Internship Report

ACKNOWLEDGEMENT
First of all, I would like to offer my eternal thanks to the Almighty Allah who blessed me with the perseverance and the spirit of hard work to complete this Report. I am also grateful to my parents and the staff of MBL who have been supportive throughout my program and for their patience and belief in me. I offer respectful gratitude to our University for their guidance & encouragement.
Regards Khadija Mazhar MBA-FA08-060
The University of Faisalabad
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Sr.# 1 2 3 4 5 6 7
Table Of Contents Topics Industry Profile Company analysis Organization Structure Shariah Supervisory Board Branch Network Meezan Bank (Serena Hotel Branch) Departments Area Departments Trade Department Corporate Department Credit Administration Department Operations Department Marketing/Sales Department SQC Internship SWOT Recommendations/ Conclusions Appendix Appendix A Appendix B Appendix C References
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8 9 10 11 12
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Executive Summary
This is an Internship report for the requirement of my degree. In this report there is a brief discussion Of MBL and its history where I have explained with help of Organogram I have also describe the Branch where I have been doing my internship along with the organogram, all the departments are describe in detail along with procedures of every single department. In the end I have described the duties and learning or training during my six weeks duration in MBL.
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Industry Profile
Meezan Bank Limited is a publicly listed company which is the first and largest Islamic Bank in Pakistan and one of the fastest growing banks in the history of the banking sector of the Country. Having the largest branch network and product range, Meezan Bank bears the critical responsibility of leading the way forward in establishing a stable and dynamic Islamic banking system replete with dynamic and cutting-edge products and services. Meezan Bank aims to fulfill its prime objective of providing customers accessibility and convenience, within an atmosphere and culture of dedicated service and recognition of their needs. It was incorporated on January 27, 1997 and started operations as an investment bank in August that year. In January, 2002 in an historic initiative, Meezan Bank was granted the countrys first full-fledged commercial banking license as a dedicated Islamic Bank, by the State Bank of Pakistan. The Banks main shareholders are leading financial institutions of the Region namely, Noor Financial Investment Company, Pak-Kuwait Investment Company, and The Islamic Development Bank of Jeddah. The established position, reputation, strength and stability, of these institutions add significant value to the Bank through Board representation and applied synergies. The Bank has an internationally renowned Shariah Supervisory Board Chaired by Justice (Retd.) Maulana Muhammad Taqi Usmani, an internationally renowned figure in the field of Shariah, particularly Islamic Finance. He holds the position of Deputy Chairman at the Islamic Fiqh Academy, Jeddah and in his long and illustrious career has also served as a Judge in the Shariat Appellate Bench, Supreme Court of Pakistan. The Board also includes Sheikh Essam M. Ishaq (Bahrain), Dr. Abdul Sattar Abu Ghuddah (Saudi Arabia) and Dr. Imran Usmani who is also the resident Shariah Advisor of the Bank. And he is assisted by a team of professionals who strictly monitor the regular transactions of the Bank and are also responsible for Product Development.
History
We must work our destiny in our own way and present to the works an economic system based on true Islamic concept of equality of manhood and social justice Quaid-e-Azam Mohammed Ali Jinnah Opening Ceremony of The State Bank of Pakistan on July 1, 1948
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1947 The inception of Pakistan as the first Islamic Republic created in the name of Islam. 1980 CII (Chartered Insurance Institute) presents report on the elimination of Interest genuinely considered to be the first major comprehensive work in the world undertaken on Islamic banking and finance. 1985 Commercial banks transformed their nomenclature1 stating all Rupee Saving Accounts as interest-free. However, foreign currency deposits in Pakistan and foreign loans continued as before. 1991 Procedure adopted by banks in 1985 was declared un-Islamic by the Federal Shariah Court (FSC). The Government and some banks/DFIs made appeals to the Shariah Appellate Bench (SAB) of the Supreme Court of Pakistan. 1997 Al-Meezan Investment Bank is established with a mandate to pursue Islamic Banking. Mr. Irfan Siddiqui appointed as first and founding Chief Executive Officer. 1999 The Shariah Appellate Bench of the Supreme Court of Pakistan rejects the appeals and directs all laws on interest banking to cease. The government sets up a high level commission, task forces and committees to institute and promote Islamic banking on parallel basis with conventional system. 2001 The Shariah Supervisory Board is established at Al-Meezan Investment Bank led by Justice (Retired) Muhammad Taqi Usmani as Chairman. State Bank of Pakistan sets criteria for establishment of Islamic commercial banks in private sector and subsidiaries
Set or system of official names, terms, or specialized vocabulary used in a particular area, discipline, or subject such as accounting, engineering, finance, law.
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and stand-alone branches by existing commercial banks to conduct Islamic banking in the country. 2002 Meezan Bank acquires the Pakistan operations of Society General and concurrently Al Meezan Investment Bank converts itself into a full-fledged Islamic commercial bank. The first Islamic banking license is issued to the Bank and it is renamed Meezan Bank. President General Pervez Musharraf inaugurates the new Islamic Commercial Bank at a formal ceremony in Karachi. 2003 Meezan Bank establishes itself as the pioneer of Islamic Banking in Pakistan and quickly establishes branches in all major cities of the country. A wide range of products are developed and launched consolidating the Banks position as the premier Islamic Bank of the country Al Meezan Investment Management Limited (AMIM), the asset management arm of Meezan Bank, introduces Meezan Islamic Fund (MIF), the countrys first open-end Islamic Mutual Fund.
2004 The State Bank establishes a dedicated Islamic Banking Department (IBD) by merging the Islamic Economics Division of the Research Department with the Islamic Banking Division of the Banking Policy Department. A Shariah Board has been appointed to regulate and approve guidelines for the emerging Islamic Banking industry. The Government of Pakistan awards the mandate for debut of international Sukuk (Bond) offering for USD 500 million. The offering is a success and establishes a benchmark for Pakistan. Meezan Bank acts as the Shariah Structuring Advisor for this historic transaction. 2005 Meezan Bank becomes the first customer of Islamic Insurance (Takaful) by signing the first Memorandum of Understanding (MOU) with Pak-Kuwait Takaful Company Limited (PKTCL). The signing of this MOU has ushered Pakistan into a new era of Islamic Insurance (Takaful). 2006 A number of new dedicated Islamic Banks, namely Bank Islamic and Dubai Islamic Bank, commence operations in Pakistan. Meezan continues its leadership position in
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the industry by more than doubling its branch network to a total of 62 branches in 21 cities, clearly establishing itself as the largest Islamic Bank of the country. Meezan Bank becomes the first Islamic bank to introduce 8 am to 8 pm banking at selected branches in Karachi. 2007 Meezan Bank's branch network reached the milestone number of 100 branches (including sub-branches) in 31 cities nationwide. Car Ijarah portfolio reached Rs. 4.1 billion and the Easy Home portfolio stood at Rs. 3.1 billion. The Bank introduced Istisna' financing to cater to the working capital needs of customers. Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of RED money Group, Malaysia. Deposit base of the Bank grew to over Rs. 54 billion and the Bank earned profit after tax of Rs. 963 million. Trade Finance business reached Rs. 70 billion. 2008 Meezan Bank introduced Tijarah financing to allow customers to raise funds for financing of stocks of finished goods. Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of RED money Group, Malaysia and 'Best Islamic Financial Institution in Pakistan' by Global Finance Magazine, New York. Branch network grew to 166 branches (including sub-branches) in 40 cities nationwide. Deposit base grew to Rs. 70 billion and the total financing portfolio amounted to Rs. 39 billion. 2009 This was a watershed year for Meezan Bank. The branch network reached 201 branches (including sub-branches) in 54 cities nationwide; deposit base crossed Rs. 100 billion; profit/return earned on financing and investment activities exceeded Rs. 10 billion and the Bank handled more than Rs. 100 billion of import/export business. Being a socially responsible bank, Meezan Bank launched Meezan Labbaik, a Hajj and Umrah product - the primary objective being the desire to facilitate Muslims in performing their holy duty. Meezan Visa Debit Card was also launched during the year which is accepted at over 30 million outlets worldwide and allows customers to withdraw funds from their account from more than 1.4 million ATMs worldwide and can also be used for shopping, dining, traveling, fuel and cash needs. Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of RED money Group, Malaysia; 'Best Islamic Financial Institution in Pakistan' by Global Finance Magazine, New York; 'Best Islamic Bank in Pakistan' for 2009 by ASIA MONEY
Magazine, Hong Kong and 'Islamic Bank of the Year' for 2009 by CFA Association of Pakistan. Corporate assets, including corporate Sukuk stood at over Rs. 40 billion. Corporate highlights of 2009 included Tijarah financing with PSO, Istisna financing with PARCO and Murabaha financing with Punjab Food Department. The Bank started implementing its new core banking application - T-24. T-24 is a core banking software which includes banking best practices based on Temenos' implementations in over 600 financial institutions and 120 countries across Retail, Corporate, Private Wealth, Islamic and Micro finance and Community Banking sectors. 2010 Meezan Bank developed a number of new deposit products to cater to the unique needs of different market segments. Among the products launched during this year were Meezan Business Plus, a Mudaraba-based account that offers an array of free services for businesses, Meezan Euro Savings Account and Meezan Pound Savings Account. Meezan Bank's Car Ijarah completed its 9th year and stood at Rs. 4.2 billion with over 8,000 active vehicles. Meezan Bank stood among the top three auto-finance providers in the country. Al Meezan Investment Management launched Meezan Sovereign Fund - an open-end fund; the eighth fund under its management, including two closed-end funds, five openend funds and one voluntary pension scheme. The Bank developed a financing product based on the concept of 'Wakalah', to encourage the development of financing partnerships between Islamic banks and Microfinance banks. During the year, 38 Islamic banking awareness seminars were held in 23 cities across Pakistan and were attended by more than 4,400 participants representing customers, general public and professionals. Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of RED money Group, Malaysia and 'Best Islamic Financial Institution in Pakistan' by Global Finance Magazine, New York. Meezan Bank's branch network reached 222 branches in 63 cities across Pakistan and it became the 11th largest bank in Pakistan in terms of branch network. The Bank demonstrated robust business growth in 2010, closing the year with a deposit figure of Rs. 131 billion and Import/Export business of Rs. 143 billion.
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Company Analysis
Meezan 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 todays complex financial world, but do so with world-class service excellence which our customers demand; all within the bounds of Shariah As they have implemented robust and aggressive strategic and tactical initiatives on the side of consumer banking, it aims to fulfill its prime objective of providing customers accessibility and convenience, within an atmosphere and culture of dedicated service and recognition of their needs. As the leading Islamic Bank in Pakistan which has the largest branch network in all major cities of the country. 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. During the eight years of its operation as an Islamic commercial bank (from 2002 to 2010), offering universal banking services to customers, Meezan Bank has been one of the fastest growing banks in the history of the countrys banking sector. Average growth in deposits has been 55% per annum during this period while the branch network grew from 4 to 201. The bank has established a strong and credible management team comprised of experienced professionals, that have achieved a strong balance sheet with excellent operating profitability and strong ratios, which places the Bank at the top of the industry. The Bank has been assigned a medium to long-term entity rating of AAand a short-term entity rating of A-1. They also have a strong technology focus. It has invested heavily in state-of-the-art software applications namely Temenos T-24 and Oracle. It has also recently upgraded its hardware platform and also has a hot disaster recovery site in place to cater to any unforeseen eventualities.
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Vision
Establish Islamic banking as banking of first choice to facilitate the implementation of an equitable economic system, providing a strong foundation for establishing a fair and just society for mankind.
Mission
To be a premier Islamic bank, offering a one-stop shop for innovative value-added products and services to our customers within the bounds of Shariah, while optimizing the stakeholders value through an organizational culture based on learning, fairness, respect for individual enterprise and performance.
Service 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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Corporate culture and values

