Internship report on MCB (PIA Society branch) 2013 by Azka Sumbel, IBIT

8/13/2019 Internship report on MCB (PIA Society branch) 2013 by Azka Sumbel, IBIT

1/133


2/133

edicated to my beloved andParents and to my Teachers

the support of whom I am st

this step of my life stairs


3/133

3Internship Report on MCBSubmitted By: Azka Sumbel

ACKNOWLEDGEMENT

To Him belongs the dimension of the Heavens and the earth,

it is He who gives Life and death and He has power overall things. (Al-Quran)

First of all I would like to thanks Allah Almighty who really helps me in everyglitch during the project and empowered me to carry out the task successfully. Allrespect and possible tributes go to my Holy Prophet Mohammad (S.A.W) , who

is forever guidance and knowledge for all human beings on this earth.

I would like to admit that I completed this task due to parents who pray for mysuccess. I feel myself indebted and highly grateful to honorable Head ofDepartment of IBIT , Dr. Mansoor Sarwar .I would like to acknowledge my

Internship Coordinator Professor Fahad Ali . Special thanks go to Professor Shahzad Khan who guided me to do internship in well renowned company to

enhance my skills and abilities. He was always there to guide me whenever I feltstuck off and his encouragement always worked as morale booster for me. I amalso obliged to Professor Amna Arif and Professor Hira Aftab . I have foundthem very helpful while discussing the tricky issues in this dissertation work.

I pay special thanks to Mam Shumaila Ch. (BM) and Mr. Feroze Ali Khan(BOM) at MCB PIA Society branch, without his continuous guidance and moral

support the report would not have been possible. He provided me theopportunity to work into the different departments of bank and all the resourcesI needed.I am obliged to Mr Usman Mahmood, Supervisor , for providing methe opportunity to have an excellent learning experience during my internship.


4/133


Preface

Internship, in fact, for the students of BBIT

hons is a golden chance to develop their

capability and skill of administration and management in the practical environment ofdifferent business organization. In this contest, I selected Muslim Commercial banklimited. This is among the leading domestic financial institution, as it is the one of theoldest commercial banks in Pakistan. Moreover, particularly being the student ofbusiness and information technology, it is necessary for me to get the practicalknowledge of the business processes, IT implementation and financial activities of theorganization.

I worked as an internee in MCB PIA Society branch, Lahore. The main objectives to studyin MCB were:

To get some experience in working with well reputed organization. To gain knowledge about the professional environment of the bank. To know about the technology utilized in the banks. To deal and manage with the situation of stress.

This work is the collection of my observation and experience during the internshipperiod and afterward. The source of my information for the preparation of this reportalso includes the written notes, literature on banking and verbal discussion with officersand my teachers and class mates.

In the preparation of this report, I have received valuable assistance from the staff ofMuslim Commercial Bank limited, PIA Society Lahore. I am thankful to branch manager,operational manager, supervisor and the whole staff for their cooperation.


5/133


Letter of Transmittal

The Director,Institute of Business and Information Technology,University of the Punjab, Lahore.

Subject: Submission of the internship report.

Dear Sir,It is to present you the internship report which is executed at MCB Bank Limited asrequired by the university as a degree requirement for BBIT hons program.This report has been prepared in accordance with the guidelines issued by thedepartment.

It is the result of my first professional experience. The report is a practical application ofwhatever I studied at IBIT, Lahore. In this report, I have covered the introduction ofMCB, Product and services of MCB, detail of my working and learning in retail banking ofMCB and some recommendations.

I have put all my efforts to summarize my knowledge and experience in this report tomake it comprehensive and to meet readers expectations.

Yours sincerely,Azka SumbelRoll No.F10BA106BBIT (Hons.)Institute of Business and Information Technology,University of the Punjab, Lahore.


6/133


Executive Summary

MCB Bank Limited , with more than 60 years of experience as one of the leading banksin Pakistan, was incorporated on July 9 in 1947. Since privatization, MCB's growth hasbeen phenomenal. MCB is reputed as one of the soundest financial institution and asone of the leading banks in Pakistan with a deposit base of PKR. 545 bln (approx.) andtotal assets of PKR 766 bln (approx.) The bank has also been acknowledged thoughprestigious recognition and awards by Euro money, MMT, Asia Money, SAFA (SAARC),The Asset and The Asian Banker.I did my six weeks internship at MCB PIA Society, Wapda Town Lahore , and worked inOperations, Accounts, Remittance, Customer Service department, Insurance and

Investment department, Credit and Advances department and got copious experienceof auditing.Some of the work that I did in these departments included Clearing, Inter City Clearing,Outward Clearing, Returned Check handling, Maintenance and Issuance of checkbook,Demand draft(DD),Pay order(PO), Filling of various forms and slips(Account opening

form ,Investment and insurance form ,Profile changing form ,Automated tellermachine(ATM) dispute form ,DD form, PO form, Debit/Credit card requisition form,Checkbook requisition slips, Account statement requisition form, Deposit slips, Creditcard payment slips), Activity checking and Stop payments and Closing of accounts,

Handling of Zakat exemption applications, Auditing Rectifications, ATM cards Handling,Preparation of Insurance Plans, Lockers handling, Keys rotation handling, Payment ofremittances, Critical analysis of their automated systems(BTS & EOC), start of day (SOD)and end of day (EOD) activities analysis, Analysis of BOM activities by day, weekly,

fortnightly, monthly, semiyearly, yearly wise.MCB working was marvelous but there were some problems in designation of rights atbranch level, in customer call back (CBC) process, virtual banking, training of theemployees, incentive schemes and product innovations. Some of the recommendationsinclude improve SYMBOLS online system, automate account opening process, efficient

the business processes, Systems should be up-to-date, improve customer service,workshops for employees, job rotation, teams work to find innovative products andscholarship programs for employees.

Lastly MCB has seen a rapid growth in its activities by introducing a range of productsand services and showing its presence in the country by opening new branches and in

future should keep this momentum and always strive to become the best.


7/133


Table of Contents

Sr. No TOPIC PageNo.

Dedication 2Acknowledgement 3Preface 4Letter of transmittal 5Executive Summary 6

Chapter 1: OVERVIEW OF THEORGANIZATION IN PAKISTAN1. History of MCB 11

2. About MCB 133. Information about branch 144. Convenience In Every Form 175. Vision 186. Mission 187. Strategic Objectives 188. Growth With Convenience 199. Care With Convenience 1910. Trust With Convenience 19

11. Earn With Convenience 2012. Move With Convenience 2013. Luxury With Convenience 2014. Core Values 2115. Target Market 2216. Market Share 2217. Major Competitors 2218. Products And Services 2219. Functions 2320. Branch Hierarchy 2521. SWOT Analysis 26

CHAPTER 2: INTERNSHIP ACTIVITIES1. MCB Departments 292. Week 1 activities1. Accounts 33


8/133


2. CURRENT ACCOUNT 333. BASIC BANKING ACCOUNT 344. Smart Dollar Account 365. Foreign currency Account 37

6. SMART SAVINGS ACCOUNT 387. PLS SAVINGS 365 398. PLS SAVINGS 365-Gold 409. SAVINGS XTRA 4110. BUSINESS ACCOUNT 4211. TERM DEPOSIT 4312. SPECIAL RUPEE TERM DEPOSIT (STD): 4413. SPECIAL NOTICE DEPOSIT (SND) 4514. Account Opening Documentation Requirement 47

15. Individuals Accounts 4816. Partnership Account 4817. Joint Stock Companies 4818. Clubs, Societies and Associations 4919. Agents Accounts 4920. Trust Accounts 4921. Minor Accounts: (Age below: 18) 5022. Illiterate / Photo/ Disable Persons Accounts 5023. Account opening 57

