Professional Documents
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Internship Report MCB
Internship Report MCB
HISTORY OF BANKING
Evolution of Banking
It has not so far been decided as to how the word ‘Bank’
originated. The explanation of this origin is attributed to
the fact that the jews in Lombardy transacted the business
of money exchange on banches in the market place and
when the business failed, the people destroyed the Bank.
Incidentally, the word ‘bankrupt’ is said to have been
evolved from this practice. The opponents of this opinion
argue that it was so, then how is that the Italian
moneychangers were never called ‘Banchierei’ in the
Middle Ages?
Early Growth
Banking in fact is as primitive as human society for
eversince man came to realise the importance of money
as a medium of exchange. Perhaps it was the Babylonians
who developed banking system as early as 2000 B.C. It is
evident that the Temples of Babylon were used as ‘Banks’
because of the prevalent respect and confidence in the
clergy.
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Banking In Pakistan
At the time of independence, there were 631 offices of
scheduled banks in Pakistan, of which 487 were located in
West Pakistan alone. As a new country without resources
it was very difficult for Pakistan to run its own banking
system immediately. Therefore, the expert committee
recommended that the Reserve Bank of India should
continue to function in Pakistan until 30th September 1948,
so that problems of time and demand liability, coinage
currencies, exchange etc. be settled between India and
Pakistan. The non-Muslims started transferring their funds
and accounts to India. By the end of June 1948 the
number of officers of scheduled banks in Pakistan declined
from 631 to 225. There were 19 foreign banks with the
status of small branch offices that were engaged solely in
export of crop from Pakistan, while there were only two
Pakistani institutions, Habib Bank of Pakistan and the
Australasia Bank. The customers of the bank are not
satisfied with the uncertain condition of banking. Similarly
the Reserve Bank of India was not in the favour of Govt. of
Pakistan. The Govt. of Pakistan decided to establish a full-
fledge central bank. Consequently the Governor-general of
Pakistan Quaid-I-Azam inaugurated the State Bank of
Pakistan on July 1, 1948. Thus a landmark was made in the
history of banking when the state bank of Pakistan
assumed full control of banking and currency in Pakistan.
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3) Saving banks.
4) Co-operative banks
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MUSLIM COMMERCIAL
BANK LIMITED
Nationalization
In January 1974, the Government of Pakistan nationalized
MCB following the banks (Nationalization) Act 1947,
Premier Bank Limited merged with MCB.
Privatization
A wave of economic reforms swept Pakistan in the late
1990, introducing the need for privatization of state owned
banks companies. In April 1991, MCB became Pakistan’s
first privatized bank. The government of Pakistan
transferred the management of the Bank to National
Group, a group of leading industrialists of the country by
selling 26% shares of the bank.
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Board of Directors
The board of directors has the authority in guiding Bank
affairs and in making general policies. Some directors are
the personnel of the MCB Bank and others are successful
businessperson and executives of other major
organization. Ten members are included in board of
directors, see in a list.
Directors
Ten directors are:
1) Mr. S. M. Muneer.
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Structure of MCB
EXECUTIVE EXECUTIVE
DIRECTOR DIRECTOR
(continued)
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CONSUMER CORPORATE
BANKING BANKING
GROUP GROUP
GENERAL
MANAGER
REGIONAL
MANAGER
CHIEF
MANAGER
MANAGER
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B ra n c h M a n a g e r
A s s is t a n t
M anager
A c c o u n ta n t
O ffic e r s
C a s h ie r
M essenger
G u a rd
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Reserve Fund/Equity
A sum of Rs. 79.8 million has been transferred to Statutory
Reserve this year, raising the total Reserves to Rs. 1,796.6
million at the end of 1998, from Rs. 1,716.8 million as last
year.
Deposits
Deposits with the Bank at the end of year 1998 stood at
Rs. 123.8 billion as compared to Rs. 124.4 billion in 1997.
The reason for this slight decrease of 0.4% was the
withdrawal of Foreign Currency Accounts as a result of
Deposits
130000
124391 123822
125000
120000
115000 113005
110000
1996 1997 1998
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Advances
Total Advances at the end of 1998 were Rs. 62.9 billion as
compared to Rs. 64.4 billion in 1997 showing a fall of 2.3%.
This is mainly due to the slowing down of economy
following the events described above, as well as, in
keeping with our policy of prudent lending.
