INTERNSHIP REPORT

ON

MCB Bank ltd

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 “PREFACE”

It is the requirement of the B.com(hons) course HAILEY COLLEGE OF COMMERCE,

University of Punjab,Lahore that all students of B.com have to spend six or eight weeks in any
organization to get practical exposure and to get familiarized with the ways to live in the
organizational environment which is dramatically different from the educational environment.
That two months period called “Internship Period”, if spent properly and sincerely, enables the
students to be more confident, more knowledgeable, more responsible and, above all, more
committed to its work in the practical field. I have also been assigned to do internship of six
weeks period in MCB Dholanwal Branch Lahore. Its Branch Code is 1342

It has enabled me to understand the practical scenario and sharpen our decision
making power and utilizing the resources in an effective manner, so that our resources generate
maximum profit.

In preparing this report, I have put all of my best efforts and tried my level best to give
maximum knowledge. Despite of my all the coherent efforts, I do believe that there will always
be a room for improvement in the efforts of learner like me.

Muhammad Umair Riaz

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 “ACKNOWLEDGEMENT”

All praises to almighty Allah and our holy prophet Muhammad( PBUH) who gave me
the courage and patience for completion of this final report.

I wish to acknowledge my gratitude to my inspiring Teachers for their endless their

persistence, support and encouragement, and for providing me a lifetime opportunity to work
with Muslim Commercial Bank.

I am also very thankful to Muslim Commercial Bank Ltd. in Dholanwal Branch Lahore
and the Branch Manager Mr. Abdul Malik who gave me opportunity to work with experienced
persons in their organization and Personal Bank Advisor Mr. Muhammad Akram, Malik
Ashiq (BOM) who though out help me to understand the working techniques and also help me
to clear my all points. He motivate me each day in the bank without his help I will not be able to
understand the formal structure of bank. Mr.Sufi imran, Mr. Asim Butt and Ali was outstanding
gainer during my internship. I think bank was very lucky to have such an compatible and
competent internee who Started “E-Banking” in branch.

I am also thankful to my parents, family and friends that continually offered encouraging
support.

Muhammad Umair Riaz

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Table of contents:

Overview of the Organization:......................................................................................................06

Introduction of All Departments:..............................................................................................07
Products and services of M.C.B:...............................................................................................14
ORGANIZATIONAL HIERARCHY CHART:....................................................................................43
Plan of you internship program....................................................................................................44
Introduction of Branch:.............................................................................................................45
Name of Departments:.............................................................................................................46
Training Program:.........................................................................................................................48
Learning Experience:....................................................................................................................49
Financial Analysis:........................................................................................................................50
SWOT Analysis:.............................................................................................................................70
Strength:...................................................................................................................................71
Weakness:................................................................................................................................72
Opportunities:..........................................................................................................................72
Threats:.....................................................................................................................................73
Recommendations:.......................................................................................................................77
Conclusion:...................................................................................................................................78

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“Executive summary”

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of
over 60 years in Pakistan it is Technology-based banking services. I did my internship in MCB
Bank Limited Dholanwal branch Lahore branch from 07-Aug to 19th Sep 2014.

As it was my very first experience of work in MCB so they rotated me in different departments
like Account opening, clearing, issuance of ATMs, Cheque book, online transaction. The staffs
made me learn the basics of different departments in this way.

I faced a lot of difficulties during the span of learning but I got full attention and support from
the staff, and they really made me learn a lot.

The main purpose of internship is to learn, by working in practical environment and to

apply the knowledge acquired, during the studies, in a real world scenario in order to tackle the
problems. In this report the detailed analysis of the organization has been done and all the
financial, technical, managerial and strategic aspects have been evaluated to analyze the current
position of the organization. Along with it, the background analysis, the prevailing competition
analysis, the business process analysis, and the internal environment and external environment of
the organization have been discussed and the recommendations & suggestions for the
improvement have been made wherever required. During my six weeks internship program, I
mainly worked with the following departments:

GENERAL BANKING, CREDIT and FOREX, These departments have been discussed
in detail and all the policies and procedures have been described thoroughly.

This report will provide a complete and clear image about Muslim Commercial Bank

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 “OBJECTIVES”

This internship offers me an incredible opportunity to gain real-world experience in the

high-stakes finance industry. The primary objective of the project is to forecast or determine the
actual financial status and performance of an organization

Following are important objectives of studying the organization:

To learn about Capital Adequacy, Asset and Liability Management, Interest Rate Risk ,
Liquidity, Asset Quality & Profitability of bank.

To monitor the adequacy and effectiveness of the internal control system and Financial
Reporting Framework.

Assessment of the company’s financial condition through the financial statements.

Analyzing savings and investment trends in banking sector.

To describe the impact of financial decisions on the health and functioning of the overall
organization.

To examine the Innovations in customer service in banking.

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 “VISION”

“To be a world class bank dedicated to excellence and to surpass the highest expectations of our
customer and all other stake holders”

“MISSION”

“To become the world class bank by putting the customers at first”

 Set the highest industry standards for quality across all areas of operations on a sustained
basis.
 Optimize people, process & technology to deliver the best possible financial solution to
our customer.
 Become the most sought after investment.
 Be recognized as the employer of choice.

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 “Introduction of the Organization’s Business sector”

The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank. This
history of banking is traced to as early as 2000 B.C. The priests in Greece used to keep money
and valuables of the people in temples. These priests thus acted as financial agents. The origin of
banking is also traced to early goldsmiths. They used to keep strong safes for storing the money
and valuables of the people. The persons who had surplus money found it safe and convenient of
deposit their valuables with them. The first stage in the development of modern banking, thus,
was the accepting of deposits of cash from those persons who had surplus money with them.

The goldsmiths used to issue receipts for the money deposited with them. These receipts began
to pass from hand to hand in settlement of transactions because people had confidence in the
integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted
in payment of debts; then the receipts were drawn in such a way that it entitled any holder to
claim the specified amount of money from goldsmiths. A depositor who is to make the payments
may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These
receipts were the earlier bank notes. The second stage in the development of banking thus was
the issue of bank notes.

The goldsmiths soon discovered that all the people who had deposited money with them do not
come to withdraw their funds in cash. They found that only a few persons presented the receipts
for encashment during a given period of time. They also found that most of the money deposited
with them was lying idle. At the same time; they found that they were being constantly requested
for loan on good security. They thought it profitable to lend at least some of the money deposited
with them to the needy persons. This proved quite a profitable business for the_ goldsmiths.
They instead of charging safe keeping charges from the depositors began to give them interest on
the money deposited with them. This was the third stage in the development of banking

Before separation of Indo Pak, the need for more Muslim banks was felt. And Muslims having
strong financial capacity were thinking to invest in this sector as well. This was the idea which
paved the way for setting up MCB Bank Ltd known as MCB. This was the third Muslim bank in
the subcontinent.

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“Welcome to MCB Bank”

MCB Bank Limited (formerly Muslim Commercial Bank) previously named as a (Mansoor Co-
operative Bank) was incorporated by the Adamjee Group on July 9, 1947, under the Indian
Companies Act, VII of 1913 as a limited company. This bank was incorporated under
companies’ act 1913 on 9th July, 1947 (just before partition) at Calcutta. But due to changing
scenario of the region, the certificate of incorporation was issued on 17 th August, 1948 with a
delay of almost 1 year; the certificate was issued at Chitagong. The first Head office of the
company was established at Dacca and Mr. G.M. Adamjee was appointed its first chairman. It
was incorporated with an authorized capital of Rs.15 million.

After some time the registered office of the company was shifted to Karachi on August 23rd,
1956 through a special resolution, now recently the Head office of MCB has been transferred to
Islamabad in July, 1999 and now Head office is termed as Principle Office.

This institute was nationalized with other on January 1st, 1974. At that time it had 506 branches
and deposits amounting to Rs.1.640 million. Although. MCB has a reputation of a conservative
bank but nationalization also left its effects on this institute as well and by end of year 1991 in
which it was privatized the total number of branches were 1.287 and deposits amounting to as
high as Rs.35,029 million.

The bank was established to provide banking facilities to the business community of South Asia.
The bank was nationalized in 1974 during the government of Zulfikar Ali Bhutto. This was the
first bank to be privatized in 1991 and the bank was purchased by a consortium of Pakistani
corporate groups led by Nishat Group. As of June 2008, the Nishat Group owns a majority stake
in the bank. The president of the bank is Imran Maqbool.

The group has a presence in business sectors of the country such as banking, textile, cement and
insurance.

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Mian Mohammad Mansha is the Chairman of the
group (and also MCB)

PRIVATIZATION:
When privatization policy was announced in
1990, MCB was the first to be privatized upon recommendations of World Bank and IMF. The
reason for this choice was the better profitability condition of the organization and less risky
credit portfolio which made'' it a good choice for investors. On April 8th, 1991, the management
control was handed over to National Group (the highest bidders). Initially only 26% of shares
were sold to private sector at Rs. 56 per share.

