INTERNSHIP REPORT

ON

Program: M.B.A 3.5 years

Specialization: FINANCE
Submitted To

University Of The Punjab Lahore

Supervisor: Sir Usman Ali ch
Submitted By: AQSA ZAHID
Noble Group of colleges
2-A Shadman Lahore

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 Acknowledgement
First of all Im grateful to ALLAH ALMIGHTY, who bestowed me
with health, abilities and guidance to complete the project in a
successful manner, and without HIS help I was unable to perform
this task.

I would also like to thank MCB for providing me the

opportunity to have an excellent learning experience during
my internship. The comments of the team of MCB on my
work have certainly made me think of new ideas and
techniques.

More than anybody else, I would like to acknowledge my

College Staff for their never ending support and untiring
efforts. They was always there to guide me whenever I felt
stuck off and their encouragement always worked as morale
booster for me. I have found him very helpful while
discussing the tricky issues in this dissertation work.

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PREFACE
Pre-requisite of MBA study is to undergo internship. I got the
opportunity to join the MCB kharota syedan branch for the said
propose for a period of 6 weeks. Practical involvement was a
great experience as interaction both with experienced executive
and clients cemented the base of knowledge I have
been acquiring in classroom.

This internship report includes the material about MCB and

different departments along with their working procedure. For
the completion of this project I meet various persons of this
organization. As for my knowledge and hard work is concerned,
this report will provide a good insight of
MCB.

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EXECUTIVE SUMMARY

MCB Bank Limited has a very solid foundation over 50 years in

Pakistan .it has a network of over 1200 branches and above 850
branches is online branches .MCB has over 650 ATMs
nationwide.
MCBs operation continued to be streamlined with focus on
rationalization of expenses, re alignment of back end processing
to increase productivity, enhancement of customer service
standards, process efficiency and control. The bank has taken
the lead in introducing the innovative concept of centralizing
Trade Service in the country by providing centralization foreign
trade service to branches with a view to improve efficiency ,
expertise and reduce the delivery cost.

During my internship span of SIX Weeks I got chance to work in

Different Departments and got information from other
departments about their working and documentation. I tried my
level best to include everything which I learned and observed
there. This report contains the details about the functions of
Departments, of MCB.

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TABLE OF CONTENTS
Chapter 1: Introduction & History Of MCB

History & Introduction 9-13

Nature of Organization 14

Awards and Achievements 15

Core Values 16-17

Chapter 2: Organization Profile

Board of Directors 18

Audit Committee 19-20

Reasons for Choosing this Bank 21-22

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 Some Major Customers 22

Chapter 3: Products and Services 23-27

Chapter 4: Departments of MCB

Cash Department 28

Deposit Department 29-34

Functions of MCB 34-37

Clearing Department 37-41

Advances Department 41-44

Remittance Department 44-47

Miscellaneous 47-51

Chapter 5: Explanation of My Workings &

Assignments during my Internship 51-57

Chapter 6: Financial &Business Analysis 58-66

Financial analysis

Profitability analysis

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 Liquidity ratio

Operating ratio

Solvency ratio

SWOT analysis 67-71

Chapter 7: Annexure 72-

77

Balance sheet

Profit And Loss Account

Cash flow Statement

Chapter 8: Recommendations &Conclusion

75-77

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 Chapter no.1:

History And Introduction

Banking is one of the most sensitive businesses all over the

world. Banks play very important role in the economy of a
country and Pakistan is no exemption. Banks are custodian to
the assets of general public. The banking sector plays a
significant role in a contemporary world of money and economy.
It influences many different but integrated economic activities
like resource mobilization, production and distribution of public
finance, poverty elimination etc.

Banking In Pakistan:
Banking started in Pakistan after the bold and emergent decision
of formulation of SBP on July 30, 1948. Thereafter this sector has
witnessed enormous growth. In 1974 banks were nationalized, in
the hope that new era of growth could be achieved through it.

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On 14th August 1947, 487 branches of different banks were
operating in Pakistan. By 30th June, 1948, 292 branches winded
up their business in Pakistan and the remaining 195 branches
restricted their banking operations to a minimum level.
The only bank, which shifted its head office from Bombay to
Karachi, was the Habib Bank Limited. MCB with the assistance of
Quaid-e-Azam Mohammad Ali Jinnah, started operation in July 9,
1947 with an Authorized capital of Rs.3 crores. Indo-Pak
subcontinent, the Bank moved to Dhaka from where it
commenced its business in August 1948. And in 1956 the bank
shifted its head office to Karachi, where it is still working.
In 1948 Ms. Ispahanani and Mr. Abdul Hameed Adamjee
purchased the bank. At that time the bank showed a historical
performance and profit.

Nationalization:
In 1974 the government felt a harsh need of nationalization of
banks and financial institution and the nationalization act was
introduced. Under this act, all Pakistani banks become a public
property. All small banks were merged in bigger banks to create
five major banks. These banks were to control but Pakistani
banking council. MCB was the first bank, which was nationalized.
In the same year Premier Bank was merged with MCB and it
started work as a government bank this nationalization affected
the bank badly. The major changes after nationalization are as
follows:

Working of banks was extended to under developed areas.

Market expansion for credit and deposits

Decrease in service level of bank officer

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Decrease in profitability as well

Privatization:
All the financial institutions and banks did not show good
performance after nationalization, and again the government
felt a big need to privatize these banks. In 1990 the govt.
decided to denationalize the banks. For this purpose,
amendments were made to the Nationalization act 1974 and two
nationalized banks were privatized and along with this a
permission to open banks in private sector was also granted.
The rules regarding establishment of new banks and incoming
foreign banks were also relaxed. The two privatized banks are
MCB taken up by a private group in April, 1991 and ABL taken up
by its own employees in September, 1991. After this a large
number of private and foreign banks started their operation in
Pakistan.
Now, Pakistan has a well-developed banking system, which
consists of a wide variety of institutions ranging from a central
bank to commercial banks and the specialized agencies to cater
for special requirements of specific sectors.

An Overview Of MCB:
Over the years MCB has developed strong relationships with its
customers by understanding their needs and treating them with
respect, dignity and importance. The driving force behind its
commitment and services is its focus on customers ensuring
that it not only meets, but also exceeds their expectation.
They strive to achieve excellence by ensuring that every
moment of their time is spent in adding value, making sure that
they do things right, first time, and every time. With the quest of

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quality MCB has always taken initiatives bringing banking into a
new arena; from cash to the convenience of plastic; from branch
banking to internet banking and from face to face customer
interaction to online accessibility.
MCB now focuses on three core businesses namely Corporate,
Commercial and Consumer Banking. MCB is also catering to the
growing middle class by providing new asset and liability
products. MCB Bank Limited (Formerly Muslim Commercial Bank
Limited) has a solid foundation of over 65 years in Pakistan, the
Bank provides 24 hour banking convenience with a network of
over 1000 branches, the largest ATM network in Pakistan over
650 ATM locations in the market.