Advances
70000
64365
65000 62920
60407
60000
55000
50000
1996 1997 1998
Investments
Investments slightly declined by 0.2%. The current policy
of the management is to dispose off Investment in shares
of listed and unlisted companies at the best possible
prices.
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Investments
60000
58095 57981
55000
50000
47553
45000
1996 1997 1998
Recoveries
The recovery position in the year 1998 was most
encouraging. Bank recovered Rs. 1.04 billion in cash. The
bank also disposed off properties which were acquired in
settlement of accounts. The recovery of loans shall remain
a priority in 1999.
Foreign Trade
The bank conducted Import business during the year
amounting to Rs. 54.0 billion as compared to Rs. 56.4
billion in 1997. The export business slightly improved to
Rs. 36.9 billion from Rs. 35.1 billion in 1997. Home
remittances declined to Rs. 16.7 billion from 30.6 billion.
The decline in home remittances business was due to
Exports Imports
40000 65000 63523
36918
35123
35000 60000
56418
27321
25000 50000
1996 1997 1998
1996 1997 1998
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Human Resources
To induct fresh blood in the bank and cater for future
needs, a new batch of management trainees was selected
strictly on merit. After thorough training these offices have
been inducted in various divisions and branches. Attention
was paid to upgrade operational and managerial skills of
staff and a number of professional courses were conducted
at MCB Staff and Training Institutes during the year. We
have continued our programme of hiring of some senior
level Banking Executives from the market, wherever
necessary.
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Automation
The progress is as per plan. At the end of 1998, 75
branches were online and 241 branches have been
computerized with multi terminal systems. 66 ATMs were
in operation and over 50,000 ATM Cards had been issued.
The commercial cities of Faisalabad and Multan were
added on the MCB ATM Network. Plans are in hand for
expanding the online network to major cities and covering
all the four provinces thereby providing the ATM network
true national coverage and maintaining our in this service.
Social Sector
The bank had been actively participating in ex-Prime
Minister’s Self Employment Scheme (SES). The
applications received from various applicants were being
processed on merit and disposed off as quickly as possible.
Nowadays, no new loans are being granted as per the
order of Chief Executive of Pakistan.
Foreign Operations
Our bank’s foreign operations in Bangladesh and Sri Lanka
continue to remain profitable. In April 1999, the bank
opened its third branch in Sri Lanka at Maradana a suburb
of Colombo.
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Chairman’s Review
1998 was an eventful year for our country. Pakistan joined
the polity of nuclear powers and strategic imbalance
created in the region due to a nuclear test by a
neighboring country was restored.
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ADVANCES DEPARTMENT
MCB provides the facility to the people who need advance
money to meet their requirements. For getting the
advance the following steps are there:
3) Sanction advice
1. Initial Information
Following information is required to be submitted to bank.
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For obtaining credit, party has to submit the last two years
Balance Sheet and Profit & Loss statement duly attested
by authorised auditors. If the party is also involved in
export or import business then the bank also considers the
data of three years about import & export. Current debt
and equity ratio is also calculated by the bank. The type of
data required to prepare the credit proposal is to be
gathered from the different departments. Some data is
obtained from the foreign Exchange department. Some
data is available in Advance Department. The purpose of
obtaining Credit should be explained clearly. The securities
offered by the party to the bank are also evaluated. In
case of pledging of property in shape of land or building
the complete evaluation of the property should also be
attached.
3. Sanction Advice
When the documents required are complete and there is
no ambiguity then the party is advised that their credit or
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♦ Purpose
♦ Security/ Collateral
♦ Margin (%).
♦ Validity
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Types of Advances
MCB provides advances, which are of two types. These are
as following:
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1) Industrial loan
2) Commercial loan
3) Agricultural loan
Industrial Loan
Loans are given to industrial units including cottage
industries up to or less than RS. 20 million. Loans and
advances shall not exceed amount specified by marginal
restriction on the type of securities offered. Industrial
loans are granted to the manufacturing section of the
economy including finance for fixed investments and
working capital requirements of small industries.
Loan Period
Loans are allowed for a maximum period of 5 years
including a maximum grace period of 1 year. In special
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Commercial Loan
Total principal amount of loans to a single
enterprise/borrower shall not exceed RS. 0.5 million.
Maximum maturity is 3 years, depending upon the nature
and type of advances, decided upon case to case basis.
Mark-up
Both for commercial and industrial loan, mark-up will be
charges as per existing rate, subject to changes from time
to time. Presently it is 0.51 RS per day per RS. 1000/-.
