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Chapter 1:

Introduction to the report:


This report is about Meezan Bank Ltd, Which studies the Banking activities under Islamic laws and those activities which are allowed in Sharia. The report also studies the historical background of Islamic banking and its origination. It explores certain rules regulation which Islamic banking system adopted instead of conventional banking system. The report further studies Banks internal activities its shareholders, Management, board of directors etc. The difference between Islamic banking systems comparative to conventional banking system also explore by the help of this report. The report helps in understanding the functional area of Islamic banks means it studies the various departments of the bank & its functions. The report studies Islamic moods of financing its introduction, procedure and purpose for which these were introduced instead of conventional banking system.

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Chapter 2:

Data Collection:
Primary data collection:
Data collected for the report through two ways in the first place primary data is collected while doing internship. Practical activities were under observation and also different questions were asked from different people and recorded at the end of the time off. Primary data collection helps in understanding to learn practical tasks in the bank that were how to record a transaction, how to open an account etc.

Secondary Data collection:


As the data which is pre existing which is not collected for the purpose of current research is known as Secondary data. As to make my report more correct and knowledgeable for the readers I collect data about the banks external activities via internet, already existing records about bank and through journals about the Islamic banking system in the economy.

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Chapter 3:

Introduction to Islamic Banking:


Islamic banking refers to a system of banking or banking activity which is consistent with Islamic law (Sharia) principles and guided by Islamic economics. In particular, Islamic law prohibits usury, the collection and payment of interest, also commonly called riba. Generally, Islamic law also prohibits trading in financial risk (which is seen as a form of gambling). In addition, Islamic law prohibits investing in businesses that are considered haram (such as businesses that sell alcohol or pork, or businesses that produce unIslamic media). In the late 20th century a number of Islamic banks were created, to provide to this particular banking market. Islamic banking has the same purpose as conventional banking except that it claims to operate in accordance with the rules of Sharia, known as Fiqh al-Muamalat (Islamic rules on transactions). The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba. Amongst the common Islamic concepts used in Islamic banking are profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah) and leasing (Ijarah).

Rules of Islamic Financing:


a) Any predetermined payment over and above the actual amount of principal is prohibited. Islam allows only one kind of loan and that is qard-el-hassan (literally good loan) whereby the lender does not charge any interest or additional amount over the money lent. b) The lender must share in the profits or losses arising out of the enterprise for which the money was lent. Islam encourages Muslims to invest their money and to become partners in order to share profits and risks in the business instead of becoming creditors. As defined in the Shariah, Islamic finance is based on the belief that the provider of capital and the user of capital should equally share the risk of business ventures, whether those are industries, farms, service companies or simple trade deals. c) Making money from money is not Islamically acceptable. Money is only a medium of exchange, a way of defining the value of a thing; it has no value in itself, and therefore should not be allowed to give rise to more money, via fixed interest payments, simply by being put in a bank or lent to someone else. The human effort, initiative, and risk involved in a productive venture are more important than the money used to finance it. d) Gharar (Uncertainty, Risk or Speculation) is also prohibited. Under this prohibition any transaction entered into should be free from uncertainty, risk and speculation. Contracting parties should have perfect knowledge of the counter values 3 .

intended to be exchanged as a result of their transactions. Also, parties cannot predetermine a guaranteed profit. This is based on the principle of uncertain gains which, on a strict interpretation, does not even allow an undertaking from the customer to repay the borrowed principal plus an amount to take into account inflation. The rationale behind the prohibition is the wish to protect the weak from exploitation. Therefore, options and futures are considered as un-Islamic and so are forward foreign exchange transactions because rates are determined by interest differentials. e) Investments should only support practices or products that are not forbidden -or even discouraged- by Islam. Trade in alcohol, for example would not be financed by an Islamic bank; a real-estate loan could not be made for the construction of a casino; and the bank could not lend money to other banks at interest. For example, in an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. However, the fact that it is profit cannot be made explicit and therefore there are no additional penalties for late payment. In order to protect itself against default, the bank asks for strict collateral. The goods or land is registered to the name of the buyer from the start of the transaction. This arrangement is called Murabaha. Another approach is Ijara wa Iqtina, which is similar to real estate lending. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid). There are several other approaches used in business deals. Islamic banks lend their money to companies by issuing floating rate interest loans. The floating rate of interest is pegged to the companys individual rate of return. Thus the banks profit on the loan is equal to a certain percentage of the companys profits. Once the principal amount of the loan is repaid, the profit-sharing arrangement is concluded. This practice is called Musharaka. Further, Mudaraba is venture capital funding of an entrepreneur who provides labor while financing is provided by the bank, so that both profit and risk are shared. Such participatory arrangements between capital and labour reflect the Islamic view that the borrower must not bear all the risk/cost of a failure, as it is Allah who determines that failure, and intends that it fall on all those involved. Last, Islamic banking is restricted to Islamically acceptable deals, which exclude those involving alcohol, pork, gambling, etc. Thus ethical investing is the only acceptable form of investment, and moral purchasing is encouraged. Islamic banks and banking institutions that offer Islamic banking products and services are required to establish Shariah advisory committees / consultants to advise them and to ensure that the operations and activities of the bank comply with Shariah principles.

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Difference between Islamic Banking & Conventional Banking: One must refrain from making a direct comparison between Islamic banking and conventional banking (apple to apple comparison). This is because they are extremely different in many ways. Conventional Banks Islamic Banks 1. The functions and operating 1. The functions and operating modes of Islamic modes of conventional banks are banks are based on the principles of Islamic based on fully man-made Shariah. principles. 2. The investor is assured of2.aIn contrast, it promotes risk sharing between predetermined rate of interest. provider of capital (investor) and the user of funds (entrepreneur). 3. It aims at maximizing profitIt also aims at maximizing profit but subject 3. without any restriction. to Shariah restrictions. 4. It does not deal with Zakat. 4. In the modern Islamic banking system, it has become one of the service-oriented functions of the Islamic banks to be a Zakat Collection Centre and they also pay out their Zakat. 5. Lending money and getting5.it Participation in partnership business is the back with compounding interest is fundamental function of the Islamic banks. So the fundamental function of the have to understand our customers business we conventional banks. very well. 6. It can charge additional money The Islamic banks have no provision to 6. (penalty and compounded interest) charge any extra money from the defaulters. in case of defaulters.
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Only small amount of compensation and these


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proceeds is given to charity. Rebates are giving for early settlement at the Banks discretion. 7. Very often it results in theIt gives due importance to the public interest. 7. banks own interest becoming ultimate aim is to ensure growth with equity. Its prominent. It makes no effort to ensure growth with equity. 8. For interest-based commercialFor the Islamic banks, it must be based on a 8. banks, borrowing from the money Shariah approved underlying transaction. market is relatively easier. 9. Since income from the advancesSince it shares profit and loss, the Islamic 9. is fixed, it gives little importance banks pay greater attention to developing to developing expertise in project project appraisal and evaluations. appraisal and evaluations. 10. The conventional banks give The Islamic banks, on the other hand, give 10. greater emphasis on creditgreater emphasis on the viability of the projects. worthiness of the clients. 11. The status of a conventional The status of Islamic bank in relation to its 11. bank, in relation to its clients,clients is that of partners, investors and trader, is that of creditor and debtors. buyer and seller.

12. A conventional bank has 12. Islamic bank can only guarantee deposits for to guarantee all its deposits. deposit account, which is based on the principle of al-wadiah, thus the depositors are guaranteed repayment of their funds, however if the account is based on the mudarabah concept, client have to share in a loss also.