Shariah complaint Integrity Professionalism Service Excellence Social responsibility
The Management Team

Meezan Bank is managed by a team of professional bankers committed to the cause of Islamic Banking. This single unifying factor unleashes the tremendous power of a dedicated and motivated team committed to fulfilling the Vision and Mission of this Bank. The business segments of the Bank are: Consumer Banking Corporate Banking Investment Banking Commercial Banking (including Small and Medium Enterprises) Treasury & Financial Institutions Asset Management (managed through a subsidiary Al Meezan Investment Management Ltd.)
Board of Directors H. E. Sheikh Ebrahim Bin Khalifa Al-Khalifa (Chairman) (Minister of Housing, Ministry of Housing, Kingdom of Bahrain) Mr. Naser Abdul Mohsen Al-Marri (Vice Chairman) Mr. Hussam Fawzi Al-Kharafi Mr. Rana Ahmed Humayun Mr. Mohammed Azzaroog Rajab Mr. Ahmed Abdul Rahim Mohamed Mr. Alaa A. Al-Sarawi Mr. Mian Muhammad Younis Mr. Mohammad Abdul Aleem Mr. Irfan Siddiqui (President & Chief Executive Officer) Mr. Ariful Islam (Chief Operating Officer)
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Department of Product Development and Shariah Compliance (PDSC):

PDSC is the important department for any bank that offers Islamic Banking, Meezan Bank introduced PDSC in the year 2005, this department works directly under the control of Dr. Muhammad Imran Usmani. PDSC is a strengthening function of Meezan Bank that strengthens the Islamic banking. The basic function of PDSC is to control, design and regulate and facilitate the upcoming products, analyze and refine the currently existing products, it provides training about Islamic banking to new comers, it also conducts Shariah Audit regularly and it is also responsible for reviewing branches and departments, it is also responsible for co-coordinating with Shariah Board of bank.
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Shariah Supervisory Board

Islamic Banking would only be successful if they follow the principles of Islamic Shariah and implement on it. The foundations of a strong Shariah rules were laid in Meezan Bank from the beginning. A world-renowned Shariah Supervisory Board and a highly qualified and experienced in house Shariah Advisor are fundamental aspects of the Bank's core USP (Unique Selling Proportion). The primary role of this Board is to maintain and further strengthen this commitment and to ensure strict Shariahcompliance in all areas of the Bank's operations. Members of the Shariah Supervisory Board of Meezan Bank are Internationallyrenowned scholars, serving on the boards of many Islamic banks operating in different countries. The members of the Board are: Justice (Retd.) Muhammad Taqi Usmani (Chairman) Dr. Abdul Sattar Abu Ghuddah Sheikh Essam M. Ishaq Dr. Muhammad Imran Ashraf Usmani (Shariah Advisor)
Justice (Retd.) Muhammad Taqi Usmani (Chairman)
Justice (Retd.) Muhammad Taqi Usmani is a renowned figure in the field of Shariah, particularly in Islamic Finance. He currently holds advisory positions in a number of financial institutions practicing Islamic Banking and Finance. He has a vast experience in Islamic Shariah, teaching various subjects on Islam for 39 years. Current Board Memberships: Chairman Shariah Board, Central Bank of Bahrain Chairman Shariah Board, Abu Dhabi Islamic Bank, U.A.E. Chairman Shariah Board, Meezan Bank Ltd., Karachi, Pakistan Chairman Shariah Board, Dubai Bank, Dubai Chairman Shariah Board, International Islamic Rating Agency, Bahrain Chairman Shariah Board, Swiss Re-Takaful, Switzerland Chairman Shariah Board, Pak-Kuwait Takaful, Karachi Chairman Shariah Board, Pak-Qatar Takaful, Karachi Chairman Shariah Board, Bank Islamic Pakistan, Karachi Chairman Shariah Board, JS Investments Islamic Fund, Karachi Chairman Shariah Board, JS Islamic Pension Savings Fund
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Chairman Shariah Board, Arif Habib Investments Pakistan International Element Islamic Fund, Karachi Member Shariah Board, Arcapita Bank, Bahrain Member Shariah Board, Islamic Corporation for the Development of the Private Sector (ICD), an organ of IDB Jeddah Member Shariah Board, Guidance Financial Group, USA
Dr. Abdul Sattar Abu Ghuddah He is the Advisor and Director, Department of Financial Instruments at Al-Baraka Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law from Al Azhar University Cairo, Egypt. He is an active member of Islamic Fiqh Academy and the Accounting & Auditing Standards Board of Islamic Financial Institutions. Other positions currently held: Member Board, Dow Jones Islamic Market Indexes, USA Member Board, UBS, Switzerland Member Board Guidance Financial Group, USA Member Board, Saudi American Bank, Saudi Arabia Member Supervisory Board, First Islamic Investment Bank, Bahrain
Sheikh Essam M. Ishaq Born in Bahrain Sheikh Essam M. Ishaq graduated in Political Science from McGill University, Montreal, Canada. Currently he is teaching Fiqh, Aqeeda and Tafseer courses in Bahrain. He holds the position of Advisor at Discover Islam, Bahrain. He holds position of Director in a number of Business and Educational institutions, which include: Al Baraka Islamic Bank, Bahrain Bahrain Development Bank, Bahrain Discover Islam, Bahrain Middle East Traders, Bahrain Zawaya Property Development, Bahrain Al Iman Islamic School, Bahrain Muslim Educational Society, Bahrain
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Dr. Muhammad Imran Ashraf Usmani (Shariah Advisor) Son of justice (Retd) Mufti Muhammad Taqi Usmani holds LLB, M. Phil, and Ph. D. in Islamic Finance and graduated as a scholar (Alimiyyah degree) and Takhassus (Specialization) in Islamic Fiqh and fatwa from Jamia Darul-Uloom, Karachi. From the inception of Meezan Bank he is the In-house Shariah Advisor and Head of Product Development and Shariah Compliance department of Meezan Bank, where he supervises in-house training for the different Courses, Audit & compliance, R&D and advisory for Shariah based Banking. Serves as an advisor/ member of Shariah Boards of the: State Bank of Pakistan, HSBC Amanah Finance, Guidance Financial Group USA, Lloyds TSB Bank UK, Japan Bank for International Cooperation (JABIC), Credit Suisse Switzerland, RBS Global, Future Growth Al Barakah Equity Fund South Africa, AIG Takaful, ACR Retakaful Malaysia, Capitals Group USA, Bank of London and Middle East Kuwait, BMI Bank Bahrain, Al Khaliji Bank Qatar, Sarasin Bank Switzerland, DCD group Dubai and Mutual and Property funds and international Sukuk. He is also an Executive Board Member of: International Islamic Financial Market (IIFM) Bahrain International Center for Education in Islamic Finance (INCEIF) Malaysia, Institute of Business Administration (IBA) Center for Islamic Economics (CIE).
He is also founding trustee of Ihsan Trust (Meezan Bank). Branch Network Alhamdulillah, Meezan Bank has established over 220 branches in over 60 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 benefiting from 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 as 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 Shariahcompliant banking in their neighborhood. The Bank is currently segmented into eight Regions of Pakistan. The cities in which the Bank presently operates are as follows: Southern Region (South-I, South-II & South-III Regions) Hub (Lasbela) Hyderabad Karachi Mirpurkhas Nawabshah Quetta Sakrand Sanghar Sukkur Tando Adam Tando-Allah-Yar Central Region (Lahore, Faisalabad & Multan Regions) Arifwala Bahawalpur Burewala Chiniot Daska Dera Ghazi Khan Faisalabad Gojra Gujranwala Gujrat Hafizabad Haroonabad
Northern Region
Abbottabad Attock Chakwal Dera Ismail Khan Dina Gujar Khan Haripur Havelian Islamabad Jhelum Kohat Mansehra
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Hasilpur Jampur Jhang Kasur Khanpur Khushab Lahore Lalamusa Lodhran Mandi Bahauddin Mian Channu Multan Okara Rahim Yar Khan Sadiqabad Sahiwal Sargodha Sheikhupura Sialkot Toba Tek Singh
Mardan Muzaffarabad Nowshera Peshawar Rawalpindi Swat Swabi Wah Cantt.
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This branch is the main head of Meezan bank in Faisalabad as well as Satiyana road Branch but this particular branch is mostly connected to the main branch. It had only been five years for its establishment. Mainly the Area Manager and its employees reside there; henceforth they are in charged for the inspection of other branch residing in Faisalabad. 1. Serena 2. Kotwali Road 3. Peoples Colony 4. Clock Tower 5. Satiyana Road 6. Dijikot Road 7. Millat Chowk 8. Gold Cloth 9. Bhawana Bazar 10. Gojra 11. T.T.Singh These entire branches are particularly residing under the care of Area Manager via Regional Manager. These hierarchies show the way the structure of the organization works:
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Anwar-ul-Haq
Regional Manger
Moazzam Saeed Khan

