Maryam Intern Report

8/4/2019 Maryam Intern Report

1/39

Meezan Bank Limited

WHAT IS ISLAMIC BANKING?

Islamic banking has been defined as banking in consonance with the culture and value

system of Islam and governed, in addition to the conventional good governance and risk

management rules, by the principles laid down by Islamic Shariah. Interest free banking,the more general term is expected not only to avoid interest-based transactions, prohibited

in the Islamic Shariah, but also to avoid unethical practices and participate actively in

achieving the goals and objectives of an Islamic economy. The prohibition of a risk free

return and permission of trading, as enshrined in the Verse 2:275 of the Holy Quran, makes

the financial activities in an Islamic set-up real asset-backed with ability to cause value

addition.

BRIEF HISTORYOF ISLAMIC BANKING

1947

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

1980

CII presents report on the elimination of Interest genuinely considered to be the first major

comprehensive work in the world undertaken on Islamic banking and finance.

1985

Commercial banks transformed their nomenclature stating all Rupee Saving Accounts as

interest-free. However, foreign currency deposits in Pakistan and foreign loans continued as

before.

1991

Procedure adopted by banks in 1985 was declared 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.

1997

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

Irfan Siddiqui appointed as first and founding Chief Executive Officer.

1999

The Shariat Appellate Bench of the Supreme Court of Pakistan rejects the appeals and

directs all laws on interest banking to cease. The government sets up a high level

7


2/39

Meezan Bank Limited

commission, task forces and committees to institute and promote Islamic banking on

parallel basis with conventional system.

2001

The Shariah Supervisory Board is established at Al-Meezan Investment Bank which is 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.

2002

Meezan Bank acquires the Pakistan operations of Societe Generale and concurrently Al

Meezan Investment Bank converts itself into a full fledged Islamic commercial bank. The

first Islamic banking license

is issued to the Bank and it is renamed Meezan Bank. President General Pervaiz Musharraf

inaugurates the new Islamic Commercial Bank at a formal ceremony in Karachi.

2003

Meezan Bank establishes itself as the pioneer of Islamic Banking in Pakistan and quickly

establishes branches in all major cities of the country. A wide range of products are

developed and launched consolidating the Banks position as the premier Islamic Bank of

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

arm of Meezan Bank, introduces Meezan Islamic Fund (MIF), the countrys first open-end

Islamic Mutual Fund.

2004

The State Bank establishes a dedicated Islamic Banking Department (IBD) by merging the

Islamic Economics Division of the Research Department with the Islamic Banking Division

of the Banking Policy Department. A Shariah Board has been appointed to regulate and

approve guidelines for the emerging Islamic Banking industry. The Government of Pakistan

awards the mandate for debut of international Sukuk (Bond) offering for USD 500 million.

The offering is a success and establishes a benchmark for Pakistan. Meezan Bank acts as

the Shariah Structuring Advisor for this historic transaction.

2005

Meezan Bank becomes the first customer of Islamic Insurance (Takaful) by signing the first

8
http://www.meezanbank.com/AjaxFunction.aspx?id=368&width=250http://www.meezanbank.com/AjaxFunction.aspx?id=368&width=250


3/39

Meezan Bank Limited

Memorandum of Understanding MoU with Pak-Kuwait Takaful Company Limited

(PKTCL). The signing of this MoU has ushered Pakistan into a new era of Islamic

Insurance (Takaful).

2006

A numbers of new dedicated Islamic Banks, namely Bank Islami and Dubai Islamic Bank,

commence operations in Pakistan. Meezan continues its leadership position in the industry

by more than doubling it branch network to a total of 62 branches in 21 cities, clearly

establishing itself as the largest Islamic Bank of the country. Meezan Bank becomes the

first Islamic bank to introduce 8 am to 8 pm banking at selected branches in Karachi.

2007

Meezan Bank opens up its 100th branch. Two new dedicated Islamic Banks start operations

in Pakistan, namely Emirates Global Islamic Bank and Dawood Islamic Bank.

2008

With 166 Branches (including 35 sub-branches) in 40 cities across Pakistan, Meezan Bank

is clearly positioned as the leading Islamic Bank in the country. Work starts on the

construction of Meezan Banks new Head Office building. The financing and investment

portfolio of local Islamic banks reached Rs. 185 billion in December 2008 compared to Rs.

137.6 billion in December 2007. Market share in the overall banking increased to five per

cent at end December 2008 compared with four per cent at end December 2007. Total

assets of Islamic banking reached Rs. 271.1 billion in December 2008 compared to Rs.

205.2 billion in December 2007.

9


4/39

Meezan Bank Limited

HISTORYOF MEEZAN BANKLIMITED

Meezan Bank Limited, a publicly listed company, was incorporated on January 27, 1997

and started operations as an investment bank in August that year. In January, 2002 in an

historic initiative, Meezan Bank was granted the nations first full-fledged commercial

banking license as a dedicated Islamic Bank, by the State Bank of Pakistan.

Meezan Bank has clearly established itself as the largest Islamic Bank in Pakistan

with the largest branch network in all major cities of the country. The banking sector is

showing a significant paradigm shift away from traditional means of business, and is

catering to an increasingly astute and demanding financial consumer who is also becoming

keenly aware of Islamic Banking.

During the seven years of its operation as an Islamic commercial bank (from 2002

to 2009), offering universal banking services to customers, Meezan Bank has been one of

the fastest growing banks in the history of the banking sector. Average growth in deposits

has been 55% per annum during this period while the branch networkgrew from 4 to 166.

SHAREHOLDING STRUCTURE

The Banks main shareholders are leading financial institutions of the Region

namely, Noor Financial Investment Company, Kuwait, a leading investment company

based in Kuwait; Pak-Kuwait Investment Company, a AAA rated financial entity in the

country and theIslamic Development Bank of Jeddah. The established position, reputation,

strength and stability, of these institutions add significant value to the Bank through Board

representation and applied synergies.

10
http://www.meezanbank.com/pages.aspx?iPageId=33http://www.meezanbank.com/pages.aspx?iPageId=33http://www.noorinvestment.com/En/Default.aspxhttp://www.noorinvestment.com/En/Default.aspxhttp://www.pkic.com/http://www.meezanbank.com/pages.aspx?iPageId=33http://www.meezanbank.com/pages.aspx?iPageId=33http://www.noorinvestment.com/En/Default.aspxhttp://www.pkic.com/


5/39

Meezan Bank Limited

SHARIAH SUPERVISORY BOARD

The embers of the Shariah Board of Meezan Bank are internationally renowned

scholars serving on the Boards of many Islamic banks operating in different countries.