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Introduction to Meezan Bank Limited:


History & Introduction:
The Holy Quran says:

"Seek the other world by means of what Allah has bestowed upon you"
Quaid's concept of Islamic Banking:

"We must work our destiny in our own way and present to the works an economic system based on true Islamic concept of equality of manhood and social justice ,Opening Ceremony of The State Bank of Pakistan on July 1, 1948.
-1947-

The inception of Pakistan as the first Islamic Republic created in the name of Islam.
-1949-

The Objectives Resolution was adopted by the first Constituent Assembly based on the ideology of a sovereign Islamic state. This was the first step in the conception towards Pakistans Constitution.
-1956-

The first Constitution defined Islam as State Religion and all laws to be according to the injunction of the Quran and Sunnah.
-1962-

The establishment of Council of Islamic Ideology (CII) was followed by the conception of the second constitution of Pakistan.
-1973-

The third constitution of Pakistan was passed allowing comprehensive legislation on Islamic principles and establishment of Federal Shariat Court.

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-1980-

Council of Islamic Ideology (CII) presents report on the elimination of Interest genuinely considered to bathe 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 on lending of foreign loans continued as before.
-1991-

Procedure adopted by banks in 1985 was declared unIslamic by the Federal Shariat Court (FSC). The Government and some banks/DFIs made appeals to the Shariat Appellate Bench (SAB) of the Supreme Court of Pakistan. Al-Meezan Investment Bank is established as the first Islamic bank of Pakistan. 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 of a high level commission, task forces and committees to institute and promote Islamic banking on parallel banking on parallel system.
-2001-

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

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-2002-

The first Islamic banking license is issued to Meezan Bank by the State bank of Pakistan. Societe Generale, a French commercial banks operations in Pakistan were amalgamated with Meezan Bank. President General Pervez Musharraf inaugurates the first commercial banking branch of MBL at the FTC Building, Karachi.
-2003-

A Musharaka-based Export Refinance Scheme has been designed by the State Bank in coordination with Meezan Bank Limited, in order to provide export finance to eligible exporters on the basis of Islamic modes of financing. Efforts are underway to develop Islamic money market instruments like Ijarah Sukuk to facilitate the banks in respect of liquidity and SLR management. Pakistans first Shariah compliant Mortgage facility is launched by Meezan Bank. Approved by the Shariah Supervisory Board, the product enables home purchase, home construction, renovation, as well as replacement of any existing mortgage. Al-Meezan Investment Management Limited (AMIM), a group company of Meezan Bank, introduces Meezan Islamic Fund (MIF). MIF is an open-end mutual fund that is Shariah compliant.
-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.

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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 acted as the Shariah Structuring Advisor for this historic transaction. Meezan Banks asset management, Al Meezan Investment Management Limited (AMIM), launches the Meezan Balance Fund (MBF). The offering was oversubscribed 1.25 times.
- 2005 -

Meezan Bank launched the Meezan Islamic Institution Deposit Account (MIIDA), a unique product tailored exclusively for Islamic Financial Institutions (IFIs). The facility is the first of its kind in Pakistan, whereby Islamic Banks (including dedicated, as well as conventional Islamic windows) now have the opportunity to manage excess liquidity by maintaining a checking account with Meezan Bank specifically designed for this purpose. 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).
-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 it branch network to a total of 62 branches in 21 cities, clearly establishing itself as the largest Islamic Bank of the country.

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Meezan Bank, becomes the first Islamic bank to introduce 8 am to 8 pm banking at select branches in Karachi and Islamabad.

-2007-

Meezan Bank becomes the first Islamic Bank having 100 branches in 31 cities in Pakistan. Vision: "Establish Islamic banking as banking of choice to facilitate implementation of an equitable economic system, providing a strong foundation for establishing a fair and just society for mankind.

Board of Directors
H. E. Sheikh Ebrahim Bin Khalifa Al-Khalifa (Chairman)

(Undersecretary, Ministry of Finance & National Economy,Kingdom of Bahrain) Naser Abdul Mohsen Al-Marri (Vice Chairman) Irfan Siddiqui (President & Chief Executive Officer) Istaqbal Mehdi Mohammed Abdul-Rehman Hussain Ariful Islam (Chief Operating Officer) Rana Ahmed Humayun Mohammed Azzaroog Rajab
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Ahmed Abdul Rahim Mohamed

Shariah Board:
The members of the Shariah Board of Meezan Bank are Internationally-renown scholars, serving on the boards of many Islamic banks operating in different countries. The members of the Shariah Board are:
Justice (Retd.) Muhammad Taqi Usmani Dr. Abdul Sattar Abu Ghuddah Sheikh Essam M. Ishaq Dr. Muhammad Imran Ashraf Usmani - Shariah Advisor

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Justice (Retd.) Muhammad Taqi Usmani

Justice (Retd.) Muhammad Taqi Usmani is a renowned figure in the field of Shariah, particularly in Islamic Finance. He currently holds advisory positions in a number of financial institutions practicing Islamic Banking and Finance. Justice (Retd.) Muhammad Taqi Usmani has vast experience in Islamic Shariah, teaching various subjects on Islam for 39 years. He has served as a Judge in the Shariat Appellate Bench, Supreme Court of Pakistan from 1982 to 2002. He is also the Editor of the magazine Albalagh (a weekly publication of Jamia Darul Uloom, Karachi) as well as an active contributor of articles in leading Pakistani newspapers. Born in Pakistan, Justice (Retd.) Muhammad Taqi Usmani graduated from Punjab University, Pakistan in 1970 and also holds an LLB from Karachi University, Pakistan. Prior to these, he completed the Takhassus course, which is the specialization course of Islamic Fiqh and Fatwa (Islamic Jurisprudence) from Jamia Darul Uloom Karachi, Pakistan. In March 2004, His Highness Sheikh Mohammad Bin Rashid Al Maktoum (Dubai Crown Prince and UAE Minister of Defense) presented a special award to Justice (Retd.) Muhammad Taqi Usmani in recognition of his lifetime service and achievement in Islamic Finance at the occasion of International Islamic Finance Forum, Dubai, which is one of the biggest events in Islamic Finance Industry.
Dr. Abdul Sattar Abu Ghuddah

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Dr. Abdul Sattar Abu Ghuddah is the Shariah Advisor and Director, Department of Financial Instruments at Al-Baraka Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law from Al Azhar University Cairo, Egypt. He is an active member of Islamic Fiqh Academy and the Accounting & Auditing Standards Board of Islamic Financial Institutions. Dr. Abdul Sattar teaches Fiqh, Islamic studies and Arabic in Riyadh and has done a valuable task of research and compiling information for the Fiqh Encyclopedia in the Ministry of Awqaf and Islamic Affairs, Kuwait. He has been a member of the Fatwa Board in the same Ministry from 1982 to1990.
Sheikh Essam M. Ishaq

Born in Bahrain Sheikh Essam M. Ishaq graduated in Political Science from McGill University, Montreal, Canada. Currently he is teaching Fiqh, Aqeeda and Tafseer courses in Bahrain. He holds the position of Shariah Advisor at Discover Islam, Bahrain. He holds position of Director in a number of Business and Educational institutions, which include Al Baraka Islamic Bank, Bahrain, Bahrain Development Bank, Bahrain, Muslim Educational Society, Bahrain etc.
Dr. Muhammad Imran Ashraf Usmani - Shariah Advisor

Dr. Muhammad Imran Ashraf Usmani is a M. Phil and Ph. D. in Islamic Finance and is a graduated as a scholar from Jamia Darul Uloom, Karachi, Pakistan. He has also completed the specialization course in Islamic Jurisprudence from Jamia Darul Uloom, Karachi, Pakistan. Currently he is involved in conducting training sessions for Meezan Banks staff in the area of Islamic finance and has been teaching several subjects of Islamic Fiqh since 1998 at Jamia Darul-Uloom, Karachi, Pakistan. Dr. Usmani has also authored various books on Islamic Shariah and especially his book Meezan Banks

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Guide to Islamic banking has been the guiding light in the area of IslamicBanking.

