Final Report on Meezan Bank

INTERNSHIP REPORT ONMEEZAN BANK ABBOTTABAD(1501)

BY

Mubasher Nazir

BBA HONS (Finance)

ROLL NO: 8768

SESSION 2005-2010

HAZARA UNIVERSITY MANSEHRA

HAZARA UNIVERSITY MANSEHRA.

Internship Report on Meezan Bank Abbottabad

This Internship Report Is Submitted In Partial Fulfillment Of The Requirements

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

University Mansehra




Approval Sheet

Approval Committee

1. External Examiner

Mr. _____________________________________________

Signature_______________

2. Supervisor

Mr. ____________________________________________

Signature_______________

3. Head of Department

Mr. ___________________________________________

Signature ________________


Dedicated To

My dearest Parents and My Respected Teachers who motivate and encourage me in every aspect

of my life and a few Special Friends who have been supporting and cooperating with me to

accomplish this task.


ABSTRACT

Modern banking system was introduced into the Muslim countries at a time when they were

politically and economically at low ebb, in the late 19th century. With the passage of time,

however, and other socio-economic forces demanding more involvement in national economic

and financial activities, avoiding the interaction with the banks became impossible. As countries

became independent, the need to engage in banking activities became unavoidable and urgent.

Governments, businesses and individuals began to transact business with the banks, with or

without liking it. This state of affairs drew the attention and concern of Muslim intellectuals. The

story of interest-free or Islamic banking begins here. The history of interest-free banking can be

divided into two parts. First, when it still remained an idea; second, when it became a reality.

The literature of the period begins with evaluations and ends with attempts at finding ways and

means of correcting and overcoming the problems encountered by the existing banks. During the

last few decades interest-free banking attracted more attention, partly because of the political

interest it created in Pakistan and partly because of the emergence of young Muslim economists.

Meezan bank is the first Islamic bank and is therefore recognized as one of the pioneer banks

that promotes Riba-free (interest free) banking activities all over the country. The bank has

developed an extraordinary research and development capability by combining investment

bankers, commercial bankers, Shariah scholars and legal experts to develop innovative, viable,

and competitive value propositions that not only meet the requirements of today’s complex

financial world, but do so with the world-class service excellence which our customers demand,

all within the bounds of Shariah.



TABLE OF CONTENTS

Acknowledgments i

Preface ii

Executive Summary iii

CHAPTER 1

Introduction to Report

1.1 Background Of The Study 01

1.2 Purpose Of The Study 01

1.3 Scope Of The Study 01

Research Methodology 02

1.5 Scheme Of Study 02

CHAPTER 2

Introduction to Banking 03

2.1 Evolution Of Banking 04

2.2 Fairly Growrh 04

2.3 (1628- 1786 BC ) 04

2.4 687 BC 04

2.5 Modern Banking 04

2.6 Type Of Banking 05

2.7 Development Of Banking In America 07

2.8 National Bank Act 07

2.9 Banking Act 1935 07

2.10 Banking in Pakistan 07


CHAPTER 3

Introduction To Islamic Banking 09

3.1 Islamic Finance 09

3.2 The Islamic Economy system 09

3.3 The Importance Of Economic Goals 09

3.4 Islamic Theory 10

3.5 The Islam View 10

3.6 Capital can be Invested in a Business venture 11

3.7 Riba 11

3.8 Commercial interest and usuey 12

CHAPTER 4

History Of Meezan Bank ` 15

4.1 1997-2009 15

4.2 Meezan Bank Vision And Missions 16

4.3 Corporate Values 16

4.4 Background Review 19

CHAPTER 5

Comprehensive Business Solution 22

5.1 Corporate And Commercial Banking 22

5.2 Largest Branch Network 23

5.3 Financial Banking 24

5.4 Service Quality 25

5.5 Quaid’s Concept Of Islamic Banking 25

5.6 Riba Free Banking Objective 25


CHAPTER-6

Meezan Team 26

6.1 Treasury And Financial Intuition 28

6.2 Economic Our View 28

CHAPTER 7

What I Have Learn As A Internee 32

8.1 Account Opening 35

8.2 Issuance Of Cheque Book 26

8.3 Certificate Of Islamic Investment 39

8.4 Invest In Certificate Of Islamic Investment 39

8.5 Call Deposit Receipt 40

8.6 Cheques For Collection 42

8.7 7th And 8th Weeks At Meezan Bank 43

CHAPTER 9

Financial Analysis 46

9.1 Common Size Analysis 46

9.2 Ratio Analysis 53

CHAPTER 10

Swot Analysis 58

10.1 Strengths 58

10.2 Weaknesses 58

10.3 Opportunities 59

10.4 Threats 59

CHAPTER 11


Conclusions 60

11.1 Financings 60

11.2 Term Structure Of Investment By 20 Islamic Bank ,1988 61

CHAPTER 12

Recommendation 66

12.1 Performance Appraisal 66

12.2 Proper Job Rotation 66

12.3 Fair Benefits 66

12.4 Overload Of Work 67

12.5 Credibility Of Customers 67

12.6 Customer Relationship 67

12.7 Empowerment Of Employees 68

12.8 Marketing Culture 68

12.9 Health Activities 68

References 70

Bibliography 71

Appndex 75


Acknowledgements

Allah is very Kind, Merciful and Compassionate. His benevolence and blessings have enabled

me to accomplish this task.

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

Manager, Meezan Bank Abbottabad for their support and collaboration.

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

throughout to complete this tough task.

I pay special gratitude to all my honorable teachers who have been teaching me various courses

during the last five years at CIIT, with addict zeal and zest.

I wish to express my heartiest and sincere appreciation to my friends for their continuous help,

cooperation, and moral support.

The last but not least, I would feel incomplete without thanking to my parents who pray for my

brilliant success and bright future.

Mubasher Nazir


Abbreviations

MMF : Al Meezan Mutual Fund Limited

IFIs : Islamic Financial Institutions

MIF : Meezan Islamic Fund

AMMF : Al Meezan Mutual Fund Limited

RTC : Rupees Travelers Cheque

MAC : Meezan Aamdan Certificate

COII : Certificate of Islamic Investment

MIIDA : Meezan Islamic Institution Deposit

Account

TT : Telegraphic Transfer

DD : Demand Draft

MT : Mail Transfer

PLS : Profit and Loss Sharing

FDD : Foreign Demand Draft

LC : Letter of Credit


Executive Summary

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

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

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

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

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

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

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

company.

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

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

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

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

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

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

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

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

structure.

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

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

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


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

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

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

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

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

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

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

have a good reputation in market.

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

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

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

preparation of my reportrnship.


