INTERNSHIP REPORT ON MCB BANK LIMITED

Name of Organization: MCB Bank LimitedUniversity of Gujrat City campus

ACKNOWLEDGEMENTFirst of all thank the ALLAH ALMIGHTY, with whom blessing I have done my Internship report. A number of people have help and support me for the successful completion of my internship report.After thanks to Allah, I would thank to all those peoples who have supported me during the completion of my final report. I acknowledge the support of my supervisors who provides me ideas about the preparation of the report. I would like to thanks the entire staff of the MCB Bank Limited who help me and provide me the guidelines for the completion of the report. EXECUTIVE SUMMARY

I am done my internship in MCB Bank Limited, GT ROAD, Gujarat Branch. I worked at different departments of the Bank i.e Operations, Foreign Exchange, Advance. During the period of 8 weeks. MCB Bank Limited provides a better products to its customers to fulfill their needs in a better way. The main departments of the branch are Operations Department (Deposit, Cash Departments and Remittance ) and Advances Department ( Agriculture Landing ,Consumer Lending and Commercial Lending ). I also go throw the HR Department of the bank functions focusing branch and head office level. During my internship at the branch, I got detail knowledge about the functions of these departments.

MCB Bank Limited provides different types of accounts and facilities , the selection of account is depends upon the customers need and its requirements. The main deposit accounts are Basic Banking Accounts, Current Deposit Accounts, Saving Accounts & Term Deposit Accounts. All other products are derived from these accounts. In remittance department different types of remittance instruments are used i.e Demand Draft, Pay Orders & Pay in slips etc. Clearing function is also used in remittance department for collect the proceeds from other banks and also from own bank branches. The clearing function is used SBP (State Bank of Pakistan) clearing house with the help of NIFT (National Institute of Facilitation Technology). Finance department gives business finance to SME (Small & Medium Enterprises) and Corporate Businesses, consumer finance to individuals and agriculture finance to farmers.I have completely gone through the HR Department functions, roles and responsibilities. I study the role of HR from hiring of personal to the benefits and retirement. MCB Bank Limited has over 10,000 staff (Contractual and Permanent).

MCB Bank Limited is dedicated to maintaining long term customer relationships through outstanding services and convenience. The bank has both Conventional & Islamic Banking branches. However the bank faces some problems like staff training is not conducted, online banking problems and need advancement in information technology. I want to conclude that with continues improvements, proper planning, advertisement campaigns and implementation of Information Technology in banking processes must be taken for the improvement and success of MCB Bank Limited.

TABLE OF CONTENTS

S. No.Description

1Overview of the organization

a) HISTORY

b) Oranization nature

c) Business Volume

d) Advances Products

e) Competitors

2Organizations Structure

a) Organization Hierarchy Chart

b) Number of Employees

c) Main Offices

d) Introduction of All the Departments

e) Comments on the Organization Chart

3Plan of Internship Program

a) Starting and ending period

b) Departments of Training

4Training Program

a) Detailed Description of Activities Performed

b) Introduction of All Departments

c) Detailed Description of All Departments

I) HR Department

II) Operations Department

III) Credit Department

5SWOT Analysis

6Conclusion

7Recommendations for improvement

8Reference & Sources

1. OVERVIEW OF THE ORGANIZATIONa) HISTORYMCB Bank Limited was established under companies act 1913 on 9th July, 1947 at Calcutta. But due to changing of the region, the certificate of incorporation was issued on 17th August, 1948 with a delay of almost 1 year; the certificate was issued at Chittagong. The first Head office of the company was established at Dacca 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 BANK LTD 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 BANK LTD 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.

When privatization policy was announced in 1990, MCB BANK LTD 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.

Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played instrumental role in its success. In recognition of Mr. Manshas contribution, the Government of Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most prestigious civil awards of the country.

The Bank has a customer base of approximately 4 million, a nationwide distribution network of over 1,000 branches and over 450 ATMs in the market.

During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its extensive branch network, developing a large and stable deposit base.

BOARD OF DIRECTORS

Organizational structure is the frame work that defines the boundaries of the formal organization and within which the organization operates.Board of Directors

Main Muhammad Mansha

ChairmanS.M. Muneer

Vice Chairman

Directors

Tariq Rafi

Shahzad Saleem

Sarmad Amin

Dr. Muhammad YaqubDato Muhammad Hussein

Mian Raza Mansha

Aftab Ahmad Khan

Mian Umer Mansha

Muhammad Ali Zeb

Datos Seri Ismail Shahudin(All are Non-Executive Directors)

M.U.A Usmani

President & Chief Executive Officer (Executive Director)

MISSION STATEMENT

We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.

VISION STATEMENTTo be the leading financial services provider, partnering with our customers for a more prosperous and secure future

CORE VALUES:

Integrity:

We are the trustees of public funds and serve our community with integrity. We believe in being the best at always doing the right thing. We deliver on our responsibilities and commitments to our customers as well as our colleagues.

Respect:

We respect our customers values, beliefs, culture and history. We value the equality of gender and diversity of experience and education that our employees bring with them. We create an environment where each individual is enabled to succeed.

Excellence:

We take personal responsibility for our role as leaders in the pursuit of excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward.

Customer Centricity:

Our customers are at the heart of everything we do. We thrive on the challenge of understanding their needs and aspirations, both realized and unrealized. We make every effort to exceed customer expectations through superior services and solutions.

