INTERNSHIP REPORT

ON
MEEZAN BANK LIMITED

By
FATIMA IDRESS
ROLL NO 1410395
2014_ 2018

DEPARTMENT OF COMMERACE
LAHORE COLLEGE FOR WOMEN UNIVERSITY
 INTERNSHIP REPORT
ON
MEEZAN BANK LIMITED

BY
FATIMA IDRESS
SUBMITTED TO THE
DEPARRMENT OF COMMERACE
LAHORE COLLEGE FOR WOMEN UNIVERSITY
In partial fulfillment of the requirement for the degree of
Bachelor of B.com
(B.com)
APPROVED BY:

ACADEMIC ADVISOR EXTERNAL EXAMINER

MISS SAIRA ANAM

DEPARTMENT CHAIRPERSON
MISS ZAHIDA PARVEEN
 Dedication:
I dedicate my internship report to my parents and all of the staff of MBLwho helped me to do my
internship and to prepare this report and also thanks to colleagues. It is the result of my Protectors
prayers who did a lot for my future. It is also the result of God Almighty grace. I always prayers
to Allah Almighty for their long life with good health.

Acknowledgement:

Preliminary of all I am thankful to ALLAH who always helped me in all of the ways in my life
and always gave me courage and patience to do all of my internship in a good manner and secondly
I am thankful to my teacher and all of the staff of the bank that also helped me to do my internship.

Preface
Internship is the basic requirement of all business programs in nearly all of the business
institutes and especially in Lahore College for Women University, Lahore. It is actually the basic
requirement of the course of BCOM (Honors). Firstly, the purpose of internship period is to
become familiar with the practical world that what is actually happening in different national
and multinational companies and how different activities are performed over there. Secondly,
to cope the theoretical knowledge with the practical side that what is to be taught us in
business institutes and how it is implemented in different enterprises?

I have done my internship in MEEZAN BANK LIMITED (CIVIC CENTER JOHAR TOWN) since
24 of July, 2017 to 11st of September, 2017. I gained a lot from this internship tenor under the
kind supervision and guidance of my internship supervisor. During my whole time, I was visited
through different cells of the bank and was thoroughly briefed about the procedure and working
by cordial senior staff of there. My report is all based on what I have learnt there. I hope that my
report will give you good overlook of all the banking related matters.
Executive Summary:

This is the detailed report about Meezan Bank Limited where I did my internship for five
weeks from joining date 24th July 2017 till 11th September 2017. Meezan Bank Limited a
publicly listed company is the first and largest Islamic Bank in Pakistan and one of the
fastest growing banks in the history of the banking sector of the Country.

It commenced operations in 2002 when State Bank of Pakistan issued first-ever license for
Islamic commercial banking. The Bank offers wide range of Shariah-compliant banking
products and services to its customers both retail and business. Besides traditional banking
channels, the Bank offers various Alternate Distribution Channels including Internet
Banking, ATM Banking, Visa & MasterCard debit card, SMS Banking, SMS Alerts,
Mobile Banking Application and Utility Bills Payment through ATM and Internet
Banking. Having the largest branch network and product range.

Meezan Bank bears the critical responsibility of leading the way forward in establishing a
stable and dynamic Islamic banking system replete with dynamic and cutting-edge
products and services. Meezan Bank aims to fulfill its prime objective of providing
customers accessibility and convenience within an atmosphere and culture of dedicated
service and recognition of their needs.

Meezan Bank has developed an extraordinary research and development capability by

combining investment bankers, commercial bankers, Shariah scholars and legal experts to
develop innovative, viable and competitive value propositions that not only meet the
requirements of today’s complex financial world but do so with world-class service
excellence which our customers demand all within the bounds of Shariah. In this report
there is complete history of banking as well as bank Meezan Bank Limited.

Pakistan after getting its independence, did not inherit a strong banking industry and since
then saw several events in the industry, like the nationalization of banks in the 1970’s.
However today, the banking industry of Pakistan has been growing over the past few years,
mainly because of the consistent policies implemented by the Government of Pakistan,
including the privatization of banks in Pakistan. Also, the State Bank of Pakistan’s,
monetary policy has been very friendly toward the banking industry.

There are number of different banks established in Pakistan, including local incorporated
commercial banks, foreign incorporated commercial banks, development financial
institutions, investment banks, discount & guarantee houses, housing finance companies,
venture capital companies, micro finance banks and Islamic banks.

Meezan Bank, Pakistan’s first and largest Islamic bank, is a publicly listed company with
a paid-up capital of Rs.10 billion. It is one of the fastest growing financial institutions in
the banking sector of the country. With its Vision of establishing ‘Islamic banking as
banking of first choice’ – the Bank commenced operations in 2002, after being issued the
first-ever Islamic commercial banking license by the State Bank of Pakistan. Meezan Bank
is publicly listed company, first incorporated on January 27, 1997. It started operations as
an Islamic investment bank in August of the same year, which has been licensed by
the“State Bank of Pakistan” to operate as an Islamic Commercial bank on 31st January
2002. State Bank of Pakistan granted the Nations first full-fledged commercial banking
license of Islamic Banking to Meezan bank Ltd. It was a new era in banking Sector history
in Pakistan that Meezan Bank Ltd adheres strictly to the principles of Islamic Shariah with
absolutely no compromise, and is recognized as Pakistan’s truly premier Islamic Bank.