Management Team
Irfan Siddiqui Ariful Islam Najmul Hassan
President & Chief Executive Officer Chief Operating Officer General Manager Corporate & Business

Development Muhammad Shoaib Qureshi General Manager Commercial Banking Shabbir Hamza Khandwala Chief Financial Officer & Company Secretary Dr. Muhammad Imran UsmaniShariah Advisor Regional Manager - South Abdul Ghaffar Memon Regional Manager - Central Rizwan Ata Regional Manager - North Saleem Khan Head of Operations Arshad Majeed Head of Corporate & Structured Finance Mohammad Haris Head of Human Resources Mohammad Sohail Khan Head of Information Technology Faiz-ur-Rehman Head of Branch Expansion & Administration Munawar Rizvi Head of Consumer Finance Zafar Ali Khan

Muhammad Abdullah Ahmed Saleem Wafai Zia ul Hasan Muhammad Raza Ahmed Ali Siddiqui Omer Salimullah Javed Ahmed Shaikh

Head of Treasury & Financial Institutions


Head of Compliance & Organizational Learning Head of Internal Audit Head of Liability Products & Service Quality Manager Product Development & Shariah Compliance Manager Alternate Distribution Manager Risk Management

Credit Rating
Meezan Bank entity rating of A+ for long term and A-1 for short-term. Meezan Bank entity rating reaffirmed by JCR-VIS
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Alhamdolillah, Meezan Bank has reaffirmed its entity ratings at A+ for medium to long-term and A-1 for short-term. This rating was made by JCR-VIS Credit Rating Company, which has also set Meezan Banks outlook on medium to long-term rating as Stable. The rating is yet another milestone achievement in the Banks endeavor to be the Bank. Meezan Banks ratings are based on its shareholding with world-renowned financial institutions, pioneering role in the industry, strong management initiatives in continuously introducing various range of Islamic products. The Credit Rating agency JCR-VIS has expressed commendation to Meezan Bank managements ability to deploy funds in core banking assets, which reflected healthy growth trends last year.

Shareholding Structure
Shareholding Structure Pakistan Kuwait Investment Company (Pvt.) Limited Shamil Bank of Bahrain B.S.C Islamic Development Bank, Jeddah Noor Financial Investment Company, Kuwait Others Paid up Capital Rs. in million %

1,134 979 352 588 727 3,780

30 26 9 16 19 100 %

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Operations Department
Account Opening Department MEEZAN BANK Ltd. is offering following different accounts according to the needs of depositors.
Rupee Current Account

Meezan Bank offers Riba-free Current account in rupee for businessmen and individuals who want complete Islamic banking and fastest services together. Basic product features Minimum amount required to open account= Rs. 10,000 Riba Free COII Holders may open accounts without any minimum balance requirements Instant access to funds at any online branch. No restriction on withdrawals or number of transactions Bank balance certificates & duplicate statements of account Stop Payment & Hold Mail instructions 24/7 Card your ATM & Debit Card in one 24/7 Call Center with complete Tele-banking services Personal financial consultancy services Dedicated Banking hours from 9am to 5pm (Saturdays 9am to 12:30pm)
Rupee Saving Account

A unique bank account that offers the opportunity to earn Halal profits, while enjoying a range of added benefits. It can be opened with a minimum amount of only Rs.10, 000. The profit on this account is calculated and paid on a monthly basis, and comes with a variety of free benefits including personalized check books, no restrictions on transactions, priority banking and so on.
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Basic product features Minimum amount required to open account Rs. 10,000 Riba Free COII Holders may open accounts without any minimum balance requirements. Free Online Banking services at our branch network nationwide No restriction on withdrawals or number of transactions Bank balance certificates & duplicate statements of account Stop Payment & Hold Mail instructions 24/7 Card your ATM & Debit Card in one 24/7 Call Center with complete Tele-banking services Personal financial consultancy services Dedicated Banking hours from 9am to 5pm (Saturdays 9am to 12:30pm) Riba-Free Rupee Saving Account works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah. On agreeing to become an account holder, the customer enters into a relationship based on Mudarabah with Meezan Bank. Under this relationship, the customer is an Investor (Rab ul Mal), and the bank is the Manager (Mudarib) of the funds deposited by the customers. The bank allocates the funds received from the customers to a deposit pool. These funds from the pool are utilized to provide financing to customers under Islamic modes that include, but are not restricted to, Murabaha and Ijarah. The bank calculates the profit of the deposit pool every month. The Banks profit sharing ratio is 50% of Gross Income and Depositors profit sharing ratio is 50% of Gross Income, calculated after deducting costs and expenses directly incurred in deriving that Income.

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Karobari Munafa Account

Karobari Munafa is a savings account specifically tailored for large Corporate or GoP controlled entities. It allows customers to earn higher returns on surplus cash balances. It has no preset transaction limits and comes with a variety of free packaged benefits. Basic features of Karobari Munafa Account Profit will be calculated on a Daily Product Basis Minimum balance requirement for account opening is Rs. 1 Million. No restriction on deposits and withdrawals. Free facilities: cheque books and pay orders. Dedicated account / relationship manager.

Riba-Free Karobari Munafa Account works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah. On agreeing to become an account holder, the customer enters into a relationship based on Mudarabah with Meezan Bank. Under this relationship, the Customer is an Investor (Rab ul Mal), and the Bank is the Manager (Mudarib) of the funds deposited by the customers. The bank allocates the funds received from the customers to a deposit pool. These funds from the pool are utilized to provide financing to customers under Islamic modes that include, but are not restricted to, Murabaha and Ijarah. The bank calculates the profit of the deposit pool every month. The Banks profit sharing ratio is 50% of Gross Income and Depositors profit sharing ratio is 50% of Gross Income, calculated after deducting costs and expenses directly incurred in deriving that Income.

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Meezan Providence Account

A long-term investment product specially designed to cater to the needs of corporate and business concerns for purposes of investing their Provident, Pension and Gratuity Funds. As any prudent investor, your main concerns would be total security along with the best returns possible, especially as these funds are a trust from your employees and one that bears an important responsibility. Meezan Providence rests on the well known and solid financial strength of Meezan Bank, which has a strong and credible balance sheet with excellent operating profitability, including a capital adequacy ratio that has placed the Bank at the top of the industry, a long-term entity rating of A+, and a short-term entity rating of A1. Furthermore, our sterling track record shows consistently beneficial and highly competitive returns for our broad range of investors. Finally, comes the benefit of truly Halal returns, a benefit you may not have had the opportunity to enjoy before and one that you can now pass on to your employees, many of whom would be grateful for such an opportunity. Riba-Free Meezan Providence Certificate (MPC) works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah. On agreeing to become a MPC holder, the customer enters into a relationship based on Mudarabah with Meezan Bank. Under this relationship, the Customer is an Investor (Rab ul Mal), and the Bank is the Manager (Mudarib) of the funds deposited by the customers. The bank allocates the funds received from the customers to a deposit pool. These funds from the pool are utilized to provide financing to customers under Islamic modes that include, but are not restricted to, Murabaha and Ijarah.
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The bank calculates the profit of the deposit pool every month. The Banks profit sharing ratio is 50% of Gross Income and Depositors profit sharing ratio is 50% of Gross Income, calculated after deducting costs and expenses directly incurred in deriving that Income. Key Features A 100% halal investment in strict compliance with Shariah. High Returns. Long-term security ensured. Minimum investment amount: PKR 1,000,000 Available tenures of 2, 3, 5 and 7 years. Pre-mature withdrawal options available. Eligibility Criteria 1 2 To have a registered or unregistered Employee

Provident/Gratuity/Pension Fund. Have operations based in Pakistan.