AFTER PRIVATIZATION:

Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains
made in recent years and prepare the groundwork for future growth. The bank has restructured its
asset portfolio and rationalized the cost structure in order to remain a low cost producer.

After privatization, the growth in every department of the bank has been observed. Following

are some key developments:

 Launching of different deposit schemes to increase saving level.

 Increased participation on foreign trade.

 Betterment of branches and staff service level.

 Introduction of Rupee Traveler Cheques & Photo Credit Card for the first time in
Pakistan.

“MCB BANK TODAY”

MCB today, represents a bank that has grown with time, experience and Pakistan. A major
financial institution, in scope and size, it symbolizes a fully growing tree evergreen, strong, and
firmly rooted.

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FOREIGN TRADE:
The bank conducted import business during the year amounting to RS. 54.0 billion as compare to
RS. 56.4 Billion In 2011. The export business slightly improves to RS. 36.9 Billion From RS.
35.1 Billion. In 2012. Home remittances decline to RS. 16.7 Billion From 30.7 Billion the
decline in home remittances business was due to freezing of Foreign Currency Accounts, which
has affected the confidence of Pakistanis working overseas.
YEAR 2010 COMPLIANCE:
MCB’s strength lies in providing a technological base at the gross root level of the society with a
challenge to educate and assimilate such systems across vast cultural and economic backgrounds.
With over 900 automated branches, 263 online branches, over 151 MCB ATMs in 27 cities
nationwide and a network of over 16 banks on the MNET ATM switch, MCB continuously
innovates new products and services that harness technology for the customer’s benefits.
SOCIAL SECTOR:
The bank activity participating in the Prime Minister self-employment Scheme. The application
received from various applicants is being processed on merit and disposed off as quickly as
possible.
BUSINESS STRATEGY:

The business strategy of MCB is to provide financial solutions to major segments of its customer
base, namely retail and corporate. Separate business groups have been set up to ensure a more
focused approach in satisfying the diversified customer segments. The Bank has also established
an Islamic Banking unit to offer Shariah compliant products and services, with dedicated Islamic
banking branches in six cities. The plan for future is to further realize the capacity of Islamic
Financial Systems and to bring Shariah compliant network parallel to current retail network of
traditional banking.
Wholesale Banking Group caters to the top tier local and multinational companies. As a result of
organizational restructuring including reinvigorating Investment Banking and beefing up
relationship teams, the Group is in line with the industry’s best practices. MCB has closed some
large deals and is currently working on a number of large transactions including advisory
business. It is a strong competitor in cash management and structured financing activities.

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Retail Banking Group focuses on trading and middle market segment primarily for building risk
assets and trade related business. MCB caters to their needs of financing foreign and local trade,
funds transfer and other seasonal requirements. The Bank has renovated a large number of
branches and staff has been trained for meeting the requirements of SMEs and other retail
customers. A separate SME Financing Division has been set up to provide customized financing
solutions to this very important segment of the economy. The Group also focuses on the
development of innovative consumer asset products for satisfying the personal needs of the
customers. MCB has a significant share of consumer financing business with its House and Car
Financing schemes. The recently launched running financing facility against the mortgage of
property is also expected to go a long way in increasing the quality consumer credit portfolio of
the bank. With the experience gained in the past few years, the Bank is fast progressing towards
becoming the leading bank in consumer business. Other areas such as Bancassurance set newer
records as well by crossing the Rupees 1 billion benchmark in 2011 owing to the continuous
determination to strengthening this product. Islamic Banking outperformed in terms of improved
profitability and volumes with introduction of additional 11 products and expansion with 8 new
branches in 2011 and Privilege Banking, an elite setup, is a benchmark in the industry through
means of its quality banking. They currently have 9 branches across major cities.
Role of the organization in Pakistan:
The bank was established with a view to provide banking facilities to the business
community of the South Asia. The bank was nationalized in 1974 during the government of
Zulfiqar Ali Bhutto. This was the first bank to be privatized in 1991 and the bank was
purchased by a consortium of Pakistani corporate groups led by Nishat Group.MCB is
Pakistan’s fourth largest bank by assets having an asset base of US$6.7 billion and the largest by
market capitalization having a market capitalization of US$4.1 billion. The Bank has a
customer base of approximately 4 million and a nationwide distribution network of
1,026 branches, including 8 Islamic banking branches, and over 300 ATMs, in a market
with a population of 160 million. In 2008 the head office of MCB was shifted from Karachi to
Lahore in a newly constructed building, namely MCB House located at Sharea Ghous-ul-
Azam, commonly known as Jail Road.

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“Products and services of M.C.B”
MCB bank of Pakistan deals in all the schemes and the services of a bank in a current scenario
there are many sets of financial infrastructure with which the MCB bank is leading in providing
the services to its customers.

Consumer banking:

The consumer portfolio, comprising the debit card, credit cards, auto loans, personal loans and
mortgages will be established phase by phase. However, we are confident that our strengths,
together with our largest network of online branches, a superior technology platform, a big
customer base and the Consumer Personal Banking Group (CPBG), will take the Bank’s
profitability to new heights.

Commercial banking:

The MCB is also doing the commercial banking and it’s leading in this department MCB offers
retail product to its consumers. The MCB main focus to introduce the various financing and
investing products to its valuable clients, and contributes the steady growth to the financial
industry. The commercial and the retail banking offers the verity of asset and liability –based.

Deposit Products:
These are the products, which are deals in deposit terms, the amount in these accounts are held
for a period. The Bank issue Cheque book to the customer and customer can also get an ATM
card with a right to withdraw money at any time.

Deposit Products of Muslim Commercial Bank limited,

 Current Accounts
 Saving accounts
 Basic Banking Account
 Supreme Current Account (FCY)
 Young Loin Saving Account (New Product 2010)

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“Profit & Loss Sharing Term Accounts”

An equitable sharing of risks and profits between the parties involved in a financial transactions.
Three parties are, bank (working as financial intermediary), the depositor and the actual user.
The individual or customer who deposits their fund in bank will share equal profit and loss with
the actual users. But bank will take a fixed rate of interest from the actual user.

 PLS Saving Account

 Senior Citizens Saving Account
 Gharayloo Saving Account
 Saving Extra Account
 PLS-Saving Profit Plus Account
 Corporate Premier Account
 Supreme Saving Account (PLS)

“E-Banking”
MCB E-Banking offers convenience to manage and control banking and finances, when
customer wants to, where you want to. MCB’s E-Banking facility is easy to understand and
secure. And it’s free of cost. With MCB E-Banking customer can access any of the banking
services, 24 hours a day, 7 days a week and throughout the year. MCB E-Banking offers a wide
range of online services which makes banking accessible anytime and from anywhere.
 Detailed Account Summary of all listed accounts.

 Mini-statements of each of the listed accounts showing recent

transaction.

 Statement-by-Period of each of the listed accounts, based on the

period specified.

 Immediate or Scheduled Transfer of Funds between your own

accounts, as well as to third-party accounts setup as beneficiaries,
maintaining accounts with MCB.

 Scheduling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers.

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  Payment of utility bills for registered Utility Companies.

“Online Services”
MCB Debit Card:
Now MCB brings a secure, convenient and quick payment facility that enables customer to do
purchasing by using existing MCB ATM / MCB Smart Card as a DEBIT CARD. Officially it
refers as VDC (visa debit card).
Mcb offers different types/ of limits VDC

MCB Smart Card:

MCB now offers MCB Smartcard -a secure and feasible instrument of payment with unmatched
functionalities. It provides 24-hour direct access to bank account. The convenience and
flexibility of MCB Smartcard will help customer live a smarter life. It is not only helps customer
to manage expenses, but also eliminates undue interest on day to day credit card transactions.

“Corporate Banking”
Cash Management Services:
MCB’s network of over 1000 branches in Pakistan enables it to collect and payout payments
efficiently with its cash management services. This also enables it to offer customer a choice of
paper based or electronic fund transfer solutions including collection amounts, cross branch on-
line transactions etc.

Term Loans:
MCB offers Short to Medium Term Finance to meet capital expenditure and
short term working capital requirements of customers. The loans are structured on the basis of
underlying project characteristics and cash flows generated by the business.

“Non-Financial Services”
 Balance Certificate request
 Bank ot acoount Statements request
 24 Hour complaint registration

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  Zakat Deduction certificate request
 Tax deduction certificate request
 Mobile Banking activation
 Debit card blocking
 SMS Banking

Competitors of M.C.B:
The competitors of Muslim Commercial Bank are the other commercial banks, in which Habib
Bank Limited, Habib Metro Politon Bank Limited, Bank Alfalah Limited, The Bank of Punjab,
Allied Bank Limited, United Bank Limited, Soneri Bank Limited, Standard Charterd Limited,
Bank Alhabib Limited, Askari Bank Limited, and Faisal Bank Limited.

“Introduction of All Departments”

Retail Banking Division:

In this division, bank deals with the customers and execute their transactions directly. The bank
also deals with other corporations and banks. Bank provides the services of savings, checking
accounts, mortgages, personal loans, debit cards, credit cards, and ATM cards.

