MBL Report

Meezan Bank Limited
Shumaila Mushtaq
Q575749
MBA (Banking &Finance)

(2005-2007)
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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 Al might y Allah, to who m I a m most hu mbl y
and me ekl y grateful for giving us the opportunit y and courage to undertake this
work and carr y it successfull y to co mpletion. All respects for this Hol y Prophet
Hazrat Muha mma d (PUBH) who enlighten our mi nds to recognize ourselves.
It is great pleasure for me to acknowledge our deepest sense of gratitude and

humble thanks to my worth y branch man ager “Mr. Saadat Khan Ghauri” for
being kind enough to extend his baseline guidance in the co mpletion of this
internship progra m.
I also pa y special thanks to all staff of Mee zan BANK LTD for their special for
their help and co-operation during the preparation of the report. Especiall y
thanks for these persons.
Mr. Sadaat Khan Ghauri (B.M) Mr. Gul Nawaz Khan (O.M)
Mr. Rashid Iqbal Mr. Faisal Manzoor

Mr. Irtiza Khan Mr. Salman
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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 six weeks internship at
MBL Jail road branch sahiwal.
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.
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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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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Table of Contents
S No. Page No.
1 Introduction of Meezan Bank 10
2 OVERVIEW OF THE MEEZAN BANK 12
A ) Brief history 12
B ) Nature of the Meezan Bank 18
C ) Business volume 19
D ) Product lines 23
E ) Competitors 41
3 Meezan Bank structure 43
A ) Meezan Bank Hierarchy chart 43
B ) Number of employees 44
C ) Main offices 44
D ) Comments on the Meezan Bank structure 45
4 Plan of your internship program 46

A ) A brief introduction of the branch where you did 46
your internship
B ) Starting and ending dates of your internship 46
C ) The departments in which you got training and 47
duration of your training
5 Training program 56
A ) Introduction of all the departments 56
B ) Detailed description of the department you 57
worked
6 Structure of the Finance Department 71
A ) Department hierarchy 71
B ) Number of employees working in the Finance 71
department
C ) Finance & accounting operations 71
7 Functions of the Finance Department 75
A ) Finance system of the organization 75
B ) Accounting system of the organization 86
C ) Use of electronic data in decision making 90
D ) Mobilization of funds 91
E ) Generation of funds 92
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F ) Sources of funds 95
G ) Allocation of funds 95
8 Critical analysis 100
A) Financial analysis 100
i. Ratio analysis 101
ii. Vertical analysis 113
iii. Horizontal analysis 117
B) Meezan analysis with reference to the industries 124
listed on the stock exchange.
C ) Future prospects of the Meezan Bank 125
9 SWOT analysis of Meezan Bank in the business sector 127
10 Conclusion & recommendations for improvement 131
11 Reference & Sources used 133
12 Annexes 134
Introduction of the Meezan
Meezan bank is a premier Islamic bank and 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.
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
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stable and dynamic Islamic Banking system replete with dynamic and cutting-edge
products and services.
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's main shareholders are leading local and international financial
institutions, including Pak-Kuwait Investment Company, the only AAA rated financial
entity in the country, the Islamic Development Bank of Jeddah, and the renowned Shamil
Bank of Bahrain, that in addition to their strength and stability, add significant value to
the Bank through Board representation and applied synergies.
The Bank has an internationally renowned, very high caliber and pro-
active Shariah Supervisory Board presided over by Justice (Retd.) Maulana Muhammad
Taqi Usmani, a 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 Bank also has a resident Shariah advisor, Dr. Imran
Usmani, who strictly monitors the regular transactions of the Bank. The board also
includes Sheikh Essam M. Ishaq (Bahrain), and Dr. Abdul Sattar Abu Ghuddah (Saudi
Arabia).
At Meezan Bank, we strive to find commonalties with the conventional

banking system with absolutely no compromise on Shariah rulings. The bank has
developed an extraordinary research and development capability by combining
investment bankers, commercial bankers, Shariah scholars and legal experts to develop
innovative, viable, and competitive value propositions that not only meet the
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requirements of today's complex financial world, but do so with the world-class service
excellence that our customers demand, all within the bounds of Shariah.
Furthermore, the Bank has built a strong Information Technology and

customer knowledge-based focus that continues to use state of the art technology and
systems. The Bank's Corporate and Investment Banking business unit is geared towards
nurturing and developing a long-term relationship with clients by understanding their
unique financing requirements and providing Shariah compliant financing solutions
across the horizon of corporate banking and structured finance. The Bank is also
implementing robust and aggressive strategic and tactical initiatives on the consumer
banking side. 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 with the dictates of Shariah. At the same time, we endeavor to deliver
competitive risk adjusted returns to our stakeholders.
"I wish Meezan Bank success in initiating the cause of Riba-free banking."
General Pervez Musharraf

President of Pakistan
Meezan Bank Inauguration, September 2002
OVERVIEW OF THE MEEZAN BANK Ltd
History of Islamic banking in Pakistan
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Al-Meezan Investment Management Limited (AMIM) was established in
1995 as a joint venture between Pakistan Kuwait Investment Company (PKIC), National
Investment (Trust) Limited , and Jardine Fleming Investment Management International
Limited (Jardine Fleming). AMIM has over the years benefited immensely from
domestic investment management expertise of PKIC and National Investment (Trust)
Limited and international expertise of Jardine Fleming.
Jardine Fleming made a substantial contribution towards the development

of systems and procedures for AMIM during its six years of association with the
company. The key investment professionals of Jardine Fleming, Hong Kong who served
as Directors of AMIM for these six years, contributed to the development of strategic
plans and investment policies of the company.
"Seek the other world by means of what Allah has bestowed upon you"
(28:77) The Holy Quran
"We must work our destiny in our own way and present to the works an
economic system based on true Islamic concept of equality of manhood and social justice
"Quaid's concept of Islamic Banking [Opening Ceremony of The State Bank of Pakistan
on July 1, 1948]
"Establish Islamic banking as banking of choice to facilitate

implementation of an equitable economic system, providing a strong foundation for
establishing a fari and just society for mankind” Vision, Meezan Bank Limited.
1947
The inception of Pakistan as the first Islamic Republic created in the name
of Islam.
1980
CII presents report on the elimination of Interest genuinely considered to be
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the first major comprehensive work in the world undertaken on Islamic banking and
finance.
1985
Commercial banks transformed their nomenclature stating all Rupee saving
accounts as interest-free. However, foreign currency deposits in Pakistan and foreign
loans continued as before.
1991
Procedure adopted by banks in 1985 was declared unIslamic by the Federal

Shariat Court (FSC). The Government and some banks/DFIs made appeals to the Shariat
Appellate Bench (SAB) of the Supreme Court of Pakistan.
1997
Al-Meezan Investment Bank is established with a mandate to pursue
Islamic Banking . Mr.Irfan Siddiqui appointed as first and founding Chief Executive
Officer.
1999
The Shariat 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 (Retd.) Muhammad Taqi Usmani as chairman. State Bank of Pakistan
sets criteria for establishment of Islamic commercial banks in private sector and
subsidiaries and stand-alone branches by existing commercial banks to conduct Islamic
banking in the country.
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2002
Meezan Bank acquires the Pakistan operations of Societe Generale and
concurrently Al Meezan Investment Bank converts itself into a full fledged Islamic
commercial bank. 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 Bank’s 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 country’s 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
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Company Limited (PKTCL). The signing of this MoU has ushered Pakistan into a new
era of Islamic Insurance (Takaful).
2006
A numbers of new dedicated Islamic Banks, namely Bank Islami and Dubai
Islamic Bank, commence operations in Pakistan. Meezan continues its leadership position
in the industry by more than doubling it branch network to a total of 62 branches in 21
cities, establishing 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 select
branches in Karachi.
2007
2007 Meezan Bank creates a significant milestone in the history of Islamic
Banking by opening its 100th branch in the city of Karachi. With 100 branches in 31
cities clearly positions the Bank as the leading Islamic Bank in Pakistan. Two new
dedicated Islamic Banks start operations in Pakistan, namely Emirates Islamic Bank and
Dawood Islamic Bank.
Shariah Board
The members of the Shariah Board of Meezan Bank are Internationally-renowned

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
• Dr. Muhammad Imran Ashraf Usmani - Shariah Advisor
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Permanent Member International Islamic Fiqh Academy,
Jeddah
• Vice President, Darul Uloom Karachi
• Chairman, Shariah Council AAOIFI, Bahrain
• Member, Islamic Fiqh Academy of Rabita-al-Alam-e-Islami, Makkah
• Member, European Council of Fatwa and Research, Dublin, Ireland
• Chairman, Center for Islamic Economics Pakistan since 1991
• Chairman, Shariah Board Dow Jones Islamic Market Index, New York
• Chairman, Shariah Board, Bahrain Monetary Agency, Bahrain
• Chairman, Shariah Board, Amana Investments Limited, Sri Lanka
• Chairman, Shariah Board Abu Dhabi Islamic Bank, UAE
• Chairman, Shariah Board Islamic House of Britain plc, UK
• Member, Shariah Board, First Islamic Investment Bank, Bahrain
• Member Shariah Board, Islamic Corporation for Development of the Private

Sector, (ICD) an organ of IDB, Jeddah.
• Member Shariah Board, Guidance Financial Group, USA
• Member Shariah Board, Saudi American Bank
• Member Shariah Supervisory Board, First Islamic Investment Bank
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BOARD OF DIRECTORS
• H. E. Sheikh Ebrahim Bin Khalifa Al-Khalifa (Chairman)

(Undersecretary, Ministry of Finance & National Economy,State
of Bahrain)
• Naser Abdul Mohsen Al-Marri (Vice Chairman)
• Yousif Saleh Khalaf
• Zaigham Mahmood Rizvi
• Mohammad Hussain
• Tarik Kivanc
• Mazen Khalid Al-Braikan
• Irfan Siddiqui (President & Chief Executive Officer)
• Ariful Islam (Chief Operating Officer)
• Rana Ahmad Humayun
Nature of the Meezan Bank
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Meezan bank is provide services in the market to their customers and
shareholders its nature is reflected by its vision admission statements
Our 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.
Our 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.
Our Service Mission
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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.
Business volume
Home financing
Welcome to Pakistan’s long awaited totally Shariah-compliant Home

Finance facility! One that is comprehensive, affordable, and totally hassle-free. For at
Meezan Bank, we are committed to meeting our customers’ needs, in a truly Shariah-
compliant manner coupled with dedicated service excellence. Meezan Bank’s Easy Home
is the answer you’ve been waiting for.
Islamic Financing on a Diminishing Musharakah basis
With Easy Home you participate with Meezan Bank in a joint ownership
of your property, where the Bank will provide a certain amount of financing (usually up
to 80%). You agree to a monthly payment to the bank of which a component is for the use
of the home, and another for your equity share. In fact, the total monthly payment is
reduced regularly as your share in the property grows. When you have made the full
investment, which had been agreed upon, you become the sole owner with a free and
clear title to the property.
Buy, Build, Renovate, or Replace!
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Buying a Home is Easy & Halal
Choose it and be ready to move in. Meezan Bank will finance up to 85% of
the appraised value of your new home or up to a value of Rs. 40 million, with a financing
tenor of up to 20 years.
Building a home is Easy & Halal
For that special home you want to build yourself. Meezan Bank provides
financing up to 70% of the appraised value or Rs. 40 million, for a tenor of up to 20
years.
Renovating your home is Easy & Halal
Making your home even better or just repairing it. Meezan Bank helps with
financing up to 30% and a financing tenor of up to 15 years.
Replacing your existing Mortgage is Easy & Halal
The wait is over. Now continue to enjoy your home but with the added
satisfaction and peace of mind you have always wanted. Meezan Bank will help you
switch your existing liability over to us and let you enjoy the benefits of Halal and totally
flexible financing. Financing up to Rs. 40 million and a tenor of up to 20 years.
Special Benefits of Easy Home
Flexible Financing Tailored to Support You
• High financing amounts
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• Maximum financing against property value
• Flexibility to make partial prepayments
• Minimal processing charges
• Affordable and competitive installment amounts with a regular reducing
monthly rental
• Rate relaxation for select MNCs & LCGs
Car Ijarah, Pakistan’s First Islamic Car Financing
As a step towards Meezan Bank’s mission to provide a one-stop shop for

innovative value added Shariah compliant products, Meezan Bank’s Car Ijarah unit
provides a car financing, based on the principles of Ijarah and is free of the element of
interest.
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.
Meezan Bank’ Car Ijarah is a car rental agreement, under which the Bank
purchases the car and rents it out to the customer for a period of 3 to 5 years, agreed at
the time of the contract. Upon completion of the lease period the customer gets
ownership of the car against his initial security deposit.
Car Ijarah also features Used Vehicles
In addition to our leasing of new cars, Meezan Bank also provides the unique
opportunity of leasing second hand, both locally assembled and imported vehicles. This
feature is specifically designed as a highly economical option. The Used Car Ijarah
facility is made available at a minimum-security deposit as low as 20%.
Key Features of Car Ijarah
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• Low monthly rental
• Rental paid after delivery, not in advanced
• Fastest processing and delivery
• Tracker option available
• Minimum security deposit as low as 10%
• All new, used, local, imported and luxury vehicles can be financed
Rental Calculations
For information on calculation of monthly rentals contact use our Car Ijarah Calculator or
call our 24/7 Call center.
Apply for Car Ijarah
To apply for Meezan Bank’s Car Ijarah, fill out a customer application form (available at
any Meezan Bank Ltd. Branch), attach the required documents and get your financing
approved in a 1-2 working days.
For further details make an appointment with an officer or call our 24/7 Call center.
Product Line
Introduction
By the grace of Allah, we are pleased to release our smart booklet,

“Products line”. The purpose of this document is to provide awareness and to educate
our Meezan Bank team members, especially those placed in branches, regarding different
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Liability/ Deposit products. The document describes the basic product structure along
with the features and purpose of each product.
The document currently covers fourteen (14) different liability products and will be a real
help for quick review.
This booklet will be regularly updated with the addition of more products in our liability
product menu card.
PRODUCT LINES
The ongoing success of Meezan Bank in the banking industry in general and
in the Islamic Banking Industry in particular is not only due to its position of being the
first Islamic Bank of Pakistan but also due to its continuous efforts of providing complete
range of liability products, specially on the retail side, to its customers. Meezan Bank
continues to maintain its diversified menu of deposit products and services catering the
need of both individual and corporate customers. The product range offers both
transaction accounts as well as term deposit products. We have a complete and ever
expanding liability products menu which allows people from all walks of life to
experiment and undertake Riba-Free financial transaction in the friendliest environment.
These well structured and profitable products not only fulfill the demand of various
market segments but at the same time provide both long term as well as short term
solutions to different investments requirements of our customers.
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Mudarabah based Deposit Products
At Meezan Bank all remunerative deposits are Mudarabah based and on

agreeing to become an account holder, the depositors enter into a relationship based on
Mudarabah.
Product Structure
Under This Relationship
• The Depositor is an investor (Rab-ul-Maal) and act as a sleeping partner. The

relationship of Musharakah exists between investors. The profit calculation of
these investors is based on predetermined weightages.
• The bank on the other hand has a dual role; first as the Manager (Mudarib)of the
funds deposited by the customer and second, has the option to invest in the
deposit pool with other investors.all the
Product Structure
• The bank allocates the fund received from the customer to a deposit line
• 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.
• The bank calculates the profit of the deposit pool every month.
• Gross Income (Return) of the pool is calculated by taking all the assets booked up
to the beginning of the month as well as assets booked/ investments made during
the month by utilizing the funds from the Investment Pool.
• The Gross Income of the pool is announced on a monthly basis. The profit is
calculated by 5th working day of each subsequent month for the previous month.
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• The Gross Income is shared between the bank (as Mudarib) and Depositors
(Rabul Mal) in a predetermined ratio (%) of the actual profit earned.
• This ratio of profit for bank & Investment Pool (for depositors) is announced at
the beginning of the month and is available at the website of the bank or can be
obtained from the bank upon request.
• The profit is distributed among the customers/account holders on the basis of
predetermined weightages, announced at the beginning of the month, based on
their respective category/tiers.
• These weightages are available on the website of the bank or can be obtained
from the bank upon request.
Loss Sharing
In case of any loss, it will be shared by the members of Investment Pool in

ratio of their investment.
Features of MBL Products line
MBL Product lines are mainly divided into two sections

