Internship report

by
Rehan Mubeen
Roll No. MBE-15-49
MBA 2015-2019
Institute of Management Sciences
BAHAUL DIN ZAKARIYA UNIVERCITY MULTAN

Meezan Bank pvt Ltd.

Rehan mirza
Rehan mirza

Table of content

Preface 3

Acknowledgement 3

Executive summary 4

History of banking, Modern Banking 5

Islamic Banking in Pakistan 6

Banking in Pakistan 13

Introduction to Meezan Bank 14

Vision, Mission 15

Core Values, Board of Directors 16

Shariah Supervisory Board 17

Shareholder Structure & Segments 18

Product and Services 19

Operations 22

SWOT Analysis 25

Recommendation 26

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Preface
Internship training is an essential part of business student. For the sake of internship,
the most initial thing is to have a practical experience. This effort may get a student
to get a practical experience if right organization is selected. During the internship,
a student comes to particle knowledge. Student learn what they have studied so far.
As an MBA student,

I have also done my internship at Meezan Bank Limited Head office Mutan. Here,
I come to know a different and very interesting experience of learning and working
with staff of Meezan Bank Limited (MBL).

Acknowledgement

This internship report is specially meant for a student of Business Administration.

It is concerned to a brief study of the Trade, corporate department, operations,
functions, Products and Services, Credit administration department of Meezan
Bank.

In the preparation of this internship report, I acknowledge the encouragement and

assistance given by several people from Meezan Bank Limited.
I found every one very co-operative and helpful for providing me the theoretical as
well as practical knowledge about the function and operation of the bank. I am
heartily grateful to
Mr Zaffar Iqbal Sindhu
Mr Zahid team leader corporate
Mr Tariq mehmood Ansari Manager CAD
Miss Jawaria Anam Team leader CAD
Mr Faheem Tahir Relationship Manager
And every staff member of each department,

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EXACTIVE SUMMRY

This is the detailed report about Meezan Bank Limited where I did my internship
for six weeks from joining date 17 July 2017 till 25 august 2017. Meezan Bank
Limited a publicly listed company is the first and largest Islamic Bank in
Pakistan and one of the fastest growing banks in the history of the banking sector of
the Country. It commenced operations in 2002 when State Bank of Pakistan issued
first-ever license for Islamic commercial banking. The Bank offers wide range of
Sharia-compliant banking products and services to its customers both retail and
business. Besides traditional banking channels, the Bank offers various Alternate
Distribution Channels including Internet Banking, ATM Banking, Visa &
MasterCard debit card, SMS Banking, SMS Alerts, Mobile Banking Application
and Utility Bills Payment through ATM and Internet Banking.
Having the largest branch network and product range 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. Meezan Bank aims to fulfill its prime objective of providing customers
accessibility and convenience within an atmosphere and culture of dedicated service
and recognition of their needs.
Meezan Bank has developed an extraordinary research and development capability
by combining investment bankers, commercial bankers, Sharia scholars and legal
experts to develop innovative, viable and competitive value propositions that not
only meet the requirements of todays complex financial world but do so with
world-class service excellence which our customers demand all within the bounds
of Sharia.
In this report, there is complete history of banking as well as bank Meezan Bank
Limited

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History of banking

The Beginning of Banks

THE IDEA OF BANKS BEGAN AS LONG AGO AS 1,800 BC IN BABYLON.
IN THOSE DAYS MONEYLENDERS MADE LOANS TO PEOPLE. IN
GREECE AND ROME BANKS MADE LOANS AND ACCEPTED DEPOSITS.
THEY ALSO CHANGED MONEY. (IN THE BIBLE JESUS FAMOUSLY
DROVE THE MONEY CHANGERS OUT OF THE TEMPLE IN JERUSALEM).

However, with the collapse of the Roman Empire trade slumped and banks
temporarily vanished. However, banking began to revive again in the 12th and 13th
centuries in the Italian towns of Florence and Genoa.In the 16th century a German
family called the Fuggers from Augsburg became very important bankers .

THE BEGINNING OF BANKS IN ENGLAND

In England banks developed in the 17th century. Sometimes people deposited their
money with goldsmiths for safety. The goldsmiths issued a note promising to pay
the bearer a certain sum on demand. In time people began to exchange these notes
instead of coins because it was easier and safer. Goldsmiths began to lend the money
deposited with them in return for a high rate of interest. They also paid interest to
people who deposited money to attract their savings.

