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Introduction:
Bank-Al Islami The Idea:
The epochal idea of Bank Al-Islami was conceptualized by Jahangir Siddiqui & Company Limited and DCD Group in late 2003. Mr. Hasan A. Bilgrami was appointed as Adviser to the sponsors on March 16, 2004 to formalize the idea. He presented the concept paper of Bank Al-Islami to sponsors on March 24, 2004. A detailed business plan was then prepared and a formal application was submitted to the State Bank of Pakistan on May 26, 2004. On September 26, 2005, Dubai Bank joined the Sponsors and became one of the founding shareholders of Bank Al-Islami by investing 18.75% in the total Capital.
Milestones:
2004:
24 March 2004 26 May 2004 19 August 2004 18 October 2004 Concept paper of Islamic Bank presented to Sponsors; JS Group and DCD Group Application for the license of an Islamic Bank was submitted to SBP Bank Al-Islami received the No Objection Certificate from SBP Bank Al-Islami became a legal entity after SECP granted it an incorporation certificate
2005:
31 March 2005 26 September 2005 SBP Governor, Dr. Ishrat Hussain issued Islamic Banking license to Bank Al-Islami Dubai Bank became founding shareholder of Bank Al-Islami by investing 18.75% in the total Capital
2006:
2007:
2008:
2009:
4th Nov 2009 31st July 2009 2nd July 2009 March 31 2009 Bank Al-Islami crosses 100,000 customer base Bank Al-Islami sign NDA with Citibank for Auto Financing Portfolio PACRA upgrades entity rating of Bank Al-Islami Pakistan LImited. Bank Al-Islami witnesses phenomenal increase of 32% in Deposits and 39% increase in Customer base over the same period last year.
2010:
2011:
August 2011 Visa Debit Cards launched
Our Vision:
The Vision of Bank Al-Islami is to be recognized as the leading Authentic Islamic Bank.
Our Mission:
The Mission of Bank Al-Islami is to create value for our stakeholders by offering Authentic, Shariah Compliant and technologically advanced product and services. We differentiate ourselves through: Authenticity Innovation Understanding our client's needs Commitment to excellence, and Fast, efficient and seamless delivery of solution. As a growing institution, the foundation for our performance lies on our human capital and Bank Al-Islami remains committed to becoming an employer of choice, attracting, nurturing and developing talent in a transparent and performance driven culture.
Financial Highlights:
Amounts in Rs. Million (otherwise specified) Total deposits 1,778 Total assets 4,025 Total financing 959 Total Investment 412 Finan cing to Deposit ratio Return on Assets 54% 3,864 40% 5,020 51% 6,813 37% 13,732 44% 21,067 40% 3,931 6,343 10,457 16,670 20,110 14,446 19,085 34,272 45,036 58,821 9,934 12,478 27,987 38,198 50,568 2006 2007 2008 2009 2010 2011
-0.21%
-0.27%
-0.29%
-1.43%
0.10%
0.70%
Return on Equity
-0.42%
-1.00%
-1.07%
-10.37%
0.98%
7.71%
-0.04
-0.12
-0.11
-0.93
0.09
0.78
No of BRANCHES
10
36
102
102
102
102
Organizational Structure:
Board Of Directors:
The Board of Directors of Bank Al-Islami comprises of eminent representatives. These include Chief Justice (R) Mahboob Ahmed (Chairman), Mr. Ahmed Randeree, Mr. Ali Raza Siddiqui, Mr. Ali Hussain, Mr. Hasan A. Bilgrami, Mr. Hicham Hammoud, Mr. Marwan Hassan Ali ElKhatib and Mr. Shabir Ahmed Randeree. Details of the members of our Board of Directors are given below:
Sponsors:
Bank Al-Islami is a joint venture among three financially sound and progressive shareholders, namely, DCD Group, Dubai Bank and Jahangir Siddiqui & Co. Ltd. Details of our sponsors are given below:
* The initial public offering of Bank Al-Islami took place in March 2006. Bank Al-Islami shares were formally listed on the Karachi Stock Exchange on April 17, 2006.
