INTRODUCTION

The Muslim Commercial Bank Ltd is one of the leading commercial bank of
Pakistan with network of 1054 domestic and six foreign branches. The bank was
registered as commercial bank in July 1947 in Calcutta (India) After the partition in
August 1948, the bank shifted its head office to the Dacca (Bangladesh) and in 1956
the bank shifted its head office to Karachi, where it is still working.
In 1948 Mr. Ispahani and Mr. Hameed Adamjee purchased the bank. At that
time the bank showed a historical performance and profit.
In 1974 the Government felt a harsh need of nationalization of banks and
financial institutions and nationalization act was introduced. Under this act MCB was
the first bank which was nationalized. In the same year Premier Bank was merged
with MCB and it started work as a government bank. This nationalization affected the
bank badly.
All the financial institutions and banks did not show good performance after
nationalization, and again the government felt a big need to privatize these banks. In
1991 the bank was privatize during Nawaz Sharif government. The government of
Pakistan transferred the management of the bank to National group, one of the
leading group in the field of business. They were sold 25% shares. Now this group is
having 50% of the total shares. Government is having 25% shares and general public
is also having the same shares.
Now a days MCB’s main focus remains on consumer banking and its growing
reputation as full service provider, gives the bank an edge in front of increased
competition in the banking sector in Pakistan with a network of over 1216 branches
and team of dedicated professionals. MCB with an international out look and regional
focus ensures prompt customer service and innovative solutions to business and
personal needs.
The consumer banking provides consumers with innovative saving schemes,
products and services. The bank ATM (Automated Teller Machine) network is the

largest in Pakistan and Pak rupee traveler cheques are the market leaders. Besides,
MCB was the first to introduce photo card with the introduction of MCB Master Card
adding extra feature to an already existing product in the market. Its corporate
banking ensures assistance from a dedicated team of professional financial advisors
for under writing project finance or corporate advisory services.
Hence till mid 1999 bank has shown remarkable achievements in fulfilling up
of all its objectives along with the targeted profit limits. At present the bank is
considered with an efficient and largest network bank with high potential and
committed team towards their respective tasks and responsibilities.
All MCB’s products have also presented an admirable response by its clients
and contributed a lot in developing the bank’s repute as well as the economy, which is
really appreciable. The profit earning position of bank is being improved every year
and market price of MCB share has been reached to Rs.25/- in the mid of 1999.
MCB AT A GLANCE
2000 2001
(Rs in Million) (Rs in Million)
Authorized share Capital. 3500 3500
Paid up share capital 2203 2423
Served Fund & other reserved. 2278 2279
Surp:on evaluation of fixed assets. 1109 1900
Total assets (Exc: Contra) 174723 187074
Deposits 135900 154544
Advances. 86359 76586
Investments 43122 55432
Imports 66910 53008
Exports 33575 34968
Home 10060 24703
Profit before tax: 1330 2101
Profit after tax: 590 1000
No. of Branches. 1210 1016
No of employees 12133 11614
No of accounts. 5062364 4392164

MCB VISION
MCB vision by the 21st century is to have highly motivated professional Team who
will provide quality customers services expand and penetrate the customer base, in
order to improve profitability so that we can pay regular and increase our share value.
The chairman in his recent review has desired to extend the bank’s highly
professional services in foreign operation and be come in the list of Asia’s best
financial institution.

1.5 OBJECTIVES OF MCB

Every Organization is established to accomplish certain objectives. In this
connection, the main objectives of the MCB include:
a. Improved Customer Service.
b. Quick Disposal of Credit Claims.
c. Efficient operation of the officers in co-operative environment.
d. Effective Communication with other banks.
e. To ensure growth and development of the bank.
f. To procure greater business i.e. to acquire more deposits, which are
considered to be the raw material of the bank.
g. To channalize the resources of the bank productively and increase the
wealth of stock holders.
h. To reduce the general trend of cash transaction and make the people more
bank oriented.
i. To participate in economic development of the country.
j. Introducing new products in order to attract more customers.
k. To increase foreign exchange reserves.
HISTORICAL BACKGROUND OF BANKING IN
PAKISTAN
The history of banking system in Pakistan dates back to independence
of Pakistan in August 1947 when various banks transferred their Head Quarters and
funds to areas likely to fall in Indian banking system.
According to various book there were 3106 branches of Indian scheduled
banks in the undivided sub continent as on 1st March 1947 out of which only 487
branches were located in areas presently constituting Pakistan. However the number
of scheduled banks drastically declined too 195 from 487 by 30th June 1948.
At the time of partition there were only two banks having the honour to be
first commercial bank of Pakistan, namely Habib Bank Ltd, which was set up in 1941
with its Head Office in India and the Australasia Bank Ltd, which was established in
1944 with its Head Office in Pakistan.
After the partition, an expert committee was set up and this committee
recommended that the Reserve Bank of India being the central Bank of the undivided
India should continue to function as Central Bank of Pakistan and the Indian currency
notes would continue to be legal tender in Pakistan till 30th September 1948.
subsequently it was set up started functioning from 1st July 1948.
Thus the history of Banking system in Pakistan started with the establishment
of the State Bank of Pakistan which was inaugurated by Quaid-e-Azam Mohammad
Ali Jinnah on 1st July,. 1948. consequently three banks were established which
include Muslim commercial Bank Ltd. Bank of Bhawalpur in October 1948 and
National Bank of Pakistan in 1949. Habib Bank also transferred its Head Office from
Bombay to Karachi due to partition in August 1947. and it was assisted by the State
Bank to finance domestic trade of the country.

AN OVERVIEW OF MCB
Muslim Commercial Bank is not an over night story of success:
They started business in Calcutta on July 9th 1947. After the partition of Indo-
Pak sub-continent the bank moved to Dhaka from where they commenced business in
August 1948. In 1956, the bank transferred it registered office to Karachi, where the
Head Office is presently located.
According to the MCB Annual Report 2001, the bank inherits a 55 years of
legacy of trust in its customers and citizens of Pakistan. Where as till now MCB’s
role in development in economy as well as its services have showed a remarkable
performance which mind it to be as the ideal bank in future.
At present the bank is operating with its total 1061 branches out of them six
are located out side the country.
The total bank deposit in Jun 1948 were only Rs 88 corers (880 millions) and
credit amounted to Rs.20 corers (200 million) but in December 2001 the deposits of
bank have risen up to Rs. (154,544 million) as compared to Rs.(135990 million) in
2000 and total advances have reached to Rs.76586 million as compared to 86359
million last year.
1.8. NATIONALIZATION OF MCB
After spending 27 years of its operation since establishment in January 1974,
the government of Pakistan nationalized MCB by following.
• Concentration of wealth in few hands.
• Inappropriate use of credit.
• Unbalanced distribution of credit.
• Protection of Black Money.
• Unhealthy competition among banks.
• Exploitation of Bank’s Employees.
• Favoritism.
• Low efficiency of foreign bank branches.

1.9. PRIVATIZATION OF MCB

A wave of economic reforms swept Pakistan in late 1990, introducing the
need for privatization of state owned banks and companies. In April 1991, MCB
becomes Pakistan’s first bank, which was decided to be privatized. The government
of Pakistan transferred the management of the bank to a national group of leading
industrialists of the country by selling 25% shares of the bank also with a view to
broaden equity holding the government sold 25% and the paid up capital to the
General Public as well. In term of agreement b/w government of Pakistan and
national group, additional 25% share were again offered to the group of purchasing
and making their holding to 50%. Now 25% of remaining shares are retained by
government which shall be sold in near future.

