mcb bank ltd

INTERNSHIP REPORT

MCB Bank Ltd.

hShahdara mor Branch, Lahore.　

　

PRESENTED TO: IMTIAZ ALI

PRESENTED BY: MARYAM AGHA

B.COM (Hnrs)

SESSION : 2009-2013

HAILEY COLLEGE OF COMMERCE

UNIVERSITY OF THE PUNJAB

Hailey College Of Commerce University Of The Punjab Page 0

Dedication & Acknowledgements

I dedicate this internship report to my parents. Because of their prayers and encouragement I have been able to complete this report.

Praise is to Allah, the most Gracious and Merciful, who blessed me with the knowledge and wisdom and enabled me to overcome this task. Heartiest gratitude to my parents without their continuous encouragement and love I could not have accomplished this task.

I am also very grateful to all the staff members at MCB Shahdra Morh Branch Lahore.


Executive Summary

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch.

MCB's operations 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 controls. The Bank has taken the lead in introducing the innovative concept of centralizing Trade Services in the country by providing centralized foreign trade services to branches with a view to improve efficiency, expertise and reduce delivery cost.

During my internship in MCB I worked in Remittances, Advances, Foreign Exchange and Customer Service Office department and I successfully completed all the task/duties that were assigned to me.

During the course of internship I learned about different functions performed by Remittances, Advances, Foreign Exchange and Customer Service Office department and bank as a whole. I also learned bank’s correspondence with their customers and within branches. I learned about documentation requirements and record keeping for different activities and processes, especially the documentation requirement for different kinds of financing facilities.


Table of Contents

About the Organization 1. MCB in Brief 05

1.1. History 05

1.2. The Mission 06

1.3. The Business 06

2. Principles of Performance 06

2.1. Customer Focus 06

2.2. Quest for Quality 06

2.3. Employees Respect 06

2.4. Team Based Approach 07

2.5. Good Corporate Citizenship 07

3. Corporate Information 07

4. Management Committee 09

Chapter 2

Business Operations

1. Banking Sector Overview 09

2. MCB’s Performance Overview 10

3. Products and Services 11


3.1. Personal Banking 11

3.2. Corporate Banking 14

3.3. Online Services 15

3.4. Virtual Banking 16

3.5. Islamic Banking 17

4. MCB’s Competitive Strategies 17

Chapter 3

Learning asa Student

1. Duties & Accomplishments 18

Ratio analysis 23

Bibliography 24

　

　

　

　

　

　

　

　


About the Organization

1.MCB in Brief

1.1. History

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years in Pakistan, with a network of over 900 branches, over 750 of which are Automated Branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch, which as a combination is considered to be the core competence of MCB.

MCB has become the only bank to receive the Euro money award for the fourth time in the last five years. MCB won the "Best Bank in Pakistan" in 2005, 2004, 2003, 2001, and in 2000 the "Best Domestic Bank in Pakistan" awards. In addition, MCB also has the distinction of winning the Asia Money 2005 & 2004 awards for being "The Best Domestic Commercial Bank in Pakistan".

Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer.

MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking. Corporate clientele includes public sector companies as well as large local and multi-national concerns. MCB is also catering to the growing middle class by providing new asset and liability products. MCB looks with confidence at year 2005 and beyond, making strides towards fulfillment of its mission, "to become the preferred provider of quality financial services in the country with profitability and responsibility and to be the best place to work".


1.2. The Mission

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

1.3. The Business

MCB is in its over 50 years of operation. It has a network of over 900 branches all over the country with business establishments in Sri Lanka and Bahrain. The branch break-up province wise is Punjab (57%), Sindh (21%), NWFP (19%) and Baluchistan (3%) respectively.

2.Principles of Performance

2.1. Customer Focus

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 exceeds their expectations.

2.2. Quest for Quality

MCB strives to achieve excellence by ensuring that every moment of our time is spent in adding value, making sure that we do things right, first time, and every time. With this quest for quality, MCB has always taken initiatives in 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.

2.3. Employees Respect

MCB encourages diversity and treat each of our employees with fairness. MCB gives constructive feedback for their continuous development and seek suggestions from all employees for further improvement. The bank ensures that quality performance is acknowledged and rewarded and exercise utmost responsibility in decision-making with regards to our employees.


2.4. Team Based Approach

MCB believes in achieving its Mission and Vision by working together as a combined group. MCB treats its employees as its internal customers and ensure that the requirements of internal customer focus are always met. Equipped with in-depth product knowledge, and recognizing the strengths in each individual, the bank strives for optimum-results from our co-workers and bringing out peak performances by working towards common goals and objectives in today's dynamic banking environment.