Assets Management Division:

The Bank will invest on behalf of its clients and give them access to a wide range of traditional
and alternative product offerings that would not be to the average investor. It includes the
automatic sweep of cash balances into a money market fund, as well as brokerage services.

Credit Administration Division:

In this division bank deals with the credit, bank gives the loan to the individuals and to the
corporations. They inspect the borrower, either he will be able or not to take loan.

Audit & Inspection Division:

This department of bank includes the Audit of all the branches; they audit branches and give
some opinions to execute their transactions.

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Human Resource Division:

This division of Muslim Commercial Bank do the recruitment of the employees and also to
hiring and firing of them. The employees of this division will protect the rights of the whole
employees of Muslim Commercial Bank.

Finance Division:

Finance division controls the whole financing activities of Muslim Commercial Bank branches,
the employees of the division are monitor the activity of the finance credits and debits and
Investments also. They will report to The State Bank of Pakistan.

“GENERAL BANKING”

It is a backbone of banking. It is one of the major department of MCB. It further consists of

following departments:

• Operations Department
• Current Department
• Remittance Department
• Clearing Department
• Cash Department
• Accounts Department
• Technology Department 

“DEPARTMENTS WHERE INTERNSHIP WAS CARRIED OUT”

• Operations Department
• Clearing Department
• Remittance Department

“OPERATIONS DEPARTMENT”

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In Operations department I was under supervision of Mr. Malik Muhammad Aashiq ,
Operational manager. And I learnt to open accounts of different types and nature which are as
follows,

“TYPES OF ACCOUNTS”

Following are the accounts which is mostly used in MCB:

• Single

• Joint

• Partnership

• Private Limited

• Public Limited

SINGLE:

Only one person can operate this a/c. An individual who can fulfill the requirement of bank can
open this a/c. We can call it a personnel or individual a/c. The requirements for this type are
National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Letter
of Kinship etc.

JOINT:

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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 anyone or more. The requirements
for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account
Opening Form, Letter Kinship, Additional Signature Form (For Joint Account), Declaration
regarding the operator of account.

PARTNERSHIP:

For partnership a/c, along with the application form other requirements needs satisfied. The
requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance,
Account Opening Form, Registration certificate, agreement among partners and Commencement
of business and private registration, resolution of board of directors, commencement of business,
memorandum and articles of association and balance sheet etc.

PRIVATE LIMITED:

Such type of account is opened in the name of the businesses having private limited concern and
mostly medium business enterprises open such kind of accounts. All the board of directors have
to submit the declaration regarding the account operator on the company pad and with the rubber
stamp with the signature of the all the members of the board of directors. In case of any change
in director’s bank must be informed regarding that. In case funds are borrowed by the company
all the directors approval is necessary rather not only the authorized partner who can be the
operator of the account.

PUBLIC LIMITED:

Public Limited A/C type of account is opened in the name of the businesses having Public
limited concern and mostly medium business enterprises open such kind of accounts. And terms
regarding board of directors are the same as of private limited.

NATURE OF ACCOUNTS:

• Current Account

• PLS Saving bank A/C

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• Khushali Bachat Account (KBA)

• Saving 365 A/C

• Basic banking A/C (BBA)

CURRENT ACCOUNT:

In this type of accounts the client is allowed to deposit or withdraw money as and when he likes.
He may, thus, deposits or withdraws money several times in a day if he likes. There is also no
restriction of amount to be deposited or withdrawn. However, there is requirement of minimum
balance maintenance of Rs. 1000/-. Usually this type of account is opened by the businessmen.
No profit is paid by the bank and no service charges are deducted by the bank on current deposits
account. These types of deposits are also exempt from compulsory deduction of Zakat.

PLS SAVING BANK A/C:

This account was started in 1980s after the issuing of banking ordinance in 1980 by Zia
Government to develop Islamic banking in Pakistan. In this case customer would be responsible
for bearing profit as well as loss. The bank would be within its rights to make investment of
credit balances in the PLS saving accounts in any manner at its sole discretion and to make use
of the fund to the best of its judgment in the banking business under the PLS system. For
withdrawal of larger amount, 7 days’ notice in writing is required to be given.

• Minimum balance is Rs.500/=

• Not more than eight withdrawals in a year allowed

• More than Rs.15000/= are not allowed to draw

• Seven day notice is required for big withdrawal

• Zakat deducted on @ 2.5%

• Profit calculated on monthly basis

• Profit paid on annually basis

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SAVING 365 ACCOUNT:

This account is newly developed of MCB and it provides flexibility of saving account to
business people. Profit on deposits will be payable on daily product basis on balance of RS.
500,000/- and above. However, if balance in the account falls below RS. 500,000/- on any day,
the product will be ignored. There will be no restriction on withdrawal from the account. Zakat
and withholding Tax is also applicable on the account opened under this scheme.

• Minimum balance is Rs.500,000/=

• Below minimum balance, profit calculation ignored

• Profit paid on annually basis

• 10% Withholding Tax on minimum balance

• Zakat deducted on @ 2.5%

KHUSHALI BACHAT ACCOUNT:

• Saving type account

• Rate of return is 8% per annum

• Profit calculated on daily basis

• Profit paid on half yearly basis

• Utility bills can be debited through this a/c

• No charges will be debited for utility payments

BASIC BANKING A/C (BBA):

• Introduced specially for salaried persons.

• Minimum balance is Rs.1000/=

• No service charges.

• Only two transactions allowed, in one month.

• For more than two transactions Rs.35/- per transaction.

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• Single natured A/C.

“ACCOUNT OPENING PROCEDURE”

Following steps are involved in A/C opening,

ACCOUNT OPENING FORM:

Firstly the customer fills the account opening form and provides all the information as provided
above. I experienced to fill this form

INTRODUCTION:

An account is needed to be introduced. The introduction of a current account holder is accepted

for the opening of an account.

 The introducer should be a branch customer or may be account holder of any branch of
MCB; however signatures should be verified by the banker. In certain cases, introduction
from bank other than bank MCB may be allowed.
 Personally known accounts may be introduced by the bank staff.

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  Introduction from an account holder not personally coming to the bank should be verified
by the bank.

STAMPING:

Then it is stamped. Stamps like. BAL sign verified, Sign Admitted Stamp, Sign Verified stamps
etc are affixed.

ACCOUNT NUMBER:

When all the procedures are completed than the final approval is taken from the branch
manager. After obtaining approval, an account number is allotted to the customer and all the
information is entered in to the computer and KYC is filled up. Then that account number is
writing on the Cheque Book, Specimen Signature cards and account opening form.

KNOWING YOUR CUSTOMER(KYC):

After entering information KYC is filled up. It should be ensured that at the time of filling
information in KYC, a customer should be physically present. After this all information is saved
in system. I filled KYC form also.

APPROVAL:

This account is further approved by Manager Operations.

SEND FORM TO HEAD OFFICE:

After fulfilling all the requirements and verifying the forms from operation manager the account
opening form is sent to Head Office Karachi and make request to issue the printed cheque book.

LETTER OF THANKS:

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Subsequent to the opening of an account, letter of thanks should be sent under registered post or
courier service to the customer and the introducer.

ISSUANCE OF A CHEQUE BOOK:

After opening an a/c with the bank, the a/c holder cannot immediately start operating his/ her
account. The cheque book is issued, when a customer will submit a copy of letter of
acknowledgement duly signed by him, in case of new account. And for subsequent issuance of
cheque book He/she has to make a request once again in the name of bank for the issuance of
cheque book and he should mention title of A/C, A/C number, sign it properly and mention the
number of leaves requires. Normally a cheque book having at least 25 leaves is issued but it can
also be of 50 leaves.

CLOSING OF AN ACCOUNT:

There is no. of reasons of closing an account. Some are listed below:

• If customer desires to close his account

• In case of death of one account holder.

• Bankruptcy of the account holder.

• If an account contain nil balance or not up to the requirement of rules.

Before closing any account, bank send letter to the account hold for informing him that his
account is going to be closed. There is need an approval form higher authority to close any
account.

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 “CLEARING DEPARTMENT”

In clearing department I worked under supervision of Mr. Asim

Butt. In clearing department and learned about inward and
outward clearing and I also learnt about,

MEANING OF CLEARING:

The word clearing has been derived from the word “clear” and is
defined as,

“A system by which banks exchange cheques and other

negotiable instruments drawn on each other within a specific area
and thereby secure payment for their clients through the Clearing
House at specified time in an efficient way.”

CLEARING HOUSE:

It is a place where cheques are presented, collected from bank branch. It is one of the services
provided by NIFT to other commercial banks. NIFT acts as a clearinghouse.