CHAPTER 1

INTRODUCTION TO REPORT

1.1) Background of study :

Meezan Bank Ltd has grown to become the largest Islamic bank in the country. The bank

claims to be the Pakistan premier Islamic bank determined to set higher standards of

achievements . The bank comes in to existence by the order promulgated by governor general

and standard functioning from Nov 20, 1997

Meezan Bank is the major business partner our government of Pakistan with special emphasis on

fostering Pakistan economic growth through aggressive and balanced lending polices,

technologically oriented products and services offered through its large network of 203

branches .

1.2) Purpose of study :

The purpose of study is to get more knowledge about the structure and function of the

department of MBL has clear picture of its financial health in particular . For this purpose a

through financial analysis through common sizing and ratio analysis of the bank, is carried out to

is to judge the actual financial standing of the bank .

Solid recommendations are given on all aspects to further improve the functioning of the bank .

1.3) Scope of the study :


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

observation of large bank. Being a specializing in finance, the main focus of study is its financial

aspects including the financial health of the bank and its comparison with previous year

performance .

Some of the problems faced by the bank have been identified and some remedies have also been

suggested to overcome these problems and improve the prevailing financial condition of the

bank .

1.4) Research Methodology:

MBL is one of the leading and establishes bank of the country. It has a large step of

departments and a big organizational structure. While working in a branch of the bank , it is not

possibly to thoroughly cover all the areas of the bank , as it requires more time and eight weeks

are in no way sufficient to do.

Different tools and techniques were use together relevant information for writing the report first

interview were taken from the manager and other staff member of the bank. For this purpose

some unstructured question were asked and depending on them some conclusion were made.

Secondly, the liter & journal from regional head quarter and staff college were also

reviewed which gave very useful information about the functioning of the bank.

I also visited the MBL official website i.e. www.meezanbank.com which gave very useful

information about functioning of the bank.

My personal observations during the short stay also helped me to collect about this specific

branch.

1.5) Scheme of study :

The scheme of study of the report is as under .

1 Part one is about the introduction of the study, which includes its background, purpose and

scope of the study research methodology and the scheme of study .


2 Part two is about the literature review, of the bank , the departmentation and its function, and

detail study of the credit department . Part three is about the financial analysis of the bank,

which includes the ratio analysis, common size analysis, comparative analysis and index

analysis .

3 Part four is includes SWOT analysis, problems and recommendations prescribe for the bank

to further improves its functioning .

CHAPTER 2

INTRODUCTION TO BANKING

WHAT IS BANK?

Before going to start we must know that what is bank? Like many other subjects and social

sciences no any precise definition can be given for the study of banking also. Different authors

have defined and described this subject, keeping in view the particular functions of banking.

Mr. Paget says “No one and no body corporate can be a banker who does not open:

1 Current Account

2 Pays cheques drawn upon him

3 Collects cheques for the customers

Mr. Kinly says “Bank is an institution which receives deposits and advances loans”.

The definition laid down in the Banking Companies Act 1962 is “Bankers means a person,

transacting the business of accepting for the purpose of lending or investment, of deposits of

money from public, repayable on demand or otherwise and withdrawals by cheques, drafts or

orders or otherwise and includes any Post Office Saving Bank.”

In view of the above definitions, in simple words a bank can be defined as an institution dealing

in money, accepting deposits and advancing loans.


Definition

There are different opinions about the origin of the word “Bank”. According to some authors the

word bank is derived from Latin word “Bancus” or “Banque” which means a bench. The

explanation of this origin is attributed to the fact that the Jews in Lombardy transected the

business of money exchange on benches in the market place. When the business failed, the

people destroy the bench. Incidentally the word bankrupt is said to have been evolved from this

practice.

Origin:

The opponents of this opinion argue that if it was so, then how is it that the Italian

moneychangers were never called Bunchier in the middle ages. Other authorities hold the

opinion that Bank is derived from German word back which mean joint stock fund. Later on,

when the German occupied major part of Italy, the Back was italicized into Bank.

2.1) Evolution of banking

The word Bank derived from the words “ bancus or banque which means a bench .

The word bank is derived from the German word Bank which joint Stock Fund .

2.2) Early growth

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

used as Banks .

2.3) 1628 – 1786 BC .

king Hammurabi the founder of the Babylonian empire dew up a code where in he laid down

standard uses of procedure for banking operations by temples and great land owners .

Sumerians , Babylonians, Hittites and Assyrians standardized the vales of goods in silver ,

copper, bronze or electrum .

2.4) 687 B.C

Gyges , king of Lydia, casted electrum ingots of identical shape and uniform weight. As an


official guarantee of values in 687 BC.

In Greece, the temples of Ephesus and Delphi were the biggest Banks .

The earliest known public bank is said to be the bank of Venice which was established in 1157

AD .

Soon Venice and Genoa become the most important money market .

Modern banking originated in the 14th century in Barcelona.

In 1401 a German public bank are formed.

Bank of Genoa in 1407, by the 16th century , some more public banks were formed in Venice,

Milan, Amsterdam, Hamburg and Nuremberg .

Bank of Amsterdam was also founded in 1609 .

In 1690 , the bank of Hamburg came in to Existence .

2.5) Modern Banking

1700, the banks of England was not only issuing notes but also conducting accounts for

customer .

1 In 1946 the labor Government nationalized the bank of England.

2.6) Types of Banks :

1 Commercial Banks

2 Merchant Banks

3 Mortgage Banks

4 Saving Banks

5 Consumer Banks

6 Investment Banks

7 Development Banks

8 Cooperative Banks

9 Exempt Banks

10 Central Banks


1.Commercial Banks:

The commercial banks receive from the general public which are repayable on demand upon

written orders of depositors. The commercial banks are also distinguished for providing short

term finance to trade , commerce and industry to enable these sector to expand their

productive activities .

2. Merchant banks :

Merchant banks are those which have been mainly financing the domestic and international

trade in united king Dom . During the late 18th and 19th century the trade between countries

was financed by bills of exchange by well reputed merchant houses for which they would

charge a commission for their service .

3.Saving Banks :

The basic purpose of these banks is to inculcate the habit of savings in the people . The

saving bank deposits are not repayable upon the written orders of the depositor but the

depositor or his agent has to appear personally at saving bank to make withdrawal , and for

this purpose he must present a pass book, a certificate of deposit or some similar documents

to prove his right to receive payment.

4. Mortgage Banks :

These banks mainly deal in loans for the acquisition or construction of real estate against the

security of mortgages . Saving and loans associations and farm _loan associations are some

of the well known forms of the mortgage banks .

5. Consumer Banks :

These banks provides finance for purchasing consumption goods for the use of the borrowers

. sales finance and credit unions are some of the popular forms of consumer banks


6. Investment Banks :

The investment banks asset business houses and government bodies to raise money through

the sale of stocks and bonds for usually long term purposes .

