INTERNSHIP REPORT ON MCB BANK Limited

Internship Report submitted to the Faculty of Commerce &Accountancy Partial Fulfillment of the Requirements for the Degree of Master in Commerce

By:

Name of Student: Sana javaid Roll Number: 12052054-045

Date of Submission:15

september 2013

UNIVERSITY OF GUJRAT
Name of program coordinator----------------------------Signature of program coordinator--------------------------

University of Gujrat
(G.T Road SciencesCampus)

Faculty of Commerce&Accountancy
Course Title: Internship (Report based on Internship) Course Code MGT-403

(2)
All the praises are for the ALMIGHTY ALLAH, the CREATOR of universe, the most Gracious& merciful, and the source of all knowledge, wisdom within and beyond my Comprehension. ALLAH is the only, WHO can help us in every field of life. I bow my Headbefore HIM who enabled me to work on this report and helped me to complete This report successfully. All praises after ALMIGHTY ALLA Haredueto HOLY PROPHET HAZARATMUHAMMAD (Peace be upon him), the most perfect exalted among, WHO & us is forever a torch of guidance and knowledge for humanity as a Whole. Afterward, I am greatly indebted to my Parents I here by provided a golden Opportunity to perform working activities at MCB for a period of 6 weeks. The aforesaid Occupancy bestow me precious moments to make learning and get experience of the practice life with a successful approach.

(3)
S. no. 1

TABLE OF CONTENTS
Details Executive Summary
Page no. 08 09

Research Methodology
3

CHAPTER # 1
History of MCB Introduction of MCB

10

11

Over view of MCB

5 11

Vision Statement
6 11

Mission Statement
7 12

Values Statement
8 13

Corporate profile
9 14

Investors relation
10 15

Awards Of MCB
11 17

Business Volume
12

Services
I. II. III. Trade Finance Credit Management Investment Banking

19

13

20

Product
o o o o o Cards MCB Visa Travelers Cheuqes Remittance Utility Bills o Lockers
14

21 Upcoming Product 22 PEST Analysis 23 Contribution of MCB toward Economic Development

24

15 16 17

Organization Structure

18
Branch Network

25

19
Number of Employee 27 20 Main Offices Main Department

26

21
Comment on Organization Structure 22

34

CHAPTER # 2
Work Done by Internee

35

23 DEPOSIT SLIPS

First Two Week

36

CHEQUES INTRODUCTION OF ACCOUNTS ATM CARD

24

Third & Fourth Week

CLEARING NIFT

48

25

Fifth Week
REMITTANCE APPLICATIONS Online Payment: Demand Draft: Pay Order: Mail Transfer And Telegraphic Transfer:

55

26 LOCKERS FACILITY

Sixth Week

61

CASH DEPARTMENT Clearing:

27

SWOT Analysis

65

28 Problems And Recommendation 29 Glossary 30 Conclusion

67 68

70
31 References

71

(4)
This report is about MCB, its history and functions of the bank. This report contains detail about what I have done and learned in my six-week internship in MCB Kutchery Chowk Gujrat. It starts with the short introduction and background and introduction about the management of The Bank. The vision of the bank along with its mission and existing status has also been discussed. This report contains detail about Business Practices in MCB Kutchery Chownk Gujrat. The purpose of this exercise was to learn while working in the practical field. Specially, the knowledge related to the General Banking, Foreign Exchange and Advances. During my Internship in MCB I worked in Remittances, Advances, Foreign Exchange and Customer Service Office department and I successfully completed all the task/duties that were assigned to me. It has really helped me to observe what extent the bookish knowledge is being practiced in real field. This report contains the Comparison of other banks with Bank Alfalah Limited, current financial position of the bank, the business process of the bank and all my learning, during the internship period.

The report is based on my two months internship program in National Bank of Pakistan. The methodology reported for collection of data is primary as well as secondary data. The biggest source of information is my personal observation while working with staff and having discussion with them. Formally arranged interviews and discussions also helped me in this regards. Primary data: Personal observation Interviews of staff Secondary data: Journals Magazine Annual reports Internet

(5)

CHAPTER # 1 1111111 1

10

(5.1)
MCB Bank previously known as Muslim Commercial Bank, today is one of the enormous banks of Pakistan, was established in 1947.

As it was incorporated in 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate executives.

In 1974, MCB was nationalized along with all other private sector banks. This led to deterioration in the quality of the Banks loan portfolio and service quality. Eventually, MCB was privatized in 1991.

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

The strength and stability of MCB Bank Limited is evident through the credit rating assigned by JCR-VIS Credit Rating Company Limited of AA (Double A) for long to medium term and A-1 (A one) for short term.

11

(5.2)
MCB Bank Limited is a full service institution offering consumer, corporate and investment banking facilities to its customers. The banks widespread and growing network of branches in the four provinces of the country and abroad, together with its corporate offices in major cities, provides efficient services in an effective manner. MCB Bank has attained its goodwill and fame rapidly in local financial market and around the globe, the 9 to 5 full day banking and banks 24 hours online banking services gives it an edge over other banks, while its fastest ATM network facility encompassing more than 34 cities around the country provides customers such convenience that they expect from the bank. All branches of the bank are located at vintage points covering a large segment of population and business houses MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion and Total assets of around Rs.300 billion. It has 994 branches and almost 5 branches outside Pakistan. It has 9011 employees and 4350245 numbers of accounts according to 2009 data.

5.2.1.1)
Challenging and Changing the Way you Bank

5.2.1.2)
To maintain long term customer relationships through outstanding service and convenience

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5.2.1.3)
Trust: MCB is the trustee of public funds and serve with integrity & commitment. Ethical behavior is importance for them. They adopt full compliance with internal and external policies & procedures, operating within the legal framework. Customer Focus: MCB continuously seek to exceed their customers expectations, forging and maintaining long term relationships. Innovation: MCB strives to be the market leaders in innovative products and services offering customized financial solutions with flawless execution. Teamwork: The diversity of their people is their strength. They inspire and challenge each other working together to achieve synergy. Achievement: Their people are their most valuable asset. They are committed to a result oriented culture. MCB goals are clear and merit is the only criterion for reward. Social Responsibility: As responsible citizens MCB contributes to the social welfare of the community they live in.

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5.2.1.4)
Board of Directors
Main Mohammad Manshaa S.M. Muneer Tariq Rafi ShahzadSaleem Sarmad Amin MianUmerMansha Aftab Ahmad Khan AtifYaseen Dr. Muhammad Yaqub Ali Munir President / CEO Chairman Vice Chairman

Advisor RazaMansha

Audit Committee Dr. Muhammad Yaqub MianUmerMansha Aftab Ahmad Khan Mr. Tariq Rafi Chairman Member Member Member

Chief Financial Officer Tahir Hassan Qureshi Company Secretary AbdusS.Sami

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Auditors KPMG TaseerHadi& Co Riaz Ahmed & Co. Chartered Accountants Chartered Accountants

Legal Advisors Mandiwalla&Zafar Advocates & Legal Consultants

Registered Office MCB Building , F-6 / G-6 Jinnah Avenue, Islamabad

Principal Office MCB Tower Chundrigar Road, Karachi

Registrar's and Share Registration Office THK Associated (Pvt.) Ltd. Shares Department, Ground Floor Modern Motors House Beaumont Road, Karachi

Investors Relations:
MCB Bank Ltd shares are traded on Karachi, Lahore & Islamabad Stock Exchanges. MCB Bank GDRs are listed on the London Stock Exchanges Professional Securities Market. The information presented within MCB Investor Relations is obtained by MCB from sources believed by MCB to be accurate and reliable. All information is provided as is without warranty of any kind and they strongly recommend customers to read their disclaimer text.

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(5.2.3)

MCB has become the only bank to receive the Euro money award for the seventh time and Asia money award for fifth time in the last ten years MCB won Best Banking Asia award in 2008. MCB also won the "Best Bank in Pakistan" award in 2008, 2006, 2005, 2004, 2003, 2001, 2000. In addition, MCB also has the distinction of winning the Asia Money award in 2009, 2008, 2006, 2005 & 2004 for being "The Best Domestic Commercial Bank in Pakistan".