Monthly Mudarabah Certificate

RibaFree Monthly Mudarabah Certificates is a flexible investment product which has been designed to give you a monthly return which is Halal. The minimum investment required is only Rs. 100,000 and you receive profit for each complete month of investment with the Bank. Riba-Free Monthly Mudarabah Cetificater (MMC) works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah. On agreeing to become a MMC holder, the customer enters into a relationship based on Mudarabah with Meezan Bank. Under this relationship, the Customer is an Investor (Rab ul Mal), and the Bank is the Manager (Mudarib) of the funds deposited by the customers.
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The bank allocates the funds received from the customers to a deposit pool. These funds from the pool are utilized to provide financing to customers under Islamic modes that include, but are not restricted to, Murabaha and Ijarah. The bank calculates the profit of the deposit pool every month. Profit is distributed at the Gross Income level. The Gross Income is calculated after deducting costs and expenses directly incurred in deriving that Income. Gross income of the deposit pool is shared between the Bank (Mudarib) and customers (Rab ul Mal) on the basis of a pre-determined profit sharing ratio announced at the beginning of the period. The Banks profit sharing ratio is 50% of Gross Income and Depositors profit sharing ratio is 50% of Gross Income. The profit is distributed among the account holders on the basis of predetermined weightages, announced at the beginning of the month, based on their respective category/tiers. The profit rate, so calculated, is applied to all investments, which mature between the period starting from the 1st day of each month to the last day of the month. At the end of the month, the Bank may unilaterally reduce its profit sharing ratio for the benefit of depositors. In case of a loss, as per the rules of Mudarabah, the deposit pool shall bear the loss in the ratios of investment of depositors. The weightages used for profit calculation of MMC are in the following tiers Rs. 100K up to Rs. 4.99 Mn Rs. 5.00 Mn up to Rs. 9.99 Mn Rs. 10 Mn up to Rs. 49.99 Mn Rs. 50 Mn up to Rs. 99.99 Mn Rs. 100 Mn up to Rs. 499.99 Mn
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Rs. 500 Mn & above Additional Benefits A 100% halal investment in strict compliance with Shariah Monthly profit payment to your current or saving account with us Pre-mature withdrawal options available. Bank balance certificates Free Online Banking services at our branch network nationwide Dedicated Banking hours from 9am to 5pm (Saturdays 9am to 12:30pm) 24/7 Call Center with complete Telebanking services Personal financial consultancy services

Dollar Saving Account

With a minimum of only $100 you can open a Dollar Saving Account with us under a Mudarabah arrangement that is strictly in conformity with the principles of Islamic Shariah. The return earned on the Mudarabah pool is calculated every month and the profit ratio for all investors is declared at the beginning of the month. If you maintain a minimum average monthly balance of $ 500, you shall be eligible to receive profits that shall be disbursed to you every month. Riba-Free Dollar Saving Account works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah. On agreeing to become an account holder, the customer enters into a relationship based on Mudarabah with Meezan Bank. Under this relationship, the customer is an Investor (Rab ul Mal), and the bank is the Manager (Mudarib) of the funds deposited by the customers. The bank allocates the funds received from the customers to a foreign currency Deposit pool. These funds from the pool are invested under Islamic modes that include, but are not restricted to, Murabaha, Sukuk and Ijarah.
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The bank calculates the profit of the deposit pool every month. The Banks profit sharing ratio is 50% of Gross Income and Depositors profit sharing ratio is 50% of Gross Income, calculated after deducting costs and expenses directly incurred in deriving that Income. Additional Benefits Personalized cheque books No restriction on withdrawals or number of transactions. Call center facilities Monthly profit payment Taking stop payment instructions Taking hold mail instructions Issuance of duplicate statement of account Personal financial consultancy services
Dollar Mudarabah Certificate

The Riba-Free Dollar Mudarabah Certificate (DMC) works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah. On agreeing to become a DMC holder, the customer enters into a relationship based on Mudarabah with Meezan Bank. Under this relationship, the customer is an Investor (Rab ul Maal), and the Bank is the Manager (Mudarib) of the funds deposited by the customers. The Bank allocates the funds received from the customers to a deposit pool. These funds from the pool are utilized to provide financing to customers under Islamic modes that include, but are not restricted to, Murabaha and Ijarah. The bank calculates the profit of the deposit pool every month. The Banks profit sharing ratio is 50% of Gross Income and Depositors profit sharing ratio is 50% of Gross Income, calculated after deducting costs and expenses directly incurred in deriving that Income.
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The profit is distributed among the DMC holders on the basis of predetermined weightages, announced at the beginning of the month, based on their respective category/tiers. These weightages are also available on the website or can be obtained upon request. The Bank at time of profit declaration, at its sole discretion may give additional profit to the customers from its own profit share. In case of a loss, as per the rules of Mudarabah, the deposit pool shall bear the loss on a pro rata basis.
Meezan Bachat Account

Meezan Bachat Account is a unique saving account that provides high monthly returns with fiexibility to withdraw savings if needed.Thus Meezan Bachat Account offers higher expected rate of return with the same convenience and service of a regular savings account. Meezan Bachat Account works under the principles of Mudarabah and is strictly in conformity with the rules of Islamic Shariah. On agreeing to become an account holder, the customer enters into a relationship based on Mudarabah with Meezan Bank. Under this relationship, the customer is an Investor (Rab ul Mal), and the bank is the Manager (Mudarib) of the funds deposited by the customers. The bank allocates the funds received from the customers to a foreign currency Deposit pool. These funds from the pool are invested under Islamic modes that include, but are not restricted to, Murabaha, Sukuk and Ijarah. The bank calculates the profit of the deposit pool every month. The Banks profit sharing ratio is 50% of Gross Income and Depositors profit sharing ratio is 50% of Gross Income, calculated after deducting costs and expenses directly incurred in deriving that Income.

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The profit is distributed among the account holders on the basis of predetermined weightages, announced at the beginning of the month, based on their respective category/tiers. The profit rate, so calculated, is applied to all investments, which mature between the period starting from the 1st day of each month to the last day of the month. At the end of the month, the Bank may unilaterally reduce its profit sharing ratio for the benefit of depositors. In case of a loss, as per the rules of Mudarabah, the deposit pool shall bear the loss in the ratios of investment of depositors. If someone maintain a minimum balance of Rs.25,000/- he shall be eligible to receive higher profits. The higher his balance,the higher the profit inaccordance with minimum balance tiers given on the Banks website. He receive profit even his balance falls below Rs.25,000/- in any one month. Profit is credited to his account every month and is calculated with reference to the minimum balance maintained in the account during the preceding month. Key Features A 100% halal investment in strict compliance with Shariah. High expected rate of return. Riba-free profit paid every month. Minimum balance for account opening is Rs.25,000/Maximum balance limit for getting highest profit rate is Rs.1,000,000/Waiver of application fee for Car Ijarah & Easy Home for account with minimum balance of Rs.500,000/Access your account from any Meezan Bank branch in Pakistan using online banking services. Free 24/7 Card-ATM & Debit Card in one.

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Saving with Meezan Bank is secure

Meezan Bank is a A+ rated public listed company that is quoted on the Karachi Stock Exchange. The activities of the Bank are governed by the State Bank of Pakistan and its shareholders are world-renowned financial institutions comprising: Pak Kuwait Investment Company (Pvt.) Ltd. Shamil Bank of Bahrain E.C. Islamic Development Bank, Jeddah Kuwait Auqaf Public Foundation Documents Required to open an account
A. For Salaried Class

Copy of NIC. Job proof Bank statement


B. For Business person

Copy of certificate of incorporation. Memorandum and articles of Association (Complete details of business) Copy of Board Resolution. (Authority that decides which bank is used for transaction). Certificate of Commencement of business. (Complete information about the staring of business and the registration of business) Copy of NIC of the Directors. Latest copy of Form 29. (Detail of Employees)
C. For Partnership

Partnership Deed (certified copy) NIC photocopies of all the partners. Partnership mandate for operation of Account signed by all the partners.
D. For Proprietorship

Copy of NIC NTN Certificate.


