An Internship Report

Dedicate d

To My Parents
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An Internship Report

PREFACE
It is the requirement of the MBA course Al-Khair University, Multan that all students of MBA have to spent two months in any organi ation to get practical e!posure and to get familiari ed with the ways to live in the organi ational environment which is dramatically different from the educational environment" #hat two months period called $Internship %eriod $, if spent properly and sincerely, ena&les the students to &e more confident, more 'nowledgea&le, more responsi&le and, a&ove all, more committed to its wor' in the practical field" I have also &een assigned to do internship of si! wee's period in M(B )hang (ity Branch" It has ena&led me to understand the practical scenario and sharpen our decision ma'ing power and utili ing the resources in an effective manner, so that our resources generate ma!imum profit" In preparing this report, I have put all of my &est efforts and tried my level &est to give ma!imum 'nowledge" *espite of my all the coherent efforts, I do &elieve that there will always &e a room for improvement in the efforts of learner li'e me" Farhan Raza

An Internship Report

Table of Contents
DESCRIPTION ,!ecutive -ummary 0istory of M(B 0ead 2ffice (ircle office %rominent 5eatures of M(B 6eneral Ban'ing *epartment (urrent section 5inancial %roducts7-ervices 8emittancesection (ash section (learing sections (redits department Agricultural (redits (ommercial Advances; 5oreign ,!change *epartment 5oreign (urrency Accounts %rime currency scheme Imports < ,!ports PAGE # ./ .1 13 14 1/ +. +1 +1 39 41 4/ 49 :/ /1 /1 :. :+ :/

An Internship Report

#rade #erms =etter of (redit *uty *raw Bac's ->2# Analysis -uggestions

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EXECUTIVE SUMMARY
#he &an'ing structure in %a'istan comprises of the following types, -tate Ban' of %a'istan, (ommercial Ban' of %a'istan@ ,!change Ban's, -aving &an's, (ooperative &an's, -peciali ed credit institutions" #he state &an' of %a'istan is the (entral &an' of the country and was esta&lished on )uly .1, 1?41" #he networ' of &an' &ranches now covers a very large segment of national economy" #he -tate Ban' of %a'istan issues the shares of these periodically" Ban' employees and other common peoples can also purchase these shares and earn profit" In 1?/:, M(B transferred its 8egistered office to Karachi, where the 0ead 2ffice is presently located" %a'istanAs first privati ed &an'" #he corporate &ranch at -hahrah-e-5aisal Karachi B-5KC &ranch is the corporate &ranch of M(B in Karachi" #he &an' is using ->I5# for transfer of information a&out imports and e!ports" M(B -5K &ranch has (urrently 5ollowing three *epartments 6eneral Ban'ing *epartment, Advances *epartment < 5oreign ,!change *epartment" #o open an account the customer has to meet the general &an'ing manager with an introducer" #he procedure &egins with the punching of account opening form to the customer file i"e" customerAs master file" Before closing any account, &an' send letter to the account hold for informing him that his account is going to &e closed" #here is need an approval form higher authority to close any account" (urrent deposits are those which are paya&le to &an' whenever demanded &y the In April 1??1, M(B &ecame

An Internship Report

customer"

Ban' does not pay any profit on current deposits" #he

following are the financial products7services of M(B Malay Mail -cheme, %=- Account, -aving 3:/ Account, (apital growth certificate scheme, 5und Management -cheme, Khushali Bachat Account, #erm7 5i!ed *eposits and others li'e night &an'ing, credit cards, traveler cheques" In remittance department li'e any other &an' M(B also have instruments for transferring of money, #elegraphic #ransfer, Mail #ransfer" In cash department &oth deposits and withdrawals go side &y side" #his department wor's under the accounts department and deals with cash deposits and payments" #his department maintains the following sheets, &oo's, and ledger of account cash received voucher sheet" (ash paid voucher sheet, %aying-in-slip, (hequeBoo', (ash &alance &oo'" #he clearing in Karachi at M(B or other &an's is &eing done through DI5# BDational Institute of 5acilitation #echnologyC" Ban' provides this facility to the people who need advance money to meet their requirement" %arty dealing with other &an's financial condition of &orrower &usiness and as a first step credit proposal is &eing made" M(B provides advances, which are two types" -ecured Advances, Unsecured Advances" M(B usually classified advances in to following types Agricultural Advances, (ommercial Advances Industrial Advances" (ommercial Advances are of following types *emand 5inance, (ash 5inance, 5oreign &ills purchased, 5inance against imported goods, 5inance against foreign &ills, ,!port 8efinance %art I B%re -hipmentC < others" Ban's Agriculture

An Internship Report

division deals with the agriculture advances" Ban' provides the Agriculture Advances in order to enhance and support the agriculture sector of the country" 5arm (redit < Don 5arm (redit" In foreign e!change, M(B is dealing 5oreign (urrency Accounts, 5oreign 8emittances, and 5oreign Bills for (ollection, Imports < ,!ports 5oreign currency accounts < the foreign currency department deals with the following types of accounts, *ollar Khushali account, (urrent account, -aving &an' account, #erm deposit, %rime (urrency -cheme" 5oreign accounts are converti&le on floating rate availa&le to the &an'" =etter 2f (redit facility is &eing provided &y M(B in foreign e!change"

An Internship Report

HISTORY OF BANKING
It has not so far &een decided as to how the word EBan'A originated" -ome authors opine that this word is derived from the words EBancusA or BanqueA which mean a &ench" 2ther authorities hold the opinion that the word EBan'A is derived from the 6erman word EBac'A, which means EFoint stoc' fundA" It is therefore, not possi&le to decide as to which of the opinion is correct, for no record is availa&le to ascertain the validity of any of the opinions" Ban'ing in fact is primitive as human society, for ever since man came to reali e the importance of money as a medium of e!change, the necessity of a controlling or regulating agency or institution was naturally felt" %erhaps it were the Ba&ylonians who developed &an'ing system as early as +... B(" I# is evident that the temples of Ba&ylon were used as EBan'sA &ecause of the prevalent respect and confidence in the clergy" At the time of independence, there were :31 offices of scheduled &an's in %a'istan, of which 419 were located in >est %a'istan alone" As a new country without resources it was very difficult for %a'istan to run its own &an'ing system immediately" #herefore, the e!pert committee recommended that the 8eserve Ban' of India should continue to function in %a'istan until 3.th -eptem&er 1?41, so that pro&lems of time and demand lia&ility, coinage currencies, e!change etc" &e settled &etween India and %a'istan" #he non-Muslims started transferring their funds and accounts to India" By the end of )une 1?41 the num&er of officers of scheduled &an's in %a'istan declined from :31 to ++/" #here were 1? foreign &an's with the status of small &ranch offices that were engaged
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An Internship Report

solely in e!port of crop from %a'istan, while there were only two %a'istani institutions, 0a&i& Ban' of %a'istan and the Australian Ban'" #he customers of the &an' are not satisfied with the uncertain condition of &an'ing" -imilarly the 8eserve Ban' of India was not in the favor of 6ovt" of %a'istan" #he 6ovt" of %a'istan decided to esta&lish a fullfledge central &an'" (onsequently the 6overnor-general of %a'istan Huaid-I-A am inaugurated the -tate Ban' of %a'istan on )uly 1, 1?41" #hus a landmar' was made in the history of &an'ing when the state &an' of %a'istan assumed full control of &an'ing and currency in %a'istan" #he &an'ing structure in %a'istan comprises of the following types" -tate Ban' of %a'istan (ommercial Ban' of %a'istan -aving &an's" (ooperative &an's -peciali ed credit institutions" (ommercial &an's have &een the most effective mo&ili ers of savings and have &een providing short-term requirements of wor'ing capitals to trade, commerce and industry" Up to *ecem&er 31, 1?93, there were 14 %a'istan commercial &an's that functioned all over the country and in some foreign countries through a networ' of &ranches" the following five &an'sI All these commercial &an's were nationali ed in )anuary 1, 1?94, and were recogni ed and merged into

An Internship Report

Dational Ban' of %a'istan Muslim commercial &an' limited 0a&i& Ban' =imited United Ban' =imited Allied Ban' of %a'istan #he state &an' of %a'istan is the (entral &an' of the country and was esta&lished on )uly 1, 1?41" #he separation of ,ast %a'istan and its repercussion in the form of economic depression has caused a lot of difficulties to the &an'ing system in %a'istan" #he networ' of &an' &ranches now covers a very large segment of national economy" #he num&ers of &ranches have increased apprecia&ly and there is now on &ranch of &an' for every 3... heads of population appro!imately" #here is done reasona&le growth in deposits from the esta&lishment of %a'istan" Besides this growth, speciali ed credit and financial institutions have also developed over the years" #he 6overnment of %a'istan in the late ?.As introducing the need for the privati ation of state owned &an's and companies" #he private sector has accepted the challenge and most of the &an's are privati ed today" #he -tate Ban' of %a'istan issues the shares of these periodically" Ban' employees and other common peoples can also purchase these shares and earn profit" #hroughout the period of &an'ing history the &an's have &een e!panding rapidly and achieved the desired goal of progress"

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An Internship Report

THE MUSLIM COMMERCIAL BANK LIMITE

History
M(B was founded &y I-50ADI and A*AM),, families in (alcutta on )uly ?, 1?49" M(B is not an overnight success story rather good trac' of services are responsi&le for the leaps and &ounds progress" where it commenced &usiness in August 1?41" After the partition of the Indo-%a' -u&continent, the &an' moved to *ha'a from In 1?/:, the Ban' transferred its 8egistered office to Karachi, where the 0ead 2ffice is presently located" #hus, the &an' inherits a /+-year legacy of trust in its customers and the citi ens of %a'istan"

CHANGE OF OWNERSHIP
#he performance government" In )anuary 1?94, M(B was nationali ed &y Bhutto 6overnment following the &an' act 1?94 su&sequently in )une 1?94 %remier Ban' =imited merged with M(B" of M(B was &adly affected &y &ureaucrat

