Internship Report on

Kalma Chowk Branch

Submitted by:
Kanza Areej
Roll no: 036
Session: 2010-14
Department of Computer Sciences, Fatima Jinnah Women University

Acknowledgement
At the very beginning, I am solemnly thanking the Almighty Allah.
I am grateful to my parents who have always been a source of encouragement for me
throughout my life.
I feel deeply indebted to all my teachers for providing inestimable, priceless and valuable
cooperation and support.
Furthermore, I want to thank Meezan Bank Limited for provisioning valuable guidance and
information and the supervisor Mr. Nazakat Ali for giving me the required information. I found
everyone very cooperative and helpful for providing me the theoretical as well as practical
knowledge about the function and operation of the bank.

Abstract
This Report is concerned to a brief study of the operation, function, tasks and services of
Meezan Bank of Pakistan. Banking plays a very important role in the commerce and economic
development of a country. Now-a-days banks are using different modern technologies, which
influence the managerial activities. 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 a historic initiative, Meezan Bank was granted the nations first fullfledged commercial banking license as a dedicated Islamic Bank, by the State Bank of Pakistan.
MBL is the largest Islamic Bank in Pakistan with a network of over 300 branches in 95 cities.
In preparation of this Report I have tried my best to provide all possible information about the
operation, function and tasks of MBL in brief and comprehensive form. The report begins with
the management structure of MBL and different products and services offered by MBL along
with their features. It also includes a brief department worked during internship and SWOT
analysis of MBL.
The aim of this internship was to have the practical knowledge about the organizational
working. The department covered mainly during my internship was customer services
department. My objective of doing this internship is to improve my management skills and to
identify my strengths and passions in order to create a fulfilling and successful career.

TABLE OF CONTENTS
SR. #

CONTENTS

PAGE #

01

Acknowledgement

02

Abstract

Chapter 1: Introduction to Report

03

Background of study

04

Purpose of study

05

Data sources

Chapter 2: Introduction to Islamic Banking

06

The Islamic Economic System

07

Riba and its types

08

Commercial Interest And Usury

09

Modes of Islamic Banking

Chapter 3: Introduction to Meezan Bank Limited

History of Meezan Bank Limited
Vision, Mission and Objectives of Organization

11

Organizational structure

11
14
15
4

12

Product Information

16

13

Branch Network

23

Chapter 4: Departments
14

Customer services department

24

15

Operations department

26

16

Cash department

30

17

Foreign currency department

31

Chapter 5: Few terms and their definitions

18

Customers

33

19

Audit

33

20

PBO, BDO and SOP

33

21

Internal and External Customers

34

22

Term Deposit Receipt

34

23

SWOT Analysis

35

24

Conclusions and Suggestions

36

25

References

37

CHAPTER 01: INTRODUCTION TO REPORT

1.1 Background of Study

The study is about the general operations and management of Meezan Bank Limited Kalma
Chowk Branch Rawalpindi, and focuses on its function and operations, which was conducted
through observation in the branch.
Every student has to undergo an internship program in any organization to get exposure to the
real time business environment and to attain practical knowledge about daily operations of that
entity. The report is a reflection of my experience when I was an internee in MBL, Kalma Chowk
branch, Rawalpindi. 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 a 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.

1.2 Purpose of Study

The aim of this internship was to have the practical knowledge about the organizational
working. It not only gives us a chance to interact with the people already working there but also
enables us to get to know the financial institutions concerns atmosphere and business stature
in the city.

1.3 Data Sources

Both primary and secondary data have been used in the compilation of this report. The
methodology used is as under:

Primary data:
During the compilation of this report, I relied mainly on the primary data. The tool used for the
collection of primary data is observation. To get primary data I also performed some practical
work.

Secondary data:
The secondary data was mainly used for as a background material and for purpose of
references. The major sources of secondary data were the notes given and MBL website.
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CHAPTER 02: INTRODUCTION TO ISLAMIC BANKING

Islamic finance was practiced predominantly in the Muslim world throughout the middle Ages,
fostering trade and business activities with development of credit. The financial system is
founded on the absolute prohibition of the payment or receipt of any predetermined granted
rate of return. This closes the door to the concept of interest and precludes the use of debtbased instrument. The system encourages risk sharing promotes entrepreneurship, discourages
speculative behavior, and emphasizes the sanctity of contracts. The financial system is founded
on the absolute prohibition of the payment or receipt of any predetermined. Granted rate of
return, this closes the door to the concept of interest and precludes the use of debt- based
instrument. The system encourages risk sharing promotes entrepreneurship, discourages
speculative behavior, and emphasizes the sanctity of contracts.

2.1 The Islamic Economic System

One of the forms of capitalism, which has been flourishing in non-Islamic societies, is the
interest based investment. There are normally two participants in such transaction. One is the
investor who provides capital on loan and other manager who run the business. The investor
has no concern whether the business run into profit or loss he automatically gets interest.

2.2 Riba
Definition of Riba:
The word Riba means excess, increase or addition, which correctly interpreted according to
Shariah terminology, implies any excess compensation without due consideration (This
definition of Riba is derived from Quran and is unanimously accepted by all Islamic scholars).

Types of Riba:
There are two types of Riba
1. Riba An Nasiyah
2. Riba Al Fadl
Riba An Nasiyah:
Defined as excess which result from predetermined interest which a lender receives over and
above the principle (Ras ul Maal).
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Riba Al Fadl:
Defined as excess compensation without any consideration resulting from a sale of goods.

