roadshow islamic banking by khawaja sb

8/8/2019 Roadshow Islamic Banking by Khawaja Sb

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Zubair MughalChief Executive Officer

AlHuda : Centre of Islamic Banking & Economics

Editor in Chief.

Islamic Banking and Finance News , True Banking.

An Introduction to

Islamic Banking & TakafulAwareness Road show on Islamic Banking and Takaful

From

Khyber to Karachi


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Outline of Presentation

About Nationwide Awareness Compaign on Islamic Banking &Takaful

Introduction to Islamic Banking Riba ( Interest ) Difference between Islamic & Conventional Banking Product of Islamic Banking. Progress of Islamic Banking in Pakistan & Worldwide Takaful


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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

Islam and Shariah


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Sources of Fiqh in Islam (Islamic Finance)

Quran

Sunnah

Ijtehad / Qiyas

Ijamae Ummah


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Basic Difference between Islamic and Conventional Banking

ConventionalBank ClientMoney

Money + Money(interest)

Bank ClientGoods &

Services

money

Islamic Banking


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Riba in Quran

... God has permitted trade and forbidden interest...

(Sura Al-Baqara 2:275)


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Fulfillment of Financial Needs

Own Capital Others Capital

Equity Financing Debt Financing

Murabahah Ijarah

Salam & Istisna etc

Musharakah Modarabahah

Other Products

Human Financial Needs


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PRODUCT TREE

Islamic Banking Modes

Trade BasedModes

Partnership BasedModes

Rental BasedModes

Musharaka(Joint Venture Profit Sharing )

Mudaraba( Trustee Profit Sharing)

Murabaha(Cost Plus Profit Sale)

Musawama(Bargain sale )

Salam(CommoditySale)

Istisna(Sale on Order)

Ijarah( Leasing )Diminishing

Musharaka( Transfer of Ownership)


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ONUSSHIFTS!!

CustomertoHalal Restaurant Owner

Halal Restaurant Owner

toHalal Meat Supplier

Halal Meat SuppliertoHalal Abattoir / Butcher

Customer to Islamic Banker

Islamic Bankerto Shariah Scholars


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Industry Progress in Pakistan

6 Full fledge Islamic Banks

13 Conventional Banks havingSAIBBS

Total IB Branches = 600 +

Year 2001

Meezan Bank

Al BarakaMeezan Bank

Al Baraka

MCB

Alfalah

SCB

Bank AlHabib

Habib AG Zur.

Metropolitan

Bank of KhyberSoneri Bank

2002 2003

Meezan Bank

Al Baraka

MCB

Meezan Bank

Al Baraka

MCB

Alfalah

2 10

2007- 09

Meezan Bank (201)

Al Baraka (30)

MCB (8)

Alfalah(48)

SCB (11)

Bank AlHabib(4 )

HMB(4)

Bank of Khyber(16)

Soneri Bank ( 5)

HBL(1)Bank Islami(102)

DIB (25)

EGIBL (55)

Dawood(32)

NBP(5)

RBS (3)

Askari(22)

UBL (5)

2004 - 06

1843


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Industry Progress & Mkt. Share

174870150289519**No. of Branches

379121212*

Conventional Banks withIslamic Banking Branches

122666*Full Fledge Islamic Banks

0.5%1.3%1.8%2.4%3.6%4.7%%age of Banking Industry

10304872166185Financing. & Invest.

0.4%1.2%1.9%2.8%4.1%5.2 %%age of Banking Industry

8305083169198Deposits

0.5%1.4%2.1%2.9%4.2%5.3 %%age of Banking Industry

134472118235271Total Assets

Dec-03Dec-04Dec-05Dec-06Dec-07Dec-08@Description

(Rs. in Bn)


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City - Wise Breakup


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City - Wise Breakup


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Industry Progress in Pakistan


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Islamic products and services offered by 600+

Financial Institutions around the world

.

