Professional Documents
Culture Documents
Internship Report On Meezan Bank Complete
Internship Report On Meezan Bank Complete
Meezan is a publicly listed company first incorporated on January 27, 1997. It started
operations as an investment bank in August of the same year. In January, 2002 in an
historic initiative, Meezan Bank was granted the nation's first full-fledged commercial
banking license dedicated to Islamic Banking, by the State Bank of Pakistan.
Our 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.
Our 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.
Introduction of Products
Riba Free Meezan Providence
Riba Free - Certificates of Islamic Investment
Riba Free - Monthly Musharakah Certificate
Riba Free - Dollar Saving Account
Riba Free - Rupee Saving Account
Riba Free - Current Account
Car Ijarah - Islamic Car Financing
Riba Free Meezan Providence:
Net Profit
Years
profit
2005
20.15
2006
17.80
2007
16.27
2008
8.27
2006
19.50
2007
38.55
2008
21.48
2005
23.25
Remittance section and fixed deposit section. Cash section performs cash related function
like receipt of cash, payment of cash and collection of utility bills. Clearing section
performs the clearing of cheques for collection. Remittance section performs transferring
of funds from one branch to another or from one account to another.
Credit department issues short term and long-term loan. MBL offer two types of loans or
finances, fund based finances and non-fund based finances. Funds based finances include
running finance, demand finance, cash finance and staff finance. Non fund base finance
include letter of credit and guarantees like performance guarantees, mobilization
guarantees shipping guarantees, bid bonds and security deposit guarantees.
Meezan bank is a premier Islamic bank and publicly listed company first
incorporated on January 27, 1997. It started operations as an investment bank in
August of the same year. In January, 2002 in an historic initiative, Meezan Bank
was granted the nation's first full-fledged commercial banking license dedicated to
Islamic Banking, by the State Bank of Pakistan.
Meezan Bank stands today at a noteworthy point along the evolution of Islamic
Banking in Pakistan. The banking sector is showing a significant paradigm shift
away from traditional means of business and is catering to an increasingly astute
and demanding financial consumer who is also becoming keenly aware of Islamic
Banking. Meezan Bank bears the critical responsibility of leading the way forward
in establishing a stable and dynamic Islamic Banking system replete with dynamic
and cutting-edge products and services.
The Bank has made fundamental and significant progress forward, and in doing so
has established a strong and credible management team comprised of experienced
professionals, which have achieved a strong balance sheet with excellent
operating profitability, including a capital adequacy ratio that places the Bank at
the top of the industry, a long-term entity rating of A+, and a short-term entity
rating of A1+, the highest short-term rating.
The Bank's main shareholders are leading local and international financial
institutions, including Pak-Kuwait Investment Company, the only AAA rated
financial entity in the country, the Islamic Development Bank of Jeddah, and the
renowned Shamil Bank of Bahrain, that in addition to their strength and stability,
add significant value to the Bank through Board representation and applied
synergies.
The Bank has an internationally renowned, very high caliber and pro-active
Shariah Supervisory Board presided over by Justice (Retd.) Maulana Muhammad
Taqi Usmani, a renowned figure in the field of Shariah, particularly Islamic
Finance. He holds the position of Deputy Chairman at the Islamic Fiqh Academy,
Jeddah and in his long and illustrious career has also served as a Judge in the
Shariat Appellate Bench, Supreme Court of Pakistan. The Bank also has a resident
Shariah advisor, Dr. Imran Usmani, who strictly monitors the regular transactions
of the Bank. The board also includes Sheikh Essam M. Ishaq (Bahrain), and Dr.
Abdul Sattar Abu Ghuddah (Saudi Arabia).
At Meezan Bank, we strive to find commonalties with the conventional banking
system with absolutely no compromise on Shariah rulings. The bank has
developed an extraordinary research and development capability by combining
investment bankers, commercial bankers, Shariah scholars and legal experts to
develop innovative, viable, and competitive value propositions that not only meet
the requirements of today's complex financial world, but do so with the worldclass service excellence that our customers demand, all within the bounds of
Shariah.
Furthermore, the Bank has built a strong Information Technology and customer
knowledge-based focus that continues to use state of the art technology and
systems. The Bank's Corporate and Investment Banking business unit is geared
towards nurturing and developing a long-term relationship with clients by
understanding their unique financing requirements and providing Shariah
compliant financing solutions across the horizon of corporate banking and
structured finance. The Bank is also implementing robust and aggressive strategic
and tactical initiatives on the consumer banking side. The Bank has a rapidly
growing branch network across all major cities nation-wide. Providing our
customers accessibility and convenience is a prime target, within an atmosphere
and culture of dedicated service and recognition of their needs.
1.1
What is Riba?
The Holy Quran did not give any definition for the term for the simple reason that
it was well known to its immediate audience. But many scholars defined Riba in
the following words.
Riba is Arabic word. It means increase, addition, expansion or growth.