However not only individuals borrowed money. Governments also needed to

borrow, especially in wartime. The government borrowed money from wealthy
individuals and later repaid them with interest from taxation.

However, at the end of the 17th century the cost of fighting a war with France was
colossal. So, in 1694 the Bank of England was founded to provide a loan to the
government.

A group of financiers joined together to provide the money required to set up the
bank and loan the government A 1.2 million (a massive sum in those days). In
return the bank received 8% interest on the loan and the right to issue notes. The
Bank of England was also allowed to lend money and to buy and sell gold.

The Bank of England is sometimes called the 'Old Lady of Thread needle Street'. In
fact it moved to Thread needle Street in 1734. Meanwhile the Bank of Scotland was
founded in 1695.

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In 1708 a law forbade banks with more than 6 partners to issue their own notes.
(Although small banks could still do so). However, the Bank of England mostly
confined its operations to London. In the late 18th century many small banks were
founded in the provincial towns. the first travelers cheques were issued in England
in 1772.

However, banking crises are nothing new. In 1793, in 1814-1816 and in 1825 there
were 'runs' on banks when people lost confidence and tried to withdraw their money.
The result each time was a wave of bank failures.

In 1826 the law was changed to allow large banks with many shareholders to form
outside London. Many of the small country banks merged with the large banks.

In 1833 banknotes issued by the Bank of England were made legal tender (they must
be accepted as payment for a debt).

MODERN BANKS
Modern banks began with the Bank Charter Act of 1844. The Act split the Bank of
England (which was still legally a private bank) into two departments - a banking
department and an issuing department. From then on, the Bank of England could
only issue notes if they were backed up by gold or government securities.

The Bank Charter Act also forbade new banks to issue bank notes. When banks
merged, they lost the right to issue bank notes. So gradually the Bank of England
became the only bank in England that could issue notes.

At the end of the 19th century and in the 20th century many banks merged until in
the late 20th century banking in Britain was dominated by the 'big four', Barclays,
Lloyds, Midland and National Westminster.

Islamic Banking in Pakistan

Steps for Islamization of banking and financial system of Pakistan were started in
1977-78. Pakistan was among the three countries in the world that had been trying
to implement interest free banking at comprehensive/national level. But as it was a
mammoth task, the switchover plan was implemented in phases. The Islamization

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measures included the elimination of interest from the operations of specialized

financial institutions including HBFC, ICP and NIT in July 1979 and that of the
commercial banks during January 1981 to June 1985. The legal framework of
Pakistan's financial and corporate system was amended on June 26, 1980 to permit
issuance of a new interest-free instrument of corporate financing named
Participation Term Certificate (PTC). An Ordinance was promulgated to allow the
establishment of Mudaraba companies and floatation of Mudaraba certificates for
raising risk based capital. Amendments were also made in the Banking Companies
Ordinance, 1962 (The BCO, 1962) and related laws to include provision of bank
finance through PLS, mark-up in prices, leasing and hire purchase.Separate Interest-
free counters started operating in all the nationalized commercial banks, and one
foreign bank (Bank of Oman) on January 1, 1981 to mobilize deposits on profit and
loss sharing basis. Regarding investment of these funds, bankers were instructed to
provide financial accommodation for Government commodity operations on the
basis of sale on deferred payment with a mark-up on purchase price. Export bills
were to be accommodated on exchange rate differential basis. In March, 1981
financing of import and inland bills and that of the then Rice Export Corporation of
Pakistan, Cotton Export Corporation and the Trading Corporation of Pakistan were
shifted to mark-up basis. Simultaneously, necessary amendments were made in the
related laws permitting the State Bank to provide finance against Participation Term
Certificates and also extend advances against promissory notes supported by PTCs
and Mudaraba Certificates. From July 1, 1982 banks could provide finance for
meeting the working capital needs of trade and industry on a selective basis under
the technique of Musharaka.

As from April 1, 1985 all finances to all entities including individuals began to be
made in one of the specified interest-free modes. From July 1, 1985, all commercial
banking in Pak Rupees was made interest-free. From that date, no bank in Pakistan
could accept any interest-bearing deposits and all existing deposits in a bank were
treated to be based on profit and loss sharing. Deposits in current accounts continued
to be accepted but no interest or share in profit or loss could these accounts.
However, foreign currency deposits in Pakistan and on-lending of foreign loans
continued as before. The State Bank of Pakistan had specified 12 modes of non-

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interest financing classified in three broad categories. However, in any case, the
mode of financing to be adopted was left to the mutual option of the banks and their
clients.