PRIVATIZATION
In the late 1??. after long period of time newly esta&lished *emocratic 6overnment of %a'istan have decided to sell nationali ed assets of country for &etter utili ation" In April 1??1, M(B &ecame %a'istanAs first privati ed &an'" #he government of %a'istan transferred the management of the Ban' to Dational 6roup, a group of leading industrialists of the country &y selling +:J shares of the &an'"

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In terms of agreement &etween the 6overnment of %a'istan and the Dational 6roup, the group, ma'ing their holding /.J has purchased additional +4J shares" Dow, +/J is purchased &y the 6overnment, which shall &e sold in the near future"

NEW MILLENNIUM
M(B &esides &eing money financial organi ation have rendered invalua&le services in the economics and social developments of our country" M(B today, represents a &an' that has grown with time, e!perience and %a'istan" A maFor financial institution, in scope and si e, it sym&oli es a fully-grown tree" ,vergreen, -trong, and firmly rooted"

PHILOSOPHY
M(B relies on strong, lasting relationship with its customers and on its reputation for sta&ility and security for its continued process" Its philosophy has &een to adopt steady course" It has pursued small, less ris'y loans to consumers and &usiness, and shied away from ris'y loans" M(B e!tends its philosophy to its technology strategy &ut not perusing technology for technologyKs sa'e" 0owever, M(B learns from the mista'es of others especially in Lconsumer &an'ingL" >e let others get in first, ta'e the hit, and find out the flows" -aid M(B officials - and has installed efficient and effective system for processing and delivering information" #he &oard of directors has the authority in guiding Ban' affairs and in ma'ing general policies" -ome directors are the personnel of the M(B Ban' and others are successful &usinessperson and e!ecutives of other maFor organi ation" directors" Dineteen mem&ers are included in &oard of

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HEA OFFICE AT GLANCE

I" I" (hudrigor 8oad of Karachi has same importance in %a'istanAs economy as of the >all -treet in world economy" #he division wor'ing under M(B 0ead office are as followsI Administration (redit Management Investment Ban'ing 0uman 8esource Information #echnology (orporate %lanning < Budgeting 5inance < #reasury International *ivision Inspection < Audit =aw *ivision Mar'eting < *evelopment #rustee *ivision Under the %resident An ,!ecutive (ommittee and a (redit (ommittee wor's" All the matter of the &an' Foin to the &oard of director are presented to the e!ecutive committee which is responsi&le for daily operation of the &an' "#he request for credit e!ceeding the 6eneral Manager power is approved &y the (redit (ommittee" Under the area ,!ecutive is the 6eneral Manager who is the in charge of the (ircle 2ffice" Under the 6eneral Manager is the Monal Manager and then the
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Branch Manager" At present, there are ? circles, 49 regions and 14..N &ranches" Before privati ation there were provincial chiefs for all the four provinces" But this management now has a&olished the provincial officers and improved the efficiency of the &an'"

CIRCLE OFFICE
#he wor'ing of circle office is to control and regulate the functions of &ranches which are under in its control" #he functions of circle office is to mo&ili e the deposits and receive reports from &ranches" (ircle office is li'e a mini head office" Agents and correspondents of M(B are in all commercial cities of the world" (ircle office is divided in the following divisionI (redit Management Audit < Inspection 0uman 8esource Mar'eting < *evelopment Province %unFa& -indh Balochistan D>5% < A)K Circles ? / 1 + Region +9 1+ + 9 Branches 1+3 +91 3/ +3/

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PROMINENT FEATURES
-B% allowed e!porters o&tain foreign currency loans against firm contracts =7(s and M(B made arrangements for clients to use the facility at ,%M &ranch, Karachi and off--hore Ban'ing Unit, Bahrain for the purpose" It also offered services to clients for procuring foreign currency loans from a&road" #he other significant development is the launching of the M(B Imdad-eBahami -cheme for $0ousing ImprovementO in addition to commercial lending, M(B has accepted the responsi&ility to offer social lending" #he scheme, launched with the co-operation of the -wiss institution aims at providing easy credit to low income group is Ur&an areas to improve their living condition" 2ther %rominent features are as followI (ommittee -tructure 2rgani ational culture (ustomer -ervice Automation < Moderni ation International Appearance ,mployees Mgt 8elation 0uman 8esource

COMMITTEE STRUCTURE
M(B employs a very strong committee structure to oversee decision &y decentrali ed operations" 2fficers are given strict limit to authority" >ithin prescri&ed limit, officers do indeed ma'e their own decision- &ut

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according to guidelines, procedures, and rules" *ecision outside of prescri&ed limits are ta'en to high-level committees"

ORGANIZATIONAL CULTURE
2fficers of the &an' donKt need to spend a lot of time into whether they should consider issues or ideas" #hey Fust 'now their certain parameters &eyond which they wonKt go" #he employees in the organi ation are well dressed, well communicated and well co-operative" 2fficers learn what these parameters are through their e!perience with various committees-through a process osmosis" In visiting and in participating on committees, individuals get to see what their cohorts are doing" (ross - fertili ation of ideas occurs and, often, morale is helped" MaFor corporate policy changes occur through a process of involvement &y levels of management"

CUSTOMER SERVICE
%erhaps the most important yardstic' for testing the success oriented organi ation is in the area of customer services and it is in this very sphere that M(B have made the leading strides" #o eliminate delays in dealing with credit proposals, of which complaints were frequent is the past, an effective three lier system was introduced instead of si! lier system" Under this new system adequate sanctioning powers were delegated to Branch, 8egional and 6eneral Managers and also to the senior e!ecutives in charge of credit at the 0ead 2ffice" 2nly proposals

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e!ceeding their powers are now considered in the credit7e!ecutive committee" As a part of the new system, the role of the 0ead office was redefined from supervisory to supporting only the inspection division at the 0ead 2ffice now has a supervising role for ensuring the implementation of the Ban'As *irectives" #he new policy and the restructuring of the system had a two fold positive outcome" (ustomer were provided improved services and needed facilities" #he Ban'As e!ecutives and other staff come to possess a new sense of confidence and dignity in their Fo&s"

Automation & Modernization

#he proFect of on line &an'ing has &een successfully introduced and provides customer with the facility to operate from any &ranch in the networ', so for, more than 1. &ranches have &een connected to the M(B *ata Detwor' &etween7among Karachi, =ahore, 8awalpindi, 0ydera&ad, Multan and Islama&ad" #he &an' has installed a num&er of Automated #eller Machines BA#MC to provide +4 hours cash facility to its customer" A#Ms have &een installed at 4. &ranches in Karachi, =ahore and Islama&ad" #he networ' have &een e!panded to Multan and 5aisala&ad since 1??9" #he A#M at Karachi airport has also started functioning and those at =ahore and Islama&ad airport have &een inter-lin'ed in 1??9"

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Swift
#he &an' has also started replacing conventional tele! messaging system for fund transfer, =7( opening etc", &y connecting on-line with the world wide inter&an' 5inancial #elecommunication Detwor' B->I5#C" -o for, M(B has on line +. &ranches in Karachi, =ahore, 5aisla&ad, 6uFranwala and -ial'ot on ->I5#, to meet foreign correspondence requirement"

Human Resource
#he &an' has five special importance to the aspect of training and career planning of its staff mem&ers" 5orwards this main o&Fective, several training courses have &een organi ed initiating a self development process, in order to accelerate organi ational growth and to further improve the Ban'As level of e!pertise and efficiency" In 1??1, a total of /9: courses were conducted which covered a wide variety of topics connected with &an'ing and customer services" An aggregate num&ers of 1,99: staff mem&er participated" Additionally +4/ officers and e!ecutive too' part in training courses and seminars conducted &y professional institution, such as institute of Ban'ers Management Association of %a'istan, %a'istan Institute of Management and %a'istan Ban'ing (ouncil" ,ight e!ecutive also participated in courses conducted is foreign countries" #he M(B e!ecutive development centre, set up in Dovem&er, 1??/ for used attention an the development and grooming of our e!ecutives"

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,minent scholars and specialists were invited, during 1??:, to apprise our e!ecutives of new concepts and techniques to 'eep a&reast of the constant changes ta'ing place locally and glo&ally" A total of /4 seminars were held this year in which /11 e!ecutive participated"

International Appearance
After the closing down of the =ondon operations prior to privati ation, M(B was left with no foreign &ranches and operations" In 1??4 as planned the &an' opened up its international operations &y inaugurating its &ranches in *a'ha and (olom&o" More &ranches are operating in %ettah, -rilan'a and (hittagang" Access to Middle ,ast and Africa is in progress"

Employees Management Relation

#he employee management relations remained cordial" Up-to-now more than +?. offspring of the employees are inducted in the &an' as cashier and typists on merit &asis" ,!tensive training %8268AMM, for the employees continued to supplement their capa&ilities" #he management is inde&ted to the employees for sharing its vision and dream to ma'e M(B the &est Ban' of the country, that is client driven, preferred &y the customers and tested on the touch- stone of customer satisfaction"

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General Bankin g Department

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GENERAL BANKING
It is &ac'&one of &an'ing It is one of the maFor department of M(B" It consist of following departmentsI Accounts *epartment (urrent *epartment 8emittance *epartment (learing *epartment (ash *epartment

ACCOUNTS DEPARTMENT
,very transaction which ta'es place recorded in the computer so all transactions in different departments are forwarded to account department" -ince all vouchers from different departments are forwarded to current department so this department tallies all such transactions with current department after maintaining the ledger of each department" 5ollowing are different functions performed &y this departmentI %reparation of 5inancial -tatements for different time span Maintain all accounts of different departments (alculation of profit on different schemes (alculation of mar'up on different advances %reparation *ifferent types of reports for -tate Ban'

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*aily position of cash < every accounts Matching daily summaries of all departments with ledger