Imam Abubakr Al-Jassas (D.380 AH) in his famous work Ahkamul Quran has
explained riba in the following words:
And the riba which was known to and practiced by the Arabs was that they used
to advance loan in the form of Dirham (silver coin) or Dinar (gold coin) for a
certain term with an agreed increase on the amount of the principal advanced.
Shariah Board
The members of the Shariah Board of Meezan Bank are Internationally-renowned
scholars serving on the boards of many Islamic banks operating in different
countries.
The members of the Shariah Board are:
Chairman, Shariah Board Dow Jones Islamic Market Index, New York
BOARD OF DIRECTORS
10
Mohammad Hussain
Tarik Kivanc
Mazen Khalid Al-Braikan
Irfan Siddiqui (President & Chief Executive Officer)
Ariful Islam (Chief Operating Officer)
Rana Ahmad Humayun
11
12
Meezan bank is provide services in the market to their customers and shareholders
its nature is reflected by its admission statements.
Our Vision
Our Mission
13
Our Objectives
14
15
16
17
Introduction of Products
Typesofproductsoffered
Riba Free Meezan Providence
Riba Free - Certificates of Islamic Investment
Riba Free - Monthly Musharakah Certificate
Riba Free - Dollar Saving Account
Riba Free - Rupee Saving Account
Riba Free - Current Account
Car Ijarah - Islamic Car Financing
It is a long term investment product especially designed for the need and to fulfil
the requirements of the corporate and business concerns for purpose of
investing their provident, pension and Gratuity Funds as any sensible and wise
person who wants to invest his earning, his main concerns would be total security
along with the best returns possible, especially as these earnings or funds are a
trust from his employees and one that bears an important responsibility.
18
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.
Furthermore, its sterling track record shows consistently beneficial and highly
competitive returns for their 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.
High returns
19
The riba free Monthly Musharakah Certificates are a flexible investment product
which has been designed to give the depositor a monthly return which is
Halal. The depositors participate with the bank in the pool of investments
Islamia University Of Bahawalpur (Rahim Yar Khan Campus)
20
which is
comprised of
Murabaha
The minimum
investment required is required is only PKR 100,000 and you receive profit
for each complete month of investment with the bank. The profit rate, so
calculated, is applied to all investments which mature between the periods starting
from the 6thday of each month to the 5thday of the next month. During your
relationship with us, you would be entitled to receiving the following additional
benefits.
No restriction on withdrawals.
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. Apart from first class service and personalized attention that our customers
get when they bank with us, we offer the following additional conveniences to our
customers.
21
Personalizedchequebooks
Norestrictiononwithdrawalsornumberoftransactions.
Callcentrefacilities
Monthlyprofitpayment
Freebankbalancecertificates
Takingstoppaymentinstructions.
Takingholdmailinstructions.
Issuanceofduplicatestatementofaccount.
Personalfinancialconsultancyservices.
Accesstoprioritydesk.
With a minimum of only PKR 10,000 THE Rupee Saving Account can be opened
under musharakah agreement. The profit earned is calculated every month. And if
the client maintains a monthly balance of PKR 10,000 the client is eligible for the
profits that will be disbursed every month. However, the clients of COII may open
this account with any minimum balance.
Profit calculation is based on weight ages in the following tiers:
PKR 10,000 up to PKR 9,999,999
PKR 10,000,000 up to PKR 49,999,999
PKR 50,000,000 up to PKR 99,999,999
Islamia University Of Bahawalpur (Rahim Yar Khan Campus)
22
23
car will be given to the customer for the period agreed on the time of contract. In
car Ijarah the asset remains in the ownership and risk of bank and the customers
only pay the rentals for use of the asset: just like house rent. The product
has grown all over the country with a portfolio of Rs 291 million as of 31st
December with non-performing contracts.
No application fee
No advance Rental
1.
Musharakah
2.
Mudarabah
3.
Ijarah
24
Musharakah
Hadees-e-Qudsi
25
if the joint venture fails to produce fruits. Islam has termed interest as an unjust
instrument of financing because it results in injustice either to the creditor or to
the debtor. If the debtor suffers a loss, it is unjust on the part of the creditor to
claim a fixed rate of return; and if the debtor earns a very high rate of profit, it is
injustice to the creditor to give him only a small proportion of the profit leaving
the rest for the debtor.
Risk of Loss:-
26
which
should not
discourage
possibility of loss in a financial institution is much less than the possibility of loss
27
28
29
30
However, the solution to this problem is very easy. The client, while entering into
the musharakah, may put a condition that the financier will not interfere with the
management affairs, and he will not disclose any information about the business
to any person without prior permission of the client. Such agreements of
maintaining secrecy are always honored by the prestigious institutions, especially
by the banks and financial institutions whose entire business is based on
confidentiality.
