Meezan Bank

Secondary research and 1st interview analysis

Syeda Khushbakht Farrukh, Maheba Nasim,

MEEZAN BANK | MIP Muhammad Anas Siddiqui, Mariya Nazim
Table of Contents
5 Cs Model Analysis ......................................................................................................................................................................... 2
Company ...................................................................................................................................................................................... 2
Vision....................................................................................................................................................................................... 2
Mission .................................................................................................................................................................................... 2
Core Values ............................................................................................................................................................................. 2
Brief History ............................................................................................................................................................................ 2
Position in Market ................................................................................................................................................................... 3
Business Model ....................................................................................................................................................................... 3
Product .................................................................................................................................................................................... 4
Product Portfolio ..................................................................................................................................................................... 5
Channels of Banking ................................................................................................................................................................ 6
Customer ..................................................................................................................................................................................... 6
Promotion: ................................................................................................................................................................................... 7
Awareness Campaigns: ........................................................................................................................................................... 8
Word-of-mouth: ...................................................................................................................................................................... 8
Advertising: ............................................................................................................................................................................. 8
PR: ........................................................................................................................................................................................... 8
Collaborators ............................................................................................................................................................................... 9
Takaful Companies .................................................................................................................................................................. 9
State Bank of Pakistan ............................................................................................................................................................. 9
Educational and Research Institutes ....................................................................................................................................... 9
Telecom Service Providers ...................................................................................................................................................... 9
Hospitals and Charity Organizations ..................................................................................................................................... 10
Competitors ............................................................................................................................................................................... 10
Context ...................................................................................................................................................................................... 12
Political .................................................................................................................................................................................. 12
Economic ............................................................................................................................................................................... 13
Social ..................................................................................................................................................................................... 14
Technology ............................................................................................................................................................................ 14
Appendix A ...................................................................................................................................................................................... 15
Appendix B ...................................................................................................................................................................................... 16
Appendix C: Meezan Bank Questionnaire ..................................................................................................................................... 17
Appendix D: INTERVIEW TRANSCRIPT ............................................................................................................................................ 19
Meezan Bank Secondary Research and 1st Interview Analysis
5 Cs Model Analysis
Company
Meezan Bank was established and began its operations in 2002 as the first Islamic Bank in Pakistan. It
was set up to fill the gap of financial and banking services, which are compliant with the principles of
Islam and Shariah, and to help the Pakistani economy gain from the benefits of the principles of Islamic
Economic and Finance. The bank has been operating since with a goal of making Islamic Banking as the
banking of first choice for all customers. (Meezan Bank, 2015)

Meezan Bank is a publicly listed company with a capital base of 10 million. 90% of its shareholdings
belong to Noor Financial Investment Company, Pak Kuwait Investment Company and Islamic
Development Bank. Meezan Bank operates all over Pakistan (in 140 cities) with a network of more than
570 branches. It is the fastest growing bank in Pakistan It is led by President Irfan Siddiqui, the Board of
Directors and Islamic Shariah Supervisory Board. (Meezan Bank, 2015)

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.
(Meezan Bank, 2015)

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.
(Meezan Bank, 2015)

Core Values
Shariah-compliance, Integrity, Professionalism, Innovation, Service Excellence, Social Responsibility. Staff
that is committed, motivated and professionally trained and who are empathic to their customers
needs. (Meezan Bank, 2015)

Brief History
Meezan bank was initially an Investment Bank 16 years ago, with shareholdings from Kuwait. When
Credit Suisse was exiting Pakistan, they contacted State Bank and the president of Meezan Investment
Bank. They told the president that they have this license we can give to the investment bank. Meezan
Investment Bank was an Islamic bank so they wanted that any commercial bank that would be
established under them would also be established as an Islamic Bank. At that point there was no Islamic
bank in Pakistan. All the rules, regulations, policies, standards of Islamic banking were written by the
initial management and Shariah Supervisory board keeping in mind the limitations of Shariah. Credit
Suisse had three branches and Meezan Investment bank had one. That is how Meezan Bank began
operations as the pioneer in the Islamic Banking Industry. That was the start of the evolution of Islamic
banking Industry in Pakistan.

Position in Market
Meezan Bank is the first Islamic Bank in Pakistan and continues to enjoy the position of a pioneer and
leader in the industry. The market share of Islamic Banking in the overall banking industry is 13% while
being only 7.8% 5 years ago; Meezan bank enjoys a 55% share of this industry. It has total assets worth
PKR 531,850 Million, deposits worth PKR 471,821 Million and financing worth PKR 2017,569 Million.

JCR-VIS Credit Rating Company Limited, an affiliate of Japan Credit Rating Agency, has rated the Banks
short term products at A1+, the highest standard in short term rating, and the long-term entity rating at
AA making it the only Islamic bank with AA credit rating in the Islamic banking industry of Pakistan.
(Meezan Bank, 2015) The bank has also won multiple awards over the years as the Best Islamic Bank of
the Year by different organizations including Financial Times Ltd, CFA Society of Pakistan, Red Money
Group (Malaysia), First Pakistan Banking Awards and Asset Triple A.

Business Model
Product
Core Product
The core product of Meezan Bank is a replacement for conventional banking products and services and
conventional financial products and services. Keeping in Mind that Riba and Speculation is strictly
forbidden in Islam there has been a serious gap in the market for financial products and services and
banking products and services which comply with the rules of trade and finance established by Shariah.
Meezan Bank is the pioneer in providing Islamic solutions to the Pakistani Public through its vast
portfolio of Islamic financial and banking products and services.

Many banking consumers claim that Islamic banking products are the same as Conventional banking
products, merely using different names. Islamic banking products and conventional banking products
look the same on first glance, may even have the same rates, but conceptually and in nature they are
quite different. The ideology behind the products and rates of both are different.

Riba is forbidden in Islam. In light of this, when it comes to customers investing, the returns on Islamic
banking products are not fixed (theres no charging of money on money) but instead are dependent on
the profits earned over ventures and investments. While for the bank to avoid interests when customers
want financing of goods, they charge rent on/ mark up on sale of/margins on sale of goods, all of which
are allowed in Islam.

There is an emphasis on risk bearing by both parties, whereas conventional banks tend to avoid risk for
themselves by fixing rates. Of course there is an effort by the Islamic banks to keep the returns and the
mark up similar to that being charged by conventional banks to be profitable and competitive, but the
method, the channel is different. (Siddiqui, 2016)

Actual Product
The actual product is the large portfolio of financial and banking products and services that Meezan
bank offers to both its corporate and retail customers. This portfolio which initially began with Car Ijarah
Service has now expanded to a multitude of products and services catering to all kinds of financial and
banking needs of its customers, while adhering to the principles of Islam. These include products for
savings and investment, mobilization of funds from savers to entrepreneurs who need financing, general
utility services including transfer of funds, facilitation in international trades, consultancy services,
insurance services, safekeeping of valuables, and several other services for a fee. (Hanif, 2011)

Augmented Product/ Support Services

In order to compete with other Islamic Bank when it comes to customers who are devoted to using
Islamic Financial Services, and to compete with conventional banks when it comes to customers who are
indifferent between both types of banks, Meezan Bank has to improve its accessibility (through
increased number of channels) and provide exceptional support services along with its core products
and services.
Product Portfolio
Meezan Bank started out with a small portfolio consisting mainly of Car Ijarah Service. Since then it has
done extensive product development and market development and market penetration to reach its
present position as the Islamic Bank of first choice, providing all kinds of Banking and Islamic Services in
a Shariah Compliant manner. At present, the product portfolio (product mix) of Meezan Bank comprises
of several product lines which include accounts and certificates, consumer financing products and
services, corporate financing products and Services, investment banking products and services and
financial advisory services.

