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INTRODUCTION OF SECTOR
The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank. This history of banking is traced to as early as 2000 B.C. Banking in fact is primitive as human society, for ever since man came to realize the importance of money as a medium of exchange, the necessity of a controlling or regulating agency or institution was naturally felt. The priests in Greece used to keep money and valuables of the people in temples. These priests thus acted as financial agents. The origin of banking is also traced to early goldsmiths. They used to keep strong safes for storing the money and valuables of the people. The first stage in the development of modern banking, thus, was the accepting of deposits of cash from those persons who had surplus money with them. The goldsmiths used to issue receipts for the money deposited with them. These receipts began to pass from hand to hand in settlement of transactions because people had confidence in the integrity and solvency of goldsmiths. When it was found that these receipts were fully accepted in payment of debts; then the receipts were drawn in such a way that it entitled any holder to claim the specified amount of money from goldsmiths. A depositor who is to make the payments may now get the money in cash from goldsmiths or pay over the receipt to the creditor. These receipts were the earlier bank notes. The second stage in the development of banking thus was the issue of bank notes. They thought it profitable to lend at least some of the money deposited with them to the needy persons. This proved a profitable business for the goldsmiths. They instead of charging safe keeping charges from the depositors began to give them interest on the money deposited with them. This was the third stage in the development of banking.

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At the time of independence, there were 631 offices of scheduled banks in Pakistan, of which 487 were located in West Pakistan alone. As a new country without resources it was very difficult for Pakistan to run its own banking system immediately. Therefore, the expert committee recommended that the Reserve Bank of India should continue to function in Pakistan until 30th September 1948, so that problems of time and demand liability, coinage currencies, exchange etc. be settled between India and Pakistan. The non-Muslims started transferring their funds and accounts to India. By the end of June 1948 the number of officers of scheduled banks in Pakistan declined from 631 to 225. There were 19 foreign banks with the status of small branch offices that were engaged solely in export of crop from Pakistan, while there were only two Pakistani institutions, Habib Bank of Pakistan and the Australian Bank. The customers of the bank are not satisfied with the uncertain condition of banking. Similarly the Reserve Bank of India was not in the favor of Govt. of Pakistan. The Govt. of Pakistan decided to establish a full-fledge central bank. Consequently the Governor-general of Pakistan Quaid-I-Azam inaugurated the State Bank of Pakistan on July 1, 1948. Thus a landmark was made in the history of banking when the state bank of Pakistan assumed full control of banking and currency in Pakistan. The banking structure in Pakistan comprises of the following types. State Bank of Pakistan Commercial Bank of Pakistan Saving banks. Cooperative banks Specialized credit institutions.

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Commercial banks have been the most effective mobilizers of savings and have been providing short-term requirements of working capitals to trade, commerce and industry.

Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all over the country and in some foreign countries through a network of branches. All these commercial banks were nationalized in January 1, 1974, and were recognized and merged into the following five banks: National Bank of Pakistan Muslim commercial bank limited Habib Bank Limited United Bank Limited Allied Bank of Pakistan

The state bank of Pakistan is the Central bank of the country and was established on July 1, 1948. The separation of East Pakistan and its repercussion in the form of economic depression has caused a lot of difficulties to the banking system in Pakistan. The network of bank branches now covers a very large segment of national economy. The numbers of branches have increased appreciably and there is now on branch of bank for every 3000 heads of population approximately. There is done reasonable growth in deposits from the establishment of Pakistan. Besides this growth, specialized credit and financial institutions have also developed over the years. The Government of Pakistan in the late 90s introducing the need for the privatization of state owned banks and companies. The private sector has accepted the challenge and most
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of the banks are privatized today. 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. Throughout the period of banking history the banks have been expanding rapidly and achieved the desired goal of progress.

THE MUSLIM COMMERCIAL BANK LIMITED

HISTORY:
MCB was founded by ISFHANI and ADAMJEE families in Calcutta on July 9, 1947. MCB is not an overnight success story rather good track of services are responsible for the leaps and bounds progress. After the partition of the Indo-Pak Subcontinent, the bank moved to Dhaka from where it commenced business in August 1948. In 1956, the Bank transferred its Registered office to Karachi, where the Head Office is presently located. Thus, the bank inherits a 52-year legacy of trust in its customers and the citizens of Pakistan The performance of MCB was badly affected by bureaucrat government. In January 1974, MCB was nationalized by Bhutto Government following the bank act 1974 subsequently in June 1974 Premier Bank Limited merged with MCB.

PRIVATIZATION:
When privatization policy was announced in 1990, MCB was the first to be privatized upon recommendations of World Bank and IMF. The reason for this choice was the better

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profitability condition of the organization and less risky credit portfolio which made'' it a good choice for investors. On April 8th, 1991, the management control was handed over to National Group (the highest bidders). Initially only 26% of shares were sold to private sector at Rs. 56 per share.

MCB besides being money financial organization have rendered invaluable services in the economics and social developments of our country. MCB today, represents a bank that has grown with time, experience and Pakistan. A major financial institution, in scope and size, it symbolizes a fully-grown tree. Evergreen, Strong, and firmly rooted.

VISION STATEMENT
To be the leading financial services provider, partnering with our customers for a more prosperous and secure future

MISSION STATEMENT
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We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us.

INNOVATION
We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. Our teams work together for the smooth and efficient implementation of ideas and initiatives.

MCB TODAY
MCB is one of the leading banks of Pakistan with a deposit base of Rs. 368 Billion and total assets over Rs.500 Billion. Incorporated in 1947, MCB soon earned the reputation of a solid and conservative financial institution managed by expatriate

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executives. In 1974, MCB was nationalized along with all other private sector banks.

The Bank has a customer base of approximately 4 million, a nationwide distribution network of over 1,000 branches and over 450 ATMs in the market. During the last fifteen years, the Bank has concentrated on growth through improving service quality, investment in technology and people, utilizing its

extensive branch network, developing a large and stable deposit base.

Launching of different deposit schemes to increase saving level. Increased participation on foreign trade. Betterment of branches and staff service level.

Awards and Achievement

Euromoney Awards Best Bank in Asia Award 2008 MCB has been awarded as a Euromoney Award 2008 for the Best Bank in Asia".
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Best Bank in Pakistan Award 2006 MCB has yet again received the esteemed Euromoney Award for the Best Bank in Pakistan.
Best Bank in Pakistan Award 2005 Best Bank in Pakistan Award 2004 Best Bank in Pakistan Award 2003 Best Bank in Pakistan Award 2001

Best Domestic Bank Award 2000 MCB was awarded as a Euromoney Award 2000 for the Best Domestic Bank in Pakistan". Asia Money Awards The Best Domestic Commercial Bank Award 2005 MCB Continues to shine as once again Asia Money declares MCB as "The Best Domestic Commercial Bank in Pakistan" for the year 2005. he Best Domestic Commercial Bank Award 2004 MCB has a distinction of winning the Asia Money 2004 award for being "The Best Domestic Commercial Bank in Pakistan".HEAD OFFICE

MANAGEMENT OF ORGANIZATION

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ORGANIZATIONAL STRUCTURE

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CORPORATE BANKING:
These are branches which have an exposure of over Rs. 100 million. Usually includes multinational & public sector companies

COMMERCIAL BANKING:
The branches which has a credit exposure of less than Rs. 100 million but having a credit portfolio of more than Rs. 20 million (excluding staff loans) Usually branches in large markets and commercial areas come under this category.

