Internship Project Final Print

8/8/2019 Internship Project Final Print

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Brief Intro about MCB

MCB is one of the leading banks of Pakistan with a deposit base of about Rs. 280billion 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 expatriateexecutives. In 1974, MCB was nationalized along with all other private sector banks.This led to deterioration in the quality of the Banks loan portfolio and service quality.Eventually, MCB was privatized in 1991. During the last fifteen years, the Bank hasconcentrated on growth through improving service quality, investment in technology andpeople, utilizing its extensive branch network, developing a large and stable deposit baseand managing its non-performing loans via improved risk management processes.

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Vision and Mission Statement

Vision Statement

To be the leading financial services provider, partnering with our customers for a moreprosperous and secure future

Mission Statement

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

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Key Values of MCB Bank

These are the standards and principles which determine our behavior and how we interactwith our customers and each other:

IntegrityWe are the trustees of public funds and serve our community with integrity. We believein being the best at always doing the right thing. We deliver on our responsibilities andcommitments to our customers as well as our colleagues

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

ExcellenceWe take personal responsibility for our role as leaders in the pursuit of excellence. Weare a performance driven, result oriented organization where merit is the only criterion

for reward

Customer CentricityOur customers are at the heart of everything we do. We thrive on the challenge ofunderstanding their needs and aspirations, both realized and unrealized. We make everyeffort to exceed customer expectations through superior services and solutions

InnovationWe encourage and reward people who challenge the status quo and think beyond theboundaries of the conventional. Our teams work together for the smooth and efficientimplementation of ideas and initiatives

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Profile of the Industry

Pakistan Banks Association (PBA) represents the Pakistan Banking Industry.It established in 1953, its main objective is to

Coordinate the efforts of the banking industry

To share a common vision of progress and development with its members.

PBA membership is only available only to the Banks operating in Pakistan. It has 43members and is categorized into 5 groups primarily carrying their own classesrespectively. However, this membership has been changed in its limit considerably due to

recent mergers and acquisition happened in the banking industry.

Government Owned Banks.

Privatized Banks.

Development Financial Institutions.

Private Banks.

Foreign Banks.

The governing body of PBA is an Executive Committee (EC) comprising of 14 members,represented by the Chief Executive of the respective member institutions. PBAsPrinciple Executive is the Chairman of the Executive Committee, elected periodicallyfrom within the EC. Over the years the role of PBA has broadened considerably. As amatter of fact StateBank of Pakistan as the central governing body is responsible in formulation ofregulations for the banking industry, and has been entrusted with the function ofregulating and monitoring certain services provided to the banking industry by outsideProviders.

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Industry Business Processes

Banking is one of the most sensitive businesses all over the world. Banks play veryimportant role in the economy of a country and Pakistan is no exemption. Banks arecustodian to the assets of the general masses. The banking sector plays a significant rolein a contemporary world of money and economy. Pakistan has a well-developed bankingSystem, which consists of a wide variety of institutions ranging from a Central Bank tocommercial banks and to specialized agencies to cater for special requirements of specificsectors. These are few processes and developments from which banking industry has beenpassing through for few years.

Improvements and strengthening of IT systems to cater to E-banking demands ofcustomers.

Optimizing the level of human resources to ensure quality customer service.

Wide range of services in consumer and corporate banking fields.

Foreign banks with their corporate culture have started coming in light of bankingIndustry growth and development.

Banks started providing project and term finance to build additional manufacturingCapacity, to increase exports, productivity and employment in the country.

Deep and broad-based organizational restructuring

Upgrading the human resource base through training and quality recruitment.

Privatization

Mergers and Acquisitions.

Mortgage based personal running finance.

Auto and Home financing.

Margin financing.

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Core Functions of State Bank of Pakistan

State Bank of Pakistan is the Central Bank of the country. While its constitution,as originally laid down in the State Bank of Pakistan Order 1948, remained basicallyunchanged until 1st January 1974 when the Bank was nationalized, the scope of itsfunctions was considerably enlarged.

The scope of the Banks operations was considerably widened in the State Bankof Pakistan Act 1956, which required the Bank to "regulate the monetary and creditsystem of Pakistan and to foster its growth in the best national interest with a view tosecuring monetary stability and fuller utilization of the countrys productive resources".Under financial sector reforms, the State Bank of Pakistan was granted autonomy inFebruary 1994. On 21st January, 1997, this autonomy was further strengthened byissuing three Amendment Ordinances (which were approved by the Parliament in May,1997) namely, State Bank of Pakistan Act, 1956, Banking Companies Ordinance, 1962and Banks Nationalization Act, 1974. The changes in the State Bank Act gave full andexclusive authority to the State Bank to regulate the banking sector, to conduct anindependent monetary policy and to set limit on government borrowings from the StateBank of Pakistan. The amendments also increased the autonomy and accountability of theChief Executives and the Boards of Directors of banks and DFIs.

Like a Central Bank in any developing country, State Bank of Pakistan performsboth the traditional and developmental functions to achieve macro-economic goals. The

traditional functions, which are generally performed by central banks almost all over theworld, may be classified into two groups:

Primary functions of State Bank

Issue of notes

Regulation and supervision of the financial system, bankers bank, lender of thelast resort, banker to Government, and conduct of monetary policy

Secondary functions of State Bank

The secondary functions including the agency functions like management of public debt,management of foreign exchange, etc., and other functions like advising the governmenton policy matters and maintaining close relationships with international financialinstitutions.

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Non-traditional or promotional functions,

The non-traditional or promotional functions, performed by the State Bank includedevelopment of financial framework, institutionalization of savings and investment,provision of training facilities to bankers, and provision of credit to priority sectors. TheState Bank also has been playing an active part in the process of islamization of thebanking system. The main functions and responsibilities of the State Bank can be broadlycategorized as under.

Regulation and Supervision

One of the fundamental responsibilities of the State Bank is regulation andsupervision of the financial system to ensure its soundness and stability as well as toprotect the interests of depositors. The rapid advancement in information technology,together with growing complexities of modern banking operations, has made thesupervisory role more difficult and challenging. The institutional complexity isincreasing, technical sophistication is improving and technical base of banking activitiesis expanding. All this requires the State Bank for endeavoring hard to keep pace with thefast-changing financial landscape of the country. Accordingly, the out dated inspectiontechniques have been replaced with the new ones to have better inspection andsupervision of the financial institutions. The banking activities are now being monitored

through a system of off-site surveillance and on-site inspection and supervision. Off-site surveillance is conducted by the State Bank through regular checking of variousreturns regularly received from the different banks. On other hand, on-site inspection isundertaken by the State Bank in the premises of the concerned banks when required.

The "Prudential Regulations" for banks

The "Prudential Regulations" for banks, besides providing for credit and risk exposurelimits, prescribe guide lines relating to classification of short-term and long-term loanfacilities, set criteria for management, prohibit criminal use of banking channels for thepurpose of money laundering and other unlawful activities, lay down rules for the

payment of dividends, direct banks to refrain from window dressing and prohibit them toextend fresh laon to defaulters of old loans. The existing format of balance sheet andprofit-and-loss account has been changed to conform to international standards, ensuringadequate transparency of operations. Revised capital requirements, envisaging minimumpaid up capital of Rs.500 million have been enforced. Effective December,1997, everybank was required to maintain capital and unencumbered general reserves equivalent to 8per cent of its risk weighted assets.

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Banking Sector Supervision in Pakistan

State Bank of Pakistan (SBP) which is the Central Bank of the country has beenentrusted with the responsibility for an ongoing effective supervision of the bankingsector. The relevant provisions of law which vest powers in State Bank of Pakistan (SBP)to carry out inspection of banks are contained in the Banking Companies Ordinance,1962. Besides, State Bank of Pakistan Act, 1956 and the Banks Nationalization Act,1974, The Financial Institutions (Recovery of finances) Ordinance, 2001, CompaniesOrdinance, 1984 and Statutory Regulatory Orders (SROs) are the relevant legislations,which cover the activities concerning the banking sector.

