Muslim Commercial Bank Internship Report, Internship Report on MCB, Internship Report on Muslim Commercial Bank
EXECUTIVE SUMMARY
In the domestic banking industry of Pakistan Muslim Commercial Bank of Pakistan possesses a unique position. MCB was incorporated in 1997 and was later privatized by the Government of Pakistan. The Nishat Group bought the majority shares of the bank and so got the rights to control the bank’s operations. Since the privatization of the bank, MCB has implement different policies to make it one of the best banks of Pakistan, which included introducing new products and services and increase its operations by opening new branches in Pakistan.
8 weeks internship at MCB House Lahore, and worked in Human resource Department.
Although there were no such big problems found in the working of MCB, but there were some problems in training of the employees, incentive schemes and product innovation.
Some of the recommendations include workshops for employees, job rotation, teams work to find innovative products and scholarship programs for employees.
Lastly MCB has seen a rapid growth in its activities by introducing a range of products and services and showing its presence in the country by opening new branches and in future should keep this momentum and always strive to become the best.
Banking in Pakistan:
After independence successive Pakistani governments adopted apolicy of ‘supply-leading’ finance. A policy designed to implement the import substitution development model leading to long term industrialization, was possible only with the mobilization and allocation of large amounts of term finance. The problem of inadequate financial intermediation was overcome by creation of nationwide system of commercial bank branches. The banks were encouraged to mobilize deposits and lend to corporate sector at attractive terms.
Pre- Nationalization:
In the formative years of development of banking in Pakistan, governments intervened in the banking system in three ways. First, a central bank i.e. the State Bank of Pakistan was established and given a multiplicity of functions: regulating monetary and credit system, fostering economic growth, undertaking money market operations, and supporting the development of the capital market. Second, low cost financing was made available both through the commercial banks. Third the increase in the number of branches allowed a profound increase in bank credit, based on the increase in commercial bank deposits. But these steps had some negative implications also. First the government policy supported lending to specific industrial groups. Second considerable proportion of the bank investments was directed towards government debt securities. Also high premium on liquidity made the banks frequently reverting to SBP for additional credit.
Nationalization:
During nationalization the system of credit ceiling, quotas, and control affected the performance of nationalized commercial banks. As substantial part of their investment was maintained in low yield government securities, given interest rate ceiling, banks controlled deposits rates, thus leading to a negative real interest rate. These trends affected the ability of financial system to generate resources for economic development. Negative real interest rates encouraged disintermediation from the formal to informal financial sector, where nominal rates of return were substantially high. By 1990, the financial performance of the nationalized commercial banks had declined substantially.
Post-nationalization:
From 1991, a liberalization policy introduced by government, involving disinvestments of state-owned commercial banks and deregulation of financial and monetary controls, had far reaching effects on banking system. The changing financial structure was accompanied by reforms which had an impact on the inter-linkage between financial and money markets. These reforms included:
An over view of MCB as an organization:
Muslim commercial bank was established on July 7, 1947 at Calcutta. Quaid-e-Azam M.A. Jinnah was very intent in the formation of MCB because of his apprehensions about the future of banking industry in Pakistan. Adam Jee Daud was the promoter of the bank, who commenced the venture with authorized capital of Rs. 300,000. After the partition of Indo Pak Subcontinent the head office of the Bank was shifted to Dhaka, capital of Bangladesh (formally known as East Pakistan). In 1956, the bank moved its registered office to Karachi. Until 1974, private management operated the Bank. In 1974, with the promulgation of Nationalization of Banks Act, the Bank was merged with the Premier Bank Ltd. and was handed over to Government. Under the Government umbrella most of the enterprises could not do well.
After the Government’s decision to privatize government owned entities in 1992, the MCB was first bank to be privatized. Privatization was the milestone in the progress of the Bank. Since privatization, MCB’s growth has been phenomenal. Today, MCB in one of the largest foreign banks in Sri Lanka, the first bank in Pakistan to launch Global Depository Receipts (GDR) in 2006, has strategic foreign partnership with Maybank of Malaysia which holds 20% shares in MCB through its wholly owned subsidiary Mayban International Trust (Labuan) Berhad since 2008, has international indirect regional presence in Dubai (UAE), Bahrain, Azerbaijan, Hong Kong and Sri Lanka and serving through a domestic network of over 1,130 branches and 600 ATMs across Pakistan with a customer base of 4.5 million (apprx.)
