Management Profile(Executive Summary

)

A committed team of highly qualified, experienced professionals, financially sound and reputed sponsors manages the Company. Through sheer dedication, diligence and the Almighty’s Beneficence the management team at Meezan Bank Limited have earned reputation for excellence

Bank
A bank or banker is a financial institution that acts as a payment agent for customers, and borrows and lends money. Banks acts as payment agents by conducting current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to the customer's current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, EFTPOS, and ATM. Banks borrow money by accepting funds deposited on current account, accepting term deposits and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current account, by making installment loans, and by investing in marketable debt securities and other forms of lending. Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account.

ACCORDING TO BANKING COMPANIES ORDINANCE 1962

“Banking means the accepting, for the purpose of lending, or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by checque, draft, order or otherwise.”
“Banking companies mean companies which transact the business of banking in Pakistan.”

Banks borrow most funds borrowed from households and non-financial businesses, and lend most funds lent to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings to.

Definition of a Bank
A bank is defined as a person who carries on the business of banking, which is:
• • •

conducting current accounts for customers paying cheques drawn on him, and collecting cheques for his customers.

In most English common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments, including cheques, and this Act contains a statutory definitions of the term banker : ' banker includes a body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation). Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank transactions such as cheques do not depend on how the bank is organised or regulated

Origin of the word
There are various views about the origin of the word “bank”. The 1st view is that The name bank derives from the Italian word banco "desk/bench", used during the Renaissance by Florentines bankers, who used to make their transactions above a desk covered by a green tablecloth. However, there are traces of banking activity even in ancient times. The other point of view is that it has originated from German word “banc” which means a joint stock firm. In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome- that of the Imperial Mint.

Islamic banking
Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles and guided by Islamic economics. In particular, Islamic law prohibits usury, the collection and payment of interest, also commonly called riba in Islamic discourse. In addition, Islamic law prohibits investing in businesses that are considered unlawful, or haraam (such as businesses that sell alcohol or pork, or businesses that produce media such as gossip columns or pornography, which are contrary to Islamic values). In the late 20th century, a number of Islamic banks were created, to cater to this particular banking market.

Principles
Islamic banking has the same purpose as conventional banking except that it operates in accordance with the rules of Shariah, known as Fiqh al-Muamalat (Islamic rules on transactions). The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba´ (interest). Amongst the common Islamic concepts used in Islamic banking are profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijarah). In an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. However, the fact that it is profit cannot be made explicit and therefore there are no additional penalties for late payment. In order to protect itself against default, the bank asks for strict collateral. The goods or land is registered to the name of the buyer from the start of the transaction. This arrangement is called Murabaha. Another approach is Ijara wa Iqtina, which is similar to real-estate leasing. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid). There are several other approaches used in business deals. Islamic banks lend their money to companies by issuing floating rate interest loans. The floating rate of interest is pegged to the company's individual rate of return. Thus the bank's profit on the loan is equal to a certain percentage of the company's profits. Once the principal amount of the loan is repaid, the profitsharing arrangement is concluded. This practice is called Musharaka. Further, Mudaraba is venture capital funding of an entrepreneur who provides labor while financing is provided by the bank so that both profit and risk are shared. Such participatory arrangements between capital and labor reflect the Islamic view that the borrower must not bear all the risk/cost of a failure, resulting in a balanced distribution of income and not allowing lender to monopolize the economy.

And finally, Islamic banking is restricted to Islamically acceptable deals, which exclude those involving alcohol, pork, gambling, etc. Thus ethical investing is the only acceptable form of investment, and moral purchasing is encouraged. Islamic banking is synonymous with fullreserve banking, with banks achieving a 100% reserve ratio. However, in practice, this is not always the case. Islamic banks have grown recently in the Muslim world but are a very small share of the global banking system. Micro-lending institutions founded by Muslims, notably Grameen Bank, use conventional lending practices and are popular in some Muslim nations, especially Bangladesh, but some do not consider them true Islamic banking. However, Muhammad Yunus, the founder of Grameen Bank and microfinance banking, and other supporters of microfinance, argue that the lack of collateral or excessive interest in micro-lending is consistent with the Islamic prohibition of usury (riba).

History of Islamic Banking in Pakistan and the Emergence of Meezan Bank Limited
"Seek the other world by means of what Allah has bestowed upon you"
(28:77) The Holy Quran "We must work our destiny in our own way and present to the works an economic system based on true Islamic concept of equality of manhood and social justice"Quaid's concept of Islamic Banking [Opening Ceremony of The State Bank of Pakistan on July 1, 1948] "Establish Islamic banking as banking of choice to facilitate implementation of an equitable economic system, providing a strong foundation for establishing a fari and just society for mankind"Vision, Meezan Bank Limited.

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

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

1985
Commercial banks transformed their nomenclature stating all Rupee saving accounts as interest-free. However, foreign currency deposits in Pakistan and foreign loans continued as before.

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

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

Meezan continues its leadership position in the industry by more than doubling it branch network to a total of 62 branches in 21 cities. The signing of this MoU has ushered Pakistan into a new era of Islamic Insurance (Takaful). A wide range of products are developed and launched consolidating the Bank’s position as the premier Islamic Bank of the country Al Meezan Investment Management Limited (AMIM). 2004 The State Bank establishes a dedicated Islamic Banking Department (IBD) by merging the Islamic Economics Division of the Research Department with the Islamic Banking Division of the Banking Policy Department. 2007 2007 Meezan Bank creates a significant milestone in the history of Islamic Banking by opening its 100th branch in the city of Karachi. becomes the first Islamic bank to introduce 8 am to 8 pm banking at select branches in Karachi. 2008 . establishing clearly establishing itself as the largest Islamic Bank of the country. The offering is a success and establishes a benchmark for Pakistan. The first Islamic banking license is issued to the Bank and it is renamed Meezan Bank. Two new dedicated Islamic Banks start operations in Pakistan. the asset management arm of Meezan Bank. 2002 Meezan Bank acquires the Pakistan operations of Societe Generale and concurrently Al Meezan Investment Bank converts itself into a full fledged Islamic commercial bank. Meezan Bank acts as the Shariah Structuring Advisor for this historic transaction. 2005 Meezan Bank becomes the first customer of Islamic Insurance (Takaful) by signing the first Memorandum of Understanding MoU with Pak-Kuwait Takaful Company Limited (PKTCL). namely Emirates Islamic Bank and Dawood Islamic Bank. The Government of Pakistan awards the mandate for debut of international Sukuk (Bond) offering for USD 500 million. The government sets up a high level commission. President General Pervez Musharraf inaugurates the new Islamic commercial Bank at a formal ceremony in Karachi. 2003 Meezan Bank establishes itself as the pioneer of Islamic Banking in Pakistan and quickly establishes branches in all major cities of the country. namely Bank Islami and Dubai Islamic Bank. With 100 branches in 31 cities clearly positions the Bank as the leading Islamic Bank in Pakistan. commence operations in Pakistan. task forces and committees to institute and promote Islamic banking on parallel basis with conventional system. the country’s first open-end Islamic Mutual Fund.1999 The Shariat Appellate Bench of the Supreme Court of Pakistan rejects the appeals and directs all laws on interest banking to cease. 2006 A number of new dedicated Islamic Banks. State Bank of Pakistan sets criteria for establishment of Islamic commercial banks in private sector and subsidiaries and stand-alone branches by existing commercial banks to conduct Islamic banking in the country. Meezan Bank. 2001 The Shariah Supervisory Board is established at Al-Meezan Investment Bank led by Justice (Retd. A Shariah Board has been appointed to regulate and approve guidelines for the emerging Islamic Banking industry. introduces Meezan Islamic Fund (MIF).) Muhammad Taqi Usmani as chairman.

