mcb project(mi08mba020, mi08mba040)

8/7/2019 MCB PROJECT(Mi08MBA020, Mi08MBA040)

1/155

PROJECT

MCB BANK LTD


2/155

13

7


3/155

13

7


4/155


5/155

13

7

PROJECT

ONMCB BANK LTD

Presented By:Mudassar Hassan Ei08MBA040

Hafiz M.Amer Nisar Ei08MBA020


6/155

13

7

TABLE OF CONTENTSTABLE OF CONTENTS

TABLE OF CONTENTS ....................................................................................................................6

EARLIEST BANKS......................................................................................................................................11

INTRODUCTION TO THE BRANCH ...........................................................................................52

ACCOUNT OPENING...................................................................................................................................60

PROCEDUREFORACCOUNT OPENING:........................................................................................................67

INWARD REMITTANCE..................................................................................................................86

IMPORTANT FEATURES..............................................................................................................................91

PROCEDURE .............................................................................................................................................92

INITIAL INFORMATIONREQUIREDBYTHEBANK:...........................................................................................94

PREPARATIONOF CREDIT PROPOSAL:.........................................................................................................95

SANCTION ADVICE:...................................................................................................................................96

OTHERTERMSAND CONDITIONS:..............................................................................................................97TYPESOF ADVANCES................................................................................................................................99

LETTER OF CREDITS ..........104


7/155

13

7

EXECUTIVE SUMMARY

We were assigned to complete a project on a renowned Organization & prepare a Report ofthat Organization. So we selected MCB Bank & decided to work on this Bank.

The banking structure in Pakistan comprises of the following types, State Bank of Pakistan,

Commercial Bank of Pakistan; Exchange Banks, Saving banks, Cooperative banks,

Specialized credit institutions. The state bank of Pakistan is the Central bank of the country

and was established on July 01, 1948. MCB transferred its registered office to Karachi in

1956, where the Head Office is presently located. In April 1991, MCB became Pakistans

first privatized bank.

After this, Report provides detailed information about the Bank including origin of MCB

BANK its history & Introduction, vision, mission, Hierarchy of Head Office &

SHEIKHUPURA Main Branch and all about its products & Services Etc.

Report provides the information about all departments of MCB bank.

This Report also provides the Awards Achieved by the MCB in its history,

The departments in which we have done our work, these are Account opening department,

Remittance department, Clearing department, Advances department and Foreign Exchange

department.

Here after comes Financial Statement Analysis comprises of general and special analysis, In

the last, the final Recommendations & Suggestionare given to overcome flaws & Problems

that is being to be faced by MCB Bank Limited.


8/155

13

7

Here some Financial Highlights of MCB half year ended June 30, 2009 which shows Profit

before taxation 11,688,703, Taxation 3,932,214 Profit after taxation 7,756,489,

Un-appropriated profit brought forward 9,193,332 Transfer from surplus on revaluation of

fixed assets (net of tax) 10,660 Profit available for appropriation 16,960,481

The financial analysis of MCB BANK is divided into two major parts

1. General Analysis

2. Specialized Analysis


9/155

13

7

EVOLUTION OF BANKING

The word 'Bank' is said to have been derived from the words Bancus or Banque or Bank.

This history of banking is traced to as early as 2000 B.C. The priests in Greece used to keep

money and valuables of the people in temples. These priests thus acted as financial agents.

The origin of banking is also traced to early goldsmiths. They used to keep strong safes for

storing the money and valuables of the people. The persons who had surplus money found it

safe and convenient of deposit their valuables with them. The first stage in the development

of modern banking, thus, was the accepting of deposits of cash from those persons who had

surplus money with them.

The goldsmiths used to issue receipts for the money deposited with them. These receipts

began to pass from hand to hand in settlement of transactions because people had confidence

in the integrity and solvency of goldsmiths. When it was found that these receipts were fully

accepted in payment of debts; then the receipts were drawn in such a way that it entitled any

holder to claim the specified amount of money from goldsmiths. A depositor who is to make

the payments may now get the money in cash from goldsmiths or pay over the receipt to the

creditor. These receipts were the earlier bank notes. The second stage in the development of

banking thus was the issue of bank notes.

The goldsmiths soon discovered that all the people who had deposited money with them do

not come to withdraw their funds in cash. They found that only a few persons presented the

receipts for encashment during a given period of time. They also found that most of the


10/155

13

7

money deposited with them was lying idle. At the same time; they found that they were being

constantly requested for loan on good security. They thought it profitable to lend at least

some of the money deposited with them to the needy persons. This proved quite a profitable

business for the_ goldsmiths. They instead of charging safe keeping charges from the

depositors began to give them interest on the money deposited with them. This was the third

stage in the development of banking.

DEFINITIONS OF A 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 Crowther:

"Bank is a dealer in debtshis own and of other people."

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 Banking companies ordinance 1962:

Banking Companies Ordinance 1962 "Banker means person transacting the business of

accepting for the purpose of lending or investment, of deposits of money from the public,

repayable on demand or otherwise and withdraw able by cheque, draft, order or otherwise

and includes any Post Office Savings Bank."

According to Holder:

The modern banker is primarily a dealer in credit.


11/155

13

7

Thus the comprehensive definition of the bank is:

A bank is a financial institution, which deals with money and credit. It accepts deposits from

individuals, firms and companies at a lower rate of interest and gives at a higher rate of

interest to those who need them. The difference between the terms at which it borrows and

lends differs forms the source of it profit. A bank, thus, is a profit earning institution.

Earliest Banks

The very firstbanks were probably the religious templesof the ancient world. In them were

stored gold in the form of easy to carry compressed plates. Their owners justly felt that

temples were the safest places to store their gold as they were constantly attended, well built

and were sacred, thus deterring would-be thieves. There are extant records of loans from the

18th Century BC in Babylon that were made by temple priests to merchants.

Ancient Greece holds further evidence of banking. Greek temples as well as private and civic

entities conducted financial transactions such as loans, deposits, currency exchange, and

validation of coinage. Interestingly, there is evidence too of credit, whereby in return for a

payment from a client, a money Lender in one Greek port would write a credit note for the

client who could "cash" the note in another city, saving the client the danger of carting

coinage with him on his journey.

Ancient Romeperfected the administrative aspect of banking and saw greater regulation of

financial institutions and financial practices. Charging interest on loans and paying interest

on deposits became more highly developed and competitive.
http://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Templehttp://en.wikipedia.org/wiki/Templehttp://en.wikipedia.org/wiki/Goldhttp://en.wikipedia.org/wiki/Babylonhttp://en.wikipedia.org/wiki/Ancient_Greecehttp://en.wikipedia.org/wiki/Ancient_Romehttp://en.wikipedia.org/wiki/Ancient_Romehttp://en.wikipedia.org/wiki/Templehttp://en.wikipedia.org/wiki/Goldhttp://en.wikipedia.org/wiki/Babylonhttp://en.wikipedia.org/wiki/Ancient_Greecehttp://en.wikipedia.org/wiki/Ancient_Romehttp://en.wikipedia.org/wiki/Bank


12/155

13

7

Importance of Banking

Banks play very important role in the economic life of a nation. The growth of the economyis dependent upon the soundness of its banking system. Although banks do not create new

wealth but borrow, exchange and consume. These make generation of wealth. In this way

they become most effective partners in the development of that country.

To encourage the habit of saving and to mobilize these savings is its basic purpose. Banks

deposit surplus from the public and then advances these surpluses in the form of loans to the

industrialists, agriculturists, businessmen and unemployed people under different schemes so

that they set up their own business. Thus banks help in capital formation.

