Contents Page Number

BANKS AND THE IMPORTANCE OF BANKING 2

IMPORTANCE OF BANK 2
HISTORY OF BANKING IN PAKISTAN 3
AN OVER VIEW OF BANKING IN PAKISTAN 5
AN OVERVIEW OF MCB 6
CORE VALUE 7
OBJECTIVES OF MCB 7
DEPARTMENTS OF MCB 8
CASH DEPARTMENT 8
PAYMENT OF CHEQUES AT COUNTER 9
ACCOUNTS DEPARTMENT 11
CLEARING DEPARTMENT 12
REMITTANCE DEPARTMENT 15
ADVANCE DEPARTMENT 17
MCB FINANCE 18
TYPES OF FINANCE 20
IMPROVEMENT IN SERVICES AFTER PRIVATIZATION 21
COMPARISON OF INVESTMENT SCHEMES 22
VARIOUS SCHEMES OFFERED BY MCB 23
MCB DEBIT AND CREDIT CARD 26
TYPES of MCB ATM Cards 27
CONCLUSIONS 31
RECOMMENDATION 32
BIBLIOGRARY 33

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BANKS AND THE IMPORTANCE OF BANKING
Some authors are of opinion that the word bank is derived from the words
“Banco”, Bancus” or “Banquet” which means “Bench” (Gillani & Sariwal, 1994).
This is attributed to the fact that the Jewish transacted the business of money
exchange on bench in market place. According to Banking Companies Ordinance 1962 “
Banking is business receiving for lending or investment, of deposits of money, from
public repayable on demand or otherwise and which draw able by cheque, draw and order
or otherwise”.
A simple definition of bank is”
“An institution whose debts are widely accepted in settlement of other people’s
debt to each other.”(Gillani & Sariwal, 1994, p.1).

IMPORTANCE OF BANK
Bank plays an important role in promoting economic development of a country.
Bank provides necessary funds for executive program in the process of economic
development. They collect savings of large masses of people scattered throughout the
country, which is the absence of bank world have remained idle and unproductive. These
amounts are collected, pooled together and made available to commerce and industry for
meting the requirement. This provides finance for successfully carrying on various stages
of production as well as distribution.
Bank stimulate the habit of savings amount people by the security and interest
they offer with these savings which are deposited by people are in position to utilize the
deposited amount more productively.
The bank increased the transaction capacity of the customers by advancing loans
when they require for additional funds to finance their expanded program of transaction.
In short, the economic development of a particular country depends on the sound banking
system (Gillani & Sariwal, 1994, p. 13).

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HISTORY OF BANKING IN PAKISTAN
At the time of independence on 14th august 1947, there were 487 branches of all
banks operating in the new territory of Pakistan. After 1 year 292 branches windup their
business in Pakistan and remaining 195 branches restricted their banking operating at a
minimum level.
Up to 1948’s half year imperial bank of India also worked as an agent of Govt: of
Pakistan & reserve bank of India.

On 1st July Quaid-e- Azam Muhammad Ali Jinnah inaugurated the state bank of
Pakistan by passing banking act in December 1948 with the power to control the
operation of banking companies in Pakistan with extensive power to work as central bank
of Pakistan.
The important task of SBP was creating a sound banking system in country. For
the help of SBP court the Govt: of Pakistan set up a new bank namely National Bank of
Pakistan, to serve as agent of Pakistan.
Along with other steps take by the SBP it also issued Pakistani currency notes in
October 1948 in the denomination of Rs: 5, 10, and 100.
For expending business foreign banks, operation was permitted and some other
operations were prohibited up to some limits and liquidate some unsound banks.
In the banking system of Pakistan commercial banks and development financial
institutions and investment, oriented institutions has played a very important role for
improving the economy of the country.
The DFI s consist of about 9 financial institutions which objects, which vary from
once another Pakistan Industrial Credit and Investment Corporation (PICIC) was
established in 1957 with objects to provide financial and other assistance to the industrial
Pvt. sector for increasing the base of industrialization in the country. Eventually this
institution could not accelerate the industrial development and other (DFI) namely
Industrial Development Bank of Pakistan (IDBP) was established in 1949. The main
object of IDBP is to provide loans to industrial sector to accelerate the pace of
industrialization.

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 Basically Pakistan is agro _ based county and 70% population is dependent on
this sector, which is back bone of the country’s economy .To achieve the maximum
degree of production in this sector got of Pakistan planned to introduce the agricultural
technology and agricultural inputs by offering credit faculties to the agriculturist through
agriculture development bank of Pakistan (ADBP) which was established in 1961 by
merging agriculture development Finance Corporation in 1961.
Another DFI; NDFC was established in 1973 with object to provide financial and
technical assistance for the growth of economy. This institution facility especially the
large enterprise in public sector and provides loans in local and as well as foreign
currency.
Over comes the deficiency of financing in private sector and to accelerate the
pace. Banker’s equity was established in 1980 and was sponsored by SBP & Nationalized
commercial banks of Pakistan. The main objects were to bridge the gap in industrial as
Consequence of half cost of projects plus misappropriate matching resources with the
sponsors in existing financial institutions .The banker’s equity lay has been since
privatized.
For the development of any country employment plays very important role to
keep the train on the track. Employment enables people for purchasing the goods of other
industries in this way cycle revolves. For reducing the unemployment in country house
building Finance Corporation was established in 1952 with object to provide credit
facility to individuals, small firms.
For the foreign investment Govt: established the financial institutions with the co-
operation of brotherly Muslim countries e.g. Pak Libya holding company was incorporate

as a joins stock company on the 14th October 1978 for economic co-operation b/w the
Govt: of Pakistan and Libya in the same manner, Pakistan Kuwait company ltd was
established in 1979. With ltd liability under Pakistani law, in the result of joint venture
agreement signed by the Govt of Pakistan and Kuwait with initial capital of 250 millions
with object to promote economic and investment collaboration b/w Pakistan and Kuwait
by providing financial assistance in Pvt. public sector(Gillani & Sariwal, 1994).