24. Classification of Accounts 5625. Dormant Accounts 5626. Inoperative Accounts 5727. Unclaimed Deposit Account 5728. Notice to the Holder of Unclaimed Deposits/ Instruments 5729. Reporting Of Unclaimed Deposits 5830. Transfer of Unclaimed Accounts to State Bank of Pakistan 5831. Retention of Documents 5832. Refund Procedure 5833. Account Closure 5934. Clearing 6235. NIFT (NATIONAL INSTITUTE OF FACILITATION TECHNOLOGY) 6336. Inward Clearing 6337. Outward Clearing 6438. Intercity Clearing 68


9/133


39. Check Return Procedure 6840. Overview of checks 6841. Remittances 7442. Demand Draft 75

43. Payment Order 7844. Term Deposit Receipt 7945. Call Deposit Receipt 8146. DIFFERENCE BETWEEN CDR AND TDR 8347. Lockers 8448. Issuance of License 8449. Types of Lockers 8450. Insurance of Lockers 8451. Renewal / Expiry of Lockers 85

52. CREDIT/ ADVANCES 8753. Investment 9254. Self-Experience 9355. Departments in Which Work Has Been Done 93

Chapter 8: SUMMARY AND RECOMMENDATION1. OVERALL SUMMARY 952. BRIEF SUMMARY OF MY WORK 963. Suggestions BBIThons degree program 974. RECOMMENDATIONS FOR MCB BNAK LIMITED: 97

5. Human Resource Issues 976. Behavioral and professional training 987. Management and Strategic Issues 988. Marketing Issues: 999. Information Technology Issues 99

AnnexureGlossary

References


10/133


CHAPTER 1

Overview of Organization


11/133


HISTORY OF BANKING IN PAKISTAN

At the time of independence, commercial banking facilities were provided fairly

well here. There were 487 offices of schedule banks in the territories now constituting

Pakistan. An Expert committee was appointed. The committee recommended that the

reserves bank of India should continue their function in Pakistan until 30 September.

1948, and Pakistan would take over the management of public debt and exchange

control from reserve bank of India on April 1948 and that Indian notes would continue

to be legal tender in Pakistan until 30 September 1948. Moreover the banks includingthose having their registered office in Pakistan transferred them to India in order to

bring a collapse of a new state. By 30 June 1948 the number of the offices of scheduled

banks in Pakistan declined from 487 to only 195.In order to make necessary

arrangement for the assumption of control and expert committee was appointed to

recommend necessary steps, including the required legislation to establish a central

bank for Pakistan. The governor-general of Pakistan Muhammad Ali Jinnah inaugurated

the State Bank of Pakistan order was promulgated on May 12, 1948. The first Pakistaninotes were issued in October 1948 in the State Bank of Pakistan withdrew the reserves

Bank of India notes of the value of Rs. 125.02 crores with the help the Pakistan notes.

History of MCB

MCB Bank Limited formerly known as Muslim Commercial Bank Limited MCB

Bank is not an overnight success story. 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. The bank

was established with a view to provide banking facilities to the business community of

the South Asia.


12/133


MCB Bank Limited formerly known as Muslim Commercial Bank Limited was

incorporated by the Adamjee Group on July 9, 1947 in Kolkata in Bengal, under the

Indian Companies Act, VII of 1913 as a limited company`. But due to changing scenario

of the region, the certificate of incorporation was issued on 17 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. The Bank

transferred its registered/Head office from Dhaka to Karachi on August 23, 1956 through

a special Resolution.

The bank was established with a view to provide banking facilities to the businesscommunity 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 Pakistans 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 nationwidedistribution 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. 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.

About MCB

Over the years MCB has developed strong relationships with its customers by

understanding their needs and treating them with respect, dignity and importance. The


13/133


14/133


CSO MAHJABEEN ALI

CHIEF CASHIER ZAHEER ABBAS

CAHIER ALI AZEEM

ACCOUNT OFFICER MR. HAROON

INVESTMENT OFFICER AHMED RAZA INSURANCE OFFICER TEHSEEN SHAMS

TEA BOY ARFAN AHMED

SWEEPER SHAN MUSTAFA

GENERAL INFORMATION

NUMBER OF ACCOUNTS:

Accounts in this branch of MCB are as follows:

CURRENT ACCOUNT

Total numbers of current accounts are 700.

PLS ACCOUNT

Total numbers of profit and loss accounts are 1100.

REMITTANCE:

Total remittance of this branch is 26.22 million.

RATE OF INTEREST:The rate of interest provided by such bank is minimum 5% and maximum 11%.

FINANCING:

Mainly, the short term financing schemes are being dealt here.

CAPITAL:

Capital of branch is treated in its Head Office.

Total Summary of MCB PIA branch

Branch: 1522-PIA Society Lahore

Currency: PKR Pakistani Rupee

Income: -44,039,743.50


15/133


Expense: 37,730,556.24

Liability: -39,561,912.78

Assets: 89,041,362.38

Total deposits in actual currency: -900,797,172.36

Total Advances in actual currency: 34,213,377.47

Total deposits in base currency: -900,797,172.36

Total Advances in base currency: 34,213,377.47

Net Income: -6,309,187.26


16/133


Convenience in every form

MCB enjoys the unique position of beingthe Bank for Life because of its

commitment to excellence and its constantendeavor to make banking convenient for

everybody. MCB shares the element ofconvenience with water because not onlyis water the basis of life but also takes onthe form and shape of the vessel it is kept

in. MCB too quenches the thirst forconvenience by taking on different formsaccording to the needs and requirements

of the consumer.


17/133


Vision To be the leading financial services

provider, partnering with our customerfor a more prosperous and secure future.

Mission

We are a team of committed professionals,providing innovative and efficient financialsolutions to create and nurture long-term

relationships with our customers. In doing so,we ensure that our shareholders can invest with

confidence in us.

Strategic Objectives

Delivering remarkable returns tostakeholders, sustainable performance,exceeding market and shareholderexpectations.Providing value added services throughoperational expansion, geography andupgraded systems.Building a corporate culture of equalitytrust and team spirit as we remaindedicated to be a socially responsibleorganization.


18/133

1

Growthwith Convenience

By empowering businesses with tailoredsolutions that conveniently meet theirrequirements, MCBs economic vision encompasses growth, prosperity and

financial well-being of the people.

Care with Convenience

At MCB, we are always eager and willingto help people who are less fortunate

and people who are in any sort ofdistress. Our efforts are aimed at

enriching their lives so that they canhelp themselves to live a life of

convenience and ease.

Trustwith Convenience

We know that in these tough economictimes, people need a reliable source to act as

their partner for better investments andimproved results. Our vast portfolio of

convenient offerings and our image as atrustworthy Bank assures local investors to

have faith in the economy and makes it easierfor foreign investors to invest in Pakistan.


19/133


Earn with Convenience

MCB is a firm believer in the age-oldwisdom of a rupee saved is a rupeeearned. We understand that people

want to save and earn on their savingswhich is why we offer a plethora of

convenient solutions for savings so thatpeople can enjoy their today by

overcoming their worries for tomorrow.

Movewith Convenience

With over 1100 branches all over Pakistanand virtual presence through various

affiliations, MCB offers a convenient, fastand secure way of money transfer from

anywhere in the world to Pakistan and allover Pakistan.

Luxurywith Convenience

It is always nice to feel and see that youare being treated in a special manner. By

offering convenient solutions forunconventional needs, MCB treats all its

customers as royalty. Our bankingservices are centered on offering a sense

of luxury with utmost convenience.


20/133


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.

Innovation

We encourage and reward people who challenge the status quo

and think beyond the boundaries of the conventional. Our teamswork together for the smooth and efficient implementation of

ideas and initiatives.

Excellence

We take personal responsibility for our role as leaders in pursuit

of excellence. We are a performance driven, result oriented

organization where merit is the only criterion for reward.

Customer CentricityOur 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.

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.


