ContentsBANKS AND THE IMPORTANCE OF BANKING IMPORTANCE OF BANK HISTORY OF BANKING IN PAKISTAN AN OVER VIEW OF BANKING IN PAKISTAN AN OVERVIEW OF MCB CORE VALUE OBJECTIVES OF MCB DEPARTMENTS OF MCB CASH DEPARTMENT PAYMENT OF CHEQUES AT COUNTER ACCOUNTS DEPARTMENT CLEARING DEPARTMENT REMITTANCE DEPARTMENT ADVANCE DEPARTMENT MCB FINANCE TYPES OF FINANCE IMPROVEMENT IN SERVICES AFTER PRIVATIZATION COMPARISON OF INVESTMENT SCHEMES VARIOUS SCHEMES OFFERED BY MCB MCB DEBIT AND CREDIT CARD TYPES of MCB ATM Cards CONCLUSIONS RECOMMENDATION BIBLIOGRARY

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BANKS AND THE IMPORTANCE OF BANKINGSome authors are of opinion that the word bank is derived from the words Banco, Bancus or Banquet which means Bench (Gillani & Sariwal, 1994). This is attributed to the fact that the Jewish transacted the business of money exchange on bench in market place. According to Banking Companies Ordinance 1962 Banking is business receiving for lending or investment, of deposits of money, from public repayable on demand or otherwise and which draw able by cheque, draw and order or otherwise. A simple definition of bank is An institution whose debts are widely accepted in settlement of other peoples debt to each other.(Gillani & Sariwal, 1994, p.1).

IMPORTANCE OF BANKBank plays an important role in promoting economic development of a country. Bank provides necessary funds for executive program in the process of economic development. They collect savings of large masses of people scattered throughout the country, which is the absence of bank world have remained idle and unproductive. These amounts are collected, pooled together and made available to commerce and industry for meting the requirement. This provides finance for successfully carrying on various stages of production as well as distribution. Bank stimulate the habit of savings amount people by the security and interest they offer with these savings which are deposited by people are in position to utilize the deposited amount more productively. The bank increased the transaction capacity of the customers by advancing loans when they require for additional funds to finance their expanded program of transaction. In short, the economic development of a particular country depends on the sound banking system (Gillani & Sariwal, 1994, p. 13).

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HISTORY OF BANKING IN PAKISTANAt the time of independence on 14th august 1947, there were 487 branches of all banks operating in the new territory of Pakistan. After 1 year 292 branches windup their business in Pakistan and remaining 195 branches restricted their banking operating at a minimum level. Up to 1948s half year imperial bank of India also worked as an agent of Govt: of Pakistan & reserve bank of India. On 1st July Quaid-e- Azam Muhammad Ali Jinnah inaugurated the state bank of Pakistan by passing banking act in December 1948 with the power to control the operation of banking companies in Pakistan with extensive power to work as central bank of Pakistan. The important task of SBP was creating a sound banking system in country. For the help of SBP court the Govt: of Pakistan set up a new bank namely National Bank of Pakistan, to serve as agent of Pakistan. Along with other steps take by the SBP it also issued Pakistani currency notes in October 1948 in the denomination of Rs: 5, 10, and 100. For expending business foreign banks, operation was permitted and some other operations were prohibited up to some limits and liquidate some unsound banks. In the banking system of Pakistan commercial banks and development financial institutions and investment, oriented institutions has played a very important role for improving the economy of the country. The DFI s consist of about 9 financial institutions which objects, which vary from once another Pakistan Industrial Credit and Investment Corporation (PICIC) was established in 1957 with objects to provide financial and other assistance to the industrial Pvt. sector for increasing the base of industrialization in the country. Eventually this institution could not accelerate the industrial development and other (DFI) namely Industrial Development Bank of Pakistan (IDBP) was established in 1949. The main object of IDBP is to provide loans to industrial sector to accelerate the pace of industrialization. 3|Page

Basically Pakistan is agro _ based county and 70% population is dependent on this sector, which is back bone of the countrys economy .To achieve the maximum degree of production in this sector got of Pakistan planned to introduce the agricultural technology and agricultural inputs by offering credit faculties to the agriculturist through agriculture development bank of Pakistan (ADBP) which was established in 1961 by merging agriculture development Finance Corporation in 1961. Another DFI; NDFC was established in 1973 with object to provide financial and technical assistance for the growth of economy. This institution facility especially the large enterprise in public sector and provides loans in local and as well as foreign currency. Over comes the deficiency of financing in private sector and to accelerate the pace. Bankers equity was established in 1980 and was sponsored by SBP & Nationalized commercial banks of Pakistan. The main objects were to bridge the gap in industrial as Consequence of half cost of projects plus misappropriate matching resources with the sponsors in existing financial institutions .The bankers equity lay has been since privatized. For the development of any country employment plays very important role to keep the train on the track. Employment enables people for purchasing the goods of other industries in this way cycle revolves. For reducing the unemployment in country house building Finance Corporation was established in 1952 with object to provide credit facility to individuals, small firms. For the foreign investment Govt: established the financial institutions with the cooperation of brotherly Muslim countries e.g. Pak Libya holding company was incorporate as a joins stock company on the 14th October 1978 for economic co-operation b/w the Govt: of Pakistan and Libya in the same manner, Pakistan Kuwait company ltd was established in 1979. With ltd liability under Pakistani law, in the result of joint venture agreement signed by the Govt of Pakistan and Kuwait with initial capital of 250 millions with object to promote economic and investment collaboration b/w Pakistan and Kuwait by providing financial assistance in Pvt. public sector(Gillani & Sariwal, 1994). 4|Page

