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DEDICATION

Dedicated to my Loving Parents, Brothers,

respected teachers and Supporting Friends

who always helped out?

In times of woe and Distress

&

Taught me to follow the Path of Truth,

Justice, Honesty and Sincerity

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ACKNOWLEDGEMENTS
To begin with all praises are for the Almighty Allah,
to whom I am most humbly and meekly grateful for
giving us the opportunity and courage to undertake
this work and carry it successfully to completion. All
respects for this Holy Prophet HAZRAT MUHAMMAD
(P.U.B.H) who enlighten our minds to recognize
ourselves.
It is great pleasure for me to acknowledge our
deepest sense of gratitude and humble thanks to my
worthy branch manager “Mr. IRFAN AHMED
ARAIN” for being kind enough to extend his
baseline guidance in the completion of this
internship program.
I also pay special thanks to all staff of Meezan
BANK LTD BIN QASIM BRANCH for their special
help and co-operation during the preparation of the
report. Especially thanks these persons.

Mr. IRFAN AHMED ARAIN (B.M)


Mr. ANWAR SAEED (O.M)
Mr. SARFARAZ ALI MALIK
Mr. JAMIL-UR-REHMAN
Mrs. SHENEELA NEELUM

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Dedicated to Islamic Banking
Meezan Bank is Pakistan's first scheduled Islamic
commercial bank, and operates strictly
Under the principles of Islamic Shariah

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EXECUTIVE SUMMARY

Meezan is a publicly listed company first


incorporated on January 27, 1997. It started operations as an
investment bank in August of the same year. In January,
2002 in an historic initiative, Meezan Bank was granted the
nation's first full-fledged commercial banking license
dedicated to Islamic Banking, by the State Bank of
Pakistan. .MBL is incorporated in Pakistan and engaged in
Islamic and commercial banking. It is listed on all the stocks
exchanges in Pakistan. The bank’s registered office and
principal office are situated The adoption of new technology
and offering new products has made. MBL one of the best
domestic bank of Pakistan.

According to the department internship program I completed


my eight weeks internship at MBL BIN QASIM BRANCH.

General banking department is concerned with daily


operation of the branch. This department is divided into four
sections which are Cash section, Clearing section,
Remittance section and fixed deposit section. Cash section
performs cash related function like receipt of cash, payment
of cash and collection of utility bills. Clearing section
performs the clearing of cheques for collection. Remittance
section performs transferring of funds from one branch to
another or from one account to another.

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Credit department issues short term and long-term loan.
MBL offer two types of loans or finances, fund based finances
and non-fund based finances. Funds based finances include
running finance, demand finance, cash finance and staff
finance. Non fund base finance include letter of credit and
guarantees like performance guarantees, mobilization
guarantees shipping guarantees, bid bonds and security
deposit guarantees.

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INTRODUCTION

A bank is a financial institution that accepts deposits and


channels those deposits into lending activities. Banks
primarily provide financial services to customers while
enriching investors.

HISTORY OF ISLAMIC BANKING IN PAKISTAN

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

1949
The Objectives Resolution was adopted by the first
Constituent Assembly based on the ideology of a sovereign
Islamic state. This was the first step in the conception
towards Pakistan’s Constitution.

1956

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The first Constitution defined Islam as State Religion and all
laws to be according to the injunction of the Quran and
Sunnah.

1962
The establishment of Council of Islamic Ideology (CII) was
followed by the conception of the second constitution of
Pakistan.

1973

The third constitution of Pakistan was passed allowing


comprehensive legislation on Islamic principles and
establishment of Federal Shariat Court.

1980
CII presents report on the elimination of Interest genuinely
considered to be the first major comprehensive work in the
world undertaken on Islamic banking and finance.
In this period President Zia ul Haq imposed profit and loss
sharing accounts as a compulsion instead of interest bearing
accounts, he also started deduction of Zakat from bank
accounts in Islamic prospect.
1985

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

1991

Procedure adopted by banks in 1985 was declared unIslamic


by the Federal Shariat Court (FSC). The Government and
some banks/DFIs made appeals to the Shariat Appellate
Bench (SAB) of the Supreme Court of Pakistan.

In 1991 thsese two new Islamic banks started their


operations in Pakistan.

1- ALBARAKA ISLAMIC BANK.

&

2- AL FAISAL ISLAMIC BANK.

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INTRODUCTION TO MEEZAN BANK LTD

MEEZAN was established as an Islamic Investment


Bank in 1997 as “AL MEEZAN INVESTMENT BANK LTD”.
After the successful completion and great struggle First
Islamic Commercial Bank’s license was awarded to Al Meezan
Investment Bank in year 2002, to start the commercial
banking facilities they bought the local operations of “Socite
General” (French Bank) 03 branches and started the
commercial Islamic banking in the country.

Meezan Bank stands today at a noteworthy point along


the evolution of Islamic Banking in Pakistan. The banking
sector is showing a significant paradigm shift away from
traditional means of business and is catering to an
increasingly astute and demanding financial consumer who is
also becoming keenly aware of Islamic Banking. Meezan Bank
bears the critical responsibility of leading the way forward in
establishing a stable and dynamic Islamic Banking system
replete with dynamic and cutting-edge products and services.