2.3 Commercial Interest and Usury:

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

Tijarti Sood :
Interest paid on loan taken for productive &profitable purposes.

Sarfi Sood :
Interest paid on loan taken for personal need and expenses

2.4 Modes of Islamic Banking

Murabaha
Literally it means a sale on mutually agreed profit. Technically, it is a contract of sale in which
the seller declares his cost and profit. Islamic banks have adopted this as a mode of financing.
As a financing technique, it involves a request by the client to the bank to purchase certain
goods for him. The bank does that for a definite profit over the cost, which is stipulated in
advance.

Ijarah
Ijarah is a contract of a known and proposed usufruct against a specified and lawful return or
consideration for the service or return for the benefit proposed to be taken, or for the effort or
work proposed to be expended. In other words, Ijarah or leasing is the transfer of usufruct for a
consideration which is rent in case of hiring of assets or things and wage in case of hiring of
persons.

Ijarah-wal-Iqtina
A contract under which an Islamic bank provides equipment, building or other assets to the
client against an agreed rental together with a unilateral undertaking by the bank or the client
that at the end of the lease period, the ownership in the asset would be transferred to the
lessee. The undertaking or the promise does not become an integral part of the lease contract
to make it conditional. The rentals as well as the purchase price are fixed in such manner that
the bank gets back its principal sum along with profit over the period of lease.
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Musawamah
Musawamah is a general and regular kind of sale in which price of the commodity to be traded
is bargained between seller and the buyer without any reference to the price paid or cost
incurred by the former. Thus, it is different from Murabaha in respect of pricing formula. Unlike
Murabaha, seller in Musawamah is not obliged to reveal his cost. Both the parties negotiate on
the price. All other conditions relevant to Murabaha are valid for Musawamah as well.
Musawamah can be used where the seller is not in a position to ascertain precisely the costs of
commodities that he is offering to sell.

Mudarabah
A form of partnership where one party provides the funds while the other provides expertise
and management. The latter is referred to as the Mudarib. Any profits accrued are shared
between the two parties on a pre-agreed basis, while loss is borne only by the provider of the
capital.

Musharakah
Musharakah means a relationship established under a contract by the mutual consent of the
parties for sharing of profits and losses in the joint business. It is an agreement under which the
Islamic bank provides funds, which are mixed with the funds of the business enterprise and
others. All providers of capital are entitled to participate in management, but not necessarily
required to do so. The profit is distributed among the partners in pre-agreed ratios, while the
loss is borne by each partner strictly in proportion to respective capital contributions.

Bai Salam
Salam means a contract in which advance payment is made for goods to be delivered later on.
The seller undertakes to supply some specific goods to the buyer at a future date in exchange of
an advance price fully paid at the time of contract. It is necessary that the quality of the
commodity intended to be purchased is fully specified leaving no ambiguity leading to dispute.
The objects of this sale are goods and cannot be gold, silver or currencies. Barring this, Bai
Salam covers almost everything, which is capable of being definitely described as to quantity,
quality and workmanship.

CHAPTER 3: INTRODUCTION TO MEEZAN BANK LIMITED

Meezan bank is a premier Islamic bank and publicly listed company first incorporated on
January 27, 1997. It started operations as an investment bank in August of the same year. In
January, 2002 in an historic initiative, Meezan Bank was granted the nation's first full-fledged
commercial banking license dedicated to Islamic Banking, by the State Bank of Pakistan.
Meezan Bank stands today at a noteworthy point along the evolution of Islamic Banking in
Pakistan. The banking sector is showing a significant paradigm shift away from traditional
means of business and is catering to an increasingly astute and demanding financial consumer
who is also becoming keenly aware of Islamic Banking. Meezan Bank bears the critical
responsibility of leading the way forward in establishing a stable and dynamic Islamic Banking
system replete with dynamic and cutting-edge products and services. The Bank has made
fundamental and significant progress forward, and in doing so has established a strong and
credible management team comprised of experienced professionals, which has achieved a
strong balance sheet with excellent operating profitability, including a capital adequacy ratio
that places the Bank at the top of the industry, a long-term entity rating of A+, and a short-term
entity rating of A1+, the highest short-term rating. The Bank's main shareholders are leading
local and international financial institutions, including Pak-Kuwait Investment Company, the
only AAA rated financial entity in the country, the Islamic Development Bank of Jeddah, and the
renowned Shamil Bank of Bahrain that in addition to their strength and stability, add significant
value to the Bank through Board representation and applied synergies.
The Bank has an internationally renowned, very high caliber and pro-active Shariah Supervisory
Board presided over by Justice (Retd.) Maulana Muhammad Taqi Usmani, a renowned figure in
the field of Shariah, particularly Islamic Finance. He holds the position of Deputy Chairman at
the Islamic Fiqh Academy, Jeddah and in his long and illustrious career has also served as a
Judge in the Shariat Appellate Bench, Supreme Court of Pakistan. The Bank also has a resident
Shariah advisor, Dr. Imran Usmani, who strictly monitors the regular transactions of the Bank.
The board also includes Sheikh Essam M. Ishaq (Bahrain), and Dr. Abdul Sattar Abu Ghuddah
(Saudi Arabia).At Meezan Bank, we strive to find commonalties with the conventional banking
system with absolutely no compromise on Shariah rulings. The bank has developed an
extraordinary research and development capability by combining investment bankers,
commercial bankers, Shariah scholars and legal experts to develop innovative, viable, and
competitive value propositions that not only meet the requirements of today's complex
financial world, but do so with the world-class service excellence that our customers demand,
all within the bounds of Shariah. Furthermore, the Bank has built a strong Information
10

Technology and customer knowledge-based focus that continues to use state of the art
technology and systems. The Bank's Corporate and Investment Banking business unit is geared
towards nurturing and developing a long-term relationship with clients by understanding their
unique financing requirements and providing Shariah compliant financing solutions across the
horizon of corporate banking and structured finance. The Bank is also implementing robust and
aggressive strategic and tactical initiatives on the consumer banking side. The Bank has a
rapidly growing branch network across all major cities nation-wide. Providing our customers
accessibility and convenience is a prime target, within an atmosphere and culture of dedicated
service and recognition of their needs.