The financial sector in Pakistan comprises of

Commercial Banks Development Finance Institutions (DFIs),

Microfinance Banks (MFBs),

Non-banking Finance Companies

Modarabas

Stock Exchange

Insurance Companies.

Under the prevalent legislative structure the supervisory responsibilities in case of Banks,Development Finance Institutions (DFIs), and Microfinance Banks (MFBs) falls withinlegal ambit of State Bank of Pakistan while the rest of the financial institutions are

monitored by other authorities such as Securities and Exchange Commission andController of Insurance.

Detail of Banking System in Pakistan

At present there are 41 scheduled banks, 6 DFIs, and 2 MFBs operating in Pakistanwhose activities are regulated and supervised by State Bank of Pakistan. The commercialbanks comprise of 3 nationalized banks, 3 privatized banks, 15 private sector banks, 14foreign banks, 2 provincial scheduled banks, and 4 specialized banks.

Authority of State bank

Under the Banking Companies Ordinance, 1962 the State Bank of Pakistan is fullyauthorized to regulate and supervise banks and development finance institutions. Duringthe year 1997 some major amendments were made in the banking laws, which gaveautonomy to the State Bank in the area of banking supervision. Under Section 40(A) ofthe said Ordinance it is the responsibility of State Bank to systematically monitor theperformance of every banking company to ensure its compliance with the statutory

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Criteria, and banking rules & regulations. In every case in which the management of abank is failing to discharge its responsibility in accordance with the applicable statutorycriteria or banking rules & regulations or is failing to protect the interests of thedepositors or for advancing loans and finance without due regard for the best interests ofthe bank or for reasons other than merit, the State Bank is empowered to take necessaryremedial steps. The State Bank of Pakistan can, interalia, exercise the following powersvested upon it under the Banking Companies Ordinance:-

Prohibiting the bank from giving loans, advances & credits.

Prohibiting the bank from accepting deposits

Cancel license of a bank

Give directions to the bank as it deem fit. Remove chairman, directors, chief executive or other managerial persons

from the office and appoint a person as chairman, director or chiefexecutive.

The State Bank has framed Prudential Regulations for banks and Rules ofBusiness for DFIs that present a prudent operating framework within which banks andDFIs are expected to conduct their business in a safe and sound manner taking intoaccount the risks associated with their activities. These regulations incorporate the spiritand essence of BIS regulations and are constantly watched for possible improvement sothat their enforcement yields the best results to promote the objectives of supervision.State Bank is empowered to determine Statutory Liquidity and Cash Reserve

equirements for banks/DFIs. Presently the Cash Reserve Requirement is 5% on weeklyaverage basis subject to daily minimum of 4% of Time & Demand Liabilities. In additionto that banks are required to maintain Statutory Liquidity Requirement (SLR) @ 15% oftheir Time & Demand Liabilities. Similarly, DFIs are required to maintain SLR of 14%and Cash Reserve of 1% of their specified liabilities. Additionally, The BankingCompanies Ordinance had been amended in 1997 which empowers the State Bank toprescribe capital requirements for banks. In exercise of these powers the State Bank haslaid down Minimum Capital Requirements for banks based on Basle capital structure.The banks have to maintain a Capital Adequacy Ratio in a way that their capital andunencumbered general reserves are, at the minimum, 8% of their risk weighted assets,and effective from 1st January, 2003 banks are required to maintain a minimum paid up

capital level of Rs.1 Billion.

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Inspection of the baking system

While the off-site monitoring aspect is looked after by the State Bank ofPakistans Banking Supervision Department the responsibility for the on-site examinationof the banking system in Pakistan lies on the shoulders of the Banking InspectionDepartment. This has been designed to ensure that institutions operate in a safe and soundmanner. The focus of the supervisory efforts by the State Bank of Pakistan is on thehealth and stability of the banking system in Pakistan. The State Bank of Pakistans

policy for frequency of inspection of banks and DFIs is designed to provide flexibility inscheduling inspections consistent with the need to maintain safety and soundness. Thepolicy provides a framework within which supervisory ratings, surveillance and financialmonitoring results, and other appropriate indicators of banks soundness, are to be

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List of Banks working in Pakistan

PUBLIC SECTOR BANKS

First Women Bank Limited

The Bank of Khyber

National Bank of Pakistan

The Bank of Punjab

SPECIALIZED BANKS

Industrial Development Bank of Pakistan

The Punjab Provincial Cooperative Bank Ltd

SME Bank Limited

Zarai Taraqiati Bank Limited

PRIVATE BANKS

The Royal Bank of Scotland Limited

JS Bank Limited

Allied Bank Limited

KASB Bank LimitedArif Habib Bank Limited

MCB Bank Limited

Mybank Limited

Askari Bank Limited

Atlas Bank Limited

NIB Bank Limited

Bank Alfalah Limited

Saudi Pak Commercial Bank Limited

Bank Al Habib Limited

Soneri Bank LimitedCrescent Commercial Bank Limited

Standard Chartered Bank (Pakistan) Limited

Faysal Bank Limited

United Bank Limited

Habib Bank Limited

Habib Metropolitan Bank Limited

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List of Banks working in Pakistan

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History of MCB Bank

ISLAMIC BANKS

BankIslami Pakistan Limited

Emirates Global Islamic Bank

Dawood Islamic Bank Limited

FOREIGN BANKS

Albaraka Islamic Bank B.S.C. (E.C.),

PICIC Building

The Bank of Tokyo-Mitsubishi UFJ Limited - Pakistan Operations

Citibank N.A. - Pakistan Operations

MICRO FINANCE BANKS / INSTITUTIONS

Khushhali Bank Limited

Rozgar Microfinance Bank Limited

Network Microfinance Bank Limited

Tameer Micro Finance Bank Limited

Pak Oman Microfinance Bank Limited

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MCB Bank Limited" formerly known as "Muslim Commercial Bank Limited wasincorporated by the Adamjee Group on July 9, 1947, under the Indian Companies Act,VII of 1913 as a limited company. The bank was established with a view to provide

banking facilities to the business community of the sub-continent. The bank wasnationalized in 1974 during the government ofZulfikar Ali Bhutto. This was the firstbank to privatized in 1991 and the bank was purchased by a consortium of distinguishedPakistani corporate groups led by Nishat Group. As of June 2008, the Nishat Group ownsa majority stake in the bank. The president of the bank is Mr. Atif Bajwa (previously withCitibank) and the chairman is Mian Mohammad Mansha.