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The Bank has made fundamental and significant
progress forward, and in doing so has established a strong
and credible management team comprised of experienced
professionals, which have achieved a strong balance sheet
with excellent operating profitability, including a capital
adequacy ratio that places the Bank at the top of the industry,
a long-term entity rating of A+, and a short-term entity rating
of A1+, the highest short-term rating.

The Bank has a rapidly growing branch network


across all major cities nation-wide. Providing our customers
accessibility and convenience is a prime target, within an
atmosphere and culture of dedicated service and recognition
of their needs.

We believe in adding value to our customers' lives and


businesses through dynamic and competitive products and
services that fulfill their needs while conforming completely
to the dictate of Shariah. At the same time, we endeavor to
deliver competitive risk adjusted returns to our stakeholders

The dedicated Customer Services Officer in banking area will


provide consultancy for a full range of our Halal banking
services including, 9am to 5pm Online Banking, Term
Certificates, Current & Saving Accounts, Consumer Financing
and 24/7 banking services.

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Meezan's Branch Network
ALHAMDOLILLAH, Meezan Bank has established 201 branches
in 54 cities across Pakistan. This is a milestone that is not only
the success story of Meezan Bank but also the continuing
success story of Islamic Banking in Pakistan. With this
extensive network, our existing and potential customers are
now closer than ever in attaining Islamic Banking at their
doorstep. All branches provide real time online banking
facilities to customers.
As the first and largest dedicated Islamic Bank in Pakistan,
Meezan Bank team continues to build on its Vision of
establishing "Islamic Banking the Banking of First Choice".
One of the key objectives of the Bank is to have its footprint
strategically placed throughout the country enabling the
public to avail the benefits of Shariah Compliant Banking in
their neighborhood.
The Bank is currently segmented into three Regions of
Pakistan.
1. SOUTHERN REGION 2.CENTRAL REGION 3.NORTHERN REGION

OTHER ACHIEVEMENTS:
Best Islamic Bank 2005 (Islamic Finance News)
Best provider of Islamic financial services year 2005

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

Mission Statement
To be a premier Islamic bank, offering a one-stop shop for
innovative value added products and services to our
customers within the bounds of Shariah, while optimizing the
stakeholders value through an organizational culture based
on learning, fairness, respect for individual enterprise and
performance.

Service Quality Mission

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.

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SHAREHOLDING STRUCTURE

SHAREHOLDING Rs. In Millions


%

Pakistan Kuwait Investment


Company (Pvt.) Ltd 1,134 30
Shamil Bank of Bahrain E.C 527 26
Islamic Development Bank Jeddah 190 09
Noor Financial Investment Co. 134 16
Others 396 19

Paid up capital 3780


100

Shariah Board
The members of the Shariah Board of Meezan Bank are
Internationally-renown scholars, serving on the boards of
many Islamic banks operating in different countries.
The members of the Shariah Board are:
 Justice (Retd.) Muhammad Taqi Usmani
 Dr. Abdul Sattar Abu Ghuddah
 Sheikh Essam M. Ishaq

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 Dr. Muhammad Imran Ashraf Usmani - Shariah Advisor

Board of Directors
 H. E. Sheikh Ebrahim Bin Khalifa Al-Khalifa
(Chairman)
(Undersecretary, Ministry of Finance & National
Economy, Kingdom of Bahrain)
 Naser Abdul Mohsen Al-Marri (Vice Chairman)
 Irfan Siddiqui (President & Chief Executive
Officer)
 Istaqbal Mehdi
 Mohammed Abdul-Rehman Hussain
 Nawid Ahsan
 Ariful Islam (Chief Operating Officer)
 Rana Ahmed Humayun
 Mohammed Azzaroog Rajab
 Ahmed Abdul Rahim Mohamed

Main office
3rd Floor, PNSC Building, M.T.Khan Road, Karachi-74000,

Pakistan

Ph: (9221)5610582, Fax: (9221)5610375

24/ 7 Call Centre 111-331-331, E-mail:

info@meezanbank.com

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Competitors of Meezan Bank

• Al-Falah Bank Ltd

www.bankalfalah.com.pk

• National Bank of Pakistan (NBP)

www.nbp.com.pk

• Askari Bank Ltd

www.askribank.com.pk

• Untied Bank Ltd (UBL)

www.ubl.com.pk

• Allied Bank Ltd (ABL)

www.abl.com.pketc

Major Competitors of Islamic Banks

• Albarka Islamic bank

• Bank islami

• Dubai Islamic bank Pakistan ltd.

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• Emirates global Islamic bank limited

DEPARTMENTS &
THE PRODUCTS OFFERED
AT THE BRANCH

There are 5 main departments at the branch:

1- ACCOUNT OPENING DEPARTMENT

2- OPERATIONS DEPARTMENT
3- CREDIT DEPARTMENT
4- TRADE FINANCE DEPARTMENT
5- CASH DEPARTMENT

1- ACCOUNT OPENING DEPARTMENT


Account opening and closing is the function of customer
services department. The bank’s customers includes
individuals (single or joint), firm (partnership/proprietorship),
Autonomous corporations, Limited companies, Charitable
Institutions, associations, Educational Institutions or local
bodies.