MCB is reputed as one of the most sound financial institution and as one of the leading banks in Pakistan with a deposit base of PKR. 462 bln (apprx.) and total assets of PKR 605 bln (apprx.). The bank is versed as one of the oldest and most responsible banks in Pakistan and has played pivotal role in representing the country on global platforms while being one of the few institutions that are recognized and traded in the international market.
The bank has also been acknowledged though prestigious recognition and awards by Euro money, MMT, Asia Money, SAFA (SAARC), The Asset and The Asian Banker.
Respect: We respect our customer’s 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.
The pledge to bring improvement and development in banking services offered by MCB, made by made by the management on the eve of taking over the reins of bank in April 1991 stands largely fulfilled. Improvement of branches and development of its network formed the mainstay of pledge.
CBBG has been in the forefront of implementing its core values of integrity, Respect, Excellence, Customer Centricity and Innovation. Taking the above values as given, CBBG has translated them into a rapidly moving the wheel of dynamism, whose constituents the following:
Operations Group:
Since privatization MCB Bank operations has been instrumental in managing various functions of the bank. Operations of the bank were managed by the several head office divisions. These divisions played a vital role in managing daily affairs of bank these operations include managed manually, real time online banking, MCB master cards and ATMs.
Audit Group:
Internal audit function is maintenance of the fundamental “checks and balances” for sound corporate governance. Adequate internal controls within the effective internal audit function that independently evaluate the control system within the banking institutions. This paper addresses the journey of MCB’s internal audit function over the past two decades.
Audit Committee:
Consumer Banking Group:
Consumer banking Group was formally structure in 2002 and started its operations in 2002. It has involved into an important pillar in MCB’s overall banking structure through its valuable presence.
This group is provided under the following services:
TREASURY & FOREX GROUP:
This group deals all foreign currency accounts network.
It also deals the following
Special Assets Management Group:
The primary business of this group is to optimize recovery yield in the loss classified segment of the loans assets. These loans primary pertain to the commercial banking, corporate banking, and Islamic banking groups also.
Strategic Planning and Investment Group:
This group makes the future strategic planning for the bright future of MCB.
Wholesale Banking Group:
This group started its working in 2005 the roles performed by this group are as under:
Performance appraisal is that on which basis benefits and incentives are given to the employees of MCB.
There were more than 12000 employees whose appraisals were checked by us one by one. Each appraisal has 7 sections in it that are as under
Section 01:
It includes the detail of the appraisal and both employee and line manager signatures. It also includes the weight age and percentage of the employee rating.
Section 02:
This section includes the 70% of total rating plus 30% of average of the rating. and must be signed by the both employee as well as line manager.
Section 03:
In this section there were major 5 things that must be scored that were
Section 04:
It contains the willingness of an employee whether he/she is agreed or disagrees with the appraisal and also commented by the manager of an employee.
Section 05:
Average rating plus final rating is mentioned in this section and properly signed by three people’s employee, line manager and supervisor also.
Section 06:
It contains all trainings required by the employee it includes
Section 07:
This section contains the employee’s goals and targets he has to be achieved in the coming year. That is also properly signed by the employee and his manager as well.
The strengths of MCB are as:
The noted weaknesses of MCB are as:
· Leasing
· Personalized Financing
Threats:
rizwan hailain ...
EXECUTIVE SUMMARY
In the domestic banking industry of Pakistan Muslim Commercial Bank of Pakistan possesses a unique position. MCB was incorporated in 1997 and was later privatized by the Government of Pakistan. The Nishat Group bought the majority shares of the bank and so got the rights to control the bank’s operations. Since the privatization of the bank, MCB has implement different policies to make it one of the best banks of Pakistan, which included introducing new products and services and increase its operations by opening new branches in Pakistan.
8 weeks internship at MCB House Lahore, and worked in Human resource Department.
Although there were no such big problems found in the working of MCB, but there were some problems in training of the employees, incentive schemes and product innovation.
Some of the recommendations include workshops for employees, job rotation, teams work to find innovative products and scholarship programs for employees.