Corporate and Investment Banking:

Corporate Banking Group of MCB is focusing on top tier local
corporate groups and multinationals in a structured and focused
manner building relationships leading to increased market share.
Branches having Advances of Rs.100, 000,000 per party
relationship and monitoring such advances are called as
Corporate Branches. These branches include corporate clients
and their requirements are looked after. There are about 20
corporate branches of MCB in Pakistan.
Commercial Banking:
The Commercial Banking Group of MCB continues to service the
trading Community and middle market, with sustained focus on
developing new customer relationships and increasing the asset
portfolio.
Consumer Banking:
The Consumer Banking Group focuses on the lower end of the
market and micro credit. Individual customer needs are being

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serviced through the introduction of diverse lifestyle consumer
loans and introduction of new products and partnerships with
service providers. Customers will continue to use the extensive
branch network, which in turn will generate deposits to feed the
asset development and liquidity requirements of the Bank
through its diversified and stable deposit base.

Present Status:
Since privatization, MCB's growth has been phenomenal. Today,
MCB in one of the largest foreign banks in Sri Lanka, the first
bank in Pakistan to launch Global Depository Receipts (GDR) in
2006, has strategic foreign partnership with May bank of
Malaysia, has international indirect regional presence in Dubai
(UAE), Bahrain, Azerbaijan, Hong Kong and Sri Lanka and serving
through a domestic network of over 1,130 branches and 600
ATMs across Pakistan with a customer base of 4.5 million
(approx.)
MCB is reputed as one of the soundest financial institution and
as one of the leading banks in Pakistan. The bank is versed as
one of the oldest and most responsible banks in Pakistan and
has played important role in representing the country on global
platforms while being one of the few institutions that are
recognized and traded in the international market.
The bank has also been acknowledged through prestigious
recognition and awards by Euro money, MMT, Asia Money, SAFA
(SAARC), The Asset and The Asian Banker.

Objectives Of MCB:
The main objectives of MCB are to earn Profit by investing the
money of depositors, who cant utilize that money for getting
required return. So the bank invests that money in the shape of

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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, agriculturists etc. it
also provides employment to people; it help in developing
economy of the country. It also provides facilities in doing
business with other countries.

Assumed the office of the Chief Executive i.e. the President of

the MCB.
Major aspects concentrating are the following:
Effective use of electronic media
Enlighten Personnel Policies
Mainly the whole program was based on the following points.
1) Special preference was given to MBA's. Ultimately the 1st
batch of MBA's was hired in July 1992. The management was
aware of the fact that if you offer peanuts, you will find only
monkeys, therefore they offered attractive packages and thus
was able to succeed in skimming cream of the market.
2) A comprehensive six months theoretical program was devised
at MCB Staff Colleges, located at Karachi and Lahore for
providing some reasonable knowledge to the newly hired
qualified staff. The stated theoretical training program was
supplemented by the practical branch training.
Compatible Package
After privatization the staff salaries have been revised three
times. The first time was 35%, the second was 32%, and the last
one was 20%.
Excellent Working Environment
Modernization of Branches
Launching of New Products
Decentralization of Authority

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NATURE OF THE
ORGANIZATION
The MCB Bank is Public Ltd Bank listed at KSE and providing
different kind of banking services to general public. We can say
that the MCB Bank is the back bone for Pakistan. In the MCB
Bank different kinds of Accounts are opened whether the
account is in foreign currency or in home currency. Here the
accounts can be opened in minimum amount even the salaried
person can open his account.

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 Awards and Achievement
2014 The Asset Triple A: Best Bank-
Pakistan

st
2014 SAFA: 1 Runner up- BCR 2013 in Banking Sector
Category

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2013 The Asset Triple A: Best Domestic Bank-
Pakistan

nd
2013 SAFA: 2 Runner up BCR 2012 in Banking Sector
Category

2012 Euro money: Best Bank in

Pakistan

2011 CFA Association Pakistan: Most stable Bank of

the year

2009 The Asset: Best Domestic Bank in

Pakistan

2008 Asia money: Best Domestic Bank in

Pakistan

2006 Asia money: Best Domestic Bank in

Pakistan

2005 Euro money: Best Bank in Pakistan

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 Values Of MCB

Excellence:

st
The 1 most important policy of the bank
is personal responsibility to make the organization as a market
leader. MCB bank is performance driven, result oriented
organization where merit is the only criterion for reward.

Integrity:

Bank is the trustee of public funds and serves

the community with integrity. They believe in being the best at
always doing the right thing.

Innovation:

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

Respect:

They respect their customers values, beliefs,

culture and history. Bank value the equality of gender and
diversity of experience and education that our employees bring
with them. They create an environment where each individual is
enabled to succeed.

Knowledge:
A strong commitment to nurture the human
capital through lifelong development & learning towards
achieving vision.

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 Chapter 2

ORGANIZATION PROFILE:
As MCB is a banking company listed in stock exchange therefore
it follows all the legalities, which are imposed by concerned
statutes. MR. Mian Mohammed 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.

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 Board of Directors

Mian Mohammad Mansha (Non-Executive Director)

Chairman

S.M.Muneer (Non-Executive Director)

Vice Chairman

Tariq Rafi (Non-Executive Director)

Shahzad Saleem (Non-Executive

Director)

Sarmad Amin (Non-Executive Director)

Aftab Ahmad Khan (Non-Executive Director)

Mian Raza Mansha (Non-Executive Director)

Mian Umer Mansha (Non-Executive Director)

Dato Seri Ismail Shahudin (Non-Executive Director)

Ahmad Alam Aslam (Non-Executive Director)

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Muhammad Ali Zeb (Non-Executive Director)

Mohd Suhail Amar Suresh (Non-Executive Director)

Imran Maqbool (Executive Director)

Audit Committee
Ahmad Alman Aslam (Non-Executive Director)

Chairman

Tariq Rafi (Non-Executive Director)

Aftab Ahmad Khan (Non-Executive Director)

Dato Seri Ismail Shahudin (Non-Executive Director)

Chief Financial Officer

Salman Zafar Siddiqi

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Company Secretary

Fida Ali Mirza

Auditors

M/s. A. F. Ferguson & Co.

Chartered Accountants

Legal Advisors

M/s. Khalid Anwer & Co. Advocates & Legal Consultants

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 Reason For Choosing MCB

I choose to do my internship in MCB because MCB bank is one of

the major banks working in Pakistan efficiently and expanding its
number of branches in all over Pakistan as well across the
Pakistan. My interest was in banking sector thats why I prefer to
do internship in the bank. Also there was a reference of my
uncle which advise me to do internship in this, the last but not
the least reason was also that the branch is near to my home.

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Vision

To be the leading financial services provider, partnering with

our customers for a more prosperous and secure future

Mission

We are a team of committed professionals, providing

innovative and efficient financial solutions to create and nurture
long term relationships with our customers. In doing so, we
ensure that our shareholders can invest with confidence in us.

Some Major Customers Of MCB

1.Industrialists.

2.Sui gas.

3.WAPDA

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4.Educational Institutions.

Chapter 3

Product and Services

Current Deposit Product Menu:

1.MCB Business Account.

2.MCB Current Life Account.

3.Basic Banking Account.

4.Foreign Currency Current Account.

Saving Deposit Menu:

1.PLS Saving Account.

2.Smart Saving Account.

3.MCB 365 Saving Gold Account.

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4.MCB Savings extra Account.

5.Foreign Currency Saving Account.

