Internship Report of Meezan Bank Limited 2016

Meezan Bank Limited Alamdar road Branch Quetta

Submitted To: (BM) Alamdar Road Quetta

Submitted By: Sajida

D/O: Jan Muhammad

Roll No: P (10)

Institute of management science university of Baluchistan

Qualification: Master of Public Administration

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Contests Title pages

1. Preface

Acknowledgement

Executive Summary ………………………………………………………………… 1

2. Evolution of Banking

Early Growth ………………………………………………………………………..… 2

3. Development of Modern Banking

Banking in Pakistan …………………………………………………………………..3

4. Introduction to Meezan Bank Limited ………………………………………..4

5. The Vision & Mission ………………………………………………………………..9

6. competitors of Meezan Bank Limited …………………………………………10

7. Branch Network ………………………………………………………………………10

8. Board of Directors ……………………………………………………………………11

9. Organizational structure …………………………………………………………..12

10. PMYBL SCHEME ……………………………………………………………..13

11. Accounts ……………………………………………………………………….17

12. Cash Department …………………………………………………………..18

13. Operations ……………………………………………………………………22

14. SWOT Analysis ……………………………………………………………….24

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15. Recommendations …………………………………………………………25

Preface:Internship is an integral part of MPA programme. For the sake of internship the most initial thing is to have a practical experience. This effort may get a student to get a practical experience if right organization is selected. During the internship a student comes to particle knowledge. We learn what we have studied so far. As an MPA student I have also done my internship at Meezan Bank Limited main branch Alamdar Road Quetta. Here I come to know a different and very interesting experience of learning and working with staff of Meezan Bank Limited (MBL).

Acknowledgement:I am grateful to almighty Allah the most Gracious and the most merciful for enabling me to accomplish this task successfully. I feel much obliged to my parents whose prayers and good wishes have enabled me to reach this stage. I am thankful to my teachers for his help, advice and guidance during studies. I would also like to say thanks to the Manager, staff and management of Meezan Bank Limited for their cooperation and help. I am also thankful to all other people who contributed their time & efforts in this regard.

Executive Summary:This is the detailed report about Meezan Bank Limited where I did my internship for eight weeks from joining date 28 December 2015 till 29 February 2016. Meezan Bank Limited a publically listed company is the first and largest Islamic Bank in Pakistan and one of the fastest growing banks in the history of the banking sector of the Country. It commenced operations in 2002 when State Bank of Pakistan issued first-ever license for Islamic commercial banking. The Bank offers wide range of Shariah-compliant banking products and services to its customers both retail and business. Besides traditional banking channels, the Bank offers various Alternate Distribution Channels including Internet Banking, ATM Banking, Visa & MasterCard debit card, SMS Banking, SMS Alerts, Mobile Banking Application and Utility Bills Payment through ATM and Internet Banking. Having the largest branch network and product range Meezan Bank bears the critical responsibility of leading the way forward in establishing a stable and dynamic Islamic banking system replete with dynamic and cutting-edge products and services. Meezan Bank aims to fulfill its prime objective of providing customers accessibility and convenience within an atmosphere and culture of dedicated service and recognition of their needs.Meezan Bank has developed an extraordinary research and development capability by combining investment bankers, commercial bankers, Shariah scholars and legal experts to develop innovative, viable and competitive value propositions that not only meet the requirements of today’s complex financial world but do so with world-class service excellence which our customers demand all within the bounds of Shariah. In this report there is complete history of banking as well as bank Meezan Bank Limited.

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Evolution of Banking:

It has not so far been decided as to how the word ‘Bank’ originated. The explanation of this origin is attributed to the fact that the Jews in Lombardy transacted the business of money exchange on branches in the market place and when the business failed the people destroyed the Bank. Incidentally the word ‘bankrupt’ is said to have been evolved from this practice. The opponents of this opinion argue that it was so then how is that the Italian moneychangers were never called ‘Banchierei’ in the Middle Ages?

Other authorities hold the opinion that the word ‘Bank’ is derived from the German word back which means joined stock fund. Then ‘Back’ was Italianize into ‘Bank’

Early Growth:

Banking in fact is as primitive as human society for ever since man came to realize the importance of money as a medium of exchange. Perhaps it was the Babylonians who developed banking system as early as 2000 B.C. It is evident that the Temples of Babylon were used as ‘Banks’ because of the prevalent respect and confidence in the clergy.