CONSUMER BANKING:
These are the branches which have exposure up to Rs. 20 million and these include all the branches which are neither corporate nor commercial branches. Recently the organizational structure was re-designed as follows: Punjab Sindh NWFP Blochistan Azad J.Kashmir Domestic Overseas

680 243 103 36 14 1146 7

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Total

1183

Furthermore, the bank has some proposals under consideration to open more branches in some European countries and as well as in Japan & china

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OVERSEAS BRANCHES:
Total no. of branches Colombo Mardana Pettah OBU Bahrain Wellawatte EPZ Kandy

7 1 1 1 1 1 1 1

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GENERAL INFORMATION ABOUT MCB

DEPOSITS:
The total deposits of this about to 207.10 million.

NUMBER OF ACCOUNTS:
Accounts in this branch of MCB are as follows:

CURRENT ACCOUNT:
Total numbers of current accounts are 1600

PLS ACCOUNT:
Total numbers of profit and loss accounts are 2120.

KHUSHALI BACHAT ACCOUNT:

These are about to 1200 accounts.

REMITTANCE:
Total remittance of this branch is 27.22 million.

RATE OF INTEREST:
The rate of interest provided by such bank is minimum 4.45% and maximum 9%.

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GENERAL BANKING
It is backbone of banking It is one of the major department of MCB. It further consists of following departments: Operations Department Current Department Remittance Department Clearing Department Cash Department Accounts Department Technology DepartmentOperations Department Clearing Department Remittance Department

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OP ERATIONS DEPARTMENT

TYPES OF ACCOUNTS:
Single Joint Partnership Private Limited Public Limited
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SINGLE:
Only one person can operate this a/c. An individual who can fulfill the requirement of bank can open this a/c. We can call it a personnel or individual a/c. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Letter of Kinship etc.

JOINT:
In case of joint a/c applicant mentions that how much person will operate the a/c. Instruction are given for joint a/c such that the account shall be operated by anyone or more. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Letter Kinship, Additional Signature Form (For Joint Account), Declaration regarding the operator of account.

PARTNERSHIP:
For partnership a/c, along with the application form other requirements needs satisfied. The requirements for this type are National Identity Card Photocopy, Minimum Deposited Balance, Account Opening Form, Registration certificate, agreement among partners and Commencement of business and private registration, resolution of board of directors, commencement of business, memorandum and articles of association and balance sheet etc.

PRIVATE LIMITED:
Such type of account is opened in the name of the businesses having private limited concern and mostly medium business enterprises open such kind of accounts. All the board of directors have to submit the declaration regarding the account operator on the company pad and with the rubber stamp with the signature of the all the members of the

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board of directors. In case of any change in directors bank must be informed regarding that. In case funds are borrowed by the company all the directors approval is necessary rather not only the authorized partner who can be the operator of the account.

PUBLIC LIMITED:
Public Limited A/C type of account is opened in the name of the businesses having Public limited concern and mostly medium business enterprises open such kind of accounts. And terms regarding board of directors are the same as of private limited.

NATURE OF ACCOUNTS:
Current Account PLS Saving bank A/C Khushali Bachat Account (KBA) Saving 365 A/C Basic banking A/C (BBA)

CURRENT ACCOUNT:
In this type of accounts the client is allowed to deposit or withdraw money as and when he likes. He may, thus, deposits or withdraws money several times in a day if he likes. There is also no restriction of amount to be deposited or withdrawn. However, there is requirement of minimum balance maintenance of Rs. 1000/-. Usually this type of account

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is opened by the businessmen. No profit is paid by the bank and no service charges are deducted by the bank on current deposits account. These types of deposits are also exempt from compulsory deduction of Zakat.

PLS SAVING BANK A/C:

This account was started in 1980s after the issuing of banking ordinance in 1980 by Zia Government to develop Islamic banking in Pakistan. In this case customer would be responsible for bearing profit as well as loss. The bank would be within its rights to make investment of credit balances in the PLS saving accounts in any manner at its sole discretion and to make use of the fund to the best of its judgment in the banking business under the PLS system. For withdrawal of larger amount, 7 days notice in writing is required to be given. Minimum balance is Rs.500/= Not more than eight withdrawals in a year allowed More than Rs.15000/= are not allowed to draw Seven day notice is required for big withdrawal Zakat deducted on @ 2.5% Profit calculated on monthly basis Profit paid on annually basis

SAVING 365 ACCOUNT :

This account is newly developed of MCB and it provides flexibility of saving account to business people. Profit on deposits will be payable on daily product basis on balance of RS. 500,000/- and above. However, if balance in the account falls below RS. 500,000/- on
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any day, the product will be ignored. There will be no restriction on withdrawal from the account. Zakat and withholding Tax is also applicable on the account opened under this scheme. Minimum balance is Rs.500,000/= Below minimum balance, profit calculation ignored Profit calculated on daily basis Profit paid on annually basis 10% Withholding Tax on minimum balance Zakat deducted on @ 2.5%

KHUSHALI BACHAT ACCOUNT:

Saving type account Rate of return is 8% per annum Profit calculated on daily basis

Profit paid on half yearly basis Utility bills can be debited through this a/c No charges will be debited for utility payments

BASIC BANKING A/C (BBA):

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Introduced specially for salaried persons. Minimum balance is Rs.1000/= No service charges. Only two transactions allowed, in one month. For more than two transactions Rs.35/- per transaction. Single natured A/C.

ACCOUNT OPENING PROCEDURE:

Following steps are involved in A/C opening,

ACCOUNT OPENING FORM:

form

Firstly the customer fills the account

opening form and provides all the information as provided above. I experienced to fill this

INTRODUCTION:
An account is needed to be introduced. The introduction of a current account holder is accepted for the opening of an account. The introducer should be a branch customer or may be account holder of any branch of MCB; however signatures should be verified by the banker. In certain cases, introduction from bank other than bank MCB may be allowed. Personally known accounts may be introduced by the bank staff. Introduction from an account holder not personally coming to the bank should be verified by the bank.
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STAMPING:
Then it is stamped. Stamps like. BAL sign verified, Sign Admitted Stamp, Sign Verified stamps etc are affixed.

ACCOUNT NUMBER:
When all the procedures are completed than the final approval is taken from the branch manager. After obtaining approval, an account number is allotted to the customer and all the information is entered in to the computer and KYC is filled up. Then that account number is writing on the Cheque Book, Specimen Signature cards and account opening form.

KNOWING YOUR CUSTOMER:

After entering information KYC is filled up. It should be ensured that at the time of filling information in KYC, a customer should be physically present. After this all information is saved in system. I filled KYC form also.

APPROVAL:
This account is further approved by Manager Operations.

