The document provides an overview of Islamic banking, including its principles, key differences from conventional banking, common products and financing modes, and the progress and global landscape of the Islamic banking industry. It discusses how Islamic banking is based on Shariah principles of prohibiting riba (interest) and encouraging profit and loss sharing. It also summarizes some major Islamic banking products and the industry's growth in Pakistan and other countries around the world.

4. Islam and Shariah Islam Aqidah (Faith & Belief) Shariah (Practices & Activities) Akhlaq (Morality & Ethics) IBADAT (Man to God Worship) Muamalat (Man to Man Activities) Political Activities Economic Activities Social Activities Banking & Financial Activities

9. External (Equity & Debt) Financing Debt Market Equity Market Bai’ al-Istisna’ (Sale on Order) Bai’ al-Salam (Commodity Sale) Al-Ijarah (Leasing) Others Bai’ al-Murabaha (Cost Plus Profit Sale) Al-Musharakah (Joint Venture Profit Sharing) Al-Bai’ Bithaman (Mu)Ajil (Deferred Installment Sale) Al-Mudarabah (Trustee Profit Sharing) Uqud al-Muawadhat (Deferred Contracts of Exchange) Uqud al-Ishtirak (Contracts of Profit Sharing ) Debt Financing Equity Financing

13. Industry Progress & Mkt. Share 17 48 70 150 289 519** No. of Branches 3 7 9 12 12 12* Conventional Banks with Islamic Banking Branches 1 2 2 6 6 6* Full Fledge Islamic Banks 0.5% 1.3% 1.8% 2.4% 3.6% 4. 7 % %age of Banking Industry 10 30 48 72 166 185 Financing. & Invest. 0.4% 1.2% 1.9% 2.8% 4.1% 5 .2 % %age of Banking Industry 8 30 50 83 169 198 Deposits 0.5% 1.4% 2.1% 2.9% 4.2% 5.3 % %age of Banking Industry 13 44 72 118 235 271 Total Assets Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec -08 @ Description (Rs. in Bn)‏

14. City - Wise Breakup

15. City - Wise Breakup

16. Industry Progress in Pakistan

23. Encourage asset-based financing and based on commodity trading & Services Based on money trading. Money is a medium of exchange and not a commodity Partners, investor and traders, buyer or seller relationship Creditor-Debtor relationship Aim at maximising profit but subject to Sharia'h restrictions Aim at maximising profit without any restrictions Promote risk-sharing between provider of capital (investor) and user of funds (entrepreneurs) Investor is assured of pre-determined rate of interest Functions and operations are based on Sharia’h principles Functions and operations are based on fully man made principles Islamic banking Conventional banking

24. Deal in Zakat Do not Deal in Zakat ( Non Muslim Countries ) Islamic banks have no provision to charge any extra money from the defaulters It can charge additional money in case of defaulters No right of profit if there is no risk involved. It is almost risk free banking and depositor has no risk of losing its money because interest is guaranteed. Islamic banking Conventional banking

25. Thank You.