INTERNSHIP REPORT ON

MCB Bank

Main Branch Abbottabad (0585)Submitted by: Sandeel KhanRoll# F-11-001MBA FinanceSupervised by: Dr. Amjad Rafiq Government College of Management Sciences Abbottabad

SESSION: 2011-2015INTERNSHIP REPORT ON

MCB Bank

Main Branch Abbottabad (0585)

Submitted by: Sandeel KhanRoll# F-11-001Supervised by: Dr. Amjad RafiqThis internship report is submitted in partial fulfillment of the requirements for the degree of Master of Business Administration awarded by the Hazara University,

Mansehra

Government College of Management Sciences Abbottabad

SESSION: 2011-2015Government College of Management Sciences

AbbottabadAPPROVAL SHEET

Approval Committee

1. External Examiner

Mr.______________________ Signature______________________

2. Supervisor

Dr. Amjad Rafiq

Signature______________________

Designation Associate Professor 3. Head of department

Mr. Mushtaq Ahmad____________ Signature_____________________ Designation PrincipalDEDICATION

I Dedicate this to my beloved parents, teachers and friendsWho helped me throughout by beingWonderfully supportive and helpful,

For making this report.

I could never have been able to complete this Report.

ABSTRACT

Prerequisite of MBA study is to undergo internship. I got the opportunity to

Join the MCB Main branch for the said purpose for a period of 8 weeks.

Practical involvement was a great experience as interactions both with the experienced executives and clients cemented the base of knowledge I have been acquiring in the classroom.

This internship report includes the material about MCB and different departments along with their working procedure.

For the completion of this project I met the various persons of these organizations. As far as my knowledge and hard work is concerned this report will provide a good in sight of MCB. I have special thanks for following persons who have encouraged & guide me lot. I learned very much under their guidance.Amjad Khan Jadoon (Branch Manager)

Syed Adil Shah ( Forex Officer)

Adnan Riaz Qureshi (Remittence Officer)It is the requirement of the MBA course HAZARA University of Pakistan, which all students of MBA have to spend two months in any organization to get practical exposure and to get familiarized with the ways to live in the organizational environment which is dramatically different from the educational environment. That two months period called Internship Period , if spent properly and sincerely, enables the students to be more confident, more knowledgeable, more responsible and, above all, more committed to its work in the practical field. I have also been assigned to do internship of eight weeks period in MCB. It has enabled me to understand the practical picture and sharpen my decision making power and utilizing the resources in an effective manner, so that my resources generate maximum profit.

In preparing this report, I have put all of my best efforts and tried my level best to give maximum knowledge. Despite of my all the coherent efforts, I do believe that there will always be a room for improvement in the efforts of learner like me.