A- Checking Accounts
B- Term Deposit Certificates
A- Basic Features of Checking Accounts
1. Meezan-Rupee Current Account
Meezan Bank’s Current Account is a non-remunerative deposit scheme based

on Qard (loan). The money deposited in the Current Account is a Qard given by
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depositors to the Bank. The Bank may utilize these funds for its own purposes however
no risk or return arising out these utilized funds shall be applicable to the depositors.
Basic Features of the Product
• Minimum amount required to open account is Rs. 10,000

• Riba Free COII Holders may open accounts without any minimum balance
requirements
• No charges if a balance goes below Rs.10, 000
• Free Online Banking services at our branch network nationwide
• Instant access to funds at any online branch.
• No restriction on withdrawals or number of transactions
• Bank balance certificates & duplicate statements of account
• Stop Payment & Hold Mail instructions
• 24/7 Card – your ATM & Debit Card in one
• 24/7 Call Center with complete Tele-banking services
• Dedicated Banking hours from 9am to 5pm (Saturdays 9am to1:30pm)
• 8 to 8 banking in select branches
2. Meezan-Rupee Savings Account
• No minimum balance required to open account

• Profit will be paid for accounts with minimum amount of Rs.10,000
• No charges for minimum balance maintained
• Instant access to funds at any online branch
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• Profit to be disbursed on monthly basis
• Profit to be calculated on the basis of average balance of the month
• Free Online Banking services at our branch network nationwide
• 8 to 8 banking in select branches
• Zakat and withholding tax are applicable on these deposits
Following are the profit payment tiers:
10 K - 99.99 K
100 K - 999.99 K
1M - 4.99 M
5M - 49.99 M
50 M - 99. 99 M
100 M & Above
3. Meezan-Dollar Saving Account (DSA)
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• Minimum investment is only $100

• Monthly profit payment for accounts minimum average monthly balance of $500
• All deposit to be invested in the bank under Mudarabah arrangement
• Profit to be calculated on the basis of average balance of the month
• Zakat is not applicable on $ deposits.
• Withholding tax as per law
4. Meezan Islamic Institution Deposit Account (MIIDA)
• A PAK rupee (PKR) checking account only available for Financial

Institutions(FIs)
• Minimum investment amount- PKR 10,000,000/- and above
• Maximum investment amount – PKR 1 billion
• Deposits from FIs will be accepted only via financial instruments i.e. SBP cheque,
crossed cheques and Payment Orders in favour of MBL
• No cash will be accepted for the deposit into the account.
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• Payments from this account should be allowed against clearing cheque or with the
issuance of SBP cheque against valid instructions.
• No online transactions will be allowed.
• No ATM cards will be issued.
• All deposit to be invested in the bank under Mudarabah arrangement
• *Notice period of withdrawal shall commence upon the notification reached to
Head office Treasury and Operations.
• Profit to be distributed from the General Pool
• Weightage for all the tiers will be assigned and announced at the beginning of the
month
• Profit to be calculated on daily product basis
• Zakat and withholding tax are applicable on these deposits.
Following are its profit payment tiers:
10 M - 199.99 M
200 M - 399.99 M
400 M & Above
• *Prior written notice is required for withdrawal of funds as per following

schedule.
Withdrawal Amount Notice Period
50 M – 200 M 24 Hours
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Above 200 M 48 Hours
5. Meezan Bachat Account (MBA)
• MBA is a variation of saving account with some added benefits Open to

individuals only. [For the purpose of this account, Individuals include salaried
persons and self-employed persons, housewives, retired persons, students and
minors.]
• No public/private limited company/sole proprietors/partnerships accounts will be
acceptable.
• Joint accounts in the names of individuals, however, will be allowed.
• Only one account will be allowed on one CNIC in any one branch of MBL across
Pakistan. [The branch will ask the customer to sign an undertaking stating that he
has no such account at any other MBL branch. Also, no joint account in MBA will
be accepted in the name of the individual having another such account.]
• If, afterwards, a customer is found to have more than one such account, bank will
have the right to close the additional account immediately.
• Minimum amount required for investment is Rs.25,000
• Maximum balance limit is Rs.1,000,000
• Profit will be calculated on the basis of minimum monthly balance maintained
during the month at the end of the month
• Accounts opened during the month will be given profit as per the number of days
completed.
• No profit will be applicable for accounts closed during the month.
• Zakat & W.H Tax is applicable
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• Dedicated Banking hours from 9am to 5pm (Saturdays 9am to 12:30pm)
Following are its profit payment tiers
1 Re. - 24.99 K
25 K - 199.99 K
200 K - 499.99 K
500 K - 1M
6. Karobari Munafa Account (KMA)
• KMA is a high profile saving account

• The account is available to all private limited, public limited (excluding all
Financial Institutions), sole proprietorships, trusts or partnership accounts as well
as High Net worth (HNW) individuals.
• Profit paid on a monthly basis.
• Minimum balance required for account opening is Rs. 1 million.
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• Profit will be calculated on a daily product basis calculated with reference to the
respective tier and weight ages announced at the beginning of the month. (Daily
closing balance in the account will be taken for profit calculation).
• No profit will be paid if average balance fall below 1 million.
• For the purpose of calculating profit, all accounts belonging to a ‘Group’ will be
consolidated together. For this purpose group will be defined as per Prudential
Regulation.
• Free facilities: cheque books and pay orders
• No restriction on withdrawals or deposits.
• On-line banking facility will be allowed to KMA customers.
• Zakat & W.H Tax is applicable
1M - 4.99 M
5M - 9.99 M
10 M - 49.99 M
50 M - 99.99 M
100 M - 199.99 M
200 M & Above
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7. Meezan Business Plus (MBP)
• MBP is a variation of saving account with the features of a current account

• It is the first remunerative current account of Meezan Bank.
• Open to individuals as well as corporate clients.
• Minimum account opening balance is Rs. 100,000/- (Rupees One hundred
thousands only)
• Existing customers who are availing facilities based on their balances in current
account at MBL are mandatory required to open this account to continue to avail
the services.
• Bank can ask its customer to maintain (under Lien) balances as guarantee or can
specify balance requirement as a condition for credit approval. (Because the
nature of account is not Qard).
• 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
Following is a partial list of attractions that may be offered to customers.
• Free Cheque Books

• Discount on trade services fee ( as may be approved)
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• Other services as may be approved from time to time
B- Basic Features of Term Deposit Certificates
8. Meezan-Certificates of Islamic Investment (COII)
• A minimum investment amount of PKR 50,000/-. No maximum amount ceiling

exists.
• Available tenures are 3 months, 6 months, 1, 2, 3 and 5 years.
• Profit payment options include monthly, quarterly, as well as maturity or bullet
payment.
• Monthly & Quarterly profit payments are available only in 1, 2, 3 and 5-year
tenors.
• Monthly profit payments require a minimum investment of PKR 200,000/-.
Minimum Investment Amount & Profit Payment relevance
Minimum Investment Amount Profit Payment Type
Rs. 50,000/- Quarterly & At Maturity
Rs. 200,000/- Monthly
Investment Tenure & Profit Payment relevance
Investment Tenure Profit Payment Type
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3 & 6 Months At Maturity
1, 2, 3 & 5 Years Monthly, Quarterly & At Maturity
Pre-mature withdrawal options are available without any penalty charge
Pre Mature En-cashment Applicable Profit Rate
Within 1 Month No Profit
Within 3 Months Lower Saving Rate
Within 6 Months 3 Months COII Rate
Within 1 Year 6 Months COII Rate
Within 2 Years 1 Year COII Rate
Within 3 Years 2 Years COII Rate
9. Meezan Aamdan Certificate (MAC)
Basic features of the product
• Acceptable currency is Pak Rupee only.
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• Available for Individuals, Entrepreneurs, SMEs, Association of Persons and
Public/Private Limited Companies.
• Minimum investment shall be Rs. 100,000/- (Rupees One Hundred Thousand).
• Minimum investment shall be Rs. 50,000/- for Widows and Senior Citizens.
• Available tenures will be 5 ½ years and 7 years.
• Profit to be disbursed on monthly basis.
• Free chequebook facility (introductory offer).
• All deposit to be invested in the bank under Mudarabah arrangement.
• Weight ages are announced in the beginning of each month. Higher weight age, as
compared to other products, will be assigned for declaring high rate of return.
Minimum Investment Amount Offered to
Rs.100,000/- General Public
Rs.50,000/- Widows and Senior Citizens
• No profit will be paid in case of encashment within 6 months. A complete table is

given as under
Pre Mature Encashment Applicable Profit Rate
Within 6 Months No Profit
Within 1 Year Lower Saving Rate
Within 2 Year 6 Monthly COII Rate
Within 3 Year 1 Year COII Monthly Rate
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Within 4 Year 3 Years COII Monthly Rate
Within 5 Year 3 Years COII Monthly Rate
10. Meezan-Monthly Mudarabah Certificate (MMC)

• The minimum investment required is Rs. 100,000

• Monthly profit payment will be given to customers’ current or saving account
• Pre-mature withdrawal options available.
• Bank balance certificates
• Free Online Banking services at our branch network nationwide.
• 24/7 Call Center with complete Tele-banking services.
• All deposit to be invested in the bank under Mudarabah arrangement.
• Weight ages are announced in the beginning of each month. Higher weight age, as
compared to other products, will be assigned for declaring high rate of return.
• If early encashment is within one month, no profit shall be applicable to the
customer.
100 K - 4.99 M
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5M - 9.99 M
10 M - 49.99 M
50 M - 99.99 M
100 M - 499.99 M
500 M & Above
11. Meezan-Dollar Mudarabah Certificate (DMC)
• Acceptable currency will be US Dollar only.

• Open to individuals as well as corporate clients.
• Minimum investment amount per certificate- US $ 10,000 and above.
• Available tenures- 3 Months, 6 Months, 1 Year and 3 Years.
• Deposit to be invested under ‘Mudarabah’ arrangement.
• One pool for both Savings Account and Dollar Mudarabah Certificate is used with
the off -shore placement of funds under Shariah Compliant avenues through the
Treasury Department.
• Profit sharing ratio for the Mudarib(Bank) and Rub ul Mal(Customer) is
announced at the beginning of each month.
• Weightage for all the terms shall be assigned and announced at the beginning of
the month.
• Profit to be disbursed on maturity for 3 and 6 months DMC. For 1 and 3 year
DMC bi-annual profit payment option is also available.
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• In case of premature withdrawal, the profit on Savings Account for the period
completed will be paid. Rate for the previous month will be applied for the
incomplete period. No profit will be paid for encashment before 30 days.
10 K - 49.99 K
50 K & Above
3 & 6 Months At Maturity
1 & 3 Years 6 Monthly & At Maturity
Pre mature en-cashment Policy
Pre Mature Encashment Applicable Profit Rate
Within 1 Month No Profit
After 1 Month FCY Saving Rate
12. Meezan Providence Certificate (MPC)
Basic features of the product
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• 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 registered or unregistered Employee Provident/Gratuity/Pension
Funds with operations based in Pakistan.
• Minimum investment amount: PKR 1,000,000
• Available tenures of 2, 3, 5 and 7 years.
2 Years 6 Monthly & At Maturity
3, 5 & 7 Years At Maturity
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.pk etc
Major Competitors of Islamic Banks
38
1. Albaraka Islamic Bank
2. BankIslami
3. Dubai Islamic Bank Pakistan Ltd.
4. Emirates Global Islamic Bank Limited
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Meezan Bank structure of Sahiwal branch
Hierarchy Chart
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Number of Employees
In Sahiwal branch there are 16 numbers of employees. At Meezan Bank we

are committed to providing you a complete range of Shariah compliant banking services
that are up to the highest professional standards.
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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: [email protected]
SHARE HOLDING STRUCTURE
Shareholding Structure Rs. in million
Pakistan Kuwait Investment Company (Pvt.) Limited 307
Shamil Bank of Bahrain E.C 303
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Islamic Development Bank, Jeddah 109
Kuwait Awqaf Public Foundation 97
Others 354
Paid up Capital 1,170
Employee Share Option Plan 99
Total 1,269
Comment on the Meezan Bank structure
When I have start internship of Islamic Meezan Bank at 2 nd September 2008.

In first day I have sat to Mr. Asim. He has very good person and he have help me in this
department that they have customer relationship department and try to good information
to customer or me relative to Meezan Bank so I have under your work of one week. All
members of the branch are very committed to their work. According to hierarchy chart
from top to bottom are very committed of work and prove helpful for me during my
internship
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Plan of your internship program
Introduction of Sahiwal branch
Bank has decided to open a branch in Sahiwal due its business market or
market potential, so that inauguration ceremony held in 29th Dec.2006. Today only one
branch in sahiwal and no any branch near city or town. Then they are more work in this
branch. And this branch have appointed sixteen officers, they have worked of meezan
bank. 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.
Duration of my internship program
I am started my internship program 2 n d Sept. 2008 and ending

date of this program 14 t h Oct. 2008.
I have done in all mostly work in every department.
• Marketing department
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• Advances
• Deposits
• Foreign exchange
• Clearing department
• Car finance department
• On lining department
Training program
1st week
I started my first day of internship with the introduction of bank employees
and with introduction of bank departments. In This week just know how work done in the
various departments in the bank Like:
• Finance
• HR
• Marketing
• IT
• Operation Management etc….
I knew about the purpose of the bank and the functions of the bank and judge
the practical performance of the departments.
I started my second day of internship with the lecture of the bank officer. He
told us about Riba and its types:
 Riba al Nasiah
 Riba al Fadl
• Then he told about important element Basic Mode of Financing in which
Mudaraba and Musharaka lies.
• I learnt about characteristics and procedure of Mudaraba and Musharaka.
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• Then I moved to Accounts Department for learning something new.
• I learnt about IBTDR (Islamic Bank Term Deposit Receipts) and knew what
its meaning and functions.
• Basically IBTDR involves Accounts:
Saving Deposit accounts
Term Deposit accounts
• I knew about different types of saving accounts like MBA (Meezan Bachat
Account), KMA (karobari Munafa Account), COII, MMC, MAC and etc.
these are MUDARABA based deposits products.
• I learnt about the profit rates of the accounts and procedures to open these
accounts.
• I learnt about also CDR(Call Deposit Receipts) and its procedure and knew its
purpose and how to fill it an proceed
2nd week
I started this week with the lectures of the Bank officer about bank and its
performance. I learnt the actual means of practical work in the bank. First of all I started
my work in the ACCOUNT OPPENING DEPARTMENT of the bank in which I learnt
how an account can be opened in a bank, which documents are necessary to attach it with
the account opening form and how many kinds of account are used in bank like
• Single
• Joint personal
• Sole proprietorship
The requirement for opening these types of a/c are

