Internship Report On MCB Bank Limited

INTERNSHIP REPORT ON MCB BANK LIMITED
Name of Organization: MCB Bank Limited
University of Gujrat
City campus
ACKNOWLEDGEMENT
First of all thank the ALLAH ALMIGHTY, with whom blessing I have done my
Internship report. A number of people have help and support me for the successful
completion of my internship report.
After thanks to Allah, I would thank to all those peoples who have supported me during
the completion of my final report. I acknowledge the support of my supervisors who
provides me ideas about the preparation of the report. I would like to thanks the entire
staff of the MCB Bank Limited who help me and provide me the guidelines for the
completion of the report.

EXECUTIVE SUMMARY
I am done my internship in MCB Bank Limited, GT ROAD, Gujarat Branch. I worked at
different departments of the Bank i.e Operations, Foreign Exchange, Advance. During the
period of 8 weeks. MCB Bank Limited provides a better products to its customers to
fulfill their needs in a better way. The main departments of the branch are Operations
Department (Deposit, Cash Departments and Remittance ) and Advances Department
( Agriculture Landing ,Consumer Lending and Commercial Lending ). I also go throw
the HR Department of the bank functions focusing branch and head office level. During
my internship at the branch, I got detail knowledge about the functions of these
departments.
MCB Bank Limited provides different types of accounts and facilities , the selection of
account is depends upon the customers need and its requirements. The main deposit
accounts are Basic Banking Accounts, Current Deposit Accounts, Saving Accounts &
Term Deposit Accounts. All other products are derived from these accounts. In remittance
department different types of remittance instruments are used i.e Demand Draft, Pay
Orders & Pay in slips etc. Clearing function is also used in remittance department for
collect the proceeds from other banks and also from own bank branches. The clearing
function is used SBP (State Bank of Pakistan) clearing house with the help of NIFT
(National Institute of Facilitation Technology). Finance department gives business
finance to SME (Small & Medium Enterprises) and Corporate Businesses, consumer
finance to individuals and agriculture finance to farmers.
I have completely gone through the HR Department functions, roles and responsibilities.
I study the role of HR from hiring of personal to the benefits and retirement. MCB Bank
Limited has over 10,000 staff (Contractual and Permanent).

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

TABLE OF CONTENTS
S. No.
Description
1
Overview of the organization
a) HISTORY
b) Oranization nature
c) Business Volume
d) Advances Products
e) Competitors
2
Organizations Structure
a) Organization Hierarchy Chart
b) Number of Employees
c) Main Offices
d) Introduction of All the Departments
e) Comments on the Organization Chart
3
Plan of Internship Program
a) Starting and ending period
b) Departments of Training
4
Training Program
a) Detailed Description of Activities Performed
b) Introduction of All Departments
c) Detailed Description of All Departments
I)
HR Department
II)
Operations Department
III)
Credit Department
5
6
7
8
SWOT Analysis
Conclusion
Recommendations for improvement
Reference & Sources

1. OVERVIEW OF THE ORGANIZATION
a) HISTORY
MCB Bank Limited was established under companies act 1913 on 9 th July, 1947 at
Calcutta. But due to changing of the region, the certificate of incorporation was issued
on 17th August, 1948 with a delay of almost 1 year; the certificate was issued at
Chittagong. The first Head office of the company was established at Dacca and Mr. G.M.
Adamjee was appointed its first chairman. It was incorporated with an authorized capital
of Rs. 15 million.
After some time the registered office of the company was shifted to Karachi on August
23rd, 1956 through a special resolution, now recently the Head office of MCB BANK
LTD has been transferred to Islamabad in July, 1999 and now Head office is termed as
Principle Office.
This institute was nationalized with other on January 1st, 1974. At that time it had 506
branches and deposits amounting to Rs. 1,640 million. Although, MCB BANK LTD has a
reputation of a conservative bank but nationalization also left its effects on this institute
as well and by end of year 1991 in which it was privatized the total number of branches
were 1,287 and deposits amounting to as high as Rs. 35,029 million.
When privatization policy was announced in 1990, MCB BANK LTD was the first to be
privatized upon recommendations of World Bank and IMF. The reason for this choice
was the better profitability condition of the organization and less risky credit portfolio
which made'' it a good choice for investors. On April 8th, 1991, the management control
was handed over to National Group (the highest bidders). Initially only 26% of shares
were sold to private sector at Rs. 56 per share.
Mian Mohammad Mansha is the Chairman of the group (and also MCB) and has played
instrumental role in its success. In recognition of Mr. Manshas contribution, the
Government of Pakistan has conferred him with "Sitara-e-Imtiaz", one of the most
prestigious civil awards of the country.
The Bank has a customer base of approximately 4 million, a nationwide distribution
network of over 1,000 branches and over 450 ATMs in the market.

During the last fifteen years, the Bank has concentrated on growth through improving
service quality, investment in technology and people, utilizing its extensive branch
network, developing a large and stable deposit base.
BOARD OF DIRECTORS
Organizational structure is the frame work that defines the boundaries of the formal
organization and within which the organization operates.
Board of Directors
Main Muhammad Mansha
Chairman
S.M. Muneer
Vice Chairman
Directors
Tariq Rafi
Shahzad Saleem
Sarmad Amin
Dr. Muhammad Yaqub
Dato Muhammad Hussein
Mian Raza Mansha
Aftab Ahmad Khan
Mian Umer Mansha
Muhammad Ali Zeb
Datos Seri Ismail Shahudin (All are Non-Executive Directors)

M.U.A Usmani
President & Chief Executive Officer (Executive Director)
MISSION STATEMENT
We are a team of committed professionals, providing innovative and efficient financial
solutions to create and nurture long-term relationships with our customers. In doing so,
we ensure that our shareholders can invest with confidence in us.
VISION STATEMENT
To be the leading financial services provider, partnering with our customers for a more
prosperous and secure future
CORE VALUES:
Integrity:
We are the trustees of public funds and serve our community with integrity. We believe in
being the best at always doing the right thing. We deliver on our responsibilities and
commitments to our customers as well as our colleagues.