NIFT:

NIFT stands for National Institutional Facilitation Technologies. Clearing House of SBP has
shifted a tiresome part of its work to a private institution named NIFT. NIFT collects cheques,
demand drafts, Pay orders, Travelers Cheques, etc. from all the branches of different banks
within city through its carriers and send them to the branches on which these are drawn for
clearing. After the branches approve the instruments drawn on them, NIFT prepares a sheet for
each branch showing the number for instruments and amount in its favor and drawn on it and

26
sends it to each branch. A similar sheet for each bank is also sent to clearing house of SBP where
accounts of banks are settled in the same manner.

LEARNING IN CLEARING DEPARTMENT

My learning in clearing department was of following things:

• Procedure of clearing a cheque.

• Checking of cheques.

• Inward and outward clearing.

• Different reasons of returning a cheque.

• Types of clearing stamps.

CLEARING PROCEDURE:
Instruments collected are treated as Transfer, Transfer Delivery, Clearing, and Cheque
collection.

CHECKING OF CHEQUES:

When the instruments are collected from the client. Following things are checked

• Cheque date, instrument should be neither stale/ nor post-dated.

• Title

• Amount in figures and words should be the same

• There should be no cutting and overwriting on the cheque

• Instrument should not bear any unauthorized alternation.

• Cheque is crossed.

TRANSFER:

When the instruments are collected and paid by the same branch, it is called transfer.

TRANSFER DELIVERY:
27
When instruments are collected and paid by two different branches of the same bank situated in
the same city, it is called transfer delivery

A cheque is processed under transfer delivery when it has crossing stamp and is from local
branch of MCB

CLEARING:

Instruments which are drawn on the branches of some other bank of the same city or of the same
area, which is covered by a particular clearing house, are processed for clearing. In outward
clearing when cheque is received two copies of voucher SF-37 are prepared, one copy and
instruments along with clearing stamp, realization stamp, add list and two vouchers of clearing
summary are sent to NIFT in a sealed bag. And clearing records are recorded in clearing register.

In Inward clearing instruments received from NIFT are posted in Computers after checking.

CHEQUE COLLECTION (C.C):

When cheque is from another city then it is grouped as C.C .Such instruments are processed as
cheque for collection. In this procedure SF-37 form is used in Cheque collection. Original
voucher with cheque, stamped as C.C along with C.C number is sent to main branch of the
responding city which is further sent to NIFT. Whereas Carbon copy with Pay-In-Slip is taken by
bank for record purposes.

PAY-IN-SLIP:

It is used for two purposes

 Whenever we want to deposit cash in our account then pay-in-slip is used by writing
amount on it and depositing it to cashier along with money.
 Whenever we have cheque from any party to be collected in our account we fill pay-in-
slip. One part is attached with cheque and another is given to cheque holder as a receipt.

NOTE:

28
In inward clearing sometimes cheques are not passed due to some reasons then cheques are sent
back to NIFT along with cheque return memo. Some of these reasons are,

• Cheque incomplete

• Clearing stamp required.

• Drawer’s sign incomplete

• Drawer’s sign different from specimen

• Post Dated

• Payment stopped by drawer.

• Amount in words and figures differ.

• Insufficient funds etc.

“REMITTANCE DEPARTMENT”

REMITTANCE:

Remittance is transfer of funds from one place to another or from one person to another. It is an
important service provided by banks to customers as well as non-customers. Since it is not a free
service it is a source of income for the bank.

PARTIES INVOLVED IN REMITTANCE:

29
Four
parties

involved in remittance: -

Remitter, Remittee, Issuing Bank, Paying Bank

REMITTER:

One who initiates, or requests for a remittance. The bank charges him a commission for this
service. He may or may not be the branch’s customer.

REMITTEE:

A Remittee is also called the beneficiary, or the payee. The person in whose name the remittance
is made. A Remittee is also the one who receive the payment.

ISSUING BANK:

The bank that sends or effects the remittance, through demand drafts, telegraphic transfers, or
Mail Transfers.

PAYING BANK:

Paying Bank also knows as the drawee branch. The branch from where the instrument is drawn.

30
TYPES OF REMITTANCE:

Remittance is classified into following four types

• Inward remittance, instruments received for payment

• Outward remittance, issuing instrument to the responding branch.

• Inland remittance, with in same country.

• Foreign remittance, from one country to another country.

INSTRUMENTS USED IN REMITTANCE:

• Demand Draft (DD)

• Telegraphic Transfer (TT)

• Pay Order (PO)

• Call Deposit Receipt (CDR)

• Rupees Traveler Cheque (RTC)

DEMAND DRAFT:

DD is a written order given by the branch of the bank on behalf of the customer to other branch
of the same bank to pay the certain amount to the customer.DD are issued for the particular place
other than place of issuance. DD applicant or recipient, who might not be an A/C holder present
it to another bank at a different place requesting it to pay on demand a specified amount of
money which is already received to the person named on it.

DOCUMENTATION:

A printed application form is provided for filling in completely and signing by the applicant.
After depositing an amount of draft and commission of the bank, duly completed and signed by

31
two authorized officers, then it is handed over the applicant and credit order is dispatched to
drawee branch.

TELEGRAPHIC TRANSFER (TT):

TT is fund that is transferred electronically which is remitted on

the order of a certain person. Inthis case the authority is given
from one bank to other on the behalf of the customer through
telecommunication to debit their inter office account through
them and credit their parties account mentioned in TT. But it is
not practiced these days frequently.

PAY ORDER:

For this kind of remittance the payer must have the account in the issuing bank. Pay order are
more liquid as compared to cheques because cheques may be dishonored while PO can’t be. It is
written order issued by the bank drawn and payable on itself. It is used for local transfer of
money from one person to another person.

DOCUMENTATION:

The party who requires a pay order will get a printed application from the bank. He will fill it
and deposits the amount and commission.

CALL DEPOSIT RECEIPT (CDR):

It is an instrument like Cheque issued by the bank on account of a customer & in favor of a
person, to pay the specified amount. CDR’s are issued to make payments, especially when a
company goes for some tenders or for purchase of government securities or any contracts with
others.

DOCUMENTATION:

32
The party who requires a CDR will get a printed application from the bank. He will fill it and
deposits the amount and commission. The bank enjoys the benefit of keeping funds deposited
until the payment is not made.

RUPEES TRAVELER CHEQUE (RTC):

RTC is the traveler cheque are acceptable at all branches of MCB,

and they carry dozens of benefits. Security is always being an
important issue of concern. TCs provide maximum security while
carrying big amounts.

DOCUMENTATION:

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.

NOTE:

At time of my stay in remittance department, there was no issue of CDR, TT, RTC, PO so I
were unable to understand its practical aspects, except clearing.

“OTHER DEPARTMENTS”

There have been some departments in which internship was not allowed, these departments were

1. CASH DEPARTMENT

2. ACCOUNTS DEPARTMENT

3. ADVANCES DEPARTMENT

And in TECHNOLOGY DEPARTMENT I got information about ATM and Online Banking and
just filled their forms because computer work was not allowed to internees.

33
“CASH DEPARTMENT”

The cash department is the most important department of the bank. In cash department both
deposits and withdrawals go side by side. This department deals with cash deposits and
payments.

The following books are maintained in the Cash Department:

• Cash Receipt Book

• Cash Payment Book

• Cash Balance Book

The officers in this department are called teller and there

were 2 tellers Mr. Adnan and Ms. Kiran at the counter. This department is involved in two
activities: Cash Deposits, Cash Payments.

CASH RECEIPT BOOK:

The cashier is responsible to receive both the paying-in-slip and cash from the depositor. For
depositing the cash into customer’s accounts, there is need to fill in the paying-in-slip giving the
related details of the transaction. The cashier check the necessary details provided in the paying-
in-slip and accounts the cash and tallies with the amount declared in the slip then cashier fills in
the “Cash voucher received Record Sheet” and assigns a voucher no. to both the transaction
being made in the sheet and the slip. The 2nd cashier posts the transaction entries in computer
ledger. After posting these entries, computer display before posting balance and after posting.
Cashier assigns the stamp “POSTED” on the voucher to show voucher transaction entries are
posted.

CASH PAYMENT BOOK:

The only instrument that can be used to withdraw an amount from an account is the Cheque
book. No payments are made by another instrument. When cheque is valid in all respects, the
cashier enters the necessary inputs in the computer and posts the entry so that account balance is

34
updated. When cashier posts these entries, computer automatically display the balance before
posting the transaction amount, balance after posting.

The cashier at the same time maintains the “Cash Voucher Received Record Sheet”. Then
inspects the signature of the customer, cancellation mark of checking officer and stamp of
“POSTED” is placed on cheque before he hands over the cash to customer.

CASH BALANCE BOOK:

At the end of the working day cashier is responsible to maintain the cash balance book. The cash
book contains the date, opening balance, detail of cash payment and received in figures,

The consolidated figure of receipt and payment of cash is entered in the cash book and the
closing balance of cash is drawn from that i.e.

Opening Balance of Cash + Receipts - Payments = Closing Balance

“ACCOUNTS DEPARTMENT”

The most important aspect in record keeping of a bank is its accounting system. The basic
purpose for maintaining an accounting system is to ensure consistency in record keeping and
accounts. The basic requirement for any accounting system is that it should be in accordance
with the GAAP i.e. Generally Accepted Accounting Principles. There are two choices available
to an organization for an accounting system.