SWOT Analysis:
Strengths:
2nd largest Islamic bank of Pakistan in term of deposits. Interest free banking in all walks of banking sector which truly supports the Islamic ideology of an Islamic financial system. As compared to traditional commercial banks charges less to the customers as it also works on Islamic basis of welfare. Bank Al-Islami product positioning is very successful. It targets the areas like salaried person, business people and self-employed person with. Its product
Weaknesses:
Being a bank based on values and financial system given by Quran & Sunnah, it has a very limited scope amongst the banking sector. Due to low rate of returns and the risk of loss people dont tend to invest. Limited amount of offices and ATMs around Pakistan, mostly available in only urban areas of Pakistan. Limited amount of credit available as compared to other commercial banks. Normally to a naked eye the operating system of an Islamic bank looks same as a commercial bank so people are not being able to spot the differences because of lack of publicity and other factors that are effecting its growth
Threats:
Home Construction: So you want to build your Dream home rather than buy a ready made one? You make the design; well help you build it. Construction Tenure Financing Tenure Financing Range Bank Investment Ratio Prepayment Option available Maximum 2 Years Minimum 2 Years (excluding construction period) Maximum 20 Years (including construction period) Rs. 200K 10M Salaried / Selected SEPs*: Up to 80% for financing upto Rs. 10M. Up to 70% for financing > Rs. 10M. Businessmen/NRPs: Up to 70% for all financing amounts. No Penalty apply after one year. In case Customer applies for purchase of early units or pre-payment within 12 months after disbursement, additional Musharakah Units will be revalued at 5% higher than face value.
Home Renovation: Thinking of remodelling your kitchen to fulfill your wife's long awaited wish, or build a study area for your kids, or a cozy library for your parents, or just want to give your home a new look? You plan it; we'll help you renovate it. Construction Tenure Financing Maximum 6 months 2-7 Years
Home Replacement: Don't lay the foundation of your Dream home on interest. If you already have a Conventional Mortgage loan and want to switch to Shariah compliant means of Financing, we'll help you transfer it. Financing Tenure Financing Range Bank Investment Ratio Prepayment Option available 2-20 Years Rs. 200K - 10M Salaried / Selected SEPs*: Up to 80% for all financing Businessmen/NRPs: Up to 70% for all financing amounts. (* Doctors, Engineers, Architectures, Chartered Accountants) No Penalty applies after one year. In case Customer applies for purchase of early units or pre-payment within 12 months after disbursement, additional Musharakah Units will be revalued at 5% higher than face value.
The MUSKUN Home financing facility is based on the principle of Diminishing Musharakah and Ijarah. The Diminishing Musharakah transaction is based on Shirkat-ul-Milk where you and the Bank participate in ownership of a property. The share of the bank is then leased to you on the basis of Ijarah and is divided into a number of units. It is then agreed that you will buy the units of the bank periodically, thereby increasing your own share till all the units of the Bank are purchased by you which will make you the sole owner of the property. Till that time, you pay the Bank rent for its units leased to you. The rent keeps on decreasing as your ownership in the property increases and that of the Bank decreases.
How It Works: You will approach Bank Al-Islami and inform about your needs of financing for Home Purchase, Construction, Renovation or Balance transfer facility You will then submit the filled Application Form along with the required documents and a cheque for processing fee. Our Business Executive will guide you during the whole process. The Bank will conduct verification of your residence & office addresses as well as those of the references provided by you The Bank will then conduct your Income estimation to determine the maximum financing that can be provided to you. In case you are Self Employed, our agent will approach you for the necessary income details and documents. In case you are Salaried, we will approach your employer for this purpose A legal opinion is then obtained by the Bank on the property documents submitted by you Valuation of the property is done to determine its Market value The Bank then issues you an offer letter for the financing amount you qualified for based on your evaluation After your acceptance, a Shirkat-ul-Milk (Musharaka) Agreement is signed between you and the Bank, whereby, the Bank and you will become joint owners (partners) in the Musharakah property.