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 Along with above (SAPICO) Saudi – Pak Industrial and Agriculture Investment
Co. Ltd. was established to fill the gap of matching recourses of sponsors. SAPICO was
established with initial, cement, sugar, vegetable and ghee etc.

AN OVER VIEW OF BANKING IN PAKISTAN

At the time of independence the areas, which now constitute Pakistan, were
producing only food grains and agricultural raw material. For Indo- Pak sub continent
there were practically no industries and whatever raw material was produced was being
exported from Pakistan. How ever commercial banking facilities were provided fairly
well here. There were 487 offices of scheduled banks in the territories now constituting
Pakistan.
As a new country without resources it was very difficult for Pakistan to run its
own banking system immediately. There fore in accordance with the provisions of Indian
independence Act 1974, an expert committee was appointed to study the issue.
On the recommendation of committee Reserve Bank Of India continued to function in

Pakistan till 30th September 1984, so that problem of time and demand liability, coinage,
currencies exchange etc be settled between India and Pakistan .it was decided that
Pakistan will take over management of public debt and exchange control from reserve

Bank Of India on 1st April 1948, and that India notice would continue to be legal tender

to Pakistan till 30th September 1984.

Following the announcement of independence plan in June 1947, the Hindus
residing in the territories now comprising Pakistan started transferring their assets to
India. Moreover the banks including those having the registered offices in Pakistan

transferred to India in order to bring a collapse of new state. By 30 th June 1948, the
number of offices of scheduled banks in Pakistan declined from 487 to only 195.
There were 19 non –Indian foreign banks with the status of small branch offices,
which were engaged solely in export of corps from Pakistan institutions I-e, Habib Bank
and Australia Bank.

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 The imperial Bank of India failed to work satisfactory .The Government of

Pakistan decided and established State Bank of Pakistan on July1 st1948 on the
recommendations of committee of experts (Nasir, 1999, 6-10).

The nationalization of Banks in Pakistan since January 1st1947 has heralded a

new era of development and progress. It has taken a complete baking system with effect
from January 1981. Privatization process of state owned banks and enterprises started in
1991.
From banking industry, the MCB was first bank, which has been privatized so as
to achieve the objectives of the bank with strict and progressive policies, and then ABL
was privatized. Yet some other banks I –e UBL and HBL are also being considered for
privatization decision already approved by previous caretaker Government (Annual
Report 2007).

AN OVERVIEW OF MCB
The Muslim Commercial Bank was established one month before the
independence in June 1947 first head quarter in Calcutta and after independence it was
shifted from Calcutta to Dhaka and afterward its Head quarter was shifted from Dhaka to
Karachi in 1948.

Among the other 22 scheduled banks with 3525 branches network nationalized on 1 st
January 1947 through the nationalization of Banks Act, 1974 under the nationalized of
the government. Muslim commercial bank also nationalized and at the time of
nationalization premier banks was merged in MCB LTD in 1974.
After the failure of the communism, it was realized though the world the idea of
nationalization was not correct and has no any positive effects on economy. This idea
developed especially in 1980 decade under which in sub-continent of Asia its importance
was also realized. In Pakistan Privatization and de-regulation policy was started in 1998
under this policy the first unit privatized was M.C.B with a view to stable the economy
and to reduce the burden on national exchequer of other sick units.
In 1990 this bank was announced for privatization on the grounds that 51% shares
would be for general public out of which 26% shares would be offered to a particular

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party which will take administration of bank and leady by Mian Mohammad Mansha who
was the first chairman of Muslim Commercial Bank LTD.
Now out of 10% shares only 14.90% shares are being held by State Bank of
Pakistan and all other being held by individuals, directors and joint stock companies etc
(Annual
Report of MCB 2007)

CORE VALUE
Trust
We are the trustees of public funds and serve with integrity & commitment. Ethical
behavior is of critical importance to us. We adopt full compliance with internal and
external policies and procedures, operating within the legal framework
Customer Focus
We continuously seek to exceed our customer’s expectations, forging and maintaining
long term relationships (Muslim Commercial Bank, Ltd).
Innovation
We strive to be the market leaders in innovative products and services offering
customized financial solutions with flawless execution (Muslim Commercial Bank, Ltd).
Teamwork
The diversity of our people is our strength. We inspire and challenge each other –
working together to achieve synergy (Muslim Commercial Bank, Ltd).
Achievement
Our people are our most valuable asset. We are committed to a result oriented culture. Our
goals are clear and merit is the only criterion for reward (Muslim Commercial Bank, Ltd).

