Meezan Bank

Table of Contents
Introduction....................................................................................4
Objectives........................................................................................................................4
Overview of the Organization..........................................................................................5
Brief History of the Organization................................................................................5
Nature of the Organization...............................................................................................9
The Meezan Team........................................................................................................9
Business Segments of the Bank...................................................................................9
VISION AND MISSION...............................................................................................10
SERVICE MISSION......................................................................................................11
ORGANIZATIONAL STRUCTURE............................................................................11
SHARIAH ADVISORY BOARD..............................................................................14
BOARD OF DIRECTORS........................................................................................15
ORGANIZATIONAL STRUCTURE OF THE BRANCH............................................16
ACCOUNTS DEPARTMENTS..................................................17
STRUCTURE AND FUNCTIONS ..............................................................................17
OBJECTIVE:...............................................................................17
FUNCTIONS:............................................................................................................17
DATA CONTROLLING:...........................................................................................17
Aspects of Data Controlling .....................................................................................18
REPORTING AND EXPENSE:................................................................................18
BUDGETARY PERFORMANCE:............................................................................19
ACCOUNT OPENING AT MEEZAN BANK..............................................................23
Business Account.......................................................................................................23
Sole proprietor accounts: ..........................................................................................23
Document required.........................................................................................................23
Partnership account: ..................................................................................................24
Document required:.......................................................................................................24
Limited company accounts: ......................................................................................24
Document required:.......................................................................................................24
Personal Account.......................................................................................................25
Club Society Account................................................................................................26
Accounts On the Basis Of Currency..........................................................................27
RUPEE CURRENT ACCOUNT...............................................................................28
DOLLAR SAVING ACCOUNT................................................................................32
KAROBARY MUNAFA ACCOUNT.......................................................................34
MEEZAN BACHAT ACCOUNT..............................................................................35
CERTIFICATE OF ISLAMIC INVESTMENT.............................................................37
Invest in Certificate of Islamic Investment................................................................37
MEEZAN AMDAN CERTIFICATE.........................................................................38
MONTHLY MUDARBA CERTIFICATE.....................................................................40
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MEEZAN PROVIDENCE CERTIFICATE...................................................................41
DOLLAR MUDARABAH CERTIFICATE..................................................................43
CAR IJARAH-AUTO FINANCE.................................................................................45
Car Ijarah also features Used Vehicles!.....................................................................45
WORKING CAPITAL FINANCE.............................................47
Murabaha.......................................................................................................................47
Istisna’a..........................................................................................................................48
PROJECT FINANCING, EXPANSION AND BMR....................................................49
Diminishing Musharakah...........................................................................................49
Ijarah..............................................................................................................................50
ISLAMIC EXPORT REFINANCE SCHEME..............................................................51
LETTER OF GUARANTEE FACILITY..................................................................51
Letter of Guarantee Facility.......................................................................................51
ADVISORY SERVICES................................................................................................53
MONEY TRANSFER....................................................................................................55
DOLLAR MUDARABAH CERTIFICATE..................................................................56
DOLLAR SAVING ACCOUNT....................................................................................58
MEEZAN BANK TREASURY.....................................................................................59
CREDIT ADMINISTRATION DEPARTMENT......................62
“CONSERVATIVE YET DYNAMIC CREDIT POLICY”...........................................62
The overall objective of the department is to provide independent assurance
to branch management and head office credit monitoring division that lending
activities are properly controlled and monitored.......................................................62
CAR IJARAH................................................................................................................68
OBJECTIVE:...............................................................................68
THE PRODUCT :........................................................................68
Previous employer.........................................................................................................73
TREASURY AND INVESTMENT...............................................................................75
Money Market............................................................................................................75
Foreign Exchange Market..........................................................................................75
Investment..................................................................................................................75
Government Securities...............................................................................................76
Custodianship.............................................................................................................76
Financial Advisory Services......................................................................................76
ONLINE BANKING.....................................................................................................77
PHONE BANKING.......................................................................................................77
HOME FINANCE.........................................................................................................79
Buy Your Home.........................................................................................................79
Build Your Home.......................................................................................................79
Renovation Your Home..............................................................................................80
Start it Together..........................................................................................................80
Transfer......................................................................................................................80
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Steps To Arrange a Home..........................................................................................81
FINANCIAL STATEMENT ANALYSIS...................................83
BALANCE SHEET ......................................................................................................84
HORIZONTAL ANALYSIS OF BALANCE SHEET...............................................88
COMMENTS ON HORIZONTAL ANALYSIS OF BALANCE SHEET................92
VERTICAL ANALYSIS OF BALANCE SHEET.....................................................95
COMMENTS ON VERTICAL ANALYSIS OF BALANCE SHEET......................98
INCOME STATEMENT..............................................................................................101
HORIZONTAL ANALYSIS OF INCOME STATEMENT.....................................104
COMMENTS ON HORIZONTAL ANALYSIS OF INCOME STATEMENT.......107
VERTICAL ANALYSIS OF INCOME STSTEMENT...........................................109
COMMENTS ON VERTICAL ANALYSIS OF INCOME STATEMENT.............112
RATIO ANALYSIS....................................................................114
Return on Equity..........................................................................................................114
Return on Assets...........................................................................................................115
Net Spread Margin.......................................................................................................116
Net Other Income Margin............................................................................................117
Earnings per Share.......................................................................................................118
Stock Dividend Percentage..........................................................................................120
Market Price per Share.................................................................................................121
Price Earning Ratio......................................................................................................122
Net Profit before Tax Margin ......................................................................................123
Net Profit after Tax Margin..........................................................................................124
Operating Expenses to Income....................................................................................125
Financing to Deposit Ratio..........................................................................................126
Book Value per Share...................................................................................................127
SWOT ANALYSIS.....................................................................129
STRENGTHS..............................................................................................................129
WEAKNESSES...........................................................................................................130
OPPORTUNITIES.......................................................................................................132
THREATS....................................................................................................................133
RECOMMENDATIONS.............................................................................................134
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Introduction
Objectives
Internship is an integral part of MBA program. It provided me the opportunity to develop