If there are no banks, then there would be concentration of wealth in few hands and great

portion of wealth of a country would be idle. In the fewer developing countries rate of saving

is very low and due to this, rate of investment and rate of growth is also very low. We can

take bank just like a heart in the economic structure and capital provided by it is like blood in

it. As long as the blood is in circulation, the organs will remain sound and healthy. If the

blood is not provided is not provided to any organ then the organ would become useless. So

if the finance is not provided to agriculture sector or to industrial sector, it will be destroyed.

Loan facility provided by bank works as an incentive to the producer to increase production.

Banks provide transfer of payment facility, which is cheaper, quicker and safe. Many

difficulties in the international payment have been overcome and volume of transactions has

been increased. These facilities are very much helpful for the development of trade and

commerce.


13/155

13

7


14/155

13

7

The partition plan was announced on June 3, 1947 and August 15, 1949 was fixed as the date

on which independence was to take effect. It was decided that the Reserve bank of India

should continue to function in the dominion of Pakistan until September 30, 1948 due to

administrative and technical difficulties involved in immediately establishing and operating a

Central Bank.

At the time of partition, total number of banks in Pakistan were 38 out of these the

commercial banks in Pakistan were 2, which were Habib Bank Limited and Australia Bank

of India. The total deposits in Pakistani banks stood at Rs.880 million whereas the advances

were Rs.198 million. The Governor General of Pakistan, Muhammad Ali Jinnah issued the

order for the establishment of State Bank of Pakistan on 1st of July 1948.

In 1949, National Bank of Pakistan was established. It started with six offices in former EastPakistan. There were 14 Pakistani scheduled commercial banks operating in the country on

December 1973, the name of these were:

1. National Bank of Pakistan

2. Habib Bank Limited

3. Habib Bank (Overseas) Limited

4. United Bank Limited

5. Muslim Commercial Bank Limited

6. Commerce Bank Limited

7. Australia Bank Limited

8. Standard Bank Limited

9. Bank of Bahawalpur Limited

10. Premier Bank Limited

11. Pak Bank Limited

12. Lahore Commercial Bank Limited

13. Punjab Provincial Co-operative Bank Limited


15/155

13

7

The Pakistan Banking Council prepared banks amalgamation schemes in 1974 for

amalgamation of smaller banks with the five bigger banks of the country. These five banks

are as under:




4. Muslim Commercial Bank Limited

5. Allied Bank Limited

So, through the Nationalization of Bank Act 1974, the State Bank of Pakistan, all the

commercial banks incorporated in Pakistan and carrying on business in or outside the country

were brought under the government ownership with effect from Jan. 1, 1974. The ownership,

management, and control of all banks in Pakistan stood transferred to and vested in the

Federal Government.


16/155

13

7

Commercial Banking Scenario in Pakistan

Broadly speaking we can divide the development of commercial banking into four phases:

PHASE-1 1947-1974 Establishment of commercial banking system

PHASE-2 1974-1979 Nationalization of banks

PHASE-3 1979-1991 Islamisation process

PHASE-4 1991-2000 Privatization process

FIRST PHASE (1947-74)

SET UP OF COMMERCIAL BANKING SYSTEM:

This was the first phase of development of Pakistans commercial banking system, which

consist of the circumstances under which the development of banking was started in the

country.

INITIAL POSITION OF BANKING IN PAKISTAN:

There were 19 non-Indian foreign banks in Pakistan at the time of independence with the

status of small branch network, whose policies and operations were controlled by their head

offices abroad. These banks were engaged solely in export of corps from Pakistan. There

were only two Pakistani banks, the Habib bank, which had transferred its head office from

Bombay to Karachi after the announcement of the partition plan, and Australian bank which

has been working in Pakistani territories prior to June 1947.


17/155

13

7

The Indian government withheld Pakistans share of Rs. 75 crore in cash balances held by

her at the time of independence. The foregoing developments clearly brought home the

urgency of assuming control and currency in Pakistan and brought to the fore the need to

setup a central banking institution to take the place of reserve bank of India. Therefore it was

agreed between the government of India and Pakistan to authority of Pakistan from 30 th

September 1947 to 30th June 1948.

In order to make necessary arrangements of the establishment of the central bank of Pakistan

a committee was appointed to recommend the necessary steps. Consequently the Governor

General of Pakistan and father of the nation Quaid-e-Azam Muhammad Ali Jinnah

Inaugurated the State Bank of Pakistan on 1st July 1948. After the State Bank order was

promulgated on 12th May 1948.

SECOND PHASE (1974-1979)

NATIONALIZATION OF BANKS

The banking reforms turned out to be a transitional and temporary step and hardly after 18

month the government nationalized the banking system. Thus through the Nationalization

Bank Act 1974, SBP and all commercial banks incorporated in Pakistan and carrying on

business in or outside the country were brought under the government ownership with effect

from January 1974. The ownership and management of all Pakistan banks stood transferred

and rested in the federal government. The shareholders were provided compensation in the

form of federal government bonds redeemable at par any time within a period of fifteen

years. The amount of compensation was equal to the break up value of the shares in case of

commercial banks. For the State Bank shares the amount of compensation was estimated on

the basis of average of the clearing quotations during the six working days preceding

nationalization. The chairman, director and chief executives of various banks were remove

from their offices other than those appointed by the federal government and the state bank.

The central board of banks, managing committees and similar other bodies were dissolved. A


18/155

13

7

Pakistani banking counsel was established for nationalized commercial banks to co-ordinate

their activities.

As a result of merger of banks the following five major banking companies were formed:




4. Muslim commercial Bank Limited

5. Allied Bank of Pakistan

THIRD PHASE (1979-91)

INTRODUCTION OF ISLAMIC BANKING:

In 1977 the Bhutto government was toppled. The martial law government planned to reform

the banking sector in a novel way. The overall policy was to Islamise the economy and the

banking system, being based on interest was an important target of the new policy. The most

preferred form of Islamic bank financing profit and loss sharing would require banks to

receive deposit without guaranteeing any return.

The Islamic bank has to acquire a high degree of confidence of the saver to make him deposit

his money with them. Not even the return of the principle amount if guaranteed. The Islamic

bank cannot finance the project of an investor merely on the furnishing of collateral. The

bank will have to be a partner in the project. This will require to careful security of theproject and the assessment of risk involved because profits are the function of the amount of

risk in the project. Honesty and trust form both sides of the market are more important to the

system of Islamic Banking.

FOURTH PHASE (1991-2000)

PRIVATIZATION AND DE-REGULATION:


19/155

13

7

The government headed by Prime Minister Nawaz Sharif was not fully satisfied with the

performance of nationalized. The areas, which were severely criticized, were the falling

standard of banking services and common red-tapism. There were complaints about the

services as delay in home remittances, dispatch of cheques, drafts, inefficient counter

services, bad debts of the banks etc. were on the rise. The government decided to privatize

these banks. In order to implement privatization policy a privatization commission was

established on 22nd January 1991. The commission has transferred two banks MCB and

ABL to the private sector.

Application for privatization of other banks namely UBL and HBL were also invited but the

bidding response was quite poor. The privatization of these banks is under consideration.

Legislation was enacted to permit the establishment of new banks and the government

approved 10 application from the private sector for the grant of commercial bank licenses by

SBP, out of these 9 new banks have since been incorporated. Till March 1994 there were 20

domestic scheduled banks with 9825 branches and 21 foreign banks with 66 branches in

operation in the country.

