Internship Report

Muslim Commercial Bank Limited

Internship report submitted in partial fulfillment

Of the requirements for the degree of

BACHELOR OF BUSINESS ADMINISTRATION

By

Nouman Shahid

BBA02113141

Faculty of Management Sciences

Lahore Business School

Lahore, Pakistan.

Semester 2011-2015
 ASSESSMENT PAGE

Internship Report

Muslim Commercial Bank Limited

Internship report submitted in partial fulfillment

of the requirements for the degree of

BACHELOR OF BUSINESS ADMINISTRATION

By

Nouman Shahid

BBA02113141

The Internship report of Mr. Nouman Shahid is approved:

Ahmad Zafar

Project Advisor, LBS

Mahreen Tahir

Co-Assessor, LBS

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 Synopsis

MCB is one of the leading banks of Pakistan incorporated in 1947 MCB Bank has
made significant contributions in building and strengthening both corporate and
retail banking sector in Pakistan.

This report is an upshot of my six weeks internship in Muslim Commercial Bank of

Pakistan. MCB of Pakistan possesses an imperative and historical importance in the
banking sector of Pakistan. It always remains the center of hustles in business
activities. It always endows with great covenant of rally round in terms of funds and
services at all epochs of its dynamism.

The main purpose of internship is to learn, by working in practical environment and

to apply the knowledge acquired, during the studies, in a real world scenario in order
to tackle the problems. In this report the detailed analysis of the organization has
been done and all the financial, technical, managerial and strategic aspects have
been evaluated to analyze the current position of the organization. Along with it, the
background analysis, the prevailing competition analysis, the business process
analysis, and the internal environment and external environment of the organization
have been discussed and the recommendations & suggestions for the improvement
have been made wherever required.

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 Acknowledgment
‘‘Allah is the Creator of all things and He is the Guardian and Disposer of all
affairs ’’

(AL – QURAN)

All acclaims are to Allah, the most Merciful and Compassionate, who has blessed me
with health, abilities and guidance and also empowered me to complete this task
successfully.

Most importantly I would like to thank my parents who supported and encouraged me
to establish myself, to boost the confidence in me, and to flourish myself in making
the better future.

The credit for completion of this report also goes to Lahore business School LBS,
University of Lahore and all my teachers who guided me throughout whole degree
session and illuminated me with light of knowledge and confidence. A bundle of
thank to Mr. Ahemad Zafar for always being here to the guide everything regarding
internship report.

Last but not the least major part of my thanks goes to Muslim commercial Bank LTD.
that provided me with opportunity to work with them and to learn the practical side of
my career. I would specially like to thanks “Mr. Imran Ahmed Mir” who always
courage me to do the things in a right way and make them happen successfully.

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 Table of Contents
Synopsis ......................................................................................................................... 3
Acknowledgment ........................................................................................................... 4
Introduction .................................................................................................................... 9
Banking Industry.......................................................................................................... 10
Introduction of MCB: .................................................................................................. 11
History of MCB:....................................................................................................... 11
Nationalization of MCB: .......................................................................................... 11
Privatization of MCB: .............................................................................................. 12
MCB Then and Now ................................................................................................ 12
Nature of Organization ............................................................................................. 13
CORPORATE FINANCE ........................................................................................ 13
TRADING & SALES............................................................................................... 13
RETAIL & CONSUMER BANKING ..................................................................... 13
COMMERCIAL BANKING ................................................................................... 13
Number of Employees .............................................................................................. 14
Board of directors ................................................................................................ 14
Audit Committee.................................................................................................. 14
Chief Financial Officer ........................................................................................ 14
Company’s Secretary ........................................................................................... 14
MCB Product Line ....................................................................................................... 15
MCB CORPORATE FINANCING ......................................................................... 15

Working Capital Loans ...................................................................................... 15

Term Loans ........................................................................................................ 15

Trade Finance Services ...................................................................................... 15

Cash Management .............................................................................................. 15

Transaction Banking Division ........................................................................... 15

MCB RETAIL BANKING .......................................................................................... 16

DEPOSIT ACCOUNTS ........................................................................................... 16

Current Account ................................................................................................. 16

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 Savings Account ................................................................................................ 16

Foreign Currency Account ................................................................................. 17

Saving 365 Gold ................................................................................................ 17

Smart Dollar Account ........................................................................................ 17

Special Term Deposits ....................................................................................... 17

Business Accounts ............................................................................................. 17

Saving Xtra Account .......................................................................................... 17

Current Life Account ......................................................................................... 18

Mahana Khushali Bachat ................................................................................... 18

MCB BANCASSURANCE ..................................................................................... 18

MCB’S REMITTANCE ........................................................................................... 19
MCB LOAN PRODUCTS ....................................................................................... 19

Car4U ................................................................................................................. 19

Business Sarmaya .............................................................................................. 19

Pyara Ghar ......................................................................................................... 19

Easy Personal Loan ............................................................................................ 19

Instant Finance ................................................................................................... 20

MCB RUPEE TRAVELERS CHEQUE .................................................................. 20

MCB ONLINE SERVICES ..................................................................................... 20

ATMs ................................................................................................................. 20

Call Center ......................................................................................................... 20

Mobile Banking ................................................................................................. 21

Bill Payments ..................................................................................................... 21

Online Banking .................................................................................................. 21

MCB CARDS........................................................................................................... 21

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 Smart Card ......................................................................................................... 21

Debit Card .......................................................................................................... 22

Visa Credit Card ................................................................................................ 22

MCB INVESTMENT BANKING ........................................................................... 22

ISLAMIC BANKING .............................................................................................. 22

Deposit Schemes ................................................................................................ 22