Respect:
We respect our customers values, beliefs, culture and history. We value the equality of
gender and diversity of experience and education that our employees bring with them. We
create an environment where each individual is enabled to succeed.
Excellence:
We take personal responsibility for our role as leaders in the pursuit of excellence. We are
a performance driven, result oriented organization where merit is the only criterion for
reward.
Customer Centricity:
Our customers are at the heart of everything we do. We thrive on the challenge of
understanding their needs and aspirations, both realized and unrealized. We make every
effort to exceed customer expectations through superior services and solutions.
Innovation:
We encourage and reward people who challenge the status quo and think beyond the
boundaries of the conventional. Our teams work together for the smooth and efficient
implementation of ideas and initiatives.
b) NATURE OF ORGANIZATION
MCB Bank Limited is a commercial bank and it deals with money and finance, which is
in most liquid form and its substitutes of money, such as cheques, Demand Draft, Pay
Orders, Mail Transfer, bill of exchange. Bank also provides variety of other financial
services like advances loans ( corporate, consumer and Agriculture) and guarantee
facilities like bank grantees and letter of credit facilities. The basis of any banking
organization is borrowing money from individuals, firms and Government. With these
resources and also with banks own capital, the bank advances loans or gives credits to
general public, corporations and small business houses and also invests in securities to
earn profit. The bank makes profit by borrowing at one rate of interest and lending at a
higher rate and by charging commissions for service rendered.

c) BUSINESS VOLUME
Particular
2007
2008
2009
2010
Total Assets
Share Capital
Investments
Deposits
Advances
Profit Before Tax
Profit After Tax
(Rs, 000)
410,485,517
6,282,768
113,089,261
292,098,066
218,960,598
21,308,035
15,265,562
(Rs, 000)
443,615,904
6,282,768
96,631,874
330,274,155
262,135,470
21,867,566
15,374,600
(Rs, 000)
509,223,727
6,911,045
167,134,465
367,604,711
253,249,407
23,154,945
15,495,297
(Rs, 000)
567,552,613
7,602,150
213,060,882
431,371,937
254,551,589
26,253,075
16,873,175
d. ADVANCES PRODUCTS:
The following are main advances products offered by MCB Bank Limited.
1. Running Finance Facility:
i.
This facility is granted to meet the working capital requirement of the

business.
ii.
The overdraft limited is assigned to customer for business use.
iii.
The loan is secured against the mortgage of property.
iv.
The mark-up is applied on the amount which is used by the customer on

daily basis and usually charge on quarterly basis.
2. Demand Finance Facility:

i.
The facility is granted for the purchase of asset.
ii.
The loan is payback in installment.
iii.
This loan is also secured against the mortgage of property.
iv.
Mark-up usually charge on quarterly basis.
3. Cash Finance:
i.
The facility is granted for the purchase of stock.
ii.
This facility is also called seasonal financing.
iii.
Facility is secured against the pledge of stock.
iv.
Mark-up is charge on quarterly basis.

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e. CMPETATORS:
The following are competitors of MCB Bank Limited.
1. Private Sectors Competitors Banks:
i.
Allied Bank Ltd.
ii.
Askari Commercial Bank.
iii.
Faysal Bank Limited.
iv.
Habib Bank Limited.
v.
Bank Al-Habib Ltd
vi.
Habib Metropolitan Bank.
vii.
Summit Bank.
2. Public Sector Competitors Banks:

i.
National Bank of Pakistan.
ii.
The Bank of Punjab.
iii.
The Bank of Khyber.
iv.
First Women Bank.
3. Foreign Banks:
i.
Standard Chartered Bank.
ii.
Alfala Bank Limited.
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2. ORGANIZATION STRUCTURE
11

a) Organization Hierarchy Chart
b) Number of Employees:
12

MCB Bank Limited since its incorporation has the more potential bank not only for its
customers but also for its employees. MCB Bank Limited, offering great working
opportunities for all the peoples who are interested to join MCB Bank Limited and with
passage of time employees is increasing as its business volume is increasing because
MCB Bank Limited provides enhanced career opportunities with dynamic work
employees are motivated with higher salaries according to their education and experience
level. The staff strength of MCB Bank Limited on December, 10 as follows:
Detail
Numbers
Permanent Employees
9,583
Temporary or Contractual Basis
57
Total Staff on Bank Payroll
9,640
Outsourced Employees
3,740
Total Staff Strength
13,380
c) MAIN OFFICES:
Registered Office
MCB Building, F-6/G-6, Jinnah Avenue, Islamabad.
Principal Office
MCB 15 Main Gulberg, Lahore.
UAN: (042) 111-000-111
PABX: (042) 36041998-9
Website: www.mcb.com.pk
d) INTRODUCTION OF ALL DEPARTMENTS:
13

