Internship Report On MCB Bank Limited
Internship Report On MCB Bank Limited
University of Gujrat
City campus
ACKNOWLEDGEMENT
First of all thank the ALLAH ALMIGHTY, with whom blessing I have done my
Internship report. A number of people have help and support me for the successful
completion of my internship report.
After thanks to Allah, I would thank to all those peoples who have supported me during
the completion of my final report. I acknowledge the support of my supervisors who
provides me ideas about the preparation of the report. I would like to thanks the entire
staff of the MCB Bank Limited who help me and provide me the guidelines for the
completion of the report.
MCB Bank Limited provides different types of accounts and facilities , the selection of
account is depends upon the customers need and its requirements. The main deposit
accounts are Basic Banking Accounts, Current Deposit Accounts, Saving Accounts &
Term Deposit Accounts. All other products are derived from these accounts. In remittance
department different types of remittance instruments are used i.e Demand Draft, Pay
Orders & Pay in slips etc. Clearing function is also used in remittance department for
collect the proceeds from other banks and also from own bank branches. The clearing
function is used SBP (State Bank of Pakistan) clearing house with the help of NIFT
(National Institute of Facilitation Technology). Finance department gives business
finance to SME (Small & Medium Enterprises) and Corporate Businesses, consumer
finance to individuals and agriculture finance to farmers.
I have completely gone through the HR Department functions, roles and responsibilities.
I study the role of HR from hiring of personal to the benefits and retirement. MCB Bank
Limited has over 10,000 staff (Contractual and Permanent).
SWOT Analysis
Conclusion
Recommendations for improvement
Reference & Sources
Shahzad Saleem
Sarmad Amin
2007
2008
2009
2010
Total Assets
Share Capital
Investments
Deposits
Advances
Profit Before Tax
Profit After Tax
(Rs, 000)
410,485,517
6,282,768
113,089,261
292,098,066
218,960,598
21,308,035
15,265,562
(Rs, 000)
443,615,904
6,282,768
96,631,874
330,274,155
262,135,470
21,867,566
15,374,600
(Rs, 000)
509,223,727
6,911,045
167,134,465
367,604,711
253,249,407
23,154,945
15,495,297
(Rs, 000)
567,552,613
7,602,150
213,060,882
431,371,937
254,551,589
26,253,075
16,873,175
d. ADVANCES PRODUCTS:
The following are main advances products offered by MCB Bank Limited.
1. Running Finance Facility:
i.
ii.
iii.
iv.
ii.
iii.
iv.
3. Cash Finance:
i.
ii.
iii.
iv.
e. CMPETATORS:
The following are competitors of MCB Bank Limited.
1. Private Sectors Competitors Banks:
i.
ii.
iii.
iv.
v.
vi.
vii.
Summit Bank.
ii.
iii.
iv.
3. Foreign Banks:
i.
ii.
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2. ORGANIZATION STRUCTURE
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b) Number of Employees:
12
Numbers
Permanent Employees
9,583
57
9,640
Outsourced Employees
3,740
13,380
c) MAIN OFFICES:
Registered Office
MCB Building, F-6/G-6, Jinnah Avenue, Islamabad.
Principal Office
MCB 15 Main Gulberg, Lahore.
UAN: (042) 111-000-111
PABX: (042) 36041998-9
Website: www.mcb.com.pk
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ii.
iii.
Cash Department
ADVANCES DEPARTMENT
DEPOSIT / ACCOUNTS DEPARTMENT:
The commercial banks perform two main functions. It accepts deposit from general
public and advances loans. By the performing these functions, they earn profits. Deposit
department is one of the most important department and main department of the bank. It
performs the vital function in the bank because it deals with the supply of money to the
bank. Deposits are the inputs of a bank. Deposits department is just like a heat, as it
function other department also run, otherwise the whole system paralysis. In deposit
department the bank attract deposit by offering different deposit products, like saving &
term deposit accounts.
REMITANCES DEPARTMENT:
Remittance department of the bank performs the function of remitting or transferring of
funds i.e. to transfer funds for customers from one location to another. The transfer of
funds may be from one branch to another or from one bank to other Remittances mean
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15
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Training Program
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ii.
iii.
Cash Department.
3. Advances Department.
c) Detailed Description of all Departments:
A. Human Resource Department:
Human Resource functions are performed by the HR Division, Regional Office Gujrat. I
spent two weeks in HR Department to know the HR functions and roles. I go through the
selection process of employees used in different departments of the bank.
MCB Bank Limited, hires staff in two ways on e is from batch program (Fresh Induction)
and other is hiring experienced staff from other banks and also hires staff contractual staff
both in batches and experience stuff.