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Brief Explanation of these accounts are as follows:

Products offered by this department:

a) Riba Free Rupee Savings Account

 Current account
 Saving Account
b) Riba Free Dollar Savings Account
 Foreign Currency Account

a) RIBA FREE-RUPEE SAVING ACCOUNT


As a step towards the mission of providing a one-stop shop
for innovative value added products to our customers,
Meezan Bank is pleased to offer RIBA FREE Current
Account, a flexible Rupee based account that is ideal for
businesses and individuals looking for Shariah compliant
banking and professionalism under one roof.
The deposits of the customers together with the bank’s
contribution are invested in a pool that consists of Ijarah and
Murabaha financing. The profit earn on this pool is calculated
every month, and if you maintain a minimum average
monthly balance of Rs.10, 000/- you shall be eligible to
receive profits that will be disbursed to you every month. But
if your balance is less than 10000 then u get no profit or no

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penalty is charges to u. there is no fixed profit b/c every
month new rate declared.

CURRENT ACCOUNT

Current account is basically used to meet the daily


transactions. The money kept in current account is in the
form of CARZ-E-HASNA gives the advantage for paying debts
by the convenient and safe means of sending cheques
through the post thus avoiding the trouble and loss.

Requirements:
Mini deposit::::::::::::::::::::::::::::::::::::: Rs.10,000/- only

b) Riba Free Dollar Savings Account

The return earns on the Mudarba pool is calculated every


month and profit ratio is declared for all investors is declared
at the beginning of the month.
If you maintain a minimum average monthly balance of
$500, you shall be eligible to receive profits that will be
disbursed to you every month.

Requirements:
Mini deposit::::::::::::::::::::: $100 under Mudarba
arrangement.

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BASIC OF ACCOUNT OPENING

Account opening is the basic and first relationship, the


relationship b/w the bank and the customer shall be based
on the principles of MUDARABAH where the customer is the
RAB-UL-MAAL and the bank is the MUDARIB. In account
opening extreme care has to be exercised in case of
completion of account opening documentation.

Whenever a client comes in the bank in order to open an


account the first information that is given to him/her about
the types of accounts, which can be opened, so far this
purpose the client is given detailed information about the
accounts and their respective profit rates.

TYPE OF ACCOUNTS OPENED

 CURRENT
 SAVING
 TERM DEPOSIT

Sub-categories of Accounts and the Basic


Requirements:

MINOR ACCOUNT
 Copy of B form/birth certificate

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 National Identity card of Guardian
 Signature requirement of guardian
 Valid proof of source of guardian
INDIVIDUAL ACCOUNT
 Copy of national identity card
 Any job/business proof

JOINT ACCOUNTS
As evident from the name these accounts can be jointly
opened by any number of persons. The minimum number of
persons required to open a joint account is two but there is
no maximum limit.
Requirements:
 National Identity card of all Applicants.
 Any job/business proof of all account holder
 Signature of all Applicants.
 Zakat Affidavit of all Applicants (zakat Examption).
 Operation of account clearly mentioned.
 The options available to operate the account are:
 Jointly
 Either or Survivor
 Other(s)(Please specify)
CLUB/SOCIETY/ASSOCIATION/TRUSTS
ACCOUNTS/ [Requirements]:

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• Copy of registration certificate
• Board resolution
• Copy of rules/regulation
• Copies of CNICs of all members of management
body
• Undertaking to immediately inform about any
changes.
• List of executive members or management
committee/management board etc.

CORPORATE ACCOUNTS

ACCOUNTS OF SOLE PROPRIETOR (Requirements)


 Copy of NIC/Passport of the proprietor
 Copy of NTN Certificate
 Account opening request & proprietorship letter on firm
letterhead.

ACCOUNT OF PARTNARSHIP (Requirements)


 Partnership Deed attested copy duly signed by all
partners.
 copies of NIC of all partners.
 Authority letter.

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 Account opening request on firm letterhead.
 Attested copy of registration certificate with registrar of
the firms.

ACCOUNT OF LIMITED COMPANIES (Requirements)


 List of Directors of company.
 NIC of all Directors and signatories.
 Copy of certificate of Incorporation.
 Memorandum of Association.
 Article of Association.
 Board Resolution.
 Latest Copy of Form-29
 Stamp of Company, which is to be affixed on the
account opening form.
 Certificate of Commencement of Business(for public
limited co.)
ACCOUNTS OF LITERATE [Photo Account]
These accounts can be opened individually or jointly.
For men, the right hand thumb impression and for women,
the left hand thumb impression is taken on account opening
form.

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The customer is given advice to come to bank himself in
order to withdraw any cash or deposit the cheque.
Requirements:
 Photocopy of NIC of Account Holder.
 Two- passport size photographs.

NRP ACCOUNTS
• NICOP/CNIC
• Visa/passport COPY
• Job/business proof

THINGS TO BE CONSIDERED BEFORE OPENING


AN ACCOUNT

 Verification of the customers’ credentials.