Mr. Anwar-ul-Haq Regional Manager Faisalabad
Area Manager
Ghufran Saeed
Branch Manager
He joined Meezan Bank in 2002 on the official inauguration day of the bank. He possesses over 16 years of rich and diversified commercial banking experience in different positions as Manager, Area Manager, Regional Corporate Head-Central and Regional Manager. Before joining Meezan Bank he was associated with Emirates Bank International for 08 years mainly in the field of Corporate Banking. He has done MBA-Finance with distinction (Gold Medalist) from University of Agriculture, Faisalabad. He is also partly qualified in the field of Chartered Accountancy (CA-Inter) from The Institute of Chartered Accountant in Pakistan. He attended various advance business courses on Leadership, Corporate Financial Management, Strategic Management and Islamic Banking & Finance. His primary responsibilities include marketing & management of the Banks various Corporate, SME/Commercial portfolios and retail branch functions in the Faisalabad Region widely spread over 12 cities of Punjab. He is also involved in internal-training.
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Moazzam Saeed Area Manager
Serish Afzal
Secretary
Muhammad Murad Akbar

Area Coordinator
Abbas Arshad
Area Coordinator
Mian Muhammad Mansha

Area Coordinator
Ibrar
Information Technology
This hierarchy is basically Area Department which handles all the affair and daily business activities along with all the human resources work and many other activities.
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Ghufran Hassan
Branch Manager
Rashid Masood
Operations Manager
Adnan Aleem
PBM
Muhammad Iqbal
CAD Manager
M. Khalid Mehmood
Trade Finance Manager
M. Athar Iqbal
Corporate Regional Manager
Farooq Faisal Niazi

Marketing manager (A.S.M Liability product)
Muhammad Mannan
Officer Remittance
Toseef ur Rehman
Sohail Zaid
PBO
Robina Tahir
CAD Officer
Cash Officer
Rizwan Majeed Butt

Realization
Nasir Suhail
Officer Export
Mooez Burhan
Regional Officer
Shahnawaz Khan
BDO
Umar Bin Sarwar Sharjeel Liaqat
Ali Raza
Cash Officer
Waqas Naeem
PBO
Basma Ramzan
CAD Officer
Bilal Nasir
Officer Import
Akbar Ali Munir

