Meezan Bank,organizational Behavior [final Project] 2s2p6b

Organizational Behavior Report on Meezan Bank Limited

Faculty: Miss Sadia (Organizational Behavior) Member names: M uhammad Haris Latif Muhammad Bilal Waqas Shahid Faiza Butt Haris Mustafa

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Preamble The main purpose of this report is to highlight the functions of the management of an organization and to identify problem related to organizational behavior and point out their solutions. The project has been assigned to us by our teacher, Miss Sadia who is teaching us the Organizational Behavior. The report will cover the role of the managers working on different positions highlighting their duties, challenges, the way they solve issues and plan for higher growth. Through this process, we all will learn new things and also will be able to comment upon their processes accordingly. The report will cover the application of organizational behavior in the MBL. To complete this report we have selected Meezan Bank Ltd, a renowned Islamic Bank and largest Islamic Bank of Pakistan, having its 201 branches in Pakistan. Meezan Bank head office is situated at PNSC building 3rd floor.

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Table of Content ACKNOWLEGMENT…………….………………04pg LETTER OF TRASMITTAL……………………. .05pg ABOUT MEEZAN BANK LTD……..………….07pg PROBLEMS & SOLUTION………………….......16pg CONCLUSION……………..……………………20pg RECOMENDATION..…………………………….21pg

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ACKNOWLEDGMENT In the name of Allah, the most gracious and merciful. First, we are very thankful from core of our hearts to our Allah who helped us to make this project complete. Secondly, we would like to thank all the people who helped us through out this project. Especially, the staff of Meezan bank Gulshan Ravi Branch,Who gave us their precious time & ideas.

LETTER OF TRANSMITTAL

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May 30, 2010 Miss Sadia, Lecturer Organizational Behavior MBA NUML, lahore.

Dear Mam,

We request you to accept this brief project on Meezan Bank Ltd through a study done on “Meezan Bank Ltd” that you assigned to us at the middle of this semester.

For the reason of providing you with a detailed and complete analysis of the topic, both primary and secondary research was employed. This mostly includes study of printed materials, visit to the company’s website and some personal interviews. We would like to thank all those who provided us with their valuable advice.

It has been a privilege to work on this assignment and we have put in our utmost efforts to prepare a comprehensive report on the topic. Should you have any query concerning the report, we will be happy to discuss them with you.

Yours Sincerely Muhammad Haris Latif

INTRODUCTION WHAT IS BANK? -5-

A bank is a financial institution, which deals with money and credit. It accepts deposits from individuals, firm and companies at a lower rate of interest and gives at a higher rate of interest to those who need them. The difference between the at which it borrows and those at which it lends from the source of it profit. A bank, thus, is a profit earning institution.

HISTORY OF ISLAMIC BANKING IN PAKISTAN 1947 The inception of Pakistan as the first Islamic Republic created in the name of Islam. 1949 The Objectives Resolution was adopted by the first Constituent Assembly based on the ideology of a sovereign Islamic state. This was the first step in the conception towards Pakistan’s Constitution. 1956 The first Constitution defined Islam as State Religion and all laws to be according to the injunction of the Quran and Sunnah. 1962 The establishment of Council of Islamic Ideology (CII) was followed by the conception of the second constitution of Pakistan.

1973 The third constitution of Pakistan was ed allowing comprehensive legislation on Islamic principles and establishment of Federal Shariat Court.

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1980 CII presents report on the elimination of Interest genuinely considered to be the first major comprehensive work in the world undertaken on Islamic banking and finance. In this period President Zia ul Haq imposed profit and loss sharing s as a compulsion instead of interest bearing s, he also started deduction of Zakat from bank s in Islamic prospect. 1985 Commercial banks transformed their nomenclature stating all Rupee saving s as interestfree. However, foreign currency deposits in Pakistan and on lending of foreign loans continued as before. 1991 Procedure adopted by banks in 1985 was declared unIslamic by the Federal Shariat Court (FSC). The Government and some banks/DFIs made appeals to the Shariat Appellate Bench (SAB) of the Supreme Court of Pakistan. In 1991 these two new Islamic banks started their operations in Pakistan. 1- ALBARAKA ISLAMIC BANK. & 2- AL FAISAL ISLAMIC BANK.