 The suitability of the prospective customer.
 State Bank’s rules and regulations.
 The Bank’s own policy.
 The prospective profitability of the relationship.

PROCEDURES FOR ACCOUNT OPENING

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First of all, inquiring from the customer what type of account
he/she wants to open, purpose of the account and any
job/business proof. Then forwarded to BM and then BM
satisfy from customer then the account opening form is got
filled from the customer and signed it. Along with the
account opening form, the customer is also signed two
Specimen Signatures Cards and attached all requirement
documents as well. Filling of deposit slip to deposit
cheque/cash and copy of deposit slip

After fulfilling all the formalities of account opening, the


computer generated account number is given to the
customer that is of special series depending on the type of
account.

Chequebook is issued after the activation of the account but


it is necessary to customer when he/she will come to take
chequebook , come with letter of thanks. Then the officer will
issue the chequebook. Because its included in MBL policy.

LETTER OF THANKS
After opening the account “A Letter Of Thanks” is send to
the customer in order to thank the customer for opening an
account in the Bank. This letter tells all the information
regarding his/her account, which are kept very confidential.

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ACCOUNT OPENING REGISTER
After an account is opened, an entry is made in the account
opening register, which has the following columns:

 Date
 Account Number
 Name & Address
 Telephone Number
 Initial Deposit

Customer Services/Relation Officer enters the new account


opened in computer and the Specimen signature Cards are
also scanned so that whenever a cheque of the respective
account comes for encashment, the signatures can be
verified.

Overall functions performed by Customer Services


Department:

 ACCOUNT OPENING
 ACCOUNT CLOSING
 EDIT/DEL INFORMATION REGARDING ACCOUNT
 GENERAL CLIENT DEALING

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If customer wants to close the account so customer will fill
the account closure form and then officer posting in system
then supervise as well. If customer wants to edit information
regarding account so customer will fill the customer
instruction form. And then officer posting in system and
supervise by operation manager.

2-OPERATIONS DEPARTMENT

FUNCTIONS PERFOMED:

a) CLEARING
b) REMITTANCE

a) CLEARING

 Inward clearing
 Outward clearing

INWARD CLEARING
In the morning, the bank receives its own cheques, which
have been presented by the customers in some other bank
to be deposited in their account. NIFT provides the facility of
bringing cheques for inward and also takes the cheques of
outward clearing to other banks. The cheques received in

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inward clearing are the cheques drawn on bank and the
bank has to pay for them. For this purpose the bank makes
clearing in computer by checking the balances of the
respective customer, if their balances are up to the mark
then that cheque is cleared and the respective customer
account is debited with the respective amount. If the
balances are short then that cheque is bounced back to the
related bank.

STEP 1: NIFT-BAG
STEP 2: CHEQUES SCRUTINY
STEP 3: POSTING IN SYSTEM
STEP 4: SUPERVISION/AUTHORIZATION
STEP 5: CHEQUES RETURN
STEP 6: RETURN MEMOS+BUNDLE COVER
STEP 7: NIFT-BAG

Reasons for returning a cheque:


• All required stamps of Clearing, Crossing and
Endorsement are not present on cheques.
• Cheque is post date.
• Refer to drawer
• Effects not cleared, may be presented again
• Amounts in words and figures differ.

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If any of these reasons exists then that cheque is returned
through NIFT and deducts charges from customer’ account
as cheque returned charges.

Then the report of returning any cheque is sent through fax


to the head office Karachi. After this put the entry in Cheque
return register showing the following columns:

 Date
 Title of account
 Account number
 Cheque number
 Bank and Branch name
 Reason to return

OUTWARD CLEARING:
All the cheques of other banks which are deposited to MBL
are presented in outward clearing. This is said as outward
clearing because they are presented on the very next day
after depositing a cheque.

In outward clearing, the entry is made like:


Customer Account Cr.
State Bank of Pakistan Dr.

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This entry is made when we come to know about the
clearing of all cheques, which are sent to other banks.

SERVICES PROVIDED
I. TRANSFER OF AMOUNT

II. TELLING ACCOUNT BALANCES


III. ISSUING CHEQUES BOOKS

I. TRANSFER OF AMOUNT
If a MBL customer wants to transfer money from one account
to other MBL account, customer writes a cheque and fills
deposit slip in which he/she writes account number to which
amount is to be transferred. After making transfer entry in
the computer, affix transfer stamp in the middle of the
cheque, crossing on the upper left and signature verified
stamp with senior officer signature near to customer
signature. Then senior officer-1 will authorize this entry.

II. TELLING ACCOUNT BALANCES

Whenever clearing officer receives phone call from the


customer inquiring about his/her account balance
after confirming the name, address and other
information he tells the balance through computer.

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III. ISSUING CHEQUE BOOKS
It is also the duty of department to issue a chequebook when
an officer receives request from the customer.

STEPS OF CHEQUE BOOK WHEN POSTING


IN SYSTEM T-24:
• REQUEST FOR NEW CHEQUE BOOK THEN AUTHORIZE
BY SENIOR OFFICER.
• MARK CHEQUEBOOK BUT INACTIVE THEN AUTHORIZE
BY SENIOR OFFICER.
• ISSUE THE CHEQUEBOOK THEN AUTHORIZE BY
OPERATION MANAGER.