Fund Based Facilities ......................................................................................... 23

Ijarah Products ................................................................................................... 23

Types of Ijarah ..................................................................................................... 23

Murabahah ......................................................................................................... 23

Musharika Equipment ........................................................................................ 23

PRIVILEGE BANKING .......................................................................................... 23

Vision Statement: ......................................................................................................... 24
Mission Statement........................................................................................................ 25
Core Values .................................................................................................................. 25
Integrity .................................................................................................................... 25
Innovation................................................................................................................. 25
Excellence ................................................................................................................ 25
Customer Centricity ................................................................................................. 25
Respect ..................................................................................................................... 26
Business Processes ....................................................................................................... 26
ORGANIZATIONAL STRUCTURE OF THE BRANCH ......................................... 26
Departmental function ................................................................................................. 26
Opening of New Account......................................................................................... 26
Procedure for Account Opening .................................................................................. 28
Application Form: .................................................................................................... 28
Specimen Card: ........................................................................................................ 28
Basic Banking Account ............................................................................................ 28
Current account ........................................................................................................ 28
Business account ...................................................................................................... 29

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 Saving account ......................................................................................................... 29
Gold 365 account ..................................................................................................... 29
Foreign exchange account ........................................................................................ 29
Term account ............................................................................................................ 29
SWOT Analysis of the Industry ................................................................................... 29
STRENGHTS ........................................................................................................... 29
WEAKNESSES ....................................................................................................... 30
OPPORTUNITIES ................................................................................................... 30
THREATS ................................................................................................................ 31
SWOT Analysis of MCB ............................................................................................. 32
Strength: ................................................................................................................... 32
Weaknesses: ............................................................................................................. 32
Opportunities: ........................................................................................................... 33
Threats: ..................................................................................................................... 33
Recommendations ........................................................................................................ 33
Conclusion ................................................................................................................... 36
Bibliography ................................................................................................................ 37
Appendices ................................................................................................................... 38

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 Introduction

A bank is a financial institution that offers the widest range of financial services.
These financial institutions play a vital role throughout the world’s economic system.
Bank can define as:

A financial intermediary and a dealer to create credit bank or banker is a dealer in

credit or more properly a dealer in money. It is an intermediate party between the
borrower and the lender. It borrows from one party and lends to another.

The system of common settlement of receipts and payments have been derived from
the school of thought of the ancient “Romans” temple banking, to develop trade and
trading relations with each other nations. Banks are of different types. The term
“Commercial Banking” is a throwback of commercial loan theory. The theory holds
that the bank assets (except for cash) should consist exclusively of commercial loans
that are short-term loan to businesses to financing the production and transportation of
goods.

Among the services provided by the commercial banks, two services are very
important;

 Accepting deposit

 Lending loans

Other functions include safekeeping of valuables, financial advising, cash

management, offering trust service, selling insurance policies, retirement plans and
offering security brokerage services, etc.

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 Banking Industry
Banking sector is always a very important sector for every economy. Same is the case
with Pakistan. Banks perform various duties which are dissimilar in nature. The
primary and most important duty is to provide a safeguard for national assets. Other
functions include profit making from the public funds (on interest rates) and lending
of money to the borrowers. The whole of the economy and financial transactions are
carried out through banking institutions these days. Banking system in Pakistan is one
of the sectors, which have developed a lot in the past few years. Pakistan today has a
very good banking network in all over the Pakistan comprising of a State Bank, which
is a federal entity and has a central role in the banking sector of Pakistan. State bank
has a very wide range of various private and national commercial and other banks that
deal in specific areas such as consumer finance, agriculture and other financial
institutions. State bank also regulate banking sector through its policies and physical
inspection. However Banking System of Pakistan has adopted rough and tough
policies.

Pakistan on the time of its creation i.e. in 1947 did not have a good banking system in
it. Pakistani banking sector portrayed a marvelous performance in first two decades
and got a good banking system. State Bank of Pakistan was constituted on 1st July
1948. The role of central bank is to regulate, observe and monitor and control the
activities and all operations of all the commercial banks in Pakistan. State bank of
Pakistan has many a set of regulations which are to be followed by all other banks in
the country these regulations are called “Prudential Regulations.” Prudential
Regulations are updated time to time to ensure the implementation of the current
scenario.

Other important banking decisions such as discount rates and minimum reserves
which must be maintained by every bank are also made by the state bank of Pakistan.
State bank also hold the federal reserve of the county and also lends money to the
government and other commercial banks in the country. One of the bad patches in the
history of Pakistani banking industry was the Zulfiqar Ali Bhutto’s era. He decided to
nationalize all the private banks. After nationalization of banks their efficiency was
severely affected. They became the victims of political interference and pressures.

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This became a reason of the lowering nation’s currency of Pakistan and due to the
devaluation in the currency balance of payments was severely hurt.

Now Pakistani banks are prospering and providing very good customer services to its
customers like online banking and mobile banking etc. ATM cards and debit and
credit cards have entirely changed the banking experience in the country. Now there
are more private banks than government banks and they all are working well. Pakistan
has the one of worlds’ strongest banking system which has a sound stand from the
recent world crisis of banking system in America and other European countries.

The strongest bank in the United States will survive only so long as the people will
have sufficient confidence in it to keep their money there

Introduction of MCB:

History of MCB:
This bank was inaugurated under companies’ act 1913 on 9thJuly 1947 at Calcutta.
But due to revolutionary scenario of the region, the certificate of incorporation was
issued on 17thAugust 1948 with a delay of almost 1-year; the certificate was created
at Chitagong. The initial Head office of the company was incorporated at Dacca and
Mr. GM Adamjee was appointed its first chairman. It was incorporated with an
authorized capital of RS.15million.