CURRENT DEPARTMENT
#his department maintains all formalities of the accounts and account holders li'e it account name, account holderAs name, code num&er and full address" *ifferent cheques de&it and credit voucher come form different departments li'e #o'en, (learing, 8emittances, (ash, 5oreign ,!change, Advances and posted against different accounts" A wor'ing )ournal called Manual is prepared daily which shown the &alance accounts of all parties" Mar'-up and profit are calculated daily" #hat would &e de&ited at credited from or to account holderAs account after specific period of time" Mar'up is de&it from the account after every three month profit is credited to accounts after every si! month" Dew accounts are also opened in this department" #he fund deposited in the M(B &an' can &e classified under the main headsI (U88,D# A((2UD# -APID6 A((2UD# #,8M 7(A== *,%2-I#-

ACCOUNT OPENING
#o open an account the customer have to meet the general &an'ing manager with an introducer Bthe person who is going go introduce that person in the &an'C and get an application form used for account

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opening" *ifferent color-coded application forms are availa&le for each type of account" Along with the form a card for specimen signature is also supplied to customer" Manager has every right not to accept this contract if he is not satisfied &y the details provided &y the customer" In case the contract is accepta&le to &oth, now it is ready to open the account formally"

Procedure
#he procedure &egins with the punching of account opening form to the customer file i"e" customerAs master file" #he manager records the necessary details into this register and allots an a7c num&er from this a7c opening register" #his register is maintained for each type of account and the a7c noAs are allotted serially" After opening a saving and current account every applicantAs data is entered into the computer to maintain a safe record and application form is properly filled so that it can &e availa&le when necessary" (hec'ing officer is responsi&le to #ele the manual application form with the computeri ed a7c opening file" 5or fi!ed deposit only that application form is needed which is prepared manually, &ecause most of the procedure of fi!ed deposit is done manually" #he signature specimen card contains three signatures of an applicant, applicant a7c no, a7c type, &ranch code, title of a7c, it will &e attached with an application form" Ban'er uses this card at the time when he receives the cheru&@ he compares customerAs signature with the signature on the cheru& for avoiding fraud"

ACCOUNTS TYPES

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Though in theory there many types of accounts but commonly account operators can be classified in one of the following categories, each have different documentation requirements:

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-ingle )oint %artnership %rivate =imited %u&lic =imited

SINGLE
2nly one person can operate this a7c" An individual who can fulfill the requirement of &an' can open this a7c" >e can call it a personnel or individual a7c" #he requirements for this type are Dational Identity (ard %hotocopy, Minimum *eposited Balance, Account 2pening 5orm, =etter of Kinship etc"

!OINT
In case of Foint a7c applicant mentions that how much person will operate the a7c" Instruction are given for Foint a7c such that the account shall &e operated &y anyone or more" #he requirements for this type are Dational Identity (ard %hotocopy, Minimum *eposited Balance, Account 2pening 5orm, =etter Kinship, Additional -ignature 5orm B5or )oint AccountC, *eclaration regarding the operator of account"

PARTNERSHIP
5or partnership a7c, along with the application form other requirements needs satisfied" #he requirements for this type are Dational Identity (ard %hotocopy, Minimum *eposited Balance, Account 2pening 5orm, 8egistration

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certificate, agreement among partners and (ommencement of &usiness and private registration, resolution of &oard of directors, commencement of &usiness, memorandum and articles of association and &alance sheet etc"

PRIVATE LIMITE
-uch type of account is opened in the name of the &usinesses having private limited concern and mostly medium &usiness enterprises open such 'ind of accounts" All the &oard of directors have to su&mit the declaration regarding the account operator on the company pad and with the ru&&er stamp with the signature of the all the mem&ers of the &oard of directors" In case of any change in directors &an' must &e informed regarding that" In case funds are &orrowed &y the company all the directors approval is necessary rather not only the authori ed partner who can &e the operator of the account"

PUBLIC LIMITE
%u&lic =imited A7( type of account is opened in the name of the &usinesses having %u&lic limited concern and mostly medium &usiness enterprises open such 'ind of accounts" All the board of directors have to submit the declaration regarding the account operator on the company pad and with the rubber stamp with the signature of the all the members of the board of directors. In case of any change in directors bank must be informed regarding that. In case funds are borrowed by the company all the directors approval is necessary rather not only the authori ed partner who can be the operator of the account.

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ACCOUNT CLOSING
#here are no" of reasons of closing an account can &e one of the following if customer desire to close his account, in case of death of one account holder, &an'ruptcy of the account holder and If an account contain nil &alance or not up to the requirement of rules" Before closing any account, &an' send letter to the account hold for informing him that his account is going to &e closed" #here is need an approval form higher authority to close any account"

CURRENT ACCOUNTS
(urrent deposits are those which are paya&le to &an' whenever demanded &y the customer" Ban' does not pay any profit on current deposits" #here are of different scheme of saving deposits, which are classified under different duration purpose and rate of interest" 5i!ed deposits are those deposits which are &y the &an' under the conditions that they will not &e paya&le on demand &ut will &e paya&le under fi!ed or determina&le future time date"

FEATURES
A sum of 8s" /..7Q in cash as initial deposit is required for opening a current account and the same may &e maintained as minimum average running credit &alance" Do profit will &e paid on credit &alances held in current accounts" #he &an' reserves the right to allow opening of current a7c at its description" All deposits and withdrawal from a current a7c will ta'e place only at the &ranch where the account is &eing maintained" (urrent a7c cannot &e overdrawn, e!cept &y prior agreed agreements with the &an'" #he correspondence relating to current A7(s

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should &e addressed to manager of the &ranch where the account is &eing maintained" A distinctive num&er will &e allotted to each current account and shall &e quoted on all correspondence relating to the respective account and at the time of ma'ing deposits and withdraws" #he account holder can draw sums from his account &y means of cheque supplied to him &y the &an' for that particular account" Account holder should ta'e well care of the cheque&oo's issued to them" #he account holder will pay e!cise duty of 8s"4 per leaf to the government"

PAY IN SLIP
#his slip is used for depositing the additional amount" #he &an' will accept the %a'istanis notes" All cheques and other instruments should &e crossed &efore they are deposited for credit into the account" #here shall &e no restriction on num&er of withdrawals in current account" #he account holder is e!pected to maintain a minimum running credit &alance of 8s"/..7" An account holder wishing to close his account must surrender the unused cheques to the &an'" #he current account is computeri ed, thus it generate the statement of account for all account holders periodically" Incidental charges are &eard &y the account holder if its credit &alance is less than 8s"/..7" -ervice charges of 8-" +.7Q will &e ta'en &y the &an', if an account is closed within : months from the date of its opening"

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Financial Products

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SAVING ACCOUNT
-aving accounts are opened on proper introduction with sums of credit &alance within certain limit for individual Bsingle, FointC institutions, companies, educational institutions etc" M(B has introduced various schemes under saving a7c are followingI Mala Maal -cheme %=- Account -aving 3:/ Account !apital growth certificate scheme 5und Management -cheme Khanm Bachat -cheme Khushali Bachat Account #erm7 5i!ed *eposits

MAAL"A"MAAL SCHEME
#his scheme is recently launched &y the M(B after severe financial crisis of year 1??1 created as result of atomic &om& e!plosion, to mo&ili e the deposits" It is the most profita&le scheme of the &an' and M(B has got 8s" +. &illion deposits through this scheme and the certificate is for 8s" +/...7-

Procedure
#he procedure of Maal-a-Maal certificate is very simple" #he applicant has to fill the slip of certificate where he have to write Branch code, ApplicantAs name, I* (ard Dum&er, Address, %hone R, *ate and tenure

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An Internship Report

etc" 5or different tenure different profit percentages are declared as show &elowI Tenure (Months #wo 5our ,ight #welve Rate o! Return (" 06 07 08 10

#hese certificates are automatically renewa&le after maturity" (opy of I* card is attached with certificate" %rofit is calculated at the time of drawing" At register, the officer writes reference or serial R, name of applicant, certificate R, date of issue and date of maturity" At Maal-aMaal certificate, the officer write date of issue, maturity date, reference R, and name of the applicant"

PROFIT # LOSS SHARING $PLS% ACCOUNT

#his account was started in 1?1.s after the issuing of &an'ing ordinance in 1?1. &y Mia 6overnment to develop Islamic &an'ing in %a'istan" In this case customer would &e responsi&le for &earing profit as well as loss" #he &an' would &e within its rights to ma'e investment of credit &alances in the %=- saving accounts in any manner at its sole discretion and to ma'e use of the fund to the &est of its Fudgment in the &an'ing &usiness under the %=- system" 5or withdrawal of larger amount, 9 days notice in writing is required to &e givenI Minimum &alance is 8s"/..7Q Below minimum &alance charges will &e de&ited Dot more than eight withdrawals in a year allowed

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An Internship Report

More than 8s"1/...7Q are not allowed to draw -even day notice is required for withdrawal %rofit calculated on monthly &asis %rofit paid on annually &asis %rofit paid on lowest &alance at the end 1.J >ithholding #a! on minimum &alance Ma'at deducted on S +"/J

SAVING &'( ACCOUNTS

#his account is newly developed of M(B and it provides fle!i&ility of saving account to &usiness people" %rofit on deposits will &e paya&le on daily product &asis on &alance of 8-" /..,...7- and a&ove" 0owever, if &alance in the account falls &elow 8-" /..,...7- on any day, the product will &e ignored" withdrawal from the account" #here will &e no restriction on Ma'at and withholding #a! is also

applica&le on the account opened under this scheme" Minimum &alance is 8s"/..,...7Q Below minimum &alance, profit calculation ignored %rofit calculated on daily &asis %rofit paid on annually &asis 1.J >ithholding #a! on minimum &alance Ma'at deducted on S +"/J

CAPITAL GRO)TH CERTIFICATE SCHEME

"ong term deposit #rofit rate as that of #"$ $aving Account

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An Internship Report

%inimum amount of deposit is Rs. &','''() Amount deposited double in of * years +o ma,imum limit of -eposits 1.J >ithholding #a! on minimum &alance Ma'at deducted on S +"/J

FUN

MANAGEMENT SCHEME

Rate of return upto &*. per annum /ffered to corporate and business community -evelopment of secondary market for 0overnment $ecurities 1.J >ithholding #a! on minimum &alance +o ma,imum limit of deposits Ma'at deducted on S +"/J

