Vous êtes sur la page 1sur 37

Meezan

Bank
The Premier Islamic Bank
Course

Financial Institutions Sec - B

Course Instructor

Mr. Shujaat Saleem

Group Members

Murtaza Asgher Ali


Naeem Ahmed
Yousuf Hatim
Taherali
Muhammad Rizwan

-2-
Table of Contents
Table of Contents.................................................................................................................3
Introduction to Meezan Bank Ltd........................................................................................5
Overview of the Organization.............................................................................................5
Brief History of the Organization....................................................................................5
Nature of the Organization..................................................................................................8
The Meezan Team............................................................................................................8
Business Segments of the Bank.......................................................................................8
Vision and Mission..............................................................................................................9
Vision...............................................................................................................................9
Mission.............................................................................................................................9
Service Mission............................................................................................................9
Organizational Structure....................................................................................................11
Shariah Advisory Board.................................................................................................11
Board of Directors..........................................................................................................12
Corporate Information....................................................................................................12
Shareholding Structure......................................................................................................13
Achievements....................................................................................................................14
Credit Rating:.................................................................................................................14
First Ladies Banking In Pakistan:..................................................................................14
Branch Network:............................................................................................................14
Other Achievements:......................................................................................................15
Departments & the Products Offered ..............................................................................15
Customer Services Department.........................................................................................15
Riba Free-Rupee Saving Account..................................................................................15
Riba Free-Rupee Current Account.................................................................................16
Riba Free Dollar Savings Account.................................................................................16
Basic of Account Opening.................................................................................................16
Business Account...........................................................................................................17
Sole proprietor accounts: ...............................................................................................17
Partnership account: ......................................................................................................17
Limited company accounts: ..........................................................................................17
Personal Account...........................................................................................................17
Personal account: ..........................................................................................................18
Joint account: ................................................................................................................18
Club Society Account....................................................................................................18
Accounts On the Basis Of Currency..............................................................................18
Operations Department......................................................................................................18
Clearing..........................................................................................................................19
Inward clearing...............................................................................................................19
Outward clearing:...........................................................................................................20
Services provided ..........................................................................................................20
Remittance......................................................................................................................21

-3-
Other Functions under Operations Department.............................................................22
Lockers...........................................................................................................................22
Riba Free Term Deposits Offered By Bank...................................................................23
Certificate of Islamic Investment...................................................................................23
Karobari Munafa Account.............................................................................................25
Monthly Mudarabah Certificates...................................................................................25
Dollar Mudarabah Certificates.......................................................................................26
Meezan Amdan Certificates...........................................................................................27
Meezan Providence Certificate (MPC)..........................................................................28
Meezan Islamic Institution Deposit Account.................................................................28
Cash Department...............................................................................................................29
Credit / Finance Department..............................................................................................29
Personal Financing.........................................................................................................30
Easy Home.....................................................................................................................30
Car Ijara..........................................................................................................................31
Swot Analysis....................................................................................................................32
Suggestion & Recommendations.......................................................................................34
Financial Highlights...........................................................................................................35
Overall Conclusion............................................................................................................37

-4-
Introduction to Meezan Bank Ltd
Meezan was established as an islamic investment bank in 1997 as “al
meezan investment bank ltd”. After the successful completion and
great struggle first islamic commercial bank’s license was awarded to
al Meezan investment bank in year 2002, to start the commercial
banking facilities they bought the local operations of “socite general”
(French bank) 03 branches and started the commercial islamic banking
in the country.

Meezan Bank stands today at a noteworthy point along the evolution of


Islamic Banking in Pakistan. The banking sector is showing a significant
paradigm shift away from traditional means of business and is catering
to an increasingly astute and demanding financial consumer who is
also becoming keenly aware of Islamic Banking. Meezan Bank bears
the critical responsibility of leading the way forward in establishing a
stable and dynamic Islamic Banking system replete with dynamic and
cutting-edge products and services.

The Bank has made fundamental and significant progress forward, and
in doing so has established a strong and credible management team
comprised of experienced professionals, which have achieved a strong
balance sheet with excellent operating profitability, including a capital
adequacy ratio that places the Bank at the top of the industry, a long-
term entity rating of A+, and a short-term entity rating of A1+, the
highest short-term rating.

Overview of the Organization


Brief History of the Organization

1947
The inception of Pakistan as the first Islamic Republic created in the
name of Islam.

1980
CII presents report on the elimination of Markup genuinely considered
to be the first major comprehensive work in the world undertaken on
Islamic banking and finance.

-5-
1985
Commercial banks transformed their nomenclature stating all Rupee
Saving Accounts as markup-free. However, foreign currency deposits in
Pakistan and foreign loans continued as before.