Officer Export
Muhammad Hassan Raza

Regional Officer
Pay Order
Rizwan Farooq
BDO
Qasim khan
Cash Officer
Robina Khan
SQC
Zulfiqar Ali
CAD Officer
Nasir Abbas
Officer Export
M. Umer Gorsi
Regional Officer
Cheque Book
Rehan Ali
Account opening officer
Yasir Arafat
Clearing Officer
Adeel Akram
CAD Officer
Usman
Regional Officer
Qamar Abbas
Account Officer
Muhammad Farooq
Clearing Officer
Kashif Nadeem
CAD Officer
Muhammad Kabir
Data Controller
All these departments will further be explained in details.
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Riffat Bano
Exchange
Tariq Mehmood / Sadaqat Hussain
Tea Boy
Adeel Javed / Sajjad
Messenger
Muhammad Shahbaz
Driver
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1. 2. 3. 4. 5. 6.
Area Department Trade finance Department Corporate Department Credit Administration Department Operations department Marketing/Sales Department
As in a bank all the departments are inter related with each other due to the process. Basically not all banks have an Area Department. 1) Area Department This department main concern is to inspect and ensure that whatsoever hurdles are being faced by the branches in Faisalabad should be resolve, should be aware of the working of all the departments, they stay linked with the head office in Karachi. Human Resource work is also handled here but approval still resides under Head office. Recruitment, Selection and Placement Procedure Before explaining about hiring, they are basically two types: Contractual and Permanent Permanent hiring is basically done on grade basis Category 1 President & Chief executive officer Chief Operating Officer Category 2 Senior Executive Vice President 1 Senior Executive Vice President 2 Executive Vice President 1 Executive Vice President 2 Category3 Senior Vice President Vice President 1 Vice President 2 Assistant Vice President 1 Category 4
1 2 3 4 5 6 7 8 9 10
President & CEO COO SEVP1 SEVP2 EVP1 EVP2 SVP VP1 VP2 AVP1
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11 12 13 14 15 16 17 18 19
Assistant Vice President 2 Assistant Manager 1 Assistant Manager 2 Senior Officer 1 Senior Officer 2 Officer 1 Officer 2 Assistant Officers on Contract
AVP2 AM1 AM2 SO1 SO2 O1 O2 Asst. OC
Recruitment process essentials are as follows: I. Internal Hiring by direct Recruitment and Promotion Staff Hiring shall be made both by direct recruitment and promotion. Those employees which are serving in lower grader would be given an opportunity to extent their grade to internal hiring if that employee is eligible for that grade. II. Hiring Approval Matrix Here when appointing an employee or hiring those who have the power should appoint are given under this area For example Position of Regional Manager can be assessed and recommended by SEVP Commercial and Approved by COO and CEO. Henceforth for every position there is someone to assessed and approved. III. Hiring of Batches When Batch of officers are hired they are trained and they are allocated in different branches according to the requirements but they will be on contractual basis. Such batches are of three types: a) Batch Training Officer (BTO) b) Management Training Officers (MTO) c) Trainee Cash Officer (TCO) Requirement for MTO is Age 26 Qualification should be Masters and all the degree should have !st division
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Degree should be from a well-recognized University Procedure Batch will give test in Lahore Officer would be judged by Interview Panel Documents (Hiring) 1 month training in Lahore and then when assigned to a particular branch for a certain post. Condition is that the officer cannot leave for two and half years, if the officer leaves than the payment fee would be One Lakh. During Six months of probation period they are rotated through different departments considering two months for each department. Salary package is Rs.16000/- (Beginning) and after six months it would increase to Rs.20000/- but their grade is SO2. After six months are over the officer would be permanently shifted to the required post, but if the officer has already been recommended by the manger of a department then he would be posted there.
IV.
Eligibility Criteria There is an eligible criterion for recruitment process and the employees are divided Senior Management Executive Management Middle Management Junior Staff Support Staff (outsourced) EVP2 and Above AVP1 to SVP SO2 to AVP2 Asst. to O1 & Equivalent contract staff Tea boy, Rider, Driver, Technician
V.
Appointment of Key Executive CFO/Head of Finance/ Head o\f Accounts Head of Internal Audit Country Treasurer Head of Credit Head of Risk management Head of Operations
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Head of Compliance Head of Human Resources Head of Information Technology Head of Islamic Banking
When appointing key executives they are things which should be considered and that is Reputation, Track record, Financial soundness (should not have any dues), Conflict of Interest (should not be head of another department), competent and should have a capability. VI. Induction Procedure All hiring proposals are forwarded to Human Resource department in Karachi with these documents attached; a) Interview evaluation sheets (Present in Appendix A) b) CV of the candidate c) Approved Organogram (with highlighted post) d) Last pay slip/ Salary Account Statement e) Employee data Form (Present in Appendix A) f) Copy of CNIC g) Copy of Degree (onwards Matriculation/ O level) 1. Identify, Short-list and Select suitable candidates When staff is required, advertisement is done through newspapers and it can be posted on web site of Meezan Bank Limited. Meezan Bank has every right to reject a candidate without giving any reasons. Advertisements of hiring should be first approved by HR. When candidates are identify, then initial screening occurs and if they think that a written test is required than they would arrange for it. And even the existing employees are given a chance to apply for the vacant post. 2. Pre-Recruitment Test Those candidates which have the grade level up to AM 2 should appear and pass the test and the test would be of English, Mathematics and General Knowledge and minimum should be 30% in each test but altogether 50%, but those listed below are the exceptions
a) b) c) d)
Sorters/ cashier/ Tellers BDO Recovery Officers Consumer Sales Staff
3. Selection Interviews Managers would interview the candidate and the Interview sheet should be filled during or after and then signed along with other documents should be dispatch to the HR, Head Office.
4. CIB Reports and CNIC checks CIB report and CNIC copy is checked by the respected person if any default has occurred than the candidate would be rejected and all this would be done before the issuance of Inter Memo. But if during CIB report there are any dues and then the candidate is told to clear out his dues if not then the candidate is rejected. 5. Issuance of Offer and Approval from Head Office After the screening of candidate the Head office has approved than offer letter is issued, hence the candidate is given the offer letter where he signs it and a copy is dispatched to head office which means that the Candidate had accepted the job. 6. Documents Required on Joining i. ii. iii. iv. v. vi. vii. viii. Joining Reports (for new joiners) Gratuity form Copies of all testimonials Acceptance of Resignation issued by the previous employer Release Certificate Code of conduct, Ethical standard and Business Practices duly signed EOBI form Three personnel References from professional fields, government employee with grade 17 or a business men with a reputation.
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7. Probationary Period Assistant to VP2 - 6months VP1 to EVP2 3 months VII. Post Induction period
1. Renewal of Contract and Permanent Services Basically contract is renewed only with recommendation and approval. When an employee gains the status of a permanent employee than they will get a position but not a gain in salary or grade. 2. Services Records a) b) c) d) e) f) g) h) i) j) Name Fathers Name Date of Birth Place of Birth Nationality Contact Numbers Blood Group Ailments on Disabilities Copy of the Last drawn salary certificate Qualifications (Attested educational certificates) i. Educational; ii. Professional Previous experience i. Non-banking ii. Banking Permanent & current address Interview sheet Date of appointment Date of Joining Promotion-Dates and Grades Appointments held Salary grade, Designation, Assignments Details of Salary and Allowances
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k)
l) m) n) o) p) q) r) s)
t) u) v) w)
Leave Record Loan approval Records Performance appraisal Transfer/ Release Letter
Documents mentioned above are in the care of main head office whereas documents below should be present in all the branches, basically a record of every employee. a) Employment Data Form b) Copy of Offer/ Appointment Letter c) Transfer Records d) Leave Records e) Copies of Appraisal Form f) Loan Record g) Any other record which concerns employee Internship Procedure Meezan Bank gives student opportunity to learn and enhance their skill, every summer they hire internee through approval of HR, Head Office. But the number of Internees in a branch is only 2 not more than, but if a particular department has employee around 30 than 3 internees are acceptable. Duration of Internship is 4-8 weeks, the amount of stipend given to an internee is on monthly basis Rs.4000/- (for Masters Qualification) and Rs.3000/- (for bachelors qualification) The Proposal for Induction of an internee may include the following: a) b) c) d) CV of the candidate CNIC of the candidate Recommendation Letter from the university Internee assessment (available in Appendix A) form
When the head of HR approves the internship for the candidate than the internee must sign a secrecy bond before joining (Joining letter is attached in Appendix A). On completion of Internship program, that particular branch will fill the Internship evaluation Sheet along with the internship report submitted by the internee. Then the HR department will issue an Internship Completion Certificate.
Job Description Procedure The manger and the new joiner are required to finalize their Job Description within 15 days of joining at their place of posting. The Job Description should be signed by the joiner as well as the manager and send it to HR, Head Office. Purpose of Job Description is to define the job responsibilities of each employee and ensure those employees are aware of their responsibilities The following outlines of the job description are: Job Summary Describe general nature of the job Primary Duties and Responsibilities The job description should provide detailed list of actual responsibilities, duties and assignment of concerned staff describing each job responsibility briefly. Secondary / Additional Responsibilities Describe the secondary duties that an employee on this job performs either periodically or whenever required, (Job Description Sample is in Appendix A)
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Salary and Compensation Policy Monthly salary is given by the end of each month There is a permission of Advance against salary but it would be adjusted to the prior month. But they are some rules in case of emergency that also with the approval of the Manager and If the staff member is proceeding on leave and next day payday falls during the vacation period. Employees are responsible for preparation and submission of their personel income tax, Bank is not responsible for any sort of tax which is supposed to pay by the employees. Salary structure Basic Basic Salary House Rent 45% of basic salary Utilities 10% of Basic Salary Medical 10% of Basic Salary Other Allowances Gross
16.67% of Gross basic Salary Salary
Bonus and Increment are given to the employee due to the reason of the good performance of the bank. During my internship I had witnessed that due SQC check, they had been grade first for their service which had later on the employees had been awarded bonuses. And even for the performance as well as good auditing result also results in Bonuses. Benefits Medical Benefits is provided to all the employees as well as family but those family members will not be given this benefit if they are already availing this benefit through their company. Mobile and Blackberry benefits is also provided let say that the Blackberry is provided to the regional managers, branch managers, department managers and so on Even Car is given to the employee and all those who avail the facility of fuel/ petrol are given the Fuel Card.
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Job Rotation Policy To broaden the area of expertise, Meezan Bank uses various assignment for the employees so that they gain experience, Job Rotation is also done so that incase a staff member is on leave that employees work can be handled by other employee. All the staff members of Meezan Bank should be rotated; the rotation may mean transfer from one position to another within the same department in branch, transfer from one department to another branch or from one branch to another branch. The time frame for the Job Rotation: Branch staff 3years Branch Managers 4years
Training Procedure Training is essential part of the bank as they are exceeding in the business they have to stay up to date with all the rules and the way to handle them, hence they provide training so that their thinking and skills be developed. For a single training of an employee- Circular is received by the bank, then the Area Managers selects or rather nominates an employee and send the circular back to the respected trainer. Internal Training There has been a recent internal training, as a seminar of all the branches in Faisalabad which the topic was Fraud and Forgery Training which was basically One day training, where all the employees were present. Transfer and Posting Procedure Issuance of Transfer Orders i. ii. Before transfers, recommendations or approval should be sent to HRD along with Transfer Request Form. Then HRD will issue transfer order after receipt duly signed and approved by the respected person
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iii. iv. v.
Transfer Orders to effect the transfer decision will be send to the concerned manager. The transfer cannot be made through email but emergency transfers can be done through fax. The transfer can only be made if there is a vacant slot present in an organogram
If transfer is done through own request, then he can get transfer but he cannot avail any facility. Transfer of an employee which is for more than 30 days but less than 90 days with a future reposting is known as Temporary transfers. And whereas the transfer of employee for more than 90 days with any future relocation that is permanent transferring. The transfer of employee from one city to another is Intercity Transfer. The Intercity transfer is only meant for higher positions and upper grades. When the employee are transferred Intercity whether permanent or temporary they are given the facility of transport ticket, transferred expense beard by the bank. Separation/ End of Service Procedure Resignation Employee can only resign from the bank by giving prior notice to the bank; employee is not eligible to leave during the notice period When the staff is on probation they can resign within 15 days prior written notice. In the resignation letter there should be Bank statement as well as Signature of Branch Manager and then the HRD accepts the letter and fill in the resignation form. In the Resignation Forms they are only few things which are considerate that is any dues, leaves and reason for resignation. Termination Bank has authority for terminating an employee without giving any reason whether it is a confirmed employee or Employee under probation or under contract
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End of Service Benefits Bank gives end of service benefits to the outgoing employees a) Provident fund b) Gratuity c) Leave Encashment Retirement Employees of Meezan Bank Ltd. when reaches the age of 60 shall retire from the bank service. Formalities to be completed on Resignation/ Termination a. b. c. d. e. f. g. h. i. j. k. l. m. n. Resignation Letter Issuance of Letter of Acceptance of Resignation Clearance letter from the Branch Issuance of Release letter Laptop (If provided) Information to Insurance Company for deletion of Name Cancellation of power of Attorney Return of Banks car Fuel Card Return of Banks Mobile Phone Adjustments of Loans Settlements of Dues Cancelation of computer Password Payroll Deletion
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2) Trade Finance department Modes of financing which this department mostly deals with are Istisna and Murabaha which is briefly explained in corporate Department. Export Financing A bank plays two very important roles in Exports. It acts as a negotiating bank and charges a fee for this purpose, which is allowed in Shariah. Secondly it provides exportfinancing facility to the exporters and charge interest on this service. These services are of two types 1. Pre shipment financing 2. Post shipment financing As interest cannot be charged in any case, experts have proposed certain methods for financing exports. Pre Shipment Financing: Pre shipment financing needs can be fulfilled by two methods 1. Musharakah / Mudarabah 2. Murabahah Musharakah / Mudarabah: The most appropriate method for financing exports is Musharakah or Mudarabah. Bank and exporter can make an agreement of Mudarabah provided that the exporter is not investing; otherwise Musharakah agreement can be made. Agreement in such case will be easy, as cost and expected profit is known. The exporter will manufacture or purchase goods and the profit obtained by exporting it will be distributed between them according to the predefined ratio. A problem that can be encountered by the bank is that if the exporter is not able to deliver the goods according to the terms and conditions of the importer, then the importer can refuse to accept the goods, and in this case exporters bank will ultimately suffer. This problem can be rectified by including a condition in Mudarabah or Musharakah agreement that, if exporter violates the terms and conditions of import agreement then the Bank will not be responsible for any loss which arises due to this negligence. This condition is allowed in Shariah as the Rab-ul-mal is not responsible for any loss that arises due to the negligence of Mudarib.
