Internship Report On MCB Bank Limited: Introduction of Banking Industry What Is Bank?

Internship Report on MCB Bank Limited
Introduction of Banking Industry

What is Bank?
By G.W. Gilbert, o "A banker is a dealer in capital or more properly a dealer in money. He is an intermediate party between the borrower and the lender. He borrows from one party and lends to another." Under Banking Companies Ordinance 1962, {S: 3(B)} o "Banker means person transacting the business of accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheque, draft, order or otherwise and includes any Post Office Savings Bank." Banking is one of the most sensitive businesses all over the world. Banks play very important role in the economy of a country. Banks are guardian to the assets of the general stacks. The banking sector plays a noteworthy role in a modern world of money and economy. Evolution of Commercial Banks in Pakistan o The country started without any worthwhile banking network in 1947 but witnessed exceptional growth in the first two decades. At the time of independence, there were only two banks, which were incorporated in undivided India and whose owners were Muslims; they opt to shift their Head Offices in Pakistan and with the founding of SBP, the other banks also came into existence and by 1973 number of banks increased to fourteen in Pakistan. Commercial Banking in Pakistan: o Commercial banking in Pakistan can be divided in three phases and Commercial banks operating in Pakistan can be divided into four categories: o Nationalized Commercial Banks (NCBs), o Privatized Banks, o Private Banks o Foreign Banks.
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Pre-Nationalization Phase o There were only two Muslim banks in Indo Pak before partition one of them was Habib Bank Ltd. (establish in1941 at Bombay) and second was Australia Bank Ltd. (establish in 1944 at Lahore). Firstly at time of independent Reserve Bank of India was acting as central bank for both countries and same currency notes were used in both countries. But Reserve Bank of India was unfair. After that some steps taken which built a strong banking industry in Pakistan these are here under: o o o o Establishment of State Bank of Pakistan (SBP) on 1st July, 1948. Establishment of National Bank of Pakistan in November, 1949 SBP Act (1956) Banking Companies Ordinance 1962
Nationalization Phase
o In 1974 all Pakistani banks were nationalized through Nationalization Act 1974. Under this law all Pakistani banks became a public property. All small banks were merged in bigger banks to create 5 major Pakistani banks Pakistani banks. These banks were to control by Pakistan Banking Council. There are still controversies about this act of government as whether it contributed in success of failure of banks. Post Nationalization Phase o In 1990 the government decided to denationalize all the nationalized institutes. For this purpose, amendments were made to Nationalization Act 1974 and two nationalized banks were privatized. Along with this a permission to open banks in private sector was also granted. The rules regarding establishment of new banks and for incoming foreign banks were also relaxed.
Introduction of MCB Bank Limited MCB is one of the top banks of Pakistan with a deposit base of Rs. 368 Billion and total assets over Rs.500 Billion. Incorporated in 1947, MCB soon earned the reputation of a solid and unadventurous financial institution managed by emigrant executives. In 1974, MCB was nationalized along with all other private sector banks. The Bank has a customer base of approximately 4 million, a nationwide distribution network of over 1,000 branches and over 450 ATMs in the market. Vision Statement o To be the leading financial services provider, partnering with our customers for a more prosperous and secure future. Mission Statement o We are a team of committed professionals, providing innovative and efficient financial solutions to create and nurture long-term relationships with our customers. In doing so, we ensure that our shareholders can invest with confidence in us. Values of MCB Bank Integrity o We are the trustees of public funds and serve our community with integrity. We believe in being the best at always doing the right thing. We deliver on our responsibilities and commitments to our customers as well as our colleagues. Respect o We respect our customers values, beliefs, culture and history. We value the equality of gender and diversity of experience and education that our employees bring with them. We create an environment where each individual is enabled to succeed. Excellence o We take personal responsibility for our role as leaders in the pursuit of excellence. We are a performance driven, result oriented organization where merit is the only criterion for reward. Customer Centricity 3

o Our customers are at the heart of everything we do. We thrive on the challenge of understanding their needs and aspirations, both realized and unrealized. We make every effort to exceed customer expectations through superior services and solutions.
Innovation o We encourage and reward people who challenge the status quo and think beyond the boundaries of the conventional. Our teams work together for the smooth and efficient implementation of ideas and initiatives. Business Volume Corporate Information MCB Bank Limited is Public Limited Company listed on Karachi, Lahore & Islamabad Stock Exchanges in Pakistan, under license number BCD (1) 17-66 dated 8th December 1966 and its external Auditors KPMG Taseer Hadi & Co. (Chartered Accountants) total number of shareholders - as of December31-12-2009 is 691,104,527. Historical Overview Formation: o MCB (formally Muslim commercial bank limited) Bank Limited completed his 64 years in the field of banking quite successfully. MCB was formed in 1946 in Calcutta. The registered office of the bank transferred to Karachi in 1948. Achievements: o MCB Bank Limited won Best Bank in Pakistan Euro money awards seven times in 2000, 2001, 2003, 2004, 2005, 2006 and 2008, Best Domestic Bank in Pakistan five times 2004, 2005, 2006, 2008 and 2009, Asset award Best Domestic Bank in Pakistan 2009 and Euro money awards Best Bank in Asia 2008. Change of Name: o The name of bank has been changed from Muslim Commercial Bank Ltd to MCB Bank Ltd.
Shifting of Head Office: 4

o In 2008 the head office of MCB was shifted to Lahore in a newly constructed building, namely MCB House, located at Jail Road, from Karachi.
Products and Services

During my stay I observer that a large verity of products and services are offer by
the MCB Bank and I will explain in detail these services and product as functioning of commercial bank. Main Products and Services Deposit
o
Bank accepts deposits which are maintain by the bank in different kinds of accounts. MCB bank offers these accounts for depositing the funds.
Current Account o MCB Bank offers a variety of current accounts to cater to the everyday transactional needs of various customers. Savings Account o MCB savings accounts offer attractive profit rates as well as flexibility to transact. Terms Deposit o MCB Term Deposits offer attractive short to mid-term investment options with flexibility, convenience and security. Loans and Advances o Banks grant loans to the spenders so MCB bank also grant different kids of loan to different customers Consumers Loans: o MCB bank offer loans for personal use to the individuals or group of people it will be granted on the incomes of the desired individuals. 5

