Introduction

Financial statements provide small business owners with the basic tools for determining how
well their operations perform at all times. Many entrepreneurs do not realize that financial
statements have a value that goes beyond their use as supporting documents to loan
applications and tax returns.

These statements are concise reports designed to summarize financial activities for specific
periods. Owners and managers can use financial statement analysis to evaluate the past and
current financial condition of their business, diagnose any existing financial problems, and
forecast future trends in the firms financial position.
Evaluation pinpoints, in financial terms, where the firm has been and where it is today.
Diagnosis determines the causes of the financial problems that statement analysis uncovers
and suggests solutions for them.

Forecasts are valuable in statement analysis for two reasons: You can prepare forecasts that
assume that the basic financial facts about a company will remain the same for a specified
period in the future. These forecasts will illustrate where you're likely to stand if the status
quo is maintained. Or, you can gain insights into the impact of certain business decisions by
calculating the answers to what if questions. When you test the consequences of changes
youre contemplating, or that may occur because of changing market conditions or customer
tastes, for example, you achieve a greater understanding about the financial interrelationships
at work in a business.

The two key reports for all sizes and categories of business are the Balance Sheet and the
Income Statement. The Balance Sheet is an itemized statement that lists the total assets and
the total liabilities of a business, and gives its net worth on a certain date (such as the end of a
month, quarter, or year). The Income Statement records revenue versus expenses for a given
period of time.

Regular preparation and analysis of financial statement information helps business managers
and owners detect the problems that experts continue to see as the chief causes of small
business failure -- such as high, operating expenses, sluggish sales, poor cash management,
excessive fixed assets, and inventory mismanagement. By comparing statements from

different periods, you can more easily spot trends and make necessary management decisions
and budget revisions before small problems become large ones.
The Balance Sheet and Income Statement formats are designed as general models and are not
complete for every business operation. Computation of income for financial accounting
purposes is done according to the rules of Generally Accepted Accounting Principles (known
as GAAP). Be aware that income and losses computed using GAAP rules will not
necessarily be the same as those calculated to comply with the Internal Revenue Code.
Definitions of 'Financial Statements'
Records that outline the financial activities of a business, an individual or any other entity.
Financial statements are meant to present the financial information of the entity in question as
clearly and concisely as possible for both the entity and for readers.
Financial statements are a collection of reports about an organization's financial results and
condition.
What is Financial statements analysis?
The process of reviewing and evaluating a company's financial statements (such as the
balance sheet or profit and loss statement), thereby gaining an understanding of the financial
health of the company and enabling more effective decision making. Financial statements
record financial data; however, this information must be evaluated through financial
statement analysis to become more useful to investors, shareholders, managers and other
interested parties.
Financial statement analysis is an evaluative method of determining the past, current and
projected performance of a company. Several techniques are commonly used as part of
financial statement analysis including horizontal analysis, which compares two or more years
of financial data in both dollar and percentage form; vertical analysis, where each category of
accounts on the balance sheet is shown as a percentage of the total account; and ratio
analysis, which calculates statistical relationships between data.



Importance of Financial Statements

Many business experts and accountants recommend that you prepare financial statements
monthly; quarterly at a minimum. Some companies prepare them at least once a week,
sometimes daily, to stay abreast of results. The more frequently a company prepares their
financial statements, the sooner timely decisions can be made.

There are four types of financial statements; compiled, reviewed, audited, and unaudited:
A compiled statement contains financial data from a company reported in a financial
statement format by a certified public accountant (CPA); it does not include any
analysis of the statement.
The reviewed statement includes an analysis of the statement by a CPA in which
unusual items or trends in the financial statement are explained.
An audited statement (also prepared by a CPA) contains any analysis which includes
confirmation with outside parties, physical inspection and observation, and
transactions traced to supporting documents. An audited statement offers the highest
level of accuracy.
An unaudited statement applies to a financial statement prepared by the company
which has not been compiled, reviewed, or audited by an outside CPA.

Small business owners must be aware that they may be required to submit financial
statements in nine circumstances:

1. Virtually all suppliers of capital, such as banks, finance companies, and venture
capitalists, require these reports with each loan request, regardless of previous
successful loan history. Banks may need CPA compiled or reviewed statements and,
in some cases, audited statements. They may not accept company or individually
prepared financial statements, unless they are backed by personal or corporate
income. Typically, as a condition of granting a loan, a creditor may request periodic
financial statements in order to monitor the success of the business and spot any
possible repayment problems.

2. Information from financial statements is necessary to prepare federal and state income
tax returns. Statements themselves need not be filed.


3. Prospective buyers of a business will ask to inspect financial statements and the
financial/operational trends they reveal before they will negotiate a sale price and
commit to the purchase.

4. In the event that claims for losses are submitted to insurance companies, accounting
records (particularly the Balance Sheet) are necessary to substantiate the original
value of fixed assets.

5. If business disputes develop, financial statements may be valuable to prove the nature
and extent of any loss. Should litigation occur, lack of such statements may hamper
preparation of the case.

6. Whenever an audit is required--for example by owners or creditors--four statements
must be prepared: a Balance Sheet (or Statement of Financial Position),
Reconcilement of Equity (or Statement of Stockholders Equity for corporations),
Income Statement (or Statement of Earnings), and Statement of Cash Flows.

7. A number of states require corporations to furnish shareholders with annual
statements. Certain corporations, whose stock is closely held, that is, owned by a
small number of shareholders, are exempt.

8. In instances where the sale of stock or other securities must be approved by a state
corporation or securities agency, the agency usually requires financial statements.

9. The Securities and Exchange Commission (SEC) requires most publicly held
corporations (such as those whose stock is traded on public exchanges) to file annual
and interim quarterly financial reports.

Collecting and Managing Data
The language and principles of modern accounting have evolved from the centuries-old need
for accurate record keeping. Today, the Financial Accounting Standards Board (FASB), the
SEC, and the American Institute of Certified Public Accountants (AICPA) continue to refine
and revise concepts and practices. Regardless of how complex a financial statement may
seem, it is based on logic and practicality.


Collecting information for financial statements begins with the daily arithmetic of business
and follows a continuing process called the audit trail. First, figures from original documents
such as invoices are journalized, or recorded, daily in the book of original entry, which is
called the journal. Today, these journals are maintained in electronic format. Items that are
not normally recorded in the daily operations, such as those for depreciation and
amortization, are called end-of-the-period adjustments and are calculated and journalized
periodically. All of these detailed transactions are then posted to the general ledger.
Amounts are balanced (credits must equal debits) and then used to prepare financial
statements. In most computerized accounting systems the balancing is maintained in real-
time, behind the scenes, allowing financial statements to be prepared at any time.

In a number of small businesses, bookkeepers or owners themselves prepare these reports.
Frequently, they use textbook samples as models or standard bank forms provided by loan
officers. But a growing number of small operations retain accountants on at least an
occasional basis. Accountants typically tailor statements to a specific enterprise, so statement
formats vary somewhat.

Micro businesses can use a very simple and basic system to collect the information that will
ultimately be used to construct the financial statements. The business owner should put all
receipts, cancelled checks, and credit card slips into a large envelope. Have one envelope for
each month. The owner can then deliver these receipts to his or her bookkeeper, who will
construct the financial statements. The envelopes can then be filed away. For business travel
using your personal vehicle, keep track of the odometer reading before the trip begins, and at
the conclusion of the trip. When purchasing meals for customers, note on the receipt the
name of the customer and the reason for the meeting. The Internal Revenue Service specifies
the length of time different types of business records must be kept.

As the business grows, owners begin to find time to become more sophisticated and may
adopt computer software to replace the bookkeeper.

Computer technology plays a major role in small business today. It significantly cuts the
time it takes to manage a business finances and, in turn, might produce higher sales and
better profit margins because of improvements in analysis and information.

A lot of the time, tedium, and human error in financial accounting has disappeared as
computers become more powerful and affordable to smaller companies. Software that

automates the accounting function, records the audit trail, and feeds financial statements and
other management reports is readily available. Accountants use computers and may have the
knowledge to assist their small business clients with a conversion to computerized
accounting. Some software firms, as well as SBDCs, now offer seminars and workshops
designed to help small business owners learn all of the functions their programs can perform.
Popular accounting software packages include QuickBooks, QuickBooks Pro, Quicken, and
Peachtree, although standard office software such as Microsoft Excel can be used for basic
accounting.

Computers simplify and streamline financial analysis. For instance, a what if forecast with
just one set of simple variables may take an entire day or longer to figure manually. Today,
with an electronic spreadsheet, complex calculations with many variables can be produced
quickly to test the effects of certain decisions.

The potential benefits of accounting software include the following:
Produce more accurate accounting information faster.
Improve timeliness and accuracy of financial status reports.
Identify potential business or budget problems sooner.
Implement better management controls.
Reduce labor costs and outside consultants fees.
Speed collection of receivables.
Reduce interest expense and improve cash flow.
Reduce lost sales (as result of fewer stock outs).
Reduce inventory (and inventory carrying costs).
Realize higher return on investment.

Regardless of whether the entrepreneur chooses to manually maintain his or her bookkeeping
or implements accounting software, it is still wise to consult with an accountant for advice on
our ever changing tax laws.




The Income Statement

Business revenue, expenses, and the resulting profit or loss over a given period of time are
detailed in the Income Statement. It is also called the Statement of Income and Expense,
Statement of Earnings, or the Profit and Loss Statement. This report reflects the companys
chosen fiscal year. For tax purposes, the owner may need to prepare a second Income
Statement based on the calendar year, if the fiscal year is different. Check with a tax advisor
about Internal Revenue Code requirements.

The following terms are commonly found on an income statement:
1. Heading
The first facts to appear on any statement are the legal name of the business, the type
of statement, and the period of time reported, e.g., month, quarter, or year.

2. Column Headings
If you include both current month and year-to-date columns on the Income Statement
you can review trends from accounting period to accounting period and compare
previous similar periods. Also, it is often helpful to show the dollar amounts as
percentages of net sales. This helps you analyze performance and compare your
company to similar businesses. Remember, you can choose any period of time to
analyze.