King Hamurabi (1728 – 1686 B.C) the founder of the Babylonian empire drew up accede wherein he laid down standard rules of procedure for banking operations by temples and great landlords. He got his code inscribed on the block of diorite about 8 feet tall containing about 150 paragraphs which deals with nearly all aspects of loans, interest, pledges, guarantees, natural accidents, loss, theft etc. Later on Sumerians, Babylonians, Hittites and Assyrians standardized the values of the goods in silver, copper and bronze.

In 1401 a German public bank was framed comprising the operations of discounting and transferring of money. By the 16th century some more public banks were

Formed in Venice, Milan, Amsterdam, Hamburg and Nuremburg. In order to streamline Banking organizations and techniques conferences were held in Nuremburg from 1548 to 1551 and it was agreed that the commercial interest of the time needed a bank with facilities of growth and transfer but it should not be a bank run by private individuals. Ultimately in 1587 a State Bank under the name of banco DI rialto was formed in Genoa. Later the bank of Amsterdam was also formed in 1609. This Bank had a guarantee by the State and rendered valuable services to the Netherlands trader’s up to the year 1795.

Similarly in 1690 the Bank of Hamburg came into existence in Hamburg with the business of accepting deposits of fine silver or of foreign money and to run accounts on these deposits. This Bank rendered great service to the merchants as well as countries it dealt with until 1873 when it

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was merged with the Reich bank. By the year 1700 the bank of England was not only issuing notes but also conducting accounts for customers. Its directors were conducting the business like that of limited companies. The bank had the monopoly of issuing banking notes. Up to 1813 or there about in England the main profit of bank was derived from the circulation of notes.

Development of Modern Banking:

In 1918 came into being eleven clearing banks of today. The effect of this historical development of banking in England has been fairly wide. First emergence of a small number of large banks with wide network of branches. Second increase in the popularity of bank accounts and a large-scale use of cheques.

In 1946 the labor government nationalized the bank of England and transferred the existing stock to the nominee of British treasury. In 1955 the British Banks made a departure from traditional banking by undertaking hire-purchase finance for companies buying industrial plants and machinery and took interest on hire-purchase finance.

Banking in Pakistan:

At the time of independence there were 631 offices of scheduled banks in Pakistan of which 487 were located in West Pakistan alone.  As a new country without resources it was very difficult for Pakistan to run its own banking system immediately. Therefore the expert committee recommended that the Reserve Bank of India should continue to function in Pakistan until 30th September 1948 so that problems of time and demand liability coinage currencies exchange etc. are settled between India and Pakistan.  The non-Muslims started transferring their funds and accounts to India.  By the end of June 1948 the number of officers of scheduled banks in Pakistan declined from 631 to 225.  There were 19 foreign banks with the status of small branch offices that were engaged solely in export of crop from Pakistan, while there were only two Pakistani institutions Habib Bank of Pakistan and the Australasia Bank. The customers of the bank are not satisfied with the uncertain condition of banking. Similarly the Reserve Bank of India was not in the favor of Govt. of Pakistan. The Govt. of Pakistan decided to establish a full-fledge central bank. Consequently the Governor-general of Pakistan Quaid-E-Azam inaugurated the State Bank of Pakistan on July 1, 1948. Thus a landmark was made in the history of banking when the state bank of Pakistan assumed full control of banking and currency in Pakistan.

The banking structure in Pakistan comprises of the following types.

1)     State Bank of Pakistan.

2)     Commercial Bank of Pakistan.

3)     Saving banks.

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4)     Co-operative banks

5)     Specialized credit institutions.

Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all over the country and in some foreign countries through a network of branches.   All these commercial banks were nationalized in January 1, 1974, and were recognized and merged into the following five banks:

1)     National Bank of Pakistan

2)     Muslim commercial bank limited

3)     Habib Bank Limited

4)     United Bank Limited

5)     Allied Bank of Pakistan

The state bank of Pakistan is the Central bank of the country and was established on July 1, 1948.   The separation of East Pakistan and its repercussion in the form of economic depression has caused a lot of difficulties to the banking system in Pakistan.  The network of bank branches now covers a very large segment of national economy.  The numbers of branches have increased appreciably and there is now on branch of bank for every 3000 heads of population approximately.  There is done reasonable growth in deposits from the establishment of Pakistan.  Besides this growth specialized credit and financial institutions have also developed over the years.