31
In respect of the second factor, all that can be said is that in some Muslim
countries, rate of taxation are indeed prohibitive and unjust. Islamic Banks as
well as their Clients must lobby with the governments and struggle to change
the laws which hamper the progress towards Islamic banking. The governments
should also try to appreciate the fact that if rates of taxation are reasonable and if
the tax-payers are convinced that they will benefit by honestly paying their taxes,
this would increase, and notdecrease, government revenues.
Termination of Musharakah
Musharakah is deemed to be terminated in any one of the following events:
(1) Every partner has a right to terminate the musharakah at any time after giving
his partner a notice to this effect, whereby the musharakah will come to an end.
In this case, if the assets of the musharakah are in cash form, all of them will be
distributed pro rata between the partners. But if the assets are not liquidated,
the partners may agree either on the liquidation of the assets, or on their
distribution or partition between the partners as they are. If there is a dispute
between the partners in this matter i.e. one partner seeks liquidation while the
other wants Partition or distribution of the non-liquid assets themselves, the latter
shall be preferred, because after the termination of musharakah, all the assets are
in the joint ownership of the partners, and a co-owner has a right to seek partition
or separation, and no one can compel him on liquidation. However, if the assets
are such that they cannot be separated or partitioned, such as machinery, then they
shall be sold and the sale-proceeds shall be distributed.
(2) If any one of the partners dies during the currency of musharakah, the contract
of musharakah with him stands terminated. His heirs in this case, will have
the option either to draw the share of the deceased from the business, or to
continue with the contract of musharakah.
32
(3) If any one of the partners becomes insane or otherwise becomes incapable of
effecting commercial transactions, the musharakah stands terminated.
Termination of Musharakah without closing the business If one of the
partners wants termination of the musharakah, while the other partner or
partners like to continue with the business, this purpose can be achieved by
mutual agreement. The partners who want to run the business may purchase the
share of the partner who wants to terminate his partnership, because the
termination of musharakah with one partner does not imply its termination
between the other partners.
However, in this case, the price of the share of the leaving partner must be
determined by mutual consent, and if there is a dispute about the valuation of the
share and the partners do not arrive at an agreed price, the leaving partner may
compel other partners on the liquidation or on the distribution of the assets
themselves.
The question arises whether the partners can agree, while entering into the
contract of the musharakah, on a condition that the liquidation or separation
of the business shall not be effected unless all the partners, or the majority of
them wants to do so, and that a single partner who wants to come out of the
partnership shall have to sell his share to the other partners and shall not force
them on liquidation or separation.
Most of the traditional books of Islamic Fiqha seem to be silent on this question.
However, it appears that there is no bar from the Shariah point of view if the
partners agree to such a condition right at the beginning of the musharakah. This
is expressly permitted by some Hanbali jurists. This condition may be justified,
especially in the modern situations, on the ground that the nature of
business,
in most cases today, requires continuity for its success, and the
33
If a particular business has been started with huge amounts of money which has
been invested in a long term project, and one of the partners seeks liquidation in
the infancy of the project, it may be fatal to the interests of the partners, as well as
to the economic growth of the society, to give him such an arbitrary power of
liquidation or separation.
Murabaha
Introduction
Most of the Islamic banks and financial institutions are using "Murabaha" as an
Islamic mode of financing, and most of their financing operations are based on
"Murabaha". That is why this term has been taken in the economic circles today
as a method of banking operations, while the original concept of "Murabaha" is
different from this assumption.
"Murabaha" is, in fact, a term of Islamic Fiqh and it refers to a particular kind of
sale having nothing to do with financing in its original sense. If a seller agrees
with his purchaser to provide him a specific commodity on a certain profit
added to his cost, it is called a "Murabaha" transaction. The basic ingredient
of "Murabaha" is that the seller discloses the actual cost he has incurred in
acquiring the commodity, and then adds some profit thereon. This profit may be
in lump sum or may be based on a percentage.
34
The subject of sale must be existing at the time of sale. Thus, a thing
which has not yet come into existence cannot be sold. If a non-existent thing has
been sold, though by mutual consent, the sale is void according to Shariah.
Example: A sells the unborn calf of his cow to B. The sale is void.
2. The subject of sale must be in the ownership of the seller at the time of sale.
Thus, what is not owned by the seller cannot be sold. If he sells something before
acquiring its ownership, the sale is void.
Example: A sells to B a car which is presently owned by C, but A is hopeful that
he will buy it from C and shall deliver it to B subsequently. The sale is void,
because the car was not owned byA at the time of sale.
35
some financial institutions are found using Murabaha for financing overhead
expenses of a firm or company like paying salaries of their staff, paying the bills
of electricity etc. and setting off their debts payable to other parties. This practice
is totally unacceptable, because Murabaha can be used only where a commodity is
intended to be purchased by the customer. If funds are required for some other
purpose, Murabaha cannot work. In such cases, some other suitable modes of
financing, like musharakah, leasing etc. can be used according to the nature of the
requirement.