3. Revenue
All income flowing into a business for services rendered or goods sold comes under
this category. In addition to actual cash transactions, the revenue figure reflects
amounts due from customers on accounts receivable as well as equivalent cash values
for merchandise or other tangible items used as payment.

4. Less Sales Returns and Allowances
The value of returned merchandise and allowances made for defective goods must be
subtracted from gross sales to determine net sales.

5. Cost of Goods Sold

Cost of goods sold equals the amount of goods available for sale minus the inventory
remaining at the end of the accounting period. (Total goods available =beginning
inventory + cost of purchasing or manufacturing new merchandise during the
accounting period). Cost of goods sold includes all costs directly related to the
production of the product invoiced during the accounting period. Service businesses
generally have no cost of goods sold.

6. Gross Profit
Also called gross margin, this figure is the difference between the cost of goods sold
and net sales (Net Sales - Cost of Goods Sold =Gross Profit). It is the businesss
profit before operating expenses and taxes.

7. Operating Expenses
The expenses of conducting business operations generally fall into two broad
categories: selling and general administrative. Manufacturers normally include some
operating expenses, such as machinery and labor depreciation, as part of cost of sales
(Item 5).

8. Total (Net) Operating Income
Total operating expenses are subtracted from gross profit to show what the business
earned before financial revenue and expenses, taxes, and extraordinary items.

9. Other Revenue and Expenses
Income and expenses that are not generated by the usual operations of a business and
that are not considered extraordinary (see Item 11) are recorded here. Typically
included in this category are financial revenue, such as interest from investments, and
financial expenses, such as interest on borrowed capital. (Loan principal is not
considered an expense. It is a liability and is listed as such on the Balance Sheet).

10. Pretax Income
To derive this figure, also called pretax profit, total financial revenue (minus total
financial expenses) is added to total operating income. Taxes are subtracted from
pretax income if the business is a C corporation. Proprietorships, limited liability
companies, and S corporations do not pay business taxes on income; the income is
reported on the owners personal returns. (For tax planning purposes, accountants
estimate the annual taxes due, then project the monthly portion.)

11. Extraordinary Gain [Loss] Net of Income Tax [Benefit]
Within the framework of an individual business type and location, any occurrence that
is highly unusual in nature, could not be foreseen, is not expected to recur, and that
generates income or causes a loss is considered an extraordinary item. The
extraordinary gain or loss is shown after calculating tax liability (or tax benefit, as
would be the case with an extraordinary loss) on the Income Statement. Examples: A
court award to a business not previously involved in lawsuits would be an
extraordinary gain; a major casualty would be an extraordinary loss.

12. Net Income
Also called net profit, this figure represents the sum of all expenses (including taxes,
if applicable). Net income or profit is commonly referred to as the bottom line.

13. Earnings per Share
Total outstanding common stock (the number of shares currently owned by
stockholders) is divided into net income to derive this figure. It is not applicable to
proprietorships and limited liability companies, but must be shown on the Income
Statements of all publicly held corporations.
The Balance Sheet

A Balance Sheet records the total assets, liabilities, and equity (net worth) of a business as of
a specific day. This statement is divided to provide two views of the same business: what
resources the business owns, and the creditor and owner investments that supplied these
resources. These divisions are generally set up in the two-column account form, with assets
on the left, liabilities and equity on the right. An alternative -- the one column statement
form or report form -- lists assets on top, liabilities and equity below.

The backbone of the Balance Sheet is the fundamental accounting equation: Assets =
Liabilities +Equity (transposed: Assets - Liabilities =Equity. This equation is based on the
accounting principle that every business transaction, such as selling merchandise or
borrowing capital, has a dual effect. Any increase or decrease on one side of the equation
always requires a corresponding change to the other side of the equation. If the sides dont
balance, faulty arithmetic or inaccurate or incomplete records may be the cause.

The following is an example of the principle of balance: If a business owner purchases
$2,000 worth of new merchandise on credit, assets are increased by the value of new

inventory. Liabilities are increased $2,000 at the same time because the company has an
accounts payable (liability) obligation to the suppliers of the merchandise.

To further illustrate the principle: If the same business had $2,000 cash and used it to buy
new merchandise, assets would be increased by the inventory value, but decreased by the
cash outlay. Thus, total assets would be unchanged, and liabilities and equity would not be
affected.

The following terms are commonly found on a balance sheet:

1. Heading
The legal name of the business, the type of statement, and the day, month, and year
must be shown at the top of the report.

2. Assets
Anything of value that is owned or legally due the business is included under this
heading. Total assets include all net realizableand net book (also called net carrying)
values. Net realizable and net book values are amounts derived by subtracting from
the acquisition price of assets any estimated allowances for doubtful accounts,
depreciation, and amortization, such as amortization of a premium during the term of
an insurance policy. Appreciated values are not usually considered on Balance
Sheets, except, for example, when you are recording stock portfolio values.

3. Current Assets
Cash and resources that can be converted into cash within 12 months of the date of the
Balance Sheet (or during one established cycle of operations) are considered current.
Besides cash (money on hand and demand deposits in the bank, such as regular
savings accounts and checking accounts), these resources include the items listed
below. They are ranked in a generally accepted order of decreasing liquidity--that is,
the ease with which the items could be converted to cash.

Accounts Receivable: The amounts due from customers in payment for
merchandise or services.
Inventory: Includes raw materials on hand, work in process, and all finished
goods either manufactured or purchased for resale. Inventory value is based

on unit cost and is calculated by any of several methods (see Inventory
Valuation below).
Temporary Investments: Interest- yielding or dividend-yielding holdings
expected to be converted into cash within a year. Also called marketable
securities or short-term investments, they include certificates of deposit, stocks
and bonds, and time deposit savings accounts. According to accounting
principles, they must be listed on the Balance Sheet at either their original cost
or their market value, whichever is less.
Prepaid Expenses: Goods, benefits, or services a business pays for in advance
of use. Examples are insurance protection, floor space and office supplies.

4. Long-Term Investments
Also called long-term assets, these resources are holdings that the business intends to
keep for a year or longer and that typically yield interest or dividends. Included are
stocks, bonds and savings accounts earmarked for special purposes.

5. Fixed Assets
Fixed assets, frequently called plant and equipment, are the resources a business owns
or acquires for use in operations and does not intend to resell. Regardless of current
market value, land is listed at its original purchase price, with no allowance for
appreciation or depreciation. Other fixed assets are listed at cost, minus depreciation.
Fixed assets may be leased rather than owned. Depending on the leasing
arrangement, both the value and liability of the leased property may need to be listed
on the Balance Sheet.

6. Other Assets
Resources not listed with any of the above assets are grouped here. Examples include
tangibles, such as outdated equipment which can be sold to the scrap yard, and
intangibles, such as goodwill, trademarks and patents.

7. Liabilities
This term covers all monetary obligations of a business and all claims creditors have
on its assets.





8. Current Liabilities
All debts and obligations payable within 12 months or within one cycle of operations
are detailed here. Typically, they include the following, which generally are listed in
the order due.

Accounts Payable: Amounts owed to suppliers for goods and service
purchased in connection with business operations.
Short-Term Debt: The balances of principal due to pay off short-term debt
for borrowed funds.
Current Portion of Long-Term Debt: Current amount due of total balance
on notes whose terms exceed 12 months.
Interest Payable: Any accrued amounts due for use of both short-and long-
term borrowed capital and credit extended to the business.
Taxes Payable: Amounts estimated by an accountant to have been incurred
during the accounting period. For accounting purposes, this total may differ
from the actual tax total required by the Internal Revenue Codes, since taxes
payable are based on accounting income and not taxable income. (Note:
Income taxes are business obligations for corporations; proprietorships and
partnerships do not pay income taxes; the income is reported on the owners
personal returns.)
Accrued Payroll: Salaries and wages currently owed but not yet paid.

9. Long Term Liabilities
Long-term liabilities are notes, payments, or mortgage payments due over a period
exceeding 12 months or one cycle of operations. They are listed by outstanding
balance (minus the Current Portion due).

10. Equity
Also called net worth, equity is the claim of the owner(s) on the assets of the business.
In a proprietorship or limited liability company, equity is each owners original
investment, plus any earnings after withdrawals.

In a corporation, the owners are the shareholders--those who have invested capital
(cash or other assets) in exchange for shares of stock. The corporations equity is the

sum of contributions plus earnings retained after paying dividends. It is detailed as
follows:

Capital Stock: The total amount invested in the business in exchange for
shares of stock at value up to the par value. Par is the per-share price assigned
to the original issue of stock, regardless of subsequent selling prices.
Capital Paid-In in Excess of Par: The amount in excess of par value that a
business receives from shares of stock sold at a value above par.
Treasury Stock: When a company buys back its own stock or when a closely
held business buys out other owners. The value of the stock is recorded here
and ordinarily does not receive dividends.
Retained Earnings: The total accumulated net income minus the total
accumulated dividends declared since the corporations founding. These
earnings are part of the total equity for any business. However, the figure is
usually listed separately from owner investments only on corporate Balance
Sheets which are done for the benefit of shareholders.

11. Total Liabilities and Equity
The sum of these two amounts must always equal Total Assets.

Statement of Cash Flows

The third main document of financial reporting is the Statement of Cash Flows. Many small
business owners and managers find that the cash flow statement is perhaps the most useful of
all the financial statements for planning purposes. Cash is the life blood of a small business
if the business runs out of cash chances are good that the business is out of business. This is
because most small businesses do not have the ability to borrow money as easily as larger
business can.

The statement can be prepared frequently (monthly, quarterly) and is a valuable tool that
summarizes the relationship between the Balance Sheet and the Income Statement and traces.