1.10. MCB TODAY AND ITS PROGRESS

MCB today represents a bank that has grown with time and experience. At
present it is a major financial institution in scope and size. it symbolizes a fully grown
tree, ever green, strong and firmly rooted.
• NET PROFIT
The Earning After Taxation (EAT) in 2001 is Rs.999.2 million as compares to
Rs.322.8 million in 2000 showing an increase of 67%.
As after privatization of MCB in 1991 the dividend of 15% was declared last
year, which is a matter of pleasure for management to state that they have announced
an increased dividend of 17.5% in the year 2001.
• RESERVE FUND/EQUITY
A sum of Rs.79.8 million has been transferred to Statutory Reserve this year,
raising the total reserves to Rs.1.796.6 million at the end of 2001, from Rs.1.1716.8
million as last year.
• DEPOSITS
Deposits with the Bank at the end of year 2001 stood at Rs. 154544 Million as
compared to Rs.135990 Million in 2000. It is clear that he depositors have complete
faith in MCB, which is evident from the fact that in the very first month of launching
the MCB Mall-a-Mall Rupee term Deposit Certificates Scheme attracted Rs.7.6.
billion.
 • ADVANCES
Total advances at the 2001 were Rs. 76586Million as compared to Rs.86359
Million in 2000 showing a fall of 2.3%. This is mainly due to the slowing down of
economy following the events described above, as well as, in keeping with MCB’s
policy of prudent lending.
• INVESTMENTS
Investments of MCB has also been slightly declined by 0.2% because the
current policy of the management is to dispose off Investment in shares of listed and
unlisted companies at the best possible prices.
• RECOVERIES
The recovery position in the year 2001 was most encouraging. Bank recovered
Rs. 104 billion in cash. The bank also disposed off properties which were acquired in
settlement of accounts. Where the recovery of loans outstanding has become the
priority in 2000.
• FOREIGN TRADE
The bank conducted import business during the year 2001 amounting to Rs.
54.00 billion as compared to Rs.66.9 billion in 2000. The export business slightly
improved to Rs. 36.9 billion from Rs.35.1 billion in 2000. Home remittances declined
to Rs. 16.7 billion from 30.6 billion. The decline in home remittances business was
due to freezing of Foreign Currency Accounts, which has effected the confidence of
the Pakistanies working overseas.
• RUPEE TRAVELLERS CHEQUE
Muslim Commercial Bank who are pioneers of Rupee Travelers Cheque in
Pakistan maintained their leadership position and sales recovered during the year
2001 were Rs. 67 billion an increased of 57% over the previous year.
• HUMAN RESOURCES
To induct fresh blood in the bank and cater for future needs, a new batch of
management trainees has been selected strictly on merit. After through training these
officers have been inducted in various divisions and branches. Attention is paid to
upgrade operational and managerial skills of staff and a number of professional
courses are conducted at MCB staff and Training Institutes during the year 2001. the
management has also continued the program of hiring of some senior level Banking
Executives from the market, whenever necessary.
• AUTOMATION
A Y2K program was put into place ensuring that by third quarter 99 all
systems are Y2K compliant. The progress is as per plan. At the end of 2001, 75
branches were online and 241 branches had been computerized with multi terminal
systems. Where as 91 ATMs are in operation and over 60,000 ATM Cards had been
issued up till mid 99. The commercial cities of Faisalabad, Multan and Hyderabad
have also been added of MCB ATM Network. Where plans are in hand for expanding
online network to major cities and covering all the four provinces thereby providing
the ATM network true national coverage and maintaining the leadership in this
service.
 • SOCIAL SECTOR
The bank is actively participating in Prime Minister Self Employment Scheme
(SES). The applications revived from various applicants are being processed on merit
and disposed off as quickly as possible.
• FOREIGN OPERATIONS
The bank’s foreign operations in Bangladeshand Sri Lanka continue to remain
profitable. In 1999, the bank opened its third branch in Sri Lanka at Maradana a
suburb of Colombo.
• ACCOUNTS POSITION OF MCB
The total number of accounts till 2001 were decreased from 5062364 to
4392164.
• BRANCHES OF THE MCB
The total number of MCB branches in Pakistan and abroad has reached to
1061 now from 1210 in 2000. The difference exists due to the closing of few extra
branches, which were considered non profitable.
• EMPLOYMENT POSITION
The number of employees in 2001 has also been declined to 11614 in against
of 12133 last year.

MCB PRODUCTS AND DIFFERENT SCHEMES

The privatization expansion and diversification of economic activities in the
country also need innovation in banking. The Muslim Commercial Bank has taken an
initiative in this regard by introducing different schemes since past, in order to expand
the services and to have efficient survival as well, which are really made well come
and encouraged by the clients. Hence the bank provides a choice of products and
accounts to its customers which suit best to their life style and needs. These schemes
are mentioned below:

4.8. CAPITAL GROWTH CERTIFICATE SCHEME:

This is a risk free scheme by which the customer can double his investment in
just 5 years. The main features of these schemes are described below:
a. Minimum amount of investment is 10,000 with no limit on maximum
amount.
b. The time period for certificate scheme is 5 years, which in renewable
for further period of 5 years.
c. Upon maturity of certificate the following returns are expected to
made after deduction of Zakat wherever applicable and with holding
tax.
d. Incase of premature encashment of certificates the depositors will be
given PLS saving account profit rates decided by the bank for that
particular period.
e. There is no other special requirement except the depositor will be
required to fill in the account opening form.
Initial deposit. Payment upon maturity
Rupees Rupees
10,000,00 20,000,00
50,000,00. 100,000,00
100,000,00 200,000,00
1,000,000,00 2,000,000,00
4.9. MAHANA KHUSHALI SCHEME.
Through Mahana Khushali Scheme the customer can get a steady income
month after month on his investment at his door step. Any one can invest in this
scheme with minimum of Rs.10,000/- and the maximum of Rs.1,000,000 for the
maturity of five years.
The guaranteed (interim) rate of profit offered will minimum 1% per month. If
the profit declared by the bank is higher, additional profit well go paid to the
depositors which they will be informed by the branch from time to time.

The following table give the monthly return on various amounts, based
method of calculation.
Amount Monthly Profit.
Rupees Ruppes.
1,000,000,00 12417,00.
500,000,00. 6,208,00.
100,000,00. 1,242,00.
50,000,00. 621,00.
25,000,00. 310,00.
10,000,00. 124,00.

Zakat will be applicable once a year on the principle amount of investment,

and tax will be collected on profit monthly at the time of payment. Where the
monthly profit payment procedure will be made through crossed pay order collected
by the depositor or through crossed postal money order/demand draft at the door step.
In case of depositor have saving/current account with the bank may be credit by the
amount of profit.

4.10. PRIME CURRENCY SCHEME.

This scheme is launched to collect deposit for foreign currency account which
allows the depositors to earn attractive rates of interest in Foreign Currency. The
account can be opened in four global currencies like: US Dollar, Pound, Sterling, Yen
and the Deutsche Mark with the personal or joint names. MCB invites to customers
whether residents or a non-resident Pakistani to operate a foreign currency account
and allow to draw any amount of foreign exchange from the account and transfer or
remit the amount freely to any part of world without any restrictions.
The bank allows 7% profit per annum on the scheme which is (tax free) i.e.
exempted from all form of taxes.
4.11. SAVING 365.
Under this scheme a checking account can be opened on which profit will be
paid on daily product basis at the same rate as for PLS saving scheme.
Where under this account the holder is also provided with the facilities of
current A/C.

4.12. EXPORT PROMOTION SCHEME.

Under this scheme bank deals with financial matters relating to exports and
extension of export credit at Confessional rates in order to boost up the exports of the
country. The bank also plays a role of a major dealer of export refinancing scheme of
the State Bank of Pakistan.

4.13. MCB RUPEE TRAVELLERS CHEQUES (RTC)

MCB rupee travelers cheques are as good as cash. The MCB travelers
cheques are accepted at the major shops, travel agents, hotels business
establishment and MCB branches all over the country and abroad. This
service is being offered to facilitate instant fund availability to travelers and
business people who used to carry a large sum of money with them. So this
eliminates the degree of risk involved and prove to be a safest way to carry
cash for high value cash transaction.
The (RTC) can be purchased from MCB branches in denomination
Rs.1,00/- Rs. 10,000/- Rs. 50,000/-.

