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INTERNSHIP REPORT ON

MEEZAN BANK ABBOTTABAD(1501)

BY
Mubasher Nazir
BBA HONS (Finance)
ROLL NO: 8768
SESSION 2005-2010

HAZARA UNIVERSITY MANSEHRA

HAZARA UNIVERSITY MANSEHRA.


Internship Report on Meezan Bank Abbottabad

This Internship Report Is Submitted In Partial Fulfillment Of The Requirements


For The Degree Of Bachelor Of Business Administration Awarded By The Hazara
University Mansehra

HAZARA UNIVERSITY MANSEHRA

HAZARA UNIVERSITY MANSEHRA.


HAZARA UNIVERSITY MANSEHRA

Approval Sheet

Approval Committee

1. External Examiner

Mr. _____________________________________________

Signature_______________

2. Supervisor

Mr. ____________________________________________

Signature_______________

3. Head of Department

Mr. ___________________________________________

Signature ________________

HAZARA UNIVERSITY MANSEHRA.


Dedicated To

My dearest Parents and My Respected Teachers who motivate and encourage me in every aspect
of my life and a few Special Friends who have been supporting and cooperating with me to
accomplish this task.

HAZARA UNIVERSITY MANSEHRA.


ABSTRACT

Modern banking system was introduced into the Muslim countries at a time when they were
politically and economically at low ebb, in the late 19th century. With the passage of time,
however, and other socio-economic forces demanding more involvement in national economic
and financial activities, avoiding the interaction with the banks became impossible. As countries
became independent, the need to engage in banking activities became unavoidable and urgent.
Governments, businesses and individuals began to transact business with the banks, with or
without liking it. This state of affairs drew the attention and concern of Muslim intellectuals. The
story of interest-free or Islamic banking begins here. The history of interest-free banking can be
divided into two parts. First, when it still remained an idea; second, when it became a reality.
The literature of the period begins with evaluations and ends with attempts at finding ways and
means of correcting and overcoming the problems encountered by the existing banks. During the
last few decades interest-free banking attracted more attention, partly because of the political
interest it created in Pakistan and partly because of the emergence of young Muslim economists.

Meezan bank is the first Islamic bank and is therefore recognized as one of the pioneer banks
that promotes Riba-free (interest free) banking activities all over the country. The bank has
developed an extraordinary research and development capability by combining investment
bankers, commercial bankers, Shariah scholars and legal experts to develop innovative, viable,
and competitive value propositions that not only meet the requirements of today’s complex
financial world, but do so with the world-class service excellence which our customers demand,
all within the bounds of Shariah.

HAZARA UNIVERSITY MANSEHRA.


HAZARA UNIVERSITY MANSEHRA.
TABLE OF CONTENTS

Acknowledgments i
Preface ii
Executive Summary iii

CHAPTER 1
Introduction to Report

1.1 Background Of The Study 01


1.2 Purpose Of The Study 01
1.3 Scope Of The Study 01
Research Methodology 02
1.5 Scheme Of Study 02

CHAPTER 2
Introduction to Banking 03
2.1 Evolution Of Banking 04
2.2 Fairly Growrh 04
2.3 (1628- 1786 BC ) 04
2.4 687 BC 04
2.5 Modern Banking 04
2.6 Type Of Banking 05
2.7 Development Of Banking In America 07
2.8 National Bank Act 07
2.9 Banking Act 1935 07
2.10 Banking in Pakistan 07

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CHAPTER 3
Introduction To Islamic Banking 09
3.1 Islamic Finance 09
3.2 The Islamic Economy system 09
3.3 The Importance Of Economic Goals 09
3.4 Islamic Theory 10
3.5 The Islam View 10
3.6 Capital can be Invested in a Business venture 11
3.7 Riba 11
3.8 Commercial interest and usuey 12

CHAPTER 4
History Of Meezan Bank ` 15
4.1 1997-2009 15
4.2 Meezan Bank Vision And Missions 16
4.3 Corporate Values 16
4.4 Background Review 19

CHAPTER 5
Comprehensive Business Solution 22
5.1 Corporate And Commercial Banking 22
5.2 Largest Branch Network 23
5.3 Financial Banking 24
5.4 Service Quality 25
5.5 Quaid’s Concept Of Islamic Banking 25
5.6 Riba Free Banking Objective 25

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CHAPTER-6
Meezan Team 26
6.1 Treasury And Financial Intuition 28
6.2 Economic Our View 28

CHAPTER 7
What I Have Learn As A Internee 32
8.1 Account Opening 35
8.2 Issuance Of Cheque Book 26
8.3 Certificate Of Islamic Investment 39
8.4 Invest In Certificate Of Islamic Investment 39
8.5 Call Deposit Receipt 40
8.6 Cheques For Collection 42
8.7 7th And 8th Weeks At Meezan Bank 43
CHAPTER 9
Financial Analysis 46
9.1 Common Size Analysis 46
9.2 Ratio Analysis 53

CHAPTER 10
Swot Analysis 58
10.1 Strengths 58
10.2 Weaknesses 58
10.3 Opportunities 59
10.4 Threats 59

CHAPTER 11

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Conclusions 60
11.1 Financings 60
11.2 Term Structure Of Investment By 20 Islamic Bank ,1988 61
CHAPTER 12

Recommendation 66
12.1 Performance Appraisal 66
12.2 Proper Job Rotation 66
12.3 Fair Benefits 66
12.4 Overload Of Work 67
12.5 Credibility Of Customers 67
12.6 Customer Relationship 67
12.7 Empowerment Of Employees 68
12.8 Marketing Culture 68
12.9 Health Activities 68
References 70
Bibliography 71
Appndex 75

HAZARA UNIVERSITY MANSEHRA.


Acknowledgements

Allah is very Kind, Merciful and Compassionate. His benevolence and blessings have enabled
me to accomplish this task.

I highly appreciate Mr. ALAM ZEB KHAN, Area Manager and RAFIQUE AWAN, Operation

Manager, Meezan Bank Abbottabad for their support and collaboration.

I am extremely thankful to my Supervisor MR. ZIA UR REHMAN, who has supervised me


throughout to complete this tough task.

I pay special gratitude to all my honorable teachers who have been teaching me various courses
during the last five years at CIIT, with addict zeal and zest.

I wish to express my heartiest and sincere appreciation to my friends for their continuous help,
cooperation, and moral support.

The last but not least, I would feel incomplete without thanking to my parents who pray for my
brilliant success and bright future.

Mubasher Nazir

HAZARA UNIVERSITY MANSEHRA.


Abbreviations

MMF : Al Meezan Mutual Fund Limited


IFIs : Islamic Financial Institutions
MIF : Meezan Islamic Fund
AMMF : Al Meezan Mutual Fund Limited
RTC : Rupees Travelers Cheque
MAC : Meezan Aamdan Certificate
COII : Certificate of Islamic Investment
MIIDA : Meezan Islamic Institution Deposit
Account
TT : Telegraphic Transfer
DD : Demand Draft
MT : Mail Transfer
PLS : Profit and Loss Sharing
FDD : Foreign Demand Draft
LC : Letter of Credit

HAZARA UNIVERSITY MANSEHRA.


Executive Summary

As per the requirement for the degree of BBA (Hon’s) of Hazara University Mansehra, I took

up the internship at Meezan Bank, Abbottabad Branch. This report is based on the experience

and knowledge which I got from my internship at Meezan Bank. In the first chapter I have

discussed about my time stay in the bank and introduction to the whole report. In second chapter

I have discussed about the introduction of the bank. Basic function of Meezan Bank. The story

begins with the incorporation of Meezan Commercial Bank limited in Pakistan on October 09,

1991, Meezan Bank Commenced (begin) to operations in April 1992, as a public limited

company.