7. Development Banks :

The banks have been established to provide long-term development finance to the trade,

commerce, and industry.

8. Cooperative Banks :

These are the banks established and registered as a cooperative venture to provide banking

facilities to the members of the cooperative .

9. Eximp Banks :

These are the banks which provide finance for promotion of import and exports to trade,

commerce and industry .The bank are contributing greatly toward the expansion of

international trade .

10. Central Banks :

Central banks occupy unique position in the banking structure of a country , because they

have been entrusted with the responsibility of controlling the money supply, interest rates and

financial market of the country for the purpose of economic development .

2.7) National Bank Act :

Was passed by the congress in 1863 , which required each new national bank to deposit

united states Bonds equal to one- third of its capital with comptroller of currency . National

notes equal to 90 % of the par or market value of the deposit bonds, whichever was lower .In

1913, the federal Reserve Act was passed ,and it reduced the requirement of the reserve for

the banks if they formed themselves into commercial banks .

2.8) Banking Act 1935:


Laid the foundation for the modern federal Reserve system by establishing the federal

open market operations and buying and selling of government securities . 1939, commercial

banking system was functioning satisfactorily with as many as 14,531 commercial banks in

the united states .

1940 to 1945, while the holding of Government securities by the banks increased to almost

four times . the post war period saw some recession in the banking system , but soon it was

over , and the banks regained their stature by 1962.

2.9) Banking In Pakistan :

There were 487 offices of scheduled banks in the territories now constituting Pakistan

The committee recommended that the Reserve Bank of India should continue to function in

Pakistan until 30th sep 1948 .

By 30th June 1948, the number of offices of scheduled banks in Pakistan declined from 487 to

only 195 .

Quaid-i-Azam Muhammad Ali Jinnah inaugurated the state bank of Pakistan on July

1st,1948 .

The first Pakistan notes were issued in Oct, 1948 in the denominations of Rs 5,10 and by

August 1949 the state Bank of Pakistan withdrew the Reserves Bank of India notes of the

values of Rs 125.02 cores with the help of the Pakistan notes .


CHAPTER 3

INTRODUCTION TO ISLAMIC BANKING

3.1 Islamic Finance

Islamic finance was practiced predominantly in the Muslim world throughout the middle Ages,

fostering trade and business activities with development of credit . In Spain and the

Mediterranean and Baltic states , Islamic merchants became indispensable middleman for trading

activities. In fact European financier and businessmen later adopted many concepts, techniques,

and instruments of Islamic finance. The financial system is founded on the absolute prohibition

of the payment or receipt of any predetermined. granted rate of return .this closes the door to the

concept of interest and precludes the use of debt- based instrument . The system encourages risk

sharing promotes entrepreneurship, discourages speculative behavior, and emphasizes the

sanctity of contracts .

3.2 The Islamic Economic System

One of the forms of capitalism, which has been flourishing in non Islamic societies , is the

interest based investment . There are normally two participant in such transaction . one is the

investor who provides capital on loan and other manager who run the business . The investor has

no concern whether the business run in to profit or loss he automatically get interest .

Distribution Of Wealth

The distribution of wealth is one of most important and controversial subject concerning the

economic life of man which has given birth to global revolution in today’s world and affected

every sphere of human activity from international policies down to the private life of the

individual .

3.3 The Importance Of The Economic Goals

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


meritorious and sometimes even obligatory and necessary . it approves of the economic progress

of man , and consider lawful or righteous livelihood an obligation of the secondary order .

Notwithstanding all thus, it is no less truth that it does not consider economic activity to be the

basic problem of man .

3.4 Capitalist View / Islamic theory :

1 Capital :

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

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

production .

2 Labor :

That is to say exertions on part of man .

3 Land :

Defined as “natural resources” those thing which are being used as means of

production without having previously undergone my process of human production .

4 Entrepreneur Or Organization:

The fourth factor that brings together the other three factors, exploits them and bears

risk of profit and loss in production .

3.5) The Islamic View :


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

5 Those who have primary right that is to say, those who have a right to wealth directly in

consequence of participation in the production. In other words it is those very factors of

production which have taken a part in the process of producing some kind of wealth .

6 Those who have a secondary right, that is to say, those who have not taken a direct part in

the process of production, but it has been enjoined upon the producers to make them co-

sharers in their wealth .

3.6 Capital Can Be Invested In a Business Venture

1 Private Business

The man who invest capital may himself run the business without the help of any partners or

shareholders. In this case the return which he gets may be called profit from the legal or

popular point of view, but in economic terms, this reward would be made up of .

2 Profit in as much as capital has been invested .

3 Wages, as earning of management .

4 Partnership;

The second form of investment is that several persons may jointly invest capital, jointly

manage the business and jointly bear the risk of profit and loss. In the terminology of the

Fiqh, such a venture is called Shirkat-Aqd or Partnership in contract .

1 Co-operation Of Capital And Organization (Mudarabah)

The third form of investment is that one person may invest capital while another may manage

the business, and each may have a share in the in the profit . In the terminology of Fiqh, it is

called Mudarabah.The person who invest his capital Rabb-ul-Mal will get his share in the

form of profit while the person who has actually managed the business will get it in the form

of wages .


3.7) Riba

2 Definition of Riba

The word Riba means excess, increase or addition, which correctly interpreted according to

Shariah terminology, implies any excess compensation without due consideration .

3 This definition of Riba is derived from Quran and is unanimously accepted by all Islamic

scholars

.

4 TYPES OF RIBA

There are two types of Riba .

1. Riba An Nasiyah

2 .Riba Al Fadl

Riba An Nasiyah :

Defined as excess, which result from predetermined interest which a lender receives

over and above the principle (Ras ul Maal).

1 Riba Al Fadl :

Defined as excess compensation without any consideration resulting from a sale of goods .

Riba Al Fadl will be covered in greater detail later .

3.8) Commercial Interest And Usury :

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

system.

2 Tijarti Sood :

Interest paid on loan taken for productive &profitable purposes .

3 Sarfi Sood :

Interest paid on loan taken for personal need and expenses .


Islamic banking:

The interest free system envisages the gainful use of one’s saving with other on the basis of

profit and loss sharing in a defined manner . Effective from Jan 01, 1981, the Nationalized

commercial banks and now all other commercial banks in Pakistan have introduced the

profit and loss sharing (PLS) Deposit Scheme features of which as under .