4.14. HAJ MUBARAK SAVINGS SCHEME.

The MCB also participate in fulfilling of life time ambition of every Muslim
to perform Hajj.
The salient features of bank’s Hajj Mubarak Saving schemes are as follows:
a. The duration of Hajj Mubarak scheme will be 2 and 3 years.
b. Under the 2 year scheme, a monthly deposits of Rs. 1800/- and under 3
years scheme a monthly deposit of Rs.1200/- will be required.
c. Upon expiry of 2 or 3 years the bank will pay approximately Rs.4860/- or
Rs. 512000/- respectively less Zakat deduction and with holding tax
application to the client in against of his account.
d. Each intending Hajj will need to fill account opening form along with a
copy of his or her national identity card and other particulars and also
nominate his or her successor.
e. Incase of withdrawal from the scheme the participant will be entitled to
the profit rate of the PLS saving account for that particular period. In the
event of death of the participant the successor will take the role of
participant if he or she agrees to pay the remaining installments of the
scheme.

4.16. MCB MALL-A-MALL RUPEE DEPOSIT CERTIFICATE:

These certificates were launched by the bank in April 1999, which has
received an excellent response from all over the country.
 Any one can purchase MCB MAAL-A-MALL certificate with the deposit of
Rs.25,000/- only and is offered to be the participant of lucky draw every month in
which you can win various prizes in against of your deposit like: 20 Lake cash,
Honda City Car, 100 Tola Gold and many more, along with the profit rate of 10%.
The minimum duration for the investment is 2,4,8 and 12 months where the
depositor is allowed to liquidate his certificate just after 2 months of his deposit.
Besides the bank also offers the facility of loan to a certificate holder after fulfilling
of few requirement.
MCB (ATMs) 24 HOURS CASH:
Muslim commercial bank has also installed a number of Automated Teller
Machines at several branches, in major and busy cities of Pakistan and claims to be
the bank with largest ATM network in Pakistan.
The facility is provided for extending round the clock money withdrawals
facility to bank clients. At present 91 ATMs are in operation and over 60,000 ATM
cards have been issued which are planned to increase and improve further at the end
of 2000, by expanding the network to the all provinces of country.
Besides MCB has also provided opportunity its ATM card holders to become
“Lakhon Main Aik”, through a lucky draw in which the card holder can win Rs.
100,000/ plus a host of exciting prizes.

4.17. MCB MASTER CARD.

MCB master card is simply a credit facility to its clients. The card holder have
a facility to shop to a particular limit from over 12 million merchants welcoming the
card with in the country and globally as well.

Management and organization

MANAGEMENT AND ORGANIZATION
The group of management of Muslim Commercial Bank consist of 10
members including, Chairman, Chief Executive, one Vice Chairman and seven
directors who are responsible for the bank’s business and making planning and
policies and provides the guidelines to whole staff to achieve required objectives and
targets. At present there are 20 circle offices and 46 regions. The incharge of circle
office is called General Manager (GM) who handles the matters and affairs of
branches under his circle as directed by the higher authorities. Where every circle
office consists of regional offices which are normally from 3 to 6 in ever circle.

Name of Prov: Circle. Regions. Branches

Baluchistan 1 2 34
NWFP and AJK 2 7 155
Punjab 10 25 633
Sindh 7 12 232
Domestic 20 46 1054
Export Processing - - 1
zone
Foreign Branches - - 6
Total 20 46 1061
2.6. MCB RE-ORGANIZATION
During the past few years, MCB has taken major stride in terms of business
direction, marketing strategy, human resource development etc. the management’s
concentrated its efforts towards consolidation in certain areas while expansion in
others which has resulted in cost savings and revenue enhancement as well as
introduction of new products and schemas and improvement in customer service.
The management feel itself fortunate in attracting a number of professionals
from a variety of specialized backgrounds and have also been feeling very proud to
retain a highly dedicated group of individuals who have been associated with the
bank for past several years, having a potential to compete efficiently in this
competitive ear. While in order to have major thrust in the market a strong need to
focus on each and every system of business has remained the MCB management’s
top preference, and by from a geographical to a functional organization structure.

2.7. MCB CORPORATE AND CONSUMERS BANKING

Since, after privatization MCB is striving by utilizing its committed staff’s
efficiency and all possible resources towards the convenience and excellent services
for its customers by realizing their needs and problems relating to their life style
which is really appreciable.
So, far the MCB’s policies are concerned they are purely customer oriented,
having target on all types of prospects showing highly encouragement by them in the
feed back which has provided an edge to this bank among all the banks competing at
present, with in the country.
The bank is now putting its attention systematically and technically to
formulate the policies by dividing its efforts in to three segments to satisfy the
customers more accurately, for successfully achieving the company objectives they
are like.

i. MCB CONSUMERS BANKING.

Specialized Products / Facilities and Accounts:
MCB provides different saving accounts with attractive returns and
Investment products that give the monthly profits as well as the convenient payment
instruments to save the purpose of safety in high valuable transactions, having high
acceptance aroung the world.
a. Specialized Products.
MCB products are designed to cater to all your financial needs. They include:
• Convenient 24 hours banking services through the largest ATM
network in Pakistan.
• The MCB PAK RUPEE TRAVELLERS CHEQUES are the safest
way to carry cash for high value cash transactions.
• The MCB MASTER CARD is the future of money with over 12
million merchants welcoming the card globally for you to buy without
paying cash on the spot. You have never seen convenience like this
before.
 • MCB’s REMIT EXPRESS is the fastest way of getting your
money across to Pakistan, through the bank service, which saves your
previous time.
b. Specialized Accounts:
MCB provide its customers to open an account that fits their
requirements and life style in best way.
• MCB RUPEE MAXIMIZER ACCOUNT provides an opportunity to
convert your foreign currency account in to Pak.
• In Pak. Rupee or foreign currency accounts the bank provide with a
selection of accounts suiting your needs.
• The KHUSHALI BACHAT or DOLLAR KHUSHALI ACCOUNT,
both require a low minimum income deposits plus you receive profit
on daily product basis.
• Under SAVING 365 ACCOUNT, MCB offers you’re a saving account
with current account facilities.
• The CAPITAL GROWTHINVESTMENT provides you an
opportunity to double your amount and also receive monthly profits
through monthly KHUSHALI.
• MBC MALAMAL DEPOSIT also provide the customer with incentive
of different prizes along with saving of their amount for a particular
period at a predetermined rate of profit.
More over the MCB’s policies relating too customer with innovative saving
schemes, products and services. Its ATM network is largest in Pakistan and Pak
Rupee Travelers cheques are market leaders. MCB also claims to be the first to
introduce the photo card with the introduction of MCB Master Card for adding
additional security to its customers.

MCB CORPORATE BANKING

MCB corporate banking is providing its customers with professional financial
advisor that give personal attention to your banking needs.
They are specialists in connection with the services like under writing
corporate advisory, project finance, equity placements and a lot more. The Bank’s
experienced corporate banking team assures you to be assisted with all your financial
needs and requirements by offering different exclusive schemes and credit policies
with the objectives to:

• Help the process of industrialization in the country.

• Provide employment opportunities to skilled and unskilled labour.
• Encourage local and overseas Pakistanis for investment.
• Increase production and boost exports.

2.6. MCB INVESTMENT BANKINGGROUP

The Investment Bank Group (IBG) has emerged as a leading player in
Pakistan’s investment banking area. The group handles advisory, corporate finance,
project finance and capital market related transactions.
 • CAPITAL MARKETS
The Capital Markets (CM) teams participate in some of the largest capital
markets transactions emanating from Pakistan. IBG has been involved in all major
corporate bond transactions as Lead Manager or Lead Underwriter.
• CORPORATE FINANCE
The Corporate Finance (CF) team is involved in some of the major Merger
and Acquisition transactions taking place in Pakistan.
The team identifies potential targets or acquires and arranges funds foor the
merger or acquisitions.
• PROJECT FINANCE
The team at Muslim Commercial Bank is trained in conducting
comprehensive risk analysis of the projects under consideration, devise the financing
in structure according to the needs and cash flows of the project and arranges the
required funds through syndication.

