This document discusses the concept of investment pools in Islamic banking at Summit Bank. It explains that remunerative customer deposits and financing assets are allocated to different investment pools based on their source of funds, including a general pool, treasury pool, equity pool, and special mudarabah pools. Rules for pool management include capping the bank's mudarib share at 50% of profits and maintaining at least 20% saleable assets. Weightages are used to distribute profits among depositors with different amounts and maturities. Special rate deposits can be accepted through special pools that invest in higher risk/return sectors.
Sukuk are financial certificates that comply with Islamic law and its investment principles, which prohibit charging or paying interest. Sukuk represent ownership in tangible assets or business activities and provide investors returns from those assets or activities. There are different types of Sukuk based on principles like Murabaha, Ijarah, Musharakah, and Mudarabah. While Sukuk aim to enable organizations to raise capital in a Sharia-compliant way, some structures have faced criticism for replicating interest-based bonds too closely. Guidelines on appropriate underlying assets and tradability in secondary markets continue to be discussed.
The document provides information about Islamic banking based on an essay written by S. Karunya for their class on the topic. It discusses the origins and principles of Islamic banking, including prohibitions on interest, uncertainty, and gambling. Key concepts covered include equity participation instead of interest for loans and investments, different approaches to risk sharing, and prohibitions on certain activities like margin trading and speculation on futures. The stages of development, types of deposits, funds, and insurance in Islamic banking are outlined. Challenges and a list of current Islamic banks in India are also mentioned.
The document provides an overview of Islamic banking concepts and practices. It defines Islamic banking as a system based on Islamic law that follows the rules of Fiqh Muamalat. The key practices discussed include Murabahah, Mudarabah, Musharakah, Ijarah, Istisna, and Qard which are based on trade, equity participation and service. The document also contrasts Islamic and conventional banking, highlighting that Islamic banking prohibits interest and involves profit and loss sharing.
Islamic banking adheres to Shariah law, which prohibits interest and investing in businesses involving activities like gambling, alcohol, or pork. It utilizes profit and loss sharing models like murabaha, where the bank purchases an asset and sells it to a customer at a markup, and salam, where payment is made in advance for future delivery of a commodity. Salam contracts help farmers obtain financing but both parties face price risk until delivery is made. Islamic banks sometimes use parallel salam contracts to hedge their own price risk from the initial salam.
This document provides an overview of Islamic banking including:
1. Definitions of Islamic banking from a public and economic perspective focusing on profit and loss sharing.
2. A comparison of Islamic and conventional banking systems in terms of how deposits are handled and profits/losses distributed.
3. An explanation of profit distribution mechanisms in Islamic banking including the concept of weightages which determine share of profits.
The document discusses the Islamic capital market in Malaysia. It provides context on how the market functions in accordance with Shariah principles, prohibiting activities like riba (usury), maisir (gambling), and gharar (ambiguity). It then outlines some key components of the Islamic capital market, including various capital market products available for Muslim investors and the criteria for Shariah-compliant securities listed on Bursa Malaysia.
The document discusses the process of pool management for deposit products at an Islamic bank. There are several types of pools:
1) General deposit pools for savings accounts, certificates of investment, and term deposits.
2) Treasury/financial institution pools that accept funds from other institutions under mudarabah or musharakah.
3) An equity pool invested in permissible equities and modes using bank equity and non-remunerative deposits.
4) An Islamic export refinance pool for export financing under sharia compliant modes. The bank allocates customer funds to pools and uses the funds for financing like murabaha and ijarah. Profits are distributed to pools and customers monthly based on predetermined ratios
This document discusses various types of risks faced by Islamic banks, including market risk, interest rate risk, credit risk, liquidity risk, operational risk, legal risk, equity investment risk, rate of return risk, displaced commercial risk, fiduciary risk, Shari'ah compliance risk, reputation risk, and strategies for managing these risks. It provides details on the sources and impacts of each risk and emphasizes the importance of comprehensive risk management systems, internal controls, oversight committees, regular reporting, and adherence to Shari'ah principles for Islamic banks.
Sukuk are financial certificates that comply with Islamic law and its investment principles, which prohibit charging or paying interest. Sukuk represent ownership in tangible assets or business activities and provide investors returns from those assets or activities. There are different types of Sukuk based on principles like Murabaha, Ijarah, Musharakah, and Mudarabah. While Sukuk aim to enable organizations to raise capital in a Sharia-compliant way, some structures have faced criticism for replicating interest-based bonds too closely. Guidelines on appropriate underlying assets and tradability in secondary markets continue to be discussed.
The document provides information about Islamic banking based on an essay written by S. Karunya for their class on the topic. It discusses the origins and principles of Islamic banking, including prohibitions on interest, uncertainty, and gambling. Key concepts covered include equity participation instead of interest for loans and investments, different approaches to risk sharing, and prohibitions on certain activities like margin trading and speculation on futures. The stages of development, types of deposits, funds, and insurance in Islamic banking are outlined. Challenges and a list of current Islamic banks in India are also mentioned.
The document provides an overview of Islamic banking concepts and practices. It defines Islamic banking as a system based on Islamic law that follows the rules of Fiqh Muamalat. The key practices discussed include Murabahah, Mudarabah, Musharakah, Ijarah, Istisna, and Qard which are based on trade, equity participation and service. The document also contrasts Islamic and conventional banking, highlighting that Islamic banking prohibits interest and involves profit and loss sharing.
Islamic banking adheres to Shariah law, which prohibits interest and investing in businesses involving activities like gambling, alcohol, or pork. It utilizes profit and loss sharing models like murabaha, where the bank purchases an asset and sells it to a customer at a markup, and salam, where payment is made in advance for future delivery of a commodity. Salam contracts help farmers obtain financing but both parties face price risk until delivery is made. Islamic banks sometimes use parallel salam contracts to hedge their own price risk from the initial salam.
This document provides an overview of Islamic banking including:
1. Definitions of Islamic banking from a public and economic perspective focusing on profit and loss sharing.
2. A comparison of Islamic and conventional banking systems in terms of how deposits are handled and profits/losses distributed.
3. An explanation of profit distribution mechanisms in Islamic banking including the concept of weightages which determine share of profits.
The document discusses the Islamic capital market in Malaysia. It provides context on how the market functions in accordance with Shariah principles, prohibiting activities like riba (usury), maisir (gambling), and gharar (ambiguity). It then outlines some key components of the Islamic capital market, including various capital market products available for Muslim investors and the criteria for Shariah-compliant securities listed on Bursa Malaysia.
The document discusses the process of pool management for deposit products at an Islamic bank. There are several types of pools:
1) General deposit pools for savings accounts, certificates of investment, and term deposits.
2) Treasury/financial institution pools that accept funds from other institutions under mudarabah or musharakah.
3) An equity pool invested in permissible equities and modes using bank equity and non-remunerative deposits.