Meezan Bank has continued its growth momentum and recorded good results for the half
year ended June 30, 2017. Profit before tax increased to Rs 5,408 million from Rs 4,433
million in corresponding period last year reflecting a growth of 22%, while profit after tax
increased by 18% in the same period due to extended applicability of Super Tax. The
Earnings per Share (EPS) of the Bank stood at Rs 3.15 for the half year ended on June 30,
2017. The Bank maintained its position as the leading Islamic bank in Pakistan with a
branch network of 571 branches in 146 cities. Total deposits of the Bank reached Rs 593
billion, registering a 5% growth over last year and its Advances to Deposits Ratio was 57%
compared to 45% in June 2016. The trade business volume handled by the Bank grew by
36% to Rs 327 billion while Fee and Commission income grew by 63% over the
corresponding period last year. I have learnt a lot during the period of internship at MBL
Saddar bazar branch. I have performed various functions during my internship like as how
to Opening of Accounts in MBL.The basic process of Clearing and Transferring of
Cheques in MBL. I also learned the processes how bank’s correspondence with their
customers and within branches.

Evolution of Banking:
It has not so far been decided as to how the word ‘Bank’ originated. The explanation of
this origin is attributed to the fact that the Jews in Lombardy transacted the business of
money exchange on branches in the market place and when the business failed the people
destroyed the Bank. Incidentally the word ‘bankrupt’ is said to have been evolved from
this practice. The opponents of this opinion argue that it was so then how is that the Italian
moneychangers were never called Banchierei’ in the Middle Ages? Other authorities hold
the opinion that the word ‘Bank’ is derived from the German word back which means
joined stock fund. Then ‘Back’ was Italianize into ‘Bank’.

Early Growth:
Banking in fact is as primitive as human society for ever since man came to realize the
importance of money as a medium of exchange. Perhaps it was the Babylonians who
developed banking system as early as 2000 B.C. It is evident that the Temples of Babylon
were used as ‘Banks’ because of the prevalent respect and confidence in the clergy.
King Hamurabi (1728 – 1686 B.C) the founder of the Babylonian empire drew up accede
wherein he laid down standard rules of procedure for banking operations by temples and
great landlords. He got his code inscribed on the block of diorite about 8 feet tall containing
about 150 paragraphs which deals with nearly all aspects of loans, interest, pledges,
guarantees, natural accidents, loss, theft etc. Later on Sumerians, Babylonians, Hittites and
Assyrians standardized the values of the goods in silver, copper and bronze. In 1401 a
German public bank was framed comprising the operations of discounting and transferring
of money. By the 16th century some more public banks were Formed in Venice, Milan,
Amsterdam, Hamburg and Nuremburg. In order to streamline Banking organizations and
techniques conferences were held in Nuremburg from 1548 to 1551 and it was agreed that
the commercial interest of the time needed a bank with facilities of growth and transfer but
it should not be a bank run by private individuals. Ultimately in 1587 a State Bank under
the name of banco DI rialto was formed in Genoa. Later the bank of Amsterdam was also
formed in1609.
This Bank had a guarantee by the State and rendered valuable services to the Netherlands
trader’s up to the year 1795. Similarly in 1690 the Bank of Hamburg came into existence
in Hamburg with the business of accepting deposits of fine silver or of foreign money and
to run accounts on these deposits. This Bank rendered great service to the merchants as
well as countries it dealt with until 1873 when it was merged with the Reich bank. By the
year 1700 the bank of England was not only issuing notes but also conducting accounts for
customers. Its directors were conducting the business like that of limited companies. The
bank had the monopoly of issuing banking notes.
Up to 1813 or there about in England the main profit of bank was derived from the
circulation of notes.

Development of Modern Banking:

In 1918 came into being eleven clearing banks of today. The effect of this historical
development of banking in England has been fairly wide. First emergence of a small
number of large banks with wide network of branches. Second increase in the popularity
of bank accounts and a large-scale use of cheques.
In 1946 the labor government nationalized the bank of England and transferred the existing
stock to the nominee of British treasury. In 1955 the British Banks made a departure from
traditional banking by undertaking hire-purchase finance for companies buying industrial
plants and machinery and took interest on hire-purchase finance.