Mode of Repayment
Equal monthly, quarterly or half-yearly, repayment of
principal and interest or as per term of approval.
♦ Running Finance(RF)
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♦ Cash Finance(CF)
♦ Demand Finance(DF)
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Security/Pledge
♦ A personal security is required to obtain loan otherwise
anyother security will be required.
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Eligibility of Applicant
1) The age of applicant should not be less than 19 years
and he has not applied for any type of loan from any
bank.
Eligibility of Guarantor
1) He has been living at the given address atleast for one
year.
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Conditions
The application of loan can be rejected in case of
incomplete or wrong information. Approved loan can be
cancelled. It should be informed that the rejection and
acceptance of loan are sole right of bank. If the rent of loan
is not paid for more than 3 months then the remaining
amount will be required to refund immediately with 16 %
mark up.
Agricultural Loan
Bank provides the agriculture advances in order to
enhance and support the agriculture sector of the country.
Bank’s Agriculture division deals with the agriculture
advances. These advances are of following types:
1) Farm Credit
Farm Credit
These are the credits provided by the MCB or purchases of
inputs for development of agriculture sector. Following are
two main Sub classes of Farm credit:
Production Finance
These are short term loans. These laons are provided to
farmers for purchases of different types of input, for
example seeds, fertiliser, and pesticides.
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Development Finance
These are medium or long term loans. These loans are
provided for the development of agricultural sector. Main
Purposes of these loans are as under:
♦ To purchase tractors
♦ Fish Farm
♦ Cattle Farm
♦ Poultry Farm
♦ Dairy Farm
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♦ Guarantees.
♦ Letter Of Credit.
Guarantees
Introduction
Bank examines customer’s relation with the bank 7 the
nature of the business. Bank also sees his past business
with the bank. Sometimes bank issues Guarantee on the
behalf of the customer by getting some margin from him.
This margin may vary from customer to customer.
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Procedure
Bank charges a commission on the amount for which
guarantee is issued. Normally the validity period of
guarantee does not exceed one year. After the guarantee
has been issued, a copy of same is issued to the counter
guarantee issued to the customer.
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DEPOSIT DEPARTMENT
Account Opening
The general banking performs various functions among
them the first and most important function is A/C opening.
The process of opening an account is very simple and any
body who would like to open his account could do it easily
without any difficulty.
Types of Accounts
There are three types of accounts
♦ CURRENT ACCOUNT
♦ SAVING ACCOUNT
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2) Specimen Card
As I have already mentioned about “SIGNATURE SPECIMEN
CARD”. This card contains three signatures of an
applicant, applicant A/c no, A/c type, branch code, title of
A/c, it will be attached with an application form. Banker
uses this card at the time when he receives the cheque; he
compares customer’s signature with the signature on the
cheque for avoiding fraud.
4) Cheque Book
Cheque book is issued to the customer when the bank
accepts the A/C opening application form.
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Types Of Customers
1) Individual
Only one person can operate this a/c. We can call it a
personnel or individual a/c.
2) Joint
In case of joint A/c, applicant mentions that how much
person will operate the A/c. Instruction are given for joint
A/c such that the account shall be operated by
3) Partnership A/C
For partnership a/c, along with the application form
signature card. Other documents are also needed such as
♦ Registration Certificate
♦ Commencement of business
Note
In case of addition or withdrawal of any partner a new
agreement will be required.
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4) Company Account
For company accounts following documents are required: -
♦ Private registration
♦ Commencement of business
♦ Balance sheet
Letter of Thanks
Bank prepares two ‘LETTER OF THANKS’ one for the new
customer and the other for his introducer. This act
promotes good will among the customer and the
introducer.
Closing of an Account
There are no. of reasons of closing an account. Some are
listed below:
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♦ SAVIGN DEPIOSITS
♦ CALL DEPOSITS
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A) Minimum Balance
A sum not less then RS. 1,000/- in cash as initial deposit is
required for opening a current account and the same may
be maintained as minimum average running credit
balance.
B) Profit
♦ No profit will be paid on credit balances held in current
accounts.
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2) Saving Account
Saving accounts are opened on proper introduction with
sums of credit balance within certain limit for individual
(single, joint) institutions, companies, educational
institutions etc.