Commercial and Corporate:
o MCB also offer commercial loans to the individual and group of people it will granted on the in three ways as under: Hypothecation: In this case ownership and possession in names and hands of client. o Pledge: In this case ownership and possession in names and hands of bank. o Mortgage: In this case ownership in names of bank but possession in hand of client.
o
Running Finance: o It will be issue on hypo bases and personal guaranty is required for it.
Running Finance Instant: o It will be issue on pledge bases and personal guaranty is required for it. Cash Finance: o It will also issue on pledge base pledge and personal guaranty is also required for it. Cash for Cash: o It will also issue on pledge bases but in this case pledge assets must be liquid and personal guaranty is also required for it. Demand Finance: o It will be issue on mortgage bases and personal guaranty is also required for it. Others Products and Services MCB Visa Credit Card o MCB offers a complete suite of Classic, Gold and Platinum Visa Credit Cards focusing on providing, superior service, travel privileges & shopping pleasure. MCB Smart Card o MCB Smart Card is the key that enables access to convenient banking services. MCB Rupee Travelers Cheque 6

o Rupee Travelers Cheque, being the market leader, is the most widely accepted way to pay cash for travel-related purposes. MCB ATMs o MCB has one of the nation's largest ATM networks with over 450 ATMs and still growing. MCB Mobile ATM o MCB Mobile ATM not only provides world class banking service but also provide convenience. MCB SMS Banking o SMS anytime to get information regarding balance, mini statements and credit card related information once your card is linked. MCB Mobile o MCB Mobile is a quick easy and secure way to recharge mobile phones, transfer money, pay bills and do much more. MCB Call Center o Theres no easier way to bank than the new enhanced 24/7 MCB Call Center, which blends innovation and convenience to provide Banking Services that go beyond expectations. MCB Investment Services o MCB Investment Services offer distribution of mutual funds managed by the leading fund managers of Pakistan MCB Advisory Services o MCB also provide financial advisory services, commercial structuring support and access to capital resources to help companies successfully finance their business/project. MCB Lockers o Lockers of different capacities are available nationwide. MCB Banc assurance o MCB Banc assurance has created a one-stop shop for all your financial and insurance needs. MCB Local Rupee Drawing Arrangement 7

o Transaction Banking Department at MCB provides Local Rupee Drawing Arrangement, a product for small banks and financial institutions. MCB Home Remittance o MCB Home Remittance provides a faultless inflow of foreign remittances credited in the beneficiarys account within minutes. MCB Quasi Equity/Hybrid Instruments o MCB places a group of debt that has some uniqueness of equity such as being unsecured, subordinated or with a budding equity upside. MCB Equity Capital Raising o MCB offer capital for their clients by offering common or preferred equity to public or private investors, through initial public offers, offers for sale, rights issues and private equity placements MCB Islamic Banking o MCB Islamic Banking provides Reba Free and Sarah Compliance services to a variety of customer segments
Functions of MCB Bank Limited Finance system of the bank: o The financial system of MCB Bank primarily consist of two pillars which are also may be components of other commercial banks financial system. o A Simple Chart of finance system is as under:
Finance System
Depositors: Households Business Firms Foreigner Government
Borrower: Households Business Firms Foreigner Government
Accepting Deposits: o The main primary function is to accepting the deposits from customer it is also main source of funds for bank. There are different types of accounts on which deposits are accepted by bank. o These are the component of financial system which termed as severs or lender in finance system of MCB Bank: o Households o Partnership firms o Public/Private Companies o Financial Institutions/ Banks o Foreigner o Government/ SBP Granting Loans: o The another function is to granting loans to borrower or spender for use it is also main source of income for the MCB Bank like other commercial bank. There are different types of loans which granted by the bank.
These are also components of financial system of MCB Bank and termed as borrower or spender: o Households o Partnership firms o Public/Private Companies o Financial Institutions/ Banks 9

o Foreigner o Government/public project financing A broader approach of MCB Bank Limited financial system can also include source of funds and allocation of funds. This approach is more prominent then above one. Here under is a chart is given:
Financial System
Sources of Funds: Depositors Shareholders Financial institutions State Bank of Pakistan
Allocation of Funds: Loans Advances Securities Others
Sources of Funds Depositors: o Like all commercial bank deposits are main source of MCB Bank and recently in 2009 total amount of deposits are 363,258,355, 000 rupees. There are different types of deposits which as under:
Types of Deposits Fixed deposits
In Rupees 62,651,531, 000 10

Saving deposits Current accounts Margin accounts Others Total amount 173,797,078, 000 123,898,324, 000 2,910,655, 000 767, 000 363,258,355, 000
Shareholders: o Equity is also main source of funds for MCB Bank and recently in 2009 equity is rupees 6,911,045, 000. Financial Institutions: o MCB Bank another sources of fund is financial institutions and in recently 2009 total amount of financial institutions deposits are rupees 4,346,356, 000. Interbank transactions are also a valuable source under the head of financial institutions. State Bank of Pakistan: o SBP remains the source of funds for all commercial bank and MCB Bank can also can utilizes the funds from SBP which is lender of last resorts for all commercial bank. Allocation of Funds Loans: o MCB bank allocate the funds for profit generation it is also proved to be the best items in funds allocation and recently in 2009 total markup earns through it is rupees 36,212,097, 000. Advances: o Short-term loans are also a valuable source of incomes so MCB Bank also allocating the funds in it. These may include: o Cash Credit o Overdraft o Discounting of bills o
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Securities: o MCB Bank also makes investment in securities and in recently 2009 total earning from investing in securities are rupees 13,894,162, 000. Others: o MCB Bank also allocates his funds many other activities for generating revenue these may include: o Repurchase agreement o Interbank transactions o Project Financing Electronic Data for Decision Making
MCB Bank has good IT based information system which is used for decision
making so it enhance the overall capabilities by providing information timely and accurate. MCB use different MIS and KMS software for communication purpose all over the Pakistan within its branches and with SBP Bank. o Examples o During my stay I observe that such activities are made on the base of electronic data which are maintained by the branches or CRCD officer. o Granting loans o Blocking limits o Removal of discrepancies
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Organizational Structure
Introduction o To the best of my knowledge and from different sources here under structure of Management of MCB Bank is explained below. Chairman o Mian Mohammad Mansha Vice Chairman o Mr. S. M. Muneer President / CEO o Mr. M.U.A. Usmani Chief Financial Officer: o Mr.Salman Zafar Siddiqi
Principal Office:
o MCB 15 Main Gulberg, Lahore

Registrars and Share Registration Office:
o MCB 15 Main Gulberg, Lahore M/s. THK Associates (Pvt.) Limited State Life Building No.3, Dr. Ziauddin Ahmed Road, Karachi
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Hierarchy of Management Here under hierarchy of MCB Bank Limited is listed in downward integration (from upper to lower chain of command)
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Corporate Profile 15