In financial accounting, a cash flow statement, also known as statement of cash flows or funds
flow statement, is a financial statement that shows how changes in balance sheet accounts and
income affect cash and cash equivalents, and breaks the analysis down to operating,
investing, and financing activities. Essentially, the cash flow statement is concerned with the

flow of cash in and cash out of the business. The statement captures both the current
operating results and the accompanying changes in the balance sheet. As an analytical tool,
the statement of cash flows is useful in determining the short-term viability of a company,
particularly its ability to pay bills.

By understanding the amounts and causes of changes in cash balances, the entrepreneur can
realistically budget for continued business operations and growth. For example, the
Statement of Cash Flows helps answer such questions as: Will present working capital allow
the business to acquire new equipment, or will financing be necessary?

Many small businesses may not need to prepare the Statement of Cash Flows. However,
according to GAAP, it should be prepared whenever an operations financial statements are
compiled, reviewed, or audited by a CPA. In addition, creditors, investors, new owners or
partners, and the Internal Revenue Service may require the information it provides. This
statement can usually be produced by most accounting software applications.
Reconciliation of Equity

This statement reconciles the equity shown on the current Balance Sheet. For corporations
this statement is referred to as the Statement of Retained Earnings or Statement of
Shareholder Equity. For limited liability companies it is referred to as the Statement of
Members Equity, and for Proprietorships as the Statement of Owners Equity. It records
equity at the beginning of the accounting period and details additions to, or subtractions from,
this amount made during the period. Additions and subtractions typically are net income or
loss and owner contributions and/or deductions.

Figures used to compile this statement are derived from previous and current Balance Sheets
and from the current Income Statement.


Financial Ratios
Financial ratios are useful indicators of a firm's performance and financial situation. Most
ratios can be calculated from information provided by the financial statements. Financial
ratios can be used to analyze trends and to compare the firm's financials to those of other
firms. In some cases, ratio analysis can predict future bankruptcy.
Financial ratios can be classified according to the information they provide. The following
types of ratios frequently are used:
Liquidity ratios
Asset turnover ratios
Financial leverage ratios
Profitability ratios
Dividend policy ratios
Liquidity Ratios
Liquidity ratios provide information about a firm's ability to meet its short-term financial
obligations. They are of particular interest to those extending short-term credit to the firm.
Two frequently-used liquidity ratios are the current ratio (or working capital ratio) and the
quick ratio.
The current ratio is the ratio of current assets to current liabilities:
Current Ratio =
Current Assets

Current Liabilities
Short-term creditors prefer a high current ratio since it reduces their risk. Shareholders may
prefer a lower current ratio so that more of the firm's assets are working to grow the business.
Typical values for the current ratio vary by firm and industry. For example, firms in cyclical
industries may maintain a higher current ratio in order to remain solvent during downturns.
One drawback of the current ratio is that inventory may include many items that are difficult
to liquidate quickly and that have uncertain liquidation values. The quick ratio is an

alternative measure of liquidity that does not include inventory in the current assets. The
quick ratio is defined as follows:
Quick Ratio =
Current Assets - Inventory

Current Liabilities
The current assets used in the quick ratio are cash, accounts receivable, and notes receivable.
These assets essentially are current assets less inventory. The quick ratio often is referred to
as the acid test.
Finally, the cash ratio is the most conservative liquidity ratio. It excludes all current assets
except the most liquid: cash and cash equivalents. The cash ratio is defined as follows:
Cash Ratio =
Cash + Marketable Securities

Current Liabilities
The cash ratio is an indication of the firm's ability to pay off its current liabilities if for some
reason immediate payment were demanded.
Asset Turnover Ratios
Asset turnover ratios indicate of how efficiently the firm utilizes its assets. They sometimes
are referred to as efficiency ratios, asset utilization ratios, or asset management ratios. Two
commonly used asset turnover ratios are receivables turnover and inventory turnover.
Receivables turnover is an indication of how quickly the firm collects its accounts receivables
and is defined as follows:
Receivables Turnover =
Annual Credit Sales

Accounts Receivable
The receivables turnover often is reported in terms of the number of days that credit sales
remain in accounts receivable before they are collected. This number is known as the
collection period. It is the accounts receivable balance divided by the average daily credit
sales, calculated as follows:


Average Collection Period =
Accounts Receivable

Annual Credit Sales / 365
The collection period also can be written as:
Average Collection Period =
365

Receivables Turnover
Another major asset turnover ratio is inventory turnover. It is the cost of goods sold in a time
period divided by the average inventory level during that period:
Inventory Turnover =
Cost of Goods Sold

Average Inventory
The inventory turnover often is reported as the inventory period, which is the number of days
worth of inventory on hand, calculated by dividing the inventory by the average daily cost of
goods sold:
Inventory Period =
Average Inventory

Annual Cost of Goods Sold / 365
The inventory period also can be written as:
Inventory Period =
365

Inventory Turnover
Other asset turnover ratios include fixed asset turnover and total asset turnover.
Financial Leverage Ratios
Financial leverage ratios provide an indication of the long-term solvency of the firm. Unlike
liquidity ratios that are concerned with short-term assets and liabilities, financial leverage
ratios measure the extent to which the firm is using long term debt.
The debt ratio is defined as total debt divided by total assets:
Debt Ratio =
Total Debt

Total Assets

The debt-to-equity ratio is total debt divided by total equity:
Debt-to-Equity Ratio =
Total Debt

Total Equity
Debt ratios depend on the classification of long-term leases and on the classification of some
items as long-term debt or equity.
The times interest earned ratio indicates how well the firm's earnings can cover the interest
payments on its debt. This ratio also is known as the interest coverage and is calculated as
follows:
Interest Coverage =
EBIT

Interest Charges
where EBIT = Earnings Before Interest and Taxes
Profitability Ratios
Profitability ratios offer several different measures of the success of the firm at generating
profits.
The gross profit margin is a measure of the gross profit earned on sales. The gross profit
margin considers the firm's cost of goods sold, but does not include other costs. It is defined
as follows:
Gross Profit Margin =
Sales - Cost of Goods Sold

Sales
Return on assets is a measure of how effectively the firm's assets are being used to generate
profits. It is defined as:
Return on Assets =
Net Income

Total Assets
Return on equity is the bottom line measure for the shareholders, measuring the profits earned
for each dollar invested in the firm's stock. Return on equity is defined as follows:

Return on Equity =
Net Income

Shareholder Equity
Dividend Policy Ratios
Dividend policy ratios provide insight into the dividend policy of the firm and the prospects
for future growth. Two commonly used ratios are the dividend yield and payout ratio.
The dividend yield is defined as follows:
Dividend Yield =
Dividends Per Share

Share Price
A high dividend yield does not necessarily translate into a high future rate of return. It is
important to consider the prospects for continuing and increasing the dividend in the future.
The dividend payout ratio is helpful in this regard, and is defined as follows:
Payout Ratio =
Dividends Per Share

Earnings Per Share
Use and Limitations of Financial Ratios
Attention should be given to the following issues when using financial ratios:
A reference point is needed. To be meaningful, most ratios must be compared to
historical values of the same firm, the firm's forecasts, or ratios of similar firms.
Most ratios by themselves are not highly meaningful. They should be viewed as
indicators, with several of them combined to paint a picture of the firm's situation.
Year-end values may not be representative. Certain account balances that are used to
calculate ratios may increase or decrease at the end of the accounting period because
of seasonal factors. Such changes may distort the value of the ratio. Average values
should be used when they are available.
Ratios are subject to the limitations of accounting methods. Different accounting
choices may result in significantly different ratio values.




Key Terms and Concepts

The following are brief descriptions and explanations of terms and concepts related to
financial statements. (Items defined elsewhere in the text are not listed here.)

Accrual Basis of Accounting

By this long-established and widely used principle, revenue and expenses are recognized
when a service is performed or goods are delivered, regardless of when payment is received
or made. This method allows what accountants call the matching of revenues and associated
expenses.

Revenue example - If a store sells $500 worth of radios in a day, $500 of revenue is earned
and entered in the books even though the proceeds of the sale may not be collected for a
month or longer.

Expense example - If the store clerk earns a $10 commission on the day of the radio sale, this
expense to the business is recorded that day even though it may not actually be paid until the
next payroll day.

Receivables Aging

This report lists a customers name, credit limit, total balance, and any amounts 30, 60, 90 or
more than 90 days past due. By preparing this report once a month, an owner can spot trends
and plan next months collection efforts.

Amortization

The gradual reduction of debt by means of equal periodic payments sufficient to meet current
interest and liquidate the debt at maturity; also, the process of writing off against expenses the
cost of a prepaid, intangible asset over a fixed period.

Appreciation

Any increase from the acquisition price of a fixed asset or investment to current appraised
market value. However, for financial statement purposes, appreciation is not considered
because of four accounting concepts:


(1) The objectivity principle - which would necessitate an appraisal of each assets market
value per accounting period--a costly and highly variable endeavor.
(2) the continuity assumption - that fixed assets are acquired for continuing business
operations and not for resale
(3) the principle of conservatism - which states that, given a choice of values, an accountant
always chooses the more conservative
(4) Those financial statements reflect the original costs.

Cash Basis of Accounting

As its name implies, this method recognizes revenue and expenses only when cash payment
is actually received or made. Because it does not properly match income and expenses (see
Accrual Basis of Accounting in this section), the cash basis does not always provide an
accurate picture of profitability and is less commonly used than the accrual basis. The
Internal Revenue Code places certain restrictions on the use of cash basis accounting for
computing income tax liability. For further information, contact a tax advisor.

Cash Flow

Cash flows fall into two categories: inflows and outflows. Inflows include revenues from
sales, proceeds from loans, and capital injections by owners. Outflows include costs of sales,
operating expenses, income taxes, repayment of loans and distribution to owners. Cash is
used to purchase materials, to pay for overhead expenses, to pay labor, and to market
merchandise.

By studying a businesss individual cash flow cycle, the owner can determine the working
cash needs of the company. These will include day-to-day needs, as well as possible
increases in the costs for materials, labor, and overhead. By being aware of these cash needs,
the owner can achieve a balance between cash use and profits.