1. Bank of Commerce Al Habib Ltd.

2. Soneri Bank Ltd

3. Union Bank Ltd.

4. Indus Banks Ltd.

5. Mehran Bank Ltd.

6. Prime Commercial Bank Ltd.

7. Askari Commercial Bank Ltd.

9. Capital Bank Ltd.

10. Republic Bank


20/155

13

7


21/155

13

7

MCB BANK INTRODUCTION&HISTORICAL BACKGROUND

INTRODUCTION OF MCB BANK:

MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280 billion and

total assets of around Rs.300 billion. Incorporated in 1947, MCB soon earned the reputation

of a solid and conservative financial institution managed by expatriate executives. In 1974,

MCB was nationalized along with all other private sector banks.

The Bank has a customer base of approximately 4 million and a nationwide distribution

network of 1,026 branches, including 8 Islamic banking branches, and over 300 ATMs, in a

market with a population of 60 million.

During the last fifteen years, the Bank has concentrated on growth through improving service

quality, investment in technology and people, utilizing its extensive branch network,

developing a large and stable deposit base.

HISTORICAL BACKGROUND OF MCB BANK

Now let us discuss the historical background of Muslim Commercial Bank Limited. Before

separation of Indo Pak, the need for more Muslim banks was felt. And Muslims having

strong financial capacity were thinking to invest in this sector as well. This was the idea

which paved the way for setting up Muslim Commercial Bank Ltd known as MCB.

HISTORY:


22/155

13

7

This bank was incorporated under companies act 1913 on 9th July, 1947 (just before

partition) at Calcutta. But due to changing scenario of the region, the certificate of

incorporation was issued on 17th August, 1948 with a delay of almost 1 year; the certificate

was issued at Chitagong. The first Head office of the company was established at Dacca and

Mr. G.M. Adamjee was appointed its first chairman. It was incorporated with an authorized

capital of Rs. 15 million.

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.

Nationalization

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 1.287 and deposits

amounting to as high as Rs. 35,029 million.

Privatization

When privatization policy was announced in 1990, MCB was the first to be privatized upon

recommendations of World Bank and IMF. The reason for this choice was the better

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.


23/155

13

7

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.

Extended use of information technology which is evident from the fact that

there are 768 fully automated branches, 243 online branches (integrated networking),

300 ATMS in 27 cities nation wide and a MCB continuously innovate new product.

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 routed.

FOREIGN TRADE:

MCB Banks remittances during the year 2008-2009 were about 5.493Arab Dollars. The

bank conducted import business during the year amounting to RS. 54.0 billion as compare to

RS. 56.4 Billion In 2008. The export business slightly improves to RS. 36.9 Billion From RS.

35.1 Billion In 2008.

YEAR 2009 COMPLIANCE:

MCBs strength lies in providing a technological base at the gross root level of the society

with a challenge to educate and assimilate such systems across vast cultural and economic

backgrounds. With over 768 automated branches, 263 online branches, over 300 MCB

ATMs in 27 cities nationwide and a network of over 16 banks on the MNET ATM switch,

MCB continuously innovates new products and services that harness technology for the

customers benefits.


24/155

13

7

SOCIAL SECTOR:

The bank actively participating in the Prime Ministers 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 its over 50 years of operation. It has a network of over 1,023 branches all over

the country with business establishments in Sri Lanka and Bahrain. The branch break-up

province wise is Punjab (620), Sindh (225), NWFP (106), Baluchistan (35),Azad

J.Kashmir(14) and overseas(7) respectively.

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.

Fourteen 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

multi national concerns. MCB is also catering to the growing middle class by Providing new

asset and liability products. The Bank provides 24 hour banking convenience with the largest

ATM network in Pakistan covering 27 cities with over 300 ATM locations. The Banks

Rupee Traveller Cheques have been market leaders for the past six years and have recently

launched their Gift Cheque Scheme.


25/155

13

7


26/155

13

7

Profile of MCB Bank Ltd.

1 Name of Organization MCB Bank Ltd.

2 Chairman Mr. Mian MuhammadMansha

3 Total Branches 1057

4 Islamic Branches 8

5 Major Industry Financial

6 Staff Strength 10,488

7 Overseas Branches 7

8 Total ATMS 300

9 Sub Industry Commercial

10 Total Deposits Rs.280 billion

11 Total Assets Rs.300billion

12 Board Of Directors (BOD) 13

13 Registered Office MCB Building, F-6 / G-6,Jinnah Avenue, Islamabad.

14 Principal Office MCB Tower, I.I. Chundrigar

Road, Karachi.15

Registrar's and Share Registration Office:

MCB 15 Main Gulberg,LahoreM/s. THK Associates

(Pvt.) LimitedState LifeBuilding No.3,Dr. Ziauddin

Ahmed Road,Karachi


27/155

13

7

To be the leading financial services provider, partnering with our customers for

a more prosperous and secure future.


28/155


29/155

13

7

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.

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

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.

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.


30/155

13

7


31/155

13

7

Euro money Awards

Best Bank In Asia Award 2008

Best Bank In Pakistan Award 2006





Best Domestic Bank Award 2000

Asia Money Award

Best Domestic Commercial Bank Award 2005

Best Domestic Commercial Bank Award 2004

Euromoney Awards

Best Bank In Asia Award 2008

MCB has been awarded as a Euromoney Award 2008 for the " Best Bank in Asia".


MCB has yet again received the esteemed Euromoney Award for the Best Bank in

Pakistan. It is the only bank to receive the Euromoney Award for Excellence for the sixth

time in the past seven years.



32/155

13

7

MCB has again received the esteemed Euromoney Award for the Best bank in Pakistan. It

is the only bank to receive the Euromoney Award for Excellence for the fifth time in the last

six years.

Best Bank in Pakistan Award 2004

In a continuous winning streak, MCB once again takes pride in being conferred with

Euromoney's prestigious award of excellence, for being the "Best Bank in Pakistan" for the

fourth time in the last five years.


MCB believes in you. Together we work with quality, integrity and dedication, striving to

achieve collective success by understanding changing trends and assimilating into diverse

cultures. Your trust in our ability and our commitment to deliver has again won us the

Euromoney Award 2003 for the "Best Bank in Pakistan".


Your trust and our commitment is always an award wining combination MCB was awarded

as a Euromoney Award 2001 for the Best Bank in Pakistan".

Best Domestic Bank Award 2000

MCB was awarded as a Euromoney Award 2000 for the Best Domestic Bank in Pakistan".

Asia Money Awards

The Best Domestic Commercial Bank Award 2005

MCB Continues to shine as once again Asia Money declares MCB as "The Best Domestic

Commercial Bank in Pakistan" for the year 2005.