Digital Banking Products:

1.Branchless Banking- MCB lite

2.MCB E-Commerce

3.MCB E-Gate

4. Visa Debit Card

5.MCB Mobile

6. Internet Banking

7. Call Center

8. ATMs

9.SMS Alerts

10.E-Statement

11.Utility Bill Payment Services

12. Merchant Acquiring

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13. Discounts & Loyalty

14. AGRI Products:

SHADABI PLAN (Agri Product Finance)

KHUSHALI PLAN (Agri Development Finance)

15. Privilege Banking

16. Ladies Branch

17. Islamic Banking Products

18. Service Quality

19. Offshore Banking- OBU Bahrain

Savings Account

The smarter your savings, the higher your returns!

Current Account

Take account of things that matter!

Fixed Deposits

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 The future beckons!

MCB Smart Card

Virtual Banking

Whenever, wherever

Safe Deposit Lockers

Where safety is a promise!

Foreign Currency Accounts

When you need financial diversity!

Leasing

Every road is your runway!

Remittances

Trade services

Business is a pleasure!

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SME & Corporate Financing

Islamic Banking

A right way of Banking for a right way of life!

Chapter 4

Departments of MCB

For proper functioning of branches and the overall bank has

been divided in different departments. These departments

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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:
Cash department
Deposit department
Advances & credit department
Foreign exchange department

Cash Department:
The following books are maintained in the Cash Department:
1. Receiving Cash Book
2. Paying Cash Book
3. Token Book
4. Scroll Book
5. Cash Balance Book
When cash is received in counter, it is entered in the Scroll Book
and Receiving Cashier Book. At the close of the day, these are
balanced with each other.
When the cheque or any negotiable instrument is presented at
counter for payment, it is entered in the token book and token is
issued to the customer. The token clerk and the Cashier make
entries in the paying book and payment is made to payee. At
the close of day, the Token Book and Paying Cashier Book are
balanced.
The consolidated figure of receipt and payment of cash is
entered in the cash balance book and drawn closing balance of

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cash.
Opening Balance + Receipts - Payments = closing Balance.

This is very important department because cash is the most

liquid asset and mostly frauds are made in this department,
therefore, extra care is taken in this department and nobody is
allowed to enter or leave the area freely. Mostly, cash area is
grilled and its door is under supervision of the head of that
department. All the books maintained in this department are
checked by an officer.

Deposit Department:
Bank deals in money and they are merely mobilizing funds
within the economy. They borrow from one person and lend to
another, the difference between the rate of borrowing lending
forms their spread or gross profit. Therefore we can rightly state
that deposits are the blood of the bank which causes the body of
an institution to get to work. These deposits are liability of the
bank so from point of view of bank we can refer to them as
liabilities.
The total deposits of MCB are growing since its inauguration but
after privatization there is a sharp incline in over all deposits of
the bank. The increase in deposits is also a cause of increase on
total number of accounts; bank has progressed in both aspects.

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Types Of Deposits:
Deposits can be segregated on two bases, one is the duration in
which there funds are expected to be with the bank and second
is the cost of getting these funds. So divide deposits in two
classes according to duration of deposits i.e.
Time deposits / liabilities
Demand deposits / liabilities
And on the basis of the cost to acquire these funds, a deposit
can be classified as any one of following four:
High Cost
Medium Cost
Low Cost
No Cost.
Banks has different kinds of deposit schemes in order to induce
deposits. These schemes are a mixture of the above mentioned
two types of deposits with an addition of different services &
requirements such as minimum balance' requirement, mode of
transaction, basis for calculation of profit, deductions, additional
benefits, eligibility for different groups.
In the similar fashion, MCB has a large variety of deposit
schemes and some of them are as follows:

Current Account Deposit

In this type of accounts the client is allowed to deposit or

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withdraw money as and when he likes. He may, thus, deposits or
withdraws money several times in a day if he likes. There is also
no restriction of amount to be deposited or withdrawn. However,
there is requirement of minimum balance maintenance of Rs.
1000/-. Usually this type of account is opened by the
businessmen. No profit is paid by the bank and no service
charges are deducted by the bank on current deposits account.
These types of deposits are also exempt from compulsory
deduction of Zakat.

PLS Saving Account Deposit

This type of account is for those persons who want to make
small savings'. This type of account is opened with a minimum
deposit of Rs. 1000/-. Under this scheme deposits can be made
only up to a-costing amount and withdrawals are allowed twice a
week or 8 times a month. If a big amount is required a seven
days notice is required before the withdrawal. The profit is paid
on these accounts on the minimum balance during a month for
the whole of that month. Zakat & other withholding taxes are
deducted as per rules of the government.

Khushhali Bachat Account

This is an advance form of PLS saving a/c. The minimum balance
requirement for this type is Rs. 2500/-. There is also restriction

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on the number of withdrawals as well, i.e. up to 4 times in a
calendar month. For maintaining this extra balance the customer
gets the benefits of profit calculation on daily product basis and
also free service of standing instructions of paying utility bills. All
other rules of saving account are applicable.

PLS 365 Saving Account

This is a special type of saving account in which customer
maintains a minimum balance of Rs. 300,000- and in turn he
gets the benefits of daily profit calculations and also there is no
restriction on the maximum number of withdrawals as was there
in the case of KBA. There is also another advantage of this
scheme that if balance on a particular day falls below the
minimum balance then only the product of that day is ignored
whereas in KBA, if balance falls below the minimum limit then all
the products for that month are ignored on in other words no
profit is paid for that month.

to be borne by bank himself. This increase in cost has left foreign

currency account of no use, therefore, now bank prefers to
accept deposits in local currency rather in foreign exchange.

Hajj Mubarak Schemes:

This is also very closely related with Khanum Bachat scheme.

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This was designed to help the persons who are willing to offer
Hajj but are unable to save required funds. In this deposit
schemes, 2 or 3 years agreement is entered with a customer.
During this time he keeps on depositing monthly deposits and
his account is charged with the accumulated profits calculated
on 6 monthly basis. The scheme is so designed that total
amount to be received at the end of this scheme comes equal to
the anticipated cost of offering Hajj at the end of tenure. Zakat &
withholding tax are deducted at the time of payment.

Monthly Khushhali Schemes:

This scheme is similar to CGC in the sense that an initial deposit
is made in this case also but instead of lump sum payment at
the end of the tenor, the person gets a monthly profit on his
deposits. Under this scheme, the bank has guaranteed minimum
rate of 1% per month but usually this rate is more than 1% per
month. Zakat & withholding tax are calculated as per rules laid
down by the government.

PLS Term Deposit Receipts:

This is a type of term deposit in which a receipt is issued for
varying tenors ranging from 1 month to 5 years or more. These
are in the form of receipts and profit on these receipts is paid
biannually. These receipts are cashable after expiry of the period

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for which they were issued. Different profit rates are applied to
different type of TDRs.

Special Notice Deposits:

Under this deposit scheme, a deposit is received from the
depositor under the condition that he will intimate the bank
before a certain period in case of withdrawals. There are two
types of SNDs, they are 7 days and 30 days notice deposits. The
profit is paid on these deposits but it is nearly equivalent to
saving account rate.

Functions Of MCB:
This was a brief review of different types of deposit schemes.
The Deposit Department handles the account opening, profit
payment and accounting of all types of deposit schemes.