In 2005, the management of the bank changed its name from Muslim Commercial BankLimited to MCB Bank Limited (MCB). The reason was to explore international market asthey were facing resistance specially from Western Countries to avail license. In 2008 thehead office of MCB was shifted to Lahore in a newly constructed building namely MCB

House located at Jail Road from Karachi. On May 5, 2008, MaybankofMalyasiabought15% of MCB Bank ofPakistan

MCB is currently the fourth largest bank in Pakistan in terms of share of total bankingassets and the largest by market capitalization it has a robust franchise with 994 branchesincluding six overseas branches (as of FY06). MCB also has the fourth largest branchnetwork and the second largest ATM network in Pakistan after Allied Bank Ltd. Basedon the audited financial statement for the period ending December 31, 2006, the bank hadUSD 5.7 billion in total assets and net income of USD 207 million. It had a marketcapitalization of approximately USD 4.3 billion by end December 2007. The MCBTower in Karachi serves as the MCB's headquarters, and is also the tallest building in

Pakistan.MCB has invested heavily in information technology and as a result almost 870of its branches are automated. The Bank currently has around 540 online branches inmore than 65 cities, which are growing substantially every year. MCB is the pioneer inintroducing ATM facility in the country and currently the Bank has the largest ATMnetwork and ATM cardholder base. MCB ATM/Debit Card, the most multifunctionalcard of the country, in collaboration with Cirrus and Maestro can be used globally. TheBank has also deployed an extensive network of Point of Sale Terminals at thousands ofmerchants in major cities of the country, thus having the privilege of being the first bankwith full-fledged card acquiring and issuing systems. The Bank also pioneered the idea ofsharing its ATM network with other banks by establishing an electronic platform forenhanced network accessibility and secures on-line transactions. This step has also played

an important role in interconnecting all ATMs of the country

MCB products and Services Detail

Consumer Banking

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http://en.wikipedia.org/wiki/Adamjee_Grouphttp://en.wikipedia.org/wiki/Nationalizedhttp://en.wikipedia.org/wiki/Zulfikar_Ali_Bhuttohttp://en.wikipedia.org/wiki/Mian_Mohammad_Manshahttp://en.wikipedia.org/wiki/Maybankhttp://en.wikipedia.org/wiki/Malyasiahttp://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/MCB_Towerhttp://en.wikipedia.org/wiki/MCB_Towerhttp://en.wikipedia.org/wiki/Karachihttp://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/Adamjee_Grouphttp://en.wikipedia.org/wiki/Nationalizedhttp://en.wikipedia.org/wiki/Zulfikar_Ali_Bhuttohttp://en.wikipedia.org/wiki/Mian_Mohammad_Manshahttp://en.wikipedia.org/wiki/Maybankhttp://en.wikipedia.org/wiki/Malyasiahttp://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/Pakistanhttp://en.wikipedia.org/wiki/MCB_Towerhttp://en.wikipedia.org/wiki/MCB_Towerhttp://en.wikipedia.org/wiki/Karachihttp://en.wikipedia.org/wiki/Pakistan


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Online services ATM Services

Mobile Banking

Call Centre

Bill Payments

Deposit Accounts

Current account

Khushali Bachat

Basic Banking Account (BBA)

Saving account

Special rupee term

Foreign Currency Account

Savings 365 Gold

Loan Products Business Sarmaya

Personal Loan

Payara Ghar

Car4U

Cards Smart Card/ Debit Card

Credit Card

Travelers ChequesRemittancesCorporate Banking

Loans Term Loans

Working Capital Loans

Trade Finance

Cash Management

Investment Banking

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Practical work

Introduction to the Branch

MCB Trunk bazaar is main ranch of MCB in Sialkot.This branch is highly profitable asits profit for year 2007 is of 50 million and the Branch has deposit of 800 Million MCB.There are 28 employees working at MCB Trunk bazaar. This branch is focused onproviding banking services from 9 am to 5 pm even on Saturdays

The management of the branch is consisted of young generation which work with full

devotion

Location of the Branch is good enough as it is within main city but the branch faces theproblem of parking place

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Practical work

I did my internship in MCB Trunk branch which is the main ranch of MC in sialkotduring my six weeks tenure I rotate in different departments of the branch and try to dowork with full devotion and attention During my internship I worked in differentsanctions of General banking including remittance, clearing, and I also worked alongwith CFO and credit department head

Hierarchy of management in branch

Chief Manger is main representative of ranch and there are two departments under hisdirect supervision including credit department and CFO (Customer facility Officer).while General banking is under operational manger .general banking includingremittance, clearing, accounts, and cash department

While the main duties of Chief manger is to look after the development and profitabilityof the branch

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Detail of management in MCB main branch

Rank Name Grade

Chief Manger Mr.Tariq A.V.P

Operational Manger Mr. Naseer Ahmed Dodee A.V.P

Credit in charge Mr. Sirmad O-G-1

CFO Miss Sania O-G-3

Remittance in charge Miss Sabahat O-G-3

Clearing In charge Miss Hina O-G-3

Accounts In charge Mr. Adnan O-G-3

Cash department Head Mr. Usman O-G-1

Forex Department Mr. Afzal Khan A.V.P

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Practical Work during Internship

Account Opening Department

During my internship firstly I work along with customer facility officer also known asCFO .this designation is very important role to play in branch success as it deals withaccount opening forum .in MCB bank main branch sialkot this designation is hold byMiss sania she did B.COM from government college sialkot .

This department carries functions which revolves generally around opening of anaccount, closing of an account, entertaining the calls as well as walked in customers, byproviding information pertaining to the goods and services being offered by MCB Bankand above all to resolve the complaints if under their capacity, if not than transfer those tothe related department.. Customers including business persons and individuals used to call to know about currentaccount balances.. Customers including the individual and business persons Used tocome for having their bank statements commonly referred to as account Statement. Bankgives these statements to them based on their requests on which Customers must have tospecify the duration of the requested bank statements.

Main duties of CFO

Fill account opening forum

Fill deposit slips

Fill DD, MT, TT and online transfer application

DAK received and dispatched

Guide any customer come to branch

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What I practically did (CFO)

During my tenure along with CFO I learned about account opening requirements andpersonally deals with customers. There are very strict regulations of state bank ofPakistan on commercial Banks regarding to the account opening so thats why it is veryhard for internee to get opportunity to fill account opening form but I am lucky enough toget opportunity to fill form practically and learn different things about account opening

During my tenure Along with CFO if did following duties

Fill fund transfer application

Fill Account opening Form

Learn about different types of account provided by MCB bank

Fill deposit slips

Put Stumps on MT and Check book

See the procedure to rectify the mistake occur in account opening form

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Deposit Slips

These are the slips which enable customer to deposit money in their accounts and moneycan be deposited by

Cash

Cheque

There are different slips for current account and saving account. Green depositslip is for PLS Saving account and blue one is for current account

Components of Deposit Slips

Deposit slip contain the following details

Date

Date on which customer deposit money

Account number

Account to which you are going to deposit money

Code for current account is 1 while for saving account is 2 and you also writeyour personal account

Green deposit slip is for PLS Saving account and blue one is for current account

Name

Write the name of person on which account money is deposited

Forms of deposits

Deposit can e made in form of cash or cheque and in case of cheque we also

write cheque number in deposit slips

Amount

Amount deposited should be written in numbers and words

In end we take signatures from customers and then customer take slip to cashdepartment

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Account opening

Account opening is one of the most important activity in branch as these accounts playsvery important role in branch success and the whole branch business depend on accountsas these accounts are major source of deposits in bank and every branch wants toincrease it. In MCB main branch Sialkot CFO must meet the monthly target regardingaccount opening as she needs to open at least 300 accounts every 3 monthsAnother important issue in account opening is the regulations of state bank regarding theaccount opening as there are very strict restrictions and on volition bank has to paypenalties to state bank

Account Opening form detail

There are different portions of account opening form and the understanding of all theseportions is very important, the detail of account opening form of MCB bank is givenbelow

Major Portions of MCB Account opening form

Type of accounts

Nature of account and currency Personal information

Detail of other banking relationships

Account opening instructions

Smart card

Next of Kin

Know your customers

Types of accounts

There are different types of accounts which can be opened as there are

Individual account

Business account

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These accounts are further divided in to following categories

Individual account

Single individual account

Account handles by the single person

Joint account

Account which can handle by two or more person

Individual account requirement

Attested photocopy of computerized national identity card /passport o theindividual

In case of salaried person attested copy of his/her service card or any otheracceptable evidence of service including but not limited o a certificate from theemployer

In case of illiterate person two recent passport size photographs of the newaccount holder besides taking his right and left thumb impression on specimen

signature card

Business account

Sole proprietorship

Joint stock company

Partnership

Societies

Club/trust

Autonomous bodies

Government institution Foreign Missions

Others

These are different types of business account which can be open in MCB and therequirement of these accounts varies from each others

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Join stock companies

Resolution of board of directors for opening of account specifying the personauthorized to operate he company account

Memorandum and article of association

Certificate of incorporation

Certificate of commencement of business

Attested photocopies of computerized national identity card of all die rectors

Sole proprietorship

In addition to documentary requirements for individuals following documents arerequired

Application to open account on official letter head of the sole proprietorship

National tax number (NTN)

Evidence of membership of the rade organization

List of officials authorized to operate the account and their specimen signatures

Partnership

Attested copies no computerized national identity card of all partners Attested copies of partnership deed

Attested copy of registration certificate with registrar of the firms Authority letterin original in favor of the persons other tan the partner authorized to operateaccount of the firm

Account opening in the name of he Minor

In case of account being operated in the name of minor the word MIINOR to be added tothe title of the account the particulars of the guardians e provided as required underparticulars of account in account application form also copy of CNIC of the guardian

along with form B for minor to be provided

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Nature of account and currency

There is different nature of accounts and detail of these accounts are given below

Current account

MCB Current Account offers you the convenience of unlimited withdrawals i.e. access toyour funds whenever you want without any notice. There is no limit on the number oftransactions you make in a day.