An organization cannot function without proper arrangements of its specific takes,
objectives and duties. The process of grouping jobs according to some logical
arrangements is called departmentalization. In MCB Bank Limited, the branches are
divided into three departments and further divide the operations department into three
departments. MCB Bank Limited divides its branches in two segments one are pooling
branches and others are lending. Pooling branches performs all functions of banking, i.e
deposit, advances & foreign exchange. The pooling branches only accept the deposit but
not perform the function of advances and foreign exchange by itself. These branches
perform these families with the help of nearest lending branch. MCB Bank Limited, GT
road branh is the lending branch.
OPERATIONS DEPARTMENT
i.
Deposits / Accounts Department
ii.
Remittances & Clearing Department
iii.
Cash Department
ADVANCES DEPARTMENT
DEPOSIT / ACCOUNTS DEPARTMENT:
The commercial banks perform two main functions. It accepts deposit from general
public and advances loans. By the performing these functions, they earn profits. Deposit
department is one of the most important department and main department of the bank. It
performs the vital function in the bank because it deals with the supply of money to the
bank. Deposits are the inputs of a bank. Deposits department is just like a heat, as it
function other department also run, otherwise the whole system paralysis. In deposit
department the bank attract deposit by offering different deposit products, like saving &
term deposit accounts.
REMITANCES DEPARTMENT:
Remittance department of the bank performs the function of remitting or transferring of
funds i.e. to transfer funds for customers from one location to another. The transfer of
funds may be from one branch to another or from one bank to other Remittances mean
14

the transfer of money or fund from one place to another place through banking channel.
It may be within locality or out side locality. Pay Order comes under the head of
within locality and Telegraphic transfer (TT), Demand draft (DD), Mail transfer (MT),
Bank Draft (BD) comes under the head of out side locality. A clearing house is a place
where the representative of all banks get together to settle the payment and receipts of
Cheques drawn on each other. There are two main types of clearing, one is inward
clearing and the other is outward clearing.
FINANCES / ADVANCES DEPARTMENT:
The banks accept deposit from customers and what they do after receiving deposit. The
Bank advance loans to individuals & businesses at the rate higher than deposit rates and
earn profits. This function of the bank contributes great deal to the revenues of the bank.
Due to its importance for the bankers success, this area is given special importance and
attention. The primary purpose of this department is to encourage small & medium
businesses to take loans and help them in their business. The bank earns from the
advancement of loan to the people or organization and charges a certain percentage of
interest on it and bank earns profits.
e) COMMENTS ON THE ORGANIZATIONAL STRUCTURE:
The role of MCB Bank Limited management in organizational structure is essential not
only to set the direction for and constantly contribute to clarifying the core functions and
objectives of the organization but also to model the behavior and attitude to support the
results orientation. The study of MCB Bank Limited operational, financial and
investment activities gives an overview of the overall position of the bank. The growth in
every department of the bank is observed from the time the bank is incorporated. In MCB
Bank Limited, almost all decisions are made at the top management level of the bank,
which shows a highly centralized form of structure of the bank. When top management
taking all decisions an overview of the organization is first formulated, specifying but not
detailing any department. Each department is then refined in yet greater detail. Relatively
less important decisions are taken at the branch level but only person who can take these
decisions is the branch manager of the branch. This centralization of authority is helpful
15

as far as quick decision-making, tighter control and secret keeping is concerned.
However, sometimes wrong or ineffective decisions are taken or even sometimes good
and bold decisions are not taken and the opportunity cost has to be incurred.
PLAN OF INTERNSHIP PROGRAM
16
a. Starting and Ending of Internship

My internship started on 17-06-2013 and end after eight weeks at 20-08-2013
b. Departments of Training
I done training in all departments of the branch and connected lending branch. I got
training in HR, operations, advances. I spent two week in each department.
4
Training Program
a) Detail Description of Activities Performed:

I have done hands on experience on all departments of the branch. To enhance the
efficiency the branch divided the group of peoples into departments and divisions. A
department head or incharge leads the team of peoples. I opened the different types of
bank accounts i.e Current, Profit & Loss Account, Term Deposit Account and different
categories of accounts i.e Individual Accounts, Proprietorship Account, Partnership
Accounts, Company Accounts and Trust Account. I completed all the documents of
account opening with the help of Customer Services Officer. I gain hands on experience
in of clearing, I lodged cheques and other negotiable instruments in outward clearing and
debit all clearing received from other banks in inward clearing. I issued different types of
remittance instruments e.g Demand Draft, Pay Orders, Lockers etc and learn about
Telegraphic Transfer, Mail Transfer, the use of these means reduced due to the emerging
online banking facility. The incharge clearing and remittance department coached me.
I prepared credit proposal of fresh clients and for credit line renewal. I prepared stock
reports and different credit statements for reporting purpose. In Advances Department, I
learn about complete credit documentations and processes of credit line approval. I also
work in trade finance department and learn about the different trade products and trade
business.
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b) Introduction of All departments

The MCB Bank Limited, Railway Road Gujrat Branch has three main departments.
1. Human Resource Department (HR Deprtment Regional Office Gujrat.)
2. Operations Department.
i.
Accounts and Deposit Department
ii.
Remittance and Clearing Department.
iii.
Cash Department.
3. Advances Department.
c) Detailed Description of all Departments:
A. Human Resource Department:
Human Resource functions are performed by the HR Division, Regional Office Gujrat. I
spent two weeks in HR Department to know the HR functions and roles. I go through the
selection process of employees used in different departments of the bank.
MCB Bank Limited, hires staff in two ways on e is from batch program (Fresh Induction)
and other is hiring experienced staff from other banks and also hires staff contractual staff
both in batches and experience stuff.
The fresh graduates are hired through MCB Batch Program. MCB needs staff in different
departments. The hiring program starts from advertisement in different news papers and
MCB on websites and different HR recruitment portals. After the received of thousands
of applications from fresh Graduates and Masters, the HR Departments are sorted out
merit wise and test is conducted. After completion of test interview are held in respective
staff colleges. Currently MCB Bank Limited has three staff colleges, Lahore, Islamabad
and Karachi. After passing out the interview the candidates and gone through
comprehensive pre-indention training program. This training program is purely on all
Banking departments in the class room and on the field. After completion of trainings, the
employees are posted at different departments.
In the second one hiring staff process is experience staff. The Regional Heads and
General Mangers asses the need of employee or need for replacement through the field
18