SEND FORM TO HEAD OFFICE:

After fulfilling all the requirements and verifying the forms from operation manager the account opening form is sent to Head Office Karachi and make request to issue the printed cheque book. LETTER OF THANKS:
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Subsequent to the opening of an account, letter of thanks should be sent under registered post or courier service to the customer and the introducer.

ISSUANCE OF A CHEQUE BOOK:

After opening an a/c with the bank, the a/c holder can not immediately start operating his/ her account. The cheque book is issued, when a customer will submit a copy of letter of acknowledgement duly signed by him, in case of new account. And for subsequent issuance of cheque book He/she has to make a request once again in the name of bank for the issuance of cheque book and he should mention title of A/C, A/C number, sign it properly and mention the number of leaves requires. Normally a cheque book having at least 25 leaves is issued but it can also be of 50 leaves.

CLOSING OF AN ACCOUNT:
There is no. of reasons of closing an account. Some are listed below: If customer desires to close his account In case of death of one account holder. Bankruptcy of the account holder. If an account contain nil balance or not up to the requirement of rules.

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.

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CLEARINGDEPARTMENT
In clearing department I worked under supervision of MR. Amir Butt. In clearing department and learned about inward and outward clearing and I also learnt about,

MEANING OF CLEARING:
The word clearing has been derived from the word clear and is defined as,

A system by which banks exchange cheques and other negotiable instruments drawn on
each other within a specific area and thereby secure payment for their clients through the Clearing House at specified time in an efficient way.

CLEARING HOUSE
It is a place where cheques are presented, collected from bank branch. It is one of the services provided by NIFT to other commercial banks. NIFT acts as a clearinghouse.

LEARNING IN CLEARING DEPARTMENT

My learning in clearing department was of following things: Procedure of clearing a cheque. Checking of cheques. Inward and outward clearing. Different reasons of returning a cheque.

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Types of clearing stamps.

NIFT:
NIFT stands for National Institutional Facilitation Technologies. Clearing House of SBP has shifted a tiresome part of its work to a private institution named NIFT. NIFT collects cheques, demand drafts, Pay orders, Travelers Cheques, etc. from all the branches of different banks within city through its carriers and send them to the branches on which these are drawn for clearing. After the branches approve the instruments drawn on them, NIFT prepares a sheet for each branch showing the number for instruments and amount in its favor and drawn on it and sends it to each branch. A similar sheet for each bank is also sent to clearing house of SBP where accounts of banks are settled in the same manner. FLOW CHART OF WORKING OF NIFT

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CLEARING PROCEDURE:
Instruments collected are treated as Transfer, Transfer Delivery, Clearing, and Cheque collection.

SCRUTNING OF CHEQUES:
When the instruments are collected from the client. Following things are checked Cheque date, instrument should be neither stale/ nor post-dated. Title

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Amount in figures and words should be the same There should be no cutting and overwriting on the cheque Instrument should not bear any unauthorized alternation. Cheque is crossed. Fund transfer between two banks and branches is called clearing There are two types of clearing Outward clearing Inward clearing
Customer Gives cheque Of MCB to CHQ holder

Outward clearing

Goes where he has his own A/C Bank keeps CHQ and Makes Transaction MCB receives

Outward clearing is to send the cheques to other branch

Other party At evening

There are three types of outward clearing 1. Same day clearing Bank send 2. Normal clearing
That CHQ to 3. Inter city clearing MCB NIFT send 4.

Inward Clearing CHQ next

In the morning time I am received the in ward clearing from the NIFT employee and then I CHQ and checks Morning to that count the instruments which I received and match with the summery which is also attached with these instruments The following Branch whose FLOWCHART OF INWARD CLEARINGThings Name is mention Their own branch instrument On CHQ NIFT transfer Date of instrument Amount to Date of clearing the
Drawer bank Over writing 28 Amount in figures MCB Dr. the A/C Of customer and Amounts in words

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Intercity Clearing
There is the new concept of clearing which is named as intercity clearing. State Bank of Pakistan now revises his policies and introduces this concept, because before this action if any instrument which is belong to out of city. Karachi Lahore Multan Gujranwala Rawalpindi D.G Khan Hyderabad Islamabad Sialkot Bahawalpur Quetta Peshawar

Procedure of Intercity Clearing

First of all receive the instrument from different customers which they present on our branch. Separate these instruments intercity clearing wise. Giving the receiving slip to the customers. Write Down the detail of these entire instruments which I received from customer in to the inter city Clearing Register. Paste the Cross Stamp, clearing stamp and intercity stamp at the front of these instruments face. Dr H-O To Cr A /C

Also charge the commission on intercity Clearing which is RS 200/per instrument. And also made the commission voucher that is account Debit and Mise Earning is Credit Dr A /C TO

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Cr Mise Earning (General)

CHEQUE COLLECTION (C.C):

When cheque is from another city then it is grouped as C.C. Such instruments are processed as cheque for collection. In this procedure SF-37 form is used in Cheque collection. Original voucher with cheque, stamped as C.C along with C.C number is sent to main branch of the responding city which is further sent to NIFT. Whereas Carbon copy with Pay-In-Slip is taken by bank for record purposes.

PAY-IN-SLIP:
It is used for two purposes Whenever we want to deposit cash in our account then pay-in-slip is used by writing amount on it and depositing it to cashier along with money. Whenever we have cheque from any party to be collected in our account we fill pay-in-slip. One part is attached with cheque and another is given to cheque holder as a receipt.

REASONS FOR CHEQUE RETURNS:

In inward clearing sometimes cheques are not passed due to some reasons then cheques are sent back to NIFT along with cheque return memo. Some of these reasons are,

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Cheque incomplete Clearing stamp Required. Drawers sign incomplete Drawers sign different from specimen Post Dated Payment stopped by drawer. Amount in words and figures differ. Insufficient funds etc.

TRANSFER:
When the instruments are collected and paid by the same branch, it is called transfer.

TRANSFER DELIVERY:
When instruments are collected and paid by two different branches of the same bank situated in the same city, it is called transfer delivery A cheque is processed under transfer delivery when it has crossing stamp and is from local branch of MCB

REMITTANCE DEPARTMENT

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REMITTANCE:
Remittance is transfer of funds from one place to another or from one person to another. It is an important service provided by banks to customers as well as non-customers. Since it is not a free service it is a source of income for the bank.

PARTIES INVOLVED IN REMITTANCE

Four

parties involved in remittance: Remitter, Remittee, Issuing Bank, Paying Bank

REMITTER:
One who initiates, or requests for a remittance. The bank charges him a commission for this service. He may or may not be the branchs customer.

REMITTEE:

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A Remittee is also called the beneficiary, or the payee. The person in whose name the remittance is made. A Remittee is also the one who receive the payment.

ISSUING BANK:
The bank that sends or effects the remittance, through demand drafts, telegraphic transfers, or Mail Transfers.

PAYING BANK:
Paying Bank also knows as the drawee branch. The branch from where the instrument is drawn.

TYPES OF REMITTANCE:
Remittance is classified into following four types Inward remittance, instruments received for payment Outward remittance, issuing instrument to the responding branch. Inland remittance, with in same country. Foreign remittance, from one country to another country.