The Government of Pakistan in the late 90’s introducing the need for the privatization of state owned banks and companies.  The private sector has accepted the challenge and most of the banks are privatized today. The State Bank of Pakistan issues the shares of these periodically.   Bank employees and other common peoples can also purchase these shares and earn profit.

Introduction to Meezan Bank Limited:1947The inception of Pakistan as the first Islamic Republic created in the name of Islam.1980CII presents report on the elimination of Interest genuinely considered to be the first major comprehensive work in the world undertaken on Islamic banking and finance.1985Commercial 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

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Procedure adopted by banks in 1985 was declared un-Islamic 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.1997Al-Meezan Investment Bank is established with a mandate to pursue Islamic Banking. Mr. Irfan Siddiqui appointed as first and founding Chief Executive Officer.1999The 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.2001The 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.2002Meezan 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.2003Meezan 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.2004The 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.2005Meezan Bank becomes the first customer of Islamic Insurance (Takaful) by signing the first Memorandum of Understanding MoU with Pak-Kuwait Takaful Company Limited (PKTCL). The signing of this MoU has ushered Pakistan into a new era of Islamic Insurance (Takaful).2006A number 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 its branch network to a total of 62 branches in 21 cities, clearly establishing itself as the largest Islamic Bank of the country. Meezan Bank, becomes the first Islamic bank to introduce 8 am to 8 pm banking at selected branches in Karachi.

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2007Meezan Bank's branch network reached the milestone number of 100 branches (including sub-branches) in 31 cities nationwide.Car Ijarah portfolio reached Rs. 4.1 billion and the Easy Home portfolio stood at Rs. 3.1 billion. The Bank introduced Istisna' financing to cater to the working capital needs of customers.Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of REDmoney Group, Malaysia.Deposit base of the Bank grew to over Rs. 54 billion and the Bank earned profit after tax of Rs. 963 million. Trade Financebusiness reached Rs. 70 billion.

2008Meezan Bank introduced Tijarah financing to allow customers to raise funds for financing of stocks of finished goods.Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of REDmoney Group, Malaysia and 'Best Islamic Financial Institution in Pakistan' by Global Finance Magazine, New York. Branch network grew to 166 branches (including sub-branches) in 40 cities nationwide. Deposit base grew to Rs. 70 billion and the total financing portfolio amounted to Rs. 39 billion.20092009 was a watershed year for Meezan Bank. The branch network reached 201 branches (including sub-branches) in 54 cities nationwide; deposit base crossed Rs. 100 billion; profit/return earned on financing and investment activities exceeded Rs. 10 billion and the Bank handled more than Rs. 100 billion of import/export business. Being a socially responsible bank, Meezan Bank launched Meezan Labbaik, a Hajj and Umrah product - the primary objective being the desire to facilitate Muslims in performing their holy duty. Meezan Visa Debit Card was also launched during the year which is accepted at over 30 million outlets worldwide and allows customers to withdraw funds from their account from more than 1.4 million ATMs worldwide and can also be used for shopping, dining, traveling, fuel and cash needs.Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of REDmoney Group, Malaysia; 'Best Islamic Financial Institution in Pakistan' by Global Finance Magazine, New York; 'Best Islamic Bank in Pakistan' for 2009 by ASIA MONEY Magazine, Hong Kong and 'Islamic Bank of the Year' for 2009 by CFA Association of Pakistan. Corporate assets, including corporate Sukuk stood at over Rs. 40 billion. Corporate highlights of 2009 included Tijarah financing with PSO, Istisna financing with PARCO and Murabaha financing with Punjab Food Department. The Bank started implementing its new core banking application - T-24. T-24 is a core banking software which includes banking best practices based on Temenos' implementations in over 600 financial institutions and 120 countries across Retail, Corporate, Private Wealth, Islamic and Micro finance and Community Banking sectors.2010Meezan Bank developed a number of new deposit products to cater to the unique needs of different market segments.Among the products launched during this year were Meezan Business Plus, a Mudaraba-based account that offers an array of free services for businesses, Meezan Euro Savings Account and Meezan Pound Savings Account. Meezan Bank's Car Ijarah completed its 9th year and stood at Rs. 4.2 billion with over 8,000 active