B. REMITTANCE

a) Pay order
b) Demand drafts
c) Inward collection
d) Outward collection

a) PAY ORDER:

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Pay order is an order to pay money but this payment is to be
made within city. In other words it can be said that the
payee and the payer should be in one city.

In pay order the payment can be made in

A) Cash
B) Clearing
C) Transfer

PROCEDURE:
In case of pay order first of all the customer has to fill a pay
order application form in favoring section: name, account
number, amount, beneficiary name, address, etc.
The data is entered in already set format of pay order in
computer and pay order print out is taken. An authorized
person and manager operations are signed pay order.
The original copy of the pay order is given to the customer
and carbon copy is kept with bank for office record.

b) DEMAND DRAFT
An order to pay money to the payee who is residing outside
the city. DD can be for a customer who may or may not have

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an account in the bank but the other person’s account must
be maintained with the bank for which the payer has
demanded the DD.

c) INWARD COLLECTION
When the bank receives cheques of any other bank from its
any branch situated in the some other city, then those have
been dealt as inward collection.

PROCEDURE
After receiving the cheque, an entry is made in inward
collection register and then all stamps are affixed on the
cheque (clearing,

endorsement, IC # stamp) and make outward clearing


voucher which shows the following entry:

Remittance payable Cr.

On the next evening after the delivery of clearing cheques


make reversal entry like

Remittance Payable Dr.

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Respective Branch Cr.

Also make a fax message to inform the respective branch


that we have credited their nostro account.

OTHER FUNCTIONS UNDER OPERATIONS


DEPARTMENT

LOCKERS
Lockers operations shall not be permitted under power of
attorney of a customer. A customer wishing to allow another
person or agent may be requested to open a new locker
account under joint names and close the existing account.
In offering this facility branches have to be selective and
should provide lockers to the customers whose identity and
integrity is
verified, who should maintain account with the branch and
have potential for deposits and other banking business. It is
reiterated
that honesty, creditability and good reputation of the
customer is of utmost importance in the selection of
customer for lockers.

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KEY FEATURES:
 Available in selected branches
 Available in 3 sizes
 For all eligible Account Holders
 Key security Deposit PKR 3000

Procedure
 Application on Prescribed Form duly filled
 Saving/Current Account with MBL
 02 Passport size Photographs

Charges
 Key Deposit PKR 3000/
 Small PKR 1000/Year
 Medium PKR 1500/Year
 Large PKR 2000/Year
 Locker breaking charges Rs 3000

Cheque Books Handling


 Application for New Cheque Book

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CHARGES
 PKR 03/Leaf for Saving Account Cheque Book
 PKR 01/Leaf for Current Account Cheque Book
 PKR 01/Leaf for FCY Account

(No Charges for Cheque Books of Karobari Munafa


Account)

RIBA FREE TERM DEPOSITS OFFERED BY BANK


 Certificate of Islamic Investment
 Monthly Mudarabah Certificates
 Dollar Mudarabah Certificates
 Meezan Amdan Certificates
 Meezan Providence Certificate

Certificate of Islamic Investment

Riba-Free Certificate of Islamic Investment (COII) works

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under the principles of Mudarabah and is strictly in
conformity with the rules of Islamic Shariah.

On agreeing to become a COII holder, the customer enters


into a relationship, based on Mudarabah, with Meezan Bank.
Under this relationship, the Customer is an Investor (Rab ul
Mal), and the Bank is the Manager (Mudarib) of the funds
deposited by the customers.

The bank allocates the funds received from the customers to


a deposit pool. These funds are utilized to provide financing
to customers under Islamic modes that include, but are not
restricted to, Murabaha and Ijarah.

Tenor
 3 Months
 6 Months
 1 Year
 2 Years
 3 Years
 5 Years

Profit Payment Options

3 Months on maturity

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6 months on maturity
1 year monthly or quarterly min investment 200K
2 year monthly or quarterly min investment 200K
3-5 year monthly or quarterly min investment 200K

There will be different rate of profit according to the profit


payment option and amount and tenor.

Pre-mature encashment
In case of pre mature encashment the profit rate will be
calculated according to the completed tenor, if extra profit is
paid that will be recovered

 No pre-mature encashment penalty in MBL

Payment of Premium
Bank pay premium from its own share of profit to high
depositors.

Premium Rate
5M 9.99M 1%
10M 29.99M 1.25%
30M 49.99M 1.50%
50M+ 2%

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Karobari Munafa Account

Riba-Free Karobari Munafa Account works under the


principles of Mudarabah and is strictly in conformity with the
rules of Islamic Shariah.
On agreeing to become an account holder, the customer
enters into a relationship based on Mudarabah with Meezan
Bank. Under this relationship, the Customer is an Investor
(Rab ul Mal), and the Bank is the Manager (Mudarib) of the
funds deposited by the customers.
The bank allocates the funds received from the customers to
a deposit pool. These funds from the pool are utilized to
provide financing to customers under Islamic modes that
include, but are not restricted to, Murabaha and Ijarah.