The bank is listed on the Karachi, Lahore and Islamabad Stock Exchanges and the initial public

offering was over subscribed by 16 times. I have also mentioned the products which the bank is

offering to its customers and then I have given a brief overview of different policies of the bank.

In third chapter I have discussed about the concept of Islamic banking according to our religion.

this chapter begins with the Islamic finance and the economic growth of Islamic bankig.further I

have discussed the goals of Islamic banking., and Islamic theory have also discussed

Musharakah / Mudarabah and its uses .In forth chapter there is the history of Meezan bank, its

origin and basics, vision and mission statement, the corporate values and the organizational

structure.

In 5th and 6th chapter the business of meezan bank is discussed the products and services of the

meezan bank are discussed in this chapter. this chapter also tells us about the branch network of

Meezan bank. further I have discussed the meezan team. the 7th chapter is the detail of my whole

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internship that what I have learned in 8 weeks the chapter is based on the day by day

performance. In the 8th chapter I have discussed about financial analysis. I do the common size

analysis of the and company for this purpose I take the data of last five years. Then I do the ratio

analysis and in last I analyze the net income, EAT, deposits, EBIT, loans and advances of the

bank during last five years. In 9th chapter I have given the swot analysis of Mezan Bank. Swot

analysis is done keeping in the view what I have seen and felt in the branch during my intership.

In the 10th chapter I have give the conclusions of my internship that the Meezan bank is now

have a good reputation in market.

In 11th chapter I have give some personal recommend ions as how bank can improve its

performance and then I have write the conclusion about my internship as well as report. And in

last I mentioned some important references and web sights from where I get the help during

preparation of my reportrnship.

HAZARA UNIVERSITY MANSEHRA.


CHAPTER 1
INTRODUCTION TO REPORT

1.1) Background of study :

Meezan Bank Ltd has grown to become the largest Islamic bank in the country. The bank
claims to be the Pakistan premier Islamic bank determined to set higher standards of
achievements . The bank comes in to existence by the order promulgated by governor general
and standard functioning from Nov 20, 1997
Meezan Bank is the major business partner our government of Pakistan with special emphasis on
fostering Pakistan economic growth through aggressive and balanced lending polices,
technologically oriented products and services offered through its large network of 203
branches .
1.2) Purpose of study :
The purpose of study is to get more knowledge about the structure and function of the
department of MBL has clear picture of its financial health in particular . For this purpose a
through financial analysis through common sizing and ratio analysis of the bank, is carried out to
is to judge the actual financial standing of the bank .
Solid recommendations are given on all aspects to further improve the functioning of the bank .

1.3) Scope of the study :


The time duration of eight weeks is a quite insufficient for conducting complete study and

HAZARA UNIVERSITY MANSEHRA.


observation of large bank. Being a specializing in finance, the main focus of study is its financial
aspects including the financial health of the bank and its comparison with previous year
performance .
Some of the problems faced by the bank have been identified and some remedies have also been
suggested to overcome these problems and improve the prevailing financial condition of the
bank .

1.4) Research Methodology:


MBL is one of the leading and establishes bank of the country. It has a large step of
departments and a big organizational structure. While working in a branch of the bank , it is not
possibly to thoroughly cover all the areas of the bank , as it requires more time and eight weeks
are in no way sufficient to do.
Different tools and techniques were use together relevant information for writing the report first
interview were taken from the manager and other staff member of the bank. For this purpose
some unstructured question were asked and depending on them some conclusion were made.
Secondly, the liter & journal from regional head quarter and staff college were also
reviewed which gave very useful information about the functioning of the bank.
I also visited the MBL official website i.e. www.meezanbank.com which gave very useful
information about functioning of the bank.
My personal observations during the short stay also helped me to collect about this specific
branch.

1.5) Scheme of study :


The scheme of study of the report is as under .
1 Part one is about the introduction of the study, which includes its background, purpose and
scope of the study research methodology and the scheme of study .
2 Part two is about the literature review, of the bank , the departmentation and its function, and
detail study of the credit department . Part three is about the financial analysis of the bank,

HAZARA UNIVERSITY MANSEHRA.


which includes the ratio analysis, common size analysis, comparative analysis and index
analysis .
3 Part four is includes SWOT analysis, problems and recommendations prescribe for the bank
to further improves its functioning .

CHAPTER 2

INTRODUCTION TO BANKING
WHAT IS BANK?
Before going to start we must know that what is bank? Like many other subjects and social
sciences no any precise definition can be given for the study of banking also. Different authors
have defined and described this subject, keeping in view the particular functions of banking.
Mr. Paget says “No one and no body corporate can be a banker who does not open:
1 Current Account
2 Pays cheques drawn upon him
3 Collects cheques for the customers
Mr. Kinly says “Bank is an institution which receives deposits and advances loans”.
The definition laid down in the Banking Companies Act 1962 is “Bankers means a person,
transacting the business of accepting for the purpose of lending or investment, of deposits of
money from public, repayable on demand or otherwise and withdrawals by cheques, drafts or
orders or otherwise and includes any Post Office Saving Bank.”
In view of the above definitions, in simple words a bank can be defined as an institution dealing
in money, accepting deposits and advancing loans.
Definition
There are different opinions about the origin of the word “Bank”. According to some authors the

HAZARA UNIVERSITY MANSEHRA.


word bank is derived from Latin word “Bancus” or “Banque” which means a bench. The
explanation of this origin is attributed to the fact that the Jews in Lombardy transected the
business of money exchange on benches in the market place. When the business failed, the
people destroy the bench. Incidentally the word bankrupt is said to have been evolved from this
practice.

Origin:
The opponents of this opinion argue that if it was so, then how is it that the Italian
moneychangers were never called Bunchier in the middle ages. Other authorities hold the
opinion that Bank is derived from German word back which mean joint stock fund. Later on,
when the German occupied major part of Italy, the Back was italicized into Bank.

2.1) Evolution of banking


The word Bank derived from the words “ bancus or banque which means a bench .
The word bank is derived from the German word Bank which joint Stock Fund .

2.2) Early growth


Babylonians who developed banking system as early as 2000 BC .Temples of Babylon were
used as Banks .

2.3) 1628 – 1786 BC .


king Hammurabi the founder of the Babylonian empire dew up a code where in he laid down
standard uses of procedure for banking operations by temples and great land owners .
Sumerians , Babylonians, Hittites and Assyrians standardized the vales of goods in silver ,
copper, bronze or electrum .

2.4) 687 B.C


Gyges , king of Lydia, casted electrum ingots of identical shape and uniform weight. As an
official guarantee of values in 687 BC.
In Greece, the temples of Ephesus and Delphi were the biggest Banks .

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The earliest known public bank is said to be the bank of Venice which was established in 1157
AD .
Soon Venice and Genoa become the most important money market .
Modern banking originated in the 14th century in Barcelona.
In 1401 a German public bank are formed.
Bank of Genoa in 1407, by the 16th century , some more public banks were formed in Venice,
Milan, Amsterdam, Hamburg and Nuremberg .
Bank of Amsterdam was also founded in 1609 .
In 1690 , the bank of Hamburg came in to Existence .

2.5) Modern Banking


1700, the banks of England was not only issuing notes but also conducting accounts for
customer .
1 In 1946 the labor Government nationalized the bank of England.