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vehicles. Meezan Bank stood among the top three auto-finance providers in the country. Al Meezan Investment Management launched Meezan Sovereign Fund - an open-end fund; the eighth fund under its management, including two closed-end funds, five open-end funds and one voluntary pension scheme. The Bank developed a financing product based on the concept of 'Wakalah', to encourage the development of financing partnerships between Islamic banks and Microfinance banks. During the year, 38 Islamic banking awareness seminars were held in 23 cities across Pakistan and were attended by more than 4,400 participants representing customers, general public and professionals. Meezan Bank was awarded 'Best Islamic Bank in Pakistan' by Islamic Finance News of REDmoney Group, Malaysia and 'Best Islamic Financial Institution in Pakistan' by Global Finance Magazine, New York. Meezan Bank's branch network reached 222 branches in 63 cities across Pakistan and it became the 11th largest bank in Pakistan in terms of branch network. The Bank demonstrated robust business growth in 2010, closing the year with a deposit figure of Rs. 131 billion and Import/Export business of Rs. 143 billion.2011The inauguration of the new Head office in Karachi symbolizes Meezan Bank's established position amongst the leading banks and the largest Islamic Bank in Pakistan. During the year, 53 branches were opened to reach a landmark of 275 branches in 83 cities across Pakistan. Meezan Bank was awarded the ‘Best Islamic Bank in Pakistan for 2011’ by Islamic Finance News of REDmoney Group, Malaysia.The bank expanded its portfolio of consumer financing products with the launch of Meezan Laptop Ease in first quarter of 2011 which is the first of its kind in Pakistan.The Bank added another “First” in Pakistan’s Islamic Banking Industry by becoming the Advisor and Lead Arranger for the first ever short-term Sukuk for Kot Addu Power Company Limited.During the year 27 Islamic Banking Seminars and over 110 Customer Appreciation Days (115) were held to educate customers and the general public and Islamic banking.2012Meezan Bank reached 10 years of Riba-free banking with 310 branches in 90 cities. The Bank launched Visa Platinum Debit Card for its customers. The Bank also started Premium Banking Services and opened Premium Banking Centers throughout the country. Another important achievement was the launch of Meezan Kids and Teens Club Account for the children and teenagers who want to save money for their future. 2013 Meezan Bank became the 8th largest bank in Pakistan in terms of branch network with 350 branches in 100 cities. Total deposits of the Bank reached Rs. 280 billion. The Government of Pakistan nominated Mr. Irfan Siddiqui, the President of Meezan Bank and Dr. Imran Usmani, Shariah Advisor of Meezan Bank as members of Steering Committee for the Promotion of Islamic Banking. The Bank also made an agreement with Ethical Finance Limited for establishing first Islamic commercial bank in Republic of Mauritius.

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2014Meezan Bank reached a branch network of 428 branches in 117 cities. The Bank acquired Pakistan operations of HSBC.Total deposits reached Rs. 380 billion.Meezan Bank launched MasterCard Titanium debit card, Mobile Banking Application, Meezan Kafalah (Takaful), EBiz - Corporate Internet Banking and Meezan Roshni- Generator financing.

The 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.

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

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

Our Values:

Core Values:Shariah-compliance, Integrity, Professionalism, Innovation, Service, Excellence, Social Responsibility

Staff: Committed, motivated and professionally trained employees who are empathic to their customers’ needs.

Relationships: Our relationships are long-term. We recognize and value our customers’ needs above all and strive to ensure their fulfillment. All customers are treated with professionalism and in a friendly manner. It is our endeavour to ensure that they receive efficient and timely service. The Meezan Bank experience is a unique one.

Competitors:

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Despite notable economic uncertainties the financial strength of Meezan Bank Limited has greatly enhanced during the previous years. The successful expansion program proved their capability and commitment in comparison with the competition in the financial sector. The Banking structure in Pakistan comprises of:

Central Bank Commercial Banks Investment Banks Development finance Institutions (DFIs) Specialized Banks Foreign Banks

Meezan Bank Limited is a private commercial bank so the major competitors of Meezan Bank Limited is the following:

Muslim Commercial Bank Standard chartered Soneri Bank Ltd Prime Commercial bank The bank of Punjab Bank Al-Habib Ltd ABL Faysal Bank Ltd NIB Arif Habib Rupali Bank Ltd.

