INTERNSHIP REPORTONMCB

SUBMITTED TO:

The Director of (IBA PU)PROF. DR. MUHAMMAD EHSAN MALIK

SUBMITTED BY:Areeba Haider

ROLL NO: 59-ASESSION: BBA (HONS.)2010-2014

INSTITUTE OF BUSINESS ADMINISTRATIONUNIVERSITY OF THE PUNJABLAHORE

DEDICATION

First of all, thanks to my ALLAh Subhana WaTala and His beloved Prophet Hazrat Muhammad S.A.W.W. This report is dedicated to my whole family. Because of their prayers I have completed this internship program by the grace of ALLAH Almighty Subhana WaTala. Without their support I was unable to complete my internship program.

ACKNOWLEDGEMENT

Person is not a perfect in all the contexts of his life; He has a limited mind and mind thinking approaches. It is the guidance fromAlmighty Allahthat shows the man light in the darkness and the person find his way in the light. Without this helping light, person is nothing but a helpless creation.The teachings of theHoly Prophet Muhammad (PBUH)were also the continuous source of guidance for me especially his order of getting knowledge and fulfilling once duty honestly was key motivation force for me.With prayers of my parentsand support of my teachersit became possible formulate this report. I pay high regards to them.I am also thankful to all my friendsandclass fellowswho helped me and provided me support to complete this hard task.

ABSTRACT

This report is based on the study and observation of Human Resource group of one of the leading bank of Pakistan. Internship experience is very useful and important part for a job seeking person after the completion of his/her studies. During the course of internship I learned about different functions performed by HRMG. I also learned about documentation requirements and record keeping for different activities and processes. Internship teaches me the routine wise daily repetitive tasking of the organization at the smallest level.

I have described the overview and organizational structure of MCB in first part of report. Then I have mentioned the details of Human Resource and described the task which I performed in MCB. Afterwards SWOT analysis and finally the report ends with the conclusion and suggestion from my side, as I consider it my responsibility to add up my input and learning from the valuable internship program which is necessary to mention

ContentsDEDICATION3ACKNOWLEDGEMENT4ABSTRACT5INTRODUCTION9DEFINITION OF BANK10According to Crowther,10According to G.W. Gilbert,10According To Banking Companies Ordinance11HISTORY OF BANKING IN PAKISTAN11Pre Nationalization Era11Banking Sector in Pakistan In 197313Nationalization Era:13C) POST NATIONALIZATION ERA14SCHEDULED BANKS14PAKISTAN BANKING SECTOR15Nationalized Schedule Banks15De-Nationalized Schedule Banks15Specialized Banks16Private Schedule Banks16Foreign Banks16Investment Banks18HISTORY OF MCB LIMITED20PRIVATIZATION21AFTER PRIVATIZATION21MCB BANK TODAY22FOREIGN TRADE22YEAR 2006 COMPLIANCE22SOCIAL SECTOR23THE BUSINESS23New Asset and Liability Products23Market Standing of MCB25VISION STATEMENT28Challenging and Changing the Way you Bank28MISSION STATEMENT29Compliance status30STRAGETIC OBJECTIVES32Core Values32Innovation32Excellence33Customer Focus33Employee Respect & Dignity33Team Based Approach33Quest For Quality33GOOD CORPORATE CITIZENSHIP34MANAGEMENT COMMITTEE34Board of Directors35ORGANIZATIONAL HIERARCHY OF MCB39ORGANIZATIONAL SETUP OF MCB41ORGANIZATIONAL STRUCTURE OF MCB43HUMAN RESOURCE MANAGEMENT GROUP48DESIGNATIONS AND NUMBER OF EMPLOYEES49HUMAN RESOURCE PROCESS49HRM PLANNING PROCESS50HRM FORECASTING50HRMG WORKING50RECRUITMENT & TALENT ACQUISITION50BATCH HIRING51PREREQUISITES FOR PROBATIONARY OFFICERS52PROCEDURE:53OUTSOURCING53PROCEDURE54SELECTION55JOINING56EMPLOYEES TRAINING AND DEVELOPMENT PROGRAM56PRE-SERVICE TRAINING57IN- SERVICE TRAINING:57ON THE JOB TRAINING58Purpose of on job training58Organizational Development and Talent Management58PROMOTION59PERFORMANCE & Compensation60PERFORMANCE APPRAISAL60COMPENSATION61FRINGE BENEFITS:62HR FINANCIAL SERVICES DEPARTMENT62PAYROLL63STAFF LOAN63FINAL SETTLEMENT63LOAN TAKE OVER64NON REFUNDABLE LOAN:64PAY SLIP64DISBURSEMENT64TYPES OF LOAN65HR Relationship Unit65LEAVE POLICY:65TERMINATION65RETIREMENTS661.Horizontal Analysis1192.Vertical Analysis119

INTRODUCTION

The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank. This history of banking is traced to as early as 2000 B.C. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths. They used to keep strong safes for storing the money and valuables of the people. The persons who had surplus money found it safe and convenient of deposit their valuables with them. The first stage in the development of modern banking, thus, was the accepting of deposits of cash from those persons who had surplus money with them.The goldsmiths used to issue receipts for the money deposited with them. These receipts began to pass from hand to hand in settlement of transactions because people had confidence in the integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted in payment of debts; then the receipts were drawn in such a way that it entitled any holder to claim the specified amount of money from goldsmiths. A depositor who is to make the payments may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank notes. The second stage in the development of banking thus was the issue of bank notes.The goldsmiths soon discovered that all the people who had deposited money with them do not come to withdraw their funds in cash. They found that only a few persons presented the receipts for encashment during a given period of time. They also found that most of the money deposited with them was lying idle. At the same time; they found that they were being constantly requested for loan on good security. They thought it profitable to lend at least some of the money deposited with them to the needy persons. This proved quite a profitable business for the_ goldsmiths. They instead of charging safe keeping charges from the depositors began to give them interest on the money deposited with them. This was the third stage in the development of banking.

DEFINITION OF BANK

The term 'bank' is being used for a long time, yet it has no precise definition. The basic reason is that the commercial banks perform not just one but many types of functions. The term bank has been defined differently by different authors. Some are as follows:

According to Crowther, "Bank is a dealer in debtshis own and of other people."

According to G.W. Gilbert, "A banker is a dealer in capital or more properly a dealer in money. He is an intermediate party between the borrower and the lender. He borrows from one party and lends to another."

According To Banking Companies OrdinanceU/s3 (B) of Banking Companies Ordinance 1962 "Banker means person transacting the business of accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheque, draft, order or otherwise and includes any Post Office Savings Bank."

HISTORY OF BANKING IN PAKISTAN

The interesting point which I observed during the span of mine internship was the historical background of Banking & Financial sector which is the one in which great improvement and growth is observed since the formation of Pakistan. For studying the growth of this sector we can divide it into three stages, which are as follows

a) Pre-Nationalization Erab) Nationalization Erac) Post Nationalization Era

Pre Nationalization Era

There were only two Muslim banks in Indo Pak before partition, they were; Habib Bank Ltd. (estd. in 1941 at Bombay) Australia Bank Ltd (estd.In1944 at Lahore). Hindus or Foreigners either owned all other banks, at that time.At the time of partition there were 631 bank branches in area, which came under Pakistani control. But due to bloodshed and violence at large scale, mostly branches were closed and the disparity can be accessed from the fact that on July 1948 there were 195 branches with deposits of Rs.88 crore (880 million) only. Also a factor lagging in Pakistani industry was a central bank of its own, by that time Reserve Bank of India was acting as central bank for both countries and same currency notes were used in both territories. But Reserve Bank of India was biased and Set down Pakistan on many occasions such as the issue of funds transfer etc.In this period drastic steps were taken in government sector for the improvement of overall position. The private sector also responded to these changes and some very positive changes were observed. Some of the steps taken by the government in this regard were as under:i. Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.ii. Setting up of National Bank of Pakistan in November, 1949 to control the 'jute' export in East Pakistan and to act as agent of SBP.iii. Larger powers were given to SBP through SBP Act (1956) for controlling purposes.iv. Banking Companies Ordinance 1962 for protection and guidance to banks.v. Establishment of specialized banks, such as ADBP (1952); a) HBFC (Nov, 1952); b) P1CIC (Oct, 1957) c) IDBP (Aug. 1961); d) NDFC (Jan, 1973).These were the steps, which built a strong banking sector in Pakistan. This is also obvious from the facts that by 1973 there were almost 10 foreign banks were working in Pakistan and all over deposit position was around Rs.2300 crore (23,000 million). A bird eye view of 5 top banks was as given below:

Banking Sector in Pakistan In 1973

BANKNO.OF BRANCHES

Habib Bank Ltd.