 Profit calculated on daily basis and paid monthly


 No minimum balance requirement
 No restriction on deposit/withdrawals
 Free Cheque Books, Pay Orders and Online Banking
 Dedicated Account/Relationship
 High return for high depositors

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 Other requirements are mentioned in detail in
appendix.

Monthly Mudarabah Certificates

RibaFree Monthly Mudarabah Certificates is a flexible


investment product which has been designed to give you a
monthly return which is Halal. The minimum investment
required is only Rs. 100,000 and you receive profit for each
complete month of investment with the Bank.

How Monthly Mudarabah Certificates works?


Riba-Free Monthly Mudarabah Certificate (MMC) works under
the principles of Mudarabah and is strictly in conformity with
the rules of Islamic Shariah.

On agreeing to become a MMC holder, the customer enters


into a relationship based on Mudarabah with Meezan Bank.
Under this relationship, the Customer is an Investor (Rab ul
Mal), and the Bank is the Manager (Mudarib) of the funds
deposited by the customers.

The bank allocates the funds received from the customers to


a deposit pool. These funds from the pool are utilized to

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provide financing to customers under Islamic modes that
include, but are not restricted to, Murabaha and Ijarah.

Features:
 Minimum requirement of PKR 100K
 Profit disbursement on maturity
 Tire system for profit payment (Refer Rate Sheet)
 No payment on premature encashment

 Other details n requirements are mentioned in detail &


appendix.

Dollar Mudarabah Certificates

On agreeing to become a DMC holder, the customer enters


into a relationship based on Mudarabah with Meezan Bank.
Under this relationship, the customer is an Investor (Rab ul
Maal), and the Bank is the Manager (Mudarib) of the funds
deposited by the customers.

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The Bank allocates the funds received from the customers to
a deposit pool. These funds from the pool are utilized to
provide financing to customers under Islamic modes that
include, but are not restricted to, Murabaha and Ijarah.

Requirements:
 In USD only
 Individuals and Corporate
 Minimum investment 10K and above

Tenor:
 3Months
 6Months
 1Year
 3Years

Profit payment Options:


 3Months Maturity
 6Months Maturity
 1year 6 Monthly or Maturity
 3years 6 Monthly or Maturity
 Other details n requirements are mentioned in detail &
appendix.

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Meezan Amdan Certificates
The Riba-Free Meezan Aamdan Certificate (MAC) is a long-
term deposit certificate with an exceptionally high monthly
profit designed especially for those individuals and
corporations who are in need of regular stream of monthly
income. MAC is a monthly income (mahana aamdani)
certificate with a variety of free packaged benefits.
Working

The Riba-Free Meezan Aamdan Certificate (MAC) works


under the principles of Mudarabah and is
strictly in conformity with the rules of Islamic Shariah.

On agreeing to become a MAC holder, the customer enters


into a relationship based on Mudarabah with Meezan Bank.
Under this relationship, the customer is an Investor (Rab ul
Maal), and the Bank is the Manager (Mudarib) of the funds
deposited by the customers.

The Bank allocates the funds received from the customers to


a deposit pool. These funds from the pool are utilized to
provide financing to customers under Islamic modes that
include, but are not restricted to, Murabaha and Ijarah.

Features:

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 Long Term Product
 Tenor 5-1/2 years & 7 years
 Profit 9.5% 10.50% (Last month)
 For Individuals and Corporate
 Minimum deposit PKR 100 K
 (50K for old citizens and widows)

Meezan Providence Certificate (MPC)


A long-term investment product specially designed to cater
to the needs of corporate and business concerns for
purposes of investing their Provident, Pension and Gratuity
Funds.

How Meezan Providence Certificate works?


Riba-Free Meezan Providence Certificate (MPC) works under
the principles of Mudarabah and is strictly in conformity with
the rules of Islamic Shariah.

On agreeing to become a MPC holder, the customer enters


into a relationship based on Mudarabah with Meezan Bank.
Under this relationship, the Customer is an Investor (Rab ul
Mal), and the Bank is the Manager (Mudarib) of the funds
deposited by the customers.

 Min. deposit 01 Million

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Tenor
 5 Years
 7 Years

Other options:
 Provident and Pension Fund of large corporate
 Premature encashment facility available

Meezan Islamic Institution Deposit Account


The Meezan Islamic Institution Deposit Account (MIIDA) is a
unique product, tailored exclusively for Islamic Financial
Institutions (IFIs). With MIIDA, any IFI now has the
opportunity to manage excess liquidity in an immediate and
profitable manner, by maintaining a checking account with
Meezan Bank.
All eligible Islamic Banks can enter into a Mudarabah
relationship with Meezan Bank. Under this relationship, the
respective Islamic Banks are the Investors (Rab ul Maal), and
Meezan Bank is the Manager (Mudaarib) of the funds
deposited by them. Meezan Bank allocates the funds
received from the Islamic Banks to a deposit pool consisting

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of financing under Islamic modes that includes, but is not
restricted to, Murabaha and Ijarah.