2.7. DEPARTMENTION IN MCB

in MCB there is departmentation by function. There are twenty divisions
working under Head Office, each of which is having his own field of work, these
divisions are:

1. AGRICULTURE DIVISION.
This division work for the development of agriculture in the country. It
advances loans for agricultural purpose and recovers all loans already given for the
said purpose. This division also assists World Bank and other donors in their
agriculture development project.

2. AUDIT DIVISION.
Previously IT was called inspection and Audit Division. It conducts audit in
Bank’s branches and it delegated enough authority from the Board of Directors so
OTB that it can work without any fear. It appoints audit teams and all the
irregularities are reported to this division.

3. BUSINESS DEVELOPMENT & MARKETING DIVISION.

This is the most important division working under H.O, the main function of
this division is business development. This division on the basis of market survey
introduces new schemes and all the marketing activities for the promotion of the new
products are carried out by this division. Changes in the existing connection with
bank & customer scheme is also the responsibility of this division.

4. CENTRAL ACCOUNTS DIVISION.

The main responsibility of this division is to keep accounts of branches and
record of all inter branch transitions and of branches with HO. Calculation of profit
on the accounts of branches maintained with HO is also the responsibility of this
division.
5. CORPORATE AFFAIR DIVISION.
It deals with the affairs of public and private limited companies. It includes
financing of large and specialized corporations, projects. In short it manages the
corporate financing. It also directly controls those branches which are designated as
corporate branches.

6. CREDIT MANAGEMENT DIVISION.

Main function of this division is to form credit rules and regulation in
accordance with the prudential rules and regulation framed by SBP. It deals with all
credit proposals submitted by advances departments of different branches and defines
their limits of loans. Marketing activities about the loan is also carried out by this
division. This division keeps contacts with all valuable clients and considers their
view about he loans/advances procedure and tries to make the procedures as simple as
possible. Action necessary for the recovery of loan is also taken by this division.

7. FINANCE AND TREASURY DIVISION.

This division manages all the assets of MCB Management of income tax and
central excise duty is the function of this division. The most important function it
performs is the announcement of profit rate On different schemes from time to time.
8. FOREIGN TRADE AND EXCHANGE OPERATION DIVISION.
The main function of this division is to arrange foreign currency reserves, for
day to day requirements of bank. It frames all rules and regulations regarding foreign
exchange and L/C opening in the light of prudential rules and regulations of SBP, and
instructions of Export Promotion Bureau (EPB) and Ministry of Commerce and
Industry.

9. GENERAL SERVICE SECTION.

This division deals with construction and maintenance of branches, purchase
and maintenance of vehicles and lasing of bank’s property. The supply of stationery
and equipment’s is also the responsibility of this division.

10. HUMAN RESOURCES DEVELOPMENT DIVISION.

It is the most important division of HO. Dealing with the most important asset
of the bank i.e Human Resource. It deals with all the personnel functions of
recruitment, transfer, promotion, resignation, and separation. It settles all salary
matters and matters relating to increments, bonuses and fringe benefits. It maintains
records of employees and conducts performance appraisal and disciplinary actions.

11. INFORMATION MANAGEMENT DIVISION.

It is fully computerized division, which provides all sorts of information to top
management. This division monitors the information system of all branches and is
playing s a very important role in computerization of MCB.

12. INDUSTRIAL CREDIT DIVISION.

Previously it was part of Credit Management division, but now it works under
the said division. It deals only with the advances to industrial units.
13. INTERNATIONAL DIVISION.
It looks after all the matters relating to foreign banks including the branches of
MCB abroad. It looks after all deals which Muslim Commercial Bank carries out with
banks and financial institution of foreign countries. Management of Umra and Hajj
operations is also the responsibility of this division. The management and conditions
of seminars and training programs outside the country and to send its officials for the
training abroad is the responsibility of this division.

14. INVESTMENT BANKING GROUP.

It is the unit which under takes investment with respect to the product of the
banks. It deals with capital market at national and international level and also
managers syndicates in case of issuing of shares etc.

15. ISLAMIZATION DIVISION.

This division was established in Zia regime, after the introduction of Islamic
Banking in Pakistan. This division administers Zakat deductions, Iqra surcharge and
Qarze Hasna mode of financing. This division also gives suggestions on the adoption
of interest free banking in Pakistan.

16. LEGAL AFFAIR DIVISION.

This division deals with the legal affairs if the back, it handles all the cases filed
against someone and to defend all the cases filed against MCB. It alsi five
suggestions in framing of new rules and regulations to other divisions.

17. ORGANIZATION AND METHOD DIVISION

This division firms methods and procedures to be adopted by different
branches. This division is also responsible for construction and review of
organizational structure of MCB as a whole and the braches. The division collects
data and suggestions or MCB as a whole and the branches. This division collects data
and suggestions for the improvement of he organizational structure and procedures.

18. RUPEES TRAVELER CHEQUE AND CREDIT CARD DIVISION

This division is responsible fir maintaining all records to Rupees travelers’
cheque and master card.
19. SPECIAL ASSETS MANAEMENT DIVISION
This division is created to give suggestions and fins new ways and means to recover
the stuck up loans of bank.

20. TRAINING DIVISION.

The division is responsible for arranging training fir all level of employees. It
administers the staff colleges of MCB. This division keeps aware itself from the
introduction of new banking techniques, and provides a full opportunity to its
employees to learn what ever new.
 BOARD OF DIRECTORS

Mian Muhammad Mansha. (Chairman)

Mr. S.M. Muneer (Vice Chairman)

DIRECTORS.
1. Mr. Tariq Rafi.
2. Shaikh Mukhtar Ahmad
3. Mr. Shahzad Saleem
4. Mr. Raza Mansha
5. Mr. Sarmad Amin
6. Mian Umar Mansha
7. Mr. Muhstaq Ahmad Malik (Nominated by the Govt: of Pakistan).

PRESIDENT OF CHIEF EXECTIVE

Mr. Muhammad Aftab Manzoor.
 ORGANIZATIONAL CHART.

Teller
 All of the above mentioned department are operating at their excellent
pace under the guidance and supervision of well trained and skilled persons
whose struggles have boosted the branches performance and services in the
eyes of customers as well as the management.

MCB MAIN BRANCH MARDAN.

SECTION-1
MCB MAIN BRANCH MARDAN
The MCB main branch bank road Mardan is considered as most active and
productive branch of the city. It was established on 7th March 1959.
The bank is currently operating with an excellent deposit base and the efficient staff
category which are the back bone in Improving the branch performance and
upgrading of its foreign exchange department to increase bank’s contact with
customers with in the region while the branch is headed by a Chief Manager guiding
to different functions operating within the branch and a sub manager taking the
responsibility of staff’s efficiency working in foreign exchange department.
Where as the branch is completely equipped and decorated with modern furniture and
a pleasant internal atmosphere which really attracts the customers that to get feel easy
during their dealing with bank specially in rush hours.
 DEPARTMENTS OF BRANCH.
The departments functioning at, MCB main branch bank Mardan briefed by
its concerned officers during the internship are:

3.1. Accounts department.

3.2. Remittance department.
3.3. Foreign Exchange Department.
3.4. Advance department.

ACCOUNTS DEPARTMENT
The function of Accounts department is to post daily activities of each and
every section. Every department is sending the detailed report of daily progress to the
Account Department for posting the same in the cash book, also allowed the clean
cash register. The transaction then will be shifted to their appropriate heads. Accounts
department deals in two types of registers.
In the income ledger the transactions relating to the income of the bank are to
be posted, like commission from parties, maintenance etc. all the development
expenses of the bank including salaries expenses of the staff, rent expenses etc are to
be posted in the expense ledger. Accounts department also maintains the deposits, and
also prepares the weekly and daily statements of the affairs of the branch. It is just
like a balance sheet.

THE DEPOSIST SECTION.

The deposits is one of the most fundamental sections of any bank. This section
had been set up with a view to accept deposits from general public and which was
also a central idea to create a bank. It will not wrong to say that the banking starts
from this section.