♦ PLS ACCOUNT
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Withdrawals
Withdrawals from PLS saving account are allowed not more
than 8 times in a calendar month and for a total amount
not exceeding RS. 15000/- without the approval of bank
manager. For withdrawal of larger amount, 7 days notice
in writing is required to be given.
Profit/Loss
The profit/loss will be credited/debited on the basis of its
net working results at the end of each half-year.
Calculation of products on PLS saving A/c will be made for
each calendar month on the lowest credit balance of an
account between the close of business on the 6th day and
the last day of the month. If the balance is less than
Rs.100/- the product will be nil.
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Deposit Amount
We will have to deposit Rs 1000 on monthly basis t the
time birth of your baby or at later stage. It will continue for
upto 10 years without making any withdrawal.
Conditions
♦ The account can be opened singly or jointly.
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Interest
♦ The interest is given on yearly basis.
Conditions
♦ Minimum amount required is Rs 25000 and Maximum is
Rs 1 million.
Interest
♦ The bank will give profit on monthly basis.
♦ Services
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Special Incentives
♦ Return is calculated on daily average balance.
Target Market
♦ Individuals interested in medium term saving schemes.
Conditions
♦ Minimum deposit will be Rs 10,000 with no limit for
maximum.
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Interest
Initial Deposit Payment upto maturity
(Rupees) (approx.)
(Rupees)
10,000/- 20,000/-
50,000/- 100,000/-
100,000/- 200,000/-
1,000,000/- 2,000,000/-
6. Fixed deposits
Fixed deposits are those deposits which are by the bank
under the conditions that they will not be payable on
demand but will be payable under fixed or determinable
future time date.
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FOREIGN EXCHANGE
DEPARTMENT
Import
This department provides the facility to their customers to
import machinery or products from other countries. It is
necessary for the importers to have the licenses, which is
issued by the chief controller of imports and exports.
Before obtaining an import license the license must be
registered with the chief controller of import and export.
For having the license, an individual or firm submits the
application through his bank.
Documents Required
♦ Filled application form for Register
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Letter of Credit
Definition of letter of credit
A letter of credit is a written instrument issued by a bank
authorising the seller to draw in accordance with certain
terms and stipulating legal forms, that all such bills will be
honoured.
Explanatory Definition
A letter of credit consist of an undertaking by an issuing
bank that bills drawn by the exporter will be duly owner
provided the comply with the terms of credit.
Explanation
A letter of credit is a:
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♦ Account party
♦ Issuing party
♦ Exporter
Issuing party
The bank, which issues or opens a letter of credit at the
request of importer, it is called the issuing bank.
Exporter
The seller or the party in whose favour the letter of credit
is draw is the third party and it is also known as
beneficiary.
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2) Line of credit
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2. Line of credit
Before issuing a letter of credit, bank takes all necessary
precautions for securing its credit. The bank first
examines the customers credit standing, the type of goods
to be imported, the market demand for the goods, the
collateral offered to cover the credit. Then it establishes
the amount i.e. the line of credit.
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♦ Commission
Increased balances
♦ The balances are the lifeblood of every commercial
bank.
Commission
The commission charged by the banks varies with the
kinds of letters issued by them. Though the commissions
are small, yet when counted on the whole, they form an
important part of earning of the banks.
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Bank Charges
♦ The bank takes commission @ 0.40 % of amount of L/C
for one quarter and 0.25% for two or more quarters.
For Collection
♦ In case of sight payment service charges are calculated
@ 0.10 % of bill amount and minimum charges are RS.
500/-and handling commission is RS. 500
♦ Provision of finance
♦ Credit standing
♦ Legal right
♦ Risk covered
♦ Business expansion
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Shipping Terms
The following shipping terms are used in international
trade.
♦ EX-works
♦ DAF(delivered at frontier)
♦ DES(delivered EX-ship)
♦ DEQ(delivered EX-quay)
Documents
Documents are the most important part of international
trade. Without them trade cannot be completed.
Documents are of five types.
1) Commercial documents
2) Transport documents
3) Insurance documents
4) Financial documents
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5) Official documents
1. Commercial Documents
Commercial documents consist of following forms.
♦ Invoice form
♦ Certificate of origin
♦ Weight note
♦ Packing list
2. Transport Documents
These documents are related with transfer of goods.
These documents consist of following forms,
♦ Airway bill
♦ Bill of lading
♦ Roadway bill
3. Insurance Documents
Insurance documents consist of following forms.