The fresh graduates are hired through MCB Batch Program. MCB needs staff in different
departments. The hiring program starts from advertisement in different news papers and
MCB on websites and different HR recruitment portals. After the received of thousands
of applications from fresh Graduates and Masters, the HR Departments are sorted out
merit wise and test is conducted. After completion of test interview are held in respective
staff colleges. Currently MCB Bank Limited has three staff colleges, Lahore, Islamabad
and Karachi. After passing out the interview the candidates and gone through
comprehensive pre-indention training program. This training program is purely on all
Banking departments in the class room and on the field. After completion of trainings, the
employees are posted at different departments.
In the second one hiring staff process is experience staff. The Regional Heads and
General Mangers asses the need of employee or need for replacement through the field
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To control the budgets and maintain the Accounts books of records for
budgetary control.
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Any person can open account with minimum deposit of Rs. 1000.
ii.
iii.
iv.
v.
All cheques and other instruments should be crossed before they are credit to the
account.
vi.
The bank would not require any prior permission from the account holder for
debiting his/her account for charging expenses, fee, commission, mark up etc
arising out of any dealing with the branch.
vii.
The account holder should maintain a minimum balance of Rs. 10,000 per month
otherwise, the bank deduct of Rs.50 per month account maintenance charge.
viii.
Account statements are provided to the depositors mostly half yearly intervals or
whenever required by him.
ix.
These accounts are completely exempted from zakat and with holding taxes.
x.
If the customer is not performed any transaction for the six month the account
automatically converted into dormant. After 3 years to inoperative account register.
To re-operate such account an application is written in the name of branch manger.
After ten year the if no transaction take place the amount laying in the account
slender to SBP (State Bank of Pakistan).
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II.
Savings accounts are used to save the money and earn profit. This saving account is
opened with a minimum balance set by each individual bank. There are usually
exceptions for minors such as a lower or no minimum balance to open. Saving accounts
are mostly opened by those types of customers whose baking transactions are not
frequent. They want to save money and earn profit on it. Normally lower and middle
income groups, small traders, professionals, farmers and other salaried classes usually
make such deposits to save small amounts to meet their needs. Funds can be deposited
frequently through cash, cheques, demand drafts, pay orders, telegraphic transfers and
other such instruments.
Features of Current Accounts:
Following are the main features are the current accounts.
i.
ii.
iii.
The deposits can be made individuals, trusts, charitable institutions and provident
fund.
iv.
Zakat on the amount of balance is deducted at shirah rates but zakat is not deducted
if declaration is given by the customer.
v.
vi.
III.
Basic banking Accounts are basic accounts of starting banking relationship. These
accounts are usually open students and low salary person. No account maintenance
charges applied if the account holder restricted to two deposits and two withdrawals. No
zakat is applicable on these accounts.
Features of Basic Banking Account:
Following are the main features are the current accounts.
xi.
The BBA account is opened with small initial deposit of Rs. 1,000
xii.
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xiv.
xv.
iv.
v.
vi.
These are basic accounts which are offered by MCB Bank Limited, from these products
the bank derive other products with augmented some benefits with the main products or
accounts. Bank also offers these accounts in foreign currency like Dollar, Pound & Euro.
Other accounts or products are as follows:
1. Smart Dollar Account.
2. Saving 365 Gold.
3. Business Account.
4. Saving Xtra Account.
5. Current Life Account.
6. Smart Savings.
7. Khushali Bachat Account.
2.
Inland remittances
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INLAND REMITTANCES:
Following are the main source of inland remittance used in banks.
1. Demand Draft (DD):
Demand Draft is a written order, drawn by one branch of a Bank upon another branch of
the same Bank, or upon other Bank under special arrangements to pay a certain sum of
money to or to the order of a specified person.
2. Telegraphic Transfer (TT):
Transfer of funds from one branch to another branch of same bank or another bank. It is
necessary that person for whom T.T is made has an account in the same bank. Special
codes are used for this purpose.
3. Mail Transfer:
Transfer of funds from one branch to another branch of same bank or another bank
through mail or courier service outside the country. If the person has not the account in
the same bank an advice is attached by the sending bank to shift the amount in the
concerned branch. In suspense account party will have to prove his identity.
4. Pay Order:
A pay order is an instrument used for the payment with in the city. The function of Pay
Order is same as demand draft, the only difference is that the demand draft is order to
other branch in other city to pay the certain amount, to person name mentioned on it.
Bank own expenses are also paid through Pay Orders.
CLEARING
Clearing is the function of settlement of banks receipts and payments with other banks.
The bank collects the cheques of other banks from their customer and presented through
clearing for honor and also received cheques from other bank for payment. This receipt
and payment is settled through the help of SBP (State Bank of Pakistan) and NIFT
(National Institute of Facilitation Technology) facilitate.
CLEARINGHOUSE:
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Following are the main tasks which are performed by me in different departments during
my internship in MCB Bank Limited.
