MEEZAN BANK

GROUP MEMBERS: Bakhtawar Saba (11280),

AMNA ZAHID (15134) Mehk Merchant (14451),
Rafea Irfan (14121),
FAREESEH ASKARI (14406) Shehr Bano (14389),
Warda Masood (14507)
FATIMA FAISAL (13161)
BANKING SECTOR IN PAKISTAN

• The profitability of the Banking sector is expected to grow by 60% to Rs. 136.036 billion
because of the increase in interest rate which has reversed the contraction cycle of net
interest margin in the previous year. Banking sector’s growth was stagnated in the past
years because of regulatory changes such as past expansion costs, super and banking
transition tax, overseas penalties and deposit insurance
ISLAMIC BANKING IN PAKISTAN

• Interest free loans.

• Profits through equity sharing.
• Some prohibited investments.
• Not in favor of extreme capitalism.
• Prohibits exploitation of every sort.
• Focus on bigger perspective, that is, serving the society
PERFORMANCE OF ISLAMIC BANKING

• 15% of financial market in 2016, (Khaleej Times)

• Growth of these banks was 23.3% which totaled Rs. 1.070 trillion. (SBP)
• The market share of Islamic banking assets was 10.4 per cent and deposits were 11.6 per
cent.
• The ratio analysis of these banks are better but they have:
• Less investment opportunities.
• Bound to invest in sharia approved projects.
• Lack lending opportunities as they mostly rely on equity for loans.
PROBLEMS OF BANKING SECTOR

 Nationalized commercial banks (NCBs) had problems of overstaffing, bad customer service and unprofitable
branches.
 NCBs along with specialized banks had a high ratio of non-performing loans.
 The industry was taxed at high rates- affected profitability
 Banks were undercapitalized, poorly managed with a poor distribution network.
 Lack of support of agriculture, small and medium enterprises and housing sectors.
 The middle class and low income group had inadequate access to bank credit.
 Constricted variety of products and had not expanded to consumer and mortgage financing.
 Lack of quality human resources, weak internal controls, increased administrative costs and meddling of unions in
decisions making process
PROBLEMS OF ISLAMIC BANKS

 Legal Framework and Support.

 Absence of Liquidity Instruments
 Lack of regulation and Control of Islamic Financial Institutions
 Lack of Standardization in:
 Public awareness
 Lack of Training of Banking Professionals in the Use of Islamic Financial Products
 Institutionalization of Recovery of Debt
 Problems of Investment in Long Maturation Projects

 Financial Products Yielding Stable Income Flows

 Risk Management

 Limited Product Offerings with Limited diversity.

HISTORY OF MEEZAN BANK

 In 1997, Meezan bank came into existence with the motto of pursuing pure Islamic banking, and for that, it
launched the Ribe free certificate of investment. At that time, it was named as Al Meezan investment Bank.
 In 2002, it started to provide the services of a full commercial bank. And for that it changed its name to Meezan
Bank. It was issued the license of first Islamic Bank by State Bank of Pakistan. In the same year, it launched Riba
free car financing.
ABOUT MEEZAN BANK

• Meezan Bank is the first and the largest Islamic Bank of Pakistan
• Started operations in 2002. Currently has 650+ branches across Pakistan
• Services include 660 ATMs, visa and debit cards, internet and SMS banking and mobile
application.
• Has a dedicated shariah compliance and product development center
 Major clients of Meezan Bank
PSO, LUCKY GROUP, ATLAS GROUP, MANSHA GROUP, SITARA GROUP
 Major revenues and expenses
Main revenue stream comes from trade income and treasury operations. Major expenses include spending on branch
networks, branch maintenance, salaries to the employees and profit to depositors.
TYPES OF ACCOUNTS

 Works on Mudarbah basis

1. Riba free current accounts
 Banks liable to pay the money on demand. Minimum balance 1000 Rs.
2. Savings account
 Halal profits distributed based on balance
3. Karobari Munafa Account
 high profit savings account for large companies and GoP controlled entities
Meezan Bachat Account:
 Unique savings account that provides high monthly return with flexibility to withdraw savings if needed. Higher
the balance, higher the profit earned.
5. Meezan Business Plus
 This allows customers to conduct banking transactions while availing a wide range of free services
6. Labaik Savings Asaan
mudarabah based Deposit account is available in six months to twenty years plan for Umrah & Hajj
FINANCIAL PRODUCTS

 Murabah
It is a short term financing in which bank is the owner of the product and purchases it for the customer.
 Car Ijarah
This is Pakistan’s first Interest-free car financing. It is based on the Islamic financing mode of Ijarah (leasing). This
product is ideal for individuals who want to get interest-free financing for acquiring a new, used or imported car.
 Easy home financing:
Easy Home is a completely interest (Riba) free solution to home financing needs. The nature of contract is co-
ownership, not loan. Based on Musharakah
 Certificate of Islamic Investment
Mudarabah-based deposit product to invest for periods ranging from 3 months to 5 years and earn periodic Halal
profit.
WHY MEEZAN BANK IS SUCCESSFUL

 Expertise
 Strong distribution network
 Variety of funds
 Innovative solutions
 The People’s Choice
 Cause oriented
 “In next 5 to 10 years Meezan would be in the list of 5
top banks in the country InshaAllah. With it being the
first Islamic shariah complaint bank to play a major part
in the economy. Cashless trading and transaction will be
the new payment procedures, we already have our ADC
expertise to make the most of this new trend and
changing dynamics.” Says Interviewee
Despite great growth of the bank over the years, our detailed
PREDICTION: study tells that Islamic finance will never be able to replace
conventional finance or come equal to it in the coming decade
because of the following reasons:
 Limited organic growth
 Limited institutional and individual demand
 Lack of Trust