1991
Procedure adopted by banks in 1985 was declared un-Islamic by the
Federal Shariat Court (FSC). The Government and some banks/dfis
made appeals to the Shariat Appellate Bench (SAB) of the Supreme
Court of Pakistan.

1997
Al-Meezan Investment Bank is established with a mandate to pursue
Islamic Banking. Mr. Irfan Siddiqui appointed as first and founding Chief
Executive Officer.

1999
The Shariat Appellate Bench of the Supreme Court of Pakistan rejects
the appeals and directs all laws on markup banking to cease. The
government sets up a high level commission, task forces and
committees to institute and promote Islamic banking on parallel basis
with conventional system.

2001
The Shariah Supervisory Board is established at Al-Meezan Investment
Bank led by Justice (Retd.) Muhammad Taqi Usmani as chairman. State
Bank of Pakistan sets criteria for establishment of Islamic commercial
banks in private sector and subsidiaries and stand-alone branches by
existing commercial banks to conduct Islamic banking in the country.

2002
Meezan Bank acquires the Pakistan operations of Societe Generale and
concurrently Al Meezan Investment Bank converts itself into a full
fledged Islamic commercial bank. The first Islamic banking license is
issued to the Bank and it is renamed Meezan Bank. President General
Pervez Musharraf inaugurates the new Islamic Commercial Bank at a
formal ceremony in Karachi.

2003

-6-
Meezan Bank establishes itself as the pioneer of Islamic Banking in
Pakistan and quickly establishes branches in all major cities of the
country. A wide range of products are developed and launched
consolidating the Bank’s position as the premier Islamic Bank of the
country Al Meezan Investment Management Limited (AMIM), the asset
management arm of Meezan Bank, introduces Meezan Islamic Fund
(MIF), the country’s first open-end Islamic Mutual Fund.

2004
The State Bank establishes a dedicated Islamic Banking Department
(IBD) by merging the Islamic Economics Division of the Research
Department with the Islamic Banking Division of the Banking Policy
Department. A Shariah Board has been appointed to regulate and
approve guidelines for the emerging Islamic Banking industry. The
Government of Pakistan awards the mandate for debut of international
Sukuk (Bond) offering for USD 500 million. The offering is a success
and establishes a benchmark for Pakistan. Meezan Bank acts as the
Shariah Structuring Advisor for this historic transaction.

2005
Meezan Bank becomes the first customer of Islamic Insurance (Takaful)
by signing the first Memorandum of Understanding mou with Pak-
Kuwait Takaful Company Limited (PKTCL). The signing of this mou has
ushered Pakistan into a new era of Islamic Insurance (Takaful).

2006
A number of new dedicated Islamic Banks, namely Bank Islami and
Dubai Islamic Bank, commence operations in Pakistan.Meezan
continues its leadership position in the industry by more than doubling
it branch network to a total of 62 branches in 21 cities, clearly
establishing itself as the largest Islamic Bank of the country. Meezan
Bank, becomes the first Islamic bank to introduce 8 am to 8 pm
banking at selected branches in Karachi.

2007
Meezan Bank opens up its 100th branch. Two new dedicated Islamic
Banks start operations in Pakistan, namely Emirates Global Islamic
Bank and Dawood Islamic Bank.

2008

-7-
With 166 Branches (including 35 sub-branches) in 40 cities across
Pakistan, Meezan Bank is clearly positioned as the leading Islamic Bank
in the country. Work starts on the construction of Meezan Bank’s new
Head Office building.The financing and investment portfolio of local
Islamic banks reached Rs. 185 billion in December 2008 compared to
Rs. 137.6 billion in December 2007. Market share in the overall
banking increased to five per cent at end December 2008 compared
with four per cent at end December 2007. Total assets of Islamic
banking reached Rs. 271.1 billion in December 2008 compared to Rs.
205.2 billion in December 2007.

2009
Branch network of six dedicated Islamic banks increases to 480
branches (including sub branches) with Meezan Bank having a 42%
share of the Islamic Banking branch network in country with
201branches in 54 cities across the country. Islamic banking’s share
grows to over 5.5% of the total Banking industry.

Nature of the Organization


Meezan Bank is a commercial bank which receives deposits from the
people who have it spare and invests it with those who are in need of
them. It has got the license of commercial banking from the State Bank
of Pakistan and is registered under the legislation of Banking
Companies Ordinance 1962. It has dedicated itself to do business of
banking according to islamic rules and regulations and is supervised by
a Shariah Board who keeps an eye on the operations of the bank and
ensures that the same must be in accordance with the teachings of
islam and there must be no element of Riba in it.

