Internship Report On Mcb Bank Usman.docx

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INTERNSHIP REPORT ON MCB BANK LIMITED

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Submitted to: Branch Manager

Submitted By: Name: Usman Saeed Roll #: 40 Registration #: 2013-RCiU262

Session: (2013-2017) Program: BBA (Hons)

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Acknowledgement First of all I’m grateful to ALLAH ALMIGHTY, who bestowed me with health, abilities and guidance to complete the project in a successful manner, and without HIS help I was unable to perform this task .I am very thankful of MCB Bank for providing me an opportunity to learn and experience in practical environment. And I am thankful to Branch manager and all the staff of MCB Yazman for helping me throuhout this internship.

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Table of Content

Detail 

              

Executive summary………………………………………………………… History of Banking …………………………………………………………. History of MCB …………………………………………………………. MCB Bank today …………………………………………………………. Awards & Achievements ……………………………………………….. Organizational Hierarchy ……………………………………………… Organizational setup.……………..…………………………………….. Organizational structure ………………………………………………. SWOT Analysis …………………………………………………………. Marketing Mix …………………………………………………………. Product Mix ………………………………………………………… Fields of Activity …………………………………………………………. Information about my branch ………………………………………. Work done by me ………………………………………………………… Financial Analysis …………………………………………………………. Recommendations ……………………………………………………….

Page No

06 08 16 18 23 24 25 26 27 28 29 35 43 46 54 59

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EXECUTIVE SUMMARY

MCB Bank (Muslim Commercial Bank Limited) is one of the leading banks of Pakistan and has made significant contributions in building and strengthening both corporate and retail banking sector in Pakistan. MCB Bank Limited has a very solid foundation over 50 years in Pakistan .it has a network of over 1000 branches and above 850 braches is online branches .MCB has over 600 ATMs in 50 cities nationwide. MCBs operation continued to be streamlined with focus on rationalization of expenses, re alignment of back end processing to increase productivity, enhancement of customer service standards, process efficiency and control. The bank has taken the lead in the introducing the innovative concept of centralizing Trade Service in the country by providing centralization foreign trade service to branches with a view to improve efficiency , expertise and reduce the delivery cost This report is an upshot of my six weeks internship in Muslim Commercial Bank of Pakistan. MCB of Pakistan possesses an imperative and historical importance in the banking sector of Pakistan. It always remains the center of hustles in business activities. It always endows with great covenant of rally round in terms of funds and services at all epochs of its dynamism. The main purpose of internship is to learn, by working in practical environment and to apply the knowledge acquired, during the studies, in a real world scenario in order to tackle the problems. During my internship I worked in remittances, account opening and the customer service office department and I successfully complete all the tasks that were assign to me.

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DEFINITIONS OF BANK The term 'bank' is being used for a long time, yet it has no precise definition. The basic reason is that the commercial banks perform not just one but many types of functions. The term bank has been defined differently by different authors. Some are as follows:

According to G.W. Gilbert:"A banker is a dealer in capital or more properly a dealer in money. He is an intermediate party between the borrower and the lender. He borrows from one party and lends to another."

According to Crowther:"Bank is a dealer in debts—his own and of other people."

A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services, such as wealth management, currency exchange and safe deposit boxes.

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HISTORY OF BANKING IN PAKISTAN The interesting point which I observed during the span of mine internship was the historical background of Banking & Financial sector which is the one in which great improvement and growth is observed since the formation of Pakistan. For studying the growth of this sector we can divide it into three stages, which are as follows

 Pre-Nationalization Era  Nationalization Era  Post Nationalization Era

Pre Nationalization Era:There were only two Muslim banks in Indo Pak before partition, they were 1) Habib Bank Ltd. (established in 1941 at Bombay) 2) Australia Bank Ltd. (established in 1944 at Lahore). At the time of partition there were 631 bank branches in area, which came under Pakistani control. But due to bloodshed and violence at large scale, mostly branches were closed and the disparity can be accessed from the fact that on July 1948 .there were 195 branches with deposits of Rs.88 core (880 million) only. Also a factor lagging in Pakistani industry was a central bank of its own, by that time Reserve Bank of India was acting as central bank for both countries and same currency notes were used in both territories. But Reserve Bank of India was biased and Set down Pakistan on many occasions such as the issue of funds transfer etc. In this period drastic steps were taken in government sector for the improvement of overall position. The private sector also responded to these changes and some very positive changes were observed. Some of the steps taken by the government in this regard were as under:

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 Inauguration of State Bank of Pakistan (SBP) on 1st July, 1948.  Setting up of National Bank of Pakistan in November, 1949 to control the 'jute' export in East Pakistan and to act as agent of SBP.  Larger powers were given to SBP through SBP Act (1956) for controlling purposes.  Banking Companies Ordinance 1962 for protection and guidance to banks.

These were the steps, which built a strong banking sector in Pakistan. This is also obvious from the facts that by 1973 there were almost 10 foreign banks were working in Pakistan and all over deposit position was around Rs.2300 core (23,000 million).

BANKING SECTOR IN PAKISTAN IN 1973 Bank

No of branches

Deposits

 Habib Bank Ltd.

667

Rs. 6,160 (million)

 National bank of Pakistan Ltd.  United Bank Ltd.  MCB Bank Ltd.  Allied Bank Ltd.

579 497 506 145

Rs. 5,660 (million) Rs. 5,670 (million) Rs. 1,640 (million) Rs. 570 (million)

Nationalization Era:On January 01, 1974 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani banks became a public property. All small banks were merged in bigger banks to create 5 major Pakistani banks. These banks were to control by Pakistan Banking Council. There are still controversies about this act of government as whether it contributed in success of failure of banks.

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Major changes after nationalization were as follows: Working of banks was extended to under developed areas.  Market expansion for credit and deposits.  Banks were encouraged to extend cooperation to neglected areas.  Decrease in service level of bank officers.  Decrease in profitability as well.