35
Main Functions of Accounts Department:

The major function of this department is keeping the record maintenance of each and every
transaction and prepares reports about the amount of deposits and advances and sent to Head
office or State Bank of Pakistan on monthly, quarterly and yearly basis.

Following activities are carried out in Accounts Department.

• Budgets and budget review form

• Income & expenditures.

• Reports and Reconciliation.

• Activity checking.

• Depreciation & Maintenance of fixed assets provision.

• Maintenance & depreciation of fixed assets.

“TECHNOLOGY DEPARTMENT”

It includes;

• Mobile Banking

• Phone Banking

• Online Banking

• ATM

MOBILE BANKING:

It has been launched recently during my

internship. It helps in getting accounts details and making transactions using mobiles.

36
PHONE BANKING:

"MCB Phone Banking” is available to all customers on a

countrywide basis. Customers can dial 111-000-622(without
any city code/prefix) from their respective cities. Customers
enjoy 24x7 Round the Clock Phone Banking Services. MCB is
the first bank in Pakistan to offer Centralized connectivity.

ONLINE BANKING:

MCB now offers the facility of on-line banking to its

customers through its country wide network of branches.
Customers can use the ATMs or the banking counters of any branch for day-to-day banking
needs, irrespective of branch where they maintain their accounts.

There are now more than 250 branches linked through this system and they can transact with
each other directly using computer systems and the software named “SYMBOLS” at their own
branches.

ATM (Automatic Teller Machine):

ATM stands for Automatic Teller Machine. This machine is used to transact in one's account
without intervention of humans. These machines are basically used for taking cash, confirming
balances and requesting statements / cheque books. MCB has the largest ATM network in the
country at the moment with almost one ATM at each online branch and also ATM terminals at
International Airports covering 27 cities of Pakistan.

ATMs are operated through a card issued to the valued

customers and by application of Personal Identification
Number (PIN number). Now MCB has also entered into a
contract with Cirrus which is a subsidiary of MasterCard.

37
This contract will enable an ATM card holder to use his account even when he is out of country
at all the ATMs where Cirrus logo is displayed.

Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/- in a day.
The annual fee for this card is Rs. 300/- only.

Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day. These
cards are issued to the persons having more than Rs. 500000/- as their average balance.

International Cards are issued in collaboration with Cirrus and are useable all over the world
with maximum withdrawal facility according to the standards of Cirrus.

“ADVANCES DEPARTMENT”

Different banks provide loan facility to general public, companies etc. but MCB provides two
types of loans that are as under:

 Fund Base Loans

 Non Fund Base Loans

FUND BASE LOANS:

In this type of loans cash is directly involved. Bank provides loans in shape of cash. Bank gives
credit or limit facility to customers that needed it. In fund based loans there are two further
classifications:

Long Term Loans:

 Lease facility for car

 For Machinery
 For Fixed Assets

Short Term Loans:

 Running Finance (R/F)

38
  Cash Finance (C/F)

RUNNING FINANCE:

The MCB provides overdraft facility to the customers for the working capital requirement.
These are the loans which are given to those customers whose business runs throughout the year
or continuously. Its duration is one year and it is for running business.

In advances there are two securities one is known primary security and other is secondary or
collateral security.

Hypothecation of stock is the primary security and mortgage is the secondary or collateral
security.

SECURITIES FOR FUND BASE LOANS:

 Hypothecation of Stock
 Mortgage
 Pledge

HYPOTHECATION OF STOCK:

In hypothecation of stock the possession of goods and the title remains in the favour of customer.
Without the permission of the bank the customer can't sell the stock. It is the restriction of the
bank that in god own there should be stock according to the instructions of bank every time. The
drawback of this is that there is no check and balance of stock from the bank. The customer can
easily sell his stock.

MORTGAGE:

The bank can mortgage the immovable property like land, building etc as a security. In mortgage
the possession remains to customer and title of goods remains to bank.

PLEDGE:

39
In this, bank requires the moveable property of the customer as a security like stock, vehicle etc.
possession of goods remains to customer and title in the favor of bank. The bank hires a
muqaddam [Guard] and the key of store where the stock is pledged is in the security of bank.
When customer wants to sell the stock then he pays the amount equivalent to stock which he
wants to sell. After receiving amount bank releases his stock for the same amount

NON FUND BASE LOANS:

In non-fund based loans cash is not directly involved but bank gives guarantee on the
behalf of customer. Bank works as a third party and known as Guarantor. Bank provides a
security to customer when he needs and someone requires from the customer.

DOCUMENTS REQUIRED BY BANK FOR ADVANCES:

• Request of customer

• Credit application from bank

• Basic borrower sheet

• Net worth certificate

• CIB report

• Financials

• Account statement

• Property evaluation report

• For sale value certificate

• Property documents

• Title deed [fard]

• Property map

• CNIC

• Account opening form

• Undertaking

40
Following steps are there:

• Information required by the bank

• Preparation of credit proposals

• Sanction advice

INITIAL INFORMATION:

Following information is required to be submitted to bank.

 Nature & structure of borrower business

 Names of proprietors, partners or directors
 Detail of all firms or companies associated with borrower.
 Financial condition of borrower business
 An assessment of his business abilities
 Accurate and up to date financial statements of last two years for comparison purposes
 Market report on the borrower where borrower has maintained an account with another
bank, a report from his bank should also be obtained.
 A report from credit standing bureau of State Bank of Pakistan

PREPARATION OF CREDIT PROPOSAL:

At first a formal application for credit approval is obtained from the party along with complete
group position. The party’s credibility report is obtained from the bank with which the bank is
doing its business. The party’s credibility report is also taken from the Head office of Trade
Information Division.

For obtaining credit, party has to submit the last two years Balance Sheet and Profit & Loss
statement duly attested by authorized 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

41
evaluated. In case of pledging of property in shape of land or building the complete evaluation of
the property should also be attached.

After all the necessary documents for applying for advance is fulfilled by the party then the case
is sent to Manager for approval. If the credit limit is in his range then he can decide over it
otherwise the case is forwarded to seniors. If there is any discrepancy then the party is informed
of it.

Sanction Advice:

When the documents required are complete and there is no ambiguity then the party is advised
that their credit or loan is approved and will be available to you soon.

The form contains following information:

 Nature and amount of limit.

 Purpose
 Security/ Collateral
 Margin (%).
 Mark up/ Charges
 Validity

“Training, Research, Communication & Public Division”

Staff of this division will research about their new products, train the employees newly hired and
to old employees for the innovation or new introduced circulars in banking sector according to
their competitors also with the State Bank of Pakistan rules and regulations. They teach the
employees how to communicate with their customers and clients.

Comments:
Muslim Commercial Bank is divided into division and these divisions are subdivided in
department thus, the top management can effectively control the operations in MCB Limited.
Each division is liable their respective duties. Span of control between the hierarchical structures

42
is clear. Each sub department report to the main department then the main department report to
the division

“ORGANIZATIONAL HIERARCHY CHART”

MCB Bank Limited
Dholanwal Branch (1342)
LAHORE
BRANCH MANAGER
Mr. Abdul Malik

Account Opening and Operations Manager

Chief Teller: Fakhar Abbas
Receptionist Mr.Malik Muhammad Ashiq
Teller:
Mr. Muhammad Akram
(1) Miss Kiran Batool
(2) Mr. Adnan Khalid
Remittance Incharge
Marketing & DSE: Mr.Sufi Imran
Mr. Ali
Internees:
(1)Zeeshan Ali
Chowkidars: Clearing and Cheque (2)Naveen Naz
(1)Muhammad Ramzan Transferring & deposit (3)Irum Shehzadi
(2)Muhammad Ishaq Mr. Asim Arif Butt (4) Chandni Sleem
(3)Fazal Hussain (5) Sidra
(6)huma
Tea Boy (Outsource)

Ali Waqas

Office Boys:

Javed Masih

Muhammad Haroon

43
 “Plan of internship program”

Introduction of Branch:

I complete my internship in Dholanwal Branch of M.C.B. Because of this branch People do

transaction and get different services people are also able to pay their utility bills. This is a
branch of M.C.B which has only one C.S.O, an operation manager and a branch manager.
Dholanwal branch accepts deposits from customers and pay cash from reserves when customers
need their money.

It also provides lockers on demand of customers to store their precious and costly things and
confidential documents.

Dholanwal branch also provide small loans for the construction of houses and provide capital on
easy installments to loan seekers. Branch also provides the facility of online cash deposit and
withdrawal.

MCB Dholanwal branch also provide the facility of pay orders to customers who wish to pay
cash to branches of other banks.