♦ Letter of insurance
♦ Insurance policy
4. Financial Documents
These documents are concerned with the payments of
goods. These documents consist of following forms.
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♦ Bill of exchange
♦ Clean bill
♦ Short bill
♦ Documentary bill
♦ Bank bill
♦ Promissory note
5. Official Documents
These documents consist of following forms.
♦ Consular invoice
Export
Usually the exporter does not rely on the credit of a banker
in the country of importer, and insist on a confirmation
from a banker carrying on business in his own country.
Thus this department of a bank helps the exporters to
settle down their financial affairs. For exporting it is
necessary for exporter to get export license from the chief
controller of import and export after registration.
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♦ Bill of exchange
♦ Invoice
♦ Insurance documents
♦ Packing list
Security of Documents
Whether documents received are meant for the opening
bank and specifically for the branch which established the
letter of credit. The documents would be negotiated within
the validity of L/C. The goods have been shipped within
the time allowed under L/C. The goods are mentioned in
invoice and other documents (e.g. bill of lading, packing
list etc) are in accordance with merchandise clause L/C.
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Retirement of Documents
When the opening bank against a letter of credit receives
documents. The customer retires the documents under
different arrangements e.g.
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the bill amount for 230 days @ 12.55% for each RS. 100/-
or part thereof on payment against documents (PAD) for
intimation purpose only.
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Export Re–Financing
It is most important features of export. Export refinancing
is used to enhance the export of the country. It was firstly
started in 1977 and re-established in 1994. Here the
exporting companies can get advances at a very low mark
up i.e. lower then inflation rate. Banks get advances from
State bank at 6% and provide advances to the exporting
companies at 8% and 2% is spread of the bank i.e. is the
income of the bank. This export-refinancing advance can
only be used for export and not for other purposes, state
bank gets information about export through E – form.
There are two parts of export refinancing.
♦ P-1
♦ P-II
P-1
Two forms of P-1 are pre-shipment and port shipment
P-1 Pre-shipment
In P-1 pre-shipment companies make an agreement with
foreign companies and get loan from the bank to make
products and shipping them to foreign countries i.e. they
get advance before shipping the products.
P-1 Post-shipment
In P-1 the post-shipment companies make an agreement
with foreign countries and produce some of the products
and ship them and get advance from the bank to complete
the shipment.
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P-II
In P-II pre-shipment companies get lumpsum for the whole
next year and the entire amount can be used to export the
products. The companies have to export double than the
advance gets through P-II shipment. In P-II pre-shipment
the lumpsum amount can be calculated on the basis of
performance of the last year. If a company is unable to
make double export than the advance, then bank makes
some penalty in the forms of amount against the company.
Special Products
Export refinancing cannot be applied for exporting all
types of products. Some products are
♦ Cotton cloth
♦ Cotton products
♦ Finished leather
♦ Refined sugar
♦ Cash finance
♦ Running finance
♦ Demand finance
♦ Export refinancing I
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♦ Export refinancing II
♦ FAFB
♦ FBP
♦ Form DE-1
♦ Form DE-2
♦ Original contract
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CLEARING DEPARTMENT
Cheques
When we talk of cheques then there are two types of
cheques
1) Open Cheque
Open cheque has following properties:
Token
A token is given on open cheques when presented to bank
for payment. In this case payment is made at the spot to
the cheque holder. First of all cheque is presented to bank
for payment. The name of holder, no of cheque and
amount is written on the register by the bank employee &
token is given to cheque holder. Then Cheque reaches the
computer department. There it is again feeded in
computer & it is stamped after checking the holder has
enough amount in his account or not. After feeding in
computer ( debiting holder’s A/C ) , the cheque reaches
the cash department where the holder can receives his
cash by giving token to the cashier provided that he has
enough amount in his A/C.
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2) Crossed cheque
When the cheque does not fulfil the requirement of open
cheque then it is known as crossed cheque.
A) Transfer Delivery
When cheque has following properties then it is proceeded
as Transfer Delivery.
♦ Cheque is crossed.
♦ Cheque is of MCB.
Procedure
In Transfer Delivery following process is done.
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B) Clearing
In clearing the cheques which are
♦ crossed
♦ limited company
Procedure
Such cheques are collected as clearing cheques and are
noted in Clearing Ledger. Two copies of voucher SF-37 are
prepared (See Annexe ) . Original voucher with the
cheques are send to Main branch which then send to S.B.P
in advance date. The payment is not given at hand but it is
transferred to account of account holder. In case if cheque
is returned due to number of reasons then the objection is
finished and again send to main branch but this time a
credit voucher along with original cheque is send to main
branch instead of any Pay-In-Slip.