The Best Domestic Commercial Bank Award 2004

MCB has a distinction of winning the Asia Money 2004 award for being "The Best Domestic


33/155

13

7

Commercial Bank


34/155

13

7

Board of Directors:


35/155

13

7

Mian Mohammad Mansha Chairman

Mr. S. M. Muneer Vice Chairman

Mr. Tariq Rafi Member

Mr. Shahzad Saleem Member

Mr. Sarmad Amin Member

Dr. Muhammad Yaqub Member

Mian Raza Mansha Member

Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Abdul Farid Bin Alias Member

Mian Umer Mansha Member

Mr. Muhammad Ali Zeb Member

Mr. Atif Bajwa President / CEO

Audit Committee:

Mr. Tariq Rafi Chairman


Dato' Mohammed Hussein Member

Mr. Aftab Ahmad Khan Member

Mr. Muhammad Ali Zeb Member

Mr. Malik Abdul Waheed Member

Human Resources Committee:





36/155

13

7

Mr. Shahzad Saleemn Member

Mr. Atif Bajwa Member

Risk Management & Portfolio Review Committee:

Mr. Shahzad Saleem Chairman


Mr. Sarmad Amin Member



Committee on Physical Planning, IT System & Contingency

Arrangements:

Mr. Sarmad Amin Chairman

Mr. S. M. Muneer Member



Mr. Abdul Farid Bin Alias Member


Business Strategy & Development Committee:


Mr. S. M. Muneer Member

Mr. Shahzad Saleem Member


37/155

13

7



Dato' Mohammad Hussein Member



Chief Financial Officer:

Mr.Salman Zafar Siddiqi

Principal Office:MCB 15 Main Gulberg, Lahore

Registrar's and Share Registration Office:MCB 15 Main Gulberg, Lahore

M/s. THK Associates (Pvt.) Limited

State Life Building No.3,

Dr. Ziauddin Ahmed Road,

Karachi


38/155

13

7

.

Recently the organizational structure is redesigned as follows:

Chairman

Mian Muhammad Mansha


39/155

13

7

MANAGEMENT HERIARCHY

Commercial Banking

Group Head

Shoaib Qureshi

Shoaib Qureshi

Consumer Banking

Group Head

Haroon Bashir

Haroon Bashir

Corporate Banking

Group Head

Hussein Iftikhar

Hussein Iftikhar

Vice Chairman

Mr. S. M. Muneer

President

Mr. Atif Bajwa

President


40/155

13

7

Vice president

Executive vice president

SENIOR VICE PRESIDENT

Assistant vice president

Assistants

Vice president

Officers grade 1,2,3

Peon

Cashier


41/155

13

7


42/155

13

7

A Vision of the Future

The modern, urbane architecture and intelligent design of MCB Tower reflect MCBs

pioneering role in the banking arena, providing cutting edge, innovative banking solution-

leading with an edge of technology.

Setting Ever-Higher Standards

Towering at 116 meters, with 29 levels and 3 basements, MCB tower is the tallest building in

Pakistan. It is a sound representation of MCBs leadership position in the banking sector,

testified by four best bank in Pakistan Euro money Awards in five years .

Strong Foundation

MCB tower is a manifestation of MCBs strong foundation with over 50 years of banking

excellence and represents our commitment to always stay a step ahead

Understanding At all levels

From individual customers to corporate and commercial clients, MCBs flexible solutions

reach out to a diversified audience -reflected in all levels of MCB tower

Highlights of the Tower

Specialized secant piling works to protect adjacent buildings during construction of

the 3 basement levels & foundation.


43/155

13

7

One of the most integrated safety and security features with 24 x 7 surveillance

system including smart card access to prevent unauthorized entry at any level.

From furniture design to signages, MCB tower has been designed with exquisite

attention to detail.

The bank produces its own power by 1.2 MW gas turbine backed-up by two separate

diesel generating sets. The heat recovery system insured that the heat produced thus

is used to operate the chillers for the central air conditioning system thereby

achieving an unprecedented level of power / energy consumption.

State of the art Fire / Smoke detection Alarm and sprinklised suppression system

backed-up by a central fire fighting system. Rooftop garden and gymnasium with

unparalleled views of the city skyline

6 high speed Elevators with a unique call system which identifies, allocates and

assigns each passenger to a particular elevator to optimize their wait and travel time.

Double insulated glazing to reduce heat loss by upto 30 % and reduce noise level

significantly. The glass used is specially tempered to increase strength 5 times,

eliminating the risk of damage.

Construction of the heli pad for helicopter access and egress in case of fire.


44/155

13

7

The Largest network of over 315 on-line branches in the country and growing. Providing

customers with 24x7 real time on-line transaction facilities.


45/155

13

7

The best protection for your valuables. Lockers of different capacities are available

nationwide.

International remittances with a two-way messaging facility delivered at your doorstep

within 24 to 72 hours.

MCB Islamic banking provides Riba free and Shariah Compliant solutions to various

customer segments in a growing number of cities. With the help of Sharia specialists,

lawyers, & professional commercial bankers, we have the best compliant products like

Musharika, Murabaha, Ijara and Istasana.

A local Point of Sale acquiring network facilitating acceptance of all major card brands.
http://www.mcb.com.pk/OnlineServices/atm_usage.htmhttp://www.mcb.com.pk/OnlineServices/atm_usage.htmhttp://www.mcb.com.pk/OnlineServices/debit_about.htmhttp://www.mcb.com.pk/islamic.htm


46/155

13

7

Cash withdrawal facility at over 900,000 ATMs worldwide.

Convenience of shopping at over 5 million POS locations globally.

MCB, provides the convenience of banking on internet. You can access your account

anytime, anywhere & enjoy 24-hour access to all your accounts at MCB.

Call now for answer to your queries about banking, ATM, mobile banking, RTC, tele-

banking services and MCB product information.

The nation's largest network of over 210 ATMs and growing. Get 24 hour convenience of

cash withdrawal, mini statement, bill payment and funds transfer services.

Banking at your fingertips. Dial in anytime to get information regarding balance and mini

statements.
http://www.mcb.com.pk/mnet_switch.htmhttp://www.mcb.com.pk/OnlineServices/mobile_about.htmhttp://www.mcb.com.pk/Locators/atm.asphttp://www.mcb.com.pk/OnlineServices/callcentre_about.htmhttp://www.mcb.com.pk/virtual.htm


47/155

13

7

MCB Network for Electronic Transactions is an electronic hub for ATM sharing plus other

touch points. The nation's largest operating switch with the highest transaction volume.

A secure instrument of payment, offering CASH FREE convenience. It is the most powerful

Debit and ATM Card providing 24 hour direct access to your bank account.

Providing access to diversified financing options including working capital loans, term loans,trade finance services and investment banking.

Get a loan in an instant at any MCB branch. Offering same day financing facility against

liquid collateral at competitive pricing.

MCB Pyara Ghar is an ideal home financing facility with options of home purchase,

construction and renovation. Financing available upto 20 years for amount up to Rs. 20

million.
http://www.mcb.com.pk/OnlineServices/smart_about.htmhttp://www.mcb.com.pk/Personal/deposit_365.htmhttp://www.mcb.com.pk/Personal/loans_pyaraghar.htmhttp://www.mcb.com.pk/corporate.htmhttp://www.mcb.com.pk/corporate.htmhttp://www.mcb.com.pk/OnlineServices/smart_about.htm


48/155

13

7

A deposit account for customers with substantial balance offering profit on a daily product

basis with the facility of unlimited withdrawals.

The most widely accepted way to pay cash for travel related purposes. A safe and secure way

to make payments nationwide.

Car financing and leasing at competitive rates with flexible options. Car4u finances both

semi-commercial and non-commercial vehicles for personal and business use.

Personal loans for salaried individuals of reputed local and foreign companies at rates

tailored to customer's repayment capacity.

Cash management services for corporate customers. Helps customers substantially reduce

their receivable collection time frame; improve cash flow and business management.
http://www.mcb.com.pk/corporate.htmhttp://www.mcb.com.pk/Personal/loans_personal.htmhttp://www.mcb.com.pk/Personal/Loans_car4u.htmhttp://www.mcb.com.pk/Personal/RTC.htm


49/155

13

7

MCB Full Day Banking

Enjoy the convenience of extended banking hours from 9am to 5am, including Saturdays atMCB FULL Day Banking branches across the country.