Along with above (SAPICO) Saudi Pak Industrial and Agriculture Investment Co. Ltd. was established to fill the gap of matching recourses of sponsors. SAPICO was established with initial, cement, sugar, vegetable and ghee etc.

AN OVER VIEW OF BANKING IN PAKISTANAt the time of independence the areas, which now constitute Pakistan, were producing only food grains and agricultural raw material. For Indo- Pak sub continent there were practically no industries and whatever raw material was produced was being exported from Pakistan. How ever commercial banking facilities were provided fairly well here. There were 487 offices of scheduled banks in the territories now constituting Pakistan. As a new country without resources it was very difficult for Pakistan to run its own banking system immediately. There fore in accordance with the provisions of Indian independence Act 1974, an expert committee was appointed to study the issue. On the recommendation of committee Reserve Bank Of India continued to function in Pakistan till 30th September 1984, so that problem of time and demand liability, coinage, currencies exchange etc be settled between India and Pakistan .it was decided that Pakistan will take over management of public debt and exchange control from reserve Bank Of India on 1st April 1948, and that India notice would continue to be legal tender to Pakistan till 30th September 1984. Following the announcement of independence plan in June 1947, the Hindus residing in the territories now comprising Pakistan started transferring their assets to India. Moreover the banks including those having the registered offices in Pakistan transferred to India in order to bring a collapse of new state. By 30 th June 1948, the number of offices of scheduled banks in Pakistan declined from 487 to only 195. There were 19 non Indian foreign banks with the status of small branch offices, which were engaged solely in export of corps from Pakistan institutions I-e, Habib Bank and Australia Bank. 5|Page

The imperial Bank of India failed to work satisfactory .The Government of Pakistan decided and established State Bank of Pakistan on July1 st1948 on the recommendations of committee of experts (Nasir, 1999, 6-10). The nationalization of Banks in Pakistan since January 1st1947 has heralded a new era of development and progress. It has taken a complete baking system with effect from January 1981. Privatization process of state owned banks and enterprises started in 1991. From banking industry, the MCB was first bank, which has been privatized so as to achieve the objectives of the bank with strict and progressive policies, and then ABL was privatized. Yet some other banks I e UBL and HBL are also being considered for privatization decision already approved by previous caretaker Government (Annual Report 2007).

AN OVERVIEW OF MCBThe Muslim Commercial Bank was established one month before the independence in June 1947 first head quarter in Calcutta and after independence it was shifted from Calcutta to Dhaka and afterward its Head quarter was shifted from Dhaka to Karachi in 1948. Among the other 22 scheduled banks with 3525 branches network nationalized on 1 st January 1947 through the nationalization of Banks Act, 1974 under the nationalized of the government. Muslim commercial bank also nationalized and at the time of nationalization premier banks was merged in MCB LTD in 1974. After the failure of the communism, it was realized though the world the idea of nationalization was not correct and has no any positive effects on economy. This idea developed especially in 1980 decade under which in sub-continent of Asia its importance was also realized. In Pakistan Privatization and de-regulation policy was started in 1998 under this policy the first unit privatized was M.C.B with a view to stable the economy and to reduce the burden on national exchequer of other sick units. In 1990 this bank was announced for privatization on the grounds that 51% shares would be for general public out of which 26% shares would be offered to a particular 6|Page

party which will take administration of bank and leady by Mian Mohammad Mansha who was the first chairman of Muslim Commercial Bank LTD. Now out of 10% shares only 14.90% shares are being held by State Bank of Pakistan and all other being held by individuals, directors and joint stock companies etc (Annual Report of MCB 2007)

CORE VALUETrust We are the trustees of public funds and serve with integrity & commitment. Ethical behavior is of critical importance to us. We adopt full compliance with internal and external policies and procedures, operating within the legal framework Customer Focus We continuously seek to exceed our customers expectations, forging and maintaining long term relationships (Muslim Commercial Bank, Ltd). Innovation We strive to be the market leaders in innovative products and services offering customized financial solutions with flawless execution (Muslim Commercial Bank, Ltd). Teamwork The diversity of our people is our strength. We inspire and challenge each other working together to achieve synergy (Muslim Commercial Bank, Ltd). Achievement Our people are our most valuable asset. We are committed to a result oriented culture. Our goals are clear and merit is the only criterion for reward (Muslim Commercial Bank, Ltd).