Features:
 For Islamic Financial Institutions deposit
 To invest their access liquidity
 Min. investment PKR 10 M and multiplies there of
 Max investment 01 B

 Other details n requirements are mentioned in detail &


appendix.

3- CASH DEPARTMENT

The cash department is the most important department of


the bank. It receives cash from customers and then deposits

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it into the accounts of the customers and maintained their
balances.
In cash department following books are maintained.

 Scroll book
 Paying book
 Cash balance book

SCROLL BOOK
When cash is received at the customer it is recorded in the
scroll book.

PAYING CASH BOOK


The cashier makes entry in the paying cashbook when cash
is paid.

CASH BALANCE BOOK


The consolidated figure of receipt and payment of cash is
entered in cash balance book.

4- CREDIT / FINANCE DEPARTMENT

Islamic Financing for the following:


 Corporate

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 SME
 Personal

PERSONAL FINANCING

Diminishing Musharaka (Islamic Financing)

With Easy Home you can participate with Meezan Bank in a


joint ownership of your property, where the Bank will provide
financing up to 85%. On agreement of a monthly payment to
the Bank of which a component is for the use of the home
(rent), and another for your equity share. The total monthly
payment is reallocated regularly by the partnership to reflect
your growing equity and to allocate increasing amounts to
your investment. When you have made the full investment,
which had been agreed, you become the sole owner with a
free and clear title to the property.

Easy Home
Easy home works under the Diminishing Musharakah where
customer participates with Meezan Bank in joint ownership.

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Easy Home finance is available for:

Purchase
 3-20 year
 Max. Finance 85%

Construction
 2-20 year
 Max. Finance 70%

Renovation
 2-7 year
 Max Finance 85%

Replacement
 3-20 year

Eligibility
 Pakistani National
 Age 25—65 (till maturity)

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 Professional Experience

Salaried person:
 2 year of consecutive experience in same industry
 Min salary 20 k per month

Business
 3 years business experience
 Min. business income Rs 50K per month

Processing Charges
 Businessmen Rs 12500
 Salaried Person Rs 8500
 (Up to Rs 4 M, 2000 Additional for above)
 Time Frame 3-4 Weeks

Other details are attached in appendix.

Car Ijara

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Ijara is a rental agreement under which bank purchase a
vehicle and give the same on rent to customer
Car Ijarah is Pakistan’s first "Interest Free" car financing
based on the Islamic financing mode of Ijarah (Islamic
leasing). This product is ideal for individuals looking for car
financing while avoiding an interest-based transaction.

Scope of Facility
 Domestic Vehicle (Local made)
 Commercial Vehicle (Local+Imported)
 Used/Imported Vehicle (1st Transfer only)

Rates offered:
(For New) (For used)
 3 year 14% 15%
 4 year 15% 15.50%
 5 year 16.50% 18%

1% higher than normal for commercial+imported+used


vehicle

Eligibility:

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Pakistani National

 Salaried individual, self-employed, professional or


businessperson
 Minimum 3 years of work/business/professional
experience
 6 month working with present employer
 Net income exceeds three times of monthly rental

OTHER PRODUCTS OFFERED

On line Real Time ATM

 Free ATM Card


 Per Day Limit of PKR 20K
 Rs 15 charges for use of other ATM Network
 Acceptable at all ATM outlets
 Debit card at Orix out lets (PKR 50k/Day)

On line Real Time Facility

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 Absolutely free from all branches of MBL
 Collection of Cheques absolutely free
 Available to PKR current, saving & Karobari Munafa acc.

Banking Facility at all MBL Branches for


 Monday - Thursday 9:00a.m. to 5:30p.m.
 Friday 9:00a.m. to 12-30p.m. & 2:30p.m. to
5:30p.m.

24/7 Call Center


24/7 call center provides you access to a wide
range of Tele-banking solutions and personalized banking
service.

Key Features
 Check account balances
 Instruct issuance of pay orders and demand drafts
 Transfer funds between your own accounts
 Order issuance of cheque book
 Check transaction history of accounts
 Receive information on MBL products and services

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 Issue stop payment instructions
 Report loss of your cheque book
 Request or change T-PIN
 ATM PIN Re issuance
 Report loss of ATM/Debit Card or cheque(s)

Internet Banking
Internet Banking allow to have access to accounts
regardless of where they may be in the world.

Key Features
 Balance inquiry
 Statement viewing
 Statement download
 Cheque status
 Cheque blocking
 Pay order request
 Complaint logging and follow-ups
 Funds transfers between own accounts at MBL
 Change of address request
 Cheque book request

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Alerts and Notification by E-mail and sms
 Low/High balance alert
 Credit/Debit transaction alert
 Request resolution alert
 Complaint resolution alert

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SWOT ANALYSIS

Strengths:
 Effective HR Policies.
 ATM Machine in Branches.
 One Counter Operation.
 Islamic Banking.
 Loyalty of Employees.
 24/7 Online Banking.
 Internet banking facility.
 Excellent Environment.
 Efficient and Qualified Management.
 Fewer Competitors as Islamic Banking.
 A large range of Islamic Investment Schemes.
 Islamic Leasing System.
 No hidden charges.
 Rates are remarkably low as compared to other
banks.
 Very High credit rating.