FUNCTIONS OF THE SECTION

The deposits section carries out many significant functions, besides providing
other required facilities and information to its customers. Some of key functions are
given under:
OPENING NEW ACCOUNT
Opening of new account is like a contract between the banker and customer,
which is at MCB main branch Mardan is guided by the people under deposits. It is the
preliminary function of the deposits section to open various types of account, by
allotting them numbers.
• Types of Accounts.
Keeping in view the purpose and duration for which deposits are to be kept
with the deposits section in the bank, the deposits can be classified into two
categories, Demand deposits and Time or Fixed Deposits. The demand deposits are
ones which are payable by the bank whenever demanded y the depositors. This
category includes current and savings deposits accounts. While on the other hand the
deposits which are accepted by the bank under the condition that they will not be
payable on demand but will be payable on a fixed or predetermined future time or
date are called Time or Fixed Deposits. Following are the types of accounts the
deposits department opens.
i. Current Accounts
These are running accounts and are opened by the individuals/businessmen,
public institutions and groups, that make deposits and withdrawals frequently. The
deposits and withdrawals can be made through cheques, demands drafts, pay orders,
etc, drawn on the branch.
As these accounts are payable whenever the depositors demand and the Bank
by accepting these deposits incurs the obligation of paying all types of orders to the
extent of the credit balance in the depositors accounts. These deposits represent
current liabilities of the bank. So, the bank has to keep sufficient funds in its hand to
meet the requirements of the depositors of these deposits.
Furthermore the businessmen, who require money frequently, open current
accounts. The bank can not apply the proceeds of such expenses, fees, commission,
markup etc arising out of any dealing or services with the branch.
i. The account holder is expected to maintain a minimum balance of Rs.500/- in
his account or whatever the minimum amount is prescribed for the purpose.
j. These accounts are completely exempted from withholding tax and zakat
deduction.
ii. (PLS) Saving Accounts:
These are also one kind of demand deposits and are kept to develop
the saving sense in the citizens of the country. These accounts are
opened mainly by those customers whose banking transactions are not
frequent and numerous. Lower and middle income groups, small
traders, professionals, farmers and other salaried classes usually make
such deposits, so as to save small amounts for the small or big needs,
like purchase of television, refrigerator, car or house. Funds can be
deposited frequently through cash, cheques, demand drafts, pay orders,
telegraphic transfers and other such instruments. But the withdrawals
are restricted to twice a week.
From the bank’s point of view a considerably percentage of such deposits can
safely be invested and the Bank need not keep larger reserves to satisfy the daily
demand upon such deposits. At the same time the bank pays the profit at competitive
rates on such deposits in long period investments. The bank can, on the request of its
depositors, pay their utility and other bills out of their accounts. The profit is not paid
on these deposits. As a result the bank earns maximum profit from these kinds of
accounts. Providing banking investment with the proceeds of these deposits and
providing, under an agreement, overdraft facilities to the depositors are the main
proposes of the bank by keeping such deposits.

SALIENT FEATURE
a. To maintain requirement for opening account is rs.500/-
b. There is no limit for maximum deposit.
c. No limit of deposits and withdrawals is defined.
d. The deposits can be lodged in both local as well as foreign currencies.
 e. The bank collects cheques, demand drafts, etc and pay all the bills,
cheques, pay orders, etc, on the behalf of its depositors.
f. The current accounts can be made by:
- Individuals (single or jointly)
- Proprietorship, Proprietorship, and companies in their names.
- Such other groups and organization.
g. All cheques and other instruments should be crossed, before they are
deposited for credit into account.
h. The bank would not require any prior permission from the account holder for
debiting his/her account for charging deposits, which varies from time to time
usually after every six months.
The objectives of the bank to keep deposits are to earn maximum profit by
investing the proceeds of the deposits, to help small savers, to fulfill their banking
needs and to provide assistance in uplifting the economy.

SALIENT FEATURES
a. The minimum requirement for opening the account is Rs.100/-
b. The maximum limit for the deposit is Rs.200,000.
c. The deposits can be made in both local and foreign currencies.
d. The depositors are allowed to make as many amount withdrawals as they
want, but only twice a week:
e. The deposits can be made.
- Individuals (Single or jointly)
- Trusts, charitable institutions and provident funds.
- Such other groups and institutions.
f. The account statements are provided to the depositors as per their instructions.

iii. (PLS) TERMS DEPOSITS

The deposit which is acceptable by the bank under the condition that it will
not be payable on demand, but will be payable on a fixed or predetermined future
time or date, is called fixed deposit. But after the islamization of banking system in
1985, its name has been changed from fixed to PLS Terms Deposit.
These deposits represent such surplus funds of the depositors which are not
required by them for sufficiently long periods. The bank need not to keep greater
reserves in respect of such deposits. The bank can made long term investments from
the credit balances of such deposits. The deposits are accepted for the range from 3
months to above. Of course, the longer the period, the higher is the rate of profit
offered.
People generally deposit larger amounts of money in these account. The bank
can advance loan to businessmen out of these deposits because they are fixed for a
particular period. But for the premature withdrawal of amount a prior notice to the
bank is necessary.
For the amount placed on the term deposit, the bank issues a deposit
certificate (receipt), which states the amount received, the name of the depositor and
the period for which the deposit is placed. Being a deposit receipt it can not be
negotiated or transferred.
 The bank accepts these deposits with the purposes, to make minimum profit
by using the proceeds of such deposits, to appeal customers by offering them a high
rate of return, to meet their entire banking needs, and to help economy to grow.

SALIENT FEATURE
a. The minimum deposits is accepted by the bank with the sum of Rs.1000/-
b. The maximum deposit has got no limit.
c. The deposits are accepted for the period form three months maximum to above.
d. The PLS term depositors would be eligible for sharing profit/loses with
the bank at true rate determined by the bank.
e. Where profits and losses would be distributed on half yearly basis.
f. On the maturity, the depositors shall have an option either to draw the
deposit and the amount of his profit share if any or renew the deposit.
g. Incase of premature withdrawal a prior notice must be given by the
depositor to the bank on which bank is eligible to maximize the profit ratio of
depositor or to deduct some charges of its services.

3.2. REMITTANCE DEPARTMENT

According to concerned officer of this department, the bank promoted the
facility of remitting the funds within certain limits. Remittance department here
consists of two major section.
a. Inland remittance.
b. Foreign remittance.
a. INLAND REMITTANCE.
The term inland remittance means transfer of funds from one branch too
another within the country through following banking instruments.
- Demand draft.
- Telegraph transfer.
- Mail transfer.
- Pay order.
Demand draft (DD).
It is written drawn by one branch of a bank upon another branch of the same
bank or upon branch of any other bank working with in the country under special
arrangement to pay certain sum of money to or to the order of specified person.

MCB DEALS WITH TWO TYPES OF DD.

- Open DD:
Open DD is one which is payable directly at the counter and there is no need
of crediting to the account.
- Cross DD:
Cross DD is one whose payment is done through account, the amount of the
DD is credited to the favoring accounts and then he can transact in ordinary
way through cheque.