Main features of the current account

Low minimum balance requirements.

Unlimited cash deposit and withdrawal facility at hundreds of branchesnationwide.

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

Lockers and other affordable transactional facilities..

Khushali Bachat

Enjoy the facility of a savings account and earn profit on daily balances.

Low average balance requirement.

Profit is paid on your account on a half yearly basis.

Cash deposit and withdrawal facility at hundreds of MCB branches acrossPakistan (conditions apply).

Withdraw cash through Pakistans largest ATM network.

Make cash free transactions, from your account at thousands of merchant outletsthrough your MCB Smart Card (local & international).

Stay in touch with your account through MCBs Virtual Banking Service.

Use your account to pay your bills 24 hours a day, 7 days a week through VirtualBanking.

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Basic Banking Account (BBA)

This product has been introduced to facilitate the low income group as well as theexisting account holders who wish to convert their regular savings or current accountinto Basic Banking Account.

The Basic Banking Account is a current account and can be opened with a minimuminitial deposit of Rs. 1000/- only. Account holders will be allowed 2 deposittransactions (either cash or through clearing) and 2 withdrawals (cash or clearing)

each month. All customer-initiated transactions over and above this limit will becharged a transaction fee. However unlimited free of charge cash withdrawals areallowed through MCB's own ATMs.

There will be no minimum balance maintenance requirement, and hence no monthlyaccount maintenance charges will apply.

In cases where balance in BBA remains zero for a continuous 6 month period,the account will be closed automatically, without any notice to the account holder.

Saving account

MCBs Foreign Currency Savings Account offers you attractive returns on yourForeign Currency investment.

Open a foreign currency Savings account in any of the four currencies i.e. USDollar, UK Pound Sterling, and Euro.

Unlimited transaction facility.

Low balance requirement.

Profit credited to your account on a half yearly basis.

You can avail a credit facility up to 75% of the total deposit value.

A foreign currency account can be opened at any of our foreign exchange dealingbranches.

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Special rupee term

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.

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.

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

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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.

Currency of account

Account can be open on following currencies

Pakistan rupees

US Dollar

British Pond

EURO

Details required from customer in account opening form

In account opening form customer also need to tell about

Either he is resident or Non-residentInitial deposit (minimum is10000)

Personal information of customer

When any one comes to open any personal account then bank demands the following

information

Title of account (name of the customer

Sort name

Current mailing address

District

Name as per CNIC

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Father/husband name

Date of birth

Mother maiden name

Married status CNIC No

Passport No.

Tel resident

Tel.office

Mobile

Email

Permanent address

Occupation

In case of business account following requirement is required by bank

Title of account

Company name

NTN Number

Office mailing address

Tehsil

P.O Box

Telephone office

Mobile

Email

Permanent address

Nature of businessIt can include

Import/export

Manufacturing

Agriculture

Others

Detail of other banking relationshipsCustomer need to ell if there is any 0065xiting relationship with MC bank and should

also provide all detail about account and loans with MCB bank Ltd .detail include

Branch name where customer account already exits

It include

Account number

Detail of loan if take by customer

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Smart Card detail

Smart card is debit card/ ATM card of MCB bank and it is on customer will that either hewants to take it or not and if customer want it then he should provide followinginformation

Name to appear on ATM card

Detail of ATM Smart card which include card type, card limit, and daily cyclelimit

Next of kin

This section contain information about customer kin like

Kin Name

CNIC No.

Relationship with customer

Telephone office

Mobile

Email

Introducer

Now the requirement of introducer is being removed by state bank of Pakistan and thereason of it is that now all banks has access to online verify system for CNIC so thatswhy there is no need of reference now .this system is being provided by NADRA andbank pay NADRA 25 rupees for each transaction

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Know your customer (KYC)

The general perception of branch managers on KYC / AML policy is inaccurate that SBPregulations make the new account opening difficult. On the contrary, proper accountdocumentation and KYC procedures provide satisfaction and protection to the branchmanagers /staff against unforeseen events and assist in establishing relationship inaccordance with the banks policies. Getting maximum reliable information about thecustomer is the basic principle of good banking which enables the Bank to make correctdecisions to meet with customers genuine banking requirements promptly. Branchofficers / staff have not to be alarmed or frightened but prudently ensure that all the

necessary documents have been obtained at the time of account opening.The Bank has a statutory obligation to know its customers and to understand the nature ofthe business that is being conducted with us. This applies to every type of customerregardless of who they are, their personal status, or the type of account or service thatthey require. Knowing your customer means:

Seeking evidence of identity and address and independently confirming thatevidence at the start of a business relationship with the Bank.

Seeking information regarding the nature of the business that the customerexpects to conduct with the Bank, establishing sources of income and expected

patterns of transactions, and keeping that information up to date, to show whatmight be regarded as normal activity for that customer

The Need to Verify Identity and Address

The Bank must verify the credentials of every customer when an account is first opened.This applies to all types of accounts (personal customers; sole traders/proprietors;partnerships; private and public companies etc.). Customers introduced from otherbranches are included in this requirement. An exemption is given when the applicantcustomer is itself another bank or financial institution

Completion of Account Opening Formalities and Authorization

No account will be opened until the account opening and Know Your Customer formshave been completed and all documents have been received and examined to ensure thatthey are valid.

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Example:

The ID card has not expired;

The documents are originals and not copies;

Specimen Signature Card and mandate duly signed and completed;

All documentary evidence, information and signatures are consistent;

In the case of giving a Third Party Mandate that the Third Party Mandate Formhas been duly signed and completed;

The Letter of Thanks should be sent through registered post / courier to thecustomer on their given addresses

The cheque book should only be issued after the account opening form has beencompleted in all respects and the Letter of Thanks issued by the Bank has beenreceived by the customer.

In the absence of the Branch Manager the account opening will be approved byOperations Manager

KYC section in Account Opening Form

The segment of KYC in account opening form divide accounts in two main categories

Personal account

Business account

Personal account require following detail

Type of customer

Walk in customer

Customer which is not regular one or permanent customer of bank

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Marketed Customer

Customer which come or chose bank due to the marketing efforts made by the bank

Referred by customer

Customer which chose our bank due to reference of anyone

Public figure

Either you customer is any public figure or not public figure can include

Celebrities

Politician

Sportsman

Purpose of account

What is the purpose of customer to open account?

Business

Personal saving

Others

Source of funds

What are the sources of funds of the customer?

Salary

Family business

Stock/investment

Home remittance

Agriculture

Property rent

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Other

Usual mode of transaction

How usually customer will made transactions?