Account Opening:
Account opening is an agreement in which customer offers his
funds and bank accepts these funds, therefore the nature of
relation between a banker and customer is of a contractual one
and all the conditions applicable to this contract act are also
applicable.

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Procedure for opening:
Procedure for opening of account is as follows:
A person, who wants to open any kind of account, has to fill in a
printed form which is provided by the bank, free of cost.
Separate account opening forms are used for different types of
accounts.
Bank usually requires that new depositor must be introduced by
someone. An introducer can be any person known to the bank
but preferably it should be a customer of the bank. However, the
manager can open the account by his own introduction.
If the manager is satisfied, it will obtain the full signature of the
customer- on the form and specimen signature card, makes the
first deposit, and issues the cheque book.
The following are given to the customers:
Pay-in-slip is the proof of deposit. For every payment which is to
be deposited in the bank, the pay-in-slip is to be filled up. The
object of this book is to provide the customer with the bank's
acknowledgment for receipt of money to be credited this
account.
Cheque Book contains a number of cheques. It enables a
customer to make withdrawal from this account or make
payment of various parties by issue of cheque.
Pass Book is a copy of the customers account as appears in the
books of the bank. Balance is recorded in this book by the Clerk.

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Note:
1. In case of partnership account partnership deed should be
attached.
2. In case of companies memorandum and article of
association, certificate of incorporation, certificates for
commencement of business, list of directors and board
resolution for opening of account is also obtained from the
customer.
3. Accounts of Trusts, Executors & Administrators can also be
opened but with the prior approval of the Head Office.
Profit payment & calculation is done in accordance with the rules
of each type of deposit scheme-by the deposit department. The
products for each deposit scheme are calculated separately and
added till the end of 6 month period. Then the sum total of these
products is multiplied with the respective profit rates which are
issued by the Head Office at the end of each half yearly closing.
The profit provisions for each type of deposits are also
calculated on monthly basis by the same department in order to
calculate the net profit or loss position of the branch.
Accounting entries are also made in the respective books of
account by this department. However, in small and medium size
branches, the accountant performs the book keeping duties for
all kinds of ledgers.

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Ledgers Of Deposit Department:
The following types of ledgers are concerned with deposit
departments:
1. Saving Ledgers
2. Current Ledgers
3. Profit & Loss Sharing Ledgers
4. Fix Deposit Register
5. S.N.T.D. Register
6. Call deposit register
7. Cumulative deposit certificate register
8. Cash book
9. Daily profit and loss summary book
10. Officer spaceman signature book
11. Voucher registers
However, in computerized branches all these ledgers are no
more there but only day books are maintained. The rest of the
work is done on computers.

Clearing Department:
Every banker acts both as a paying as well as a collecting
banker, It is however an important function of crossed cheques.
A large part of this work is carried out through the bankers

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clearing house.
A clearing house is a place where representative of all banks of
the city get together and settle the receipts and payment of
cheques drawn on each other. As the collecting banker runs
certain risks in receipt of their ownership the law has provided
certain protections to the banks.
The Negotiable Instrument Act, 1881, lays down hat drawer or
holder of a cheque or draft may cross the instrument generally
or specially. It further lies down that a crossed cheque can only
be paid to a banker, who collects it for a customer in good faith
and without negligence.

Types Of Cheques:

Transfer cheques: are those cheques, which are

collected and paid by the same branch of bank.

Transfer delivery cheques: are those cheques, which

are collected and paid by two different branches of the same
bank situated in the same city.

Clearing cheques: are those cheques, which are drawn

on the branches of some other bank of the same city or of the
same area, which is covered by a particular clearing house.

Collection cheques: are those cheques, which are drawn

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on the branches of either the same bank or of another bank, but
those branches, are not in the same city or they are not the
members of clearing house.

Functions Of Clearing Department:

To accept Transfer, Transfer delivery, clearing and collection
cheques from the customers of the branch and to arrange for
their collection.
To arrange the payment of cheques drawn on the branch and
given for collection to any other branch on MCB or any other
members or sub member of the local clearing house.

For All Cheques Procedure:

Receiving and scrutinizing the cheques and other deposit
instruments, and the pay-in-slip at the counter.
Fixing the stamps.
Scrutiny and receipt by the authorized officer.
Returning the counter file to the depositor.
Certificate and confirmation by the officer in charge of the
department. ,
Separating the cheque into transfer, transfer delivery, and
clearing cheques.

41 | P a g e
Scrutiny Of Cheques
The instrument should be neither stale/ nor post-dated.
The Instrument should not bear any unauthorized
alternation.
The instrument should not be mutilated.
The amount in words and figures should be same.
The instrument should be drawn on any local branch.
If cheque is "crossed Account Payee's" only or "Payee's
Account", it should only be accepted for collection for the
payee's account.
The cheques or drafts should not be crossed specially to
any other bank.
A cheque payable to a firm should not be accepted for
credit to a partner's account.
A cheque payable to one of the joint account holders
should not be collected for the joint account without the payee's
endorsement, or consent.
A cheque drawn by a customer in the capacity of agent,
Attorney, or Manager of his company or firm, should not be
collected for credit to his personal account.
Pay orders, although negotiable should not be collected for
third parties.
Do not collect an instrument in the account of an agent or
of the servant of the payee or endorsee of the instrument.

42 | P a g e
 Not transferable" instruments, like Telegraphic Transfer, or
Mail Transfer Receipt, Pay-slips, and Treasury Receipts, should be
collected for a person other payee.
If an account is new or the balance or operation of the account is
not satisfactory, satisfy yourself about the title of the customers
to the instruments before accepting the deposits.
If the payee is a Government Department, Government Official,
or a trust account the instrument cannot be collected, but for
the payee's account.
If the payee of an instrument is UBL, it can be collected for
credit of the drawers account, or the amount of the instrument
may be utilized as desired by the drawer in writing.

Advances Department:

Advances are the most important source of earning for the

banks. MCB is also giving full attention towards this aspect and it
is also obvious from the growing portfolio of advances and from
very low delinquency rate. The credit portfolio of this institution
is in a very much better shape than other financial institutions of
Pakistan and the credit goes to the management and the staff
who are concerned about the quantity and quality as well.
Loans

43 | P a g e
 Cash Credits
Overdraft

Loans

Loans are monetary assistance by a financial institution to a

business, individual etc. The loans are granted by the bank in
lump sum, so these types called fixed or demand loans. Interest
is charged on the whole amount of a fixed loan.
The borrower withdraws whole the amount of loan. This type of
loan is normally granted against security of gold documents.
In case of demand loans against gold or documents, a demand
promissory note for the amount of loan is taken from the
borrower loans are granted under;

Loan Against Gold

Under this type of loan, the Head Cashier estimates the value of
Gold or Gold ornaments through an agent (Gold smith) and
keeps a margin of 40 to 50 percent. After opening the gold loan
account a token is given to the borrower, which is a bank
receipt.
On repayment of loan, the gold or ornaments held as security for
it, together with the demand promissory note duly discharged is

44 | P a g e
returned to the borrower and his receipt for the gold ornament
taken is entered in the demand loan ledger. This receipts states
that the ornaments returned are complete and in order. Part
delivery of ornaments is given against part payment of a loan
but care is taken that the ornaments still in banks possession
fully covers the balance of the loan outstanding. The interest on
gold loan is to be applied with quarterly.