Each of these product lines are extensive in terms of length and depth. When it comes to the length of
each product line, the bank offers various services under each of these five categories. When it comes to
depth, each type of product/service in the product line has several variations to cater to the unique
needs of different types of customers. Following are major product lines offered by Meezan. To see the
various products and services being offered by Meezan Bank to its customers, refer to appendix A.

Accounts and Certificates

Meezan Bank provides both Saving Account and Current Account services to its consumers who want to
keep their money safe. In order to make these products Shariah compliant the return on these accounts
is not fixed but instead varies depending on the profit earned by the bank. For long term investment
needs Meezan bank offers Mudarabah Certificates as an alternative, where the return is dependent on
the profit, and the fee of the Mudarib is fixed in advance.

Consumer Products
Islamic Banks provide financing solutions for its customers for the purchase of homes, car and other
daily use appliances. This done through products like Car Ijarah, Bike Ijarah, Consumer Ease, Easy Home.
Meezan Bank provides remittance transfer services (Meezan Easy Remit) to its consumers, so they can
receive money from their family members earning abroad. Meezan Labbaik is a Hajj and Umrah product,
the primary objective of which is to facilitate Muslims who cant afford to do Hajj and Umrah in
performing their holy duty.

It is generally assumed that Insurance is Haram in Islam. However, an alternative to Conventional

Insurance called Takaful is also available and provided by Meezan Bank to its customers. Meezan
provides Takaful to our customers via third party companies like Pak-Kuwait Takaful and Pak Qatar
Takaful.

Corporate Products
The banks main focus is providing products to corporate customers; these are the customers who truly
experience banking on a day to day transaction basis. Meezan Bank provides both long term and short
financing options to corporations for all working capital requirements, liquidity requirements and capital
expansion requirements. It provides products for their trading needs, for imports and exports. It
provides guarantees for trade in form of LOCs.
Investment Banking and Advisory Services
Al Meezan Investment Management Limited is a subsidiary of Meezan Bank and provides Mutual Funds,
Equity Funds, Asset Management and Investment Banking products to its customers. Meezan also offers
financial advisory services to customers requiring complex financial transactions. It collaborates with
other Islamic banks to provide financing for large projects. It also helps corporation issue their Sukooks
to gain excess funds from publics. It provides underwriting services for companies wishing to launch
their shares. It offers corporate training for bankers and financial institutions who want to learn the
principles of Islamic Banking. In this way it offers multitudes of products, services and guidance to
investors and companies for making large investment and financing decisions.

Channels of Banking
Internet Banking
Mobile Banking App
SMS Banking
Branch Banking

Retail (Branch) Decisions, Locations and Staffing

Meezan Bank has 571 branches in 140 cities that make up almost 40-45 % branches of the branches of
the Islamic banking industry, and 30% if you include the Islamic Windows of the commercial banking
industry. This is the largest number of branches of any bank in Pakistan. Their branch network has
expanded very fast. The purpose behind this fast growth is to increase accessibility of their products and
services, in order to make Islamic Banking (Meezan Bank) the banking of first choice for all customers.
The staff (sales persons) in these branches (retail stores) is motivated by incentives and compensations
to increase the sale of Islamic Banking Products and Services, and to increase the Banks customer base.

Customer
This segment of the report will focus upon the main target audience of Meezan bank. Currently, the
bank has its customers divided into two categories, regular customers and corporate customers. For
Islamic banks, in particular, this market is further divided into customers who are unlikely to obtain the
respective banks services because of its inclination towards religion.

From the perspective of Meezan banks Senior Vice President Marketing, Mr. Adil Sami, Islamic banks
have three kinds of markets to target. The first comprises of individuals who completely avoid Islamic
banking because they do not believe in its legitimacy. The second are those who particularly prioritize
Islamic banking over conventional banking as they consider Riba to be Haram i.e. absolutely against their
religious beliefs as a Muslim, these are the primary target audience of Meezan bank. Finally, the third
kind of customer is the one who is indifferent to whether the banking products being Islamic or non-
Islamic and will choose whichever bank provides a better profit rate accompanied with good services.

The aim of the bank is to convert the first two types of non-customers into customers by a) proving that
the Meezan bank is as profitable and innovative as any other conventional bank if not more and b)
creating awareness and educating the public regarding the concepts of Islamic banking. For the third
kind of potential customers, Meezan chooses not to position itself predominantly as an Islamic bank, but
rather as a profitable bank that aims to provide to services that are as good as any conventional bank
while following the Islamic laws of banking. Through the years, Meezan bank has held multiple seminars
and trainings to create more awareness regarding Islamic banking and to eventually to convert non-
customers.

For regular customers, Meezan bank caters to multiple segments while taking into account
demographics and financial needs. The product portfolio targets both low-income and high-income
savers with differentiation over their withdrawal requirements. There are also separate services for kids
and teens. Alongside this, the bank takes into account the needs of customers who save specifically for
the purpose of performing religious pilgrimages. Furthermore, there are services aimed at individuals
with low-income or low net-worth, the tailor-made services allow such individuals to buy products such
as cars, bikes and consumer durable items such as laptops, LEDs, air conditioners, washing machines,
mobile phones etc.

The corporate, commercial and SME customers of Meezan bank include both local companies and
multinational corporations. Despite being an Islamic bank, Meezans choice not to position itself as
solely an Islamic bank has led to the bank successfully acquiring an impressive portfolio of multinational
clients such as Nestle, Unilever, Procter and Gamble, and Cadbury etc. Such clients are indifferent to the
concept of Islamic banking as long as the services provided by the bank are adequate.

Corporate banking is high-involvement decision. For corporate customers marketers have to go to them
and pitch their products. They have to meet the key stakeholders of the companies, and thats how you
get promoted. Another thing thats important is that these corporations prefer working with big banks,
Meezan bank is among the top 10 banks of Pakistan, so it has an advantage in that regard.