2010 The Asian Banker: Strongest Bank in Pakistan 2010 The Asian Banker: Leadership Achievement Award 2010 MMT: Best Bank Led MMT Service 2010 ICAP / ICMAP: BCR Award 2009-Banking Sector 2010 SAFA: Certificate of Merit Award 2009 Asia money: Best Domestic Bank in Pakistan

2009 The Asset: Best Domestic Bank in Pakistan 2008 Euro money: Best Bank in Asia 2008 Euro money: Best Bank in Pakistan 2008 Asia money: Best Domestic Bank in Pa 2006 Asia money: Best Domestic Bank in Pakistan 2006 Euro money: Best Bank in Pakistan

16

2005 Asia money: Best Domestic Bank in Pakistan 2005 Euro money: Best Bank in Pakistan 2004 Euro money: Best Bank in Pakistan 2004 Asia money: Best Domestic Bank in Pakistan 2003 Euro money: Best Bank in Pakistan 2001 Euro money: Best Bank in Pakistan 2000 Euro money: Best Bank in Pakistan

(5.2.3.1
Business volume in terms of Revenue, Assets, Deposits, Advances and Investment is as under. o Total Revenue (Interest Income + Non Interest Income)
Years Total Revenue

2010
12,017,858

2009
12,417,459

2008
12,824,663

2007
8,483,996

2006
6,907,542

Total Revenue
14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 -

Years

10

09

08

07

06

17

(5.2.4)
Year Total Assets Deposits Advances Investments Share holders 'equity Pre-tax Profit After-Tax Profit Earnings per Share Rs. Number of Branches Number of employees 2010 1,035,025 832,152 477,507 301,324 103,762 24,415 17,563 13.05 1289 16457 2009 944,583 727,465 475,243 217,643 94,142 21,300 17,562 13.05 1,287 16,248 2008 817,758 624,939 412,987 170,822 81,367 23,001 15,459 11.49 1,276 15,441 2007 762,194 591,907 340,319 211,146 69,271 28,061 19,034 14.15 1,261 14,079 2006 635,133 501,872 316,110 139,947 53,045 26,311 17,022 12.65 1,250 14,019

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(5.2.4.1)

(1) TRADE FINANCE

Under Corporate Banking MCB offers trade finance services that include an entire range of import and export activities including issuing Letters of Credit (L/Cs), purchasing export documents, providing guarantees and other support services.

(2) CASH MANAGEMENT

MCB network of over 900 branches in Pakistan enables them to collect and disburse payments efficiently with their cash management services. This also enables them to offer customers a choice of paper based or electronic fund transfer solutions including collection amounts, cross branch online transactions etc.

(3) INVESTMENT BANKING

MCB Investment Banking Team has emerged as a leading player in Pakistan's Investment Banking arena. The Team handles advisory, corporate finance and capital markets related transactions. Within these areas, the team has developed expertise in: Private Placements Debt/ Equity Underwriting Term Finance Certificates Loan Syndication Arrangement of Non- Fund Facilities Mergers and Acquisitions Privatization

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 Corporate Advisory

(5.2.4.2)

(1) CARDS

(1.1) SMART CARD/ DEBIT CARD:

MCB Smart Card is a secure and convenient instrument of payment with unmatched functionalities. It provides 24-hour direct access to their bank account. The convenience and flexibility of MCB Smart Card will help customers to live a smarter life. It not only helps them to manage their expenses, but also eliminates undue interest on their day to day credit card transactions. Their balance is always within their reach and they can spend accordingly.MCB is the only bank to introduce a debit card that gives the option to choose from domestic and international cards for local and global usage respectively.

(1.2) MCB VISA:

MCB Visa is not just another card in customers wallet. It not only provides the conventional credit card services in a manner that is superior in comparison, but goes an extra mile. MCB Visa is accepted at all ATMs across Pakistan as well as at 27 million acceptance locations worldwide. This card comes packed with the most amazing features and is the only card that truly lives up to their expectations.

(2) TRAVELERS CHEQUES

MCB Bank has been at the forefront of providing its customers with new and innovative products and financial instruments that are safe, secure and profitable. MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash for traveling and travel related purposes. The

20

product has been extremely popular and is preferred over cash by customers while traveling and in all walks of life. MCB Rupee Traveler's Cheques is the safest way to Carry Cash.

(3) UPCOMING

PRODUCTS

Presently, we are launching Islamic Banking Operations with necessary products, but we are planning to introduce following products in near future:

Deposit Side One Month TDR MahanaMunafa Savings Accounts

Financing Side Musharaka Term Finance Diminishing Musharaka for Housing Finance Murabahah cum Istisna for Export of Goods Issuance of LC

Others Frequently asked questions Ask Sharia Advisor

(5.2.5)
A broad view of market is important when management is interested in introducing better services for customers. Rapid technological change, global competition and the diversity of buyers preferences in many markets require the constant attention of the market vouchers to identify promises business opportunities, see the shifting requirements of the buyers, evaluate changes in competitors positioning and guide the choice of which buyers to target and classify

21

them according to respective segments.

Identification of external and macro factors that

influence buyers and thus change the size and composition of market overtime involves initially building customer profiles. These influences include: Political and legal environment Economic trends Socio cultural environment Technological factors

POLITICAL AND LEGAL ENVIRONMENT:

Banks are strongly affected by the political and legal considerations. This environment is composed of regulatory agencies and government law that influence and limit various organizations and individuals. Mostly these laws create new opportunities for business. Business legislation has following main purposes o To protect banking companies from unfair competition. o To protect consumers from unfair business practices adopted by banking companies o To protect the interest of the society from unbridled business behavior.

ECONOMIC TRENDS:
A banking market requires better consumer market in volume along with higher borrowing power. The available borrowing power depends on: o Consumer income o Saving rates o Consumption patrons o Rates of interest o Budget deficit o Exchange rates o Cost of living o Inflation

SOCIO-CULTURAL ENVIRONMENT:
A society is shaped by beliefs, norms and values. People in a society consciously and unconsciously interact with:

22

Themselves Others Organization Society

TECHNOLOGICAL FACTORS:

Forces of technological advancement have played the most dramatic role in shaping the lives of people. The rate of change of technology has greatly affected the rate of growth of economy. New technology is creating deep rooted affects which could be observed in long run. The improvement techniques involved in on line banking. In brief PEST analysis affects the overall banking companies and provides us the information about the external macro condition.

(5.2.6)

MCB Bank is one of the leading financial services provider in Pakistan and as one of the largest and oldest banking corporations in the country; we not only embrace our heritage and traditions, but strive for growth and change. Our goal is to create and nurture long term relationships with our customers by catering to all their financial needs, including traditional banking services, insurance and investment advisory, coupled with the highest level of customer service. Our bottom line is to ensure that we have motivated, professional and customer-centric employees on board who help us deliver this promise of becoming the best in class across the industry.MCB we inspire every individual to play a significant role in our continued success by creating Maximum economic value for our clients and shareholders, while maintaining the highest human Values and principles. Utility of the commercial banks in the promotion of national economy was of paramount importance and sound banking system ensured stability of the economy. The bank worked under a set mechanism.

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(5.3)

(5.3.1)ORGANIZATIONAL HIERARCHY Chart

Manager

Operational Department (Sajjid) .

Cash Department In charge (Qayyum)

Lockers Department (Naveed)

Cash Officer (Wahab)

Cash Officer (Iftikhar)

Cash Officer (Ejaz)

CSO Ayesha Rasool

KPO

Clearing (Bukhari)

Remittance (Amir)

Checking Officer (Zulfiqar Butt)

Unskilled Workers

3 Guards KPO General Ledger (Suleman Butt) KPO Saving Account (Yasin Butt)

2 Office Boys

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(5.3.1.1)
Commercial Banking Lahore East Lahore West Faisalabad Gujranwala Islamabad Sargodha Peshawar Abbottabad Karachi East Karachi West Karachi Central Hyderabad Sukkur Quetta Bahawalpur Multan Wholesale Banking Group Karachi Lahore Islamabad Islamic Banking Karachi Lahore Multan Hyderabad Faisalabad 971 61 72 58 83 83 82 64 82 51 42 17 58 52 34 54 78 11 03 05 03 06 01 01 01 01 01

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(5.3.2) Training received by number of employees:

For the efficient working training is an important part and it clears the direction of the employees towards attaining the organizational goals. In banks every employee received the basic course of training of the banking system in which overall view of all the bank work is provided and than every person get the training in his particular job that is assigned to him. So in banks no one can be appointed with out the basic training

Workload:

The work load of the bank staff is based upon on the daily system. The office timing starts from 9.00 am to 5.00 pm (Monday to Friday) and 9.00 am to 1.00 pm on Saturday for the customers. After the bank timing the staff fulfill the daily vouchers transaction and made the entries on the net system and then counted the cash, put it in the safe. The banking staff should finished their word on daily basis whether there work is short or long.

Responsibilities:

Responsibilities of staff depend upon the scale of the staff members. Higher the rank of the staff higher will be the responsibility on it. For example the Branch Manager responsibility is higher than the Operational Manager. Branch Manager has the responsibility to deal with the Branch customer and with the outsider parties also while all the remaining staff is responsible to deal with the Branch customers only. Branch Manager is responsible for the internal and external environment and the remaining staff is responsible for internal environment only.