The procedure adopted by banks in Pakistan since July 1 1985, based largely on
mark-up technique with or without buy-back arrangement, was, however,
declared un-Islamic by the Federal Shariat Court (FSC) in November 1991.
However, appeals were made in the Shariat Appellate Bench (SAB) of the Supreme
Court of Pakistan. The SAB delivered its judgment on December 23, 1999 rejecting
the appeals and directing that laws involving interest would cease to have effect
finally by June 30, 2001. In the judgment, the Court concluded that the present
financial system had to be subjected to radical changes to bring it into conformity
with the Sharia. It also directed the Government to set up, within specified time
frame, a Commission for Transformation of the financial system and two Task
Forces to plan and implement the process of the transformation.
The Commission for Transformation of Financial System (CTFS) was constituted
in January 2000 in the State Bank of Pakistan under the Chairmanship of Mr. I.A.
Hanfi, a former Governor State Bank of Pakistan. A Task Force was set up in the
Ministry of Finance to suggest the ways to eliminate interest from Government
financial transactions. Another Task Force was set up in the Ministry of Law to
suggest amendments in legal framework to implement the Courts Judgment. The
CTFS constituted a Committee for Development of Financial Instruments and
Standardized Documents in the State Bank to prepare model agreements and
financial instruments for new system.

The CTFS in its Report identified a number of prior actions, which were needed to
be taken to prepare the ground for transformation of the financial system. It also
identified major Shariah compliant modes of financing, their essentials, draft
seminal law captioned Islamization of Financial Transactions Ordinance, 2001,
model agreements for major modes of financing, and guidelines for conversion of
products and services of banks and financial institutions. The Commission also dealt
with major products of banks and financial institutions, both for assets and liabilities
side, like letters of credit or guarantee, bills of exchange, term finance certificates

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(TFCs), State Bank's Refinance Schemes, Credit Cards, Interbank transactions,

underwriting, foreign currency forward cover and various kinds of bank accounts.
The Commission observed that all deposits, except current accounts, would be
accepted on Mudaraba principle. Current accounts would not carry any return and
the banks would be at liberty to levy service charge as fee for their handling. The
Commission also approved the concept of Daily Product and Weightage System for
distribution of profit among various kinds of liabilities/deposits. The Report also
contained recommendation for forestalling willful default and safeguarding interest
of the banks, depositors and the clients.

According to the Commission, prior/preparatory works for introduction of Shariah

compliant financial system briefly included creating legal infrastructure conducive
for working of Islamic financial system, launching a massive education and training
program for bankers and their clients and an effective campaign through media for
the general public to create awareness about the Islamic financial system.

The Finance Minister of Pakistan in his budget speech for the FY02 declared the
following:
Government is committed to eliminate Riba and promote Islamic banking in the
country. For this purpose, a number of steps are under way which are:

1. A legal framework is designed to encourage practice of Islamic banking by banks

and financial institutions as subsidiary operations of their main operations;

2. Consultations and exchanges are undertaken with brother Islamic countries and
renowned institutions of Islamic learning such as middle eastern countries and Al-
Azhar University of Egypt, to learn more about their experiences and practices;

3. Amendments in HBFC Act are being made in line with the directive of the
Supreme Court. With these changes, HBFC would be fully Shariah compliant
institution, which will play an effective role both in promotion of Islamic financing
method but also in the development of the important housing sector;

4. Shariah compliant modes of financing like Musharaka and Mudaraba will be

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encouraged so that familiarity and use of such products is enhanced and their
adoption at a wider scale made possible.

It is governments intention to promote Islamic banking in the country while

keeping in view its linkages with the global economy and existing commitments to
local and foreign investors. The House Building Finance Corporation had
shifted its rent sharing operations to interest based system in 1989. The Task Force
of the M/O Law proposed amendments in the HBFC Act to make it Shariah
Compliant. Having vetted by the CTFS, the amended law has been promulgated by
the Government. Accordingly, the HBFC launched in 2001 Asaan Ghar Scheme in
the light of amended Ordinance based on the Diminishing Musharakah concept. A
Committee was constituted in the Institute of Chartered Accountants, Pakistan
(ICAP), wherein the SBP was also represented, for development of accounting and
auditing standards for Islamic modes of financing. The Committee is reviewing the
standards prepared by the Bahrain based Accounting and Auditing Organisation for
Islamic Financial Institutions (AAOIFI) with a view to adapt them to our
circumstances and if considered necessary, to propose new accounting standards. It
was decided in September 2001 that the shift to interest free economy would be
made in a gradual and phased manner and without causing any disruptions. It was
also agreed that State Bank of Pakistan would consider for:

1. Setting up subsidiaries by the commercial banks for conducting Sharia compliant

transactions;
2. Specifying branches by the commercial banks exclusively dealing in Islamic
products.