practical know how of concepts which before that were only in theoretical form. My
internship in Meezan Bank Limited, Abdali Road, Branch, Multan was full of learning
regarding various aspect of banking. The report contains practical knowledge, which I gained
during my internship.
Meezan Bank limited is one of the largest private banks in Pakistan, and it has bright future
forward. All information in this report is based on my observation, interviews and practical
involvement in different tasks during my internship in Bank.
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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.
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.
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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
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
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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
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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
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.
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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
• 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.
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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.
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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.
ORGANIZATIONAL STRUCTURE
SHARIAH SUPERVISORY BOARD BOARD OF DIRECTORS AUDIT
COMMITTEE
Shariah Advisor
Internal Audit
(Dr. Muhammad Imran Usmani)
(Mr. Zia-ul-Hasan)
Product Development &
Shariah Compliance PRESIDENT & CEO
(Mr. Ahmed Ali Siddiqui) (Mr. Irfan Siddiqui)
Risk Management
(Mr. Syed Ali Azhar Naqvi)
Legal Affairs
(Mr. Atique Ahmed Siddiqui)
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Compliance
(Mr. Saleem Wafai)
Administration
(Mr. Munawar Rizvi)
Branch Expansion
(Mr. Munawar Rizvi)
PRESIDENT & CEO
Mr. Irfan Siddiqui)
CHIEF OPERATING OFFICER
(Mr. Ariful Islam)
BRANCH NETWORK BUSINESS SEGMENT SUPPORT
SOUTH CORPORATE FINANCE
(Mr. Abdul Ghaffar Memon) (Mr. Zubair Haider)(Mr. Shabbir Hamza)
CENTRAL INVESTMENT BANKING OPERATION
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(Mr. Rizwan Ata) (Mr. Syed Amir Ali) (Mr. Arshad
Majeed)
NORTH COMMERCIAL BANKING I.T
(MR. Saleem Khan) (Mr. Shoaib Qureshi) (Mr. Faiz-
ul-Rehman)
SME HUMAN RESOURCES
(Mr. Salim Khowaja) (Mr. Irfan
Ali Hyder)
TREASURY & FINANCIAL TRAINING INSTITUTION
(Mr. M. Abdullah Ahmed) (Mr. M. Sohail Khan)
CONSUMER BANKING SERVICE QUALITY
(Mr. Muhammad Raza) (Mr. Asadullah Ch.)
ALTERNATE DISTRIBUTION CHANNELS
(Mr. Omer Salimullah)
MARKETING
(Mr. M. Sohail Khan)
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SHARIAH ADVISORY BOARD
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)
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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)
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ORGANIZATIONAL STRUCTURE OF THE BRANCH
Mr. Asim Saleem
Regional Manager / Branch Manager
Mr. Naveed Bari
Assistant Branch Manager
Operations Department CAD Department SMEG. Department Consumer
Department
Mr. Naveed Bari Mr. Zahid Miss. Faiza Mr. Rizwan
(Manager) (Manager) (Manager) (Manager)
IT / HR Department Corporate Department
Mian Wasf Ali Babar Tariq Mehmood Ansari
Department Head Department Head
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ACCOUNTS DEPARTMENTS
STRUCTURE AND FUNCTIONS
Accounts department in the bank works as an internal audit department of the
organization. All the vouchers prepared and all the cheques that are processed are finally
come to the accounts department where these are sorted and summarized.
OBJECTIVE:
The objective of this department is to conduct the internal audit and to provide exact
information of daily transactions.
FUNCTIONS:
Three main functions of accounts department are as follow:
 Data controlling
 Reporting and expense
 Budgetary performance review and analysis
DATA CONTROLLING:
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The main features of data controlling are:
 To match physical data with computer generated data
 To check authorization control of transactions
 Is the data property authorized
 To keep a track of record of all transactions (physical data) for future evidence
 To arrange the data in some order to facilitate or to ease the process of data
Retrieval
Aspects of Data Controlling
1: Customer activity
2: General ledger
Dual effect of transactions is stated like debit credit.
Firstly receiving of voucher then main sorting is done which is done on the basis of main
numbering.
REPORTING AND EXPENSE:
The major reports generated by this section are:
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 Daily branch position
 Daily position of deposits and advances
 Daily MIS report (management information system)
 Daily foreign currency account report
 Daily fund rupee position report
 Statement of affairs
Weekly reports are of foreign exchange and then monthly and quarterly reports are made.
Daily branch position of bank is not faxed and is kept with the bank. Daily foreign
currency report is faxed to treasury. The bank deal in three foreign currencies that are:
US dollar, EURO and GBP (stands for Great Britain Pound). Daily fund rupee position is
faxed to the state bank. Statement of affairs is not faxed.
BUDGETARY PERFORMANCE:
This section includes the disbursements, which are as follows:
Modes of remittances:
 Demand draft D.D
 Telegraphic transfer T.T
 Pay order slip
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They are also called BPG bills payable general.
Demand draft is for outstation purpose .It secures the payment because at first, the cash
is deposited in the bank and then draft is made.
Demand draft is having four copies, which are kept as follow:
One is kept with the customer. (Gray copy)
One with bank (photo copy)
One with the head office (pink)
One with the entity being financed (yellow)
Pay order is for local transfer of money that is within the city.
Two other ways of disbursement in the bank are
 Pay slip
 Cash payment voucher
Pay slip is used when the bank has to pay less then Rs.5000
Cash payment voucher is used by the bank when it has to pay more than Rs.5000.
In the accounts section I came to know about some other terms like
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 Provision
 Rupee travelers cheque
 Deposit certificate
 Inter branch credit advice
 Inter branch debit advice
 Outward bills for collection
 Inward bills for collection
 Society for world wide transactions
 Term finance
Provisions are the amount kept separately to be debited for the expenses of bank.
Deposit certificates are being taxed as
Simple deposit-----------3% tax
Services deposit----------5% tax
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ACCOUNT OPENING AT MEEZAN BANK
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.
Document required
• Introducer of account who is already account holder of the bank
• Copy of NIC
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• Request on letterhead of the company
• Every signature must be stamped with company stamp
• Declaration of sole proprietorship
Partnership account:
These are the accounts specifically opened for the partnership firms. The documents
required for this type of account are as follows.
Document required:
• Copy of NIC of the entire partners
• Request on letterhead of the firm
• Every signature must be stamped with company stamp
• Partner ship deed
• Partnership mandate
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:
Document required:
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• Copy of NIC of all the Directors
• Request on letterhead of the company
• Copy of certificate of Incorporation
• Memorandum and Article of Association
• List of Director
• Copy of Board Resolution [prescribe format]
• Certificate of Commencement of Business.
• Latest copy of Form A-29
• Power of Attorney/Mandate [if required]
Personal Account
The accounts related to persons other than companied and partnership firms are called
personal accounts. These are further subdivided into three categories:
 Personal account
 Joint account
Personal account:
Personal account is own by only one person and not more then this. This account can be
current or saving depending upon the will of the customer.
Documents required
• Introduction of nay account holder of BAL or any other bank
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• Copy of NIC
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.
Documents required:
• Introduction of nay account holder of BAL or any other bank
• Copy of NIC of all the member of joint account
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 other wise refuse to do so.
Documents required:
• Copy of rules
• Certificate copy of resolution [prescribed format]
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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
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RUPEE CURRENT ACCOUNT
(RIBA FREE)
Meezan Bank is offering Riba-Free Current Account, a flexible Rupee based account that
is ideal for individuals and businesses looking for Shariah compliant banking and
professionalism both under one roof.
The Meezan Bank Current Account is a comprehensive Halal method of acquiring a
secure and easily maintainable Riba Free bank account.
Bundled with 24/7 and special banking services, the Meezan Bank Current Account is an
innovative value added account which provides customers both ease of utility and
unmatched service quality.
Key features of the Riba -Free Current Account
• Free Online Banking services at all Meezan Bank branches nationwide
• Instant access to funds at any online branch
• No restriction on withdrawals or number of transactions
• Bank balance certificates & duplicate statements of account
• Stop Payment & Hold Mail instructions
• 24/7 Card your ATM & Debit Card in one
• 24/7 Call Center with complete Tele-banking services
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• Personal financial consultancy services
• Specialized 8 to 8 Banking at selected branches
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RUPEE SAVING ACCOUNT
A unique bank account that offers the opportunity to earn Halal profits, while enjoying a
range of added benefits. It can be opened with a minimum amount of only Rs.10000. The
profit on this account is calculated and paid on a monthly basis, and comes with a variety
of free benefits, no restrictions on transactions, priority banking and more.
• Minimum amount required to open account = Rs.10,000
• Riba Free COII Holders may open accounts without any minimum balance
requirements
Riba Free Rupee Saving Account works under the principles of Mudarabah and is strictly
in conformity with the rules of Islamic Shariah. Profit calculation and all banking
transactions are in strict adherence to the Islamic Shariah, monitored by our Shariah
Advisor and the Shariah Supervisory Board
Key features
Apart from first class service and personalized attention that our customers get when they
bank with us, we offer the following additional conveniences:
• Instant access to funds at any online branch.
• No restriction on withdrawals or number of transactions
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• Bank balance certificates & duplicate statements of account
• Stop Payment & Hold Mail instructions
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DOLLAR SAVING ACCOUNT
Meezan Bank is pleased to offer Riba-Free Dollar Saving Account, a foreign-currency
based investment opportunity that is set up on the principles of Shariah and as a result is
free from the element of markup.
With a minimum of only $100 you can open a Dollar Saving Account with us under a
Mudarabah arrangement that is strictly in conformity with the principles of Islamic
Shariah. The return earned on the Mudarabah pool is calculated every month and the
profit ratio 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
shall be disbursed to you every month.
Additional Features
bank with us, we offer the following additional conveniences to our customers:
• Personalized cheque books
• No restriction on withdrawals or number of transactions.
• Monthly profit payment
• Taking stop payment instructions
• Taking hold mail instructions
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• Issuance of duplicate statement of account
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KAROBARY MUNAFA ACCOUNT
Karobari Munafa is a savings account specifically tailored for large Corporate or Govt.
controlled entities. It allows customers to earn higher returns on surplus cash balances. It
has no preset transaction limits and comes with a variety of free packaged benefits.
Key Features
• Profit will be calculated on a Daily Product Basis
• Minimum balance requirement for account opening is Rs. 1 Million
• No restriction on deposits and withdrawals
• Free facilities: chequebooks and payorders
• Dedicated account / relationship manager
The Karobari Munafa Account works under the principles of Mudarabah and is strictly in
conformity with the rules of Islamic Shariah. Profit calculation and all banking
Advisor and the Shariah Supervisory Board.
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MEEZAN BACHAT ACCOUNT
Meezan Bachat Account is a unique saving account that provides high monthly returns
with the flexibility to withdraw savings if needed. Thus Meezan Bachat Account offers a
higher expected rate of return with the convenience of a savings account.
With a Meezan Bachat Account, you are entitled for a higher the profit with a higher
account balance. You receive profit even if your balance falls below Rs. 25,000/- in any
one month. Profit is credited to your account every month and is calculated with
reference to the minimum balance maintained in the account during the preceding month.
The Riba-Free Meezan Bachat Account works under the principles of Mudarabah and is
strictly in conformity with the rules of Islamic Shariah. Profit calculation and all banking
Key Features
• Highest expected rate of return
• Riba-free profit paid every month
• Minimum balance for account opening is just Rs.25,000/-
• Maximum balance limit for getting highest profit rate is Rs. 1,000,000/-
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• Waiver of application fee for Car Ijarah & Easy Home for accounts with
minimum balance of Rs. 500,000
• Free bank balance certificates.
• 24/7 Internet Banking – free and instant access to your account(s) anytime &
anywhere
• Personal financial consultancy services.
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CERTIFICATE OF ISLAMIC INVESTMENT
The Riba Free Certificate of Islamic Investment Certificate is a Shariah compatible
investment certificate with a minimum investment of Rs. 50,000 and tenures from 3
months to 5 years. Profit on investment may be earned on the following basis:
• Monthly profit on 1, 2, 3 and 5 years (Minimum Investment Rs. 200,000)
• Quarterly profit on 1, 2, 3 and 5 years
• At maturity profit payment for all tenures
• Withdraw your investment any time during the course of your investment.
(Profit shall be paid only after completion of one month of 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. Profit
calculation and all banking transactions are in strict adherence to the Islamic Shariah,
monitored by our Shariah Advisor and the Shariah Supervisory Board.
Invest in Certificate of Islamic Investment

Riba-Free COII is available at all branches of Meezan Bank Ltd. We invite you to visit
any of our branches to experience the comfort of our personalized service. To make an
investment the bank requires customers to maintain either a current or a saving account
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with Meezan Bank. In order to open an account, fill in the Account Opening Form, bring
in the required documents, and get introduced by an existing banker.
Additional Features
Enjoy a range of valuable features including:
• High and very competitive returns
• Long-term security ensured
• Pre-mature withdrawal options available
• Free Online Banking services at any of our branches
MEEZAN AMDAN CERTIFICATE