Branch Network:Alhamdulillah, with over 550 branches in over 140 cities across Pakistan, Meezan Bank is the largest Islamic Bank and the 7th largest Bank (in terms of Branch Network) in Pakistan. This is a milestone that is not only the success story of Meezan Bank but also the continuing success story of Islamic banking in Pakistan. With this extensive network, our existing and potential customers are now closer than ever in benefiting from Islamic Banking at their doorstep. All branches provide real-time online banking facilities to customers.

The list of Board of Directors of Meezan Bank Limited is as under:

Mr. Riyadh S.A.A. Edrees (Chairman) Mr. Faisal A.A.A. Al-Nassar Mr. Bader H.A.M.A. AlRabiah Mr. Rana Ahmed Humayun Mr. Alaa A. Al-Sarawi

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Syeda Azra Mujtaba Mr. Muhammad Zarrug Rajab Mr. Mohammad Abdul Aleem Mr. Noorur Rahman Abid Mr. Talal S.A. Al-Shehab Mr. Irfan Siddiqui (President & CEO) Mr. Ariful Islam (Deputy CEO)

Computerized Working Environment:

In bank all the work is done on computers. All the entries are made in computer. Balance is fed into the computer. This increases efficiency of the bank. All the branches are centrally controlled through LAN settings. It helps them to co-ordinate more easily for making efficient and fastest consumer services.

 

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Organizational structure:

 

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Islamic Agricultural Financing:Meezan Bank is considered as a trend setter in Islamic Banking in Pakistan mainly on account of offering wide range of Shariah-Compliant banking solutions to cater different needs of its customers. Following its track record, Meezan Bank is now offering Islamic Agricultural Financing Products to farmers.

PMYBL SCHEME:

Under this scheme, financing will be available to the youth of Pakistan under the four major categories, along with the eligibility criteria:

1. Small Entrepreneur:Unemployed youth, especially educated ones who are looking for establishing or extending Shariah-compliant business in their personal capacity through establishment of enterprise. 2. Micro Enterprise:Individuals who have successfully completed 3-4 cycles with Akhuwat and want to graduate from their current business size.

3. Agriculture (Tractor Ijarah): Young farmers who require Tractor financing.

4. Car Ijarah:Vehicles like Bolan & Ravi will be financed for the purpose of Taxi, Delivery Vans and similar activities etc.

Type of Accounts:Meezan Bank offers the largest range of Riba-free Deposit Accounts for Personal Banking

1. Local Currency Accounts: Rupee Current Account - A Convenient, Secure and Stable Deposit Account Rupee Savings Account - Ensuring Truly Halal Savings with Comprehensive Returns Meezan Bachat Account - The convenience of a Saving Account with Halal Profit Labbaik Saving Aasaan - A specialized Saving Account designed to save for Umrah & Hajj Business Plus Account - Serving you the perfect blend of convenience and flexibility Meezan Kids Club Account - Specialized saving account for kids under the age of 12 years Meezan Teens Account - Mudarabah based saving account specifically for teens Meezan Asaan Current Account - A Convenient, Secure and Stable Deposit Account Meezan Asaan Savings Account - Ensuring Truly Halal Savings with Comprehensive Returns

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2. Foreign Currency Accounts: Dollar Current Account - A Truly Halal Dollar Current Account Dollar Saving Account - A Truly Halal Dollar Saving Account Euro Current Account - A Truly Halal Euro Current Account Euro Saving Account - A Truly Halal Euro Saving Account Pound Current Account - A Truly Halal Pound Current Account Pound Saving Account - A Truly Halal Pound Saving Account

Procedure of opening Account:

The procedure of opening the account is as given under for account Mis Maria Raza proved so helpful to me to learn that opening of an account and its all procedure which is as under: For opening of an account there are different types of account holders are required for all these types. The operation/procedure requirement that is needed for “Individual Account” differs greatly from the “Joint Accounts” proprietorship A/C, Partnership A/C, Private Limited Company A/C and Public Limited Company A/C.

Individual’s Account:

When a single man or woman opens an account in his or her own name and has the right to operate it is called individual A/C.

Documentation:

Copy of National Identity Card. Proof of Income Proper Identification (Introduction).

Operations:

The person place in the type of account and type of operation required in the account opening form.

He/she fills in part 1 of the form a fix his/her either two of four similar signature ( or thumb expression in the signature space ) and get it introduced and signed by a person who already has an account with the bank and write his account number in the specific rows in a specific space.