2.
obtain funds. They never intend to employ these funds to purchase a specific
commodity. They just want funds for unspecified purpose, but to satisfy the
requirement of the formal documents, they name a fictitiously commodity.
After receiving money, they use it for whatever purpose they wish.
Obviously this is a fictitious deal, and the Islamic financiers must be very careful
about it. It is their duty to make sure that the client really intends to
purchase a commodity which may be subject to Murabaha. This assurance
must be obtained by the authorities sanctioning the facility to the customer. Then,
all necessary steps must be taken to confirm that the transaction is genuine.
For example:
(a) Instead of giving funds to the customer, the purchase price should be
paid directly to the supplier.
(b) If it becomes necessary that the client is entrusted with funds to purchase the
commodity on behalf of the financier, his purchase should be evidenced by
invoices or similar other documents which he should present to the financier.
36
(c) Where either one of the above two requirements is not possible to be
fulfilled, the financing institution should arrange for physical inspection of
the purchased commodities.
Anyhow, the Islamic financial institutions are under an obligation to make sure
that Murabaha is a real and genuine transaction of actual sale and is not
being misused to camouflage an interest-based loan.
3. In some cases, sale of commodity to the client is effected before the
commodity is acquired from the supplier. This mistake is invariably committed
in transactions where all the documents of Murabaha are signed at one time
without
taking
into
account
various
stages
of
the
Murabaha. Some
institutions have only one Murabaha agreement which is signed at the time of
disbursement of money, or in some cases, at the time of approving the facility.
This is totally against the basic principles of Murabaha. It has already been
explained in this article that the Murabaha arrangement practiced by the banks
is a package of different contracts which come into play one after another at
their respective stages. These stages have been fully highlighted earlier
while discussing the concept of 'Murabaha Financing'. Without observing this
basic feature of Murabaha financing, the whole transaction turns into an
interest-bearing loan. Merely changing the nomenclature does not make it
lawful in the eyes of Shariah.
The representatives of the Shariah Boards of the Islamic banks, when they check
the transactions of the bank with regard to their compliance with Shariah, must
make sure that all these stages have been really observed, and every transaction is
effected at its due time.
4. International commodity transactions are often resorted to for liquidity
management. Some Islamic banks feel that these transactions, being assetbased, can easily be entered into on Murabaha basis, and they enter the field
ignoring the fact that the commodity operations as in vogue in the
37
Uses of Murabaha
Murabahacanbeusedinfollowingconditions:
Short/Medium/LongTermFinancefor:
Rawmaterial
Inventory
Equipment
38
Assetfinancing
Importfinancing
Exportfinancing(Preshipment)
Consumergoodsfinancing
Housefinancing
Vehiclefinancing
Landfinancing
Shopfinancing
PCfinancing
Ijarah
"Ijarah" is a term of Islamic fiqh. Lexically, it means 'to give something on rent'.
In the Islamic jurisprudence, the term 'Ijarah' is used for two different
situations. In the first place, it means 'to employ the services of a person on
wages given to him as a consideration for his hired services."
The employer is called 'mustajir' while the employee is called 'ajir'.
Therefore, if A has employed B in his office as a manager or as a clerk on a
monthly salary, A is mustajir, and B is an ajir. Similarly, if A has hired the
services of a porter to carry his baggage to the airport, A is a mustajir while the
porter is an ajir, and in both cases the transaction between the parties is termed as
Ijarah. This type of Ijarah includes every transaction where the services of a
person are hired by someone else. He may be a doctor, a lawyer, a teacher, a labor
or any other person who can render some valuable services. Each one of them
may be called an 'ajir' according to the terminology of Islamic law, and the
person who hires their services is called a 'mustajir', while the
wages paid to the ajir are called their 'ujrah'.
39
The second type of Ijarah relates to the usufructs of assets and properties, and not
to the services of human beings. 'Ijarah' in this sense means 'to transfer the
usufruct of a particular property to another person in exchange for a rent
claimed from him.' In this case, the term 'Ijarah' is analogous to the English term
'leasing'. Here the lessor is called 'Mujir', the lessee is called 'mustajir' and the
rent payable to the lessor is called 'ujrah'
Both these kinds of 'Ijarah' are thoroughly discussed in the literature of
Islamic jurisprudence and each one of them has its own set of rules. But for the
purpose of the present book, the second type of Ijarah is more relevant, because
it is generally used as a form of investment, and as a mode of financing
also.
The rules of Ijarah, in the sense of leasing, are very much analogous to the rules
of sale, because in both cases something is transferred to another person for a
valuable consideration. The only difference between Ijarah and sale is that in
the latter case the corpus of the property is transferred to the purchaser,
while in the case of Ijarah, the corpus of the property remains in the
ownership of the transferor, but only its usufruct i.e. the right to use it, is
transferred to the lessee.