OBJECTIVES OF MCB
The main objectives of M.C.B are to earn profit by investing the money of
depositors, who can not utilize that money for getting required .so the bank invests that
money in the shape of advances and shares, the return or interest charged on those
advances with the depositors. Beside above-mentioned objectives the Bank serves the
society by facilitating them in the shape of advances to industries etc (Annual Report,

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2007).

DEPARTMENTS OF MCB
MCB is one of the largest private banks of Pakistan. It offers a well-organized
structure of specialized services distributed among its various departments. This
departmental segregation provides MCB with more proper and professional approach and
efficient means of performing each service. Departmentalization makes the services more
proficient and specialized procedures for every job are used.
At each branch level the duties are divided into seven departments. There is a
chief manager at the top level of each branch. He is responsible for the overall
performance and working of his branch. The authority is then divided into two heads at
the next level. There is a credit manager who handles the credit department operations of
the branch. The other one is the operations manager who is responsible for all the rest of
the departments. Each branch is divided into the following departments:
 Cash department
 Clearing and collection department
 Remittance department
Qureshi. Hameed (personal communication, June 26, 2008)
The functions of each department and their operations are explained as follows:

CASH DEPARTMENT
Cash department is the back bone which is the receives cash from the depositors
and make payment to the holder of cheque, in cash department customers come and
deposits their surplus amount as saving and they may be able to draw the amount as
saving and they may be able to draw the amount to meet their needs as and when they
demand when the people come to get their maintain outward in the shape of (D.D, T.T,
M.T, P.O) from one place to another they deposit their money in the bank for that
purpose the bank can get money from State Bank of Pakistan. NBP (National Bank of
Pakistan) to adjusts and dealing properly and to carry on its business.
The casher of the department prepares two sheets one for cash receipt and other for cash

8|Page
payment. As and when customer come to deposit balance in their accounts called cash
deposit and to with draw balances in their accounts called cash payments. In the end pf
working hours the casher prepares daily cash book showing the remaining cash with him
after the payment and receipts this amount is known as closing balance of that day and on
the next day this will be considered as opening balance, the cash book contain the column
of PLS, Current & Other Accounts and the balances debited or credited in appropriate
amount heading, according to the nature of the transaction. The bank not only receives
the payment of electricity bills special schemes, which are operated through commercial
bank and the receipts of sponsorship scheme. T. Shaikh (personal communication, June
30, 2008)

PAYMENT OF CHEQUES AT COUNTER

The bearer cheques are paid at the counter, to the bearer of the cheque. When the
cheque is presented on the counter for payment, it must be properly scrutinized, it must
be that,
 The cheque has a proper number in series.
 The amount in words and figures tally.
 The cheque has signature of the payee on back side.
 The cheque is drawn on the bank where it has been presented.
After the basic checks the cashier checks the balance of the drawer is found
sufficient. He also keeps in the mind that cheque has not got stopped payment by the
drawer and either stop payment is order has been issued. The signatures on specimen
signature card are tally. After being satisfied in all these respects the payment is made to
the payee.
Stop Payment Order
To stop payment against any cheque the drawer writes an application to the
Manager of the bank when such application received the time is marked on it the
signature of applicant is verified from specimen signature card and stamp is affixed. This
stamp has blank lines for cheque no, favoring, date, time asked etc.

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Issue of Cheque Books
The cheque book is the most sensitive item of bank stationary, so due care is
taken in handling them. In Frere Road Branch the cheque book received from NIFT. The
customer are required to fill a cheque requisition slip which is different in case of new
account holder and existing account holder. For new account holders a separate slip is
provided while the others have attached the requisition slips in their cheque book, after
receiving their requisition slips. Separate requisition slips are filled are filled for each
account holder. Which are sent to NIFT in the same bag, which carries clearing? These
cheque books are received in five days.

At the top of each leaf of the cheque book the A/c number and at the place of
signature the name account holder is written a cheque. First seven digits in this number
are for serial number of cheque, next three digits for bank code and next digits for branch
code.
After receiving from NIFT these books are issued to account holder. The series of
cheques is written on the cheque requisition slip and signature of the A/c holder are taken
on same there the entry is made in register and slip is sent to computer operator to enter
the series of cheque numbers.

In order to receive the cheque book the account holder must have an authority letter from
the account holder. At the time of issuance of cheque book the signatures of the receiving
person to ensure that the right person is receiving cheque book. N. Memon (personal
communication, Aug 05, 2008)

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ACCOUNTS DEPARTMENT
Accounts department posts the day-to-day
transactions of every department. All the
departments have to submit their detailed
progress reports to this department.
Accounts department prepares the daily,
weekly, fro nightly, monthly, quarterly, semi-
annually, and yearly statements. Which are to be submitted to Head Office? In this
department of bank, different types of accounts are maintained. Customers who want to
open an account in bank have to interact with the officers of this department R. Ghumro
(personal communication, Aug 12, 2008)
Types of Accounts
Three main types of accounts are maintained in the bank are as follows:
Current Account
The current account can be opened in bank with the initial of Rs. 1000. The depositor
does not receive any interest against current account deposits. There are no restrictions of
withdrawal of money from the bank. But in case of over draft obtained by customer under
current account has to abide by the rules and regulations.
PLS Account
PLS account is based on the Profit and Loss Sharing. The amount, which is deposited by
the customers in the bank, is involved in business or it is landed to the investors, both are
bound to share and losses arising from such transaction.
Term Deposit Account
These deposits are called as time deposits, because the deposits are based on fixed
duration. The period for which these deposits are kept with bank ranges from seven days
to 10 years in the light of agreement between customers and the bank. The profit allowed
on these deposits depends on the duration, longer the duration, the higher will be the
profit (Terms & Conditions account opening, 2007, p. 1, 2)