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Murabahah Murabahah is being used in many Islamic Banks for export financing. Banks purchases goods that are to be exported at price that is less than the price agreed between the exporter and the importer. It then exports goods at the original price and thus earns profit. Murabahah financing requires bank and exporter to sign at least two agreements separately, one for the purchase of goods and the other for appointing the exporter as the agent of the bank (that is agency agreement). Once these two agreements are signed, the exporter can negotiate and finalize all the terms and conditions with the importer on behalf of the bank. When starting a process of export finances these are the documents which are required: 1) Account is Maintain by the bank (for that bank requires) Chamber of Commerce Registered goods certificate NTN CNIC Company request forms Partnership Deed After the account is maintained then comes the process of 2) Export Form2 Export form basically has 4 copies Original Goes to the customer Duplicate stays with Meezan Bank Ltd. Triplicate goes to State Bank of Pakistan Quadruplicate goes to the customer for their personal use Certification of E-form is done within 14 days shipment and documents are submitted to the authorized dealer. Instruction for dispatched comes from the customer for the documents to the foreign bank (Documents shown below) 3) Bill of Exchange 4) Commercial Invoice 5) Packing List 6) Certificate of Origin 7) Bill of Lading 8) Goods Declaration
The reason E-form is used because then from foreign exchange we can find out and it will be easy for the SBP to see which goods are being exported as they will have a record. The University of Faisalabad Page 38
To open Letter of Credit
Open L/C
Buyer/ Applicant
Opening Bank/ Issuing bank
Corresspondent Bank
L/C Sent
Beneficiary/Seller
Parties involve in L/C are Applicant The buyer/ Importer who arranges the L/C to be opened Beneficiary The party in whose favor the L/C is to be opened Issuing/ Opening Bank The bank which issues the L/C Advising Bank The bank which advises the L/C to the beneficiary without any engagement on the part (not held responsible) Confirming Bank The bank which adds its confirmation to the L/C Paying/ Drawee Bank The Bank which is named in L/C on whom drafts are to be drawn for the payment Negotiating Bank The bank which agrees to advance funds, with resource to the beneficiary against presentation of document
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Reimbursement Bank The bank name in the L/C through which the negotiating bank will seek reimbursement3
Types of Credit Revocable Credit Can be cancelled by the issuing bank without giving prior notice to the beneficiary Irrevocable Credit Cannot be cancelled without the parties consult those who are involved Confirmed Irrevocable Credit A bank in the sellers country which adds its commitment to that of the issuing bank Straight Credit Extends the engagement only to the beneficiary Negotiating credit Extends the engagement to the beneficiary and bonafide holders of the draft beneficiary has greater flexibility
When all the documents are checked by the document if any discrepancies than the document are sent back so that mistakes could be rectify and then it is collected through Bill They are three types of Bill Bill Negotiation (EBN) The bank is extending credit to the client against the export documents. All L/Cs that call for payment at Sight falls under this category. Payment against such transactions is realized within 14 days of controlling. Bill Discounting (EBD) This refers to L/C which involves tenor such as 30 days from B/L,60 days after B/L, 90 days sight.
In L/C arrangements the bank (often) but not always the issuing bank that serves as a source of funds for payment to the L/Cs beneficiary The University of Faisalabad Page 40
Bill Collection(EBC) Payment against document can only be realized once acceptance has been given by the opening bank. If the tenor is 120 sight or more than 120 days approval is required from SBP.
Export Refinance Part 1 Pre Shipment This scheme provides finance before shipment. That is exporter has a contract or L/C with applicant or they need finance to make shipments. Exporter avails export refinances pre shipment facility. Following documents are required: Affidavit (undertaking) worth Rs.20/ Copy of Contract or L/C D.P (Demand Promisory) note with adhesive stamp of Rs.100 Form EC (Eligible Commodity) Post Shipment This scheme provides finance after shipment that is exporter ships the goods and need more finance to make more shipment. Exporter avails export refinance post shipment facility in such a situation. Following documents are required: Affidavit (undertaking) worth Rs.20/ Copy of Contract or L/C D.P (Demand Promisory) note with adhesive stamp of Rs.100 Form EC (Eligible Commodity) Photocopy of Duplicate form E Copy of Invoice Copy of B/L
Export Refinance Part 2 In this scheme an exporter may avail export finance at the concessionary rate in financial year equal to 5/12 of the export performance made him in the last financial year, all export during the preceding financial year are taken into account to monitor the 5/12 total performance. Loan is actually granted for 150 days, but it continues for the whole financial year means to renew after 150 days. Following documents are required: Affidavit (undertaking) worth Rs.20/The University of Faisalabad Page 41
D.P (Demand Promisory) note with adhesive stamp of Rs.100 Form EE (Eligible Export) Form EF (Export Performance) Forward Booking When forward booking is done let say at the rate 87.44 for Rs. 2Lakh in April. So as the contract is done in 2612011, here fixed is 30 days and full optional is 90 days, so till 2622011 we are unable to the forward booking but after 26th we can use the money. Spot TT Rates TT Buying Being a customer, I would look at this rate for future rate when I would be selling. TT Selling Being a customer, I would look at this rate for future rate when I would be buying.
Usance Customer is in urgent need of money as after 180 days payment is received by the customer but to fulfill the urgent need of money he ask for the banks to give him the amount but bank will add a rate to it and when the customer submits the payment after 180 days, he has to pay the profit also. Import Finance Musharakah can be used for Import Financing as well. There are two types of bank charges on the letter of credit provided to the importer: 1. Service charges for opening an LC 2. Interest charged on LCs, which are not opened on full margin. Collecting service charges for this purpose is allowed, but as interest cannot be charged in any case, experts have proposed two methods for financing LCs: 1. Based on Musharakah / Mudarabah 2. Based on Murabahah Musharakah /Mudarabah: This is the best substitute for opening the LC. The bank and the importer can make an agreement of Mudarabah or Musharakah before opening the LC. If the LC is being opened at zero margins then an agreement of Mudarabah can be made, in which the
bank will become Rab-ul-Maal and the importer Mudarib. The bank will own the goods that are being imported and the profit will be distributed according to the agreement. If the LC is being opened with a margin then a Musharakah agreement can be made. The bank will pay the remaining amount and the goods that are being imported will be owned by both of them according to their share of investment. The bank and the importer, with their mutual consent can also include a condition in the agreement, whereby; Musharakah or Mudarabah will end after a certain time period even if the goods are not sold. In such a case, the importer will purchase the banks share at the market price. Murabahah: At present Islamic banks are using Murabahah, to finance LC. These banks themselves import the required goods and then sell these goods to the importer on Murabahah agreement. Murabahah financing requires the bank and the importer to sign at least two agreements separately; one for the purchase of the goods, and the other for appointing the importer as the agent of the bank (agency agreement). Once these two agreements are signed, the importer can negotiate and finalize all terms and conditions with the exporter on behalf of the bank. Performa Invoice between Buyer and Seller than Import request for L/C before that he submits the request form from his company. L/C
Insurance (Main Cover) MBL has a form of L/C which has Rs. 100/- stamp I Form Submit I form basically has 4 copies (available at Appendix B) Original for SBP Duplicate for Authorized Dealer. Triplicate for Authorized Dealer record Quadruplicate for Submission to SBP in case of imports were documents not retire Performa Invoice
There is a limitation of L/C Submition of BBFS CIB report would be taken out of that customer for background purposes
When the limit is approved by the management than only the process begins. When the documents comes than the transaction is proceed.
After L/C is opened than shipment gets ready, B/L is issued along with the rest of the documents are prepared as per as L/C. Documentary Remittance For Example Bank of China has dispatch document and in return they are asking the amount. During Import advance payment is given if it is Less than Rs. 10 million against raw material. Sometimes customer signs a contract with the bank rather than L/C, here bank is not liable to pay the amount as well as customer if shipment is not preceded or want his documents back, than the bank will not be able to do anything. But during L/C it is liable for the bank to pay the amount. For Contract Registration, Documents required are: Performa I-Form Insurance Cover note
On the registration certificate there is address of MBL, where the customer would dispatch the documents. Realization Document goes for collection and then payment is executed against documents which is known as realize, hence documents are released, then customer presents the documents to shipment and receive his goods In Payment there are few charges related to government taxes, commission which bank deducts as well as EDS (Export Development Surcharge) which is charged on customer on behalf of SBP which directly goes to SBP after 3 days. Daily Basis Activity is received through mail via NASTRO. This is kept as evidence showing the exchange of payments.
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3) Corporate Department Meezan Banks Corporate Banking is geared towards providing comprehensive and innovative financial solutions through a diverse product offering. Aimed at nurturing and developing long-term relationships with our clients we take great care in understanding each clients unique financing requirements and accordingly provide Shariah-compliant financing solutions. At present we cater to a large number of multinational and local clients representing various sectors of the economy. By providing financial solutions for the needs of the Small & Medium Enterprises (SMEs) and having recognized the significance and diverse business needs of the Commercial Banking sector in the country, Meezan Bank is committed towards developing tailored financial solutions and assisting the growth of the corporate sectors in Pakistan. Working Capital Finance Solutions for short term financing requirements Amongst the wide range of Shariah-complaint solutions for our customers, Murabaha and Istisna are designed to meet working capital requirements. For example, if a customer needs finance for purchasing raw materials for their industry or are trading in goods then they could use Mudaraba or Istisna to meet their financial needs. Murabaha One of the most common modes of finance employed by Islamic Banks, Murabaha is based on the exact requirements of each customer. It can be defined as a sales transaction where Meezan Bank purchases the commodity and sells it after adding an agreed profit. Thus, it is not a loan given on interest - it is sale of a commodity on a deferred price. Murabaha involves the purchase of a commodity by Meezan Bank on behalf of a customer and subsequent sale to the customer on cost-plus-profit basis. The cost and profit margin to the bank is expressly disclosed to the customer. Simply put, rather than advancing money to the customer, Meezan Bank buys the commodity from a third party and sells it to the customer at an agreed price, which includes an element of profit.
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Murabaha can be used in following conditions: Short / Medium / Long Term Finance for Raw material Inventory Equipment Asset financing Import financing Export financing (Preshipment) Consumer goods financing House financing Vehicle financing Land financing Shop financing PC financing
Tijarah A short-term financing facility for meeting liquidity requirement of the customers (including local businesses and exporters), in which the Bank purchases the finished/manufactured goods of the customer. The goods are delivered to the Bank. After taking delivery, these goods are then sold to the local buyer or exported to the foreign buyer by the customer acting as the Bank's agent. Istisnaa Istisnaa is a sale transaction where an asset is sold before it comes into existence. It is an order to manufacture a specific asset for the purchaser. The manufacturer (our customer) uses its own material to manufacture the required goods. In Istisnaa, price is fixed with the consent of all parties involved. Similarly all other necessary specifications of the finished product are agreed beforehand. Istisna as a mode of financing Istisna Finance is used to cater for the working capital requirements of a business involved in the manufacturing of goods. It is ideally suited for exporters and manufacturers who have export orders in the shape of Sight/Usance Letter of Credit/ Sight Export Contract D/P/ Usance Export Contract D/A.
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Here in corporate any sort of financing should have to follow certain steps for the approval 1. Borrowers Basic Factsheet Borrowers profile Details of director/ partners Management Corporate Status Nature of Business Requested Limits Business handled/ Effected with all financial Institution during the last account of the year Any write-off or rescheduled Details of prime securities mortgaged Details of secondary collateral mortgaged Credit Rating Dividend declared (3years) 2. Customer Renewal of Financial facilities Facility Request Letter Facility offer Letter Security charge letter Pricing charge letter Enhancement of credit facility 3. Call Memorandum When MBL visits to see what actually is required 4. Business Call Report all the detail between the two parties are written down and their purpose of calling. 5. CIB (Corporate Credit Information Report) Corporate Profile Outstanding Liabilities (funded and Non-funded based) Over dues (past due 90/365 days) Credit Enquires Enquiring financial institution and enquiry date Remarks
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6. Confidential Report Basically here financial banks tells us the repute of the corporate company, Included in report are these following Name and Estimated net- worth of directors/ sponsors Name and extend of facilities allowed A resume of their credit experience including its defaults and overdues And any related significant information 7. Search report linked with securities Report is issued from SBP or the third party which includes Summary of charge Bank wise Summary of Joint Charges Summary of Charge Security wise Summary of charge date wise 8. Yearly report (Financial Report)
Credit Package Here credit package is requested by the customer who goes for the approval to head office. Credit Proposal is submitted and recommended and approved by the assigned authority than only it reaches CAD department and then after the approval relationship would be handled by them. Short form Application facility can be changed. For example where 4 million can be extended to 5 million but only through short form credit Application. Short Form Credit Application includes: Customer Profile Group Exposure Financial Highlights Purpose Transaction structure Transaction Risk and Rationale
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Request for Extension in Renewal Date Customer Profile Financial Highlights Reason Justification Facility Limit O/S Overdues Security
Credit Application Customer profile Facility Number, Limits, O/S, facility and security description Other conditions and covenants Audit and SBP finding / Observation Exceptions Resolution Security
Credit Memo Customer/ Group Overview Purpose Facilities/ transaction Structure Exceptions Industry / Economic Environment Management Assessment Financial Review Critical Success Factor Third Party Information/Market References Search Report Latest eCIB Market checks without leaders Repayment Behavior Future outlook Account / Relationship Strategy Conclusion / Recommendation
Basic Information Report (BIR) Business Reciprocity Ownership structure