United States: 20- Al Manzil Financial Services- American Finance House

- Failaka Investments- HSBC- Ameen Housing Cooperative

Germany:4- Bank Sepah- Commerz Bank- Deutsche Bank

Switzerland:

6UK: 26- HSBC Amanah Finance-Al Baraka InternationalLtd- Takafol UK Ltd- The Halal MutualInvestment Company- J Aron & Co Ltd(Goldman Sachs)

Bahrain: 26- Bahrain Islamic Bank-Al Baraka-ABC Islamic Bank

- CitiIslamic Investment Bank

Malaysia: 492 - Pure Islamic Banks(Bank Islam, BankMuamalat)Rest - conventional banks

Saudi Arabia: 17-Al Rajhi- SAMBA- Saudi Hollandi- Riyadh Bank

UAE: 13- Dubai Islamic Bank- Abu Dhabi Islamic Bank- HSBC Amanah

Qatar: 4

- Qatar Islamic Bank- Qatar International Islamic

Kuwait: 9- Kuwait FinanceHouse

Iran: 8

Egypt: 12- Alwatany Bank of Egypt

- Egyptian Saudi Finance

Indonesia: 4

Sudan: 9

Pakistan: 21

India: 3

Bangladesh:9Turkey: 7- Faisal FinanceInstitution

- Ihlas FinanceHo

use

Yemen: 5


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International Overview

The size of Islamic Financial Industry has reached US$ 900 Bln. and its

growing annually @ 15% - 20 per anum.

80 countries have Islamic Banking Institutions

42 Muslim countries including Bahrain, UAE, Saudi Arabia, Malaysia,

Brunei and Pakistan

39 non-Muslim countries including USA, UK, Canada, Switzerland,

South Africa and Australia


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Leading foreign Banks have opened Islamic

Banking windows or subsidiaries such as:

Standard Chartered Bank

Citibank

HSBC

ABN AMRO

UBS


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In Feb 1999, Dow Jones introduced the Dow Jones Islamic

Market Index (DJIM) of 600 companies world wide whose

business complies with Islamic Shariah laws

At present there are more than 680 Islamic Funds operational

through out the world with a total fund base ofover USD 736

billion


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Governments of Bahrain ,Malaysia and now Pakistan have

issued Islamic Bonds (Sukuk) in order to facilitate Islamic Banks

in managing their liquidity.

Issuance of these bonds has also paved the way for Shariah

compliant Government borrowings


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Institutions like Accounting and Auditing Organization for Islamic

Financial Institutions (AAOIFI) and Islamic Finance Services Board

(IFSB) have been formed.

These institutions are playing a key role in setting up and standardizingShariah , Financial and Accounting standards for Islamic Financial

Institutions.

Due to these collective efforts Islamic banking is now recognized by

IMF, World Bank and Basel Committee.


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Functions and operations are basedon fully man made principles

Functions and operations are basedon Shariah principles

Investor is assured of pre-determined rate of interest

Promote risk-sharing betweenproviderof capital (investor) and

usero

f funds (entrepreneurs)Aim at maximising profit without anyrestrictions

Aim at maximising profit but subjectto Sharia'h restrictions

Creditor-Debtor relationship Partners, investor and traders,buyeror seller relationship

Based on money trading. Money isa medium of exchange and not acommodity

Encourage asset-based financingand based on commodity trading &Services

Conventional banking Islamic banking


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It is almost risk free banking anddepositor has no risk of losing itsmoney because interest isguaranteed.

No right of profit if there is no riskinvolved.

It can charge additional money in

case of defaulters

Islamic banks have no provision to

charge any extra money from thedefaulters

Do not Deal in Zakat ( Non MuslimCountries )

Deal in Zakat

Conventional banking Islamic banking


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About AlHuda

Centre of Islamic Banking and Economics

Forum for the Development of Islamic Banking and Finance.

Training & Education of Islamic Banking and Finance.

Advisory Services & Shariah Certification.

Publication & Research.

Research Section of AlHuda CIBE

Join us as Volunteer

Distance Learning Programs

For Further details

www.alhudacibe.com, www.sukuk.com.pk


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AlHuda International Conferences


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Thank You.

roadshow islamic banking by khawaja sb

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