4 PLS- Saving Accounts

5 PLS Term Deposit Accounts

6 Investment Of PLS Deposits

Musharikah Financing :

“A business relationship established under a contract by the mutual consent f parties for

sharing of profit and losses arising a joint enterprise venture”

Ijarah ( Leasing

Ijara as “an agreement whereby a person agrees to transfer the usufruct of a property to

another person for a mutually agreed rent, terms, and conditions while the ownership of the

corpus of the leased property remain vested in lesser .

Mudarabah Financing :

Mudarabah is a business in which a person participates with his money while the other

with his skill or efforts or both his skill and efforts . NIT Units and Mutual Funds are the

best example of Modaraba in Pakistan .

Types Of Mudarabah :

1 Al Mudarabah Al Muqayyadah

2 Al Mudarabah Al Mutlaqah

1. Al Mudarabah Al Muqayyadah :

Particular business or particular place for the the mudarib, in which case he shall


invest the money in the particular business or place . This is called Al Mudarabah Al

Muqayyadah .

2. Al Mudarrabah Al Mutlaqah :

Rab-ul-maal gives full freedom to mudarib undertake whatever business he deems, fit

this is called Al Mudarabah Al Mutlaqah .

Uses Of Musharakah / Mudarabah :

1 Asset Side Financing :

1. Short / medium / long term financing

2. Project financing

3. Bridge financing

4. Export financing

5. Working capital

Liability side Financing :

1. Current / Saving / Mahana Amdani / Investment .

2. Inter Bank Lending / borrowing .

3. Term Finance Certificate .

Istisna :

“ Advances payment of goods to be manufactured assembled, built or constructed, or caused so

to be done, at an agreed price in which the goods with specifications are to be delivered at be

delivered at a specified future date and place .”

1 Salam :

(Advances payment against delivery) “ A sale whereby the seller agrees to supply specified

goods to a buyer by a future date in consideration of price paid in advances at a time specified in

the contract .”


CHAPTER 4

HISTORY OF MEEZAN BANK

4.1) MEEZAN BANK

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

product and services to our customers within the bounds of Shariah, while optimizing the stake

holder’s value through an organizational culture based on learning, fairness, respect for

individual enterprises and performances .

1997

Al Meezan Investment Bank is established with a mandate to pursue Islamic Banking . Mr. Irfan

Siddiqui appointed as first and founding Chief Executive Officer .

1999 :

The Shariat Appellate Bench of supreme court of Pakistan reject the appeal and direct all laws on

interest banking to cease but the Government set in a high level commission, task and

committees to institute and promotes Islamic banking .

2001 :

Muhammad Taqi Usmani as a chairmen established the shariah supervisory Board at Al Meezan

Investment Bank . State Bank of Pakistan set a criteria of Islamic commercial bank in private

sector and subsidiaries and stand alone branches by existing commercial banks to conduct

Islamic banking in the country .

2002 :


Al Meezan convert itself in to a full fledge Islamic commercial bank . The first Islamic banking

license is issued to the bank and is renamed Meezan Bank . President general Pervaz Musharraf

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

2003-----2009 :

2 Meezan Bank established itself a pioneer of Islamic Banking in Pakistan and

wide range of products are developed .

3 The state Bank establishes a dedicated Islamic banking development by

merging the Islamic economic division .

4 Meezan bank becomes the first customer of Islamic issuance by signing the

first memorandum of understanding MOU with pak Kuwait Takafal

company ltd .

5 Meezan banks becomes the first Islamic bank to introduce 8am to 8pm

banking at selected branches in Karachi

6 Meezan banks open up its 100th branch

7 With 166 branches in 40 cities across Pakistan. Works start on the

construction of Meezan Banks new Head Office building

.

4.2) Meezan Bank Vision and Missions:

1 Vision:

Established Islamic banking as banking of first choice to facilitate implementation of an

equitable economic system, providing a strong foundation for establishing a fair and just

society for mankind .

2 Mission statement :

To be a premier Islamic bank offering a one-stop shop for innovative value-added product

and services to our customers within the bounds of Shariah, while optimizing the stake

holder’s value through an organizational culture based on learning, fairness, respect for


individual enterprises and performances .

4.3) Corporate Values :

3 Core Values :

Shariah Compliance, Integrity, Professionalism, Service Excellence, Social Responsibility .

4 Brand Personality :

A sober and established, strong, empathic, professional person; who is an extremely loyal

and dependable friend and business partner, and is committed to offering comprehensive

value-based Shariah compliant financial solutions .

5 Staff :

Committed, motivated and professionally trained employees who are empathic to their

customer ‘s needs .

Relationships : Are long tem with Meezan Bank . we recognize and our customer’s needs

and strive to ensure their fulfillment . All customers are treated professionally and in a

friendly

manner .

It is our endeavor to ensure that they receive efficient and timely service .

The Meezan Bank experience is a unique one .

Are long tem with Meezan Bank . we recognize and our customer’s needs and strive to

ensure their fulfillment . All customers are treated professionally and in a friendly

manner .

It is our endeavor to ensure that they receive efficient and timely se. The Meezan Bank

experience is a unique one .


ORGANIZATION CHART


4.4 BACKGROUND REVIEW :

AL Meezan Bank started its commercial operations in sept in 1997 and got its scheduled

commercial status in May 2002 Meezan Bank Limited .The soundness of the Bank , which is

normally measured by reference to the Tier 1 capital Adequacy Ratio, is above 80%. The

internationally acceptable standard, which is also the minimum requirement of the state Bank

of Pakistan, is 8%. MBL capital adequacy ratio placed the bank at the top of the industry .

Meezan Bank Limited is the first schedule Islamic bank in Pakistan, which has been

licensed by the state Bank of Pakistan to operate as an Islamic Commercial bank .The bank

pirates strictly under the principles of Islamic Shariah . our in dependable Shariah

Supervisory board, comprising of internationally renowned Islamic scholars, regularly

reviews the bank’s activities .

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

7 Dr. Abdul Sattar Ghuddah (Suadia Arabia)

8 Shikh Essam M. Ishaq (Bahraim)

9 Dr. Muhammad Imran Usmani (Pakistan)


CHAPTER 5

COMPREHENSIVE BUSINESS SOLUTIONS

Meezan Bank has one of the largest offering of Shariah driven products and services under one

roof .The Bank has developed an extraordinary research and development capability by

combining investment bankers, commercial bankers shariah scholars .The introduction of many

products which satisfy business needs and meets world-class service standards .