Advance Clearing
When cheque is sorted for clearing because of different
branch in the same city then we note these cheques in two
days advance date because it takes more time to reach
that faraway branch . For example HBL of Baha-ud-Din
Zakariya University Multan.
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C) Cheque Collection
When cheque is from another city then it is grouped as
C.C.
Procedure
SF-37 form is used in Cheque collection (See Annexe )
Original voucher with cheque is send to main branch.
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Pay-In-Slip
Here it is very necessary to have knowledge about Pay-In-
Slip
Purpose
It is used for two purposes
Types
It is of two types depending upon the type of account.
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a) General Crossing
Sometimes the cheque is crossed by the drawing two lines
on the upper left corner of the cheque without writing any
sentence on the cheque.
b) Written Crossing
Cheque can also be crossed by stamping it with sentence
“Pays Account Only”
c) Special Crossing
Crossing can also be done by stamping a cheque with the
words “MCB GBS Branch”. This means that now cheque is
in use of bank only. If it is lost or dropped then it is of no
use to anybody because now it is a cheque of bank. This
cheque will not be cashed any where else.
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♦ Cheque incomplete
♦ Post Dated
♦ NIC no of reporter.
♦ Signature of reporter.
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Green Sheet
At the end of banking time ( 1:30 o’ clock), three Green
sheets are prepared for clearing , cash and account side.
One Green Sheet is also prepared by clearing department.
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RTC DEPARTMENT
This department deals in RTC. It stands for Rupees
Travellers Cheques. MCB RTC has the largest share of the
total RTC Market. Over 1.5 Million satisfied customers have
made MCB RTCs. These are printed in the UK and carry a
thread watermark- a feature that prevent counterfeiting.
Important Features
As good as cash
The most convenient substitute for cash for all kinds of
transactions(property, trade, personal etc).
Denominations
Cheques are available in the denomination of Rs 1,000 Rs
10,000 Rs 50,000.
Easily Encashed
They can be encashed at any MCB branch.
Easily refundable
In case of Loss Or Theft we can get the full amount back.
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Televerification System
It enables us to check the validity of cheque 24 hours a
day . Televerification UAN (021) 111-000-456.
Procedure
First of all RTC-10 is given to customer. It is filled and then
cash is deposited to cash department . One copy is for
office and one copy is given to the customer and RTC are
issued at that time. When RTCs are sold then H.O A/C is
credited by using form no RTC-20.
A,B,C,D,E.
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REMITTANCE DEPARTMENT
Remittance
Transfer of money or equivalent to money from one branch
to another branch of the same bank is called remittance.
Important Terms
Originating branch
It is the branch from which money is send to another
branch or the point of origin of remittance.
Responding branch
The branch which receives the instrument or money for
remittance is known as Responding Branch.
Types of Remittance
Remittance is classified into following four types:
♦ INWARD REMITTANCE
♦ OUTWARD REMITTANCE
♦ INLAND REMITTANCE
♦ FOREIGN REMITTANCE
a) Inward Remittance
The branch which receives the instrument(T.T, D.D etc)
directly from the customer or from the originating branch
and is responsible to pay to party is called inward
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b) Outward Remittance
The branch which issues or sold the instrument to the
responding branch is called outward remittance. In this
case we are sending remittance to another branch of the
same bank in any location.
c) Inland Remittance
Transfer of money from one branch to another branch of
the same bank within the same country is called inland
remittance. In this case both originating branch and
responding branch will be situated in the same country.
d) Foreign Remittance
Transfer of money from one country to another country is
called foreign remittance.
Modes of payment
MCB uses following four types of modes of payment
1. Demand Draft
♦ Demand Draft is used for the transfer of money outside
station.
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2. Pay Order
♦ Pay Order is used as instrument for transfer of money
within station or city.
♦ The bank charges excise duty and flat rate from the
applicant.
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3. Mail Transfer
♦ The transfer of money from one branch to another
branch of the same bank through mail or courier
service is called mail transfer.
4. Telegraphic Transfer
♦ Originating branch send funds to responding branch
instantly and immediately through telegram and fax.