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CLEARING DEPARTMENT
When cheque drawn on one bank is present for deposit in other bank then it is dealt with
clearing. There are many kinds of clearing cheque and procedure to collect cheque from
different banks. This is different from bigger cities to smaller. However the following
modes of the clearing cheque are generally used in commercial banks.
 Clearing Cheque
 Transfer Cheque
 C.C Cheque
 Same Day Clearing
M. Rehman (personal communication, Aug 15, 2008)
Clearing Cheque
There are two types of clearing cheque clearing. Clearing Sent and Receive.
i) Clearing Sent
Clearing sent consist of the cheque drawn on any other bank in the same city but
presented for deposit in our branch. When these cheque received on the counter. Clearing
stamp is affixed on the pay in-slip and on the cheque and at the backside of cheque
“payees account credit” or (According the nature of payee’s cheque) stamp is affixed.
Clearing stamp with next day’s date is used. Because cheque received on one day are
cleared next day.
All cheque and voucher recorded on daily voucher sheet after the affixed clearing
stamp and payee’s account credited stamp. Cheque and vouchers recorded separately.
Vouchers are recorded debit side and cheques are recoded credit side.
At the end of the day cheque and pay-in-slip are separated. Cheques are sent for
clearing to NIFT (National Institutional Facilitation Technology) for clearing, while pay-
in slip serve the purpose of vouchers in the branch, and on realization of the cheque.
Customer accounts credited on the strength of the credit voucher.
ii) Clearing Received
Clearing received consist of cheque drawn on our bank but deposited in other
banks of the city. These cheques when received from the NIFT are properly scrutinized

12 | P a g e
and debited to their respective accounts. The cheques that cannot be paid due to any
reason are return to NIFT.
Cheque Return
When clearing cheque are received and sent. It is not necessary that all cheque
received or sent will be passing, if there is in sufficient balance customer’s account.
Cheques are being returned. There are many reasons to return the cheque. There are two
types of cheque returned.
i) Inward Cheque Return
Inward cheque returns are those, which we had sent in clearing. For the amount of
these cheques their respective accounts debited and the cheque are returned to the parties
after making entry in register.
ii) Outward Cheque Return
Outward cheque returns are those, which come in our branch for clearing. We
recorded these cheques in the register and attach a cheque return slip with them and are
sent back to NIFT.
Transfer Cheque
This second category of cheque received on clearing counter. Transfer cheques
are those drawn on our branch and presented for deposit in the same branch. When these
cheques are received then “transfer” stamp affixed on pay-in-slip and the cheque is sent
to the computer operator. Because the drawer is also from our bank then the cheque is
immediately credited in the payees account.
Cash Collection Cheque
Cheque presented for deposit in our bank but drawn on a bank out side the city are
sent for collection. These cheques are recorded in the C.C register and a C.C slip is filled
in duplicate. Its original copy is attached with cheque and sent for collection while the
duplicate copy remains with us attached with pay-in-slip.
These cheques are sent to our main branch in the city where drawer’s bank is situated.
Incase of cheque drawn on any of the branches of MCB the cheque is sent directly to that
branch.
The records of the C.C sent two vouchers are prepared BRBC debit & BCBR

13 | P a g e
credit for the amount of cheque. At the time of realization of C.C the entry passed earlier
is reversed. The account of the payee is debited by the amount of postal charge and 25%
recovered and commission on bills (Gillani & Sariwal, 1994, p. 23-35).

Same Day Clearing

There are two types of same day clearing, cheques of same day clearing sent and
same day receive.
Same Day Clearing Sent
Clearing sent consist of the cheques drawn on any other bank in the same city but
presented for deposit in our branch. When these cheques are received on the counter,
same day clearing stamp is affixed on the pay-in-slip and the cheque and on back side of
cheque “payees account credited” stamp affixed. Cheques received on which date also
cleared on same date.
All cheques and vouchers recorded on daily voucher sheet after the affixed “same
day clearing” stamp and “payees account credited” stamp. Cheques and vouchers
recorded separately. Vouchers are recorded debit side and cheques are recorded credit
side.
Same Day Clearing Received
Clearing received consist of cheques drawn on our bank but deposited in their
bank of the city. These cheques when received from the NIFT are properly scrutinized
and debited to there respective accounts as quick as possible. The cheques that can not be
paid due to any reason are returned to NIFT. S. Ahmed (personal communication, Aug
20, 2008).
Note: Same day clearing, cheques must be at least amount of Rs.500000 and bank
charged Rs.300 on clearing of cheque and in the same case of returned bank charged
Rs.400.

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 REMITTANCE DEPARTMENT
REMITTANCE
Fast, secure and easy-to-use, MCB's Remittance
Services is efficient ways to transfer money overseas.
You can remit funds from any country to Pakistan
through Swift System.