5.1 Corporate And Commercial Banking :

Murabaha – import & Export Facilities

Musharakah – guarantees

Diminishing Musharakah – Bill Discounting by using Dollar Salam or Murabah

Ijarah – Islamic Export refinance

Mudarabah

Istijrar

Istisna

Retail Banking :

Rupee Saving Account certificate of Islamic Investment

Current Account Monthly Mudarabah Certificate

Dollar Saving Account Dollar Mudarabah certificate

Karobari Munafa Account Meezan Amdan Certificate

Meezan Islamic Institution Deposit Account Meezan Providence Certificate

Consumer Financing :

Car Ijarah-Islamic Auto Finance

Easy Home – Islamic Housing Finance


24/7 Banking :

ATM / Debit Card

ATM outlets

SMS Alerts

Special Banking :

Ladies Banking -8am to 8pm Banking

Meezan bank continue to educate the market by offering various business value propositions in a

transparent and open manner, in addition to addressing commonly asked questions about Islamic

Banking and how it differs from the conventional system .

Investment Banking & Sharaiah Advisory Services :

Syndication Structuring Sukuk Structuring

Privatization Mandates conventional Bank Conversion Advisory Services

Mergers & Acquisitions Islamic Banking Training

5.2 LARGEST BRANCH NETWORK

Meezan Bank has established 100 branches in 31 cities across Pakistan .

This is a milestone that is not only the success story of Meezan Bank but also continuing success

story of Islamic Banking in Pakistan . All branches provides all the facilities to customers

Meezan Bank continue to build its vision The cities in which bank presently operates are as

follows .


Southern Region Central Region Northern Region

Hyderabad Bahawalpur Abbottabad

Karachi Dera Ghazi Khan Dera Ismail khan

Nawbshah Faisalabad Peshawar

Quetta Gujranwala

Sukkur Kasur

Tando-Allah –Yar Islamabad

Southern Region Central Region Northern Region

Multan Rahim Yar Khan Mandi Bahauddin Swat

Sadiqabad Rawalpindi

Sargodha

Sahiwal

Sheikupura

Sialkot

5.3) FINANCIAL BACKING:

Shareholding structure % Rs.in million

Pakistan Kuwait Investment Co 30 1,478

Noor Kuwait Investment Co 46 2,242

Islamic Development Bank, Jeddah 9 459


Others 15 747

Paid up capital 100 4,926

5.4) SERVICE QUALITY :

Meezan Bank’s service mission is :

“ To develop a committed service culture which ensures the consistent delivery of our products

and services, within the highest quality service parameters, promoting Islamic values and

ensuring recognition and a quality banking experience to our customers”.

5.5) QUAID”S CONCEPT OF ISLAMIC BANKING:

“We must work our sestiny in our own way and present to the world an economic system based

on true Islamic concept of equality of manhood and social justice”.

5.6) RIBA—FREE BANKING OBJECTIVES :

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

3 valuable alternative to conventional interest based finance.

4 To continue exploring developing and delivering new products and

5 Services that fulfill all banking needs of our customers

6 To achieve sustainable growth, maximum market share, and high

7 Profitability in all areas of banking and other affiliated

8 Islamic financial services .

9 To maintain absolute world class service excellence, with a dedicated

10Focus on value and recognition for our customers.

11To build and sustain a high performance culture in accordance with


12 Islamic values and Shariah principles.

13To effectively manage meezan Bank’s portfolio of businesses to

14Achieve strong and sustainable return to our depositors

15And shareholders.


CHAPTER 6

MEEZAN TEAM

The business segments of the banks are :

Corporate Banking

Investment Banking

Commercial Banking

Treasury & Financial Institutions

Asset Management

Corporate Banking :

Corporate Banking plays an important role in the growth of the bank’s financing

activities and profitability. During the year Meezan Bank maintained a cautions approach in

booking new assets and focused on reducing large exposures to a single obligor so as to mitigate

concentration of risk .

Corporate Banking successfully introduced a new product called Tijarah this product is

designed to allow customers to raise funds for financing of stocks of finished goods .Istisna

which is introduced in 2008 was very successfully and extensively deployed across the Meezan

bank network .

Investment Banking :

The investment banking department was set-up in 2006 and focuses primarily on the

following activities :

1Syndicated & Structured finance

2Project Finance

3Corporate & Financial Advisory Services

Investment banking has developed unique Shariah structuring capability in a very short period of


time and is actively involved in innovative product development initiatives required to meet the

long term project finance needs of customers .

Commercial Banking :

Commercial Banking target the middle market . This market represent the back-bone of

Pakistan ‘s economy and has high growth potential. Since the inception of this department in

2005, Meezan Bank has maintained a cautious and well balanced approach in booking

commercial Banking assets as a result of which portfolio assets quality has been very good –

evidenced by timely payment of all obligations .Customers with a turnover of less than Rs.800

million in this business segment, that includes small and

medium scale enterprises (SME) . The (SME) target with an annual turnover of Rs. 300 million

and total financing is 75 million .

Consumer Finance :

Consumer Finance is responsible for managing the retail assets products of auto finance----Car

Ijarah and house mortgage ---- Easy Home . With pioneering and prime- mover initiatives in

both products, the department has now established itself on sound business infrastructures,

penetrated key market segments, and built recognizable brand identities in not only the Islamic

but the overall banking sector .

Car Ijarah application is usually processed within two days, while the document intensive and

complex process of Easy Home – home mortgage based on the concept of Diminishing

Musharakah is available in a record setting average of 15 days .

Auto Finance :

The auto finance business has a 7 years track record and its portfolio now stands at Rs.4,356

million comprised of over 9000 active vehicle contracts. Growth has been steady during this

period, within depressed and uncertain economic conditions

.

Housing finance :


The nation’s first Islamic Housing Finance facility .Meezan Bank’s Easy Home completed its

5th year in December 2009 and consolidated its market position by undertaking rs. 1.5 billion

new disbursement during the year.

Branch Network & Deposits :

Meezan Bank has maintained an aggressive branch expansion policy and added 66 new

branches and sub branches to its network, bringing the total network to 166 branches in 40 cities

across country. The Bank’s Deposit portfolio grew to Rs. 70.234 billion during the year .

6.1 Treasury & Financial Institutions :

2009 was an eventful year .Rising interest rates, coupled with a freeze in the local stock

market for more than three months resulted in a severe loss of confidence and led to a liquidity

crunch in the last quarter .

Meezan Bank remained unaffected by this crises , rather becoming a formidable player in the

local money market , placing funds with major banks and non banking financial institutions

using Shariah – approved structures. Treasury was not only able to deploy its excess liquidity,

but also benefit from the SLR eligible security that was in its custody for the period .

6.2 Economic Overview:

2009 was a tumultuous year of the world financial sector , starting with Sub-prime mortgage

crisis in US that eventually led to the collapse of the financial giant Lehman Brothers and started

the biggest downturn faced by the financial industry since the Grat Depression of 1992. Relative

to this cataclysmic crisis faced by the international financial markets, the Pakistan banking sector

has remained relatively stable.