• Select the nature of a/c
• Attested photo of applicant
• Then the permanent address
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• NIC copy.
• occupation
• The reference of any person who has already the a/c or any respected
personality
• The other information related to the a/c filled on choice of applicant.
• The signatures are done on form as well as on the specimen signature card
from where the signature will be scanned as a record in computer
(The forms are not totally green or pink in color actually the paper is white and in
background meezan Bank is written in the green and pink color which give the form
shade)
• Partnership
• Limited company
• Trusts
• Clubs
• Association etc.
The requirement for opening these types of a/c are
For partnership
• Attested photocopy of CNIC of all partners

• Attested copy of Partnership Deed duly signed by all partners of firm.
• Attested copy of Registration Certificate with register of Firm. In case the
partnership is unregistered this fact should be clearly mentioned on the a/c
opening form
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• Authority letter, in original, in favor of the person authorized to operate on the a/c
of the firm.
For Joint Stock Company
• Resolution of Board of Directors for opening of a/c specifying the person(s)

authorized to operate the company a/c
• Memorandum and articles of association.
• Certificate of incorporation
• Certificate of Commencement of Business
• Attested photocopies of CNIC of all directors
• List of directors on Form 29 issued by the Registrar Joint Stock Company
For Clubs, societies and Associations
• Certificate copies of: Certificate of registration

By- law / rules &regulations
• Resolution of the Governing Body / Executive Committee for opening of a/c
authorized the person to operate the a/c and attested copy of the CNIC of the
authorized person(s)
• As understanding signed by all authorized persons on behalf of the institute
mentioning that when any change takes place in the persons authorized to operate
on the a/c , the banker will be informed immediately.
For Agents a/c
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• Certificate of power of Attorney
• Attested photocopy of CNIC of the agent.
Trusts a/c
• Attested copy of Certificate of Registration
• Attested photocopy of CNIC of all the trustees
• Certified copy of instrument of Trust.
"The most difficult task related to bank for a common citizen is to open an a/c in any
bank" said Sir Tanveer.
Then the two applicant forms are filled in front of me. It took too much time to gather the
information from applicant.
• I filled up some forms for practical practices and knew about the nature of the
form.
• I practically performed how letter of thanks attached to the forms and send to
the customer.
• I learnt about the different types of stamps, which are necessary for the
account opening and learnt about the use of the stamps at the right place.
• I learnt how to attach signature specimen card to the account opening form for
bank record.
3rd Week
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I started my week of internship with the daily lectures of the bank officer
(Mr. Faisal Manzoor [OGII]) who is the organizer of internship program for internees
in meezan bank.
• I learnt about the role of STATE BANK OF PAKISTAN in Pakistan’s

economy from the lecture and know about the prudential regulations briefly
not explanatory which are
• Regulation M-1 Know Your Customer (KYC)
• Regulation M-2 Anti-Money Laundering Measures
• Regulation M-3 Record Retention
• Regulation M-4 Correspondent Banking
• Regulation M-5 Suspicious Transactions
In account opening department I learnt the use of ATM card and learnt how to fill
ATM form.
Then I know how to receipts are filled.

I learnt how on line payments are made and how cash or receipts are
transferred.
• First of all I learnt about ATM PIN ISSUANCE procedure and knew why it is
necessary for customer or account holder.
• Then he showed us module in computer that how he enters the data of
customer and how it proceeds.
• After proceeding computer shows a pin number that is issued for that
customer who filled the form for ATM. And this work is done means pin
issuance by Head Office.
Then I learnt about the term ATM Cash Replenish. He told us that how it
works and what its procedure and why it is used.
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4th Week
I started my working day with some work, which has to complete from the
previous week with account opening forms.
• I learnt about inward and out ward clearing and learnt how the transactions are
made.
• I learnt how to write the inward clearing cheques in the transaction record
book.
• I learnt to deduct the return cheques from the added amount of all cheques.
I learnt the entry of pay orders in the record book.
Know how of employees.

THEN
I started my work again in Accounts Department. The officer also
does/handle the other work Like REMITTANCE department.
• I learnt about the PAY ORDER and DEMAND DRAFT. He told us the
difference of Pay Order and DD.
• I learnt also about the procedure of it. I also saw the Pay Order cheque and
knew about its attributes.
• But DD is not made in Sahiwal Branch. But sometimes if necessary then they
made it. But mostly Pay Orders are made and send it to other cities also. Only
Meezan Bank provide this opportunity of Pay Order to send outside the city
also.
• I also learnt about the facility of LOCKERS and its functions.
• Lockers have 3 types of it:
Small Size Lockers
Medium Size Lockers
Large Size Lockers
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• The officer told us its functions and charges and I knew about that how can
hold locker and which documents are required for getting the lockers. Lockers
are the fire proof.
I attended the weekly meeting of bank manager with employees and attended the lecture
about modern way of banking delivered by the bank manager for the success if the
branch’s business.
5th week
I started my day with the daily lecture and general discussion about banking
and scope of banking in Pakistan in coming years.
• I revised all practices according to account opening departments and cleared
my all confusion related to that department trough got work in that field.
• I gave my feedback as a internee about the environment of the bank and about
my work experience in that department
I started my day with the daily lecture about Bank.
After that I went to ACCOUNTS DEPARTMENT and started my work. First
of all I cleared my all confusions about the previous topics then I started to learn
further.
• I learnt about FTT (Foreign Telegraphy Transfer) also known as SWIFT
Message.
• In it I knew that how can get and send money from and to foreign countries.
• He told us its procedure and function. I knew about how the message can
create and what sources are used for it.
• Then I learnt about SMS ALERTS. He told us its function and I knew about
that what information is required for its activation and what information it
gives to customer through SMS.
• I learnt what are the Local Posting and Online Transferring and how it is
done.
52
• Then I learnt what Stop Payment is and how it is performing and what its
terms and conditions.
• I knew about what Account Closing is and what its procedures to close it and
what charges are required for it.
• Then I saw the module of daily Accounts and Expense Entries posting. And
knew about the reason of entering it.
6th week
I started my 6th week of internship with the lecture of the Bank officer who
is Mr. Salman Ali, the lecture was about Islamic banking and its differences in convention
banking.
 I knew about the Shariah and the sources of Islamic Shariah.
 Then I learnt about Islamic Banking and knew what its actual meaning.
 In Islamic Banking a term Riba Free is used which means “Avoid Interest”.
 Islamic Banking is a system of Trade where Goods and Services are sold and
Capital is invested to earn Halal profit by taking Risk.
 Interest Free Banking is subset of Islamic Banking concept representing a number
of Banking Operations which avoid Interest.
 I learnt about Convention Banking which is based on Pricing money and earning
Interest.
 Apparently Islamic and Convention Banking may look same but Islamic Banking
is permissible means “Allah has permitted trade and forbidden Riba”.
 I learnt about difference b/w Islamic and Convention Banking up to some extent.
 Then I moved to next department that was ACCOUNTS DEPRTMENT.(with the
hold of IT deptt, Remittance deptt)
 I started my work in Accounts Department.
 The Officer who is Mr. Faysal gave the overview of his working that he does.
 I learnt about cheques how to fill them and knew about its functions.
 I learnt that in banking cheque is known as Dr. Instrument.
53
 Then I learnt about cross cheque and cross cheque has two types:
Simple crossing
Special crossing
 I knew also another type of cheque that is Order Cheque and its purpose and
function. That day I learnt about cheque procedure and its use in different ways.
Reaction and Feedback
I learnt some different things, terms, differences according to Islamic

banking and learnt how to IT and Remittance department do operations in bank. All
learning procedures were useful and according to the job.
They provide us good learning environment and feed some extra knowledge
to go for practical life.
Training program
Introduction of all Departments
There are different department of meezan bank. Introduction of all department of
meezan bank, these are as follow.
1. Account department
• Rupees current account
• Rupees Saving account
• Dollar saving account
• Meezan bachat account
• Karaobari Munafa account
2. Car ijarah
3. Meezan easy home
4. Clearing department
54
Detail of all departments
Account department
Rupees current account
Meezan Bank is pleased to offer Riba-Free Current Account, a flexible

Rupee based account that is ideal for individuals and businesses looking for Shariah
compliant banking and professionalism both under one roof.
The Meezan Bank Current Account is a comprehensive Halal method of

acquiring a secure and easily maintainable Riba Free bank account.
Bundled with 24/7 and special banking services, the Meezan Bank Current
Account is an innovative value added account which provides customers both ease of
utility and unmatched service quality.
Key features of the Riba -Free Current Account
• Free Online Banking services at all Meezan Bank branches nationwide

• Instant access to funds at any online branch
• 24/7 Card your ATM & Debit Card in one
• Personal financial consultancy services
Specialized 8 to 8 banking at selected branches.
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Rupee saving account
A unique bank account that offers the opportunity to earn Halal profits, while
enjoying a range of added benefits. It can be opened with a minimum amount of only
Rs.10,000. The profit on this account is calculated and paid on a monthly basis, and
comes with a variety of free benefits, no restrictions on transactions, priority banking and
more.
• Minimum amount required to open account= Rs. 10,000

• Riba Free COII Holders may open accounts without any minimum balance
requirements
Riba Free Rupee Saving Account works under the principles of Mudarabah
and is strictly in conformity with the rules of Islamic Shariah. Profit calculation and all
banking transactions are in strict adherence to the Islamic Shariah, monitored by our
Shariah Advisor and the Shariah Supervisory Board.
Key features
Apart from first class service and personalized attention that our customers
get when they bank with us, we offer the following additional conveniences:
• Instant access to funds at any online branch.

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• Specialized 8 to 8 Banking at selected branches
Dollar saving account
Meezan Bank is pleased to offer Riba-Free Dollar Saving Account, a

foreign-currency based investment opportunity that is set up on the principles of Shariah
and as a result is free from the element of interest.
With a minimum of only $100 you can open a Dollar Saving Account with us
under a Mudarabah arrangement that is strictly in conformity with the principles of
Islamic Shariah. The return earned on the Mudarabah pool is calculated every month and
the profit ratio 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
shall be disbursed to you every month.
Additional Features
Apart from first class service and personalized attention that our customers
get when they bank with us, we offer the following additional conveniences to our
customers:
• Personalized cheque books

• No restriction on withdrawals or number of transactions.
• Monthly profit payment
• Taking stop payment instructions
• Taking hold mail instructions
• Issuance of duplicate statement of account
57
Meezan bachat account
Meezan Bachat Account is a unique saving account that provides high

monthly returns with the flexibility to withdraw savings if needed. Thus Meezan Bachat
Account offers a higher expected rate of return with the convenience of a savings
account.
With a Meezan Bachat Account, you are entitled for a higher the profit with a
higher account balance. You receive profit even if your balance falls below Rs. 25,000/-
in any one month. Profit is credited to your account every month and is calculated with
reference to the minimum balance maintained in the account during the preceding month.
The Riba-Free Meezan Bachat Account works under the principles of

Mudarabah and is strictly in conformity with the rules of Islamic Shariah. Profit
calculation and all banking transactions are in strict adherence to the Islamic Shariah,
monitored by our Shariah Advisor and the Shariah Supervisory Board.
Key Features
Enjoy a range of valuable features including:
• Highest expected rate of return

• Riba-free profit paid every month
• Minimum balance for account opening is just Rs.25,000/-
• Maximum balance limit for getting highest profit rate is Rs. 1,000,000/-
• Waiver of application fee for Car Ijarah & Easy Home for accounts with
minimum balance of Rs. 500,000
• Free bank balance certificates.
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• 24/7 Internet Banking – free and instant access to your account(s) anytime &
anywhere
• Personal financial consultancy services.
• Specialized 8 to 8 Banking at selected branches
Karaobari Munafa account
Karobari Munafa is a savings account specifically tailored for large

Corporate or Goop controlled entities. It allows customers to earn higher returns on
surplus cash balances. It has no preset transaction limits and comes with a variety of free
packaged benefits.
Key Features
• Profit will be calculated on a Daily Product Basis
• Minimum balance requirement for account opening is Rs. 1 Million
• No restriction on deposits and withdrawals
• Free facilities: cheque books and pay orders
• Dedicated account / relationship manager
The Karobari Munafa Account works under the principles of Mudarabah and
is strictly in conformity with the rules of Islamic Shariah. Profit calculation and all
banking transactions are in strict adherence to the Islamic Shariah, monitored by our
Shariah Advisor and the Shariah Supervisory Board
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Car ijarah
Car Ijarah, Pakistan’s First Islamic Car Financing As a step towards Meezan
Bank’s mission to provide a one-stop shop for innovative value added Shariah compliant
products, Meezan Bank’s Car Ijarah unit provides a car financing, based on the principles
of Ijarah and is free of the element of interest.
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.
Meezan Bank’ Car Ijarah is a car rental agreement, under which the Bank
purchases the car and rents it out to the customer for a period of 3 to 5 years, agreed at
the time of the contract. Upon completion of the lease period the customer gets
ownership of the car against his initial security deposit.
Car Ijarah also features Used Vehicles

In addition to our leasing of new cars, Meezan Bank also provides the unique
opportunity of leasing second hand, both locally assembled and imported vehicles. This
feature is specifically designed as a highly economical option. The Used Car Ijarah
facility is made available at a minimum-security deposit as low as 20%. Financing of
used cars are subject to a selection criteria.
Shariah Compliance
Car Ijarah, designed under the supervision of Meezan Banks Shariah

Supervisory Board, is unique to car leasing facilities provided by other banks.
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• Difference in the Rights & Liabilities of Owner v/s User Calculation of lease rentals
in case of total loss or theft of vehicle Takkaful instead of Insurance Permissibility
for Penalty of Late Payment of Rent under Islamic Shariah.
• Low monthly rental

• Rental paid after delivery, not in advanced
• Fastest processing and delivery
• Tracker option available
• All new, used, local, imported and luxury vehicles can be financed
Meezan easy home
Welcome to Pakistan’s long awaited totally Shariah-compliant Home Finance

facility! One that is comprehensive, affordable, and totally hassle-free. For at Meezan
Bank, we are committed to meeting our customers’ needs, in a truly Shariah-compliant
manner coupled with dedicated service excellence. Meezan Bank’s Easy Home is the
answer you’ve been waiting for.
Why is Halal home finance so important to you?

Owning your own home is one of life’s most important achievements. It represents your
security, stability, and is a great blessing in itself. It provides that all-important safety and
comfort for you and your loved ones.
However, in today's often unpredictable and costly environment, saving the

required money can take a lifetime in itself. Rising property prices, taxes, inflation,
currency devaluation… it’s all a very hard bargain. On the other hand, owning your own
home and paying an easy installment, which takes you step by step towards complete
61
ownership, is so much better than paying rent which ultimately only adds to your
expenses.
Added to that is your desire to stay away from interest based financing and
be totally riba-free, thus achieving that complete inner satisfaction and peace of mind.
Why not have the best of both worlds? Isn't that what you are working so hard for
anyway?
Islamic Financing on a Diminishing Musharakah basis

With Easy Home you participate with Meezan Bank in a joint ownership of your
property, where the Bank will provide a certain amount of financing (usually up to 80%).
You agree to a monthly payment to the bank of which a component is for the use of the
home, and another for your equity share. In fact, the total monthly payment is reduced
regularly as your share in the property grows. When you have made the full investment,
which had been agreed upon, you become the sole owner with a free and clear title to the
property.
What specifically makes Easy Home Shariah compliant?