2.5. Good Corporate Citizenship

MCB seeks to continuously improve the quality of life in our communities. The bank realizes that it has a responsibility to the society in which it operates and it seeks ways of playing a positive role for the betterment of the community at large for a progressive environment, better living and a brighter future.

3.Corporate Information

Board of Directors Mian Mohammad Mansha Chairman S.M.Muneer Vice Chairman Tariq Rafi Mohammad Arshad ShahzadSaleem Sarmad Amin MianUmerMansha Aftab Ahmad Khan AtifYaseen Mohammad AftabManzoor President & Chief Executive Advisor RazaMansha


Audit Committee Mian Mohammad Mansha Chairman MianUmerMansha Member Aftab Ahmad Khan Member Chief Financial Officer

Ali Munir

　 Company Secretary Tahir Hassan Qureshi Auditors

A.F.Ferguson& Co.Chartered Accountants

Riaz Ahmed & Co.Chartered Accountants

Legal Advisors

Mandiwalla&ZafarAdvocates & Legal Consultants

Registered Office

MCB Building, F-6 / G-6,Jinnah Avenue, Islamabad.

Principal Office

MCB Tower I.I. Chundrigar Road, Karachi.


Registrar's and Share Registration Office THK Associated (Pvt.) Ltd.

Shares Department, Ground Floor,Modern Motors HouseBeaumont Road, Karachi.

　

4.Management Committee

　from left to right

M.U.Usmani Malik Abdul Waheed Salman Ahmed Usmani Ali Munir

Mohammad AftabManzoorShahidSattarAneeqKhawarShoaibQureshiMusaddiqIjazZafarAbrar

NaqviAamer Hassan Zaidi

Business Operations

1. Banking Sector Overview

Financial sector in Pakistan is going through a fast-paced transition as new groups were buying out foreign banks’ operations in Pakistan. The number of listed banks is also increasing. While the income from core banking activity has increasing due to higher business volume, earnings are also expected to improve due to ventures into consumer finance, housing finance and enhanced lending to the agriculture sector.

In just four years the banking industry has expanded tremendously and now there are more than two dozen commercial and investment banks operating in the country. Commercial banks in the private sector had performed well since their inception, registering overall growth in the deposit base and profits. The banks also managed to maintain a healthy credit portfolio.


Foreign banks have a strong presence in all major cities and are targeting high net worth individuals and blue chip companies. Their strategy is quite successful as they account for about 34 percent of total sector profits, despite having only 15 percent of deposits and 16 percent of advances.

During the first six months of the ongoing fiscal year, total assets of all the scheduled banks increased by Rs 239 billion. Total assets grew by 8.5 percent from Rs 2,800 billion in June 2004 to Rs 3,039 billion in Dec 2004. During the first six months of 2004-05, there was also an increase of Rs 277 billion in the net advances of the scheduled banks. Net advances grew by 19.3 percent from Rs 1,437 billion in June 2004 to Rs 1,714 billion in Dec 2004.

2. MCB’s Performance Overview

The first half of 2010 was very promising for MCB, as the bank has achieved pretax profits of PRs. 4.2 billion, compared with PRs. 2.2 billion for the same period in 2009. Profit after tax has more than doubled compared to the corresponding period for 2009 and exceeds PRs. 3 billion – highest ever profit in the history of MCB. This translates into earning per shares of PRs. 7.43.

Advance and deposit increased to PRs. 156 billion and PRs. 241 billion reflecting a growth of 14% and 10% respectively. Additionally the bank’s assets expanded by 16% during the half year ended 2010 and crossed PRs. 300 billion marks.

Bank’s equity (capital and reserves) increased by 41% during the half year, which was due to the issue of right shares and retained earnings. Increase in equity would improve the lending limit and would provide the opportunity for significant growth of the bank’s balance sheet. This would also help to meet the capital requirement under Basel Accord II, which will be effective from 2008.

Based on continuing growth and consistently outstanding performance, MCB has once again received the Euro money Award 2005 for the “Best Bank in Pakistan”. MCB has become the only bank to receive the Euro money Award for Excellence for the fifth time in last six years. In addition, Asia Money has also declared MCB as “The Best Domestic Commercial Bank in Pakistan” for the year 2005.


3.Products and Services

3.1. Personal Banking

Deposit Accounts

KhushaliBachat Account

KhushaliBachat Account, a Rupee savings account is one of MCB Bank’s most popular products. Due to the low initial deposit, the account can be opened by people from all walks of life and still avail the facility of daily product profit calculation.