Innovation:

We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. Our teams work together for the smooth and efficient implementation of ideas and initiatives.

b) NATURE OF ORGANIZATIONMCB Bank Limited is a commercial bank and it deals with money and finance, which is in most liquid form and its substitutes of money, such as cheques, Demand Draft, Pay Orders, Mail Transfer, bill of exchange. Bank also provides variety of other financial services like advances loans ( corporate, consumer and Agriculture) and guarantee facilities like bank grantees and letter of credit facilities. The basis of any banking organization is borrowing money from individuals, firms and Government. With these resources and also with banks own capital, the bank advances loans or gives credits to general public, corporations and small business houses and also invests in securities to earn profit. The bank makes profit by borrowing at one rate of interest and lending at a higher rate and by charging commissions for service rendered. c) BUSINESS VOLUMEParticular2007

(Rs, 000)2008

(Rs, 000)2009

(Rs, 000)2010

(Rs, 000)

Total Assets410,485,517443,615,904509,223,727567,552,613

Share Capital6,282,7686,282,7686,911,0457,602,150

Investments113,089,26196,631,874167,134,465213,060,882

Deposits292,098,066330,274,155367,604,711431,371,937

Advances218,960,598262,135,470253,249,407254,551,589

Profit Before Tax 21,308,03521,867,56623,154,94526,253,075

Profit After Tax15,265,56215,374,60015,495,29716,873,175

d. ADVANCES PRODUCTS: The following are main advances products offered by MCB Bank Limited.1. Running Finance Facility:

i. This facility is granted to meet the working capital requirement of the business.

ii. The overdraft limited is assigned to customer for business use.

iii. The loan is secured against the mortgage of property.

iv. The mark-up is applied on the amount which is used by the customer on daily basis and usually charge on quarterly basis.2. Demand Finance Facility:

i. The facility is granted for the purchase of asset.

ii. The loan is payback in installment.

iii. This loan is also secured against the mortgage of property.

iv. Mark-up usually charge on quarterly basis.

3. Cash Finance:

i. The facility is granted for the purchase of stock.

ii. This facility is also called seasonal financing.

iii. Facility is secured against the pledge of stock.iv. Mark-up is charge on quarterly basis.

e. CMPETATORS:

The following are competitors of MCB Bank Limited.

1. Private Sectors Competitors Banks:

i. Allied Bank Ltd.ii. Askari Commercial Bank.

iii. Faysal Bank Limited.

iv. Habib Bank Limited.

v. Bank Al-Habib Ltdvi. Habib Metropolitan Bank.

vii. Summit Bank.2. Public Sector Competitors Banks:

i. National Bank of Pakistan.

ii. The Bank of Punjab.

iii. The Bank of Khyber.

iv. First Women Bank.

3. Foreign Banks:i. Standard Chartered Bank.

ii. Alfala Bank Limited.2. ORGANIZATION STRUCTUREa) Organization Hierarchy Chart b) Number of Employees:

MCB Bank Limited since its incorporation has the more potential bank not only for its customers but also for its employees. MCB Bank Limited, offering great working opportunities for all the peoples who are interested to join MCB Bank Limited and with passage of time employees is increasing as its business volume is increasing because MCB Bank Limited provides enhanced career opportunities with dynamic work employees are motivated with higher salaries according to their education and experience level. The staff strength of MCB Bank Limited on December, 10 as follows:

Detail

Numbers

Permanent Employees

9,583

Temporary or Contractual Basis

57

Total Staff on Bank Payroll

9,640 Outsourced Employees

3,740

Total Staff Strength

13,380 c) MAIN OFFICES:

Registered Office

MCB Building, F-6/G-6, Jinnah Avenue, Islamabad.

Principal Office

MCB 15 Main Gulberg, Lahore.

UAN: (042) 111-000-111

PABX: (042) 36041998-9

Website: www.mcb.com.pk

d) INTRODUCTION OF ALL DEPARTMENTS:

An organization cannot function without proper arrangements of its specific takes, objectives and duties. The process of grouping jobs according to some logical arrangements is called departmentalization. In MCB Bank Limited, the branches are divided into three departments and further divide the operations department into three departments. MCB Bank Limited divides its branches in two segments one are pooling branches and others are lending. Pooling branches performs all functions of banking, i.e deposit, advances & foreign exchange. The pooling branches only accept the deposit but not perform the function of advances and foreign exchange by itself. These branches perform these families with the help of nearest lending branch. MCB Bank Limited, GT road branh is the lending branch. OPERATIONS DEPARTMENT

i. Deposits / Accounts Department

ii. Remittances & Clearing Department

iii. Cash Department

ADVANCES DEPARTMENT

DEPOSIT / ACCOUNTS DEPARTMENT:

The commercial banks perform two main functions. It accepts deposit from general public and advances loans. By the performing these functions, they earn profits. Deposit department is one of the most important department and main department of the bank. It performs the vital function in the bank because it deals with the supply of money to the bank. Deposits are the inputs of a bank. Deposits department is just like a heat, as it function other department also run, otherwise the whole system paralysis. In deposit department the bank attract deposit by offering different deposit products, like saving & term deposit accounts.

REMITANCES DEPARTMENT:

Remittance department of the bank performs the function of remitting or transferring of funds i.e. to transfer funds for customers from one location to another. The transfer of funds may be from one branch to another or from one bank to other Remittances mean the transfer of money or fund from one place to another place through banking channel. It may be within locality or out side locality. Pay Order comes under the head of within locality and Telegraphic transfer (TT), Demand draft (DD), Mail transfer (MT), Bank Draft (BD) comes under the head of out side locality. A clearing house is a place where the representative of all banks get together to settle the payment and receipts of Cheques drawn on each other. There are two main types of clearing, one is inward clearing and the other is outward clearing.