Loan Against Pledged Stock

In case of advancing such types of loans, the following
precautions are in the mind:
Stock pledged must be readily saleable
Products should be readily saleable
Advance should be within the borrows means

Requirement For Loan

For granting loan to any party or individual, the bank checks
following particulars of the client:
Credibility
Feasibility Report
By Credibility, bank Judges the credibility of the client by his past
bank record, CBI report etc. it is very important in making
decision about giving him loan.
Feasibility report is on the running or proposed business of the

45 | P a g e
client. The report enables the bank to judge the likely return of
the business.

Cash Credit
Cash account is opened in the name of the customer who
borrows from the bank. Customer is granted a loan up to a
certain limit, sanctioned by the head office, from which he can
draw when he requires and interest is charged on the amount
actually utilized by the customer. In order to avoid the danger of
idle fund, the bank charges a certain rate of interest, even if the
customer does not withdraw any amount. The rate charged by
the bank on cash credit is 46 paisa per thousand on daily basis.
The credit is usually given against the securities of goods or
merchandize as follows:

Bank to take possession of the goods hypothecated, but it is

possible that the borrower may actually resist any attempt.

Remittances Department:
DEMAND DRAFTS
Demand draft is a written order drawn by a branch of a bank
upon the branch of same or any other bank to pay certain sum
of money to or to the order of specified person

46 | P a g e
 Demand draft is a negotiable instrument.
Legal provisions are same as that of cheque.
It is to be ensured that purchaser can at least sign.
Thumb expression is not accepted on DD
The following are the parties.
1. Purchaser
2. Issuing branch
3. Drawee branch
4. Payee
A demand draft may be issued against the written request of the
customer before issuing it must be seen that the demand draft
is in order.

Scrutiny Of Application
The DD application must be scrutinized by the counter clerk in
respect of following points.
There should be branch where payment is to be made.
Full name of payer should be mentioned
Amount in words and figures must be same
Application to be signed by the purchaser

Telegraphic Transfer
Transfer of funds from one branch to another branch of the
same bank or upon other bank under special arrangements.

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 Telegraphic transfer is not negotiable
The funds are not payable to bearer
Minor cannot avail this facility

Parties
Following are the parties involved
Applicant
Drawing branch
Drawee branch
Beneficiary
Full name of the beneficiary or account number should be
mentioned in the application form.
Instruction regarding mode of payment should be obtained.
A record in the remittance outward register should be
maintained.
All the remittance must be controlled through number.

Mail Transfer
Transfer of funds from one branch to another branch of the
same bank within or outside the city is called mail transfer.
Mail transfer is not negotiable
The procedure is same as for DD
All precautions must be observed

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Pay Orders
Pay order is meant for bank own payment but in practice
they are also issued to customers.
A pay order is written authorization for payment made in a
receipt form issued and payable by the bank. To the person
named and address.
The following are the parties
Purchaser
Issuing branch
Payee
Charges must be recovered at prescribed rate.
Pay order should be prepared like demand draft.
A record of all issued and paid should be maintained.
Credit voucher should be prepared

Miscellaneous:
Following are some products of MCB that are introduced by
using Commercial Bank after privatization.
Rupee Traveler Cheques
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

49 | P a g e
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.
Mahana Khushhali Scheme
A 5- year fixed Deposit Scheme, targeted to persons with small
savings who would desire a regular monthly return on their
investment.
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.
Zakat will be deducted wherever applicable on yearly basis
whether you will be receiving your profit or encashing your
certificates.

Khushali Bachat Account

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.

50 | P a g e
Prime Currency Account

Launched to attract deposits in foreign currencies. US Dollars,

Pound Sterling, Euro and Japanese Yen.
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.
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 Prime Currency Scheme is exempt from all forms of
taxes including Income Tax, Wealth Tax and Zakat deductions.

51 | P a g e
HAJJ Mubarik Schemes
A 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.

Night Banking Services

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.

UTILITY BILLS COLLECTION

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

MCB MOBILE BANKING

Banking at your fingertips. Dial in anytime to get information
regarding balance and mini statements.

52 | P a g e
PIYARAGHAR
Different queries for my tasks and to come Flexible and
competitive home financing facility with options of home
purchase, construction and renovation.

ISLAMIC BANKING SERVICES

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

MCB CAR 4 U
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.

MCB LOCKERS

The best protection for your valuables. Lockers of different

capacities are available nationwide.

53 | P a g e
Chapter 5:

Explanation Of My All workings &

Assignments during my
internship
My Work Team
Branch Manager (Arif Malik)

Branch Operation (Shahzad ahmed)

Remittance in charge (Ahsan Ali)

Cash Officer (Kamlays Khan)

My Area Of Internship

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My area of internship was the following departments in the MCB:

Customer services Department

Account Opening

Remittance Department

Clearance Department

My first week working was consisting on the observing different

files, documents and procedures in which the following are
important:

(I) Master File: in which every copy of record must be fixed

after the photocopy of original one.

(II) Copy of CNIC: The copy of CNIC many time required for
different purposes.

(III) Seen original and Return: this is a stamp which used to

stamp at the photocopy after seen the original document
I,e CNIC and source of income etc for the purpose of
account opening or collecting amount in Rs as foreign
remittance.

Customer And Service Department:

MY last day of first week was on Customer services desk. It was
good to be at CSD at first as you can judge well what a bank all
about is. What kind of customers come into the bank? What is
the most wanted task in the bank? What are different
departments and the persons who deal different tasks?
On CSD I was assigned to fill pay-in slips and to receive cheques
to transfer in the accounts. On CSD four types of cheques are
presented to be deposited. First cheques of same branch.

55 | P a g e
Second types of cheques are of banks branches of Lahore other
than MCB Bank. Third type of cheques is online cheques that are
of MCB Bank branches other than city. These cheques are dealt
by separate department. Fourth type of cheques is of banks
other than MCB bank and of branches other than Lahore city. All
the above mentioned cheques are received on reception and
then transferred to particular persons. The main objective to do
this is to make a flow in the activity and not to disturb the
routine work as there is always rush to deposit cheques.
While receiving the cheques following points must be
considered.
The title should be the same on both deposit slip and the
cheques.
The cheques should be a cross cheques.
The cheques should neither be stale dated cheques nor
postdated cheques.
I really enjoyed work on reception as it was first time I got
chance to observe different types of customers. Sometimes I
was answered for my questions and sometimes I was ignored.
During my work on reception I felt that my trainer was reluctant
to rely on my expertise.
On reception I was also a silent observer. I observed many
things happening wrong around me but I was not supposed to
say anything and I was not in the position to say something
about I feel.

Account Opening Department:

Second week was bit professional. It was on account opening
department. Account opening is important as an account is a
contract between bank and customer. It was very interesting
week. I developed good intimacy with my instructor.