POST NATIONALIZATION ERA:In 1990 the government decided to denationalize all the nationalized institutes. Some was also suggested in banking sector. For this purpose, amendments were made to Nationalization Act 1974 and two nationalized banks were privatized. Along with this a permission to open banks in private sector was also granted. The rules regarding establishment of new banks and for incoming foreign banks were also relaxed.

The-three privatized banks are:a) MCB taken up by a private group in April, 1991 b) ABL taken up by its own employees in September 1991. c) UBL taken up by UAE party in 2002

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After these changes a large number of private and foreign banks started their operations in Pakistan and the present status can be seen from the following figures:

SCHEDULED BANKS

Category         

Central Bank Private / Privatized Commerce Banks Specialized Banks Public Sector Specialized Banks Investment Banks Microfinance Banks Islamic Banks Foreign Banks Total Schedule Banks

PAKISTAN BANKING SECTOR: Central Bank  Privatized Banks/private bank  Specialized banks  Islamic Banks  Foreign banks  Investment bank  Microfinance bank

No of Banks 01 22 06 05 10 09 06 06 56

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CENTRAL BANK:o

State bank of Pakistan

PUBLIC SECTOR BANKS:o The bank of Punjab o The bank of Khyber o Sindh bank o The bank of Sindh o

Sindh central cooperative bank

SPECIALIZED BANKS:o Zarai Taraqiti Bank of Pakistan (ADBP) o Industrial Development Bank of Pakistan(IDBP) o Punjab Provincial Cooperative Bank. o SME bank. o Arslaan bank limited. o Karakorum cooperative bank limited.

PRIVATE COMMERCIAL BANKS:o Askari Commercial Bank Ltd. o Bank Alfalah Ltd. o Bank Al-Habib Ltd. o Bolan Bank Ltd. o Faysal Bank Ltd. o Habib Credit & Exchange Bank. o Metropolitan Bank Ltd. o Platinum Bank Ltd.

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o Prime Commercial Bank Ltd. o PICIC Bank Ltd. o Soneri Bank Ltd. o The Bank of Khyber o The Bank of Punjab o Union Bank Ltd. o KASAB Bank. o Allied bank. o Summit bank. o Citibank Pakistan. o First women bank. o HSBC Pakistan. o Habib bank ltd. o Habib bank AG Zurich. o JS bank. o MCB bank limited.

o MY Bank. o NIB Pakistan. o Royal bank of Scotland Pakistan. o Standard chartered bank Pakistan. o Silk bank limited. o United bank limited. o

Apna bank limited

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INVESTMENT BANKS:o BMA capital management limited. o Invest capital investment bank limited. o AMZ securities. o Orix leasing Pakistan limited. o Trust investment bank limited. o Js investment bank limited. o Atlas bank limited. o Al towfeek investment bank limited. o Escorts investment bank limited.

o

First investment bank limited.

MICRO FINANCE BANKS:o NRSP micro finance bank limited. o The first microfinance bank limited. o Khushhali bank limited. o Karakorum bank. o Network microfinance bank. o Pak Oman micro finance bank. o Rozgar macro finance bank. o Tamer micro finance bank limited. o Kashf micro finance bank limited

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ISLAMIC BANKS:o Meezan Pakistan limited. o Al Baraka Islamic bank. o Bank islami Pakistan limited. o Dubai Islamic bank Pakistan limited. o Dawood Islamic bank limited. o Imrates global Islamic bank limited.

FOREIGN BANKS:o Barclays bank plc. o Citibank n.a Pakistan operayion. o Deutsche bank AG Pakistan operation. o HSBC bank Middle East limited. o Oman international bank S.AO.G Pakistan operation. o The bank of Tokyo MITsubshi UF limited.

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HISTORY OF THE MCB BANK LIMITED

The history of MCB can be divided into three main Phases: Development Phase.  Nationalization Phase.  Privatization Phase.

DEVLOPMENT PHASE:MCB Bank Limited was incorporated by the Adamjee Group on July 9, 1947, under the Indian Companies Act, VII of 1913 as a limited company. The bank was established with a view to provide banking facilities to the business community of the South Asia. After the Partition of the Indo-Pak subcontinent, the bank moved to Dhaka (then the capital of former East Pakistan) from where it commenced business in August 1948. After some time, the registered office of the company was shifted to Karachi on August 23rd, 1956 through a special resolution, now recently the Head office of MCB has been transferred to Islamabad in July, 1999 and now Head office is termed as Principle Office. This institute was nationalized with other on January 1st, 1974. At that time, it had 506 branches and deposits amounting to Rs. 1,640 million. Although. MCB has a reputation of a conservative bank but nationalization also left its effects on this institute as well and by end of year 1991 in which it was privatized the total number of branches were 1287 and deposits amounting to as high as Rs. 35,029 million.

NATIONALIZATION PHASE:The 1960s decade is stated as the golden era in Pakistan’s economic and financial development. The banking sector also registered noticeable growth during that period and Lent a strong helping hand to the government to achieve rapid economic growth of the country. But in early 1970s this scenario changed altogether. The separation of East Pakistan (Now Bangladesh) and induction of the government led by Zulfiqar Ali Bhutto were the most significant events of early 70s having far reaching effects on the banking system. In the wake of rapidly changing conditions of the country, the government decided to Nationalize all the commercial banks so that the nation as a whole can benefit from a better use of resources. Consequently, the Muslim Commercial Bank was nationalized under the Banks (Nationalization) Act, 1974 promulgated on January 1, 1974.

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PRIVITIZATION PHASE: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 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.

AFTER PRIVATIZATION

Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer. After privatization, the growth in every department of the bank has been observed. Following are some key developments:  Launching of different deposit schemes to increase saving level.  Increased participation on foreign trade.  Betterment of branches and staff service level.  Introduction of Rupee Traveler Cheques & Photo Credit Card for the first time in Pakistan.

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MCB BANK TODAY 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 growing 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 :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.

-: Our Core Values : Integrity  Innovation  Excellence  Customer Centricity  Respect

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Integrity:We are the trustees of public funds and serve our community with integrity. We believe in being the best at always doing the right thing. We deliver on our responsibilities and commitments to our customers as well as our colleagues.