Cash Dep. /withdrawal

Clearing

Collection

Remittance

Others

Residential detail

Rented

Owned

Living with family

Company provided

IN case of Non Residential Customer

If customer is non residential then he will tell about country of citizenship

Expected monthly turn over in account

How much customer will debit or credit its account in the month .these figures areapproximately

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In case of business account following information is required

Type of customers

Walk in customer

Customer which is not regular one or permanent customer of bank

Marketed Customer

Customer which come or chose bank due to the marketing efforts made by the bank

Referred by customer

Customer which chose our bank due to reference of anyone

Detail of other companies in the group

If there is any subsidiary of the company then give detail of that subsidiary while some

other important information is given below

Business established since

Past business experience

Major supplier name

Major customer name

Office Detail

o Office detail

o Rented owned

Sources of Fund

o Exports proceeds

o Real estate

o Property rent

o Equity

o Charity

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o Local trading

Expected monthly turn over in account

How much customer will debit or credit its account in the month .these figures areapproximately

In the end of account opening form signatures are taken from applicants

Letter of Thanks:Letter of thanks should be sent under certified posting to the introducer and the opener asPer banks format. This precaution would accomplish the purpose of notifying theintroducer and the customer that an account has been opened on the basis of hisintroduction thereby inviting a disclaimer, if untrue.Letter of thanks should be dispatched on the same day, the account is opened.Letter of thanks should be dispatched after entering in DAK dispatch register.

Rectification of mistakes in account opening form

There are very strict penalties if there is any mistake in account opening form and these

mistakes are identify by internal and as well as external auditors and if the external auditoccur and any mistake find in account opening form then state bank fine 25000 againsteach mistake as penalty so that why branches give lot of importance to account openingform and itself do internal audit to remove the mistakes and if any mistake come thenCFO attach another account opening form with exiting form and in new form CFO rectifythat mistake

Account closing

In order to close an account MCB Bank, customer needs to come up with the chequeequivalent to the amount available in his or her account. Bank withdrawals the amount ofwhich the cheque presented and will charge the customer as their processing fees. Eventuallythe account shall be closed.

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Clearing Department

CLEARINGThis department mainly revolves around the clearing of the cheques which arePresented in MCB Bank. The department has to take care of all the cheques, that after getting

them received from the customers, the amount will be credited to the right account for whichthe cheque presented. So as soon as they receive the cheque, an employee has to put roundstamps on deposit slip attached to the cheque and given it to the customer. This is for theevidence that the particular cheque is presented in MCB Bank and it has to pass it through theclearing department and than finally the amount will be credited to the right account. Thisdepartment has been classified into further three classes based on their operations.

CHEQUES OF TRANSFER

This departmental operation of the clearing caters those cheques which are of the

same branch i.e. MCB Liberty Branch. These cheques are directly posted to the account forwhich the cheque presents.

CHEQUES OF CLEARING

This process pertains to all those cheques of any bank within the same particularcity. The department takes care of all necessary associated things, the account title andaccount number shown on the cheque as well as on the deposit slip must be matched with thestored records maintained by the Bank manually as well in the database. Previously MCBBank only maintained registers for record purposes. In that, the details of the drawer, drawee

i.e. any particular bank, cheque number, and also the amount of the cheque had to be enteredmanually. The employee has also had the add list. So, after making the entries on the registeras well as on the add list, the employee had to match the total of the cheque amounts on theadd list and of the cheques individually. The employee used to do for first fifty cheques andthan started it of again for another bunch of cheques after getting the first fifty separated.After having done with it, the cheque and the deposit slips got separated from one another.Than stamps of clearing, posted put on the front of the cheques and on the deposit slips, andon back of each of the cheque, the stamp of the payees credited only must be put on. Butcurrently as the execution is being done on the new software, the employee only enters the

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account number and the cheque number and he can post the account by the cheque amount.Before that employee had to maintain the entries on the clearing register, than he used to postthe entries on the old software. But now irrespective of what was being carried out, theaccount can directly be posted as soon the cheque receives. The employee prepared all the

cheques for the representative of the NIFT. This is an institution that is carrying all the banksas its members. The cheques after passing through the clearing process of any particularbank, used to transfer to the NIFT. The clearing process itself is classified into two typesbased on the nature of transactions.

Cheques of collection

This arrangement is for those cheques from any bank out of any particular city i.e.Lahore. First it starts of with the sorting of the all cheques from out of Lahore, thanEntries are made in the register maintained for that purpose accordingly to the respectivecolumns. The columns are same as that are in clearing register, but the only difference is inthe entry of drawee which is in this case the particular branch of the bank mention on thecheque. Apart from that entry, each entry is the same as used to make in simple clearing. So,in order to get all these cheques cleared, the MCB Bank sends those cheques to the mainbranch of that particular Bank in that particular city through TCS. In addition to this, whilemaking entry as to the main branch of the Bank in the particular city, the employee alsomakes scheduling of it commonly referred to as C.C of cheques. It carries the entries oforiginating branch along with the responding branch. So, in this case the originating branchwill be the MCB Bank Liberty Branch and the responding branch will be the main branch of

that particular city having a specific branch code. So, the cheques will be carried forwardwith the scheduled entries made for that purpose. MCB Bank used to transfer it through TCS.As intimation, the responding branch will be sending the advice as it received those chequesfrom MCB Bank. Eventually the particular account will make credited by the originatingbranch i.e. MCB.

Inward clearing & outward clearing

If any cheque of MCB Bank is presented into any other bank, it transfers this Cheque to us inorder to get cleared. This is referred to as inward clearing. On the Contrary, if any cheque ofany bank is presented to the MCB Bank, it transfers it to that bank which the cheque belongs.

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Cheque Receiving FunctionOne person receives cheques from customers. While receiving cheques, following thingsshould be taken into consideration;

Cheque Date

Account number

Signatures

Deposit slip filling Outstation cheque

Condition of cheque etc.

If any problem occurs or any thing missing from the above list then bank will attachcheque return memo.

Cheque return Memo

Document attached with cheque in case of any deffiency present in cheque

Detail of cheque return memo

Components of cheque return memo

Branch Name

Branch code

Date

A/C No. and Title of A/c

Reasons to return Cheque

Reasons of returning the cheque

There can be following reasons to return the cheque

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Not Arranged for

Payment stop by drawer

Amount in words and figures differs

Cheque is mutilated

Cheque post dates

Clearing stump required

Account closed

Insufficient balance

Not drawn on us

Cheque incomplete

Endorsement requires bank guarantee

Rupees travel check

MCB Bank has been at the forefront of providing its customers with new and innovativeproducts and financial instruments that are safe, secure and profitable MCB RupeeTraveler's Cheques were first introduced in 1993 as safe cash for traveling and travelrelated purposes. The product has been extremely popular and is preferred over cash bycustomers while traveling and in all walks of life.

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 anyinconvenience especially by Travelers.

Easily encashed: 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, Chequescannot be duplicated.

Denominations: Available in denominations of Rs 1000, Rs 5000, Rs 10,000

Valid until Used: Validity of Cheques indefinite.

More than 900 MCB Authorized branches are selling and purchasing Cheques all overPakistan. MCB Rupee Traveler's Cheques are also available at the counters of ForeignBanks such as ABN Amro and HSBC and private bank i.e. Bank Al-Habib.

