INTRODUCTION

WHAT IS BANK? A bank is a financial institution, which deals with money and credit. It acce ts de osits from indi!iduals, firm and com anies at a lower rate of interest and "i!es at a hi"her rate of interest to those who need them. The difference between the terms at which it borrows and those at which it lends from the source of it earnin" institution. rofit. A bank, thus, is a rofit

#I$TOR% O& I$'A(IC )AN*IN+ IN ,A*I$TAN

1947 The ince tion of ,akistan as the first Islamic Re ublic created in the name of Islam. 1949 The Ob-ecti!es Resolution was ado ted by the first Constituent Assembly based on the ideolo"y of a so!erei"n

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Islamic state. This was the first ste towards ,akistan0s Constitution. 1956

in the conce tion

The first Constitution defined Islam as $tate Reli"ion and all laws to be accordin" to the in-unction of the 1uran and $unnah. 1962 The establishment of Council of Islamic Ideolo"y 2CII3 was followed by the conce tion of the second constitution of ,akistan. 1973 The third constitution of ,akistan was com rehensi!e le"islation on Islamic establishment of &ederal $hariat Court. assed allowin" rinci les and

1980 CII resents re ort on the elimination of Interest "enuinely considered to be the first ma-or com rehensi!e work in the world undertaken on Islamic bankin" and finance. In this eriod ,resident 4ia ul #a5 im osed rofit and loss sharin" accounts as a com ulsion instead of interest bearin" D)($, Uni!ersity of A"riculture, &aisalabad. .6.

accounts, he also started deduction of 4akat from bank accounts in Islamic ros ect. 1985 Commercial banks transformed their nomenclature statin" all Ru ee sa!in" accounts as interest.free. #owe!er, forei"n currency de osits in ,akistan and on lendin" of forei"n loans continued as before. 1991 ,rocedure ado ted by banks in /789 was declared unIslamic by the &ederal $hariat Court 2&$C3. The +o!ernment and some banks:D&Is made a eals to the $hariat A ellate )ench 2$A)3 of the $u reme Court of ,akistan. In /77/ thsese two new Islamic banks started their o erations in ,akistan. 1- ALBARAKA ISLAMIC BANK. & 2- AL FAISAL ISLAMIC BANK.

D)($, Uni!ersity of A"riculture, &aisalabad.

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INTRODUCTION TO (<<4AN )AN* 'TD

MEEZAN was established as an Islamic In!estment )ank in /77= as AL MEEZAN IN!ESTMENT BANK LT"#. After the successful com letion and "reat stru""le &irst Islamic Commercial )ank0s license was awarded to Al (ee>an In!estment )ank in year 6??6, to start the commercial bankin" facilities they bou"ht the local o erations of commercial Islamic bankin" in the country. (ee>an )ank stands today at a noteworthy sector is showin" a si"nificant traditional means of business oint alon" S$%&'( )(*(+,-# 2&rench )ank3 ?; branches and started the

the e!olution of Islamic )ankin" in ,akistan. The bankin" aradi"m shift away from and is caterin" to an

increasin"ly astute and demandin" financial consumer who is also becomin" keenly aware of Islamic )ankin". (ee>an )ank bears the critical res onsibility of leadin" the way forward in establishin" a stable and dynamic Islamic )ankin" system re lete with dynamic and cuttin".ed"e roducts and ser!ices. The )ank has made fundamental and si"nificant ro"ress forward, and in doin" so has established a stron"

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and credible mana"ement team com rised of eA erienced rofessionals, which ha!e achie!ed a stron" balance sheet with eAcellent o eratin" rofitability, includin" a ca ital ade5uacy ratio that laces the )ank at the to of the industry, a lon".term entity ratin" of AB, and a short.term entity ratin" of A/B, the hi"hest short.term ratin".

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$#AR<#O'DIN+ $TRUCTUR<
SHAREH.L"IN) 0 ,akistan *uwait In!estment Com any 2,!t.3 'td $hamil )ank of )ahrain <.C Islamic De!elo ment )ank Deddah Noor &inancial In!estment Co. Others 1,&2 34 %,4&',100 /,/;@ 96= /7? /;@ ;7C 3780 ;? 6C ?7 /C /7 R/. I* M&--&$*/

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$hariah )oard
The members of the $hariah )oard of (ee>an )ank are Internationally.renown scholars, ser!in" on the boards of many Islamic banks o eratin" in different countries. The members of the $hariah )oard areE Dustice 2Retd.3 (uhammad Ta5i Usmani Dr. Abdul $attar Abu +huddah $heikh <ssam (. Isha5 Dr. (uhammad Imran Ashraf Usmani . $hariah Ad!isor

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)oard of Directors
#. <. $heikh <brahim )in *halifa Al.*halifa 5C6,&+7,*8 2Undersecretary, (inistry of &inance F National <conomy,*in"dom of )ahrain3 Naser Abdul (ohsen Al.(arri 5!&%( C6,&+7,*8

Irfan $iddi5ui 51+(/&2(*' & C6&(9 E:(%3'&;( .99&%(+8

Ista5bal (ehdi (ohammed Abdul.Rehman #ussain Nawid Ahsan

Ariful Islam 5C6&(9 .4(+,'&*< .99&%(+8

Rana Ahmed #umayun (ohammed A>>aroo" Ra-ab Ahmed Abdul Rahim (ohamed

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AC#I<G<(<NT$
CRE"IT RATIN)= (ee>an )ank has reaffirmed its entity ratin"s at A> for medium to lon".term and A1> for short.term. This ratin" was made by DCR.GI$ Credit Ratin" Com any, which has also set (ee>an )ank0s outlook on medium to lon".term ratin" as H$tableI. The ratin" is yet another milestone achie!ement in the )ank0s endea!or to be the )ank. (ee>an )ank0s ratin"s are based on its shareholdin" with world.renowned financial institutions, introducin" !arious ran"e of Islamic ioneerin" role in the roducts. The Credit industry, stron" mana"ement initiati!es in continuously Ratin" a"ency DCR.GI$ has eA ressed commendation to (ee>an )ank mana"ement0s ability to de loy funds in core bankin" assets, which reflected healthy "rowth trends last year. FIRST LA"IES BANKIN) IN 1AKISTAN=