After some time the registered office of the company was moved to Karachi on
August23rd, 1956 through a special resolution, then the Head office of MCB was
shifted to Islamabad in July 1999 and Head office was termed as Principal Office.

Nationalization of MCB:
This institute was nationalized with other on January 1st, 1974. At that time it had
506 branches and deposits amounting to Rs.1.640 m. Although MCB had a reputation
of a conservative bank but nationalization also left its effects on this institute as well
and by end of year 1991 in which it was privatized the total number of branches were
1.287 and deposits amounting to as high as Rs.35,029 m.

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Privatization of MCB:
When privatization policy was announced in 1990, MCB was the first to be privatized
upon recommendations of World Bank and IMF. The reason for this choice was
the better profitability condition of the organization and less risky credit portfolio
which made'' it a good choice for investors. On April 8th, 1991, the management
control was handed over to National Group

(The highest bidders). Initially only 26% of shares were sold to private sector at
RS. 56 per share.

MCB Then and Now

MCB Bank Limited, with more than 60 years of experience as one of the leading
banks in Pakistan, was incorporated on July 9 in 1947. The bank has journeyed
remarkable tenure of more than half a century of competitively edged and well
positioned heights of success by deploying quality banking, heads on technological
developments, professionally leading management and prudent and ethical work
methodologies. MCB was nationalized along with other private banks in 1974 as part
of Government of Pakistan's economic reform movement and was later privatized to
Nishat Group lead consortium in 1991.

Since privatization, MCB's growth has been phenomenal. Today, MCB in one of the
largest foreign banks in Sri Lanka, the first bank in Pakistan to launch Global
Depository Receipts (GDR) in 2006, has strategic foreign partnership with Maybank
of Malaysia which holds 20% shares in MCB through its wholly owned subsidiary
Mayban International Trust (Labuan) Berhad since 2008, has international indirect
regional presence in Dubai (UAE), Bahrain, Azerbaijan, Hong Kong and Sri Lanka
and serving through a domestic network of over 1,150 branches and over 690 ATMs
across Pakistan with a customer base of 4.96 million (apprx.)

MCB is reputed as one of the soundest financial institution and as one of the leading
banks in Pakistan with a deposit base of PKR. 545 bln (apprx.) and total assets of
PKR 766 bln (apprx.). The bank is versed as one of the oldest and most responsible
banks in Pakistan and has played pivotal role in representing the country on global
platforms while being one of the few institutions that are recognized and traded in the
international market.

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The bank has also been acknowledged though prestigious recognition and awards by
Euro money, MMT, Asia Money, SAFA (SAARC), The Asset and The Asian Banker.

Nature of Organization
MCB Bank Limited is a banking company incorporated in Pakistan and is engaged in
commercial banking and related services. The Bank’s ordinary shares are listed on all
the stock exchanges in Pakistan whereas its Global Depository Receipts (GDRs)
representing two ordinary shares are traded on the International Order Book (IOB)
system of the London Stock Exchange. MCB Bank Limited is a Pakistan-based
company. The Bank operates in four business segments:

• Corporate finance

• Trading and sales

• Retail and consumer banking

• Commercial banking

CORPORATE FINANCE
Corporate finance includes underwriting, securitization, investment banking,
syndications; initial public offerings (IPO) related activities (excluding investments)
and secondary private placements.

TRADING & SALES

Trading & sales segment includes fixed income, equity, foreign exchange
commodities, lending’s to financial institutions and brokerage debt.

RETAIL & CONSUMER BANKING

Retail & consumer banking includes retail lending and deposits, banking services,
private lending and deposits, banking services and retail offered to its retail customers
and small and medium enterprises.

COMMERCIAL BANKING
Commercial banking segment includes project finance, export finance, trade finance,
leasing, lending, guarantees and bills of exchange relating to its corporate customers.

MCB is one of the leading banks of Pakistan. Its deposit base is of Rs. 368 Billion and
total assets over Rs.500 Billion. MCB soon earned the reputation of a solid and

13
conservative financial institution managed by expatriate executives. In 1974, MCB
was nationalized along with all other private sector banks. The Bank has a customer
base of approximately 4million, a nationwide distribution network of over 1,000
branches and over 450 ATMs in the market during the last fifteen years, the Bank has
concentrated on growth through improving service quality, investment in technology
and people, utilizing its extensive branch network, developing a large and stable
deposit base.

Number of Employees

Board of directors
Mian Mohammad ManshaChairman Non-Executive Director
S. M. MuneerVice Chairman Non-Executive Director
Tariq Shahzad Non-Executive Director
SaleemSarmad Non-Executive Director
Amin Aftab Non-Executive Director
Ahmad Khan Non-Executive Director
MianRazaMansha Non-Executive Director
MianUmerMansha Non-Executive Director
Dato’ Seri Ismail Shahudin Non-Executive Director
Ahmad AlmanAslam* Non-Executive Director
Muhammad Ali Zeb Non-Executive Director
MohdSuhail Amar Suresh Non-Executive Director
Imran MaqboolPresident & CEO Executive Director

Audit Committee
Ahmad AlmanAslam* Chairman Non-Executive Director
Tariq Rafi Non-Executive Director
Aftab Ahmad Khan Non-Executive Director
Dato’ Seri Ismail Shahudin Non-Executive Director

Chief Financial Officer

Salman ZafarSiddiqi

Company’s Secretary
Fida Ali Mirza

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 MCB Product Line

MCB CORPORATE FINANCING

MCB Corporate Financing provides access to diversified financing options, including
working capital loans, term loans, trade finance services and investment banking.