3. Setting up new full-fledged commercial banks to carry out exclusively banking

business based on proposed Islamic products.

Accordingly, the State Bank issued detailed criteria in December 2001 for
establishment of full-fledged Islamic commercial banks in the private sector. Al
Meezan Investment Bank received the first Islamic commercial banking license
from SBP in January 2002 and the Meezan Bank Limited (MBL) commenced full-
fledged commercial banking operation from March 20, 2002. Further, all formalities
relating to the acquisition of Societe Generale, Pakistan by the MBL were

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completed, and by June, 2002 it had a network of 5 branches all over the country,
three in Karachi, one in Islamabad and one in Lahore. The MBL now maintains a
long term rating of A+ and short term rating of A1+, assessed by JCR VIS Credit
Rating Co Ltd, signifying a consistent satisfactory performance.

The Government as also the State Bank are mainly concerned with stability and
efficiency of the banking system and safeguarding the interests, particularly, of
small depositors. With this concern in mind it has been decided to operate Islamic
banking side by side with traditional banking. The approach is to institute best
practice legal, regulatory and accounting frameworks to support Islamic banks and
investors alike. The year 2002-2003 witnessed strengthening measures taken in the
areas of banking, non-bank financial companies and the capital markets. Islamic
Banking Subsidiaries

A new clause (aa) was inserted in sub-section (1) of Section 23 of the Banking
Companies Ordinance 1962 by an amendment notified in the Gazette of Pakistan
on November 4 2002, if banks could form subsidiaries for carrying on of banking
business strictly in conformity with the Injunctions of Islam as laid down in the
Holy Quran and Sunnah. In January, 2003 the State Bank issued BPD Circular No.
01 outlining detailed instructions on the remaining two parts of the strategy, viz.
setting up of subsidiaries and Stand-alone branches for Islamic Banking by existing
commercial banks. The criteria for subsidiaries are almost similar to the criteria for
setting up scheduled Islamic commercial bank with emphasis on complete
segregation of accounts of Islamic banking subsidiaries and the parent banks doing
conventional banking. The subsidiaries shall have minimum paid up capital of Rs
1,000 million that is equal to the capital requirement for full-fledged commercial
banks.
Islamic Banking through Stand-alone Branches For Part-III of the strategy,
guidelines for opening of stand-alone branches for Islamic banking by existing
commercial banks, enlisting eligibility criteria, licensing requirements and other
operational details on the subject were issued on January 1 2003. The criteria pertain
to financial strength of the applicant bank as evident from its capital base (net capital
free of actual and potential losses), adequacy of its capital structure, record of
earning capabilities, future earning prospects of the bank, managerial capabilities,

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banks liquidity position, track record of the banks adherence to prudential

regulations, credit discipline, quality of customer services and the convenience and
the needs of the population of the area to be served by the proposed branches.
Further, banks seeking permission should have CAMELS rating of 1, 2 and 3 in the
last ON-SITE inspection and there should not be major adverse inspection findings
against the bank. The applying bank is required to submit proposal to the State Bank,
outlining the following details:

Number of branches along with name of city where the Islamic Banking Branch
(IBB) is to be offered within the next financial year.

Products and services to be offered by the IBB including deposits, financing,

investment, etc.

Method of segregating the funds of IBB from the funds of commercial banking of
the applying bank.

Infrastructure and logistic requirements, including manpower and training

programs.

The name, qualification and experience of Sharia Adviser (s), and

Accounting aspects, such as accounting policies to be followed, profit and loss
sharing mechanism, manuals, etc.

The bank will also be required to set up Islamic Banking Division (IBD) at the Head
Office/Country Office in Pakistan. The responsibilities of this Division have been
depicted in detail. The bank would also appoint a Sharia adviser/Sharia Supervisory
Committee consisting of Sharia scholar(s) of repute to advise the IBD on matters
pertaining to Sharia. Moreover, the bank shall ensure that proper systems and
controls are in place to ensure segregation of funds and to protect the interest of
depositors. The banks shall ensure proper maintenance of records for all transactions
for disclosure of assets, liabilities, expenses and income of IBD/IBB(s). The IBD
will also comply with statutory liquidity and cash reserve requirements determined
by SBP.