Posting department posts the day-to-day

transactions of every department. Bank provides the facility of remitting the funds from
one country to another county and inside the county, within some restrictions.
It makes the devilry of funds much quickly and safety and thus saves the time of
business community and the general public. The remittances department is divided into
two sections. S. Ahmed (personal communication, Aug 20, 2008)

A. In-Land Remittance.
B. Foreign Remittance.
a. In- Land Remittance
In land remittance means in-flow and out-flows of the funds from one branch to another
branch within the country though banking instruments, is termed as in land remittance.
Banking Instruments for In-Land Remittance

1 Demand Draft
2 Travel Cheque
2 Pay Order
3 Telegraphic Transfer / Telex or Fax Transfer
4 Mail Transfer
5 Online (Cross Branch Transaction).
1. Demand Draft
It is a written order drawn by one branch of the bank to the other branch of the
same bank, under the certain agreement to pay a certain sum of money to the order of the

15 | P a g e
special present, can be used from one city to another city. Bank charges the commission
according to the amount.
2. Travel Cheque

MCB Bank has been at the forefront of providing it’s customers with new and
innovative products and financial instruments that are safe, secure and profitable.

MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash for
traveling and travel related purposes. The product has been extremely popular and is
preferred over cash by customers while traveling and in all walks of life.

MCB Rupee Traveler's Cheques- The safest way to Carry Cash

Rupee Traveler’s Cheques Features

 Easily available: Buy them from any of the designated branches in Pakistan.

 As good as cash: MCB RTCs are safe to carry and can be used without any
inconvenience especially by Travelers.
 Easily encased: At any designated MCB branch.
 Easily refunded: in case of loss or theft, you can get the full amount back.
 Exclusive security features: Due to special printing and safety precautions,
Cheques cannot be duplicated.
 Denominations: Available in denominations of Rs 1000, Rs 5000, Rs 10,000
and gift cheques of Rs 500.
 Valid until Used: Validity of Cheques indefinite.
3. Pay Order
Pay order is issued for banks own payments purpose. But in practice these are
also issued to customer for making payments.
4. Telegraphic Transfer / Telex or Fax Transfer
Transfer of funds from one branch to another branch of the same bank under
special arrangements for the payment to the beneficiary through Telegram/Telex or Fax is
called telegraphic transfer. It is necessary that there should be account mentioning. The

16 | P a g e
bank charges are same as on demand draft.
5. Mail Transfer
Transfer of funds from one branch to another branch of the same bank within city
or out of city through mail or courier service is called mail transfer.
6. Online
This is a Transfer of funds between two branches through Internet. Every branch
is connected through server that’s why ever branch have facility to transfer fund in the
account of another person, which is locate in different cities of Pakistan. So these
branches are called online branches (Annual Report, 2007).

FOREIGN REMITTANCES
The term “Remittance” means to send money by bank or by post.
Thus the act of remitting money from one place to another place is called
“Remittance”.
According to foreign remitting circular, the function of issuing and accepting of
foreign remittance is performed by the Foreign Remittance section to domestic resident
as well as to the foreigners. This means that any person either of Pakistani nationality or
foreigner can send money from Pakistan to another country.
The bank also provides the foreign exchange in the shape of the travelers’ cheque and
credit cards to intending visitors. Travelers’ cheque are only issued to that person, who
has an account with the M.C.B. S. Ahmed (personal communication, Aug 22, 20080

ADVANCE DEPARTMENT
This department lends money to the customers / account holders for the purpose
of financing the account holders. There are various types of advances.
1. Over Draft.
2. Cash Credit.
3. Loans.
4. Secured Loans
5. Un Secured Loans.

17 | P a g e
Usually the banks lend credit on short –term bases. They lend loans to any body but that
“any body” customer must fulfill the 5 C’s.
1. Character.
2. Capital
3. Condition.
4. Collateral.
5. Cash Flow.
Haroon (personal communication, Aug 25, 2008)

MCB FINANCE
PERSONAL LOAN

“The more you praise and celebrate your life, the more there is in life to celebrate.”
MCB Personal Loan shortens the distance between your dreams and your celebrations. It
is fast, flexible and affordable

Fast
 Speedy loan approval
 No guarantor / security / collateral required

 Flexible

 Borrow up to Rs. 1,000,000

 1 to 5-year tenures
 Partial and full adjustments allowed anytime during the tenure
 Optional insurance.
 Equal monthly installments
 Lower interest rates
 Higher loan limits
Special Benefits
 Loan amount renewed anytime after nine months.
Existing Customers

18 | P a g e
  Fill in and submit the application form along with a copy of your CNIC if you
have been a customer of MCB Car4U, MCB Pyara Ghar or MCB Business
Sarmaya for at least 12 months
 Get greater loan limits if you are an existing MCB Branch Customer.
 Get 1 % discount if you already have a similar facility from any other bank and
want it transferred to MCB Personal Loan through our BTF option. Credit Card
BTF option is also available at very competitive rates.
Prepayment Penalty

You can fully pre-pay or partially adjust your loan only once a year subject to a penalty
as given in chart below. Also, partial adjustment must be at least equal to 6 monthly
installments (Annual Report, 2007).