managers. They calls for interviews, select the right candidates for the right department
and send the request to the HR Department for their hiring.
The need assessment is observed at Head Office level taking feed back from filed
managers. Branch Managers also involved in the Human Resource functions, he manage
all the staff of the branch according to the need and jobs responsibilities.
B. Operations Department
Operations Department include all operations activates of the branch. The Branch
Operations Manager manage all activates of the branch. Branch Operations Manager is
responsible for all banking operations in the branch. The operations department divides
into three sub departments.
1. Accounts and Deposit Department:
The main objective of Accounts Department is to keep the records of all financial
transactions of bank in accurate, timely and transparent manner; it is also responsible in
managing existing accounts and also developing new relations. The basic objective of
Accounts Department is to keep records of financial transactions of bank in an accurate,
transparent and time-bound manner. With the adoption of new technology and centralized
banking system the working of accounts department is changed. Now, accounts
department in responsible of managing the existing relationship also cater new
relationships to the bank. They are now more involve in the supply of money. The accept
deposit from general public for the advancing loans
Mission & Vision of Accounts and Deposit Department:
The accounts and deposit department is responsible for the deposit mobilization and
account opening. This department is also responsible for issuance of ATM Cards, Mobile
banking and also introduction of new products newly started by the bank. Department is
also responsible for the maintenance of existing account.
Duties to be performed:
The main duties performed by the officers of Accounts Departments and various
accounting units are as follows:-
19

-
To record/get recorded initial entries of all financial transactions in the

initial books of record and to ensure their proper maintenance.
To reconcile inter-divisional/ departmental monthly/quarterly Accounts

and adjustment of differences.
To control the budgets and maintain the Accounts books of records for
budgetary control.
To maintain Objection Book of Accountants.
To test check and internally audit the accounts of sub-divisions/sections.
To open accounts and complete the process of account opening.
Deposit mobilization and generate business for branch.
FUNCTIONS OF THE DEPARTMENT

Following are the some key functions performed by the Deposit Department in Bank.
a. OPENING OF ACCOUNT:
The main focus of the bank is opening of account also abbreviated in banking language
NTB (New to Bank) because it is the main way to spread and create linkage with
customer and enhance the deposit of the Bank. Deposit is life blood of the bank and core
function of commercial banks. Opening of account is like a contract between bank and
the customer, which is guided by people of deposit section.
TYPES OF ACCOUNTS
Following are the main types of accounts which are available in MCB Bank Limited, the
selection of account is depends upon the customer need and requirements because
different account treats differently, every account gives piece of mind to different people
that why different account are provided by the banks according to the customer needs.
DEMAND DEPOSITS
It is clear from the name that Demand deposit is one which is payable on the demand of
the customer this includes two major accounts current account and saving deposit account
I. CURRENT ACCOUNT
Current accounts are running accounts. It is also known as a checqing account, it is a
bank account in which your proceeds can be deposited and from which you can manage
20

your finances during the month. Current or cheque accounts provide you with a one-stop
facility for managing your finances. The current deposits represent the current liability of
the bank.
Features of Current Accounts:
Following are the main features are the current accounts.
i.
Any person can open account with minimum deposit of Rs. 1000.
ii.
There is no limit for deposit and withdrawals definite.
iii.
No limit for maximum deposit.
iv.
The does not pay any sort of profit to account holder.
v.
All cheques and other instruments should be crossed before they are credit to the
account.
vi.
The bank would not require any prior permission from the account holder for
debiting his/her account for charging expenses, fee, commission, mark up etc
arising out of any dealing with the branch.
vii.
The account holder should maintain a minimum balance of Rs. 10,000 per month
otherwise, the bank deduct of Rs.50 per month account maintenance charge.
viii.
Account statements are provided to the depositors mostly half yearly intervals or
whenever required by him.
ix.
These accounts are completely exempted from zakat and with holding taxes.
x.
If the customer is not performed any transaction for the six month the account
automatically converted into dormant. After 3 years to inoperative account register.
To re-operate such account an application is written in the name of branch manger.
After ten year the if no transaction take place the amount laying in the account
slender to SBP (State Bank of Pakistan).
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II.
PLS SAVING ACCOUNT:
Savings accounts are used to save the money and earn profit. This saving account is
opened with a minimum balance set by each individual bank. There are usually
exceptions for minors such as a lower or no minimum balance to open. Saving accounts
are mostly opened by those types of customers whose baking transactions are not
frequent. They want to save money and earn profit on it. Normally lower and middle
income groups, small traders, professionals, farmers and other salaried classes usually
make such deposits to save small amounts to meet their needs. Funds can be deposited
frequently through cash, cheques, demand drafts, pay orders, telegraphic transfers and
other such instruments.
Features of Current Accounts:
i.
No minimum balance requirement.
ii.
No maximum limit for deposit.
iii.
The deposits can be made individuals, trusts, charitable institutions and provident
fund.
iv.
Zakat on the amount of balance is deducted at shirah rates but zakat is not deducted
if declaration is given by the customer.
v.
vi.
III.
The account statement is provided to depositor as per their instructions.

Profit is paid half yearly at rate which differs after every six months.
Basic Banking Account:
Basic banking Accounts are basic accounts of starting banking relationship. These
accounts are usually open students and low salary person. No account maintenance
charges applied if the account holder restricted to two deposits and two withdrawals. No
zakat is applicable on these accounts.
Features of Basic Banking Account:
xi.
The BBA account is opened with small initial deposit of Rs. 1,000
xii.
No minimum balance maintenance required.
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xiii.
No monthly account maintenance charges.
xiv.
Two deposit & withdrawals are allowed (Cash & Clearing).
xv.
Unlimited cash withdrawals are allowed through ATMs.
IV. Fix or Term Deposit Scheme:

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

Multiple tenors from one month onwards.
Option of premature encashment.
Zakat on the amount of balance is deducted at shirah rates but zakat is
iv.
v.
vi.
not deducted if declaration is given by the customer.