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 under the principles of Mudarabah, the Meezan Aamdan Certificate and is
strictly in conformity with the rules of Islamic Shariah. Profit calculation and all banking
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Key Features
• Ensured Long-term security
• Minimum investment amount: Rs. 100,000/-
• Special attraction for Widows and Senior citizens with minimum investment
of PKR 50,000/-
• Available tenures of 5½ years and 7 years
• Profit payment on monthly basis.
• Pre-mature withdrawal options available.
• Free cheque book
• Free ATM withdrawals on investment of Rs.500,000/- and above ( 5 per
month)
• Free Internet banking facility
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MONTHLY MUDARBA CERTIFICATE
Riba Free Monthly Mudarabah Certificates is a flexible rupee based investment which
has been designed to give you a monthly return. The minimum investment required is
only Rs. 100,000 and you receive profit for each complete month of investment with the
Bank.
Working under the principles of Mudarabah and in strict conformity with the rules of
Islamic Shariah, the Profit calculation of Monthly Mudarabah Certificates and all other
banking transactions are in strict adherence to the Islamic Shariah, monitored by our
Shariah Advisor and the Shariah Supervisory Board.
The weightages used for profit calculation of the Monthly Mudarabah Certificate
are in the following tiers:
• Rs. 100K up to Rs. 4.99 Mn
• Rs. 5.00 Mn up to Rs. 9.99 Mn
• Rs. 10 Mn up to Rs. 49.99 Mn
• Rs. 50 Mn up to Rs. 99.99 Mn
• Rs. 100 Mn up to Rs. 499.99 Mn
• Rs. 500 Mn & above
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Additional Features
During your relationship with us, you would be entitled to receive the following
additional benefits.
• A 100% halal investment in strict compliance with Shariah
• Monthly profit payment to your current or saving account with us
• Bank balance certificates
• Free Online Banking services at all Meezan Bank branches
• Specialized 8 to 8 Banking and Ladies Banking at selected branches
MEEZAN PROVIDENCE CERTIFICATE

Meezan Providence Certificate is a long-term investment certificate specially designed to
cater to the needs of corporate and business concerns for purposes of investing their
Provident, Pension and Gratuity Funds.
As any prudent investor, your main concerns would be total security along with the best
returns possible, especially as these funds are a trust from your employees and one that
bears an important responsibility.
41
Meezan Providence rests on the well known and solid financial strength of Meezan Bank,
which has a strong and credible balance sheet with excellent operating profitability,
including a capital adequacy ratio that has placed the Bank at the top of the industry, a
long-term entity rating of A+, and a short-term entity rating of A1. Furthermore, our
sterling track record shows consistently beneficial and highly competitive returns for our
broad range of investors.
Finally, comes the benefit of truly Halal returns, a benefit you may not have had the
opportunity to enjoy before and one that you can now pass on to your employees, many
of whom would be grateful for such an opportunity.
Riba-Free Meezan Providence Certificate (MPC) works under the works under the
principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah.
Profit calculation and all banking transactions are in strict adherence to the Islamic
Shariah, monitored by our Shariah Advisor and the Shariah Supervisory Board.
Key Features
• A 100% halal investment in strict compliance with Shariah
• High Returns
• Long-term security ensured
• Minimum investment amount: PKR 1,000,000
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• Available tenures of 2, 3, 5 and 7 years
DOLLAR MUDARABAH CERTIFICATE
The Riba Free Dollar Mudarabah Certificate is a flexible dollar based investment which
has been designed under the principles of Mudarabah and is strictly in conformity with
the rules of Islamic Shariah.
The Certificate works under the principles of Mudarabah and is strictly in conformity
with the rules of Islamic Shariah. Profit calculation and all banking transactions are in
strict adherence to the Islamic Shariah, monitored by our Shariah Advisor and the Shariah
Supervisory Board.
Key Features
• Six monthly profit payment to your current or saving account with us
• Long-term security ensured. Minimum investment amount: USD 10,000/-
43
• Available tenures of 3 months, 6 months, 1 year, and 3 years
44
CAR IJARAH-AUTO FINANCE
Car Ijarah, Pakistan’s First Islamic Car Financing
As a step towards Meezan Bank’s mission to provide a one-stop shop for innovative
value added Shariah compliant products, Meezan Bank’s Car Ijarah unit provides a car
financing, based on the principles of Ijarah and is free of the element of markup.
Car Ijarah is Pakistan’s first Markup 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 markup-based transaction.
Meezan Bank’ Car Ijarah is a car rental agreement, under which the Bank purchases the
car and rents it out to the customer for a period of 3 to 5 years, agreed at the time of the
contract. Upon completion of the lease period the customer gets ownership of the car
against his initial security deposit.
Car Ijarah also features Used Vehicles!

In addition to our leasing of new cars, Meezan Bank also provides the unique opportunity
of leasing second hand, both locally assembled and imported vehicles. This feature is
specifically designed as a highly economical option. The Used Car Ijarah facility is made
available at a minimum-security deposit as low as 20%. Financing of used cars are
subject to a selection criteria.
Shariah Compliance
45
Car Ijarah, designed under the supervision of Meezan Banks Shariah Supervisory Board,
is unique to car leasing facilities provided by other banks.
Key Features of Car Ijarah
• Low monthly rental
• Rental paid after delivery, not in advanced
• Fastest processing and delivery
• Tracker option available
• Minimum security deposit as low as 10%
• All new, used, local, imported and luxury vehicles can be financed
46
WORKING CAPITAL FINANCE
Working Capital Finance Solutions
(for short term financing requirements)
Parts of the wide range of Shariah complaint solutions for the customers are
Murabaha and Istisna’a, designed to meet working capital requirements. For example, if
you need finance for purchasing raw materials for your industry or are trading in goods
then you could use Mudarabah or Istisna’a to meet your financial needs.
Murabaha
One of the most common modes of finance employed by Islamic Banks, Murabaha is
based on the exact requirements of each customer. It can be defined as a sales transaction
where Meezan Bank purchases the commodity and sells it after adding an agreed profit.
Thus, it is not a loan given on markup - it the sale of a commodity on a deferred price.
Hence Murabaha involves the purchase of a commodity by Meezan Bank on behalf of a
customer and the subsequent resale to the customer on cost-plus-profit basis. The cost
and profit margin to the bank is expressly disclosed to the customer.
Simply put, rather than advancing money to the customer, Meezan Bank buys the
commodity from a third party and sells it to the customer at an agreed price, which
includes an element of profit.
47
So what is the difference between Murabaha and a Sale?
A simple sale in Arabic is called Musawamah - a sale that does not involve disclosing or
referring to the cost of goods sold. However, when the cost price is disclosed to the client,
it is called Murabaha.
Istisna’a
Istisna’a is a sale transaction where a commodity is transacted before it comes into
existence. It is an order to manufacture a specific commodity for the purchaser. The
manufacturer (our customer) uses its own material to manufacture the required goods. In
Istisna’a, price is fixed with the consent of all parties involved. Similarly all other
necessary specifications of the finished product are agreed beforehand.
Istisna’ as a mode of financing
Istisna Finance is used to cater for the working capital requirements of a business
involved in the manufacturing of goods. It is ideally suited for exporters and
manufacturers who have export orders in the shape of Sight/Usance Letter of Credit/
Sight Export Contract D/P/ Usance Export Contract D/A.
48
PROJECT FINANCING, EXPANSION AND BMR
Project Financing, Expansion or BMR Requirement Solutions
(For medium and long term financing requirements)
Two of the most commonly used Islamic financing solutions availed by businesses today,
Diminishing Musharakah and Ijarah are ideal for expansion of businesses, BMR
requirements or other medium to long term financing requirements.
Diminishing Musharakah
Using this financing model, Meezan Bank and the customer participate in the joint
ownership of an asset. The asset is divided into a number of units and the customer
periodically purchases these units from the bank over a specified period. Over time, the
customer purchases all units owned by the bank, making him or her sole owner of the
asset or the commercial enterprise.
Diminishing Musharakah is most commonly used for the financing of fixed assets,
projects, homes and automobiles.
49
Ijarah
In contrast to diminishing musharakah, this mode of financing is based on the provision
of the required tangible assets, such as property, machinery, etc, on rental for an agreed
period of time. The concept is similar to “leasing”, which is common in conventional
banking. However there are some specific prohibitions which render conventional leasing
to be forbidden under Shariah.
Ijarah is commonly used for long and medium term fixed asset financing, project
financing and for retail products such as homes and automobiles.
50
ISLAMIC EXPORT REFINANCE SCHEME
Islamic Export Refinance Facility
The launch of this product made Meezan Bank the first Islamic bank in Pakistan
to offer Refinance facilities with complete compliance to Shariah. This product
provides for all the unique requirements of exporters and is available in both Part-
I and Part-II as per the original Export Refinance Scheme of the State Bank of
Pakistan.
LETTER OF GUARANTEE FACILITY
A complete range of products and services for importers and exporters are available.
Based on various modes of Islamic Finance, the solutions have been designed to suit the
needs of our customers. Some of the key services offered include:
Letter of Guarantee Facility