2.6) Types of Banks :


1 Commercial Banks
2 Merchant Banks
3 Mortgage Banks
4 Saving Banks
5 Consumer Banks
6 Investment Banks
7 Development Banks
8 Cooperative Banks
9 Exempt Banks
10 Central Banks

1.Commercial Banks:

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The commercial banks receive from the general public which are repayable on demand upon
written orders of depositors. The commercial banks are also distinguished for providing short
term finance to trade , commerce and industry to enable these sector to expand their
productive activities .

2. Merchant banks :
Merchant banks are those which have been mainly financing the domestic and international
trade in united king Dom . During the late 18th and 19th century the trade between countries
was financed by bills of exchange by well reputed merchant houses for which they would
charge a commission for their service .

3.Saving Banks :
The basic purpose of these banks is to inculcate the habit of savings in the people . The
saving bank deposits are not repayable upon the written orders of the depositor but the
depositor or his agent has to appear personally at saving bank to make withdrawal , and for
this purpose he must present a pass book, a certificate of deposit or some similar documents
to prove his right to receive payment.

4. Mortgage Banks :
These banks mainly deal in loans for the acquisition or construction of real estate against the
security of mortgages . Saving and loans associations and farm _loan associations are some
of the well known forms of the mortgage banks .

5. Consumer Banks :
These banks provides finance for purchasing consumption goods for the use of the borrowers
. sales finance and credit unions are some of the popular forms of consumer banks

6. Investment Banks :

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The investment banks asset business houses and government bodies to raise money through
the sale of stocks and bonds for usually long term purposes .

7. Development Banks :
The banks have been established to provide long-term development finance to the trade,
commerce, and industry.

8. Cooperative Banks :
These are the banks established and registered as a cooperative venture to provide banking
facilities to the members of the cooperative .

9. Eximp Banks :
These are the banks which provide finance for promotion of import and exports to trade,
commerce and industry .The bank are contributing greatly toward the expansion of
international trade .
10. Central Banks :
Central banks occupy unique position in the banking structure of a country , because they
have been entrusted with the responsibility of controlling the money supply, interest rates and
financial market of the country for the purpose of economic development .

2.7) National Bank Act :


Was passed by the congress in 1863 , which required each new national bank to deposit
united states Bonds equal to one- third of its capital with comptroller of currency . National
notes equal to 90 % of the par or market value of the deposit bonds, whichever was lower .In
1913, the federal Reserve Act was passed ,and it reduced the requirement of the reserve for
the banks if they formed themselves into commercial banks .

2.8) Banking Act 1935:


Laid the foundation for the modern federal Reserve system by establishing the federal
open market operations and buying and selling of government securities . 1939, commercial

HAZARA UNIVERSITY MANSEHRA.


banking system was functioning satisfactorily with as many as 14,531 commercial banks in
the united states .
1940 to 1945, while the holding of Government securities by the banks increased to almost
four times . the post war period saw some recession in the banking system , but soon it was
over , and the banks regained their stature by 1962.

2.9) Banking In Pakistan :


There were 487 offices of scheduled banks in the territories now constituting Pakistan
The committee recommended that the Reserve Bank of India should continue to function in
Pakistan until 30th sep 1948 .
By 30th June 1948, the number of offices of scheduled banks in Pakistan declined from 487 to
only 195 .
Quaid-i-Azam Muhammad Ali Jinnah inaugurated the state bank of Pakistan on July
1st,1948 .
The first Pakistan notes were issued in Oct, 1948 in the denominations of Rs 5,10 and by
August 1949 the state Bank of Pakistan withdrew the Reserves Bank of India notes of the
values of Rs 125.02 cores with the help of the Pakistan notes .

HAZARA UNIVERSITY MANSEHRA.


CHAPTER 3

INTRODUCTION TO ISLAMIC BANKING

3.1 Islamic Finance


Islamic finance was practiced predominantly in the Muslim world throughout the middle Ages,
fostering trade and business activities with development of credit . In Spain and the
Mediterranean and Baltic states , Islamic merchants became indispensable middleman for trading
activities. In fact European financier and businessmen later adopted many concepts, techniques,
and instruments of Islamic finance. The financial system is founded on the absolute prohibition
of the payment or receipt of any predetermined. granted rate of return .this closes the door to the
concept of interest and precludes the use of debt- based instrument . The system encourages risk
sharing promotes entrepreneurship, discourages speculative behavior, and emphasizes the
sanctity of contracts .

3.2 The Islamic Economic System


One of the forms of capitalism, which has been flourishing in non Islamic societies , is the
interest based investment . There are normally two participant in such transaction . one is the
investor who provides capital on loan and other manager who run the business . The investor has
no concern whether the business run in to profit or loss he automatically get interest .

Distribution Of Wealth
The distribution of wealth is one of most important and controversial subject concerning the
economic life of man which has given birth to global revolution in today’s world and affected
every sphere of human activity from international policies down to the private life of the
individual .

3.3 The Importance Of The Economic Goals


Islam is opposed to monasticism, and views the economic activities of man quite lawful,

HAZARA UNIVERSITY MANSEHRA.


meritorious and sometimes even obligatory and necessary . it approves of the economic progress
of man , and consider lawful or righteous livelihood an obligation of the secondary order .
Notwithstanding all thus, it is no less truth that it does not consider economic activity to be the
basic problem of man .

3.4 Capitalist View / Islamic theory :

1 Capital :

Defined as “the produced means of production” a commodity which has already


undergone one process of human production, and is again being used as a means process of
production .

2 Labor :

That is to say exertions on part of man .

3 Land :

Defined as “natural resources” those thing which are being used as means of
production without having previously undergone my process of human production .

4 Entrepreneur Or Organization:

The fourth factor that brings together the other three factors, exploits them and bears
risk of profit and loss in production .

3.5) The Islamic View :

From Islamic point of view there are two kinds of people who have right to wealth .

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5 Those who have primary right that is to say, those who have a right to wealth directly in
consequence of participation in the production. In other words it is those very factors of
production which have taken a part in the process of producing some kind of wealth .
6 Those who have a secondary right, that is to say, those who have not taken a direct part in
the process of production, but it has been enjoined upon the producers to make them co-
sharers in their wealth .

3.6 Capital Can Be Invested In a Business Venture

1 Private Business
The man who invest capital may himself run the business without the help of any partners or
shareholders. In this case the return which he gets may be called profit from the legal or
popular point of view, but in economic terms, this reward would be made up of .
2 Profit in as much as capital has been invested .
3 Wages, as earning of management .

4 Partnership;
The second form of investment is that several persons may jointly invest capital, jointly
manage the business and jointly bear the risk of profit and loss. In the terminology of the
Fiqh, such a venture is called Shirkat-Aqd or Partnership in contract .

1 Co-operation Of Capital And Organization (Mudarabah)


The third form of investment is that one person may invest capital while another may manage
the business, and each may have a share in the in the profit . In the terminology of Fiqh, it is
called Mudarabah.The person who invest his capital Rabb-ul-Mal will get his share in the
form of profit while the person who has actually managed the business will get it in the form
of wages .

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3.7) Riba

2 Definition of Riba
The word Riba means excess, increase or addition, which correctly interpreted according to
Shariah terminology, implies any excess compensation without due consideration .
3 This definition of Riba is derived from Quran and is unanimously accepted by all Islamic
scholars
.
4 TYPES OF RIBA
There are two types of Riba .
1. Riba An Nasiyah
2 .Riba Al Fadl
Riba An Nasiyah :
Defined as excess, which result from predetermined interest which a lender receives
over and above the principle (Ras ul Maal).