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Director/ Management/ Key Decision makers History Associated Groups Banking and other financing arrangements Main business Activity/ Product Operation Facilities Key supplies Key Buyers
Risk Rating Sheet A. Financial Debt: Equity Ratio Interest Coverage Sales Trend Net Operational Cash generation Trend Current Ratio Net profit Margin Forced Repayment ability Liabilities: Equity Ratio Debt/ Service Coverage Profitability Trend Quality of Auditors B. Sponsors/ Management Strength of Sponsors Market Reputation Management Quality C. Customer Ownership structure Internal control systems and Procedures SBP CIB report Account Behavior Number of years in Business Position in Industry Buyer in Industry Length of crediting relationship with MBL Sector preference for MBL Supplier diversity Industry Profile
D. Rating
Istisna Contract Bank gives the client a written offer When the goods are manufactured than the client gives the notice to the bank that goods are manufactured Then the bank goes and inspect and gives the manufacturer the documents that the goods had been received (but here the case is that the manufacturer keeps MBL goods separately and if any damage is caused to the goods, customer is not held responsible, it will be sole responsibility of MBL) Then bank gives notice for the sale of goods.
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4) Credit Administration Department Investment and Financing is handled by this department. The amount which has been deposited would be used for investment it naturally becomes a chain. After the approval from corporate department the documents reaches CAD department where they handled facility documents as well as securities, when everything is done then they would be disburse and payment is done and the next step would be recoveries a settlements. Before giving loan these things should be considered Credit Loan Rules SBP Rules Documents of Basic Facility Sole Proprietorship Partnership Limited Company And if security is acquired Mortgage Charge (current assets and Fixed assets)
Certificate of Islamic Investment (COII) (Lien Marked- Bank charged under Mortgage) This amount gets fixed they cannot be charged neither used anywhere unless and until its mature. This is for that purpose only it cannot be used anywhere. When COII matures than roll over advice is attached than it is extended for 365 days and then there is an attachment of Investment advice where it gets converted. Funded and Non-Funded Credit Facility Meezan Bank sends the facility to the corporate company and then that company approves and attached documents, Rs. 100/- document where Murabaha facility is defined along with DP note (corporate company basically makes a promise that how much profit will they give MBL) MMFA (Master Murabaha Facility Agreement) along with Demand Promissory Note
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Agency Agreement (Here MBL is giving their goods to that company and say that on behalf of MBL they can purchase the raw material) Master Istisna Agreement In this agreement both the parties will sign the agreement so that the goods purchased can be manufactured. Guarantees attached (securities) corporate guaranty along with DPN which is the requirement of SBP Undertaking (this is basically addressed to MBL saying that they would manufacture and even sell our goods) Undertaking cum Indemnity (Request of SBP) Ideal is 1:1 ratio according to SBP and they are saying that they will try their level best. Securities, shares and stocks Undertaking and Indemnity (Required by SBP) Letter or Set Off
Non Encumbrance Certificate (NEC) this is basically given to the bank to see whether the property is not mortgage elsewhere. Diminishing Musharakah Partnership based When the customer pays than their share increases Payments are revised due to the reason of change in KIBOR rates, henceforth every payment is revised.
Non Funded Facility Sanction Advice Consumer Protection Deposit Non Funded Facility letter hand of MBL MMFA DPN Agency Agreement Undertaking and Indemnity
As MBL takes the risk by keeping their part of assets in the company, they require insurance so that they would feel secure.
Form 10 is used for registration whereas Form 16 is used for slight changes mean ing any sort of Amendments in the documents. Disbursement Advice 1) Approval term of Murabaha Facility Borrower Facility amount Facility type Purpose Facility expiry Profit rate Sub Murabaha Tenor Payment of Murabaha cost component Payment of Murabaha profit component Security Date of Case Approval 2) Disbursement terms for Sub Murabaha Transactions Disbursement amount Sub Murabaha Tenor Assets Description Profit Rate Security Held Repayment Disbursement Date Documents Attached are Request for Murabaha from the client company Order form Payment schedule Calculation Sheet (involves distribution date, tenor, maturity, amount, rate, profit and contract prices) Rate (KIBOR) Copy of MBL Cheque when the amount was disbursed Copy of MBL pay order to the supplier of the amount Goods Declaration Payment along with the Inspection of Good
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Corporate checklist shows below all the basics

