PROJECT: COMMERCIAL BANKING

GROUP-3

BANK: MCB
SUBMITTED TO: MA’AM FARAH

SUBMITTED BY: 1.MOMINA TOUQIR

2.MALIHA WAJID

3. SHEROZ ALI

4. USAMA SHAHID
DATE OF SUBMISSION:

22-12-2020

DETAIL OF WORK DONE

MOMINA TOUQIR

 INTRODUCTION OF THE BANK IN DETAIL

 INTRODUCTION OF THE BANKS MANAGEMENT
 MAJOR DIVISION/CENTERS OF BANK

(COMPILING AND EDITING ALL WORK)

MALIHA WAJID:

 LIST AND DETAIL OF ALL THE PRODUCTS AND SERVICES

 CUSTOMER BASE OF THE BANK, TYPE OF CUSTOMERS
 FUNCTIONS OF BANK

SHEROZ ALI

 BANKING OPERATION OF THE BANK HAS TO BE COVERED

 BANKER CUSTOMER RELATIONSHIP
 BANKER’S AND CUSTOMER’S LIMITATION

USAMA SHAHID

 ISLAMIC BANKING OPERATION

 FINANCIAL STATEMENT OF COMMERCIAL BANK
 ROLE OF THE BANK IN ECONOMICS DEVELOPMENT OF THE
COUNTRY
INTRODUCTION OF BANK

MCB Bank Limited is a Pakistani multinational commercial bank which is based in Lahore,
Pakistan. The majority of shares are owned by Pakistani conglomerate Nishat Group and
Malaysian bank Maybank.

It was incorporated by the Adamjee Group on July 9, 1947. 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 the business sectors of the country such as banking, textile,
cement, and insurance. Mian Muhammad Mansha is chairman of both the group and MCB. The
bank has established an Islamic Banking unit to offer Shariah-compliant products and services,
with dedicated Islamic banking branches in six cities

In 2005, the management of the bank abbreviated its name from Muslim Commercial Bank
Limited to MCB Bank Limited to explore international markets; they were facing resistance due
to the word Muslim especially from Western Countries to avail license. In 2008 the head office
of MCB was shifted from MCB Tower, Karachi to Lahore in a newly constructed building, namely
MCB House located at Sharea Ghous-ul-Azam, commonly known as Jail Road.

MCB, advised by Merrill Lynch, became the fourth Pakistani company (the other three being
Hubco, PTCL and Chakwal cement; they all have been delisted) to list on the London Stock
Exchange when it raised US$150 million global depositary receipts.

HISTOIn 2005, the name of the bank was changed from "Muslim Commercial Bank Limited" to
"MCB Bank Limited". This need was felt because the bank was already known and popular as
"MCB" among its clients and the public, and most people would refer it to as MCB instead of its
full name.[3]

In 2008, the Maybank (Malaysia) announced acquisition of 20% of stake in MCB Bank
Limited’s equity by purchasing a little more than 94 million ordinary shares from the Nishat
Group. This transaction amounted to MYR 2.17 billion (US$686 million) in value. Price paid by
the Maybank was Pak. Rupees 470 per ordinary share of MCB. As per Maybank, “The
acquisition is in-line with Maybank’s strategy, as Malaysia’s financial services leader in the
region, to build its presence in key growth markets across the region.”[4]

In 2000, the bank established its Islamic Banking Business Group and opened its first branch in
2003,[5] by 2014 the Islamic Banking network had grown to 34 branches.[6] This was in addition to
and separate from bank's 1,100 conventional banking branches.[6] In 2015, given the potential of
Islamic Banking business, the bank proceeded to establish an independent but wholly owned
subsidiary bank[7][8] named "MCB Islamic Bank Limited", referred to as "MIB "in short. MCB Bank
Ltd appointed Raza Mansha as its first Chairman of the Board of Directors and Ali Muhammad
Mahoon as the first President of the MIB.