KHUSHALI BACHAT ACCOUNT

$aving type account Rate of return is 1. per annum #rofit calculated on daily basis #rofit paid on half yearly basis 2tility bills can be debited through this a(c +o charges will be debited for utility payments

KHANUM BACHAT SCHEME

-esigned to support small savings of people -epositing money for &' years +o return until &' year #ayments are made on monthly basis

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An Internship Report

+o limit for monthly payments After &' year return will be on fi,ed rates

TERM DEPOSITS
#erm deposits are fi!ation of certain amount of money for a specific span of time" #hese can &e of maForly two types i"e" short term notice deposits and long term notice deposits" *ifferent rates are charged for different period of times li'e as shown &y following ta&le" If presented &efore maturity then previous period rate would &e charged" Duration .1 month .+ month .3 month .: month .1 year .+ year .3 year ./ year Rate O! Interest 08.1% 10.1% 11.0% 11.5% 12.5% 13.3% 14.5% 16.4%

#he instrument term deposit is li'e a slip containing issuing &an' name, a7c R to operate on computer, deal R, customer name, reference R, date of issue, amount, rate maturity date etc"

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An Internship Report

CALL DEPOSITS
#hese call deposits are presented in the &idding process as guarantee or security from the &an' that this much money is deposited in the &an'" #hese are made in the favor the party offering contract or any other person" #he &an' offer no interest rate on it &ecause these can &e called at any time" 5or encashment the applicant must have to cancelled the call deposit instrument from its &eneficiary" 5or collection the &eneficiary usually send the authority letter for paying in the shape of *emand *raft or pay order" #he call deposit instrument containing the information regarding applicant and &eneficiary name, Foint name a7c opened, signature cards for encashment, reference R, amount, date of issue, authori ed signature etc"

/T34R #R/-2!T ( $4R5I!4$

The privati ation process for the e,pansion and diversification of economic activities in the country also demanded the introduction of new banking products. %!6 took initiative in this direction and for the first time %!6 devised and marketed new products and services with brand names to enter the varying requirements of its diverse customers. %!6 currently have following products or services in banking sector that are making it more prominent in the banking sector: Dight Ban'ing 5a! Utility (onsultancy -ervices #raveler (heques -elf -upporting -cheme Utility Bills (ollection

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An Internship Report

(redit (ards A#M

CONSULTANCY SERVICES
In the process of privati ation of public sector units, prospective buyers need professional assistance and %!6, with its e,pertise offers to their speciali ed service for valuation of the market value of the industrial unit, preparing bid documents and arranging finance for the purchase of the unit.

SELF SUPPORTING SCHEME

"oan for poor(needy people +o mark7up charged %a,imum amount of Rs. 8*,'''() %inimum amount of loan Rs. *,'''()

FAX utility
#ioneer to introduced 9a, for customer service. 9acilitates speedy transfer of funds. :ithin an hour any where in #akistan. !harges are debited to !ustomer account.

NIGHT BANKING SERVICES

To facilitate business community /nly in commercial trades centers premises !lients can make deposits upto 1:'' pm

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An Internship Report

-ate moved to ne,t for all such transaction

UTILITY BILLS COLLECTION

2tility bill collection for ma,imum customers /b;ective is to create interaction with customers !urrently &'*' branches are performing this ;ob

MCB RUPEE TRAVELERS CHEQUE

!an be a safest way to carry cash !heque is accepted at trade centers < branches +o need to be a(c holder for traveler cheques !heque is signed once when issued. 2pon delivering second signed are made In case of theft no fair to encash 6ut informing bank is necessary if thefted

ATM (Automated Teller Machine)

Minimum &alance of 8s" /..7Q Do charges are de&ited per transaction 2nly two hundred per annum de&ited

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An Internship Report

REMITTANCES
#he need of remittance is commonly felt in commercial life particularly and in every day life general" A maFor function of any &an'ing system is the transfer of funds from one client or one place to another" By providing this service to the customer the &an' earns a lot of income in the form of service charges" #his department deals with local currency remittance i"e" remittance from one city to another without actually carrying the currency" M(B uses following instrument for transferring of moneyI *emand *rafts B**C %ay 2rder B%2C #elegraphic #ransfer B##C Mail #ransfer BM#C

Demand Drafts (DD )

** is a written order given &y the &ranch of the &an' on &ehalf of the customer to other &ranch of the same &an' to pay the certain amount to the customer" ** are issued for the particular place other than place of issuance" A drafts is a (heque drawn &y a &an' on its own &ranch or any other &ranch of another &an' at a different place requesting it to pay on demand a specified amount of money which is already received to the person named on it" ** is of following two typesI

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An Internship Report

-- payable -- #aid $uspense a(c In the first type as advice reaches for payment the immediately pay to the customer while in later as ** presented &y the customer, it is paid and the suspense account is de&ited"

o*+,entat-on
A printed application form is provided for filling in completely and signing &y the applicant" After depositing an amount of draft and commission of the &an', duly completed and signed &y two authori ed officers, then it is handed over the applicant and credit order is dispatched to drawee &ranch" 5ollowing are the pre-requisites for the processing of **I Ban' -erial Do Do" of ** (entral Do #est Key 8s":. %ostage charges .".+J >ith holding ta!

Pay Order
5or this 'ind of remittance the payer must have the account in the issuing &an'" %ay order are more liquid as compared to cheques &ecause cheques may &e dishonored while %2 canAt &e" It is written order issued &y the &an' drawn and paya&le on itself" It is used for local

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An Internship Report

transfer of money from one person to another person" It is also used &y the pu&lic for depositing money with 6overnment or -emi 6overnment department"

OCUMENTATION
#he party who requires a pay order will get a printed application from the &an'" 0e will fill it and deposits the amount and commission" #he &an' charges are same as on demand draft" Ban' -erial Do" Do" of %2 (entral Do" .".+J >ith holding ta!

TELEGRAPHIC TRANSFER (TT)

In this case the authority is given from one &an' to other on the &ehalf of the customer through telecommunication to de&it their inter office account through them and credit their parties account mentioned in ##" It is an inter &an' transaction" #elegraphic transfer is an instant transfer of funds" #hrough this method applicant can transfer money from one place to another place" #here are two types of ##, Both types of ## are maintained in separate registers, test is applied &y the manager of every amount of ##" Incoming TT /utgoing TT

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An Internship Report

Applicant has to fill a form along with depositing amount to &e transferred and &an' commission" M(B charges the commission at the same rate as in the case of demand drafts"

o*+,entat-on
Issuing Branch Dame < (ode Beneficiary Branch Dame < (ode Do" of ## :. 8s %ostage and 14. 8s for 5a! Amount in words < 5igure .".+J >ith holding ta! #est 'ey

Mail Transfer (MT)

As the name shows, it is transfer of money in the shape of document through mail" %rocedure is li'e ##" #he transfer of funds from one place to another &y mail is called Mail #ransfer BM#C" #he M# can &e foreign or domestic" #he applicant who is desiring to remit the funds &y way of Mail #ransfer can either deposit cash or as' the &an' to de&it his7her account with the cost of M# including the &an' charges" #hese all measures are for safe transfer of funds"

o*+,entat-on
Issuing Branch Dame < (ode Beneficiary Branch Dame < (ode Dum&er of M#

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An Internship Report

Amount in words < 5igure .".+J >ith holding ta! #est 'ey

CASH DEPARTMENT
In cash department &oth deposits and withdrawals go side &y side" #his department wor's under the accounts department and deals with cash deposits and payments" #his department maintains the following sheets, &oo's, ledger of accountI (ash received voucher sheet" (ash paid voucher sheet" %aying-in-slip (heque Boo' (ash &alance &oo' (ash department is performing its Fo& completely through computers" #he following staff mem&ers are performing their duties with patience and hard wor'" 2nly two peoples are wor'ing in cash department named Mr" Ashraf 26-II and Mr" Arshad 26-III with one computer with them"

Cash Paid Sheet

#he only instrument that can &e used to withdraw an amount from an account is the (heque &oo'" Do payments are made &y another instrument" (heques can &e of two types, they may &e presented at the counter and encashed and the others are clearing or transfer cheques"

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An Internship Report

(ashier manually inspect the (heque for followingI -ignature < date (ross cutting *raweeAs a7c title Amounts in words < figures #wo signatures at the &ac' #he cheques should not &e stated as post dated" If in the (heque there may discrepancy regarding any of the aspects descri&ed a&ove the cheque is returned to the customer for rectification" 2n other hand if the cheque is valid in all respects, the cashier enters the necessary inputs in the computer and post the entry so that account &alance is updated" >hen cashier posts these entries, computer automatically display the &alance &efore posting the transaction amount, &alance after posting" #he cashier easily and quic'ly see whether the amount &eing withdrawn so e!ceed the &alance or within the &alance" If the amount does e!ceed the &alance then it is upon the discretion of the manager to allow an overdraft and not depending upon the customerAs reputation" If he does not allow an over draft, the procedure is repeated again as descri&ed for the mismatch of the signature (heque is return" #he detail of notes BcurrencyC is written on the &ac' side of the (heque" #he cashier at the same time maintain the $(ash Poucher 8eceived 8ecord -heetO" #hen once again inspect the signature of the customer cancellation mar' of chec'ing officer and stamp of $%2-#,*O is placed on cheque &efore hand over the cash to customer"