FINANCES / ADVANCES DEPARTMENT:

The banks accept deposit from customers and what they do after receiving deposit. The Bank advance loans to individuals & businesses at the rate higher than deposit rates and earn profits. This function of the bank contributes great deal to the revenues of the bank. Due to its importance for the bankers success, this area is given special importance and attention. The primary purpose of this department is to encourage small & medium businesses to take loans and help them in their business. The bank earns from the advancement of loan to the people or organization and charges a certain percentage of interest on it and bank earns profits.

e) COMMENTS ON THE ORGANIZATIONAL STRUCTURE:

The role of MCB Bank Limited management in organizational structure is essential not only to set the direction for and constantly contribute to clarifying the core functions and objectives of the organization but also to model the behavior and attitude to support the results orientation. The study of MCB Bank Limited operational, financial and investment activities gives an overview of the overall position of the bank. The growth in every department of the bank is observed from the time the bank is incorporated. In MCB Bank Limited, almost all decisions are made at the top management level of the bank, which shows a highly centralized form of structure of the bank. When top management taking all decisions an overview of the organization is first formulated, specifying but not detailing any department. Each department is then refined in yet greater detail. Relatively less important decisions are taken at the branch level but only person who can take these decisions is the branch manager of the branch. This centralization of authority is helpful as far as quick decision-making, tighter control and secret keeping is concerned. However, sometimes wrong or ineffective decisions are taken or even sometimes good and bold decisions are not taken and the opportunity cost has to be incurred.

3 PLAN OF INTERNSHIP PROGRAMa. Starting and Ending of Internship

My internship started on 17-06-2013 and end after eight weeks at 20-08-2013b. Departments of Training

I done training in all departments of the branch and connected lending branch. I got training in HR, operations, advances. I spent two week in each department.4 Training Program

a) Detail Description of Activities Performed:

I have done hands on experience on all departments of the branch. To enhance the efficiency the branch divided the group of peoples into departments and divisions. A department head or incharge leads the team of peoples. I opened the different types of bank accounts i.e Current, Profit & Loss Account, Term Deposit Account and different categories of accounts i.e Individual Accounts, Proprietorship Account, Partnership Accounts, Company Accounts and Trust Account. I completed all the documents of account opening with the help of Customer Services Officer. I gain hands on experience in of clearing, I lodged cheques and other negotiable instruments in outward clearing and debit all clearing received from other banks in inward clearing. I issued different types of remittance instruments e.g Demand Draft, Pay Orders, Lockers etc and learn about Telegraphic Transfer, Mail Transfer, the use of these means reduced due to the emerging online banking facility. The incharge clearing and remittance department coached me.

I prepared credit proposal of fresh clients and for credit line renewal. I prepared stock reports and different credit statements for reporting purpose. In Advances Department, I learn about complete credit documentations and processes of credit line approval. I also work in trade finance department and learn about the different trade products and trade business. b) Introduction of All departments

The MCB Bank Limited, Railway Road Gujrat Branch has three main departments.

1. Human Resource Department (HR Deprtment Regional Office Gujrat.)2. Operations Department.i. Accounts and Deposit Department

ii. Remittance and Clearing Department.

iii. Cash Department.

3. Advances Department.c) Detailed Description of all Departments:

A. Human Resource Department:

Human Resource functions are performed by the HR Division, Regional Office Gujrat. I spent two weeks in HR Department to know the HR functions and roles. I go through the selection process of employees used in different departments of the bank.

MCB Bank Limited, hires staff in two ways on e is from batch program (Fresh Induction) and other is hiring experienced staff from other banks and also hires staff contractual staff both in batches and experience stuff.The fresh graduates are hired through MCB Batch Program. MCB needs staff in different departments. The hiring program starts from advertisement in different news papers and MCB on websites and different HR recruitment portals. After the received of thousands of applications from fresh Graduates and Masters, the HR Departments are sorted out merit wise and test is conducted. After completion of test interview are held in respective staff colleges. Currently MCB Bank Limited has three staff colleges, Lahore, Islamabad and Karachi. After passing out the interview the candidates and gone through comprehensive pre-indention training program. This training program is purely on all Banking departments in the class room and on the field. After completion of trainings, the employees are posted at different departments.

In the second one hiring staff process is experience staff. The Regional Heads and General Mangers asses the need of employee or need for replacement through the field managers. They calls for interviews, select the right candidates for the right department and send the request to the HR Department for their hiring. The need assessment is observed at Head Office level taking feed back from filed managers. Branch Managers also involved in the Human Resource functions, he manage all the staff of the branch according to the need and jobs responsibilities. B. Operations Department

Operations Department include all operations activates of the branch. The Branch Operations Manager manage all activates of the branch. Branch Operations Manager is responsible for all banking operations in the branch. The operations department divides into three sub departments.

1. Accounts and Deposit Department:

The main objective of Accounts Department is to keep the records of all financial transactions of bank in accurate, timely and transparent manner; it is also responsible in managing existing accounts and also developing new relations. The basic objective of Accounts Department is to keep records of financial transactions of bank in an accurate, transparent and time-bound manner. With the adoption of new technology and centralized banking system the working of accounts department is changed. Now, accounts department in responsible of managing the existing relationship also cater new relationships to the bank. They are now more involve in the supply of money. The accept deposit from general public for the advancing loans

Mission & Vision of Accounts and Deposit Department:

The accounts and deposit department is responsible for the deposit mobilization and account opening. This department is also responsible for issuance of ATM Cards, Mobile banking and also introduction of new products newly started by the bank. Department is also responsible for the maintenance of existing account.