Names Board of Directors Mian Mohammad Mansha Mr. S. M. Muneer Mr. M.U.A. Usmani Mr. Tariq Rafi Mr. Shahzad Saleem Mr. Sarmad Amin Member Dr. Muhammad Yaqub Mian Raza Mansha Dato' Mohammed Hussein Mr. Aftab Ahmad Khan Mr. Abdul Farid Bin Alias Mian Umer Mansha Mr. Muhammad Ali Zeb Audit Committee Mr. Tariq Rafi Dr. Muhammad Yaqub Dato' Mohammed Hussein Mr. Aftab Ahmad Khan Mr. Muhammad Ali Zeb Mr. Malik Abdul Waheed Human Resources Committee Mian Mohammad Mansha Dr. Muhammad Yaqub Chairman Member 16 Chairman Member Member Member Member Member Chairman Vice Chairman CEO / President and Member Member Member Member Member Member Member Member Member Member Member Designations

Mian Raza Mansha Mr. Shahzad Saleemn Mr. M.U.A. Usmani Risk Management & Portfolio Review Committee Mr. Shahzad Saleem Mr. Tariq Rafi Mr. Sarmad Amin Mian Raza Mansha Mian Umer Mansha Committee on Physical Planning, IT System & Contingency Arrangements Mr. Sarmad Amin Mr. S. M. Muneer Mr. Tariq Rafi Mian Raza Mansha Mr. Abdul Farid Bin Alias Mr. M.U.A. Usmani Business Strategy & Development Committee Mian Mohammad Mansha Mr. S. M. Muneer Mr. Shahzad Saleem Mian Raza Mansha Dr. Muhammad Yaqub Dato' Mohammad Hussein Chairman Member Member Member Member Member 17 Chairman Member Member Member Member Member Chairman Member Member Member Member Member Member Member

Mian Umer Mansha Mr. M.U.A. Usmani Member Member
Critical Analysis Risk framework: 18

o MCB Bank has good risk framework a Risk Management & Portfolio Review Committee is in place which has five members including chairman of the committee. This committee is responsible for developing risk frame work according to the guidelines of SBP.
o
Currently a centralized framework is apply by the MCB which is comply with the guidelines of SBP I will discuss in detail where it applied for risk mitigation of all types of risk faced by the bank in this dynamic environment. Here under all types of risk which faced by the bank. Risks faced by the bank
Systematic Risk: o In finance terms systematic risk are market risk, aggregate risk, or undiversifiable risk, is the risk associated with aggregate market returns. This risk should not be confused with systemic risk because risk of loss from some shattering event that collapses the entire financial system. Unsystematic Risk: o In Finance terms unsystematic risk are specific risk, idiosyncratic risk, residual risk, and diversifiable risk these are the company specific risk in a portfolio which is uncorrelated with aggregate market returns. Here under some of these risk are as under:
Credit Risk:
o MCB face credit risk it arises from dealings with individuals, corporate, financial institutions, sovereigns etc. o Market Risk: o MCB face market risk which arises from changes in market rates such as Interest Rates, Foreign Exchange Rates and Equity Prices etc. Liquidity Risk: o MCB face also liquidity risk it terms as the ability to fund assets and meet obligations as they become due. Operational Risk: o MCB also face operational Risk such as loss resulting from an inadequacy or a failure ascribable to people, processes, technology or external events.
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Compliance Risk: o MCB also face the compliance risk that is similarity between the company policies, rules, and charges etc with SBP guidelines. Reputational Risk: o In my opinion MCB may not facing reputational risk that is past bad conducts by the bank and has good reorganization among the all commercial banks which are operating in Pakistan. Security risk: o MCB and its employees also face security risk it is a risk being occur illegal activities of individuals or group from and outside the organization. Security system Above mentioned security risk is mitigate by establishing a security system. In head office where I work has two components of the security system which are as under: Security Guard: o In place of MCB where I spend my six weeks in training has a security department, security guards are hired for mitigating the security risk. MCB Computerized Card: o Every one in head office has a computerized card on which his detail are printed but also it serve as security code that without it every door is closed for you because a chip is in place in this card. Management Information System
MCB has good information system in place which provides information needed to
manage organizations effectively. These are regarded to be a subset of the overall internal controls procedures in a business, which cover the application of people, documents, technologies, and procedures used by management accountants to solve business problems such as costing a product and service.
MCB use MIS system all over the Pakistan between his branches maiming
SYMBOLS and naming FOCUS within CRCD. These are ORACLE based software.
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Employees Integrity
Integrity of employees is significant and the most important element because
without it the business owner cannot count on receiving the results expected and promised. MCB has proper code of Ethics and conduct signed by all the employees acts as a guide for them in discharging their duties and sets out the standards of good banking practice. In MCB Bank high degree of good governance, transparency, culture of excellence and accountability as well as ensuring the highest level of professionalism. Controls and Compliance is an integral internal function and care is taken to ensure that all activities are carried out in accordance with prevailing regulations so that the interests of all our stakeholders are protected. Loaning system
Here under the procedures used by the MCB Banks for advancing loans to the
customers here under:
Customer:
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o A customer is a person which want to obtain loan from bank he contact with the loaning and advances officer in branch where his account is open. A customer can be a consumer, commercial or corporate.
Branches:
o MCB has large number of branches all over the Pakistan these initially response to customer and also has direct contact with the customer. They fill the all necessary file work with the customer normally these documents are obtained: o LAF (Loan Application Form) o BBFS (Borrower Basic Fact Sheet) o CBI (Credit Information Bureau) o CNIC (Computerized National Identity Card) o In Case of Consumer, Incomes Statement of the Consumer and collateral documents are also obtained. o In Case of Commercial and Corporate Partnership Deed, Memorandums of the Company, Financial Statement from approved auditor and collateral documents are also obtained
Approving Authority: o After completing the necessary requirements branches forward these documents
to the approving authority. These documents are checked by the authority and forward to the legal department.
Legal Department:
o In this department legal aspect of loan is covered and activities like checking or reviewing the legal owner of the collaterals are performed. Credit Risk Control Division o After the legal department all the activities are performed by the CRCD and loan issuing order is made after reviewing, maintaining documents and control after the loan. o All the original documents are again reviewed by the DU.(Document Unit) o IB Forms (Islamic Banking Forms) are prepared by the DU.(Document Unit) o On the bases of AOF(Approval of Finance) which is issued by the approving authority a FAL(Facility Advising Letter) is prepared by the MU (Monitoring Unit) o Then three set of FAL and IB Forms are sent by CRCD with the help of CSU (Customer Services Unit) to branches and original documents are sent to the CU (Custodial Unit). o These three sets are one for customer, second for branch and third for the CRCD which is also placed in CU. o After the signature of customer set of these document are retained by the each party. 22