Lastly MCB has seen a rapid growth in its activities by introducing a range of products and services and showing its presence in the country by opening new branches and in future should keep this momentum and always strive to become the best.
Introduction
Banking in Pakistan:
After independence successive Pakistani governments adopted apolicy of ‘supply-leading’ finance. A policy designed to implement the import substitution development model leading to long term industrialization, was possible only with the mobilization and allocation of large amounts of term finance. The problem of inadequate financial intermediation was overcome by creation of nationwide system of commercial bank branches. The banks were encouraged to mobilize deposits and lend to corporate sector at attractive terms.
Pre- Nationalization:
In the formative years of development of banking in Pakistan, governments intervened in the banking system in three ways. First, a central bank i.e. the State Bank of Pakistan was established and given a multiplicity of functions: regulating monetary and credit system, fostering economic growth, undertaking money market operations, and supporting the development of the capital market. Second, low cost financing was made available both through the commercial banks. Third the increase in the number of branches allowed a profound increase in bank credit, based on the increase in commercial bank deposits. But these steps had some negative implications also. First the government policy supported lending to specific industrial groups. Second considerable proportion of the bank investments was directed towards government debt securities. Also high premium on liquidity made the banks frequently reverting to SBP for additional credit.
Nationalization:
During nationalization the system of credit ceiling, quotas, and control affected the performance of nationalized commercial banks. As substantial part of their investment was maintained in low yield government securities, given interest rate ceiling, banks controlled deposits rates, thus leading to a negative real interest rate. These trends affected the ability of financial system to generate resources for economic development. Negative real interest rates encouraged disintermediation from the formal to informal financial sector, where nominal rates of return were substantially high. By 1990, the financial performance of the nationalized commercial banks had declined substantially.
Post-nationalization:
From 1991, a liberalization policy introduced by government, involving disinvestments of state-owned commercial banks and deregulation of financial and monetary controls, had far reaching effects on banking system. The changing financial structure was accompanied by reforms which had an impact on the inter-linkage between financial and money markets. These reforms included:
- Introduction of a competitive auction market for government debt.
- An across-the-board increase in yields on government debt.
- An increase in rupee deposit rates to make them more attractive to investors.
- Permission for banks to raise deposits to attract funds from informal sector.
- And revised prudential ratios on both credit expansion and maximum lending and deposit rates.
An over view of MCB as an organization:
Muslim commercial bank was established on July 7, 1947 at Calcutta. Quaid-e-Azam M.A. Jinnah was very intent in the formation of MCB because of his apprehensions about the future of banking industry in Pakistan. Adam Jee Daud was the promoter of the bank, who commenced the venture with authorized capital of Rs. 300,000. After the partition of Indo Pak Subcontinent the head office of the Bank was shifted to Dhaka, capital of Bangladesh (formally known as East Pakistan). In 1956, the bank moved its registered office to Karachi. Until 1974, private management operated the Bank. In 1974, with the promulgation of Nationalization of Banks Act, the Bank was merged with the Premier Bank Ltd. and was handed over to Government. Under the Government umbrella most of the enterprises could not do well.
After the Government’s decision to privatize government owned entities in 1992, the MCB was first bank to be privatized. Privatization was the milestone in the progress of the Bank. Since privatization, MCB’s growth has been phenomenal. Today, MCB in one of the largest foreign banks in Sri Lanka, the first bank in Pakistan to launch Global Depository Receipts (GDR) in 2006, has strategic foreign partnership with Maybank of Malaysia which holds 20% shares in MCB through its wholly owned subsidiary Mayban International Trust (Labuan) Berhad since 2008, has international indirect regional presence in Dubai (UAE), Bahrain, Azerbaijan, Hong Kong and Sri Lanka and serving through a domestic network of over 1,130 branches and 600 ATMs across Pakistan with a customer base of 4.5 million (apprx.)
MCB is reputed as one of the most sound financial institution and as one of the leading banks in Pakistan with a deposit base of PKR. 462 bln (apprx.) and total assets of PKR 605 bln (apprx.). The bank is versed as one of the oldest and most responsible banks in Pakistan and has played pivotal role in representing the country on global platforms while being one of the few institutions that are recognized and traded in the international market.
The bank has also been acknowledged though prestigious recognition and awards by Euro money, MMT, Asia Money, SAFA (SAARC), The Asset and The Asian Banker.