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The )ank is the first in the country to introduce J'adies )ankin"J a dedicated bankin" section only for ladies. This new ser!ice set $hariah ro!ides an eAclusi!e bankin" area as er the rinci les for our lady customers in a more

comfortable en!ironment. The dedicated Customer $er!ices Officer in our ladies only bankin" area will ro!ide consultancy for a full ran"e of our #alal bankin" ser!ices includin", 7am to 9 m Online )ankin", Term Certificates, Current F $a!in" Accounts, Consumer &inancin" and 6@:= bankin" ser!ices.

BRANCH NETW.RK= O!er =? branches are workin" all o!er the ,akistan. .THER ACHIE!EMENTS= )est Islamic )ank 6??9 2Islamic &inance News3 )est ro!ider of Islamic financial ser!ices year 6??9 !IEWS .F 1RESI"ENT .F 1AKISTAN= I wish Meezan Bank success in initiating the cause of Ribafree banking."

D)($, Uni!ersity of A"riculture, &aisalabad.

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+eneral ,er!e> (usharraf ,resident of ,akistan

Meezan Bank Inauguration, September 2002

Gision $tatement
<stablish Islamic bankin" as bankin" of first choice to facilitate the im lementation of an e5uitable economic system, ro!idin" a stron" foundation for establishin" a fair and -ust society for mankind.

(ission $tatement
To be a remier Islamic bank, offerin" a one.sto sho for

inno!ati!e !alue added

roducts and ser!ices to our

customers within the bounds of $hariah, while o timi>in" the stakeholders !alue throu"h an or"ani>ational culture based on learnin", fairness, res ect for indi!idual enter rise and erformance.

$er!ice 1uality (ission

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To de!elo

a committed ser!ice culture which ensures the roducts and ser!ices within the

consistent deli!ery of our

hi"hest 5uality ser!ice arameters, romotin" Islamic !alues and ensurin" reco"nition and a 5uality bankin" eA erience to our customers.

D)($, Uni!ersity of A"riculture, &aisalabad.

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D<,ART(<NT$ F T#< ,RODUCT$ O&&<R<D AT T#< )RANC#

T6(+( ,+( 5 7,&* 2(4,+'7(*'/ ,' '6( ?+,*%6= /. CU$TO(<R $<RGIC<$ D<,ART(<NT 6. O,<RATION$ D<,ART(<NT ;. CR<DIT D<,ART(<NT @. TRAD< &INANC< D<,ART(<NT 9. CA$# D<,ART(<NT

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/. CU$TO(<R $<RGIC<$ D<,ART(<NT

Account o enin" and closin" is the function of customer ser!ices de tt. The bank0s customers includes indi!iduals 2sin"le or -oint3, firm 2 artnershi : ro rietorshi 3, Autonomous cor orations, 'imited com anies, Charitable Institutions, associations, <ducational Institutions or local bodies. )rief <A lanation of these accounts is as follows

1+$23%'/ $99(+(2 ?@ '6&/ 2(4,+'7(*'= a3 Riba &ree Ru ee $a!in"s Account Current account $a!in" Account b3 Riba &ree Dollar $a!in"s Account D)($, Uni!ersity of A"riculture, &aisalabad. . /@ .

 Foreign Currency Account

,8 RIBA FREE-RA1EE SA!IN) ACC.ANT As a ste towards the mission of ro!idin" a one.sto sho

for inno!ati!e !alue added (ee>an )ank is

roducts to our customers,

leased to offer RIBA FREE Current

Account, a fleAible Ru ee based account that is ideal for businesses and indi!iduals lookin" for $hariah com liant bankin" and rofessionalism under one roof. The de osits of the customers to"ether with the bank0s contribution are in!ested in a ool that consists of I-arah and (urabaha financin". The rofit earn on this ool is calculated e!ery month, and if you maintain a minimum a!era"e monthly balance of Rs./?, ???:. you shall be eli"ible to recei!e rofits that will be disbursed to you e!ery month. )ut if u0r balance is less then /???? then u "et no enalty is char"es to u. there is no fiAed month new rate declared. rofit or no rofit b:c e!ery

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R(B3&+(7(*'/= (ini de ositEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEERs./?,???:. only Other re5uirements are mentioned in detail in a endiA.

CARRENT ACC.ANT Current account is basically used to meet the daily transactions. The money ke t in current account is in the form of CAR4.<.#A$NA "i!es the ad!anta"e for ayin" debts by the con!enient and safe means of sendin" che5ues throu"h the ost thus a!oidin" the trouble and loss.

R(B3&+(7(*'/= (ini de ositEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEERs./?,???:. only Other re5uirements are mentioned in detail in a endiA.