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INSTRUMENTS USED IN REMITTANCE:

Demand Draft (DD) Telegraphic Transfer (TT) Call Deposit Receipt (CDR) Rupees (RTC) Traveler Cheque

Pay Order (PO)

DEMAND DRAFT:
DD is a written order given by the branch of the bank on behalf of the customer to other branch of the same bank to pay the certain amount to the customer.DD are issued for the particular place other than place of issuance. DD applicant or recipient, who might not be

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an A/C holder present it to another bank at a different place requesting it to pay on demand a specified amount of money which is already received to the person named on it.

DOCUMENTATION:
A printed application form is provided for filling in completely and signing by the applicant. After depositing an amount of draft and commission of the bank, duly completed and signed by two authorized officers, then it is handed over the applicant and credit order is dispatched to drawee branch.

TELEGRAPHIC TRANSFER (TT):

TT is fund that is transferred electronically which is remitted on the order of a certain person. In this case the authority is given from one bank to other on the behalf of the customer through telecommunication to debit their inter office account through them and credit their parties account mentioned in TT. But it is not practiced these days frequently.

PAY ORDER:
For this kind of remittance the payer must have the account in the issuing bank. Pay order are more liquid as compared to cheques because cheques may be dishonored while PO cant be. It is written order issued by the bank drawn and
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payable on itself. It is used for local transfer of money from one person to another person.

DOCUMENTATION:
The party who requires a pay order will get a printed application from the bank. He will fill it and deposits the amount and commission.

CALL DEPOSIT RECEIPT (CDR):

It is an instrument like Cheque issued by the bank on account of a customer & in favor of a person, to pay the specified amount. CDRs are issued to make payments, especially when a company goes for some tenders or for purchase of government securities or any contracts with others.

DOCUMENTATION:
The party who requires a CDR will get a printed application from the bank. He will fill it and deposits the amount and commission. The bank enjoys the benefit of keeping funds deposited until the payment is not made.

RUPEES TRAVELER CHEQUE (RTC):

RTC is the traveler cheque are acceptable at all branches of MCB, and they carry dozens o f benefits.

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Security is always being an important issue of concern. TCs provide maximum security while carrying big amounts.

DOCUMENTATION:
First of all RTC-10 is given to customer. It is filled and then cash is deposited to cash department. One copy is for office and one copy is given to the customer and RTC are issued at that time.

NOTE:
At time of my stay in remittance department, there was no issue of CDR, TT, RTC, PO so I were unable to understand its practical aspects, except clearing.

OTHER DEPARTMENTS
There have been some departments which are confidential. CASH DEPARTMENT ACCOUNTS DEPARTMENT ADVANCES DEPARTMENT TECHONOLGHY DEPARTMENT And in TECHNOLOGY DEPARTMENT I got information about ATM and Online Banking and just filled their forms because computer work was not allowed.

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CASH DEPARTMENT

The cash department is the most important department of the bank. In cash department both deposits and withdrawals go side by side. This department deals with cash deposits and payments. The following books are maintained in the Cash Department: Cash Receipt Book Cash Payment Book Cash Balance Book

The officers in this department are called teller and there were 2 tellers Mr. Nazir and Mr. Abrash at the counter. This department is involved in two activities: Cash Deposits, Cash Payments.

CASH RECEIPT BOOK:

The cashier is responsible to receive both the paying-in-slip and cash from the depositor. For depositing the cash into customers accounts, there is need to fill in the paying-in-slip giving the related details of the transaction. The
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cashier check the necessary details provided in the paying-in-slip and accounts the cash and tallies with the amount declared in the slip then cashier fills in the Cash voucher received Record Sheet and assigns a voucher no. to both the transaction being made in the sheet and the slip. The 2nd cashier posts the transaction entries in computer ledger. After posting these entries, computer display before posting balance and after posting. Cashier assigns the stamp POSTED on the voucher to show voucher transaction entries are posted.

CASH PAYMENT BOOK:

The only instrument that can be used to withdraw an amount from an account is the Cheque book. No payments are made by another instrument. When cheque is valid in all respects, the cashier enters the necessary inputs in the computer and posts the entry so that account balance is updated. When cashier posts these entries, computer automatically display the balance before posting the transaction amount, balance after posting. The cashier at the same time maintains the Cash Voucher Received Record Sheet. Then inspects the signature of the customer, cancellation mark of checking officer and stamp of POSTED is placed on cheque before he hands over the cash to customer.

CASH BALANCE BOOK:

At the end of the working day cashier is responsible to maintain the cash balance book. The cash book contains the date, opening balance, detail of cash payment and received in figures,
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The consolidated figure of receipt and payment of cash is entered in the cash book and the closing balance of cash is drawn from that i.e. Opening Balance of Cash + Receipts - Payments = Closing Balance

ACCOUNTS DEPARTMENT
The most important aspect in record keeping of a bank is its accounting system. The basic purpose for maintaining an accounting system is to ensure consistency in record keeping and accounts. The basic requirement for any accounting system is that it should be in accordance with the GAAP i.e. Generally Accepted Accounting Principles. There are two choices available to an organization for an accounting system.

Main Functions of Accounts Department:

The major function of this department is keeping the record maintenance of each and every transaction and prepares reports

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about the amount of deposits and advances and sent to Head office or State Bank of Pakistan on monthly, quarterly and yearly basis. Following activities are carried out in Accounts Department. Budgets and budget review form Income & expenditures. Reports and Reconciliation. Activity checking. Depreciation & Maintenance of fixed assets provision. Maintenance & depreciation of fixed assets.

TECHNOLOGY DEPARTMENT

It includes; Mobile Banking Phone Banking Online Banking

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ATM

MOBILE BANKING:
It helps in getting accounts details and making transactions using mobiles.

PHONE BANKING:
"MCB Phone Banking is available to all customers on a countrywide basis. Customers can dial 111-000-622(without any city code/prefix) from their respective cities Customers enjoy 24x7 Round the Clock Phone Banking Services. MCB is the first bank in Pakistan to offer Centralized connectivity.

ONLINE BANKING:
MCB now offers the facility of on-line banking to its customers through its country wide network of branches. Customers can use the ATMs or the banking counters of any branch for day-to-day banking needs, irrespective of branch where they maintain their accounts.
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There are now more than 250 branches linked through this system and they can transact with each other directly using computer systems and the software named SYMBOLS at their own branches.

ATM (Automatic Teller Machine):

ATM stands for Automatic Teller Machine. This machine is used to transact in one's account without intervention of humans. These machines are basically used for taking cash, confirming balances and requesting statements / cheque books. MCB has the largest ATM network in the country at the moment with almost one ATM at each online branch and also ATM terminals at International Airports covering 27 cities of Pakistan ATMs are operated through a card issued to the valued customers and by application of Personal Identification Number (PIN number). Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard. This contract will enable an ATM card holder to use his account even when he is out of country at all the ATMs where Cirrus logo is displayed. Green Cards are ordinary cards with a maximum withdrawal facility of Rs. 10,000/- in a day. The annual fee for this card is Rs. 300/- only. Gold Cards are special cars with maximum withdrawal limit of Rs. 25000/- in a day. These cards are issued to the persons having more than Rs. 500000/- as their average balance.