Therefore, it can easily be seen that Ijarah is not a mode of financing in its
origin. It is a normal business activity like sale. However, due to certain
reasons, and in particular, due to some tax concessions it may carry, this
transaction is being used in the Western countries for the purpose of
financing also. Instead of giving a simple interest - bearing loan, some
financial institutions started leasing some equipments to their customers. While
fixing the rent of this equipment, they calculate the total cost they have incurred
in the purchase of these assets and add the stipulated interest they could have
claimed on such an amount during the lease period. The aggregate amount so
40
calculated is divided on the total months of the lease period, and the monthly rent
is fixed on that basis.
The question whether or not the transaction of leasing can be used as a
mode of financing in Shariah depends on the terms and conditions of the
contract. As mentioned earlier, leasing is a normal business transaction and not a
mode of financing. Therefore, the lease transaction is always governed by the
rules of Shariah prescribed for Ijarah. Let us, therefore, discuss the basic rules
governing the lease transactions, as enumerated in the Islamic Fiqh. After the
study of these rules, we will be able to understand under what conditions the
Ijarah may be used for the purpose of financing.
Although the principles of Ijarah are so numerous that a separate volume is
required for their full discussion, we will attempt in this chapter to
summarize those basic principles only which are necessary for the proper
understanding of the nature of the transaction and are generally needed in the
context of modern economic practice. These principles are recorded here in the
form of brief notes, so that the readers may use them for quick reference.
remains
transferred to the lessee. Thus, anything which cannot be used without consuming
Islamia University Of Bahawalpur (Rahim Yar Khan Campus)
41
cannot be leased out. Therefore, the lease cannot be effected in respect of money,
eatables, fuel and ammunition etc. because their use is not possible unless they are
consumed. If anything of this nature is leased out, it will be deemed to be a loan
and all the rules concerning the transaction of loan shall accordingly apply. Any
rent charged on this invalid lease shall be an interest charged on a loan.
4. As the corpus of the leased property remains in the ownership of the
lessor, all the liabilities emerging from the ownership shall be borne by the
lessor, but the liabilities referable to the use of the property shall be borne by the
lessee.
Example:A has leased his house to B. The taxes referable to the property shall be borne by
A, while the water
tax, electricity bills and all expenses referable to the use of the house shall be
borne by B, the lessee.
5. The period of lease must be determined in clear terms.
6. The lessee cannot use the leased asset for any purpose other than the purpose
specified in the lease agreement. If no such purpose is specified in the agreement,
the lessee can use it for whatever purpose it is used in the normal course.
However if he wishes to use it for an abnormal purpose, he cannot do so unless
the lessor allows him in express terms.
7. The lessee is liable to compensate the lessor for every harm to the leased asset
caused by any misuse or negligence on the part of the lessee.
8. The leased asset shall remain in the risk of the lessor throughout the lease
period in the sense that any harm or loss caused by the factors beyond the control
of the lessee shall be borne by the lessor.
42
9. A property jointly owned by two or more persons can be leased out, and
the rental shall be distributed between all the joint owners according to the
proportion of their respective shares in the property.
10. A joint owner of a property can lease his proportionate share to his co-sharer
only, and not to any other person.
11. It is necessary for a valid lease that the leased asset is fully identified
by the parties.
Example:A said to B. "I lease you one of my two shops." B agreed. The lease is void,
unless the leased shop is clearly determined and identified.
Determination of Rental:12. The rental must be determined at the time of contract for the whole
period of lease. It is permissible that different amounts of rent are fixed for
different phases during the lease period, provided that the amount of rent for each
phase is specifically agreed upon at the time of effecting a lease. If the rent for a
subsequent phase of the lease period has not been determined or has been left at
the option of the lessor, the lease is not valid.
Example (1)
A leases his house to B for a total period of 5 years. The rent for the first year is
fixed as Rs. 2000/- per month and it is agreed that the rent of every subsequent
year shall be 10% more than the previous one. The lease is valid.
43
Example (2):
In the above example, A puts a condition in the agreement that the rent of Rs.
2000/- per month is fixed for the first year only. The rent for the subsequent years
shall be fixed each year at the option of the lessor. The lease is void, because the
rent is uncertain.
The determination of rental on the basis of the aggregate cost incurred in the
purchase of the asset by the lessor, as normally done in financial leases, is
not against the rules of Shariah, if both parties agree to it, provided that all
other conditions of a valid lease prescribed by the Shariah are fully adhered
to.
14. The lessor cannot increase the rent unilaterally, and any agreement to to this
effect is void.
15. The rent or any part thereof may be payable in advance before the
delivery of the asset to the lessee, but the amount so collected by the lessor
shall remain with him as 'on account' payment and shall be adjusted towards the
rent after its being due.
16. The lease period shall commence from the date on which the leased asset has
been delivered to the lessee, no matter whether the lessee has started using it or
not.
