Internship Report

Internship Report
MCB ( Muslim Commercial Bank)
MCB Banks team of committed professionals is
dedicated to maintaining long term customer
relationships through outstanding service and
convenience

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LIST

OF

ACRONYMS
MCB

Muslim
Commercial

Bank
SBP

State Bank of
Pakistan

EBIT
Before
Taxes

Earning
Interest and

DD
Draft

Demand

TT

Telephonic

Transfer
MT

Mail Transfer

RTC Rupee Traveler Cheque

SEVP Senior Executive Vice President

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AVP

Assistant Vice President

SVP

Senior Vice President

VP

Vice President

GM

General Manager

HO

Head Office

TABLE OF CONTENTS

CHAPTER-1
1.1 BRIEF HISTORY

BRIEF HISTORY

1.2 BANKING IN PAKISTAN

1.3 NATIONALIZATION
1.4 PRIVATIZATION
1.5 AN OVERVIEW OF MCB
1.6 OBJECTIVES OF MCB
1.7 STRATEGIES TO ACHIEVE OBJECTIVES OF THE BANK
1.8 MCB VISION & MISSION

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CHAPTER-2

DIVISIONS\ DEPARTMENTS OF MCB

2.0 DIVISIONS OF MCB

2.1 HUMAN RESOURCE DIVISION
2.2 GENERAL SERVICE DIVISION
2.3 BUSINESS DEVELOPMENT & MARKETING DIVISION
2.4 FINANCE & TREASURY DIVISION
2.5 INDUSTRIAL CREDIT DIVISION
2.6 INTERNATIONAL DIVISION
2.7 CENTRAL ACCOUNT DIVISION
2.8 AUDITS AND INSPECTION DIVISION
2.9 ELECTRONIC AND DATA PROCESSING DIVISION
2.10 LEGAL AFFAIRS DIVISION

2.11 ISLAMIC BANKING DIVISION

2.12 TRAINING DIVISION
2.13 CREDIT MANAGEMENT DIVISION
2.14 DEPARTMENTS OF MCB
2.15 CASH DEPARTMENT
2.16 CLEARING AND COLLECTION DEPARTMENT
2.17 INLAND REMITTANCES
CHAPTER#3

SWOT ANALYSES

3.1 STRENGTHS

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3.2 WEAKNESS
3.3 OPPORTUNITIES
3.4 THREATS
CHAPTER-4

FINDINGS AND RECOMMENDATIONS

4.1 DEPOSITS DEPARTMENT

4.2 REMITTANCES DEPARTMENT
4.3 CASH DEPARTMENT
4.4 BILLS AND CLEARING DEPARTMENT
4.5 ADVANCES DEPARTMENT
4.6 FOREIGN EXCHANGE DEPARTMENT
4.7 OTHER FINDINGS AND RECOMMENDATIONS
BIBLIOGRAPHY

CHAPTER-1

HISTORY OF BANKING

1.1 BRIEF HISTORY

Consensus on the origination of word Bank is not yet reached at. Some authors opinion is that
this word is derived from the words Bancus or Banque, which mean a bench and they further
relate banking business inception to Jews in Lombardy. Other authorities state that the word
Bank is derived from the German word Back which means Joint Stock fund and later on
due to German occupation of Italy, this word was italianated into Bank. Authors quote
Babylonians (few quotes Chinese) who developed banking system as early as 2000. B.C1
A banker is described as a person transacting the business of accepting for the purpose of lending
or investment of deposits of money from the public, repayable on demand or otherwise and
withdraw-able by cheque, draft order and includes any post office savings bank.

1.2 BANKING IN PAKISTAN:

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Banking started in Pakistan after the bold and emergent decision of formulation of SBP on July
30, 1948. Thereafter this sector has witnessed enormous growth. In 1974 banks were
nationalized, in the hope that new era of growth could be achieved through it.
However the process is reverse since 1991, up till now MCB, ABL, and UBL have been
privatized and HBL is in the process of its privatization.
On 14th August 1947, 487 branches of different banks were operating in Pakistan. By 30th June,
1948, 292 branches winded up their business in Pakistan and the remaining 195 branches
restricted their banking operations to a minimum level.
The only bank, which shifted its head office from Bombay to Karachi, was the Habib Bank
Limited. MCB with the assistance of Quaid-e-Azam Mohammad Ali Jinnah, started operation in
July 9, 1947 with an Authorized capital of Rs.3 crores. Indo-Pak subcontinent, the Bank moved
to Dhaka from where it commenced its business in August 1948. And in 1956 the bank shifted its
head office to Karachi, where it is still working.
In 1948 Ms. Ispahanani and Mr. Abdul Hameed Adamjee purchased the bank. At that time the
bank showed a historical performance and profit.