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Letter from proprietorship conforming Sole Proprietorship.

E. For Club /society Association

Copy of Rules/ laws Copy of Registration o List of Executive members/management committee/ Management Board etc. NIC of all members of the management board. After the account opening I issue the thank you letter to the customer and introducer banker. After two days we issue cheque book to the customer. Remittance Department The instruments of Remittance used by Meezan Bank Limited are given below: Pay Order (PO) Demand Draft (DD) Mail Transfer (MT) Transfer

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Pay Order (PO)

Pay Order is a bonafied instrument i.e. without any error. The Bank which issues the Pay Order must itself pay that Pay Order i.e. originating and responding branch will be same in case of Pay Order. Pay Order is an instrument alternative to cash. Pay Order is a safety instrument. Pay Orders usually issued to the account holders but can be issued to non-account holders as well. But this service will be much costly to the non-account holders. Pay Order usually used for intra-city transaction. When a customer comes for issuance of a Pay Order, he fills the pay order application form and attaches the cheque or cash with that application form and deposits it to the Cash counter. After depositing the Cheque or Cash, the applicant will came to the Remittance Officer and ask to issue Pay Order. Next, banks commission and nominal bank service charges are deducted according to the banks policy, either by cash or from Payers account. The required Pay Order is issued on the spot. Two authorized remittance officers of the branch signs on the Pay Order, with bank stamp. Applicants signature specimen is also taken on the back side of Pay Orders office portion. Now, Pay Order is ready for a business transaction.
When Pay Order Issued
Cash/Customer Account Banker Account Dr Cr

When a pay Order holder (beneficiary) comes with that Pay Order, the amount of Pay Order is paid to him. But if the Pay Order was crossed then the amount of Pay Order will be credited to Payees account only.
When Pay Order Paid
Banker Account Beneficiary Account . Dr Cr 30

Cancellation of Pay Order

Pay Order can be cancelled at any time before the payment. Lets have an example of cancellation of Pay Order. Suppose the Pay Order which was issued for business purpose and due to any reason business deal failed and during this process Pay Order was issued. Now, it is necessary for the applicant of the Pay Order to release the Pay Order from the beneficiary. If the Pay Order was in favor of single person or proprietor then there is no need to release it. But, if the Pay Order was in favor of a company or a business organization then it is necessary for the Applicant to release the Pay Order from that company or business organization. The concerned department must sign and affix rubber stamp on the back side of that Pay Order. After releasing the Pay Order from the beneficiary, the Applicant will fill a request form to cancel the Pay Order and the designated officer will make a following entry.
When Pay Order Cancelled Banker Account Customer Account Dr Cr

Demand Draft (DD)

Demand Draft is also a common instrument of transfer of funds or payment. Demand Draft can only be drawn on the same bank with all inter-cities branches. Demand Draft is very useful for inter-city transactions, and takes little time as of Pay Order. Demand Draft is an instrument, which the specified branch of the same bank will pay upon presentation of the Demand Draft by the Beneficiary. Following are some journalized entries.
When Demand Draft (DD) issued Cash / Customer A/c Head Office (H.O) A/c When Demand Draft Paid (Responding Branch) Head Office (H.O) A/c Dr 31 . Dr Cr

Demand Draft Payable A/c

Cr

Cancellation of Demand Draft

Demand Draft can also be cancelled by the Applicant. The procedure is same as of Pay Order to release the Demand Draft from the Beneficiary. When the Beneficiary releases the Demand Draft then, the Originating Branch will send Inter Branch Debit Advice (IBDA) to the responding Branch as well as to the Head Office (H.O) to cancel the transaction. All details will be written on the Inter Branch Debit Advice (IBDA) about DD number, amount, beneficiary, date of issue and original Demand Draft is in our Possession. And we will make following entry at the time of cancellation. When Demand Draft (DD) Cancelled
Head Office Account Customer Account Dr Cr

Mail Transfer (MT)

Mail Transfers are the instruments used for transactions within the same Bank with all branches. No matter that the branches which are transferring the funds are within a city or not, the Mail Transfer Mode is the common instrument used for such purposes. By Mail Transfers, funds are transferred from one account to another account. Payee does not get the funds directly by cash. When we transfer funds from our account to the other (drawn on branch) we send Inter Branch Credit Advice to transfer funds from our account to the drawn on branch. And when we cancel the Demand Draft we send Inter Branch Debit Advice to the drawn on branch for transfer of funds in our account from the drawing branch.
When Mail Transfer issued Cash /Customer Account Head Office Issuing Branch When Mail Transfer Received 32 . Dr Cr

Head Office - Responding Branch Payees Account

Dr Cr

Transfer

If the customer issuing the cheque and the customer depositing cheque to his or her account, both belongs to the same branch, then the procedure for transferring the funds from one account to other account through the cheque is known as Offset Clearing or Transfer Cheque. The customer depositing the cheque fills pay-in slip, attaches the cheque with the slip and presents to the Remittances Counter. The Remittance incharge sends the cheque to posting officer who transfers the amount from one account to other account on MIBS. Posted Stamp is engraved on the cheque and pay-in slip and sent back to Remittances Department. The Pay-in Slip works as credit voucher, while the Cheque works as debit voucher Transfer Stamp is engraved on the cheque and pay-in slip with the signature of Remittance In charge on both the instruments. The Remittances In-charge records the transaction on Daily Voucher Record Sheet and hence, the procedure is complete for offset clearing at the spot.
Customer A Customer B Dr Cr

Clearing and Collection Department


Clearing

Clearing means presentation of cheque or other Remittance tools within the city or NIFT area by the beneficiary of all the banks and their branches. Clearing is an intra-city procedure. In Clearing process, NIFT helps all the branches of the same city or within the NIFT area. Whenever a customer wants to deposit a cheque to his/her account, Pay-in-Slip must be filled with full details for customer, his or her account and depositing amount. This slip works as a credit voucher for the bank. The slip is attached
33 .

with the cheque, which works as a debit voucher and presented to the Clearing Officer. The Clearing Officer makes sure that: Cheque is from the bank within the city. The details of customer, his or her account and amount are correct. There is no cutting or over-writing on the cheque, and if there this is the The cheque is not post-dated or 6-months old. The bank accepts the

case, there is signature of Payer or Payee on cutting area. cheques of next date, as head office forwards these cheques to respective banks on next day for Clearing. Payees account number is written on the back side of cheque. The green Pay-in-Slip is filled in case of saving account; else blue slip Signature of Payee on the Pay-in-Slip.

is filled in case of current account. The Clearing Officer puts Clearing stamp of next working day and his or her signature on both customer and banks portion of Pay-in-Slip. If the cheque is crossed then the cheque must be stamped of Payees account Credited on the back. The customers portion of Pay-in-Slip is returned to customer, while banks portion is sent to posting officer. The cheques are recorded in the Register for Clearing, and then sent to head office for Clearing. The bank keeps record for all cheques sent to Clearing and the cheques that were received for Clearing by keeping all Pay-in-Slips and Cheque Return Memos with it. Cheque return Memo is attached with all returned cheques. Example Let the customer of Meezan Bank Limited Blue Area Islamabad deposits the cheque of Bank Alfalah Limited-Islamic Banking Jinnah Avenue Branch Islamabad. Meezan Bank Limited Blue Area Islamabad will credit the customers account and will send the cheque to Bank Alfalah Limited-Islamic Banking Blue Area Islamabad through NIFT. The process is explained below On sending Cheque for Clearing
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Head Office MBL-IBD MBL-IBD Customers A/c On SBP Adjustments through NIFT Head Office SBP Head Office MBL-IBD On receiving Cheque through Clearing BAL-IBD Customers A/c Head Office BAL-IBD On SBP Adjustments through NIFT Head Office BAL Head Office SBP Islamabad MBL-IBD Customers A/c Head Office MBL-IBD Dr