No maximum limit for deposit
Option for ATM debit card to access profit earned.
Option for automatic renewal of term deposits.
These are basic accounts which are offered by MCB Bank Limited, from these products
the bank derive other products with augmented some benefits with the main products or
accounts. Bank also offers these accounts in foreign currency like Dollar, Pound & Euro.
Other accounts or products are as follows:
1. Smart Dollar Account.
2. Saving 365 Gold.
3. Business Account.
4. Saving Xtra Account.
5. Current Life Account.
6. Smart Savings.
7. Khushali Bachat Account.
2.
Remittance and Clearing Department:
There is only one type of remittance:
Inland remittances
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INLAND REMITTANCES:
Following are the main source of inland remittance used in banks.
1. Demand Draft (DD):
Demand Draft is a written order, drawn by one branch of a Bank upon another branch of
the same Bank, or upon other Bank under special arrangements to pay a certain sum of
money to or to the order of a specified person.
2. Telegraphic Transfer (TT):
Transfer of funds from one branch to another branch of same bank or another bank. It is
necessary that person for whom T.T is made has an account in the same bank. Special
codes are used for this purpose.
3. Mail Transfer:
Transfer of funds from one branch to another branch of same bank or another bank
through mail or courier service outside the country. If the person has not the account in
the same bank an advice is attached by the sending bank to shift the amount in the
concerned branch. In suspense account party will have to prove his identity.
4. Pay Order:
A pay order is an instrument used for the payment with in the city. The function of Pay
Order is same as demand draft, the only difference is that the demand draft is order to
other branch in other city to pay the certain amount, to person name mentioned on it.
Bank own expenses are also paid through Pay Orders.
CLEARING
Clearing is the function of settlement of banks receipts and payments with other banks.
The bank collects the cheques of other banks from their customer and presented through
clearing for honor and also received cheques from other bank for payment. This receipt
and payment is settled through the help of SBP (State Bank of Pakistan) and NIFT
(National Institute of Facilitation Technology) facilitate.
CLEARINGHOUSE:
24

A clearinghouse is a place where the representative of all banks get together to settle the
payment and receipts of cheques drawn on each other.
FUNCTIONS OF CLEARING DEPARTMENT IN BRANCH:
To accept transfer, transfer delivery and clearing Cheques from the customers of the
branch and to arrange for their collection.
To arrange the payment of Cheque drawn on the branch and give Cheque for collection to
any other branch of MCB Bank Ltd. or any other member or sub member of local
clearing house.
To collect amounts of Cheques drawn on members of local clearing house sent for
collection by MCB Ltd. branches, not represented at the local clearing house.
b. Description of Tasks Performed by me:
Following are the main tasks which are performed by me in different departments during
my internship in MCB Bank Limited.
I)
I.
Operations Department:
Account or Deposit Department:
During my internship training program, I spend two (2) weeks in accounts department, in
this department, I learn and gain practical knowledge about opening and closing of
accounts. I open every type of accounts (Current, PLS, Term) and every category of
accounts (Individual, Sole proprietor, Partnership and Company Accounts). I complete
the documents required for opening of accounts and learn the procedure to close the
account. Following is the detail about all task mention above.
Account Opening:
Under this section, I learned how to open an account and types of the accounts and
conditions to open the accounts. There are different customers and they want to open an
account which satisfies their requirements, so bank had provided the opportunity for the
customer to fulfill there needs and can open different types of accounts like current
account, PLS account, BBA account, foreign currency accounts, Business Accounts and
many more types of accounts. I open different types of account current, Profit & Loss
25

Account, Term Deposit Account. Following documents are compulsory for opening an
account. I collect all these documents from customer and open accounts.
Documents Received to open a Personal Account:
Copy of CNIC of the person desiring to open the account.

Complete filling of the form.
Filling the Specimen signature Card.
Received minimum opening balance for account opening.
Documents to open a Personal Account:
Copy of National Identity Card of the person desiring to open the account.
Request letter on business letter head.
Copy of NTN or Business Prove.
Filling the Specimen signature Card with business name stamp.
Minimum opening balance is required.
Documents to open a Personal Account:
Copy of CNIC of all partners.

Request letter for opening account and persons authorized to operate account.
Partnership Deed.
If Partnership registered, Form C required.
Filling the Specimen signature Card with business name stamp.
Minimum opening balance is required.
Documents to open a Company Account:
Resolution of Board of Directors for opening of account specifies the persons
authorized to operate the company account.

Memorandum of Association.
Article of Association.
Certificate of incorporation.
Certificate of commencement of business.
Attested photocopies of CNIC all the directors.
List of directors on form 29 issued by SECP (Security and Exchange Commission
of Pakistan )
Documents to open an Agent Account:
Certified copy of power of attorney.

CNIC of the Agent.
26

Documents to open a Trust Account:
CNIC of all the trustees.

Copy of instrument of trust deed
Copy of certificate of registration.
I also examine the deposit slips like cash deposit slip, cheque withdrawal, online transfer
of money, utility bills slip which are presented by the different customers. Following are
the precautions which I learn to examine before forwarding.
Tally the amount on deposit slip with cash and cheques.