Common-Size
A term applied to financial statements that use 100 percent of one category as the basis for
determining the proportion that other statement items represent. Net sales is used as the basis
figure for Income Statements, total assets for Balance Sheets. Since the total always sums to
100 percent, the statements prepared in this manner are referred to as common-size. This
form of comparative statement enables the analyst to see at a glance the Balance Sheet trends

and the proportionate changes taking place in the individual accounts form one statement
period to the next.

Depreciation

A universal accounting assumption holds that all fixed assets--with the exception of land--
deteriorate, wear out, or become obsolete.

This process represents a decline in value that is called depreciation. It is calculated by
apportioning an assets original acquisition price, minus any expected salvage value, over the
assets expected years of useful life. (For accounting purposes, land is always valued at its
original purchase price.) On the Income Statement, depreciation incurred during the
accounting period is detailed as an expense. On the Balance Sheet, depreciation is reflected
by an assets listed net book or net carrying value (cost less accumulated depreciation).

The simplest and most common means of calculating depreciation is by the straight-line
method. Using it, accountants divide the estimated useful life of an asset into its purchase
price minus any applicable salvage value. Example: An $11,000 machine has a $1,000
salvage value and an expected useful life of 10 years. Annual depreciation =($11,000 -
$1,000) 10 =$1,000. In five years, straight-line accumulated depreciation would be
$5,000.

There are other common calculation methods that allow more accelerated depreciation of
fixed assets. These methods distribute the original acquisition cost more heavily during an
assets early years. Accountants can show owners the various means to determine this
depreciation, which is more complex than straight-line.

Depreciation computed according to the GAAP rules is not necessarily the same as that
computed to comply with the Internal Revenue Code. For further information, consult a tax
advisor.

Inventory Valuation
Because inventory units are usually purchased at varying prices, methods have been
established to calculate the cost of goods sold and the value of remaining inventory. Three
widely used methods are:


Average Cost - The total number of units of goods available is divided into the total
manufacturing or acquisition cost (including freight charges to get the raw materials to the
manufacturer's or supplier's location.)

FIFO - An acronym for first in, first out. This method is based on the assumption that the
inventory acquired first is sold first. Consequently, the ending (remaining) inventory consists
of the most recently purchased items. An advantage of this method of valuation is that it
reflects recent costs of inventory on the Balance Sheet.

LIFO - An acronym for last in, first out. This method of valuation assumes that those items
of inventory most recently acquired are sold before the older acquisitions. As a result, the
ending inventory figure consists of the older purchases. Proponents of this valuation method
argue that by representing current prices in the cost of goods sold, matching is more
accurately accomplished.

Example: The first item in costs $100, the second costs $300, and the third costs $500. Two
of these units are sold.

Calculated by average cost: $100 +$300 +$500 =$900 3 =$300. Therefore, the cost of
goods sold =$600 (2 units x $300); the remaining inventory is valued at $300.

Calculated by FIFO, the cost of goods sold is $100 +$300 =$400; the remaining inventory
is valued at $500.

Calculated by LIFO, the cost of goods sold is $500 +$300 =$800; the remaining inventory is
valued at $100.

Leverage
The concept of borrowing heavily for financing needs in order to minimize the capital
investment and maximize the return on investment.

Liquidate
To convert non-cash assets into cash; also, to close the business by selling all assets and
paying all debts.

Liquidity
The ease with which items can be converted into cash without loss.


Negative Cash Flow
Cash receipts that are insufficient to meet ongoing costs and other cash needs, such as
necessary investment in fixed assets or expanded inventory.

Working Capital
The difference between total current assets and total current liabilities; the resulting pool of
resources readily available to maintain normal business operations.

Users of Financial Statements
Financial statements are intended to be understandable by readers who have "a reasonable
knowledge of business and economic activities and accounting and who are willing to study
the information diligently."
There are different kinds of users of financial statements. The users of financial statements
may be inside or outside the business.
The users of financial statements use financial statements for a large variety of business
purposes and their ability to understand and analyze financial statements helps them to
succeed in the business world.
Classification of Users of Financial Statements
The financial statements are used by different categories of people for different purposes. The
various users of financial statements are classified and detailed as follows:

1. Internal Users:
The internal users of financial statements are individuals who have direct bearing with the
organization. They may include:


Managers and Owners: For the smooth operation of the organization, the managers and
owners need the financial reports essential to make business decisions. So as to provide a
more comprehensive view of the financial position of an organization, financial analysis is
performed with the information supplied in the financial statements. The financial statement
is used to formulate contractual terms between the company and other organizations.
A variable of the financial statement like the current debt to equity ratio is important in
deciding the amount of long term capital that would be required to be raised. The financial

statements of other companies can also provide investment solutions to different companies.
Sometimes it becomes difficult to decide the right field in which financial resources may be
channelized. In such situations the financial statements of other companies provide the
appropriate guideline.

Employees: The financial reports or the financial statements are of immense use to the
employees of the company for making collective bargaining agreements. Such statements are
used for discussing matters of promotion, rankings and salary hike.
2. External Users:
The external users comprise of:

Institutional Investors: The external users of financial statements are basically the investors
who use the financial statements to assess the financial strength of a company. This would
help them to make logical investment decisions.

Financial Institutions: The users of financial statements are also the different financial
institutions like banks and other lending institutions who decide whether to help the company
with working capital or to issue debt security to it.

Government: The financial statements of different companies are also used by the
government to analyze whether the tax paid by them is accurate and is in line with their
financial strength.

Vendors: The vendors who extend credit to a business require financial statements to assess
the creditworthiness of the business.

General Mass and Media: The common people as well as media also make part of the users
of financial statements.





Muslim
Commercial Bank






Bank for Life

Life is a platform
About our emotions, aspirations,
Expectations, needs and desires.
About winning and losing.
About love and affection.
About passion and compassion.
Its about rising and falling...and rising again!

Life as we know it
More than a life form, life is Us - You and MCB! That is why MCB Bank is your Bank for
Life!





Vision Statement
To be the leading financial services provider,
partnering with our customers for a more prosperous
and secure future.




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.



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.
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.
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.
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.


Corporate Social Responsibility
MCB Bank holds an approved Corporate Social Responsibility Policy by the Board that
shows Banks commitment to serve the community.
The Bank is always active in carrying out community services under its different programs
aimed at nurturing the various facets of life and to foster the growth of communities in which
it operates. It has so far accomplished numerous projects and services in the areas of
education, health, environment, sports, social awareness, promotion of culture and welfare of
charitable organizations keeping in view the greater interest of its employees, customers and
beloved country as a whole.
Corporate Social Responsibility (CSR) at MCB Bank has continuously geared up its
capabilities in order to act as an adequate point of convergence for the design and
implementation of specific initiatives intended to further its engagement with the society and
its people. These initiatives have also been recognized by entities such as Pakistan Centre of
Philanthropy.
Bank For Life
Investing in People
Environment
Service Quality
Ethics & Safety
National Cause Donations
Contribution to National Exchequer
Bank For Life
MCB Bank truly adheres to its philosophy i.e. Bank for Life. It is our commitment to
empower all our stakeholders with best corporate practices and constructive projects that help
them in pursuing their goals and achievements.
The Bank maintains highly professional working culture in its organization that includes
mandatory compliance towards the betterment of its stakeholders at every level. Hence
various capacity building and welfare projects have been initiated in the current years to
promote the living standard of the communities as whole to ensure their high performance
and instil a sense of satisfaction amongst them.

Investing in People
Education for All
MCB Bank places special emphasis on education and extends maximum financial support to
individuals and schools for the promotion of this noble cause. The Bank has been engaged
with CARE Foundation to support its extensive network of schools. It aims to develop
personality and character of Pakistans future generations by perpetrating qualities of inner
discipline and control. In this regard, the bank has signed an agreement with LUMS for the
purpose of providing soft loans to undergraduate students. MCB also did a virtual classroom
project with CISCO to promote a good standard of education for the less privileged children.
MCB CSR has allocated funds especially for the activities brought in by various educational
institutes. Some of these activities include sponsorship for Forman Christian College Model
United Nations, 5th Inter School Debate Competition and The LUMS Model United Nations
Society on 10th Annual LUMS UN Conference. On the same lines, MCB Bank has provided
sponsorship to Roots International School Education Next: Future School and also took part
in the cultural engagement events organized by Civil Services Academy - Sindh.
Human Rights
At MCB Bank, our mission is to ensure the political, educational, social and economic
quality of rights of communities that we operate in and to help advocate the elimination of
social biases and hatred. We have supported various nonprofit initiatives that serve for the
rights of humanity.
Sports
The Bank facilitated the Ibex Golf Club Sargodha, Pakistan Club and the Interact Club of
Karachi Continental. Further, it has also assisted the All Pakistan Multan Open Golf
Championship 2013, Jashan-e- Baharan Festival by Pakistan Expatriates Coop Housing
along with the Ramzan Sports Gala-2013 held by CDA.
Welfare schemes
The Bank has partnered with various NGOs that have helped to focus attention on the social
and capacity building issues of the communities e.g. Our Lady of Fatima Church, Pakistan
Foundation Fighting Blindness, The Lahore Businessmen Association for Rehabilitation of

the Disabled (LABARD) and Rehman Kayani Memorial Society are few such names.
Moreover, The Bank also supported Al-Khidmat Orphan Care Program by providing them
financial assistance so that they can also excel and move on in the mainstream life cycle. The
Bank has also been supporting Breast Cancer Awareness across the country with Pink
Ribbon.
The Bank in collaboration with Sundas Foundation has organized a blood donating camp at
MCB House Lahore and MCB Tower Karachi. The turnarounds at these camps were
tremendous and Sundas Foundation managed to collect around 400 blood bottles for the
treatment of its patients.
Realizing the needs of our minority groups, The Bank has sponsored various activities for
minorities during the year e.g. Fund Raising events for St. Anthonys Church Lahore and St.
Patricks Cathedral Karachi.
Besides direct financial support, MCB Bank has helped various charities through alternative
and innovative mediums e.g. fund- raising via electronic banking, distribution of flyers with
bills & statements and free media space to charities so that they can conveniently advocate
for their cause over mass mediums. Edhi, The Citizens Foundation, LABARD, Al-Shifa, and
SOS, to name a few.
Environment
Energy conservation
MCB Bank carries a very conscious approach towards the current energy crisis. Keeping this
concern in mind; the Bank financed few Bagasse Based Generation Power Projects. These
Projects are being setup under the Framework for Power Co-generation 2013 for Bagasse /
Bio Mass to include bagasse/ biomass under the ambit of the Renewable Energy Policy,
2006. This Alternative Energy Development Policy incentivizes the sugar companies to
expand and upgrade their power generation businesses.
The Bank is currently involved in a project that aims to generate energy with the help of
windmills. It also supports the idea of solar energy panels and plans to transform its branches
to alternate energy generation portfolios. In 2013, the bank has improved the energy