21/133


TARGET MARKET

MCB has no target market in the whole country. Its target market varies in different

cities in large cities like Karachi, Lahore, and Faisalabad where there is more corporate

clients. And in small cities where corporate boniness in less than target is individual

consumes. But in general MCB putting a great emphasis on customer satisfaction never

refuses or overlook any of its emphasis.

MARKET SHARE

MCB has achieved the market share of 15-18% among 35 national banks and s

contumacy improving it.

MAJOR COMPETITORS

MCB is leading all the national banks. Habib Bank and Allied Bank are its compatriots

which are still many steps behind MCB. They are contumely trying to grasp the position

of MCB but MCB has been successful every time in proving him best bank.

PRODUCT AND SERVICES

Products:

Deposits:

Fixed deposits

Savings deposits

Foreign accounts

Lending:

Personal loans

Travelers checks

Bill payment services

Smartcard/debit cards and visa cards

Agricultural financing scheme


22/133


Services:

Other services:

Lockers

Cash management services

Trade finance services

Letters of credit

Private placements

Loan syndication

Corporate advisory services

Internet banking

FUNCTIONSBasically there are two basic categories on the basis of functioning of MCB Bank, which

are

Principal function

Auxili ary function

PRINCIPAL FUNCTION

The principal functions are basically the core functions of the bank that is their lifeblood

of bank, which are

Acceptance of deposits

Financing Deposits There are basically two types of deposits and their nature vary due to time factor, which

are

Demand deposits

Current deposits

Saving deposits


23/133


Time deposits:

Notice time deposits

Fixed term depositsFINANCING

The second important function of the MCB is to provide finances to the individuals and

businesses against securities at a certain fixed rate of interest. As the different types of

accounts in accepting deposits MCB also have the different types of account in which it

provide the loan to its customers.

Following are the different types of the accounts in which loan is made.

Demand Finances:

Running Finances:

Cash Finances:

Fixed Asset Financing:

Overdraft

AUXILIARY FUNCTION

These are the functions that have the secondary position in the bank point of view.

These functions are cause to attract the customer. Banks performs this kind of functions

as per demand on the extra charges.

Collection of Cheques

Locker

Collection of Dividends:

Purchase and Sale of Securities:

Transfer of Funds:

Issue of Traveler's Cheques:

DISCOUNTING BILLS OF EXCHANGE


24/133


BRANCH HIERARCHY

OFFICES OR FIELD OFFICES

Offices means the Head office which is situated in MCB House located at Sharea Ghous-ul-Azam,

commonly known as Jail Road. Field offices mean the Branches. MCB has the fourth largest

domestic branch network in Pakistan. The bank has a network of over 1000 branches in Pakistan

and 6 branches worldwide in 6 countries.


25/133


SWOT ANALYSIS

STRENGTHS

MCB is Successive and Market oriented.

MCB investing huge sums on HR development and training.

Customer default rate is lower as compared to other banks.

MCB has the largest ATM network in the country.

Meeting the challenges of latest Technology by introducing Smart card

remit express, mobile banking etc.

One of the major strengths of MCB is that it has very stable deposit base.

MCB is largest private bank in Pakistan with around 1000 branches, which

cover almost every part of Pakistan.

The bank enjoys competitive advantage over other banks in Pakistan.

The bank enjoys competitive profitability in the industry.

MCB has captured majority of potential customers in Pakistan.

MCB has the accounts of big organizations like OGDCL, PTCL, EFU, PTC etc.

WEAKNESSES:

Low motivational level; non-aggressive marketing.

Employees dissatisfaction due to ill treatment and improper reward

system.

Interest rate is very meager.

It is not having greater no. of branches abroad.

Though ATM network is the largest in Pakistan, still some potential areas

dont have the ATM.

Poor IT implementation.

Some management positrons needed are not professional.


26/133


OPPORTUNITIES:

Leasing sector is growing in Pakistan for the last two to three years which

provides opportunity to MCB to go ahead in this area as well.

MCB is providing Consumer Finances at comparatively lower rates which

paves a way to grab more customers

Financing to small/medium cottage industries will definitely increase its

advances and profitability as well.

THREATS:

Other private commercial bank with sound profitability is also a threat to

MCB e.g. UBL, Alfalah, HBL etc.

For the last of many years, Pakistan is facing economic and political

instability which is a big threat.

Foreign banks are flourishing in field of consumer financing.

People dont prefer banking culture. They mostly prefer cash transactions


27/133


CHAPTER # 2INTERNSHIP ACTIVITIES


28/133


On my very first day, I received a warmed welcome from Madam Shumaila Gul, Branch

Manager (BM) at MCB PIA Society branch. She introduced me to Mam Mehjabeen,

Customer Relationship Officer (CSO). She introduced me with all the employees and

elegantly mandates me about the branch. After that Mr. Usman Mahmood, Supervisor,

gave me the orientation and told about the following departments in the MCB PIA

Society branch.

There are the few major departments in every branch of MCB bank. These are given

below

Cash department

Deposit department

Advances & credit department

Foreign exchange department

Technology department (new addition in order to cope with the growing needs

of day to day technology requirements)

CASH DEPARTMENT

This is very important department because cash is the most liquid asset and mostly

frauds are made in this department, therefore, extra care is taken in this department

and unauthorized persons are not allowed to enter the area. All the books maintained in

this department are checked by an officer.

The consolidated figure of receipt and payment of cash is entered in the cash balance

book and drawn closing balance of cash.

Opening Balance + Receipts - Payments = closing Balance.

DEPOSIT DEPARTMENT

MCB Bank deals in money and they are merely mobilizing funds within the economy.

They borrow from one person and lend to another, the difference between the rate of

borrowing lending forms their spread or gross profit. Therefore we can rightly state that


29/133


deposits are the blood of the MCB bank which causes the body of an institution to get to

work. These deposits are liability of the bank so from point of view of bank we can refer

to them as liabilities.

TYPES OF DEPOSITS

There are two types of deposits at MCB bank.

Time deposits / liabilities

Demand deposits / liabilities

And on the basis of the cost to acquire these funds, a deposit can be classified as anyone

of following four

1. High Cost

2. Medium Cost

3. Low Cost

4. No Cost.

CLEARING DEPARTMENT

A clearing house is a place where representative of all banks of the city get together and

settle the receipts and payment of cheques drawn on each other. As the collectingbanker runs certain risks in receipt of their ownership the law has provided certain

protections to the banks. The Negotiable Instrument Act, 1881, lays down that drawer

or holder of a cheque or draft may cross the instrument generally or specially. It further

lies down that a crossed cheque can only be paid to a banker, who collects it for a

customer in good faith and without negligence.

FUNCTIONS OF CLEARING DEPARTMENT:1. To accept Transfer, Transfer delivery, clearing and collection cheques from

the customers of the branch and to arrange for their collection.


30/133


2. To arrange the payment of cheques drawn on the branch and given for collection

to any other branch on MCB or any other members or sub member of the local

clearing house.

3. To collect amount of cheques drawn on members, sub-member of local clearing

house, sent for collection by MCB Branches, not represented at the local clearing

house.

LEDGERS OF DEPOSIT DEPARTMENT

The following types of ledgers are concerned with deposit departments:

1. Saving Ledgers

2. Current Ledgers

3. Profit & Loss Sharing Ledgers

4. Fix Deposit Register

5. Call deposit register

6. Cumulative deposit certificate register

7. Cash book

8. Daily profit and summary book

9. Officer specimen signature book

10. Voucher register

However, in MCB computerized branches all these ledgers are no more there but only

day books are maintained. The rest of the work is done on cc computers.

ADVANCES DEPARTMENT

Advances are the most important source of earning for the banks. MCB is also givingfull attention towards this aspect and it is also obvious from the growing portfolio of

advances and from very low delinquency rate. The credit portfolio of this institution is in

a very much better shape than other financial institutions of Pakistan and the


31/133


credit goes to the management and the staff who are concerned about the quantity

and quality as well.