1 Riba Al Fadl :
Defined as excess compensation without any consideration resulting from a sale of goods .
Riba Al Fadl will be covered in greater detail later .

3.8) Commercial Interest And Usury :


In 17th century two new technical terms of interest emerged after the established of banking
system.

2 Tijarti Sood :
Interest paid on loan taken for productive &profitable purposes .
3 Sarfi Sood :
Interest paid on loan taken for personal need and expenses .
Islamic banking:

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The interest free system envisages the gainful use of one’s saving with other on the basis of
profit and loss sharing in a defined manner . Effective from Jan 01, 1981, the Nationalized
commercial banks and now all other commercial banks in Pakistan have introduced the
profit and loss sharing (PLS) Deposit Scheme features of which as under .

4 PLS- Saving Accounts


5 PLS Term Deposit Accounts
6 Investment Of PLS Deposits
Musharikah Financing :
“A business relationship established under a contract by the mutual consent f parties for
sharing of profit and losses arising a joint enterprise venture”

Ijarah ( Leasing
Ijara as “an agreement whereby a person agrees to transfer the usufruct of a property to
another person for a mutually agreed rent, terms, and conditions while the ownership of the
corpus of the leased property remain vested in lesser .

Mudarabah Financing :
Mudarabah is a business in which a person participates with his money while the other
with his skill or efforts or both his skill and efforts . NIT Units and Mutual Funds are the
best example of Modaraba in Pakistan .

Types Of Mudarabah :
1 Al Mudarabah Al Muqayyadah
2 Al Mudarabah Al Mutlaqah

1. Al Mudarabah Al Muqayyadah :
Particular business or particular place for the the mudarib, in which case he shall
invest the money in the particular business or place . This is called Al Mudarabah Al

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Muqayyadah .

2. Al Mudarrabah Al Mutlaqah :
Rab-ul-maal gives full freedom to mudarib undertake whatever business he deems, fit
this is called Al Mudarabah Al Mutlaqah .

Uses Of Musharakah / Mudarabah :

1 Asset Side Financing :

1. Short / medium / long term financing


2. Project financing
3. Bridge financing
4. Export financing
5. Working capital
• Liability side Financing :
1. Current / Saving / Mahana Amdani / Investment .
2. Inter Bank Lending / borrowing .
3. Term Finance Certificate .
• Istisna :
“ Advances payment of goods to be manufactured assembled, built or constructed, or caused so
to be done, at an agreed price in which the goods with specifications are to be delivered at be
delivered at a specified future date and place .”
1 Salam :
(Advances payment against delivery) “ A sale whereby the seller agrees to supply specified
goods to a buyer by a future date in consideration of price paid in advances at a time specified in
the contract .”

HAZARA UNIVERSITY MANSEHRA.


CHAPTER 4

HISTORY OF MEEZAN BANK

4.1) MEEZAN BANK


To be a premier Islamic bank offering a one-stop shop for innovative value-added
product and services to our customers within the bounds of Shariah, while optimizing the stake
holder’s value through an organizational culture based on learning, fairness, respect for
individual enterprises and performances .

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 .

1999 :
The Shariat Appellate Bench of supreme court of Pakistan reject the appeal and direct all laws on
interest banking to cease but the Government set in a high level commission, task and
committees to institute and promotes Islamic banking .

2001 :
Muhammad Taqi Usmani as a chairmen established the shariah supervisory Board at Al Meezan
Investment Bank . State Bank of Pakistan set a criteria of Islamic commercial bank in private
sector and subsidiaries and stand alone branches by existing commercial banks to conduct
Islamic banking in the country .

2002 :
Al Meezan convert itself in to a full fledge Islamic commercial bank . The first Islamic banking
license is issued to the bank and is renamed Meezan Bank . President general Pervaz Musharraf

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Inaugurates the new Islamic commercial Bank at a formal ceremony in Karachi.

2003-----2009 :
2 Meezan Bank established itself a pioneer of Islamic Banking in Pakistan and
wide range of products are developed .
3 The state Bank establishes a dedicated Islamic banking development by
merging the Islamic economic division .
4 Meezan bank becomes the first customer of Islamic issuance by signing the
first memorandum of understanding MOU with pak Kuwait Takafal
company ltd .
5 Meezan banks becomes the first Islamic bank to introduce 8am to 8pm
banking at selected branches in Karachi
6 Meezan banks open up its 100th branch
7 With 166 branches in 40 cities across Pakistan. Works start on the
construction of Meezan Banks new Head Office building
.
4.2) Meezan Bank Vision and Missions:

1 Vision:
Established Islamic banking as banking of first choice to facilitate implementation of an
equitable economic system, providing a strong foundation for establishing a fair and just
society for mankind .

2 Mission statement :
To be a premier Islamic bank offering a one-stop shop for innovative value-added product
and services to our customers within the bounds of Shariah, while optimizing the stake
holder’s value through an organizational culture based on learning, fairness, respect for
individual enterprises and performances .

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4.3) Corporate Values :

3 Core Values :
Shariah Compliance, Integrity, Professionalism, Service Excellence, Social Responsibility .
4 Brand Personality :
A sober and established, strong, empathic, professional person; who is an extremely loyal
and dependable friend and business partner, and is committed to offering comprehensive
value-based Shariah compliant financial solutions .
5 Staff :
Committed, motivated and professionally trained employees who are empathic to their
customer ‘s needs .
Relationships : Are long tem with Meezan Bank . we recognize and our customer’s needs
and strive to ensure their fulfillment . All customers are treated professionally and in a
friendly
manner .
It is our endeavor to ensure that they receive efficient and timely service .
The Meezan Bank experience is a unique one .
Are long tem with Meezan Bank . we recognize and our customer’s needs and strive to
ensure their fulfillment . All customers are treated professionally and in a friendly
manner .
It is our endeavor to ensure that they receive efficient and timely se. The Meezan Bank
experience is a unique one .

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ORGANIZATION CHART

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4.4 BACKGROUND REVIEW :

AL Meezan Bank started its commercial operations in sept in 1997 and got its scheduled
commercial status in May 2002 Meezan Bank Limited .The soundness of the Bank , which is
normally measured by reference to the Tier 1 capital Adequacy Ratio, is above 80%. The
internationally acceptable standard, which is also the minimum requirement of the state Bank
of Pakistan, is 8%. MBL capital adequacy ratio placed the bank at the top of the industry .

Meezan Bank Limited is the first schedule Islamic bank in Pakistan, which has been
licensed by the state Bank of Pakistan to operate as an Islamic Commercial bank .The bank
pirates strictly under the principles of Islamic Shariah . our in dependable Shariah
Supervisory board, comprising of internationally renowned Islamic scholars, regularly
reviews the bank’s activities .

6 Justice (Retd) Muhammad Taqi Usmani (Pakistan) Chairman


7 Dr. Abdul Sattar Ghuddah (Suadia Arabia)
8 Shikh Essam M. Ishaq (Bahraim)
9 Dr. Muhammad Imran Usmani (Pakistan)

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CHAPTER 5

COMPREHENSIVE BUSINESS SOLUTIONS


Meezan Bank has one of the largest offering of Shariah driven products and services under one
roof .The Bank has developed an extraordinary research and development capability by
combining investment bankers, commercial bankers shariah scholars .The introduction of many
products which satisfy business needs and meets world-class service standards .