OBJECTIVES OF MCBThe main objectives of M.C.B are to earn profit by investing the money of depositors, who can not utilize that money for getting required .so the bank invests that money in the shape of advances and shares, the return or interest charged on those advances with the depositors. Beside above-mentioned objectives the Bank serves the society by facilitating them in the shape of advances to industries etc (Annual Report, 7|Page

2007).

DEPARTMENTS OF MCBMCB is one of the largest private banks of Pakistan. It offers a well-organized structure of specialized services distributed among its various departments. This departmental segregation provides MCB with more proper and professional approach and efficient means of performing each service. Departmentalization makes the services more proficient and specialized procedures for every job are used. At each branch level the duties are divided into seven departments. There is a chief manager at the top level of each branch. He is responsible for the overall performance and working of his branch. The authority is then divided into two heads at the next level. There is a credit manager who handles the credit department operations of the branch. The other one is the operations manager who is responsible for all the rest of the departments. Each branch is divided into the following departments: Cash department Clearing and collection department Remittance department Qureshi. Hameed (personal communication, June 26, 2008) The functions of each department and their operations are explained as follows:

CASH DEPARTMENTCash department is the back bone which is the receives cash from the depositors and make payment to the holder of cheque, in cash department customers come and deposits their surplus amount as saving and they may be able to draw the amount as saving and they may be able to draw the amount to meet their needs as and when they demand when the people come to get their maintain outward in the shape of (D.D, T.T, M.T, P.O) from one place to another they deposit their money in the bank for that purpose the bank can get money from State Bank of Pakistan. NBP (National Bank of Pakistan) to adjusts and dealing properly and to carry on its business. The casher of the department prepares two sheets one for cash receipt and other for cash 8|Page

payment. As and when customer come to deposit balance in their accounts called cash deposit and to with draw balances in their accounts called cash payments. In the end pf working hours the casher prepares daily cash book showing the remaining cash with him after the payment and receipts this amount is known as closing balance of that day and on the next day this will be considered as opening balance, the cash book contain the column of PLS, Current & Other Accounts and the balances debited or credited in appropriate amount heading, according to the nature of the transaction. The bank not only receives the payment of electricity bills special schemes, which are operated through commercial bank and the receipts of sponsorship scheme. T. Shaikh (personal communication, June 30, 2008)

PAYMENT OF CHEQUES AT COUNTERThe bearer cheques are paid at the counter, to the bearer of the cheque. When the cheque is presented on the counter for payment, it must be properly scrutinized, it must be that, The cheque has a proper number in series. The amount in words and figures tally. The cheque has signature of the payee on back side. The cheque is drawn on the bank where it has been presented. After the basic checks the cashier checks the balance of the drawer is found sufficient. He also keeps in the mind that cheque has not got stopped payment by the drawer and either stop payment is order has been issued. The signatures on specimen signature card are tally. After being satisfied in all these respects the payment is made to the payee. Stop Payment Order To stop payment against any cheque the drawer writes an application to the Manager of the bank when such application received the time is marked on it the signature of applicant is verified from specimen signature card and stamp is affixed. This stamp has blank lines for cheque no, favoring, date, time asked etc.

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Issue of Cheque Books The cheque book is the most sensitive item of bank stationary, so due care is taken in handling them. In Frere Road Branch the cheque book received from NIFT. The customer are required to fill a cheque requisition slip which is different in case of new account holder and existing account holder. For new account holders a separate slip is provided while the others have attached the requisition slips in their cheque book, after receiving their requisition slips. Separate requisition slips are filled are filled for each account holder. Which are sent to NIFT in the same bag, which carries clearing? These cheque books are received in five days. At the top of each leaf of the cheque book the A/c number and at the place of signature the name account holder is written a cheque. First seven digits in this number are for serial number of cheque, next three digits for bank code and next digits for branch code. After receiving from NIFT these books are issued to account holder. The series of cheques is written on the cheque requisition slip and signature of the A/c holder are taken on same there the entry is made in register and slip is sent to computer operator to enter the series of cheque numbers. In order to receive the cheque book the account holder must have an authority letter from the account holder. At the time of issuance of cheque book the signatures of the receiving person to ensure that the right person is receiving cheque book. N. Memon (personal communication, Aug 05, 2008)

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ACCOUNTS

DEPARTMENT

Accounts department posts the day-to-day transactions of every department. All the departments have to submit their detailed progress reports to this department. Accounts department prepares the daily, weekly, fro nightly, monthly, quarterly, semiannually, and yearly statements. Which are to be submitted to Head Office? In this department of bank, different types of accounts are maintained. Customers who want to open an account in bank have to interact with the officers of this department R. Ghumro (personal communication, Aug 12, 2008) Types of Accounts Three main types of accounts are maintained in the bank are as follows: Current Account The current account can be opened in bank with the initial of Rs. 1000. The depositor does not receive any interest against current account deposits. There are no restrictions of withdrawal of money from the bank. But in case of over draft obtained by customer under current account has to abide by the rules and regulations. PLS Account PLS account is based on the Profit and Loss Sharing. The amount, which is deposited by the customers in the bank, is involved in business or it is landed to the investors, both are bound to share and losses arising from such transaction. Term Deposit Account These deposits are called as time deposits, because the deposits are based on fixed duration. The period for which these deposits are kept with bank ranges from seven days to 10 years in the light of agreement between customers and the bank. The profit allowed on these deposits depends on the duration, longer the duration, the higher will be the profit (Terms & Conditions account opening, 2007, p. 1, 2)