They external current account deficit grew to US$ 14 billion, equivalent to 8.4% of GDP

which is approximately three and a half percentage points higher than the initial projection for

the year 2009 and more than twice of last year’s level in absoluter terms. As a result, foreign

exchange reserve dropped sharply and the Pak Rupee depreciated buy over 30% during the year.

Initial results are satisfactory and gave stabilized the commodities, has provided significant relief


to the economy, as a result of which foreign exchange reserves are also now stable and inflation,

although still high, has also decreased to levels of around 20%

Operating Results

Despite the gloomy economic outlook, Meezan continued with its branch expansion

strategy, By the Grace of Allah, the Bank now has 166 branches located in 40 cities in Pakistan,

an addition of 66 branches including 35 sub branches during 2009, This significant achievement

of establishing an extensive network within a short span of 7 years enabled Meezan Bank to

maintain its leading position an among the Islamic Banks operating in Pakistan. As a result the

Bank was able to record strong growth in deposits, that increased by 29%-compared to the

banking sector as whole that grew by approximately 6% during the year. A grew financial

highlights are given below:

Rs . in million

2009 2008 Growth in %

Deposits 70,234 54,582 29

Financing and investments 54,055 45,112 20

Trade Business 93,379 73,123 28

Branches 166 100 66


CHAPTER 7

WHAT I HAVE LEARNED AS AN INTERNEE

It was very good experience of internship at Meezan Bank . I was introduced to different aspect

of money , banking and finance and found this field very interesting .This report comprises my

eight weeks of internship at Meezan Bank . Now first of all I described the job description of the

branch employees and what I have learned from different department .

7.1 1st week

I started my first day of internship with the introduction of bank employees and

with introduction of bank departments. In This week just know how work done in the various

departments in the bank Like:

Finance

Marketing

I T

Operation Management etc

I knew about the purpose of the bank and the functions of the bank and judge the

practical performance of the departments.

I started my second day of internship with the lecture of the bank officer. He told us

about Riba and its types:

Riba al Nasiah

Riba al Fadl


Then he told about important element Basic Mode of Financing in which Mudaraba and

Musharaka lies.

I learnt about characteristics and procedure of Mudaraba and Musharaka.

Then I moved to Accounts Department for learning something new.

I learnt about IBTDR (Islamic Bank Term Deposit Receipts) and knew what its meaning

and functions.

Basically IBTDR involves Accounts:

Saving Deposit accounts

Term Deposit accounts

I knew about different types of saving accounts like MBA (Meezan Bachat Account),

KMA (karobari Munafa Account), COII, MMC, MAC and etc. these are MUDARABA

based deposits products.

I learnt about the profit rates of the accounts and procedures to open these accounts.

I learnt about also CDR (Call Deposit Receipts) and its procedure and knew its purpose and how to fill it an proceed.

7.2 2nd & 3rd week

I started this week with the lectures of the Bank officer about bank and its performance. I learnt

the actual means of practical work in the bank. First of all I started my work in the ACCOUNT

OPPENING DEPARTMENT of the bank in which I learnt how an account can be opened in a

bank, which documents are necessary to attach it with the account opening form and how many

kinds of account are used in bank like

Single

Joint personal

Sole proprietorship


The requirement for opening these types of a/c are

Select the nature of a/c

Attested photo of applicant

Then the permanent address

NIC copy.

occupation

The reference of any person who has already the a/c or any respected personality

The other information related to the a/c filled on choice of applicant.

The signatures are done on form as well as on the specimen signature card from where

the signature will be scanned as a record in computer

Partnership

Limited company

Trusts

Clubs

Association etc.

The requirement for opening these types of a/c are

7.2.1 For partnership

Attested photocopy of CNIC of all partners

Attested copy of Partnership Deed duly signed by all partners of firm.

Attested copy of Registration Certificate with register of Firm. In case the partnership is

unregistered this fact should be clearly mentioned on the a/c opening form

Authority letter, in original, in favor of the person authorized to operate on the a/c of the

firm.


7.2.2 For Joint Stock Company

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

operate the company a/c

Memorandum and articles of association.

Certificate of incorporation

Certificate of Commencement of Business

Attested photocopies of CNIC of all directors

List of directors on Form 29 issued by the Registrar Joint Stock Company

7.2.3 For Clubs, societies and Associations

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

Resolution of the Governing Body / Executive Committee for opening of a/c authorized

the person to operate the a/c and attested copy of the CNIC of the authorized person(s)

As understanding signed by all authorized persons on behalf of the institute mentioning

that when any change takes place in the persons authorized to operate on the a/c, the

banker will be informed immediately.

7.2.4 For Agents a/c

Certificate of power of Attorney

Attested photocopy of CNIC of the agent.

7.2.5 Trusts a/c

Attested copy of Certificate of Registration


Attested photocopy of CNIC of all the trustees

Certified copy of instrument of Trust.

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

Sir Tanveer.

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

information from applicant.

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

I practically performed how letter of thanks attached to the forms and send to the

customer.

I learnt about the different types of stamps, which are necessary for the account opening

and learnt about the use of the stamps at the right place.

I learnt how to attach signature specimen card to the account opening form for bank

record.

7.3 4th Week

I started my week of internship with the daily lectures of the bank officer (Mr. Subtain [OGII])

who is the organizer of internship program for internees in meezan bank.

I learnt about the role of STATE BANK OF PAKISTAN in Pakistan’s economy from the

lecture and know about the prudential regulations briefly not explanatory which are

Regulation M-1 Know Your Customer (KYC)

Regulation M-2 Anti-Money Laundering Measures

Regulation M-3 Record Retention

Regulation M-4 Correspondent Banking


Regulation M-5 Suspicious Transactions

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

form.

Then I know how to receipts are filled.

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

First of all I learnt about ATM PIN ISSUANCE procedure and knew why it is necessary

for customer or account holder.

Then he showed us module in computer that how he enters the data of customer and how

it proceeds.

After proceeding computer shows a pin number that is issued for that customer who filled

the form for ATM. And this work is done means pin issuance by Head Office.

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

procedure and why it is used.

7.4 5th Week

I started my working day with some work, which has to complete from the previous week with

account opening forms.

I learnt about inward and out ward clearing and learnt how the transactions are made.

I learnt how to write the inward clearing cheques in the transaction record book.

I learnt to deduct the return cheques from the added amount of all cheques.

I learnt the entry of pay orders in the record book.

Know how of employees.


THEN

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

Like REMITTANCE department.

I learnt about the PAY ORDER and DEMAND DRAFT. He told us the difference of Pay

Order and DD.

I learnt also about the procedure of it. I also saw the Pay Order cheque and knew about its

attributes.

But DD is not made in Sahiwal Branch. But sometimes if necessary then they made it.