I)
I.
Operations Department:
Account or Deposit Department:
During my internship training program, I spend two (2) weeks in accounts department, in
this department, I learn and gain practical knowledge about opening and closing of
accounts. I open every type of accounts (Current, PLS, Term) and every category of
accounts (Individual, Sole proprietor, Partnership and Company Accounts). I complete
the documents required for opening of accounts and learn the procedure to close the
account. Following is the detail about all task mention above.
Account Opening:
Under this section, I learned how to open an account and types of the accounts and
conditions to open the accounts. There are different customers and they want to open an
account which satisfies their requirements, so bank had provided the opportunity for the
customer to fulfill there needs and can open different types of accounts like current
account, PLS account, BBA account, foreign currency accounts, Business Accounts and
many more types of accounts. I open different types of account current, Profit & Loss
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Copy of National Identity Card of the person desiring to open the account.
Request letter on business letter head.
Copy of NTN or Business Prove.
Complete filling of the form.
Filling the Specimen signature Card with business name stamp.
Minimum opening balance is required.
I also examine the deposit slips like cash deposit slip, cheque withdrawal, online transfer
of money, utility bills slip which are presented by the different customers. Following are
the precautions which I learn to examine before forwarding.
clearly mentioned.
Cheques are signed by the directors, partners or employees of company,
drawn in favor of them and credited in their account in the bank are too
scrutinized.
Withdrawal of amount can be made at branch only in which account is
maintained. No third party can withdraw money. In current amount can be
withdrawn during banking hours anytime.
Issuance of Lockers:
Branch also offers Safe Deposit Lockers facility to their customers. The lockers are
invariably to be installed in the Strong Room of the Branch to ensure maximum security
against burglary, theft and riots. Each locker irrespective of its size has a separate number
and is fitted with a double key lock which cannot be opened except with the two keys,
one being Master Key under the custody of Operations Manager /Authorized Officer and
the other possessed by the customer.
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In the Remittance & Clearing department, I learnt different types of money transfer from
one place to another. Different types of methods are used to transfer money with a secure
means from one place to the other place.
Demand Draft
It is the instrument used to transfer the money from one city to another. The person who
wants to made payment to other person or business, he make a request to prepare a
demand draft. It is prepared on a written form. The beneficiary name, applicants name,
amounts in words and figures, purpose of transfer of money and services charges are
written on demand draft. It is made either for cash or through cheque. The bank is
charged commission on it.
Mail Transfer
The transfer of money in the shape of document from one place to another by mail is
called Mail Transfer. It is the safest and fastest mode for remittance. All other procedure
is same as demand draft.
Telegraphic Transfer
It is also an instrument used to transfer the money from one city to another. It is the
fastest transfer of money from one bank to another. The transfer is made on the behalf of
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ii)
afternoon to
other banks for clearing, which are presented by our account holder.
NIFT perform the function of clearing with in the city or area and also other cities. The
services of other cities are called Intercity Clearing. NIFT also provide the facility of
clearing cheques in same day called Same Day Clearing, in which the cheques are
cleared with in working day.
III.
Cash Department:
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CREDIT DEPARTMENT
In Advances Department, I learnt about the different credit facilities provided to the
customer by the bank. I prepare different types of credit proposals for fresh facilities and
for renewal of credit facility. I prepare credit customers stock statements and different
credit statements submitted to SBP and head office. There are three categories of
financing i) Corporate and SME ii) Agriculture Finance iii) Consumer Finance.
The basic principle of lending as follows:
The art of affording credit facilities is very intricate and the banker has to take various
factors into consideration. These considerations are:
1. Diversification:
2. Safety / Security:
3. Liquidity:
4. Profitability:
5. Desirability:
6. Customers character:
7. Customers capability :
8. Customers capital:
9. Project viability:
10. Credit Risk and Return:
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Running Finance:
In running finance facility the bank provides the facility to withdraw the amount from his
account up to the limit approved. The Running Finance facility is secured against the
mortgage of property. This facility is granted to meet the short term working capital
requirements. So the tenor of the RF facility is normally one year. I prepare the credit
proposals of different customers for fresh clients and renewal of existing facilities
running.
SPECIAL PRECAUTIONS
I learn that the bank ensures that:
Running Finance facility is not being used for long-term financing needs. In this
respect, the financing needs of a borrower should be ascertained with regard to
not breached.
The customer makes periodic adjustments, at least quarterly, unless otherwise
approved.
No disbursement is made against expired limit.
Documentation: Following documents are obtained at the time of disbursement of
credit facility.
Promissory note, duly stamped (IB-12)
Mark-up Agreement (IB-6)
Sufficient, tangible securities with or without collateral, realizable of stable
value with necessary documentation [e.g. Letter of Hypothecation (IB-25) /
IB-28 & IB-31 in case of Deposit Certificates, Shares / Securities etc.