efficiency of its offices and branches wherein electricity expenses have been decreased by
7.73%.
Environmental protection measures
MCB Bank recognizes the importance of safe environment that is closely linked to the
welfare of our community at large. The bank has taken initiatives to promote a paperless
environment in order to control operating expenses resulting from photocopy and printed
papers.
In 2013, MCB Product shop developed another important product offering Fun Club which
focuses on the banking needs of the children. Besides serving the banking needs, this product
maintains balance between personal, corporate, social and environmental responsibilities.
MCB has entered into an agreement with WWF for sowing a plant in the name of the kid who
subscribes for this product. The progress of the plant growth can be observed through Google
earth.
Industrial relations
MCB Bank has introduced a special staff finance facility along with Voluntary Separation
Scheme (VSS). It has been introduced for the purpose of facilitating the clerical and non-
clerical staff. Further, scholarships are being offered to enhance the educational needs of the
children that are being supported by all the clerical and non- clerical staff working with the
Bank.
Rural development programs
The bank has partnered with State Bank of Pakistan by partially sponsoring the Farmers
Financial Literacy and Awareness Program Phase II (FFLP). It is an Agricultural
Awareness Program that is held at District Level in order to educate the agrarians at grass
root level. Also, the bank has initiated a Kisan Dost Help Desk campaign at its selected
branches from where farmers can confidently consult professionals for any relevant
assistance.

Service Quality
To ensure a culture of Quality Customer Service within the Bank, we have a dedicated
Service Quality Division. The Division also initiates process improvements in order to
achieve the fundamental business objectives of growing, deepening and retaining
customer relationships.
Customer Satisfaction
Is the core element of any business. We truly believe in pampering our customers. Their
satisfaction is the key to our success. Our help desks are always there to resolve queries. A
total of 48,249 complaints were resolved and an overall 99.2% complaint resolution rate has
been recorded during 2013.
Turn Around Time (TAT) Monitoring
In order to keep a strong hold on processes within the bank, that can cause customer
satisfaction or dissatisfaction, SQ evolved several controllable measures based on the market
practice. The TAT for day-to-day activity and their performance against it is then presented
to the management to ensure excellent service through fast delivery process.
Service Management Program (SMP)
Service Quality has ensured that all Service Related activities and (TAT) Turn Around Times
for Branch Banking are documented. This SMP has been launched in MCB Branches to
ensure that a program is always available to reference regarding the service related issues.
Service Council
Service Council has been formulated to bring together key stakeholders from across the bank
with a view to place service on the forefront through thought leadership, collaborative
discussions and creation of a clear roadmap supported by facts and data. A meeting is held
periodically which is convened by SQD Head and chaired by the President himself along
with all the Group Heads and relevant Business Heads.

Service Protocols, Complaint Logging and Suggestion Forms
SQ introduced Service Protocols Booklet in all the branches for the Standardization Service
Standards. A new, improved complaint and suggestions forms Your Priority, Our
Concerns! has been introduced in the branches for customer convenience in order to get
their feedback recorded.
Quality Checks and Mystery Shopping
During the year, around 400 branches were Mystery Shopped by independent external
agency and results of this activity was shared with management for further improvement. The
average scores remained between 73 percent to 78 percent of all the regions including far-
flung troubled areas.
Further, during the year, around 550 branches were internally gauged on defined parameters
by SQ. Considerate support has been provided to all branches for betterment and
improvement of Service Health. The overall Health and Quality Check score remained
between 80 percent to 85 percent for these branches.
Ethics & Safety
Employment of special persons
MCB Bank is an equal opportunity provider. It has never discriminated on the basis of race,
gender, age or disability. The bank has recruited a sufficient number of special persons at
various branches all over Pakistan. At MCB Bank, special persons are not discriminated on
the basis of their handicaps.
Occupational safety & health
The safety and health of personnel are of paramount importance to the Bank. The Bank
ensures that maximum safety standards are met at all businesses, offices and branches and
encourages all employees to promote the safety of their fellow employees and customers. A
special Safety and Health Policy has been developed. This Policy aims at providing a safe
and healthy working environment to the people working and visiting the Bank.

Business ethics & anti-corruption measures
Fraudulent Market and Credit Risk cannot be eliminated however the Bank has always
been active in identifying and mitigating possible risks and losses through promulgation of
policies and procedures to reduce possibility of such incidents.
The Human Resources Management Group of the Bank provides Code of Conduct and
Standard of Ethics; a comprehensive document is in place as a part of the Human Resource
Policy & Procedure Manual which is available to all staff members on the Banks Intranet.
The Disciplinary Action Committee (DAC) takes action on any violation of policies &
procedures, act of fraud & forgery, breach of discipline and code of conduct, ethics &
business practices, law of land and statutory regulations by an employee.
National Cause Donations
In 2013, rupees five million were donated by Islamic Banking Group for the effected
Christian Community owing to riots in Joseph Colony, Badami Bagh, Lahore. Also, rupees
thirty million (including Rs. 5 million charity by IBG) were donated to the Prime Ministers
Earth Quake Relief Fund for Baluchistan 2013.
We have received CSR Business Excellence Award and have recently been ranked 8th
because of the volume of donation among 490 top Pakistani companies which is definitely a
source of motivation for us to continue towards such gallant initiatives.
Contribution to National Exchequer
The number one bank in highest market capitalization and one of the most profitable bank,
MCB Bank always one of the leaders in contribution to the national exchequer. The Bank
paid Rs. 10.36 billion as income tax to Government treasury during 2013. Furthermore, the
Bank contributed over Rs. 5 billion to the National Exchequer as withholding tax agent under
different provisions of Income Tax Ordinance 2001.
The Banks contribution to the national economy by way of value addition was Rs. 43.35
Billion, out of which Rs. 10.29 Billion was distributed to employees and Rs. 15.18 Billion to
shareholders.

The Bank has generated direct and indirect employment for a large number of people over the
years. With the payment of taxes and the investment in the network, the bank is making a
significant contribution to the countrys development and growth.



Products for Individual Customers
1. Deposit Accounts
MCB offers a wide range of local and
foreign currency deposit products to best
suit your needs.
Whether you want to save for that rainy
day or something special, our SAVING
DEPOSIT portfolio is designed to
provide you with ease and comfort for all
your saving needs.
For those seeking to grow their savings over the longer term with guaranteed returns, we at
MCB have our TERM DEPOSIT products offering various tenor options with different
profit pay-out frequencies.
For complete day-to-day banking needs, MCB CURRENT DEPOSIT menu is designed to
provide you with transactional convenience and flexibility for all your financial dealings.
2. Home Remittance
End FREE, Receive FREE
MCB Home Remittances offers an unmatched service for overseas Pakistanis to send money
home FAST and FREE across Pakistan within our large network of over 1200 branches.
MCB Home Remittance Service is FREE & INSTANT throughout our network of
international send-agents like "MoneyGram", "Xpress Money" and "Samba Speed
Cash Now". Pick up your remittances from any MCB branch displaying these logos.
MCB Burqraftaar Transfer (Straight to Account!) enables you, the Non-Resident-
Pakistanis, to send money to your loved ones in Pakistan through our hassle free
straight to account credit service.

MCB Burqraftaar Cash (Cash in Hand!) is available via MCB's entire branch
network. Payments can be made at any MCB branch to walk-in customers simply
with the provision of their Xpin code and CNIC (No account number is required for
such transactions).
For 24/7 customer support, please contact MCB Call Center +92 21 111-000-622 and +92 21
111-802-802 (9am-5pm) or email us at mcbhremittance.support@mcb.com.pk
Home Remittance Yaani MCB!
*For SMS alert a valid mobile number of the beneficiary is required.
3. Consumer Loans
MCB Bank offers following consumer loans:
Car4U
Student Personal Loan
Personal Loan
Home Loan
Cash4Cash
Car4U
Kahin na Kahin tau Hai Aik Car4U
Life in the fast lane can be really slow without a car. MCB Car4U makes it a breeze to
finance your new/used car. So get up to speed, because "Kahin Na Kahin Tau HaiAik
Car4U".
Flexible
Financing up to PKR 6 Million for New Cars & PKR 4 Million for Used Cards
Financing Tenure from 1 to 7 years for New Cars & 5 years for Old Cars
Affordable

Standard Minimum 20% down payment
Speed
Fast and hassle free application processing
Special Benefits
No processing fee if the case is declined
Down payment payable after the loan is approved
Availability
Currently available in the following cities:
Karachi, Lahore, Faisalabad, Rawalpindi, Islamabad, Sialkot, Gujranwala, Hyderabad,
Multan, Peshawar, Sahiwal, Sargodha, Quetta, Jhelum, Abbottabad, Mirpur Azad Kashmir,
Bahawalpur, Rahim Yar Khan, Sukkur, Gujrat, Okara, Kamoke, Sadhoki, Ghakkar, Daska,
Sambrial, Lalamusa, Jallalpur Jattan, Khurrianwala, Taxila.
Existing Customers
If you are our account holder, you can avail this facility in many areas in addition to
the above through a network of more than 1,000 branches spread across Pakistan.
Get lower mark-up rates if you are already a MCB customer.
So what are you waiting for? Apply for MCB Car4U today!
For further details, please contact your nearest MCB branch, our Call Center 111-000-622.
Our sales staff will be available at your doorstep to assist you in availing MCB Car4U.
Note: All loans shall be processed and approved as per MCB Bank Limiteds sole discretion
in accordance with regulations and Banks approved policies and procedures.
Student Personal Loan
Customer Segment