667

National bank Ltd579

United Bank Ltd

497

MCB Bank Ltd.

700

Allied Bank Ltd.

145

Nationalization Era:On January 01, 1974 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani banks became a public property. All small banks were merged in bigger banks to create 5 major Pakistani banks Pakistani banks. These banks were to control by Pakistan Banking Council. There are still controversies about this act of government as whether it contributed in success of failure of banks. However the major changes after nationalization were as follows:

Working of banks was extended to under developed areas. Market expansion for credit and deposits. Bank were encouraged to extend cooperation to neglected areas Decrease in service level of bank officers. Decrease in profitability as well.

C) POST NATIONALIZATION ERAIn 1990 the government decided to denationalize all the nationalized institutes. Some was also suggested in banking sector. For this purpose, amendments were made to Nationalization Act 1974 and two nationalized banks were privatized. Along with this a permission to open banks in private sector was also granted. The rules regarding establishment of new banks and for incoming foreign banks were also relaxed. The-three privatized banks are; a) MCB taken up by a private group in April, 1991b) ABL taken up by its own employees in September 1991.c) UBL taken up by UAE party in 2002.After these changes a large number of private and foreign banks started their operations in Pakistan and the present status can be seen from the following figures:

SCHEDULED BANKS

CategoryNo. Of Banks

Nationalized Commercial Banks3

Private / Privatized Commerce Banks18

Public Sector Specialized Banks4

Foreign Banks19

Total Schedule Banks44

In addition to above mentioned scheduled banks there are 11 Development Financial Institutes (DFIs), 16 Investment Banks and 21 leasing and Modarbah Companies.

PAKISTAN BANKING SECTOR

Nationalized Commercial Banks Privatized Banks Specialized banks Private banks Foreign banks Other financial InstitutionsNationalized Schedule Banks

First Women Bank Ltd. National Bank of Pakistan Habib Bank Ltd.De-Nationalized Schedule Banks

Allied Bank of Pakistan Limited MCB Bank Limited United Bank Ltd.Specialized Banks

Zarai Taraqiti Bank of Pakistan (ADBP) Industrial Development Bank of Pakistan(IDBP) Punjab Provincial Cooperative Bank Federal bank for CooperativesPrivate Schedule Banks

Askari Commercial Bank Ltd. Bank Alfalah Ltd. Bank Al-Habib Ltd. Bolan Bank Ltd. Faysal Bank Ltd. Habib Credit & Exchange Bank Indus Bank Ltd. Metropolitan Bank Ltd. Platinum Bank Ltd. Prime Commercial Bank Ltd. Prudential Bank Ltd. Soneri Bank Ltd. The Bank of Khyber The Bank of Punjab Union Bank Ltd.Foreign Banks

ABN AMRO Bank N.V. Albaraka Islamic Bank BSC (EC) American Express Bank Ltd. ANZ Grindlays Bank Ltd. Bank of America (NT & SA) Bank of Tokyo Mitsubishi Ltd. Bank of Ceylon Banque Indosuez Citibank N.A. Credit Agricole A.G. Deutche Bank A.G. Doha Bank Ltd. Emirates bank International Ltd. P.J.S.C. Habib Bank A.G. Zurich Hong Kong and Shangai Banking Crop. Ltd. International Finance Investment and Commerce Bank Ltd. Mashreq Bank PSC Oman International Bank SOAG Rupali Bank Ltd. SocieteGenerale, the French Int. Bank Ltd. Standard Chartered Bank Investment Corp of Pakistan National Development Finance Corp. Pakistan Industrial Credit and Investment Corp. Pak Kuwait Investment Company Pak Libya Holding Company Regional Development Finance Corp. Saudi Pak Industrial & Agricultural Investment Corporation Small Business Finance Corporation House Building Finance Corporation National Investment Trust

Investment Banks

Crescent Investment Bank First International Investment Bank Atlas BOT Investment Bank Security Investment Bank Fidelity Investment Bank Prudential Investment bank Islamic Investment Bank Asset Investment Bank Al-Towfeek Investment Bank Al-Faysal Investment Bank City Corporation Investment Bank (Pak) Ltd. Franklin Investment Bank Ltd. Orix Investment Bank (Pak) Ltd. Trust Investment Bank Ltd.

HISTORY OF MCB LIMITED

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.This bank was incorporated under companies act 1913 on 9th July, 1947 (just before partition) at Calcutta. But due to changing scenario of the region, the certificate of incorporation was issued on 17th August, 1948 with a delay of almost 1 year; the certificate was issued at Chitagong. The first Head office of the company was established at Dacca and Mr. G.M. Adamjee was appointed its first chairman. It was incorporated with an authorized capital of Rs. 15 million.After some time the registered office of the company was shifted to Karachi on August 23rd, 1956 through a special resolution, now recently the Head office of MCB has been transferred to Islamabad in July, 1999 and now Head office is termed as Principle Office. This institute was nationalized with other on January 1st, 1974. At that time it had 506 branches and deposits amounting to Rs. 1,640 million. Although. MCB has a reputation of a conservative bank but nationalization also left its effects on this institute as well and by end of year 1991 in which it was privatized the total number of branches were 1.287 and deposits amounting to as high as Rs. 35,029 million

PRIVATIZATION

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

Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer. After privatization, the growth in every department of the bank has been observed. Following are some key developments: Launching of different deposit schemes to increase saving level. Increased participation on foreign trade. Betterment of branches and staff service level.

MCB BANK TODAY

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

FOREIGN TRADE

The bank conducted import business during the year amounting to RS. 54.0 billion. As compare to RS. 56.4 Billion In 2005. The export business slightly improves to RS. 36.9 Billion From RS. 35.1 Billion. In 2006. Home remittances decline to RS. 16.7 Billion From 30.7 Billion the decline in home remittances business was due to freezing of Foreign Currency Accounts, which has affected the confidence of Pakistanis working overseas.

YEAR 2006 COMPLIANCE

MCBs strength lies in providing a technological base at the gross root level of the society with a challenge to educate and assimilate such systems across vast cultural and economic backgrounds. With over 768 automated branches, 263 online branches, over 151 MCB ATMs in 27 cities nationwide and a network of over 16 banks on the MNET ATM switch, MCB continuously produces new products and services that harness technology for the customers benefits.

SOCIAL SECTORThe bank is participating in the Prime Minister self-employment Scheme. The application received from various applicants is being processed on merit and disposed off as quickly as possible.THE BUSINESS MCB is in its over 50 years of operation. It has a network of over 1,000 branches all over the country with business establishments in Sri Lanka and Bahrain. The branch break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) and Baluchistan (3%) respectively. MCB has an edge over other local banks, as it was the first privatized bank. The State Bank of Pakistan has restricted the number of branches that can be opened by foreign banks, an advantage that MCB capitalizes because of its extensive branch network. Fourteen years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer. MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking. Corporate clientele includes public sector companies as well as large local and multinational concerns. MCB is also catering to the growing middle class by New Asset and Liability Products

The Bank provides 24 hour banking convenience with the largest ATM network in Pakistan covering 27 cities with over 151 ATM locations. The Banks Rupee Travelers Cheques have been market leaders for the past six years and have recently launched their Gift Cheque Scheme.MCB looks with confidence at year 2007 and beyond, making strides towards fulfillment of its mission, "to become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work".A major achievement of MCB is that the state bank of Pakistan has issued a license to MCB to start Islamic banking. Now MCB is setting up a 1st Islamic banking branch at 1st floor Shaheen complex, Karachi. This complex starts working from September 1, 2003.

Market Standing of MCB

Deposits

199619971998199920002001

HBL8,21116,42327,95854,96675,011105,243

UBL6,39214,30521,07541,50353,93763,517

NBP7,07114,20921,38440,61157,46279,823

MCB2,5055,4179,88715,70521,59025,325

ABL1,4602,6654,3656,87510,05816,637

Total25,63953,01984,669159,660218,058290,545

Advances Advances

199619971998199920002001

HBL5,86410,11516,21631,63648,00341,767

UBL4,4638,52213,95224,99135,06137,967

NBP5,2318,48111,80318,99031,26440,534

MCB2,1023,8116,44810,89813,80315,548

ABL1,0791,9223,1875,1085,5728,088

Total18,73932,85151,60691,623133,703143,904

Investments

199619971998199920002001

HBL1,8145,2188,95918,12120,33428,393

UBL1,3652,7971,8557,06312,33419,290

NBP1,4142,9372,2819,06312,97128,553

MCB6341,3822,3223,8256,15110,991

ABL2627391,3741,8513,1026,425

Total5,48913,07316,79139,92354,89293,652

Equity

199619971998199920002001

HBL2503825761,8983,1556,121

UBL1191842889611,6913,061

NBP1302222799541,5302,987

MCB0560711164627881,521

ABL01933054183212397

Total5748921,3134,4587,37614,087

Profit

199619971998199920002001

HBL211318362750843956

UBL065125093184239260

NBP073118109183282346

MCB028033080130143249

ABL010021023027037053

Total3876156671,2741,5441,864

VISION STATEMENTA vision should be created for the future that is widely understood and imprinted throughout the organization. Adhering to this vision statement, MCB clarifies its initial goals and strategies supported by acceptable ways to capture or gain market share, and has long way to go to become supreme.