Working Capital Loans

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

Term Loans

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

Trade Finance Services

Under Corporate Banking MCB offers trade finance services that include an entire
range of import and export activities including issuing Letters of Credit (L/Cs),
purchasing export documents, providing guarantees and other support services.

Cash Management

Cash Management provides a wide range of value added services to large

corporations through its vast network of online branches. Our structured and
customized products enable our customers to realize their sales proceeds swiftly from
all over the country, supported by real-time MIS.

Transaction Banking Division

Transaction Banking provides wide range of value added services to large

corporations through its vast network of real-time online branches network. Our
structured and customized products enable our customers to realize their sales
proceeds swiftly from all over the country, supported by real-time MIS.

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The basic products offered by Transaction Banking Division are as under:

• Collections

• Payments

• Channel Financing

• Local Rupee Drawing Arrangement

• Home Remittances

MCB RETAIL BANKING

DEPOSIT ACCOUNTS

Current Account

MCB Bank offers a variety of current accounts to cater to the everyday transactional
needs of various customers. These accounts ensure ease and freedom to bank from
any of the 1,100 branches across the country. The different accounts include: the basic
account that has no minimum balance; Business Account offering free online
transactions, Demand Drafts,

Pay Orders and lots more to meet the day to day business requirements; Current Life
Account which offers the security of life insurance free of cost; and for all the others
the conventional Current Account.

Savings Account

It offers a wide array of savings products that suit short term growth & transactional
needs. Our savings accounts offer attractive profit rates as well as flexibility to
transact. Savings Extra is targeted for customers having Rs. 5 million deposit, 365
Gold offers profit rate on daily balance while PLS savings has a lower minimum
balance requirement. In addition, a unique product: Smart Savings is an account run
solely via a debit cart, offering a very competitive rate to small savers.

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 Foreign Currency Account

Enjoy the confidence of operating an international account, locally. MCB Foreign

Currency Account offers the option of earning attractive returns on your Foreign
Currency Investment.

Saving 365 Gold

MCB Savings 365 Gold Account offers you a wide range of attractive profit rates.
The MCB

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

Smart Dollar Account

MCB Smart Dollar Account is a sensible way to maintain or grow your US Dollar
deposit across USD Current, Savings or Term Deposits.

Special Term Deposits

With a wide range of choices and tenors, you can open one or more term deposit
accounts that best suit your current or long term needs MCB Term Deposits offer
attractive short to mid-term investment options with flexibility, convenience and
security. With various tenor options available customers can choose one that suits
their needs. This is combined with different profit payout options and the added
facility of being able to avail credit facility against their deposits.

Business Accounts

MCB Business Account lets you build your business through the accrued savings
from discounted transaction fees, and more

Saving Xtra Account

MCB Savings Xtra Account offers you a wide range of attractive profit rates. Grow
with MCB Xtra by saving more and earning greater profit.

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 Current Life Account

The coverage you need for the life you lead. MCB Current Life gives you the peace of
mind of comprehensive life insurance in a current account and fits right into your
lifestyle

Mahana Khushali Bachat

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

MCB BANCASSURANCE
Combining the best of banking and insurance solutions, MCB Bancassurance has
created a one-stop shop for all your financial and insurance needs. Whether you want
to save for your child’s education or marriage, for the security of dignity after
retirement or gaining maximum return on savings, MCB Bancassurance has a plan
just for you.

• Flexi Life

• Life Partner

• Edu Care

• Dream Wedding

• Capital Sure

• Retire Easy

• Income ax

• Future Assure

• Protection Plan

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

MCB Home Remittance provides a seamless inflow of foreign remittances credited in

the beneficiary’s account within minutes. Cash payments can also be made at our
designated branches on behalf of Xpress money, Samba (Speed cash now) and Money
Gram, along with cash payments from other correspondents all over the world.

MCB LOAN PRODUCTS

Car4U

MCB Car4U not only gets a car of your own choice but is also affordable with
competitive mark-up, flexible conditions, easy processing and above all, no hidden
costs.

Business Sarmaya

Good cash flow is the key to any successful business. MCB Business Sarmaya offers
running finance facility against your house/ flat, insuring a steady cash flow for your
business.

Pyara Ghar

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

Easy Personal Loan

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

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 Instant Finance

With MCB instant Finance get a loan instantly at any MCB branch against liquid
collateral at competitive pricing.

MCB RUPEE TRAVELERS CHEQUE

It is a safe and secure way to make payments nationwide. MCB Rupee Travelers
Cheque, being the market leader, is the most widely accepted way to pay cash for
travel-related purposes MCB Rupee Traveler's Cheques were first introduced in 1993
as safe cash for traveling and travel related purposes.

MCB ONLINE SERVICES

ATMs

MCB has one of the nation's largest ATM networks with over 450 ATMs and still
growing. MCB ATMs give you 24-hours convenience of cash withdrawal, mini-
statement, utility bill payment, funds transfer services and much more. With MCB
Mobile ATM not only do we provide you with world class banking service but we
also provide convenience. Our innovative mobile ATMs ensure that you are given
service close to you.

Call Center

The state of the art MCB call center is the right choice to keep you in step with your
ever hectic schedule by providing you services relating to your account and Smart
card at any point in time.