in an historic initiative. Ijarah. The Banks main shareholders are leading local and international financial institutions. Pakistan rs Industry Islamic Banking Murabaha. 2002. Diminishing Products Musharakah. Consumer Banking etc. the . ATM/Debit Card. Meezan Bank was granted the Nations first full-fledged commercial banking license dedicated to Islamic Banking. first incorporated on January 27. It started operations as an Islamic investment bank in August of the same year. by the State Bank of Pakistan. and is catering to an increasingly astute and demanding financial consumer who is also becoming keenly aware of Islamic Banking.Introduction Private Type KSE: LSE: Founded Al-Meezan Investment Bank Headquarte Karachi. stands today at a noteworthy point along the evolution of Islamic Banking in Pakistan. Meezan Bank. 1997. the only AAA rated financial entity in the country.com/ Meezan Bank Limited is a publicly listed company. Savings. 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. including "Pak Kuwait Investment Company". The banking sector is showing a significant paradigm shift away from traditional means of business.meezanbank. Revenue PKR Website http://www. In January.

offering a one-stop shop for innovative value added products and services to our customers within the bounds of Shariah. respect for individual enterprise and performance. while optimizing the stakeholders value through an organizational culture based on learning. Our Service Mission . The established position. reputation. Mission To be a premier Islamic bank. providing a strong foundation for establishing a fair and just society for mankind. Vision & Mission Vision Establish Islamic banking as banking of first choice to facilitate the implementation of an equitable economic system. fairness. of these institutions add significant value to the Bank through Board representation and applied synergies. and the renown ‘Shamil Bank of Bahrain’.‘Islamic Development Bank of Jeddah’. strength and stability.

The combination of these three results in the relationships that we form.To develop a committed service culture which ensures the consistent delivery of our products and services within the highest quality service parameters. It is our endeavor to ensure that they receive efficient and timely service. The Core Values define the brand personality. namely South Region which has 39 branches. Relationships: Is long term with Meezan Bank? We recognize and value our customers’ needs above all. Key Corporate Values Core Values: Shariah Compliance. and is committed to offering comprehensive value-based Shariah-compliant financial solutions. All customers are treated with professionalism and in a friendly manner. and together they define our staff. Asset Management The Asset Management business is managed through a subsidiary Al Meezan Investment Management Limited. strong. Service Excellence. Like the movement of water in ripples. Central Region with 40 branches and North Region with 21 branches. our key corporate values are concentrically interlinked. Social Responsibility. motivated. and strive to ensure their fulfillment. who is an extremely loyal and dependable friend and business partner. empathic. The Retail Bank is organized in three Regions across Pakistan. and professionally trained employees who are empathic to their customer’s needs. Let there be light . Staff: Committed. Brand Personality: A sober and established. promoting Islamic values and ensuring recognition and a quality banking experience to our customers. Professionalism. The Meezan Bank experience is a unique one. Integrity. professional person.

Although the wheel's primary purpose is travel. When we tryto imagine life without a source of light other than the sun. it is immediately obvious why we have chosen the light bulb as the first of man's five achievements to which we are paying a tribute. The invention of the wheel did more than just provide a transport related solution. including all kinds of displays such as LCDs. machines around the world rely on cogs to keep production going. It paved the way for other advancements that have followed ever since. .The light bulb arguably did more to change the face of the world than any other invention in history. The millions of wheels across the globe. where the wheel is indispensable. Every day. one of the major subsequent uses is its industrial application. from aircraft tyres to tiny cogs are deserving of our tribute as they continue to keep the world moving.

. "hello". and the internet. From books to post-it notes and from tissue paper to money. to name a few. it is a standing ovation to the one piece of technology that has been the preface for a book whose chapters include the fax.The first word spoken on a telephone. the telephone was more than an independent innovation. many of the things we are surrounded by today owe their origin to papyrus. the earliest form of paper. If it wasn't for the invention of papyrus. but its applications are such that the world would be incomplete without it. cellular telephones. It spawned a wave of technological advancement. As the word is echoed by millions of people on phones everyday. more than tells the story of communication through time. Like the bulb. you probably would not be holding this annual report in your hands. It is an invention that we often take for granted.

our strong financial backing is the cornerstone of Meezan's Bank strength. Comprehensive Business Solutions The wheel was a solution to many of mankind's needs. deeds. transactions. these five achievements of man hold special significance. Service Quality The concept of time is specially revered in the banking industry and timeliness of our operations determines our service quality levels. because we see links between them and the five foundations that form the core of Meezan Bank. Shariah Strength The light bulb. We often hear of the increasing value of time. it is worth noting that time. it is true in the literal sense as well. The same way. authorizations and business dealings are incomplete.As we look at our watches everyday. It was comprehensive in the same way that our business solutions are comprehensive in providing for our customer's needs. and the light that it spreads. minutes and hours in which we measure our lives are absolutely indispensable. For us. It is also the concept of time which is so important. Largest Branch Network The telephone. is just as indispensable for our branch network. but there can be no dispute that the seconds. that it is hard to imagine life without it. Corporate Information . like the mathematical system. essential to all communication. has not existed forever. The origin of the concept of time is a subject of dispute. and the light of knowledge and guidance it spreads. Without it. It is said that time is money – for banks. and its immeasurability. is of significance when examined in view of the Islamic Shariah. Financial Backing Paper is one of the most important elements in the commercial world today. which aims to provide seamless connectivity across Pakistan for our customers and their banking operations.

Ishaq Dr.Central Abdul Ghaffar Memon Regional Manager . Sheikh Ebrahim Bin Khalifa Al-Khalifa Chairman Naser Abdul Mohsen Al-Marri Vice Chairman Irfan Siddiqui President & CEO Istaqbal Mehdi Mohamed Abdul-Rehman Hussain Ariful Islam Rana Ahmed Humayun Mohammed Azzaroog Rajab Ahmed Abdul Rahim Mohamed Shariah Supervisory Board Justice (Retd.Board of Directors H.E.South Saleem Khan Regional Manager – North . Abdul Sattar Abu Ghuddah Sheikh Essam M.) Muhammad Taqi Usmani Chairman Dr. Muhammad Imran Usmani Executive Committee Naser Abdul Mohsen Al-Marri Mohamed Abdul-Rehman Hussain Irfan Siddiqui Audit Committee Istaqbal Mehdi Rana Ahmed Humayun Ahmed Abdul Rahim Mohamed Risk Management Committee Mohamed Abdul-Rehman Hussain Rana Ahmed Humayun Ariful Islam Human Resources Committee Ahmed Abdul Rahim Mohamed Naser Abdul Mohsen Al-Marri Irfan Siddiqui Company Secretary Shabbir Hamza Khandwala Management Irfan Siddiqui President & CEO Ariful Islam Chief Operating Officer Najmul Hassan GM-Corporate & Business Development Mohammad Shoaib Qureshi GM-Commercial Banking Shabbir Hamza Khandwala Chief Financial Officer Rizwan Ata Regional Manager .