Loan Granted:
Finally loan granted by the bank after completing these process DAC (Disbursement Authoring Certificate) is issued by the approving authority and sent by the CSU to branches then branches release approved amount. Risk Mitigation Approaches
MCB Bank has good credit risk management framework and also mitigate his risk
by his RMG Risk Management Group. Risk mitigation is start when a customer contacts any branch but MCB develop centralized risk mitigation approach. Here under the introductions of RMG. Risk Management Group (RMG) o The main purpose of RMG is to actually manage the companys risk. Risk management is a structured approach to managing uncertainty through, risk assessment, developing strategies to manage it, and mitigation of risk using managerial resources. The RMG GROUP consists of four divisions that work under it. These are as follows: o Credit Review Division o Credit Risk Management Division o Credit Management Division o Credit Risk Control Division I would be briefly discussing each of them one by one. However my part of internship will be all about the Credit Risk Control Division which I would be discussing in details.
Credit Review Division (CRD) o The purpose of this department is to review the credit proposals accompanied with audited financials of both corporate and commercial clients evaluated by the business units. The major tasks of the CRD include:
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o Financial statement analysis including profit and loss analysis, financial statement analysis and Balance sheet analysis o Credit risk rating of the client o Drafting of various convinance ( conditions of loans) within approval of finance considering the macroeconomic situations and risk level of client o Finally issuing the approval finance
Credit Risk Management Division (CRMD) o The basic purpose of CRMD is to ensure policy making regarding credit risk within the risk management, issuance of circulars on time to time as well on need basis. They are responsible to draft policies, manuals, salvage lists and various risks frameworks required for the implementation of Basel II parameters
Credit Management Division (CMD) o It is basically responsible to report data to SBP. They are responsible to run various data modules for checking and implementing functions of unique obligor. They are responsible for the integration of various MIS management function systems working simultaneously within the various divisions and groups of the bank. They had also developed credit risk management information system in order to enhance the regulatory requirements of central banks as well as developing the reports required for the analysis by the senior management and BODs. Credit Risk Control Division (CRCD) 24

o A Sub-division of Credit Risk Management Group with a function of mitigating risks associated with credit facilities granted to customers
Plan of internship program
I have completed my 6 week Internship program in 4th floor of MCB House CRCD
(MCB 15 Main Gulberg, Lahore). A Sub-division of Credit Risk Management Group with a function of mitigating risks associated with credit facilities granted to customers Vision of Credit Risk Control Division o High Quality Support o Exercise independent control of Post Approval activities o Maximize automation & minimize human errors o Centralized approach 25
Hierarchy of CRCD o The CRC has 5 major internal units which are the following: o Take over unit (TU) o Customer service unit (CSU) o Documentation unit (DU) o Monitoring unit (MU) o Custodial unit (CU) About Internship Program My Internship started from 01-11-2010 to 13-12-2010 and I perform my work assignments in the following units of CRCD explained
These are main activities are performed by me discussed below with main
concentration on CRCD as my department of internship:
Customer service unit (CSU)

o
In this unit of CRCD I spends one week from 01-11-10 to 07-11-10 working are performed by me is as under:
o Collection of documents from external agencies o Record Keeping of each document in the system o Scanning of documents 26

o Forward documents to related CRC units o Keep track of all documents within CRC o Final delivery of documents to CU o Delivery of soft copies to respective branches
Monitoring unit (MU)

o
In this unit I spend my three weeks from 08-11-10 to 28-11-10 and working are performed by me are as under: o Prepare FAL after getting approval o FAL includes limit amount, pricing, securities being offered and other covenants o Review of Stock Reports & insurances & Issuance of DAC in collaboration with DU o Database Management of different branches o Monitoring of insurance and stock reports o Pledge being monitored by Business Units o Correspondence with business units via Unit Exception Report (UER) & Tickler Report (TR) for removal of discrepancies and renewals of stock reports and insurances. o Block limits after 60 days if the discrepancies are not removed or renewals are not obtained o Block limit immediately if insurance policy is expired or missing and/or limit is expired
Custodial unit (CU)

o
In this unit I spend only one week from 29-11-10 to 05-12-10 and working done by me in this unit is as under: 27
o Placement of documents in folders o Record maintenance in Safe Custody Register (SCR) o Stamping of blank IB forms o Payment & record keeping of IB forms o Maintain & Keep files of insurance policies and stock reports o Record and place securities marked with lien o Record and place valuation search & credit reports o Release of securities after fulfilling all formalities o Handling vault keys o Maintenance of records regarding stocks of computers, printers & scanners o Folder purchase / Issuance record Documentation unit (DU)
In this unit I spend my last one week of internship from 06-12-10 to 13-12-10 and
these activities are performed by me are as under:
o Review of property as well as security documents of all branches at their initial take-over o Initial check of Customers Application, BBFS & CIB before approval o Correspondence with Legal Affairs Division for their opinion and comments on all security documents o Review of A/c & issuance of DAC in collaboration with MU
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SWOT Analysis
For a better strategic management, organizations need to go for scanning the
internal as well as the external sources on which the overall business lies. The first and the foremost concern of the organization are to see its internal capabilities and the things which can be the problem in achieving their targets, goals and aims. I conduct the SWOT analysis of the MCB Bank and my findings are here under explained. Strengths o o o o o o o Safe and secure investments venture Innovative and new technology adapter Employee Satisfaction Well Equipped and fully secure environment Modernized banking (online + Internet) Complete supervision at every level Business continuity management and implementation of advance model under Basel II
Weaknesses o Weak organizational culture (need a paradigm shift to improve organizational structure) o HR Policies (appraisal, compensation, career planning) o Networking problems regarding ATM o Weak MIS interconnectivity among the Division o No mobile ATM services in rural areas Opportunities o Information Technology (MIS) o Establishing more Foreign Branches o Local Setup should be expanded. 29

o Internet Banking o Some more innovative products and services should be introduced. o Centralization Threats o Downsizing is potential threat for MCB employees and they are losing their confidence towards bank performance o Fierce competition o Changing environment of banking o Instable Govt., economical and political conditions are a great threat. o Entrance of international banks o Latest MIS is available in market whereas MCB is capitalizing in symbols Conclusion The work within each unit is not divided properly when an employee is absent another employee (who is already over burdened by own job) is given absentees whole work instead of dividing it among employees. Accommodate management is required. Internees are not considered part of the organization so are not allotted as such assignments. Theres no proper arrangement for guidance of internees. Working hours are quite long; mostly employees have to sit even after the office hours to complete their work. (E.g. branches suddenly overburden them for there clearances and they have to manage it) Inefficiency of IT department (At times system software is not in working order which causes delay in work, and IT is not efficient to help) Rotation on duties without proper training No refresher courses No merit of selection of employees as well as no specific job description and job specification
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Recommendations Following are my suggestion to improve the efficiency for the development of the economy Work load should be equally divided among the employees Accommodation should be properly managed. Internees should also be considered part of the organization, and should be given some practical work as well in order to give them a more detailed knowledge regarding work. To maintain the confidence of employees, management should take necessary measures to increase the pay scale of employees, such as providing more facilities and bonuses. IT department should be made efficient. Computer software should be well maintained and monitored in order to prevent delays in work. Software problems should be managed. Refresher courses must be conducted in order to train the employees. Recruitments should be strictly on merit basis and induction should be after proper and extensive training. Proper attention should be paid to upgrade customer services especially in rural areas. 31