There’s no easier way to bank than the new enhanced 24/7 MCB Call Center, which
blends innovation and convenience to provide Banking Services that go beyond
expectations. With MCB Call Centre you can maintain your VISA credit &
ATM/Debit cards, check your account balances, confirm last 5 transactions, pay
utility & mobile phone bills, top-up your mobile, pay MCB Visa Credit Card bill from
your MCB account, transfer money within your own accounts in MCB and register
complaint.

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 Mobile Banking

At the forefront of technological excellence, MCB proudly introduces MCB

MOBILEBANKING. MCB Mobile is a quick easy and secure way to recharge mobile
phones, transfer money, pay bills and do much more.
No need to visit a branch or an ATM anymore, login to www.mcbmobile.com using
your mobile phone and start transacting.

Bill Payments

MCB easy bill pay offers unmatched convenience to pay your utility and mobile
phone bills or re-charge your prepaid mobile phone accounts anywhere, anytime with
security and peace of mind. MCB is the only bank that offers you 3 convenient
options of making bill payments to PTCL, SSGC, SNGPL, KESC, Mobilink, Super
net, IESCO, HESCO, and Ufone. So, save your precious time by avoiding long
queues and pay your bills through MCB Easy Bill Pay.

Online Banking

MCB has a fast growing network of over 1,100 online branches in the country
providing customers real time online transaction facilities.

MCB CARDS

Smart Card

MCB Smart Card is the key that enables access to convenient banking services. Smart
Card allows you to manage your account, withdraw cash, transfer funds, pay utility
and mobile bills, and recharge prepaid connections and register for mobile and
internet banking services and much more. The convenience and flexibility of MCB
Smartcard will help you live a smarter life. It not only helps you manage your
expenses, but also eliminates undue interest on your day to day credit card
transactions. Your balance is always within your reach and you spend accordingly.
MCB now brings MCB Smartcard-a secure and convenient instrument of payment
with unmatched functionalities. It provides 24-hour direct access to your bank
account.

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 Debit Card

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

Visa Credit Card

MCB offers a complete suite of Classic, Gold and Platinum Visa Credit Cards
focusing on providing, superior service, travel privileges & shopping pleasure. It also
offers comprehensive insurance & installment plans, reward points and SMS alerts
that give a different feel to the world of Credit Cards. These unique features include i-
revolve, which makes variable mark-up rate available to customers allowing them to
repay at affordable rates.

MCB INVESTMENT BANKING

Make the most of your wealth with investment opportunities that match your unique
financial aspirations. MCB Investment Services offer distribution of mutual funds
managed by the leading fund managers of Pakistan. We can suggest the products most
suited for your needs, or work with you to create a personalized solution completely
focused on your expectations of the capital markets MCB goal is to provide best
financial solutions to client helping them achieving their objectives and support
economic growth of the Country.

ISLAMIC BANKING
With the help of Shariah specialists, lawyers and professional commercial bankers,
MCB Islamic Banking provides Riba Free and Shariah Compliant solutions to various
customer segments in a growing number of cities.

Deposit Schemes

For customers who are looking for a deposit opportunity where they can purse their
funds and reap halal returns on it, MCB offer the following products:
Al-Makhraj Saving Account
Al-MakhrajIanat Account
Al-Makhraj Term Deposit

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 Fund Based Facilities

MCB offers 3 broad Islamic fund based facilities: Ijarah Murabahah

Diminishing Musharika Equipment

Ijarah Products

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

Types of Ijarah
Car Ijarah
Equipment Ijarah

Murabahah

It is a contract between a buyer and a seller under which the later first purchases the
goods at the request of the former i.e., customer and then sells it to same customer
after adding profit. Murabah Sale Price = Cost + Expenses incurred + Agreed Profit

Musharika Equipment

It is a contract through which the bank and its client participate in the joint ownership
of a property. The share of the Bank is further divided into a number of units and it is
agreed that the client will purchase the bank’s share periodically, thus increasing his
own share until all the units of the bank are purchased by him so as to make the client
the sole owner of the property.

PRIVILEGE BANKING
A first from a local bank, MCB Privilege through its dedicated, world class Privilege
Centers offers a higher level of personalized services, more rewarding in-branch

23
experiences and a wide array of deposit and investment products that are tailored to
meet the financial expectations for affluent clientele. Members of MCB Privilege,
customers experience unparalleled advantages that put them ahead of others. MCB’s
dedicated Privilege Centers wait to welcome you in Karachi, Lahore, Islamabad and
Multan, with plans to expand to more locations.
OTHER SERVICES

MCB MNET

MNET is an electronic inter-bank connectivity platform for online transactions on

ATM and other remote banking channels. It offers other Value Added Services that
include a portfolio of e-banking and payment system products as well as management
and day-to-day operations of the same. Members include 10 local and foreign
financial institutions enjoyingATM sharing and Value Added Services.

MCB Salary Club

A payroll solution designed to make life easy; it simplifies all the monthly payroll
related banking needs of employers and opens the door to a world of special offers for
employees. Salary Club provides the convenience of having an extensive range of
financial services available to employees at their place of work.

MCB Lockers

MCB Lockers are the best protection for your valuables. Lockers of different
capacities are available nationwide.

MCB SMS Banking

Banking at your fingertips SMS anytime to gets information regarding balance, in

statements and credit card related information once your card is linked.

MCB Full Day Banking

Enjoy the convenience of extended banking hours from 9am to 5pm, including
Saturday’s atMCB FULL Day Banking branches across the country.

Vision Statement:

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“To be the leading financial services provider, partnering with our customers for a
more prosperous and secure future”. (Vision Mission Statement, 2015)

Mission Statement
“We are a team of committed professionals, providing innovative and efficient
financial solutions to create and nurture long-term relationships with our customers.
In doing so, we ensure that our shareholders can invest with confidence in us”.
(Vision Mission Statement, 2015)

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.