Concept of Ijarah: Ijarah means to give something on rent is a Shariah compliant alternative to Conventional leasing where Bank acts as a Lessor and you act as a Lessee. The Lessor (Bank) allows the Lessee (You) to use the vehicle owned by the Lessor in return for a monthly rent. The following are rights and responsibilities of the Lessor and Lessee in an Auto Ijarah arrangement: The Lessee has the right to use the vehicle whereas the ownership rests with the Lessor. All liabilities resulting from the ownership (Islamic insurance, transportation, duties etc) shall be borne by the Lessor and all the liabilities relating to use of the vehicle shall be borne by the Lessee. The vehicle will remain in the risk of the Lessor throughout the lease period. Any damage or loss caused by factors which are beyond the control of the Lessee shall be borne by the Lessor. The Lessee is liable for any damage to the vehicle caused by any misuse or negligence on his/her part. The period of lease must be determined in clear terms and the vehicle must be fully identified and quantified by both parties. The Lessor cannot increase the rent unilaterally. The Lease period will commence from the date on which the vehicle is delivered to the Lessee whether the Lessee has started using it or not. International Islamic University Islamabad. 27
Bank Al-Islami will process your application and approve or reject the credit application, depending on how you fit the banks risk criteria If the application is approved, you will sign an Undertaking to Ijarah whereby you will undertake to lease the vehicle. This document is signed in booking cases only once it arrives at the dealer
How It Works: You will approach Bank Al-Islami and identify the vehicle you want on Auto Ijarah You will fill in the Application Form and submit the required documents Bank Al-Islami will process your application and approve or reject the credit application, depending on how you fit the banks risk criteria If the application is approved, you will sign an Agency agreement with the bank whereby the bank will appoint you as an agent to identify and select the vehicle you want to lease You then enter into a Ijarah agreement with the bank, whereby the Bank will purchase the vehicle in its own name and rent it out to you subject to the terms and conditions of the Ijarah Agreement Under the Ijarah Agreement, you will undertake to pay a monthly payment for the right to use the vehicle in line with the Terms & Conditions of the Agreement Under the Agreement, all the cost associated with the ownership of the vehicle will be borne by the bank, while you will be responsible for all usage-related expenses of the vehicle At the end of the Ijarah period, you will be offered to buy the Vehicle at a pre-agreed value from the Bank or get your security deposit refunded to you by returning the vehicle to the Bank
Retail Banking:
International Islamic University Islamabad. 30
The Islami Current Account offers you the following Key salient features: A minimum balance of Rs. 1,000/- only to open the account Joint Account facility up to four joint account holders Access to the entire online branch network 102 Branches in 49 Cities Free unlimited online intercity transactions Free 1 Card, Bank Al-Islami's ATM & Debit card Access to all ATMs linked to MNET and 1 Link throughout Pakistan InterBank Funds transfer facility through ATM Facility of making instant payments at Orix terminals for grocery, fuel ,dining and other purchases Free Internet Banking service Round the clock phone Banking through 111-ISLAMI (475-264) or 111-BIP (247)111 Personalized service from Customer Relationship Officers Free Account statement facility Hold mail and Stop payment facility Safe deposit lockers (subject to availability)
How It Works: Bank Al-Islami's Islami current account is based on the Islamic principle of Qarz (loan) whereby you are the lender and the Bank is the borrower. These funds are invested in halal business ventures only so that you are 100% sure that your funds are managed in a Shariah compliant manner. The funds are payable to you on demand as and when required with neither any addition nor penalty.
How it Works: Bank Al-Islami's Islami foreign currency account is based on the Islamic principle of Qarz (loan) whereby you are the lender and the Bank is the borrower. These funds are invested in halal business ventures only so that you are 100% sure that your funds are managed in a Shariah compliant manner. The funds are payable to you on demand as and when required with neither any addition nor penalty.