17. If the leased asset has totally lost the function for which it was leased, and no
repair is possible, the lease shall terminate on the day on which such loss has been
caused. However, if the loss is caused by the misuse or by the negligence of
the lessee, he will be liable to compensate the lessor for the depreciated
value of the asset as; it was immediately before the loss.
44
When I have start internship of Islamic Meezan Bank at 2nd September 2008. In first day I
have sat with Mr. Subtain (Operation Manager). He has very good person and he have
help me in this department that they have customer relationship department and try to
good information to customer or me relative to Meezan Bank so I have under your work
of one week. All members of the branch are very committed to their work. According to
hierarchy chart from top to bottom are very committed of work and prove helpful for me
during my internship.
Marketing department
Credits
Deposits
Clearing department
45
Training program
1st week
I started my first day of internship with the introduction of bank employees
and with introduction of bank departments. In This week just know how work done in the
various departments in the bank Like:
Finance
Marketing
IT
I knew about the purpose of the bank and the functions of the bank and judge the
practical performance of the departments.
I started my second day of internship with the lecture of the bank officer. He told
us about Riba and its types:
Riba al Nasiah
Riba al Fadl
I learnt about IBTDR (Islamic Bank Term Deposit Receipts) and knew what its
meaning and functions.
46
I knew about different types of saving accounts like MBA (Meezan Bachat
Account), KMA (karobari Munafa Account), COII, MMC, MAC and etc. these
are MUDARABA based deposits products.
I learnt about the profit rates of the accounts and procedures to open these
accounts.
I learnt about also CDR (Call Deposit Receipts) and its procedure and knew its purpose
and how to fill it an proceed.
Single
Joint personal
Sole proprietorship
The requirement for opening these types of a/c are
NIC copy.
occupation
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The reference of any person who has already the a/c or any respected personality
The signatures are done on form as well as on the specimen signature card from
where the signature will be scanned as a record in computer
Partnership
Limited company
Trusts
Clubs
Association etc.
Authority letter, in original, in favor of the person authorized to operate on the a/c
of the firm.
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Certificate of incorporation
Trusts a/c
"The most difficult task related to bank for a common citizen is to open an a/c in any
bank" said Sir Tanveer.
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Then the two applicant forms are filled in front of me. It took too much time to gather the
information from applicant.
I filled up some forms for practical practices and knew about the nature of the
form.
I practically performed how letter of thanks attached to the forms and send to the
customer.
I learnt about the different types of stamps, which are necessary for the account
opening and learnt about the use of the stamps at the right place.
I learnt how to attach signature specimen card to the account opening form for
bank record.
4th Week
I started my week of internship with the daily lectures of the bank officer (Mr. Subtain
[OGII]) who is the organizer of internship program for internees in meezan bank.
In account opening department I learnt the use of ATM card and learnt how to fill
ATM form.
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I learnt how on line payments are made and how cash or receipts are transferred.
First of all I learnt about ATM PIN ISSUANCE procedure and knew why it is
necessary for customer or account holder.
Then he showed us module in computer that how he enters the data of customer
and how it proceeds.
After proceeding computer shows a pin number that is issued for that customer
who filled the form for ATM. And this work is done means pin issuance by Head
Office.
Then I learnt about the term ATM Cash Replenish. He told us that how it works and
what its procedure and why it is used.
5th Week
I started my working day with some work, which has to complete from the previous week
with account opening forms.
I learnt about inward and out ward clearing and learnt how the transactions are
made.
I learnt how to write the inward clearing cheques in the transaction record book.
I learnt to deduct the return cheques from the added amount of all cheques.
THEN
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I started my work again in Accounts Department. The officer also does/handle the other
work Like REMITTANCE department.
I learnt about the PAY ORDER and DEMAND DRAFT. He told us the difference
of Pay Order and DD.
I learnt also about the procedure of it. I also saw the Pay Order cheque and knew
about its attributes.
But DD is not made in Sahiwal Branch. But sometimes if necessary then they
made it. But mostly Pay Orders are made and send it to other cities also. Only
Meezan Bank provide this opportunity of Pay Order to send outside the city also.
The officer told us its functions and charges and I knew about that how can hold
locker and which documents are required for getting the lockers. Lockers are the
fire proof.
I attended the weekly meeting of bank manager with employees and attended the
lecture about modern way of banking delivered by the bank manager for the
success if the branchs business.
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I started my day with the daily lecture and general discussion about banking and scope of
banking in Pakistan in coming years.
I gave my feedback as a internee about the environment of the bank and about
my work experience in that department
In it I knew that how can get and send money from and to foreign countries.
He told us its procedure and function. I knew about how the message can
create and what sources are used for it.
Then I learnt about SMS ALERTS. He told us its function and I knew about
that what information is required for its activation and what information it
gives to customer through SMS.
I learnt what are the Local Posting and Online Transferring and how it is
done.
Then I learnt what Stop Payment is and how it is performing and what its
terms and conditions.
I knew about what Account Closing is and what its procedures to close it and
what charges are required for it.