The Meezan Team


Meezan Bank is managed by a team of professional bankers committed
to the cause of Islamic Banking. This single unifying factor unleashes
the tremendous power of a dedicated and motivated team committed
to fulfilling the Vision and Mission of this Bank.

Business Segments of the Bank


• Corporate and Investment Banking

• Commercial and SME

• Consumer Finance

-8-
• Treasury & Financial Institutions

Asset Management (managed through a subsidiary Al Meezan


Investment Management Limited.) Retail Banking is organized in three
Regions across Pakistan, namely South Region, Central Region and
North Region.

Vision and Mission


Vision
Establish Islamic banking as banking of first choice to facilitate the
implementation of an equitable economic system, providing a strong
foundation for establishing a fair and just society for mankind.

Mission
To be a premier Islamic bank, offering a one-stop shop for innovative
value added products and services to our customers within the bounds
of Shariah, while optimizing the stakeholders value through an
organizational culture based on learning, fairness, respect for
individual enterprise and performance.

Service Mission
To develop a committed service culture which ensures the consistent
delivery of our products and services within the highest quality service
parameters, promoting Islamic values and ensuring recognition and a
quality banking experience to our customers

-9-
- 10 -
Organizational Structure

Shariah Advisory Board

- 11 -
The letter and spirit of Islamic Banking rest upon absolute adherence
to the Shariah. The foundations of a strong Shariah underpinning at
Meezan Bank were laid from the beginning. A world renowned Shariah
Supervisory Board and a highly qualified and experienced in house
Shariah Advisor are fundamental aspects of the Bank's core USP. The
primary role of this board is to maintain and further strengthen this
commitment and to ensure strict Shariah compliance in all the Bank's
operations.
The members of the Shariah Supervisory Board of Meezan Bank are
Internationally-renowned scholars, serving on the boards of many
Islamic banks operating in different countries.
The members of the Board are:
• Justice (Retd.) Muhammad Taqi Usmani (Chairman)

• Dr. Abdul Sattar Abu Ghuddah

• Sheikh Essam M. Ishaq

• Dr. Muhammad Imran Ashraf Usmani (Advisor)

Board of Directors
The Board of Directors of Meezan Bank are:
• H. E. Sheikh Ebrahim Bin Khalifa Al-Khalifa (Chairman)

• (Minister of Housing, Ministry of Housing, Kingdom of Bahrain)

• Naser Abdul Mohsen Al-Marri (Vice Chairman)

• Jassar Dakheel Al-Jassar

• Rana Ahmed Humayun

• Mohammed Azzaroog Rajab

• Ahmed Abdul Rahim Mohamed

• Nawal Ahmed

• Alaa A. Al-Sarawi

• Irfan Siddiqui (President & Chief Executive Officer)

• Ariful Islam (Chief Operating Officer)

Corporate Information
Board of Directors

- 12 -
H.E. Sheikh Ebrahim Bin Khalifa Al-Khalifa (Chairman)
Naser Abdul Mohsen Al-Marri (Vice Chairman)
Jassar Dakheel Al-Jassar
Rana Ahmed Humayun
Mohammed Azzaroog Rajab
Ahmed Abdul Rahim Mohamed
Nawal Ahmed
Alaa A. Al-Sarawi
Mazhar Sharif
Irfan Siddiqui President & CEO
Ariful Islam

Shariah Supervisory Board


Justice (Retd.) Muhammad Taqi Usmani (Chairman)
Dr. Abdul Sattar Abu Ghuddah
Sheikh Essam M. Ishaq
Dr. Muhammad Imran Usmani

Audit Committee
Nawal Ahmed
Ahmed Abdul Rahim Mohamed
Mazhar Sharif

Risk Management Committee


Alaa A. Al-Sarawi
Mazhar Sharif
Ariful Islam
Human Resource Committee
Ahmed Abdul Rahim Mohamed
Naser Abdul Mohsen Al-Marri
Irfan Siddiqui

Company Secretary
Shabbir Hamza Khandwala

Shareholding Structure

Shareholders Structure Rs. In Percenta


Millio ge (%)

- 13 -
n
Noor Financial Investment Company, 3,027 45.52
Kuwait
Pakistan Kuwait Investment Company 1995 30
(Pvt.) Limited
Islamic Development Bank, Jeddah 620 9.32
Others 1008 15.16

Achievements
Credit Rating:
Meezan Bank has reaffirmed its entity ratings at A+ for medium to
long-term and A1+ for short-term. This rating was made by JCR-VIS
Credit Rating Company, which has also set Meezan Bank’s outlook on
medium to long-term rating as “Stable”. The rating is yet another
milestone achievement in the Bank’s endeavor to be the Bank.