?8 R&?, F+(( "$--,+ S,;&*</ A%%$3*' The return earn on the (udarba at the be"innin" of the month. ool is calculated e!ery

month and rofit ratio is declared for all in!estors is declared

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If you maintain a minimum a!era"e monthly balance of K9??, you shall be eli"ible to recei!e disbursed to you e!ery month. R(B3&+(7(*'/= (ini de ositEEEEEEEEEEEEEEEEEEEEEK/?? under (udarba arran"ement. Other re5uirements are mentioned in detail in a BASIC .F ACC.ANT .1ENIN) Account o enin" is the basic and first relationshi , which is established between )ank and the customer. In account o enin" eAtreme care has to be eAercised in case of com letion of account o enin" documentation. Lhene!er a client comes in the bank in order to o en an account the first information that is "i!en to him:her about the ty es of accounts, which can be o ened, so far this ur ose the client is "i!en detailed information about the accounts and their res ecti!e rofit rates. endiA rofits that will be

TC1E .F ACC.ANTS .1ENE" CURR<NT $AGIN+ T<R( D<,O$IT

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S3?-%,'(<$+&(/ $9 A%%$3*'/ ,*2 '6( B,/&% R(B3&+(7(*'/= MIN.R ACC.ANT )ay form and co y of ass ort minor National Identity card of +uardian $i"nature re5uirement of "uardian

IN"I!I"AAL ACC.ANT Co y of national identity card Com lete account o enin" form 'etter of introduction if re5uired Gisitin" Card 2if the erson is em loyed3 D.INT ACC.ANTS As e!ident from the name these accounts can be -ointly o ened by any number of no maAimum limit. R(B3&+(7(*'/= National Identity card of all A $i"nature of all A licants. licants. ersons. The minimum number of ersons re5uired to o en a -oint account is two but there is

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 4akat Affida!it of all A

licants 2>akat <Aam tion3.

O eration of account clearly mentioned. The o tions a!ailable to o erate the account areE Dointly <ither or $ur!i!or Other2s32,lease s ecify3 CLAB ES.CIETCEASS.CIATI.N FR(B3&+(7(*'/G= Certified co y of resolution Certified co y of rules Co ies of National Identity cards of all directors: ass orts Com leted account o enin" form $ ecimen $i"nature Card TRASTS ACC.ANTS Com leted account o enin" form $ ecimen $i"nature Card Certified co y of trust deed Co y of rules:by laws Co ies of National Identity cards of all trustees .'6(+ +(B3&+(7(*'/ ,+( 7(*'&$*(2 &* 2(',&- &* ,44(*2&:. D)($, Uni!ersity of A"riculture, &aisalabad. . /7 .

COR,ORAT< ACCOUNT$
ACC.ANTS .F S.LE 1R.1RIET.R 5R(B3&+(7(*'/8 Declaration 'etter Co y of NIC:,ass ort of the ro rietor National TaA Certificate Declaration of $ole ,ro rietor on com any letterhead )usiness re"istration Certificate $ ecimen $i"nature Cards and com leted account o enin" form.

ACC.ANT .F 1ARTNARSHI1 5R(B3&+(7(*'/8 ,artnershi Deed, certified co y. ,hotoco ies of NIC of all artners. ,artnershi (andate2,rescribed &ormat3.

ACC.ANT .F LIMITE" C.M1ANIES 5R(B3&+(7(*'/8 'ist of Directors of com any. NIC of all Directors. Co y of certificate of Incor oration.

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 (emorandum of Association. Article of Association. Co y of )oard Resolution. 'atest Co y of &orm.67 $tam of Com any, which is to be affiAed on the account o enin" form. Certificate of Commencement of )usiness

ACC.ANTS .F LITERATE F16$'$ A%%$3*'G These accounts can be o ened indi!idually or -ointly. &or men, the ri"ht hand thumb im ression and for women, the left hand thumb im ression is taken on account o enin" form. The customer is "i!en ad!ice to come to bank himself in order to withdraw any cash or de osit the che5ue. R(B3&+(7(*'/= ,hotoco y of NIC of Account #older. Two.three ass ort si>e hoto"ra hs.

T#IN+$ TO )< CON$ID<R<D )<&OR< O,<NIN+ AN ACCOUNT

D)($, Uni!ersity of A"riculture, &aisalabad. . 6/ .

 Gerification of the customers0 credentials. The suitability of the ros ecti!e customer. $tate )ank0s rules and re"ulations. The )ank0s own olicy. The ros ecti!e rofitability of the relationshi . .'6(+ +(B3&+(7(*'/ ,+( 7(*'&$*(2 &* 2(',&- &* ,44(*2&:.

,ROC<DUR<$ &OR ACCOUNT O,<NIN+

&irst of all, after in5uirin" from the customer what ty e of account he:she wants to o en, the account o enin" form is "ot filled from the customer and si"ned it. Alon" with the account o enin" form, the customer is also si"ned two $ ecimen $i"natures Cards. After fulfillin" all the formalities of account o enin", the com uter "enerated account number is "i!en to the customer that is of s ecial series de endin" on the ty e of account.

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REHAISITI.N SLI1 A re5uisition sli is "i!en to the customer to si"n it so that the customer can "et che5uebook. Che5uebook is issued after one day of recei!in" the re5uisition sli .

LETTER .F THANKS After o enin" the account HA 'etter Of ThanksI is send to the customer in order to thank the customer for o enin" an account in the )ank. This letter tells all the information re"ardin" his:her account, which are ke t !ery confidential.

ACC.ANT .1ENIN) RE)ISTER After an account is o ened, an entry is made in the account o enin" re"ister, which has the followin" columnsE Date Account Number Name F Address Tele hone Number Initial De osit

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Customer $er!ices:Relation Officer enters the new account o ened in com uter and the $ ecimen si"nature Cards are also scanned so that whene!er a che5ue of the res ecti!e account comes for encashment, the si"natures can be !erified. .;(+,-- 93*%'&$*/ 4(+9$+7(2 ?@ C3/'$7(+ S(+;&%(/ "(4,+'7(*'= ACCOUNT O,<NIN+ ACCOUNT C'O$IN+ +<N<RA' C'I<NT D<A'IN+

6.O,<RATION$ D<,ART(<NT
FANCTI.NS 1ERF.ME"= a3 C'<ARIN+ b3 R<(ITTANC<

a3 C'<ARIN+
Inward clearin" D)($, Uni!ersity of A"riculture, &aisalabad. . 6@ .