Banking in Pakistan:
At the time of independence there were 631 offices of scheduled banks in Pakistan of which
487 were located in West Pakistan alone. As a new country without resources it was very
difficult for Pakistan to run its own banking system immediately. Therefore, the expert
committee recommended that the Reserve Bank of India should continue to function in
Pakistan until 30th September 1948 so that problems of time and demand liability coinage
currencies exchange etc. are settled between India and Pakistan. The non-Muslims started
transferring their funds and accounts to India. By the end of June 1948, the number of
officers of scheduled banks in Pakistan declined from 631 to 225. There were 19 foreign
banks with the status of small branch offices that were engaged solely in export of crop
from Pakistan, while there were only two Pakistani institutions Habib Bank of Pakistan
and the Australasia Bank. The customers of the bank are not satisfied with the uncertain
condition of banking. Similarly, the Reserve Bank of India was not in the favor of Govt. of
Pakistan. The Govt. of Pakistan decided to establish a full-fledge central bank.
Consequently, the Governor-general of Pakistan Quaid-E-Azam inaugurated the State
Bank of Pakistan on July 1, 1948.
Thus, a landmark was made in the history of banking when the state bank of Pakistan
assumed full control of banking and currency in Pakistan.
The banking structure in Pakistan comprises of the following types.
1) State Bank of Pakistan.
2) Commercial Bank of Pakistan.
3) Saving banks.
4) Co-operative banks
5) Specialized credit institutions.
Up to December 31, 1973, there were 14 Pakistan commercial banks that functioned all
over the
country and in some foreign countries through a network of branches. All these commercial
banks were nationalized in January 1, 1974, and were recognized and merged into the
following five banks:

1. National Bank of Pakistan

2. Muslim commercial bank limited
3. Habib Bank Limited
4. United Bank Limited
5. Allied Bank of Pakistan

The state bank of Pakistan is the Central bank of the country and was established on July
1, 1948. The separation of East Pakistan and its repercussion in the form of economic
depression has caused a lot of difficulties to the banking system in Pakistan. The network
of bank branches now covers a very large segment of national economy. The numbers of
branches have increased appreciably and there is now on branch of bank for every 3000
heads of population approximately. There is done reasonable growth in deposits from the
establishment of Pakistan. Besides this growth specialized credit and financial institutions
have also developed over the years. The Government of Pakistan in the late 90’s
introducing the need for the privatization of state owned banks and companies. The private
sector has accepted the challenge and most of the banks are privatized today. The State
Bank of Pakistan issues the shares of these periodically. Bank employees and other
common peoples can also purchase these shares and earn profit.

Quaid concept of Islamic banking:

“I shall watch with keenness the work of your Research Organization in evolving banking
practices compatible with Islamic ideas of social and economic life. The economic system
of the West has created almost insoluble problems for humanity and to many of us it
appears that only a miracle can save it from disaster that is now facing the world. It has
failed to do justice between man and man to eradicate friction from the international field.
On the contrary, it was largely responsible for the two world wars in the last half century.
The Western world, in spite of its advantages of mechanization and industrial efficiency is
today in a worse mess than ever before in history. The adoption of Western economic
theory and practice will not help us in achieving our goal of creating a happy and contended
people.
We must work our destiny in our own way and present to the world an economic system
based on true Islamic concept of equality of manhood and social justice. We will thereby
be fulfilling our mission as Muslims and giving to humanity the message of peace which
alone can save it and secure the welfare, happiness and prosperity of mankind.” (Quaid-e-
Azam Mohammad Ali Jinnah, The Founder the Islamic Republic of Pakistan on the
occasion of the Opening Ceremony of The State Bank of Pakistan on July 1, 1948.
Shariah Compliance:

The root word of is (wafq) which means 'according to'. Means conformity and accordance
with Shariah. Shariah-compliance is the core value which defines the very existence of
Meezan Bank.

Since its very inception, the Bank has had an aim that is unified across all branches, all
business units and all services: absolute and unwavering adherence to the principles of
Shariah! It is this commitment that has enabled us to achieve the remarkable successes that
Meezan Bank is known for, Alhamdulillah. With a team of the most capable and renowned
Shariah scholars comprising our Shariah Board, we cannot just deliver a Riba-free banking
experience to our customers, but also develop new and innovative banking products that
are designed to delight our customers, whilst addressing their needs - all the while staying
within the bounds of Shariah.
 TABLE OF CONTENT
Page NO
CHAPTER 1
1. INTRODUCTION 2
1.1. History and background 3
1.2. Business philosophy 6
1.3. Vision and mission statement 7
1.4. Market standing 10
CHAPTER 2
2. MANAGEMENT SYSTEM
2.1. Organizational chart 19
2.2. Corporate profile 24
2.3. Management hierarchy 29
2.4. Policy formation 31
2.5. Managerial policies 32
2.6. Credit rating 33
CHAPTER 3
3. MARKETING MIX
3.1. Product 36
3.2. Price 34
3.3. Place 35
3.4. Promotion 38
CHAPTER 4
4. FINANCIAL STATEMENT ANALYSIS
4.1. Horizontal /Trend analysis 97
4.2. Vertical analysis 109
4.3. Financial ratio analysis 112
CHAPTER 5
5. SWOT ANAYLSIS
5.1. Strengths 141
5.2. Weaknesses 141
5.3. Opportunities 142
5.4. Threats 143
CHAPTER 6
6. TRAINING PROGRAM
6.1. Divisional or Departmental detail 145
6.2. Activities or intern 153
CHAPTER 7
7. PROBLEM AND RECOMMENDATIONS
7.1. Problem 173
7.2. Recommendation 177
CHAPTER 8 180
8. List of annexures
8.1. Annexure 184