Duties to be performed:

The main duties performed by the officers of Accounts Departments and various accounting units are as follows:-

-To record/get recorded initial entries of all financial transactions in the initial books of record and to ensure their proper maintenance.

-To reconcile inter-divisional/ departmental monthly/quarterly Accounts and adjustment of differences.

-To control the budgets and maintain the Accounts books of records for budgetary control.

-To maintain Objection Book of Accountants.

-To test check and internally audit the accounts of sub-divisions/sections.

-To open accounts and complete the process of account opening.

-Deposit mobilization and generate business for branch.

FUNCTIONS OF THE DEPARTMENT

Following are the some key functions performed by the Deposit Department in Bank.

a. OPENING OF ACCOUNT:

The main focus of the bank is opening of account also abbreviated in banking language NTB (New to Bank) because it is the main way to spread and create linkage with customer and enhance the deposit of the Bank. Deposit is life blood of the bank and core function of commercial banks. Opening of account is like a contract between bank and the customer, which is guided by people of deposit section.

TYPES OF ACCOUNTS

Following are the main types of accounts which are available in MCB Bank Limited, the selection of account is depends upon the customer need and requirements because different account treats differently, every account gives piece of mind to different people that why different account are provided by the banks according to the customer needs.

DEMAND DEPOSITS

It is clear from the name that Demand deposit is one which is payable on the demand of the customer this includes two major accounts current account and saving deposit account

I. CURRENT ACCOUNT

Current accounts are running accounts. It is also known as a checqing account, it is a bank account in which your proceeds can be deposited and from which you can manage your finances during the month. Current or cheque accounts provide you with a one-stop facility for managing your finances. The current deposits represent the current liability of the bank.

Features of Current Accounts:

Following are the main features are the current accounts.

i. Any person can open account with minimum deposit of Rs. 1000.

ii. There is no limit for deposit and withdrawals definite.

iii. No limit for maximum deposit.

iv. The does not pay any sort of profit to account holder.

v. All cheques and other instruments should be crossed before they are credit to the account.

vi. The bank would not require any prior permission from the account holder for debiting his/her account for charging expenses, fee, commission, mark up etc arising out of any dealing with the branch.

vii. The account holder should maintain a minimum balance of Rs. 10,000 per month otherwise, the bank deduct of Rs.50 per month account maintenance charge.

viii. Account statements are provided to the depositors mostly half yearly intervals or whenever required by him.

ix. These accounts are completely exempted from zakat and with holding taxes.

x. If the customer is not performed any transaction for the six month the account automatically converted into dormant. After 3 years to inoperative account register. To re-operate such account an application is written in the name of branch manger. After ten year the if no transaction take place the amount laying in the account slender to SBP (State Bank of Pakistan).

II. PLS SAVING ACCOUNT:

Savings accounts are used to save the money and earn profit. This saving account is opened with a minimum balance set by each individual bank. There are usually exceptions for minors such as a lower or no minimum balance to open. Saving accounts are mostly opened by those types of customers whose baking transactions are not frequent. They want to save money and earn profit on it. Normally lower and middle income groups, small traders, professionals, farmers and other salaried classes usually make such deposits to save small amounts to meet their needs. Funds can be deposited frequently through cash, cheques, demand drafts, pay orders, telegraphic transfers and other such instruments.

Features of Current Accounts:

Following are the main features are the current accounts.

i. No minimum balance requirement.

ii. No maximum limit for deposit.

iii. The deposits can be made individuals, trusts, charitable institutions and provident fund.

iv. Zakat on the amount of balance is deducted at shirah rates but zakat is not deducted if declaration is given by the customer.

v. The account statement is provided to depositor as per their instructions.

vi. Profit is paid half yearly at rate which differs after every six months.

III. Basic Banking Account:

Basic banking Accounts are basic accounts of starting banking relationship. These accounts are usually open students and low salary person. No account maintenance charges applied if the account holder restricted to two deposits and two withdrawals. No zakat is applicable on these accounts.

Features of Basic Banking Account:

Following are the main features are the current accounts.

xi. The BBA account is opened with small initial deposit of Rs. 1,000

xii. No minimum balance maintenance required.

xiii. No monthly account maintenance charges.

xiv. Two deposit & withdrawals are allowed (Cash & Clearing).

xv. Unlimited cash withdrawals are allowed through ATMs.

IV. Fix or Term Deposit Scheme:

Fix Deposit accounts are used for investment purpose. The money is fixed for some time period ranging from one month to onward. The profit rates are higher than other accounts. The profit paid monthly, quarterly, half yearly and yearly depending on the customer request.

i. Highly attractive profit rates.

ii. Multiple tenors from one month onwards.

Option of premature encashment.

iii. Zakat on the amount of balance is deducted at shirah rates but zakat is not deducted if declaration is given by the customer.iv. No maximum limit for depositv. Option for ATM debit card to access profit earned.

vi. Option for automatic renewal of term deposits.