3.1 History of Meezan Bank Limited:

1997
Al-Meezan Investment Bank is established with a mandate to pursue Islamic Banking. Mr. Irfan
Siddiqui appointed as first and founding Chief Executive Officer.

1999
The Shariat Appellate Bench of the Supreme Court of Pakistan rejects the appeals and directs all
laws on interest banking to cease. The government sets up a high level commission, task forces
and committees to institute and promote Islamic banking on parallel basis with conventional
system.

2001
The Shariah Supervisory Board is established at Al-Meezan Investment Bank led by Justice
(Retd.) Muhammad Taqi Usmani as chairman. State Bank of Pakistan sets criteria for
establishment of Islamic commercial banks in private sector and subsidiaries and stand-alone
branches by existing commercial banks to conduct Islamic banking in the country.

2002
Meezan Bank acquires the Pakistan operations of Society General and concurrently Al Meezan
Investment Bank converts itself into a full-fledged Islamic commercial bank. The first Islamic
banking license is issued to the Bank and it is renamed Meezan Bank. President General Pervez
Musharraf inaugurates the new Islamic Commercial Bank at a formal ceremony in Karachi.
Pakistan's first Shariah-compliant Auto Finance product is launched i.e Car Ijarah and Islamic
Export Refinance scheme is introduced in coordination with SBP Islamic Export Refinance
scheme is introduced in coordination with SBP.
11

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.
Pakistan's first Shariah-compliant Housing finance product is launched. Branch network reaches
10 branches nationwide while the deposit base grows to Rs.7.7 billion.

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. 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.
Deposit base grows to Rs. 13.7 billion and number of branches reaches 16. A 24/7 Call Center is
established, ATM/Debit Cards and ATMs are introduced, Online Banking is launched across all
Branches.

2005
Meezan Bank becomes the first customer of Islamic Insurance (Takaful) by signing the first
Memorandum of Understanding MoU with Pak-Kuwait Takaful Company Limited (PKTCL). The
signing of this MoU has ushered Pakistan into a new era of Islamic Insurance (Takaful). Meezan
Bank wins Best Islamic Bank in Pakistan, Deposit base grows to Rs. 22 billion and number of
branches reaches 28. Dollar Mudarabah Certificates and Special Musharkah Certificates
launched for liquidity management and inter-bank market are launched.

2006
A 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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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. Branch network
reaches the milestone number of 100 branches in 31 cities. Introduction of Istisna financing for
the working capital needs of customer.

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.

2009
Branch network of six dedicated Islamic banks increases to 480 Branches (Including SubBranches) with Meezan Bank having a 42% share of the Islamic Banking branch network in the
country with 201 branches in 54 cities across the country. Islamic Banking's share grows to over
5.5% of the total Banking industry

2010
Launch of Wakalah based financing product for the development of partnerships between
Islamic banks and Microfinance bank. Total number of branches in this year was 222 over 63
cities. Launched Meezan Business Plus account, Meezan Euro Savings Account as well as
Meezan Pound Savings Account.

2011
The Bank is now the 9th largest bank in Pakistan in terms of branch network. Total assets of the
Bank cross Rs. 200 billion, Meezan Bank becomes the Advisor and Lead Arranger for the first
ever short-term Sukuk Meezan Bank becomes the Advisor and Lead Arranger for the first ever
short-term Sukuk. The branches increase to 275 over 83 cities. Launch of Running Musharakah
for working capital requirements of corporate customers.

13

2012
Total number of branches 310 across 90 cities, Total deposits cross Rs. 230 billion. Launched
Kids club & Teens club, Launch of Mock Branches in Karachi & Lahore for staff training, Launch
of Meezan Premium Banking & Premium Banking Centers and Launch of Meezan Visa Platinum
Debit Card.

3.2 Vision, Mission and Objectives of Organization

Our Vision

Establish Islamic banking as banking of first choice to facilitate the

implementation of an equitable economic system, providing a strong
foundation for establishing a fair and just society for mankind.

Our Mission

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

innovative value-added products and services to our customers
within the bounds of Shariah, while optimizing the stakeholders
value through an organizational culture based on learning, fairness,
respect for individual enterprise and performance.

Our Objectives

To develop a committed service culture which ensures the

consistent delivery of our products and services within the highest
quality service parameters, promoting Islamic values and ensuring
recognition and a quality banking experience to our customers.

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3.3 Organizational structure

15

3.4 Products
Meezan Bank offers a diverse range of Shariah-compliant deposit and financing products
through its network of 310 branches across 90 cities in Pakistan. All products of the Bank are
approved by the Shariah Advisor / Shariah Supervisory Board and are 100% Riba-Free. The
Bank's nationwide real-time Online Banking system allows customers to conduct banking
transactions at any branch of Meezan Bank, regardless of which branch their account is in.
Meezan Bank also offers an extensive ATM network, free Internet Banking facility on all Pak
Rupee Accounts, globally accepted VISA Debit Cards and SMS Alerts service on every debit and
credit transaction in customers' account and a 24/7 Call Center.