• Products for Exporters
• Export bills for collection
51
• Export (Sight) bills purchase under Salam Arrangement
• Export (Usance) bills purchase under Murabaha Arrangement
• Products for Importers
• Sight Letter of Credit
• Usance Letter of Credit
52
ADVISORY SERVICES
Realizing the increasingly diverse needs of our customers for advisory and structured
finance transactions, a specialized unit focusing on Investment Banking has been
established at Meezan Bank. The Investment Banking department provides unique
structuring capability using complex Shariah structures for transactions so as meet
customer need. Meezan Bank as torchbearer of Islamic Banking has made a significant
contribution in the Investment Banking industry by playing leading roles in business
transactions amounting to PKR 53 billion in the year 2007.
Key Services
• Syndication Structuring
• Privatization Mandates
• Mergers & Acquisitions
• Advisory Services
53
54
MONEY TRANSFER
The Meezan Bank’s remittance services are simple and reliable. They are available at
your doorstep through a wide and efficient network of corresponding banks worldwide.
Only leading global financial institutions form this network of correspondent banks.
Advantages of Meezan Home Remittance:
• Quick Remittance in major currencies i.e. USD, GBP, EUR, JPY, CHF, SGD,
AUD
• Extensive branch network in all major cities of Pakistan
• Instant online transfer within our branch network without any charges
• Free Internet banking facility
Easy Guidelines for Money Transfer
If you wish to remit money to Pakistan, simply give instructions to your existing bank for
money transfer by providing the name of your preferred Meezan Bank branch and
beneficiary account number.
55
DOLLAR MUDARABAH CERTIFICATE
The Riba Free Dollar Mudarabah Certificate is a flexible dollar based investment which
has been designed under the principles of Mudarabah and is strictly in conformity with
the rules of Islamic Shariah.
The Certificate works under the principles of Mudarabah and is strictly in conformity
with the rules of Islamic Shariah. Profit calculation and all banking transactions are in
strict adherence to the Islamic Shariah, monitored by our Shariah Advisor and the Shariah
Supervisory Board.
Key Features
• Six monthly profit payment to your current or saving account with us
• Long-term security ensured. Minimum investment amount: USD 10,000/-
• Available tenures of 3 months, 6 months, 1 year, and 3 years
56
57
DOLLAR SAVING ACCOUNT
Meezan Bank is pleased to offer Riba-Free Dollar Saving Account, a foreign-currency
based investment opportunity that is set up on the principles of Shariah and as a result is
free from the element of markup.
With a minimum of only $100 you can open a Dollar Saving Account with us under a
Mudarabah arrangement that is strictly in conformity with the principles of Islamic
Shariah. The return earned on the Mudarabah pool is calculated every month and the
profit ratio 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
shall be disbursed to you every month.
Additional Features
bank with us, we offer the following additional conveniences to our customers:
• Personalized cheque books
• No restriction on withdrawals or number of transactions.
• Monthly profit payment
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• Taking stop payment instructions
• Taking hold mail instructions
• Issuance of duplicate statement of account
MEEZAN BANK TREASURY
Meezan Bank’s treasury is guided by Shariah with the objective of reviewing,
streamlining, and controlling the bank’s domestic and international treasury related
operations. Treasury caters to the branches and customers for their entire foreign
exchange requirement with efficiency and professionalism. Ready/ spot as well as all
forward cover services are provided to branches/customers within Shariah guidelines.
Customers are also provided advice on a regular basis about the currency movement by
our dealing room augmented by market outlook (without any commitment & obligation)
Treasury has enhanced its market activity with increased depth and enhanced volumes,
making an impact in the inter-bank FX market. Due to its good relationship with other
treasuries, the institution has the ability to generate sufficient amount of liquidity at a
time through inter-bank market on Shariah-approved Musharaka basis.
Meezan Bank conducts Commodity Murhaba transaction to optimize its returns on its
dollar portfolio, besides participating in local/ international sukuk issues, e.g. WAPDA,
Qatar, Dubai sukuks, etc. This treasury is the only treasury in Pakistan with a mandate to
59
provide Shariah compliant investment opportunities in capital market that provides halal
income ultimately to shareholders
Treasury Contact Details:
• Amal Zehra (Corporate Dealer):
amal.zehra@meezanbank.com
• Ahmed Usman Sheikh (Corporate Dealer):
ahmed.sheikh@meezanbank.com
• Osama Niaz Ahmed (Dealer, Interbank):
osama.ahmed@meezanbank.com
• Zia ur Rehman (Senior Dealer, Corporate Treasury):
zia.rehman@meezanbank.com
• Raza Zaidi (Dealer, Interbank)
raza.zaidi@meezanbank.com
• Murad Dhanani (Senior Dealer, Corporate Treasury):
murad.dhanani@meezanbank.com
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• Sara Saiyed (Chief Dealer, Interbank):
sara.saiyed@meezanbank.com
• Mr. Yasir Ali Khoso (Dealer, Interbank):
yasir.khoso@meezanbank.com
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CREDIT ADMINISTRATION DEPARTMENT
The chairman of the Bank in his review for 2007 annual report define the credit policy of
Bank as:
“CONSERVATIVE YET DYNAMIC CREDIT POLICY”
OBJECTIVE:
The overall objective of the department is to provide independent assurance
to branch management and head office credit monitoring division that lending
activities are properly controlled and monitored.
FUNCTIONS:
• Documentation
• Lodgment of documents and cash collateral
• Reimbursement audit certificate
• Limit input in bank smart
• Post disbursement monitoring
• Monitoring of irregular doubtful and bad debts
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• Reporting
Here it is necessary that we must have an overview of at least the most important
documents that are relevant to this department.
DOCUMENTATION
• Sanction advice
• Facility offer letter
• General documentation
• Standard charge documents
• Legal document pertain to properties
• Cash collateral
• Charge with SECP
• Other securities
• Insurance covers
• Guarantees
Now we discuss above separately.
♦ Sanction advice
A type of document which is made when the senior officer of bank discuss all the
confidential terms & condition that the demanded facility should be provided or not so
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we can say that it is a day of final decision that facility should be provided or not. At that
time borrower worthiness is checked according to that decision made.
♦ Facility offer letter
When this is decided that loan should provided to borrower than branch made facility
offer letter that what type of facility should be provided & document are required from
borrower according to this facility.
♦ General documents
After facility offer letter general document are checked these document consist of
• Complete account opening form
• Facility request letter
• BBFS
• CIB
• Credit opinion
• Search report
• Audited /unedited financial
• Borrower’s profile
• Checklist of state bank regulation
• Board resolution to borrow
• Memorandum and article of association
64
At this stage all the past records are checked & verified to ensure that past record of the
borrower matches with data provided in request letter. The most important document,
which is checked is CIB report. In this report all the past loan of borrower are showed
and their repayment record is also mentioned. The company polices are also collected and
their aim is checked that whether the company is working in the same direction which it
has mentioned.
♦ Standard charge document
 CF (Current finance)
 TF (Term finance)
 FAPCI (Finance against packing facility)
 FAFB (Finance against foreign)
 LBP (Local bill purchase)
 FBP (Foreign bill purchase)
 SLA (Sight letter of credit)
 ULE (Usance letter of credit)
 FIM (Finance against import)
 FATR (Finance against trust receipt)
 GUARANTEE
65
In this stage we see that what type of facility he or she want to take or what type of
facility he or she already have. Is the requirement according to nature of business &all
facility term & condition are change accordingly to that.
Legal document pertain to properties
 Title deeds
 Copy of record of rights
 Copy of mutation
 NEC
 PTI
 AkS shajra
 Site plan
 Valuation
 Site visit report
 Power of attorney
 Agreement to create mortgage
 Token mortgage
 Predisbursment lawyers opinion
 Perfection certificate of lawyer
66
These all documents are taken from borrower & bank make a file of these documents.
These documents are most because when some time bank have to take legal action
against borrower then bank know that who are the owner or partner of the company what
property is for mortgage its paper are taken and these all the things are provided to bank
own lawyer which finally decided that is everything right and he make a certificate or
borrower can bring this certificate himself from the recommended lawyer of bank.
 Cash collateral
 Lien on deposits
 Lien of deposits
Guarantees
 Personal guarantees of borrower
 Personal guarantees of mortgagors
 Counter guarantees
 Cross corporate guarantees
Guarantees are most important thing because in this document it is written that who is
responsible in case of default. Personal Guarantees are consider most important because
mention person has to pay whenever he is alive.
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CAR IJARAH
OBJECTIVE:
The main objective of the car finance department is to finance all the cars manufactured
or assembled in Pakistan at a very reasonable markup.
THE PRODUCT :
I have presented the procedure of car finance department in question answer form
because in my opinion it will better explain the whole of the procedure.
Can I avail the car loan facility?
Yes, you can avail the car loan facility from Meezan Bank to purchase a brand new car if
you are:
 Pakistani national identity card holder
 Over 20 years of age maximum 60 years in case of salaried and 62 is case of a
businessperson at the time of maturity of the loan.
 Salaried, businessman or self employed.
Which cars can I apply this loan for?
All brand new Pakistani assembled / manufactured cars (unregistered)
How much loan facility can I avail?
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Minimum amount is Rs 200,000/- and maximum is Rs.2000,000/-
What is the period of loan?
The loan can be availed from 1 year to 5 years with early adjustment facility at any time
before the maturity.
How much initial down payment do I have to make?
20% of the value of car
What other charges do I have to pay?
You have to pay one time fee of Rs 3000/- being amount of processing and
documentation charges and first year’s insurance premium.
Who will insure the car?
Meezan Bank has made arrangements with the top insurance companies who are offering
special lowest insurance rates for Meezan Bank clients.
How do I repay the loan?
You will repay the loan by making easy equal monthly installments to Meezan Bank in
the form of post-dated cheques.
Can I repay the loan before the maturity?
Yes, you have the option to repay the loan at any time during the tenure of the loan.
What is the security of the loan?
69
The car is the security, which will be hypothecated in the favors of bank and a lien will be
marked with the register.
What if I want the car in the name of my family member?
You can include your spouse, children (18 years and above) or parents as co applicants
for the car loan and the car can be registered in the names.
What documents are required to get a car loan sanctioned?
Our representatives will discuss the documents you are required to submit in detail. An
indicative list is given below:
 Two passport size photographs
 Copy of national I.D card
 Bank statement for last six months
 Salary certificate (in English) specifying the name, date of joining, designation
and salary details (for salaried individuals)
 Business proof (for a business person)
 Current utility bill of your residence in Pakistan
 Copy of the national ID card of the co-borrower (if the car is to be in the name of
the co-borrower)
How is it difficult from other financing schemes available in Pakistan?
• Easily affordable & flexible installments
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• Flexibility of adjustment at any time during the tenure
• Quick processing
• Minimum down payment
• Minimum insurance
What is the first step I need to take?
Call or visit ort ask your family member to visit any of our branches in Pakistan
This was the whole concept which is clearly defined here .now the details of the
application form are given that what is included and what is needed to be filled in the
form under the following heads:
Personal details
• Full name
• Fathers/husband name
• Date of birth
• National ID card no
• National tax no
• Marital status
• No of dependents
• Educational qualifications
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• Current residential address
• If rented, monthly rent
• Residential telephone no
• Residential status
• Type of accommodation
• Residing since
• Permanent home address
• Personal mobile ph no
• Existing car
• Make and model of current car
• Car status
Employment details (for salaried individuals)
 Name of present employer
 Address
 Current designation
 Employed since
 Business telephone no
 Fax no.
 Official mobile no.
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Previous employer
 Name of the employer
 Address
 Last designation held
 Service tenure
 Office telephone no
 Fax no.
Business details ( for professional and self-employed individuals )
• Name of business
• Nature of business
• Constitution of firm
• Address
• Established since
• Registered with
• National tax no
• Business telephone no
Mobile phone no
Income details
• Regular monthly gross income (cost of equitation of dependents)
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• Guaranteed bonus
• Other monthly income
• Source of other monthly income
• Average monthly savings
74
TREASURY AND INVESTMENT
Money Market
• Short term money market inter-bank trading.
• Active Treasury Bills trading in secondary market.
• Forward – forward inter-bank money market trading.
• Money market linked lending to and borrowing from
corporate clients.
Foreign Exchange Market
• Active trading in ready and forward USD/PKR.
• Active quotations of foreign exchange rates in fifteen major currencies.
• Information in respect of prevailing rates of most of the currencies of the
world for
corporate clients and individuals.
• Forward – Forward foreign exchange rates of USD/PKR.
• Active swap trading in USD/PKR and other major currencies such as
EUR, GBP, JPY and CHF.
Investment
• Active Investment in treasury bills (TBs).
• Active Trading in Pakistan Investment Bonds (PIBs).
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• Active investment in Certificate of Investment (COIs)
• Active investment in Terms Finance Certificates (TFCs)
Government Securities
• Efficient service for individuals and corporate clients for buying and
selling govt. securities on their appropriate requests.
Custodianship
• Investment Securities Portfolio Accounts of Customers for holding on
their behalf Treasury Bills, Pakistan Investment Bonds.
Financial Advisory Services
• Briefing on current information available in market in respect of
prevailing rates of USD/PKR.
• Briefing on current information available in market in respect of foreign
exchange rates of major foreign currencies.
• Future expectations and sentiments on major foreign currencies
including Pak.Rs.
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ONLINE BANKING
Meezan Bank now offers the facility of on-line banking to its customers through its
countrywide network of branches. Customers can use the ATMs or the banking counters
of any branch for day-to-day banking needs, irrespective of branch where they maintain
their accounts.
For Corporate customers centralized Cash Management facility is also offered through
on-line banking.
PHONE BANKING
"Meezan Phone banking” is available to all customers on a countrywide basis.
Customers can dial 111-225-111 (without any city code/prefix) from their respective
cities i.e. 21 cities where Meezan Bank is present, and get prompt services from the
Centralized Phone Banking Services.
Customers enjoy 24x7 Round the Clock Phone Banking Services.
77
Meezan Bank is the first bank in Pakistan to offer Centralized UAN connectivity from
21 cities to its Call Center with Hunting & ACD facilities.
78
HOME FINANCE
PRODUCTS OF HOME FINANCE
Buy Your Home
With this facility, you no longer need to just dream about the home you want for yourself
and your family .We will provide you up to Rs: 7.50 million or 70% of the purchase price
of the property (whichever is less), so that you can realize your dream and enter the
reality of owning a home!.
Payment period ranges from 3 to 20 years
Build Your Home
Family! No problem. We will provide you up to Rs:7.50 million, or 70% of the estimated
value of constructed property to enable you to say good-bye to rent forever! Even You
have a plot, and need finance to construct a home, which excites everyone in your if you
don't have a plot, we will provide you up to 60% of the value of the plot that you have
selected to purchase! Do we excite your imagination?
Payment period ranges from 3 to 20 years.
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Renovation Your Home
You already own a home, but need extra space for a growing family. Simply apply for
financing of up to Rs: 2.50 million or 30% of the surveyed value of your home
(whichever is less) and get yourself the extra space. You can stretch payments for up to 7
years
Start it Together
The crown jewel of our Home Finance Scheme, the golden opportunity for someone
starting a career to buy an already constructed housing unit so early in life! We offer a
moratorium of up to 3 years in Principal payments, for a financing of up to 20 years. You
service only the mark-up element initially, and principal repayment starts after the end of
monitories period. Home Start is specially designed for young people to have there own
home
Transfer
Does your existing installment on a home finance leave you with nothing to spend? You
need not worry any more because we have genuinely low rates and payment options that
could leave more funds with you each month. With our BTF, repaying your home finance
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will not make you break into a sweet! Transfer up to Rs: 7.50 million or 100 % of the
existing finance, whichever is less.
Stretch your repayment period for up to 20 years again.
Steps To Arrange a Home