- Telegraph transfer (TT):

 Transfer of funds form one branch to another of the same bank or upon other
banks under special arrangements for the payment to beneficiary, through
telegram, telex, fax is allied telegraph transfer.
iv. MAIL TRANSFER.
Transfer of funds from one branch of the same bank inside or outside the
country through mail/courier service is called. Mail transfer are same as for telegraph
transfer, but if a person’s account is not existed in the said branch, in this case the
sending branch will shift the amount to the concerned branch and advice will be sent
to the other bank in which his account exists. In suspense account the party will have
to prove identity.

v. PAY ORDER.
A pay order is a written authorization for payment made in a receipt from
issued and payable by the bank to the person named and addressed there, on this
giving a proper discharge there on. Pay order can be made for the branch of same
bank with in the same city. There is option to change bank (name) But that bank’s
branch should be in the same city. The Bank’s commission is fixed as 5% for any
amount.

b. FOREIGN REMITTANCE
The bank provides the facilities of foreign remittance to the domestic
residential and foreigners to send money from one country to another. The bank also
provides foreign exchange in the shape of travelers cheques to intending visitors.
Travelers cheque is an order drawn by the bank in favor of travelers upon specific
bank to pay him specific amount on demand after proper identification abroad. The
travelers first pay the amount of money to the issuing bank, which is responsible to
pay the amount to the foreign bank upon which it is drawn.
 Organizational chart of mcb main
branch mardan

Teller
SECTION-II
3.4. FOREIGN EXCHANGE DEPARTMENT
INTRODUCTION
Foreign exchange department plays a vital role in the international trade of
any country. By realizing so, MCB has also concentrated and improved, well its
foreign exchange operation as for the efficiency of its employees and customers
satisfaction is concerned.
Under foreign trade operations normal transaction starts with the sales
contract where by the buyer tenders value and the seller goods. There is a degree of
risk involved in the exchange of goods against payment, if geographic distance
increase. The problem is furthered by the fact that buyer and seller belong to two
different countries. Thus in the first place they don’t know each other and in second
place they can not ascertain the risk involved and finally the problems is worsened by
the fact that laws of the land differ in each country. Thus in the ordinary course of
business, following four forms of transactions can take place in international trade:

a. Advance payment.
b. Open account.
c. Documentary collection.
d. Documentary crudity.

a. ADVANCE PAYMENT
In advance payment, the payments is made by the importer first and goods are
received later on.

b. OPEN ACCOUNT
In the open account exporter sends the goods first and payment is made later
on.

c. DOCUMENTARY COLLECTILON
In the documentary collection, the remitting back sends the documents and the
importer bank delivers documents against payment. It may be dawn under sight or
acceptance basis.
d. DOCUMENTARY CREDIT.
Documentary Credit reduces the risk attached to either importer or exporter
hence an L/C (Letter of credit) is established by the issuing back on the request of
importer and the L/C is sent to the advising bank in the exporter country which then
collects the documents and sends them to the issuing bank provided they confirm to
the terms and conditions of the credit which are then tendered by issuing bank of
payment acceptance as per terms of the L/C.
The Muslim Commercial Bank Road Mardan. Foreign exchange department is
divided into the following sections:
i. Licensing section.
ii. Import section.
iii. Foreign Exchange Remittance Section.
iv. Foreign currency account section.
i. Licensing Section.
Licensing section it working under chief controller of imports. The main
function of this section is to grant the registration to importers.

ii. Imports.
Imports can be defined as bringing any commodity good into a country from
out side the country through any way or channel. In Pakistan imports are regulated by
Ministry of Commerce, under the export and import act 1950 and the notification
issue there under:
All the imports are done through letter of Credit L/C which is an
understanding or a letter of guarantee issued to the exporter by the bank on behalf of
importer says defaulter the bank will pay and in case the exporter do not follow the
terms and conditions of the L/C the bank will be liable to the importer.

TYPES OF LETER OF CREDIT.

An “irrevocable letter of Credit” can not be altered or canceled without the
consent of all the parties, i.e. the opener, the opening bank, the confirming bank and
the beneficiary. This credit becomes confirmed as soon as the advising bank at the
request of opening bank confirm the credit to the beneficiary. In this way the exports
gets the double satisfaction of receiving the payment for goods from the confirming
bank, provided he submits the shipping documents strictly in terms of credit.

a. Revocable Letter of Credit.

This letter can be modified or canceled by the issuing bank at any time
without any obligation or its part. This letter is usually not acceptable to the business
men.

b. Confirmed.
The exporter’s bank which confirms the letter of credit takes the liability of
paying exporters in case the issuing bank fails to make payment to the exporter.

c. Unconfirmed L/C.
Unconfirmed letter of credit, the bank through whom the credit is negotiated
does not give any guarantee to the exporter that the bills drawn will be honored by the
issuing bank. From exporter’s point of view the confirmed irrevocable L/C is the best
form of receiving payment.

d. Clean L/C.
There these are no conditions attached to bill and the issuing banks makes
payment up to the limit credit, the letter is called a Clean L/C.

OPENING OF LETTER OF CREDIT.

The mechanism of financing international through LC is quite simple. The
importer needing some foreign goods, will first of all contact the exporter outside the
country or their agents working here in Pakistan. They both will sign a contact which
will contain all the necessary information about the goods to be imported. The
importer then will apply for the issuance of letter of credit through a form, this form
contains all the necessary information like the description of merchandise, port of
shipment, port of unloading and quality and quantity of the commodity.

Following documents are required for the issuance of LC.

a. Application for L.C through a form.
b. Proforma invoice of sending of foreign company.
c. Membership certificate of chamber of commerce or association.
d. Issuance certificate.
e. IBS charge form.

3. REMITTANCES IN FOREIGN EXCHANGE.

MCB provides the opportunity to his customers to transfer his money from
one country to another, the customer must have an account in foreign currency in the
bank. MCB provides all modes of foreign remittance similar to local remittances i.e.
FDD, FTT, FMT.

4. FOREIGN CURRENCY ACCOUNT SECTION.

The section deals in foreign currency accounts. Foreign currency account
scheme was started from April 1991 in Muslim Commercial Bank under the name of
“Prime Currency Account”. The account can be opened in personal name or joint
names by Pakistan residents or non-residents or non-residents foreign Nationals.
Foreign currency account can be opened in four global currencies i.e. US Dollar,
Pound Sterling, Japanees Yen and Deutsche Mark.

Travelers cheques and foreign currency notes can also be issued to the holders
of the personal and joint account. Remittances from abroad.
Travelers cheques foreign currency notes and foreign exchange generated by
enchasing (F.E.B.Cs). Foreign Bearer Certificate may be deposited in these accounts.
Rupee loan facility is also available against this account.
The foreign currency account holder can draw any amount of foreign
exchange from foreign currency account and transfer or remit the amount freely to
any part of the World without any restrictions.
The restrictions imposed by State Bank of Pakistan for the opening of Foreign
Currency Account in absence of passports, work permit and resident visa have been
withdrawn. The account will be restriction free.
The prime currency scheme is exempted from all form of taxes including
income tax, wealth tax and zakat dedications. The return on the scheme is up to 10%
pe rannum, payable in foreign currency only.

a. MCB FOREIGN CURRENCY ACCOUNTS DETAILS (PRIME

CURRENCY ACCOUTNS).
Types.
i. Saving.
ii. Current.
Currencies
a. US DOLLAR.
b. POUND STERLING.
c. DEUTSCHE MARK.
d. JAPANEES YEN.

Who can open these accounts?

- All resident Pakistanis.
- All non-resident Pakistanis.
- Foreign companies.
- Charitable trusts.
- Resident Companies locally incorporated.

Minimum Amount of Deposit.

- US DOLLAR 1000.
- POUNDS STERLING. 500.
- JAPANEES YEN. 150,000.
- DEUTSCHE MARK. 2000.

Other Opportunities.
- Free from taxation.
- Free from deduction of Zakat.
- Free from any sort of questioning regarding the source of funds.
- Free from restriction of remittance.
b. DOLLAR KHUSAHLI ACCOUNT.
Long term investment in foreign exchange was not so attractive, so MCB
introduced this scheme in Nov. 1993, to attract customer to deposit foreign currency
even for short time.
The minimum amount for opening of this account is USS 100/- or equivalent
in other acceptable currencies. The profit on this account is given on daily basis.

Who can open this account.

i. All resident Pakistanis.
ii. Free from deduction of Zakat.

c. PRIME CURRENCY FIXED DEPOSIT RECEIPTS.

This scheme was introduced in 16th Oct, 1991. the minimum amount of
investment is USS 200 or equivalent in other acceptable currencies. The time period
for this scheme is from 3 to 36 months.

Who can open this account scheme.

i. All resident Pakistanis.
ii. All Non resident Pakistanis.
iii. Charitable trusts.
iv. Firms and companies.
Opportunities.
i. Free from taxation.
ii. Free from Zakat.