26

Operational Manager has the responsibility to check the activities of his subordinates. Cashier is responsible for all the cash transactions which occur in the Bank. Customer Relation officer is responsible to deal the customers well and provide them the necessary information if required.

Physical facilities:
The branch where I have done my internship is MCBShaheenChowkGujrat branch, here the physical facilities available to the customers are sufficient, proper sitting arrangement is available, and gas heater in winter and air conditioners for summer is also available. But the facilities for the employees is not sufficient, employees have the combined table there is no separate rooms for the employees.

(5.3.3) Offices

or field offices OR Main Offices

Offices means the Head office which is situated in MCB House located at Fruit Mendi Branch. Field offices mean the Branches. MCB has the forth largest domestic branch network in Pakistan. The bank has a network of over 1000 branches in Pakistan and 6 branches worldwide in 6 countries.

(5.3.4)MAIN

DEPARTMENTS

There are three main departments in any branch of MCB GENERAL BANKING FOREIGN EXCHANGE ADVANCES/CREDIT

1) GENERAL BANKING
General banking deals with following services:

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REMITTANCE
It is transfer of funds. Funds can be transferred in shape of pay orders, demanddraft, mail telegram and telegraph transfer. Payments of fees of differentorganizations, fulfillment of tenders, and collection of funds are the main functions ofremittance. Maximum part of general banking depends on this department. Issuance of different kinds of remittance: PAY ORDER: Pay order is the property of person/company that has to take the benefit of the amount being pay ordered by the concerned person. Pay orders are made for thepayment of fees, tender or issued for the payments of dealings. These are required for the proof of payments made between the bank and the customer in the favor of beneficiary. These are noted in printed block letters and yearly serial numbers are issued from computerized system. DEMAND DRAFT: Demand drafts are made for the beneficiary for payments, funds etc, these are made for outstation branches of the concerned banks. An advice is also made for the confirmation of the draft send. These are also approved and safe way of sending amount to the beneficiary. These are also noted by computerized system and a serial number is issued fromthe computer system. MAIL TRANSFER: Mail Transfer is made with in the city for transfer of amount. An advice is also made for the confirmation of the draft send. These are also approved and safe way offending amount to the beneficiary. These are also noted by computerized system and a serial number is issued from the computer system. TELEGRAPHIC TRANSFER: Telegraph Transfer is telegram message for transferring the amount from one branch to other branch. A message advice and a confirmation advice both are made with TTnumbers that are issued for TEST. TEST depends on two steps: 1. First TEST is on Day, Date and Code Number of branch. 2. Second TEST is on Currency, whether Pak rupees or foreign currency, amount and TT number issued from manual registers and confirmed from computerized system. PAYMENT OF PAY-ORDER AND DEMAND DRAFT:

28

Pay-Order and Demand Draft both could be paid in shape of physical payment of cash and in case transfer of amounts; the amount could be transferred in the beneficiary account. In case of physical payment authorized signature of beneficiary are taken for the proof of amount being paid to him and in case of transferring of amount authorized signature of the beneficiary are checked and verified for reducing risks. CANCELLATION OF PAY-ORDER AND DEMAND FRAFT: Any type of Pay-Order / Demand Draft is cancelled by the permission and instructions made by the beneficiary. The customer could only cancel the pay order/demand draft as the verified signatures of beneficiary are present on the advice. VOUCHERS: Vouchers are made for records and they should be completed in all respects, the amount, date, its head, particulars, amount in words, authorized signatures and contra advice or voucher should be present. Vouchers are advice either debit or credit slips. They are contra of each other. If any voucher of debit is passed its contra credit voucher should also be passed for the balancing of accounts, their respectivesheets. INWARD CLEARING: It depends on those checks that are cleared inter branch and with in the city. As the concerned branch receive any type of clearing check first of all physical checking is taken place. For clearing procedure there should be two days margin. Thesecheques have their vouchers and the amount of the cheque and voucher should be identical. Than these cheques are stamped and noted on receiving sheet as well as feed in to the computerized system. OUTWARD CLEANING: It depends on those cheques that are cleared out side the city. For outward clearingcheques are send because the home branch has there accounts but checks are of other banks. Contras of these cheques are vouchers that are recorded in the home branch. ISSUANCE OF CHEQUE BOOKS: Any account holder that has opened the account he/she could credit his/her accountant for this purpose there should be a cheque book, so he/she could be able to credit the needed amount whatever he/she wishes. For the issuance of the chequebook a person is advised to fill a requisite slip with his/her full

29

names and the account number with two verified signatures. These signatures are checked and then another requisite slip prepared by the bank staff send to the NIFT, and it issues the printedcheque books after completion of the procedure in two or three days. Account holder can take it by singing on the issuance register or if the absence of the account holder another person could also take the cheque book only if he/she has authorized signature of the account holder. When the cheque books are issued they are feed in the computer system from the requisite slip so when the chequesare given for the credit/transfer of amount they could checked. In this way neither thecheques could be repeated nor could the invalid cheques be claimed. ISSUANCE OF ATM CARDS: Head office issues ATM (Auto Teller Machine) cards with their PIN (Personal Identification Number) codes and when the customer claims for their ATM card they are checked from the list that is also issued from the head office, and the claim is checked from the list and if the name is found than the cards are issued by taking signature and their PIN codes are given to them by taking signatures on their AT card forms. The ATM card has been activated by the number provided at or with the specific card. CANCELLATION OF ATM CARDS: The Cancellation of ATM Cards becomes necessary in the following conditions: If folded or damaged Stolen PIN code missed or forgotten Card captured by the machine and expired If requested by the customer The cancellation or inactivity of the card is being processed by the request or instructions provided from the customer. SHORT NOTICE TERM DEPOSIT: There are short times either for seven days or for thirty days and the profit is calculated by the given percentage from the head office at the payment time. If thecustomer fails to complete the duration of seven days or thirty days then no profit is given. If any amount is outstanding, only in case of automatic continuity, then the profit is calculated for the whole period by the rate given

30

from the head office multiplying from the numbers of days divided by the 365 for the one-day profit AMOUNT, RATE, NUMBER OF DAYS / 365 DAYS: Profit is calculated for the six months only for outstanding SND. Zakat is also deducted but if Zakat deduction form is submitted to the bank, no Zakat will be deducted then, 10% with holding tax is also deducted from the profit to calculate net profit. CALL DEPOSIT: It is highly liquid instrument; it can be cashed at any time when needed. This instrument bears no profit on it. It is mostly used for the purpose of tenders.

1) FOREIGN EXCHANGE
o LCS ESTABLISHMENT: Any company can provide its documents containing e-form, bill of lading, short shipment notice in case of short shipment, packaging list etc. the information provided from the documents is recorded in the LC establishment portion or sectioning the computer. o PAYMENT OR RETIREMENT: When the transactions have been completed then approved documents from the concerned bank are sent to the home bank for the payment or retirement of the LC. These transactions have recorded in the payment or retirement section of the computer. o FOREIGN CURRENCY DEPOSITS: The Foreign Currency Deposit relates with the foreign currency accounts, cash deposit or credit and foreign remittances. o FOREIGN REMITTANCES: In this we received the messages through SWIFT for foreign remittances, which we record in their respective accounts, if these are relates with Pak rupees than it was transferred in Pak rupees with the latest rate and if this relates to the foreign currency than it is dealt with accordingly. The amount has been credited to the respective account and the head office has been debited against it. After crediting the amount to the respective account. All the subsequent entries have been made in the registers and also in the computer record as the system now have been

31

upgraded on computers. As we are reporting daily to the head office, so an annexure has been maintained and faxed to the head office.

3) BASIC BANKING ACCOUNT

In compliance with the directives of State Bank of Pakistan via BDP Circular No. 30,issued on 29th November 2005, the Basic Banking Account has been launched with effect from 27th February 2006. This product has been introduced to facilitate the low-income group as well as the existing account holders who wish to convert the irregular savings or current account into Basic Banking Account. The Basic Banking Account is a current account and can be opened with a minimum initial deposit of Rs. 1000/- only. Account holders will be allowed 2 deposit transactions (each cash or through clearing) and 2 withdrawals (cash or clearing)each month. All customer-initiated transactions over and above this limit will be charged a transaction fee. However unlimited free charge cash withdrawals are allowed through MCBs own ATMs.

