Muslim Commercial Bank

Introduction

MCB formerly known as Muslim Commercial Bank was started by Adamjee Group on July, 1947, under the Indian Companies Act, VII of 1913 as a limited company. Later on the bank was established with a view to provide banking facilities to the business community of South Asia. Later one the bank was known locally in 1974 during the government of Zulfikar Ali Bhutto. This also the first bank which later was privatized in 1991 and was purchased by a consortium of distinguished Pakistani corporate groups led by Nishat Group. After that in Jun 2008, the Nishat Group owns a majority stake in the bank. The group has a strong presence in the business sectors of the country such as banking, textile, cement and insurance sector. MCS is the fourth largest bank in Pakistan that has an asset of US$6.7 billion, and is the largest capitalization in the market having market capitalization of US$4.1 billion. Also the bank has 4 million customer and nationwide its network is growing and expanding of uptill 1026 branches, including other Islamic Banking Branches, and more than 400 ATMs, in a market with a population of 160 million.

In 2005, the reason of changing the name Muslim Commercial Bank to MCB was to explore international markets as they were facing a lot of resistance specially towards Western countries side to avail Licence. Later on in 2008, the head office of MCB was shifted to Lahore in newly constructed building with the name of MCB House which was located at Sharea Ghous-Ul-Azam (formerly known as Jail Road) from Karachi. The MCB Tower I sthe tallest building in Pakistan which is advised by Merill Lynch, became the fourth Pakistani company to be listed on the London Stock Exchange when it raised US$150 million global depositary receipts. In May 2008 Malaysian bank, Mayband and MCB sponsors Nishat Group signed an agreement, whereby Maybank will acquire upto 20% ordinary share in MCB from Nishat Group. The acquisition is in-line with Maybanks strategy, as Malaysia’s financial services leader in the region, to builds its presence in key growth markets across the region. It also paves the way for MCB, one of Pakistani’s premier financial services groups, to engage Maybank as its exclusive foreign commercial bank strategic partner.

When MCB has started banking it was not that much popular. But due to a better excellent staff n Management along with adopting MIS Technology MCB starting growing up their business day by day and in 2007, MCB reported a profit after tax of US$270 million and along with that it generated a return average equity of 38% and the margin of net interest is 8.08%. The Bank asset quality now grown up with a gross NPL ratio of 4.7% and 100% provision coverage.

Management Information system use in Bank:-

“Information System can be organized combination of people, hardware, software, communication, networking and data resources that collect, transforms and disseminates information in an organization”

The entire infrastructure, organization, personnel, and components for the collection, processing, storage, transmission, display, dissemination, and disposition of information.

Managemet Information is a system that provides people with either data or information relating to an organization’s operation. MIS support the activities of employees, owners, customers and other key people in the organization’s environment either by efficiently processing data to assist with the transaction work load or by effectively supplying information to authorized people in a timely manner.

A Management Information System provides managers with information and support for effective decision making and provides feedback on daily operations.

Characteristics of MIS:

The most important source of internal data is the TPS

External data is not captured by the organization but are used by the MIS (i.e., customer, supplier and competitor information)

Produce scheduled, demand, and exception reports

Output reports with fixed and standard formats

Produce hard-copy and soft-copy reports

Use internal data stored in the computer system

Have reports developed and implemented by information systems personnel

Require formal requests from users

Overview of Management Information Systems Applications:

MIS Subsystem using in a Bank:-

MANAGEMENT INFORMATION SYSTEM

Transaction Processing System (TPS):-

A firm’s transaction processing system (TPS) comprise the routine, day to day accounting operations that have been an important part of most firm’s computer processing. These “paperwork processing” operation many of which provide linkages among the customer, organization, warehouse and factory include accounts receivable, accounts payable, inventory control and many other operations. MCB uses this process to confirm the transaction of each process of the system. Whenever there exist the first task transaction is responsible to process the system .

Management Reporting System (MRS):-

Bank use this phase to manage the system report for any future decision making purposes. A Management Reporting System (MRS) basically generates the preplanned printed reports for decision making purposes. Reports produced through an MRS are commonly by products of the extensive and detailed databases assembled by transaction processing systems.

Decision Support Systems (DSS):-

Decision System Support is an important part in Bank. A decision Support System (DSS) provides a set of easy to use modeling, retrieving and reporting capabilities so that people can generate the information they feel will be useful to them when making decisions. A DSS might allow a manager to sit at an interactive terminal and browse through data, analyze them, and create specially tailored reports. Rather than consisting of semi-frozen set of data or information outputs, as TPZ and MRS do, the DSS provides tools for enhancing user decision making. The DSS coupled with the trend towards networking personal computers have resulted in group decision support system (GDSS) that support the activities and decision making of entire work teams, rather than just individuals.