 Outward clearin"

INWAR" CLEARIN) In the mornin", the bank recei!es its own che5ues, which ha!e been resented by the customers in some other bank to be de osited in their account. NI&T ro!ides the facility of brin"in" che5ues for inward and also takes the che5ues of outward clearin" to other banks. The che5ues recei!ed in inward clearin" are the che5ues drawn on bank and the bank has to ay for them. &or this ur ose the bank makes to the mark clearin" in com uter by checkin" the balances of the res ecti!e customer, if their balances are u then that che5ue is cleared and the res ecti!e customer account is debited with the res ecti!e amount. If the balances are short then that che5ue is bounced back to the related bank. R(,/$*/ 9$+ +('3+*&*< , %6(B3(= All re5uired stam s of Clearin", Crossin" and <ndorsement are not resent on che5ues. Che5ue is ost date. Refer to drawer <ffects not cleared, may be resented a"ain Amounts in words and fi"ures differ. D)($, Uni!ersity of A"riculture, &aisalabad. . 69 .

If any of these reasons eAists then that che5ue is returned throu"h NI&T and deducts Rs. ;?? from customer0 account as che5ue returned char"es. &or this likeE Customer0s Account $tate )ank Of ,akistan Che5ue returned char"es Other commissions Dr. Cr. Dr. Cr. ur ose an entry is assed on multi entry !oucher

Then the re ort of returnin" any che5ue is sent throu"h faA to the head office *arachi. After this ut the entry in Che5ue return re"ister showin" the followin" columnsE Date Title of account Account number Che5ue number )ank and )ranch name Reason to return

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.ATWAR" CLEARIN)= All the che5ues of other banks which are de osited to ()' are resented in outward clearin". This is said as $3'I,+2 resented on the !ery neAt day %-(,+&*< because they are after de ositin" a che5ue. In outward clearin", the entry is made likeE Customer Account $tate )ank of ,akistan Cr. Dr.

This entry is made when we come to know about the clearin" of all che5ues, which are sent to other banks. SER!ICES 1R.!I"E" I. TRAN$&<R O& A(OUNT II. T<''IN+ ACCOUNT )A'ANC<$ III. I$$UIN+ C#<1U<$ )OO*$

I. TRANSFER

.F AM.ANT

If a customer holds two accounts in the bank and he:she wants to transfer money from one account to other account, customer writes a che5ue and fills de osit sli in which he:she writes account number to which amount is to be transferred. After makin" transfer entry in the com uter, affiA transfer stam in the middle of the che5ue, crossin" on D)($, Uni!ersity of A"riculture, &aisalabad. . 6= .

the u

er left and bank0s endorsement stam

on the

backside of the che5ue. II. TELLIN) ACC.ANT BALANCES Lhene!er clearin" officer recei!es hone call from the

customer in5uirin" about his:her account balance after confirmin" the name, address and other information he tells the balance throu"h com uter.

III. ISSAIN) CHEHAE B..KS It is also the duty of de artment to issue a che5uebook when an officer recei!es re5uest from the customer.

). R<(ITTANC<
a3 ,ay order b3 Demand drafts c3 Inward collection d3 Outward collection

,8 1AC .R"ER= ,ay order is an order to ay money but this ayment is to be made within city. In other words it can be said that the ayee and the ayer should be in one city.

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In ay order the ayment can be made in A3 Cash )3 Clearin" C3 Transfer 1R.CE"ARE= In case of ay order first of all the customer has to fill a ay order a lication form in fa!orin" sectionE name, account ay order in number, amount, beneficiary name, address, etc. The data is entered in already set format of com uter and ay order rint out is taken. An authori>ed ay order is "i!en to the customer

erson and mana"er o erations are si"ned ay order. The ori"inal co y of the and carbon co y is ke t with bank for office record.

?8 "EMAN" "RAFT An order to ay money to the ayee who is residin" outside erson0s account must ayer has

the city. DD can be for a customer who may or may not ha!e an account in the bank but the other demanded the DD. be maintained with the bank for which the

%8 INWAR" C.LLECTI.N

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Lhen the bank recei!es che5ues of any other bank from its any branch situated in the some other city, then those ha!e been dealt as inward collection.

1R.CE"ARE After recei!in" the che5ue, an entry is made in inward collection re"ister and then all stam s are affiAed on the che5ue 2clearin", endorsement, IC M stam 3 and make outward clearin" !oucher which shows the followin" entryE

Remittance ayable

Cr.

On the neAt e!enin" after the deli!ery of clearin" che5ues make re!ersal entry like

Remittance ,ayable Res ecti!e )ranch

Dr. Cr.

Also make a faA messa"e to inform the res ecti!e branch that we ha!e credited their nostro account.

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OT#<R &UNCTION$ UND<R O,<RATION$ D<,ART(<NT 'OC*<R$

'ockers o erations shall not be ermitted under ower of attorney of a customer. A customer wishin" to allow another erson or a"ent may be re5uested to o en a new locker account under -oint names and close the eAistin" account. In offerin" this facility branches ha!e to be selecti!e and should ro!ide lockers to the customers whose identity and inte"rity is !erified, who should maintain account with the branch and ha!e otential for de osits and other bankin" business. It is reiterated that honesty, creditability and "ood re utation of the customer is of utmost im ortance in the selection of customer for lockers. KEC FEATARES= A!ailable in selected branches A!ailable in ; si>es &or all eli"ible Account #olders *ey security De osit ,*R ;??? . ;/ .

D)($, Uni!ersity of A"riculture, &aisalabad.

1+$%(23+( A lication on ,rescribed &orm duly filled

$a!in":Current Account with ()' ?6 ,ass ort si>e ,hoto"ra hs

C6,+<(/ *ey De osit $mall (edium 'ar"e ,*R ;???: ,*R /???:%ear ,*R /9??:%ear ,*R 6???:%ear

'ocker breakin" char"es Rs ;???