1. Loans

2. Cash Credits

3. Overdraft

TECHNOLOGY DEPARTMENT

Technological advancements are also affecting the banking industry. The foreign banks

have a competitive edge over all local banks in their technologies' advancements and

automated systems. Local banks have also realized the gravity oil this situation and are

striving to add computerized systems to their branches MCB is ahead of all other local

banks in this field and now it is in a position to even compete with foreign banks. There

are more than 1045 branches of MCB all over Pakistan and out of these more than 300

branches are fully computerized Almost all .the branches of big cities are computerized;

therefore, the need for a technology department at each branch is growing. Now a day,

a computer division is working in each city to provide service to and the branches of that

area.MCB has also introduced the now concept of online banking. There are now more than

250 branches linked through this system and they can transact with each other directly

using computer systems at their own branches. Now customers do not have to wait long

for their transactions and can operate their account through all the online branches.


32/133


This section is based on my observation and experience and rotation during my

internship at the PIA Society Branch of MCB Limited. Following are some of my

jobs that I performed or assisted in performing or overlooked in the various

departments.

In the 1 st week of my internship I learnt about the products and services of

MCB, got briefing on account and account opening procedure, classification of

accounts, issues related accounts e.g. zakat, withholding tax. Got briefing about

Insurance policies and plans and prepared reports of BOM daily, weekly,

fortnightly, monthly, yearly activities.

9 July, 2013-- Mr. Haroon, paying his services in accounts department on contract at

MCB PIA Society branch, updated my knowledge about MCB products and Services and

illustrates me about the accounts, accounts types and explained me the whole account

opening process in a well manner. The detail of all these things is given below:

ACCOUNTS Following are the types of account in MCB

CURRENT ACCOUNT

No restriction on Withdrawals and frequency of transactions

No profit is paid on Current Accounts

Service Charges are recovered as specified in the Schedule of Charges

No Zakat is to be deducted on Current Accounts.

Free of cost account statements are dispatched on half yearly basis

within one week after the mid-year closing. If any customer wishes to


33/133


receive the account statement other than the half yearly cycle, charges

will be recovered as per the Schedule of Bank Charges RS.50

Account opening with Rs.1000

Minimum maintain balance Rs.10000 if less then minimum limit Rs.50

will deduct

Eligibility

Individuals (Single/Joint)

Firms (Sole Proprietor Partnership)

Companies (Public and Private Limited), Trust/ Clubs/ Societies and

Associations are eligible to open Current Accounts.

BASIC BANKING ACCOUNT

To provide banking facilities to low income people without the restriction to

maintain minimum balance requirement

Features

The account is opened with a minimum initial deposit of Rs.1000.

BBA is a Rupee Current Account (non-remunerative account).


34/133


There is no minimum balance requirement, and hence no monthly

account maintenance charges apply.

In case where balance in BBA remains ZERO for a continuous 06

month period, the account will be closed automatically.

Each month the account holder is allowed 02 deposits transactions

(either cash or clearing) and 02 withdrawals (cash or clearing). All

customer initiated transactions over and above this limit will be charged

Rs. 25 per transaction

All ATM transactions conducted through electronic channels (i.e. ATM,

Debit Card POS machine, Virtual Banking) are exempted of transaction

fee. Hence the customer is allowed unlimited transactions through these

channels.

ATM cards are issued to all BBA account holders in on-line branches.

Card issuance and annual fee will be recovered as per Schedule of Bank

Charges.

ATM transaction charges on balance enquiry / mini statement and on

usage of non- MCB ATMs will apply as per Schedule of Bank Charges.

Statement of account to be mailed as per existing policy of the Bank.

Charges for duplicate statement will apply as per Schedule of Bank

Charges.

Eligibility

Low income individuals are eligible for opening BBA with single or joint

account type.

Existing individual account holders can also convert their regular Savings

or current account into Basic Banking Account.

This facility is not offered to non-individuals


35/133


5.1.2 Smart Dollar Account

The minimum amount to be placed under this product is USD 100, 00.

Complimentary Pak Rupee account without minimum balance

requirement.

Free Lockers Facility

Free of Charge Bank Statement & Smart Cards

Discount (Up to 50%) on processing charges of Personal Loans & Car

Financing.

Preferential rates on consumer loans.

Waiver on collection charges for crediting the amount in Foreign

Currency.

No Charges on Standing Instructions

In case of any change in the above features, prescribed procedure by

RBG will be applicable.

Eligibility

Individuals (Single & Joint), Firms, Companies.

Foreign currency Account

Enjoy the confidence of operating an international account, locally.


36/133


MCB Foreign Currency Account offers you the option of earning attractive

returns on your Foreign Currency Investment.

KEY POINTS

Open your account in US Dollar, UK Pound Sterling, or Euro.

Open for as little as US$ 500 or equivalent.

Unlimited transactions at your branch.

Free Foreign Currency cash deposit and withdrawal facility.

Rate of Return directly linked with international market

Profit paid into your account every six months.

Foreign Remittances facility available.

Countrywide network of Foreign Currency Branches.

Cash withdrawal in PKR equivalent

Network of over a thousand branches, and hundreds of online branches,

at convenient locations.

General Inquiry e.g. ATM Locations, Product Information etc.

Financial Services e.g. Account Balance Inquiry, Debit Card, Transaction

detail, bill payments etc.

Non-financial Services e.g. Internet Banking activation etc.

Bank Account Statement and Cheque Book Request.

Eligibility

Only Individuals (Single and Joint) are eligible to open PLS Savings

Accounts.

5.1.5 SMART SAVINGS ACCOUNT

Offers the opportunity to small and medium sized depositors

(individuals only) to earn attractive returns on their deposits. Cash

withdrawals takes place only through ATM/POS.


37/133


Individuals can open an account with a minimum initial deposit of Rs.

1,000.

Profit is calculated on a monthly basis and credited to the account

after each calendar quarter

All ATM transactions conducted through electronic channels (i.e. ATM,

Debit Card POS machine, Virtual Banking) are exempted of transaction

fees. The customer is allowed unlimited transactions up to available

balance in the account through these channels.

The profit is calculated only on minimum deposit balance between Rs.

10,000/- and Rs. 300,000/- during a month, irrespective of the balance

available in the account (as per prescribed slabs). This range can be

changed by the Bank any time without giving prior notice to the

customer (as and when required).

Profit is calculated monthly, based on the minimum balance of the

account during the month. In case minimum balance exceeds the

ceiling of Rs. 300,000/- in a month, profit would only be paid on Rs.

300,000/-

MCB Smart Savings account can be merged with the regular PLS

Savings account any time by giving 3 months notice to the customers

at the discretion of the Bank.

The profit rates are estimated/provisional and subject to change any

time at the discretion of the Bank.

Service charges would be applicable as per Bank policy if the balance

goes down below the prescribed minimum balance. Cheque book would not be issued to the account holder. ATM Card

would be issued to the customer for cash withdrawals.

A customer can open only one MCB Smart Savings Account in the

Bank, in case a customer is found to have more than one Smart


38/133


Savings Account, the Bank reserves the right not to give the profit or

recover profit if already paid to the customer on their account/s.

Zakat is deducted as per the policy. Withholding Tax is also deducted

from profit (where applicable) as per Income Tax Laws

RATES

Up to RS.199, 999 5%

Rs.200, 000 299,999 7%

More than Rs.300, 000 5%

Profit Calculation:

Profit will be calculated on a monthly basis, based on the minimum balance

maintained by the customer during that month.

Eligibility

Only Individuals (Single or Joint) are eligible to open PLS Smart

Savings Account.

Non-Individuals like Proprietors Company, Partnership, Trading,

Collection accounts etc. are not eligible.

PLS SAVINGS 365

PLS Savings 365 also falls under the category of Savings Deposit Scheme.