4) An Islamic export refinance pool for export financing under sharia compliant modes. The bank allocates customer funds to pools and uses the funds for financing like murabaha and ijarah. Profits are distributed to pools and customers monthly based on predetermined ratios
This document discusses various types of risks faced by Islamic banks, including market risk, interest rate risk, credit risk, liquidity risk, operational risk, legal risk, equity investment risk, rate of return risk, displaced commercial risk, fiduciary risk, Shari'ah compliance risk, reputation risk, and strategies for managing these risks. It provides details on the sources and impacts of each risk and emphasizes the importance of comprehensive risk management systems, internal controls, oversight committees, regular reporting, and adherence to Shari'ah principles for Islamic banks.
It is well known that interest-based banks accept deposits of different maturities, paying different rates of interest on different kinds of deposits. Islamic banks do not pay interest on deposits. How Islamic banks operate different kinds of deposits
The document discusses the legal framework of Islamic capital markets. It provides an overview of key concepts like Islamic capital market products, regulatory bodies that govern the Malaysian capital market, and the development of the Islamic capital market in Malaysia over time. Various regulatory frameworks and guidelines introduced by the Securities Commission are also summarized to facilitate a conducive environment for the growth of the Islamic capital market.
The document discusses various Islamic banking products and services offered by BankIslami including home financing, auto financing, savings accounts, investment certificates, and corporate banking services. The home financing and auto financing facilities are based on principles of Diminishing Musharakah and Ijarah, allowing customers to gradually purchase ownership units from the bank over time. The document also outlines various takaful plans offered in partnership with Pak-Qatar Family Takaful for savings, investments, and insurance coverage.
Here are the steps to setup the Musharakah company for Case 1:
1. Partner A and Partner B form a Musharakah company on Jan 1 with a capital contribution of Rs. 10 million and Rs. 5 million respectively.
2. The company operates throughout the year and earns a profit of Rs. 3 million by Dec 31.
3. As per the agreed ratio, the profit of Rs. 3 million is distributed between Partner A and Partner B in the ratio of their capital contribution i.e. Partner A receives Rs. 2 million (10/15 of Rs. 3 million) and Partner B receives Rs. 1 million (5/15 of Rs. 3 million).
4.
the presentation will help you in understanding diffrent terms of islamic banking. also it will help you in finding the answers of your critics about islamic banking.
The document provides an overview of the Islamic money market, including its functions, instruments, and calculations. It discusses:
1. The key functions of the Islamic money market are to facilitate the transfer of funds between surplus and deficit parties in accordance with Shariah principles. It also plays a role in liquidity management and as a channel for central banks to conduct monetary policy.
2. Popular Islamic money market instruments discussed include Mudarabah Interbank Investments, Wadiah acceptances, Qard, Commodity Murabahah programs, and Bank Negara Monetary Notes-i.
3. Calculations for profit on various instruments are explained, such as using profit rates, discount rates,
Md. Fariduddin Ahmed is a former managing director and CEO of Islami Bank Bangladesh Limited and Export Import Bank of Bangladesh Ltd. He also served as advisor to Export Import Bank of Bangladesh Ltd. and head of Islamic banking at AB Bank Limited.
The document discusses Sukuk, which are defined as certificates representing ownership in tangible assets or financial obligations from commercial activities. It describes different structures of Sukuk based on Shariah contracts and classifications based on function. The document also compares Sukuk to bonds and asset-backed securities, and discusses some issues, opportunities, and challenges in the Sukuk market.
The following slides discuss Islamic equity markets, including the concepts of risk sharing, types
The document discusses Sukuk, an Islamic financial certificate that is an alternative to conventional bonds. Sukuk are asset-backed and represent partial ownership of an asset, rather than debt. They can be structured using various Islamic financing contracts like murabahah, ijara, musharakah, and mudharabah. Malaysia has been a pioneer in developing the Sukuk market, with the first issuance in 1990 and the establishment of regulatory standards. It remains one of the largest Sukuk issuing countries globally.
Islamic banking provides an interest-free alternative to conventional banking based on Shariah (Islamic law) principles. It prohibits Riba (usury or interest) and involves profit/loss sharing arrangements. While still evolving, Islamic banking has grown significantly in recent decades and shows potential to mobilize resources and support economic development in accordance with Islamic values. However, it also faces ongoing challenges in translating principles into practical products and services.
This document discusses Islamic investment concepts related to securitization and sukuk. It begins by defining securitization as issuing certificates of ownership against an asset or investment pool. It then discusses various types of conventional bonds and introduces the concept of sukuk, which are defined as Sharia-compliant certificates representing ownership in an underlying asset. The document outlines various Shariah-compliant structures for sukuk based on contracts like ijarah, murabahah, and musharakah. It also compares key differences between conventional bonds and sukuk. Overall, the document provides an overview of securitization and various Islamic finance instruments like sukuk from a Shariah perspective.
This document provides an overview of Salam and Istisna contracts in Islamic finance. It defines Salam as a sale where the price is paid in full at the time of contract for goods to be delivered in the future. Istisna is defined as a sale of goods to be manufactured, where the price is not necessarily paid in full up front. The document outlines the conditions for each contract and differences between them, such as payment terms and ability to cancel. It also discusses how Istisna can be used to structure financing agreements, such as for construction projects.
This is an authentic presentation on the fiqh and practical applications of the Islamic financial instrument of Mudarabah. This is compiled from authentic sources and is relevant especially against the backdrop of Islamic banking.
This document provides an overview of Islamic banking through a presentation by several members. It begins with an introduction to Islamic banking principles such as prohibiting interest and encouraging profit and loss sharing. It then discusses various Islamic financing modes like murabaha, ijara, musharakah, and sukuk. The document also covers the history and development of Islamic banking, current practices in countries like the UK, and challenges related to standardization and a shortage of qualified scholars and professionals.
The document summarizes several key Islamic financing modes:
1) Murabahah is a cost-plus sale where the bank discloses costs and sells an asset to a customer on a deferred payment plan at a markup. Salam and istisna'a are used for agriculture and project financing respectively, allowing for advanced payment in exchange for future delivery of goods or projects.
2) Ijarah is an Islamic lease where the bank owns an asset and leases it to a customer for rental payments over a set period, after which the asset is either returned or sold to the lessee.
3) Each contract has specific steps and conditions to ensure compliance with Sharia principles like prohibition of interest and uncertainty
This document discusses Islamic investment funds and the principles of Shariah that govern them. There are several types of funds described, including equity funds, Ijarah funds, commodity funds, and Murabahah funds. The document also addresses conditions for investing in shares according to Shariah like ensuring the main business of the company is halal. It discusses debates around concepts like limited liability and whether they are acceptable in an Islamic economic system. Examples are provided of how Islamic legal scholars have treated entities like waqf, Baitul-Mal, and inheritance under debt as having separate legal identities.
INTERNATIONAL ISLAMIC FINANCIAL MARKET (IIFM) NATASHYA AYUNIE
IIFM is an international standards-setting body for the Islamic finance industry that focuses on standardizing Islamic financial contracts and products. It works to unify the market by developing best practices at the global level and harmonizing Shari'ah interpretations. IIFM has published several standards, including master agreements for treasury placement, hedging products, and collateralized murabahah agreements, to facilitate standardized documentation for liquidity management, risk management, and access to liquidity. IIFM standards aim to support a sustainable development of the Islamic finance industry globally.