Meezan Bank’s ratings are based on its shareholding with world-


renowned financial institutions, pioneering role in the industry, strong
management initiatives in continuously introducing various range of
Islamic products. The Credit Rating agency JCR-VIS has expressed
commendation to Meezan Bank management’s ability to deploy funds
in core banking assets, which reflected healthy growth trends last year.

First Ladies Banking In Pakistan:


The Bank is the first in the country to introduce 'Ladies Banking' a
dedicated banking section only for ladies. This new service provides an
exclusive banking area as per the set Shariah principles for our lady
customers in a more comfortable environment.

The dedicated Customer Services Officer in our ladies only banking


area will provide consultancy for a full range of our Halal banking
services including, 9am to 5pm Online Banking, Term Certificates,
Current & Saving Accounts, Consumer Financing and 24/7 banking
services.

Branch Network:
Over 70 branches are working all over the Pakistan.

- 14 -
Other Achievements:
Best Islamic Bank 2005 (Islamic Finance News)
Best provider of Islamic financial services year 2005

Departments & the Products Offered

There are 5 main departments at the branch:

• Customer Services Department


• Operations Department
• Credit Department
• Trade Finance Department
• Cash Department

Customer Services Department


Account opening and closing is the function of customer services deptt.
The bank’s customers includes individuals (single or joint), firm
(partnership/proprietorship), Autonomous corporations, Limited
companies, Charitable Institutions, associations, Educational
Institutions or local bodies.
Brief Explanation of these accounts is as follows
Products offered by this department:

 Riba Free Rupee Savings Account


o Current account
o Saving Account

 Riba Free Dollar Savings Account


o Foreign Currency Account

Riba Free-Rupee Saving Account


As a step towards the mission of providing a one-stop shop for
innovative value added products to our customers, Meezan Bank is
pleased to offer RIBA FREE Current Account, a flexible Rupee based
account that is ideal for businesses and individuals looking for Shariah
compliant banking and professionalism under one roof.

- 15 -
The deposits of the customers together with the bank’s
contribution are invested in a pool that consists of Ijarah and Murabaha
financing. The profit earn on this pool is calculated every month, and if
you maintain a minimum average monthly balance of Rs.10, 000/- you
shall be eligible to receive profits that will be disbursed to you every
month. But if u’r balance is less then 10000 then u get no profit or no
penalty is charges to u. there is no fixed profit b/c every month new
rate declared.

Requirements:
Mini deposit:::::::::::::::::::::::::::::::::::::Rs.10,000/- only
Other requirements are mentioned in detail in appendix.

Riba Free-Rupee Current Account


Current account is basically used to meet the daily transactions. The
money kept in current account is in the form of CARZ-E-HASNA gives
the advantage for paying debts by the convenient and safe means of
sending cheques through the post thus avoiding the trouble and loss.
Requirements:
Mini deposit:::::::::::::::::::::::::::::::::::::Rs.10,000/- only
Other requirements are mentioned in detail in appendix.

Riba Free Dollar Savings Account


The return earn on the Mudarba pool is calculated every month and
profit ratio is declared for all investors is declared at the beginning of
the month.
If you maintain a minimum average monthly balance of $500, you shall
be eligible to receive profits that will be disbursed to you every month.
Requirements:
Mini deposit:::::::::::::::::::::$100 under Mudarba arrangement.
Other requirements are mentioned in detail in appendix

Basic of Account Opening


Account opening is the basic and first relationship, which is established
between Bank and the customer. In account opening extreme care has
to be exercised in case of completion of account opening
documentation.
Whenever a client comes in the bank in order to open an account the
first information that is given to him/her about the types of accounts,

- 16 -
which can be opened, so far this purpose the client is given detailed
information about the accounts and their respective profit rates.

This accounts at Meezan Bank are divided into three categories. These
are as follows.
• Business Account

• Personal Account

• Club Society Account

Business Account
This account is related to the business community. This account is also
further subdivided into three categories.
• Sole proprietor account

• Partnership account

• Limited Company account

Sole proprietor accounts:


These account are the account opened by businesses, which are
owned by single persons. The following documents are required to
open the account.

Partnership account:
These are the accounts specifically opened for the partnership firms.
The documents required for this type of account are as follows.

Limited company accounts:


This account is related to limited companies either public limited or
private limited. The documents required to open this type of account
are as follows:

Personal Account
The accounts related to persons other than companied and partnership
firms are called personal accounts. These are further subdivided into
two categories:
• Personal account

• Joint account

- 17 -
Personal account:
Personal account is own by only one person and not more than this.
This account can be current or saving depending upon the will of the
customer.

Joint account:
Joint accounts are those accounts that are owned by 2 or more
persons. This account may also be either saving or current depending
on the customer’s will.