The members of the Shariah Board are:1. Justice (Retd.) Muhammad Taqi Usmani (Chairman)

2. Dr. Abdul Sattar Abu Ghuddah

3. Sheikh Essam M. Ishaq

4. Dr. Muhammad Imran Usmani

Justice (Retd.) Muhammad Taqi Usmani is a renowned figure in the field of

Shariah, particularly Islamic Finance. He holds the position of Deputy Chairman at the

Islamic Fiqh Academy, Jeddah and Chairman of the Accounting and Auditing Organization

for Islamic Financial Institutions. He is the Deputy President of Jamia Darul-Uloom,

Karachi. He is also a member of Shariah advisory boards of a number of financial

institutions practicing Islamic Banking and Finance including Abu Dhabi Islamic Bank,

Dubai Bank, European Islamic Investment Bank and Dow Jones Islamic Index. He has been

teaching various subjects on Islam for 39 years. He also served as a Judge in the Shariat

Appellate Bench, Supreme Court of Pakistan. Justice (Retd.) Muhammad Taqi Usmani

holds an LLB from Karachi University. He completed his M.A. in Islamic Studies from

Punjab University in 1970. Prior to that, he completed Alimiyyah & Takhassus course i.e.

the specialization course of Islamic Fiqh and Fatwa (Islamic Jurisprudence) from Jamia

Darul-Uloom, Karachi. He is also editor-inchief of monthly Al-Balagh magazine and the

author of more than 100 books in different subjects of Islam, particularly on Tafseer,

Hadith, Fiqh and Islamic Finance.

Dr. Abdul Sattar Abu Ghuddah holds positions of Shariah Advisor and Director,

Department of Financial Instruments at Al-Baraka Investment Co. of Saudi Arabia. He

holds a Ph. D in Islamic Law from Al Azhar University Cairo, Egypt. He is an active

member of Islamic Financial Institutions. Dr. Abdul Sattar teaches Fiqh, Islamic Studies

and Arabic in Riyadh and has done a valuable task of researching and compiling

information for the Fiqh Encyclopedia in the Ministry of Awqaf and Islamic Affairs in

Kuwait. He was member of the Fatwa Board in the Ministry from 1982 to 1990.

11


6/39

Meezan Bank Limited

Sheikh Essam M. Ishaq graduated in Political Science from McGill University,

Montreal, Canada. Currently he is teaching Fiqh and Aqeeda courses in UAE and Bahrain

at Umm Al-DarDa Islamic Centre. He holds the position of Shariah Advisor at Discover

Islam, Bahrain. He also serves as an advisor/ member of Shariah Boards in a number of

Islamic banks and Islamic financial institutions.

Muhammad Imran Usmani, son of Justice (Retd.) Muhammad Taqi Usmani is a

LLB, M. Phil, and Ph. D. in Islamic Finance and graduated as a scholar in Alimiyyah &

Takhassus specialization courses in Islamic Fiqh and Fatwa from Jamia Darul-Uloom,

Karachi. From the inception of Meezan Bank he is the in-house Shariah Advisor and Head

of Product Development and Shariah Compliance department of the Bank, where he

supervises training for different courses, Audit & Compliance; R&D Advisory Services for

Shariah based banking. Dr. Usmani has been serving as lecturer/teacher of different

subjects of Shariah and is administrator of several divisions of Jamia Darul-Uloom, Karachi

since 1990. He has also been leading Friday Khudhbah and prayer in the Jamia Mosque for

18 years.

Dr. Usmani serves also as an advisor/ member of Shariah Boards of the State Bank

of Pakistan, HSBC Amanah Finance, Guidance Financial Group USA, Lloyds TSB Bank

UK, Japan Bank for International Cooperation (JABIC), Credit Suisse Switzerland, ABN

Amro Global, Future Growth AlBarakah Equity Fund South Africa, Capitas Group USA,

Bank of London and Middle East Kuwait, DCD group Dubai and other Mutual & Property

Funds and international Sukuk. He is also an advisor of International Islamic Financial

Markets (IIFM) Bahrain and International Center of Islamic Economics and Finance

(INCIEF) Malaysia. Dr. Usmani is the author of many books related with Islamic Finance

and other subject of Shariah. He has been presenting papers in many national and

international seminars and has delivered lectures in various academic institutions such as

Harvard, LSE, IBA, LUMS and others.

12


7/39

Meezan Bank Limited

MANAGEMENT TEAM

Irfan Siddiqui President & Chief Executive Officer

Ariful Islam Chief Operating Officer

Najmul Hassan General Manager Corporate & BusinessDevelopment

Muhammad Shoaib

Qureshi

General Manager Commercial Banking

Shabbir Hamza Khandwala Chief Financial Officer & Company Secretary

Dr. Muhammad Imran

Usmani

Shariah Advisor

Abdul Ghaffar Memon Regional Manager - South

Rizwan Ata Regional Manager - Central

Saleem Khan Regional Manager - North

Arshad Majeed Head of Operations

Mohammad Haris Head of Corporate & Structured Finance

Mohammad Sohail Khan Head of Human Resources and Administration

Ms. Mehnaz Ikram Head of Legal Affairs

Faiz-ur-Rehman Head of Information Technology

Munawar Rizvi Head of Branch Expansion & Business Promotion

Zafar Ali Khan Head of Consumer Assets and Marketing

Muhammad

Abdullah Ahmed

Head of Treasury & Financial Institutions

13


8/39

Meezan Bank Limited

Saleem Wafai Head of Compliance

Zia ul Hasan Head of Internal Audit

Muhammad Raza Head of Liability Products & Service Quality

Ahmed Ali Siddiqui Manager Product Development & ShariahCompliance

Azeem Iqbal Pirani Manager Alternate Distribution

MEEZAN'S BRANCH NETWORKMeezan Bank has established 204 branches in 40 cities across Pakistan. This is a

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

story of Islamic Banking in Pakistan. With this extensive network, all existing and potential

customers are now closer than ever in attaining Islamic Banking at their doorstep. All

branches provide real time online banking facilities to customers.

One of the key objectives of the Bank is to have its footprint strategically placed

throughout the country enabling the public to avail the benefits of Shariah Compliant

Banking in their neighborhood. The Bank is currently segmented into three Regions of

Pakistan.