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CLEARING DEPARTMENTWhen cheque drawn on one bank is present for deposit in other bank then it is dealt with clearing. There are many kinds of clearing cheque and procedure to collect cheque from different banks. This is different from bigger cities to smaller. However the following modes of the clearing cheque are generally used in commercial banks. Clearing Cheque Transfer Cheque C.C Cheque Same Day Clearing M. Rehman (personal communication, Aug 15, 2008) Clearing Cheque There are two types of clearing cheque clearing. Clearing Sent and Receive. i) Clearing Sent Clearing sent consist of the cheque drawn on any other bank in the same city but presented for deposit in our branch. When these cheque received on the counter. Clearing stamp is affixed on the pay in-slip and on the cheque and at the backside of cheque payees account credit or (According the nature of payees cheque) stamp is affixed. Clearing stamp with next days date is used. Because cheque received on one day are cleared next day. All cheque and voucher recorded on daily voucher sheet after the affixed clearing stamp and payees account credited stamp. Cheque and vouchers recorded separately. Vouchers are recorded debit side and cheques are recoded credit side. At the end of the day cheque and pay-in-slip are separated. Cheques are sent for clearing to NIFT (National Institutional Facilitation Technology) for clearing, while payin slip serve the purpose of vouchers in the branch, and on realization of the cheque. Customer accounts credited on the strength of the credit voucher. ii) Clearing Received Clearing received consist of cheque drawn on our bank but deposited in other banks of the city. These cheques when received from the NIFT are properly scrutinized 12 | P a g e

and debited to their respective accounts. The cheques that cannot be paid due to any reason are return to NIFT. Cheque Return When clearing cheque are received and sent. It is not necessary that all cheque received or sent will be passing, if there is in sufficient balance customers account. Cheques are being returned. There are many reasons to return the cheque. There are two types of cheque returned. i) Inward Cheque Return Inward cheque returns are those, which we had sent in clearing. For the amount of these cheques their respective accounts debited and the cheque are returned to the parties after making entry in register. ii) Outward Cheque Return Outward cheque returns are those, which come in our branch for clearing. We recorded these cheques in the register and attach a cheque return slip with them and are sent back to NIFT. Transfer Cheque This second category of cheque received on clearing counter. Transfer cheques are those drawn on our branch and presented for deposit in the same branch. When these cheques are received then transfer stamp affixed on pay-in-slip and the cheque is sent to the computer operator. Because the drawer is also from our bank then the cheque is immediately credited in the payees account. Cash Collection Cheque Cheque presented for deposit in our bank but drawn on a bank out side the city are sent for collection. These cheques are recorded in the C.C register and a C.C slip is filled in duplicate. Its original copy is attached with cheque and sent for collection while the duplicate copy remains with us attached with pay-in-slip. These cheques are sent to our main branch in the city where drawers bank is situated. Incase of cheque drawn on any of the branches of MCB the cheque is sent directly to that branch. The records of the C.C sent two vouchers are prepared BRBC debit & BCBR

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credit for the amount of cheque. At the time of realization of C.C the entry passed earlier is reversed. The account of the payee is debited by the amount of postal charge and 25% recovered and commission on bills (Gillani & Sariwal, 1994, p. 23-35).

Same Day ClearingThere are two types of same day clearing, cheques of same day clearing sent and same day receive. Same Day Clearing Sent Clearing sent consist of the cheques drawn on any other bank in the same city but presented for deposit in our branch. When these cheques are received on the counter, same day clearing stamp is affixed on the pay-in-slip and the cheque and on back side of cheque payees account credited stamp affixed. Cheques received on which date also cleared on same date. All cheques and vouchers recorded on daily voucher sheet after the affixed same day clearing stamp and payees account credited stamp. Cheques and vouchers recorded separately. Vouchers are recorded debit side and cheques are recorded credit side. Same Day Clearing Received Clearing received consist of cheques drawn on our bank but deposited in their bank of the city. These cheques when received from the NIFT are properly scrutinized and debited to there respective accounts as quick as possible. The cheques that can not be paid due to any reason are returned to NIFT. S. Ahmed (personal communication, Aug 20, 2008). Note: Same day clearing, cheques must be at least amount of Rs.500000 and bank charged Rs.300 on clearing of cheque and in the same case of returned bank charged Rs.400.

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REMITTANCE DEPARTMENTREMITTANCE Fast, secure and easy-to-use, MCB's Remittance Services is efficient ways to transfer money overseas. You can remit funds from any country to Pakistan through Swift System. Posting department posts the day-to-day

transactions of every department. Bank provides the facility of remitting the funds from one country to another county and inside the county, within some restrictions. It makes the devilry of funds much quickly and safety and thus saves the time of business community and the general public. The remittances department is divided into two sections. S. Ahmed (personal communication, Aug 20, 2008) A. In-Land Remittance. B. Foreign Remittance. a. In- Land Remittance In land remittance means in-flow and out-flows of the funds from one branch to another branch within the country though banking instruments, is termed as in land remittance.