(Core Values, 2015)

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.

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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.

Business Processes
MCB bank limited has one of the largest chains of branches in Pakistan.

It has 1150branches, offering unique and innovative financial solutions to large

portfolio of investment, corporate and consumer banking customers

MEDIOCRE LEVEL MANGEMENT

The organization chart within a department and in different offices as follows:
Divisional Heads ………..…………………… Head Office
Regional Head (EVP) ………..……………… Regional Office
Zonal Head (VP) ………..…………………… Zonal Office
Branch Manager ………..…………………… Branch (VP, AVP, GRADE 1, 2, 3)

ORGANIZATIONAL STRUCTURE OF THE BRANCH

A well-developed and properly coordinate structure is an important requirement for
the success of any organization. It provides the basic framework within which
functions and procedures are performed. Any organization needs a structure, which
provides a framework for successful operations. The operation of an organization
involves a number of activities, which are related to decision making, and
communication of these decisions. These activities must be well coordinated so that
the goals of the organization are achieved successfully

Departmental function

Opening of New Account

To open an account, following things are required:

 Account opening form

 KYC forms

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  ID card copy

 Nadraverisys that means NADRA verification system which verifies person’s

ID, address, signature etc. Print out of that nadraverisys is also attached with
account opening form. Nadra charges 50 rupees per verification.

 If the signature of any person differs from his ID card then an undertaking is
taken from the client that he would do this sign on the cheques different from
the ID same as given to bank on specimen card and declaration form

Opening of new account is the establishment of customer banker relationship. In this

regard the customer can open

 Basic Banking account

 Current account

 Savings account

 Foreign currency account

 Smart dollar account

 Saving 365 Gold

 Special rupee term

 Business Account

 PLS Savings Xtra

 Current Life account

 Smart savings

These accounts can be categorized as follow;

 Individual

 Firm’s

 Company

 Trust

 Salaried person

 Other

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After a client has opened his/her account with bank he/she can deposit money at any
time, if the customer does not maintain the minimum balance in his or her account he
or she has to pay the charges.

Procedure for Account Opening

Application Form:
The customer who likes to open an account is required to meet with the PBA or
second officer, who after taking all information about him gives him an
“APPLICATION FORM” specifically used for account opening having parrot green
and white color, Either customer can take away form at home to fill in and return to
bank or PBA fills in form in presence of customer by asking him information required
in form, second practice is usually followed in bank.

Specimen Card:
This card contains three signatures of an applicant, applicant A/c no, A/c type, branch
code, title of A/c, it will be attached with an application form. Banker uses this card
at the time when he receives the cheque; it compares customer’s signature with the
signature on the cheque for avoiding fraud. Manager has every right not to accept this
contract if he is not satisfied by the details provided by the customer. Signatures of
customer are scanned and saved along with account detail of customer.

When account is opened customer can operate its account after getting cheque book.

Basic Banking Account

Basic banking account is also known as BBA account. In order to facilitate and
provide basic banking facilities to the low income people in Pakistan, it has been
decided that all commercial banks operating in Pakistan will introduce Basic Banking
Accounts.

Current account
MCB Bank offers a variety of current accounts to cater to the everyday transactional
needs of various customers. These accounts ensure ease and freedom to bank from
any of the 1,100 branches across the country.

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Business account
MCB Business Account lets you build your business through the accrued savings
from discounted transaction fees, and more.

Saving account
MCB Savings Account offers you one of the most suitable ways to manage your hard-
earned money. So start saving and earning profit today.

Gold 365 account

MCB Savings 365 Gold Account offers you a wide range of attractive profit
rates.

Foreign exchange account

MCB Foreign Currency Account offers you the option of earning attractive returns on
your Foreign Currency Investment.

Term account
With a wide range of choices and tenors, customer can open one or more term deposit
accounts that best suit your current or long term needs

SWOT Analysis of the Industry

STRENGHTS
• Large Market Size and attractive location for exports to South Asia, Central Asia
and Middle East.

• A large emerging middle class with growing demand for consumer durables, autos,
services

• English speaking educated and trainable manpower with aptitude for fast learning

• Self-sufficiency in food production and a buoyant agriculture.

• A liberal foreign exchange regime which allows un-restricted repatriation of profits,

dividends and remittances.

• Quantitative restrictions on imports have largely been removed and tariff rates being
brought down to maximum rate of 25% with average incidence of 14-15%.

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• Financial Sector is open to foreign investors is diversified and has been strengthened
in the last three years.

• Capital markets offer a range of instruments for raising domestic finance.

• A fiber optic backbone infrastructure up and running for Information Technology

enabled services.

WEAKNESSES
• Poor governance record in the nineties with serious adverse consequences for
efficiency and equitable distribution of growth.

• Failed democratic regimes with frequent changes in government in the last decade
have nurtured political uncertainty, discontinuity and inconsistency in policy
implementation.

• Lingering dispute with the Hubco and freezing of foreign currency accounts in May
1998 have shaken foreign investor confidence.

• Key economic institutions have been in a state of financial and management disarray
creating strains on public finances as well as banking system.

• Bureaucratic procedures and enforcement of contracts are slow, time consuming and
cumbersome encouraging lobbying and rent-seeking opportunities.

• Public service delivery of essential services is poor and inefficient and under
investment has led to congestion, shortages and access limited to the privileged far.

• Non-governmental Organizations (NGOs) have not so far played a major role in

social development and Micro Credit allocation to the poor.

