- Islamic funds follow religious laws laid down by the Holy Quran and invest in sharia-compliant areas like equity, real estate, commodities, and other assets and businesses. - Meezan Bank is Pakistan's largest Islamic bank and offers various Islamic banking products and funds that are in compliance with sharia law, including the flagship Meezan Islamic Fund. - The size of the global Islamic finance industry, including investment funds, is expected to significantly grow in the next decade as more institutions establish sharia-compliant funds and operations.

1. by Professor Hsieh

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Islamic Banking (8552)Islamic Banking (8552)
Topic:Topic:
Establishment of Islamic Fund in BanksEstablishment of Islamic Fund in Banks
Presented to:Presented to:
Sir Salman SiddiqueSir Salman Siddique
Presented by:Presented by:
Mudassar AfzalMudassar Afzal

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ACKNOWLEDGEMENT
I am thankful to the ALLAH ALMIGHTY , the most
Merciful and beneficent, by he assistance of Allah, I
have accomplished my task.
I would like to thanks all people who directly or
indirectly helped me to achieve this target.

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Islamic FundIslamic Fund
“Islamic” funds or “Shariah” funds (hereinafter
referred to Islamic funds), which follow the
religious laws (hereinafter referred to as
“Shariah”) laid down by the Holy Qu’ran. For
believers, they may therefore be considered as
funds with a “religious” connotation, whereby for
non-Muslim investors, they frequently fall under
the category of ethical or socially responsible
funds.

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Islamic Investment Funds are joint pool of funds
wherein the investors contribute their surplus
money for the purpose of its investment to earn
halal profits in strict conformity with the
principles of Islamic Shariah.
Subscribers of funds receive a document may
be called a certificate, a unit, a share or any
other name representing the value and will earn
pro rated profits on it.
Islamic Investment FundIslamic Investment Fund

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1. Equity fund
2. Ijarah funds
3. Commodity funds
4. Murabaha funds
5. Bai al Dain
6. Mixed funds
Islamic Investment FundIslamic Investment Fund

7. Equity Funds

Equity funds are invested in joint stock companies.

Profits are generated through the trading of shares in the
stock market and the dividends.

It is prohibited to invest in stocks of those companies that
are involved in activities not approved by sharia, e.g.
companies manufacturing, selling or offering liquor, pork,
haram meat, or involved in gambling, night club activities,
pornography, prostitution, or involved in the business of
hire purchase or interest etc.

8. Ijara Fund

Funds or subscription amounts are used to
purchase assets like real estate, motor vehicles,
or other equipment's for the purpose of leasing.

The ownership of these assets remains with the
Fund and the rentals are charged from the
users.

Rentals on these assets are the income of fund.

Each subscriber is given a certificate that is
more likely to be called SukukSukuk (Islamic Bonds).

Sale of these Sukuk certificates would simply
change the owner in the asset.

9. Commodity Funds

This type of fund is used for purchasing commodities for
resale to earn profits.

All the transactions should comply the sharia conditions
like;
1.the seller must own the commodities.
2.forward sales are not allowed except in case of salam and
istisna.
3.Commodities must be Halal.
4.The seller must have physical or constructive possession
over the commodity he wants to sell.
5.Price of the commodity must be fixed and known to the
parties, it can't be tied up with any uncertain event.

10. Murabaha Fund

Kind of sale where the commodities are sold on a
cost-plus basis.

This type of fund is a closed-end fund and its units
are not negotiable in the secondary market.

As the Murabaha fund certificates don't represent a
physical ownership of assets rather it represents a
claim of debt and profit there on, so the sale of debt
is not allowed unless it is exchanged with exactly the
same amount or at par value.

11. Bai al Dain / Sale of Debt

Bay’ which means sale, while • Dayn means debt .

Bai al Dain for sale of debt. It denotes the sale of debt
securities, debt certificates (commercial papers), or
receivables for a specific amount (usually at a discount
to its face value). For example, it may involve the
situation where a person has receivables and wants to
sell them at a discount to a third party. The third party
will replace the original creditor/lender and will be able to
claim the face value, with the difference between what
he will get and what he has paid constituting his
reward/profit.

12. Mixed Fund

A fund where the subscription amount is invested in
different types of investments, like equities, leasing,
commodities, etc.

13. Meezan Bank ltd is the first and largest Islamic
bank in Pakistan. It is one of the fastest growing
financial institutions of the country. The bank
commenced operations in 2002 after being issued
the first ever Islamic commercial banking license
by the state bank of Pakistan.

14. Meezan Rupee Current
Account
Meezan Rupee Saving
Account
Meezan Bachat Account
Karobari Munafa Account
Meezan Business Plus
Account
Meezan Kids Club Account
Meezan Teens Club Account
Meezan Kafalah
Meezan Labbaik
Foreign Currency Current
Account
Monthly Mudarabah
Certificate
Certificates of Islamic
Investment
Meezan Amdan Certificate
Dollar Mudarabah Certificate
Car Ijarah
Easy Home
Laptop Ease
Meezan Roshni

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16. Meezan Islamic Fund (MIF) is not only the largest Shariah
compliant equity fund but also the largest Equity Fund in private
sector in Pakistan.
It is flagship fund and has been rated 5-Star by JCR-VIS. MIF was
launched on 8th August 2003 as the first open end mutual fund of
Al Meezan. MIF operates with a clear and well defined investment
objective – To invest only in Shariah compliant instruments. Under
all applicable rules and regulations of the SECP, the fund ensures
an investment policy that is strictly in accordance with approved
Islamic principles and Riba-Free.
MIF invests in combination of income and growth stocks of
Shariah compliant companies with demonstrated track record of
profitability and stable dividend payout history.

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Meezan Bank was awarded 'Best Islamic Bank in
Pakistan' by Islamic Finance News of RED money
Group.
Best Islamic Bank in Pakistan' for consecutive 3 years
2012-2014 by ASIA MONEY Magazine
Become the 8th
biggest banking network in Pakistan

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CONCLUSIONCONCLUSION
The size of Islamic Investment Funds is expected to be at least doubled
during the next decade. Islamic investment Funds have become today an
undeniable fact. The number of Islamic institutions/Funds is ever increasing.
New Islamic Funds with increasing amount of capital are being established.
Conventional banks are opening Islamic windows for the operations of
Islamic Funds

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Questions

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