How It Works: Bank Al-Islami's Islami Bachat account is a profit bearing account developed on the basis of the modes of Mudarabah. This is how it works: You provide funds to the Bank on Mudaraba basis for investment in the Banks Shariah Compliant Assets In this arrangement, you will function as a Rabbul Maal (investor in Mudaraba) and the Bank will act as the Mudarib (Manager of the Mudaraba) The Bank will form a pool of customers funds The pool provides financings to various individuals, corporate, government and other entities based on various Islamic modes of finance such as Murabaha, Ijarah, Musharakah, Mudaraba and other modes and would generate income The Bank will calculate income from the pool on a monthly basis. This income will be shared between the Bank and the Depositors as per a pre agreed profit sharing ratio
How It Works: BankIslami's Islami Mahana Munafa Account is a profit bearing account developed on the basis of the modes of Mudarabah. This is how it works: You provide funds to the Bank on Mudaraba basis for investment in the Banks Shariah Compliant Assets In this arrangement, you will function as a Rabbul Maal (investor in Mudaraba) and the Bank will act as the Mudarib (Manager of the Mudaraba) The Bank will form a pool of customers funds
How It Works: BankIslami's Islami Amadni Certificate is a profit bearing account developed on the basis of the modes of Mudarabah. This is how it works: You provide funds to the Bank on Mudaraba basis for investment in the Banks Shariah Compliant Assets In this arrangement, you will function as a Rabbul Maal (investor in Mudaraba) and the Bank will act as the Mudarib (Manager of the Mudaraba) The Bank will form a pool of customers funds The pool provides financings to various individuals, corporate, government and other entities based on various Islamic modes of finance such as Murabaha, Ijarah, Musharakah, Mudaraba and other modes and would generate income The Bank will calculate income from the pool on a monthly basis. This income will be shared between the Bank and the Depositors as per a pre agreed profit sharing ratio The profit share of the Bank is called the Mudarib's share. This profit sharing ratio between the Bank and the Depositors is determined at the beginning of each month The profit share of the depositors is based on the predetermined weightages assigned at the beginning of the month. A weightage based profit distribution mechanism ensures that the return paid to any Customer in a Profit & Loss sharing contract is proportionate to the risk taken
Corporate Banking:
What we Offer:
You are the major drivers of our economy and we are glad to be at your service. All of your financial needs are within the reach of our highly qualified professionals who are fully capable and committed to understand your business and provide timely and effective financial services on an on going basis. We offer the following products and services to help you achieve your business objectives: Account Services Trade Services Working Capital Finance Project Finance Musharakah Finance Mudarabah Finance Ijarah
Account Services:
BankIslami offers all basic banking services to suit your routine business needs. Current Accounts with zero account maintenance fees Choice of currency-PKR, EURO, USD, GBP & JPY Transfer of funds with lowest transaction fees Access to quick and timely foreign exchange services Access to the entire online branch network 102 Branches in 49 Cities Unlimited within city and intercity online transactions Free Deposit and Withdrawal over the counter services at all BankIslami branches
Trade Services:
Financing:
Working Capital Finance: for your short term financing needs At BankIsami, we understand that your business needs constant access to low cost and flexible financing, in order to meet day-to-day funding needs. Our team of experienced Relationship Managers with wide sector experience offers you effective cash flow management by way of financing arrangements suitably structured to your needs and your risk profile. Cash is the lifeline of your business. Let your business have a blooming & prosperous life with our Working capital finance facility. To fulfill your working-capital financing requirements, BankIslami offers a wide range of products as follows: Murabahah Financing: Murabahah is a type of sale in which the seller discloses the cost of goods and profit to the buyer. Through this short-term financing mode, BankIslami can finance the 'asset-purchase requirement' of the Corporate Customers. The Customer, intending to utilize the Murabahah facility, identifies the commodities ('assets') it needs to purchase through Murabahah facility. BankIslami purchases the assets from Supplier
Salam Financing: Salam is a sale, whereby, the seller undertakes to supply some specific commodity to the buyer at a future date in exchange for an advanced price fully paid on the spot. As a matter of principle, the sale of a commodity which is not in the possession of the seller is unlawful. Thus, the practice of Salam is legalized as an exception and is allowed under certain terms and conditions. Salam is allowed for commodities only which are homogeneous and fungible in nature i.e. every unit of the commodity should be identical and substitutable in nature e.g. sugar, rice, wheat etc. Therefore, Salam is an ideal mode for financing for agricultural concerns. Salam financing can also fulfill all working capital requirements of manufacturers/traders dealing in homogeneous commodities. Project Finance: for your Medium & Long term financing needs BankIslami offers medium and long-term financing facilities for infrastructure, BMR and industrial projects in all sectors directly or on syndication basis. Musharakah Finance: In Musharakah, a joint enterprise is formed for conducting some business in which all partners share the profit according to a mutually agreed pre-determined ratio, whereas, the loss is shared in the ratio of capital investment. From Shariah perspective, Musharakah is one of the preferred modes of financing. The scope of Musharakah is broad. Musharakah can be applied to fulfill project financing needs as well as working capital financing needs of Corporate Clients. Since Musharakah transactions International Islamic University Islamabad. 41
Investment Banking:
What We Offer:
The external and internal market conditions have had a major impact in certain sectors of the economy, yet their impact lies short term only. The overall market share of the Investment Banking activities has remained robust and intact. The Bounce Factors in the equity markets is seeing improvements which are likely to see activity in IPO offerings and mushrooming of Mutual Funds. A good pipeline of Capital raising opportunities exists, particularly in Infrastructure, Textile and Services industry. Amiable investment opportunities for the medium term may provide leverage into credit and marketing activities. BankIslami Pakistan Limited takes deep pride in providing Investment Banking to its valued customers, as its core business, revolving around the concept of Wealth Management.