Office Information System (OIS):-

Bank uses Office Information System(OIS) for the use of computer based office applications and other tasks. Off all the components that fall under the MIS umbrella, the OIS area is the least uniform, overlapping to great extent with TPS, MRS and especially DSS.

Goals of Management Information System used in Bank:-

Operational Efficiency.

Functional effectiveness

Better Service

Product Creation and improvement

1-Operational Efficiency:-

Bank use Operational Efficiency so that the routine task can be completed as soon as possible. The oldest MIS subsystem, transaction processing has served this purpose admirably for many years. Using all these additional people probably would not match the speed at which such tasks could be completed by using computer technology. Inventory control personnel use the computer to help cut the costs of carrying inventory. Another prime area for operational efficiency is the office. For instance word processes greatly increase typing efficiency, especially if the documents being typed sometimes need to be revised.

2-Functional Effectiveness:-

TPS plays an important role is every part of subsystem whenever utilized. In this process of effectiveness TPS is predominantly oriented toward satisfying efficiency objectives, a DSS is often oriented toward Functional Effectiveness- for example, toward helping managers make decisions or helping salespeople close sales with client. Information available to salespeople at the pint of sale can also improve effectiveness. For example a large hospital considered switching from a Merck & Co. antibiotic to a competitive product that was half the price. While at the client site the Merck salesperson armed with a laptop computer that tied into a central database- searched clinical and lab studies from the Food & Drug Administration and found that the competing drug had not been consistently effective in treating gynecological infections. Because of literally having this research data at their fingertips, the salesperson and Merck kept the account.

3-Better Service:-

Bank is providing a quality Customer Services to customers as the ATM’s is the best example of Quality Customer Service because ATMs enable bank depositors to withdraw money 24 hours a day, 7 days a week. Also they promote operational efficiency by cutting personnel costs.

4-Product Creation & improvement:-

Products that can be differentiated largely on the basis of the information inherent in them are called information-intensive products. In industries characterized by information intensive products, it is quite possible to create new products or improve old ones with information technology. Bank also introduced a new products day by day inorder to ease the customers. For Example Mobile Account, Bill Payment through mobile phone or checking your account balance through mobile phones.

Capabilities of Management Information System in bank services.

The bank operates with six types of business solutions and services with the sole purpose of creating value to our customers by re-using state-of-the-art technologies and making optimum use of our professional capabilities across traditional lines of trade. Our six fields of business solutions and services are:

Application Integration

Management Information Systems

IT Security and Software Safety

Custom-built Solutions

Professional Services

1-Application Integration

MCB has adopt the Integration systems to make ease in their business. Integration of systems, organizations and business processes is one of the dominating Challenges in the IT industry especially when using in Bank Sectors.

2-Management Information Systems

Bank use the system to provide a better service to customer and also to make the system more flexible and easy so that when for example one system goes down then other system wents up and can take the control very easily. Systematic is known for our ability to develop Management Information Systems for use in mission critical environments, where reliability and flexibility are essential.

3-IT Security and Software Safety

IT security is the important take for the bank alsong with its Software Safety and transactions account for the customers. Security covers the aspect of protecting the system and its data from the surroundings such as protecting a system against hackers for example. Software safety means protecting the surroundings from the system so that for example a helicopter won’t crash during a rescue operation if there is an error in its software system.
Security

When information is stored digitally and/or sent over the network, it is important to be able to protect those data against unwarranted access so that only those intended to access can in fact see the information, edit the data and see their history. The measures taken to protect access to the system are called IT-security. Strong encryption can be used for concealment and confidentiality and digital signatures for information integrity and positive identification of the author/sender. Please visit the links in the right column for further details on the specific IT security solutions.
Safety

A large number of mission critical systems are submitted to specific standards that have to be met. This is particularly relevant within the defence, the transportation and the healthcare sectors. MCB is able to work with the common standards so that we can offer professional services within software safety to our customers. Software is increasingly used in mission critical areas, where potential errors in the system could lead to damages in personnel or surroundings. In order to obtain a suffiently high degree of trust in the system, a solid methodological procedure has to be applied. This includes analyses of the software and its surroundings which can precede the construction of the system. Usually, software testing is intended to reduce the number of errors, but the purpose of safety analysis is to reduce the probability of accidents. If an accident occurs, the safety analysis must ensure that the consequences are reduced. The technical part of this process is called safety engineering.
For mission critical systems it is essential to be able to master this particular kind of safety analysis. The future demands on less critical applications are bound to increase.