56 | P a g e
On the first day I learned issuing cheques books. In account
opening I learned what different kinds of accounts are. All the
accounts are categorized on the basis of interest rates and their
nature. Both foreign currency and Pak Rupees accounts are
opened. Term deposits, call deposits and notice deposits are also
offered. The main requirement for individual account is NIC and
proof for profession and introducer which is the account holder
of MCB Bank. I was provided full information about all things I
asked for. On account opening I learned how to deal with
different customers.
Process of opening an account:
First of all, CNIC of the customer is verified by using NADRA
software.
Then account opening form is filled and all required
documents are attached.
Then it is stamped.
Then related officer has a meeting with the customer to fill
KYC form which determines the worthiness of customer.
Then after completing all the processing, all documents are
forwarded to the CPD, which checks all essentials and informs
the branch whether the account is opened or rejected.
If account is opened then customer is informed and if there
are mistakes, they are removed.

Remittance And Clearing Department:

It was on Remittance department. I must say it was the hard
time for my internship. I took time to understand how bills are
collected. What are the different types of transfer or payment
instruments? First of all I learned what demand draft is and how
it is made. Demand draft is an instrument and it is drawn on the
same bank branches or to institutions where the customer does

57 | P a g e
not have any account and payment is to be transferred. It is the
most common form of payment. The other instruments used are
telegraphic transfer and mail transfer. Mail transfer is the fastest
way. Previously telegraphic transfer was very popular but now it
is not commonly used.
I also learned what pay order is. Pay order is used to make
payments which are local as within city. It is the only difference
between demand draft and pay order. Suppose a persons salary
bank receives and the person does not have any account with
the bank, his salary is paid through pay order. Following is the
detail of above mentioned instruments.

PAY ORDERS
A pay order is a payment issued by a bank on the request of the
purchaser. It is a Bankers Cheque. Pay order can only be issued
by a bank that is the member of clearing house.
Through pay order payment can only be made within the city
and in case where both the parties dont want to deal with cash.
A pay order is a promise by the bank to pay a certified amount.
It is sort of a guarantee that the payment will be made and there
will be no fraud. Basically it is a financial instrument in the
hands of customer in written form.
A pay order is always payable by the same bank and same
branch, which issued that pay order. It becomes a liability of the
bank.
A person who wants to get a pay order may be any walk in
customer of the bank. Its not necessary to become an account
holder of the bank for that purpose.

DEMAND DRAFTS
A draft is a payment, which is to be made within the same

58 | P a g e
country, but it is intercity. Payee is presumably in some other
city. A draft is also get prepared by the purchaser in the favor of
payee but a draft is always drawn on some other branch of
either the same bank or some other bank. Both the branches
involved are said to be the
Issuing Branch
Drawee Branch
I was supposed to be on clearing for only three days and I think
it was enough clearing. I learned what are the cheques
transferred through clearing. The cheques which are of banks
other than MCB BANK LIMITED are cleared through NIFT. All the
cheques received from customers are handed over to a person
of NIFT.
The summary of the learning is as under.

LOCAL CLEARING
Local clearing is processed by one person in the cash
department. As the branch of MCB in Model Town is the only
branch this fact significantly comes into notice here. The
workload is too high here as nearly 100 cheques come into
clearing daily.
No doubt that the incorporation of NIFT has made it a lot simpler
and a lot easier to lodge the cheques into clearing and get the
payment thereof but still the number of cheques is as high as a
monster for one person.
The clearing process can be divided into two basic parts:
Inward clearing
Outward clearing
Another important role throughout this procedure is played by
NIFT. A brief introduction of NIFT is as under.

59 | P a g e
NIFT
NIFT stands for National Institutional facilitation Technologies.
Clearing House of SBP has shifted a tiresome part of its work to
a private institution named NIFT. NIFT collects cheques, demand
drafts, Pay orders, Travelers Cheques, etc. from all the branches
of different banks within city through its carriers and send them
to the branches on which these are drawn for clearing. After the
branches approve the instruments drawn on them, NIFT
prepares a sheet for each branch showing the number for
instruments and amount in its favor and drawn on it and sends it
to each branch. A similar sheet for each bank is also sent to
clearing house of SBP where accounts of banks are settled in the
same manner.
The inward and outward clearing are being discussed in detail
here under.
INWARD CLEARING
Inward clearing is basically the clearing of those cheques, which
are drawn on MCB and are handed over to other banks as
deposits. Resultantly those banks present those cheques into
clearing through NIFT for payment to MCB.
NIFT provides the bank a list showing the total number of
cheques as well as the amount drawn on our bank. The same
person also hands over the physical possession to the bank also.
When the officer collects the cheques the following points are
taken into consideration.
1. Cheques are Scrutinized
Care is taken specially that there should be no cutting, no
overwriting, and required stamps are there.
The amount in words and figures should match with each
other.
There should be deposit in the account accordingly.

60 | P a g e
 The presented cheque should neither be a postdated or a
stale dated cheque.
2. Stamps are checked
Three stamps must necessarily be on the cheque.
Clearing Stamp
Crossing Stamp
Endorsement stamp at the back.
The three stamps must be of the same city, same branch and
same bank. Only if the cheque is form outside the city the other
branch should be involved.
3. Debiting the Respective Accounts
Only then the cheques, which are found all correct and up to the
mark are considered and the respective accounts are debited.
Those cheques remain in the possession of the bank for record
and audit purposes.

OUTWARD CLEARING
Outward clearing means the amount of those cheques, which
become receivable for MCB on behalf of the cheques deposited
to MCB by its clients, which are drawn on other banks.
As a result MCB present those cheques to the respective banks
for payment on behalf of its customers. This basically is an
additional agency function or a service that the bank provides to
its customers.

Chapter :6
Financial & Business Analysis of MCB

61 | P a g e
RATIO ANALYSIS
BANK SPECIAL ANALYSIS:
Bank ratio analysis is little bit
different from other organizations
and if we want to see the real
picture of a bank we have to focus
on given special ratios.

Earning assets to total assets

Return on earning assets
Equity to total assets
Loan to deposit ratio

EARNING ASSETS TO TOTAL

ASSETS
Earning Assets
Total Assets
Year 2014 2013
Ratio87.59 88.16
INTERPRETATION
The efficiency of the banking firm is
measured by its ability to utilize its
assets in a manner that they could
be profitable for the firm. This ratio
shows how well bank management
puts bank assets to work. High
performance banks have a high
ratio. Earning assets to total assets
ratio, this has decreased a little bit
which does not matter .Overall its

62 | P a g e
telling 88% of the banks assets are
generating profits for it which is
very favorable.

RETURN ON EARNING ASSETS

Net Profit before Tax
Earning Asset
Year 2014 2013
Ratio 2.78% 2.72%
INTERPRETATION
This ratio shows the utilization of
earning assets by bank
management to earn profit. Return
on earning assets ratio is increased
as compare to previous year which
means bank is using its assets
efficiently to generate the profits.
This increasing trend in this ratio is
beneficial for business and investors
because this ratio shows real
profitability position of business.