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5) Operations Department Basically this department deals with accounts departments, cash counter, cash vault, Remittance, and Clearance (Inward and Outward) Account Opening (There is a form of Account opening In Appendix C) When filling the form there is requirement for every individual then it is send to the centralized A/C (in Faisalabad it is Millat Chowk Branch) where it is checked for any discrepancies if not then the account is opened. Basic Documents for A/C opening are SSC (Signature Specimen Card) Business Proof Salary Slip Customer due diligence form Visit Report (MBL visits the customer and fill out related queries) [Last two points represents the word KYC-which basically states that you should Know Your Customer] Dormant Account- Those Accounts which are Inactive for One year, you can only save the amount but cannot withdraw unless the account holder itself does not come and sign than the account would become active.
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Liability Products 1) Meezan Current Account No minimum amount required to open account No charges for minimum balance Free online Banking No restriction on withdrawals or number of Transactions As per policy, Zakat not applicable Category: Individuals / Companies
2) Meezan FC (Current Account) (Dollar/pound) Minimum 100 euro/ Pound required to open account (Individuals Only) No charges for minimum balance No restrictions on withdrawals or number of transactions No ATM Cards Online not allowed Category: Individuals
3) Meezan Saving Account No minimum amount required to open account Profit will be paid on minimum amount of Rs. 10,000/No charges for minimum balance Free Online Profit to be disbursed on monthly basis Profit to be calculated on the basis of average balance of the month No restriction on withdrawals or number of Transactions Category: Individuals/ Companies
4) Meezan-Dollar Saving Account (DSA) Minimum investment is only $100 Monthly profit on min Avg balance of $500 No restriction on withdrawals or number of transactions
All deposit is invested under Mudarabah Profit to be disbursed on monthly basis Profit to be calculated on the basis of average balance of the month No ATM Cards Online not allowed Zakat is not applicable on $ deposits No tax deduction on cash withdrawals Category: Individuals
5) Meezan Bachat Account (MBA) Minimum opening balance is rs.25 k Maximum Profit uptil Rs.1M Joint accounts allowed Only one account allowed in any one MBL Branch across Pakistan Profit will be calculated on the basis of minimum Monthly balance maintained during the month at the end of the month Category: Individuals
6) Meezan Business Plus (MBP) MBP is a saving account with the features of a current account]It is the first remunerative current account of Meezan Bank Minimum account opening balance is Rs.100,000/Profit will be calculated on the basis of average monthly balance maintained during the month at the end of the month Profit will be paid on monthly basis Withholding tax and Zakat as per law Free Services/Attractions Avg Rs.100 K: Free Cheque Books, pay order, Visa Debit Card, Accounts Statement, Online Banking, Internet Banking, Hold Mail Facility, SMS Alert and Inter-city Clearing Discount on the trade services fee (As may be approved) Category: Individuals/ Company
7) Karobari Munafa Account (KMA) Min balance required for Account opening is Rs.1 M Profit paid on a monthly basis Profit will be calculated on a daily product basis calculated with reference respective tier and Weightages No profit will be paid if average balance fall below 1 million No restriction on withdrawals or deposits
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Free services on maintaining Avg Balance Rs.1 M Category: Individual/ Company
8) Karobari Munafa Account Plus (KMA+) Minimum balance requirement to open the account is 300 m A designed PBM/PBO will be assigned for KMA Plus Customer Profit paid on monthly basis Profit will be calculated on a daily product basis calculated with Reference respective tier and Weightages No profit will be paid if average balance fall below 1 million No restriction on withdrawals or deposits Category: Individuals/ Company
Term deposits 1. MBL Certificates of Islamic Investment (COII) Profit payment (Monthly, Quarterly and Maturity) Pre Mature Encashment Profit Rate 1 Month: No Profit 3 Months: Lower Saving rate 6 Months: 3 Months COII Rate 1 Year: 6 Months COII Rate 2 Years: 1 Year COII Rate 3 Years: 2 Years COII Rate 5years: 3 Years COII Rate Minimum Investment Amount for following tenures Quarterly & Maturity: Rs.50 k (Minimum Amount) Monthly payment: Rs.200 K (Minimum Amount) Payment Modes available for tenures 3 & 6 Months: Profit At Maturity 1,2,3 & 5 Years: Monthly, Quarterly & at maturity Category: Individuals/ Companies
2. Meezan Aamdan Certificate (MAC) Available tenures 5 and 7 years Profit payment monthly Free cheque book facility (Introductory offer)
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Minimum Investment Amount Offered to; Rs.100,000/- General Public Rs.50,000/- Widows and Senior Citizens Pre mature Encashment Applicable Profit Rate Within 6 Months: No profit Within 1 Year: Lower Saving rate Within 2 Years: 6 Monthly COII Rate Within 3 Years: 1 Years COII Monthly Rate Within 4 Years: 3 Years COII Monthly Rate Within 5 Years: 3 Years COII Monthly Rate Category: Individuals/Companies
3. Monthly Mudarabah Certificate (MMC) The minimum investment required is Rs.100, 000/Profit payment monthly If we break investment, no profit will be paid. Category: Individuals/ Companies
4. Meezan-Dollar Mudarabah Certificate (DMC) Open to individuals as well as corporate clients Minimum investment US $ 10, 000 and above No profit will be paid for encashment before 30 days Investment tenure Available 3 & 6 Months: Profit payment at Maturity 1 & 3 Years: Profit payment 6 monthly & Maturity Pre Mature Encashment Applicable Profit rate: Within 1 Month No Profit After 1 Month FCY Saving Rate Category: Individuals 5. Meezan Providence Certificate (MPC) Meezan Providence Certificate is a long-term investment product designed to cater to the needs of corporate and business concerns for purposes of investing their Provident, Pension and Gratuity Funds. Open to all the registered or unregistered Employee Provident/Gratuity/Pension Funds with company operations based in Pakistan Minimum investment amount: PKR 1,000,000 Available tenures
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2 year: Profit payment 6 Months & maturity 3,5 & 7 year: Profit payment Maturity Category: Companies
6. Meezan Features to all Customers SMS facility Bank Balance Certificate & statements 24/7 card-VISA ATM & Debit Card Internet Banking & 24/7 Call Center Banking Services
(Brochures of these Term deposit is already present in Appendix C)
Cheque Book issue procedure Cash signature of the customer is done on the cash book slip Then MBL verifies that the signature is authenticated and then stamp of MBL is used When it is clarified by the Operations Manager, and the entry is done in the system hence they receive the check book manually. Cheque book is issued of 100 leafs, from the respective accounts amount would be deducted. But if foreign current account than charge is not deducted from the account but taken from the customer in form of cash (Rupees)
Clearance If you have a Cheque of Rs. 1 Lakh of HBL, I will have to options either I go to HBL to cash it or ether I go to MBL and let the clearance department handles They are two types of Clearing: 1) Inward Clearing 2) 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 inward clearing are the cheques drawn on the
bank and the bank has to pay for them. For this purpose the bank makes clearing the computer by checking the balances of the respective customer, if their balance are up to the mark then that cheque is cleared and the respected customer account is debited with the respective amount. If the balance are short in that customer account than the cheque is bounced back to the related bank. The document shown below is the reasons for the rejection of the cheque.
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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. This entry is made when we come to know about the clearing of all cheques, which are sent to other banks. Remittance Transfer of money from one account to another basically known as transfer of funds Pay order 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 which used to be before but now as MBL has become online pay order and Demand Draft is considered same. 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. To cancel pay order the concerned person would have to provide NOC and if pay order is lost than FIR is issued, than the pay order number along with the FIR copy goes to the Head Office from there it is circulated to every branch in Pakistan so that this particular pay order cannot be issued. Debit Card is issued by filling out the form (included in Appendix C) When the card is captured, if the customer comes to retrieve it he has to bring CNIC copy as well as the card copy.
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The cash department is the most important department of the bank. It receives cash from customers and then deposits 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.
SQC (Service Quality Officer) 1. 2. 3. 4. 5. Check list (Have to check every day- present in Appendix C) Minimum documents should be displayed by the branch Noncompliance Activity Floor Time Management ASQM (Area Service Quality Management) comes for surprise check.
6) Marketing/Sales Department Deposit Mobilization they are set with a target where they have to complete their target let say if they have been given a target of 15 A/C, then they would have to open those account though reference or through Door to Door can be Individual or can be Business, basically they are BDO known as Business Generators their per month target is 4 million and 15 A/C.
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I have done internship in Meezan bank for only six weeks, and during that time whatever I have learned will be explained in weeks rather than days as well as the way I have been circulated from departments to departments. Where in each department there was a mentor present who guided me and taught me their process and procedures 1st Week My first week was in trade finance department. Here my mentor was Muhammad Nasir Suhail. Modes of Financing regarding this department Understood the procedure Exports Imports Export form existence Learned about Istisna Export forms (E-forms) Bill of Exchange Bill of Lading Letter of Credit FOB DP and DA Goods Declaration Letter of Credit and Contract differences Read the sales contract Learned about Swift, NASTRO A/C, and L/C rules Verify the documents required (Practical check of a certain company) Murabaha Contract and its process Learned about Foreign Exchange Rate regarding Exports and Imports Learned Forward Booklist and how they affect the profit/ loss in future Checked Form EE-1 with the files of a certain company Export Refinance
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Form EE-1 was recheck to find out any errors Import forms Difference Between Sight and Usance L/C issued by the Meezan Bank (read the term and conditions) Rate confirmation Realization Form EE (Entry in the software) [Basically learned the process]
2nd and 3rd Week (Area Department) Hiring Sorted Mail Recruitment Process Assessment form Interview sheet Internship procedure Handled the Extension (for few hrs per day) Inward Mail Register Joining Procedure Resignation Procedure Annual Leave procedure Read the Standard, Business Ethics and Code of Conducts Compensation Packages Recruiting New Employees Training Process (Internal and External) Read the Documentation file of an Employee Outward Mail Register MTO (Management Training Officer)- Joining procedure
And in the last day of third week I spent in sale department to find out the procedure. Department review Learned the procedure
4th Week (Corporate Department) Flow