MCB Mission & Vision
Mission:
|
We are a team of committed professionals,
providing innovative and efficient financial solutions to create and
nurture long-term relationships with our customers. In doing so, we
ensure that our shareholders can invest with confidence in us.
|
Vision:
To be the leading financial services provider, partnering with our customers for a more prosperous and secure future.
Our Values
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 customer’s 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.
MCB Organizational structure:
MCB Branches network:
Organizational hierarchy of MCB:
Groups in MCB:
I have learnt about different groups regarding compensation and benefits.- Commercial branch banking group (CBBG)
- Operations Groups (ops)
- Audit Group (AG)
- Consumer banking Group (CBG)
- Treasury And Forex Group (try and fx)
- Special Asset Management Group (SAMG)
- Wholesale Banking Group (WBG)
- Strategic Planning & Investments Group (SPIG)
The pledge to bring improvement and development in banking services offered by MCB, made by made by the management on the eve of taking over the reins of bank in April 1991 stands largely fulfilled. Improvement of branches and development of its network formed the mainstay of pledge.
CBBG has been in the forefront of implementing its core values of integrity, Respect, Excellence, Customer Centricity and Innovation. Taking the above values as given, CBBG has translated them into a rapidly moving the wheel of dynamism, whose constituents the following:
- Know your portfolio
- Circular Liquidity
- Branch visit
- Monthly review meeting
- Service quality
- Operational Excellence
Operations Group:
Since privatization MCB Bank operations has been instrumental in managing various functions of the bank. Operations of the bank were managed by the several head office divisions. These divisions played a vital role in managing daily affairs of bank these operations include managed manually, real time online banking, MCB master cards and ATMs.
Audit Group:
Internal audit function is maintenance of the fundamental “checks and balances” for sound corporate governance. Adequate internal controls within the effective internal audit function that independently evaluate the control system within the banking institutions. This paper addresses the journey of MCB’s internal audit function over the past two decades.
Audit Committee:
| Mr. Tariq Rafi | Chairman |
| Dr. Muhammad Yaqub | Member |
| Dato’ Mohammed Hussein | Member |
| Mr. Aftab Ahmad Khan | Member |
| Mr. Muhammad Ali Zeb | Member |
Consumer Banking Group:
Consumer banking Group was formally structure in 2002 and started its operations in 2002. It has involved into an important pillar in MCB’s overall banking structure through its valuable presence.
This group is provided under the following services:
- Lending
- Remote banking
- Investment services
- Rupee traveler cheques
- Service quality
TREASURY & FOREX GROUP:
This group deals all foreign currency accounts network.
It also deals the following
- Managing the banks liquidity across the entire branch
- Ensuring liquidity in foreign currency account
- Maintain reserve with state bank
- Trading in Forex
- Interest rate risk
- Trading in government securities
- Treasury bills
- Pakistan investment bonds
Special Assets Management Group:
The primary business of this group is to optimize recovery yield in the loss classified segment of the loans assets. These loans primary pertain to the commercial banking, corporate banking, and Islamic banking groups also.
Strategic Planning and Investment Group:
This group makes the future strategic planning for the bright future of MCB.
Wholesale Banking Group:
This group started its working in 2005 the roles performed by this group are as under:
- To raw control and manage investment banking
- To control and manage transaction banking
- Collections
- Payments
- Channel financing
- Local rupee Drawing arrangement
- Home remittances
- Trade products
Internship activities:
Performance Appraisals of All above Mentioned Groups:
Performance Appraisals
Performance appraisal is that on which basis benefits and incentives are given to the employees of MCB.
There were more than 12000 employees whose appraisals were checked by us one by one. Each appraisal has 7 sections in it that are as under
Section 01:
It includes the detail of the appraisal and both employee and line manager signatures. It also includes the weight age and percentage of the employee rating.
Section 02:
This section includes the 70% of total rating plus 30% of average of the rating. and must be signed by the both employee as well as line manager.
Section 03:
In this section there were major 5 things that must be scored that were
- Customer focus
- Time management
- Leadership
- People management
- Corporate responsibility
Section 04:
It contains the willingness of an employee whether he/she is agreed or disagrees with the appraisal and also commented by the manager of an employee.