5.1 Corporate And Commercial Banking :


Murabaha – import & Export Facilities
Musharakah – guarantees
Diminishing Musharakah – Bill Discounting by using Dollar Salam or Murabah
Ijarah – Islamic Export refinance
Mudarabah
Istijrar
Istisna

Retail Banking :
Rupee Saving Account certificate of Islamic Investment
Current Account Monthly Mudarabah Certificate
Dollar Saving Account Dollar Mudarabah certificate
Karobari Munafa Account Meezan Amdan Certificate
Meezan Islamic Institution Deposit Account Meezan Providence Certificate

Consumer Financing :
Car Ijarah-Islamic Auto Finance
Easy Home – Islamic Housing Finance

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24/7 Banking :

ATM / Debit Card


ATM outlets
SMS Alerts
Special Banking :
Ladies Banking -8am to 8pm Banking
Meezan bank continue to educate the market by offering various business value propositions in a
transparent and open manner, in addition to addressing commonly asked questions about Islamic
Banking and how it differs from the conventional system .
Investment Banking & Sharaiah Advisory Services :
Syndication Structuring Sukuk Structuring
Privatization Mandates conventional Bank Conversion Advisory Services
Mergers & Acquisitions Islamic Banking Training

5.2 LARGEST BRANCH NETWORK


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 continuing success
story of Islamic Banking in Pakistan . All branches provides all the facilities to customers
Meezan Bank continue to build its vision The cities in which bank presently operates are as
follows .

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Southern Region Central Region Northern Region

Hyderabad Bahawalpur Abbottabad


Karachi Dera Ghazi Khan Dera Ismail khan
Nawbshah Faisalabad Peshawar
Quetta Gujranwala
Sukkur Kasur
Tando-Allah –Yar Islamabad

Southern Region Central Region Northern Region

Multan Rahim Yar Khan Mandi Bahauddin Swat


Sadiqabad Rawalpindi
Sargodha
Sahiwal
Sheikupura
Sialkot

5.3) FINANCIAL BACKING:

Shareholding structure % Rs.in million


Pakistan Kuwait Investment Co 30 1,478
Noor Kuwait Investment Co 46 2,242
Islamic Development Bank, Jeddah 9 459
Others 15 747
Paid up capital 100 4,926

5.4) SERVICE QUALITY :

Meezan Bank’s service mission is :

HAZARA UNIVERSITY MANSEHRA.


“ To develop a committed service culture which ensures the consistent delivery of our products
and services, within the highest quality service parameters, promoting Islamic values and
ensuring recognition and a quality banking experience to our customers”.

5.5) QUAID”S CONCEPT OF ISLAMIC BANKING:

“We must work our sestiny in our own way and present to the world an economic system based
on true Islamic concept of equality of manhood and social justice”.

5.6) RIBA—FREE BANKING OBJECTIVES :

2 To provide Shariah- compliant product and services as a feasible and


3 valuable alternative to conventional interest based finance.
4 To continue exploring developing and delivering new products and
5 Services that fulfill all banking needs of our customers
6 To achieve sustainable growth, maximum market share, and high
7 Profitability in all areas of banking and other affiliated
8 Islamic financial services .
9 To maintain absolute world class service excellence, with a dedicated
10 Focus on value and recognition for our customers.
11 To build and sustain a high performance culture in accordance with

12 Islamic values and Shariah principles.


13 To effectively manage meezan Bank’s portfolio of businesses to
14 Achieve strong and sustainable return to our depositors
15 And shareholders.

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CHAPTER 6

MEEZAN TEAM
The business segments of the banks are :
Corporate Banking
Investment Banking

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Commercial Banking
Treasury & Financial Institutions
Asset Management

Corporate Banking :
Corporate Banking plays an important role in the growth of the bank’s financing
activities and profitability. During the year Meezan Bank maintained a cautions approach in
booking new assets and focused on reducing large exposures to a single obligor so as to mitigate
concentration of risk .
Corporate Banking successfully introduced a new product called Tijarah this product is
designed to allow customers to raise funds for financing of stocks of finished goods .Istisna
which is introduced in 2008 was very successfully and extensively deployed across the Meezan
bank network .

Investment Banking :
The investment banking department was set-up in 2006 and focuses primarily on the
following activities :
1Syndicated & Structured finance
2Project Finance
3Corporate & Financial Advisory Services
Investment banking has developed unique Shariah structuring capability in a very short period of
time and is actively involved in innovative product development initiatives required to meet the
long term project finance needs of customers .

Commercial Banking :
Commercial Banking target the middle market . This market represent the back-bone of
Pakistan ‘s economy and has high growth potential. Since the inception of this department in
2005, Meezan Bank has maintained a cautious and well balanced approach in booking
commercial Banking assets as a result of which portfolio assets quality has been very good –

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evidenced by timely payment of all obligations .Customers with a turnover of less than Rs.800
million in this business segment, that includes small and
medium scale enterprises (SME) . The (SME) target with an annual turnover of Rs. 300 million
and total financing is 75 million .

Consumer Finance :
Consumer Finance is responsible for managing the retail assets products of auto finance----Car
Ijarah and house mortgage ---- Easy Home . With pioneering and prime- mover initiatives in
both products, the department has now established itself on sound business infrastructures,
penetrated key market segments, and built recognizable brand identities in not only the Islamic
but the overall banking sector .
Car Ijarah application is usually processed within two days, while the document intensive and
complex process of Easy Home – home mortgage based on the concept of Diminishing
Musharakah is available in a record setting average of 15 days .

Auto Finance :
The auto finance business has a 7 years track record and its portfolio now stands at Rs.4,356
million comprised of over 9000 active vehicle contracts. Growth has been steady during this
period, within depressed and uncertain economic conditions
.
Housing finance :
The nation’s first Islamic Housing Finance facility .Meezan Bank’s Easy Home completed its
5th year in December 2009 and consolidated its market position by undertaking rs. 1.5 billion
new disbursement during the year.

Branch Network & Deposits :


Meezan Bank has maintained an aggressive branch expansion policy and added 66 new
branches and sub branches to its network, bringing the total network to 166 branches in 40 cities
across country. The Bank’s Deposit portfolio grew to Rs. 70.234 billion during the year .

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6.1 Treasury & Financial Institutions :
2009 was an eventful year .Rising interest rates, coupled with a freeze in the local stock
market for more than three months resulted in a severe loss of confidence and led to a liquidity
crunch in the last quarter .
Meezan Bank remained unaffected by this crises , rather becoming a formidable player in the
local money market , placing funds with major banks and non banking financial institutions
using Shariah – approved structures. Treasury was not only able to deploy its excess liquidity,
but also benefit from the SLR eligible security that was in its custody for the period .