About the status of Islamic banking industry in the country (End June 2004),
Meezan Bank is operating with 10 branches in 5 cities as a full-fledged Islamic
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bank. In addition to it, 5 banks (MCB, Bank of Khyber, Bank Alfalah, Habib Bank
AG Zurich and Standard Chartered Bank) have been issued licenses for 12 dedicated
Islamic Banking Branches (IBB) of which 10 branches are operating in Karachi,
Islamabad, Peshawar, Lahore, Faisalabad and Multan. These banks are planning to
offer Islamic banking products in Quetta, Hyderabad, Gujranwala and other major
cities during the year 2004. SBP has also given in principle approval for opening 10
more Islamic banking branches during 2004 by MCB and Bank Alfalah.

Habib Bank Limited and Bank Al Habib Limited have been granted in principle
approval to open two Islamic banking branches. They are expected to start these
branches during the year 2004. At least five more banks are expected to open Islamic
banking branches during the year ending December, 2004. Applications for two new
full-fledged Islamic banks are also under scrutiny while the license of a foreign
Islamic bank is being converted to Islamic banking. Some of the banks who are
operating Islamic banking branches are also offering Islamic banking products
through their existing conventional branches by using hub & spoke arrangement. It
will increase the outreach of Islamic banking products in other cities as well.

Banking in Pakistan

At the time of independence there were 631 offices of scheduled banks in Pakistan
of which 487 were in West Pakistan alone. As a new country without resources it
was very difficult for Pakistan to run its own banking system immediately.
Therefore, the expert committee recommended that the Reserve Bank of India
should continue to function in Pakistan until 30th September 1948 so that problems
of time and demand liability coinage currencies exchange etc. are settled between
India and Pakistan. The non-Muslims started transferring their funds and accounts
to India. By the end of June 1948, the number of officers of scheduled banks in
Pakistan declined from 631 to 225. There were 19 foreign banks with the status of
small branch offices that were engaged solely in export of crop from Pakistan, while
there were only two Pakistani institutions Habib Bank of Pakistan and the
Australasia Bank. The customers of the bank are not satisfied with the uncertain

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condition of banking. Similarly, the Reserve Bank of India was not in the favor of
Govt. of Pakistan. The Govt. of Pakistan decided to establish a full-fledge central
bank. Consequently, the Governor-general of Pakistan Quaid-E-Azam inaugurated
the State Bank of Pakistan on July 1, 1948. Thus, a landmark was made in the history
of banking when the state bank of Pakistan assumed full control of banking and
currency in Pakistan

The banking structure in Pakistan comprises of the following types;

1) state Bank of Pakistan

2) commercial bank of Pakistan

3) Saving Banks

4) Co-operative Banks

5) Specialized credit institutions

Introduction to Meezan Bank

Meezan Bank, Pakistans first and largest Islamic bank, is a publicly listed company
with a paid-up capital of Rs. 10 billion. It is one of the fastest growing financial
institutions in the banking sector of the country. With its Vision of establishing
Islamic banking as banking of first choice the Bank commenced operations in
2002, after being issued the first-ever Islamic commercial banking license by the
State Bank of Pakistan.

The Bank provides a comprehensive range of Islamic banking products and services
through a retail banking network of more than 550 branches in more than 140 cities
of the country. Backed by a state-of-the art T-24 core banking system, the branch
network is supported by 24/7 banking services that include over 550 ATMs, VISA
and MasterCard Debit cards, a Call Center, Internet Banking, Mobile Application
and SMS Banking facility. Cater to the unbanked population the Bank also offers

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Branchless Banking services through Meezan UPaisa - Worlds first Islamic

Branchless Banking.

The Bank operates strictly under the principles of Islamic Shariah and is well-
recognized for its product development capability, Islamic banking research and
advisory services. In order to ensure strict Shariah-compliance in all its products
and services, the Bank has established a dedicated Product Development and
Shariah Compliance department that operates under the supervision of the Banks
in-house Resident Shariah Board Member and a Shariah Supervisory Board
comprising of internationally renowned Shariah scholars.

Meezan Bank stands amongst the top Islamic Banks globally. Islamic Finance News
Malaysia has awarded the Bank with two global awards for the year 2015 - Best
Islamic Retail Bank and a third position in the Overall Islamic Banks category.
The Bank has also been rated as the Best Islamic Bank of the Region per South
Asian Disclosure Index.