Club Society Account


The account opened by any NGO or any non-profit firm falls in this
category. For opening of such type of account the bank has to get
permission from the head office. If head office gives permission, the
bank opens this account otherwise refuse to do so.

Accounts On the Basis Of Currency


This account is also divided into two categories. These are as follows:
• Local Currency account

• Foreign Currency Account

Local Currency account:


The account dealing with the local currency is called local currency
account.
Foreign Currency Account:
The account dealing with the foreign currency is called foreign
currency account. This account is further subdivided into following.
• USD

• GBP

• Euro

• JPY

Operations Department

FUNCTIONS PERFOMED:
• CLEARING
• REMITTANCE

- 18 -
Clearing
• Inward clearing
• Outward clearing

Inward clearing
In the morning, the bank receives its own cheques, which have been
presented by the customers in some other bank to be deposited in
their account. NIFT provides the facility of bringing cheques for inward
and also takes the cheques of outward clearing to other banks. The
cheques received in inward clearing are the cheques drawn on bank
and the bank has to pay for them. For this purpose the bank makes
clearing in computer by checking the balances of the respective
customer, if their balances are up to the mark then that cheque is
cleared and the respective customer account is debited with the
respective amount. If the balances are short then that cheque is
bounced back to the related bank.

Reasons for returning a cheque:


• All required stamps of Clearing, Crossing and Endorsement are
not present on cheques.
• Cheque is postdate.
• Refer to drawer
• Effects not cleared, may be presented again
• Amounts in words and figures differ.

If any of these reasons exists then that cheque is returned through


NIFT and deducts Rs. 300 from customer’ account as cheque returned
charges.

For this purpose an entry is passed on multi entry voucher like:

Customer’s Account Dr.


State Bank Of Pakistan Cr.
Cheque returned charges Dr.
Other commissions Cr.

Then the report of returning any cheque is sent through fax to the
head office Karachi. After this put the entry in Cheque return register
showing the following columns:

- 19 -
 Date
 Title of account
 Account number
 Cheque number
 Bank and Branch name
 Reason to return

Outward clearing:
All the cheques of other banks which are deposited to MBL are
presented in outward clearing. This is said as outward clearing
because they are presented on the very next day after depositing a
cheque.

In outward clearing, the entry is made like:


Customer Account Cr.
State Bank of Pakistan Dr.

This entry is made when we come to know about the clearing of all
cheques, which are sent to other banks.

Services provided
• Transfer Of Amount
• Telling Account Balances
• Issuing Cheques Books

Transfer of Amount
If a customer holds two accounts in the bank and he/she wants to
transfer money from one account to other account, customer writes a
cheque and fills deposit slip in which he/she writes account number to
which amount is to be transferred. After making transfer entry in the
computer, affix transfer stamp in the middle of the cheque, crossing on
the upper left and bank’s endorsement stamp on the backside of the
cheque.

Telling Account Balances

Whenever clearing officer receives phone call from the customer


inquiring about his/her account balance after confirming the

- 20 -
name, address and other information he tells the balance
through computer.

Issuing Cheque Books


It is also the duty of department to issue a chequebook when an officer
receives request from the customer.

Remittance
• Pay order
• Demand drafts
• Inward collection
• Outward collection

Pay Order
Pay order is an order to pay money but this payment is to be made
within city. In other words it can be said that the payee and the payer
should be in one city.

In pay order the payment can be made in


• Cash
• Clearing
• Transfer

Procedure
In case of pay order first of all the customer has to fill a pay order
application form in favoring section: name, account number, amount,
beneficiary name, address, etc.
The data is entered in already set format of pay order in computer and
pay order print out is taken. An authorized person and manager
operations are signed pay order.
The original copy of the pay order is given to the customer and carbon
copy is kept with bank for office record.

Demand Draft
An order to pay money to the payee who is residing outside the city.
DD can be for a customer who may or may not have an account in the
bank but the other person’s account must be maintained with the bank
for which the payer has demanded the DD.

Inward Collection

- 21 -
When the bank receives cheques of any other bank from its any branch
situated in the some other city, then those have been dealt as inward
collection.

Procedure
After receiving the cheque, an entry is made in inward collection
register and then all stamps are affixed on the cheque (clearing,
endorsement, IC # stamp) and make outward clearing voucher which
shows the following entry:
Remittance payable Cr.
On the next evening after the delivery of clearing cheques make
reversal entry like
Remittance Payable Dr.
Respective Branch Cr.

Also make a fax message to inform the respective branch that we have
credited their nostro account.

Other Functions under Operations Department

Lockers
Lockers operations shall not be permitted under power of attorney of a
customer. A customer wishing to allow another person or agent may be
requested to open a new locker account under joint names and close
the existing account.
In offering this facility branches have to be selective and should
provide lockers to the customers whose identity and integrity is
verified, who should maintain account with the branch and have
potential for deposits and other banking business. It is reiterated
that honesty, creditability and good reputation of the customer is of
utmost importance in the selection of customer for lockers.