These are basic accounts which are offered by MCB Bank Limited, from these products the bank derive other products with augmented some benefits with the main products or accounts. Bank also offers these accounts in foreign currency like Dollar, Pound & Euro. Other accounts or products are as follows:

1. Smart Dollar Account.

2. Saving 365 Gold.

3. Business Account.

4. Saving Xtra Account.

5. Current Life Account.

6. Smart Savings.

7. Khushali Bachat Account.

2. Remittance and Clearing Department:There is only one type of remittance:

Inland remittancesINLAND REMITTANCES:

Following are the main source of inland remittance used in banks.

1. Demand Draft (DD):

Demand Draft is a written order, drawn by one branch of a Bank upon another branch of the same Bank, or upon other Bank under special arrangements to pay a certain sum of money to or to the order of a specified person.

2. Telegraphic Transfer (TT):

Transfer of funds from one branch to another branch of same bank or another bank. It is necessary that person for whom T.T is made has an account in the same bank. Special codes are used for this purpose.3. Mail Transfer:

Transfer of funds from one branch to another branch of same bank or another bank through mail or courier service outside the country. If the person has not the account in the same bank an advice is attached by the sending bank to shift the amount in the concerned branch. In suspense account party will have to prove his identity.

4. Pay Order:

A pay order is an instrument used for the payment with in the city. The function of Pay Order is same as demand draft, the only difference is that the demand draft is order to other branch in other city to pay the certain amount, to person name mentioned on it. Bank own expenses are also paid through Pay Orders.

CLEARING

Clearing is the function of settlement of banks receipts and payments with other banks. The bank collects the cheques of other banks from their customer and presented through clearing for honor and also received cheques from other bank for payment. This receipt and payment is settled through the help of SBP (State Bank of Pakistan) and NIFT (National Institute of Facilitation Technology) facilitate.

CLEARINGHOUSE:A clearinghouse is a place where the representative of all banks get together to settle the payment and receipts of cheques drawn on each other.

FUNCTIONS OF CLEARING DEPARTMENT IN BRANCH:To accept transfer, transfer delivery and clearing Cheques from the customers of the branch and to arrange for their collection.

To arrange the payment of Cheque drawn on the branch and give Cheque for collection to any other branch of MCB Bank Ltd. or any other member or sub member of local clearing house.

To collect amounts of Cheques drawn on members of local clearing house sent for collection by MCB Ltd. branches, not represented at the local clearing house.

b. Description of Tasks Performed by me:

Following are the main tasks which are performed by me in different departments during my internship in MCB Bank Limited.

I) Operations Department:

I. Account or Deposit Department:

During my internship training program, I spend two (2) weeks in accounts department, in this department, I learn and gain practical knowledge about opening and closing of accounts. I open every type of accounts (Current, PLS, Term) and every category of accounts (Individual, Sole proprietor, Partnership and Company Accounts). I complete the documents required for opening of accounts and learn the procedure to close the account. Following is the detail about all task mention above.

Account Opening:

Under this section, I learned how to open an account and types of the accounts and conditions to open the accounts. There are different customers and they want to open an account which satisfies their requirements, so bank had provided the opportunity for the customer to fulfill there needs and can open different types of accounts like current account, PLS account, BBA account, foreign currency accounts, Business Accounts and many more types of accounts. I open different types of account current, Profit & Loss Account, Term Deposit Account. Following documents are compulsory for opening an account. I collect all these documents from customer and open accounts.Documents Received to open a Personal Account:

Copy of CNIC of the person desiring to open the account.

Complete filling of the form.

Filling the Specimen signature Card.

Received minimum opening balance for account opening.

Documents to open a Personal Account:

Copy of National Identity Card of the person desiring to open the account.

Request letter on business letter head.

Copy of NTN or Business Prove.

Complete filling of the form.

Filling the Specimen signature Card with business name stamp.

Minimum opening balance is required.

Documents to open a Personal Account:

Copy of CNIC of all partners.

Request letter for opening account and persons authorized to operate account.

Partnership Deed.

If Partnership registered, Form C required.

Complete filling of the form.

Filling the Specimen signature Card with business name stamp.

Minimum opening balance is required.

Documents to open a Company Account:

Resolution of Board of Directors for opening of account specifies the persons authorized to operate the company account.

Memorandum of Association.

Article of Association.

Certificate of incorporation.

Certificate of commencement of business.

Attested photocopies of CNIC all the directors.

List of directors on form 29 issued by SECP (Security and Exchange Commission of Pakistan )

Documents to open an Agent Account:

Certified copy of power of attorney. CNIC of the Agent.Documents to open a Trust Account:

CNIC of all the trustees.

Copy of instrument of trust deed

Copy of certificate of registration.

I also examine the deposit slips like cash deposit slip, cheque withdrawal, online transfer of money, utility bills slip which are presented by the different customers. Following are the precautions which I learn to examine before forwarding.

Tally the amount on deposit slip with cash and cheques.

Examination of the deposit slips that the names and account numbers are clearly mentioned.

Cheques are signed by the directors, partners or employees of company, drawn in favor of them and credited in their account in the bank are too scrutinized.

Withdrawal of amount can be made at branch only in which account is maintained. No third party can withdraw money. In current amount can be withdrawn during banking hours anytime.

Issuance of Cheque Book:I learn to how to issue cheque book to the account holders. In this, new account holder are issued cheque book and old account holder fills the requisition slip for the request for checque book issuance. The presence of accountholder is necessary to receive cheque book. If third party comes to receive cheque book then an authority letter is received from him and signatures are taken and then issue him cheque book.