6.2 Economic Overview:


2009 was a tumultuous year of the world financial sector , starting with Sub-prime mortgage
crisis in US that eventually led to the collapse of the financial giant Lehman Brothers and started
the biggest downturn faced by the financial industry since the Grat Depression of 1992. Relative
to this cataclysmic crisis faced by the international financial markets, the Pakistan banking sector
has remained relatively stable.
They external current account deficit grew to US$ 14 billion, equivalent to 8.4% of GDP
which is approximately three and a half percentage points higher than the initial projection for
the year 2009 and more than twice of last year’s level in absoluter terms. As a result, foreign
exchange reserve dropped sharply and the Pak Rupee depreciated buy over 30% during the year.
Initial results are satisfactory and gave stabilized the commodities, has provided significant relief
to the economy, as a result of which foreign exchange reserves are also now stable and inflation,
although still high, has also decreased to levels of around 20%

Operating Results
Despite the gloomy economic outlook, Meezan continued with its branch expansion
strategy, By the Grace of Allah, the Bank now has 166 branches located in 40 cities in Pakistan,
an addition of 66 branches including 35 sub branches during 2009, This significant achievement
of establishing an extensive network within a short span of 7 years enabled Meezan Bank to
maintain its leading position an among the Islamic Banks operating in Pakistan. As a result the

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Bank was able to record strong growth in deposits, that increased by 29%-compared to the
banking sector as whole that grew by approximately 6% during the year. A grew financial
highlights are given below:
Rs . in million
2009 2008 Growth in %

Deposits 70,234 54,582 29


Financing and investments 54,055 45,112 20
Trade Business 93,379 73,123 28
Branches 166 100 66

CHAPTER 7

WHAT I HAVE LEARNED AS AN INTERNEE

It was very good experience of internship at Meezan Bank . I was introduced to different aspect
of money , banking and finance and found this field very interesting .This report comprises my

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eight weeks of internship at Meezan Bank . Now first of all I described the job description of the
branch employees and what I have learned from different department .

7.1 1st week


I started my first day of internship with the introduction of bank employees and
with introduction of bank departments. In This week just know how work done in the various
departments in the bank Like:

• Finance
• Marketing
• IT
• Operation Management etc

• I knew about the purpose of the bank and the functions of the bank and judge the
practical performance of the departments.
• I started my second day of internship with the lecture of the bank officer. He told us
about Riba and its types:

Riba al Nasiah
Riba al Fadl

• Then he told about important element Basic Mode of Financing in which Mudaraba and
Musharaka lies.
• I learnt about characteristics and procedure of Mudaraba and Musharaka.
• Then I moved to Accounts Department for learning something new.
• I learnt about IBTDR (Islamic Bank Term Deposit Receipts) and knew what its meaning
and functions.
• Basically IBTDR involves Accounts:
• Saving Deposit accounts

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• Term Deposit accounts
• I knew about different types of saving accounts like MBA (Meezan Bachat Account),
KMA (karobari Munafa Account), COII, MMC, MAC and etc. these are MUDARABA
based deposits products.
• I learnt about the profit rates of the accounts and procedures to open these accounts.
I learnt about also CDR (Call Deposit Receipts) and its procedure and knew its purpose and how
to fill it an proceed.

7.2 2nd & 3rd week

I started this week with the lectures of the Bank officer about bank and its performance. I learnt
the actual means of practical work in the bank. First of all I started my work in the ACCOUNT
OPPENING DEPARTMENT of the bank in which I learnt how an account can be opened in a
bank, which documents are necessary to attach it with the account opening form and how many
kinds of account are used in bank like

• Single
• Joint personal
• Sole proprietorship

The requirement for opening these types of a/c are


• Select the nature of a/c
• Attested photo of applicant
• Then the permanent address
• NIC copy.
• occupation
• The reference of any person who has already the a/c or any respected personality
• The other information related to the a/c filled on choice of applicant.

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• The signatures are done on form as well as on the specimen signature card from
where the signature will be scanned as a record in computer

 Partnership
 Limited company
 Trusts
 Clubs
 Association etc.

The requirement for opening these types of a/c are

7.2.1 For partnership

• Attested photocopy of CNIC of all partners


• Attested copy of Partnership Deed duly signed by all partners of firm.
• Attested copy of Registration Certificate with register of Firm. In case the partnership is
unregistered this fact should be clearly mentioned on the a/c opening form
• Authority letter, in original, in favor of the person authorized to operate on the a/c of the
firm.

7.2.2 For Joint Stock Company

• Resolution of Board of Directors for opening of a/c specifying the person(s) authorized to
operate the company a/c

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• Memorandum and articles of association.
• Certificate of incorporation
• Certificate of Commencement of Business
• Attested photocopies of CNIC of all directors
• List of directors on Form 29 issued by the Registrar Joint Stock Company

7.2.3 For Clubs, societies and Associations

• Certificate copies of Certificate of registration By- law / rules &regulations


• Resolution of the Governing Body / Executive Committee for opening of a/c authorized
the person to operate the a/c and attested copy of the CNIC of the authorized person(s)
• As understanding signed by all authorized persons on behalf of the institute mentioning
that when any change takes place in the persons authorized to operate on the a/c, the banker will
be informed immediately.

7.2.4 For Agents a/c

• Certificate of power of Attorney


• Attested photocopy of CNIC of the agent.

7.2.5 Trusts a/c

• Attested copy of Certificate of Registration


• Attested photocopy of CNIC of all the trustees
• Certified copy of instrument of Trust.

"The most difficult task related to bank for a common citizen is to open an a/c in any bank" said
Sir Tanveer.

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Then the two applicant forms are filled in front of me. It took too much time to gather the
information from applicant.

• I filled up some forms for practical practices and knew about the nature of the form.

• I practically performed how letter of thanks attached to the forms and send to the
customer.
• I learnt about the different types of stamps, which are necessary for the account
opening and learnt about the use of the stamps at the right place.
• I learnt how to attach signature specimen card to the account opening form for bank
record.

7.3 4th Week

I started my week of internship with the daily lectures of the bank officer (Mr. Subtain [OGII])
who is the organizer of internship program for internees in meezan bank.

• I learnt about the role of STATE BANK OF PAKISTAN in Pakistan’s economy from the
lecture and know about the prudential regulations briefly not explanatory which are
Regulation M-1 Know Your Customer (KYC)
Regulation M-2 Anti-Money Laundering Measures
Regulation M-3 Record Retention
Regulation M-4 Correspondent Banking
Regulation M-5 Suspicious Transactions

• In account opening department I learnt the use of ATM card and learnt how to fill ATM
form.

• Then I know how to receipts are filled.


• I learnt how on line payments are made and how cash or receipts are transferred.

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• First of all I learnt about ATM PIN ISSUANCE procedure and knew why it is necessary
for customer or account holder.
• Then he showed us module in computer that how he enters the data of customer and how
it proceeds.

• After proceeding computer shows a pin number that is issued for that customer who filled
the form for ATM. And this work is done means pin issuance by Head Office.

Then I learnt about the term ATM Cash Replenish. He told us that how it works and what its
procedure and why it is used.

7.4 5th Week

I started my working day with some work, which has to complete from the previous week with
account opening forms.
• I learnt about inward and out ward clearing and learnt how the transactions are made.
• I learnt how to write the inward clearing cheques in the transaction record book.
• I learnt to deduct the return cheques from the added amount of all cheques.
• I learnt the entry of pay orders in the record book.

• Know how of employees.

THEN

I started my work again in Accounts Department. The officer also does/handle the other work
Like REMITTANCE department.

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• I learnt about the PAY ORDER and DEMAND DRAFT. He told us the difference of Pay
Order and DD.
• I learnt also about the procedure of it. I also saw the Pay Order cheque and knew about its
attributes.
• But DD is not made in Sahiwal Branch. But sometimes if necessary then they made it.
But mostly Pay Orders are made and send it to other cities also. Only Meezan Bank
provide this opportunity of Pay Order to send outside the city also.
• I also learnt about the facility of LOCKERS and its functions.
• Lockers have 3 types of it:

Small Size Lockers


Medium Size Lockers
Large Size Lockers

• The officer told us its functions and charges and I knew about that how can hold locker
and which documents are required for getting the lockers. Lockers are the fire proof.