Examination of the deposit slips that the names and account numbers are
clearly mentioned.
Cheques are signed by the directors, partners or employees of company,
drawn in favor of them and credited in their account in the bank are too
scrutinized.
Withdrawal of amount can be made at branch only in which account is
maintained. No third party can withdraw money. In current amount can be
withdrawn during banking hours anytime.
Issuance of Cheque Book:

I learn to how to issue cheque book to the account holders. In this, new account holder
are issued cheque book and old account holder fills the requisition slip for the request for
checque book issuance. The presence of accountholder is necessary to receive cheque
book. If third party comes to receive cheque book then an authority letter is received from
him and signatures are taken and then issue him cheque book.
Issuance of Lockers:
Branch also offers Safe Deposit Lockers facility to their customers. The lockers are
invariably to be installed in the Strong Room of the Branch to ensure maximum security
against burglary, theft and riots. Each locker irrespective of its size has a separate number
and is fitted with a double key lock which cannot be opened except with the two keys,
one being Master Key under the custody of Operations Manager /Authorized Officer and
the other possessed by the customer.
27

The relationship subsisting between Bank and Person to whom locker is rented out will
be that of a Licensee and a Licensor and not that of a customer and banker.
Lockers are offered in three sizes, small medium and large. Before issuing a licence for
the use of locker, make it sure that the licensee maintains an account in any branch of our
Bank in the same City / Town, preferably in the branch where locker facility is available.
A license for this purpose can be issued in single or joint names.
The following forms / formalities should be completed:a) Application Form MF - 19.
b) Specimen Signature Card MF - 19A.
c) Either / Survivorship Form MF - 19E (only if the locker is in joint names).
II.
Remittance & Clearing Department:
In the Remittance & Clearing department, I learnt different types of money transfer from
one place to another. Different types of methods are used to transfer money with a secure
means from one place to the other place.
Demand Draft
It is the instrument used to transfer the money from one city to another. The person who
wants to made payment to other person or business, he make a request to prepare a
demand draft. It is prepared on a written form. The beneficiary name, applicants name,
amounts in words and figures, purpose of transfer of money and services charges are
written on demand draft. It is made either for cash or through cheque. The bank is
charged commission on it.
Mail Transfer
The transfer of money in the shape of document from one place to another by mail is
called Mail Transfer. It is the safest and fastest mode for remittance. All other procedure
is same as demand draft.
Telegraphic Transfer
It is also an instrument used to transfer the money from one city to another. It is the
fastest transfer of money from one bank to another. The transfer is made on the behalf of
28

the customer through telecommunication. Other requirements are same as they are in the
demand draft.
Pay Order
Pay order is more liquid as compare to cheque. It is used to secure transfer of money
from one place to another. The client gets a printed form from the bank to fill it and
deposits the amount. The bank charges the commission and holding tax for this purpose.
It is the written order which is issued by the bank.
Online Fund Transfer
With the implementation of core banking system SYMBOLS, the issuance of mail
transfer and telegraphic transfer goes to minimum. Now, customer can transfer money
from own account to any other account of the bank. Customer fills the application form
SF-100 and signs it. The remittance teller verifies the customer signature and transfers the
funds to the account, which is customer requesting.
Clearing:
Clearing is of two types i) Inward Clearing and ii) Outward Clearing.
i)
Inward clearing is received by the branch in the morning. In the inward

clearing
the branch received the cheques which are issued by their account holders to the
account holders of other banks. The teller received the cheques and sorted out that
all cheques are in order, all stamps are fixed on it and account holder has balance
in the account. If the teller found defect, he/she return the cheque.
ii)
In outward clearing the branch sent the cheques of
other banks in the
afternoon to
other banks for clearing, which are presented by our account holder.
NIFT perform the function of clearing with in the city or area and also other cities. The
services of other cities are called Intercity Clearing. NIFT also provide the facility of
clearing cheques in same day called Same Day Clearing, in which the cheques are
cleared with in working day.
III.
Cash Department:
29

In cash department the cash and prize bonds are receipt and paid. The cash department
also received utility bills. The Operations Manager briefly tells me about the functions of
cash department.
III)
CREDIT DEPARTMENT
In Advances Department, I learnt about the different credit facilities provided to the
customer by the bank. I prepare different types of credit proposals for fresh facilities and
for renewal of credit facility. I prepare credit customers stock statements and different
credit statements submitted to SBP and head office. There are three categories of
financing i) Corporate and SME ii) Agriculture Finance iii) Consumer Finance.
The basic principle of lending as follows:
The art of affording credit facilities is very intricate and the banker has to take various
factors into consideration. These considerations are:
1. Diversification:
2. Safety / Security:
3. Liquidity:
4. Profitability:
5. Desirability:
6. Customers character:
7. Customers capability :
8. Customers capital:
9. Project viability:
10. Credit Risk and Return:
Not invest in single industry.

The loan must be adequately secured.
Customer in position to repay on bank demand.
Bank earns profit on loan.
Funds are used for productive purpose.
Customer has good credit history.
Customer has capacity to pay back.
Customer has own capital to run business
Project is profitable
Banks reward are more than risk
I lean following general credit facility process:

1.
2.
3.
4.
Customer request for credit facility.

Branch made the credit proposal and submits to Regional Credit Hub.
Regional Credit head jointly approved the limit with Manger Credit Risk.
Branch allot sanction limit to Regional Manager, if the limit of facility exceed his
allotted limit, the credit request to forward to higher offices.

5. After approval the branch mortgages the property and received all required
documents from customer.
6. At last the facility provide to the customer.
30

The following are credit facilities are provided by the MCB Bank Limited to his
customers. I lean about each and every product and process all credit facility.
i)
Corporate or SME Financing.
Running Finance:
In running finance facility the bank provides the facility to withdraw the amount from his
account up to the limit approved. The Running Finance facility is secured against the
mortgage of property. This facility is granted to meet the short term working capital
requirements. So the tenor of the RF facility is normally one year. I prepare the credit
proposals of different customers for fresh clients and renewal of existing facilities
running.
SPECIAL PRECAUTIONS
I learn that the bank ensures that:
Running Finance facility is not being used for long-term financing needs. In this
respect, the financing needs of a borrower should be ascertained with regard to
its seasonal cycle / cash flows.