MahanaKhushaliBachat

MCB Monthly Khushali Scheme provides you with a steady income every month. Just purchase a Monthly Khushali Certificate and you will enjoy a steady income of your total deposit every month.

Pak Rupee Savings Account

MCB’s Pak Rupee Savings Account offers you attractive returns on your Pak Rupee investment.

In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines.

Pak Rupee Current Account

MCB’s Pak Rupee Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day plus you can avail finance facility up to 75% of the total deposit.

In addition, you have access to a countrywide ATM network convenient cash accessibility 24 hours a day. The facility also provides you with


unlimited daily transactions with a limit on maximum withdrawal amount through the ATM machines.

Pak Rupee Term Deposit

MCB Pak Rupee Term Deposit gives a higher rate of return. It gives you choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits.

Saving 365

The MCB Saving 365 calculates profits on a daily product basis and gives you the facility of unlimited withdrawals.

Foreign Currency Savings Account

MCB’s Foreign Currency Savings Account offers you attractive returns on your Foreign Currency investment.

You can invest in any of the four currencies i.e. US Dollar, UK Pound Sterling, Japanese Yen or Euro

Your foreign currency account is exempted from Zakat and withholding tax

Foreign Currency Current Account

MCB’s Foreign Currency Current Account offers you the convenience of unlimited withdrawals i.e. access to your funds whenever you want without any notice. There is no limit on the number of transactions you make in a day.

MCB Foreign Currency Term Deposit

MCB Foreign Currency Term Deposit gives a higher rate of return. It gives the choice of 1 month, 3 months, 6 months, 1 year, 2 years, 3 years, 4 years and 5 year term deposits.

Dollar Khushali Account

The Dollar Khushali Account, a Dollar based account was introduced in 1993 at selected MCB Bank branches. Today, you can open a Dollar Khushali Account at over 200 branches in Pakistan.


Loan Products

MCB Business Sarmaya

“MCB Business Sarmaya” is the best Running Finance facility against your residential property which empowers you to manage your business dealings better. So act today and get MCB Business Sarmaya and thus improve your business, avail lucrative opportunities and expand your business, with absolute satisfaction of cash flows.

MCB Car4u

Life is like a chess board. You plan your career options. You analyze your business moves. But when you really want to improve your life, you make a power move. MCB CAR4U Auto Finance is the power move that assists you in more ways than you ever imagined. It is affordable, with lowest mark up, flexible conditions, easy processing and above all, no hidden costs.

MCB PyaraGhar

Some destinations require a long wait. Like waiting for a home of your own. But with MCB PyaraGhar it is now easy to step into your home and start living a real life.

MCB PyaraGhar is an ideal Home Finance from your own bank that lets you Purchase, Renovate or Construct your home the way you have always wanted. Having your own home was never so easy

Easy Personal Loan

MCB Easy Personal Loan provides you with the financial advantage to do things you've always wanted to but never had the sufficient funds for. Take that much-needed holiday. Buy a car. Refurnish your house. Purchase a new TV. Finance a better education for your children.

MCB Master Card

Since the beginning of time, people have tried to find more convenient ways to pay, from gold to paper money and cheques. Today, money is moving away


from distinct hard currencies and towards universal payment products that transcend national borders, time zones, and, with the Internet, even physical space. Plastic or "virtual" money, credit, debit, and electronic cash products, inevitably will replace cash and cheques as the money of the future.

MCB Rupee Traveler's Cheques

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

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

3.2.Corporate Banking

Cash Management Services

MCB’s network of over 900 branches in Pakistan enables it to collect and disburse payments efficiently with its cash management services. This also enables it to offer you a choice of paper based or electronic fund transfer solutions including collection amounts, cross branch online transactions etc.

Working Capital Loans

Based on the customer’s specific needs, the Corporate Bank offers a number of different working capital financing facilities including Running Finance, Cash Finance, Export Refinance, Pre-shipment and Post- shipment etc. Tailor- made solutions are developed keeping in view the unique requirements of your business.

Term Loans

MCB offers Short to Medium Term Finance to meet capital expenditure and short term working capital requirements of our customers. The loans are structured on the basis of underlying project characteristics and cash flows of the business.


Trade Finance Services

Under Corporate Banking MCB offers trade finance services that include an entire range of import and export activities including issuing Letters of Credit

(L/Cs), purchasing export documents, providing guarantees and other support services.

3.3.Online Services

MCB ATM Services

With a solid foundation of over 50 years in Pakistan, with more than 750 automated branches, 269 online branches, over 222 MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM switch, MCB is positioned at the forefront of the banking industry in Pakistan. This success has been possible because of a never-ending drive to achieve higher levels of excellence, constantly striving to raise the level of performance.