Meezan Bank Limited is a private commercial bank so the major competitors

of Meezan Bank Limited is the following;

The bank of Punjab

Bank Al-Habib Ltd
ABL
Faysal Bank Ltd
United Bank Ltd

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

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optimizing the stakeholders value through an organizational culture based on

learning, fairness, respect for individual enterprise and performance.

Values;
Sharia-compliance, Integrity, Professionalism, Innovation, Service Excellence,
Social Responsibility. Staff that is committed, motivated and professionally trained
and who are empathic to their customers needs.

Board of Directors

MR. RIYADH S.A.A. EDREES (CHAIRMAN)

Mr. Riyadh S.A.A. Edrees has been a Director of Meezan Bank since October 2012.
He is the Chairman of the Board and also the Chairman of Human Resources and
Remuneration Committee. He has also previously served as the Vice Chairman of
Meezan Bank.

Mr. Faisal A.A.A. Al Nassar

Mr. Faisal A.A.A. Al-Nassar has been a Director of Meezan Bank since March
2015. He is a Board member and also the Chairman of the Risk Management
Committee of the Board

Mr. Badar H.A.M.A Al Rabiah

Mr. Bader H.A.M.A. Al-Rabiah has been a Director of Meezan Bank since
November 2015.
Mr. Bader H.A.M.A. Al-Rabiah has a strong academic background in accounting
and a focused experience in investments honed over the past 12 years. He was
involved in establishing the Real Estate Investment Department at Noor Financial
Investment Company and served as the Chairman at Arab Investment, Real Estate
and Agricultural Development Group, Egypt.

Mr. Irfan Siddiqui (President and CE0)

Mr. Irfan Siddiqui is the founding President and Chief Executive Officer of Meezan
Bank. He is also a member of the Human Resource and Remuneration Committee
of the Board.

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Mr. Irfan Siddiqui holds a Foundation Course in Accountancy from

Sunderland, U.K. and is a Fellow Chartered Accountant from Institute of Chartered
Accountants England and Wales. He has held several senior management positions
including Chief Executive Officer at Al-Meezan Investment Bank Limited, General
Manager at Pakistan Kuwait Investment Company, Manager Finance and Operation
at Abu Dhabi Investment Company and Senior Business Analyst at Exxon Chemical
(Pakistan) Ltd.

Mr. Ariful Islam (Deputy CEO & Executive Director)

Mr. Ariful Islam joined the bank as its first Chief Operating Officer in April 1999.
He is presently the Banks Deputy CEO and an Executive Board member. He is also
a member of the Risk Management Committee of the Board as well as a member of
several Management Committees of the Bank.
Mr. Ariful Islam qualified as a Chartered Accountant from the Institute of
Chartered Accountants in England and Wales in 1982. He is also a Fellow Member
of the Institute of Chartered Accountants in Pakistan. He worked with KPMG
(formerly Peat Marwick Mitchell & Co., London Office) before moving back to
Pakistan in 1985. He has over 30 years of banking experience and has held several
senior management positions including Executive Vice President & Regional
Manager South at Faysal Bank Limited and Senior Executive Vice President &
Head of Investment Banking at MCB Bank Limited.

Shariah Supervisory Board

Successful implementation of the Islamic Banking model rests upon absolute

adherence to the principles of Islamic Shariah. The foundations of a strong Shariah
underpinning at Meezan Bank were laid from the beginning. A world-renowned
Shariah Supervisory Board and a highly qualified and experienced in house Shariah
Advisor are fundamental aspects of the Bank's core USP. The primary role of this
Board is to maintain and further strengthen this commitment and to ensure strict
Shariah-compliance in all areas of the Bank's operations.Members of the Shariah
Supervisory Board of Meezan Bank are Internationally-renowned scholars, serving
on the boards of many Islamic banks operating in different countries .

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Shareholding Structure

Shareholders rupees (millions) percentage

Noor Financial Investment Company 4924 49.11 %

Pak Kuwait Investment Company 3008 30 %
Islamic Development Bank 935 9.32 %

Other shareholders 1160 11.57 %

---------------- --------------
-
Paid up capital 10,027 100 %

MEEZAN BANK SEGMENTS

Meezan Bank is managed by a team of professional bankers committed to the cause

of Islamic Banking. This single unifying factor unleashes the tremendous power of
a dedicated and motivated team committed to fulfilling the Vision and Mission of
this Bank.

The business segments of the Bank are:

Consumer Banking
Corporate Banking
Investment Banking
Commercial Banking (including Small and Medium Enterprises)
Treasury & Financial Institutions
Asset Management (managed through a subsidiary Al Meezan Investment
Management Ltd.)