Banking Instruments for In-Land Remittance1 2 2 3 4 5 Demand Draft Travel Cheque Pay Order Telegraphic Transfer / Telex or Fax Transfer Mail Transfer Online (Cross Branch Transaction). It is a written order drawn by one branch of the bank to the other branch of the same bank, under the certain agreement to pay a certain sum of money to the order of the 15 | P a g e

1. Demand Draft

special present, can be used from one city to another city. Bank charges the commission according to the amount. 2. Travel Cheque 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. MCB Rupee Traveler's Cheques were first introduced in 1993 as safe cash for traveling and travel related purposes. The product has been extremely popular and is preferred over cash by customers while traveling and in all walks of life. MCB Rupee Traveler's Cheques- The safest way to Carry Cash Rupee Travelers Cheques Features Easily available: Buy them from any of the designated branches in Pakistan. As good as cash: MCB RTCs are safe to carry and can be used without any inconvenience especially by Travelers. Easily encased: At any designated MCB branch. Easily refunded: in case of loss or theft, you can get the full amount back. Exclusive security features: Due to special printing and safety precautions, Cheques cannot be duplicated. Denominations: Available in denominations of Rs 1000, Rs 5000, Rs 10,000 and gift cheques of Rs 500. Valid until Used: Validity of Cheques indefinite. 3. Pay Order Pay order is issued for banks own payments purpose. But in practice these are also issued to customer for making payments. 4. Telegraphic Transfer / Telex or Fax Transfer Transfer of funds from one branch to another branch of the same bank under special arrangements for the payment to the beneficiary through Telegram/Telex or Fax is called telegraphic transfer. It is necessary that there should be account mentioning. The 16 | P a g e

bank charges are same as on demand draft. 5. Mail Transfer Transfer of funds from one branch to another branch of the same bank within city or out of city through mail or courier service is called mail transfer. 6. Online This is a Transfer of funds between two branches through Internet. Every branch is connected through server thats why ever branch have facility to transfer fund in the account of another person, which is locate in different cities of Pakistan. So these branches are called online branches (Annual Report, 2007). FOREIGN REMITTANCES The term Remittance means to send money by bank or by post. Thus the act of remitting money from one place to another place is called Remittance. According to foreign remitting circular, the function of issuing and accepting of foreign remittance is performed by the Foreign Remittance section to domestic resident as well as to the foreigners. This means that any person either of Pakistani nationality or foreigner can send money from Pakistan to another country. The bank also provides the foreign exchange in the shape of the travelers cheque and credit cards to intending visitors. Travelers cheque are only issued to that person, who has an account with the M.C.B. S. Ahmed (personal communication, Aug 22, 20080

ADVANCE DEPARTMENTThis department lends money to the customers / account holders for the purpose of financing the account holders. There are various types of advances. 1. Over Draft. 2. Cash Credit. 3. Loans. 4. Secured Loans 5. Un Secured Loans. 17 | P a g e

Usually the banks lend credit on short term bases. They lend loans to any body but that any body customer must fulfill the 5 Cs. 1. Character. 2. Capital 3. Condition. 4. Collateral. 5. Cash Flow. Haroon (personal communication, Aug 25, 2008)

MCB FINANCEPERSONAL LOAN

The more you praise and celebrate your life, the more there is in life to celebrate. MCB Personal Loan shortens the distance between your dreams and your celebrations. It is fast, flexible and affordable Fast Speedy loan approval No guarantor / security / collateral required Flexible Borrow up to Rs. 1,000,000 1 to 5-year tenures Partial and full adjustments allowed anytime during the tenure Optional insurance. Equal monthly installments Lower interest rates Higher loan limits Special Benefits Loan amount renewed anytime after nine months. Existing Customers 18 | P a g e

Fill in and submit the application form along with a copy of your CNIC if you have been a customer of MCB Car4U, MCB Pyara Ghar or MCB Business Sarmaya for at least 12 months Get greater loan limits if you are an existing MCB Branch Customer. Get 1 % discount if you already have a similar facility from any other bank and want it transferred to MCB Personal Loan through our BTF option. Credit Card BTF option is also available at very competitive rates. Prepayment Penalty You can fully pre-pay or partially adjust your loan only once a year subject to a penalty as given in chart below. Also, partial adjustment must be at least equal to 6 monthly installments (Annual Report, 2007).MCB CAR4U