Dr Cr Dr Cr

At Bank Alfalah Limited-Islamic Banking Blue Area Islamabad Dr Cr Dr Cr

If cheque not cleared, reverse entry by Meezan Bank Limited Blue Area

Cr

The returned cheques are enclosed with a Cheque Returning Memo describing the reason why the cheque was returned from the responding branch.
Collection

Collection means presentation of cheque or other Remittance tools from outside the city or NIFT area by the beneficiary of all the banks and their branches. Clearing is an inter-city procedure. Bank accepts the cheques of other branches and banks outside city or NIFT area for deposit to the accounts of their customers. Such cheques are known as Cheque for Collection. The bank sends these cheques back to the originating bank or branch for collection which in turn verifies the cheque and debits the originating customers account. The same amount is credited in this customer account, with some nominal mail
35 .

expenses, and bank commissions deducted from the customer. The process of receiving cheque of other banks from customers and sending them for collection is known as Lodging. Lets take an example of collection of a cheque of Bank Alfalah LimitedIslamic Banking Lahore Branch; The customer of Meezan Bank Limited Jinnah Avenue Branch Islamabad deposits the cheque in his account. Then Meezan Bank Limited Jinnah Avenue Branch Islamabad will forward the cheque to its own branch in Lahore for collection from Bank Alfalah Limited-Islamic Banking Lahore Branch. At Meezan Bank Limited Jinnah Avenue Branch Islamabad On lodging the cheque for collection
Customers Liability - Bills Received, Bills for Collection (BRBC) Bankers Liability Bills Collected, Bills Receivable (BCBR) Dr Cr

At Representative Branch of Meezan Bank Limited Jinnah Avenue Branch Islamabad.


Head Office Representative Branch Banking Adjustments Dr Cr

At Bank Alfalah Limited-Islamic Banking Lahore Branch


Customers Account Head Office Responding Branch Head Office Responding Branch Head Office State Bank of Pakistan Dr Cr Dr Cr

At MBL-IBD Head Office on receiving credit advice from BAL Lahore, in turn credits the representative branch.
MBL-IBD Head Office State Bank of Pakistan Head Office Representative Branch Dr Cr

At Representative Branch of Meezan Bank Limited Jinnah Avenue Branch Islamabad (After Clearing from BAL)
Banking Adjustments . Dr 36

Head Office Representative Branch

Cr

At Meezan Bank Limited Jinnah Avenue Branch Islamabad (After collection from Lahore Branch)
Head Office Originating Branch Customers Account/Cash Dr Cr Dr Cr

Bankers Liability Bills Collected, Bills Receivable (BCBR) Customers Liability - Bills Received, Bills for Collection (BRBC)

This whole procedure takes approximately a week, and can take more if the cheque is not cleared by the responding branch due to any reason. Foreign Trade Department LC Verification Foreign Exchange Foreign Demand Draft (FDD) Foreign Telegraphic Transfer (FTT)

In this department we verify already issued opened LC. As documents of LC arrive to foreign trade officer, he verifies the specifications of goods and INCO terms, and sends recommendation for disbursement of funds. Daily foreign exchange rates also announced by the foreign trade officer with collaboration of head office.
Foreign Demand Draft (FDD)

Foreign Demand Draft is just like the Demand Draft. In Foreign Demand Draft, banks use correspondent arrangement with the foreign banks to provide the service to their valued customers. For these corresponding arrangements, the banks pay the correspondent fees to these banks and vice versa.
When Foreign Demand Draft (FDD) issued Customer Account Dr 37 .

NOSTRO Account NOSTRO Account Beneficiary/Payees Account Dr

Cr

When Foreign Demand Draft (FDD) paid -Corresponding Bank Cr

Credit Administration Department (CAD)


In CAD, I supervised and monitored all the operations and disbursement of the consumer finance consisting on the Home Musharaka, Car Ijarah and the Corporate Ijarah. Operation of all sorts of credit facilities i.e. fund based or not fund based. Car Ijarah, Pakistans First Islamic Car Financing As a step towards Meezan Banks mission to provide a one-stop shop for innovative value added Shariah compliant products, Meezan Banks Car Ijarah unit provides a car financing, based on the principles of Ijarah and is free of the element of interest. Car Ijarah is Pakistans first Interest Free car financing based on the Islamic financing mode of Ijarah (Islamic leasing). This product is ideal for individuals looking for car financing while avoiding an interest-based transaction. Meezan Bank Car Ijarah is a car rental agreement, under which the Bank purchases the car and rents it out to the customer for a period of 3 to 5 years, agreed at the time of the contract. Upon completion of the lease period the customer gets ownership of the car against his initial security deposit. Car Ijarah is unique and is approved by Meezan Banks Shariah Board Car Ijarah, designed under the supervision of Meezan Banks Shariah Supervisory
Board, is unique to car leasing facilities provided by other banks.

Rights & liabilities of Owner v/s User:

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An Islamic Ijarah is an asset-based contract, i.e. the Lessor should have ownership of the asset during the period of the contract. Under Islamic Shariah, all ownership related rights and liabilities should lie with the owner while all usage-related rights and liabilities should lie with the user. A conventional lease contract does not distinguish between the nature of these liabilities and places all liabilities on the user of the asset, contradictory to Islamic Shariah. Under Ijarah, all ownership-related risks lie with the Bank while all usage related risks lie with the user, thus making the Lessor the true owner of the asset and making the income generated through the contract permissible (Halal) for the Bank. Continuation of lease rentals in case of total loss or theft of vehicle: If the leased vehicle is stolen or completely destroyed, the conventional leasing company continues charging the lease rent till the settlement of the Insurance claim. Under the Islamic system, rent is consideration for usage of the leased asset, and if the asset has been stolen or destroyed, the concept of rental becomes void. As such, in the above-mentioned eventualities, Meezan bank does not charge the lease rental. Takaful instead of Insurance (where available): Legally (in accordance to Pakistans Law and Regulations), it is required for all leasing entities to insure the leased assets. As such, Meezan Bank insures its leased assets. However, our Ijarah Agreement clearly states that Meezan bank will use conventional Insurance only as long as Takaful, which is Islamic product for insurance is not available. As soon as Takaful becomes available in Pakistan, Meezan Bank will convert to Takaful and discontinue using conventional Insurance. Currently MBL is insuring its vehicle through Takaful in Karachi and as soon as Takaful is available in other cities we will switch to Takaful.
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Permissibility for Penalty of Late Payment of Rent under Islamic Shariah: In most contemporary financial leases, an extra monetary amount is charged, in their income, if the rent is not paid on time. This extra amount is the considered as Riba and is Haram. Under Ijarah, the Lessee may be asked to undertake, that if he fails to pay rent on its due date, he will pay certain amount to a charity, which will be administered through the Islamic Bank. For this purpose the bank maintains a charity fund where such amounts may be credited and disbursed for charitable purposes. Key Features of Car Ijarah No application fee Ease of acquiring any new locally assembled car No upfront Insurance Payment No advance Rental Available in tenures of 3, 4 and 5 years Minimum security deposit as low as 15%

Car Ijarah also features Used Vehicles

In addition to our leasing of new cars, Meezan Bank also provides the unique opportunity of leasing second hand, locally assembled, vehicles as well. This feature is specifically designed as a highly economical option. The Used Car Ijarah facility is made available at a minimum-security deposit as low as 20%. Used Car Selection Criteria The second hand car selected should be from its first owner. The vehicle should not be older than 5 years. The minimum security deposit for a vehicle up to 2 years of age is 20%, while minimum security deposit for a vehicle over 2 years of age is 30%. At the time of termination of the Ijarah agreement, the vehicle should not be more than 8 years old. This means that if a car is 5 years old, the Car Ijarah
40 .

