The customer’s deposits base of the Meezan Bank has touched above Rs 435 billion out of total Rs 1.1 trillion deposits of Islamic banking in Pakistan, while its six month profit surged to Rs 2.67 billion till June 30, 2015, said Consumers Banking and Marketing Group Head Senior Executive Vice President Muhammad Raza.
“The Islamic banking had achieved Rs 1.1 trillion in last 13 to 15 years period out of total banking share of Rs 9.6 trillion. It was a great achievement for the Islamic banks in Pakistan,” he said.
Talking to Pakistan Today in an exclusive interview, Raza said, “Meezan Bank is still striving hard to bring more and more customers towards Islamic Banking and initiating ‘Aasan Account’ for low income group, who can open their account in the Bank only on Identity Card.” There would be no need of any other documents for the account, he informed.
“The central bank had given approval for these accounts especially to the Meezan Bank, but there would be a cash limit on this account, which have to be decided.” The opening of these accounts would start from next month, he told Pakistan Today.
He said the bank is giving profit from 4 percent to 8 percent on deposits, depends on short and long terms according to Shariah as per rules of the State Bank of Pakistan (SBP).
He said few banks have applied to the central bank for converting their whole banking operation on Islamic Mode of Banking. In next few months, Faysal Bank and Summit Bank will convert their whole banking operation on Islamic Banking, he said.
Raza said like car and house financing, the bank is also mulling to commence financing for the small products like laptops, generators, and other durable household goods, which are the demand of the time.
The bank, Raza said, has signed a deal with Ufone for branchless banking to expand its customers range throughout the country. The bank is studying the fee and other charges structure according to the Islamic way and later it would be announced any time next month.
According to him, the Car and House financing products of the Meezan Bank are very popular among the Shariah loving people and its continuously rising in Pakistan. The bank is giving partnership in house purchasing loans up to 70 percent to the people, he said.
Because of the popularity of the Islamic Banking, the Meezan Bank has expanded its Islamic banking operation in 125 cites of the country, where it had established around 500 branches in last few years, Raza said, adding that the demand of such Islamic Banking is still coming other cities of all provinces and by the end of this fiscal year (2015-16), its branch network would be expanded to 550 branches.
First time in Meezan Bank history, the bank took part in the Hajj form distribution and balloting and also set up a Haji camp of 17,000 hujjaj. These hujjaj are being trained by Muftis to perform Hajj and Umrah for next month. The bank has also provided them all kind of facilities, including booking of air tickets and residences etc in Makkah and Madina.
Recently, the bank has launched Kafala (a kind of life insurance) for their clients and those who are paying money regularly in Kafala scheme, the bank will support all those account holders and take care of their families after their death.
While the Bank is investing in the mutual funds, Sukkuk bonds etc to get profits on its deposits and it did not use any kind of SBP’s product like T-bills where we feel the concept of interest (Sood).
Meezan Bank has announced a half-yearly profit of Rs 2.67 billion for the six months ended June 30, 2015, a year-on-year increase of 19 percent.
Earnings per share of the bank translated into Rs 2.67 compared to Rs 2.25 last year. Its deposits increased by 14 percent from Rs 380 billion in December 2014 to Rs 435 billion in June 2015.
State Bank governor has urged the country’s Islamic banks to develop ways to reward their customers in line with a surge in the sector’s profitability, or face regulatory action.