Karachi-74000. Fax: (9221)5610375 24/ 7 Call Centre 111-331-331.meezanbank. This single unifying factor unleashes the tremendous power of a dedicated and motivated team committed to fulfilling the Vision and Mission of the Bank. Isa. Ziauddin Ahmed Road Karachi-75530.Arshad Majeed Operations Sohail Khan Human Resources Faiz-ur-Rehman Information Technology Munawar Rizvi Branch Expansion & Administration Zafar Ali Khan Consumer Finance Muhammad Abdullah Ahmed Treasury & Financial Institutions Saleem Wafai Compliance Zia-ul-Hasan Internal Audit Mohammad Raza Liability Products & Service Quality Ahmed Ali Siddiqui Product Development & Shariah Compliance Syed Amir Ali Investment Banking Omer Salimullah Alternate Distribution Channels Javed Ahmed Shaikh Risk Management Shariah Advisor Dr.com Shares Registrar THK Associates (Pvt. Registered Office 3rd Floor. State Life Building –3. Afridi & Angell Auditors KPMG Taseer Hadi & Co. Ph: (9221)111-000-322. Fax: (9221)5655595 Meezan Team: Meezan Bank is managed by a team of professional bankers committed to the cause of Islamic Banking.Khan Road. Dr. PNSC Building.com Website www. E-mail: info@meezanbank. Muhammad Imran Usmani Legal Advisor Rizvi.) Ltd. M.T. Pakistan. The business segments of the Bank are: Corporate and Investment Banking Commercial and SME Consumer Finance Treasury & Financial Institutions . Pakistan Ph : (9221)5610582.

The main objective of Meezan Bank’s Advisory function is to help financial institutions develop Islamic Banking Products by sharing the experience. conducting regular Shariah Audit & reviews of branches & departments.Product Development & Shariah Compliance (PDSC) Department Product Development & Shariah Compliance (PDSC) is one of the important departments of the bank that reflects strong commitment of the bank towards Islamic banking and research. The bank has also provided Product Development Advisory services to different financial institutions interested in offering Islamic Banking products & services around the world via its research wing. Pakistan & other Islamic banks & financial institutions. a comprehensive Islamic Banker Certification (IBC) Program was successfully introduced in Pakistan. research & success stories. Ahmed Ali Siddiqui. corporate & retail banking level. UK to collaborate in the areas of training. PDSC has played a vital role in imparting Islamic banking training to bank employees. Using any computer with Internet connectivity the following facilities are available by Meezan Bank. . The bank is also conducting research on several new Islamic products in the areas of consumer. Al Meezan Investment Management (AMIM). The function is vital in ensuring strict Shariah Compliance in all area of bank’s operations. customers. Ulemas & scholars throughout Pakistan. PDSC role is manifold and comprises facilitating new Product Development activities. Muhammad Imran Usmani and is managed by Mr. refining existing products & procedures. providing Islamic Banking training to new recruits and existing staff members. The bank has also executed MoUs with INCEIF. anywhere in the world. coordinating with Bank’s Shariah Board and providing Islamic Banking Advisory Services to both local and foreign financial institutions. In the area of Product Development. research and product development. The department regularly carries out training sessions ranging from basic to in-depth specialized workshops. developed a new investment avenue of local Commodity Murabaha to manage excess liquidity of the bank is a Shariah compliant manner. the bank has initiated several new structured Islamic Sukuk transaction. Malaysia & Utruj Foundation. PDSC works directly under the supervision of bank’s Shariah Advisor – Dr. The bank has successfully entered into advisory arrangements with Capitas Group of USA. Internet banking Meezan Bank’s Internet Banking system puts access to your accounts at your fingertips. During the year 2006.

With this extensive network. Meezan Bank team continues to build on its Vision of establishing "Islamic Banking the Banking of First Choice". All branches provide real time online banking facilities to customers.• • • • • • • • • Balance inquiry Statement viewing & download (in PDF or MS Excel format) Cheque status Cheque blocking Payorder request Funds transfers between own accounts at Meezan Bank Cheque book request Change of address request Complaint logging Branches Meezan's Branch Network Alhamdolillah. As the first and largest dedicated Islamic Bank in Pakistan. One of the key objectives of the Bank is to have its footprint strategically placed throughout the country enabling the public to avail the benefits of Shariah Compliant Banking in their neighborhood. Meezan Bank has established 100 branches in 31 cities across Pakistan. This is a milestone that is not only the success story of Meezan Bank but also the continuing success story of Islamic Banking in Pakistan. The Bank is currently segmented into three Regions of Pakistan. our existing and potential customers are now closer than ever in attaining Islamic Banking at their doorstep. The cities in which the Bank presently operates are as follows: Southern Region Hyderabad Karachi Nawabshah Quetta Sukkur Tando-Allah-Yar Central Region Bahawalpur Dera Ghazi Khan Faisalabad Gujranwala Jhang Kasur Lahore Mandi Bahauddin Multan Northern Region Abbottabad Dera Ismail Khan Gujar Khan Haripur Islamabad Kohat Mansehra Mardan Peshawar Rawalpindi Swat Okara Rahim Yar Khan Sadiqabad Sahiwal Sargodha Sheikhupura Sialkot .

Home Financing .Meezan Bank . Shariah Supervisory Board The Bank has an internationally renowned.s mission is to provide its customers dedicated and pure islamic fascilities with the greatest of convience and personalized services. and Dr. Imran Usmani.In 2008 Meezan Bank has planned to open an additional 40 branches in Pakistan and uptill now it has 18 branches. E. Ishaq (Bahrain). Jeddah and in his long and illustrious career has also served as a Judge in the Shariat Appellate Bench. The board also includes Sheikh Essam M.) Maulana Muhammad Taqi Usmani. Abdul Sattar Abu Ghuddah (Saudi Arabia). Umer Saleem Mughal at the bank's Shadman Branch in Lahore can be contacted. who strictly monitors the regular transactions of the Bank. a renowned figure in the field of Shariah. The Bank also has a resident Shariah advisor. particularly Islamic Finance. very high caliber and pro-active Shariah Supervisory Board presided over by Justice (Retd.it remains the banks endeavor to establish solid foundation of islamic banking in Pakistan. For assistance Mr. Sheikh Ibrahim Bin Khalifa Al-Khalifa (Chairman) . Board of Directors • • • • • • • • • • H.State of Bahrain) Naser Abdul Mohsen Al-Marri (Vice Chairman) Irfan Siddiqui (President & Chief Executive Officer) Istaqbal Mehdi Mohammed Abdul-Rehman Hussain Ariful Islam (Chief Operating Officer) Rana Ahmed Humayun Mohammed Abdul Rahman Mohammad Bucheerei Ahmad Mohammad Thane Mohammed Azzaroog Rajab Functions Service • • • • • • • Personal Banking and Finance Corporate Finance Commercial Finance Structured finance Treasury Car Ijarah .Car Financing Easy Home . Supreme Court of Pakistan. Ministry of Finance & National Economy. He holds the position of Deputy Chairman at the Islamic Fiqh Academy. Dr.Undersecretary.

• Asset Management GENERAL BANKING DEPARTMENT  Account opening department  Remittances department  Cash department  Clearing department ACCOUNTS DEPARTMENT IT. . Guide the customer about the requirements of the account opening and form filling.DEPARTMENT ACCOUNT OPENING DEPARTMENT Account Opening Incharge Officer Office r Functions of Account Opening Department • • Providing account opening form according to the customer's requirements.