1.3 NATIONALIZATION
In 1974 the government felt a harsh need of nationalization of banks and financial institution and
the 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.

1.4 PRIVATIZATION
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 privatized again. The government of Pakistan transferred the management of the bank
to National group, one of the leading groups in the field of business. They were sold 25% shares.
Now this group has 50% of the total shares. Government has 25% shares and general public also
has the same shares.

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1.5 AN OVERVIEW OF MCB

The MCB was established one month before the independence in June 1947 first head quarter in
Calcutta and after independence it was shifted from Calcutta to Dhaka and afterward its Head
quarter was shifted from Dhaka to Karachi in 1948.
Among the other 22 scheduled banks with 3525 branches network nationalized on 01st January,
1947through the nationalization of Banks Act, 1974 under the nationalization policy of the
Government. MCB was also nationalized and at that time of nationalization Premier Bank was
merged in M.C.B LTD in 1974.
After the failure of the communism, it was realized though the world the idea of nationalization
was not correct and has no any positive effects on economy. This idea developed especially in
1980 decade under which in sub-continent of Asia its importance was also realized. In Pakistan
Privatization and de-regulation policy was started in 1998 under this policy the first unit
privatized was M.C.B, with a view to stable the economy and to reduce the burden on national
exchequer of other sick units.
In 1990 this bank was announced for Privatization on the grounds that 51% shares would be for
general public out of which 26% shares would be offered to a particular party, which will take
administration of bank and lead by Mian Mohammad Mansha who was the first chairman of
MCB LTD.

Now out of 10% shares only 14.90% shares are being held by State Bank of Pakistan and all
other being held by individuals, directors and joint Stock Companies etc (Annual Report of
M.C.B).

1.6 OBJECTIVES OF MCB

The main objectives of MCB are to earn Profit by investing the money of depositors, who cant
utilize that money for getting required return. So the bank invests that money in the shape of
advances and shares, the return or interest
Charged on those advances with the depositors. Beside above-mentioned objectives the Bank
serves the society by facilitating them in the shape of advances to industries, agriculturists etc. it
also provides employment to people; it help in developing economy of the country. It also
provides facilities in doing business with other countries.

1.7 STRATEGIES TO ACHIEVE OBJECTIVES OF THE BANK

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MCB Limited is a business entity and all its activities are directed towards the prime objectives,
which is profit. But the only difference is that it sells intangible products i.e. the services.
Now in order to achieve this important goal, the management has evolved
multidimensional policies. Especially after privatization of the bank on April 1991, a very
enlightened management took the charge of MCB Limited. Mr. Hussain Lawai the renowned and
experienced banker assumed the office of the Chief Executive i.e. the President of the MCB.
Major aspects concentrating are the following:
1.

Effective use of electronic media

2.

Enlighten Personnel Policies

Mainly the whole program was based on the following points.

A)

Special preference was given to MBA's and then to the experienced staff of BCCI.
Ultimately the 1st batch of MBA's was hired in July 1992. The management was
aware of the fact that if you offer peanuts, you will find only monkeys, therefore they
offered attractive packages and thus was able to succeed in skimming cream of the
market.

B) A comprehensive six months theoretical program was devised at MCB Staff Colleges, located
at Karachi and Lahore for providing some reasonable knowledge to the newly hired qualified
staff. The stated theoretical training program was supplemented by the practical branch training.
3.

Compatible Package

After privatization the staff salaries have been revised three times. The first time was 35%, the
second was 32%, and the last one was 20%.

4.

Excellent Working Environment

5.

Modernization of Branches

6.

Launching of New Products

7.

Decentralization of Authority

8.

Effective Reward Punishment Policy.

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1.8 MCB VISION & MISSION

Vision Statement
Challenging and Changing the Way you Bank.