This product has been developed to offer financial assistance to students enrolled in Higher
Education Programs. Currently, MCB has formed a partnership with Lahore University of
Management Sciences (LUMS) and is offering Student Personal Loans to all MBA and
Executive MBA students of the University.
Age
Minimum 21 years and maximum 45 years at the time of loan/first trance approval
General Criteria
Generally, the student meeting the following criteria shall be eligible for the loan:
Be a Pakistani National.
Has got at least 50% marks (or equivalent) in the last public examination (i.e. other
than admission tests, e.g. GMAT, SAT, LMAT, etc.) The same must be confirmed by
LUMS in writing.
Must have a valid admission in and has provided admission acceptance to LUMS.
Confirmation of finalized admission must be provided by LUMS in writing.
Maximum 80:20 of only Admission, Registration, Tuition, On-Campus Residence, and any
other part/head/item of the fees that is payable in advance by the student to LUMS
Moreover, the loan shall not cover any amount that is refundable to the student later on.
Loan Amount
Maximum PKR 1 million only
Personal Loan
MCB Personal Loans is a Fast, Affordable and Easy option to meet your immediate financing
needs. Whether you are looking for a leisure trip abroad with your family or a solitaire for
your wife, MCB offers a flexible payment option for your wish list!
Special Features

MCB Personal loan is FAST because we prioritise promptly satisfying your financial
needs
MCB Personal loan is FLEXIBLE because the repayment tenure can be anywhere
between 1-5 years
MCB Personal loan is AFFORDABLE because we have attractive & competitive
interest rates for you
You can avail a loan of up to PKR 2 million with MCB Personal loan
No securities or collateral required
Quick Documentation
Eligibility
This product is currently available to salaried class (whose salary is being transferred to
MCB) with Net Salary over PKR 40,000/ month. For details on your eligibility, please call
the Call centre.
Initial Documents Required:
Copy of Salary slip/ Proof of income
Copy of Valid CNIC
Rates
MCB Personal loan offers competitive rates depending on customer segment and tenor of the
loan.
Minimum Loan Amount: PKR 50,000
Maximum Loan Amount: Up to PKR 2 million *
Tenor: Up to 5 years
Approved Cities: Karachi, Lahore, Rawalpindi, Islamabad, Faisalabad, Hyderabad, Multan,
Gujranwala, and Peshawar.
For further information, please call MCB Phone Banking at 111-000-62 (MCB) or visit your
nearest MCB branch.
*Subject to terms & conditions

Home Loans
A home of your own is a blessing and a long held aspiration of many. Now with MCB Home
Loan fulfilling this dream has never been so easy. MCB Home Loan opens doors to
numerous sensible financing options to help you purchase, build or renovate your new /
existing home.
After all, your home is where your heart is.
Purpose
Home Purchase: Purchase of ready property.Home Construction: Construction of house on
land owned by borrower(s) where the loan is disbursed in tranches.
Home Renovation: Renovation/improvement of existing home where the loan is disbursed in
tranches.
Plot Purchase and Construction: Purchase of land / plot and construction on it where the loan
is disbursed in tranches.
Cities
Karachi, Lahore, Faisalabad, Rawalpindi and Islamabad are the cities where you can
purchase, construct or renovate your house through MCB Home Loan.
General Terms and Conditions
Repayment in equal monthly instalments (EMI)
Information regarding availed loans from other banks should be authentic
Personal information should be valid
Mandatory verification checks of borrowers and collateral
Bureau reports regarding repayment history of all borrowers wherever applicable
should be unambiguous, positive and satisfactory
Property insurance is mandatory
Equitable/Token Registered Mortgage/Registered Mortgage as per Banks
requirement
Collateral appraisal through banks approved valuation agencies
Income estimation through banks approved agencies

Extract of Relevant SBP Regulations and Bank's Policy on Home Loans
SBP Regulation: Total monthly instalment should not exceed 50% of net disposable
income
MCB Bank policy: Debt to equity ratio to be as per Banks requirement
MCB Bank policy: Maximum loan tenure is 20 years
MCB Bank policy: The collaterals are evaluated by banks approved evaluation
agencies
MCB Bank policy: Floating rate is extended for home finance which is re-priced on
first working day of each year. The spread would, however, remain constant while the
change in KIBOR shall affect the pricing
Eligibility Criteria
Applicant(s) must be Pakistani Resident Nationals
Salaried, Self Employed Businessmen / Professionals
Satisfactory verifications
Satisfactory bureau checks
Satisfactory income estimation, property valuation and legal opinion
Loan Amount
Home Purchase: PKR 40 Million
Home Construction: PKR 20 Million
Home Renovation: Up to PKR 15 Million
Plot Purchase Plus Construction: PKR 40 Million
Required Documents
Application form
Copy of valid and original CNIC/SNIC
Two passport size photographs
Declaration of all financing facilities availed from all banks/DFIs
Income documents
Business /employment proof
Copy of property documents
Any other document required by the Bank
Cash4Cash
Financing secured against cash/near cash collateral allowed to individuals for meeting their
personal, family, and household needs.
Eligibility

21 years and above.
Resident Pakistani national.
Salaried, self-employed, retired individuals and house-wives.
Financing
PKR 0.050M PKR 20.000M.
Collateral
MCB Term Deposits, Special Term Deposits.
MCB Foreign Currency Deposits / Accounts.
Dynamic Cash Fund / Cash Management Optimizer Fund / Pakistan Cash
Management Fund / Metrobank Pakistan Sovereign Fund / MCB Islamic Fund /
Pakistan Income Enhancement Fund / Pakistan Income Fund.
Defense Saving Certificates (DSCs), Special Savings Certificates (SSCs), Regular
Income Certificates (RICs) and government securities.
Other Banks securities (subject to approval of MCB).
Availability
Facility available at more than 200 branches spread all over Pakistan.
4. Credit Cards
Classic/Gold Credit Card
MCB Classic/Gold Credit Card is not just
another card in your wallet. It not only provides
the conventional credit card services in a
manner that is superior in comparison, but goes
an extra mile. Introducing unique, innovative
and state of the art services, MCB Visa is the
most secure, affordable and rewarding credit
card turning your shopping into a much more exciting experience.

MCB card is accepted at all Automated Teller Machine (ATM)s across Pakistan as well as
several million locations worldwide.
Your card comes packed with the most amazing features and is the only card that truly lives
up to your expectations.
So enjoy the power of your MCB VISA - the card that goes anywhere, from the bank that is
everywhere!
Platinum Credit Card
MCB Visa Platinum Credit Card is the
most reliable, competitive and gratifying
Credit Card offering a tantalizing mix of
luxurious shopping, dining and travelling
opportunities, which will undoubtedly be a
treat for you and your family.
It is accepted at nearly 29 million locations
in more than 150 countries around the
globe and over 30,000 establishments in Pakistan. So make the most of a powerful card and
expect what you deserve, a liberating experience that redefines the way you spend.
Enjoy the influence of your card as you become platinum.
5. Debit & Prepaid Cards
MCB Bank offers:
Prepaid Card
MCB VISA Prepaid Card
Debit Card
MCB VISA Debit Card
MCB Visa Prepaid Card

MCB Visa Prepaid Card is aimed at providing convenience and control that will completely
change the way you transact. It can be used to withdraw cash, shop and make online
payments locally and internationally.
Instant issuance.
24/7 cash accessibility through Automated Teller Machine (ATM) (Automated Teller
Machine).
Accepted at several million outlets.
Online shopping with Visa acceptance.
Features
Cash Free Spending
Why carry cash? MCB Visa Prepaid Card enables you to make purchases at several million
outlets in 160 countries worldwide. Each Purchase is debited directly from your card balance,
making it a convenient and secure experience.
1) Shopping
2) Dinning
3) Fuel
4) Travel
MCB Visa Debit Card
MCB now brings you Visa Debit card Pakistans
1
st
chip based debit card. It allows the customers to
enjoy unmatched convenience, enhanced security
and round-the-clock accessibility to their funds.
The MCB Visa Debit card offers innovative promotional schemes designed to reward our
customers every time they use the card to pay for shopping, dining, fuel, travel etc. Features
such as increased withdrawal limits, SMS alerts, door step delivery, instant Automated Teller
Machine (ATM) PIN generation via call center, e-statements and variable spending limits add
to the convenience it offers. Customers receive guaranteed PKR 250 Cash Back* when they
use the card to make a payment for the 1
st
time.