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RTC clearing procedures

Clearing Stump

Beneficiary Name Signature of customer at time of issuance and at time ofpayment should match

Endorsement stump

IBS signature

See either it is genuine or not

If all thins are present and up to mark then RTC is being cleared and then posted

Online posting of RTC

Serial no TC From TC to Quality Denominato

r

TR.type value

Serial No

Write serial number of RTC

TC From

We enter first RTC of the Series

TC To

We enter Last RTC of same series we have

Quality

Total number of RTC we entered

Denominator

Write Denominator of RTC as RTC can exit in different denominatorsE.g. 10000, 5000 etc

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Value

Total value of RTC comes throughQuality * Denominator

Remittance department

Remittance department is responsible to provide facility of transferring amount to

the account of MCB account holder. Following are the instruments and facilities providedby Remittance department

Pay Order (PO)

Demand Draft (DD)

Telegraphic Transfer (TT)

Mail Transfer (MT)

Online Transfer

Pay Order and DD are the instruments that people carry with them instead of cash for the

security purpose. Bank issues demand draft and Pay order to the customer on his request.PO is issued for intra city transaction and DD is issued for outstation transaction.Customer carries PO or DD with him and can cash it from other branch. In case of TTand MT bank transfers the advice by its own and customer does not has to carry it.

Demand Draft

Demand Draft is a written order, drawn by one branch of a bank upon another branch of thesame bank, or upon other bank to pay a certain sum ofmoney to specified person. Demand Draft is neither issued payable to bearer nor drawn onbranches situated within the same city.

The parties included in demand draft

PurchaserPerson who purchases the instrument

Drawee Branch

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Drawee branch is one on whom instrument has been drawn and from where the paymentof the instrument is to be obtained

Payee / BeneficiaryPerson who receives the payment of instrument

Procedure of DD Issuance:

Fill in the application.

Payment through cash or cheque.

Entries in the DD issue register.

Making the Demand Draft.

Signing of the Demand Draft.

Application of test

Preparation of advice and test application.

Payment of Demand Draft

Scrutinize the advice whether it pertains to the branch.

Check the DD serial No and test if applicable.

Amounts in words and figures of the advice must agree.

Full particulars of the DD issued are mentioned on i.e. Demand Draft No. name ofbeneficiary and amount.

If there is any cutting on advice, it has been duly authenticated under full signature ofthe authorized officer signing the advice.

Entry in the DD payable register.

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After receiving DD for payment, check the particulars already entered from DDadvice in DD payable register.

Check the test and IBS numbers.

Payment of Demand Draft.

DD Clearing Procedure

1. Crossing stump

Crossing stump of the bank who is presenting the instrument for clearance ofproceeds

2. Endorsement Stump

Stump shows that how payment is made

3. Clearing Stump

4. Check signatures by inter city signature book

Accounting transactions involved in DD

When DD issue Party Debit , HO credit

Drawee branch transaction (on receivingadvice)

HO Debit DD payable Credit

When instrument present DD payable debit Party Credit

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PAYORDER

A Pay order is written authorization for payment made in a receipt form issued and

Payable by the bank, to the person named and addressed therein on his giving a properdischarge thereon.

Features:

It is issued by and drawn upon and payable by the same branch of the bank.

It is neither transferable nor negotiable and as such it is payable to the payee namedtherein.

It is in a receipt form and therefore, is payable only after obtaining a discharge of the

payee on adequate revenue stamps.

Pay order cannot be issued to minor. Pay order is meant for banks own payment butin practice these are also issued to our customers for making payments.

Parties involved in Pay Order

Parties involved in pay order are:

Purchaser

Issuing/paying Branch ( issuing branch and paying branch is same in case of payorder )

Payee

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Pay order made Party account debitPay order issued account credit

When instrument present Pay order issued debit Party Credit

Telegraphic transferTransfer of funds from one branch to another branch of the same bank or upon other bankunder special arrangements for the payments to the beneficiary through telegram / Telex /

Fax is called Telegraphic Transfer

Procedure There are different exchanges through which money come to bank account

bank has detail data about all these exchanges that how much money come fromwhich exchange and at which ate as bank has maintained separate register foreach exchange in which all data is stored

Here mostly money come from middle east

Exchanges send Fax to bank early in the morning and in the fax name of theperson written with his NIC and amount which come

Related officer photo copied that fax depend upon the payment come in singlefax means if 10 payments come in one fax then officer take 20 copies of the fax,two copies for each customer

Then customers started to come

Related officer ask customer about from where he money comes ,who send it,how much money come and then demands customer NIC and phone number

Related officer attach copied NIC with 2 copies of Fax and also take 2 signaturesof customer

Then officer make vouchers on SF180 and Debit the PNSC (head quarter) andcredit the customer

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Then customer go to operational manger and manger do sign

In the end customer go to the cash department to take cash ,they take one copy inwhich customer signatures are present and send it to the head quarter

Accounting Transaction occur in Telegraphic Transfer

Customer Credit

PNSC (head quarter) Debit

MAIL TRANSFER

Transfer of funds from one branch to another branch of the same bank within or outside thecity or upon other banks under special arrangements for payment to the beneficiary throughMail / Courier is called Mail Transfer.

Features Mail Transfer is not negotiable.

Like TT, funds can be remitted by MT for the credit of the payees account or thePayee / beneficiary can be advised to receive the amount from the drawee brancheither in cash on proper identification or through his banker.

Issuance Procedure

Application on SF-100.

Payment through cash or cheque.

Preparation of MT.

Application of test on MT.

Signing and dispatch of MT.

Parties involved in MT

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Parties are involved in MT are:

Applicant

Remitting or drawing branch.

Drawee branch.

Beneficiary.

MCB Bank Remittances department caters the funds transfer facilities in the form of Payorders, Demand Drafts, and telephonic transfer facility to its customers.

Concept of Remittance

Each one of this instrument is considered to be Banks cheque and these used toPresent to customers based on their nature of demand. Its the Bank own responsibility toen cash them on customers behalf. The amount of funds transfer is unrestricted in eachof the instrument. Non account holder can also be entertained by all these funds transferFacilities. Pay Orders are used to transfer the funds with in the particular city. The

instrument of Demand Draft is used to transfer the funds out of any particular city. Theinstrument Demand Draft is given to the customer by the Bank at the time when thecustomer wants to make payments out of city, while giving this instruments to thecustomers, Bank used to generate advice against the Demand Draft itself. The advice istransferred to the branch to which the Demand Draft belongs. The branch will thanrespond the advice to the originating branch. Than afterwards, the particular party oraccount is going to be credited. While issuing of this instrument and responding of it, fewof the bank employees have been given the TEST key and the IBS NO from the particularbank. So, after this final verification, responding branch will make payments accordingly.

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Credit DepartmentCredit department is one of the most important department of the bank and the efficiencyof this department plays very important role in success of the branch as it allocatedifferent types of loans to customers and earn interest on them which is the main sourceof income for the bankThe basic function of a bank is to receive deposits (at low rate of return) and to lendmoney (at a high rate of return). So, the lending operations of a bank constitute a vitalpart of its business. This department is the source of income and earnings for the bank.

MCB bank main ranch sialkot deals with just corporate financing as or customerfinancing there is separate department .there are different types of facilities provided bythis department in section of corporate financing .these facilities can e divided in to twosegments

Category of borrowers, as per SBP classification

Borrowers have been segregated in MCB Bank into various categories, as per SBPClassification on a Constitution Type basis, as follows.

Individual Government, Bank, and other employees.

Public sector corporations.

Private Sector

Sole proprietorship

Partnership

Private limited

Public limited

Joint venture

Trust and Non-profit organization

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Public sector Public sector enterprise

Autonomous bodies

Government department Federal government

Provincial government

Local government

Consumer Financing

Consumer financing means any financial allowed to individuals for meeting theirPersonal, family or households needs. The facilities categorized as consumer financingare given as under:

Credit cards mean cards, which allow a customer to make payments on credit.

Corporate cards will not allow under this category. The regulations for creditcards shall also be applicable on charge cards, debit cards stored value cards andBTF (Balance Transfer Facility).

Auto loans for personal use.

Housing finance means loans provided to individuals for the purchase ofresidential house and improvements in due course shall also fall under thiscategory.

Personal Loans means loans to individuals for part of goods, services andexpenses and include RF/Revolving Credit to individuals.

