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By: Jawaid Iqbal
Thursday 11th
November 2009
Al- Sadiq (A.S) Institute of Islamic Banking, Finance &
Takaful
Banking System In Pakistan
• Conventional Banks
• Islamic Banks
• Conventional Banks – Islamic
Branches/Windows
Major Operations Sides of Banks
Assets Side
Operations
Liability Side
Operations
Advancing
Loans
Taking
Deposits
Major Operations Sides of Banks
Assets Side
Operations
Liability Side
Operations
Advances:
Running Finance
Demand Finance
Export Re-Finance
Letter of Credit
Letter of Guarantee
Consumer Finance
Deposits:
Demand
Savings
Term deposit
Major Operations Sides of Banks
Assets Side
Operations
Liability Side
Operations
Advances:
Murabaha
Musharika
Mudaraba
Ijarah
Salam
Istisna
Deposits:
Current A/c
Investment A/c
(Mudaraba /
Musharika)
Islamic
Banking
Bank Accounts
Conventional
Banking
Islamic
Banking
Investment
Account
Current
Account
Savings
Account
Current
Account
Both Current Accounts are same in Conventional & Islamic banking
Bank Accounts
Conventional
Banking
Islamic
Banking
Investment
Account
Current
Account
Savings
Account
Current
Account
Nature
DEBT
Nature
DEBT
Nature
PARTNERSHIP
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.
Liability Side - Comparison
Islamic
Banking
Islamic
Banking
DebtDebt PartnershipPartnership ServiceService
SaleSale
Current
Account
Current
Account
MusharikaMusharika ModarabahModarabah MixedMixed IjarahIjarah JualaJuala Present/SpotPresent/Spot
Future/
Forward
Future/
Forward
MurabahaMurabaha
MusawamaMusawama
IstisnaIstisna
SalamSalam
Courtesy: Brother Ali Abbas Abidi

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