• We provide you with all the information you need about Meezan Bank Home
Finance. This can be through a face-to-face meeting with our Relationship
Officer, or over the telephone, or through the post.
• You give us some basic information about your income and the amount you need
so that we can give you an agreement in principle.
• Once you have decided on the amount you want, you complete an application
form and pass it on to us, together with the required documents.
• We make some inquiries about your financial circumstances.
• We carryout a valuation of the property and verification of your income
• Once we have carried out all the initial processing, we send you our offer
through a “Facility Advice Letter”.
• You sign the Facility Advice Letter and return it to us.
• Our Documentation Control Center will get in touch with you to complete
Finance & Security documentation including legal opinion on the title, documents
of the property and also the insurances.
• You sign the Finance Agreement and Charge documents.
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• Our legal advisor will accompany you to the Registrar’s office on the appointed
date with our cheque against the financing for conveyance of the property and
your home finance begins.
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FINANCIAL STATEMENT ANALYSIS
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BALANCE SHEET
2008 2007 2006 2005
2004
(000) (000) (000) (000)
(000)
Assets
Cash and bank balances 5763710 5644028 5897394 3956938
2623588
Balances with other banks 1344974 3729549 4134875 2855823
1751083
Due from financial 18108000 8850000 3700000 ----------
---------
institutions
84
Investments 14286949 10535186 2877554 1606490
1429053
Financing 39768481 34576339 27031016 19740886
12339745
Operating fixed assets 1880515 1032963 531262 305585
204737
Other assets 4123441 2810494 2266522 2210100
1349184
Total assets 85276070 67178559 46438623 30675822
19697390
Liabilities
Bills payable 1057017 1192160 563228 260732
196145
Due to other institutions 4008496 2415606 4285212 2981714
2862139
85
Deposits and other accounts 70233875 54582353 34449441 22769262
13769807
Subordinated loans ----------- ---------- ----------- -----------
-----------
Liabilities against assets ----------- ---------- ----------- -----------
-----------
subject to finance lease
Deferred tax liabilities 453038 430377 398304 170274
769631
Other liabilities 3548666 2851407 1979079 1469258
286
Net assets 5974978 5706656 4763359 3024582
2098382
Presented by:
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Share capital 4925961 3779897 3779897 2036582
1346017
Reserves 845022 720785 528085 407235
256578
Unappropriated profits 5701141219228 448427 527123
258325
87
HORIZONTAL ANALYSIS OF BALANCE SHEET
2008 2007 2006 2005
2004
(%) (%) (%) (%)
(%)
Assets
Cash and bank balances 207 204 208 151
100
Balances with other banks 87 213 276 163
100
Due from financial 489 239 100 000
000
institutions
Investments 999 737 204 112
100
88
Financing 322 280 223 160
100
Operating fixed assets 922 506 260 149
100
Other assets 307 210 169 164
100
Liabilities
Bills payable 551 621 287 133
100
Due to other institutions 140 84 150 104
100
Deposits and other accounts 512 398 251 165
100
Subordinated loans 000 000 000 000
000
89
Liabilities against assets 000 000 000 000
000
Deferred tax liabilities 59 56 52 22
100
Other liabilities 242 195 135 100
000
Net assets 286 273 228 144
100
Presented by:
Share capital 367 281 281 151
100
Reserves 330 281 206 159
100
90
Unappropriated profits 221 472 174 204
100
91
COMMENTS ON HORIZONTAL ANALYSIS OF BALANCE
SHEET
Horizontal analysis of balance sheet shows that the cash and bank balances of Meezan
Bank Limited increased from year 2004 to year 2005 and then to year 2 006 but in the
year 2007 and year 2008 these balances remain almost stable. So far as balances with
other banks is concerned, they gradually increased to year 2006 then they started
decreasing in year 2007 and in year 2008 they fell to the extent of 87 % of that of year
2004. It may be because in year 2008 the amounts due from financial institutions is
considerably increased as compared to that of previous years. In my opinion this is not a
good sign. It shows that the liquidity of the bank is decreased in the year 2008 and this
amount is given as a loan to other financial institutions. The profit on these funds will
definitely be low as compared to the profit that might be earned from the bank’s own
customers but now this profit would be transferred to other financial institutions.
The figure of investments also show remarkable increase from year to year which shows
that bank is trying not to keep its funds idle. The amount of financing is also increased
from the year 2004 to year 2008 continuously which is a healthy sign.
92
The amount of operating fixed assets is increased continuously which is the evidence that
bank is increasing its branch net work nation wide and in order to meet the infrastructure
requirements of this network, the bank has to increase its operating fixed assets.
Other assets of the bank are increased at a regular pace from year 2004 to year 2008
which shows that the bank is fully aware of the emerging requirements of its network.
The amount of bills payable is increased from year 2004 to the year 2008 which shows
that bank is entering into contracts with other businesses for earning profits. Similarly,
the amounts due to other institutions is increased up to year 2006 but in the year 2007 this
amount is decreased to 84 % of that of year 2004 but in year 2008 this amount is
increased again to 140 %. Overall this situation shows that bank is relying on its own
funds rather than borrowing from other institutions.
The major liability of the bank i.e. deposits and other accounts is considerably increased
from year 2004 to year 2008 which shows that the customers are confident about the
stability of the bank and there is an awareness among the customers about the Islamic
way of banking.
The amount of net assets i.e. total assets less liabilities, on the whole is satisfactory
because this figure is increased from year 2004 to year 2008. in year 2008 this figure is
286 % to that of year 2004 which shows that the net assets have satisfactorily increased.
93
During all these years, the bank arranged capital by issuing extra shares from time to
time. Increase in share capital was not because of the funds needed by the bank but it was
also because the bank has distributed in the form of stock dividend. This also shows that
the bank wanted to save the liquid reserve to earn more profits by investing these funds in
its core operations.
The situation of reserves and unappropriated profits is also satisfactory and shows that
the bank has saved the sufficient amount of reserves to preserve its capital structure.
94
VERTICAL ANALYSIS OF BALANCE SHEET
2008 2007 2006 2005
2004
(%) (%) (%) (%)
(%)
Assets
Cash and bank balances 6.75 8.40 12.68 12.88
13.31
Balances with other banks 1.57 5.54 8.89 9.29
8.89
Due from financial 21.22 13.17 7.97 0.00
0.00
institutions
Investments 16.74 15.68 6.18 5.22
7.21
95
Financing 46.63 51.47 58.22 64.36
62.62
Operating fixed assets 2.20 1.53 1.14 0.98
1.02
Other assets 4.83 4.18 4.86 7.20
6.80
Liabilities
Bills payable 1.23 1.77 3.36 0.85
0.96
Due to other institutions 4.69 3.59 9.22 9.72
14.53
Deposits and other accounts 82.36 81.26 74.18 74.21
69.88
Subordinated loans 000 000 000 000
000
96
Liabilities against assets 000 000 000 000
000
Deferred tax liabilities 0.53 0.64 0.84 0.55
3.86
Other liabilities 4.15 4.24 4.24 4.76
0.00
Net assets 7.00 8.50 10.26 9.86
10.65
Presented by:
Share capital 5.77 5.61 8.12 6.62
6.81
Reserves 0.98 1.07 1.12 1.30
1.27
Unappropriated profits 0.67 1.80 0.95 1.69
1.27
97
Total Assets 100 100 100 100 100
COMMENTS ON VERTICAL ANALYSIS OF BALANCE