Mission Statement
MCB Banks team of committed professionals is dedicated to maintaining long term customer
relationships through outstanding service and convenience.

CHAPTER-2

DIVISIONS /DEPARTMENTS OF MCB

2.0 DIVISIONS OF MCB

Following are the main divisions established in the head office taking the responsibility of their
respective functions under the guidance and instructions of their respective heads.

2.1 Human resource division

All matters related to staff as pension, provident fund medical allowances, recruitment policy and
other staff matters are dealt here.
2.2 GENERAL SERVICE DIVISION
This division has been created to look after and maintain banks properties. The function of this
division is explained as under:
Purchase or lease branches premises.
Purchase/sale of furniture, fittings, banks vehicles etc.
Proper maintenance of banks assets.

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Looking after communication system.

2.3 BUSINESS DEVELOPMENT & MARKETING DIVISION

This division is established for the promotion of the business of the bank and sets the deposit
targets and then makes the schemes to achieve those targets. The functions of this division are
categorized as under:

Publicity department.
Branches opening/closing shifting.
Shares floatation/government deposits.
Consideration on complaints.
Utility bills collections.
Hajj arrangements.
New and innovative policies.

2.4 FINANCE & TREASURY DIVISION

Finance and treasury division deals with following functions:

Inward and outward remittances are recorded. Surplus funds are utilized (to purchase the shares
of other companies). Balance sheet of the bank is prepared. Public sector advances are released.
The safe custody of the securities is maintained. Declaration of the rates of return on PLS
Account.

2.5 INDUSTRIAL CREDIT DIVISION

Industrial credit division was established in 1983 with the object of providing loans for different
industrial projects and to assist in economic Development of the country and also to invest
money for the purpose of earning profit.

2.6 INTERNATIONAL DIVISION

International division deals with the supervision of the foreign exchange function of branches. It
solves the problems of the branches regarding international trade.

2.7 CENTRAL ACCOUNT DIVISION

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The central accounts division is categorized by the functions as under:

Payment section (purchases and procurement and fringes benefits to executives).

Reconciliation.
Stationery.
Zakat and Usher section.

2.8 AUDITS AND INSPECTION DIVISION

Inspection division is established so as to detect any fraud forgery in the branches and sudden
visits to branches to keep them alert and attentive during banking hours.This department is
working for the improvement of auditing system and continuously searching the best possible
means of inspection for effective auditing. MCB uses the both methods i.e. internal audit and
external Audit.

2.9 ELECTRONIC AND DATA PROCESSING DIVISION

The function of this division is to record the business of the bank with computer programming,
and taking all the transactions and dealings of the bank recorded for the particular period.

2.10 LEGAL AFFAIRS DIVISION

This division deals in following matters:

Handling on property documents sent to them by various circles and head office i.e.
loan documents etc.
Follow up, recovery cases and cases of fraud against employee. The cases against
bank are dealt too.
Give opinion on various accounts i.e. partnership, deceased and pension accounts. It
gives opinions on all-important legal matters.

2.11 ISLAMIC BANKING DIVISION

It is established with the aim of introducing the Islamic Banking at branches in different cities.

2.12 TRAINING DIVISION

The training division is established, so as to train the newly employed staff and the promoted
staff to keep them efficient on service. At Presented their two training centers providing facilities
to new employees in the country which are situated in Karachi and Lahore.

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2.13 CREDIT MANAGEMENT DIVISION

This division generally looks after the credit policy of bank .It also maintains and approves the
advances and loans. It sets the rate of interest over the loan for specific period. It usually receives
applications from intending borrowers and submits the same application to higher authority for
approval.

2.14 DEPARTMENTS OF MCB

MCB is one of the largest private banks of Pakistan. It offers a well-organized structure of
specialized services distributed among its various departments. This departmental segregation
provides MCB with more proper and professional approach and efficient means of performing
each service. Departmentalization makes the services more proficient and specialized procedures
for every job are used.
At each branch level the duties are divided into seven departments. There is a chief manager at
the top level of each branch. He is responsible for the overall performance and working of his
branch. The authority is then divided into two heads at the next level. There is a credit manager
who handles the credit department operations of the branch. The other one is the operations
manager who is responsible for all the rest of the departments. Each branch is divided into the
following departments:

Cash department
Clearing and collection department
Remittance department

Foreign exchange department

Credit department

The functions of each department and their operations are explained as follows:

2.15 CASH DEPARTMENT

The main function of this department is Payment and receipt. It collects and pays money to the
customers, on behalf of their account, through cheques or any other negotiable instruments.
There are three main functions of the cash department:

Payment
Clearing

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Receipts

2.15.1 Payment
The cash department issues payments on request. The checks are received by the department and
after their clearance cash is issued to the check-holder.
The payment deals with that customer who withdraws money through cheques or any other
negotiable instruments. The cashier keeps the record of all payments in the register book. At the
end the payment and receipt cashier checks the balance and count the cash. They verify that both
register cash and the cash in hand are balance.
2.15.2 Clearing
Another main aspect is the clearance of checks. It includes verification of proper date, amount,
endorsements, such as issue stamp, clearing stamp and back-side stamp, and signature. After
proper verification of checks the payments are issued. At the issuance of cash the cash is debited
in the clients account.

2.15.3 Receipts
It is responsible for taking cash deposits from its clients who want to store or invest their surplus
reserves. In the receipt section, the cashier receives money from the customers on behalf of any
individual or the company. Most of the receipt goes through the accounts of the MCB.The cash
receipts are done in two forms:

Collection of money from customers in their accounts

Collection of utility bills

2.15.4 Collection of money from the customer in their accounts

The cash is received from the customers in their accounts. At the time of cash receipt, the clients
accounts are credited.
Every account holder deposit money in his account, they deposit the money through the bank
receive voucher, which is of specific nature i.e. it may be PLS, current or MBKS etc. So the
cashier deposits the money that is received. He keeps in record the voucher no, amounts, a/c no
etc and then presents to the computer department for posting.

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2.15.5 Collection of utilities bills

MCB also offers the facility of payment of utility bills. The customer can deposit electricity, gas,
and telephone bills through the bank. The bills are received, stamped and kept in record. Then it
is posted in the corresponding accounts of the bank in which the money is deposited.
It also provides this convenience to private companies as well. Private companies also deposit
their bills in the MCB accounts, which are similarly received, kept in record and deposited in the
corresponding accounts.

2.16 CLEARING AND COLLECTION DEPARTMENT

Clearing implies a system by which banks exchange cheques and other negotiable instruments
drawn on each other within a specified area and thereby secure payment for their clients through
the clearinghouse at specified time in an efficient way.
The major operations of clearing departments are related to the check verification. This is
divided as follows:
Transfer of checks
Clearing of checks
Clearing department handles check related issues. It handles the checks of different other banks
such as Allied Bank, NBP etc. At the time of cash deposits, different checks from other banks
also come to MCB for deposits. This is the job of clearing department to sort out checks of each
bank. Then the net balance for each bank is calculated and adjusted.

The procedures for check transfer and clearance are as follows:

2.16.1 TRANSFER OF CHECKS
It deals within the inter-bank transfer of checks. Suppose a person X gives a check of MCB to
another person Y who also has an account in MCB, the clearing department will handle it. The
clearing department simply debits one account and credits the other one.

Transfer checks

Gives check

MCB Bank

X account Dr
Y account -- Cr

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2.16.2 CLEARING OF CHECKS

It also deals with the checks of other banks. Suppose an NBP account-holder gives a crosscheck
for MCB. Similarly, MCB account-holders give check to people having accounts in other banks;
these all banks need to clear their overall balances with each other. The clearing department does
this.

Clearing checks
MCB
Account-holder
X

Cross check

NBP
Account-holder
Y

NBP Bank

MCB Deposited

The clearing department makes different envelops for different checks of each bank. It then
sends these envelops to the clearinghouse. In the clearinghouse, representatives of different
banks take the balances of all the checks and the balances are cleared. Now National Institution
of Facilitation Technology (NIFT) takes the job of clearinghouse. It not only separates balances
for each bank but also for each branch. The clearing department of MCB separates checks of
each bank in different envelops and sends it to NIFT. After NIFT sends the checks to other
banks, they send an OK report to NIFT which sends that report back to MCB. This ensures that
all checks are safely deposited in the respective banks.