Bill Payments

MCB easy bill pay offers unmatched convenience to pay your utility and mobile phone bills

or re-charge your prepaid mobile phone accounts anywhere, anytime with security and peace

of mind. MCB is the only bank that offers you 3 convenient options of making bill payments

to PTCL, SSGC, Instaphone, Mobilink, Paktel and Ufone. So, save your precious time by

avoiding long queues and pay your bills through MCB Easy Bill Pay. MCB Smart Card or

MCB ATM Card Holder can easily pay their bills or re-charge their prepaid mobile phone

account through the following convenient options of MCB easy bill pay.


50/155

13

7


51/155

13

7


52/155

13

7

INTRODUCTION TO THEINTRODUCTION TO THE

BRANCHBRANCH

MCB Main Branch Sheikhupura is located at a Lahore Sargodha Road, Sheikhupura. Many

people from these areas have accounts in MCB Main Branch Sheikhupura . There are almost

7 more banks at the same location. Competition is fierce and every bank is trying to compete

with best of its services, and MCB doing the same to have an edge on other banks to remain

customer focused.

Branch Code of MCB Main Branch Sheikhupura is 0204.MCB Main Branch Sheikhupura

has Rs.340 million deposits, Rs.70 million advances, 10000 numbers of accounts and up

to Rs.2 millionremittances. MCB Bank is focusing and targeting the middle class, which is

the largest of the population of Pakistan. For that purpose MCB Bank has developed a strong

chain of branches.

This branch has a total of20 employees from manager to the security guard. It has 1 ATM to

provide 24-hour cash withdrawal facility.


53/155

13

7

Organization Structure

MCB Main branch Sheikhupura

Branch Name Sheikhupura Main (0204)

Region Name Sheikhupura (5142)

Circle Name Faisalabad

Expanse Code 204

BRANCH MANAGER

MR.ASGHAR ALI BHUTTA

ICO (Internal Control Officer)

Mr.Jahanzaib Ehsan

CREDIT OFFICER

Mudassar Hassan

FOREX OFFICER

Mudassar Hassan

OPERATION MANAGER

Mr. Wajid Khan

General Banking

Officers

Cash Manager

Muhammad Imran

Clearing Incharge

Mr.Fiaz Hussain Shah

Remittance Incharge

Mr.Kashif Usman

ICO (internal Control Officer) is basically an independent authority to report directly to regional head on the

progress or overall situation of the branch.

Cashier

1. Mujahid Nazir

2. Farkhanda Munir

Outsourced Staff

1. Farah Yasmeen, CSO

2. Habibullah, Tea Boy


54/155

13

7

For proper functioning of branches and the over all 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. Cash Department

2. Account Opening Department

3. Clearing Department

4. Remittance department

5. Advances & Credit Department

6. Foreign Exchange Department


55/155

13

7

CASH DEPARTMENT


56/155

13

7

This department of the bank deals in operation relating to cash accounts as name implies this

is a preliminary deal with the cash, which involves payment of cheques presented by the

customer and receipt of the cash deposited by the customer in their accounts. This

department is responsible for the cash balance at the end of the day.

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.

The procedure involved in payment and receipt of cash is given below.

Cash payments

Payment of cash to customer involves the following procedure

1. The cheque is presented to the cashier first, who takes care of following precautions

a) It should not be out dated.

b) There should not be any crossing on it, if so the signature should be with cutting.

c) Two signature of the customer receiving the cheque should be in the back of the

cheque.

d) There should not be any difference between the amount and figures

e) It should not be crossed.

1. The cheque is entered in the computer by the cashier and customer account is debited.

2. If the amount of the cheque exceed the customer balance in that account a note

regarding this will automatically appeared on the computer screen. Such entries are

immediately scratched.

3. Finally the cheque goes to the officer, who first, checks the signatures, whatever it is

according to the specimen signature card, he will also check the conditions mentioned

in no.1. If he has any doubt he will reject the transaction. Otherwise he authenticatedthe transaction and sign on the cheque.


57/155

13

7

4. The cheque is finally returned to the cashier for payment.

5. If the cheque is dishonored due to any reason Rs.200 is deducted from the account of

the customer as a penalty for that return.

6. At the start of next day all the cheques, which are honored by the bank on previous

day, are sent to account department for permanent record.

Receipt of Cash

Receipt of cash involves the following procedures.

1. All the cash is deposited on a specific deposit slip. The depositor has to mention

specific deposit account number, name of the account holder and the amount which

he wishes to deposit in his account on this slip.

2. This slip is presented to the cashier along with the currency note, he count the notes

and stamp the slip with cash received if he is satisfied, then he enters the slip in the

computer by crediting the account.

3. Finally the transaction regarding deposit of cash is authenticated by the responsible

officer and put his signature on the slip. Now the transaction is permanently stored in

the computer.4. At the start of next day all deposit slip of the previous day is sent to accounts

department for permanent record.

The following books are maintained in the Cash Department:

1. Receiving Cash Book

2. Paying Cash Book

3. Cash Balance Book.

Cash Received Register


58/155

13

7

In this book the cashier records all the amount of money which he receives from the

customers during the day. The customers name, account no. , cheques no and amount are

written in the register. All the cash which is received it is manually entered in a cash receipt

register at the end of day.

All the receipts are sent to officer for the posting in the computer the officer post the amount

and verified it by another officer. At the end of the day it must also be tallied by the

computers received payment.

This sum is added in the opening balance of the cash and hence closing balance is calculated.

Cash Paid RegisterThis is a book in which all the payments during the day are recorded. After receiving the

cheques from the customer the officer verifies the signature and posts it in the computer then

the cashier makes the payment and enters the amount in the register. At the end of the day the

total payment must be tallied with the computers amount.

When all the cheques are paid then all entries regarding payment of cash is entered if the cash

paid register by the cashier & total payment during the day is computed. This sum is then

subtracted from the opening balance of the cash. The responsible officer then verifies all

these entries.

Physical Checking of Closing Balance

Opening Balance + Receipts - Payments = closing Balance.

Is physical checking by cashier after closing hours. There should not be any difference

between the two balances, if any he is not allowed to leave counter unless the reason for

difference is traced out.

Cash Required In Emergency

A certain amount of cash is kept in bank lockers for meeting daily requirement but if any

further cash is required in emergency due to some heavy payment, such cash is called from

other branches or from MCB. Such cash reached within one or two hours.


59/155

13

7

ACCOUNT OPENING DEPARTMENT


60/155

13

7

Account Opening

The general banking performs various functions among them the first and most important

function is A/C opening. The process of opening an account is very simple and any body

who would like to open his account could do it easily without any difficulty.

Nature of Accounts

Khushali Bachat Account

Basic Banking Account

Current Account

Saving Account

Foreign Currency Account

Smart Dollar Account

Savings 365 Gold

Special Rupee Term

Business Account

Saving Xtra Account

Current Life Account

Khushali Bachat Account


61/155

13

7

This is an advance form of PLS saving a/c, in this type of account. The minimum balance

requirement for this type is Rs. 2500/-. There is also restriction on the number of withdrawals

as well, i.e. up to 4 times in a calendar month. For maintaining this extra balance the

customer gets the benefits of profit calculation on daily product basis and also free service of

standing instructions of paying utility bills and HBFC installments. All other rules of saving

account are applicable

Basic Banking Account

MCB Bank has launched the Basic Banking Account from February 27, 2006. Target market

for this account is students and people with low income group. Customer who are operating

current and saving accounts have the facility to convert their accounts to BBA Account.