Che5ue )ooks #andlin"

A lication for New Che5ue )ook

CHAR)ES ,*R ?;:'eaf for $a!in" Account Che5ue )ook ,*R ?/:'eaf for Current Account Che5ue )ook ,*R ?/:'eaf for &C% Account

D)($, Uni!ersity of A"riculture, &aisalabad.

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!o "harges for "he#ue Books of $arobari Munafa %ccount&

RI)A &R<< T<R( D<,O$IT$ O&&<R<D )% )AN*

Certificate of Islamic In!estment (onthly (udarabah Certificates Dollar (udarabah Certificates (ee>an Amdan Certificates (ee>an ,ro!idence Certificate

Certificate of Islamic Investment

Riba.&ree Certificate of Islamic In!estment 2COII3 works under the rinci les of (udarabah and is strictly in conformity with the rules of Islamic $hariah. On a"reein" to become a COII holder, the customer enters into a relationshi , based on (udarabah, with (ee>an )ank. Under this relationshi , the Customer is an In!estor 2Rab ul

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(al3, and the )ank is the (ana"er 2(udarib3 of the funds de osited by the customers. The bank allocates the funds recei!ed from the customers to a de osit ool. These funds are utili>ed to ro!ide financin" to customers under Islamic modes that include, but are not restricted to, (urabaha and I-arah.

T(*$+ ; (onths C (onths / %ear 6 %ears ; %ears 9 %ears 1+$9&' 1,@7(*' .4'&$*/ ; (onths C months / year 6 year ;.9 year on maturity on maturity monthly or 5uarterly min in!estment 6??* monthly or 5uarterly min in!estment 6??* monthly or 5uarterly min in!estment 6??*

D)($, Uni!ersity of A"riculture, &aisalabad.

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There will be different rate of rofit accordin" to the rofit ayment o tion and amount and tenor. 1+(-7,'3+( (*%,/67(*' In case of re mature encashment the rofit rate will be calculated accordin" to the com leted tenor, if eAtra rofit is aid that will be reco!ered !o pre-mature encashment pena't( in MB) 1,@7(*' $9 1+(7&37 )ank ay remium from its own share of rofit to hi"h de ositors. 1+(7&37 R,'( 9( /?( ;?( 9?(B 7.77( 67.77( @7.77( /N /.69N /.9?N 6N

*arobari (unafa Account

Riba.&ree *arobari (unafa Account works under the

D)($, Uni!ersity of A"riculture, &aisalabad.

. ;9 .

rinci les of (udarabah and is strictly in conformity with the rules of Islamic $hariah. On a"reein" to become an account holder, the customer enters into a relationshi based on (udarabah with (ee>an )ank. Under this relationshi , the Customer is an In!estor 2Rab ul (al3, and the )ank is the (ana"er 2(udarib3 of the funds de osited by the customers. The bank allocates the funds recei!ed from the customers to a de osit ool. These funds from the ool are utili>ed to 4+$;&2( financin" to customers under Islamic modes that include, but are not restricted to, (urabaha and I-arah. ,rofit calculated on daily basis and aid monthly No minimum balance re5uirement No restriction on de osit:withdrawals &ree Che5ue )ooks, ,ay Orders and Online )ankin" Dedicated Account:Relationshi #i"h return for hi"h de ositors *ther re#uirements are mentione+ in +etai' in appen+i,.

(onthly (udarabah Certificates

D)($, Uni!ersity of A"riculture, &aisalabad. . ;C .

Riba&ree (onthly (udarabah in!estment

Certificates is a fleAible

roduct which has been desi"ned to "i!e you a rofit for each

monthly return which is #alal. The minimum in!estment re5uired is only Rs. /??,??? and you recei!e com lete month of in!estment with the )ank. H$I M$*'6-@ M32,+,?,6 C(+'&9&%,'(/ I$+J/?

Riba.&ree (onthly (udarabah Certificate 2((C3 works under the rinci les of (udarabah and is strictly in conformity with the rules of Islamic $hariah. On a"reein" to become a ((C holder, the customer enters into a relationshi based on (udarabah with (ee>an )ank. Under this relationshi , the Customer is an In!estor 2Rab ul (al3, and the )ank is the (ana"er 2(udarib3 of the funds de osited by the customers. The bank allocates the funds recei!ed from the customers to a de osit ool. These funds from the ool are utili>ed to ro!ide financin" to customers under Islamic modes that include, but are not restricted to, (urabaha and I-arah. F(,'3+(/= (inimum re5uirement of ,*R /??* ,rofit disbursement on maturity Tire system for rofit ayment 2Refer Rate $heet3

D)($, Uni!ersity of A"riculture, &aisalabad.

. ;= .

 No ayment on remature encashment *ther +etai's n re#uirements are mentione+ in +etai' appen+i,.

Dollar (udarabah Certificates

On a"reein" to become a D(C holder, the customer enters into a relationshi based on (udarabah with (ee>an )ank. Under this relationshi , the customer is an In!estor 2Rab ul (aal3, and the )ank is the (ana"er 2(udarib3 of the funds de osited by the customers. The )ank allocates the funds recei!ed from the customers to a de osit ool. These funds from the ool are utili>ed to ro!ide financin" to customers under Islamic modes that include, but are not restricted to, (urabaha and I-arah. R(B3&+(7(*'/= In U$D only Indi!iduals and Cor orate D)($, Uni!ersity of A"riculture, &aisalabad. . ;8 .