Meezan Rupee Current Account

This is a checking account that works on the basis of 'Qard' and provides the convenience of
conducting day-to-day transactions. There is no restriction on withdrawals or number of
transactions and there is no deduction of service charges if the balance maintained is low.

Meezan Rupee Savings Account

Meezan Bank's Rupee Savings Account provides monthly profit along with a variety of free
packaged benefits. Profit is calculated on the daily balance and credited into the account on a
monthly basis. Minimum investment required for opening an account is Rs. 100 and there is no
deduction of service charges if the balance maintained is low.

Meezan Bachat Account

Meezan Bachat Account is a Savings Account for small savers that offers a higher expected
profit. The minimum investment required for opening an account is Rs. 25,000. Profit is
calculated with a higher weightage for account balances up to Rs. 1 million. There is no
restriction on withdrawals or number of transactions and there is no deduction of service
charges if the balance maintained is low.

Karobari Munafa Account

Meezan Bank's Karobari Munafa Account is a Savings Account for business people where profit
is calculated on the daily balance and credited into the account on a monthly basis. The
minimum investment required for opening an account is Rs. 1 million. On maintaining an
average monthly balance of Rs. 1 million, the customers can avail free cheque book and pay
order facilities. There is no restriction on withdrawals or number of transactions and there is no
deduction of service charges if the balance maintained is low.
16

Meezan Business Plus Account

Meezan Business Plus is a business account with several unique features that make it very
suitable for use as a business account. On maintaining an average monthly balance of Rs.
25,000, the customer can avail a number of free services including free cheque books, free pay
orders, free VISA Debit Card, free account statements, free Online Banking, free Internet
Banking, free hold-mail facility, free SMS Alerts service, free inter-city clearing, free Pay Order
cancellation, free Balance Maintenance Certificate, etc. There is no restriction on withdrawals
or number of transactions and there is no deduction of service charges if the balance
maintained is low. As the product is designed to provide free value added services, the share of
profit will be minimal.

Kids Club Account

Kids Club Account is a Mudarbah based Savings Account for children under the age of 12 years
to cultivate saving habit in the early years. The account can be opened from Rs. 500. On
opening the account from Rs. 10,000, the child is entitled to free accidental takaful coverage for
one year. The profit is paid on monthly basis. VISA Debit card fee is waived for the first year.
Exciting gifts are given to kids club members on Account opening.

Teens Club Account

Teens Club Account is Pakistan's first Teens Account. The account is a Mudarbah based Saving
Account designed to cater to the requirements of the age group of 12 to 18 years. Teens Club
Account can be opened from Rs. 1,000 only. Teens opening Teens Club Accounts with Rs.
10,000 are entitled to free accidental Takaful coverage in the first year of account opening. VISA
Debit card fee is waived for the first year. Exciting Account opening gifts await the Teens Club
members.

Dollar Savings Account

Meezan Bank's Dollar Savings Account is a foreign currency Savings Account that can be opened
by both individuals and businesses. Profit is calculated on daily balance and credited into the
account on a monthly basis. The minimum investment required for opening an account is USD
100. Customers may make withdrawals of up to USD 500 without prior intimation and above
USD 500 on a single day intimation (subject to availability). There is no deduction of service
charges if the balance maintained is low.

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Euro Savings Account/Pound Savings Account

Meezan Bank's Euro Savings Account & Pound Savings Account are foreign currency Saving
Accounts that can be opened by both individuals and businesses. Profit is calculated and
credited into the account on a monthly basis. The minimum investment required for opening an
account is Euro / GBP 100. Customers may make withdrawals of up to Euro / GBP 500 without
prior intimation and above Euro / GBP 500 on a single day intimation (subject to availability).
There is no deduction of service charges if the balance maintained is low.

Certificates of Islamic Investment

Certificates of Islamic Investment are Term Deposit certificates for investment periods ranging
from 3 months to 5 years with profit payment on monthly, quarterly and maturity basis.
Minimum investment required for quarterly and maturity profit payment option is Rs. 50,000.
However, Rs. 200,000 is required as a minimum investment amount for a monthly profit
payment option and there is no limit on maximum investment. Redemption can be made as per
the approved schedule.

Meezan Amdan Certificate

Meezan Amdan Certificate is a Term Deposit certificate that offers a higher expected monthly
profit to investors for periods of 51/2 and 7 years. It is ideal for those individuals and businesses
who need a regular stream of monthly income. Minimum investment required is Rs. 100,000
for regular customers, while for widows and senior citizens, the minimum investment is
Rs. 50,000. Redemption can be made as per the approved schedule.

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Monthly Mudarabah Certificate

The Monthly Mudarabah Certificate is a short-term deposit product for an investment period of
one month only. Profit is paid on maturity with a re-investment option available on a
continuous basis. Minimum investment required is Rs. 100,000.

Dollar Mudarabah Certificate

Dollar Mudarabah Certificates are foreign currency Certificate of Islamic Investment through
which one can invest in US Dollars for defined periods ranging from 3 months to 3 years and
earn profit six-monthly or at maturity. Minimum investment required is USD 10,000 and there
is no maximum investment limit. Redemption can be made as per the approved schedule.