Then I saw the module of daily Accounts and Expense Entries posting. And
knew about the reason of entering it.
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8th Week
I started my 8th week of internship with the lecture of the Bank Manager who is Mr.
Shoaib, the lecture was about Islamic banking and its differences in convention banking.
Then I learnt about Islamic Banking and knew what its actual meaning.
In Islamic Banking a term Riba Free is used which means Avoid Interest.
Islamic Banking is a system of Trade where Goods and Services are sold and
Capital is invested to earn Halal profit by taking Risk.
I learnt about Convention Banking which is based on Pricing money and earning
Interest.
Apparently Islamic and Convention Banking may look same but Islamic Banking
is permissible means Allah has permitted trade and forbidden Riba.
I learnt about difference b/w Islamic and Convention Banking up to some extent.
The Officer who is Mr. Faysal gave the overview of his working that he does.
I learnt about cheques how to fill them and knew about its functions.
Then I learnt about cross cheque and cross cheque has two types:
Simple crossing
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Special crossing
I knew also another type of cheque that is Order Cheque and its
purpose and
function. That day I learnt about cheque procedure and its use in different ways.
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Net Profit
Years
profit
2005
20.15
2006
17.80
2007
16.27
2008
8.27
From above we can analyze that growth are decreasing as per year so the bank has to
work over to improve their net profit. Bank has to remove if there is any barrier.
Market Share
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With the Strategic Plan in place our task for 2008 will be very challenging in the current
political situation and economic slow down witnessed in the last three months. However,
the Bank has a positive outlook for the country and believes that the future government
will continue with the growth policies. Therefore, the Bank will continue to build market
share through an aggressive branch expansion plan supported by a strong technology
backbone. Meezan Bank plans to expand its branch network to approximately 140
branches by the end of the year that will further increase its customer out-reach
INSHALLAH.
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 Banks 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.
Years
Total Assets
2005
30676
2006
46439
2007
67179
2008
85276
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2005
23.25
2006
19.50
2007
38.55
2008
21.48
From above we can analyze that the share price is low as compared to previous year, so
we have to keep focus on it. Make a plan to improve or increase price to attract previous
share holders.
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Number of Employees
Meezan Bank continued to attract and recruit staff through 2008 for its aggressive branch
expansion plan as well as for its Head Office departments. Meezan Bank believes that its
3000+ employees are its greatest asset and a major reason for its growth and success.
Years
Employees
2005
786
2006
1389
2007
2205
2008
3170
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Liquidity Ratio
It is the relationship between the current assets and current liabilities of a concern.
Current Ratio = Current Assets/Current Liabilities
Year
Current assets
Current liabilities
Current Ratio
2005
6812761
3242446
2.1
2006
10212269
4848440
2.10
2007
9373577
3607766
2.59
2008
7108685
5065513
1.4
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Solvency Ratio
Year
Debt liabilities
Net assets
Debt equity Ratio
2005
24408794
6812761
3.58
2006
36826824
10212269
3.60
2007
57864137
5706656
10.13
2008
74325579
5974978
12.4
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Profitability ratio
Year
Net Profit margin
Gross profit margin
Return on capital
employed
2005
18.5
43.83
.018
2006
17.80
45.86
0.0020
2007
16.27
46.39
.0022
2008
8.27
54.61
.0024
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2007
2006
2005
Investment Ratio
Year
Earning Per Share
Price Earning Ratio
Dividend Per Share
2005
1.16
15.92
16
2006
1.88
10.51
10
2007
1.96
15.2
20
2008
1.26
17.03
8.6
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In 2007 the per share earning is good but it decreases in 2008 1.96 to 1.26 so the
management has to give attention here.
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The dividend has decreased 20 to 8.6 R.s. This is very bad for companys good will or
stock market. Management has to focus over it other wise the company has to bear more
loss in future.
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2005
1.67
16.70
2006
1.57
15.64
2007
1.70
10.30
2008
.82
18.39
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Authentic marketing is not the art of selling what you make but knowing
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Philip Kotler
A small survey was conducted by asking some of the bank employees to do a SWOT
analysis of the bank in light of their experience in the banking field. My analysis,
consolidated with theirs', is given below:
Strengths
The largest Islamic Bank in Pakistan with a network of over 166 branches in 40
cities. And ending this year they have increase his branches in Pakistan to 180
branches.
Karachi, August 20, 2008: Meezan Bank, the largest Islamic Bank in Pakistan has
been conferred the Best Islamic Bank Award by Rawalpindi Chamber of
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Commerce and Industry. The Chief Minister of Punjab Mr. Shahbaz Sharif
bestowed this award to Mr. Saleem Khan Regional Manger - North, Meezan Bank
at 21st RCCI achievement awards ceremony held at the Convention Center in
Islamabad.
Strong shareholding
Weaknesses
High charges for different activities such as online or Demand Draft as compared
to competitors.