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Comment on organizational structure

The organizational structure of the Bank consists of top level management,

middle level management and lower level management. The top-level
management comprises of president, executive vice president, and divisional
heads. The middle level management comprises of departmental heads, SVPs
and VPs. The lower level management comprises of AVPs, Managers, and
Operation Managers. The reporting system at horizontal level is much
effective and successful. The reporting system at vertical level i.e. from lower
level management to middle level management is also accurate, timely and
complete. The middle level management gives information to high level
management at which decision are made, rules and regulations are amended
keeping in view the present scenario.

Products, Services

Deposit products
Rupee Current Account
Dollar Saving Account
Euro Saving Account
Meezan Bachat Account
Business plus Account

Consumer Finance

Consumer finance provides for construct a home, purchase a car, etc

Easy Home
Car Ijarah
Laptop Ease
Home Appliances
Bike ijarah

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Electronic Banking

Visa Debit Card

Internet Banking
ATM Network
Meezan Quick pay
SMS Alerts
24/7 Call Center

Working Capital Finance

All types of working capital Products in Term Structure as well as Running

Musharakah Structure - an alternate to conventional running finance facility.
Moreover, specialized structures available to cater off balance sheet financing
needs of large Corporates.

Corporate Trade Business

The Banks trade business (import and export) performed very well in 2016 in both
volume and income and registered a growth of 20% and 27.5%, respectively,
notwithstanding the fact that exports of the country as a whole dropped by 13%
during the year. The total trade business volume in 2016 crossed Rs 552 billion.

Key Corporate Banking Solutions

Meezan Bank provides integrated cash management and trade finance

services to various organizations as well as financial institutes across the
country. With one of the most comprehensive and sophisticated digital
platforms, Meezan Bank ensures world-class services and financial solutions
to its clients.

The Bank, with strong system capabilities and well equipped business teams,
is trusted both by local customers and multinational companies to betheir
strategic banking partner for their transactional as well as project based
banking needs. Over two-third of the Banks trade business originates from

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corporate clients. Our extensive branch network in over 140 cities pan
Pakistan and product depth has helped us to be a part of some of the countrys
most transformative projects. As we grow, we maintain a steadfast
commitment to our values, enabling us to serve our core clients with
distinction.

MURABAHA
Meezan Bank offers a convenient and easy to use solution for financing raw
material and inventory requirements of the customer through Islamic mode
of Murabaha. Murabaha is a sale transaction where the seller discloses the
cost and profit to the buyer at the time of execution of sale. Murabaha is a
short term Islamic facility for meeting asset based working capital
requirement of customers where instead of providing a loan, Meezan Bank
sells the required asset to the customer on spot or deferred basis.

SHORT-TERM IMPORT FINANCING

Meezan Bank offers flexible and convenient import financing facility on the
basis of Musawamah/ Murabaha. If the customer wants to finance its letter of
credit, the Bank appoints the customer as its agent to import the goods and
customer establishes the LC as an agent of the Bank. Upon receiving
possession of the goods, the Bank sells the goods to the customer on a
deferred payment bases.

ISTISNA
Meezan Bank offers an Istisna based solution to finance complete working
capital requirements of its customers. Istisna is a type of sale transaction
where the buyer places an order with the seller to manufacture certain asset
and the sale is completed upon delivery of the asset to the buyer. Under this
facility Meezan Bank provides funds to customers for manufacturing certain
assets for the Bank and then, upon delivery, sells the assets in the market.

TIJARAH
This is a working capital solution especially for those customers who sell
their inventory on credit and require funds for operations during the credit
period. In Tijarah, the Bank purchases the finished goods from the customer
and after taking the delivery, sells the goods in the market

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RUNNING MUSHARAKAH

This is a Shirkul-aqd based financing facility offered to the customers where the
Bank participates in the operating activities of the customer and shares profit and
loss as per the actual performance of the business. This product is also used as a
viable financing solution for Service Industry and Travel Agents whose financing
needs are generally not addressed by other Asset backed products.

STRUCTURED FINANCE SOLUTIONS

To provide solutions to unique financing requirements of the customers such as

project financing, CAPEX and BMR requirements, short term retail sukuks etc,
Meezan Bank offers specialized hybrid solutions that are specifically developed as
per the special financing requirement of the customer

Department of Operations

Procedure of account opening;

For opening of an account there are different types of account holders
are required for all these types. The operation/procedure requirement that is needed
for Individual Account differs greatly from the Joint Accounts
proprietorship A/C, Partnership A/C, Private Limited Company A/C and
Public Limited Company A/c.