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Document required regarding whether it is SME or Corporate companies Credit Approval BIR (Business Information Report)\ Credit Memo Sanction Advice Renewal Extension Learned about Istisna and Sukook Financing facility read Corporate file of a company read
5th Week (Credit Administration Department) Overview Murabaha regarding CAD Disbursement Advice Funded and Non-funded credit facility documents approval Murabaha process flow Ijarah process flow Istisna Process flow Checklist of properties of different nature and related documents for Mortgage
6th Week (Operation Department) A/C opening (overview) Clearing (overview) Remittance (overview) A/C forms Packages A/c opening forms sorted out in serial numbers Form filled in proper serial number Clearing- Outward and Inward Clearing Debit card/ ATM Pay order Service Quality Control (SQC)- detail Remittance
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SWOT Analysis
Strengths: Risk takers ATM Machine in Branches. One Counter Operation. Islamic Banking. Loyalty of Employees. 24/7 Online Banking. Internet banking facility Excellent Environment Expertise, Efficient and Qualified Management. Fewer Competitors as compared to the vast business of this Islamic Banking. A large range of Islamic Investment Schemes Islamic Leasing System. Hidden charges are not available. Rates are remarkably low as compared to other banks. Very High credit rating.
Weakness: Lack of awareness of the people. Fewer Branches in Faisalabad. Less Advertisement Online system is not so strong.
Opportunities: Islamic banking is becoming a hype as commercial banking are also approaching towards this Introduction of innovative products. New Market Segments for Ijarah, i.e. Home Appliances Products. Laptop facility Threats: Islamic banks are increasing. Traditional commercial banks are also introducing the Islamic Banking Facility. Personal Loan Scheme of other banks.
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New Innovative Schemes by Other Islamic banks
Recommendations Thy do not have the facility of Lockers in this Branch, being a main branch of Faisalabad Car financing is only done in One Branch of Faisalabad Congested Area Break area or rather canteen not properly defined as after eating there is an aroma of food in departments Meezan Bank should have a proper HR department Waiting room should be present
Conclusions MBL is a bank which had adopted the rules of Islam which has given the facility to everybody whether a Muslim or non-Muslim, everyone has an easy grasp of this concept, and it has made it easy for those who are not coming out of their house, Internet banking has sort of become a hype, balance can also be checked online. All these aspects shows that MBL being an Islamic Bank has also mold itself according to modern culture but have not forgotten its belief.
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References
http://www.meezanbank.com/index.aspx
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Internship Report

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ACKNOWLEDGEMENT

Regards Khadija Mazhar MBA-FA08-060

The University of Faisalabad

Page number 4 9 13 15 17 20 25 25 35 45 52 58 69 69 70 73 74 75 76 82 87 109

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

Corporate culture and values

The Management Team

The University of Faisalabad

Department of Product Development and Shariah Compliance (PDSC):

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

Shariah Supervisory Board

Justice (Retd.) Muhammad Taqi Usmani (Chairman)

The University of Faisalabad

The University of Faisalabad

Mardan Muzaffarabad Nowshera Peshawar Rawalpindi Swat Swabi Wah Cantt.

The University of Faisalabad

The University of Faisalabad

Moazzam Saeed Khan

The University of Faisalabad

Moazzam Saeed Area Manager

Muhammad Murad Akbar

Mian Muhammad Mansha

The University of Faisalabad

Farooq Faisal Niazi

Rizwan Majeed Butt

Umar Bin Sarwar Sharjeel Liaqat

Akbar Ali Munir

Muhammad Hassan Raza

All these departments will further be explained in details.

The University of Faisalabad

Tariq Mehmood / Sadaqat Hussain

Adeel Javed / Sajjad

The University of Faisalabad

The University of Faisalabad

AVP2 AM1 AM2 SO1 SO2 O1 O2 Asst. OC

The University of Faisalabad

The University of Faisalabad

Sorters/ cashier/ Tellers BDO Recovery Officers Consumer Sales Staff

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

16.67% of Gross basic Salary Salary

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

To open Letter of Credit

Opening Bank/ Issuing bank

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

The University of Faisalabad

Basic Information Report (BIR) Business Reciprocity Ownership structure

The University of Faisalabad