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International Cards are issued in collaboration with Cirrus and are useable all over the world with maximum withdrawal facility according to the standards of Cirrus.

ADVANCES DEPARTMENT
Different banks provide loan facility to general public, companies etc. but MCB provides two types of loans that are as under: Fund Base Loans Non Fund Base Loans

FUND BASE LOANS:

In this type of loans cash is directly involved. Bank provides loans in shape of cash. Bank gives credit or limit facility to customers that needed it. In fund based loans there are two further classifications:

Long Term Loans:

Lease facility for car For Machinery For Fixed Assets

Short Term Loans:

Running Finance (R/F)

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Cash Finance (C/F)

RUNNING FINANCE:
The MCB provides overdraft facility to the customers for the working capital requirement. These are the loans which are given to those customers whose business runs through out the year or continuously. Its duration is one year and it is for running business.

In advances there are two securities one is known primary security and other is secondary or collateral security. Hypothecation of stock is the primary security and mortgage is the secondary or collateral security.

SECURITIES FOR FUND BASE LOANS:

Hypothecation of Stock Mortgage Pledge
HYPOTHECATION OF STOCK:

In hypothecation of stock the possession of goods and the title remains in the favour of customer. Without the permission of the bank the customer can't sell the stock. It is the restriction of the bank that in god own there should be stock according to the
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instructions of bank every time. The draw back of this is that there is no check and balance of stock from the bank. The customer can easily sell his stock.
MORTGAGE:

The bank can mortgage the immovable property like land, building etc as a security. In mortgage the possession remains to customer and title of goods remains to bank.

PLEDGE:
In this, bank requires the moveable property of the customer as a security like stock, vehicle etc. possession of goods remains to customer and title in the favor of bank. The bank hires a muqaddam [Guard] and the key of store where the stock is pledged is in the security of bank. When customer wants to sell the stock then he pays the amount equivalent to stock which he wants to sell. After receiving amount bank releases his stock for the same amount

NON FUND BASE LOANS:

In non fund based loans cash is not directly involved but bank gives guarantee on the behalf of customer. Bank works as a third party and known as Guarantor. Bank provides a security to customer when he needs and someone requires from the customer.
DOCUMENTS REQUIRED BY BANK FOR ADVANCES:

Request of customer
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Credit from bank Basic borrower sheet Net worth certificate CIB report Financials Account statement Property report evaluation application For sale value

certificate Property documents Title deed [fard] Property map CNIC Account opening form Undertaking

INITIAL INFORMATION:
Following information is required to be submitted to bank. Nature & structure of borrower business Names of proprietors, partners or directors Detail of all firms or companies associated with borrower.

Financial condition of borrower business An assessment of his business abilities Accurate and up to date financial statements of last two years for comparison purposes

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Market report on the borrower where borrower has maintained an account with another bank, a report from his bank should also be obtained. A report from credit standing bureau of State Bank of Pakistan

PREPARATION OF CREDIT PROPOSAL:

At first a formal application for credit approval is obtained from the party along with complete group position. The partys credibility report is obtained from the bank with which the bank is doing its business. The partys credibility report is also taken from the Head office of Trade Information Division. For obtaining credit, party has to submit the last two years Balance Sheet and Profit & Loss statement duly attested by authorised auditors. If the party is also involved in export or import business then the bank also considers the data of three years about import & export. Current debt and equity ratio is also calculated by the bank.

Sanction Advice:
When the documents required are complete and there is no ambiguity then the party is advised that their credit or loan is approved and will be available to you soon. Nature and amount of limit. Purpose Security/ Collateral
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Margin (%). Mark up/ Charges Validity

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Structure of Finance Department

RATIO ANALYSIS
Ratio analysis is an important and old technique of financial analysis. Ratios are important and helpful in the reference that: These simplify the comprehension of financial statement and tell the whole story of changes in the financial conditions of the business.

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These provide data for inter-firm comparison. The ratios highlight the factors associated with successful and unsuccessful firms, also reveal strong and weak firms. These help in planning and forecasting these can assist management in its basic functions of forecasting, planning, coordination and control. These help in investment decision in case of investor and lending decision in case of Bankers etc. However, the ratios are only indicators, they cannot be taken as final regarding good or bad financial position of the business other things have also to be seen.

ADVANTAGES OF RATIO ANALYSIS:

It helps to give comprehensive financial statements in evaluating aspects of any undertaking in respect of financial health, operations efficiency and profitability. It gives a chance of inter-firmcomparison to measure efficiency and helps management to resort to some remedial measures. It provides a good help in decision making for investors and the financial institutions.

CATEGORIES OF RATIO ANALYSIS:

Liquidity ratios Activity ratios

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Debt ratios Profitability ratios Market ratios

LIQUIDITY RATIOS
The liquidity of a firm is measured by its ability to satisfy its shortterm obligations as they come due. Liquidity refers to the solvency of the firms overall financial position i.e. the ease with which it pays its bills. Due to low or declining liquidity firm moves towards financial distress and bankruptcy.

CURRENT RATIO:
The current ratio, one of the most commonly cited financial ratios, measure the firms ability to meet its short-term obligations. It is expressed as follows: Current asset Current ratio =
Years Current ratio

Current liability
2010 1.42 2009 1.02 2008 1.31

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RESULT:
From the above ratios it is clear that the firms investment in current assets has increased. In 2010, it is in better position to pay its obligations as they come due. But in three years we can see that the firm has the ability to pay its current liabilities efficiently. The standard for this ratio is 2:1 it is calculated by the current assets by total of the current liabilities. This ratio is below the standard. The management should take steps to improve the short- term financial position of the firm.

DEBT RATIO
The debt position of a firm indicates the amount of other peoples money being used to generate profits. In general, the financial analyst is most concerned with long term debts, because these commit the firm to a stream of payment s over the long run. The debt ratio measures the proportion of total assets financed by the firms creditors. The higher this ratio the greater the amount of other people money being used to generate profit. The ratio is calculated by following formula Debt ratio = Total liabilities Total assets

Years

2010

2009

2008

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Debt ratios 0.864958 0.860627 0.877075

RESULT:
The ratio indicates the more than half of the assets financed by the debt. This ratio is almost showing the same trend throughout the previous three years. Debt ratio indicates the greater the risk and more financial leverage it has. It also shows that firm has paid some portion of the debt during the year 2010.

MARKET RATIOS
Return on total assets Return on equity Earnings per share

RETURN ON TOTAL ASSETS:

It measures the overall effectiveness of management in generating profits with its available assets. The higher the Return on total assets better will be the performance.

Earning available for common stockholders Return on total assets =

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Total assets

Year ROA

2010 5.030%

2009 5.505%

2008 5.219%

RESULT:
The return on investment of the firm is 5.03 % in 2010. It is less than the previous year. It shows that firm generates Rs.5.03 for each Rs.100 of the investment which is very poor for the company progress.