Table of ContentsChapter 1

INTRODUCTION To The Report

011.1 Introduction

011.2 Background of the study

011.3 Purpose of the Study

011.4 Scope of the study

011.5 Limitation of the study

021.6 Objectives

021.7 Methodology

021.7.1 Primary Data

021.7.2 Secondary Data

021.8 Organization

031.9 HISTORY OF MCB BANK LIMITED

031.10 VISION AND MISSION OF MCB

071.11 Values of MCB

081.12AWARDS OF MCB

091.12.1 EUROMONEY AWARDS

091.12.2 ASIA MONEY AWARDS

10Chapter 2

ROLE OF SECTOR AND ORGANIZATION

122.1 Introduction

122.2 Overall respective sectors in Pakistan

122.3 Commercial Banking In Pakistan

12Chapter-3

ORGANIZATIONAL STRUCTURE OF MCB

153.1 Introduction

153.2 STRUCTURE ON THE BASIS OF EXECUTIVES

163.3Departmentation On The Basis Of Employees Designation

173.4 Geographical Departmentation of MCB

183.5 STRUCTURE ON THE BASIS OF GEOGRAPHICAL LOCATION

193.6 STRUCTURE ON THE BASIS OF FUNCTIONS

203.7Departmentation On The Basis Of Functions

20Chapter-4

DEPARTMENTALIZATION OF MCB AND ITS FUNCTION

224.1 Cash Department

224.1.1 Cash Receipt

234.1.2 Payments

234.2 Account Opening Department

234.3 Clearance Department

244.4 Remittance Department

254.5 Advances Department

254.6. Forms of lending

254.6.1 Cash Finance

264.6.2 Overdraft

264.6.3 Fixed loans

26Chapter 5

PRODUCT AND SERVICES

275.1 Deposits

275.2 Services and Products

285.2.1 Khushali Bachat Account (KBA):

285.2.2 Hajj Mubarak Savings Scheme

285.2.3 Khanam Bachat Account Scheme (KBA)

295.2.4 PLS Savings

295.2.5 Export Promotion Scheme

305.2.6 Credit Cards

305.2.7 Rupee Travelers Cheques (RTC)

305.2.8 Automated Teller Machines (ATM)

305.2.9 Capital Growth Certificate Scheme (CGC)

30Chapter-6

Financial ANALYSIS

326.1 RATIO ANALYSIS

326.2 Explanation of Financial Ratios

386.3 BALANCE SHEET

416.4 Income Statement

426.5 VERTICAL ANALYSIS

436.6 HORIZONTAL ANALYSIS

456.7 RESULT ON THE BASIS OF VERTICAL & HORIZONTAL ANALYSIS

476.8 SWOT ANALYSIS

486.9 PEST ANALYSES

55Chapter 7

FINDINGS AND RECOMMENDATIONS

587.1 Future Prospects of the Organization

587.2 Conclusions

597.3 Recommendations for Improvement

60References

62ACKNOWLEDGEMENT

I express my gratitude to Almighty Allah for his unlimited graciousness because Words are scarce and knowledge is limited to express his majesty. I have the pearls ofmy eyes to admire the blessings of the compassionate, omnipotent, the Merciful and thebeneficent Allah who is the entire source of knowledge and wisdom.Due to his blessings, I become able to contribute this comprehensive assignment towards the deep ocean of knowledge already exist. Heart is warm with love and thoughts have turned to the city of knowledge The Holy Prophet (P.B.U.H) His saying Learn from to Cradle to Grave inspired the strong desire in me to undertake this course of valuable studies. I deem it as a great opportunity to offer my heartiest gratitude to my venerable teacher Dr. Amjad Rafiq, for his great efforts to make us understand and to conduct this kind of activities of giving the great opportunity for learning beyond yourexisting area of scope. I am thankful to bank manager for his nice co-operation and proper guidance throughout my internship. Express my heartiest and sincerest sense of gratitude to all of them for providing megrand exposure to gain multifarious experience, May Allah The Almighty bless myparents and well-wishers who are the permanent source of prayers for me and my successes in this world.Sandeel KhanList of Abbreviations

MCBMuslim Commercial Bank

IDBPIndustrial Development Bank of Pakistan

SBPState Bank of Pakistan

MNCsMulti-National Companies

ADBPAgricultural Development Bank of Pakistan

L/CLetter of Credit

L/GLetter of Guarantee

ATMAuto Teller Machine

APDAssets Product Division

IPDInvestment Product Division

ITInformation Technology

BTFBalance Transferred Facility

NITNational Investment Trust

FCForeign Currency

PLSProfit & Loss Sharing

HRMHuman Resource Management

SBUStrategic business unit

NDFCNational Development Finance Corporation

RTCsRupee Travelers Cheques

MTMail Transfer

ETDElectronic Technology Department

MISManagement Information System

FDDForeign Demand Draft

FSFinancial Statement

ETDElectronic Technology Department

Executive SummaryThis internship report is very vital part of my MBA. The purpose of this report is to explore and learn the potential of Consumer Banking in Pakistan and commercial banking and to find out the challenges & opportunities faced by banking industry. In this report comparison of consumer financing products of local and foreign banks have also been done and the problems faced by borrowers and lenders have also Consumer finance was backed by the SBP to give boost to economic growth through demand-pull pressure. Various instruments of consumer finance have attractions for consumers for reasons that are dictated by personal desires, income constraints, paying capacity, social needs and access to getting loans. Rising interest rates, spiraling service charges and deterioration in quality of service are bringing down the demand for personal loans, credit cards and auto financing. Consumer banking is facing new challenges as a result of interest hikes. The real beneficiaries of consumer finance are the people who did not have capacity to purchase expensive household items in a single go but could afford them because of consumer finance, the commercial banks that have been earning large interest and huge returns on their investment in consumer finance and the economy that got impetus for growth.Local banks are preferred by people for general banking services because of their low charges and wide branch network but for consumer banking people prefer foreign banks because of their good customer service and wide range of facilities. Despite of so many changes in consumer financing regulations banks customers are still facing hidden charges problem, difficulty in getting consumer loans and not highly satisfied by tenure of consumer loans.The banking structure in Pakistan comprises of the following types, State Bank of Pakistan, Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks, specialized credit institutions. The state bank of Pakistan is the Central bank of the country and was established on July 01, 1948. The network of bank branches now covers a very large segment of national economy. The State Bank of Pakistan issues the shares of these periodically. Bank employees and other common peoples can also purchase these shares and earn profit. In 1956, MCB transferred its registered office to Karachi, where the Head Office is presently located. In April 1991, MCB became Pakistans first privatized bank. To open an account the customer has to meet the general banking manager with an introducer. The procedure begins with the punching of account opening form to the customer file i.e. customers master file. Before closing any account, bank send letter to the account hold for informing him that his account is going to be closed. There is need an approval form higher authority to close any account. Current deposits are those which are payable to bank whenever demanded by the customer. Bank does not pay any profit on current deposits. The following are the financial products/services of MCB Malay Mail Scheme, PLS Account, Saving 365 Account, Capital growth certificate scheme, Fund Management Scheme, Khushali Bachat Account, Term/ Fixed Deposits and others like night banking, credit cards, traveler cheques.

In remittance department like any other bank MCB also have instruments for transferring of money, Telegraphic Transfer, Mail Transfer. In cash department both deposits and withdrawals go side by side. This department works under the accounts department and deals with cash deposits and payments. This department maintains the following sheets, books, and ledger of account cash received voucher sheet.

Cash paid voucher sheet, Paying-in-slip, Cheque Book, Cash balance book. The clearing in Karachi at MCB or other banks is being done through NIFT (National Institute of Facilitation Technology).

Bank provides this facility to the people who need advance money to meet their requirement. Party dealing with other banks financial condition of borrower business and as a first step credit proposal is being made. MCB provides advances, which are two types, Secured Advances, Unsecured Advances. MCB usually classified advances in to following types Agricultural Advances, Commercial Advances Industrial Advances. Commercial Advances are of following types

Demand Finance, Cash Finance, Foreign bills purchased, Finance against imported goods, Finance against foreign bills, Export Refinance Part I (Pre Shipment) & others. Banks Agriculture division deals with the agriculture advances. Bank provides the Agriculture Advances in order to enhance and support the agriculture sector of the country. Farm Credit & Non Farm Credit. In foreign exchange, MCB is dealing Foreign Currency Accounts, Foreign Remittances, and Foreign Bills for Collection, Imports & Exports Foreign currency accounts & the foreign currency department deals with the following types of accounts, Dollar Khushali account, Current account, Saving bank account, Term deposit, Prime Currency Scheme. Foreign accounts are convertible on floating rate available to the bank. Letter Of Credit facility is being provided by MCB in foreign exchange.