It is a checking account and there is no restriction on number of

withdrawals and deposits transactions.

Account is opened with minimum deposit of Rs.300,000/-

Profit is calculated on daily product basis on the balance of Rs.300,

000/- and above. However, if balances in the account fall below

Rs.300, 000/- on any day, the product will be considered as well and

the profit will be paid as per the rates notified by the Bank on half

yearly basis.


39/133


All other terms and conditions including rates of profit, Zakat and

Withholding tax applicable to PLS Savings Bank Accounts are

applicable .

Eligibility

All types of customers are allowed to open PLS- 365 accounts except

Development Financial Institution.

PLS SAVINGS 365-Gold

Offered to Corporate Groups, Multinational Companies, and Government andAutonomous bodies.

Calculation of Profit is made on daily product basis at variable rates

according to Deposit Slab Range at declared rates on Half Yearly

basis.

There is no limitation on number of withdrawals and amount of

withdrawals.

The account requires a minimum deposit of Rs. 500,000 or more inorder to get attractive profits. In case, account holder is not

maintaining a minimum deposit of Rs. 500,000 in the account, the

profit is paid at the prevailing Savings Rate.

Service charges would be applicable as per Bank Policy if the balance

goes below the prescribed minimum monthly average balance.

All other terms and conditions including rates of profit, Zakat andWithholding Tax applicable to PLS Savings Bank Accounts are

applicable.

Rates

Less than 10 Million 5%


40/133


Rs.10 Million to less than 25 Million 6%

Rs.25 Million to less than 50 Million 6.5

Rs.50 Million to less than 100 Million 7%

Rs.100 Million to less than 250 Million 7.5%

Rs.250 Million to less than Rs.500 Million 8%

Rs.500 Million and above 8.25%

Eligibility

Individuals and institutions can open the account.

SAVINGS XTRA

Grow with MCB Xtra by saving more and earning greater profit.

MCB Savings Xtra Account offers you a wide range of attractive profit rates.

KEY POINTS

Initial balance for account opening required Rs.1000

Minimum balance maintain limit Rs.100000

The higher your balance, the higher your profit.

Now avail attractive rates up to 8.5%.*

Profit calculated on monthly basis.

Profit paid into your account semi-annually.


41/133


No joining fee on Debit/ ATM Card.

50% discount on lockers.

Cash deposit and withdrawal facility at hundreds of branches

nationwide.

Unlimited number of ATM withdrawal transactions.

3 free withdrawal transactions through the branch every month.

BUSINESS ACCOUNT MCB Business Account lets you build your business through the accrued savings

from discounted transaction fees, and more.

KEY POINTS

Higher the balance the higher the number of free transactions.

Open a Business Account with Rs.50, 000 only.

Unlimited free cash deposit and withdrawal facility at hundreds of

branches nationwide.

FREE SERVICES

When you maintain average monthly balance of Rs.100, 000 or above

Demand Drafts/Pay Orders.

Cancellation for Demand Drafts/Pay Orders.

Cheque Book.

International ATM Gold Card.

TERM DEPOSITSPECIAL RUPEE TERM DEPOSIT (STD):

The Special Rupee Term Deposit is governed under the PLS rules, but offers the

depositor a stable rate of return for a fixed maturity. It is a mandatory


42/133


requirement for booking a Term Deposit to have a checking account

(Current/Savings) in the Bank.

Product is available in the following tenors:

3 months, 6 months, 1 year, 3 years & 5 years

The minimum amount to be placed under this scheme is Rs.1000, 000/-

(amounts can be booked in multiples of Rs.1000).

Each tenor is divided into 3 categories based on the deposit amount.

Rs.1,000,000 to less than Rs.10,000,000

Rs.10,000,000 to less than Rs.25,000,000

Rs.25,000,000 and above

Zakat

Zakat is deducted as per the rules of Zakat & Ushr Committee (as advised and

amended

from time to time)

Withholding Tax

Withholding Tax, where applicable shall be deducted from the profit amount, as

per Income Tax Laws in force at the time of profit payment.

This deposit can be used as a security / collateral and the depositor can avail up

to 75% of the principal amount upfront. The depositor also has the option of

increasing the financing limit up to 90% of the principal amount, upon obtaining

the necessary approvals from the relevant authority. The tenor of the financing

facility should be within the maturity date of the deposit.

In case of premature encashment, the depositor will bear the tax expense


43/133


Profit payment frequency

Profit on the special TD is paid on the date of maturity of deposit for 3 and 6

months tenor. Deposits booked for 1, 3 and 5 years tenor is paid profit on a

quarterly basis. Hence the depositor gets the opportunity of investing for a long

term without compromising on cash flows.

Payment of profit:

Profit amount will be credited into the depositors linked/ specified

current or Savings account.

Cash payment of profit amount will not be allowed.

Branch is required to maintain maturity date and profit payment

dates for each account so that there is no delay in payment of

profit to the depositor .

Eligibility

(Existing Account Holders) Individuals, Firms and Companies

SPECIAL NOTICE DEPOSIT (SND)

SND is issued for 07 and 30 days.

07 days Notice Deposit:

Issued for 07 days only and if enchased before 07 days is not eligible for

profit/interest.

30 days Notice Deposit:

Issued for 30 days and enchased after seven days is eligible for Profit/Interest

payable for 07 Days Notice Deposits.

Zakat

Zakat will be deducted as per Zakat rules as advised and amended from time to

time. (Applicable only on PAK Rupees)

Withholding Tax


44/133


Withholding Tax, where applicable will be deducted from the Profit/interest

amount, as per Income Tax Laws in force at the time of profit/interest payment.

These deposits are also received in multiple of Rs. 1000/-

If a depositor withdraws deposit on a date prior to the date of declaration of

profit rates, the profit due can be paid at the rate of profit declared for the last

half year.

This, however, shall be a provisional payment with the prior approval of Regional

Manager. If the rate declared for said half year is more than what was paid to

such deposit holders then the difference shall be paid through Payment Order. In

case rate of profit announced on Special Notice Deposit is less, then customer

should pay the difference. It will be appropriate if an undertaking from the

customer is taken in this respect.

The return on Foreign Currency SND is paid on maturity or as prescribed by the

Bank or SBP from time to time.

Eligibility

Existing Account Holders (Individuals, Firms and Companies)

SMART FOREIGN CURRENCY FIXED DEPOSITS

The minimum amount to be placed under this product is USD $

10,000.

Interest rates are offered based on the amount of deposit.

Free Lockers Facility

Free of Charge Bank Statement & Smart Cards

Discount (Up to 50%) on processing charges of Personal Loans & Car

Financing.


45/133


Preferential rates on consumer loans.

Interest on the smart foreign currency fixed deposits is paid on the

date of maturity of deposit for 3 and 6 months tenor. Deposits

booked for 1 year is paid interest on a half yearly basis.

Cash payment of Interest amount is not allowed.

Minimum retention period is 01 month, irrespective of the tenor for

which the deposit is booked. In case depositor wishes to encash the

deposit before completion of one month, only principal amount will

be paid to the customer. If customer wishes to encash the deposit

after one month but before maturity, the branch will pay interest at

the Savings

Rate for the number of days completed .

o In case of any change in the above features, prescribed

procedure by RBG will be applicable.

Account Opening Documentation Requirement

The details of Account Opening Application, Specimen Signature Cards and other

Documents to be obtained for different types of accounts are as follows:

Individuals Accounts

1. Application for Opening Account (SF-1AA).

2. Specimen Signature Card (SF-6).

3. Attested photocopy of Computerized National Identity Card (CNIC)

or Passport. It is a mandatory requirement to verify the CNIC of the

customer before opening the accounts, from NADRA Online system-

VERISYS


46/133


4. In case of a salaried person, attested copy of his/her service card or

any other acceptable evidence of service, including but not limited to

a certificate from the employer.