6. Bancassurance
As dreams pass into the reality of action,
from the actions stems the dream again.
This interdependence constructs the
highest form of living. Your dreams may
be to give your children the best
education, live a dignified life after
retirement, or just keep your loved ones
financially secure and protected. What
everyone wants from life is a continuous
and genuine happiness. Your action to
plan for your future financially will stem your dreams. MCB Bancassurance has a financial
plan that fits all your needs by fulfilling you and your loved ones dreams and keeping your
Har Pal Mehfooz.
Combining the best of banking and financial solutions, MCB Bancassurance provides a one-
stop shop solution for you by guaranteeing convenience and security with a wide range of
products available for all your financial needs.
All our plans are specially designed by reputable insurance providers. These companies have
excellent experience with insurance products and guarantee that your funds would be in good
hands as there is a team of professional investment experts in each company working on
making the funds grow higher in a secure manner.
Each plan is designed to give you a peace of mind because we know that in the end, its not
the years in your life that counts. Its the life in your years.
Flexi Life
Life Partner
Edu Care
Dream Wedding
Capital Sure
Retire Easy
Income Max

Future Assure
Protection Plan
Save and Assure
Kafalah
7. Investment Services
At MCB Bank, our aim is to provide end-to-end approach to banking we believe that our
success is directly linked to achieve your investment objectives. We offer you a diversified
range of investment products, from the basic and classic options to the more evolved and
structure ones. With our ability to provide you a range of products to suit your needs, we give
you an opportunity to meet both your short and long term investment needs.
8. Mutual Funds
At MCB Bank, we help you identify a suitable mix of Mutual Fund schemes spreading across
Equity, Balanced, Fixed Income and Liquid Funds.
Equity Funds
Equity funds are schemes where higher weight in investments is in equity and equity related
securities of various companies. However, the returns from these funds are directly linked to
the stock market (Karachi Stock Exchange) and are more volatile as compared to those from
fixed income funds.
Balanced Funds
A balanced fund is a scheme geared towards a mixture of safety, income and modest capital
appreciation. These mutual funds invest into each asset class that usually remains within a set
minimum and maximum. To a large extent, the returns depend on the performance of the
equity portion in the portfolio. There is some flexibility in changing the asset composition
between equity and debt. The fund managers use this strategy to buy the best asset class at
each time.
Tax Saving Funds

Tax savings funds are special products offered by mutual funds. To avail tax benefits, these
funds have a lock-in-period. This period can change subject to amendments in Income Tax
Ordinance.
Separately Managed Account Services
MCB IS will assist you for Separately Managed Account Services by jointly working with
our subsidiary Asset Management Company. Our partner Asset Management Company
conducts detailed and scientific analysis of various investment avenues to help you invest
your money suiting your customized needs.
Fixed Income Funds
These funds invest primarily in government and corporate debt. While fund holdings may
appreciate in value, the primary objective of these funds is to provide a steady cash flow to
investors.
Liquid Funds
Liquid Funds are investing in short-term money market instruments including treasury bills,
commercial paper and certificates of deposit.
Overdraft against Securities
The Loan against Securities is MCB's overdraft facility against selected Funds. It offers you a
convenient and immediate line of credit just when you want it. Please note this facility is not
guaranteed to everyone.

Structured Notes
Rather than the traditional buy-and-hold approach, these products use derivatives and option
strategies to provide structured payouts. Certain structured products also offer the benefit of
capital protection.
Risk Profiling

To start with, we take you through a simple, easy-to-fill questionnaire; we gauge your
appetite for risk, for specific investment products and for your entire portfolio. So whether
you should be investing heavily into equity or in cash, our profiling gives you the right
answers.
Foreign Exchange
A Total Foreign Exchange solution to cater to your needs.
Remittances
With our remittance solutions you can transfer money to and receive money from anywhere
in the world with ease.
9. Rupee Travelers Cheque
MCB Bank has been at the forefront of providing its
customers with new and innovative products and financial
instruments that are safe, secure and profitable.
MCB Rupee Traveler's Cheques were first introduced in
1993 as safe cash for traveling and travel related purposes.
The product has been extremely popular and is preferred
over cash by customers while travelling and in all walks of
life.
MCB Rupee Traveler's Cheques- The safest way to Carry Cash

Rupee Travelers Cheques Features
Easily available: Buy them from any of the designated branches in Pakistan.
As good as cash: MCB RTCs are safe to carry and can be used without any
inconvenience specially by Travelers.
Easily encashed: At any designated MCB branch.
Easily refunded: in case of loss or theft, you can get the full amount back.

Exclusive security features: Due to special printing and safety precautions, Cheques
cannot be duplicated.
Denominations: Available in denominations of Rs 1000, Rs 5000, Rs 10,000.
Validity: 10 years from the date of purchase.
Customer Service Facility: (021) 111-000-123.
More than 900 MCB Authorized branches are selling and purchasing Cheques all over
Pakistan.
Services for Individual Customers
1. Self Service Channels
MCB Bank offers the following self service facilities:
MCB Internet Banking
MCB Mobile
Automated Teller Machine (ATM) Services
Call Center
E-Statements
SMS Alert
MCB Internet Banking
MCB Internet Banking offers you the convenience to manage and control your bank account
and finances; whenever and wherever you want!
MCB Internet Banking is:
Simple
Secure
Free of Cost
MCB Mobile
MCB Mobile allows you to make payments, check your account balance and view your
mini-statement from the comfort of your home, office or anywhere else in the world, 24
hours a day, 7 days a week.

ATM Services
Welcome to a world of convenience with the MCB Visa Debit Card. "It Works. Anytime,
Anywhere in Pakistan & abroad.
MCB Visa Debit Card is accepted at over 6,000 Automated Teller Machine (ATM)s
(Automated Teller Machine) nationwide. MCB Visa Debit Card enables you to access fast
cash, inquire account balance, transfer funds and pay utility and mobile bills/mobile top-ups
from any of over 800 MCB Automated Teller Machine (ATM)s in the country.
So go ahead! Use your MCB Visa Debit Card anytime, anywhere.
E-Statements
Dear customer registration for e-statement through branches is temporarily not available. In
order to get yourself enrolled for e-Statement kindly contact our 24/7 helpline 111-000-622
from your system updated number.
MCB e-Statement offers you to keep a close eye on your bank account transactions by
receiving your electronic statement. Main features are:
Free of cost
Convenient
Secure
What do we Offer?
Receive in PDF format on your given e-mail address.
Receive on monthly basis and detailed transaction history on semi & bi-annual basis
as well.
No charges at all.

SMS Alert
MCB brings to you SMS Alerts Service to keep track of your transactions 24/7! Make life
easier by receiving real-time SMS updates for transactions conducted on your account(s).
You no longer need to call or visit the branch to inquire about your daily transactions.
Eligibility Criteria
An active MCB account
A local mobile number
Fee
SMS Alerts Service will be charged at Rs.299 +FED per annum on counter transactions.
Transaction Type
Cash Deposit
Cheque Withdrawal
Cheque Clearing Debit
Cheque Clearing Credit
Cheque Deposit (Internal)
Cheque withdrawal (Internal)
Salary Credit
Key Features
Multiple registrations: You can receive SMS notifications for all your MCB accounts.
Secure: SMSs will only be sent to your registered mobile number which you provide
at the time of applying for this service.
2. MCB Loyalty & Discounts
Your MCB VISA Cards (Debit, Credit, Prepaid, Lite) open up an array of incredible discount
opportunities for you and your loved ones. Whether its shopping, dining or lodging that you
want to indulge in simply use your MCB Cards and avail remarkable offers and privileges!
We offer discounts on our entire debit, credit and prepaid portfolio because all our customers
are special to us.
To avail these and many more discount offers apply for any of the cards below:

MCB Visa Debit Card (Platinum, Gold Plus, Gold & Silver)
MCB Credit Card
MCB Lite Card
MCB Prepaid Card
3. Lockers
Ensuring security to your valuables, we offer deposit lockers that you can operate in the
privacy and comfort of your own MCB branch.
Available at selected branches in cities / towns all over the country. For details, please
visit your MCB branch
Lockers available in Small, Medium and Large sizes*
Fixed sum assured as per size of locker
Locker can be operated in single or joint capacity
*Terms & Conditions apply as per MCB Schedule of Bank Charges



Products for Business Customers
1. Deposit Products
MCB offers a wide range of local and foreign currency deposit products to best meet your
needs.
Whether you want to save for that rainy day or something special, our SAVING DEPOSIT
portfolio is designed to provide you with ease and comfort for all your saving needs.
For those seeking to grow their savings over the longer term with guaranteed returns, may
resort to our TERM DEPOSIT product offering with various tenor options and different
profit pay-out.
For complete day-to-day banking needs, MCB CURRENT DEPOSIT menu is designed to
provide you with transactional convenience and flexibility for all your financial dealings.
Current Deposit
We offer a broad range of Current Deposit products, in PKR & foreign currencies, tailored to
your needs. Our products help you better manage your money by ensuring convenience and
freedom for you to bank from a wide network of our branches and various remote channels.
We save your time while offering greater peace of mind.
Following are the products that may suit your needs:
Current Account
Business Account
Foreign Currency Current Account
Current Account
Key Features
Minimum balance requirement PKR 10,000
Unlimited cash withdrawals and deposits


Self Service Channels
Automated Teller Machine (ATM)
Call Center
Internet Banking
Mobile Banking
SMS Alerts
Business Account
Key Features
Minimum monthly balance PKR 50,000
Unlimited withdrawals & deposits
Free Services*
Demand Draft / Pay Orders.
Cancellation of Demand Draft / Pay Orders.
Cheque Book.
Duplicate Bank Statements
Online Funds Transfer
Self Service Channels
Automated Teller Machine (ATM)
Call Center
Internet Banking
Mobile Banking
SMS Alerts
Foreign Currency Current Account
Key Features
Open your account in US Dollar,
UK Pound Sterling or Euro
Open for as little as US$ 500 or
equivalent
Unlimited withdrawals & deposits
Self Service Channels

Call Center
Internet Banking
Saving Deposit
We offer you a wide array of saving products that suit your short-term growth and
transactional needs. Our products, in PKR & foreign currencies, offer attractive profit rates
giving you tiered profit payment options and different profit payment frequencies.
Following are the products that may suit your needs:
Saving Account
365 Saving Gold Account
Saving Xtra Account
Salary Club Gold Account
Foreign Currency Savings Account
Term Deposit
Our Term Deposit products, in PKR & foreign currencies, offer attractive short to mid-term
investment options with flexibility, convenience and security. Various tenor options available
so that you can choose the one that suits your needs. With different profit pay-out options and
added credit facility our Term Deposits are an answer to your investment needs.
Following are the products that may suit your needs:
Flexi Deposit Account
Mahana Profit Account
Special Foreign Currency Term Deposit
2. Lending Products
MCB offers an array of lending products catering to your business needs in affordable &
convenient ways, under international & local regulatory framework. We provide funded &
non-funded finance facilities to take care of short-term & long-term business needs of all
segments including Small and Medium Enterprises (SMEs), middle-markets & agriculture
sector.