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An Internship Report

Cash Received
5or depositing the cash into customerAs accounts, there is need to fill in the paying-in-slip giving the related details of the transaction" #his paying-in-slip contains the date, a7c7no, a7c title, particulars, amount &eing deposited and details of the cash" #here are two portion of the paying-in-slip" #he depositor signs the one part of the paying-in-slip one is retained &y the &an' to show an acceptance of the entries made in the slip" #he different colored paying-in-slip are used for all the types of deposits" 2nly the slips related to a particular type of a7c is accepta&le &y the &an'" 5or e!ample current paying-in-slip for current a7c and saving paying-in-slips for saving a7c etc" #he paying-in-slip serves as a voucher to update to computeri ed transaction ledger" #he transaction ledger is only updated &y paying-in-slip and (heque" #he cashier responsi&le to receive &oth the paying-in-slip and cash from the depositor" #he cashier chec' the necessary details provided I the paying-in-slip and accounts the cash and tallies with the amount declared in the slip" If the amount does not tally with the cash given, the deposit is not entertained until the customer remove the discrepancy" 2n the other hand if the two amounts tally, the cashier fills in the $(ash voucher received 8ecord -heetO and assigns a voucher no" to &oth the transaction &eing made in the sheet and the slip" #his voucher no" starts with one and continue &y serial increments of one for each day till the closing of the sheet, the cashier fills the voucher no, an account, cash

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An Internship Report

day till the closing of the sheet" #he cashier fills in the voucher no, an account of, cash entry in the related type of a7c and he post his initials on &oth part of the voucher" #hen the cashier send &oth to the accountant who verifies all the entries in the two documents, if the entries in the two documents, if the entries in the two documents tally with one another, the accountant authenticates the two &y singing on the two documents and posting stamps on the slip" 2ne part of the slip is then returned to the customer and other is given to the computer operator" A very important chec' is that the dates mentioned into the two documents must &e the same" #he +nd cashier posts the transaction entries in computer ledger" #his ledger contains the a7c no, a7c title, voucher no, voucher date, transaction code, transaction amount" After posting these entries, computer display &efore posting &alance and after posting" 2n every transaction computer generates an output of transaction ledger" 0e assigns the stamp #%2-#,*O on the voucher to show voucher transaction entries are posted" (hec'ing officer receive this voucher and the compute output transaction ledge, he manually inspects the entries of ledger and voucher" If &oth are tallied, he then signs the ledger and put a mar' of cancellation on the voucher" After the verifications from the chec'ing officer, cashier receives the voucher"

CASH BOOK BALANCE

At the end of the wor'ing day cashier is responsi&le to maintain the cash &alance &oo'" #he cash &oo' contain the date, opening &alance, detail of cash payment and received in figures, closing &alance, denomination of government notes B(urrencyC" It s chec'ed &y

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An Internship Report

manager" #he consolidated figure of receipt and payment of cash is entered in the cash &oo' and the closing &alance of cash is drawn from that i"e" Opening Balance Of Cash + Receipts - Payments = Balance #he closing &alance of today will &e the opening &alance of tomorrow" #his department is one of the most important department of the &an'" All the &oo's maintained in this department are chec'ed &y officer"

!"4ARI+0 -4#ART%4+T
All the e!ternal functions of clearing are carried &y DI5# BDational Institute of 5acilitation #echnologyC while the internal operations are performed &y clearing department which would &e discuss later" DI5# is providing tremendous facilitation having error rate of ."3J" It is Fust li'e any courier service which ta'es the cheques of other &an's and delivers the cheques of that &ranch to it" (learing is a system &y which &an's e!change cheques and other negotia&le instruments drawn on each other within a specified area and there&y securing the payment for its clients through the clearing house" A clearing house is a general organi ation of the &an's at a given place, Its main purpose is offsetting the cross o&ligation in the form of cheques" >hen there are many &an's in the country each will receive a num&er of cheques drawn on other &an's, deposited within for collection" A clearing house is an organi ation where these cheques are &rought and the mutual claims of each &an' on the other are offset and

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An Internship Report

settlement

is

made

&y

the

payment

of

differences"

#he

representatives off all the &an's in %a'istan attend office of the &an' which is performing these duties of clearing house, on each &usiness day at a fi!ed time" #hey deliver cheques that their &an' may have negotiated and receive in e!change cheques drawn on their &an' negotiated &y other &an'" #he responsi&ility of smooth cooperation of the clearing function lies with the -tate Ban' of %a'istan" #he operation of clearing refers to the collection of cheques drawn on other &an's" #hese cheques may &e drawn on UB=, 0B=, DB%, or any other &an' of %a'istan" #he respective cler' collects all cheques and enter them in clearing 8egister" #hen he affi! a stamps on these cheques and sorts out cheques of different &an's and prepares" schedule for them" #hese cheques are sent to clearing house" -tate Ban' of %a'istan has e!tended the service of (learing 0ouse" M(B will receive all the cheques drawn &y other &an's" 5inally they e!change their cheques mutuality" M(B representative will give cheques of UB=, 0B=, AB=, DB%, and -B% to their representatives, and get the cheques drawn on M(B from these representative" 5urther they settle their account" -tate Ban' of %a'istan representative will wor' out the &alances and will settle their account from their &alances with -tate Ban' of %a'istan" #he amount of the cheques are credited in the account of depositor on the +nd or 3rd day" If the cheques are not returned it is under stood that all the cheques are honored"

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An Internship Report

Credit Department

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An Internship Report

A VANCES

EPARTMENT

It is another maFor department of the &ranch" Ban' provides this facility to the people who need advance money to meet their requirements" 5or getting the advances, the first step is the preparation of credit proposal" -ome principles of lending are considered whenever financing &eing is made" #hese principles areI (haracter (apacity (ollateral (apital (ondition

REQUIRED INFORMATION
An assessment of his &usiness a&ilities Accurate < up-to-date financial statements Mar'et reports a&out the &orrower %arty dealing with other &an's Dature and structure of &orrower &usiness Dames of proprietors, partners or *irectors *etail of companies associated with &orrower &usiness 5inancial condition of &orrower &usiness

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An Internship Report

PREPARATION PROPOSAL

OF

CREDIT

At first, a formal application for credit approval is o&tained from the party along with complete group position" #he parties credi&ility report is also o&tained from the &an's from which the party has &een doing the &usiness" #he party credita&ility report is also ta'en from the head office of #rade information *ivision" 5or o&taining credit, party has to su&mit the last two years Balance -heet and %rofit < =oss -tatement duly attested &ut authori ed auditors" If the party also involve in e!port or import &usiness then the &an' also consider the data of three years a&out imports and e!ports" #he (urrent and *e&t equity ratio is also calculated &y the &an'" #hen recommendations are made the type of data required to prepare the credit proposal is to &e gathered from different departments" -ome data is o&tained from the foreign e!change department" -ome data is o&tained from current account department and some data is availa&le in Advance *epartment" #he purpose for which the financing is required should &e e!plained very clearly" #he securities offered &y the party to the &an' is also evaluated" In case of pledging of the property in shape of land or &uilding the complete evaluation of the property should also &e attached" After all the requirements and necessary documents for applying for advances is fulfilled &y the party then, the case is sent to the (hief Manager for approval" If the manager find any discrepancies, he may write on these documents" If the credit limit is in his range, he may approve the party for credit" If the amount is e!ceeding the (hief

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An Internship Report

Manager send the case is forward to the (ircle 2ffice for approval and here the same procedure is repeated and if the credit amount is in the range of 6M, he can approve and if the credit amount is very large from (ircle 2ffice, the case is then sent to 0ead 2ffice and if it is a real &ig then is to &e decided &y Board of *irector" M(B provides advances which are two types" #hese are two types of advancesI -ecured Advances Unsecured Advances In secured advances, the &an' ta'es any security against the loans while in case of unsecured advance no security is ta'en &y the &an'"

ADVANCES TYPES
M(B usually classified advances in to following typesI Agricultural Advances (ommercial Advances Industrial Advances

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COMMERCIAL A VANCES
M(B divided the advances in to two maFor typesI 5und Based Don 5und Based In the fond &ase advances, the funds of M(B is involved and in Don 5und &ased only guarantee is given &y the &an'"

Fund Base Advance

M(B have following 5und &ase facilities of advance in its corporate &ranches" #he details of these types would &e later" #hese are as followsI *emand 5inance B*5C (ash 5inance B(5C 8unning 5inance B85C 5oreign &ills purchased B5B%C =ocal Manufacturing Machinery B=MMC %ayment against document B%A*C 5inance against imported goods B5IMC 5inance against purchase collection B5A(%C 5inance against foreign &ills B5A5BC ,!port 8efinance %art I B%re -hipmentC ,!port 8efinance %art I B%ost -hipmentC

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An Internship Report

,!port 8efinance %art II DEMAND FINANCE #his is a type of secured loan and demand loan never allowed without security" It is a type of long term financing" M(B also gives loan under the head of demand finance to individuals, industrial units commercial &usiness etc" CASH FINANCE In this, the &orrower gives a specific reason for the need of cash" M(B gives the facility of cash credit to &usiness" #he amount is passed through voucher and credit to the party account" Dormally .":. paisa per thousand is charged on daily &asis to customer" RUNNING FINANCE #hese finances as evident &y the name are given to the &usiness to meet their daily needs" #he mar' up is charged on daily &alances" #his type of advances are given to trade, commerce and manufacturing for general purpose" Dormally .":. paisa per thousand is charged is charged on daily &asis" It is drawn through (heque"

FINANCE AGAINST IMPORTED MERCHANDISE

#his type of advances are granted against the pledge of imported merchandise" #he goods imported are pledged &y &an'" Ban' pays all the charges to e!porter and customs and 'eeps the goods in its control" 2n payment from the client to &an', the &an' releases these goods"

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EXPORT REFINANCE PART-I PRE-SHIPMENT #his type of loan is provided &y the &an' to the customer at the rate of 1+J for the period of 1/. days" #he &an' provides this type of advance facility to those e!porters who have not enough money to ma'e shipment" #o promote the e!port, the government pursue the Ban's to provides loans to the e!porters" EXPORT REFINANCE PART-I POST SHIPMENT #his type of facility is provided to the customers who have enough amount of money to ma'e first shipment &ut not more" -o the &an' issues a loan to the e!porter, this financing is for period of 1/. days" 5inance is provided &y the -B% to e!porters for the purchase of raw material and for its processing pac'ing and shipment" #he mar' up rate currently set &y the -B% is 1+J" In case, if the party is una&le to ma'e the shipment within 1/. days of financing" #he party has to pay certain amount of finance as as'ed &y the -B% and after 1/. days the mar'up rate also charges up S :. paisa per thousand per day" -o usually e!porters tries to ma'e the shipment within the fi!ed period set &y the -B% which is usually 1/. days" EXPORT REFINANCE PART-II In this case the &an' after receiving the performance of years in e!port &usiness of the party the limit is set for a period of one year" 0ere the limit cannot &e set &y the terms pledged of the permission of the &an'" $INANCE AGAINST P%RC&ASE O$ CO''ECTION DOC%MENT #he &an' provides this type of advance facility to those e!porters who have not enough money to ma'e shipment" A &illB(heque, draft, etc"C