Maintaining account opening register. Issuance of cheque books. Preparing checklist. Issuance of accounts maintenance certificate. Stamping on the form.• • • • • • • • • Check the forms whether they are correctly completed or not. Pasting of forms in register after release from general banking in charge. Closure of account Verification of signature in case of cheque presented before releasing of account opening from SS card is not yet scanned TYPES OF ACCOUNTS 1) ACCOUNTS OF GENERAL CUSTOMERS • • • Minor account Illiterate person account Joint account 2) ACCOUNT OF SPECIAL PERSONS • • • • • • • Proprietorship account Partnership account Limited company’s account Accounts of club societies and associations Agent’s accounts Trust account Liquidator’s account executer’s and administrator’s account .

ACBL provides these services to both customers & non-customers Remittance can be made through: 1) Instrument transfer 2) Electronic transfer 3) Mail transfer Instruments of the Remittances Departments . Pay Order Demand Draft Pay slip Telegraphic Transfer Payment of Remittances Cancellation of pay order & demand draft The remittance department deals with the transfer of money from one place to This department deals with the local currency transfer only.REMITTANCE DEPARTMENT Functions of remittances department The functions of remittance departments are to handle with the following instruments: • • • • • • another.

 Make entry in PO issue register.e.  Do necessary vouchering.  Issue pay order after recovering cheques.demand draft can also be issued by one .000 Above 100.  Issue duplicate pay order.  Recover charges.  All pay order shall be crossed" payees account only".PAY ORDER Pay order issued from one branch only be payable from the same branch. Charges on issue of Pay Order Amount (Rs) Charges (Rs) Less then 100.  Get application for issuing of duplicate PO.000 50 Nil Duplicate Pay Order:  Check the record to insure that payment has not been effected. payable at some other place(branch) of the same bank. DEMAND DRAFT It is an instrument on demand for which value has been received. issued by the branch of the bank drawn i. It is normally referred as banker's cheque  Get the application form. In case of agency arrangement. It is normally issued for payment in the same city.

1000. • • No excise duty No commission CASH DEPARTMENT All physical movement of cash in the bank is made through the cash department.00 Charges (Rs) 25 50 or .10.g. Charges on issue of Demand Draft Amount (Rs) 1 .000 100.000 .000 10. Normally cash department performs following functions  Receipt  Payments .1% 200 or .000 Over 1000.branch of the bank payable to other branch of the other bank e.000 – 100.05% PAY SLIP The bank for settlement of it own payment issue pay slip. DD issued by ACBL payable by MCB.07% 1000 or .

up deposit slip Deposited on Receipt Customer Cashier counts the amount and section fulfills other requirements In this section honoring the cheque through following process makes payment. Cashier counts the amounts and fulfills Cash payment other requirement Process of payment Cheque is presented at token counter Cheque is recorded & token # is allotted . Act according to any standing instructions  Transfer of funds from one account to another  Handling of ATM  Verification of signatures  Posting  Handling of prize bond Cash receipt section In this section the cashier in following manner receives cash: Process of deposits Fill.

Cashier counts the amount & payment is made Cancellation officer cancels cheque Two signatures on back of the cheque by customer Posting is made Products and Services • • • • • Personal Banking and Finance Rupee Current Account Rupee Saving Account Dollar Savings Account .

Riba Free.Rupee Current Account Minimum amount required to open account= Rs. Minimum amount required to open account Rs. This is all that you need to open a Current Account with us and enjoy our personalized banking services. and comes with a variety of free benefits including personalized check books. bring in your original Identity Card. • Corporate Finance Karobari Munafa Account Karobari Munafa Account .10. and get introduced by an existing banker. priority banking and so on. 10.000. no restrictions on transactions. 10. Holders may open accounts without any minimum balance requirements. The profit on this account is calculated and paid on a monthly basis. 000. Holders may open accounts without any minimum balance requirements Just fill in the Account Opening Form. Rupee Saving Account A unique bank account that offers the opportunity to earn Halal profits.000. Riba Free. It can be opened with a minimum amount of only Rs. while enjoying a range of added benefits.

a foreign-currency based investment opportunity that is set up on the principles of Shariah and as a result is free from the element of interest. with tenures of 3 months. the customer enters into a relationship based on Mudarabah with Meezan Bank. It allows customers to earn higher returns on surplus cash balances. It has no preset transaction limits and comes with a variety of free packaged benefits. At maturity profit payment for all tenures. 3 years and 5 years. Under this relationship. Free facilities: chequebooks and payorders. 2.000. On agreeing to become an account holder. the customer is an Investor (Rab ul Mal). Quarterly profit on 1. No restriction on deposits and withdrawals. 6 months. 3 and 5 years. Riba-Free Dollar Saving Account works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah.Karobari Munafa is a savings account specifically tailored for large Corporate or GOP controlled entities. Riba Free Certificate of Islamic Investment The Riba Free is a Shariah compatible Islamic Investment Certificate. 3 and 5 years. 1 Million. 200. Profit on investment may be earned on the following basis: Monthly profit on 1. _ Dollar Savings Account Meezan Bank is pleased to offer Riba-Free Dollar Saving Account. 2 years. .000. 50. 1 year. 2. The minimum investment is Rs. Minimum Investment Rs. Profit will be calculated on a Daily Product Basis Minimum balance requirement for account opening is Rs. and the bank is the Manager (Mudarib) of the funds deposited by the customers.

The Riba-Free Meezan Aamdan Certificate (MAC) works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah. MAC is a monthly income (mahana aamdani) certificate with a variety of free packaged benefits. the customer is an Investor (Rab ul Maal). purchase of Government paper and foreign exchange trading. our Treasury in one of the most active in the market. including a capital adequacy ratio that has placed the Bank at the top of the industry. On agreeing to become a MAC holder. Meezan Providence A long-term investment product specially designed to cater to the needs of corporate and business concerns for purposes of investing their Provident. and the Bank is the Manager (Mudarib) of the funds deposited by the customers.Meezan Amdan Certificate The Riba-Free Meezan Aamdan Certificate (MAC) is a long-term deposit certificate with an exceptionally high monthly profit designed especially for those individuals and corporations who are in need of regular stream of monthly income. TREASURY Responsible for managing Bank’s liquidity and foreign exchange transactions. As any prudent investor. the Division adds substantially to the Bank's sustained earnings Easy Home With Easy Home you participate with Meezan Bank in a joint ownership of your property. which has a strong and credible balance sheet with excellent operating profitability. especially as these funds are a trust from your employees and one that bears an important responsibility. In fact. your main concerns would be total security along with the best returns possible. the total monthly payment is reduced regularly as your share in the property . where the Bank will provide a certain amount of financing (usually up to 85%). Meezan Providence rests on the well known and solid financial strength of Meezan Bank. and a short-term entity rating of A1. the customer enters into a relationship based on Mudarabah with Meezan Bank. Under this relationship. a long-term entity rating of A+. Through reported transactions. and another for your equity share. You agree to a monthly payment to the bank of which a component is for the use of the home. Pension and Gratuity Funds.