Challenging and Changing the Way you Bank

MISSION STATEMENT

The mission is essential in providing a general overview of where the organization wants to be and how shall it get there. The mission statement is like a path for the employees and the organization to follow to achieve its goals.An ideal mission statement should give information about the companys goals, its culture, and the set of plans it follows apart from this it should give an idea about the products it offers and the target market it aims to capture. The mission statement of MCB is as follows:

To become the preferred provider of quality financial services in our country with the profitability and responsibility and to be best place to work

Compliance status

Name & AddressMCB Bank Limited

MCB 15 Main Gulberg, Lahore

Legal FormPublic Limited Company. Listed on Karachi, Lahore & Islamabad Stock Exchanges in Pakistan.

Name of External AuditorsKPMG TaseerHadi& Co.(Chartered Accountants).

Name of Regulatory BodyState Bank of Pakistan (Central Bank).

Main Banking Commercial, Consumer, Corporate, Correspondent and Islamic Banking.

Categories of shareholders - as of December31-12-2009

Pattern of Share HoldingsDescriptionShareholdingPercentage

Directors, CEO and children52,190,8777.5518

Associated Companies57,009,0348.2490

NIT & ICP5,8350.0008

Banks, DFI & NBFI2,239,3070.3240

Insurance Companies46,052,0576.6635

Modarabas& Mutual Funds7,208,7031.0431

PublicSector Cos. & Corp.131,749,73119.0636

General Public (Local)101,843,81914.7364

General Public (Foreign)2,400,1260.3473

Others44,237,6636.4010

Foreign Companies246,167,37535.6194

Company Total691,104,527100.00

ChairmanMian Mohammad Mansha

Mr. M.U.A. Usmani - Acting President

President & CEO

Banking License No.BCD (1) 17-66 dated 8th December 1966.

Compliance StatusCompliant with KYC and AML regulations prescribed by State Bank of Pakistan.

Compliance Document required from Correspondent BanksMCB AML KYC Questionnaire

Compliance Documents for Correspondent BanksThe Wolfsberg Group Questionnaire

CDD / KYC / & AML PROCEDURES HANDBOOK

AML/KYC Questionnaire Filled-in by MCB

USA PATRIOT ACT Certification

USA PATRIOT ACT Recertification

CircularsClassification of Dormant / Inoperative Accounts

STRAGETIC OBJECTIVES Delivering returns to shareholders, sustainable performance exceeding market and shareholder expectations. Providing value added services through operational expansion, geography and upgraded systems. Building a corporate culture of equality, trust and team spirit as we remain dedicated to be a socially responsible organization.

Core ValuesInnovationWe 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.

ExcellenceWe 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 FocusWe treat each of our customer equality & as the most important person while we interact with him/her. We must ensure that we do everything to meet and exceed the customers expectations with perfect to times, accuracy & quality services.

Employee Respect & DignityWe treat each of our employees with fairness, which includes giving constructive feedback for their development. We celebrate diversity and seek suggestions from all employees for improvement. We ensure that responsibility & fairness in all our decision-making.

Team Based ApproachWe work towards achievement of our vision & mission as a combines group. We encourage inter & intra-departmental communications. We treat our colleagues as our internal customers & ensure that the requirements of internal customer focus are always met.

Quest For Quality We ensure that each moment of our time is spent on value adding activity. We always seek ways for exceeding expectations of customers & colleagues. We also ensure that we do things right, first time every time.

GOOD CORPORATE CITIZENSHIPWe ensure that we contribute our due share to the Govt. we realize that we have a responsibility to the society in which we operate & we seek ways of playing a positive role for the betterment of the community at large

MANAGEMENT COMMITTEE

Board of Directors

Mian Mohammad Mansha Chairman

S.M. Muneer Vice Chairman

Mohammad Aftab Manzoor President & Chief Executive

Tariq RafiDirector

Sheikh Mukhtar Ahmed Director

Mohammad Arshad Director

ShahzadSaleem Director

Mian Umer Mansha Director

Sarmad Amin Director

Audit CommitteeMian Mohammad Mansha Chairman ShaikhMukhtar Ahmed MemberShahzadSaleem Member

Chief Financial OfficerAli Amin

Company SecretaryTameez-ul-haque

AuditorA.F.Ferguson& coChartered accountants

M.YousufAdilSaleem& coChartered accountants

Legal Advisor

Chartered accountants mandiwalla&zafarAdvocates & legal consultants

Shariah AdvisorDr. Muhammad ZubairUsmani

Registered OfficeMCB building, F-6/G-6 Jinnah Avenue, Islamabad

Principle OfficeAdamjee house 2nd floorI.I chudrigar road Karachi

Registrar and Share Registration OfficeTHK associates (pvt) Ltd. Shares department, ground floor sheikh sultan trust building no 2, Beaumont road Karach

ORGANIZATIONAL HIERARCHY OF MCB

PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICERS GRADE I II III

ASSISTANTS

CASHIER

GUARDS

PEONS

ORGANIZATIONAL SETUP OF MCB

PUNJABNWFP & AZAD KASHMIRSINDHBALOCHISTANKARACHILAHOREPESHAWARPROVINCIAL HEAD QUARTERSQUETTAHEAD QUARTERCIRCLE OFFICESBRANCH OFFICESKARACHI

MANAGEMENT LEVEL

The organization chart within a department and in different offices is as follows: Divisional Heads ..Head OfficeRegional Head (EVP)..Regional OfficeZonal Head (VP)..Zonal OfficeBranch Manager ..Branch

ORGANIZATIONAL STRUCTURE OF MCB

As MCB is a banking company listed in stock exchange therefore it follows all the legalities which are imposed by concerned statutes Mr. Muhammad Mansha is chairman & chief executive of the company with a team of 10 directors and 1 vice chairman to help in the business control and strategy making for the company.Operational Management of the bank is being handled by a team of 10 professionals. This team is also headed by Mr. Muhammad Mansha. The different operational departments are Consumer Banking & IT div; Financial & Inter branch div; Banking operations div; HR & Legal div; financial control & Audit div; Credit management div; Commercial Banking div; Corporate Banking div; Treasury management & FX Group and lastly Special Assets Management (SAM) Group.For effective handling of branches, it has been categorized into three segments with different people handling each category. These categories are:

a) Corporate Bankingb) Commercial Bankingc) Consumer Banking

Corporate BankingThese are branches which have an exposure of over Rs. 100 million. Usually includes multinational & public sector companies.

Commercial BankingThe branches which has a credit exposure of less than Rs. 100 million but having a credit portfolio of more than Rs. 20 million (excluding staff loans).Usually branches in large markets and commercial areas come under this category.

Consumer BankingThese are the branches which have exposure up to Rs. 20 million and these include all the branches which are neither corporate nor commercial branches. Recently the organizational structure was re-designed as follows: Province wise branches

GROUPHEAD OFFICEBUSINESS OFFICEREGIONCIRCLE OFFICE

GroupsNumber of employees

Human Resource Management Group80

Retail Banking Group(RBG)9000

SAMG60

IT170

Audit225

Security1000+

SPIG10

Islamic Banking group250

TFG150

Operations Group700

Legal Affairs GroupLess than 100

FCG250

Wholesale bankingLess than 150

Compliance and controlLess than 100

Retail banking group

DesignationsNumber of employees

TSO2000

TSS1000

GBO3330

BOM1110

BM1110

RH45

GM19

BH4

HEAD RBG2

HUMAN RESOURCE MANAGEMENT GROUP

Human resource management is responsible for the people dimension of the organization. It is responsible for getting competent people, training them to perform at high effort levels, and providing mechanism to ensure that these employees maintain their productive affiliation with the organization. The MCB believes in investing in its people. On this account they have very comprehensive and effective Human Resource Development system. "Human resource department is concerned with the staffing, training, development, motivation and maintenance of the employees This department is also called staff administration and is of much greater importance. It coordinated the various activities performed by different workers. It facilitates the smooth running of an organization. Its main objectives are as follow: The attraction of employees The retention of employees The development of their personalities and minds