5. In case of illiterate person, a passport size photograph of the new

account holder besides taking left & right thumb impressions on the

Account Opening Form & Specimen Signature Card

6. In case CNIC does not contain a photograph, Banks may allow the

said customer to open the account, subject to provision of the

following documents:

7. A copy of the photograph duly attested by gazette officer/Nazim.

8. A copy of CNIC without photograph duly attested by the same

person who has attested the photograph as per above.

9. A confirmation in writing to the effect that they have no other

document bearing their photograph.

10. Moreover, the particulars/CNIC of such persons must be confirmed

from NADRA in writing or through its VERYSES system .

Partnership Account

1. Application for Opening Account (SF-1AA).

2. Specimen Signature Card (SF-6).

3. Attested photocopies of Computerized National Identity Card (CNIC)

of all partners.

4. Attested copy of Partnership Deed or Letter of Partnership (CF -

13), in lieu of the partnership deed, if not available) duly signed by all

partners of the firm.


47/133


5. Attested copy of Registration Certificate with Registrar of Firms. In

case the partnership is unregistered, this fact should be clearly

mentioned on the Account Opening Form.

6. Authority letter in original, in favor of the person authorized to

operate on the account of the firm.

Joint Stock Companies

Copies of the following documents duly certified by the authorized officer of the:

1. Resolution of Board of Directors for opening of account specifying

the person(s) authorized to operate the company account.

2. Memorandum and Articles of Association.

3. Certificate of Incorporation.

4. Certificate of Commencement of Business.

5. Attested photocopies of Computerized National Identity Card (CNIC)

of all the directors.

Clubs, Societies and Associations

Certified copies of:

1. Certificate of Registration issued by the Registrar of Cooperative

Societies/ Registration Authority.

2. Bye-Laws/ Memorandum and Articles of Association of the Society

containing official seal of the Registration Authority.

3. Permission of the registration authority for opening of Account in

the name of Association as required under section 37 (d) of Co-

operative Societies Act, 1925.


48/133


4. List of members of the Managing Committee duly certified by the

Registrar of Societies.

5. Resolution duly passed by the members of Managing Committee in

their meeting regarding opening and operation of account in the

name of said Society. It must be ensured that the mandate for

operation of Account given in the Resolution is not in violation of the

provision of Bye-Laws/ Memorandum and Articles of Association.

6. Attested copies of CNIC of the authorized officials/ persons.

Agents Accounts

1. Certified copy of Power of Attorney

2. Attested photocopy of Computerized National Identity Card (CNIC)

of the agent.

Trust Accounts

1. Attested copy of Certificate of Registration

2. Resolution duly passed by the Trustees regarding opening and

operation of Account in the Bank in the name of said Trust Deed.

3. Attested copies of CNIC of all the trustees.

4. Certified copies of Letter of Administration/ Instrument of Trust.

Minor Accounts: (Age below: 18)

A Minor is a person who has not attained the age of 18 years, if the Court

appoints guardian of his/her person or property, then the period of his

minority extends to the age of 21.

1. An account in the name of minor is allowed to open by his guardian,

preferably jointly in the name of guardian / Minor or Minors,

payable to either or survivor opener of the Account.


49/133


2. Title of Account is on the Minors Name (As per Form B) &word

Minor be added to the Title of Account.

3. In the Account Opening Application, the particulars of the Guardian

will be filled out in the column of Personal Information.

4. Attested copy of Computerized National Identity Card (CNIC) of the

Guardian.

5. Attested photocopy of Form-B of Minor.

Illiterate / Photo/ Disable Persons Accounts

1. Attested photocopy of Computerized National Identity Cards (CNIC).

2. Two Attested Photographs. (One photograph shall be pasted on the

Account Opening Form and other will be pasted on Specimen

Signature Card.

3. Left thumb impression (Right thumb impression in case of female) on

the account opening application & Specimen Signature Card (SSC)

Account opening

Client/Account Opening Process Steps

1. Customer comes into the branch and requests for opening an account.

2. Customer Services Officer (CSO): delivers the Account Opening Application along

with the terms and Conditions (AT&C) and relevant documents to the customer.

3. Customer: receives the Account Opening Form (AOF) from CSO and submits duly

completed AOF and relevant documents to the CSO.

4. CSO: checks that all the fields in the Account Opening Form have been duly filled,

and the relevant account documentation required from the customer depending

on the type of account are completed and attached.


50/133


Account Opening Form (AOF)

Specimen Signature Card (SSC)

Account Terms & Conditions acknowledgement

Attested copy of CNIC

Copy of employment or student Card & other verification

documents as required on case-to-case basis.

Obtain customers signatures on the AOF and SS Card (in person). Moreover one

signature card will be used to capture per signature of the client (In case of Joint

Account Holders use additional signature card). Subsequently takes the form to

the Relationship and Operations Manager for Verification and authorization.

5. Operations Manager/ Account Maintenance Officer (AMO):

Verifies introducers signature from Branch Teller Module > Transactions >

Non- Financial Transactions > Customer Signatory (Screen # BT44).

Sign-off and affix stamp on the Account Application.

Forwards AOF & Client Profile Form to Relationship

Manager.

Relationship/ Branch Manager

Interviews the customer.

Completes and sign off Know Your Customer (KYC)/

Client Profile Form.

Returns the same to the CSO for further processing.

6. Customer Services Officer (CSO):

Selects SYMBOLS Branch Teller Module > Transaction > Non-Financial

Transaction > Client Definition (Screen # BT41) to create a client.


51/133


Insert Client Short Name. This is used as the default Title of Account

whenever an account is opened.

Input Client full Name. Pop-up box will appear on the screen: Input

or select appropriate ID Type & insert CNIC number & press OK. (Box

will close automatically)

Insert Country Code, State, Country of Citizen, Country of Risk.

In the next section of the same screen, insert Client Indicator as N

Normal, S Staff and/or V VIP Account.

Input address as written in Account Opening Application- SF-1AA.

Select Account Executive & Client Type then press F-10 or click save

icon available on Tool Bar.

System generates the client number and Pop-up box appear on the screen with

the following message:

SUCCESSFULLY OPENED 09 DIGIT CLIENT NO xxxxxxxxx

CSO notes down the client number on the account opening form.

In case of joint account holders, separate client numbers will be given to each

client.

Account Opening:

Uses SYMBOLS BT Module > Transaction > Non-Financial Transaction > AccountOpening > select type of account Current or PLS (Screen # BT42) and for Term

Deposit (Screen # BT422).

Input Account Type, insert Client Number and press enter.


52/133


Client information will be retrieved on the screen:

Service Charges:

Service Charges TAB shows following two charges attached with the account.

SVC- Service Charges Current

SVP- Service Charges PLS

ZAK- Zakat Service Charge

Service Charges (SVC & SVP) are not link with the exempted accounts. (The

above exemption would be applicable only on those accounts where account

holders have provided relevant documentary evidence to the branch) Zakat

Deduction service charge type (ZAK) is only attached with the accounts where

Zakat Declaration Form is not submitted by the customer (Only for Muslims).

Zakat deduction is not applicable on Non-Muslims.

Select ZAK as Type, ZK as frequency & press enter Next Charge Date by default

appears as for the next year. For example: If account opening date is 07th

November, 2006 than Next Charge date should be 07th November, 2007.

Note: ZK is the auto frequency type for Zakat Deduction. System generates the

account number:

CSO note down Client &/or Account Number on the Account

Opening Application and Deposit slip.

Provides the initial Cash Deposit slip to the customer.

Forwards the Account Opening Form, relevant documents, cheque

book requisition & ATM Request to the Branch Operations for

further processing.

8. Customer: Deposit cash in the account & obtains the receipt from the teller

and leaves the branch.

9. Operations Manager:


53/133


Admits customers signature, affix stamp & sign -off the Application/ SS Card.