Upon completion of the lease period the customer gets ownership of the car against his initial security deposit. In conventional mortgages the interest charged is a mark-up on the money lent. Meezan Bank’ Car Ijarah is a car rental agreement. is unique to car leasing facilities provided by other banks. Taking ownership through a partnership and then transferring complete ownership to the consumer instead of simply lending money is the major factor that makes our product Shariah compliant. Upon completion of the lease period the customer gets ownership of the car against his initial security deposit. Car Ijarah is Pakistan’s first Interest Free car financing based on the Islamic financing mode of Ijarah (Islamic leasing). The nature of the contract is a co-ownership and not a loan because the transaction is not based on the lending and borrowing of money but on the joint ownership of an asset. you become the sole owner with a free and clear title to the property.BASIC PRODUCT PROCESS Car Ijarah is structured under the concept of Ijarah. Meezan Bank shares in the cost of the asset being purchased. under which the Bank purchases the car and rents it out to the customer for a period of 3 to 5 years. which had been agreed upon. This product is ideal for individuals looking for car financing while avoiding an interest-based transaction. When you have made the full investment. Car Ijarah Meezan Bank’s Car Ijarah unit provides a car financing. based on the principles of Ijarah and is free of the element of interest. agreed at the time of the contract. ownership and trade. which works on the following lines: a) The Customer will approach Meezan Bank with a request for Car financing. What specifically makes Easy Home Shariah compliant? As a Diminishing Musharakah it conforms to Shariah laws specifically related to financing. for example in the case of buying a home. based on the principles of Ijarah and is free of the element of interest.grows. CAR IJARAH . Meezan Bank’s ‘Car Ijarah’ provides financing. Car Ijarah is approved by Meezan Banks Shariah Board Car Ijarah. Meezan Bank’s Car Ijarah is a car rental agreement. designed under the supervision of Meezan Banks Shariah Supervisory Board. agreed at the time of the contract. Your payments to Meezan Bank are hence completely. The profit charged by Meezan Bank is the utilization payment for your use of our share throughout the life of the contract. under which the Bank purchases the car and rents it out to the customer for a period of 3 to 5 years. INTRODUCTION As a step towards Meezan Bank’s mission to provide a one-stop shop for innovative value added Shariah compliant products. .

Meezan Bank will enter into an Ijarah (leasing) Agreement with the Customer and monthly Ijarah rentals are finalized. i) All risk & rewards of ownership of the asset will be borne by the Bank. it means 'to employ the services of a person on wages (Ujrat) given to him as a consideration for his hired services. The term 'Ijarah' is used for two different situations. if it is done as per the Shariah guidelines. certain financial institutions have adopted leasing. as a mode of . Secondly. In Islamic banking this is an arrangement under in which the Lessor (bank) leases the asset (CAR/Motorcycle) to a client at an agreed rental amount as agreed by both parties. it means 'to give something on rent'. e) Upon delivery of the Car. the bank has the right to recover these costs in future monthly rentals. f) At this stage. CAR IJARAH FAQ’s. What is the difference between Ijarah & Sale? The basic difference between Ijarah and sale is that in case of a Sale transaction the ownership of the asset is transferred to the purchaser. j) All expenses of normal wear and tear will be borne by the Customer. k) Upon completion of the Ijarah tenor. the right to use it.Product Concept What is Ijarah? "Ijarah" is a term of Islamic fiqh. the customer can purchase the Car from Meezan Bank via separate Sale Deed or can return the car to the bank and take back his Security Deposit. However. h) The Customer will also give a unilateral Undertaking to Purchase to purchase the asset in case the customer wants to purchase the car earlier (early termination) or in case of default. As per the rules of Ijarah. In the first place. c) The Customer will also sign a Letter of Undertaking to Lease to ensure that the Customer will lease the Car upon its delivery. the Bank will take Security Deposit from the Customer.b) After required credit checks & approval of the case. the cost of registration and insurance will be borne by the bank. Lexically. How is ‘Ijarah’ different from conventional leasing scheme available in the market? In principle Ijarah or leasing is a permissible transaction. the term 'Ijarah' is analogous to the English term 'leasing'. the asset remains in the ownership of the transferor (Lessor). the concept of Ijarah is only applicable for non-consumable assets like car. rice etc. g) Monthly rentals will begin one month after the delivery of the Car. is transferred to the lessee.' In this case. Meezan Bank directly purchases the car from the authorized dealer and pays the purchase price directly to the supplier. while in the case of Ijarah.e. but only its usufruct i. These monthly rentals are charged for the use of Bank’s vehicle. Ijarah is basically a transfer of usage rights of a fixed asset to another person for an agreed period of time at an agreed consideration. However. 'Ijarah' in this sense means 'to transfer the usufruct of a particular property or fixed asset to another person in exchange for a rent claimed from him. Meezan Bank as an owner of the asset get the asset insured and registered in its name. d) Based on customer’s requirement." The second type of Ijarah relates to the usufructs of assets and properties. At this stage tentative Ijarah rentals & tentative delivery period is communicated to the Customer. plant or machinery and is not related to consumable items like cotton.

• In Ijarah. Available in tenures of 3. 4 and 5 years. Also available for Used Cars No application Fee Availability of Takaful First rent after delivery of vehicle How is ‘Car Ijarah’ Interest Free? ‘Car Ijarah’ works on the principles of Ijarah and complies the requirement of a valid Ijarah transaction. This condition is normally not complied in conventional lease transactions and all risks are parked with the lessee or customer. the question of whether or not the transaction of leasing is Shariah compliant can be judged on the basis of the terms and conditions of the Lease Contract. Product Fatwa can be obtained from MBL website at www. For Example: If A gives a Car on rent to B for a rent of 10.000 for a period of 3 years – it is permissible.meezanbank. However if A (the owner/Lessor) puts a condition that even if the car is stolen B has to pay the rent – it will be an invalid lease transaction and not Shariah complaint. for long term lending and it is generally known as the 'financial lease' and has certain tax benefits.e. the Lessor cannot terminate the lease unilaterally. Key USPs • • • • • • • Pakistan’s first truly Shariah-compliant Car Financing Scheme. • Risk and rewards of ownership lies with the owner i. The product features and agreements are carefully designed as per the rules of Ijarah and have been reviewed and approved by Meezan Bank’s Shariah Supervisory Board. while in conventional lease transaction the Lessor has the right to terminate the lease contract at its sole discretion. But many essential features of a valid Ijarah/lease transaction have been removed making the transaction invalid. • In Ijarah. However. Therefore. Following are the key features of a valid Ijarah/lease contract. the asset remains in the ownership and risk of the Bank and the Customer only pays rent for the use of the asset. Available for locally assembled as well as imported cars.cim or from MBL branches. the Lessor (bank) cannot unilaterally increase rental. Upon completion of the lease period the customer has two options either to return the car and take away the Security Deposit or take ownership of the car against his security deposit via separate sale transaction. Customer is required to deposit an initial amount (Security Deposit) with the Bank. generally under conventional lease arrangements the Lessor can increase the rental at its sole discretion. any loss to the asset beyond the control of the lessee should be borne by the Lessor.financing. In Car Ijarah.Product Features What is Car Ijarah? Meezan Bank’s Car Ijarah is simply a rental agreement under which the car is given to the customer on rent for a period agreed at the time of the contract. CAR IJARAH FAQ’s. The transaction works on following lines: . just like house rent.