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.

Excellence:We take personal responsibility for our role as leaders in the pursuit of excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward.

Customer Centricity:Our customers are at the heart of everything we do. We thrive on the challenge of understanding their needs and aspirations, both realized and unrealized. We make every effort to exceed customer expectations through superior services and solutions.

Respect:We respect our customers’ values, beliefs, culture and history. We value the equality of gender and diversity of experience and education that our employees bring with them. We create an environment where each individual is enabled to succeed.

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FOREIGN TRADE The bank conducted import business during the year 2015 greater than as compare to the business in 2014. The export business slightly improves in 2015. Home remittances decline in 2015.

SOCIAL SECTOR The bank activity participating in the Prime Minister Self-employment Scheme. The application received from various applicants is being processed on merit and disposed off as quickly as possible.

THE BUSINESS:MCB is in it’s over 68 years of operation. It has a network of 1257 branches all over the country with business establishments in Sri Lanka and Bahrain. MCB has an edge over other local banks, as it was the first privatized bank. The State Bank of Pakistan has restricted the number of branches that can be opened by foreign banks, an advantage that MCB capitalizes because of its extensive branch network. Twenty-six years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio and rationalized the cost structure in order to remain a low cost producer. MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking. Corporate clientele includes public sector companies as well as large local and multinational concerns.

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-: Board of Directors :           

Mian Mohammad Mansha……………………………….. S.M. Muneer ……………………………….... Imran Maqbool ………………………………….. Tariq Rafi ………………………………….. Aftaab Ahman Khan ………………………………….. Ahmad Alman Aslam ………………………………….. Shahzad Saleem ………………………………….. Mian Umer Mansha ………………………………….. Muhammad Ali Zeb ………………………………….. Mr. Mohd Suhail Amar Suresh ……………………………. Mrs. Iqraa Hassan Mansha ………………………………… Mr. Irfan Hashmi …………………………………..

Chairman Vice Chairman President & Chief Executive Director Director Director Director Director Director Director Director Director

-: Audit Committee :-

   

Ahmad Alman Aslam ………………………………….. Chairman Tariq Rafi .…………………………………. Member Aftab Ahmad Khan …………………………………... Member Dato Seri Ismail Shahudin ………………………………… Member

-: Chief Financial Officer : Salman Zafar Siddiqi

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-: Management Committee : Imran Maqbool

……………………………… President /CEO

 Laqa Sarwar

……………………………… Group Head Assets Rehabilitation

 Mohammed Nauman Chughtai …………………. Group Head Risk Management  Muhammad Ramzan ……………………………. Group Head Treasury &FX  Muhtashim Ashai

……………………………. (Group Head Corporate Finance & International Banking)

 Salman Zafar Siddiqi ……………………………. Chief Financial Officer  Farid Ahmad

…………………………….. Group Head Compliance & Controls

 Kamran Zafar Muggo ……………………………. Group Head Operations  Nadeem Afzal

…………………………….. Head Retail Banking – South

 Usman Hassan

……………………………… Group Head HRM

 Zargham Khan Durrani …………………………… Head Retail Banking – North  Syed Mudassar Hussain Naqvi …………………… Group Head Legal Affairs  Hassan Nawaz Tarar ……………………………… Group Head Security & Marketing  Mr. Faisal Ejaz Khan ……………………………… Chief Information Officer

Registered and principle Office MCB building, 15 – Main Gulberg, jail road Lahore Pakistan.

Registrar and Share Registration Office M/s. THK Associates (pvt) LTD. State life building no 3, 2nd floor, Dr Zia Uddin Ahmad road Karachi, Pakistan

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-: Awards & Achievements :-

2015 CFA 12th Excellence Awards: 2015 Finance Asia Country Awards 2015 ICAP and ICMAP: 2015 SAFA Awards 2014 The Asset Triple A: 2014 The Asset Triple A: 2014 CFA 11th Excellence Awards: 2014 CFA 11th Excellence Awards: 2014 Asiamoney Awards 2014 The Asian Banker (USA) 2014 ICAP and ICMAP: 2014 SAFA Awards: 2013 The Asset Triple A: 2013 The Asset Triple A: 2013 ICAP and ICMAP: 2013 LK Domain Registry Sri Lanka: 2013 Lanka Clear Pvt. Limited: 2013 SAFA Awards: 2012 The Asset Triple A: 2012 Euromoney: 2012 NFEH: 2012 ICAP and ICMAP: 2012 World Finance: 2012 Pakistan Centre for Philanthropy:

Most Stable Bank of the year 2014 Best Bank in Pakistan 2015 1st - BCR Award 2014 - Banking Sector Winner of Best Presented Annual Accounts 2014 - Banking Sector Best Bank - Pakistan Best Domestic Bank - Pakistan Best Bank of the year 2013 – Large Bank Most Stable Bank of the year 2013 Best of the Best Domestic Bank Strongest Bank in Pakistan 2014 1st - BCR Award 2013 - Banking Sector 1st Runner up Best Presented Annual Accounts 2013 - Banking Sector Best Domestic Bank - Pakistan Best Islamic Deal 1st - BCR Award 2012 - Banking Sector Best Website Award T+1 Cheque Clearing Award 2nd Runner up Best Presented Annual Accounts 2012 - Banking Sector Best Domestic Bank - Pakistan Best Bank in Pakistan CSR Business Excellence Award “Best Media Coverage” 2nd Best Corporate Report Award 2011 - Banking Sector Best Commercial Bank - Pakistan PCP Corporate Philanthropy Award

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-: ORGANIZATIONAL HIERARCHY OF MCB :-

PRESIDENT

SENIOR EXECUTIVE VICE PRESIDENT

EXECUTIVE VICE PRESIDENT

SENIOR VICE PRESIDENT

VICE PRESIDENT

ASSISTANT VICE PRESIDENT

OFFICERS GRADE I II III

ASSISTANTS

CASHIER

PEONS

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-: ORGANIZATIONAL SETUP OF MCB :-