Key points:

Open a Basic Account with as little as Rs.1000/- only.

No minimum balance maintenance requirement.

No monthly account maintenance charges.

Two free deposits per month (including cash and clearing).

Two free withdrawals per month (including cash and clearing).

Unlimited free withdrawal transactions through MCB's ATMs.

Use your MCB Smartcard to shop at thousands of merchants across Pakistan

Current Account

Current account is the convenient way to manage money. Customers can transact through

MCB Current Account any time. MCB Current Account is most suitable for the businessmen

and organizations that do monetary transaction on daily basis. Bank does not pay any interest

on current accounts.

Key Points:

Open a Basic Account with as little as Rs.1000/- only

There is requirement of minimum balance maintenance of Rs. 1000/-.

Unlimited cash deposit and withdrawal facility at hundreds of branches nationwide


62/155

13

7

Use your MCB Smartcards to shop at thousands of merchants across Pakistan.

Lockers and other affordable transactional facilities.

Usually this type of account is opened by the businessmen.

No profit is paid by the bank and no service charges are deducted by the bank on

current deposits account.

These types of deposits are also exempt from compulsory deduction of Zakat.

Saving Account

This type of account is for those persons who want to make small savings'. This type of

account is opened with a minimum deposit of Rs. 1000/-. Under this scheme deposits can be

made only up to a-costing amount and withdrawals are allowed twice a week or 8 times a

month. If a big amount is required a seven days notice is required before the withdrawal. The

profit is paid on these accounts on the minimum balance during a month for the whole of that

month. Zakat & other withholding taxes are deducted as per rules of the government.

Key Points:

Customer has to maintain a deposit of Rs. 10000 in his account otherwise low balance

charges of Rs. 50 will be deducted from the customers account on monthly basis.

Profit paid into your account every six months.

Unlimited cash deposit and withdrawal facility at hundreds of branches nationwide.

Use your MCB Smartcards to shop at thousands of merchants across Pakistan.

Locker facility at economical rates.

Foreign Currency Account

Enjoy the confidence of operating an international account, locally.

MCB Foreign Currency Account offers you the option of earning attractive returns on

your Foreign Currency Investment.

Key Points:

Open your account in US Dollar, UK Pound Sterling, or Euro.

Open for as little as US$ 500 or equivalent.


63/155

13

7

Unlimited transactions at your branch.

Free Foreign Currency cash deposit and withdrawal facility.

Rate of Return directly linked with international market.

Profit paid into your account every six months.

Foreign Remittances facility available.

Countrywide network of Foreign Currency Branches.

Cash withdrawal in PKR equivalent.

Smart Dollar Account

Discover a sensible solution that helps make more of your dollar savings.

MCB Smart Dollar Account is a sensible way to maintain or grow your US Dollar

deposit across USD Current, Savings or Term Deposits.

Key points:

USD Current, Savings and Term Deposit accounts.

Competitive profit rates.

Attractive incentives being offered, if you maintain the minimum amount of USD

10,000/- or above.

Savings 365 Gold

The higher you save, the higher you go.

MCB Savings 365 Gold Account offers you a wide range of attractive profit rates.

Key Points:

The higher your balance, the higher your rate.

Profit calculated on daily basis.

Profit paid into your account every month.

Open your account with Rs. 500,000/- only.

Cash deposit and withdrawal facility at hundreds of branches nationwide.


64/155

13

7

Special Rupee Term

Make the most of your time with lucrative term deposits.

With a wide range of choices and tenors, you can open one or more term deposit

accounts that best suit your current or long term needs.

Key Points:

Highly attractive profit rates.

Multiple tenors from one month onwards.

Option of premature encashment.

Option for ATM debit card to access profit earned.

Option for automatic renewal of term deposits.

Business Account

An upwardly mobile way to bring down costs on your way up.

MCB Business Account lets you build your business through the accrued savings

from discounted transaction fees, and more.

Key Points:

Higher the balance, the higher the number of free transactions.*

Open a Business Account with Rs.50,000 only.

Unlimited free cash deposit and withdrawal facility at hundreds of branches

nationwide.

FREE SERVICES

When you maintain average monthly balance of Rs.100,000 or above

Demand Drafts/Pay Orders.

Cancellation for Demand Drafts/Pay Orders.

Cheque Book.

International ATM Gold Card


65/155

13

7

Saving Xtra Account

Grow with MCB Xtra by saving more and earning greater profit.

MCB Savings Xtra Account offers you a wide range of attractive profit rates.

Key Points:

The higher your balance, the higher your profit.

Now avail attractive rates up to 8.5%.

Profit calculated on monthly basis.

Profit paid into your account semi-annually.

No joining fee on Debit/ ATM Card.

50% Discount on Lockers.

Cash deposit and withdrawal facility at hundreds of branches nationwide.

Unlimited number of ATM withdrawal transactions.

3 Free withdrawal transactions through the branch every month.

Current Life Account (New)

The coverage you need for the life you lead.

MCB Current Life gives you the peace of mind of comprehensive life insurance in a

current account and fits right into your lifestyle.

Key Points:

Open a Current Life Account with just Rs.1000.

Free comprehensive life insurance coverage.

No joining fees on Debit/ATM Card.

50% discount of Debit Card Annual Fee at the time of renewal.

Low monthly average balance requirement.

Unlimited free cash deposits/withdrawals across hundreds of branches


66/155

13

7

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. 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.

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 customers integrity, respectability, occupation and the nature of

business by the introductory references given at the time of account opening. Negligence in

this informal preliminary investigation may result in serious consequences not only for the

banker concerned directly but also for other bankers and the general public who may be

affected indirectly.

Preliminary investigation is necessary because of the following reasons

Avoid Frauds:

In this regard I learned that if a banker does not make the necessary inquiries mentioned

above he may enable dishonest persons to possess cheque books for fraudulent purposes. If

any such person happens to be an undercharged bankrupt, the banker might be placed in an

awkward position for having allowed such a person to open and open a bank account.

Safeguard against unintended overdrafts:

Sometimes due to a mistake an account may be given an overdraft, For instance, the ledger

keeper, misreading the balance of an account honours a cheque for an amount larger than the

balance. Similarly a credit entry belonging to a customer may be made by mistake in another

customers account. In such situations the excess amount withdrawn by the customer can

only be realized if the customer is a respectable person.


67/155

13

7

Inquiries about clients:

Being a banker, I think MCB has a business obligation to respond to inquiries from other

banks etc. about his customers financial position. Though the banker gives only a general

ideal about the financial standing of his customer, it should nevertheless have the necessary

information available with him.

Procedure for Account Opening:

According to my practice in MCB, when a customer wants to open an account, the CSO

(Customer services officer) fills an Account opening form. All information, which is

necessary to be known by the bank, are requirements of the Account opening form.

Account opening form

Account Opening Form is SF1AA1R(See annexure).The name, occupation, father name, date

of birth, marital status, CNIC NO, telephone/mobile number, initial deposit, nature of

account, type of account is also mention and complete address of the person opening the

account are written in the columns that are provided in the form. Signatures are obtained

from the customer where it is required. These signatures should be usual signatures and he

would operate the account with them.

In account opening form following accounts are mentioned in this form. What is a procedure

for opening that type of accounts and what type of documents are attached in application

form.

Types of Account

1. Individual Account:

A. Single Account:

When a single man or woman opens an account in his or her own name and has the right to

operate, it is called individual A/C.