2.16.3 BILLS COLLECTION

The bills collection is the key department in each branch. The objective of this department is to
receive the cheques of different bank of different area. Often the cheque is drawn to the clients of
another bank or account holder of the MCB and similarly the customer of another bank draw
cheque to MCB account. In both cases the cheque is cleared, endorsement conformed, or takes
the disbursed
Guarantee. And then deposit to the corresponding department or banks or whatever the case may
be.
Shortly the bills are divided in the following two main categories.

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Local bills collection (LBC)

Country bills collection (CC)

2.17 INLAND REMITTANCES

This means transfer of funds from one branch to another within the country through following
banking instruments
Demand Drafts (DDs)
Telegraphic / Telex Transfers (TTs) / Fax Press
Mail Transfers (MTs)
Mail Transfer
When a customer requests the bank to transfer his money from this bank to any other bank or the
branch of some other bank in the city, outside the city or outside the country, the first thing he
had to do is to fill an application form. In which he states that I want to transfer the money from
this bank to that bank by mail. If the customer is the account holder of the bank, it will debit his
account and the concerned officer will fill the six different forms to make the transfer complete.
The five forms used for this purpose are listed below:

2.17.1 Demand Draft (DD):

Demand draft is another way of transfer of money from one bank to another bank. Unlike pay
order, a form is required to be filled for the issuance of the demand draft in which necessary
particulars about the beneficiary and the sender are given. The sender deposits the amount of DD
plus commission and other charges on the bank counter, from where he is given a receipt and in
accordance with this receipt he is issues a demand draft.

2.17.2 Telegraphic Transfer (TT):

With the changing requirements of customers, MCB has introduced a faster mode of transfer of
money. Like DD the sender is required to apply through a form in which he will give all the
necessary details about the sender and the beneficiary. The sender deposits the amount of DD
plus commission and other charges on the bank counter, from where he is given a receipt, the
remittance officials send a telegram to the concerned branch and they make payment to the

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customer. Vouchers are sent by ordinary mail to keep the record. On TT, no excise duty is
charged only commission and telegram charges are charged.

CHAPTER#3

SWOT ANALYSIS

3.1 STRENGTHS

One of the major strengths of MCB is that it has very stable deposit base.
MCB is largest private bank in Pakistan with around 1000 branches, which cover
almost every part of Pakistan.
The bank enjoys competitive advantage over other banks in Pakistan.
The bank enjoys competitive profitability in the industry.
MCB has captured majority of potential customers in Pakistan.
MCB has the accounts of big organizations like OGDCL, PTCL, EFU, PTC etc.
MCB is Successive and Market oriented.
MCB investing huge sums on HR development and training.
Customer default rate is lower as compared to other banks.
MCB has the largest ATM network in the country.
Meeting the challenges of latest Technology by introducing Smart card remit
express, mobile banking etc.
Laying foundation on sound basis; recently for this they met with the ORACLE
representative of South Asia, to purchase ORACLE software for their banking

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system and transform its environment in such a way so as to come in line with
those of other international banks.
Establishment of TFC: Centralized import and export center of MCB in one
special circle taking this extensive burden from branches, whereas no other bank
has done this so far.
Maintaining an Excessive Earning Acceleration, this is expected to result in
substantial value enhancement for investors.
EUROMONEY Awards of Best Bank in Pakistan for best bank in Pakistan, plus
the accolade of best domestic band in Pakistan.
Extensive Management Restructuring to translate into bottom line improvement
for going forward. This includes induction of professionals in strategic business
areas, shedding surplus staff and shutting down loss making low potential
branches. From 1996 onwards some 350 Branches were closed down & releasing
staff of approx 4600 with golden handshake.
Larger Market Share: MCB accounts for 10.4% of total assets, 10.0% of deposits
and 11% of loans in the banking system. So it has a clear edge over smaller banks.
Striving for income: New Team after massive restructuring, is looking to strive for
greater operating income, as is evident from the figure (15) that since 1996 bank
has been able to gain some net positive Profit After Tax amount consistently and
will be aiming to do so in near future.
Perhaps the only large bank in Pakistan to have a formal electronic banking
research cell that is exploring the technical requirements and market size Potential
of Internet Banking.

3.2 WEAKNESS

Decision making process is very slow.