HEAD QUARTER

KARACHI

PROVINCIAL HEAD QUARTERS

PUNJAB

LAHORE

SINDH

KARACHI

BALOCHISTAN

PESHAWAR

NWFP & AZAD KASHMIR

QUETTA

CIRCLE OFFICES

BRANCH OFFICES

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-: ORGANIZATIONAL STRUCTURE OF MCB :As MCB is a banking company listed in stock exchange therefore it follows all the legalities which are imposed by concerned statutes Mr. Muhammad Mansha is chairman & Imran Maqbool is CEO of the company with a team of directors and 1 vice chairman to help in the business control and strategy making for the company. Operational Management of the bank is being handled by a team of professionals. This team is also headed by Mr. Muhammad Mansha. The different operational departments are Consumer Banking & IT div; Financial & Inter branch div; Banking operations div; HR & Legal div; financial control & Audit div; Credit management div; Commercial Banking div; Corporate Banking div; Treasury management & FX Group and lastly Special Assets Management (SAM) Group.

For effective handling of branches, it has been categorized into three segments with different people handling each category. These categories are:

 Corporate Banking.  Commercial Banking.  Consumer Banking.

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.

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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.

-: SWOT Analysis :-

Strength:MCB has the 2nd largest commercial bank. It has over 1100 branches all over the country (Largest branch network). They have safe and secure investment venture, innovative and new technology adapter employee satisfaction, well equipped and fully secure environment, modernized banking (online internet).

Weaknesses:Weakness are weaker organizational culture, HR policies (appraisal, compensation, career planning), networking problems regarding ATM, weak MIS interconnectivity among the division.

Opportunities:Opportunities are information technology (MIS),establishing more Foreign branches local setup should be expanded .

Threats:MCB employees and they are losing their confidence towards bank performance ,fierce competition ,changing environment of banking ,economical political condition are a great threat, entrance of international banks.

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-: MARKETING MIX OF MCB BANK LIMITED :Marketing is the task of creating, promoting and delivering goods and services to consumers and businesses. Organizations identify and profile distinct group of buyers who might prefer or require varying products and marketing mixes. The customer seeks for value and satisfaction. The organizations can increase the value of the customer offering in several ways e.g. raising benefits, reducing costs etc. marketing mix is a set of marketing tools that the firm uses to pursue its marketing objectives in the target market. These marketing tools are known as 4 p’s of marketing. These four marketing tools are viewed as 4c’s by the consumers.

4 P’s

4 C’s

Product/ Service

Customer Solution

Price

Customer Cost

Place

Convenience

Promotion

Communication

To identify the customer needs and fulfilling them is the basic objective of an organization. Marketing is not just satisfying your customers, you have to delight them and this can be done by acting upon this phrase. “Under Promise and Over Deliver”

MCB Bank provides a winning combination of products and services to its prime customers. It is one of the country’s leading commercial banks, which ensures complete security, and reliability in all-financial transactions.

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-: PRODUCT MIX OF MCB BANK :-

Deposit Accounts:MCB bank provide a wide range of local and foreign accounts to best suit your needs. Whether you want to save for that rainy day or something special, our saving deposit portfolio is designed to provide you with ease and comfort for all your needs. For complete day to day banking needs MCB bank current deposit accounts provides ease and comfort for all your needs.

Home Remittance:MCB home remittance offers an unmatched service for overseas Pakistani’s.  Free and instant.  MCB burqraftaar transfer.  MCB burqraftaar cash.

Consumer Loans:    

Car4u. Student personal loan. Personal loan. Home loans. Cash4cash.

Cards:CREDIT CARDS:   

Gold credit card. Platinum credit card. Silver credit card. Gold plus credit card.

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DEBIT & PREPAID CARD: MCB visa debit platinum supplementary card.  MCB visa prepaid card.  MCB visa debit card.

 MCB visa debit platinum card. MCB Lite:MCB Lite is an instant deposit facility which provides the power of Visa enabled card coupled with the convenience of mobile payments.

BANCASSURANCE: FlexiLife  LifePartner  Educare  Dreemwedding  CapitalSure  RetireEasy  incomeMax  FutureAssure  ProtectionPlan  Save and Assure  Kafalah

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INVESTMENT SERVICES: Cash funds  Income funds  Islamic funds  Assets allocation funds  Equity funds  Voluntary pension schemes  Investment plans  Single premium plans

Rupee traveler cheques:MCB bank has been at the forefront of providing its customers with new and innovative products and financial instruments that are safe, secure and profitable.

FEATURES OF RTC: Easy available  As good as cash  Easily enchased  Easily refunded  Exclusive security features  Denominations  Validity of 10 years  Customers service facility  More than 900 branches of MCB deals with RTC

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Internet Banking:   

Funds transfer A/c Statement Cheque book apply Utility bills  Donations

-: Placing Strategies OF MCB BANK :-

The location of the bank plays a vital role in making its operations profitable. If the bank is located in some business center, then it will be very easy for it to attract business people as its customers. Therefore, MCB has most of its branches at places where it can reach its targets customer easily.

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The branch network of MCB is given as follows.

Punjab

719

Sindh

274

KHYBER PAKHTUNKHWA

117

Baluchistan

43

Azad Kashmir

26

Domestic

1040

Overseas

8

FEDRAL CAPITAL TERROTORY

28

FATA

6

GILGIT BALTISTAN

4

EPZ

1

TOTAL

1226

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-: Promotion Strategies of MCB BANK :-

MCB Bank is actively participating in promotion of its products and services through advertisement and other promotional schemes. Initially, the bank focused on the upper class customer’s only and offered products for a limited class of people. But now the strategy has been changed and the bank is now targeting the middle market also. The products offered are of diverse nature to cater the needs of maximum number of people.