As a Diminishing Musharakah it conforms to Shariah laws specifically related to
financing, ownership and trade. Taking ownership through a partnership and then
transferring complete ownership to the consumer instead of simply lending money is the
major factor that makes our product Shariah compliant. The nature of the contract is a co-
ownership and not a loan because the transaction is not based on the lending and
borrowing of money but on the joint ownership of an asset. Meezan Bank shares in the
cost of the asset being purchased, for example in the case of buying a home. In
conventional mortgages the interest charged is a mark-up on the money lent. The profit
charged by Meezan Bank is the utilization payment for your use of our share throughout
the life of the contract. Your payments to Meezan Bank are completely riba-free.
Why is the profit margin charged by Meezan Bank correlated to the

conventional mortgage market trends? At Meezan Bank, the profit margin is directly
correlated to market trends to provide a competitive product to our customers. Shariah
62
allows the use of any conventional market factor as a benchmark to determine the profit
rate of a particular product. The mere fact that the applied profit rate of our product is
based on similar factors used in determining the applied rate of interest of a mortgage
does not render the transaction or the contract invalid from the Shariah perspective, and
neither does it make the transaction an interest-bearing one. On the other hand, it is the
underlying structure of the product that determines its Shariah compliance.
Buy, Build, Renovate, or Replace
• Buying a Home is Easy & Halal
Choose it and be ready to move in. Meezan Bank will finance up to 85%
of the appraised value of your new home or up to a value of Rs. 40 million, with a
financing tenor of up to 20 years.
• Building a home is Easy & Halal
For that special home you want to build yourself. Meezan Bank provides
financing up to 70% of the appraised value or Rs. 40 million, for a tenor of up to 20
years.
• Renovating your home is Easy & Halal
Making your home even better or just repairing it. Meezan Bank helps
with financing up to 30% and a financing tenor of up to 15 years.
• Replacing your existing Mortgage is Easy & Halal
The wait is over. Now continue to enjoy your home but with the added
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satisfaction and peace of mind you have always wanted. Meezan Bank will help you
switch your existing liability over to us and let you enjoy the benefits of Halal and
totally flexible financing. Financing up to Rs. 40 million and a tenor of up to 20
years.
Special Benefits of Easy Home
Flexible Financing Tailored to Support You
• High financing amounts

• Maximum financing against property value
• Flexibility to make partial prepayments
• Minimal processing charges
• Affordable and competitive installment amounts with a regular
reducing monthly rental
• Rate relaxation for select MNCs & LCGs
Quick Processing Time
Absolutely hassle-free. Quick turn-around-times, with no burdensome

complexity or excess paper work. It is simple, halal, and easy!
Even the eligibility is Easy
We at Meezan Bank, as prescribed by Islamic Shariah, seek to guarantee

equal access to financing for all qualified applicants, while ensuring that the
qualification process is bias-free.
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Come and take the step towards Riba-Free financing for your home, made
easy with Meezan Bank's Easy Home!
CLEARING DEPARTMENT
In clearing I worked with Mr. Rashid the basic function of the clearing
department is to facilitate the customer. It provides them the services in collection of their
cheque in other banks. CLERING actually means the transfer of funds from one branch
of bank to the other branch of the same bank or the other bank on which the instrument is
drawn without involving cash through state banks clearing house. Where there is no
branch of state bank this function is performed through NATIONAL BANK OF
PAKISTAN.
Clearing process
On every morning of a working day the clearing officer visits the

NATIONAL BANK OF PAKISTAN where clearing officers of all banks are present and
they exchange instruments with each other. The representative of BANK also does the
same. He delivers the instruments to the different banks and collect the instruments
drawn on itself and others branches of own bank. The instruments drawn or received are
entered into a sheet which shows whether clearing is in favour or in against. The
instruments received from the other banks are entered in the inward bills for collection
register. The instruments include those drawn on other branches as well for clearance.
Branches inform their main branches about fate of instruments either passed or
dishonored. The representative meets again at clearing house and tells each others about
the instruments either clear or dishonored which they already delivered each other in the
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morning. The necessary entries are being made in the books of State Bank of Pakistan .In
this way account is settled.
The main branch maintain the account with State Bank of Pakistan ,so the account of this
branch are debited or credited at SBP in respect of itself and others branches. It is now
inter branch matter to set these account. In this regard main branch issues the inter branch
credit advices or inter branch debit advices for favorable or against clearing respectively
relating to different branches. The bank collects two type of clearing
1- Outstation bills for collection
2- Locals bills for collection.
The local bills for collection include those instruments which are drawn on branches of
other banks which have account with SBP in the same city in which the collecting branch
is operating. The rest are outstation bills for collection from outstation branches.
Stamping procedure
In stamping procedure the pay-in-slip counter foil the following three stamps are used. If
the cheques is for the same bank and drawer and the payee both have the account in the
same bank the simple bank stamp is used and this stamp indicate the transfer of cheque
from one account to another account. This cheque is directly moves towards posting in
computer terminal where the computer operator debit one account and credit the account
of other party. The stamp is known as the transfer stamp.
If the cheques are received from other bank and drawer’s account is not in the bank then
cheque received stamp is used. This cheque is represented in the clearing house, date is
also mentioned on the stamp.
If the cheque is from out of the city then it is send for the collection.
Stamping on the cheques
After receiving the cheque and issuance of the counter foil to the client stamping process
start on the cheques the following stamps can be used.
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a) The name and the branch name of the bank stamp is used on the front side
of the cheques. This stamp is used on all types of cheques. This stamp is
known as crossing stamp.
b) The second stamp used is the clearing stamp on the front side of the
cheques. It also indicates the presenting date of the cheques. If the cheques
is dishonoured and deposited again for clearing, the clearing stamp is used
again with new date of presenting. So the clearing stamp is necessary
wherever the cheques are presented for clearing.
c) The third necessary stamp which is the endorsement indicate the paying
bank to “payees account credited”. It is the confirmation of outward
clearing.
The whole process requires about only one day, after one day the customers
account is credited and the customer can make the transactions.
Collection (OBC and IBC)
. In collection the bank undertakes to collect the proceeds of outstation cheques for their
customers from drawee bank. This is a facility given to the customer. Internally in banks
following two processes of clearing done:
1. OBC (outward bills for collection)
2. IBC (inward bills for collection)
1. OBC
OBC stand for outward bills for collection. In outward collection bank receives the
cheques from customers. At this time the banker passes an entry in the books in which
customer’s liability is debited and banker’s liability is credited. This entry is reversed on
realization. After realization bank gives credit to customers account.
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Procedure
In this case bank send the cheque to its branches in other city or if bank has not its own
branch in a city then it will send it to the bank on which it is drawn. First of all OBC
number from the bank register is given to the cheques. Then OBC forwarding schedule is
made. Original copy is attached with the deposit slip for record purposes. Commission is
charged on OBC with is 0.20% of the principal amount of the cheques, minimum RS 50
is charged. This rate is for the cheques where the bank has its own branch otherwise
commission is by 0.20%. For documentary bills 0.35% is charged. The postage charge is
RS 75.
2. IBC
IBC stand for inward bills for collection. Bank receives the cheques drawn on it from the
banks in other cities. Bank gives debit to the party who issued the cheque and send credit
advice to the branch to the branch sending the cheques.
Procedure
The procedure of the IBC is this that first of all inters branch credit advice is made. On
which the bank gives the IBC number. Then the head office vouchers will be credited and
CLG vouchers will be debited. After that it is filled in the register for record and also
posting is made in the computer as well.
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Structure of the Finance Department
Department hierarchy
Finance Manager
Officer Officer Officer
No. of employees
There are four members of finances department. They have help to each other
when they have faced different problems.
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Finance & accounting operations
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of financial statements in conformity with approved

accounting standards requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Bank’s
accounting policies. The areas involving a higher degree of judgment or complexity, or
areas where assumptions and estimates are significant to the financial statements are as
follows:
• Critical judgment in classification of investments in accordance with the Bank’s
policy (notes 6.4.1 and 10).
• Provision for diminution in value of investments (notes 6.4.6 and 10.3).
• Provision for non-performing financings (notes 3.2.3 and 11.7)
• Staff retirement benefits (notes 6.8, 6.9 and 33).
• (Depreciation and amortization methods of operating fixed assets (note 3.2.1,
3.2.2 and 12)
• Assumption and estimation in recognition of provision for taxation (current and
prior years) and deferred taxation (notes 3.1.1, 6.7,17, 22.8 and 29).
Estimates and judgments are continually evaluated and are based on
historical experience and other factors, including expectation of future events that are
believed to be reasonable under the circumstances.
During the year, a new schedule has been introduced for taxation of
banks in Pakistan. According to the provisions of the schedules, provision for doubtful
financings falling under the category of "Doubtful" or "Loss" will be allowed as a
70
deduction in the year in which the provision is made. The schedule is applicable for the
financial year ending 31 December 2008. Currently, provisions for financings are allowed
as a deduction when they are written off. The schedule does not contain transitory
provisions with respect to provisions made before the applicability of new schedule. The
matter of introduction of such transitory provisions has been taken up with Federal Board
of Revenue by Pakistan Banks Association and based on discussions to date the Bank's
management is confident that such provisions will be made in the new schedule.
Accordingly, the deferred tax calculations assumed that such transitory rules will be made
and the bank would be able to get the benefit of the asset so recognized.
EFFECT OF CHANGE IN ACCOUNTING ESTIMATES
Effective January 1, 2007, the Bank has changed its estimate in respect of
charging depreciation on additions to tangible fixed assets. The Bank now charges
depreciation from the month of acquisition and up to the month preceding the disposal.
Previously, full year's depreciation was charged on all additions to tangible fixed assets
during the year while no depreciation was charged in the year in which the assets were
disposed off. Had there been no such change, the depreciation for the year would have
been higher by Rs. 38.717 million and tangible fixed assets would have been lower by
Rs. 38.717 million.
Effective January 1, 2007, the Bank has changed its estimate in respect of
charging amortization on additions to intangible assets. The Bank now charges
amortization from the month of acquisition and up to the month preceding the disposal.
Previously, full year's amortization was charged on all additions to intangible fixed assets
during the year while no amortization was charged in the year in which the assets were
disposed off. Had there been no such change, the amortization for the year would have
been higher by Rs. 1.533 million and intangible assets would have been lower by Rs.
1.533 million.
During the year the Bank, in line with the requirements of BSD Circular
No. 07 of 2007 issued by the SBP, changed its method of measuring provision against
non-performing financings whereby the Forced Sale Value (FSV) of the collateral is not
71
considered in determining the provision. Had there been no change the provision against
non-performing financings would have been lower by Rs. 39.552 million And financing
would have been higher by Rs. 39.552 million.
Finance operation
Meezan Bank Pakistan, the Premier Islamic Bank
Meezan Bank Limited is a publicly listed company. It was incorporated in

Pakistan on January 27, 1997 and started operations as an investment Bank in August
1997. In January 2002, Meezan Bank was granted first full-fledged commercial banking
licence dedicated to Islamic Banking, by the State Bank of Pakistan. Meezan Bank is the
largest Islamic Bank in Pakistan with a network of 100 branches in 31 cities.
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.
The Bank has achieved a strong balance sheet with excellent operating
profitability, including a capital adequacy ratio that places the Bank at top of the industry,
a long-term entity rating of A+, and a short-term entity rating of A1.
The Bank’s main shareholders are leading local and international financial
institutions, including ‘Pak-Kuwait Investment Company’, the only AAA rated financial
entity in the country, the ‘Islamic Development Bank of Jeddah’, and the renowned
‘Shamil Bank of Bahrain’. The Bank has an internationally renowned, very high caliber
and pro-active Shariah Supervisory Board presided over by former Justice Maulana
Muhammad Taqi Usmani
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Function of Finance Department
Financing system of Meezan Bank
Consumer Finance (CF)
Meezan Bank’s CF business contributed positively towards the overall

growth of the Bank. With pioneering and prime mover initiatives in both Auto and
Housing Finance, the division has now established sound business infrastructures,
penetrated key market segments, and built recognizable brand identities in not only the
Islamic but overall banking arena. With the proliferation of the market as a whole through
new entrants, the aggressive growth of Islamic banking and the burgeoning demand for
consumer solutions, Meezan Bank is now focused on maintaining its market share,
product innovation and above all profitable growth.
The division consolidated its position in the industry with impressive

growth in the consumer asset financing segments in which it operates namely Car Ijarah
(Auto leasing) and Easy Home (Islamic Housing Finance). In the short span of a few
years, Meezan Bank’s consumer business has achieved approximately 3% market share in
Auto finance and almost 4% in Housing finance with high quality portfolios evidencing
excellent risk parameters and low incidence of over-dues.
73
Market Share
Car Ijarah
The Bank’s Car Ijarah or leasing product is now more than four years old
and stands at Rs. 4.1 billion and includes over 10,000 active vehicle contracts, inclusive
of new and used cars. Growth has been steady during this period, within dynamic and
often uncertain economic conditions.
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Healthy portfolio management and risk diversification is evident across the
portfolio, with 55% of the portfolio resting in the 3 year tenor, 18% in 4 years and 27% in
5 years. Furthermore, 58% of financing is in the 800 – 1000cc category, the majority of
stable middle market consumer credit, with light commercial vehicles and imported units
at 6% and 4% respectively. About 35% of acquisition comes from Karachi, with the
remainder spread over numerous urban centers across the country. The business also
maintains an auto dealership network presently sized at almost 250 across Pakistan.
Stringent underwriting criteria is evidenced through the low percentage of non-
performing contracts that currently stand at 1.3% of the total portfolio.
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As the nation’s first Islamic Housing Finance facility, Meezan Bank’s Easy
Home completed its 4th year in December 2007. The product is based on the concept of
Diminishing Musharakah and currently offers a number of variations to suit different
customer needs with options for buying, building or renovating a home, as well as
replacing an existing mortgage. Customers may also choose from a number of payment
variations to suit individual budgets.
Portfolio ENR (ending net receivable) increased by 21% during the year and currently
stands at Rs. 3,158 million representing 1,236 customers across Pakistan.
• No application fee
• Ease of acquiring any new locally assembled car
• No upfront Insurance Payment
• No advance Rental
• Available in tenures of 3, 4 and 5 years
Car Ijarah Also Features Used Vehicles
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In addition to our leasing of new cars, we also provide the unique opportunity
of leasing second hand locally assembled vehicles as well. This feature is specifically
designed as a very economical option as well. With a minimum security deposit as low as
30%, our used Car Ijarah facility is at your service.
Used Car Selection Criteria
Selecting a used car is very simple, all you need to ensure is:
• That the second hand car you select should be from its first owner.
• The vehicle should not be older than 5 years when selected by you for Car Ijarah.
• At the time of termination of our Ijarah agreement, the vehicle should not be more
than 8 years old. This means that if a car is 5 years old, the Car Ijarah tenure is not
more than 3 years and if its 4 years old, the tenure may be set for a 3 year or 4
year term.
• This facility is for locally manufactured cars of Suzuki, Toyota, Honda & the new
model of Santro only.
• Second hand vehicles selected should not be worth more than Rs. 1 million and
less than Rs. 250,000/-. Meezan Bank will have the vehicle valued by an
independent valuation company accordingly.
Approved by Meezan Bank's Shariah Board
Car Ijarah is designed under the supervision of Meezan Bank's Shariah Supervisory
Board and is approved by the Board.
The Shariah Board comprises of the following eminent scholars of Islamic finance:
77
• Justice Muhammad Taqi Usmani. (Pakistan)
• Dr. Abdul Sattar Abu Ghuddah (Saudi Arabia)
• Sheikh Essam M. Ishaq (Bahrain)
• Dr. Muhammad Imran Ashraf Usmani (Pakistan)
Rental Calculations
To calculate the monthly rentals simply multiply the cost of the car with the
rental factors given in the table below.
Rental Calculation for new cars**
Security Deposit 3 years 4 years 5 years