DESIGNATIONS AND NUMBER OF EMPLOYEES

Designations Number of employees

HR Associate25

Senior Associate20

HR Managers10

Unit heads10

Divisional Head8

Unit Head3

Group Head1

HUMAN RESOURCE PROCESSHuman capital is the vital factor who works to boost up the business. HRM is needed in making suitable policies. It presents, these policies before committee for discussion and approval. It deals with following personnel matter: Selection & Recruitment Policy. Employee training and development program. Performance appraisal of employmentHRM PLANNING PROCESSFollowing are the steps for Human Resource planning GROUPDetermine the Organization Mission Scan the Organizational Environment Set Strategic goals Formulate a strategic planHRM FORECASTING Experts meeting is being called upon Group Discussion Facilities, Exchange of ideas Possible Subjectivity, Group pressure Independent workingHRMG WORKINGMCB places great importance on humanresourcemanagement and for this purpose Human Resource Development Division had been established. The major functions performed by the HRMG are as follows: Recruitment & Talent Acquisition Disciplinary Action Operations Learning and Development Relations Financial Control Organizational development Performance & compensationRECRUITMENT & TALENT ACQUISITIONRecruitment is the process of discovering potential candidates for actual or anticipated organizational vacancies or from another perspective, it is linking activity, bringing together those with jobs to fill & those seeking jobs.MCB owns a big employee pool and to keep it filled the Recruitment & Selection Unit works on hiring prospective employees to suite the requirement of the respective jobs. MCB is committed to employing the best qualified candidates for approved Position in Compliance with all applicable employment laws. It is MCB policy to provide equal opportunity to all candidates.All recruitment request are received by HR recruitment is compare with the Budgeted head count forecasted at the beginning of the year and HR then initial search process for all budgeted/approved hiring request HR Coordinate for new hiring or replacement of suitable candidate through the sources of candidate. We see two following concepts use as the sources for the recruitment: Internal External BATCH HIRINGThe name clearly enlightens the definition that in this type of hiring, the employees are being hired through batch process. Following are the types of Batch Hiring. Teller service officer (TSO) Training business officer (TBO) Branch Operation Officer (BOO) Management Training Officer (MTO) There is no compromise on registration criteria in batch processing. Candidates can apply online to enter in the ongoing batch, there is predefined criteria to get registered in which the applicant should be cleared with 1st division matriculation and intermediate and he/she should be graduated. Aspirants for TSO (who are commonly known as Cashier as well) and TBO after getting registered gets the entrance Slip which is a token to take the seat for the Entry test in the pre-defined Center. The entry test is based on NTS pattern, there is a standard procedure for NTS papers which is being judged on the basis of four measures, i.e. Verbal Reasoning Analytical Reasoning Quantitative Reasoning Subject KnowledgeThe invigilators are HR officers themselves to ensure the integrity of the Test. When the exam is over, papers are being checked by experts assigned by NTS. Sooner the results finalizes sooner it is sent to HRMG. And further process is continues from Talent Acquisition unit. Where the Documents are being verified. In batch hiring candidates are shortlisted on merit bases those who falls on merits proceeds to the next level of interview session. And finally, letter of employment is being issued to the selected ones. All the processes goes in a proper system way and MS Excel is a commonly used software to keep the record of recent hired employees, the approval is being taken and then the letters are being issued to the concerned person.

PREREQUISITES FOR PROBATIONARY OFFICERSThecandidatefillsoutspecificapplicationform titled Job Request Form.Afterscreeningthe applications only selected candidates are called for test, which is design to test the analytical, comprehension, and general knowledge abilities of thecandidates.Afterpassingthetest,thecandidateundergoesan interview. Those who pass the interview are referred to a medical board for physical examination. The candidates, who are finally selected, are offered appointments as probationary officers, after signing the following bonds Banks Secrecy Bond BanksSecurityBond ServiceAgreement BondPROCEDURE:There are certain steps involved in the procedure in recruiting to MCB House. They are: Applications are invited from candidates on prescribed forms against the vacant posts advertised in the newspapers. Application forms received are scrutinized and eligible candidates are called for written test. Test is conducted in four subjects, i.e. English, Computer, General Knowledge and Mathematics. Candidates who qualify the written test are called for interview. Interviews are held at GM office. After that the candidates have to undergo a medical checkup by the prescribed doctor. Appointment letters are sent to the selected candidates, who have to present themselves before the Head Office for signing the following documents. Bank Secrecy. Bond Security Bond Service Agreement Bond. Appointed candidates are kept on probation for 9 months. They are sent for a 9-months pre-service training by the Staff College. On the successful completion of the training programmed they are appointed as officers grade- III.

OUTSOURCINGOutsourcing of recruitment to an external provider may be the solution for some small businesses and at the other extreme very large organizations. An external recruitment provider may suit small organizations without the facilities to recruit. In typically the largest organizations a formal contract for services has been negotiated with a specialist recruitment consultancy. These are known in the industry as Recruitment Process Outsourcing. Recruitment process outsourcing may involve strategic consulting for talent acquisition, sourcing for select departments or skills, or total outsourcing of the recruiting function.In MCB HRMG, there are three numbers of officers at Outsource unit, there responsibility is to proceed the hiring requisites comes from other departments. On job request, HR outsource officer further continues to work on the case. The hiring goes through a complete process of documentation.

PROCEDUREThere are five outsourcing firm who are providing services to MCB. When hiring case arrives at any of these firms, they first complete the documentation and then forward the case to outsource unit to further proceed it. Before replacing any position we need to confirms the employee status i.e. who was the previous one on the respected position? The officer works on his employment history to check the status including; joining and resignation date, employee code, salary and Designation.Next step demands candidates ECIB, for which we need his updated NIC number. The reason to demand ECIB is to check out the loan status. If the candidate has taken loan and his debit burden is above 50%, then we decline the case. If its below 50%, then the case proceeds further we demands his credentials. Outsource have a separate Headcount budget, where there is forecasted headcount and actual headcount and the headcount we have during month. If we have enough headcount to hire him, then the cost sheet is being made which tells the total expenditure will be served on the candidate including his service charges.DBR is another step in this process to make the deductions of loans from salary. This will explains about how the loans deduction should be made from the employee salary. Now we check the completion of documents from the checklist to check CNIC, Resume, Credentials, headcount, DBI and other documents needed for the employee record. After the completion of the hiring process, the case is sent to the higher authorities; Group head, Department head and unit head for the approval of the respective case. Employees in outsource are usually hired on Contractual basis.

SELECTIONIt has some basic requirements: Having minimum bachelor degree. Having an age not exceeding 25 years. Be self-motivated and able to work independently Excellent presentation skillThe caliber of the work force ofan organization largely determines its strengths and its success as an enterprise. The employment policies of many organizations are not formalized. They have just evolved as practices over the course of many years. The MCB has very orderly and impartial procedure for selecting people. In fact, it is the only bank in private sector with such an extensive and irrefutable selection process. Human Resource Department has Combined many selection techniques i.e. job application form, employment test, interview, and physical examination. MCB recruits candidates in three cadres ProbationaryOfficers ManagementTrainees Contractual AppointmentsMostoftherecruitmentsaremade throughProbationaryOfficers. Management Trainees are selected amongst the graduates from foreign universities, or prestigious national universities i.e. Institute of Business Administration Karachi(IBA), LahoreUniversityof Management Sciences Lahore s(LUMS),andQuaid-e-AzamUniversityIslamabad. Contractual Arrangementsaremadewithpersonspossessingtechnicalknowledge and expertise related to specific departments like Treasury Department, Foreign Exchange, and Information Technology etc. The persons hired through these contractual arrangements are usually appointed at higherposts. Now the Bank also awards contracts to the people for clerical jobs like cashiers, date entry operators etc.JOININGThere are some formalities that are supposed to be made before joining. Firstly, newly hired ones gets a specific joining period they are to join their workplace. However, the duration is minimum three days but it can be extended on request.Before joining the candidate is required Acceptance of employment offer within 15 days. It is required to: Undergo for medical examination from doctor on panel of bank. Completion of all documents duly witnessed and attested on joining the bank as per list of joining documents provided by HR relationship manager. References provided by the candidates are checked by within a letter referee in accordance with the regulation SBP.Employee is confirmed after six months of probation period.EMPLOYEES TRAINING AND DEVELOPMENT PROGRAMTraining & development specialist are responsible for counseling employees helping them to make better choices about their caress and finding ways to achieve the desired goals.Training plays an important role in an administration is to improve the performance and level of efficiency of employees to enhance the knowledge. Management trainee is for period of six weeks. At branches supervising manager of trainee officer critically review the employee interest in job training and his performance, normally after six months, probationary officer are confirmed on their satisfied performance. However management feel that employee needs further training probationary period may also extended. The training program of MCB is as follows: Pre-service training In-service trainingPRE-SERVICE TRAININGImmediately after the selection of employees this type of training is given. Duration of pre-services training period is of six months. In such a training operational practice and banking operational disciplinary courses are brought.IN- SERVICE TRAINING:The in-service training period time duration to the employees during the service is of three months. This sort of training helps in introducing them to the latest teaching and methods of business.Our education systemic primarily generalized, designed to provide guidelines to students fortheir overall career advancement. It is not designed to teach specific job skills for positions in particular companies or organizations. To overcome this deficiency of our educational system, many organizations have to setup their own training centers and programs. ON The Job Training Off The Job TrainingThe new probationary officers and management trainees selected this year will be given 3 months off the job training along with 3 months on the job training. Previously the duration of total training was 1 year. Off thejob training is given at one of the three training institutes of MCB at Karachi, Lahore, and Islamabad. Professionalism is the core objective at these training institutes. The common methods used for training includes: Lectures and classroom discussions Conceptual exercise and problem solving Tutorial and syndicate discussion Analytical report and group presentation Penal discussionON THE JOB TRAININGThe total of 6 months of training include 3 months on the job training at different branches in order to be conversant with all operations of retail banking, credit and marketing, foreign exchange etc. the trainee is rotated at different branches, so that he learns to adapt himself/herselfquickly to different working conditions and branch cultures. Usually on the Job and Off the Training are provided to trainees simultaneously. After the training the trainee is kept at probation for another six months. The successful completion of probationary period entitles the trainees to permanent appointments ranking. Purpose of on job training