MCB CAR4U
MCB CAR4U Auto Finance assists the customers in many ways. It is
affordable, with lowest mark up, flexible conditions, easy processing
and, no hidden costs. MCB Car4U offers the following benefits to its
customers:
 Option of financing or leasing.
 Competitive financing rates.
 Flexible equity/rate options.
 Financing tenure from 1-7 years.
 Low processing fee of Rs. 3,500/-.
 It is valid for salaried personnel on contract.
The eligibility criteria for Car4U scheme is:
 Pakistani national residing in an approved area/city.
 Not less than 21 years for businessmen, or 22 years of salaried personnel, and
would not be more than 70 years on the maturity of the facility of Auto Finance.
 Salary/Income is at least Rs.12, 000/- per month with monthly installment not
exceeding 50% of the take-home salary/income.
 Businessman/Self-employed person with a minimum experience of 1 year in the

19 | P a g e
 same business/profession.
 Permanent employee. For contract employees, 2 years on the job with the current
employer or 3 years of overall experience.

Its distinctive features are:

Insurance
MCB Car4U gives an option to choose from a panel of reputable Insurance companies
and secures auto finance deal, on discounted rates.
Flexibility
MCB CAR4U provides complete flexibility in creating customized deals. The client has
the power to choose the rate/ equity option that suits him the best. They can also choose a
suitable tenure between 1-7 years.
Excellence
It provides opportunity to make early payments, twice a year. It also gives access to a
wide dealership network with quick processing. There is convenient access through more
than 900 MCB branches. There are Independent Service Quality Representatives to assist
customers.
MCB Car4U offers a variable rate i.e. 12% markup at 10% equity. It also offers a 'No
Documents' option where the markup rate is 13% at 20% equity. The three months
deferred product provides the customer with 3 months of financial relief after making
their down payment; the rate for this option is 12.5% (MCB CAR4U, 2007).

TYPES OF FINANCE
There are 4 main types of finance.
1. Running Finance.
2. Demand finance.
3. Staff finances.
4. Cash finance.
1. Running Finance
It is provided only to current account holders regional office can sanction the loan

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maximum one lac. The General Manager of the Circle office Hyderabad has the power to
sanction the loan up to 1 Million rupees; beyond this limit the head office will be the
sanctioning authority.

2. Demand Finance
The rules and demand finance are same as for running finance. PLS account
holder can also take the loan. The repayment of the loan will be made by monthly equal
installments.
3. Staff Finance
The bank provides this finance only to its staff. The member can get the loan for
these purposes.
i) House Building
ii) Personal vehicle. (Car)
iii) Computer Loan.
4. Cash Finance
Cash finance is provided on markup bases reducing balance system. The customer would
be required to adjust the advance within the expiry period, but he or she would operate
the account freely, within the sanctioned limit (Annual Report, 2007).

IMPROVEMENT IN SERVICES AFTER PRIVATIZATION

As told by the branch Manager Mr. Abdul Hafeez Qureshi, at the marketing and
business development division, the MCB was privatized in April 1991, after privatization
the bank made a remarkable growth and improvement in its services.

COMPUTERIZATION
Modernization and computerization of branches is an aspect which has attract
more clients, the latest equipment has been provided to the most of the branches
especially, the computer for the ledger –keeping & etc. Now MCB Install software with
name Symbols. This software is very help to employees during the time of transaction, at
time of the posting automatically transaction are posted in the general ledger. Those

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branches which are Symbols through out the Pakistan do not pay any charges against
online money transfer. So this software is very helpful for employees as well as customer.

CONSULTANCY SERVICES
After privatization a public sector unit, prospective buyers need professional
assistance MCB offers the specialized services for the valuation of industrial units,
preparing bid documents and arranging finance for the purchase of units.

FAX PRESS
The fax and telexes facilities provide speedy transfer of documents within
Pakistan or all around the world, just within a minutes, such technology was not
introduced before privatization.

COMPARISON OF INVESTMENT SCHEMES

After privatization the bank introduced several saving schemes to attract the
customers and to meet their needs.
 Capital Growth Certificate Scheme.
 Foreign Currency Scheme.
 Mahana Khushali Scheme.
 Hajj Mubarak Scheme.
 Rupee Travelers Cheques.
 Photo Credit Scheme.
 Khushali Bachat Account.
 MCB Gold 365

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VARIOUS SCHEMES OFFERED By MCB
Every bank provides different schemes under different circumstances, policies for
their customers and general public.
From time to time M.C.B Bank Limited offered several schemes to general public
and its account holders. The main motive of their schemes is to create the habit of saving
among the people of the country. M.C.B Bank Limited attracts the people with
reasonable rates of return on the schemes (Investment Scheme, 2007, p. 1-6).

VARIOUS SCHEMES OF MCB

Following are the schemes, which are offered by M.C.B Bank Limited.
1. M.C.B Car for You.
2. Current account
3. Pls account
4. khushali bachat account
5. Agricultural Loan.
6. House Finance.
7. ATM / Debit Card
8. Debit Card.
9. Hajj & Umrah Services.
10. M.C.B Master Card & Smart Card
11. M.C.B Rupee Travelers Cheque.

M.C.B CAR FOR YOU

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 This scheme of M.C.B has attracted the masses of people with its lowest rate of
13% markup and a short period of document processing to facilitate and save the precious
time of their customers.