The cities in which the Bank presently operates are as follows:

Southern Region Central Region Northern Region

Hub (Lasbela) Bahawalpur Abbottabad

Hyderabad Daska Dera Ismail Khan

Karachi Dera Ghazi Khan Gujar Khan

Nawabshah Faisalabad Haripur

Quetta Gojra Islamabad

Sakrand Gujranwala Kohat

Sukkur Jhang Mansehra

14
http://www.meezanbank.com/branches.aspx?city=Hub%20(Lasbela)http://www.meezanbank.com/branches.aspx?city=Bahawalpurhttp://www.meezanbank.com/branches.aspx?city=Abbottabadhttp://www.meezanbank.com/branches.aspx?city=Hyderabadhttp://www.meezanbank.com/branches.aspx?city=Daskahttp://www.meezanbank.com/branches.aspx?city=Dera%20Ismail%20Khanhttp://www.meezanbank.com/branches.aspx?city=Karachihttp://www.meezanbank.com/branches.aspx?city=D.G%20Khanhttp://www.meezanbank.com/branches.aspx?city=Gujar%20Khanhttp://www.meezanbank.com/branches.aspx?city=Nawabshahhttp://www.meezanbank.com/branches.aspx?city=Faisalabadhttp://www.meezanbank.com/branches.aspx?city=Haripurhttp://www.meezanbank.com/branches.aspx?city=Quettahttp://www.meezanbank.com/branches.aspx?city=Gojrahttp://www.meezanbank.com/branches.aspx?city=Islamabadhttp://www.meezanbank.com/branches.aspx?city=Sakrandhttp://www.meezanbank.com/branches.aspx?city=Gujranwalahttp://www.meezanbank.com/branches.aspx?city=Kohathttp://www.meezanbank.com/branches.aspx?city=Sukkurhttp://www.meezanbank.com/branches.aspx?city=Jhanghttp://www.meezanbank.com/branches.aspx?city=Mansehrahttp://www.meezanbank.com/branches.aspx?city=Hub%20(Lasbela)http://www.meezanbank.com/branches.aspx?city=Bahawalpurhttp://www.meezanbank.com/branches.aspx?city=Abbottabadhttp://www.meezanbank.com/branches.aspx?city=Hyderabadhttp://www.meezanbank.com/branches.aspx?city=Daskahttp://www.meezanbank.com/branches.aspx?city=Dera%20Ismail%20Khanhttp://www.meezanbank.com/branches.aspx?city=Karachihttp://www.meezanbank.com/branches.aspx?city=D.G%20Khanhttp://www.meezanbank.com/branches.aspx?city=Gujar%20Khanhttp://www.meezanbank.com/branches.aspx?city=Nawabshahhttp://www.meezanbank.com/branches.aspx?city=Faisalabadhttp://www.meezanbank.com/branches.aspx?city=Haripurhttp://www.meezanbank.com/branches.aspx?city=Quettahttp://www.meezanbank.com/branches.aspx?city=Gojrahttp://www.meezanbank.com/branches.aspx?city=Islamabadhttp://www.meezanbank.com/branches.aspx?city=Sakrandhttp://www.meezanbank.com/branches.aspx?city=Gujranwalahttp://www.meezanbank.com/branches.aspx?city=Kohathttp://www.meezanbank.com/branches.aspx?city=Sukkurhttp://www.meezanbank.com/branches.aspx?city=Jhanghttp://www.meezanbank.com/branches.aspx?city=Mansehra


9/39

Meezan Bank Limited

Tando Adam Kasur Mardan

Tando-Allah-Yar Lahore Muzaffarabad

Mandi Bahauddin Peshawar

Mian Channu Rawalpindi

Multan Swat

Okara

Rahim Yar Khan

Sadiqabad

Sahiwal

Sargodha

Sheikhupura

Sialkot

DIFFERENCE BETWEEN ISLAMICAND CONVENTIONAL BANKING

Sr.

No.CONVENTIONAL BANKING ISLAMIC BANKING

1. Money is a commodity besides

medium of exchange and store of

value. Therefore, it can be sold at a

price higher than its face value and itcan also be rented out.

Money is not a commodity though it is

used as a medium of exchange and store

of value. Therefore, it cannot be sold at a

price higher than its face value or rentedout.

2. Time value is the basis for charginginterest on capital.

Profit on trade of goods or charging onproviding service is the basis for earning

profit.

3. Interest is charged even in case the

organization suffers losses by using

banks funds. Therefore, it is notbased on profit and loss sharing.

Islamic bank operates on the basis of

profit and loss sharing. In case, the

business man has suffered losses, thebank will share these losses based on the

mode of finance used either Mudarabah

or Musharakah.

4. While disbursing cash finance,running finance or working capital

finance, no agreement for exchange ofgoods & services is made.

The execution of agreements for theexchange of goods & services is a must,

while disbursing under Murabaha, &Istisna contracts.

5. Conventional banks use money as acommodity which leads to inflation.

Islamic banking tends to create link withreal sectors of the economic system by

using trade related activities. Since, the

money is linked with the real assets

15
http://www.meezanbank.com/branches.aspx?city=Tando%20Adam%20(Sanghar)http://www.meezanbank.com/branches.aspx?city=Kasurhttp://www.meezanbank.com/branches.aspx?city=Mardanhttp://www.meezanbank.com/branches.aspx?city=Tando%20Allahyarhttp://www.meezanbank.com/branches.aspx?city=Lahorehttp://www.meezanbank.com/branches.aspx?city=Muzaffarabadhttp://www.meezanbank.com/branches.aspx?city=Mandi%20Bahauddinhttp://www.meezanbank.com/branches.aspx?city=Peshawarhttp://www.meezanbank.com/branches.aspx?city=Mian%20Channuhttp://www.meezanbank.com/branches.aspx?city=Rawalpindihttp://www.meezanbank.com/branches.aspx?city=Multanhttp://www.meezanbank.com/branches.aspx?city=Swathttp://www.meezanbank.com/branches.aspx?city=Okarahttp://www.meezanbank.com/branches.aspx?city=Rahim%20Yar%20Khanhttp://www.meezanbank.com/branches.aspx?city=Sadiqabadhttp://www.meezanbank.com/branches.aspx?city=Sahiwalhttp://www.meezanbank.com/branches.aspx?city=Sargodhahttp://www.meezanbank.com/branches.aspx?city=Sheikhupurahttp://www.meezanbank.com/branches.aspx?city=Sialkothttp://www.meezanbank.com/branches.aspx?city=Tando%20Adam%20(Sanghar)http://www.meezanbank.com/branches.aspx?city=Kasurhttp://www.meezanbank.com/branches.aspx?city=Mardanhttp://www.meezanbank.com/branches.aspx?city=Tando%20Allahyarhttp://www.meezanbank.com/branches.aspx?city=Lahorehttp://www.meezanbank.com/branches.aspx?city=Muzaffarabadhttp://www.meezanbank.com/branches.aspx?city=Mandi%20Bahauddinhttp://www.meezanbank.com/branches.aspx?city=Peshawarhttp://www.meezanbank.com/branches.aspx?city=Mian%20Channuhttp://www.meezanbank.com/branches.aspx?city=Rawalpindihttp://www.meezanbank.com/branches.aspx?city=Multanhttp://www.meezanbank.com/branches.aspx?city=Swathttp://www.meezanbank.com/branches.aspx?city=Okarahttp://www.meezanbank.com/branches.aspx?city=Rahim%20Yar%20Khanhttp://www.meezanbank.com/branches.aspx?city=Sadiqabadhttp://www.meezanbank.com/branches.aspx?city=Sahiwalhttp://www.meezanbank.com/branches.aspx?city=Sargodhahttp://www.meezanbank.com/branches.aspx?city=Sheikhupurahttp://www.meezanbank.com/branches.aspx?city=Sialkot