MCB RUPEE MAXIMIZER ACCOUNT

MCB Rupee Maximizer Account provides you an opportunity to convert youre the recent changes in the economic scenario MCB launched the Rupee MaximizeAccount exclusively for its Foreign Currency Account Holders. MCB ForeignCurrency Account holders now have an opportunity to convert their Foreign CurrencyAccount balances into Pak Rupees and earn a profit at the rate of 12.6% per annum.Other features include profits calculated on a daily product basis, no restrictions onthe number of the withdrawals, no minimum deposit required. Special benefits include one free ATM card and locker facility free of cost. MCB Rupee MaximizeAccount is being advertised in leading daily newspaper as well as local papers. Foreign Currency Account into Pak Rupee and earn profit at the rate of 12.6% perineum.

CURRENT ACCOUNT
MCBs Foreign Currency Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day.

KHUSHALI BACHAT ACCOUNT

Open a KhushaliBichat or Dollar Khushali Account, both require low minimum income deposits plus you receive profit on daily product basis. Get a saving withcurrent account facilities through

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saving 365 or double your investment throughcapital growth and receive monthly profits through monthly Khushali.

MCB ENHANCED SAVING ACCOUNT

Keeping in view the small savers, looking for higher returns on their savings, MCBintroduces the Enhanced Saving Account (ESA). This account can be operated vial the channels available at the MCB such as Cheques, Virtual Banking, Mobile Banking, MCB Smart Card and ATMs/Point of sales all across Pakistan. MCB ESA, governed under PLS rules, can be opened with a minimum initial deposit of Rs. 5000and the profit shall be calculated on an average basis maintained by the customer during that month. Following shall be the slabs used for profit calculation: If average balance is greater than Rs. 20,000 standard PLS rates will apply. If average balance less than Rs. 20,000 (or equal to 20,000) with up to 4 withdrawal transactions per month (excluding ATMs, PSO, and VB) 4.0% p.a. If average balance is less than Rs.20,000 (or equal to 20,000) with over 4 withdrawal transactions per month (excluding ATMs, PSO, and VB) then standard PLS rates will apply. The rates mentioned above are expected and shall be revised at least every six months. Average account balances can exceed Rs. 20,000 during a month. However, in that case, they shall be paid profit as per the standard PLS rates, as mentioned in slabs above. Profit shall be calculated on average basis and shall be credited to the account after each calendar quarter. MCBs PARTNERS IN BILL PAYMENT

Pay your bills 24 hours a day, a day, 7 days, and a week. Make total payments of up toRs. 20,000 per day. Carry out up to 10 transactions per day per card. Make either full or partial payments. Full payment is required for PTCL only. Recharge your prepaid account for Mobil ink, Ufone and Teleport as per their fixed slabs. Pay as registered or non-registered user. Registration will help you avoid the time delay in entering details each time you carry out a transaction. o Pay with MCB ATM o Pay through MCB Virtual o Pay through MCB Call Centre

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 INVESTMENT BANKING
Our investment banking team has emerged as a leading player in Pakistans investment banking arena. The team handles advisory, corporate finance and capital markets related transactions, within these areas the team has developed expertise in: Private Placements Debt/Equity Underwriting Team Finance Certificates Loan Syndication Arrangement of Non-Fund Facilities Mergers and Acquisitions Privatization Corporate Advisory

ABOUT 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.

FEATURES
Easiest and safest way to remit funds, remittance within 24 to 74 hours, personal delivery to the beneficiary, delivery confirmation to the remitter, message facilities for both parties. Your beneficiary will receive the amount even if he/she does not haven MCB account.

(5.3.5)

MCB performs several functions and have many departments in order to retain and maintain their customers some of these departments are the collections department, Advance department,

34

Bill department, clearingdepartment etc.To motivate the employees MCB provide many allowances and facilities to its employees such as medical facility, huge amount of bonuses and also motivate the employees through promotions. The branch in which I have done my

internship is providing the very satisfactory services to its customers and large numbers of customers are satisfied with the attitude and the services provided the branch. The performance of the Banks is increasing day by day. The accounts holders are very satisfied with the facilities which they provide.

(5.4)

CHAPTER#2

(5.4.1)
I joined MCB Bank Limited (Bank Kutchery ChowkGujrat) as an interneeon 15-07.2013 .I was welcomed by the Branch Manager, Mr Ramzan At my first day, he described me about his branch rules, learning behavior of people and shared his life experiences. I felt myself more comfortable by the supervision of that person. Manager directed me to Miss Saira the Customer Services Officer of that branch. My first day was become an excited one because all branch members welcomed me and most of them were linked with PCIT. During my 6 weeks internship program, I worked in many departments. First two weeks I spent with CSO where I learnt about: Filling deposit slips and cheques.

35

 Procedure for opening and closing of accounts. Apply for ATM cards. Working on computer. Dealing with customers. Then I worked in Clearing Department for Third and fourth weeks where I learnt about: Cheque Book Issuance. Intercity Clearance Local Clearance of Cheques. I worked in Remittance Department for Fifth week where I learnt about: Apply for DD, TT and Pay Order. Transfer money through Online. At the Last week I spent in Cash and Lockers Department where I learnt about: Cash Receipt and payment of cash Lockers account opening and operating the Lockers.

(5.4.2)
During my first two weeks in MCB I learnt following:
(5.4.2.1) DEPOSIT SLIPS By using of deposit slips customers can deposit any amount, cheque, DD, Pay order, Traveler Chequesetc into their account. While filling of deposit slip following information should be mentioned: Date when the amount is deposited. If the amount is being deposited today then date should be the same day. Account Number that is given by the bank to its account holder. Title of account which can be the account holders name or the name of his firm. Amount in figures and words should be same.

36

 Mention of Currency either it is Pak Rupees, US Dollars, Euros, Ponds etc. Any instrument number. Like: Cheque Number, DD Number, Pay Order Number etc. Signature done by depositor.

A sample of deposit slip is placed below. It has two portions one is called as Receipt which is kept by the account holder for any further claim and second portion is known as Voucher which is kept by the bank.

(5.4.2.1.1) TYPES OF DEPOSIT SLIP: There are two types of deposit slip: Current Account Deposit Slip: This type of deposit slip is available for current account holders only. It is available in blue color. Current account holders can use this slip for depositing their amount into account. PLS Saving Deposit Slip: This type of slip is available in green color for all other account holders either it is saving, term deposit, BBA or any other account holder.

(5.4.2.2) CHEQUES
Through cheque we can withdraw any amount. While filling of a Cheque there should be no mistake, cutting or overwriting. When I filled Cheques I was very attentive because a little mistake of any word and spell can create more problems. I mentioned following information: Name of the Bearer.

37

 Date when it should be withdrawn. Amount in Words and Figure. Three signatures or thumb impressions. If there is any mistake in cheque then it can be covered while getting signature by account holder. There is a permission of almost 3 mistakes otherwise cheque will be rejected. (5.4.2.2.1) TYPES OF CHEQUES: There are two types of cheques: Open Cheques Crossed Cheques

Opened Cheques:
These cheques are those cheques which are paid across the counter of the bank. Open cheques can be: a) By Name Cheque b) Self Cheque c) Order Cheque

a) By Name/ Bearer Cheque:

If a drawer orders the bank to pay a stated sum of money to the bearer, it is called a Bearer Cheque. These cheques are usually mentioned with the party name and can be easily cashed.

b) Self Cheque:
This type of cheque can be easily cashed because there is no problem of checking Name of bearer. In this cheque particular account holder make one sign at the front of cheque and two signs on the back. BearerCheques and Self Cheques are mostly the same but on Self Cheques the word Self is mentioned.

c) Order Cheque:
If a cheque is to the order of a person in whose favor the cheque is drawn, it is called Order Cheque. This type of cheque can create problem if some one has not any reference in the particular bank branch from where he want to withdrawal money. The Order Cheque is paid by the bank only when it is satisfied about the identity of the person.

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CrossedCheque:
This type of cheque is highlighted with two Parallel lines across the face of the cheque, with or without the words & Co or A/c payee only, it is called a Crossed Cheque. The Crossed Cheque can not be paid on the counter of the drawee bank. It will be deposited in the account of a person in whose order or favor it is drawn.

(5.4.2.3) INTRODUCTION

OF ACCOUNTS

(5.4.2.3.1) CURRENCY OF ACCOUNTS: Accounts that are opened in MCB are available in different currencies. These are: Pak Rupee US Dollars Ponds Euro Others In cases where balance in MCBs Accounts remains zero for a continuous 6 month period, the account will be closed automatically, without any notice to the account holder. All accounts can be opened in Pak Rupees but only Saving and Current Accounts are opened in any other Foreign Currency.