SHEET
In the year 2004, the cash and bank balances were13.3 percent of the total assets whereas
the balances with other banks were 8.89 percent. However the amounts due from other
financial institutions were zero percent. This shows that in this year which was actually
the second year of the bank’s operations, the scope of its operations was very limited.
Similarly the amount of investments was 7.21 percent, operating fixed assets were 1.02
percent and the other assets were only 6.80 percent. However the percentage of Financing
was62.6 percent of the total assets which shows that the bank was able to extend 62.6
percent of its total funding as loans in the form of Islamic financing.
Bills payable is the year 2004 were only 0.96 percent, the balance due to other
institutions was 14.53 percent and the deferred tax liability was 3.86 percent. However
the largest amount of liability was deposits and other accounts which were up to 70
percent of total assets. This shows that the bank was not so much efficient in managing its
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funds because the amount extended to customers was about 62 percent but the deposits
received by the bank from the customers were about 70 percent.
The total amount of shareholders’ funds was about 9 percent which shows that the bank
was able, from its very beginning, to operate on an optimal capital structure.
In the year 2005, the cash and bank balances, balances with other banks, investments,
operating fixed assets, and other assets show a little improvement on the whole but the
amount of financing could not be improved very much. However there was a positive
change of about 2 % in the amount of financing which is not sufficient when it is
compared with the amount of deposits and other accounts which were increased from 70
percent in 2004 to 74 percent in 2005
The situation goes downward in the year 2006 when the percentage of deposits and other
accounts to total assets was 74.18 percent but the percentage of financing to total assets
was only 58.22 percent. This shows that the customers trusted on the bank and increased
the amount of deposits in islamic banking but the bank, on the other hand, could not be
equally efficient.
The situation remained continued in the year 2007 and the year 2008 where the
percentage of deposits increased to 82 percent whereas the percentage of financing
decreased to 47 percent. However the bank also realized the situation and started utilizing
99
the funds in other investments and lending to other financial institutions. This move of
the bank tried to balance the situation which was created by under utilization of the funds
collected from the customers.
100
INCOME STATEMENT
2008 2007 2006 2005
2004
(Rupees in Millions)
Profit earned on financings,
investments and placements 6803 4573 2704 1459
534
Return on deposits and
other dues expensed (3088) (2451) (1464) (690)
(250)
Net spread earned 3714 2121 1240 768
284
Less
Provision against non-
101
performing financings (net) (428) (435) (121) (68)
(16)
Provision for diminution in
value of investments
and impairment (288) (0.8) (1.2) 29.8
(1.7)
Net spread after provisions 2997 1685 1117 729
265
Other Income 707 1347 690 622
365
Total Income 3705 3033 1807 1351
630
Less
Other expenses (2713) (1764) (1027) (718)
(409)
102
Profit Before Tax 992 1269 780 633
220
Less
Taxation (371) (305) (175) (213)
Profit after tax 621 963 604 419
224
103
HORIZONTAL ANALYSIS OF INCOME STATEMENT
2008 2007 2006 2005
2004
investments and placements 1274% 856% 506% 273%
100%
other dues expensed 1235 980 586 276
100
Net spread earned 1308 747 437 270
100
Less
104
performing financings (net) 2675 2719 756 425
100
and impairment 16941 47 71 1853
100
Net spread after provisions 1131 636 422 275
100
Other Income 194 369 25 170
100
Total Income 588 481 287 214
100
Less
Other expenses 668 431 251 176
100
105
Profit Before Tax 451 577 355 287
100
Less
Taxation 9275 7625 4375 5425
100
Profit after tax 277 430 270 187
100
Year 2004 is taken as a base year
106
COMMENTS ON HORIZONTAL ANALYSIS OF INCOME
STATEMENT
Horizontal analysis of income statement shows that the profit earned on financing,
investments and placements has considerably increased over the years. Similarly the
return on deposits and other dues expensed was also increased with the same pace. The
situation depicts that the bank has been beneficial on the whole.
The most crucial situation that is obvious from the bank’s income statement is the amount
of provision against the non performing financings. This amount has increased over the
years at an alarming rate. It shows the bank’s inefficiency in the formulation and
implementation of credit and collection policy.
Another item on the income statement that has decreased the bank’s net income to a large
extent is the provision fore diminution in value of investments and impairment. This
amount is increased up to 16941 % in 2008 as compared to that of 2004. The bank should
seriously consider that the investment must be made carefully so that there may not be
such a huge decline in their value.
107
The other income of the bank has not played a considerable role in the income statement
however, the amount of other expenses are increased to a large extent as compared to that
of year 2004. We shall analyze later in the vertical analysis that what is the percentage of
these two items with respect to the total revenue.
Lastly, the figure of profit after tax shows an increase of 277 % from that of the year
2004. The analysis shows that the profit continuously increased from the year 2004 to
2007 but in the year 2008 this ratio decline to a large extent.
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VERTICAL ANALYSIS OF INCOME STSTEMENT
2008 2007 2006 2005
2004
investments and placements 100% 100% 100% 100%
100%
other dues expensed 45 54 54 47.29
46.82
Net spread earned 55 46 46 52.71
53.18
Less
performing financings (net) 6.29 9.51 4.47 4.66
3.00
109
and impairment 4.23 0.02 0.04 2.04
0.32
Net spread after provisions 44 36.85 41.31 50
49.63
Other Income 10.39 29.46 25.52 42.64
68.35
Total Income 54.46 66 66.83 92.59
118
Less
Other expenses 39.88 38.57 38 49.21
76.59
Profit Before Tax 14.58 27.75 28.85 43.39
41.20
110
Less
Taxation 5.45 6.67 6.47 14.60
0.75
Profit after tax 9.13 21.06 22.34 28.72
42
Profit earned on financings, investments and placements is taken as a base
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COMMENTS ON VERTICAL ANALYSIS OF INCOME
STATEMENT
The vertical analysis of the year 2004, the second year of the bank’s operations, shows
that the return by the bank to its deposit holders is about 47 %. Ultimately the gross profit
earned by the bank on the financing was 53 %. Provisions for non performing financing
kept by the bank was about 3 percent and provision for diminution in the value of
investments and impairment was only about 0.32 percent. The other income of the bank
was about 68 percent but this item has not added much in the net income of the bank
because the percentage of other expenses was about 78 percent. Hence the net income of
the bank after tax remained at 42 percent.
In the year 2005, the situation remained almost the same except that the other income of
the bank was declined to the percentage of about 43 percent of gross revenue whereas the
other expenses were also declined to 49 percent. In this year the net income after tax of
the bank was decreased to 29 percent.
In the year 2006 the return paid by the bank was increased to 54 percent leaving a net
spread of 46 percent for the bank. The other income of the bank was decreased again to
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an extent of 25.52 percent and the other expenses were 38 percent of the gross revenue.
In this year the net income of the bank was decreased further to 22.34 percent.
In the year 2007, the situation remained almost the same with the exception that the
provision for non performing loans was considerably increased which is not a good sign.
However in this year the net income remained almost equal to that of year 2006.
The year 2008 has not been proved a good year in the history of the bank. Although in
this year the net spread earned by the bank was 55 % but the percentage of other income
of the bank was decreased with an alarming rate. In this year the percentage of other
income was only 10 % but the percentage of other expenses was about 40 percent. This
fact has worsened the situation on the whole and the bank’s net income decreased to the
maximum of only 9.13 percent which is the lowest of all the previous years.
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RATIO ANALYSIS
Return on Equity
Return on Equity = Net Profit after Tax / Stockholders’ Equity
2008 = (621187 / 6341097) x 100 = 9.80 %
2007 = (963501 / 5719910) x 100 = 16.84 %
2006 = (604251 / 4756409) x 100 = 12.70 %
2005 = (419455 / 2970940) x 100 = 14.12 %
2004 = (224358 / 1860920) x 100 = 12.06 %
This ratio shows the profit earned by the company as a percentage of the amount of
equity capital invested by the company in the business. In the year 2004 this ratio was
about 12 percent but this ratio seems to fluctuate in the later years. In the year 2005, this
ratio is improved to 14 percent but again in the year 2006 it is declined to about 12
percent. This is because the company has increased the amount of capital in 2006 but the
net profit after tax could not be increased according to that ratio. However in the year
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2007 the ratio was increased to the maximum of all the previous years in spite of an
increase in the stockholders’ equity. This is because the net profit was increased
proportionately to that. However in the year 2008, the situation is not so good because in
this year, the amount of profit declined and the company again has issued the equity
capital in the form of bonus shares.
Return on Assets
Return on Assets = Net Profit after Tax / Total Assets
2008 = (621187 / 85276070) x 100 = 0.73 %
2007 = (963501 / 67178559) x 100 = 1.43 %
2006 = (604251 / 46438623) x 100 = 1.30 %
2005 = (419455 / 30675822) x 100 = 1.37 %
2004 = (224358 / 19697390) x 100 = 1.14 %
Return on assets is the ratio that shows the percentage of net profit after tax to total
assets. This ratio is also called the return on investments because investment by the
115
company in the business is always in the form of different types of assets. This ratio of
Meezan Bank Limited shows that the return earned by the bank on its total investments is
decreasing from year to year. This is because the bank has continuously increasing its
investments in the total assets but against that investment the bank is not earning
sufficient amount of profits. The situation is somewhat better in the year 2007 where
because of highest of all the years’ profits, the return percentage is 1.43. The bank should
consider the situation and should try to rectify this.
Net Spread Margin
Net Spread Margin = Net return on Loans and Advances / Total Assets
2008 = (2997559 / 85276070) x 100 = 3.52 %
2007 = (1685888 / 67178559) x 10 = 1.98 %
2006 = (1117229 / 46438623) x 100 = 1.66 %
2005 = (729831 / 30675822) x 100 = 2.38 %
2004 = (265266 / 19697390) x 100 = 1.35 %
116
This ratio shows the gross earnings on financing less the return paid to the deposit
holders as a percentage of total assets. This is some sort of gross profit ratio because the
earning on financing is the main revenue of the bank where the return paid to deposit
holders is the cost of those funds. Here this ratio shows that the situation was better in the
year 200 but in the year 2006 it is again declined. Then in the year 2007 it again became
better while in the year 2008 surprisingly this ratio is the highest. Although the net profit
after tax in this year is lesser than that of the previous years but this ratio shows that the
bank has become efficient in its core operations and the problem lies with its other
income and other expenses as we have already seen in the vertical analysis of the income
statement for the year 2008.
Net Other Income Margin
Net Other Income Margin = Net Other Income / Total Assets
2008 = (707908 / 85276070) x 100 = 0.83 %
2007 = (1347893 / 67178559) x 100 = 2.01 %
2006 = (690561 / 46438623) x 100 = 1.49 %
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2005 = (622151 / 30675822) x 100 = 2.03%
2004 = (365093 / 19697390) x 100 = 1.85 %
Net other income margin is the percentage that shows the return earned by the bank from
the sources other than its core operations. Keeping in view the intense competition among
the banks today, a bank must seriously concentrate on the other sources because in this
sheer competition a bank is not in a position to earn premium revenue on the finances
provided. For Meezan Bank, this ratio shows that there have been the fluctuations in
other income from year to year but the situation is very bad in the year 2008 where this
ratio is the minimum of all the previous years. This is the reason that the overall
performance of the bank declined in this year.
Earnings per Share
Earnings per Share = Net Profit after Tax / Number of Shares
Issued
2008 = (621187 / 492596.1) =
Rs.1.26 per Share
118
2007 = (963501 / 377989.7) =
Rs.1.96 per Share
2006 = (604251 / 377989.7) =
Rs.1.88 per Share
2005 = (419455 / 203658.2) =
Rs.1.46 per Share
2004 = (224358 / 134601.7) =
Rs.1.67 per Share
EPS is the ratio that measures how many rupees the company has earned against one
ordinary share issued to the shareholders. The greater is the ratio, the better it would be. It
is because the company will have the greater amount of profits per share to pay as
dividend to the shareholders. This ratio is the most important ratio from the shareholders’
point of view because they also want to know that how much the company is going to
pay them against the number of shares they are having. For Meezan Bank, this ratio
improved from the year 2004 to the year 2007 with a little exception in 2005 but in the
