Islamic Finance

Topic: Al-Baraka Islamic Bank (AIB)

Group
Yawar

Abbas

Members
129

Usama

Farooq

136

Qaiser

Khalil

138

Hamza

Naeem

150

BBA-4th S.S

What is Al Baraka Islamic Bank (AIB)?

AlBaraka Islamic Bank (AIB) is a member of Albaraka Banking Group (ABG) which is
a Bahraini Joint Stock Company listed on Bahrain and Dubai stock exchanges and one
of the well-known leading international Islamic banks.

Albaraka Banking Group is the biggest Islamic banking group listed on the Bahrain
Stock

Exchange in terms of capitalization. It has been rated by Standard & Poor's as BBBwith a short-term rating of A-3.

The authorized capital of ABG is US$1.5 billion, while the total equity amounts to
about US$ 1.59 billion. With assets of US$11.2 billion, the Group has a wide
geographical presence in the form of subsidiary banking Units in 12 countries, which in
turn provide their services through more than 250 branches. These banking Units are
Jordan Islamic Bank/ Jordan,

History

Al-Baraka Islamic Bank (AIB) has the honor of being the pioneer
of Islamic banking in Pakistan and has been operating in the
country as branches of Al-Baraka Islamic Bank Bahrain since
1991.

Over the years, the bank has successfully developed and

maintained its identity as one of the leading providers of a host of
banking products and services in strict compliance with Shari ah
principles. Currently operating with 20 branches in 11 major
cities of the country,

AIB offers a wide array of Islamic financing products such as

Murabaha, Ijara, Musharaka and Islamic Export Refinance,

Al - Barakas Commitment to Islamic Banking

Al-Baraka

Islamic Bank and Al-Baraka Banking Group

are fully committed to develop and promote an
integrated Islamic Financial System. Compliance with
the rules and principles of Islamic Shariah is the core of
the banking and financial activities and its philosophy.
All its banking activities are very closely regulated by a
Board of Shariah Advisors based at the Head Office in
Bahrain and a Shariah Advisor based in Pakistan, to
ensure strict compliance with the highest standards of
Islamic Banking principles.

Present Status in Pakistan

Currently the authorized capital of Al Baraka Islamic is US $

1.5 billion, while the total equity amounts to about US $ 1.5
billion. The Group has a wide geographical presence in the form
of Subsidiary banking units in, which in turn provide their
services through more than branches. Currently there are 496
employees working at different branches of Al Baraka Islamic at
Pakistan.

With assets in excess of Rs. 70 billion; a workforce of 1400

professionals and a network of 89 branches in 37 cities and towns
across Pakistan.

Islamic modes followed by AIB

Mudarba

Musharka

Murabaha

Murabaha LC

Takaful

Ijarah

Istisna'a

Murabaha
Murabaha

is an Islamic form of asset financing and has

a fixed term and a predetermined profit. In a Murabaha
the bank buys a specific asset that the customer wants,
and after having owned it and becomes its property, it
sells to the customer at the buying price plus a profit at a
rate agreed at the time of entering into the contract.
Murabaha helps enterprises and commercial customers
by serving their project and business needs.

Murabaha LC

The customer submits an application to the bank to open a letter of credit

for the purchase or import of goods, indicating that it wants to buy the
goods from the bank upon arrival on a Murabaha basis.

The bank will open a letter of credit accordingly, and the price will be
paid by the bank in its capacity as the buyer of the goods.

Upon the arrival of the goods, the bank sells them to the customer on a
Murabaha basis at an agreed price which includes the cost of goods, a
profit and service fees

Istisna'a
Istisna

is an Islamic form of financing used to finance

construction and industrial projects, such as the
construction of buildings and so on. The unique feature
of Istisna'a is that it allows the selling of an asset which
does not exist at time of the contract. The payment can
be in immediate cash or may be in the form of deferred
payments.

Products of AIB

Al Baraka Basic Banking (Current account)

Khazana Account (saving account)

Sarparast Family Takaful

ABPL Auto Ijarah

Al Baraka Mahana Barkah

Al Baraka Mahana Amadani

Tifl-Young Savers Accoun

Housing Musharakah

Al Baraka Basic Banking

Islamic concept

The ABPL Basic Banking Account is based on the Islamic principle of Qarz, whereby the customer is the lender and the bank is the borrower. Customer funds are invested
with utmost care in halal business ventures only, and are payable, on demand, with neither any addition and/or penalty.