Murabaha is an Islamic financing structure where a financial institution purchases an asset for a customer and sells it to them at an agreed upon markup. The document defines Murabaha, provides examples of how it works, and answers common questions about the process. Key points include:
- In Murabaha, the cost of the asset and the pre-agreed profit amount must be disclosed to the customer.
- The financial institution purchases the asset then sells it to the customer for a higher price paid in installments or all at once.
- The customer can be appointed as an agent to select the asset on behalf of the bank.
This document provides an overview of Murabaha, an Islamic financing structure. It defines Murabaha as a sale where the seller discloses the cost of an item and sells it for a higher price, adding a known profit. The document outlines the difference between Murabaha and Musawamah sales, basic rules of Islamic sales, evidence for Murabaha's validity, how it is structured as a financing transaction, potential issues, and mistakes to avoid. It concludes that Murabaha must be implemented carefully according to Islamic principles, as a legitimate sale rather than an interest-based loan.
This document provides an overview of Sukuk, which are Islamic investment certificates that represent ownership in an underlying asset. Sukuk offer risk diversification for investors and are asset-backed, tradable, and Sharia-compliant. The document discusses various Sharia contracts that can underlie Sukuk structures, including Murabahah, Ijarah, Mudarabah, and Musharakah. It also compares key differences between Sukuk and conventional bonds, such as Sukuk representing ownership in an asset while bonds represent debt. The document outlines reasons for issuing Sukuk, including raising funds for projects in a Sharia-compliant way and tapping both Islamic and conventional investor bases.
AAOIFI is responsible for developing standards for the international Islamic finance industry. It has issued 92 standards covering Sharia, accounting, auditing, governance and ethics. These standards are followed in many jurisdictions and have introduced greater harmonization in Islamic finance practices. The standards are developed through a consultative process involving the industry and are intended to enhance confidence in Islamic finance and promote transparency in financial reporting of Islamic financial institutions.
The document discusses various options for liquidity management in Islamic banks, including inter-bank mudarabah and musharakah pools, Islamic placement accounts, commodity murabaha transactions, equity funds, and sukuk bonds. It notes that liquidity management is a challenge for Islamic banks due to limitations like the absence of an Islamic interbank market and Shariah-compliant alternatives. It then provides details on setting up inter-bank investment pools, managing the pools, and using commodity murabaha and placement accounts to facilitate liquidity management.
Slide ini khas untuk digunakan dalam kelas BWSB 5053 Contemporary Islamic Banking. Perbincangan bersama pelajar Master (MIBS & MIFB) di UUM. Juga bermanfaat untuk sesiapa yang ingin mendalami ilmu muamalat dan kewangan Islam.
It is well known that interest-based banks accept deposits of different maturities, paying different rates of interest on different kinds of deposits. Islamic banks do not pay interest on deposits. How Islamic banks operate different kinds of deposits
The document discusses the legal framework of Islamic capital markets. It provides an overview of key concepts like Islamic capital market products, regulatory bodies that govern the Malaysian capital market, and the development of the Islamic capital market in Malaysia over time. Various regulatory frameworks and guidelines introduced by the Securities Commission are also summarized to facilitate a conducive environment for the growth of the Islamic capital market.
The document discusses various Islamic banking products and services offered by BankIslami including home financing, auto financing, savings accounts, investment certificates, and corporate banking services. The home financing and auto financing facilities are based on principles of Diminishing Musharakah and Ijarah, allowing customers to gradually purchase ownership units from the bank over time. The document also outlines various takaful plans offered in partnership with Pak-Qatar Family Takaful for savings, investments, and insurance coverage.
Here are the steps to setup the Musharakah company for Case 1:
1. Partner A and Partner B form a Musharakah company on Jan 1 with a capital contribution of Rs. 10 million and Rs. 5 million respectively.
2. The company operates throughout the year and earns a profit of Rs. 3 million by Dec 31.
3. As per the agreed ratio, the profit of Rs. 3 million is distributed between Partner A and Partner B in the ratio of their capital contribution i.e. Partner A receives Rs. 2 million (10/15 of Rs. 3 million) and Partner B receives Rs. 1 million (5/15 of Rs. 3 million).
4.
the presentation will help you in understanding diffrent terms of islamic banking. also it will help you in finding the answers of your critics about islamic banking.
The document provides an overview of the Islamic money market, including its functions, instruments, and calculations. It discusses:
1. The key functions of the Islamic money market are to facilitate the transfer of funds between surplus and deficit parties in accordance with Shariah principles. It also plays a role in liquidity management and as a channel for central banks to conduct monetary policy.
2. Popular Islamic money market instruments discussed include Mudarabah Interbank Investments, Wadiah acceptances, Qard, Commodity Murabahah programs, and Bank Negara Monetary Notes-i.
3. Calculations for profit on various instruments are explained, such as using profit rates, discount rates,
Md. Fariduddin Ahmed is a former managing director and CEO of Islami Bank Bangladesh Limited and Export Import Bank of Bangladesh Ltd. He also served as advisor to Export Import Bank of Bangladesh Ltd. and head of Islamic banking at AB Bank Limited.
The document discusses Sukuk, which are defined as certificates representing ownership in tangible assets or financial obligations from commercial activities. It describes different structures of Sukuk based on Shariah contracts and classifications based on function. The document also compares Sukuk to bonds and asset-backed securities, and discusses some issues, opportunities, and challenges in the Sukuk market.
The following slides discuss Islamic equity markets, including the concepts of risk sharing, types
The document discusses Sukuk, an Islamic financial certificate that is an alternative to conventional bonds. Sukuk are asset-backed and represent partial ownership of an asset, rather than debt. They can be structured using various Islamic financing contracts like murabahah, ijara, musharakah, and mudharabah. Malaysia has been a pioneer in developing the Sukuk market, with the first issuance in 1990 and the establishment of regulatory standards. It remains one of the largest Sukuk issuing countries globally.
Islamic banking provides an interest-free alternative to conventional banking based on Shariah (Islamic law) principles. It prohibits Riba (usury or interest) and involves profit/loss sharing arrangements. While still evolving, Islamic banking has grown significantly in recent decades and shows potential to mobilize resources and support economic development in accordance with Islamic values. However, it also faces ongoing challenges in translating principles into practical products and services.
This document discusses Islamic investment concepts related to securitization and sukuk. It begins by defining securitization as issuing certificates of ownership against an asset or investment pool. It then discusses various types of conventional bonds and introduces the concept of sukuk, which are defined as Sharia-compliant certificates representing ownership in an underlying asset. The document outlines various Shariah-compliant structures for sukuk based on contracts like ijarah, murabahah, and musharakah. It also compares key differences between conventional bonds and sukuk. Overall, the document provides an overview of securitization and various Islamic finance instruments like sukuk from a Shariah perspective.
This document provides an overview of Salam and Istisna contracts in Islamic finance. It defines Salam as a sale where the price is paid in full at the time of contract for goods to be delivered in the future. Istisna is defined as a sale of goods to be manufactured, where the price is not necessarily paid in full up front. The document outlines the conditions for each contract and differences between them, such as payment terms and ability to cancel. It also discusses how Istisna can be used to structure financing agreements, such as for construction projects.