Bank should adopt the global organizational banking structure to meet the international standards of banking sector.
Appendices Detail of Working A comprehensive detail of all activities performed in the CRCD with reference to CRC Manual are given below which also contains all appropriate guidelines for the staff of CRCD. I am just explaining the overview of these working. Activity #1
Introduction o It is to be ensured that all securities / security documents are taken from branches to a centralized place and are kept with CRCD in a fireproof safe. This activity is performed in order to minimize risk of bank by properly monitoring the securities / security documents. CRC Responsibility o CRC has been vested with the responsibility of visiting different branches according to the size of their portfolio. Take Over unit intimates the branch it intends to visit and get details of its borrowers. TO unit takes physical possession of all securities / security documents and bring them to CRCDs regional office for the safe keeping. CRC vault will be under the supervision of Custodial Unit, which will also keep track of movement of any document from the safe custody by entering the documents in Document Movement Register. 32

Process Flow o CRC Officer TO team has to visit different branches and collect original securities / security documents from there. After scanning all relevant documents, TO team hands over the soft copy to respective BU and brings back original documents to CRCD central / regional office. TO team then gives charge of all documents to CU for safe keeping. Activity # 2
Introduction o The purpose of this activity is to ensure that all securities / security documents taken from branches are intact as per Approval of Finance/banks credit policy and Prudential Regulations of State Bank of Pakistan. This activity minimizes risk of bank by properly reviewing the securities / security documents so that whenever bank needs to take any default/write off case to the court, it may be able to do it properly on the basis of strong documentary proof. CRC Responsibility o CRC has been vested with the responsibility of reviewing securities / security documents of each facility of all borrowers of take over branches. Review Team of DU prepares Detailed Review Report (DRR) of each customer mentioning the discrepancies in its securities / security documents. Once the review of a branch is completed, Unit Exception Report (UER) of that branch is updated and sent to it via courier. Process Flow o CRC Officer of Review team of DU collects original securities / security documents of borrowers of take over branches from CU. They review each document thoroughly and prepare DRR of each client. Once the document is reviewed, the same folder is handed over back to CU and the DRR is updated in UER that is further sent to branches for rectification. Activity # 3
Introduction o Customer Service Unit is responsible for handling of all documents that are received from BU for CRC processing. CSU keep track of these documents 33

within different units of CRC and once the documents are processed, the same are send to CU for custody. This activity minimizes the risk of documents from being misplaced. CRC Responsibility o For all taken over branches CRC Officer CSU keep track of movement of documents within different units. Process Flow o CRC Officer CSU has to receive the Dak and distribute the documents to different units after recording and scanning them. The record of the documents given to units is maintained to avoid misplacement. After the documents have been processed, the CSU has the responsibility of delivering it to the CU for safekeeping. Activity # 4
Introduction o Unit Head - Documentation is required to add comments on SF-86 (Page 3) regarding the availability of AOF, BBFS, CIB Report and other exception that are appearing in Unit Exception Repot (UER). The State Bank of Pakistan has laid down minimum requirements for obtaining credit information, such as Credit Information Bureau Reports and Application of Finance along with Basic Fact Sheet. Obtaining of CIB & BBFS by CRC has been made mandatory by Credit Risk Management Division vide their Circular # PO/GEN/CPMD/176 Dated 03.07.2006 and Ref # CPD/04 Dated 26.05.2006. CRC Responsibility All outstanding issues/discrepancies in UER as well as AOF, BBFS, CIB Report for the account to which proposal in process will be added in SF86 on Page 3.
Process Flow o CRC Officer Documentation has to review the issues and give comments on Page - 3 of SF - 86 under Supervision of Unit Head - Documentation. o If CIB is not clean, write comments on SF-86. 34

o If BBFS/ LAF not complete, CRCD will not accept and will not sign SF_86. Activity #5
Introduction o Facility Advising Letter is to be issued at the time of facility being extended as Fresh, Renewal, Enhancement, and One-off basis or Extension in validity for getting acceptance of various terms & conditions relating to credit facilities as were requested by the client and were approved by the competent authority. The FAL is to be issued in terms of requirement of Credit Policy / Credit Manual and any amendments there on. CRC Responsibility o CRC is required to prepare the draft of FAL after taking in to account the approval terms and other conditions relating to each facility being extended to the client. The draft is to be got okayed from the BU before its final print out. The FAL is jointly signed by CRC and BU. Two copies of FAL must be sent to the client for acceptance. Execution from the client is the responsibility of the BU. Process Flow o CRC Officer Monitoring Unit will prepare the draft of FAL after consensus with BU under supervision of Unit Head Monitoring Unit. For extension in validity Interim FAL will be issued. Activity # 6
Introduction o These are Standard Formats provided by the bank duly vetted by Legal Affairs, which are called IB- Forms (Islamic Banking Forms). These formats are used for various types of facilities, details of which have been enumerated in Para 6 here under. Unit Head Documentation will review the request of the business unit for determination of documentations whether it falls under the category of standard documentation or non-standard documentation.
35

CRC Responsibility o CRC Officer Documentation is vested with the responsibility to prepare the standard documentation as per finance facilities approved and accepted by the client BU shall elevate the request for preparation of standard documentation by CRC. Process Flow o All documentation is prepared at Marked up price by applying SMR (Standard Mark-up Rate). Purchase Price is calculated by applying following formula: o RF/CF = (Principal x Standard Mark up Rate x No of Days/365) o DF = Principal + {Principal x Mark up Rate x (Total Installment +1)} ------------------------------------------------------------------------------2 x No of Installment in a year
Activity # 7
Introduction o In all cases where standard forms are not available, non standard documentation will be used on need basis in respect of the requirement of finance facilities. It may include Mortgage Documents, Finance Agreement, Charge creation documents or any other document which is required to comply with the terms of the approval. All these documents are required to be prepared / vetted by Legal Affairs / transaction lawyer. CRC Responsibility o CRC is vested with the responsibility to get these documents prepared from Legal Affairs, or by Legal Retainers at MCB Approved Panel as per facility structure. Where drafts of the documents are provided by the Legal Affairs the CRC will arrange / prepare the said documents on given drafts. Process Flow 36