I attended the weekly meeting of bank manager with employees and attended the lecture
about modern way of banking delivered by the bank manager for the success if the
branch’s business.

7.5 6th & 7th week

I started my day with the daily lecture and general discussion about banking and scope of
banking in Pakistan in coming years.

• I revised all practices according to account opening departments and cleared my all
confusion related to that department trough got work in that field.

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• I gave my feedback as a internee about the environment of the bank and about my
work experience in that department
• I started my day with the daily lecture about Bank.

• After that I went to ACCOUNTS DEPARTMENT and started my work. First of all I
cleared my all confusions about the previous topics then I started to learn further.
• I learnt about FTT (Foreign Telegraphy Transfer) also known as SWIFT Message.
• In it I knew that how can get and send money from and to foreign countries.
• He told us its procedure and function. I knew about how the message can create and
what sources are used for it.
• Then I learnt about SMS ALERTS. He told us its function and I knew about that
what information is required for its activation and what information it gives to
customer through SMS.
• I learnt what are the Local Posting and Online Transferring and how it is done.
• Then I learnt what Stop Payment is and how it is performing and what its terms and
conditions.
• I knew about what Account Closing is and what its procedures to close it and what
charges are required for it.
• Then I saw the module of daily Accounts and Expense Entries posting. And knew
about the reason of entering it.

7.6 8th Week

I started my 8th week of internship with the lecture of the Bank Manager who is Mr. Shoaib, the
lecture was about Islamic banking and its differences in convention banking.

• I knew about the Shariah and the sources of Islamic Shariah.

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• Then I learnt about Islamic Banking and knew what its actual meaning.
• In Islamic Banking a term Riba Free is used which means “Avoid Interest”.

• Islamic Banking is a system of Trade where Goods and Services are sold and Capital is
invested to earn Halal profit by taking Risk.
• Interest Free Banking is subset of Islamic Banking concept representing a number of
Banking Operations which avoid Interest.
• I learnt about Convention Banking which is based on Pricing money and earning Interest.
• Apparently Islamic and Convention Banking may look same but Islamic Banking is
permissible means “Allah has permitted trade and forbidden Riba”.
• I learnt about difference b/w Islamic and Convention Banking up to some extent.
• Then I moved to next department that was ACCOUNTS DEPRTMENT.(with the hold of
IT deptt, Remittance deptt)
• I started my work in Accounts Department.
• The Officer who is Mr. Faysal gave the overview of his working that he does.
• I learnt about cheques how to fill them and knew about its functions.
• I learnt that in banking cheque is known as Dr. Instrument.
• Then I learnt about cross cheque and cross cheque has two types:

Simple crossing
Special crossing

• I knew also another type of cheque that is Order Cheque and its purpose and function.
That day I learnt about cheque procedure and its use in different ways.

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HAZARA UNIVERSITY MANSEHRA.
Chapter 8
FINANCIAL ANALYSIS

8.1 LIQUIDITY RATIO


It is the relationship between the current assets and current liabilities of a concern.

Current Ratio = Current Assets/Current Liabilities

Year 2006 2007 2008 2009


Current Assets 6812761 10212269 9373577 7108685
Current liabilities 3242446 4848440 3607766 5065513
Current Ratio 2.1 2.10 2.59 1.4

Liquidity Current Ratio


3
2.59
2 2.1 2.1
1 1.4

0
1 2 3 4

2006 2007 2008 2009

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Solvency Ratio

Debt equity Ratio = Debt liabilities/ Net assets

Year 2006 2007 2008 2009


Debt liabilities 24408794 36826824 57864137 74325579
Net assets 6812761 10212269 5706656 5974978
Debt equity Ratio 3.58 3.60 10.13 12.4

Debt Equity Ratio

20

10
0
1 2 3 4

Series1 3.58 3.6 10.13 12.4


2006 2007 2008 2009

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Profitability ratio

Year 2006 2007 2008 2009


Net Profit margin 18.5 17.80 16.27 8.27
Gross profit margin 43.83 45.86 46.39 54.61
Return on capital .018 0.0020 .0022 .0024
employed

Profitability ratio

0.02

0.01
0
1 2 3 4

Series1 0.018 0.002 0.0022 0.0024


2006 2007 2008 2009

Return on capital employed =(PBIT / Capital employed)*100


PBIT = Core banking income before provision

Capital Employed = Equity + Long term liabilities

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2009 6341 + 11025091 = 11031432
2008 5720 + 57864137 = 57869857
2007 4763 + 36826824 = 36831587
2006 3821 + 24408794 = 24412615

Investment Ratio

Year 2006 2007 2008 2009


Earning Per Share 1.16 1.88 1.96 1.26
Price Earning Ratio 15.92 10.51 15.2 17.03
Dividend Per Share 16 10 20 8.6

Earning Per Share


4

0
1 2 3 4

Series1 1.16 1.88 1.96 1.26


2006 2007 2008 2009

In 2008the per share earning is good but it decreases in 2009 1.96 to 1.26 so the management has
to give attention here.

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Price Earning Ratio

20
15.92 15.2 17.03
10 10.51

0
1 2 3 4

Series1 15.92 10.51 15.2 17.03


2006 2007 2008 2009

Here the management has recovered their position and improved.

Dividend Per Share

25
20 20
15 16
10 10 8.6
5
0
1 2 3 4

2006 2007 2008 2009

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The dividend has decreased 20 to 8.6 R.s. This is very bad for company’s good will or stock
market. Management has to focus over it other wise the company has to bear more loss in future.

Capital Adequacy Ratio (Capital to Risk (Weighted) Assets Ratio)

Year 2006 2007 2008 2009


Average Ratio 1.67 1.57 1.70 .82
Average Equity 16.70 15.64 10.30 18.39

Average Ratio
2
1.67 1.57 1.7
1.5
1
0.82
0.5
0
1 2 3 4

2006 2007 2008 2009

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Average Equity

20 18.39
15 16.7 15.64
10 10.3
5
0
1 2 3 4

2006 2007 2008 2009

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CHAPTER 9

SWOT ANALYSIS

9.1 Strengths
• First exclusive Islamic bank.
• The largest Islamic Bank in Pakistan with a network of over 204 branches in 54 cities.
And ending this year they have increase his branches in Pakistan to 280 branches.
• Strong growth of its Islamic banking SBU.

• The members of the Shariah Supervisory Board of Meezan Bank are Internationally-
renowned scholars, serving on the boards of many Islamic banks operating in different
countries.

• Meezan Providence Certificate is a long-term investment certificate specially designed to


cater to the needs of corporate and business concerns for purposes of investing their
Provident, Pension and Gratuity Funds. As any prudent investor, your main concerns
would be total security along with the best returns possible, especially as these funds are
a trust from your employees and one that bears an important responsibility.

• Karachi, August 20, 2008: Meezan Bank, the largest Islamic Bank in Pakistan has been
conferred the Best Islamic Bank Award by Rawalpindi Chamber of Commerce and
Industry.

• The Chief Minister of Punjab Mr. Shahbaz Sharif bestowed this award to Mr. Saleem
Khan Regional Manger - North, Meezan Bank at 21st RCCI achievement awards
ceremony held at the Convention Center in Islamabad.
• Dedicated and professional staff
• Shariah board of renowned scholars

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• Healthy working environment
• Strong shareholding

9.2 Weaknesses

• High charges for different activities such as online or Demand Draft as compared to
competitors.

• lack of promotions and advertising of their products and services.