MCB Mobile Banking

At the forefront of technological excellence, MCB proudly introduces MCB MOBILE BANKING. The convenience of accessing your account balance information and mini statements whenever you want or wherever you may need them, with comfort and peace of mind.

MCB Call Center

Keeping up with banking services can be tedious but not with MCB Bank, where phone service is at your fingertips. Just dial our Call Centre from the comfort of your home or office or wherever you happen to be. It offers basic banking services for your convenience, eliminating the need for you to make unwanted trips to your branch.

MCB Smart Card

MCB now brings you MCB SmartCard -a secure and convenient instrument of payment with unmatched functionalities. It provides 24-hour direct access to your bank account.

The convenience and flexibility of MCB SmartCard will help you live a smarter life. It not only helps you manage your expenses, but also eliminates undue


interest on your day to day credit card transactions. Your balance is always within your reach and you spend accordingly.

MCB Debit Card

Now MCB brings a secure, convenient and quick payment facility that enables you to do purchasing by using your existing MCB ATM / MCB Smart Card as a DEBIT CARD.

3.4.Virtual Banking

MCB Virtual Internet Banking offers you the convenience to manage and control your banking and finances – when you want to, where you want to. MCB’s Virtual Internet Banking facility is simple and secure. And its free of cost. With MCB Virtual Internet Banking you can access any of the banking services, 24 hours a day, 7 days a week and throughout the year.

MCB Virtual Internet Banking offers a wide range of online services which makes your banking accessible anytime and from anywhere.

Detailed Account Summary of all listed accounts.

Mini-statements of each of the listed accounts showing recent transaction history for that account(s).

Statement-by-Period of each of the listed accounts, based on the period specified.

Immediate or Scheduled Transfer of Funds between your own accounts, as well as to third-party accounts setup as beneficiaries, maintaining accounts with MCB.

Scheduling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers.

Payment of utility bills for registered Utility Companies.

Immediate or Scheduled Bills Payment.Scheduling of ‘One-Time’ as well as ‘Recurring’ bill payments.Option for ‘Full’ or ‘Partial’ payment based on the payment conditions specified by a particular Utility Company.


Bulk Salary Transfer for Corporate Customers, to facilitate them in paying salary to the corporate employees, who maintain accounts with MCB.

Bulk Funds Transfer for Corporate Customers.

Cheque Book Request for any of your listed accounts.

Payment/Transfer Alerts for reminding, in advance, prior to the processing of specified payments and transfers.

Personal Alerts for reminding of pre-specified events and occasions.

　

3.5. Islamic Banking

Deposit Schemes

For customers who are looking for a deposit opportunity where they can purse their funds and reap halal returns on it, we offer the following products:

Al-Makhraj Saving Account

Al-MakhrajIanat Account

Al-Makhraj Term Deposit

Fund Based Facilities

Ijarah Products

MCB’s Islamic Ijarah, analogous to the English term 'leasing’, is based on the ‘IjarahwaIqtina’ concept which means the sale of the asset to the lessee after the Ijarah has matured. Under this scheme, MCB will be the owner of the asset, and the customer (lessee) will be given the asset to use for a certain period of time in return for monthly rental payments. MCB will give a separate unilateral undertaking that it will offer to sell the asset to the customer (lessee) at the maturity of the Ijarah agreement at a price that may be equal to the security deposit amount, hence the term ‘WaIqtina’.


Types of Ijarah

o Car Ijarah

o Equipment Ijarah

Learning as a Student

1. Duties & Accomplishments

During my internship in MCB from 13 august 2012 to 24 september I worked in Remittances, Advances, Foreign Exchange and Customer Service Office department and I successfully completed all the task/duties that were assigned to me.

The duties that I performed and the thing I learned each day are given as follows:

Learned basic operations of remittance department

Learned how to make entries and vouchers for Incoming TT(Telegraphic Transfer)

Made vouchers and entries for Incoming TT

Observed other operations e.g. PO (Pay Order), DD (Demand Draft)

Learned bank charges for PO, DD, TT& MT

Made few Outgoing TT

Learned & Made Inter-Branch Credit Advices against the checks received from outer city branches

Learned about the payment against PO & DD received from other branches (usually the first activity in the remittance dept.)