INTRODUCTION TO MEEZAN BANK LTD

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MEEZAN was established as an Islamic Investment Bank in 1997 as “AL MEEZAN INVESTMENT BANK LTD”. After the successful completion and great struggle First Islamic Commercial Bank’s license was awarded to Al Meezan Investment Bank in year 2002, to start the commercial banking facilities they bought the local operations of “Socite General” (French Bank) 03 branches and started the commercial Islamic banking in the country. Meezan Bank stands today at a noteworthy point along the evolution of Islamic Banking in Pakistan. The banking sector is showing a significant paradigm shift away from traditional means of business and is catering to an increasingly astute and demanding financial consumer who is also becoming keenly aware of Islamic Banking. 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. The Bank has made fundamental and significant progress forward, and in doing so has established a strong and credible management team comprised of experienced professionals, which have achieved a strong balance sheet with excellent operating profitability, including a capital adequacy ratio that places the Bank at the top of the industry, a long-term entity rating of AA-, and a shortterm entity rating of A-1

SHAREHOLDING STRUCTURE Share Holders

Rs. in million

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%

Noor Financial Investment Company, Kuwait

3,429

49.11

Pakistan Kuwait Investment Company (Pvt.) Limited

2,095

30.00

Islamic Development Bank, Jeddah

651

9.32

Others

808

11.57

6,983

100 %

Paid up Capital

Shariah Board

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The of the Shariah Board of Meezan Bank are Internationally-renown scholars, serving on

the

boards

of

many

Islamic

banks

operating

in

different

The of the Shariah Board are:



Justice (Retd.) Muhammad Taqi Usmani



Dr. Abdul Sattar Abu Ghuddah



Sheikh Essam M. Ishaq



Dr. Muhammad Imran Ashraf Usmani - Shariah Advisor

Board of Directors - 10 -

countries.

The Board of Directors of Meezan Bank are: •

H. E. Sheikh Ebrahim Bin Khalifa Al-Khalifa (Chairman) (Minister of Housing, Ministry of Housing, Kingdom of Bahrain)

•

Mr. Naser Abdul Mohsen Al-Marri (Vice Chairman)

•

Mr. Jassar Dakheel Al-Jassar

•

Mr. Rana Ahmed Humayun

•

Mr. Mohammed Azzaroog Rajab

•

Mr. Ahmed Abdul Rahim Mohamed

•

Mr. Nawal Ahmed

•

Mr. Alaa A. Al-Sarawi

•

Mr. Mian Muhammad Younis

•

Mr. Irfan Siddiqui (President & Chief Executive Officer)

•

Mr. Ariful Islam (Chief Operating Officer)

ACHIEVEMENTS

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CREDIT RATING: JCR-VIS Credit Rating Co Ltd. (JCR-VIS) has upgraded the entity ratings of Meezan Bank Limited (MBL) from ‘A+/A-1’ (Single A Plus /A-One) to ‘AA-/A-1’ (Double A Minus/A-One) with a ‘Stable’ Outlook. The medium to long-term rating had been on a ‘Positive’ Outlook since June 22, 2009. Meezan Bank’s ratings are based on its shareholding with world-renowned financial institutions, pioneering role in the industry, strong management initiatives in continuously introducing various range of Islamic products. The Credit Rating agency JCR-VIS has expressed commendation to Meezan Bank management’s ability to deploy funds in core banking assets, which reflected healthy growth trends last years.

FIRST LADIES BANKING IN PAKISTAN: The Bank is the first in the country to introduce 'Ladies Banking' a dedicated banking section only for ladies. This new service provides an exclusive banking area as per the set Shariah principles for our lady customers in a more comfortable environment. The dedicated Customer Services Officer in our ladies only banking area will provide consultancy for a full range of our Halal banking services including, 9am to 5:30pm Online Banking, Term Certificates, Current & Saving s, Consumer Financing and 24/7 banking services.

BRANCH NETWORK: Over 200 branches are working all over the Pakistan.

OTHER ACHIEVEMENTS:

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Meezan Bank, Pakistan’s first and largest Islamic Bank has been awarded ‘Best Islamic Bank in Pakistan’ for 2009 by ASIAMONEY magazine, Hong Kong. Meezan Bank also recently won the ‘Best Islamic Bank in Pakistan’ for 2009 by Islamic Finance News of REDmoney group, Malaysia. This award was presented after conducting an extensive research and analysis over the past 12 months of Islamic financial institutions in the main markets of Asia and the Gulf States. Meezan Bank was awarded the 'Best Islamic Bank' in Pakistan for its commitment to quality, customer satisfaction, innovation and reliability. 2009 was a highly successful and record-breaking year for Meezan Bank, crossing Rs. 100 billion in deposits, Rs. 100 billion in trade finance (import & export) business, expanding its network to a total of 201 online branches in 54 cities across Pakistan and record profit-after-tax of over Rs. 1 billion.

VIEWS OF EX-PRESIDENT OF PAKISTAN: I wish Meezan Bank success in initiating the cause of Riba-free banking."

General Pervez Musharraf Ex-President of Pakistan Meezan Bank Inauguration, September 2002

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Vision Statement 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.