Meezans aim in both the regular customers and the B2B sector is to be innovative and profitable while
being Sharia a compliant which can lead to its growth as a first choice bank. As determined by Hafeez Ur
Rehman and Saima Ahmed, online banking facility, profit rate, banks internal environment and external
appearance, convenience and accessibility play a crucial role in bank selection by customers. Other
important factors include convenience and accessibility, both of which are emphasized upon by Meezan
bank which is evident from their highest number of branches across Pakistan against its competitors.
(Rehman & Ahmed, 2008) Alongside this, service quality and customer satisfaction also has large
positive correlation (Ahmad, et al., 2010), another factor that Meezan bank pays considerable attention
to as per the SVP Marketing of Meezan bank.

Promotion:
While speaking about their prime target market, customers who prefer Islamic banking, the President
and CEO of Meezan bank, Mr. Irfan Siddiqui has stated that while a conventional may only push their
Islamic banking window in front of the customers when it suits or when they see a rise in customer
interest; banks that are predominantly Islamic have a consistency that keeps the regular Islamic banking
customer confident that there will be no non-Sharia a compliant practices at any time by the bank.
(Arshad, 2016). Thus, Meezan bank constantly markets its Islamic banking aspect alongside its use of
modern and innovative banking tools.

Awareness Campaigns:
Through the years, Meezan bank has held multiple seminars and trainings to increase awareness about
Islamic banking. So far, the bank has organized 500 public events and 250 sessions at various branches
to educate its target market. Such events are branch or area-based. One area has around 10-12
branches and at the moment, 50 areas have been covered. A seminar is held in one of the areas every
Saturday, thus, 52 areas in 52 weeks. An area attracts people from around the locality, both customers
and non-customers although the focus of such events is on non-customers.

According to Mr. Adil Sami, whereas previously 80% of the questions in such events focused upon what
Islamic banking is while the remaining 20% revolved around the Islamic banking services provided by
Meezan bank, the figures have now reversed. This puts across a positive outlook for Islamic banking in
the country.

To promote its Establish Islamic banking as baking of first choice vision, the bank has also
collaborated with IBA Karachis CEIF for research over Islamic finance and Islamic banking.

Word-of-mouth:
The bank lays strong emphasis upon generating positive word-of-mouth regarding its services. According
to Mr. Adil Sami, a regular customer wants vanilla services from a bank: cheque clearance, quick card
processing etc. The differentiating factors here are visibility, accessibility and services. For the first, after
the ban of hoardings by the Government of Pakistan, the bank has played with its wide coverage of 571
branches where each branch serves as a hoarding, resulting in 571 hoardings. For the second, the same
571 branches are the key factors in providing easy accessibility to customers everywhere.

For corporate clients, word-of-mouth is a major factor, however, it is secondary to formal meetings
where the pitches are made and annual reports of respective banks are discussed.

Advertising:
To create brand awareness, Meezan bank arranges multiple ATL and BTL activities as well to create a
360 degree impact. In terms of advertising, the bank has produced product-oriented TVCs and also,
context specific thematic campaigns such as the Riba se pak mahina TVC as part of the Riba se Azadi
campaign run during the month of Ramadan to encourage people to switch to Islamic banking in a
month when there is a general inclination towards religion. Lately, the bank has been utilizing the
services of Argus advertising agency.

PR:
Meezan banks current PR agency is Rich PR whose main purpose is to disseminate information about
what the bank has been doing and control information regarding events that the bank does not want
highlighted.
Collaborators
Generally the products of banks are their own, so they dont need to collaborate with external
organization. However, small levels of collaborations are required with different organizations to
facilitate smooth operations, promotion, and provision of exceptional products and services to
consumers. Meezan Bank, for these reasons, collaborates with the following companies and
organizations.

Takaful Companies
Meezan Bank collaborates with Pak Qatar Takaful, Pak Kuwait Takaful, TPL Direct Insuarance and other
Takaful companies. These companies provide insurance to Meezan Bank. Also Meezan banks provides
insurance in a Shariah compliant manner to its customers via these third party companies, to fulfill all
their financial needs. The collaboration of Meezan with Takaful companies began in 2008 when a
strategic alliance between Meezan Bank and Pak Kuwait Takaful Company was signed to promote
Takaful as a package offering for Meezan Car Ijarah customers. This venture provided competitive
advantage to both institutions as the PKTCs product was being promoted and Meezans product was
offering additional service to its clients. Since this first collaboration Meezan has collaborated with
several other Takaful companies to provide insurance on all its products. (Meezan Bank Press Release ,
2008)

State Bank of Pakistan

Meezan Bank collaborates with State Bank of Pakistan to promote the expansion of Islamic Banking in
Pakistan, and to make Islamic Banking the banking of first choice for all consumers.

Educational and Research Institutes

Meezan bank has signed agreements of collaboration with International Shariah Research Academy for
Islamic Finance (ISRA), Institute of Business Administration and LUMS to promote research in the field of
Islamic Banking, spread Islamic Banking knowledge and to expand the role of Islamic Finance in Pakistan.
(Meezan Bank Press Release, 2016) (Meezan Bank Press Release, 2015)The Centre of Excellence in
Islamic Finance was established at IBA with the collaboration of Meezan Bank to provide a platform for
the discovery, enhancement and dissemination of knowledge in the field of Islamic Finance. (Centre for
Excellence in Islamic Finance, IBA, 2017)

Telecom Service Providers

Meezan Bank has signed contracts with Mobilink, Ufone and Warid three of the biggest telecom service
providers in Pakistan. Mobilink and Meezan collaborated in 2015 to provide Corporate SMS solutions to
customers. Under this agreement Mobilink would provide the Campaign Management Tool to Meezan
Bank that will be used to communicate and notify customers of their banking activities at real time. This
innovative SMS tool which is being created by the collaboration of these two companies promises faster,
more reliable message delivery. (Meezan Bank Press Release , 2015)
Ufone and Meezan together launched Meezan UPaisa, the worlds first Islamic Branchless Banking
solution, in 2015. Meezan Upaisa allows its customers to send and receive money, pay utility bills and
avail other services of Meezan bank via their mobile phones. (Meezan Bank Press Release , 2015)
Meezan Bank also collaborated with Warid and Monet to increase the scope of Branchless Islamic
Banking in Pakistan. (Meezan Bank Press Release, 2013)

Hospitals and Charity Organizations

Meezan Bank runs Ihsan Trust which provides financial support to students from various higher
educational institutes. Meezan Bank is a regular contributor to TCF and other organizations as part of its
CSR efforts directed towards promotion of health services and eradication of illiteracy and poverty.
(Meezan Bank Press Release , 2012) Meezan Bank also signed an MOU with Indus Hospital. In light of
this agreement Meezan Bank will spread awareness about Indus Hospital through its selected branches
and social media. Also people who wish to donate Zakat funds to Indus Hospital can deposit the funds
into Indus Hospitals account maintained at Meezan Bank. Meezan Bank also collaborates with several
other organizations to fulfill its CSR activities, and to donate the money collected as late payment
penalty from its customers and clients.