Starting and ending Dates:

I started my internship on 07th Aug 2014 and will be Complete on 14th sept

Name of Departments:
I got training almost all departments of M.C.B Dholanwal branch first of all I got training in
C.S.O (customer service office) department. There I learn how to communicate with the
customers on telephone and as well as face to face. By the use of that I easily search about the
basic information of the customers of the branch and also told the customers about their account
balance who ask about that. Then I work as account opening agent with Mr. Muhammad Akram
there I fill the account opening forms, deposit slips, Cheque, Cheque book and ATM
applications, pay orders, C.D.R (caller deposit reciept), online cash service forms and provide

44
Instructions and tell requirements of account to new customers who wants to open new accounts
in the bank.

Second I got training from the supervisor of bank in his department their trained in filling the
debit and credit vouchers and learn how bank post daily transaction on debit vouchers then on
credit vouchers. Mr. Muhammad Asim Butt and Mr. Sufi Imran

Also learn the clearing of all Cheque and their intercity in supervisor department. Then also
learn how and why we fill cash vouchers for customers. Mr. Malik Muhammad Ashiq

Operation manager of bank tell me some of his tasks to help him when he is too busy in dealing
with too many customers like issuing Cheque books and how they verify the signatures of such
customers while issuing Cheque books.

“Training Program”

Reason for selecting the Organization:

The main Reason is that I was issued an IRL on Behalf of the NBP Moon Market A.I Town
Lahore. And after that Head Office of NBP neglected my Documents and returned to me after 3
weeks so that’s why I was not found Internship anywhere. So I again requested to you that IRL
Resend to me on behalf of MCB Dholanwal Branch Bund road Lahore. So then I prefer the MCB
because MCB has more value than other banks. MCB had Awarded many Title and achieved
several Awards and remain Top Ranking as usual.

Duties performed:
In account opening department:

When I was started internship Mr. Muhammad Akram who is A (PBA) suggested me that you
should start your internship in Receptionist Department. And after than in Account opening The
Account Opening is centralized in MCB. But some necessary information is obtained from the

45
client by the officer. During my internship, I worked in this department. I obtained the following
information from the client

1. Customer’s CNIC Photo copy

2. Signature on Account Opening Form
3. Current Salary Slip of the customer if he is employee.
4. Business proof of the customer if he is a businessman.
After collecting all those things I fill that account opening form very carefully. Then I confirm
that the customer is not a fake person or not listed in NAB office list. After that I check his NIC
card either that is not fake. After completing all that process I send all these to Mr. Muhammad
Akram who check it and then send to the head office, where accounts are opened.

In Clearing Department:
After learning in Receptionist and account opening department, Mr. Muhammad Akram send to
me to Mr. Muhammad Asim Arif Butt for learning the clearing of Cheques . Mr. Muhammad
Asim Arif Butt discuses and thoroughly introduce with the clearing objects.

In Cash/Finance Department:
There were three officers in this department; Chief Teller: Fakhar Abbas

Teller Miss Kiran Batool and Teller Mr. Adnan Khalid.

They have divided their work between them.

Mr. Fakhar Abbas handles to enter computer entry and Miss Kiran Batool and Mr. Adnan
Khalid handles daily activity checking.

I am used to help Miss Fakhar Abbas daily activity checking, sorting and counting of vouchers
and how to calculate the deprecations of all fixed assets and how to prepare the daily advances
and deposits statement, Daily MIS information, Foreign Currency / Exchange position (Currency
UK Pounds, Currency Euro, Currency US Dollars).

I learn from Mr. Adnan Khalid items of the Balance Sheet of Bank and saw the format of
different reports. He helped me to understand his work. He told me aboutthe reportsthat he has to
prepare & the purpose of those reports.

46
In Receptionist Cell:
Mr. Muhammad Akram handles the activities of the Receptionist Cell. The responsibilities are to
supervise all information system related activities. He teaches me about the computer software’s
which are used in MCB, the special printer which is used to print the bank statements and the
two servers.

In Remittance Department:
Mr. Muhammad Akram sends me to Mr. Sufi Imran for learning the cheques remittances. Mr.
Sufi Imran discuses and thoroughly introduce with the remittance objects.

In Manager Operations Section:

Mr.Malik Muhammad Ashiq Operation manager of bank tell me some of his tasks to help him
when he is too busy in dealing with too many customers like issuing Cheque books and how they
verify the signatures of such customers while issuing Cheque books.

“Learning Experience”

I gained the knowledge about the banking facilities. I gained the knowledge about the accounts
opening, debit card, credit card, online transfer etc. during internship I am able to know the exact
banking sector.

47
Knowledge gained:
I gained the knowledge about the banking facilities. I gained the knowledge about the accounts
opening, debit card, credit card, online transfer etc. during internship I am able to know the
exacts banking sector.

Skills learned:
During my internship I learnt

 How to deal with customers

 How to work under pressure i.e. in rush hours.
 How to manage an office.
 How to convince customer
 My communication skills were improved.
 I observed some signs of mismanagement which I think can be removed if branch
manager take more responsibility.

Attitudes Observed and values gained:

During internship I gained the knowledge about the account opening. And all type of clearing
and remittance. I will also gain the knowledge about all types of accounts. After that I will be
able to do work in Bank or to do Job in Bank.

Most challenging task performed:

Most challenging task which is performed by me is in account opening seat is to arrange CSS
Card are arranged by me accordingly to date wise and computerized sheet . It is very difficult to
me but I perform this task very CRO Mr. Muhammad Akram was much appreciated to me and
Branch manager also when CRO Reported to Branch Manager about My task. During internship
I preformed many task and further I will perform much and more task Insha Allah.

48
49
 “Financial Ratio Analysis of
BALANCE SHEET”
2011 2010

(Rupees in thousands)

ASSETS

Cash 23665549 23833253

Balance with other banks 1469333 5708323

Lending to financial institutions 9998828 10965297

Investments_ net 69481487 67194971

Advances – net 180322753 137317773

Operating fixed assets 8182454 7999821

Other assets_net 5464426 6154370

Deferred tax assets_net 19196 -------------

298776797 259173808

LIABILITIES

Deposits and other accounts 229345176 221069158

Borrowings from financial inst. 27377502 7590884

Bills payable 8536674 7566684

Other liabilities 8611600 6525999

Deferred tax liabilities ------------- 269498

50
Sub ordinated loans 1598080 1598720

Liabilities against assets ------------- -------------

275469034 244620924

NET ASSETS 23307763 14552884

REPRESENTED BY

Share capital 4265327 3371800

Reserve 13408005 5661553

Unappropriated profit 210662 165208

17883994 9198561

Surplus on revaluation of assets 5423768 5354323

23307763 14552884

51
 “PROFIT & LOSS ACCOUNT”
2011 2010

(Rupees in ‘000)

Mark-up/return/interest earned 17756232 9083863

Mark-up/return/interest expensed 2781468 2057640

Net mark-up/interest income 14974764 7026223

Provision against non-performing loans and advances 1242153 442595

Provision for diminution in the value of investments (98982) (172876)

Bad debts written off directly 1184 8771

Provision for potential lease losses ---------- 1200

1144355 279690

Net mark-up/interest income after provisions 13830409 6746533

NON MARK-UP/INTEREST INCOME

Fee commission and brokerage income 2448950 1992356

Dividend income 480344 378908

Income from dealing in foreign currencies 531455 492738

Other income 1084576 576007

Gain on Investments 866895 804478

Gain / Loss on trading in government securities 851 (11440)

Total non-mark-up/interest income 5413071 4232988

52
 19243480 10979521

NON MARK-UP/INTEREST EXPENSES

Administrative expenses 6459490 7244200

(Reversal) / Other provisions (72740) 149893

Other charges 178841 41864

Total non-mark-up/interest expenses 6565591 7435657

Compensation on delayed tax refund 340598 513850

PROFIT BEFORE TAXATION 13018487 4057716

Taxation – current year 4611359 1555764

Prior years (149763)

Deferred (365524) 70240

PROFIT AFTER TAXATION 8922415 2431532

Unappropriated profit brought forward 165208 195966

Transferred from surplus on revaluation of fixed Assets 83749 25839

248957 221605

Profit available for appropriation 9171372 2653337

APPROPRIATIONS

Transfer to

Statutory reserve 892241 507999

General reserve 5500000 800000

Capital reserve ----------- -----------

Proposed cash dividend 426533 -----------

Reserve for issue of bonus shares 853065 337180

Interim cash dividend Rs 1.75 per share 649072 337180

Interim cash dividend Rs 1.50 per share 639799 505770

53
 8960710 2488129

Unappropriated profit carried forward 210662 185208

Basic and diluted earning per share after tax 21.36 7.21

“CASH FLOW STATEMENT”

2011 2010

(Rupee in 000)

CASH FLOW FROM OPERATING ACTIVITIES

Profit/(Loss) before taxation 13018487 4057716

Less: Dividend income (480344) (378908)

12538143 3678808

Adjustments for non-cash charges

Depreciation 575538 598928

Amortization – intangible assets 60113 ----------

Provision against non-performing advances 1242153 442595

Provision for diminution in the value of investment (98982) (172876)