year 2008 this ratio fell to the minimum of Rs.1.26 per share which is because the
company has issued bonus shares to its shareholders as a stock dividend.
119
Stock Dividend Percentage
2008 = 8.6 %
2007 = 20 %
2006 = 10 %
2005 = 16 %
2004 = 15 %
Over the years from 2004 to 2008, the bank has been paying the stock dividend instead of
cash dividend. Although this is not a good sign but we can say that since this is because
of the consent of the shareholders that’s why it is compromisable. This ratio shows that
the bank has been paying sufficient amount of dividend to the shareholders from the year
2004 to the year 2007 but in the year 2008 this ratio is declined. This was because in the
year 2008, the bank had not earned a handsome amount of profits to justify the larger
stock dividends. Anyways, in my opinion, the bank should consider the situation and try
to declare dividend in the form of cash also.
120
Market Price per Share
2008 = Rs.21.48 per Share
The market price per share has been fluctuating from year to year but the overall impact
on the market price is encouraging. However we suggest that the bank should stop paying
stock dividends as this increases the number of shares in circulation and the ultimate
result will be the decline in the market price.
121
Price Earning Ratio
Price Earning Ratio = Market Price per Share / Earnings per Share
2008 = 21.48 / 1.26 = 17.03
2007 = 38.55 / 1.96 = 15.12
2006 = 19.50 / 1.88 = 10.51
2005 = 23.25 / 1.46 = 15.92
2004 = 16.70 / 1.67 = 10.02
The price earnings ratio is commonly used to assess the owner’s appraisal of share
value. This ratio measures the amount that investors are willing to pay for each rupee of
company’s earnings. The level of this ratio indicates the degree of confidence that
investors have in the firm’s future performance. The highest the P/E ratio; the greater the
investor confidence in the company. The figures calculated above show that the investors’
confidence in the company is increasing year by year as this ratio is increasing from
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earlier years to the later years. In the year 2006, this ratio was decreased but soon after
that this ratio was improved in 2007 and became even better in 2008.
Net Profit before Tax Margin
2008 = 13.21 %
2007 = 21.43 %
2006 = 22.98 %
2005 = 30.42 %
2004 = 24.56 %
Net profit before tax margin represents the profit earned before tax as a percentage of
gross revenue. The need to calculate this ratio is that the actual performance of the bank
is measured before tax and not after tax. So this ratio shows that the profit earned by the
bank increased in the year 2005 but in the later years this ratio continued to decline and in
the year 2008 this ratio was only 13.21 percent as compared to that of year 2004 where it
was about 25 percent.
123
Net Profit after Tax Margin
2008 = 8.27 %
2007 = 16.27 %
2006 = 17.80 %
2005 = 20.15 %
2004 = 24.94 %
Net profit after tax margin was about 25 percent in the year 2004 whereas it started
decreasing gradually in the subsequent years. The main reason for this decrease in the net
profit was increase in the other expenses and also because of an increase in the amount of
taxation. Although the better measure for the efficiency of the management is the net
profit before tax margin but since that profit is not on the disposal of the management so
it is better to calculate the net profit after tax margin so that the disposable income of the
organization should be measured. And this ratio shows that the efficiency of the
organization is going decreasing year by year.
124
Operating Expenses to Income
2008 = 73.36 %
2007 = 67.71 %
2006 = 73.40 %
2005 = 71.21 %
2004 = 77.24 %
The operating expense to income ratio shows that the organization has been able to
control its operating expenses over the year from 2004 to 2008. This ratio was 77.27
percent in the year 2004 and in the year 2008 it is ended with a little decrease to 73.36
percent. In spite of the stability of this ratio the net profit margin of the bank declined to a
considerable extent. This was because of an increase in the other expenses of the
organization. So the bank should focus to decrease its operating expenses so that its net
profit should be improved.
125
Financing to Deposit Ratio
2008 = 51.62 %
2007 = 56.90 %
2006 = 65.68 %
2005 = 73.86 %
2004 = 69.97 %
Financing to deposit ratio is perhaps the most critical ratio for a commercial bank. This
ratio represents the amount extended as a loan by a bank to its clients compared to
deposits that the bank receives from its deposit holders. As per the definition of a
commercial bank, the bank is an institution that receives money from those who have it
spare and lends it to those who are in need of them. This ratio of Meezan Bank has been
declining from the year 2004 to the year 2008. The bank should seriously consider this
ratio because these are the core operations of the bank. If the bank could not fully utilize
the funds received from the deposit holders it would have to suffer a loss of its net
income.
126
Book Value per Share
Book Value per Share = Stockholders’ Equity / No. of Common Shares
Issued
2008 = 6341 M / 4925 M = Rs.1.29 per Share
2007 = 5720 M / 3779 M = Rs.1.95 per Share
2006 = 4763 M / 3779M = Rs.1.97 per Share
2005 = 3025 M / 2036 M = Rs.1.49 per Share
2004 = 2098 M / 1346 M = Rs.1.56 per Share
Book value per share is the ratio that shows that how much value of assets the bank has to
pay to its shareholders in the event of its winding up. If we compare the book value per
share with the market value per share we see that although the book value per share is
127
much lesser than the market value even then the shareholders are willing to pay much
higher price for the share of the bank. It shows that the shareholders have confidence in
the company that the company will the prosperous in the future. However since the
market price has declined recently, therefore the company should take corrective actions
so that the confidence of the shareholders should be maintained.
128
SWOT ANALYSIS
Meezan Bank being a quality organization strives to provide quality to all its
stakeholders, customers, employees and environment. In Pakistan, it is operating in a
very volatile economic and political environment. I have summarized its major strengths,
weaknesses, opportunities and threats in the following paragraphs.
STRENGTHS
• MBL has this privilege to be the first in the Islamic Banking sector which gives
MBL a competitive edge over all other banks and being the pioneer of this
industry MBL is enjoying major share of it.
• Being an Islamic bank, MBL has a wide national network. As an emerging
markets bank, it has branches in all the major cities of Pakistan with the facility of
online banking, it is very easy for its customers to transact all over the country.
• Online banking service means that a customer can withdraw and deposit his
money at any branch in the country. Where this service is not present, cheque has
to be presented only in that branch on which they are drawn. But with this facility,
129
a person has access to its funds at any branch of the bank. That would mean that
any person who has an account with the bank, has an account in 24 branches of it.
It provides a lot of comfort and convenience to the customers.
• There are many value added features in the products offered by the bank. ATM
cards are provided with every account. Other features are present in the various
products. The priority customers enjoy a much-pampered status at the bank.
• The employees at the bank provide impeccable customer service to their
customers. For them “the customer is the king’. Customers are treated with great
respect and honored to the utmost degree.
• The working environment of the bank is very friendly and cooperative. There is
no bossiness in the higher management. The upper management consults its staff
in making decisions and provides them independence in their job areas. For the
objective is performance and not conformance with the boss.
WEAKNESSES
• Till the last year, MBL had a totally different perspective. The management was
of the view that the customer should come to them and they don’t need to go to
the customer. But in this era of mass marketing and advertising, it is not possible
to stay in competition without these took. The bank has now changed its
130
perception arid has started an effective marketing and advertising strategy. But the
previous gaps are still there and there is lack of awareness in the people about the
bank and its products. The bank needs to improve on its marketing and
advertising areas.
• It was observed in the bank that the degree of satisfaction of the employees was
quite low. First of all, the pays are lower those offered in other banks. Secondly,
the employees are given targets that are too difficult to achieve. For example, the
targets given to the personnel in sales and services department are higher than any
other bank in the country, be it a local bank or a foreign bank. This makes the job
too stressful and tensed It is good to keep the people under a continuous move,
but to overstress them can be harmful to them and as well as to the organization.
• Due to the dissatisfaction of staff, there is high turnover among them. People who
find other alternatives do not stay with the bank. Therefore, the bank incurs loss
on their training and development. The bank should provide incentives to its
employees so that they show more loyalty. For example, there is no commission
provided to the sales personnel which otherwise is a general rule all over the
world.
• There are no sorts of training programmes for the employees. The employees who
are newly appointed are straight away placed at their positions with no prior
131
orientation. This creates problem for new personnel because they find difficult to
understand the environment and culture of the organization.
• The decision-making is carried out the upper management level and the
subordinates are not included in this process. This creates a sense of insecurity in
the lower managers and that is why there is a lack of loyalty among the personnel.
Although the upper management is very friendly with the lower managers but that
is only to the extent of cordial relationships.
OPPORTUNITIES
• The economic conditions are improving in the country. The foreign exchange
reserve has crossed the level the $ 14 Billions, which is something that was never
achieved in the past. The stock exchange index has also crossed fifty years high
recently touching 10,000 this year. This provides a better environment for
investment and growth. This would give a push to incomes of the population,
which would increase the level of savings.
• There is an inflow of foreign investment in the country. This would increase the
industrial growth Pakistan. The Islamic banks are important part of money
markets and this improvement will definitely effect their positions as well. Due to
the growth in the industrial sector, there will be an increase in the production of
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this sector. The levels of deposits of industrial accounts would rise due to this
factor.
THREATS
• Right now there are a few banks that are providing islamic banking services in
addition to the Meezan Bank. These banks include Bank Islami, Al-Barkah Bank
and some branches of Bank Alfalah which are dedicated for islamic banking
services. That’s why we can say that although there is no intense threat for the
Meezan Bank in the near future but it is not difficult to say that more banks may
enter in this field as the awareness of islamic banking is increasing among the
public. Therefore the Meezan Bank should not be contented to its present market
share but should strive for providing better and better and modern services.
• Due to the increase in the number of conventional commercial banks, there is an
increase in competition. Also there is a lot of aggressive marketing by the
competitor banks. This is also a threat for MBL.
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RECOMMENDATIONS
Meezan Bank is renowned for being first in Islamic banking. With such competitive edge
in the banking industry, it holds a very strong position among its competitors. Its
continuous innovation and adaptation to its changing environment has allowed it to stand
amongst the best of the lot. But I would like to give certain recommendations in this
perspective:
 First of all, I would I like to suggest that the bank must pursue a very aggressive
marketing and advertising strategy so that it can create awareness in the general
public about its Islamic products and services
 Secondly, there is a need for creating satisfaction among employees. They do not
feel any attachment to the organization. There is a requirement for building up
their loyalties so that the bank can curtail the dissatisfaction and turnover among
employees.
 The personnel in the bank should not be overstressed with workload. The
workload is of a destructive level. At that level of load the employees loose all the
comfort in their work and remain tense and frustrated.
134
 There is need of a new branch in the Lahore Main area. In our marketing research,
many traders told us that they really wanted such a good bank to open a branch in
that area. These traders have transactions of millions in a day that is why it is not
easy for them to carry that amount of cash. If MBL opens a branch in that area, it
can take hold of all those big accounts with a lot of daily transactions.
 Job training is a very important aspect that MBL is lacking in. New employees are
recruited directly without any prior training or orientation. The result is that they
do not understand the organizational structure and culture and become frustrated
in their start. This reduces their productivity and efficiency. If such a training
programmed is started, then the new employees would feel more comfortable and
adapt easily to the environment.
135