Account Maintenance Officer: Verifies customer data (inserted in BT by CSO)

with the Account Opening

Application & other relevant documents.

STEP 1

AMO scans customers signature in the Branch Teller Module (BT) > Transactions

> Non-Financial Transactions > Customer Signatory > (Screen # BT45)

Input or Select Client Number, press enter customer Name will appear on the

screen, Input Name of Signatory & Description

System shows message at the bottom Scanning to SYMBOLS

Pop- up box appears on the screen and shows message Loading

image. Press Ok and then Click Save icon or press F10.

Popup appear as Transaction completed: Records applied and

saved.

STEP 02

Select Branch Teller Module >> Transactions >> Non-Financial Transactions >>

Account Signatory (Screen # BT 44). Enter Account number, press enter and save.

Keep Specimen Signature Cards (SSC) in fire proof cabinets.

Forwards Account Opening Application along with the relevant

documents to the Centralized Operations (in a sealed envelope via

courier) for insertion of Client information in Kernel Module

(Financial Management), issuance & dispatch of Thank You Letter to

the New Customer and introducers. Also enclose covering note

which contains the total number of forms in the envelope.

10. Central Processing Division (CPD): performs the following functions:

Selects Kernel Module > Static > Client Information > Client (Screen #

FM144) and completes client opening screen # 144 in Kernel Module

(Financial Management).


54/133


Dispatches Thank You Letter to the customer and introducer.

After three working days, returns account opening application,

relevant documents, copy of Thank You Letter, Account Details

Report & Covering Letter to the branch for their record. Also enclose

undelivered Thank You Letters, if there are any.

11. Operations Manager/ Account Maintenance Officer:

Receives account opening applications from CPD counts the total number of

forms and tallies the number mentioned on the covering letter. After

verification branch forwards acknowledgement to CPD.

Keep Account Opening Forms along with the relevant documents in

the Fire Proof Cabinets or Vault for record.

Keep Signature Cards in the Fire Proof Cabinets in a sequential order.

After this, Mr. Tehseen briefed me about the insurance plans and policies and also

discussed the related critical issues about it.

INSURANCE Insurance plan

MCB has the alliance with the 5 companies which deals with the insurance.

1. ADAM (sister concern of MCB-owned by Mansha Group)

2. EFU (eastern federal union)

3. ALICO (American life insurance company)

4. JLI (Jubilee life insurance)

5. Islam /Pak Qatar family TakafulEFU, ALICO, JLI are the multinational companies. Islam/Qatar family insurance is rib bah

free. SHARIAH board is monitoring its operations. Chairman of this board MUFTI TAQI

USMANI assure the public that funding will be as per Islamic rules.


55/133


10 July, 2013-- Mr. Haroon about the remaining things related to Accounts. I got briefing

on classification of accounts and handling of these accounts. The detail explanation of it

is described below:

CLASSIFICATION OF ACCOUNTS

Dormant Accounts

Checking accounts are classified as dormant accounts on the following

conditions:

Current accounts not operated for 12 months and Savings

accounts not operated for one year shall be classified as dormant

accounts according to the new circular of august 2013..Half yearly profit shall continue to be applied as usual on Savings

account only.

Inoperative Accounts

Current Accounts not operated for 2 years and Savings accounts

not operated for 3 years shall be classified as Inoperative

accounts

Half yearly profit shall continue to be applied as usual.

Unclaimed Deposit Account

If a Current & Savings Accounts remains Inoperative for 08 & 07 years

respectively will be classified as Unclaimed Deposit Account. In addition to this,

Bank Drafts, Government Drafts, Payment Orders, Mail Transfers, Fixed/Term

Deposits etc. remains outstanding for 10 years from the date of issuance will be

classified as Unclaimed Accounts.


56/133


Banking Companies Ordinance 1962 under section 31 clearly defines that Banksare required to transfer the Unclaimed Deposits to State Bank of Pakistan (SBP)on the completion of a period of Ten (10) years without any delay.

All unclaimed deposits including time deposit or any other kind ofdeposits or financial instrument (Pay in slips, Payment Orders,

Demand Draft, TT, MTs or any other financial instruments)

However, Deposits/Instruments recorded in the name of Minor or

Government Department/Agency or Courts of Law are not

transferred to SBP.

No profit/interest is paid on deposits transferred to Unclaimed

Accounts. Similarly, no service charges are deducted.

Notice to the Holder of Unclaimed Deposits/ Instruments

03 months prior to the completion of Unclaimed Deposits, branches

are required to intimate the account holder in writing via mail on

the customers address regarding the settlement of their

deposits/instruments.If on the expiry of the three months period no acknowledgement

or reply is received from the holder of unclaimed

Deposit/Instrument, the entire funds should be transferred to SBP.

Branches are required to maintain complete record of letters sent

tithe holders of Unclaimed Deposits

Branches are also required to send written intimation to the

Government Institutions, Agencies, Court of Law and Minors (Afteracquiring the age of maturity) for the settlement of their

deposits/instruments.

Reporting Of Unclaimed Deposits


57/133


Branch submits list of unclaimed deposits/ instruments separately for Pak Rupee

and in Foreign Currency (FCY) on the Form XI (Annexure- I-05-B) within thirty

days after the close of each calendar year.

Transfer of Unclaimed Accounts to State Bank of Pakistan

The amount of unclaimed PKR and FCY deposits/ instruments is

transferred to SBP at the end of each calendar year along with a list

of unclaimed deposits/instruments.

In case of Frozen FCY deposits / Instruments of 1998, as and when

become unclaimed, the Bank/DFIs will surrender the equivalent PAK

RUPEES to State Bank

Retention of Documents

Preserve all signature cards and documents indicating th e Signing Authority

and other documents in the dual custody of Operations Manager and Designated

Authorized Officer .

Refund Procedure

All claims lodged with the Branch about Unclaimed Balances transferred to State

Bank of Pakistan (SBP), should be forwarded to State Bank of Pakistan through

Principal Office and after getting Proceeds from State Bank of Pakistan same

shall be paid to the Claimant.

While forwarding any claim for refund, branches are required to obtain the

following documents:


58/133


Original application for refund long with verification of attested

signature/thumb impression of the claimant by the Branch

Operations Manager or Designated Authorized Officer with the

name and stamp.

Claimants address and contact number must be clearly mentioned

in the application.

Copy of Intimation Letter sent to the holder of unclaimed

deposit/instrument.

Attested copy of CNIC of the claimant.

Certificate as per Annexure- I-05-C.

3.6 Account Closure

For the purpose of account closing a form has been constructed to aide this

process. Whenever the client wants to close the account, the only responsibility

of the bank is to collect the issued cheque book from the customer and to get

the constructed application form of account closing completely filled. After that

the payment of the entire amount in the account is paid to the client.

1. Customer: Presents duly completed account closure application to the CSO.

2. Customer Services Officer- CSO:

Receives account closure application

Confirms Account balance from the Branch Teller Module

Informs account balance and returns the same to the

customer, in order to fill out the cheque of the complete

amount (Account Balance)

Designated Authorized Officer Verifies customer s signature on Account

Closure Application.


59/133


3. Customer: Fills out the cheque of the total amount and presents the same to the

Teller for encashment.

4. Teller: Verifies the customers signature & amount from the system

Selects transaction type "CQWR" (Cheque withdrawal) from List of

Values

Debits the entire amoun t from the customers account.

Enters the transaction details i.e. customer's account number,

currency, amount of withdrawal and cheque number etc. (If

transaction amount exceeds the Tellers limit, screen pop -ups

Authorization required message. Chief Tel ler

authorizes/approves the transaction).

Note: In case of any Restraint on the account: Teller informs the customer to

submit a written application to the CSO, in order to remove the restraint from

the account.

5. CSO: Receives restraint removal application from the customer & forwards the

same to the Relationship Manager for signature verification and deletion of

restraint from the account in order to close customers account.