It is not having greater no. of branches abroad.
Though ATM network is the largest in Pakistan, still some potential areas dont have
the ATM.
MCB RTC is useable only in Pakistan.
Some management positrons needed are not professional.
Although most of the branches are computerized now, still some important branches
dont have computers.
Low motivational level; non-aggressive marketing.
Employees dissatisfaction due to ill treatment and improper reward system.
Favoritism and Nepotism in recruitment.
Interest rate is very meager

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Extensive Management Restructuring though beneficial has some negative impacts

on the existing performance of work. Such large scale restructuring results in too
much load on single person plus the fear of being fired from the job at any moment.
Slight neglect as part of human resource management staff. Initially employees were
given a quota of 2 weeks vacation per year or its equivalent amount in Rs. as a
Recreational Activities have been withdrawn. Such program was essential to keep the
employees in high spirit giving that extra bit of time for them to personal life.
It is extremely condemnable that sometime a circular is kept clandestine and not
disclose to the staff by the branch managers which is in line with their needs due to
some inexplicit ulterior motives.
Lack of Job Rotation: Job rotation has not been given due consideration and
employees get bored due to monotony.
No Conspicuous rise in Staff Salary: As part of Human of resource
Management apart from lack of other employees benefit funds, nothing is done to
enhance the staff salary to be used as basic motivational factors in an effort to cut
down the administrative cost by the management.
Prevailing Bias and Prejudice: Senior Junior Consideration may result in tussle in
future. Therefore it is extremely necessary to develop such amicable environment that
builds up harmony.

3.3 OPPORTUNITIES

Leasing sector is growing in Pakistan for the last two to three years which provides
opportunity to MCB to go ahead in this area as well.
MCB is providing Consumer Finances at comparatively lower rates which paves a way to
grab more customers
Financing to small/medium cottage industries will definitely increase its advances and
profitability as well.
Islamic Trading Based Banking can enhance the business of the bank.
Targeting of Hundi/Hawalla through networking and IT potential of MCB.
Profitability is expected to strengthen despite decline in interest rate. The drop in interest
rates is expected to spur the private sector credit growth in an effort to kick-start the
dormant economy serving as impetus for productivity activity in economy; which is
likely to compensate for lower interest margins that result from less than proportionate
drop in deposit rates.
Banking sector fundamentals improving; on the back of economic stabilization, improved
monetary and foreign exchange reserves management by the central bank and drive
against loan defaulters.

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MCB with its large branch network and hence huge, diversified clientele is placed to
benefit from lower NPLs, a new dynamic and cost conscious management, and greater
credit demand on the back of governments conscious initiative towards a deflationary
monetary policy.
Only Operationally efficient banks will benefit from Low Interest Rates: The declining
interest rate environment would lower MCBs cost of equity (COE), thus having a
positive impact on its ROIE COE spread, which in turn allows
MCB to show growth in value creation.
More Focus on consumer banking activities.
Strong earnings momentum expected in future, through focus on loan book growth,
efficient utilization of idle cash and declining NPL.
Deposit expected to grow in future: The Governments decision to lower interest rates has
challenged the banking sector, including MCB, on the deposit mobilization front. At the
same, however, MCBs large branch network coupled with its excellent market standing
compared with other banks offering similar returns on deposits is expected to retain
even bolster its deposit base in future at the expense of less efficient public Sector
competitors.

3.4 THREATS

Other private commercial bank with sound profitability is also a threat to MCB e.g. UBL,
Alfalah, HBL etc.
For the last of many years, Pakistan is facing economic and political instability which is a
big threat.
Afghan war and Iraq war has a deep effect on the economy of Pakistan, which may affect
MCB.
Foreign banks are flourishing in field of consumer financing.
People dont prefer banking culture. They mostly prefer cash transactions.
MCB since 1996 is performing well in all most every department at national level
particularly. However if there is some competition that MCB may expect to face come
from the four nationalized commercial banks, which compete with the MCB in terms of
deposit mobilization at retail level.

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Other banks working on the same phenomena seeking for proficient and efficient staff is
expected to enamor qualified and experienced employees of organization by offering
some brilliant incentives in the form of high salary and other benevolent funds and this
thing may also attract existing efficient staff of MCB. To some extent they seem to be
effective in their efforts.