Meezan Labbaik Savings Aasaan

Meezan Labbaik Savings Aasaan is a deposit product for individuals who wish to save for their
spouse, children, parents or other family members for performing Hajj or Umrah on a future
date. It is a Recurring Deposit Account, where the customer deposits contribution as per
schedule. The minimum investment required for opening an account is Rs. 1,000. This is a nonchecking account where no cheque book or VISA Debit Card is issued. Profit is calculated on the
daily balance and credited into the account on a monthly basis.

Meezan Labbaik Travel Aasaan

Meezan Labbaik Travel Aasaan is a service that Meezan Bank provides to facilitate those
customers who wish to perform Hajj or Umrah. The Bank's role is limited to sales and funds
collection agent of selected travel agents while delivery of the selected package is the
responsibility of the travel agent. Labbaik Travel Aasaan has two variants:
1. Customer can pay full price of the selected package upfront and travel right away after
completion of all formalities.
2. Customer can pay a down payment and travel after completion of all travel arrangements.
The remaining price of the package will be paid in 12 installments with no additional charges.

Car Ijarah
Meezan Bank's Car Ijarah is an auto finance facility based on the principles of Ijarah. Car Ijarah
is a car rental agreement under which the Bank purchases a new/used car of the customer's
choice and rents it out to the customer for a period of 3 to 5 years, agreed at the time of the
contract. The Bank offers a low monthly rental and quick processing and delivery. Rental
payments start after delivery of vehicle to the customer. The Bank also provides Takaful cover
of the car and free accidental death coverage up to Rs. 400,000.
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Easy Home
Easy Home is Meezan Bank's Shariah-compliant home financing facility which is based on the
principle of Diminishing Musharakah. With Meezan Easy Home, the customer can buy a house,
build a house, renovate an existing house or replace the conventional house loan with Easy
Home to enjoy the benefits of a Riba-Free and completely Halal financing facility. With flexible
financing tailored to support the customer's need, Meezan Easy Home provides one of the best
options to buy, build, renovate or replace a house with an absolutely hassle-free process with a
quick turn-around time.

Laptop Ease
Meezan Laptop Ease is a laptop financing facility based on the concept of Musawamah which is
a general and regular kind of sale. Through Meezan Laptop Ease, one can purchase a branded
laptop equipped with all the latest features. The salient feature of this product is that a laptop
can be purchased now and the price can be paid in easy monthly installments over a period of
3-24 months. Laptop Ease is a Shariah-compliant laptop finance facility which is one that is
comprehensive, affordable and completely hassle-free.

Online Banking
Meezan Bank offers free Online Banking facility on all Pak Rupee Accounts to its customers. This
enables the Bank's customers to access their accounts and conduct banking transactions from
any of Meezan Bank's 310 branches nationwide, regardless of which branch or city they have
their account in. This facility provides great convenience for depositing and withdrawing cash,
making pay orders and availing numerous other banking services.

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Meezan VISA Debit Card

Meezan VISA Debit Card provides convenience to customers to access their money anytime and
anywhere, at all outlets displaying the VISA symbol. Meezan VISA Debit Card is accepted at
more than 30 million retail outlets worldwide. With Meezan VISA Debit Card, customers have
access to the money in their account wherever they are, whenever they want, wherever they
see the VISA symbol.

Internet Banking
Meezan Bank provides a smarter way to bank through its Internet Banking facility, providing
customers global access to their account 24 hours a day, 7 days a week. Meezan Bank's Internet
Banking offers the following facilities:
View Account Statement
Utility Bill Payments
Mobile Prepaid and Postpaid Payments
Funds Transfer Facility
Balance Inquiry of Multiple Accounts
Real Time Cheque Status and Stop Payment Request
Cheque Book and Pay Order Request
Logging and Tracking Status of Complaints
Account Activity Alerts

SMS Alerts
Meezan Bank's SMS Alerts service keeps customers informed about activities in their accounts;
enabling them to keep track of their financial transactions. Once the customer signs-up for
SMS Alerts, he/she will receive an SMS whenever there is a debit or credit transaction in their
account. The SMS will provide transaction details and the latest account balance.

Meezan ATM Network

Meezan Bank offers a nationwide network of over 245 ATMs located at its branches and at
prominent off-site locations across the country. The Bank also offers access to more than 2,000
ATM locations country-wide via 1-Link and MNET networks.

Meezan QuickPay
Meezan QuickPay is a facility that allows customers to pay utility bills, mobile phone bills and
top-ups through Meezan Bank's ATMs, meaning that they no longer have to wait in queues to

21

pay these bills. Customers can pay their telephone, gas and electricity bills of selected
companies at any of Meezan Bank's ATMs nationwide, 24 hours a day, 7 days a week.

Meezan Premium Banking

Meezan Premium Banking is the Bank's first Shariah-compliant wealth management product
developed to address the needs of its high net worth customers. Premium Banking customers
enjoy special privileges and priority service such as:
Meezan Visa Platinum Debit Card - a very prestigious card, offering many discounts at
selected retail outlets, restaurants and hotels across the country
Access to the International CIP lounges at Karachi, Lahore and Islamabad airports
Dedicated Premium Banking Centers at Karachi, Lahore and Islamabad
Premium Phone Banking - a dedicated Call Center exclusively for to the Premium
Banking customers
Premium Internet Banking - an exclusive Internet Banking facility that offers fee waivers
on basic banking transactions