o All the documents of mortgage/ Charge are being on non standard formats and before its execution legal opinion are to be obtained.
Activity # 8
Introduction o Valuation Report is valuation of Fixed Assets offered as security against Banks financing should be undertaken by Banks approved evaluator as notified by CMD/ CRMD from time to time. o Search Report from office of Registrar of Joint Stock Companies (SECP) should invariably be obtained. Search Report should clearly mention the ranking of existing charge (In case of Limited Company). o Credit Worthiness Report is required for all new local borrowers and at least once for each fresh facility. o In order to ascertain the genuineness of various documents like charge creating instruments, Form 10, Form- 16, MOA & AOA, Form A, Form 29, COI, COCB, we have to obtain certified copies of these documents from SECP. CRC Responsibility o For all taken over branches CRC will arrange data base on valuation reports and search reports. A Tickler will also be generated on monthly basis by CRC for these two documents. Obtaining of other documents enumerated above will be arranged on need basis. CRC will liaison with out source vendors on banks approved panel for early receipt of these documents after request is made by the BU. Process Flow o Contact point at CRC for these activities is CSU. Officer CSU will arrange these documents from outsource vendors as and when request is received from BU along with expense debit authority. Activity # 9
Introduction 37

o Insurance Policy is a particular kind of indemnity contract which provides indemnification against loss or liability from specified events and circumstances that may occur or be discovered during a specified period. Assets under Banks lien are to be insured by Insurance Companies approved by the bank. The maximum per risk limit for each insurance company is to be adhered. Where the amount of risk to be covered exceeds the per risk limit of an enlisted insurance company, joint insurance or re-insurance may be obtained or FID, P.O.K. approval is obtained. CRC Responsibility o CRC to ensure that advances do not remain uninsured and a proper insurance coverage is obtained. Insurance must always provide cover to the required stocks/assets declared from time to time for coverage/value not less than outstanding loan or exposure / operative limit whichever is higher plus 10% markup amount. Activity # 10
Introduction o Where finance is allowed against hypothecation of stocks & receivables, it is mandatory for the bank to obtained monthly stock report. SBP PR-12 states. o While extending fund based facilities to borrowers against hypothecation of stock and/or receivables on pari passu basis banks shall obtain monthly statements from borrowers that contain a bank-wise breakup of outstanding amounts with the total value of stocks & receivables there against. CRC Responsibility CRC to ensure that finances allowed against hypothecation of stocks & receivables are adequately covered with stipulated margin by the value of stocks & receivables declared in the stock report.
Activity # 11
Introduction o Financing is allowed against pledge of Liquid Securities. These securities may be in the shape of Banks own deposits held in clients local currency / foreign 38

currency account or deposit certificates like TDR, deposits / certificates maintained with other banks, Government securities like DSCs, SSCs, RICs, etc. Utmost care should be made while financing against liquid securities, genuineness of the instrument should also be confirmed; so that at the time of default / encashment, banks claim is not refused. CRC Responsibility o For all taken over branches CRC is responsible for lien marking on liquid securities with respective issuing agencies. Process Flow o CRC Officer CSU is assigned the job of lien marking on securities held against financing. Coupons and Cheque Books of SSCs and RICs will be retained at BU while sending the case for lien marking. Activity # 12
Introduction o Where the mortgage formalities have been completed (either equitable or legal mortgage), it is necessary that entry / noting of banks mortgage / mortgage mutation be recorded with the concerned department/ authority/ society and a certificate to this effect is received from the concerned department / authority/ society. Such confirmation should be kept in record with all other original documents of property.
CRC Responsibility o CRC will be responsible to arrange entry / noting of banks mortgage / mortgage mutation through legal retainer / vendors on banks approved panel but subject to the receipt of formal request along with debit authority from the BU. Process Flow 39

o CRC Officer - DU will liaison with the legal retainer / vendor via CSU under the supervision of Unit Head DU Activity # 13
Introduction o Finance against shares as primary security is being allowed at Stock Exchange Branches, except where special permission is granted by competent authority. This restriction shall not apply for shares held as secondary security / additional comfort. CRC Responsibility o At Stock Exchange Branches CRC is equipped with an operating system named Capital Market Risk Management Module (CMRMM) to monitor the financing against shares. CRC at Stock Exchange Branches is working as a separate unit, which is responsible for all CRC related functions like, Documentation, Monitoring, and Safe custody of documents. Process Flow o CRC officer Stock Exchange will perform all the requisite functions, which includes pledge of shares, release of shares, monitoring of shares, under the supervision of Unit Head Stock Exchange Branch. Activity # 14
Introduction o It is responsibility of a CRC to review & check all security documentation and security for adequacy and correctness prior to disbursement of any facility. DAC is issued to the respective branch for allowing disbursement of finance after completing all the disbursement formalities by the CRC. CRC Responsibility o CRC is responsible for issuance of DAC after its entire satisfaction towards the compliance of all terms and conditions. CRC will also be responsible to review all finance documentation and security at the time of Annual Review. The review should not be confined only to a count of the documents held, but should 40

include an examination of wordings / clauses / signatures etc., to ensure that the documents are as per Banks standard format or drafted by our legal counsel. Process Flow o Before issuance of DAC a Detailed Review Report (DRR) will be prepared by DU & MU. Exceptions relating to finance documentation will be highlighted in the said DRR. Activity # 15
Introduction It is to be ensured that all security documents are kept in a fireproof safe under dual control. Registers for documents should be maintained to keep track of their movement. Physical checks on security documents should be conducted on a regular basis.
CRC Responsibility o CRC has been vested with the responsibility of safe keeping of security documentation in CRC vault duly entered in Safe Custody Register (SB-21). o CRC vault will be under the supervision of Custodial Unit, which will also keep track of movement of any document from the safe custody by entering the documents in Document Movement Register. For Internal Movement o Documents will be delivered to DU for the purpose of review & rectification of a certain document with acknowledgement from DU on Document Movements Register and DU will be responsible to revert back the documents on the same day and date. CU will scrutinize the documents on its receipt back and make entry on its receipt.
For External Movements o With in city of Centralized place CU will deliver the documents to the
authorized official of the branch nominated for this purpose after getting acknowledgement on Documents Movement Register for specific purpose tenor as requested by BU. Outside City of Centralized place CU will prepare special envelop meant for the purpose containing collateral/liquid security for 41

onward delivery to respective BU through special courier of TCS and will mark the entry in Documents Movement Register for agreed time/day and will remove the entry from Documents Movement Register
Activity # 16
Introduction o Prior to issuance of DAC/Limit Feeding in Symbols Branches; CRC should ensure that the Finance application has proper approval before entering facility limits into computer systems. Disbursement should be effected only after completion of covenants, and receipt of collateral holdings. In case of exceptions necessary approval should be obtained from competent authorities. CRC Responsibility o CRC will be responsible to feed the limit particulars as per DAC issued in Symbols branches when control is given to CRC in respective symbol module. Process Flow o This activity is mainly the responsibility of MU which will perform the activity in collaboration with DU.
Activity # 17
Introduction o SYMBOLS is primarily used for operational activities of all kinds of financial facilities given to our customers. It contains different modules for different 42