Note

MCB main branch Sialkot not involved in consumer financing as they do only corporate

financing

Credit Facilities provided by bankBank provides two types of credit facilities to its customers. Following are those credit

facilities:

Funded

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Non-Funded

Funded Facilities

These facilities are having cash involvement in it and are given to the customers for

Several purposes.. It is further divided into following types:

Current Finance (OD)

Cash Finance (Pledge)

Term Finance

FAPC I

FAPC II

FAFB

LBP

FIM

FATR

Current Finance (OD)

This is the most common form of bank lending. In over draft facility, a customer isallowed to withdraw on his account in excess of the balance that the borrowing customerhas in credit. So when a customer withdraws in excess of his balance, an overdraft occurs(balance becomes debit). This facility can be availed for a certain limit called OD limitand is used to meet the seasonal requirements of cash. In current finance the interest isonly charged on the amount that has been over draft.

Cash Finance (pledge)

This is also a very common form of borrowing by commercial and industrial concerns,and is made available either against pledge or hypothecation of goods. This is also knownas running finance. It is utilized for the creation of current assets and to meet thepermanent working capital requirements. In this facility, the borrower is allowed toborrow money from the bank up to a certain limit, either at once or as required. The

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borrower prefers this form of lending due to the facility of paying mark-up charges onlyon the amount he actually utilizes not the whole limit amount.

Term Finance

Term finance is for a fixed period of time, all the amount is transferred to the borrowersaccount right in the beginning and interest is charged. The mark-up is received in the endon semi annually basis. Term finance has to be paid within a limit and once it is paid theclient cannot take it back.

FAPC I (Finance against packing credit)

Bank provides this facility against LC or sale contract (in favor of exporter). Bank takes100% security against this type of financing. This facility is also called Pre shipmentfinance. Afterwards bank receives the payment of exports and adjusts the exportersaccount.This loan is disbursed by the bank for the preparation of goods once the L/C is received.

FAPC II (Finance against Packing credit)

This loan is also known as performance-based financing. This type of financing is againstlast performance of the exporter. According to SBP exporter can have finance up to thehalf of amount of previous year export but then the exporter should ensure that theexports he makes are equal to double amount of the loan for one year. The mark-up ischarged for the period the exporter has used the facility and not for the whole limit.

FAFB (Finance against foreign bills)

This facility is also known as post shipment finance. This facility is availed by theexporter after he has shipped the goods and sent his documents for collection. The bankpurchases the documents from the exporter and gives him this facility. He will take loanagainst these documents and pays fixed mark-up rate on this facility.

LBP (Local bills purchase)

Local bill purchase documentary is used for inland import export transaction. Other wiseit is same as finance against foreign bill purchased. This is also availed by the exporterafter the shipment of goods and the bank purchases the documents.

FIM (Finance against imported merchandise)

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Finance against Imported Merchandise (FIM) is a credit facility provided to the customer,in L/C transaction. In FIM, bank itself makes the payment to the exporter and the goodsare kept in the possession of bank. Delivery order (DO) is issued by the bank for everytime, when the importer makes the payment, goods are transferred in the possession of

importer.

FATR (Finance against Trust Receipt)

The bank also offers credit facility FATR, against sight L/Cs, like FIM. Contrary toFIM, goods are given in the possession of importer. This facility is provided to thecustomer having a credit rating A+.

Non-Funded

Non-funded facility is that facility in which the banks funds are not physically involved.A non-funded facility can any time become a funded one. It can further divided into thefollowing:

L/CLG

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Practical work in credit department

During my tenure in credit department i performed different duties and learn aboutdifferent things but my main focus is on credit proposal and in credit proposal I mainlywork on Running finance as I learn about requirements need to avail running finance andhow to renew exiting running finance facility while other tasks which I perform wasgiven below

Learn about the credit proposal

Lean about different types of financing included Funded base and non funded

base Put data on Fire insurance register

Learn and personally handle safe custody

Learn about cash shortment Process

See how credit department staff replies to queries that come

Attend Calls in absence of staff member

Type different letters on computer including Debit letter , Authority letter etc

Running Finance

To finance stocks /AR / Stock and Spares / General working capital needs.

Concept

Running Finance is provided to a customer allowing withdrawals from theirAccount in excess of the credit balance maintained by him with the bank. The borrower isrequired to adjust the finance provided by the bank with in stipulated expiry period (normally

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one year). The account may, however be freely operated, by way of multi-transactions. Thisfacility is given to the customers (business persons) in order to fulfill their day to daybusiness requirements i.e. working capital. Bank used to finance this facility normally againsttheir factory or homes. Customers are given an OD limit that reflects the funds which can beavailed by customers themselves

Over Draft Limit

SPECIAL PRECAUTIONS

The MCB Bank ensures that:

Running Finance facility is not being used for long term financing needs.

Current utilization level is constantly monitored.

The customer can make periodic adjustments, at least quarterly.

Charging of Mark-up on Mark-up is prohibited under NIB system.

No disbursement is made against expired limit. The finance is disbursed to the customer after taking into account drawing

powers.

The drawing power is calculated after deducting the sum of principal and Mark-up Amounts outstanding from the sanctioned limits.

Credit Proposal

MCB bank main branch sialkot deals with corporate financing and when any customer

come then complete credit proposal is made by the related officer and then after makingthe proposal by the related officer proposal goes to credit hub in charge ,then firstly heapprove it then proposal goes to chief manger then he approve it if he has enoughauthority to approve it means manger can approve loan of certain limit and if loanamount is bigger than that limit then credit proposal goes to regional office forapproval and if regional manger has authority to approve it he approves it afteranalyzing the proposal other wise then it goes to Circle office ,SEVP , Area CreditExecutive, .SEVP (credit) means if loan can e approve by related person he approves it

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after properly analyzing the case an if he has not enough authority to approve it then hesend it to high ranked officer who can approve the credit proposal while the maximumauthority is possessed by President

Credit proposal Hierarchy

The bigger the loan, more authority is required to approve it so if the following personhas not enough authority to approve the loan then person will transfer it to above rankperson to approve it. Credit committee has maximum authority to decide either toapprove proposal or not.

Credit proposal Components

Credit proposal main components are given below.

Routing Statement

Application for Finance

Credit Proposal

Processing Sheet

Security Detail

Borrower basic Fact sheet

Call Report

Credit Risk rating Check list

Clearance Certificate

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Initials for Approval Date CommentsCredit Hub in charge

Branch Manger

Regional Manger

General Manger

SEVP CorporateArea CreditExecutive

SEVP (credit)

President

Credit proposal Scrutiny Check list

This is the document attached after Routing Statement as this checklist help to identifyeither required documents are completed or not .All these documents should be attached

in the respective order as shown in table

Completed /Attached (Y / N )

Existing SF-86 duly completed

Routing Statement

Basic info Record Attached ( For limits inexcess of RS . 50M )

Security Appendix

Group Summary sheet Attached

Latest call Report Attached

Prudential Compliance (shown in SF -86)

CIB checking from SBP(shown in SF -86)Checking From other banks

Latest Audited Financial Analyzed

Credit Risk Rating Check-List Attached

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Application for Finance

Customer need to fill the application of finance to gain credit facility and this documentcontains following details

Title of Account Client Name Account No ---------

Address Address of client

Business Address Address of business

Constitution Either business is partnership/sole proprietorship /company etc

Exiting Credit Line with MCB in this account / sister concern

Name of Limits with amounts Present outstanding

Securities Validity Business Given inMCB

Name of Limits with amounts

Here we write down the exiting facilities availed by the client with their amounts

Securities

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Security which bank taken against the facility provide ,in form of hypothecation andcollateral In bank prime security is hypothecation of stock while property is taken ascollateral