RETURN ON EQUITY:
Earnings available for common stockholders Return on total assets = Total Equity

Year

2010

2009

2008

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ROE (%) 28.313 34.73238 34.448881

RESULT:
The return on equity of the firm is 28.313% in 2010. It is less than the previous year. It shows that firm generates Rs.28.313 for each Rs.100 of the investment made by the partners or shareholders of the company (which are privately owned by four brothers).

EARNING PER SHARE:

Year EPS

2010 24.38929

2009 26.16947

2008 22.95

RESULT:
This ratio indicates the amount of income earned by the common stockholders. Above figures clearly show the progress of the

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company and it maintains this ratio more than Rs.20 which is good for the investors.

VERTICAL ANALYSIS:
In vertical analysis each item of a financial statement is presented as a % age of the total of items or some other suitable items.

HORIZONTAL ANALYSIS:
In vertical analysis each item in financial statement of the last year is considered as a base of the same items. BALANCE SHEET AS AT 31 December 2010,2009,2008

2010
(Rs. In '000') ASSETS Cash and balances with treasury banks Balances with other banks Lending to financial institutions Investments Advances operating fixed assets deferred tax assets 39,631,219 4,106,526 4,100,079 97,790,391 262,508,830 17,320,485 -

2009
(Rs. In '000')

2008
(Rs. In '000')

39,683,883 3,867,591 1,051,372 115,358,590 218,959,786 16,082,781 -

32465976.00 6649659.00 21081800.00 64450761.00 198236682.00 9073276.00 174886.00

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Other Assets 19,828,228 445,285,758 LIABILITIES Bills payable Borrowings from financial institutions Deposits and other accounts Sub-ordinate loans Liabilities against assets subject to finance lease Other liabilities 10,551,468 22,663,840 330,245,080 440,295 21,252,942 NET ASSETS 385,153,625 60,132,133 REPRESENTED BY: Share capital Reserves Unappropriated profits 6,282,768 36,772,321 11,065,723 Minority interest 54,120,812 69 Surplus/ (deficit ) on revaluation of securities 54,120,881 6,282,768 34,000,927 7,054,472 47,338,167 63 47,338,230 5463276 24662446 6278593 36404315 52 36404367 10,479,058 39,406,831 292,088,347 479,232 1,183,586 11,716,465 355,353,519 57,547,322 11177125 300992830 42185119 7089678 23943476 257185110 1597440 17,896,838 412,900,841 11044909.00 343177949.00

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6,011,252 60,132,133 10,209,092 57,547,322 5780752 42185119

Income Statement For the Years 2010,2009,2008 2010 Rs. In '000' 40,049,50 Mark-up /return/ intertest earned Mark-up/ return/ interest expensed 5 11,592,922 28,456,58 Net Mark-up /return/ intertest income Provision for diminution in the value of investment - nrt Provision against non-performing loans and advances - net Bad debts written off directly 3 2,683,994 1,335,127 4,019,121 24,437,46 Net mark-up /interest income after provisions Non-mark-up / interest income Fee, commission and brokerage income 2,878,663 2,772,615 2325171 2 20867884 20092970 23932935 105269 2959583 199 3065051 21275707 121197 1014540 47000 1182737 31791754 7858819 25784853 4509146 2009 Rs. In '000' 2008 Rs. In '000'

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Income earned as trustee to various funds Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealized loss on revaluation of investments classified as held for trading Other income - net Total non-mark-up / interest income 1,201,834 5,929,848 30,367,310 Non-mark-up / interest expenses Administrative expenses Other provision / (reversal) - net Other charges Total non-mark-up / interest expenses Share of profit of associated undertaking Extra ordinary / unusual item Profit before taxation Taxation Current year Prior years 7387345 6,463,560 -865344 -1294586 5709140 593906 7580302 5,440,305 10120 (3,743) 920991 642,780 8511413 6,079,342 30843 1,223,633 21886740 22,526,311 18930813 6505576 11411 66708 6583695 474030 1,002,160 6,514,136 27,382,02 0 25040478 577703 4947508 21,867 451,312 727,564 748,139 (99,531) 5,859 535,813 693,408 1,507,610 (3,329) 483 746276 692010 605865

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Deferred Share of tax of associated undertaking 16348 25164 6563513 Profit after taxation 899,898 15,769 6,084,641 61213 25675 6389934 12540879

15323227 16,441,670

Basic and diluted earnings per share - after tax

24.39 26.17

19.96

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VERTICAL ANALYSIS
BALANCE SHEET AS AT 31 December 2010 2010 ASSETS Cash and balances with treasury banks Balances with other banks Lending to financial institutions Investments Advances operating fixed assets deferred tax assets Other Assets total assets LIABILITIES Bills payable Borrowings from financial institutions Deposits and other accounts 2.37 5.09 74.16 2.54 9.54 70.74 2.07 6.98 74.94 4.45 100.00 4.33 100.00 % 8.90 0.92 0.92 21.96 58.95 3.89 2009 % 9.61 0.94 0.25 27.94 53.03 3.90 2008 % 9.46 1.94 6.14 18.78 57.76 2.64 0.05 3.22 100.00

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Sub-ordianted loans Deferred tax liabilities Other liabilities total liabilities 0.10 4.77 86.50 0.12 0.29 2.84 86.06 0.47 0.00 3.26 87.71

REPRESENTED BY: Share capital Reserves Unappropriated profits total common stockholder equity Surplus/ (deficit ) on revaluation of securities total liabilities & equity 1.41 8.26 2.49 12.15 1.35 100.00 1.52 8.23 1.71 11.46 2.47 100.00 1.59 7.19 1.83 10.61 1.68 100.00

Income Statement For the Years 2010,2009,2008 2010 Mark-up /return/ intertest earned Mark-up/ return/ interest expensed Net Mark-up /return/ intertest income Provision for diminution in the value of investment - nrt Provision against non-performing loans and advances - net 100 2009 100 2008 100 17.49 82.51 0.47 3.93

28.95 24.72 71.05 75.28 6.70 3.33 0.33 9.31

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Bad debts written off directly Total Provisions Net mark-up /interest income after provisions 10.04

0.00 9.64

0.18 4.59 77.93 0.00 0.00 9.02 0.00 2.89 2.68 2.35 0.00 0.00 2.24 19.19 97.11 0.00 25.23 0.04 0.26 25.53

61.02 65.64 0.00 0.00 0.00 8.72 0.02 1.69 2.18 4.74 0.00 -0.01 3.15

Non-mark-up / interest income Fee, commission and brokerage income Income earned as trustee to various funds Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealized loss on revaluation of investments classified as held for trading Other income - net Total non-mark-up / interest income

0.00 7.19 0.05 1.13 1.82 1.87 0.00 -0.25 3.00

14.81 20.49 75.82 86.13 0.00 17.11 -0.01 2.02 19.12

Non-mark-up / interest expenses Administrative expenses Other provision / (reversal) - net Other charges Total non-mark-up / interest expenses

0.00 18.93 0.03 2.30 21.25

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Share of profit of associated undertaking Profit before taxation Taxation Current year Prior years Deferred Share of tax of associated undertaking 0.08 3.85 1.84 73.42 0.00 22.14 2.30 0.24 0.10 24.78 48.64