Customer Oriented Attitude:MCB Bank values its customers. Customers’ complaints are encouraged because it gives an opportunity to know the needs of the customer and build more confidence in them. Most of the promotional efforts are done through  Direct marketing  Public relations

MCB bank sometimes gets suggestions and recommendations from its good customers. Branch layout is being designed in such a way that more and more customers are attracted. Some of the branches of MCB Bank have a very good entrance and outlook but many still need to be improved.

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-: FIELDS OF ACTIVITIES :-

The purpose of banks is to provide some services to the general public. And for this purpose different banks provide different services to the people in different forms. The MCB Bank is a commercial bank, in modern time commercial banks play a very important role and their functions are manifold. The main functions and services which MCB Bank Limited provides to different peoples are as follows:1. Open Different accounts for different peoples 2. Accepting various types of deposits 3. Granting loans & advances 4. Undertaking of agency services and also general utility functions, few of those are as under:  Collecting cheques and bill of exchange for the customers.  Collecting interest due, dividend, pensions and other sum due to customers.  Transfer of money from place to place.  Acting an executor, trustee or attorney for the customers. ‘Providing safe custody and facilities to keep jewellery, documents or securities.  Issuing of travelers cheques and letters of credit to give credit facilities to travel.  Accepting bills of exchange on behalf of customers.  Purchasing shares for the customers.  Undertaking foreign exchange business.  Furnishing trade information and tendering advice to customers

For proper functioning of branches and the overall bank has been divided in different departments. These departments handle different jobs so that division of work is there for improvement of functions and also it is easy to control the situation. The general division in a branch is as follows: 1. 2. 3. 4. 5. 6.

Cash department Deposit department Advances & credit department Remittance department Foreign exchange department Technology department (new addition in order to cop with the growing needs of day to day technology requirements)

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-: CASH DEPARTMENT:When cash is received in counter, then cashier count the cash and perform transactions. When the cheque or any negotiable instrument is presented at counter for payment, it is entered in the computer system and a slip is present to the customer. The consolidated figure of receipt and payment of cash is entered in the cash balance book and drawn closing balance of cash. Opening Balance + Receipts - Payments = closing Balance. This is very important department because cash is the most liquid asset and mostly frauds are made in this department, therefore, extra care is taken in this department and nobody is allowed to enter or leave the area freely. Mostly, cash area is grilled and its door is under supervision of the head of that department. All the books maintained in this department are checked by an officer.

-: DEPOSIT DEPARTMENT:Bank deals in money and they are merely mobilizing funds within the economy. They borrow from one person and lend to another, the difference between the rate of borrowing lending forms their spread or gross profit. Therefore, we can rightly state that deposits are the blood of the bank which causes the body of an institution to get to work. These deposits are liability of the bank so from point of view of bank we can refer to them as liabilities. The total deposits of MCB are growing since its inauguration but after privatization there is a sharp incline in over all deposits of the bank. The increase in deposits is also a cause of increase on total number of accounts; bank has progressed in both aspects.

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TYPES OF DEPOSITS:Deposits can be segregated on two bases, one is the duration in which there funds are expected to be with the bank and second is the cost of getting these funds. So divide deposits in two classes according to duration of deposits i.e. 1) Time deposits / liabilities 2) Demand deposits / liabilities And on the basis of the cost to acquire these funds, a deposit can be classified as any one of following four, High Cost Medium Cost, Low Cost No Cost.

Functions of DEPOSIT department

This was a brief review of different types of deposit schemes. The Deposit Department handles the account opening, profit payment and accounting of all types of deposit schemes.

Account Opening:Account opening is an agreement in which customer offers his funds and bank accepts these funds, therefore the nature of relation between a banker and customer is of a contractual one and all the conditions applicable to this contract act are also applicable.

Profit payment & calculation:Profit payment & calculation is done in accordance with the rules of each type of deposit scheme-by the deposit department. The products for each deposit scheme are calculated separately and added till the end of 6-month period. Then the sum total of these products is multiplied with the respective profit rates which are issued by the Head Office at the end of each half yearly closing. The profit provisions for each type of deposits are also calculated on monthly basis by the same department in order to calculate the net profit or loss position of the branch.

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Accounting Entries:Accounting entries are also made in the respective books of account by this department. However, in small and medium size branches, the accountant performs the book keeping duties for all kinds of ledgers.

-: CLEARING DEPARTMENT :Every banker acts both as a paying as well as a collecting banker, it is however an important function of crossed cheques. A large part of this work is carried out through the bankers clearing house. A clearing house is a place where representative of all banks of the city get together and settle the receipts and payment of cheques drawn on each other. As the collecting banker runs certain risks in receipt of their ownership the law has provided certain protections to the banks. The Negotiable Instrument Act, 1881, lays down hat drawer or holder of a cheque or draft may cross the instrument generally or specially. It further lies down that a crossed cheque can only be paid to a banker, who collects it for a customer in good faith and without negligence.

Types of Cheques: Transfer cheques: are those cheques, which are collected and paid by the same branch of bank.  Transfer delivery cheques: are those cheques, which are collected and paid by two different branches of the same bank situated in the same city.  Clearing cheques: are those cheques, which are drawn on the branches of some other bank of the same city or of the same area, which is covered by a particular clearing house.  Collection cheques: are those cheques, which are drawn on the branches of either the same bank or of another bank, but those branches, are not in the same city or they are not the members of clearing house.

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Functions of Clearing Department: To accept Transfer, transfer delivery, clearing and collection cheques from the customers of the branch and to arrange for their collection.  To arrange the payment of cheques drawn on the branch and given for collection to any other branch on MCB or any other members or sub member of the local clearing house.  To collect amount of cheques drawn on members, sub-member of local clearing house, sent for collection by MCB Branches, not represented at the local clearing house  Receiving and scrutinizing the cheques and other deposit instruments, and the pay-in-slip at the counter.  Fixing the stamps.  Scrutiny and receipt by the authorized officer.  Returning the counter file to the depositor.  Certificate and confirmation by the officer in charge of the department.  Separating the cheque into transfer, transfer delivery, and clearing cheques.