CHAPTER-4

FINDINGS AND RECOMMENDATIONS

Recommendations are based on the previous sections of a report and are suggestions that the
analyst feels are required to be implemented in order to improve further the standing and position
of the firm in the financial world. These are thus based on the findings and shortcomings noted in
an organization while working with it and then writing on it. Opinions of various capable
individuals are sought who through their real life experiences and deep insight are better able to
judge whether the course of action adopted by the organization is going to prove fruitful or does
it require further improvement in the form of changes in its strategies.
Following are the findings and recommendations for various Departments that were felt are
required while consulting the staff members of Zafarwal Branch.

4.1 DEPOSITS DEPARTMENT

The comparative analyses reveal that MCB has the lowest share of Deposits out of the total in
the market. Since deposits are the lifeblood of a bank, it should attract more customers and
expand its deposit base in the following manner

4.1.1 Simplification of procedures

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The procedure of opening an account should be simplified. The account opening form should be
self-explanatory and include translations in Urdu for those customers who are not well read,
since the fact cannot be ignored that many people do not have a good understanding of English.

4.1.2 No Duplication of activities

Once the account opening form is filled there should be no reason to submit a written application
for opening an account, since it not only is a wasteful and time consuming exercise on the part of
the customer but also makes filing lengthy.

4.1.3 Incentives for depositors

Those who deposit large amounts of money or are old customers of the bank should be given free
credit lines upto a certain limit. Besides, financial advice should be provided to customers in case
there is a change in the market trend before they seek for it.

4.1.4 Integrated marketing approach

All the officers in Deposits Department should be involved in marketing and not just opening
accounts and maintaining their records. This can be done through improving their personnel
relations skills and applying the Uni-Service concept of visiting the potential customers at their
offices and homes.

4.1.5 Performance appraisal

MCB should follow the performance evaluation policy strictly and award those who bring in
deposits and help it increase its market share. Unfortunately, this has been stated in the banks
policy but is not being implemented.

4.2 REMITTANCES DEPARTMENT

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The Remittances Department at the Branch is divided into Inland Remittances and Foreign
Remittances.
Both these are dealt by separate officers and involve using specific stationary and procedures.
The following recommendations are made for this very important Department of the bank

4.2.1 Organizing the department

The Department is spread over the entire bank with no specific person or desk for the purpose.
Usually drafts and telegraphic transfers are made in the cash counter that results in hassle for the
other customers. A senior officer detached from the other officers
Performing inland remittance transactions handles the foreign remittances. It would be better for
them to sit together so that they can benefit from his experience and know how.

4.2.2 Centralized money gram services

The customers receiving funds from abroad have to wait quite long in order to get their money as
the branch sends the application form through fax to the City Branch from where it is confirmed
whether the amount has been credited to the Zafarwal Branch or not. This confirmation takes
long at times and there is always a fear of the bank losing its goodwill in case of lengthy delays.
The service should thus be decentralized and the Hub Branch having the authority of directly
confirming the amount.

4.3 CASH DEPARTMENT

The following recommendations are made for the Cash Department.

4.3.1 Expansion of the cash counter

The Cash Department at the Branch needs special attention in the sense that the cash counter is
small and becomes crowded when there are more than five to six customers to attend. Customers
purchase drafts and other instruments from the very same counter where utility bills are collected
and cash is deposited and withdrawn. Hence, if a new counter cannot be built due to certain
limitations the utility bills should be collected through a window so that the regular customers do
not face any problems.

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4.3.2 Extended timings for cash

In order for the bank to progress and compete with the others in the market, it should extend the
time for accepting and withdrawing cash. The customers face great hardship especially when
they come from far off places and find that the cash counter is closed for the daily transactions.

4.4 BILLS AND CLEARING DEPARTMENT

The following suggestions are made for this Department keeping in view the problems noted in
it.
4.4.1 Career development
It has been noted that the officers taking bills for clearing do not involve themselves much with
the other operations of the bank and thus remain on the very same post and seat throughout their
banking career. This is against the modern day policies of organizations giving their employees
conducive, rewarding and equal opportunities of prospering and growing with it. Thus, the
Human Resource Department at the Head Office should prepare a plan that shows the future
growth potential of the employees based on their job performance and evaluation and make it
known to all.

4.4.2 Job rotation

There should be job rotation of employees especially in this department as it was felt that the
employees here know quite less as compared to the others. This will enhance their capabilities
and help them break the monotony making them find their work more interesting.