facilities / activities e.g. SYMBOLS Deposit is designed for RF facility, SYMBOLS Customer Lending for facilities other than RF and SYMBOLS Kernel for capturing of collateral information. CRC Responsibility o CRC has been vested with the responsibility of feeding limits as well as collateral information in SYMBOLS for fresh customers/ renewals/ enhancement. The collateral and limited related data is deleted from the system in case of complete adjustment of outstanding amount and at the time of release of security. o CRC has also been assigned the job of blocking limits if there exists any discrepancy in UER of a borrower. The disbursement of each facility is the responsibility of BU. Limit feeding process has to be undertaken in each of the following scenarios: o Issuance of fresh facility o Increase or decrease in limit amount o Change in pricing / mark-up o Expiry / renewal/ enhancement of limit When any of the following things happen, collateral information in SYMBOLS has to be reactivated: o Collateral Replacement o Partial Release o Enhancement of limit amount o Change in margin value Process Flow o CRC Officer(s) MU has the responsibility of performing this activity.
Activity # 18
Introduction 43

o This activity deals mainly with the proper control of all credit accounts facilitated under various modes of finance, including monitoring of the same where outstanding is in excess of the approved limits (other than those relating to delinquent accounts). CRC Responsibility o CRC has been vested with the responsibility of limit monitoring. CRC is working at a centralized place and at present for symbol branches CRC has been given access to view the Deposit Module only, therefore, CRC Officer schedules to visit taken over branches (Symbols /Non-Symbols) to collect RF / other limits outstanding data. However, when proper access is allowed to CRC for Symbols branches; CRC will generate RF outstanding report sitting at a centralized place.
Activity# 19
Introduction o Inspections of stocks provide the bank an opportunity to assess the adequacy of stocks securing the outstanding exposure. In case of pledged / hypothecated goods, stock inspections should be conducted at the stipulated intervals, preferably with an element of surprise. This aspect assumes even greater importance in case where the Bank does not hold adequate collateral security e.g. in the form of mortgaged properties etc. CRC Responsibility o CRC is responsible for maintaining data base for stock inspections conducted by the Business Units and tickler is generated for due dates of inspections.
Activity # 20
44

Introduction o Compliance of Special Terms & Conditions (Covenants) as advised in Approval of Finance is inevitable. Such covenants should be diarized for compliance at due dates. CRC Responsibility o CRC has been vested with the responsibility of monitoring the compliance of special terms & conditions (covenants) as given in the approval of finance.
Activity # 21
Introduction o As a guiding principal disbursement should only be allowed after completion of all security / support documentation, compliance of covenants, and receipt of collateral holdings. However, there may be some genuine reasons that the client is unable to provide the document in time; therefore, request for deferral of such documents may be considered in the light of Deferral Policy. CRC Responsibility o CRC has been vested with the responsibility of monitoring the deferrals already held. Such deferrals should be diarized for compliance at due dates and prepare a Documentation Deferral Status Report on monthly basis for attention of Business Heads & GH-RMG / President. Activity # 22
Introduction o It is a consolidated report of a branch, containing client wise exception usually called UER. Any exception pertaining to the following areas must be reported in the Unit Exception Report. o Expired Credits o Commitment/outstanding monitoring (including excesses over drawing power) o Stock/Receivable Reports 45

o o o o o o o o o o o o o Stock Inspections Insurance Facility Advising Letters Search Reports Valuation Report Compliance with approval covenants/other terms and conditions, Credit Policies, annual term loan reviews. Documentation (includes Name of person signing the document (including witnesses) clearly identified by writing their names in led pencil below the signature on the documents. Line utilization/disbursement authority Legal review of documentation Collateral Control Running Finance rollover Registration of Charge All past due loans/mark-up to be reported on a monthly basis
CRC Responsibility o While preparing detailed Review Report (DRR) if any exception is pointed out by CRC reviewing officer that will be reported in UER. Monitoring Unit has been assigned the responsibility of preparing and updating the UER. Process Flow o CRC Officer - MU will prepare and update the UER under supervision of Unit Head MU. Activity # 23 Introduction o Disbursement should only be effected only after completion of documentation, compliance of covenants, and receipt of collateral holdings. In case of exceptions necessary approval should be obtained from competent authorities. o After the Finance is approved and draw down allowed the finance should be continuously watched over. This includes outstanding documents (Insurance / Stock report), borrowers repayment behavior toward principal / mark-up, compliance with credit terms, clean-up etc. The process of line blocking may be very much helpful to keep the client within credit discipline in order to make the banks assets healthy.
46

CRC Responsibility o In case any discrepancy exists in the account CRC will block the limit. CRC is working at a centralized place and at present even in symbol branches CRC has not been given the control of limit feeding, therefore, limit block instructions will invariably be issued for symbol branches also. Process Flow o Line blocking activity is initiated mainly on the basis of latest UER Activity # 24 Introduction o There may arise a situation where BU has to accommodate an unanticipated/one off request from a customer for enhancement in a specific facility by earmarking of another facility, without an increase in overall exposure to the company/group. o Earmarking can be done from a high-risk facility to a low-risk facility, but not the other way around, Earmarking / cross transfer of one limit to another within same legal entity or between / among various units of a Group may warrant additional / supplemental documentation or charge forms sign off requirements, as advised vide Circular No: PO/GEN/CMD/251 dated August 23 2000. CRC Responsibility o It is the responsibility of CRC to ensure that required Fresh / Supplement Charge Forms / Documents are obtained before allowing earmarking. In case of any ambiguity / confusion, opinion from the in-house legal department must be obtained and followed carefully. Activity # 25 Introduction o This activity will be performed by CRC after satisfying itself that proper approval is in place, finance is fully adjusted and the collateral is not required for any other finance. CRC will have to release security / security documents in the following cases:o Full release of security / security documents upon full and final settlement of finance o Partial release of security upon partial adjustment o Replacement of security o Release of security for encashment through CRC officials 47

o Release of security for re-investment purposes through CRC o Release of security documents on temporarily basis for rectification purposes CRC Responsibility o CRC is responsible for release of securities after adjustment of the finance facility as per credit policy. Process Flow o Upon receipt of request and authority letter from BU, CRC Officer CSU will send these documents to MU for further processing. Activity # 26 Introduction o NOC are required to be issued on behalf of the bank in case of Ranking of charge of any other bank is to be up-graded / Pari Passu or for satisfaction of any existing charge CRC Responsibility o CRC is responsible for issuance of NOC after approval by competent authority. Process Flow o Upon receipt of request from BU, CRC Officer Documentation will prepare the draft of NOC for getting legal vetting under Supervision of Unit Head. Activity # 27 Introduction o Vault Keys are as sensitive as any other security document and hence are handled by CU. These keys are under dual control for counter check purposes. The duplicate keys are deposited in the vault of any nearest branch for safe keeping. In case the original keys are lost by CU officer(s), duplicate keys are retrieved from the branch where these are held and an order to an external agent is placed immediately for manufacturing of another set of duplicate keys. CRC Responsibility 48