(5.4.2.3.2)NATURE OF ACCOUNT:
Saving Account Current Account Basic Banking Account KhushaliBachat Account Enhanced Saving Account Foreign Currency Accounts

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(1)Saving Account:
MCBs Rupee Savings account is the most convenient way to manage their savings. Customers can enjoy the following facilities through opening the saving account in MCB Bank: An average balance of 10,000/- is required for opening a saving account in Pak Rupee. An average balance of 500/- is required for opening a saving account in other currencies. Profit is paid on account on a half yearly basis. Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan. Withdraw cash through Pakistans largest ATM network. Use account to pay their bills 24 hours a day, 7 days a week. Rs 50/- or 5/- if it is in other Currency will be charged each month if account holder has a low balance from its average balance.

(2)Current Account: Customers can enjoy the following facilities through

opening the current account in MCB Bank: An average balance of 10000/- is required for opening current account in Pak Rupee. An average balance of 500/- is required for opening a saving account in other currencies. Cash deposit and withdrawal facility at hundreds of MCB branches across Pakistan. Withdraw cash through Pakistans largest ATM network. Use their account to pay their bills 24 hours a day, 7 days a week. Rs 50/- or 5/- if it is in other Currency will be charged each month if account holder has a low balance from its average balance.

(3)Basic Banking Account:

The Basic Banking Account has the followinfeature: This account has been introduced to facilitate the low income group as well as the existing account holders who wish to convert their regular savings or current account into Basic Banking Account. The Basic Banking Account is a current account and can be opened with a minimum initial deposit of Rs. 1000/- only. Account holders will be allowed 4 withdrawal transactions (cash or clearing) each month.

40

 There will be no minimum balance maintenance requirement, and hence no monthly account maintenance charges will apply.

(4) KhushaliBachat Account:

This account provides the following facilities to customers with a daily basis profit rate: Minimum Rs 2500/- is required for opening this account. Profit is paid on account on a half yearly basis. Withdraw cash through Pakistans largest ATM network. Account holders will be allowed 4 withdrawal transactions (cash or clearing) each month.

(5)Enhanced Saving Account:

Keeping in view the small savers, looking for higher returns on their savings, MCB introduces the Enhanced Savings Account (ESA). This account can be operated via all the channels available at the MCB Bank such as Cheques, Virtual Banking, Mobile Banking, MCB Smart Debit Card and ATMs/Point of Sales all across Pakistan. MCB ESA, governed under PLS rules, can be opened with a minimum initial deposit of Rs.5,000 and the profit shall be calculated on an average balance maintained by the customer during that month. Following shall be the slabs used for profit calculation: If Average Balance is greater than Rs. 20,000 Standard PLS rates will apply. If Average Balance is less than Rs.20,000 (or equal to 20,000) with up to 4 withdrawal transactions per month 4.0% p.a. If Average Balance is less than Rs.20,000 (or equal to 20,000) with over 4 withdrawal transactions per month then Standard PLS rates will apply. The rates mentioned above are expected and shall be revised at least every six months. Average account balances can exceed Rs.20,000 during a month. However, in that case, they shall be paid profit as per the Standard PLS rates, as mentioned in slabs above. Profit shall be calculated on average basis and shall be credited to the account after each calendar quarter.

(5.4.2.4) ACCOUNT OPENING

My next step was opening of accounts.
(5.4.2.4.1) DOCUMENTS

REQUIRED: 41

Documents required for account opening are as follow:

(1)Individual:
Original Computerized Identity Card and two photocopies of it. In case of salaried person, a copy of his/ her service card or any evidence of service. In case of illiterate person, two recent passport size photographs besides taking his right and left thumb impression on the specimen signature card.

(2)Sole Proprietorship:
Application to open an account on the official letter head of the sole proprietorship. National Tax Number/ Sale Tax Registration Certificate (If available). Evidence of members of Trade Organization/ Chamber of Commerce etc. List of officials authorized to operate the account and their specimen signatures.

(3)Partnership:
Copy of Partnership Deed / Letter of Partnership duly signed by all partners of firm. Copy of Registration Certificate.

(4)Trust Accounts:
Copy of Certificate of Registration. Certified copies of Instrument of Trust.

Joint Stock Company:

Resolution of Board of Directors for opening of account specifying the person(s) authorized to operate the company account. Memorandum and Article of Association. Certificate of Incorporation. Certificate of Commencement of Business.

Account Opened In The Name Of Minor:

In case of minor (age below 18 years) the word MINOR to be added to the title of account. The particulars of Guardian (if not one of the applicant of same account with the minor) be provided as required under particulars of account in the account application form. Copy of CNIC of the Guardian along with form B for minor to be provided.

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(5.4.2.4.2) PROCEDURE

FOR ACCOUNT OPENING

The procedure for opening of account is as follow: STEP 1: Fill account opening form: A person who wants to open an account in MCB Bank fill the account opening form and there should be no cutting and overwriting. Account can be opened at the name of Customer or Corporate name. It can be opened in any type of accounts like: Current, Saving, BBA etc. Account can also be a Pak Rupee or a Foreign Currency account. For Pak Rupee account there should be minimum deposit of Rs10,000/- while US dollars and Euro should be 500. When form is filled then signatures/ thumb impressions should be taken from customers at minimum three places. Two signatures are done at the specimen signature card and at least one is signed on the account opening form. Signatures done by the customer should be same as in ID Card. If a customer wants to do a different signature, it should get permission from Manager First. A sample of Account Opening Form and Specimen Signature Card is given on the next coming pages.

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 STEP 2: Introducer: Person should also come with an introducer who is already the
account holder of bank. The introducer verifies the integrity, reliability and honesty of customer. If the introducer does not sign on form, customer will not be able to open his account in MCB.

44

 STEP 3: Assign Account Number: At this stage, account number is assigned to

the customer. Firstly account number is recorded on register then account is posted on computed.

STEP 4: Issuance of ChequeBook: Acheque book will not be issued till the
customer deposits the amount into its account. When he deposits his amount then a cheque book will be issued where account number and title is printed. While given of cheque book to customer it is firstly recorded on Cheque Book Register. ACheque Book can be issued by consisting of 25, 50 and 100 Leaves and rupees 3 are charged as per leave from customer.

STEP 5: Issuance of Letter of Thanks: At the last a letter of thanks is issued to

both account opener and introducer. This letter is sent for the purpose of sending thanks for opening of account to both persons. Hidden purpose of issuing this letter is to confirm the address of account opener. Then accounts opening forms are pasted on register and a record of all accounts sent to head office after every month.

(5.4.2.4.3) CLOSING

OF ACCOUNT

There can be different reasons for closing of account by Bank: If the account holder has no balance in its account and not try to deposit any amount. If account holder involve in any unfair means. Account can also be closed by the will of account holder itself.

PROCEDURE FOR CLOSING OF ACCOUNT: For closing of account:

A request letter for closing of account was written by account holder. Rupees 250 is charged. Cheque Book and ATM Card is taken back.

45

LOST OF CHEQUE BOOK: Ifcheque book is lost then a requisition slip was filled first.
Signature of account holder is verified. Lostdcheque book is stopped. Rs 100 will be charged and a new cheque book will be issued. Whencheque book is lost then it should be stopped by writing an application. Otherwise it can create problems for the account holder. A sample of Cheque book requisition slip is given below:

(5.4.2.5) ATM

CARD

Automatic Teller Machine Card or Smart Card or Debit Card can be used for drawing any amount by using ATM Machine. (5.4.2.5.1) TYPES OF ATM CARD: There are 4 types of ATM Card: International Gold International Classic Local Gold Local Classic 1) International Gold: This type of card can be used internationally. Through this card customers can withdraw 25000/amount each day. An annual fee is charged as Rs 500/-

46

2) International Classic: This type of card can also be used internationally but through this card customers can withdraw 10000/- amount each day. An annual fee is charged as Rs 350/3) Local Gold: This type of card is used within Pakistan. Through this card customers can withdraw Rs 25000/each day. An annual fee is charged as Rs 350/4) Local Classic: This card can be used within Pakistan. Through this card customers can withdraw Rs 10000/each day. An annual fee is charged as Rs 250/-

(5.4.2.5.2) APPLY FOR ATM CARD:

If a customer wants to get an ATM Card, he/she should mention in Account Opening Form. Under this form customer should select the type of ATM Card. On the next page ATM Card Portion is given. Customer will fill this portion and then his/her ATM Card application is given to the Head Office. After one week his/her ATM Card and Pin Card will be sent by the Head Office.