 (inimum in!estment /?* and abo!e T(*$+= ;(onths C(onths /%ear ;%ears

1+$9&' 4,@7(*' .4'&$*/= ;(onths C(onths /year ;years appen+i,. (aturity (aturity C (onthly or (aturity C (onthly or (aturity

*ther +etai's n re#uirements are mentione+ in +etai' -

(ee>an Amdan Certificates

The Riba.&ree (ee>an Aamdan Certificate 2(AC3 is a lon". term de osit certificate with an eAce tionally hi"h monthly rofit desi"ned es ecially for those indi!iduals and cor orations who are in need of re"ular stream of monthly D)($, Uni!ersity of A"riculture, &aisalabad. . ;7 .

income. (AC is a monthly income 2mahana aamdani3 certificate with a !ariety of free acka"ed benefits. Lorkin" The Riba.&ree (ee>an Aamdan Certificate 2(AC3 works under the rinci les of (udarabah and is strictly in conformity with the rules of Islamic $hariah. On a"reein" to become a (AC holder, the customer enters into a relationshi based on (udarabah with (ee>an )ank. Under this relationshi , the customer is an In!estor 2Rab ul (aal3, and the )ank is the (ana"er 2(udarib3 of the funds de osited by the customers. The )ank allocates the funds recei!ed from the customers to a de osit ool. These funds from the ool are utili>ed to ro!ide financin" to customers under Islamic modes that include, but are not restricted to, (urabaha and I-arah. F(,'3+(/= 'on" Term ,roduct Tenor 9./:6 years F = years ,rofit 7.9N /?.9?N 2'ast month3 &or Indi!iduals and Cor orate (inimum de osit ,*R /?? * .0$ for o'+ citizens an+ wi+ows&

D)($, Uni!ersity of A"riculture, &aisalabad.

. @? .

(ee>an ,ro!idence Certificate 2(,C3

A lon".term in!estment roduct s ecially desi"ned to cater to the needs of cor orate and business concerns for ur oses of in!estin" their ,ro!ident, ,ension and +ratuity &unds. H$I M((K,* 1+$;&2(*%( C(+'&9&%,'( I$+J/?

Riba.&ree (ee>an ,ro!idence Certificate 2(,C3 works under the rinci les of (udarabah and is strictly in conformity with the rules of Islamic $hariah. On a"reein" to become a (,C holder, the customer enters into a relationshi based on (udarabah with (ee>an )ank. Under this relationshi , the Customer is an In!estor 2Rab ul (al3, and the )ank is the (ana"er 2(udarib3 of the funds de osited by the customers. (in. de osit ?/ (illion T(*$+ 9 %ears = %ears .'6(+ $4'&$*/= D)($, Uni!ersity of A"riculture, &aisalabad. . @/ .

 ,ro!ident and ,ension &und of lar"e cor orate ,remature encashment facility a!ailable

(ee>an Islamic Institution De osit Account

The (ee>an Islamic Institution De osit Account 2(IIDA3 is a uni5ue o roduct, tailored eAclusi!ely for Islamic &inancial 2I&Is3. Lith (IIDA, any I&I now has the Institutions

ortunity to mana"e eAcess li5uidity in an immediate and rofitable manner, by maintainin" a checkin" account with

(ee>an )ank. All eli"ible Islamic )anks can enter into a (udarabah relationshi with (ee>an )ank. Under this relationshi , the res ecti!e Islamic )anks are the In!estors 2Rab ul (aal3, and (ee>an )ank is the (ana"er 2(udaarib3 of the funds de osited by them. (ee>an )ank allocates the funds recei!ed from the Islamic )anks to a de osit restricted to, (urabaha and I-arah. F(,'3+(/= &or Islamic &inancial Institutions de osit To in!est their access li5uidity (in. in!estment ,*R /? ( and multi lies there of ool consistin" of financin" under Islamic modes that includes, but is not

D)($, Uni!ersity of A"riculture, &aisalabad.

. @6 .

 (aA in!estment ?/ ) *ther +etai's n re#uirements are mentione+ in +etai' appen+i,.

;. CA$# D<,ART(<NT
The cash de artment is the most im ortant de artment of the bank. It recei!es cash from customers and then de osits it into the accounts of the customers and maintained their balances. In cash de artment followin" books are maintained. $croll book ,ayin" book Cash balance book

D)($, Uni!ersity of A"riculture, &aisalabad.

. @; .

SCR.LL B..K Lhen cash is recei!ed at the customer it is recorded in the scroll book. 1ACIN) CASH B..K The cashier makes entry in the ayin" cashbook when cash is aid. CASH BALANCE B..K The consolidated fi"ure of recei t and entered in cash balance book. ayment of cash is

@. CR<DIT : &INANC< D<,ART(<NT

I/-,7&% F&*,*%&*< 9$+ '6( 9$--$I&*<= Cor orate $(< ,ersonal

,<R$ONA' &INANCIN+
"&7&*&/6&*< M3/6,+,J, 5I/-,7&% F&*,*%&*<8

D)($, Uni!ersity of A"riculture, &aisalabad.

. @@ .

Lith <asy #ome you can

artici ate with (ee>an )ank in a

-oint ownershi of your ro erty, where the )ank will ro!ide financin" u to 89N. On a"reement of a monthly ayment to the )ank of which a com onent is for the use of the home 2rent3, and another for your e5uity share. The total monthly ayment is reallocated re"ularly by the artnershi to reflect your "rowin" e5uity and to allocate increasin" amounts to your in!estment. Lhen you ha!e made the full in!estment, which had been a"reed, you become the sole owner with a free and clear title to the ro erty.

<asy #ome
<asy home works under the Diminishin" (usharakah where customer artici ates with (ee>an )ank in -oint ownershi . E,/@ H$7( 9&*,*%( &/ ,;,&-,?-( 9$+= 13+%6,/( ;.6? year (aA. &inance 89N C$*/'+3%'&$* D)($, Uni!ersity of A"riculture, &aisalabad. . @9 .