Increase productivity Reduced employee turnover Increased efficiency resulting in financial gains Decreased need for supervision

Organizational Development and Talent ManagementIn this unit, the HR officer basically determines the Headcount which is the primary and important factor for recruitment. HR heads initially designs the forecasted headcount for the year according to the budget. As said by the recruitment HR officer there is not a signal day when I have seen recruitment got stopped? Here, in MCB it is an ongoing process.The OD& TM officer determines the existing headcount? And how many could be hired? Every time there comes a new hiring first the recruitment officer confirms the available headcount and gets the approval to further proceed with the hiring.PROMOTIONPromotion refers to a change or movement of an employee in vertical direction involving greater responsibility and authority and also an increase in salary, better service conditions, and position and rank 23. The purpose behind a promotion policy is to attract and retain qualified people, promote job satisfaction, recognize better performance and motivate the employees.The promotion policy of MCB is solely based on seniority. Officers are promoted to higher grades after having fulfilled the minimum experience required for the grade. Minimum experience required for promotion to various grades is as under:

Promotion Minimum ExperienceOG-III to OG-II5Years

OG-II to OG-I4Years

OG-I to AVP.3 years in the grade and minimum 8 years banking experience

AVP to VP3 years in the grade and minimum 10 years banking experience

VP to SVP3 years in the grade and minimum 13 years banking experience

SVP to EVP3 years in the grade and minimum 16 years banking experience.

EVP to SEVP3 years in the grade and minimum 19 years banking experience.

PERFORMANCE & Compensation

PERFORMANCE APPRAISALIt is the description of job-relevant strengths and weaknesses of an individual or a group. Performance appraisal in MCB involves making ACRs of the subordinates. That is, a branch manager writes the ACRs of employees in his branch, a Regional Manager writes the ACRs for the various Branch Managers working under him and so on. ACRs are sent to the GM Office from where they are forwarded to the Human Resource Division. For the evaluation of the performance of the employees, the bank takes the following steps. Audit Report Inspection SanctionAUDIT REPORT:This report is prepared by the auditors of the bank every year & it emphasis on management business transaction functions. This audit report indicates the yearly performance of every worker.INSPECTIONA team is selected by headquarter. Then teams inspect the performance of the branch. The member of these teams also contracts the clients, of the bank and inquires about the performance of the bank.SANCTIONIn this, a case punishment is awarded to the employee of misconduct or bad performance. Stopping promotion and business like actions are taken.

COMPENSATION

Any remuneration to an employee for services performed, including wages, salaries, fringe benefits Etcetera.MCBawardstheiremployeesalucrative compensation in return of their tough mental labor. Apart from basic salaries they are offered many other benefits like utility allowance, medical allowance, overtime allowance, education allowance, house rent allowance, bonuses etc. They are also offered non-interest loans from the bank.REWARDThe rewards are given in a monetary form; it is all on merit basis. The Institute of Bankers Pakistan (IBP) is Pakistans only recognized Institute dedicated to providing technical training services for the banking industry in the country. The Institutes mission is to train and develop a sound human resource base for the financial sector and to work for continuous learning and professional development of bankers. MCB has set three stages and 3 type of criteria for the applicants of IBP exams. Employees appears in exams on clearance of 1st exam they receive cash rewards and then they proceeds to next stage and give exams on more professional courses, same on its clears they receive above 60K, and then the last stage come when they give the final exam in which employees specializes in the desired courses.FRINGE BENEFITS:Fringe benefits are given to the employees in addition to their regular salaries, these include all expenditure designed to benefit employees over and above regular basic pay and direct compensation related to output.Employees of MCB shall be eligible to: Residential Facility Medical Facility House Building Motor Car Motor CycleBesides, the Bank offers attractive increments for higher qualification in the following way: BATwo Increments MAThree Increments IBP-ITwo Increments or cash prizes IBP-IIThree Increments or cash prizes.HR FINANCIAL SERVICES DEPARTMENT

The HR FSD unit is most confidential unit of all dealing with the sensitive employee records including wages, loans. In other words, when it comes to money the case always gets sensitive. Umer Naeem Khan is the Head of this unit. Following are the units of FSB Payroll Staff Loan Financial Settlement Provident Fund Sap System SupportPAYROLLPayroll is about gathering employee data through time, attendance and calculating deductions & taxes and generating payable taxes & generating pay Cheque as well as employee report.After resignation there is a three month procedure of until the employee gets the resignation letter.STAFF LOANBasically, there are some parameters defined in policies for loan issue. On that basis, the staff loan officer processes the loan request. Every employee and worker is eligible to ask for load except for the outsourced employees.FINAL SETTLEMENTThe final settlement process comes when the employee apply for the resignation Or at the time of retirement or in any case of leaving the job including Termination.There are two types of retirement Pre-Mature Super Annotation

PRE-MATUREIn this case employee can plan their future, by getting retired before 60.PENSIONEmployees do get the monthly pension 6000-6.5K. In case of death their first family relation Husband/Wife may get the Pension.LOAN TAKE OVERIf the employee is under debit then and he wants to proceed his employment in any other bank then the respective bank will pay the loan to MCB on the behalf of employee in order to clear his record according to their policy. And then the employee proceeds to pay the remaining debit amount to the next bank.NON REFUNDABLE LOAN:Employees above 50 ages can withdraw 60% amount from their funds.PROVIDENT FUNDIt is a fund for which employer and the employee both pay money regularly, so that when the employee retires or leaves the company, he or she receives a sum of money.In MCB there is a 16% markup amount from funds. And there is 33% contribution on the behalf of the bank. This contribution is made on the basic salary.

TERMINATION/ DISMISALIn case of violation employees can be fired. And in this only own contribution will be given from provident fund. Bank wont liable to pay its contribution.PAY SLIPIt is a salary slip on which the monthly salary is mentioned along with the rewards and allowances.DISBURSEMENTAmount paid for goods and services that may be currently tax deductible. The bank requires the credit approval on debt burden.TYPES OF LOAN House Building Finance (mortgage) Car Loan Motor Load Provident Fund Computer Finance Family Finance

HR Relationship Unit

LEAVE POLICY:According to the leave policy of the Bank following types of leaves may be granted to employees:Leave on full pay:The maximum period of leave on full pay, that may be granted at one time, be as follows: Without medical Certificate120 days With medical Certificate180 days.Leave on half pay:There is no limit on the grant of leave on half pay.

TERMINATIONThe employees of MCB can be terminated in the following three ways:An employee shall retire from service if: She/he has completed 30 years of service in the Bank, or She/he has attained the age of 58 years.An employee may offer his/her resignation by giving written notice. This notice must be given three months before in case of officers and one month before incase of clerical and non-clerical staff.An employee may be dismissed from service if charges against him/her proved after conduct of enquiry.RETIREMENTSEmployees at all levels in MCB get retirement after completion of 30 years in services or reaching an age of 60 years. The bank operates the following staff retirement benefit schemes for its employees Foremployeeswhodidnotoptforthenewscheme,thebank operatesapprovedcontributory provident fund. Approvedgratuityscheme for new employees and for those who opted for the new scheme introduced in 1975 for clerical staff and in 1977 for officers, the bank operates the following:

Anapprovedfundedpensionschemeforwhichmonthlycontributionsaremadeonthebasisofactuarial recommendations. An approved non-contributory provident fund introduced in lieu of the contributory provident funds), for AVPs and above cadre andemployees in officers cadre joining after January 1, 2000.