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CLEARING PROCESS (FLOW CHART) Cheque with slip given

Slip is asked & filled

Cheque along with slip checked, signed & received by officer

Entries in daybooks are made

Entries checked & verified by another officer after banking hours by officer Cheques collected at the day end by Main Branch’s Officials

Cheques are sent to respective banks next day after posting in computer by Main Branch

The same day not honored cheques are returned to Main Branch

The day after tomorrow the banks are informed about dishonored cheques

Provisional entries for returned cheques are debited again in both computer & daybooks

Party is informed about returned cheques through Phone or personal contact

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-: ADVANCES DEPARTMENT :Advances are the most important source of earning for the banks. MCB is also giving full attention towards this aspect and it is also obvious from the growing portfolio of advances and from very low delinquency rate. The credit portfolio of this institution is in a very much better shape than other financial institutions of Pakistan and the credit goes to the management and the staff who are concerned about the quantity and quality as well.

 Loans  Cash Credits  Overdraft

LOANS:Loans are monetary assistance by a financial institution to a business, individual etc. The loans are granted by the bank in lump sum, so these types called fixed or demand loans. Interest is charged on the whole amount of a fixed loan. The borrower withdraws whole the amount of loan. This type of loan is normally granted against security of gold documents. In case of demand loans against gold or documents, a demand promissory note for the amount of loan is taken from the borrower loans are granted under;

LOAN AGAINST GOLD:Under this type of loan, which is granted to the borrower the Head Cashier estimates the value of Gold or Gold ornaments through an agent (Gold smith) and keeps a margin of 40 to 50 percent. After the opening the gold loan account a token is given to the borrower, which is a bank receipt.

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On repayment of loan, the gold or ornaments held as security for it, together with the demand promissory note duly discharged is returned to the borrower and his receipt for the gold ornament taken in the demand loan ledger. This receipts states that he ornaments returned are complete and in order. Part delivery of ornaments is given against part payment of a loan but care is taken that the ornaments still in banks possession fully covers the balance of the loan outstanding. The interest gold loan is to be applied with quarterly.

LOAN AGAINST PLEDGE OF STOCKS:In case of advancing such types of loans, the following precautions are kept in the mind:  Stock pledged must be readily saleable  Products should be readily saleable  Advance should be within the borrows means

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-: INFORMATION ABOUT MY BRANCH :-

I did my internship in MCB Bank Limited Yazman (0728) Branch. Some important information about my branch which I observed is as follows:-

Management of the branch

Branch Manager

………………………………………….. Muhammad Sohail Malik

Operational Manager …………………………………………. Kashif Ali Cashier

………………………………………….. M.Nadeem Aslam

GBO

…………………………………………... Naeem Abbas

GBO

………………………………………….. Muhammad Adeel

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-: Other General information of the Branch :-

Deposits:The total deposits of this branch in 2015 are about to 226.00 million. In deposit there is decreasing trend.

Profit:Total remittance of this branch is 4.200 million in 2015.there is also decreasing trend in profit from 2014 to 2015 because most people around here are in profession of agriculture. Because of bad season in crops they didn’t make much profit to deposit.

No. of vouchers:The vouchers which are transacted in this branch from 2015 to June 2016 are 126336.

Number of accounts:There are more than 2500 accounts in this branch.

SYSTEM:In my branch SYMBOLS MIS system is used to perform daily transactions.

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Accounts in this branch of MCB are as follows:-

 ACA  CDR  CUR  365 Gold  KBA  GLD  SBA  BBA  KSA  MSX  MEA  PLS  BUS  MSM  ESA

Total balance in these accounts is 252,199,425.45 till 12 august 2016.

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-: WORK DONE BY ME :-

During my internship in the MCB Limited, I really enjoyed to work with the staff of Branch, Yazman (0728) from 18thAugest to 29th September, 2016 and have a wish to be employee of MCB. It was almost impossible to work in all the departments within that limited time. But on my request, the staff of the branch provided me the opportunity to work in the different departments for the sake of practical knowledge. I am really very thankful to branch manager Sir Muhammad Sohail Malik who provides me a learning environment in the branch.

During my internship training in the MCB as I early mentioned that I have worked in different departments & seats and learnt the followings.

Account Opening Department:Account opening and closing is the function of accounts departments. Bank’s customers may be individuals (Single or Joint), firms (partnership/proprietorship), Autonomous corporations, Limited Companies, Charitable Institutions, Associations Educational Institutions or Local Bodies.

Basics to open an account:During the span of mine internship in MCB, I learned and observed a lot of about the opening of an account. Basically I think that the opening of an account is the establishment of a contractual relationship between the banker and the customer. By opening an account at a bank a person becomes a ‘customer’ of a bank. Further I am going to express the basic requirements and steps involved in the opening of an account.

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Introduction and preliminary Investigation:Before opening an account MCB as like the other banks in Pakistan ascertain whether or not the person who is going to open the account is a desirable customer or not. Then MCB determine the prospective customer’s integrity, respectability, occupation and the nature of business by the introductory references given at the time of account opening. In order to further strengthen and streamline this process, the Federal Ombudsman of Pakistan, vide his ruling on complaint no. II/31/5186, has directed the banks to retain with the account opening form a Photostat copy each of the National Identity Cards of the person desiring to open an account as well as that of the introducer. As per these directions, the concerned Branch Managers are required to obtain the original National Identity Cards along with their Photostat copies and then return the original after attesting the authenticity of the retained copy.

Specimen Signature:When an account is opened with MCB customer provides to the bank a specimen of the form of signature which would appear on all his cheques to express his authority for the payment of cheques drawn on his banker. This specimen is taken generally on a card specially designed for this purpose, and rule for the customers, full name, and account number are entered on it. If the bank has reasons to doubt the genuineness of a signature, he should either get it confirmed for his satisfaction or return the cheque with the remark ‘Signature differs’. If the signature of the customer is forged the banker cannot escape his liability because he has actually acted on his customer’s mandate.