The person fills his or her father, mother, husband/wife or any other relative’s name his/her address, phone number, his or her sign to certify this requirement. This requirement is needed because in his/her absence bank can have correspondence with a specific person.

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The person deposits the initial amount for opening account onto the cash counter. The person put his signature on form on two places in “authorized Signature” and fills in the “Title of Account” space by writing his name.

If the person put his signature in Urdu or any other language other than English he signed a “Vernacular Form”.

If the person has changed its signature then he must have to sign the “signature change undertaking”.

The next step is entering in computer because the centralized account opening structure and generation of account number.

1. Account Opening Form:

First of all the customer fills the account opening form (AOF). Filling of account opening form includes type of account, currency of account, name, and address, signature of customer and signature of introducer and attach a photocopy of national identity card. He also signs an undertaking that he will follow the rules and regulations of the bank.

2. Introduction:

The signature and account number of the account holder introducing the account to the new person is obtained on the account opening form.

3. Specimen Signature Card:

The signature of the client is obtained on a specimen signature card (S.S Card). The card is obtained with two signatures from the customer. Every time a cheque is received for payment from the client the signature on the cheque is verified by comparing it with S.S Card.

4. Requisition slip:

A requisition slip for Cheque book is also given to the customer. The customer fills it and gives it to the account opening Officer.

5.    Know Your Customer Form:

Every account holder fills this form. The basic purpose of this form is to get some basic information about the customer’s business and source of incomes.

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6. Account Number:

When all the formalities are completed an account number is allotted to the customer and all the information is entered into the computer and register. Then that account number is written on S.S Card and account opening form.

7. Depositing of amount in account:

The client deposit cash in the account. For this purpose cash pay-in-slip is used. The minimum initial deposit is fixed for each account according to the nature of account. For example for PLS / saving account the minimum requirement is Rs.100 only.

8. Issuance of a Cheques Book:

After opening an account with the bank the account holder makes a request in the name of the bank for the issuance of a Cheque book. Such a request is known as Requisition Slip. BAL issues Cheque books from 10 leaves to 50 leaves. When he used this book completely then he can apply for another known as subsequent Cheque Book. This process takes a day because the Cheque books come from the Karachi head office.

9. Entry of Cheques Book:

Before issuance of a Cheque book the bank stamp every leaf with the account number of the customer enter it in the cheque book register and computer and issues the cheque book to the customer after his signature on the register.

10. Letter of Thanks:

A letter of thanks is prepared. One letter is for the customer and one for the introducer. One copy is send to the customer and the other copy is kept in the record along with other documents.

Amendments/Changes in Accounts:

BAL provides the facility of amendments in accounts, whenever required by the customers. Account holder gives an application along with necessary documents to the bank. Then the amendments are made in the account of the depositor. These amendments can be made by filling certain application forms. These forms are as follows:

1. Change of Address Form:

To change the address of the account holder

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2. Change of signature form:

To change the signatures of the customer.

3. Liability / Inquiry Form:

This form is used if some person has acquired loan from the bank and he wants to close his current account then he fills this form and this form is send to credit department. When the credit department declares him free from any debt obligations then his account is closed.

4. Mandate To The Third Party To Operate The Account:

This form is used to enable any third party to operate the account.

Closing of Accounts:

The procedure of closing of account is as follows.

1. First of all the customer gives the request to close the account.2. His signatures are verified.3. He withdraws all his money from his account but in case of current account Rs. 150 is deducted

as a charge of closing the account.4. A liability form is send to the credit department if he has taken a loan from the bank. If he is

cleared from all the liabilities then further proceeds are taken.5. Permission is granted by the authorized person (the manager).6. Account is closed in the computer system.7. His specimen signature card is attached with the account opening form and marked closed.

Meezan Bank limited Issues the Following Cheque book Denominations:

10 leaves 25 leaves 50 leaves 100 leaves

Cash Department:

Mis Madia and Mr. basit Hassan helped me in learning about Cash Department. Cash Department performs two main functions and other subsidiary functions:

Cash Deposits Cash Payments

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Online Cash Receipts & Payments

Cash Deposits:

Cash receiving officer receives cash along with pay-in slip from the customer. He/ She checks if the deposit slip is properly filled up containing title of account, account number, date and amount in word and figures. He also verifies signature. Detail on both counter file and cash receipt voucher should be the same. Cash is received by the cash receiving officer, twice counted and matched with the deposit slip. The cash details are written on the back of the deposit slip and are also entered in cash receiving register. Cash received stamp is affixed on the face of the deposit slip along with the signature of the cash receiving officer.