OPPORTUNITIES
• Oil and Gas resources: To be further explored, developed and distributed.

• Investment in Physical Infrastructure Development: Open to private sector to

meet the growing demand in the areas of power, highways, ports, airports etc.

• Information Technology: Relatively low cost manpower available with ample

scope for investing in Information Technology Education.

30
• Agriculture: Productivity still behind production possibility frontier and requires
technical and financial inputs.

• Agro-based Processing and Industries: Highly Competitive and oriented towards

Exports but still in state of infancy and need to be up scaled.

• Value added exports in textile sector: Has plans to modernize its textile industry
for capturing world market share and positioning in post MFA period through
technology, marketing and design improvements and investment in machinery.

• Financial Sector: Deepening to improve the mobilization and allocation of financial

resources.

• Exports in non-traditional commodities: Fisheries, Gems and jewelry, Fruits and

Vegetables, Information Technology, are still underutilized.

• Privatization: Public Sector assets worth $ 3-4 billion are available for sale to
strategic investors including foreign investors.

• Non-Resident Pakistanis: Offer a large and rich reservation of talent, skills and
capital for joint venture partnerships.

THREATS
• External and Domestic Debt burden is quite high relative to the capacity to service
and need to be reduced to manageable levels.

• Tax-GDP ratio is one of the lowest among the developing countries and resource
mobilization effort has to be stepped up.

• Fiscal deficits have been traditionally high and need to be gradually narrowed down.

• Public Sector Corporations riddled with excess manpower, poor management and
weak financial base have to be restructured and strengthened.

• Incidence of poverty has risen during the last decade and poverty targeted
interventions need to be accelerated.

• Stagnation in Domestic and foreign investment during the last several years has
increased and given rise to educated unemployment

• High degree of centralization had eroded provincial autonomy and local government
capacity both of which need to be enhanced and strengthened.

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 SWOT Analysis of MCB

Strength:
MCB is the first Pakistani privatized bank and because of its quality management,
marketing, innovation in products and services. Owing to all such factors they have
established a good reputation in the banking market.

Some major points of its strengths are as below:

 Branch network all over Pakistan with each and every financial facility.

 Increase in total assets of the bank.

 9-5 nonstop banking services.

 MCB has the largest number more than 1150 branches

 Listed at London Stock Exchange

 It has the largest network of ATM’s machine Over 690 MCB ATMs. And
Over 6000 ATM Nationwide

 It has the highest deposit reserves, which makes it financially strong

 MCB has the widest range of products & services to be offered to its clients

 It is the only bank having Privilege Banking

Weaknesses:
Some major points of its weakness are as below

 The Miscellaneous expenses of the banks are rising day by day and it has
created extra burden on the top level to get a hold of them.

 Employees are overburdened due the work load from both sides.

 Offering lower rates on deposits as compare to market.

 There is a high degree of centralization in the bank.

 Many branches existing in commercial area are facing the problem of Parking,
which is causing customers inconvenience

 Lack of heavy advertisement

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Opportunities:
Although MCB is among the most stabilized banks in Pakistan, but still there is room
for improvement in it

 To hire best skilled professionals from the market.

 MCB could increase its branch network to under developed areas of Pakistan.

 Introduction of various new products.

 Islamic Banking as it has become an increasing trend now a day so it should

make and grow its Islamic banking branches.

 It must get its network corrected facing often link down

Threats:
External threats arise from political, economic, social, technological forces.
Technological developments may make bank’s offerings obsolete.

Some major points of its threats are as below

 Threat from New entrant and lot of existing banks in the country

 Restrictive policies from SBP

 Customers are leaving Bank due to its offline system problem

 Instability and inconsistency in the governmental policies.

Recommendations
Following are some of the suggestions and recommendations that I want to give on
the basis of shortfalls / weaknesses found in the bank.

The target rate of return on assets (ROA) of commercial banks reflects the

effectiveness and efficiency of the use of resources is the embodiment of its operating
efficiency and management level of the important comprehensive index. Emphasis on
return on assets, and continuously improve the return on assets and achieve an
operating profit maximization should be the primary objective of Muslim commercial
bank.

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 A strong ROE is a solid signal that management is doing a good job of generating

returns for shareholders' investments. Active capital management activities will

provide better ROEs. Bank that manages larger reserves due to recent or future
investment projects will stymie their ROEs. Another determinant of the ROE is the
operating profit margin of banks. Recently, this tends to converge towards noninterest
income as net interest margins tend to cause net interest income to be squeezed over
time due to rising competition. Muslim Commercial Bank should enable to raise their
operating profit margins can smoothly enhance their ROEs.

Loans with higher returns will produce better profit opportunities. Alternatively, may
diversify earnings through transaction and recurring non-interest income activities.
MCB’s can expand more differentiated products, such as wealth management and
insurance to improve their ROE position.

The Bank's controlled budgeting and diligent monitoring on operating expenditure

block. Effective monitoring at management level ensured managed increase in

administrative charge within the approved budgetary limits.

MCB’s lead over rivals if they more emphasis on its aggressive investment strategy

and capital strength, the investments may bolster MCB’s.

Better managed expense-to-income ratios will then produce higher operating profit

margins. Banks that use capital more efficiently will have better financial leverage
and thus, higher ROEs. A higher financial leverage multiplier would show that banks
are able to leverage on a smaller base of stakeholders funds to produce interest-
bearing assets that optimize earnings.

Efficient cost-control procedures may limit the growth of operating expenses leading

to higher operating profit margin. Banks poorly managed their operating expenses.
Further improvement may be necessary to enhance ROE development.