10/39

Meezan Bank Limited

therefore; it contributes directly in the

economic development.

WHAT I LEARNT AND DID?

During my internship in Meezan Bank Limited I worked in the following 2 departments, for

3weeks in each department.

> Trade Finance Department

> Corporate Department

As this is an Islamic bank therefore my focus was to study the comparison between a

conventional and Islamic bank in each of the department.

1. TRADE FINANCE DEPARTMENT:

This department deals with foreign trade i.e. import and export by way of letter of credit.

There are two main transactions:

1) import

2) Export

Import:

Letter of credit

Contract

Advance payment

Export:

Export negotiation

Collection

Advance payment

I worked in both sections. My basic learning in this is as following:

IMPORT:

This department provides the facility to their customers to import machinery or

products from other countries, or within the same country. It is necessary for the importers

to have the licenses, which is issued by the chief controller of imports and exports. Before

obtaining an import license the license must be registered with the chief controller of import

and export. For having the license, an individual or firm submits the application through

16


11/39

Meezan Bank Limited

his bank. For imports the bank is required to have a contract with the customer and than to

open the Letter of Credit.

Documents Required:

1. CNIC (Computerized National Identity Card)2. NTN (National Tax Number)3. Sales Tax Registration

4. Registration with Lahore Chamber of Commerce and Industry

5. Limit for credit has to be assigned by the corporate department

6. In case of firm or company, the Memorandum and the Article of Association

Contract:

In this the bank has no liability. Its purpose is that the beneficiary (seller) will get the

payment through his bank. The bank doesnt take the responsibility of the goods.

Letter of Credit (LC):

It is a written undertaking by a bank (issuing bank) given to the seller (beneficiary)

at the request and on the instructions of the buyer (applicant) to pay at sight or at a

determinable future date, up to a stated sum of money.

Parties Involved In a Letter of Credit:

There are four parties involved in a letter of credit:-

Importer

Issuing party or Importers Bank

Exporter

Paying or negotiating bank

Account party or Importer:

The buyer or the importer on whose account and request the letter of credit is

opened is known as account party.

Issuing party:

The bank, which issues or opens a letter of credit at the request of importer, it is

called the issuing bank.

17


12/39

Meezan Bank Limited

Exporter:

The seller or the party in whose favour the letter of credit is draw is the third party

and it is also known as the beneficiary.

Paying or negotiating bank:

The paying bank in the exporters country on which the draft is drawn is called the

paying bank. It is also known as the advising bank.

How a Letter of Credit is issued:-

The process of issuing a letter of credit is briefly explained below:

> The buyer and the seller conclude a sales contract providing for payment by

letter of credit.

> The buyer instructs his bank the issuing bank to issue credit in favour of

the seller (beneficiary).

> The advising or confirming bank informs the seller that the credit has been

issued.

> The issuing bank asks another bank, usually in the country of the seller to

advise or confirm the credit.

Reasons for Letter of Credit:

1) The exporters are uncertain of the importer capacity to pay.

2) The importers are unwilling to pay the amount unless the goods are actually

shipped and the documents received by the bank.

3) In case of non-payment the seller should be assured to legal rights in foreign

country.

4) There should be an agency, which should meet the sellers need of finance when

the goods are shipped.

5) The importers can undertake the obligation to pay to the exporter for the purchase

made by the importer and this is usually done through a letter of credit.

Documentation in Letter of Credit:-

Documents are the most important part of international trade. Without them trade

cannot be completed. Documents are of five types:-

18


13/39

Meezan Bank Limited

Commercial Documents:

Commercial documents consist of following forms:

Invoice form

Certificate of origin

Weight note

Packing list

Quality or insurance certificate

Documents of title

Transport Documents:

These documents are related with transfer of goods. These documents consist of

following forms:

Airway bill

Bill of lading

Rail consignment note

Roadway bill

2. Insurance Documents:

These documents consists of the following forms:

Letter of insurance

Insurance policy

3. Financial Documents:

Bill of exchange

Cheque

Delivery against acceptance

Delivery against payment

Promissory note

Types of Letter of Credit:-

The type of letter of credit are explained below:-

1.Merchandise, Commercial and Trade: The majority of LCs issued are in

payment for goods in shipment or current services performed. Payment is normally

made against documents for goods shipped.

19


14/39

Meezan Bank Limited

2. Standby: This type of LC functions like a guarantee. This type of credit can only be

drawn against a credit agreement. It is a definite undertaking of the issuing bank.

3. Revocable: A revocable letter of credit may be amended or cancelled by the issuing

bank at any moment and without prior notice to the beneficiary.4. Unconfirmed: Bears only the guarantee of the issuing bank. The beneficiary should

look to the credit worthiness of only the issuing bank, and not to any intermediary.

5. Confirmed: Is a credit in which a second guarantee is added to the letter of credit

by another bank.

6. Sight: Payment is at sight, which means that the drafts and documents are honored,

if in order, by making payment without delay.

7.Time, Usuance: The draft honored by accepting it for payment at a future date.Payment is delayed at a future date. Payment is delayed until the maturity of the

draft.

8. Revolving Credit: One where the amount is renewed or reinstated without specific

amendment to the credit being needed. It can revolve in relation to time or value.