The Islamic economic system is not something that can work in isolation of the
geo-political and legislative system, as well as, and more importantly the society's
behaviors towards the injunctions of Islamic Shariah in personal and collective
matters. Accordingly, one can easily imagine that in an economy whereby most of
the businessmen are not honest in fairly presenting the financial statements of
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Opportunities
Venturing into Islamic groups out side the countries as opportunity to expand
business in UAE and Golf states. i-e financial institutions.
Coming up with. Products for the SME to targeting the medium level customers.
Doing business with companies having Islamic mindset. I-e Islamic financial
Institutions.
Threats
New competitors setting up their Islamic banking sections and they have the
infrastructure, skill, ability, resources & attitude to capture the market more than
the Meezan bank.
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Govt. policies are mostly for conventional banking system not for specially
designed for Islamic banking.
Reviewing this SWOT analysis from time to time would help evaluate the bank's
position. It would help the management in comparing their strengths of the past with
those of the present and to what extent the management has been able to overcome the
weaknesses.
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I spent eight weeks of my internship in MBL RYK Branch. During these eight weeks, I
felt myself to be a part of bank. Even, this was my first experience of working in a bank,
but I learned a lot from this experience. Based on my experience & observation regarding
the operations and policies of Meezan Bank, I have tried to stipulate some
recommendations for further improvement.
Meezan Bank Limited should establish a Department of Human Resource
Management.
Meezan Bank Limited should continue to expand its business, by increasing its
deposit portfolio through aggressive market penetration strategies.
Meezan Bank Limited needs to improve its website.
More information relating to financial performance of the bank should be
available on the website.
Management should distribute work equally among different employees.
Some of the employees are overburdened while some sections are overstaffed.
Related jobs should be assigned to the employees so that they can work more
efficiently.
Cheques, which are drawn on Meezan Bank Branch and returned unpaid in
clearing, are not reflected in the Statement of Account of the customers. These
cheques must be reflected in the accounts so that credibility of the customers may
be assessed.
The employees should be signed jobs for specific period and than they should
shifted to other department so that they gain knowledge of other jobs. Lockers,
ATM, all these facilities should be provided to attract more customers.
Increase the Size of waiting room.
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For Future
Here it been a conventional bank equipped with an extensive network and complete
portfolio of products, we would have proposed.
"Early to bed, early to rise
Work like hell & ADVERTISE"
But this is not the case with Meezan Bank. The network and the portfolio of the products
offered are limited. For this we would propose...
Early to bed, early to rise
Work like hell & IMPROVISE"
In this particular scenario, the word IMPROVISE stands for;
Innovation
Market perceptions
Prudence
Rifle approach
Vision
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TV. Advertising
Press Advertising
It will ensure proper auditing and monitoring, which will in turn inspire public
confidence in the bank.
Develop the healthy and sound competition b/w employees and bosses.
Meezan bank does not provide job security to the employees. Mostly are hired on
contractual basis. More people must be employed on permanent basis/ providing
job security and satisfaction.
There is no separate department for the training of new employees. There should
be establishment of a separate department for the training of the new employee
and a competent teaching staff should be hired for their training.
MBL should become very specific about its competitors, so that it can understand
whose its competitor is in the first degree and who is in the second degree. Then
the first-degree
A research cell should continuously try to gather information about the present
action so its competitors and expected future actions. So in this way more
effective strategies can be formulated.
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The worker should be given sense of teamwork and the managers should be
trained to manage the team as a good leader.
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One of the most important aims of the student life is to express him / her correctly and
adequately. This was believed in my mind when I first decided to go to Islamic Meezan
Bank Limited to complete my internship program.
The organization has been not growing both in size and profit for past few years
and but repute in the market is good. The employee turnover is very high which they have
to cut down as they are losing a number of good trained employees due to its poor policy.
The year 2007 is expected to offer increased competition in the secured assets business as
more Islamic banks are in the market. With their focused strategy and product
development initiatives planned for the year, Meezan Bank is strongly positioned to meet
these challenges. The bank has very well repute in the market. Overall bank is going well
and doing a good business but there are few problems for that I have tried to give few
recommendations that might help company to improve. So finally this internship program
has helped me a lot in gaining practical knowledge of job that will help me in the
practical life once I complete my BBA.
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Reference& sources:
I used following references to prepare my reports
Manager of the branch
1I collect information from manager in the form interviews
Operation manger
Employees of the branch
1I collect information from other staff members of the branch in the form
interviews.
Pamphlet or brochure
I also study the different pamphlet of the different products and department
Friends and teachers
The most important of me in the preparation in my reports are my friends and my
teachers who help me and guided at each step.
Internet
The very important source where I collect data about the Meezan bank is the
internet. I visit cite of the Meezan bank and AL-Meezan investment group.
Following are both the websites are.
www.meezanbank.com.pk
www.almeezan.com.pk
Annual Report 2007, 2008
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