54.65 70.86 0.00 0.00

18.45 20.33 -2.16 0.04 0.06 16.39 -4.07 2.83 0.05 19.14 51.72

Profit after taxation

38.26

Basic and diluted earnings per share - after tax

24.39 26.17

19.96

HORIZONTAL ANALYSIS

BALANCE SHEET AS AT 31 December 2010 2010 ASSETS Cash and balances with treasury banks % 122 2009 % 122 2008 % 100

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Balances with other banks Lendings to financial institutions Investments Advances operating fixed assets deferred tax assets Other Assets 180 130 LIABILITIES Bills payable Borrowings from financial institutions Deposits and other accounts Sub-ordianted loans Liabilities against assets subjectto finance lease Deferred tax liabilities Other liabilities 190 128 NET ASSETS 143 105 118 136 149 95 128 148 165 114 30 100 100 100 100 100 100 100 100 100 162 120 62 19 152 132 191 58 5 179 110 177 100 100 100 100 100 100 100 100

REPRESENTED BY: Share capital 115 115 100

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Reserves Unappropriated profits 149 176 149 Minority interest 133 149 Surplus/ (deficit ) on revaluation of securities 104 143 Income Statement For the Years 2010,2009,2008 2010 % Mark-up /return/ intertest earned Mark-up/ return/ interest expensed Net Mark-up /return/ intertest income Provision for diminution in the value of investment - nrt Provision against non-performing loans and advances - net Bad debts written off directly Total Provisions Net mark-up /interest income after provisions 339.82 121.62 155.32 257.10 133.75 2214.57 131.60 2009 % 123.30 174.29 112.49 86.86 291.72 0.42 259.15 103.86 2008 % 100 100 100 100 100 100 100 100 138 112 130 121 130 177 136 100 100 100 100 100 100 100

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Non-mark-up / interest income Fee, commission and brokerage income Income earned as trustee to various funds Dividend income Income from dealing in foreign currencies Gain on sale of securities - net Unrealized loss on revaluation of investments classified as held for trading Other income - net Total non-mark-up / interest income 208.04 119.86 121.27 Non-mark-up / interest expenses Administrative expenses Other provision / (reversal) - net Other charges Total non-mark-up / interest expenses Share of profit of associated undertaking Extra ordinary / unusual item Profit before taxation Taxation Current year 129.40 113.21 100 115.61 118.99 100 116.52 88.69 1380.63 129.28 6.51 83.63 -32.80 963.57 92.34 258.13 100 100 100 100 100 173.47 131.66 109.35 100 100 100 123.80 4527.33 60.48 105.14 123.48 119.24 1213.04 71.80 100.20 248.84 100 100 100 100 100

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Prior years Deferred Share of tax of associated undertaking -145.70 26.71 98.01 102.72 Profit after taxation Basic and diluted earnings per share - after tax 122.19 122.19 -217.98 1470.11 61.42 95.22 131.10 131.11 100 100 100 100 100 100

RESULT ON THE BASIS OF VERTICAL & HORIZONTAL ANALYSIS:

From the above mentioned analysis following are my Result about the Operations of branches of MCB for the year 2010, MCBs income by operations has been increased by 122.19% than 2009. Companys Total Assets in Pakistan has been increased by 130% than 2009. Deficit has been decreased by 104 % in comparison with year 2009 Due to financial crisis in the world investment activities are slowed down in year 2010 and they are decreased by 152% than year 2009. Due to its sound financial policies MCBs borrowing from financial institutions has been decreased by 95 % than year 2009.

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SWOT ANALYSIS
The overall evaluation of a companys strengths, weaknesses, opportunities and threats Strengths (S) include internal capabilities, resources and positive situational factors that may help the company to serve its customers and achieve its objectives Weaknesses include internal limitations and negative situational factors that may interfere with the companys performance. Opportunities are favorable factors or trends in the external environment that the company may be able to exploit to its advantage. And Threats are unfavorable external factors or trends that may present challenges to performance.

A scan of the internal and external environment is an important part of the strategic planning process. The SWOT Analysis provides information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates.

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MCBs SWOT ANALYSIS

STRENGTHS
MCB is the first Pakistani privatized bank and because of its quality management, marketing, innovation in products and services. Owing to all such factors they have established a good reputation in the banking market. The name of MCB makes you recall the highly cooperative and professional individuals ready to serve you with maximum zeal and zest. The joining of experienced people, advanced management, advance setup and facilities gave MCB an edge over its competitors.

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MUSLIM COMMERCIAL BANKS IMAGE:

MCB is a reputable financial organization and is well known all
over the Pakistan. services. Perception is of producing a high quality

CUSTOMER CARE:
The Bank not only provides high quality services but it also look for the comfort and convenience of the clients, MCB always preferred their customers.

MARKET SHARE:
MCB has covered much of the potential market and the net profit is increasing years after years. Deposits and advances have sufficiently increased.

LARGE NUMBER OF DIVERSIFY PRODUCTS:

This is also its main strength as it has diversified in many products such as: Debit Card Visa Card

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Car Financing Agriculture Financing

BRANCH NETWORK
It is the greatest strength of the Bank. In 2004, five more branches were added to the network and by the end of the year 2005 the total number of branches was raised from just 53 to 143. MCB has also planned to open more branches in next coming years.

SOUND MARKETING:
Skillful marketing of the products is being achieving countrywide goals of Muslim Commercial Bank Limited.

PHONE BANKING:
Every account holder can conform its balance on Phone and may ask for any query. There are also 24 hours help lines for customers.

MOBILE BANKING:
It has been launched recently. It helps in getting accounts details and making transactions using mobiles.

HIGHLY AUTOMATED BANK:

MCB in Pakistan is the also in the list of highly automated banks, about 750, like Emirates because of its modern style of banking through fully computerized control and twenty four hour banking.

FASTER BANKING SERVICE:

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MCB have faster banking services that are making it more prominent in the banking industry especially in operations and Foreign exchange. The customer prefers this bank not only because of its faster speedy service rather due to reasonable service charges.

INTERNATIONALLY DESIGNED PRODUCTS:

MCBs products are internationally designed products. These are valuable and operational in all over the world.

CONTRACT WITH CIRRUS:

Now MCB has also entered into a contract with Cirrus which is a subsidiary of MasterCard. This contract will enable an ATM card holder to use his account even when he is out of country at all the ATMs where Cirrus logo is displayed.

WEAKNESSES
ADVERTISEMENT:
The majority of people are not well aware about the products of MCB. Therefore it should advertise extensively especially RTC and Master Cards.

ACCOMMODATE BEHAVIORALLY:
A behavior has been noted that bank tries to feel at ease with good looking, rich and educated people and the poor looking customers

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feel some bit strange in the environment of the bank. The bank employees should try to accommodate behaviorally all type of customers.

MISMANAGEMENT OF TIME:
Mismanagement of time is another big mistake in MCB branches, the bank official time of closing is 5:30pm but due mismanagement of time allocation and work the staff is normally on their seats till 7:00 or 8:00 clock.