Khazana Account
Islamic concept

Al Baraka Khazana account is based on the Islamic concept of Mudarabah. Under this arrangement the customer is Rab-ul-Maal (Investor) and the bank is
Mudarib (Fund Manager). Customer deposit is invested in profitable business ventures which are legal and Shariah compliant. The profit/loss is shared on
a pre determined ratios. As Fund Manager, the bank is entitled to a part of the profit, whereas profit distribution amongst the depositors and shareholders is
made according to the weightages assigned to their investment at the beginning of each month.

Sarparast Family Takaful

Salient features

Saving for long-term needs in the future.

Regular contributions invested in a diversified portfolio of Islamic funds

ranging from Sukuk to Mutual Funds, based on the customers risk appetite.

Flexible plans in terms of frequency of payment.

Takaful cover allows family to receive funds, in case of death of the participant.

Al Barakas Sarparast, safeguards your future, while giving you the financial
freedom you deserve. It helps you plan necessary events of your life from
marriage to education, retirement to vacations or pure savings in accordance
with the Islamic principles.

Islamic concept

Al Baraka Bank (Pakistan) Ltd. in association with Pak-Qatar Family Takaful

Limited is offering an exclusive product Sarparast Family Takaful Plan.
Sarparast is a Shariah Compliant savings and investments plan exclusively
designed to cater to your Takaful needs.

ABPL Auto Ijarah

Salient
Shariahfeatures
compliant.

Quick processing.

Most affordable rentals.

No upfront Takaful
Insurance) charges.

Islamic concept

(Islamic

No upfront registration charges.

No upfront rentals before delivery

of the vehicle.

Payable in tenure of 24 to 60
months.

Minimum processing charges.

It is our commitment to put our customers values foremost and providing them
with the banking solutions that are in line with Shariah Principles.

Al Baraka products and services are approved by the banks Shariah Advisor
Justice (R) Khalil-ur-Rahman Khan, who has served as Chairman on the
Shariat Appellate Bench of the Supreme Court of Pakistan and has been the
Rector of the International Islamic University, Islamabad. He is also currently
serving as a member of the Shariah Board of the State Bank of Pakistan.

Al Baraka Mahana Barkah

Islamic concept

Al Baraka Mahana Barkah Account is offered on the basis of Mudarabah principles of Islamic Banking.
Mudarabah is a special kind of partnership where one partner gives money to another for investing in Shariah
compliant avenues. The investment comes from the first partner who is called Rabb-ul-mal (Customer), while the
management and work is an exclusive responsibility of the other, who is called Mudarib (Bank).

The Bank will announce weightages and profits sharing ratios 3 days before the beginning of the month. The Bank
will share the profit at the gross income level and will subsequently credit the proportionate profit in the
customers account at the end of the month. In case of loss, the customer will bear the loss as per the ratio of his
investment.

Latest profit sharing ratios and weightages are available on our website or can be obtained from any branch of Al
Baraka Bank.

Al Baraka Mahana Amadani

Islamic concept

Al Baraka Mahana Amadani is based on the Islamic concept of Mudarabah. Under this arrangement the customer is Rab-ul-Maal (Investor) and the bank is Mudarib
(Fund Manager). Customer deposit is invested in profitable business ventures which are legal and Shariah compliant. The profit/loss is shared on a pre determined
ratios. As Fund Manager, the bank is entitled to a part of the profit, whereas profit distribution amongst the depositors and shareholders is made according to the
weightages assigned to their investment at the beginning of each month.

Tifl-Young Savers Accoun

Islamic concept

Al Baraka Tifl- Young Savers Account is offered on the basis of Mudarabah principles of Islamic
Banking. Mudarabah is a special kind of partnership where one partner gives money to another for
investing in Shariah compliant avenues. The investment comes from the first partner who is called
Rabb-ul-mal (Customer), while the management and work is an exclusive responsibility of the other,
who is called Mudarib (Bank).

The Bank will announce weightages and profits sharing ratios 3 days before the beginning of the
month. The Bank will share the profit at the gross income level and will subsequently credit the
proportionate profit in the customers account at the end of the month. In case of loss, the customer
will bear the loss as per the ratio of his investment.

Latest profit sharing ratios and weightages are available on our website or can be obtained from any
branch of Al Baraka Bank.

Housing Musharakah

AlB also provides the facilities of Housing Musharakah to his

customer. AlB contribution is 80% of total investment, and client
can contribute 20% of the investment. The employee can pay
rental and installments to bank in order to get total share of the
property or land which they jointly buy. The period is from 1 to
15 year.

Car Ijarah
AlB

provide the facilities of car Ijarah/leasing to his

customer. AlB provided fund up to 4 million to his
customer for the period of 2 to 5 year. No interest
concept is involved, therefore profit margin is not
announced before transaction .finance on the concept of
asset based financing. Therefore no chance of default for
bank.