LOAN TO DEPOSIT RATIO

Loan
Deposit
Year 2014 2013
Ratio 44.10% 39.26%

INTERPRETATION
Higher of this ratio enable the bank
to have more return with risky
investment through the financial

63 | P a g e
institution. Lesser ratio shows the
better solvency of bank. This ratio is
decreased instead of previous years
which showing company is having
more deposits than the advances
which is favorable for the bank

MARKETABILITY RATIOS

Market analysts are related to

industrys market valve, as measure
by its current share price to certain
accounting values. Investor analysis
includes:

Earnings per share

P/E ratio
Breakup value/Book value per
share
EARNINGS PER SHARE

NET PROFIT AFTER TAX

No of shares
Year 2014 2013
Ratio 21.8519.31
INTERPRETATION
The portion of a company's profit
allocated to each outstanding share
of common stock. Earnings per
share serve as an indicator of a
company's profitability.
EPS has been increased this year as

64 | P a g e
compared to the previous year due
to increase in the net profit after
tax. Investors are earning 22 Rs. On
each share. It shows that it has a
better impact on the market share
of the business and it will attract
more investors.
P/E RATIO

Market Price per Share

EPS
Year 2014 2013
Ratio 13.99 14.56
INTERPRETATION
The P/E is sometimes referred to as
the "multiple", because it shows
how much investors are willing to
pay per dollar of earnings. Price
earnings ratio helps the investor in
deciding whether to buy or not to
buy the shares of a particular
company at a particular market
price.
P/E Ratio has been decreased this
year as compared to the previous
year due to decrease in the market
price. It means that investors are
expecting depreciation in earnings
so they are not willing to pay higher
price. As despite of increase in EPS,
MPS fell, so it is alarming. It shows a
negative trend for the business. It
will have a negative impact on the
market share of the business and it

65 | P a g e
will distract investors.

BOOK VALUE PER SHARE

____Equity____
No. of shares
Year 2014 2013
Ratio94.37 82.73

INTERPRETATION
Book Value per Share has been
increased this year as compared to
the previous year due to increase in
the equity .It shows a Positive trend
for the business as the market price
per share is still higher than it i.e.
139.60. It has a better impact on
the market share of the business
and it will attract more investors.
PROFITABILTY RATIOS
RETURN ON ASSETS

Net Profit after Tax

Total Assets
Year 2014 2013
Ratio2.78% 2.72%

INTERPRETATION
This ratio is an indicator of how
profitable a company is relative to
its total assets. ROA gives an idea
as to how efficient management is

66 | P a g e
at using its assets to generate
earnings. ROA is displayed as a
percentage.
Here this ratio has an increasing
trend. It means the assets of the
business are fully utilized in an
efficient way so shows the
unfavorable trend of the business.

RETURN ON EQUITY
Net profit after tax
Total Equity
Year 2014 2013
Ratio23.83% 23.09%

INTERPRETATION
This ratio is more meaningful for
shareholders who are interested to
know the profit earned by the bank
because this ratio shows how much
profit is being generated with the
money shareholders have invested.
This ratio is showing the increasing
trend as compared to the previous
year & that is beneficial for the
business.

RETURN ON INVESTMENT
Net profit after tax

67 | P a g e
Investment
Year 2014 2013
Ratio 6.13% 7.9%
INTERPRETATION
This ratio represents the return,
which we get on our investment.
This ratio is decreased instead of
previous years and this is
unfavorable. It shows negative trend
for the business.
SOLVENCY RATIOS
DEBT TO EQUITY RATIO

Total Debt
Equity
Year 2014 2013
Ratio7.15 5.44

INTERPRETATION
A measure of a company's financial
leverage calculated by dividing its
total liabilities by stockholders'
equity. It indicates what proportion
of equity and debt the company is
using to finance its assets. Lesser
ratio shows the better solvency of
bank.
This ratio is increased instead of
previous years which shows that
bank is financing majority of its
assets through debt on which it also
has to pay the interest however as

68 | P a g e
the equity also has increased
although in less proportion than
debt so overall the ratio is
favorable for the bank.

Debt ratio
Total liabilities
Total assets
Year 2014 2013
Ratio 0.86 0.86
INTERPRETATION
A ratio that indicates what
proportion of debt a company has
relative to its assets. This ratio is
constant as the previous year it
means banks liabilities has not
grown more the assets and it is
favorable for the bank.

SWOT
ANALYSIS

STRENGTHS:
The largest private sector bank
in Pakistan with a network of 1082
domestic and 7 foreign branches.
MCB has long-term vision,
which plays a very important role in
organizations success.

69 | P a g e
 First bank to privatize, which
has, now become the leader in
market with largest on line ATM
network in the country.
Banks emphasis on consumer
banking by providing them with
innovative saving schemes,
products and services suiting best to
their life style.
Extension and improvement in
services to domestic as well as
foreign customer.
MCB instant financing products
for customer wanting instant loan
facility at MCB branches.
24 hours cash access through
ATM.
Attention and sensitivity to
competition prevailing in the
country.
Easy access to the customers
at their residential localities through
a large number of branches.
Recognition of critical condition
and need for Drastic immediate
change.
MCB has a brand name and
recognition.
It is well aware of the Market
and adopts strategy according to
the competitors strategy.

70 | P a g e
 MCB has now started Mobile
banking, which is definitely a truly
innovative product and according to
the needs of the customers.
The current customers list of
MCB is very large and having a large
number of deposit.
WEAKNESSES
Customers having account,
with small amounts are not given
some services and dealing to those
with high accounts.
Number of branches is
decreasing because of low
profitability.
A sense Insecurity of jobs, with
the downsizing, among the
employees is found.

Experienced but old staff, who are

not aware of using modern
technologies/ equipments?
Political pressure from vested
interest group selection.
A very small foreign network
Financial weaknesses i.e.
excess operating cost
Human Resources i.e. low
morale due to following factors:
No development

71 | P a g e
 Political interference
No marketing of advances
No training for advances in-
charge.
Not many advances to
agriculture sector and small and
medium enterprises.
OPPORTUNITIES
Due to largest ATM network,
MCB can expand its 24 hours cash
facilities to the far off cities of the
growing market demand.
They can capture a large
portion of the market, if they
expand its ATM and branch network
to other countries of the as well.
Increasing focus/target on
different types of customers, MCB
can open women branches,
especially in those areas where
women class want to get involved
but couldnt due to environmental
restriction.
Growing policies of government
on business and commerce sector
provides MCB and opportunity to
efficiently meet with the business
peoples requirement of instant cash
and financing facilities.
MCB has also an opportunity to
expand its new technological

72 | P a g e
advancement like; tele-bank and
Internet banking efficiently.
Focus on small business,
export/ import sector.
Launching of new products like
Mala Maal and Cash Card etc. type
of product in future
To open overseas branches
throughout the world like National
Bank of Pakistan and Habib Bank
Limited or merger with other foreign
banks outside Pakistan.

THREATS
Increasing foreign banks in the
country.
Privatization of other domestic
banks has also increased their
services.
Highly specialized and
attractive services provided by
foreign banks to their customers.
Inconsistency in government
policies regarding to business and
economic sector.
Growing global technological
advancement.
Slower economic growth rate
of the country.
Return on deposits is very low.

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 Inflation rate is high.
GNP and GDP rates are low and
so the savings are low.