TERMS AND CONDITIONS:

There are different terms and conditions that are followed by the Card Holder: The Card shall be used by the Card Holder and is not transferable. The Card Holder shall, at under no circumstances, disclose to any person, whomsoever, his/her PIN allotted for operating the ATM of the Bank. The Card Holder undertakes to accept full responsibility to maintain sufficient funds in

47

his/her account(s) to meet withdrawal(s) affected through the use of his/her Card and he/she undertakes not to overdraw the account unless prior arrangements to this effect have been made with the Bank. In the event of Card Holder, at any time, drawing an amount in excess of the credit balance, either inadvertently or deliberately, he/she shall be bound to repay the amount overdrawn immediately on demand, along with liquidated damages at the rate of Twenty percent (@ 20%) on the amount overdrawn. Card Holder also undertakes to pay all taxes, ceases, levies and/or duties on ATM transactions by any Government (Federal/Provincial/Local) from time to time. In the event of loss or theft of the Card, the Card Holder shall immediately notify such loss or theft to ATM Customer Services of MCB Bank Limited at Ground Floor, ShaikhSultanTrustBuilding, Beaumont Road, Karachi, in writing as quickly as possible. It is. However clear that the Bank shall in no case be liable for any transaction and account(s) of the Card Holder will be debited accordingly.

(5.4.3)

(5.4.3.1)

CLEARING

It is a process where different instruments are sent for clearance if they are other than the existing branch of Bank and come for clearance from different branches or banks.

(5.4.3.1.1)TYPES OF INSTRUMENTS:
Following instruments can be presented at the clearing department: Cheques Demand drafts Pay orders FDD

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Clearing

Intercity

Local

(5.4.3.1.2) TYPES OF CLEARING:

Intercity Clearance: When a cheque comes for clearance that is outside the range from Kamoki to Khariyan. It will be under the intercity clearing. This type of clearing has some charges. Local Clearance: When a cheque comes for clearance that is inside the range i.e. Kamoki to Khariyan. It will be under the local clearing. This type of clearing is free from all charges.

Intercity

OBC

IBC

1)

INTERCITY CLEARING

1.1) OBC (OUTWARD BANK COLLECTION):

49

In OBC cheques are drawn on other banks that are outside the range. For this purpose, MCB Bank takes NIFT services and makes CCs.

NIFT Services:
Record in Register:
When a customer provides a cheque that is drawn on other Bank or Branch of different cities it will be recorded on a register that is called Bills Register.After recording bank will sent this cheque for intercity clearance.

Stamping:
Bank will place 3 different stamps on cheque. Two stamps at the front of cheque that are Crossing & Clearance and one on the back that is Endorsement. Crossing Stamp: Indicates that Cheque is under the possession of Bank. Clearing Stamp: Indicates that Cheque is presented for clearance and it has to complete in all aspects and fulfill all requirements. Endorsement Stamp: Indicates that Payee's account will be credited on realization for Bank.

Bundle Cover:
Then cheques are attached with a Bundle Cover page in which total amount & instrument number are mentioned and sent to the NIFT of that city. NIFT directly presents cheques to the concerning bank/ branch. A sample of Bundle Coven is given below:

50

 Delivery Report:
When cheques are presented to the NIFT then next day it sends a Delivery Report which shows that the cheque has been delivered to the NIFT. After 2 or 3 days when it sends a report with NIL VALUE it means cheque has been cleared. If it is not clear then cheque will be returned to the bank.

Charges:
NIFT collects its service charges from bank each month while Bank charges are as follow that it takes from customers: Commission (Fixed):Rs 200 Federal Excise Duty (Fixed): Rs 10 After the Clearance, all cheques will come to the Gujranwala MCB's Main Branch. Main Branch will then sent an advice to the Bank Square. On the basis of that advice all accounts are credited.

CC (CHEQUES FOR CLEARANCE):

Where the NIFT service is not available CC will be sent for clearance of cheque. The procedure for the CC is as follow: Record In Register: For the Clearance of Cheques all cheques are recorded on Bills register and CC number is allotted to those cheques. If these cheques are for any other branch of MCB then they will directly send to the branch of that city and if cheques are for any other Banks branch then they will send to MCBs Main Branch at that city where the bank sends these cheques for local clearance.

Charges:
Charges on cheques are as follow: MCB Commission: Postage Charges (Fixed): 0.15% of Amount RS 75/Other Bank 0.20% of Amount RS 75/-

51

FED Charges:

5% of Commission

5% of Commission

If any cheque is returned, RS 100/- commission charges are fixed. Postage and FED will remain with the same rate as above. If more cheques are send by one account holder then only commission and FED charges will be charged. Postage charges will be deducted from account just one time. Customers who have an average balance of RS 500,000/- have 10 CCs and online charges free each month.

After clearance of intercity cheques:

If these cheques have been cleared through CC then a credit advice will be sent by the MCB Main Branch Gujranwala in which whole record of cheques will be added and if any cheque is not clear then it will be returned back. If this cheque has been cleared through NIFT then credit advices will be sent by the Main Branch of that city where through NIFT it has already been sent and if any cheque is not clear then it will be returned back. After Clearance, all accounts are credited after getting commission from cheques and if any cheque is not clear then it is returned to the depositor.

1.2) IBC (INWARD BANK COLLECTION)

In IBC cheques are drawn on Bank. Branch of that city confirms about that Cheque through fax which are drawn on MCB Bank Square. In IBC Clearing, with all cheques NIFT also sends record of those cheques. These cheques have come for the purpose of clearance. If there is no problem in returning of cheques then these cheques will be debited from the accounts and credited to the MCB Main Branch of Gujranwala. If there is any return of cheques then these cheques will be attached to a Bundle Cover with describing the reason of returning and send to the Head Office through NIFT.

Local

Inward

Outward

52

2)LOCAL CLEARING
(2.1) INWARD
In Inward Clearing any instrument like: DD, TT, Pay Order, Chequesetc comes for clearance and will be drawn on bank. In Inward Clearing, with all cheques NIFT also sends record of those cheques. These cheques have come for the purpose of clearance. If there is no problem in coming cheques then these cheques will be debited from the accounts and credited to the MCB Main Branch of Karachi. If there is any return of cheques then these cheques will be attached to a Bundle Cover with describing the reason of returning and send to the Head Office through

(2.2)

OUTWARD

In Outward Clearance any instrument like: DD, TT, Pay Order, Chequesetc sent for clearance and drawn on other banks that are inside the range. For outward clearing: All cheques are Recorded in a Register An Add List is prepared where amount of these cheques are recorded. 3 stamps are then placed on cheques. With a Request Slip, Delivery Receipt and Add List, Cheques are attached and send to the NIFT. Next day a credit advice was sent by the MCB Main Branch Karachi. It is also attached with a list in which all those cheques' amount and number are mentioned that are not cleared. All returned cheques given back to the depositors and on the basis of cleared cheques accounts are credited.

REASONS FOR RETURNING OF CHEQUE

Cheques can be returned due to different reasons:

53

 Payment stopped by drawer. Amount in words and figures differs. Cheque post dated/ out of date. Clearing banks endorsement required. Clearing stamp required. Crossing stamp required. Advice not received. Account closed. Insufficient fund. Not drawn on that branch. Title of account required. Second/ Third signature required. Drawers signature incomplete/ differ/ required. Cheque is incomplete etc..

NIFT: NIFT stands for National Institutional Facilitation Technologies Private Limited
were incorporated in September 1995 as a joint venture between a consortium of six banks and entrepreneurs from the private sector. All commercial banks and their branches in major cities avail NIFT services. From June 2005, 43 commercial banks and their 3000 branches in 9 major cities utilize NIFT services. NIFT provides services at individual branch level to over 3000 branches in 9 major cities i.e. Karachi, Lahore, Islamabad, Peshawar, Rawalpindi, Hyderabad, Multan, Faisalabad and Quetta.And 30 smaller cities. These services include cheques clearing, collection & delivery, reconciliation, return (unpaid) cheques processing, same day clearing (express 2 hours clearing service), intercity clearing and inter branch & inter bank settlement.

Clearing Services: NIFTdeals, directly, with every branch in major cities and
adjoining 30 Industrial and Commercial towns. This is managed with an effective collection and delivery system of professional couriers. Inter-bank and intra-bank clearing (transfer delivery) has been merged.

54

The clearing service includes three main services: The main overnight clearing Same day - high value clearing Intercity clearing.

Basic Services and Facilities offered by NIFT:

Inter-bank Clearing and settlement. Intra-bank clearing and settlement. Collection & Delivery. Advices / vouchers for intra-bank and inter-bank Accounting. Direct posting support on media for -returns and inward. Query systems - Software and data enabling large member banks to organize internal. Call centers. Reports and Statistics to member banks on a regular basis. NET for Central Bank settlement.

Services Charges: NIFT performs all clearing services Intercity and local both. Its
charges for return report and clearance report are RS150/ Return Report means if Cheque is not clear by other bank NIFT returns this to the particular bank. Clearance Report means if Cheque clear by other banks NIFT report to the particular bank to which that Cheque belong.