Learned how to issue a PO

Made entries against the TT and MT in the Day Book

Made Incoming and Outgoing TT

Made Inter-Branch Credit Advices against the checks

Made Debit vouchers against the TT, PO & DD charges

Made Credit vouchers (contra) against the TT, PO & DD charges

Learned Incoming & Outgoing TT Entries in the Daily Voucher Record Sheet

Learned basics of Remittance Software System

Learned about different Stamps on the PO

Learned and made entries and vouchers against Incoming MT

Issued Credit Advices against DD

Learned PO and DD issuance in detail

Made the entries against Intercity Received Checks

Learned how to make cancellation entries in the Remittance Software System in case of any discrepancy

Learned how to cancel a DD

Issued Credit Advices against DD

Made Inter-Branch Credit Advices against the checks


Made entries in the Day Book

Learned about the entries against Monthly Installment for Car Financing

Learned about the different documents required for Credit Investigation

Learned about the documents required for Running Finance

Learned the Concepts of Demand and Cash Finance

Studied Export Refinancing from Manual

Made voucher for partial Adjustment of CF (Cash Finance)

Filled ‘’Credit Proposal cum Sanction Advice MCB Instant Financing, BBFS (Borrower Basic Fact Sheet) and Application for Finance for renewal of 3 cases of CF.

Studied Documentation/Collateral Guidelines

Made ‘’Disbursement Status-Leasing” Statement

Made Voucher Sheet

Studied ‘’Sanction Advice” & ‘’Approval for Financing”

Made Voucher and Voucher Sheet

Studied a Credit Report

Learned documentation requirement for each type of financing

Learned about L/C documents


Learned basics of Foreign Exchange operations

Learned about different L/C related terms and definitions

Learned about Payment against Foreign Currency Checks

Made vouchers for Foreign Currency Cash withdrawal

Made vouchers for FITT(Foreign Inward Telegraphic Transfer)

Learned diff. types of SWIFT messages

Studied few chapters of Foreign Exchange Manual

Learned about diff. types of L/Cs

Learned about diff. parties involved in L/C

Learned about Payment modes for L/C

Worked as CSO(Customer Service Officer)

Made Vouchers

Sorted Foreign Currency Signature Verification Cards

Opened new accounts

Issued check books

Received ‘Check Book Issuance Requisition’

Made CCs(Check Collection)

Made SUI GAS Bills Vouchers

Made Telephone Bills Vouchers


Made Electricity Bills Vouchers

On October 30, 2011

Business volume:　MCB　bank　limited　is　public　limited　company　listed　on　Karachi,　Islamabad　and　Lahore　stock　exchange　in　Pakistan　under　license　number　BCD(1)17_66　dated　8th December　1966　and　its　external　auditors　M/s　A.F.　Ferguson　&　Company.(Chartered　Accountants).　Name　of　Regulatory　Body　is　State　Bank　of　Pakistan　(Central　Bank).

Rupee　in　(000)

Profit before tax 26,253,075

Profit after taxation 16,873,175

Total assets 567,552,613

Total liabilities 488,348,404

Deposits 431,371,937

Investment 213,060,882


On October 30, 2011

Ratio analysis:

(All values in 000)

Liquidity ratios:

Liquidity　ratio　measures　firm’s　ability　to　meets　its　current　obligations.

(i)Current ratio=current assets /current liabilities

Year 2010 Year 2009 Year 2008

438,055,296/473,754,539=0.924 383,724,636/425,221,031=0.902329,655,815/372,207,358=0.885

Working: Calculation　of　current　assets:　(rupee　in　thousand)

Items Year 2010 Year 2009 Year 2008

Cash and balances with treasury banks

45,407,183 38,774,871 39,631,219

Balances with other banks

1,478,569 6,009,993 4,106,526

Lending to financial institutions

4,401,781 30,00,000 4,100,079

Investment 195,651,545 147,434,703 82,099,385

advances 177,109,599 176,203,572 186,534,891

Other assets 14,006,626 12,301,497 13,183,715


TOTAL 438,055,296 383,724,636 329,655,815

Calculations of current liabilities :(　rupee　in　000)

Items Year 2010 Year 2009 Year 2008

Bill payable 10,265,537 8,201,090 10,551,468

Borrowings 24,601,822 43,612,813 21,613,465

Deposit and other accounts

426,476,908 361,695,513 322,785,631

Other liabilities 12,410,272 11,711,615 17,257,794

Total 473,754,539 425,221,031 372,207,358

I calculated　all　these　values　from　maturities　table　of　assets　and　liabilities　and　added　those　values　that　are　current　(fall　in　one　year).

　

Bibliography

The major sources of information and help were:

Websites

http://www.mcb.com.pk

　


mcb bank ltd

Documents

automated branches

internship reportmcb

mcb atms

foreign exchange

customer focus062

course of internship

corporate information074

corporate banking143