Documents Prepared
a. Application Form (SF-100)
Firstly, the application(see annexure ) is filled by the
applicant in which he writes the name of payee, his a/c #
& the name of branch to which TT is sent as well as the
depositor’s name, his a/c # & address. Then in the office,
they collect the charges, commission & excise duty.
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2: Credit Account No
In this case, if the beneficiary has Account with the
Responding Bank then his account is credited by the
incoming amount without informing him.
b. Memorandum (SF-237)
The officer gives Memorandum to the applicant as a
evidence of Remittance (see annexe ). Bank charges
along with some information about Remittance is written
on it. Officer signs at the end of the form.
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Control
It is the number written on the form “Confirmation Of
Cable Sent”
( SF-89A).(See annexe )
e. T.T Register
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Whole Procedure
1) First of all application is filled by the applicant. Cash is
deposited in the cash department. Applicant is provided
with Memorandum as an evidence.
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FINANCIAL ANALYSIS OF
MCB
For Year 1997-98
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Explanation
♦ Interest earned to advances increased in 1998, which is
a positive sign and shows increased income of the
bank, and its improving financial position.
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PREFACE
Prerequisite of MBA study is to undergo internship. I got
the opportunity to join the MCB General Bus Stand Branch,
Multan for the said purpose for a period of 6 weeks.
Riaz Hussain
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ACKNOWLEDGEMENT
All praise to Allah, the Beneficent, the merciful, and
respect for His Prophet “Peace Be Upon Him” who made us
recognize our creator.
Riaz Hussain
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CONTENTS
HISTORY OF BANKING 1
EVOLUTION OF BANKING.................................................................................................................1
EARLY GROWTH............................................................................................................................1
DEVELOPMENT OF MODERN BANKING...............................................................................................3
BANKING IN PAKISTAN...................................................................................................................4
MUSLIM COMMERCIAL BANK LIMITED 7
HISTORY OF MUSLIM COMMERCIAL BANK........................................................................................7
BOARD OF DIRECTORS....................................................................................................................8
STRUCTURE OF MCB...................................................................................................................10
STRUCTURE OF MCB – GENERAL BUS STAND BRANCH (1412).........................................................12
OVERALL PERFORMANCE OF MCB IN 1998...................................................................................13
CHAIRMAN’S REVIEW...................................................................................................................19
ADVANCES DEPARTMENT 21
1.INITIAL INFORMATION ...............................................................................................................21
2.PREPARATION OF CREDIT PROPOSAL............................................................................................21
3.SANCTION ADVICE.....................................................................................................................22
OTHER TERMS AND CONDITIONS....................................................................................................23
TYPES OF ADVANCES....................................................................................................................24
TYPES OF ADVANCES BY MCB.....................................................................................................26
DEPOSIT DEPARTMENT 36
ACCOUNT OPENING......................................................................................................................36
TYPES OF ACCOUNTS....................................................................................................................36
PROCEDURE FOR ACCOUNT OPENING..............................................................................................36
TYPES OF CUSTOMERS.................................................................................................................38
CLOSING OF AN ACCOUNT.............................................................................................................39
IMPORTANCE OF DEPOSITS FOR BANK.............................................................................................40
TYPES OF ACCOUNTS IN MCB.....................................................................................................40
FOREIGN EXCHANGE DEPARTMENT 50
IMPORT......................................................................................................................................50
DOCUMENTS REQUIRED.................................................................................................................50
LETTER OF CREDIT......................................................................................................................51
EXPORT......................................................................................................................................62
EXPORT RE–FINANCING...............................................................................................................66
SPECIAL PRODUCTS......................................................................................................................67
FORMS OF EXPORT RE FINANCING ................................................................................................68
CLEARING DEPARTMENT 69
CHEQUES....................................................................................................................................69
RTC DEPARTMENT 79
IMPORTANT FEATURES...................................................................................................................79
PROCEDURE ................................................................................................................................80
REMITTANCE DEPARTMENT 81
REMITTANCE...............................................................................................................................81
IMPORTANT TERMS.......................................................................................................................81
TYPES OF REMITTANCE.................................................................................................................81
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MODES OF PAYMENT.....................................................................................................................82
DOCUMENTS PREPARED.................................................................................................................84
HEAD OFFICE ACCOUNT...............................................................................................................87
FINANCIAL ANALYSIS OF MCB 88
EXPLANATION..............................................................................................................................89
PREFACE 90
ACKNOWLEDGEMENT 91
CONTENTS 92
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