This is an authentic presentation on the fiqh and practical applications of the Islamic financial instrument of Mudarabah. This is compiled from authentic sources and is relevant especially against the backdrop of Islamic banking.
This document provides an overview of Islamic banking through a presentation by several members. It begins with an introduction to Islamic banking principles such as prohibiting interest and encouraging profit and loss sharing. It then discusses various Islamic financing modes like murabaha, ijara, musharakah, and sukuk. The document also covers the history and development of Islamic banking, current practices in countries like the UK, and challenges related to standardization and a shortage of qualified scholars and professionals.
The document summarizes several key Islamic financing modes:
1) Murabahah is a cost-plus sale where the bank discloses costs and sells an asset to a customer on a deferred payment plan at a markup. Salam and istisna'a are used for agriculture and project financing respectively, allowing for advanced payment in exchange for future delivery of goods or projects.
2) Ijarah is an Islamic lease where the bank owns an asset and leases it to a customer for rental payments over a set period, after which the asset is either returned or sold to the lessee.
3) Each contract has specific steps and conditions to ensure compliance with Sharia principles like prohibition of interest and uncertainty
This document discusses Islamic investment funds and the principles of Shariah that govern them. There are several types of funds described, including equity funds, Ijarah funds, commodity funds, and Murabahah funds. The document also addresses conditions for investing in shares according to Shariah like ensuring the main business of the company is halal. It discusses debates around concepts like limited liability and whether they are acceptable in an Islamic economic system. Examples are provided of how Islamic legal scholars have treated entities like waqf, Baitul-Mal, and inheritance under debt as having separate legal identities.
INTERNATIONAL ISLAMIC FINANCIAL MARKET (IIFM) NATASHYA AYUNIE
IIFM is an international standards-setting body for the Islamic finance industry that focuses on standardizing Islamic financial contracts and products. It works to unify the market by developing best practices at the global level and harmonizing Shari'ah interpretations. IIFM has published several standards, including master agreements for treasury placement, hedging products, and collateralized murabahah agreements, to facilitate standardized documentation for liquidity management, risk management, and access to liquidity. IIFM standards aim to support a sustainable development of the Islamic finance industry globally.
Murabaha is an Islamic financing structure where a financial institution purchases an asset for a customer and sells it to them at an agreed upon markup. The document defines Murabaha, provides examples of how it works, and answers common questions about the process. Key points include:
- In Murabaha, the cost of the asset and the pre-agreed profit amount must be disclosed to the customer.
- The financial institution purchases the asset then sells it to the customer for a higher price paid in installments or all at once.
- The customer can be appointed as an agent to select the asset on behalf of the bank.
This document provides an overview of Murabaha, an Islamic financing structure. It defines Murabaha as a sale where the seller discloses the cost of an item and sells it for a higher price, adding a known profit. The document outlines the difference between Murabaha and Musawamah sales, basic rules of Islamic sales, evidence for Murabaha's validity, how it is structured as a financing transaction, potential issues, and mistakes to avoid. It concludes that Murabaha must be implemented carefully according to Islamic principles, as a legitimate sale rather than an interest-based loan.
This document provides an overview of Sukuk, which are Islamic investment certificates that represent ownership in an underlying asset. Sukuk offer risk diversification for investors and are asset-backed, tradable, and Sharia-compliant. The document discusses various Sharia contracts that can underlie Sukuk structures, including Murabahah, Ijarah, Mudarabah, and Musharakah. It also compares key differences between Sukuk and conventional bonds, such as Sukuk representing ownership in an asset while bonds represent debt. The document outlines reasons for issuing Sukuk, including raising funds for projects in a Sharia-compliant way and tapping both Islamic and conventional investor bases.
AAOIFI is responsible for developing standards for the international Islamic finance industry. It has issued 92 standards covering Sharia, accounting, auditing, governance and ethics. These standards are followed in many jurisdictions and have introduced greater harmonization in Islamic finance practices. The standards are developed through a consultative process involving the industry and are intended to enhance confidence in Islamic finance and promote transparency in financial reporting of Islamic financial institutions.
The document discusses various options for liquidity management in Islamic banks, including inter-bank mudarabah and musharakah pools, Islamic placement accounts, commodity murabaha transactions, equity funds, and sukuk bonds. It notes that liquidity management is a challenge for Islamic banks due to limitations like the absence of an Islamic interbank market and Shariah-compliant alternatives. It then provides details on setting up inter-bank investment pools, managing the pools, and using commodity murabaha and placement accounts to facilitate liquidity management.
Slide ini khas untuk digunakan dalam kelas BWSB 5053 Contemporary Islamic Banking. Perbincangan bersama pelajar Master (MIBS & MIFB) di UUM. Juga bermanfaat untuk sesiapa yang ingin mendalami ilmu muamalat dan kewangan Islam.
The document discusses the concept of banking in Islam. It outlines how interest (riba) is forbidden in Islam and explains permissible alternative financing models like mudharabah, musharakah, and murabaha that are based on profit and loss sharing. It also discusses the structure of Islamic banks, including profit sharing arrangements with depositors and investment of reserves and surplus funds in sharia-compliant ways. The role of central banks and handling of inter-bank flows and foreign branches are addressed.
1. Al Baraka Bank (Pakistan) Limited offers a wide range of Islamic financing products like Murabaha, Ijarah, Musharakah, and Islamic export refinance to corporate, SME, and consumer sectors.
2. The bank manages assets through working capital finance, project finance, trade finance, and real estate finance. It invests in sukuk/bond certificates, ordinary shares, and mutual funds.
3. On the liability side, the bank attracts deposits through various savings and investment accounts that distribute profits according to Islamic principles of Mudarabah and Diminishing Musharakah.
DIFFERENCES BETWEEN ISLAMIC BANKING SYSTEM AND CONVENTIONAL SYSTEM NATASHYA AYUNIE
The document summarizes the key differences between Islamic banking systems and conventional banking systems. The Islamic banking system is based on Islamic law (Sharia) and prohibits collecting or paying interest. It promotes profit and loss sharing between investors and entrepreneurs. In contrast, conventional banking provides loans and deposits with predetermined interest rates and aims to maximize profit without restrictions. Some other differences include that Islamic banks participate in business partnerships while conventional banks provide loans, and Islamic banks emphasize project viability rather than client creditworthiness.
Presentation on Introduction to Mutual Funds Investing.pptxLakshmipriyanka Asi
This document provides an introduction to mutual funds, including:
- What a mutual fund is, how it works, and its basic structure involving investors, trustees, and an asset management company.
- The various types of mutual funds based on structure (open-ended, closed-ended, interval funds), investment objective (debt, equity, hybrid funds), and investment style (passive, active funds).
- How to invest in mutual funds including through physical/online applications, a registered distributor, and the centralized KYC process.
- The different investment modes like lump sum, SIP, and growth vs. dividend plans.