Issuance of Lockers:

Branch also offers Safe Deposit Lockers facility to their customers. The lockers are invariably to be installed in the Strong Room of the Branch to ensure maximum security against burglary, theft and riots. Each locker irrespective of its size has a separate number and is fitted with a double key lock which cannot be opened except with the two keys, one being Master Key under the custody of Operations Manager /Authorized Officer and the other possessed by the customer.

The relationship subsisting between Bank and Person to whom locker is rented out will be that of a Licensee and a Licensor and not that of a customer and banker.

Lockers are offered in three sizes, small medium and large. Before issuing a licence for the use of locker, make it sure that the licensee maintains an account in any branch of our Bank in the same City / Town, preferably in the branch where locker facility is available.

A license for this purpose can be issued in single or joint names.

The following forms / formalities should be completed:-

a) Application Form MF - 19.

b) Specimen Signature Card MF - 19A.

c) Either / Survivorship Form MF - 19E (only if the locker is in joint names).II. Remittance & Clearing Department:In the Remittance & Clearing department, I learnt different types of money transfer from one place to another. Different types of methods are used to transfer money with a secure means from one place to the other place.

Demand Draft

It is the instrument used to transfer the money from one city to another. The person who wants to made payment to other person or business, he make a request to prepare a demand draft. It is prepared on a written form. The beneficiary name, applicants name, amounts in words and figures, purpose of transfer of money and services charges are written on demand draft. It is made either for cash or through cheque. The bank is charged commission on it.

Mail Transfer

The transfer of money in the shape of document from one place to another by mail is called Mail Transfer. It is the safest and fastest mode for remittance. All other procedure is same as demand draft.

Telegraphic Transfer

It is also an instrument used to transfer the money from one city to another. It is the fastest transfer of money from one bank to another. The transfer is made on the behalf of the customer through telecommunication. Other requirements are same as they are in the demand draft.

Pay Order

Pay order is more liquid as compare to cheque. It is used to secure transfer of money from one place to another. The client gets a printed form from the bank to fill it and deposits the amount. The bank charges the commission and holding tax for this purpose. It is the written order which is issued by the bank.

Online Fund Transfer

With the implementation of core banking system SYMBOLS, the issuance of mail transfer and telegraphic transfer goes to minimum. Now, customer can transfer money from own account to any other account of the bank. Customer fills the application form SF-100 and signs it. The remittance teller verifies the customer signature and transfers the funds to the account, which is customer requesting. Clearing:

Clearing is of two types i) Inward Clearing and ii) Outward Clearing.i) Inward clearing is received by the branch in the morning. In the inward clearingthe branch received the cheques which are issued by their account holders to the account holders of other banks. The teller received the cheques and sorted out that all cheques are in order, all stamps are fixed on it and account holder has balance in the account. If the teller found defect, he/she return the cheque.ii) In outward clearing the branch sent the cheques of other banks in the afternoon to other banks for clearing, which are presented by our account holder.NIFT perform the function of clearing with in the city or area and also other cities. The services of other cities are called Intercity Clearing. NIFT also provide the facility of clearing cheques in same day called Same Day Clearing, in which the cheques are cleared with in working day.

III. Cash Department:

In cash department the cash and prize bonds are receipt and paid. The cash department also received utility bills. The Operations Manager briefly tells me about the functions of cash department.III) CREDIT DEPARTMENT

In Advances Department, I learnt about the different credit facilities provided to the customer by the bank. I prepare different types of credit proposals for fresh facilities and for renewal of credit facility. I prepare credit customers stock statements and different credit statements submitted to SBP and head office. There are three categories of financing i) Corporate and SME ii) Agriculture Finance iii) Consumer Finance.

The basic principle of lending as follows:

The art of affording credit facilities is very intricate and the banker has to take various factors into consideration. These considerations are:1. Diversification:

Not invest in single industry.2. Safety / Security:

The loan must be adequately secured.

3. Liquidity:

Customer in position to repay on bank demand. 4. Profitability:

Bank earns profit on loan.

5. Desirability:

Funds are used for productive purpose.6. Customers character: Customer has good credit history.7. Customers capability:Customer has capacity to pay back. 8. Customers capital:

Customer has own capital to run business9. Project viability:

Project is profitable10. Credit Risk and Return: Banks reward are more than riskI lean following general credit facility process:

1. Customer request for credit facility.

2. Branch made the credit proposal and submits to Regional Credit Hub.

3. Regional Credit head jointly approved the limit with Manger Credit Risk.

4. Branch allot sanction limit to Regional Manager, if the limit of facility exceed his allotted limit, the credit request to forward to higher offices.

5. After approval the branch mortgages the property and received all required documents from customer.

6. At last the facility provide to the customer.

The following are credit facilities are provided by the MCB Bank Limited to his customers. I lean about each and every product and process all credit facility.i) Corporate or SME Financing.Running Finance:

In running finance facility the bank provides the facility to withdraw the amount from his account up to the limit approved. The Running Finance facility is secured against the mortgage of property. This facility is granted to meet the short term working capital requirements. So the tenor of the RF facility is normally one year. I prepare the credit proposals of different customers for fresh clients and renewal of existing facilities running. SPECIAL PRECAUTIONS

I learn that the bank ensures that:

Running Finance facility is not being used for long-term financing needs. In this respect, the financing needs of a borrower should be ascertained with regard to its seasonal cycle / cash flows.

Current utilization level is constantly monitored to ensure that the credit limit is not breached.