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may &e purchased &y the &an'" Ban' pays the amount to the client after deducting its commission" FINANCE AGAINST FOREIGN BILLS #his facility is given to the e!porter, If he needs an urgent money" Ban' also provides finance against the foreign &ills" 0e gives &ills of e!change to the &an' as a security and &an' send these &ills for collection and &an' gives money to he e!porter" FOREIGN BILL PURCHASE #he e!porter which are under =7( are also provided with the facility of loan" Amount is given to the e!porter after the approval of =7( &y the issuing &an'" 'OCA' MAN%$ACT%RING MAC&INER( #he &an' provides this facility to the &usiness man who wants to &uy the local manufactured machinery" =MM funds are provided &y the -B%" 8ate of mar'up for this type of loan facility is 1+J on this type of loan" PAYMENT AGAINST DOCUMENT Ban' ma'e the payment to party against document and upon e!pire date" Ban' receives &ac' money with mar' up in this type of lending" Upon receipt of the documents negotiated &y the sellers &an'" #he opening &an' ma'es sure that documents are according to terms and conditions of the credit"

Agriculture !redit
Ban's Agriculture division deals with the agriculture advances" Ban' provides the Agriculture Advances in order to enhance and support the

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An Internship Report

agriculture sector of the country" Agriculture advances are of the two types" #he types are as followsI

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An Internship Report

5arm (redit Don 5arm (redit

9AR% !R4-IT
#hese are the credits provided &y the M(B for the purchases of inputs for development of agriculture sector" 5ollowing are two main su& classes of 5arm (redit" %roduction 5inance *evelopment 5inance

#R/-2!TI/+ 9I+A+!4
#hese are short term loans" #hese loans are provided to farmers for purchases of different type of input, for e!ample, -eeds, 5ertili ers, %esticides" #hese loans are provided against personal guarantees or mortgage of land as a security" 8ate of profit for these loans is 1.J"

-454"/#%4+T 9I+A+!4
#hese are medium or long term loans" #hese loans are provided for the development of agriculture sector" Main purpose of these loans are to purchase instrumentI #ractors ImplementsB#rolley, #hresher etc"C Installation of tu&e-well %lanting of garden

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An Internship Report

#he loans are dis&ursed against security of land BmortgageC or any other security accepta&le to &an'" #he rate of profit for these loans is 11J to 19J"

+/+ 9AR% !R4-IT

-econd maFor form of agriculture advance is Don-5arm (redit" #hese loans are provided against mortgage of land as a security or pledge of equipment as a (ollateral security" #hese are medium or long term investment depending up the proFect" #hese loans are provided to &oost up agriculture sector to provide the sources of earning of foreign e!change as well as to provide employment to people" 5ollowing are the different types of small industries for which loans are provided to improve the economy of the countryI 5ish 5arm (attle 5arm %oultry 5arm *airy 5arm

$ecurities
Ban'ers lend money in the form clean advances against promissory note as well as secured advances against tangi&le and mar'eta&le" #hese reports are only valid M(B normally allow the advances to the customers against the following types of securitiesI Ban'ers =ien Mortgage

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An Internship Report

%ledges 0ypothecation

6ankers "ien
#his type of security is accepted in case of advances against share, life policies, &onds, ornaments and fi!ed deposits etc" It is type of most liquid security"

%ortgages
#here are two types of Mortgage" #hese are followingI 'egal Mortgage E)uita*le Mortgage =egal mortgage and equita&le mortgage are accepted in case of immova&le properties li'e land, &uilding and machinery etc"

#ledge
#his type of security is accepted in case of stoc's or raw materials" In a pledge, the &orrower has not right to sell the stoc's with the permission of &an'"

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An Internship Report

Foreign Exchange Department

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An Internship Report

FOREIGN EXCHANGE
0" ," ,vit states that $the means and methods &y which right to wealth e!press in terms of currency of one country are converted into rights to wealth in term of the currency of another country are 'nown as foreign e!changeO" ,ncyclopedia Britannic defines 5oreign ,!change as $a system &y which commercial nations discharges their de&ts to each otherO"

WHY?
Dature has granted its wealth unevenly Deed of Imports < ,!ports Because no international Money unit e!ists

IN MCB
#his department wor's li'e general &an'ing department with the difference that it deals in foreign currencies li'e U- BTC and %ound -terling, *utch Mar' B*MC, ,uro and )apanese Uen BUC" #his department deals with the following products7servicesI 5oreign (urrency Accounts 5oreign 8emittances 5oreign Bills for (ollection -elling of 6overnment (ertificates

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An Internship Report

Imports < ,!ports

Fo.e-/n C+..en*0 A**o+nts

#hese accounts can &e operated foreign national and %a'istani Dational" #he foreign currency department deals with the following types of accountsI *ollar Khushali account (urrent account -aving &an' account #erm deposit %rime (urrency -cheme 5oreign accounts are converti&le on floating rate availa&le to the &an'" #he account holder is free to operate the account" #o the e!tent of availa&le &alance, for remittance any where in the world in the world and for whatever purpose" 8emittances in any converti&le foreign currency can &e accepted, these remittances will however &e converted into U- T, pound sterling, *M and )apanese Uen at the ruling rate &efore crediting to these foreign currency accounts" #ravelers cheques, drafts, telegraphic transfers and pay orders are accepted for deposit" #he interest earned on these deposits Bsaving accounts and term depositsC is credited in foreign currency and is also remittal freely" #he interest earning is e!empted from income ta! and no Ma'at deductions are made from the account" #he &alances in these accounts are freely transfera&le anywhere" Do permission for the

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An Internship Report

remittances from -tate Ban' of %a'istan is required" #raveler cheques can &e issued to the e!tent of deposit in the account"

Term -eposit Accounts

Issued in U- T and sterling *uration of 3 months Interest in paid at maturity

-ollar =hushali Account

#his scheme is introduced &y M(B is 1??4" It is service oriented scheme is U- dollar (urrency" #his account can &e opened &y all %a'istani and 5oreign national residing in %a'istan or a&road"

Features
%rofit is paid on daily &asis" (onversion in 8s" 5rom dollar through 5,B(" Do restriction on num&er of withdraw Do *eduction of Ma'at < Income ta! Minimum &alance to open U- T 1.."

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An Internship Report

P.-,e C+..en*0 S*1e,e

%rime (urrency -cheme is a saving account of M(B which can &e opened for four types of currencies these are U- BTC, UK BtC, )apanese Uen BUC, *ouche Mar' B*MC" 8emittances from a&road traveler (heque, foreign currency notes and foreign e!change generated &y encashing 5,B( may &e deposited in these accounts"

Features
(an &e opened under single7Foint names -i! months profits are paid 5acility of 58,V notes and travelers (heque 5oreigner and 5oreign companies can open it %rofits is given in foreign currency Do restriction &y -B% to open it Do implementation of income ta! Do >ealth ta! and Ma'at deduction" A7c have the facility to ta'e loan in %a' rupees

FOREIGN REMITTANCES
8emittances to a&road through telegraphic transfer is remitted to the person to whom it is paya&le" Ban' charges 8s"/.7- as its commission" 5unds can &e transferee a&road either &y drafts and telegraphic transfer in U- dollar and pound -terling" 5or transferring money, (lient must give specific reason for sending money a&road" >ithout any specific reason and proper identification of person who is remitting amount,

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An Internship Report

&an' avoids to transfer money" -imilarly Money gram is used for inward remittancesI 5oreign Bills for collection 6overnment Bills for collection

Foreign Bill For Collection

(heques and drafts in any other foreign currency deposited &y account holders are sent for collection" If the cheques are drawn within the country i"e" Issuing Ban' is in %a'istan then they are sent to respective &ranches" If these cheques are drawn on other countries then these are sent to respective countries" M(B credits the accounts of account holder when these &ills are reali ed" Ban's credit his account with the same rate of that day on which the (heque was deposited with the &an'" Ban' charges 8s"1..7- as its commission and plus telephone7fa! charges if any"

GOVERNMENT CERTIFICATE
5oreign e!change department also deal with different certificates which are issued &y -B%, 62P#" of %a'istan" #hese are as followsI *ollar Bearer (ertificate B*B(C 5oreign (urrency Bearer (ertificate B5(B(C 5oreign ,!change Bearer (ertificate B5,B(C #he can &e &ought &y %a'istan and 5oreigners without any limit on their purchases" %ayment must &e in converti&le foreign currencies" #hese certificates are issued at par for a period of three years in

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An Internship Report

denominations

of

8s"/..,8s"1...,

8s"1.,..."