- Where to find information on specific funds like the Scheme Information Document and Statement
Mutual funds pool money from investors and invest it in securities like stocks and bonds. They have different investment objectives depending on investors' needs for safety, liquidity or returns. Mutual funds provide benefits like diversification, transparency and liquidity. They are classified by structure, management style, investment universe and other factors. Some types include equity funds, debt funds, hybrid funds, fixed maturity plans and real estate funds. Mutual funds offer systematic investment plans to help investors invest regularly and build wealth over the long run.
This document provides an overview of mutual funds, including their key concepts, roles, how they operate, types of funds, legal structure in India, and distribution channels. The main points are:
- A mutual fund pools money from investors and invests it in stocks, bonds and other securities, with the fund managed by a professional on behalf of investors.
- Mutual funds assist investors in earning income, provide diversification, and help raise money for governments and companies through investments.
- The legal structure of mutual funds in India involves a trust with sponsors, trustees, an asset management company, custodian and registrar & transfer agent. Key documents include SID, SAI and KIM.
This document discusses capital adequacy ratio (CAR) and non-performing assets (NPAs). It defines CAR as a ratio of a bank's capital to its risk-weighted assets that regulators use to ensure banks can absorb losses. It discusses the types of capital (Tier I and Tier II), risk weights, and implications of not meeting CAR norms. Methods to improve CAR include mergers, better asset management, improved NPA recovery, recapitalization, and raising funds. NPAs are defined as loans overdue over 90-180 days. Factors contributing to NPAs include political interference, willful defaults, targeted lending, lack of monitoring, and hiding NPAs.
IDFC Multi Cap Fund_Scheme information documentIDFCJUBI
This document provides details about the IDFC Multi Cap Fund, an open-ended equity scheme that invests across large cap, mid cap and small cap stocks. The objective is to generate long-term capital growth from a predominantly equity portfolio. It aims to identify small and medium businesses with good long-term potential available at low valuations. The fund will remain open for subscription until it reaches a predetermined corpus. It offers two plans with growth and dividend options. The minimum investment amounts and load structure are also specified.
IDFC Flexi Cap Fund_Scheme information documentTravisBickle19
This document provides details about the IDFC Multi Cap Fund scheme. Some key points:
- The scheme aims to generate long-term capital growth from a portfolio of equity and equity-related instruments across large, mid, and small cap stocks.
- It has a growth and dividend option under both regular and direct plans. Minimum investment amounts are specified.
- The benchmark for performance comparison is S&P BSE 500 TRI. Mr. Anoop Bhaskar is the fund manager since April 2016.
- NAV will be disclosed daily on the AMC website and AMFI site. There are risks associated with equity investing and investors' capital is at moderately high risk.
This document provides an outline for a presentation on Islamic banking. It begins with introducing the presenter and their qualifications. It then outlines the topics to be covered, including the history of Islamic banking, how it operates in Pakistan, the differences between Islamic and conventional banking, the principles of Islamic banking, common Islamic financial terms, Islamic laws on trading, modes of Islamic financing, and the role of the State Bank of Pakistan in regulating Islamic banks. It provides details on the history and development of Islamic banking in Pakistan. It explains the key differences between Islamic and conventional banking and the main principles and modes of Islamic financing like murabahah, musharakah, and mudarabah.
Presentation on Introduction to Mutual Funds Investing.pdfAdityaRoy838557
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a professionally managed, diversified portfolio with the potential for growth or income depending on the type of fund. Risk and potential returns vary depending on the fund's investment objectives and strategy.
Presentation on Introduction to Mutual Funds Investing.pdfpoonamshinde64
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a way to diversify their investments and earn returns on their money.
This document discusses displaced commercial risk in Islamic finance. It defines displaced commercial risk as the risk resulting from volatility in returns generated by assets financed by investment accounts, which can cause Islamic banks to not pay competitive rates compared to conventional banks. The document outlines ways Islamic banks can manage this risk, including using profit equalization reserves and investment risk reserves. It also discusses the impact of displaced commercial risk mitigation on Islamic banks and their customers and the overall economy.
This document discusses rate of return risk in Islamic finance. It defines rate of return risk as the potential impact of changes in market rates of return on an Islamic bank's net income or equity value. Rate of return risk exists for Islamic banks because they use conventional interest rates as benchmarks, exposing them mismatch risk between asset and liability rates. The document outlines various techniques Islamic banks can use to manage this risk, such as diversifying assets, securitization, and off-balance sheet hedging methods. Managing rate of return risk is important for Islamic bank profitability and competitiveness.
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a professionally managed, diversified portfolio with the potential for growth or income depending on the type of fund. Risk and potential returns vary depending on the fund's investment objectives and strategy.
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a professionally managed, diversified portfolio with the potential for growth or income depending on the type of fund. Risk and potential returns vary depending on the fund's investment objectives and strategy.
Mutual funds are investment vehicles that pool money from many investors and invest it in stocks, bonds, and other securities. An asset management company manages the fund's portfolio according to the fund's stated objectives. Investors can invest in mutual funds directly from the fund company or through a financial advisor. Mutual funds offer investors a professionally managed, diversified portfolio with the potential for growth or income depending on the type of fund. Risk and potential returns vary depending on the fund's investment objectives and strategy.
Programme on Team Effectiveness-Main PresentationAsad Hameed
The document discusses the elements and skills needed for effective teamwork. It defines what a team is and lists advantages like increased productivity and creativity as well as disadvantages like potential dominance or slower decision making. It emphasizes establishing ground rules, contracts, and understanding the typical stages of team development from forming to adjourning. It provides tips for improving team effectiveness such as setting goals, clarifying roles, enhancing communication, and measuring performance. Overall the document provides guidance on building effective teams.
This document provides an overview of banking in Pakistan and Summit Bank. It discusses the evolution of banking in Pakistan from the establishment of the Bank of Bengal in 1809 to nationalization in 1974. It then summarizes the history of Summit Bank, formed through mergers of other banks. The document outlines Summit Bank's vision, mission, organizational structure, employment grades, performance management, leave policies, staff loans, types of financing available to staff including vehicle Ijarah, house finance and rewards for passing IBP exams.
This document provides an overview of banking in Pakistan. It begins with definitions of banking as financial intermediation and the evolution of banking in India and Pakistan. It describes the first banks established in Pakistan and how banks were nationalized in 1974. It also outlines the functions of commercial banks and the central bank (SBP). Finally, it provides a brief history of Summit Bank, describing its origins and mergers over time as well as its vision, mission, and branch network across Pakistan.
This document provides an overview of a training course on enhancing professional etiquettes. The course objectives are to help participants network effectively, dress appropriately, and improve confidence in business communication. It discusses why professional etiquettes are important to create a respectful environment and improve communication and trust. The document outlines different types of professional etiquettes including those related to communication, office/business, personal behaviors, and dress code. It provides guidance on proper hygiene, attire, communication techniques including handshakes, business cards, email and phone etiquette. The goal is to help professionals improve their image and interactions in work settings.
This document outlines an 8-session training course on motivating teams. The course covers key motivational theories, how to design motivating jobs, and creating a motivational work climate. Session topics include understanding motivation, setting goals, identifying individual and work values, and applying reinforcement and expectancy theories. The goal is to help managers understand what motivates employees and learn techniques to provide an environment where internal motivation activates performance.