The customer makes periodic adjustments, at least quarterly, unless otherwise approved.

No disbursement is made against expired limit.Documentation: Following documents are obtained at the time of disbursement of credit facility. Promissory note, duly stamped (IB-12)

Mark-up Agreement (IB-6)

Sufficient, tangible securities with or without collateral, realizable of stable value with necessary documentation [e.g. Letter of Hypothecation (IB-25) / IB-28 & IB-31 in case of Deposit Certificates, Shares / Securities etc.

For property including IB-22 or IB-24, etc.], and Adequate insurance, as appropriate, covering assets charged in Bank's favor. The cost of insurance is to be borne by the borrower.

Cash Finance:

Cash Finance is a facility where an amount is disbursed against pledge of locally procured goods and / or merchandise. The amount after retaining the prescribed percentage of margin on stocks is transferred in a separate cash finance account of the customer. Delivery of pledged stocks is allowed on payments.

Special Precautions:The Bank should ensure that:-

1. Proportionate mark-up has been recovered at the time of issuance of each Delivery Order and at quarter ends.

2. Each tranche is adjusted within 90 180 days or earlier, as per Approved terms.

3. Rollover is allowed against fresh stocks only.

4. The security is of durable goods (of non-perishable nature).

5. The goods pledged are in the Banks effective control under lock and key under Banks nominated Muccadum / guard. Open pledges to be allowed only under specific permission.

6. Approved Muccadums are hired and deputed, in accordance with Banks Muccadumage policy.

Application Polices:

Draw down is allowed on receipt of goods for pledge. Drawing power is to be determined, based on value of goods placed under pledge along with stipulated margin. Finance is recovered on each delivery. Each drawdown is required to be adjusted within the stipulated period (generally 90 to 180 days) along with proportionate mark-up (Recovery of Mark-up on Cash Finance) and at quarter ends.

Documentation: Following documents are obtained at the time of disbursement of credit facility. 1. Markup Agreement (IB)

2. Promissory Note (IB-12)

3. Letter of Pledge (IB-26)4. Where collateral property is obtained, relevant documents including IB-22 / IB-24 to be obtained.Demand Finance:

Under this type of facility, finance is allowed to the borrower for a fixed period usually exceeding one year, repayable either in periodic installments or in lump sum, at a future date. This type of finance is of non- revolving nature. The demand finance facility may also be created as a consequence of loan rescheduling or as a consequence of forced financing.

Special Precautions:

It should be ensured that:

1. The security possessed is commensurate with the terms of finance.

2. Where the installment payment is delayed, the additional mark-up is charged for the delayed period.

3. Non-timely installments are carefully monitored, followed up, and reported to senior management.

4. Where the finance has been forced, the payment is to be made in lump sum or through specific installments, as agreed upon.

Documentation:

A list of documents required for accommodating Demand Finance is given below:

1. Mark-up Agreement (IB-6A)

2. Promissory Note (IB-12)

3. Legal opinion, property documents and non-encumbrance certificate, where applicable including IB-22 / IB-24 / IB-28 / IB-31 etc.

4. Balance Sheet, P&L Accounts for the past three years, for appraisal and analysis.ii) Agriculture Financing:Farmers are eligible for Agricultural Financing for each of the following purposes:

1. Farm Credit

a) Production Finance

Seasonal requirements for crops i.e. purchase of seed, fertilizer, pesticides and weedicides etc., by the farmers.

Short-term finance for costs of sprayers hired farm labour, power, diesel oil for tractor and tube well operation, fuel wood for curing of tobacco, electric charges for tube well operations etc.

b) Development Finance

Fixed investment

Purchases by farmers of tractors implements, tube wells, farm machinery, land improvement, farm powers, construction of cold storage, godown and bins, refrigerator van by farmers. Fixed capital for storage of raw agricultural/Farm produce, purchase of trucks, bull carts, transport machinery, country boats, forklifts, purchase of pick-up and mini trucks for agriculture use, effective microbes technology, construction of laboratory for integrated pest management etc.,

Working capital

Working capital requirement for short term needs for packing, transportation, processing and other short term needs of the farmers.2. Non Farm Credit

MCB provides Non-farm Credit to its customers for financing livestock, dairy, poultry, fisheries, forestry etc. In terms of period of finance, Non-farm Credit divides into the following two categories, viz.

Fixed Investment

i) MCB offer medium and long-term finances facilities for purchase of livestock,

milk processing and chilling plants, motorcycle for milkmen, veterinary clinics, compound feed making industry, poultry farming, dairy farming, marine fisheries, cold storage for fisheries, forestry, apiculture, sericulture, biogas plant, sulphuric gas generator etc.,

Working Capital

ii) Short term finances for the items mentioned above in 2 i. (i.e. purchase of feeds, raising and veterinary expenses, and artificial insemination unit/services, etc).

iii) Consumer Financing:MCB offers the following consumer finance facilities exclusively to its existing account holders.

MCB Savings Instant Financing and MCB Instant Financing

Easy Personal Loans.

Auto Lease Financing Scheme for Individuals

Pyara Ghar

Vision of MCB:

Challenging and Changing the Way you Bank.

Mission of MCB:

MCB Banks team of committed professionals is dedicated to maintaining long term customer relationships through outstanding service and convenience.

Future Objectives:

Following are the main future objective of MCB Bank Ltd.

Maximize use of technology to ensure cost effective operations.

Develop a customer service oriented culture.

Explore new avenue for growth and profitability.