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3.5 Branch Network

Alhamdulillah, Meezan Bank has established 310 branches in 90 cities across Pakistan. This is a milestone that is
not only the success story of Meezan Bank but also the continuing success story of Islamic banking in Pakistan.
With this extensive network, our existing and potential customers are now closer than ever in 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 major Regions of Pakistan. The cities in which the Bank presently
operates are as follows

Southern Region
Dadu
Hub (Lasbela)
Hyderabad
Karachi
Larkana
Mirpurkhas
Moro
Muslim Bagh
Nawabshah
Quetta
Sakrand
Sanghar
Shahdadpur
Sukkur
Tando Adam
Tando Allahyar
Tando Mohammad Khan

Central Region
Ahmedpur East
Arifwala
Bahawalnagar
Bahawalpur
Burewala
Chichawatni
Chiniot
Chishtian
Daska
Dera Ghazi Khan
Faisalabad
Gojra
Gujranwala
Gujrat
Hafizabad
Haroonabad
Hasilpur
Jampur
Jhang
Kabirwala
Kamoki
Kasur
Khanewal
Khanpur
Kharian
Khushab
Lahore
Lalamusa
Layyah
Lodhran
Mandi Bahauddin
Mian Channu
Mianwali
Multan
Muzaffargarh
Okara
Pattoki
Pirmahal
Rahim Yar Khan
Raiwind
Sadiqabad
Sahiwal
Sargodha
Sheikhupura
Sialkot
Toba Tek Singh
Vehari
Wazirabad

Northern Region
Abbottabad
Attock
Bannu
Chakwal
Charsadda
Dadyal
Dera Ismail Khan
Dina
Gujar Khan
Haripur
Havelian
Islamabad
Jhelum
Kohat
Mansehra
Mardan
Mirpur Azad Kashmir
Muzaffarabad
Nowshera
Peshawar
Rawalpindi
Swabi
Swat
Timergara
Wah Cantt

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CHAPTER 4: DEPARTMENTS
4.1 Customer Services Department:
Account opening and closing is the function of customer services department. The banks
customers includes individuals (single or joint), firm (partnership/proprietorship), autonomous
corporations, limited companies, charitable Institutions, associations, educational institutions
or local bodies. Brief explanation of these accounts is as follows

Basics of Account Opening

Account opening is the basic and first relationship, which is established between Bank and the
customer. In account opening extreme care has to be exercised in case of completion of
account opening documentation. Whenever a client comes in the bank in order to open an
account the first information that is given to him/her is about the types of accounts, which can
be opened, so for this purpose the client is given detailed information about the accounts and
their respective profit rates.

Types of Account Opened

Current
Saving
Term Deposit

Sub-categories of Accounts and the Basic Requirements(Minor Account):

Bay form and copy of passport minor

National Identity card of Guardian
Signature requirement of guardian

Individual Account

Original CNIC
Source of income
Introduction/KYC

CNIC:
A customer must bring the original CNIC along with them which is seen at the time of opening
an account. A copy of it is kept with original seen stamp on it.

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Source of income:
It has different categories; for e.g. salary slip in case of employee, pension book in case of
retired person, whereas in case of house wife documents of husband are required.
Introduction/KYC:
Introduction could be of any relative whos already a Meezan Banks customer. KYC stands for
know your customer; it could be any visiting card, electricity bill etc.

Joint Accounts
As evident from the name these accounts can be jointly opened by any number of persons. The
minimum number of persons required to open a n account is two.

Requirements:

National Identity card of all Applicants.

Signature of all Applicants.
Zakat Affidavit of all Applicants (zakat Exemption).
Operation of account clearly mentioned.
The options available to operate the account are:
Jointly
Either or Survivor
Other(s)(Please specify)

After opening the account A Letter of Thanks is sent to the customer in order to thank the
customer for opening an account in the Bank. This letter tells all the information regarding
his/her accounts, which are kept very confidential.

Account Opening Register

After an account is opened, an entry is made in the account opening register, which has the
following columns:

Date
Account Number
Name & Address
Telephone Number
Initial Deposit

Customer Services/Relation Officer enters the new account opened in computer and the
Specimen signature Cards are also scanned so that whenever a cheque of the respective
account comes for encashment, the signatures can be verified.

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Account Closing
For closing an account customer must come along with original ID card. Cheque book and ATM
card is taken. Account is closed after giving profit, in case of current account it is hot marked
and request letter is given. Saving account cannot be closed in the mid of the month but only
after giving profit which in most cases goes to the charity.
Overall functions performed by Customer Services Department:
ACCOUNT OPENING
ACCOUNT CLOSING
GENERAL CLIENT DEALING

Dormant Account
Dormant means inactive or suspended. An account becomes dormant when there are no
transactions in one year. In order to reactivate it, customer must come. Procedure to reactivate
dormant account is:

Must bring original ID card

Deposit or withdrawal
System then activates it

4.2 Operations department

Functions performed:
Clearing
Remittance

Clearing
In clearing process, if the account holder of MBL receives the cheque of other bank like City
Bank, Habib Bank Limited etc, and he submits it in MBL branch to be cashed. At the same time
the clearing process starts. First the bank name, Cheque number and the amount are written in
the register. After this three kind of stamps are required, first bank name stamp, secondly
clearing stamp of next date and in case the cheque is not local then the intercity clearing stamp
is required. Some cheques are local and some are outstation. The institution N.I.F.T. provides
the services in clearing the cheque. They send the different cheque to different banks. The
N.I.F.T service is only in few cities, like Karachi, Lahore, and Rawalpindi. The cheque of inter city
is sent through N.I.F.T. And where, the N.I.F.T service is not available so the cheque is sent
through T.C.S. The clearance of cheque is informed through advice. Some cheques are not
26