The document introduces green banking guidelines issued by the State Bank of Pakistan for banks and financial institutions. It outlines the regulatory requirements for green banking, including developing policies and procedures to identify, assess, and monitor environmental risks. It defines green banking and culture, and discusses objectives like reducing vulnerability from environmental risks and facilitating sustainable development. Key areas of green banking are identified as environmental risk management, green business facilitation, and reducing banks' own environmental impacts. Roles and responsibilities for implementation are also covered.
The document introduces green banking guidelines issued by the State Bank of Pakistan for banks and financial institutions. It outlines the regulatory requirements for green banking, including developing environmental risk management procedures and reducing environmental impacts from banks' own operations. It then discusses key concepts of green banking like environmental risk assessment, green business facilitation, and reducing banks' own environmental impact. The roles and responsibilities of different departments in implementing green banking strategies are also covered.
The document discusses the Financial Action Task Force (FATF), an inter-governmental body formed in the late 1980s to combat money laundering. It summarizes FATF's role in developing anti-money laundering and countering the financing of terrorism standards and recommendations. It also discusses Pakistan's placement on FATF's grey list in 2018 and the economic and social impacts, as well as initiatives taken by Pakistan and its central bank to strengthen its AML/CFT regime.
This document outlines regulations for State Bank of Pakistan's regulated entities regarding anti-money laundering, combating the financing of terrorism, and countering proliferation financing. It discusses requirements for a risk-based approach, customer due diligence, enhanced due diligence for high-risk situations, reliance on third parties for customer due diligence, financial sanctions, and politically exposed persons. Key points include applying a risk assessment to policies and procedures, verifying customer identities, monitoring transactions, screening for sanctions lists, and obtaining senior management approval and monitoring high-risk customers like politically exposed persons.
The document provides details on operational risk management and business continuity planning for a bank. It defines operational risk and outlines tools for risk identification and assessment including risk control self-assessments, key risk indicators, and internal loss data collection. It also describes the roles of operational risk coordinators and frameworks for calculating regulatory capital requirements. For business continuity planning, it discusses objectives, potential disruptive events, response procedures, and roles for invoking and recovering from emergencies at branches and alternative backup sites.
This document provides training instructions for using the WUPOS payment system. It outlines the login process, searching for transactions by MTCN number, verifying sender and receiver details, collecting additional receiver information like address and phone number, completing the payout, and generating a payment receipt. It also describes how to view past transaction logs and the process for remote payments if the local system is not working.
The document outlines the procedure for cash payout through Summit Bank branches using Amanat Cash. A beneficiary must provide their Amanat Cash PIN number, recipient and sender names, expected amount within 10% of actual, and a valid ID to a teller. The teller will login to the Amanat Cash portal and the transaction details will appear. The system will debit the agent's account, credit the teller's cash account, and generate a payment receipt for signature by the beneficiary.
This document provides an overview and training on home remittance products and services for branch staff at Summit Bank. It begins with defining remittances and explaining their importance for Pakistan's economy. It then discusses the global and local remittance market size and scope of business opportunities for banks. The document reviews Summit Bank's home remittance products like Amanat Cash and arrangements with partners. It outlines key features, payment modes, and issues to address at branches to improve services. Finally, it discusses marketing initiatives and compliance procedures regarding transactions.
1. The document discusses effective meeting structure and procedures, including defining meetings, their common purposes, ground rules, typical agenda items, and the importance of meeting minutes.
2. Meeting minutes provide a historical record of discussions and decisions, as well as legal protection for organizations. They document assignments, deadlines, and the reasoning behind decisions.
3. Both formal and informal meeting minutes templates are presented. Formal minutes use specific language and structure for official records, while informal minutes quickly summarize key topics, goals, obstacles, and next steps.
The document provides tips for revising business messages to improve readability and conciseness. It recommends:
1. Removing flabby expressions, unnecessary words, and redundant phrases.
2. Using active verbs and avoiding "there is" and "it is" fillers.
3. Organizing information using headings, lists, and parallel structure.
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1) It emphasizes using an audience-oriented and purposeful approach by focusing on the reader, using inclusive language, and addressing their needs and benefits.
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3) It suggests using common words and plain language to ensure the writing is clear and accessible to diverse readers. Adhering to these principles can help create targeted messages that will best suit the intended audience.
The document provides tips and guidelines for composing effective business messages and documents. It discusses strategies for organizing information, such as outlining. It also covers topics like developing parallel structure, using active and passive voice appropriately, avoiding misplaced modifiers, and formatting business letters. The document aims to help readers improve the clarity, structure and professionalism of their written business communications.
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Unit 1.3 SMBL Products and Services (Islamic)Asad Hameed
This document provides information on various Islamic banking products offered by Summit Bank including liability products like current accounts, savings accounts, and certificates, and asset products like murabaha, ijara, and diminishing musharakah. For each product, the document outlines the underlying Shariah contract, key features, and steps in documentation. It also provides dos and don'ts for proper implementation of the products in accordance with Shariah principles.
Unit 1.2 SMBL Products and Services (Conventional)Asad Hameed
SMBL offers a range of liability and deposit products including current accounts, savings accounts, term deposits, and specialized accounts. Key features include profit payment options, financing facilities, debit cards, bill payment services, and insurance benefits depending on the account type and balance maintained. Requirements vary but generally involve a CNIC and minimum deposit amounts.
SATTA MATKA DPBOSS KALYAN MATKA RESULTS KALYAN CHART KALYAN MATKA MATKA RESULT KALYAN MATKA TIPS SATTA MATKA MATKA COM MATKA PANA JODI TODAY BATTA SATKA MATKA PATTI JODI NUMBER MATKA RESULTS MATKA CHART MATKA JODI SATTA COM INDIA SATTA MATKA MATKA TIPS MATKA WAPKA ALL MATKA RESULT LIVE ONLINE MATKA RESULT KALYAN MATKA RESULT DPBOSS MATKA 143 MAIN MATKA KALYAN MATKA RESULTS KALYAN CHART
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Introduction to the Panel on: Pathways and Challenges: AI-Driven Technology in Agri-Food, AI4Food, University of Guelph
“Enhancing Adoption of AI in Agri-food: a Path Forward”, 18 June 2024
Cover Story - China's Investment Leader - Dr. Alyce SUmsthrill
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https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
NIMA2024 | De toegevoegde waarde van DEI en ESG in campagnes | Nathalie Lam |...BBPMedia1
Nathalie zal delen hoe DEI en ESG een fundamentele rol kunnen spelen in je merkstrategie en je de juiste aansluiting kan creëren met je doelgroep. Door middel van voorbeelden en simpele handvatten toont ze hoe dit in jouw organisatie toegepast kan worden.
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In a world where the potential of youth innovation remains vastly untouched, there emerges a guiding light in the form of Norm Goldstein, the Founder and CEO of EduNetwork Partners. His dedication to this cause has earned him recognition as a Congressional Leadership Award recipient.