Competitors
There are more than 30 banks operating at present in Pakistan. As consumers are becoming
more aware of the Islamic Banking concept, different banks have started up their own Islamic
subsidiaries to cater to this market segment that had never been tapped until 13-14 years ago.
The network of Islamic Banking has a total of 22 banking institutions which include 6 purely
Islamic Banks, subsidiaries of commercial banks and Islamic Banking windows of commercial
banks. As a result of this, the competition in the banking sector has grown tremendously. In this
section we will talk about the competition Meezan Bank faces while operating in this highly
competitive environment.

The Purely Islamic banks in Pakistan include Bank Islami Pakistan Limited, Burj Bank, Dubai
Islamic Bank Pakistan Limited, Al-Baraka Pakistan Limited and Emirates Global Islamic Bank.
These banks serve as direct competitors for Meezan Bank.

However, Meezan has several advantages over these Islamic Banks. Meezan bank is the pioneer
in the Islamic Banking Industry. This provides it an edge over other Islamic Banks. It also offers
training and development programs for its employees and customers to educate them about
the products and services of Islamic Banking, and about the legitimacy of the concept of Islamic
Banking.

Meezan bank offers unique products like Labbaik Travel Asaan (pilgrimage for their employees
and customers), and Meezan Kafala services, which differentiate it from other Islamic
competitors. It also offers investment and advisory services.
When it comes to the competitors, The Burj bank also offers Global marketing and advisory
services. Bank Islami deals with investment banking, and trade and financing products along
with retail and customer banking. These banks have a greater edge when it comes to these
products and services.

When it comes to competition with conventional banks, the main edge that Meezan has over
them is that it offers Services and Product that adhere to the principles of Islam. For example
Meezan bank, working on its strict alliance with these Shariah principles, offers Zakaat
donations. Most of the conventional banks like UBL, MCB, HBL do not offer Zakaat donations.

Aside from this differentiating factor, Meezan ranks 8th in the list of the top 10 banks of
Pakistan. This provides it an edge when it comes to competition with conventional banks. Other
banks in the list include National bank of Pakistan, Habib bank limited, United bank, MCB bank,
Faysal bank, Bank Alfalah, etc.

It offers nation-wide training on Alternate Distribution Services, which is unique and different
from the offerings of its competitors. It has also included services like utility bills payment,
inter-bank funds transfer, third party funds transfer, online shopping, etc. It also takes part in
cricket tournaments, exhibitions, trade fairs, etcetera to promote its products and services.

Moreover, with such intense competition in the market, and all competitors offering similar
products, the only differentiating factor now is the support service. According to Mr. Adil Sami,
all the banks are providing the same facilities, with profit margins differing by a few bullet
points. Thus what differentiates one bank from another is the service/experience that is offered
by the institution. Banks are now heavily focusing on providing their customers with easy
accessibility and convenience and customized service.

Another of Meezan bank it that the customer-bank relationship is one of a seller, buyer or
partner. Whereas, other banks (conventional) maintain this relationship as that of a loan lender
or borrower. There is more emphasis on customer relationships which directly impacts word-
of-mouth about the quality of services provided. Meezan has a well-established name in the
banking sector and positive word-of-mouth. As per Mr. Adil Sami, the kind of word-of-mouth
that were getting for Meezan bank is very positive. When you ask people, which bank I should
work with, they would say Meezan Bank. Even if its like between conventional banks, or asset-
based, financial banking, they would then also prefer Meezan Bank. They promote Meezan Bank
through their word of mouth.

Amongst the top competition is National bank of Pakistan, MCB, UBL and other top tier banks
offering both conventional and Islamic banking services. The national bank of Pakistan is a
state-owned body which gives it competition over other banks. It is an administrator of Qarz-e-
Hasana, self-employment scheme for unemployed people. HBL has credibility as the oldest
bank in Pakistan; it has 1500 branches all over Pakistan. This gives it greater credibility
accessibility. It is the 2nd largest Islamic Banking Service provider in Pakistan after Meezan Bank.

United Bank Limited has its own Islamic Banking under the name of UBL Ameen. The Al-
Ameen fund has grown by 414% in the last three years, and has been providing more and more
competition for Meezan. It also has unique products like branch-less banking UBL OMNI. MCB
Bank Limited has 22 Islamic banking branches within Pakistan. It is the second largest bank by
assets and the largest by market capitalization. It has a huge integrated network of branches in
Pakistan and is continuously adding to is product portfolio. Thus its conventional division and
Islamic banking subsidiary both serve as competitors for Meezan.

Context
In order to effectively and comprehensively analyze Meezan Banks market context, we have divided
this part into four categories namely political, economic, social, and technological. Each of these factors
affect Meezan Bank either negatively or positively.

Political
In this factor, the focus is on governmental policies which influence Islamic banking industry in Pakistan,
especially Meezan Bank. The banking industry in any country is one of the most regulated ones by the
government through the state bank and fiscal policies. As Islamic banking is a relatively newer
phenomenon, trying to compete in a heavily saturated market, its reliance on favorable government
policies is significant. The laws have been in favor of Meezan Bank up till now.

In the last 5 years, government has given several incentives to the industry to boost growth. The
governments incentives to Islamic Banks can be summarized in the following three instances.

In order to encourage conventional banks to switch to Islamic methodology, the government, in

July 2016, introduced a 2% tax rebate for all financial institutions involved in providing sharia
compliant services. Due to this measure, Meezan Bank could introduce a new financing
structure expanding into Airline industry by utilizing airline tickets as assets to back Islamic
deals. (Samaa Web Desk, 2016)
The State Bank of Pakistan (SBP), the final regulator of all banking activity in Pakistan, is also
involved in providing ease to Islamic Banking institutions benefitting Meezan Bank. Such a
measure was taken in November 2016 when SBP announced to reduce the Statutory Liquidity
Requirement (SLR) for Islamic Banks to 14% from 19% earlier. The measure was taken primarily
to avoid a crisis situation for Islamic Banks as they were low on liquid assets. Due to this, Islamic
banks including Meezan could issue Sukuks amounting to Rs.308 billion and Bai-Muajjal of
Rs.225 billion. (Shakeel, 2016)
Islamic banks used to face the problem of using interest based benchmark rates because of
absence of alternatives. In September 2016, SBP took a step to curb this issue and exempted
Islamic Banking Institutions (IBI) from using general interest based benchmarks such as Karachi
Inter-Bank Offer Rate (KIBOR). This decision directly affected the financing products known as
 Musharaka and Mudarabah by Meezan Bank. This will enable IBI to further innovate and
differentiate from conventional banks. (Reuters, 2016)

Islamic Banking in Pakistan has had tremendous growth since its inception. Its market share in the
overall banking industry is 13% while being only 7.8% 5 years ago. Meezan bank enjoys a 55% share of
this industry while growing its deposits base at a rate of 24%. This high success can also be attributed to
governmental policies mentioned above and highlights how highly affected is banking industry to
political scenario in the country. It is also worthy of mentioning that due to these very policies,
conventional banks are switching to Islamic system including Summit and Faysal Bank while others are
opening Islamic Banking windows. (Arshad, 2016)

Economic
When it comes to economic variables, the most significant factor which affects the banking industry is
interest rates or benchmark rates. Conventional banking which is based entirely on prevailing interest
rates is most affected as they base their returns and income on it. There can be various factors which
influence the national interest rates including actions taken by the government.