Key Features:
 Available in selected branches
 Available in 3 sizes
 For all eligible Account Holders
 Key security Deposit PKR 3000

- 22 -
Procedure
 Application on Prescribed Form duly filled
 Saving/Current Account with MBL
 02 Passport size Photographs

Charges
 Key Deposit PKR 3000/
 Small PKR 1000/Year
 Medium PKR 1500/Year
 Large PKR 2000/Year
 Locker breaking charges Rs 3000

Cheque Books Handling


 Application for New Cheque Book

Charges
 PKR 03/Leaf for Saving Account Cheque Book
 PKR 01/Leaf for Current Account Cheque Book
 PKR 01/Leaf for FCY Account

(No Charges for Cheque Books of Karobari Munafa Account)

Riba Free Term Deposits Offered By Bank


 Certificate of Islamic Investment
 Monthly Mudarabah Certificates
 Dollar Mudarabah Certificates
 Meezan Amdan Certificates
 Meezan Providence Certificate

Certificate of Islamic Investment


Riba-Free Certificate of Islamic Investment (COII) works under the
principles of Mudarabah and is strictly in conformity with the rules of
Islamic Shariah.

On agreeing to become a COII holder, the customer enters into a


relationship, based on Mudarabah, with Meezan Bank. Under this

- 23 -
relationship, the Customer is an Investor (Rab ul Mal), and the Bank is
the Manager (Mudarib) of the funds deposited by the customers.

The bank allocates the funds received from the customers to a deposit
pool. These funds are utilized to provide financing to customers under
Islamic modes that include, but are not restricted to, Murabaha and
Ijarah.

Tenure

 3 Months
 6 Months
 1 Year
 2 Years
 3 Years
 5 Years

Profit Payment Options


3 Months on maturity
6 months on maturity
1 year monthly or quarterly min investment 200K
2 year monthly or quarterly min investment 200K
3-5 year monthly or quarterly min investment 200K

There will be different rate of profit according to the profit payment


option and amount and tenor.

Pre-mature encashment
In case of pre mature encashment the profit rate will be calculated
according to the completed tenor, if extra profit is paid that will be
recovered

 No pre-mature encashment penalty in MBL

Payment of Premium
Bank pay premium from its own share of profit to high depositors.

Premium Rate
5M 9.99M 1%
10M 29.99M 1.25%

- 24 -
30M 49.99M 1.50%
50M+ 2%

Karobari Munafa Account


Riba-Free Karobari Munafa Account works under the principles of
Mudarabah and is strictly in conformity with the rules of Islamic
Shariah.
On agreeing to become an account holder, the customer enters into a
relationship based on Mudarabah with Meezan Bank. Under this
relationship, the Customer is an Investor (Rab ul Mal), and the Bank is
the Manager (Mudarib) of the funds deposited by the customers.
The bank allocates the funds received from the customers to a deposit
pool. These funds from the pool are utilized to provide financing to
customers under Islamic modes that include, but are not restricted to,
Murabaha and Ijarah.

 Profit calculated on daily basis and paid monthly


 No minimum balance requirement
 No restriction on deposit/withdrawals
 Free Cheque Books, Pay Orders and Online Banking
 Dedicated Account/Relationship
 High return for high depositors
 Other requirements are mentioned in detail in appendix.

Monthly Mudarabah Certificates

Riba-Free Monthly Mudarabah Certificates is a flexible investment


product which has been designed to give you a monthly return which is
Halal. The minimum investment required is only Rs. 100,000 and you
receive profit for each complete month of investment with the Bank.

How Monthly Mudarabah Certificates works?


Riba-Free Monthly Mudarabah Certificate (MMC) works under the
principles of Mudarabah and is strictly in conformity with the rules of
Islamic Shariah.

On agreeing to become a MMC holder, the customer enters into a


relationship based on Mudarabah with Meezan Bank. Under this

- 25 -
relationship, the Customer is an Investor (Rab ul Mal), and the Bank is
the Manager (Mudarib) of the funds deposited by the customers.

The bank allocates the funds received from the customers to a deposit
pool. These funds from the pool are utilized to provide financing to
customers under Islamic modes that include, but are not restricted to,
Murabaha and Ijarah.

Features:
 Minimum requirement of PKR 100K
 Profit disbursement on maturity
 Tire system for profit payment (Refer Rate Sheet)
 No payment on premature encashment
 Other details n requirements are mentioned in detail & appendix.