 6.6? year (aA. &inance =?N R(*$;,'&$* 6.= year (aA &inance 89N R(4-,%(7(*' ;.6? year

E-&<&?&-&'@ ,akistani National A"e 69OC9 2till maturity3 ,rofessional <A erience S,-,+&(2 4(+/$*= 6 year of consecuti!e eA erience in same industry (in salary 6? k er month B3/&*(//

D)($, Uni!ersity of A"riculture, &aisalabad.

. @C .

 ; years business eA erience (in. business income Rs 9?* er month 1+$%(//&*< C6,+<(/ )usinessmen Rs /69?? Rs 89??

$alaried ,erson

2U to Rs @ (, 6??? Additional for abo!e3 Time &rame ;.@ Leeks *ther +etai's are attache+ in appen+i,.

Car I-ara
I-ara is a rental a"reement under which bank !ehicle and "i!e the same on rent to customer Car I-arah is ,akistan0s first PInterest &reeP car financin" based on the Islamic financin" mode of I-arah 2Islamic leasin"3. This roduct is ideal for indi!iduals lookin" for car financin" while a!oidin" an interest.based transaction. urchase a

D)($, Uni!ersity of A"riculture, &aisalabad.

. @= .

S%$4( $9 F,%&-&'@ Domestic Gehicle Commercial Gehicle Used:Im orted Gehicle R,'(/ $99(+(2= 2&or New3 ; year /@N @ year /9N 9 year /C.9?N 2&or used3 /9N /9.9?N /8N 2'ocal made3 2'ocalBIm orted3 2/st Transfer only3

/0 higher than norma' for commercia'1importe+1use+ 2ehic'e

E-&<&?&-&'@= ,akistani National $alaried indi!idual, self.em loyed, rofessional or business erson (inimum ; years of work:business: rofessional eA erience

D)($, Uni!ersity of A"riculture, &aisalabad.

. @8 .

 C month workin" with resent em loyer Net income eAceeds three times of monthly rental

OT#<R ,RODUCT$ O&&<R<D

.* -&*( R(,- T&7( ATM &ree AT( Card ,er Day 'imit of ,*R 6?* Rs /9 char"es for use of other AT( Network Acce table at all AT( outlets Debit card at OriA out lets 2,*R 9?k:Day3

.* -&*( R(,- T&7( F,%&-&'@ Absolutely free from all branches of ()' Collection of Che5ues absolutely free A!ailable to ,*R current, sa!in" F *arobari (unafa acc.

B,*J&*< F,%&-&'@ ,' ,-- MBL B+,*%6(/ 9$+ D)($, Uni!ersity of A"riculture, &aisalabad. . @7 .

 (on . $at 7.9 &riday 7./6.;? F ;.9

$aturday 7./6.;?

24E7 C,-- C(*'(+ 6@:= call center ser!ice. K(@ F(,'3+(/ Check account balances Instruct issuance of ay orders and demand drafts Transfer funds between your own accounts Order issuance of che5ue book Check transaction history of accounts Recei!e information on ()' roducts and ser!ices Issue sto ayment instructions ro!ides you access to a wide ersonali>ed bankin" ran"e of Tele.bankin" solutions and

Re ort loss of your che5ue book Re5uest or chan"e T.,IN AT( ,IN Re issuance Re ort loss of AT(:Debit Card or che5ue2s3

D)($, Uni!ersity of A"riculture, &aisalabad.

. 9? .

I*'(+*(' B,*J&*< Internet )ankin" allow to ha!e access to accounts re"ardless of where they may be in the world. K(@ F(,'3+(/ )alance in5uiry $tatement !iewin" $tatement download Che5ue status Che5ue blockin" ,ay order re5uest Com laint lo""in" and follow.u s &unds transfers between own accounts at ()' Chan"e of address re5uest Che5ue book re5uest

A-(+'/ ,*2 N$'&9&%,'&$* ?@ E-7,& 'ow:#i"h balance alert Credit:Debit transaction alert D)($, Uni!ersity of A"riculture, &aisalabad. . 9/ .

 Re5uest resolution alert Com laint resolution alert F3'3+( F(,'3+(/ Alerts by $($:&aA Utility bill ayments Inter bank funds transfers ,ayment to nominated accounts at ()' $tandin" orders for re eated ayments

$LOT ANA'%$I$
S'+(*<'6/= <ffecti!e #R ,olicies. D)($, Uni!ersity of A"riculture, &aisalabad. . 96 .

 AT( (achine in )ranches. One Counter O eration. Islamic )ankin". 'oyalty of <m loyees. 6@:= Online )ankin". Internet bankin" facility. <Acellent <n!ironment. <fficient and 1ualified (ana"ement. &ewer Com etitors as Islamic )ankin". A lar"e ran"e of Islamic In!estment $chemes. Islamic 'easin" $ystem. No hidden char"es. Rates are remarkably low as com ared to other banks. Gery #i"h credit ratin". W(,J*(//= 'ack of awareness of the eo le. &ewer )ranches in &aisalabad. 'ess Ad!ertisement.. (ain )ranch isn0t 'ocated in the )usiness Area. Online system is not so stron". .44$+'3*&'&(/= D)($, Uni!ersity of A"riculture, &aisalabad. . 9; .

 (ore and more

eo le are comin" towards

Islamic )ankin" $ystem. Introduction of inno!ati!e roducts. New (arket $e"ments for i-ara, i.e. A liances ,roducts. #ome

O en New )raches in &aisalabad and other small areas. T6+(,'/= Islamic banks are Increasin". Traditional commercial banks are also introducin" the Islamic )ankin" &acility. ,ersonal 'oan $cheme of other banks. New Inno!ati!e $chemes by Other Islamic banks.

$U++<$TION F R<CO((<NDATION$
D)($, Uni!ersity of A"riculture, &aisalabad. . 9@ .