Even though Islamic banks operations arent based on interest, but due to their intense competition
with conventional banks, they have to adjust themselves accordingly. For e.g. if the conventional banks
are offering 8% interest annually, Islamic banks have to make sure they offer returns of at least 8% as
well. This is a problem for them as their investments do not yield a return based on interest rates and is
volatile. In order to effectively deal with this issue, Islamic banks keep two types of reserves so that they
can provide similar or more return to their consumers as conventional banks.

Profit Equalization Reserve (PER) is an amount appropriated by an Islamic bank out of their
profits before allocating the share to investors. This reserve aims to provide stable returns to
depositors in case there is volatility in the market. It acts as a stabilization tool in a dynamic
environment. (Investment and Finance, 2013)
Investment Risk Reserve (IRR) is an amount appropriated by an Islamic bank from the profit
share allocated to depositors. In case of less returns in a period, the bank may utilize to use
these reserves to stabilize the returns and avoid passing losses to depositors. (Investment and
Finance, 2013)

In a matter of last 5 years, another important economic factor has emerged for banking opportunities.
The China-Pakistan Economic Corridor has opened doors to rapid growth and expansion opportunities.
Meezan Bank realized this and decided to capitalize on it. According to a press release on October 13
2016, Meezan Bank and Pak China Investment Company Limited (PCICL) have made a strategic alliance
to capitalize CPEC opportunities. The primary aim of this partnership is to promote bilateral trade and
investment opportunities between the two countries. They signed a MoU highlighting how Meezan and
PCICL will cooperate where PCICL will utilize Meezans extensive banking network and Meezan Bank will
gain access to investment opportunities in various CPEC projects. (Meezan Bank, 2016)
Social
According to an interview with Mr. Irfan Siddiqui, the CEO of Meezan Bank, the greatest challenge
Islamic financial sector faces is lack of awareness about Islamic Banking. (Arshad, 2016)

Islamic Banking industry in Pakistan has a great advantage on cultural and religious grounds as of the
182 million people in the country, 96.4% are Muslims. (Sobri, 2015)

Religion acts the most important factor when we consider views about Islamic Banks. In our interview
with Mr. Adil Sami, SVP Marketing Meezan Bank, he divided the population in three clear segments.
According to him, there are three kinds of people; those who believe that Islamic Banking is absolutely
shariah compliant and the best way to bank, those who are indifferent between Islamic and
conventional, and those who believe that Islamic banking is a deception and is the same as conventional
behind the curtains. Mr. Adil classified this as a social phenomenon which spreads fast through word of
mouth and dinner talks. It becomes a sub culture in households and friends and directly affects the
growth aspects of Islamic banks.

Mr. Adil further explained that in order to turn social aspects to their advantage, Meezan bank organizes
seminars and workshops for executives and as well as the common populace to educate them about
Islamic Banking. Besides that, they have also established a linkage with IBA Karachi in the form of Center
for Excellence in Islamic Finance (CEIF) where students research and help in innovating shariah
compliant financial instruments.

Technology
In todays rapidly changing technological atmosphere, businesses try their best to cope to the changes
or even establish high tech adoption as their differentiating factor. Same is the case with banking
industry in Pakistan whether it be conventional or Islamic. In order to keep up with the competition,
Meezan bank has always equipped itself with the latest banking technology available in Pakistan. It
established its fully online branch network in 2008 including 71 ATMs, internet banking, and a 24/7 call
center. (Meezan Bank, 2008)

However, this could not be established as a USP as the competitors provided similar services. In order to
stay on top of this game, Meezan constantly looks for opportunities. A recent example can be seen in
the press release below.

In August 2016, Meezan bank partnered with HomeSend which is a venture between MasterCard and
eServGlobal to add to HomeSends existing network. HomeSend is a high tech leading money transfer
service globally and under this partnership, Meezan Easy Remit will take over HomeSends remittances
sent by Pakistanis living abroad. This has provided a fast, reliable, and secure end to end solution
especially for Meezan Banks MasterCard debit card customers. (Meezan Bank, 2016)
Appendix A
Accounts Investment Consumer Corporate Investment
Certificates Products Products Banking and
Advisory Services

Aasaan Current Certificate of Car Ijarah Murabaha Underwriting

Account Islamic
Investments
Musawwamah

Savings Account Meezan Amdan Bike Ijarah Running Financial Advisory

(Rupee, Dollar, Certificate Musharakah Services
Euro)
Diminishing
Musharakah

Current Account Mudarabah Consumer Ease Istisna Mutual Funds,

(Rupee, Dollar, Certificate Equity Funds,
Euro) Asset
Bai Salam Management and
Investment
Banking products
Tijarah

Meezan Bachat Easy Home Ijarah Corporate

Account Training

Meezan Labbaik Meezan Easy Letter of Credit Sukooks

Account Remit

Meezan Kids Club Takaful Export and Import Syndicate Finance

Account/ Meezan Financing
Teens Club
Account Hedging Facilities

Business Plus Labbaik Travel Guarantee Services Structured

Account Asaan Finance
Appendix B
Appendix C: Meezan Bank Questionnaire
1. What budget do you allocate to promotions? And different types of promotions, particularly the
advertisements?
2. How do you decide the total budget for promotions? And particular method you use? Like
percentage of sales, affordable method, competitive parity, objective and task method.
3. What are all the different touch points do you use for communicating with the customers?
4. What sales promotions does Meezan offer to its consumers?
5. Are there any special festivity based promotions?
6. What is the theme that your marketing department follows while carrying out any forms of
promotions, advertising in particular?
7. What message do you want to portray with the ads? How do you decide on that message?
8. Do you guys focus on moral appeal, social or emotional?
9. What are the public relations activities carried out by Meezan?
10. What Meezan carry out any activities related to corporate social responsibility?
11. Do you guys try to push personal selling?
12. Do you guys use any forms of test marketing?
13. Do you have a PR agency? How do you maintain public relations?
14. What direct marketing techniques do you guys involve yourself in?
15. How is sales force motivated and compensated?
16. How do you train your sales force?
17. Which research agency do you contact to gain customer insight and retail audit?
18. Do you use any media buying houses to help you promote the brand?
19. On what basis do you select the time slots for playing the ad?
20. Does your company co-brand with any other companies?
21. Before, starting the brand, what kind of research did the company conduct?
22. How do you decide on pricing?
23. What is your target audience?
24. How do you guys create awareness about your product?
25. What are Meezans main competitors?
26. How does the competition between commercial banks and Islamic banks differentiate?
27. Your main marketing strategy?
28. How is the Shariah Compliant Board formed and what actions does it perform?
29. What products and lines does your portfolio comprise of?
30. Which products are most profitable?
31. What product lines would you like to extend into in the future?
32. How has your product portfolio evolved over the years since the companys inception?
33. What is Meezans long term vision?
34. What brand image does Meezan aim to establish in the minds of its consumers?
35. How do you guys intend to extend your reach to cater to non-muslim markets?
36. How do you segment your market?
37. How do you try to position your bank in the mind of your consumers?
38. How do you differentiate yourselves from other Islamic banks?
39. How do you differentiate your products?
40. What is the banks retail reach?
41. Any significant market trends/societal shifts that are prevalent or have arisen since the
inception of the bank?
42. What factors affect consumer decisions?
43. What economic benefits do your products offer?
44. What is Meezans position and share in the banking sector?
45. Who are the companys major stakeholders?
46. Do you collaborate with any other organizations?
47. Do you play an active role in any organization you invest in?
48. How do state banks economic policies affect your business decisions and product portfolio?
49. What is Meezans competitive strategy and competitive position in the market (niche, leader,
follower)?
50. Are your strategies and approaches more customer centric, product centric or competitor
centric?
Appendix D: INTERVIEW TRANSCRIPT
Interviewer: What is the core philosophy behind Meezan Banks products?