passed so they are returned with Rs. 100 deduction and if the cheque is intercity then the
postage charges are deducted. For this purpose the Debit & Credit voucher is used. When the
cheque is cleared the today stamp is required. Some cheque is drawn on MBL. This is called
outward clearing. These cheques will be entered in the outward clearing register. And the
advice is sent for the clearance of cheques. The account holder account is credited.
Inward clearing
Outward clearing
INWARD CLEARING
In the morning, the bank receives its own cheques, which have been presented by the
customers in some other bank to be deposited in their account. NIFT provides the facility of
bringing cheques for inward and also takes the cheques of outward clearing to other banks. The
cheques received in inward clearing are the cheques drawn on bank and the bank has to pay for
them. For this purpose the bank makes clearing in computer by checking the balances of the
respective customer, if their balances are up to the mark then that cheque is cleared and the
respective customer account is debited with the respective amount. If the balances are short
then that cheque is bounced back to the related bank.
SERVICES PROVIDED BY CLEARING FUNCTION
a) Transfer of amount
If a customer holds two accounts in the bank and he/she wants to transfer money from one
account to other account, customer writes a cheque and fills deposit slip in which he/she writes
account number to which amount is to be transferred. After making transfer entry in the
computer, affix transfer stamp in the middle of the cheque, crossing on the upper left and
banks endorsement stamp on the backside of the cheque.
b) Telling amount balances
Whenever clearing officer receives phone call from the customer inquiring about his/her
account balance after confirming the name, address and other information he tells the balance
through computer.
c) Issuing cheque book
It is also the duty of department to issue a cheque book when an officer receives request from
the customer.

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Remittance
Another important department in MBL is Remittances Department. The remittances
department transfers the funds from one bank to other bank and from one place to another
place. In remittances department the collection takes place. The MBL makes payment of only
open cheques on the counter and prohibits the payment of crossed cheques. MBL transfers
money from one place to another by the following means:
a) Pay order
b) Demand drafts
c) Cheque
a) PAY ORDER:
Pay order is an order to pay money but this payment is to be made within city. In other words it
can be said that the payee and the payer should be in one city.
In pay order the payment can be made in
A) Cash
B) Clearing
C) Transfer
PROCEDURE:
In case of pay order first of all the customer has to fill a pay order application form in favoring
section: name, account number, amount, beneficiary name, address, etc. The data is entered in
already set format of pay order in computer and pay order print out is taken. An authorized
person and manager operations are signed pay order. The original copy of the pay order is
given to the customer and carbon copy is kept with bank for office record. Pay order is never
returned.
b) DEMAND DRAFT
It is an order to pay money to the payee who is residing outside the city. Demand draft can be
for a customer who may or may not have an account in the bank but the other persons
account must be maintained with the bank for which the payer has demanded the Demand
draft.
c) CHEQUE
Cheque is also called as debit instrument because it is concerned with the withdrawal of cash.
On any particular cheque, certain time, date and amount is written at someones name or
companys name. There are two types of cheque:
1. Open cheque
2. Cross cheque
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For any cheque there are six things that must be checked:

Date of the cheque

Amount of the cheque
Maker of the cheque
Payee of the cheque
Endorsement of the cheque
Negotiability of the cheque
Date of the cheque:
The validity of a cheque is six months. Before that it is considered to be outdated cheque and
after that it will be expired cheque. A postdated cheque (i.e. after todays date) cannot be
issued.
Amount of cheque:
Amount must be same in words and figures
Maker of cheque:
Maker is a person giving payment, could be self or any other person.
Payee of the cheque:
It is the person to whom the payment is to be given.
Endorsement of the cheque:
To endorse a cheque means to sign the back of the cheque in order to cash it, deposit it or sign
it over to someone else. There are several ways to endorse a cheque, depending on what you
intend to do with the cheque once you have properly endorsed it. It is a proof that you cashed
or deposited a cheque.
Negotiability of the instrument:
Negotiability in this case means that the cheque must be in good condition i.e. there must be
no cutting, should be neat and worth of transferring.
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4.3 Cash department

The cash department is the most important department of the bank. It receives cash from
customers and then deposits it into the accounts of the customers and maintains their
balances. This is the most important and critical department in a Bank. There are two basic
functions performed by the cash department. These are:

Receipts
An individual who has account in the Bank can deposit money in his account. For deposit of the
money the individual has to fill the deposit slip in which the account holder writes his name,
account number, amount of the money both in figures and in words. After filling the deposit
slip the Cash amount along with the deposit slip is submitted with the cashier. The cashier
collects the cash and counts it and after verification the cashier stamps the deposit slip. One
part of the deposit slip is given back to the customer and the other part of the deposit slip
remains with the bank for the record purposes. The cashier also record the deposits made by
the customers in credit sheets daily. The deposits of all customers of the bank are controlled by
mean of ledger account. Every customer has its own ledger account and has separate ledger
cards in which his / her total record is kept. Bill collection is also one of the main functions of
bank. Cashier has to prepare a list off bills serial number, a copy of which is to be sent to the
corresponding organization.