Provision for diminution in the value of other assets (72740) 149593

Bad debts written off directly 1184 8771

Gain on sale of non banking assets (24664) -------

Loss on sale of fixed assets 22114 (39324)

Provision for potential lease losses ----------- 1200

Surplus on revaluation of held for trading securities (1634) ----------

1703082 988887

14241225 4667695

(Increase)/Decrease in operating assets

Lendings to financial institutions 966469 (534847)

Advances (44248317) (40570180)

54
Others assets 982933 26142

(455458801) (41422187)

(Increase)/Decrease in operating assets

Bills Payable 969990 (829636)

Borrowings from financial institutions 19786638 (25037087)

Deposits 8276020 9557765

Other liabilities 982933 26142

30015581 (16282816)

(1289074) (53037308)

Income tax paid (1152343) (683995)

Income tax refund -------------- 370208

Net cash flow operating activities (2441417) (53351095)

CASH FLOW FROM INVESTING ACTIVITIES

Net investments in available-for-sale securities (20301953) 105292873

Net investments in held-to-maturity securities 16278483 (45878054)

Net investments in held-for trading securities (66056) ---------------

Dividend received 588153 181258

Investments in operating fixed assets (1029307) (1265675)

Investment in subsidiary and associated companies (77) --------------

Sale proceeds from non banking assets disposed of 589876 --------------

Sale proceeds of fixed assets disposed of 127254 81308

Net cash flow from investing activities (1813827) 58411710

CASH FLOW FROM FINANCING ACTIVITIES

Redemption of subordinated loans (640) (640)

Proceeds from issue of right shares 1390868 --------

Dividend paid (1545483) (818306)

Net cash flow from financing activities (155255) (818946)

55
Ex. difference in cash transactions in foreign branches 3805 (56354)

Increase/(Decrease) in cash and cash equivalents (4406694) 4185315

Cash and cash equivalent at beginning of the year 29547922 25500460

Effects of exchange rate changes (6346) (144199)

29541576 25356261

Cash and cash equivalents at end of the year 25184882 29541576

“FINANCIAL ANALYSIS”

56
"Financial statement analysis is the process of identifying of financial strengths and weaknesses
of the firm by properly establishing relationship between the items of the balance sheet and the
profit &loss account," and it is done through ratio analysis.

RATIO ANALYSIS:

Ratio means “one number expressed in term of another a ratio is statistical yardstick by mean of
which relationship between two or various figures can be compared or measured. Here we are
going to explain the ratio analysis of MCB.

Categories of Financial Ratios

Financial ratios can be divided into the following six parts.

A. Liquidity ratios
B. Activity ratios
C. Leverage ratios
D. Profitability ratios
E. Investor ratios
F. Bank special ratios

A. Liquidity ratios

 Current ratios
 Quick ratios
 Absolute Liquid ratio

B. Activity ratios

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  Inventory turnover ratio
 Average collection period
 Average payment period
 Total assets turnover ratio

C. Leverage ratios

 Proprietary ratio
 Debt ratio
 Debt to Equity ratio
 Debt to Tangible net worth ratio
 Debt to Funds ratio
 External-Internal Equity ratio

D. Profitability ratio

 Return on total assets

 Return on-equity
 Return on investment
 Return on fixed assets
 Average profit per branch
 Net profit Margin
 Interest income to total income
 Interest expense to total expense
 Return on advances

E. Investor Ratios

 Earning per share

 P/E ratio
 Dividend per share

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  Dividend yield ratio
 Dividend payout ratio
 Break up value/Book value per share
 M/B ratio

F. Bank special Ratios

 Earning assets to total assets

 Return on earning assets
 Net margin to earning assets
 Loan loss coverage ratio
 Equity to total assets
 Deposit time equity
 Loan to deposit ratio

Because here we are discussing ratio analysis of bank, therefore we will not discuss A & B
category of ratios.

“LEVERAGE/SOLVENCY ANALYSIS”

Solvency analysis of a firm indicates the amount of the other people’s money being used to
generate profit. In general, these analyses are more concerned with long term debts, because
these commit the firm to a stream of payments over the long run. Solvency analysis includes:

 Proprietary ratio
 Debt ratio
 Debt to Equity ratio
 Debt to Tangible net worth ratio
 Debt to Funds ratio
 External-Internal Equity ratio

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 1. PROPRIETARY RATIO
Total equity
= Total Assets

Year 2011 (000) 2010 (000)

Total Equity 23307763 14552884

Total Assets 298776797 259173808

Ratio 0.08 0.06

2. DEBT RATIO/ SOLVENCY RATIO

Total equity

Total Assets
=

Year 2011 (000) 2010 (000)

Total Debts 275469034 244620924

Total Assets 298776797 259173808

Ratio 0.92 0.94

3. DEBT TO EQUITY RATIO

Total Debt
= Equity

Year 2011 (000) 2010 (000)

Total Debts 275469034 244620924

Equity 23307763 14552884

Ratio 11.82 16.81

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 4. DEBT TO TANGIBLE NET WORTH
Total Debt
= Equity

Year 2011 (000) 2010 (000)

Total Debts 275469034 244620924

Tangible net worth 23058725 14552884

Ratio 11.94 16.81

5. DEBT TO FUNDS RATIO

Long term
Debt
= Long Term
Funds

Year 2011 (000) 2010 (000)

Long Term Debts 41318331 22455384

Long Term Funds 64626094 37008268

Ratio 0.63 0.60

6. EXTERNAL INTERNAL EQUITY RATIO

External
Equity
= Internal
Equity
Year 2011 (000) 2010 (000)

External Equity 275469034 244620924

Internal Equity 23307763 14552884

Ratio 11.82 16.81

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INTERPRETATION:
The overall leverage position is showing better trend as compare to previous year. The
contribution of equity in total assets is increasing, while the debt contribution is decreasing
which is better for business. Equity ratio is increased which shows the better condition of the
bank. Solvency Ratio is in good condition. So we can say that overall Solvency condition of the
MCB is better with the comparison to the previous year.

“PROFITABILITY ANALYSIS”
Profitability analysis of a firm indicates the overall efficiently of the management. Without profit
a company cannot attract the outside capital. Profitability analysis includes:

 Return on total assets

 Return on-equity
 Return on investment
 Return on fixed assets
 Average profit per branch
 Net profit Margin
 Interest income to total income
 Interest expense to total expense
 Return on advances

1. RETURN ON ASSETS

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 Net Profit after
Tax
Total Assets
= × 100

Year 2011 (000) 2010 (000)

Net Profit after Tax 8922415 2431532

Total Assets 298776797 259173808

Return 3.0% 0.93%

2. RETURN ON EQUITY
Net Profit after
Tax
= × 100 Equity

Year 2011 (000) 2010 (000)

Net Profit after Tax 8922415 2431532

Equity 23307763 14552884

return 38.28% 16.71%

3. RETURN ON INVESTMENT
Net Profit after
Tax
= Investment × 100
Year 2011 (000) 2010 (000)

Net Profit after Tax 8922415 2431532

Investment 69481487 67194971

return 12.84% 3.62%

4. RETURN ON FIXED ASSETS

Net Profit after
63 Tax
Fixed Assets
 = × 100
Year 2011 (000) 2010 (000)

Net Profit after Tax 8922415 2431532

Fixed Assets 8182454 7999821

return 109% 30.39%

5. AVERAGE PROFIT PER BRANCH

Net Profit
after Tax
= No. of
branches
Year 2011 2010

Net Profit after Tax 8922415000 2431532000

No. of branches 1045 1045

Average Profit 8546375 2329054

6. NET PROFIT MARGIN

Net Profit after
Tax
= Interest × 100
Income
Year 2011 (000) 2010 (000)

Net Profit after Tax 8922415 2431532

Interest Income 17756232 9083863

return 50.25% 26.77%

7. INTEREST INCOME TO TOTAL INCOME

Interest Income

= Total Income × 100

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 Year 2011 (000) 2010 (000)

Total Income 23169303 13316851

Interest Income 17756232 9083863

return 76.64% 68.21%

8. INTEREST EXPENSE TO TOTAL EXPENSE

Interest
Expense
= Total Expense × 100
Year 2011 (000) 2010 (000)

Total Expense 9347059 9493097

Interest Expense 2781468 2057640

return 29.76% 21.67%

9. RETURN ON ADVANCES
Interest
Income
= Total Loans × 100
Year 2011 (000) 2010 (000)

Interest Income 17756232 9083863

Total Advances/ Loans 180322753 137317773

Return 9.85% 6.61%

INTERPRETATION

Profitability analysis shows the entire performance of a business and if we study the profitability
trend of bank then it will clear to us that it showing a positive trend. Net profit after tax is

65
increased as compare to previous year, due to it return on assets, equity and investment is
increasing. Not only overall profit is increasing but also average profit of all the branches is
increasing. Bank interest income is also increasing due to more advances in this year. This year
bank total deposits are also increased and that’s why interest expenses are showing upward trend.