20% 0.028821 0.023131 0.020097
25% 0.027242 0.021898 0.019047
30% 0.025664 0.020666 0.017997
35% 0.024085 0.019433 0.016947
40% 0.022507 0.018201 0.015897
45% 0.020929 0.016969 0.014847
50% 0.019350 0.015736 0.013797
* No separate Insurance will be charged
For example: If you are interested in a car costing Rs. 300,000 for a tenure of 5 years and
are willing to pay a 50% Security Deposit, your monthly rental would be,
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Rs. 300,000 X 0.013797 = Rs. 4,139/- per month for 5 years **
(**All other costs will be charged at actual)
Rental Calculation for used cars**

Security Deposit 3 Years 4 Years 5 Years
30% 0.026186 0.021200 0.018552
35% 0.024572 0.019931 0.017465
40% 0.022959 0.018663 0.016378
45% 0.021346 0.017395 0.015290
50% 0.019732 0.016127 0.014203
* No separate Insurance will be charged
For example: If you are interested in a car costing Rs. 300,000 for a tenure of 5 years
and are willing to pay a 50% Security Deposit, your total monthly rental would be:
Rs. 300,000 x 0.014203 = Rs. 4,261 per month for 5 years**

(**All other costs will be charged at actual)
Documentation required for Car Ijarah
It is very easy to apply for Car Ijarah, just bring the following documents.
Individuals/Self-Employed Professionals/Businessmen
1 Copy of NIC
2 Two recent passport sized photographs
3 Recent Utility Bill (Electric/Gas/Water) received at the residential address
4 Last Six Month Bank Statement
5 Last Six Month Bank Statement of Business (for Businessmen)
79
6 Certified/Original copy of Recent Pay slip (for Salaried Individuals)
7 Copy of Rent Agreement (if applicable)
How can I apply?
Simple! All you need to do is fill out a customer application form, attach
the required documents mentioned in the form and get your financing approved in a 1-2
working days. To experience the comfort of our personalized services just visit your
nearest Meezan Bank Branch.
Easy Home
As the nation’s first Islamic Housing Finance facility, Meezan Bank’s Easy
Home completed its 4th year in December 2007. The product is based on the concept of
Diminishing Musharakah and currently offers a number of variations to suit different
customer needs with options for buying, building or renovating a home, as well as
replacing an existing mortgage. Customers may also choose from a number of payment
variations to suit individual budgets. Portfolio ENR (ending net receivable) increased by
21% during the year and currently stands at Rs. 3,158 million representing 1,236
customers across Pakistan.
The portfolio is well diversified between the key targeted segments of
salaried, business and self-employed professionals, while also evidencing critical risk
parameter health through a strong bank vs. client investment ratio (BIR) of 59% as well
as a very desirous debt burden ratio (DBR) of 38%.
80
Key Portfolio Statistics
Portfolio credit quality highlights very strong risk management

foundations, with an overall NPL of 1.57%. Treasury and Financial Institutions (TFI)
Alhamdollilah, the strong growth in deposits resulted in substantial surplus liquidity
being available with the Treasury and despite the dearth of investment avenues currently
available to Islamic Banks, the department managed to successfully deploy surplus funds
both in domestic as well as in international markets through investments in local and
offshore sovereign Sukuks e.g. Wapda Sukuk, Dubai Sukuk, Qatar Sukuk etc. Going
forward, we look forward to the launch of a short-term Shariah-compliant Islamic
instrument (the Islamic equivalent to Government Treasury Bills), which will go a long
way in bringing Islamic banks at par with their conventional counterparts, and therefore
81
enable Islamic Banks to manage their Statutory Liquidity Requirements. Short-term
Islamic instruments also help Islamic institutions in managing liquidity, and work is
being undertaken to develop a suitable Shariah-compliant alternative. We urge the
Ministry of Finance, GOP to expedite this long outstanding requirement of Islamic
Banks. In the foreign exchange market, Meezan Bank continued to be a major player,
progressing from being a price taker to a market maker. Average number of FX
transactions per day increased from 125 to 250. Inter bank deals comprised 10% of this,
while the remaining was attributed to corporate treasury transactions. The corporate
treasury desk also performed very well during the year and was able to capture trade
finance and remittance business of over USD 300 million. Due to competitive pricing by
treasury, trade finance business increased manifold; with outstanding sight and usance
bill purchase increasing from Rs. 300 million to Rs. 1 billion. As part of the Bank’s on-
going knowledge building exercise, various treasury workshops and seminars were
conducted for corporate customers during the year.
Asset Management
With the regular entrance of new Asset Management Companies, the

Mutual Fund Industry is growing rapidly in Pakistan and the total size of assets under
management has increased from Rs. 171 billion in December 2006 to over Rs. 350 billion
in December 2007 depicting 105% annual growth.
The asset management business of Meezan Bank is managed by its
subsidiary, Al Meezan Investment Management Limited (Al Meezan Investments). The
company has been in operation since 1995 and has one of the longest track records of
managing mutual funds in the private sector in Pakistan. It is also the only asset
management company with a sole mandate of providing Shariah compliant investment
solutions in the country. It is professionally managed by a team headed by Mr.
Mohammad Shoaib, CFA, who is also the President of CFA Association of Pakistan, a
member society of CFA Institute, USA. Al Meezan Investments is the first asset
management firm in Pakistan that has voluntarily adopted the CFA Institute’s “Asset
82
Manager Code of Professional Conduct”, which outlines the ethical and professional
responsibilities of firms that manage client funds. The total size of the funds under
management of Al Meezan Investments as at December 31, 2007 was over Rs. 16.7
billion as compared to Rs. 8.3 billion at the corresponding date last year depicting 101%
annual growth. Al Meezan Investments is presently managing five funds i.e. Al Meezan
Mutual Fund Limited (AMMF), a closed end equity fund; Meezan Islamic Fund (MIF),
an open-end equity fund; Meezan Balanced Fund (MBF), a closed end balanced fund;
Meezan Islamic Income Fund (MIIF), Pakistan’s first Shariah compliant open end income
fund and Meezan Tahaffuz Pension Fund (MTPF), a voluntary pension fund. In
continuation with our endeavor to provide Shariah compliant investment solutions, very
soon Al Meezan Investments is launching yet another specialized product Meezan Capital
Protected Fund-1 (MCPF-1). MCPF-1 would provide an investment opportunity to
investors who desire protection of their capital and are willing to invest for relatively
longer periods and want to get benefit of any gain from investment made by the fund in
the stock market. In addition, the company also manages segregated private portfolios for
some corporate clients.
The Product Development and Shariah Compliance team of Meezan Bank
also monitors the operations of Al Meezan Investments and ensures the compliance of
funds according to Shariah guidelines. The growth of total funds under management of Al
Meezan Investments along with the composition as at December 2007 is shown in the
following:
Operations and Trade Finance
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The Operations department is responsible for complete back office
processing of transactions of the Bank. The primary objective of the Operations
department is to ensure that all transactions are accurately processed in line with the
SLA’s (Service Level Agreement) agreed with respective departments.
With the growth of a large branch network, the Bank focused on capacity
building to ensure that systems, procedures and policies are put into place to allow secure
transaction processing and service delivery. Particular attention is also being given to
improve controls and the department is continually mapping all processes with a view to
implementing processes that increasing efficiency and reduce gaps in internal controls.
The Business Continuity Planning unit was put to test in 2007 with two major fire
incidents at the PNSC building where the Head Office of the Bank is located.
Alhamdolillah, no disruptions occurred in banking operations at any level during this
unfortunate emergency. We are also happy to report that there was no loss of life or any
injuries resulting from this fire.
Accounting system of Meezan Bank
Accounting system of the meezan bank have very easy because all the
work to computerizing. When a customer has deposited his amount in bank those banks
have transaction in Dr. Columns and his customer is credit because that bank has liability
that they have paid the amount to his customer. So there are daily more transaction they
have different shape transaction. For example single entity and double entities, single
entity means when a customer have paid to cash so that they have affected only one
account. Double entities means when a customer have paid the amount with help of cross
cheque, so they have effect to two account who they have paid the payment and other is
receive the amount. Some customer have paid the amount with the help of D.D and T.T,
so when they have make D.D so bank have some extra charge to customer so this extra
amount to profit of the bank. So bank have daily different transaction, they have all daily
transaction recorded in their bank account. And check it; there are any mistakes in
accounting system. So Meezan bank have provided Annual report of their bank and
84
checked their balance sheet, profit and loss account, cash flow statement, change in
equity statement. That they have estimated of their profit, expense and cash balance.
Balance Sheet
85
Profit and loss Account
86
Cash flow statement
87
Statement of change in equity
88
Use of electronic data in decision making
Because of the technology advancement the work has become has much
more easily. The computer software has eased the man. The most of the working is
becoming done on the computer. The GL report that is the most important in the day
work is because of the computer. The whole work is printed through the computer and is
printed out and automatically balances due to the computer system. The server is directly
89
attached to the main office and the working is come in to the every one knowledge. And
because of the online the data of the every branch can been seen. This is the major
advantage of the electronic data.
Mobilization of funds
It is perhaps worth emphasizing here that for Islamic banks resource mobilization and
investment through units/equity need, well functioning equity exchanges market without
any tax or penalty on frequent trading. An important development in Indian financial
market is the emerging and widening strong capital market with a broad based regulatory
system in favour of investors. Now Islamic banks can use two-way routes i.e. on one
hand they can mobilize capital resources by issuing equity shares and on the other can
invest in equities of corporates and financial institutions. The setting up of mutual funds
is another important route. Nowadays Islamic banks can float mutual funds schemes
offering dividend on units and these funds can be invested in corporate shares.
In December 2001, SBP issued the Detailed Criteria for establishment of Islamic
commercial banks in the private sector. Al-Meezan Investment Bank Limited applied
under the criteria issued by SBP to convert itself into an Islamic commercial bank. It was
issued the licence in the name of Meezan Bank Limited to operate as full-fledged Islamic
bank in January 2002. The bank acquired the business of Societe Generale Bank branches
operating in Pakistan and has started commercial operations in March 2002 as a model
Islamic bank in Pakistan. The regulatory issues like maintenance of Statutory Liquidity
Requirement and Cash Reserve against FE-25 and other deposits have been resolved by
allowing Meezan Bank to maintain these requirements in the form of Current Account
balance with SBP at a reduced level. An Islamic Export Refinance Scheme has been
prepared on Musharika basis, which has been extended to Meezan Bank as a pilot project.
The intermediaries resolve the conflict again by pooling small funds. Moreover, the risk
preferences of small suppliers and large users of funds are also different. It is often
90
considered that small savers are risk averse and prefer safer placements whereas the fund
users deploy the funds in risky projects. Therefore, the funds cannot be directly supplied.
The role of the intermediary again becomes crucial. They can substantially reduce this
risk through portfolio diversification. Furthermore, small savers cannot efficiently gather
information about investment opportunities. Financial intermediaries are in a much better
position to collect such information, which is crucial for making the investment
successful.
Generation of funds
Following are the generation of funds. These are
Riba Free - Meezan Providence
Meezan Bank is 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.
Riba Free - Certificates of Islamic Investment
An investment product designed to meet short or long term needs.

With a minimum investment of only Rs.50,000 it provides investment options from 3
months to 5 years, with an option for monthly return. Furthermore, these certificates can
be encashed at any time without any charge or penalty, only the profit rates will be
adjusted according to the tenure completed.
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Riba Free - Monthly Musharakah Certificate
Is a flexible investment product, which has been designed to give a

monthly return? Depositors participate with the Bank in a pool of investments that is
comprised of Murabaha and Ijarah transactions and guaranteed to be Halal. The minimum
investment required is only Rs.100,000 and the profit is disbursed upon completion of the
month. The facility also provides the option of withdrawing the investment at any time.
Riba Free - Dollar Saving Account
With a minimum deposit requirement of only US$100, the dollar

saving account is under a Mudarabah arrangement that is strictly in conformity with the
principles of Islamic Shariah. Profit on this account is also paid on a monthly basis and
comes with a range of benefits including checking facility, free balance certificates, and
personal financial consultancy services.
Riba Free - Rupee Saving Account
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A unique bank account that offers the opportunity to earn Halal
profits, while enjoying a range of added benefits. It can be opened with a minimum
amount of only Rs.10,000. The profit on this account is calculated and paid on a monthly
basis, and comes with a variety of free benefits including personalized check books, no
restrictions on transactions, priority banking and so on.
Riba Free - Current Account
A bank account that is ideal for businesses and individuals looking

for Shariah compliant banking and ease of access. With a minimum amount of only
Rs.10,000 this product offers you a range of benefits including personalized checking
facility, no restrictions on the number of transactions, free Call Center facilities, free
balance certificates, priority banking and much more.
Car Ijarah - Islamic Car Financing
Our totally halal auto finance facility that is very affordable, with quick
processing and minimal documentation. Car financing that is very competitively priced,
hassle-free, and totally Halal. Ijarah is simply a rental agreement under which the car is
given on rent for an agreed period ranging from 3 to 5 years. There is no advance rental,
no up-front insurance payment, and as little as 20% security deposits
Easy Home: Islamic Housing Finance
93
Welcome to Pakistan’s long awaited totally Shariah-compliant Home
Finance facility! One that is comprehensive, affordable, and totally hassle-free. At
Meezan Bank, we are committed to meeting our customers’ needs in a truly Shariah-
compliant manner coupled with dedicated service excellence. Meezan Bank’s Easy Home
is the answer you’ve been waiting for.
Sources of funds
Following are the Sources of funds

1. Deposited
2. Utilities bills
3. Meezan’s products and services
4. Car Ijarah and easy home
5. Bank provided loans and earn profit
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C. Investment Policy
Allocation of funds
Profit of al meezan investment management limited
Al-Meezan Investment Management Limited (AMIM) is owned 65% by Meezan Bank