(5.4.4)
(5.4.4.1) REMITTANCE APPLICATIONS

55

This is a process through which funds are transferred from one branch of bank to another. 2.4.4.1.1) KINDS OF TRANSFER PAYMENT Online Payment Demand Draft Pay Order Telegraphic Transfer/ Mail Transfer

5.4.4.1.2) Online Payment:

Due to online payment, you can send your amount to any branch of MCB which is online within few minutes. Features Of Online Payment Amount is transferred from one branch of a bank to another branch of the same bank. Payer and Payee bank is the same but branches are different. It is an unconditional form of payment. Procedure For Online Payment For online payment, a form is filled in which following information is mentioned: Name and Account number of Receiver/ Beneficiary. Amount which is transferred. Place and Branch code where amount is payable. Mode in which money is to be paid i.e. Cash or through Cheque. Name and Account of Sender. Online Payment can be sent by account holder and non-account holder both. For non-account holder a copy of CNIC is required. Online charges are same for both account holder and non-account holder. These are: Commission: RS 200/- (fixed) Federal Excise Duty (FED): RS 10/- (fixed) If MCB branch is not online or still not online then payment will be made through sending Credit Advice to that branch and it will take at least one day.

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5.4.4.1.3) Demand Draft:

It is a method used by individual to make payments from one bank account to another. OR A written order directing that payment to be made, on sight, to a third party.

The person writing the draft is called the Drawee; the bank making the payment is the Drawer, or the Payor bank. The beneficiary of a demand draft (the person receiving the payment) is the Payee. Drafts may be payable at some future date (time drafts) or on sight (demand drafts). Demand drafts drawn on banks are known as Cheques. Demand drafts are marketed as a relatively secure method for cashing checks. The major difference between demand drafts and normal cheques is that demand drafts do not require a signature in order to be cashed also known as "Remotely Created Cheques". Features Of Demand Draft Demand Draft is drawn by one branch of a bank to another branch of the same bank. Drawer and Drawee bank is the same but branches are different. The amount payable is specified in the draft. The person to whom amount is payable is also specified therein. It is payable on demand. It is an unconditional order for payment. Procedure For Getting DD:

A customer fills a form with following information. Name of Receiver/ Beneficiary. Account number of Receiver (Optional). Amount which is transferred. Mode in which money is to be paid i.e. Cash or through Cheque. Name and Account of Sender. Place where amount is payable. Charges were paid by customer other than their sending amount as follow: Commission: Up to the amount of Rs 50,000, Rs 50 was charged. Up to the amount of Rs 100,000, Rs 100 was charged.

57

If amount is more than Rs 100,000 then 0.50% of amount was charged. Postage (Fixed):Rs 75 Federal Excise Duty: 5% of Commission. Total amount is submitted by account and non-account holder and then Demand Draft is issued.

5.4.4.1.4) Pay Order:

This is another mode for Transfer of Fund. Features Of Pay Order It is paid only to the branch that issues it. The amount payable is specified in Pay Order. The person to whom amount is payable is also specified therein. It is payable on demand. It is an unconditional order for payment. Procedure For Pay Order:

A customer fills a form for P.O in which following information are mentioned. Name and Account number of Receiver/ Beneficiary. Amount which is payable. Mode in which money is to be paid i.e. Cash or through Cheque. Name and Account of payer. Pay Order charges for non-account holder are same as Online Charges, these are: Commission:Rs 200/ Federal Excise Duty (FED):Rs 10/Pay Order for account holder are as follow: Commission:Rs 50/ Federal Excise Duty (FED):Rs 3/Total amount was submitted by account and non-account holder and then Pay Order is issued.

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5.4.4.1.5) Mail

Transfer And Telegraphic Transfer:

Mail Transfer is the mode used when a customer wish to transfer money from his account in Center 'A' to either his own account in Center 'B' or to somebody else's account. In this mode of transfer, he is required to fill an application form similar to the one for DD, sign a charge slip or give a cheque for the amount to be transferred plus exchange and collect a receipt. The Bank will, on its own, send an order to its branch at center 'B' to deposit the said amount in the account number designated by him. The term Telegraphic Transfer or Telex Transfer, often abbreviated to 'TT'. This is similar to the Mail Transfer except that the message is sent to center 'B' by way of a telegram and the money is deposited the next day. The mode of instructions nowadays is increasingly the fax. For TT / MT payment, a form is filled by the customer in which following information are mentioned: Name and Account number of Receiver/ Beneficiary. Amount which is transferred. Place and Branch code where amount is payable. Mode in which money is to be paid i.e. Cash or through Cheque. Name and Account of Sender. While Telegraphic Transfer, bank has its own responsibility for sending amount. Charges are paid by customer other than their sending amount as follow: Commission: Up to the amount of Rs 50,000, Rs 50 was charged. Up to the amount of Rs 100,000, Rs 100 was charged. If amount is more than Rs 100,000 then 0.50% of amount was charged. Postage (Fixed):Rs 75. Federal Excise Duty: 5% of Commission.

TERMS AND CONDITIONS:

There are following terms and conditions for fund transfer: If the relevant instrument (i.e. Pay Order, Demand Draft etc) is stolen, lost or destroyed, the bank will be provided with an indemnity bond on Banks standard form (CF-15) duly acceptable to the bank, protecting the bank against liability with respect to the lost, stolen

59

or destroyed instrument in connection with any request that may be made for the issuance of replacement instrument or in connection with the refund of the amount of the instrument. In the event of cancellation request of a demand draft and pay order, the instrument must be endorsed by the beneficiary in discharge of its claim and a refund/ replacement request will only be obtained after such discharge to the entire satisfaction of the bank. In case of a foreign currency remittance, unless specified otherwise, all charges/ commission outside Pakistan are on beneficiarys account. In case of issuance of Pay Order/ Draft the instrument issued will be valid for 6 months from the date of issuance.

A sample of Remittance Application Form is given:

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5.4.5) 5.4.5.1) LOCKERS FACILITY

MCB offers their customers Safe Deposit Lockers in a pleasant and secure environment. Users are assured complete privacy when using their lockers. Customers can use lockers for keeping their valuables.

5.4.5.1.1) USERS OF LOCKERS In MCB only the account holders can get the facility of lockers either it is male or female. They pay only annual fee and can operate his/ her locker at any time.

5.4.5.1.2) SIZE OF LOCKERS Account holder may choose from three different sizes of lockers to suit their individual needs at reasonable annual rentals. Locker rental and key deposit is as per current schedule of charges. Size Small Medium Large Height 41/2 41/2 101/2 Width 7'' 14'' 14'' Depth 22'' 22'' 22'' Charges 1000 p.a 2000 p.a 3000 p.a

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 Small lockers: If a customer has a small locker he should payRs1000/- as an annual fee. He/she has to deposit Rs 3000/- as security in addition which is returnable. Medium Lockers If a customer has a medium size locker, he has to pay Rs 2000/- as an annual fee. He/she has to deposit Rs 3000/- as security in addition which is returnable. Large Lockers If a customer has a large size locker, he has to pay Rs 4000/- as an annual fee. He/she has to deposit Rs 3000/- as security in addition which is returnable.

5.4.5.1.3) LOCKER ENTERING REGISTERS: Lockers Opening Register Locker Operating Register Lockers Rent Register Lockers Opening Register: If a customer wants to get Locker facility he/ she should fill a Lockers Opening Form and mention specific signature on it. All forms are attached in Lockers Opening Register'. Locker Operating Register: When a customer comes for the operating of his/ her Locker whole record is added into a register that is called Lockers Operating Register Lockers Rent Register: Register in which annual charges are mentioned is known as 'Locker Rent Register'.

5.4.5.1.4) LEVER OF LOCKERS There are 2 levers of lockers with two different keys. One key remains with manager which is called Master Key and second key is kept by the customer which is known as Customer Key. Locker is opened with both of these keys. One lever is opened with the Master Key and second lever is opened with the Customer Key.

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5.4.5.1.5) LOSS OF KEY: There is no duplicate key of Lockers. If a customer loses the key of locker he/she has to pay Rs500/- minimum first then the locker is broken.

5.4.5.1.6) OPERATING OF LOCKER: When customer wants to operate its locker it should go to the operational manager. Operational manager will ask Code Number, that is a secret Number between bank and account holder. If code number is correct then Account holder's name, specific signature and timing of Customer's visiting are noted and recorded on 'Lockers Operating Register'. Then the customer has permission for using its locker.

5.4.5.1.7) CLOSING OF LOCKER For closing the locker: Account holder writes an application first. Locker key is taken from the customer. Security is returned back to the customer.