CURRENT ACCOUNT
The current account can be opened in a bank with the initial amount of Rs. 1000.
The depositor does not receive any interest against current account deposits. There are no
restrictions whatever, on withdrawal of money from the bank. But in the case of over
draft obtained by the customer under current account has to abide by the rules and
regulations.
PLS ACCOUNT
There are the accounts, which are based on the Profit and Loss Sharing. The
amount, which is deposited by the customer in the bank, is involved in business or it is
landed to the investors, both are bound to share in then profit as well as the loss arising
from such transaction.
KHUSHALI BACHAT ACCOUNT
Khushali Bachat Account provides a high rate of return &
lots of other benefits to its account holders. According to M.C.B
brochures, the rate of profit is 8% per annum.

AGRICULTURE LOAN
This scheme of M.C.B has increased the hopes of the formers who can’t afford or
in need of a financial help in their agricultural system. This scheme has helped many
farmers to develop or cultivate their lands.

HOUSE FINANCE
This scheme has 3 different aspects or options
from which the customers have to choose as per their
own need. Either the customer wants to buy a house or
want to renovate the house or want to build a house;

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M.C.B provides finance in this regard at the reasonable
markup i.e. 11%.

AUTOMATED TELLER MACHINE (ATM)

ATM machines have been installed in 102 branches of M.C.B in all over cites of
Pakistan extending round the clock money withdraws facilities to the bank clients.

DEBIT CARD
This is a new and attractive scheme of launched by M.C.B. in this scheme all that
u have in your account is in your card. So you can buy accessories on the spot with this
card and the payment is being made easily from your account, by simply debiting your
account. That’s why it is called as SIKA-E-RAIJ-UL-WAQT.
HAJJ & UMRAH
For performing Hajj & Umrah sound financial background is need, which every
one can not have. So H.B.L also helps the pilgrimage in this regard, by financing them to
perform Hajj & Umrah.

M.C.B MASTER CARD & SMART CARD

Both facilities will be available to the M.C.B clients having a foreign currency
account with the bank.
MCB RUPEE TRAVELLERS CHEQUES
M.C.B Rupee traveler’s cheques are as good as cash. M.C.B rupee traveler’s
cheques are accepted at major shops, travel agents, hotels, business establishments and
M.C.B branches all over the Pakistan (Investment Scheme, 2007, p. 10-18).

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 MCB DEBIT AND CREDIT CARD

INTRODUCTION
Introducing new banking products, the introduced 24-hours cash withdrawal
ATM services in 1996. These services have been extended to “13” cities of the country
and “147” online branches are covered over a network of “91” ATMs at that time.
The installation of ATMs help the concerned branches in many ways i.e. counter services
are improved and the rush of small withdrawal at centers are eliminated / reduced.
Besides the cardholder are provided a convenience of 24-hours cash withdrawal. S.
Ahmed (personal commission, Aug 15, 2008)

Facilities on ATM
The following facilities are provided on ATMs to cardholders.
 Withdrawal of cash with in 30 seconds, 24-hours and 365 days of the year.
 Balance inquiry of MCB rupee account.
 Mini statement.
 Fund transfer.
 Fast cash.
Application for obtaining MCB ATM Cards
Customer of online branches of our bank willing to obtain MCB ATM card will
furnish application from dully filled in complete in all respects, signed along with copy of
NIC to the online branch where he/she maintaining his/her accounts. The branches will
process the application and take up the matter with ATM card department of information
technology division, principal office, Karachi MCB head office issuance of the MCB
ATM cards.

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 The department after the preparing the MCB ATM card of the account holder and
allotting PIN i.e. personal identification number will send both of these items separately
in sealed envelops to the branch from where the same will be delivered to the account
holder after obtaining the proper acknowledgement recites. User’s guide also provided to
the card holder along with PIN.

Spending Limits

Only MCB gives you the flexibility to choose from a range of card usage

ATM Withdrawal POS Purchasing

Limit (Rs.) Limit (Rs.)
Local
Classic 10,000 50,000
Gold 25,000 100,000
International
Classic 10,000 100,000
Gold 25,000 150,000
limits.SmartCard is available in the Classic and Gold category with a further choice of
Local or International versions. With these card categories, supplementary cards for your
family members are also available. The difference between the Classic and Gold
categories is based on their purchasing and withdrawal limits as given in the above table
(Terms & Conditions MCB 24/7 Smart Card, 2007, p. 6, 7).

TYPES of MCB ATM Cards

Two types of MCB ATM Cards are issued I.e. Master Card & Smart Card.
PURCHASING
Smartcard is your debit card for cash free convenience. Use it for your shopping and
purchases at a rapidly growing nationwide network of merchant locations including
petrol pumps, stores, bakeries, departmental stores, jewelers, travel agents, restaurants,
chemists, hospitals etc.
It’s simple, safe and convenient to use:
 Shop at locations displaying the Cash Free sign and the MCB Cards logo.
 For payment, no need to pay cash. Simply present your card.

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  Merchant will swipe your card for the amount of the transaction.
 You simply authorize your transaction by entering your PIN (Personal
Identification Number) yourself. The PIN is for extra security.
 The purchase amount is debited from your account
 To make your transaction safe and secure, MCB has installed State of the art
smart terminals at your merchant locations, to ensure your personal convenience.
At restaurants & fuel Stations your merchant will bring portable terminals to you
for your PIN entry.

Existing MCB ATM Card holders have been automatically provided with the
debit facility.
So go use it now!

International Usage
International cardholders have the un-matched advantage of using this facility at
millions of Locations worldwide carrying the logo.