Meetings There is no proper time period of holding a meeting in the organization. There are different rules and policies in different departments. Meetings are held as per requirement.Training programInquiry of employee filesDuring my internship, I was assigned a special project of checking employees files and to check their qualification and their degrees and report it to the concerned officers to check it from the concerned board or university. The purpose of this task was to check the authenticity and validity of the degrees.During this project, I checked all the employees files assigned to me and checked their relevant documents and reported to the concerned officer.DocumentationI was handed over the duty of documentation of pre-employment and employment letters of all employees working there and to arrange them in sequential order after checking the letters and documents. These documents included the following: Joining report Employment data Old age benefits Blood group report Code of conduct References Medical certificate Letter of employment Approval Educational certificates and degrees

Filing of documentsI was also assigned a task to put all the sequenced documents in the file to be easily available whenever required. A separate file has to be maintained for each employee working there so that his/her employment record and personal data be easily available all the time when required.Every employee is assigned a number for identification in the organization that has to be mentioned in documents and also in the top of file.I had to mention the following information in the file: Number of employee assigned by the organization Name of employee working in the organization Date of joining of the employee Grade of employee CNIC Date of birth Documents that are filed

MARKETING MIX OF MCB BANK LIMITED

Marketing is the task of creating, promoting and delivering goods and services to consumers and businesses. Organizations identify and profile distinct group of buyers who might prefer or require varying products and marketing mixes. The customer seeks for value and satisfaction. The organizations can increase the value of the customer offering in several ways e.g. raising benefits, reducing costs etc. marketing mix is a set of marketing tools that the firm uses to pursue its marketing objectives in the target market. These marketing tools are known as 4 Ps of marketing. These four marketing tools are viewed as 4cs by the consumers.

4 Ps 4 Cs

Product/ Service Customer Solution

Price Customer Cost

Place Convenience

Promotion Communication

To identify the customer needs and fulfilling hem is the basic objective of an organization. Marketing is not just satisfying your customers, you have to delight them and this can be done by acting upon this phrase. Under Promise and Over DeliverMCB Bank provides a winning combination of products and services to its prime customers. It is one of the countrys leading commercial banks, which ensures complete security, and reliability in all-financial transactions.

PRODUCT MIX & PRICES OF MCB BANK

MCB Rupee Traveler Cheque

MCB Rupee Travelers Cheques are as good as cash, in fact better. Better because with Rupee Travelers Cheques you have the power to purchase and a feeling of security that should you lose them, you will get a refund.MCB Rupee Travelers Cheques are accepted at major shops, travel agents, hotels, business establishments and MCB branches all over Pakistan. You don't have to be an MCB account holder to buy the Rupee Traveler Cheques. Anybody can purchase them. It's a safe and convenient way to conduct everyday business. At a time when thefts and robberies are on the increase, you are better off carrying Travelers Cheques rather than money.

1. Mahnama Khushali Scheme

A 5- year fixed Deposit Scheme, targeted to persons with small savings who would desire a regular monthly return on their investment.

Salient Features Minimum amount of investment shall be Rs.0.010m and the maximum amount of investment would be Rs. 1.000m. Khushali Certificates can be purchased by individuals (singly or jointly) or by the Proprietorship/Partnership concerns or Companies, etc. in their name The Khushali Certificate will be of five years maturity. The interim rate of profit offered will be minimum 1% per month. If the profit declared by the bank is higher, additional profit will be paid. Zakat will be deducted wherever applicable on yearly basis whether you will be receiving your profit or encashing your certificates. As per Government Directions, tax on the profit / return is to be deducted by MCB branches at the time of payment.

2. MCB KhushaliBachat Account

Salient Features

8% rate of return per annum. Returns calculated on daily. Average balance and paid half yearly. Introduced first time in Pakistan. The facility of helping account holders pays utility bills (electricity, telephone and gas) through their account. No queues. No delays.

3. Prime Currency Account Scheme It is launched to attract deposits in foreign currencies, Us Dollars, Pound, Sterling, Euro and Japanese Yen.

Salient Features

Owing foreign currency account under the Prime Currency Scheme allows you to earn attractive rates of interest in foreign currency. You have a choice between opening this account in your personal name and opening it under joint names. Whether you are a resident or a non-resident Pakistan, MCB Prime Currency Scheme invites all to operate a foreign currency account. Foreign nationals and foreign companies can also open a foreign currency account under the Prime Currency Scheme. Your foreign currency account can be opened in four global currencies: The United States Dollar, the Pound Sterling, the Japanese Yen and the Euro. Travelers Cheques and Foreign Currency Notes can also be issued to holders of personal and Joint accounts. Rupee Loan facility will also available against this account. You can draw any amount of foreign exchange from your foreign currency account and transfer or remit the amount freely to any part of the world without any restrictions. The restrictions imposed by the State of Pakistan for the opening of foreign currency accounts in case of passport; Work-permit and resident Visa have been withdrawn. Your account will be restriction free. The Prime Currency Scheme is exempt from all forms of taxes including Income Tax, Wealth Tax and Zakat deductions. MCB Prime Currency Scheme is a world in itself.

4. Hajj Mubarak SchemeA saving scheme, of 2/3 years duration, for the convenience of persons, with a limited income, who desire to perform Hajj was introduced.Under the 2 years scheme, a monthly deposit of Rs.1800 is required, whereas under the 3 years scheme, the required monthly deposit is only Rs.1200

5. Capital Growth Certificate Scheme For long term depositors under which the amount deposited almost doubles at the end of 5 years. For the scheme, the minimum amount of deposits is Rs. 10000 while there is no maximum limit. In case of premature encashment of the certificate, the depositor will profit at the same rates as that of PL Saving Account. Fund Management Scheme This scheme is offered to corporate and customers and is aimed at providing better rate of return up to 15% per annum. One of the objectives of the scheme is to develop secondary market for Government Securities.

6. Consultancy Services In the process of privatization of public sector units, prospective buyers need professional assistance and MCB, with its expertise, offers to them specialized service for valuation of the market value of the industrial unit, preparing bid documents and arranging finance for the purchase of the unit.

7. Self Supporting Scheme

For the benefits of genuine worker/borrowers who are poor and needy and for small entrepreneur the bank as evolved a self supporting scheme: maximum amount of loan Rs.25000 and minimum Rs.5000 per individual. Loan will be totally free of mark-up.8. Fax Press This product was first of its kind introduced by using modem technology of The Fax Machine. It facilitates speedy transfer of funds within Pakistan. The service guarantees transfer of from one city to another, within an hour.9. Night Banking Service For the convenience of the account holder, service has, especially, been introduced at busy commercial centers. Traders and other clients can now make deposit, with case, at such centers up to 8.00PM.

10. Utility Bill Collection With the aim of extending this service to wider range of customers, the number of MCB branches collecting Utility Bills more than 900.

11. MCB Mobile Banking At the forefront of technological excellence, MCB proudly introduces MCB MOBILE BANKING*. The convenience of accessing account balance information and mini statements whenever want or wherever may need them, with comfort and peace of mind. MCB Mobile Banking service is available to all MCB ATM cardholders, 24 hours - 365 days.

MOBILE BANKING AT A GLANCEMCB Mobile Banking gives easy and quick access to account(s) at a time find convenient, including all holidays.

With MCB Mobile Banking Check balance View the last 4 transactions of your MCB account(s). A FREE SERVICE

MCB Mobile Banking is a free service for MCB account holders who have an ATM card of an SMS message if charged by the service provider. Banking at fingertips Dial in anytime to get information regarding balance and mini statements.

12. MCB Islamic Banking Services Islamic banking services through exclusive units/branches offering a range of liability and asset based Sharia compliant products like Musharika, Murabaha, Ijara and Istasana.

13. MCB Car Cash Car financing and leasing at competitive rates with flexible options Car cash finances both semi-commercial and non-commercial vehicles for personal and business use. 14. MCB Locker The best protection for your valuables. Lockers of different capacities are available nationwide15. MCB Master Card

THE FUTURE OF MONEY

Since the beginning of time, people have tried to find more convenient ways to pay, from gold to paper money and checks. Today, money is moving away from distinct hard currencies and towards universal payment products that transcend national borders, time zones, and, with the Internet, even physical space.Plastic or "virtual" money, credit, debit, and electronic cash products, inevitably will displace cash and checks as the money of the future. MasterCard International has expanded globally in more locations in the world than any other card. The card was introduced by MCB Bank Limited in 1995 and now offers card members over 15 million outlets in 232 countries.

