Al- Sadiq (A.

S) Institute of Islamic Banking, Finance & Takaful

By: Jawaid Iqbal

Rajab 8, 1429 Saturday July 12, 2008
Banking System In Pakistan
• Conventional Banks

• Islamic Banks

• Conventional Banks – Islamic

Branches/Windows
 Major Operations Sides of Banks

Assets Side Liability Side

Operations Operations

Advancing Taking
Loans Deposits
 Major Operations Sides of Banks

Assets Side Liability Side

Operations Operations

Advances:
Running Finance Deposits:
Demand Finance Demand
Export Re-Finance Savings
Letter of Credit Term deposit
Letter of Guarantee
Consumer Finance
 Major Operations Sides of Banks
Islamic
Assets Side Banking Liability Side
Operations Operations

Advances:
Murabaha Deposits:
Musharika Current A/c
Mudaraba Investment A/c
Ijarah (Mudaraba /
Salam Musharika)
Istisna
 Bank Accounts
Conventional Islamic
Banking Banking

Current Savings Current Investment

Account Account Account Account

Both Current Accounts are same in Conventional & Islamic banking

 Bank Accounts
Conventional Islamic
Banking Banking

Current Savings Current Investment

Account Account Account Account

Nature Nature Nature

DEBT DEBT PARTNERSHIP
 Liability Side - Comparison
Current Accounts
 Conventional Current Accounts primarily offers
two benefits
 Safety & Withdrawal facility
 Extra Services linked to the balance in the
account.

 In Islamic Banking Current Accounts are also

accepted on the concept of Qard/loan.

 Repayment of funds can be guaranteed by the

bank.
 However, extra benefits linked to the balance
cannot be offered.
 Bank may use the funds at its own discretion.
 Liability Side - Comparison

Saving / Term Deposit / COII

 Conventional Saving & Term Deposit Accounts
primarily offers two benefits
Guaranteed Investment
Regular Interest Payments

 In Islamic Bank, the Investment accounts can be

based on:

◦ Musharika
◦ Mudaraba

 Many Islamic banks have successfully launched

such schemes based on the above modes.
 Islamic
Banking

Sale
Debt Partnership Service

Current Future/
Musharika Modarabah Mixed Ijarah Juala Present/Spot
Account Forward

Murabaha Istisna

Salam
Musawama

Courtesy: Brother Ali Abbas Abidi