Deposit slip and cash receiving register is given to the officer in cash department. Again proper scrutiny is made by the officer cash department both on cash receipt and cash receiving register. Officer cash department signs both the deposit slip and register; Deposit slip is credited and posted in the concerned account in the system.

Payment of Cheques:

The process for payment of cheques for local and foreign currency is same. First the customer presents the Cheque or holder to branch and the particulars of cheques are properly filled in. Signature of the holder is taken on the back of the cheques. Cheque handed over to the officer cash department for scrutiny where officer checks the date, amount in words and amount in figures, payee’s name crossing if any, account number, cheque serial number any material alterations, endorsements and signature of the customer. Account is debited and then the officer cancels cheque. It is posted in the system and posting stamp and number is affixed on it. Cheque is handed over to the cash payment officer for payment. One more signature on the back of the cheque is taken from the holder to match with the first one, and then cash is paid to the payee. Cash detail is written on the back of the cheque. Cash paid stamp is affixed on the face of the cheque. Entry is passed in the cash payment register.

If the payment is of Rs. 50000 the cashier can make it on its own. If the amount is greater than Rs. 50000 the cashier and cash deposit Incharge will verify the check and will sing it. Then the payment will be made. Otherwise the payment will not be made.

Clearing Department:

In clearing Mis Kubra Hussain proved so helpful. The clearing process majority involves receiving the cheques and making payments. This process can be inward or outward.

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Clearing Process (Inward/Outward)

Here the local Cheques are received that are drawn on BAF. All the cheques are received on one counter along with the paying slips duly filled in properly containing particulars of cheques and account harder. Counter folio of paying slip is handed over to the customer by putting stamp for #cheque received for collection for Meezan Bank Limited on it duly signed by officer. These Cheques are scrutinized and cheques for local clearing are separated from OBC. These are then entered in clearing register and cheques for collection are entered in OBC register and handed over the Bills Department for collection.

Clearing officer checks and verifies title of all the cheques deposited by the customers to confirm the good title of the cheques. Cheques are scrutinized properly and paying slips are separated from cheques. Special crossing, endorsement and clearing stamps are affixed on the cheques. Cheques of each bank are sorted and arranged branch wise. All the cheques are then entered into the clearing system of the bank. Print out of the clearing is taken and details are attached with the cheques of each bank. Details of these banks are then entered into the clearing schedule containing number of cheques presented and their total amount against the name of each bank. Then total number of cheques presented to all banks and their total amount is written on the foot of that schedule which is tallied with the clearing register.

Next morning these cheques are delivered to the respective banks through NIFT in clearing house of State Bank of Pakistan between 9:00 to 9:30AM. In the same manner other banks present their clearing drawn on Meezan Bank limited.Total number of cheques and their amount delivered to other banks and received from them are written on the Clearing House schedule branch for their payment. After proper scrutiny of cheques verification of signatures and confirmation of balance in the account the Officer Cash Department pays these cheques by canceling and posting them in the system.

If any cheque is not passed due to insufficient balance or any other reason Officer clearing Department returns the same cheque by attaching a cheque return memo containing reason for return. This cheque is entered into the cheque returned register and bank charges are deducted according to the schedule of charges.

Second clearing is called at 2:30PM to check the fate of the cheques presented to other banks in the morning. If any cheque is to return that is delivered to the same bank in second clearing. In the same manner if any cheque presented by Meezan Bank Limited in first clearing is returned they receive it and once again give schedule of clearing figure to the Officer Clearing House SBP containing number of cheques and their amount delivered and received unpaid.

Remittances Department:

The need of remittances is commonly felt in today’s business. The main function of remittance department in a bank is the transfer of funds.

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Mr.Muhammad Aqeel operation manager in Meezan Bank Limited is the officer for Remittances Department. In remittances following banking instruments are used:

Pay order Demand draft Online transfer Call deposit receipts Traveling cheque

The procedure for dealing with all these under local as well as foreign currency in MBL is as under.