INTRODUCTION OF MANAGEMENT:

CHIEF MANAGER

OPERATIONAL CREDIT
MANGER DEPATMENT

OPERATION
SUPERVISOR OFFICER

CASH DEPT.
CLEARING
(CHIEF CASH)

TELLER TELLER
 DEPOSITS/WITHDRAWLSSS

MAJOR DIVISION AND CENTERS OF BANK:

There are major division and centers of MCB bank in Pakistan.

 Lahore
 Karachi
 Peshawar
 Sargodha
 Islamabad
 Rawalpindi
 Gujranwala
 Faislabad
 Multan
 Hyderabad

PRODUCT / SERVICES:

MCB is one of the oldest banks in Pakistan, starting out life sss 1947. The bank aims to offer
high-quality banking through the implementation of the right technology while working with
the right ethics and offering unprecedented levels of management. It offers a huge selection of
products, all of which are designed to meet the needs of the people of Pakistan.
MCB Credit Cards
MCB Credit Cards offers a variety of reward points to its cardholders. MCB Classic & MCB Gold
Credit Card – This is a credit card that is safe, secure and offers rewards for spends in certain
locations. It can help users to pay for a wide range of things including education fees while also
offering travel insurance and the ability to spread larger payments over longer periods.

MCB Platinum Credit Card – A credit card that offers users reliability and a wide range of
shopping, travel and dining opportunities. A reward system makes it possible for users to be
rewarded for using the card while it can be used in almost 30 million locations around the
world.

MCB Car Loan

Car4U is MCB’s auto finance loan option. It provides borrowers with the chance to own their
own vehicle, regardless of whether that is a new car, used car or an imported vehicle. It offers
exceptional rates that are designed to make it affordable for many to own their own vehicle.
There is financing available for up to 7 years, ensuring that borrowers can find a term and
amount that works for them.

MCB Personal Loans

These are perfect for borrowers who have the need to make a significant purchase but need an
affordable way to cover the cost. It comes with a minimum and maximum loan amount
available and the tenure ranges from one to five years. Borrowers are also not required to
provide any collateral or there is no processing fee if the loan is not approved.

MCB Home Loans

Their home loan product is designed to offer borrowers the chance to purchase their dream
home. This could be a new home, the building of a new home, renovation on an existing
property or the purchase of a plot followed by construction of the property. It is available in
many cities across Pakistan and depending on the borrower's needs, the amount that they can
borrow will differ as that will relate to whether they are purchasing a new home, plan to build a
home or choose one of the other options. The loan can be spread over as much as 20 years,
providing borrowers with the chance to manage their payments accordingly.

MCB Bank Deposit Accounts

MCB has four main deposit accounts available:

Current Deposit – There is a wide range of current accounts available from MCB, all of which
are designed to help users manage their money while offering convenience. They allow users to
access their money when they need it and the different available accounts are:

- Current Account
- Business Account
- Basic Banking Account
- Current Life Account
- MCB Asaan Account
- Fun Club - Banking For Kids
- Foreign Currency Current Account
- MCB Smart Business Account
- MCB Ladies Account
- MCB Pensioners Current Account
- MCB Senior Citizen Current Account
- MCB Asaan Remittance Account
- MCB Burqraftaar Remittance Accounts

Saving Deposit – There are a number of accounts available for users to make the most of the
money and the excellent rates available to them. The accounts offer different profit payment
options and tiered profits based on the amount saved. Users can deposit their money for
varying lengths of time in order to earn a profit on their savings. The accounts available are:

- Saving Account
- Smart Saving Account
- 365 Saving Gold Account
- Saving Xtra Account
- Salary Club Gold Account
- Fun Club - Banking For Kids
- Foreign Currency Savings Account
- MCB Pensioners Savings Account
- MCB Senior Citizen Savings Account

Term Deposit – These are available to those who want to make investments over a period of
time that suits them. With short to mid-term investment periods available, users can lock their
money away in order for them to earn interest that works for them. The term deposit accounts
they offer are:

- Flexi Deposit Account

- Mahana Profit Account
- Special Foreign Currency Term Deposit
- MCB Higher Mahana Profit Account

SERVICES:

Global Acceptance

The Mobile Wallet comes with a Visa powered card which is accepted at millions of merchant
locations worldwide and close to 2 million ATMs across 200 plus countries and territories. Add
to this the ability to access your funds, make payments, and pay bills from anywhere in the
world.