9. Red Clause Credit: Authorizes the advising or confirming bank to make advances

to the beneficiary before presentation of the documents.

10.Transferable Credit: Can be transferred by the original beneficiary to one or

more other parties. It is normally used when the first beneficiary does not supply the

merchandise himself, but is a middleman and wants to transfer all or part of his

rights to the actual supplier.

11.Back-to-Back Credit: The seller as beneficiary of the first credit offers it as

security to the advising bank for issuance of a second credit.

Islamic Way of Opening Letter of Credit:

Musharakah can be used for Import Financing as well. There are two types of bank

charges on the letter of credit provided to the importer:

1. Service charges for opening an LC.

2. Interest charged on LC, which are not opened on full margin.

Collecting service charges for this purpose is allowed, but as interest cannot be

charged in any case, experts have proposed two methods for financing LC:

20


15/39

Meezan Bank Limited

Based on Musharakah / Mudarabah

Based on Murabahah

Musharakah / Mudarabah:

This is the best substitute for opening the LC. The bank and the importer can make an

agreement of Mudarabah or Musharakah before opening the LC.

If the LC is being opened at zero margin then an agreement of Mudarabah can be

made, in which the bank will become Rab-ul-Maal and the importer Mudarib. The bank

will own the goods that are being imported and the profit will be distributed according to

the agreement.

If the LC is being opened with a margin then a Musharakah agreement can be made.

The bank will pay the remaining amount and the goods that are being imported will be

owned by both of them according to their share of investment.

The bank and the importer, with their mutual consent can also include a condition in

the agreement, whereby; Musharakah or Mudarabah will end after a certain time period

even if the goods are not sold. In such a case, the importer will purchase the bank's share at

the market price.

Murabahah:

At present Islamic banks are using Murabahah, to finance LC. This product is also

being used in Meezan bank. The banks themselves import the required goods and then sell

these goods to the importer on Murabahah agreement.

Murabahah financing requires the bank and the importer to sign at least two

agreements separately; one for the purchase of the goods, and the other for appointing the

importer as the agent of the bank (agency agreement). Once these two agreements are

signed, the importer can negotiate and finalize all terms and conditions with the exporter on

behalf of the bank.

EXPORT:

Usually the exporter does not rely on the credit of a banker in the country of importer,

and insist on a confirmation from a banker carrying on business in his own country. Thus

this department of a bank helps the exporters to settle down their financial affairs. For

exporting it is necessary for exporter to get export license from the chief controller of

import and export after registration.

21


16/39

Meezan Bank Limited

Documents are required for the registration such as N. I. C. Card, income tax

certificate, registration with Lahore Chamber of Commerce and Industry, and bank

certificate which shows that the exporter is his account holder and have a good dealing with

them.

In response to the letter of credit exporter submit the following documents to the

negotiating bank.

Bill of exchange

Invoice

Bill of lading or Airway bill

Insurance documents

Packing list

Any other documents, if so required.

The negotiating bank will send the same documents to the issuing bank. In accordance

with the terms and condition laid down in letter of credit.

A bank plays two very important roles in Exports. It acts as a negotiating bank and

charges a fee for this purpose, which is allowed in Shariah. Secondly it provides export-

financing facility to the exporters and charge interest on this service.

These services are of two types:

1. Pre shipment financing

2. Post shipment financing

Interest cannot be charged in any case.

Pre Shipment Financing:

Pre shipment financing needs can be fulfilled by two methods.

1. Musharakah / Mudarabah

2. Murabahah

Musharakah / Mudarabah:The most appropriate method for financing exports is Musharakah or Mudarabah. Bank

and exporter can make an agreement of Mudarabah provided that the exporter is not

investing; other wise Musharakah agreement can be made. Agreement in such case will be

easy, as cost and expected profit is known.

22


17/39

Meezan Bank Limited

The exporter will manufacture or purchase goods and the profit obtained by

exporting it will be distributed between them according to the predefined ratio.

A problem that can be encountered by the bank is that if the exporter is not able to

deliver the goods according to the terms and conditions of the importer, then the importer

can refuse to accept the goods, and in this case exporter's bank will ultimately suffer. This

problem can be rectified by including a condition in Mudarabah or Musharakah agreement

that, if exporter violates the terms and conditions of import agreement then the Bank will

not be responsible for any loss which arises due to this negligence. This condition is

allowed in Shariah as the Rab-ul-mal is not responsible for any loss that arises due to the

negligence of Mudarib.

Post Shipment Financing:

Post shipment finance is similar to the discounting of the bill of exchange. Its alternate

Shariah compliant procedure is discussed below:

The exporter with the bill of exchange can appoint the bank as his agent to collect

receivable on his behalf. The bank can charge a fee for this service and can provide interest

free loan to the exporter, which is equal to the amount of the bill, and the exporter will give

his consent to the bank that it can keep the amount received from the bill as a payment of

the loan.

Here two processes are separated, and thus two agreements will be made:-

1. One will authorize the bank to collect the loan on his behalf as an agent, for which

he will charge a particular fee.

2. The second agreement will provide interest free loan to the exporter, and authorize

the bank for keeping the amount received through bill as a payment for loan.

These agreements are correct and allowed according to Shariah because collecting fee

for service and giving interest free loan is permissible.

PRACTICAL WORK:-

During my internship in trade finance department I was given the following tasks to

do:

Export and Import Forms:

In export section I was given the task of making E-forms, that is export forms. These

forms are issued by the head office of the respective bank and it is than issued to the

23


18/39

Meezan Bank Limited

exporter by the bank. The customer fills it according to his requirements. An e-form

contains 4 copies, the original copy is kept with the custom office, duplicate copy is kept

with the bank and is filed in the LC, triplicate copy is submitted to the State Bank of

Pakistan and the forth copy is kept with the customer.

I n the imports section the task of preparing I-forms i.e. import form, was given to me.

These forms are used to report the detail information about the total amount of export

and import taking place in the respective branch of the bank. These are submitted to the

SBP for keeping all the records. These forms play an important role in helping SBP to make

the balance of payment sheet of Pakistan.

Lodgment in FDBC / LBDC:

In this all the documents provided by the exporter are verified according to the E-form.

These documents are than lodged in the foreign documentary bill of collection (FBDC) and

in the Local documentary bill of collection (LBDC). This lodgment is done with the current

date.