tenure is not more than 3 years and if its 4 years old, the tenure may be set for a maximum 4 year term. This facility is for locally manufactured cars of Suzuki, Toyota, Honda & the new model of Santro only. Second hand vehicles selected should not be worth more than Rs. 1 million and less than Rs. 250,000/-. Meezan Bank will have the vehicle valued by an independent valuation company accordingly.
Documentation and Eligibility for Car Ijarah

If you meet the requirements and wish to apply for Car Ijarah, simply fill out an application form and bring the following documents to your nearest Meezan Bank branch.
Individuals/Self-Employed Professionals/Businessmen

1 Copy of NIC 2 Two recent passport sized photographs 3 Recent Utility Bill (Electric/Gas/Water) received at the residential address 4 Last Six Month Bank Statement 5 Last Six Month Bank Statement of Business (for Businessmen) 6 Certified/Original copy of Recent Pay slip (for Salaried Individuals) 7 Copy of Rent Agreement (if applicable)

Easy Home Finance It is Islamic Financing on a Diminishing Musharakah basis.There are four options available for clients according to their ease.
Buying a Home is Easy & Halal!
Financing up to 85% of the appraised value or 41 .

Up to Rs. 40 million, with a financing tenor of up to 20 years.

Building a home is Easy & Halal!


Financing up to 70% of the appraised value or Up to Rs. 40 million, for a tenor of up to 20 years.

Renovating your home is Easy & Halal!


Financing up to 30% of the appraised value and Financing tenor of up to 15 years.

Replacing your existing Mortgage is Easy & Halal!


Halal and totally flexible financing, Financing up tp to Rs. 40 million and a tenor of up to 20 years.

Eligibility Criteria
Category Citizenship Age Customer / Applicant Eligibility Criteria Pakistani, Non Resident Pakistanis** Primary / Basic applicant Co-applicant 25 years to 65* years 21 years to 70* years *Maximum age at the time of maturity Single (Primary) or/and Dual (Co-applicant*) applicants *Co-applicant must be a member of the immediate family (Spouse / Personal References Parents and Children). Two personal references* not living with the customer, for verification purposes *Relative or office colleague Permanent job with a minimum 2 year continuous work history in the same industry / field. Self-Employed / Business Person Income Salaried Minimum 3 years in current business / industry Minimum Gross Salary of PKR 20,000 per month.* 42 .

Employment/Business Salaried

Minimum Gross Income of PKR Self-Employed / Business Person 50,000 per month.* *Only 50% of the Co-applicants income may be aggregated for financing limit enhancement.

Eligibility Criteria for Non-Resident Pakistanis


Particulars Eligibility

Citizenship Segment Co-applicant for income clubbing Age

Pakistani Salaried Class only 50 % income of Parents, Spouse & Children

Primary / Basic applicant Co-applicant 25 to 60* years 25 to 65* years *Maximum age at the time of maturity Income Gross equivalent of PKR 100,000/- & above Employment A minimum of 2-years regular experience in same industry; Tenor a minimum 1-year employment in an existing job in the same country. Status Permanent & Contractual Company Eligibility Multinational Co. & well established Local Corporate Groups Financing Tenor 3 to 20 Years Financing Range PKR 300,000 to PKR 10Million For Easy Builder and A responsible (local) person must be appointed by the customer to look Renovation Products after construction on musharakah property/land.

Additional Required Documents for Non-Resident Pakistanis


Particulars Verification Employment Letter Verified by Pakistani Embassy abroad. Salary Slip Verified by Pakistani Embassy abroad. Last 6 months bank Verified by Pakistani Embassy abroad. statement Employment Contract with Photocopy required Co. Passport Photocopy required VISA Proof Photocopy required

Procedure
Step 1: Application Form & Initial Payment Submit the filled & signed application form to Meezan Bank. Submit the required cheque for Processing Fee & External Agency costs. Step 2: Required Documents

Personal Information

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o Copy of NIC o Copy of Co-Applicants NIC (if applicable) o 2 passport-sized colored Photographs of Applicant / Co-Applicant o Copy of Rental Documents (if applicable) o Copy of last paid Utility Bills (Electricity/Gas/Telephone) o Borrowers Basic Fact Sheet o Bank Statement - last 6 months o Copy of recent Credit Card Bills Income Information* o Original or certified copy of recent Pay Slip o Employers Certificate including Tenor/Designation/Salary o Bank Statement of Business - last 6 months (if applicable) o Copy of Management Accounts (if applicable) Business/Professional Information o 3 years proof of business (e.g. Tax Return / Bank Certificate) o Partnership Deed (in case of Partnership) o Professional Degree / Certificate o Professional Association Membership Certificate / Practice License If you have selected the property to buy or want financing for construction / re-placement / renovation o Property Title Documents (copies at initial stage & original before disbursement)
* "In the case of a Co-Applicant, all income related documents will also be required."

Step 3: Address Verification Meezan Bank will verify your residential & office addresses and the addresses of references submitted. Step 4: Income Estimation For Businessman / Self Employed professionals Meezan Banks External Consultant will contact you to determine your monthly income to help you in obtaining the maximum possible financing from the Bank. Kindly provide them all the required details. For Salaried Individuals Meezan Bank will verify the income with your employer. Step 5: Legal opinion Meezan Bank will obtain a legal opinion on the property documents provided by you. Step 6: Property Valuation Meezan Banks appointed Valuation Agency will evaluate the property to determine its market value Step 7: Credit Approval & Sanction Letter After you have satisfactorily fulfilled all Meezan Banks credit requirements, we will give you a conditional sanction letter. Step 8: Account Opening After approval of the case, you are required to open an account at Meezan Bank and submit a filled Account Opening Form. Step 9: Signing of House Finance Agreement After completion of the above steps and approval of your case, you are required to come to Meezan Bank for signing of the Islamic House Finance Agreement and other legal documents In Home Construction / Renovation / Replacement Cases Original property documents will be handed over to the Bank at this stage. Step 10 Transfer of Property & Disbursement In Home Buying / Renovation Cases A Meezan Bank officer & our authorized lawyer will accompany you & the seller of the property to the appropriate Bank or Registrars Office for Property Transfer. Original Property Documents will be handed over to the Lawyer who, after verification of the documents, will

44 .

hand over the Pay Order to the Banker or Seller and will then complete the legal formalities on Meezan Banks behalf.

Monthly Rent Meezan Banks share in Monthly rent = Monthly Rent * Meezan Banks Invest. in property Total Value of the property Musharaka Units Cost of one Musharaka Units = Meezan Banks total Musharaka Inv. No. Of Months (Tenor) My duties in Credit Administration Department. The processing and completion of documentation.. After the approval all-collateral, securities and charge documents from the customer and ensure its completion. The physical control and safe custody of collateral, and charge documents is vested in CAD. Ensure the banks approved valuator completes the valuation of the property and the original report is obtained. Ensure that all documents mentioned in the legal opinion are obtained to the entire satisfaction of the lawyers.

CORPORATE BANKING:
MEEZAN BANK uses following Shariah complient modes in corporate banking. MURABAHA: Murabaha is one of the most commonly used modes of financing by Islamic Banks and financial institutions. Definition Murabaha is a particular kind of sale where the seller expressly mentions the cost of the commodity purchased, and sells it to another person by adding some profit thereon. Thus, Murabaha is not a loan given on interest; it is a sale of a commodity for cash/deferred price.

45 .