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HOW TO OPEN AN ACCOUNT (GENERAL):Before opening an account in MCB I observed that the following points must be considered in this regard.  Another account holder of the bank should properly introduce the new customer.  The account holder should sign the account opening form in the presence of bank officer and the signature is duly verified.  A copy of identity Card is required by Bank.  Against submission of the Bank’s prescribed application form, duly introduced in the manner provided and on supplying such document, as may be required and account may be opened. The Bank reserves to itself the right to refuse to open and account without assigning any reason.  Minimum amount for opening and continued maintenance of various types of accounts is as follows:

Type

Rs.

Saving

100

Current

1000

Term Deposit

1000

The bank reserves the right to change the above mentioned minimum balance requirement at any time without any notice.

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PROCEDURE TO OPEN AN ACCOUNT:According to my practice in MCB, when a customer wants to open an account, the bank officer gives him an application form. All information, which is necessary to be known by the bank, are requirements of the application form. Form also requires the essential documents to be attached by the customer.

Basically following information is required to open an account with MCB.

 Title of Account  Full Name of Applicant  Occupation  Address  Telephone No.  Currency of account  Nature of Business  Introducer’s Name, Address & Signatures  Special instruction regarding the account  Initial Amount of the Deposit  Signature of the applicant  Next of kin

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Documents to be Attached:Further I learned that if you wanted to open an account with MCB then you should attach the following documents with your application form which are different for different categories.

SOLE PROPRIETOR’S ACCOUNT:In order to open an account with MCB Sole Proprietors have to submit their business registration certificate number.

PRIVATE / JOINT ACCOUTS:For individual or private or joint accounts National Identity Card is required.

JOINT STOCK COMPANY:Before an account of a Public Limited Company is opened MCB must ask the person authorized to do so to submit the certified copies or the following documents: Certified true copy of the Memorandum and Articles of Association of the company.  Certified true copy of the resolution of the board of directors / managing committee / governing body regarding conduct of the account.  Certified list containing names and signatures of the directors / office bearers.

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 Certified true copy of the certificate of incorporation or registration.  Certified true copy of the certificate of commencement of business (in case of public limited companies).  Balance Sheet  I.D. Card copy of each director  Original is also enclosed for inspection and return  List of persons authorized to operate the account.  Power of Attorney in favor of the person opening account.

PARTNERSHIP FIRM ACCOUNT:Information which is required to be submitted to MCB by a partnership firm in this case is as follows:

 Full Names  Address  Specimen of signatures of the partners  Certified true copy of partnership deed  Registration No. if the Partnership is registered

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ISSUANCE OF CHEQUE BOOK:When a customer opens an account with the bank, he is provided with cheque book for withdrawals from account. However, the first cheque book is given to the customer only when all the required documents are checked. A cheque book contains ten, twenty five, fifty or hundred leaves. The cheque book also carries a requisition slip for the issuance of the new cheque book. This slip is duly filled and signed by the customer. The signature of the customer is verified by the bank and new cheque book is issued to the customer and serial numbers of the cheque are duly entered in the book of the bank. Along with the signature, person should also write his full name & address. Usually only one cheque book is issued at a time, however big concerns who need a number of cheque books at a time, may ask the bank to stock as number of cheque books in their name and to point their name on these cheque books. Bank debits the client’s account for excise duty of Rs.2.50/- per cheque and keeps the cheque book ready for the customer, as on his advice. The officer keeps and maintains the cheque book register Cheque book inventory and cheque books issued are recorded in this register. The account number for which the cheque book is issued and the number of leaves are also recorded in this register when the cheque book issued an entry is passed in the cheque book issue register. In case of loss of cheque book or requisition slip on cheque book the customer has to fill the Form No. 216-B to obtain a new cheque book.

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CASH MANAGEMENT:The most important department of MCB which deals in money (receiving deposits at lower rates and lend them out at higher rates of interest). This department also called as Chest Department and manager of it is called Cash Manager or Chest Manager. In those branches where this department is not separately existed, the branch manager performs the duties of the Chest Manager. The excess cash (More than its insured limit by the insurance company) of the branches of the region is collected by the main branch. The main branch is also bound to send its excess cash (more than its insured limit) to the State Bank of Pakistan. No branch can have cash its safe more than its insurance at any time at the time of closing cash, if it is so the manager will be responsible (not the insurance company) whether or not he informed to the regional office (exception to the limit which is insured for the day). New Notes and Prize Bonds are also part and parcel of the Cash Management. Keys of the Safe lockers are with the three authorized persons each one of them is responsible for cash as at the time of closing the cash the officers including Cash officer presented and lock the safe after counting and scrutinize the cash. The cash officer maintain its daily cash book with specification of notes (Bonds are also recorded in the books in relation with cash) and other vouchers, after being satisfied the manager authenticates the books and vouchers regarding cash with stamp and signature. at the end I would like to conclude that the cash management is being done in the MCB very effectively.

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Financial Analysis of MCB 2015

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BALANCE SHEET

2015 ASSETS Cash Balance with other banks Lending to financial institutions Investments_ net Advances – net Operating fixed assets Other assets net Deferred tax assets net LIABILITIES Deposits and other accounts Borrowings from financial inst. Bills payable Other liabilities Deferred tax liabilities Sub ordinated loans Liabilities against assets NET ASSETS REPRESENTED BY Share capital Reserve Unappropriated profit Surplus on revaluation of assets

2014 (Rupees in thousands)

61,208,938 3 ,681,893 5 ,132,480 568,802,508 314,124,939 32,432,650 31,246,245 ----------1,016,629,653

46,753,804 3 ,015,624 1 ,418,181 511,137,192 303,559,480 31,192,588 37,554,615 ---------934,631,484

708,091,171 118,459,448 11,975,237 28,926,802 11,376,589 -------------------

688,329,520 59,542,861 16,627,700 29,630,241 10,397,100 -------------------

878,829,247 137,800,406

804,527,422 130,104,062

11,130,307 51,309,081 50,464,155 112,903,543 24,896,863 137,800,406

11,130,307 48,830,005 46,947,863 106,908,175 23,195,887 130,104,062

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PROFIT & LOSS ACCOUNT 2015

2014 (Rupees in ‘000)