Structuring: Securitization Distressed assets sales Structured finance Initial public offerings Underwriting: SUKUKs Equity Musharakah Certificates
Specialized Roles: Private Equity Special Projects Ijarah and Musharkah Syndications
Internet Banking:
Visa/Debit card:
BankIslami Visa Debit card opens new doors of convenience for you. Now, you can use your BankIslami Visa Debit ATM Card locally as well as globally with Visa accepting Point of Sales (POS) locations and ATMs. BankIslami Visa Debit Card gives you convenience to access your money wherever and whenever you need it for all your purchases. BankIslami Visa Debit Card comes handy with benmefits and features that you always dream of. Global Acceptance: BankIslami Visa Debit Card is accpeted at over 50,000 Visa outlets in Pakistan and at over 27 million outlets around the world. This Card also lets you withdraw from over 4,000 ATMs nationwide and over 1 million ATMs arounf the world. Buy Now, Pay Now: With BankIslami Visa Debit Card, your purchase amount instantly gets deducted from your account without any additonal cost. PLus, you can manage your money through this as week. Zero Loss Liability:
Biometric ATMs:
Enjoy secure and safe ATM transactions with BankIslamis Biometric ATM based on BankIslamis One Card, which provides maximum security since it uses the most authentic way to verify your identity. How? Apart from a pin-code, you can also use your finger or thumb impression for identification purposes. After all, your fingerprints are yours and they cannot be copied. Amazing! Isn't it? Built with the state-of-the-art technology, these ATMs are the first of its kind in Pakistan. How to get your Biometric Registration: While opening an Account with BankIslami, customer will be asked to register his Biometric identification against his/her CNIC. As per BIP standard, customer's left & right Thumb will be used for registration purposes. Once customer's Account opening request gets approved, his/her Biometric record will be linked with his/her account through CNIC.
How to get One Card: You can collect your One Card and your Personal Identification Number 'PIN' from the branch where you have opened the account You will call 111-ISLAMI (475264) to activate your One Card.
How to Use Biometric ATM: Insert your One Card in the Biometric ATM machine
eStatement:
eStatement is a facility that not only helps you in viewing their statements whenever and wherever required but also brings an end to filing the Statements and keeping a paper stack. It is a convenience that offers you ease of use along with a worldwide access to your banking transactions. How to Register? Call 111 ISLAMI (111-475-264) Speak to a Phone Banking Officer Request for eStatement Activation Specify the Account Specify the Statement Frequency
Lockers:
Let us make this world safer and secure for you and your family. Our Safe Deposit Locker facility enables you to store your valuables in strong heat resistant steel lockers with 24 hour security. Be it jewellery, passports, share certificates or title deeds, you can rest assured that your valuables are not prone to loss, fire or theft. You can also nominate/authorize your dear and loved ones to operate the Locker. Now you can live a carefree & stress free life while we take care of your valuables while retaining your privacy. Following are the key benefits that you will get out of using safe deposit locker facility: Absolute privacy to operate your locker in a comfortable environment. A Locker custodian to offer friendly and personalized assistance. Maximum of four (4) deposit operators per Locker. Safety of your valuables from loss, fire and theft. Unlimited free visits to your Locker. Availability of different Locker sizes (Small, Medium and Large) to suit and accommodate your needs. Takaful coverage of up to Rs. 500,000/- for Small lockers, Rs. 750,000/- for Medium lockers and Rs.1, 000,000/- for large lockers. Locker Rent payable annually and in advance (as per schedule of charges). Key Deposit payable in advance as a condition for Locker facility.
Conclusion:
Being an Islamic bank it has its advantages as well as disadvantages, but to succeed in the on going commercial and cooperative banking sector it is difficult to adjust according to the on going conditions as each and every aspect of an Islamic banking system are related to rules of shariah. But due to less burden this systems puts on the customer and also focuses on social welfare its spontaneous growth has given a hard challenge to the on going commercial banks which are now trying to do the same sort of planning as Islamic banks through their own ways which would result in an overall social focused and just banking system.