The customer pays periodic rental for the use of vehicle. This is not permissible as per the rules of Ijarah. Rentals Generally in conventional leasing the financial institute can at its sole discretion can increase transaction Rates & rental. In conventional leasing all expenses relating to the Expenses Bank/Lessee All expenses relating to the ownership of . the customer can purchases the Car from the bank via separate Sale agreement.e. any loss to the asset beyond the control of the lessee should be borne by the Lessor. The rental amount decided at the time of the agreement cannot fluctuate unilaterally at the sole discretion of the bank Conventional Leasing Under Conventional leasing. Conventional Car Financing In Conventional Car Financing scheme. Hence it permissible. although ownership remains with the lessor but all risk of ownership are parked with the customer (lessee) as well. At the end of the Ijarah tenure. A clause for above is explicitly mentioned in the conventional leasing contracts. the asset remains in the ownership of the Bank through out transaction tenor. these schemes are not permissible. Meezan Bank rents out the vehicle to the customer for a specified period and against a known rent and execute the Ijarah agreement. Meezan Bank purchases Car/Motorcycle from vendor and make the payment. How Car Ijarah differs from other Car Financing and Leasing Schemes? MBL’s Car Ijarah Meezan Bank’s Car Ijarah works on the principle of Ijarah and complies the requirement of a valid Ijarah transaction as per Shariah. banks give a loan to the customer for purchase of car and charge interest on it. Risks and rewards of ownership lie with the owner i.The customer approaches the Bank with the request for Ijarah for Car and enters into a promise to lease. although the purpose of purchasing a car is permissible but using interest/riba based loan for such purpose is not allowed Hence. Features Ownership & Risk MBL’s Car Ijarah In Car Ijarah. Therefore.

This amount cannot be taken in Bank’s income and its nature is of charity not of Riba. This extra amount is the considered as riba and is haram.Registration charges .1st installment of 2nd year insurance. In case of Car/Motorcycle theft or severe damage (that it becomes unusable). lessee may be asked to promise that. 1st monthly rental installment. Upon completion of the Ijarah tenor. This is against the rules of Ijarah. In Car Ijarah. customer is only required to pay a Security Deposit in a range of 15 to 50% along with actual documentation & processing cost. expenses for damage to the asset by lessee’s negligence are also borne by the customer In Car Ijarah. are borne by the lessee.Down payment ranging from 15%-20% min. Late Payment Charges In most contemporary financial leases.e.e. if he fails to pay rent on its due date. an extra monetary amount is charged if rent payment is not paid on time and is taken in the income of the institute. accidental damage (without negligence of lessee) etc. There are no other upfront payments. the customer can purchase the Car from Meezan Bank via separate Sale Deed or can return the corpus of the asset i. . Charity is charged only to discipline the Customers. Under conventional leasing the vehicle is automatically transferred in the name of the customer as part of the contract. This is against the Rentals Payments / Monthly Upfront payments At the end . Monthly payments start from the booking of an asset irrespective asset is delivered to the customer or not. Lessor All actual operating/overhead expenses related to running the asset will be borne by the lessee. insurance. will be borne by the lessor/bank. Asset Theft/ Damage Monthly payments are not stopped in any case of theft or sever damage to the asset. accidental repairs. Rentals are stopped because rentals are obtained for the use of assets. .1st year’s insurance premium. This condition is also not permissible in Ijarah. Upfront payments generally consist of: . actual operating / overhead etc. insurance.the asset i. Rentals start after one month of the delivery of an asset. Moreover. he will pay certain amount to a charity account.

the Bank will terminate the Ijarah contract and will sell the asset to the customer via a separate Sale Deed. you will have to pay Rs.5 million How long can I avail Car Ijarah? You can avail Car Ijarah in flexible. This amount will be used by the Bank for Charitable purposes as per the directives of the Shariah Advisor of the Bank. Under the Ijarah agreement. I opt not to lease it? Will the Bank charge any penalty for this? In case the Vehicle is on booking and you opt to cancel the facility after disbursement. easy rentals over a period of 3.e. Either you can return the car and take away your Security Deposit or you can keep the car against your Security Deposit with the Bank. What if I want to discontinue the facility? What will be the treatment of Security Deposit? Ijarah agreement is a fixed tenure agreement and cannot be terminated unilaterally. What if after booking a vehicle. . Will the Security Deposit be returned at the maturity of the term? You will have two options at the maturity of the transaction. What is the purpose of Security Deposit? The security deposit is an amount taken by the Bank (Lessor) as a pledge to recover any unpaid rentals or any loss to the asset due to the negligence of the Customer. Customers can buy the car prior to the maturity of an Ijarah agreement. used and imported vehicles. customer can request/offer to buy the Car from the Bank at the applicable purchase price. New & Imported vehicles Up to Rs. 4 or 5 years. The actual requirement of Security deposit varies for different type of vehicle (i. Can I buy the Car prior to the termination of rental agreement? Yes. like a normal rent agreement Meezan Bank takes a Security Deposit ranging from a minimum of 15 % to a max of 50%.car to the bank and take back his Security Deposit. 1.000 to 1. the bank reserves the right to sell the asset to the customer prior to the maturity of the asset.as Cancellation Charge upon demand and discretion of the Bank. The break-up is as follows*. 10. On accepting the offer. How much financing can I get? “Car Ijarah” gives you the flexibility of acquiring new locally assembled. this will be treated as an “Event of Default and Termination” under the Car Ijarah Agreement and the “Undertaking to Purchase Vehicle” will come into force. How much time does Meezan Bank take in processing a Car Ijarah case? After receiving the completed application form along with the required documents your application will be processed within 3-4 business days. Anytime during the tenure of Ijarah. To facilitate this process “Early Purchase Price Schedule” is attached with the Undertaking to Purchase Vehicles given by the customer.5 million Used vehicle between 250. Is there a requirement of Security Deposit? Yes. New.). In case you want to discontinue the facility. old or imported etc. Please contact our Call Center or Car Ijarah department for applicable security deposit requirements. rules of Ijarah.000/.

Customer is responsible to ensure timely payment of Ijarah rentals. Can I take the Bank’s car out of city? You will have to take prior approval from the Bank before taking the car out station. • 3 years working/professional /business experience • Working with your present employer for at least 6 months (for salaried individuals) • Address verification • Complete documentation Which documents are required in Car Ijarah? General documents requirement is a follows: • Copy of CNIC • Two recent passport sized photographs • Recent Utility Bill (Electric/Gas/Water) received at the residential address • Last Six Month Bank Statement • Last Six Month Bank Statement of Business (for Businessmen) • Certified/Original copy of Recent Pay slip (for Salaried Individuals) • Copy of Rent Agreement (if applicable) Can I club my salary with my brother’ salary to be eligible for Car Ijarah? At present the clubbing facility is not available in Car Ijarah. Can you tell me what rate have you charged on this car? Our Car Ijarah scheme is based on the concept of monthly rentals. When will my first installment come due? Your Ijarah rentals will start one month after the delivery of the Car. In case there is no difference in the Sale price & promised price. If the customer also does not fulfill his promise to purchase the car. Meezan Bank will return the Security Deposit to the customer. . Can I rent out the car leased by the Bank? The Ijarah facility is for personal use of cars only and the leased car cannot be used commercially. all monthly payments combined not to exceed 50% of net income.Customer will be required to purchase the vehicle at the applicable price mentioned in the Early Purchase Price Schedule.). (Because this loss is due to non-fulfillment of the promise by the customer. the car will be sold out in the market by the bank. What are the processing charges in Car Ijarah? Please contact our Call Center or Car Ijarah department or refer to bank’s Schedule of Charges for latest processing charges. What are the eligibility criteria? Basic Eligibility criteria are as follows: • Salaried individual/ self-employed professional/businessman • Net takes home income exceeding three times your monthly installment • In case of other loans and cards. If the sale in the market resulted in a lower price then the promised price of customer the difference will be recovered from the Customer’s Security Deposit. Can I delay my monthly installment? We do not encourage any late payments. These rentals are taken for the use of asset and rental amounts are agreed with the customer at the time of Ijarah agreement.