BILL PAYMENT

Hassled by long queues and short bill- T accepting hours at limited locations?
Now you can use the Smartcard to pay your utility bills at the largest nationwide
network of MCB ATMs. Pay online and get instant confirmation of payment.

 Make bill payments upto Rs. 20,000 per day per card.
 Currently available for payment of gas bills of Sui Southern Gas customers, this
facility is being expanded to cover all utility bill payments.
 Pay as a registered or non-registered user. Registration will help you avoid the
time delay in entering details each time you carry out a transaction.
 Please fill out the MCB utility bill (i.e. SSGC) payment application form
available for your convenience at your MCB online branch.

FUNDS TRANSFER

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 Want to avoid the hassle of writing cheques and time-delays in making pay
orders, demand drafts and telegraphic transfers? Enjoy the benefit of MCB Funds
Transfer facility with your Smartcard at the largest nationwide network of MCB ATMs.
 Transfer funds between a maximum of 8 pre-registered online accounts within
the growing network of MCB branches across 30 cities.

 Get round the clock convenience with the largest nationwide network of MCB
ATMs.
 Transfers take place instantly & funds become accessible for use
 You can use the balance inquiry facility to reconfirm for your Satisfaction.

MCB took the award of “First Asian Bank” of the year, due to best performance.
The branch is situated in main business area of the town where the huge transactions
mostly a prated by the business man even then the MCB Frere Road Sukkur is
performing better services to the clients. The over all facilities are attractive from bank to
the customer.

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 CONCLUSIONS
After the completion of the internship at M.C.B internee had drawn the following
conclusions.
 The traditional banking system is still followed by MCB. Like Utility Bills are
recorded manually etc.
 The process of documentation is lengthy and time consuming.
 MCB Frere Road Sukkur is failed to provide good quality service according to the
expectations of the customers.
 The relationship between employees and customers is satisfactory.
 Customers face some difficulty in dispatching of bank documents.
 The bank has managed to achieve greater profitability by introducing innovative
products and implementing effective strategies.

 The branch managers are usually given very little regarding sanction of advances
and over draft whereas the responsibilities are numerous.

 The bank staff has been found as less satisfied with bank policies and the recent
retrenchment in the bank has created unrest and panic.

 Administrative expenditure is very high.

 The increase in profitability resulted in increase in share price and earnings per
Share of the bank.
 The deposits and advances of the bank have grown consistently over a period of
last 5 to 6 years
 The bank also has the facility of Loan /credit products including products like
MCB CAR 4 U, MCB Pyara Ghar, etc.
 The MCB ATM Network is the largest and most advanced of its kind in the
country, and is part of MCB's continuing efforts to provide convenience to its
customers.
 Lockers facility is only available in limited branches.

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  Now they install new software “Symbols”, so now they improving fast day by
day.
 Limitation of withdrawals in MCB ATM cards.
 ATM card services are facilitate in more than 70 cities of Pakistan.
 More than 500 branches are located in Pakistan ant at least 100 MCB ATM
machine in Pakistan.
 A job rotation program should be followed for the individuals after three years at
the bank in order to keep them motivated and energetic so that doing the same job for
years may not bore them.

Despite all these facts there are some areas, which needs to be improved,
Equal distribution of work should be done and bring professional people to all of its
branches in order to meet the requirements of a new era and to fulfill the needs of 21st
century.

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RECOMMENDATION
In the whole internship (6 weeks) at MCB, I saw lots of deficiencies at branch. So
I give some suggestions which are as under.
In PLS term deposit account you fixed a period, called date of maturity such cash
deposited under PLS term deposit account for 6 months and over but less than one year.
It means in such case date of maturity is after the 6 months and if depositor cash his
money before the date of maturity bank treated this term deposit account as a PLS saving
account. I think that this exemption is not good because you made it as a fixed account,
you are liable to assist people for the completion of period, don’t allow to any one to with
draw their money before the date of maturity the concept of PLS term deposit account
would be end or died.
 Modern banking system should be adopted.
 MCB must improve the quality of services.
 MCB should create an ideal working environment in order to create good
relations between employees and customers.
 Safety deposits and lockers should be provided to the customers for their safe
keeping of money and valuables.
 MCB should choose a reliable courier services or mail to remove the difficulty of
customers in dispatching of bank statements.
 Processing of loans should be simplified and the time for the loan approval should
be revised. There are lengthy and cumbersome legal procedures that make the
customer more reluctant to come to the bank. The emphasis of the bank should be
on speedy processing and prompt services.
 MCB must concentrate on promotion of their products and services.
 Bank should disburse its loans to diversified fields.
 The use of the technology should be further improved. Although they have
computers but most of their work is manual.

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  Time deposits should be properly administered
 Fund Investments should be made after careful analysis.

BIBLIOGRARY
Gillani, A., & Sariwal, G. (1994). Banking. Karachi: Kifiyat Academy.

Muslim Commercial Bank, (2007). Annual Report. Karachi.

Muslim Commercial Bank (2008). Our Values. Retrieved September 10, 2008, From

http://www.mcb.com.pk/mcb/our_values.asp - top

Terms & Conditions For Account Opening. (2007). Guide line for account opening

[Brochure]. MCB.

Terms & Conditions For MCB ATM 24/7. (2007). Guide line for ATM Cards

[Brochure]. MCB.

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