MCB CAR4U Auto Finance assists the customers in many ways. It is affordable, with lowest mark up, flexible conditions, easy processing and, no hidden costs. MCB Car4U offers the following benefits to its customers: Option of financing or leasing. Competitive financing rates. Flexible equity/rate options. Financing tenure from 1-7 years. Low processing fee of Rs. 3,500/-. It is valid for salaried personnel on contract. The eligibility criteria for Car4U scheme is: Pakistani national residing in an approved area/city. Not less than 21 years for businessmen, or 22 years of salaried personnel, and would not be more than 70 years on the maturity of the facility of Auto Finance. Salary/Income is at least Rs.12, 000/- per month with monthly installment not exceeding 50% of the take-home salary/income. Businessman/Self-employed person with a minimum experience of 1 year in the 19 | P a g e

same business/profession. Permanent employee. For contract employees, 2 years on the job with the current employer or 3 years of overall experience. Its distinctive features are: Insurance MCB Car4U gives an option to choose from a panel of reputable Insurance companies and secures auto finance deal, on discounted rates. Flexibility MCB CAR4U provides complete flexibility in creating customized deals. The client has the power to choose the rate/ equity option that suits him the best. They can also choose a suitable tenure between 1-7 years. Excellence It provides opportunity to make early payments, twice a year. It also gives access to a wide dealership network with quick processing. There is convenient access through more than 900 MCB branches. There are Independent Service Quality Representatives to assist customers. MCB Car4U offers a variable rate i.e. 12% markup at 10% equity. It also offers a 'No Documents' option where the markup rate is 13% at 20% equity. The three months deferred product provides the customer with 3 months of financial relief after making their down payment; the rate for this option is 12.5% (MCB CAR4U, 2007).

TYPES OF FINANCEThere are 4 main types of finance. 1. Running Finance. 2. Demand finance. 3. Staff finances. 4. Cash finance. 1. Running Finance It is provided only to current account holders regional office can sanction the loan

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maximum one lac. The General Manager of the Circle office Hyderabad has the power to sanction the loan up to 1 Million rupees; beyond this limit the head office will be the sanctioning authority. 2. Demand Finance The rules and demand finance are same as for running finance. PLS account holder can also take the loan. The repayment of the loan will be made by monthly equal installments. 3. Staff Finance The bank provides this finance only to its staff. The member can get the loan for these purposes. i) ii) iii) House Building Personal vehicle. (Car) Computer Loan.

4. Cash Finance Cash finance is provided on markup bases reducing balance system. The customer would be required to adjust the advance within the expiry period, but he or she would operate the account freely, within the sanctioned limit (Annual Report, 2007).

IMPROVEMENT IN SERVICES AFTER PRIVATIZATIONAs told by the branch Manager Mr. Abdul Hafeez Qureshi, at the marketing and business development division, the MCB was privatized in April 1991, after privatization the bank made a remarkable growth and improvement in its services.

COMPUTERIZATIONModernization and computerization of branches is an aspect which has attract more clients, the latest equipment has been provided to the most of the branches especially, the computer for the ledger keeping & etc. Now MCB Install software with name Symbols. This software is very help to employees during the time of transaction, at time of the posting automatically transaction are posted in the general ledger. Those 21 | P a g e

branches which are Symbols through out the Pakistan do not pay any charges against online money transfer. So this software is very helpful for employees as well as customer.

CONSULTANCY SERVICESAfter privatization a public sector unit, prospective buyers need professional assistance MCB offers the specialized services for the valuation of industrial units, preparing bid documents and arranging finance for the purchase of units. FAX PRESS The fax and telexes facilities provide speedy transfer of documents within Pakistan or all around the world, just within a minutes, such technology was not introduced before privatization.

COMPARISON OF INVESTMENT SCHEMESAfter privatization the bank introduced several saving schemes to attract the customers and to meet their needs. Capital Growth Certificate Scheme. Foreign Currency Scheme. Mahana Khushali Scheme. Hajj Mubarak Scheme. Rupee Travelers Cheques. Photo Credit Scheme. Khushali Bachat Account. MCB Gold 365

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VARIOUS SCHEMES OFFERED By MCBEvery bank provides different schemes under different circumstances, policies for their customers and general public. From time to time M.C.B Bank Limited offered several schemes to general public and its account holders. The main motive of their schemes is to create the habit of saving among the people of the country. M.C.B Bank Limited attracts the people with reasonable rates of return on the schemes (Investment Scheme, 2007, p. 1-6).

VARIOUS SCHEMES OF MCBFollowing are the schemes, which are offered by M.C.B Bank Limited. 1. M.C.B Car for You. 2. Current account 3. Pls account 4. khushali bachat account 5. Agricultural Loan. 6. House Finance. 7. ATM / Debit Card 8. Debit Card. 9. Hajj & Umrah Services. 10. M.C.B Master Card & Smart Card 11. M.C.B Rupee Travelers Cheque. M.C.B CAR FOR YOU 23 | P a g e

