Professional Documents
Culture Documents
Islamic Banking in Pakistan
Islamic Banking in Pakistan
Course:
Analysis of Pakistani Industries
Submitted by:
Junaid Zamir
SP06-BB-0010
Submitted to:
Sir Afaq Ali Khan
Submission Date:
th
09 May, 2009
Table of Contents
1. Acknowledgement ……………………………………………………………………... 3
3. Principles ………………………………………………………………………..…………4
4. Terminologies ………………………………………………………………….……….. 5
6. History …………………………………………………………………………….……....9
We are grateful to our teacher Mr. Afaq Ali Khan for teaching us this course
of ‘Analysis of Pakistani Industries’. His versatile knowledge in this discipline
and unique teaching style has developed our knowledge and cleared many
ambiguities.
We are all very grateful to him for assigning this challenging presentation,
which will further help us in evaluating many interrelated dimensions in
establishing quality control systems in any business.
Finally, we thank all our other professors and teachers who has taught us in
different fields as finance, marketing, management and other areas of
specialization and made us able to think differently as an intellectual and
specially to those who has directly or indirectly supported us with their
assistance and guidance to compose this project report and accomplish
broader vision to visualize things.
Principles
Takaful
Sukuk
Murabaha
It is a contract for purchase and resale and allows the customer to make purchases
without having to take out a loan and pay interest. Bank purchases the goods on behalf of
the customer, and re-sells them to the customer on an agreed profit margin and the
customer pays the sale price for the goods over installments.
Musharaka
Mudaraba
Ijarah
Automobile
Auto ijarah is simply a rent agreement under which the vehicle shall be
given to you on rent for a period, agreed at the time of the contract.
Islamic bank purchase the vehicle and rents it out to the consumer for
a minimum period of 3 years and upon completion of the ijarah period
the consumer get owner ship of the vehicle through a separate sale
Home finance
PRODUCT TREE
How it is Different ?
• The bank entirely depends upon the fixed deposits and does not
borrows money from the central bank.
• Overview
• Assets Rs 276 Bn (asset base of entire Banking System Rs 5,653
Bn)
• Meezan Bank
• Bank Islami
Branch Network
• Shariah interpretations
It is the legal framework within which the public and private aspects of
life are regulated for those living in a legal system based on fiqh for
Muslims living outside the domain. Sharia deals with many aspects of
day-to-day life, including politics, economics, banking and business.
On the other hand, there are also those who believe that no form of
banking can ever comply with the shariah. The current issue with
Islamic banking is the difference of opinions given by different shariah
commite which create doubt in the mind of people.
• Shariah experts
The hasn’t been any such Islamic product developed by the Islamic
banks. Till now they have modified products from conventional banking
which creates doubts in the mind of a general user. Shariah
compliance leads to additional time, greater product complexity,
higher skills requirements, and more onerous documentation relative
to conventional banking.
SWOT analysis
STRENGTHS WEAKNESSES
1. Lack of standardization
1. Advantages of religious
across the Muftis /scholars of
proposition in a country
the country and among the
made on name of Islam i.e.
scholars and bankers.
Pakistan.
2. Disadvantage of
2. Competitive advantage:
proposition is that there
Less marketing is required
1. A lot of legislation is
1. More opportunities now lie
required for Islamic banking
in Islamic banking as it has
world wide and especially in
been accepted by BASEL, WB,
non-Muslim countries; even in
ADB, international agencies,
Pakistan some legal loopholes
multinational corporations,
are present in its proper
non Muslim governments, etc.
implementation.
with creation of big sukuk and
2. Comprehensive Islamic
Islamic deposit base in Gulf
economic and banking
and Malaysian regions.
models have yet to develop
2. Traditional interest based
or they are not in their
banking will have to
maturity stage to provide a
defend through heavy
blueprint of economic
marketing and advertising in
development and prosperity.
Muslim countries which off
3. IT developments and
course reduce their
Research in latest Banking
Problems
• The problem with these shariah boards is that they give conflicting
opinions that result in confusion and doubts.
• Malaysia has proposed to setup standards for both IB and IF. such
standards would result in consensus instead of confusion or conflict.