This is the reason that our Ijarah agreement does not mention any profit rate).Tafakul/Insurance Related What is the Insurance/Takaful arrangement in Car Ijarah? Meezan Bank being the owner of the Car is responsible for Insurance of the car and for payment of insurance premium. Therefore it is not possible to quote an exact rate tothe customer. However. But to avoid late payments and instill the necessary culture of financial discipline. if he fails to pay rent on its due date. we cannot charge any penalty on late payment as charging an additional amount on debt for non-payment is RIBA. However. However. In case of Car Ijarah this charity comprises of 24% per annum on the outstanding installment payment. we only have an approximate rate. he will pay certain amount to a charity account. In Car Ijarah. The scheme does not work on rate basis it works on rental basis. Is this profit rate variable or fixed? In Car Ijarah the rentals are fixed over the Ijarah period. Can I pay the late payment charges on my own and submit the receipt to the Bank? At present this option is not available. Can I make Balloon payments? Balloons payments are not allowed. Like other costs these will be recovered in rentals. Meezan Bank insures Car/Motorcycle from . the Bank cannot book this amount in its pool of Income rather it is then transferred to a charity account. Do I have to pay the Registration charges upfront? Registration is an ownership related expense and hence MBL is responsible for it. the officials should quote monthly rentals instead of Profit rate or IRR. In this regard. insurance provision. the Bank has the discretion to waive this charity in genuine cases. All late payment charges are credited to a Charity account maintained at the Head Office and is directly supervised by the Shariah Advisor of the Bank so you can be assured that your charity is used for the right cause. Customer is asked to promise that. What if I fail to pay monthly installment on due date? As far as Islamic point of view is concerned.(Important Note: In all communications from the Bank related to Car Ijarah. The rate available to Car Ijarah is our target profit rate to be used in our financial model and calculations. This provision is included in our Car Ijarah scheme after require approval from our Shariah Board. These rentals have built in costs like cost of car. However. The nature of this amount is Charity (sadqa) and it is not riba. The Charity account is supervised by the Shariah Advisor of the Bank and is used only for charitable purposes. CAR IJARAH FAQ’s. as per the rule of Ijarah Bank has the right to recover this expense in the monthly rentals over the life of the transaction or even in the first rental due after delivery of the car provided these rentals are clearly agreed in the Ijarah agreement. if the Customer persists then the team can inform that approximate Bank IRR is ___%. registration charges etc.

which means to guarantee. What is Takaful or Islamic Insurance? The word Takaful is derived from the Arabic verb Kafala. which provides for mutual financial security and assistance to safeguard participants against a defined risk. • If the customer wishes to discontinue the facility. The Customer is required to immediately (or as soon as possible) inform the Bank about the incident. solidarity and mutual cooperation or assistance. It is a pact among a group of members who agree to jointly guarantee themselves against loss or damage to any one of them as defined in the pact. In whose name will the car be insured and registered? Since the car belongs to MBL it will be registered and Insured in favor of Meezan Bank at MBL’s cost and an authority letter will be given to the Customer for the usage of the Car. (after any valid applicable deduction from the security deposit like outstanding rentals. brotherhood. unlike the conventional leasing practice were the rental payments continue even after theft or total loss. to take care of one’s needs. What are the possible options for the customer in case of theft or total loss? In case of theft or total loss. however if the customer insist to know the takaful rate the correct response is as follows: The current Takaful Provision for our Car Ijarah scheme is 4. then the Bank cannot make any deductions from the Security Deposit.Pak Kuwait Takaful Co. Takaful is a system of Islamic insurance based on the principle of Ta’awun (mutual assistance) and Tabarru (voluntary contribution). we do not quote any insurance or takaful rate to our customer as its ownership expense. (PKTC) using Islamic mode of Insurance (takaful) and pays takaful premium as part of its ownership expense. (Even if the takaful or insurance claim in lower) However. . Important Note: As per the guideline of Car Ijarah. Takaful is operated on the basis of shared responsibility. What Takaful rate is charged by MBL? Takaful is the responsibility of Meezan Bank and customer is only required to pay the agreed rentals. charity etc) • Secondly. the Customer pays the rent for the use of the asset and in cases of theft or total loss the rentals will be stopped immediately.5% (rem: It is not the rate but provision or cushion – actual rate may differ every year and could increase or decrease then the provision but it is not customer’s concern). Will I be required to pay my rentals in case of theft/ total loss of Car? In Ijarah transactions. The Bank (Lessor) in such cases can only take the proportionate rent for the actual number of days for which the asset was used. where the risk is shared collectively by the group voluntarily. However if the theft/total loss incident was beyond the control of the Customer and without his negligence. the Bank can also deduct from the Security Deposit any outstanding Ijarah rental(s) & any charity amount due from the Customer. to help. the Ijarah agreement is terminated and generally following two options are available. the Bank has the right to make deductions from the Security Deposit. Will the Bank make any deductions from my Security Deposit in case of theft/total loss scenario? If it is proved that the incident occurred due to the negligence of the Customer. the Security Deposit will be refunded to the customer. customer can enter into a new Ijarah agreement with the bank for the remaining /same /fresh tenure for another car.

Is this a Sale & Lease back arrangement? No. • Cost of vehicle between Rs. acting as MBL’s agent. the vehicle should not be more than 8 years old. What are the Used Car selection criteria? Selecting a used car is very simple. Toyota. Honda & the new model of centro only. Based on the result of the valuation following options are possible: 1. while minimum security deposit for a vehicle over 2 years of age is 30%. Meezan Bank is not under any obligation to share it with the Customer. What is the amount criterion for used cars? The approved valuator of the Bank will also valuate all used cars to verify its value. the Customer will provide the bank copies of vehicle documents like Manufacturer’s Sales Invoice.min and Rs.e. in Car Ijarah there is no Sale & lease back arrangement.e.What will be the treatment of Insurance claim received from the Insurance Company? Insurance is an ownership related expense and is a concern of the Bank. • This facility is for locally manufactured cars of Suzuki. What set of documents are to be submitted to the Bank? After selecting the vehicle on Bank’s behalf. the tenure may be set for a maximum 4-year term. This means that if a car is 5 years old. It is a specifically designed feature and a very economical option for our customer. Actual Sale price as quoted by the Seller). One million max Moreover. the ‘on’ amount? As per the rule of SBP. Can I replace my conventional auto loan with Car Ijarah? Currently this option is not available in Car Ijarah. Banks cannot finance the ‘premium’ amount. transaction will be executed at the reported transaction value (i.e. It is a direct lease transaction in which the bank has appointed the customer as its Agent under Agency Agreement for purchase of car. the Car Ijarah tenure is not more than 3 years and if its 4 years old. . Likewise in case of excess Takaful claim amount. is responsible to purchase the car at the manufacturer’s Invoice Price and any amount paid over and above the Invoice price will not be recognized by MBL. If the transaction value is less than or equal to the assessed value. in this case the seller of the car is not the manufacturer) and instead of paying the manufacturer. Estimated Registration Bill. 250. As such the Bank cannot claim any amount from the Customer if the incident was beyond the control and negligence of the Customer and takaful/insurance claim was lower. Sales Certificate. the used cars will also be valuated by the approved valuator of the Bank. CAR IJARAH FAQ’S – USED & IMPORTED CAR Does Meezan Bank lease Used/Second hand Cars as well? Yes. Does MBL finance the premium i. • Min Security Deposit for a vehicle upto 2 years of age is 20%. CAR IJARAH FAQ’S – NEW READILY AVAILABLE CAR What is a new readily available Car? A car that is ready for delivery at a dealer (i. • The vehicle should not be older than 5 years. we also provide the facility of leasing second hand locally assembled vehicles under Islamic mode.000/. The customer. payment is to be made to the dealer or to the person selling the Car to Meezan Bank. • At the time of maturity of Ijarah agreement. all you need to ensure is: • The second hand car selected should be from its first owner.