But mostly Pay Orders are made and send it to other cities also. Only Meezan Bank

provide this opportunity of Pay Order to send outside the city also.

I also learnt about the facility of LOCKERS and its functions.

Lockers have 3 types of it:

Small Size Lockers

Medium Size Lockers

Large Size Lockers

The officer told us its functions and charges and I knew about that how can hold locker

and which documents are required for getting the lockers. Lockers are the fire proof.

I attended the weekly meeting of bank manager with employees and attended the lecture

about modern way of banking delivered by the bank manager for the success if the

branch’s business.

7.5 6th & 7th week


I started my day with the daily lecture and general discussion about banking and scope of

banking in Pakistan in coming years.

I revised all practices according to account opening departments and cleared my all

confusion related to that department trough got work in that field.

I gave my feedback as a internee about the environment of the bank and about my

work experience in that department

I started my day with the daily lecture about Bank.

After that I went to ACCOUNTS DEPARTMENT and started my work. First of all I

cleared my all confusions about the previous topics then I started to learn further.

I learnt about FTT (Foreign Telegraphy Transfer) also known as SWIFT Message.

In it I knew that how can get and send money from and to foreign countries.

He told us its procedure and function. I knew about how the message can create and

what sources are used for it.

Then I learnt about SMS ALERTS. He told us its function and I knew about that

what information is required for its activation and what information it gives to

customer through SMS.

I learnt what are the Local Posting and Online Transferring and how it is done.

Then I learnt what Stop Payment is and how it is performing and what its terms and

conditions.

I knew about what Account Closing is and what its procedures to close it and what

charges are required for it.

Then I saw the module of daily Accounts and Expense Entries posting. And knew

about the reason of entering it.

7.6 8th Week


I started my 8th week of internship with the lecture of the Bank Manager who is Mr. Shoaib, the

lecture was about Islamic banking and its differences in convention banking.

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

Then I learnt about Islamic Banking and knew what its actual meaning.

In Islamic Banking a term Riba Free is used which means “Avoid Interest”.

Islamic Banking is a system of Trade where Goods and Services are sold and Capital is

invested to earn Halal profit by taking Risk.

Interest Free Banking is subset of Islamic Banking concept representing a number of

Banking Operations which avoid Interest.

I learnt about Convention Banking which is based on Pricing money and earning Interest.

Apparently Islamic and Convention Banking may look same but Islamic Banking is

permissible means “Allah has permitted trade and forbidden Riba”.

I learnt about difference b/w Islamic and Convention Banking up to some extent.

Then I moved to next department that was ACCOUNTS DEPRTMENT.(with the hold of

IT deptt, Remittance deptt)

I started my work in Accounts Department.

The Officer who is Mr. Faysal gave the overview of his working that he does.

I learnt about cheques how to fill them and knew about its functions.

I learnt that in banking cheque is known as Dr. Instrument.

Then I learnt about cross cheque and cross cheque has two types:

Simple crossing

Special crossing

I knew also another type of cheque that is Order Cheque and its purpose and function.

That day I learnt about cheque procedure and its use in different ways.



Chapter 8

FINANCIAL ANALYSIS

8.1 LIQUIDITY RATIO

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

Current Ratio = Current Assets/Current Liabilities

Year 2006 2007 2008 2009Current Assets 6812761 10212269 9373577 7108685Current liabilities 3242446 4848440 3607766 5065513Current Ratio 2.1 2.10 2.59 1.4


Liquidity Current Ratio

2.1 2.12.59

1.4

0

1

2

3

1 2 3 4

2006 2007 2008 2009

Solvency Ratio

Debt equity Ratio = Debt liabilities/ Net assets

Year 2006 2007 2008 2009Debt liabilities 24408794 36826824 57864137 74325579Net assets 6812761 10212269 5706656 5974978Debt equity Ratio 3.58 3.60 10.13 12.4


Profitability ratio

Year 2006 2007 2008 2009Net Profit margin 18.5 17.80 16.27 8.27Gross profit margin 43.83 45.86 46.39 54.61Return on capital employed

.018 0.0020 .0022 .0024


Debt Equity Ratio

0

10

20

2006 2007 2008 2009

Series1 3.58 3.6 10.13 12.4

1 2 3 4

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

PBIT = Core banking income before provision

Capital Employed = Equity + Long term liabilities

2009 6341 + 11025091 = 11031432

2008 5720 + 57864137 = 57869857

2007 4763 + 36826824 = 36831587

2006 3821 + 24408794 = 24412615

Investment Ratio

Year 2006 2007 2008 2009Earning Per Share 1.16 1.88 1.96 1.26Price Earning Ratio 15.92 10.51 15.2 17.03Dividend Per Share 16 10 20 8.6


Profitability ratio

0

0.01

0.02

2006 2007 2008 2009

Series1 0.018 0.002 0.0022 0.0024

1 2 3 4

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

to give attention here.


Earning Per Share

0

2

4

2006 2007 2008 2009

Series1 1.16 1.88 1.96 1.26

1 2 3 4

Price Earning Ratio

15.9210.51

15.2 17.03

0

10

20

2006 2007 2008 2009

Series1 15.92 10.51 15.2 17.03

1 2 3 4

Here the management has recovered their position and improved.

The dividend has decreased 20 to 8.6 R.s. This is very bad for company’s good will or stock

market. Management has to focus over it other wise the company has to bear more loss in future.

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

Year 2006 2007 2008 2009Average Ratio 1.67 1.57 1.70 .82Average Equity 16.70 15.64 10.30 18.39


Dividend Per Share

16

10

20

8.6

0510152025

1 2 3 4

2006 2007 2008 2009


Average Ratio

1.67 1.57 1.7

0.82

00.511.52

1 2 3 4

2006 2007 2008 2009

Average Equity

16.7 15.6410.3

18.39

05101520

1 2 3 4

2006 2007 2008 2009

CHAPTER 9

SWOT ANALYSIS

9.1 Strengths First exclusive Islamic bank.

The largest Islamic Bank in Pakistan with a network of over 204 branches in 54 cities.

And ending this year they have increase his branches in Pakistan to 280 branches.

Strong growth of its Islamic banking SBU.

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

renowned scholars, serving on the boards of many Islamic banks operating in different

countries.

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

cater to the needs of corporate and business concerns for purposes of investing their

Provident, Pension and Gratuity Funds. As any prudent investor, your main concerns


would be total security along with the best returns possible, especially as these funds are

a trust from your employees and one that bears an important responsibility.

Karachi, August 20, 2008: Meezan Bank, the largest Islamic Bank in Pakistan has been

conferred the Best Islamic Bank Award by Rawalpindi Chamber of Commerce and

Industry.