• Lengthy & extensive documentation

• Centralized procedures making process slow

• Weak marketing strategy, Target market not identified

• Offering fewer services than the competitors

• Risk Averse, approach of Head office.

• The Islamic economic system is not something that can work in isolation of the geo-
political and legislative system, as well as, and more importantly the society's behaviors
towards the injunctions of Islamic Shariah in personal and collective matters.
Accordingly, one can easily imagine that in an economy whereby most of the
businessmen are not honest in fairly presenting the financial statements of their
businesses, how difficult it is to introduce a profit-and-loss sharing based financial
solution.

• Meezan Bank Limited has no Credit card facility

• Restricted Shariah based policies

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9.3 Opportunities

• House financing sector can be targeted to maximize the profit.

• Growing demand of Islamic financial product and services.

• Venturing into Islamic groups out side the countries as opportunity to expand business in
UAE and Golf states. i-e financial institutions.

• Coming up with. Products for the SME to targeting the medium level customers.

• Doing business with companies having Islamic mindset. I-e Islamic financial Institutions.

• Increase branch network within the country.

9.4 Threats

• New competitors setting up their Islamic banking sections and they have the
infrastructure, skill, ability, resources & attitude to capture the market more than the
Meezan bank.

• High Interest Rate from SBP

• SBP has not special policy regarding Islamic Banking.

• Disassociation of Maulana Taqi Usmani from the Shariah advisory board of Meezan
Bank.

• Govt. policies are mostly for conventional banking system not for specially designed for
Islamic banking.

• Change in Government's attitude towards Islamic banking.

• Fears on the credibility of Islamic banking ethical compliance and monitoring systems.

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Reviewing this SWOT analysis from time to time would help evaluate the bank's position. It
would help the management in comparing their strengths of the past with those of the present and
to what extent the management has been able to overcome the weaknesses.

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HAZARA UNIVERSITY MANSEHRA.
CHAPTER 10

CONCLUSIONS

One of the most important aims of the student life is to express him / her correctly and
adequately. This was believed in my mind when I first decided to go to Islamic Meezan Bank
Limited to complete my internship program.

The organization has been not growing both in size and profit for past few years and
but repute in the market is good. The employee turnover is very high which they have to cut
down as they are losing a number of good trained employees due to its poor policy. The year
2008 is expected to offer increased competition in the secured assets business as more Islamic
banks are in the market. With their focused strategy and product development initiatives planned
for the year, Meezan Bank is strongly positioned to meet these challenges. The bank has very
well repute in the market. Overall bank is going well and doing a good business but there are few
problems for that I have tried to give few recommendations that might help company to improve.
So finally this internship program has helped me a lot in gaining practical knowledge of job that
will help me in the practical life once I complete my BBA.

HAZARA UNIVERSITY MANSEHRA.


CHAPTER 11

RECOMMENDATIONS

On the basis of my experience with bank during the course of internship, I recommend following
suggestions:

11.1 PERFORMANCE APPRAISAL:

In the case of performance appraisal, management should evaluate the performance of the
employees on merit and recommend their increments and promotions only on the basis of real
performance. Employees should be treated unbiased and appraisal should be performance based
not favoritism and likeness based. This not only appreciates the employee but also improves his
work and satisfaction, his practice will surely encourage and motivate the employees for
improving their individual performances, which will lead towards overall improve in the
situation.

11.2 PROPER JOB ROTATION:

Employees should be rotated after certain periods in order to enhance their capabilities and make
them able to compete in the changing environment of the market. In this way, they will feel
interested during working in different departments. The best way to improve employee’s
performance is to revolve them within organization often a specified period of time. They will
not only have leaning and training opportunities butt also they feel attractiveness in doing new
job and his performance improves.

HAZARA UNIVERSITY MANSEHRA.


11.3 FAIR BENEFITS:

Although most of the employees are unsatisfied but even then turnover rate is low. This is due to
the reason that some of them are on contractual bases so that they cannot avail market offered
opportunities. On the other side they may not be getting better opportunities. Although the return
is low for them yet it is reasonable, that’s why they are still hero. They should be awarded with
more benefits to improve their performance and overall productivity, as satisfaction of internal
customers leads towards satisfaction of external employees.

11.4 OVER LOAD OF WORK:

The problem, which I have noticed faced by the employees in absence of an employee, can be
removed by hiring two employees in each department. In absence of any of the employee other
will be able to do whole work and employee from other department have not to interfere in this
department This will decrease over load of work.
Problem of shortage of employees can also be removed by adopting the above- mentioned
recommendation.

11.5 CREDIBILITY OF CUSTMERS:

Cheques, which are drawn on Meezan Bank branch and returned unpaid in clearing, are not
reflected in the statement of account of the customers. These cheques must be reflected in the
accounts so that credibility of the customers may be assessed.

11.6 CUSTOMER RELATIONSHIP:

Knowing the customers and their needs is the key to business success. By attitude the manager
can improve the relationship with the customers. By having the understanding, what a customer
wants, the manager can improve the relationship with the customers.

HAZARA UNIVERSITY MANSEHRA.


Meezan Bank should understand that the commitment to satisfy customer’s needs must be
fulfilled within a professional and ethical framework. They should observe a culture of high
ethical standards, based upon development of right attitude.
Although Meezan Bank has been improving its corporate behavior, even then they should
continue their effort for better corporate behavior. There is a need of improving customer
relations in Meezan Bank. For attitude improvement special courses should be arranged under
specialized teachers, through lectures, seminars and other interactive techniques. It will cost the
bank but will be more profitable for the bank in the long run.
11.7 EMPOWERMENT OF EMPLOYEES:

Commitment is a function of empowerment down the line, therefore, the future of Meezan Bank
lies in the fact that they should remain committed and necessary empowerment should flow
regularly to lower levels of hierarchy, so that the performance delivery is made more flexible.
With the empowerment of lower level employees they will feel secure in the organization and
they will work with devotion for the betterment of the organization.

11.8 MARKETING CULTURE:

The employees should be given special training for marketing. Proper action should be taken for
marketing so that the increased sale of different products will result in increase of the profit of
the bank. The employees of the bank should be trained with the basic concepts of the marketing
under the guidance of the experts.

11.9 HEALTHY ACTIVITIES:

There is lack of healthy and entertainment activities like excursions on weekend, parties and
other important days, celebration in their tidy life. Such activities should be encouraged at once
in a month.

FINDINGS:-

HAZARA UNIVERSITY MANSEHRA.


Meezan Bank Limited provides so much facilities to their customers but some problems also
arise with these facilities.
1) Space of the bank is very limited.
2) Generator is available but its not working due to which the problem of light arise and due
to which the working of the bank stop and customer faced so much problems.
3) UPS is also available but it work hardly for 2 min’s.
4) Parking area is not available for both customers and employees.
5) Water problems.
SUGGESTION
1) There should be a proper waiting room for customers.
2) As it is an Online Banking System if there is no light everything is shutdown so they
should maintain their electric problem.
3) There should be proper parking system for employees and customer.
4) As it is well know organization a minor problem like availability of drinking water
should not be there.

HAZARA UNIVERSITY MANSEHRA.


References:
• www.meezanbank.com
• vww.encarta.com
• http://wvvxv.historyworld.net
•MeezanBank
• Meezan Bank Annual Report 2009

HAZARA UNIVERSITY MANSEHRA.


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HAZARA UNIVERSITY MANSEHRA.


HAZARA UNIVERSITY MANSEHRA.