o CRC has been vested with the responsibility of handling vault keys. Each vault has two set of keys and each set has three keys; A, B and C. The original set is held with CU and the duplicate set is deposited keys in the nearest MCB branch for custody. For handling of original keys, two CU officers are assigned. The purpose of dual control is to have accountability and cross check. In case any of the authorized holders is on leave, the keys are handed over to another CU officer on temporarily basis. Process Flow o CRC Officer(s)-CU takes charge of vault keys that are held under dual control. CU authorized holders have to sign Key Register in the presence of a unit head - CU or any other neutral officer of CRCD every time the holder(s) is changed. Activity # 28 Introduction o New folders are ordered on the basis of forecasted demand of TO unit, Islamabad CRC hub and rate of fresh approvals. The purpose of this activity is to ensure that sufficient folders are held in stock in order to avoid an shortages. This activity also ensures quality and price of new folders being purchased in such a way that good quality folders are purchased at minimum possible price. CRC Responsibility o CRC CU has been vested with the responsibility of forecasting demand of folders and placing its purchase order to an external vendor on the basis of quality, price and availability of desired quantity. Process Flow o CRC Officer(s) CU forecasts the demand of folders two months in advance and places its demand to an external vendor. CU also maintains the record of folders received and issued.
Standard Documents made by the CRCD All below mentioned documentation should be taken by branch on case to case basis. Funded Facilities: 49

Facility Running Finance (RF) Security documentation/ IB Forms Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Hypothecation (IB-25A) Demand Finance (DF) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Cash Finance (CF) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Pledge (IB-26) Finance Against Imported Merchandise (FIM) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Pledge (IB-26) Finance Against Packing Credit (FAPC) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Hypothecation (IB-25A ) Finance Against Trust Receipt (TR) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Trust (IB-27) (Case to Case Basis) Inland Bills Purchased (IBP) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Buy-Back-cum-Indemnity (IB-9) (Case to Case Basis) Agreement for discounting / purchase of Bills (IB-20) (Case to Case Basis) Finance Against Shares Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) 50

Letter of lien of Marketable Securities Accepted As a Collateral (IB 28) Agreement for Sale & Buy-Back for Marketable Securities (IB-31) Margin Financing Demand Promissory Notes (IB-12) Agreement to Finance on Markup Basis Annexure -1A Agreement to Pledge, Lien and Authority for Securities Annexure -1B MCB Instant Finance Demand Promissory Note (IB-12) Mark-up Agreement (IB-6/6K) Letter of Lien (IB-28) (It must be signed by the owner of the instrument) Agreement for Buy Back cum indemnity (IB-31) CF 19 (IN Case of lien on deposit with MCB) Finance against Salary Demand Promissory Note (IB-12) Mark up agreement (IB-6C) Lien Marking on account (IB-19) Export Refinance Part-I (Preshipment) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Hypothecation (IB-25A) For claiming reimbursement from SBP a separate set of documents is prepared by the branchs ERF-Depts. Export Refinance Part-II Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Hypothecation (IB-25A) For claiming reimbursement from SBP a separate set of documents is prepared by the branchs ERF-Depts. Export Refinance (PostDemand Promissory Note (IB-12) 51

shipment) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Buy-Back-cum-Indemnity (IB-9) (Case to Case Basis) Agreement for discounting / purchase of Bills (IB-20) (Case to Case Basis) For claiming reimbursement from SBP a separate set of documents is prepared by the branchs ERF-Depts. Foreign Bills Purchase (FBP) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Buy-Back-cum-Indemnity (IB-9) (Case to Case Basis) Agreement for discounting / purchase of Bills (IB-20) (Case to Case Basis) Finance Against Foreign Bills (FAFB) Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6/6K) Letter of Buy-Back-cum-Indemnity (IB-9) (Case to Case Basis) Foreign Currency Export Finance (FCEF) Agreement of Financing FC-LDF# 1 Promissory Note FC-LDF# 2 Letter of Continuity FC-LDF# 3 Letter of Lien & Set-off FC-LDF# 4 Letter of Pledge FC-LDF# 5 Letter of Hypothecation FC-LDF# 6 Foreign Currency Import Finance (FCIF) Agreement of Financing FC-LDF# 1 Promissory Note FC-LDF# 2 Letter of Continuity FC-LDF# 3 Letter of Lien & Set-off FC-LDF# 4 Letter of Pledge FC-LDF# 5 52

Letter of Hypothecation FC-LDF# 6 Trust Receipt FC-LDF# 7 Foreign Currency Bills Discounting (FCBD) Agreement of Financing FC-LDF# 1 Promissory Note FC-LDF# 2 Letter of Continuity FC-LDF# 3 Letter of Lien & Set-off FC-LDF# 4 Agreement for discount / Purchase of FC Bill FC-LDF # 4
Non-Funded Facilities: Letter of Credit (L/C-F) Sight Demand Promissory Note (IB-12) Application cum agreement for opening of Letter of Credit (IB-8) (at time of opening of L/C) Letter of Credit (L/C-F) DA Demand Promissory Note (IB-12) Application cum agreement for opening of Letter of Credit (IB-8) (at time of opening of L/C) Trust Receipt (IB-27) if documents are delivered against acceptance Letter of Credit (L/C-S) Inland Demand Promissory Note (IB-12) Application cum agreement for opening of Letter of Credit (IB-8) (at time of opening of L/C) Letter of Credit (L/C-DA) Inland Demand Promissory Note (IB-12) Application cum agreement for opening of Letter of Credit (IB-8) (at time of opening of L/C) Trust Receipt (IB-27) if documents are delivered against acceptance Bank Guarantee Demand Promissory Note (IB-12) Agreement for Finance on Mark-up basis (IB-6A) Counter Guarantee (IB-30) (on case to case bases) 53

Personal Guarantee (IB-29) of Directors, Partners, Proprietors in all cases except where specific waiver is held as per banks credit policy.
Bibliography
Annual Report 2009 of MCB Bank Limited

www.mcb.com.pk http://world.mediamonitors.net/headlines/banking_industry_of_pakistan_performan
ces_and_constrains
http://en.wikipedia.org/wiki/Muslim_Commercial_Bank http://www.mcb.com.pk/ir/fin_data_rep.asp http://www.pakistaneconomist.com/issue2000/issue3/f&m.htm
MCB employees portal

http://www.ehow.com/list_7498318_sources-funds-commercial-
banks.html#ixzz1CKhzP5sA
www.investopedia.com
54
MCB CRCD Manual
55

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Introduction of Banking Industry