Interviewee: The core philosophy behind our products is being fully shariah compliant. I think
what you meant from your question was that how are these products derived. To be honest, it
has been a long process of Islamic banking globally but our primary source has been the life of
Prophet Muhammad, the Caliphs, and the economic transactions they were indulged in. As you
might have studied in your Islamiat courses, Prophet Muhammad married Hazrat Khadija who
was a wealthy trader and someone with sound economic knowledge. In fact, the prophet
himself took her caravans for trading. Moreover, later on many influential people converted to
Islam including Hazrat Usman who was a trader and commerce person of that era as well. All
Islamic products are either directly derived from the record of transactions at that time, or are
based on it.

Interviewer: How do you differentiate Meezan Bank from your competition whether it be other
Islamic banks or even conventional banks?

Interviewee: Good Service. And, I think with banking today that is the basic differentiator: if
you provide good service to your customer, if you provide service at their doorstep or you know
where it is easily accessible to them that is a determining factor. So then, whats the difference
between HBL and UBL? Nothing! You might go to HBL and get a good feel or to UBL and vice
versa. And word-of-mouth determines if a customer will come to you or not. See, banking in
principle is a high-involvement decision; its not like buying a chewing gum or buying a drink.
One reason that we opened so many branches in such a short duration was that our
management was very inclined to provide Islamic Banking services to those places where its
not easily accessible. So, people should not have an excuse you know. Like, Im not doing
Islamic Banking because it isnt close to us, or me. Thats one reason why our branch network
has expanded so fast. Today we have 571 branches that make up almost 40-45% of the
branches of the whole Islamic Banking industry and 30% if you include the windows of the
Conventional banks. So, by far Meezan bank is the largest. Theyve been awarded the best
Islamic bank by the Islamic banking industry in Pakistan. And were the oldest and largest
Islamic Bank in Pakistan. And that is our differentiating factor; were the oldest, people have
tried us, they have good things to say about us. Our service standards are very good in the
industry compared to even the conventional banks and that has been our USP- the wide variety
of products and services that we offer. These are our three differentiating factors. There are
also alternate distribution products which are mobile banking, our app and our internet
banking, and our ATMs. So, convenience and service are the two core things that determine
whether a customer stays with you or not.
Interviewer: So, is there anything else when youre competing with commercial banks? Like
anything you use to differentiate yourself other than the fact that you are Islamic and that
youre providing a service, anything in particular?

Interviewee: These are the two things.

Interviewer: Yes, okay. These are

Interviewee: Yes. I mean there are three kinds of customers in the market with regards to
Islamic Banking. One type of people is those who say that were not coming to you because we
dont believe in Islamic Banking. Second are at the other end who says that were totally
coming to you. We think riba is totally haram and we do not want to be involved in that so
were going to do business with Meezan bank/Islamic bank no matter what. A big majority of
the customers lie in the middle who say give us good service, were indifferent to Islamic or
non-islamic, give us good profit rate, and well come to you. So basically there are two things:
Islamic for those who are determined to come to you and good products and good service to
those who are in the middle.

Interviewer: When it comes to awareness in the market, what are the different programs and
how do you create awareness for the different people? Like educating people about Islamic
Banking? Were talking about promotion, when it comes to promoting Meezan bank, I think,
like last semester we did a small survey and I did a report on Bank Alfalah Islamic. The survey
was about what the general perception is regarding Islamic Banking and what makes them
convinced that they want to be an Islamic Banking customer.

Interviewee: I would like to look at the report, if its okay.

Interviewer: Sure, we have it well share it with you.

Interviewer: So what we came up with is that people were aware of how an Islamic bank
works, and they are inclined to be a customer. However, the number of such people is very low.
People generally dont know how Islamic banks are different from conventional banks. So how
do you cater that?

Interviewee: See, if you look at Islamic Banking, Meezan bank has been the pioneer. There was
a lot of emphasis and a lot of focus by Meezan bank, initially when we came into the market;
the first question was what is Islamic banking? How can banks be Islamic? I liked how you
guys came in, and since youve researched you already know about Islamic Banking. So, one of
the first things that we did as the pioneers of Islamic bank was educating people about what
Islamic Banking means and what it entails. And it goes to the credit of Meezan bank and Allah,
that today the vast majority of the market understands what Islamic banking is. In line of that,
we still have programs that we run in which we hold seminars, trainings for people in the
Islamic Banking area. So if you could read this about Meezan bank.

Interviewer: Yes, I remember my father did training from Meezan Bank.

Interviewee: Meezan bank regularly arranges public awareness programs about Islamic Banking
in various institutions of Pakistan. Last year, the bank organized 40 knowledge dissemination
sessions in 20 cities benefitting over 5500 people and supported them.

Interviewer: So, this is not only for bankers? Is it for the general public too?

Interviewee: Yes its for the general public. Apart from that, in my section which is the
marketing and corporate communication, banks sponsored more than 500 public events. We
also did around 250 sessions at our branches in which we educate the people. Personally, I have
also both attended and conducted those sessions. What happens is that we have either branch
based or area based. An area typically has around 10-12 branches on average, and we have like
50 areas covered. So we have area-wise seminars. Every Saturday one area, 52 weeks, 52 areas,
an area gathers people from around their locality; customers and non-customers. Our focus is
non-customers. They talk about Islamic Banking. The good thing is that when we started the
question/answer session would take up 80% of the time and the 20% would be spent on the
products and services we offer. Now its the opposite. 20% is about the Islamic-ity of the
banking and 80% about the products that we offer. Another feature/success of Meezan is that a
lot of corporates have shifted to Islamic Banking. So you have a number of success stories of
entire organizations working with meezan bank. We also have multinational customers Like
Nestle, Unilever, Procter and Gamble, Cadbury. These companies why would they be coming to
Islamic Banking? They dont have the need. Theyre coming to us because of our products and
services. Generally, the kinds of services that are there are ATL and BTL, but we do both. We
have our ATL marketing that we cater to like electronic, print, on ground activities, etc. And in
BTL we have on ground activities that are done to educate and create awareness of Meezans
products. So we work on 360 degrees.