This scheme of M.C.B has attracted the masses of people with its lowest rate of 13% markup and a short period of document processing to facilitate and save the precious time of their customers. CURRENT ACCOUNT The current account can be opened in a bank with the initial amount of Rs. 1000. The depositor does not receive any interest against current account deposits. There are no restrictions whatever, on withdrawal of money from the bank. But in the case of over draft obtained by the customer under current account has to abide by the rules and regulations. PLS ACCOUNT There are the accounts, which are based on the Profit and Loss Sharing. The amount, which is deposited by the customer in the bank, is involved in business or it is landed to the investors, both are bound to share in then profit as well as the loss arising from such transaction. KHUSHALI BACHAT ACCOUNT Khushali Bachat Account provides a high rate of return & lots of other benefits to its account holders. According to M.C.B brochures, the rate of profit is 8% per annum. AGRICULTURE LOAN This scheme of M.C.B has increased the hopes of the formers who cant afford or in need of a financial help in their agricultural system. This scheme has helped many farmers to develop or cultivate their lands. HOUSE FINANCE This scheme has 3 different aspects or options from which the customers have to choose as per their own need. Either the customer wants to buy a house or want to renovate the house or want to build a house;

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M.C.B provides finance in this regard at the reasonable markup i.e. 11%.

AUTOMATED TELLER MACHINE (ATM) ATM machines have been installed in 102 branches of M.C.B in all over cites of Pakistan extending round the clock money withdraws facilities to the bank clients.

DEBIT CARD This is a new and attractive scheme of launched by M.C.B. in this scheme all that u have in your account is in your card. So you can buy accessories on the spot with this card and the payment is being made easily from your account, by simply debiting your account. Thats why it is called as SIKA-E-RAIJ-UL-WAQT. HAJJ & UMRAH For performing Hajj & Umrah sound financial background is need, which every one can not have. So H.B.L also helps the pilgrimage in this regard, by financing them to perform Hajj & Umrah. M.C.B MASTER CARD & SMART CARD Both facilities will be available to the M.C.B clients having a foreign currency account with the bank. MCB RUPEE TRAVELLERS CHEQUES M.C.B Rupee travelers cheques are as good as cash. M.C.B rupee travelers cheques are accepted at major shops, travel agents, hotels, business establishments and M.C.B branches all over the Pakistan (Investment Scheme, 2007, p. 10-18).

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MCB DEBIT AND CREDIT CARDINTRODUCTION Introducing new banking products, the introduced 24-hours cash withdrawal ATM services in 1996. These services have been extended to 13 cities of the country and 147 online branches are covered over a network of 91 ATMs at that time. The installation of ATMs help the concerned branches in many ways i.e. counter services are improved and the rush of small withdrawal at centers are eliminated / reduced. Besides the cardholder are provided a convenience of 24-hours cash withdrawal. S. Ahmed (personal commission, Aug 15, 2008) Facilities on ATM The following facilities are provided on ATMs to cardholders. Withdrawal of cash with in 30 seconds, 24-hours and 365 days of the year. Balance inquiry of MCB rupee account. Mini statement. Fund transfer. Fast cash. Application for obtaining MCB ATM Cards Customer of online branches of our bank willing to obtain MCB ATM card will furnish application from dully filled in complete in all respects, signed along with copy of NIC to the online branch where he/she maintaining his/her accounts. The branches will process the application and take up the matter with ATM card department of information technology division, principal office, Karachi MCB head office issuance of the MCB ATM cards.

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The department after the preparing the MCB ATM card of the account holder and allotting PIN i.e. personal identification number will send both of these items separately in sealed envelops to the branch from where the same will be delivered to the account holder after obtaining the proper acknowledgement recites. Users guide also provided to the card holder along with PIN. Spending Limits Only MCB gives you the flexibility to choose from a range of card usage ATM Withdrawal Limit (Rs.) Local Classic Gold International Classic Gold 10,000 25,000 10,000 25,000 POS Purchasing Limit (Rs.) 50,000 100,000 100,000 150,000

limits.SmartCard is available in the Classic and Gold category with a further choice of Local or International versions. With these card categories, supplementary cards for your family members are also available. The difference between the Classic and Gold categories is based on their purchasing and withdrawal limits as given in the above table (Terms & Conditions MCB 24/7 Smart Card, 2007, p. 6, 7).

TYPES of MCB ATM CardsTwo types of MCB ATM Cards are issued I.e. Master Card & Smart Card. PURCHASING Smartcard is your debit card for cash free convenience. Use it for your shopping and purchases at a rapidly growing nationwide network of merchant locations including petrol pumps, stores, bakeries, departmental stores, jewelers, travel agents, restaurants, chemists, hospitals etc. Its simple, safe and convenient to use: Shop at locations displaying the Cash Free sign and the MCB Cards logo. For payment, no need to pay cash. Simply present your card. 27 | P a g e