Limited, 30% by Pakistan Kuwait Investment Company (Pvt) Ltd, and 5% by the
employees of AMIM
Meezan Tahaffuz Pension fund
95
All investments in Meezan Tahaffuz Pension Fund are subject to market risks. The value
of such investments may depreciate as well as appreciate, subject to market fluctuations
and risks inherent in all such investments. Participants should read the Offering
Document carefully to understand the investment policies, risks and tax implication and
should consult their, legal, financial or tax adviser before making any investment
decision. Withdrawals from the Pension Fund before the retirement age are subject to tax
under the provisions of the Income Tax Ordinance, 2001.
What is Meezan Tahaffuz Pension Fund (MTPF)?
Financial security and comfort are required by every person, specially after retirement
when avenues of regular income are exhausted and it becomes extremely difficult to
maintain one’s standard of living. In order to fulfill this need, Al Meezan Investments
presents a Shariah Compliant Pension Fund titled Meezan Tahaffuz Pension Fund
(MTPF), which is a saving mechanism where an individual saves from his/her income
during work life in order to retain financial security and comfort in terms of regular
income stream after retirement.
The different Allocation Schemes will be offered to participants based on their risk-return
requirements. The allocation schemes currently being offered are:
Allocation Scheme Equity Sub Fund Debt Sub Fund Money Market Sub
Fund
Aggressive Min 65% Min 20% Nil
Balanced Min 35% Min 40% Min 10%
Conservative Min 10% Min 60% Min 15%
Very Conservative Nil Min 40% Min 40%
The Participants will be able to change their selected Allocation Scheme on the
Anniversary of their initial investment.
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Guidelines for choosing Allocation Scheme
Each allocation scheme offers different risks and returns to the investor. The allocation
schemes offer varying exposure of Equity, Debt, and Money Market instruments to the
investor. Following are the risk and return measures for different allocation schemes
available to the investor:
Equity sub fund Debt sub fund Money market sub

fund
Returns Highest Moderate Lowest
Inflation risk Lowest High Highest
Volatility Highest Moderate Lowest
Dual Tax Benefits
The investments in MTPF offer dual tax benefits as contributions are available for tax
credit and return on the same are also tax free. The following is an example of the tax
credits which the participant shall receive.
For salaried individuals
Taxable income (Rs. P.a) Contribution (Rs. P.a) Tax Credit (Rs. P.a)
300000 60000 450
500000 100000 3500
800000 160000 12000
1200000 240000 26400
2500000 300000 80000
8400001 500000 100000
For non salaried individuals
Taxable income (Rs. P.a) Contribution (Rs. P.a) Tax Credit (Rs. P.a)
300000 60000 3000
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500000 100000 10000
800000 160000 24000
1200000 240000 50400
1500000 300000 75000
2500000 500000 125000
For detailed understanding participants are advised to read clause 12.1 of the offering
document. An investor of MTPF gets dual tax benefit. - Tax rebate on contribution
amount and Tax exemption on returns earned on those contributions. Thus, an individual
will have more money to re-invest for getting much greater capital appreciation over a
long period of time.
Meezan Balanced Fund
Meezan Balanced Fund is the first Shariah compliant balanced fund in Pakistan. The fund
is being offered to the public from December 20 to December 23, 2008.
The trust deed of MBF was registered on June 15, 2008. The fund has a Pre-IPO
placement of Rs.900 million, an IPO of Rs.300 million. MBF is a closed-end balanced
fund constituted under Non-Banking Finance Companies (Establishment Regulation)
Rules, 2003. A balanced fund theoretically provides stable income stream along with
equity upside.
Investment in stocks provides capital appreciation and returns higher than those of bonds
and bank deposits, whereas investment in fixed income instruments offers the security of
a constant income stream to investors. The flexible equity-debt allocation allows the
balanced fund to take advantage of the trends in the equity as well as debt markets.
A balanced fund has a greater potential to diversify risk by investing in different asset
classes, rather than just diversifying between instruments, as would be the case in
dedicated equity or fixed income funds. Because the investments are highly diversified,
investors reduce their market risk. On the risk ladder, balanced funds fall somewhere
between equity and debt funds depending on the asset mix. In terms of returns it also
98
provides a graduation over the bland returns of fixed income funds and the excessive
volatility of returns associated with equities.
A. Investment Objective
The investment objective of MBF is to generate long term capital appreciation as well as
current income by creating a balanced portfolio that is invested both in high quality
equity securities and Islamic Income Instruments such as Term Finance Certificates
("TFCs"), Certificates of Investments ("COIs"), Certificates of Musharika, Islamic
Sukuk, Ready-future hedges, and other such Shariah compatible instruments.
B. Investment Strategy
MBF will invest in equity and Islamic income instruments. MBF will make use of
triggers such as earnings growth and dividend yields to achieve its balanced growth
strategy. The levels of dividend yield and earnings growth specified for stocks will be
continuously monitored through financial models so that stocks above the defined
thresholds are added whereas stocks falling below the defined thresholds are sold.
99
Critical analysis
Financial analysis
Ratio analysis
In the wake of meteoric growth of banking industry in Pakistan, Islamic

banking has captured 2 percent market share in only three-year period. To evaluate this
progress, attempt has been made to measure and analyze the performance of Islamic
banks in Pakistan during the 1999 and 2006.In this compendious analysis I have
evaluated inter temporal and inter bank performance of Islamic bank (Meezan bank). To
actualize this objective, analysis has been made in four major areas of financial ratios i.e.
profitability, liquidity, risk and solvency and community development. Mean, standard
deviation, T-test and F-test has been used to test the significance of the results of the
analysis. The basic source of data for this paper is annual reports of banks. This study
finds out that not only Islamic banks are less profitable than the conventional banks in
Pakistan, but the basic modes of Islamic banking, Mudharabah and Musharakah, are not
popular in Pakistan.
THE PERFORMANCE OF PAKISTANI ISLAMIC MEEZAN BANK
DURING 1999-2006
Performance evaluation is an important pre-requisite for sustained growth

and development of any situation. It is customary in banks to evaluate the pre-determined
goals and objectives, with the changes goals and objectives, the criteria of evaluation of
banks have undergone changes overtime.
The basic theme of this paper that Meezan bank is selected as the basic
bank as my base paper has selected Bank Islam Malaysia Bhd (BIMB) in Malaysia which
100
is single full-fledged Islamic bank in Malaysia. On this base I have selected Meezan
Bank which the largest and oldest Islamic bank of Pakistan. I have compared Islamic
bank in two periods from 1999-2003 and 2004-2006. In the analysis for 2006 data, I have
taken data up to August 2006.Then I compared this bank with Islamic bank industry.
Inter-alia, I compared the Meezan bank with two individual conventional banks and those
are MCB and orix bank. After this I compared the Meezan Bank with Eight randomly
selected conventional banks.
The important underlying force that led to the establishment of this Islamic
bank in Pakistan was the elimination of riba that is used for interest.1997 Al-Meezan
Investment Bank is established as an Islamic Investment Bank with Dr. Imran Usmani
appointed as resident Shariah Advisor. 1999 The Shariat Appellate Bench of the Supreme
Court of Pakistan rejects the appeals and directs all laws on interest banking to cease. The
government sets off 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 (Retd.)
Muhammad Taqi Usmani as Chairman. The State Bank sets criteria for establishment of
Islamic commercial banks in private sector, subsidiaries and stand-alone branches by
existing commercial banks to conduct Islamic banking in the country.
Hypotheses
1. The performances of Islamic Meezan banks are better than the conventional
banks in Pakistan
The Islamic Banking Sector continued to grow which is reflected by the increasing
branch network of the Islamic Banking Institutions. The Balance Sheet footing of the
Islamic Banking Industry kept on increasing. The total assets portfolio in the Islamic
Banking Sector expanded by 0.59% to Rs. 89.350 billion in August 2006 from Rs. 88.828
101
billion in July 2006. Total loans and advances, net of provisions comprised of 57.18% of
total assets and stood at Rs. 51.093 billion in August 2006 compared with Rs. 50.748
billion or 57.13% of total assets in July 2006. Advances as a percentage of total assets
have increased by a nominal percentage. Total assets have increased due to substantial
increase in other assets.
Deposit liabilities increased by 1.56% % to Rs. 62.188 billion as at the end of August
from Rs. 61.231 billion in July 2006. Due to the dominant position of advances on asset
side, the credit to deposit ratio was 82.15% a high credit to deposit ratio exposes industry
to a fairly high degree of credit risk. Islamic Banking Sector equity and Islamic Banking
Fund increased by 0.14% to Rs. 12.591 billion from Rs. 12.574 billion. Cash held by
Islamic Banking Institutions at the State Bank of Pakistan increased by 0.71% to
Rs.9.494 billion from Rs. 9.427 billion. It averaged 15.27% of deposit liabilities in
August 2006 which was 15.40 % in the month of July 2006. Unappropriated / unremitted
profit for the month of August increase by 1.42% to stand at Rs. 1.042 billion compared
to last month which was at Rs. 1.027 billion. Due to higher volume of business,
profitability indicators have also improved.
2. The liquidity ratios of Islamic banks are expected to be higher in earlier

years of operation than later years due to a learning curve.
From business point of view Islamic bank is not only a firm but also a moral trustee of
the depositors where deposits are trust given to banking firm. It is naturally expected that
as a custodian of trust for the depositors' deposits, Islamic bank is likely to be more liquid
and become more solvent compared to its counterpart conventional banks. Islamic bank
management, according to Islamic ethics, is accountable to the depositors in this world
and the world hereafter for their failure to keep the trust entrusted upon them. It is,
therefore, expected that the liquidity and solvency ratio of the Islamic bank will be higher
than conventional banks. However, it is also expected that the liquidity ratio of the
Islamic bank may decline during the later periods compared to its early eras.
102
Methodology and Data
The performance of Pakistani Islamic banks this paper will evaluate the
performance of Meezan bank over the seven years. In other words, the paper makes
comparison of performance of Meezan bank between two periods 1999-2003 and 2004-
2006. In the context of present study, bank performance of the yearly periods 1999-2003
is compared to that of later period 2004-2006. In addition to inter temporal comparison,
the study makes comparison of Islamic bank (Meezan bank) with other Islamic banks
those are Al Baraka Islamic Bank and Bank Alfalah limited (Islamic banking division)
and eight conventional banks performances. Comparison of Meezan bank and the
conventional bank is made here. This type of inter-bank analysis is common in bank
performance study (Sabi (1996). In the competitive financial market, performance of a
bank can be better understood by an analysis of inter-bank comparison.
Profitability Ratios
The profitability can be judged by the following criteria.
1. Return on asset (ROA) = Profit after tax/ total asset

2. Return of equity (ROE) = Profit after tax/ equity capital
3. Profit expense ratio (PER) = profit/total expense
ROA and ROE are the indicators of measuring managerial efficiency. ROA is net earning
per unit of a given asset. It shows how a bank can convert its asset into net earnings. The
higher ratio indicates higher ability and therefore is an indicator of better performance.
Similarly, ROE is net earnings per rupee equity capital. The higher ratio is an indicator of
higher managerial performance. However, profitability is only part of bank performance
story. A high PER indicates that a bank is cost efficient and makes higher profit with a
given expense.
Liquidity Ratios
103
A bank’s liquidity risk refers to a comparison of its liquidity needs for deposit outflows
and loan increases with the actual or potential sources of liquidity from either selling an
asset it holds or acquiring an additional liability. For the sample bank, this risk is
approximated by comparing a proxy of the bank’s liquidity needs, its deposits, with a
proxy for the bank’s liquidity sources and its short-term securities. Although both
variables are only rough approximations (funding loans may be a major liquidity need,
and purchasing liabilities may be an important source of liquidity), this relationship is a
beginning indicator of most banks’ liquidity risk. The trade-offs that generally exist
between returns and risks are demonstrated by observing that a shift from short-term
securities to long-term securities or loans raises a bank’s returns but also increases its
liquidity risk. The inverse would be true if short-term securities were increased.
There are several measures for liquidity.
1. Cash deposit ratio (CDR) = cash/deposit. Cash in a bank vault is the most
liquid asset of a bank. Therefore, a higher CDR indicates that a bank is
relatively more liquid than a bank which has lower CDR. Depositors' trust
to bank is enhanced when a bank maintains a higher cash deposit ratio.
2. Loan deposit ratio (LDR) = Loan/deposit. A higher loan deposit ratio
indicates that a bank takes more financial stress by making excessive loan.
Therefore, lower loan deposit ratio is always favorable to higher loan
deposit ratio.
3. Current ratio = Current asset (CA) / current liability (CL) It indicates how
the bank management has been able to meet current liability i.e. demand
deposit with the current asset. A high ratio is an index that shows bank has
more liquid asset to pay back the trust (deposit) of the depositors. When
withdrawals significantly exceed the new deposits banks usually recourse
to replace this shortage of funds by selling securities. Government
securities are easily sold and are considered liquid. As such the current
104
ratio as measured above is expected to be more preferable to lower current
ratio.
4. Current asset ratio (CAR) = current asset/total asset. A high CAR indicates
that a bank has more liquid asset. A lower ratio is a sign for illiquidity as
more of the assets are long term in nature.
Risk and Solvency Ratios
A bank is solvent when the total value of its asset is greater than its liability. A bank
becomes risky if it is insolvent. The following are the commonly used measures for a risk
and insolvency.
1. Debt equity ratio (DER) = Debt/equity capital. Bank capital can absorb
financial shock. In case asset values decrease or loans are not repaid bank
capital provides protection against those loan losses. A lower DER ratio is
a good sign for a bank.
2. Debt to total asset ratio (DTAR) = Debt/total asset indicates the financial
strength of a bank to pay its debtor. A high DTAR indicates that a bank
involves in more risky business.
3. Equity multiplier (EM) = Total assets/share capital. It is the amount of
assets per rupee of equity capital. A higher EM indicates that the bank has
borrowed more funds to convert into asset with the share capital. The
higher value of EM indicates greater risk for a bank.
4. Loan to deposit ratio (LDR) = loans/deposit measures liquidity as well as
credit risk for a bank. A high value indicates a potential source of
illiquidity and insolvency.
Commitment to Economy and Muslim Community
105
1. Long term loan ratio (LTA) = long term loan/total loans. A high LTA
indicates a bank commitment for supporting long term development
project.
2. Government Bond Investment (GBD) =Deposit invested in government
bond/Total Deposit. A higher GBD indicates high liquidity and less risk.
3. Mudaraba-Musharaka Ratio (MM/L) =Mudaraba-Musharaka/ Total Loans.
A higher percentage of MM/L indicates a greater commitment to
community developments.
The performance of Meezan bank is measured in three stages. First, the performance of
initial 4 years is compared with the performance of the subsequent 3 years by using the
performance measures as delineated above. Second, Islamic bank is compared with two
selected Islamic banks. Of the two banks, one (Al Baraka Islamic Bank) and the other is
Bank Alfalah limited (Islamic banking division) .Third; Islamic banks are compared with
conventional banking industry.
Analysis of Empirical Results
Means and standard deviations of various performance measures of the Meezan Islamic
bank between 1999-2003 and 2004-2006 are shown in the Table 1. All profitability
measures ROA, ROE and PER, in Table 1 indicates that Meezan bank makes progress in
profitability during 1999-2006. This improved performance is statistically significant as
the means of ROA ratio is different between the two periods. The increase in the returns
might have been due to awareness gained but the users of Islamic banks. This is
supported by the increased cash deposit and loan deposit ratios. If we will compare
Meezan bank with other Islamic banks we can see that Meezan bank is doing better than
its counterparts. The Meezan bank is doing better in the area of ROA.
Table 1
106
Performance Trend of Meezan bank 1999-2003 and 2004-2006
Performance 1999-2003 2004-2006 Statistical Test