Interviewer: So when it comes to the industry wise, the entire banking industry and the global
scenario world-wide, where do you see Islamic Banking in the future? What poses the biggest
threat?

Interviewee: I dont think there is any threat to Islamic Banking. If there is anything, it is that
we can just grow. IBA has its own center of Islamic study, I think its called CEIF. Theres CEIF in
Lahore, Islamabad, etc. There are organizations that are single-mindedly working for
promotions in Pakistan. Today in Pakistan, good share of Islamic Banking is 13-14% of the whole
industry. And to think that, you know, 14 years ago there was no Islamic Banking in Pakistan,
this is a big achievement. Obviously, there are things that we need to do, things that need to be
done. When Islamic banking started, there was no research in Islamic Banking. Today there is
research. There was no institute that was training people for Islamic Banking, and today there
is. This shows the interest of people, this shows the interest of professionals, government
banks, and state bank. This bank oversees all banks in Pakistan and still supports Islamic
Banking. During the 2007-08 crises, a lot of countries had problems. But countries which had,
predominantly, Islamic banking they did not. There is an inherent strength in Islamic Banking
instruments because they are backed by assets. The crises that happened was because of
money. There was basically just money, nothing behind it. And till that happens, Im sure there
wouldnt be anything else. Islamic banking is going up InshAllah.

Interviewer: When you guys are marketing what is the main theme that the marketing
department follows, and what major theme do you follow? Is it more of a functional appeal or
emotional?

Interviewee: It basically depends on product to product. Be it any industry, some products

need advertisements/promotions that are thematic in nature like Telenor, whatever. Then
there are some product-related tactical campaigns that focus on the then and the there.
We also have similar campaigns that we run at specific time periods that basically include
Ramadan. We call Ramadan the riba se paak mahina. That is the step we take to get away
from Riba, its Ramadan. You should do it always throughout the year. But Ramadan is when
youre more inclined towards religion. The women who do not pray, Or the men who dont,
everybody is praying and there is a sense of being religiously inclined. And as a marketer, it is
when you want to hit the nail on the head. That is when Islamic Banking is promoted, and all
banks do so. It was started by meezan bank, at that time newspapers were empty during
Ramadan. There was a general trend Ramadan mei advertise nae karna, log sotay honge
akhbar sbha ata hai, kya faida. We started to run the Riba se Azaadi campaign. However, last
year we couldnt find a spot in the newspaper because all banks were running this campaign
themselves. So, weve been in TV also, press, on radio, on digital which is a big focus. Were
there. What was your question?

Interviewer: The main theme that you follow.

Interviewee: The theme depends on the campaign. If its a thematic campaign, weve done
that. If its a product related campaign, like launching or promoting current account, financing
product, it really depends on that.

Interviewer: CEIF is in collaboration with Meezan. What was the main mindset behind CEIF and
how do you think its progressing by far?

Interviewee: The main mindset behind CEIF was any other institute/bank that promotes Islamic
bank is our vision. Our Vision says Establish Islamic banking as baking of first choice, not
establish Meezan Bank. So in order to do so, if we need to support them, we will do. If there is
anything happening that benefits Islamic banking, we need to be there. Meezan Bank has to be
there.

Interviewer: Okay so, when it comes to Corporate Social Responsibility (CSR), you guys have
Qarz-e-Hasana, or Ehsan trust venture, do you operate it? How is it managed? Do you have
other means to do so?

Interviewee: No. See. There is a bit of technicality to that. The funds that come to Ehsan trust
may come from Meezan bank, or Meezan bank customers, or businesses related to meezan
bank, but its not of meezan bank. Its charity and We do not have any stake in that per say. We
have developed an Ehsan trust, and all the funds go to that independently. Today if Adil goes
and tell the directors of Ehsan bank that I want to donate money there, because it would
benefit me marketing wise, they would not do that. They would judge that on their own pros
and cons to do so. Because the charity that comes out of that, it may be from our customers,
but donot belong to meezan bank. Yes there are some activities that we do jointly. Like a school
for poor children, we contribute amount together like some money will be donated by Meezan
Bank and some by Ehsan trust. However, there are some activities that Meezan Bank does
independently and some that Ehsan trust does independently. So, ehsaan trust yes is a part of
meezan bank. The funds generated are through meezan bank, but we cannot technically take a
stake in that.

For CSR, we focus on two main issues: poverty alleviation and health. For these, meezan bank
works a lot. Weve run blood bank, we donate to Indus hospital, take part in their active fund
policy.

Interviewer: So have been talking about how Meezan bank is looking into everything. If a
person wants to take part in banking, but not Islamic banking, will meezan bank cater to that
too? How do you plan to target those customers who are neutral to the Islamic banking
concept?

Interviewee: When you look at marketing or how a person would be influenced, the most
reliable source is the word of mouth. That is what were focusing upon. Alhumdulillah, the kind
of service or the kind of word-of-mouth that were getting for Meezan bank is very positive.
When you ask, which bank I should work with, they would say Meezan Bank. Even if its like
between conventional banks, or asset-based, financial banking, they would then also prefer
Meezan Bank. They promote meezan bank through their word of mouth. For that customer,
who is not predominantly ideology based, he wants good banking, good service. He wants his
cheque to be cleared quickly, card to be processed quickly, that is predominantly what a
customer wants. Everyone doesnt want to open up LCs. For them, being visible and being out
there is important. That is what we push ourselves towards. The removal of hoarding in Karachi
has made the signage of banks more prominent. We have 571 branches and 571 hoardings,
more than any FMCG company in Pakistan. The kinds of services that a customer wants from a
bank are Vanilla services, everywhere banks are offering them like; I want to open a current
account, yes sure sir. Whats the difference between banks - a little margin, but greater service
differences? Why would a customer not want to try a small bank? Because he knows the
branches are far off. In Karachi, meezan bank has the most branches than any bank in Pakistan.
We have around 150 branches only in Karachi. Are you going to go back to IBA from here?

Interviewer: yes.

Interviewee: Then you would probably cross approximately 10 branches of Meezan bank.
Thats what were working upon. A) It should be accessible to the customer, B) It should create
good vibes and positive word-of-mouth from their peers. Before I came here, I would only open
an account in the location where I was working. You dont need anything else. Yes, for credit
cards, you would want to go. You would get a good discount on the credit cards. 8-9years ago
you wouldnt get good discounts, but now. Every bank is offering amazing discounts on credit
cards. Previously, the entire banking experience was a hassle. Still, people think of it as a hassle.
And when you graduate, youll probably think of having an account. ATM card ho, zarurat parh
jaye. Our main focus has always been corporate customers; they experience banking. They are
the ones who come to banks for day-to-day transactions, and hence they require a strong word
of mouth. If youre working with a local company, like Nestle, and the head of finance says
Meezan bank is really good, then its great for the company.