#he

5,B(

are

enchasha&le at any time" Upon enchasement

after one year , the

holder of 8s"1...7- certificate get a return of 8s"14"/ " After two 8s"31." #hese certificates can &e purchased &y ma'ing payment through foreign currency accounts held in M(B =td" #he 5,B( can &e purchased a&road &y paying in any converti&le foreign currency" #he profit earned on these certificate, Ma'at will &e deducted" A after selling these certificates amount is transferred to -#A#, BADK of %a'istan "Ban' not utili ed the funds which is received from customer upon conversion of * B(, 5(B( and 5,B(" Ban' charges 8s"/. upto 8s"1.... of value and .".1J over 8s"1.... or equivalent"

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An Internship Report

IMPORTS # EXPORTS
#o enter into an import or e!port enterprise an individual must follow the following steps, later I will discuss these in detailI 8egistration at (orporate =aw Authority Mem&ership with of (ham&er of (ommerce7association DI# R must &e o&tained from Income #a! Authorities Affidavit of not a government servant7 not &een &lac' listed -u&mit a photo copy of DI* along with the documents (ompany must have a foreign currency account in any &an' #he individual7company must have registered at ,%B #he e!porter7importer should have some party in contact

CLA Registration
#here are three types of &usiness, namely, %roprietorship, %artnership or firm, and (orporations" #he firms are registered at the office of 8egistrar of 5irms, where as the companies are registered at the office of (=A" *epending upon the ownership and capital structure the companies can &e classified as private limited or pu&lic limited" Before a company gets into the &usiness of import or e!port it must &e registered at (=A" 5or this purpose an application along with all necessary documents is su&mitted to (=A" #he necessary data must includeI #he companyAs name Initial &oard of directors

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An Internship Report

Dum&er of shares Address of companyAs office #he capital structure Dum&er of directors #he (=A will process the application and after approval it will issue a (ertificate of Incorporation, under section 3+ of (ompanies 2rdinance 1?14 BV= PII of 1?14C" 5irms registered at 8egistrar 2ffice are issued form E(A on their registration"

CHAMBER OF COMMERCE
It is essential for an importer7e!porter to &e mem&er of some recogni ed cham&er or association" Dormally the importer or e!porter is mem&er of (ham&er of (ommerce, however, mem&ership of other cham&ers or associations li'e A%#MA, A%BUMA, etc" is also accepta&le" #he importer7e!porter applies for mem&ership along with admission fee of 8s"1.. and annual su&scription" After the serenity the cham&er or association issues a mem&ership certificate" #he following information is required to &e given along with application" Dame of individual or firm < Address Dame of directors or partners %articulars of &usiness Import or e!port registration num&er Dational #a! Dum&er Ban' certificate Bphoto copyC Dational Identity (ard copy %hoto copy of form ( from registrar

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An Internship Report

Income Tax Office.

According to the rules the importer7e!porter has to pay various ta!es in the national e!chequer, li'e income ta!, corporate ta!, with holding ta!, sales ta!, super ta!, etc" 5or this purpose he must possess a national ta! num&er BD#DC" If the individual7company is already paying income ta! then the D#D would have already &een allotted" 0owever, a new e!porter7importer individual or company would require fresh D#D" Income ta! return for registered firms" Income ta! return for companies" *ocuments required for o&taining D#D areI (opy of Dational Identity (ard =ist of e!isting &an' accounts (opy of certificate of registration (opy of partnership deed (opy of certificate of incorporation D#D Bfor verification onlyC

EXPORT PROMOTION BUREAU

#he most important part of the process of import7e!port is registration with ,%B" Before registration of ,%B, all the a&ove mentioned steps must &e completed" 5urthermore, a foreign currency account must &e opened at some &an', dealing in foreign currency" An affidavit must also &e provided &y the e!porter7importer that he7she is notI 6overnment -ervant

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An Internship Report

Blac' =isted #he application to ,%B is processed &y the &an' on &ehalf of e!porter7importer" #he application form to &e filled in &y the importer7e!porter" A fee of 8s"1/.. for e!port and 8s"1/3. for import registration must also accompany, which must &e paid through pay order" After registration at ,%B the importer7e!porter is permitted to start with his7her &usiness of e!port or import"

TRA-4 T4R%$
#here are many different methods in vogue for the transfer of title of shipment in the import7e!port &usiness" #hese methods are internationally recogni ed terminologyAs and descri&e the responsi&ility of &earing cost and ris' involved during transportation" #hese terms are &riefly descri&ed &elowI

Ex-Works
It means that the sellerAs only responsi&ility is to ma'e goods availa&le at his premises7factory" 0e is not responsi&le for loading the goods in a vehicle provided &y the &uyer, unless otherwise agreed" #he &uyer &ears full cost and ris' involved in &ringing the goods from there to the desired destination" #his term represents minimum o&ligation for the seller"

Delivered Duty Paid (DDP)

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An Internship Report

It signifies ma!imum o&ligation for the seller" >hen followed &y words naming &uyerAs premises, it denotes that seller has to &ear all costs and ris's till the goods are made availa&le at &uyerAs premises" If some costs are to &e e!cluded these must &e clearly mentioned e"g" $e!clusive of value added ta!O"

Delivered at Frontier
#he sellerAs o&ligations are fulfilled when the goods have arrived at the frontier &ut &efore customers &order" %rimarily used with rail or road transport, this term may &e used regardless of planned means of transport" BIn practice it is seldom used when goods travel &y air or &y seaC"

Free on Board (FOB)

#he goods are placed on &oard a ship at the sellerAs cost" #he ris' of loss and damage is transferred to the &uyer when the goods pass the shipAs rail"

Cost and Freight (C&F)

#he seller must pay the cost and freight to &ring the goods to named destination, &ut the ris' of loss or damage is transferred to the &uyer when goods pass the shipAs rails"

Cost, Insurance & Freight

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An Internship Report

#he seller must pay the cost, insurance and freight to &ring the goods to named destination" #he seller has to procure the insurance against the ris' of loss or damage"

Freight Carriage Paid

#he seller pays the freight for the carriage of goods to the named destination" 0owever the ris' of loss or damage is transferred to the &uyer when good have &een delivered into the custody of the first carrier"

Freight Carriage & Insurance

In addition to cost and freight the seller must pay for the insurance to &ring the goods to the named destination" #he seller has to procure insurance against the ris' of loss and damage"

Free Alongside Ship

#he sellerAs o&ligations are fulfilled when the goods are placed alongside the ship on the quay" #he &uyer has to &ear the cost and ris's form that moment including clearing the goods for e!port"

Ex-Ship
#he seller has to ma'e the goods availa&le to the &uyer on &oard the ship at the destination, &earing full cost and ris' of &ringing there"

Ex-Quay
#he seller ma'es the goods availa&le to the &uyer on the quay BwharfC at the destination, &earing full cost and ris' of &ringing the goods there"

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An Internship Report

FOB Airport
#he seller fulfills his o&ligation &y delivering the goods to the air carrier at the airport" #he ris' of loss and damage is then transferred to the &uyer"

FREE ON RAIL/TRUCK/CARRIER
#hese terms have similar implications as 52B, e!cept that these are used with rail or truc'" #he term has &een designed to meet the requirements of modern day transport as container carried &y trailer or ferries" #he seller fulfills his o&ligations when he delivers the goods into the custody of the carrier at the named point" At that time the ris' of loss and damage is transferred to the &uyer"

LETTER OF CRE IT
#he mar'eting of merchandise in foreign involves a long period of time, the seller or e!porter may &e una&le to carry the &urden of financing, such a lengthy transactions for he may not wish to tie up his capital for such a long period" It is the assurance of the &an' that the payment would &e made on completion of transactions in terms of =7(" #he terms of credit could &e documents against payments B*%C or documents against acceptance B*AC"

TYPES OF L/C
#here are several methods for ma'ing payment of an import or e!port transaction" #hese are listed &elowI

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An Internship Report

Irrecoverable "etter /f !redit

#he issuing &an' BimporterAs &an'C gives a lasting underta'ing to accept and pay &ills drawn upon it, to the e!porter, upon fulfilling the terms and conditions stipulated in the =etter of (redit B=(C" It gives complete protection to the e!porter"

Recoverable "etter of !redit

#he issuing &an' BimporterAs &an'C can modify the =( without any o&ligation on its part" #hese are usually not accepted &y the e!porters"

!onfirmed "etter of !redit

#his 'ind of =( has the protection of the credit standing of the importerAs as well e!porterAs &an's" #he e!porterAs &an' which confirms this =(, ta'es full responsi&ility of ma'ing payment if the importerAs &an' fails to do so"

2nconfirmed "etter of !redit

#hough the issuing &an' gives a commitment to honor the drafts, however, it does not give any guarantee" 5rom the e!porterAs point of view confirmed irrecovera&le =( is the &est form of receiving payment"

Modes of Payment
#here are four modes payments which are as followsI *eferred (redit -ight (redit

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An Internship Report

Acceptance (redit Degotiation (redit

-eferred !redit
#he draft is issued &y the importer and presented to the &an' &y the e!porter along with documents B&ill of loading, invoice, and insuranceC" #he payment is made &y the &an' on maturity of draft"

$ight !redit
#he draft is issued &y the importer and presented to the &an' &y the e!porter along with documents B&ill of loading, invoice, and insuranceC" #he payment is made &y the &an' if it finds the documents correct"

Acceptance !redit
Ban' confirmed that document have &een received and payment would &e made within certain time period"

+egotiation !redit
#he issued =7( can discounted at any &an' and got the amount money that he required against the =7( issued &y the &an'"

SHIPPING CLEARANCE
Import or e!port license is no more required for clearance at customs" 2nly requirement is to have registration ,%B as importer or e!porter" #he imported or e!ported goods must confirm to the trade policy" #he goods have &een categori ed asI

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An Internship Report

+egative "ist
6oods not permitted to &e e!ported or imported e"g" old machinery, old tires, e!port of antiques, o&scene and sectarian literature, etc"

#rohibited( Restricted 0oods

#hese items can &e imported or e!ported &ut su&Fect to certain conditions e"g" &oilers, medicines, animals, seeds, arms and ammunition of certain &ores"

Procedures
#he import and e!port &usiness is not also a profita&le &usiness &ut also, it helps in improving countryAs economic condition" #o improve our countryAs &alance of payments we must concentrate upon increasing e!ports" #hough the specific procedures might differ from product to product, the maFor steps follow the same line" #he 'nowledge of such li'e process would &e useful for an M(B in the practical field"

I%#/RT$
>hen the goods arrive at port or dry port, the importer will file the Bill of ,ntry giving the detail of imports, Palue of imports, 8ate of duty <#ariff" (ustoms appraisal officer will carry out an assessment of goods according to the rules7tariff manual" *epending upon the assessment following ta!es will &e remitted &y the importerI (ustom duty &ased upon ad valorem, specific rate or &oth" -ales ta! - 1/J of ad valorem N custom duty" >ith-holding ta! 4J of ad valorem N custom duty N sales