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Weakness:
 Lack of awareness of the people.
 Less Advertisement.
 Online system is not so strong.

Opportunities:
 More and more people are coming towards
Islamic Banking System.
 Introduction of innovative products.
 New Market Segments for ijara, i.e. Home
Appliances Products.
 Open New Braches in other small areas.

Threats:
 Islamic banks are Increasing.
 Traditional commercial banks are also
introducing the Islamic Banking Facility.
 Personal Loan Scheme of other banks.
 New Innovative Schemes by Other Islamic
banks.

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SUGGESTION & RECOMMENDATIONS

 Expanding their business by establishing new branches


in those areas which are near to the business area.

 MBL has the option to increase its customers through


efficient marketing system.

 The bank must hire the efficient marketing personnel.

 MBL must take part in heavy advertisement as the


people become aware of the Islamic banking System.

 Bank should provide management training to their


employees.

 Bank should develop healthy relation to their


customers.

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 MBL should give more compensations and benefits to
its employees and other workers for the improvement
in the performance. Because it leads to the
improvement of overall bank’s performance.

FINANCIAL HIGHLIGHTS
Balance Sheet as on March 31, 2007

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Profit and Loss Account as on March 31, 2007

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Cash Flow Statement as on Marc 31, 2007

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FINANCIAL ANALYSIS AND COMMENTS

DEBT RATIO: 2007 2006

T. Debt 44,865,947 41,675,264


T. Assets 49,822,349 46,438,623

90.05 % 89.74 %

Comments:

Debt ratio basically shows that, how much assets are


financed by the debt. It shows that how much an investor is
protected in case of default.
From above information its obvious that, in year 2006, this
ratio is 89.74 % and this year it is 90.05 %. It shows more
debt financing as compared to previous year.

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DEBT / EQUITY RATIO: 2007 2006

T. Debt 44,865,947 41,675,264


T. Equity 3,779,897 3,779,897

11.87 11.03
1187 % 1103 %

Comments:

This ratio is an alternative to the debt ratio. One of


these ratios can be used by the investor. It shows the basic
ratio between debt and equity. This ratio is very high, as we
know that, banks are totally depend on the debt. However
equity also make a part pf its total financing but its very little
as compared to total debt. Due to this reason this ratio is
very high in case of banks.
As this ratio increased gradually, it shows increase in
debt financing as compared to equity.

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RETURN ON ASSET [R.O.A]: 2007 2006

Net profit after tax 190,577 181,655


T. Assets 49,822,349
46,438,623

0.383 % 0.391 %

Comments:

This ratio shows the efficiency of the total assets,


means how much efficiently the company using its assets to
earn its net profit.
As we know that in banks, assets are not a big source of
generating earnings, and basic function is of debt and
equity. That’s why this ratio is decreased this year as
compared to the previously.

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RETURN ON INVESTMENT [R.O.I] 2007
2006

Net profit after tax 190,577 181,655


Investment 2,811,033
2,877,554

6.8 % 6.3 %

Comments:

This ratio shows the return or net profit on the


investments. Means how much profit the bank is making in
terms of investments, rather than total profit.
In this ratio it is obvious that profit ratio is increasing
gradually as compared to previous years. And shows the
better performance of the bank with the passage of time.

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RETURN ON EQUITY [R.O.E]: 2007
2006

Net profit after tax 190,577 181,655


T. Equity 3,779,897 3.779.897

5.42 % 4.80 %

Comments:
This ratio shows the profit in terms of equity.
This profit is increasing gradually year after year as shown
above. As there is no change in total equity, but the profit
ratio increased. It shows the efficient operations an
allocation of resources, as a result, the return on the equity
is increased.

EARNING PER SHARE [EPS]: 2007


2006

Net profit 0.50 0.58


Total number of shares out standing

Comments:

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EPS decreased this year. As net profit increased this
year, EPS should also be moved respectively, but due to
increases no of shares outstanding, it is decreased this year.

OVERALL CONCLUSION

Islamic banking is a very young concept. Yet it has already


been implemented as the only system in two Muslim
countries; there are Islamic banks in many Muslim countries
and a few in non-Muslim countries as well. Despite the
successful acceptance there are problems. These problems
are mainly in the area of financing.

With only minor changes in their practices, Islamic banks can


get rid of all their cumbersome, burdensome and sometimes
doubtful forms of financing and offer a clean and efficient
interest-free banking. All the necessary ingredients are
already there. The modified system will make use of only
two forms of financing loans with a service charge and
Mudaraba participatory financing both of which are fully
accepted by all Muslim writers on the subject.

Such a system will offer an effective banking system where


Islamic banking is obligatory and a powerful alternative to
conventional banking where both co-exist. Additionally, such

INTERNSHIP IN MBL BIN QASIM BRANCH - 67 -


a system will have no problem in obtaining authorization to
operate in non-Muslim countries.

Participatory financing is a unique feature of Islamic banking,


and can offer responsible financing to socially and
economically relevant development projects. This is an
additional service Islamic banks offer over and above the
traditional services provided by conventional commercial
banks.

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