Merchant will swipe your card for the amount of the transaction. You simply authorize your transaction by entering your PIN (Personal Identification Number) yourself. The PIN is for extra security. The purchase amount is debited from your account To make your transaction safe and secure, MCB has installed State of the art smart terminals at your merchant locations, to ensure your personal convenience. At restaurants & fuel Stations your merchant will bring portable terminals to you for your PIN entry. Existing MCB ATM Card holders have been automatically provided with the debit facility. So go use it now! International Usage International cardholders have the un-matched advantage of using this facility at millions of Locations worldwide carrying the logo. BILL PAYMENT Hassled by long queues and short bill- T accepting hours at limited locations? Now you can use the Smartcard to pay your utility bills at the largest nationwide network of MCB ATMs. Pay online and get instant confirmation of payment. Make bill payments upto Rs. 20,000 per day per card. Currently available for payment of gas bills of Sui Southern Gas customers, this facility is being expanded to cover all utility bill payments. Pay as a registered or non-registered user. Registration will help you avoid the time delay in entering details each time you carry out a transaction. Please fill out the MCB utility bill (i.e. SSGC) payment application form available for your convenience at your MCB online branch. FUNDS TRANSFER 28 | P a g e

Want to avoid the hassle of writing cheques and time-delays in making pay orders, demand drafts and telegraphic transfers? Enjoy the benefit of MCB Funds Transfer facility with your Smartcard at the largest nationwide network of MCB ATMs. Transfer funds between a maximum of 8 pre-registered online accounts within the growing network of MCB branches across 30 cities. Get round the clock convenience with the largest nationwide network of MCB ATMs. Transfers take place instantly & funds become accessible for use You can use the balance inquiry facility to reconfirm for your Satisfaction. MCB took the award of First Asian Bank of the year, due to best performance. The branch is situated in main business area of the town where the huge transactions mostly a prated by the business man even then the MCB Frere Road Sukkur is performing better services to the clients. The over all facilities are attractive from bank to the customer.

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CONCLUSIONSAfter the completion of the internship at M.C.B internee had drawn the following conclusions. The traditional banking system is still followed by MCB. Like Utility Bills are recorded manually etc. The process of documentation is lengthy and time consuming. MCB Frere Road Sukkur is failed to provide good quality service according to the expectations of the customers. The relationship between employees and customers is satisfactory. Customers face some difficulty in dispatching of bank documents. The bank has managed to achieve greater profitability by introducing innovative products and implementing effective strategies. The branch managers are usually given very little regarding sanction of advances

and over draft whereas the responsibilities are numerous. The bank staff has been found as less satisfied with bank policies and the recent

retrenchment in the bank has created unrest and panic. Administrative expenditure is very high. The increase in profitability resulted in increase in share price and earnings per Share of the bank. The deposits and advances of the bank have grown consistently over a period of last 5 to 6 years The bank also has the facility of Loan /credit products including products like MCB CAR 4 U, MCB Pyara Ghar, etc. The MCB ATM Network is the largest and most advanced of its kind in the country, and is part of MCB's continuing efforts to provide convenience to its customers. Lockers facility is only available in limited branches. 30 | P a g e

Now they install new software Symbols, so now they improving fast day by day. Limitation of withdrawals in MCB ATM cards. ATM card services are facilitate in more than 70 cities of Pakistan. More than 500 branches are located in Pakistan ant at least 100 MCB ATM machine in Pakistan. A job rotation program should be followed for the individuals after three years at the bank in order to keep them motivated and energetic so that doing the same job for years may not bore them. Despite all these facts there are some areas, which needs to be improved, Equal distribution of work should be done and bring professional people to all of its branches in order to meet the requirements of a new era and to fulfill the needs of 21st century.

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RECOMMENDATIONIn the whole internship (6 weeks) at MCB, I saw lots of deficiencies at branch. So I give some suggestions which are as under. In PLS term deposit account you fixed a period, called date of maturity such cash deposited under PLS term deposit account for 6 months and over but less than one year. It means in such case date of maturity is after the 6 months and if depositor cash his money before the date of maturity bank treated this term deposit account as a PLS saving account. I think that this exemption is not good because you made it as a fixed account, you are liable to assist people for the completion of period, dont allow to any one to with draw their money before the date of maturity the concept of PLS term deposit account would be end or died. Modern banking system should be adopted. MCB must improve the quality of services. MCB should create an ideal working environment in order to create good relations between employees and customers. Safety deposits and lockers should be provided to the customers for their safe keeping of money and valuables. MCB should choose a reliable courier services or mail to remove the difficulty of customers in dispatching of bank statements. Processing of loans should be simplified and the time for the loan approval should be revised. There are lengthy and cumbersome legal procedures that make the customer more reluctant to come to the bank. The emphasis of the bank should be on speedy processing and prompt services. MCB must concentrate on promotion of their products and services. Bank should disburse its loans to diversified fields. The use of the technology should be further improved. Although they have computers but most of their work is manual. 32 | P a g e

Time deposits should be properly administered Fund Investments should be made after careful analysis.

BIBLIOGRARYGillani, A., & Sariwal, G. (1994). Banking. Karachi: Kifiyat Academy. Muslim Commercial Bank, (2007). Annual Report. Karachi. Muslim Commercial Bank (2008). Our Values. Retrieved September 10, 2008, From http://www.mcb.com.pk/mcb/our_values.asp - top Terms & Conditions For Account Opening. (2007). Guide line for account opening [Brochure]. MCB. Terms & Conditions For MCB ATM 24/7. (2007). Guide line for ATM Cards [Brochure]. MCB.

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