Photo security- The first bank in Pakistan to introduce the enhanced feature of photograph on the card limiting fraud in case of card loss. Welcomed at over 3, 000 outlets in Pakistan. Provides up-to 45 days Free Credit. Joining and Annual Fees to suit you. 24 Hour Customer Services- Call 111-700-700 and you can get information from our customer services representatives on new card application or have your queries resolved anytime of the day. Cash Advance FacilitiesAvailable in Pakistan and worldwide with a network of over 1,000 branches and a team of dedicated professionals, MCB is Pakistans largest private sector commercial bank.Our Consumer Banking provides customers with innovative saving schemes, products and services. Our ATM network is the largest in Pakistan and our Pak Rupee Travelers Cheques are market leaders. We were the first to introduce the photo card with the introduction of the MasterCard.Our Corporate Banking ensures assistance from a dedicated team of professional financial advisors for underwriting, project finance or corporate advisory services.

When it comes to banking practices, you can depend on us. Weve been around for over fifty years.16. MCB Smart Card MCB now brings you MCB SmartCard -a secure and convenient instrument of payment with unmatched

functionalities. It provides 24-hour direct access to your bank accountThe convenience and flexibility of MCB SmartCard will help live a smarter life. It not only helps you manage your expenses, but also avoids undue interest on your day to day credit card transactions. Your balance is always within your reach and you spend accordingly.MCB is the only bank to introduce a debit card that gives the option to choose from domestic and international card for local and global usage respectively17. Remit Express Fastest to Pakistan Anywhere in Pakistan.The fastest way of getting your money across to Pakistan. Remit Express offers low cost remittance from U.A.E. and Saudi Arabia. Your relatives, friends or business associates receive drafts within 72 hours.MCB Remit Express has been specifically designed to meet the needs of the expatriate Pakistani community residing in the Gulf countries.18. Easy Personal Loan Helping You Do MoreMCB Easy Personal Loan provides you with the financial advantage to do things you've always wanted to but never had the sufficient funds for. Take that much-needed holiday. Buy a car. Refurnish your house. Purchase a new TV. Finance a better education for your children.Salient Features

MCB will lend you any amount, from Rs 30,000 to Rs 490,000, depending upon your net monthly income You can choose tenure of 1 to 3 years for the repayment of the loan Bank to Bank Balance transfer Credit Card balance transfer

Loan Protector Shield- insurance coverage of balance loan amount in case of death or permanent and total disability Availability of early repayment option Repayment Arrangements Repayment of principal and mark-up is monthly and can repaid using either one of the following modes: Direct Salary Transfers Payroll Deduction

Eligibility Criteria Minimum net monthly income Rs 10,000 25 to 55 years of age Pakistani national At least 2 years of employment with current employer. Processing fee of 1% of the principal loan amount to be charged at the time of loan disbursement.19. MCB PyaraGharMCB gives dream home at the lowest and best possible mark-up rates. You can choose either one of our two mark-up rate options- fixed or variable.Early repayment option tailor-made to allow making partial prepayments at dates that suit. Who Can Apply Anyone who fulfills the following criteria is eligible to apply: Pakistani national residing in the city and area where the product is launched. 25 years old or above when you apply and under 60 at the time of maturity of the applied financing period. Salaried person, self-employed professional or a businessman with a verifiable monthly income stream.

Net take -Home income not less than Rs. 25,000 per month. Have 5 years or more of business or professional experience. Employed with the present employer for 2 years with a total employment history of 5 years. Home Purchase Home Renovation Home Construction Tenure 3 years to 15 years 2 years to 5 years 3 years to 15 years20. MCB Virtual MCB Virtual provides the continence of banking on internet. Whether at office or home or traveling. Log on at www.mcb.com.pk and enjoy 24 hours access of all your accounts for the largest array of service.21. MCB Business SarmayaMCB Business Sarmaya is a running finance against your residential property. It offers running finance up to 20 millions with low markup.22. MCB Car 4 UMCB car 4 u auto finance is a power move that gets you not only a car of your own choice but leads you best in life. It is affordable with competitive markup, flexible conditioning and easy processing and above all no hidden

Placing Strategies OF MCB BANK

The location of the bank plays a vital role in making its operations profitable. If the bank is located in some business center then it will be very easy for it to attract business people as its customers. Therefore MCB has most of its branches at places where it can reach its targets customer easily. The branch network of MCB is given as follows:Punjab700

Sindh 300

NWFP123

Blochistan34

Azad Kashmir19

Domestic1176

Overseas4

Total 1180

Promotion Strategies OF MCB BANK

MCB Bank is actively participating in promotion of its products and services through advertisement and other promotional schemes.Initially, the bank focused on the upper class customers only and offered products for a limited class of people. But now the strategy has been changed and the bank is now targeting the middle market also. The products offered are of diverse nature to cater the needs of maximum number of people.

Customer Oriented Attitude

MCB Bank values its customers. Customers complaints are encouraged because it gives an opportunity to know the needs of the customer and build more confidence in them.Most of the promotional efforts are done through

Direct marketing Public relations

MCB bank sometimes gets suggestions and recommendations from its good customers.

Branch layout is being designed in such a way that more and more customers are attracted. Some of the branches of MCB Bank have a very good entrance and outlook but many still need to be improved.

FIELDS OF ACTIVITIES

The purpose of banks is to provide some services to the general public. And for this purpose different banks provide different services to the people in different forms. The MCB Bank is a commercial bank, in modern time commercial banks play a very important role and their functions are manifold. The main functions and services which MCB Bank Limited provides to different people are as follows.

1) Open Different accounts for different peoples2) Accepting various types of deposits3) Accepting various types of deposits4) Granting loans & advances5) Undertaking of agency services and also general utility functions, few of those are as follows:

Collecting cheques and bill of exchange for the customers. Collecting interest due, dividend, pensions and other sum due to customers. Transfer of money from place to place. Acting an executor, trustee or attorney for the customers. Providing safe custody and facilities to keep jewellery, documents or securities. Issuing of travelers cheques and letters of credit to give credit facilities to travel. Accepting bills of exchange on behalf of customers. Purchasing shares for the customers. Undertaking foreign exchange business. Furnishing trade information and tendering advice to customers.

For proper functioning of branches and the overall bank has been divided in different departments. These departments handle different jobs so that division of work is there for improvement of functions and also it is easy to control the situation. The general division in a branch is as follows:

1. Cash department 2. Deposit department3. Advances & credit department4. Remittance department5. Foreign exchange department 6. Technology department (new addition in order to cope with the growing needs of day to day technology requirements)

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 add 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.

ATM NetworkATM stands for Automatic Teller Machine. This machine is used to transact in one's account without intervention of humans. These machines are basically used for taking cash, confirming balances and requesting statements / chequebooks.MCB has the largest ATM network in the country at the moment with almost one ATM at each online branch and also ATM terminals at International Airports. This network covers more than the 27 cities of Pakistan including the provincial capitals and large commercial cities of the country.ATMs are operated through a card issued to the valued customers and by application of Personal Identification Number (PIN number). A person can withdraw from any machine across Pakistan with having an account in only one branch of MCB. This was only possible with the help of online system. In this system all the machines are linked to central banking host at IRM division Karachi through either satellite or telephone controller. This system identifies the card holder and his PIN Number. Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard. This contract will enable an ATM card holder to use his account even when he is out of country at all the ATMs where Cirrus logo is displayed. Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/- in a day. The annual fee for this card is Rs. 300/- only. Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day. These cards are issued to the persons having more than Rs. 500000/- as their average balance. International Cards are issued in collaboration with Cirrus and are useable all over the world with maximum withdrawal facility according to the standards of Cirrus.