Validity

Write down the ate until client can use the exiting facility

Exiting Credit Line with other bank /DFIs / NBDFIS

If customer already takes any loan from other bank then customer need give all detailabout that facility

Name of Limits with

amounts

Present out

standing

Securities Validity Business passed

on to them

I / we now apply for the following credit lines

Credit line for which now customer apply

Name of Limit required Amount of

Limit

Securities Validity Business

Commitment

Name of Limit required

Write down the name of limit for which we apply

Securities

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Security which bank taken against the facility provide in form of hypothecation andcollateral In bank prime security is hypothecation of stock while property is taken ascollateral

ValidityWrite down the date until client can use the exiting facility

Accommodation is needed for the purpose as stated below

Write down the reason of taking the credit facilities.In case of running finance we write that we take RF to meet working capital requirements

The Name of directors, their NIC no, and father / husband name are as under

Name of Director Father / husband Name NIC Number

Conditions required to obey by the client

1. Last balance sheet duly audited / certified by CA signed by us is enclosed2. We undertake to sign all required documents in connection with above limits

before disbursement or thereafter as bank may require3. We confirm that we are not defaulter of any commercial bank /FI / NBFI and

have no objection if our credit report is attained from any source or supplied to

them4. The bank will be kept apprised of any change / proposed in ownership / directors

Yours Faithfully

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Partners

Credit proposal SF 86

Next document attach is credit proposal SF 86 and it contain the following detail

Branch detailIt contains detail about the ranch which make credit proposal. It tell us about

Branch name

branch code

Circle office

Client detailFollowing client information is required for SF 86

Client Name

Client account number

Date of account opened in bank

Address

Phone number

Date of establishment of business

Nature of business Ownership Type

Facilities informationSF 86 also contain all detail about the exiting and new facility for which client is applied

Exiting Facilities

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Facilities access by the clients

Present proposal

Facility for which client is applied now

All detail about Nature of facility is also present in SF 86 .Facilities can be of two types

Funded Base

Non Funded Base

Purpose of borrowing

Client also need to tell that why he want to borrow from bank like in the case of RF clientborrow to meet working capital requirements

Repayment Arrangement

Client need to tell that how he will return loan back to bank mean from where he willgenerate money

Important concept relating Repayment of loan

In case of running finance IDA (initial date of offering) is used to make sure that eithercustomer has enough potential to give back loan to bank or not

Initial date of offering (IDA)

When the facility of running finance is over that just for one day borrower need to giveback the total amount of loan to bank to show that he has enough potential o repay and bydoing this borrower update his facility of running finance for next year

Security detail

Bank take two types of security before giving loan

Prime security

Collateral

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Prime security

It comprises assets that are acquired with bank financing. Hypothecation and pledge ofStock in case of RF and Cash finance

Differ in Hypothecation and Pledge

In pledge stock is under possession of bank while in case of Hypothecation stock ispossessed y client but the bank has legal right over that stock

Collateral (Secondary Security)

Secondary security is over and above prime security and it serves the purpose ofadditional security .In it there are two types

Equitable Mortgage

In it legal right is not transferred to bank but intention is expressed that if client is unableto pay loan then legal rights transferred to bank and then after transferring of legal rightbank can sell the property

Registered Mortgage

In it client will transfer legal rights to bank

Borrowing From other Bank/FI

If client borrow from any bank or FI then client should tell about name of that bank andfacility avail.

Charge

Charge means the legal right on the assets of the person (company). In case of limitedcompanies, banks generally create their charge on the assets of the company, as security.The charge is registered with the Registrar of the companies (SECP).

Charge is of many types:

First Charge

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Second Charge

Pari Passu Charge

First Charge

The bank that has the first charge means that it has the first right on the assets of thecompany in case of liquidation. If other banks also have charge against that asset thenthey have second charge after the first one.

Second Charge

Second charge means that the bank has the second right on the assets of the company,and then afterwards third charge, fourth charge and so on have the right.

Pari Passu Charge

Pari Passu charge means that all the banks who have involved in the Pari Passu chargehave the equal rights. Pari Passu charge can be created for the first charge, or for thesecond or so.

Lien on Documents

Like charge, bank creates its lien on the documents in its possession, as security. Forexample, in case of import transaction under L/C, bank creates lien on import documents.

No Objection Certificate (NOC )

If customer take loan from any other bank already then you have to, take it to show thatother bank has no objection on giving loan to client

Business performances

Bank also analyze the current business performance of the client .it include

Deposits More the deposits ,more better for the bank

Import How much client import in the year

Export How much client export in the year

Remittance out ward

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Guarantee

Debit turn over How much client withdraw

Credit Turn over

Detail of Group Accounts

If there are group companies then detail of all these companies are required including theloan facilities already availed y them

Financial information

Client fresh financial statements are also required by the bank to analyze the currentfinancial position of the client .bank demands the following financial statements

Balance Sheet

Income Statement

Ratio Analysis

Credit Information Bureau Report

CIB report of client is also taken which contain the following detail Application account

Facilities availed y ClientName of Bank/FI where Default (if any)

Compliance with Prudential Regulations

SF 86 also contain detail about Compliance with Prudential Regulations

It includes

Debt equity Ratio (60: 40 ) Yes/No

Current ratio is maintained as per pre prudential regulation

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Total fund based facilities do not exceed 10 times of equity

Audited balance sheet signed by owner/bank auditor

Total accommodation not exceed Rs.

In end Credit Hub in charge and chief manger give positive comments on approval if

they are satisfied from client position and recommend giving credit facility to client

Borrower Basic Fact Sheet

This document is purely about client and it contain all info of client .this document helpbank to know his client well and it contain the following information

Borrower profileThis segment contain basic information about borrower including

Name

Address

Phone #

Fax#

Sale Tax #

Import Registration

Export Registration

Establishment of Business

Opening Date of Account

Detail of Directors/owners/Partners

This segment contain all details about Directors/owners/Partners .this segment willprovide following detail about owners or partners.

Name/ Father Name

Residential Address

Phone #

Fax#

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E-mail Address

National Tax #

NIC #

Share Holding

Amount of capital invested

% of share holding

Management DetailThis segment will provide detail about management of the company .this segment willgive information about

Director name

Address

NIC #

Phone #

Corporate Status

Tell about type of corporate .it can be

Sole Proprietorship

Partnership

Public / Private Limited Company

Nature of business

It can be

Industrial

Commercial

Agricultural

Services

Any other

Required Limits

Required Limits

Amount Tenor Purpose

Fund based

Non Fund Based

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This table tells about limits for which borrower is applied and also gives us detail aboutfacility amount, tenor and purpose to avail the facility

Exiting limit and status

Amount Regular Amount overdue

Fund based

Non Fund

Based

Tale provide us complete detail about exiting facilities and their current status

Business Handled with all financial institution during the last accounting year

Import Exports Remittance Effect

Tale provide complete detail about import and export of company

Credit Rating (where Applicable)

Name of Rating Agency Rating Rating date

Detail of Prime Security Mortgage /Pledge

Name ofFinancialinstitution

Nature ofSecurity

Total amount Rank of charge

Table provide complete detail about prime security against the facility .Hypothecation ofStock is prime security

Details of Secondary Collateral Mortgaged/pledged

Name ofFinancialinstitution

Nature ofSecurity

Total amount Rank of charge

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Property is taken as Secondary Collateral

Detail of personal Guarantee provided by the directors to FI to Secure Credit

Name of

Guarantors

Institution

to whomguaranteegiven

Amount of

Guarantee

Validity

Period

NIC # NTN Net worth

Detail of associated ConcernsIf there is group of companies then detail of associate concern is required by the bank

Dividend declaredWrite down the amount of dividend issued y the company

Net worth (particulars of assets owned in their own names by the director /

partners

Owner name Particulars of Assets Market value Particular of liabilities

Additional information

Depreciation

Total assets

Lan