Cover Letter:-

I learnt how to make a cover letter in the Letter of Credit in the export section. After

the lodgment in FDBC/ LBDC the bank makes the covering letter and attaches it with the

LC. It is a small description of all documents attached with the LC.

Posting on ITRS:

It is software known as International Transactions and Recording System issued by the

SBP. It is used to report the foreign exchange returns to the SBP at the end of the FY. All

the entries of total export taken place through the bank are made at the end of each month.

After posting on ITRC I filled form-M for each currency. The form-M is used to report all

foreign transactions total amount at the end of the month. The posting on ITRS is based on

the SBP Return Manual given below.

Study of SBP Return Manual:

SCHEDULE REPORTING

S-1:

A1/O1Form E reporting when full paymentrealized

24


19/39

Meezan Bank Limited

A2/02Advanced payment reporting / partial

payment of E-form.

A3/03 NIL

E2/P2 Form I reporting

E3/P3Withdrawal from foreign current account

(FCA)E4/P4 Form-M (foreign account currency FAC)

J-O-3 Other than export remittance received

S-6:

Schedule C Cash received from authorized data

E3/P3 Withdrawal from FCA (cash)

Schedule G Cash send to authorized dealer

J-O-3 Deposit in FCA

Schedule W NIL

A2/02 NIL

Form EE-1:

I also added data in the particulars of export receipts in respect of eligible commodities

under part II of the Export finance Scheme for the monitoring period from 1sty July, 2008

to 30th June 2009. This information is reported to the SBP at the end of the FY. The main

entries of this form are: Export form number, Name of consignee, Commodity, Contract

L/C under which shipment is made, Shipment date, Amount in foreign exchange, Amount

in PKR, Date of realization, Item no., Schedule and Reporting month.

2. CORPORATE DEPARTMENT:-

After completing 3 weeks in trade finance department I was moved to corporate

department for the next 3 weeks. In this the main function is to provide facility to the

people who need advance money to meet their requirements, give them short term and long

term loans and create profit for the bank. It also creates limits for opening letter of credit.

Corporate department deals with the grant of loan to the customers. Credit department, car

ijara and house financing are included in this department. To work in this department the

person must be very intelligent and careful to judge the right man to be sanctioned a rightamount of loan. Credit further deals with 3 different categories:

1. SME: (1 to 75 million limit)

2. Consumer: (75 to 150 million limit)

3. Corporate: (above 150 million limit)

25


20/39

Meezan Bank Limited

I studied and learnt about SME and corporate functioning. Detail of what I studied and

understood during my internship is given as under.

Small and Medium Enterprises:

SME is an entity which does not employ more than 250 persons (if it is

manufacturing/service concern) and 50 persons (if it is trading concern). The growth in the

SME sector in Pakistan in recent years has been a major contributor to the growth in the

national economy. Meezan Bank is committed towards developing tailored financial

solutions and expanding its footprint in the SME sector.

SME has to fulfill the following criteria of either a & c or b & c:-

a) A trading/service concern with total assets at cost excluding land and building up o

Rs. 50million.

b) A manufacturing concern with total assets at cost excluding land and building up o

Rs.100 million

c) Any concern (trading, service or manufacturing) with net sales not exceeding Rs.

300 million as per latest financial statements.

An individual if he/she meets the above criteria can also be categorized as an SME.

SME for all the financial institutions make up the limit up to 100 million excluding leased

assets and 150 million including leased assets.

This branch of Meezan bank had a wide range of customers that lie in SME sector offinancing; a few of them are given below:

> Master Book Center

> Millennium & Pioneer Chemicals

> Master Book Depot

> Karachi Chemicals

> Java Chemical

> Waqar Plastic

> & others.

Prudential Regulations for SME Financing:-

1. Medium and Long Term Facilities : it means the facilities with maturities of more

than 1 year.

2. Sort Term Facilities: the facilities with maturities up to 1 year.

26


21/39

Meezan Bank Limited

3. Liquid Assets : are the assets which are readily convertible into cash without

recourse to a court of law.

Corporate:-

A customer is considered as a member of corporate if any his annual sales turnover

is of Rs. 800 million or more, funded and non funded lines of over Rs. 150 million

and he has a successful business trade record for a minimum period of 3 years,

backed by audited financials.

At present, Corporate Banking has a large number of multinational and local clients

representing various sectors of the economy. Client relationships are handled by dedicated

Relationship Managers and fully supported by the Branch staff to provide high quality

service at competitive and market driven pricing. This branch of Meezan bank had a wide

range of customers who lie in the corporate sector, a few of them are:

> Javed International

> Malik Enterprise

> Fawad Textiles

> Qazi & Company

> US Denim Mills

> US Apparel & Textiles

> Stylers International

> & others.

How to Advance Loan or Provide Facility:-

This can be explained by dividing the whole procedure into 3 steps:

1) Information required by the bank

2) Preparation of credit proposals

3) Sanction advice

These are explained below:-

Information Required by the Bank:

27


22/39

Meezan Bank Limited

Following information is required from the customer:

Nature & structure of borrower business.

Names of proprietors, partners or directors.

Detail of all firms or companies associated with borrower.

Financial condition of borrower business.

An assessment of his business abilities.

Accurate and up to date financial statements of last two years for

comparison purposes.

A report from credit standing bureau of State Bank of Pakistan.

Documents Required for Financing:

The necessary documentation needed by the bank to be filed in the

bank record for financing any customer is as following:-

Request Letter:

It is a request for facility by the customer. The amount of fund

needed is given on the request letter.

Balance sheet and Projected balance sheet:

This is the financial report about the customers business in full

detail. The cash flow statement, profit and loss account and schedule

of fixed assets sheet is also attached with it.

List of buyers and sellers :

This includes a list of all the intimate buyers and sellers of the

customer, so that to know about his business circle.

D & B Report:

This is required only for the new customers in order to get detail

information about their business especially their income level.

Special companies are registered to make these reports.

Borrowers Basic Fact Sheet (BBFS):

It is a form made on the prescribed format of SBP. The bank issues

this form to the customer, which is to be filled by him. It contains all

the information about his business and partners.

28


23/39

Meezan Bank Limited

CIB Report (credit information bureau):

It tells all the details about the customers history in credit and his

performance with other banks, or if he has any outstanding amount

with other banks and how much loan has been taken from other

banks.

Credit Risk Rating Sheet:

It tells about all the risks lying in the business. It is prepared by the

bank. In this sheet the customers will be rated on the basis of their

risk profile against different parameters by using a score card that

will reflect the risk grade of the customer. Risk rating of a customer

is always reviewed whenever new information is received.