MCB Islamic Banking needs a research, which should be engaged in evaluating and

interpreting the ways in which the bank can flourish more and more.

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 In Agriculture loan Sector, MCB mainly serving in Punjab province. Agriculture

loans facility should be provided to all other provinces of Pakistan as well.

The bank should emphasis on the organization of effective training and development

programs for its new as well as existing employees so that these are gradually updated
regarding the recent developments in the field of banking.

35
 Conclusion
The banking system, as a whole, remains healthy despite the economy going through
a period of economic difficulty. The banking sector absorbed the build-up of non-
performing loans in the system while maintaining profitability and robust balance
sheets. Much of the credit for this must go to the SBP for the policies it has pursued
over the last decade to ensure that banks are adequately capitalized and adhere to
prudent risk management.

I did my internship in MCB Bank Ltd (P.I.A society BRANCH-1522), to acclimatize

myself with the banking environment. This training program had helped me to get
aware of the real working life in an office. The staff of the bank cooperated with me.
Each and every one of my supervisors invested a lot of his/her energy and time in me
and made it a total learning experience for me.

The internship experience at MCB Bank is an eye opening experience. It gave me

knowledge of the practical life, how work is done and how it is important to work
with people and make people work for you.

By summing up I can say that the profits of MCB have grown considerably during the
last few years and this trend is expected to continue for the coming future. Therefore I
conclude that the MCB has very prosperous present and future, which assures the
shareholders of wealth maximization. Side by side of it I think that if bank would be
able to cover and control on the given recommendations then it would be in such a
situation that will really lead it towards the road of prosperity, development and
integrity. And by taking all precautionary measures that create any hurdle for the
bank, it would be able to compete with the competitors, at national level as well as at
international level.

36
 Bibliography
Annual Report. (2014). Retrieved from MCB LTD Pakistan:
https://www.mcb.com.pk/assets/documents/Annual-2014.pdf

Core Values. (2015, 08 12). Retrieved from MCB LTD Pakistan:

https://www.mcb.com.pk/about-mcb/core-values

Rana, A. (2013, July 04). Dunya Blogs. Retrieved from Dunya News:
http://blogs.dunyanews.tv/?p=6922

Vision Mission Statement. (2015, 08 12). Retrieved from MCB LTD Pakistan:
https://www.mcb.com.pk/about-mcb/vision-mission

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 Appendices
AWARDS AND ACCOLADES
2014 The Asset Triple A:
2014 The Asset Triple A:
2014 CFA 11th Excellence Awards:
2014 CFA 11th Excellence Awards:
2014 Asia money Awards
2014 The Asian Banker (USA)
2014 ICAP and ICMAP:
2014 SAFA:
2013 The Asset Triple A:
2013 The Asset Triple A:
2013 ICAP and ICMAP:
2013 LK Domain Registry Sri Lanka:
2013 Lanka Clear Pvt. Limited:
2013 SAFA:
2012 The Asset Triple A:
2012 Euromoney:
2012 NFEH:
2012 ICAP and ICMAP:
2012 World Finance:
2012 Pakistan Centre for Philanthropy:
2011 CFA Association Pakistan:
2011 CFA Association Pakistan:
2011 Euromoney:
2011 ICAP / ICMAP:
38
Best Bank - Pakistan
Best Domestic Bank - Pakistan
Best Bank of the year 2013 – Large Bank
Most Stable Bank of the year 2013
Best of the Best Domestic Bank
Strongest Bank in Pakistan 2014
1st - BCR Award 2013 - Banking Sector
1st Runner up - BCR 2013 in Banking
Sector Category
Best Domestic Bank - Pakistan
Best Islamic Deal
1st - BCR Award 2012 - Banking Sector
Best Website Award
T+1 Cheque Clearing Award
2nd Runner up ‐ BCR 2012 in Banking
Sector Category
Best Domestic Bank - Pakistan
Best Bank in Pakistan
CSR Business Excellence Award “Best
Media Coverage”
2nd Best Corporate Report Award 2011 -
Banking Sector
Best Commercial Bank - Pakistan
PCP Corporate Philanthropy Award
Most Stable Bank of the Year
Best Bank of the Year
Best Bank in Pakistan
1st - BCR Award 2010 - Banking Sector
2011 SAFA: Joint 2nd Runner-up for BCR 2010
2010 The Asian Banker: Strongest Bank in Pakistan
2010 The Asian Banker: Leadership Achievement Award
2010 MMT: Best Bank Led MMT Service
2010 ICAP / ICMAP: 1st - BCR Award 2009 - Banking Sector
2010 SAFA: Certificate of Merit Award for BCR 2009
2009 Asiamoney: Best Domestic Bank in Pakistan
2009 The Asset: Best Domestic Bank in Pakistan
2008 Euromoney: Best Bank in Asia
2008 Euromoney: Best Bank in Pakistan
2008 Asiamoney: Best Domestic Bank in Pakistan
2006 Asiamoney: Best Domestic Bank in Pakistan
2006 Euromoney: Best Bank in Pakistan
2005 Asiamoney: Best Domestic Bank in Pakistan
2005 Euromoney: Best Bank in Pakistan
2004 Euromoney: Best Bank in Pakistan
2004 Asiamoney: Best Domestic Bank in Pakistan
2003 Euromoney: Best Bank in Pakistan
2001 Euromoney: Best Bank in Pakistan
2001 Euromoney: Best Bank in Pakistan
2000 Euromoney: Best Bank in Pakistan
Organizational
Structure

Organizational
Chart

39
MEDIOCRE LEVEL MANGEMENT

40