Individuals Account

When a single man or woman opens an account in his or her own name and has the
right to operate it is called individual A/C.

Documentation:
Copy of National Identity Card.
Proof of Income
Proper Identification (Introduction).

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Operations:
The person place in the type of account and type of operation required in the
account opening form.

He/she fills in part 1 of the form a fix his/her either two of four similar
signature ( or thumb expression in the signature space ) and get it introduced
and signed by a person who already has an account with the bank and write
his account number in the specific rows in a specific space.

The person fills his or her father, mother, husband/wife or any other relatives
name his/her address, phone number, his or her sign to certify this
requirement. This requirement is needed because in his/her absence bank can
have correspondence with a specific person.

The person deposits the initial amount for opening account onto the cash
counter. The person put his signature on form on two places in authorized
Signature and fills in the Title of Account space by writing his name.
If the person put his signature in Urdu or any other language other than
English he signed a Vernacular Form.

If the person has changed its signature then he must have to sign the
signature change undertaking.

The next step is entering in computer because the centralized account opening
structure and generation of account number.

1. Account Opening Form:

First of all the customer fills the account opening form (AOF). Filling of account
opening form includes type of account, currency of account, name, and address,
signature of customer and signature of introducer and attach a photocopy of national
identity card. He also signs an undertaking that he will follow the rules and
regulations of the bank.

2. Introduction:

The signature and account number of the account holder introducing the account to
the new person is obtained on the account opening form.

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3. Specimen Signature Card:

The signature of the client is obtained on a specimen signature card (S.S Card). The
card is obtained with two signatures from the customer. Every time a cheque is
received for payment from the client the signature on the cheque is verified by
comparing it with S.S Card.

4. Requisition slip:

A requisition slip for Cheque book is also given to the customer. The customer
fills it and gives it to the account opening Officer.

5. Know Your Customer Form:

Every account holder fills this form. The basic purpose of this form is to get some
basic information about the customers business and source of incomes .

6. Account Number:

When all the formalities are completed an account number is allotted to the
customer and all the information is entered into the computer and register. Then that
account number is written on S.S Card and account opening form.

7. Depositing of amount in account:

The client deposit cash in the account. For this purpose cash pay-in-slip is used. The
minimum initial deposit is fixed for each account according to the nature of account.
For example for PLS / saving account the minimum requirement is Rs.100 only.

8. Issuance of a Cheques Book:

After opening an account with the bank the account holder makes a request in the
name of the bank for the issuance of a Cheque book. Such a request is known as
Requisition Slip. BAL issues Cheque books from 10 leaves to 50 leaves. When he
used this book completely then he can apply for another known as subsequent
Cheque Book. This process takes a day because the Cheque books come from the
Karachi head office.

9. Entry of Cheques Book:

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Before issuance of a Cheque book the bank stamp every leaf with the account
number of the customer enter it in the cheque book register and computer and issues
the cheque book to the customer after his signature on the register.

10. Letter of Thanks:

A letter of thanks is prepared. One letter is for the customer and one for the
introducer. One copy is send to the customer and the other copy is kept in the record
along with other documents.

SWOT Analysis:
Strengths:

Bank has a belief in customer service

Customer give suggestion for the improvement of bank and
these suggestions are listened carefully.
Manager Mr. Muhammad Mehdi Fida has a good coordination with staff
members.
Environment is friendly.
Products are excellent
Expansion is consistent
Modernized banking (online + Internet)
Fully computerized each department has to own PC.

Weaknesses:

New Setup
Staff is lesser.

Opportunities:

Information Technology.
Establishing Foreign Branches
Local Setup Expand

Threats:
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Competition by the settled bank like MCB and others

There is a possibility that in future the customers are too many to be
handled by the so small number of the employees.
Governmental policies may pose unpleasant role
Global issues like America Iran war and terrorism

Recommendations
Finally, there are some suggestions for Meezan Bank Limited. These suggestions
are based on experience with the bank. This is a routine practice that to give
personalized services to the customer bank staff tries to fill all the columns of AOF
with their own handwriting which is wrong. AOF must be filled in by the
customers. Bankers should avoid filling in the AOF because it can create problem
if the address, title of account or any other information provided by the customer
has not been written properly. Customer may be affected or he may claim that this
information was not provided by him, but if AOF is filled by the customer then
banker cannot be held responsible for any incorrect information provided by the
customer.

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