For property including IB-22 or IB-24, etc.], and Adequate insurance, as
appropriate, covering assets charged in Bank's favor. The cost of insurance is
to be borne by the borrower.
Cash Finance:
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specific permission.
6. Approved Muccadums are hired and deputed, in accordance with Banks
Muccadumage policy.
Application Polices:
Draw down is allowed on receipt of goods for pledge. Drawing power is to be
determined, based on value of goods placed under pledge along with stipulated margin.
Finance is recovered on each delivery. Each drawdown is required to be adjusted within
the stipulated period (generally 90 to 180 days) along with proportionate mark-up
(Recovery of Mark-up on Cash Finance) and at quarter ends.
Documentation: Following documents are obtained at the time of disbursement of credit
facility.
1. Markup Agreement (IB)
2. Promissory Note (IB-12)
3. Letter of Pledge (IB-26)
4. Where collateral property is obtained, relevant documents including IB-22 / IB-24
to be obtained.
Demand Finance:
Under this type of facility, finance is allowed to the borrower for a fixed period usually
exceeding one year, repayable either in periodic installments or in lump sum, at a future
date. This type of finance is of non- revolving nature. The demand finance facility may
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Agriculture Financing:
Farmers are eligible for Agricultural Financing for each of the following purposes:
1. Farm Credit
a) Production Finance
Seasonal requirements for crops i.e. purchase of seed, fertilizer, pesticides and
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Working capital requirement for short term needs for packing, transportation,
processing and other short term needs of the farmers.
MCB offer medium and long-term finances facilities for purchase of livestock,
milk processing and chilling plants, motorcycle for milkmen, veterinary
clinics, compound feed making industry, poultry farming, dairy farming,
marine fisheries, cold storage for fisheries, forestry, apiculture, sericulture,
biogas plant, sulphuric gas generator etc.,
Working Capital
ii)
Short term finances for the items mentioned above in 2 i. (i.e. purchase of feeds,
raising and veterinary expenses, and artificial insemination unit/services, etc).
iii)
Consumer Financing:
MCB offers the following consumer finance facilities exclusively to its existing account
holders.
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Vision of MCB:
Challenging and Changing the Way you Bank.
Mission of MCB:
MCB Banks team of committed professionals is dedicated to maintaining long
term customer relationships through outstanding service and convenience.
Future Objectives:
Following are the main future objective of MCB Bank Ltd.
Effectively manage and mitigate all kinds of risks inherent in the banking.
Strategic planning:
Following are the strategic planning of the MCB Bank Ltd for the future business.
Facilitate alignment of the vision, mission, corporate objective and with the
business goals.
Provide strategic solutions to mitigate weak areas and to counter threats to profits.
Provide strategic initiatives and solutions for projects, products, policies and
procedures.
6) Swot Analysis:
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aspects.
Muslim Commercial Bank Ltd. has launched its Mobile ATM Service,
ii) Weakness:
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iii)
Opportunity:
Opportunities mean external conditions that are helpful to achieving the
objective(s). By availing the opportunism form the external market, the organization can
lead the market with flying colors. Following are the Opportunities which are there in the
market for the Muslim Commercial Bank ltd.
iv)
Grow in size also increase the profitability and trust of the customer.
Threats:
Threat means the external conditions which could do damage/harm to the
objective(s) of the organization. MBC has to keep their eye on the threats available in the
market and try to keep proper strategies. Following are the Threats to the Muslim
commercial Bank Ltd.
MCB is facing a strong competition by its major competitors; Habib Bank Ltd
and Bank Alfalah. Business of these banks is also growing with very high pace.
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MCB should enhance its Branch Network, in order to capture the market of
different areas.
The SWOT analysis of the bank signifies that its strengths overcome its weaknesses and
its opportunities are more than its threats. This is positive sign for any Organization
7) Conclusion:
In the light of SWOT analysis and Critical Analysis of the MCB Bank Ltd I
want to conclude the following point for the Improvement and success of MCB Bank
Ltd.
Continuous Improvement:
MCB Bank Limited should continuously conduct its financial analysis and compare it with
their competitors and evaluate their performance with other competitors hence the progress
and good will of the organization will increase.
Proper Planning:
MCB Bank Limited has to conduct proper planning for activities; they have to plan the
objective of the organization according to the Mission and Vision Statements of the
organization.
Advertising Campaigns:
In this fast word where the world has become the Global village no one can deny the
importance of advertisement. Most of the organizations are advertising their organization on
different media zones. They are getting most of the shares of the market which MCB Bank
Ltd is not availing, MCB has to adopt this strategic to get the more and more market shares.
This way they can increase their profits and gets the trust of the peoples.
8) Recommendations
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