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Table of Contents

Internship is an integral part of MBA program. It provided me the opportunity to develop

Brief History of the Organization

Appellate Bench (SAB) of the Supreme Court of Pakistan.

Al-Meezan Investment Bank is established with a mandate to pursue Islamic Banking.

parallel basis with conventional system.

The Shariah Supervisory Board is established at Al-Meezan Investment Bank led by

stand-alone branches by existing commercial banks to conduct Islamic banking in the

formal ceremony in Karachi.

end Islamic Mutual Fund.

first Memorandum of Understanding MoU with Pak-Kuwait Takaful Company Limited

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

first Islamic bank to introduce 8 am to 8 pm banking at selected branches in Karachi.

With 166 Branches (including 35 sub-branches) in 40 cities across Pakistan, Meezan

205.2 billion in December 2007.

The Meezan Team

Business Segments of the Bank

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.

the stakeholders value through an organizational culture based on learning, fairness,

respect for individual enterprise and performance.

SHARIAH SUPERVISORY BOARD BOARD OF DIRECTORS AUDIT

(Dr. Muhammad Imran Usmani)

Product Development &

Shariah Compliance PRESIDENT & CEO

(Mr. Ahmed Ali Siddiqui) (Mr. Irfan Siddiqui)

(Mr. Syed Ali Azhar Naqvi)

(Mr. Atique Ahmed Siddiqui)

(Mr. Saleem Wafai)

(Mr. Munawar Rizvi)

(Mr. Munawar Rizvi)

PRESIDENT & CEO

Mr. Irfan Siddiqui)

CHIEF OPERATING OFFICER

(Mr. Ariful Islam)

BRANCH NETWORK BUSINESS SEGMENT SUPPORT

SOUTH CORPORATE FINANCE

(Mr. Abdul Ghaffar Memon) (Mr. Zubair Haider)(Mr. Shabbir Hamza)

CENTRAL INVESTMENT BANKING OPERATION

NORTH COMMERCIAL BANKING I.T

(MR. Saleem Khan) (Mr. Shoaib Qureshi) (Mr. Faiz-

SME HUMAN RESOURCES

(Mr. Salim Khowaja) (Mr. Irfan

TREASURY & FINANCIAL TRAINING INSTITUTION

(Mr. M. Abdullah Ahmed) (Mr. M. Sohail Khan)

CONSUMER BANKING SERVICE QUALITY

(Mr. Muhammad Raza) (Mr. Asadullah Ch.)

ALTERNATE DISTRIBUTION CHANNELS

(Mr. Omer Salimullah)

(Mr. M. Sohail Khan)

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)

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