Pay Order:

A pay order is a written order issued by a bank drawn upon & payable by itself to pay a specified sum of money to or to the order of a specified person.

Procedure for Pay Order:

Application form is given to the customer to fill. Two signatures are taken on the form one for request and other for receiving the instrument. All the particulars of application form are checked and bank commission charges and withholding tax is written on the top of the application form. If the customer is maintaining his account with the branch, he can give cheque for total amount of instrument plus bank charges. Cheque and application from is then given to the officer Cash Department for the payment of cheque. After proper scrutiny Officer Cash Department posts the cheque and signs the application form in token of payment received. If the customer wants to pay cash then cash is deposited by the customer along with the bank charges and withholding tax.

Application form is then given to the Remittances In charge for issuance of instrument. He enters all the particulars of the application form in the system and computer gives an Auto Control Number to the instrument. Printout is taken on the block of payment Order. Two authorized officers of the branch then sign it. Instrument is then protecting graphed and given to the customer.

Demand Draft:

A Demand Draft (DD) is an instrument, which is drawn by one bank upon another bank for a specific sum of money payable on demand. It is made by the bank, given to the purchaser against cash or cheque.

Parties Involved In DD:

  Purchaser

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  Issuing Branch

  Drawee Branch

   Payee

Procedure for Issuing DD:

Issuance procedure of Demand Draft is same as of pay Order.

Procedure for Demand Draft Payable:

When DD advice is received, signatures of both signatory on the DD are verified. All the particulars of the DD payable are entered in the system. Prints out of vouchers (DD payable) are taken. When instrument is presented for payment, signatures of the attorneys are verified on DD and after proper scrutiny; it is posted in the system and canceled by the Remittances In charge.

Online Transfer:

Sometimes when the remittance is urgently required by the remitter online Transfer is made.

Collection:

All the cheques under collection are called cheques under Collection in Meezan Bank Limited. There are two types of bills for collection:

Outward Bills for Collection Inward Bills for collection

Accounts Department:

Most important department of bank as it is concerned with:

1. Revenue2. Expenses3. Assets4. Liabilities

Daily Customer Movement List:

All the changes that are made in accounts of customer are shown in the daily customer movement list. By using this list people of Accounts Department can prepare the vouchers.

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Following activities are performed by Account Department:

Voucher preparation Preparation of daily, weekly, monthly, and annual statement. Budgeting and fixed assets Employer’s benefit Expenditure approval.

SWOT Analysis:

Strengths:

Bank has a belief in customer service Customer give suggestion for the improvement of bank and these suggestions are listened

carefully. Manager Mr. Muhammad Mehdi Fida has a good coordination with staff members. Environment is friendly. Products are excellent Expansion is consistent Modernized banking (online + Internet) Fully computerized each department has to own PC.

Weaknesses:

New Setup Staff is lesser.

Opportunities:

Information Technology. Establishing Foreign Branches Local Setup Expand

Threats:

Competition by the settled bank like MCB and others There is a possibility that in future the customers are too many to be handled by the so small

number of the employees. Governmental policies may pose unpleasant role Global issues like America Iran war and terrorism

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Recommendations

Finally there are some suggestions for Meezan Bank Limited. These suggestions are based on experience with the bank.

This is a routine practice that in order to give personalized services to the customer bank staff tries to fill all the columns of AOF with their own handwriting which is wrong. AOF must be filled in by the customers. Bankers should avoid filling in the AOF because it can create problem if the address, title of account or any other information provided by the customer has not been written properly. Customer may be affected or he may claim that this information was not provided by him, but if AOF is filled by the customer then banker cannot be held responsible for any incorrect information provided by the customer.

Marketing Practices Adopted By Bank

Nowadays marketing of products is of prime importance for any organization. In this dynamic environment every organization has its own Marketing Department which is responsible for creating the demand of its goods and services.

Nowadays banks also have their marketing departments which are responsible for creating demand of their products i.e. their deposit schemes and increasing the deposit of the bank.

Meezan Bank Limited has its own full marketing Department at the Head Office Karachi. This department prepares different deposit schemes for its customers time to time in order to increase the business of the bank. At branch level the Operations Department follows marketing practices. At each branch of bank officers are available to provide marketing activities of their products.

They make customer calls and personally visit the potential customer to convince them to invest. They make phone calls to customers and inform them about their schemes, profit rates.

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