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An Internship Report

ta!" 8egulatory duty as imposed &y the government from time to time under the power of customs act"

4>#/RT$
#o dispatch the shipment, the e!porter will su&mit shipping &ill" #he customs appraisal officer will e!amine the goods for correctness of declared description, value, and claimed duty draw&ac'" #hereafter the goods will &e allowed for shipping"

Pre-Shipment

nspection

>hen a &an' confirms letter of credit it only guarantees that the payment will &e made after shipment" In other words it assures shipment &ut relies on e!porter to ship the goods descri&ed in the document" #o prevent losses due to su&standard shipment, the importers, nowadays, rely upon pre-shipment inspection agencies for inspection and appraisal of goods" 2ne e!ample of such company is (2#,(0DA" #hese companies help the importer in esta&lishing correct value of goods prior to shipment"

REBATES, CONCESSIONS & DUTY DRAWBACK

#he government gives incentives to the importers and e!porters in the shape of concessions and re&ates7 duty draw&ac'" 5or e!ample concessions have &een given to the importers ofI

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An Internship Report

1.J duty without sales ta! in #e!tile Machinery *uty e!empted up to 3..M> %ower %lants =eather Machinery < other ,!port oriented 6oods -ome concessions are provided on freight as recently it has &een provided to the te!tile sector S +/J on the e!port of non quota woolen and sil' products from e!port development fund"

-uty -rawback
>hen some raw materials are imported from a&road, the ta!es are paid upon them as part of import policy" If this raw material is consumed in manufacturing of e!ports, the government compensates the e!porter &y refunding the ta!es Bpreviously collectedC, in the shape of duty draw&ac'" #he rates of duty draw&ac's are announced &y the government from time to time" 5or e!ample recently duty draw&ac' rates have &een announced for te!tile industry"

Procedure
After the e!port remittances have &een released &y the &an', the e!porter will send application to the re&ate section of the custom department" After carrying out assessment, the (heque is issued &y the treasury department of customs" Dow the government has announced t allow the commercial &an's to process the duty draw&ac' claims and ma'e payments within the laid down parameters"

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An Internship Report

#he steps involved in any international trade transaction are enumerated here" #he %a'istan Importer places an order with the 4"/ e!porter and as'ed the American if he would &e willing to ship under "(!. #he U- e!porter agrees to ship under a =7( and specifies relevant information such as prices and delivery terms" %ower %lants #he %a'" Importer applies to M(B for a =7( to &e issued in favor of the U- e!porter for the merchandise the importer wishes to &uy" M(B issues a =7( in the %a'" ImporterAs favor and sends it to the U- e!porterAs &an', the Ban' of Dew Uor'" #he &an' of Dew Uor' advises the U- e!porter of the opening of a =7( in his favor" #he U- e!porter ships the goods to the %a'" Importers on a common carrier" An official of the carrier gives the e!porter a &ill of lading" #he U- e!porter presents a ?.-days Bsuppo!C draft drawn on M(B in accordance with its =7( and the &ill of lading to the &an' of Dew Uor'" #he U- e!porter endorses &ill of lading so title to the goods is transferred to the Ban' of Dew Uor'" #he Ban' of Dew Uor' sent the draft and &ill of lading to M(B" M(B accept the draft ta'ing possession of the documents and promising to pay the now accepted draft in ?.-days" M(B returns the accepted draft to the Ban' of Dew Uor'" #he Ban' of Dew Uor' tells the U- e!porter that it has received the accepted &an' draft, which is paya&le in ?. days"

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An Internship Report

#he e!porter sells the draft to the Ban' of Dew Uor' at a discount from its face value and receives the discounted cash value of the draft in return" M(B notifies the %a'" Importer of the arrival of the documents" 0e7-he agrees to pay M(B shipment" In ?. days M(B receives the importerAs payment, so it has funds to pay the maturing draft" In ?. days the holder of the matured acceptance BIn this case, the Ban' of Dew Uor'C presents it to the M(B for payment" M(B pays" in ?. days" M(B releases the documents so the importer can ta'e possession of the

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An Internship Report

Swot nalysis

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An Internship Report

S)OT STRENGTH
M(B is the first %a'istani privati ed &an' and &ecause of its quality management, mar'eting, innovation in products and services" 2wing to all such factors they have esta&lished a good reputation in the &an'ing mar'et" #he name of M(B ma'es you recall the highly cooperative and professional individuals ready to serve you with ma!imum est" M(B have faster &an'ing services that are ma'ing it more prominent in the &an'ing industry especially in operations and 5oreign e!change" #he customer prefers this &an' not only &ecause of its faster speedy service rather due to reasona&le service charges" M(B in %a'istan is the also in the list of highly automated &an's li'e ,mirates &ecause of its modern style of &an'ing through fully computeri ed control and twenty four hour &an'ing" #he Foining of e!perienced people, advanced management, advance setup and facilities gave M(B an edge over its competitors" eal and

WEAKNESSES
#he maFority of people are not well aware a&out the products of M(B" #herefore it should advertise e!tensively especially 8#( and Master (ards" A &ehavior has &een noted that &an' tries to feel at ease with good loo'ing, rich and educated people and the poor loo'ing customers feel

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An Internship Report

some &it strange in the environment of the &an'" #he &an' employees should try to accommodate &ehaviorally all type of customers" In M(B there is lac' of speciali ed s'ill &ecause of Fo& rotation policy of human resource department" #he &an' should concentrate upon increasing its a&ilities on individual service &asis"

Mismanagement of time is another &ig mista'e in M(B &ranches, the &an' official time of closing is /I3.pm &ut due mismanagent of time allocation and wor' the staff is normally on their seats till 9I.. or 1I.. cloc'"

OPPORTUNITIES
As on *ecem&er 31, 1??1, si!ty-eight scheduled &an's with ?,1.: &ranches are operating in %a'istan" As on this date, total population of %a'istan is 14.".3 million" #otal num&er of personal accounts with all scheduled &an's as on *ecem&er 31,1??9, are +1"?1 million" If we consider the population statistics of wor'ing age group as on *ecem&er 31,1??9, it stands to the figure of ?:":4 million" #hus we can say those +1J of wor'ing age people of %a'istan are having accounts with &an's while 9+J are un&an'ed" #he need of privati ation has made people to switch to &an's to satisfy their needs of lending and &orrowing" #his not only increases the deposits &ut also the credit &usiness"

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An Internship Report

THREATS
(hange in government policies have affected the &an'ing &usiness" -till &an's have to wait to get permission of state &an'" #he free ing of foreign currency accounts is a vital e!ample of letting people not to trust on &an's" #he (ompetition has &ecome severe &y the entrants of so many &an's, -o to e!ist one will have to prove himself in its services through e!cellent management and will have to satisfy its shareholders" 2therwise he will &e out the mar'et" #he decrease purchasing power of consumer in the current economic situation of the country affecting the &usiness activity speed too much and the result is the low investment from the investors in new proFects can create pro&lem for the &an' &ecause it is wor'ing a lot in trade"

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An Internship Report

Suggestions

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An Internship Report

SUGGESTIONS
Ban' must let potential customers 'now that all attractions for &an'ing e!ist" #his is done &y advertising on television and o&taining press coverage, in conFunction with direct mail, window displays, leaflet in &ranches and in appropriate other locations Bsuch as hotels, shops, etc"C and including leaflets in statement of accounts sent to e!isting customers in the hope that they will tell potential customers a&out the services provided &y our &an'" 5inancially unsophisticated people might feel &an' accounts, cheque &oo's, credit cards, etc" are difficult to understand and to 'eep control thereof" -ome personal sector customers prefer not to come to &ranch" #hey increasingly want to deal with the &an' in other ways, such as home &an'ing or use of Automated #eller Machines BA#MsC, which need to &e at the &ranch or some important shopping pla as" It is widely 'nown that there is a su&stantial Blac' ,conomy in %a'istan, >here people earn income that is undisclosed to the revenues authorities" %ayments for goods and services in the &lac' economy are necessarily in cash, &ecause transactions &y cheques are more li'ely to &e e!posed to the revenue authorities" -ome people will therefore avoid &an' accounts to preserve secrecy of earnings" 2ne way to retain the personal sector customers is to offer a wide range of services such as ta! advice, free life insurance equivalent to amount deposited, shares portfolio management, fund management facility, etc", complimentary to the core services" Ban's must have a slightly different mi! of services" Ban's must have a slightly different mi! of

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An Internship Report

services and mean of providing these such that customers can choose the mi! that suits them &est" Argua&ly, there has &een a little encouragement from &an's to persuade people to open a &an' account" 2pening hours are restricted, and there is a commonly held &elief that &an's operate for their convenience and not for the convenience of the customers" A logic leads to promotional campaign through employers who are customers of the &an's and their employees are paid in cash" -uch &usiness accounts should &e encouraged to open the accounts of their employees with the &an's" It might &e worth offering free &an'ing for a specific period to new accounts or simply pu&lici ing the services availa&le &y means of posters at the employerAs premises" It might &e possi&le to attract another type of personal customers through &usiness accounts, namely directors and denier employees, etc" Again an incentive pac'age could &e put together" #he &an's may choose to ma'e its e!isting products distinctive or to introduce new products" It is often easier to &enefit from adverse changes made &y other &an's than to attract customers &y innovations" A short term promotional technique is to offer price incentives, for e!ample, low interest rates on advances or limited issue high profit &earing term deposits" =onger term, a =oss =eader may &e offered" 5or e!ample, profit &earing current accounts are not very lucrative &ut any &an' can not afford not to offer these" #he reduced profits can &e augmented &y profits made on other products"

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An Internship Report

It is also possi&le to attract7retain personal customers &y investment in new technology li'e A#Ms and #elephone Ban'ing facilities, which made the services quic'er, easier, cheaper and more fle!i&le"

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