Mission Statement 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.

Service Quality Mission To develop a committed service culture which ensures the consistent delivery of our products and services within the highest quality service parameters, promoting Islamic values and ensuring recognition and a quality banking experience to our customers.

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APPLICATION OF ORGANIZATIONAL BEHAVIOR IN MEEZAN BANK LTD(IDENTIFICATION OF PROBLEMS & THEIR SOLUTIONS) Type of teams at Meezan Bank Ltd Problem-Solving Teams Here at MBL there is always a problem solving team. This team consists of 5-12 people who are from same department and discuss issues related to service on weekly. Like in our Saddar branch we have a team of five member who on the weekly basis discuss problems, and ways of improving the service of the branch

Self-Managed Work Teams Our Saddar branch itself is an example of self-managed work teams. Our branch comprises of 15 persons who take on the responsibilities of their former supervisors. The whole branch work under the supervision of branch manager and operational manager

Virtual Teams Here at MBL virtual teams are IT professional, the IT department in MBL work virtually when there is problem in any PC they can control it through remote access and resolve the problem when they are not physically present.

Groups at Meezan Bank Ltd The employees working in group are totally formal group. Both the command and task group are their in MBL. Like operation staffs are the example of command group because they all work under the supervision of manager operation. Similarly sales teams of MBL are the example of task group because they work together to achieve specific goal i.e. raising deposit of the bank.

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LEADERSHIP AND POWER CENTRE As per financial highlights of the March quarter Mr. H. E. Sheikh Ebrahim Bin Khalifa AlKhalifa is chairman. Delegation of power with desired authority spread as per uniformed hirarachy of the banks amongst its strategical, tactical and operational level and customer not suffered any time in order to avail any facility and receive quick response. Whereas as staff is concerned despite some recession and tough economic period which also depressed Meezan Bank, our worthy President arranged a Eid get together with all of us and assured that no one should keep in mind that he is unsafe with job but just focus on to increase the business of the Bank with same zeal and zest. It was a motivational effort which I think is a necessary toolkit to fire off the rumors of right sizing or restructuring of the organization. The coordinated power sharing seems balanced power centre leadership and no dependency required for any segment. MOTIVATION ACTIVTIES Besides banking operation bank is involved in other activities such as Cricket matches are organized by the bank in domestic tournaments. Events Occurred Training Department of the bank is responsible to train each and every staff in order to provide best quality services to its customers and due to the reason the Meezan Bank has managed to achieve top level in the market and attain desired customer satisfaction.

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JOB SATISFACTION 1. Get together (annually) of Staff at some pleasant atmosphere 2. Bonus, Privilege Leave, medical and other benefits 3. Satisfactory appraisal system as compared to other banks compelled its employees to be loyal with the bank. Results of and Job Satisfaction The heroic efforts made by the team of Branch Banking Operation the bank has achieved target of its advances and improved the figures to Rs.100 billion in the year 2009 an increase of 100% as compared to December 2008.

LACK OF MOTIVATIONAL FACTORS Motivating employees to perform up to their potential is the key to maintaining a productive, successful business. Ways in which you can motivate employees - Interact - Talk to your employees regularly. Recognition & Appreciation - A job well done should be appreciated and encouraged. Pay them Right - Pay employees for what they are worth and they will be happy to work. New challenges - Give employees new and interesting challenges to keep them stimulated and learning however following are the brief discussions on motivational factors of MBL are. HR P0LICY The policies of HR are not clear to the employees. The bank should conduct training session to enrich the employee knowledge about the policy and procedure. JOB SECURITY Due to global slump in general and particularly in Pakistan Banking Industry invited downsizing therefore the bank employees always feel insecure regarding Job Security. Proper and right information on time always courage employees and announcement of effective policies and procedure motivates employee regarding their jobs and management must give proper attention to grapevine for enabling to reduce further misconceptions. (13

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FAVORITISM / DISCRIMINATION As like it become culture of organization to change the norms by higher level and give undue advantages to personal liking employee which frequently discourage other potential employees, as one employee wearing the jeans in routine days and someone bestowed with higher increment unless he doesn’t complete his own description of work and no steps taken on coming late and absenteeism. Employees always seek justice of work and hopes for better results and norms must be followed by all levels and rules and regulations must be implemented meticulously for the satisfaction of employees as job satisfaction is very necessary. Learning and Development Training tends to be done for current job, aims to improve efficiency. Keeps the employee up to date with changes in the field, can be external or ‘in-house’. Meezan Bank should also give awareness for importance of training, however they have already taken many steps for that and introduced in-house trainings, which is still not up to the desired level and needs much improvement. Rewards/ Bonuses Bank provide bonuses to employees on EID Festivals however due to global crises and huge loses, MBL is unable to provide the same to the staff, which increases de-motivation in employees and no steps shown for the motivation of extraordinary performer. As all people aware about the market however some important announcements/ emails always encourage employees and some special announcements / policies should be announced for outstanding performer as to differentiate between them. There are various other factors which motivate the employees such as Takaful coverage, detailed leave structure, compensation and other HR benefits.