Customer Visit Report:

This is a very important document in financing. It is prepared by the

bank employee. He personally visits customers company and checks

all the details.

Branch Evaluation Report of Property:

This is to verify the property of the customer by some authentic

source. Many organizations are working for this purpose, the bank

ask any of these to work on its behalf.

Facility Advising Letter:

After the approval of the proposal of facility raised by the customer

from the head office of Meezan bank, now the bank will send a

facility advising letter to the customer to inform him.

Preparation of Credit Proposal:

At first a formal application for credit approval is obtained from the party along with

complete group position. The partys credibility report is obtained from the bank with

which the bank is doing its business.

For obtaining credit, party has to submit the last two years Balance Sheet and Profit &

Loss statement duly attested by authorized auditors. If the party is also involved in export or

import business then the bank also considers the data of three years about import & export.

29


24/39

Meezan Bank Limited

Current debt and equity ratio is also calculated by the bank. The type of data required to

prepare the credit proposal is to be gathered from the different departments. Some data is

obtained from the foreign Exchange department. Some data is available in Advance

Department. The purpose of obtaining Credit should be explained clearly. The securities

offered by the party to the bank are also evaluated. In case of pledging of property in shape

of land or building the complete evaluation of the property should also be attached.

After all the necessary documents for applying for advance is fulfilled by the party then

the case is sent to Manager for approval. If the credit limit is in his range then he can decide

over it otherwise the case is forwarded to seniors. If there is any discrepancy then the party

is informed of it.

Sanction Advice:

When the documents required are complete and there is no ambiguity then the party is

advised that their credit or loan is approved and will be available to you soon. There is a

separate form for every annual approval or in case of a new facility. The form contains

following information:

Nature and amount of limit

Purpose

Security/ Collateral

Margin

Validity

Bank charges

Other terms and conditions:-

1. The facilities granted are subject to SBPs prudential regulations.

2. The bank would undertake the inspection of stocks from time to time and in any

case at least once in the calendar year.

3. The bank shall have full authority to cancel the facilities allowed without

assigning any reason and to call for adjustment of the liabilities within the

period decided by the bank

4. Audited accounts should be submitted to the bank within six months of date

from the date of your financial year end.

30


25/39

Meezan Bank Limited

Study of Prudential Regulations:

State Bank of Pakistan has imposed prudential regulations on all the banks. These facilities

are being offered with the understanding that your companys financial condition will

comply with these regulations.

During my internship in this department I was given the task of studying some important

prudential regulation related to my task. These are given below:-

> According to the prudential regulation the bank can only accept the proposal of a

company up to 10times of its total equity value, not more than this. Out of which 4

times is the funded and 6times is the non-funded limit.

> After 3 calendar years the valuation of the property must be obtained.

> The audited balance sheet is necessary if the limit is till 10 million, but below 10

million an audited balance sheet can also be used.

Types of Security:-

There are following types of securities that are being used by Meezan bank. Loan

can be given against any one or more of them:-

1.Hypothecation over Stock: in this the bank has the charge over stock but the

physical possession and owner is the customer. But incase of late payment or any

other discrepancy the bank can take the charge anytime. This is enforceable by the

law.

2. Pledge: in this the physical possession of the stock is with the bank. The customer

can get it on payment when needed.

3. Equitable Mortgage: in this the memorandum of deposit of the title deed is

deposited to the bank, which shows that the bank has the ownership of the property.

4. Token Registered Mortgage: in this the mortgage deed is registered with the

relevant record i.e. either with Fard (patwaari) or PT-1 or mutation (transfer of

property from 1 person to another).

5. Personal Guarantee: it is as per prudential regulation. This is essential for every

customer to give his personal guarantee.

31


26/39

Meezan Bank Limited

6. Lien over Import Documents: in case of opening letter of credit the documents

will lie under the banks custody and will be given to the customer at the time of

payment.

Products of Islamic Financing in Meezan Bank:-

A few of themare discussed below:-

MUHRABA:

A short term facility in PKR only for purchasing raw materials and assets by bank

and its onward sale to the customer on cost plus profit basis, usually with deferred

payment. This facility also covers Muhraba for imported goods (for LC opened

under MMFA).

MUHRABA SPOT:

A Muhraba facility in PKR in which the subject matter is purchased and held by the

bank and is reflected in the inventory of the bank. The subject matter is than sold

by the bank to the customer against spot payment, as and when required by the

customer.

MUHRABA PLEDGE:

A Muhraba facility in PKR in which the subject matter is sold to the customer and

than after delivery the same goods are kept under a pledge arrangement as a

security.

MUHRABA (FIM) SPOT:

This is Muhraba financing of imported merchandise (FIM). It is a Muhraba facility

in PKR in which the subject matter, which is an imported good is kept under a

pledge arrangement before selling to the customer and the goods are reflected in

the inventory of the bank. The subject matter is than sold to the customer against

spot payment, as and when required by the customer.

ISTISNA-EXPORT:

A short term facility extended to exporters in which the bank orders the exporters

to manufacture goods and makes payment for manufacturing the goods as per the

specification of export order. The goods are delivered to the bank. After taking the

32


27/39

Meezan Bank Limited

delivery these goods are exported to the foreign buyer by exporter acting as banks

agent.

ISTISNA-LOCAL:

A short term facility extended to local manufacturer in which the bank orders the

exporters to manufacture goods and makes payment for manufacturing the goods

as per the specification of local order. The goods are delivered to the bank. After

taking the delivery these goods are sold to the local buyer by exporter acting as

banks agent.

MEEZAN TIJARAH-EXPORT:

A short term financing facility for meeting financing requirements of exporters in

which the bank purchases the finished/manufactured goods of the customer. The

goods are delivered to the bank. After taking the delivery these goods are than sold

and exported to the foreign buyer by exporter acting as banks agent.

MEEZAN TIJARAH-LOCAL:

A short term financing facility for meeting liquidity requirement of the customer in

which the bank purchases the finished/manufactured goods of the customer. The

goods are delivered to the bank. After taking the delivery these goods are than sold

and exported to the local buyer by exporter acting as banks agent.

MUHARABA-USD/FE-25, EXPORT & IMPORT:

A short term facility in USD only for purchasing raw materials and assets by bank

on advance/cash/credit/import basis and its onward sale to the customer on cost

plus profit basis usually with deferred payment. This facility is extended to

importer and exporter only, to facilitate trade business.

IJARAH-PLANT AND MACHINERY:

A medium to long term Islamic leasing facility for plant and machinery. The

subject matter of Ijarah may be purchased locally or imported by the customer as

an agent of the bank.