Current utilization level is constantly monitored to ensure that the credit limit is
not breached.
The customer makes periodic adjustments, at least quarterly, unless otherwise
approved.
No disbursement is made against expired limit.
Documentation: Following documents are obtained at the time of disbursement of
credit facility.
Promissory note, duly stamped (IB-12)
Mark-up Agreement (IB-6)
Sufficient, tangible securities with or without collateral, realizable of stable
value with necessary documentation [e.g. Letter of Hypothecation (IB-25) /
IB-28 & IB-31 in case of Deposit Certificates, Shares / Securities etc.
For property including IB-22 or IB-24, etc.], and Adequate insurance, as
appropriate, covering assets charged in Bank's favor. The cost of insurance is
to be borne by the borrower.
Cash Finance:
31

Cash Finance is a facility where an amount is disbursed against pledge of locally
procured goods and / or merchandise. The amount after retaining the prescribed
percentage of margin on stocks is transferred in a separate cash finance account of the
customer. Delivery of pledged stocks is allowed on payments.
Special Precautions:
The Bank should ensure that:1. Proportionate mark-up has been recovered at the time of issuance of each
2.
3.
4.
5.
Delivery Order and at quarter ends.

Each tranche is adjusted within 90 180 days or earlier, as per Approved terms.
Rollover is allowed against fresh stocks only.
The security is of durable goods (of non-perishable nature).
The goods pledged are in the Banks effective control under lock and key under
Banks nominated Muccadum / guard. Open pledges to be allowed only under
specific permission.
6. Approved Muccadums are hired and deputed, in accordance with Banks
Muccadumage policy.
Application Polices:
Draw down is allowed on receipt of goods for pledge. Drawing power is to be
determined, based on value of goods placed under pledge along with stipulated margin.
Finance is recovered on each delivery. Each drawdown is required to be adjusted within
the stipulated period (generally 90 to 180 days) along with proportionate mark-up
(Recovery of Mark-up on Cash Finance) and at quarter ends.
Documentation: Following documents are obtained at the time of disbursement of credit
facility.
1. Markup Agreement (IB)
2. Promissory Note (IB-12)
3. Letter of Pledge (IB-26)
4. Where collateral property is obtained, relevant documents including IB-22 / IB-24
to be obtained.
Demand Finance:
Under this type of facility, finance is allowed to the borrower for a fixed period usually
exceeding one year, repayable either in periodic installments or in lump sum, at a future
date. This type of finance is of non- revolving nature. The demand finance facility may
32

also be created as a consequence of loan rescheduling or as a consequence of forced
financing.
Special Precautions:
It should be ensured that:
1. The security possessed is commensurate with the terms of finance.
2. Where the installment payment is delayed, the additional mark-up is charged for
the delayed period.
3. Non-timely installments are carefully monitored, followed up, and reported to
senior management.
4. Where the finance has been forced, the payment is to be made in lump sum or
through specific installments, as agreed upon.
Documentation:
A list of documents required for accommodating Demand Finance is given below:
1. Mark-up Agreement (IB-6A)
2. Promissory Note (IB-12)
3. Legal opinion, property documents and non-encumbrance certificate, where
applicable including IB-22 / IB-24 / IB-28 / IB-31 etc.
4. Balance Sheet, P&L Accounts for the past three years, for appraisal and analysis.
ii)
Agriculture Financing:
Farmers are eligible for Agricultural Financing for each of the following purposes:
1. Farm Credit
a) Production Finance
Seasonal requirements for crops i.e. purchase of seed, fertilizer, pesticides and
weedicides etc., by the farmers.

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

b) Development Finance
Fixed investment
Purchases by farmers of tractors implements, tube wells, farm machinery, land

improvement, farm powers, construction of cold storage, godown and bins,
refrigerator van by farmers. Fixed capital for storage of raw agricultural/Farm
produce, purchase of trucks, bull carts, transport machinery, country boats,
forklifts, purchase of pick-up and mini trucks for agriculture use, effective
33

microbes technology, construction of laboratory for integrated pest management
etc.,
Working capital
Working capital requirement for short term needs for packing, transportation,
processing and other short term needs of the farmers.
2. Non Farm Credit

MCB provides Non-farm Credit to its customers for financing livestock, dairy, poultry,
fisheries, forestry etc. In terms of period of finance, Non-farm Credit divides into the
following two categories, viz.
Fixed Investment
i)
MCB offer medium and long-term finances facilities for purchase of livestock,
milk processing and chilling plants, motorcycle for milkmen, veterinary
clinics, compound feed making industry, poultry farming, dairy farming,
marine fisheries, cold storage for fisheries, forestry, apiculture, sericulture,
biogas plant, sulphuric gas generator etc.,
Working Capital
ii)
Short term finances for the items mentioned above in 2 i. (i.e. purchase of feeds,
raising and veterinary expenses, and artificial insemination unit/services, etc).
iii)
Consumer Financing:
MCB offers the following consumer finance facilities exclusively to its existing account
holders.
MCB Savings Instant Financing and MCB Instant Financing

Easy Personal Loans.
Auto Lease Financing Scheme for Individuals
Pyara Ghar
34
Vision of MCB:
Challenging and Changing the Way you Bank.
Mission of MCB:
MCB Banks team of committed professionals is dedicated to maintaining long
term customer relationships through outstanding service and convenience.
Future Objectives:
Following are the main future objective of MCB Bank Ltd.
Maximize use of technology to ensure cost effective operations.
Develop a customer service oriented culture.
Explore new avenue for growth and profitability.
Effectively manage and mitigate all kinds of risks inherent in the banking.
Achieve sustained growth and profitability in all areas of business.
Build and sustain a high performance culture, with a continuous improvement.
Strategic planning:
Following are the strategic planning of the MCB Bank Ltd for the future business.
Facilitate alignment of the vision, mission, corporate objective and with the
business goals.
Provide strategic solutions to mitigate weak areas and to counter threats to profits.
Provide strategic initiatives and solutions for projects, products, policies and
procedures.
Comprehensive plan for future to ensure sustained growth and profitability.
6) Swot Analysis:
35