6. Account Maintenance Officer (AMO) verifies the details and removes restraint

from t he customers account.

Forwards the application to the Teller in order to close the account.

7. Teller: After receiving the application from the AMO, inserts the transaction

details in the system, it will generate the following entries:

Branch Teller Module:

DR: Customer Account

CR: Cash in Vault

Accounting Entry for Account Closure Charges:

Dr: Cash In Vault/ Customers Account

Cr: Miscellaneous Earning (A/c Closure)


60/133


Counts the cash and deliver the same to the customer.

8. Customer: Counts the cash and leaves the branch.

After that I was assisted to Madam Rushda (Clearing officer) and critically observed the

clearing process.

11 July, 201 1st Ramadan Holiday

12 July, 2013 Prepared reports of Branch Operational Manager (BOM) daily, weekly,

fortnightly, monthly, semiyearly, and yearly activities.

In the 2 nd week , I learnt about the clearing (intercity, outward,) and maintain

the record of leave application of the employees, learnt about the Pay Order,

Demand Draft, CDR, Lockers Payments ,Checkbook Issuance, checkbooks

maintenance, ATM cards and checkbook entries ,request and issuance, Depositing,

online transfer via EOC, BTS, Systems reports and check return handling, General

ledger handling and posting, cash vault handling, ATM cash process, Keys rotationhandling, learnt to fill all kind of forms that are illustrated above.

15 July, 2013 I was assisted to mam Rushda (Clearing officer). She explained me about

the clearing and illustrates the whole process of clearing and check return handling. The

explanation is given below

CLEARINGFund transfer between two banks and branches is called clearing

There are two types of clearing

Outward clearing

Inward clearing

OUTWARD CLEARING

Outward clearing is to send the cheques to other branch


61/133


There are three types of outward clearing

1. Same day clearing

2. Normal clearing

3. Intercity clearing

1. SAME DAY CLEARING

In same day clearing send the cheque in the morning and receive the payment in

the evening,

There are two conditions in the same day clearing

Cheque will be 500000 or above

Member of the same day

2. NORMAL CLEARING

In normal clearing send the cheque today and receive the payment next day. No

condition will impose in normal clearing like same day clearing.

3. INTERCITY CLEARING

Clearing between two cities is called intercity clearing. In intercity clearing

cheque will clear in two or three days.

To understand the process of clearing we first need to understand and

comprehend the workings and the purpose of the state banks institution called

NIFT.

NIFT (NATIONAL INSTITUTIONAL OF FACILITATION

TECHNOLOGY)

In the process of clearing NIFT plays a very important role. NIFT (national

institutional facilitation technology) has a very vital role as it is the middle man

in the purpose of clearing and issuances of cheque books to the customer on

demand of the bank or branch. This institution has been formed by the State

Bank of Pakistan and it performs the duties of receiving all the clearing cheques


62/133


from all the branches of all the banks and taking them to the state bank. At the

SBP first the NIFT forms a list of all the cheques from all the banks and then

forwards it to the SBP representative. That person categorizes all these cheques

according to their respective banks and branches and forms another list of his

own. Then these sorted cheques are again given to the NIFT ag5nt and he then

takes them to the head offices of their respective banks and from there they are

distributed to the respective branches also through NIFT. This way NIFT deliversall the cheques to their parent branch from which they have been issued.

INWARD CLEARING

In the morning time I am received the inward clearing from the NIFT employeeand then I count the instruments which I received and match with the summery

which is also attached with these instruments. Than give these instruments to

the computer operator who posts these instruments, after posting all these

instruments then he again give me the instruments and I enter all these

instruments into the clearing sheet in his Debit side.

MEMO ON CHEQUES RETURN

Also prepare the Memo on (S.F 16) in which the details of objections are giventhat for purpose we return this instrument, and charge RS 200/- per instrument

CALCULATE THE DIFFERENCE VOUCHERS OF CLEARING

Difference voucher means the difference between the Out ward Clearing and In

Ward Clearing. If the liabilities are outstanding on our side which means that our

branch will pay this difference amount than I will prepare the H-O Credit

Voucher and if the Liabilities are outstanding on their side which means that now

we are receiving the difference amount so I will prepare the H-O Debit Voucher.If liabilities are outstanding on our side than made Credit voucher

If liabilities are outstanding are on their side than made Debit Voucher

CALCULATE THE DIFFERENCE VOUCHERS OF CLEARING RETURN


63/133


I have also made the difference voucher of those cheques which are R.U.P

means Return Unpaid. Means those cheques which our branch is returned and

those cheques which other banks returned our cheques which we send for

clearing and it had been rejected

If liabilities are outstanding on our side than made Credit voucher

If liabilities are outstanding are on their side than made Debit Voucher

Then finally enter all these difference vouchers in to the clearing sheet and

balancing with the computer. So this the complete process of Clearing .

OUTWARD CLEARING

When the account holder of our bank receives payment from any other party in

the form of cheque, and that cheque is not of our bank or branch, and our

account holder deposits it in his MCB account then that cheque has to pass from

the process of outward clearing.

All the cheques deposited in one day of other banks are then again sent through

the NIFT to the SBP which sends them to the head offices of their respective

banks which through NIFT sends the instruments to the respective branches

from which they were issued. This process of outward clearing is exactly

opposite to the process of inward clearing which I explained in detail before. This

process of outward clearing is also of three days.

PROCEDURE OF OUT WARD CLEARING

First of all receive the instrument from different customers which they present

on our branch.

Separate these instruments with in city clearing wise and intercity wise.


64/133


Giving the receiving slip to the customers.

Write Down the detail of these entire instruments which I received

from customer in to the Clearing Register.

Paste the Cross Stamp and clearing stamp at the front of these

instruments Face.

Paste the Payees Account Credited stamp at the back of these

instruments.

Calculate the amount of all these instruments

Prepare the delivery summery report

Prepare the Clearing Bundle Cover

Also prepare the Add List

After each and every thing is completed now put all these instruments into the

NIFT bag and closed this bag with seal. Than the third copy of delivery summery

along with deposit slips keeps in our custody, and then enter all these vouchers

in to the clearing sheet in his Credit side so this is the complete procedure of out

ward clearing.

INTERCITY CLEARING

There is the new concept of clearing which is named as intercity clearing. State

Bank of Pakistan now revises his policies and introduces this concept, because

before this action if any instrument which is belong to out of city, so in order to

clear this instrument we sent this cheque through CC Cheque Collection. Under

cheque collection procedure it took five to six days which time taking even

though the CC procedure is not yet finished but minimum up to the certain

extent. Now in most of the big cities intercity Clearing performing his job instead

of CC, with the help of intercity clearing time duration is definitely minimum.


65/133


Facility of Inter City Clearing is now offer in these cities

Karachi

Lahore

Mulatn

Gujranwala

Rawalpindi

D.G Khan

Hyderabad

Islamabad

Sialkot

Bahawalpur

Quetta

Peshawar

PROCEDURE OF INTERCITY CLEARING

First of all receive the instrument from different customers which they

present on our branch.

Separate these instruments intercity clearing wise.

Giving the receiving slip to the customers.

Write Down the detail of these entire instruments which I received from

customer in to the intercity Clearing Register.

Paste the Cross Stamp, clearing stamp and intercity stamp at the front of

these instruments face.

Paste the Payees Account Credited stamp at the back of these instruments.

Calculate the amount of all these instruments

Prepare the delivery summery report for each city

Prepare the Clearing Bundle Cover for each city


66/133


After each and every thing is completed now put all these instruments city wise

into the separate envelope of every city and all these envelopes put in to the

NIFT bag and closed this bag with seal. Than the third copy of delivery su

Date post:	04-Jun-2018
Category:	Documents
Upload:	azka-sumbel-qm-ib
View:	227 times
Download:	0 times