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Beside the above discussed there are some other problems or challenges for the Meezan Bank Ltd. •

High charges for different activities such as pay order as compared to competitors.

•

Lack of promotions and advertising of their products and services.

•

Lengthy & extensive documentation

•

Centralized procedures making process slow

•

Weak marketing strategy, Target market not identified

•

Risk Averse, approach of Head office.

•

Meezan Bank Limited has no Credit card facility

•

Restricted Shariah based policies

CONCLUSIONS The organization has been growing both in size and profit for past few years and repute in the market is good. The employee turnover is very high which they have to cut down as they are losing a number of good trained employees due to its poor policy. The year 2010 is expected to offer increased competition in the secured assets business as more Islamic banks are in the market. With their focused strategy and product development initiatives planned for the year, Meezan Bank is strongly positioned to meet these challenges. The bank has very well repute in the market. Overall bank is going well and doing a good business but there are few problems for that we have tried to give few recommendations that might help company to improve.

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RECOMMENDATIONS On the basis of my experience with bank during the course of job, we recommend following suggestions: 1. PERFORMANCE APPRAISAL: In the case of performance appraisal, management should evaluate the performance of the employees on merit and recommend their increments and promotions only on the basis of real performance. Employees should be treated unbiased and appraisal should be performance based not favoritism and likeness based. This not only appreciates the employee but also improves his work and satisfaction, his practice will surely encourage and motivate the employees for improving their individual performances, which will lead towards overall improve in the situation. 2. PROPER JOB ROTATION: Employees should be rotated after certain periods in order to enhance their capabilities and make them able to compete in the changing environment of the market. In this way, they will feel interested during working in different departments. The best way to improve employee’s performance is to revolve them within organization often a specified period of time. They will not only have leaning and training opportunities butt also they feel attractiveness in doing new job and his performance improves. 3. FAIR BENEFITS: Although most of the employees are unsatisfied but even then turnover rate is low. This is due to the reason that some of them are on contractual bases so that they cannot avail market offered opportunities. On the other side they may not be getting better opportunities. Although the return is low for them yet it is reasonable, that’s why they are still hero. They should be awarded with more benefits to improve their performance and overall productivity, as satisfaction of internal customers leads towards satisfaction of external employees.

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4. OVER LOAD OF WORK: The problem, which I have noticed faced by the employees in absence of an employee, can be removed by hiring two employees in each department. In absence of any of the employee other will be able to do whole work and employee from other department have not to interfere in this department This will decrease over load of work. Problem of shortage of employees can also be removed by adopting the above- mentioned recommendation. 5. CUSTOMER RELATIONSHIP: Knowing the customers and their needs is the key to business success. By attitude the manager can improve the relationship with the customers. By having the understanding, what a customer wants, the manager can improve the relationship with the customers. Meezan Bank should understand that the commitment to satisfy customer’s needs must be fulfilled within a professional and ethical framework. They should observe a culture of high ethical standards, based upon development of right attitude. Although Meezan Bank has been improving its corporate behavior, even then they should continue their effort for better corporate behavior. There is a need of improving customer relations in Meezan Bank. For attitude improvement special courses should be arranged under specialized teachers, through lectures, seminars and other interactive techniques. It will cost the bank but will be more profitable for the bank in the long run. 6. EMPOWERMENT OF EMPLOYEES: Commitment is a function of empowerment down the line, therefore, the future of Meezan Bank lies in the fact that they should remain committed and necessary empowerment should flow regularly to lower levels of hierarchy, so that the performance delivery is made more flexible. With the empowerment of lower level employees they will feel secure in the organization and they will work with devotion for the betterment of the organization.

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7. MARKETING CULTURE: The employees should be given special training for marketing. Proper action should be taken for marketing so that the increased sale of different products will result in increase of the profit of the bank. The employees of the bank should be trained with the basic concepts of the marketing under the guidance of the experts. 8. HEALTHY ACTIVITIES: There is lack of healthy and entertainment activities like excursions on weekend, parties and other important days, celebration in their tidy life. Such activities should be encouraged at once in a month.

References: • www.meezanbank.com • vww.encarta.com • http://wvvxv.historyworld.net •MeezanBank • Meezan Bank Annual Report 2009

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