Financial analysis of MCB

BALANCE SHEET

20132012

(Rupees in thousands)

ASSETS

Cash 38774871 396311 72

Balance with other banks60099934043100

Lending to financial institutions30000004100079

Investments_ net16713446596631874

Advances net 253249407262135470

Operating fixed assets1801489617263733

Deferred tax assets_net

Other assets_net2304009519810476

509,223,727443,615,904

LIABILITIES

Deposits and other accounts367604711330181624

Borrowings from financial inst.4466208822663840

Bills payable820109010551468

Other liabilities 1581908221345781

Deferred tax liabilities 3196743437137

Sub ordinated loans----------------------

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

439,483,714385,179,850

NET ASSETS69,740,01358,436,054

REPRESENTED BY

Share capital69110456282768

Reserve 3838576036768765

Unappropriated profit157791279193332

61,075,93252,244,865

Surplus on revaluation of assets86640816191189

69,740,01358,436,054

PROFIT & LOSS ACCOUNT

20132012

(Rupees in 000)

Mark-up/return/interest earned51616007 40043824

Mark-up/return/interest expensed 1584146311560740

Net mark-up/interest income35,774,54428,483,084

Provision against non-performing loans and advances5796527 1335127

Provision for diminution in the value of investments 1484218 2683994

Bad debts written off directly41576 ---------

7,322,3214019121

Net mark-up/interest income after provisions28,452,223 24,463,963

NON MARK-UP/INTEREST INCOME

Fee commission and brokerage income 3331856 2953394

Dividend income459741 617554

Income from dealing in foreign currencies341402 727564

Other income736118 855697

Gain on Investments773768 740429

Gain / Loss on trading in government securities-------- (103198)

Total non-mark-up/interest income5,6428855,791,440

NON MARK-UP/INTEREST EXPENSES

Administrative expenses101071897546878

(Reversal) / Other provisions142824 23135

Other charges690150 817824

Total non-mark-up/interest expenses 10,940,1638,387,837

PROFIT BEFORE TAXATION23,154945 21,867,566

Taxation current year7703305 7341257

Prior years(2232226)(864824)

Deferred218856916533

7,659,6486,492966

PROFIT AFTER TAXATION

15,495,297 15,374,600

Unappropriated profit brought forward91933325130750

Transferred from surplus on revaluation of fixed Assets22324 21319

9,215,6565,152,069

Profit available for appropriation24,710,95320,526,669

Unappropriated profit carried forward

Basic and diluted earning per share after tax22.4222.25

CASH FLOW STATEMENT

20132012

(Rupee in 000)

CASH FLOW FROM OPERATING ACTIVITIES

Profit/(Loss) before taxation2315494521867566

Less: Dividend income(459741)(617554)

22,695,20421,250012

Adjustments for non-cash charges

Depreciation909471815205

Amortization intangible assets153397142005

Provision against non-performing advances57965271335127

Provision for diminution in the value of investment14842182683994

Provision for diminution in the value of other assets14282410120

Bad debts written off directly41576------

Operating fixed banking assets written off17477------

Gain on disposal of fixed asset-net(30614)(39777)

Deficit on revaluation of held for trading securities--------103198

8,514,8765,052,872

(Increase)/Decrease in operating assets31,210,08026,302,884

Lendings to financial institutions1100079(3048707)

Lendings to f.institutions9417620273

Advances3047960(44884999)

Others assets(3416086)(1898841)

(Increase)/Decrease in operating assets8,26,129(49,812,274)

Bills Payable(2350378)72410

Borrowings from financial institutions 21998248(16742991)

Deposits3742308738176089

Other liabilities(6641481)11914367

50,429,47633,419,875

82,465,6859910485

Income tax paid(4317603)(7878947)

Net cash flow operating activities78,148,0822,031,538

CASH FLOW FROM INVESTING ACTIVITIES

Net investments in available-for-sale securities(72317445)15058126

Net investments in held-to-maturity securities3303107(5550843)

Investment in subsidiary and associated companies(394)---------

Dividend received446181621763

Investments in operating fixed assets(1893986)(2153151)

Sale proceeds of fixed assets disposed of93092258177

Net cash flow from investing activities -70,369,4458,234,072

CASH FLOW FROM FINANCING ACTIVITIES

Redemption of subordinated loans-----------(479232)

Dividend paid(6735510)(9834175)

Net cash flow from financing activities (6,735,510)(10313407)

Ex. difference in cash transactions in foreign branches67465230667

Increase/(Decrease) in cash and cash equivalents1,110,5921,82,870

Cash and cash equivalent at beginning of the year44,315,96545,407,542

Effects of exchange rate changes(641693)(1916140)

43,674,27243,491,402

Cash and cash equivalents at end of the year44,784,86443,674,272

FINANCIAL ANALYSIS

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

RATIO ANALYSIS

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

Financial ratios can be divided into the following six parts.

A. Liquidity ratiosB. Activity ratiosC. Leverage ratiosD. Profitability ratiosE. Investor ratiosF. Bank special ratios

A. Liquidity ratios Current ratios Quick ratios Absolute Liquid ratio

B. Activity ratios Inventory turnover ratio Average collection period Average payment period Total assets turnover ratio

C. Leverage ratios Proprietary ratio Debt ratio Debt to Equity ratio Debt to Tangible net worth ratio External-Internal Equity ratio

D. Profitability ratio Return on total assets Return on-equity Return on investment Return on fixed assets Average profit per branch Net profit Margin Interest income to total income Interest expense to total expense Return on advances

E. Investor Ratios Earning per share P/E ratio Dividend per share Dividend yield ratio Dividend payout ratio Break up value/Book value per share M/B ratio

F. Bank special Ratios Earning assets to total assets Return on earning assets Equity to total assets Deposit time equity Loan to deposit ratio

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

LEVERAGE/SOLVENCY ANALYSIS

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

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

1. Proprietary Ratio

Total equityTotal Assets=

Year2013 (000)2012 (000)

Total Equity6974001358436054

Total Assets509223727443615904

Ratio0.3140.13

2. Debt Ratio/ Solvency Ratio

Total equityTotal Assets=

Year2013 (000)2012 (000)

Total Debts439483714385179850

Total Assets509223727443615904

Ratio0.860.87

3. Debt to Equity Ratio

Total DebtEquity =

Year2013 (000)2012 (000)

Total Debts439483714385179850

Equity6974001358436054

Ratio6.366.59

4. Debt to Tangible Net worth

Total DebtEquity=

Year2013 (000)2012 (000)

Total Debts439483714385173850

Tangible net worth1776665417072535

Ratio7.8520

TNW=OFA-ITFA

1. External Internal Equity Ratio

External EquityInternal Equity=

Year2013 (000)2012 (000)

External Equity439483714385179850

Internal Equity6974001358436054

Ratio6.366.59

Interpretation

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

PROFITABILITY ANALYSIS

Profitability analysis of a firm indicates the overall efficiently of the management. Without profit a company can not attract the outside capital. Profitability analysis includes: Return on total assets Return on-equity Return on investment Return on fixed assets Average profit per branch Net profit Margin Interest income to total income Interest expense to total expense Return on advances1. Return on Assets

Net Profit after TaxTotal Assets= 100

Year2013 (000)2012 (000)

Net Profit after Tax1549529715374600

Total Assets509223727443615904

Return3.043.46

2. Return on Equity

Net Profit after TaxEquity = 100

Year2013 (000)2012 (000)

Net Profit after Tax1549529715374600

Equity6974001358436054

Return22.22%26.3%

3. Return on Investment

Net Profit after TaxInvestment= 100

Year2013 (000)2012 (000)

Net Profit after Tax1549529715374600

Investment16713446596631874

return9%16%

4. Return on Fixed Assets

Net Profit after TaxFixed Assets= 100

Year2013 (000)2012 (000)

Net Profit after Tax1549529715374600

Fixed Assets1801489617263733

return86.01%89.05%

5. Average Profit Per Branch

Net Profit after TaxNo. of branches=

Year20132012

Net Profit after Tax1549529700015374600000

No. of branches10891089

Average Profit1422814118

6. Net Profit Margin

Net Profit after TaxInterest Income= 100

Year2013 (000)2012 (000)

Net Profit after Tax1549529715374600

Interest Income5161600740043824

Return30%38%

7. Interest Income to Total Income

Interest IncomeTotal Income= 100

Year2013(000)2012 (000)

Total Income5161600740043824

Interest Income1556276215605267

Return3.31%2.56%

8. Interest Expense to Total Expense

Interest ExpenseTotal Expense= 100

Year2013 (000)2012 (000)

Total Expense2678162619948577

Interest Expense1584146311560740

return59%57%

9. Return on Advances

Interest IncomeTotal Loans= 100

Year2013(000)2012 (000)

Interest Income51616007400443824

Total Advances/ Loans253249407262135470

return20%15%

Interpretation

Profitability analysis shows the entire performance of a business and if we study the profitability trend of bank then it will clear to us that it showing a positive trend. Net profit after tax is very slightly increased as compare to previous year, due to it return on assets, equity and investment is decreasing. Only overall profit is increased and where average profit of all the branches is increased. This year bank total deposits are also increased and thats why interest expenses are showing up ward trend.

INVESTOR ANALYSIS

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

Earning per share P/E ratio Dividend per share Dividend yield ratio Dividend payout ratio Break up value/Book value per share M/B ratio 1. Earning Per Share

Net Profit after TaxNo. of Shares =

Year20132012

Net Profit after Tax1549529700015374600000

No. of Shares691104527628276843

Earning2.242.44

2. P/E Ratio

MP Per ShareEPS =

Market price per share is Rs.189.06 on 24th Aug.2