SATTA MATKA DPBOSS KALYAN MATKA RESULTS KALYAN CHART KALYAN MATKA MATKA RESULT KALYAN MATKA TIPS SATTA MATKA MATKA COM MATKA PANA JODI TODAY BATTA SATKA MATKA PATTI JODI NUMBER MATKA RESULTS MATKA CHART MATKA JODI SATTA COM INDIA SATTA MATKA MATKA TIPS MATKA WAPKA ALL MATKA RESULT LIVE ONLINE MATKA RESULT KALYAN MATKA RESULT DPBOSS MATKA 143 MAIN MATKA KALYAN MATKA RESULTS KALYAN CHART
Prescriptive analytics BA4206 Anna University PPTFreelance
Business analysis - Prescriptive analytics Introduction to Prescriptive analytics
Prescriptive Modeling
Non Linear Optimization
Demonstrating Business Performance Improvement
2. 2
Committed to you
Summit Bank- Islamic Banking
Concept of Pool
Governed by:
State Bank of Pakistan- Islamic Banking Department guidelines dated November 19th 2012
on Profit & Loss Distribution and Pool Management Framework for Islamic Banking
Institutions (IBIs)
3. 3
Committed to you
Summit Bank- Islamic Banking
Concept of Pool
• Pools are created as virtual entity of deposits (Remunerative only) and their Investments
(Investment Assets+ Financing Assets)by the Bank.
• All related (direct) expenses and Incomes also considered part of the Pool.
• Current Deposits (Non-Remunerative) taken on the basis of Qard are considered part of
the Equity and receives same treatment
• Pools are created in conformity with the Framework for specific objectives, investment
strategy, tenor (if any), the risk and reward features, Profit Sharing Ratio (PSR),
weightages and shall be created through a memorandum signed by the authorized senior
executive.
4. 4
Committed to you
Summit Bank- Islamic Banking
Concept of Pool
• In Summit Bank all the remunerative accounts including Savings and Term Deposit
(ISCs) are based on Mudaraba Basis. It is an investment contract in which one party
(Rab ul-Mal ربالمال- ), which is depositor contributes capital while the other party
(Mudarib مضارب- ), which in our case is Summit Bank, manages these funds for
profitable businesses.
• The profit is shared in pre-agreed ratio and distributed as per weightages. Loss (if any),
is borne by the depositor, unless caused by negligence or violation of terms of the
contract by the Mudarib.
• The financing assets of the bank are allocated in various Investment Pools based on
requirement of different ‘Source of funds’.
5. 5
Committed to you
Summit Bank- Islamic Banking
Concept of Pool
• At present following types of Investment pools are in operation:
1. General Pool (PKR & FCY)
2. Treasury / Financial Institutions (F.I.) Pool
3. Equity Pool
4. Special Mudarabah/ Musharkah/ Wakala Pools
5. Islamic Export Refinance Scheme (I.E.R.S.) Pool (Future usage)
6. 6
Committed to you
Summit Bank- Islamic Banking
Concept of Pool
• General Pool (PKR):
Deposit Pools are created based on Funds received from customers in remunerative
schemes such as Saving Accounts, Saving Plus Account, Special Saving Account, E-Saving
Account, Enhanced Saving Account, Business Account, Fixed Deposit, Premium fixed
Account.
• Export Refinance Scheme (ERS) Pool:
The IERS Pool comprises Funds provided by SBP under its Islamic Export Refinance
Scheme, and funds provided by the Bank (either from its own resources or on behalf of its
depositors) under a Musharaka arrangement.
7. 7
Committed to you
Summit Bank- Islamic Banking
Concept of Pool
• Treasury / Financial Institutions Pool:
Funds from financial institution (FI) and SBP can be accepted in these pools under the
mode of Wakalah/Musharakah/Mudaraba. At maturity, normally these F.I. Pools are
dissolved and assets are transferred back to other investment pools.
• Equity Pool:
The Equity Pool consists of funds from the Bank’s equity. The funds are primarily invested
in permissible equities & other permissible Islamic modes. The equity pool may also utilize
the funds received from non-remunerative deposits (both PKR & FX), as these funds are
taken under Qarz given to the Bank by depositors.
8. 8
Committed to you
Summit Bank- Islamic Banking
Concept of Pool
• Special Mudaraba Pools (PKR)
Special Mudaraba Pools are created based on Funds received from customers under
some special arrangements i.e. for higher returns on their Investments, Investment in
specific sectors/ Industry etc. and The funds from these pools are invested under
Islamic modes of finance & Investments.
Due to the nature of the Pool, peculiar Risks and Rewards are associated with these
pools such as higher risk assets, Investments in Equity markets with higher expected
yields etc.
10. 10
Committed to you
Summit Bank- Islamic Banking
Rules for Pool Management
• Capping on Mudarib Share i.e. Mudarib share cannot exceed 50% of Distributable
profit.
• To make the periodic redemption of investment and profit payment to pool participants
possible, at any stage the assets of the pool shall constitute at least 20% saleable assets
(like Ijarah or fixed asset Musharakah etc).
11. 11
Committed to you
Summit Bank- Islamic Banking
Rules for Pool Management
• The Gross Profit will be shared between the bank (as Mudarib) and Depositors (Rabb –
ul- Maal) in a predetermined ratio (%) of the accrued profit.
• Disclosure of this Profit sharing ratio is mandatory on the Mudarib at inception of the
contract and/ or at the beginning of the month
• Summit Bank announces the PSR/Weightages before beginning of each month and is
made available on our website as well as at each Islamic Branch Notice Board.
• Verification : The distribution of profit and loss to the depositors on the basis of these
instructions shall be subject to verification/approval by the Resident Shariah Board
Member.
12. 12
Committed to you
Summit Bank- Islamic Banking
Weightages
Weightage is the value of depositor’s money in the eye of Bank for the purpose of Profit
Distribution only.
• Weightages are assigned based on:
• Investment tenure
• Profit payment option
• Amount tiers
• Product Features
• Market Conditions
• Weightages are used for distributing profits among different types of depositors having
different maturities and amounts. These weightages are available on the website and
notice boards of the bank.