Payments
The procedure of clearance of a cheque or payments is as following. First of all the customer
presents his cheque to the cashier. The cashier records the account number and the amount,
which is to be drawn. Then the cashier checks the cheque number in the computer for the
verification whether the account holder has such amount in his account which he is demanding
or not. If the computer passes the cheque, the Passing officer signs the cheque and sends it to
the cash counter. After that the cashier pays the written amount to the customer and then in
the end records the amount paid in computer.
In cash department following books are maintained.
Scroll book
Paying book
Cash balance book
SCROLL BOOK
When cash is received at the customer it is recorded in the scroll book.
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PAYING CASH BOOK

The cashier makes entry in the paying cashbook when cash is paid.
CASH BALANCE BOOK
The consolidated figure of receipt and payment of cash is entered in cash balance book.

4.4 Foreign Currency Department

The account dealing with the foreign currency is called foreign currency account. Meezan home
Remittance provides Quick Remittance in major currencies i.e.

USD
GBP
Euro
JPY
CHF
SGD
AUD

Product of MBL for foreign currency

Riba Free Dollar Savings Account

Foreign Currency Account
Meezan visa debit card
Dollar Mudarabah Certificates

With a minimum of only $100 you can open a Dollar Saving Account with us under a
Mudarabah arrangement that is strictly in conformity with the principles of Islamic Shariah. The
return earned on the Mudarabah pool is calculated every month and the profit ratio for all
investors is declared at the beginning of the month. If you maintain a minimum average
monthly balance of $ 500, you shall be eligible to receive profits that shall be credited to your
account every month. If any person wants to import goods from foreign, an account is required
and for international trading the FC is needed. MBL provide foreign currency on Pak rupee at
booking rate and the central office sent Rates. In foreign currency department the remittance is
sent through Foreign Telegraphic Transfer. The account holder can send the amount in foreign
bank account. If any transaction is made the daily report is given to the central office Karachi
daily. Different accounts can be opened like joint account or company account. The letter of
thanks is sent for opening the foreign currency account to account holder and introducer.
When any transaction is made the bank inform stock exchange daily. The foreign currency note
is counted and recorded in the cash memo book. The people in the foreign countries send the
31

amount through S.W.I.F.T. Weekly and monthly report of all the transaction is given to the
stock exchange. Cheque book is also issued to the account holder & the foreign currency
account number is given to him. In this procedure FBC & FBR is done. Debit Credit Voucher is
used. The charges are deducted while closing the foreign currency account and the cheque
book is returned while closing the account. The branch sends excess foreign currency to its
main branch.

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CHAPTER 5: FEW TERMS AND THEIR DEFINITIONS

5.1 Customer:
A customer is a person who is utilizing one or more of the services provided by the bank. A
customer is a person through whom the bank gets an opportunity to make an earning in return
to the service they can provide the customer with.

Customers needs and wants:

Clarity
Fairness
Easy access to account information and their funds
Friendly environment
Fast results
Desire flexibility and want banks to deliver financial advice
High quality

How to treat a customer?

Respect them
Listen to your customers and prefer what they want
Dont neglect the requirements just to follow rules
Eye contact
Dont be rude
Ask for feedback
Provide clear information

5.2 Audit:
Audit means inspection of records and activities. To conduct an independent review and
examination of system records and activities to access the adequacy of system controls. An
auditor recommends necessary changes in controls, policies and procedures.

5.3 PBO:
PBO stands for Personal Banking Officer; he/she deals valued customers and gives them
attention.

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5.4 BDO
BDO stands for Business Development Officer; who is assigned targets and works in a market.

5.5 SOP
SOP stands for Standard Operating Procedure which is done by management

5.6 Internal and external customers:

Internal customers are the employees who are working for a bank while all other persons who
are part of the bank are external customers.

5.7 Term Deposit Receipt:

The duration of Term Deposit Receipt (TDR) is from three months till seven years, it fixes
amount till this period. There are three ways of profit payment option:
1. Maturity: after the time is matured
2. Quarterly: every after three months
3. Monthly: every month
Maturity profit > Quarterly profit > Monthly profit
Maturity profit= actual amount + profit

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SWOT Analysis
Being aware of the environment in which one operates as well as of one's own strengths and
weaknesses is a key element in the success or failure of any business. Meezan Bank's
management is cognizant of the fact that the economy and the banking industry are in a state
of flux and regularly conducts SWOT analysis of the organization to capitalize on its strengths
and work on its weaknesses in view of the opportunities available in its environment and the
threats that it needs to overcome. A SWOT summary of the business as it stands today is given
below:

35

CONCLUSION AND SUGGESTIONS

Conclusion:
I spent four weeks of my internship in MBL Kalma Chowk Branch. During these four weeks, I felt
myself to be a part of the bank. Even, this was my first experience of working in a bank, but I
learned a lot from this experience. Based on my experience & observation regarding the
operations and policies of Meezan Bank, I have tried to show some problems and
recommendations for further improvement.
1. The employee turnover is very high which they have to cut down as they are losing a
number of good trained employees due to its poor policy.
2. The year 2013 is expected to offer increased competition in the secured assets
business as more Islamic banks are in the market.
3. Lack of awareness of Islamic banking in general public.
4. The employees usually face work over loaded problems.

Suggestions:
1. First of all, I would I like to suggest that the bank must pursue a very aggressive
marketing and advertising strategy so that it can create awareness in the general public
about its Islamic products and services
2. The personnel in the bank should not be overstressed with workload. The workload is
sometimes of a destructive level. At that level of load the employees lose all the comfort
in their work and remain tense and frustrated.

36

References:
Annual report of Meezan Bank Limited 2012
Meezan banks guide to Islamic Banking by Dr. Muhammad Imran Ashraf Usmani
www.meezanbank.com
www.google.com

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