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Deposit Accounts and Term Certificates

Profit Calculation and Distribution Method

Meezan Bank’s Savings Accounts (including Meezan Bachat Account, Karobari Munafa Account, etc.) and (COIIs, including all term deposits e.g Meezan Amdan, Meezan Providence, Monthly Mudarabah Certificate, etc.) are based on the Islamic principle of Mudarabah. Mudarabah is a form of partnership in which one partner invests funds (called the Rab ul Maal) while the other partner is the working partner (called the Mudarib) and is responsible for prudent management of funds. During the month, the Bank uses these funds /deposits to provide Islamic Financing to other Customers on the basis of Murabaha, Ijarah, Istisna etc. At the end of the month, the Bank consolidates the Profit figures, and calculates the Gross Income. The Gross Income is calculated after deducting costs and expenses directly incurred in deriving that Income.

 

Gross income of the deposit pool is shared between the Bank (Mudarib) and customers (Rab ul Maal) on the basis of a pre-determined profit sharing ratio announced at the beginning of the period. The profit is distributed to the account holders on the basis of predetermined weightages, also announced at the beginning of the month, based on their respective category/tiers. In case of a loss, as per the rules of Mudarabah, the deposit pool shall bear the loss in the ratios of investment of depositors.

 

 

Profit Sharing Ratio

 

The current Profit Sharing Ratio between MBL (as Mudarib) and the Depositors (as Rab ul Maal) is as follows:

 

Rupee Deposit Accounts and Certificates

Meezan Banks profit sharing ratio (as Mudarib) ---- 50% of Gross income.                                    
Depositors profit sharing ratio (as Rab ul Maal) ---- 50% of Gross Income.


 

Dollar Deposit Accounts and Term Certificates

Meezan Banks profit sharing ratio (as Mudarib) ---- 50% of Gross income.                                    
Depositors profit sharing ratio (as Rab ul Maal) ---- 50% of Gross Income.

 

At the beginning of the month Meezan Bank announces any change in the above mentioned Profit Sharing Ratio* for the coming period.

 

 

 

Profit Sharing Weightages

 

Profit Sharing Weightages for various categories / tiers of deposits and COIIs are also announced at the beginning of the month for the coming period. However, any change in the Profit Sharing Weightages for the next period will also be announced by the Bank at the beginning of the month.

 

At the end of the month, the Bank may unilaterally reduce its profit sharing ratio for the benefit of depositors.
Amount of Profit shall be derived and announced on monthly basis.

 

Announcement of any change in Profit Sharing Ratios and Profit Sharing Weightages for the coming period by the 1st of that month.

 

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