4.4.3 Personality nourishment

The clearing officer has less to do with the operations of the bank and thus does not sit at a front
desk of the branch. As a result, he becomes usually casual and relaxed about his apparel. This
leaves a bad impression of the bank when he leaves the premises. A dress code should be
implemented and observed by all the employees in order to build a reputation of the bank.

4.5 ADVANCES DEPARTMENT

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There were certain drawbacks in the application and processing for the loan requests that were
observed at the branch. The findings and the recommendations are as under

4.5.1 Proper documentation

If valid documents are not obtained before sanctioning the loan limit, it becomes irrecoverable in
case of default by the borrower. It has been noted that at times the related officers oblige the
customer by letting him submit the documents later and approving the limit by getting the
Disbursement Authorization Certificate from the Credit Committee. It proves to be very time and
resource consuming afterwards tracing the borrower to bring in the documents. Therefore,
correct and complete documents should be attained before the amount is sanctioned and no
leniency shown in any case.

4.5.2 Computerized record

All the sanctioned cases should have record on the computer as it is easy to access and does not
involve the hassles of maintaining and retrieving large and old files. For this purpose, training
programs should be organized for the Relationship Managers to enable them to have a basic
computer know how. Through this, they would also be able to assess the financial position of the
prospective borrower in minutes by using related financial software.

4.5.3 Verification of security

Physical verification of the security tendered is a must rather than to merely rely on the
documents. It had been noted that where the property to be hypothecated/ mortgaged lay in
remote areas such as the Gadoon Industrial Estate regular physical visits are avoided by the
officers

4.6 FOREIGN EXCHANGE DEPARTMENT

There various shortcomings that were noted in this Department and hence the following
recommendations

4.6.1 Centralization of the Department

All foreign trade related transactions are routed to the Foreign Exchange Department in
Islamabad, which causes unnecessary delay to the customer. In case of haste or pressure from the
importer/ exporter or some other reason the documents sent to the Forex Department are not

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complete or correct the case is sent back to the Zafarwal Branch and it takes yet longer to process
it.

4.7 OTHER FINDINGS AND RECOMMENDATIONS

The following recommendations are for the bank as a whole

4.7.1 Establishment of marketing department at the hub branch

Nowadays no organization can survive in this tough competitive world without having
able to market itself and its products. Keeping this in mind a Marketing Department should be
introduced in all the Hub branches that would easily implement the marketing policies of the
Head Office.

4.7.2 Development of managerial leadership

Good managerial skills make positive contribution towards higher effective results. MCB should
focus on the effective utilization of its human resource by applying the modern style of
management. This can only be possible if political interferences are discouraged especially when
hiring and placing personnel and the recruitment policies are changed to give preference to
M.B.A. and M. Com. Students.

4.7.3 Tests for promotions

A sizeable portion of the officers at MCB is promoted without conducting any tests and
interviews. This results in undeserving people sitting on the managerial posts and steering the
organization away from its goals and objectives in the long run.

4.7.4 Training for credit management

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Special trainings on credit management should be imparted to the staff dealing in financing
activities of the bank. This is very important in light of current loan default scenario in the
economy.

4.7.5 Delegation of powers

Delegating powers to the Department in-charges up to the greater possible extent will most
certainly reduce the workload on the managers and they would be able to perform well by taking
quick remedial actions where necessary. Besides, the spare time will be spent dealing with
matters of more important nature.

4.7.6 Research and development department

A Research and Development Department in MCB will help it to adopt new procedures and
modern techniques that will help the bank to compete with the others. An R&DD should be
maintained at all the Hub Branches that would define the target market For the bank in that
particular area and through its findings suggest measures to improve the performance of
branches there.

BIBLIOGRAPHY
1.

Siddiqui A.H. (1983 P.nos. 16-22) Practice & Law of banking in Pakistan.

2.
Meenai S.A (1984) Money & Banking.
3.
Prof. Dr. Khawaja Amjad Saeed (Financial Institution in Pakistan)
4.
Koontz. (Management. 8" edition page: 8)
5.
Brochures/Leaflets (n.d)
6.
Accounts opening forms of MCB.
7.
Donnelley, Gibson, Ivanceivich (Fundamentals of Management)
Briefings by head of each division department & other officer of MCB