Telecom/Device Compatible

The innovation works with all five telecom service providers in Pakistan and runs on all internet
enabled handsets or smart phones. This feature, with zero switching cost, is specially designed
to make the spread of the innovation easy and to help you bring your “inner circle” onto the
Mobile Payments Grid with minimal effort

Bank Independent

Good news! You don’t need to be an Account Holder to use this innovation. Lite Mobile Wallet
resides on top of your existing bank account. This means that you don’t need to switch from
your existing Bank, whichever that may be, to in order to get this innovation. Instead you can
simply use your Mobile Wallet in conjunction with your existing bank account and load it via
IBFT or branches.

Exclusive Discounts

Be it shopping at popular retail outlets, relaxing at a spa, having fun with friends and family or
dining out at the finest restaurants, benefit from gratifying discounts at our numerous partner
merchant outlets. Just present your Lite Card to enjoy the discounts and privileges!
Visit www.mcb.com.pk/loyalty for an updated list of discounts

Pay Anyone

In times of need, you can send money to anyone in Pakistan:

Any Lite User
Any Account Holder
Any other Bank Account Holder through IBFT Guide

* The receiver must apply for Lite in order to access the money through his/her Mobile Wallet

Top-ups

Always stay connected. Pay mobile phone bills or buy top-ups of all five Telecommunication
companies in Pakistan.
Mobilink
Warid
Telenor
Ufone
Zong

Utility Bills

 LESCO
 PESCO
 QESCO

 FESCO
 MEPCO
 GEPCO
 LWASA
 RWASA
 GWASA
 CDGK
 SEPCO
  FWASA
 KWSB
 Wi- Tribe
 BWASA
 MWASA
 SSGCL
 SNGPL
 KESC
 HESCO
 IESCO
 PTCL

Money Management

Practice the art of just-in-time money management.

Instant transfers now allow you to move funds within your bank accounts, free of cost. The
combination of Mobile Wallet management, SMS notifications and the occasional visit to
Website services allows you to keep an eye on your overall digital activity and stay on top of
your spending

CUSTOMER BASE OF THE MCB BANK/TYPES OF CUSTOMERS:

The most important assests for any organization is its customers. Within the context of quality,
MCB comparise two different groups, external customers and internal customers.

 External customer:

An external customer is the person or organization who receives and pays for a product, a
service, or information. For example: The external customer of MCB bank is the one who buy
bank credit card, drives etc.

 Internal customer:

It is employee or department within an organization who receives an output in the form of a

product, service, or information from another employee or department in that same
organization.

 Potential customer:

Muslim commercial bank prefer all individual or group who want to be its ciustomer but the
focus or the potential customer would be a person or a group having high deposits.

FUNCTIONS OF MCB BANK:

MCB Treasury perform the following functions

FX Interbank Desk

Money Market Desk

Treasury Sales & Marketing

Research Desk

FX interbank desk:

The MCB FX (Forex) Desk is responsible for covering bank’s and its clients’ FX risk. It also
manages the interest rate exposure associated with Bank’s FX book. MCB FX Desk provides
competitive exchange rates for all major currency pairs. MCB’s big network and healthy FCY
trade volume allows it the leadership role as a market maker in the FX interbank market. The
bank’s excellent credit rating ensures that it has a vast network of counterparties. The bank also
has an exhaustive network of NOSTRO accounts all over the world with its correspondent banks
for all conceivable currencies. MCB FX desk product range includes outright (ready, spot,
forward) and FX swap transactions of all major currencies.

Money market desk:

The Money Market Desk is responsible for devising and implementing funding and trading
strategies that maximize the bank’s profits while adhering to prudent risk standards.