The Chief Minister of Punjab Mr. Shahbaz Sharif bestowed this award to Mr. Saleem

Khan Regional Manger - North, Meezan Bank at 21st RCCI achievement awards

ceremony held at the Convention Center in Islamabad.

Dedicated and professional staff

Shariah board of renowned scholars

Healthy working environment

Strong shareholding

9.2 Weaknesses

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

lack of promotions and advertising of their products and services.

Lengthy & extensive documentation

Centralized procedures making process slow

Weak marketing strategy, Target market not identified

Offering fewer services than the competitors

Risk Averse, approach of Head office.


The Islamic economic system is not something that can work in isolation of the geo-

political and legislative system, as well as, and more importantly the society's behaviors

towards the injunctions of Islamic Shariah in personal and collective matters.

Accordingly, one can easily imagine that in an economy whereby most of the

businessmen are not honest in fairly presenting the financial statements of their

businesses, how difficult it is to introduce a profit-and-loss sharing based financial

solution.

Meezan Bank Limited has no Credit card facility

Restricted Shariah based policies

9.3 Opportunities

House financing sector can be targeted to maximize the profit.

Growing demand of Islamic financial product and services.

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

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

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

Increase branch network within the country.

9.4 Threats


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

High Interest Rate from SBP

SBP has not special policy regarding Islamic Banking.

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

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

Change in Government's attitude towards Islamic banking.

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

Reviewing this SWOT analysis from time to time would help evaluate the bank's position. It

would help the management in comparing their strengths of the past with those of the present and

to what extent the management has been able to overcome the weaknesses.



CHAPTER 10

CONCLUSIONS

One of the most important aims of the student life is to express him / her correctly and

adequately. This was believed in my mind when I first decided to go to Islamic Meezan Bank

Limited to complete my internship program.

The organization has been not growing both in size and profit for past few years and

but repute in the market is good. The employee turnover is very high which they have to cut

down as they are losing a number of good trained employees due to its poor policy. The year

2008 is expected to offer increased competition in the secured assets business as more Islamic

banks are in the market. With their focused strategy and product development initiatives planned


for the year, Meezan Bank is strongly positioned to meet these challenges. The bank has very

well repute in the market. Overall bank is going well and doing a good business but there are few

problems for that I have tried to give few recommendations that might help company to improve.

So finally this internship program has helped me a lot in gaining practical knowledge of job that

will help me in the practical life once I complete my BBA.

CHAPTER 11

RECOMMENDATIONS

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

suggestions:

11.1 PERFORMANCE APPRAISAL:

In the case of performance appraisal, management should evaluate the performance of the

employees on merit and recommend their increments and promotions only on the basis of real

performance. Employees should be treated unbiased and appraisal should be performance based


not favoritism and likeness based. This not only appreciates the employee but also improves his

work and satisfaction, his practice will surely encourage and motivate the employees for

improving their individual performances, which will lead towards overall improve in the

situation.

11.2 PROPER JOB ROTATION:

Employees should be rotated after certain periods in order to enhance their capabilities and make

them able to compete in the changing environment of the market. In this way, they will feel

interested during working in different departments. The best way to improve employee’s

performance is to revolve them within organization often a specified period of time. They will

not only have leaning and training opportunities butt also they feel attractiveness in doing new

job and his performance improves.

11.3 FAIR BENEFITS:

Although most of the employees are unsatisfied but even then turnover rate is low. This is due to

the reason that some of them are on contractual bases so that they cannot avail market offered

opportunities. On the other side they may not be getting better opportunities. Although the return

is low for them yet it is reasonable, that’s why they are still hero. They should be awarded with

more benefits to improve their performance and overall productivity, as satisfaction of internal

customers leads towards satisfaction of external employees.

11.4 OVER LOAD OF WORK:

The problem, which I have noticed faced by the employees in absence of an employee, can be

removed by hiring two employees in each department. In absence of any of the employee other

will be able to do whole work and employee from other department have not to interfere in this

department This will decrease over load of work.


Problem of shortage of employees can also be removed by adopting the above- mentioned

recommendation.

11.5 CREDIBILITY OF CUSTMERS:

Cheques, which are drawn on Meezan Bank branch and returned unpaid in clearing, are not

reflected in the statement of account of the customers. These cheques must be reflected in the

accounts so that credibility of the customers may be assessed.

11.6 CUSTOMER RELATIONSHIP:

Knowing the customers and their needs is the key to business success. By attitude the manager

can improve the relationship with the customers. By having the understanding, what a customer

wants, the manager can improve the relationship with the customers.

Meezan Bank should understand that the commitment to satisfy customer’s needs must be

fulfilled within a professional and ethical framework. They should observe a culture of high

ethical standards, based upon development of right attitude.

Although Meezan Bank has been improving its corporate behavior, even then they should

continue their effort for better corporate behavior. There is a need of improving customer

relations in Meezan Bank. For attitude improvement special courses should be arranged under

specialized teachers, through lectures, seminars and other interactive techniques. It will cost the

bank but will be more profitable for the bank in the long run.

11.7 EMPOWERMENT OF EMPLOYEES:

Commitment is a function of empowerment down the line, therefore, the future of Meezan Bank

lies in the fact that they should remain committed and necessary empowerment should flow

regularly to lower levels of hierarchy, so that the performance delivery is made more flexible.

With the empowerment of lower level employees they will feel secure in the organization and

they will work with devotion for the betterment of the organization.

11.8 MARKETING CULTURE:


The employees should be given special training for marketing. Proper action should be taken for

marketing so that the increased sale of different products will result in increase of the profit of

the bank. The employees of the bank should be trained with the basic concepts of the marketing

under the guidance of the experts.

11.9 HEALTHY ACTIVITIES:

There is lack of healthy and entertainment activities like excursions on weekend, parties and

other important days, celebration in their tidy life. Such activities should be encouraged at once

in a month.

FINDINGS:-

Meezan Bank Limited provides so much facilities to their customers but some problems also

arise with these facilities.

1) Space of the bank is very limited.

2) Generator is available but its not working due to which the problem of light arise and due

to which the working of the bank stop and customer faced so much problems.

3) UPS is also available but it work hardly for 2 min’s.

4) Parking area is not available for both customers and employees.

5) Water problems.

SUGGESTION

1) There should be a proper waiting room for customers.

2) As it is an Online Banking System if there is no light everything is shutdown so they

should maintain their electric problem.

3) There should be proper parking system for employees and customer.

4) As it is well know organization a minor problem like availability of drinking water

should not be there.


References:

• www.meezanbank.com

• vww.encarta.com

• http://wvvxv.historyworld.net

•MeezanBank

• Meezan Bank Annual Report 2009


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Documents

Final Report on Meezan Bank