Dollar Mudarabah Certificates

On agreeing to become a DMC holder, the customer enters into a


relationship based on Mudarabah with Meezan Bank. Under this
relationship, the customer is an Investor (Rab ul Maal), and the Bank is
the Manager (Mudarib) of the funds deposited by the customers.

The Bank allocates the funds received from the customers to a deposit
pool. These funds from the pool are utilized to provide financing to
customers under Islamic modes that include, but are not restricted to,
Murabaha and Ijarah.

Requirements:
 In USD only
 Individuals and Corporate
 Minimum investment 10K and above

Tenure:
 3Months
 6Months
 1Year
 3Years

Profit payment Options:

- 26 -
 3Months Maturity
 6Months Maturity
 1year 6 Monthly or Maturity
 3years 6 Monthly or Maturity
 Other details n requirements are mentioned in detail & appendix.

Meezan Amdan Certificates

The Riba-Free Meezan Aamdan Certificate (MAC) is a long-term deposit


certificate with an exceptionally high monthly profit designed
especially for those individuals and corporations who are in need of
regular stream of monthly income. MAC is a monthly income (mahana
aamdani) certificate with a variety of free packaged benefits.
Working

The Riba-Free Meezan Aamdan Certificate (MAC) works under the


principles of Mudarabah and is strictly in conformity with the rules of
Islamic Shariah.

On agreeing to become a MAC holder, the customer enters into a


relationship based on Mudarabah with Meezan Bank. Under this
relationship, the customer is an Investor (Rab ul Maal), and the Bank is
the Manager (Mudarib) of the funds deposited by the customers.

The Bank allocates the funds received from the customers to a deposit
pool. These funds from the pool are utilized to provide financing to
customers under Islamic modes that include, but are not restricted to,
Murabaha and Ijarah.

Features:
 Long Term Product
 Tenor 5-1/2 years & 7 years
 Profit 9.5% 10.50% (Last month)
 For Individuals and Corporate
 Minimum deposit PKR 100 K
 (50K for old citizens and widows)

- 27 -
Meezan Providence Certificate (MPC)

A long-term investment product specially designed to cater to the


needs of corporate and business concerns for purposes of investing
their Provident, Pension and Gratuity Funds.

How Meezan Providence Certificate works?


Riba-Free Meezan Providence Certificate (MPC) works under the
principles of Mudarabah and is strictly in conformity with the rules of
Islamic Shariah.

On agreeing to become a MPC holder, the customer enters into a


relationship based on Mudarabah with Meezan Bank. Under this
relationship, the Customer is an Investor (Rab ul Mal), and the Bank is
the Manager (Mudarib) of the funds deposited by the customers.

 Min. deposit 01 Million

Tenor
 5 Years
 7 Years

Other options:
 Provident and Pension Fund of large corporate
 Premature encashment facility available

Meezan Islamic Institution Deposit Account

The Meezan Islamic Institution Deposit Account (MIIDA) is a unique


product, tailored exclusively for Islamic Financial Institutions (IFIs).
With MIIDA, any IFI now has the opportunity to manage excess liquidity
in an immediate and profitable manner, by maintaining a checking
account with Meezan Bank.
All eligible Islamic Banks can enter into a Mudarabah relationship with
Meezan Bank. Under this relationship, the respective Islamic Banks are
the Investors (Rab ul Maal), and Meezan Bank is the Manager
(Mudaarib) of the funds deposited by them. Meezan Bank allocates the
funds received from the Islamic Banks to a deposit pool consisting of

- 28 -
financing under Islamic modes that includes, but is not restricted to,
Murabaha and Ijarah.

Features:
 For Islamic Financial Institutions deposit
 To invest their access liquidity
 Min. investment PKR 10 M and multiplies there of
 Max investment 01 B

 Other details n requirements are mentioned in detail & appendix.

Cash Department
The cash department is the most important department of the bank. It
receives cash from customers and then deposits it into the accounts of
the customers and maintained their balances.
In cash department following books are maintained.

 Scroll book
 Paying book
 Cash balance book

Scroll Book
When cash is received at the customer it is recorded in the scroll book.

Paying Cash Book


The cashier makes entry in the paying cashbook when cash is paid.

Cash Balance Book


The consolidated figure of receipt and payment of cash is entered in
cash balance book.

Credit / Finance Department

Islamic Financing for the following:


 Corporate
 SME
 Personal

- 29 -
Personal Financing

Diminishing Musharaka (Islamic Financing)


With Easy Home you can participate with Meezan Bank in a joint
ownership of your property, where the Bank will provide financing up to
85%. On agreement of a monthly payment to the Bank of which a
component is for the use of the home (rent), and another for your
equity share. The total monthly payment is reallocated regularly by the
partnership to reflect your growing equity and to allocate increasing
amounts to your investment. When you have made the full investment,
which had been agreed, you become the sole owner with a free and
clear title to the property.