Chapter .7:
Annexure
Balance sheet
As at December 31, 2014

2014 2013
Assets
46,753,86 59,946,21
Cash and balances with treasury banks 8 8
Balances with other banks 3,063,774 1,594,660
Lendings to financial institutions 1,418,181 1,224,638
516,898,2 453,808,3
Investments - net 99 45
304,000,5 248,808,3
Advances - net 63 45
31,583,64 29,005,93
Operating fixed assets 6 1
Deferred tax assets net - -

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 37,888,15 27,176,72
Other assets net 5 0
941,606,4 821,278,3
86 04
Liabilities
16,627,70 10,138,72
Bills payable 0 6
59,776,57 38,660,40
Borrowings 8 5
688,270,0 632,309,0
Deposits and other accounts 91 94
Sub-ordinated loan - -
Liabilities against assets subject to finance lease - -
10,735,84
Deferred tax liabilities net 1 4,500,293
29,927,07 20,206,99
Other liabilities 0 1
805,337,2 705,815,5
80 09

136,269,2 115,462,7
Net Assets 06 95

Represented By
11,130,30 10,118,46
Share capital 7 1
49,200,04 47,008,93
Reserves 5 6
49,765,03 43,038,09
Unappropriated profit 1 4
110,095,3 100,165,4
83 91
Minority interest 511,960 489,671
110,607,3 100,655,1
43 62
Surplus on revaluation of assets - net of 25,661,86 14,807,63
tax 3 3
136,269,2 115,462,7
06 95
Consolidated Profit and
Loss Account
For the year ended December 31,

75 | P a g e
 2014
2014
77,411,18
Mark-up / return / interest earned 9
33,770,14
Mark-up / return / interest expensed 4
43,641,04
Net mark-up / interest income 5

Provision / (reversal) for diminution in the value of

investments - net -355,809
-
Provision / (reversal) against loans and advances net 1,093,745
Bad debts written off directly 20
-
1,449,534

40,802,57
Net mark-up / interest income after provisions 2

Non-mark-up / interest income

Fee, commission and brokerage income 7,775,318
Dividend income 729,708
Income from dealing in foreign currencies 1,443,458
Gain on sale of securities net 2,206,577
Unrealized gain 27,324
Other income 1,570,088
13,752,47
Total non-mark-up / interest income 3

58,843,05
2
Non-mark-up / interest expenses
21,014,64
Administrative expenses 1
Other provision / (reversal) net 76,935
Other charges 979,225
22,070,80
Total non-mark-up / interest expenses 1
Share of profit of associates 581,771
Extra ordinary / unusual item -
Profit before taxation 37,354,02

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 2
12,003,45
Taxation - Current year 4
- Prior years -1,074
- Deferred 529,658
Share of tax of associates 47,538
12,579,57
6
24,774,44
Profit after taxation 6
Profit attributable to minority interest -118,859
24,655,58
Profit attributable to ordinary share holders 7
43,038,09
Unappropriated profit brought forward 4
Transfer from surplus on revaluation of fixed assets - net of
tax 47,941
43,086,03
5

67,741,62
Profit available for appropriation 2

Basic and diluted earnings - after tax Rupees per share

RS 22
Consolidated Cash Flow
Statement
For The Year Ended December 31,
2014 2014 2013
Rupee in
000
Cash flows from operating activities
37,354,02 32,932,
Profit before taxation 2 070
-
Less: Dividend income and share of profit of - 1,343,0
associates 1,311,479 68
36,042,54 31,589,
3 002
Adjustments for non-cash charges
1,557,5
Depreciation 1,742,867 34

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 Amortization 364,648 263,024
-
Provision / (reversal) against loans and advances - 2,828,7
net 1,093,745 83
Provision / (reversal) for diminution in value of
investments -355,809 -6,834
Other provision / (reversal) net 76,935 -52,285
Bad debts written off directly 20 0
Provision for Workers Welfare Fund 734,803 646,123
-
1,307,2
Reversal for defined benefit plan net -413,188 85
Unrealized gain on investments classified as held
for trading -27,324 -23,400
Gain on disposal of fixed assets net -31,051 -42,687
-
1,794,5
998,156 93
37,040,69 297944
9 09
(Increase) / decrease in operating assets
Lendings to financial institutions -193,543 326,834
Net investments in held for trading securities 41,638 -1,689
- -
54,385,04 5,904,4
Advances net 6 98
- -
12,278,45 2,814,9
Other assets net 9 59
- -
(66,815,4 8,394,3
10) 12
Increase / (decrease) in operating liabilities
Bills payable 6,488,974 242,442
21,400,05 402009
Borrowings 2 95
55,960,99 873210
Deposits and other accounts 7 03
-
2,487,8
Other liabilities 9,310,253 41
93,160,27 448746
6 09
63,385,56 662747

78 | P a g e
 5 06
-
Defined benefits paid -603,267 706,361
147318
Receipt from pension fund 0 98
- 103982
Income tax paid 9,108,676 28
53,673,62 699020
Net cash flows from operating activities 2 15

Cash flows from investing activities

- -
45,335,73 51,013,
Net investments in available for sale securities 2 745
Net investments in held to maturity securities -597,679 405,975
Dividends received 959,159 848,353
-
- 4,682,0
Investments in operating fixed assets 4,761,613 52
Sale proceeds of property and equipment
disposed off 107,434 173,089
- -
49,628,43 54,268,
Net cash flows from investing activities 1 380

Cash flows from financing activities

-
15,270,83 127592
Dividend paid 8 62
-
15,270,83 127592
Net cash flows from financing activities 8 62

Net investment in foreign branches -213,710 212,509

-
11,439,35 3,086,8
Increase/(decrease) in cash and cash equivalents 7 82

Cash and cash equivalents at beginning of the 61,429,85 572184

year 1 23
Effects of exchange rate changes on cash,
cash equivalents -514,945 609,601
60,914,90 578280
6 24

79 | P a g e
 Cash and cash equivalents at end of the 49,475,54 609149
year 9 06

Chapter.8:

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 Recommendations for
Improvement
The MCB bank (Ltd) doing good Job over the years that way the deposit of
the organization increase and the profitability also increase. The
recommendation for the improvement is as follow.

First of all, the management needs to overlook the major problems that the
organization is currently facing and then develop strategies to eradicate
them. Some of the suggestions that I would like to give at the end are:

Promotion And Mass Media Publicity:

MCB bank can improve its marketing strategies to acquire more promotion and
mass media publicity by the use of effective channels of promotions like TV,
Newspaper Advertisements.

Need To Introduce Friendly Products:

In order to compete in the ever-expanding market both nationally and
internationally,introducing new and efficient products is one of its major
requirements.

Better Reward System:

Its one of the most important requirements in order to reduce the problem of
employee retention and improve motivation.

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Continuous Training of Employee:
1.creation of enhanced performance appraisal system.

2.Implementation of enhanced marketing system

3.Continuous lecture on better communication.

Increase Salaries:
MCB is making good profits but giving less pay to their
employees as compared to their competitors.so their salaries
should be increased.

Conclusion:

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With cooperation of all branch members,I have been able to
learn and experience many new things related to the banking
sector and the banks workings.

I am able to handle the public with respect to many different

workings on many different instances and also in account
opening for customer and can handle many other tasks as well.

Finally I concluded that MCB is good organization for a person for

his long term career workings.Overall working and environment
of the bank is very comfortable and the staff is very helpful and
respectful of each other and I still maintains a professional
environment.

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