SWOT analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieve that objective.
Following is the SWOT analysis of Muslim Commercial Bank ltd.
i) Strength:
Strength means the attributes of the person or company that are helpful to
achieving the objective(s). Strengths are the factor which arises internally forms the
organization and provides benefits to the organization if we adopt these strengths.
Following are the Strengths of the Muslim Commercial Bank ltd.
Maintaining the healthy correspondent relationships with foreign banks
Satisfying the Customers by fulfilling their needs and wants.
Holds a sound repute in the financial circle.
Personalized services of the staff to the employees.
Construction of branches in Commercial Area so that the customers
can easily approach the bank.
Increase the Bank reputation in the market by fair dealing in all
aspects.
Develop the technical managements skills in the employees.
Adopting the team based approach for batter results.
Provide a record business in exports sector.
All of transactions and information regarding customers deposits has
been computer base.
Muslim Commercial Bank Ltd. has launched its Mobile ATM Service,
which is the Pakistans First Mobile ATM Service.
ii) Weakness:
36

Weakness mews the attributes of the person or company that are harmful to
achieving the objective(s). Weaknesses are the factor which arises internally forms the
organization and can be avoided by the organization. Following are the weakness of the
Muslim Commercial Bank ltd.
No so much advertisement on electronic media has been seen yet.
Low no of employees in branches.
Employees are burdened with over work.
Division of work and description of job is not properly defined to each
and every staff member.
iii)
Offline status of the branch reduces the customers trust on bank.
Opportunity:
Opportunities mean external conditions that are helpful to achieving the
objective(s). By availing the opportunism form the external market, the organization can
lead the market with flying colors. Following are the Opportunities which are there in the
market for the Muslim Commercial Bank ltd.
iv)
Extra advertising support will enable MBC to improve their services.
Grow in size also increase the profitability and trust of the customer.
Emphasize on the Information Technology.
Increase the E Banking and educated customer on E-Banking.
Threats:
Threat means the external conditions which could do damage/harm to the
objective(s) of the organization. MBC has to keep their eye on the threats available in the
market and try to keep proper strategies. Following are the Threats to the Muslim
commercial Bank Ltd.
MCB is facing a strong competition by its major competitors; Habib Bank Ltd
and Bank Alfalah. Business of these banks is also growing with very high pace.
Weak economic conditions of Pakistan.
Unregistered business concerns.
37
MCB should enhance its Branch Network, in order to capture the market of
different areas.
The SWOT analysis of the bank signifies that its strengths overcome its weaknesses and
its opportunities are more than its threats. This is positive sign for any Organization
7) Conclusion:
In the light of SWOT analysis and Critical Analysis of the MCB Bank Ltd I
want to conclude the following point for the Improvement and success of MCB Bank
Ltd.
Continuous Improvement:
MCB Bank Limited should continuously conduct its financial analysis and compare it with
their competitors and evaluate their performance with other competitors hence the progress
and good will of the organization will increase.
Proper Planning:
MCB Bank Limited has to conduct proper planning for activities; they have to plan the
objective of the organization according to the Mission and Vision Statements of the
organization.
Advertising Campaigns:
In this fast word where the world has become the Global village no one can deny the
importance of advertisement. Most of the organizations are advertising their organization on
different media zones. They are getting most of the shares of the market which MCB Bank
Ltd is not availing, MCB has to adopt this strategic to get the more and more market shares.
This way they can increase their profits and gets the trust of the peoples.
8) Recommendations
38

From the quantum of the profit and its financial data it can easily judged that
after privatization MCB is performing well. Its deposits are growing day-by-day and so is
profitability.
Following are recommendations for MCB.
Shortage of Staff:
Almost in all branches of MCB Bank Ltd the problem of Shortage of Staff is very
common. There are only few employees working on the bank, they are over loaded due to
shortage of the staff. One employee of the MCB Bank Limited is working on different
seat at a time which creates the stress for the both customer and the employee because
customer has to wait more than actual timing so higher management of the MCB Bank
Ltd has to hire the well educated and trained staff for their organizations.
Staff Is Not Adequately Trained:
Staff in almost all branches of MCB is not adequately trained. In Most of the branches,
old peoples are working who dont have idea about the new technology and hence the
efficiency of the organization will reduce and the output also. Higher management has to
take step to educated their staff and conduct training program for their old employs so
that the can also keep steps with the changing technology.
Incentive to Employees:
Bank should give some more incentive to its employees in order to remove the conflict
between lower and higher officers and should try to improve the working condition of the
bank.
9) Reference & Sources used

MCB Manuals & Books
http://www.sbp.org.pk
http://mcb.com.pk/mcb/about_mcb.asp
http://en.wikipedia.org/wiki/Muslim_Commercial_Bank
39

http://www.mcb.com.pk/mcb/mission_vision.asp
http://ezinearticles.com/?Banking-Today&id=69113
http://en.wikipedia.org/wiki/Mobile_banking
http://en.wikipedia.org/wiki/Bank
http://chestofbooks.com/finance/banking/Elementary-Banking-AIB/The-Functions-OfBanking.html
40

Internship Report On MCB Bank Limited

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INTERNSHIP REPORT ON MCB BANK LIMITED

Name of Organization: MCB Bank Limited