MCB Bank is a primary dealer and a major player in the country’s fixed income and money
markets. The desk performs the following major activities:

Asset liability management

Funds management

Regulatory adherence

Fixed income trading

Money Market Products

Call borrowing

Call Lending

Repo

Reverse Repo
Treasury Bills (T-Bills)

Pakistan Investment Bonds(PIBs)

Treasury sales and market:

Treasury Sales Desk is dedicated to identify and service the needs of retail and corporate
clients. The treasury sales desk is responsible to identify interest rate and FX exposures of our
clients and offer tailored solutions to hedge or eliminate their risk exposures. Sales Desk offers
suitable products according to customer needs and understanding, be it plain vanilla FX
products or the more complex derivative products. We offer a full suite of derivative products
and specialize in advising our customers the appropriate product at competitive pricing.

MCB Treasury offers the following products to corporate and retail client base:

Plain Vanilla Foreign Exchange (Immediate/ Forward settlement)

Fixed Income (Treasury bills- T bills, Pakistan Investment bonds- PIBs and Ijara Sukuks)

Derivatives and structured products (FX options, interest rate swaps and cross currency swaps)

Research desk:

MCB Bank is one of the few banks that have a dedicated economic research desk. The research
desk of MCB treasury analyzes economic and market developments to forecast macro-
economic trends. This is critical in helping the treasury take strategic decisions in all business
areas. Research desk also provides update on market and economic events which includes daily
and monthly bulletins covering latest developments in the economy. Apart from reports,
communication to clients and senior management is also carried out on a regular basis to
assist/support their risk management decisions.

Reports

Articles

BANKING OPERATIONS OF MCB BANK:

Banks perform a variety of operations ranging from basic or primary functions like day to day
transactions at a branch to others that maybe the agency or general utility services in nature.
The transactions that are incidental to revenue/sales or sustaining the business are an
important element of the banking industry value chain. In this article, we will look at the key
operations performed in the course of banking.
Banks perform various types of transactions and activities to support their banking business.
These transactions may include making or accepting payments, trading, clearing and settlement
of accounts, and custody. Knowing the operational aspects of banking is very important for
understanding the value chain of the banking industry. Now, we will discuss the most important
supporting activities performed by banking institutions. The key operational activities are listed
below:

1. Acceptance of Deposits
2. Lending of Funds
3. Clearing of Cheques
4. Remittance of Funds
5. Lockers & Safe Deposits
6. Bill Payment Services
7. Online Banking
8. Credit & Debit Cards
9. Overseas Banking Services
10. Wealth Management
11. Investment Banking
12. Social Objectives

Acceptance of Deposits

Deposits are the basis of the loan operations since banks are both borrowers and lenders of
money. As borrowers they pay interest and as lenders, they grant loans and get interest. These
deposits are generally taken through current account, savings account, and fixed deposits.
Current account deposits can be withdrawn to the extent of the balance at any time without
any prior notice. Savings accounts are for encouraging savings by individuals. Banks pay rate of
interest as decided by central banks on the deposits. Withdrawal from these accounts has some
restrictions in relation to the amount as well as a number of times in a given period. Fixed
accounts are time deposits with a higher rate of interest as compared to the savings accounts.
Premature withdrawal is permissible with a percentage of interest being forfeited.

The lending of Funds:

The second major activity of banks is to provide loans and advances out of the money received
through deposits. These advances can be made in the form of overdrafts, cash credits,
discounting trade bills, term loans, consumer credits, and other miscellaneous advances. The
funds lent out by banks contribute a great deal to trade, industry, transport, and other business
activities. 

Clearing of Cheques

Cheques books are issued to the holders of accounts in banks. The cheque is a negotiable
instrument and the most convenient and widely used credit instrument. Cheques are used to
facilitate trade and business by endorsements and withdrawal of deposits. Banks render a very
important service to their customers by collecting their cheques drawn on other banks. It is the
most convenient and inexpensive medium of exchange that does not require the actual
movement of cash from one transacting party to another. Mainly, two types of cheques are
often used bearer and crossed. Bearer cheques can be encashed immediately at bank counters
whereas crossed cheques can only be deposited in the payee's account

Remittance of Funds

Banks also facilitate fund transfer from one place to another, leveraging the vast network of
branches that are interconnected to each other. Many banking instruments are in usage for
enabling transfer of funds from one account to another like bank drafts, pay orders, wire or
mail transfers. Bank earns nominal commission by way of bank charges on some of the
transfers. The bank issues a draft for the amount at its own branch which can be credited to
another account which might be with a different branches or different banks. Banks collect the
amount on behalf of the depositor which is known as the clearing process. 