68/155

13

7

Title of Account:-

Title of Account should mention the name of the person who operates the account.

Special Instructions:-

At the time of opening the account, clear and specific instructions should be obtained

regarding the nominee of the account holder means after the death of the account holder who

will operate the account.

Documents:

Computerized national Identity Card.

Proof of Income if he / she is a salaried person then the pay slip or

salary certificate of that person.

B. Joint Account

These are the account of two or more persons who are neither partners nor trustees

Account Opening Procedure

Title of Account

Title of account holder should mention the names of all the joint account holders.

Special Instruction

At the time of opening the account clear and specific instructions should be obtained

regarding operation of the account and payment of the balance at the death of one or more

joint account holders in the following manner:-

The account shall be operated by any joint account holders singly.

By either or survivor singly

By any two or more joint account holders or by any two or more

survivors jointly.


69/155

13

7

By all the joint account holders jointly

By all the survivors jointly.

These instructions as far as possible should be obtained in handwriting of the partiesconcerned, under the signature of all the joint account holders.

Documents

Computerized national Identity Card of all the joint account holders.

Mode of Signature

All joint account holders are required to sign as applicant and in the

column of special instructions.

Specimen Signature of only those joint account holders are required

who are authorized to operate the account.

2. Business Account

A. Sole Proprietorship Account

When the owner of the firm operating singly, open an account in his firm name.


Title of Account

Title of account must be in the name of the proprietorship concern.

Special Instructions

In case of proprietorship concern, the special instruction should cover the style of the account

and the name of the person who will operate the account as sole proprietor. For example, if

the account to open is in the name of Islamabad Cloth Store, the person who is the sole

proprietor should declare as such.


70/155

13

7

Documents

Computerized National Identity Card (CNIC) of proprietor.

Declaration for proprietorship concern.

Proprietorship Stamp

Letter of request to open the account on the letterhead of

proprietorship.

Third party Mandate, in case any other person has been authorized by

the proprietor to operate the account.

National Tax Number (NTN) but it is optional.

B.Partnership Account:

Partnership is a relationship between persons who have agreed to share profits of a

business carried on by all or any of them acting for all.

Account Opening Procedure:

Title of Account:

Title of account must be in the name of the firm as declared by the partners.

Operational Instructions:

Operations on the account must be allowed strictly in accordance

with the instructions given in partnership mandate and Declaration

(Part III) in terms of section 25 of Partnership Act 1932.

According to Partnership deed, if given.

Documents:

Copy of Computerized National Identity Card of all the partners.

Copy of registration Certificate (if a registered firm)

Letter of request to open the account on the letterhead of partnership. Partnership Stamp


71/155

13

7

Partnership Deed

Third Party Mandate, if third party is authorized to operate the account.

NTN (optional)

C.Joint Stock Company:

Section 2 of the Companies Act, 1913, defines companies as

An association of individuals for the purpose of profit, possessing a common capital

contributed by the members constituting it, such capital being commonly divided into shares

of which each possess one or more and which are transferable by the owners.


Title of Account

Title of account should be exactly in the same name and style as mentioned on the

memorandum and article of association.


All the special instructions should be given to the bank in the form of Resolution of Board of

Director.

Documents

Computerized National Identity Card (CNIC) the entire Director

attested by company CEO.

Resolution of Board of Director passed under Companys seal to open

account.

Memorandum and Article of Association

Certificate of Incorporation Form 29 (B) (Lasted Copy). Company

secretary will certify all these copies.

List of Directors and authorized signatories.


72/155

13

7

Certificate of Commencement of Business (for Public limited

companys only).

D.Trust Account

According to section 3 of Trust Act, 1882

A trust is an obligation annexed to the ownership of property and arising out of a confidence

proposed in and accepted by him for the benefit of another, or of another or owner.


Branches are allowed to open the Trust Account subject to the prior approval of Area

Manager, after scrutiny of the legal documents by the legal advisor.

Title of Account

The account should be opened in the name of the trust. However, if the account is opened in

the name of the trustees, the account should not be treated as a joint account, rather it should

be treated as a trust account.


The Banker should examine the trust deed very carefully. Particular attention should be paid

to the borrowing powers, status of account in case of death of any trustee or signatory, and

provisions for the appointment of new trustees.

Documents

Attested photocopy of Computerized National Identity Cards (CNIC)

of all the trustees.

Attested copy of Certificate of Registration.

Certified copy of Instrument of Trust / Trust Deed


73/155

13

7

Mode of Signature

All the trustee are required to sign the account opening form, Specimen Signature Card, and

Cheque book requisition slip in their official capacity.

E.Clubs, Societies and Associations Account:

These are non- trading / non- profit organization and are formed for the promotion of culture,

education, recreational activities and charitable purpose etc.


Title of Account

Account must be opened in the name of organization in the following manner:-

e.g. Islamabad Cricket Association

Operational Instructions:-

All the parties must be in accordance with the clauses of the

resolution.

In case of death of office bearer, account should be blocked until new

resolution is received.

Documents

Copy of bye- laws / regulations.

List of members of managing / executive Committee.

Copy of certificate of Registration (if registered)

Copies of CNICs of the members of Executive Committee.

List of names of officials authorized to sign on behalf of the

organization along with the Specimen Signature under the signature of

the Secretary of the club/society.


74/155

13

7

F.Minor Account:


The natural guardian who signs both Account Opening Form and Specimen Signature Card

can open account in the name of minor.

Title of Account

The title of account should clearly indicate both the names of minor as well as guardian in

the following manner:-

e.g. Imran Rafique (minor) Muhammad Rafique (Guardian)


The guardian will continue to operate the account even if minor attains the age of majority.

Documents

Computerized National Identity Card of Guardian

Form B of minor

In case guardian is appointed by the court of law then attested copy of

guardianship certificate be obtained and placed on record.

G.Illiterate Person Account

Before opening such account the illiterate person should be informed that he / she cannot

issue Cheques in favor of any other person.


Title of Account


75/155

13

7

Name of account holder should be written in block form.


Personal Withdrawal

Documents

Copy of Computerized National Identity Card

Two attested photographs to be obtained for pasting on AOF and otheron Specimen Signature Card.

Thumb Impressions

Male -------- Left Hand Thumb Impression

Female ------- Right Hand Thumb Impression

2. Specimen Signature Card

Specimen Signature Card is SF-6A2 (See annexure).This card contains two signatures of an

applicant, applicant account number, account type, branch name, branch code, title of

account, it will be attached with an account opening form. Banker uses this card at the time

when he receives the cheque, he compares customers signature with the signature on the

cheque for avoiding fraud. Manager has every right not to accept this contract if he is not

satisfied by the details provided by the customer.

3. ChequeBook Requisition

Cheque Book Requisition slip is MF-80R (See annexure). Chequebook requisition slip

contains applicant account number, account type, branch name, branch code, title of account,

Signature of account holder where it is necessary. It will be attached with an account opening

form.

4. Know Your Customer (KYC) Form


76/155

13

7

In view of recent heightened global efforts to prevent the possible use of the banking sector

for money laundering, terrorist financing, transfer of illegal/ill-gotten monies, and as conduit

for white collar crime etc., the importance of Know Your Customer (KYC)/customer due

diligence has increased. In line with the international best practices, as also to ensure

transparency/prudence in banking transactions while starting relationship with existing

customers, the following minimum guidelines are required to be followed by banks.