Section 05:
Average rating plus final rating is mentioned in this section and properly signed by three people’s employee, line manager and supervisor also.
Section 06:
It contains all trainings required by the employee it includes
- Soft Skills training
- Technical training
- Leadership and people management training
- Other training
Section 07:
This section contains the employee’s goals and targets he has to be achieved in the coming year. That is also properly signed by the employee and his manager as well.
- My part in this performance appraisal was to check section 6, which includes the trainings suggested by the employees themselves. And then write these trainings in front of those employees IDs and name. Then Put the same data on Excel Sheet.
- Check the trainings which are requested by the employers and get approvals from Head HR.
- Then budget which is used in Staff College was also signed and approved from the head of HR.
- Phone calls to the persons who are going to be interviewed and checked if they got their letters.
- Check the documents of the persons who are going to be interviewed and ask from them to get the documents.
- Enter the ratings of the interviewed persons given by the interviewers into their accessing sheets.
- Check the check list of internees whether they have given the whole documents or not.
Other tasks:
MCB SWOT Analysis:
Strengths:The strengths of MCB are as:
- MCB is the first Pakistani privatized bank and because of its quality management, marketing, innovation in products and services is performing well in financial market
- Has established a good reputation in the banking market.
- Strict adherence with the banking procedures requirements, SBP’s prudential regulation requirements and its SROs and international banking requirement as well as to its own set policies.
- Strong and its attractive products.
- Better focus on customer services and customization.
- Flexibility with the changing environment.
- Induction of the highly qualified professionals to change overall set up
The noted weaknesses of MCB are as:
- The majority of people are not well aware about the products of MCB.
- Therefore it should advertise extensively especially RTC and Master Cards.
- A behavior has been noted that bank tries to feel at ease with good looking, rich and educated people and the poor looking customers feel some bit strange in the environment of the bank. The bank employees should try to accommodate behaviorally all type of customers.
- In MCB there is lack of specialized skill because of job rotation policy of human resource department. The bank should concentrate upon increasing its abilities on individual service basis.
- Mismanagement of time is another big mistake in MCB branches, the bank official time of closing is 5:30pm but due mismanaging of time allocation and work the staff is normally on their seats till 7:00 or 8:00 clock.
- Process of development is bit slow due to its conservative approach.
- Never prefer to be a leader and prefer to be a follower of other.
- Slow improvement and acceptance of technological changes.
- More emphasis on deposit accumulation and less on their mobilization
- Greater potential and opportunities for Credit Division if Liberal Policies being adopted.
- Can grab more market share for its RTCs, remittances and forex department through effective promotional and liberal policies.
- Inclusion of highly qualified professional can change the whole scenario and position of the bank if they have given the due liberty in performing their duties.
- Adoption of information technology will improve the customer services.
- More mobilization of accumulated deposit is possible through innovative financing
· Leasing
· Personalized Financing
Threats:
- Change in government policies has affected the banking business. Still banks have to wait to get permission of state bank. The freezing of foreign currency accounts is a vital example of letting people not to trust on banks.
- The Competition has become severe by the entrants of so many banks, So to exist one will have to prove himself in its services through excellent management and will have to satisfy its shareholders. Otherwise he will be out the market.
- Employees unions have been allowed if not managed properly can affect performance.
- The decrease purchasing power of consumer in the current economic situation of the country affecting the business activity speed too much and the result is the low investment from the investors in new projects can create problem for the bank because it is working a lot in trade.
- Introduction of credit marketing by local and foreign banks is badly affecting the mobilization of the MCB’s deposits due to the non presence of such department in it.
- Introduction and adoption of information technology as well as promotion of the computer culture by the local as well as foreign banks will definitely affect the services and business of the MCB.
Conclusion:
- This period of internship was very professional experience and I learned a lot from the MCB House.
- One thing which is very valuable in the practical life and I also learned it in this environment which is how to interact and communicate with the upper and lower level staff.
- And in this process in came to know that the practical life is too different and difficult and it is difficult to survive in such an environment where competition level remain at peek.
- Practical life is very difficult and its experience has a good impact on my carrier.
- I tried again and again to eliminate my mistakes and this experience will influence my future performance
rizwan hailain ...
I read a article under the same title some time ago, but this articles quality is much, much better. How you do this..
ReplyDeletelearn more