Measure Mean S-D Mean S-D t-value
1.Profitability
1.ROA 0.07775 0.0683 0.012667 0.001528 5.2729
2.ROE 0.175625 0.088421 0.13 0.026458 8.90205
3.PER 2.215 1.36676 0.573333 0.030551 9.563274
2.Liquidity
1.CDR 0.1175 0.012583 0.163333 0.030551 0.83
2.LDR 0.57 0.01633 0.623333 0.025166 4.416986
3.CR 0.28 0.014142 0.356667 0.005774 0.049069
4.CAR 0.2325 0.009574 0.193333 0.037859 0.09
3.Risk and Solvency
1.DER 5.1675 1.955989 9.45 0.15 2.157421
2.DTAR 0.685 0.148436 0.913333 0.032146 5.044816
3.EM 6.31 3.145611 14.93 0.260576 1.153934
4.LDR 1.0875 0.087702 1.296667 0.025166 1.323998
4. Commitment to Government and community
1.GBD 0.175 0.075939 0.31 0.01 3.636738
2.LTA 0.25 0.024495 0.32 0.02 0.923386
3.MM/L 0.000105 0.00011 0.0006 0.000265 6.938741
Table 2
Comparison of Meezan Bank and Two Islamic Banks (2004-2006)
Performance Meezan bank Islamic Statis.Test

banks
Measure Mean Mean F-value
1.Profitability
107
1.ROA 0.084083 0.0215 41.17647
2.ROE 0.100625 0.235 90.95339
3.PER 2.501667 0.34 5.169628
2.Liquidity
1.CDR 0.199167 0.215 41.17647
2.LDR 0.881667 1 90.64748
3.CR 0.458333 0.535 0.263418
4.CAR 0.329167 0.365 15.40528
3.Risk and Solvency
1.DER 9.8925 7.97 7.503335
2.DTAR 1.141667 1.135 67.37968
3.EM 13.775 7.935 12.65964
4.LDR 1.735833 1 90.64748
4. Commitment to Government and community
1.GBD 0.33 0.3125 85.71429
2.LTA 0.41 0.495 58.18182
3.MM/L 0.000405 0.00045 60
Table 3
Comparison of Meezan Bank (Islamic bank) and MCB

(Conventional bank) Financial Ratios (2004-2006)
Performance Meezan bank MC Statis.Test
Bank
1.Profitability
1.ROA 0.084083 0.143333 1.980198
2.ROE 0.100625 14.92 0.375235
3.PER 2.501667 0.2 51.37615
2.Liquidity
108
1.CDR 0.199167 0.076667 6.896552
2.LDR 0.881667 0.723333 0.06
3.CR 0.458333 1.166667 7.692308
4.CAR 0.329167 0.346667 4.545455
3.Risk and Solvency
1.DER 9.8925 14.24333 52.85826
2.DTAR 1.141667 0.876667 76
3.EM 13.775 11.88333 4.940457
4.LDR 1.735833 0.723333 0.01
4.Commitment to Government and community
1.GBD 0.33 0.756667 19.35484
2.LTA 0.41 0.81 47.05882
Table 4
Comparison of Meezan Bank (Islamic bank) and Orix

(Conventional bank) Financial Ratios (2004-2006)
Performance Meezan bank Orix Statis.Test
bank
1.Profitability
1.ROA 0.084083 0.206667 3.439803
2.ROE 0.100625 0.216667 50
3.PER 2.501667 0.35 19.35484
2.Liquidity
1.CDR 0.199167 0.063333 6.896552
2.LDR 0.881667 0.8 69.09091
3.CR 0.458333 0.776667 10
4.CAR 0.329167 0.25 43.63636
3.Risk and Solvency
109
1.DER 9.8925 12.06667 25.80645
2.DTAR 1.141667 0.686667 36.84211
3.EM 13.775 9.416667 86.20398
4.LDR 1.735833 0.8 69.09091
1.GBD 0.33 0.7 10
2.LTA 0.41 0.816667 73.68421
Table 5
Comparison of Meezan Bank (Islamic bank) and Eight

(Conventional banks) Financial Ratios (2004-2006)
Performance Meezan bank Convent. Statis.Test

banks
1.Profitability
1.ROA 0.084083 0.1555556 44.40092
2.ROE 0.100625 0.1532222 5.213239
3.PER 2.501667 0.3344444 0.048087
2.Liquidity
1.CDR 0.199167 0.1555556 74.78144
2.LDR 0.881667 1.8433333 81.33199
3.CR 0.458333 1.5088889 7.644628
4.CAR 0.329167 0.5288889 46.28099
3.Risk and Solvency
1.DER 9.8925 26.327778 57.95303
2.DTAR 1.141667 1.7033333 28.80181
3.EM 13.775 19.693333 39.85728
4.LDR 1.735833 1.8433333 39.636
110
1.GBD 0.33 1.7733333 64.1791
2.LTA 0.41 1.8433333 47.80488
Vertical Analysis
Vertical analysis compares each amount with a base amount selected from
the same year. Here in this case we have used total assets in the balance sheet and net
sales in the income statement as base.
2007 2006 2005

ASSETS
Cash and balances with
treasury banks 8.40 % 12.7% 12.9%
Balances with other banks 5.55 % 8.90 % 9.3%
Due from financial
institutions 13.17 % 7.97% -
Investments 15.68 % 6.20 % 5.24%
Financings 51.45 % 58.20 % 64.35%
Operating fixed assets 1.54 % 1.14 % 1%
Other assets 4.18% 4.88 % 7.20%
LIABILITIES
Bills payable 1.77 % 1.21 % 0.85%
Due to financial institutions 3.60 % 9.23 % 9.72%
Deposits and other accounts 81.25 % 74.18 % 74.23%
Sub-ordinated loan - - -
Liabilities against assets
subject to finance leases - - -
Deferred tax liabilities 0.64 % 0.86 % 0.55 %
Other liabilities 4.24 % 4.26% 4.79 %
NET ASSETS % % %
REPRESENTED BY
Share capital 5.63 % 8.14 % 6.64%
Reserves 1.07 % 1.14 % 1.33%
Unappropriated profit 1.82 % 0.97 % 1.71%
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% % %
(Deficit) / surplus on
revaluation of investments (0.02)% 0.014% 0.17%
VERTICAL ANALYSIS
Meezan Bank Limited
Profit and Loss Account
2007 2006 2005

Profit/return earned on
100.00% 100.00%
financings, investments 100%
Return on deposits and
53.61%% 54.14%
other dues expensed 47.31%
Net spread earned 46.39% 45.85% 52.68%
Provision against non-
performing financings 9.51% 4.5%
(net) 4.71%
Provision for diminution
0.19% 0.04%
in value of investments (2.04)%
Bad debts written off
directly
9.53% 4.54% 2.67%
Net spread after
36.86% 41.3%
provisions 50.07%
OTHER INCOME
Fee, commission and 7.03% 8% 11.98%
Dividend
brokerageincome
income 2.28% 6.1% 6.34%
Income from dealing in 8.57% 7.45% 5.34%
Capital
foreign gain on sale of
currencies 11.66% 4.32% 14.35%
Unrealized
investmentsloss on held (0.69)% (1.2)% 3.96%
Other income
for trading investments 0.61% 0.85% 0.66%
Total other income 2.95% 25.53% 42.64%
66.33% 66.85% 92.65%
OTHER EXPENSES
Administrative expenses 38.39% 37.82% 49.23%
Other provisions / write 0.13% - -
Other
offs charges 0.06% 0.17% 0.03%
Total other expenses 38.58% 38% 49.27%
Extraordinary / unusual - - -
PROFIT
items BEFORE 27.75% 28.84% 43.36%
TAXATION
112
Taxation - Current 5.93% 0.30% 0.32%
- Prior years - (2.23)% 2.67%
- Deferred 0.74%% 8.43% 11.64%
6.68% 6.5% 14.64%
PROFIT AFTER 21.06% 22.34% 28.68%
Unappropriated
TYTAXATION profit 9.8% 19.50% 13.12%
Profit before
bbrought taxation
forward 30.87% 41.84% 41.67%
Basic earnings per share
tbappappropriations Rs. 2.55 Rs. 1.88 Rs.1.46
(Rupees)
113
HORIZONTAL ANALYSIS
Balance sheet
ASSETS 2007 2006 2005

Cash and balances with
treasury banks 142.63% 149.03% 100 %
Balances with other banks 130.59% 144.78% 100 %
Due from financial
institutions
Investments 655.78 % 179.12% 100 %
Financings 175.15 % 136.93% 100 %
Operating fixed assets 338.02 % 173.86% 100 %
Other assets 127.17% 102.55% 100 %
219% 159.13% 100%
LIABILITIES
Bills payable 457.233% 216.01% 100 %
Due to financial institutions 81.01% 143.72% 100 %
Deposits and other accounts 239.72 % 151.30% 100 %
Sub-ordinated loan - -
Liabilities against assets
subject to finance leases - -
Deferred tax liabilities 252.25% 233.92% 100 %
Other liabilities 194.07% 131.7% 100 %
222.31% 150.71% 100 %
NET ASSETS 188.68% 157.48% 100 %
REPRESENTED BY 100 %
Share capital 159.77 % 185.60% 100 %
Reserves 177% 129.68% 100 %
Unappropriated profit 231.3 % 85.07% 100 %
(Deficit) / surplus on 100 %
revaluation of investments (24.7)% 12.96%
188.68 157.48% 100 %
HORIZONATL ANALYSIS
Vertical analysis compares each amount with a base amount for selected
base year. Here in this case we have used figures of year 2005 on balance sheet and net
sales in the income statement as base.
114
HORIZONTAL ANALYSIS
Meezan Bank Limited
Profit & Loss Statement
2007 2006 2005

Profit/return earned on
313.43% 185.32%
financings, investments 100%
Return on deposits and other 100%
355.14% 212.07%
dues expensed
Net spread earned 276% 157.61% 100%
Provision against non- 100%
632.26% 176.7%
performing financings (net)
Provision for diminution in 100%
2.94% (4.34)%
value of investments
Bad debts written off directly 100%
1118.25% 315.23% 100%
Net spread after provisions 231% 153.1% 100%
OTHER INCOME
Fee, commission and 184.08% 123.72% 100%
Dividend
brokerageincome
income 112.72% 178.5% 100%
Income from dealing in 503.22% 258.5% 100%
Capital
foreign gain on sale of
currencies 254.57% 55.87% 100%
Unrealized
investmentsloss on held for (54.42)% (56.15)% 100%
Other
tradingincome
investments 288.35% 238.3% 100%
Total other income 216.65% 111% 100%
224.4% 133.7% 100%
OTHER EXPENSES
Administrative expenses 244.4% 142.4% 100%
Other provisions / write offs - -
Other charges 598.34% 990.87% 100%
Total other expenses 245.46% 143% 100%
Extraordinary / unusual items - - -
PROFIT BEFORE 200.46% 143% 100%
Taxation
TAXATION - Current 5811.43% 178% 100%
- Prior years - (155.3)% 100%
- Deferred 20.13% 134.13% 100%
143.07% 82.26% 100%
PROFIT AFTER 229.7% 144.05% 100%
Unappropriated
TYTAXATION profit 234.1% 275.17% 100%
bbrought forward
115
Profit before taxation 231.07% 185.16% 100%
Basic earnings per share
tbappappropriations Rs. 171.23 128.76% 100%
(Rupees)
Liquidity Ratios
Liquidity ratios are used to measure a firm’s ability to meet short term
obligations. They compare short-term obligations to short term current) resources
available to meet these obligations from these ratios, much insight can be obtained into
the present cash solvency of the firm and the firm’s ability to remain solvent in the event
of adversity.
Current ratio
Current assets divided by current liabilities. It shows a firm’s ability to cover
its current liabilities with its current assets.
Current ratio = Current Assets
Current Liabilities
Item 2007 2006 2005

Rs.(000) Rs. (000) Rs. (000)
Current Assets (A) 18,223,577 13,732,269 6,812,761
Current Liabilities 3,607,766 4,848,440 3,242,446
(B)
Current Ratio=A/B 5.05X 2.83X 2.1X
Interpretation
116
Comparing internally for three years Meezan Bank Limited current ratio has
gradually increased from 2.1X to 5.05. So we can say that Meezan Bank Limited is
appreciating in its liquidity position. Its C.R is more than the standard C.R of 2:1.
Activity (performance) Ratios

These ratios, also known as efficiency or turnover ratios. How effectively
the firm is using its assets. Some aspects of activity analysis are closely related to
liquidity analysis. Activity ratios primarily focus on how effectively the firm is managing
two specific assets groups. Receivables and inventories and its total assets, in general. It
includes the following ratios:-
Total Asset Turnover
Item 2007 2006 2005

Rs.(000) Rs. (000) Rs. (000)
Net Sales (A) 4,573,752 2,704,280 1,459,229
Total Assets (B) 67,178,559 46,438,623 30,675,822
Total Asset 6.8X 5.82X 4.7X
Turnover (A/B)
Interpretation
It basically indicates company’s ability to use its asset base efficiently to
generate revenue. In 2005 assets turnover was 4.7 which is increased to 6.8 in 2007. It
means that Meezan Bank Limited is efficiently utilizing its assets base.
Leverage or Solvency Ratios

Solvency is the company’s ability to meet its long term obligations as they
become due. An analysis of solvency concentrates on the long-term financial and
operating structure of business. The degree of long-term debt in capital structure is also
117
considered. Solvency is dependant upon profitability since in the long run a firm will not
be able to meet its debts unless it is profitable.
Debt Ratio
Item 2007 2006 2005

Rs.(000) Rs. (000) Rs. (000)
Total Liabilities (A) 61,471,903 41,675,264 27,651,240
Total Assets (B) 67,178,559 46,438,623 30,675,822
Debt Ratio (A/B) 91.5% 89.7% 90%
Interpretation
This ratio highlights the relative importance of debt financing to the firm by
showing the %age of the firm’s assets that are supported by debt finagling. Thus in 2005,
90% of the firm’s assets are financed with debt (of various types)..
Profitability Ratios
Net Profit Margin
Item 2007 2006 2005

Rs.(000) Rs. (000) Rs. (000)
Net Profit Income (A) 963,501 604,251 419,455
Net Sales (B) 4,573,752 2,704,280 1,459,229
Net Profit Margin (A/B) 21.06% 22.3% 28.7%
Operating Income Margin
118
Item 2007 2006 2005
Rs.(000) Rs. (000) Rs. (000)
Operating Income (A) 1,685,888 1,117,229 729,831
Net Sales (B) 4,573,752 2,704,280 1,459,229
Operating Income Margin
35.62% 22.3%
(A/B) 28.7%
Interpretation
Ratio of operating income to net sales is called operating income margin. It
indicates the operating profitability generated from revenue and hence is an important
measure of operating performance. It also provides clues to a company’s pricing, cost
structure and production efficiency. In 2005, operating income margin was 28.70% which
is increased to 35.62 in 2007 which indicates that operating earning power of business
has increased.
Gross Profit Margin
Item 2007 2006 2005

Rs.(000) Rs. (000) Rs. (000)
Gross Profit (A) 2,121,784 1,240,107 768,811
Net Sales (B) 4,573,752 2,704,280 1,459,229
Gross Profit 46.39% 46% 52.6%
Margin (A/B)
Interpretation
It reveals the percentage of each dollar left over after the business has paid
for its goods. In 2005, it was 52.6% which is decreased to 46.39% in 2007. It means that
Meezan Bank Limited is earning less gross profit on each sales rupee.
119
Market Value Ratios
Basic Earning per Common Share
Item 2007 2006 2005

Rs.(000) Rs. (000) Rs. (000)
Net Income (A) 963,501,000 604,251,000 419,455,000
Common shares 377,989,686 321,685,172 287,288,288
outstanding (B)
EPS (A/B) 2.55 1.88 1.46
Interpretation
It indicates the amount of earnings for each common share held but Meezan
Bank Limited earning is positive.
Book Value per Share
Item 2007 2006 2005