Funded Facilities
Working Capital Financing
Export Re-Financing (under State Bank of Pakistan Scheme)
Agriculture Financing
Term Loans
Non-Funded Facilities
Letters of Credit
Standby Letter of Credit
Guarantees

Rely on us as your business partner.
3. Trade
MCB offers wide range of trade products catering to your business needs in affordable &
appropriate ways, under international & local regulatory framework. These products are
offered through a wide network of branches. A large correspondent network across the globe
and strong Treasury further enhance the strength of Trade Services.
Trade sale activities are being carried out through specialized trade desks in trade specific
branches where a dedicated team of professionals, well equipped to deal with conventional as
well as advanced features of International trade, is available. This process includes
proactively seeking out business opportunities and handling end to end customer requests.
These trade desks play a pivotal role in ensuring the fact that MCB has a strong connection
with its customers.
Trade operations are processed through 8 structured Trade Services Centers across Pakistan
technologically equipped to manage large volumes of transactions with minimum turnaround
time.
We provide funded & non-funded finance facilities to take care of short-term & long-term
business needs of all segments including SMEs, middle-markets.

Trade Products
MCB offers a wide range of products and trade related services for its valuable customers to
choose from.
Import Services
Below is a list of few services MCB provides to help any business having importing needs:
Import Documentary Credits (LCs) both Inland and Foreign
Sight
Usance
Back to back Documentary Credits (LCs)
Standby Documentary Credits (LCs)
Documentary Collections
Shipping Guarantees
Import Contract Registration
Open Account Transactions
Import Advance Payments
Export Services
We can help your export business through any one or combination of following products
being offered through wide network of our branches.
Documentary Credit (LC) Advising
Documentary Bills Drawn Against LCs
Documentary Collections
Documentary Credit (LC) Confirmation
Export Advance Payments.

Trade Financing
Bill Purchase /Negotiation
Inland
Foreign
Foreign Currency Bill Discounting
Bill purchase under Bank Avalisation
Foreign Currency Export Finance
Finance Against Packing Credit
Finance Against Foreign Bills

SBP Export Refinance (Part-l and Part-ll)
Finance against Imported Merchandise
Finance against Trust Receipt
Foreign Currency Import Finance
Import Avalisation
4. Rupee Travelers Cheque
MCB Bank has been at the forefront of providing its customers with new and innovative
products and financial instruments that are safe, secure and profitable.
MCB Rupee Traveler's Cheques (RTC) 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 travelling and in all walks of life.
MCB Rupee Traveler's Cheques- The safest way to Carry Cash
Rupee Travelers Cheques Features
Easily available: Buy them from any of the designated branches in Pakistan.
As good as cash: MCB RTCs are safe to carry and can be used without any
inconvenience specially by Travellers.
Easily encashed: At any designated MCB branch.
Easily refunded: in case of loss or theft, you can get the full amount back.
Exclusive security features: Due to special printing and safety precautions, Cheques
cannot be duplicated.
Denominations: Available in denominations of Rs 1000, Rs 5000, Rs 10,000.
Validity: 10 years from the date of purchase.
Customer Service Facility: +92 21 111-000-123.
More than 900 MCB Authorized branches are selling and purchasing Cheques all over
Pakistan.




Services for Business Customers
1. Agriculture Financing
MCB is financing agriculture sector since
1973. Due to large branch network and
specialized staff posted in the branches,
MCB caters to the financing requirement of
the farming community spread through out
the country and facilitates in achieving
increased productivity.
MCB has reinvigorated its agri financing
products. Agri financing facilities are
available through out the country at designated Lending Branches. All types of financing is
available for short, Medium and Long term depending upon farmers choice and the nature of
finance. MCB gives top priority to small & medium size farmers so that they could be
protected from the exploitation of private money lenders and could get better yield of crops.
Agriculture Products
Shadabi Plan
Khushali Plan
Tractor Finance
Aabiari Finance
Grower Finance
Dairy and Meet Finance
Murghbani Finance
Baghbani Finance
Mahigeri Finance

Shadabi Plan
Shadabi Plan caters the financing needs for production activities on the farm which mainly
include seed, pesticides and fertilizers along with provisions for miscellaneous expenses like
payment of electricity & diesel bills of tube wells, maintenance expenses for tractors and the
like items as per list of Eligible items.
Salient Features:
Financing requirement is ascertained for a period of three years
Limit is sanctioned for three years on revolving basis with one time documentation
subject to annual clean up along with markup.
Mark up is charged on the limit amount utilized by the farmer
There is no prepayment penalty
There is no hidden cost involved
Forms & documents are provided free of cost.
Khushali Plan
Under Khushali Plan loans/finances are allowed for farm/non farm credits which include
fixed investments/working capital requirements. Amount of finances sanctioned depend upon
the credit requirement and collateral.
Financing for land leveling/development, heavy equipments, agriculture machinery,
vehicles/transport for agri purpose are covered under this scheme. There may be other
development projects proposed by the farmers falling with in the ambit of agri financing,
which can be considered under this plan.
Salient Features:
Short, medium and long term financing facilities are extended
The repayment is scheduled on the basis of farmers convenience on annual/ biannual
basis.
Tractor Finance
To boost up the mechanized farming in the country, Tractor Finance Scheme is introduced to
offer specialized services to farmers. Under this scheme, there is no requirement of minimum

land holding because of multipurpose use of tractor for agriculture cum commercial.
However, the repayment capacity and potential use of tractor will be evaluated at the time of
loan processing.
Salient Features:
All types & makes of tractors either locally manufactured or imported can be financed
Tractor is financed for a period of five years or earlier as per farmers choice
Installment is on biannual basis.
Comprehensive insurance is required to be intact during the tenure of finance
Tractor will be jointly registered in the name of the borrower and the bank.
Tractor will remain hypothecated in banks favour till the loan is repaid in full
Security/collateral will be required as per bank policy.
Aabiari Finance
Under the Aabiari Finance (Irrigation Finance), financing facilities for tube well, other wells,
irrigation systems of all types including sprinklers are covered. The purpose is to facilitate the
farmers in overcoming the shortage of water for cultivation/plantation since water is essential
requirement for crops.
Salient Features:
The requirements may differ from farmer to farmer.
Evaluation/assessment of finance will be made on case to case basis.
The finance will be for a period to be determined on the basis of assessment
Repayment of the loan will be on biannual basis or linked with crop cycle
Three quotations will be required in case of machinery to be installed
Growers Finance
Grower Finance is a unique way of financing registered/(bonafide) growers/farmers of
sugarcane, cotton and rice(mills). The special characteristic is that the financing facilities are
extended to farmers against the Mill/Factory guarantee. Fixed/floating charge may be created
on the Mill's assets and the loan is disbursed directly to the growers. This finance is short
term in nature but the tenure may extend to eighteen months in case of growers of sugarcane.

Salient Features:
The grower should have his account opened in MCB Branch
The BOD of the Mill should pass a resolution for financing request addressed to MCB
The charge over the assets of the company is created
KYC requirements are complete
Growers crop is hypothecated
Repayment of the loan is linked with crop harvesting
Dairy and Meat Finance
The plan is aimed at promoting the Dairy sector & meat production in the country. The
farmers are extended financing facilities to purchase dairy animals for milk and for the
establishment of animal fattening stations to increase meat production on commercial lines,
thus enabling the farmer to create more income.
Salient Features:
The amount of loan is assessed on the basis of the purpose for which loan is required
The repayment of loan may be scheduled in installments on monthly, quarterly and
half yearly basis
The cash flows to be routed through MCB account
The animals are comprehensively insured till the repayment of the loan
The animals financed are hypothecated in banks' favor
Farmers supplying milk to Milk processing units like Nestle's are covered.
Murghbani Finance
Murghbani Finance covers extensively all requirements of the poultry industry with focus on
facilitating the farmers. We offer financing facilities of all types of activities in the value
chain starting from establishment of poultry farms infrastructure to all requirements in the
process till the final out put including marketing of the same by the farmers.
Salient Features:
All farmers engaged in non farm activity of poultry financing are encouraged to avail
financing facilities.

The loan requirement & tenure of finance depends upon the purpose and life of the
project
Comprehensive insurance has to be arranged by the borrower where possible
The intending borrower should be able to offer adequate security acceptable to the
bank along with Hypothecation of stock.
Baghbani Finance
Baghbani Finance aims at facilitating the farmers engaged in horticulture by extending credit
facilities covering the entire range of related activities. The proposals are assessed keeping in
view the market potential and repayment capacity based on the cash flows of the activity. The
farmers are extended all type of credit facilities required to produce fruits & vegetables of
better quality. The repayment of the loan is as per farmer convenience or linked to crop cycle
and timings of cash flows. Facilities like running finance, working capital requirements,
infrastructure development, machinery & equipment, irrigation etc are all covered under this
finance.Progressive farmers are specially encouraged.
Salient Features:
The farmer/applicant should be having an account with our branch
The purpose/project should be viable
Should meet all documentation formalities
Should be experienced to handle the project
The loan requirement & tenure of finance depends upon the purpose and life of the
project
The intending borrower should be able to offer adequate security acceptable to the
bank
Comprehensive insurance has to be arranged by the borrower where possible
Mahigeri Finance
Mahigeri Finance caters to the credit needs of fish farmers covering entire range of activities
including marketing of their produce. The loans are of short, medium and long term
depending upon the purpose. Financing for value addition process by the fish farmers is also
covered.

Salient Features:
All farmers/Fishermen engaged in non farm activity related to fisheries are
encouraged to avail financing facilities
The loan requirement & tenure of finance depends upon the purpose and life of the
project
The intending borrower should be able to offer adequate security acceptable to the
bank
Comprehensive insurance has to be arranged by the borrower where possible
2. Lockers
Ensuring security to your valuables, we offer deposit lockers that you can operate in the
privacy and comfort of your own MCB branch.
Available at selected branches in cities / towns all over the country. For details, please
visit your MCB branch
Lockers available in Small, Medium and Large sizes*
Fixed sum assured as per size of locker
Locker can be operated in single or joint capacity