“INVESTOR ANALYSIS”

Investor analysis or market analysis are related to firm market valve, as measure by its current
share price to certain accounting values. Investor analysis includes:

 Earning per share

 P/E ratio
 Dividend per share
 Dividend yield ratio
 Dividend payout ratio
 Break up value/Book value per share
 M/B rat

1. EARNING PER SHARE

Net Profit
after Tax
No. of Shares
=
Year 2011 2010

Net Profit after Tax 8922415000 2431532000

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 No. of Shares 426532700 337180000

Earning 21 7.21

2. P/E RATIO
MP Per Share

= EPS

Market price per share is Rs.247.75 on 4th Jan.2011

Year 2011 2010

MP Per Share 247.75 247.75

EPS 21 7.21

Ratio 11.80 34.36

3. DIVIDEND PER SHARE

Total
Dividend
= No, of Shares

Year 2011 2010

Total Dividend 1288871000 842950000

No. of Shares 426532700 337180000

DPS 3.02 2.5

4. DIVIDEND YIELD RATIO

DPS
= MV Per Share

Year 2011 2010

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 DPS 3.02 2.5

MV Per Share 247.75 247.75

Ratio 0.012 0.01

5. DIVIDEND PAYOUT RATIO

DPS
= EPS × 100
Year 2011 2010

DPS 3.02 2.5

EPS 21 7.21

Ratio 14.38% 34.67%

6. BOOK VALUE PER SHARE

Equity
= No. of Shares

Year 2011 2010

Equity 23307763000 14552884000

No. of Shares 426532700 337180000

Ratio 54.64 43.16

7. M/B RATIO

MV Per Share
BV Per Share

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=
Year 2011 2010

BV Per Share 54.64 43.16

MV Per Share 247.75 247.75

Ratio 4.53 5.74

INTERPRETATION

MCB has also has good investment opportunities for the investors. This bank has more attraction
for investors as compare to previous year. Earnings per share is increased due to increase in
profit. Book value and market valve of one share in also increased as compare to 2004. Only
dividend yield and payout ratio is decreased because bank declared fewer dividends as compare
to last year but it is also in favor of investors because it will increase wealth of shareholders and
ultimate benefit to investors.

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 “SWOT Analysis”
A scan of the internal and external environment is an important part of the strategic
planning process. The SWOT Analysis provides information that is helpful in matching the
firm’s resources and capabilities to the competitive environment in which it operates.

Strength:
The main strength of the bank lies in its services. The other fact that contributes is approaching
to each segment of society.

 Bank reputation:

MCB has made a status of a compact economic institutions over 60 years it focus on growth
done enlightening services quality investment in technology and people developing its extensive
branch network and evolving a large and stable deposits based.

 Customer Satisfaction:

MCB bank by the customer satisfaction. It enables the customer thorough providing those
appropriate services and guiding them in their investment choices. Customer always reliable and
believe MCB.MCB bank believes in building and keeping close relationship built on care and
devotion itself.
 Promotion Effectiveness:

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MCB has developed a very encouraging promotional principle which creates great loyalty and
motivations in employees towards the bank.

 Continuous improvement:

MCB bank held diverse training programs which enable the members or staff upgrade their
knowledge. MCB has taken initiative to introduced new schemes regarding its product and
services .in this way it continuously made improvement in its employees and services.

 Large network of branches:

MCB is function by the great network of 100 plus online branches nationwide MCB determined
constantly to develop and enhanced its branch network day by day to confirm satisfy and
approachability  to its customer.

 Team based approach:

MCB is team of loyal determined and faithful experts who keep quality of services done
outstanding performance and presentation. In MCB bank there established a team determination
and accord among employees projects are accomplished through members connectively working
as team.

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Weakness:

In according to high ranking in others commercial Banks MCB has

also some weak point as well as good point. Some weakness are
given below:

 Less Productivity from Staff:

The bank management is unable to utilize optimum productivity

from the staff. The matter of fact is that staff is skilled and
experienced but that are not utilized properly to gain optimal
productivity

 Overburdened staff:

Staff is overburdened with unproductively tasks from the management .employee should be used
when and where required to get maximum output from them. Right man for right job should be
used.

 Lack of Organization Devotion:

Organization loyalty has deficiency between employees. Employees don’t pay attention to their
tasks as they think their job as permanent.

 Attitude of seniors towards to juniors:

Attitude of seniors has to change toward to junior’s .some time seniors attitude are not
professional. Some seniors get the advantage of their seniority and they treat the juniors harshly
if they do not perform according to their will.

 Lack of Leadership Qualities:

For the proper performance towards the achievement of organization goals a strong working
environment is necessary and to create this environment senior should play the role of leader.
They should understand the problems of their subordinates and try to solve their problems and
build a strong relationship.

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Opportunities:

 Management skills:

Different management skills courses should be introduced to employees in order to make them
familiar management abilities.

 Foreign training:

Staff should be sent for some foreign courses in order to known them for global progress in their
respective fields.

 Diversification:
They may enter in new business or any other consumer-durable product in order to
promote their name, by introducing Loan for the students, small businesses, and handicraft
industry.

 Some More opportunities:

Information Technology.

Credit cards can give more earning.

Establishing more foreign Branches.

They should introduce Student Finance Facility.

They should also introduce mobile ATM

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Threats:

 Competitions are increasing day by day:

Due to the increase in the number of conventional

commercial banks, there is an increase in
competition. Also there is a lot of aggressive
marketing by the competitor banks .this is also a
threat for MCB bank.

 Increasing Interest Rates:

Due to increases in interest rate against loans customer and investors cannot get loan from
bank .customer will feel unhappy and they are enable to take much loans which will decreases
the business of bank.

 Instability of Government policies:

Government policies changing day by day and government stability is not there.

 Poor Economic Condition of Pakistan:

Weak economic condition of Pakistan is producing hindrance in the way to progress because
people are not in good financial position to do business themselves or to finance it from the
banks.

74
 “WHAT I HAVE LEARNT IN MCB”

In Muslim Commercial Bank Ltd. I really enjoyed working with the staff of MCB
Dholanwal Branch, Lahore having a wish to be employee of MCB. It was almost impossible to
work in all the departments within that limited time. But the staff of the branch provided me the
opportunity to work in the different departments for the sake of practical knowledge. I feel
highly indebted to work in the Dholanwal Branch with the PBD (Personal Banking Advisor) of
that branch Mr. Muhammad Akram, because I learnt a lot in that branch.

During my internship training in the MCB as I early mentioned that I have worked in
different departments & seats and learnt the following things:

How to deal with different types of customers.

Account opening.

Cheque book issuance.

Outward clearing.

Cheque for Collection.

Different forms and vouchers filling.

Experience of working in a well reputed organization.

Calling the ATM customers

Issuance of the different ATM card’s

75
 “Recommendations”

MCB Bank Limited is a well-known financial institution in the banking sector, it is said, nothing
is perfect in the world, and there is always space for deficiencies. Deficiencies are point out for
the correction. Following are recommendations for the management of MCB bank limited to
overcome the deficiencies. As nothing is perfect in this world and there is always a room for
improvement, recommendations in my point of view is:

 Proper Procedure or Training System for Internees:

They must provide or arrange the system of training for internees because internees are not
satisfied from MCB Bank training.

 Enhance the network:

Although the bank has a network of nationwide branches but it should spread its branch network
in the remote areas specially. Bank should spread its network across the boundary.

 New product introduction:

Bank should introduce the new products and to market its products, it should accentuate to give
advertisements on both print and electronic media.

 Satisfy the Employees:

To reduce the high turnover of employee, salary package should be increased and extra benefits
should be given to the employees as the bank timing has been increased. It is very coxcomb that
MCB bank has increased its employees’ salaries more than demands of the market.

 Markup Rate:
Today is the era of competition. Due to the new mergers and arrival of world class banks in
Pakistan competitive environment is increasing. To compete the competitors, MCB bank should
reduce its service charges and increase the rate of return to depositors and reduce the markup rate
on advances.

76
  Decision Making:
MCB bank should give the authority to lower level management or employees like as branch
manager to make the decision at sight. It will reduce the cost and time and customer satisfaction
level will increase.

 Favoritism
There should not be rule of favoritism or biasness, which I felt exist not only in management but
also in the staff as well, because this will affect negatively in achieving overall objectives of the
bank.

77
 “Conclusion”

With cooperation of all branch members, I have been able to learn and experience many new
things related to the banking sector and the banks workings.

I am able to handle the public with respect to many different workings on many different
instances and also in account opening for customers and can handle many other tasks as well.

Finally I concluded that MCB is a good or organization for a person for his long term career
workings. Overall working and environment of the bank is very comfortable and the staff is very
helpful and respectful of each other and it still maintains a professional environment.
Management of the bank is very strong.

Employees of MCB Dholanwal Branch work more than their working hours and all the workings
take place in a very friendly atmosphere that does not induce pressure on the person working
there. It also shows their loyalty and commitment to the organization.

This branch of MCB relatively small and has climbed its way up very quickly and that only
because of the employee’s efforts and consideration for each other.

78
79