80,532,228 31,210,389 49,321,839 (288,195) 831,369 67 ------543,241 48,778,598

77,268,988 33,756,685 43,512,303 (1,093,906) (847,151) 20 ------(1,941,037) 45,453,340

8,382,960 1,266,530 949,687 2,087,794 (4,392) 4,432,138 17,114,717 65,893,315

7,225,093 1,060,729 1,443,180 1,566,475 (2,273) 1,650,498 12,943,702 58,397,042

22,476,318 155,240 928,495 23,560,053 ---42,333,262 14,447,371 1,906,156 428,745 16,782,272 25,550,990

20,611,649 76,935 979,011 21,667,595 ---36,729,447 11,920,022 -----484,669 12,404,691 24,324,756

46,947,863 48,875

40,552,043 47,629

Profit available for appropriation

46,996,738 72,547,728

40,599,672 64,924,428

Basic and diluted earning per share after tax

22.96

Mark-up/return/interest earned Mark-up/return/interest expensed Net mark-up/interest income Provision against non-performing loans and advances Provision for diminution in the value of investments Bad debts written off directly Provision for potential lease losses Net mark-up/interest income after provisions NON MARK-UP/INTEREST INCOME Fee commission and brokerage income Dividend income Income from dealing in foreign currencies Other income Gain on Investments Gain / Loss on trading in government securities

NON MARK-UP/INTEREST EXPENSES Administrative expenses (Reversal) / Other provisions Other charges Total non-mark-up/interest expenses Compensation on delayed tax refund PROFIT BEFORE TAXATION Taxation – current year Prior years Deferred PROFIT AFTER TAXATION Unappropriated profit brought forward Transferred from surplus on revaluation of fixed Assets

21.85

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CASH FLOW STATEMENT 2015 CASH FLOW FROM OPERATING ACTIVITIES Profit/(Loss) before taxation Less: Dividend income Adjustments for non-cash charges Depreciation Amortization – intangible assets

Provision / (reversal) against loans and advances – net Provision for diminution in the value of investment

Other provision / (reversal) – net Bad debts written off directly

Provision for Workers' Welfare Fund Charge / (reversal) for defined benefit plan – net Unrealized (gain) / loss on revaluation of investments classified as held for trading Gain on sale of shares in associate Gain on disposal of fixed assets – net

(Increase)/Decrease in operating assets Lending’s to financial institutions

Net investments in 'held for trading' securities Advances Others assets (Increase)/Decrease in operating assets Bills Payable Borrowings from financial institutions Deposits Other liabilities

Defined benefits paid Income tax paid Net cash flow operating activities CASH FLOW FROM INVESTING ACTIVITIES

2014 (Rupee in 000)

42,333,262 (1,266,530) 41,066,732

36,729,447 (1,060,729) 35,668,718

2,037,048 381,334 (288,195)

1,724,216 359,734 (1,093,906)

831,369 155,240 67 846,665 (447,691) 4,392

(355,809) 76,935 20 734,589 (413,543) 2,273

(224,748) (136,283) 3,159,198 44,225,930

(31,120) 1,003,389 36,672,107

(3,714,299) (317,152) ( 10,277,331) 4,148,739 ( 10,160,043)

(193,543) (52,330) ( 54,222,629) ( 12,150,909) ( 66,619,411)

(4,652,463) 58,762,142 19,761,651 (2,425,532) 71,445,798 105,511,685 (357,224) (15,952,216) 89,202,245

6,488,974 21,284,080 55,999,234 9,157,104 92,929,392 62,982,088 (603,308) (9,035,362) 53,343,418

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Net investments in available-for-sale securities Net investments in held-to-maturity securities

Investment in subsidiary companies Proceeds from divestment in associate Dividend received Investments in operating fixed assets

Sale proceeds of property and equipment disposed off Net cash flow from investing activities CASH FLOW FROM FINANCING ACTIVITIES Dividend paid

Net cash flows from financing activities Exchange differences on translation of the net investment in foreign branches Increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of the year

( 38,729,805) (5,915,580) ( 10,269,280) 274,533

( 45,207,446) (597,679) ---------

1,262,739 (3,862,117) 247,651

1,060,790 (4,757,264) 107,184

( 56,991,859)

( 49,394,415)

( 17,167,405) ( 17,167,405) (76,023)

( 15,175,107) ( 15,175,107) (203,685)

14,966,958

(11,429,789)

49,128,268 299,067

61,372,069 (514,945)

49,427,335 64,394,293

60,857,124 49,427,335

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-: RECOMMENDATIONS :From the Quantum of the profit and its financial data it can be easily judged that after privatization, MCB is performing well. Its deposits are growing day by day and so its profitability. The controlling body is responsible for the productive performance of the Bank. Following are my observation and suggestion to improve the efficiency for the development of the bank.  There is a criticism on the banking management that the salaries of the employees are not compatible with their workload.  Staff turnover particularly of trained staff result in financial and other losses. The amount spent by the bank on employment, induction and training of outgoing officers constitutes to beat till another officer should ready prove this work. The exodus of bank officer in the past has worsened the situation.  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.  Refresher Courses for the staff are most important in any international organization. Alt the employees should have these courses according to their requirement. Foreign experts can also be called for this purpose.  Educate the employees with the advance studies in their field. The employee should be provided the opportunities to attend and participate in seminars and lectures on banking.  Bank should give some more incentive to its employees in order to remove the conflict between lower and higher officers and should try to improve the working condition of the bank.  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

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that.  Recruitments should be strictly on merit basis and induction should be after proper and extensive training.  Old and lazy staff should be replaced by young, qualified and energetic staff.  Working environment, equipment, furniture and staff dressing should be according to the modern banking style.  Proper attention should be paid to upgrade customer services.  Bank should adopt the global organizational banking structure to meet the international standards of banking sector.

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THE END