5.4.5.2) CASH

DEPARTMENT

Basic purpose of this department is to receive and payment of cash. 5.4.5.2.1) DEPOSIT OF CASH: If a customer wants to deposit cash into its account: He/ She should provide cash and a deposit slip to the cashier. Cashier counts the amount that is same as mentioned on deposit slip. On deposit slip depositor's signature should be done. Date should be the same day. For example, if a customer wants to deposit its amount on 4th January 2008. Then it should come for deposit at the same day. Then Account number and title are recorded on cash receipt page. On deposit slip two authorized persons do signatures. Receipt is given to the depositor and voucher is kept by the bank. At the last, amount is posted to the account and account will be credited.

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While posting of account if any problem is found in account number or title, a pay order will be made. When customer claims for its amount, depositor's signature is matched and correction will be made. At the last account is credited.

5.4.5.2.2) DEPOSIT OF CHEQUE: If a customer wants to deposit the amount of a cheque which is drawn on the same branch of Bank: He/ She should firstly ask from CFO whether this cheque will be cleared or not. If it can be cleared then he/ she should go to the cashier for depositing. This cheque should be a crossed cheque. Cashier will check whether this cheque is payable for the depositor or not. He will check the date which is mentioned on the cheque. Date can be from previous months but it can not be the coming date. Amount in figures and words should be same. Thumb impression / signature of the payer is verified by the Passing Officer At the last he will deduct the amount from the cheques account and credit it to the depositors account.

Clearing:
If a customer wants to deposit the amount of a cheque in its account which is not drawn on the same bank/ branch of the bank then it will be sent for clearance.

5.4.5.2.3) WITHDRAW AMOUNT: When customer wants to withdraw his/her amount from his account: He/ She should make a cheque first. Then he/ she should get a token. Cashier will receive the cheque if it is drawn on the same branch of bank. Token number is mentioned on the back of cheque. Date can be for previous 6 months but it can not be the coming date. For example: today is 4th January 2008, this cheque can be cashed if it has any date from 4th July 2007 but if

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there is a date mentioned 5th January 2008. Then it will not be cashed. Amount in figure and words should be same. Thumb impression and signature is verified by the Passing Officer One signature/ thumb impression should be placed on the right sight of cheque and 2 signatures/ thumb impression on the back of cheque. If all things are clear then amount will be given to the customer and account is debited. If amount withdrawal is up to the Rs 25000/- 2.5% will be deducted as a commission from customer's account. If a customer wants to withdraw amount from others account then the procedure will be same but some following enquiries will be made: Cheque will be received only if it is drawn on the same branch of bank. Cashier will cash this cheque only if it is an open cheque. Cheque should be made for the cash receiver.

5.4.5.2.4) CASH IN HAND: When the whole day passed then Cash In Hand is founded on the basis of Cash department working. Cash In Hand is basically the total amount in cash that is available to the bank. It is denoted by the following formula:

Cash In Hand = Opening Balance of the day (which is the closing balance of previous Day) + Whole day Receipts Whole Day Payments

(6)
6.1.1) STRENGTHS MCB ATM network is the largest in Pakistan. MCB Pak Rupee Travelers Cheques is the Market Leader.

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 MCB Consumer Banking Provides Customers with innovative saving products and services. In 2003 MCB declared as the best bank of Pakistan MCB interest income increased by 45.17% in 2006. It has more book value in 2006. In 2006, it has increased its net profit by 14.50%.

6.1.2) WEAKNESSES MCB works as a learning institution. Employees have low satisfactory because of low salary and highly working. MCB give incentive to their employees according to its rules. Investments of bank decreased by 9.44% Interest expense increased by 62.70% Bad debts increased by 3870%

6.1.3) OPPORTUNITIES MCB bank has an opportunity to open more branches outside Pakistan. It has needed to provide more quality service. Bank can bring innovation in their services. Expansion of Branches in those cities where customers are highly linked. 6.1.4) THREATS Major competitors like: City Bank, Allied Bank, Askari etc. Entrance of International Banks like: Dubai Islamic.

(7)

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7.1) PROBLEMS Limited capacity of building. Low training to the staff members. Less learning environment. No proper telephone system. No proper segregation of the department. No proper time management. Inefficient Machinery. Electricity problem. More workings of CFOs seat. No lunch break. No Half Day. Seating arrangement is a big problem.

7.2)RECOMMENDATIONS MCB Bank Kutchery Chowk Gujrat situated in a very commercial place. So a lot of improvement in needed in this branch for enhancing customers. Some of the recommendations are given for the Bank and MCB Bank Limited as follow: 7.2.1) Selection Criteria: Bank should be careful while selecting their employees because a healthy working environment results a good work. There should be eligible persons related to their studies and there should be proper recruitment system for hiring of employees. When employees are hired then not only at that time they should be trained but after some time period they should be sent for training in different branches. 7.2.2)Competition: MCB is facing a highly competition. It should always aware with its competitors strategies and customers problems. It should establish a research team who will give them information. On the basis of that information Bank should make reward-given strategies to employees and should open its branches where customers mostly face problems for safety.

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7.2.3) Reward System: Rewards affect the overall working of bank. If employees are not satisfied with their work or salary then it will affect their overall performance. Bank should give some targets to its employees and give reward on the basis of their performance. 7.2.4) Attract Depositors: MCB is already trying to attract more customers by launching new products. But it should introduce highly-deposit profit scheme from which customers can get more interest by depositing high amount for more time period. 7.2.5) Others: Some other problems should be covered by the Bank Square Branch Like: Mostly telephone is kept as a busy because CFO not only works as its own but also performs the duties of telephone operator so sometime it feels more problems for handling customers and picking the phone at the same time. So there should be hired one person as a telephone operator. Also there should be lunch break. Without eating it becomes very difficult for continuing the work.

(8)
Underwriting: It is a process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). Clearance of Cheque: It is the movement of cheques from the banks or other depository institutions where they are deposited to those on which they are written, and funds movement in the opposite direction. Syndications: It is a method of selling property whereby a sponsor (or Syndicator) sells interests to investors. Equity: The value of an owners interest in property, computed by subtracting the amount of outstanding mortgages or liens from the total value of the property is known as equity. Deferred Taxation:

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It is a sum set aside for tax in the Financial Statements that will become payable in a financial year other than the current financial year. Earning per Share: Profit after taxation divided by the weighted average number of ordinary share in issue. Liquid Assets: Assets that are held in cash or in a form that can be converted to cash readily, such as deposits with other banks, bills of exchange, treasury bills. Price Earnings Ratio (P/E Ratio): Market price of a share divided by earnings per share. Return on Assets: Profit after tax divided by the average assets. Revenue Reserve: Reserves set aside for future distribution and investment Return on Equity: Net profit for the year, less preference share dividends if any, expressed as a percentage of average ordinary shareholders equity. Shareholders Funds: Total of Issued and fully paid share capital and capital and revenue reserves. Current Account: In this type of account customers will not receive any profit. Saving Account: Accounts that require funds to be kept on deposit for a minimum length of time, but most permit unlimited access to funds. In this type of account customer will receive some profit after some definite period of time. Enormous: Very great in size, extent, number, or degree. Remittance: It means transfer of fund from one place to another.

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9)
The overall performance of MCB Bank limited has a favorable result. All the measures that are calculated show that the management of bank is properly utilizing all of its available resources. As the banks debts has increased by 9.53% in 2010 but it has enough assets to cover its total debts. Due to this increase banks solvency is also increasing because there is increase in equity by 72.1% which shows the high contribution of owner in income. The increase in reserves by 172.36% indicates that the bank has enough income to not only pay its all debts but also can be used for the investment in different securities and sectors. Book value of MCB bank is also increasing which has an identification of banks internal strength. When the people invest in any organization they have more focus on their capital gain which can be find from book value. As bank has more book value then it will attract more investors for doing investments. Bank not only increasing its assets and equity but it also has more cash flow for the use in operations. This availability of cash flow shows that the bank has enough amounts to pay its total debts and dividends. The net profit of bank is also increasing by 14.50% it is also representing the profitability of the bank. Earning assets of bank is also increasing but these earning assets are not the quality assets because there is more increase in interest expense which is increased by 62.70%.Bank is not also increasing its investments while it is getting reasonable dividend income from its currents investments. Bank is also providing more loans to its customers as compared to the previous years but it has more increase in deposits which shows that the is not properly utilizing its assets against deposits. The increase in deposits is also beneficial for the bank because the bank can use this amount for further investments and sanctioning loans to customers and on return it can get profits.

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(10)

Most of the information for the completion of this Report has been gathered from doing Internship in MCB Bank Square and from the following sources:

WEBSITE

www.mcb.com.pk http://en.wikipedia.org/wiki/Muslim_Commercial_Bank

BOOKS MANUALS From the Branch Manager Mr. Ramzan Customer Services Officer Miss Saira Clearing Officer Miss lram MCB Bank Annual Report

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