Intelligent Clothes

IP Firefighter – A systems of Bank to enhance the security of a fire-fighting crew. Monitors the health of the fire-fighters, establishes 3D positioning, collects environmental data and voice/transfer of video.

5-Custom-built Solutions

MCB use to made a custom built software solution so that just incase any customer arrived and its difficult to make the decision then custom built software can also help in giving the solution.

6-Professional Services

Yet another step of MCB is that they are providing professional services to the customers. Thus focusing of the customers demand and inorder to stay updated on the market MCB use to introduce new updated informations and promotions inordor to keep the customers upto date and providing the best services according to the customers demand and facility.
Decision Support System

MCB possess powerful decision support system inorder to provide the facility to the customer based upon the decision. In decision support systems the features are as follows:

1-Structured Decisions:

A structured decision is one that is made according to specified procedures of rules.

For example Deciding to send a reminder notice to customer for an overdue balance is generally considered to be structured decision. In other word it is relatively easy to develop a procedure for handling such situation.

2-Unstructured Decisions:

Decisions such as how to advertise a new product or how much to spend on MIS on the other hand are harder to specify or to program. These types of decisions are called unstructured decisions. These types of decisions often involve a high degree of fraction and no precedent. They may require a lot of creativity.

3-Semistructured

Semi-structured decisions are decisions for which information obtained from a compter system is only a portion of the total knowledge needed to make the decision.

The decision support system (DSS) is particularly well adopted to help with semi-structured decisions.

For example a manager can browse through data at will perhaps at a display terminal. When enough information is gleaned from this process to supplement other information a decision can be reached.

System:

Bank is using a system which is a set of interrelated elements that collectively work together to achieve some common purpose or goal. A football game for instance is played according to a system that is composed of such elements as teams, stadiums, equipment, referees and rules. Another system is a computer based information system (CBIS). A CBIS is a collection of people, hardware, software, data and procedures that interact to provide timely data and information both internally and externally to authorized people who need it.

Components of a System:

A system element can be tangible object and abstract concept or an event. Tangible objects

are those objects that we can touch or measure. Abstract concepts and events are intangible.

When classifying systems frequently differentiate between a system’s logical description and

physical description. The logical description of a system is a representation that specifies

essential system elements in broad often abstract terms. A physical description of the same

system would be much more precis about how it is actually implemented. For example

describe a computer system uses the term “Input”, “Processing”, and “ output” which are

broad imprecise concepts. Such terms are useful in describing logically in general term how

systems work. However state that a keyboard is to be used as an input devices on computer

system which uses both a printer and monitors as output devices, these describing a system in

physical terms.

Open & Closed System:-

System are often classified as open or closed. A closed system is self contained and does not interact or make exchanges across its boundaries with its environment. In other words, a closed system is one that has no interaction with any element not contained in it. An open system is one that interacts and makes exchanges with its environment. In figures and graphs illustrating open system, such exchanges are typically shown because it is important for people perceiving the system model to understand that such exchanges affect the system and its performance.
An open system representation of a decision support system (DSS) is depicted in the figure shown below:

ENVIRONMENT

Management action

Stimuli

Boundary

Data

DSS

Decisions

Decision maker

Data

Computer

Information

In the above figure data entering the system from the environment and being processed into information by a computer. A decision maker, in turn, takes that information and uses it to make decisions. The management actions resulting from the decisions perhaps a change in an item’s price or the acquisition of a new company are passed back as data into the environment, where such elements as customers or competitors react in some way, thereby generating even more data. Because it is important to show that decision making does not take place in a vacuum, the open system representation is appropriate here.
The dotted line shown in the figure is often called feed back loop. In the feed back loop depicted the results of decisions are “feed back” within the system to affect its future performance. Here the dotted line represents management action not passed into the environment. For instance the decision maker may decide that new pricing formula should be applied to the data before a final decision can be reached. Or the decision maker may use an action resulting from one decision as data for another decision.

Virtually all in a business are technically open systems, whether or not we choose to model them that way. In other words decisions made in a particular business are based at least in part on what is happening in that business environment.

Conclusion

MCB is providing remarkable results in past few years. Yet now MCB is building a new MIS system which is strong and powerful as before due to which is the main target of MCB. With this implementation of building new systems MCB has mainly focused to customers and also attract new customer so that it can increase their productivity, functionality and flexibility.