However, banks are free to obtain any further information/documents from customers / other

banks / as they deem fit, provided the same are reasonable and applied across the board. Risk

factors(HIGH RISK,NORMAL RISK) are also mention in KYC Form It will be attached

with an account opening form.

5. VeriSys

Conformation from NADRA through VeriSys system by the bank. The date mentions in

VeriSys are same as Account opening form. It will be attached with an account opening

form.

6. Letter of Thanks

Bank prepares letter of thanks for the appreciation of the account holder because bank gives a

chance for providing better services to the customer. This act promotes good will among the

customer. It will be attached with an account opening

Account Number

When all the formalities are completed then the final approval of account has to be taken

from the Branch Manager. After obtaining approval of the branch manager an account

number is allotted to the customer all the information is entered into the computer. Then that

account number is written on the Cheque Book, Specimen Signature cards and account

opening form.

Send the form to Head Office

After fulfill all the requirement and verify the form from operation manager the account

opening form send to Head Office Karachi and make request to issue the printed cheque

book.


77/155

13

7

Issuance of a Cheque book

After opening an A/C with the bank, the A/C holder receive a letter of thanks from Head

Office Karachi then after receiving this letter client come to bank and makes a request in thename of bank for the issuance of a Cheque book. The A/C holder mentions title of A/C, A/C

number, signs it properly. Normally MCB issues a Cheque book having 25 leaves for Saving

Account and 50 leaves Cheque Book to Current Account Holder. Every Cheque book also

contains one leaf that is used for another issue of a Cheque book.

Entry of a Cheque book

Before issuance of a Cheque book, the employee performs certain functions. They include:

Stamping requisition slip that is in Cheque book.

Enters it in the Cheque book issue register.

Check whether or not a senior officer has verified the signatures, if not

then first gets them verified.

After entry in the manual register, the employee issues the Cheque book to the A/C holder

with his/her signature on the register.

Grounds for Closing the Customers Account

The banker may close the account of the customer due to following reasons:

I. Notice by Customer

The banker closed the account of the customer in the application the customer for closing his

account.

II. Death of Customer

On death of his customer, the bank must stop payment of cheques drawn on him by the

deceased customer because the death revokes his authority to pay such cheques. The heirs of

the executors of the decreased customer are not authorized to operate on the account; it can

act only in accordance with the provisions mentioned in the letter of probate issued by a

competent court


78/155

13

7

III. Customers Insanity

If the customer becomes mentally ill, this terminates the bankers customer relationship

comes to its end, in such as situation, it is usually considered that the bankers authority to

pay his customers cheques is revoked by notice of insanity. However, the bankers treat their

customers as it unless a fairly conclusive evidence of the customers insanity is available to

them.

IV. Order of Court

A court of law may serve a banker with an order in garnishee proceeding in execution

of a decree prohibiting him from honoring a customers cheques

V. Customer Insolvency

Insolvency is civil death, therefore, the insolvent adjusting loss his rights receiver of

liquidates. As soon as the receives the notice of insolvency of his adjusting, or petition filed

for adjusting a filed customer insolvency, his authority to pay cheques or to accept of honor

bills to take any other action on behalf of his insolvent customer comes to end.


79/155

13

7


80/155


81/155

13

7

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.

Procedure of Clearing Department

CASE-1

If the customer come with a Transfer cheque then a token is given on Transfer

cheques when presented to bank for payment. In this case payment is made at the spot

to the cheque holder. (Detail will be on Cash Department)

CASE-2

If the customer come with a Transfer delivery cheque then First of all cheques are

noted in Transfer Delivery Ledger with the date in advance because it takes one day

to reach cheque issuing branch in the same city. In transfer delivery Ledger Name of

account holder, Number & amount of Cheque are written and two copies, one original

and one carbon copy of voucher SF-73 B are prepared. Original copy of voucher

along with cheque is send to issuing branch while carbon copy and Pay-In-Slip is

with the bank. The cheque with voucher goes to Main branch then to issuing branch

and then reverse from issuing branch to main branch and then to our branch.

CASE-3

If the customers come with a Clearing cheque then such cheques are collected as

clearing cheques and are noted in Clearing Ledger. Two copies of voucher SF-37 are

prepared. Original voucher with the cheques are send to Main branch which then send

to NIFT (National Institutional Facilitation Technologies) in advance date. The

payment is not given at hand but it is transferred to account of account holder. In case

if cheque is returned due to number of reasons then the objection is finished and again

send to main branch but this time a credit voucher along with original cheque is send

to main branch instead of any Pay-In-Slip.

CASE-4


82/155

13

7

When customer comes with a cheque which is from another city then it is grouped as C.C.

then SF-37 form is used in Cheque collection, Original voucher with cheque is send to main

branch in that city. Carbon copy with Pay-In-Slip is taken by bank for record purposes.

Types of Clearing

1. Inward clearing

2. Outward clearing

Inward Clearing

Cheques signed by MCB main branch Sheikhupuras customers are given by them to other

parties and they deposit those cheques in their account.

When bank receive those cheques in clearing, it debit customers account and credit the

clearing control account. If the bank returns them there is no entry in system but in cheque

returned system.

Outward Clearing

Customers of MCB main branch Sheikhupuras receives cheque from other parties which

belongs to a different bank within the city, and they want to deposit those cheques in their

account.

MCBs customer deposit their cheques with deposit slip signed and proper scrutiny, the bank

provide them a receipt after affixing stamp. At the end they make a summary and bundle

cover the todays clearing sent and handover those cheques to the NIFT rep and detach

deposit slips. Then the bank post the credit entries for customer with 3 float days and clearing

control account is automatically debited.

Clearing Control Account


83/155

13

7

Clearing control account is the account that enables funds transfer from SBP to Head office

to our branch.

Special Collection

National Institutional Facilitation Technologies (NIFT) is the clearing house, regulated by

SBP for Lahore and other big cities in Pakistan. Elsewhere SBP and NBP serve the purpose.

Even before NIFT, it was SBP who served as clearing house.

NIFT has given the facility of clearing to banks, and cheques are cleared within 3 working

days. There is another option to get cheques cleared within one working day (24-Hrs/Same

day Clearing) and even NIFT provide the 3-Hours clearing. This Option is available only to

branches in Mall Road Area i.e. Egerton road Branch or Head Office Neela Gumbad Lahore

branch, etc.

Pay-In-Slip

Here it is very necessary to have knowledge about Pay-In-Slip.

Purpose

It is used for two purposes

Whenever we want to deposit cash in our account then pay-in-slip is used by writing

amount on it and depositing it to cashier along with money.

Whenever we have cheque from any party to be collected in our account we fill pay-

in-slip. One part is attached with cheque and another is given to cheque holder as a

receipt.

Cheque Returns

Customers sending their cheques through clearing are subject to availability of funds, and

their perfection in every regard. Every bank has the right to reject cheque for payment in

clearing for some common points enlisted in cheque return memo SF-16 .Other banks reject

cheques on similar grounds.

Whenever a cheque is returned it is to be attached to a memo which states the reason ofrejection.


84/155

13

7

Stop Payment of Cheques

Only an Account holder can apply in written to stop payment for a lost cheque. The

concerned officer verifies his identity, fill application on

SF- 16 and gets customers signature. Then on verification by branch manager, he marks

caution as stop payment of the cheque in the system.


85/155

13

7

REMITTANCE DEPARTMENT

Transfer of money or equivalent to money from one branch to another branch of the same

bank is called remittance. Now it is become easier and safer method both for the client and

banker to transfer their money from one branch to another withi