Interviewer: So, when were talking about corporate customers, what means do you use to
target these customers and promote Meezan bank?

Interviewee: For corporate customers, word of mouth is secondary. We have to go to them and
pitch our product to them. Then, our annual reports play a very significant role and I would say
its B2B. You go to them, meet their key stakeholders, and thats why you get promoted. And
another thing thats important is that these corporates prefer working with big banks. And
meezan bank is among the top 10 banks of Pakistan so its on their radar. And corporate banking
is high-involvement decision. And the key resource for them is time. The finance people donot
do anything, all the work is done by the marketers. Theyre working on excel, analyzing each
proposal and thats where one-to-one meetings help.

Interviewer: Do you guys have a particular ad agency?

Interviewee: Yes we have an agency, its called Argus.

Interviewer: So do you have any PR agency?

Interviewee: Yes its called Rich PR

Interviewer: What are the public relation activities that youre engaged in?

Interviewee: Two things; disseminating our information, like what we have done and
controlling information that you dont want to highlight. Those are the two things that the PR
Agency does. Fortunately, Meezan bank doesnt have any such news. Even if we do, the PR
agency says we cannot do anything about it. I dont know why were working with them.
*laughs*

Interviewer: So, when we talk about when were selling the product, the sales force is very
important. With you its the manager and the staff at the bank. So how do you motivate your
employees or train them?

Interviewee: See, its always the carrot and the stick. So you give them incentives to work, you
give them KPIs (key performance indicators) and judge their performance at the end of the
year. If theyve not performed well, you use the stick. And this is how its done everywhere.
There are also personal banking officers who promote our products, and we have a sales team
that pushes our product. The good thing that we do is we have a balanced methodology and
you have the whole year to generate the results. And theyre weighted across the whole
portfolio. You want the current accounts increased by this much which is a 20% weightage. Its
a very interesting but a scary document. (31:15)

Interviewer: You mentioned Takaful, so do you offer insurance as in Islamic insurance i.e.
Takaful or is there a third agency involved?

Interviewee: Meezan bank acts as a third party. So, the Takaful that we offer to our customers
is via third party and we are basically the sellers to the customer.

Interviewer: Are you insured yourself? Which organization provides you insurance?

Yes. There are different organizations. We can work with any of them, right now there is Pak-
Qatar Takaful, Pak-Kuwait Takaful, and then theres New Jubilee Insurance as Takaful providers.
You see, insurance till about 5-6 years ago was again purely conventional. Then came some
purely Islamic providers such as Pak-Qatar Takaful and Pak-Kuwait Takaful. Now, State Bank or
SBL has allowed the conventional insurance providers to open Takaful services so now the
industry is also providing Islamic Takaful.
Interviewer: How does the Government and State Bank actually support Islamic Banking? Do
they give discount on taxes or what?

Interviewee: What you need to understand is that State Bank of Pakistan is predominantly a
regulatory agency so their role in giving loans to the banks is really negligible. They so serve as
lenders of last resort but if a bank is standing on its own feet, they dont really need to involve
themselves. Their major role is regulation and promoting the general customer rights. Having
said that, they also play an important role in the promotion of Islamic banking in Pakistan. The
State Bank itself has an Islamic banking department that is run by major Sharia a scholars and
the Islamic windows of conventional banks also come under it so managing those banks also
comes under it just to see that activities of all Islamic banks and conventional banks are as per
the standards that they have defined in the industry. But a good thing is that State Bank
promoting Islamic Banking is a feather of achievement for Islamic Banks.

Interviewer: In your Sharia a compliance board, are there only Islamic Scholars? Do they have
enough knowledge about both the sides?

Interviewee: Our Sharia a boards head is Justice Hazrat Taqi Usmani. Just google him and
youll find out about him, hes been a Supreme Court judge on the Sharia a supervisory board.
Hes spent his life studying Islamic economy and economics and Islamic Finance. You need to
understand economics and Islam to bring out the right solution.

Interviewer: Do you collaborate with any other organizations? When you are doing
promotions? Co-branding of any sort?

Interviewee: Like I said, if its a product we are promoting like Pak-Qatar Takaful we did do that.
Because it was a joint product. Generally, in Islamic banking the products are your own so you
dont really need to collaborate or work with any other organization

Interviewer: You must have started out with a very small portfolio initially?

Interviewee: Yeah. I mean the history of Meezan bank is quite like a Tom Hardy novel with its turns
and curves. Meezan bank was, in principle, an investment bank. This was 16 years ago. What happened
was a Swiss bank, Credit Suisse, was closing its operations and going out of Pakistan so they went to the
State Bank and such. Before that, Meezan investment bank had some investment from Kuwait. During
the first Peoples Party government Benazir Bhutto was going to Kuwait and they had a few meetings
with the Kuwaiti people, the Government found out that Meezan bank had a few shareholders from
Kuwait and they called up our president of Meezan bank at that time for the discussion. So when that
Swiss bank, Credit Suisse, was going out, they called our president and said you know it was an
investment bank and it had potential to be a bank so what to do? They set up a meeting and told our
president that you know theres a license and if you want we can give it to you. But Meezan
bank was an Islamic bank, thus, they wanted the investment bank to also be an Islamic bank
and at that time there was no Islamic bank in Pakistan so the rules and regulations of Islamic
banking were written by our president and the initial management team which are,
Alhamdolillah, now serving as a benchmark. Theyre being modified and that is the license that
all the other banks are applying through which was initially made through Meehan bank. Credit
Suisse had three branches and with Meezan banks one branch which was at FTC it was a total
of 4 branches, a small bank. And that is how Meezan bank started. The first commercial banking
license was given at that time during Musharrafs era so that is how everything started and that
was the evolution and start of Islamic banking in Pakistan

Interviewer: Are you still involved in investment banking?

Interviewee: We do have an investment banking wing like we have a mutual fund wing. Al-
Meezan investment management is a sister concern of Meezan bank which is the largest
private mutual fund company in Pakistan.

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Arshad, A., 2016. Making Islamic finance a reality. [Online]

Available at: http://aurora.dawn.com/news/1141550

Centre for Excellence in Islamic Finance, IBA, 2017. [Online]

Available at: https://ceif.iba.edu.pk/message.php

Customs Today , 2016. Islamic banking captures 15% of total financial market share in Pakistan. [Online]
Available at: http://www.customstoday.com.pk/islamic-banking-captures-15-of-total-financial-market-
share-in-pakistan/
[Accessed 2017].

Hanif, M., 2011. Differences and Similarities in Islamic and Conventional Banking. International Journal
of Business and Social Science, February, 2(2), pp. 166-175.
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Available at: http://investment-and-finance.net/islamic-finance/tutorials/profit-equalization-reserve-
versus-investment-risk-reserve.html

Iqbal, S., 2016. Market share of Islamic banking scales up. [Online].

Meezan Bank Press Release , 2008. Meezan Bank and Pak-Kuwait Takaful Company Limited launch joint
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