33


28/39

Meezan Bank Limited

PRACTICALWORK:-

In the corporate department I got an opportunity to learn and do very productive

work as explained above in detail. A short summary of what I did on my own is

mentioned below:-

I learnt how to make limit for financing any SME company.

I made proposal for the renewal of the limit (on work excel).

I made the projected balanced and actual balance sheet of a SME company.

I worked on the profit & loss account for the year ended on June 30, 2009 of a SME

company.

I also made the cash flow statement of a SME company.

I studied the detailed cases of 20 SME companies and 10 corporate companies, with

complete documents.

I prepared the risk rating sheet for 3 SME companies.

I was given an assignment to write 150 words on a question i.e. What points will you

consider while financing any SME customer?

34


29/39

Meezan Bank Limited

FINANCIAL ANALYSIS FORYEAR2009BALANCE SHEET:-

35


30/39

Meezan Bank Limited

STATEMENT OF CHANGES IN EQUITY:-

36


31/39

Meezan Bank Limited

PROFIT AND LOSS STATEMENT:-

37


32/39

Meezan Bank Limited

CASH FLOW STATEMENT:-

38


33/39

Meezan Bank Limited

SWOT ANALYSIS:

39


34/39

Meezan Bank Limited

Meezan Bank Limited is one of the fastest growing banks; its business is growing at a good

rate. In the light of situation we can make analysis by using following factors:

Strengths

Weakness

Opportunities

Threats

STRENGTHS:

1) Premier in Islamic banking.

2) Fastest growing rate.

3) MBL has strong financial position, as its owners are always willing to inject more

equity in it.

4) Bank has successfully launch new product with the passage of time.

5) Increasing number of branches in different areas due to its strong financial position

is also major strength.

6) Attractive & fully maintained branches.

7) Use of modern technology gives more efficient results.

8) Provide facilities to all types of customers like individuals, firms, companies,

associations etc.

9) Strong relationships with foreign business organization & financial institution.

WEAKNESSES:

Although MBL is a growing bank, yet it has some weaknesses like:

1) Lack of modern advertisement techniques.

2) Give its employees fewer benefits. It results in less efficient team of workers.

3) Give no job satisfaction so, many employees resigned.

4) Negative influence of management regarding favoritism.

5) Hiring of less talented employees & only on reference basis.

6) Burden or load of work on customer relationship department due to which they are

not mentally satisfied with job.

40


35/39

Meezan Bank Limited

STRESS & STRAINS:

No work can be carried out with, mild level of stress, therefore it is sometime more

helpful to create some stressful situation for getting more productivity on making people

more stress. As far as MBL is concerned there are few situations present at MBL, which are

as follow:

Excessive load of work.

Late sitting.

Time constraints & responsibilities.

OPPORTUNITIES:1) MBL can introduce new products to satisfy their new customers.

2) With approval of SBP, now more branches will be opened in every city of Pakistan

to provide riba free banking services to people.

THREATS:

1) More banks open their Islamic Branches in the country so great competition is there

for Meezan Bank Limited.

2) There is less growth for Meezan Bank at international level because of Muslim

image in the world.

3) Some employees are not satisfied with MBL policies, so more resignations are

there, which is a threat for MBL to some extent.

PROBLEMS FACEDBY MEEZAN BANK

41


36/39

Meezan Bank Limited

There are three major problems, which are being faced by Meezan bank Limited. These

include

1) The extensive competition, which is building up in the market. More are more

banks are jumping into Islamic Banking.

2) Another problem which is being faced by Meezan Bank is that it is going to

expand its branches extensively throughout Pakistan within these two years and

for this reason they need a competent staff and there is a lack in human resource

which is good in Islamic banking.

3) The third major problem which is faced by the employees of Meezan Bank is to

convince the people about the pure Islamic banking as people are not in a

position of accepting an Islamic bank and they are of the view that it the same as

conventional bank.

4) Time problem is very common for MBL employees. There is late sitting in the

branch. The employees are not happy for late sitting.

CONCLUSION

42


37/39

Meezan Bank Limited

This internship program gave the internee an exposure of the real banking environment

and its interaction with commercial sector. The valuable learning experience shows all

internal and external of not only about the role of banking but also almost all other sectors

of business or private enterprises. According to the findings it is concluded the people of

Meezan bank limited are using Customer Service and Automation as their marking weapon

in order to attract the customer. Therefore when you are providing service to your customer,

honor and attraction plays an important role.

As far as the question of Human Resource is concerned the MBLs environment is

based on democratic culture. This environment plays an important role to enhance the

productivity, capability and performance of the employees and creates an efficient, effective

and friendly environment of working.

In study of comparison between the Islamic banking of Meezan bank with other

conventional banks, it was found that though there is a sound difference between both, but

still some more steps are needed to make it completely pure and different from the

conventional banking.

Another important point that is to be noted that MBL is using limited selectivity

instead of coverage in case of promotional activities. They try to send their message within

the limits of the cities where they have there own branches.

RECOMMENDATIONS

43


38/39

Meezan Bank Limited

During my internship period with MBL I have learned a lot about banking system,

observed deeply the functioning of the branch. In the light of these observances, I have

following suggestions for the MBL. These recommendations base on many observations:

RIBA FREE COMMERCIAL BANKING to be set up in all countries of the world,

Muslims and non-Muslims. This will greatly facilitate international export import

trade without the fear of being involved in any Riba dealing.

The bank should do proper and effective advertisement, and enhance its public

image, goodwill and attract more customers towards Islamic banking by doing

efficient advertisement.

Increase consumer banking and offer more and more products in it.

Develop the healthy and sound competition between employees and bosses.

Meezan bank does not provide jobs security to the employees. Most are hired on

contractual bases on the start. More people must be employed on permanent bases,

providing job security and satisfaction.

There is no separate department for the training of new employees. There should be

establishment of a separate department for training of new employees and

competent teaching staffs should be hired for the training.

Meezan Bank Limited should become much specified about its competitors, so that

it can understand which of its competitor is in the first degree and who is in the

second degree. Then the first-degree competitors should be chased closely.

A research cell should continuously try to gather information about the present

action of its competitors and their expected future actions. So in this way more

effective strategies can be formulated.

The performance reward linkages should be made strong as it said, A happy

employee deliver more than he receive from organization. The MBL should also

try to make its employees happier.

44


39/39

Meezan Bank Limited

Maryam Intern Report

Documents

Transcript of Maryam Intern Report