3.5. ADVANCES DEPARTMENT

As told by the concerned officers of this department. Advances department is
lending loans to individuals, Companies, Corporations etc for different purposes. It
provides loans for agricultural and industrial development. Its provides the following
finances.
1. RUNNING FINANCE
It is provided only to the current account holder, zonal office can sanction the
loan up to 3 lakes. General Manager of the circle has the power to sanction the loan
up to 1 million, beyond this limit the head office will be sanctioning authority. The
loan can be granted on personal guarantee, or any thing tangible which is acceptable
to the bank like stock property must be ensured by the party. The mark up will be
charged as 51 paisa per thousand on daily product basis. The yearly interest rate is
18.2% the repayment of the loan will be made from time to time. In running finance
the loan up to 3 lakes is called commercial loan beyond this, the loan is called general
loan.

2. DEMAND FINANCE.
The rules in demand finance are same as for running finance. PLS Account
holder can also take the loan after meeting with all the requirements and standard set
by the bank for financing. The repayment of the loan will be made in monthly equal
installments.
The mark up will be charged on the expiry of the scheduled date of loan.

3. STAFF FINANCE.
Where MCB also permits to its staff members for getting loans when needed
for the following purpose.

a. House Building.
The employee having served for 5 years in the bank, either clerk or an
officer will be granted 80 basic pays as a loan for building house. If
the granted loan exceed Rs. 160,000 the 10% interest rate will be
charged.
b. Motor Cycle Car, and Personal Vehicle.
The car loan may be granted to those employees whose minimum
basic pay is at least Rs. 10,000 and have served for at least 3 years.
The employee will be granted 18 basic pays as loan. If the amount is
exceeding Rs. 160,000 the 10% interest rate will be charged. The
maximum Motor Cycle Loan is 56,000. In this case the officers of
above Grade will pay 5% interest.
c. Over Drafting (OD).
MCB gives the facility of drawing more than the balance to the
reliable and established customer, by over drafting we mean that
 drawing more than the balance held with MCB. After over drafting the
bank will show debit balance of the customer, and will charge interest
on the amount over drawn.

This type of facility is provided occasionally and for short term.

There are three types of over drafts.

1. Temporary Overdrafts.
This type of facility is totally under direction of the branch and
requires no security, but the limit is fixed by the State Bank of Pakistan, MCB
can arrange over draft upto 25,000 rupees.

2. Secured over draft.

It is a continues facility and the branch can not provide it under his
own discretion. Credit Management Division of Head Office sanction is the
sanctioning authority.
3. Clean over Draft.
It is a continues facility and its limit is fixed by the State Bank of
Pakistan. No security is required in this case.
4. Finance Against Imported Merchandise (FIM).
It is a short term facility provided to such importers who are not in a
position of paying and clearing documents due to un availability to funds for
the time being or lack of finance against L.C.
In such cases the importer makes arrangements with MCB, the bank
pledge the imported goods and pays the obligations against L.C. When the
importer pays the amount to the bank he will get goods.

SWOT ANALYSIS OF MCB

MCB AT ITS STRENGTHS WEAKNESSES
OPPORTUNITIES AND THREATS
5.1. MCB AT ITS STRENGTH WEAKNESSES OPPORTUNITIES AND
THREATS.

STRENGTH:
• The largest private sector bank in Pakistan with a network of 1054
domestic, six foreign branches.
• Experience of operations, as the bank was incorporated/established in
1947.
 • Fist bank to privatized which has now become the leader in market
with largest on line ATM network in the country.
• Bank’s emphasis on consumer banking by providing them with
innovative saving schemes, products and services suiting best to their
life style.
• Extension and improvement in services to domestic as well as foreign
customers.
• Attractive and higher interest rates and prizes on various
accounts/products.
• Best and optional policies and attractive compensation packages for
employees, which has really improved their commitment dedication
and hard work towards the accomplishment of bank’s objectives.
• Human resource development and employment of technology towards
modern development.
• 24 hours cash access and safe payment products of high value
transaction.
• MCB instant financing products for customers warning instant loan
facilities at MCB branches.
• Pioneer in introduction of MCB master card with photograph and
rupee travelers cheque (RTC) which minimize the degree of
friskiness.
• Attention and sensitivity to competition prevailing in the country.
• An efficient and experienced private management group also involved
in other interests like; textile and cement industries.
• Easy access to the customers at their residential localities through a
high number of branches.

WEAKNESS.
• Slow down in advances growth in the short term as MCB focuses on
quality customers in the market.
• Customers having accounts with small amounts are not given same
services and dealing given to those with high accounts.
• No of branches is decreasing every year, due to that employees at the
low profitable branches feel unsecured to their jobs.
• Management group is also having huge investments in other interest
like: Textile and cement industries, which may divided their attention and resources
also.
• Political pressures from vested interest group.
• No transparent system of recruitment and selection.

OPPORTUNITIES
• Due To largest ATM network, MCB can expand its 24 hours cash
facilities to other cities of the country in order to meet the growing
market demand.
 • Increasing focus/target on different types of customers, MCB can open
women branches specially in those areas where women class want to
get involved but couldn’t due to environmental restrictions.
• Growing policies of government on business and commerce sector
provides MCB and opportunity to efficiently meet with the business
peoples requirements of instant cash and financing facilities.
• Customers feed back on different products and accounts has really
improved the bank performance and encouraged the atmosphere for
other future policies.
• MCB also has an opportunity to expand its new technological
advancement like: Tele bank and internet banking facilities in order to
serve the customers more efficiently.
• Due to efficient and experienced management group, MCB can also
improve well and expand its foreign operation successfully.

THREATS
• Increasing number of foreign banks in the country.
• Privatization of other domestic banks.
• Highly specialized and attractive services provided by foreign banks to
their customers.
• Un consistency in government’s policies regarding to business and
economic sector.
• Growing global technological advancement.
• Strict regulations by the government over credit facilities to the
customers as well as to meet the prudential regulations.
• Loss of confidence of overseas prospects/customers due to freesing of
accounts.
From SWOT analysis we can conclude that the management of the Bank
should adopt systematic planning for the Bank growth, introduce new schemes
like Mall-a-Mall certificate from this scheme MCB received Rs. 13 billion
deposit from the customers, this is a great achievement for the bank. MCB
have more customers as compare to other banks, if they given proper attention
to every customer then in few year it will be the leading bank of the country.
5.3. CRITICAL ANALYSIS.
Analysis is the most important part of the report, because it depends on
the author, only a good, keen and comprehensive analysis leads to good
recommendations for the improvement of the existing conditions, therefore, in
MCB I have observed mush of thing and have analysis them to the extreme of
my effort MCB faces the following problems.
1. The main objective of MCB is to provide improved services to
customers, but now the bank seem to fail to achieve its objective, its
lengthy procedures as compared to newly established private banks
causes problems for customers.
2. MCB being an established bank now does not fell so much
competition in the market which in long run will not be favorable.
3. MCB is not keeping pace with the changing market environment, the
main reason for which is lack of new policies, and also the existing
policies remain unchanged for a long period of time.
4. MCB being a so established bank upto now used the traditional
procedure and have not adopted a lot the modern banking techniques.
5. Top level management is having a lot of influence in all decision
making, and they always do not consult the lower level management
will not have adequate data about the problems organize at lower level.
6. Sometimes in MCB there arise the overlapping of functions e.g HRD
and training division of HO overlap some of each other functions.
7. In advances department the process of loan sanctioning is very
lengthy, which affect the customer, some time a valuable customer in
big need of money does not get loan in time only due to this lengthy
process.

