Banks should be same branches can be different

TELEGRAPHIC TRANSFER (TT)

This type of transfer is simple After filling the application form the concerning officer shall fill the telegraphic transfer form Then it is sent to the required bank which on receiving it immediately makes the payment to the customer and afterwards the voucher are sent to that bank by ordinary mail

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DEMAND DRAFT (DD)

Demand draft is just like cheques and issued when the customer wants to take cash with him personally The idea behind is to avoid the risk and burden of currency notes in huge quantity Demand draft can easily be handled whatever a mount it has and the money can easily be taken from the bank when it is presented In fact, the bank persuades the customer

to transfer money by drafts and avoid the risk of frauds involves in MT and T.T Draft is only issued when the bank knows customer a nd bank has the confidence in him

In case of transfer of money by drafts, the customer has to fill an application form Then the concerned officer fills the following forms:

 Customer‟s advice

 Customer‟s debit form

 Register copy

 Cover Advice

FOREIGN DEMAND DRAFT

Foreign Demand Draft is just like demand draft The only difference is that a bank issues FDD to the bank of another country It requires foreign exchange and it involves seven forms, which are to be filled

INFORMATION ABOUT MY BRANCH

Operational Manager Qaiser Waqar

General Banking Officer Ali Shahrukh

Cashier Malik Hassan

Billing Cashier Muhammad Ali

CSO Miss Sundas Gull

ACCOUNT OPENING DEPARTMENT

Account opening and closing is the function of accounts departments Bank‟s customers may be individuals (Single or Joint), firms (partnership/proprietorship), Autonomous corporations, Limited Companies, Charitable Institutions, Associations Educational Institutions or Local Bodies

BASICS TO OPEN AN ACCOUNT

During the span of job in MCB, I learned and observed a lot of about the opening of an account Basically I think that the opening of an account is the establishment of a contractual relationship between the banker and the customer By opening an account at a bank a person becomes a „customer‟ of a bank F urther I am going to express the basic requirements and steps involved in the opening of an account

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INTRODUCTION AND PRELIMINARY INVESTIGATION

Before opening an account MCB as like the other banks in Pakistan ascertain whether or not the person who is going to open the account is a desirable customer or not Then MCB determine the prospective customer‟s integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening Negligence in this informal preliminary investigation may result in serious consequences not only for the banker concerned directly but also for other bankers and the general public who may be affected indirectly

In order to further strengthen and streamline this process, the Federal Ombudsman of Pakistan, vide his ruling on complaint No II/31/5186, has directed the banks to retain with the account opening form a Photostat copy each of the National Identity Cards of the person desiring to open an account as well as that o f the introducer As per these directions, the concerned Branch Managers are required to obtain the original National Identity Cards along with their Photostat copies and then return the original after attesting the authenticity

of the retained copy

Preliminary investigation is necessary because of the following reasons:

Avoid Frauds: In this regard I learned that if a banker does not make the necessary

inquiries mentioned above he may enable dishonest persons to possess cheque books for fraudulent purposes If any such person happens to be an undercharged bankrupt, the banker might be placed in an awkward position for having allowed such a person to open and open a bank account

Safeguard against unintended overdrafts: Sometimes due to a mistake an account may

be given an overdraft, For instance, the ledger keeper, misreading the balance of an account honors a cheque for an amount larger than the balance Similarly a credit entry belonging to

a customer may be made by mistake in another customer‟s account In such situations the excess amount withdrawn by the customer can only be realized if the customer is a respectable person