Easy Home
Easy home works under the Diminishing Musharakah where customer
participates with Meezan Bank in joint ownership.

Easy Home finance is available for:

Purchase
 3-20 year
 Max. Finance 85%

Construction
 2-20 year
 Max. Finance 70%

Renovation
 2-7 year
 Max Finance 85%

Replacement
 3-20 year

Eligibility
 Pakistani National
 Age 25—65 (till maturity)
 Professional Experience

- 30 -
Salaried person:
 2 year of consecutive experience in same industry
 Min salary 20 k per month

Business
 3 years business experience
 Min. business income Rs 50K per month

Processing Charges
 Businessmen Rs 12500
 Salaried Person Rs 8500
 (Up to Rs 4 M, 2000 Additional for above)
 Time Frame 3-4 Weeks

Car Ijara
Ijara is a rental agreement under which bank purchase a vehicle and
give the same on rent to customer
Car Ijarah is Pakistan’s first "Interest Free" car financing based on the
Islamic financing mode of Ijarah (Islamic leasing). This product is ideal
for individuals looking for car financing while avoiding an interest-
based transaction.

Scope of Facility
 Domestic Vehicle (Local made)
 Commercial Vehicle (Local+Imported)
 Used/Imported Vehicle (1st Transfer only)

Rates offered:
(For New) (For used)
 3 year 14% 15%
 4 year 15% 15.50%
 5 year 16.50% 18%

1% higher than normal for commercial+imported+used vehicle

Eligibility:

• Pakistani National

- 31 -
 Salaried individual, self-employed, professional or
businessperson
 Minimum 3 years of work/business/professional experience
 6 month working with present employer
 Net income exceeds three times of monthly rental

Swot Analysis

Strengths:
 Effective HR Policies.
 ATM Machine in Branches.
 One Counter Operation.
 Islamic Banking.
 Loyalty of Employees.
 24/7 Online Banking.
 Internet banking facility.
 Excellent Environment.
 Efficient and Qualified Management.
 Fewer Competitors as Islamic Banking.
 A large range of Islamic Investment Schemes.
 Islamic Leasing System.
 No hidden charges.
 Rates are remarkably low as compared to other banks.
 Very High credit rating.

Weakness:
 Lack of awareness of the people.
 Fewer Branches in Faisalabad.
 Less Advertisement..
 Main Branch isn’t Located in the Business Area.
 Online system is not so strong.

Opportunities:
 More and more people are coming towards Islamic
Banking System.
 Introduction of innovative products.
 New Market Segments for ijara, i.e. Home Appliances

- 32 -
Products.
 Open New Braches in Faisalabad and other small areas.

Threats:
 Islamic banks are Increasing.
 Traditional commercial banks are also introducing the
Islamic Banking Facility.
 Personal Loan Scheme of other banks.
 New Innovative Schemes by Other Islamic banks.

- 33 -
Suggestion & Recommendations

 Expanding their business by establishing new branches in those


areas which are near to the business area.

 MBL has the option to increase its customers through efficient


marketing system.

 The bank must hire the efficient marketing personnel.

 MBL must take part in heavy advertisement as the people


become aware of the Islamic banking System.

 Bank should provide management training to their employees.

 Bank should develop healthy relation to their customers.

 MBL should give more compensations and benefits to its


employees and other workers for the improvement in the
performance. Because it leads to the improvement of overall
bank’s performance.

- 34 -
Financial Highlights
Balance Sheet as on March 31, 2007

- 35 -
Profit and Loss Account as on March 31, 2007

- 36 -
Overall Conclusion
Islamic banking is a very young concept. Yet it has already been
implemented as the only system in two Muslim countries; there are
Islamic banks in many Muslim countries and a few in non-Muslim
countries as well. Despite the successful acceptance there are
problems. These problems are mainly in the area of financing.

With only minor changes in their practices, Islamic banks can get rid of
all their cumbersome, burdensome and sometimes doubtful forms of
financing and offer a clean and efficient interest-free banking. All the
necessary ingredients are already there. The modified system will
make use of only two forms of financing loans with a service charge
and Mudaraba participatory financing both of which are fully accepted
by all Muslim writers on the subject.

Such a system will offer an effective banking system where Islamic


banking is obligatory and a powerful alternative to conventional
banking where both co-exist. Additionally, such a system will have no
problem in obtaining authorization to operate in non-Muslim countries.

Participatory financing is a unique feature of Islamic banking, and can


offer responsible financing to socially and economically relevant
development projects. This is an additional service Islamic banks offer
over and above the traditional services provided by conventional
commercial banks.

- 37 -