The Bai Murabaha involves purchase of a commodity by a bank on behalf of a client and its resale to the latter on cost-plus-profit basis. Under this arrangement, the bank discloses its cost and profit margin to the client. In other words rather than advancing money to a borrower, the bank will buy the goods from a third party and sell those goods to the customer at an agreed price.
Difference between Murabaha and Sale:

A simple sale in Arabic is called Musawamah -a sale without disclosing or referring to the cost of goods sold. However when the cost price is disclosed to the client, it is called Murabaha. A simple Murabaha is one where there is cash payment and MurabahaMuajjal is one on deferred payment basis.
Basic rules for Murabahah

Following are the rules governing a Murabahah transaction: 1. The subject of sale must exist at the time of the sale. Thus anything that does not exist at the time of sale cannot be sold as this makes the contract void. 2. The subject matter should be in the ownership of the seller at the time of sale. If the seller sells something that he himself has not acquired, then the sale becomes void. 3. The subject of sale must be in physical or constructive possession of the seller when it is sold to another person. Constructive possession means a situation where the owner has not taken physical delivery of the commodity yet it has come into his control and all rights and liabilities of the commodity are passed on to him including the risk of its destruction. 4. The sale must be instant and absolute. Thus a sale attributed to a future date or a sale contingent on a future event is void. 5. The subject matter should be a property having value in the eyes of Sharia. 6. The subject of sale should not be a thing used for an un-Islamic purpose. 7. The subject of sale must be specifically known and identified to the buyer. For Example, A owner of an apartment building says to B that he will sell an apartment to B. Now the sale is void because the apartment to be sold is not specifically mentioned or pointed to the buyer. 8. The delivery of the sold commodity to the buyer must be certain and should not depend on a contingency or chance. 9. The certainty of price is a necessary condition for the validity of the sale. If the price is uncertain, the sale is void.
46 .

10. The sale must be unconditional. A conditional sale is invalid unless the condition is recognized as a part of the transaction according to the usage of the trade. ISTISNA: Istisna is a sale transaction where a commodity is transacted before it comes into existence. It is an order to a manufacturer to manufacture a specific commodity for the purchaser. The manufacturer uses his own material to manufacture the required goods. In Istisna, price must be fixed with consent of all parties involved. All other necessary specifications of the commodity must also be fully settled. Istisna as a mode of financing Istisna may be used to provide financing for construction of house. If the client owns a land and seeks financing for the construction of a house, the financier may undertake to construct the house on the basis of an Istisna. If the client does not own the land and wants to purchase that too, the financier can provide him with a constructed house on a specified piece of land. Istisna may also be used for similar projects like installation of an air conditioner plant in the clients factory, building a bridge or a highway. The modern BOT (buy, operate and transfer) agreements may be formalized through an Istisna agreement as well. So, if the government wants to build a highway, it may enter into an Istisna contract with the builder. The price of Istisna can be the right of the builder to operate the highway and collect tolls for a specific period.

47 .

SALAM: In Salam, the seller undertakes to supply specific goods to the buyer at a future date in exchange of an advanced price fully paid at spot. The price is in cash but the supply of purchased goods is deferred.
This mode of financing can be used by the modern banks and financial institutions especially to finance the agricultural sector.

Purpose of use:

To meet the need of small farmers who need money to grow their crops

and to feed their family up to the time of harvest. When Allah declared Riba haram, the farmers could not take usurious loans. Therefore Holy Prophet allowed them to sell their agricultural products in advance.

To meet the need of traders for import and export business. Under

Salam, it is allowed for traders to sell the goods in advance so that after receiving their cash price, they can easily undertake the aforesaid business. Salam is beneficial to the seller because the price is received in advance and it is also beneficial to the buyer because the price in Salam is lower than the price in spot sales. The permissibility of Salam is an exception to the general rule that prohibits forward sale and therefore it is subject to strict conditions.

48 .

Details of Duties that I performed during my Internship at Meezan Bank.


I have done the following duties in different departments of the Meezan Bank and this internship is really a treasure for my career.

1st & 2nd Week; Account Opening Department:

Deal with customer who came to open an account Brief the types of accounts that the Meezan bank offering.

Convince people about the Islamicity of the Meezan bank account that how the banks account free from interest. Collect all the required documents from the customer. Gathered all the information that is required for account opening i.e. Call Nadra Verification Source of income, Utility bills, Introducer of the customer who came for account opening.

CNIC,

Signed the account opening form customer, introducer, Manager Operations and Branch Manager. Obtain cheque book requisition signed by the customer. Send letter of thanks. Call the customer for cheque book collection after two days.

3rd Week: Remittances;


Fill up the application to issue the Pay Order Attach the payment cheque or cash deposit slip with the application form The data is entered in already set format of pay order in computer and pay order print out is taken. To take sign on the pay order from operation manager and Operation Incharge. The original copy of the pay order is given to the customer. Take receiving signature on the photocopy of original pay order.

4th & 5th week: Car Ijarah Department


Explain the differences between conventional leasing and Meezan Banks Car 49 .

Ijarah to the customer and told him the advantages of Meezan Banks Car Ijarah. Deal with the customers i.e. check their desirability Explain the relative plans to the customers according to their desirability. Collect the relative documents from the clients which are required to forward the case. Check Eligibility; Net take income must be three times of rental. Net saving is 150% of rental. In case of other loans and cards all monthly payments combined not to exceed 50% of net income. Data check and CIB both must be clear. Address Verification. Complete Documentation. Processing Charges New Vehicles o New vehicles upto Rs 999000/- 2500 o New vehicles above Rs 999000/- 3500 Used vehicles o Less then 1 million (999,999/-) 2500 o Valuation 1500 o B/W 1 million and 1.5 million 3500 o Valuation 1500 Documents Required 2-photograph 2-reference CNIC 2- Paid utility bills. NTN Business Proof Last six month bank statement. Procedure Before Case Approval Completed and signed application form. List of required documents. Copy of CNIC. Two passport size photos. Copy of rental documents. Copy of utility bills. Last sixth month bank statement. 50 .

Copy of salaried slip. Address verification. Before Disbursement Post dated Cheques of the same account whose statement is submitted. Agreement to lease. Basic fact sheet. CIB undertaking. Disbursement note. Disbursement Car purchase order. Pay order copy. Dealer commissions pay order copy. At the time of Delivery Insurance letter and fax confirmation. Insurance letter with stamp of risk covered. Car registration receipt. Lease agreement. Undertaking to purchase. DP note. Authority to repossess. Delivery order copy. Driving authority letter copy. After Delivery Duplicate key. Original registration receipt. Delivery order acknowledgment. Insurance policy. Registration charges payment. Premium payment receipt. Registration book. Documents delivered to customer Driving Authority letter. Insurance policy. First page of registration book.

6th to 8th Week; Credit Administration Department.


My duties. The processing and completion of documentation. 51 .

After the approval all-collateral, securities and charge documents The physical control and safe custody of collateral, and charge Ensure the banks approved valuator completes the valuation of the Ensure that all documents mentioned in the legal opinion are Present rental cheques for collection of rental.

from the customer and ensure its completion. documents is vested in CAD. property and the original report is obtained. obtained after the entire satisfaction of the lawyers-documents are signed.

Conclusion
The internship in Meezan Bank Limited is really a treasure for my career. It gives me an opportunity to know more about the Practice of Islamic Banking and Finance. This internship provides me a great opportunity to see my theoretical knowledge of Islamic banking in practical shape. Initially I had the views that there is nothing Islamic in the bank due to a lot of reasons. But with the passage of time as I came to know the actual processing of the bank, most of my confusions got clear. For example, initially I had the view that how the bank is issuing Letter of Guarantee which is an act of Donation but then I came to know that they charge only service charges from the customers which do not vary with the amount of the letter of guarantee. Banks timing is good, everybody come in time in the bank stay till end of the day. The day starts with the recitation of Holy Quran and prayer. Mostly staff offers prayer. Finally I pray to ALLAH to help us in the development of Islamic Banking and Islamic Economy, so that we can get ride of this heinous interest based economy. (AMIN) THE END
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