 <A andin" their business by establishin" new branches in those areas which are near to the business area. ()' has the o tion to increase its customers throu"h efficient marketin" system. The bank must hire the efficient marketin" ersonnel. ()' must take art in hea!y ad!ertisement as the

eo le become aware of the Islamic bankin" $ystem. )ank should em loyees. )ank should de!elo healthy relation to their ro!ide mana"ement trainin" to their

customers. ()' should "i!e more com ensations and benefits to its em loyees and other workers for the im ro!ement in the erformance. )ecause it leads to the im ro!ement of o!erall bank0s erformance.

&INANCIA' #I+#'I+#T$
D)($, Uni!ersity of A"riculture, &aisalabad. . 99 .

B,-,*%( S6((' ,/ $* M,+%6 31L 2007

1+$9&' ,*2 L$// A%%$3*' ,/ $* M,+%6 31L 2007

D)($, Uni!ersity of A"riculture, &aisalabad.

. 9C .

C,/6 F-$I S','(7(*' ,/ $* M,+% 31L 2007 D)($, Uni!ersity of A"riculture, &aisalabad. . 9= .

D)($, Uni!ersity of A"riculture, &aisalabad.

. 98 .

&INANCIA' ANA'%$I$ AND CO((<NT$

"EBT RATI.= T. Debt T. Assets

2007 @@,8C9,7@= @7,866,;@7 7?.?9 N

2006 @/,C=9,6C@ @C,@;8,C6; 87.=@ N

C$77(*'/= Debt ratio basically shows that, how much assets are financed by the debt. It shows that how much an in!estor is rotected in case of default. &rom abo!e information its ob!ious that, in year 6??C, this ratio is 87.=@ N and this year it is 7?.?9 N. It shows more debt financin" as com ared to re!ious year.

D)($, Uni!ersity of A"riculture, &aisalabad.

. 97 .

"EBT E EHAITC RATI.= T. Debt T. <5uity

2007 @@,8C9,7@= ;,==7,87= //.8= //8= N

2006 @/,C=9,6C@ ;,==7,87= //.?; //?; N

C$77(*'/= This ratio is an alternati!e to the debt ratio. One of these ratios can be used by the in!estor. It shows the basic ratio between debt and e5uity. This ratio is !ery hi"h, as we know that, banks are totally de end on the debt. #owe!er e5uity also make a art f its total financin" but its !ery little as com ared to total debt. Due to this reason this ratio is !ery hi"h in case of banks. As this ratio increased "radually, it shows increase in debt financin" as com ared to e5uity.

D)($, Uni!ersity of A"riculture, &aisalabad.

. C? .

RETARN .N ASSET FR...AG= Net rofit after taA T. Assets @C,@;8,C6;

2007 /7?,9== @7,866,;@7

2006 /8/,C99

?.;8; N

?.;7/ N

C$77(*'/= This ratio shows the efficiency of the total assets, means how much efficiently the com any usin" its assets to earn its net rofit. As we know that in banks, assets are not a bi" source of "eneratin" earnin"s, and basic function is of debt and e5uity. That0s why this ratio is decreased this year as com ared to the re!iously.

D)($, Uni!ersity of A"riculture, &aisalabad.

. C/ .

RETARN .N IN!ESTMENT FR...IG 2006 Net rofit after taA In!estment 6,8==,99@

2007

/7?,9== 6,8//,?;;

/8/,C99

C.8 N

C.; N

C$77(*'/= This ratio shows the return or net in!estments. (eans how much terms of in!estments, rather than total rofit. In this ratio it is ob!ious that "radually as com ared to rofit ratio is increasin" re!ious years. And shows the rofit on the

rofit the bank is makin" in

better erformance of the bank with the assa"e of time.

D)($, Uni!ersity of A"riculture, &aisalabad.

. C6 .

RETARN .N EHAITC FR...EG= 2006 Net rofit after taA T. <5uity

2007

/7?,9== ;,==7,87= 9.@6 N

/8/,C99 ;.==7.87= @.8? N

C$77(*'/= This ratio shows the rofit in terms of e5uity. This ratio rofit is increasin" "radually year after year as shown rofit an increased. It shows the efficient o erations abo!e. As there is no chan"e in total e5uity, but the

allocation of resources, as a result, the return on the e5uity is increased. EARNIN) 1ER SHARE FE1SG= 2006 Net rofit Total number of shares out standin" C$77(*'/= D)($, Uni!ersity of A"riculture, &aisalabad. . C; . ?.9? ?.98 2007

<,$ decreased this year. As net

rofit increased this

year, <,$ should also be mo!ed res ecti!ely, but due to increases no of shares outstandin", it is decreased this year.

OVERALL CONCLUSION
Islamic bankin" is a !ery youn" conce t. %et it has already been im lemented as the only system in two (uslim countriesQ there are Islamic banks in many (uslim countries and a few in non.(uslim countries as well. Des ite the successful acce tance there are are mainly in the area of financin". Lith only minor chan"es in their ractices, Islamic banks can "et rid of all their cumbersome, burdensome and sometimes doubtful forms of financin" and offer a clean and efficient interest.free bankin". All the necessary in"redients are already there. The modified system will make use of only two forms of financin" loans with a ser!ice char"e and (udaraba artici atory financin" both of which are fully acce ted by all (uslim writers on the sub-ect. $uch a system will offer an effecti!e bankin" system where Islamic bankin" is obli"atory and a owerful alternati!e to con!entional bankin" where both co.eAist. Additionally, such roblems. These roblems

D)($, Uni!ersity of A"riculture, &aisalabad.

. C@ .

a system will ha!e no

roblem in obtainin" authori>ation to

o erate in non.(uslim countries. ,artici atory financin" is a uni5ue feature of Islamic bankin", and can offer res onsible financin" to socially and economically rele!ant de!elo ment traditional ser!ices banks. ro-ects. This is an

additional ser!ice Islamic banks offer o!er and abo!e the ro!ided by con!entional commercial

D)($, Uni!ersity of A"riculture, &aisalabad.

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