13. 13
Committed to you
Summit Bank- Islamic Banking
Weightages
Exp. Avg Dep Desired Rates Required expenses Calculation
Weighted Avergae
Balance Weightages
(A) (B) (C = A x B) (D) (E = D / A)
Saving 1 10,000,000 5.00% 500,000
(10,000,000 x 500,000) /
7,275,000) 687,285 0.0687
Saving 2 20,000,000 7.00% 1,400,000
(20,000,000 x 1,400,000)
/ 7,725,000 3,848,797 0.1924
ISC 1 25,000,000 7.50% 1,875,000
(25,000,000 x 1,875,000)
/ 7,275,000 6,443,299 0.2577
ISC 2 10,000,000 8.00% 800,000
(10,000,000 x 800,000) /
7,275,000) 1,099,656 0.1100
ISC 3 30,000,000 9.00% 2,700,000
(30,000,000 x 2,700,000)
/ 7,275,000) 11,134,021 0.3711
Total 95,000,000 7,275,000 23,213,058
15. 15
Net Income of Pool (NIP)
Gross Income of Pool (GIP)
Less Direct Expenses
Loss on a/c of Write-offs & sale of Investments
Mudarib Share Depositors’ Profit
Bank’s Profit in proportion to comingled
funds/equity
Distributable Profit
Depositors’ Profit after IRR
Add Hiba if needed
(Maximum upto 60% of Mudarib Share)
Amount distributable amongst depositors
Payment to depositors as per weightages
Investment Risk Reserve
(if any, upto 1% of depositor’s profit)
Deduct/write back: PER
16. 16
Rs in 000
RATIO
Net Equity A 790,651 94%
B) RABULMAAL (DEPOSITORS)
RABULMAAL(DEPOSITORS) - With CRR(Savings + less than 1 year term deposits 49,424 6%
RABULMAAL(DEPOSITORS) - Without CRR(1 year above term deposits) -
B 840,075
CRR
C) CRR ALLOCATION ON CAPITAL C 6,128 5,768
C) CRR ALLOCATION ON DEPOSITS D 6,128 361
c) Funds Available For Distribution
MUDARIB (BANK) 784,883 94%
RABULMAAL (DEPOSITORS) - CRR 49,063 6%
833,946
D) DISTRIBUTABLE PROFIT
MUDARIB
(BANK)
RABULMAAL
(DEPOSITORS) -
With CRR
RABULMAAL
(DEPOSITORS) -
With out CRR
Income from Financing & Investments 5,169 323
Less Staff Financing
Less Direct Expenses (102) (6)
Net Distributable Income 5,067 317
E MUDARIB SHARE Declare Mudarib Share
E X Profit sharing ratio E 31% 98
F DISTRIBUTABLE PROFIT
D - E F 219
G) GENERAL HIBA
Geneal Hiba
percentage of
56 58%
H DISTRIBUTABLE PROFIT TO DEPOSITORS
F + H 275
GENERALPOOL
PROFIT DISTRIBUTION MECHANISM
17. 17
RS in Millions
a b c= a x b
d=total
inome/total
weighted deposit
x weighted
averge each
categoty
e= d/a
Buinsess Account (BA)
0 - 9,999,999,999 - 0.00014 0 - 0.00%
Bachat Savings Account (BSA)
Rs 0 to 4,999,999 3,048 0.00699 21 13 5.02%
Rs 5,000,000 to 9,999,999 0.00838 0 -
Rs 10,000,000 to 24,999,999 0.00943 0 -
Rs 25,000,000 to 49,999,999 33,871 0.01013 343 210 7.28%
Rs 50,000,000 to 99,999,999 0.01048 0 -
Rs 100,000,000 to 249,999,999 0.01153 0 -
Rs 250,000,000 to 499,999,999 0.01153 0 -
Rs 500,000,000 and above 0.01223 0 -
Daily Savings Account (DSA)
Rs 0 to 99,999 215 0.00594 1 0.780 4.27%
Rs 100,000 to 999,999 1,839 0.00664 12 7.450 4.77%
Rs 1,000,000 to 9,999,999 10,329 0.00699 72 44.060 5.02%
1 Month Investment
Rs 0 to 4,999,999 121 0.00908 1 1 6.50%
TOTAL 49,424 1.00000 451 275
AVERAGE
DEPOSITS
WEIGHTAGE
WEIGHTED
AVERAGE
DEPOSITS
ALLOCABLE
INCOME TO
DEPOSITORS
TYPE OF DEPOSITS RATESTIERS
PROFIT DISTRIBUTION AS PER WEIGHATGES
19. 19
Committed to you
Summit Bank- Islamic Banking
Mechanism for Special Rates Through Special Pool(s)
1. On 26/27th of every month, (before three days of month end) Pool Manager will allocate
weightages for Special Pool Accounts in the same manner as being done currently for
General Pool.
2. Projected profit rates based on these weightages will also be developed against all
categories of special pool accounts.
3. Same will be approved by a committee comprising Head of Islamic Banking Division,
Group Head Islamic Banking, Group Head Treasury, Chief Financial Officer and Chief
Operating Officer (suggested shadow ALCO for Islamic Banking) and Resident Shariah
Board Member.
20. 20
Committed to you
Summit Bank- Islamic Banking
Accepting Special-Rate deposits
• All profit bearing accounts are kept in General Pool of assets and liabilities.
• Need of Special Pool arises based on various customer’s desires and Bank’s option i.e.
For the purpose of investment in specific sector or for want of higher profit.
• Deposit in general pool are generally invested in low risk assets and avenues, hence
carry a higher degree of certainty as compared to the Special Pool, where, investment is
made in high return – medium risk assets.
• Those depositors (investors) who seek high returns (commemorating to higher returns
available in conventional banking) will be advised to place their deposits under special
pool with clear disclosures on risks and reward probabilities etc
21. 21
Committed to you
Summit Bank- Islamic Banking
Mechanism for Special Rates Through Special Pool(s)
4. Special Rates will only be allowed as per projected rates in the Special Pool. Multiple rates within
same slab of deposit cannot be entertained as this will not be catered through pool management
and will result in regulatory violation and penal action from regulator.
5. Special Pool Rates will be entertained as per approved scale of Authority i.e. AM, RGM, Treasury
Head/CEO. Each approval should be obtained on prescribed Shariah approved Special Pool rate
approval format (already provided to branches). reached to pool management division on or before
27th of each month for next month (Roll over cases).
i.e. Approval of April 2017 must be obtained/signed by RGM before 27th March 2017 month end.
6. After obtaining approval (signature) from respective RGMs, Branches shall be required to
immediately send these approvals to Pool Management department (existing staff Khwaja Farhan
Usman and Muhammad Saadan Sarwar) so that they can tag the same to special pool and will
obtain acknowledgment from Pool Manager.
7. Pool Manager will mark deposit as ‘Special’ and transfer the deposit from General Pool to Special
Pool.(Note: In case step 6 is not followed, only rack rate will be given to customer and no
exception can be created here)
22. 22
Committed to you
Summit Bank- Islamic Banking
Mechanism for Special Rates Through Special Pool(s)
8. Special pool profit disbursement is now automated and disbursed the special profit
through H-plus with rack rate (Only Daily Saving Accounts), the Islamic Saving
Certificates (generally known as TDR in conventional) are still disbursed manually by
Pool Management.
9. Please note that after automation of special profit distribution branches are not
authorise to feed/enter any special rate in h-plus. They have just obtain approval and
send it to Pool Manager on time.
10. Special Pool Rates offered to customer will be reviewed on monthly basis, therefore,
Branches will obtain monthly approval of their existing special rates on 27th of each
month and will follow steps 6 to onwards on monthly basis.
23. 23
Committed to you
Summit Bank- Islamic Banking
Mechanism for Special Rates Through Special Pool(s)
Notes:
• After Approval of Special rate and its intimation to Pool Manager, Branch will send
letter to its Special rate customer. This letter is already approved by our Legal Council
and Shariah Board. No other format for communication shall be used for Special Pool.
• Though the above calculation method assures a substantial degree of confirmation but
the Rates approved by the authorities will only remain indicative and are not
guaranteed; it may change based on the actual performance of the respective pool,
therefore, the same to be disclosed to customer properly as elaborated in the text of the
advising letter.