Effectively manage and mitigate all kinds of risks inherent in the banking.

Achieve sustained growth and profitability in all areas of business.

Build and sustain a high performance culture, with a continuous improvement.

Strategic planning:

Following are the strategic planning of the MCB Bank Ltd for the future business.

Facilitate alignment of the vision, mission, corporate objective and with the business goals. Provide strategic solutions to mitigate weak areas and to counter threats to profits. Provide strategic initiatives and solutions for projects, products, policies and procedures. Comprehensive plan for future to ensure sustained growth and profitability.6) Swot Analysis:SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. Following is the SWOT analysis of Muslim Commercial Bank ltd. i) Strength:Strength means the attributes of the person or company that are helpful to achieving the objective(s). Strengths are the factor which arises internally forms the organization and provides benefits to the organization if we adopt these strengths. Following are the Strengths of the Muslim Commercial Bank ltd. Maintaining the healthy correspondentrelationships with foreign banks

Satisfying the Customers by fulfilling their needs and wants.

Holds a sound repute in the financial circle.

Personalized services of the staff to the employees.

Construction of branches in Commercial Area so that the customers can easily approach the bank.

Increase the Bank reputation in the market by fair dealing in all aspects.

Develop the technical managements skills in the employees.

Adopting the team based approach for batter results.

Provide a record business in exports sector.

All of transactions and information regarding customers deposits has been computer base.

Muslim Commercial Bank Ltd. has launched its Mobile ATM Service, which is the Pakistans First Mobile ATM Service.

ii) Weakness:

Weakness mews the attributes of the person or company that are harmful to achieving the objective(s). Weaknesses are the factor which arises internally forms the organization and can be avoided by the organization. Following are the weakness of the Muslim Commercial Bank ltd. No so much advertisement on electronic media has been seen yet.

Low no of employees in branches.

Employees are burdened with over work.

Division of work and description of job is not properly defined to each and every staff member.

Offline status of the branch reduces the customers trust on bank.

iii) Opportunity:Opportunities mean external conditions that are helpful to achieving the objective(s). By availing the opportunism form the external market, the organization can lead the market with flying colors. Following are the Opportunities which are there in the market for the Muslim Commercial Bank ltd.

Extra advertising support will enable MBC to improve their services.

Grow in size also increase the profitability and trust of the customer.

Emphasize on the Information Technology.

Increase the E Banking and educated customer on E-Banking.

iv) Threats:

Threat means the external conditions which could do damage/harm to the objective(s) of the organization. MBC has to keep their eye on the threats available in the market and try to keep proper strategies. Following are the Threats to the Muslim commercial Bank Ltd.

MCB is facing a strong competition by its major competitors; Habib Bank Ltd and Bank Alfalah. Business of these banks is also growing with very high pace.

Weak economic conditions of Pakistan.

Unregistered business concerns.

MCB should enhance its Branch Network, in order to capture the market of different areas.

The SWOT analysis of the bank signifies that its strengths overcome its weaknesses and its opportunities are more than its threats. This is positive sign for any Organization

7) Conclusion: In the light of SWOT analysis and Critical Analysis of the MCB Bank Ltd I want to conclude the following point for the Improvement and success of MCB Bank Ltd.

Continuous Improvement:

MCB Bank Limited should continuously conduct its financial analysis and compare it with their competitors and evaluate their performance with other competitors hence the progress and good will of the organization will increase.

Proper Planning:

MCB Bank Limited has to conduct proper planning for activities; they have to plan the objective of the organization according to the Mission and Vision Statements of the organization.

Advertising Campaigns:

In this fast word where the world has become the Global village no one can deny the importance of advertisement. Most of the organizations are advertising their organization on different media zones. They are getting most of the shares of the market which MCB Bank Ltd is not availing, MCB has to adopt this strategic to get the more and more market shares. This way they can increase their profits and gets the trust of the peoples.

8) Recommendations

From the quantum of the profit and its financial data it can easily judged that after privatization MCB is performing well. Its deposits are growing day-by-day and so is profitability. Following are recommendations for MCB.

Shortage of Staff:

Almost in all branches of MCB Bank Ltd the problem of Shortage of Staff is very common. There are only few employees working on the bank, they are over loaded due to shortage of the staff. One employee of the MCB Bank Limited is working on different seat at a time which creates the stress for the both customer and the employee because customer has to wait more than actual timing so higher management of the MCB Bank Ltd has to hire the well educated and trained staff for their organizations.

Staff Is Not Adequately Trained:

Staff in almost all branches of MCB is not adequately trained. In Most of the branches, old peoples are working who dont have idea about the new technology and hence the efficiency of the organization will reduce and the output also. Higher management has to take step to educated their staff and conduct training program for their old employs so that the can also keep steps with the changing technology.

Incentive to Employees:

Bank should give some more incentive to its employees in order to remove the conflict between lower and higher officers and should try to improve the working condition of the bank.

9) Reference & Sources used

MCB Manuals & Books

http://www.sbp.org.pk http://mcb.com.pk/mcb/about_mcb.asp http://en.wikipedia.org/wiki/Muslim_Commercial_Bankhttp://www.mcb.com.pk/mcb/mission_vision.asphttp://ezinearticles.com/?Banking-Today&id=69113http://en.wikipedia.org/wiki/Mobile_bankinghttp://en.wikipedia.org/wiki/Bankhttp://chestofbooks.com/finance/banking/Elementary-Banking-AIB/The-Functions-Of-Banking.html

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