Lockers & Safe Deposits

Bank safe deposit lockers are a good option for safeguarding valuables and important
documents. Each locker is operated by a combination of two sets of keys, one for the customer,
and the other with the bank. The locker can only be operated if both the keys are used. Banks
charge nominal fees to provide the locker facility.  

 Bill Payment Services

Banks also provide services related to bill payments, payment of insurance premiums,
collection of dividends, etc. Recurring payments can be automated for payment using the
facilities extended by modern banks. Account-holders can directly pay from their account or
using credit/debit cards for their electricity, gas, landline and mobile phone billers, and many
more

Online Banking

The growth of the Internet and e-commerce has transformed the banking industry and
customers are fast moving from branch banking to virtual banking. Users with internet on PC or
Mobile can get connected to the banks website and avail a variety of banking services and
functions. These services lower the transaction costs and add to the ease and speed of the
transaction flow.

BANKER CUSTOMER RELATIONSHIP:

Relationship between customer and banker in MCB bank will act as the financial planner and
partner. With the team of professional. Highly dedicated and certified privilege relationship
managers, you are set on the golden road to success. They understand your aspiration, and
focus not only on your current financial standing but also on where you want to be. With the
attentions and commitments that you deserve, the privilege team will use their expertise, and
market insight to help you invest your funds and grow wealth. Your privilege relationship
manager will arrange periodic review meetings with you to assess your financial situation and
better prepare you for the future.

BANKER’S AND CUSTOMER’S RIGHTS, LIMITATIONS, DUTIES:

MCB Bank Limited undertakes its responsibility to be recognized as an organization that is

aware of both its social and environmental obligation. The Bank continuously strives to
inculcate the same by creating awareness amongst stakeholders, streamlining its operational
processes and reinforcing the same through various policies. The key areas that the Bank
focuses upon are to provide a safe and healthy workplace, protect the environment and
conserve energy through use of appropriate technology and management practices.

Some of the salient features of the Bank policy are as follows:

Compliance with local, national and international laws and regulations as well as the spirit
thereof and conduct of business operations with honesty and integrity

Promote and engage in social welfare activities that help strengthen communities and
contribute to the enrichment of society

Provide innovative, safe and outstanding high quality banking products and services exceeding
the expectations of customers

Significant investment to develop technological based ‘Alternative Delivery Channels’ for

maximum ‘Financial inclusion’

Sustainable development through building and maintaining sound relationships with our
stakeholders through open and fair communication

Communication and dialogue with employees, to build and share the value of “Mutual Trust
and Mutual Responsibility” and work together for the success of our all stakeholders

Respect for people by honoring the culture, customs, history and laws of Pakistan. Constantly
search for safer, cleaner and superior practices that satisfy the evolving needs of the society

Minimize the environmental impact of business operations, by working to reduce the wastage
of all resources
Develop, establish and promote practices enabling the environment and economy to coexist
harmoniously and build close and cooperative relationships with individuals and organizations
involved in environmental preservation.