RECOMMENDATIONS
1. MCB should take care while conducting marketing research and adopting new
policies and procedures for getting its marketing share regarding advances.
2. The existing policies should be reviewed and there should be permanent
revision of these policies from time to time.
3. MCB should adopt once again aggressive strategy because the number of its
competitors is increasing day by day.
4. There should be clear cut delegation of authority and responsibility.
5. All the departmental head should be given full authority and responsibility.
6. Since in MCB there is overlapping of functions, therefore each department
should be functionally defined, and all those departments should be
amalgamated whose functions are similar, to reduce cost.
7. The communication system of the bank should be improved by installing new
equipments.
8. Co-ordination can be improved among different department by adopting
proper channels of communication.
9. Proper survey and research should be conducted before the introduction of
any new schemes, i.e. cost and benefit analysis should be viewed.
10. A secure system for transfer of money should be established and with out the
receipt of legal document no payment should be made. The test key codes
should be revised from time to time and should be kept secret.
11. While credit extension prudential regulations should be kept under
consideration.
12. Loan procedure should not be cumbersome and should be made easy, so as to
case the customers.
13. Prolonged documentation should be avoided.
14. Proper sector wise loan should be disbursed in order that every sector should
get appropriate portion and all these sectors should simultaneously develop.
15. In order to mitigate inefficiency, the management should adopt some
management principles i.e proper job, clear cut division of work should be
introduced.

BIBLIOGRAPHY.
1. Asrar, H. Siddiqi, “Practice and law of Banking in Pakistan”.
5th ed, Royal Book Company, Karachi, 1993.

2. Allen Louis A, “Management and Organizaiton”.

Ist ed, Tokyo McGraw Hill, Kogakusha Ltd.

3. MCB Annual Report, 2001.

4. MCB ATM brochures, 1999.

5. MCB Master Card Brochure.

6. Banking Products and Services of MCB, 1999.

7. MCB Capital Growth Scheme brochure, Yaqeen Art Press.

8. MCB MAHANA KHUSHALI Scheme brochure, Yaqeen Art Press.

9. MCB RTC Brohure 1998.

10. MCB Mall-a-Mall Brochure.

 Table of Contents
Chapter No. Title Page No.
PREFACE
ACKNOWLEDGEMENT
1. INTRODCUTION 1
MCB at Glance. 3
MCB Vision 3
Historical Background of Banking in Pakistan. 4
An Overview of MCB. 5
Nationalization of MCB. 6
Privatization of MCB. 6
MCB today and its progress. 6
MCB Different Products and Schemes 10
2. MANAGEMENT AND ORGANIZATION. 15
Management and Organization. 15
MCB Re-Organization. 16
MCB corporate and consumers Banking. 16
MCB investment Banking group. 18
Departmentation in MCB. 19
Board of Directors. 24
Organizational Chart. 25
3. DEPARTMENT OF MCB MAIN BRANCH 27
MARDAN
SECTION-1
Historical Development of MCB Main Branch 27
Mardan.
Accounts Department of MCB Main Branch
Mardan. 28
Remittance department of MCB Main Branch
Mardan. 34
Organizational chart of MCB Main Branch
Mardan. 36
SECTION-2
Foreign Exchange Department of MCB Main
Branch Mardan. 37
Advances department of MCB Main Branch
Mardan. 43
4. SWOT ANALYSIS. 47
CRITICAL ANALAYSIS 51
RECOMONENDATIONS. 52
BIBLIOGRAPHY. 53
 PREFACE.
Report writing is the last step of Internship Program. It is very important,
because without writing report the whole training process will end in smoke.
Computation and purification of data become fruitful when it comes in the shape of
information. It is very hard to convert data into information, it requires wide span of
time, but in this short time, I collected the rough data and shaped this report.
Since banking is a wide spread profession, it is impossible to jot out each and
every function, so I highlighted few functions of banking.
Being a student of Business Administration I mostly emphasized on functions
of management, but due to shortage of time only touching become possible. I mostly
avoided law and rules and put light on practice. The process of motivation and
communication also slightly discussed, but these are only observed.
This report is consisting of few chapters, like management organization,
departments of MCB, functions like deposits, remittances, improvement in services
after privatization and other general banking items.
Advances are also discussed, since advances are wide spread technical
subject, a bet documentation is undertaken.
The importance of foreign exchange can never be avoided I discussed a few
aspects of foreign currency deposits.
Muslim Commercial Bank is financial commercial institution. It works for
betterment of public economy. I discussed its contribution toward country’s
development and growth.
There are so much stones which are lift unturned. Since this is not a perfect
report, so positive criticism are welcomed.
Ahmad Shah
B. Sc. (Hons) in
Management Sciences
Management Group
Session 1999-2002.
 ACKNOWLEDGMENT
Most humbly I express my thanks to the supreme Ruler, the ALLAH
Almighty, the most Benevolent, ever Merciful, Whose divine helped me to complete
my Internship and this report Successfully.
Then I am thankful to the Department of Business Administration which
provide me such a great opportunity of practical work. In order to enhance my
knowledge about day to day working of the Banking.
I am also thankful to my advisor Haji Javed Iqbal Bhabha, who supervised
my writing activity.
The staff in the MCB Main Branch Mardan was very cooperative, they helped
me a lot in my work.
I am specially thanked full to Mr. Murad Ali who guides me and helped me
during my internship program.
I am also thankful to all the staff of MCB Main Branch Mardan who
co-operated me.

Ahmad Shah
B. Sc. (Hons)
Management Group
Roll No. 01
Session (1999-2002)
Institute of Management Studies,
University of Peshawar.
 CHAPTER # 1
INTRODCUTION
MCB at Glance.
MCB Vision
Objectives of MCB
Historical Background of Banking in Pakistan.
An Overview of MCB.
Nationalization of MCB.
Privatization of MCB.
MCB today and its progress.
MCB Different Products and Schemes
• Net Profit
• Reserve Fund/Equity
• Deposits
• Advances
• Investments
• Recoveries
• Foreign Trade
• Rupee Travelers Cheque
• Human Resources
• Automation
• Social Sector
• Foreign Operations
• Accounts Position of MCB
• Branches of MCB
• Employment Position
MCB Products and Different Schemes.
Capital growth certificate Scheme
Mahana Khushali Scheme
Prime Currency Scheme
Saving 365
Export promotion Scheme
MCB Rupee travellers cheques
HAJ Mubarak Savings Scheme
MCB Mall-A-Mall Rupee Deposit Certificate
MCB (ATMs) 24 Hours Cash
MCB Master Card
 CHAPTER # 2
Management and Organization.
MCB Re-Organization.
MCB corporate and consumers Banking.
MCB investment Banking group.
• Capital Markets.
• Corporate Finance
• Project Finance
Departmentation in MCB.
• Agriculture Division
• Audit Division
• Business Development Marketing Division.
• Central Accounts Division.
• Corporate Affair Division.
• Credit Management Division.
• Finance and Treasury Division.
• Foreign Trade and Exchange Operation Division.
• General Service Section.
• Human Resources Division.
• Information Management Division.
• Industrial Credit Division.
• International Division.
• Investment Banking Group
• Islamization Division.
• Legal Affair Division.
• Organization and Method Division.
• Rupees Traveler cheque and Credit card Division.
• Special Assets Management Division.
• Training Division.
• Board of Directors
• Organizational Chart.
 CHAPTER # 3
SECTION-1
MCB Main Branch Mardan.
Departments of MCB Main Branch Mardan.
Accounts Department
• The Deposit Section
• Functions of the section.
• Opening new account
• Types of Accounts
Current Accounts
(PLS) Saving Accounts
(PLS) Terms Deposits
Remittance Department
In land Remittance
Foreign Remittance
Organizational Chart of MCB main Branch Mardan

SECTION-2
Foreign Exchange Department
• Advances payment
• Open Account
• Documentary Collection
Advance Department
Running Finance
Demand Finance
Staff Finance
 CHAPTER # 4

SOWT Analysis of MCB

• MCB at Its Strength, Weaknesses, Opportunities and Threats.
Critical Analysis.
Recommendations
Bibliography.
 INTERNSHIP REPORT
ON

MUSLIM COMMERCIAL BANK

Main Branch, MARDAN

BY
Ahmad Shah
B. Sc. (Hons)
Management Group
ROLL No. 01
SESSION 1999-2002

Department of
Commerce & Business Administration
Gomal University D.I.Khan.
With
Blessing of Almighty Allah
and
Love and Respect
for
My dear parents
for their Valuable efforts and
contribution in making my
Education a success.