then the customer shall increase the security deposit by the differential amount and the transaction will be executed at the reported transaction value (i. 3. (Both for imported & Used car cases) For example: if a customer is purchasing a car at PKR 400. MBL will not lease a Locally assembled / Manufactured vehicle if its transaction value exceeds the manufacturer’s Sales Invoice amount by 5%. Due to the risk.000/MBL Lease Value: PKR 375.000/-) Transaction is allowed Option 3c: Transaction Value: PKR 400.000/No transaction (i.(6. 25.000) Option 3b: Transaction Value: PKR 375.000/- Option 2: Transaction Value: PKR 400.000/. Imp Note: Being the owner of Car.000/PKR 400.000/-) Transaction is allowed Option 3a: Transaction Value: value).0% of the transaction value. Assessed value: PKR 400.000/.000/MBL Lease Value: PKR 400.25% lower than assessed value).000/(i. Assessed value: MBL Lease Value: PKR 400. but if the Bank agrees to take a view then the transaction will be executed on the transaction value and the customer will be asked to increase security deposit by Rs.or above PKR 400.(6.25% greater than assessed value).000/.(6.e.000/. Actual Sale price as quoted by the Seller). Assessed value: PKR 390.e.(2.25% greater than assessed PKR 375. If the reported transaction value is greater than the assessed value and the differential is not more than of 5. Meezan Bank is responsible to pay the actual market price for the used car irrespective of its market value by our valuator.000/- .e.and our valuator valued the car Option 1: Transaction Value Assessed value: MBL Lease Value: Transaction is allowed PKR 400.000/.e.000/(i. MBL will do the transaction at transaction value and will ask the customer to increase security deposit by Rs 10. If the bank agrees to take a view the transaction must be done at transaction value and MBL will ask the customer to increase its security deposit by Rs 25.000/MBL Lease Value: PKR 375.000/. MBL will not do the transaction.2. Assessed value: PKR 375.5% greater than assessed value).

Letter of Undertaking to Lease Purpose: This is an undertaking by the Customer that they will Lease the Car upon delivery. Asset Description c. 3. Receipt of Vehicle (delivery date) e.on its own to the seller and the bank will lease the asset at assessed value) This Transaction is wrong and is in violation of the rule of Ijarah and not permissible for Meezan Bank. Under this agreement the Bank gives Customer the right to use of its Car. Who bears the transfer changes of used cars? The car is transferred in MBL’s name at the seller’s expense. Letter of Undertaking to Purchase Purpose: This is an undertaking by the customer to purchase the Car from the Bank cases of Default & early termination. CAR IJARAH FAQ’S – LEGAL DOCUMENTS What Legal Documents are involved in Car Ijarah transactions? Car Ijarah legal documents comprises of 5 main documents: 1. Rental Schedule (amount & due dates) d. However. Ladies Banking . Early Purchase Price Schedule 5. Component: a. Description of car b. Agency Agreement Purpose: Under this agreement the Bank appoints the Customer as its agent to select the Car. in this case Seller can build the cost of this transfer in the Sale price of the car. The bank ask customer to pay 25. Lease Agreement for Car Ijarah (Ijarah) Purpose: This agreement is signed before delivery of the Car.(i. Tentative rental amount & tentative delivery date 2. Sale Deed Purpose: This document records the formal sale of the Car by the Bank to the Customer.000/. This is used in Imported & Used car cases. Demand Promissory Note 4. This undertaking is taken only if the car is on booking and there is a time lag in the delivery of the car. Components: a. Copy of Application form b. In these case MBL has directed the customer under Agency Agreement to purchase the car from the seller on the terms that Seller will transfer the in favor of MBL name.e. Components: a.

Muslims patronized the conventional banks out of necessity and. borrowers and seekers of bank’s other services such as money transfer. houses. Banks too are enterprises. and will be offered at some of our other branches very soon. They advertise their products and services. Discussion and suggestions People have needs -. peoples expectations are raised and people become customers of the entrepreneur. The question is: has the new entrepreneur successfully met their concerns. Insha'Allah. the list is endless. Otherwise his enterprise fails and people take to other entrepreneurs. Conventional banks have ignored this concern on the part of their Muslim clientele. ladies banking service is a part of Meezan Banks mission to focus on customer convenience and service quality and make Islamic Banking the banking of First Choice. acquiring capital. transferring funds etc.safekeeping. Term Certificates. Consumer Financing and 24/7 banking services. machinery. banks have three types of different customers: depositors. they cater to peoples’ needs connected with money -. Since services do not . Current & Saving Accounts. clothes.the Islamic banker -. This new service provides an exclusive banking area as per the set Shariah principles for our lady customers in a more comfortable environment.food. If the customers’ needs are fulfilled according to their expectations they continue to patronise the entrepreneur and his enterprise flourishes. Entrepreneurs perceive these needs and develop ways and means of catering to them. The fact that they existed for centuries and continue to exist and prosper is proof that their methods are good and they fulfill the customers’ needs and expectations. The reservation is on account of the fact that the banking operations involve dealing in interest which is prohibited in Islam. This service is presently being offered at our DHA Phase II Extention and Barkat-eHyderi branches in Karachi. services. when another entrepreneur -.offered to address their concern many Muslims turned to him. needs and expectations? If not he may have to put up his shutters! Broadly speaking.The Bank is the first in the country to introduce 'Ladies Banking' a dedicated banking section only for ladies. 9am to 5pm Online Banking. Conventional commercial banking system as it operates today is accepted in all countries except the Islamic world where it is received with some reservation. The dedicated Customer Services Officer in our ladies only banking area will provide consultancy for a full range of our Halal banking services including.

Additionally.loans with a service charge and Mudaraba participatory financing -. It is the savings account holders and the borrowers who have reservations in dealing with the conventional banks. have no problems. burdensome and sometimes doubtful forms of financing and offer a clean and efficient interest-free banking.generally involve dealing in interest Muslims have no problem transacting such businesses with conventional banks. With only minor changes in their practices. The modified system will make use of only two forms of financing -. and a few in non-Muslim countries as well. All the necessary ingredients are already there. Yet it has already been implemented as the only system in two Muslim countries. Conclusions Islamic banking is a very young concept. This is an additional service Islamic banks offer over and above the traditional services provided by conventional commercial banks.both of which are fully accepted by all Muslim writers on the subject. Such a system will offer an effective banking system where Islamic banking is obligatory and a powerful alternative to conventional banking where both co-exist. Islamic banks can get rid of all their cumbersome. there are Islamic banks in many Muslim countries. such a system will have no problem in obtaining authorisation to operate in non-Muslim countries. These problems are mainly in the area of financing. similarly. . neither do Islamic banks experience any problems in providing these services. Participatory financing is a unique feature of Islamic banking. In the following paragraphs we will see how well the Islamic banks have succeeded in addressing their customers’ special concern. and can offer responsible financing to socially and economically relevant development projects. Among the depositors there are current account holders who too. Despite the successful acceptance there are problems.

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