ISLAMIC BANKING OPERATIONS:

The ever changing consumer needs, intensified international competition, new regulations
and information technology upgrades are pushing banks to expand their product lines and
introduce new types of products and services to remain competitive in the industry. While
essential functions performed by financial institutions such as the provision of payment
services and facilitation of the allocation of economic resources over time and space have
remained relatively constant over the past years, the list of classic financial products is
regularly enriched by a number of new products, including short-term foreign currency
advances, factoring and securitisation.
Some of the products that are the result of innovation process in commercial banks are
long-term debt such as debentures, secured and unsecured notes, mortgages, floating rate
notes, leasing, project financing and derivative instruments. New securities traded by these
banks include ordinary shares, preference shares, bonds, treasury papers, debenture,
secured and unsecured notes issued by companies, exchange trade options and warrants.
Banks also innovate in derivative products such as interest-rate swaps, interest-rate
futures, forward rates agreements and options on future contracts. These derivative
products tend to give a return regardless to real-sector activities and even without the
involvement of money. In a forward-rate agreement, for instance, no commitment is made
between the parties to the FRAs to lend or borrow the principal amount and the exposure
of both parties is only to the difference between the agreed interest rate and the
settlement rate applicable at the date of settlement, which reduces the risk for both
parties compared to a classic load contracted in the future.

Similarly, interest-rate futures and options on future contracts can allow to reduce the
uncertainty of a future arrangement to both borrowers and lenders by locking interest
rates at present date. While interest-rate swaps allow companies to use their credit-
standing to reduce their overall cost. In this case, principal amounts are not physically
exchanged. Only the difference between the two operations is paid, which reduces the
amount of exchanged cash.
The innovation in in banking products also includes new market segments such as in
microcredit, where the traditional banking industry have begun to realise that these
microcredit borrowers should more correctly be categorised as pre-bankable; thus,
microcredit is increasingly gaining credibility in the mainstream finance industry and many
traditional large finance organizations are contemplating microcredit projects as a source
of future growth. SME oriented products is also another axis of development for banks
where we see specialized banks competing to offer comprehensive and integrated financial
products as well as business advisory services to SMEs

FINANCIAL STATEMENTS:
ROLE OF BANK IN ECONOMIC DEVELOPMENT:
MCB playing an important role in the process of economic development of Pakistan, which is
clear from the following points:

 Capital accumulation or formation:

Capital formation refers to the increase in the existing stock of capital goods in an economy.
MCB remove the capital deficiency by encouraging savings and investments. MCB is promoting
capital formation in the country by moving the resources to the productive uses.

 Mobilization of savings:

There operates vicious circle of poverty in developing countries like Pakistan. So, savings remain
at the lowest level. Savings of people are very low due to international demonstration. Effect in
Pakistan. MCB is playing important role in the mobilization of saving by introducing a variety
through saving and it provides various facilities in a country to create a will and power to save.

 Availability of funds:

An additional point of role of banks is more availability of funds. Poor population has poor
resources for the economic development in poor countries like Pakistan. The activities like
inventions, research and development and initiatives are impossible due to the insufficiency of
funds in these countries. Banks remove the deficiency of capital by providing different types of
funds that lead to economic development.

 Attaining self-sufficiency:
A major problem faced by the developing countries is burden of foreign debts abd dependence
on other countries. MCB provides incentive for the entrepreneurs to take risks and use idle
resources for better production.

 Implementation of modern technology:

Economic development without is of advanced and most up-to-date technology is impossible.

MCB provides more funds to people to make it possible to use the modern technique of
productions.

 Development of agricultural sector:

MCB is playing an important role in the development of rural and agricultural sector. Growth
rate of agricultural sector is 1.2%.

 Development of industrial sector:

Commercial bank provides different types of loans for the development of industrial sector. It
leads to the agricultural development and it result in economic development.

 Expansion of market:

MCB helps in the expansion of markets. They help in the formation of sound economic
infrastructure in order to raise living standards and to expand trade an commerce of Pakistan.

 Essential for foreign trade:

Foreign trade is one of the most important needs of all the countries of the world. MCB is
helpful in increasingly international trade through following g ways.

 Provision of credit facility

 Low rate of interest for the exporters
 Opening of letter of credit
 Arrangement of foreign exchange
 Opening of foreign exchange
 MCB have $2.2571 billion of foreign exchange reserves
 Remove budget deficits:

MCB is very helpful for the government. Now days the government has to face the budgets
deficits because of increases expenditures and falling revenues. As a result, the development
process can be started through borrowed money from bank.