Rs.(000) Rs. (000) Rs. (000)
Total Stockholder Equity 5,706,656 4,763,359 3,024,582
(A)
Common shares 377,989,686 321,685,172 287,288,288
outstanding(B)
Book Value per Share Rs.15.09 Rs.14.8 Rs.10.52
(A/B)
Comparison of Karachi Stock exchange (KSE)
120
The Karachi Stock Exchange (KSE) and Al Meezan Investment
Management Limited (Al Meezan investments) signed a Memorandum of Understanding
(MoU) to launch the Pakistan’s First Co-branded Islamic Index "KSE –Meezan Index
(KMI)" to its family of indices.
The MoU was signed at a ceremony held at the KSE premises on Monday
by Mr. Adnan Afridi, MD, KSE, Mr. Shehzad Chamdia, Director KSE, Mr. Mohammad
Shoaib CFA, CEO, Mr. Ariful Islam, Chairman, Al Meezan Investments on behalf of their
respective organizations in the presence of senior KSE and Al Meezan Investments
officials. According to the agreement; Al Meezan Investments shall provide its Shariah
expertise, guidelines skills and stocks screening towards the activities with regard to
launching and continuation process of the Index. On the contrary KSE shall provide
maintenance and dissemination support for the index.
The KMI comprises of 30 companies which will qualify the KMI Shariah
Screening Criteria and are weighted by float adjusted market capitalization subject to a
12% cap on weights of individual securities. The KMI will measure the performance of
these 30 companies traded on the Karachi Stock Exchange with periodic balancing and
adjustments to ensure utmost Shariah compliance and Benchmark stability.Therefore, the
KSE Meezan Index will provide investors a suitable benchmark for comparing the returns
on their Shariah compliant equity investments.
On the occasion Mr. Adnan Afridi, MD, KSE highlighted the importance
of an Index for an Exchange and stated that KMI is very important for both KSE and Al-
Meezan since KSE was looking to partner with an organization having the strength and
expertise to create a Shariah compliant product in these times when Islamic products are
developing very fast globally and for Pakistan it is a natural consequence. Hence Al-
Meezan has the reputation and expertise so it is a natural partnership.
Future Prospects
121
The Islamic banking industry continues to grow in Pakistan and six-full
fledged Islamic Banks are now in operation. It is interesting to note that the conventional
banks are increasingly realizing the huge potential market backed by the untapped and
steadily growing appetite for Islamic banking products; hence the drive for entering this
market is based on business considerations in addition to religious considerations. As the
level of awareness and understanding of Islamic banking remains very low, this might
pose as a threat to the credibility to the full-fledged Islamic Banks like Meezan. For this
reason, there is a need for all banks to act in concert and help build awareness of Islamic
banking throughout the country.
The State Bank of Pakistan has decided to reduce Special Cash Reserve
Requirement for Islamic banks/ Islamic banking branches from 6 per cent to 2 percent of
total FE-25 deposits with immediate effect. Accordingly, Islamic banks and Islamic
banking branches would keep 7%, including 5% Cash Reserve Requirement (CRR) and
2% Special Cash Reserve Requirement (SCRR), of their FE-25 deposits with the SBP in
the current account. This would encourage Islamic banks including Meezan to lend more.
Islamic banks should come forward to serve the nation by providing the less
privileged with the opportunity to meet their needs in the Shariah Compliant manner. The
bank, which has firmly established its leadership position in the Islamic banking industry,
should focus more on the development and offering of the financing products of social
welfare such as education and micro finance.
Recently, Meezan has put into place a comprehensive Strategic Plan for the
next five years, using a ‘bottom-up approach’, which is being implemented using the
‘Balanced Scorecard’. The Bank’s strategy is to continue to build market share through
an aggressive branch expansion plan supported by a strong technology backbone. For this
purpose, it has decided to upgrade its core banking software and recently signed a
contract with Temenos acquiring the right to use its latest product - T24. Another
important project is the setting up of a dedicated online real time Disaster Recovery (DR)
ie a ‘hot’ DR site. However, the bank will have to manage its growing expenses is
addition to following the stringent appraisal and monitoring standards. This along with
122
the strengthening systems and building capacities of the human capital will add to the
efficiencies of its system and thus proving it a comparable alternate financial system.
In the light of above scenario we can say that Meezan Bank is well poised to
meet the challenges of the future and will continue to play its leadership role in the
Islamic banking industry.
SWOT ANALYSIS
STRENGTHS
The largest Islamic Bank in Pakistan with a network of over 120 branches
in 33 cities. And ending this year they have increase his branches in Pakistan to 150
branches.
Meezan Bank limited has strong belief on customer services Manager Mr. Sadaat Khan
Ghauri has good coordination with staff members. The environment of Meezan Bank
Limited is very friendly MBL is fully computerized; each department has its own PC.
The products of MBL are very excellent Customers are allowed to give suggestion for the
improvement of Bank and these suggestions are listened carefully.
The letter and spirit of Islamic Banking rest upon absolute adherence to the
Shariah. The foundations of a strong Shariah underpinning at Meezan bank were laid
from the beginning. A world renowned Shariah Supervisory Board and a highly qualified
and experienced in house Shariah Advisor are fundamental aspects of the Bank's core
123
USP. The primary role of this board is to maintain and further strengthen this
commitment and to ensure strict Shariah compliance in all the Bank's operations.
The members of the Shariah Supervisory Board of Meezan Bank are

Internationally-renowned scholars, serving on the boards of many Islamic banks
operating in different countries.
Meezan Providence Certificate is a long-term investment certificate

specially designed to cater to the needs of corporate and business concerns for purposes
of investing their Provident, Pension and Gratuity Funds. As any prudent investor, your
main concerns would be total security along with the best returns possible, especially as
these funds are a trust from your employees and one that bears an important
responsibility.
Meezan Providence rests on the well known and solid financial strength of
Meezan Bank, which has a strong and credible balance sheet with excellent operating
profitability, including a capital adequacy ratio that has placed the Bank at the top of the
industry, a long-term entity rating of A+, and a short-term entity rating of A1.
Furthermore, our sterling track record shows consistently beneficial and highly
competitive returns for our broad range of investors.
Awarded
Karachi, August 20, 2008: Meezan Bank, the largest

Islamic Bank in Pakistan has been conferred the Best Islamic Bank Award by Rawalpindi
Chamber of Commerce and Industry. The Chief Minister of Punjab Mr. Shahbaz Sharif
bestowed this award to Mr. Saleem Khan Regional Manger - North, Meezan Bank at 21st
RCCI achievement awards ceremony held at the Convention Center in Islamabad.
124
WEAKNESSES
The Islamic economic system is not something that can work in isolation of
the geo-political and legislative system, as well as, and more importantly the society's
behaviors towards the injunctions of Islamic Shariah in personal and collective matters.
Accordingly, one can easily imagine that in an economy whereby most of the
businessmen are not honest in fairly presenting the financial statements of their
businesses, how difficult it is to introduce a profit-and-loss sharing based financial
solution.
WHY Islamic FINANCE?
Most importantly, it should be kept in mind that in some areas Haram and
Halal have a very small difference. For example, only saying the name of Allah Almighty
on an animal at the time of slaughter makes it Halal and permissible while by not saying
that name we make it Haram or by just a few words of acceptance in Nikah, in presence
of a few persons, a man and woman become Halal for each other. Similarly, if a
transaction can be engineered in a way that the same becomes Shariah compliant, then we
should not conclude that the same is Haram only due to its resemblance with the interest
based financing.
• Meezan Bank Limited has no ATM facility
• Meezan Bank Limited has no Credit card facility
• MBL branches are very limit.
STANDARDIZATION OF SHARIAH COMPLIANCE

REGULATIONS
Internationally, there have been a lot of efforts for standardization of

practices being followed by various Islamic financial institutions. These efforts include a
125
lot of research work. Nevertheless, the most admirable job has been performed by the
Islamic Fiqh Academy of the Organization of Islamic Countries and the Accounting and
Auditing Organization of Islamic Financial Institutions (AAOIFI). This organization has
been established by a number of Islamic financial institutions operating throughout the
world and is based at Bahrain. AAOIFI has established an Accounting and Auditing
Standards Board, as well as, a Shariah Board. These Boards have, to date, performed a
commendable job by issuing accounting, governance, auditing and Shariah standards for
Islamic financial institutions.
OPPORTUNITIES
Al-Meezan Investment Bank is about to launch a new product namely "Riba

Free” an Islamic Investment Deposit shortly. The introduction of this new mode of
Islamic finance has been scheduled to coincide with Hujjat ul Wida, the last sermon
delivered by Prophet Mohammad (PBUH) in which the interest was declared forever as
"Haram".
Al Meezan Investment Bank is a premier Islamic investment bank in Pakistan

operating strictly under the principles of Islamic Sharia'a. Its vision to establish Islamic
banking as a 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.
With a paid up capital of Rs721 million (approx. $13.9 million) which makes
it one of the largest investment banks in Pakistan, the bank offers innovative sharia'a
compatible products structured to meet customer requirements. The Management team
comprises of highly qualified professionals sharing a strong commitment to Islamic
finance. The bank brings together sponsors including highly respected multinational
financial institutions and multilateral Islamic institutions. Each and every transaction of
126
the Bank is monitored by its Sharia'a Adviser Dr. Imran Usmani who is a Ph.D in Islamic
Finance.
Meezan Bank is a public (unlisted) limited company and incorporated on

January 27, 1997 thereafter it commenced business in September 1997.
The Bank has been established an authorized capital of Rs1 billion of which
Rs721 million of the shareholders equity has been paid up. The balance share holding
will be offered to the general public through an initial public offering and to the
employees through a share ownership plan in coming June.
Meezan Bank is a joint venture between Pakistan Kuwait Investment

Company (Private) Limited and Islamic Investment Company of the Gulf, Bahrain E.C.
Other sponsors include Islamic Development Bank, Kuwait Awqaf Public Foundation and
Saudi Pak Industrial and Agricultural Investment Company.
• Information technology
• ATM card facility
• Establishing foreign branches
THREATS
First today all the branches must have been online for the progress.
Secondly the pricing is a little bit too high as compare with the competitor.
Thirdly there is no proper training program for the employers. So there should be proper
training for the staff.
The Meezan bank does not deal with all the products and services. This put them behind
the competition.
The Marketing structure of the bank is not so strong enough for the progress.
127
There is great competition in the market.
CONCLUSION & RECOMMENDATIONS
One of the most important aims of the student life is to express

him / her correctly and adequately. This was believed in my mind when I
first decided to go to Islamic Meezan Bank Limited to complete my
internship program.
The organization has been growing both in size and profit for
past few years and repute in the market. The employee turnover is ver y
high which they have to cut down as they are losing a number of good
trained employees due to its poor policy. The year 2007 is expected to
offer increased competition in the secured assets business as more Islamic
banks are in the market. With their focused strategy and product
development initiatives planned for the year, Meezan Bank is strongly
positioned to meet these challenges. The bank has ver y well repute in the
market. Overall bank is going well and doing a good business but there
are few problems for that I have tried to give few recommendations that
might help company to improve. So finally this internship program has
helped me a lot in gaining practical knowledge of job that will help me in
the practical life once I complete my MBA.
128
RECOMMENDATIONS
I spent six weeks of my internship in MBL SWL Branch. During these six
weeks, I felt myself to be a part of bank. Even, this was my first experience of working in
a bank, but I learned a lot from this experience. Based on my experience & observation
regarding the operations and policies of Meezan Bank, I have tried to stipulate some
recommendations for further improvement.
• Meezan Bank Limited should establish a Department of Human Resource

Management.
• Precipitation of Smoking in the organization is strongly recommended.
• Meezan Bank Limited should continue to expand its business, by increasing its
deposit portfolio through aggressive market penetration strategies.
• Meezan Bank Limited needs to improve its website. More information relating to
financial performance of the bank should be available on the website.
• Management should distribute work equally among different employees. Some of
the employees are overburdened while some sections are overstaffed.
129
• Related jobs should be assigned to the employees so that they can work more
efficiently.
• Cheques, which are drawn on Meezan Bank Branch and returned unpaid in
clearing, are not reflected in the Statement of Account of the customers. These
cheques must be reflected in the accounts so that credibility of the customers may
be assessed.
• The employees should be signed jobs for specific period and than they should
shifted to other department so that they gain knowledge of other jobs.
• Lockers, ATM, all these facilities should be provided to attract more customers.
Increase the Size of waiting room.
Reference& sources:
I used following references to prepare my reports
1. Manager of the branch

Mr. Sadaat Khan Gauri
1I collect information from manager in the form interviews
2. Operation manger
Mr. Gul Nawaz Khan
3. Employees of the branch

1I collect information from other staff members of the branch in the form interviews and
questionnaires.
4. Pamphlet or brochure
I also study the different pamphlet of the different products and department
Friends and teachers:
The most important of me in the preparation in my reports are my friends and my
teachers who help me and guided at each step.
5. Internet
130
The very very important source where I collect data about the meezn bank is the
internet. I visit cite of the Meeazan bank and AL-Meezan investment group.
Following are both the websites are.
www.meezanbank.com.pk
www.almeezan.com.pk
6. Annual Report 2007

I have some of material use in annual report 2007 and half of June 2008.
Annexes
131
132
133
134
135

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Meezan Bank Limited

MBA (Banking &Finance)

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

It is great pleasure for me to acknowledge our deepest sense of gratitude and

Mr. Rashid Iqbal Mr. Faisal Manzoor

Meezan is a publicly listed company first incorporated on January 27,

4 Plan of your internship program 46

11 Reference & Sources used 133

Introduction of the Meezan

At Meezan Bank, we strive to find commonalties with the conventional

Furthermore, the Bank has built a strong Information Technology and

We believe in adding value to our customers' lives and businesses through

General Pervez Musharraf

OVERVIEW OF THE MEEZAN BANK Ltd

History of Islamic banking in Pakistan

Jardine Fleming made a substantial contribution towards the development

"Establish Islamic banking as banking of choice to facilitate

Procedure adopted by banks in 1985 was declared unIslamic by the Federal

Al Meezan Investment Management Limited (AMIM), the asset management

The Government of Pakistan awards the mandate for debut of international

The members of the Shariah Board of Meezan Bank are Internationally-renowned

• Justice (Retd.) Muhammad Taqi Usmani

• Vice President, Darul Uloom Karachi

• Chairman, Shariah Council AAOIFI, Bahrain

• Member, Islamic Fiqh Academy of Rabita-al-Alam-e-Islami, Makkah

• Member, European Council of Fatwa and Research, Dublin, Ireland

• Chairman, Center for Islamic Economics Pakistan since 1991

• Chairman, Shariah Board, Bahrain Monetary Agency, Bahrain

• Chairman, Shariah Board, Amana Investments Limited, Sri Lanka

• Chairman, Shariah Board Abu Dhabi Islamic Bank, UAE

• Chairman, Shariah Board Islamic House of Britain plc, UK

• Member, Shariah Board, First Islamic Investment Bank, Bahrain

• Member Shariah Board, Islamic Corporation for Development of the Private

• Member Shariah Board, Guidance Financial Group, USA

• Member Shariah Board, Saudi American Bank

• Member Shariah Supervisory Board, First Islamic Investment Bank

• H. E. Sheikh Ebrahim Bin Khalifa Al-Khalifa (Chairman)

• Naser Abdul Mohsen Al-Marri (Vice Chairman)

• Yousif Saleh Khalaf

• Zaigham Mahmood Rizvi

• Mazen Khalid Al-Braikan

• Irfan Siddiqui (President & Chief Executive Officer)

• Ariful Islam (Chief Operating Officer)

• Rana Ahmad Humayun

Nature of the Meezan Bank

Establish Islamic banking as banking of first choice to facilitate the

To be a premier Islamic bank, offering a one-stop shop for innovative

Our Service Mission

Welcome to Pakistan’s long awaited totally Shariah-compliant Home

Islamic Financing on a Diminishing Musharakah basis

Buy, Build, Renovate, or Replace!

Building a home is Easy & Halal

Renovating your home is Easy & Halal

Replacing your existing Mortgage is Easy & Halal