AND ALSO,
Costly documents are required for loan sanctioning. Some times bank also never meets stated rate of profit

OPPORTUNITIES
PRIVATIZATION:
As on December 31, 1998, sixty-eight scheduled banks with 9,106 branches are operating in Pakistan. As on this date, total population of Pakistan is 140.03 million. Total number of personal accounts with all scheduled banks as on December 31,1997, are 28.98 million. If we consider the population statistics of working age group as on December 31,1997, it stands to the figure of 96.64 million. Thus we can say those 28% of working age people of Pakistan are having accounts with banks while 72% are unbanked.

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The need of privatization has made people to switch to banks to satisfy their needs of lending and borrowing. This not only increases the deposits but also the credit business.

DIVERSIFICATION:
They may enter in New business or any other consumer-durable product in order to promote their name, by introducing Loan for the students, small businesses, and handicraft industry.

SOME MORE OPPERTUNITIES:

Information Technology. Credit cards can give more earning. Establishing more foreign Branches. They should introduce Student Finance Facility. They should also introduce mobile ATM

THREATS
CHANGE IN GOVERNMENT POLICIES:
Change in government policies has affected the banking business. Still banks have to wait to get permission of state bank. The freezing of foreign currency accounts is a vital example of letting people not to trust on banks.

COMPETITION:
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The Competition has become severe by the entrants of so many banks, So to exist one will have to prove himself in its services through excellent management and will have to satisfy its shareholders. Otherwise he will be out the market.

LOW INVESTMENT:
The decrease purchasing power of consumer in the current economic situation of the country affecting the business activity speed too much and the result is the low investment from the investors in new projects can create problem for the bank because it is working a lot in trade.

STATE BANK REGULATION:

As the Bank introduces unique products so they face problem if State Bank Of Pakistan employ taxes on them which force them to increase the rate of Interest.

EXPECTATIONS OF THE PEOPLE:

Due to huge competition among those banks and MCB,, people are the basic beneficiaries from it and thus their expectations tend to increase about the products and the relative rate of interest thus creating a threat for MCB.

SOME BANKS ARE OFFERING KISAN CARDS.

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PEST ANALYSES
PEST analyses tell How Political, Economical, Social and technological factors affect MCB. These are the external factors which affects the whole organization.

POLITICO-LEGAL FACTORS:
Stable government Stable policies in favor of business Improved relation with outside world Law and order.
UNSTABLE GOVERNMENT:

Due to this reason foreigners hesitate to invest their savings in banks, as a result of economy of our country is going downward and banks suffer.
ADVERSE LAW AND ORDER SITUATION:

The situation of law and order is adverse. The policies are not very handy and beneficial for the country. The Govt. passes such rules which are not in the favour of bank e.g. The Govt. of Pakistan has passed a rule that if anyone withdraws more than Rs.25000 then he will be charged 0.30% on withdrawal.

ECONOMIC FACTORS:
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Pakistan's economy is going weaker and weaker. 9/11 has a great influence on the economic crisis of all over the world. With economic factors the bank influenced very much that are as und Low interest rate Inflation Low GDP growth Budget deficit Increase in Govt. duties Fluctuation in exchange rates

SOCIAL FACTORS:
Social environment includes family, friends, a person's role and status. An individuals life directly by society and the person acts according to his or her society. Cultural environment includes norms, values, religion, conception and perception. If we see the religion point of view then interest is not allowed that's why most of the people hesitate to invest their savings in banks and yet they are not aware of ISLAMIC BANKING. Traditional business men do not like the business with bank. They pay their creditors through cash not through cheque. They do not want to get the bank facilities.

TECHNOLOGICAL FACTORS:
Today is the era of technology. In the every aspect of life technology plays an important role.

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Due to rapid change in technology every bank has to change its technology to compete other ones. Increasing issue of securities due to technology resulted increase in cyber crime. Cyber crime means manipulation. One person can easily transfer amount from any other's account to his account.

SUGGESTIONS & RECOMMENDATIONS

Following are some suggestions for Muslim Commercial Bank, Ltd.

ADVERTISING:
Bank must let potential customers know that all attractions for banking exist. This is done by advertising on television and obtaining press coverage, in conjunction with direct mail, window displays, leaflet in branches and in appropriate other locations (such as hotels, shops, etc.) and including leaflets in statement of accounts sent to existing customers in the hope that they will tell potential customers about the services provided by our bank.

INCREASED ATMS LOCATIONS:

Some personal sector customers prefer not to come to branch. They increasingly want to deal with the bank in other ways, such as home
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banking or use of Automated Teller Machines (ATMs), which need to be at every branch or some important shopping plazas and airports etc.

INCREASED SERVICES:
One way to retain the customers is to offer a wide range of services such as tax advice, free life insurance equivalent to amount deposited, shares portfolio management, fund management facility, etc., complimentary to the core services. Banks must have a slightly different mix of services and mean of providing these such that customers can choose the mix that suits them best.

MANAGEMENT OF TIME:
There should be a good management of time for the sake of employees i.e. offering them free break hours instead of making them work in this time as well.

GROWTH SCOPE FOR EMPLOYEES:

MCB should provide greater facilities to its employees, and give them bonuses for their hard work and Promotions as well. There is a criticism on the banking management that the salaries of the employees are decreasing in every succeeding year. And I think this will shake the confidence and working habit of the employees

BANKING PROFESSIONALS:
The bank should hire banking professionals having experience in their respective fields that will boost the performance of the
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company as currently MBAs are produced for this field so they should be hired for enhancing the performance of company.

ATTRACT CUSTOMERS:
The banking company should offer such policies which would attract customers which are denied by other banking in the market.

JOB ROTATION AND PROMOTIONS:

Most of the bank employees, are sticking to one seat only with the result that they become master of one particular job and loose their grip on other banking operation. In my opinion all the employees should have regular job experience all out-look towards banking. The promotion policy should be adjusted

COMMUNICATION SYSTEM FOR EMPLOYEES:

As such system should be designed that every employee who has some problems with his officers can communicate it to the higher management and some steps must be taken to improve that.

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IF I WERE MANAGER AT MUSLIM COMMERCIAL BANK

If I would be a manager at MCB Ill take following steps, I will apply such a communication system specially designed for employees trough they can share the problems regarding work environment. Complete working and break hours will be offered so that employees can work efficiently. I will make it sure that some of the employees should be sent for training to other countries and employees from other branches should be brought here. I will make promotions, job rotation and bonuses, an important part of policies of MCB.

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At every months closing when employees stay at branch even after working hours, a dinner from bank will be offered. To retain potential customers certain services will be provided and let them know with advertising. I will make it sure that Working environment, equipment, furniture and staff dressing should be according to the modern banking style.

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REFERENCES & RESOURCES

To make this internship report data is taken from the following resources:

ONLINE RESOURCES:
Muslim Commercial Bank, Ltd http://www.mcb.com Muslim Commercial Bank Pakistan http://www.mcb.com/pakistan/ State Bank of Pakistan http://www.sbp.org.pk Statistical Bureau of Pakistan http://www.fbs.gov.pk Financial Statement: Google.com.pk Ratios: P. Jones Analysis of Financial Statement by Charles.

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